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<SEC-DOCUMENT>0000950134-02-014240.txt : 20021114
<SEC-HEADER>0000950134-02-014240.hdr.sgml : 20021114
<ACCEPTANCE-DATETIME>20021114081703
ACCESSION NUMBER:		0000950134-02-014240
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		16
CONFORMED PERIOD OF REPORT:	20020930
FILED AS OF DATE:		20021114

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			WILLIAMS COMPANIES INC
		CENTRAL INDEX KEY:			0000107263
		STANDARD INDUSTRIAL CLASSIFICATION:	NATURAL GAS TRANSMISSION [4922]
		IRS NUMBER:				730569878
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-04174
		FILM NUMBER:		02821862

	BUSINESS ADDRESS:	
		STREET 1:		ONE WILLIAMS CTR
		CITY:			TULSA
		STATE:			OK
		ZIP:			74172
		BUSINESS PHONE:		9185732000

	MAIL ADDRESS:	
		STREET 1:		ONE WILLIAM CENTER
		CITY:			TULSA
		STATE:			OK
		ZIP:			74172

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	WILLIAMS BROTHERS COMPANIES
		DATE OF NAME CHANGE:	19710817
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>d00961e10vq.txt
<DESCRIPTION>FORM 10-Q
<TEXT>
<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

(X)            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002
                               -------------------------------------------------
                                       OR

( )           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

For the transition period from                        to
                               ----------------------    -----------------------

Commission file number 1-4174
                       ---------------------------------------------------------

                          THE WILLIAMS COMPANIES, INC.
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             DELAWARE                                     73-0569878
- ---------------------------------------     ------------------------------------
     (State of Incorporation)               (IRS Employer Identification Number)


        ONE WILLIAMS CENTER
           TULSA, OKLAHOMA                                  74172
- ---------------------------------------     ------------------------------------
(Address of principal executive office)                   (Zip Code)


Registrant's telephone number:                         (918) 573-2000
                                            ------------------------------------


                                    NO CHANGE
- --------------------------------------------------------------------------------
         Former name, former address and former fiscal year, if changed
                               since last report.


    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                  Yes  X   No
                                      ---     ---

    Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

              Class                           Outstanding at October 31, 2002
- ---------------------------------------     ------------------------------------
     Common Stock, $1 par value                      516,666,268 Shares


<PAGE>

                          The Williams Companies, Inc.
                                      Index


<Table>
<Caption>
Part I.   Financial Information                                                                               Page
                                                                                                             ------
<S>                                                                                                          <C>
     Item 1.  Financial Statements

        Consolidated Statement of Operations--Three and Nine Months Ended September 30, 2002 and 2001            2

        Consolidated Balance Sheet--September 30, 2002 and December 31, 2001                                     3

        Consolidated Statement of Cash Flows--Nine Months Ended September 30, 2002 and 2001                      4

        Notes to Consolidated Financial Statements                                                               5

     Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations             32

     Item 3.  Quantitative and Qualitative Disclosures about Market Risk                                        55

     Item 4.  Controls and Procedures                                                                           55

Part II.  Other Information                                                                                     56

     Item 1.  Legal Proceedings

     Item 2.  Changes in Securities and Use of Proceeds

     Item 6.  Exhibits and Reports on Form 8-K
</Table>

     Certain matters discussed in this report, excluding historical information,
include forward-looking statements - statements that discuss Williams' expected
future results based on current and pending business operations. Williams makes
these forward-looking statements in reliance on the safe harbor protections
provided under the Private Securities Litigation Reform Act of 1995.

     Forward-looking statements can be identified by words such as
"anticipates," "believes," "expects," "planned," "scheduled" or similar
expressions. Although Williams believes these forward-looking statements are
based on reasonable assumptions, statements made regarding future results are
subject to a number of assumptions, uncertainties and risks that may cause
future results to be materially different from the results stated or implied in
this document. Additional information about issues that could lead to material
changes in performance is contained in The Williams Companies, Inc.'s 2001 Form
10-K.



                                       1
<PAGE>

                          The Williams Companies, Inc.
                      Consolidated Statement of Operations
                                   (Unaudited)

<Table>
<Caption>
                                                                           Three months                      Nine months
(Dollars in millions, except per-share amounts)                        ended September 30,               ended September 30,
- -----------------------------------------------                   -----------------------------     -----------------------------
                                                                      2002             2001*            2002             2001*
                                                                  ------------     ------------     ------------     ------------
<S>                                                               <C>              <C>              <C>              <C>

Revenues:
    Energy Marketing & Trading                                    $     (219.2)    $      493.1     $      (73.9)    $    1,429.0
    Gas Pipeline                                                         381.4            335.1          1,106.4          1,048.5
    Exploration & Production                                             219.3            160.6            677.8            410.2
    Midstream Gas & Liquids                                              501.8            414.9          1,339.8          1,506.8
    Williams Energy Partners                                             107.5            110.8            303.6            310.7
    Petroleum Services                                                 1,170.9          1,281.9          3,266.7          4,077.6
    International                                                           .7              1.1              3.1              2.6
    Other                                                                 14.8             17.9             47.1             57.4
    Intercompany eliminations                                            (73.3)           (88.1)          (152.4)          (184.4)
                                                                  ------------     ------------     ------------     ------------
       Total revenues                                                  2,103.9          2,727.3          6,518.2          8,658.4
                                                                  ------------     ------------     ------------     ------------
Segment costs and expenses:
    Costs and operating expenses                                       1,792.7          1,814.8          5,145.6          6,005.8
    Selling, general and administrative expenses                         218.7            238.4            614.0            625.7
    Other (income) expense - net                                         318.1              7.7            486.8            (42.7)
                                                                  ------------     ------------     ------------     ------------
       Total segment costs and expenses                                2,329.5          2,060.9          6,246.4          6,588.8
                                                                  ------------     ------------     ------------     ------------
General corporate expenses                                                44.1             32.4            116.4             88.8
                                                                  ------------     ------------     ------------     ------------
Operating income (loss):
    Energy Marketing & Trading                                          (316.6)           380.5           (458.1)         1,130.5
    Gas Pipeline                                                         163.7             89.9            438.2            378.4
    Exploration & Production                                             230.3             60.1            431.4            149.6
    Midstream Gas & Liquids                                               96.7             68.2            197.5            137.9
    Williams Energy Partners                                              13.4             27.1             69.8             83.6
    Petroleum Services                                                  (405.4)            42.4           (395.4)           189.4
    International                                                         (4.0)            (3.4)           (11.0)            (9.2)
    Other                                                                 (3.7)             1.6              (.6)             9.4
    General corporate expenses                                           (44.1)           (32.4)          (116.4)           (88.8)
                                                                  ------------     ------------     ------------     ------------
       Total operating income (loss)                                    (269.7)           634.0            155.4          1,980.8

Interest accrued                                                        (366.3)          (179.5)          (848.8)          (507.1)
Interest capitalized                                                       7.8             12.1             20.0             32.6
Interest rate swap loss                                                  (52.2)              --           (125.2)              --
Investing income (loss):
   Estimated loss on realization of amounts due from
       Williams Communications Group, Inc.                               (22.9)              --           (269.9)              --
   Other                                                                  85.3            (69.6)           161.5             39.9
Minority interest in income and preferred returns
   of consolidated subsidiaries                                          (23.7)           (22.2)           (60.6)           (70.4)
Other income - net                                                         1.2              1.9             20.6             12.2
                                                                  ------------     ------------     ------------     ------------
Income (loss) from continuing operations before income taxes            (640.5)           376.7           (947.0)         1,488.0
Provision (benefit) for income taxes                                    (231.8)           182.8           (313.0)           615.2
                                                                  ------------     ------------     ------------     ------------
Income (loss) from continuing operations                                (408.7)           193.9           (634.0)           872.8

Income (loss) from discontinued operations                               114.6             27.4             98.5           (112.8)
                                                                  ------------     ------------     ------------     ------------
Net income (loss)                                                       (294.1)           221.3           (535.5)           760.0

Preferred stock dividends                                                  6.8               --             83.3               --
                                                                  ------------     ------------     ------------     ------------
Income (loss) applicable to common stock                          $     (300.9)    $      221.3     $     (618.8)    $      760.0
                                                                  ============     ============     ============     ============

Basic earnings (loss) per common share:
    Income (loss) from continuing operations                      $       (.80)    $        .39     $      (1.39)    $       1.78
    Income (loss) from discontinued operations                             .22              .05              .19             (.23)
                                                                  ------------     ------------     ------------     ------------
    Net income (loss)                                             $       (.58)    $        .44     $      (1.20)    $       1.55
                                                                  ============     ============     ============     ============
    Average shares (thousands)                                         516,901          502,877          516,688          489,813

Diluted earnings (loss) per common share:
    Income (loss) from continuing operations                      $       (.80)    $        .39     $      (1.39)    $       1.77
    Income (loss) from discontinued operations                             .22              .05              .19             (.23)
                                                                  ------------     ------------     ------------     ------------
    Net income (loss)                                             $       (.58)    $        .44     $      (1.20)    $       1.54
                                                                  ============     ============     ============     ============
    Average shares (thousands)                                         516,901          506,165          516,688          493,812

Cash dividends per common share                                   $        .01     $        .18     $        .41     $        .48
</Table>

* Certain amounts have been restated or reclassified as described in Note 2 of
  Notes to Consolidated Financial Statements.

                             See accompanying notes.

                                       2
<PAGE>

                          The Williams Companies, Inc.
                           Consolidated Balance Sheet
                                   (Unaudited)


<Table>
<Caption>
(Dollars in millions, except per-share amounts)                                             September 30,      December 31,
- -----------------------------------------------                                                  2002              2001*
                                                                                            -------------      ------------
<S>                                                                                          <C>               <C>

ASSETS
Current assets:
   Cash and cash equivalents                                                                 $    1,292.7      $    1,274.9
   Restricted cash                                                                                  324.0                --
   Accounts and notes receivable less allowance of  $223.7 ($252.2 in 2001)                       3,437.5           3,005.2
   Inventories                                                                                      820.2             804.2
   Energy risk management and trading assets                                                      4,410.8           6,514.1
   Margin deposits                                                                                  660.8             213.8
   Assets of discontinued operations                                                                779.6             214.6
   Deferred income taxes                                                                            253.6             440.6
   Other                                                                                            780.7             470.6
                                                                                             ------------      ------------
        Total current assets                                                                     12,759.9          12,938.0

Restricted cash                                                                                     136.2                --
Investments                                                                                       1,641.6           1,562.9

Property, plant and equipment, at cost                                                           20,443.6          19,633.6
Less accumulated depreciation and depletion                                                      (5,056.7)         (4,377.6)
                                                                                             ------------      ------------
                                                                                                 15,386.9          15,256.0

Energy risk management and trading assets                                                         3,583.0           4,209.4
Goodwill, net                                                                                     1,087.3           1,164.3
Assets of discontinued operations                                                                      --           2,658.9
Receivables from Williams Communications Group, Inc. less allowance of
   $2,084.9 ($103.2 in 2001)                                                                        277.0             137.2
Other assets and deferred charges                                                                   995.8             979.5
                                                                                             ------------      ------------
        Total assets                                                                         $   35,867.7      $   38,906.2
                                                                                             ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Notes payable                                                                             $      929.0      $    1,424.5
   Accounts payable                                                                               2,745.5           2,861.5
   Accrued liabilities                                                                            1,884.2           1,825.8
   Liabilities of discontinued operations                                                           340.7             211.6
   Energy risk management and trading liabilities                                                 4,330.8           5,525.7
   Guarantees and payment obligations related to Williams Communications Group, Inc.                 51.2             645.6
   Long-term debt due within one year                                                             1,393.0             999.8
                                                                                             ------------      ------------
        Total current liabilities                                                                11,674.4          13,494.5

Long-term debt                                                                                   12,293.6           8,702.8
Deferred income taxes                                                                             3,188.9           3,689.9
Liabilities of discontinued operations                                                                 --             864.3
Energy risk management and trading liabilities                                                    1,994.7           2,936.6
Guarantees and payment obligations related to Williams Communications Group, Inc.                      --           1,120.0
Other liabilities and deferred income                                                               927.6             905.9
Contingent liabilities and commitments (Note 12)
Minority interests in consolidated subsidiaries                                                     419.5             171.8
Preferred interests in consolidated subsidiaries                                                       --             976.4
Stockholders' equity:
   Preferred stock, $1 per share par value, 30 million shares authorized,
     1.5 million issued in 2002, none in 2001                                                       271.3                --
   Common stock, $1 per share par value, 960 million shares authorized,
     519.7 million issued in 2002, 518.9 million issued in 2001                                     519.7             518.9
   Capital in excess of par value                                                                 5,169.0           5,085.1
   Retained earnings (deficit)                                                                     (653.2)            199.6
   Accumulated other comprehensive income                                                           131.2             345.1
   Other                                                                                            (30.4)            (65.0)
                                                                                             ------------      ------------
                                                                                                  5,407.6           6,083.7
   Less treasury stock (at cost), 3.2 million shares of common stock in 2002
     and 3.4 million in 2001                                                                        (38.6)            (39.7)
                                                                                             ------------      ------------
        Total stockholders' equity                                                                5,369.0           6,044.0
                                                                                             ------------      ------------
        Total liabilities and stockholders' equity                                           $   35,867.7      $   38,906.2
                                                                                             ============      ============
</Table>

* Certain amounts have been restated or reclassified as described in Note 2 of
  Notes to Consolidated Financial Statements.

                             See accompanying notes.

                                       3
<PAGE>

                          The Williams Companies, Inc.
                      Consolidated Statement of Cash Flows
                                   (Unaudited)

<Table>
<Caption>
(Millions)                                                                                        Nine months ended September 30,
- ----------                                                                                        -------------------------------
                                                                                                      2002               2001*
                                                                                                  ------------       ------------
<S>                                                                                               <C>              <C>
OPERATING ACTIVITIES:
   Income (loss) from continuing operations                                                        $     (634.0)    $      872.8
   Adjustments to reconcile to cash provided (used) by operations:
      Depreciation, depletion and amortization                                                            607.8            479.2
      Provision (benefit) for deferred income taxes                                                      (270.1)           385.2
      Payments of guarantees and payment obligations related to Williams Communications
         Group, Inc.                                                                                     (753.9)              --
      Estimated loss on realization of amounts due from Williams Communications Group, Inc.               269.9               --
      Provision for loss on property and other assets                                                     573.7            117.8
      Net gain on dispositions of assets                                                                 (204.6)           (88.9)
      Minority interest in income and preferred returns of consolidated subsidiaries                       60.6             70.4
      Tax benefit of stock-based awards                                                                     2.6             26.3
      Accrual for interest in note payable                                                                 21.0               --
      Cash provided (used) by changes in current assets and liabilities:
         Restricted cash                                                                                 (151.9)              --
         Accounts and notes receivable                                                                   (447.5)          (776.4)
         Inventories                                                                                      (28.1)           (10.4)
         Margin deposits                                                                                 (447.0)           423.0
         Other current assets                                                                            (454.2)           (20.1)
         Accounts payable                                                                                (163.2)           175.0
         Accrued liabilities                                                                               (5.9)           482.2
      Changes in current energy risk management and trading assets and liabilities                        908.3           (783.2)
      Changes in noncurrent energy risk management and trading assets and liabilities                    (315.5)          (711.1)
      Changes in noncurrent restricted cash                                                              (103.8)              --
      Other, including changes in noncurrent assets and liabilities                                        10.1              19.4
                                                                                                   ------------     ------------
         Net cash provided (used) by operating activities of continuing operations                     (1,525.7)           661.2
         Net cash provided by operating activities of discontinued operations                             190.5            146.0
                                                                                                   ------------     ------------
         Net cash provided (used) by operating activities                                              (1,335.2)           807.2
                                                                                                   ------------     ------------
FINANCING ACTIVITIES:
   Proceeds from notes payable                                                                          1,608.0          1,830.0
   Payments of notes payable                                                                           (2,303.0)        (3,925.7)
   Proceeds from long-term debt                                                                         3,490.0          3,503.8
   Payments of long-term debt                                                                          (1,948.7)          (979.7)
   Proceeds from issuance of common stock                                                                  25.1          1,397.2
   Proceeds from issuance of preferred stock                                                              271.3               --
   Dividends paid                                                                                        (218.8)          (237.9)
   Proceeds from sale of limited partner units of consolidated partnership                                279.3             92.5
   Payment of Williams obligated mandatorily redeemable preferred securities of Trust
      holding only Williams indentures                                                                       --           (194.0)
   Payments of debt issuance costs                                                                       (186.9)           (44.0)
   Retirement of preferred interest in consolidated subsidiary                                           (135.0)              --
   Payments/dividends to preferred and minority interests                                                 (58.0)           (41.8)
   Changes in restricted cash                                                                            (203.8)              --
   Other--net                                                                                             (23.7)             (.2)
                                                                                                   ------------     ------------
         Net cash provided by financing activities of continuing operations                               595.8          1,400.2
         Net cash provided (used) by financing activities of discontinued operations                      (97.0)         1,386.8
                                                                                                   ------------     ------------
         Net cash provided by financing activities                                                        498.8          2,787.0
                                                                                                   ------------     ------------
INVESTING ACTIVITIES:
   Property, plant and equipment:
      Capital expenditures                                                                             (1,383.5)        (1,151.1)
      Proceeds from dispositions                                                                          456.1             23.6
      Changes in accounts payable and accrued liabilities                                                  21.6              4.4
   Acquisition of business (primarily property, plant & equipment), net of cash acquired                     --         (1,321.8)
   Purchases of investments/advances to affiliates                                                       (284.3)          (417.8)
   Proceeds from sales of businesses                                                                    1,920.2            164.4
   Proceeds from dispositions of investments and other assets                                              98.1            241.7
   Proceeds received on advances to affiliates                                                             75.0             20.0
   Purchase of assets subsequently leased to seller                                                        (8.9)          (276.0)
   Other--net                                                                                              28.8             12.1
                                                                                                   ------------     ------------
         Net cash provided (used) by investing activities of continuing operations                        923.1         (2,700.5)
         Net cash used by investing activities of discontinued operations                                 (95.1)        (1,594.0)
                                                                                                   ------------     ------------
         Net cash provided (used) by investing activities                                                 828.0         (4,294.5)
                                                                                                   ------------     ------------
Cash of discontinued operations at spinoff                                                                   --            (96.5)
                                                                                                   ------------     ------------
Decrease in cash and cash equivalents                                                                      (8.4)          (796.8)
Cash and cash equivalents at beginning of period**                                                      1,301.1          1,210.7
                                                                                                   ------------     ------------
Cash and cash equivalents at end of period**                                                       $    1,292.7     $      413.9
                                                                                                   ============     ============
</Table>

*    Amounts have been restated or reclassified as described in Note 2 of Notes
     to Consolidated Financial Statements.

**   Includes cash and cash equivalents of discontinued operations of $26.2
     million, $37.3 million and $235.3 million at December 31, 2001,
     September 30, 2001 and December 31, 2000, respectively.

                             See accompanying notes.

                                       4
<PAGE>
                          The Williams Companies, Inc.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

1. General
- --------------------------------------------------------------------------------

Recent Developments

     Recent events have significantly impacted the Company's operations and will
have a continuing impact on the Company's operations in the future. In the first
quarter of 2002, as a result of credit issues facing the Company and the
assumption of payment obligations and performance on guarantees associated with
Williams Communications Group, Inc. (WCG), Williams announced plans to
strengthen its balance sheet. During the second quarter, the results of the
Energy Marketing & Trading business were not profitable reflecting market
movements against its portfolio and an absence of origination activities. These
unfavorable conditions were in large part a result of market concerns about
Williams' credit and liquidity situation and limited Energy Marketing &
Trading's ability to manage market risk and exercise hedging strategies as
market liquidity deteriorated. During third-quarter 2002, Williams' credit
ratings were lowered below investment grade. Williams was also unable to
complete a renewal of its unsecured short-term bank credit facility. Following
these events, Williams sold assets in July 2002 receiving net proceeds of
approximately $1.5 billion, obtained secured credit facilities totaling $1.3
billion and amended its revolving credit facility to make it secured. Also
during the third quarter, Williams completed additional asset sales resulting in
net cash proceeds of approximately $466 million. Losses continued in the third
quarter from the Energy Marketing & Trading business reflecting the continued
negative market movements against the portfolio, the absence of origination
activities and the adverse affects of Williams' overall liquidity and credit
ratings issues, which impact Energy Marketing & Trading's ability to enter into
price risk management and hedging activities.

     The Company has scheduled debt retirements due through first quarter 2004
of approximately $4.1 billion and anticipates significant additional asset sales
to meet its liquidity needs over that period. The Company has also reduced
projected levels of capital expenditures and the board of directors reduced the
quarterly dividend on common stock for the third quarter from the prior level of
$.20 per share to $.01 per share. The Company has also announced its intentions
to reduce its commitment to the Energy Marketing & Trading business, which could
be realized by entering into a joint venture with a third party or through the
sale of a portion or all of the marketing and trading portfolio.

     While the Company believes that these actions will significantly address
liquidity and credit concerns, the resulting downsizing of the Company will have
a significant impact on the Company's future financial position and results of
operations. The Company's ability to maintain liquidity and future operations
could be significantly impacted by other events, including the possibility that
the asset sales and reduction of the Company's commitment to its Energy
Marketing & Trading business will not be accomplished as currently anticipated.
The timing and amount of proceeds to be realized from the sale of assets is
subject to several variables, including negotiations with prospective buyers,
industry conditions, lender consents to the sale of collateral, regulatory
approvals and Williams' assessment of its short and long-term liquidity
requirements. The reduction of the Company's commitment to Energy Marketing &
Trading activities could be affected by the willingness of buyers and/or
potential partners to enter into transactions with Williams, giving
consideration to the current condition of the energy trading sector and
liquidity and credit constraints of Williams. As a result of these factors, the
proceeds that may be realized from the sales of assets, including the trading
portfolio, may be less than the carrying values at September 30, 2002, and could
result in additional impairments and losses. Additional information on these
events is discussed in the accompanying notes and in Management's Discussion and
Analysis.

Other

     The accompanying interim consolidated financial statements of The Williams
Companies, Inc. (Williams) do not include all notes in annual financial
statements and therefore should be read in conjunction with the consolidated
financial statements and notes thereto in Williams' Current Report on Form 8-K
dated May 28, 2002. The accompanying unaudited financial statements include all
normal recurring adjustments and others, including asset impairments and loss
accruals, which, in the opinion of Williams' management, are necessary to
present fairly its financial position at September 30, 2002, its results of
operations for the three and nine months ended September 30, 2002 and 2001, and
its cash flows for the nine months ended September 30, 2002 and 2001.

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in the consolidated
financial statements and accompanying notes. Actual results could differ from
those estimates.

2. Basis of presentation
- --------------------------------------------------------------------------------

     In accordance with the provisions related to discontinued operations within
Statement of Financial Accounting Standard (SFAS) No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," the accompanying consolidated
financial statements and notes reflect the results of operations, financial
position and cash flows of the following components as discontinued operations
(see Note 7):

     o    Central natural gas pipeline, previously one of Gas Pipeline's
          segments
     o    The Colorado soda ash mining operations, previously part of the
          International segment
     o    Two natural gas liquids pipeline systems, Mid-American Pipeline and
          Seminole Pipeline, previously part of the Midstream Gas & Liquids
          segment
     o    Kern River Gas Transmission (Kern River), previously one of Gas
          Pipeline's segments

     Unless indicated otherwise, the information in the Notes to the
Consolidated Financial Statements relates to the continuing operations of
Williams. Williams expects that other components of its business will be
classified as discontinued operations in the future as the sales of those assets
occur.

     Certain other statement of operations, balance sheet and cash flow amounts
have been reclassified to conform to the current classifications.


                                       5
<PAGE>

Notes (Continued)


3. Asset sales, impairments and other accruals
- --------------------------------------------------------------------------------

     In first-quarter 2002, Williams offered an enhanced-benefit early
retirement option to certain employee groups. The deadline for electing the
early retirement option was April 26, 2002. The nine months ended September 30,
2002, reflects $30 million of expense associated with the early retirement
option, of which $24 million is recorded in selling, general and administrative
expenses and the remaining in general corporate expenses.

     In a Form 8-K filed on May 28, 2002, Williams announced a plan that was
designed to further improve the company's financial position and more narrowly
focus its business strategy within its major business units. Part of this plan
included the generation of $1.5 billion to $3 billion of proceeds from the sale
of assets and/or businesses. Williams is continuing to evaluate the assets
and/or businesses that fit within its more narrowly focused business strategy,
and has identified certain assets and/or businesses, that are
more-likely-than-not to be disposed of before the end of their previously
estimated useful lives. The assets and/or businesses that did not meet the
criteria to be classified as held for sale at September 30, 2002, (see Note 2)
were evaluated for recoverability on a held-for-use basis pursuant to Statement
of Financial Accounting Standards (SFAS) No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." A probability-weighted approach was used to
consider the likelihood of possible outcomes including sale in the near term and
hold for the remaining estimated useful life. Key variables, including
management's estimate of fair value, probability of sale and selection of those
assets to be marketed for sale continued to be updated in third-quarter 2002.
For those assets and/or businesses that were not recoverable based on
undiscounted cash flows, an impairment loss was recognized in third-quarter 2002
based on management's estimate of fair value.

     During second-quarter 2002, Williams identified the travel centers as a
business that does not fit within the new business strategy and began actively
marketing that business for sale. Probability-weighted undiscounted cash flows
for asset recoverability were estimated on a facility-by-facility basis. Fair
value estimates for the travel centers with an indicated impairment were based
on management's estimate of discounted cash flows using a probability-weighted
approach which considered the likelihood of sale and related sale proceeds and
the possibility of holding the asset for its remaining estimated useful life.
The $27 million loss recognized in second-quarter 2002 by Petroleum Services
includes both impairment charges related to stores owned by Williams and
liability accruals associated with a residual value guarantee of certain travel
centers under an operating lease. This operating lease is now considered a
capitalized lease due to changes in July 2002. During third quarter 2002,
management revised its assessment regarding the likelihood of sale and estimated
fair value of these facilities, reflective of information from the reserve
auction process and revision to the company's mix and timing of specific asset
sales. Petroleum Services recorded a $112.1 million impairment charge in
third-quarter 2002, to reflect the impact of these changed assumptions upon the
September 30, 2002 impairment valuation. Fair value was based on the expected
sales price pursuant to an agreement to sell the travel centers for $190 million
in cash, which was announced October 30, 2002.

     During the second quarter of 2002, Williams announced its intention to sell
its refining operations as part of the strategy to improve the company's
financial position.  These assets were part of a reserve auction process, for
which bids were received during third-quarter 2002.  An impairment evaluation
performed for each of the refining operations resulted in a third quarter
impairment charge of $176.2 million associated with the Midsouth refining
long-lived assets, which was recorded in Petroleum Services.  Fair value was
based on management's assessment of the expected sales price pursuant to
information from the reserve auction process using a probability-weighted
approach.

     The Company is currently engaged in a reserve auction process for its
bio-energy facilities, which are primarily engaged in the production and
marketing of ethanol. During third-quarter 2002, management revised its
assessment of the likelihood of sale and estimated fair value of these
facilities, also reflective of the maturation of the reserve auction process and
revisions to the company's mix and timing of specific asset sales. As a result,
the September 30, 2002 measure of probability-weighted undiscounted cash flows
were below the carrying cost of the long-lived assets, resulting in a
third-quarter impairment charge of $144.3 million, including $21.6 million
related to goodwill, recorded by Petroleum Services. Fair value was based upon
management's estimate of undiscounted cash flows using a probability-weighted
approach considering the current information from the reserve auction process.

     Additionally, as Williams has more narrowly focused its business strategy
and reduced planned capital spending, certain projects will not be further
developed. As a result, Williams has written-off capitalized costs and accrued
for estimated costs associated with termination of these projects. For the three
and nine months ended September 30, 2002, Energy Marketing & Trading recorded
charges totalling $11.5 million and $95.2 million, respectively, including
write-offs associated with a terminated power plant project and accruals for
commitments for certain assets that were previously planned to be used in power
projects.



                                       6
<PAGE>

Notes (Continued)


     Energy Marketing & Trading recognized a $57.5 million goodwill impairment
loss in second-quarter 2002 reflecting deteriorating market conditions in the
merchant energy sector in which it operates and Energy Marketing & Trading's
resulting announcement in June 2002 to scale back its own energy marketing and
risk management business. The fair value of Energy Marketing & Trading used to
calculate the goodwill impairment loss was based on the estimated fair value of
the trading portfolio inclusive of the fair value of contracts with affiliates,
which are not reflected at fair value in the financial statements. The fair
value of these contracts was estimated using a discounted cash flow model with
natural gas pricing assumptions based on current market information. The
remaining goodwill was evaluated for impairment in third-quarter 2002 and no
impairment was required based on management's estimate of the fair value of
Energy Marketing & Trading at September 30, 2002.

     Significant gains or losses from asset sales, impairments and other
accruals included in other (income) expense - net within segment costs and
expenses are included in the following table.

<Table>
<Caption>
                                                            Three months ended                 Nine months ended
                                                              September 30,                      September 30,
                                                      ------------------------------     ------------------------------
         (Millions)                                       2002              2001             2002              2001
         ----------                                   ------------      ------------     ------------      ------------
<S>                                                   <C>               <C>              <C>               <C>
         ENERGY MARKETING & TRADING
           Net loss accruals and write-offs           $       11.5      $         --     $       95.2      $         --
           Impairment of goodwill                               --                --             57.5                --
         EXPLORATION & PRODUCTION
           Gain on sale of natural gas
             production properties in
                Wyoming                                     (122.3)               --           (122.3)               --
           Gain on sale of natural gas
             production properties in
                Anadarko basin                               (21.6)               --            (21.6)               --
         MIDSTREAM GAS & LIQUIDS
           Impairment of south Texas
             assets                                             --               4.2               --              15.1
         PETROLEUM SERVICES
           Impairment of Midsouth refinery                   176.2                --            176.2                --
           Impairment of bio-energy
             facilities, including
             goodwill impairment                             144.3                --            144.3                --
           Gain on sale of certain
             convenience stores                                 --                --               --             (72.1)
           Impairment of end-to-end
             mobile computing systems
                business                                        --                --               --              11.2
           Impairment and other loss
             accruals for travel centers                     112.1                --            139.1                --
</Table>

4. Receivables from Williams Communications Group, Inc. and other related
information
- --------------------------------------------------------------------------------

Background

     At December 31, 2001, Williams had financial exposure from WCG of $375
million of receivables and $2.21 billion of guarantees and payment obligations.
Williams determined it was probable it would not fully realize the $375 million
of receivables, and it would be required to perform under its $2.21 billion of
guarantees and payment obligations. Williams developed an estimated range of
loss related to its total WCG exposure and management believed that no loss
within that range was more probable than another. For 2001, Williams recorded
the $2.05 billion minimum amount of the range of loss from its financial
exposure to WCG, which was reported in the Consolidated Statement of Operations
as a $1.84 billion pre-tax charge to discontinued operations and a $213 million
pre-tax charge to continuing operations. The charge to discontinued operations
of $1.84 billion included a $1.77 billion minimum amount of the estimated range
of loss from performance on $2.21 billion of guarantees and payment obligations.
The charge to continuing operations of $213 million included estimated losses
from an assessment of the recoverability of the carrying amounts of the $375
million of receivables and a remaining $25 million investment in WCG common
stock.



                                       7
<PAGE>

Notes (Continued)


     Williams, prior to the spinoff of WCG, provided indirect credit support for
$1.4 billion of WCG's Note Trust Notes. On March 5, 2002, Williams received the
requisite approvals on its consent solicitation to amend the terms of the WCG
Note Trust Notes. The amendment, among other things, eliminated acceleration of
the WCG Note Trust Notes due to a WCG bankruptcy or from a Williams credit
rating downgrade. The amendment also affirmed Williams' obligation for all
payments due with respect to the WCG Note Trust Notes, which mature in March
2004, and allows Williams to fund such payments from any available sources. In
July 2002, Williams acquired substantially all of the WCG Note Trust Notes by
exchanging $1.4 billion of Williams Senior Unsecured 9.25 percent Notes due
March 2004. In November 2002, Williams acquired the remaining outstanding
WCG Note Trust Notes.

     Williams also provided a guarantee of WCG's obligations under a 1998
transaction in which WCG entered into a lease agreement covering a portion of
its fiber-optic network. WCG had an option to purchase the covered network
assets during the lease term at an amount approximating the lessor's cost of
$750 million. On March 8, 2002, WCG exercised its option to purchase the covered
network assets. On March 29, 2002, Williams funded the purchase price of $754
million and became entitled to an unsecured note from WCG for the same amount.

     Williams has also provided guarantees on certain other performance
obligations of WCG totaling approximately $57 million.

2002 Evaluation

     At September 30, 2002, Williams had receivables and claims from WCG of
$2.15 billion arising from Williams affirming its payment obligation on the $1.4
billion of WCG Note Trust Notes and Williams paying $754 million under the WCG
lease agreement. At September 30, 2002, Williams also had $334 million of
previously existing receivables. In third-quarter 2002, Williams recorded in
continuing operations a pre-tax charge of $22.9 million related to WCG,
including an assessment of the recoverability of its receivables and claims from
WCG. For the nine months ended September 30, 2002, Williams has recorded in
continuing operations pre-tax charges of $269.9 million related to the recovery
of these receivables and claims. At September 30, 2002, Williams estimates that
approximately $2.2 billion of the $2.5 billion of receivables from WCG are not
recoverable.

     On April 22, 2002, WCG filed for bankruptcy protection under Chapter 11 of
the U.S. Bankruptcy Code. On October 15, 2002, WCG consummated its Chapter 11
Plan of Reorganization (Plan). The Plan was confirmed by the United States
Bankruptcy Court for the Southern District of New York (Court) on September 30,
2002.

     The Plan includes (1) mutual releases, effective October 15, 2002, between
WCG (and all of its affiliates and each of their present and former directors,
officers, employees and agents), the Official Creditors Committee and Williams
(and all of its affiliates and each of their present and former directors,
officers, employees and agents), which forever bar causes of action against
Williams that are based in whole or in part on any act, omission, event,
condition or thing in existence or that occurred in whole or in part prior to
October 15, 2002, and arising out of or relating in any way to WCG or its
present or former assets; (2) a channeling injunction, effective October 15,
2002, which enjoins the holders of unsecured claims against WCG from taking any
action to assert, seek or obtain a recovery from Williams; (3) the sale of
certain of Williams' claims against WCG to Leucadia National Corporation
(Leucadia) for $180 million; and (4) the sale by Williams to WCG of the Williams
Technology Center and certain related assets for (a) a seven and one-half year
promissory note in the principal amount of $100 million with interest at 7
percent (Long Term Note) secured by a mortgage on the Williams Technology Center
and certain other collateral, and (b) a four year promissory note (which may be
pre-paid without penalty) with face amount of $74.4 million and an original
principal amount of $44.8 million (Short Term Note) secured by a mortgage on the
Williams Technology Center and certain other collateral. Interest on the
principal amount of the Short Term Note is capitalized on December 31 of each
year beginning in 2003 and accrues at the following rates: 10 percent interest
from October 15, 2002 to December 31, 2003; 12 percent interest from January 1,
2004 to December 31, 2004; 14 percent interest from January 1, 2005 to December
31, 2005; and 16 percent interest from January 1, 2006 to December 29, 2006. The
Plan does not extinguish or eliminate claims that WCG shareholders have made
against Williams and its directors and officers.

     Because of the timing of applications made by WilTel Communications Group,
Inc. formerly WCG (WilTel), to the Federal Communication Commission (FCC) for
the transfer by WCG to WilTel of certain telecommunications licenses, pursuant
to the Plan and the Court's order confirming the Plan, certain components of the
Plan (including the following) were placed into escrow pending the issuance of
certain permanent licenses to WilTel by the FCC: (1) a cash collateralized
letter of credit that expires on March 14, 2003 in the amount of $181 million
issued by Fleet National Bank for the account of Leucadia in respect of
Leucadia's obligation to pay for the claims it purchased from Williams; and (2)
documents related to the sale of the Williams Technology Center and certain
related assets including the Short Term Note and the Long Term Note. The
escrowed items will be released upon the issuance of specified permanent
licenses from the FCC provided that no objections are filed by any third party.
If the FCC has not granted the permanent licenses by February 28, 2003, or if
objections are pending (which have not been resolved to Leucadia's reasonable
satisfaction), the escrow unwinds. In the event the escrow unwinds, then (i) the
letter of


                                       8
<PAGE>

Notes (Continued)


credit will either expire by its terms on March 14, 2003, or will be returned to
Leucadia, and (ii) 11,775,000 common shares of WilTel will be returned by
Leucadia to the escrow agent for distribution to Williams in accordance with the
terms of the escrow agreement. Should that distribution to Williams occur, it is
anticipated that Williams would own approximately 30 percent of the outstanding
common stock of WilTel and the right to designate two board seats on WilTel's
board of directors. During the escrow period, WilTel is obligated to pay
Williams monthly lease payments in accordance with the September 2001
sale-leaseback transaction with respect to the Williams Technology Center and
certain related assets. When the escrowed items are released, Williams will
credit WilTel by reducing the Long Term Note by the difference between the
sale-leaseback payments and the note payments. In the event the escrow unwinds,
the sale-leaseback transaction will continue unaffected.

     At September 30, 2002, Williams estimated recoveries of its receivables and
claims against WilTel based on the agreements included in the Plan. Williams'
net receivable at September 30, 2002 includes $180 million related to the sale
of its claim to Leucadia and $122 million as the fair value of its notes from
WilTel. The fair value of the notes from WilTel was based on an estimated
discount rate considering the creditworthiness of WilTel, the amount and timing
of the cash flows and Williams' security in the Williams Technology Center and
certain other collateral. Williams believes the transactions contemplated by
these agreements provide the most relevant information available to estimate the
recovery of its receivables and claims, as they represent third party
transactions that Williams' management has executed pending the outcome of the
escrow.

     Prior to second-quarter 2002, Williams had estimated the recovery of its
receivables from WCG by performing a financial analysis and utilizing the
assistance of external legal counsel and an external financial and restructuring
advisor. In preparing its financial analysis, Williams and its external
financial and restructuring advisor considered the overall market condition of
the telecommunications industry, financial projections provided by WCG, the
potential impact of a bankruptcy on WCG's financial performance, the nature of
the proposed restructuring as detailed in WCG's bankruptcy filing and various
issues discussed in negotiations prior to WCG's bankruptcy filing.

     Actual recoveries may ultimately differ from currently estimated recoveries
if the escrow unwinds causing Williams to receive common stock equity in WilTel
and the existing sale - leaseback transaction to remain in place.

5. Investing income (loss)
- --------------------------------------------------------------------------------

Estimated loss on realization of amounts due from Williams Communications Group,
Inc.

     For the three and nine months ended September 30, 2002, Williams has
recorded in continuing operations pre-tax charges of $22.9 million and $269.9
million, respectively, related to the recoverability of these receivables and
claims (see Note 4).

Other

     Other investing income (loss) for the three and nine months ended September
30, 2002 and 2001, is as follows:

<Table>
<Caption>
                                                            Three months ended                 Nine months ended
                                                              September 30,                      September 30,
                                                      -----------------------------      -----------------------------
         (Millions)                                       2002             2001              2002             2001
         ----------                                   ------------     ------------      ------------     ------------
<S>                                                   <C>              <C>               <C>              <C>

         Equity earnings*                             $       19.1     $       10.3      $       79.7     $       21.8
         Income (loss) from investments*                      55.1            (23.3)             42.8              4.2
         Write-down of WCG common stock investment              --            (70.9)               --            (70.9)
         Interest income and other                            11.1             14.3              39.0             84.8
                                                      ------------     ------------      ------------     ------------

         Total other investing income (loss)          $       85.3     $      (69.6)     $      161.5     $       39.9
                                                      ============     ============      ============     ============
</Table>

         * Items also included in segment profit (loss).

     Equity earnings for the nine months ended September 30, 2002, include a
benefit of $27.4 million, reflecting a contractual construction completion fee
received by an equity affiliate of Williams whose operations are accounted for
under the equity method of accounting. This equity affiliate served as the
general contractor on the Gulfstream pipeline project for Gulfstream Pipeline
Natural Gas System (Gulfstream), an interstate natural gas pipeline subject to
Federal Energy Regulatory Commission (FERC) regulations and an equity affiliate
of Williams. The fee paid by Gulfstream, associated with the early completion
during second-quarter of the construction of Gulfstream's pipeline, was
capitalized by Gulfstream as property, plant and equipment and is included in
Gulfstream's rate base to be recovered in future revenues.



                                       9
<PAGE>

Notes (Continued)


     Included in income (loss) from investments for the three and nine months
ended September 30, 2002, are the following:

     o    $58.5 million gain on sale of Williams' investment in a Lithuanian oil
          refinery, pipeline and terminal complex, which was included in the
          International segment
     o    $8.7 million gain on sale of Williams' general partner equity interest
          in Northern Border Partners, L.P., which was included in the Gas
          Pipeline segment
     o    $11.6 million net write-down pursuant to terms of an announced sale of
          Williams' equity interest in a Canadian and U.S. gas pipeline, which
          was included in the Gas Pipeline segment
     o    $12.3 million write-down of Gas Pipeline's investment in a pipeline
          project which was cancelled in the second-quarter 2002 (included in
          the nine months only)

     Included in income (loss) from investments for the three and nine months
ended September 30, 2001, are the following:

     o    $23.3 million write-downs of certain other investments, which were
          included in the Energy Marketing & Trading segment

     o    $27.5 million gain on the sale of Williams' limited partnership
          interest in Northern Border Partners, L. P., which was included in the
          Gas Pipeline segment (included in nine months only)

     The $70.9 million write-down of the WCG investment included in the three
and nine months ended September 30, 2001, resulted from a decline in the value
of the WCG common stock which was determined to be other than temporary.

6. Provision (benefit) for income taxes
- --------------------------------------------------------------------------------

     The provision (benefit) for income taxes from continuing operations
includes:

<Table>
<Caption>
                                           Three months ended                  Nine months ended
                                              September 30,                      September 30,
                                      ------------------------------     ------------------------------
     (Millions)                           2002              2001             2002              2001
     ----------                       ------------      ------------     ------------      ------------
<S>                                   <C>               <C>              <C>               <C>
      Current:
        Federal                       $     (100.3)     $       17.3     $      (63.7)     $      189.3
        State                                 10.0              (1.1)            10.0              31.6
        Foreign                               10.8               2.8             10.8               9.1
                                      ------------      ------------     ------------      ------------
                                             (79.5)             19.0            (42.9)            230.0

     Deferred:
        Federal                             (103.8)            138.2           (211.6)            342.5
        State                                (60.2)             19.8            (70.2)             34.7
        Foreign                               11.7               5.8             11.7               8.0
                                      ------------      ------------     ------------      ------------
                                            (152.3)            163.8           (270.1)            385.2
                                      ------------      ------------     ------------      ------------
      Total provision (benefit)       $     (231.8)     $      182.8     $     (313.0)     $      615.2
                                      ============      ============     ============      ============
</Table>

     The effective income tax rate for the three months ended September 30,
2002, is greater than the federal statutory rate due primarily to the effect of
state income taxes, offset by the effects of taxes on foreign operations.

     The effective income tax rate for the nine months ended
September 30, 2002, is less than the federal statutory rate due primarily to the
effect of taxes on foreign operations and the impairment of goodwill, which is
not deductible for income tax purposes, and reduces the tax benefit of the
pre-tax loss, offset by the effect of state income taxes.

     The effective income tax rate for the three and nine months ended September
30, 2001, is greater than the federal statutory rate due primarily to valuation
allowances associated with the tax benefits for investment write-downs for which
ultimate realization is uncertain and the effect of state income taxes.


                                       10
<PAGE>

Notes (Continued)


7. Discontinued operations
- --------------------------------------------------------------------------------

2002 Transactions

   In accordance with the provisions related to discontinued operations within
SFAS No. 144, the results of operations for the following asset and/or business
sales have been reflected in the consolidated financial statements as
discontinued operations:

Central

   During third-quarter 2002, Williams' board of directors approved an agreement
to sell one of its Gas Pipeline segments, Central natural gas pipeline, for $380
million in cash and the assumption by the purchaser of $175 million in debt. As
a result of the board of directors' approval, Central met the criteria within
SFAS No. 144 to be considered "held for sale" at September 30, 2002. The sale is
expected to close in fourth-quarter 2002. The sale agreement results from
efforts to market this asset through a reserve price auction process that was
initiated during second-quarter 2002. A third-quarter 2002 impairment charge of
$86.9 million is recorded as a component of impairments and gain (loss) on sales
from discontinued operations (included in the following table) reflecting the
excess of the September 30, 2002, carrying cost of the long-lived assets over
management's estimate of fair value less costs to sell Central. Fair value was
based upon terms of the sales agreement, with the final bid level reflecting a
decline from initial offers received in the earlier stages of the reserve
auction process.

Mid-America and Seminole Pipelines

   On August 1, 2002, Williams completed the sale of its 98 percent interest in
Mid-America Pipeline and 98 percent of its 80 percent ownership interest in
Seminole Pipeline for $1.2 billion. The sale generated net cash proceeds of
$1.16 billion and a pre-tax gain of $304.6 million which is recorded in
third-quarter 2002 as a component of impairments and gain (loss) on sales from
discontinued operations (included in the following table). Mid-America Pipeline
is a 7,726-mile natural gas liquids pipeline system. Seminole Pipeline is a
1,281-mile natural gas liquids pipeline system. These assets were part of the
Midstream Gas & Liquids segment.

Soda ash operations

   In March 2002, Williams announced its intentions to sell its soda ash mining
facility located in Colorado, which was previously written-down to estimated
fair value at December 31, 2001, and in April 2002, Williams initiated a
reserve-auction process. As this process and negotiations with interested
parties progressed, new information regarding estimated fair value became
available. As a result, an additional impairment loss of $44.1 million was
recognized in second-quarter 2002 by the International segment. Management's
estimate of fair value used to calculate the impairment loss was based on
discounted cash flows assuming sale of the facility in 2002. During
third-quarter 2002, Williams' board of directors approved a plan authorizing
management to negotiate and facilitate a sale of its interest in the soda ash
operations pursuant to terms of a proposed sales agreement. As a result of the
board of directors' approval and management's expectation of consummation of a
sale, these operations met the criteria within SFAS No. 144 to be held for sale
at September 30, 2002. An additional pre-tax impairment of $48.2 million was
recorded in third-quarter 2002 and is recorded as a component of impairments and
gain (loss) on sales from discontinued operations (included in the following
table), reflective of management's estimate of fair value associated with
revised terms of its negotiations to sell the operations.

Kern River

   On March 27, 2002, Williams completed the sale of its Kern River pipeline for
$450 million in cash and the assumption by the purchaser of $510 million in
debt. As part of the agreement, $32.5 million of the purchase price was
contingent upon Kern River receiving a certificate from the FERC to construct
and operate a future expansion. This certificate was received in July 2002 and
the contingent payment plus interest was recognized as income from discontinued
operations in third-quarter 2002. Included as a component of impairments and
gain (loss) on sales from discontinued operations (included in the following
table) is a pre-tax gain of $31.7 million and a pre-tax loss of $6.4 million for
the three and nine months ended September 30, 2002, respectively.


                                       11
<PAGE>

Notes (Continued)

2001 Transactions

   On March 30, 2001, Williams' board of directors approved a tax-free spinoff
of WCG to Williams' shareholders. Williams distributed 398.5 million shares, or
approximately 95 percent of the WCG common stock held by Williams on April 23,
2001. In accordance with Accounting Principles Board Opinion No. 30, "Reporting
the Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual, and Infrequently Occurring Events and
Transactions," the results of operations and cash flows for WCG have been
reflected in the accompanying Consolidated Statement of Operations and
Consolidated Statement of Cash Flows and notes as discontinued operations. See
Note 4 for information regarding events in 2002 related to WCG.

Summarized results of discontinued operations

   Summarized results of discontinued operations for the three and nine months
ended September 30, 2002 and 2001, are as follows:

<Table>
<Caption>
                                               Three months ended          Nine months ended
                                                  September 30,              September 30,
                                           ------------------------    ------------------------
(Millions)                                    2002          2001          2002         2001
- ----------                                 ----------    ----------    ----------    ----------
<S>                                        <C>           <C>           <C>           <C>

2002 Transactions:
  Revenues                                 $     66.4    $    155.0    $    326.0    $    429.8
  Income from operations before
     income taxes                          $      8.3    $     42.3    $     69.1    $    105.4
  Impairments and gain (loss) on sales          201.2            --         119.0            --
  Provision for income taxes                    (94.9)        (14.9)        (89.6)        (39.1)
                                           ----------    ----------    ----------    ----------
                                           $    114.6    $     27.4    $     98.5    $     66.3
                                           ----------    ----------    ----------    ----------

2001 Transactions:
  Revenues                                 $       --    $       --    $       --    $    329.5
  Loss from operations before
     income taxes                          $       --    $       --    $       --    $   (271.3)
  Benefit for income taxes                         --            --            --          92.2
                                           ----------    ----------    ----------    ----------
                                           $       --    $       --    $       --    $   (179.1)
                                           ----------    ----------    ----------    ----------

Total income (loss) from discontinued
  operations                               $    114.6    $     27.4    $     98.5    $   (112.8)
                                           ==========    ==========    ==========    ==========
</Table>


                                       12
<PAGE>

Notes (Continued)

Summarized assets and liabilities of discontinued operations

   Summarized assets and liabilities of discontinued operations as of September
30, 2002 and December 31, 2001, are as follows:

<Table>
<Caption>
                                        September 30,  December 31,
(Millions)                                  2002           2001
- ----------                              -------------  ------------
<S>                                     <C>            <C>

     Total current assets               $      779.6   $      214.6
                                        ------------   ------------
   Property, plant and equipment                  --        2,463.2
   Other non-current assets                       --          195.7
                                        ------------   ------------
     Total non-current assets                     --        2,658.9
                                        ------------   ------------
     Total assets                       $      779.6   $    2,873.5
                                        ------------   ------------
   Long-term debt due within one year             --           37.0
   Other current liabilities                   340.7          174.6
                                        ------------   ------------
     Total current liabilities                 340.7          211.6
                                        ------------   ------------
   Long-term debt                                 --          797.9
   Other non-current liabilities                  --           66.4
                                        ------------   ------------
     Total non-current liabilities                --          864.3
                                        ------------   ------------
     Total liabilities                  $      340.7   $    1,075.9
                                        ============   ============
</Table>

   At September 30, 2002, Central and the soda ash operations had been approved
for sale by Williams' board of directors. Because the sales are expected to
close within 12 months, the discontinued assets and liabilities have been
reclassified to the current section of the balance sheet as assets and
liabilities held for sale for September 30, 2002. December 31, 2001 has been
restated to include Central and the soda ash operations as discontinued
operations, but the assets and liabilities for Central and the soda ash
operations were not reclassified to current assets and liabilities.

8. Earnings (loss) per share
- --------------------------------------------------------------------------------

   Basic and diluted earnings (loss) per common share are computed as follows:

<Table>
<Caption>
(Dollars in millions, except per-share               Three months ended              Nine months ended
amounts; shares in thousands)                           September 30,                  September 30,
- --------------------------------------          ----------------------------   ----------------------------
                                                    2002            2001           2002            2001
                                                ------------    ------------   ------------    ------------
<S>                                             <C>             <C>            <C>             <C>

Income (loss) from continuing operations        $     (408.7)   $      193.9   $     (634.0)   $      872.8
Preferred stock dividends (see Note 14)                 (6.8)             --          (83.3)             --
                                                ------------    ------------   ------------    ------------

Income (loss) from continuing operations
   available to common stockholders
   for basic and diluted earnings per share     $     (415.5)   $      193.9   $     (717.3)   $      872.8
                                                ============    ============   ============    ============

Basic weighted-average shares                        516,901         502,877        516,688         489,813
Effect of dilutive securities:
   Stock options                                          --           3,288             --           3,999
                                                ------------    ------------   ------------    ------------

Diluted weighted-average shares                      516,901         506,165        516,688         493,812
                                                ------------    ------------   ------------    ------------

Earnings (loss) per share from continuing operations:
   Basic                                        $       (.80)   $        .39   $      (1.39)   $       1.78
   Diluted                                      $       (.80)   $        .39   $      (1.39)   $       1.77
                                                ============    ============   ============    ============
</Table>


                                       13
<PAGE>

Notes (Continued)

     For the three and nine months ended September 30, 2002, diluted earnings
(loss) per share is the same as the basic calculation. The inclusion of any
stock options, convertible preferred stock and unvested deferred stock would be
antidilutive as Williams reported a loss from continuing operations for these
periods. As a result, approximately 7.6 thousand and 880 thousand
weighted-average stock options for the three and nine months ended September 30,
2002, respectively, that otherwise would have been included, were excluded from
the computation of diluted earnings per common share. Additionally,
approximately 14.7 million and 10.1 million weighted-average shares for the
three and nine months ended September 30, 2002, respectively, related to the
assumed conversion of 9 7/8 percent cumulative convertible preferred stock and
approximately 4.1 million and 3.5 million weighted average unvested deferred
shares for the three and nine months ended September 30, 2002, respectively,
have been excluded from the computation of diluted earnings per common share.

9. Restricted cash
- --------------------------------------------------------------------------------

     Restricted cash within current assets consists primarily of cash collateral
as required under the $900 million short-term Credit Agreement (see Note 11),
collateral in support of a financial guarantee and letters of credit. Restricted
cash within noncurrent assets consists primarily of collateral in support of
surety bonds underwritten by an insurance company and letters of credit.
Williams does not expect this cash to be released within the next twelve months.

     The current and noncurrent restricted cash is primarily invested in
short-term money market accounts with financial institutions and an insurance
company as well as treasury securities. The classification of restricted cash is
determined based on the expected term of the collateral requirement and not
necessarily the maturity date of the underlying securities.

10. Inventories
- --------------------------------------------------------------------------------

   Inventories at September 30, 2002 and December 31, 2001 are as follows:

<Table>
<Caption>
                                     September 30,    December 31,
(Millions)                                2002            2001
                                     -------------    ------------
<S>                                    <C>             <C>

Raw materials:
  Crude oil                            $    158.4      $    117.7
  Other                                       1.3             1.3
                                       ----------      ----------

                                            159.7           119.0
Finished goods:
  Refined products                          170.2           265.0
  Natural gas liquids                       201.8           142.6
  General merchandise                        19.0            14.5
                                       ----------      ----------

                                            391.0           422.1
Materials and supplies                      138.7           124.9
Natural gas in underground storage          128.0           136.4
Other                                         2.8             1.8
                                       ----------      ----------
                                       $    820.2      $    804.2
                                       ==========      ==========
</Table>

11. Debt and banking arrangements
- --------------------------------------------------------------------------------

Secured credit facilities

     In third-quarter 2002, Williams obtained a $400 million letter of credit
facility, a $900 million short-term loan (discussed below) and amended its
existing revolving credit facility. The $400 million letter of credit facility,
which expires July 2003, and the revolving credit facility which expires July
2005, are secured by substantially all of Williams' Midstream Gas & Liquids
assets and the equity of substantially all of the Midstream Gas & Liquids
subsidiaries and the subsidiaries which own the refinery assets. These
facilities are also guaranteed by most of Williams' subsidiaries, except for
Transcontinental Gas Pipe Line, Texas Gas and Northwest Pipeline. As of
September 30, 2002, Williams has $660 million of additional secured borrowing
capacity available under its revolving credit facility.


                                       14
<PAGE>

Notes (Continued)

     Additionally, the company is no longer required to make a "no material
adverse change" representation prior to borrowings under the revolving credit
facility. An additional $159 million of public securities were also ratably
secured with the same assets in accordance with the indentures covering those
securities. Additionally, as Williams completes asset sales, the commitments
from participating banks in the revolving credit facility will be reduced and
various other preexisting debt will be paid down. As of September 30, 2002, the
revolving credit facility commitment had been reduced to $660 million.
Transcontinental Gas Pipe Line, Texas Gas and Northwest Pipeline continue as
participating borrowers in this facility. Significant new covenants under these
agreements include: (i) restrictions on the creation of new subsidiaries, (ii)
additional restrictions on pledging assets to other creditors, (iii) a covenant
that the ratio of interest expense plus cash flow to interest expense be greater
than 1.5 to 1, (iv) a limit on dividends on common stock paid by Williams in any
quarter of $6.25 million, (v) certain restrictions on declaration or payment of
dividends on preferred stock issued after July 30, 2002, (vi) a limit on
investments in others of $50 million annually, (vii) a $50 million limit on
additional debt incurred by subsidiaries other than Transcontinental Gas Pipe
Line, Texas Gas, Northwest Pipeline or Williams Energy Partners L.P. and (viii)
modified the net debt to consolidated net worth plus net debt financial covenant
to increase the threshold to 70 percent through December 30, 2002, and then
after December 30, 2002 but on or before March 30, 2003 not to exceed 68 percent
and after March 30, 2003 the ratio shall not exceed 65 percent.

     Williams Production RMT Company (RMT), a wholly owned subsidiary, entered
into a $900 million short-term Credit Agreement dated July 31, 2002, with
certain lenders including a subsidiary of Lehman Brothers, Inc., a related party
to Williams. The loan, reported in Notes Payable in the Consolidated Balance
Sheet, is guaranteed by Williams, Williams Production Holdings LLC (Holdings)
and certain RMT subsidiaries. It is also secured by the capital stock and assets
of Holdings and certain of RMT's subsidiaries. The assets of RMT are comprised
primarily of the assets of the former Barrett Resources Corporation acquired in
2001, which were primarily natural gas properties in the Rocky Mountain region.
The loan matures on July 25, 2003, and bears interest payable quarterly at the
Eurodollar rate plus 4 percent per annum (5.810 percent at September 30, 2002),
plus additional interest of 14 percent per annum, which is accrued and added to
the principal balance. The principal balance at September 30, 2002, was $921
million.

     RMT must also pay a deferred set-up fee. The amount of the fee is dependant
upon whether a majority of the fair market value of RMT's assets or a majority
of its capital stock is sold (company sale) on or before the maturity date,
regardless of whether the loan obligations have been repaid. If a company sale
has occurred, the amount of such fee would be the greater of (x) 15 percent of
the loan principal amount, and (y) 15 percent to 21 percent, depending on the
timing of the company sale, of the difference between (A) the purchase price of
such company sale, including the amount of any liabilities assumed by the
purchaser, up to $2.5 billion, and (B) the sum of (1) the principal amount of
the outstanding loans, plus (2) outstanding debt of RMT and its subsidiaries,
plus (3) accrued and unpaid interest on the loans to the date of repayment. If a
company sale has not occurred, the fee would be 15 percent of the loan amount.
However, if a company sale occurs within three months after the maturity date,
then RMT must also pay the positive difference, if any, between the fee that
would have been paid had such company sale occurred prior to the maturity date
and the actual fee paid on the maturity date.

   Significant covenants on Holdings, RMT and certain RMT subsidiaries under the
loan agreement include: (i) an interest coverage ratio of greater than 1.5 to 1,
(ii) a fixed charge coverage ratio of greater than 1.15 to 1, (iii) a limitation
on restricted payments, (iv) a limitation on capital expenditures in excess of
$300 million and (v) a limitation on intercompany indebtedness.

     Under the RMT Credit Agreements, Williams must maintain actual and
projected parent liquidity (a) at any time from the closing date through the
180th day thereafter, of $600 million; (b) at any time thereafter through and
including the maturity date, of $750 million; and (c) only projected liquidity
for twelve months after the maturity date, of $200 million. If a default were to
occur with respect to parent liquidity, RMT must be sold within 75 days.
Liquidity projections must be provided weekly until the maturity date. Each
projection covers a period extending 12 months from the report date. The loan is
also required to be prepaid with the net cash proceeds of any sales of RMT's
assets, and, in the event of a company sale, the loan is required to be prepaid
in full. A prepayment or acceleration of the loan requires RMT to pay to lenders
(i) a make-whole amount, and (ii) the deferred set up fee set forth above. A
partial prepayment of the loan requires RMT to pay a pro rata portion of the
make-whole amount and deferred set up fee.

     Additionally, Williams amended certain other financing facilities and
agreements totaling $1.9 billion which provided the lenders thereunder with
guarantees from Williams Gas Pipeline Company, L.L.C. and Williams Production
Holdings LLC and certain lenders with a ratable share of proceeds from future
asset sales to reduce certain of these facilities. These facilities and
agreements include the preferred interest in Castle Associates LP (Castle), $600
million of term loans, certain letters of credit, two operating lease agreements
with special purpose entities, the preferred interest in Piceance Production
Holdings LLC (Piceance) and the preferred interest in Snow Goose Associates,
L.L.C., which is currently classified as debt. As a result of the changes to the
two operating lease agreements, these leases are now reported as a capitalized
leases as of September 30, 2002. Additionally, the preferred interests in Castle
and Piceance are now reported as debt.


                                       15
<PAGE>

Notes (Continued)

Notes payable

     In addition to the $921 million RMT note payable discussed previously,
Williams has entered into various short-term credit agreements with amounts
outstanding totaling $8 million at September 30, 2002. The weighted-average
interest rate on these notes at September 30, 2002 was 4.65 percent. At
September 30, 2002, a $411 million note payable by Williams Energy Partners L.P.
(WEP) a partially owned and consolidated entity of Williams, has been
reclassified to long-term debt as discussed below.

Debt

   Long-term debt at September 30, 2002 and December 31, 2001, is as follows:

<Table>
<Caption>
                                                    Weighted-
                                                     average
                                                    interest      September 30,   December 31,
(Millions)                                            rate             2002           2001
- ----------                                        ------------    -------------   ------------
<S>                                               <C>              <C>            <C>

Secured Debt
- ------------
Revolving credit loans                                     7.0%    $       81.3   $         --
Debentures, 9.9% payable 2020                              9.9             28.7             --
Notes, 8.2% - 9.45%, payable 2002-2022                     9.0            265.8             --
Notes, adjustable rate, payable through 2004               3.3             13.6             --
Other                                                      6.8            306.7             --

Unsecured Debt
- --------------
Revolving credit loans                                     3.3%            58.0           53.7
Commercial paper                                            --               --          300.0
Debentures, 6.25% - 10.25%, payable 2003 - 2031            7.4          1,547.9        1,585.4
Notes, 6.125% - 9.25%, payable through 2032(1)             7.7          9,650.8        6,510.7
Notes, adjustable rate, payable through 2004               5.3          1,381.7        1,192.9
Other                                                      6.3            352.1           59.9
                                                                   ------------   ------------
                                                                   $   13,686.6   $    9,702.6
Current portion of long-term debt                                      (1,393.0)        (999.8)
                                                                   ------------   ------------
                                                                   $   12,293.6   $    8,702.8
                                                                   ============   ============
</Table>

(1) $400 million of 6.75% notes, payable 2016, putable/callable in 2006 and $1.1
    billion of 6.5% notes payable 2007, subject to remarketing in 2004.

     Williams' December 31, 2001, long-term debt included $300 million of
commercial paper, $300 million of short-term debt obligations and $244 million
of long-term debt obligations due within one year, which would have otherwise
been classified as current, but were classified as noncurrent based on Williams'
intent and ability to refinance on a long-term basis. At September 30, 2002, a
$411 million note payable by WEP has been reclassified to long-term debt based
on WEP's new debt agreement entered into October 2002. On October 31, 2002,
Williams Pipe Line LLC, a subsidiary of WEP, and WEP, entered into a private
placement debt agreement, effective October 1, 2002, with a group of financial
institutions providing for the issuance of up to $200 million aggregate
principal amount of Floating Rate Series A Senior Secured Notes and up to $340
million aggregate principal amount of Fixed Rate Series B Senior Secured Notes,
upon satisfaction of certain conditions precedent, which will be used to
refinance the note payable by WEP. As part of this agreement, WEP agreed not to
redeem or retire the Class B Units held by the general partner except with
equity issuance proceeds. WEP and its subsidiaries are legally separate entities
from Williams and its subsidiaries, and the assets owned by WEP are generally
not available for the payment of debts owed to the creditors of Williams and
its subsidiaries.

     Pursuant to completion of a consent solicitation during first-quarter 2002
with WCG Note Trust Note holders, Williams recorded $1.4 billion of long-term
debt obligations. In July 2002, Williams acquired substantially all of the WCG
Note Trust Notes by exchanging $1.4 billion of Williams Senior Unsecured 9.25
percent notes due March 2004. In November 2002, Williams acquired the remaining
outstanding WCG Note Trust Notes (see Note 4).

     Under the terms of Williams' revolving credit agreement (which as of
September 30, 2002 had reduced to $660 million, as discussed previously),
Northwest Pipeline and Transcontinental Gas Pipe Line have access to $400
million and Texas Gas Transmission has access to $200 million, while Williams
(Parent) has access to all unborrowed amounts. Interest rates vary with current
market conditions. At September 30, 2002, there were no amounts outstanding
under this agreement. Additionally, certain Williams subsidiaries have revolving
credit facilities with an available capacity of $35 million at September 30,
2002.

   In March 2002, the terms of a Williams $560 million priority return
structure, previously classified as preferred interest in consolidated
subsidiaries, were amended. The amendment provided for the outside investor's
preferred interest to be redeemed in equal quarterly installments through April
2003 (see Note 13). The interest rate varies based on LIBOR plus an applicable
margin and was 2.803 percent at September 30, 2002. Through September 30, 2002,
$224 million has been redeemed. Based on the new payment terms, the remaining
outstanding preferred interest of $336 million is classified as long-term debt
due within one year at September 30, 2002.

   In May 2002, Energy Marketing & Trading entered into an agreement which
transferred the rights to certain receivables in exchange for cash. Due to the
structure of the agreement, Energy Marketing & Trading accounted for this
transaction as debt collateralized by the claims. The $78.7 million of debt is
classified as current.


                                       16
<PAGE>

Notes (Continued)

   In July 2002, as discussed above, the terms of the $200 million preferred
interest in Castle and the $100 million preferred interest in Piceance were
amended, and the preferred interests are now reported as debt. At September 30,
2002, the Castle and Piceance notes had principal balances of $182 million and
$91 million, respectively. In addition, the terms of two operating leases were
amended, resulting in an increase to capitalized leases of $270 million.


   In addition to the items discussed above, significant long-term debt,
including capitalized leases, issuances and retirements, other than amounts
under revolving credit agreements, for the nine months ended September 30, 2002
are as follows:

<Table>
<Caption>
                                                          Principal
Issue/Terms                                    Due Date    Amount
- -----------                                    --------  ----------
                                                         (Millions)
<S>                                            <C>       <C>
Issuances of long-term debt in 2002:
  6.5% notes (see Note 14)                        2007   $  1,100.0
  8.125% notes                                    2012        650.0
  8.75% notes                                     2032        850.0
  8.875% notes (Transcontinental Gas Pipe Line)   2012        325.0

Retirements/prepayments of long-term
  debt in 2002:
    6.125% notes(1)                               2012   $    240.0
    6.2% notes                                    2002        350.0
    8.875% notes (Transcontinental Gas Pipe Line) 2002        125.0
    Adjustable rate note (Transcontinental Gas
      Pipe Line)                                  2002        150.0
    Various notes, 5.1% - 9.45%                   2002        193.2
    Various notes, adjustable rate                2002         93.9
</Table>

(1)  Subject to redemption at par in 2002.

   Williams' ratio of net debt to consolidated net worth plus net debt, as
defined in Williams' amended revolving credit facility, was 65.8 percent at
September 30, 2002.

12. Contingent liabilities and commitments
- --------------------------------------------------------------------------------

Rate and regulatory matters and related litigation

   Williams' interstate pipeline subsidiaries have various regulatory
proceedings pending. As a result of rulings in certain of these proceedings, a
portion of the revenues of these subsidiaries has been collected subject to
refund. The natural gas pipeline subsidiaries have accrued approximately $151
million, including $2.2 million related to discontinued operations, for
potential refund as of September 30, 2002.

   Williams Energy Marketing & Trading Company (Energy Marketing & Trading)
subsidiaries are engaged in power marketing in various geographic areas,
including California. Prices charged for power by Williams and other traders and
generators in California and other western states have been challenged in
various proceedings including those before the FERC. In December 2000, the FERC
issued an order which provided that, for the period between October 2, 2000 and
December 31, 2002, the FERC may order refunds from Williams and other similarly
situated companies if the FERC finds that the wholesale markets in California
are unable to produce competitive, just and reasonable prices or that market
power or other individual seller conduct is exercised to produce an unjust and
unreasonable rate. Beginning on March 9, 2001, the FERC issued a series of
orders directing Williams and other similarly situated companies to provide
refunds for any prices charged in excess of FERC-established proxy prices in
January, February, March, April and May 2001, or to provide justification for
the prices charged during those months. According to these orders, Williams'
total potential refund liability for January through May 2001 is approximately
$30 million. Williams has filed justification for its prices with the FERC and
calculated its refund liability under the methodology used by the FERC to
compute refund amounts at approximately $11 million. On July 25, 2001, the FERC
issued an order establishing a hearing to establish the facts necessary to
determine refunds under the approved


                                       17
<PAGE>

Notes (Continued)

methodology. On August 13, 2002, the FERC issued its preliminary findings as to
its investigation into Western markets (discussed below), which call into
question the gas price methodology established in the July 25, 2001 order. Any
change from the July 25, 2001 methodology would likely result in increased
refund liability for Energy Marketing & Trading. Refunds will cover the period
of October 2, 2000 through June 20, 2001. They will be paid as offsets against
outstanding bills and are inclusive of any amounts previously noticed for refund
for that period. Absent a change in the gas price methodology, the judge
presiding over the refund proceedings is expected to issue his findings in
November 2002. The FERC will subsequently issue a refund order based on these
findings.

   In an order issued June 19, 2001, the FERC implemented a revised price
mitigation and market monitoring plan for wholesale power sales by all suppliers
of electricity, including Williams, in spot markets for a region that includes
California and ten other western states (the "Western Systems Coordinating
Council," or "WSCC"). In general, the plan, which was in effect from June 20,
2001 through September 30, 2002, established a market clearing price for spot
sales in all hours of the day that was based on the bid of the highest-cost
gas-fired California generating unit that was needed to serve the Independent
System Operator's (ISO's) load. When generation operating reserves fell below
seven percent in California (a "reserve deficiency period"), absent cost-based
justification for a higher price, the maximum price that Williams may charge for
wholesale spot sales in the WSCC was the market clearing price. When generation
operating reserves rise to seven percent or above in California, absent
cost-based justification for a higher price, Williams' maximum price was limited
to 85 percent of the highest hourly price that was in effect during the most
recent reserve deficiency period. This methodology initially resulted in a
maximum price of $92 per megawatt hour during non-emergency periods and $108 per
megawatt hour during emergency periods, and these maximum prices remained
unchanged throughout summer and fall 2001. Revisions to the plan for the
post-September 30, 2002, period were provided on July 17, 2002 as discussed
below.

   On December 19, 2001, the FERC reaffirmed its June 19 and July 25 orders with
certain clarifications and modifications. It also altered the price mitigation
methodology for spot market transactions for the WSCC market for the winter 2001
season and set the period maximum price at $108 per megawatt hour through April
30, 2002. Under the order, this price would be subject to being recalculated
when the average gas price rises by a minimum factor of ten percent effective
for the following trading day, but in no event will the maximum price drop below
$108 per megawatt hour. The FERC also upheld a ten percent addition to the price
applicable to sales into California to reflect credit risk. On July 9, 2002 the
ISO's operating reserve levels dropped below seven percent for a full operating
hour, during which the ISO declared a Stage 1 System Emergency resulting in a
new Market Clearing Price cap of $57.14/MWh under the FERC's rules. On July 11,
2002, the FERC issued an order that the existing price mitigation formula be
replaced with a hard price cap of $91.87/MWh for spot markets operated in the
West (which is the level of price mitigation that existed prior to the July 9,
2002, events that reduced the cap), to be effective July 12, 2002. The cap will
expire when the currently effective West-wide mitigation plan expires on
September 30, 2002.

   On July 17, 2002, the FERC issued its first order on the California ISO's
proposed market redesign. Key elements of the order include (1) maintaining
indefinitely the current must-offer obligation across the West; (2) the adoption
of Automatic Mitigation Procedures (AMP) to identify and limit excessive bids
and local market power within California, (bids less than $91.87/MWh will not be
subject to AMP); (3) a West-wide spot market bid cap of $250/MWh, beginning
October 1, 2002, and continuing indefinitely; (4) required the ISO to expedite
the following market design elements and requiring them to be filed by October
21, 2002: (a) creation of an integrated day-ahead market; (b) ancillary services
market reforms; and (c) hour-ahead and real-time market reforms; and (5) the
development of locational marginal pricing (LMP).

   The California Public Utilities Commission (CPUC) filed a complaint with the
FERC on February 25, 2002, seeking to void or, alternatively, reform a number of
the long-term power purchase contracts entered into between the State of
California and several suppliers in 2001, including Energy Marketing & Trading.
The CPUC alleges that the contracts are tainted with the exercise of market
power and significantly exceed "just and reasonable" prices. The Electricity
Oversight Board made a similar filing on February 27, 2002. The FERC set the
complaint for hearing on April 25, 2002, but held the hearing in abeyance
pending settlement discussions before a FERC judge. The FERC also ordered that
the higher public interest test will apply to the contracts. The FERC commented
that the state has a very heavy burden to carry in proving its case. On July 17,
2002, the FERC denied rehearing of the April 25, 2002, order that set for
hearing California's challenges to the long-term contracts entered into between
the state and several suppliers, including Energy Marketing & Trading. Energy
Marketing & Trading will appeal the order. The settlement discussions noted
above have resulted in Williams reaching a global settlement entering into a
settlement agreement with the State of California that includes a renegotiated
long-term energy contract. This contract is made up of a combination of block
energy sales, dispatchable products and a gas contract. The original contract
contained only block energy sales. The settlement will also resolve complaints
brought by the California Attorney General against Williams that are discussed
below and the State of California's refund claims that are discussed above.
Pursuant to the settlement, Williams also will provide consideration of $147
million over eight years and six gas powered electric turbines. In addition, the
Settlement is intended to resolve ongoing investigations by the States of
California, Oregon and Washington. The settlement was reduced to writing and
executed on November 11, 2002. The settlement terms are scheduled to become
effective on December 31, 2002, subject to approval by various courts and the
FERC at the completion of due diligence by the California Attorney General. If
this due diligence uncovers previously unknown and illegal acts, the Attorney
General may terminate the agreement.


                                       18

<PAGE>

Notes (Continued)

   On May 2, 2002, PacifiCorp filed a complaint against Energy Marketing &
Trading seeking relief from rates contained in three separate confirmation
agreements between PacifiCorp and Energy Marketing & Trading (known as the
Summer 2002 90-Day Contracts). PacifiCorp filed similar complaints against three
other suppliers. PacifiCorp alleges that the rates contained in the contracts
are unjust and unreasonable. Energy Marking & Trading filed its answer on May
22, 2002, requesting that the FERC reject the complaint and deny the relief
sought. On June 28, 2002, the FERC set PacifiCorp's complaints for hearing, but
held the hearing in abeyance pending the outcome of settlement judge
proceedings. If the case goes to hearing, the FERC stated that PacifiCorp will
bear a heavy burden of proving that the extraordinary remedy of contract
modification is justified. The FERC set a refund effective date of July 1, 2002.
Should the matter go to hearing, a final decision should be issued by May 31,
2003.

   Certain entities have also asked the FERC to revoke Williams' authority to
sell power from California-based generating units at market-based rates to limit
Williams to cost-based rates for future sales from such units and to order
refunds of excessive rates, with interest, retroactive to May 1, 2000, and
possibly earlier.

   On March 14, 2001, the FERC issued a Show Cause Order directing Energy
Marketing & Trading and AES Southland, Inc. to show cause why they should not be
found to have engaged in violations of the Federal Power Act and various
agreements, and they were directed to make refunds in the aggregate of
approximately $10.8 million, and have certain conditions placed on Williams'
market-based rate authority for sales from specific generating facilities in
California for a limited period. On April 30, 2001, the FERC issued an Order
approving a settlement of this proceeding. The settlement terminated the
proceeding without making any findings of wrongdoing by Williams. Pursuant to
the settlement, Williams agreed to refund $8 million to the ISO by crediting
such amount against outstanding invoices. Williams also agreed to prospective
conditions on its authority to make bulk power sales at market-based rates for
certain limited facilities under which it has call rights for a one-year period.
Williams also has been informed that the facts underlying this proceeding are
also under investigation by a California Grand Jury.

   On September 27, 2001, the FERC issued a Notice of Proposed Rulemaking (NOPR)
proposing to adopt uniform standards of conduct for transmission providers. The
proposed rules define transmission providers as interstate natural gas pipelines
and public utilities that own, operate or control electric transmission
facilities. The proposed standards would regulate the conduct of transmission
providers with their energy affiliates. The FERC proposes to define energy
affiliates broadly to include any transmission provider affiliate that engages
in or is involved in transmission (gas or electric) transactions, or manages or
controls transmission capacity, or buys, sells, trades or administers natural
gas or electric energy or engages in financial transactions relating to the sale
or transmission of natural gas or electricity. Current rules affecting Williams
regulate the conduct of Williams' natural gas pipelines and their natural gas
marketing affiliates. The FERC invited interested parties to comment on the
NOPR. On April 25, 2002, the FERC issued its staff analysis of the NOPR and the
comments received. The staff analysis proposes redefining the definition of
energy affiliates to exclude affiliated transmission providers. On May 21, 2002,
the FERC held a public conference concerning the NOPR and the FERC invited the
submission of additional comments. If adopted, these new standards would require
the adoption of new compliance measures by certain Williams subsidiaries.

   On July 17, 2002, the FERC issued a Notice of Inquiry to seek comments on its
negotiated rate policies and practices. The FERC states that it is undertaking a
review of the recourse rate as a viable alternative and safeguard against the
exercise of market power of interstate gas pipelines, as well as the entire
spectrum of issues related to its negotiated rate program. The FERC requested
that interested parties respond to various questions related to the FERC's
negotiated rate policies and practices. Williams' Gas Pipeline companies have
negotiated rates under the FERC's existing negotiated rate programs and
participated in comments filed in this proceeding by Williams in support of the
FERC's existing negotiated rate program.


   On August 1, 2002, the FERC issued a NOPR that proposes restrictions on the
type of cash management program employed by Williams and its subsidiaries. In
addition to stricter guidelines regarding the accounting for and documentation
of cash management or cash pooling programs, the FERC proposal, if made final,
would preclude public utilities, natural gas companies and oil pipeline
companies from participating in such programs unless the parent company and its
FERC-regulated affiliate maintain investment-grade credit ratings and that the
FERC-regulated affiliate maintain stockholders equity of at least 30 percent of
total capitalization. Williams' and its regulated gas pipelines' current credit
ratings are not investment grade. Williams participated in comments in this
proceeding on August 28, 2002 by the Interstate Natural Gas Association of
America. On September 25, 2002, the FERC convened a technical conference to
discuss the issues raised in the comments filed by parties in this proceeding.


   On February 13, 2002, the FERC issued an Order Directing Staff Investigation
commencing a proceeding titled Fact-Finding Investigation of Potential
Manipulation of Electric and Natural Gas Prices. Through the investigation, the
FERC intends to determine whether "any entity, including Enron Corporation
(Enron) (through any of its affiliates or subsidiaries), manipulated short-term
prices for electric energy or natural gas in the West or otherwise exercised
undue influence over wholesale electric prices in the West, since January 1,
2000, resulting in potentially unjust and unreasonable rates in long-term power
sales contracts subsequently entered into by sellers in the West."


                                       19
<PAGE>

Notes (Continued)

This investigation does not constitute a Federal Power Act complaint, rather,
the results of the investigation will be used by the FERC in any existing or
subsequent Federal Power Act or Natural Gas Act complaint. The FERC Staff is
directed to complete the investigation as soon as "is practicable." Williams,
through many of its subsidiaries, is a major supplier of natural gas and power
in the West and, as such, anticipates being the subject of certain aspects of
the investigation. Williams is cooperating with all data requests received in
this proceeding. On May 8, 2002, Williams received an additional set of data
requests from the FERC related to a recent disclosure by Enron of certain
trading practices in which it may have been engaged in the California market. On
May 21, and May 22, 2002, the FERC supplemented the request inquiring as to
"wash" or "round trip" transactions. Williams responded on May 22, 2002, May 31,
2002, and June 5, 2002, to the data requests. On June 4, 2002, the FERC issued
an order to Williams to show cause why its market-based rate authority should
not be revoked as the FERC found that certain of Williams' responses related to
the Enron trading practices constituted a failure to cooperate with the staff's
investigation. Williams subsequently supplemented its responses to address the
show cause order. On July 26, 2002, Williams received a letter from the FERC
informing Williams that it had reviewed all of Williams' supplemental responses
and concluded that Williams responded to the initial May 8, 2002 request.

   In response to an article appearing in the New York Times on June 2, 2002,
containing allegations by a former Williams employee that it had attempted to
"corner" the natural gas market in California, and at Williams' invitation, the
FERC is conducting an investigation into these allegations. Also, the Commodity
Futures Trading Commission (CFTC) is conducting an investigation regarding gas
and power trading in Western markets and has requested information from Williams
in connection with this investigation. In conjunction with this investigation,
Williams disclosed on October 25, 2002, that certain of its gas traders had
reported inaccurate information to a trade publication that published gas price
indices. Williams' and the CFTC's investigation into this matter is continuing.

   On May 31, 2002, Williams received a request from the Securities and Exchange
Commission (SEC) to voluntarily produce documents and information regarding any
prearranged or contemporaneous buy and sell ("round-trip") trades for gas or
power from January 1, 2000, to the present in the United States. On June 24,
2002, the SEC made an additional request for information including a request
that Williams address the amount of Williams' credit, prudency and/or other
reserves associated with its energy trading activities and the methods used to
determine or calculate these reserves. The June 24, 2002, request also requested
Williams' volumes, revenues, and earnings from its energy trading activities in
the Western U.S. market. Williams has responded to the SEC's requests.

   On March 20, 2002, the California Attorney General filed a complaint with the
FERC alleging that Williams and all other sellers of power in California have
failed to comply with federal law requiring the filing of rates and charges for
power. While the FERC rejected the complaint that the market-based rate filing
requirements violate the Federal Power Act, it directed the refiling of
quarterly reports for periods after October 2000 to include transaction specific
information.

   On July 3, 2002, the ISO announced fines against several energy producers
including Williams, for failure to deliver electricity in 2001 as required. The
ISO fined Williams $25.5 million, which will be offset against Williams' claims
for payment from the ISO. Williams believes the vast majority of fines are not
justified and has challenged the fines pursuant to the FERC - approved process
contained in the ISO tariff.

Environmental Matters

   Since 1989, Texas Gas and Transcontinental Gas Pipe Line have had studies
under way to test certain of their facilities for the presence of toxic and
hazardous substances to determine to what extent, if any, remediation may be
necessary. Transcontinental Gas Pipe Line has responded to data requests
regarding such potential contamination of certain of its sites. The costs of any
such remediation will depend upon the scope of the remediation. At September 30,
2002, these subsidiaries had accrued liabilities totaling approximately $32
million for these costs.

   Certain Williams' subsidiaries, including Texas Gas and Transcontinental Gas
Pipe Line, have been identified as potentially responsible parties (PRP) at
various Superfund and state waste disposal sites. In addition, these
subsidiaries have incurred, or are alleged to have incurred, various other
hazardous materials removal or remediation obligations under environmental laws.
Although no assurances can be given, Williams does not believe that these
obligations or the PRP status of these subsidiaries will have a material adverse
effect on its financial position, results of operations or net cash flows.

   Transcontinental Gas Pipe Line, Texas Gas and Williams Gas Pipelines Central
(Central) have identified polychlorinated biphenyl contamination in air
compressor systems, soils and related properties at certain compressor station
sites. Transcontinental Gas Pipe Line, Texas Gas and Central have also been
involved in negotiations with the U.S. Environmental Protection Agency (EPA) and
state agencies to develop screening, sampling and cleanup programs. In addition,
negotiations with certain environmental authorities and other programs
concerning investigative and remedial actions relative to potential mercury
contamination at certain gas metering sites have been commenced by Central,
Texas Gas and Transcontinental Gas Pipe Line. As of September 30, 2002, Central
had


                                       20
<PAGE>

Notes (Continued)

accrued a liability for approximately $8 million, which is included in
discontinued operations and represents the current estimate of future
environmental cleanup costs to be incurred over the next six to ten years. Texas
Gas and Transcontinental Gas Pipe Line likewise had accrued liabilities for
these costs which are included in the $32 million liability mentioned above.
Actual costs incurred will depend on the actual number of contaminated sites
identified, the actual amount and extent of contamination discovered, the final
cleanup standards mandated by the EPA and other governmental authorities and
other factors.

   In addition to its Gas Pipelines, Williams and its subsidiaries also accrue
environmental remediation costs for its natural gas gathering and processing
facilities, petroleum products pipelines, retail petroleum and refining
operations and for certain facilities related to former propane marketing
operations primarily related to soil and groundwater contamination. In addition,
Williams owns a discontinued petroleum refining facility that is being evaluated
for potential remediation efforts. At September 30, 2002, Williams and its
subsidiaries had accrued liabilities totaling approximately $43 million for
these costs. Williams and its subsidiaries accrue receivables related to
environmental remediation costs based upon an estimate of amounts that will be
reimbursed from state funds for certain expenses associated with underground
storage tank problems and repairs. At September 30, 2002, Williams and its
subsidiaries had accrued receivables totaling $1 million.

   In connection with the 1987 sale of the assets of Agrico Chemical Company,
Williams agreed to indemnify the purchaser for environmental cleanup costs
resulting from certain conditions at specified locations, to the extent such
costs exceed a specified amount. At September 30, 2002, Williams had
approximately $10 million accrued for such excess costs. The actual costs
incurred will depend on the actual amount and extent of contamination
discovered, the final cleanup standards mandated by the EPA or other
governmental authorities, and other factors.

   On July 2, 2001, the EPA issued an information request asking for information
on oil releases and discharges in any amount from Williams' pipelines, pipeline
systems, and pipeline facilities used in the movement of oil or petroleum
products, during the period from July 1, 1998 through July 2, 2001. In November
2001, Williams furnished its response.

Other legal matters

   In connection with agreements to resolve take-or-pay and other contract
claims and to amend gas purchase contracts, Transcontinental Gas Pipe Line and
Texas Gas each entered into certain settlements with producers which may require
the indemnification of certain claims for additional royalties which the
producers may be required to pay as a result of such settlements. As a result of
such settlements, Transcontinental Gas Pipe Line is currently defending two
lawsuits brought by producers. In another case, a jury verdict found that
Transcontinental Gas Pipe Line was required to pay a producer damages of $23.3
million including $3.8 million in attorneys' fees. In addition, through December
31, 2001, post-judgment interest was approximately $10.5 million.
Transcontinental Gas Pipe Line's appeals were denied by the Texas Court of
Appeals for the First District of Texas, and on April 2, 2001, the company filed
an appeal to the Texas Supreme Court. On February 21, 2002, the Texas Supreme
Court denied Transcontinental Gas Pipe Line's petition for review. As a result,
Transcontinental Gas Pipe Line recorded a fourth-quarter 2001 pre-tax charge to
income (loss) for the year ended December 31, 2001, in the amount of $37 million
($18 million was included in Gas Pipeline's segment profit and $19 million in
interest accrued) representing management's estimate of the effect of this
ruling. Transcontinental Gas Pipe Line filed a motion for rehearing which was
denied, thereby concluding this matter. In May 2002, Transcontinental Gas Pipe
Line paid Texaco the amount of the judgment plus accrued interest. In the two
remaining cases, producers have asserted damages, including interest calculated
through December 31, 2001, of $16.3 million. Producers have received and may
receive other demands, which could result in additional claims. Indemnification
for royalties will depend on, among other things, the specific lease provisions
between the producer and the lessor and the terms of the settlement between the
producer and either Transcontinental Gas Pipe Line or Texas Gas. Texas Gas may
file to recover 75 percent of any such additional amounts it may be required to
pay pursuant to indemnities for royalties under the provisions of the FERC
Order 528.

   On June 8, 2001, fourteen Williams entities were named as defendants in a
nationwide class action lawsuit which has been pending against other defendants,
generally pipeline and gathering companies, for more than one year. The
plaintiffs allege that the defendants, including the Williams defendants, have
engaged in mismeasurement techniques that distort the heating content of natural
gas, resulting in an alleged underpayment of royalties to the class of producer
plaintiffs. In September 2001, the plaintiffs voluntarily dismissed two of the
fourteen Williams entities named as defendants in the lawsuit. In November 2001,
Williams, along with other "Coordinating Defendants", filed a motion to dismiss
on nonjurisdictional grounds. In January 2002, most of the Williams defendants,
along with a group of Coordinating Defendants, filed a motion to dismiss for
lack of personal


                                       21
<PAGE>

Notes (Continued)

jurisdiction. On August 19, 2002, the defendants' motion to dismiss on
nonjurisdictional grounds was denied. On September 17, 2002, the plaintiffs
filed a motion for class certification. In the next several months, the Williams
entities will join with other defendants in contesting certification of the
plaintiff class.

   In 1998, the United States Department of Justice (DOJ) informed Williams that
Jack Grynberg, an individual, had filed claims in the United States District
Court for the District of Colorado under the False Claims Act against Williams
and certain of its wholly owned subsidiaries. In connection with its sale of
Kern River, the Company agreed to indemnify the purchaser for liability relating
to this claim. Grynberg has also filed claims against approximately 300 other
energy companies and alleges that the defendants violated the False Claims Act
in connection with the measurement, royalty valuation and purchase of
hydrocarbons. The relief sought is an unspecified amount of royalties allegedly
not paid to the federal government, treble damages, a civil penalty, attorneys'
fees, and costs. On April 9, 1999, the DOJ announced that it was declining to
intervene in any of the Grynberg qui tam cases, including the action filed
against the Williams entities in the United States District Court for the
District of Colorado. On October 21, 1999, the Panel on Multi-District
Litigation transferred all of the Grynberg qui tam cases, including those filed
against Williams, to the United States District Court for the District of
Wyoming for pre-trial purposes. On October 9, 2002, the court granted a motion
to dismiss Grynberg's royalty valuation claims. Grynberg's measurement claims
remain pending against Williams and the other defendants.

   On August 6, 2002, Jack J. Grynberg, and Celeste C. Grynberg, Trustee on
Behalf of the Rachel Susan Grynberg Trust, and the Stephen Mark Grynberg Trust,
served The Williams Companies and Williams Production RMT Company with a
complaint in the District Court in and for the City of Denver, State of
Colorado. The complaint alleges that the defendants have used mismeasurement
techniques that distort the BTU heating content of natural gas, resulting in the
alleged underpayment of royalties to Grynberg and other independent natural gas
producers. The complaint also alleges that defendants inappropriately took
deductions from the gross value of their natural gas and made other royalty
valuation errors. Theories for relief include breach of contract, breach of
implied covenant of good faith and fair dealing, anticipatory repudiation,
declaratory relief, equitable accounting, civil theft, deceptive trade
practices, negligent misrepresentation, deceit based on fraud, conversion,
breach of fiduciary duty, and violations of the state racketeering statute.
Plaintiff is seeking actual damages of between $2 million and $20 million based
on interest rate variations, and punitive damages in the amount of approximately
$1.4 million dollars. On October 7, 2002, the Williams defendants filed a motion
to stay the proceedings in this case based on the pendency of the False Claims
Act litigation discussed in the preceding paragraph.

   Williams and certain of its subsidiaries are named as defendants in various
putative, nationwide class actions brought on behalf of all landowners on whose
property the plaintiffs have alleged WCG installed fiber-optic cable without the
permission of the landowners. Williams and its subsidiaries were dismissed from
all of the cases, except one. The parties in the only remaining case in which
Williams or its subsidiaries are named as defendants have reached a settlement
in principle and are in the process of drafting the settlement documents. The
settlement does not obligate Williams or its subsidiaries to pay any monies to
the remaining plaintiff.

   In November 2000, class actions were filed in San Diego, California Superior
Court by Pamela Gordon and Ruth Hendricks on behalf of San Diego rate payers
against California power generators and traders including Williams Energy
Services Company and Energy Marketing & Trading, subsidiaries of Williams. Three
municipal water districts also filed a similar action on their own behalf. Other
class actions have been filed on behalf of the people of California and on
behalf of commercial restaurants in San Francisco Superior Court. These lawsuits
result from the increase in wholesale power prices in California that began in
the summer of 2000. Williams is also a defendant in other litigation arising out
of California energy issues. The suits claim that the defendants acted to
manipulate prices in violation of the California antitrust and unfair business
practices statutes and other state and federal laws. Plaintiffs are seeking
injunctive relief as well as restitution, disgorgement, appointment of a
receiver, and damages, including treble damages. These cases have all been
coordinated in San Diego County Superior Court.

   On May 2, 2001, the Lieutenant Governor of the State of California and
Assemblywoman Barbara Matthews, acting in their individual capacities as members
of the general public, filed suit against five companies and fourteen executive
officers, including Energy Marketing & Trading and Williams' then current
officers Keith Bailey, Chairman and CEO of Williams, Steve Malcolm, President
and CEO of Williams Energy Services and an Executive Vice President of Williams,
and Bill Hobbs, Senior Vice President of Williams Energy Marketing & Trading, in
Los Angeles Superior State Court alleging State Antitrust and Fraudulent and
Unfair Business Act Violations and seeking injunctive and declaratory relief,
civil fines, treble damages and other relief, all in an unspecified amount. This
case is being coordinated with the other class actions in San Diego Superior
Court.


                                       22
<PAGE>

Notes (Continued)

   On May 17, 2001, the DOJ advised Williams that it had commenced an antitrust
investigation relating to an agreement between a subsidiary of Williams and AES
Southland alleging that the agreement limits the expansion of electric
generating capacity at or near the AES Southland plants that are subject to a
long-term tolling agreement between Williams and AES Southland. In connection
with that investigation, the DOJ has issued two Civil Investigative Demands to
Williams requesting answers to certain interrogatories and the production of
documents. Williams is cooperating with the investigation. On November 13, 2002,
the DOJ formally notified Williams that it had terminated this investigation
without any recommended action against Williams or AES.

   On November 8, 2002, Williams received a subpoena from a federal grand jury
in northern California seeking documents related to Williams' involvement in
California power markets. The subpoena also questions Williams' reporting to
trade publications for both gas and power.

   On October 5, 2001, a suit was filed on behalf of California taxpayers and
electric ratepayers in the Superior Court for the County of San Francisco
against the Governor of California and 22 other defendants consisting of other
state officials, utilities and generators, including Energy Marketing & Trading.
The suit alleges that the long-term power contracts entered into by the state
with generators are illegal and unenforceable on the basis of fraud, mistake,
breach of duty, conflict of interest, failure to comply with law, commercial
impossibility and change in circumstances. Remedies sought include rescission,
reformation, injunction, and recovery of funds. Private plaintiffs have also
brought five similar cases against Williams and others on similar grounds. These
suits have all been removed to federal court, and plaintiffs are seeking to
remand the cases to state court.

   On March 11, 2002, the California Attorney General filed a civil complaint in
San Francisco Superior Court against Williams and three other sellers of
electricity alleging unfair competition relating to sales of ancillary power
services between 1998 and 2000. The complaint seeks restitution, disgorgement
and civil penalties of approximately $150 million in total. This case has been
removed to federal court. On April 9, 2002, the California Attorney General
filed a civil complaint in San Francisco Superior Court against Williams and
three other sellers of electricity alleging unfair and unlawful business
practices related to charges for electricity during and after 2000. The maximum
penalty for each violation is $2,500 and the complaint seeks a total fine in
excess of $1 billion. These cases have been removed to federal court. Motions to
remand have been denied. Finally, the California Attorney General has indicated
he may file a Clayton Act complaint against AES Southland and Williams relating
to AES Southland's acquisition of Southern California generation facilities in
1998, tolled by Williams. Williams believes the complaints against it are
without merit.

   Numerous shareholder class action suits have been filed against Williams in
the United States District Court for the Northern District of Oklahoma. The
majority of the suits allege that Williams and co-defendants, WCG and certain
corporate officers, have acted jointly and separately to inflate the stock price
of both companies. Other suits allege similar causes of action related to a
public offering in early January 2002, known as the FELINE PACS offering. These
cases were filed against Williams, certain corporate officers, all members of
the Williams board of directors and all of the offerings' underwriters. These
cases have all been consolidated and an order has been issued requiring separate
amended consolidated complaints by Williams and Williams Communications equity
holders. The amended complaint of the WCG securities holders was filed on
September 27, 2002, and the amended complaint of the WMB securities holders was
filed on October 7, 2002. Williams will be filing separate responsive pleadings
in each proceeding. In addition, four class action complaints have been filed
against Williams and the members of its board of directors under the Employee
Retirement Income Security Act by participants in Williams' 401(k) plan. A
motion to consolidate these suits has been approved. Derivative shareholder
suits have been filed in state court in Oklahoma, all based on similar
allegations. On August 1, 2002, a motion to consolidate and a motion to stay
these suits pending action by the federal court in the shareholder suits was
approved.

   The U.S. Trustee selected Williams to serve on the Official Committee of
Unsecured Creditors in the WCG bankruptcy. At its initial meeting, the committee
formed a subcommittee of the creditors committee, which excludes Williams, to
investigate what rights and remedies, if any, the creditors may have against
Williams relating to its dealings with WCG. Williams has entered into an
agreement with WCG in which Williams agreed not to object to a plan of
reorganization submitted by WCG in its bankruptcy if that plan provides (i) for
WCG to assume its obligations under certain service agreements and the sale
leaseback transaction with Williams and (ii) for Williams' other claims to be
treated as general unsecured claims with treatment substantially identical to
the treatment of claims by WCG's bondholders. This matter is discussed more
fully in Note 4.

   On April 26, 2002, the Oklahoma Department of Securities issued an order
initiating an investigation of Williams and WCG regarding issues associated with
the spin-off of WCG and regarding the WCG bankruptcy. Williams has committed to
cooperate fully in the investigation.

   On November 30, 2001, Shell Offshore, Inc. filed a complaint at the FERC
against Williams Gas Processing - Gulf Coast Company, L.P. (WGP), Williams Field
Services Company (WFS) and Transcontinental Gas Pipe Line Corporation (Transco),
alleging concerted actions by the affiliates frustrating the FERC's regulation
of Transco. The alleged actions are related to offers of gathering service by
WFS and its subsidiaries on the recently spundown and deregulated offshore
pipeline system, the North Padre Island gathering system. By order of the FERC,
the matter was heard before an administrative law judge in April 2002. On June
4, 2002, the administrative law judge


                                       23
<PAGE>

Notes (Continued)

issued an initial decision finding that the affiliates acted in concert to
frustrate the FERC's regulation of Transco and recommending that the FERC
reassert jurisdiction over the North Padre Island gathering system. Transco, WGP
and WFS believe their actions were reasonable and lawful and submitted briefs
taking exceptions to the initial decision. On September 5, 2002, the FERC issued
an order reasserting jurisdiction over that portion of the North Padre Island
facilities previously transferred to WFS. The FERC also determined an unbundled
gathering rate for service on these facilities which is to be collected by
Transco. Transco and WFS have sought rehearing of the FERC's order.

   On October 23, 2002 Western Gas Resources, Inc. and its subsidiary, Lance Oil
and Gas Company, Inc. filed suit against Williams Production RMT Company in
District Court for Sheridan, Wyoming, claiming that the merger of Barrett
Resources Corporation and Williams triggered a preferential right to purchase a
portion of the coal bed methane development properties owned by Barrett in the
Powder River Basin of northeastern Wyoming. In addition, Western claims that the
merger triggered certain rights of Western to replace Barrett as operator of
those properties. Mediation efforts were not successful in revolving the
dispute. The Company believes that the claims have no merit.

   In addition to the foregoing, various other proceedings are pending against
Williams or its subsidiaries which are incidental to their operations.

Enron and certain of its subsidiaries, with whom Energy Marketing & Trading and
other Williams subsidiaries have had commercial relations, filed a voluntary
petition for Chapter 11 reorganization under the U.S. Bankruptcy Code in the
Federal District Court for the Southern District of New York on December 2,
2001. Additional Enron subsidiaries have subsequently filed for Chapter 11
protection. Williams has filed its proofs of claim prior to the court-ordered
October 15, 2002, bar date. During fourth-quarter 2001, Energy Marketing &
Trading recorded a total decrease to revenues of approximately $130 million as a
part of its valuation of energy commodity and derivative trading contracts with
Enron entities, approximately $91 million of which was recorded pursuant to
events immediately preceding and following the announced bankruptcy of Enron.
Other Williams subsidiaries recorded approximately $5 million of bad debt
expense related to amounts receivable from Enron entities in fourth-quarter
2001, reflected in selling, general and administrative expenses. At December 31,
2001, Williams has reduced its recorded exposure to accounts receivable from
Enron entities, net of margin deposits, to expected recoverable amounts. During
first-quarter 2002, Energy Marketing & Trading sold rights to certain Enron
receivables to a third party in exchange for $24.5 million in cash. The $24.5
million was recorded within the trading revenues in first-quarter 2002.

Summary

   While no assurances may be given, Williams, based on advice of counsel, does
not believe that the ultimate resolution of the foregoing matters, taken as a
whole and after consideration of amounts accrued, insurance coverage, recovery
from customers or other indemnification arrangements, will have a materially
adverse effect upon Williams' future financial position, results of operations
or cash flow requirements.

Commitments

   Energy Marketing & Trading has entered into certain contracts giving it the
right to receive fuel conversion services as well as certain other services
associated with electric generation facilities that are either currently in
operation or are to be constructed at various locations throughout the
continental United States. At September 30, 2002, annual estimated committed
payments under these contracts range from approximately $60 million to $462
million, resulting in total committed payments over the next 20 years of
approximately $8 billion.

13. Preferred interests in consolidated subsidiaries
- --------------------------------------------------------------------------------

   In December 2000, Williams formed two separate legal entities, Snow Goose
Associates, L.L.C. (Snow Goose) and Arctic Fox Assets, L.L.C. (Arctic Fox) for
the purpose of generating funds to invest in certain Canadian energy-related
assets. An outside investor contributed $560 million in exchange for the
non-controlling preferred interest in Snow Goose. The investor in Snow Goose is
entitled to quarterly priority distributions. The initial priority return
structure was originally scheduled to expire in December 2005.

   During first-quarter 2002, the terms of the priority return were amended.
Significant terms of the amendment include elimination of covenants regarding
Williams' credit ratings, modifications of certain Canadian interest coverage
covenants and a requirement to amortize the outside investor's preferred
interest with equal principal payments due each quarter and the final payment in
April 2003. In addition, Williams provided a financial


                                       24
<PAGE>

Notes (Continued)

guarantee of the Arctic Fox note payable to Snow Goose which, in turn, is the
source of the priority returns. Based on the terms of the amendment, the
remaining balance due is classified as long-term debt due within one year on
Williams' Consolidated Balance Sheet at September 30, 2002. Priority returns
prior to this amendment are included in preferred returns and minority interest
in income of consolidated subsidiaries on the Consolidated Statement of
Operations.

   Following the downgrades in Williams' credit ratings in July 2002, the $135
million preferred interest in Williams Risk Holdings L.L.C. was redeemed.
Additionally, terms of the $200 million preferred interest in Castle Associates
L.P. and the $100 million preferred interest in Piceance Production Holdings LLC
were amended and as a result the $200 million and $100 million, respectively,
are classified as debt at September 30, 2002.

14. Stockholders' equity
- --------------------------------------------------------------------------------

   Concurrent with the sale of Kern River to MidAmerican Energy Holdings Company
(MEHC), Williams issued approximately 1.5 million shares of 9 7/8 percent
cumulative convertible preferred stock to MEHC for $275 million. The terms of
the preferred stock allow the holder to convert, at any time, one share of
preferred stock into 10 shares of Williams common stock at $18.75 per share.
Preferred shares have a liquidation preference equal to the stated value of
$187.50 per share plus any dividends accumulated and unpaid. Dividends on the
preferred stock are payable quarterly.

   Preferred dividends for the nine months ended September 30, 2002, include
$69.4 million associated with the accounting for a preferred security that
contains a conversion option that is beneficial to the purchaser at the time the
security was issued. This is accounted for as a noncash dividend (reduction to
retained earnings) and results from the conversion price being less than the
market price of Williams common stock on the date the preferred stock was
issued. The reduction in retained earnings was offset by an increase in capital
in excess of par value.

   In January 2002, Williams issued $1.1 billion of 6.5 percent notes payable
2007 which are subject to remarketing in 2004. Attached to these notes is an
equity forward contract requiring the holder to purchase Williams common stock
at the end of three years. The note and equity forward contract are bundled as
units, called FELINE PACS, and were sold in a public offering for $25 per unit.
At the end of three years, the holder is required to purchase for $25, one share
of Williams common stock provided the average price of Williams common stock
does not exceed $41.25 per share for a 20 trading day period prior to
settlement. If the average price over that period exceeds $41.25 per share, the
number of shares issued in exchange for $25 will be equal to one share
multiplied by the quotient of $41.25 divided by the average price over that
period.


                                       25
<PAGE>

Notes (Continued)

15. Comprehensive income (loss)
- --------------------------------------------------------------------------------

   Comprehensive income (loss) is as follows:

<Table>
<Caption>
                                          Three months ended          Nine months ended
                                             September 30,              September 30,
                                      ------------------------    ------------------------
(Millions)                               2002          2001          2002          2001
- ----------                            ----------    ----------    ----------    ----------
<S>                                   <C>           <C>           <C>           <C>
Net income (loss)                     $   (294.1)   $    221.3    $   (535.5)   $    760.0

Other comprehensive
  income (loss):
  Unrealized gains (losses)
    on securities                            (.9)        (18.1)          (.1)        (71.3)
  Realized (gains) losses on
    securities reclassified
    to net income                             --          20.3            --           (.4)
  Cumulative effect of a
    change in accounting for
    derivative instruments                    --            --            --        (153.4)
  Unrealized gains (losses) on
    derivative instruments                 106.6         408.5         (82.3)        865.6
  Net reclassification into
    earnings of derivative
    instrument (gains) losses              (62.9)       (120.3)       (263.7)        (74.6)
  Foreign currency
    translation adjustments                (19.5)        (11.6)           .2         (36.0)
                                      ----------    ----------    ----------    ----------
Other comprehensive income
  (loss) before taxes and
  minority interest                         23.3         278.8        (345.9)        529.9
Income tax benefit (provision)
  on other comprehensive
  income (loss)                            (16.0)       (112.1)        132.0        (212.2)
Minority interest in other
  comprehensive income (loss)                 --            --            --          10.0
                                      ----------    ----------    ----------    ----------
Other comprehensive income (loss)            7.3         166.7        (213.9)        327.7
                                      ----------    ----------    ----------    ----------
Comprehensive income (loss)           $   (286.8)   $    388.0    $   (749.4)   $  1,087.7
                                      ==========    ==========    ==========    ==========
</Table>

   Components of other comprehensive income (loss) before minority interest and
taxes related to discontinued operations are as follows:

<Table>
<Caption>
                                                 Three months ended             Nine months ended
                                                    September 30,                 September 30,
                                            ---------------------------    ---------------------------
(Millions)                                      2002           2001            2002           2001
- ----------                                  ------------   ------------    ------------   ------------
<S>                                         <C>            <C>             <C>            <C>

Unrealized gains (losses) on securities     $         --   $         --    $         --   $      (56.2)
Realized gains on securities
  reclassified to net income                          --             --              --          (20.7)
Foreign currency translation
  adjustments                                         --             --              --          (22.1)
                                            ------------   ------------    ------------   ------------
Other comprehensive income (loss)
  before minority interest and taxes
  related to discontinued operations        $         --   $         --    $         --   $      (99.0)
                                            ============   ============    ============   ============
</Table>


                                       26
<PAGE>

Notes (Continued)

16. Segment disclosures
- --------------------------------------------------------------------------------

Segments and reclassification of operations

  Williams' reportable segments are strategic business units that offer
different products and services. The segments are managed separately, because
each segment requires different technology, marketing strategies and industry
knowledge. Other includes corporate operations.

  Effective July 1, 2002, management of certain operations previously conducted
by Energy Marketing & Trading, International and Petroleum Services was
transferred to Midstream Gas & Liquids. These operations included natural gas
liquids trading, activities in Venezuela and a petrochemical plant,
respectively. Segment amounts have been restated to reflect these changes.

  On April 11, 2002, Williams Energy Partners L.P., a partially owned and
consolidated entity of Williams, acquired Williams Pipe Line, an operation
previously included within Petroleum Services. Accordingly, Williams Pipe Line's
operations have been transferred from the Petroleum Services segment to the
Williams Energy Partners segment for which segment information has been restated
for all prior periods presented.

Segments - Performance measurement

   Williams currently evaluates performance based upon segment profit (loss)
from operations which includes revenues from external and internal customers,
operating costs and expenses, depreciation, depletion and amortization, equity
earnings (losses) and income (loss) from investments including gains/losses on
impairments related to investments accounted for under the equity method.
Intersegment sales are generally accounted for as if the sales were to
unaffiliated third parties, that is, at current market prices.

   In first-quarter 2002, Williams began managing its interest rate risk on an
enterprise basis by the corporate parent. The more significant of these risks
relate to its debt instruments and its energy risk management and trading
portfolio. To facilitate the management of the risk, entities within Williams
may enter into derivative instruments (usually swaps) with the corporate parent.
The level, term and nature of derivative instruments entered into with external
parties are determined by the corporate parent. Energy Marketing & Trading has
entered into intercompany interest rate swaps with the corporate parent, the
effect of which is included in Energy Marketing & Trading's segment revenues and
segment profit (loss) as shown in the reconciliation within the following
tables. The results of interest rate swaps with external counterparties are
shown as interest rate swap loss in the Consolidated Statement of Operations
below operating income (loss).

  The majority of energy commodity hedging by certain Williams' business
units is done through intercompany derivatives with Energy Marketing & Trading
which, in turn, enters into offsetting derivative contracts with unrelated third
parties. Energy Marketing & Trading bears the counterparty performance risks
associated with unrelated parties.

  The decrease in Energy Marketing & Trading's total assets, as reflected on
page 30, is due primarily to a decline in the fair value of the energy risk
management and trading portfolio.

  The following tables reflect the reconciliation of revenues and operating
income (loss) as reported in the Consolidated Statement of Operations to segment
revenues and segment profit (loss).


                                       27
<PAGE>

Notes (Continued)

16. Segment disclosures (continued)
- --------------------------------------------------------------------------------

<Table>
<Caption>
                                           Energy                   Exploration     Midstream    Williams
                                         Marketing        Gas            &            Gas &       Energy     Petroleum
                                         & Trading      Pipeline     Production      Liquids     Partners     Services
                                        ----------     ----------   -----------    ----------   ----------   ----------
<S>                                     <C>            <C>          <C>            <C>          <C>          <C>

THREE MONTHS ENDED SEPTEMBER 30, 2002

Segment revenues:
   External                             $      (.4)    $    362.7    $     16.5    $    469.2   $     92.8   $  1,157.3
   Internal                                 (289.8)*         18.7         202.8          32.6         14.7         13.6
                                        ----------     ----------    ----------    ----------   ----------   ----------
Total segment revenues                      (290.2)         381.4         219.3         501.8        107.5      1,170.9
                                        ----------     ----------    ----------    ----------   ----------   ----------

Less intercompany interest
   rate swap gain (loss)                     (71.0)            --            --           --           --            --
                                        ----------     ----------    ----------    ----------   ----------   ----------
Total revenues                          $   (219.2)    $    381.4    $    219.3    $    501.8   $    107.5   $  1,170.9
                                        ==========     ==========    ==========    ==========   ==========   ==========


Segment profit (loss)                   $   (387.6)    $    172.6    $    231.8    $    104.0   $     13.4   $   (406.2)
Less:
   Equity earnings (loss)                       --           11.6           1.5           7.3           --          (.1)
   Income (loss) from
      investments                               --           (2.7)           --            --           --          (.7)
   Intercompany interest
      rate swap gain (loss)                  (71.0)            --            --            --           --           --
                                        ----------     ----------    ----------    ----------   ----------   ----------
Segment operating
   income (loss)                        $   (316.6)    $    163.7    $    230.3    $     96.7   $     13.4   $   (405.4)
                                        ----------     ----------    ----------    ----------   ----------   ----------
General corporate expenses

Consolidated operating
   income (loss)

THREE MONTHS ENDED SEPTEMBER 30, 2001

Segment revenues:
   External                             $    618.4     $    324.3    $     55.9    $    361.1   $     90.5   $  1,267.8
   Internal                                 (125.3)*         10.8         104.7          53.8         20.3         14.1
                                        ----------     ----------    ----------    ----------   ----------   ----------
Total segment revenues                       493.1          335.1         160.6         414.9        110.8      1,281.9
                                        ----------     ----------    ----------    ----------   ----------   ----------

Less intercompany interest
   rate swap gain (loss)                        --             --            --            --           --           --
                                        ----------     ----------    ----------    ----------   ----------   ----------
Total revenues                          $    493.1     $    335.1    $    160.6    $    414.9   $    110.8   $  1,281.9
                                        ==========     ==========    ==========    ==========   ==========   ==========

Segment profit (loss)                   $    356.9     $    101.8    $     65.0    $     69.5   $     27.1   $     42.4
Less:
   Equity earnings (loss)                      (.3)          11.9           4.9           1.3           --           --
   Income (loss) from
      investments                            (23.3)            --            --            --           --           --
   Intercompany interest
      rate swap gain (loss)                     --             --            --            --           --           --
                                        ----------     ----------    ----------    ----------   ----------   ----------
Segment operating
   income (loss)                        $    380.5     $     89.9    $     60.1    $     68.2   $     27.1   $     42.4
                                        ----------     ----------    ----------    ----------   ----------   ----------

General corporate expenses

Consolidated operating
   income (loss)

</Table>
<PAGE>
<Table>
<Caption>
                                          Inter-
                                         national       Other      Eliminations     Total
                                        ----------    ----------   ------------   ----------
<S>                                     <C>           <C>           <C>           <C>

THREE MONTHS ENDED SEPTEMBER 30, 2002

Segment revenues:
   External                             $       .7    $      5.1    $       --    $  2,103.9
   Internal                                     --           9.7          (2.3)           --
                                        ----------    ----------    ----------    ----------
Total segment revenues                          .7          14.8          (2.3)      2,103.9
                                        ----------    ----------    ----------    ----------

Less intercompany interest
   rate swap gain (loss)                        --            --          71.0            --
                                        ----------    ----------    ----------    ----------
Total revenues                          $       .7    $     14.8    $    (73.3)   $  2,103.9
                                        ==========    ==========    ==========    ==========


Segment profit (loss)                   $     53.1    $     (3.5)   $       --    $   (222.4)
Less:
   Equity earnings (loss)                     (1.4)           .2            --          19.1
   Income (loss) from
      investments                             58.5            --            --          55.1
   Intercompany interest
      rate swap gain (loss)                     --            --            --         (71.0)
                                        ----------    ----------    ----------    ----------
Segment operating
   income (loss)                        $     (4.0)   $     (3.7)   $       --    $   (225.6)
                                        ----------    ----------    ----------    ----------
General corporate expenses                                                             (44.1)
                                                                                  ----------
Consolidated operating
   income (loss)                                                                  $   (269.7)
                                                                                  ==========
THREE MONTHS ENDED SEPTEMBER 30, 2001

Segment revenues:
   External                             $      1.1    $      8.2    $       --    $  2,727.3
   Internal                                     --           9.7         (88.1)           --
                                        ----------    ----------    ----------    ----------
Total segment revenues                         1.1          17.9         (88.1)      2,727.3
                                        ----------    ----------    ----------    ----------

Less intercompany interest
   rate swap gain (loss)                        --            --            --            --
                                        ----------    ----------    ----------    ----------
Total revenues                          $      1.1    $     17.9    $    (88.1)   $  2,727.3
                                        ==========    ==========    ==========    ==========

Segment profit (loss)                   $    (10.9)   $      1.6    $       --    $    653.4
Less:
   Equity earnings (loss)                     (7.5)           --            --          10.3
   Income (loss) from
      investments                               --            --            --         (23.3)
   Intercompany interest
      rate swap gain (loss)                     --            --            --            --
                                        ----------    ----------    ----------    ----------
Segment operating
   income (loss)                        $     (3.4)   $      1.6    $       --    $    666.4
                                        ----------    ----------    ----------    ----------

General corporate expenses                                                             (32.4)
                                                                                  ----------
Consolidated operating
   income (loss)                                                                  $    634.0
                                                                                  ==========
</Table>

*  Energy Marketing & Trading intercompany cost of sales, which are netted in
   revenues consistent with fair-value accounting, exceed intercompany revenue.


                                       28
<PAGE>

Notes (Continued)

16. Segment disclosures (continued)
- --------------------------------------------------------------------------------

<Table>
<Caption>
                                            Energy                   Exploration    Midstream     Williams
                                          Marketing         Gas          &            Gas &         Energy    Petroleum
                                          & Trading      Pipeline     Production     Liquids      Partners     Services
                                         ----------     ----------   -----------   ----------    ----------   ----------
<S>                                      <C>            <C>           <C>          <C>           <C>          <C>

NINE MONTHS ENDED SEPTEMBER 30, 2002

Segment revenues:
   External                              $    649.8     $  1,055.7    $     58.4   $  1,273.1    $    262.9   $  3,197.5
   Internal                                  (863.6)*         50.7         619.4         66.7          40.7         69.2
                                         ----------     ----------    ----------   ----------    ----------   ----------
Total segment revenues                       (213.8)       1,106.4         677.8      1,339.8         303.6      3,266.7
                                         ----------     ----------    ----------   ----------    ----------   ----------

Less intercompany interest
   rate swap gain (loss)                     (139.9)            --            --           --            --           --
                                         ----------     ----------    ----------   ----------    ----------   ----------
Total revenues                           $   ( 73.9)    $  1,106.4    $    677.8   $  1,339.8    $    303.6   $  3,266.7
                                         ==========     ==========    ==========   ==========    ==========   ==========

Segment profit (loss)                    $   (602.0)    $    506.0    $    433.5   $    210.0    $     69.8   $   (396.5)
Less:
   Equity earnings (loss)                      (4.0)          82.8           2.1         12.5            --          (.4)
   Income (loss) from
      investments                                --          (15.0)           --           --            --          (.7)
   Intercompany interest
      rate swap gain (loss)                  (139.9)            --            --           --            --           --
                                         ----------     ----------    ----------   ----------    ----------   ----------
Segment operating
   income (loss)                         $   (458.1)    $    438.2    $    431.4   $    197.5    $     69.8   $   (395.4)
                                         ----------     ----------    ----------   ----------    ----------   ----------

General corporate expenses

Consolidated operating
   income (loss)

NINE MONTHS ENDED SEPTEMBER 30, 2001

Segment revenues:
   External                              $  1,851.8     $  1,023.9    $     93.7   $  1,416.3    $    265.5   $  3,976.7
   Internal                                  (422.8)*         24.6         316.5         90.5          45.2        100.9
                                         ----------     ----------    ----------   ----------    ----------   ----------
Total segment revenues                      1,429.0        1,048.5         410.2      1,506.8         310.7      4,077.6
                                         ----------     ----------    ----------   ----------    ----------   ----------

Less intercompany interest
   rate swap gain (loss)                         --             --            --           --            --           --
                                         ----------     ----------    ----------   ----------    ----------   ----------
Total revenues                           $  1,429.0     $  1,048.5    $    410.2   $  1,506.8    $    310.7   $  4,077.6
                                         ==========     ==========    ==========   ==========    ==========   ==========

Segment profit (loss)                    $  1,108.6     $    436.0    $    165.4   $    126.4    $     83.6   $    189.5
Less:
   Equity earnings (loss)                       1.4           30.1          15.8        (11.5)           --           .1
   Income (loss) from
      investments                             (23.3)          27.5            --           --            --           --
   Intercompany interest
      rate swap gain (loss)                      --             --            --           --            --           --
                                         ----------     ----------    ----------   ----------    ----------   ----------
Segment operating
   income (loss)                         $  1,130.5     $    378.4    $    149.6   $    137.9    $     83.6   $    189.4
                                         ----------     ----------    ----------   ----------    ----------   ----------
General corporate expenses

Consolidated operating
   income (loss)


</Table>
<PAGE>
<Table>
<Caption>

                                           Inter-
                                          national        Other     Eliminations      Total
                                         ----------    ----------   ------------   ----------
<S>                                      <C>           <C>          <C>            <C>

NINE MONTHS ENDED SEPTEMBER 30, 2002

Segment revenues:
   External                              $      3.1    $     17.7    $       --    $  6,518.2
   Internal                                      --          29.4         (12.5)           --
                                         ----------    ----------    ----------    ----------
Total segment revenues                          3.1          47.1         (12.5)      6,518.2
                                         ----------    ----------    ----------    ----------

Less intercompany interest
   rate swap gain (loss)                         --            --         139.9            --
                                         ----------    ----------    ----------    ----------
Total revenues                           $      3.1    $     47.1    $   (152.4)   $  6,518.2
                                         ==========    ==========    ==========    ==========

Segment profit (loss)                    $     34.8    $     (1.2)   $       --    $    254.4
Less:
   Equity earnings (loss)                     (12.7)          (.6)           --          79.7
   Income (loss) from
      investments                              58.5            --            --          42.8
   Intercompany interest
      rate swap gain (loss)                      --            --            --        (139.9)
                                         ----------    ----------    ----------    ----------
Segment operating
   income (loss)                         $    (11.0)   $      (.6)   $       --    $    271.8
                                         ----------    ----------    ----------    ----------

General corporate expenses                                                             (116.4)
                                                                                   ----------
Consolidated operating
   income (loss)                                                                   $    155.4
                                                                                   ==========
NINE MONTHS ENDED SEPTEMBER 30, 2001

Segment revenues:
   External                              $      2.6    $     27.9    $       --    $  8,658.4
   Internal                                      --          29.5        (184.4)           --
                                         ----------    ----------    ----------    ----------
Total segment revenues                          2.6          57.4        (184.4)      8,658.4
                                         ----------    ----------    ----------    ----------

Less intercompany interest
   rate swap gain (loss)                         --            --            --            --
                                         ----------    ----------    ----------    ----------
Total revenues                           $      2.6    $     57.4    $   (184.4)   $  8,658.4
                                         ==========    ==========    ==========    ==========

Segment profit (loss)                    $    (22.9)   $      9.0    $       --    $  2,095.6
Less:
   Equity earnings (loss)                     (13.7)          (.4)           --          21.8
   Income (loss) from
      investments                                --            --            --           4.2
   Intercompany interest
      rate swap gain (loss)                      --            --            --            --
                                         ----------    ----------    ----------    ----------
Segment operating
   income (loss)                         $     (9.2)   $      9.4    $       --    $  2,069.6
                                         ----------    ----------    ----------    ----------
General corporate expenses                                                              (88.8)
                                                                                   ----------
Consolidated operating
   income (loss)                                                                   $  1,980.8
                                                                                   ==========
</Table>

*  Energy Marketing & Trading intercompany cost of sales, which are netted in
   revenues consistent with fair-value accounting, exceed intercompany revenue.


                                       29

<PAGE>


16. Segment disclosures (continued)
- --------------------------------------------------------------------------------

<Table>
<Caption>
                                                    Total Assets
                                       ---------------------------------------
(Millions)                             September 30, 2002    December 31, 2001
- ----------                             ------------------    -----------------
<S>                                    <C>                   <C>

Energy Marketing & Trading                  $12,734.9           $15,045.3
Gas Pipeline                                  8,110.6             7,506.5
Exploration & Production                      5,844.9             5,045.6
Midstream Gas & Liquids                       5,154.8             4,750.7
Williams Energy Partners                      1,201.9             1,033.6
Petroleum Services                            1,909.1             2,147.9
International                                   668.5             1,124.8
Other                                         6,234.5             6,852.1
Eliminations                                 (6,771.1)           (7,473.8)
                                            ---------           ---------
                                             35,088.1            36,032.7
Discontinued operations                         779.6             2,873.5
                                            ---------           ---------
Total                                       $35,867.7           $38,906.2
                                            =========           =========
</Table>


                                       30
<PAGE>

Notes (Continued)

17. Recent accounting standards
- --------------------------------------------------------------------------------

   In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No.
142, "Goodwill and Other Intangible Assets." Williams adopted this Statement
effective January 1, 2002. This Statement addresses accounting and reporting
standards for goodwill and other intangible assets. Under the provisions of this
Statement, goodwill and intangible assets with indefinite useful lives are no
longer amortized, but will be tested annually for impairment. Based on
management's estimate of the fair value of the operating unit's goodwill there
was no impairment upon adoption of this Standard at January 1, 2002.

   In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations," which is effective for fiscal years beginning after June 15, 2002.
The Statement requires legal obligations associated with the retirement of
long-lived assets to be recognized at their fair value at the time that the
obligations are incurred. Upon initial recognition of a liability, that cost
should be capitalized as part of the related long-lived asset and allocated to
expense over the useful life of the asset. Williams will adopt the new rules on
asset retirement obligations on January 1, 2003. The impact of adoption is to be
reported as a cumulative effect of change in accounting principle. Application
of the new rules is expected to result in estimated retirement obligations
related to exploration and production assets, offshore transmission platforms,
and certain international assets. The estimated obligations will consider
current factors such as expected future inflation rates, current costs of
borrowing, estimated retirement dates and estimated expected costs of required
retirement activities. Retirement obligations have not been estimated for assets
for which the remaining life is not currently determinable, including pipeline
transmission assets, processing and refining assets, and gas gathering systems.

   In second-quarter 2002, the FASB issued SFAS No. 145, "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical
Corrections." The rescission of SFAS No. 4, "Reporting Gains and Losses from
Extinguishment of Debt," and SFAS No. 64, "Extinguishments of Debt Made to
Satisfy Sinking-Fund Requirements," requires that gains and losses from
extinguishment of debt only be classified as extraordinary items in the event
that they meet the criteria of APB Opinion No. 30. SFAS No. 44, "Accounting for
Intangible Assets of Motor Carriers," established accounting requirements for
the effects of transition to the Motor Carriers Act of 1980 and is no longer
required now that the transitions have been completed. Finally, the amendments
to SFAS No. 13 require certain lease modifications that have economic effects
which are similar to sale-leaseback transactions be accounted for as
sale-leaseback transactions. The provisions of this Statement related to the
rescission of SFAS No. 4 are to be applied in fiscal years beginning after May
15, 2002, while the provisions related to SFAS No. 13 are effective for
transactions occurring after May 15, 2002. All other provisions of the Statement
are effective for financial statements issued on or after May 15, 2002. There
was no initial impact of SFAS No. 145 on Williams' results of operations and
financial position. However, in subsequent reporting periods, gains and losses
from debt extinguishments will not be accounted for as extraordinary items.

   Also in second-quarter 2002, the FASB issued SFAS No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities." This Statement addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)." This Statement
requires that a liability for a cost associated with an exit or disposal
activity be recognized and measured initially at fair value only when the
liability is incurred. The provisions of the Statement are effective for exit or
disposal activities that are initiated after December 31, 2002. The effect of
this standard on Williams is being evaluated.

     On October 25, 2002, the Emerging Issues Task Force (EITF) reached a
consensus on Issue No. 02-3, "Issues Related to Accounting for Contracts
Involved in Energy Trading and Risk Management Activities." This Issue rescinds
EITF Issue No. 98-10, "Accounting for Contracts Involved in Energy Trading and
Risk Management Activities," the impact of which is to preclude fair value
accounting for all energy trading contracts not within the scope of SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities" and trading
inventories. The EITF also reached a consensus that gains and losses on
derivative instruments within the scope of SFAS No. 133 should be shown net in
the income statement if the derivative instruments are held for trading
purposes. The consensus regarding the rescission of Issue 98-10 is applicable
for fiscal periods beginning after December 15, 2002, and earlier application is
permitted.  Williams is evaluating whether it will adopt the consensus in 2002
or January 1, 2003.  Adoption of the consensus will be reported as a cumulative
effect of a change in accounting principle. Energy trading contracts not within
the scope of SFAS No. 133 executed after October 25, 2002, but prior to the
implementation of the consensus are not permitted to apply fair value
accounting. The effect of initially applying the consensus, which could be
significant, is being evaluated, as Williams must review its energy trading
contracts to identify those contracts within the scope of SFAS No. 133.


                                       31
<PAGE>

                                     ITEM 2
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATION

RECENT EVENTS

   As a result of credit issues facing the Company and the assumption of payment
obligations and performance on guarantees associated with WCG, Williams
announced plans during first-quarter 2002 to strengthen its balance sheet and
support retention of its investment grade ratings. The plan included reducing
capital expenditures during the balance of 2002, future sales of assets to
generate proceeds to be used to reduce outstanding debt and the lowering of
expenses, in part through an enhanced-benefit early retirement program which
concluded during the second quarter. In addition, the plan included the
elimination of "ratings triggers" giving rise to options to put or accelerate
debt or cause redemption of preferred interests. Exposure to ratings triggers
was substantially reduced to $182 million in first-quarter 2002. In
third-quarter 2002, the remaining $182 million was redeemed or extinguished.

   During the second quarter, Williams experienced liquidity issues, the effect
of which limited Energy Marketing & Trading's ability to manage market risk and
exercise hedging strategies as market liquidity deteriorated. During May 2002,
major rating agencies lowered their credit ratings on Williams' unsecured
long-term debt; however, the ratings remained investment grade for the balance
of the quarter. In June, Williams announced a $500 million reduction in its
working capital and liquidity commitments to its Energy Marketing & Trading
business and reduced its work force accordingly. Later in June, Williams
announced its intentions to offer for sale its two refineries and related
assets, with the expectation of closing such sales by the end of 2002.

   Williams experienced a substantial net loss for the second quarter. The loss
primarily resulted from a decline in Energy Marketing & Trading's results and
reflected a significant decline in the forward mark-to-market value of its
portfolio, the costs associated with terminated power projects, and the partial
impairment of goodwill from deteriorating energy trading market conditions in
the second quarter. Williams also recognized asset impairments and cost
write-offs, in part a result of asset sale considerations and terminated
projects reflecting a reduced capital expenditure program. In addition, the
board of directors reduced the common stock dividend for the third quarter from
the prior level of $.20 per share to $.01 per share. The major rating agencies
downgraded Williams' unsecured long-term debt credit ratings to below investment
grade, reflecting the uncertainty associated with the trading business,
short-term cash requirements facing the Company and the increased level of debt
the company had incurred to meet the WCG payment obligations and guarantees.
Concurrent with these events, Williams was unable to complete a renewal of its
unsecured short-term bank facility which expired on July 24, 2002. Subsequently,
Williams and a subsidiary obtained two secured facilities totaling $1.3 billion,
including a letter of credit facility for $400 million, and amended its existing
revolving credit facility, which expires July 2005, to make it secured. These
facilities include pledges of certain assets and contain financial ratios and
other covenants that must be maintained (see Note 11). If such provisions of the
agreements are not maintained, then amounts outstanding can become due and
payable immediately.

   Following the credit rating downgrade in July, Williams sold certain
exploration and production properties and substantially all of its natural gas
liquids pipeline systems, receiving net cash proceeds of approximately $1.5
billion. Williams also sold certain liquified natural gas assets for
approximately $217 million, its 27 percent ownership interest in a Lithuanian
refinery, pipeline and terminal investment for $85 million and its $75 million
note receivable from the Lithuanian investment for face value. These
transactions closed in September. During the second quarter, a review for
impairment was performed on certain assets that were being considered for
possible sale, including an assessment of the more likely than not probabilities
of sale for each asset. Impairments were recorded in the second quarter totaling
approximately $71 million reflecting management's estimate of the fair value of
these assets based on information available at the time. During third-quarter,
Williams' board of directors approved for sale the Central natural gas pipeline
unit and the soda ash mining operations, both of which are reported as
discontinued operations. Williams currently has a definitive agreement for the
sale of Central. Also, during the third quarter, the impairment reviews were
updated to incorporate new information obtained through the maturation of the
assets sales process. As a result, Williams recorded $568 million of pre-tax
impairment charges (including those recorded in discontinued operations) in the
third quarter (see Notes 3 and 7).

   In addition, Williams is pursuing the sale of other assets to enhance
liquidity. The sales are anticipated to close during the remainder of 2002 and
the first half of 2003. Williams has numerous assets that could be sold which
have values in excess of the previously announced target of $1.5 billion to $3
billion to be generated from asset sales. The specific assets that will be sold
and the timing of such sales are dependent on various factors, including
negotiations with prospective buyers, regulatory approvals, industry conditions,
lender consents to sales of collateral and the short-and long-term liquidity
requirements of the Company. While management believes it has considered all
relevant information in assessing for potential impairments, the ultimate sales
price for assets that may be sold in the future may result in additional
impairments or losses, and/or gains.


                                       32
<PAGE>


Management's Discussion & Analysis (Continued)

   The operating results of Energy Marketing & Trading are adversely affected by
several factors, including Williams' overall liquidity and credit ratings which
impact Energy Marketing & Trading's ability to enter into price risk management
and hedging activities. The credit rating downgrades have also triggered certain
Energy Marketing & Trading contractual provisions, including providing
counterparties with adequate assurance, margin, credit enhancement, or credit
replacement. Successful completion of the agreement announced on November 11,
2002 regarding the global settlement with the State of California and other
parties will eliminate certain outstanding complaints and litigation and resolve
the State of California's claims for refunds to the FERC filed in connection
with its power activities in California (see Note 12). This agreement provides
for a new long-term power sales contract with the state in addition to other
settlement provisions. For further discussions regarding Energy Marketing &
Trading's business and its fair value of energy contracts, see the "Fair Value
of Energy Risk Management and Trading activities." The energy trading sector has
experienced deteriorating conditions because of credit and regulatory concerns,
and these have significantly reduced Energy Marketing & Trading's ability to
attract new business. During third-quarter, several companies in the energy
trading sector have announced that they are either reducing commitments to or
exiting altogether, the energy trading business. These market conditions plus
the unwillingness of counterparties to enter into new business with Energy
Marketing & Trading will affect results in the future and could result in
additional operating losses. On August 1, 2002, Williams announced its intention
to further reduce its commitment and exposure to its energy marketing and risk
management business. This reduction could be realized by entering into a joint
venture arrangement with a third party or a sale of a portion or all of the
marketing and trading portfolio. It is possible that Williams, in order to
generate levels of liquidity it needs in the future, would be willing to accept
amounts for a portion or its entire portfolio that are less than its carrying
value at September 30, 2002. Additionally, on October 25, 2002, the Emerging
Issues Task Force concluded in Issue No. 02-3 to rescind Issue No. 98-10, under
which non-derivative energy trading contracts are currently marked-to-market. In
addition, trading inventories will also no longer be marked-to-market but will
be reported on a lower of cost or market basis. Upon adoption of this new
standard, Energy Marketing & Trading will record an adjustment for the
cumulative effect of this change in accounting principle. The impact of this
change in accounting principle could be significant. Energy Marketing & Trading
is currently evaluating the potential impact of the change but is unable at this
time to provide an estimate.

   At September 30, 2002, Williams has maturing notes payable and long-term debt
totaling $685 million for the remainder of the current year and $2 billion
during 2003. The Company's available liquidity to meet these requirements and
fund a reduced level of capital expenditures will be dependent on several items,
including the cash flows of retained businesses, the amount of proceeds raised
from the sale of assets and the price of natural gas. Future cash flows from
operations may also be affected by the timing and nature of the sale of assets.
Because of recent asset sales, anticipated asset sales in the future and
available secured credit facilities, Williams currently believes that it has the
financial resources and liquidity to meet future cash requirements for the
balance of the year.

   The new secured credit facilities require Williams to meet certain covenants
and limitations as well as maintain certain financial ratios (see Note 11).
Included in these covenants are provisions that limit the ability to incur
future indebtedness, pledge assets and pay dividends on common stock. In
addition, debt and related commitments must be reduced from the proceeds of
asset sales and minimum levels of current and future liquidity have been
established.

GENERAL

   In accordance with the provisions related to discontinued operations within
Statement of Financial Accounting Standard (SFAS) No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," the consolidated financial
statements and notes in Item 1 reflect the results of operations, financial
position and cash flows of the following components as discontinued operations
(see Note 7):

      o  Central natural gas pipeline, previously one of Gas Pipeline's segments
      o  The Colorado soda ash mining operations, previously part of the
         International segment
      o  Two natural gas liquids pipeline systems, Mid-American Pipeline and
         Seminole Pipeline, previously part of the Midstream Gas & Liquids
         segment
      o  Kern River Gas Transmission (Kern River), previously one of Gas
         Pipeline's segments

   Unless indicated otherwise, the following discussion and analysis of results
of operations, financial condition and liquidity relates to the continuing
operations of Williams and should be read in conjunction with the consolidated
financial statements and notes thereto included in Item 1 of this document and
Exhibit 99(b) of Williams' Current Report on Form 8-K dated May 28, 2002, which
includes financial statements that reflect Kern River as discontinued
operations.


                                       33
<PAGE>

Management's Discussion & Analysis (Continued)

RESULTS OF OPERATIONS

   Consolidated Overview

   The following table and discussion is a summary of Williams' consolidated
results of operations. The results of operations by segment are discussed in
further detail beginning on page 37.

<Table>
<Caption>
                                                THREE                     NINE
                                            MONTHS ENDED              MONTHS ENDED
                                            SEPTEMBER 30,             SEPTEMBER 30,
                                     ------------------------    ------------------------
                                        2002          2001          2002          2001
                                     ----------    ----------    ----------    ----------
                                            (MILLIONS)                  (MILLIONS)
<S>                                  <C>           <C>           <C>           <C>

Revenues                             $  2,103.9    $  2,727.3    $  6,518.2    $  8,658.4
                                     ==========    ==========    ==========    ==========

Operating income (loss)              $   (269.7)   $    634.0         155.4       1,980.8
Interest accrued-net                     (358.5)       (167.4)       (828.8)       (474.5)
Interest rate swap loss                   (52.2)           --        (125.2)           --
Investing income (loss):
  Estimated loss on realization
    of amounts due from WCG               (22.9)           --        (269.9)           --
  Other                                    85.3         (69.6)        161.5          39.9
Preferred returns and
  minority interest in income
  of consolidated subsidiaries            (23.7)        (22.2)        (60.6)        (70.4)
Other income - net                          1.2           1.9          20.6          12.2
                                     ----------    ----------    ----------    ----------
Income (loss) from continuing
  operations before income taxes         (640.5)        376.7        (947.0)      1,488.0
Provision (benefit) for income
  taxes                                  (231.8)        182.8        (313.0)        615.2
                                     ----------    ----------    ----------    ----------
Income (loss) from continuing
  operations                             (408.7)        193.9        (634.0)        872.8
Income (loss) from discontinued
  operations                              114.6          27.4          98.5        (112.8)
                                     ----------    ----------    ----------    ----------
Net income (loss)                        (294.1)        221.3        (535.5)        760.0
Preferred stock dividends                  (6.8)           --         (83.3)           --
                                     ----------    ----------    ----------    ----------

Income (loss) applicable to
 common stock                        $   (300.9)   $    221.3    $   (618.8)   $    760.0
                                     ==========    ==========    ==========    ==========
</Table>

Three Months Ended September 30, 2002 vs. Three Months Ended September 30, 2001

   Williams' revenues decreased $623.4 million, or 23 percent, due primarily to
lower revenues associated with energy risk management and trading activities at
Energy Marketing & Trading and lower refined product sales volumes within
Petroleum Services. Partially offsetting these decreases were increased natural
gas production revenues as a result of higher net production volumes and net
realized average prices within Exploration & Production, increased revenues
associated with higher natural gas liquids sales prices from domestic processing
activities as well as an increase in natural gas liquids sales from Canadian
fractionation activities within Midstream Gas & Liquids and an increase to
revenues as a result of reductions in rate refund liabilities associated with
rate case settlements within Gas Pipeline.

   Cost and operating expenses decreased $22.1 million due primarily to lower
refining and marketing costs at Petroleum Services and lower gas exchange
imbalance settlements (offset in revenues) at Gas Pipeline.  Partially
offsetting these decreases were higher natural gas liquids purchases related to
Canadian fractionation activities, higher depreciation expense at Midstream Gas
& Liquids and increased depletion, depreciation and amortization and lease
operating expenses at Exploration & Production due primarily to the acquisition
of the former Barrett operations.

   Selling, general and administrative expenses decreased $19.7 million, or 8
percent, due primarily to lower variable compensation levels associated with
reduced segment profit and reduced staffing levels at Energy Marketing & Trading
slightly offset by $6 million of expenses related to the Company contributions
to an employee stock ownership plan resulting from retirement of related
external debt, as well as approximately $5 million of employee-related severance
costs.

   Other (income) expense - net in 2002 includes $432.6 million of impairment
charges within Petroleum Services comprised of a $176.2 million impairment of
the Midsouth refinery and related assets, $112.1 million impairment of the
travel centers and a $144.3 million impairment of the bio-energy business (see
Note 3).  Partially offsetting these impairment charges were $143.9 million of
gains on sales of natural gas production properties in Wyoming and the Anadarko
Basin within Exploration & Production.

   General corporate expenses increased $11.7 million, or 36 percent, due
primarily to approximately $19 million of costs related to consulting services
and legal fees associated with the liquidity and business issues addressed
during third-quarter 2002.

   Operating income (loss) decreased $903.7 million to an operating loss of
$269.7 million, due primarily to lower

                                       34
<PAGE>

Management's Discussion & Analysis (Continued)

net revenues associated with energy risk management and trading activities at
Energy Marketing & Trading, and the $432.6 million of impairment charges as
previously mentioned. Partially offsetting these decreases were the gains on
sales of natural gas properties and increased production at Exploration &
Production discussed above and the effect of the rate refund liability
reductions related to rate case settlements at Gas Pipeline.

   Interest accrued - net increased $191.1 million, or 114 percent, due
primarily to $53 million related to interest on the RMT note payable entered
into during third-quarter 2002 (see Note 11), the $66 million effect of higher
borrowing levels and the $45 million effect of higher average interest rates as
well as $27 million of higher debt amortization expense.

   In 2002, Williams entered into interest rate swaps with external
counterparties resulting in losses of $52.2 million in third-quarter 2002 (see
Note 16).

   Investing income (loss) increased $132 million due primarily to the $58.5
million gain on the sale of Williams' investment in a Lithuanian oil refinery
pipeline and terminal complex, which was included in the International operating
segment, an $8.7 million gain on the sale of Williams' general partner equity
interest in Northern Border Partners, L.P., $8.8 million in higher earnings on
equity investments, the absence in third-quarter 2002 of a $70.9 million
write-down of Williams' investment in WCG common stock and a $23.3 million loss
related to the 2001 loss from other investments included in the Energy Marketing
& Trading operating segment, which were determined to be other than temporary.
Partially offsetting is an $11.6 million net write-down of Williams' equity
interest in a Canadian and U.S. gas pipeline and $22.9 million estimated loss on
realization of amounts due from WCG (see Note 4).

   The provision (benefit) for income taxes was favorable by $414.6 million due
primarily to a pre-tax loss in 2002 as compared to pre-tax income in 2001. The
effective income tax rate for the three months ended September 30, 2002, is
greater than the federal statutory rate due primarily to the effect of state
income taxes offset by the effect of taxes on foreign operations. The effective
income tax rate for the three months ended September 30, 2001, is greater than
the federal statutory rate due primarily to valuation allowances associated with
the tax benefits for investment write-downs for which ultimate realization is
uncertain and the effect of state income taxes.

   Income (loss) from discontinued operations increased $87.2 million ($167.3
million pre-tax) due primarily to the $304.6 million before tax gain on the sale
of Mid-America and Seminole Pipelines, partially offset by the $86.9 million
impairment at Central natural gas pipeline system and an additional impairment
of $48.2 million of the soda ash operations (see Note 7).

Nine Months Ended September 30, 2002 vs. Nine Months Ended September 30, 2001

   Williams' revenue decreased $2,140.2 million, or 25 percent, due primarily to
lower revenues associated with energy risk management and trading activities at
Energy Marketing & Trading, lower refined product sales prices and decreased
volumes sold at the refineries, lower travel center and Alaska convenience store
sales and the absence of $183 million of revenue related to the 198 convenience
stores sold in May 2001 within Petroleum Services and lower natural gas liquids
sales prices within Midstream Gas & Liquids.  Partially offsetting these
decreases was an increase in net production volumes within Exploration &
Production and an increase in revenues due to the rate refund liability
reductions associated with the rate case settlements within Gas Pipeline.

   Costs and operating expenses decreased $860.2 million, or 14 percent, due
primarily to lower refining and marketing costs, lower travel center/convenience
store costs reflecting the absence of the 198 convenience stores sold in May
2001 and lower diesel sales volumes and average gasoline and diesel purchase
prices at Petroleum Services and lower shrink, fuel and replacement gas
purchases related to processing activities at Midstream Gas & Liquids.  Slightly
offsetting these decreases are increased depletion, depreciation and
amortization and lease operating expenses at Exploration & Production due
primarily to the addition of the former Barrett operations.

   Selling, general and administrative expenses for 2002 include approximately
$6 million of expenses related to the company contributions to an employee stock
ownership plan resulting from retirement of related external debt, as well as
approximately $8 million of employee-related severance costs.

   Other (income) expense - net in 2002 includes $459.6 million of impairment
charges within Petroleum Services comprised of a $176.2 million impairment of
the Midsouth refinery and related assets, $139.1 million impairment of the
travel centers and a $144.3 million impairment of the bio-energy business (see
Note 3). Also included in other (income) expense - net in 2002 are $152.7
million of impairment charges and loss accruals within Energy Marketing &
Trading comprised of $95.2 million associated with a terminated power plant
project and accruals for commitments for certain power assets and a $57.5
million goodwill impairment. Partially offsetting these impairment charges and
accruals were $143.9 million of gains on sales of natural gas production
properties at Exploration & Production in 2002 and the absence of 2001
impairment charges of $15.1 million and $11.2 million within Midstream Gas &
Liquids and Petroleum Services, respectively (see Note 3).

   General corporate expenses increased $27.6 million, or 31 percent, due
primarily to $19 million of costs related to consulting services and legal fees
associated with the liquidity and business issues addressed during third-quarter
2002, and $6 million of expense related to the enhanced-benefit early retirement
options offered to certain employee groups as well as $4 million of expense
related to employee severance costs.

   Operating income (loss) decreased $1,825.4 million, or 92 percent, due
primarily to lower net revenues associated with energy risk management and
trading activities at Energy Marketing & Trading, decreased profit from refining
and marketing operations within Petroleum Services and the impairment charges
and loss accruals noted above.  Partially offsetting these decreases are the
gains from the sale of natural gas production properties and increased net
production volumes at Exploration & Production, the effect of the reductions in
rate refund liabilities associated with rate case settlements at Gas Pipeline
and higher natural gas liquids margins at Midstream Gas & Liquids.

   Interest accrued - net increased $354.3 million, or 75 percent, due
primarily to $53 million related to interest on the RMT note payable, the $137
million effect of higher average interest rates, the $103 million effect of
higher borrowing levels and $45 million higher debt amortization expense.  Also
contributing to these increases is a $10 million decrease in interest
capitalized related to a gas compression facility which began operations in
August 2001.

   In 2002, Williams entered into interest rate swaps with external counter
parties resulting in losses of $125.2 million (see Note 16).


                                       35
<PAGE>

Management's Discussion & Analysis (Continued)

   Investing income (loss) decreased $148.3 million due primarily to the $269.9
million estimated loss on realization of amounts due from WCG (see Note 4), the
impact of a $27.5 million gain in 2001 on the sale of Williams' limited partner
equity interest in Northern Border Partners, L.P., a $12.3 million write-down of
an investment in a pipeline project which was canceled and an $11.6 million net
impairment of Williams' equity interest in a Canadian and U.S. gas pipeline.
Partially offsetting these decreases was a $58.5 million gain on the sale of
Williams' equity interest in a Lithuanian oil refinery, pipeline and terminal
complex, which was included in the International segment, $57.9 million in
higher earnings on equity investments and the absence in 2002 of a $70.9 million
write-down of Williams' investment in WCG common stock and a 2001 $23.3 million
loss from other investments, which were determined to be other than temporary,
and an $8.7 million gain in 2002 on the sale of Williams' general partner
interest in Northern Border Partners, L.P.  In addition, interest income related
to margin deposits decreased $22 million, dividend income decreased $5 million
due to the second-quarter 2001 sale of Ferrellgas Partners L.P. senior common
units and interest income from foreign investments decreased, while losses on
foreign investments increased for a combined negative impact of $12 million.

   Other income - net increased $8.4 million due primarily to an $11 million
gain in second-quarter 2002 at Gas Pipeline associated with the disposition of
securities received through a mutual insurance company reorganization, a $10
million decrease in losses from the sales of receivables to special purpose
entities and the absence in 2002 of a 2001 $10 million payment to settle a claim
for coal royalty payments relating to a discontinued activity.  Partially
offsetting these increases was an $8 million loss related to early retirement of
remarketable notes in first-quarter 2002.

   The provision (benefit) for income taxes was favorable by $928.2 million due
primarily to a pre-tax loss as compared to pre-tax income in 2002.  The
effective income tax rate for the nine months ended September 30, 2002, is less
than the federal statutory rate due primarily to the effect of taxes on foreign
operations and the impairment of goodwill, which is not deductible for tax
purposes and reduces the tax benefit of the pre-tax loss, offset by the effect
of state income taxes. The effective income tax rate for the nine months ended
September 30, 2001, is greater than the federal statutory rate due primarily to
valuation allowances associated with the tax benefits for investment write-downs
for which ultimate realization is uncertain and the effect of state income
taxes.

   Income (loss) from discontinued operations increased $211.3 million ($354
million pre-tax) due primarily to the $304.6 million before tax gain on the sale
of Mid-America and Seminole Pipelines and the 2001 after-tax loss from the WCG
operations, partially offset by the $86.9 million impairment at Central natural
gas pipeline system and an additional impairment of $48.2 million related to the
soda ash operations (see Note 7).

   Income (loss) applicable to common stock in 2002 reflects the impact of the
$69.4 million associated with accounting for a preferred security that contains
a conversion option that was beneficial to the purchaser at the time the
security was issued.  The average number of shares in 2002 for the diluted
calculation (which is the same as the basic calculation due to Williams
reporting a loss from continuing operations - see Note 8) increased
approximately 23 million from September 30, 2001.  The increase is due primarily
to the 29.6 million shares issued in the Barrett acquisition in August 2001.
The increased shares had a dilutive effect on earnings per share in 2002 of
approximately $.06 per share.


RESULTS OF OPERATIONS-SEGMENTS

   Williams is currently organized into the following segments: Energy Marketing
& Trading, Gas Pipeline, Exploration & Production, Midstream Gas & Liquids,
Williams Energy Partners, Petroleum Services, and International. Williams
currently evaluates performance based upon segment profit (loss) from operations
(see Note 16). Segment profit of the operating companies may vary by quarter.
Energy Marketing & Trading's results can vary quarter to quarter based on the
timing of origination activities and market movements of commodity prices,
interest rates and counterparty creditworthiness impacting the determination of
fair value of contracts.

   In addition to the impact to the segments as a result of discontinued
operations previously discussed, the following changes occurred in 2002:

      o  Effective July 1, 2002, management of certain operations previously
         conducted by Energy Marketing & Trading, International and Petroleum
         Services was transferred to Midstream Gas & Liquids. These operations
         included natural gas liquids trading, activities in Venezuela and a
         petrochemical plant, respectively.

      o  On April 11, 2002, Williams Energy Partners L.P., a partially owned and
         consolidated entity of Williams, acquired Williams Pipe Line, an
         operation previously included within the Petroleum Services segment.
         Accordingly, Williams Pipe Line's results of operations have been
         transferred from the Petroleum Services segment to the Williams Energy
         Partners segment.

      o  Management of an investment in an Argentine oil and gas exploration
         company was transferred from the International segment to the
         Exploration & Production segment to align exploration and production
         activities.

   Prior period amounts have been restated to reflect these changes. The
following discussions relate to the results of operations of Williams' segments.



                                       36
<PAGE>

Management's Discussion & Analysis (Continued)

ENERGY MARKETING & TRADING

<Table>
<Caption>
                                      THREE                    NINE
                                  MONTHS ENDED             MONTHS ENDED
                                  SEPTEMBER 30,            SEPTEMBER 30,
                           ------------------------   ------------------------
                              2002          2001         2002          2001
                           ----------    ----------   ----------    ----------
                                  (MILLIONS)                 (MILLIONS)
<S>                        <C>           <C>          <C>           <C>

Segment revenues           $   (290.2)   $    493.1   $   (213.8)   $  1,429.0
                           ==========    ==========   ==========    ==========
Segment profit (loss)      $   (387.6)   $    356.9   $   (602.0)   $  1,108.6
                           ==========    ==========   ==========    ==========
</Table>

Three Months Ended September 30, 2002 vs. Three Months Ended September 30, 2001

   ENERGY MARKETING & TRADING'S revenues decreased $783.3 million, or 159
percent, due primarily to a $782.1 million decrease in risk management and
trading revenues. During third-quarter 2002, Energy Marketing & Trading's
results were adversely affected by the impact of market movements against its
portfolio and an absence of new origination activities. Energy Marketing &
Trading's ability to manage or hedge its portfolio against adverse market
movements was limited by a lack of market liquidity as well as market concerns
regarding Williams' credit and liquidity situation.

   The $782.1 million decrease from third-quarter 2001 in risk management and
trading revenues is due primarily to a decrease of $787.5 million in the natural
gas and power revenues and a $59.5 million decrease in the petroleum products
revenues, partially offset by a $63.6 million increase in revenues from the
emerging products portfolio. The $782.1 million decrease includes a $22.7
million decrease in revenues from new transactions originated as compared to
third-quarter 2001, resulting from Energy Marketing & Trading's inability to
enter into new origination transactions in the third quarter of 2002 as a result
of reduced market liquidity and Williams' limited credit capacity. Of the $787.5
million decline in natural gas and power revenues, $327.3 million is
attributable to a decline in natural gas revenues, caused primarily by
increasing prices on short natural gas positions. The remaining $460.2 million
decline relates to lower revenues from the power portfolio caused primarily by
significantly narrower spark spreads compared with third-quarter 2001 as well as
the net impact of portfolio valuation adjustments associated with portfolio
sales activities. The $59.5 million decrease in petroleum products revenues is
primarily due to lower volatility in the crude option and refined products
transportation portfolios. The $63.6 million increase in emerging products
revenues is primarily related to intercompany and external interest rate hedging
activities. Additionally, the natural gas, power and the petroleum products
portfolios were impacted by the general market deterioration and credit
degradation in the energy trading sector which had the effect of reducing
contract valuations as market liquidity declined and corporate bond spreads
deteriorated.

   As a result of Williams' current liquidity constraints and previously
announced strategies, Energy Marketing & Trading continued efforts in the third
quarter to sell all or portions of its portfolio. Energy Marketing & Trading
continues to evaluate its potential alternatives which includes potential sale
of all or part of the portfolio, joint venture or other business combination
opportunities. As a result of information obtained through the negotiation
activities with potential buyers, the estimated fair value of certain portions
of the portfolio was reduced by $74.8 million reflecting management's estimate
of fair value at September 30, 2002. For those portions of the portfolio for
which no viable market information was received through negotiation efforts,
fair value has been estimated using other market-based information and valuation
techniques consistent with existing methodologies. Given the condition of the
energy trading sector and liquidity constraints of Williams, however, amounts
ultimately realized in any future portfolio sales, joint ventures or business
combination opportunities may be significantly less than fair value estimates
presented in the financial statements.

   Selling, general, and administrative expenses decreased by $32 million, or 33
percent. This cost reduction is primarily due to lower variable compensation
levels associated with reduced segment profit and reduced staffing levels in the
energy marketing and trading operations.

   Segment profit decreased $744.5 million or 209 percent, due primarily to the
$782.1 million reduction of risk management and trading revenues and a $11.5
million third-quarter 2002 loss accrual (see Note 3), partially offset by
reduced selling, general and administrative expenses and the absence of a $23.3
million 2001 loss on write-downs of investments (see Note 5).

   Energy Marketing & Trading's future results will be affected by the reduction
in liquidity available from its parent, the willingness of counterparties to
enter into transactions with Energy Marketing & Trading, the liquidity of
markets in which Energy Marketing & Trading transacts, and the creditworthiness
of other counterparties in the industry. Since Williams is not currently rated
investment grade by credit rating agencies Williams is required, in certain
instances, to provide additional adequate assurances in the form of cash or
credit support to enter into price risk management transactions. With the
decision to continue to reduce Williams' financial commitment and

                                       37
<PAGE>

Management's Discussion & Analysis (Continued)

exposure to the trading business, it is likely that Energy Marketing & Trading
will have greater exposure to market movements, which could result in additional
operating losses. In addition, other companies in the energy trading and
marketing sector are experiencing financial difficulties which will affect
Energy Marketing & Trading's credit assessment related to the future value of
its forward positions. The effect of these items on Energy Marketing & Trading's
results could limit the ability of this segment to achieve profitable
operations.

      A third party, from which Williams has the right to receive fuel
conversion services, disclosed  in their third quarter 10-Q filed on November
12, 2002 that they were evaluating the future effect of certain subsidiaries
currently in default under outstanding project indebtedness.  It is not possible
at this time to determine whether this situation or future actions by the third
party will negatively affect our results or financial position.   Williams will
evaluate the implications, if any, of this situation and the future events that
occur during the fourth quarter.

      On October 25, 2002, the Emerging Issues Task Force concluded in Issue No.
02-3 to rescind Issue No. 98-10, under which non-derivative energy trading
contracts are currently marked-to-market. In addition, trading inventories will
also no longer be marked-to-market but will be reported on a lower of cost or
market basis. Upon adoption of this new standard, Energy Marketing & Trading
will record an adjustment for the cumulative effect of this change in accounting
principle. The impact of this change in accounting principle could be
significant. Energy Marketing & Trading is currently evaluating the potential
impact of the change but is unable at this time to provide an estimate.

Issues in the Western Marketplace

   At September 30, 2002, Energy Marketing & Trading had net accounts receivable
recorded of approximately $242 million for power sales to the California
Independent System Operator and the California Power Exchange Corporation
(CPEC). While the amount recorded reflects management's best estimate of
collectibility, future events or circumstances could change those estimates.

   As discussed in Rate and Regulatory Matters and Related Litigation in Note 12
of the Notes to Consolidated Financial Statements, the FERC and the DOJ have
issued orders or initiated actions which involve the activities of Energy
Marketing & Trading in California and the western states. In addition to these
federal agency actions, a number of federal and state initiatives addressing the
issues of the California electric power industry are also ongoing and may result
in restructuring of various markets in California and elsewhere. Discussions in
California and other states have ranged from threats of re-regulation to
suspension of plans to move forward with deregulation. Allegations have also
been made that the wholesale price increases experienced in 2000 and 2001
resulted from the exercise of market power and collusion of the power generators
and sellers, such as Williams. These allegations have resulted in multiple state
and federal investigations as well as the filing of class-action lawsuits in
which Williams is a named defendant. Williams' long-term power contract with the
State of California has also been challenged both at the FERC and in civil
suits. Most of these initiatives, investigations and proceedings are in their
preliminary stages and their likely outcome cannot be estimated. However,
Williams executed a settlement agreement on November 11, 2002, that is intended
to resolve many of these disputes with the State of California on a global basis
that includes a renegotiated long-term energy contract. The settlement is also
intended to resolve complaints brought by the California Attorney General
against Williams and the State of California's refund claims. In addition, the
settlement is intended to resolve ongoing investigations by the States of
California, Oregon, and Washington. The settlement is subject to various court
and agency approvals and due diligence by the California Attorney General (see
other legal matters in Note 12). There can be no assurance that these
initiatives, investigations and proceedings will not have a material adverse
effect on Williams' results of operations or financial condition.

Nine Months Ended September 30, 2002 vs. Nine Months Ended September 30, 2001

   ENERGY MARKETING & TRADING'S revenues decreased $1,642.8 million, or 115
percent, due primarily to a $1,642.6 million decrease in risk management and
trading revenues. As noted previously, Energy Marketing & Trading's results were
in general adversely affected by its limited ability to manage or hedge its
portfolio against adverse market movements due to a lack of market liquidity,
the market's concerns regarding Williams' credit and liquidity situation, and
internal efforts to preserve liquidity.

   The $1,642.6 million decrease in risk management and trading revenues is due
primarily to a decrease of $1,747.8 million in natural gas and power revenues,
partially offset by a $12.1 million increase in petroleum product revenues and
$85.3 million increase in emerging products revenues. The $1,646.5 million
decrease in revenues includes a $127.3 million decrease due to the absence of
any significant new transactions originating during the second and third
quarters of 2002. Declines in natural gas revenues are primarily due to rising
gas prices on short natural gas positions. Decreases in power revenues are
due primarily to lower market volatility and narrower spark spreads than were
present during 2001 and valuation adjustments resulting from 2002 third quarter
efforts to sell portions of Energy Marketing & Trading's portfolio. The $12.1
million increase in petroleum products revenues is due to $118.8 million
resulting from the origination of transactions during the first quarter of 2002
offset by a decrease in revenues resulting from lower volatility in the crude
option and refined products transportation portfolios. The $85.3 million
increase in revenues from the emerging products portfolio relates primarily to
intercompany and external interest rate hedging activities. Additionally, the
natural gas and power and the petroleum products portfolio were also impacted by
the general market deterioration and credit degradation in the energy trading
sector which had the effect of reducing contract valuations as market liquidity
declined and corporate bond spreads deteriorated.


                                       38
<PAGE>

Management's Discussion & Analysis (Continued)

   Selling, general, and administrative costs decreased by $74 million, or 29
percent. This cost reduction is primarily due to lower variable compensation
levels associated with reduced segment profit and reduced staffing levels in the
energy marketing and trading operations.

   Other (income) expense - net in 2002 includes $95.2 million of net loss
accruals and write-offs primarily associated with commitments for certain
terminated power projects (see Note 3). Of this amount, $61.5 million was
associated with a reduction to fair value of certain power equipment which
management made the decision to sell rather than utilize in power development
projects. The balance for the second quarter primarily represents an accrual for
costs associated with leased power generation equipment. Also included in other
(income) expense in 2002 is a $57.5 million partial goodwill impairment recorded
during second- quarter resulting from deteriorating market conditions. The
remaining goodwill was evaluated for impairment in third-quarter 2002 and no
additional impairment was required based on management's estimate of the fair
value of Energy Marketing & Trading at September 30, 2002.

   Segment profit decreased $1,710.6 million, or 154 percent, due primarily to
the $1,646.5 million reduction in risk management and trading revenues and the
non-recurring items discussed in other income (expense) above, partially offset
by the decrease in selling, general, and administrative expense.

GAS PIPELINE

<Table>
<Caption>
                               THREE                        NINE
                           MONTHS ENDED                 MONTHS ENDED
                           SEPTEMBER 30,                SEPTEMBER 30,
                   ---------------------------   ---------------------------
                       2002           2001           2002           2001
                   ------------   ------------   ------------   ------------
                            (MILLIONS)                   (MILLIONS)
<S>                <C>            <C>            <C>            <C>

Segment revenues   $      381.4   $      335.1   $    1,106.4   $    1,048.5
                   ============   ============   ============   ============
Segment profit     $      172.6   $      101.8   $      506.0   $      436.0
                   ============   ============   ============   ============
</Table>

Three Months Ended September 30, 2002 vs. Three Months Ended September 30, 2001

   GAS PIPELINE'S revenues increased $46.3 million, or 14 percent, due primarily
to the effect of $36.5 million in reductions in the rate refund liabilities and
other adjustments associated with rate case settlements on the Transcontinental
Gas Pipe Line (Transco) and Texas Gas systems, $16 million higher demand
revenues on the Transco system resulting from new expansion projects and new
rate case settlement rates effective September 1, 2001, and $6 million higher
transportation revenues on the Texas Gas system resulting from the new rate case
settlement rates. Partially offsetting these increases was $19 million in lower
gas exchange imbalance settlements (offset in costs and operating expenses).

   Costs and operating expenses decreased $27.9 million, or 15 percent, due
primarily to $19 million lower gas exchange imbalance settlements (offset in
revenues), $7.6 million lower depreciation expense due to adjustments related to
lower depreciation rates approved in the rate case settlements and $3 million
lower operations and maintenance expense primarily due to lower professional and
other contractual services.

   General and administrative costs reflect $13 million lower charitable
contributions due to significantly reduced levels of company commitments to the
2002 United Way campaign from record levels in 2001. This decline was partially
offset by $10 million higher expense primarily associated with employee-related
benefits in third-quarter 2002 including approximately $4 million related to
expense recognized as a result of accelerated company contributions to an
employee stock ownership plan resulting from the early retirement of related
third party debt.

   Other income (expense) - net in 2002 includes a $3.7 million loss from the
sale of the Cove Point facility. The sale closed in September 2002 for proceeds
of $217 million.

   Segment profit, which includes equity earnings and income (loss) from
investments, increased $70.8 million, or 70 percent, due primarily to the $44.1
million effect of rate refund liability reductions and other adjustments related
to the final settlement of Transco and Texas Gas rate cases during third-quarter
2002, the higher revenues and lower overall expenses discussed above, and an
$8.7 million gain on the sale of the general partnership interest in Northern
Border Partners, L.P. which was sold for $12 million. Partially offsetting these
increases to segment profit were the $3.7 million loss on the sale of the Cove
Point facility and an $11.6 million net impairment charge on Gas Pipeline's 14.6
percent ownership interest in Alliance Pipeline which was sold in October 2002
for approximately $173 million.


                                       39
<PAGE>

Management's Discussion & Analysis (Continued)

Nine Months Ended September 30, 2002 vs. Nine Months Ended September 30, 2001

   GAS PIPELINE'S revenues increased $57.9 million, or 6 percent, due primarily
to the $36.5 million effect of reductions in the rate refund liabilities and
other adjustments associated with rate case settlements on the Transco and Texas
Gas systems ($17.4 million is applicable to the first six months of 2002), $35
million higher demand revenues on the Transco system resulting from new
expansion projects and new settlement rates effective September 1, 2001, and $9
million from environmental mitigation credit sales and services. Partially
offsetting these increases were $19 million lower gas exchange imbalance
settlements (offset in costs and operating expenses), $9 million lower revenues
associated with the recovery of tracked costs which are passed through to
customers (offset in costs and operating expenses and general and administrative
expenses) and $7 million lower storage revenues primarily due to lower rates on
Cove Point's short-term storage contracts.

   Costs and operating expenses decreased $12.8 million, or 3 percent, due
primarily to $19 million lower gas exchange imbalance settlements (offset in
revenues), $7 million lower other tracked costs which are passed through to
customers (offset in revenues) and $5 million lower operations and maintenance
expense due primarily to lower professional and other contractual services and
telecommunications expenses. These decreases were partially offset by the $15
million effect in 2001 of a regulatory reserve reversal resulting from the
FERC's approval for recovery of fuel costs incurred in prior periods by Transco,
as well as $5 million higher depreciation expense. The $5 million higher
depreciation expense reflects a $12 million increase due to increased property,
plant and equipment placed into service (including depletion of property held
for the environmental mitigation credit sales), partially offset by a $7.6
million adjustment related to the 2002 rate case settlements resulting in lower
depreciation rates applied retrospectively ($3.1 million is applicable to the
first six months of 2002).

   General and administrative costs increased $13.1 million, or 8 percent, due
primarily to $11 million in costs associated with an early retirement option
offered during the first half of 2002 and $15 million higher expenses primarily
related to employee-related benefits expense, including approximately $4 million
related to expense recognized as a result of accelerated company contributions
to an employee stock ownership plan resulting from the early retirement of
related third party debt. These increases were partially offset by $13 million
lower charitable contributions in 2002 and $3 million lower tracked costs
(offset in revenues).

   Other income (expense) - net in 2002 includes a $3.7 million loss on the sale
of the Cove Point facility.

   Segment profit, which includes equity earnings and income (loss) from
investments (both included in investing income), increased $70 million, or 16
percent, due primarily to $52.7 million higher equity earnings, the $44.1
million effect of rate refund liability reductions and other adjustments related
to the final settlement of rate cases during third-quarter 2002, the higher
demand revenues discussed above, lower costs and operating expenses also
discussed above, and an $8.7 million gain in 2002 on the sale of the general
partnership interest in Northern Border Partners, L.P. These increases were
partially offset by an $11.6 million impairment charge in 2002 on Gas Pipeline's
14.6 percent ownership interest in Alliance Pipeline, a $12.3 million write-down
in 2002 of Gas Pipeline's investment in a pipeline project that has been
cancelled and the impact of a $27.5 million gain in 2001 from the sale of the
limited partnership interest in Northern Border Partners, L.P, the $13.1 million
increase in general and administrative costs discussed above and the $3.7
million loss on the sale of the Cove Point facility. The increase in equity
earnings includes a $27.4 million benefit in 2002 related to the contractual
construction completion fee received by an equity affiliate. This equity
affiliate served as the general contractor on the Gulfstream pipeline project
for Gulfstream Natural Gas System (Gulfstream), an interstate natural gas
pipeline subject to FERC regulation and also an equity affiliate. The fee, paid
by Gulfstream and associated with the completion during the second quarter of
2002 of the construction of Gulfstream's pipeline, was capitalized by Gulfstream
as property, plant and equipment and is included in Gulfstream's rate base to be
recovered in future revenues. Additionally, the equity earnings increase
reflects a $25 million increase from Gulfstream primarily related to interest
capitalized on the Gulfstream pipeline project in accordance with FERC
regulations.


                                       40
<PAGE>

Management's Discussion & Analysis (Continued)

EXPLORATION & PRODUCTION

<Table>
<Caption>
                               THREE                     NINE
                           MONTHS ENDED              MONTHS ENDED
                           SEPTEMBER 30,             SEPTEMBER 30,
                     -----------------------   -----------------------
                        2002         2001         2002         2001
                     ----------   ----------   ----------   ----------
                           (MILLIONS)                (MILLIONS)
<S>                  <C>          <C>          <C>          <C>
Segment revenues     $    219.3   $    160.6   $    677.8   $    410.2
                     ==========   ==========   ==========   ==========
Segment profit       $    231.8   $     65.0   $    433.5   $    165.4
                     ==========   ==========   ==========   ==========
</Table>

Three Months Ended September 30, 2002 vs. Three Months Ended September 30, 2001

   EXPLORATION & PRODUCTION'S revenues increased $58.7 million, or 37 percent,
due primarily to $67 million higher production revenues and $7 million in
unrealized gains from the mark-to-market financial instruments related to basis
differentials on natural gas production, partially offset by $16 million lower
gas management, international and other miscellaneous revenues. The $67 million
increase in production revenues includes $37 million associated with an increase
in net production volumes as well as $30 million from increased net realized
average prices for production (including the effect of hedge positions). The
increase in net production volumes mainly results from the acquisition at the
beginning of August 2001 of Barrett Resources Corporation (Barrett).
Approximately 78 percent of domestic production in the third quarter of 2002 was
hedged. Exploration & Production has contracts that hedge approximately 87
percent of estimated production for the remainder of the year. These hedges are
entered into with Energy Marketing & Trading which in turn, enters into
offsetting derivative contracts with unrelated third parties. Energy Marketing &
Trading bears the counterparty performance risks associated with unrelated third
parties. During 2001, a portion of the external derivative contracts was with
Enron, which filed for bankruptcy in December 2001. As a result, the contracts
were effectively liquidated due to contractual terms concerning bankruptcy and
Energy Marketing & Trading recorded estimated charges for the credit exposure.
During the third quarter of 2002, Energy Marketing & Trading had additional
contracts not related to Enron that were terminated. Under accounting guidance,
the other comprehensive income related to a terminated contract remains in
accumulated other comprehensive income and is recognized as the underlying
volumes are produced. During the third quarter of 2002, approximately $10
million related to the terminated contracts was recognized as revenues while $52
million remains in accumulated other comprehensive income at September 30, 2002.

   Costs and operating expenses, including selling, general and administrative
expenses, increased $26 million, due primarily to increased depletion,
depreciation and amortization and lease operating expenses as a result of the
addition of the former Barrett operations.

   Included in other (income) expense-net are $143.9 million in net gains from
the sales of natural gas production properties. As previously reported,
Exploration & Production completed during the third quarter of 2002, the sales
of natural gas production properties in the Jonah field (Wyoming) and in the
Anadarko Basin. The sales resulted in gains of approximately $122.3 million and
$21.6 million, respectively, and generated approximately $326 million in net
cash proceeds. The Jonah field properties represented approximately 11 percent
of total reserves at December 31, 2001, the absence of which could impact future
revenue levels.

   Segment profit increased $166.8 million due primarily to the gains from asset
sales mentioned above, increased production volumes and higher net realized
average prices.

Nine Months Ended September 30, 2002 vs. Nine Months Ended September 30, 2001

   EXPLORATION & PRODUCTION'S revenues increased $267.6 million, or 65 percent,
due primarily to $277 million higher production revenues, $14 million in
unrealized gains from the mark-to-market financial instruments related to basis
differentials on natural gas production, partially offset by $23 million lower
gas management revenues. The $277 million increase in production revenues
includes $276 million associated with an increase in net production volumes. The
increase in net production volumes results mainly from the acquisition in third
quarter 2001 of the former Barrett operations. Approximately 81 percent of
domestic production through the third quarter of 2002 was hedged. Through the
third quarter of 2002, approximately $28 million related to the terminated
contracts discussed above was recognized as revenues. At September 30, 2002, the
contracted future hedge contracts are at prices that averaged above the spot
market, resulting in an unrealized gain of $130 million (including $52 million
related to the terminated contracts as discussed previously) reflected in
accumulated other comprehensive income within stockholders' equity. This is a
decrease from the unrealized gain at December 31, 2001, due to an increase in
natural gas prices.

   Gas management revenues consist primarily of marketing activities within the
Exploration & Production segment


                                       41
<PAGE>

Management's Discussion & Analysis (Continued)

that are not a direct part of the results of operations for producing
activities. These marketing activities include acquisition and disposition of
other working interest and royalty interest gas and the movement of gas from the
wellhead to the tailgate of the respective plants for sale to Energy Marketing &
Trading or third parties.

   Costs and operating expenses, including selling, general and administrative
expenses, increased $129 million due primarily to $127 million increase in
depletion, depreciation and amortization and lease operating expenses resulting
from the addition of the former Barrett operations, $23 million higher selling
general and administrative expenses and $9 million higher production related
taxes, partially offset by $23 million lower gas management costs, and $10
million lower costs from International activities.

   Included in other (income) expense-net are $147.4 million in net gains from
the sales of natural gas production properties during 2002.

   Segment profit increased $268.1 million due primarily to the gains from asset
sales and increased production volumes, partially offset by a $5 million
decrease in earnings from equity investments and $8.5 million of equity earnings
in 2001 related to the 50 percent investment in Barrett held by Williams for the
period from June 11, 2001 through August 1, 2001.

MIDSTREAM GAS & LIQUIDS

<Table>
<Caption>
                               THREE                    NINE
                           MONTHS ENDED             MONTHS ENDED
                           SEPTEMBER 30,            SEPTEMBER 30,
                     -----------------------   -----------------------
                        2002         2001         2002         2001
                     ----------   ----------   ----------   ----------
                            (MILLIONS)                (MILLIONS)
<S>                  <C>          <C>          <C>          <C>
Segment revenues     $    501.8   $    414.9   $  1,339.8   $  1,506.8
                     ==========   ==========   ==========   ==========
Segment profit       $    104.0   $     69.5   $    210.0   $    126.4
                     ==========   ==========   ==========   ==========
</Table>

Three Months Ended September 30, 2002 vs. Three Months Ended September 30, 2001

   MIDSTREAM GAS & LIQUIDS' revenues increased $86.9 million, or 21 percent, due
primarily to a $47 million increase from domestic operations, a $42 million
increase from Canadian operations and $10 million higher revenues from
Venezuelan activities due primarily to a gas compression facility which began
operations in August 2001. The increase in domestic operations reflects $23
million higher natural gas liquids sales from domestic processing activities,
$21 million of revenues from Gulf Liquids, a domestic processing and
fractionation company which became a consolidated entity in 2002 and $4 million
higher domestic processing revenues. The $23 million higher liquids sales from
domestic processing activities reflects $25 million from a 24 percent increase
in volumes sold, partially offset by $2 million from lower average natural gas
liquids sales prices. The increase in the domestic liquids volumes sold is due
primarily to expansion of an existing natural gas liquids plant and the impact
of another natural gas liquids plant placed in service in fourth-quarter 2001.
The increase in the Canadian operations includes $34 million higher natural gas
liquids sales from Canadian fractionation activities due primarily to higher
propane sales from an extraction facility which began operations in 2002 and
higher product sales as a result of improvements made at a parafins facility and
$7 million higher liquids sales from Canadian activities reflecting $15 million
from a 29 percent increase in average natural gas liquids sales prices,
partially offset by $8 million from a 14 percent decrease in volumes sold.

   Costs and operating expenses increased $50 million, or 16 percent, due
primarily to $21 million higher natural gas liquids purchases related to
Canadian fractionation activities, $16 million higher depreciation expense for
both foreign and domestic operations due primarily to additional property, plant
and equipment placed into service, $15 million related to the domestic
fractionation activities of Gulf Liquids, $10 million higher transportation,
fractionation and marketing costs related to natural gas liquids sales from
processing activities ($6 million related to Canadian activities and $4 million
related to domestic activities) and $6 million higher operations and maintenance
expense due primarily to the inclusion of the Gulf Liquids operating and
maintenance expenses of $10 million combined with $5 million higher expenses
related to the Venezuelan gas compression facility, largely offset by a $12
million decrease resulting from operational efficiencies.

   Selling, general and administrative costs increased $9 million due primarily
to the consolidation of the Gulf Liquids operations.

   Included in 2001 other (income) expense - net are impairment charges of $4.2
million related to certain South Texas non-regulated gathering and processing
assets.


                                       42
<PAGE>

Management's Discussion & Analysis (Continued)

   Segment profit increased $34.5 million, or 50 percent, due primarily to a
$27.5 million increase from domestic operations and a $7 million increase from
Canadian operations. The domestic operations, which represent 65 percent of 2002
segment profit, increased due to higher natural gas liquids margins of $8
million primarily resulting from favorable shrink prices at the Wyoming plants,
$7 million lower other operating costs due primarily to reduced condensate
costs, $6 million favorable products margin from Gulf Liquids, $5 million lower
operating taxes, $4 million higher domestic processing margins and $3 million in
equity earnings in 2002 versus $3 million of equity losses in 2001 reflecting
improved results from the Discovery pipeline project. These favorable variances
of the domestic operations were partially offset by $12 million higher selling,
general and administrative costs and $5 million higher depreciation expense due
primarily to the inclusion of Gulf Liquids. The Canadian operations were higher
due to improved liquids margins from processing ($8 million) and fractionation
($13 million) due to favorable inventory positions, partially offset by $8
million higher depreciation expense and $5 million higher liquids transportation
expense.

   Williams is currently evaluating the sale of its Canadian processing,
fractionation and olefins businesses. The Canadian business contributed $459
million, or 34 percent, to revenues and $24 million, or 12 percent, to segment
profit for the nine months ended September 30, 2002.

   Midstream Gas & Liquid's deepwater natural gas and crude infrastructure
expansion projects in the Gulf of Mexico are expected to increase both revenues
and operating profit in the future. The first major deepwater project, East
Breaks, went into service in late 2001.

Nine Months Ended September 30, 2002 vs. Nine Months Ended September 30, 2001

   MIDSTREAM GAS & LIQUIDS' revenues decreased $167 million, or 11 percent, due
primarily to $88 million lower revenues related to natural gas liquids trading,
$83 million lower natural gas liquids sales from Canadian processing activities
due primarily to a 30 percent decrease in average natural gas liquids sales
prices, $31 million higher intrasegment sales, which are eliminated and
primarily relate to sales from trading operations, $30 million lower revenues
from Canadian processing activities due primarily to lower processing rates
which are based on the recovery of certain costs which were lower in 2002 and
$16 million lower domestic gathering revenues due primarily to decreased
volumes. These decreases were partially offset by $49 million higher revenues
from Venezuelan activities primarily due to a gas compression facility which
began operations in August 2001, as well as $21 million higher sales from Gulf
Liquids, a domestic processing and fractionation facility which became a
consolidated entity during 2002, and $6 million higher domestic revenues from
transportation activities.

   Costs and operating expenses decreased $243 million, or 19 percent. Costs
were down due primarily to $169 million lower shrink, fuel and replacement gas
purchases relating to processing activities ($127 million related to Canada and
$42 million related to domestic activities), $69 million lower costs relating to
natural gas liquids trading, $31 million lower external costs due to increased
intrasegment purchases discussed above, which are eliminated, $17 million lower
natural gas liquids purchases related to Canadian fractionation activities and a
$7 million decrease in domestic power expense. Partially offsetting these
decreases were $21 million increased depreciation expense for both foreign and
domestic operations due primarily to additional property, plant and equipment
placed into service, $15 million in higher costs related to the domestic
fractionation activities from Gulf Liquids and $13 million higher domestic
transportation, fractionation and marketing costs related to natural gas liquids
sales from processing activities.

   Selling, general and administrative costs increased $17 million due primarily
to the addition of the Gulf Liquids assets.

   Included in other (income) expense - net within segment costs and expenses
for 2001 is $15.1 million of impairment charges related to certain South Texas
non-regulated gathering and processing assets. Included in 2002 other (income)
expense - net, is a $5.9 million charge representing the impairment of assets to
fair value associated with the third-quarter 2002 sale of the Kansas-Hugoton
natural gas gathering system.

   Segment profit increased $83.6 million, or 66 percent, due primarily to a $62
million increase from domestic operations, a $21 million increase from Canadian
operations and an $18 million increase from Venezuelan activities, partially
offset by an $18 million decrease from natural gas liquids trading activities.
The domestic operations, which represent 67 percent of 2002 segment profit,
increased due to higher natural gas liquids margins of $29 million primarily
resulting from favorable shrink prices at the Wyoming plants, $14 million lower
other operating costs due primarily to reduced condensate costs, the $9 million
favorable variance in other (income) expense - net discussed above, decreased
power costs due to lower gas prices of $8 million, $6 million increased
transportation revenues due primarily to the start up of the deepwater oil and
natural gas gathering system in late 2001 and equity earnings in 2002 of $9
million versus $14 million of equity losses in 2001. The equity earnings
improvement is due primarily to the Discovery pipeline project. Partially
offsetting these favorable variances are the $17 million higher selling, general
and administrative costs discussed above and lower gathering revenues of $16
million due primarily to lower volumes. Canadian segment profit was higher due
to $22 million improved liquids margins from processing as a result of higher
average natural gas liquids prices and $23 million higher fractionation margins
due to favorable inventory positions and higher volumes, partially offset by $15
million higher liquids transportation expense and $6 million higher depreciation
expense.


                                       43
<PAGE>
Management's Discussion & Analysis (Continued)

WILLIAMS ENERGY PARTNERS

<Table>
<Caption>
                               THREE                     NINE
                           MONTHS ENDED              MONTHS ENDED
                           SEPTEMBER 30,             SEPTEMBER 30,
                     -----------------------   -----------------------
                        2002         2001         2002         2001
                     ----------   ----------   ----------   ----------
                           (MILLIONS)                 (MILLIONS)
<S>                  <C>          <C>          <C>          <C>
Segment revenues     $    107.5   $    110.8   $    303.6   $    310.7
                     ==========   ==========   ==========   ==========
Segment profit       $     13.4   $     27.1   $     69.8   $     83.6
                     ==========   ==========   ==========   ==========
</Table>

Three Months Ended September 30, 2002 vs. Three Months Ended September 30, 2001

   WILLIAMS ENERGY PARTNERS' segment profit decreased $13.7 million, or 51
percent, due primarily to $9 million higher environmental expense primarily
related to the petroleum products pipeline as a result of internal environmental
studies completed during third-quarter 2002.

Nine Months Ended September 30, 2002 vs. Nine Months Ended September 30, 2001

   WILLIAMS ENERGY PARTNERS' revenue decreased $7.1 million, or 2 percent due
primarily to $12 million lower commodity sales from transportation activities
and reduced ammonia volumes, partially offset by higher revenue from a marine
facility acquired in October 2001 and two inland terminals acquired in
June 2001.

   Costs and operating expenses were relatively unchanged with the effect of
$12 million lower commodity purchases offset by $7 million higher environmental
expense and higher operating expenses. The increased operating expenses include
third-party pipeline lease expenses and additional operating costs from the
newly acquired marine and inland terminals.

   Segment profit decreased $13.8 million or 17 percent due to the decrease
in revenue discussed above, and higher selling, general and administrative
expenses.

PETROLEUM SERVICES

<Table>
<Caption>
                                   THREE                      NINE
                               MONTHS ENDED               MONTHS ENDED
                               SEPTEMBER 30,              SEPTEMBER 30,
                         ------------------------   ------------------------
                            2002          2001         2002          2001
                         ----------    ----------   ----------    ----------
                                (MILLIONS)                 (MILLIONS)
<S>                      <C>           <C>          <C>           <C>
Segment revenues         $  1,170.9    $  1,281.9   $  3,266.7    $  4,077.6
                         ==========    ==========   ==========    ==========
Segment profit (loss)    $   (406.2)   $     42.4   $   (396.5)   $    189.5
                         ==========    ==========   ==========    ==========
</Table>

Three Months Ended September 30, 2002 vs. Three Months Ended September 30, 2001

     PETROLEUM SERVICES' revenues decreased $111 million, or 9 percent, due
primarily to $100 million lower refining and marketing revenues and $16 million
lower revenues from the travel centers and Alaska convenience stores, partially
offset by $6 million higher bio-energy sales. The $100 million decrease in
refining and marketing revenues includes $93 million resulting from 10 percent
lower refined product volumes sold and $7 million from a decrease in average
refined product sales prices. Volumes at the Midsouth refinery declined due to
lower crude throughput resulting from the restrictions on obtaining crude
supplies due to Williams' credit situation and management's decision to fulfill
only firm commitments for diesel fuel as a result of narrowing crack spreads.
Volumes at Alaska increased over the prior year's third-quarter. The $16 million
decrease in revenues of the travel centers and Alaska convenience stores
primarily reflects $19 million from an 11 percent decrease in diesel sales
volumes and $9 million from a 4 percent decrease in average diesel and gasoline
sales prices and $3 million from a decrease in merchandise sales, partially
offset by a $16 million increase in gasoline sales volumes. The decrease in
travel center diesel sales volumes includes the impact of renegotiated fleet
programs. Travel center gasoline volumes in third-quarter 2001 were lower than
normal reflecting the environment after September 11, 2001. The $6 million
increase in bio-energy sales primarily reflects a $27 million increase from
higher ethanol sales volumes resulting from new marketing agreements, partially
offset by a $23 million decrease from lower average ethanol sales prices.

     Costs and operating expenses decreased $92 million, or 8 percent, due
primarily to $91 million lower refining


                                       44
<PAGE>

Management's Discussion & Analysis (Continued)

and marketing costs and $12 million lower costs for the travel centers and
Alaska convenience stores, partially offset by $13 million higher bio-energy
costs. The $91 million decrease in refining and marketing costs includes a $75
million decrease from lower crude supply costs and other cost of sales from the
refineries related to lower overall volumes and a $16 million decrease in the
total cost of refined product purchased for resale, also resulting from lower
volumes. The $12 million decrease in costs for the travel centers and the Alaska
convenience stores reflects $18 million from lower diesel sales volumes, $5
million from lower average gasoline and diesel purchase prices and $3 million
lower store operating and merchandise costs, partially offset by a $14 million
increase in gasoline purchase volumes.

     Other (income) expense - net in third-quarter 2002 includes a $176.2
million impairment charge related to Williams Midsouth refinery, a $112.1
million impairment charge related to the travel centers and a $144.3 million
impairment charge related to bio-energy operations (see Note 3).

     Segment profit decreased $448.6 million to a $406.2 million segment loss
due primarily to the $432.6 million in impairment charges discussed above in
other (income) expense - net, $9 million lower operating profit from refining
and marketing operations due primarily to narrowing crack spreads and
curtailment of business due to credit capacity limitations, and $7 million lower
operating profit from bio-energy operations due primarily to higher product and
feedstock costs.

     Williams has been in discussions regarding the sale of its refining and
marketing operations, and its Alaska convenience stores. In October 2002,
Williams' board of directors approved the sale of the travel centers with the
closing of the sale anticipated in late fourth-quarter 2002 or early first
quarter 2003. In addition, the bio-energy operation is also a business that may
be sold in the future and has been the subject of a reserve auction process.
Depending of the terms of prospective sales and timing of liquidity needs,
Williams may accept amounts that are less than the respective business' carrying
value at September 30, 2002.

Nine Months Ended September 30, 2002 vs. Nine Months Ended September 30, 2001

     PETROLEUM SERVICES' revenues decreased $810.9 million, or 20 percent, due
primarily to $544 million lower refining and marketing revenues, $352 million
lower travel center/convenience store sales and $16 million lower bio-energy
sales, partially offset by $107 million lower intrasegment sales, which are
eliminated and primarily relate to sales from refining and marketing to travel
center/convenience stores. The $544 million decrease in refining and marketing
revenues primarily includes $413 million resulting from 15 percent lower average
refined product sales prices and $131 million from a decrease in refined product
volumes sold. The decrease in volumes is due primarily to the curtailment of
business in second and third-quarter 2002 due to limitations of Williams' credit
support capacity. The $352 million decrease in travel center/convenience store
costs reflects a $169 million decrease in revenues related to travel centers and
Alaska convenience stores and the absence of $183 million in revenues related to
the 198 convenience stores sold in May 2001. The $169 million decrease in
revenues of the travel centers and Alaska convenience stores primarily reflects
$113 million from a 19 percent decrease in diesel sales volumes and $73 million
from an 11 percent decrease in average diesel and gasoline sales prices and $6
million from a decrease in merchandise sales, partially offset by a $24 million
increase in gasoline sales volumes. The $16 million decrease in bio-energy sales
primarily reflects $68 million lower average ethanol sales prices, partially
offset by $47 million higher ethanol sales volumes resulting from new marketing
agreements.

     Costs and operating expenses decreased $737 million, or 19 percent, due
primarily to $489 million lower refining and marketing costs and $354 million
lower travel center/convenience store costs, partially offset by a $107 million
increase in external costs due to decreased intrasegment purchases discussed
above, which are eliminated. The $489 million decrease in refining and marketing
costs includes a $425 million decrease from lower crude supply costs and other
cost of sales from the refineries related to lower overall volumes and a $64
million decrease in the total cost of refined product purchased for resale. The
$354 million decrease in travel center and Alaska convenience store costs
primarily reflects the absence of $183 million in costs related to the 198
convenience stores sold in May 2001 and a $171 million decrease in costs for the
travel centers and Alaska convenience stores. The $171 million decrease in costs
for the travel centers and Alaska convenience stores reflects $108 million from
decreased diesel sales volumes, $70 million from lower average gasoline and
diesel purchase prices and $14 million lower store operating and merchandise
costs, partially offset by $22 million in increased gasoline purchase volumes.

     Other (income) expense - net in 2002 includes a $176.2 million impairment
charge related to Williams Midsouth refinery, $139.1 million in loss accruals
and impairment charges related to the travel centers and a $144.3 million
impairment charge related to bio-energy operations (see Note 3). Other (income)
expense - net in 2001 includes a $72.1 million pre-tax gain from the sale of
convenience stores sold in May 2001 and an $11.2 million impairment charge
related to an end-to-end mobile computing systems business.

     Segment profit decreased $586 million to a $396.5 million segment loss
due primarily to the $520.5 million net unfavorable effect related to the
impairment charges and other items noted above in other (income) expense - net,
the $55 million lower operating profit from refining and marketing operations
due primarily to narrowing crack spreads and curtailment of business due to
credit issues and $20 million lower operating profit from bio-energy operations
due primarily to higher product and feedstock costs.


                                       45
<PAGE>

Management's Discussion & Analysis (Continued)

INTERNATIONAL

<Table>
<Caption>
                                    THREE                       NINE
                                MONTHS ENDED               MONTHS ENDED
                                SEPTEMBER 30,              SEPTEMBER 30,
                          -----------------------    -----------------------
                             2002         2001          2002         2001
                          ----------   ----------    ----------   ----------
                                (MILLIONS)                 (MILLIONS)
<S>                       <C>          <C>           <C>          <C>
Segment revenues          $       .7   $      1.1    $      3.1   $      2.6
                          ==========   ==========    ==========   ==========
Segment profit (loss)     $     53.1   $    (10.9)   $     34.8   $    (22.9)
                          ==========   ==========    ==========   ==========
</Table>

Three Months Ended September 30, 2002 vs. Three Months Ended September 30, 2001

INTERNATIONAL'S segment profit increased $64 million, due primarily to a $58.5
million gain from the September 2002 sale of Williams' 27 percent ownership
interest in the Lithuanian refinery, pipeline and terminal complex and a $6
million decrease in equity losses from the Lithuanian operations for the period.
Williams received approximately $85 million from the sale of this investment. In
addition, Williams sold its $75 million note receivable from the Lithuanian
operations at face value. As a result of the sale of its interest in the
Lithuanian operations and the anticipated sale of the soda ash operations
(previously reported as continuing operations within International), it is
anticipated that the International segment will be included in the Other segment
category in future reporting periods.

   Results of the soda ash operations previously included in the International
segment have been reclassified to discontinued operations (see Note 7) following
the board of director's authorization in third-quarter 2002 to sell this
business.

Nine Months Ended September 30, 2002 vs. Nine Months Ended September 30, 2001

INTERNATIONAL'S segment profit increased $57.7 million, due primarily to a $58.5
million gain on the sale of Williams' remaining 27 percent ownership interest in
the Lithuanian refinery.


                                       46
<PAGE>

Management's Discussion & Analysis (Continued)

FAIR VALUE OF ENERGY RISK MANAGEMENT AND TRADING ACTIVITIES

   The fair value of energy risk management and trading contracts for Energy
Marketing & Trading and the natural gas liquids trading operations (reported in
the Midstream Gas & Liquids segment) decreased $509 million during third-quarter
2002 and $593 million year-to-date. The following table reflects the changes in
fair value between December 31, 2001 and September 30, 2002.

<Table>
<Caption>
                                                                               (Millions)
                                                                               ----------
<S>                                                                            <C>

FAIR VALUE OF CONTRACTS OUTSTANDING AT DECEMBER 31, 2001
                                                                               $    2,261
         Recognized losses included in the fair value of contracts
                 outstanding at December 31, 2001
                 expected to be realized during the period                            173
         Initial recorded value of new contracts entered into during
                 the period                                                           181
         Net options premiums received during the period(1)                          (271)
         Changes attributable to market movements of contracts outstanding
                 at March 31, 2002                                                    176
                                                                               ----------
FAIR VALUE OF CONTRACTS OUTSTANDING AT MARCH 31, 2002                          $    2,520
         Recognized Gains included in the fair value of contracts
                 outstanding at March 31, 2002
                 expected to be realized during the period                           (243)
         Initial recorded value of new contracts entered into during
                 the period                                                            22
         Net options premiums paid during the period(1)                                23
         Changes attributable to market movements of contracts outstanding
                 at June 30, 2002                                                    (145)
                                                                               ----------
FAIR VALUE OF CONTRACTS OUTSTANDING AT JUNE 30, 2002                           $    2,177
         Recognized Gains included in the fair value of contracts
                 outstanding at June 30, 2002
                 expected to be realized during the period                           (169)
         Initial recorded value of new contracts entered into during
                 the period                                                             1
         Changes in fair value attributable to changes in valuation
                 Techniques                                                           (20)
         Net option premiums received during the period(1)                           (173)
         Change attributable to market movements of contracts
                 Outstanding at September 30, 2002                                   (148)
                                                                               ----------
FAIR VALUE OF CONTRACTS OUTSTANDING AT SEPTEMBER 30, 2002                      $    1,668
</Table>

(1)  Option premiums paid and received are included in the fair value of
     contracts outstanding during any given period as they are a portion of the
     overall energy trading portfolio. Option premiums paid result in an initial
     increase in the fair value of contracts outstanding and a decrease in cash;
     premiums received result in an initial decrease in the fair value of
     contracts outstanding and an increase in cash. The underlying value of the
     options associated with the premium payments are also included in the fair
     value of contracts outstanding.


                                       47
<PAGE>

Management's Discussion & Analysis (Continued)

                                       48
<PAGE>

Management's Discussion & Analysis (Continued)

   The charts below reflect the fair value of energy risk management and trading
contracts for Energy Marketing & Trading and the Natural Gas Liquids trading
operations (reported in the Midstream Gas & Liquids segment) by valuation
methodology and the year in which the recorded fair value is expected to be
realized. It should be noted that EITF Issue No. 02-03, which must be adopted no
later than periods beginning after December 15, 2002, may have a significant
impact on fair values as reported below.


<Table>
<Caption>
                                             TO BE           TO BE           TO BE          TO BE          TO BE
                                          REALIZED IN     REALIZED IN     REALIZED IN     REALIZED IN    REALIZED IN
                                          1-12 MONTHS   IN 13-36 MONTHS   MONTHS 37-60   MONTHS 61-120   121+ MONTHS     TOTAL FAIR
VALUATION TECHNIQUE                         (YEAR 1)      (YEARS 2-3)     (YEARS 4-5)    (YEARS 6-10)    (YEARS 11+)       VALUE
- -------------------                       -----------   ---------------   ------------   -------------   -----------     ----------
<S>                          <C>          <C>           <C>               <C>            <C>             <C>            <C>

BASED UPON QUOTED            12/31/2001   $      757      $      316      $      345      $      363     $       18     $    1,799
PRICES IN ACTIVE
MARKETS AND QUOTED           3/31/2002    $      875      $      337      $      379      $      435     $       (5)    $    2,021
PRICES & OTHER
EXTERNAL FACTORS             6/30/2002    $      625      $      396      $      383      $      391     $        4     $    1,799
IN LESS LIQUID
MARKETS(1)                   9/30/2002    $      195      $      345      $      276      $      269     $       (1)    $    1,084
                                          ----------      ----------      ----------      ----------     ----------     ----------

BASED UPON MODELS            12/31/2001   $      231      $       12      $      (19)     $       50     $      188     $      462
& OTHER VALUATION
TECHNIQUES(2)                3/31/2002    $       53      $       30      $       --      $      125     $      291     $      499

                             6/30/2002    $      143      $     (111)     $      (33)     $      112     $      267     $      378

                             9/30/2002    $      (97)     $      (58)     $       50      $      295     $      394     $      584
                                          ----------      ----------      ----------      ----------     ----------     ----------

                             12/31/2001   $      988      $      328      $      326      $      413     $      206     $    2,261

                             3/31/2002    $      928      $      367      $      379      $      560     $      286     $    2,520

                             6/30/2002    $      768      $      285      $      350      $      503     $      271     $    2,177

                             9/30/2002    $       98      $      287      $      327      $      564     $      392     $    1,668
                                          ----------      ----------      ----------      ----------     ----------     ----------
TOTAL
                             1Q CHANGE    $      (60)     $       39      $       53      $      147     $       80     $      259

                             2Q CHANGE    $     (160)     $      (82)     $      (29)     $      (57)    $      (15)    $     (343)

                             3Q CHANGE    $     (670)     $        2      $      (23)     $       61     $      121     $     (509)

                             YTD CHANGE   $     (890)     $      (41)     $        1      $      151     $      186     $     (593)
                                          ----------      ----------      ----------      ----------     ----------     ----------
</Table>

    (1) A significant portion of the value expected to be realized relates to a
        contract within the California power market. The original terms of this
        agreement provide for the sale of power at prices ranging from $62.50 to
        $87.00 per megawatt hour over a ten-year period at variable volumes up
        to 1,400 megawatts per hour. On November 11, 2002, Williams executed a
        Settlement Agreement with California. The Settlement includes a
        renegotiated long-term energy contract with the State of California. The
        renegotiated contract provides for the sale of power at prices ranging
        from $62.50 to $87.00 per megawatt hour through 2010 at varying volumes
        up to 1,875 megawatts per hour. The value to be realized set forth above
        does not reflect the revised terms of the contract with the State of
        California.

    (2) Quoted market prices of the underlying commodities are significant
        factors in estimating the fair value.

    Energy Marketing & Trading manages the risk assumed from providing energy
risk management services to its customers. This risk resulted from exposure to
energy commodity prices, volatility and correlation of commodity prices, the
portfolio position of the contracts, liquidity of the market in which the
contract is transacted, interest rates, and counterparty performance and credit.
Energy Marketing & Trading seeks to diversify its portfolio in managing the
commodity price risk in the transactions that it executes in various markets and
regions by executing offsetting contracts to manage the commodity price risk in
accordance with parameters established in its trading policy. As noted
previously, during the third quarter of 2002, Energy Marketing & Trading was
significantly constrained in its ability to manage or hedge its portfolio
against adverse market movements according to the aforementioned methodology due


                                       49
<PAGE>

Management's Discussion & Analysis (Continued)

to a lack of market liquidity, the market's concerns regarding Williams credit
and liquidity, and internal efforts to preserve liquidity.

   In response to factors such as recent downgrades by credit rating agencies to
below-investment grade and difficulties in obtaining financing facilities, the
Company announced a significant reduction in its financial commitment to the
Energy Marketing & Trading segment. As a result the Company is evaluating
opportunities to sell or liquidate Energy Marketing & Trading's trading
portfolio or to form a joint venture around the Energy Marketing & Trading unit
with another party. As a result of this decision, the ultimate realization of
the estimated fair value of Energy Marketing & Trading's portfolio under this
strategy may vary from the amount of the Company's estimate at September 30,
2002.

FINANCIAL CONDITION AND LIQUIDITY

LIQUIDITY

Williams' liquidity comes from both internal and external sources. Certain of
those sources are available to Williams (parent) and others are available to
certain of its subsidiaries. Williams' sources of liquidity consist primarily of
the following:

        o   Available cash-equivalent investments of $980.5 million at September
            30, 2002, as compared to $1.1 billion at December 31, 2001.
        o   $660 million available under Williams' revolving bank-credit
            facility at September 30, 2002, as compared to $700 million at
            December 31, 2001. As discussed in Note 11, the borrowing capacity
            under this facility will reduce as assets are sold.
        o   $61 million at September 30, 2002 under a new $400 million secured
            short-term letter of credit facility obtained in the third-quarter
            2002.
        o   Cash generated from operations and the future sales of certain
            assets.

   In April 2002, Williams filed a shelf registration statement with the
Securities and Exchange Commission to enable it to issue up to $3 billion of a
variety of debt and equity securities. This registration statement was declared
effective June 26, 2002. Because of Williams' debt rating and loan covenants, it
is unlikely that Williams would be able to issue securities under the shelf
registration statement in the near term.

     In addition, there are outstanding registration statements filed with the
Securities and Exchange Commission for Northwest Pipeline, Texas Gas
Transmission and Transcontinental Gas Pipe Line (each a wholly owned subsidiary
of Williams). As of November 13, 2002 approximately $450 million of shelf
availability remains under these outstanding registration statements and may be
used to issue a variety of debt securities. Interest rates, market conditions
and industry conditions will affect amounts raised, if any, in the capital
markets.

   Capital and investment expenditures for 2002 are estimated to total
approximately $2.2 billion. Williams expects to fund capital and investment
expenditures, debt payments and working-capital requirements through (1) cash
generated from operations, (2) the use of the available portion of Williams'
$660 million, and/or (3) the sale or disposal of assets.

   As discussed in Note 11, Williams Production RMT Company (RMT), a wholly
owned subsidiary, entered into a $900 million Credit Agreement dated as of July
31, 2002, with certain lenders including a subsidiary of Lehman Brothers, Inc.,
a related party to Williams. The loan is guaranteed by Williams, Williams
Production Holdings LLC (Holdings) and certain RMT subsidiaries. It is also
secured by the capital stock and assets of Holdings and certain of RMT's
subsidiaries. The assets of RMT are comprised primarily of the assets of the
former Barrett Resources Corporation acquired in 2001, which were primarily
natural gas properties in the Rocky Mountain region. The loan matures on July
25, 2003. RMT must be sold within 75 days of a parent liquidity event which will
arise if Williams fails to maintain actual and projected liquidity (a) at any
time from the closing date through the 180th day thereafter (January 27, 2003),
of $600 million; (b) at any time thereafter through and including the maturity
date, of $750 million; and (c) only projected liquidity for twelve months after
the maturity date, of $200 million. Liquidity projections must be provided
weekly until the maturity date.

Outlook

   Based on the Company's forecast of cash flows and liquidity, Williams
believes that it has the financial resources and liquidity to meet future cash
requirements and satisfy current lending covenants for the balance of the year.
Included in this forecast are expected proceeds totaling approximately $780
million from the sale of assets, approximately $550 million is expected to close
in the fourth-quarter pursuant to definitive agreements and the remainder is
expected to close in the fourth quarter upon further negotiations.

   Including periods through first-quarter 2004, the Company has scheduled debt
retirements of approximately $4.1 billion and anticipates significant additional
asset sales to meet its liquidity needs over that period. Realization of the
proceeds from forecasted asset sales is a significant factor for the Company to
satisfy its loan covenant regarding minimum levels of parent liquidity.


                                       50
<PAGE>

Management's Discussion & Analysis (Continued)

Credit Ratings

   At December 31, 2001, Williams maintained certain preferred interest and debt
obligations that contained provisions requiring payment of the related
obligation or liquidation of the related assets in the event of specified
declines in Williams' senior unsecured long-term credit ratings given by Moody's
Investor's Service, Standard & Poor's and Fitch Ratings (rating agencies).
Obligations subject to these "ratings triggers" totaled $816 million at December
31, 2001. During the first quarter of 2002, Williams negotiated changes to
certain of the agreements, which eliminated the exposure to the "ratings
trigger" clauses incorporated in the agreements. Negotiations for one of the
agreements resulted in Williams agreeing to redeem a $560 million preferred
interest over the next year in equal quarterly installments (see Note 13). The
obligations subject to "ratings triggers" were reduced to $182 million at March
31, 2002. As a result of the credit rating downgrades in July 2002, Williams
redeemed $135 million of preferred interests on August 1, 2002 and repaid a $47
million loan in August 2002.

   Williams' energy risk management and trading business also relied upon the
investment-grade rating of Williams' senior unsecured long-term debt to satisfy
credit support requirements of many counterparties. As a result of the credit
rating downgrades to below investment grade levels, Energy Marketing & Trading's
participation in energy risk management and trading activities requires
alternate credit support under certain existing agreements. In addition,
Williams is required to fund margin requirements pursuant to industry standard
derivative agreements with cash, letters of credit or other negotiable
instruments. For October 1, 2002 through November 11, 2002, Williams has
provided approximately $341 million in cash to various counterparties, including
prepayments for crude oil for the refineries and margin requirements. Williams
continues to negotiate with various counterparties on the types and amounts of
credit support that may be required pursuant to adequate assurance and similar
provisions in existing agreements. The amount of credit support ultimately
required under these agreements may be significant.

Off-Balance Sheet Financing Arrangements and Guarantees of Debt or Other
Commitments to Third Parties

   As disclosed in Williams' Current Report on Form 8-K dated May 28, 2002,
Williams had operating lease agreements with special purpose entities (SPE's).
The lease agreements relate to certain Williams travel center stores, offshore
oil and gas pipelines and an onshore gas processing plant. As a result of
changes to the agreements in conjunction with the secured financing facilities
completed in July 2002, the agreements no longer qualify for operating lease
treatment. These operating leases were recorded as a capitalized lease beginning
in July 2002.

   Williams had agreements to sell, on an ongoing basis, certain of its accounts
receivable to qualified special-purpose entities. On July 25, 2002, these
agreements expired and were not renewed.

   WCG and significant events since December 31, 2001 regarding WCG

   At December 31, 2001, Williams had financial exposure from WCG of $375
million of receivables and $2.21 billion of guarantees and payment obligations.
Williams determined it was probable it would not fully realize the $375 million
of receivables, and it would be required to perform under its $2.21 billion of
guarantees and payment obligations. Williams developed an estimated range of
loss related to its total WCG exposure and management believed that no loss
within that range was more probable than another. For 2001, Williams recorded
the $2.05 billion minimum amount of the range of loss from its financial
exposure to WCG, which was reported in the Consolidated Statement of Operations
as a $1.84 billion pre-tax charge to discontinued operations and a $213 million
pre-tax charge to continuing operations. The charge to discontinued operations
of $1.84 billion included a $1.77 billion minimum amount of the estimated range
of loss from performance on $2.21 billion of guarantees and payment obligations.
The charge to continuing operations of $213 million included estimated losses
from an assessment of the recoverability of the carrying amounts of the $375
million of receivables and a remaining $25 million investment in WCG common
stock.

   Williams, prior to the spinoff of WCG, provided indirect credit support for
$1.4 billion of WCG's Note Trust Notes. On March 5, 2002, Williams received the
requisite approvals on its consent solicitation to amend the terms of the WCG
Note Trust Notes. The amendment, among other things, eliminated provisions that
would have caused acceleration of the WCG Note Trust Notes as a result of a WCG
bankruptcy or a Williams credit rating downgrade. The amendment also affirmed


                                       51
<PAGE>

Management's Discussion & Analysis (Continued)

Williams' obligation for all payments due with respect to the WCG Note Trust
Notes, which mature in March 2004, and allows Williams to fund such payments
from any available sources. In July 2002, Williams acquired substantially all of
the WCG Note Trust Notes by exchanging $1.4 billion of Williams Senior Unsecured
9.25 percent Notes due March 2004. In November 2002, Williams acquired the
remaining WCG Note Trust Notes.

   Williams also provided a guarantee of WCG's obligations under a 1998
transaction in which WCG entered into a lease agreement covering a portion of
its fiber-optic network. WCG had an option to purchase the covered network
assets during the lease term at an amount approximating the lessor's cost of
$750 million. On March 8, 2002, WCG exercised its option to purchase the covered
network assets. On March 29, 2002, Williams funded the purchase price of $754
million and became entitled to an unsecured note from WCG for the same amount.

   Williams has also provided guarantees on certain other performance
obligations of WCG totaling approximately $57 million.

2002 Evaluation

   At September 30, 2002, Williams had receivables and claims from WCG of $2.15
billion arising from Williams affirming its payment obligation on the $1.4
billion of WCG Note Trust Notes and Williams paying $754 million under the WCG
lease agreement. At September 30, 2002, Williams also had $334 million of
previously existing receivables. In third-quarter 2002, Williams recorded in
continuing operations a pre-tax charge of $22.9 million related to WCG,
including an assessment of the recoverability of its receivables and claims from
WCG. For the nine months ended September 30, 2002, Williams has recorded in
continuing operations pre-tax charges of $269.9 million related to the recovery
of these receivables and claims. At September 30, 2002, Williams estimates that
approximately $2.2 billion of the $2.5 billion of receivables from WCG are not
recoverable.

   See Note 4 for further discussion of Williams' estimate of recoverability
including terms of the Settlement Agreement between Williams, WCG, the Official
Committee of Unsecured Creditors and Leucadia National Corporation.

OPERATING ACTIVITIES

    In March 2002, WCG exercised its option to purchase certain network assets
under an operating lease agreement for which Williams provided a guarantee of
WCG's obligations. On March 29, 2002, Williams, as guarantor under the
agreement, paid $754 million related to WCG's purchase of these network assets.
In return, Williams became entitled to receive an instrument of unsecured debt
from WCG in the same amount. Williams recorded an additional pre-tax charge of
$232 million, $15 million, and $22.9 million in first, second, and third-quarter
2002, respectively, related to its assessment of the recoverability of certain
receivables from WCG (see Note 4).

   During 2002, Williams was required to provide cash collateral in support of
surety bonds underwritten by an insurance company and provide cash collateral in
support of letters of credit due to downgrades by credit rating agencies.

   During 2002, Williams has recorded a total of approximately $574 million in
provisions for losses on property and other assets. Those provisions consisted
primarily of the impairments at Petroleum Services, a partial impairment of
goodwill at Energy Marketing & Trading and writedowns of investments.

   During second-quarter 2002, Williams made a $55 million contribution to its
pension plan. Due to the decline of the stock market in 2002, the plan assets
have decreased from the values at year end. See the Other section.

FINANCING ACTIVITIES

   On January 14, 2002, Williams completed the sale of 44 million publicly
traded units, more commonly known as FELINE PACS, that each include a senior
debt security and an equity purchase contract. The $1.1 billion of debt has a
term of five years, and the equity purchase contract will require the Company to
deliver Williams common stock to holders after three years based on a previously
agreed rate. Net proceeds from this issuance were approximately $1.1 billion.
The FELINE PACS were issued as part of Williams' plan to strengthen its balance
sheet and maintain its investment-grade rating.

   On March 19, 2002, Williams issued $850 million of 30-year notes with an
interest rate of 8.75 percent and $650 million of 10-year notes with an interest
rate of 8.125 percent. The proceeds were used to repay outstanding


                                       52
<PAGE>
Management's Discussion & Analysis (Continued)

commercial paper, provide working capital and for general corporate purposes.

   In April 2002, Williams Energy Partners L.P., a partially owned and
consolidated entity of Williams, borrowed $700 million from a group of
institutions. These proceeds were primarily used to acquire Williams Pipe Line,
a formerly wholly owned subsidiary of Williams. In May 2002, Williams Energy
Partners L.P. issued approximately 8 million common units at $37.15 per unit
resulting in approximately $283 million of net proceeds that were used to reduce
the $700 million loan. Williams Energy Partners L.P. will refinance the
September 30, 2002 balance of $411 million in short-term debt with long-term
debt financing (see Note 11).

   In May 2002, Energy Marketing & Trading entered into an agreement which
transferred the rights to certain receivables, along with risks associated with
that collection, in exchange for cash. Due to the structure of the agreement,
Energy Marketing & Trading accounted for this transaction as debt collateralized
by the claims. The $79 million of debt is classified as current.

   As discussed in Note 11 and under the "Liquidity" heading of management's
discussion and analysis, RMT entered into a $900 million credit agreement dated
as of July 31, 2002.

   On March 27, 2002, concurrent with its sale of Kern River to MEHC, Williams
issued approximately 1.5 million shares of 9.875 percent cumulative convertible
preferred stock for $275 million. Dividends on the preferred stock are payable
quarterly (see Note 14).

   In July 2002, Williams reduced the quarterly dividend on common stock from
$.20 per share to $.01 per share. Additionally, one of the new covenants within
the credit agreements limits the common stock dividends paid by Williams in any
quarter to not more than $6.25 million.

   Williams' long-term debt to debt-plus-equity ratio was 69.6 percent at
September 30, 2002 (excluding Central debt), compared to 59.0 percent at
December 31, 2001 (excluding Kern River, Central, Mid America Pipeline, and
Seminole Pipeline debt). If short-term notes payable and long-term debt due
within one year are included in the calculations, these ratios would be 73.1
percent at September 30, 2002 and 64.8 percent at December 31, 2001.
Additionally, the long-term debt to debt-plus-equity ratio as calculated for
covenants under certain debt agreements, as amended, was 65.8 percent at
September 30, 2002.

INVESTING ACTIVITIES

   Williams has contributed approximately $215 million towards the development
of the Gulfstream joint venture project, a Williams equity investment, during
2002.

   Net cash proceeds from asset dispositions, the sales of businesses and
investments include the following:

        o   $1.16 billion related to the sale of Mid-American and Seminole
            Pipeline on August 1, 2002.
        o   $464 million related to the sale of Kern River on March 27, 2002.
        o   $326 million from the sale of Jonah Field and Anadarko Basin
            properties on August 1, 2002.
        o   $217 million related to the sale of the Cove Point LNG Facility on
            September 5, 2002.
        o   $85 million related to the sale of Williams' 27 percent interest in
            the Lithuanian refinery, pipeline and terminal complex on September
            19, 2002.
        o   $75 million related to the sale of a note receivable from the
            Lithuanian refinery, pipeline and terminal complex.
        o   $77 million related to the sale of Kansas Hugoton on August 2, 2002.
        o   $12 million from the sale of Williams' interest in Northern Border
            Partners on August 16, 2002.

COMMITMENTS

   The table below summarizes the maturity or redemption by year of the notes
payable, long-term debt and preferred interests in consolidated subsidiaries
outstanding at September 30, 2002 by period. These amounts do not reflect debt
reductions contingent upon asset sales (see Note 11)

<Table>
<Caption>
                             October 1 -
                            December 31
                               2002        2003       2004          2005        2006      Thereafter    Total
                            -----------  --------   --------      --------   --------      --------   --------
<S>                         <C>          <C>        <C>           <C>        <C>           <C>        <C>

Notes payable                 $     --   $    929(1) $     --     $     --   $     --      $     --   $    929
Long-term debt,
  including current portion        685      1,075      2,991(2)        402      1,042(3)      7,492     13,687
</Table>

    (1) An additional $240 million will be paid at maturity of the RMT note
        payable related to a deferred set up fee and deferred interest.
    (2) Includes $1.1 billion of 6.5% notes, payable 2007, subject to
        remarketing in 2004.
    (3) Includes $400 million of 6.75% notes, payable 2016, putable/callable in
        2006.


                                       53
<PAGE>

Management's Discussion & Analysis (Continued)

OTHER

   If lump sum payments made during 2002 from the pension plan reach the
settlement accounting threshold, Williams would be required to recognize certain
unrecognized net losses that would increase pension expense. Williams
anticipates that the threshold will be reached in the fourth quarter of 2002
resulting in an additional expense charge of $25 million to $35 million. In
addition, on January 1, 2002, the market value of plan assets exceeded the
accumulated benefit obligation (calculated using a discount rate of 7.5
percent). Through September 30, 2002, the assets in the defined benefit pension
plans have experienced negative returns. If, at December 31, 2002, the market
value of each plan's assets are less than the respective plan's accumulated
benefit obligation, Williams may be required to make additional cash
contributions to the plan during the fourth quarter such that the market value
of plan assets would exceed the accumulated benefit obligation at December 31,
2002, in order to avoid recording an additional charge to stockholders' equity.



                                       54
<PAGE>


       ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

   Williams' interest rate risk exposure associated with the debt portfolio was
impacted by new debt issuances in first and third-quarter 2002. In January 2002,
Williams issued $1.1 billion of 6.5 percent notes payable 2007 (see Note 11). In
February 2002, $240 million of 6.125 percent notes were retired. In March 2002,
Williams issued $850 million of 8.75 percent notes due 2032 and $650 million of
8.125 percent notes due 2012. Also in March 2002, the terms of a $560 million
priority return structure classified as preferred interest in consolidated
subsidiaries were amended. Based on the new payment terms of the amendment, the
remaining balance due has been reclassified from preferred interests in
consolidated subsidiaries to long-term debt due within one year (see Note 13).
The interest rate varies based on LIBOR plus an applicable margin and was 2.803
percent at September 30, 2002. Through September 30, 2002, $224 million has been
redeemed.

   Pursuant to the completion of a consent solicitation during first-quarter
2002 with WCG Note Trust holders, Williams recorded $1.4 billion of long-term
debt obligations. In July 2002, Williams acquired substantially all of the WCG
Note Trust notes by exchanging $1.4 billion of Williams Senior Unsecured 9.25
percent notes due March 2004 (see Note 4). In November 2002, Williams acquired
the remaining WCG Note Trust Notes. In July 2002, Transcontinental Gas Pipe Line
issued $325 million of 8.875 percent long-term debt obligations due 2012 and
Williams obtained a $900 million secured short-term loan. The $900 million
borrowing accrues interest at a 14 percent interest rate plus a variable rate,
which is currently 5.81 percent.

COMMODITY PRICE RISK

   At September 30, 2002, the value at risk for the Energy Marketing & Trading
operations and the natural gas liquids trading operations (now reported in the
Midstream Gas & Liquids segment) was $48.9 million compared to $74.5 million at
June 30, 2002. This decline in value at risk is primarily a result of the $509
million decline in overall portfolio value outlined in previous sections. Value
at risk requires a number of key assumptions and is not necessarily
representative of actual losses in fair value that could be incurred from the
trading portfolio. The value-at-risk model includes all financial instruments
and physical positions and commitments in its trading portfolio and assumes that
as a result of changes in commodity prices, there is a 95 percent probability,
but not certainty, that the one-day loss in fair value of the trading portfolio
will not exceed the value at risk. The value-at-risk model uses historical
simulations to estimate hypothetical movements in future market prices assuming
normal market conditions based upon historical market prices. Value at risk does
not consider that changing the energy risk management and trading portfolio in
response to market conditions could affect market prices and could take longer
to execute than the one-day holding period assumed in the value-at-risk model.
While a one-day holding period is the industry standard, a longer holding period
could more accurately represent the true market risk in an environment where
market illiquidity and credit and liquidity constraints of the company may
result in further inability to mitigate risk in a timely manner in response to
changes in market conditions.

                         ITEM 4. CONTROLS AND PROCEDURES

   An evaluation of the effectiveness of the design and operation of Williams'
disclosure controls and procedures (as defined in Rule 13a-14 and 15d-14 of the
Securities Exchange Act) was performed within the 90 days prior to the filing
date of this report. This evaluation was performed under the supervision and
with the participation of Williams' management, including Williams' Chief
Executive Officer and Chief Financial Officer. Based upon that evaluation,
Williams' Chief Executive Officer and Chief Financial Officer concluded that
these disclosure controls and procedures are effective.

   There have been no significant changes in Williams' internal controls or
other factors that could significantly affect internal controls since the
certifying officers' most recent evaluation of those controls.

                                       55
<PAGE>


                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information called for by this item is provided in Note 12 Contingent
liabilities and commitments included in the Notes to Consolidated Financial
Statements included under Part I, Item 1. Financial Statements of this report,
which information is incorporated by reference into this item.

Item 2. Changes in Securities and Use of Proceeds

Pursuant to the terms of the new credit facilities entered into on July 31,
2002, Williams is restricted from declaring and paying dividends in any quarter
the aggregate amount of which would be greater than $6.25 million. This
restriction does not limit Williams' ability to declare and pay dividends on
preferred stock issued prior to July 31, 2002, nor does it limit the ability of
Williams Energy Partners L.P. to make distributions to its unit holders
pursuant to the terms of its partnership agreement.

The terms of the 9.875 percent cumulative convertible preferred stock issued to
MEHC (see Note 14) prohibit Williams from declaring and paying dividends on its
common stock or any other parity preferred stock if dividends on the 9.875
percent cumulative convertible preferred stock are in arrears. Dividends on all
parity preferred stock not paid in full must be paid pro rata.

Item 6.  Exhibits and Reports on Form 8-K

         (a)  The exhibits listed below are filed as part of this report:

              Exhibit 10.1 -- Amendment No. 1 dated as of October 31, 2002 to
              Credit Agreement dated as of July 31, 2002 among The Williams
              Companies, Inc., Williams Production Holdings LLC, Williams
              Production RMT Company, as Borrower, the Several Lenders from time
              to time parties thereto, Lehman Brothers Inc., as Lead Arranger
              and Book Manager, and Lehman Commercial Paper Inc., as Syndication
              Agent and Administrative Agent, and Guarantee and Collateral
              Agreement made by The Williams Companies, Inc., Williams
              Production Holdings LLC, Williams Production RMT Company and
              certain of its Subsidiaries in favor of Lehman Commercial Paper
              Inc., as Administrative Agent, dated as of July 31, 2002.

              Exhibit 10.2 -- First Amended and Restated Credit Agreement dated
              as of October 31, 2002 among The Williams Companies, Inc.,
              Northwest Pipeline Corporation, Transcontinental Gas Pipe Line
              Corporation and Texas Gas Transmission Corporation, as Borrowers,
              the Banks named therein, JPMorgan Chase Bank and Commerzbank AG,
              as Co-Syndication Agents, Credit Lyonnais New York Branch, as
              Documentation Agent, Citicorp USA, Inc., as Agent, and Salomon
              Smith Barney Inc., as Arranger.

              Exhibit 10.3 -- Amended and Restated Credit Agreement dated as of
              October 31, 2002 among The Williams Companies, Inc., as Borrower,
              Citicorp USA, Inc., as Agent and Collateral Agent, Bank of America
              N.A., as Syndication Agent, Citibank, N.A., Bank of America N.A.
              and The Bank of Nova Scotia, as Issuing Banks, the Banks named
              therein, as Banks, and Salomon Smith Barney Inc., as Arranger.

              Exhibit 10.4 -- First Amendment dated as of October 31, 2002 to
              Security Agreement dated as of July 31, 2002 among The Williams
              Companies, Inc. and each of the Subsidiaries which is or
              subsequently becomes a party to the Security Agreement in favor of
              Citibank, N.A., as collateral trustee for the benefit of the
              holders of the Secured Obligations.

              Exhibit 10.5 -- First Amendment dated as of October 31, 2002 to
              Pledge Agreement dated as of July 31, 2002 among The Williams
              Companies, Inc. and each of the Subsidiaries which is or
              subsequently becomes a party to the Pledge Agreement in favor of
              Citibank, N.A., as collateral trustee for the benefit of the
              holders of the Secured Obligations.

              Exhibit 10.6 -- First Amendment dated as of October 31, 2002 to
              Guaranty dated as of July 31, 2002 by Williams Gas Pipeline
              Company, L.L.C. in favor of the Financial Institutions as defined
              therein.

              Exhibit 10.7 -- First Amendment dated as of October 31, 2002 to
              Collateral Trust Agreement dated as of July 31, 2002 among The
              Williams Companies, Inc. and certain of its Subsidiaries, as
              Debtors, and Citibank, N.A., as Collateral Trustee.

              Exhibit 10.8 -- First Amendment to Guaranty by Midstream Entities
              dated as of October 31, 2002 to Guaranty dated as of July 31, 2002
              by certain Midstream Subsidiaries, as defined therein, in favor of
              Citibank, N.A., as surety administrative agent for the holders of
              the Secured Obligations.


                                       56
<PAGE>


Part II. Other Information (continued)

              Exhibit 10.9 -- Amended and Restated Subordinated Guaranty dated
              as of October 31, 2002 by Williams Production Holdings LLC in
              favor of the Financial Institutions as defined therein.

              Exhibit 10.10 -- First Amended and Restated Term Loan Agreement
              dated as of October 31, 2002 among The Williams Companies, Inc.,
              as Borrower, Credit Lyonnais New York Branch, as Administrative
              Agent, Commerzbank AG New York and Grand Cayman Branches, as
              Syndication Agent, The Bank of Nova Scotia, as Documentation
              Agent, and the Lenders named therein.

              Exhibit 10.11 -- Settlement and Retention Agreement dated August
              7, 2002, between The Williams Companies, Inc. and William G. von
              Glahn

              Exhibit 10.12 -- Form of Change in Control Severance Agreement
              between the Company and certain executive officers.

              Exhibit 12 -- Computation of Ratio of Earnings to Combined Fixed
              Charges and Preferred Stock Dividend Requirements.

              Exhibit 99.1 -- Certification pursuant to 18 U.S.C. Section 1350,
              as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
              2002 by Steven J. Malcolm, Chief Executive Officer of The Williams
              Companies, Inc.

              Exhibit 99.2 -- Certification pursuant to 18 U.S.C. Section 1350,
              as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
              2002 by Jack D. McCarthy, Chief Financial Officer of The Williams
              Companies, Inc.

        (b)   During third-quarter 2002, Williams filed a Form 8-K on the
              following dates reporting events under the specified items: July
              3, 2002 Items 5 and 7; July 12, 2002 Items 5 and 7; July 23, 2002
              Item 9; July 26, 2002 Item 9; July 29, 2002 Item 9; July 31, 2002
              Item 9; August 6, 2002 Item 9; August 14, 2002 Item 9; August 15,
              2002 Item 9; August 21, 2002 Item 9; September 6, 2002 Item 9;
              September 17, 2002 Item 9; and September 24, 2002 Item 9 (filed
              two Form 8-K's on this date).


                                       57
<PAGE>


                                    SIGNATURE


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                              THE WILLIAMS COMPANIES, INC.
                                              ----------------------------------
                                              (Registrant)



                                              /s/ Gary R. Belitz
                                              ----------------------------------
                                              Gary R. Belitz
                                              Controller
                                              (Duly Authorized Officer and
                                                Principal Accounting Officer)

November 14, 2002



<PAGE>
                                 CERTIFICATION


I, Steven J. Malcolm, President and Chief Executive Officer of The Williams
Companies, Inc. ("registrant"), certify that:

     1.   I have reviewed this quarterly report on Form 10-Q of the registrant;

     2.   Based on my knowledge, this quarterly report does not contain any
          untrue statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this quarterly report;

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this quarterly report, fairly present in all
          material respects the financial condition, results of operations and
          cash flows of the registrant as of, and for, the periods presented in
          this quarterly report;

     4.   The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
          and we have:

          a.   designed such disclosure controls and procedures to ensure that
               material information relating to the registrant, including its
               consolidated subsidiaries, is made known to us by others within
               those entities, particularly during the period in which this
               quarterly report is being prepared;

          b.   evaluated the effectiveness of the registrant's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c.   presented in this quarterly report our conclusions about the
               effectiveness of the disclosure controls and procedures based on
               our evaluation as of the Evaluation Date;

     5.   The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of registrant's board of directors (or persons
          performing the equivalent function);

          a.   all significant deficiencies in the design or operation of
               internal controls which could adversely affect the registrant's
               ability to record, process, summarize and report financial data
               and have identified for the registrant's auditors any material
               weaknesses in internal controls; and

          b.   any fraud, whether or not material, that involves management or
               other employees who have a significant role in the registrant's
               internal controls; and

     6.   The registrant's other certifying officers and I have indicated in
          this quarterly report whether or not there were significant changes in
          internal controls or in other factors that could significantly affect
          internal controls subsequent to the date of our most recent
          evaluation, including any corrective actions with regard to
          significant deficiencies and material weaknesses.


                                           /s/ STEVEN J. MALCOLM
Date:  November 14, 2002                   -------------------------------------
                                           Steven J. Malcolm
                                           President and Chief Executive Officer
<PAGE>
I, Jack D. McCarthy, Senior Vice President - Finance and Chief Financial Officer
of The Williams Companies, Inc. ("registrant"), certify that:

     1.  I have reviewed this quarterly report on Form 10-Q of registrant;

     2.  Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

     3.  Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

     4.  The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a.       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b.       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c.       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

     5.  The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function);

         a.       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b.       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

     6.  The registrant's other certifying officers and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Date:  November 14, 2002                         /s/ JACK D. MCCARTHY
                                                 -------------------------------
                                                 Jack D. McCarthy
                                                 Senior Vice President - Finance
                                                 and Chief Financial Officer






<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
NUMBER          DESCRIPTION
- -------         -----------
<S>             <C>

Exhibit 10.1  -- Amendment No. 1 dated as of October 31, 2002 to Credit
                 Agreement dated as of July 31, 2002 among The Williams
                 Companies, Inc., Williams Production Holdings LLC, Williams
                 Production RMT Company, as Borrower, the Several Lenders from
                 time to time parties thereto, Lehman Brothers Inc., as Lead
                 Arranger and Book Manager, and Lehman Commercial Paper Inc., as
                 Syndication Agent and Administrative Agent, and Guarantee and
                 Collateral Agreement made by The Williams Companies, Inc.,
                 Williams Production Holdings LLC, Williams Production RMT
                 Company and certain of its Subsidiaries in favor of Lehman
                 Commercial Paper Inc., as Administrative Agent, dated as of
                 July 31, 2002.

Exhibit 10.2  -- First Amended and Restated Credit Agreement dated as of October
                 31, 2002 among The Williams Companies, Inc., Northwest Pipeline
                 Corporation, Transcontinental Gas Pipe Line Corporation and
                 Texas Gas Transmission Corporation, as Borrowers, the Banks
                 named therein, JPMorgan Chase Bank and Commerzbank AG, as
                 Co-Syndication Agents, Credit Lyonnais New York Branch, as
                 Documentation Agent, Citicorp USA, Inc., as Agent, and Salomon
                 Smith Barney Inc., as Arranger.

Exhibit 10.3  -- Amended and Restated Credit Agreement dated as of October 31,
                 2002 among The Williams Companies, Inc., as Borrower, Citicorp
                 USA, Inc., as Agent and Collateral Agent, Bank of America N.A.,
                 as Syndication Agent, Citibank, N.A., Bank of America N.A. and
                 The Bank of Nova Scotia, as Issuing Banks, the Banks named
                 therein, as Banks, and Salomon Smith Barney Inc., as Arranger.

Exhibit 10.4  -- First Amendment dated as of October 31, 2002 to Security
                 Agreement dated as of July 31, 2002 among The Williams
                 Companies, Inc. and each of the Subsidiaries which is or
                 subsequently becomes a party to the Security Agreement in favor
                 of Citibank, N.A., as collateral trustee for the benefit of the
                 holders of the Secured Obligations.

Exhibit 10.5  -- First Amendment dated as of October 31, 2002 to Pledge
                 Agreement dated as of July 31, 2002 among The Williams
                 Companies, Inc. and each of the Subsidiaries which is or
                 subsequently becomes a party to the Pledge Agreement in favor
                 of Citibank, N.A., as collateral trustee for the benefit of the
                 holders of the Secured Obligations.

Exhibit 10.6  -- First Amendment dated as of October 31, 2002 to Guaranty dated
                 as of July 31, 2002 by Williams Gas Pipeline Company, L.L.C. in
                 favor of the Financial Institutions as defined therein.

Exhibit 10.7  -- First Amendment dated as of October 31, 2002 to Collateral
                 Trust Agreement dated as of July 31, 2002 among The Williams
                 Companies, Inc. and certain of its Subsidiaries, as Debtors,
                 and Citibank, N.A., as Collateral Trustee.

Exhibit 10.8  -- First Amendment to Guaranty by Midstream Entities dated as of
                 October 31, 2002 to Guaranty dated as of July 31, 2002 by
                 certain Midstream Subsidiaries, as defined therein, in favor of
                 Citibank, N.A., as surety administrative agent for the holders
                 of the Secured Obligations.

Exhibit 10.9  -- Amended and Restated Subordinated Guaranty dated as of October
                 31, 2002 by Williams Production Holdings LLC in favor of the
                 Financial Institutions as defined therein.

Exhibit 10.10 -- First Amended and Restated Term Loan Agreement dated as of
                 October 31, 2002 among The Williams Companies, Inc., as
                 Borrower, Credit Lyonnais New York Branch, as Administrative
                 Agent, Commerzbank AG New York and Grand Cayman Branches, as
                 Syndication Agent, The Bank of Nova Scotia, as Documentation
                 Agent, and the Lenders named therein.

Exhibit 10.11 -- Settlement and Retention Agreement dated August 7, 2002,
                 between The Williams Companies, Inc. and William G. von Glahn

Exhibit 10.12 -- Form of Change in Control Severance Agreement between the
                 Company and certain executive officers.

Exhibit 12    -- Computation of Ratio of Earnings to Combined Fixed Charges and
                 Preferred Stock Dividend Requirements.

Exhibit 99.1  -- Certification pursuant to 18 U.S.C. Section 1350, as adopted
                 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
                 Steven J. Malcolm, Chief Executive Officer of The Williams
                 Companies, Inc.

Exhibit 99. 2 -- Certification pursuant to 18 U.S.C. Section 1350, as adopted
                 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by
                 Jack D. McCarthy, Chief Financial Officer of The Williams
                 Companies, Inc.

</Table>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>3
<FILENAME>d00961exv10w1.txt
<DESCRIPTION>PURCHASE AGEEMENT
<TEXT>
<PAGE>
                                                               EXECUTION VERSION

                                                                    EXHIBIT 10.1

                                 AMENDMENT NO. 1

                                       TO

                                CREDIT AGREEMENT

                                       AND

                       GUARANTEE AND COLLATERAL AGREEMENT

                  Amendment No. 1, dated as of October 31, 2002 (this
"Amendment"), to (a) the Credit Agreement, dated as of July 31, 2002 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among The Williams Companies, Inc. ("Parent"), Williams Production
Holdings LLC ("Holdings"), Williams Production RMT Company ("Borrower"), the
institutions party thereto from time to time as lenders ("Lenders"), Lehman
Brothers Inc., as Lead Arranger and Book Manager, and Lehman Commercial Paper
Inc., as Syndication Agent and as Administrative Agent (in such capacity,
"Administrative Agent") and (b) the Guarantee and Collateral Agreement, dated as
of July 31, 2002 (the "Guarantee and Collateral Agreement"), made by Parent,
Holdings, the Borrower and certain Subsidiaries of the Borrower in favor of the
Administrative Agent. Defined terms used herein and not otherwise defined herein
shall have the meanings given to them in the Credit Agreement.

                  WHEREAS, Parent, Holdings, Borrower, the other Loan Parties,
Lenders and Administrative Agent have agreed to amend certain provisions of the
Credit Agreement and the Guarantee and Collateral Agreement to effect certain
agreed upon changes thereto on the terms and conditions set forth herein.

                  NOW, THEREFORE, in consideration of the premises set forth
above, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Parent, Holdings, Borrower,
Lenders and Administrative Agent agree as follows:

                  1. Amendments. Effective as of the Effective Date (as defined
below) and subject to the satisfaction of the conditions precedent set forth in
Section 2 below:

                  (a) the Credit Agreement shall be and hereby is amended and
restated in its entirety in the form of the conformed Credit Agreement attached
hereto as Exhibit A.

                  (b) Schedule 4.4 (Consents, Authorizations, Filings and
Notices) of the Credit Agreement shall be and hereby is amended and restated in
its entirety in the form attached as Exhibit B.



<PAGE>


                  (c) Schedule 4.6 (Material Litigation) of the Credit Agreement
shall be and hereby is amended and restated in its entirety in the form attached
hereto as Exhibit C.

                  (d) Schedule 4.19(a)-2 (UCC Financing Statements to Remain on
File) of the Credit Agreement shall be and hereby is amended and restated in its
entirety in the form attached hereto as Exhibit D.

                  (e) Schedule 6.15(a) (Hedging Arrangements) of the Credit
Agreement shall be and hereby is amended and restated in its entirety in the
form attached hereto as Exhibit E.

                  (f) Schedule 7.2(d) (Existing Indebtedness) of the Credit
Agreement shall be and hereby is amended and restated in its entirety in the
form attached as Exhibit F.

                  (g) Schedule 7.3(j) (Existing Liens) of the Credit Agreement
shall be and hereby is amended and restated in its entirety in the form attached
hereto as Exhibit G.

                  (h) Exhibit H shall be and hereby is inserted as Schedule
1.1(c) (Historical Hedging Addbacks) to the Credit Agreement.

                  (i) Exhibit I shall be and hereby is inserted as Schedule
1.1(d) (Specified Non-Recourse Debt) to the Credit Agreement.

                  (j) Exhibit J shall be and hereby is inserted as Schedule 4.21
(Specified Non-Recourse Debt Documents) to the Credit Agreement.

                  (k) Exhibit K shall be and hereby is inserted as Schedule
7.5(g)(i) (Certain Dispositions) to the Credit Agreement.

                  (l) Exhibit L shall be and hereby is inserted as Exhibit L (No
Parent Liquidity Event Certificate) to the Credit Agreement.

                  (m) The definition of "Excluded Assets" in the Guarantee and
Collateral Agreement shall be and is hereby amended by (i) deleting the word
"and" immediately prior to the phrase "(2) the Capital Stock" and (ii) adding
the following phrase at the end of such definition: "and (3) the GE Equipment
securing the GE Loan".

                  (n) The Guarantee and Collateral Agreement shall be and hereby
is amended by adding the parenthetical "(except the GE Equipment securing the
obligations of the Borrower under the GE Loan)" immediately after the word
"Equipment" in Section 3(f) thereof.

                  2. Conditions Precedent. This Amendment shall become effective
as of July 31, 2002 (the "Effective Date") upon satisfaction of the following
conditions precedent:



                                       2
<PAGE>

                  (a) the Administrative Agent has received duly executed
originals of (i) this Amendment from Parent, Holdings, Borrower, the other Loan
Parties, the Required Lenders and the Administrative Agent and (ii) an
Assumption Agreement in substantially the form attached as Annex I to the
Guarantee and Collateral Agreement from Rulison Gas Company, LLC;

                  (b) the Administrative Agent shall have received legal
opinions from (i) outside counsel to Parent, Holdings and Borrower and (ii) the
general counsel of Parent, Holdings and Borrower, in each case, in form and
substance satisfactory to the Administrative Agent;

                  (c) the Administrative Agent shall have received duly executed
and fully effective copies of (i) an amendment and restatement of the Credit
Agreement, dated as of July 25, 2000, among Parent, Northwest Pipeline
Corporation, Transcontinental Gas Pipe Line Corporation and Texas Gas
Transmission Corporation, as Borrowers, the financial institutions party
thereto, as Banks, JPMorgan Chase Bank (formerly known as The Chase Manhattan
Bank) and Commerzbank AG, as Co-Syndication Agents, Credit Lyonnais New York
Branch, as Documentation Agent, and Citibank, N.A., as Agent, as amended (the
"Multiyear Williams Credit Agreement"), (ii) an amendment and restatement of the
Credit Agreement, dated as of July 31, 2002, among Parent, as Borrower, the
financial institutions party thereto, as Banks, the Issuing Banks, and Citicorp
USA, Inc., as Agent and Collateral Agent, as amended (the "L/C Agreement"), and
(iii) all other consents described on Schedule 4.4 of the Credit Agreement, in
each case, in form and substance satisfactory to the Required Lenders;

                  (d) the Administrative Agent shall have received such other
certificates, information and opinions as any Required Lender through the
Administrative Agent may reasonably request, in each case, in form and substance
satisfactory to the Required Lenders;

                  (e) the Administrative Agent shall have received revised
documentation related to the Borrower's hedging arrangements pursuant to
Schedule 6.15(a) of the Credit Agreement, amended, supplemented or otherwise
modified in accordance with Schedule I hereto, in each case, in form and
substance satisfactory to the Required Lenders in their sole discretion;

                  (f) the representations and warranties set forth in Section 3
of this Amendment shall be true and correct; and

                  (g) a certificate dated as of the date all of the conditions
set forth in Section 2 of this Amendment shall have been satisfied from each of
(i) the chief financial officer of the Parent and (ii) the general counsel of
the Parent, in each case certifying in writing that as of such date there shall
not have occurred and be continuing any default or event of default under (A)
the Credit Agreement and (B) any Indebtedness of Parent, Holdings, the Borrower
or any of the Borrower's Subsidiaries that, with notice or the passage of time
or both, would permit the holders thereof to accelerate such Indebtedness



                                       3
<PAGE>

and any other Indebtedness of Parent, Holdings, the Borrower or any of the
Borrower's Subsidiaries that may be accelerated and has an aggregate principal
amount outstanding in excess of $5,000,000 in the aggregate.

                  3. Representations and Warranties of Parent, Holdings and
Borrower. Parent, Holdings and Borrower hereby represent and warrant as of the
date hereof as follows:

                  (a) Each of Parent, Holdings, the Borrower and its
Subsidiaries (i) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (ii) has the power and
authority, and the legal right, to own and operate its Property, to lease the
Property it operates as lessee and to conduct the business in which it is
currently engaged, including the Oil and Gas Business, (iii) is duly qualified
as a foreign entity and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of Property or the conduct of its
business requires such qualification and (iv) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

                  (b) Parent and each Loan Party has the power and authority,
and the legal right, to make, deliver and perform this Amendment. Parent and
each Loan Party has taken all necessary corporate, partnership, limited
liability company or other action to authorize the execution, delivery and
performance of this Amendment. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the execution, delivery,
performance, validity or enforceability of this Amendment. This Amendment has
been duly executed and delivered on behalf of Parent and each Loan Party. This
Amendment constitutes a legal, valid and binding obligation of Parent and each
Loan Party, enforceable against Parent and each such Loan Party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

                  (c) The execution, delivery and performance of this Amendment
will not violate any Requirement of Law or any Contractual Obligation of Parent
(or a Subsidiary thereof, other than Holdings, the Borrower or any of the
Borrower's Subsidiaries), Holdings, the Borrower or any of the Borrower's
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents). No Requirement of Law or Contractual
Obligation applicable to Parent, Holdings, the Borrower or any of its
Subsidiaries could reasonably be expected to have a Material Adverse Effect.

                  (d) Upon the effectiveness of (i) this Amendment and (ii) the
Waiver to the Credit Agreement dated as of the date hereof, each of Parent,
Holdings and Borrower



                                       4
<PAGE>

hereby reaffirms all representations and warranties made in the Loan Documents
and to the extent the same are not amended hereby, agrees that all such
representations and warranties shall be deemed to have been remade as of the
date of delivery of this Amendment, unless and to the extent that any such
representation and warranty is stated to relate solely to an earlier date, in
which case such representation and warranty shall be true and correct as of such
earlier date.

                  (e) Upon the effectiveness of (i) this Amendment and (ii) the
Waiver to the Credit Agreement dated as of the date hereof, no Event of Default
or any event or circumstance which with the passage of time or giving of notice
or both would constitute an Event of Default has occurred and is continuing
under the Credit Agreement.

                  (f) A Company Sale would not violate any Contractual
Obligation of Parent (or a Subsidiary thereof, other than Holdings, the Borrower
or any of the Borrower's Subsidiaries), Holdings, the Borrower or any of the
Borrower's Subsidiaries.

                  4. Fees, Costs and Expenses. The Borrower agrees to pay on
demand in accordance with the terms of Section 10.5 of the Credit Agreement all
costs and expenses of the Administrative Agent and the Original Lenders in
connection with the preparation, execution and delivery of this Amendment,
including the reasonable fees and expenses of counsel to the Administrative
Agent and of counsel to the Original Lenders with respect thereto.

                  5. Reference to and Effect on the Credit Agreement and the
Other Loan Documents.

                  (a) Upon the effectiveness of this Amendment, on and after the
date hereof, (a) each reference in the Credit Agreement to "this Credit
Agreement", "this Agreement", "hereunder", "hereof", "herein" or words of like
import shall mean and be a reference to the Credit Agreement, as amended hereby,
and (b) each reference in the Guarantee and Collateral Agreement to "this
Guarantee and Collateral Agreement", "this Agreement", "hereunder", "hereof",
"herein" or words of like import shall mean and be a reference to the Guarantee
and Collateral Agreement, as amended hereby.

                  (b) Except as specifically amended or waived above, the Credit
Agreement and the Guarantee and Collateral Agreement, each as amended hereby,
and all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed. This Amendment shall be a Loan Document for the purposes
of the Credit Agreement and the other Loan Documents.

                  (c) Except as expressly provided herein, the execution,
delivery and effectiveness of this Amendment shall not operate as a waiver of
any right, power or remedy of the Administrative Agent or the Lenders, nor
constitute a waiver of any provision of the Credit Agreement, the Guarantee and
Collateral Agreement or any other



                                       5
<PAGE>

documents, instruments and agreements executed and/or delivered in connection
therewith.

                  6. Acknowledgment and Agreement. The parties to this Amendment
acknowledge and agree that (a) the Credit Agreement (as amended and restated
hereby) does not constitute a novation, payment and reborrowing or termination
of the Obligations under the Credit Agreement as in effect prior to the
effectiveness of this Amendment (the "Existing Obligations"), (b) the Existing
Obligations are in all respects continuing under the Credit Agreement (as
amended and restated hereby) with only the terms thereof being modified as
provided for in this Amendment, (c) the Liens and guarantees as granted under
the Security Documents securing payment of the Existing Obligations are in all
respects continuing and in full force and effect and secure the payment of the
Obligations under and as defined in the Credit Agreement (as amended and
restated hereby) and (d) upon the effectiveness of this Amendment, all Term
Loans made under the Credit Agreement prior to the effectiveness hereof will be
continued as Term Loans under the Credit Agreement (as amended and restated
hereby), in each case on the terms and conditions set forth in this Amendment
and the other Loan Documents.

                  7. Governing Law. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  8. Heading. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.

                  9. Counterparts. This Amendment may be executed by one or more
of the parties hereto an any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

                  10. Miscellaneous.

                  (a) This Amendment represents the entire agreement of the
Parent, Holdings, the Borrower, the other Loan Parties, the Administrative Agent
and the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein.

                  (b) Any provision of this Amendment that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.





                            [Signature Pages Follow]

                                       6
<PAGE>


                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers, all as of the
date and year first above written.

                                     THE WILLIAMS COMPANIES, INC. , as a
                                         Guarantor


                                     By: /s/ James G. Ivey
                                         ---------------------------------------
                                          Name:  James G. Ivey
                                          Title: Treasurer




























                      [SIGNATURE PAGE TO AMENDMENT NO. 1]
<PAGE>


                                     WILLIAMS PRODUCTION HOLDINGS LLC,
                                       as a Guarantor and a Grantor


                                     By: /s/ Phillip D. Wright
                                         ---------------------------------------
                                          Name:  Phillip D. Wright
                                          Title: President




























                      [SIGNATURE PAGE TO AMENDMENT NO. 1]
<PAGE>


                                     WILLIAMS PRODUCTION RMT COMPANY,
                                     as Borrower and a Grantor


                                     By: /s/ Phillip D. Wright
                                         ---------------------------------------
                                          Name: Phillip D. Wright
                                          Title: President




























                      [SIGNATURE PAGE TO AMENDMENT NO. 1]
<PAGE>


                                     PLAINS PETROLEUM GATHERING
                                     COMPANY, as a Guarantor



                                     By: /s/ Phillip D. Wright
                                         -------------------------------------
                                          Name: Phillip D. Wright
                                          Title: President




























                      [SIGNATURE PAGE TO AMENDMENT NO. 1]
<PAGE>


                                     BARRETT RESOURCES INTERNATIONAL
                                     CORPORATION, as a Guarantor



                                     By: /s/ Phillip D. Wright
                                         -------------------------------------
                                          Name: Phillip D. Wright
                                          Title: President




























                      [SIGNATURE PAGE TO AMENDMENT NO. 1]
<PAGE>


                                     BARGATH INC., as a Guarantor


                                     By: /s/ Phillip D. Wright
                                         ---------------------------------------
                                          Name: Phillip D. Wright
                                          Title: President




























                      [SIGNATURE PAGE TO AMENDMENT NO. 1]
<PAGE>


                                     BARRETT FUELS CORPORATION, as a
                                         Guarantor


                                     By: /s/ Phillip D. Wright
                                         ---------------------------------------
                                          Name:  Phillip D. Wright
                                          Title: President




























                      [SIGNATURE PAGE TO AMENDMENT NO. 1]
<PAGE>


                                     LEHMAN COMMERCIAL PAPER INC., as
                                         Administrative Agent and a Lender



                                      By: /s/ Francis Chang
                                         ---------------------------------------
                                          Name:  Francis Chang
                                          Title: Authorized Signatory




























                      [SIGNATURE PAGE TO AMENDMENT NO. 1]
<PAGE>



                                     NATIONAL INDEMNITY COMPANY, as
                                         a Lender



                                     By: /s/ Marc Hamburg
                                         ---------------------------------------
                                          Name:  Marc Hamburg
                                          Title: Treasurer




























                      [SIGNATURE PAGE TO AMENDMENT NO. 1]
<PAGE>

                                   SCHEDULE I

                              HEDGING DOCUMENTATION

Corporate Guarantee

                  1. Amend the definition of "Obligations" in Section 1 of the
Corporate Guarantee, dated as of July 31, 2002 (the "Guarantee"), by the Parent
in favor of the Borrower to the following: "all present and future obligations
and liabilities of all kinds of the Company to the Counterparty, whether due or
to become due, secured or unsecured, absolute or contingent, joint or several,
pursuant to the EMT Hedge Agreements (as defined in Schedule 6.15(a) to the
Credit Agreement, dated as of July 31, 2002, by and among Guarantor, Williams
Production Holdings LLC, a Delaware limited liability company, Counterparty, the
lenders from time to time party thereto, Lehman Brothers, Inc., as advisor, lead
arranger and book manager, Lehman Commercial Paper Inc., as Syndication Agent,
and Lehman Commercial Paper Inc., as Administrative Agent), as amended from time
to time (the "Obligations")".

                  2. Delete the July 25, 2003 termination date and the Parent's
right terminate the Guarantee upon thirty days prior written notice in Section
1(ii) of the Guarantee.

                  3. In Section 2 of the Guarantee, delete the last sentence
thereof where the Guarantor reserves the right to raise the defenses of Williams
Energy Marketing & Trading Company ("EMT").

                  4. Add to the Guarantee a representation that the Guarantee
has been duly authorized, executed and delivered by the Parent and is a legal,
valid and enforceable obligation of the Parent.

                  5. Add a provision that the Guarantee shall remain in full
force and effect or shall be reinstated (as the case may be) if at any time any
payment guaranteed thereunder, in whole or in part, is invalidated, rescinded or
must otherwise be returned by the Borrower as a result of being declared
fraudulent or preferential or upon the insolvency, bankruptcy or reorganization
of the EMT or the Parent or otherwise, all as though such payment had not been
made.

ISDA Schedule

                  6. "Cross Default" amount to be $60,000,000.

                  7. Add an objective standard of "materially weaker" with
respect to a "Credit Event Upon Merger" (i.e., rating downgrade of at least 1
level).

                  8. Delete the amendment to the "Automatic Early Termination"
provision in Part 1(f) of the ISDA Schedule.




                                      I-1
<PAGE>

                  9. Add as an Additional Event of Default in Part 1(i) of the
ISDA Schedule the following: "The termination of, or any default under, in each
case during the period any Transactions are outstanding, the Corporate
Guarantee, dated as of July 31, 2002, by The Williams Companies, Inc. in favor
of Williams Production RMT Company of Party B's obligations hereunder."

                  10. In Part 4(a), all notices and communications between the
parties should be copied to: Lehman Commercial Paper Inc., as Administrative
Agent, 745 Seventh Avenue, New York, New York 10019, Attention Francis Chang,
facsimile no. (212) 526-0242, telephone no. (212) 526-5390.

                  11. Add to Part 4(f) of the ISDA Schedule the following: "In
addition, the Corporate Guarantee, dated as of July 31, 2002, by The Williams
Companies, Inc. in favor of Williams Production RMT Company of Party B's
obligations hereunder shall be a Credit Support Document hereunder."

                  12. Add The Williams Companies, Inc. as a Credit Support
Provider in Part 4(g)(ii) of the ISDA Schedule.

                  13. In Part 5(a) of the ISDA Schedule, any transfer or other
assignment must be subject to the Administrative Agent's receipt of prompt
notice and prior approval (which approval shall not be unreasonably withheld).

                  14. In Part 5(a)(ii) of the ISDA Schedule, any transfer by
Party B must be accompanied by the Parent Guarantee and subject to the
restriction that no transfer shall be permitted if, as a result thereof, a
payment becomes subject to any deduction or withholding on account of any tax
which would not have arisen had such assignment or transfer not been effected.

                  15. In Part 5(b) of the ISDA Schedule, all "Confirmations"
must be subject to the Administrative Agent's receipt of prompt notice and prior
approval (which approval shall not be unreasonably withheld).

                  16. In Part 5(b) of the ISDA Schedule, delete the second to
last sentence regarding the two day notification period in its entirety.

                  17. Delete the right of set-off in Part 5(f) of the ISDA
Schedule.

                  18. In Part 6(b) of the ISDA Schedule, Party A should have the
right to assume the position of Calculation Agent after an Event of Default if
Party B is the defaulting party.

Credit Support Annex

                  19. In Paragraph 13(b)(iii) of Annex A, Paragraph 13 to the
ISDA Credit Support Annex dated as of July 29, 2002 (the "Annex") between the
Borrower and EMT, "Other Eligible Support" must be subject to the Administrative
Agent's prior approval (which approval shall not be unreasonably withheld).



                                      I-2
<PAGE>

                  20. In Paragraph 13(b)(iv)(C) of the Annex, add after the word
"Collateral" the following: "(as defined in the Credit Agreement, dated as of
July 31, 2002, by and among The Williams Companies, Inc., a Delaware
corporation, Williams Production Holdings LLC, a Delaware limited liability
company, Party A, the lenders from time to time party thereto, Lehman Brothers,
Inc., as advisor, lead arranger and book manager, Lehman Commercial Paper Inc.,
as Syndication Agent, and Lehman Commercial Paper Inc., as Administrative Agent,
as amended from time to time)".

                  21. Renumber Paragraph 13(b)(iv) (Special Provisions) of the
Annex as Paragraph 13(b)(v).

                  22. In renumbered Paragraph 13(b)(v) (Special Provisions) of
the Annex, amend the first "Transaction" to "Transactions".

                  23. In Paragraph 13(e) of the Annex, clarify that the consent
of the Secured Party is required to substitute collateral.

                  24. The Borrower shall execute and deliver to the
Administrative Agent by November 15, 2002 a Control Agreement and any other
documents necessary or desirable to enable the Administrative Agent (for the
benefit of the Lenders) to have a perfected security interest in and "control"
(within the meaning of the UCC) of the Posted Collateral (as defined in the
Annex).

                  25. In Paragraph 13(j)(ii) of the Annex, add the following:
"with a copy of such Letter of Credit to Lehman Commercial Paper Inc., as
Administrative Agent, 745 Seventh Avenue, New York, New York 10019, Attention
Francis Chang, facsimile no. (212) 526-0242, telephone no. (212) 526-5390".

                  26. Amend Paragraph 13(j)(iii)(A) of the Annex in its entirety
to read as follows:

            "Unless otherwise agreed in writing by the parties, each Letter of
            Credit shall be provided in accordance with the provisions of this
            Annex, and each Letter of Credit shall be maintained for the benefit
            of the Secured Party. The Pledgor shall renew or cause the renewal
            of each outstanding Letter of Credit delivered as Posted Collateral
            hereunder on a timely basis as provided in the relevant Letter of
            Credit; provided, that if either (i) the bank that issued any such
            outstanding Letter of Credit has indicated its intent not to renew
            such Letter of Credit (or provide a substitute Letter of Credit) at
            least thirty (30) Business Days prior to the expiration of the
            outstanding Letter of Credit or the Pledgor shall fail to renew such
            Letter of Credit, or (ii) a bank issuing a Letter of Credit shall
            fail to honor the Secured Party's properly documented request to
            draw on an outstanding Letter of Credit, the Pledgor shall provide
            for the benefit of the Secured Party: (x) a substitute Letter of
            Credit, that is issued by a bank acceptable to the Secured Party,
            other than the bank failing to honor the outstanding Letter of
            Credit; or (y) post Eligible Collateral, in each case within one
            Business Day after the Pledgor receives notice of such non-renewal
            or refusal to honor a draw, provided that, as a

                                      I-3
<PAGE>


            result of the Pledgor's failure to perform in accordance with (i) or
            (ii) above, the Delivery Amount applicable to the Pledgor equals or
            exceeds the Pledgor's Minimum Transfer Amount."

                  27. In Paragraph 13(j)(iii)(C)(1) of the Annex, add a
definition for "Qualified Institution," which definition shall include a minimum
credit rating of A-/A3.




                                      I-4
<PAGE>
                                                                       EXHIBIT A
                                    EXHIBIT A

                                                                  CONFORMED COPY
                      AS AMENDED BY AMENDMENT NO. 1 DATED AS OF OCTOBER 31, 2002

================================================================================

                                  $900,000,000


                                CREDIT AGREEMENT

                                      AMONG

                          THE WILLIAMS COMPANIES, INC.
                        WILLIAMS PRODUCTION HOLDINGS LLC

                        WILLIAMS PRODUCTION RMT COMPANY,

                                  AS BORROWER,


                               THE SEVERAL LENDERS
                        FROM TIME TO TIME PARTIES HERETO,


                              LEHMAN BROTHERS INC.,
                        AS LEAD ARRANGER AND BOOK MANAGER


                          LEHMAN COMMERCIAL PAPER INC.,
                              AS SYNDICATION AGENT


                                       AND


                          LEHMAN COMMERCIAL PAPER INC.,
                             AS ADMINISTRATIVE AGENT


                            DATED AS OF JULY 31, 2002



================================================================================


<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               Page

<S>               <C>                                                                                          <C>
SECTION 1 -           DEFINITIONS................................................................................1

         1.1      Defined Terms..................................................................................1

         1.2      Other Definitional Provisions.................................................................20

SECTION 2 -           AMOUNT AND TERMS OF COMMITMENTS...........................................................21

         2.1      Commitments...................................................................................21

         2.2      Procedure for Term Loan Borrowing.............................................................21

         2.3      Repayment of Term Loans.......................................................................21

         2.4      [Intentionally Omitted].......................................................................21

         2.5      [Intentionally Omitted].......................................................................21

         2.6      [Intentionally Omitted].......................................................................21

         2.7      [Intentionally Omitted].......................................................................21

         2.8      Repayment of Term Loans; Evidence of Indebtedness.............................................21

         2.9      Fees, Etc.....................................................................................22

         2.10     [Intentionally Omitted].......................................................................23

         2.11     Optional Prepayments..........................................................................23

         2.12     Mandatory Prepayments.........................................................................23

         2.13     [Intentionally Omitted].......................................................................24

         2.14     [Intentionally Omitted].......................................................................24

         2.15     Interest Rates and Payment Dates..............................................................24

         2.16     Computation of Interest and Fees..............................................................25

         2.17     Inability to Determine Interest Rate..........................................................26

         2.18     Pro Rata Treatment and Payments...............................................................26

         2.19     Requirements of Law...........................................................................27

         2.20     Taxes.........................................................................................28

         2.21     Indemnity.....................................................................................30

         2.22     Illegality....................................................................................30

         2.23     Change of Lending Office......................................................................31

SECTION 3 -           [INTENTIONALLY OMITTED]...................................................................31

SECTION 4 -           REPRESENTATIONS AND WARRANTIES............................................................31

         4.1      Financial Condition...........................................................................31

         4.2      No Change.....................................................................................32
</Table>




                                       i
<PAGE>


<Table>
<S>               <C>                                                                                          <C>
         4.3      Existence; Compliance with Law................................................................32

         4.4      Power; Authorization; Enforceable Obligations.................................................32

         4.5      No Legal Bar..................................................................................32

         4.6      No Material Litigation........................................................................33

         4.7      No Default....................................................................................33

         4.8      Ownership of Property; Liens..................................................................33

         4.9      Intellectual Property.........................................................................33

         4.10     Taxes.........................................................................................33

         4.11     Federal Regulations...........................................................................34

         4.12     Labor Matters.................................................................................34

         4.13     ERISA.........................................................................................34

         4.14     Investment Company Act; Other Regulations.....................................................35

         4.15     Subsidiaries..................................................................................35

         4.16     Use of Proceeds...............................................................................35

         4.17     Environmental Matters.........................................................................35

         4.18     Accuracy of Information, Etc..................................................................36

         4.19     Security Documents............................................................................36

         4.20     Solvency......................................................................................37

         4.21     Net Indebtedness; Specified Non-Recourse Debt.................................................37

         4.22     Insurance.....................................................................................38

         4.23     [Intentionally Omitted].......................................................................38

         4.24     Hydrocarbon Interests.........................................................................38

         4.25     Permits.......................................................................................38

         4.26     Lease Payments................................................................................38

SECTION 5 -           CONDITIONS PRECEDENT......................................................................39

         5.1      Conditions to Initial Extension of Credit.....................................................39

SECTION 6 -           AFFIRMATIVE COVENANTS.....................................................................43

         6.1      Financial Statements..........................................................................43

         6.2      Certificates; Other Information...............................................................43

         6.3      Payment of Obligations........................................................................46

         6.4      Conduct of Business and Maintenance of Existence, Etc.........................................47

         6.5      Maintenance of Property; Leases; Insurance....................................................47

         6.6      Inspection of Property; Books and Records; Discussions........................................48

         6.7      Notices.......................................................................................49
</Table>


                                       ii
<PAGE>


<Table>
<S>               <C>                                                                                          <C>
         6.8      Environmental Laws............................................................................49

         6.9      Parent Liquidity Event........................................................................50

         6.10     Additional Collateral, Guarantors, Etc........................................................50

         6.11     [Intentionally Omitted].......................................................................50

         6.12     Use of Proceeds...............................................................................51

         6.13     [Intentionally Omitted].......................................................................51

         6.14     Further Assurances............................................................................51

         6.15     Other Provisions Relating to Holdings and the Borrower........................................51

         6.16     Capital Expenditures..........................................................................51

SECTION 7 -           NEGATIVE COVENANTS........................................................................51

         7.1      Financial Condition Covenants.................................................................51

         7.2      Limitation on Indebtedness....................................................................52

         7.3      Limitation on Liens...........................................................................52

         7.4      Limitation on Fundamental Changes.............................................................54

         7.5      Limitation on Disposition of Property.........................................................55

         7.6      Limitation on Restricted Payments.............................................................56

         7.7      Limitation on Capital Expenditures............................................................56

         7.8      Limitation on Investments.....................................................................57

         7.9      Limitation on Optional Payments and Modifications of Indebtedness.............................57

         7.10     Limitation on Transactions with Affiliates....................................................57

         7.11     Limitation on Sales and Leasebacks............................................................58

         7.12     Limitation on Changes in Fiscal Periods.......................................................58

         7.13     Limitation on Negative Pledge Clauses.........................................................58

         7.14     Limitation on Restrictions on Subsidiary Distributions, Etc...................................59

         7.15     Business Activities...........................................................................59

         7.16     Intercompany Indebtedness.....................................................................59

         7.17     Subsidiaries..................................................................................60

         7.18     Limitation on Hedge Agreements and Firm Transportation Contracts..............................60

         7.19     Partnerships and Joint Ventures...............................................................60

         7.20     Holdings Negative Pledge; Limitation on Assets................................................60

SECTION 8 -           EVENTS OF DEFAULT.........................................................................60

SECTION 9 -           THE AGENTS; THE ARRANGER..................................................................63

         9.1      Appointment...................................................................................63

         9.2      Delegation of Duties..........................................................................64
</Table>

                                       iii
<PAGE>


<Table>
<S>               <C>                                                                                          <C>
         9.3      Exculpatory Provisions........................................................................64

         9.4      Reliance by Agents............................................................................64

         9.5      Notice of Default.............................................................................65

         9.6      Non-Reliance on Agents and Other Lenders......................................................65

         9.7      Indemnification...............................................................................66

         9.8      Arranger and Agents in Their Individual Capacities............................................66

         9.9      Successor Agents..............................................................................66

         9.10     Authorization to Release Liens................................................................67

         9.11     The Arranger..................................................................................67

SECTION 10 -          MISCELLANEOUS.............................................................................67

         10.1     Amendments and Waivers........................................................................67

         10.2     Notices.......................................................................................68

         10.3     No Waiver; Cumulative Remedies................................................................70

         10.4     Survival of Representations and Warranties....................................................70

         10.5     Payment of Expenses...........................................................................70

         10.6     Successors and Assigns; Participations and Assignments........................................72

         10.7     Adjustments; Set-off..........................................................................74

         10.8     Counterparts..................................................................................75

         10.9     Severability..................................................................................75

         10.10    Integration...................................................................................75

         10.11    GOVERNING LAW.................................................................................75

         10.12    Submission To Jurisdiction; Waivers...........................................................75

         10.13    Suretyship Waivers............................................................................76

         10.14    Acknowledgments...............................................................................76

         10.15    Confidentiality...............................................................................76

         10.16    Release of Collateral and Guarantee Obligations...............................................77

         10.17    Accounting Changes............................................................................77

         10.18    Delivery of Lender Addenda....................................................................77

         10.19    Construction..................................................................................77

         10.20    WAIVERS OF JURY TRIAL.........................................................................78
</Table>


                                       iv
<PAGE>





<Table>
<S>                                     <C>
SCHEDULES:
1.1(a)                                  Gas Gathering Systems
1.1(b)                                  Mortgaged Property
1.1(c)                                  Historical Hedging Addbacks
1.1(d)                                  Specified Non-Recourse Debt
2.9(b)                                  Net Indebtedness
4.1(a)                                  Contingent Liabilities, Etc.
4.1(b)                                  Dispositions
4.4                                     Consents, Authorizations, Filings and Notices
4.6                                     Material Litigation
4.13                                    ERISA
4.15                                    Subsidiaries
4.19(a)-1                               UCC Filing Jurisdictions - Collateral
4.19(a)-2                               UCC Financing Statements to Remain on File
4.19(b)                                 Mortgage Filings Jurisdictions
4.19(c)                                 UCC Filing Jurisdictions - Intellectual Property Collateral
4.21                                    Specified Non-Recourse Debt Documents
4.24                                    Hydrocarbon Interests
4.25(b)                                 Consents
6.15(a)                                 Hedging Arrangements
7.2(d)                                  Existing Indebtedness
7.3(b)(x)                               Existing Liens
7.5(g)(i)                               Certain Dispositions
8(g)(i)                                 Required Payments to Employee Welfare Benefit Plans
8(g)(ii)                                Required Payments to Multiemployer Plans

EXHIBITS:
A                                       Form of Guarantee and Collateral Agreement
B                                       Form of Compliance Certificate
C                                       Form of Closing Certificate
D                                       Form of Mortgage
E                                       Form of Assignment and Acceptance
F-1                                     Form of Legal Opinion of Skadden, Arps, Slate, Meagher &
                                          Flom LLP
F-2                                     Form of Legal Opinion of General Counsel
F-3                                     Form of Opinion of Davis, Graham & Stubbs LLP
G                                       Form of Term Note
H                                       Form of Exemption Certificate
I                                       Form of Lender Addendum
J                                       Form of Solvency Certificate
K                                       Form of Notice of Borrowing
L                                       Form of No Parent Liquidity Event Certificate
</Table>



                                        v
<PAGE>

                  CREDIT AGREEMENT, dated as of July 31, 2002, among The
Williams Companies, Inc., a Delaware corporation ("Parent"), Williams Production
Holdings LLC, a Delaware limited liability company ("Holdings"), Williams
Production RMT Company, a Delaware corporation (the "Borrower"), the several
banks and other financial institutions or entities from time to time parties to
this Agreement as lenders (the "Lenders"), LEHMAN BROTHERS INC., as advisor,
lead arranger and book manager (in such capacity, the "Arranger"), LEHMAN
COMMERCIAL PAPER INC., as syndication agent (in such capacity, the "Syndication
Agent"), and LEHMAN COMMERCIAL PAPER INC., as administrative agent (in such
capacity, the "Administrative Agent").

                                  WITNESSETH:

                  WHEREAS, the Borrower intends to provide Holdings with the net
proceeds of the Term Loans (as defined below) in the form of a loan to Holdings
and Holdings will provide Parent with an amount equal to such loan from the
Borrower in the form of a loan to Parent;

                  WHEREAS, the Lenders are willing to make such Terms Loans
available upon and subject to the terms and conditions hereinafter set forth;

                  NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:

                            SECTION 1 - DEFINITIONS

1.1      Defined Terms.

                  As used in this Agreement, the terms listed in this Section
1.1 shall have the respective meanings set forth in this Section 1.1.

                  "Administrative Agent": as defined in the preamble hereto.

                  "Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of a
Person means the power, directly or indirectly, either to (a) vote 10% or more
of the securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

                  "Affiliated Fund": means, with respect to any Lender that is a
fund that invests (in whole or in part) in commercial loans, any other fund that
invests (in whole or in part) in commercial loans and is managed by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.

                  "Agents": the collective reference to the Syndication Agent
and the Administrative Agent.


<PAGE>

                  "Aggregate Exposure": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the aggregate then unpaid
principal amount of such Lender's Term Loans.

                  "Agreement": this Credit Agreement, as amended, supplemented,
replaced or otherwise modified from time to time in accordance with this
Agreement.

                  "Approved Engineer": any independent engineer recognized in
the U.S. oil and gas loan syndication market and reasonably satisfactory to the
Administrative Agent.

                  "Arranger": as defined in the preamble hereto.

                  "Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clauses
(a), (b), (c), (d), (f) or (g) of Section 7.5) by Holdings, the Borrower or any
of the Borrower's Subsidiaries other than a Company Sale.

                  "Assignee": as defined in Section 10.6(c).

                  "Assignment and Acceptance": as defined in Section 10.6(c).

                  "Assignor": as defined in Section 10.6(c).

                  "Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%.

                  "Base Rate Loans": Term Loans for which the applicable rate of
interest is based upon the Base Rate.

                  "Benefited Lender": as defined in Section 10.7(a).

                  "Bison Entities": means, collectively, Bison Royalty LLC,
Piceance Production Holdings LLC and Rulison Production Company LLC.

                  "Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).

                  "Borrower": as defined in the preamble hereto.

                  "Borrower Liquidity Reserve": the sum of (a) cash and Cash
Equivalents owned by the Borrower (excluding (i) Net Cash Proceeds from any
Asset Sales, free of Liens, which shall be applied as a mandatory prepayment of
the Term Loans pursuant to Section 2.12 and (ii) any cash or Cash Equivalents
posted as cash collateral for, or the amount of any letter of credit issued in
support of, Required Hedge Agreements) in an amount up to $65,000,000 in the
possession of the Borrower plus (b) an irrevocable standby letter of credit
naming the Administrative Agent as beneficiary, issued by a financial
institution reasonably acceptable to



                                       2
<PAGE>

the Administrative Agent, equal to the difference, if any, between (x)
$65,000,000 and (y) the aggregate cash and Cash Equivalents referred to in the
foregoing clause (a).

                  "Business Day": (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to close and
(b) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (a) and which is also a day for trading by and
between banks in Dollar deposits in the interbank eurodollar market.

                  "Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person and its Subsidiaries
for the acquisition or leasing (pursuant to a capital lease) of fixed or capital
assets or additions to equipment (including replacements, capitalized repairs
and improvements during such period) which should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.

                  "Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.

                  "Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.

                  "Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1
by Moody's Investors Service, Inc. ("Moody's"), or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by



                                       3
<PAGE>

Moody's; (f) securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition; or
(g) shares of money market mutual or similar funds which invest exclusively in
assets satisfying the requirements of clauses (a) through (f) of this
definition.

                  "Closing Date": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date shall be not later
than July 31, 2002.

                  "Code": the Internal Revenue Code of 1986, as amended from
time to time.

                  "Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.

                  "Commitment": as to any Lender, the obligation of such Lender,
to make a Term Loan to the Borrower hereunder in a principal amount not to
exceed the amount set forth under the heading "Commitment" opposite such
Lender's name on Schedule 1 to the Lender Addendum delivered by such Lender, or,
as the case may be, in the Assignment and Acceptance pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof; provided that the original aggregate amount of the
Commitments is $900,000,000.

                  "Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.

                  "Company Sale": the Disposition to a third party (other than
to Holdings or to an Affiliate thereof) of at least a majority of the fair
market value of the Property of the Borrower and its Subsidiaries, whether by
asset sale, by sale of at least a majority of the Capital Stock of the Borrower,
directly or indirectly, by merger, consolidation, amalgamation or otherwise.

                  "Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.

                  "Consolidated EBITDA": of any Person for any period,
Consolidated Net Income of such Person and its Subsidiaries for such period
plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) consolidated interest expense calculated in accordance with
GAAP of such Person and its Subsidiaries, amortization or write-off of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including, in the case of the Borrower,
the Term Loans), (c) depreciation and amortization expense, (d) amortization of
intangibles (including, but not limited to, goodwill) and organization costs,
(e) any extraordinary, unusual or non-recurring expenses or losses (including,
whether or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets outside of
the ordinary course of business), (f) regardless of whether such amount is
reflected as a charge in the statement of such Consolidated Net Income but only
to the extent that such amount is not reflected in



                                       4
<PAGE>

Consolidated Net Income, cash received by such Person in respect of hedge
agreements entered into by the Parent or its Affiliates hedging the oil or gas
production of the Borrower (for periods prior to the Closing Date such amounts
are set forth on Schedule 1.1 (c)), (g) non-cash corporate overhead allocated to
the Borrower in amounts consistent with past practice, (h) any other non-cash
charges and (i) any impairment of goodwill or property asset carrying value, and
minus, to the extent included in the statement of such Consolidated Net Income
for such period, the sum of (w) interest income (except to the extent deducted
in determining Consolidated Interest Expense), (x) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of
business), (y) to the extent that such amount is not reflected in Consolidated
Net Income, cash payments by such Person in respect of hedge agreements entered
into by the Parent or its Affiliates hedging the oil or gas production of the
Borrower (in amounts set forth on Schedule 1.1(c) for periods prior to the
Closing Date) and (z) any other non-cash income, all as determined on a
consolidated basis.

                  "Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) the difference of (i) the sum of (A) Consolidated EBITDA of the
Borrower and its Subsidiaries for such period, plus (B) equity capital
contributed to the Borrower or any of its Subsidiaries by any Person except in
the case of the Borrower's Subsidiaries, the Borrower, minus (ii) the aggregate
amount actually paid by the Borrower and its Subsidiaries in cash during such
period on account of Capital Expenditures to (b) Consolidated Fixed Charges for
such period.

                  "Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense of the Borrower and its
Subsidiaries for such period and (b) provision for cash income taxes made by the
Borrower or any of its Subsidiaries on a consolidated basis in respect of such
period.

                  "Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA of the Borrower and its Subsidiaries for such
period to (b) Consolidated Interest Expense of the Borrower and its Subsidiaries
for such period.

                  "Consolidated Interest Expense": of any Person for any period,
total cash interest expense (including that attributable to Capital Lease
Obligations) of such Person and its Subsidiaries for such period with respect to
all outstanding Indebtedness of such Person and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and charges owed
by such Person with respect to letters of credit and bankers' acceptance
financing and net costs of such Person under Hedge Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP, and excluding (but not deducting from such amount of total
cash interest expense) any fees paid pursuant to Section 2.9(a), any deferred
set-up fees paid pursuant to Section 2.9(b), any interest capitalized pursuant
to Section 2.15(c) and (e), and the portion of any Make-Whole Amount paid during
such period).

                  "Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; provided
that in calculating Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for any Period, there shall be excluded (a) the income (or deficit)
of any Person accrued prior to the date it becomes a Subsidiary of the



                                       5
<PAGE>

Borrower or is merged into or consolidated with the Borrower or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary
of the Borrower) in which the Borrower or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by the Borrower or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of the
Borrower (other than any of the Bison Entities) to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any Contractual Obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary.

                  "Continuing Directors": as to any Person, the directors of
such Person on the Closing Date, after giving effect to the transactions
contemplated hereby, and each other director, if, in each case, such other
director's nomination for election to the board of directors of such Person is
recommended by at least 66-2/3% of the then Continuing Directors or such other
director receives the vote of each of the shareholders of such Person on the
Closing Date in his or her election by the shareholders of such Person.

                  "Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.

                  "Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.

                  "Derivatives Counterparty": as defined in Section 7.6.

                  "Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof; and the terms "Dispose" and "Disposed of" shall have correlative
meanings.

                  "Disqualified Stock": any Capital Stock or other ownership or
profit interest of any Loan Party that any Loan Party is or, upon the passage of
time or the occurrence of any event, may become obligated to redeem, purchase,
retire, defease or otherwise make any payment in respect of in consideration
other than Capital Stock (other than Disqualified Stock).

                  "Dollars" and "$": dollars in lawful currency of the United
States of America.

                  "Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States.

                  "EMT": Williams Energy Marketing & Trading Company, a Delaware
corporation.

                  "Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirements (including, without limitation, common law) of any
international authority, foreign government, the United States, or any state,
local, municipal or other Governmental Authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human



                                       6
<PAGE>

health, or employee health and safety, as has been, is now, or may at any time
hereafter be, in effect.

                  "Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and any other authorization
required under any Environmental Law.

                  "ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.

                  "Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve requirements without
benefit or credit for proration, exceptions or offsets which may be available
from time to time to any Lender under Regulation D.

                  "Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the British Bankers Association Telerate screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest Period.
In the event that such rate does not appear on Page 3750 of the British Bankers
Association Telerate screen (or otherwise on such screen), the "Eurodollar Base
Rate" for purposes of this definition shall be determined by reference to such
other comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent.

                  "Eurodollar Loans": Term Loans the rate of interest applicable
to which is based upon the Eurodollar Rate.

                  "Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the nearest
1/16th of 1%):

                              Eurodollar Base Rate
                       ---------------------------------

                    1.00 - Eurocurrency Reserve Requirements

                  "Event of Default": any of the events specified in Section 8;
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.

                  "Facility": the Commitments and the Term Loans made
thereunder.

                  "Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by



                                       7
<PAGE>

federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.

                  "Fee Letter": as defined in Section 2.9(a).

                  "Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the Borrower and the
Lenders.

                  "GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time, except that for purposes of
Section 7.1, GAAP shall be determined on the basis of such principles in effect
on the date hereof and consistent with those used in the preparation of the most
recent financial statements delivered pursuant to Section 4.1(b).

                  "GE Equipment": the Equipment (as defined in the UCC as from
time to time in effect in the State of New York) purchased or constructed with
the proceeds of the GE Loan.

                  "GE Loan": the loan made to the Borrower by General Electric
Capital Corporation pursuant to the Interim Loan and Security Agreement, dated
as of June 16, 2002, in an aggregate principal amount not to exceed $17,000,000.

                  "Gas Gathering Systems": the gas plant and those certain gas
gathering systems consisting of all equipment, assets, rights-of-way, surface
leases, contracts and related assets more particularly described on Schedule
1.1(a) attached hereto.

                  "Governing Documents": collectively, as to any Person, the
articles or certificate of incorporation and bylaws, any shareholders agreement,
certificate of formation, limited liability company agreement, partnership
agreement or other formation or constituent documents of such Person.

                  "Governmental Authority": 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.

                  "Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by Parent, Holdings, the
Borrower and each Subsidiary Guarantor, substantially in the form of Exhibit A,
as the same may be amended, supplemented, replaced or otherwise modified from
time to time in accordance with this Agreement.

                  "Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit) to induce
the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or



                                       8
<PAGE>

not contingent, (i) to purchase any such primary obligation or any Property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
Property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.

                  "Guarantors": the collective reference to Parent, Holdings and
the Subsidiary Guarantors.

                  "Hedge Agreements": (a) all interest rate swaps, caps or
collar agreements or similar arrangements entered into by the Borrower or any of
its Subsidiaries providing for protection against fluctuations in interest rates
or currency exchange rates or the exchange of nominal interest obligations,
either generally or under specific contingencies and (b) all hedging agreements
entered into by the Borrower or any of its Subsidiaries in connection with the
hedging of commodity prices, including basis (transportation) hedges.

                  "Holdings": as defined in the preamble hereto.

                  "Hydrocarbons": oil, gas, casing head gas, condensate,
distillate, liquid hydrocarbons, gaseous hydrocarbons, all products refined,
separated, settled and dehydrated therefrom and all products refined therefrom,
including, without limitation, kerosene, liquefied petroleum gas, refined
lubricating oils, diesel fuel, drip gasoline, natural gasoline, helium, sulfur
and all other minerals.

                  "Hydrocarbon Interests": all rights, titles, interests and
estates now owned or hereafter acquired by the Borrower or any of its
Subsidiaries in any and all oil, gas and other liquid or gaseous hydrocarbon
properties and interests, including without limitation, mineral fee or lease
interests, production sharing agreements, concession agreements, license
agreements, service agreements, risk service agreements or similar Hydrocarbon
interests granted by an appropriate Governmental Authority, farmout, overriding
royalty and royalty interests, net profit interests, oil payments, production
payment interests and similar interests in Hydrocarbons, including any reserved
or residual interests of whatever nature.

                  "Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the



                                       9
<PAGE>

deferred purchase price of Property or services (other than trade payables
incurred in the ordinary course of such Person's business), (c) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to Property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
Property), (e) all Capital Lease Obligations or Synthetic Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any Capital Stock of such Person, (h) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (g) above, (i) all obligations of the kind
referred to in clauses (a) through (h) above secured by (or for which the holder
of such obligation has an existing right, contingent or otherwise, to be secured
by) any Lien on Property (including, without limitation, accounts and contract
rights) owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation, and (j) for the purposes of Section
8(e) only, all obligations of such Person in respect of Hedge Agreements.

                  "Indemnified Liabilities": as defined in Section 10.5.

                  "Indemnitee": as defined in Section 10.5.

                  "Initial Title Opinions": as defined in Section 6.2(m).

                  "Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.

                  "Insolvent": pertaining to a condition of Insolvency.

                  "Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States, state, multinational or foreign laws or otherwise,
including, without limitation, copyrights, patents, trademarks, service-marks,
technology, know-how and processes, recipes, formulas, trade secrets, or
licenses (under which the applicable Person is licensor or licensee) relating to
any of the foregoing and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.

                  "Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December to occur while such Term
Loan is outstanding, (b) as to any Eurodollar Loan, the last day of the relevant
Interest Period and (c) as to any Term Loan, the date of any repayment under
Section 2.11 or 2.12 or upon the Maturity Date.

                  "Interest Period": as to any Eurodollar Loan, (a) the
three-month period commencing on the Closing Date; and (b) thereafter, each
period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending three months thereafter; provided
that all of the foregoing provisions relating to Interest Periods are subject to
the following:




                                       10
<PAGE>

                  (i) if any Interest Period would otherwise end on a day that
                  is not a Business Day, such Interest Period shall be extended
                  to the next succeeding Business Day unless the result of such
                  extension would be to carry such Interest Period into another
                  calendar month in which event such Interest Period shall end
                  on the immediately preceding Business Day;

                  (ii) any Interest Period that would otherwise extend beyond
                  the date final payment is due on the Term Loans shall end on
                  the date final payment is due; and

                  (iii) any Interest Period that begins on the last Business Day
                  of a calendar month (or on a day for which there is no
                  numerically corresponding day in the calendar month at the end
                  of such Interest Period) shall end on the last Business Day of
                  a calendar month.

                  "Investments": as defined in Section 7.8.

                  "Lehman Entity": any of Lehman Commercial Paper Inc. or any of
its Affiliates (including, without limitation, Syndicated Loan Funding Trust).

                  "Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit I, to be executed and
delivered by such Lender on the Closing Date as provided in Section 10.18.

                  "Lenders": as defined in the preamble hereto.

                  "Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).

                  "Loan Documents": this Agreement, the Security Documents, the
Fee Letter, the Term Notes (if any), and all documents, instruments, agreements,
certificates and notices at any time executed and/or delivered to the
Administrative Agent, the Syndication Agent, the Arranger, or any Lender in
connection herewith or therewith.

                  "Loan Parties": Holdings, the Borrower and each Subsidiary of
the Borrower that is a party to a Loan Document (including pursuant to Section
6.10).

                  "Make-Whole Amount": in the event that the Term Loans are
repaid in whole or in part prior to the Maturity Date, an amount in cash equal
to the amount of interest that would have been paid, accrued or capitalized on
such Term Loans or portions thereof then being repaid through and including the
Maturity Date at the rate specified in this Agreement, which amount shall be
discounted at a rate per annum equal to (x) the yield on one-year U.S. Treasury
notes having a remaining maturity as close as is practical to the remaining term
of the Terms Loans (but for the optional prepayment, mandatory prepayment,
Parent Liquidity Event or acceleration, as the case may be), as determined by
the Administrative Agent plus (y) 0.50%; provided that the



                                       11
<PAGE>

portion of interest payable based on the Eurodollar Rate plus 4.0% per annum
shall be based on a fixed interest rate equal to the Eurodollar Rate as of the
repayment date plus 4.0% per annum.

                  "Material Adverse Effect": a material adverse effect on or
affecting (a) the business, assets, liabilities, property, condition (financial
or otherwise), results of operations, prospects, value or management of Parent
or the Loan Parties taken as a whole, (b) the validity or enforceability of this
Agreement or any of the other Loan Documents, (c) the validity, enforceability
or priority of the Liens purported to be created by the Security Documents or
(d) the rights or remedies of any Secured Party hereunder or under any of the
other Loan Documents; provided that any event that otherwise would be a Material
Adverse Effect shall not be deemed to be a Material Adverse Effect if disclosed
by Parent or any Loan Party in filings with the Securities and Exchange
Commission prior to the Closing Date.

                  "Material Environmental Amount": an amount or amounts payable
by the Borrower and/or any of its Subsidiaries, in the aggregate in excess of
$1,000,000, for: (a) costs to comply with any Environmental Law; (b) costs of
any investigation, and any remediation, of any Materials of Environmental
Concern; and (c) compensatory damages (including, without limitation damages to
natural resources), punitive damages, fines, and penalties pursuant to any
Environmental Law.

                  "Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.

                  "Maturity Date": the date that is 360 days after the Closing
Date.

                  "Maximum Lawful Rate": as defined in Section 2.15(f).

                  "Mortgaged Properties": the real properties and leasehold
estates listed on Schedule 1.1(b), as to which the Administrative Agent for the
benefit of the Secured Parties shall be granted a Lien pursuant to the
Mortgages.

                  "Mortgages": each of the mortgages, deeds of trust and deeds
to secure debt made by any Loan Party in favor of, or for the benefit of, the
Administrative Agent for the benefit of the Secured Parties, substantially in
the form of Exhibit D (with such changes thereto as shall be advisable under the
law of the jurisdiction in which such mortgage or deed of trust is to be
recorded), as the same may be amended, supplemented, replaced or otherwise
modified from time to time in accordance with this Agreement.

                  "Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 3(37) or 4001(a)(3) of ERISA.

                  "Net Cash Proceeds": in connection with any Asset Sale
permitted by Section 7.5(e), the proceeds thereof in the form of cash or Cash
Equivalents of such Asset Sale, net of reasonable and customary attorneys' fees,
accountants' fees, investment banking fees, amounts



                                       12
<PAGE>

required to be applied to the repayment of Indebtedness secured by a Lien
expressly permitted hereunder on any asset which is the subject of such Asset
Sale (other than any Lien pursuant to a Security Document) and other reasonable
and customary fees and expenses, in each case, to the extent actually incurred
in connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available tax credits
or deductions and any tax sharing arrangements).

                  "Non-Excluded Taxes": as defined in Section 2.20(a).

                  "Non-U.S. Lender": as defined in Section 2.20(f).

                  "Notice of Borrowing": a certificate duly executed by a
Responsible Officer of the Borrower substantially in the form of Exhibit K.

                  "Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the Term
Loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Parent (with respect to its Obligations under the Guarantee and
Collateral Agreement and the transactions contemplated thereby only) or any Loan
Party, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding) the Term Loans and all other obligations and
liabilities of the Loan Parties to the Arranger, to any Agent or to any Lender,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees (including any deferred
set-up fees), Make-Whole Amounts, indemnities, costs, expenses (including,
without limitation, all fees, charges and disbursements of counsel to the
Arranger, to any Agent or to any Lender that are required to be paid by any Loan
Party pursuant hereto or to any other Loan Document) or otherwise.

                  "Oil and Gas Business" (a) the acquisition, exploration,
exploitation, development, operation, management and disposition of interests in
Hydrocarbon Interests and Hydrocarbons; (b) gathering, marketing, treating,
processing, storage, selling and transporting of any production from such
interests or Hydrocarbon Interests, including, without limitation, the marketing
of Hydrocarbons obtained from unrelated Persons; (c) any business relating to or
arising from exploration for or development, production, treatment, processing,
storage, transportation or marketing of oil, gas and other minerals and products
produced in association therewith; and (d) any activity that is ancillary or
necessary or desirable to facilitate the activities described in clauses (a)
through (c) of this definition.

                  "Oil and Gas Properties" (a) Hydrocarbon Interests; (b) the
Property now or hereafter pooled or unitized with Hydrocarbon Interests; (a) all
presently existing or future unitization, pooling agreements and declarations of
pooled units and the units created thereby (including, without limitation, all
units created under orders, regulations and rules of any Governmental Authority)
which may affect all or any portion of the Hydrocarbon Interests; (d) all
operating agreements, contracts and other agreements which relate to any of the
Hydrocarbon Interests or the production, sale, purchase, exchange or processing
of Hydrocarbons from or



                                       13
<PAGE>

attributable to such Hydrocarbon Interest; (e) all Hydrocarbons in and under and
which may be produced and saved or attributable to the Hydrocarbon Interests,
the lands covered thereby and all oil in tanks and all rents, issues, profits,
proceeds, products, revenues and other income from or attributable to the
Hydrocarbon Interests; and (f) all tenements, hereditaments, appurtenances and
Property in any manner appertaining, belonging, affixed or incidental to the
Hydrocarbon Interests, Property, Gas Gathering System, rights, titles, interests
and estates described or referred to above, including, without limitation, any
and all Property, now owned or hereinafter acquired and situated upon, used,
held for use or useful in connection with the operating, working or development
of any of such Hydrocarbon Interests or Property (excluding drilling rigs,
automotive equipment or other personal property which may be on such premises
for the purpose of drilling a well or for other similar temporary uses) and
including any and all oil wells, gas wells, injection wells or other wells,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, tanks and tank
batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
meters, apparatus, equipment, appliances, tools, implements, cables, wires,
towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions
and attachments to any and all of the foregoing.

                  "Original Lenders": Lehman Commercial Paper Inc. and National
Indemnity Company.

                  "Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.

                  "Parent": as defined in the preamble hereto.

                  "Parent Liquidity Amount": (a) at any time from the Closing
Date through the 180th day thereafter, $600,000,000; (b) at any time thereafter
through and including the Maturity Date, $750,000,000; and (c) at any time after
the Maturity Date, $200,000,000.

                  "Parent Liquidity Event": any time (a) when the sum of (i)
Parent's actual cash and Cash Equivalents on hand and (ii) the unused borrowing
capacity of Parent available to it under its credit facilities is less than the
Parent Liquidity Amount in the aggregate, (b) Parent's projected forward
liquidity determined as of the Closing Date (determined as described in the
succeeding sentence) at any time prior to the Maturity Date is less than the
Parent Liquidity Amount, (c) Parent's projected liquidity at the Maturity Date
after giving effect to the prepayment or repayment of the Term Loans in
accordance with this Agreement is less than the Parent Liquidity Amount set
forth in clause (c) of such definition, (d) there shall occur and be continuing
a payment default (beyond any grace period) by Parent or any of its Subsidiaries
(other than Holdings or any of its Subsidiaries) with respect to one or more
Indebtedness having a principal amount outstanding in excess of $20,000,000 in
the aggregate or (e) there shall have occurred and be continuing any event of
default under one or more Indebtedness of Parent or any of its Subsidiaries
(other than Holdings or any of its Subsidiaries) that, with notice or the
passage of time or both, would permit the holders thereof to accelerate such
Indebtedness and any other Indebtedness of Parent or any of its Subsidiaries
(other than Holdings or any of its Subsidiaries)



                                       14
<PAGE>

that may be so accelerated and has an aggregate principal amount outstanding in
excess of $20,000,000 in the aggregate; provided, however, that for the purposes
of clauses (d) and (e) hereof, Indebtedness shall be deemed to exclude Specified
Non-Recourse Debt. In determining Parent's forward liquidity, Parent may take
into account asset sales or other liquidity events projected as of the Closing
Date, if, but only if, (i) Parent shall have initiated a Disposition process
related to such liquidity event at least six months prior to such Disposition,
(ii) such process shall be evidenced by a contract for Disposition from no later
than 60 days prior to its scheduled Disposition date through such scheduled
Disposition date, and (iii) shall be satisfactory to the Original Lenders and
determined by them to be reasonably likely to result in the consummation of such
proposed Disposition or liquidity event (at the net proceeds reflected in the
projection) prior to such time as the Parent Liquidity Event (at such price)
shall occur.

                  "Participant": as defined in Section 10.6(b).

                  "Payment Office": the office of the Administrative Agent
specified in Section 10.2 or as otherwise specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and the
Lenders.

                  "PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).

                  "Permits": the collective reference to (i) Environmental
Permits, and (ii) any and all other franchises, licenses, leases, permits,
approvals, notifications, certifications, registrations, authorizations,
exemptions, qualifications, easements, rights of way, Liens and other rights,
privileges and approvals required under any Requirement of Law.

                  "Permitted Liens": the collective reference to (i) in the case
of Collateral other than Pledged Stock, Liens permitted by Section 7.3 and (ii)
in the case of Collateral consisting of Pledged Stock, non-consensual Liens
permitted by Section 7.3 to the extent arising by operation of law.

                  "Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

                  "Plan": at a particular time, any employee benefit plan that
is covered by ERISA and which the Borrower or any Commonly Controlled Entity
maintains, administers, contributes to or is required to contribute to or under
which the Borrower or any Commonly Controlled Entity could incur any liability.

                  "Pledged Stock": as defined in the Guarantee and Collateral
Agreement.

                  "PPH": Piceance Production Holdings LLC, a Delaware limited
liability company.

                  "PPH Company Agreement": the Amended and Restated Limited
Liability Company Agreement of Piceance Production Holdings LLC dated as of
December 31, 2001 among the Borrower, as the Class A Member and the Managing
Member, Plowshare Investors



                                       15
<PAGE>

LLC, a Delaware limited liability company, as the Class B Preferred Member, and
PPH, as the same may from time to time be amended, amended and restated,
supplemented or otherwise modified.

                  "Prime Rate": the prime lending rate as set forth on the
British Banking Association Telerate Page 5 (or such other comparable page as
may, in the opinion of the Administrative Agent, replace such page for purpose
of displaying such rate), as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually available. Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.

                  "Pro Forma Balance Sheet": as defined in Section 4.1(a).

                  "Prohibited Modification": any amendment, modification or
other change to any of the terms of any Indebtedness or Governing Documents of
the Bison Entities that would (a) restrict the Borrower's ability to (i) grant a
Lien on any Collateral (other than Excluded Collateral as defined in Guarantee
and Collateral Agreement) for the benefit of the Lenders, (ii) be merged or
consolidated with any other Person, (iii) consummate a Company Sale in any
manner or (iv) prepay, repay or otherwise perform under any Loan Document, (b)
increase the amount of Class B Priority Return (as defined in the PPH Company
Agreement) or fees, or change the types or categories of expenses, in each case,
payable to the Class B Preferred Member (as defined in the PPH Company
Agreement) other than increases consistent with increases in the amount of
interest and fees, and changes in the types or categories of expenses, in each
case, payable to the lenders under the Williams Multiyear Credit Facility or, if
the Williams Multiyear Credit Facility has been terminated, the largest, in
terms of commitment amount, syndicated revolving credit agreement under which
Parent is a borrower, (c) extend the maturity of any Indebtedness of the Bison
Entities past the maturity date thereof on the Closing Date, (d) result in (i)
the issuance by PPH of any additional Class B Preferred Member Interests (as
defined in the PPH Company Agreement) or any other equity interests
substantially similar to the Class B Preferred Member Interests or (ii) the
contribution of additional capital to PPH by the Class B Preferred Member (as
defined in the PPH Company Agreement), or (e) reasonably be expected to result
in a Material Adverse Effect, the reasonable expectation that such amendment,
modification or other change would not result in a Material Adverse Effect to be
determined in good faith by a Responsible Officer of Parent, it being understood
that the parties to the Indebtedness and Governing Documents of the Bison
Entities may conclusively rely on a certificate of such Responsible Officer to
such effect.

                  "Projections": as defined in Section 6.2(d).

                  "Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock and Hydrocarbon
Interests.

                  "Proved Producing Reserves": Proved Reserves that are
recoverable from existing wells with current operating methods and expenses and
are producing.



                                       16
<PAGE>

                  "Proved Reserves" those recoverable Hydrocarbons which have
been estimated with reasonable certainty, as demonstrated by geological and
engineering data, to be economically recoverable from the Oil and Gas Properties
by existing producing methods under existing economic conditions.

                  "Real Estate": All real property held or used by the Borrower
or its Subsidiaries, which the Borrower or the relevant Subsidiary owns in fee
or in which it holds a leasehold interest as a tenant.

                  "Register": as defined in Section 10.6(d).

                  "Regulation D": Regulation D of the Board as in effect from
time to time (and any successor to all or a portion thereof).

                  "Regulation H": Regulation H of the Board as in effect from
time to time (and any successor to all or a portion thereof).

                  "Regulation T": Regulation T of the Board as in effect from
time to time (and any successor to all or a portion thereof).

                  "Regulation U": Regulation U of the Board as in effect from
time to time (and any successor to all or a portion thereof).

                  "Regulation X": Regulation X of the Board as in effect from
time to time (and any successor to all or a portion thereof).

                  "Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

                  "Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events described in Section 4043(c)(3) of
ERISA and other than those events as to which the thirty day notice period is
waived under subsections .22, .24 (solely with respect to partial termination of
a Plan), .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. Section 4043.

                  "Required Hedge Agreement": any Hedge Agreement (x) required
to be entered into by any Loan Party pursuant to Section 6.15(a) and (y) the
form of which is disclosed prior to its execution to the Administrative Agent.

                  "Required Lenders": at any time, the holders of more than a
majority of (a) until the Closing Date, the Commitments and (b) thereafter, the
aggregate unpaid principal amount of the Term Loans then outstanding.

                  "Requirement of Law": as to any Person, the Governing
Documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.




                                       17
<PAGE>

                  "Reserve Report": means a report setting forth the Proved
Reserves by reserve category attributable to the Hydrocarbon Interests
constituting Proved Reserves owned directly by the Borrower or any Subsidiary
thereof, a projection of the rate of production and net operating income with
respect thereto, as of a specified date, and such other information as is
customarily obtained from and provided in such reports, satisfactory in form and
substance to the Administrative Agent. All Reserve Reports prepared after the
Closing Date and required by this Agreement or any of the other Loan documents
shall be prepared or audited by an Approved Engineer.

                  "Responsible Officer": as to any Person, the chief executive
officer, president or chief financial officer of such Person, but in any event,
with respect to financial matters, the chief financial officer of such Person.
Unless otherwise qualified, all references to a "Responsible Officer" shall
refer to a Responsible Officer of the Borrower.

                  "Restricted Payments": as defined in Section 7.6.

                  "Second Tranche Title Opinions": as defined in Section 6.2(m).

                  "Secured Parties": collectively, the Arranger, the Agents and
the Lenders.

                  "Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages and all other pledge and
security documents hereafter delivered to the Administrative Agent granting a
Lien on any Property of any Person to secure the obligations and liabilities of
Parent or any Loan Party under any Loan Document.

                  "Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.

                  "Solvency Certificate": the Solvency Certificate to be
executed and delivered by the chief financial officer of each Loan Party,
substantially in the form of Exhibit J, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with this Agreement.

                  "Solvent": when used with respect to any Person, as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, (d) such Person will be able to pay its debts as they mature, and
(e) such Person is not insolvent within the meaning of any applicable
Requirements of Law. For purposes of this definition, (i) "debt" means liability
on a "claim", and (ii) "claim" means any (x) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured or (y) right to an equitable remedy for breach of performance if
such breach gives rise



                                       18
<PAGE>

to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.

                  "Specified Non-Recourse Debt": Indebtedness (a) listed in Part
1 of Schedule 1.1(d) of any non-material Subsidiary of Parent that is (i) a
"Non-Borrowing Subsidiary" (as defined in the Williams Multiyear Credit
Agreement) and (ii) not a Loan Party, and (b) as to which neither the Parent nor
any of its Subsidiaries is directly or indirectly liable (including, without
limitation, the absence of any and all guaranties (completion, payment,
performance, or other), credit support of any kind, indemnities and other
contingent obligations of Parent or any of its Subsidiaries with respect to such
Indebtedness) other than the nonmaterial obligations disclosed in Part 2 of
Schedule 1.1(d).

                  "Subordinated Guaranty": the Subordinated Guaranty, dated as
of July 31, 2002, made by Holdings in favor of the Financial Institutions (as
defined therein) party thereto, as amended and restated as of October 31, 2002.

                  "Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.

                  "Subsidiary Guarantor": each Subsidiary of the Borrower (other
than the Bison Entities).

                  "Syndication Agent": as defined in the preamble hereto.

                  "Syndication Date": the date on which the Syndication Agent
completes the syndication of the Facility and the Persons selected in such
syndication process become parties to this Agreement.

                  "Synthetic Lease Obligations": all monetary obligations of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations which do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
Indebtedness of such Person (without regard to accounting treatment).

                  "Taking": a taking or voluntary conveyance during the term of
this Agreement of all or part of any Mortgaged Property, or any interest therein
or right accruing thereto or use thereof, as the result of, or in settlement of,
any condemnation or other eminent domain proceeding by any Governmental
Authority affecting a Mortgaged Property or any portion thereof, whether or not
the same shall have actually been commenced.



                                       19
<PAGE>

                  "Term Loan Percentage": as to any Lender (a) at any time prior
to the Closing Date, the percentage which such Lender's Commitment then
constitutes of the aggregate Commitments or (b) at any time after the Closing
Date, the percentage which the aggregate principal amount of such Lender's Term
Loans then outstanding constitutes of the aggregate principal amount of the Term
Loans then outstanding.

                  "Term Loan": as defined in Section 2.1.

                  "Term Notes": as defined in Section 2.8(e).

                  "Transferee": as defined in Section 10.15.

                  "Type": as to any Term Loan, its nature as a Base Rate Loan or
a Eurodollar Loan.

                  "UCC": the Uniform Commercial Code, as in effect from time to
time in any jurisdiction.

                  "Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.

                  "Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.

                  "Williams Multiyear Credit Agreement": that certain First
Amended and Restated Credit Agreement dated as of October 31, 2002 by and among
Parent, Northwest Pipeline Corporation, Transcontinental Gas Pipe Line
Corporation and Texas Gas Transmission Corporation, as Borrowers, the Banks
named therein, JPMorgan Chase Bank and Commerzbank AG, as Co- Syndication
Agents, Credit Lyonnais New York Branch, as Documentation Agent, Citicorp USA,
Inc., as Agent, and Salomon Smith Barney Inc., as Arranger (as the same may be
amended, supplemented or otherwise modified from time to time).

1.2 Other Definitional Provisions.

(a)  Unless otherwise specified therein, all terms defined in this Agreement
     shall have the defined meanings when used in the other Loan Documents or
     any certificate or other document made or delivered pursuant hereto or
     thereto.

(b)  As used herein and in the other Loan Documents, and any certificate or
     other document made or delivered pursuant hereto or thereto, accounting
     terms relating to the Borrower and its Subsidiaries not defined in Section
     1.1 and accounting terms partly defined in Section 1.1, to the extent not
     defined, shall have the respective meanings given to them under GAAP.

(c)  The words "hereof", "herein" and "hereunder" and words of similar import
     when used in this Agreement shall refer to this Agreement as a whole and
     not to any particular provision of this Agreement, and Section, Schedule
     and Exhibit references are to this Agreement unless otherwise specified.





                                       20
<PAGE>

(d)  The meanings given to terms defined herein shall be equally applicable to
     both the singular and plural forms of such terms.

(e)  The expressions "payment in full," "paid in full" and any other similar
     terms or phrases when used herein with respect to the Obligations shall
     mean the payment in full, in immediately available funds, of all of the
     Obligations.

(f)  The words "including" and "includes" and words of similar import when used
     in this Agreement shall not be limiting and shall mean "including without
     limitation" or "includes without limitation", as the case may be.

                  SECTION 2 - AMOUNT AND TERMS OF COMMITMENTS

2.1  Commitments. Subject to the terms and conditions hereof, each Lender
     severally agrees to make a term loan (a "Term Loan") to the Borrower on the
     Closing Date in an amount not to exceed the amount of the Term Loan
     Commitment of such Lender. The Term Loans shall be Eurodollar Loans or, if
     Eurodollar Loans are not available, shall be Base Rate Loans.

2.2  Procedure for Term Loan Borrowing. The Borrower shall give the
     Administrative Agent irrevocable notice (which notice must be received by
     the Administrative Agent prior to 10:00 A.M., New York City time, one
     Business Day prior to the anticipated Closing Date) requesting that the
     Lenders make the Term Loans on the Closing Date and specifying the amount
     to be borrowed. Upon receipt of such notice the Administrative Agent shall
     promptly notify each Lender thereof. Not later than 12:00 Noon, New York
     City time, on the Closing Date each Lender shall make available to the
     Administrative Agent at the Funding Office an amount in immediately
     available funds equal to the Term Loan to be made by such Lender. The
     Administrative Agent shall make available to the Borrower the aggregate of
     the amounts made available to the Administrative Agent by the Lenders in
     like funds.

2.3  Repayment of Term Loans. The Term Loan of each Lender shall mature on the
     Maturity Date.

2.4  [Intentionally Omitted].

2.5  [Intentionally Omitted].

2.6  [Intentionally Omitted].

2.7  [Intentionally Omitted].

2.8  Repayment of Term Loans; Evidence of Indebtedness. (a) The Borrower
     unconditionally promises to pay to the Administrative Agent for the account
     of the appropriate Lender the principal amount of each Term Loan on the
     Maturity Date (or on such earlier date on which the Term Loans become due
     and payable pursuant to Section 2.12 or 8). The Borrower hereby further
     agrees to pay interest on the unpaid principal amount of the Term Loans
     from time to time outstanding from the date hereof until payment in full
     thereof at the rates per annum, and on the dates, and in the form set forth
     in Section 2.15.



                                       21
<PAGE>

(b)  Each Lender shall maintain in accordance with its usual practice an account
     or accounts evidencing indebtedness of the Borrower to such Lender
     resulting from each Term Loan of such Lender from time to time, including
     the amounts of principal and interest payable and paid to such Lender from
     time to time under this Agreement.

(c)  The Administrative Agent, on behalf of the Borrower, shall maintain the
     Register pursuant to Section 10.6(d), and a sub-account therein for each
     Lender, in which shall be recorded (i) the amount of each Term Loan made
     hereunder and any Term Note evidencing such Term Loan, (ii) the amount of
     any principal or interest due and payable or to become due and payable from
     the Borrower to each Lender hereunder and (iii) both the amount of any sum
     received by the Administrative Agent hereunder from the Borrower and each
     Lender's share thereof.

(d)  The entries made in the Register and the accounts of each Lender maintained
     pursuant to Section 2.8(b) shall, to the extent permitted by applicable
     law, be prima facie evidence of the existence and amounts of the
     obligations of the Borrower therein recorded; provided, however, that the
     failure of any Lender or the Administrative Agent to maintain the Register
     or any such account, or any error therein, shall not in any manner affect
     the obligation of the Borrower to repay (with applicable interest) the Term
     Loans made to such Borrower by such Lender in accordance with the terms of
     this Agreement.

(e)  The Borrower agrees that, upon the request to the Administrative Agent by
     any Lender, the Borrower will execute and deliver to such Lender a
     promissory note of the Borrower evidencing the Term Loan of such Lender,
     substantially in the form of Exhibit G, with appropriate insertions as to
     date and principal amount (such notes, "Term Notes").

2.9  Fees, Etc. (a) The Borrower agrees to pay to the Arranger, the Agents and
     the Lenders the fees in the amounts and on the dates agreed to by the
     Borrower and the Original Lenders pursuant to the letter agreement, dated
     as of July 31, 2002 (the "Fee Letter"), among the Original Lenders and the
     Borrower.

(b)  (i) If a Company Sale has occurred on or prior to the Maturity Date
     (whether or not the Obligations have been repaid in full prior to such
     Company Sale), the Borrower shall pay to the Lenders, in immediately
     available funds, a deferred set-up fee (to be shared among them on a pro
     rata basis based on their respective outstanding balance of the Term Loans
     immediately prior to the consummation of the Company Sale) in an amount in
     cash initially equal to the greater of (x) 15% of the principal amount of
     the Term Loans funded on the Closing Date and (y) 15% (which percentage for
     the purposes of this clause (y) shall increase by 1% at the beginning of
     the 60-day period following the Closing Date and by an additional 1% at the
     beginning of each subsequent 60-day period) of the difference between (A)
     the aggregate purchase price paid to Parent, Holdings or the Borrower
     (including, without limitation, the amount of any liabilities assumed by
     the purchaser in the transaction) in connection with such Company Sale
     (such amount for the purposes of this calculation not to exceed
     $2,500,000,000) and (B) the sum of (1) the principal amount of the
     then-outstanding Term Loans, plus (2) the aggregate principal amount of any
     other net Indebtedness of the Borrower and its Subsidiaries then
     outstanding (which amount as of the Closing Date is set forth on Schedule
     2.9(b)) plus (3) accrued and unpaid interest on the Terms Loans to the date
     of repayment; or (ii) if a Company Sale has not occurred on or prior to the
     Maturity Date, the Borrower shall pay to the Lenders on the Maturity Date,
     in immediately available funds, a deferred set-up fee (to be shared among
     them on a pro rata basis based on their respective Term Loans outstanding
     immediately prior to the Maturity Date) in an amount in cash equal to 15%
     of the Term Loans funded on the Closing Date; provided, however, that if a
     Company Sale occurs within three months following the Maturity Date, then
     upon such Company Sale the



                                       22
<PAGE>


     Borrower shall pay to the Lenders (to be shared among them on a pro rata
     basis based on their respective Term Loans outstanding immediately prior to
     the Maturity Date) an additional amount in cash equal to the positive
     difference, if any, between the fee that would have been paid pursuant to
     clause (i) above had such Company Sale occurred prior to the Maturity Date
     and the fee paid pursuant to clause (ii) above. This covenant shall survive
     the termination of this Agreement and the payment in full of the
     Obligations in cash. Notwithstanding anything to the contrary in this
     Section 2.9(b), the fees described in this Section shall be earned on the
     Closing Date and shall be payable to the Lenders regardless of whether the
     Term Loans are repaid or not.

2.10 [Intentionally Omitted].

2.11 Optional Prepayments.

(a)  The principal of the Term Loans may be prepaid in whole or in part at any
     time, plus the sum of (x) accrued and unpaid interest to the repayment
     date, plus (y) the Make-Whole Amount, plus (z) a pro rata portion (based on
     the amount of the Term Loans prepaid) of the applicable deferred set-up fee
     referred to in Section 2.9(b)(ii), all of which shall be paid by the
     Borrower immediately upon any such prepayment of Term Loans.

(b)  Amounts to be applied in connection with a partial prepayment made pursuant
     to this Section 2.11 shall be applied, first, to accrued and unpaid
     interest on the Term Loans, second, to the deferred set-up fee referred to
     in Section 2.9(b)(ii), third, to outstanding principal of the Terms Loans
     (including, without limitation, any capitalized interest that has been
     added to the principal of the Term Loans) and, fourth, to any remaining
     Obligations outstanding. The application of any repayment pursuant to this
     Section 2.11 shall be made, first, to Base Rate Loans, if any, and, second,
     to Eurodollar Loans.

2.12 Mandatory Prepayments.

(a)  If on any date Holdings, the Borrower or any of its Subsidiaries shall
     receive Net Cash Proceeds from any Asset Sale or Disposition permitted by
     Section 7.5(e), such Net Cash Proceeds promptly (but in any event no later
     than 2 Business Days after such receipt) shall be paid by the Borrower to
     the Administrative Agent, for the ratable benefit of the Lenders, to prepay
     the Obligations in cash at 100% of the principal amount of the Term Loans
     so prepaid, plus the sum of (x) accrued and unpaid interest to the
     repayment date, plus (y) a pro rata portion of the Make-Whole Amount, plus
     (z) a pro rata portion (based on the amount of the Term Loans prepaid) of
     the deferred set-up fee referred to in Section 2.9(b)(ii).

(b)  On any date Parent, Holdings or the Borrower receives proceeds from a
     Company Sale, (i) all such proceeds (whether or not sufficient to make the
     following payments in full) shall be immediately applied to repay the
     Obligations in full in cash and to pay to the Administrative



                                       23
<PAGE>

     Agent, for the pro rata benefit of the Lenders, the sum of 100% of the
     principal amount of the Term Loans, plus (x) accrued and unpaid interest to
     the repayment date, plus (y) the Make-Whole Amount, plus (z) the deferred
     set-up fee referred to in Section 2.9(b)(i); provided that at the time of
     any such Company Sale, all of the foregoing Obligations shall be paid in
     full regardless of the amount of proceeds actually received by Parent,
     Holdings or the Borrower.

(c)  Unless the Borrower shall otherwise have repaid in full all Obligations
     under this Agreement, upon (i) 75 days following a Parent Liquidity Event
     or (ii) an acceleration of the Obligations pursuant to Section 8, the
     Borrower shall repay the Obligations in full in cash and pay to the
     Administrative Agent, for the pro rata benefit of the Lenders, the sum of
     100% of the principal amount of the outstanding Term Loans, plus (x)
     accrued and unpaid interest to the repayment date, plus (y) the Make-Whole
     Amount, plus (z) the deferred set-up fee referred to in Section 2.9(b)(ii).

(d)  Subject to Section 2.18, amounts to be applied in connection with a
     repayment made pursuant to Section 2.12(b) or (c), if the Obligations are
     not paid in full in cash, shall be applied, first, to accrued and unpaid
     interest on the Term Loans, second, to the deferred set-up fee referred to
     in Section 2.9(b), third, to outstanding principal of the Terms Loans
     (including, without limitation, any capitalized interest that has been
     added to the principal of the Term Loans) and, fourth, to any remaining
     Obligations outstanding. The application of any repayment pursuant to this
     Section 2.12 shall be made, first, to Base Rate Loans, if any, and, second,
     to Eurodollar Loan.

2.13 [Intentionally Omitted].

2.14 [Intentionally Omitted].

2.15 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear
     interest during each Interest Period with respect thereto at a rate per
     annum equal to the sum of (i) the Eurodollar Rate determined for such day
     plus (ii) 4.00% per annum.

(b)  Each Base Rate Loan shall bear interest at a rate per annum equal to the
     sum of (i) the Base Rate plus (ii) 3.00% per annum.

(c)  Each Term Loan also shall accrue additional interest at a rate of 14% per
     annum.

(d)(i) If all or a portion of the principal amount of any Term Loan shall not
     be paid when due (whether at the stated maturity, by acceleration or
     otherwise), all outstanding Term Loans (whether or not overdue) shall bear
     interest at a rate per annum that is equal to the rate that would otherwise
     be applicable thereto pursuant to the foregoing provisions of this Section
     plus 2.0%, and (ii) if all or a portion of any interest payable on any Term
     Loan or other amount payable hereunder shall not be paid when due (whether
     at the stated maturity, by acceleration or otherwise), such overdue amount
     shall bear interest at a rate per annum equal to the rate then applicable
     to Base Rate Loans plus 2.0%, in each case, with respect to clauses (i) and
     (ii) above, from the date of such non-payment until such amount is paid in
     full (after as well as before judgment).



                                       24
<PAGE>

(e)(i) Interest accruing pursuant to paragraphs (a) and (b) above shall be
     payable by the Borrower in cash in arrears on each Interest Payment Date;
     (ii) interest accruing pursuant to paragraph (c) above shall be calculated
     on the outstanding principal amount of the Term Loans on a weighted average
     daily basis and shall be payable by the Borrower in arrears on each
     Interest Payment Date by increasing the outstanding principal amount of the
     Term Loans by the amount of such interest due on a pro rata basis based on
     the Lenders' outstanding Term Loans immediately prior to such interest
     payment and (iii) interest accruing pursuant to paragraph (d) above shall
     be payable in cash from time to time on demand.

(f)  Notwithstanding anything to the contrary set forth in this Section 2.15, if
     a court of competent jurisdiction determines in a final order that the rate
     of interest payable hereunder exceeds the highest rate of interest
     permissible under law (the "Maximum Lawful Rate"), then so long as the
     Maximum Lawful Rate would be so exceeded, the rate of interest payable
     hereunder shall be equal to the Maximum Lawful Rate; provided, however,
     that if at any time thereafter the rate of interest payable hereunder is
     less than the Maximum Lawful Rate, Borrower shall continue to pay interest
     hereunder at the Maximum Lawful Rate until such time as the total interest
     received by the Lenders is equal to the total interest which would have
     been received had the interest rate payable hereunder been (but for the
     operation of this paragraph) the interest rate payable since the Closing
     Date as otherwise provided in this Agreement. Thereafter, interest
     hereunder shall be paid at the rate(s) of interest and in the manner
     provided in Sections 2.15(a) through (e) above, unless and until the rate
     of interest again exceeds the Maximum Lawful Rate, and at that time this
     paragraph shall again apply. In no event shall the total interest received
     by the Lenders pursuant to the terms hereof exceed the amount which the
     Lenders could lawfully have received had the interest due hereunder been
     calculated for the full term hereof at the Maximum Lawful Rate. If the
     Maximum Lawful Rate is calculated pursuant to this paragraph, such interest
     shall be calculated at a daily rate equal to the Maximum Lawful Rate
     divided by the number of days in the year in which such calculation is
     made. If, notwithstanding the provisions of this Section 2.15(f), a court
     of competent jurisdiction shall finally determine that the Lenders have
     received interest hereunder in excess of the Maximum Lawful Rate, the
     Lenders shall refund any excess to Borrower or as a court of competent
     jurisdiction may otherwise order.

2.16 Computation of Interest and Fees. (a) Interest, fees and commissions
     payable on a per annum basis pursuant hereto shall be calculated on the
     basis of a 360-day year for the actual days elapsed. The Administrative
     Agent shall as soon as practicable notify the Borrower and the relevant
     Lenders of each determination of a Eurodollar Rate. Any change in the
     interest rate on a Term Loan resulting from a change in the Base Rate or
     the Eurocurrency Reserve Requirements shall become effective as of the
     opening of business on the day on which such change becomes effective. The
     Administrative Agent shall as soon as practicable notify the Borrower and
     the relevant Lenders of the effective date and the amount of each such
     change in interest rate.

(b)  Each determination of an interest rate by the Administrative Agent pursuant
     to any provision of this Agreement shall be conclusive and binding on the
     Borrower and the Lenders in the absence of manifest error. The
     Administrative Agent shall, at the request of the Borrower,




                                       25
<PAGE>

     deliver to the Borrower a statement showing the quotations used by the
     Administrative Agent in determining any interest rate pursuant to Section
     2.15(a).

2.17 Inability to Determine Interest Rate. If prior to the first day of any
     Interest Period:

(a)  the Administrative Agent shall have determined (which determination shall
     be conclusive and binding upon the Borrower) that, by reason of
     circumstances affecting the relevant market, adequate and reasonable means
     do not exist for ascertaining the Eurodollar Rate for such Interest Period,
     or

(b)  the Administrative Agent shall have received notice from the Required
     Lenders that the Eurodollar Rate determined or to be determined for such
     Interest Period will not adequately and fairly reflect the cost to such
     Lenders (as conclusively certified by such Lenders) of making or
     maintaining their affected Term Loans during such Interest Period, the
     Administrative Agent shall give telecopy or telephonic notice thereof to
     the Borrower and the relevant Lenders as soon as practicable thereafter. If
     such notice is given (x) any Eurodollar Loans requested to be made on the
     first day of such Interest Period shall be made as Base Rate Loans and (y)
     any outstanding Eurodollar Loans shall be converted, on the last day of the
     then current Interest Period with respect thereto, to Base Rate Loans.
     Until such notice has been withdrawn by the Administrative Agent, no
     further Eurodollar Loans shall be continued as such.

2.18 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower from
     the Lenders hereunder shall be made pro rata according to the respective
     Term Loan Percentages of the Lenders. Each payment (other than prepayments)
     in respect of principal or interest in respect of the Term Loans, and each
     payment in respect of fees or expenses payable hereunder shall be applied
     to the amounts of such Obligations owing to the Lenders pro rata according
     to the respective amounts then due and owing to the Lenders.

(b)  Each payment (including each prepayment) of the Term Loans outstanding
     under the Facility shall be allocated among the Lenders holding such Term
     Loans pro rata based on the principal amount of such Term Loans held by
     such Lenders. Amounts prepaid on account of the Term Loans may not be
     reborrowed.

(c)  [Intentionally Omitted].

(d)  [Intentionally Omitted].

(e)  All payments (including prepayments) to be made by the Borrower hereunder,
     whether on account of principal, interest, fees or otherwise, shall be made
     without setoff or counterclaim and shall be made prior to 12:00 Noon, New
     York City time, on the due date thereof to the Administrative Agent, for
     the account of the Lenders, at the Payment Office, in Dollars and in
     immediately available funds. The Administrative Agent shall distribute such
     payments to the Lenders promptly upon receipt in like funds as received. If
     any payment hereunder (other than payments on the Eurodollar Loans) becomes
     due and payable on a day other than a Business Day, such payment shall be
     extended to the next succeeding Business Day. If any payment on a
     Eurodollar Loan becomes due and payable on a day other than a Business Day,
     the maturity thereof shall be extended to the next succeeding Business Day
     unless the result




                                       26
<PAGE>

     of such extension would be to extend such payment into another calendar
     month, in which event such payment shall be made on the immediately
     preceding Business Day. In the case of any extension of any payment of
     principal pursuant to the preceding two sentences, interest thereon shall
     be payable at the then applicable rate during such extension.

(f)  Unless the Administrative Agent shall have been notified in writing by any
     Lender prior to the Closing Date that such Lender will not make the amount
     that would constitute its share of such borrowing available to the
     Administrative Agent, the Administrative Agent may assume that such Lender
     is making such amount available to the Administrative Agent, and the
     Administrative Agent may, in reliance upon such assumption, make available
     to the Borrower a corresponding amount. If such amount is not made
     available to the Administrative Agent by the required time on the Closing
     Date, such Lender shall pay to the Administrative Agent, on demand, such
     amount with interest thereon at a rate equal to the daily average Federal
     Funds Effective Rate for the period until such Lender makes such amount
     immediately available to the Administrative Agent. A certificate of the
     Administrative Agent submitted to any Lender with respect to any amounts
     owing under this paragraph shall be conclusive in the absence of manifest
     error. If such Lender's share of such borrowing is not made available to
     the Administrative Agent by such Lender within three Business Days of the
     Closing Date, the Administrative Agent shall also be entitled to recover
     such amount with interest thereon at the rate per annum applicable to Base
     Rate Loans on demand, from the Borrower.

(g)  Unless the Administrative Agent shall have been notified in writing by the
     Borrower prior to the date of any payment being made hereunder that the
     Borrower will not make such payment to the Administrative Agent, the
     Administrative Agent may assume that the Borrower is making such payment,
     and the Administrative Agent may, but shall not be required to, in reliance
     upon such assumption, make available to the Lenders their respective pro
     rata shares of a corresponding amount. If such payment is not made to the
     Administrative Agent by the Borrower within three Business Days of such
     required date, the Administrative Agent shall be entitled to recover, on
     demand, from each Lender to which any amount which was made available
     pursuant to the preceding sentence, such amount with interest thereon at
     the rate per annum equal to the daily average Federal Funds Effective Rate.
     Nothing herein shall be deemed to limit the rights of the Administrative
     Agent or any Lender against the Borrower.

2.19 Requirements of Law. (a) If the adoption of or any change in any
     Requirement of Law or in the interpretation or application thereof or
     compliance by any Lender with any request or directive (whether or not
     having the force of law) from any central bank or other Governmental
     Authority made subsequent to the date hereof:

(i)  shall subject any Lender to any tax of any kind whatsoever with respect to
     this Agreement, or any Eurodollar Loan made by it, or change the basis of
     taxation of payments to such Lender in respect thereof (except for
     Non-Excluded Taxes covered by Section 2.20 and changes in the rate of tax
     on the overall net income of such Lender);

(ii) shall impose, modify or hold applicable any reserve, special deposit,
     compulsory loan or similar requirement against assets held by, deposits or
     other liabilities in or for the account



                                       27
<PAGE>

     of, advances, loans or other extensions of credit by, or any other
     acquisition of funds by, any office of such Lender that is not otherwise
     included in the determination of the Eurodollar Rate hereunder; or

(iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making or maintaining
Eurodollar Loans, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon such Lender's demand, any additional amounts necessary to compensate such
Lender on an after-tax basis for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower (with a copy to
the Administrative Agent) of the event by reason of which it has become so
entitled.

(b)  If any Lender shall have determined that the adoption of or any change in
     any Requirement of Law regarding capital adequacy or in the interpretation
     or application thereof or compliance by such Lender or any Person
     controlling such Lender with any request or directive regarding capital
     adequacy (whether or not having the force of law) from any Governmental
     Authority made subsequent to the date hereof shall have the effect of
     reducing the rate of return on such Lender's or such corporation's capital
     as a consequence of its obligations hereunder to a level below that which
     such Lender or such corporation could have achieved but for such adoption,
     change or compliance (taking into consideration such Lender's or such
     corporation's policies with respect to capital adequacy) by an amount
     deemed by such Lender to be material, then from time to time, after
     submission by such Lender to the Borrower (with a copy to the
     Administrative Agent) of a written request therefor, the Borrower shall pay
     to such Lender such additional amount or amounts as will compensate such
     Lender on an after-tax basis for such reduction.

(c)  A certificate as to any additional amounts payable pursuant to this Section
     submitted by any Lender to the Borrower (with a copy to the Administrative
     Agent) shall be conclusive in the absence of manifest error. The
     obligations of the Borrower pursuant to this Section shall survive the
     termination of this Agreement and the payment of the Obligations in full.

2.20 Taxes. (a) All payments made by the Borrower under this Agreement or any
     other Loan Document shall be made free and clear of, and without deduction
     or withholding for or on account of, any present or future income, stamp or
     other taxes, levies, imposts, duties, charges, fees, deductions or
     withholdings, now or hereafter imposed, levied, collected, withheld or
     assessed by any Governmental Authority, excluding net income taxes and
     franchise taxes (imposed in lieu of net income taxes) imposed on the
     Arranger, any Agent or any Lender as a result of a present or former
     connection between the Arranger, such Agent or such Lender and the
     jurisdiction of the Governmental Authority imposing such tax or any
     political subdivision or taxing authority thereof or therein (other than
     any such connection arising solely from the Arranger's, such Agent's or
     such Lender's having executed, delivered or performed its obligations or
     received a payment under, or enforced, this Agreement or any other Loan
     Document). If any such non-excluded taxes, levies, imposts, duties,
     charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
     required to be withheld from



                                       28
<PAGE>

     any amounts payable to the Arranger, any Agent or any Lender hereunder, the
     amounts so payable to the Arranger, such Agent or such Lender shall be
     increased to the extent necessary to yield to the Arranger, such Agent or
     such Lender (after payment of all Non-Excluded Taxes) interest or any such
     other amounts that would have been received hereunder had such withholding
     not been required; provided, however, that the Borrower or a Guarantor
     shall not be required to increase any such amounts payable to the Arranger,
     any Agent or any Lender with respect to any Non-Excluded Taxes that are
     attributable to the Arranger's, such Agent's or such Lender's failure to
     comply with the requirements of paragraph (f) of this Section. The Borrower
     or the applicable Guarantor shall make any required withholding and pay the
     full amount withheld to the relevant tax authority or other Governmental
     Authority in accordance with applicable Requirements of Law.

(b)  The Borrower shall pay any Other Taxes to the relevant Governmental
     Authority in accordance with applicable Requirements of Law.

(c)  The Borrower shall indemnify the Arranger, each Agent and any Lender for
     the full amount of Non-Excluded Taxes or Other Taxes arising in connection
     with payments made under this Agreement (including, without limitation, any
     Non-Excluded Taxes or Other Taxes imposed by any jurisdiction on amounts
     payable under this Section 2.20) paid by the Arranger, such Agent or Lender
     or any of their respective Affiliates and any liability (including
     penalties, additions to tax interest and expenses) arising therefrom or
     with respect thereto. Payment under this indemnification shall be made
     within ten days from the date the Arranger, any Agent or any Lender or any
     of their respective Affiliates makes written demand therefor.

(d)  Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower,
     as promptly as possible thereafter the Borrower shall send to the
     Administrative Agent for the account of the Arranger or the relevant Agent
     or Lender, as the case may be, a certified copy of an original official
     receipt received by the Borrower showing payment thereof.

(e)  The agreements in this Section 2.20 shall survive the termination of this
     Agreement and the payment of the Term Loans and all other amounts payable
     hereunder.

(f)  Each Lender (or Transferee) that is not a citizen or resident of the United
     States of America, a corporation, partnership or other entity created or
     organized in or under the laws of the United States of America (or any
     jurisdiction thereof), or any estate or trust that is subject to federal
     income taxation regardless of the source of its income (a "Non-U.S.
     Lender") shall deliver to the Borrower and the Administrative Agent (and,
     in the case of a Participant, to the Lender from which the related
     participation shall have been purchased) two copies of either U.S. Internal
     Revenue Service Form W-8BEN or Form W-8ECI or other appropriate form,
     establishing a complete exemption from withholding of U.S. taxes under
     Section 871(h) or 881(c) of the Code and a Form W-8BEN, or any subsequent
     versions thereof or successors thereto properly completed and duly executed
     by such Non-U.S. Lender claiming complete exemption from, or a reduced rate
     of, U.S. federal withholding tax on all payments by the Borrower under this
     Agreement and the other Loan Documents. Such forms shall be delivered by
     each Non-U.S. Lender on or before the date it becomes a party to this
     Agreement (or, in the case of any Participant, on or before the date such
     Participant purchases the related participation). In addition, each
     Non-U.S. Lender shall deliver such



                                       29
<PAGE>

     forms promptly upon the obsolescence or invalidity of any form previously
     delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly
     notify the Borrower at any time it determines that it is no longer in a
     position to provide any previously delivered certificate to the Borrower
     (or any other form of certification adopted by the U.S. taxing authorities
     for such purpose). Notwithstanding any other provision of this paragraph, a
     Non-U.S. Lender shall not be required to deliver any form pursuant to this
     paragraph that such Non-U.S. Lender is not legally able to deliver.

(g)  A Lender that is entitled to an exemption from or reduction of non-U.S.
     withholding tax under the law of the jurisdiction in which the Borrower is
     located, or any treaty to which such jurisdiction is a party, with respect
     to payment under this Agreement shall deliver to the Borrower (with a copy
     to the Administrative Agent), at the time or times prescribed by applicable
     law or reasonably requested by the Borrower, such properly completed and
     executed documentation prescribed by applicable law as will permit such
     payments to be made without withholding or at a reduced rate, provided that
     such Lender is legally entitled to complete, execute and deliver such
     documentation and in such Lender's reasonable judgment such completion,
     execution or submission would not materially prejudice the legal position
     of such Lender.

2.21 Indemnity. The Borrower agrees to indemnify each Lender and to hold each
     Lender harmless from any loss or expense that such Lender may sustain or
     incur as a consequence of (a) default by the Borrower in making a borrowing
     of Eurodollar Loans after the Borrower has given a notice requesting the
     same in accordance with the provisions of this Agreement, (b) default by
     the Borrower in making a mandatory repayment under Section 2.12 in
     accordance with the provisions of this Agreement or an optional prepayment
     after the Borrower has given notice thereof or (c) the making of a
     repayment of Eurodollar Loans on a day that is not the last day of an
     Interest Period with respect thereto. Such indemnification may include an
     amount equal to the excess, if any, of (x) the amount of interest that
     would have accrued on the amount so repaid, or not so borrowed for the
     period from the date of such prepayment or of such failure to borrow to the
     last day of such Interest Period (or, in the case of a failure to borrow,
     convert or continue, the Interest Period that would have commenced on the
     date of such failure) in each case at the applicable rate of interest for
     such Term Loans provided for herein over (y) the amount of interest (as
     reasonably determined by such Lender) that would have accrued to such
     Lender on such amount by placing such amount on deposit for a comparable
     period with leading banks in the interbank eurodollar market. A certificate
     as to any amounts payable pursuant to this Section submitted to the
     Borrower by any Lender shall be conclusive in the absence of manifest
     error. This covenant shall survive the termination of this Agreement and
     the payment of the Obligations in full.

2.22 Illegality. Notwithstanding any other provision in this Agreement, if the
     adoption of or any change in any Requirement of Law or in the
     interpretation or application thereof shall make it unlawful for any Lender
     to make or maintain Eurodollar Loans as contemplated by this Agreement, (a)
     the commitment of such Lender hereunder to make Eurodollar Loans shall
     forthwith be canceled and (b) such Lender's Term Loans then outstanding as
     Eurodollar Loans, if any, shall be converted automatically to Base Rate
     Loans on the respective last days of the then current Interest Periods with
     respect to such Term Loans or within such earlier period as required by
     law. If any such conversion of a Eurodollar Loan occurs on a day



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<PAGE>

     which is not the last day of the then current Interest Period with respect
     thereto, the Borrower shall pay to such Lender such amounts, if any, as may
     be required pursuant to Section 2.21.

2.23 Change of Lending Office. Each Lender agrees that, upon the occurrence of
     any event giving rise to the operation of Section 2.19, 2.20(a) or 2.22
     with respect to such Lender, it will, if requested by the Borrower, use
     reasonable efforts (subject to overall policy considerations of such
     Lender) to designate another lending office for any Term Loans affected by
     such event with the object of avoiding the consequences of such event;
     provided that such designation is made on terms that, in the sole judgment
     of such Lender, cause such Lender and its lending office(s) to suffer no
     economic, legal or regulatory disadvantage, and provided further that
     nothing in this Section shall affect or postpone any of the obligations of
     any Borrower or the rights of any Lender pursuant to Section 2.19, 2.20(a)
     or 2.22.

                      SECTION 3 - [INTENTIONALLY OMITTED]

                   SECTION 4 - REPRESENTATIONS AND WARRANTIES

                  To induce the Arranger, the Agents and the Lenders to enter
into this Agreement and to make the Term Loans, each of Parent, Holdings and the
Borrower hereby represent and warrant to the Arranger, each Agent and each
Lender that:

4.1  Financial Condition. (a) The unaudited pro forma consolidated balance sheet
     of the Borrower and its consolidated Subsidiaries as at June 30, 2002 (the
     "Pro Forma Balance Sheet"), copies of which have heretofore been furnished
     to each Original Lender, has been prepared giving effect (as if such events
     had occurred on such date) to (i) the Term Loans to be made on the Closing
     Date and the use of proceeds thereof and (ii) the payment of fees and
     expenses in connection with the foregoing. The Pro Forma Balance Sheet has
     been prepared based on the best information available to the Borrower as of
     the date of delivery thereof, and presents fairly on a pro forma basis the
     estimated financial position of Borrower and its consolidated Subsidiaries
     as at June 30, 2002, assuming that the events specified in the preceding
     sentence had actually occurred at such date.

(b)  The consolidated balance sheet of the Borrower and its Subsidiaries as at
     December 31, 2001, and the related consolidated statements of income and of
     cash flows for the fiscal year ended on such date present fairly the
     consolidated financial condition of the Borrower and its Subsidiaries as at
     such date, and the consolidated results of its operations and its
     consolidated cash flows for the fiscal year then ended. The unaudited
     consolidated balance sheet of the Borrower and its Subsidiaries as at June
     30, 2002, and the related unaudited consolidated statements of income and
     cash flows for the six-month period ended on such date, present fairly the
     consolidated financial condition of the Borrower and its Subsidiaries as at
     such date, and the consolidated results of their operations and their
     consolidated cash flows for the six-month period then ended (subject to
     normal year-end audit adjustments). All such financial statements,
     including any related schedules and notes thereto, have been prepared in
     accordance with GAAP applied consistently throughout the periods involved.
     Except as set forth in Schedule 4.1(a), the Borrower and its Subsidiaries
     do not have any material Guarantee Obligations, contingent liabilities and
     liabilities for taxes, or any long-term leases or unusual forward or
     long-term commitments, including, without limitation, any interest rate


                                       31
<PAGE>

     or foreign currency swap or exchange transaction or other obligation in
     respect of derivatives, that are not reflected in the most recent financial
     statements referred to in this paragraph. Except as set forth on Schedule
     4.1(b), during the period from June 30, 2002 to and including the date
     hereof there has been no Disposition by the Borrower or any of its
     Subsidiaries of any material part of its business or Property.

4.2  No Change. Since June 30, 2002, there has been no development or event that
     has had or could reasonably be expected to have a Material Adverse Effect
     (except as to Parent and as disclosed in Parent's filings with the
     Securities and Exchange Commission pursuant to Section 13(a) of the
     Securities Exchange Act of 1934, as amended).

4.3  Existence; Compliance with Law. Each of Parent, Holdings, the Borrower and
     its Subsidiaries (a) is duly organized, validly existing and in good
     standing under the laws of the jurisdiction of its organization, (b) has
     the power and authority, and the legal right, to own and operate its
     Property, to lease the Property it operates as lessee and to conduct the
     business in which it is currently engaged, including the Oil and Gas
     Business, (c) is duly qualified as a foreign entity and in good standing
     under the laws of each jurisdiction where its ownership, lease or operation
     of Property or the conduct of its business requires such qualification and
     (d) is in compliance with all Requirements of Law except to the extent that
     the failure to comply therewith could not, in the aggregate, reasonably be
     expected to have a Material Adverse Effect.

4.4  Power; Authorization; Enforceable Obligations. Parent and each Loan Party
     has the power and authority, and the legal right, to make, deliver and
     perform the Loan Documents to which it is a party and, in the case of the
     Borrower, to borrow hereunder. Parent and each Loan Party has taken all
     necessary corporate, partnership, limited liability company or other action
     to authorize the execution, delivery and performance of the Loan Documents
     to which it is a party and, in the case of the Borrower, to authorize the
     borrowings on the terms and conditions of this Agreement. No consent or
     authorization of, filing with, notice to or other act by or in respect of,
     any Governmental Authority or any other Person is required in connection
     with the borrowings hereunder or with the execution, delivery, performance,
     validity or enforceability of this Agreement or any of the Loan Documents,
     except (a) consents, authorizations, filings and notices described in
     Schedule 4.4, which consents, authorizations, filings and notices have been
     obtained or made and are in full force and effect and (b) the filings
     referred to in Section 4.19. Each Loan Document has been duly executed and
     delivered on behalf of Parent and each Loan Party to the extent it is a
     party thereto. This Agreement constitutes, and each other Loan Document
     upon execution will constitute, a legal, valid and binding obligation of
     Parent and each Loan Party to the extent it is a party thereto, enforceable
     against Parent and each such Loan Party in accordance with its terms,
     except as enforceability may be limited by applicable bankruptcy,
     insolvency, reorganization, moratorium or similar laws affecting the
     enforcement of creditors' rights generally and by general equitable
     principles (whether enforcement is sought by proceedings in equity or at
     law).

4.5  No Legal Bar. The execution, delivery and performance of this Agreement,
     the other Loan Documents, the borrowings hereunder and the use of the
     proceeds thereof will not violate any Requirement of Law or any Contractual
     Obligation of Parent (or a Subsidiary thereof,



                                       32
<PAGE>

     other than Holdings, the Borrower or any of the Borrower's Subsidiaries),
     Holdings, the Borrower or any of the Borrower's Subsidiaries and will not
     result in, or require, the creation or imposition of any Lien on any of
     their respective properties or revenues pursuant to any Requirement of Law
     or any such Contractual Obligation (other than the Liens created by the
     Security Documents). No Requirement of Law or Contractual Obligation
     applicable to Parent, Holdings, the Borrower or any of its Subsidiaries
     could reasonably be expected to have a Material Adverse Effect.

4.6  No Material Litigation. Except as set forth in Schedule 4.6, no litigation,
     investigation or proceeding of or before any arbitrator or Governmental
     Authority is pending or, to the knowledge of Parent, Holdings or the
     Borrower, threatened by or against Parent, Holdings, the Borrower or any of
     the Borrower's Subsidiaries or against any of their respective properties
     or revenues (a) with respect to any of the Loan Documents or any of the
     transactions contemplated hereby or thereby or (b) that could reasonably be
     expected to have a Material Adverse Effect.

4.7  No Default. None of Parent, Holdings, the Borrower or any of the Borrower's
     Subsidiaries is in default under or with respect to any of its Contractual
     Obligations in any respect that could reasonably be expected to have a
     Material Adverse Effect and no Default or Event of Default has occurred and
     is continuing.

4.8  Ownership of Property; Liens. Each of Holdings, the Borrower and the
     Borrower's Subsidiaries is the sole owner of, legally and beneficially, and
     has good and defensible title in fee simple to, or a valid leasehold
     interest in, all its real property , including, those subject to the
     Mortgages, free and clear of Liens other than Permitted Liens.

4.9  Intellectual Property. Holdings, the Borrower and each of the Borrower's
     Subsidiaries owns, or is licensed to use, all Intellectual Property
     necessary for the conduct of its business as currently conducted. No
     material claim has been asserted or is pending by any Person challenging or
     questioning the use of any Intellectual Property or the validity or
     effectiveness of any Intellectual Property, nor does Parent, Holdings or
     the Borrower know of any valid basis for any such claim. The use of
     Intellectual Property by Holdings, the Borrower and the Borrower's
     Subsidiaries does not infringe on the rights of any Person in any material
     respect.

4.10 Taxes. Each of Parent, Holdings, the Borrower and each of their respective
     Subsidiaries has filed or caused to be filed all federal, state and other
     material tax returns that are required to be filed and has paid all taxes
     shown to be due and payable on said returns or on any material assessments
     made against it or any of its Property and all other material taxes, fees
     or other charges imposed on it or any of its Property by any Governmental
     Authority (other than any taxes, the amount or validity of which are
     currently being contested in good faith by appropriate proceedings and with
     respect to which reserves in conformity with GAAP have been provided on the
     books of Parent, Holdings, the Borrower or any of their respective
     Subsidiaries, as the case may be); the contents of all such material tax
     returns are correct and complete in all material respects, no tax Lien has
     been filed, and, to the knowledge of Parent, Holdings and the Borrower, no
     claim is being asserted, with respect to any such tax, fee or other charge
     (other than any Liens or claims, the amount or validity of which are
     currently being contested in good faith by appropriate proceedings and with
     respect to which reserves



                                       33
<PAGE>

     in conformity with GAAP have been provided on the books of Parent,
     Holdings, the Borrower or any of their respective Subsidiaries, as the case
     may be).

4.11 Federal Regulations. No part of the proceeds of the Term Loans will be used
     for purchasing or carrying any "margin stock" (within the meaning of
     Regulation U) or for the purpose of purchasing, carrying or trading in any
     securities under such circumstances as to involve the Borrower in a
     violation of Regulation X or to involve any broker or dealer in a violation
     of Regulation T. No indebtedness being reduced or retired out of the
     proceeds of the Term Loans was or will be incurred for the purpose of
     purchasing or carrying any "margin stock" (within the meaning of Regulation
     U). Following application of the proceeds of the Term Loans, "margin stock"
     (within the meaning of Regulation U) does not constitute more than 25% of
     the value of the assets of Parent, Holdings, the Borrower and the
     Borrower's Subsidiaries. None of the transactions contemplated by this
     Agreement (including, without limitation, the direct and indirect use of
     proceeds of the Term Loans) will violate or result in a violation of
     Regulation T, Regulation U or Regulation X. If requested by any Lender or
     the Administrative Agent, the Borrower will furnish to the Administrative
     Agent and each Lender a statement to the foregoing effect in conformity
     with the requirements of FR Form G-3 or FR Form U-1 referred to in
     Regulation U.

4.12 Labor Matters. There are no strikes, stoppages, slowdowns or other labor
     disputes against Holdings, the Borrower or any of the Borrower's
     Subsidiaries pending or, to the knowledge of Parent, Holdings or the
     Borrower, threatened that (individually or in the aggregate) could
     reasonably be expected to have a Material Adverse Effect. Hours worked by
     and payment made to employees of Holdings, the Borrower and the Borrower's
     Subsidiaries have not been in violation of the Fair Labor Standards Act or
     any other applicable Requirement of Law dealing with such matters that
     (individually or in the aggregate) could reasonably be expected to have a
     Material Adverse Effect. All payments due from Holdings, the Borrower or
     any of the Borrower's Subsidiaries on account of employee health and
     welfare insurance that (individually or in the aggregate) could reasonably
     be expected to have a Material Adverse Effect if not paid have been paid or
     accrued as a liability on the books of Holdings, the Borrower or the
     relevant Subsidiary.

4.13 ERISA. Except as set forth on Schedule 4.13, neither a Reportable Event nor
     an "accumulated funding deficiency" (within the meaning of Section 412 of
     the Code or Section 302 of ERISA) has occurred during the five-year period
     prior to the date on which this representation is made or deemed made with
     respect to any Plan, and each Plan has complied in all material respects
     with all applicable provisions of ERISA and the Code. No termination of a
     Single Employer Plan has occurred, and no Lien in favor of the PBGC or a
     Plan has arisen, during such five-year period. Except as set forth in
     Schedule 4.13, the present value of all accrued benefits under each Single
     Employer Plan (based on those assumptions used to fund such Plans) did not,
     as of the last annual valuation date prior to the date on which this
     representation is made or deemed made, exceed the value of the assets of
     such Plan allocable to such accrued benefits by a material amount. Neither
     the Borrower nor any Commonly Controlled Entity has had a complete or
     partial withdrawal from any Multiemployer Plan that has resulted or could
     reasonably be expected to result in a material liability under ERISA, and
     neither the Borrower nor any Commonly Controlled Entity would become
     subject to any material liability under ERISA if the Borrower or any such
     Commonly



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<PAGE>
     Controlled Entity were to withdraw completely from all Multiemployer Plans
     as of the valuation date most closely preceding the date on which this
     representation is made or deemed made. No such Multiemployer Plan is in
     Reorganization or Insolvent.

4.14 Investment Company Act; Other Regulations. Neither Parent nor any Loan
     Party is an "investment company", or a company "controlled" by an
     "investment company", within the meaning of the Investment Company Act of
     1940, as amended. Neither Parent nor any Loan Party is subject to
     regulation under any Requirement of Law (other than Regulation X) which
     limits or conditions its ability to incur Indebtedness.

4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 4.15 constitute all
     the Subsidiaries of Holdings as of the Closing Date. Schedule 4.15 sets
     forth as of the Closing Date, the name and jurisdiction of incorporation of
     each Subsidiary of Holdings and, as to each such Subsidiary, the percentage
     and number of each class of Capital Stock owned by Holdings, the Borrower
     and the Borrower's Subsidiaries.

(b)  There are no outstanding subscriptions, options, warrants, calls, rights or
     other agreements or commitments (other than stock options granted to
     employees or directors and directors' qualifying shares) of any nature
     relating to any Capital Stock of the Borrower or any Subsidiary, except as
     disclosed on Schedule 4.15. None of Holdings, the Borrower or any of the
     Borrower's Subsidiaries has issued, or authorized the issuance of, any
     Disqualified Stock. Parent owns, beneficially or of record, 100% of the
     Capital Stock of Holdings, and Holdings owns, beneficially or of record,
     100% of the Capital Stock of the Borrower.

4.16 Use of Proceeds. The proceeds of the Term Loans shall be used solely to
     make a loan to Holdings pursuant to an intercompany note, and shall be used
     by Holdings to make a Loan to Parent pursuant to an intercompany note, and
     to pay related fees and expenses.

4.17 Environmental Matters. Other than exceptions to any of the following that
     could not, individually or in the aggregate, reasonably be expected to
     result in the payment of a Material Environmental Amount:

(a)  Holdings, the Borrower and the Borrower's Subsidiaries: (i) are, and within
     the period of all applicable statutes of limitation have been, in
     compliance with all applicable Environmental Laws; and (ii) reasonably
     believe that compliance with all applicable Environmental Law that is or is
     expected to become applicable to any of them will be timely attained and
     maintained, without material expense.

(b)  Materials of Environmental Concern are not present at, on, under, in, or
     about any real property now or formerly owned, leased or operated by
     Holdings, the Borrower or any of the Borrower's Subsidiaries, or at any
     other location which could reasonably be expected to (i) give rise to
     material liability of Holdings, the Borrower or any of the Borrower's
     Subsidiaries under any applicable Environmental Law or otherwise result in
     costs to Holdings, the Borrower or any of the Borrower's Subsidiaries, or
     (ii) materially interfere with Holdings', the Borrower's or any of the
     Borrower's Subsidiaries' continued operations, or (iii) materially impair
     the fair saleable value of any Real Estate owned or leased by Holdings, the
     Borrower or any of the Borrower's Subsidiaries.



                                       35
<PAGE>

(c)  There is no judicial, administrative, or arbitral proceeding (including any
     notice of violation or alleged violation) under or relating to any
     Environmental Law to which Holdings, the Borrower or any of the Borrower's
     Subsidiaries is, or to the knowledge of Parent, Holdings or the Borrower
     will be, named as a party that is pending or, to the knowledge of Parent,
     Holdings or the Borrower, threatened.

(d)  None of Holdings, the Borrower or any of the Borrower's Subsidiaries has
     received any written request for information, or been notified that it is a
     potentially responsible party under or relating to the federal
     Comprehensive Environmental Response, Compensation, and Liability Act or
     any similar Environmental Law, or with respect to any Materials of
     Environmental Concern.

(e)  None of Holdings, the Borrower or any of the Borrower's Subsidiaries has
     entered into or agreed to any consent decree, order, or settlement or other
     agreement, or is subject to any judgment, decree, or order or other
     agreement, in any judicial, administrative, arbitral, or other forum for
     dispute resolution, relating to compliance with or liability under any
     Environmental Law.

(f)  Except as disclosed in filings made with the Securities and Exchange
     Commission for Parent, Holdings or the Borrower, none of Holdings, the
     Borrower or any of the Borrower's Subsidiaries has assumed or retained, by
     contract or operation of law, any material liabilities of any kind, fixed
     or contingent, known or unknown, under any Environmental Law or with
     respect to any Material of Environmental Concern.

4.18 Accuracy of Information, Etc. No statement or information contained in this
     Agreement, any other Loan Document, or any other document, certificate or
     statement furnished to the Arranger, the Administrative Agent, the
     Syndication Agent or the Lenders or any of them, by or on behalf of Parent,
     Holdings, the Borrower or any of the Borrower's Subsidiaries for use in
     connection with the transactions contemplated by this Agreement or the
     other Loan Documents, contained as of the date such statement, information,
     document or certificate was so furnished, any untrue statement of a
     material fact or omitted to state a material fact necessary in order to
     make the statements contained herein or therein not misleading. The
     projections and pro forma financial information contained in the materials
     referenced above are based upon good faith estimates and assumptions
     believed by management of Parent, Holdings and the Borrower to be
     reasonable at the time made, it being recognized by the Lenders that such
     financial information as it relates to future events is not to be viewed as
     fact and that actual results during the period or periods covered by such
     financial information may differ from the projected results set forth
     therein by a material amount. There is no fact known to Parent, Holdings,
     the Borrower or any of the Borrower's Subsidiaries that could reasonably be
     expected to have a Material Adverse Effect that has not been expressly
     disclosed herein, in the other Loan Documents or in any other documents,
     certificates and written statements furnished to the Arranger, the Agents
     and the Lenders for use in connection with the transactions contemplated
     hereby and by the other Loan Documents.

4.19 Security Documents. (a) The Guarantee and Collateral Agreement is effective
     to create in favor of the Administrative Agent, for the benefit of the
     Secured Parties, a legal, valid, binding and enforceable security interest
     in the Collateral described therein and proceeds and



                                       36
<PAGE>

     products thereof. In the case of the Pledged Stock, when any stock
     certificates representing such Pledged Stock are delivered to the
     Administrative Agent, and in the case of the other Collateral described in
     the Guarantee and Collateral Agreement, when financing statements in
     appropriate form are filed in the offices specified on Schedule 4.19(a)-1
     (which financing statements may be filed by the Administrative Agent at any
     time) and such other filings as are specified on Schedule 3 to the
     Guarantee and Collateral Agreement are made (all of which filings may be
     filed by the Administrative Agent at any time), the Guarantee and
     Collateral Agreement shall constitute a fully perfected Lien on, and
     security interest in, all right, title and interest of the Loan Parties in
     such Collateral and the proceeds and products thereof, as security for the
     Obligations (as defined in the Guarantee and Collateral Agreement), in each
     case prior and superior in right to any other Person (except Permitted
     Liens). Schedule 4.19(a)-2 lists each UCC Financing Statement that (i)
     names any Loan Party as debtor and (ii) will remain on file after the
     Closing Date.

         (b) Upon the due execution thereof, each of the Mortgages will be
effective to create in favor of the Administrative Agent, for the benefit of the
Secured Parties, a legal, valid, binding and enforceable Lien on, and security
interest in, the Mortgaged Properties described, and as defined, therein and
proceeds and products thereof, and when the Mortgages are filed in the offices
specified on Schedule 4.19(b), each such Mortgage shall constitute a fully
perfected first-priority Lien on, and security interest in, all of the Mortgaged
Properties and the proceeds and products thereof, as security for the
Obligations, in each case prior and superior in right to any Liens of any other
Person other than Permitted Liens.

4.20 Solvency. Each Loan Party is and, after giving effect to the incurrence of
     all Indebtedness and obligations being incurred in connection with the Loan
     Documents will be, and will continue to be, Solvent.

4.21 Net Indebtedness; Specified Non-Recourse Debt. On the Closing Date, the net
     Indebtedness of the Borrower and its Subsidiaries in the aggregate (other
     than the Term Loans) shall be approximately as set forth in Schedule
     2.9(b). All Indebtedness listed in Part 1 of Schedule 1.1(d) is Specified
     Non-Recourse Debt and all of the material documents, instruments and
     agreements related to or entered in connection with such Indebtedness,
     including, without limitation, any and all guarantees (completion, payment,
     performance or otherwise), indemnification or other contingent obligations
     of Parent of any of its Subsidiaries, to which Parent or any of its
     Subsidiaries is a party are listed on Schedule 4.21 (collectively, the
     "Specified Non-Recourse Debt Documents"). Part 2 of Schedule 1.1(d) lists
     all of the obligations, contingent or otherwise, of Parent, EMT and WES
     under the Specified Non-Recourse Debt Documents. The loan commitments under
     the Credit Agreement, dated May 23, 2002 (as amended, supplemented or
     otherwise modified from time to time, the "Gulf Liquids Subordinated Credit
     Agreement"), between Gulf Liquids New River Project LLC, a Delaware limited
     liability company ("Gulf Liquids"), and Williams Energy Services, LLC, a
     Delaware limited liability company and a Subsidiary of Parent, have been
     fully utilized by Gulf Liquids and there are no more commitments of Parent
     or any Affiliate thereof to fund any further loans or any other monies
     under the Gulf Liquids Subordinated Credit Agreement or any other "Loan
     Documents" (as defined in the Gulf Liquids Subordinated Credit Agreement).



                                       37
<PAGE>

4.22 Insurance. Each of Holdings, the Borrower and the Borrower's Subsidiaries
     is insured by insurers of recognized financial responsibility against such
     losses and risks and in such amounts as are prudent and customary in the
     businesses in which it is engaged; and none of Holdings, the Borrower or
     any of the Borrower's Subsidiaries (a) has received notice from any insurer
     or agent of such insurer that substantial capital improvements or other
     material expenditures will have to be made in order to continue such
     insurance or (b) has any reason to believe that it will not be able to
     renew its existing insurance coverage as and when such coverage expires or
     to obtain similar coverage from similar insurers at a cost that could not
     reasonably be expected to have a Material Adverse Effect.

4.23 [Intentionally Omitted].

4.24 Hydrocarbon Interests. As of the Closing Date, Schedule 4.24 sets forth a
     list of all of the Hydrocarbon Interests consisting of oil and gas
     leaseholds, mineral interests, royalty and overriding royalty interests in
     which the Borrower or any of its Subsidiaries has an interest.

4.25 Permits. (a) Other than exceptions to any of the following that could not,
     individually or in the aggregate, reasonably be expected to have a Material
     Adverse Effect (or, in the case of Environmental Permits, result in the
     payment of a Material Environmental Amount): (i) each of Holdings, the
     Borrower and the Borrower's Subsidiaries has obtained and holds all Permits
     required in respect of all Real Estate and for any other property otherwise
     operated by or on behalf of, or for the benefit of, such Person and for the
     operation of each of its businesses as presently conducted and as proposed
     to be conducted, (ii) all such Permits are in full force and effect, and
     each of Holdings, the Borrower and the Borrower's Subsidiaries has
     performed and observed all requirements of such Permits, (iii) no event has
     occurred which allows or results in, or after notice or lapse of time would
     allow or result in, revocation or termination by the issuer thereof or in
     any other impairment of the rights of the holder of any such Permit, (iv)
     no such Permits contain any restrictions, either individually or in the
     aggregate, that are materially burdensome to Holdings, the Borrower or any
     of the Borrower's Subsidiaries, or to the operation of any of its
     businesses or any property owned, leased or otherwise operated by such
     Person, (v) each of Holdings, the Borrower and the Borrower's Subsidiaries
     reasonably believes that each of its Permits will be timely renewed and
     complied with, without material expense, and that any additional Permits
     that may be required of such Person will be timely obtained and complied
     with, without material expense and (vi) none of Parent, Holdings or the
     Borrower has any knowledge or reason to believe that any Governmental
     Authority is considering limiting, suspending, revoking or renewing on
     materially burdensome terms any such Permit.

(b)  Except as set forth on Schedule 4.25(b), no consent or authorization of,
     filing with, Permit from, or other act by or in respect of, any
     Governmental Authority is required in connection with the execution,
     delivery, performance, validity or enforceability of, or enforcement of
     remedies (including, without limitation, foreclosure on the Collateral)
     pursuant to, this Agreement and the other Loan Documents.

4.26 Lease Payments. Each of Holdings, the Borrower and the Borrower's
     Subsidiaries has paid all royalties and payments required to be made by it
     under leases of Oil and Gas Properties (except for properties abandoned in
     the ordinary course of business or with respect



                                       38
<PAGE>

     to which the failure to pay such royalties and other payments could not be
     reasonably expect to have a Material Adverse Effect) where any of the
     Collateral is or may be located from time to time (other than any the
     amount or validity of which are currently being contested in good faith by
     appropriate proceedings and with respect to which reserves in conformity
     with GAAP have been provided on the books of Holdings, the Borrower or such
     Subsidiary, as the case may be); no landlord Lien has been filed, and, to
     the knowledge of Parent, Holdings and the Borrower, no claim is being
     asserted, with respect to any such payments.

                        SECTION 5 - CONDITIONS PRECEDENT

5.1  Conditions to Initial Extension of Credit. The agreement of each Lender to
     make the extension of credit requested to be made by it is subject to the
     satisfaction, prior to or concurrently with the making of such extension of
     credit on the Closing Date, of the following conditions precedent:

(a)  Loan Documents. The Administrative Agent shall have received (i) this
     Agreement, executed and delivered by a duly authorized officer of Parent,
     Holdings and the Borrower, (ii) the Guarantee and Collateral Agreement,
     executed and delivered by a duly authorized officer of Parent, Holdings,
     the Borrower and each Subsidiary Guarantor and (iii) if requested by any
     Lender, for the account of such Lender, Term Notes conforming to the
     requirements hereof and executed and delivered by a duly authorized officer
     of the Borrower.

(b)  Pro Forma Balance Sheet; Financial Statements. The Lenders shall have
     received (i) the Pro Forma Balance Sheet, (ii) satisfactory internally
     prepared operating reports of the Borrower and its Subsidiaries as of and
     for the period from August 1, 2001, the date of consummation of the merger
     of Barrett Resource Corporation with and into the Borrower, through
     December 31, 2001 and (iii) satisfactory internally prepared operating
     reports of the Borrower and its Subsidiaries for the six-month period ended
     June 30, 2002.

(c)  Approvals. All governmental and third party approvals (including landlords'
     and other consents) necessary or, in the discretion of the Original
     Lenders, advisable in connection with, the continuing operations of Parent,
     Holdings, the Borrower and the Borrower's Subsidiaries and the transactions
     contemplated hereby shall have been obtained and be in full force and
     effect, and all applicable waiting periods shall have expired without any
     action being taken or threatened by any competent authority which would
     restrain, prevent or otherwise impose adverse conditions on the financing
     contemplated hereby.

(d)  Fees. The Original Lenders, the Arranger, the Syndication Agent and the
     Administrative Agent shall have received all fees required to be paid, and
     all expenses for which invoices have been presented (including, without
     limitation, the reasonable fees, disbursements and other charges of counsel
     to the Agents and the Lenders), on or before the Closing Date. All such
     amounts will be paid with proceeds of Term Loans made on the Closing Date
     and will be reflected in the funding instructions given by the Borrower to
     the Administrative Agent on or before the Closing Date.

(e)  Solvency. The Lenders shall have received a Solvency Certificate executed
     by the chief financial officer of Holdings, the Borrower and each other
     Loan Party and a solvency



                                       39
<PAGE>

     analysis of the chief financial officer of such Loan Parties in form and
     substance satisfactory to the Agents, in each case, which shall document
     the solvency of Holdings, the Borrower and each other Loan Party before and
     after giving effect to the transactions contemplated hereby.

(f)  Lien Searches. The Administrative Agent shall be satisfied with the results
     of a recent lien, tax lien, judgment and litigation search in each of the
     jurisdictions or offices (including, without limitation, in the United
     States Patent and Trademark Office and the United States Copyright Office)
     specified by the Administrative Agent in which UCC financing statements or
     other filings or recordations should be made to evidence or perfect (with
     the priority required under the Loan Documents) security interests in all
     Property of the Loan Parties, and such search shall reveal no Liens on any
     of the assets of Holdings, the Borrower or the Borrower's Subsidiaries
     except for Permitted Liens.

(g)  Closing Certificate. The Administrative Agent shall have received a
     certificate of Parent and each Loan Party, dated as of the Closing Date,
     substantially in the form of Exhibit C, with appropriate insertions and
     attachments.

(h)  Other Certifications.  The Administrative Agent shall have received the
     following:

(i)  a copy of the charter of Parent, Holdings, the Borrower and each of the
     Borrower's Subsidiaries and each amendment thereto, certified (as of a date
     reasonably near the date of the initial extension of credit) as being a
     true and correct copy thereof by the Secretary of State or other applicable
     Governmental Authority of the jurisdiction in which Parent and each such
     Loan Party is organized;

(ii) a copy of a certificate of the Secretary of State or other applicable
     Governmental Authority of the jurisdiction in which each such Loan Party is
     organized, dated reasonably near the date of the initial extension of
     credit, listing the charter of such Loan Party and each amendment thereto
     on file in such office and certifying that (A) such amendments are the only
     amendments to such Person's charter on file in such office, (B) such Person
     has paid all franchise taxes to the date of such certificate and (C) such
     Person is duly organized and in good standing under the laws of such
     jurisdiction;

(iii)a telephonic confirmation from the Secretary of State or other applicable
     Governmental Authority of each jurisdiction in which each such Person is
     organized certifying that Parent, Holdings, the Borrower and each of the
     Borrower's Subsidiaries is duly organized and in good standing under the
     laws of such jurisdiction on the date of the initial extension of credit,
     together with a written confirmatory report in respect thereof prepared by,
     or on behalf of, a filing service acceptable to the Administrative Agent;
     and

(iv) a copy of a certificate of the Secretary of State or other applicable
     Governmental Authority of each jurisdiction in which Parent, Holdings, the
     Borrower and each of the Borrower's Subsidiaries is required to be
     qualified as a foreign corporation or entity.

(i)  Legal Opinions. The Administrative Agent shall have received the following
     executed legal opinions:



                                       40
<PAGE>

(i)  the legal opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to
     Parent, Holdings, the Borrower and the Borrower's Subsidiaries,
     substantially in the form of Exhibit F-1;

(ii) the legal opinion of the general counsel of the Parent, Holdings, the
     Borrower and the Borrower's subsidiaries, substantially in the form of
     Exhibit F-2

(iii)the legal opinion of Davis Graham & Stubbs LLP, counsel to the Borrower,
     substantially in the form of Exhibit F-3; and

(iv) such other legal opinions of local counsel as are requested by the
     Administrative Agent in form and substance satisfactory to the
     Administrative Agent.

                  Each such legal opinion shall cover such other matters
incident to the transactions contemplated by this Agreement and the other Loan
Documents as the Administrative Agent may reasonably require.

(j)  Pledged Stock; Stock Power; Pledged Notes. The Administrative Agent shall
     have received (i) the certificates representing the shares of Capital Stock
     pledged pursuant to the Guarantee and Collateral Agreement, together with
     an undated stock power for each such certificate executed in blank by a
     duly authorized officer of the pledgor thereof and (ii) each promissory
     note pledged to the Administrative Agent pursuant to the Guarantee and
     Collateral Agreement endorsed (without recourse) in blank (or accompanied
     by an executed transfer form in blank satisfactory to the Administrative
     Agent) by the pledgor thereof.

(k)  Filings, Registrations and Recordings. Each document (including, without
     limitation, any UCC financing statement) required by the Security Documents
     or under law or reasonably requested by the Administrative Agent to be
     filed, registered or recorded in order to create in favor of the
     Administrative Agent, for the benefit of the Secured Parties, a perfected
     Lien on, and security interest in, the Collateral described therein, prior
     and superior in right to any other Person (other than Permitted Liens),
     shall have been delivered to the Administrative Agent in proper form for
     filing, registration or recordation.

(l)  Insurance. The Administrative Agent shall have received insurance
     certificates satisfying the requirements of Section 4.24 and of Section 5.3
     of the Guarantee and Collateral Agreement.

(m)  Representations and Warranties. Each of the representations and warranties
     made by Parent or any Loan Party in or pursuant to the Loan Documents shall
     be true and correct on the Closing Date.

(n)  No Default. No Default or Event of Default shall have occurred and be
     continuing on the Closing Date or after giving effect to the extensions of
     credit requested to be made on the Closing Date, Parent shall have provided
     evidence satisfactory to the Administrative Agent of all consents and
     waivers necessary under Parent's credit facilities and a borrowing
     availability thereunder of at least $400,000,000.

(o)  Capital Structure. The capital structure of Holdings, the Borrower and its
     Subsidiaries both before and after giving effect to the borrowing of the
     Term Loans and the use of the proceeds



                                       41
<PAGE>

     of the Term Loans as contemplated in this Agreement shall be satisfactory
     to the Administrative Agent.

(p)  Satisfactory Documentation. The loan by the Borrower to Holdings, and by
     Holdings to Parent, of the net proceeds of the Term Loans shall have been
     consummated by documentation satisfactory to the Agents, and no provision
     of any such documentation shall have been waived, amended, supplemented or
     otherwise amended without the consent of the Agents.

(q)  Reserve Reports. The Lenders shall have received Reserve Reports dated as
     of December 31, 2001, covering the Hydrocarbon Interests of the Borrower
     and its Subsidiaries in form and substance satisfactory to the
     Administrative Agent.

(r)  Funds Received on Closing Date. Parent shall have received $3,400,000,000
     (including, without limitation, evidence of available liquidity under its
     credit facilities), including proceeds of the Terms Loans, all of which
     shall be funded into escrow and none of which shall be released until all
     such funds are released. On the Closing Date, Parent shall have borrowed at
     least $5,000,000 under its $700,000,000 revolving credit facility. The
     Administrative Agent shall be satisfied with the sufficiency of the amounts
     available to the Borrower to meet the Borrower's and its Subsidiaries'
     ongoing working capital needs after the borrowing of the Term Loans
     hereunder. The Borrower shall have cash on hand on the Closing Date, after
     giving effect to the transactions contemplated by the Loan Documents, of
     not less than $65,000,000, free of Liens.

(s)  Intercompany Indebtedness. The Lenders shall have receive a schedule in
     form and substance satisfactory to them setting forth the Indebtedness
     between Parent or any of its Affiliates (other than Holdings and its
     Subsidiaries), on the one hand, and Holdings, the Borrower or any of the
     Borrower's Subsidiaries, on the other hand. Parent, Holdings and the
     Borrower shall deliver evidence satisfactory to the Administrative Agent
     that immediately prior to the borrowing of the Term Loans, there are no
     intercompany balances owed by Holdings, the Borrower or any of the
     Borrower's Subsidiaries to Parent or any of its Subsidiaries (other than
     Holdings and its Subsidiaries).

(t)  Oil and Gas Mortgages. The Lenders shall have received evidence
     satisfactory to them of the filing of oil and gas mortgages on all of the
     Borrower's real property in the Powder River Basin, the Piecance Basin and
     the Raton Basin, which mortgages the Borrower has represented to cover at
     least 85% of the value of the Borrower's and its Subsidiaries' Hydrocarbon
     Interests.

(u)  Environmental. The Lenders shall be satisfied with the environmental
     affairs of the Borrower and its Subsidiaries.

(v)  Miscellaneous. The Administrative Agent shall have received such other
     documents, agreements, certificates and information as it shall reasonably
     request.



                                       42
<PAGE>

                       SECTION 6 - AFFIRMATIVE COVENANTS

                  Parent, Holdings and the Borrower hereby jointly and severally
agree that, so long as any Term Loan or other amount is owing to any Lender, the
Arranger or any Agent hereunder, each of Parent, Holdings and the Borrower
shall, and shall cause each of the Borrower's Subsidiaries to:

6.1  Financial Statements. Furnish to each Agent and each Lender:

(a)  as soon as available, but in any event within 105 days after the end of
     each fiscal year of the Borrower, a copy of the audited consolidated
     balance sheet of the Borrower and its consolidated Subsidiaries as at the
     end of such year and the related audited consolidated statements of income
     and of cash flows for such year, setting forth in each case in comparative
     form the figures for the previous year, reported on without a "going
     concern" or like qualification or exception, or qualification arising out
     of the scope of the audit, by a firm of independent certified public
     accountants of nationally recognized standing satisfactory to the
     Administrative Agent;

(b)  as soon as available, but in any event not later than 60 days after the end
     of each of the first three quarterly periods of each fiscal year of the
     Borrower, the unaudited consolidated balance sheet of the Borrower and its
     consolidated Subsidiaries as at the end of such quarter and the related
     unaudited consolidated statements of income and of cash flows for such
     quarter and the portion of the fiscal year through the end of such quarter,
     setting forth in each case in comparative form the figures for the previous
     year, certified by a Responsible Officer as being fairly stated in all
     material respects (subject to normal year-end audit adjustments); and

(c)  as soon as available, but in any event not later than 45 days after the end
     of each month occurring during each fiscal year of the Borrower (other than
     the third, sixth, ninth and twelfth such month), the unaudited consolidated
     balance sheet of the Borrower and the Borrower's Subsidiaries as at the end
     of such month and the related unaudited consolidated statements of income
     and of cash flows for such month and the portion of the fiscal year through
     the end of such month, setting forth in each case in comparative form the
     figures for the previous year, certified by a Responsible Officer as being
     fairly stated in all material respects (subject to normal year-end audit
     adjustments);

all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).

6.2  Certificates; Other Information. Furnish to each Agent and each Lender, or,
     in the case of clause (i), to the relevant Lender:

(a)  concurrently with the delivery of the financial statements referred to in
     Section 6.1(a), a certificate of the independent certified public
     accountants reporting on such financial statements stating that in making
     the examination necessary therefor no knowledge was obtained of any Default
     or Event of Default, except as specified in such certificate;



                                       43
<PAGE>

(b)  concurrently with the delivery of any financial statements pursuant to
     Section 6.1, (i) a certificate of a Responsible Officer stating that, to
     the best of each such Responsible Officer's knowledge, Parent and each Loan
     Party during such period has observed or performed all of its covenants and
     other agreements, and satisfied every condition, contained in this
     Agreement and the other Loan Documents to which it is a party to be
     observed, performed or satisfied by it, and that such Responsible Officer
     has obtained no knowledge of any Default or Event of Default except as
     specified in such certificate and (ii) in the case of quarterly or annual
     financial statements, (x) a Compliance Certificate containing all
     information and calculations necessary for determining compliance by
     Parent, Holdings, the Borrower and the Borrower's Subsidiaries with Section
     7.1 as of the last day of the fiscal quarter or fiscal year of the
     Borrower, as the case may be, and (y) to the extent not previously
     disclosed to the Administrative Agent in writing, a listing of any county,
     state, territory, province, region or any other jurisdiction, or any
     political subdivision thereof, whether of the United States or otherwise,
     where any Loan Party keeps inventory or equipment (other than mobile goods)
     and of any Intellectual Property acquired by any Loan Party since the date
     of the most recent list delivered pursuant to this clause (y) (or, in the
     case of the first such list so delivered, since the Closing Date);

(c)  concurrently with any Compliance Certificate delivered pursuant to
     paragraph (b) above, (i) a production statement that identifies the most
     recent information available relating to the gross volumes of Hydrocarbons
     produced in the aggregate from the Hydrocarbon Interests of the Borrower
     and its Subsidiaries and (ii) a statement of revenues and expenses
     attributable to the Hydrocarbon Interests of the Borrower and its
     Subsidiaries for such fiscal quarter ended;

(d)  as soon as available, and in any event no later than 45 days after the end
     of each fiscal year of the Borrower, a detailed consolidated budget for the
     following fiscal year (including a projected consolidated balance sheet of
     the Borrower and the Borrower's Subsidiaries as of the end of the following
     fiscal year, and the related consolidated statements of projected cash
     flow, projected changes in financial position and projected income), and,
     as soon as available, significant revisions, if any, of such budget and
     projections with respect to such fiscal year (collectively, the
     "Projections"), which Projections shall in each case be accompanied by a
     certificate of a Responsible Officer stating that such Projections are
     based on reasonable estimates, information and assumptions and that such
     Responsible Officer has no reason to believe that such Projections are
     incorrect or misleading in any material respect;

(e)  within 60 days after the end of each fiscal quarter of the Borrower, a
     narrative discussion and analysis of the financial condition and results of
     operations of the Borrower and the Borrower's Subsidiaries for such fiscal
     quarter and for the period from the beginning of the then current fiscal
     year to the end of such fiscal quarter, as compared to the portion of the
     Projections covering such periods and to the comparable periods of the
     previous year;

(f)  no later than 10 Business Days prior to the effectiveness thereof, copies
     of substantially final drafts of any proposed amendment, supplement, waiver
     or other modification with respect the Governing Documents of Holdings, the
     Borrower or any of the Borrower's Subsidiaries;

(g)  within five days after the same are sent, copies of all financial
     statements and reports that Holdings, the Borrower or any of the Borrower's
     Subsidiaries sends to the holders of any



                                       44
<PAGE>

     class of its debt securities or public equity securities and, within five
     days after the same are filed, copies of all financial statements and
     reports that Holdings, the Borrower or any of the Borrower's Subsidiaries
     may make to, or file with, the SEC;

(h)  as soon as possible and in any event within 5 days of obtaining knowledge
     thereof: (i) notice of any development, event, or condition that,
     individually or in the aggregate with other developments, events or
     conditions, could reasonably be expected to result in the payment by
     Holdings, the Borrower or any of the Borrower's Subsidiaries, in the
     aggregate, of a Material Environmental Amount; and (ii) any notice that any
     Governmental Authority may condition approval of, or any application for,
     an Environmental Permit or any other material Permit held by Holdings, the
     Borrower or any of the Borrower's Subsidiaries on terms and conditions that
     are materially burdensome to Holdings, the Borrower or any of the
     Borrower's Subsidiaries, or to the operation of any of its businesses or
     any property owned, leased or otherwise operated by such Person;

(i)  to the extent not included in clauses (a) through (h) above, no later than
     the date the same are required to be delivered thereunder, copies of all
     agreements, documents or other instruments (including, without limitation,
     (i) audited and unaudited, pro forma and other financial statements,
     reports, forecasts, and projections, together with any required
     certifications thereon by independent public auditors or officers of
     Holdings, the Borrower or any of the Borrower's Subsidiaries or otherwise),
     (ii) press releases and (iii) statements or reports) furnished to any other
     holder of the securities of Holdings, the Borrower or any of the Borrower's
     Subsidiaries;

(j)  weekly, on the first Business Day of each week (or on a more frequent basis
     if requested by the Administrative Agent), a certificate of the chief
     financial officer of Parent in the form of Exhibit L (the "No Parent
     Liquidity Event Certificate") (i) certifying that no Parent Liquidity Event
     has occurred as of such date, (ii) with a 12-month liquidity projection as
     of such date, (iii) certifying that all lines of credit, including, but not
     limited to, lines of credit pursuant to the Williams Multiyear Credit
     Agreement and the L/C Agreement (as defined in the Williams Multiyear
     Credit Agreement), included in such 12-month liquidity projection are
     available (by virtue of the fact that the conditions precedent to the
     issuance of a letter of credit or advance are satisfied or satisfiable) as
     of such date and will be, to the best of Parent's knowledge, available on
     the projected date of incurrence of such Indebtedness, and (iv) certifying
     as of such date and, to the best of Parent's knowledge, on the projected
     date of incurrence of such Indebtedness that the incurrence of such
     Indebtedness will not violate any Requirement of Law or violate or result
     in a default or event of default under any Contractual Obligation of Parent
     (or a Subsidiary thereof, other than Holdings, the Borrower or any of the
     Borrower's Subsidiaries), Holdings, the Borrower or any of the Borrower's
     Subsidiaries. Each of Parent, Holdings and the Borrower agrees that each No
     Parent Liquidity Event Certificate shall be delivered without modification
     (other than with respect to the date thereof) and without any
     qualifications, exclusions or exceptions. In determining Parent's forward
     liquidity, Parent may take into account asset sales or other liquidity
     events if, but only if, at the date of the projection Parent shall have
     initiated a Disposition process related to such liquidity event reasonably
     satisfactory to the Administrative Agent and determined by the
     Administrative Agent to be reasonably likely to result in the consummation
     of such proposed Disposition or liquidity event within such 12-month
     period);



                                       45
<PAGE>

(k)  no later than 45 days following the Closing Date, Reserve Reports with
     respect to the Hydrocarbon Interests of the Borrower and its Subsidiaries
     dated as of July 1, 2002 accompanied by a report thereon by Ryder Scott
     satisfactory to the Administrative Agent (other than with respect to the
     reserves located in the Powder River Basin and the Raton Basin, as to which
     the Borrower shall deliver a Reserve Report dated as of July 1, 2002
     accompanied by a report thereon by Netherland Sewel satisfactory to the
     Administrative Agent), each of which shall be in form and substance
     satisfactory to the Administrative Agent. Such Reserve Reports shall not
     contain information materially worse, taken as a whole, than the
     information contained in the Reserve Reports with three price cases as of
     July 1, 2001 previously delivered pursuant to Section 5.1 (except with
     respect to commodity prices), as determined by the Administrative Agent in
     their reasonable discretion;

(l)  no later than 75 days after the Closing Date, (i) audited consolidated
     financial statements for the Borrower and its Subsidiaries as of and for
     the year ended December 31, 2001, accompanied by the unqualified opinion of
     an independent auditing firm satisfactory to the Administrative Agent and
     (ii) unaudited interim consolidated financial statements as of and for the
     six months ended June 30, 2002, accompanied by the interim review report
     pursuant to SAS 71 of such independent auditors. None of the foregoing
     financial statements shall be different in any materially adverse respect
     from the internally prepared operating reports as of and for the
     aforementioned dates delivered pursuant to Section 5.1; and

(m)  furnish to the Administrative Agent, within 60 days of identification
     thereof by the Administrative Agent, limited mortgage title opinions in
     form and content reasonably satisfactory to the Administrative Agent
     showing the Administrative Agent as having a valid and perfected
     first-priority Lien (subject to Permitted Liens) covering the Borrower's
     interest in at least 250 producing wells included in the Oil and Gas
     Properties, as selected by the Administrative Agent (the "Initial Title
     Opinions"). If the Initial Title Opinions show material defects to title
     which render the Borrower's title to its interests in wells representing
     more than 10% of the aggregate reserve value of the examined wells less
     than defensible in accordance with oil and gas industry standards, then the
     Administrative Agent may request additional limited mortgage title opinions
     covering an additional 50 producing wells included in the Oil and Gas
     Properties to be delivered within 45 days from the Administrative Agent's
     request therefor (the "Second Tranche Title Opinions"). If the Second
     Tranche Title Opinions show material defects to title which render the
     Borrower's title to its interests in wells representing more than 10% of
     the aggregate reserve value of all the examined wells less than defensible
     in accordance with oil and gas industry standards, then the Administrative
     Agent may request additional limited mortgage title opinions covering an
     additional 50 wells included in the Oil and Gas Properties to be delivered
     within 45 days from the Administrative Agent's request therefor; and

(n)  promptly, such additional financial and other information as any Lender may
     from time to time reasonably request.

6.3  Payment of Obligations. Pay, discharge or otherwise satisfy at or before
     maturity or before they become delinquent, as the case may be, all its
     material obligations of whatever nature, except where the amount or
     validity thereof is currently being contested in good faith by appropriate
     proceedings and reserves in conformity with GAAP with respect thereto have


                                       46
<PAGE>

     been provided on the books of Holdings, the Borrower or the Borrower's
     Subsidiaries, as the case may be.

6.4  Conduct of Business and Maintenance of Existence, Etc. (a) (i) Preserve,
     renew and keep in full force and effect its corporate, partnership or
     limited liability company existence and (ii) take all reasonable action to
     maintain all rights, privileges, franchises Permits and licenses necessary
     or desirable in the normal conduct of its business, except, in each case,
     as otherwise permitted by Section 7.4 and except, in the case of clause
     (ii) above, to the extent that failure to do so could not reasonably be
     expected to have a Material Adverse Effect; and (b) to the extent not in
     conflict with this Agreement or the other Loan Documents comply with all
     Contractual Obligations and Requirements of Law except to the extent that
     failure to comply therewith could not, in the aggregate, reasonably be
     expected to have a Material Adverse Effect.

6.5  Maintenance of Property; Leases; Insurance. (a) Keep all Property and
     systems useful and necessary in its business in good working order and
     condition, ordinary wear and tear excepted.

(b)  Maintain all rights of way, easements, grants, privileges, licenses,
     certificates, and permits necessary or advisable for the use of any Real
     Estate and will not, without the prior written consent of the
     Administrative Agent, consent to any public or private restriction as to
     the use of any Real Estate.

(c)  Comply with the terms of each lease in respect of Oil and Gas Properties so
     as to not permit any material uncured default on its part to exist in
     respect of such lease and renew the terms of such leases on commercially
     reasonable terms, except such defaults and expiration of leases that could
     not be reasonably expected to have a Material Adverse Effect.

(d)  Maintain with financially sound and reputable insurance companies insurance
     on all its Property (including, without limitation, all inventory,
     equipment and vehicles) in at least such amounts and against at least such
     risks as are usually insured against in the same general area by companies
     engaged in the same or a similar business; and furnish to the
     Administrative Agent with copies for each Secured Party, upon written
     request, full information as to the insurance carried; provided that in any
     event each of Holdings, the Borrower and the Borrower's Subsidiaries will
     maintain, to the extent obtainable on commercially reasonable terms, (i)
     property insurance on an all risks basis (including the perils of flood and
     quake, loss by fire, explosion and theft and such other risks and hazards
     as are covered by an all risk policy), covering the repair or replacement
     cost, business interruption and extra expense (which shall include
     reconstruction costs and business interruption losses as are otherwise
     generally available to similar businesses), and (ii) public liability
     insurance, such property insurance shall include to the satisfaction of the
     Administrative Agent coverage for the increased cost of construction,
     debris removal and/or demolition expenses incurred as a result of the
     application of any building law and/or ordinance. All such insurance with
     respect to each of Holdings, the Borrower and the Borrower's Subsidiaries
     shall be provided by insurers or re-insurers which (x) in the case of
     United States insurers and re-insurers, have an A.M. Best rating of not
     less than A- with respect to primary insurance and B+ with respect to
     excess insurance and (y) in the case of



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<PAGE>

     non-United States insurers or re-insurers, the providers of at least 80% of
     such insurance have either an ISI policyholders rating of not less than A,
     an A.M. Best rating of not less than A- or a surplus of not less than
     $500,000,000 with respect to primary insurance, and an ISI policyholders
     rating of not less than BBB or an A.M. Best rating of not less than B+ with
     respect to excess insurance, or such other insurers as the Administrative
     Agent may approve in writing. To the extent obtainable from the Borrower's
     and its Subsidiaries' insurers, all insurance shall (i) provide that no
     cancellation, material reduction in amount or material change in coverage
     thereof shall be effective until at least 30 days after receipt by the
     Administrative Agent of written notice thereof, (ii) contain a waiver of
     subrogation against any Secured Party, (iii) contain a standard
     noncontributory mortgagee clause naming the Administrative Agent (and/or
     such other party as may be designated by the Administrative Agent) as the
     party to which all payments made by such property insurance company shall
     be paid, (iv) if requested by the Administrative Agent, provide that none
     of Holdings, the Borrower or any of the Borrower's Subsidiaries, any
     Secured Party or any other Person shall be a co-insurer under such
     insurance policies, and (v) be reasonably satisfactory in all other
     respects to the Administrative Agent. Each Secured Party shall be named as
     an additional insured on all liability insurance policies of each of
     Holdings, the Borrower and the Borrower's Subsidiaries and the
     Administrative Agent shall be named as loss payee on all property insurance
     policies of each such Person.

(e)  Deliver to the Administrative Agent on behalf of the Secured Parties, (i)
     on the Closing Date, a certificate dated such date showing the amount and
     types of insurance coverage as of such date, (ii) upon request of any
     Secured Party from time to time, full information as to the insurance
     carried, (iii) promptly following receipt of notice from any insurer, a
     copy of any notice of cancellation or material change in coverage from that
     existing on the Closing Date, (iv) forthwith, notice of any cancellation or
     non-renewal of coverage by any of Holdings, the Borrower or any of the
     Borrower's Subsidiaries and (v) promptly after such information is
     available to any of Holdings, the Borrower or any of the Borrower's
     Subsidiaries, full information as to any claim for an amount in excess of
     $1,000,000 with respect to any property and casualty insurance policy
     maintained by any of Holdings, the Borrower or the Borrower's Subsidiaries.

(f)  Preserve and protect the Lien status of each respective Mortgage and, if
     any Lien (other than unrecorded Liens permitted under Section 7.3 that
     arise by operation of law and other Liens permitted under Section
     7.3(b)(vi)) is asserted against a Mortgaged Property, promptly and at its
     expense, give the Administrative Agent a detailed written notice of such
     Lien and pay the underlying claim in full or take such other action so as
     to cause it to be released or bonded over in a manner satisfactory to the
     Administrative Agent.

6.6  Inspection of Property; Books and Records; Discussions. (a) Keep proper
     books of records and account in which full, true and correct entries in
     conformity with GAAP and all Requirements of Law shall be made of all
     dealings and transactions in relation to its business and activities and
     (b) permit representatives of any Lender to visit and inspect any of its
     properties and examine and, at the Borrower's Subsidiaries' expense, make
     abstracts from any of its books and records at any reasonable time and as
     often as may reasonably be desired and to discuss the business, operations,
     properties and financial and other condition of Parent, Holdings, the
     Borrower and the Borrower's Subsidiaries with officers and



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<PAGE>

     employees of Parent, Holdings, the Borrower and the Borrower's Subsidiaries
     and with their respective independent certified public accountants.

6.7  Notices. Promptly give notice to the Administrative Agent and each Lender
     of:

(a)  the occurrence of any Default or Event of Default;

(b)  any (i) default or event of default (or alleged default) under any
     Contractual Obligation of Holdings, the Borrower or any of the Borrower's
     Subsidiaries or (ii) litigation, investigation or proceeding which may
     exist at any time between Holdings, the Borrower or any of the Borrower's
     Subsidiaries and any Governmental Authority, that in either case, if not
     cured or if adversely determined, as the case may be, could reasonably be
     expected to have a Material Adverse Effect;

(c)  any litigation or proceeding affecting Holdings, the Borrower or any of the
     Borrower's Subsidiaries in which the amount involved is $1,000,000 or more
     and not covered by insurance or in which injunctive or similar relief is
     sought;

(d)  the following events, as soon as possible and in any event within 30 days
     after Holdings, the Borrower or any of the Borrower's Subsidiaries knows or
     has reason to know thereof: (i) the occurrence of any Reportable Event with
     respect to any Plan, a failure to make any required contribution to a Plan,
     the creation of any Lien in favor of the PBGC or a Plan or any withdrawal
     from, or the termination, Reorganization or Insolvency of, any
     Multiemployer Plan or (ii) the institution of proceedings or the taking of
     any other action by the PBGC or the Borrower or any Commonly Controlled
     Entity or any Multiemployer Plan with respect to the withdrawal from, or
     the termination, Reorganization or Insolvency of, any Plan;

(e)  any development or event that has had or could reasonably be expected to
     have a Material Adverse Effect; and

(f)  any notice of default given to the Borrower or any of the Borrower's
     Subsidiaries from a landlord in connection with any leased property where
     inventory of the Borrower or the Borrower's Subsidiaries is located.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action Holdings, the Borrower or the relevant Subsidiary
proposes to take with respect thereto.

6.8  Environmental Laws. (a) Comply in all material respects with, and ensure
     compliance in all material respects by all tenants and subtenants, if any,
     with, all applicable Environmental Laws and Environmental Permits, and
     obtain, maintain and comply in all material respects with and maintain, and
     ensure that all tenants and subtenants obtain, maintain and comply in all
     material respects with and maintain, any and all licenses, approvals,
     notifications, registrations or permits required by applicable
     Environmental Laws.

(b)  Conduct and complete all material investigations, studies, sampling and
     testing, and all remedial, removal and other actions required under
     Environmental Laws and promptly comply in all material respects with all
     lawful orders and directives of all Governmental Authorities regarding
     Environmental Laws.



                                       49
<PAGE>

6.9  Parent Liquidity Event. Within two Business Days following the occurrence
     of a Parent Liquidity Event or Default (provided that the foregoing shall
     not limit the rights of the Administrative Agent or the Lenders set forth
     in Section 8), Parent shall retain Lehman Brothers Inc. or an Affiliate
     thereof and another independent financial advisor reasonably acceptable to
     the Original Lenders to commence a process with respect to the consummation
     of a Company Sale for fair value and such Company Sale shall occur within
     75 days of such Parent Liquidity Event or such Default (provided that the
     foregoing shall not limit the rights of the Administrative Agent or the
     Lenders set forth in Section 8). Parent shall cause Lehman Brothers Inc. or
     such Affiliate and such other independent financial advisor to report to
     the Administrative Agent on the status of such process on a weekly basis.

6.10 Additional Collateral, Guarantors, Etc.

(a)  With respect to any Property acquired after the Closing Date, the Borrower
     or any of the Borrower's Subsidiaries (other than any Property described in
     paragraphs (b) or (c) of this Section 6.10), promptly (and, in any event,
     within 10 days following the date of such acquisition) (i) execute and
     deliver to the Administrative Agent (A) Mortgages, (B) such amendments to
     the Guarantee and Collateral Agreement or (C) such other documents as the
     Administrative Agent deems necessary or advisable to grant to the
     Administrative Agent, for the benefit of the Secured Parties, a security
     interest in such Property and (ii) take all actions necessary or advisable
     to grant to the Administrative Agent, for the benefit of the Secured
     Parties, a perfected first-priority security interest (subject to Permitted
     Liens) in such Property, including, without limitation, the filing of
     Mortgages or UCC financing statements in such jurisdictions as may be
     required by the Guarantee and Collateral Agreement or by law or as may be
     requested by the Administrative Agent.

(b)  In the case of any Wholly-Owned Subsidiary of any Loan Party that is a
     Domestic Subsidiary, such Loan Party shall cause such Wholly-Owned
     Subsidiary to execute a supplement, amendment or joinder or otherwise
     become a party to the guaranty contained in the Guarantee and Collateral
     Agreement to the satisfaction of the Administrative Agent.

(c)  Notwithstanding anything to the contrary in this Section 6.10, paragraph
     shall not apply to any Property or new Subsidiary created or acquired after
     the Closing Date, as applicable, as to which the Administrative Agent has
     determined in its sole discretion that the collateral value thereof is
     insufficient to justify the difficulty, time and/or expense of obtaining a
     perfected security interest therein.

(d)  The Borrower shall (i) execute and deliver to the Administrative Agent by
     November 15, 2002 a Control Agreement and any other documents necessary or
     desirable to enable the Administrative Agent (for the benefit of the
     Lenders) to have a perfected security interest in and "control" (within the
     meaning of the UCC ) of the Posted Collateral (as defined in the Required
     Hedge Agreement) and (ii) maintain such perfected security interest in the
     Posted Collateral until the Obligations are paid in full in cash.

6.11 [Intentionally Omitted].



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<PAGE>

6.12 Use of Proceeds. Use the proceeds of the Term Loans only for the purposes
     specified in Section 4.16.

6.13 [Intentionally Omitted].

6.14 Further Assurances. From time to time execute and deliver, or cause to be
     executed and delivered, such additional instruments, certificates or
     documents, and take all such actions, as the Administrative Agent may
     reasonably request, for the purposes of implementing or effectuating the
     provisions of this Agreement and the other Loan Documents, or of more fully
     perfecting or renewing the rights of the Administrative Agent and the
     Lenders with respect to the Collateral (or with respect to any additions
     thereto or replacements or proceeds or products thereof or with respect to
     any other property or assets hereafter acquired by the Borrower or any
     Subsidiary which may be deemed to be part of the Collateral) pursuant
     hereto or thereto. Upon the exercise by the Administrative Agent or any
     Lender of any power, right, privilege or remedy pursuant to this Agreement
     or the other Loan Documents which requires any consent, approval,
     recording, qualification or authorization of any Governmental Authority,
     the Borrower will execute and deliver, or will cause the execution and
     delivery of, all applications, certifications, instruments and other
     documents and papers that the Administrative Agent or such Lender may be
     required to obtain from the Borrower or any of the Borrower's Subsidiaries
     for such governmental consent, approval, recording, qualification or
     authorization.

6.15 Other Provisions Relating to Holdings and the Borrower.

(a)  Parent, Holdings and the Borrower shall hedge the Borrower's commodity
     price risk as set forth on Schedule 6.15(a).

(b)  Holdings and the Borrower shall (a) do all things necessary to permit each
     of the Original Lenders to appoint a representative to act as an observer
     at all meetings of the Board of Directors of the Borrower or committees
     thereof and (b) shall provide to the Original Lenders (i) all notices of
     such meetings when they are sent to the members of the Board of Directors
     or any such committee, as the case may be, and (ii) all information
     distributed to the members of the Board of Directors or such committee in
     advance of and in connection with any such meeting.

6.16 Capital Expenditures. The Borrower and its Subsidiaries shall make Capital
     Expenditures in the ordinary course consistent with past practice.

                         SECTION 7 - NEGATIVE COVENANTS

                  Parent, Holdings and the Borrower hereby jointly and severally
agree that, so long as any Obligations are owing to any Lender, the Arranger or
any Agent hereunder, Holdings and the Borrower shall not, and the Borrower shall
not permit any of its Subsidiaries to, directly or indirectly:

7.1  Financial Condition Covenants.



                                       51
<PAGE>

(a)  Consolidated Interest Coverage Ratio. On the last day of any fiscal
     quarter, permit the Consolidated Interest Coverage Ratio of the Borrower to
     be less than 1.50 to 1.00 for any four consecutive fiscal quarter period
     beginning two fiscal quarters prior to such date and ending two fiscal
     quarters subsequent to such date; provided that the financial information
     used for the subsequent two fiscal-quarter period shall be the relevant
     information disclosed in the most recent Projections delivered to the
     Administrative Agent.

(b)  Consolidated Fixed Charge Coverage Ratio. On the last day of any fiscal
     quarter, permit the Consolidated Fixed Charge Coverage Ratio of the
     Borrower to be less than 1.15 to 1.00 for any four consecutive fiscal
     quarter period beginning two fiscal quarters prior to such date and ending
     two fiscal quarters subsequent to such date; provided that the financial
     information used for the subsequent two fiscal-quarter period shall be the
     relevant information disclosed in the most recent Projections delivered to
     the Administrative Agent.

7.2  Limitation on Indebtedness. Create, incur, assume or suffer to exist any
     Indebtedness, except:

(a)  Indebtedness of any Loan Party created under any Loan Document;

(b)  Unsecured Indebtedness of the Borrower to any Solvent Subsidiary and of any
     Wholly Owned Subsidiary Guarantor to the Borrower or any other Solvent
     Subsidiary;

(c)  Indebtedness permitted by Section 7.16;

(d)  Indebtedness of the Borrower and the Borrower's Subsidiaries outstanding on
     the date hereof and listed on Schedule 7.2(d), including extensions,
     renewals or refinancings thereof; provided that any such extension, renewal
     or refinancing (i) is in an aggregate principal amount not greater than the
     principal amount of the Indebtedness being extended, renewed or refinanced
     and (ii) does not shorten the final maturity or average weighted maturity
     of the Indebtedness being extended, renewed or refinanced;

(e)  Indebtedness of Holdings pursuant to the Subordinated Guaranty;

(f)  Letters of credit issued to support Required Hedge Agreements; and

(g)  Surety bonds and performance and guarantee bonds required in the ordinary
     course of the Borrower's exploration and production activities (other than
     any performance bonds required in connection with prepaid delivery
     obligations) in an aggregate principal amount not to exceed $30,000,000.

7.3  Limitation on Liens. Other than with respect to the Bison Entities, create,
     incur, assume or suffer to exist any Lien upon any of its Property, whether
     now owned or hereafter acquired, except for (a) with respect to Holdings,
     Liens granted pursuant to the Loan Documents and (b) with respect to the
     Borrower and its Subsidiaries only, the following Liens:

(i)  Lessors' royalties, overriding royalties, reversionary interests and
     similar burdens;



                                       52
<PAGE>

(ii) Any required third-party consents to assignment of leases and contracts and
     preferential purchase rights;

(iii)Liens for taxes or assessments not yet due or not yet delinquent or, if
     delinquent, that are being contested in good faith in the normal course of
     business and for which adequate reserves are maintained in accordance with
     GAAP;

(iv) all rights to consent by, required notices to, filings with, or other
     actions by Governmental Authorities in connection with the sale or
     conveyance of the assets if the same is customarily obtained subsequent to
     such sale or conveyance;

(v)  Rights of reassignment upon the surrender or expiration of any lease;

(vi) easements, rights-of-way, servitudes, permits, surface leases and other
     rights with respect to surface operations on, over or in respect of any of
     the Oil and Gas Properties or any restriction on access thereto and that do
     not materially interfere with the operation of the affected Oil and Gas
     Property;

(vii)Materialman's, mechanics', repairman's, employees', contractors',
     operators or other similar Liens or charges arising in the ordinary course
     of business incidental to construction, maintenance or operation of the
     assets of Holdings, the Borrower or the Borrower's Subsidiaries, (i) if
     they have not been filed pursuant to law and the time for filing has
     expired, (ii) if filed, they have not yet become due and payable or payment
     is being withheld as provided by law or (iii) if their validity is being
     contested in good faith by appropriate action;

(viii) pledges or deposits in connection with workers' compensation,
     unemployment insurance and other social security legislation;

(ix) Liens, pledges or deposits by or on behalf of the Borrower or any of the
     Borrower's Subsidiaries to secure the performance of bids, trade contracts
     (other than for borrowed money), leases, statutory obligations, surety and
     appeal bonds, performance bonds and other obligations of a like nature
     incurred in the ordinary course of business;

(x)  Liens in existence on the date hereof listed on Schedule 7.3(b)(x),
     securing Indebtedness permitted by Section 7.2(d), provided that no such
     Lien is spread to cover any additional Property after the Closing Date and
     that the amount of Indebtedness secured thereby is not increased;

(xi) any interest or title of a lessor under any lease entered into by the
     Borrower or any of the Borrower's Subsidiaries in the ordinary course of
     its business and covering only the assets so leased;

(xii)Liens arising out of all presently existing and future division and
     transfer orders, advance payment agreements, processing contracts, gas
     processing plant agreements, operating agreements, gas balancing or
     deferred production agreements, pooling, unitization or communitization
     agreements, pipeline, gathering or transportation agreements, platform
     agreements, drilling contracts, injection or repressuring agreements,
     cycling agreements,



                                       53
<PAGE>

     construction agreements, salt water or other disposal agreements, leases or
     rental agreements, farm-out and farm-in agreements, exploration and
     development agreements, and any and all other contracts or agreements
     covering, arising out, used or useful in connection with or pertaining to
     the exploration, development, operation, production, sale, use, purchase,
     exchange, storage, separation, dehydration, treatment, compression,
     gathering, transportation, processing, improvement, marketing, disposal, or
     handling of any Hydrocarbon Interest of the Borrower or any Subsidiary
     thereof; provided that such agreements are entered into in the ordinary
     course of business and contain terms customary for such agreements in the
     industry; and provided further that no Liens described in this paragraph
     (j) shall be granted or created in connection with the incurrence of
     Indebtedness;

(xiii) Rights reserved to or vested in any Governmental Authority to control or
     regulate any of the Oil and Gas Properties in any manner and all
     Requirements of Law of general applicability in that area;

(xiv)Liens arising out of operating agreements, unitization and pooling
     agreements and production sales contracts securing amounts not yet due or,
     if due, being contested in good faith in the ordinary course of business;

(xv) Gas imbalances that obligate the Borrower to provide and make up free of
     charge, and that other third parties are entitled to take without paying
     for, under applicable contracts, as a result of any imbalances in
     production or sales from the assets at any wells, in any pipelines, at any
     gas plant or in storage;

(xvi)defects, irregularities and deficiencies in the title to any rights of way
     or any Hydrocarbon Interest of the Borrower or any Subsidiary thereof which
     in the aggregate do not materially impair the use of such rights of way or
     any Hydrocarbon Interest for the purposes for which such rights of way and
     any other Hydrocarbon Interest are held by such Person, and defects,
     irregularities and deficiencies in title to any Hydrocarbon Interest of the
     Borrower or any of its Subsidiaries, which defects, irregularities or
     deficiencies have been cured by possession under applicable statutes of
     limitations;

(xvii) (A) Liens provided for in the Required Hedge Agreement and (B) Liens on
     the GE Equipment to secure the GE Loan; and

(xviii)  Liens granted pursuant to the Loan Documents.

7.4  Limitation on Fundamental Changes. Other than with respect to the Bison
     Entities, enter into any merger, consolidation or amalgamation, or
     liquidate, wind up or dissolve itself (or suffer any liquidation or
     dissolution), or Dispose of all or substantially all of its Property or
     business, except that:

(a)  any Solvent Subsidiary of the Borrower may be merged or consolidated with
     or into the Borrower (provided that the Borrower shall be the continuing or
     surviving corporation) or with or into any Subsidiary Guarantor (provided
     that the Subsidiary Guarantor shall be the continuing or surviving
     corporation); and



                                       54
<PAGE>

(b)  any Subsidiary of the Borrower may Dispose of any or all of its assets
     (upon voluntary liquidation or otherwise) to the Borrower or any Subsidiary
     Guarantor.

7.5  Limitation on Disposition of Property. Dispose of any of its Property
     (including, without limitation, receivables and leasehold interests),
     whether now owned or hereafter acquired, or, in the case of any Subsidiary
     of Holdings, issue or sell any shares of such Subsidiary's Capital Stock to
     any Person, except:

(a)  the Disposition of obsolete or worn out property in the ordinary course of
     business;

(b)  the sale of Hydrocarbons or other inventory in the ordinary course of
     business;

(c)  Dispositions permitted by Section 7.4(b);

(d)  the sale or issuance of (i) any Capital Stock of a Subsidiary of the
     Borrower (other than Disqualified Stock) to the Borrower or any Subsidiary
     Guarantor or (ii) the Borrower's Capital Stock (other than Disqualified
     Stock) to Holdings;

(e)  (i) an Asset Sale or (ii) Dispositions the prohibition of which
     Dispositions would conflict with any material Indebtedness or financing
     agreement of Parent as in effect on the Closing Date; provided that the
     proceeds of any such Asset Sale or Disposition, as the case may be, are
     solely in the form of cash and the Loan Parties party to such Asset Sale or
     Disposition, as the case may be, comply with the provisions of Section
     2.12;

(f)  any trade or exchange of Oil and Gas Properties or Capital Stock in any
     corporation or royalty trust in the Oil and Gas Business owned by the
     Borrower or any of its Subsidiaries for Oil and Gas Properties owned or
     held by another Person if the fair market value of such Oil and Gas
     Properties or Capital Stock traded or exchanged by the Borrower or any such
     Subsidiary (including any cash or Cash Equivalents (excluding cash
     exchanged with respect to the reimbursement of drilling costs or revenues
     received by the parties thereto), not to exceed 15% of the such fair market
     value, to be delivered to the Borrower or such Subsidiary) is reasonably
     equivalent to the fair market value of the Oil and Gas Properties (together
     with any cash or Cash Equivalents (excluding cash exchanged with respect to
     the reimbursement of drilling costs or revenues received by the parties
     thereto), not to exceed 15% of such fair market value) to be received by
     the Borrower or such Subsidiary as determined in good faith by (i) any
     officer of the Borrower, if such fair market value is less than $5,000,000
     and (ii) the Board of Directors of the Borrower as evidenced by a Board
     resolution delivered to the Administrative Agent, if such fair market value
     is equal to or greater than $5,000,000; provided that if such resolution
     indicates that such fair market value is equal to or greater than
     $10,000,000, such Board resolution shall be accompanied by a written
     appraisal by a nationally recognized investment banking firm or appraisal
     firm, in each case specializing or having a specialty in Oil and Gas
     Properties; provided further that the Borrower shall execute and deliver
     Mortgages to the Administrative Agent pursuant to Section 6.10 on any Oil
     and Gas Properties received by the Borrower (provided, however, that
     notwithstanding anything in this Section 7.5(f) to the contrary, the
     Parent, Holdings, the Borrower and the Borrower's Subsidiaries may not
     trade or exchange Oil and Gas Properties or Capital Stock in any
     corporation or royalty trust in the Oil and Gas Business owned by the


                                       55
<PAGE>

     Borrower or any of its Subsidiaries for Oil and Gas Properties owned or
     held by another Person in an amount exceeding in the aggregate the sum of
     (i) $20,000,000 minus (ii) the fair market value of assets or property
     Disposed of pursuant to Section 7.5(g)(ii)); and

(g)  (i) Dispositions described in detail on Schedule 7.5(g)(i) required in
     connection with operating contracts, joint venture agreements and lease
     agreements existing on the date hereof and (ii) Dispositions of Property
     acquired after the Closing Date required in connection with operating
     contracts, joint venture agreements and lease arrangements entered into
     after the date hereof in the ordinary course of business and on
     arm's-length terms (which Disposition is with the other party to such
     agreement), the aggregate value of which shall not exceed the sum of (A)
     $20,000,000 minus (B) the fair market value of the Oil and Gas Properties
     or Capital Stock in any corporation or royalty trust in the Oil and Gas
     Business owned by the Borrower or any of its Subsidiaries traded or
     exchanged pursuant to Section 7.5(f).

7.6  Limitation on Restricted Payments. Other than with respect to the Bison
     Entities, declare or pay any dividend (other than dividends payable solely
     in common stock (excluding Disqualified Stock) of the Person making such
     dividend) on, or make any payment on account of, or set apart assets for a
     sinking or other analogous fund for, the purchase, redemption, defeasance,
     retirement or other acquisition of, any Capital Stock of Holdings, the
     Borrower or any of the Borrower's Subsidiaries, whether now or hereafter
     outstanding, or make any other distribution in respect thereof, either
     directly or indirectly, whether in cash or property or in obligations of
     Holdings, the Borrower or any of the Borrower's Subsidiaries, or enter into
     any derivatives or other transaction with any counterparty (a "Derivatives
     Counterparty") obligating the Borrower or any of the Borrower's
     Subsidiaries to make payments to such Derivatives Counterparty as a result
     of any change in market value of any such Capital Stock (collectively,
     "Restricted Payments"), except that:

(a)  a Subsidiary may make Restricted Payments to the Borrower or any Subsidiary
     Guarantor; and

(b)  the Borrower and Holdings may pay dividends or lend funds to Holdings and
     Parent (i) on the Closing Date, in an amount equal to the net proceeds of
     the Term Loans; and (ii) thereafter, in cash, to the extent (A) no Default
     or Event of Default has occurred and is continuing and (B) pro forma for
     making such dividend or lending such funds, the Borrower still maintains
     100% of the Borrower Liquidity Reserve.

7.7  Limitation on Capital Expenditures. Make or commit to make any Capital
     Expenditure, except Capital Expenditures of the Borrower and the Borrower's
     Subsidiaries in the ordinary course of business not exceeding $300,000,000
     for each fiscal year; provided that any amount up to $300,000,000 not
     expended in a fiscal year may be carried over for expenditure in the next
     succeeding fiscal year. Capital Expenditures made pursuant to this Section
     7.7 during any fiscal year shall be deemed made, first, in respect of
     amounts permitted for such fiscal year as provided above and second, in
     respect of amounts carried over from the prior fiscal year pursuant to the
     proviso above.



                                       56
<PAGE>

7.8  Limitation on Investments. Make any advance, loan, extension of credit (by
     way of guaranty or otherwise) or capital contribution to, or purchase any
     Capital Stock, bonds, notes, debentures or other debt securities of, or any
     assets constituting an ongoing business from, or make any other investment
     in, any other Person (all of the foregoing, "Investments"), except:

(a)  extensions of trade credit in the ordinary course of business;

(b)  Investments in Cash Equivalents;

(c)  Investments arising in connection with the incurrence of Indebtedness
     permitted by Section 7.2(b), 7.2(d) (only in respect of loans existing on
     the date hereof made by the Bison Entities to the Parent and its
     Affiliates) and 7.16;

(d)  loans and advances to employees of the Borrower or any Subsidiaries of the
     Borrower in the ordinary course of business (including, without limitation,
     for travel, entertainment and relocation expenses) in an aggregate amount
     for Holdings, the Borrower and Subsidiaries of the Borrower not to exceed
     $1,000,000 at any one time outstanding;

(e)  Investments (other than those relating to the incurrence of Indebtedness
     permitted by Section 7.8(c)) by Holdings, the Borrower or any of the
     Borrower's Subsidiaries in the Borrower or any Person that, prior to such
     Investment, is a Subsidiary Guarantor; and

(f)  Investments arising in connection with the Subordinated Guaranty.

7.9  Limitation on Optional Payments and Modifications of Indebtedness. (a)
     Other than with respect to the Bison Entities, (i) make or offer to make
     any optional or voluntary payment, prepayment, repurchase or redemption of,
     or otherwise voluntarily or optionally defease, any Indebtedness, or
     segregate funds for any such payment, prepayment, repurchase, redemption or
     defeasance, or enter into any derivative or other transaction with any
     Derivatives Counterparty obligating Holdings, the Borrower or any of the
     Borrower's Subsidiaries to make payments to such Derivatives Counterparty
     as a result of any change in market value of such Indebtedness, other than
     the prepayment of Indebtedness incurred hereunder, (ii) amend or permit the
     amendment of its Governing Documents in any manner determined by the
     Administrative Agent to be adverse to the Lenders or (iii) amend, modify or
     otherwise change, or consent or agree to any amendment, modification,
     waiver or other change to, any of the terms (including, without limitation,
     the subordination terms) of any Indebtedness (excluding the Indebtedness
     hereunder) (other than any such amendment, modification, waiver or other
     change that (x) would extend the maturity or reduce the amount of any
     payment of principal thereof, reduce the rate or extend the date for
     payment of interest thereon or relax any covenant or other restriction
     applicable to Holdings, the Borrower or any of the Borrower's Subsidiaries
     and (y) does not involve the payment of a consent fee).

                  (b) The Bison Entities shall not, and the Borrower shall not
permit any of the Bison Entities to, make, or consent to or agree to make, any
Prohibited Modification.

7.10 Limitation on Transactions with Affiliates. Except as permitted by Section
     7.16 and except for the Subordinated Guaranty, enter into any transaction,
     including, without limitation, any purchase, sale, lease or exchange of
     Property, the rendering of any service or



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     the payment of any management, advisory or similar fees, with any Affiliate
     (other than the Borrower or any Subsidiary Guarantor) unless such
     transaction is (a) otherwise permitted under this Agreement, (b) in the
     ordinary course of business of Holdings, Borrower or such Subsidiary, as
     the case may be, and (c) upon fair and reasonable terms no less favorable
     to the Borrower or such Subsidiary, as the case may be, than it would
     obtain in a comparable arm's-length transaction with a Person that is not
     an Affiliate; provided that Holdings, the Borrower or any of the Borrower's
     Subsidiaries may not enter into any transaction with an Affiliate thereof
     if the value of such transaction is greater than $1,000,000 individually
     and the value of all such transactions by Holdings, the Borrower and the
     Borrower's Subsidiaries is greater than $5,000,000 in the aggregate other
     than (w) Required Hedge Agreements, (x) the reasonable allocation of
     overhead costs and expenses incurred in the ordinary course of business
     consistent with the past practices of Holdings, the Borrower and the
     Borrower's Subsidiaries, (y) Hydrocarbon sales by Borrower to EMT or an
     Affiliate in the ordinary course of business consistent with past practices
     for each separate producing basin; provided that (I) such Hydrocarbon sale
     is upon fair and reasonable terms no less favorable to the Borrower or such
     Subsidiary, as the case may be, than it would obtain in a comparable
     arm's-length transaction with a Person that is not an Affiliate and (II)
     the Borrower does not deliver the Hydrocarbon sold until it is paid in full
     in cash by EMT or such Affiliate, and (z) the assignment of Hydrocarbon
     sale contracts and transportation contracts from EMT to the Borrower upon
     fair and reasonable terms no less favorable to the Borrower than it would
     obtain in a comparable arm's-length transaction with a Person that is not
     an Affiliate.

7.11 Limitation on Sales and Leasebacks. Enter into any arrangement with any
     Person providing for the leasing by Holdings, the Borrower or any of the
     Borrower's Subsidiaries of Property which has been or is to be sold or
     transferred by Holdings, the Borrower or such Subsidiary to such Person or
     to any other Person to whom funds have been or are to be advanced by such
     Person on the security of such Property or rental obligations of Holdings,
     the Borrower or such Subsidiary.

7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year of
     Holdings, the Borrower or any of the Borrower's Subsidiaries to end on a
     day other than December 31 or change Holdings', the Borrower's or any of
     the Borrower's Subsidiaries' method of determining fiscal quarters, in each
     case, without the prior written consent of the Administrative Agent. The
     Lenders hereby authorize the Agents to enter into such amendments to effect
     such modifications, if any, in accordance with the provisions of this
     Section.

7.13 Limitation on Negative Pledge Clauses. Other than with respect to the Bison
     Entities, enter into or suffer to exist or become effective any agreement
     that prohibits or limits the ability of Holdings, the Borrower or any of
     the Borrower's Subsidiaries to create, incur, assume or suffer to exist any
     Lien upon any of its Property or revenues, whether now owned or hereafter
     acquired, to secure the Obligations or, in the case of any guarantor, its
     obligations under the Guarantee and Collateral Agreement, other than (a)
     this Agreement and the other Loan Documents, (b) any agreements governing
     any purchase money Liens or Capital Lease Obligations otherwise permitted
     hereby (in which case, any prohibition or limitation shall only be
     effective against the assets financed thereby) and (c) any agreements in
     effect on the date of this Agreement.



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7.14 Limitation on Restrictions on Subsidiary Distributions, Etc. Other than the
     Bison Entities, enter into or suffer to exist or become effective any
     consensual encumbrance or restriction on the ability of the Borrower or any
     of the Borrower's Subsidiaries to (a) make Restricted Payments in respect
     of any Capital Stock of such Subsidiary held by, or pay or subordinate any
     Indebtedness owed to, Holdings, the Borrower or any other Subsidiary, (b)
     make Investments in Holdings, the Borrower or any other Subsidiary or (c)
     transfer any of its assets to Holdings, the Borrower or any other
     Subsidiary, except for such encumbrances or restrictions existing under or
     by reason of (i) any restrictions existing under the Loan Documents and
     (ii) any restrictions with respect to a Subsidiary imposed pursuant to an
     agreement that has been entered into in connection with the Disposition of
     all or substantially all of the Capital Stock or assets of such Subsidiary.

7.15 Business Activities. The Borrower shall not, and shall not permit its
     Subsidiaries to, engage in any business activity other than the Oil and Gas
     Business. In the case of Holdings, notwithstanding anything to the contrary
     in this Agreement or any other Loan Document, (a) conduct, transact or
     otherwise engage in, or commit to conduct, transact or otherwise engage in,
     any business or operations other than those incidental to its ownership of
     the Capital Stock of the Borrower, (b) incur, create, assume or suffer to
     exist any Indebtedness or other liabilities or financial obligations,
     except (i) nonconsensual obligations imposed by operation of law, (ii)
     pursuant to the Loan Documents to which it is a party and (iii) obligations
     with respect to its Capital Stock, or (c) own, lease, manage or otherwise
     operate any properties or assets (including cash (other than cash received
     in connection with dividends made by the Borrower in accordance with
     Section 7.6 pending application in the manner contemplated by said Section)
     and Cash Equivalents) other than the ownership of shares of Capital Stock
     of the Borrower.

7.16 Intercompany Indebtedness. Other than (a) as otherwise permitted by Section
     7.2 or 7.6(b), (b) the loan of the net proceeds of the Term Loans (less
     $65,000,000) from the Borrower to Holdings on the Closing Date evidenced by
     that certain Intercompany Note, dated July 31, 2002, made by Holdings in
     favor of the Borrower, (c) the loan of the net proceeds of the Intercompany
     Note referred to in the foregoing clause (b) from the Holdings to Parent on
     the Closing Date evidenced by that certain Intercompany Note, dated July
     31, 2002, made by Parent in favor of Holdings, (d) the loan of the
     remaining $65,000,000 of the net proceeds of the Term Loans from the
     Borrower to Holdings subsequent to the Closing Date evidenced by an
     intercompany note to be made by Holdings in favor of the Borrower in an
     aggregate principal amount of $65,000,000, (e) the loan of the net proceeds
     of the Intercompany Note referred to in the foregoing clause (d) from
     Holdings to Parent subsequent to the Closing Date evidenced by an
     intercompany note to be made by Parent in favor of Holdings in an aggregate
     principal amount of $65,000,000; provided that on or before the issuance of
     the intercompany notes referred to in the foregoing clauses (d) and (e),
     Parent shall have caused an irrevocable standby letter of credit in an
     amount equal to $65,000,000 to be issued in favor of the Administrative
     Agent as specified in the definition of "Borrower Liquidity Reserve" in
     this Agreement, and (f) with respect to the Bison Entities, at all times
     there shall be no net Indebtedness owed by Holdings, the Borrower and/or
     any of the Borrower's Subsidiaries to Parent or any of its Affiliates
     (other than Holdings, the Borrower or the Borrower's Subsidiaries), unless
     (x) no Default or Event of Default has occurred and is continuing, (y) such
     Indebtedness is set forth in the forward



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     liquidity projections delivered by Parent pursuant to Section 6.2(j) and
     (z) the Borrower is maintaining 100% of the Borrower Liquidity Reserve at
     the time of the incurrence of such Indebtedness.

7.17 Subsidiaries. Form or create any direct or indirect Subsidiary.

7.18 Limitation on Hedge Agreements and Firm Transportation Contracts. Other
     than the Borrower, enter into any Hedge Agreement or firm transportation
     contracts relating to the production of the Borrower and its Subsidiaries;
     provided, however, that the Borrower shall not enter into any such Hedge
     Agreement with a price less than $3 per mmbtu without the prior written
     consent of the Administrative Agent.

7.19 Partnerships and Joint Ventures. Become a general or limited partner in a
     partnership or a joint venturer in any joint venture that constitutes a
     separate legal entity, or permit Holdings, the Borrower or any of the
     Borrower's Subsidiaries to do so.

7.20 Holdings Negative Pledge; Limitation on Assets. Solely with respect to
     Holdings, (a) create, incur, assume or suffer to exist any Lien upon any of
     its Property or revenues, whether now owned or hereafter acquired, to
     secure any Indebtedness of Holdings, except for (X) Liens granted pursuant
     to the Loan Documents, (Y) non-consensual Liens imposed by operation of law
     and (Z) Liens permitted by Section 7.3(b)(iii) or (b) hold any Property
     other than (i) all of the Capital Stock of the Borrower, and (ii) the
     intercompany notes permitted by Sections 7.16(c) and (e).

                         SECTION 8 - EVENTS OF DEFAULT

                  If any of the following events shall occur and be continuing:

(a)  The Borrower shall fail to pay any principal of any Loan when due in
     accordance with the terms hereof; or the Borrower shall fail to pay any
     interest on any Loan; or Parent or any Loan Party shall fail to pay any
     other amount payable hereunder or under any other Loan Document, within
     five days after any such interest or other amount becomes due in accordance
     with the terms hereof;

(b)  Any representation or warranty made or deemed made by Parent or any Loan
     Party herein or in any other Loan Document or that is contained in any
     certificate, document or financial or other statement furnished by it at
     any time under or in connection with this Agreement or any such other Loan
     Document shall prove to have been inaccurate in any material respect on or
     as of the date made or deemed made;

(c)  (i) Parent or any Loan Party shall default in the observance or performance
     of any agreement contained in Section 6.2(k) which default is not cured
     within 2 days after the occurrence thereof, clause (i) or (ii) of Section
     6.4(a) (with respect to Holdings and the Borrower only), Section 6.7(a),
     Section 6.9, Section 6.10(a) or 6.10(d), Section 6.15(a), Section 7 or
     Section 5 of the Guarantee and Collateral Agreement, (ii) an "Event of
     Default" under and as defined in any material Mortgage shall have occurred
     and be continuing, (iii) Holdings, Borrower or any of its Subsidiaries
     shall transfer or otherwise dispose of any of its properties or assets to
     Parent or any of its Subsidiaries (other than the Loan Parties), except to
     the extent provided



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     for in Section 7.6 or (iv) any default or event of default shall occur
     under the Required Hedge Agreements which default is not cured within 3
     Business Days after the occurrence thereof;

(d)  Parent or any Loan Party shall default in the observance or performance of
     any other covenant or agreement contained in this Agreement or any other
     Loan Document (other than as provided in paragraphs (a) through (c) of this
     Section), and such default shall continue unremedied for a period of 30
     days;

(e)  Parent, Holdings, the Borrower or any of the Borrower's Subsidiaries shall
     (i) default in making any payment of any principal of any Indebtedness
     (including, without limitation, any Guarantee Obligation, but excluding the
     Term Loans) on the scheduled or original due date with respect thereto; or
     (ii) default in making any payment of any interest on any such Indebtedness
     beyond the period of grace, if any, provided in the instrument or agreement
     under which such Indebtedness was created; or (iii) default in the
     observance or performance of any other agreement or condition relating to
     any such Indebtedness or contained in any instrument or agreement
     evidencing, securing or relating thereto, or any other event shall occur or
     condition exist, the effect of which default or other event or condition is
     to cause, or to permit the holder or beneficiary of such Indebtedness (or a
     trustee or agent on behalf of such holder or beneficiary) to cause, with
     the giving of notice if required, such Indebtedness to become due prior to
     its stated maturity or (in the case of any such Indebtedness constituting a
     Guarantee Obligation) to become payable; provided that a default, event or
     condition described in clause (i), (ii) or (iii) of this paragraph (e)
     shall not at any time constitute an Event of Default unless, at such time,
     one or more defaults, events or conditions of the type described in clauses
     (i), (ii) and (iii) of this paragraph (e) shall have occurred and be
     continuing with respect to Indebtedness the outstanding principal amount of
     which exceeds in the aggregate $10,000,000; provided further that with
     respect to Parent only, a default, event or condition described in clause
     (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute
     an Event of Default unless, at such time, one or more defaults, events or
     conditions of the type described in clauses (i), (ii) and (iii) of this
     paragraph (e) shall have occurred and be continuing with respect to
     Indebtedness the outstanding principal amount of which exceeds in the
     aggregate $60,000,000

(f)  (i) Parent, Holdings, the Borrower or any of the Borrower's Subsidiaries
     shall commence any case, proceeding or other action (A) under any existing
     or future law of any jurisdiction, domestic or foreign, relating to
     bankruptcy, insolvency, reorganization or relief of debtors, seeking to
     have an order for relief entered with respect to it, or seeking to
     adjudicate it a bankrupt or insolvent, or seeking reorganization,
     arrangement, adjustment, winding-up, liquidation, dissolution, composition
     or other relief with respect to it or its debts, or (B) seeking appointment
     of a receiver, trustee, custodian, conservator or other similar official
     for it or for all or any substantial part of its assets, or Parent,
     Holdings, the Borrower or any of the Borrower's Subsidiaries shall make a
     general assignment for the benefit of its creditors; or (ii) there shall be
     commenced against Parent, Holdings, the Borrower or any of the Borrower's
     Subsidiaries any case, proceeding or other action of a nature referred to
     in clause (i) above that (A) results in the entry of an order for relief or
     any such adjudication or appointment or (B) remains undismissed,
     undischarged or unbonded for a period of 60 days; or (iii) there shall be
     commenced against Parent, Holdings, the Borrower or any of the Borrower's
     Subsidiaries any case, proceeding or other action seeking issuance of a
     warrant of



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     attachment, execution, distraint or similar process against all or any
     substantial part of its assets that results in the entry of an order for
     any such relief that shall not have been vacated, discharged, or stayed or
     bonded pending appeal within 60 days from the entry thereof; or (iv)
     Parent, Holdings, the Borrower or any of the Borrower's Subsidiaries shall
     take any action in furtherance of, or indicating its consent to, approval
     of, or acquiescence in, any of the acts set forth in clause (i), (ii), or
     (iii) above; or (v) Parent, Holdings, the Borrower or any of the Borrower's
     Subsidiaries shall generally not, or shall be unable to, or shall admit in
     writing its inability to, pay its debts as they become due;

(g)  (i) Any Person shall engage in any "prohibited transaction" (as defined in
     Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii)
     any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
     whether or not waived, shall exist with respect to any Plan or any Lien in
     favor of the PBGC or a Plan shall arise on the assets of the Borrower or
     any Commonly Controlled Entity, (iii) a Reportable Event shall occur with
     respect to, or proceedings shall commence to have a trustee appointed, or a
     trustee shall be appointed, to administer or to terminate, any Single
     Employer Plan, which Reportable Event or commencement of proceedings or
     appointment of a trustee is, in the reasonable opinion of the Required
     Lenders, likely to result in the termination of such Plan for purposes of
     Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
     purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled
     Entity shall, or in the reasonable opinion of the Required Lenders is
     likely to, incur any liability in connection with a withdrawal from, or the
     Insolvency or Reorganization of, a Multiemployer Plan, (vi) the Borrower,
     any of the Borrower's Subsidiaries or any Commonly Controlled Entity shall
     be required to make during any fiscal year of the Borrower payments
     pursuant to any employee welfare benefit plan (as defined in Section 3(1)
     of ERISA) that provides benefits to retired employees (or their dependents)
     that, in the aggregate, exceed the amount set forth on Schedule 8(g)(i)
     with respect to such fiscal year, (vii) the Borrower, any of the Borrower's
     Subsidiaries or any Commonly Controlled Entity shall be required to make
     during any fiscal year of the Borrower contributions to any defined benefit
     pension plan subject to Title IV of ERISA (including any Multiemployer
     Plan) that, in the aggregate, exceed the amount set forth on Schedule
     8(g)(ii) with respect to such fiscal year or (viii) any other similar event
     or condition shall occur or exist with respect to a Plan; and in each case
     in clauses (i) through (viii) above, such event or condition, together with
     all other such events or conditions, if any, could, in the sole judgment of
     the Required Lenders, reasonably be expected to have a Material Adverse
     Effect;

(h)  One or more judgments or decrees shall be entered against Holdings, the
     Borrower or any of the Borrower's Subsidiaries involving for Holdings, the
     Borrower and the Borrower's Subsidiaries taken as a whole a liability (not
     paid or fully covered by insurance as to which the relevant insurance
     company has acknowledged coverage) of $10,000,000 or more, and all such
     judgments or decrees shall not have been vacated, discharged, stayed or
     bonded pending appeal within 30 days from the entry thereof;

(i)  Any of the Security Documents shall cease, for any reason (other than
     pursuant to the terms thereof), to be in full force and effect, or any Loan
     Party or any Affiliate of any Loan Party shall so assert, or any Lien
     created by any of the Security Documents shall cease to be enforceable and
     of the same effect and priority purported to be created thereby;



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(j)  The guarantees contained in (i) Section 2 of the Guarantee and Collateral
     Agreement or (ii) the Corporate Guarantee, dated as of July 29, 2002 (as
     amended, supplemented or otherwise modified from time to time), made by
     Parent in favor of the Borrower in connection with the Required Hedge
     Agreement between the Borrower and EMT shall cease, for any reason (other
     than pursuant to the terms thereof), to be in full force and effect or
     Parent, any Loan Party or any Affiliate of Parent or any Loan Party shall
     so assert;

(k)  Parent or any Loan Party or any Affiliate of Parent or any Loan Party shall
     assert that any provision of any Loan Document is not in full force and
     effect;

(l)(i) any "person" or "group" (as such terms are used in Sections 13(d) and
     14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
     Act")), shall become, or obtain rights (whether by means or warrants,
     options or otherwise) to become, the "beneficial owner" (as defined in
     Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly,
     of more than 50% of the outstanding common stock of Parent or Holdings;
     (ii) the board of directors of Parent or Holdings shall cease to consist of
     a majority of Continuing Directors; or (iii) Parent or Holdings shall cease
     to own and control, of record and beneficially, directly, 100% of each
     class of outstanding Capital Stock of the Borrower (other than the Class B
     Common Stock of the Borrower) free and clear of all Liens (except Liens
     created by the Guarantee and Collateral Agreement); or

(m)  Parent, Holdings or the Borrower has not consummated the Company Sale
     referred to in Section 6.9 within 75 days of the Parent Liquidity Event
     giving rise to the obligation to consummate such Company Sale and if the
     Obligations have not been repaid in full with the net proceeds of such
     Company Sale;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to Parent or any Loan
Party, automatically the Commitments shall immediately terminate and the Term
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents shall immediately become due
and payable, and (B) if such event is any other Event of Default, with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Term Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement and the other Loan Documents to
be due and payable forthwith, whereupon the same shall immediately become due
and payable. Upon the occurrence and during the continuation of an Event of
Default, the Administrative Agent and the Lenders shall be entitled to exercise
any and all remedies available under the Security Documents, including, without
limitation, the Guarantee and Collateral Agreement and the Mortgages, or
otherwise available under applicable law or otherwise.

                      SECTION 9 - THE AGENTS; THE ARRANGER

9.1  Appointment. Each Lender hereby irrevocably designates and appoints the
     Agents as the agents of such Lender under this Agreement and the other Loan
     Documents, and each such Lender irrevocably authorizes each Agent, in such
     capacity, to take such action on its behalf under the provisions of this
     Agreement and the other Loan Documents and to exercise such powers and
     perform such duties as are expressly delegated to such Agent by the terms
     of this



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     Agreement and the other Loan Documents, together with such other powers as
     are reasonably incidental thereto. Notwithstanding any provision to the
     contrary elsewhere in this Agreement, the other Loan Documents, the Fee
     Letter and the syndication and fee sharing letter, dated July 31, 2002,
     among the Original Lenders, no Agent shall have any duties or
     responsibilities, except those expressly set forth herein or therein, or
     any fiduciary relationship with any Lender, and no implied covenants,
     functions, responsibilities, duties, obligations or liabilities shall be
     read into this Agreement or any other Loan Document or otherwise exist
     against any Agent.

9.2  Delegation of Duties. Each Agent may execute any of its duties under this
     Agreement and the other Loan Documents by or through agents or
     attorneys-in-fact and shall be entitled to advice of counsel concerning all
     matters pertaining to such duties. No Agent shall be responsible for the
     negligence or misconduct of any agents or attorneys in-fact selected by it
     with reasonable care.

9.3  Exculpatory Provisions. None of the Arranger, any Agent or any of their
     respective officers, directors, partners, employees, agents, attorneys and
     other advisors, attorneys-in-fact or affiliates shall be (i) liable for any
     action lawfully taken or omitted to be taken by it or such Person under or
     in connection with this Agreement or any other Loan Document (except to the
     extent that any of the foregoing are found by a final and non-appealable
     decision of a court of competent jurisdiction to have resulted solely and
     proximately from its or such Person's own gross negligence or willful
     misconduct in breach of a duty owed to the party asserting liability) or
     (ii) responsible in any manner to any of the Lenders for any recitals,
     statements, representations or warranties made by Parent or any Loan Party
     or any officer thereof contained in this Agreement or any other Loan
     Document or in any certificate, report, statement or other document
     referred to or provided for in, or received by the Arranger or the Agents
     under or in connection with, this Agreement or any other Loan Document or
     for the value, validity, effectiveness, genuineness, enforceability or
     sufficiency of this Agreement or any other Loan Document or for any failure
     of Parent or any Loan Party party thereto to perform its obligations
     hereunder or thereunder. The Agents shall not be under any obligation to
     any Lender to ascertain or to inquire as to the observance or performance
     of any of the agreements contained in, or conditions of, this Agreement or
     any other Loan Document, or to inspect the properties, books or records of
     Parent or any Loan Party.

9.4  Reliance by Agents. Each Agent shall be entitled to rely, and shall be
     fully protected in relying, upon any instrument, writing, resolution,
     notice, consent, certificate, affidavit, letter, telecopy, telex or
     teletype message, statement, order or other document or conversation
     believed by it to be genuine and correct and to have been signed, sent or
     made by the proper Person or Persons and upon advice and statements of
     legal counsel (including, without limitation, counsel to Parent, Holdings
     or the other Loan Parties), independent accountants and other experts
     selected by such Agent. The Agents shall deem and treat the payee of any
     Term Note as the owner thereof for all purposes unless a written notice of
     assignment, negotiation or transfer thereof shall have been filed with the
     Administrative Agent as recorded in the Register. Each Agent shall be fully
     justified in failing or refusing to take any action under this Agreement or
     any other Loan Document unless it shall first receive such advice or
     concurrence of the Required Lenders or the requisite Lenders required under
     Section 10.1 to authorize or require such action (or, if so specified by
     this Agreement, all



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     Lenders) as it deems appropriate or it shall first be indemnified to its
     satisfaction by the Lenders against any and all liability and expense that
     may be incurred by it by reason of taking or continuing to take any such
     action. Each Agent shall in all cases be fully protected in acting, or in
     refraining from acting, under this Agreement and the other Loan Documents
     in accordance with a request of the Required Lenders or the requisite
     Lenders under Section 10.1 to authorize or require such action (or, if so
     specified by this Agreement, all Lenders), and such request and any action
     taken or failure to act pursuant thereto shall be binding upon all the
     Lenders and all future holders of the Term Loans.

9.5  Notice of Default. No Agent shall be deemed to have knowledge or notice of
     the occurrence of any Default or Event of Default hereunder unless such
     Agent has received notice from a Lender, Holdings or the Borrower referring
     to this Agreement, describing such Default or Event of Default and stating
     that such notice is a "notice of default". In the event that the
     Administrative Agent receives such a notice, the Administrative Agent shall
     give notice thereof to the Lenders. The Administrative Agent shall take
     such action with respect to such Default or Event of Default as shall be
     reasonably directed by the requisite Lenders (or, if so specified by this
     Agreement, all Lenders); provided that unless and until the Administrative
     Agent shall have received such directions, the Administrative Agent may
     (but shall not be obligated to) take such action, or refrain from taking
     such action, with respect to such Default or Event of Default as it shall
     deem advisable in the best interests of the Lenders.

9.6  Non-Reliance on Agents and Other Lenders. Each Lender expressly
     acknowledges that none of the Arranger, the Agents or any of their
     respective officers, directors, employees, agents, attorneys and other
     advisors, partners, attorneys-in-fact or affiliates have made any
     representations or warranties to it and that no act by the Arranger or any
     Agent hereinafter taken, including any review of the affairs of Parent or a
     Loan Party or any Affiliate of Parent or a Loan Party, shall be deemed to
     constitute any representation or warranty by the Arranger or any Agent to
     any Lender. Each Lender represents to the Arranger and the Agents that it
     has, independently and without reliance upon the Arranger or any Agent or
     any other Lender, and based on such documents and information as it has
     deemed appropriate, made its own appraisal of and investigation into the
     business, operations, property, financial and other condition, prospects
     and creditworthiness of Parent or the Loan Parties and their Affiliates and
     made its own decision to make its Term Loans hereunder and enter into this
     Agreement. Each Lender also represents that it will, independently and
     without reliance upon the Arranger or any Agent or any other Lender, and
     based on such documents and information as it shall deem appropriate at the
     time, continue to make its own credit analysis, appraisals and decisions in
     taking or not taking action under this Agreement and the other Loan
     Documents, and to make such investigation as it deems necessary to inform
     itself as to the business, operations, property, financial and other
     condition, prospects and creditworthiness of Parent or the Loan Parties and
     their affiliates. Except for notices, reports and other documents expressly
     required to be furnished to the Lenders by the Administrative Agent
     hereunder, neither the Arranger nor any Agent shall have any duty or
     responsibility to provide any Lender with any credit or other information
     concerning the business, operations, property, condition (financial or
     otherwise), prospects or creditworthiness of Parent or any Loan Party or
     any Affiliate of Parent or a Loan Party that may come into the possession
     of the Arranger or such Agent or any of its officers, directors, employees,
     agents, attorneys and other advisors, partners, attorneys-in-fact or
     affiliates.



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9.7  Indemnification. The Lenders agree to indemnify the Arranger and each Agent
     in its capacity as such (to the extent not reimbursed by Holdings or the
     Borrower and without limiting the obligation of Holdings or the Borrower to
     do so), ratably according to their respective Term Loan Percentages in
     effect on the date on which indemnification is sought under this Section
     (or, if indemnification is sought after the date upon which the Commitments
     shall have terminated and the Term Loans shall have been paid in full,
     ratably in accordance with such Term Loan Percentages immediately prior to
     such date), from and against any and all liabilities, obligations, losses,
     damages, penalties, actions, judgments, suits, costs, expenses or
     disbursements of any kind whatsoever that may at any time (including,
     without limitation, at any time following the payment of the Term Loans) be
     imposed on, incurred by or asserted against the Arranger or such Agent in
     any way relating to or arising out of, the Commitments, this Agreement, any
     of the other Loan Documents or any documents contemplated by or referred to
     herein or therein or the transactions contemplated hereby or thereby or any
     action taken or omitted by the Arranger or such Agent under or in
     connection with any of the foregoing; provided that no Lender shall be
     liable for the payment of any portion of such liabilities, obligations,
     losses, damages, penalties, actions, judgments, suits, costs, expenses or
     disbursements that are found by a final and non-appealable decision of a
     court of competent jurisdiction to have resulted solely and proximately
     from the Arranger's or such Agent's gross negligence or willful misconduct
     in breach of a duty owed to such Lender. The agreements in this Section 9.7
     shall survive the payment of the Term Loans and all other amounts payable
     hereunder.

9.8  Arranger and Agents in Their Individual Capacities. The Arranger and each
     Agent and their respective Affiliates may make loans to, accept deposits
     from and generally engage in any kind of business with Parent or any Loan
     Party as though the Arranger was not the Arranger and such Agent was not an
     Agent. With respect to its Term Loans made or renewed by it, the Arranger
     and each Agent shall have the same rights and powers under this Agreement
     and the other Loan Documents as any Lender and may exercise the same as
     though it were not the Arranger or an Agent, as the case may be, and the
     terms "Lender" and "Lenders" shall include the Arranger and each Agent in
     their respective individual capacities.

9.9  Successor Agents. The Administrative Agent may resign as Administrative
     Agent upon 10 days' notice to the Lenders and the Borrower. If the
     Administrative Agent shall resign as Administrative Agent under this
     Agreement and the other Loan Documents, then the Required Lenders shall
     appoint from among the Lenders a successor agent for the Lenders, which
     successor agent shall (unless an Event of Default under Section 8(a) or
     Section 8(f) with respect to the Borrower shall have occurred and be
     continuing) be subject to approval by the Borrower (which approval shall
     not be unreasonably withheld or delayed), whereupon such successor agent
     shall succeed to the rights, powers and duties of the Administrative Agent,
     and the term "Administrative Agent" shall mean such successor agent
     effective upon such appointment and approval, and the former Administrative
     Agent's rights, powers and duties as Administrative Agent shall be
     terminated, without any other or further act or deed on the part of such
     former Administrative Agent or any of the parties to this Agreement or any
     holders of the Term Loans. If no successor agent has accepted appointment
     as Administrative Agent by the date that is 10 days following a retiring
     Administrative Agent's notice of resignation, the retiring Administrative
     Agent's resignation shall nevertheless thereupon become effective, and the
     Lenders shall assume and perform all of the duties of the



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<PAGE>

     Administrative Agent hereunder until such time, if any, as the Required
     Lenders appoint a successor agent as provided for above. The Syndication
     Agent may, at any time, by notice to the Lenders and the Administrative
     Agent, resign as Syndication Agent hereunder, whereupon the duties, rights,
     obligations and responsibilities of the Syndication Agent hereunder shall
     automatically be assumed by, and inure to the benefit of, the
     Administrative Agent, without any further act by the Arranger, the
     Syndication Agent, the Administrative Agent or any Lender. After any
     retiring Agent's resignation as Agent, the provisions of this Section 9
     shall inure to its benefit as to any actions taken or omitted to be taken
     by it while it was Agent under this Agreement and the other Loan Documents.

9.10 Authorization to Release Liens. The Administrative Agent is hereby
     irrevocably authorized by each of the Lenders to release any Lien covering
     any Property of the Borrower or any of the Borrower's Subsidiaries that is
     the subject of a Disposition which is permitted by this Agreement or which
     has been consented to in accordance with Section 10.1.

9.11 The Arranger. The Arranger, in its capacity as such, shall have no duties
     or responsibilities, and shall incur no liability, under this Agreement and
     the other Term Loan Documents.

(a)  To the extent required by any applicable law, the Administrative Agent may
     withhold from any interest payment to any Lender an amount equivalent to
     any applicable withholding tax. If the forms or other documentation
     required by Section 2.20(f) are not delivered to the Administrative Agent,
     then the Administrative Agent may withhold from any interest payment to any
     Lender not providing such forms or other documentation, an amount
     equivalent to the applicable withholding tax.

(b)  If the Internal Revenue Service or any authority of the United States or
     other jurisdiction asserts a claim that the Administrative Agent did not
     properly withhold tax from amounts paid to or for the account of any Lender
     (because the appropriate form was not delivered, was not properly executed,
     or because such Lender failed to notify the Administrative Agent of a
     change in circumstances which rendered the exemption from, or reduction of,
     withholding tax ineffective, or for any other reason), such Lender shall
     indemnify the Administrative Agent fully for all amounts paid, directly or
     indirectly, by the Administrative Agent as tax or otherwise, including
     penalties and interest, together with all expenses incurred, including
     legal expenses, allocated staff costs and any out of pocket expenses.

(c)  If any Lender sells, assigns, grants a participation in, or otherwise
     transfers its rights under this Agreement, the purchaser, assignee,
     participant or transferee, as applicable, shall comply and be bound by the
     terms of Sections 2.20(f) and 9.12.

                           SECTION 10 - MISCELLANEOUS

10.1 Amendments and Waivers. Neither this Agreement nor any other Loan Document,
     nor any terms hereof or thereof may be amended, supplemented or modified
     except in accordance with the provisions of this Section 10.1. The Required
     Lenders and Parent and/or each Loan Party party to the relevant Loan
     Document may, or (with the written consent of the Required Lenders) the
     Agents and Parent and/or each Loan Party party to the relevant



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<PAGE>

     Loan Document may, from time to time, (a) enter into written amendments,
     supplements or modifications hereto and to the other Loan Documents
     (including amendments and restatements hereof or thereof) for the purpose
     of adding any provisions to this Agreement or the other Loan Documents or
     changing in any manner the rights of the Lenders or Parent and the Loan
     Parties hereunder or thereunder or (b) waive, on such terms and conditions
     as may be specified in the instrument of waiver, any of the requirements of
     this Agreement or the other Loan Documents or any Default or Event of
     Default and its consequences; provided, however, that no such waiver and no
     such amendment, supplement or modification shall (i) forgive or reduce the
     principal amount or extend the final scheduled date of maturity of any Term
     Loan, extend the scheduled date of any amortization payment in respect of
     any Term Loan, reduce the stated rate of any interest or fee payable
     hereunder or extend the scheduled date of any payment thereof, in each case
     without the consent of each Lender directly affected thereby; (ii) amend,
     modify or waive any provision of this Section or reduce any percentage
     specified in the definition of Required Lenders or Required Lenders,
     consent to the assignment or transfer by Parent or any Loan Party of any of
     its rights and obligations under this Agreement and the other Loan
     Documents, release all or substantially all of the Collateral or release
     all or substantially all of the Subsidiary Guarantors from their guarantee
     obligations under the Guarantee and Collateral Agreement, in each case
     without the consent of all Lenders; (iii) reduce the percentage specified
     in the definition of Required Lenders with respect to the Facility without
     the written consent of all Lenders under such Facility; (iv) amend, modify
     or waive any provision of Section 9 without the consent of the Arranger or
     any Agent directly affected thereby; or (v) amend, modify or waive any
     provision of Section 2.12 or Section 2.18 without the consent of each
     Lender directly affected thereby. Any such waiver and any such amendment,
     supplement or modification shall apply equally to each of the Lenders and
     shall be binding upon Parent and the Loan Parties, the Lenders, the Agents,
     the Arranger and all future holders of the Term Loans. In the case of any
     waiver, Parent, the Loan Parties, the Lenders, the Arranger and the Agents
     shall be restored to their former position and rights hereunder and under
     the other Loan Documents, and any Default or Event of Default waived shall
     be deemed to be cured and not continuing; but no such waiver shall extend
     to any subsequent or other Default or Event of Default, or impair any right
     consequent thereon. Any such waiver, amendment, supplement or modification
     shall be effected by a written instrument signed by the parties required to
     sign pursuant to the foregoing provisions of this Section; provided that
     delivery of an executed signature page of any such instrument by facsimile
     transmission shall be effective as delivery of a manually executed
     counterpart thereof. Notwithstanding anything in this Agreement or the
     other Loan Documents to the contrary, the Administrative Agent shall be
     authorized to release the Mortgages on the Oil and Gas Properties permitted
     to be sold, exchanged or traded under Section 7.5(e), (f) or (g) of this
     Agreement without any further action by the Lenders.

10.2 Notices. All notices, requests and demands to or upon the respective
     parties hereto to be effective shall be in writing (including by telecopy),
     and, unless otherwise expressly provided herein, shall be deemed to have
     been duly given or made when delivered, or three Business Days after being
     deposited in the mail, postage prepaid, or, in the case of telecopy notice,
     when received, addressed (a) in the case of Holdings, the Borrower, the
     Arranger and the Agents, as follows and (b) in the case of the Lenders, as
     set forth on Schedule I to the Lender Addendum to which such Lender is a
     party or, in the case of a Lender which becomes a party to this Agreement
     pursuant to an Assignment and Acceptance, in such Assignment and



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     Acceptance or (c) in the case of any party, to such other address as such
     party may hereafter notify to the other parties hereto:

         Parent:                           The Williams Companies, Inc.
                                           One Williams Center
                                           Suite 4100
                                           Tulsa, Oklahoma 74172
                                           Attention: Legal Department
                                           Telecopy: (918) 573-4503

         Holdings:                         Williams Production Holdings LLC
                                           One Williams Center
                                           Suite 4100
                                           Tulsa, Oklahoma 74172
                                           Attention: Legal Department
                                           Telecopy: (918) 573-4503

         The Borrower:                     Williams Production RMT Company
                                           One Williams Center
                                           Suite 4100
                                           Tulsa, Oklahoma 74172
                                           Attention: Legal Department
                                           Telecopy: (918) 573-4503

         The Syndication Agent:            Lehman Commercial Paper Inc.
                                           745 Seventh Avenue
                                           New York, New York 10019
                                           Attention:  Francis Chang
                                           Telecopy:  (212) 526-0242
                                           Telephone:  (212) 526-5390


         with a copy to:                   Weil, Gotshal & Manges LLP
                                           767 Fifth Avenue
                                           New York, New York  10153
                                           Attention: Jeremy W. Dickens
                                           Telecopy: (212) 310-8007
                                           Telephone: (212) 310-8753

         The Administrative Agent:         Lehman Commercial Paper Inc.
                                           745 Seventh Avenue
                                           New York, New York 10019
                                           Attention:  Francis Chang/Diane
                                             Albanese
                                           Telecopy:  (212) 526-0242/(212) 526-
                                             6643
                                           Telephone:  (212) 526-5390/(212) 526-
                                             4979


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<PAGE>

         with a copy to:                   Weil, Gotshal & Manges LLP
                                           767 Fifth Avenue
                                           New York, New York  10153
                                           Attention: Jeremy W. Dickens
                                           Telecopy: (212) 310-8007
                                           Telephone: (212) 310-8753

         The Arranger:                     Lehman Brothers Inc.
                                           745 Seventh Avenue
                                           New York, New York 10019
                                           Attention:  Francis Chang
                                           Telecopy:  (212) 526-0242
                                           Telephone:  (212) 526-5390

         with a copy to:                   Weil, Gotshal & Manges LLP
                                           767 Fifth Avenue
                                           New York, New York  10153
                                           Attention: Jeremy W. Dickens
                                           Telecopy: (212) 310-8007
                                           Telephone: (212) 310-8753


; provided that any notice, request or demand to or upon any Agent or any Lender
shall not be effective until received.

10.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
     exercising, on the part of the Arranger, any Agent or any Lender, any
     right, remedy, power or privilege hereunder or under the other Loan
     Documents shall operate as a waiver thereof; nor shall any single or
     partial exercise of any right, remedy, power or privilege hereunder
     preclude any other or further exercise thereof or the exercise of any other
     right, remedy, power or privilege. The rights, remedies, powers and
     privileges herein provided are cumulative and not exclusive of any rights,
     remedies, powers and privileges provided by law.

10.4 Survival of Representations and Warranties. All representations and
     warranties made hereunder, in the other Loan Documents and in any document,
     certificate or statement delivered pursuant hereto or in connection
     herewith shall survive the execution and delivery of this Agreement and the
     making of the Term Loans and other extensions of credit hereunder.

10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse the
     Arranger, the Agents and the Lenders for all their reasonable out-of-pocket
     costs and expenses incurred in connection with the syndication of the
     Facility (other than fees payable to syndicate members) and the
     development, preparation and execution of, and any amendment, supplement or
     modification to, this Agreement and the other Loan Documents and any other
     documents prepared in connection herewith or therewith, and the
     consummation and administration of the transactions contemplated hereby and
     thereby, including, without limitation, the reasonable fees and
     disbursements and other charges of counsel and other consultants to each of
     the Arranger, the Administrative Agent, the Original Lenders and the


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<PAGE>

     Syndication Agent and the charges of IntraLinks, (b) to pay or reimburse
     each Lender, the Arranger and each Agent for all its costs and expenses
     incurred in connection with the enforcement or preservation of any rights
     under this Agreement, the other Loan Documents and any such other
     documents, including, without limitation, the fees and disbursements of
     counsel (including the allocated fees and disbursements and other charges
     of in-house counsel) to each Lender and of counsel to the Arranger and each
     Agent and the charges of IntraLinks, (c) to pay, indemnify, and hold each
     Lender, the Arranger and the Agents harmless from, any and all recording
     and filing fees and any and all liabilities with respect to, or resulting
     from any delay in paying, stamp, excise and other taxes, if any, which may
     be payable or determined to be payable in connection with the execution and
     delivery of, or consummation or administration of any of the transactions
     contemplated by, or any amendment, supplement or modification of, or any
     waiver or consent under or in respect of, this Agreement, the other Loan
     Documents and any such other documents, and (d) to pay, indemnify, and hold
     each Lender, the Arranger, each Agent, their respective Affiliates, and
     their respective officers, directors, partners, trustees, employees,
     affiliates, shareholders, attorneys and other advisors, agents,
     attorneys-in-fact and controlling persons (each, an "Indemnitee") harmless
     from and against any and all other liabilities, obligations, losses,
     damages, penalties, actions, judgments, suits, costs, expenses or
     disbursements of any kind or nature whatsoever with respect to or arising
     out of the execution, delivery, enforcement, performance and administration
     of this Agreement, the other Loan Documents and any such other documents,
     including, without limitation, any of the foregoing relating to the use of
     proceeds of the Term Loans, the violation of, noncompliance with or
     liability under, any Environmental Law applicable to the operations of any
     Loan Party or any of the Properties or the use by unauthorized persons of
     information or other materials sent through electronic, telecommunications
     or other information transmission systems that are intercepted by such
     persons and the fees and disbursements and other charges of legal counsel
     in connection with claims, actions or proceedings by any Indemnitee against
     the Borrower hereunder (all the foregoing in this clause (d), collectively,
     the "Indemnified Liabilities"); provided that the Borrower shall have no
     obligation hereunder to any Indemnitee with respect to Indemnified
     Liabilities to the extent such Indemnified Liabilities are found by a final
     and non-appealable decision of a court of competent jurisdiction to have
     resulted solely and proximately from the gross negligence or willful
     misconduct of such Indemnitee in breach of a duty owed to the Borrower.
     Without limiting the foregoing, and to the extent permitted by applicable
     law, each of Holdings and the Borrower agrees not to assert, and the
     Borrower agrees to cause its Subsidiaries not to assert, and each of
     Holdings and the Borrower hereby waives, and the Borrower agrees to cause
     the its Subsidiaries so to waive, all rights for contribution or any other
     rights of recovery with respect to all claims, demands, penalties, fines,
     liabilities, settlements, damages, costs and expenses of whatever kind or
     nature, under or related to Environmental Laws, that any of them might have
     by statute or otherwise against any Indemnitee. All amounts due under this
     Section shall be payable not later than five days after written demand
     therefor. Statements payable by the Borrower pursuant to this Section shall
     be submitted to the Borrower in accordance with Section 10.2, or to such
     other Person or address as may be hereafter designated by the Borrower in a
     written notice to the Administrative Agent. The agreements in this Section
     shall survive repayment of the Term Loans and all other amounts payable
     hereunder.



                                       71
<PAGE>

10.6 Successors and Assigns; Participations and Assignments. (a) This Agreement
     shall be binding upon and inure to the benefit of Parent, Holdings, the
     Borrower, the Lenders, the Arranger, the Agents, all future holders of the
     Term Loans and their respective successors and assigns, except that none of
     Parent, Holdings or the Borrower may assign or transfer any of their
     respective rights or obligations under this Agreement without the prior
     written consent of the Arranger, the Agents and each Lender.

(b)  Any Lender may, without the consent of the Borrower or any other Person, in
     accordance with applicable law, at any time sell to one or more banks,
     financial institutions or other entities (each, a "Participant")
     participating interests in any Term Loan owing to such Lender, any
     Commitment of such Lender or any other interest of such Lender hereunder
     and under the other Loan Documents. In the event of any such sale by a
     Lender of a participating interest to a Participant, such Lender's
     obligations under this Agreement to the other parties to this Agreement
     shall remain unchanged, such Lender shall remain solely responsible for the
     performance thereof, such Lender shall remain the holder of any such Term
     Loan for all purposes under this Agreement and the other Loan Documents,
     and the Borrower, the Arranger and the Agents shall continue to deal solely
     and directly with such Lender in connection with such Lender's rights and
     obligations under this Agreement and the other Loan Documents. In no event
     shall any Participant under any such participation have any right to
     approve any amendment or waiver of any provision of any Loan Document, or
     any consent to any departure by Parent or any Loan Party therefrom, except
     to the extent that such amendment, waiver or consent would reduce the
     principal of, or interest on, the Term Loans or any fees payable hereunder,
     or postpone the date of the final maturity of the Term Loans, in each case
     to the extent subject to such participation. The Borrower agrees that if
     amounts outstanding under this Agreement and the Term Loans are due or
     unpaid, or shall have been declared or shall have become due and payable
     upon the occurrence of an Event of Default, each Participant shall, to the
     maximum extent permitted by applicable law, be deemed to have the right of
     setoff in respect of its participating interest in amounts owing under this
     Agreement to the same extent as if the amount of its participating interest
     were owing directly to it as a Lender under this Agreement; provided that,
     in purchasing such participating interest, such Participant shall be deemed
     to have agreed to share with the Lenders the proceeds thereof as provided
     in Section 10.7(a) as fully as if it were a Lender hereunder. The Borrower
     also agrees that each Participant shall be entitled to the benefits of
     Sections 2.19, 2.20 and 2.21 with respect to its participation in the
     Commitments and the Term Loans outstanding from time to time as if it was a
     Lender; provided that, in the case of Section 2.20, such Participant shall
     have complied with the requirements of said Section and provided further,
     that no Participant shall be entitled to receive any greater amount
     pursuant to any such Section than the transferor Lender would have been
     entitled to receive in respect of the amount of the participation
     transferred by such transferor Lender to such Participant had no such
     transfer occurred.

(c)  Any Lender (an "Assignor") may, in accordance with applicable law and upon
     written notice to the Syndication Agent, at any time and from time to time
     assign to any Lender any affiliate thereof or Affiliated Fund of the
     assigning Lender or of another Lender or, with the consent of the Borrower
     and the Agents (which, in each case, shall not be unreasonably withheld or
     delayed) (provided that (x) no such consent need be obtained by a Lehman
     Entity for a period of 180 days following the Closing Date and (y) the
     consent of the Borrower need not be



                                       72
<PAGE>

     obtained with respect to any assignment of Term Loans), to an additional
     bank, financial institution or other entity (an "Assignee") all or any part
     of its rights and obligations under this Agreement pursuant to an
     Assignment and Acceptance, substantially in the form of Exhibit E (an
     "Assignment and Acceptance"), executed by such Assignee and such Assignor
     (and, where the consent of the Borrower or the Agents is required pursuant
     to the foregoing provisions, by the Borrower and such other Persons) and
     delivered to the Administrative Agent for its acceptance and recording in
     the Register; provided that no such assignment to an Assignee (other than
     any Lender or any affiliate thereof or Affiliated Fund) shall be in an
     aggregate principal amount of less than $10,000,000, unless otherwise
     agreed by the Borrower, the Syndication Agent and the Administrative Agent.
     Any such assignment need not be ratable as among the Facility. Upon such
     execution, delivery, acceptance and recording, from and after the effective
     date determined pursuant to such Assignment and Acceptance, (x) the
     Assignee thereunder shall be a party hereto and, to the extent provided in
     such Assignment and Acceptance, have the rights and obligations of a Lender
     hereunder with Term Loans as set forth therein, and (y) the Assignor
     thereunder shall, to the extent provided in such Assignment and Acceptance,
     be released from its obligations under this Agreement (and, in the case of
     an Assignment and Acceptance covering all of an Assignor's rights and
     obligations under this Agreement, such Assignor shall cease to be a party
     hereto). Notwithstanding any provision of this Section, the consent of the
     Borrower shall not be required for any assignment that occurs at any time
     when any Event of Default shall have occurred and be continuing.

(d)  The Administrative Agent shall, on behalf of the Borrower, maintain at its
     address referred to in Section 10.2 a copy of each Assignment and
     Acceptance delivered to it and a register (the "Register") for the
     recordation of the names and addresses of the Lenders and the principal
     amount of, and interest accrued on, the Term Loans owing to each Lender
     from time to time. The entries in the Register shall be conclusive, in the
     absence of manifest error, and the Borrower, the Administrative Agent and
     the Lenders shall treat each Person whose name is recorded in the Register
     as the owner of the Term Loans and any Term Notes evidencing such Term
     Loans recorded therein for all purposes of this Agreement. Any assignment
     of any Term Loan, whether or not evidenced by a Term Note, shall be
     effective only upon appropriate entries with respect thereto being made in
     the Register (and each Term Note shall expressly so provide). Any
     assignment or transfer of all or part of a Term Loan evidenced by a Term
     Note shall be registered on the Register only upon surrender for
     registration of assignment or transfer of the Term Note evidencing such
     Term Loan, accompanied by a duly executed Assignment and Acceptance;
     thereupon one or more new Term Notes in the same aggregate principal amount
     shall be issued to the designated Assignee, and the old Term Notes shall be
     returned by the Administrative Agent to the Borrower marked "canceled". The
     Register shall be available for inspection by the Borrower or any Lender
     (with respect to any entry relating to such Lender's Term Loans) at any
     reasonable time and from time to time upon reasonable prior notice.

(e)  Upon its receipt of an Assignment and Acceptance executed by an Assignor
     and an Assignee (and, in any case where the consent of any other Person is
     required by Section 10.6(c), by each such other Person) together with
     payment to the Administrative Agent of a registration and processing fee of
     $3,500 (except that no such registration and processing fee shall be
     payable (y) in connection with an assignment by or to an Original Lender)
     or (z) in the case



                                       73
<PAGE>

     of an Assignee which is already a Lender or is an affiliate of a Lender or
     an Affiliated Fund), the Administrative Agent shall (i) promptly accept
     such Assignment and Acceptance and (ii) on the effective date determined
     pursuant thereto record the information contained therein in the Register
     and give notice of such acceptance and recordation to the Borrower. On or
     prior to such effective date, the Borrower, at its own expense, upon
     request, shall execute and deliver to the Administrative Agent (in exchange
     for the applicable Term Notes, as the case may be, of the assigning Lender)
     new applicable Term Notes to such Assignee or its registered assigns in an
     amount equal to the applicable Term Loans, assumed or acquired by it
     pursuant to such Assignment and Acceptance and, if the Assignor has
     retained Term Loans, upon request, new Term Notes, to the Assignor or its
     registered assigns in an amount equal to the applicable Term Loans, as the
     case may be, retained by it hereunder. Such new Term Note or Term Notes
     shall be dated the Closing Date and shall otherwise be in the form of the
     Term Note or Term Notes replaced thereby.

(e)  For the avoidance of doubt, the parties to this Agreement acknowledge that
     the provisions of this Section concerning assignments of Term Loans and
     Term Notes relate only to absolute assignments and that such provisions do
     not prohibit assignments creating security interests, including, without
     limitation, any pledge or assignment by a Lender of any Term Loan or Term
     Note to any Federal Reserve Bank in accordance with applicable law.

10.7 Adjustments; Set-off. (a) Except to the extent that this Agreement provides
     for payments to be allocated to a particular Lender or to the Lenders, if
     any Lender (a "Benefited Lender") shall at any time receive any payment of
     all or part of the Obligations owing to it, or receive any collateral in
     respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
     to events or proceedings of the nature referred to in Section 8(f), or
     otherwise), in a greater proportion than any such payment to or collateral
     received by any other Lender, if any, in respect of such other Lender's
     Obligations, such Benefited Lender shall purchase for cash from the other
     Lenders a participating interest in such portion of each such other
     Lender's Obligations, or shall provide such other Lenders with the benefits
     of any such collateral, as shall be necessary to cause such Benefited
     Lender to share the excess payment or benefits of such collateral ratably
     with each of the Lenders; provided, however, that if all or any portion of
     such excess payment or benefits is thereafter recovered from such Benefited
     Lender, such purchase shall be rescinded, and the purchase price and
     benefits returned, to the extent of such recovery, but without interest.

(b)  In addition to any rights and remedies of the Lenders provided by law, each
     Lender shall have the right, without prior notice to Holdings or the
     Borrower, any such notice being expressly waived by the Borrower to the
     extent permitted by applicable law, upon any amount becoming due and
     payable by the Borrower hereunder (whether at the stated maturity, by
     acceleration or otherwise), to set off and appropriate and apply against
     such amount any and all deposits (general or special, time or demand,
     provisional or final), in any currency, and any other credits, indebtedness
     or claims, in any currency, in each case whether direct or indirect,
     absolute or contingent, matured or unmatured, at any time held or owing by
     such Lender or any branch or agency thereof to or for the credit or the
     account of the Borrower. Each Lender agrees to notify promptly the Borrower
     and the Administrative Agent after any such setoff and application made by
     such Lender; provided that the failure to give such notice shall not affect
     the validity of such setoff and application.



                                       74
<PAGE>

10.8 Counterparts. This Agreement may be executed by one or more of the parties
     to this Agreement on any number of separate counterparts, and all of said
     counterparts taken together shall be deemed to constitute one and the same
     instrument. Delivery of an executed signature page of this Agreement by
     facsimile transmission shall be effective as delivery of a manually
     executed counterpart hereof. A set of the copies of this Agreement signed
     by all the parties shall be lodged with the Borrower and the Administrative
     Agent.

10.9 Severability. Any provision of this Agreement that is prohibited or
     unenforceable in any jurisdiction shall, as to such jurisdiction, be
     ineffective to the extent of such prohibition or unenforceability without
     invalidating the remaining provisions hereof, and any such prohibition or
     unenforceability in any jurisdiction shall not invalidate or render
     unenforceable such provision in any other jurisdiction.

10.10 Integration. This Agreement and the other Loan Documents represent the
     agreement of Parent, Holdings, the Borrower, the Agents, the Arranger and
     the Lenders with respect to the subject matter hereof, and there are no
     promises, undertakings, representations or warranties by the Arranger, any
     Agent or any Lender relative to the subject matter hereof not expressly set
     forth or referred to herein or in the other Loan Documents.

10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
     PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
     INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

10.12 Submission To Jurisdiction; Waivers. Each of Parent, Holdings and the
     Borrower hereby irrevocably and unconditionally:

(a)  submits for itself and its Property in any legal action or proceeding
     relating to this Agreement and the other Loan Documents to which it is a
     party, or for recognition and enforcement of any judgment in respect
     thereof, to the non-exclusive general jurisdiction of the courts of the
     State of New York, the courts of the United States of America for the
     Southern District of New York, and appellate courts from any thereof;

(b)  consents that any such action or proceeding may be brought in such courts
     and waives any objection that it may now or hereafter have to the venue of
     any such action or proceeding in any such court or that such action or
     proceeding was brought in an inconvenient court and agrees not to plead or
     claim the same;

(c)  agrees that service of process in any such action or proceeding may be
     effected by mailing a copy thereof by registered or certified mail (or any
     substantially similar form of mail), postage prepaid, to Parent, Holdings
     or the Borrower, as the case may be, at its address set forth in Section
     10.2 or at such other address of which the Administrative Agent shall have
     been notified pursuant thereto;

(d)  agrees that nothing herein shall affect the right to effect service of
     process in any other manner permitted by law or shall limit the right to
     sue in any other jurisdiction; and



                                       75
<PAGE>

(e)  waives, to the maximum extent not prohibited by law, any right it may have
     to claim or recover in any legal action or proceeding referred to in this
     Section any special, exemplary, punitive or consequential damages.

10.13  Suretyship Waivers. Each of Holdings and the Borrower hereby waives any
     and all defenses applicable or available to guarantors or sureties whether
     arising as a result of the joint and several nature of the obligations of
     Parent, Holdings and the Borrower hereunder or otherwise. Without limiting
     the generality of the foregoing, the waivers of the Guarantors (as defined
     in the Guarantee and Collateral Agreement) set forth in Section 2.5 of the
     Guarantee and Collateral Agreement are hereby incorporated herein by this
     reference mutatis mutandis and such waivers shall be deemed to be made by
     Parent, Holdings and the Borrower hereunder as if such waivers had been
     expressly set forth herein.

10.14 Acknowledgments. Each of Parent, Holdings and the Borrower hereby
     acknowledges that:

(a)  it has been advised by counsel in the negotiation, execution and delivery
     of this Agreement and the other Loan Documents;

(b)  neither the Arranger, any Agent nor any Lender has any fiduciary
     relationship with or duty to Parent, Holdings or the Borrower arising out
     of or in connection with this Agreement or any of the other Loan Documents,
     and the relationship between the Arranger, the Agents and Lenders, on one
     hand, and Parent, Holdings and the Borrower, on the other hand, in
     connection herewith or therewith is solely that of debtor and creditor; and

(c)  no joint venture is created hereby or by the other Loan Documents or
     otherwise exists by virtue of the transactions contemplated hereby among
     the Arranger, the Agents and the Lenders or among Parent, Holdings, the
     Borrower and the Lenders.

10.15  Confidentiality. Each of the Arranger, the Agents and the Lenders agrees
     to keep confidential all non-public information provided to it by Parent or
     any Loan Party pursuant to this Agreement that is designated by Parent or
     such Loan Party as confidential; provided that nothing herein shall prevent
     the Arranger, any Agent or any Lender from disclosing any such information
     (a) to the Arranger, any Agent, any other Lender or any affiliate of any
     thereof, (b) to any Participant or Assignee (each, a "Transferee") or
     prospective Transferee that agrees to comply with the provisions of this
     Section, (c) to any of its employees, directors, agents, attorneys,
     accountants and other professional advisors, (d) upon the request or demand
     of any Governmental Authority having jurisdiction over it, (e) in response
     to any order of any court or other Governmental Authority or as may
     otherwise be required pursuant to any Requirement of Law, (f) if requested
     or required to do so in connection with any litigation or similar
     proceeding, (g) that has been publicly disclosed other than in breach of
     this Section, (h) to the National Association of Insurance Commissioners or
     any similar organization or any nationally recognized rating agency that
     requires access to information about a Lender's investment portfolio in
     connection with ratings issued with respect to such Lender or (i) in
     connection with the exercise of any remedy hereunder or under any other
     Loan Document.



                                       76
<PAGE>

10.16  Release of Collateral and Guarantee Obligations. (a) Notwithstanding
     anything to the contrary contained herein or in any other Loan Document,
     upon request of the Borrower in connection with any Disposition of Property
     permitted by the Loan Documents, the Administrative Agent shall take such
     actions as shall be required to release its security interest in any
     Collateral being Disposed of in such Disposition, and to release any
     guarantee obligations of any Person being Disposed of in such Disposition,
     to the extent necessary to permit consummation of such Disposition in
     accordance with the Loan Documents; provided that the Borrower shall have
     delivered to the Administrative Agent, at least ten Business Days prior to
     the date of the proposed release, a written request for release identifying
     the relevant Collateral being Disposed of in such Disposition and the terms
     of such Disposition in reasonable detail, including the date thereof, the
     price thereof and any expenses in connection therewith, together with a
     certification by the Borrower stating that such transaction is in
     compliance with this Agreement and the other Loan Documents and that the
     proceeds of such Disposition will be applied in accordance with this
     Agreement and the other Loan Documents.

(b)  Notwithstanding anything to the contrary contained herein or any other Loan
     Document, when all Obligations have been paid in full, upon request of the
     Borrower, the Administrative Agent shall take such actions as shall be
     required to release its security interest in all Collateral, and to release
     all guarantee obligations provided for in any Loan Document.

10.17  Accounting Changes. In the event that any "Accounting Change" (as defined
     below) shall occur and such change results in a change in the method of
     calculation of financial covenants, standards or terms in this Agreement,
     then Parent, Holdings, the Borrower and the Administrative Agent agree to
     enter into negotiations in order to amend such provisions of this Agreement
     so as to equitably reflect such Accounting Changes with the desired result
     that the criteria for evaluating the Borrower's Subsidiaries' financial
     condition shall be the same after such Accounting Changes as if such
     Accounting Changes had not been made. Until such time as such an amendment
     shall have been executed and delivered by Parent, Holdings, the Borrower,
     the Administrative Agent and the Required Lenders, all financial covenants,
     standards and terms in this Agreement shall continue to be calculated or
     construed as if such Accounting Changes had not occurred. "Accounting
     Changes" refers to changes in accounting principles required or permitted
     by the promulgation of any rule, regulation, pronouncement or opinion by
     the Financial Accounting Standards Board of the American Institute of
     Certified Public Accountants or, if applicable, the SEC.

10.18  Delivery of Lender Addenda. Each initial Lender shall become a party to
     this Agreement by delivering to the Administrative Agent and the
     Syndication Agent a Lender Addendum duly executed by such Lender, Parent,
     Holdings, the Borrower and each Agent.

10.19  Construction. Each covenant contained herein shall be construed (absent
     express provision to the contrary) as being independent of each other
     covenant contained herein, so that compliance with any one covenant shall
     not (absent such an express contrary provision) be deemed to excuse
     compliance with any other covenant. Where any provision herein refers to
     action to be taken by any Person, or which such Person is prohibited from
     taking, such provision shall be applicable whether such action is taken
     directly or indirectly by such Person.



                                       77
<PAGE>

10.20  WAIVERS OF JURY TRIAL. PARENT, HOLDINGS, THE BORROWER, THE ARRANGER, THE
     AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL
     BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY
     OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

                            [SIGNATURE PAGES FOLLOW]




                                       78
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

                                              THE WILLIAMS COMPANIES, INC.


                                              By:
                                                 -------------------------------
                                                   Name:
                                                   Title:

                                              WILLIAMS PRODUCTION HOLDINGS LLC


                                              By:
                                                 -------------------------------
                                                   Name:
                                                   Title:

                                              WILLIAMS PRODUCTION RMT COMPANY


                                              By:
                                                 -------------------------------
                                                   Name:
                                                   Title:

                                              LEHMAN BROTHERS INC.,
                                              as Arranger


                                              By:
                                                 -------------------------------
                                                   Name:
                                                   Title:





                      [SIGNATURE PAGE TO CREDIT AGREEMENT]

<PAGE>
                                              LEHMAN COMMERCIAL PAPER INC., as
                                              Syndication Agent


                                              By:
                                                 -------------------------------
                                                   Name:
                                                   Title:

                                              LEHMAN COMMERCIAL PAPER INC., as
                                              Administrative Agent


                                              By:
                                                 -------------------------------
                                                   Name:
                                                   Title:







                      [SIGNATURE PAGE TO CREDIT AGREEMENT]

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>d00961exv10w2.txt
<DESCRIPTION>PURCHASE AGREEMENT
<TEXT>
<PAGE>

                                                                  EXECUTION COPY

                                                                    Exhibit 10.2


                   FIRST AMENDED AND RESTATED CREDIT AGREEMENT

                          Dated as of October 31, 2002

                                      Among

                          THE WILLIAMS COMPANIES, INC.
                         NORTHWEST PIPELINE CORPORATION
                   TRANSCONTINENTAL GAS PIPE LINE CORPORATION
                       TEXAS GAS TRANSMISSION CORPORATION

                                  as Borrowers

                             THE BANKS NAMED HEREIN

                                    as Banks

                               JPMORGAN CHASE BANK

                                       and

                                 COMMERZBANK AG

                            as Co-Syndication Agents

                                       and

                         CREDIT LYONNAIS NEW YORK BRANCH

                             as Documentation Agent

                                       and

                               CITICORP USA, INC.

                                    as Agent

                                       and

                            SALOMON SMITH BARNEY INC.

                                   as Arranger

<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                                Page

<S>                                                                                                             <C>
Article I DEFINITIONS AND ACCOUNTING TERMS........................................................................1

         Section 1.01. Certain Defined Terms......................................................................1

         Section 1.02. Computation of Time Periods...............................................................30

         Section 1.03. Accounting Terms..........................................................................30

         Section 1.04. Miscellaneous.............................................................................30

         Section 1.05. Ratings...................................................................................31

Article II AMOUNTS AND TERMS OF THE ADVANCES.....................................................................31

         Section 2.01. The A Advances............................................................................31

         Section 2.02. Making the A Advances.....................................................................31

         Section 2.03. Fees......................................................................................34

         Section 2.04. Reduction of the Commitments..............................................................34

         Section 2.05. Repayment of A Advances...................................................................37

         Section 2.06. Interest on A Advances....................................................................37

         Section 2.07. Additional Interest on Eurodollar Rate Advances...........................................38

         Section 2.08. Interest Rate Determination...............................................................38

         Section 2.09. Evidence of Debt..........................................................................38

         Section 2.10. Prepayments...............................................................................39

         Section 2.11. Increased Costs...........................................................................39

         Section 2.12. Illegality................................................................................41

         Section 2.13. Payments and Computations.................................................................41

         Section 2.14. Taxes.....................................................................................43

         Section 2.15. Sharing of Payments, Etc..................................................................45

         Section 2.16. The B Advances............................................................................45

</TABLE>
                                       i
<PAGE>

<TABLE>
<CAPTION>

                                                                                                                Page

<S>                                                                                                             <C>
         Section 2.17. Optional Termination......................................................................49

         Section 2.18. Extension of Termination Date.............................................................50

         Section 2.19. Voluntary Conversion of Advances..........................................................50

         Section 2.20. Automatic Provisions......................................................................50

Article III CONDITIONS...........................................................................................51

         Section 3.01. Conditions Precedent to Effectiveness.....................................................51

         Section 3.02. Additional Conditions Precedent to Each A Borrowing.......................................53

         Section 3.03. Conditions Precedent to Each B Borrowing..................................................53

         Section 3.04. Special Condition to Effectiveness of Certain Provisions..................................54

Article IV REPRESENTATIONS AND WARRANTIES........................................................................54

         Section 4.01. Representations and Warranties of the Borrowers...........................................54

Article V COVENANTS OF THE BORROWERS.............................................................................60

         Section 5.01. Affirmative Covenants.....................................................................60

         Section 5.02. Negative Covenants........................................................................66

Article VI EVENTS OF DEFAULT.....................................................................................76

         Section 6.01. Events of Default.........................................................................76

Article VII THE AGENT............................................................................................79

         Section 7.01. Authorization and Action..................................................................79

         Section 7.02. Agent's Reliance, Etc.....................................................................80

         Section 7.03. CUSA, Chase, Commerzbank, Credit Lyonnais and Affiliates..................................80

         Section 7.04. Bank Credit Decision......................................................................81

         Section 7.05. Indemnification...........................................................................81

         Section 7.06. Successor Agent...........................................................................82

         Section 7.07. Co-Syndication Agents; Documentation Agent................................................82

</TABLE>
                                       ii
<PAGE>

<TABLE>
<CAPTION>

                                                                                                                Page

<S>                                                                                                             <C>
Article VIII MISCELLANEOUS.......................................................................................82

         Section 8.01. Amendments, Etc...........................................................................82

         Section 8.02. Notices, Etc..............................................................................83

         Section 8.03. No Waiver; Remedies.......................................................................83

         Section 8.04. Costs and Expenses........................................................................84

         Section 8.05. Right of Set-off..........................................................................85

         Section 8.06. Binding Effect; Transfers.................................................................85

         Section 8.07. Governing Law.............................................................................89

         Section 8.08. Interest..................................................................................89

         Section 8.09. Execution in Counterparts.................................................................89

         Section 8.10. Survival of Agreements, Representations and Warranties, Etc...............................89

         Section 8.11. Borrowers' Right to Apply Deposits........................................................90

         Section 8.12. [Intentionally Omitted]...................................................................90

         Section 8.13. Confidentiality...........................................................................90

         Section 8.14. WAIVER OF JURY TRIAL......................................................................91

         Section 8.15. Severability..............................................................................91

         Section 8.16. Forum Selection and Consent to Jurisdiction...............................................91

         Section 8.17. Existing Defaults of No Effect............................................................91

Schedule I - Bank Information
Schedule II - Borrower Information
Schedule III - Outstanding Letters of Credit
Schedule IV - Existing Projects
Schedule V - Storage Lease
Schedule VI - Permitted Liens
Schedule VII - Permitted Dispositions
Schedule VIII - Additional Public Filings
Schedule IX - Liens Securing Existing Debt/Obligations
Schedule X - Commitments
Schedule XI - Rating Categories
Schedule XII - Progeny Facilities

</TABLE>
                                      iii

<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                                             <C>
Schedule XIII - Post-Closing Items
Schedule XIV - Midstream Subsidiaries

Exhibit A - 1 - Form of A Note
Exhibit A - 2 - Form of B Note
Exhibit B - 1 - Notice of A Borrowing
Exhibit B - 2 - Notice of B Borrowing
Exhibit C - Opinion of William G. von Glahn
Exhibit D - 1 - Opinion of New York Counsel (Enforceability)
Exhibit D - 2 - Opinion of New York Counsel (Perfection)
Exhibit E - Existing Loans and Investments in WCG Subsidiaries
Exhibit F - Form of Transfer Agreement
Exhibit G - Form of Security Agreement
Exhibit H - Form of LLC Guaranty
Exhibit I - Form of Midstream Guaranty
Exhibit J - Form of Pledge Agreement
Exhibit K - Form of Holdings Guaranty
Exhibit L - Form of LC Security Agreement
Exhibit M - Existing Loans and Investments in WCG Subsidiaries

</TABLE>
                                       iv
<PAGE>

                   FIRST AMENDED AND RESTATED CREDIT AGREEMENT

     This First Amended and Restated Credit Agreement, dated as of October 31,
2002 is by and among the Borrowers, the Co-Syndication Agents, the Documentation
Agent, the Agent and the Banks (amending and restating the Credit Agreement
dated as of July 25, 2000 (the "Existing Credit Agreement"), as amended by a
letter agreement dated as of October 10, 2000, by a Waiver and First Amendment
to Credit Agreement dated as of January 31, 2001, by a Second Amendment to
Credit Agreement dated as of February 7, 2002, by a Third Amendment to Credit
Agreement dated as of March 11, 2002, by a Consent and Fourth Amendment to
Credit Agreement dated as of July 31, 2002 and by a Consent and Waiver to the
Credit Agreement dated as of September 20, 2002). In consideration of the mutual
covenants and agreements contained herein, the Borrowers, the Agent and the
Banks hereby agree as set forth herein.

                             PRELIMINARY STATEMENTS

     WHEREAS, the Borrowers have requested that the Existing Credit Agreement be
amended as provided herein and to continue to obtain Commitments from the Banks
pursuant to which A Advances, on the terms and conditions and in the amounts set
forth herein, will be made to the Borrowers from time to time prior to the
Termination Date; and

     WHEREAS, the Banks have agreed to amend and restate the Existing Credit
Agreement on the terms and conditions as provided herein and are willing, on the
terms and subject to the conditions hereinafter set forth (including Article
III), to continue to extend such Commitments and make such A Advances to the
Borrowers; and

     WHEREAS, the Borrowers may from time to time request B Advances pursuant to
the terms and conditions and in the amounts set forth herein, and one or more
Banks may (but are not obligated to) make such B Advances;

     NOW, THEREFORE, the parties hereto have agreed to amend and restate the
Existing Credit Agreement and the Existing Credit Agreement is hereby amended
and restated as follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

     Section 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

          "A Advance" means an advance by a Bank to a Borrower as part of an A
     Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance,
     each of which shall be a "Type" of A Advance.

          "A Borrowing" means a borrowing consisting of simultaneous A Advances
     of the same Type to the same Borrower made by each of the Banks pursuant to
     Section 2.01.

<PAGE>
          "A Note" means a promissory note of a Borrower payable to the order of
     any Bank, in substantially the form of Exhibit A-1 hereto (as such note may
     be amended, endorsed or otherwise modified from time to time), delivered at
     the request of such Bank pursuant to Section 2.09 or 8.06, together with
     any other note accepted from time to time in substitution or replacement
     therefor.

          "Acceptable Security Interest" in any property shall mean a Lien
     granted pursuant to a Credit Document (a) which exists in favor of the
     Collateral Trustee for the benefit of itself and other parties, as more
     fully described in the Collateral Trust Agreement, (b) which is superior to
     all other Liens, except Permitted Liens, (c) which secures the "Secured
     Obligations" (as defined in the Security Agreement), and (d) which is
     perfected and is enforceable by the Collateral Trustee for the benefit of
     itself and other parties, as more fully described in the Collateral Trust
     Agreement, against all other Persons in preference to any rights of any
     such other Person therein (other than Permitted Liens); provided that such
     Lien may be subject to the Agreed Exceptions.

          "Advance" means an A Advance or a B Advance.

          "Agent" means CUSA in its capacity as agent pursuant to Article VII
     hereof and any successor Agent pursuant to Section 7.06.

          "Agreed Exceptions" means exceptions to title to be set forth in the
     "Mortgage" (as defined in the L/C Agreement) that are customary in similar
     mortgages, do not materially detract from the value of the assets covered
     thereby, do not secure Debt and arise in the ordinary course of business.

          "Agreement" means this Credit Agreement, dated as of October 31, 2002,
     among the Borrowers, the Agent and the Banks, as amended, amended and
     restated, extended, supplemented, restated or modified from time to time.

          "American Soda" means American Soda, L.L.P., a Colorado limited
     liability partnership.

          "Applicable Commitment Fee Rate" means the rate per annum set forth on
     Schedule XI under the heading "Applicable Commitment Fee Rate" for the
     relevant Rating Category applicable to TWC from time to time. The
     Applicable Commitment Fee Rate shall change when and as the relevant Rating
     Category applicable to TWC changes.

          "Applicable Lending Office" means, with respect to each Bank, such
     Bank's Domestic Lending Office in the case of a Base Rate Advance and such
     Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Advance
     and, in the case of a B Advance, the office of such Bank notified by such
     Bank to the Agent as its Applicable Lending Office with respect to such B
     Advance.

          "Applicable Margin" means as to any Eurodollar Rate Advance or Base
     Rate Advance to any Borrower, the rate per annum set forth in the
     applicable table on Schedule XI under the heading "Applicable Margin" for
     the relevant Rating Category


                                       2
<PAGE>

     applicable to TWC. The Applicable Margin determined pursuant to this
     definition for any Eurodollar Rate Advance or Base Rate Advance, as
     applicable, shall change when and as the relevant Rating Category
     applicable to TWC changes.

          "Arctic Fox" has the meaning specified in the definition of "Arctic
     Fox Capital Contribution".

          "Arctic Fox Capital Contribution" means the transfer of the Equity
     Interests of Williams Energy (Canada), Inc. from Williams GmbH, in the form
     of a dividend, up through certain other Subsidiaries, to TWC, and by TWC in
     the form of a capital contribution to Arctic Fox Assets, L.L.C. ("Arctic
     Fox") as required by, and in accordance with, Amendment No. 3 to Certain
     Operative Documents and Consents dated as of October 31, 2002, among, inter
     alia, TWC and Arctic Fox.

          "Arranger" means Salomon Smith Barney Inc.

          "Asset" or "property" (in each case, whether or not capitalized) means
     any right, title or interest in any kind of property or asset, whether
     real, personal or mixed, and whether tangible or intangible.

          "Attributable Obligation" of any Person means, with respect to any
     Sale and Lease-Back Transaction of such Person as of any particular time,
     the present value at such time discounted at the rate of interest implicit
     in the terms of the lease of the obligations of the lessee under such lease
     for net rental payments during the remaining term of the lease (including
     any period for which such lease has been extended or may, at the option of
     such Person, be extended).

          "B Advance" means an advance by a Bank to a Borrower as part of a B
     Borrowing resulting from the auction bidding procedure described in Section
     2.16.

          "B Borrowing" means a borrowing consisting of simultaneous B Advances
     to the same Borrower from each of the Banks whose offer to make one or more
     B Advances as part of such borrowing has been accepted by such Borrower
     under the auction bidding procedure described in Section 2.16.

          "B Note" means a promissory note of a Borrower payable to the order of
     any Bank, in substantially the form of Exhibit A-2 hereto, delivered at the
     request of such Bank pursuant to Section 2.09, 2.16 or 8.06.

          "B Reduction" has the meaning specified in Section 2.01.

          "Banks" means the lenders listed on the signature pages hereof and
     each other Person that becomes a Bank pursuant to the last sentence of
     Section 8.06(a).

          "Barrett" means, collectively, RMT and its Subsidiaries.

          "Barrett Loan" means the loans made pursuant to the Barrett Loan
     Agreement.


                                       3
<PAGE>

          "Barrett Loan Agreement" means the Credit Agreement, dated as of July
     31, 2002, among TWC, RMT LLC, RMT, the Lenders party thereto from time to
     time, Lehman Brothers Inc., as Arranger, and Lehman Commercial Paper Inc.,
     as Syndication Agent and as Administrative Agent and the Loan Documents (as
     defined therein).

          "Base Rate" means a fluctuating interest rate per annum as shall be in
     effect from time to time which rate per annum shall at all times be equal
     to the higher of:

          (a) the rate of interest announced publicly by Citibank in New York,
     New York, from time to time, as Citibank's base rate; or

          (b) 1/2 of one percent per annum above the Federal Funds Rate in
     effect from time to time.

          "Base Rate Advance" means an A Advance which bears interest as
     provided Section 2.06(a).

          "Bio-Energy" means Williams Bio-Energy, L.L.C, Williams Ethanol
     Services, Inc., and Nebraska Energy, L.L.C.

          "Borrowers" means TWC, NWP, TGPL and TGT.

          "Borrowing" means an A Borrowing or a B Borrowing.

          "Business Day" means a day of the year on which banks are not required
     or authorized to close in New York City and, if the applicable Business Day
     relates to any Eurodollar Rate Advances or relates to any B Advance as to
     which the related Notice of B Borrowing is delivered pursuant to clause (B)
     of Section 2.16(a)(i), on which dealings are carried on in the London
     interbank market.

          "Business Entity" means a partnership, limited partnership, limited
     liability partnership, corporation (including a business trust), limited
     liability company, unlimited liability company, joint stock company trust,
     unincorporated association, joint venture or other entity.

          "California Proceedings" means the proceedings with or in the State of
     California, as described in more detail on the Form 10-Q for the quarterly
     period ended June 30, 2002, filed by the Borrower with the Securities and
     Exchange Commission on August 14, 2002.

          "Capital Lease" means a lease that in accordance with generally
     acceptable accounting principles must be reflected on a company's balance
     sheet as an asset and corresponding liability.

          "Cardinal Pipeline System" means that intrastate natural gas pipeline
     system doing business under that name located in the State of North
     Carolina, in which TWC indirectly owned a 45% interest on July 31, 2002.


                                       4
<PAGE>

          "Cash Collateralize" has the meaning specified in Section 1.1 of the
     L/C Agreement.

          "Cash Equivalents" means any of the following, to the extent owned by
     a Borrower or any of its Subsidiaries free and clear of all Liens other
     than Permitted Liens and having a maturity of not greater than 270 days
     from the date of acquisition thereof: (a) readily marketable direct
     obligations of the Government of the United States or any agency or
     instrumentality thereof or obligations unconditionally guaranteed by the
     full faith and credit of the Government of the United States, (b) insured
     certificates of deposit of or time deposits with any commercial bank that
     is a Bank or a member of the Federal Reserve System, issues (or the parent
     of which issues) commercial paper rated as described in clause (c) below,
     is organized under the laws of the United States or any State thereof and
     has combined capital and surplus of at least $1 billion or (c) commercial
     paper in an aggregate amount of no more than $500,000,000, per issuer
     outstanding at any time, issued by any corporation organized under the laws
     of any State of the United States and rated at least "Prime-1" (or the then
     equivalent grade) by Moody's Investors Service, Inc. or "A-1" (or the then
     equivalent grade) by Standard & Poor's, a division of The McGraw-Hill
     Companies, Inc.

          "Cash Flow" means, for any period, the Consolidated cash flow from
     operations of a Borrower and its Consolidated Subsidiaries for such period
     determined in accordance with generally accepted accounting principles;
     provided that in determining such Consolidated cash flow from operations,
     there shall be excluded therefrom (to the extent otherwise included
     therein) (a) any positive cash flow from operations of any Person
     (including Project Financing Subsidiaries) subject to any restriction
     prohibiting the distribution of cash to such Borrower or any of its
     Consolidated Subsidiaries, except and then only to the extent of the amount
     thereof that such Borrower or any of its Consolidated Subsidiaries actually
     receives or has the right to receive (within the limits of such
     restrictions) during such period, (b) proceeds resulting from the sale,
     transfer or other disposition of any property by such Borrower or its
     Consolidated Subsidiaries (other than sales, transfers and other
     dispositions in the ordinary course of business), (c) all other
     extraordinary items, (d) any item constituting the cumulative effect of a
     change in accounting principles, prior to applicable income taxes, (e)
     repayment of the WCG Synthetic Lease and (f) for the third Fiscal Quarter
     of 2002 only, margin and capital or adequate assurances relating to its
     refining and marketing and EMT.

          "Cash Holdings" of any Person means the total investment of such
     Person at the time of determination in:

          (a) demand deposits and time deposits maturing within one year with a
     Bank (or other commercial banking institution of the stature referred to in
     clause (d)(i));

          (b) any note or other evidence of indebtedness, maturing not more than
     one year after such time, issued or guaranteed by the United States
     Government or by a government of another country which carries a long-term
     rating of Aaa by Moody's or AAA by S&P;


                                       5
<PAGE>

          (c) commercial paper, maturing not more than nine months from the date
     of issue, which is issued by

               (i) a corporation (other than an affiliate of a Borrower) rated
          (x) A-1 by S&P, P-1 by Moody's or F-1 by Fitch or (y) lower than set
          forth in clause (x) above, provided that the value of all such
          commercial paper shall not exceed 10% of the total value of all
          commercial paper comprising "Cash Holdings," or

               (ii) any Bank (or its holding company) with a rating on its
          long-term unsecured debt of at least AA from S&P or Aa from Moody's;

          (d) any certificate of deposit or bankers acceptance, maturing not
     more than three years after such time, which is issued by either

               (i) a commercial banking institution that is a member of the
          Federal Reserve System and has a combined capital and surplus and
          undivided profits of not less than $1,000,000,000, or

               (ii) any Bank with a rating on its long-term unsecured debt of at
          least AA by S&P or Aa by Moody's;

          (e) notes or other evidences of indebtedness, maturing not more than
     three years after such time, issued by

               (i) a corporation (other than an affiliate of a Borrower) rated
          AA by S&P or Aa by Moody's, or

               (ii) any Bank (or its holding company) with a rating on its
          long-term unsecured debt of at least AA by S&P or Aa by Moody's;

          (f) any repurchase agreement entered into with any Bank (or other
     commercial banking institution of the stature referred to in clause (d)(i))
     which

               (i) is secured by a fully perfected security interest in any
          obligation of the type described in any of clauses (a) through (d),
          and

               (ii) has a market value at the time such repurchase agreement is
          entered into of not less than 100% of the repurchase obligation of
          such Bank (or other commercial banking institution) thereunder; and

          (g) money market preferred instruments by participation in a Dutch
     auction (or the equivalent) where the investment is rated no lower than Aa
     by Moody's or AA by S&P.

          "Castle" means Castle Associates, L.P., a Delaware partnership.


                                       6
<PAGE>
          "Castle Partnership Agreement" means the Amended and Restated
     Agreement of Limited Partnership of Castle Associates L.P., dated as of
     December 23, 1998, by and among Garrison, L.L.C., a Delaware limited
     liability company, Laughton, L.L.C., a Delaware limited liability company,
     and Colchester LLC, a Delaware limited liability company, as amended,
     supplemented, amended and restated or otherwise modified from time to time.

          "Castle Transaction" means the purchase by TWC of the limited
     partnership interest in Castle held by Colchester LLC, a Delaware limited
     liability company.

          "Chase" means JPMorgan Chase Bank.

          "Citibank" means Citibank, N.A.

          "Code" means, as appropriate, the Internal Revenue Code of 1986, as
     amended, or any successor federal tax code, and any reference to any
     statutory provision shall be deemed to be a reference to any successor
     provision or provisions.

          "Collateral" means all personal and real property comprising the
     Midstream Assets of TWC, each Guarantor and each of the Midstream
     Subsidiaries (but excluding agreements that make up the Trading Book to the
     extent relating to contracts to which EMT is a party) whether now owned or
     hereafter acquired and all other property subject to a Lien for the benefit
     of the Banks in accordance with the terms of any Credit Document; provided
     that no real or personal property of RMT LLC or its Subsidiaries (including
     without limitation the RMT Equity Interests) or real or personal property
     of WGPC shall be included as "Collateral"; provided with respect to oil of
     Williams Alaska Petroleum, Inc. ("WAPI") that is transported through the
     Trans-Alaska Pipeline System, the security interest in such oil shall
     attach only at the time such oil is delivered to WAPI through the
     Trans-Alaska Pipeline System at the outlet flange measuring device located
     at North Pole, Alaska.

          "Collateral Account" means a deposit account of TWC which meets each
     of the following requirements: (i) with a commercial banking institution
     that is a member of the Federal Reserve System, has its short-term deposits
     rated A- or higher by Moody's or S&P and has a combined capital, surplus
     and undivided profits of not less than $1,000,000,000, (ii) over which TWC
     has no control, (iii) in which an Acceptable Security Interest exists, (iv)
     as to which (if not held with the Collateral Agent) TWC has complied with
     Sections 3.1 and 3.6 of the Security Agreement, and (v) deposits in which,
     if invested, may be invested only in those investments permitted under
     Sections 5.02(e) and (o).

          "Collateral Agent" means CUSA in its capacity as "Collateral Agent"
     pursuant to the L/C Collateral Documents and Article VIII of the L/C
     Agreement, and any successor in such capacity pursuant to Section 8.14 of
     the L/C Agreement.

          "Collateral Trust Agreement" means that certain Collateral Trust
     Agreement dated as of July 31, 2002 by and among the TWC, several of its
     Subsidiaries and the Collateral Trustee, which Collateral Trust Agreement
     provides for certain Collateral to be


                                       7
<PAGE>
     held by such Collateral Trustee for the benefit of the Banks and agents
     under this Agreement, the lenders, Issuing Banks and agents under the L/C
     Agreement and the holders of certain public debt of TWC issued pursuant to
     that certain (i) Indenture between MAPCO Inc., as Issuer, and Bankers Trust
     Company, as Trustee dated March 31, 1990 and (ii) Indenture between Transco
     Energy Company, as Issuer, and Bankers Trust Company, as Trustee dated May
     1, 1990.

          "Collateral Trustee" means Citibank in its capacity as "Collateral
     Trustee" pursuant to the Collateral Trust Agreement and its successors or
     assigns appointed pursuant to Article 5 of the Collateral Trust Agreement.

          "Commerzbank" means Commerzbank AG.

          "Commitment" of any Bank to any Borrower means at any time the amount
     set opposite or deemed (pursuant to clause (vii) of the last sentence of
     Section 8.06(a) and as reflected in the relevant Transfer Agreement
     referred to in such sentence) to be set opposite such Bank's name for such
     Borrower on Schedule X as such amount may be terminated, reduced or
     increased, pursuant to Section 2.04, Section 2.17, Section 6.01 or Section
     8.06(a); provided that, at no time shall the amount of the Commitment of a
     Bank to any of NWP, TGPL or TGT exceed the amount of the Commitment of such
     Bank to TWC at such time.

          "Consolidated" refers to the consolidation of the accounts of any
     Person and its consolidated subsidiaries in accordance with generally
     accepted accounting principles.

          "Consolidated Net Worth" of any Person means the Net Worth of such
     Person and its Consolidated Subsidiaries on a Consolidated basis plus, in
     the case of TWC, the Designated Minority Interests to the extent not
     otherwise included; provided that in no event shall the value ascribed to
     Designated Minority Interests for the Consolidated Subsidiaries of TWC
     described in clauses (i) through (v), (vii) and (viii) of the definition of
     "Designated Minority Interests" below exceed $136,892,000 in the aggregate
     for the purposes of this definition. As used in this definition,
     "Designated Minority Interests" means, as of any date of determination, the
     total value, determined in accordance with generally accepted accounting
     principles, of the minority interests of Persons other than the Borrower
     and Consolidated Subsidiaries of the Borrower in the following Subsidiaries
     of the Borrower: (i) El Furrial, (ii) PIGAP II, (iii) Nebraska Energy, (iv)
     Seminole, (v) American Soda, (vi) the Midstream Asset MLP, (vii) Apco
     Argentina, Inc. and (viii) other Subsidiaries with a value not to exceed in
     the aggregate $9,000,000 for such other Subsidiaries not referred to in
     items (i) through (vii); provided that minority interests which provide for
     a stated preferred cumulative return shall not be included in "Designated
     Minority Interests".

          "Consolidated Subsidiaries" of any Person means all other Persons the
     financial statements of which are consolidated with those of such Person in
     accordance with generally accepted accounting principles. For the avoidance
     of doubt, as of the date of


                                       8
<PAGE>

     this Agreement, the MLP and its Subsidiaries shall be "Consolidated
     Subsidiaries" of TWC.

          "Consolidated Tangible Net Worth" of any Person means the Tangible Net
     Worth of such Person and its Consolidated Subsidiaries on a Consolidated
     basis.

          "Consolidating" refers to, with respect to the balance sheets and
     statements of income and cash flows required by Sections 4.01(e),
     5.01(b)(ii) and 5.01(b)(iii), the consolidation of the accounts of TWC and
     its subsidiaries in accordance with the following format: (i) the WCG
     Subsidiaries, (ii) TWC and its subsidiaries (which term does not include
     the WCG Subsidiaries), (iii) consolidation adjustments, and (iv)
     Consolidated financial statements of TWC and each of its subsidiaries,
     including the WCG Subsidiaries.

          "Contractual Obligation" means as to any Person, any provision of any
     security issued by such Person or of any agreement, instrument or other
     undertaking to which such Person is a party or by which it or any of its
     property is bound.

          "Convert," "Conversion" and "Converted" each refers to a conversion of
     Advances of one Type into Advances of the other Type pursuant to Section
     2.02, Section 2.19 or Section 2.20.

          "Co-Syndication Agent" means either of Chase or Commerzbank, together
     with the successor and assigns of each in such capacity.

          "Credit Documents" means this Agreement, the L/C Agreement, the L/C
     Collateral Documents, the Letter of Credit Documents, each Letter of
     Credit, all documents, instruments, agreements, certificates and notices at
     any time executed and/or delivered to the Agent, the Collateral Trustee,
     the Surety Administrative Agent, any Issuing Bank, or any Bank in
     connection therewith.

          "Credit Lyonnais" means Credit Lyonnais New York Branch.

          "CUSA" means Citicorp USA, Inc.

          "Debt" means, in the case of any Person, the principal or equivalent
     amount (without duplication) of (i) indebtedness of such Person for
     borrowed money, (ii) obligations of such Person evidenced by bonds,
     debentures, notes or similar instruments, (iii) obligations of such Person
     to pay the deferred purchase price of property or services (other than
     trade payables not overdue by more than 60 days incurred in the ordinary
     course of business), (iv) obligations of such Person as lessee under leases
     that are, in accordance with generally accepted accounting principles,
     recorded as capital leases, (v) payments necessary to exercise a purchase
     option with respect to the property used by such Person and encumbered by a
     Synthetic Lease with such Person as lessee, excluding any portion of such
     amount representing accrued interest, transfer taxes or other ancillary
     items, (vi) obligations of such Person under any Financing Transaction,
     (vii) indebtedness incurred after July 31, 2002 of the Subsidiaries of such
     Person, and


                                       9
<PAGE>

     indebtedness incurred after the date of this Agreement of any other entity
     that has been created or utilized, directly or indirectly, for financing
     purposes of such Person or any of its Subsidiaries, (viii) obligations of
     such Person under guaranties in respect of, and obligations (contingent or
     otherwise) to purchase or otherwise acquire, or otherwise to assure a
     creditor against loss in respect of indebtedness or obligations of others
     of the kinds referred to in clauses (i) through (vii) of this definition,
     (ix) indebtedness or obligations of others of the kinds referred to in
     clauses (i) through (viii) of this definition secured by any Lien on or in
     respect of any property of such Person and (x) any Attributable Obligations
     of such Person; provided, however, that Debt shall not include (v) any
     obligations of TWC or its Subsidiaries in respect of the WCG Note Trust
     Bonds; (w) any obligations of TWC in respect of the FELINE PACS; (x)
     Non-Recourse Debt; (y) Performance Guaranties, (z) monetary obligations or
     guaranties of monetary obligations of Persons as lessee under leases (other
     than, to the extent provided herein above, Synthetic Leases) that are, in
     accordance with generally accepted accounting principles, recorded as
     operating leases and (aa) guarantees by such Person of obligations of
     others which are not obligations described in clauses (i) through (x) of
     this definition, and provided further that where any such indebtedness or
     obligation of such Person is made jointly, or jointly and severally, with
     any third party or parties other than any Subsidiary of such Person, the
     amount thereof for the purpose of this definition only shall be the pro
     rata portion thereof payable by such Person, so long as such third party or
     parties have not defaulted on its or their joint and several portions
     thereof and can reasonably be expected to perform its or their obligations
     thereunder. For the avoidance of doubt, "Debt" shall not include the
     Letters of Credit.

          "Deepwater Assets" shall have the meaning given such term in Item 8 of
     Schedule VII hereto.

          "Deepwater JV" means any Person to whom any Deepwater Assets have been
     transferred in connection with the formation of such Person and in which
     TWC or any of its Subsidiaries has retained an Equity Interest.

          "Deepwater Transactions" means, collectively, the transactions
     consummated in connection with (i) that certain Second Amended and Restated
     Participation Agreement dated January 28, 2002 by and among Williams Field
     Services - Gulf Coast Company, L.P., as Lessee, Williams Field Services
     Company, as Construction Agent, TWC, as Guarantor, Wells Fargo Bank
     Northwest, National Association, (fka First Security Bank, National
     Association), as Certificate Trustee, Wells Fargo Bank Nevada, N.A.,
     (successor to First Security Trust Company of Nevada), as Collateral Agent,
     the Certificate Holders, Hatteras Funding Corporation, as CP Lender, the
     Facility Lenders, Bank of America, National Association, as Administrative
     Agent and Administrator, Banc Of America Facilities Leasing, L.L.C., as
     Arranger, Bank of Nova Scotia, as Syndication Agent, and Credit Agricole
     Indosuez, as Documentation Agent and/or (ii) that certain Second Amended
     and Restated Participation Agreement dated January 28, 2002 by and among
     Williams Oil Gathering, L.L.C., as Lessee, Williams Field Services Company,
     as Construction Agent, TWC, as Guarantor, Wells Fargo Bank Northwest,
     National Association, (fka First Security Bank, National Association), as
     Certificate Trustee, Wells

                                       10
<PAGE>

     Fargo Bank Nevada, N.A., (successor to First Security Trust Company of
     Nevada), as Collateral Agent, the Certificate Holders, Hatteras Funding
     Corporation, as CP Lender, the Facility Lenders, Bank of America, National
     Association, as Administrative Agent and Administrator, Banc Of America
     Facilities Leasing, L.L.C., as Arranger, Bank of Nova Scotia, as
     Syndication Agent, and Credit Agricole Indosuez, as Documentation Agent.



          "Designated Midstream Subsidiaries" means Nebraska Energy; Rio Grande
     Pipeline Company; Baton Rouge Fractionators, L.L.C; Williams Lynxs Alaska
     CargoPort, L.L.C.; Tri-States NGL Pipeline, L.L.C.; WILPRISE Pipeline
     Company, L.L.C.; Williams Alaska Air Cargo Properties, L.L.C.; WilJet,
     L.L.C.; Longhorn Partners GP, L.L.C.; Longhorn Partners Pipeline, L.P.;
     Mapletree, LLC; E-Birchtree, LLC; E-Oaktree, LLC; and NewGP.

          "Designated Minority Interests" has the meaning specified in the
     definition of "Consolidated Net Worth".

          "Designating Bank" has the meaning specified in Section 8.06(d).

          "Documentation Agent" means Credit Lyonnais, together with its
     successors and assigns in such capacity.

          "Domestic Lending Office" means, with respect to any Bank, the office
     of such Bank specified as its "Domestic Lending Office" opposite its name
     on Schedule I hereto or pursuant to Section 8.06(a), or such other office
     of such Bank as such Bank may from time to time specify to the Borrowers
     and the Agent.

          "EDGAR" means "Electronic Data Gathering, Analysis and Retrieval"
     system, a database maintained by the Securities and Exchange Commission
     containing electronic filings of issuers of certain securities.

          "El Furrial" means WilPro Energy Services (El Furrial) Limited, a
     Cayman Islands corporation.

          "EMT" means Williams Energy Marketing & Trading Company.

          "Environment" shall have the meaning set forth in 42 U.S.C. ss.
     9601(8) or any successor statute and "Environmental" shall mean pertaining
     or relating to the Environment.

          "Environmental Permits" mean any and all material permits, licenses,
     registrations, exemptions and any other authorization required under any
     Environmental Protection Statutes.

          "Environmental Protection Statute" shall mean any United States local,
     state or federal, or any foreign, law, statute, regulation, order, consent
     decree or other agreement or Governmental Requirement arising from or in
     connection with or relating to the


                                       11
<PAGE>

     protection or regulation of the Environment, including, without limitation,
     those laws, statutes, regulations, orders, decrees, agreements and other
     Governmental Requirements relating to the disposal, cleanup, production,
     storing, refining, handling, transferring, processing or transporting of
     Hazardous Waste, Hazardous Substances or any pollutant or contaminant,
     wherever located.

          "Equity Interests" means any capital stock, partnership, joint
     venture, member or limited liability or unlimited liability company
     interest, beneficial interest in a trust or similar entity or other equity
     interest or investment of whatever nature.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
     amended from time to time, and the regulations promulgated and rulings
     issued thereunder from time to time.

          "ERISA Affiliate" of any Borrower means any trade or business (whether
     or not incorporated) which is a member of a group of which such Borrower is
     a member and which is under common control within the meaning of Section
     414 of the Code and the regulations promulgated thereunder.

          "Eurocurrency Liabilities" has the meaning assigned to that term in
     Regulation D of the Board of Governors of the Federal Reserve System, as in
     effect from time to time.

          "Eurodollar Lending Office" means, with respect to any Bank, the
     office of such Bank specified as its "Eurodollar Lending Office" opposite
     its name on Schedule I hereto or pursuant to Section 8.06(a) (or, if no
     such office is specified, its Domestic Lending Office) or such other office
     of such Bank as such Bank may from time to time specify to the Borrowers
     and the Agent.

          "Eurodollar Rate" means, for any Eurodollar Rate Advance comprising
     part of the same A Borrowing for any Interest Period therefor, the rate per
     annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
     on Dow Jones Markets Page 3750 (or any successor page) as the London
     interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
     (London time) two Business Days prior to the first day of such Interest
     Period for a term comparable to such Interest Period. If for any reason
     such rate is not available, the term "Eurodollar Rate" shall mean, for any
     Eurodollar Rate Advance comprising part of the same A Borrowing for any
     Interest Period therefor, the rate per annum (rounded upwards, if
     necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO
     Page as the London interbank offered rate for deposits in Dollars at
     approximately 11:00 a.m. (London time) two Business Days prior to the first
     day of such Interest Period for a term comparable to such Interest Period;
     provided, however, if more than one rate is specified on Reuters Screen
     LIBO Page, the applicable rate shall be the arithmetic mean of all such
     rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).

          "Eurodollar Rate Advance" means an A Advance that bears interest as
     provided in Section 2.06(b).


                                       12
<PAGE>

          "Eurodollar Rate Reserve Percentage" of any Bank for any Interest
     Period for any Eurodollar Rate Advance means the reserve percentage
     applicable during such Interest Period (or if more than one such percentage
     shall be so applicable, the daily average of such percentages for those
     days in such Interest Period during which any such percentage shall be so
     applicable) under regulations issued from time to time by the Board of
     Governors of the Federal Reserve System (or any successor) for determining
     the maximum reserve requirement (including, without limitation, any
     emergency, supplemental or other marginal reserve requirement) for such
     Bank with respect to liabilities or assets consisting of or including
     Eurocurrency Liabilities having a term equal to such Interest Period.

          "Events of Default" has the meaning specified in Section 6.01. For
     purposes of clause (iv) of the definition herein of "Interest Period",
     Section 2.19 and Section 6.01, an Event of Default exists as to a
     particular Borrower if such Event of Default exists wholly or in part as a
     result of any event, condition, action, inaction, representation or other
     matter of, by or otherwise directly or indirectly pertaining to such
     Borrower or any Subsidiary of such Borrower. Without limiting the foregoing
     and for purposes of further clarification, it is agreed that inasmuch as
     each of TGPL, NWP and TGT is a Subsidiary of TWC, any Event of Default that
     exists as to any of TGPL, NWP or TGT also exists as to TWC.

          "Excess Amount" has the meaning specified in Section 2.04(c).

          "Excluded Collateral" means (i) all property owned by RMT LLC or its
     Subsidiaries (including without limitation the RMT Equity Interests), WGPC
     and the Designated Midstream Subsidiaries, (ii) subject to Section 5.01(f),
     all personal and real property owned by the Restricted Midstream
     Subsidiaries, (iii) the Excluded Equity Interests, (iv) except to the
     extent currently subject to an Acceptable Security Interest, the Refineries
     (subject to the requirements set forth in Section 5.01(e)), (v) the Mapco
     Office Building, (vi) the agreements that make up the Trading Book but only
     to the extent relating to contracts to which EMT is a party and (vii) any
     property of Williams Field Services Company to the extent such property
     constitutes Leased Property (as such term is defined on even date herewith
     in the Deepwater Transactions).

          "Excluded Equity Interests" means (i) the Equity Interests in each of
     the Designated Midstream Subsidiaries (other than the Equity Interests of
     NewGP held by Williams Energy Services, LLC and Williams Natural Gas
     Liquids, Inc.); provided, however, as to each Designated Midstream
     Subsidiary, at such time as TWC or any of its Subsidiaries obtain the
     consents provided for in Paragraph 13 of Schedule XIII the Equity Interest
     of such Designated Midstream Subsidiary shall cease to be an "Excluded
     Equity Interest" and (ii) subject to Section 5.01(f), the Equity Interest
     in each of the Restricted Midstream Subsidiaries.

          "Existing Credit Agreement" has the meaning specified in the
     preliminary statements of this Agreement.


                                       13
<PAGE>

          "Federal Funds Rate" means, for any period, a fluctuating interest
     rate per annum equal for each day during such period to the weighted
     average of the rates on overnight federal funds transactions with members
     of the Federal Reserve System arranged by federal funds brokers, as
     published for such day (or, if such day is not a Business Day, for the next
     preceding Business Day) by the Federal Reserve Bank of New York, or, if
     such rate is not so published for any day which is a Business Day, the
     average of the quotations for such day on such transactions received by the
     Agent from three federal funds brokers of recognized standing selected by
     it.

          "FELINE PACS" means those certain units, as described in TWC's
     prospectus supplement dated January 7, 2002, issued by TWC in January, 2002
     in an aggregate face amount of $1,100,000,000.

          "Financing Transaction" means, with respect to any Person, any
     individual or group of related Persons (i) prepaid forward sales of oil,
     gas, minerals or other assets by such Person, (ii) interest rate, currency,
     commodity or other swaps, collars, caps, options or other derivatives or
     (iii) sales or transfers of assets, the primary effect of which or an
     important purpose of which is to receive money or credit in advance coupled
     with an obligation to repay or perform in the future to effect repayment
     thereof, including any contract monetization or production payment.
     Notwithstanding the foregoing, the following transactions, if entered into
     in the ordinary course of business by any Borrower or any of its affiliates
     and otherwise permitted hereunder, shall be deemed not to be Financing
     Transactions: (a) sales or exchanges of property fully delivered within 90
     days of receipt of the first payment by a counterparty therefor, (b)
     interest rate, currency, commodity or other swaps, collars, caps, options
     or other derivatives (including prepayment of forward sales of property to
     a counterparty of any Borrower or any of its affiliates to hedge against
     risks in the ordinary course of business, provided that the forward
     delivery obligation with respect to the property sold must be fully
     performed within 120 days), and (c) "riskless" forward sales or exchanges
     of property whereby a third party guarantees the performance obligations of
     any Borrower or any of its affiliates to deliver such property without
     subrogation or other recourse against any Borrower or any of its affiliates
     by any party to the transaction. The term "contract monetization" as used
     in this definition means the acceleration of cash flows a contract party
     expects to receive from such contract pursuant to which the contract party
     retains a significant ongoing obligation to perform, but shall in any event
     exclude transactions commonly referred to as securitizations. The term
     "production payment" as used in this definition means a limited-term
     non-cost bearing right to receive produced hydrocarbons or the proceeds
     therefrom satisfiable in cash or in kind up to an aggregate defined amount
     of cash and/or hydrocarbons.

          "Fiscal Quarter" means any quarter of a Fiscal Year.

          "Fiscal Year" means any period of twelve consecutive calendar months
     ending on December 31; references to a Fiscal Year with a number
     corresponding to any calendar year (e.g., the "2002 Fiscal Year") refer to
     the Fiscal Year ending on December 31 of such calendar year.


                                       14
<PAGE>

          "Fitch" means Fitch, Inc.

          "Governmental Authority" means the government of the United States,
     any other nation or any political subdivision thereof, whether state or
     local, and any agency, authority, instrumentality, regulatory body, court,
     central bank or other Person exercising executive, legislative, judicial,
     taxing, regulatory or administrative powers or functions of or pertaining
     to government.

          "Governmental Requirements" means all judgments, orders, writs,
     injunctions, decrees, awards, laws, ordinances, statutes, regulations,
     rules, franchises, permits, certificates, licenses, authorizations and the
     like and any other requirements of any government or any commission, board,
     court, agency, instrumentality or political subdivision thereof.

          "Guaranties" means, collectively the LLC Guaranty, the Midstream
     Guaranty and the Holdings Guaranty.

          "Guarantor" and "Guarantors" means, individually and collectively, as
     applicable, RMT LLC, WGPC, EMT and each of the Midstream Subsidiaries.

          "Hazardous Substance" shall have the meaning set forth in 42 U.S.C.
     ss. 9601(14) and shall also include each other substance considered to be a
     hazardous substance under any Environmental Protection Statute.

          "Hazardous Waste" shall have the meaning set forth in 42 U.S.C. ss.
     6903(5) and shall also include each other substance considered to be a
     hazardous waste under any Environmental Protection Statute (including,
     without limitation, 40 C.F.R. ss. 261.3).

          "Hedge Agreements" means interest rate swap, cap or collar agreements,
     interest rate future or option contracts, currency swap agreements,
     currency future or option contracts and other hedging obligations.

          "Holdings Guaranty" means that certain guaranty executed by RMT LLC in
     substantially the form of Exhibit K hereto as amended, supplemented or
     modified from time to time.

          "Hydrocarbons" (whether or not capitalized) means oil, gas, casinghead
     gas, condensate, distillate, and liquid hydrocarbons.

          "Insufficiency" means, with respect to any Plan, the amount, if any,
     by which the present value of the vested benefits under such Plan exceeds
     the fair market value of the assets of such Plan allocable to such
     benefits.

          "Interest Expense" means, for any period, the gross interest expense
     (determined in accordance with generally accepted accounting principles) of
     a Borrower and its Consolidated Subsidiaries accrued for such period,
     including that attributable to the capitalized amount of obligations owing
     under Capital Leases, all debt discount


                                       15
<PAGE>

     amortized in such period and all commissions, discounts and other fees and
     charges owed with respect to letters of credit and bankers' acceptance
     financing, net of interest income (determined in accordance with generally
     accepted accounting principles) of a Borrower and its Consolidated
     Subsidiaries, but excluding such interest expense, debt discount,
     commissions, discounts and other fees and charges and interest income to
     the extent attributable to the Non-Recourse Debt of Project Financing
     Subsidiaries; provided that, interest expense incurred in connection with
     the WCG Note Trust Bonds shall be excluded from this definition.

          "Interest Period" means, for each Eurodollar Rate Advance to a
     Borrower comprising part of the same A Borrowing, the period commencing on
     the date of such A Advance or the date of the Conversion of any Base Rate
     Advance into a Eurodollar Rate Advance and ending on the last day of the
     period selected by such Borrower pursuant to the provisions below and,
     thereafter, each subsequent period commencing on the last day of the
     immediately preceding Interest Period and ending on the last day of the
     period selected by such Borrower pursuant to the provisions below. The
     duration of each Interest Period shall be one, two, three or six months, in
     each case as such Borrower may, upon notice received by the Agent not later
     than 11:00 A.M. (New York City time) on the third Business Day prior to the
     first day of such Interest Period, select (it being agreed that selection
     of a subsequent Interest Period for an outstanding Eurodollar Rate Advance
     does not require that a Notice of A Borrowing be given, inasmuch as no
     Advance is being requested or made as a result of such selection);
     provided, however, that:

               (i) Interest Periods commencing on the same date for A Advances
          comprising part of the same A Borrowing shall be of the same duration;

               (ii) whenever the last day of any Interest Period would otherwise
          occur on a day other than a Business Day, the last day of such
          Interest Period shall be extended to occur on the next succeeding
          Business Day, provided that, if such extension would cause the last
          day of such Interest Period to occur in the next following calendar
          month, the last day of such Interest Period shall occur on the next
          preceding Business Day;

               (iii) any Interest Period which begins on the last Business Day
          of a calendar month (or on a day for which there is no numerically
          corresponding day in the calendar month at the end of such Interest
          Period) shall end on the last Business Day of the calendar month in
          which it would have ended if there were a numerically corresponding
          day in such calendar month; and

               (iv) no Borrower may select any Interest Period that ends after
          the Termination Date, and no Borrower may select any Interest Period
          if any Event of Default exists as to such Borrower.

          "Investment" in any Person means any loan or advance to such Person,
     any purchase or other acquisition of any Equity Interests or Debt or the
     assets comprising a division or business unit or a substantial part or all
     of the business of such Person, any


                                       16
<PAGE>

     capital contribution to such Person or any other direct or indirect
     investment in such Person, including, without limitation, any acquisition
     by way of a merger or consolidation and any arrangement pursuant to which
     the investor incurs Debt of the types referred to in clause (viii) or (ix)
     of the definition of "Debt" in respect of such Person.

          "Issuing Banks" means Citibank and Bank of America N.A. in their
     capacity as issuers of Letters of Credit.

          "L/C Agreement" means that certain Amended and Restated Credit
     Agreement dated as of October 31, 2002 among TWC as "Borrower," the
     "Agent," "Collateral Agent," "Syndication Agent," "Issuing Banks," the
     "Arranger," and those certain financial institutions party thereto as
     "Banks" (as the same may from time to time be further amended,
     supplemented, restated or otherwise modified.

          "L/C Collateral Documents" means the "Security Documents" as defined
     in the L/C Agreement.

          "L/C Facility" means the letter of credit facility under the L/C
     Agreement.

          "Legacy L/Cs" means those outstanding letters of credit as of July 31,
     2002 as set forth on Schedule XII, to the extent such letters of credit
     have not been fully cash collateralized.

          "Letter of Credit Commitment" has the meaning specified in Section 1.1
     of the L/C Agreement.

          "Letter of Credit Documents" means, with respect to any Letter of
     Credit, collectively, any application therefor and any other agreements,
     instruments, guarantees or other documents (whether general in application
     or applicable only to such Letter of Credit) governing or providing for (a)
     the rights and obligations of the parties concerned or at risk with respect
     to such Letter of Credit or (b) any collateral security for any of such
     obligations, each as the same may be modified and supplemented and in
     effect from time to time.

          "Letters of Credit" has the meaning specified in Section 1.1 of the
     L/C Agreement.

          "Lien" means any mortgage, lien, pledge, charge, deed of trust,
     security interest, encumbrance or other analogous type of preferential
     arrangement to secure or provide for the payment of any Debt, trade
     payable, obligation or other liability of any Person, whether arising by
     contract, operation of law or otherwise (including, without limitation, the
     interest of a vendor or lessor under any conditional sale agreement,
     capital lease or other title retention agreement).

          "LLC Guaranty" means that certain guaranty executed by WGPC in
     substantially the form of Exhibit H hereto, as amended, supplemented or
     modified from time to time.


                                       17
<PAGE>

          "Major Subsidiary" means any Subsidiary of a Borrower with assets
     having a book value of $1,000,000,000 or more.

          "Majority Banks" means at any time Banks having more than 50% of the
     then aggregate unpaid principal amount of the A Advances outstanding to
     Banks, or, if no such principal amount is then outstanding, Banks having
     more than 50% of the principal amount of the Commitments or, if no such
     principal amount is then outstanding and all Commitments have terminated,
     Banks having more than 50% of the then aggregate unpaid principal amount of
     the B Advances outstanding to Banks (provided that, for purposes of this
     definition and Sections 2.17, 6.01 and 7.01, neither any Borrower nor any
     Subsidiary or Related Party of any Borrower, if a Bank, shall be included
     in (i) the Banks to which A Advances or B Advances are owed or (ii)
     determining the aggregate unpaid principal amount of the A Advances or the
     B Advances or the amount of the Commitments). For purposes hereof, Advances
     made by an SPC shall be considered Advances of its Designating Bank.

          "Mapco Office Building" means the real property, improvements and
     related office equipment located at 1801 South Baltimore Avenue, Tulsa,
     Oklahoma.

          "MAPL" means Mid-America Pipeline Company, LLC, a Delaware limited
     liability company.

          "MAPL Asset Disposition" means the sale, transfer or other
     distribution of the Equity Interests in or Assets of MAPL and Mapletree,
     LLC.

          "Material Subsidiary" means (i) each Major Subsidiary and each other
     Subsidiary of a Borrower (other than a Project Financing Subsidiary) that
     itself (on an unconsolidated, stand alone basis) owns in excess of 5% of
     the book value of the Consolidated assets of a Borrower and its
     Consolidated Subsidiaries, (ii) each of TGPL, TGT and NWP and (iii) each
     Subsidiary that owns any direct or indirect interest in TGPL, TGT and NWP.

          "Midstream Asset MLP" means one or more master limited partnerships
     included in the Consolidated financial statements of TWC to which TWC has
     transferred or shall transfer certain assets relating to the Midstream
     Business as well as certain marine and inland terminals and related
     pipeline systems, including MLP.

          "Midstream Assets" means all assets now owned or hereafter acquired by
     TWC or any of its Subsidiaries, which are either individually, or in
     conjunction with other Midstream Assets, necessary for the conduct of the
     Midstream Business by TWC and its Subsidiaries, including the Refineries in
     Alaska and Tennessee, except that "Midstream Assets" shall not include (a)
     the assets being part of either of the MAPL Asset Disposition or Seminole
     Asset Disposition, unless the MAPL Disposition or Seminole Asset
     Disposition, as applicable, shall not have occurred on or prior to the date
     that is 60 days from July 31, 2002 and (b) any Assets of NewGP, or its
     Subsidiaries.


                                       18
<PAGE>

          "Midstream Business" means the gathering, marketing, dehydrating,
     treating, processing, fractionating, refining, storing, selling and
     transporting of Hydrocarbons and Refined Hydrocarbons in the United States,
     and any business relating thereto; provided that "Midstream Business" shall
     not include (i) operations that are directly related to the exploration and
     production of Hydrocarbons, (ii) the interstate transportation and storage
     of natural gas and associated liquid hydrocarbons under the jurisdiction of
     the Natural Gas Act, and (iii) the transportation and storage of natural
     gas and associated liquid hydrocarbons through the Cardinal Pipeline
     System.

          "Midstream Guaranty" means that certain guaranty executed by those
     certain guarantors in substantially the form of Exhibit I hereto, as
     amended, supplemented or modified from time to time.

          "Midstream Subsidiaries" means each Subsidiary of TWC (excluding
     Williams Mobile Bay Producer Services, L.L.C., NewGP, and each of their
     Subsidiaries, if any) engaged either in whole or in part in the Midstream
     Business that either (1) owns, leases or has possession of Midstream Assets
     that have an aggregate fair market value of $1,000,000 or more, or (2)
     owns, leases or has possession of any Midstream Asset or right that is
     material to the ownership, leasing or operation of the Midstream Assets
     taken as a whole.

          "MLP" means Williams Energy Partners L.P., a Delaware limited
     partnership.

          "Moody's" means Moody's Investors Service, Inc or its successor.

          "Multiemployer Plan" means a "multiemployer plan" as defined in
     Section 4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate of
     any Borrower is making or accruing an obligation to make contributions, or
     has within any of the preceding five plan years made or accrued an
     obligation to make contributions.

          "Multiple Employer Plan" means an employee benefit plan as defined in
     Section 3(2) of ERISA, other than a Multiemployer Plan, subject to Title IV
     of ERISA to which any Borrower or any ERISA Affiliate of any Borrower, and
     one or more employers other than any Borrower or an ERISA Affiliate of any
     Borrower, is making or accruing an obligation to make contributions or, in
     the event that any such plan has been terminated, to which any Borrower or
     any ERISA Affiliate of any Borrower made or accrued an obligation to make
     contributions during any of the five plan years preceding the date of
     termination of such plan.

          "Natural Gas Act" shall mean the Natural Gas Act, 15 U.S.C.ss.717(a)
     -717(w).

          "Nebraska Energy" means Nebraska Energy, L.L.C., a Kansas limited
     liability company.

          "Net Cash Proceeds" means, with respect to any sale, transfer or other
     disposition of any asset or the sale or issuance of any equity interests
     (including, without limitation, any capital contribution) by any Person,
     the gross cash proceeds received (including any


                                       19
<PAGE>

     cash received by way of deferred payment pursuant to a promissory note,
     receivable or otherwise, but only as and when such cash is received) by or
     on behalf of such Person in connection with such transaction net of only
     (a) reasonable transaction costs, including customary and reasonable
     brokerage commissions, underwriting fees and discounts, legal fees, fees
     paid to accountants and financial advisors, finder's fees and other similar
     fees and commissions, (b) the amount of taxes payable in connection with or
     as a result of such transaction, (c) the amount of any Debt by the terms of
     the agreement or instrument governing such Debt (including, without
     limitation, the Barrett Loan Agreement and the WECI Note), that is required
     to be repaid or cash collateralized in the case of letters of credit, upon
     such disposition, including any premium, make-whole or breakage amount
     related thereto, (d) payments of unassumed liabilities relating to the
     assets sold at the time of, or within 60 days after, the date of such sale;
     provided that such gross proceeds shall not include any portion of such
     gross cash proceeds which a Borrower determines in good faith should be
     reserved for post-closing adjustments (including indemnification payments,
     tax expenses and purchase price adjustments, to the extent the Person
     delivers to the Agent a certificate signed by an officer of such Person as
     to such determination), it being understood and agreed that on the day that
     all such post-closing adjustments have been determined (which shall not be
     later than 120 days following the date of the respective disposition; and
     provided further that such 120-day period shall be extended to the extent
     any amount of such proceeds is subject to a good faith dispute or claim),
     the amount (if any) by which the reserved amount in respect of such sale or
     disposition exceeds the actual post-closing adjustments payable by such
     Person shall constitute Net Cash Proceeds on such date received by such
     Person from such sale, lease, transfer or other disposition.

          "Net Debt" means for any Borrower, as of any date of determination,
     the excess of (x) the aggregate amount of all Debt of such Borrower and its
     Subsidiaries on a Consolidated basis, excluding Non-Recourse Debt, over (y)
     the sum of the Cash Holdings of such Borrower and its Subsidiaries on a
     Consolidated basis.

          "Net Worth" of any Person means, as of any date of determination, the
     excess of total assets of such Person plus all non-cash losses resulting
     from the write-down or disposition of the Trading Book over total
     liabilities of such Person, total assets and total liabilities each to be
     determined in accordance with generally accepted accounting principles;
     provided, however, that for purposes of calculating Net Worth, total
     liabilities shall not include any obligations of the Borrower in respect of
     the FELINE PACS.

          "NewGP" means a Business Entity organized under Delaware law, which
     may be formed before, on or after the date hereof, and which (i) will be at
     the time of formation a Wholly-Owned Subsidiary of TWC, and (ii) will be
     formed for the sole purpose of acquiring certain Equity Interests in MLP
     currently held by Williams GP, LLC and acting as the general partner of
     MLP.

          "Non-Borrowing Subsidiary" of any Borrower means a Subsidiary of such
     Borrower which Subsidiary is not itself a Borrower. In the case of TWC, the
     term "Subsidiary" does not include any WCG Subsidiary.


                                       20
<PAGE>

          "Non-Recourse Debt" means (i) any Debt incurred by any Project
     Financing Subsidiary to finance the acquisition (other than the acquisition
     from a Borrower or any Subsidiary of such Borrower that is not a Project
     Financing Subsidiary), improvement, installation, design, engineering,
     construction, development, completion, maintenance or operation of, or
     otherwise to pay costs and expenses relating to or providing financing for,
     a project listed on Schedule IV or any new project commenced or acquired
     after July 31, 2002, which Debt does not provide for recourse against a
     Borrower or any Subsidiary of such Borrower (other than a Project Financing
     Subsidiary and such recourse as exists under a Performance Guaranty) or any
     property or asset of a Borrower or any Subsidiary of such Borrower (other
     than the Equity Interests in, or the property or assets of, a Project
     Financing Subsidiary) and (ii) any refinancing of such Debt that does not
     increase the outstanding principal amount thereof at the time of the
     refinancing or increase the property subject to any Lien securing such Debt
     or otherwise add additional security or support for such Debt.

          "Note" means an A Note or a B Note.

          "Notice of A Borrowing" has the meaning specified in Section 2.02(a).

          "Notice of B Borrowing" has the meaning specified in Section 2.16(a).

          "NWP" means Northwest Pipeline Corporation, a Delaware corporation.

          "PBGC" means the Pension Benefit Guaranty Corporation.

          "Performance Guaranty" means any guaranty issued in connection with
     any Non-Recourse Debt that (i) if secured, is secured only by assets of, or
     Equity Interests in, a Project Financing Subsidiary, and (ii) guarantees to
     the provider of such Non-Recourse Debt or any other Person of the (a)
     performance of the improvement, installation, design, engineering,
     construction, acquisition, development, completion, maintenance or
     operation of, or otherwise affects any such act in respect of, all or any
     portion of the project that is financed by such Non-Recourse Debt, (b)
     completion of the minimum agreed equity contributions to the relevant
     Project Finance Subsidiary, or (c) performance by a Project Financing
     Subsidiary of obligations to Persons other than the provider of such
     Non-Recourse Debt.

          "Permitted Dispositions" means (a) the disposition of the assets or
     Persons set forth on Schedule VII or the assets currently owned by such
     Persons and (b) the TWC Asset Dispositions.

          "Permitted Liens" means Liens specifically described on Schedule VI.

          "Permitted Refinancing Debt" has the meaning assigned thereto on
     Schedule VI.

          "Person" means an individual, partnership, corporation, limited
     liability company, business trust, joint stock company, trust,
     unincorporated association, joint venture or other Business Entity, or a
     government or any political subdivision or agency thereof.


                                       21
<PAGE>

          "PIGAP II" means WilPro Energy Services (PIGAP II) Limited, a Cayman
     Islands corporation.

          "Plan" means an employee pension benefit plan (other than a
     Multiemployer Plan) as defined in Section 3(2) of ERISA currently
     maintained by, or, in the event such plan has terminated, to which
     contributions have been made, or an obligation to make contributions has
     accrued, during any of the five plan years preceding the date of
     termination of such plan by, any Borrower or any ERISA Affiliate of any
     Borrower for employees of a Borrower or any such ERISA Affiliate and
     covered by Title IV of ERISA or subject to the minimum funding standards
     under Section 412 of the Code.

          "Pledge Agreement" means a Pledge Agreement executed by TWC and
     certain Guarantors in substantially the form of Exhibit J.

          "Plowshare Transaction" means the retirement of the Interests of the
     Class B Preferred Member in PPH (each as defined in the PPH Sponsor
     Agreement) held by Plowshare Investors LLC, a Delaware limited liability
     company, by PPH.

          "PPH Company Agreement" means the Amended and Restated Limited
     Liability Company Agreement of Piceance Production Holdings LLC, dated as
     of December 31, 2001, by and among Williams Production RMT Company, a
     Delaware corporation, Bison Royalty LLC, a Delaware limited liability
     company, Plowshare Investors LLC, a Delaware limited liability company, and
     Piceance Production Holdings LLC, a Delaware limited liability company.

          "PPH Sponsor Agreement" means the PPH Sponsor Agreement, dated as of
     December 31, 2001, by TWC in favor of Piceance Production Holdings LLC,
     Plowshare Investors LLC and the other indemnified parties named therein (as
     the same may from time to time be amended, modified or supplemented).

          "Prairie Wolf Facility" means the financing provided in connection
     with that certain $611,788,868 Joint Venture Sponsor Agreement dated as of
     December 28, 2000 (as amended, supplemented, amended and restated or
     otherwise modified from time to time, the "Sponsor Agreement"), among TWC,
     as Sponsor, and Williams Field Services Company, in favor of Prairie Wolf
     Investors, Arctic Fox Assets, L.L.C., Williams Energy (Canada), Inc. and
     the other Indemnified Persons (as defined in the Sponsor Agreement) listed
     therein.

          "Prairie Wolf Purchase Option Agreement" means the Purchase Option
     Agreement, dated as of December 28, 2000, among TWC, Prairie Wolf
     Investors, L.L.C., Citicorp North America, Inc., Ambac Private Holdings,
     L.L.C., Westboro Properties L.L.C., Stonehurst Capital L.L.C., BSCS XXXIX,
     Inc., Snow Goose Associates, L.L.C. and Arctic Fox Assets, L.L.C.

          "Prairie Wolf Transaction" means the purchase of the Investor
     Membership Interest (as defined in the Prairie Wolf Purchase Option
     Agreement) pursuant to the Prairie Wolf Purchase Option Agreement.


                                       22
<PAGE>

          "Progeny Facilities" means the financing facilities specifically
     described on Schedule XII attached hereto.

          "Project Financing Subsidiaries" means any non-material Subsidiary of
     any Borrower whose principal purpose is to incur Non-Recourse Debt and/or
     construct, lease, own or operate the assets financed thereby, or to become
     a direct or indirect partner, member or other equity participant or owner
     in a Business Entity so created, and substantially all the assets of which
     Subsidiary or Business Entity are limited to (x) those assets being
     financed (or to be financed), or the operation of which is being financed
     (or to be financed), in whole or in part by Non-Recourse Debt, or (y)
     Equity Interests in, or Debt or other obligations of, one or more other
     such Subsidiaries or Business Entities, or (z) Debt or other obligations of
     any Borrower or its Subsidiaries or other Persons. For purposes of this
     definition, a "non-material Subsidiary" shall mean any Consolidated
     Subsidiary of any Borrower that is not the Borrower which, as of the date
     of the most recent Consolidated balance sheet of the Borrower delivered
     pursuant to Section 4.01(e) or 5.01, has total assets which account for
     less than five percent (5%) of the total Consolidated assets of such
     Borrower and its Consolidated Subsidiaries, as shown on such Consolidated
     balance sheet; provided that the aggregate assets of the non-material
     Subsidiaries shall not comprise more than ten percent (10%) of the total
     Consolidated assets of such Borrower and its Consolidated Subsidiaries, as
     shown on such Consolidated balance sheet.

          "Property" has the meaning set forth in the definition of "Assets".

          "Public Filings" means the Borrowers' (i) annual report on Form 10-K
     (in the case of TWC, its Form 10K/A) for the year ended December 31, 2001,
     (ii) quarterly report on Form 10-Q for the quarter ended March 31, 2002,
     (iii) quarterly report on Form 10-Q for the quarter ended June 30, 2002 and
     (iv) each other quarterly and annual and other reports filed from time to
     time.

          "Purchase Card Agreement" means that certain Purchase Card Agreement
     among TWC and CUSA dated January 29, 2002.

          "Rating Category" means, as to any Borrower, the relevant category
     applicable to such Borrower from time to time as set forth on Schedule XI,
     which is based on the ratings (or lack thereof) of such Borrower's senior
     unsecured long-term debt by S&P or Moody's. In the event there is a split
     between the ratings of any Borrower's senior unsecured long-term debt by
     S&P and Moody's, "Rating Category" shall be determined based on the lowest
     rating of such Borrower's senior unsecured long-term debt by S&P or
     Moody's.

          "Refined Hydrocarbons" means all products refined, separated,
     fractionated, settled, and dehydrated from Hydrocarbons and all products
     derived therefrom, including, without limitation, kerosene, liquefied
     petroleum gas, refined lubricating oils, diesel fuels, drip gasoline,
     natural gasoline, helium, sulfur and all other minerals.


                                       23
<PAGE>

          "Refineries" means the equity interest in, and assets owned by, the
     Midstream Business of TWC which produces Refined Hydrocarbons and is owned
     collectively by the following subsidiaries: Williams Express, Inc., a
     Delaware corporation, Williams Alaska Pipeline Company, LLC, a Delaware
     limited liability company, Williams Alaska Petroleum, Inc., an Alaska
     corporation, Williams Alaska Air Cargo Properties, LLC, an Alaska limited
     liability company, Williams Lynxs Alaska CargoPort, LLC, an Alaska limited
     liability company, Williams Express, Inc., an Alaska corporation, Williams
     Petroleum Pipeline Systems, Inc., a Delaware corporation, Williams Refining
     & Marketing, LLC, a Delaware limited liability company, Williams Olefins,
     LLC, a Delaware limited liability company, Williams Olefins Feedstock
     Pipelines, LLC, a Delaware limited liability company, Williams Memphis
     Terminal, Inc., a Delaware corporation, Williams Generating Memphis, LLC, a
     Delaware limited liability company, EMT (only with respect to its interest
     in a gas turbine, electric generating facility in Memphis, Tennessee), and
     Memphis Generation, L.L.C., a Delaware limited liability company.

          "Related Party" of any Person means any corporation, partnership,
     joint venture or other entity of which more than 10% of the outstanding
     capital stock or other equity interests having ordinary voting power to
     elect a majority of the board of directors of such corporation,
     partnership, joint venture or other entity or others performing similar
     functions (irrespective of whether or not at the time capital stock or
     other equity interests of any other class or classes of such corporation,
     partnership, joint venture or other entity shall or might have voting power
     upon the occurrence of any contingency) is at the time directly or
     indirectly owned by such Person or which owns at the time directly or
     indirectly more than 10% of the outstanding capital stock or other equity
     interests having ordinary voting power to elect a majority of the board of
     directors of such Person or others performing similar functions
     (irrespective of whether or not at the time capital stock or other equity
     interests of any other class or classes of such corporation, partnership,
     joint venture or other entity shall or might have voting power upon the
     occurrence of any contingency); provided, however, that (i) neither TWC nor
     any Subsidiary of TWC shall be considered to be a Related Party of TWC or
     any Subsidiary of TWC and (ii) neither NewGP nor any Subsidiary of NewGP
     shall be considered to be a "Related Party" of NewGP or any Subsidiary of
     NewGP.

          "Restricted Midstream Subsidiaries" means Williams Mobile Bay Producer
     Services, L.L.C.; and Williams Field Services-Gulf Coast Company, L.P.,
     Williams Oil Gathering L.L.C., Gulf Liquids Holdings, L.L.C. and Gulf
     Liquids New River Project, LLC.

          "RMT" means Williams Production RMT Company.

          "RMT Asset Disposition" means the sale, transfer, lease, distribution
     or other disposition of the RMT Equity Interests or the assets of RMT LLC,
     RMT or its Subsidiaries in accordance with the provisions of the Barrett
     Loan Agreement.


                                       24
<PAGE>

          "RMT Equity Interests" means the Equity Interests in RMT and/or each
     of its Subsidiaries.

          "RMT LLC" means Williams Production Holdings LLC.

          "S&P" means Standard & Poor's Ratings Group, a division of The
     McGraw-Hill Companies, Inc.

          "Sale Agreement" has the meaning specified in Section 5.01(e).

          "Sale and Lease-Back Transaction" of any Person means any arrangement
     entered into by such Person or any Subsidiary of such Person, directly or
     indirectly, whereby such Person or any Subsidiary of such Person shall sell
     or transfer any property, whether now owned or hereafter acquired to any
     other person (a "Transferee"), and whereby such Person or any Subsidiary of
     such Person shall then or thereafter rent or lease as lessee such property
     or any part thereof or rent or lease as lessee from such Transferee or any
     other Person other property which such Person or any Subsidiary of such
     Person intends to use for substantially the same purpose or purposes as the
     property sold or transferred.

          "Security Agreement" means a Security Agreement executed by the TWC
     and those certain guarantors party thereto in substantially the form of
     Exhibit G hereto.

          "Seminole" means Seminole Pipeline Company, a Delaware corporation.

          "Seminole Asset Disposition" means the sale, transfer or other
     distribution of all or substantially all of the Equity Interests in or
     assets of Seminole and E-Oaktree, LLC.

          "Soda Ash" means Williams Soda Products Company and American Soda,
     L.L.P.

          "Solvent" and "Solvency" mean, with respect to any Person on a
     particular date, that on such date (a) the fair value of the property of
     such Person is greater than the total amount of liabilities, including,
     without limitation, contingent liabilities, of such Person, (b) the present
     fair salable value of the assets of such Person is not less than the amount
     that will be required to pay the probable liability of such Person on its
     debts as they become absolute and matured, (c) such Person does not intend
     to, and does not believe that it will, incur debts or liabilities beyond
     such person's ability to pay such debts and liabilities as they mature and
     (d) such Person is not engaged in business or a transaction, and is not
     about to engage in business or a transaction, for which such Person's
     property would constitute an unreasonably small capital. The amount of
     contingent liabilities at any time shall be computed as the amount that, in
     the light of all the facts and circumstances existing at such time,
     represents the amount that can reasonably be expected to become an actual
     or matured liability.

          "SPC" has the meaning specified in Section 8.06(d).

          "Specified Escrow Arrangements" means (a) encumbrances arising under
     the Pledge and Assignment Agreement for the Purchase Card Agreement, dated
     as of January


                                       25
<PAGE>

     29, 2002, as amended, supplemented, amended and restated or otherwise
     modified from time to time, whereby TWC has requested the continued
     issuance of credit under the Purchase Card Agreement; and (b) cash deposits
     at one or more financial institutions for the purpose of funding any
     potential shortfall in the daily net cash position of TWC or any of its
     Subsidiaries.

          "SPV" is used as defined in the definition of "WCG Structured
     Financing."

          "Stated Termination Date" means July 25, 2005, or such later date, if
     any, as may be agreed to by the Borrowers and the Banks pursuant to Section
     2.18.

          "Subject Subsidiaries" means all Subsidiaries of the Borrowers other
     than NewGP and its Subsidiaries.

          "Subordinated Debt" means any Debt of any Borrower which is
     effectively subordinated to the obligations of such Borrower hereunder and
     under the Notes, if any.

          "Subsidiary" of any Person means (i) any corporation, partnership,
     joint venture or other entity of which more than 50% of the outstanding
     Equity Interests having ordinary voting power to elect a majority of the
     board of directors of such corporation, partnership, joint venture or other
     entity or others performing similar functions (irrespective of whether or
     not at the time Equity Interests of any other class or classes of such
     corporation, partnership, joint venture or other entity shall or might have
     voting power upon the occurrence of any contingency) is at the time
     directly or indirectly owned by such Person and (ii) any Person that is
     under the direct or indirect control of such Person, by voting rights,
     contract or otherwise, and in accordance with generally accepted accounting
     principles, is Consolidated with a Borrower in its Consolidated financial
     statements; provided that, for greater certainty, (x) MLP and its
     Subsidiaries (A) shall be considered Subsidiaries of NewGP, but (B) shall
     not otherwise be considered Subsidiaries or Guarantors of the Borrowers or
     their respective Subsidiaries and (y) NewGP shall be considered a
     Subsidiary of TWC.

          "Surety Administrative Agent" means Citibank, N.A., in its capacity as
     surety administrative agent under the terms of the Midstream Guaranty and
     its successors or assigns appointed pursuant to Section 7(e) of the
     Midstream Guaranty.

          "Synthetic Lease" means any lease (including leases that may be
     terminated by the lessee at any time) of any property (whether real,
     personal or mixed) (i) that is not a capital lease in accordance with
     generally accepted accounting principles and (ii) in respect of which the
     lessee retains or obtains ownership of the property so leased for federal
     income tax purposes, other than any such lease under which such Person is
     the lessor.

          "Tangible Net Worth" of any Person means, as of any date of
     determination, the excess of total assets of such Person over total
     liabilities of such Person, total assets and total liabilities each to be
     determined in accordance with generally accepted accounting principles,
     excluding, however, from the determination of total assets (i) patents,
     patent


                                       26
<PAGE>

     applications, trademarks, copyrights and trade names, (ii) goodwill,
     organizational, experimental, research and development expense and other
     like intangibles, (iii) treasury stock, (iv) monies set apart and held in a
     sinking or other analogous fund established for the purchase, redemption or
     other retirement of capital stock or Subordinated Debt, and (v) unamortized
     debt discount and expense.

          "Termination Date" means the earlier of (i) the Stated Termination
     Date or (ii) the date of termination in whole of the Commitments pursuant
     to Section 2.04, 2.17 or 6.01.

          "Termination Event" means (i) a "reportable event," as such term is
     described in Section 4043(c) of ERISA (other than a "reportable event" not
     subject to the provision for 30-day notice to the PBGC or a "reportable
     event" as such term is described in Section 4043(c)(3) of ERISA) which
     might reasonably be expected to result in a termination of, or the
     appointment of a trustee to administer, a Plan, or which causes a Borrower,
     due to actions of the PBGC, to be required to contribute at least
     $75,000,000 in excess of the contributions which otherwise would have been
     made to fund a Plan based upon the contributions recommended by such Plan's
     actuary), or (ii) the withdrawal of any Borrower or any ERISA Affiliate of
     any Borrower from a Multiple Employer Plan during a plan year in which it
     was a "substantial employer," as such term is defined in Section 4001(a)(2)
     of ERISA, or the incurrence of liability by any Borrower or any ERISA
     Affiliate of any Borrower under Section 4064 of ERISA upon the termination
     of a Plan or Multiple Employer Plan, or (iii) the distribution of a notice
     of intent to terminate a Plan pursuant to Section 4041(a)(2) of ERISA or
     the treatment of a Plan amendment as a termination under Section 4041 of
     ERISA, or (iv) the institution of proceedings to terminate a Plan by the
     PBGC under Section 4042 of ERISA, or (v) any other event or condition which
     might reasonably be expected to result in the termination of, or the
     appointment of a trustee to administer, any Plan under Section 4042 of
     ERISA.

          "TGPL" means Transcontinental Gas Pipe Line Corporation, a Delaware
     corporation.

          "TGPL Bond Offering" means that certain $325,000,000, 8.875% Senior
     Notes due 2012 issued on July 3, 2002 by TGPL.

          "TGT" means Texas Gas Transmission Corporation, a Delaware
     corporation.

          "Trading Book" means all mark to market daily and forward traded
     transactions inclusive of structured portfolio transactions consisting
     primarily of tolling and full requirements transactions.

          "Transfer Agreement" has the meaning specified in Section 8.06.

          "TravelCenters" means Williams TravelCenters, Inc.

          "TWC" means The Williams Companies, Inc., a Delaware corporation.


                                       27
<PAGE>

          "TWC Asset Dispositions" means the sale by TWC or by any of its
     Subsidiaries of (a) WPC, (b) MAPL Asset Disposition, (c) Seminole Asset
     Disposition, (d) the Refineries, (e) Soda Ash, (f) TravelCenters, and (g)
     Bio-Energy.

          "TWC Asset Disposition Documents" means all material agreements
     relating to the TWC Asset Dispositions.

          "TWC Preferred Stock" means the shares of preferred stock of TWC which
     may be perpetual preferred stock or mandatorily convertible into shares of
     common stock of TWC.

          "Type" has the meaning set forth in the definition herein of A
     Advance.

          "UBOC Turbine Financing" means the transactions contemplated by (i)
     the Turbine Financing and Agency Agreement, dated as of April 16, 2002,
     between Union Bank of California, N.A., each of the other financial
     institutions party thereto as a Lender or Certificate Holder, WEMT
     Statutory Trust 2002 and EMT (the "TFA AGREEMENT") and (ii) the Operative
     Documents and the Lease (as such terms are defined in the TFA Agreement).

          "Unrated" means, as to any Borrower, that no senior unsecured
     long-term debt of such Borrower is rated by S&P and no senior unsecured
     long-term debt of such Borrower is rated by Moody's.

          "WCG" means Williams Communications Group, Inc., a Delaware
     corporation.

          "WCG Note" means that certain promissory note dated March 28, 2001
     issued by WCG to WCG Note Trust, a Delaware business trust, in a principal
     amount of $1,500,000,000 with a maturity date of March 31, 2008.

          "WCG Note Trust Bonds" means those certain debt securities issued by
     WCG Note Trust and WCG Note Corp. on March 28, 2001.

          "WCG Refinancing Transaction" means any transaction or series of
     related transactions pursuant to which TWC or any Subsidiary of TWC becomes
     directly and primarily liable to the holders of the WCG Senior Notes for an
     aggregate amount not exceeding the outstanding principal amount of the WCG
     Senior Notes, together with all accrued and unpaid interest thereon, any
     fees, and any premiums or make-whole payments payable as a result of a
     prepayment or early redemption of the WCG Senior Notes, including, without
     limitation, by means of (i) any amendment to the transaction documents
     pursuant to which the WCG Senior Notes were issued, (ii) an exchange offer
     or tender offer for the WCG Senior Notes or the WCG Note in consideration
     for which TWC or any Subsidiary of TWC issues debt securities of TWC or any
     Subsidiary of TWC, (iii) any redemption or repurchase, in whole or in part,
     of the WCG Senior Notes by TWC or any Subsidiary of TWC, (iv) any exercise
     of the "Share Trust Release Option" as defined in the transaction documents
     pursuant to which the WCG Senior


                                       28
<PAGE>

     Notes were issued or (v) TWC or any Subsidiary of TWC making any payments
     in respect of the WCG Senior Notes or the WCG Note.

          "WCG Reimbursement Obligations" means any obligations of any WCG
     Subsidiary in favor of TWC, any Subsidiary of TWC or the WCG Senior Notes
     Issuer pursuant to which such WCG Subsidiary has agreed to pay TWC, any
     Subsidiary of TWC or the WCG Senior Notes Issuer an amount equal to or less
     than the total amount of the obligations incurred by TWC and/or its
     Subsidiaries in connection with the WCG Refinancing Transaction, including,
     without limitation, in respect of principal, interest, fees and any
     premiums or make-whole payments payable as a result of a prepayment or
     early redemption of the WCG Senior Notes.

          "WCG Senior Notes" means those certain 8.25% Senior Secured Notes due
     2004 in an aggregate principal amount of $1,400,000,000 issued by the WCG
     Senior Notes Issuer.

          "WCG Senior Notes Issuer" means, collectively, WCG Note Trust, a
     Delaware business trust, and WCG Note Corp., Inc., a Delaware corporation.

          "WCG Structured Financing" means a certain series of related
     transactions in anticipation of the spin-off of WCG pursuant to which WCG
     or a WCG Subsidiary shall obtain loans or equity contributions, either
     directly from investors in the marketplace or through one or more special
     purpose vehicles (each, an "SPV"), which SPV or SPVs may be Subsidiaries of
     TWC. Principal of such loans and such equity contributions shall be in a
     cumulative amount after January 31, 2001 which does not exceed in the
     aggregate $1,500,000,000. TWC shall have a contingent obligation with
     respect to repayment of indebtedness or return on and of equity of the SPV
     (or SPVs) or WCG or a WCG Subsidiary in regard to such transaction, which
     contingent obligation shall terminate in each case no later than four (4)
     years after the effective date of such transaction and shall be satisfied
     only through the issuance of equity securities unless further sales of
     equity securities of TWC are not possible or will not result in additional
     proceeds.

          "WCG Synthetic Lease" means that certain Amended and Restated Lease
     between State Street Bank and Trust Company of Connecticut, National
     Association, as Lessor and Williams Communications, Inc., as Lessee, dated
     as of September 2, 1998, as amended, which has been terminated and was
     fully repaid on March 29, 2002.

          "WCGS Subsidiaries" means, collectively, WCG and any direct or
     indirect Subsidiary of WCG.

          "WCG Unwind Transaction" means a transaction in which (i) TWC's and/or
     its Subsidiaries' Sale Leaseback transactions dated as of September 13,
     2001, with (x) WCG and its Subsidiary, Williams Technology Center, LLC
     ("WTC"), involving the Williams Technology Center, and (y) WCG and its
     Subsidiary, Williams Communications, LLC, involving corporate aircraft
     (collectively, the "WCG Sale Leaseback") are terminated, (ii) in exchange
     for such termination, TWC receives a promissory note or notes payable by
     the reorganized WCG, WTC and/or the other WCG Subsidiaries, individually or
     as co-


                                       29
<PAGE>

     makers, in an aggregate principal amount of $175,000,000 or less, and (iii)
     consideration from TWC and its Subsidiaries includes termination of the
     existing WCG Sale Leaseback and transfer of the Equity Interests in
     Williams Aircraft Leasing, LLC, but does not include any cash payment by
     TWC or any of its Subsidiaries to WCG or WTC.

          "WECI Note" means that certain promissory note, dated as of December
     28, 2000, issued by Williams Energy (Canada), Inc. in favor of the
     Registered Holders (as defined therein), as amended by Prairie Wolf
     Investors, L.L.C. Amendment No. 1, dated as of August 29, 2001, by
     Amendment No. 2 to Certain Prairie Wolf Operative Documents, dated as of
     March 28, 2002, and by Amendment No. 3 to Certain Operative Documents and
     Consents, dated as of October 31, 2002.

          "WGPC" means Williams Gas Pipeline Company, LLC, a Delaware limited
     liability company.

          "Wholly-Owned Subsidiary" of any Person means any Subsidiary of such
     Person all of the capital stock and other equity interests of which is
     owned by such Person or any Wholly-Owned Subsidiary of such Person.

          "Withdrawal Liability" shall have the meaning given such term under
     Part I of Subtitle E of Title IV of ERISA.

          "WPC" means Williams Gas Pipeline Central, Inc., a Delaware
     corporation.

          "WPXE" means WPX Enterprises, Inc., a Delaware corporation.

          Section 1.02. Computation of Time Periods. In this Agreement in the
     computation of periods of time from a specified date to a later specified
     date, the word "from" means "from and including" and the words "to" and
     "until" each means "to but excluding."

          Section 1.03. Accounting Terms. All accounting terms not specifically
     defined shall be construed in accordance with general accounting
     principles, and each reference herein to "generally accepted accounting
     principles" shall mean generally accepted accounting principles in effect,
     consistently applied.

          Section 1.04. Miscellaneous. The words "hereof," "herein" and
     "hereunder" and words of similar import when used in this Agreement shall
     refer to this Agreement as a whole and not to any particular provision of
     this Agreement, and Article, Section, Schedule and Exhibit references are
     to Articles and Sections of and Schedules and Exhibits to this Agreement,
     unless otherwise specified. The term "including" shall mean "including,
     without limitation,". References to any document, instrument or agreement
     (a) shall include all exhibits, schedules and other attachments thereto,
     (b) shall include all documents, instruments or agreements issued or
     executed in replacement thereof and (c) shall mean such document,
     instrument or agreement, or replacement or predecessor thereto, as amended,
     modified and supplemented from time to time and in effect at any given
     time, so long as such amended, modified or supplemented document,
     instrument or agreement does not violate the terms of this Agreement.


                                       30
<PAGE>

     Section 1.05. Ratings. A rating, whether public or private, by S&P or
Moody's shall be deemed to be in effect on the date of announcement or
publication by S&P or Moody's, as the case may be, of such rating or, in the
absence of such announcement or publication, on the effective date of such
rating and will remain in effect until the announcement or publication of, or in
the absence of such announcement or publication, the effective date of, any
change in, or withdrawal or termination of, such rating. In the event the
standards for any rating by Moody's or S&P are revised, or any such rating is
designated differently (such as by changing letter designations to different
letter designations or to numerical designations), the references herein to such
rating shall be deemed to refer to the revised or redesignated rating for which
the standards are closest to, but not lower than, the standards at the date
hereof for the rating which has been revised or redesignated, all as determined
by the Majority Banks in good faith. Long-term debt supported by a letter of
credit, guaranty, insurance or other similar credit enhancement mechanism shall
not be considered as senior unsecured long-term debt. If either Moody's or S&P
has at any time more than one rating applicable to senior unsecured long-term
debt of a Borrower, the lowest such rating shall be applicable for purposes
hereof. For example, if Moody's rates some senior unsecured long-term debt of a
Borrower Ba1 and other such debt of such Borrower Ba2, the senior unsecured
long-term debt of such Borrower shall be deemed to be rated Ba2 by Moody's.

                                   Article II

                        AMOUNTS AND TERMS OF THE ADVANCES

     Section 2.01. The A Advances. Each Bank severally agrees, on the terms and
conditions hereinafter set forth, to make A Advances to each Borrower from time
to time on any Business Day during the period from July 31, 2002 until the
Termination Date in an aggregate amount outstanding not to exceed at any time
such Bank's Commitment to such Borrower, provided that the aggregate amount of
the Commitments of the Banks to any Borrower shall, except for purposes of
Section 2.03(a), be deemed used from time to time to the extent of the aggregate
amount of the B Advances then outstanding to such Borrower and such deemed use
of the aggregate amount of such Commitments shall be applied to the Banks
ratably according to their respective Commitments to such Borrower (such deemed
use of the aggregate amount of the Commitments of any Borrower being a "B
Reduction"), and provided further that the aggregate amount of all A Advances to
all Borrowers by any Bank shall not exceed at any time outstanding such Bank's
Commitment to TWC (determined after giving effect to such Bank's ratable share
of all B Reductions). Each A Borrowing shall be in an aggregate amount not less
than $5,000,000 or an integral multiple of $1,000,000 in excess thereof, and
shall consist of A Advances of the same Type made to the same Borrower on the
same day by the Banks ratably according to their respective Commitments. Within
the limits of each Bank's Commitment to a Borrower, such Borrower may borrow,
prepay pursuant to Section 2.10 and reborrow under this Section 2.01.

     Section 2.02. Making the A Advances.

          (a) Each A Borrowing shall be made on notice, given not later than (1)
     in the case of a proposed Borrowing comprised of Eurodollar Rate Advances,
     11:00 A.M. (New


                                       31
<PAGE>

     York City time) at least three Business Days prior to the date of the
     proposed Borrowing, and (2) in the case of a proposed Borrowing comprised
     of Base Rate Advances, 10:00 A.M. (New York City time) on the date of the
     proposed Borrowing, by the Borrower requesting such A Borrowing to the
     Agent, which shall give to each Bank prompt notice thereof by telecopy,
     telex or cable. Each such notice of an A Borrowing (a "Notice of A
     Borrowing") shall be by telephone, confirmed immediately in writing, or by
     telecopy, telex or cable in substantially the form of Exhibit B-1 hereto,
     executed by the Borrower requesting such A Borrowing and specifying therein
     the requested (i) date of such A Borrowing (which shall be a Business Day),
     (ii) initial Type of A Advances comprising such A Borrowing, (iii)
     aggregate amount of such A Borrowing, and (iv) in the case of an A
     Borrowing comprised of Eurodollar Rate Advances, initial Interest Period
     for each such A Advance. Each Bank shall, before 11:00 A.M. (New York City
     time) on the date of such A Borrowing, make available for the account of
     its Applicable Lending Office to the Agent at its New York address referred
     to in Section 8.02, in same day funds, such Bank's ratable portion of such
     A Borrowing. After the Agent's receipt of such funds and upon fulfillment
     of the applicable conditions set forth in Article III, the Agent will make
     such funds available to the Borrower requesting such A Borrowing at the
     Agent's aforesaid address.

          (b) Anything herein to the contrary notwithstanding:

               (i) at no time shall there be outstanding to any one Borrower
          more than ten A Borrowings comprised of Eurodollar Rate Advances;

               (ii) no Borrower may select Eurodollar Rate Advances for any
          Borrowing if the aggregate amount of such Borrowing is less than
          $10,000,000;

               (iii) if the Majority Banks shall notify the Agent that either
          (A) the Eurodollar Rate for any Interest Period for any Eurodollar
          Rate Advances will not adequately reflect the cost to such Banks of
          making or funding their respective Eurodollar Rate Advances for such
          Interest Period, or (B) that U.S. dollar deposits for the relevant
          amounts and Interest Period for their respective Advances are not
          available to them in the London interbank market, or it is otherwise
          impossible to have Eurodollar Rate Advances, the Agent shall forthwith
          so notify the Borrowers and the Banks, whereupon (I) each Eurodollar
          Rate Advance will automatically, on the last day of the then existing
          Interest Period therefor, Convert into a Base Rate Advance, and (II)
          the obligations of the Banks to make, or to Convert Advances into,
          Eurodollar Rate Advances shall be suspended until the Agent, at the
          request of the Majority Banks, shall notify the Borrowers and the
          Banks that the circumstances causing such suspension no longer exist,
          and, except as provided in Section 2.02(b)(v), each Advance comprising
          any requested A Borrowing shall be a Base Rate Advance;

               (iv) if the Agent is unable to determine the Eurodollar Rate for
          Eurodollar Rate Advances, the obligation of the Banks to make, or to
          Convert Advances into, Eurodollar Rate Advances shall be suspended
          until the Agent shall


                                       32
<PAGE>

          notify the Borrowers and the Banks that the circumstances causing such
          suspension no longer exist, and, except as provided in Section
          2.02(b)(v), each Advance comprising any requested A Borrowing shall be
          a Base Rate Advance; and

               (v) if a Borrower has requested a proposed A Borrowing consisting
          of Eurodollar Rate Advances and as a result of circumstances referred
          to in Section 2.02(b)(iii) or (iv) such A Borrowing would not consist
          of Eurodollar Rate Advances, such Borrower may, by notice given not
          later than 3:00 P.M. (New York City time) at least one Business Day
          prior to the date such proposed A Borrowing would otherwise be made,
          cancel such A Borrowing, in which case such A Borrowing shall be
          cancelled and no Advances shall be made as a result of such requested
          A Borrowing, but such Borrower shall indemnify the Banks in connection
          with such cancellation as contemplated by Section 2.02(c).

          (c) Each Notice of A Borrowing shall be irrevocable and binding on the
     Borrowers, except as set forth in Section 2.02(b)(v). In the case of any A
     Borrowing requested by a Borrower which the related Notice of A Borrowing
     specifies is to be comprised of Eurodollar Rate Advances, such Borrower
     shall indemnify each Bank against any loss, cost or expense incurred by
     such Bank as a result of any failure to fulfill on or before the date
     specified in such Notice of A Borrowing for such A Borrowing the applicable
     conditions set forth in Article III, including, without limitation, any
     loss (excluding loss of anticipated profits), cost or expense incurred by
     reason of the liquidation or reemployment of deposits or other funds
     acquired by such Bank to fund the A Advance to be made by such Bank as part
     of such A Borrowing when such A Advance, as a result of such failure, is
     not made on such date. A certificate in reasonable detail as to the basis
     for and the amount of such loss, cost or expense submitted to such Borrower
     and the Agent by such Bank shall be prima facie evidence of the amount of
     such loss, cost or expense. If an A Borrowing requested by a Borrower which
     the related Notice of A Borrowing specifies is to be comprised of
     Eurodollar Rate Advances is not made as an A Borrowing comprised of
     Eurodollar Rate Advances as a result of Section 2.02(b), such Borrower
     shall indemnify each Bank against any loss (excluding loss of profits),
     cost or expense incurred by such Bank by reason of the liquidation or
     reemployment of deposits or other funds acquired by such Bank prior to the
     time such Bank is actually aware that such A Borrowing will not be so made
     to fund the A Advance to be made by such Bank as part of such A Borrowing.
     A certificate in reasonable detail as to the basis for and the amount of
     such loss, cost or expense submitted to such Borrower and the Agent by such
     Bank shall be prima facie evidence of the amount of such loss, cost or
     expense.

          (d) Unless the Agent shall have received notice from a Bank prior to
     the date of any A Borrowing to a Borrower that such Bank will not make
     available to the Agent such Bank's ratable portion of such A Borrowing, the
     Agent may assume that such Bank has made such portion available to the
     Agent on the date of such A Borrowing in accordance with subsection (a) of
     this Section 2.02 and the Agent may, in reliance upon such assumption, make
     available to such Borrower requesting such A Borrowing on such date a
     corresponding amount. If and to the extent that such Bank shall not have so
     made


                                       33
<PAGE>

     such ratable portion available to the Agent, such Bank and such Borrower
     severally agree to repay to the Agent forthwith on demand such
     corresponding amount together with interest thereon, for each day from the
     date such amount is made available to such Borrower until the date such
     amount is repaid to the Agent, at (i) in the case of such Borrower, the
     interest rate applicable at the time to A Advances comprising such A
     Borrowing and (ii) in the case of such Bank, the Federal Funds Rate. If
     such Bank shall repay to the Agent such corresponding amount, such amount
     so repaid shall constitute such Bank's A Advance as part of such A
     Borrowing for purposes of this Agreement.

          (e) The failure of any Bank to make the A Advance to be made by it as
     part of any A Borrowing shall not relieve any other Bank of its obligation,
     if any, hereunder to make its A Advance on the date of such A Borrowing,
     but no Bank shall be responsible for the failure of any other Bank to make
     the A Advance to be made by such other Bank on the date of any A Borrowing.

          Section 2.03. Fees.


          (a) Commitment Fee. TWC agrees to pay to the Agent for the account of
     each Bank a commitment fee on the average daily unused (for the purposes of
     this Section 2.03(a), A Advances made to any Borrower shall be considered
     to have been made to TWC, but B Advances to any Borrower shall not, for
     purposes of this Section 2.03(a), be considered to be usage of any
     Commitment) portion of such Bank's Commitment to TWC from July 31, 2002
     until the Termination Date at a rate per annum from time to time equal to
     the Applicable Commitment Fee Rate from time to time, payable in arrears on
     the last day of each March, June, September and December during the term
     such Bank has any Commitment to any Borrower and on the Termination Date.

          (b) Agent's Fees. TWC agrees to pay to the Agent, for its sole
     account, such fees as may be separately agreed to in writing by TWC and the
     Agent.

          Section 2.04. Reduction of the Commitments.

          (a) Optional. Each Borrower shall have the right, upon at least three
     Business Days notice to the Agent, to terminate in whole or reduce ratably
     in part the unused portions of the respective Commitments of the Banks to
     such Borrower, provided that each partial reduction shall be in the
     aggregate amount of at least $10,000,000, and provided further, that the
     aggregate amount of the Commitments of the Banks to any Borrower shall not
     be reduced to an amount which is less than the aggregate principal amount
     of the Advances then outstanding to such Borrower, and provided further,
     that the aggregate amount of the Commitments of the Banks to TWC shall not
     be reduced to an amount which is less than the aggregate principal amount
     of the Advances then outstanding to the Borrower as to which the aggregate
     outstanding principal amount of Advances is then the largest.

          (b) Termination. If all of the Commitments of the Banks to a Borrower
     (other than TWC) are terminated pursuant to Section 2.04(a) and such
     Borrower has paid all principal, interest, fees, costs and other amounts
     owed by it hereunder, such Borrower


                                       34
<PAGE>

     shall have the right, upon at least three Business Days' notice to the
     Agent, to elect to cease to be a Borrower hereunder, except for purposes of
     the definition herein of Majority Banks and for purposes of Sections 2.11,
     2.14 and 8.04.

          (c) Mandatory. By no later than five Business Days from the date of
     receipt by TWC or any of its Subject Subsidiaries of any Net Cash Proceeds
     from (i) any asset disposition (other than the MAPL Asset Disposition, the
     Seminole Asset Disposition, dispositions permitted pursuant to Section
     5.02(l)(i) and (iii), and any disposition of Collateral (other than the
     Refineries in Alaska and Memphis and the assets related thereto)), (ii) an
     issuance of TWC Preferred Stock, (iii) any disposition of Collateral
     permitted pursuant to Section 5.02(l) (other than the Refineries in Alaska
     and Memphis and the assets related thereto, and dispositions permitted
     pursuant to Section 5.02(l)(i) and (iii)), or (iv) any issuance of Equity
     Interests by TWC (other than TWC Preferred Stock), TWC shall apply such Net
     Cash Proceeds as follows:

          (A) So long as the aggregate Commitments of the Banks to TWC are
     greater than $400,000,000:

          (1) in the case of any such Net Cash Proceeds arising from any
     disposition referred to in clause (i) above which consists of the Refinery
     in Alaska owned by certain Subsidiaries and the assets related thereto, 50%
     of such Net Cash Proceeds shall be applied on a pro-rata basis to the
     permanent ratable reduction of the respective Commitments of the Banks to
     TWC;

          (2) in the case of any such Net Cash Proceeds arising from any asset
     disposition referred to in clause (i) above and not otherwise applied
     pursuant to sub-clause (1) above (including any disposition of the Refinery
     in Memphis, Tennessee owned by certain Subsidiaries and the assets related
     thereto), 50% of such Net Cash Proceeds shall be applied on a pro-rata
     basis, without duplication, to the permanent ratable (A) reduction of the
     respective Commitments of the Banks to TWC, (B) reduction of the
     outstanding amounts of the Progeny Facilities (excluding the Prairie Wolf
     Facility) and (C) cash collateralization of the Legacy L/Cs;

          (3) in the case of any such Net Cash Proceeds arising from an issuance
     of TWC Preferred Stock referred to in clause (ii) above, 100% of such Net
     Cash Proceeds shall be applied on a pro-rata basis, without duplication, to
     the permanent ratable (x) reduction of the respective Commitments of the
     Banks to TWC, (y) reduction of the outstanding amounts of the Progeny
     Facilities (excluding the Prairie Wolf Facility) and (z) cash
     collateralization of the Legacy L/Cs;

          (4) in the case of any such Net Cash Proceeds arising from any
     disposition of Collateral referred to in clause (iii) above, 50% of such
     Net Cash Proceeds shall be applied on a pro-rata basis to the permanent
     ratable (x) reduction of the respective Commitments of the Banks to TWC and
     (y) Cash Collateralization of the Letter of Credit Commitments; and

          (5) in the case of any such Net Cash Proceeds arising from any
     issuance of Equity Interests referred to in clause (iv) above, 50% of such
     Net Cash Proceeds shall be


                                       35
<PAGE>

     applied on a pro-rata basis, without duplication, to the permanent ratable
     (w) reduction of the respective Commitments of the Banks to TWC, (x) Cash
     Collateralization of the Letter of Credit Commitments, (y) reduction of the
     outstanding amounts of the Progeny Facilities (excluding the Prairie Wolf
     Facility) and (z) cash collateralization of the Legacy L/Cs;

          (B) From such time that the aggregate Commitments of the Banks to TWC
     are equal to or less than $400,000,000:

          (1) 50% of any Net Cash Proceeds arising from an asset disposition
     referred to in clause (A)(1) or (A)(4) above shall be applied, first, to
     fully Cash Collateralize the Letter of Credit Commitments and, second, upon
     the Letter of Credit Commitments being fully Cash Collateralized, to a
     pro-rata and permanent ratable (without duplication) (x) reduction of the
     outstanding amounts of the Progeny Facilities (excluding the Prairie Wolf
     Facility) and (y) cash collateralization of the Legacy L/Cs, and third,
     upon the full Cash Collateralization of the Letter of Credit Commitments,
     the reduction of the outstanding amounts of the Progeny Facilities
     (excluding the Prairie Wolf Facility) to zero, and the full cash
     collateralization of the Legacy L/Cs, to a pro-rata and permanent reduction
     of the respective Commitments of the Banks to TWC;

          (2) 50% of any Net Cash Proceeds arising from an asset disposition
     referred to in clause (A)(2) above shall be applied, first, on a pro-rata
     basis, without duplication, to the permanent ratable (x) reduction of the
     outstanding amounts of the Progeny Facilities (excluding the Prairie Wolf
     Facility) and (y) cash collateralization of the Legacy L/Cs, and, second,
     upon the reduction of the outstanding amounts of the Progeny Facilities
     (excluding the Prairie Wolf Facility) to zero and the full cash
     collateralization of the Legacy L/Cs, to a pro-rata and permanent reduction
     of the respective Commitments of the Banks to TWC;

          (3) 100% of any Net Cash Proceeds arising from an issuance of TWC
     Preferred Stock referred to in clause (A)(3) above shall be applied, first,
     on a pro-rata basis, without duplication, to the permanent ratable (x)
     reduction of the outstanding amounts of the Progeny Facilities (excluding
     the Prairie Wolf Facility) and (y) cash collateralization of the Legacy
     L/Cs and, second, upon the reduction of the outstanding amounts of the
     Progeny Facilities (excluding the Prairie Wolf Facility) to zero and the
     full cash collateralization of the Legacy L/Cs, to a pro-rata and permanent
     reduction of the respective Commitments of the Banks to TWC; and

          (4) 50% of any Net Cash Proceeds arising from an issuance of Equity
     Interests referred to in clause (A)(5) above shall be applied, first, on a
     pro-rata basis, without duplication, to the permanent ratable (x) Cash
     Collateralization of the Letter of Credit Commitments, (x) reduction of the
     outstanding amounts of the Progeny Facilities (excluding the Prairie
     Wolf Facility) and (y) cash collateralization of the Legacy L/Cs, and
     second, upon the full Cash Collateralization of the Letter of Credit
     Commitments, the reduction of the outstanding amounts of the Progeny
     Facilities (excluding the Prairie

                                       36
<PAGE>

     Wolf Facility) to zero, and the full cash collateralization of the Legacy
     L/Cs, to a pro-rata and permanent reduction of the respective Commitments
     of the Banks to TWC.

     provided, that no such mandatory (w) reduction of the Commitments, (x)
reduction of the outstanding amounts of the Progeny Facilities (excluding the
Prairie Wolf Facility), (y) cash collateralization of the Legacy L/Cs, or (z)
Cash Collateralization of the Letter of Credit Commitments shall be required
pursuant to this Section 2.04 (c) until the earlier of (A) such time as the
aggregate amount of Net Cash Proceeds from such asset dispositions and equity
issuances that have not previously been applied to a mandatory reduction of
Commitments shall exceed $50,000,000 and (B) the end of the Fiscal Quarter in
which such Net Cash Proceeds are received by TWC or any of its Subsidiaries. If
a reduction of the Commitments pursuant to this Section 2.04(c) shall cause the
Commitments as so reduced to be less than the aggregate outstanding principal
amount of the Advances (such positive difference between the Commitments and the
outstanding Advances being referred to herein as the "EXCESS AMOUNT"), TWC shall
repay an aggregate principal amount equal to no less than such Excess Amount,
and except as set forth in this proviso, the obligation of TWC to apply Net Cash
Proceeds to the reduction of the Commitments of the Banks shall not require any
payments to the Banks.

     Section 2.05. Repayment of A Advances. Each Borrower shall repay, on the
Stated Termination Date or such earlier date as the Notes may be declared due
pursuant to Article VI, the unpaid principal amount of each A Advance made by
each Bank to such Borrower.

     Section 2.06. Interest on A Advances. Each Borrower shall pay interest on
the unpaid principal amount of each A Advance made by each Bank to such Borrower
from the date of such A Advance until such principal amount shall be paid in
full, at the following rates per annum:

          (a) Base Rate Advances. At such times as such A Advance is a Base Rate
     Advance, a rate per annum equal at all times to the Base Rate plus the
     Applicable Margin in effect from time to time, payable quarterly in arrears
     on the last day of each March, June, September and December and on the date
     such Advance shall be Converted or paid in full; provided that any amount
     of principal of any Base Rate Advance, interest, fees and other amounts
     payable hereunder (other than principal of any Eurodollar Rate Advance)
     which is not paid when due (whether at stated maturity, by acceleration or
     otherwise) shall bear interest, from the date on which such amount is due
     until such amount is paid in full, payable on demand, at a rate per annum
     equal at all times to the sum of the Base Rate plus the Applicable Margin
     in effect from time to time plus 2% per annum.

          (b) Eurodollar Rate Advances. At such times as such A Advance is a
     Eurodollar Rate Advance, a rate per annum equal at all times during each
     Interest Period for such A Advance to the sum of the Eurodollar Rate for
     such Interest Period plus the Applicable Margin in effect from time to time
     for such A Advance, payable on the last day of such Interest Period and, if
     such Interest Period has a duration of more than three months, on each day
     which occurs during such Interest Period every three months from


                                       37
<PAGE>

     the first day of such Interest Period; provided that any amount of
     principal of any Eurodollar Rate Advance which is not paid when due
     (whether at stated maturity, by acceleration or otherwise) shall bear
     interest, from the date on which such amount is due until such amount is
     paid in full, payable on demand, at a rate per annum equal at all times to
     the sum of the rate per annum required to be paid on such A Advance at such
     time plus 2% per annum.

     Section 2.07. Additional Interest on Eurodollar Rate Advances. Each
Borrower shall pay to each Bank, so long as such Bank shall be required under
regulations of the Board of Governors of the Federal Reserve System to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities, additional interest on the unpaid principal amount of
each Eurodollar Rate Advance of such Bank to such Borrower, from the date of
such Advance until such principal amount is paid in full, at an interest rate
per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the Interest Period for such Advance from (ii) the rate
obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus
the Eurodollar Rate Reserve Percentage of such Bank for such Interest Period,
payable on each date on which interest is payable on such Advance. Such
additional interest shall be determined by such Bank and notified to such
Borrower through the Agent. A certificate as to the amount of such additional
interest submitted to such Borrower and the Agent by such Bank shall be
conclusive and binding for all purposes, absent manifest error. No Bank shall
have the right to recover any additional interest pursuant to this Section 2.07
for any period more than 90 days prior to the date such Bank notifies the
Borrowers that additional interest may be charged pursuant to this Section 2.07.

     Section 2.08. Interest Rate Determination. The Agent shall give prompt
notice to the Borrower to which an A Advance is made and the Banks of the
applicable interest rate for each Eurodollar Rate Advance determined by the
Agent for purposes of Section 2.06(b).

     Section 2.09. Evidence of Debt.

          (a) Each Bank shall maintain in accordance with its usual practice an
     account or accounts evidencing the Indebtedness of each Borrower to such
     Bank resulting from each A Advance and B Advance made by such Bank,
     including the amounts of principal and interest payable and paid to such
     Bank from time to time hereunder.

          (b) The Agent shall maintain accounts in which it shall record (i) the
     Borrower and the amount of each Advance made hereunder, the Type thereof
     and the Interest Period applicable thereto, (ii) the amount of any
     principal or interest due and payable or to become due and payable from
     each Borrower to each Bank hereunder and (iii) the amount of any sum
     received by the Agent hereunder for the account of the Banks and each
     Bank's share thereof.

          (c) The entries made in good faith in the accounts maintained pursuant
     to paragraph (a) or (b) of this Section shall be prima facie evidence of
     the existence and amounts of the obligations recorded therein absent
     manifest error; provided that the failure of any Bank or the Agent to
     maintain such accounts or any error therein shall not


                                       38
<PAGE>

     in any manner affect the obligation of the Borrowers to repay the Advances
     in accordance with the terms of this Agreement.

          (d) Any Bank may request that the A Advances or any B Advance made by
     it be evidenced by a Note. In such event, the Borrowers (or, in the case of
     a B Advance, the relevant Borrower) shall prepare, execute and deliver to
     such Bank a Note or Notes payable to the order of such Bank. Thereafter,
     the Advances evidenced by such Note and interest thereon shall at all times
     (including after assignment pursuant to Section 8.06) be represented by one
     or more Notes payable to the order of the payee named therein.

          Section 2.10. Prepayments.

          (a) No Borrower shall have any right to prepay any principal amount of
     any A Advance except as provided in this Section 2.10.

          (b) Any Borrower may, in respect of Base Rate Advances upon notice to
     the Agent before 10:00 A.M. (New York City time) on the date of prepayment,
     and in respect of Eurodollar Rate Advances upon at least three Business
     Days' notice to the Agent, in each case stating the proposed date (which
     shall be a Business Day) and aggregate principal amount of the prepayment,
     and if such notice is given such Borrower shall prepay the outstanding
     principal amounts of the A Advances comprising part of the same A Borrowing
     in whole or ratably in part, together with accrued interest to the date of
     such prepayment on the principal amount prepaid and amounts, if any,
     required to be paid pursuant to Section 8.04(b) as a result of such
     prepayment; provided, however, that each partial prepayment pursuant to
     this Section 2.10(b) shall be in an aggregate principal amount not less
     than $5,000,000 and in an aggregate principal amount such that after giving
     effect thereto no A Borrowing comprised of Base Rate Advances shall have a
     principal amount outstanding of less than $5,000,000 and no A Borrowing
     comprised of Eurodollar Rate Advances shall have a principal amount
     outstanding of less than $10,000,000.

          (c) Each Borrower will give notice to the Agent at or before the time
     of each prepayment by such Borrower of Advances pursuant to this Section
     2.10 specifying the Advances which are to be prepaid and the amount of such
     prepayment to be applied to such Advances, and each payment of any Advance
     pursuant to this Section 2.10 or any other provision of this Agreement
     shall be made in a manner such that all Advances comprising part of the
     same Borrowing are paid in whole or ratably in part.

          Section 2.11. Increased Costs.

          (a) If, due to either (i) the introduction of or any change (other
     than any change by way of imposition or increase of reserve requirements
     included in the Eurodollar Rate Reserve Percentage) in or in the
     interpretation, application or applicability of any law or regulation or
     (ii) the compliance with any guideline or request from any central bank or
     other governmental or monetary authority (whether or not having the force
     of law), there shall be any increase in the cost to any Bank of agreeing to
     make or making, funding or maintaining Eurodollar Rate Advances to any
     Borrower,


                                       39
<PAGE>

     then such Borrower shall from time to time, upon demand by such Bank (with
     a copy of such demand to the Agent), pay to the Agent for the account of
     such Bank additional amounts sufficient to compensate such Bank for such
     increased cost. A certificate as to the amount of such increased cost,
     submitted to such Borrower and the Agent by such Bank, shall be prima facie
     evidence of the amount of such increased cost. No Bank shall have the right
     to recover any such increased costs for any period more than 90 days prior
     to the date such Bank notifies the Borrowers of any such introduction,
     change, compliance or proposed compliance.

          (b) If any Bank determines that compliance with any law or regulation
     or any guideline or request from any central bank or other governmental or
     monetary authority (whether or not having the force of law) affects or
     would affect the amount of capital required or expected to be maintained by
     such Bank or any corporation controlling such Bank and that the amount of
     such capital is increased by or based upon the existence of such Bank's
     commitment to lend to any Borrower hereunder and other commitments of this
     type, then, upon demand by such Bank (with a copy of such demand to the
     Agent), such Borrower shall immediately pay to the Agent for the account of
     such Bank, from time to time as specified by such Bank, additional amounts
     sufficient to compensate such Bank or such corporation in the light of such
     circumstances, to the extent that such Bank reasonably determines such
     increase in capital to be allocable to the existence of such Bank's
     commitment to lend hereunder. A certificate as to the amount of such
     additional amounts, submitted to such Borrower and the Agent by such Bank,
     shall be prima facie evidence of the amount of such additional amounts. No
     Bank shall have any right to recover any additional amounts under this
     Section 2.11(b) for any period more than 90 days prior to the date such
     Bank notifies the Borrowers of any such compliance.

          (c) In the event that any Bank makes a demand for payment under
     Section 2.07, Section 2.14 or this Section 2.11, TWC may within ninety days
     of such demand, if no Event of Default or event which, with the giving of
     notice or lapse of time or both, would constitute an Event of Default then
     exists, replace such Bank with another commercial bank in accordance with
     all of the provisions of the last sentence of Section 8.06(a) (including
     execution of an appropriate Transfer Agreement) provided that (i) all
     obligations of such Bank to lend hereunder shall be terminated and the
     Notes payable to such Bank and all other obligations owed to such Bank
     hereunder shall be purchased in full without recourse at par plus accrued
     interest at or prior to such replacement, (ii) such replacement bank
     (unless such replacement bank is already a Bank prior to the effectiveness
     of such replacement) shall be reasonably satisfactory to the Agent, (iii)
     such replacement bank shall, from and after such replacement, be deemed for
     all purposes to be a "Bank" hereunder with a Commitment to each Borrower in
     the amount of the respective Commitment of such Bank to such Borrower
     immediately prior to such replacement (plus, if such replacement bank is
     already a Bank prior to such replacement the respective Commitment of such
     Bank to such Borrower prior to such replacement), as such amount may be
     changed from time to time pursuant hereto, and shall have all of the
     rights, duties and obligations hereunder of the Bank being replaced, and
     (iv) such other actions shall be taken by the Borrowers, such Bank and such
     replacement bank as may be appropriate to effect the replacement of such
     Bank with such replacement bank on terms


                                       40
<PAGE>

     such that such replacement bank has all of the rights, duties and
     obligations hereunder as such Bank (including, without limitation,
     execution and delivery of new Note(s) of each Borrower to such replacement
     bank if requested by such replacement bank or if required pursuant to
     Section 2.09, redelivery to each Borrower in due course of the Note(s) of
     such Borrower payable to such Bank and specification of the information
     contemplated by Schedule I as to such replacement bank).

          (d) Before making any demand under this Section 2.11, each Bank agrees
     to use reasonable efforts (consistent with its internal policy and legal
     and regulatory restrictions) to designate a different Applicable Lending
     Office if the making of such a designation would avoid the need for, or
     reduce the amount of, such increased cost and would not, in the reasonable
     judgment of such Bank, be otherwise disadvantageous to such Bank.

          Section 2.12. Illegality.

          (a) Notwithstanding any other provision of this Agreement, if any Bank
     shall notify the Agent that the introduction of or any change in or in the
     interpretation of any law or regulation shall make it unlawful, or that any
     central bank or other governmental or monetary authority shall assert that
     it is unlawful, for any Bank or its Eurodollar Lending Office to perform
     its obligations hereunder to make, or Convert a Base Rate Advance into, a
     Eurodollar Rate Advance or to continue to fund or maintain any Eurodollar
     Rate Advance, then, on notice thereof to the Borrowers by the Agent, (i)
     the obligation of each of the Banks to make, or to Convert Advances into,
     Eurodollar Rate Advances shall be suspended until the Agent, at the request
     of the Majority Banks, shall notify the Borrowers and the Banks that the
     circumstances causing such suspension no longer exist, and (ii) the
     Borrowers shall forthwith prepay in full all Eurodollar Rate Advances of
     all Banks then outstanding together with all accrued interest thereon and
     all amounts payable pursuant to Section 8.04(b), unless each Bank shall
     determine in good faith in its sole opinion that it is lawful to maintain
     the Eurodollar Rate Advances made by such Bank to the end of the respective
     Interest Periods then applicable thereto or unless the Borrowers, within
     five Business Days of notice from the Agent, Convert all Eurodollar Rate
     Advances of all Banks then outstanding into Base Rate Advances in
     accordance with Section 2.19.

          (b) If legally permissible, before delivering any notice to the Agent
     under this Section 2.12 regarding illegality of Eurodollar Rate Advances,
     each Bank agrees to use reasonable efforts (consistent with its internal
     policy and legal and regulatory restrictions) to designate a different
     Eurodollar Lending Office if the making of such a designation would avoid
     the need for, or reduce the amount of, such increased cost and would not,
     in the reasonable judgment of such Bank, be otherwise disadvantageous to
     such Bank.

          Section 2.13. Payments and Computations.

          (a) Each Borrower shall make each payment hereunder to be made by it
     not later than 11:00 A.M. (New York City time) on the day when due in U.S.
     dollars to the


                                       41
<PAGE>

     Agent at its New York address referred to in Section 8.02 in same day
     funds. The Agent will promptly thereafter cause to be distributed like
     funds relating to the payment of principal, interest or commitment fees
     ratably (other than amounts payable pursuant to Sections 2.02(c), 2.07,
     2.11, 2.14, 2.16 or 8.04(b)) to the Banks for the account of their
     respective Applicable Lending Offices, and like funds relating to the
     payment of any other amount payable to any Bank to such Bank for the
     account of its Applicable Lending Office, in each case to be applied in
     accordance with the terms of this Agreement. In no event shall any Bank be
     entitled to share any fee paid to the Agent pursuant to Section 2.03(b),
     any auction fee paid to the Agent pursuant to Section 2.16(a)(i) or any
     other fee paid to the Agent, as such.

          (b) [Intentionally omitted.]

          (c) (i) All computations of interest based on clause (a) of the
     definition herein of Base Rate and of commitment fees shall be made by the
     Agent on the basis of a year of 365 or 366 days, as the case may be, and
     (ii) all computations of interest based on the Eurodollar Rate, the Federal
     Funds Rate or clause (b) of the definition herein of Base Rate shall be
     made by the Agent, and all computations of interest pursuant to Section
     2.07 shall be made by a Bank, on the basis of a year of 360 days, in each
     case for the actual number of days (including the first day but excluding
     the last day) occurring in the period for which such interest or commitment
     fees are payable. Each determination by the Agent (or, in the case of
     Section 2.07, by a Bank) of an interest rate hereunder shall be conclusive
     and binding for all purposes, absent manifest error.

          (d) Whenever any payment hereunder or under the Notes shall be stated
     to be due on a day other than a Business Day, such payment shall be made on
     the next succeeding Business Day, and such extension of time shall in such
     case be included in the computation of payment of interest or commitment
     fee, as the case may be; provided, however, if such extension would cause
     payment of interest on or principal of Eurodollar Rate Advances to be made
     in the next following calendar month, such payment shall be made on the
     next preceding Business Day.

          (e) Unless the Agent shall have received notice from a Borrower prior
     to the date on which any payment is due by such Borrower to any Bank
     hereunder that such Borrower will not make such payment in full, the Agent
     may assume that such Borrower has made such payment in full to the Agent on
     such date and the Agent may, in reliance upon such assumption, cause to be
     distributed to each Bank on such due date an amount equal to the amount
     then due such Bank hereunder. If and to the extent such Borrower shall not
     have so made such payment in full to the Agent, each Bank shall repay to
     the Agent forthwith on demand such amount distributed to such Bank together
     with interest thereon, for each day from the date such amount is
     distributed to such Bank until the date such Bank repays such amount to the
     Agent, at the Federal Funds Rate.


                                       42
<PAGE>

          Section 2.14. Taxes.

          (a) Any and all payments by any Borrower hereunder shall be made, in
     accordance with Section 2.13, free and clear of and without deduction for
     any and all present or future taxes, levies, imposts, deductions, charges
     or withholdings with respect thereto, and all liabilities with respect
     thereto, excluding in the case of each Bank and the Agent, (i) taxes
     imposed on its income, and franchise taxes imposed on it, by the
     jurisdiction under the laws of which such Bank or the Agent (as the case
     may be) is organized or any political subdivision thereof and (ii) taxes
     imposed as a result of a present or former connection between such Bank or
     the Agent, as the case may be, and the jurisdiction imposing such tax or
     any political subdivision thereof and, in the case of each Bank, taxes
     imposed on its income, and franchise taxes imposed on it, by the
     jurisdiction of such Bank's Applicable Lending Office or any political
     subdivision thereof, other than any such connection arising solely from the
     Bank or Agent having executed or delivered, or performed its obligations or
     received a payment under, or taken any other action related to this
     Agreement (all such non-excluded taxes, levies, imposts, deductions,
     charges, withholdings and liabilities being hereinafter referred to as
     "Taxes"). If any Borrower shall be required by law to deduct any Taxes from
     or in respect of any sum payable hereunder or under any Note to any Bank or
     the Agent, (i) the sum payable shall be increased as may be necessary so
     that after making all required deductions (including deductions applicable
     to additional sums payable under this Section 2.14) such Bank or the Agent
     (as the case may be) receives an amount equal to the sum it would have
     received had no such deductions been made, (ii) such Borrower shall make
     such deductions and (iii) such Borrower shall pay the full amount deducted
     to the relevant taxation authority or other authority in accordance with
     applicable law.

          (b) In addition, each Borrower agrees to pay any present or future
     stamp or documentary taxes or any other excise or property taxes, charges
     or similar levies which arise from any payment made by such Borrower
     hereunder or under any Notes executed by it or from the execution, delivery
     or registration of, or otherwise with respect to, this Agreement or such
     Notes (hereinafter referred to as "Other Taxes").

          (c) Each Borrower will indemnify each Bank and the Agent for the full
     amount of Taxes or Other Taxes (including, without limitation, any Taxes or
     Other Taxes imposed by any jurisdiction on amounts payable under this
     Section 2.14) owed and paid by such Bank or the Agent (as the case may be)
     and any liability (including penalties, interest and expenses) arising
     therefrom or with respect thereto. This indemnification shall be made
     within 30 days from the date such Bank or the Agent (as the case may be)
     makes written demand therefor, provided that, such Borrower shall have no
     liability pursuant to this clause (c) of this Section 2.14 to indemnify a
     Bank or the Agent for Taxes or Other Taxes which were paid by such Bank or
     the Agent more than ninety days prior to such written demand for
     indemnification.

          (d) In the event that a Bank or the Agent receives a written
     communication from any governmental authority with respect to an assessment
     or proposed assessment of any Taxes, such Bank or Agent shall promptly
     notify TWC in writing and provide


                                       43
<PAGE>

     TWC with a copy of such communication. The Agent or a Bank's failure to
     provide a copy of such communication to TWC shall not relieve any Borrower
     of any of its obligations under Section 2.14(c).

          (e) Within 30 days after the date of the payment of Taxes by or at the
     direction of any Borrower, such Borrower will furnish to the Agent, at its
     address referred to in Section 8.02, the original or a certified copy of a
     receipt evidencing payment thereof. Should any Bank or the Agent ever
     receive any refund, credit or deduction from any taxing authority to which
     such Bank or the Agent would not be entitled but for the payment by a
     Borrower of Taxes as required by this Section 2.14 (it being understood
     that the decision as to whether or not to claim, and if claimed, as to the
     amount of any such refund, credit or deduction shall be made by such Bank
     or the Agent, as the case may be, in its reasonable judgment), such Bank or
     the Agent, as the case may be, thereupon shall repay to such Borrower an
     amount with respect to such refund, credit or deduction equal to any net
     reduction in taxes actually obtained by such Bank or the Agent, as the case
     may be, and determined by such Bank or the Agent, as the case may be, to be
     attributable to such refund, credit or deduction.

          (f) Each Bank organized under the laws of a jurisdiction outside the
     United States shall on or prior to the date of its execution and delivery
     of this Agreement in the case of each Bank which is a party to this
     Agreement on the date this Agreement becomes effective and on the date of
     the Transfer Agreement pursuant to which it becomes a Bank is first
     effective in the case of each other Bank, and from time to time thereafter
     as necessary or appropriate (but only so long thereafter as such Bank
     remains lawfully able to do so), provide the Agent and each Borrower with
     two original Internal Revenue Service Forms W-8BEN or W-8ECI (or, in the
     case of a Bank that has provided a certificate to the Agent that it is not
     (i) a "bank" as defined in Section 881(c)(3)(A) of the Internal Revenue
     Code, (ii) a ten-percent shareholder (within the meaning of Section
     871(h)(3)(B) of the Internal Revenue Code) of such Borrower or (iii) a
     controlled foreign corporation related to such Borrower (within the meaning
     of Section 864(d)(4) of the Internal Revenue Code), Internal Revenue
     Service Form W-8BEN), or any successor or other form prescribed by the
     Internal Revenue Service, certifying that such Bank is exempt from or
     entitled to a reduced rate of United States withholding tax on payments
     pursuant to this Agreement or any other Loan Document or, in the case of a
     Bank that has certified that it is not a "bank" as described above,
     certifying that such Bank is a foreign corporation. If the forms provided
     by a Bank at the time such Bank first becomes a party to this Agreement
     indicate a United States interest withholding tax rate in excess of zero,
     withholding tax at such rate shall be considered excluded from Taxes unless
     and until such Bank provides the appropriate forms certifying that a lesser
     rate applies, whereupon withholding tax at such lesser rate only shall be
     considered excluded from Taxes for periods governed by such forms.

          (g) For any period with respect to which a Bank has failed to provide
     any Borrower with the appropriate form, certificate or other document
     described in subsection (f) of this Section 2.14 (other than if such
     failure is due to a change in the applicable law, or in the interpretation
     or application thereof, occurring after the date on


                                       44
<PAGE>

     which a form, certificate or other document originally was required to be
     provided) such Bank shall not be entitled to indemnification under
     subsection (a) or (c) of this Section 2.14 with respect to Taxes imposed by
     the United States by reason of such failure; provided, however, that should
     a Bank become subject to Taxes because of its failure to deliver a form,
     certificate or other document required hereunder, the Borrowers shall take
     such steps as such Bank shall reasonably request to assist such Bank in
     recovering such Taxes.

          (h) Any Bank claiming any additional amounts payable pursuant to this
     Section 2.14 agrees to use reasonable efforts to change the jurisdiction of
     its Applicable Lending Office if the making of such a change would avoid
     the need for, or reduce the amount of, any such additional amounts that may
     thereafter accrue and would not, in the reasonable judgment of such Bank,
     be otherwise materially disadvantageous to such Bank.

          (i) Without prejudice to the survival of any other agreement of the
     Borrowers hereunder, the agreements and obligations of the Borrowers
     contained in this Section 2.14 shall survive the payment in full of
     principal and interest hereunder and the termination of the Commitments.

          (j) Notwithstanding any provision of this Agreement or the Notes to
     the contrary, this Section 2.14 shall be the sole provision governing
     indemnities and claims for taxes under this Agreement and the Notes, if
     any.

     Section 2.15. Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary or involuntary, or through the exercise of any right
of set-off or otherwise) on account of the A Advances made by it (other than
pursuant to Section 2.02(c), 2.07, 2.11, 2.14 or 8.04(b)) in excess of its
ratable share of payments on account of the A Advances obtained by all the
Banks, such Bank shall forthwith purchase from the other Banks such
participations in the A Advances owed to them as shall be necessary to cause
such purchasing Bank to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Bank, such purchase from each Bank
shall be rescinded and such Bank shall repay to the purchasing Bank the purchase
price to the extent of such Bank's ratable share (according to the proportion of
(i) the amount of the participation purchased from such Bank as a result of such
excess payment to (ii) the total amount of such excess payment) of such recovery
together with an amount equal to such Bank's ratable share (according to the
proportion of (i) the amount of such Bank's required repayment to (ii) the total
amount so recovered from the purchasing Bank) of any interest or other amount
paid or payable by the purchasing Bank in respect of the total amount so
recovered. Each Borrower agrees that any Bank so purchasing a participation from
another Bank pursuant to this Section 2.15 may, to the fullest extent permitted
by law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank were the direct creditor
of such Borrower in the amount of such participation.

     Section 2.16. The B Advances.


                                       45
<PAGE>

          (a) Each Bank severally agrees that each Borrower may make B
     Borrowings under this Section 2.16 from time to time on any Business Day
     during the period from July 31, 2002 until the earlier of (I) the
     Termination Date or (II) the date occurring 30 days prior to the Stated
     Termination Date in the manner set forth below; provided that, following
     the making of each B Borrowing, the aggregate amount of the Advances then
     outstanding to such Borrower shall not exceed the aggregate amount of the
     Commitments of the Banks to such Borrower (computed without regard to any B
     Reduction) and the aggregate amount of all Advances then outstanding shall
     not exceed the aggregate amount of the Commitments of the Banks to TWC
     (computed without regard to any B Reduction).

               (i) A Borrower may request a B Borrowing under this Section 2.16
          by delivering to the Agent, by telecopier, telex or cable, confirmed
          immediately in writing, a notice of a B Borrowing (a "Notice of B
          Borrowing"), in substantially the form of Exhibit B-2 hereto,
          specifying the date and aggregate amount of the proposed B Borrowing,
          the maturity date for repayment of each B Advance to be made as part
          of such B Borrowing (which maturity date may not be earlier than the
          date occurring 7 days after the date of such B Borrowing or later than
          the earlier of (x) 6 months after the date of such B Borrowing or (y)
          the Stated Termination Date), the interest payment date or dates
          relating thereto, and any other terms to be applicable to such B
          Borrowing (including, without limitation, the basis to be used by the
          Banks in determining the rate or rates of interest to be offered by
          them as provided in paragraph (ii) below and prepayment terms, if any,
          but excluding any waiver or other modification to any of the
          conditions set forth in Article III), not later than 10:00 A.M. (New
          York City time) (A) at least one Business Day prior to the date of the
          proposed B Borrowing, if such Borrower shall specify in the Notice of
          B Borrowing that the rates of interest to be offered by the Banks
          shall be fixed rates per annum and (B) at least five Business Days
          prior to the date of the proposed B Borrowing, if such Borrower shall
          instead specify in the Notice of B Borrowing the basis to be used by
          the Banks in determining the rates of interest to be offered by them.
          The Agent shall in turn promptly notify each Bank of each request for
          a B Borrowing received by it from a Borrower by sending such Bank a
          copy of the related Notice of B Borrowing. Each time that a Borrower
          gives a Notice of B Borrowing, such Borrower shall pay to the Agent an
          auction fee equal to $2000.

               (ii) Each Bank may, if in its sole discretion it elects to do so,
          irrevocably offer to make one or more B Advances to a Borrower as part
          of such proposed B Borrowing at a rate or rates of interest specified
          by such Bank in its sole discretion, by notifying the Agent (which
          shall give prompt notice thereof to such Borrower), before 10:00 A.M.
          (New York City time) (x) on the date of such proposed B Borrowing, in
          the case of a Notice of B Borrowing delivered pursuant to clause (A)
          of paragraph (i) above, and (y) three Business Days before the date of
          such proposed B Borrowing in the case of a Notice of B Borrowing
          delivered pursuant to clause (B) of paragraph (i) above, of the
          minimum amount and maximum amount of each B Advance which such Bank
          would be willing to make


                                       46
<PAGE>

          as part of such proposed B Borrowing (which amounts may, subject to
          the proviso to the first sentence of this Section 2.16(4), exceed such
          Bank's Commitment to such Borrower), the rate or rates of interest
          therefor, and such Bank's Applicable Lending Office with respect to
          such B Advance; provided that, if the Agent in its capacity as a Bank
          shall, in its sole discretion, elect to make any such offer, it shall
          notify such Borrower of such offer before 9:45 A.M. (New York City
          time) on the date on which notice of such election is to be given to
          the Agent by the other Banks. If any Bank wishes to request a B Note
          in respect to its B Advance, such request shall be delivered with the
          notice referred to in the preceding sentence. If any Bank shall elect
          not to make such an offer, such Bank shall so notify the Agent, before
          10:00 A.M. (New York City time) on the date on which notice of such
          election is to be given to the Agent by the other Banks, and such Bank
          shall not be obligated to, and shall not, make any B Advance as part
          of such B Borrowing; provided that the failure by any Bank to give
          such notice shall not cause such Bank to be obligated to make any B
          Advance as part of such proposed B Borrowing.

               (iii) The Borrower requesting such proposed B Borrowing shall, in
          turn, before 11:00 A.M. (New York City time) (x) on the date of such
          proposed B Borrowing in the case of a Notice of B Borrowing delivered
          pursuant to clause (A) of paragraph (i) above and (y) three Business
          Days before the date of such proposed B Borrowing in the case of a
          Notice of B Borrowing delivered pursuant to clause (B) of paragraph
          (i) above, either

                    (A) cancel such B Borrowing by giving the Agent notice to
               that effect, or

                    (B) accept one or more of the offers made by any Bank or
               Banks pursuant to paragraph (ii) above, in order of the lowest to
               highest rates of interest or margins (or, if two or more Banks
               bid at the same rates of interest, and the amount of accepted
               offers is less than the aggregate amount of such offers, the
               amount to be borrowed from such Banks as part of such B Borrowing
               shall be allocated among such Banks pro rata on the basis of the
               maximum amount offered by such Banks at such rates or margin in
               connection with such B Borrowing), in any aggregate amount up to
               the aggregate amount initially requested by such Borrower in the
               relevant Notice of B Borrowing, by giving notice to the Agent of
               the amount of each B Advance (which amount shall be equal to or
               greater than the minimum amount, and equal to or less than the
               maximum amount, notified to such Borrower by the Agent on behalf
               of such Bank for such B Advance pursuant to paragraph (ii) above)
               to be made by each Bank as part of such B Borrowing, and reject
               any remaining offers made by Banks pursuant to paragraph (ii)
               above by giving the Agent notice to that effect.


                                       47
<PAGE>

               (iv) If the Borrower requesting such B Borrowing notifies the
          Agent that such B Borrowing is cancelled pursuant to paragraph
          (iii)(A) above, the Agent shall give prompt notice thereof to the
          Banks and such B Borrowing shall not be made.

               (v) If the Borrower requesting such B Borrowing accepts one or
          more of the offers made by any Bank or Banks pursuant to paragraph
          (iii)(B) above, the Agent shall in turn promptly notify (A) each Bank
          that has made an offer as described in paragraph (ii) above, of the
          date and aggregate amount of such B Borrowing and whether or not any
          offer or offers made by such Bank pursuant to paragraph (ii) above
          have been accepted by such Borrower, (B) each Bank that is to make a B
          Advance as part of such B Borrowing, of the amount of each B Advance
          to be made by such Bank as part of such B Borrowing, and (C) each Bank
          that is to make a B Advance as part of such B Borrowing, upon receipt,
          that the Agent has received forms of documents appearing to fulfill
          the applicable conditions set forth in Article III. Each Bank that is
          to make a B Advance as part of such B Borrowing shall, before 12:00
          noon (New York City time) on the date of such B Borrowing specified in
          the notice received from the Agent pursuant to clause (A) of the
          preceding sentence or any later time when such Bank shall have
          received notice from the Agent pursuant to clause (C) of the preceding
          sentence, make available for the account of its Applicable Lending
          Office to the Agent at its New York address referred to in Section
          8.02 such Bank's portion of such B Borrowing, in same day funds. Upon
          fulfillment of the applicable conditions set forth in Article III and
          after receipt by the Agent of such funds, the Agent will make such
          funds available to such Borrower at the Agent's aforesaid address.
          Promptly after each B Borrowing the Agent will notify each Bank of the
          amount of the B Borrowing, the Borrower to which such B Borrowing was
          made, the consequent B Reduction and the dates upon which such B
          Reduction commenced and will terminate.

          (b) Each B Borrowing shall be in an aggregate amount of not less than
     $5,000,000 or an integral multiple of $1,000,000 in excess thereof. Each
     Borrower agrees that it will not request a B Borrowing unless, upon the
     making of such B Borrowing, the limitations set forth in the proviso to the
     first sentence of Section 2.16(a) are complied with.

          (c) Within the limits and on the conditions set forth in this Section
     2.16, each Borrower may from time to time borrow under this Section 2.16,
     repay or prepay pursuant to subsection (d) below, and reborrow under this
     Section 2.16, provided that a B Borrowing shall not be made by any Borrower
     within three Business Days of the date of another B Borrowing to such
     Borrower.

          (d) Each Borrower shall repay to the Agent for the account of each
     Bank which has made a B Advance to such Borrower, or each other holder of a
     B Note of such Borrower, on the maturity date of each B Advance made to
     such Borrower (such maturity date being that specified by such Borrower for
     repayment of such B Advance in the


                                       48
<PAGE>

     related Notice of B Borrowing delivered pursuant to subsection (a)(i) above
     and provided in the B Note, if any, evidencing such B Advance) the then
     unpaid principal amount of such B Advance. No Borrower shall have any right
     to prepay any principal amount of any B Advance unless, and then only on
     the terms, specified by such Borrower for such B Advance in the related
     Notice of B Borrowing delivered pursuant to subsection (a)(i) above and set
     forth in the B Note evidencing such B Advance.

          (e) Each Borrower shall pay interest on the unpaid principal amount of
     each B Advance made to such Borrower from the date of such B Advance to the
     date the principal amount of such B Advance is repaid in full, at the rate
     of interest for such B Advance specified by the Bank making such B Advance
     in its notice with respect thereto delivered pursuant to subsection (a)(ii)
     above, payable on the interest payment date or dates specified by such
     Borrower for such B Advance in the related Notice of B Borrowing delivered
     pursuant to subsection (a)(i) above, as provided in the B Note evidencing
     such B Advance.

          (f) The indebtedness of each Borrower resulting from each B Advance
     made to such Borrower as part of a B Borrowing shall, if requested by the
     Bank making such B Advance, be evidenced by a separate B Note of such
     Borrower payable to the order of the Bank making such B Advance.

          (g) The failure of any Bank to make the B Advance to be made by it as
     part of any B Borrowing shall not relieve any other Bank of its obligation,
     if any, hereunder to make its B Advance on the date of such B Borrowing,
     but no Bank shall be responsible for the failure of any other Bank to make
     the B Advance to be made by such other Bank on the date of any B Borrowing.

     Section 2.17. Optional Termination. Notwithstanding anything to the
contrary in this Agreement, if (i) any Person (other than a trustee or other
fiduciary holding securities under an employee benefit plan of TWC or of any
Subsidiary of TWC) or two or more Persons acting in concert (other than any
group of employees of TWC or of any of its Subsidiaries) 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), directly or
indirectly, of securities of TWC (or other securities convertible into such
securities) representing 35% or more of the combined voting power of all
securities of TWC entitled to vote in the election of directors, other than
securities having such power only by reason of the happening of a contingency,
or (ii) during any period of up to 24 consecutive months, commencing before or
after the date of this Agreement, individuals who at the beginning of such
24-month period were directors of TWC or who were elected by individuals who at
the beginning of such period were such directors or by individuals elected in
accordance with this clause (ii) shall cease for any reason (other than as a
result of death, incapacity or normal retirement) to constitute a majority of
the board of directors of TWC, or (iii) any Person (other than TWC or a
Wholly-Owned Subsidiary of TWC) or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a merger or
purchase agreement with a Borrower pursuant to which such Person or Persons
shall have acquired the power to exercise, directly or indirectly, a controlling
influence over the management or policies of any Borrower; then the Agent shall
at the request, or may


                                       49
<PAGE>

with the consent, of the Majority Banks, by notice to the Borrowers, declare all
of the Commitments and the obligation of each Bank to make Advances to be
terminated, whereupon all of the Commitments and each such obligation shall
forthwith terminate, and no Borrower shall have any further right to borrow
hereunder.

     Section 2.18. Extension of Termination Date. By notice given to the Agent
and the Banks, at least thirty days but not more than sixty days before July 1
of any year after 2003, the Borrowers may request the Banks to extend the Stated
Termination Date for an additional year to a date which is an anniversary date
of the Stated Termination Date. Within thirty days after receipt of such
request, each Bank that agrees, in its sole and absolute discretion, to so
extend the Stated Termination Date shall notify the Borrowers and the Agent in
writing that it so agrees, and if all Banks so agree the Stated Termination Date
shall be so extended.

     Section 2.19. Voluntary Conversion of Advances. Any Borrower may on any
Business Day, if no Event of Default then exists as to such Borrower, upon
notice (which shall be irrevocable) given to the Agent not later than 11:00 A.M.
(x) in the case of a proposed Conversion into Eurodollar Rate Advances, on the
third Business Day prior to the date of the proposed Conversion, and (y) in the
case of a proposed Conversion into Base Rate Advances, on the date of the
proposed Conversion, and subject to the provisions of Sections 2.02 and 2.12,
Convert all Advances of one Type comprising the same A Borrowing into Advances
of the other Type; provided that (i) no Conversion of any Eurodollar Rate
Advances shall occur on a day other than the last day of an Interest Period for
such Eurodollar Rate Advances, except as contemplated by Section 2.12, and (ii)
Advances may not be Converted into Eurodollar Rate Advances if the aggregate
unpaid principal amount of the Advances is less than $10,000,000. Each such
notice of a Conversion shall, within the restrictions specified above, specify
(i) the date of such Conversion, (ii) the A Advances to be Converted, and (iii)
if such Conversion is into Eurodollar Rate Advances, the duration of the
Interest Period for each such Advance.

     Section 2.20. Automatic Provisions.

          (a) If any Borrower shall fail to select the duration of any Interest
     Period for Eurodollar Rate Advances in accordance with the provisions
     contained in the definition of "Interest Period" in Section 1.01 and no
     Event of Default shall exist, the Agent will forthwith so notify such
     Borrower and the Banks, and such Advances will automatically, on the last
     day of the then existing Interest Period therefor, continue as Eurodollar
     Rate Advances with an Interest Period of one month. If any Event of Default
     shall exist, such Advances shall convert into Base Rate Advances on the
     last day of the then existing Interest Period.

          (b) On the date on which the aggregate unpaid principal amount of the
     Eurodollar Rate Advances of any Borrower shall be reduced to less than
     $10,000,000, all of such Eurodollar Rate Advances shall automatically
     Convert into Base Rate Advances.


                                       50
<PAGE>

                                   Article III

                                   CONDITIONS

     Section 3.01. Conditions Precedent to Effectiveness. Subject to Section
3.04 below, the amendment and restatement of the Existing Credit Agreement and
the obligation of each Bank to make Advances under this Agreement is subject to
the condition precedent that the Agent shall have received the following, in
form and substance satisfactory to the Agent and (except for the Notes, if any)
in sufficient copies for each Bank:

          (a) Certified copies of the resolutions of the Board of Directors, or
     the Executive Committee thereof, of each Borrower and each of such
     Borrower's Subsidiaries being a party to any L/C Collateral Document
     authorizing the execution of this Agreement, the other Credit Documents to
     which each Borrower or Subsidiary is a party, each Notice of A Borrowing,
     each Notice of B Borrowing, and all other documents, in each case
     evidencing any necessary company action and governmental and other third
     party approvals and consents, if any, with respect to each such Credit
     Document.

          (b) A certificate of the Secretary or an Assistant Secretary of each
     Borrower and each of such Borrower's Subsidiaries being a party to any L/C
     Collateral Document certifying (i) that attached thereto is a complete and
     correct copy of the Certificate of Incorporation and Bylaws, or other
     applicable formation documents, of such Borrower or Subsidiary together
     with any amendments thereto, with a copy of a certificate of the Secretary
     of State of the jurisdiction of incorporation, or organization of such
     Borrower or Subsidiary, dated reasonably near the Effective Date,
     certifying that such Borrower or Subsidiary is duly qualified and in good
     standing in such State, (ii) the absence of any amendments to the
     Certificate of Incorporation and Bylaws of such Borrower or Subsidiary
     since the date of the Secretary of State's certificate referred to in this
     clause (b), (iii) the due incorporation and good standing or valid
     existence of such Borrower or Subsidiary as an entity organized under the
     laws of the jurisdiction of its incorporation or organization, and the
     absence of any proceeding for the dissolution or liquidation of such
     Borrower or Subsidiary, and (iv) the names and true signatures of the
     officers of such Borrower or Subsidiary authorized to sign this Agreement,
     the other Credit Documents, Notices of A Borrowing, Notices of B Borrowing
     and any Notes to be executed by such Borrower and any other documents to be
     delivered hereunder by such Borrower.

          (c) An opinion of William G. von Glahn, General Counsel of TWC,
     substantially in the form of Exhibit C hereto and as to such other matters
     as any Bank through the Agent may reasonably request.

          (d) An opinion of New York counsel to the Borrowers and Guarantors,
     substantially in the form of Exhibits D-1 and D-2 hereto and as to such
     other matters as any Bank through the Agent may reasonably request.


                                       51
<PAGE>

          (e) A duly executed and fully effective amendment and restatement of
     the L/C Agreement and amendment of each of the Progeny Facility documents,
     other than those automatically amended by virtue of the amendment to this
     Agreement, each dated the date of this Agreement.

          (f) A certificate of an officer of each Borrower stating the
     respective ratings by each of S&P and Moody's of the senior unsecured
     long-term debt of such Borrower as in effect on the date of this Agreement.

          (g) A certificate of an officer of each Borrower and each of its
     Subsidiaries being a party to any L/C Collateral Document, dated as of the
     date of execution and delivery by each Borrower of this Agreement (the
     statements made in each such certificate shall be true on and as of such
     date), certifying as to (i) the truth, in all material respects, of the
     representations and warranties contained in this Agreement (in the case of
     each Borrower only) and the Credit Documents as though made on and as of
     the date of the execution and delivery of this Agreement other than any
     such representations or warranties that, by their terms, refer to a
     specific date other than such date, in which case as of such specific date
     and (ii) the absence of any event (x) occurring and continuing after giving
     effect to this Agreement, the Barrett Loan Agreement and the agreements
     referred to in Section 3.01(e) hereof, and assuming the consummation of the
     transactions contemplated thereby, or (y) resulting from the execution and
     delivery of this Agreement and the Credit Documents and the performance of
     such Borrower or such Subsidiary, as applicable, of its obligations
     hereunder or under any other Credit Document, that constitutes an Event of
     Default (other than any Event of Default which may arise as a result of a
     draw or the probability of a draw under a letter of credit).

          (h) Evidence that all agency, trustee, custodial, filing service,
     legal and other fees and disbursements incurred and invoiced the day
     immediately prior to the Effective Date, including all fees of the
     Collateral Trustee, Collateral Agent and the Agent and their respective
     counsel, have been fully paid by the Borrowers.

          (i) A duly executed and effective amendment to the Pledge Agreement,
     Security Agreement, Collateral Trust Agreement, LLC Guaranty, and Midstream
     Guaranty each dated the date of this Agreement.

          (j) A duly executed and fully effective amendment and restatement of
     the Holdings Guaranty.

          (k) TWC shall have paid in full all accrued fees and expenses of the
     Agent (including the accrued fees and expenses of counsel to the Agent and
     local counsel to the Agent)

          (l) Counterparts of this Agreement, duly executed on behalf of each of
     the Borrowers and the Majority Banks.

     For purposes of determining compliance with the conditions specified in
this Section 3.01, each Bank shall be deemed to have (i) consented to, approved,
authorized and


                                       52
<PAGE>

accepted and to be satisfied with each document or other matter required under
this Section 3.01 (provided that each Bank has received access to a copy of each
document set forth in clauses (i) and (j) hereof and the L/C Agreement) and (ii)
authorized the Collateral Agent and the Collateral Trustee to execute the
documents set forth in clauses (i) and (j) hereof, as applicable, unless both
(x) an officer of the Agent responsible for the transactions contemplated by
this Agreement shall have received written notice from such Bank prior to the
making of an initial Advance specifying its objection thereto and (y) such Bank
shall not have accepted any portion of the fees set forth in Section 2.03(a).
The Agent shall give TWC notice when all actions required by Section 3.01 have
been satisfied.

     Section 3.02. Additional Conditions Precedent to Each A Borrowing. The
obligation of each Bank to make an A Advance to a Borrower on the occasion of
any A Borrowing (including the initial A Borrowing) shall be subject to the
further conditions precedent that on the date of such A Borrowing the following
statements shall be true (and each of the giving of the applicable Notice of A
Borrowing and the acceptance by such Borrower of the proceeds of such A
Borrowing shall constitute a representation and warranty by such Borrower that
on the date of such A Borrowing such statements are true):

          (a) The representations and warranties contained in Section 4.01 and
     each of the L/C Collateral Documents pertaining to such Borrower and its
     Subsidiaries are correct on and as of the date of such A Borrowing, before
     and after giving effect to such A Borrowing and to the application of the
     proceeds therefrom, as though made on and as of such date;

          (b) No event has occurred and is continuing, or would result from such
     A Borrowing or from the application of the proceeds therefrom, which
     constitutes an Event of Default or which would constitute an Event of
     Default but for the requirement that notice be given or time elapse or
     both; and

          (c) After giving effect to such A Borrowing and all other Borrowings
     which have been requested on or prior to such date but which have not been
     made prior to such date, the aggregate principal amount of all Advances
     will not exceed the aggregate of the Commitments of the Banks to TWC
     (computed without regard to any B Reduction).

     Section 3.03. Conditions Precedent to Each B Borrowing. The obligation of
each Bank which is to make a B Advance to a Borrower on the occasion of a B
Borrowing (including the initial B Borrowing) to make such B Advance as part of
such B Borrowing is subject to the further conditions precedent that (i) at or
before the time required by paragraph (iii) of Section 2.16(a), the Agent shall
have received the written confirmatory notice of such B Borrowing contemplated
by such paragraph, (ii) on or before the date of such B Borrowing, but prior to
such B Borrowing, if the Bank making any B Advance shall have requested a B Note
pursuant to Section 2.16(a)(ii), the Agent shall have received a B Note executed
by such Borrower payable to the order of such Bank for the B Advances to be made
by such Bank as part of such B Borrowing, in a principal amount equal to the
principal amount of the B Advance to be evidenced thereby and otherwise on such
terms as were agreed to for such B Advance in accordance with Section 2.16, and
(iii) on the date of such B Borrowing the following statements


                                       53
<PAGE>

shall be true (and each of the giving of the applicable Notice of B Borrowing
and the acceptance by such Borrower of the proceeds of such B Borrowing shall
constitute a representation and warranty by such Borrower that on the date of
such B Borrowing such statements are true):

          (a) The representations and warranties contained in Section 4.01 and
     in each of the L/C Collateral Documents pertaining to such Borrower and its
     Subsidiaries are correct on and as of the date of such B Borrowing, before
     and after giving effect to such B Borrowing and to the application of the
     proceeds therefrom, as though made on and as of such date;

          (b) No event has occurred and is continuing, or would result from such
     B Borrowing or from the application of the proceeds therefrom, which
     constitutes an Event of Default or which would constitute an Event of
     Default but for the requirement that notice be given or time elapse or
     both;

          (c) Following the making of such B Borrowing and all other Borrowings
     to be made on the same day to such Borrower under this Agreement, the
     aggregate principal amount of all Advances to such Borrower then
     outstanding will not exceed the aggregate amount of the Commitments to such
     Borrower (computed without regard to any B Reduction);

                  (d) After giving effect to such B Borrowing and all other
         Borrowings which have been requested on or prior to such date but which
         have not been made prior to such date, the aggregate principal amount
         of all Advances will not exceed the aggregate of the Commitments of the
         Banks to TWC (computed without regard to any B Reduction); and

     Section 3.04. Special Condition to Effectiveness of Certain Provisions.
Notwithstanding any contrary term or provision in Section 3.01 or elsewhere in
this Agreement, amendments relating to the release of Collateral to the extent
not permitted in the Existing Agreement without the consent of all Banks shall
be of no force and effect until (a) the Agent shall have received (i) a duly
executed counterpart hereof from each Bank listed on the signature pages hereof
and (ii) a duly executed counterpart of the L/C Agreement from each lender being
a party thereto and (b) all other conditions set forth in Section 3.01 are fully
satisfied.

                                   Article IV

                         REPRESENTATIONS AND WARRANTIES

     Section 4.01. Representations and Warranties of the Borrowers. Each
Borrower represents and warrants as to itself and its Subsidiaries as follows:

          (a) Each Borrower is duly organized or validly formed, validly
     existing and (if applicable) in good standing under the laws of the State
     of Delaware and has all corporate or limited liability company powers and
     all governmental licenses, authorizations, certificates, consents and
     approvals required to carry on its business as now conducted in all
     material respects, except for those licenses, authorizations, certificates,
     consents and approvals the failure to have which could not reasonably be


                                       54
<PAGE>

     expected to have a material adverse effect on the business, assets,
     condition or operation of such Borrower and its Material Subsidiaries taken
     as a whole. Each Material Subsidiary (other than NewGP, if applicable) of
     each Borrower is duly organized or validly formed, validly existing and (if
     applicable) in good standing under the laws of its jurisdiction of
     incorporation or formation, except where the failure to be so organized,
     existing and in good standing could not reasonably be expected to have a
     material adverse effect on the business, assets, condition or operations of
     such Borrower and its Material Subsidiaries (other than NewGP, if
     applicable) taken as a whole. Each Material Subsidiary of a Borrower (other
     than NewGP, if applicable) has all corporate or limited liability company
     powers and all governmental licenses, authorizations, certificates,
     consents and approvals required to carry on its business as now conducted
     in all material respects, except for those licenses, authorizations,
     certificates, consents and approvals the failure to have which could not
     reasonably be expected to have a material adverse effect on the business,
     assets, condition or operation of such Borrower and its Material
     Subsidiaries (other than NewGP, if applicable) taken as a whole.

          (b) After giving effect to this Agreement, the L/C Agreement, the
     Barrett Loan Agreement and the Progeny Facilities and assuming the
     consummation of the transactions contemplated thereby, the execution,
     delivery and performance by each Borrower and the Guarantors of the Credit
     Documents to which it is shown as being a party delivered hereunder and the
     consummation of the transactions contemplated thereby are within such
     Borrower's or such Guarantor's, as the case maybe, corporate or limited
     liability company powers, have been duly authorized by all necessary
     corporate or limited liability company action, do not contravene (i) any
     Borrower's or such Guarantor's, as the case maybe, charter, by-laws or
     formation agreement or (ii) law or any restriction under any material
     agreement binding on or affecting any Borrower or Guarantor (other than any
     default which may arise as a result of a draw or the probability of a draw
     under a letter of credit) and will not result in or require the creation or
     imposition of any Lien prohibited by this Agreement.

          (c) No authorization or approval or other action by, and no notice to
     or filing with, any governmental authority or regulatory body is required
     for the due execution, delivery and performance by each Borrower or
     Guarantor of any Credit Document to which any of them is a party, or the
     consummation of the transactions contemplated thereby.

          (d) Each Credit Document has been duly executed and delivered by each
     Borrower or such Guarantor as the case may be, and is the legal, valid and
     binding obligation of each Borrower or such Guarantor as the case may be,
     enforceable against each Borrower or such Guarantor as the case may be, in
     accordance with its terms, except as such enforceability may be limited by
     any applicable bankruptcy, insolvency, reorganization, moratorium or
     similar law affecting creditors' rights generally and by general principles
     of equity. The A Notes, if any, of each Borrower are, and when executed the
     B Notes, if any, of such Borrower will be, the legal, valid and binding
     obligations of such Borrower enforceable against such Borrower in
     accordance with their respective terms, except as such enforceability may
     be limited by any applicable


                                       55
<PAGE>

     bankruptcy, insolvency, reorganization, moratorium or similar law affecting
     creditors' rights generally and by general principles of equity.

          (e) (i) The Consolidated and Consolidating balance sheets of TWC and
     its Subsidiaries as at December 31, 1999, and the related Consolidated and
     Consolidating statements of income and cash flows of TWC and its
     Subsidiaries for the fiscal year then ended, copies of which have been
     furnished to each Bank, and the Consolidated and Consolidating balance
     sheet of TWC and its Subsidiaries as at March 31, 2000, and the related
     Consolidated and Consolidating statements of income and cash flows of TWC
     and its Subsidiaries for the three months then ended, duly certified by an
     authorized financial officer of TWC, copies of which have been furnished to
     each Bank, fairly present (in the case of such balance sheets as at March
     31, 2000, and such statements of income and cash flows for the three months
     then ended, subject to year-end audit adjustments) the Consolidated and
     Consolidating financial condition of TWC and its Subsidiaries as at such
     dates and the Consolidated and Consolidating results of operations of TWC
     and its Subsidiaries for the year and three-month period, respectively,
     ended on such dates, all in accordance with generally accepted accounting
     principles consistently applied.

               (ii) The Consolidating balance sheets of TWC and its Subsidiaries
          as at December 31, 1999, and March 31, 2000, referred to in Section
          4.01(e)(i), and the related Consolidating statements of income and
          cash flows of TWC and its Subsidiaries for the fiscal year and three
          months, respectively, then ended referred to in Section 4.01(e)(i), to
          the extent such balance sheets and statements pertain to NWP, fairly
          present (subject, in the case of such balance sheet as at March 31,
          2000 and such statements of income and cash flows for the three months
          then ended, to year-end audit adjustments) the Consolidated financial
          condition of NWP and its Subsidiaries as at such dates and the
          Consolidated results of operations of NWP and its Subsidiaries for the
          year and three-month period, respectively, ended on such dates, all in
          accordance with generally accepted accounting principles consistently
          applied.

               (iii) [Intentionally Omitted.]

               (iv) The Consolidated balance sheet of TGPL and its Subsidiaries
          as at December 31, 1999, and the related Consolidated statement of
          income and cash flows of TGPL and its Subsidiaries for the fiscal year
          then ended, copies of which have been furnished to each Bank, and the
          Consolidated balance sheet of TGPL and its Subsidiaries as at March
          31, 2000, and the related Consolidated statement of income and cash
          flows of TGPL and its Subsidiaries for the three months then ended,
          duly certified by an authorized financial officer of TGPL, copies of
          which have been furnished to each Bank, fairly present, subject, in
          the case of such balance sheet as at March 31, 2000, and such
          statement of income and cash flows for the three months then ended, to
          year-end audit adjustments, the Consolidated financial condition of
          TGPL and its Subsidiaries as at such dates and the Consolidated
          results of operations of TGPL and its Subsidiaries for the year and


                                       56
<PAGE>

          three-month period, respectively, ended on such dates, all in
          accordance with generally accepted accounting principles consistently
          applied.

               (v) The Consolidated balance sheet of TGT and its Subsidiaries as
          at December 31, 1999, and the related Consolidated statement of income
          and cash flows of TGT and its Subsidiaries for the fiscal year then
          ended, copies of which have been furnished to each Bank, and the
          Consolidated balance sheet of TGT and its Subsidiaries as at March 31,
          2000, and the related Consolidated statement of income and cash flows
          of TGT and its Subsidiaries for the three months then ended, duly
          certified by an authorized financial officer of TGT, copies of which
          have been furnished to each Bank, fairly present, subject, in the case
          of such balance sheet as at March 31, 2000, and such statement of
          income and cash flows for the three months then ended, to year-end
          audit adjustments, the Consolidated financial condition of TGT and its
          Subsidiaries as at such dates and the Consolidated results of
          operations of TGT and its Subsidiaries for the year and three-month
          period, respectively, ended on such dates, all in accordance with
          generally accepted accounting principles consistently applied.

          (f) Except as set forth on Schedule VIII or in the Public Filings or
     as otherwise disclosed in writing by a Borrower to the Banks and the Agent
     after the date hereof and approved by the Majority Banks, there is, as to
     each Borrower, no pending or, to the knowledge of such Borrower, threatened
     action or proceeding affecting such Borrower or any Material Subsidiary
     (other than NewGP, if applicable) of such Borrower before any court,
     governmental agency or arbitrator, which could reasonably be expected to
     materially and adversely affect the financial condition or operations of
     such Borrower or Material Subsidiary and its respective Subsidiaries taken
     as a whole or which purports to affect the legality, validity, binding
     effect or enforceability of this Agreement or any Note.

          (g) No proceeds of any Advance will be used for any purpose or in any
     manner contrary to the provisions of Section 5.02(k).

          (h) No Borrower is engaged in the business of extending credit for the
     purpose of purchasing or carrying margin stock (within the meaning of
     Regulation U issued by the Board of Governors of the Federal Reserve
     System), and no proceeds of any Advance will be used to purchase or carry
     any such margin stock (other than purchases of common stock expressly
     permitted by Section 5.02(k)) or to extend credit to others for the purpose
     of purchasing or carrying any such margin stock. Following the application
     of the proceeds of each Advance, not more than 25% of the value of the
     assets of any Borrower will be represented by such margin stock and not
     more than 25% of the value of the assets of any Borrower and its
     Subsidiaries (or, in the case of TWC, the Borrower, its Subsidiaries and
     the WCG Subsidiaries) will be represented by such margin stock.


                                       57
<PAGE>

          (i) No Borrower is an "investment company" or a company "controlled"
     by an "investment company" within the meaning of the Investment Company Act
     of 1940, as amended.

          (j) No Termination Event has occurred or is reasonably expected to
     occur with respect to any Plan that could reasonably be expected to have a
     material adverse effect on any of the Borrowers or on any Material
     Subsidiary (other than NewGP, if applicable) of a Borrower (including, in
     the case of TWC, any material WCG Subsidiaries). No Borrower nor any ERISA
     Affiliate of any Borrower has received any notification that any
     Multiemployer Plan is in reorganization or has been terminated, within the
     meaning of Title IV of ERISA, and no Borrower is aware of any reason to
     expect that any Multiemployer Plan is to be in reorganization or to be
     terminated within the meaning of Title IV of ERISA that would have any
     material adverse effect on any Borrower, any Material Subsidiary (other
     than NewGP, if applicable) of a Borrower (including, in the case of TWC,
     any material WCG Subsidiaries) or any ERISA Affiliate of a Borrower.

          (k) As of the date of this Agreement, the United States federal income
     tax returns of each Borrower and the Material Subsidiaries (other than
     NewGP, if applicable) of each Borrower have been examined through the
     fiscal year ended December 31, 1995. Each Borrower and the Subsidiaries of
     each Borrower have filed all United States federal income tax returns and
     all other material domestic tax returns which are required to be filed by
     them and have paid, or provided for the payment before the same become
     delinquent of, all taxes due pursuant to such returns or pursuant to any
     assessment received by any Borrower or any such Subsidiary, other than
     those taxes contested in good faith by appropriate proceedings. The
     charges, accruals and reserves on the books of each Borrower and the
     Material Subsidiaries of each Borrower in respect of taxes are adequate.

          (l) No Borrower is a "holding company," or a "subsidiary company" of a
     "holding company," or an "affiliate" of a "holding company" or of a
     "subsidiary company" of a "holding company," or a "public utility" within
     the meaning of the Public Utility Holding Company Act of 1935, as amended.

          (m) Except as set forth in the Public Filings or as otherwise
     disclosed in writing by any Borrower to the Banks and the Agent after the
     date hereof and approved by the Majority Banks, each Borrower and its
     respective Material Subsidiaries (other than NewGP, if applicable) are in
     compliance in all material respects with all Environmental Protection
     Statutes to the extent material to the operations or the Consolidated
     financial condition of each Borrower and its Consolidated Subsidiaries
     taken as a whole. Except as set forth in the Public Filings or as otherwise
     disclosed in writing by any Borrower to the Banks and the Agent after the
     date hereof and approved by the Majority Banks, the aggregate contingent
     and non-contingent liabilities of each Borrower and its Consolidated
     Subsidiaries (other than those reserved for in accordance with generally
     accepted accounting principles and set forth in the financial statements
     regarding any such Borrower referred to in Section 4.01(e) and delivered to
     each Bank and excluding


                                       58
<PAGE>

     liabilities to the extent covered by insurance if the insurer has confirmed
     that such insurance covers such liabilities or which such Borrower
     reasonably expects to recover from ratepayers) which are reasonably
     expected to arise in connection with (i) the requirements of Environmental
     Protection Statutes or (ii) any obligation or liability to any Person in
     connection with any Environmental matters (including any release or
     threatened release (as such terms are defined in the Comprehensive
     Environmental Response, Compensation and Liability Act of 1980) of any
     Hazardous Waste, Hazardous Substance, other waste, petroleum or petroleum
     products into the Environment) could not reasonably be expected to have a
     material adverse effect on the business, assets, conditions or operations
     of any Borrower and its respective Consolidated Subsidiaries, taken as a
     whole. Each Borrower and its respective Material Subsidiaries (other than
     NewGP, if applicable) holds, or has submitted a good faith application for
     all Environmental Permits (none of which have been terminated or denied)
     required for any of its current operations or for any property owned,
     leased, or otherwise operated by it; and is, and within the period of all
     applicable statutes of limitation has been, in compliance with all of its
     Environmental Permits.

          (n) Other than the Permitted Liens, each Borrower and its Subject
     Subsidiaries has good, valid and indefeasible title to, or a valid
     leasehold interest in, its respective property and to all property
     reflected by its respective balance sheet referenced in clause (e) above as
     being owned by such Borrower (except property sold or otherwise disposed of
     by a Borrower or its Subject Subsidiaries in conformity with the terms and
     conditions of this Agreement). TWC and each of the Midstream Subsidiaries
     have sufficient title to all Midstream Assets they collectively own and
     operate as is necessary for the conduct of the Midstream Business after the
     date hereof in accordance with the ownership and operation of the Midstream
     Business in the twelve months prior to the date hereof. There exists, or
     following completion of the post-closing items more fully described in
     Schedule XIII, there will exist an Acceptable Security Interest in all
     Collateral other than the Excluded Collateral.

          (o) The Persons listed on Schedule XIV are all of the Midstream
     Subsidiaries and own, lease or hold all Midstream Assets necessary and/or
     appropriate for the operation and carrying on of the Midstream Business
     associated with the Midstream Assets as conducted during the 12 months
     preceding the date hereof.

          (p) Neither TWC nor any Midstream Subsidiary is in default under or
     with respect to any of its Contractual Obligations in any respect which
     could reasonably be expected to have a material adverse effect on the
     Midstream Business of TWC or any Midstream Subsidiary. No Default or Event
     of Default has occurred and is continuing.

          (q) Except as would not have a material adverse effect on the conduct
     of the Midstream Business conducted by the Midstream Subsidiaries, the
     various gathering systems which comprise part of the Midstream Assets are
     covered by recorded fee deeds, right of ways, easements, leases,
     servitudes, permits, licenses, or other instruments in favor of the
     Midstream Subsidiaries (or their predecessors in title) and their
     successors and assigns, which instruments establish a contiguous right of
     way for the respective


                                       59
<PAGE>

     gathering systems and grant the right to construct, operate, and maintain
     the respective gathering system in, over, under, and across the land
     covered thereby; provided, that certain licenses and permits from
     railroads, utilities, owners of meter sites, and from the various state and
     local Governmental Authorities and rights granted by Hydrocarbon producers
     on their respective properties may not be recorded. The pipelines
     comprising the various gathering systems which are part of the Midstream
     Assets of the Midstream Subsidiaries are located within the confines of
     contiguous rights of way and do not encroach upon any adjoining property in
     any material respects. The rights of ingress and egress held by the
     Midstream Subsidiaries with respect to such gathering systems allow the
     applicable Midstream Subsidiaries to inspect, operate, repair, and maintain
     such gathering systems in a normal manner consistent with past practices.

          (r) After giving effect to this Agreement and the concurrent
     amendments to various financing arrangements and agreements of each
     Borrower and its Subsidiaries, each Borrower, individually and together
     with its Subsidiaries, is Solvent.

          (s) No Borrower nor any Midstream Subsidiary is in default under or
     with respect to any of its margin requirements and capital assurance
     requirements in any respect which could reasonably be expected to have a
     material adverse effect on the Midstream Business of TWC, or any Midstream
     Subsidiary. No Default or Event of Default has occurred and is continuing.

                                    Article V

                           COVENANTS OF THE BORROWERS

     Section 5.01. Affirmative Covenants. So long as any Note shall remain
unpaid, any Advance shall remain outstanding or any Bank shall have any
Commitment to any Borrower hereunder, each Borrower will, unless the Majority
Banks shall otherwise consent in writing:

          (a) Compliance with Laws, Etc. Comply, and cause each of its Subject
     Subsidiaries to comply, in all material respects with all applicable laws,
     rules, regulations and orders (except where failure to comply could not
     reasonably be expected to have a material adverse effect on the business,
     assets, condition or operations of such Borrower and its Subject
     Subsidiaries taken as a whole), such compliance to include, without
     limitation, the payment and discharge before the same become delinquent of
     all taxes, assessments and governmental charges or levies imposed upon it
     or any of its Subject Subsidiaries or upon any of its property or any
     property of any of its Subject Subsidiaries, and all lawful claims which,
     if unpaid, might become a Lien upon any property of it or any of its
     Subject Subsidiaries; provided that no Borrower nor any Subject Subsidiary
     of a Borrower shall be required to pay any such tax, assessment, charge,
     levy or claim which is being contested in good faith and by proper
     proceedings and with respect to which reserves in conformity with generally
     accepted accounting principles, if required by such principles, have been
     provided on the books of such Borrower or such Subject Subsidiary, as the
     case may be.


                                       60
<PAGE>

          (b) Reporting Requirements. Furnish to each of the Banks:

               (i) as soon as possible and in any event within five days after
          the occurrence of each Event of Default or each event which, with the
          giving of notice or lapse of time or both, would constitute an Event
          of Default, continuing on the date of such statement, a statement of
          an authorized financial officer of such Borrower setting forth the
          details of such Event of Default or event and the actions, if any,
          which such Borrower has taken and proposes to take with respect
          thereto;

               (ii) as soon as available and in any event not later than 60 days
          after the end of each of the first three Fiscal Quarters of each
          Fiscal Year of such Borrower, (1) the unaudited Consolidated balance
          sheet of such Borrower and its Consolidated Subsidiaries as of the end
          of such Fiscal Quarters and the unaudited Consolidated statements of
          income and cash flows of such Borrower and its Consolidated
          Subsidiaries for the period commencing at the end of the previous year
          and ending with the end of such quarter, all in reasonable detail and
          duly certified (subject to year-end audit adjustments and the lack of
          footnotes) by an authorized financial officer of such Borrower as
          having been prepared in accordance with generally accepted accounting
          principles; provided that, if any financial statement referred to in
          this clause (ii) of Section 5.01(b) is readily available on-line
          through EDGAR as of the date on which such financial statement is
          required to be delivered hereunder, such Borrower shall not be
          obligated to furnish copies of such financial statement; and (2) a
          certificate of an authorized financial officer of such Borrower (a)
          stating that he has no knowledge that a Default or Event of Default
          has occurred and is continuing or, if a Default or Event of Default
          has occurred and is continuing, a statement as to the nature thereof
          and the action, if any, which such Borrower proposes to take with
          respect thereto, and (b) showing in detail the calculation supporting
          such statement in respect of Sections 5.02(b) and 5.02(m);

               (iii) as soon as available and in any event not later than 105
          days after the end of each Fiscal Year of such Borrower, (1) a copy of
          the annual audited report for such year for such Borrower and its
          Consolidated Subsidiaries, including therein Consolidated balance
          sheet of such Borrower and its Consolidated Subsidiaries as of the end
          of such Fiscal Year and Consolidated statements of income and cash
          flows of such Borrower and its Consolidated Subsidiaries for such
          Fiscal Year, in each case prepared in accordance with generally
          accepted accounting principles and reported on by Ernst & Young, LLP
          or such other independent certified public accountants of recognized
          standing acceptable to the Majority Banks; provided that if any
          financial statement referred to in this clause (iii) of Section
          5.01(b) is readily available on-line through EDGAR as of the date on
          which such financial statement is required to be delivered hereunder,
          such Borrower shall not be obligated to furnish copies of such
          financial statement; and (2) a letter of such accounting firm to the
          Banks (a) stating that, in the course of the regular audit of the
          business of such Borrower


                                       61
<PAGE>

          and its Consolidated Subsidiaries, which audit was conducted by such
          accounting firm in accordance with generally accepted auditing
          standards, such accounting firm has obtained no knowledge that a
          Default or Event of Default has occurred and is continuing, or if, in
          the opinion of such accounting firm, a Default or Event of Default has
          occurred and is continuing, a statement as to the nature thereof, and
          (b) showing in detail the calculations supporting such statement in
          respect of Sections 5.02(b) and 5.20(m), (which letter may
          nevertheless be limited in form, scope and substance to the extent
          required by applicable accounting rules or guidelines in effect from
          time to time);

               (iv) such other information respecting the business or
          properties, or the condition or operations, financial or otherwise, of
          such Borrower or any of its Material Subsidiaries as any Bank through
          the Agent may from time to time reasonably request;

               (v) promptly after the sending or filing thereof, copies of all
          proxy material, reports and other information which such Borrower
          sends to any of its security holders, and copies of all final reports
          and final registration statements which such Borrower or any Material
          Subsidiary of such Borrower files with the Securities and Exchange
          Commission or any national securities exchange; provided that, if such
          proxy materials and reports, registration statements and other
          information are readily available on-line through EDGAR, such Borrower
          or Material Subsidiary shall not be obligated to furnish copies
          thereof;

               (vi) as soon as possible and in any event within 30 Business Days
          after such Borrower or any ERISA Affiliate knows or has reason to know
          (A) that any Termination Event described in clause (i) of the
          definition of Termination Event with respect to any Plan has occurred
          that could have a material adverse effect on such Borrower or any
          Material Subsidiary of such Borrower or (B) that any other Termination
          Event with respect to any Plan has occurred or is reasonably expected
          to occur that could have a material adverse effect on such Borrower or
          any Material Subsidiary of such Borrower, a statement of the chief
          financial officer or chief accounting officer of such Borrower
          describing such Termination Event and the action, if any, which such
          Borrower proposes to take with respect thereto;

               (vii) promptly and in any event within 25 Business Days after
          receipt thereof by such Borrower or any ERISA Affiliate of such
          Borrower, copies of each notice received by such Borrower or any ERISA
          Affiliate of such Borrower from the PBGC stating its intention to
          terminate any Plan or to have a trustee appointed to administer any
          Plan;

               (viii) within 30 days following request therefor by any Bank,
          copies of each Schedule B (Actuarial Information) to each annual
          report (Form 5500 Series) of such Borrower or any ERISA Affiliate of
          such Borrower with respect to each Plan;


                                       62
<PAGE>

               (ix) promptly and in any event within 25 Business Days after
          receipt thereof by such Borrower or any ERISA Affiliate of such
          Borrower from the sponsor of a Multiemployer Plan, a copy of each
          notice received by such Borrower or any ERISA Affiliate of such
          Borrower concerning (A) the imposition of a Withdrawal Liability by a
          Multiemployer Plan, (B) the determination that a Multiemployer Plan
          is, or is expected to be, in reorganization within the meaning of
          Title IV of ERISA, (C) the termination of a Multiemployer Plan within
          the meaning of Title IV of ERISA, or (D) the amount of liability
          incurred, or expected to be incurred, by such Borrower or any ERISA
          Affiliate of such Borrower in connection with any event described in
          clause (A), (B) or (C) above that, in each case, could have a material
          adverse effect on such Borrower or any ERISA Affiliate of such
          Borrower;

               (x) not more than 60 days (or 105 days in the case of the last
          fiscal quarter of a fiscal year of such Borrower) after the end of
          each fiscal quarter of such Borrower, a certificate of an authorized
          financial officer of such Borrower stating the respective ratings, if
          any, by each of S&P and Moody's of the senior unsecured long-term debt
          of such Borrower as of the last day of such quarter;

               (xi) promptly after any withdrawal or termination of any letter
          of credit, guaranty, insurance or other credit enhancement referred to
          in the second to last sentence of Section 1.05 or any change in the
          indicated rating set forth therein or any change in, or issuance,
          withdrawal or termination of, the rating of any senior unsecured
          long-term debt of such Borrower by S&P or Moody's, notice thereof; and

               (xii) promptly after any officer of such Borrower obtains
          knowledge thereof, notice of (1) any material violation of,
          noncompliance with, or remedial obligations under, any Environmental
          Protection Statute or notification of such violation or noncompliance
          received from any Governmental Authority, and (2) any material release
          or threatened material release of Hazardous Substance or Hazardous
          Waste affecting any property owned, leased or operated by such
          Borrower or any Subsidiary of such Borrower that such Borrower or such
          Subsidiary is compelled by the requirements of any Environmental
          Protection Statute to report to any governmental agency, department,
          board or other instrumentality.

          (c) Maintenance of Insurance. Maintain, and cause each of its Material
     Subsidiaries (other than NewGP, if applicable) to maintain, insurance with
     responsible and reputable insurance companies or associations in such
     amounts and covering such risks as is usually carried by companies engaged
     in similar businesses and owning similar properties in the same general
     areas in which such Borrower or such Material Subsidiaries operate,
     provided that such Borrower or any of its Subsidiaries may self-insure to
     the extent and in the manner normal for companies of like size, type and
     financial condition.


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<PAGE>

          (d) Preservation of Corporate Existence, Etc. Preserve and maintain,
     and cause each of its Subject Subsidiaries (other than the WCG Senior Notes
     Issuer) to preserve and maintain, its corporate existence, rights,
     franchises and privileges in the jurisdiction of its incorporation, and
     qualify and remain qualified, and cause each Subject Subsidiary to qualify
     and remain qualified, as a foreign corporation in each jurisdiction in
     which qualification is necessary or desirable in view of its business and
     operations or the ownership of its properties, except (i) in the case of
     any Subject Subsidiary of such Borrower, where the failure of such Subject
     Subsidiary to so preserve, maintain, qualify and remain qualified could not
     reasonably be expected to have a material adverse effect on the business,
     assets, condition or operations of such Borrower and its Subject
     Subsidiaries taken as a whole; (ii) in the case of such Borrower, where the
     failure of such Borrower to preserve and maintain such rights, franchises
     and privileges and to so qualify and remain qualified could not reasonably
     be expected to have a material adverse effect on the business, assets,
     condition or operations of such Borrower and its Subject Subsidiaries taken
     as a whole; (iii) such Borrower and its Subject Subsidiaries may consummate
     any merger or consolidation permitted pursuant to Section 5.02(c); (iv) any
     Borrower and any of its Subject Subsidiaries may be converted into a
     limited liability company by statutory election; provided that any such
     conversion of a Borrower shall not affect its liabilities and obligations
     to the Banks pursuant to this Agreement and (v) Permitted Dispositions and
     other dispositions permitted hereunder.

          (e) Acceptable Security Interest. Cause an Acceptable Security
     Interest to exist at all times in all Collateral, except as to the Excluded
     Collateral and as otherwise contemplated by Section 5.01(g).
     Notwithstanding the foregoing, if TWC and its Subsidiaries, as applicable,
     have not entered into and duly executed a purchase and sale agreement (the
     "SALE AGREEMENT") for the Refineries on or before December 31, 2002, with
     an agreed closing date of no later than March 31, 2003, then TWC shall
     grant an Acceptable Security Interest over any part of the Refineries to
     the extent owned by TWC or any of its Subsidiaries within 15 Business Days
     of the earlier of (i) December 31, 2002, if the Sale Agreement in
     connection with such part of the Refineries has not been executed by
     December 31, 2002, and (ii) March 31, 2003, if the sale in connection with
     such part of the Refineries has not been fully and duly consummated and
     closed by March 31, 2003, and all filing fees, expenses, mortgage taxes and
     any other costs and expenses of the Collateral Agent or Collateral Trustee
     incurred in connection therewith shall be payable by TWC on demand.

          (f) Further Assurances. At any time and from time to time, such
     Borrower shall, at its expense, promptly execute and deliver to the
     Collateral Trustee and/or the Collateral Agent such further instruments and
     documents, and take such further action (including, without limitation,
     with respect to the granting of an Acceptable Security Interest, on any
     personal or real property of TWC, any Restricted Midstream Subsidiary
     which, on the date of this Agreement, is subject to any contractual
     restriction prohibiting the granting of such a Lien on such property, if
     such contractual restriction shall terminate prior to the Termination
     Date), as the Majority Banks may from time to time reasonably request, in
     order to further carry out the intent and purpose of the Credit Documents
     and to establish and protect the rights, interests and remedies created, or


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<PAGE>

     intended to be created, in favor of the Collateral Trustee, Collateral
     Agent or any of the Banks, including the execution, delivery, recordation
     and filing of security agreements, financing statements and continuation
     statements under the law of any applicable jurisdiction and mortgages and
     deeds of trust necessary to grant an Acceptable Security Interest on all
     Collateral (other than any item of Collateral included in the definition of
     "Excluded Collateral" and subject to a contractual restriction prohibiting
     the granting of a Lien hereunder which contractual restriction has not
     terminated) of such Borrower and its Subsidiaries whether such Collateral
     is now owned, leased, possessed by license or any other means of acquiring
     a possessory interest or hereafter acquired or possessed (each such
     mortgage or deed of trust being an "Additional Mortgage"); provided,
     however, that neither NewGP, nor MLP, nor their respective Subsidiaries
     shall be required to grant a Lien on any of their property.

          (g) Post-Closing Requirements. On or before the dates more fully set
     forth in Schedule XIII hereto, the Borrowers shall satisfy, or shall cause
     satisfaction, of the items more fully set forth in such Schedule XIII.

          (h) Subsidiaries. (i) Give the Agent thirty days prior written notice
     of the creation or acquisition of any Subsidiary (other than (w) a Project
     Financing Subsidiary, (x) NewGP, (y) any Subsidiary of either NewGP or Apco
     Argentina, Inc., or (z) the WCG Senior Notes Issuer) and (ii) concurrently
     with the creation or acquisition of any such Subsidiary, cause such
     Subsidiary (other than (w) a Project Financing Subsidiary, (x) NewGP, (y)
     any Subsidiary of either MLP or NewGP, or (z) the WCG Senior Notes Issuer)
     to provide to the Collateral Agent a Security Agreement granting an
     Acceptable Security Interest in the Equity Interests of such Subsidiary for
     the benefit of the Collateral Trustee, appropriate legal opinions and, if
     such Subsidiary owns any real property, a Mortgage covering such real
     property, all of which shall be in the form and substance satisfactory to
     the Collateral Agent; provided, however, that the requirements set forth in
     this clause (ii) shall not apply to any Subsidiary of each Borrower newly
     created solely in connection with Permitted Dispositions or any sales and
     dispositions permitted by 5.02(l) so long as the Permitted Dispositions or
     other sales or dispositions are consummated within sixty (60) days of the
     creation of such Subsidiary; provided, further, that if such Permitted
     Disposition or other sale or disposition is not consummated within such
     sixty (60) day period, the requirements set forth in clause (ii) above
     shall apply with respect to such Subsidiary on the Business Day immediately
     following the end of such sixty (60) day period.

          (i) Bond Offerings. Cause the net proceeds from the TGPL Bond Offering
     to be maintained in a separate, segregated account in the name of TGPL to
     be used solely as set forth in the offering documents for the TGPL Bond
     Offering.

          (j) Midstream Subsidiaries. Cause the representation set forth in
     Section 4.01(o) to be true at all times; provided that, for purposes of
     this clause (j), Schedule XIV shall be deemed to be modified from time to
     time to reflect the (x) divestiture of Midstream Subsidiaries and (y)
     formation of new Midstream Subsidiaries, in each case to


                                       65
<PAGE>

     the extent such divestiture or formation has been made in accordance with
     the terms of this Agreement.

          (k) Cash Deposits. Maintain all or substantially all of its and its
     Subject Subsidiaries' cash deposits with one or more of the Banks party to
     this Agreement, other than any cash deposits held in local operational
     accounts or any international accounts.

          (l) Barrett Liquidity Reserve. Cause RMT to at all times maintain the
     "Borrower Liquidity Reserve" (as defined in the Barrett Loan Agreement).

          (m) Replacement of Legacy L/C with Letter of Credit. TWC shall cause
     the issuance of a letter of credit to replace a Legacy L/C to the extent
     the replacement of such Legacy L/C shall be necessary to prevent the
     occurrence of a default in relation to, and draw on, such Legacy L/C.

     Section 5.02. Negative Covenants. So long as any Note shall remain unpaid,
any Advance shall remain outstanding or any Bank shall have any Commitment to
any Borrower hereunder, no Borrower will, without the written consent of the
Majority Banks:

          (a) Liens, Etc. Create, assume, incur or suffer to exist, or permit
     any of its Subject Subsidiaries to create, assume, incur or suffer to
     exist, any Lien on or in respect of any of its property, whether now owned
     or hereafter acquired, or assign or otherwise convey, or permit any such
     Subject Subsidiary to assign or otherwise convey, any right to receive
     income, in each case to secure or provide for the payment of any Debt,
     trade payable or other obligation or liability of any Person (other than
     obligations or liabilities that are (i) neither Debt nor trade payables,
     (ii) incurred, and are owed to trading counterparties, in the ordinary
     course of the trading business of the Borrowers or any of their Subject
     Subsidiaries, (iii) secured only by cash, short-term investments or a
     Letter of Credit and (iv) permitted by Section 5.02(o)); provided, however,
     that, notwithstanding the foregoing, (1) the Borrowers or any of their
     Subject Subsidiaries may create, incur, assume or suffer to exist Permitted
     Liens and (2) RMT and RMT LLC may create, incur, assume or suffer to exist
     any Lien created pursuant to the Barrett Loan Agreement.

          (b) Debt.

               (i) In the case of TWC, permit the ratio of (A) the aggregate
          amount of Consolidated Debt of TWC and its Consolidated Subsidiaries
          to (B) the sum of the Consolidated Net Worth of TWC plus the aggregate
          amount of Consolidated Debt of TWC and its Consolidated Subsidiaries
          to exceed at any time (x) on or before December 30, 2002, 0.70 to
          1.00, (y) after December 30, 2002 and on or before March 30, 2003,
          0.68 to 1.00 and (z) after March 30, 2003, 0.65 to 1.00; and

               (ii) In the case of any Borrower (other than TWC), permit the
          ratio of (A) the aggregate amount of Consolidated Debt of such
          Borrower and its Subsidiaries on a Consolidated basis, to (B) the sum
          of the Consolidated Net


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<PAGE>

          Worth of such Borrower plus the aggregate amount of Consolidated Debt
          of such Borrower and its Subsidiaries on a Consolidated basis to
          exceed at any time 0.55 to 1.00.

          (c) Merger and Sale of Assets. Merge or consolidate with or into any
     other Person, or sell, lease or otherwise transfer a material part of its
     assets, or permit any of their Major Subsidiaries (other than Apco
     Argentina, Inc. and its Subsidiaries, and New GP, if applicable) to merge
     or consolidate with or into any other Person, or sell, lease or otherwise
     transfer a material part of such Major Subsidiary's assets, except that
     this Section 5.02(c) shall not prohibit any sale or transfer permitted by
     Section 5.02 (l), (f), (o) or any Permitted Disposition.

          (d) Agreements to Restrict Certain Transfers. Enter into or suffer to
     exist, or permit any of its Subject Subsidiaries to enter into or suffer to
     exist, any consensual encumbrance or consensual restriction (except under
     governmental regulations) on its ability or the ability of any of its
     Subject Subsidiaries (i) to pay, directly or indirectly, dividends or make
     any other distributions in respect of its capital stock or pay any Debt or
     other obligation owed to a Borrower or to any of its Subject Subsidiaries;
     or (ii) to make loans or advances to a Borrower or any Subject Subsidiary
     thereof, except, as to (i) and (ii) above, (1) encumbrances and
     restrictions on any Subsidiary that is not a Material Subsidiary, (2) those
     encumbrances and restrictions existing on July 31, 2002, (3) other
     customary encumbrances and restrictions now or hereafter existing of a
     Borrower or any Subsidiary thereof entered into in the ordinary course of
     business that are not more restrictive in any material respect than the
     encumbrances and restrictions with respect to a Borrower or its
     Subsidiaries existing on July 31, 2002, (4) encumbrances or restrictions on
     any Subsidiary that is obligated to pay Non-Recourse Debt arising in
     connection with such Non-Recourse Debt, (5) encumbrances and restrictions
     on Apco Argentina, Inc. or its Subsidiaries and (6) encumbrances and
     restrictions on any Subsidiary pursuant to the Barrett Loan Agreement.

          (e) Loans and Advances; Investments. (i) Make or permit to remain
     outstanding, or allow any of its Subject Subsidiaries to make or permit to
     remain outstanding, any loan or advance to, or own, purchase or acquire any
     obligations or debt or Equity Interests of, any WCG Subsidiary, except that
     a Borrower and its Subject Subsidiaries may (1) permit to remain
     outstanding, and to replace or refinance, loans and advances and other
     financing arrangements to, or Equity Interest in, a WCG Subsidiary existing
     or owned (in the case of such Equity Interests) as of July 31, 2002 and
     listed on Exhibit E hereof, but no such replacement or refinancing shall
     exceed the amount of such loans, advances or other amounts outstanding
     immediately prior to such replacement or refinancing, (2) pursuant to the
     WCG Unwind Transaction, acquire and own the promissory notes referred to in
     clause (ii) of the definition herein of WCG Unwind Transaction, (3) receive
     any distribution from WCG or any Subsidiary thereof in connection with the
     bankruptcy proceedings of WCG or any Subsidiary thereof and (4) purchase
     WCG Note Trust Bonds in accordance with Section 5.02(o). Except for those
     investments permitted in subsections (1), (2) and (3) above, no Borrower
     shall, and no Borrower shall permit any of its Subject Subsidiaries to,
     acquire or otherwise invest in


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<PAGE>

     Equity Interests in, or make any loan or advance to, a WCG Subsidiary; and
     (ii) to the extent not expressly permitted by the terms of this Agreement,
     (x) amend or modify in any manner the Barrett Loans or the Barrett Loan
     Agreement on terms or conditions which would (1) increase the collateral
     therefor to include assets not owned by Barrett on the date hereof except
     for assets acquired hereafter by Barrett in the ordinary course of business
     as presently conducted by Barrett, (2) shorten the maturity of the Barrett
     Loans or (3) add any additional obligors with respect thereto or (y)
     replace or refinance the Barrett Loans unless the Board of Directors of TWC
     shall determine by resolution that such replacement or refinancing is on
     the best terms reasonably available to TWC or Barrett at such time.

          (f) Maintenance of Ownership of Certain Subsidiaries. Sell, issue or
     otherwise dispose of, or create, assume, incur or suffer to exist any Lien
     on or in respect of, or permit any of its Subsidiaries to sell, issue or
     otherwise dispose of or create, assume, incur or suffer to exist any Lien
     on or in respect of, any Equity Interests or any direct or indirect
     interest in any Equity Interests in any of its Material Subsidiaries (other
     than NewGP, if applicable, the Refineries, MAPL, Seminole and their
     respective Subsidiaries and the Persons or assets referenced on Schedule
     VII); provided, however, that this Section 5.02(f) shall not prohibit (i)
     Permitted Liens, (ii) the sale or other disposition of the Equity Interests
     in any Subsidiary of a Borrower to the Borrower or any Wholly-Owned
     Subsidiary of a Borrower if, but only if, (x) there shall not exist or
     result a Default or Event of Default and (y) in the case of each sale or
     other disposition referred to in this proviso involving such Borrower or
     any of its Subsidiaries, such sale or other disposition could not
     reasonably be expected to impair materially the ability of such Borrower to
     perform its obligations hereunder and under any other Credit Document and
     such Borrower shall continue to exist, (iii) any Subsidiary from selling or
     otherwise disposing of any direct or indirect Equity Interests in any
     Subsidiary (other than TGPL, TGT, or NWP) of a Borrower, (iv) any RMT Asset
     Disposition, (v) the sale or other disposition of the Equity Interests in
     any Subsidiary of TWC pursuant to, and in accordance with the Barrett Loan
     Agreement and (vi) any Permitted Disposition; provided that, except with
     respect to any Permitted Disposition, or any RMT Asset Disposition, after
     giving effect to any such sale or other disposition of any Equity Interests
     owned directly or indirectly by a Major Subsidiary, such Subsidiary
     continues to be a Major Subsidiary. Nothing herein shall be construed to
     permit the Borrower or any of its Subject Subsidiaries to purchase shares,
     any interest in shares or any ownership interest in a WCG Subsidiary except
     as permitted by Section 5.02(e).

          (g) Compliance with ERISA. (i) Terminate, or permit any ERISA
     Affiliate of such Borrower to terminate, any Plan so as to result in any
     material liability of such Borrower or any Material Subsidiary (other than
     NewGP, if applicable) of such Borrower (including, in the case of TWC, any
     material WCG Subsidiary) or any such ERISA Affiliate to the PBGC, if such
     material liability of such ERISA Affiliate could reasonably be expected to
     have a material adverse effect on such Borrower or any Material Subsidiary
     (other than NewGP, if applicable) of such Borrower, or (ii) permit to occur
     any Termination Event with respect to a Plan which would have a material
     adverse effect


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<PAGE>

     on such Borrower or any Subject Subsidiary of such Borrower (including, in
     the case of TWC, any material WCG Subsidiary).

          (h) Transactions with Related Parties. Make any sale to, make any
     purchase from, extend credit to, make payment for services rendered by, or
     enter into any other transaction with, or permit any Material Subsidiary of
     such Borrower to make any sale to, make any purchase from, extend credit
     to, make payment for services rendered by, or enter into any other
     transaction with, any Related Party of such Borrower or of such Material
     Subsidiary unless as a whole such sales, purchases, extensions of credit,
     rendition of services and other transactions are (at the time such sale,
     purchase, extension of credit, rendition of services or other transaction
     is entered into) on terms and conditions reasonably fair in all material
     respects to such Borrower or such Material Subsidiary in the good faith
     judgment of such Borrower.

          (i) Guarantees. After July 31, 2002, enter into any agreement to
     guarantee or otherwise become contingently liable for, or permit any of its
     Subject Subsidiaries to guarantee or otherwise become contingently liable
     for, Debt or any other obligation of any WCG Subsidiary or to otherwise
     assure a WCG Subsidiary, or any creditor of a WCG Subsidiary, against loss,
     except as set forth in Exhibit M.

          (j) Sale and Lease-Back Transactions. Enter into, or permit any of its
     Subject Subsidiaries (other than Apco Argentina, Inc.) to enter into, any
     Sale and Lease-Back Transaction, if after giving effect thereto such
     Borrower would not be permitted to incur at least $1.00 of additional Debt
     secured by a Lien permitted by paragraph (y) of Schedule VI.

          (k) Use of Proceeds. Use any proceeds of any Advance for any purpose
     other than general corporate purposes relating to the business of a
     Borrower and its Subsidiaries, but excluding in the case of TWC, any WCG
     Subsidiary (including, without limitation, repurchases by TWC of its
     capital stock, working capital and capital expenditures), or use any such
     proceeds in any manner which violates or results in a violation of law;
     provided, however, that no proceeds of any Advance will be used to acquire
     any equity security of a class which is registered pursuant to Section 12
     of the Securities Exchange Act of 1934, as amended (other than any purchase
     of common stock of any corporation, if such purchase is not subject to
     Sections 13 and 14 of the Securities Exchange Act of 1934 and is not
     opposed, resisted or recommended against by such corporation or its
     management or directors, provided that the aggregate amount of common stock
     of any corporation (other than Apco Argentina Inc., a Cayman Islands
     corporation), purchased during any calendar year shall not exceed 1% of the
     common stock of such corporation issued and outstanding at the time of such
     purchase) or in any manner which contravenes law, and no proceeds of any
     Advance will be used to purchase or carry any margin stock (within the
     meaning of Regulation U issued by the Board of Governors of the Federal
     Reserve System). No Borrower may use any Advance to make any loan or
     advance to, or to own, purchase or acquire any obligations or debt
     securities of, any WCG Subsidiary or to acquire or otherwise invest in any
     stock or other equity or other ownership interest in a WCG Subsidiary,
     provided, however, that nothing contained


                                       69
<PAGE>

     herein shall prohibit or otherwise restrict the ability of TWC or any
     Subsidiary of TWC to use the proceeds of any Advance to own, purchase or
     acquire the WCG Senior Notes pursuant to the WCG Refinancing Transaction.
     Notwithstanding anything to the contrary contained herein, if any, (i) with
     respect to EMT, proceeds of any Advance shall only be used, directly or
     indirectly, as necessary for the orderly disposition of the Trading Book
     and (ii) no proceeds of any Advance shall be used to pay any principal
     amounts outstanding, interest, fees or other costs with respect to the
     Barrett Loan, it being understood that proceeds of any Advance may be used
     to support margin requirements with regard to Hedging Agreements on oil and
     gas.

          (l) Asset Disposition. Sell, lease, transfer or otherwise dispose of,
     or permit any of their Material Subsidiaries or the Guarantors to sell,
     lease, transfer or otherwise dispose of, any property of the Borrowers or
     any Guarantor or any Material Subsidiary of the Borrowers, except:

               (i) sales of inventory in the ordinary course of business and on
          reasonable terms;

               (ii) sales of worn out, surplus, or obsolete equipment in the
          ordinary course of business, if no Event of Default exists at the time
          of such sale;

               (iii) replacement of equipment in the ordinary course of business
          with other equipment at least as useful and beneficial to TWC or its
          Material Subsidiaries and their respective businesses as the equipment
          replaced if no Event of Default exists at the time of such replacement
          and an Acceptable Security Interest exists in such other equipment at
          the time of such replacement;

               (iv) sales of other immaterial Property (other than Equity
          Interests, Debt or other obligations of any Subsidiary) in the
          ordinary course of business and on reasonable terms, if no Event of
          Default exists at the time of such sale; provided that Property may
          not be sold pursuant to this clause (iv) if the aggregate fair market
          value of all Property sold pursuant to this clause (iv) exceeds
          $250,000 in any year;

               (v) sales or other dispositions of assets which are not
          Collateral for cash in arm's length transactions;

               (vi) sales, leases, transfers or other dispositions of the
          Refineries (in whole or in part, including to each other);

               (vii) the MAPL Asset Disposition and Seminole Asset Disposition;

               (viii) sales or other dispositions of assets of NewGP or its
          Subsidiaries and the transfer by Williams GP LLC to NewGP of the
          general partnership interests and incentive distribution rights in
          MLP;

               (ix) Permitted Dispositions;


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<PAGE>

               (x) sale of Equity Interests in NewGP;

               (xi) transfers by the Guarantors to other Guarantors and
          transfers by non-Guarantor Subsidiaries to any other Subsidiary, in
          each case in the ordinary course of business;

               (xii) transfers to the State of California of up to 6 turbines in
          connection with the settlement of the California Proceedings;

               (xiii) the Arctic Fox Capital Contribution; and

               (xiv) transfers of Assets and Property by Subsidiaries of TGT
          which may not be restricted pursuant to that certain Indenture dated
          as of April 11, 1994 between TGT, as Issuer, and The Chase Manhattan
          Bank, as Trustee;

     provided that (A) 50% of the gross cash proceeds resulting from any
     disposition of Collateral permitted pursuant to clauses (ii), (iv) through
     (vii), (ix) and (x), shall be deposited immediately upon receipt to the
     Collateral Account to be maintained with, and under the control of, the
     Collateral Trustee pursuant to the Collateral Trust Agreement and applied
     in accordance with the terms and conditions of the L/C Agreement and this
     Agreement and (B) assets disposed of pursuant to clauses (i) through (v)
     shall not constitute a material part of the assets of TGPL, TGT or NWP and
     (C) with respect to any Collateral replaced, exchanged or transferred (in
     the case of clause (xi) only), or any non-cash proceeds received from the
     sale, transfer or other disposition of Collateral, in each case pursuant to
     this Section 5.02(l), such Borrower shall undertake all actions as more
     fully set forth in, and subject to, Section 5.01(f) to (1) grant an
     Acceptable Security Interest in favor of the Collateral Trustee on any new
     Collateral resulting from any such replacement or exchange or on the
     non-cash proceeds received from the sale or other disposition of Collateral
     and (2) in the case of Collateral transferred pursuant to clause (xi), to
     maintain an Acceptable Security Interest on such transferred Collateral.

          In connection with a requested release of Collateral pursuant to this
     Section 5.02(l), TWC shall deliver a Release Notice (as defined in the
     Collateral Trust Agreement) to the Collateral Trustee and the Collateral
     Trustee shall be required to forward such notice to the designated group
     pursuant to the terms of Section 2.5 of the Collateral Trust Agreement. If
     the notice period specified in the Collateral Trust Agreement expires prior
     to the Collateral Trustee receiving any objection to the specified release,
     then (x) the Collateral Trustee will execute and deliver all documents as
     may reasonably be requested to effect a release of the Liens on any such
     Collateral held by the Collateral Trustee pursuant the Collateral Trust
     Agreement and other L/C Collateral Documents, (y) any Guarantor that is the
     owner of the assets subject to a disposition permitted pursuant to this
     Section 5.02(l) and whose entire Equity Interests are being conveyed in
     connection with such disposition, together with the Subsidiary or
     Subsidiaries that own such Equity Interests with respect to such ownership,
     shall be automatically released as a Guarantor under the Midstream Guaranty
     and as a party, or parties as applicable, to the Collateral Trust
     Agreement, Pledge Agreement and Security


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<PAGE>

     Agreement and (z) each Bank shall be deemed to have affirmatively approved
     the release of such Collateral and to the extent applicable, the release of
     such Guarantor and its owners, to the extent applicable, from the terms and
     conditions of the Midstream Guaranty, Collateral Trust Agreement, Pledge
     Agreement and Security Agreement.

          Notwithstanding anything in this Section 5.02(l) to the contrary, and
     for greater certainty, nothing in this Agreement shall prohibit (1) a
     transfer of Equity Interests of RMT from TWC to RMT LLC or any RMT Asset
     Disposition or (2) TWC or any of its Subsidiaries (including RMT LLC, RMT
     and their respective Subsidiaries) from selling, leasing, transferring or
     otherwise disposing of any property of the Borrowers or any Subsidiaries of
     the Borrowers in accordance with the provisions of the Barrett Loan
     Agreement. For the avoidance of doubt, modification or limitation of voting
     rights with respect to any Equity Interests shall not constitute a
     disposition of property.

          The Banks hereby acknowledge that Williams Midstream Natural Gas, Inc.
     has entered into a storage lease more fully described on Schedule V
     attached hereto. The property subject to the lease is encumbered by Liens
     granted pursuant to the Security Documents. The Banks hereby authorize and
     instruct the Collateral Trustee to execute the Non-Disturbance and
     Attornment Agreement substantially in the form attached hereto as part of
     Schedule V.

          (m) Cash Flow to Interest Expense Ratio. Permit, for any period of
     four consecutive quarters, the ratio of (A) the sum of Cash Flow of any
     Borrower plus Interest Expense of such Borrower to (B) Interest Expense of
     such Borrower to be less than 1.5 to 1.0.

          (n) Restricted Payments. (i) Other than in connection with the Castle
     Transaction, the Arctic Fox Capital Contribution and the Plowshare
     Transaction, declare or pay any dividends, purchase, redeem, retire,
     defease or otherwise acquire for value any of its Equity Interests now or
     hereafter outstanding, return any capital to its stockholders, partners or
     members (or the equivalent Persons thereof) as such, make any distribution
     of assets, Equity Interests, obligations or securities to its stockholders,
     partners or members (or the equivalent Person thereof) as such, or permit
     any of its Subject Subsidiaries (other than Apco Argentina, Inc., TGT (to
     the extent there exists any contractual restriction prohibiting the
     Subsidiaries of TGT from restricting their ability to pay dividends) and
     their respective Subsidiaries) to do any of the foregoing, (ii) permit any
     of its Subject Subsidiaries to purchase, redeem, retire, defease or
     otherwise acquire for value any Equity Interests in TWC or (iii) permit its
     Subject Subsidiaries to make any prepayment with respect to any Debt (other
     than Debt issued or incurred in connection with the Progeny Facilities and
     related documents, Debt issued or incurred in connection with the terms of
     Section 2.04(c), Debt issued prior to July 31, 2002 pursuant to the certain
     Indenture dated May 1, 1990 with Transco Energy Company as issuer and Bank
     of New York as trustee, as supplemented from time to time, the WCG Note
     Trust Bonds, Debt under the Barrett Loan Agreement, Debt of Subsidiaries of
     TGT and Debt incurred in connection with the UBOC Turbine Financing) or
     repurchase any Debt securities except any repurchase or prepayment as
     required by the terms thereof in effect on July 31, 2002,


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<PAGE>

     except that, so long as no Default shall have occurred and be continuing at
     the time of any action described in clauses (i), (ii) (other than with
     respect to RMT LLC and its Subsidiaries) and (iv) below or would result
     therefrom:

               (i) TWC may (A) declare and pay cash dividends and distributions
          on its (1) 9 7/8% Cumulative Convertible Preferred Stock, (2) December
          2000 Cumulative Convertible Preferred Stock and (3) March 2001
          Mandatorily Convertible Single Reset Preferred Stock, (B) declare and
          pay cash dividends and distributions on TWC Preferred Stock issued on
          or after July 30, 2002 in form and substance satisfactory to the Agent
          and (C) in any Fiscal Quarter, declare and pay cash dividends to its
          holders of common stock and purchase, redeem, retire or otherwise
          acquire shares of its own outstanding common stock for cash if after
          giving effect thereto the aggregate amount of such dividends,
          purchases, redemptions, retirements and acquisitions paid or made in
          any such Fiscal Quarter would be not greater than the sum of
          $6,250,000;

               (ii) TWC or any Subsidiary of TWC may (A) declare and pay cash
          dividends or pay subordinated loans owed to TWC or any Subsidiary of
          TWC (as the case may be), (B) declare and pay cash dividends or pay
          subordinated loans, in each case in the ordinary course of business
          consistent with past practice, owed to any other Subsidiary of TWC
          (and payments to the holders of the Designated Minority Interests made
          concurrently with and in the same form as the payments to Subsidiaries
          of TWC);

               (iii) TWC or any Subsidiary of TWC may make payments to
          non-Subsidiaries to the extent required under Financing Transactions
          or other agreements in effect as of July 31, 2002, including without
          limitation payments made in connection with a downgrade by S&P and
          Moody's of TWC's senior unsecured long-term debt rating; and

               (iv) TWC or any Subsidiary of TWC may make payments to
          non-Subsidiaries to the extent required under the organizational
          documents of the Deepwater JV.

          (o) Investments in Other Persons. Make or hold, or permit any of its
     Subject Subsidiaries to make or hold, any Investment in any Person, except:

               (i) equity Investments by a Borrower and its Subsidiaries in
          their Subsidiaries outstanding on July 31, 2002 and additional
          Investments in Subsidiaries engaged in businesses reasonably related
          to the businesses carried on by such Borrower and its Subsidiaries on
          July 31, 2002 (including without limitation the Arctic Fox Capital
          Contribution) provided that any such additional cash Investments shall
          not exceed $75,000,000 annually, except to the extent such cash
          Investments are immediately returned to the Person making such
          Investment as a dividend, distribution or repayment of Debt;


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               (ii) loans and advances to employees in the ordinary course of
          the business of a Borrower and its Subsidiaries as presently
          conducted;

               (iii) Investments of a Borrower and its Subsidiaries in Cash
          Equivalents;

               (iv) Investments existing on July 31, 2002 or commitments for
          such Investments existing on July 31, 2002 and Investments made
          pursuant to such commitments made after July 31, 2002;

               (v) Investments by a Borrower and its Subsidiaries in Hedge
          Agreements entered into in the ordinary course of business and not for
          speculative purposes;

               (vi) Investments consisting of intercompany debt;

               (vii) Investments consisting of (A) the purchase of WCG Note
          Trust Bonds in an aggregate principal amount not to exceed $75,000 or
          (B) the Equity Interests in the WCG Senior Notes Issuer;

               (viii) Investments by Apco Argentina, Inc. or its Subsidiaries in
          accordance with applicable laws and their governing documents;
          provided that such Investments shall only be made using cash
          generated solely by their business, operations and financings;

               (ix) Investments not exceeding $12,000,000 in Williams Coal Seam
          Gas Royalty Trust units pursuant to agreements in place on the date
          hereof; provided that the purchase price of such units shall not
          exceed the then existing market price for such units;

               (x) Investments consisting of the acquisition of Equity Interests
          of the Deepwater JV in exchange for the contribution of Deepwater
          Assets to the Deepwater JV and Investments made to maintain such
          Equity Interests;

               (xi) Investments in Persons that are not Subsidiaries required to
          be made by TWC or any of its Subsidiaries in order to avoid default
          pursuant to agreements in existence on July 31, 2002;

               (xii) any Investments necessary to maintain, in accordance with
          the partnership agreement, the 2% general partnership interest of
          NewGP in the MLP; provided, that the aggregate annual amount of such
          Investments under this clause (xii) shall not exceed $10,000,000;

               (xiii) Investments permitted pursuant to Section 5.02(e);

               (xiv) the Investment in the 0.2% general partnership interest in
          West Texas LPG Pipelines;


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<PAGE>

               (xv) Investments by EMT contemplated by the UBOC Turbine
          Financing; and

               (xvi) other Investments in an aggregate amount invested not to
          exceed $50,000,000 annually; provided that, with respect to
          Investments made under this clause (xvi), (1) any newly acquired or
          organized Subsidiary of a Borrower or any of its Subsidiaries shall be
          a Wholly-Owned Subsidiary thereof; (2) immediately before and after
          giving effect thereto, no Default shall have occurred and be
          continuing or would result therefrom; and (3) any company or business
          acquired or invested in pursuant to this clause (xvi) shall be in the
          same line of business as the business of a Borrower or any of its
          Subsidiaries.

          (p) Subsidiary Debt. Permit any of its Subject Subsidiaries to create,
     incur, assume or suffer to exist Debt, other than (except as set forth in
     either Section 6(f) of the LLC Guaranty or Section 6(e) of the Holdings
     Guaranty) (i) Debt incurred, assumed or suffered to exist by TGPL, TGT,
     NWP, or Apco Argentina, Inc. or their Subsidiaries, (ii) Debt incurred,
     assumed or suffered to exist by Subsidiaries (other than those referred to
     in clause (i) and the Subsidiaries the stock of which is pledged under the
     Pledge Agreement (as defined in the L/C Agreement)) in an aggregate amount
     not to exceed $50,000,000 at any one time outstanding, (iii) Debt in
     existence on July 31, 2002, (iv) Debt under the Guaranties, (v) Debt of the
     Project Financing Subsidiaries; (vi) Debt under the Barrett Loan Agreement
     (vii) Debt consisting of intercompany debt so long as obligations of the
     debtors thereunder are subordinated to their obligations under the Credit
     Documents and are incurred in the ordinary course of the cash management
     systems of the Borrowers and their Subsidiaries, (viii) any Permitted
     Refinancing Debt incurred in exchange for, or the net proceeds of which are
     used to refund, refinance or replace Debt permitted to be incurred under
     this clause (p), and (ix) Debt incurred in connection with the Deepwater
     Transactions and the UBOC Turbine Financing.

          (q) Agreement to Restrict Transfers to NewGP. In the case of TWC,
     transfer, or permit any of its Subject Subsidiaries to transfer, any
     property to NewGP, except a transfer to NewGP of the Equity Interest in MLP
     held by Williams GP LLC or any other transfer necessary to maintain the 2%
     general partnership interest of NewGP in MLP; provided that the aggregate
     annual amount of such Investments under this Section 5.02(q) shall not
     exceed $10,000,000.

          (r) Cash Collateralization of Legacy L/Cs. In the case of TWC, from
     July 31, 2002, prepay any Progeny Facility or reduce the commitment of any
     lender under any Progeny Facility, or cash collateralize any Legacy L/Cs;
     provided, that TWC may (i) prepay any Progeny Facility, (ii) reduce the
     commitment of any lender under any Progeny Facility and (iii) cash
     collateralize any Legacy L/Cs under any of the following circumstances:

          (1)  TWC may apply Net Cash Proceeds as required by Section 2.04(c);


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<PAGE>

          (2)  TWC may pay principal of a Progeny Facility as such principal
               matures, and make any required prepayment or reduction of the
               commitments of any lender thereunder, in each case in accordance
               with the terms of such Progeny Facility in effect on July 31,
               2002, and may prepay any such Progeny Facility simultaneously
               with the disposition of the assets associated with such Progeny
               Facility;

          (3)  TWC may make prepayments, reductions of commitments and cash
               collateralizations on a pro-rata basis to (x) the permanent
               ratable reduction of the outstanding amounts of the Progeny
               Facilities and (y) cash collateralize the Legacy L/Cs until and
               unless the Legacy L/Cs are fully cash collateralized, in which
               case such prepayments, reductions of commitments or cash
               collateralizations may be made on a pro-rata basis to the
               permanent ratable reduction of the outstanding amounts of the
               Progeny Facilities;

          (4)  TWC, in its sole absolute discretion, make any prepayment,
               commitment reduction or cash collateralization of the type set
               forth in clauses (i) through (iii) above in an aggregate amount
               not to exceed $65,000,000 per annum; and

          (5)  TWC may prepay, defease or otherwise satisfy in whole or in part
               all of its obligations arising under the Letter of Credit and
               Reimbursement Agreement dated as of May 15, 1994, among Tulsa
               Parking Authority, TWC, Bank of Oklahoma, National Association,
               and Bank of America, N.A. (formerly NationsBank of Texas, N.A.),
               relative to Tulsa Parking Authority First Mortgage Revenue Bonds,
               as amended, and all documents, instruments, agreements,
               certificates and notices at any time executed and/or delivered in
               connection therewith.

          For the avoidance of doubt, nothing in this Section 5.02(r) shall
     limit or restrict TWC from any payment or taking any action that is
     required by the terms of any Progeny Facility or Legacy L/Cs in effect on
     the date hereof.


                                   Article VI

                                EVENTS OF DEFAULT

     Section 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:

          (a) Any Borrower (i) shall fail to pay any principal of any Advance or
     of any Note executed by it when the same becomes due and payable, (ii)
     shall fail to pay any interest on any Advance or on any Note or (iii) shall
     fail to pay any fee or other amount


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     to be paid by it hereunder or under any Credit Document to which it is a
     party within ten days after the same becomes due and payable; or

          (b) Any certification, representation or warranty made by any Borrower
     or Guarantor herein or in any other Credit Document or by any Borrower or
     Guarantor (or any officer of any Borrower or Guarantor) in writing under or
     in connection with this Agreement or in any other Credit Document or any
     instrument executed in connection herewith (including, without limitation,
     representations and warranties deemed made pursuant to Section 3.02 or
     3.03) shall prove to have been incorrect in any material respect when made
     or deemed made; or

          (c) Any Borrower or Guarantor shall fail to perform or observe (i) any
     term, covenant or agreement contained in Section 5.01(b) on its part to be
     performed or observed and such failure shall continue for ten Business Days
     after the earlier of the date notice thereof shall have been given to such
     Borrower by the Agent or any Bank or the date such Borrower shall have
     knowledge of such failure, (ii) any term, covenant or agreement contained
     in this Agreement (other than a term, covenant or agreement contained in
     Section 5.01(b) or Section 5.02), any Note or any other Credit Document on
     its part to be performed or observed and such failure shall continue for
     five Business Days after the earlier of the date notice thereof shall have
     been given to such Borrower by the Agent or any Bank or the date such
     Borrower or Guarantor, as applicable shall have knowledge of such failure
     or (iii) any term, covenant or agreement contained in Section 5.02; or

          (d) Any Borrower or any Subsidiary of any Borrower shall fail to pay
     any principal of or premium or interest on any Debt which is outstanding in
     a principal amount of at least $60,000,000 in the aggregate (excluding Debt
     incurred pursuant to any Advance) of such Borrower and/or a Subsidiary of
     such Borrower (as the case may be), when the same becomes due and payable
     (whether by scheduled maturity, required prepayment, acceleration, demand
     or otherwise), and such failure shall continue after the applicable grace
     period, if any, specified in the agreement or instrument relating to such
     Debt; or any other event shall occur or condition shall exist under any
     agreement or instrument relating to any such Debt and shall continue after
     the applicable grace period, if any, specified in such agreement or
     instrument, if the effect of such event or condition is to accelerate, or
     to permit the acceleration of, the maturity of such Debt; or any such Debt
     shall be declared to be due and payable, or required to be prepaid (other
     than (i) by a regularly scheduled required prepayment, (ii) as required in
     connection with any permitted sale of assets, (iii) as required in
     connection with any casualty or condemnation or (iv) as required pursuant
     to an illegality event of the type set forth in Section 2.12), prior to the
     stated maturity thereof; provided, however, that the provisions of this
     Section 6.01(d) shall not apply to any Non-Recourse Debt of any
     Non-Borrowing Subsidiary of a Borrower; or

          (e) Any Borrower or any Material Subsidiary of any Borrower shall
     generally not pay its debts as such debts become due, or shall admit in
     writing its inability to pay its debts generally, or shall make a general
     assignment for the benefit of creditors; or any


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<PAGE>

     proceeding shall be instituted by or against any Borrower or any Material
     Subsidiary of any Borrower seeking to adjudicate it a bankrupt or
     insolvent, or seeking liquidation, winding up, reorganization, arrangement,
     adjustment, protection, relief, or composition of it or its debts under any
     law relating to bankruptcy, insolvency or reorganization or relief of
     debtors, or seeking the entry of an order for relief or the appointment of
     a receiver, trustee, or other similar official for it or for any
     substantial part of its property and, in the case of any such proceeding
     instituted against it (but not instituted by it), shall remain undismissed
     or unstayed for a period, of 60 days; or any Borrower or any Material
     Subsidiary of any Borrower shall take any action to authorize any of the
     actions set forth above in this subsection (e); or

          (f) Any judgment or order for the payment of money in excess of
     $60,000,000 shall be rendered against any Borrower or any Material
     Subsidiary of any Borrower and remain unsatisfied and either (i)
     enforcement proceedings shall have been commenced by any creditor upon such
     judgment or order or (ii) there shall be any period of 30 consecutive days
     during which a stay of enforcement of such judgment or order, by reason of
     a pending appeal or otherwise, shall not be in effect; or

          (g) Any Termination Event with respect to a Plan shall have occurred
     and, 30 days after notice thereof shall have been given to any Borrower by
     the Agent, (i) such Termination Event shall still exist and (ii) the sum
     (determined as of the date of occurrence of such Termination Event) of the
     Insufficiency of such Plan and the Insufficiency of any and all other Plans
     with respect to which a Termination Event shall have occurred and then
     exist (or in the case of a Plan with respect to which a Termination Event
     described in clause (ii) of the definition of Termination Event shall have
     occurred and then exist, the liability related thereto) is equal to or
     greater than $75,000,000; or

          (h) Any Borrower or any ERISA Affiliate of any Borrower shall have
     been notified by the sponsor of a Multiemployer Plan that it has incurred
     Withdrawal Liability to such Multiemployer Plan in an amount which, when
     aggregated with all other amounts required to be paid to Multiemployer
     Plans in connection with Withdrawal Liabilities (determined as of the date
     of such notification), exceeds $75,000,000 in the aggregate or requires
     payments exceeding $50,000,000 per annum;

          (i) Any Borrower or any ERISA Affiliate of any Borrower shall have
     been notified by the sponsor of a Multiemployer Plan that such
     Multiemployer Plan is in reorganization or is being terminated, within the
     meaning of Title IV of ERISA, if as a result of such reorganization or
     termination the aggregate annual contributions of the Borrowers and their
     respective ERISA Affiliates to all Multiemployer Plans which are then in
     reorganization or being terminated have been or will be increased over the
     amounts contributed to such Multiemployer Plans for the respective plan
     years which include July 31, 2002 by an amount exceeding $75,000,000;

          (j) Any provision (other than any provision excepted from, or subject
     to a qualification in, the opinion delivered pursuant to Section 3.01(c),
     but only to the extent of such exception or qualification) of any L/C
     Collateral Document for any reason is not


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<PAGE>

     a legal, valid, binding and enforceable obligation of any Borrower or
     Guarantor party thereto or any Borrower or Guarantor party thereto shall so
     state in writing;

          (k) Any material portion of the Collateral that is not covered by
     adequate insurance shall be destroyed or any material portion of the
     Collateral shall otherwise become unavailable for use by its owner for a
     period in excess of 30 days (or 90 days if such owner has business
     interruption insurance adequate to cover the loss to it resulting from such
     Collateral being unavailable for use) or title to any material portion of
     the Collateral shall be successfully challenged; or

          (l) Any "Default" or "Event of Default" as defined in any L/C
     Collateral Document shall occur.

then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of Banks owed more than 50% in principal amount of the A Advances then
outstanding or, if no A Advances are then outstanding, Banks having more than
50% of the principal amount of the Commitments, by notice to the Borrowers,
declare all of the Commitments and the obligation of each Bank to make Advances
to be terminated, whereupon all of the Commitments and each such obligation
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of Banks owed more than 50% in principal amount of the A Advances then
outstanding or if no A Advances are then outstanding, Banks having more than 50%
of the Commitments, or, if no A Advances are then outstanding and all
Commitments have terminated, Banks owed more than 50% in principal amount of the
B Advances then outstanding, by notice to the Borrower as to which an Event of
Default exists (determined as contemplated by the definition herein of Events of
Default), declare the principal of the Advances of such Borrower, all interest
thereon and all other amounts payable by such Borrower under this Agreement and
any other Credit Document to be forthwith due and payable, whereupon such
principal of the Advances, such interest and all such amounts shall become and
be forthwith due and payable, without requirement of any presentment, demand,
protest, notice of intent to accelerate, further notice of acceleration or other
further notice of any kind (other than the notice expressly provided for above),
all of which are hereby expressly waived by each Borrower; provided, however,
that in the event of any Event of Default described in Section 6.01(e), (A) the
obligation of each Bank to make Advances shall automatically be terminated and
(B) the principal of the Advances outstanding, all such interest and all such
amounts shall automatically become and be 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 each
Borrower. For purposes of this Section 6.01, any Advance owed to an SPC shall be
deemed to be owed to its Designating Bank.

                                   Article VII

                                    THE AGENT

     Section 7.01. Authorization and Action. Each Bank hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as


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<PAGE>

are reasonably incidental thereto. As to any matters not expressly provided for
by this Agreement (including, without limitation, enforcement of the terms of
this Agreement or collection of the principal of, and interest on the Advances,
fees and any other amounts due and payable pursuant to this Agreement), the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of Banks owed more
than 50% of the principal amount of the A Advances then outstanding is owed or,
if no A Advances are then outstanding, Banks having more than 50% of the
Commitments (or, if no A Advances are then outstanding and all Commitments have
terminated, upon the instructions of Banks owed more than 50% of the principal
amount of the B Advances then outstanding), and such instructions shall be
binding upon all Banks; provided, however, that the Agent shall not be required
to take any action which exposes the Agent to personal liability or which is
contrary to any Note, this Agreement or applicable law. The Agent agrees to give
to each Bank prompt notice of each notice given to it by any Borrower pursuant
to the terms of this Agreement.

     Section 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may treat a Bank
as the obligee of any Advance or, if applicable, the payee of any Note until the
Agent receives and accepts a Transfer Agreement executed by a Borrower (if
required pursuant to Section 8.06), the Bank which the assignor Bank, and the
assignee in accordance with the last sentence of Section 8.06(a); (ii) may
consult with legal counsel (including counsel for any Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations (whether written or oral) made in or
in connection with any Note, this Agreement or any other Credit Document; (iv)
shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or any
other Credit Document on the part of any Borrower or Guarantor or to inspect the
property (including the books and records) of any Borrower or Guarantor; (v)
shall not be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Credit Document or any other instrument or document furnished pursuant hereto or
thereto (including any Note requested by a Bank, delivered to a Bank pursuant to
Section 8.06 or otherwise held by a Bank); and (vi) shall incur no liability
under or in respect of any Note or this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.

     Section 7.03. CUSA, Chase, Commerzbank, Credit Lyonnais and Affiliates.
With respect to its Commitments, the Advances made by it and the Notes, if any,
issued to it, CUSA shall have the same rights and powers under any such Note and
this Agreement as any other Bank and may exercise the same as though it was not
the Agent; with respect to its Commitments, the Advances made by it and the
Notes, if any, issued to it, each of Chase, Commerzbank and Credit Lyonnais
shall have the rights and powers under any Note and this


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<PAGE>

Agreement as any other Bank and may exercise the same as though it was not a
Co-Syndication Agent or Documentation Agent, as the case may be. The term "Bank"
or "Banks" shall, unless otherwise expressly indicated, include each of Chase,
Commerzbank and Credit Lyonnais in its individual capacity. Chase, Commerzbank
and Credit Lyonnais and the respective affiliates of each may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage in
any kind of business with, any Borrower, any Subsidiary of any Borrower, any
Person who may do business with or own, directly or indirectly, securities of
any Borrower or any such Subsidiary and any other Person, all as if Chase and
Commerzbank were not the Co-Syndication Agents and Credit Lyonnais were not the
Documentation Agent without any duty to account therefor to the Banks.

     Section 7.04. Bank Credit Decision. Each of the Banks and the other
beneficiaries of any L/C Collateral Document parties hereto (both on its own
behalf and on behalf of any of its affiliates that is a beneficiary of any L/C
Collateral Document) acknowledges that it has, independently and without
reliance upon the Collateral Trustee, Agent, any Co-Syndication Agent, the
Documentation Agent, the Arranger or any other Bank and based on the financial
statements referred to in Section 4.01(e) and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each of the Banks and the other
beneficiaries of any Security Document parties hereto (both on its own behalf
and on behalf of any of its Affiliates that is a beneficiary of any Security
Document) also acknowledges that it will, independently and without reliance
upon the Collateral Trustee, Agent, any Co-Syndication Agent, the Documentation
Agent, the Arranger 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 action under this Agreement and the
other Credit Documents. Neither the Collateral Trustee nor the Collateral Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to provide any Person with any credit or other information with respect
thereto, whether coming into its possession before the issuance of any Letter of
Credit or at any time or times thereafter.

     Section 7.05. Indemnification. The Banks agree to indemnify the Agent (to
the extent not reimbursed by the Borrowers), ratably according to the respective
principal amounts of the A Advances then owed to each of them (or if no A
Advances are at the time outstanding, ratably according to either (i) the
respective amounts of their Commitments to TWC, or (ii) if all Commitments to
TWC have terminated, the respective amounts of the Commitments to TWC
immediately prior to the time the Commitments to TWC terminated), from and
against any and all claim, damages, losses, liabilities, obligations, penalties,
actions, judgments, suits, costs, expenses or disbursements (including
reasonable fees and disbursements of counsel) of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or any other Credit Document or any
action taken or omitted by the Agent under this Agreement or any other Credit
Document (EXPRESSLY INCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE
ATTRIBUTABLE TO THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF THE AGENT, BUT
EXCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE AGENT). IT IS THE INTENT OF THE
PARTIES HERETO THAT THE AGENT SHALL, TO THE EXTENT PROVIDED IN


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<PAGE>

THIS SECTION 7.05, BE INDEMNIFIED FOR ITS OWN ORDINARY, SOLE OR CONTRIBUTORY
NEGLIGENCE. Without limitation of the foregoing, each Bank agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
to the extent that the Agent is not reimbursed for such expenses by the
Borrowers.

     Section 7.06. Successor Agent. The Agent may resign at any time as Agent
under this Agreement by giving written notice thereof to the Banks and the
Borrowers and may be removed at any time with or without cause by the Majority
Banks. Upon any such resignation or removal, the Majority Banks shall have the
right to appoint, with the consent of TWC (which consent shall not be
unreasonably withheld and shall not be required if an Event of Default exists),
a successor Agent from among the Banks. If no successor Agent shall have been so
appointed by the Majority Banks with such consent, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a Bank which is a commercial bank organized under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent under this Agreement by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and shall function as the Agent under this
Agreement, and the retiring Agent shall be discharged from its duties and
obligations as Agent under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.

     Section 7.07. Co-Syndication Agents; Documentation Agent. The other agents,
Collateral Trustee, Co-Syndication Agents and the Documentation Agent have no
duties or obligations under this Agreement. None of the other agents, Collateral
Trustee, Co-Syndication Agents or the Documentation Agent shall have, by reason
of this Agreement, the Notes or any other Credit Document if any, a fiduciary
relationship in respect of any Bank or the holder of any Note, and nothing in
this Agreement or the Notes, express or implied, is intended or shall be so
construed to impose on any of the other agents, Collateral Trustee,
Co-Syndication Agents or the Documentation Agent any obligation in respect of
this Agreement or the Notes or any other Credit Document.

                                  Article VIII

                                  MISCELLANEOUS

     Section 8.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by any Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Majority Banks, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for


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which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Banks, do any of the following: (a)
waive any of the conditions specified in Article III, (b) increase the
Commitments of the Banks or subject the Banks to any additional obligations, (c)
reduce the principal of, or interest on, the outstanding Advances or any fees or
other amounts payable hereunder, (d) postpone any date fixed for any payment of
principal of, or interest on, the outstanding Advances or any fees or other
amounts payable hereunder, (e) take any action which requires the signing of all
the Banks pursuant to the terms of this Agreement, (f) change the definition of
Majority Banks or otherwise change the percentage of the Commitments or of the
aggregate unpaid principal amount of the A Advances or B Advances, or the number
of Banks, which shall be required for the Banks or any of them to take any
action under this Agreement, (g) amend, waive any provision of, or consent to
any departure by any Borrower from, Section 2.04(c) or this Section 8.01 or (h)
release any of the Collateral (except as contemplated by the terms of Section
5.02(1) and Schedule VII on the date hereof); and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the Agent in
addition to the Banks required above to take such action, affect the rights or
duties of the Agent under any Note or this Agreement.

     Section 8.02. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telecopy, telegraphic, telex or
cable communication) and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to any Bank, as specified opposite its name on Schedule I hereto
or specified pursuant to Section 8.06(a); if to any Borrower, as specified
opposite its name on Schedule II hereto; and if to CUSA, as Agent, to its
address at 2 Penns Way, Suite 200, New Castle, Delaware 19720 (telecopier
number: (302) 894-6120), Attention: Williams Account Officer, with a copy to
Citicorp North America, Inc., 1200 Smith Street, Suite 2000, Houston, Texas
77002 (telecopier number: (713) 654-2849), Attention: The Williams Companies,
Inc. Account Officer; or, as to any Borrower or the Agent, at such other address
as shall be designated by such party in a written notice to the other parties
and, as to each other party, at such other address as shall be designated by
such party in a written notice to the Borrowers and the Agent. All such notices
and communications shall, when mailed, telecopied, telegraphed, telexed or
cabled, be effective when received in the mail, sent by telecopier to any party
to the telecopier number as set forth herein or on Schedule I or Schedule II or
specified pursuant to Section 8.06(a) (or other telecopy number specified by
such party in a written notice to the other parties hereto), delivered to the
telegraph company, telexed to any party to the telex number set forth herein or
on Schedule I or Schedule II or specified pursuant to Section 8.06(a) (or other
telex number designated by such party in a written notice to the other parties
hereto), confirmed by telex answerback, or delivered to the cable company,
respectively, except that notices and communications to the Agent shall not be
effective until received by the Agent. Any notice or communication to a Bank
shall be deemed to be a notice or communication to any SPC designated by such
Bank and no further notice to an SPC shall be required. Delivery by telecopier
of an executed counterpart of this Agreement or any other Credit Document shall
be effective as delivery of a manually executed counterpart thereof.

     Section 8.03. No Waiver; Remedies. No failure on the part of any Bank, the
Collateral Trustee, the Surety Administrative Agent or the Agent to exercise,
and no delay in exercising, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise


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of any other right. The remedies provided in this Agreement are cumulative and
not exclusive of any remedies provided by law.

     Section 8.04. Costs and Expenses.

          (a) (i) TWC agrees to pay on demand all reasonable out-of-pocket costs
     and expenses of the Arranger and the Agent in connection with the
     preparation, execution, delivery, administration, modification and
     amendment of this Agreement, the Notes, if any, the other Credit Documents
     and the other documents to be delivered under this Agreement, including,
     without limitation, 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 under this Agreement and any
     Note, and (ii) each Borrower agrees to pay on demand all costs and
     expenses, if any (including, without limitation, reasonable counsel fees
     and expenses, which may include allocated costs of in-house counsel), of
     the Agent and each Bank in connection with the enforcement (whether before
     or after the occurrence of an Event of Default and whether through
     negotiations (including formal workouts and restructurings), legal
     proceedings or otherwise) against such Borrower or any Guarantor of any
     Note of such Borrower, this Agreement or any Credit Document.

          (b) If any payment (or purchase pursuant to Section 2.11(c)) of
     principal of, or Conversion of, any Eurodollar Rate Advance or B Advance
     made to any Borrower is made other than on the last day of an Interest
     Period relating to such Advance (or in the case of a B Advance, other than
     on the original scheduled maturity date thereof), as a result of a payment
     pursuant to Section 2.10 or 2.12 or acceleration of the maturity of the
     Advances pursuant to Section 6.01 or for any other reason or as a result of
     any purchase pursuant to Section 2.11 (c) or any Conversion, such Borrower
     shall, upon demand by any Bank (with a copy of such demand to the Agent),
     pay to the Agent for the account of such Bank any amounts required to
     compensate such Bank for any additional losses, costs or expenses which it
     may reasonably incur as a result of any such payment, purchase or
     Conversion, including, without limitation, any loss, cost or expense
     incurred by reason of the liquidation or reemployment of deposits or other
     funds acquired by such Bank to fund or maintain such Advance.

          (c) Each Borrower agrees, to the fullest extent permitted by law, to
     indemnify and hold harmless the Agent, the Arranger and each Bank and each
     of their respective directors, officers, employees and agents from and
     against any and all claims, damages, liabilities and out-of-pocket expenses
     (including, without limitation, reasonable fees and disbursements of
     counsel) for which any of them may become liable or which may be incurred
     by or asserted against the Agent, the Arranger or such Bank or any such
     director, officer, employee or agent (other than by another Bank or any
     successor or assign of another Bank), in each case in connection with or
     arising out of or by reason of any investigation, litigation, or
     proceeding, whether or not the Agent, the Arranger or such Bank or any such
     director, officer, employee or agent is a party thereto, arising out of,
     related to or in connection with this Agreement or any transaction in which
     any proceeds of all or any part of the Advances are applied (EXPRESSLY
     INCLUDING ANY


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     SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE
     ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNIFIED PARTY, BUT
     EXCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE
     TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY).
     IT IS THE INTENT OF THE PARTIES HERETO THAT EACH INDEMNIFIED PARTY SHALL,
     TO THE EXTENT PROVIDED IN THIS SECTION 8.04(C), BE INDEMNIFIED FOR ITS OWN
     ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE.

     Section 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Advances of a Borrower due and payable pursuant to the provisions of
Section 6.01, each Bank is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Bank to or for the credit
or the account of such Borrower against any and all of the obligations of such
Borrower now or hereafter existing under this Agreement, the other Credit
Documents and the Notes, if any, held by such Bank, irrespective of whether or
not such Bank shall have made any demand under this Agreement the other Credit
Documents or such Notes and although such obligations may be unmatured. Each
Bank agrees promptly to notify such Borrower after such set-off and application
made by such Bank, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Bank
under this Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Bank may have.

     Section 8.06. Binding Effect; Transfers.

          (a) This Agreement shall become effective when it shall have been
     executed by the Borrowers and the Agent and when each Bank listed on the
     signature pages hereof has delivered an executed counterpart hereof to the
     Agent, has sent to the Agent a facsimile copy of its signature hereon or
     has notified the Agent that such Bank has executed this Agreement and
     thereafter shall be binding upon and inure to the benefit of the Borrowers,
     the Agent and each Bank and their respective successors and assigns, except
     that the Borrowers shall not have the right to assign any of their
     respective rights hereunder or any interest herein without the prior
     written consent of all of the Banks. Each Bank may assign to one or more
     banks, financial institutions or government entities all or any part of, or
     may grant participations to one or more banks, financial institutions or
     government entities in or to all or any part of, any Advance or Advances
     owing to such Bank, any Note or Notes held by such Bank and all or any
     portion of such Bank's Commitments, and to the extent of any such
     assignment or participation (unless otherwise stated therein) the assignee
     or purchaser of such assignment or participation shall, to the fullest
     extent permitted by law, have the same rights and benefits hereunder and
     under such Note or Notes as it would have if it were such Bank hereunder,
     provided that, except in the case of an assignment meeting the requirements
     of the next sentence hereof, (1) such Bank's obligations under this
     Agreement, including, without limitation,


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<PAGE>

     its Commitments to the Borrowers hereunder, shall remain unchanged, such
     Bank shall remain responsible for the performance thereof, such Bank shall
     remain the holder of any such Note or Notes for all purposes under this
     Agreement, and the Borrowers, the other Banks and the Agent shall continue
     to deal solely with and directly with such Bank in connection with such
     Bank's rights and obligations under this Agreement; and (2) no Bank shall
     assign or grant a participation that conveys to the assignee or participant
     the right to vote or consent under this Agreement, other than the right to
     vote upon or consent to (i) any increase in the amount of any Commitment of
     such Bank; (ii) any reduction of the principal amount of, or interest to be
     paid on, such Bank's Advance or Advances; (iii) any reduction of any fee or
     other amount payable hereunder to such Bank; or (iv) any postponement of
     any date fixed for any payment of principal of, or interest on, such Bank's
     Advance or Advances or Note or Notes or any fee or other amount payable
     hereunder to such Bank.

          If (I) the assignee of any Bank either (1) is another Bank or is an
     affiliate of a Bank (2) is approved in writing by the Agent and the
     Borrowers or (3) is approved in writing by the Agent and either an Event of
     Default exists or the Borrowers have relinquished the right to approve the
     assignment pursuant to Section 8.06(b), and (II) such assignee assumes all
     or any portion (which portion shall be a constant, and not a varying,
     percentage, and the amount of the Commitment to TWC assigned, whether all
     or a portion, shall be in a minimum amount of $10,000,000 or such lesser
     amount as shall represent the entire remaining interest of such assigning
     Bank or as may be otherwise approved in writing by the Agent and TWC for
     such assignment) of each of the Commitments of such assigning Bank to the
     respective Borrowers (either all of each such Commitment shall be assigned
     or the percentage portion of each such Commitment assigned shall be the
     same as to each Borrower) by executing a document in the form of Exhibit F
     (or with such changes thereto as have been approved in writing by the Agent
     in its sole discretion as evidenced by its execution thereof) duly executed
     by the Agent, the Borrowers (unless an Event of Default exists), such
     assigning Bank and such assignee and delivered to the Agent ("Transfer
     Agreement"), then upon such delivery, (i) such assigning Bank shall be
     released from its obligations under this Agreement with respect to all or
     such portion, as the case may be, of its Commitments, (ii) such assignee
     shall become obligated for all or such portion, as the case may be, of such
     Commitments and all other obligations of such assigning Bank hereunder with
     respect to or arising as a result of all or such portion, as the case may
     be, of such Commitments, (iii) such assignee shall be assigned the right to
     vote or consent under this Agreement, to the extent of all or such portion,
     as the case may be, of such Commitments, (iv) each Borrower shall deliver,
     in replacement of any A Note of such Borrower executed to the order of such
     assigning Bank then outstanding or as may be requested by the assignee or
     assigning Bank (a) to such assignee upon its request or as required by
     Section 2.09, a new A Note of such Borrower in the amount of the Commitment
     of such assigning Bank to such Borrower which is being so assumed by such
     assignee plus, in the case of any assignee which is already a Bank
     hereunder, the amount of such assignee's Commitment to such Borrower
     immediately prior to such assignment (any such assignee which is already a
     Bank hereunder agrees to mark "exchanged" and return to such Borrower, with
     reasonable promptness following the delivery of such new A Note, the A Note
     being replaced


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     thereby, if any), (b) to such assigning Bank, upon its request or as
     required by Section 2.09, a new A Note in the amount of the balance, if
     any, of the Commitment of such assigning Bank to such Borrower (without
     giving effect to any B Reduction) retained by such assigning Bank (and such
     assigning Bank agrees to mark "Exchanged" and return to such Borrower, with
     reasonable promptness following delivery of such new A Notes, the A Note
     being replaced thereby), and (c) to the Agent, photocopies of such new A
     Notes, if any, (v) if such assignment is of all of such assigning Bank's
     Commitments to the Borrowers, all of the outstanding A Advances made by
     such assigning Bank shall be transferred to such assignee, (vi) if such
     assignment is not of all of such Commitments, a part of each A Advance to
     each Borrower equal to the amount of such Advance multiplied by a fraction,
     the numerator of which is the amount of such portion of such assigning
     Bank's Commitment to such Borrower so assumed and the denominator of which
     is the amount of the Commitment of such assigning Bank to such Borrower
     (without giving effect to any B Reduction) immediately prior to such
     assumption, shall be transferred to such assignee and evidenced by such
     assignee's A Note from such Borrower, if requested or required by Section
     2.09, and the balance of such A Advance shall be evidenced by such
     assigning Bank's new A Note, if any, from such Borrower delivered pursuant
     to clause (iv)(b) of this sentence, (vii) if such assignee is not a "Bank"
     hereunder prior to such assignment, such assignee shall become a party to
     this Agreement as a Bank and shall be deemed to be a "Bank" hereunder, and
     the amount of all or such portion, as the case may be, of the Commitment to
     each of the respective Borrowers so assumed shall be deemed to be the
     amount for such Borrower set opposite such assigning Bank's name on
     Schedule X for purposes of this Agreement, and (viii) if such assignee is
     not a Bank hereunder prior to such assignment, such assignee shall be
     deemed to have specified the offices of such assignee named in the
     respective Transfer Agreement as its "Domestic Lending Office" and
     "Eurodollar Lending Office" for all purposes of this Agreement and to have
     specified for purposes of Section 8.02 the notice information set forth in
     such Transfer Agreement; and the Agent shall promptly after execution of
     any Transfer Agreement by the Agent and the other parties thereto notify
     the Banks of the parties to such Transfer Agreement and the amounts of the
     assigning Bank's Commitments assumed thereby.

          (b) [Intentionally omitted]

          (c) The Borrowers agree to promptly execute the Transfer Agreement
     pertaining to any assignment as to which approval by the Borrowers of the
     assignee is not required by clause (I) of the last sentence of Section
     8.06(a).

          (d) Notwithstanding anything to the contrary contained herein, any
     Bank (a "Designating Bank") with the consent of the Agent and, if no Event
     of Default has occurred and is continuing, the Borrowers may grant to a
     special purpose funding vehicle (an "SPC"), identified as such in writing
     from time to time by the Designating Bank to the Agent and the Borrowers,
     the option to fund all or any part of any A Advance that such Designating
     Bank is obligated to fund pursuant to this Agreement or to fund all or part
     of any B Advance to a Borrower pursuant to Section 2.16 which the
     Designating Bank has agreed to make; provided that, no Designating Bank
     shall have granted at any


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<PAGE>

     one time such option to more than one SPC and further provided that (i)
     such Designating Bank's obligations under this Agreement (including,
     without limitation, its Commitment to each Borrower hereunder) shall remain
     unchanged, (ii) such Designating Bank shall remain solely responsible to
     the other parties hereto for the performance of such obligations, (iii) the
     Borrowers, the Agent and the other Banks shall continue to deal solely and
     directly with such Designating Bank in connection with such Designating
     Bank's rights and obligations under this Agreement, (iv) any such option
     granted to an SPC shall not constitute a commitment by such SPC to fund any
     Advance, and (v) neither the grant nor the exercise of such option to an
     SPC shall increase the costs or expenses or otherwise increase or change
     the obligations of a Borrower under this Agreement (including, without
     limitation, its obligations under Section 2.14). The making of an Advance
     by an SPC hereunder shall utilize the Commitment of the Designating Bank to
     the same extent, and as if, such Advance were made by such Designating
     Bank. Each party hereto hereby agrees that no SPC shall be liable for any
     indemnity or similar payment obligation under this Agreement to the extent
     that any such indemnity or similar payment obligations shall have been paid
     by its Designating Bank. In furtherance of the foregoing, each party hereto
     hereby agrees (which agreement shall survive the termination of this
     Agreement) that, prior to the date that is one year and one day after the
     payment in full of all outstanding commercial paper or other senior
     indebtedness of any SPC, it will not institute against, or join any other
     person in instituting against such SPC any bankruptcy, reorganization,
     arrangement, insolvency or liquidation proceedings under the laws of the
     United States. In addition, notwithstanding anything to the contrary
     contained in this Section 8.06, an SPC may not assign its interest in any
     Advance except that, with notice to, but without the prior written consent
     of, the Borrowers and the Agent and without paying any processing fee
     therefor, such SPC may assign all or a portion of its interests in any
     Advances to the Designating Bank or to any financial institutions
     (consented to by the Borrowers and Agent), providing liquidity and/or
     credit support to or for the account of such SPC to support the funding or
     maintenance of Advances. Each Designating Bank shall serve as the agent of
     its SPC and shall on behalf of its SPC: (i) receive any and all payments
     made for the benefit of such SPC and (ii) give and receive all
     communications and notices, and vote, approve or consent hereunder, and
     take all actions hereunder, including, without limitation, votes,
     approvals, waivers, consents and amendments under or relating to this
     Agreement and the other Loan Documents. Any such notice, communication,
     vote, approval, waiver, consent or amendment shall be signed by the
     Designating Bank for the SPC and need not be signed by such SPC on its own
     behalf. The Borrowers, the Agent and the Banks may rely thereon without any
     requirement that the SPC sign or acknowledge the same or that notice be
     delivered to the Borrowers. This section may not be amended without the
     written consent of any SPC, which shall have been identified to the Agent
     and the Borrowers.

          (e) Any Bank may assign, as collateral or otherwise, any of its rights
     (including, without limitation, rights to payments of principal of and/or
     interest on the Advances) under this Agreement or any of its Notes to any
     Federal Reserve Bank without notice to or consent of any Borrower or the
     Agent.


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<PAGE>

     Section 8.07. Governing Law. This Agreement, the Notes, if any, and the
other Credit Documents shall be governed by, and construed in accordance with,
the laws of the State of New York, except that Mortgages and Additional
Mortgages may, to the extent provided therein, be governed by and construed in
accordance with the laws of the respective states in which the real property is
covered thereby is located.

     Section 8.08. Interest. It is the intention of the parties hereto that the
Agent and each Bank shall conform strictly to usury laws applicable to it, if
any. Accordingly, if the transactions with the Agent or any Bank contemplated
hereby would be usurious under applicable law, then, in that event,
notwithstanding anything to the contrary in this Agreement or any other
agreement entered into in connection with or as security for this Agreement, it
is agreed as follows: (i) the aggregate of all consideration which constitutes
interest under applicable law that is contracted for, taken, reserved, charged
or received by the Agent or such Bank, as the case may be, under the Notes, this
Agreement or under any other agreement entered into in connection with or as
security for this Agreement or the Notes shall under no circumstances exceed the
maximum amount allowed by such applicable law and any excess shall be cancelled
automatically and, if theretofore paid, shall at the option of the Agent or such
Bank, as the case may be, be credited by the Agent or such Bank, as the case may
be, on the principal amount of the obligations owed to the Agent or such Bank,
as the case may be, by the appropriate Borrower or refunded by the Agent or such
Bank, as the case may be, to the appropriate Borrower, and (ii) in the event
that the maturity of any Note or other obligation payable to the Agent or such
Bank, as the case may be, is accelerated or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to the Agent or such Bank, as the case may be, may never include
more than the maximum amount allowed by such applicable law and excess interest,
if any, to the Agent or such Bank, as the case may be, provided for in this
Agreement or otherwise shall be cancelled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall, at the option of the
Agent or such Bank, as the case may be, be credited by the Agent or such Bank,
as the case may be, on the principal amount of the obligations owed to the Agent
or such Bank, as the case may be, by the appropriate Borrower or refunded by the
Agent or such Bank, as the case may be, to the appropriate Borrower.

     Section 8.09. Execution in Counterparts. This Agreement 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 8.10. Survival of Agreements, Representations and Warranties, Etc.
All warranties, representations and covenants made by any Borrower or any
officer of any Borrower herein or in any certificate or other document delivered
in connection with this Agreement shall be considered to have been relied upon
by the Banks and shall survive the issuance and delivery of the Notes, if any,
and the making of the Advances regardless of any investigation. The indemnities
and other payment obligations of each Borrower set forth in Sections 2.11, 2.14,
and 8.04, and the indemnities by the Banks in favor of the Agent and its
officers, directors, employees and agents, will survive the repayment of the
Advances and the termination of this Agreement


                                       89
<PAGE>

     Section 8.11. Borrowers' Right to Apply Deposits. In the event that any
Bank is placed in receivership or enters a similar proceeding, each Borrower
may, to the full extent permitted by law, make any payment due to such Bank
hereunder, to the extent of finally collected unrestricted deposits of such
Borrower in U.S. dollars held by such Bank, by giving notice to the Agent and
such Bank directing such Bank to apply such deposits to such indebtedness. If
the amount of such deposits is insufficient to pay such indebtedness then due
and owing in full, such Borrower shall pay the balance of such insufficiency in
accordance with this Agreement.

     Section 8.12. [Intentionally Omitted]

     Section 8.13. Confidentiality. Each Bank agrees that it will not disclose
without the prior consent of TWC (other than to employees, auditors,
accountants, counsel or other professional advisors of the Agent or any Bank)
any information with respect to the Borrowers or their Subsidiaries (which term,
in the case of TWC, shall be deemed to include the WCG Subsidiaries), which is
furnished pursuant to this Agreement and which (i) the Borrowers in good faith
consider to be confidential and (ii) is either clearly marked confidential or is
designated by the Borrowers to the Agent or the Banks in writing as
confidential, provided that any Bank may disclose any such information (a) as
has become generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony submitted to or required by
any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or submitted to or required by the Board of
Governors of the Federal Reserve System or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (c) as may be required or appropriate in response to any
summons or subpoena in connection with any litigation, (d) in order to comply
with any law, order, regulation or ruling applicable to such Bank, (e) to the
prospective transferee or grantee in connection with any contemplated transfer
of any of the Commitments or Advances or any interest therein by such Bank or
the grant of an option to an SPC to fund any Advance, provided that such
prospective transferee executes an agreement with or for the benefit of the
Borrowers containing provisions substantially identical to those contained in
this Section 8.13, and provided further that if the contemplated transfer is a
grant of a participation in a Note (and not an assignment), no such information
shall be authorized to be delivered to such participant pursuant to this clause
(e) except (i) such information delivered pursuant to Section 4.01(e) or Section
5.01(b) (other than paragraph (iv) thereof) and if the contemplated transfer is
a grant of an option to fund Advances to an SPC pursuant to Section 8.06(d),
such SPC may disclose, on a confidential basis, any non-public information
relating to Advances funded by it to any rating agency, commercial paper dealer
or provider of any surety, guaranty or credit or liquidity enhancement to such
SPC, and (ii) if prior notice of the delivery thereof is given to TWC, such
information as may be required by law or regulation to be delivered, (f) in
connection with the exercise of any remedy by such Bank following an Event of
Default pertaining to this Agreement, any of the Notes or any other document
delivered in connection herewith, (g) in connection with any litigation
involving such Bank pertaining to this Agreement, any of the Notes or any other
document delivered in connection herewith, (h) to any Bank or the Agent, or (i)
to any affiliate of any Bank, provided that such affiliate executes an agreement
with or for the benefit of the Borrowers containing provisions substantially
identical to those contained in this Section 8.13.


                                       90
<PAGE>

     Section 8.14. WAIVER OF JURY TRIAL. THE BORROWERS, THE AGENT, THE
CO-SYNDICATION AGENTS, THE DOCUMENTATION AGENT AND THE BANKS HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY NOTE, ANY OTHER CREDIT DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

     Section 8.15. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Credit Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

     Section 8.16. Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY CREDIT
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE AGENT, THE BANKS OR ANY BORROWER IN CONNECTION
HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE
OF NEW YORK SITTING IN THE COUNTY OF NEW YORK OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. THE BORROWERS IRREVOCABLY CONSENT TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION
8.02. THE BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH MAY HAVE OR HEREAFTER MAY HAVE TO
THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT SUCH BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER
HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THE CREDIT DOCUMENTS.

                  Section 8.17. Existing Defaults of No Effect. Any default
which has occurred and is continuing under the Existing Agreement, if any,
shall, upon the satisfaction of the conditions set forth in Section 3.01, be
deemed to be fully and completely remedied and of no


                                       91
<PAGE>

further force and effect, except to the extent that the event or condition
causing such default shall constitute a Default or an Event of Default under
this Agreement.



                              [Signatures follow.]


                                       92
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                    BORROWERS:

                                    THE WILLIAMS COMPANIES, INC.


                                    By     /s/ James G. Ivey
                                    Name:  James G. Ivey
                                    Title: Treasurer

                                    TEXAS GAS TRANSMISSION CORPORATION


                                    By     /s/ James G. Ivey
                                    Name:  James G. Ivey
                                    Title: Treasurer


                                    TRANSCONTINENTAL GAS PIPE LINE
                                    CORPORATION


                                    By     /s/ James G. Ivey
                                    Name:  James G. Ivey
                                    Title: Treasurer

                                    NORTHWEST PIPELINE CORPORATION


                                    By     /s/ James G. Ivey
                                    Name:  James G. Ivey
                                    Title: Treasurer


<PAGE>


                                    AGENT:

                                    CITICORP USA, INC., as Agent

                                    By     /s/ Todd J. Mogil
                                    Name:  Todd J. Mogil
                                    Title: Vice President


<PAGE>


                                    CO-SYNDICATION AGENTS:

                                    JPMORGAN CHASE BANK
                                    (formerly known as
                                    THE CHASE MANHATTAN BANK), as Co-Syndication
                                    Agent


                                    By     /s/ Robert W. Traband
                                    Name:  Robert W. Traband
                                    Title: Vice President


<PAGE>


                                    COMMERZBANK AG,
                                    as Co-Syndication Agent

                                    By     /s/ Harry Yergey
                                    Name:  Harry Yergey
                                    Title: Senior Vice Pres. and Manager

                                    By     /s/ Brian Campbell
                                    Name:  Brian Campbell
                                    Title: Senior Vice President


<PAGE>


                                    DOCUMENTATION AGENT:

                                    CREDIT LYONNAIS NEW YORK BRANCH
                                    as Documentation Agent

                                    By     /s/ Olivier Audemard
                                    Name:  Olivier Audemard
                                    Title: V.P.


<PAGE>



                                    BANKS:

                                    CITICORP USA, INC.

                                    By     /s/ Todd J. Mogil
                                    Name:  Todd J. Mogil
                                    Title: Vice President


<PAGE>



                                    THE BANK OF NOVA SCOTIA


                                    By
                                    Name:
                                    Title:


<PAGE>



                                    BANK OF AMERICA, N.A.

                                    By     /s/  Claire M. Liu
                                    Name:  Claire M. Liu
                                    Title: Managing Director


<PAGE>



                                    BANK ONE, N.A. (MAIN OFFICE - CHICAGO)


                                    By     /s/ Jeanie C. Gonzalez
                                    Name:  Jeanie C. Gonzalez
                                    Title: Director


<PAGE>



                                    JPMORGAN CHASE BANK
                                    (formerly known as
                                    THE CHASE MANHATTAN BANK)


                                    By   /s/  Robert W. Traband
                                    Name:  Robert W. Traband
                                    Title:  Vice President


<PAGE>



                                    COMMERZBANK AG
                                    NEW YORK AND GRAND CAYMAN BRANCHES

                                    By     /s/ Brian Campbell
                                    Name:  Brian Campbell
                                    Title: Senior Vice President

                                    By     /s/ W. David Suttles
                                    Name:  W. David Suttles
                                    Title:


<PAGE>



                                    CREDIT LYONNAIS NEW YORK BRANCH


                                    By     /s/ Olivier Audermard
                                    Name:  Olivier Audermard
                                    Title: Senior V.P.


<PAGE>



                                    ABN AMRO BANK, N.V.


                                    By     /s/ Frank R. Russo, Jr.
                                    Name:  Frank R. Russo, Jr.
                                    Title: Group Vice President

                                    By     /s/ Jeffrey G. White
                                    Name:  Jeffrey G. White
                                    Title: Vice President


<PAGE>



                                    BANK OF MONTREAL


                                    By     /s/ Mary Lee Latta
                                    Name:  Mary Lee Latta
                                    Title: Director


<PAGE>



                                    THE BANK OF NEW YORK


                                    By     /s/ Raymond J. Palmer
                                    Name:  Raymond J. Palmer
                                    Title: Vice President


<PAGE>



                                    BARCLAYS BANK PLC


                                    By     /s/ Nicholas A. Bell
                                    Name:  Nicholas A. Bell
                                    Title: Director


<PAGE>



                                    CIBC INC.


                                    By     /s/ George Knight
                                    Name:  George Knight
                                    Title: Managing Director


<PAGE>



                                    CREDIT SUISSE FIRST BOSTON


                                    By     /s/ James P. Moran
                                    Name:  James P. Moran
                                    Title: Director

                                    By     /s/ Ian W. Nalitt
                                    Name:  Ian W. Nalitt
                                    Title: Associate


<PAGE>



                                    ROYAL BANK OF CANADA


                                    By     /s/ Peter Barnes
                                    Name:  Peter Barnes
                                    Title: Senior Manager


<PAGE>



                                    THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                    HOUSTON AGENCY


                                    By     /s/ Kelton Glassock
                                    Name:  Kelton Glassock
                                    Title: Vice President and Manager


                                    By     /s/ Jay Fort
                                    Name:  Jay Fort
                                    Title: Vice President


<PAGE>



                                    FLEET NATIONAL BANK
                                    f/k/a Bank Boston, N.A.


                                    By     /s/ Matthew W. Speh
                                    Name:  Matthew W. Speh
                                    Title: Authorized Officer


<PAGE>



                                    SOCIETE GENERALE, SOUTHWEST AGENCY


                                    By     /s/ J. Douglas McMurrey, Jr.
                                    Name:  J. Douglas McMurrey, Jr.
                                    Title: Managing Director


<PAGE>



                                    TORONTO DOMINION (TEXAS), INC.


                                    By     /s/ Jill Hall
                                    Name:  Jill Hall
                                    Title: Vice President


<PAGE>



                                    UBS AG, STAMFORD BRANCH


                                    By
                                    Name:
                                    Title:

                                    By
                                    Name:
                                    Title:


<PAGE>



                                    WELLS FARGO BANK TEXAS, N.A.


                                    By     /s/ J. Alan Alexander
                                    Name:  J. Alan Alexander
                                    Title: Vice President


<PAGE>


                                    WESTLB AG, NEW YORK BRANCH


                                    By     /s/ Duncan M. Robertson
                                    Name:  Duncan M. Robertson
                                    Title: Director

                                    By
                                    Name:
                                    Title:


<PAGE>


                                    CREDIT AGRICOLE INDOSUEZ


                                    By     /s/ Larry Materi
                                    Name:  Larry Materi
                                    Title: Vice President

                                    By     /s/ Paul A. Dytrych
                                    Name:  Paul A. Dytrych
                                    Title: Vice President


<PAGE>



                                    SUNTRUST BANK


                                    By     /s/ Steven J. Newby
                                    Name:  Steven J. Newby
                                    Title: Director


<PAGE>



                                    ARAB BANKING CORPORATION (B.S.C.)


                                    By     /s/ Robert J. Ivosevich
                                    Name:  Robert J. Ivosevich
                                    Title: Deputy General Manager


                                    By     /s/ Barbara C. Sanderson
                                    Name:  Barbara C. Sanderson
                                    Title: VP Head of Credit


<PAGE>



                                    BANK OF CHINA, NEW YORK BRANCH


                                    By     /s/ William Warren Smith
                                    Name:  William Warren Smith
                                    Title: C.L.O.


<PAGE>



                                    BANK OF OKLAHOMA, N.A.


                                    By     /s/ Robert D. Mattax
                                    Name:  Robert D. Mattax
                                    Title: Senior Vice President


<PAGE>



                                    BNP PARIBAS, HOUSTON AGENCY


                                    By     /s/ Larry Robinson
                                    Name:  Larry Robinson
                                    Title: Vice President

                                    By     /s/ Mark A. Cox
                                    Name:  Mark A. Cox
                                    Title: Director


<PAGE>


                                    DZ BANK AG DEUTSCHE ZENTRAL-
                                    GENOSSENSCHAFTSBANK, NEW YORK BRANCH


                                    By     /s/ Mark Connelly
                                    Name:  Mark Connelly
                                    Title: Senior V.P.

                                    By     /s/ Richard W. Wilbert
                                    Name:  Richard W. Wilbert
                                    Title: Vice President


<PAGE>



                                    KBC BANK N.V.


                                    By     /s/ Robert Snauffer
                                    Name:  Robert Snauffer
                                    Title: First Vice President

                                    By     /s/ Eric Raskin
                                    Name:  Eric Raskin
                                    Title: Vice President


<PAGE>



                                    WACHOVIA BANK, N.A.


                                    By     /s/ David E. Humphreys
                                    Name:  David E. Humphreys
                                    Title: Vice President


<PAGE>



                                    MIZUHO CORPORATE BANK, LTD


                                    By     /s/ Jacques Azagury
                                    Name:  Jacques Azagury
                                    Title: Senior Vice President and Manager


<PAGE>



                                    SUMITOMO MITSUI BANKING CORPORATION


                                    By     /s/ Leo E. Pagarigan
                                    Name:  Leo E. Pagarigan
                                    Title: Senior Vice President


<PAGE>



                                    COMMERCE BANK, N.A.


                                    By     /s/ Dennis R. Block
                                    Name:  Dennis R. Block
                                    Title: Senior Vice President


<PAGE>



                                    ROYAL BANK OF SCOTLAND


                                    By     /s/ Charles Greer
                                    Name:  Charles Greer
                                    Title: Senior Vice President


<PAGE>


                                    RZB FINANCE, LLC


                                    By
                                    Name:
                                    Title:



<PAGE>

                                   SCHEDULE I

                           APPLICABLE LENDING OFFICES

<TABLE>
<CAPTION>
                                        Domestic                                          Eurodollar
Name of Bank                            Lending Office                                    Lending Office
- ------------                            -------------------------------------------       -----------------------------------------
<S>                                     <C>                                               <C>
Citicorp USA, Inc.                      Citicorp USA, Inc.                                Citicorp USA, Inc.
                                        399 Park Avenue                                   399 Park Avenue
                                        New York, New York  10043                         New York, New York  10043

                                        Notices:                                          Notices:
                                        Citicorp USA, Inc.                                Citicorp USA, Inc.
                                        c/o Citibank, N.A.                                c/o Citibank, N.A.
                                        Two Penns Way, Suite 200                          Two Penns Way, Suite 200
                                        New Castle, DE  19729                             New Castle, DE  19729
                                        Telecopier:  (302) 894-6120                       Telecopier:  (302) 894-6120
                                        Attn:  The Williams Companies, Inc.               Attn:  The Williams Companies, Inc.
                                               Account Officer                                   Account Officer

                                        with copy to:                                     with copy to:
                                        Citicorp North America, Inc.                      Citicorp North America, Inc.
                                        1200 Smith Street, Suite 2000                     1200 Smith Street, Suite 2000
                                        Houston, Texas  77002                             Houston, Texas  77002
                                        Telecopier:  (713) 654-2849                       Telecopier:  (713) 654-2849
                                        Telex:  127001                                    Telex:  127001
                                        (Attn.  Route Code HOUAA)                         (Attn. Route Code HOUAA)
                                        Attn:  The Williams Companies, Inc. Account       Attn:  The Williams Companies, Inc.
                                               Officer                                           Account Officer

Mizuho Corporate Bank, Limited          Mizuho Corporate Bank, Limited                    Mizuho Corporate Bank, Limited
New York Branch                         New York Branch                                   New York Branch
                                        1251 Avenue of the Americas                       1251 Avenue of the Americas
                                        New York, New York  10020                         New York, New York  10020

                                        Notices:                                          Notices:
                                        Mizuho Corporate Bank, Limited                    Mizuho Corporate Bank, Limited
                                        Harborside Financial Center, 17th Floor           Harborside Financial Center, 17th Floor
                                        1800 Plaza Ten                                    1800 Plaza Ten
                                        Jersey City, New Jersey  07311                    Jersey City, New Jersey  07311
                                        Telecopier:  (201) 626-9134                       Telecopier:  (201) 626-9134
                                        Telephone:   (201) 626-9943                       Telephone:   (201) 626-9943
                                        Attn:  Sophia White-Larmond                       Attn:  Sophia White-Larmond

                                        with copy to:                                     with copy to:
                                        Mizuho Corporate Bank, Limited                    Mizuho Corporate Bank, Limited
                                        One Houston Center                                One Houston Center
                                        1221 McKinney Street                              1221 McKinney Street
                                        Houston, Texas  77010                             Houston, Texas  77010
                                        Telecopier:  (713) 759-0717                       Telecopier:  (713) 759-0717
                                        Telephone:   (713) 650-7828                       Telephone:   (713) 650-7828
                                        Attn:  Scott Chappell                             Attn:  Scott Chappell
</TABLE>

                                  Exhibit F-1

<PAGE>

<TABLE>
<CAPTION>
                                        Domestic                                          Eurodollar
Name of Bank                            Lending Office                                    Lending Office
- ------------                            -------------------------------------------       -----------------------------------------
<S>                                     <C>                                               <C>
The Bank of Nova Scotia                 The Bank of Nova Scotia                           The Bank of Nova Scotia
                                        600 Peachtree Street, N.E., Suite 2700            600 Peachtree Street, N.E., Suite 2700
                                        Atlanta, Georgia  30308                           Atlanta, Georgia  30308
                                        Telecopier:  (404) 888-8998                       Telecopier:  (404) 888-8998
                                        Telex:  00542319                                  Telex:  00542319
                                        Attn:  Robert L. Ahern                            Attn:  Robert L. Ahern

                                        with copy to:                                     with copy to:
                                        1100 Louisiana, Suite 3000                        1100 Louisiana, Suite 3000
                                        Houston, Texas  77002                             Houston, Texas  77002
                                        Telecopier:  (713) 752-2425                       Telecopier:  (713) 752-2425
                                        Telephone:   (713) 759-3440                       Telephone:   (713) 759-3440
                                        Attn:                                             Attn:

Bank of America, N.A.                   Bank of America, N.A.                             Bank of America, N.A.
                                        901 Main Street, 14th Floor                       901 Main Street, 14th Floor
                                        Dallas, Texas 75202                               Dallas, Texas 75202
                                        Telecopier:  (214) 209-9415                       Telecopier:  (214) 209-9415
                                        Telephone:   (214) 209-1225                       Telephone:   (214) 209-1225
                                        Attn:  Brandi Baker                               Attn:  Brandi Baker

                                        with  copy to:                                    with  copy to:
                                        Bank of America                                   Bank of America
                                        333 Clay Street, Suite 4550                       333 Clay Street, Suite 4550
                                        Houston, Texas  77002                             Houston, Texas  77002
                                        Telecopier:  (713) 651-4807                       Telecopier:  (713) 651-4807
                                        Telephone:   (713) 651-4855                       Telephone:   (713) 651-4855
                                        Attn:  Claire Liu                                 Attn:  Claire Liu

Bank One, NA                            Bank One, NA                                      Bank One, NA
(Chicago)                               1 Bank One Plaza                                  1 Bank One Plaza
                                        0634, 1 FNP, 10                                   IL 10634
                                        Chicago, Illinois 60670                           Chicago, Illinois  60670
                                        Telephone:   (312) 732-5219                       Telephone:
                                        Telecopier:  (312) 732-4840                       Telecopier:
                                        Attn:                                             Attn:

JPMorgan Chase Bank                     JPMorgan Chase Bank                               JPMorgan Chase Bank
                                        270 Park Avenue, 21st Floor                       270 Park Avenue, 21st Floor
                                        New York, New York  10017                         New York, New York  10017
                                        Telecopier:  (212) 270-3897                       Telecopier:  (212) 270-3897
                                        Telephone:   (212) 270-4676                       Telephone:   (212) 270-4676
                                        Attn:  Peter Ling                                 Attn:  Peter Ling
</TABLE>

                                  Schedule I-2

<PAGE>

<TABLE>
<CAPTION>
                                        Domestic                                          Eurodollar
Name of Bank                            Lending Office                                    Lending Office
- ------------                            -------------------------------------------       -----------------------------------------
<S>                                     <C>                                               <C>
Commerzbank AG,                         Commerzbank AG, Atlanta Agency                    Commerzbank AG, Atlanta Agency
New York  and Grand                     1230 Peachtree St., NE                            1230 Peachtree St., NE
Cayman Branches                         Suite 3500                                        Suite 3500
                                        Atlanta, Georgia  30309                           Atlanta, Georgia  30309
                                        Telecopier:  (404) 888-6539                       Telecopier:  (404) 888-6539
                                        Telephone:   (404) 888-6518                       Telephone:   (404) 888-6518
                                        Attn:   Brian Campbell, Vice President            Attn:   Brian Campbell, Vice President
                                        email:  bcampbell@cbkna.com                       email:  bcampbell@cbkna.com

Credit Lyonnais                         Credit Lyonnais New York  Branch                  Credit Lyonnais New York  Branch
New York  Branch                        1301 Avenue of the Americas                       1301 Avenue of the Americas
                                        New York, New York  10019                         New York, New York  10019
                                        Telecopier:  (713) 759-9766                       Telecopier:  (713) 759-9766
                                        Telephone:   (713) 753-8723                       Telephone:   (713) 753-8723
                                        Attn:  Bernadette Archie                          Attn:  Bernadette Archie

The Fuji Bank, Limited                  The Fuji Bank, Limited                            The Fuji Bank, Limited
                                        2 World Trade Center, 79th Floor                  2 World Trade Center, 79tb Floor
                                        New York, New York  10048                         New York, New York  10048
                                        Telecopier:  (212) 488-8216                       Telecopier:  (212) 488-8216
                                        Telephone:   (212) 898-2099                       Telephone:   (212) 898-2099
                                        Attn:  Tina Catapano                              Attn:  Tina Catapano

National Westminster Bank PLC           National Westminster Bank PLC                     National Westminster Bank PLC
                                        New York  Branch                                  New York  Branch
                                        101 Park Avenue, 12th Floor                       101 Park Avenue, 12th Floor
                                        New York, New York  10178                         New York, New York  10178
                                        Telecopier:  (212) 401-1494                       Telecopier:  (212) 401-1494
                                        Telephone:   (212) 401-1406                       Telephone:   (212) 401-1406
                                        Attn:  Sheila Shaw                                Attn:  Sheila Shaw

                                        with copy to:                                     with copy to:
                                        National Westminster Bank PLC                     National Westminster Bank PLC
                                        600 Travis Street, Suite 6070                     600 Travis Street, Suite 6070
                                        Houston, Texas  77002                             Houston, Texas  77002
                                        Telecopier:  (713) 221-2430                       Telecopier:  (713) 221-2430
                                        Telephone:   (713) 221-2400                       Telephone:   (713) 221-2400
                                        Attn:  Jill Gander                                Attn:  Jill Gander

ABN AMRO Bank, N.V.                     ABN AMRO Bank, N.V.                               ABN AMRO Bank, N.V.
                                        208 South LaSalle, Suite 1500                     208 South LaSalle, Suite 1500
                                        Chicago, Illinois  60604-1003                     Chicago, Illinois  60604-1003
                                        Telecopier:  (312) 992-5157                       Telecopier:  (312) 992-5157
                                        Telephone:   (312) 992-5152                       Telephone:   (312) 992-5152
                                        Attn:  Loan Administration                        Attn:  Loan Administration
</TABLE>

                                  Schedule I-3

<PAGE>

<TABLE>
<CAPTION>
                                        Domestic                                          Eurodollar
Name of Bank                            Lending Office                                    Lending Office
- ------------                            -------------------------------------------       -----------------------------------------
<S>                                     <C>                                               <C>
                                        with copy to:                                     with copy to:
                                        ABN AMRO Bank, N.V.                               ABN AMRO Bank, N.V.
                                        208 South LaSalle, Suite 1500                     208 South LaSalle, Suite 1500
                                        Chicago, Illinois  60604-1003                     Chicago, Illinois  60604-1003
                                        Telecopier:  (312) 992-5111                       Telecopier:  (312) 992-5111
                                        Telephone:   (312) 992-5110                       Telephone:   (312) 992-5110
                                        Attn:  Connie Podgorny                            Attn:  Connie Podgorny

Bank of Montreal                        Bank of Montreal                                  Bank of Montreal
                                        115 S. LaSalle Street, 11th Floor                 115 S. LaSalle Street, 11th Floor
                                        Chicago, Illinois  60603                          Chicago, Illinois  60603
                                        Telecopier:  (312) 750-6061                       Telecopier:  (312) 750-6061
                                        Telephone:   (312) 750-3771                       Telephone:   (312) 750-3771
                                        Attn:  Keiko Kuze                                 Attn:  Keiko Kuze

The Bank of New York                    The Bank of New York                              The Bank of New York
                                        One Wall St., 19th Floor                          One Wall St., 19th Floor
                                        New York, New York  10286                         New York, New York  10286
                                        Telecopier:  (212) 635-7923                       Telecopier:  (212) 635-7923
                                        Telephone:   (212) 635-7834                       Telephone:   (212) 635-7834
                                        Attn:  Raymond Palmer                             Attn:  Raymond Palmer

Barclays Bank PLC                       Barclays Bank PLC - New York  Branch              Barclays Bank PLC - New York  Branch
                                        222 Broadway, 11th Floor                          222 Broadway, 11th Floor
                                        New York, New York  10038                         New York, New York  10038
                                        Telecopier:  (212) 412-5308                       Telecopier:  (212) 412-5308
                                        Telephone:   (212) 412-3702                       Telephone:   (212) 412-3702
                                        Attn:  David Barton                               Attn:  David Barton

CIBC Inc.                               CIBC Inc.                                         CIBC Inc.
                                        Two Paces West                                    Two Paces West
                                        2727 Paces Ferry Road, Suite 1200                 2727 Paces Ferry Road, Suite 1200
                                        Atlanta, Georgia  30339                           Atlanta, Georgia  30339
                                        Telecopier:  (770) 319-4950                       Telecopier:  (770) 319-4950
                                        Telephone:   (770) 319-4828                       Telephone:   (770) 319-4828
                                        Attn:  Anita Rounds                               Attn:  Anita Rounds

                                        with a copy to:                                   with a copy to:
                                        1600 Smith, Suite 3000                            1600 Smith, Suite 3000
                                        Houston, Texas  77002                             Houston, Texas  77002
                                        Telecopier:  (713) 650-3727                       Telecopier:  (713) 650-3727
                                        Telephone:   (713) 650-2588                       Telephone:   (713) 650-2588
                                        Attn:  Mark H. Wolf                               Attn:  Mark H. Wolf

Credit Suisse First Boston              Credit Suisse First Boston                        Credit Suisse First Boston
                                        11 Madison Avenue                                 11 Madison Avenue
                                        New York, New York  10010                         New York, New York  10010
                                        Telecopier:  (212) 335-0593                       Telecopier:  (212) 335-0593
                                        Telephone:   (212) 322-1384                       Telephone:   (212) 322-1384
                                        Attn:  Jenaro Sarasola                            Attn:  Jenaro Sarasola
</TABLE>

                                  Schedule I-4

<PAGE>

<TABLE>
<CAPTION>
                                        Domestic                                          Eurodollar
Name of Bank                            Lending Office                                    Lending Office
- ------------                            -------------------------------------------       -----------------------------------------
<S>                                     <C>                                               <C>
Royal Bank of Canada                    Royal Bank of Canada, New York                    Royal Bank of Canada, New York
                                        One Liberty Plaza, 4th Floor                      One Liberty Plaza, 4th Floor
                                        New York, New York  10006                         New York, New York  10006
                                        Telecopier:  (416) 955-6720                       Telecopier:  (416) 955-6720
                                        Telephone:   (416) 955-6569                       Telephone:   (416) 955-6569
                                        Attn:  Linda Joannou,                             Attn:  Linda Joannou,
                                               Loan Processing                                   Loan Processing

The Bank of Tokyo-                      The Bank of Tokyo-Mitsubishi, Ltd.,               The Bank of Tokyo-Mitsubishi, Ltd.,
Mitsubishi, Ltd.,                       Houston Agency                                    Houston Agency
Houston Agency                          1100 Louisiana Street, Suite 2800                 1100 Louisiana Street, Suite 2800
                                        Houston, Texas  77002-5216                        Houston, Texas  77002-5216
                                        Telecopier:  (713) 655-3855                       Telecopier:  (713) 655-3855
                                        Telephone:   (713) 655-3845                       Telephone:   (713) 655-3845
                                        Attn:  J.M. McIntyre                              Attn:  J.M. McIntyre

Fleet National Bank,                    Fleet National Bank                               Fleet National Bank
f/k/a BankBoston, N.A.                  100 Federal Street, MA DE 10006A                  100 Federal Street, MA DE 10006A
                                        Boston, MA  02110                                 Boston, MA  02110
                                        Telecopier:  (617) 434-4775                       Telecopier:  (617) 434-4775
                                        Telephone:   (617) 434-5327                       Telephone:   (617) 434-5327
                                        Attn:  Lynn Duncan, Loan Administrator            Attn:  Lynn Duncan, Loan Administrator

Societe Generale,                       Societe Generale, Southwest Agency                Societe Generale, Southwest Agency
Southwest Agency                        2001 Ross Avenue, Suite 4800                      2001 Ross Avenue, Suite 4800
                                        Dallas, Texas  75201                              Dallas, Texas  75201
                                        Telecopier:  (214) 754-0171                       Telecopier:  (214) 754-0171
                                        Telephone:   (214) 979-2749                       Telephone:   (214) 979-2749
                                        Attn:  Stacie Row                                 Attn:  Stacie Row

Industrial Bank of Japan                Industrial Bank of Japan Trust Company            Industrial Bank of Japan Trust Company
Trust Company                           1251 Avenue of the Americas                       1251 Avenue of the Americas
                                        New York, New York  10020                         New York, New York  10020
                                        Telecopier:  (212) 282-4480                       Telecopier:  (212) 282-4480
                                        Telephone:   (212) 282-4065                       Telephone:   (212) 282-4065
                                        Attn:  Andrew Encarnacion                         Attn:  Andrew Encarnacion

Toronto Dominion (Texas), Inc.          Toronto Dominion (Texas), Inc.                    Toronto Dominion (Texas), Inc.
                                        909 Fannin Street, 17th Floor                     909 Fannin Street, 17th Floor
                                        Houston, Texas  77010                             Houston, Texas  77010
                                        Swift Address:  TDOMU S4H                         Swift Address:    TDOMU S4H
                                        Telecopier:  (713) 951-9921                       Telecopier:  (713) 951-9921
                                        Attn:  Azar Azarpour                              Attn:  Azar Azarpour

UBS AG, Stamford Branch                 UBS AG, Stamford Branch                           UBS AG, Stamford Branch
                                        677 Washington Boulevard                          677 Washington Boulevard
                                        Stamford, Connecticut  06901                      Stamford, Connecticut  06901
                                        Telecopier:  (203) 719-4176                       Telecopier:  (203) 719-4176
                                        Telephone:   (203) 719-4181                       Telephone:   (203) 719-4181
                                        Attn:  Barry Kohler                               Attn:  Barry Kohler
</TABLE>

                                  Schedule I-5

<PAGE>

<TABLE>
<CAPTION>
                                        Domestic                                          Eurodollar
Name of Bank                            Lending Office                                    Lending Office
- ------------                            -------------------------------------------       -----------------------------------------
<S>                                     <C>                                               <C>
Wells Fargo Bank                        Wells Fargo Bank, N.A.                            Wells Fargo Bank, N.A.
Texas, N.A.                             1740 Broadway                                     1740 Broadway
                                        Denver, CO  80274                                 Denver, CO  80274
                                        Telecopier:  (303) 863-2729                       Telecopier:  (303) 863-2729
                                        Telephone:   (303) 863-6102                       Telephone:   (303) 863-6102
                                        Attn:  Tanya Ivie                                 Attn:  Tanya Ivie

SunTrust Bank                           SunTrust Bank                                     SunTrust Bank
                                        303 Peachtree Street N.E., 4th Floor              303 Peachtree Street N.E., 4th Floor
                                        Atlanta, Georgia  30308                           Atlanta, Georgia  30308
                                        Telecopier:  (404) 230-1800                       Telecopier:  (404) 230-1800
                                        Telephone:   (404) 658-4916                       Telephone:   (404) 658-4916
                                        Attn:  Steve Newby                                Attn:  Steve Newby

Westdeutsche Landesbank                 Westdeutsche Landesbank Girozentrale,             Westdeutsche Landesbank Girozentrale,
Girozentrale, New York                  New York  Branch                                  New York  Branch
Branch                                  1211 Avenue of the Americas                       1211 Avenue of the Americas
                                        New York, New York  10036                         New York, New York  10036
                                        Telecopier:  (212) 852-6307                       Telecopier:  (212) 852-6307
                                        Telephone:   (212) 852-6096                       Telephone:   (212) 852-6096
                                        Attn:                                             Attn:

Credit Agricole Indosuez                Credit Agricole Indosuez                          Credit Agricole Indosuez
                                        Texas  Commerce Tower                             Texas  Commerce Tower
                                        600 Travis, Suite 2340                            600 Travis, Suite 2340
                                        Houston, Texas  77002                             Houston, Texas  77002
                                        Telecopier:  (713) 223-7029                       Telecopier:  (713) 223-7029
                                        Telephone:   (713) 223-7001                       Telephone:   (713) 223-7001
                                        Attn:  Brian Knezeak                              Attn:  Brian Knezeak

The Dai-Ichi Kangyo                     The Dai-Ichi Kangyo Bank, Ltd.                    The Dai-Ichi Kangyo Bank, Ltd.
Bank, Ltd.                              One World Trade Center, 48th Floor                One World Trade Center, 48th Floor
                                        New York, New York  10048                         New York, New York  10048
                                        Telecopier:  (212) 912-1879                       Telecopier:  (212) 912-1879
                                        Telephone:   (212) 432-6627                       Telephone:   (212) 432-6627
                                        Attn:  Katsuya Noto                               Attn:  Katsuya Noto

Arab Banking Corporation                Arab Banking Corp.                                Arab Banking Corp.  (Grand Cayman)
(B.S.C.)                                277 Park Avenue, 32nd Floor                       277 Park Avenue, 32nd Floor
                                        New York, New York  10172                         New York, New York  10172
                                        Telecopier:  (212) 583-0932                       Telecopier:  (212) 583-0932
                                        Telephone:   (212) 583-4770                       Telephone:   (212) 583-4770
                                        Attn:  R.S. Hassan                                Attn:  R.S. Hassan

Bank of China, New York                 Bank of China, New York  Branch                   Bank of China, New York  Branch
Branch                                  410 Madison Avenue                                410 Madison Avenue
                                        New York, New York  10017                         New York, New York  10017
                                        Telecopier:  (212) 308-4993 or                    Telecopier:  (212) 308-4993 or
                                                     (212) 688-0919                                    (212) 688-0919
                                        Telephone:   (212) 935-3101 x 256                 Telephone:   (212) 935-3101 x 256
                                        Telex:  ITT 423635                                Telex:  ITT 423635
                                        Attn:  Shelly Lang                                Attn:  Shelly Lang
</TABLE>

                                  Schedule I-6

<PAGE>

<TABLE>
<CAPTION>
                                        Domestic                                          Eurodollar
Name of Bank                            Lending Office                                    Lending Office
- ------------                            -------------------------------------------       -----------------------------------------
<S>                                     <C>                                               <C>
Bank of Oklahoma, N.A.                  Bank of Oklahoma, N.A.                            Bank of Oklahoma, N.A.
                                        One Williams Center, 8th Floor                    One Williams Center, 8th Floor
                                        Tulsa, Oklahoma  74192                            Tulsa, Oklahoma  74192
                                        Telecopier:  (918) 588-6880                       Telecopier:  (918) 588-6880
                                        Telephone:   (918) 588-6217                       Telephone:   (918) 588-6217
                                        Attn:  Robert Mattax                              Attn:  Robert Mattax

BNP Paribas,                            BNP Paribas, Houston Agency                       BNP Paribas, Houston Agency
Houston Agency                          333 Clay Street, Suite 3400                       333 Clay Street, Suite 3400
                                        Houston, Texas  77002                             Houston, Texas  77002
                                        Telecopier:  (713) 659-1414                       Telecopier:  (713) 659-1414
                                        Telephone:   (713) 951-1240                       Telephone:   (713) 951-1240
                                        Attn:  Donna Rose                                 Attn:  Donna Rose

DZ Bank                                 DZ Bank                                           DZ Bank
                                        609 Fifth Avenue                                  609 Fifth Avenue
                                        New York, New York  10017                         New York, New York  10017
                                        Telecopier:  (212) 745-1556                       Telecopier:  (212) 745-1556
                                        Telephone:   (212) 745-1560                       Telephone:   (212) 745-1560
                                        Attn:  Mark K. Connelly                           Attn:  Mark K. Connelly

KBC Bank N.V., New York                 KBC Bank N.V., New York  Branch                   KBC Bank N.V., New York  Branch
Branch                                  125 West 55th Street                              125 West 55th Street
                                        New York, New York  10019                         New York, New York  10019
                                        Telecopier:  (212) 956-5581                       Telecopier:  (212) 956-5581
                                        Telephone:   (212) 541-0653                       Telephone:   (212) 541-0653
                                        Attn:  Charlene Cumberbatch/                      Attn:  Charlene Cumberbatch/
                                               Loan Administration                               Loan Administration

The Sumitomo Bank,                      The Sumitomo Bank, Limited                        The Sumitomo Bank, Limited
Limited                                 277 Park Avenue                                   277 Park Avenue
                                        New York, New York  10172                         New York, New York  10172
                                        Telex:  SUMBK 420515/SUMBK                        Telex:  SVMBK 420515/SUMBK
                                        Telecopier:  (212) 224-5197                       Telecopier:  (212) 224-5197

                                        with copy to:                                     with copy to.
                                        The Sumitomo Bank, Limited                        The Sumitomo Bank, Limited
                                        277 Park Avenue                                   277 Park Avenue
                                        New York, New York  10172                         New York, New York  10172
                                        Telecopier:  (212) 224-4384                       Telecopier:  (212) 224-4384
                                        Telephone:   (212) 224-4194                       Telephone:   (212) 224-4194
                                        Attn:  Mr. Bruce Meredith                         Attn:  Mr. Bruce Meredith

Commerce Bank, N.A.                     Commerce Bank, N.A.                               Commerce Bank, N.A.
                                        1000 Walnut Street, 17th Floor                    1000 Walnut Street, 17th Floor
                                        Kansas City, Missouri  64106                      Kansas City, Missouri  64106
                                        Telecopier:  (816) 234-7290                       Telecopier:  (816) 234-7290
                                        Telephone:   (816) 234-2477                       Telephone:   (816) 234-2477
                                        Attn:  Dennis R. Block                            Attn:  Dennis R. Block
</TABLE>

                                  Schedule I-7

<PAGE>

<TABLE>
<CAPTION>
                                        Domestic                                          Eurodollar
Name of Bank                            Lending Office                                    Lending Office
- ------------                            -------------------------------------------       -----------------------------------------
<S>                                     <C>                                               <C>
Wachovia Bank, National Association     Wachovia Bank, National Association               Wachovia Bank, National Association
                                        1001 Fannin Street, Suite 2255                    1001 Fannin Street, Suite 2255
                                        Houston, TX  77002                                Houston, TX  77002
                                        Telecopier:  (713) 346-2717                       Telecopier:  (713) 346-2717
                                        Telephone:   (713) 650-6354                       Telephone:   (713) 650-6354
                                        Attn:  David Humphreys                            Attn:  David Humphreys

RZB Finance LLC                         RZB Finance LLC                                   RZB Finance LLC
                                        1133 Avenue of the Americas, 16th Floor           1133 Avenue of the Americas, 16th Floor
                                        New York, New York  10036                         New York, New York  10036
                                        Telecopier:  (212) 944-2143                       Telecopier:  (212) 944-2143
                                        Telephone:   (212) 845-4593                       Telephone:   (212) 845-4593
                                        Attn:  Elisabeth Hirst                            Attn:  Elisabeth Hirst
</TABLE>

                                  Schedule I-8

<PAGE>

                                   SCHEDULE II

                              BORROWER INFORMATION
<TABLE>
<CAPTION>
Name of Borrower                                             Information for Notices
- ----------------                                             -----------------------
<S>                                                          <C>
The Williams Companies, Inc.                                 The Williams Companies, Inc.
                                                             One Williams Center, Suite 5000
                                                             Tulsa, Oklahoma  74172
                                                             Attention:  Patti J. Kastl
                                                             Telecopier: (918) 573-2065
                                                             Telephone:  (918) 573-2172

Northwest Pipeline Corporation                               Northwest Pipeline Corporation
                                                             295 Chipeta Way
                                                             Salt Lake City, Utah  84158-0900
                                                             Attention:  Ronald E. Houston
                                                             Telecopier: (801) 584-7255

Transcontinental Gas Pipe Line Corporation                   Transcontinental Gas Pipe Line Corporation
                                                             P.O. Box 1396, MD 1060, Level 17
                                                             Houston, Texas  77251
                                                             Attention:  Jeffrey P. Heinrichs
                                                             Telecopier: (713) 215-3309

Texas Gas Transmission Corporation                           Texas Gas Transmission Corporation
                                                             3800 Frederica St.
                                                             Owensboro, Kentucky  42302
                                                             Attention:  Susanne W. Harris
                                                             Telecopier: (270) 688-6392
</TABLE>



<PAGE>


                                  SCHEDULE III

                          OUTSTANDING LETTERS OF CREDIT
<PAGE>


                                   SCHEDULE IV

                                EXISTING PROJECTS

1.    Gulfstream

2.    Devil's Tower

3.    PIGAP II Project

4.    Gulf Liquids


                                Schedule IV - 1



<PAGE>



                                   SCHEDULE V

                                  STORAGE LEASE


On July 18, 2001 Williams Midstream Natural Gas Liquids, Inc. ("WMNGL"), as
sublessor, and Liberty Gas Storage LLC ("Liberty"), as sublessee, entered into a
sublease agreement whereby, upon satisfaction of certain conditions precedent by
the sublessee, WMNGL would sublease certain sulphur mines located in Calcasieu,
Louisiana to Liberty for the development of natural gas storage facilities.


                                 Schedule V - 1
<PAGE>


                         SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

                  This Subordination, Non-Disturbance and Attornment Agreement
(this "Agreement"), is dated as of ____________ , 2002, by and between LIBERTY
GAS STORAGE PARTNERS, L.P., a Delaware limited partnership ("Liberty"), and
CITIBANK, N.A., as collateral agent (the "Agent") for certain lenders (the
"Lenders") described below.


                                    RECITALS

                  A. WHEREAS, Liberty is the sublessee (by assignment from
Liberty Gas Storage LLC, a Delaware limited liability company) under the
Sublease Agreement dated July 18, 2001 (the "Sublease"), with WILLIAMS MIDSTREAM
NATURAL GAS LIQUIDS, INC., a Delaware corporation ("Williams"), as sublessor.
The Sublease covers a portion of certain lands, including pipeline corridors and
access rights of way, as well as certain salt caverns located thereon and
associated equipment, insofar and only insofar as same affect the following
described property situated in the Parish of Calcasieu, Louisiana:

                  [Part of Sections 17, 20, 29, 32, Township 9 South, Range 10
                  West, and more particularly described on Exhibit A-1, and
                  shown on Exhibit A-5 attached hereto and made a part hereof.]
                  [verify]

The term "Liberty Leased Assets" shall mean such property subleased by Williams
to Liberty, as described and defined in the Sublease.

                  B. The subleasehold estate created by the Sublease is a
portion of the leasehold estate created by the Lease Agreement dated January 1,
1991 (the "Burlington Lease") between Union Texas Petroleum Corporation and
Union Texas Products Corporation, recorded in Conveyance Book 2235, page 260,
under Clerk's File No. 2085889, in Calcasieu Parish, Louisiana. By various
intermediate conveyances, the current lessor under the Burlington Lease is
Burlington Resources Corporation [verify] and the current lessee under the
Burlington Lease is Williams.

                  C. Williams has granted a mortgage dated __________, 2002
(the "Mortgage") recorded in Mortgage Book ___ , Page ___ , under Clerk File
No. ___, in Calcasieu Parish, Louisiana, encumbering the leasehold estate and
other rights of Williams under the Burlington Lease to the Agent, for the
benefit of the Lenders from time to time parties ______________________
[INSERT description of loan].


                                 Schedule V - 2
<PAGE>

                  D. WHEREAS, Liberty has requested that the Agent agree not to
disturb Liberty's possessory rights in the Liberty Leased Assets in the event
the Agent should foreclose on the Mortgage, provided the Sublease is then in
full force and effect and provided further that Liberty attorns to the Agent or
the purchaser at any foreclosure sale of the leasehold estate under the
Burlington Lease.

                                    AGREEMENT

                  NOW, THEREFORE, in consideration of the foregoing, Liberty and
Agent hereby agree as follows:

                  Section 1. Subordination. Subject to the express terms of this
Agreement, Liberty agrees that the Sublease, as the same may be modified,
amended or extended, and the subleasehold estate created thereby, and all of the
rights, remedies and options of Liberty thereunder, are and shall at all times
continue to be subject and subordinate in all respects to the Mortgage and the
lien thereof, and to all rights of Agent thereunder, including, without
limitation, all renewals, increases, modifications, consolidations and
extensions thereof.

                  Section 2. Non-Disturbance. Agent agrees that if any action or
proceeding is commenced by Agent for the foreclosure of the Mortgage and the
seizure and sale of the Liberty Leased Assets as part of the leasehold estate
under the Burlington Lease, or if Agent acquires the Liberty Leased Assets,
whether through foreclosure or deed in lieu of foreclosure (or dation en
paiement), Agent shall maintain Liberty in possession under the terms of the
Sublease, provided that at such time the Sublease shall be in full force and
effect and shall not have expired or been terminated.

                  Section 3. Attornment. Liberty agrees that if the Agent, any
of the Lenders or a purchaser at a sheriff's sale (each a "Transferee") shall
become the owner of the Liberty Leased Assets by reason of the foreclosure of
the Mortgage or the acceptance of a deed in lieu of foreclosure (or dation en
paiement) (a "Transfer Event"), and provided that at such time the Sublease
shall be in full force and effect and shall not have expired or been terminated,
the Sublease shall not be terminated or affected thereby, but shall continue in
full force and effect as a direct sublease between Liberty and such Transferee
upon all the terms, covenants and conditions set forth in the Sublease. Upon
such a Transfer Event, Liberty agrees to attorn to such Transferee as sublessor
under the Sublease, and to be bound by and perform all of the obligations
imposed by the Sublease on the sublessee thereunder. Also, upon such a Transfer
Event, the Transferee will be bound by all of the obligations imposed by the
Sublease on the sublessor; provided, however, that such Transferee shall not be:
(i) liable for any act or omission of Williams, provided that the foregoing
shall not be deemed to relieve such Transferee from the obligation to perform
any obligation of the sublessor under the Sublease which obligation (a)


                                 Schedule V - 3
<PAGE>

remains unperformed at the time that such Transferee succeeds to the interest of
sublessor under the Sublease and (b) is made known to Transferee and Transferee
is provided notice and given the same opportunity to cure as afforded Williams
under the Sublease; or (ii) bound by any rent which Liberty might have paid
under the Sublease for more than one month in advance, unless actually received
by such Transferee; or (iii) bound by any amendment or modification of the
Sublease that could have a material adverse affect on Agent's rights as a
secured party; or (iv) subject to any offsets or defenses that Liberty might
have against Williams (or any prior sublessor, if applicable) unless Transferee
has been given written notice thereof and the same opportunity to cure as
afforded Williams under the Sublease.

                  Section 4. Covenants of Liberty. Liberty covenants and agrees
that contemporaneously with any written notice sent by Liberty to Williams of a
default by Williams under the Sublease, Liberty shall contemporaneously send a
copy of such default notice to the Agent.

                  Section 5. Disclaimer by Agent. Notwithstanding any of the
provisions hereof, Agent shall have no obligation in favor of Liberty to perform
any term, covenant or condition contained in the Sublease, unless and until
Agent acquires ownership of the Liberty Leased Assets through foreclosure, deed
in lieu of foreclosure (or dation en paiement) or otherwise.

                  Section 6. New Lease. Upon the written request of either
Liberty or a Transferee to the other given within thirty (30) days after any
Transfer Event, Liberty and such Transferee shall execute a new sublease of the
Liberty Leased Assets upon the same terms and conditions as the Sublease, which
new sublease shall cover any unexpired term of the Sublease existing prior to
such Transfer Event.

                  Section 7. Notices. Any notice or other communication required
or permitted to be given pursuant to this Agreement shall be in writing and
shall be considered as properly dispatched if delivered in person, sent by a
nationally recognized overnight courier (fee prepaid), mailed by certified mail
(postage prepaid return receipt requested), or transmitted by telecopier to the
address as set forth below. The following are the addresses of the parties:

                  LIBERTY:

                                    Liberty Gas Storage Partners, L.P.
                                    2929 BriarPark, Suite 140
                                    Houston, Texas 77042
                                    Attention: ____________________
                                    Facsimile: (713) 781-4966



                                 Schedule V - 4
<PAGE>

                  AGENT:
                  Citibank, N. A.
                  Collateral Trustee
                  111 Wall Street
                  New York, New York 10043
                  telecopier number: (212) 657-3862
                  Attention: Edward Morelli


                  with a copy to:
                  Citicorp North America, Inc.,
                  1200 Smith Street, Suite 2000
                  Houston, Texas 77002
                  telecopier number: (713) 654-2849)
                  Attention: The Williams Companies, Inc. Account Officer


                  Section 8. Amendment. Neither this Agreement nor any
provisions hereof may be changed, waived, discharged or terminated orally or in
any manner other than by an instrument in writing signed by the party against
whom enforcement of the change, waiver, discharge or termination is sought.

                  SECTION 9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA, EXCLUDING
THE LOUISIANA LAW OF CONFLICTS.

                  Section 10. Successors. This Agreement shall inure to the
benefit of the parties hereto and their respective successors and assigns.

                  Section 11. Counterparts. This Agreement may be executed in
two or more counterparts, and it shall not be necessary that the signatures of
all parties hereto be contained on any one counterpart hereof; each counterpart
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

                  Executed by the duly authorized representatives of Liberty and
the Agent as of the date hereinabove first written.



                                 Schedule V - 5
<PAGE>



                                       LIBERTY GAS STORAGE ____________


                                       By:________________________________,

                                             Its:____________________________

                                             By:_____________________________

                                                Name:________________________

                                                Title:_______________________




                          CITIBANK, as Collateral Agent



                                       By:__________________________________

                                             Name:__________________________

                                             Title:_________________________



                                 Schedule V - 6
<PAGE>


STATE OF TEXAS
COUNTY OF __________


               BEFORE ME, the undersigned Notary Public duly commissioned
qualified and sworn within and for the State and County written above,
personally came and appeared _______________, to me personally known, and who
being by me duly sworn, did say that he is the authorized ____________ of
_______________________, the _________ of LIBERTY GAS STORAGE
______________________, whose name is subscribed to the foregoing Subordination,
Non-Disturbance and Attornment Agreement, and that he executed the foregoing
Subordination, Non-Disturbance and Attornment Agreement by authority of said
company's __________________ on behalf of said company as its free act and deed.


               THUS DONE AND SIGNED before me and the two undersigned witnesses
in the County and State aforesaid, on this ___ day of [___________], 2002.
Witness my hand and official seal.

WITNESSES:





- --------------------------                         -------------------------

Name:                                              Name:
      --------------------                               -------------------





- --------------------------

Name:
      --------------------



                       ----------------------------------
                                  NOTARY PUBLIC




                                 Schedule V - 7
<PAGE>

                                                  Seal

                                                  My Commission expires:




                                 Schedule V - 8
<PAGE>



STATE OF NEW YORK

COUNTY OF NEW YORK



               BEFORE ME, the undersigned Notary Public duly commissioned
qualified and sworn within and for the State and County written above,
personally came and appeared _______________, to me personally known, and who
being by me duly sworn, did say that he is the authorized ____________ of
CITIBANK, N.A., as Collateral Agent, whose name is subscribed to the foregoing
Subordination, Non-Disturbance and Attornment Agreement, and that he executed
the foregoing Subordination, Non-Disturbance and Attornment Agreement by
authority of said company's __________________ on behalf of said company as its
free act and deed.

               THUS DONE AND SIGNED before me and the two undersigned witnesses
in the County and State aforesaid, on this ___ day of [___________], 2002.
Witness my hand and official seal.

WITNESSES:





- --------------------------                         -------------------------

Name:                                              Name:
      --------------------                               -------------------





- --------------------------

Name:
      --------------------



                       ----------------------------------
                                  NOTARY PUBLIC


                                 Schedule V - 9
<PAGE>


                                                  Seal

                                                  My Commission expires:




                                Schedule V - 10
<PAGE>


                                   EXHIBIT A-1

                    [Attach legal description from Sublease]


                                Schedule V - 11
<PAGE>

                                   SCHEDULE VI

                                 PERMITTED LIENS


(a) (i) Any Lien existing on any property at the time of the acquisition thereof
and not created in contemplation of such acquisition by any Borrower or any of
its Subsidiaries, whether or not assumed by any Borrower or any of its
Subsidiaries, (ii) purchase money, construction or analogous Liens securing
obligations incurred in connection with or financing the direct or indirect
costs of or relating to the acquisition, construction (including design,
engineering, installation, testing and other related activities), development
(including drilling), improvement, repair or replacement of property (including
such Liens securing Debt or other obligations incurred in connection with the
foregoing or within 30 days of the later of (x) the date on which such Property
was acquired or construction, development, improvement, repair or replacement
thereof was complete or (y) if applicable, the final "in service" date for
commencement of full operations of such property), provided that all such Liens
attach only to the property acquired, constructed, developed, improved or
repaired or constituting replacement property, and the principal amount of the
Debt or other obligations secured by such Lien, together with the principal
amount of all other Debt secured by a Lien on such property, shall not exceed
the gross acquisition, construction, replacement and other costs specified above
of or for the property, (iii) Liens on receivables created pursuant to a sale,
securitization or monetization of such receivables, and Liens on rights of any
Borrower or any Subsidiary related to such receivables which are transferred to
the purchaser of such receivables in connection with such sale, securitization
or monetization; provided that the Liens secure only the obligations of any
Borrower or any of its Subsidiaries in connection with such sale, securitization
or monetization, (iv) Liens created by or reserved in any operating lease
(whether for real or personal property) entered into in the ordinary course of
business (excluding Synthetic Leases) provided that the Liens created thereby
(1) attach only to the Property leased to any Borrower or one of its
Subsidiaries, pursuant to such operating lease and (2) secure only the
obligations under such lease and supporting documents that do not create
obligations other than with respect to the leased property (including for rent
and for compliance with the terms of the lease), (v) Liens on property subject
to a Capital Lease created by such Capital Lease and securing only obligations
under such Capital Lease and supporting documents that do not create obligations
other than with respect to the leased property, (vi) any interest or title of a
lessor in the property subject to any Capital Lease, Synthetic Lease or
operating lease, (vii) Liens in the form of filed Uniform Commercial Code or
personal property security statements (or similar filings outside Canada and the
United States) to perfect any Permitted Lien, and (viii) Liens on up to four
aircraft owned or leased by any Borrower or any Subsidiary of any such Borrower.

(b) Any Lien existing on any property of a Subsidiary of any Borrower at the
time it becomes a Subsidiary of such Borrower and not created in contemplation
thereof and any Lien existing on any property of any Person at the time such
Person is merged or liquidated into or consolidated with any such Borrower or
any Subsidiary thereof and not created in contemplation thereof.

(c) Mechanics', materialmen's, workmen's, warehousemen's, carrier's, landlord's
or other similar Liens arising in the ordinary course of business securing
amounts incurred in the ordinary


                                Schedule VI - 1
<PAGE>

course of business which are not more than 90 days past due or are being
contested in good faith by appropriate proceedings.

(d) Liens arising by reason of pledges, deposits or other security to secure
payment of workmen's compensation insurance or unemployment insurance, pension
plans or systems and other types of social security, and good faith deposits or
other security to secure tenders or leases of property or bids, in each case to
secure obligations of any Borrower or any of its Subsidiaries under such
insurance, tender, lease, bid or contract, as the case may be; provided,
however, that the only Liens permitted by this paragraph (d) shall be Liens
incurred in the ordinary course of business that do not secure any Debt or
accounts payable (other than accounts payable to the counterparties or obligees
applicable to the foregoing).

(e) Liens on deposits or other security given to secure public or statutory
obligations, or to secure or in lieu of surety bonds (other than appeal bonds)
and deposits as security for the payment of taxes or assessments or other
similar charges, in each case to secure obligations of any Borrower or any of
its Subsidiaries arising in the ordinary course of business; provided, however,
that the aggregate amount of obligations secured by Liens permitted by this
paragraph (e) shall not exceed 10% of Consolidated Tangible Net Worth of the
Borrower.

(f) Any Lien arising by reason of deposits with or the giving of any form of
security to any governmental agency or any body created or approved by law or
governmental regulation for any purpose at any time as required by law or
governmental regulation (i) as a condition to the transaction by any Borrower or
any of its Subsidiaries of any business or the exercise by any Borrower or any
of its Subsidiaries of any privilege or license, (ii) to enable any Borrower or
any of its Subsidiaries to maintain self-insurance or to participate in any fund
for liability on any insurance risks or (iii) in connection with workmen's
compensation, unemployment insurance, old age pensions or other social security
with respect to any Borrower or any of its Subsidiaries to share in the
privileges or benefits required for companies participating in such
arrangements.

(g) Liens incurred in the ordinary course of business upon rights-of-way
securing obligations (other than Debt and trade payables) of any Borrower or any
of its Subsidiaries.

(h) Undetermined mortgages and charges incidental to construction or maintenance
arising in the ordinary course of business which are not more than 90 days past
due or are being contested in good faith by appropriate proceedings.

(i) The right reserved to, or vested in, any municipality or governmental or
other public authority or railroad by the terms of any right, power, franchise,
grant, license, permit or by any provision of law, to terminate or to require
annual or other periodic payments as a condition to the continuance of such
right, power, franchise, grant, license or permit.

(j) The Lien of taxes, customs duties or other governmental charges or
assessments that are not at the time determined (or, if determined, are not at
the time delinquent), or that are delinquent but the validity of which is being
contested in good faith by any Borrower or any of its Subsidiaries by
appropriate proceedings and with respect to which reserves in conformity with
generally accepted accounting principles, if required by such principles, have
been provided on the books of the Borrower or the relevant Subsidiary of any
Borrower, as the case may be.

                                Schedule VI - 2
<PAGE>

(k) The Lien reserved in (i) leases entered into in the ordinary course of
business for rent and for compliance with the terms of the lease in the case of
real or personal property leasehold estates or (ii) leases and sub-leases
granted to others that do not materially interfere with the ordinary course of
business of any Borrower and its Subsidiaries, taken as a whole.

(l) Defects and irregularities in the titles to any property (including
rights-of-way and easements) which are not material to the business, assets,
operations or financial condition of any Borrower and its Subsidiaries, taken as
a whole.

(m) Easements, exceptions or reservations in any property of any Borrower or any
of its Subsidiaries granted or reserved in the ordinary course of business for
the purpose of pipelines, roads, equipment, streets, alleys, highways,
railroads, the removal of oil, gas, coal or other minerals or timber, and other
like purposes, or for the joint or common use of real property, facilities and
equipment, or in favor of governmental authorities or public utilities, in each
case above which do not materially impair the use of such property for the
purposes for which it is held by any Borrower or such Subsidiary.

(n) Rights reserved to or vested in any municipality or public authority to
control or regulate any property of any Borrower or any of its Subsidiaries, or
to use such property in any manner which does not materially impair the use of
such property for the purposes for which it is held by any Borrower or such
Subsidiary.

(o) Any obligations or duties, affecting the property of any Borrower or any of
its Subsidiaries, to any municipality or public authority with respect to any
franchise, grant, license or permit.

(p) The Liens of any judgments in an aggregate amount for any Borrower and all
of its Subsidiaries (i) not in excess of $8,500,000, the execution of which has
not been stayed and (ii) not in excess of $40,000,000, the execution of which
has been stayed and which have been appealed and secured, if necessary, by a
stay or appeal bond or other security of similar effect and stay or appeal bonds
in respect of the judgments permitted in clause (ii).

(q) Zoning laws and ordinances.

(r) Liens existing on July 1, 2002, that secure only Debt and other obligations
incurred or committed and available for draw down on or prior to or outstanding
on July 1, 2002 and listed on Schedule IX as secured by such Liens.

(s) Liens existing on July 1, 2002 (i) that cover only immaterial assets and
(ii) that secure only Debt and other obligations incurred or committed and
available for draw down on or prior to or outstanding on July 1, 2002.

(t) Liens reserved in customary oil, gas and/or mineral leases for bonus or
rental payments and for compliance with the terms of such leases and Liens
reserved in customary operating agreements, farm-out and farm-in agreements,
exploration agreements, development agreements and other similar agreements for
compliance with the terms of such agreements; provided that (i) such Liens do
not secure Debt or accounts payable (other than obligations under such lease or


                                Schedule VI - 3
<PAGE>

agreement, as the case may be) and (ii) such leases and agreements are entered
into in the ordinary course of business.

(u) Liens arising in the ordinary course of business out of all presently
existing and future division and transfer orders, advance payment agreements,
processing contracts, gas processing plant agreements, operating agreements, gas
balancing or deferred production agreements, participation, joint venture, joint
operating, pooling, unitization or communitization agreements, pipeline,
gathering or transportation agreements, tariffs, platform agreements, drilling
contracts, injection or repressuring agreements, cycling agreements,
construction agreements, salt water or other disposal agreements, leases,
sub-leases or rental agreements, royalty interests, overriding royalty
interests, farm-out and farm-in agreements, exploration and development
agreements, and any and all other contracts or agreements covering, arising out
of, used or useful in connection with or pertaining to the exploration,
development, operation, production, sale, use, purchase, exchange, storage,
separation, dehydration, treatment, compression, gathering, transportation,
processing, improvement, marketing, disposal or handling of any property of a
Person (each such order, agreement or contract being a "Subject Document"),
provided that and to the extent that (i) such Subject Documents are entered into
the ordinary course of business and contain terms customary for such documents
in the industry, (ii) such permitted Liens shall not include any security
interests in accounts receivable or other receivables and do not secure Debt or
accounts payable (other than accounts payable arising under the particular
Subject Document that creates the Lien), and (iii) such Subject Documents do not
create nor do such Liens secure Financing Transactions.

(v) Liens arising by law under Section 9.343 of the Texas Uniform Commercial
Code or similar statutes of states other than Texas.

(w) Liens arising pursuant to the L/C Collateral Documents which secure the
obligations of the Borrowers and their Subsidiaries under this Agreement and the
L/C Agreement and certain public debt of TWC, including Liens securing Letters
of Credit resulting from the Cash Collateralization thereof in accordance with
Section 6.2 of the L/C Agreement.

(x) Liens (i) in existence prior to the date hereof in the nature of a right of
offset or netting of cash amounts owed arising in the ordinary course of
business (and Liens on the trading receivables owed by any trading counterparty
and/or affiliate thereof to a Borrower or any affiliate thereof granted by a
Borrower or any such affiliate thereof under agreements commonly in use in the
industry of a Borrower or such affiliate, but solely to secure the offset or
netting rights of such trading counterparty and/or affiliates thereof to the
payment of such trading receivables arising from and to the extent of the
trading obligations of a Borrower or any affiliate thereof to such trading
counterparty or its affiliates) and (ii) Liens in the nature of a right of
offset or netting of cash amounts owed arising in the ordinary course of
business granted by EMT to any of EMT's trading counterparties and/or affiliates
thereof solely to secure the obligations of EMT to such trading counterparty
and/or affiliates thereof (and the offset or netting rights of such trading
counterparty and/or affiliates thereof related thereto), including, with respect
to EMT only, Liens for such purposes on the trading receivables of EMT arising
from amounts owed by such trading counterparty and/or affiliates thereof to EMT;
provided,


                                Schedule VI - 4
<PAGE>

however, that no such Liens granted by EMT shall in any way create rights of
offset or netting or Liens against a Borrower or any Subject Subsidiary or their
respective Assets.

(y) Any Lien not permitted by paragraphs (a) through (x) above or (z) through
(ii) below securing Debt or Specified Escrow Arrangements of the Borrower or any
of its Subsidiaries if at the time of, and after giving effect to, the creation
or assumption of any such Lien, the aggregate (without duplication) of the
principal or equivalent amount of all Debt of a Borrower and its Subsidiaries
secured by all such Liens not so permitted by paragraphs (a) through (x) above
or (z) through (ii) below plus the amount of Attributable Obligations (other
than those relating to Liens described in clause (a)(viii)) of a Borrower and
its Subsidiaries in respect of Sale and Lease-Back Transactions permitted by
Section 5.02(l) which does not exceed $100,000,000.

(z) To the extent applicable, any overriding royalties or other rights of
Pacific Northwest Pipeline Corporation, a Delaware corporation ("Pacific") and
Phillips Petroleum Company ("Phillips") or their respective successors in
interest under a contract dated January 9, 1953, as amended, between Phillips
and Pacific, to which the Borrower is successor in interest; and the obligations
of the Borrower to surrender, transfer, release or reassign the leases or
interests or rights to which said instruments relate under the conditions and
upon the occurrence of the events specified in said instruments.

(aa) Any option or other agreement to purchase any property of any Borrower or
any Subsidiary the purchase, sale or other disposition of which is not
prohibited by any other provision of this Agreement.

(bb) Liens securing reimbursement obligations with respect to letters of credit
that encumber documents and other property relating to such letters of credit
and the proceeds and products thereof.

(cc) Liens on the products and proceeds (including insurance, condemnation and
eminent domain proceeds) of and accessions to, and contract or other rights
(including rights under insurance policies and product warranties) derivative of
or relating to, property permitted to be subject to Liens under this Agreement
but subject to the same restrictions and limitations herein set forth as to
Liens on such property (including the requirement that such Liens on products,
proceeds, accessions and rights secure only obligations that such property is
permitted to secure).

(dd) Liens on the Property of a Project Finance Subsidiary or the Equity
Interests in such Project Finance Subsidiary securing the Non-Recourse Debt of
such Project Finance Subsidiary.

(ee) Liens on cash and short-term investments incurred in the ordinary course of
business, consistent with past practice and not for the purpose of securing Debt
(i) deposited by any Borrower or any of its Subsidiaries in margin accounts with
or on behalf of futures contract brokers or other counterparties or (ii) pledged
by any Borrower or any of its Subsidiaries, in the case of each of clauses (i)
and (ii) above, to secure its obligations with respect to (x) contracts
(including without limitation, physical delivery, option (whether cash or
financial), exchange, swap and futures contracts) for the purchase or sale of
any energy-related commodity or (y) interest rate or currency rate management
contracts.

                                Schedule VI - 5
<PAGE>

(ff) Liens securing Debt of Apco Argentina, Inc. and/or its Subsidiaries;
provided that such Liens shall only apply to assets owned directly by Apco
Argentina, Inc. and/or its Subsidiaries.

(gg) Liens securing the Barrett Loan.

(hh) Liens securing Permitted Refinancing Debt (as defined below) (and related
obligations) covering the substantially the same collateral ) securing
(immediately prior to such refinancing) the Debt Refinanced (as defined below)
by such Permitted Refinancing Debt; provided that: (i) the principal amount of
such Permitted Refinancing Debt does not exceed the principal amount of the Debt
Refinanced (plus the amount of penalties, premiums (including required premiums
and the amount of any premiums reasonably determined by any Borrower being in
its best economic interest and as necessary to accomplish such Refinancing by
means of a tender offer or privately negotiated repurchase), fees, accrued
interest and reasonable expenses and other obligations incurred in connection
therewith) at the time of refinancing; and (ii) such Debt is incurred either by
any Borrower or by such Subsidiary that is the obligor of the Debt being
Refinanced. "Permitted Refinancing Debt" means any Debt of any Borrower or any
of its Subsidiaries issued to Refinance other Debt of any Borrower or any such
Subsidiaries. "Refinance" means, in respect of any Debt, to refinance, extend,
renew, refund, repay, prepay, replace, acquire, redeem, defease or retire, or to
issue other Debt in exchange or replacement, directly or indirectly for, such
Debt in whole or in part.

(ii) Liens extending, renewing or replacing any of the foregoing Liens, provided
that the principal amount of the Debt or other obligation secured by such Lien
is not increased or the maturity thereof shortened and such Lien is not extended
to cover any additional Debt, obligations or property, other than like
obligations of no greater principal amount and the substitution of like property
(or specific categories of property of the same grantor to the extent the terms
of the Lien being extended, renewed or replaced, extended to or covered such
categories of property) of no greater value.

(jj) Liens securing the obligations under that certain Master Agreement dated as
of March 6, 2000 among TWC as Guarantor, Williams TravelCenters, Inc. and
certain other subsidiaries of TWC, as Lessees, Atlantic Financial Group, Ltd, as
Lessor, the Lenders party thereto, SunTrust Bank, as Agent, Societe Generale,
Southwest Agency, as Documentation Agent, and KBC Bank, N.V., as Syndication
Agent as amended, supplemented or otherwise modified.

(kk) Liens on cash deposits in the nature of a right of setoff, banker's lien,
counterclaim or netting of cash amounts owed arising in the ordinary course of
business on deposit accounts permitted pursuant to Section 5.01(k) of this
Agreement.

(ll) Liens securing the Legacy L/C's resulting from the cash collateralization
thereof in accordance with Section 2.04(c) of this Agreement.

(mm) Liens occurring in, arising from, or associated with Specified Escrow
Arrangements.

(nn) Liens granted in connection with (i) Second Amended and Restated
Participation Agreement dated as of January 28, 2002 among Williams Oil
Gathering, L.L.C., a Delaware limited liability company, as Lessee, Williams
Field Services Company, a Delaware corporation,


                                Schedule VI - 6
<PAGE>

as Construction Agent, The Williams Companies, Inc., a Delaware corporation as
Guarantor, Wells Fargo Bank Northwest, National Association, (formerly known as
First Security Bank, National Association), as Certificate Trustee, Wells Fargo
Bank Nevada, N.A., (successor by merger to First Security Trust Company of
Nevada), as Collateral Agent, the financial institutions named therein as
Certificate Holders, Hatteras Funding Corporation, a Delaware corporation, as CP
Lender, the financial institutions named therein as the Facility Lenders and
Purchasers, Bank of America, National Association, as Administrative Agent and
Administrator for the CP Lender, Banc of America Facilities Leasing, L.L.C, as
Arranger, Bank of Nova Scotia, as Syndication Agent, and Credit Agricole
Indosuez, as Documentation Agent, as amended, and related transaction documents
and (ii) Second Amended and Restated Participation Agreement dated as of January
28, 2002 among Williams Field Services - Gulf Coast, L.P., a Delaware limited
partnership, as Lessee, Williams Field Services Company, a Delaware Corporation,
as Construction Agent, The Williams Companies, Inc., a Delaware corporation, as
Guarantor, Wells Fargo Bank Northwest, National Association, (formerly known as
First Security Bank, National Association), as Certificate Trustee, Wells Fargo
Bank Nevada N.A., (successor by merger to First Security Trust Company of
Nevada), as Collateral Agent, the financial institutions named therein as
Certificate Holders, Hatteras Funding Corporation, a Delaware corporation, as CP
Lender, the financial institutions named therein as the Facility Lenders and
Purchasers, Bank of America, National Association, as Administrative Agent and
Administrator for the CP Lender, Banc of America Facilities Leasing, L.L.C., as
Arranger, Bank of Nova Scotia, as Syndication Agent, and Credit Agricole
Indosuez, as Documentation Agent, as amended, and related transaction documents.


                                Schedule VI - 7
<PAGE>

                                  Schedule VII

                             PERMITTED DISPOSITIONS


1.       Apco Argentina

         o    Apco Argentina, Inc.
         o    Apco Properties Ltd. (100%)
         o    Petrolera Perez Companc S.A. (33.6% - Currently in process of
              purchasing an additional 5.5%)

2.       Energy International

         o    Energy International Corporation  (owns "Gas to Liquids"
              technology).

3.       Discovery

         o    Williams Energy, L.L.C. owns a 50% interest in Discovery Producer
              Services LLC (unregulated) which in turn is the sole member of
              Discovery Gas Transmission LLC (regulated).

4.       Southern Ute (Collateral)

         o    Williams Field Services Company's interest in natural gas pipeline
              gathering systems totaling approximately 91 miles of pipeline in
              La Plata County, Colorado, together with all associated real
              property interests, shipper contracts, and governmental permits,
              licenses, orders, approvals, certificates of occupancy and other
              authorizations.

5.       Dry Trail CO2 Recovery Plant (Collateral)

         o    Williams Field Services Company owns and operates a 50 MMcfd CO2
              recovery plant in Texas County, Oklahoma located on 26 acres near
              the town of Hough, Oklahoma to remove and recycle CO2 at
              ExxonMobil's Postle field enhanced oil recovery project.

6.       Aux Sable and Alliance Canada Marketing L.P.

         o    Williams Alliance Canada Marketing Inc. has a 14.604% interest in
              Alliance Canada Marketing Ltd. which owns a 1% interest in and is
              the general partner of Alliance Canada Marketing L.P. (the
              "Alliance LP"). Williams Alliance Canada Marketing Inc. also owns
              a 14.604% limited partnership interest in the remaining 99% of the
              Alliance LP.

         o    Williams Natural Gas Liquids Canada, Inc. has a 14.604% interest
              in Aux Sable Canada Ltd. which owns a 1% interest in and is the
              general partner of Aux Sable Canada LP (the "Canada LP"). Williams
              Natural Gas Liquids Canada, Inc. also owns a 14.604% limited
              partnership interest in the remaining 99% of the Canada LP.


                                 Schedule VII-1


<PAGE>


         o    Williams Natural Gas Liquids, Inc. has a 14.604% interest in Aux
              Sable Liquid Products Inc. which owns a 1% interest in and is the
              managing general partner of Aux Sable Liquid Products LP (the
              "Liquid LP"). Williams Natural Gas Liquids, Inc. also owns a
              14.604% limited partnership interest in the remaining 99% of the
              Liquid LP.

7.       Deepwater

                  Devil's Tower

         o    The Devil's Tower floating production facility currently under
              construction that will be located on block 773 of Mississippi
              Canyon. The oil and gas export pipelines attached to the Devil's
              Tower Spar known as Canyon Chief and Mountaineer and associated
              pumps, compressors, platforms and other equipment.

                  Gunnison

         o    The oil pipeline known as the Alpine Pipeline that begins at the
              Gunnison discovery and terminated at the platform located at GA
              244.

                  Canyon Station

         o    The Canyon Station fixed leg platform located at Main Pass block
              261 which processes oil and gas production form deepwater wells
              located in Mississippi Canyon.

         o    Equity of the Deepwater JV.

         o    Collectively, the property referred to in this Item 8 shall be
              referred to as the "Deepwater Assets"; provided, that, for
              clarification, such assets are not subject to the Deepwater
              Transactions so long as such Deepwater Transactions are in full
              force and effect.

8.       Gulf Liquids

         o    Gulf Liquids New River Project, LLC and its assets and
              liabilities. Gulf Liquids New River Project LLC is 90% owned by
              Gulf Liquids Holdings, LLC, which is 100% owned by EM&T.

9.       EM&T (Collateral)

         o    Equity Interest in Williams Energy Marketing & Trading Company.

10.      Worthington Generation, L.L.C. (Collateral)

         o    Equity Interests and assets of Worthington Generation, L.L.C.


                                 Schedule VII-2



<PAGE>


11.      Williams Generation Company-Hazelton (Collateral)

         o    Equity Interests and assets of Williams Generation
              Company-Hazelton.

12.      Williams Energy (Canada), Inc. and its Subsidiaries

         o    Equity Interests and assets of William Energy (Canada), Inc. and
              its Subsidiaries.

13.      Those certain gathering and related assets owned by Goebel Gathering
         Company, L.L.C. and WFS Gathering Company, L.L.C. subject to purchase
         and sale agreements with Enbridge Pipelines (Texas Gathering) Inc.
         dated October 10, 2001 for a purchase price of approximately
         $9,000,000. (Collateral)

14.      Property received from any sale, transfer or other disposition of
         Collateral made pursuant to Section 5.02(l). (Collateral)

15.      Mapco Office Building. (Collateral)

16.      For the avoidance of doubt, the disposition or redemption of the Class
         B Units in MLP shall not be a Permitted Disposition.

17.      Interests in joint development arrangements existing on July 31, 2002
         by Williams Energy Marketing & Trading Company, which are transferred
         as a result of Williams Energy Marketing & Trading Company's decision
         not to continue funding.



                                 Schedule VII-3



<PAGE>

                                  Schedule VIII

                            ADDITIONAL PUBLIC FILINGS


1.     Consolidated Amended Complaint, In Re Williams Securities Litigation,
       Case No. 02-CV-72-H(M) in the United States District Court for the
       Northern District of Oklahoma.




                                 Schedule VII-4


<PAGE>


                                   Schedule IX

                    LIENS SECURING EXISTING DEBT/OBLIGATIONS


              Liens existing on July 1, 2002, that secure only Debt and other
obligations incurred or committed and available for draw down on or prior to or
outstanding on July 1, 2002 and listed on Schedule IX as secured by such Liens.
See clause (r) on Schedule VI. Inclusion of the items on this Schedule shall not
be deemed an admission or representation that such items are properly
categorized as Debt or that they are secured.

         1.   Liens granted in connection with the Master Agreement dated as of
March 6, 2000, among TWC, as Guarantor, Williams TravelCenters, Inc. and certain
other subsidiaries of TWC, as Lessees, Atlantic Financial Group, Ltd., as
Lessor, SunTrust Bank, as Agent, Societe Generale, Southwest Agency, as
Documentation Agent, and KBC Bank, N.V., as Syndication Agent and the Lenders
party thereto, as amended, and related transaction documents.

         2.   Liens granted in connection with the Joint Venture Sponsor
Agreement dated as of December 28, 2000, among TWC, as Sponsor and Williams
Field Services Company, in favor of Prairie Wolf Investors, L.L.C. ("Investor"),
Arctic Fox Assets, L.L.C., Williams Energy (Canada), Inc. and the other
Indemnified Persons listed therein, as amended, and related transaction
documents.

         3.   Liens granted in connection with the PPH Sponsor Agreement dated
as Of December 31, 2001, by TWC, as Sponsor, in favor of Piceance Production
Holdings LLC, Plowshare Investors LLC ("Investor"), and other Indemnified
Persons listed in the agreement, as amended, and related transaction documents.

         4.   Liens granted in connection with the Parent Support Agreement
dated as of December 23, 1998, made by TWC in favor of Castle Associates L.P.
("Castle"), Colchester LLC ("Investor") and the other Indemnified Persons and
Guaranteed Parties listed therein, as amended, and related transaction
documents.

         5.   Liens granted in connection with the Loan Agreement dated as of
March 17, 1998 Pine Needle LNG Company, LLC among Pine Needle LNG Company, LLC
and Central Commercial Lending Institutions as the Lenders and Bank of Montreal
as the agent for the Lenders, and related transaction documents.

         6.   Liens granted in connection with the Finance Agreement among
WilPro Energy Services (El Furrial) Limited, Overseas Private Investment
Corporation dated as of January 31, 1999, and related transaction documents.

         7.   Liens granted in connection with the Letter of Credit and
Reimbursement Agreement dated as of May 15, 1994, among Tulsa Parking Authority,
The Williams

                                  Schedule IX-1


<PAGE>
Companies, Inc., Bank of Oklahoma, National Association and Bank of America,
N.A. (f/k/a NationsBank of Texas, N.A.), as amended, and related transaction
documents.

         8.   Liens granted in connection with the Loan Agreement dated as of
March 31, 1988 between Pan-Alberta Resources Inc. and Canadian Imperial Bank of
Commerce, as amended, and related transaction documents.

         9.   Liens granted in connection with the Turbine Financing and Agency
Agreement, dated as of April 16, 2002, among Union Bank of California, N.A.,
WEMT Equipment Statutory Trust 2002, Union Bank of California, N.A., as
administrative agent, and Williams Energy Marketing & Trading Company, and
related transaction documents.

         10.  Liens granted in connection with the Amended and Restated LLC Loan
Agreement dated as of June 9, 2000 among Millennium Energy Fund, L.L.C. and MEF
Production Payment Trust, as amended, and the Amended and Restated Notes Credit
Agreement dated as of June 9, 2000 among MEF Production Payment Trust as the
Borrower, certain financial institutions thereto, Credit Lyonnais as Syndication
Agent, and Bank of Montreal, as Agent, and the Transaction Documents (as defined
therein) related thereto.


                                  Schedule IX-2


<PAGE>

                                   Schedule X

                                   COMMITMENTS

                             as of October 31, 2002

<TABLE>
<CAPTION>
                                                  TWC                                           TGPL
                Banks                         Commitment             NWP Commitment           Commitment           TGT Commitment
                -----                      ---------------          ---------------        ---------------        ---------------
<S>                                        <C>                      <C>                    <C>                    <C>
Mizuho Corporate Bank, Ltd.                $ 47,526,601.24          $ 35,500,000.00        $ 35,500,000.00        $ 17,750,000.00

The Bank of Nova Scotia                      22,870,782.29            17,083,333.33          17,083,333.33           8,541,666.67
Bank of America, N.A.                        22,870,782.29            17,083,333.33          17,083,333.33           8,541,666.67
Bank One, N.A.                               22,870,782.29            17,083,333.33          17,083,333.33           8,541,666.67
JPMorgan Chase Bank (f/k/a The Chase
Manhattan)                                   22,870,782.29            17,083,333.33          17,083,333.33           8,541,666.67
Citicorp USA, Inc.                           22,870,782.29            17,083,333.33          17,083,333.33           8,541,666.67
Commerzbank AG                               22,870,782.29            17,083,333.33          17,083,333.33           8,541,666.67
Credit Lyonnais New York Branch              22,870,782.29            17,083,333.33          17,083,333.33           8,541,666.67
National Westminster Bank PLC                22,870,782.29            17,083,333.33          17,083,333.33           8,541,666.67

ABN Amro Bank N.V.                           18,742,885.00            14,000,000.00          14,000,000.00           7,000,000.00
Bank of Montreal                             18,742,885.00            14,000,000.00          14,000,000.00           7,000,000.00
The Bank of New York                         18,742,885.00            14,000,000.00          14,000,000.00           7,000,000.00
Barclays Bank PLC                            18,742,885.00            14,000,000.00          14,000,000.00           7,000,000.00
CIBC Inc.                                    18,742,885.00            14,000,000.00          14,000,000.00           7,000,000.00
Credit Suisse First Boston                   18,742,885.00            14,000,000.00          14,000,000.00           7,000,000.00
Royal Bank of Canada                         18,742,885.00            14,000,000.00          14,000,000.00           7,000,000.00

The Bank of Tokyo-Mitsubishi, Ltd.           15,842,200.41            11,833,333.33          11,833,333.33           5,916,666.67
Fleet National Bank                          15,842,200.41            11,833,333.33          11,833,333.33           5,916,666.67
Societe Generale                             15,842,200.41            11,833,333.33          11,833,333.33           5,916,666.67
Toronto Dominion (Texas) Inc.                15,842,200.41            11,833,333.33          11,833,333.33           5,916,666.67
UBS AG, Stamford Branch                      15,842,200.41            11,833,333.33          11,833,333.33           5,916,666.67
Wells Fargo Bank Texas, N.A.                 15,842,200.41            11,833,333.33          11,833,333.33           5,916,666.67
WestLB AG, New York Branch                   15,842,200.41            11,833,333.33          11,833,333.33           5,916,666.67

Credit Agricole Indosuez                      8,813,618.54             6,583,333.34           6,583,333.34           3,291,666.64
Wachovia Bank, National Association           5,737,617.86             4,285,714.42           4,285,714.42           2,142,857.20

Arab Banking Corporation (B.S.C.)             5,522,457.19             4,125,000.00           4,125,000.00           2,062,500.00
Bank of China                                 5,522,457.19             4,125,000.00           4,125,000.00           2,062,500.00
Bank of Oklahoma, N.A.                        5,522,457.19             4,125,000.00           4,125,000.00           2,062,500.00
BNP Paribas                                   5,522,457.19             4,125,000.00           4,125,000.00           2,062,500.00
DZ Bank AG                                    5,522,457.19             4,125,000.00           4,125,000.00           2,062,500.00
KBC Bank N.V.                                 5,522,457.19             4,125,000.00           4,125,000.00           2,062,500.00
Sumitomo Mitsui Banking Corporation           5,522,457.19             4,125,000.00           4,125,000.00           2,062,500.00

RZB Finance, LLC                              3,319,052.22             2,479,166.68           2,479,166.68           1,239,583.33
Commerce Bank, N.A.                           3,319,052.22             2,479,166.68           2,479,166.68           1,239,583.33

Suntrust Bank                                 3,076,000.68             2,297,618.93           2,297,618.93           1,148,809.45
                                           ---------------          ---------------        ---------------        ---------------
TOTAL                                      $535,511,000.00          $400,000,000.00        $400,000,000.00        $200,000,000.00
</TABLE>

                                  Schedule X-1


<PAGE>



                                   SCHEDULE XI

                                RATING CATEGORIES



Pricing:     Pricing is based upon the lower rating from S&P and Moody's, with
             respect to TWC's senior unsecured long-term debt.  The pricing grid
             is as follows:


EURODOLLAR RATE ADVANCES

<TABLE>
<CAPTION>
                                                                     APPLICABLE MARGIN
     RATING                                               -----------------------------------
    CATEGORY           S&P OR MOODY'S RATINGS OF THE          *25% OF               >25% OF             APPLICABLE
     OF THE             SENIOR UNSECURED LONG-TERM          COMMITMENTS           COMMITMENTS          COMMITMENT
    BORROWER               DEBT OF THE BORROWER               DRAWN                  DRAWN               FEE RATE
- ---------------      ------------------------------       --------------          -----------          ----------
<S>                       <C>                                 <C>                   <C>                   <C>
     One                   BB+ or Ba1 or higher                3.00%                 3.25%                 .75%
     Two                        BB or Ba2                      3.50%                 3.75%                .875%
     Three                     BB- or Ba3                      4.00%                 4.25%                1.00%
     Four                       B+ or B1                       4.25%                 4.50%                1.25%
     Five                    B or B2 or lower                  4.50%                 4.75%                1.50%
</TABLE>

- ---------------
* less than or equal to


BASE RATE ADVANCES

<TABLE>
<CAPTION>
                                                                     APPLICABLE MARGIN
     RATING                                               -----------------------------------
    CATEGORY           S&P OR MOODY'S RATINGS OF THE          *25% OF               >25% OF             APPLICABLE
     OF THE             SENIOR UNSECURED LONG-TERM          COMMITMENTS           COMMITMENTS          COMMITMENT
    BORROWER               DEBT OF THE BORROWER               DRAWN                  DRAWN               FEE RATE
- ---------------      ------------------------------       --------------          -----------          ----------
<S>                       <C>                                 <C>                   <C>                   <C>
     One                  BB+ or Ba1 or higher                 1.75%                 2.00%                 .75%
     Two                      BB or Ba2                        2.25%                 2.50%                .875%
     Three                    BB- or Ba3                       2.75%                 3.00%                1.00%
     Four                      B+ or B1                        3.00%                 3.25%                1.25%
     Five                   B or B2 or lower                   3.25%                 3.50%                1.50%
</TABLE>

- ---------------
* less than or equal to


                                  Schedule XI-1

<PAGE>



                                  SCHEDULE XII

                               PROGENY FACILITIES

Parent Support Agreement dated as of December 23, 1998, made by The Williams
Companies, Inc. in favor of Castle Associates L.P., Colchester LLC, and the
other Indemnified Persons and Guaranteed Parties listed therein, as amended.
Notwithstanding anything herein to the contrary, for purposes of Section 2.04(c)
of this Agreement, the outstanding amount of this Progeny Facility shall equal
the outstanding Unrecovered Capital (as defined in the Castle Partnership
Agreement) of the Limited Partner (as defined in the Castle Partnership
Agreement) plus accrued and undistributed First Priority Return (as defined in
the Castle Partnership Agreement) to be distributed to the Limited Partner in
accordance with Section 4.01(a) of the Castle Partnership Agreement plus all
other amounts then due and payable to the Limited Partner.

First Amended and Restated Term Loan Agreement dated as of October 31, 2002,
among The Williams Companies, Inc., as Borrower, and Credit Lyonnais New York
Branch, as Administrative Agent, and the Lenders named therein, as amended.

Second Amended and Restated Participation Agreement dated as of January 28, 2002
among Williams Oil Gathering, L.L.C., a Delaware limited liability company, as
Lessee, Williams Field Services Company, a Delaware corporation, as Construction
Agent, The Williams Companies, Inc., a Delaware corporation, as Guarantor, Wells
Fargo Bank Northwest, National Association, (formerly known as First Security
Bank, National Association), as Certificate Trustee, Wells Fargo Bank Nevada,
N.A., (successor by merger to First Security Trust Company of Nevada), as
Collateral Agent, the financial institutions named therein as Certificate
Holders, Hatteras Funding Corporation, a Delaware corporation, as CP Lender, the
financial institutions named therein as the Facility Lenders and Purchasers,
Bank of America, National Association, as Administrative Agent and Administrator
for the CP Lender, Banc of America Facilities Leasing, L.L.C., as Arranger, Bank
of Nova Scotia, as Syndication Agent, and Credit Agricole Indosuez, as
Documentation Agent, as amended.

Second Amended and Restated Participation Agreement dated as of January 28, 2002
among Williams Field Services - Gulf Coast Company, L.P., a Delaware limited
partnership, as Lessee, Williams Field Services Company, a Delaware corporation,
as Construction Agent, TWC, as Guarantor, Wells Fargo Bank Northwest, National
Association, (formerly known as First Security National Bank , National
Association), as Certificate Trustee, Wells Fargo Bank Nevada N.A., (successor
by merger to First Security Trust company of Nevada), as Collateral Agent, the
financial institutions named therein as Certificate Holders, Hatteras Funding
Corporation, a Delaware corporation, as CP Lender, the financial institutions
named therein as the Facility Lenders and Purchasers, Bank of America, National
Association, as Administrative Agent and Administrator for the CP Lender, Banc
of America Facilities Leasing, L.L.C., as Arranger, Bank of Nova Scotia, as
Syndication Agent, and Credit Agricole Indosuez, as Documentation Agent, as
amended by the Consent and First Amendment dated as of July 31, 2002 and the
consent and Second Amendment dated as of October 31, 2002.


                                 Schedule XII-1

<PAGE>


Term Loan Agreement dated as of January 29, 1999, among The Williams Companies,
Inc., as Borrower, and The Fuji Bank, Limited, as Administrative Agent, and the
Banks named therein, as amended.

Joint Venture Sponsor Agreement dated as of December 28, 2000, among The
Williams Companies, Inc., as Sponsor and Williams Field Services Company, in
favor of Prairie Wolf Investors, L.L.C., Arctic Fox Assets, L.L.C., Williams
Energy (Canada), Inc. and the other Indemnified Persons listed therein, as
amended.

Letter of Credit and Reimbursement Agreement dated as of May 15, 1994, among
Tulsa Parking Authority, The Williams Companies, Inc., Bank of Oklahoma,
National Association, and Bank of America, N.A. (formerly NationsBank of Texas,
N.A.), relative to Tulsa Parking Authority First Mortgage Revenue Bonds, as
amended.

Master Agreement dated as of March 6, 2000, among The Williams Companies, Inc.,
as Guarantor, Williams TravelCenters, Inc. and certain other subsidiaries of
TWC, as Lessees, Atlantic Financial Group, Ltd., as Lessor, SunTrust Bank, as
Agent, Societe Generale, Southwest Agency, as Documentation Agent, and KBC Bank,
N.V., as Syndication Agent and the Lenders party thereto, as amended.

PPH Sponsor Agreement dated as of December 31, 2001, by The Williams Companies,
Inc., as Sponsor, in favor of Piceance Production Holdings LLC, Plowshare
Investors LLC, and other Indemnified Persons listed in the agreement, as
amended. Notwithstanding anything herein to the contrary, for purposes of
Section 2.04(c) of this Agreement, the outstanding amount of this Progeny
Facility shall equal the outstanding Contributed Capital of the Class B
Preferred Member (each as defined in the PPH Company Agreement) plus the accrued
and unpaid Class B Priority Return (as defined in the PPH Company Agreement)
plus all other amounts then due and payable to the Class B Preferred Member.

Amended and Restated LLC Loan Agreement dated as of June 9, 2000 among
Millennium Energy Fund, L.L.C. and MEF Production Payment Trust, as amended, and
the Amended and Restated Notes Credit Agreement dated as of June 9, 2000 among
MEF Production Payment Trust as the Borrower, certain financial institutions
thereto, Credit Lyonnais as Syndication Agent, and Bank of Montreal, as Agent,
and the Transaction Documents (as defined therein) related thereto.

Outstanding letters of credit as of July 31, 2002 (as set forth on Schedule III)
to the extent they have not been fully cash collateralized.

All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with any of the foregoing.


                                 Schedule XII-2
<PAGE>



                                  SCHEDULE XIII

                               POST-CLOSING ITEMS

          1. Consents. TWC shall use its best efforts to obtain those third
party consents that have been identified by TWC (pursuant to a written schedule
delivered in connection with the execution of this Agreement) as necessary in
connection with the execution, delivery, filing and performance of certain
Mortgages.

          2. Legal Opinions. The Agent shall have received, with a counterpart
for each Issuing Bank, the executed legal opinions of local counsel to the
Agents in such states as requested by Agent which such legal opinions shall
cover such matters incident to the perfection of the Liens and the other
transactions contemplated by this Agreement as the Agent may reasonably require.
TO BE DELIVERED 30 DAYS AFTER THE REQUEST THEREFOR BY THE AGENT.

          3. Actions to Perfect Liens. The Agent shall have received properly
completed and executed financing statements (or other similar documents),
including, without limitation, duly executed financing statements on form UCC-1,
necessary or, in the opinion of the Collateral Agent, desirable to perfect the
Liens created by the Security Documents, and the Collateral Agent shall be
reasonably satisfied that, other than filing such financing statements and other
similar documents and the Mortgages, no other filings, recordings, registrations
or other actions are necessary or, in the opinion of the Collateral Agent,
desirable to perfect the Liens created by the Security Documents. TO BE
COMPLETED 15 DAYS AFTER THE REQUEST THEREFOR BY THE AGENT.

          4. Surveys. At the request of the Agent, the Agent shall have received
boundary line surveys of (i) the property leased by the Borrower and the
Midstream Subsidiaries located in the States of Alaska, Arkansas, Colorado, New
Mexico, Tennessee, and Wyoming, and (ii) the real property owned by Borrower and
the Midstream Subsidiaries located in the States of Alaska, Arkansas, Colorado,
New Mexico, Tennessee, and Wyoming, other than the Gathering Systems which
boundary line surveys shall in each case be (A) dated a date reasonably close to
the date of the Agreement (as determined by the Agent), (B) prepared by an
independent professional licensed land surveyor reasonably satisfactory to the
Agent, (C) prepared in a manner reasonably acceptable to the Agent and (D) shall
reflect that the buildings, structures and other improvements necessary for the
ownership and operation of the processing plants purported to be located on the
property surveyed do not protrude on any adjoining property nor do any
improvements located on land adjacent to the property surveyed encroach upon the
property surveyed, which encroachments or protrusions in either case could
reasonably be expected to adversely affect the ability of the Borrower or the
Midstream Subsidiaries to own, maintain, operate or sell the property surveyed
and/or the improvements located thereon. The Agent shall have received a
certificate of an authorized officer of the Borrower certifying said boundary
line surveys are true and correct as of the date of the Agreement. TO BE
COMPLETED 60 DAYS AFTER REQUEST BY THE AGENT THEREFOR.


                                 Schedule XIII-1

<PAGE>


          5. Flood Insurance. If requested by the Agent, the Agent shall have
received a policy of flood insurance in form and substance satisfactory to the
Agent. TO BE COMPLETED 60 DAYS AFTER REQUEST BY THE AGENT THEREFOR.

          6. Copies of Documents. If requested by the Agent, the Agent shall
have received a copy, certified by such parties as the Agent may deem
appropriate, of any document burdening the property covered by any Mortgage. TO
BE COMPLETED 30 DAYS AFTER REQUEST BY THE AGENT THEREFOR.

          7. Lien Searches. The Agent shall have received the results of recent
lien searches by Persons reasonably satisfactory to the Agent, in each of the
jurisdictions and offices where assets of the Borrower or any of the Midstream
Subsidiaries are located or recorded, and such searches shall reveal no Liens on
any assets of the Borrower or any such Subsidiary, except for (i) Liens
permitted by the Agreement and (ii) Liens to be released or assigned to the
Agent, for the ratable benefit of the Banks, on the date of the Agreement in
connection with the execution, delivery and performance of the Credit Documents.
TO BE COMPLETED ON OR BEFORE NOVEMBER 15, 2002.

          8. Insurance. The Agent shall have received (i) copies of, or an
insurance broker's or agent's certificate as to coverage under, the insurance
policies required by the Agreement and the applicable provisions of the Security
Documents, each of which policies shall be endorsed or otherwise amended to
include a "standard" or "New York" lender's loss payable endorsement and to name
the Collateral Agent as additional insured, in form and substance satisfactory
to the Collateral Agent and (ii) confirmation from such insurance broker that
the scope and amount of coverage maintained by the Borrower and its Subsidiaries
are comparable to the scope and amount of the insurance maintained by other
companies of similar size in the same industry and general location. TO BE
COMPLETED ON OR BEFORE NOVEMBER 15, 2002.

          9. Environmental Reports. If requested by the Agent, the Agent shall
have received environmental assessment reports from E.vironment, Inc. with
respect to processing, refining and other facilities and other parcels of real
property owned or leased by the Borrower and the Midstream Subsidiaries, and the
Issuing Banks shall be reasonably satisfied with the potential environmental
liabilities to which the Borrower and its Subsidiaries may be subject based on
such reports. TO BE COMPLETED 60 DAYS AFTER REQUEST THEREFOR BY THE AGENT.

          10. Title Vested in Borrower. The Agent and the Issuing Banks shall be
reasonably satisfied that all filings and other actions required to be taken or
made in order to vest title to all of the Properties of the Borrower and the
Midstream Subsidiaries shall have been taken or made and are in full force and
effect. TO BE COMPLETED 60 DAYS AFTER REQUEST THEREFOR BY THE AGENT.

          11. Mortgages. The Borrowers shall deliver to the Collateral Agent,
within fifteen Business Days of the delivery of any Mortgage to the Borrower
(or, with respect to Mortgages to be filed in Kansas, as promptly as possible
using its best efforts), evidence of such


                                 Schedule XIII-2

<PAGE>

recordings and filings as may be necessary, in the opinion of the Collateral
Agent, to perfect the Liens created by such Mortgage. Upon the request of
Collateral Agent, the Borrower shall provide all assistance as may be necessary
in connection with the preparation of the Mortgages.

          12. Consents to the Pledging of Excluded Equity Interest. TWC shall
use its best efforts to obtain all third party consents necessary to pledge the
Excluded Equity Interests in (other than the Equity Interest in the Restricted
Midstream Subsidiaries and the Equity Interest of MLP held by NewGP) pursuant to
the Pledge Agreement. TO BE REQUESTED WITHIN 30 DAYS AFTER THE DATE OF THIS
AGREEMENT AND TO BE PURSUED DILIGENTLY THEREAFTER.

          13. Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be satisfactory in form and substance to the Agent, and the Agent shall have
received such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.

          14. Additional Legal Opinions. The Agent shall have received, with a
counterpart for each Issuing Bank, executed legal opinions which confirm that
the Mortgages and deeds of trust filed with respect to the Collateral shall
continue to constitute valid, enforceable, and duly recorded liens on the real
property following the amendment and restatement of the Existing Credit
Agreement and of the L/C Agreement, securing the obligations of such agreements
as amended. To the extent that any supplemental deed of trust or mortgage
filings are required in connection with the above described legal opinions, the
Agent shall have received evidence of such recordings and filings as may be
necessary, in the opinion of the Collateral Agent, to ensure the continued
perfection of the Liens created by any such Mortgage. IN EACH CASE, TO BE
COMPLETED 30 DAYS AFTER THE DATE OF THIS AGREEMENT.

          15. Approvals of and Consents to Assignments. In connection with the
termination of (a) the Amended and Restated Guarantee, dated as of July 25,
2000, issued by TWC for the benefit of The Commonwealth Plan, Inc. and CBL
Capital Corporation, as amended, (b) the Lease Agreement, dated as of December
29, 1995, between The Commonwealth Plan, Inc., as Lessor, and WFS - Pipeline
Company, as Lessee, and (c) the Lease Agreement, dated as of December 29, 1995,
between CBL Capital Corporation, as Lessor, and WFS - Offshore Gathering
Company, as Lessee, TWC and either WFS - Offshore Gathering Company or WFS -
Pipeline Company, as applicable, shall use their best efforts to obtain (i) the
approval of the United States Department of the Interior, Minerals Management
Service to the assignment of certain easements to WFS - Offshore Gathering
Company by CBL Capital Corporation and (ii) the consents of third parties
necessary to the assignments of any leases and/or easements by CBL Capital
Corporation to WFS - Offshore Gathering Company or by The Commonwealth Plan,
Inc. to WFS - Pipeline Company. TO BE COMPLETED ONE YEAR AFTER THE DATE OF THIS
AGREEMENT.


                                 Schedule XIII-3

<PAGE>


                                  SCHEDULE XIV

                             MIDSTREAM SUBSIDIARIES


Delaware

Williams Energy Services, LLC
Williams Natural Gas Liquids, Inc.
Williams Midstream Natural Gas Liquids, Inc.
Williams Express, Inc. (a Delaware corporation)
Williams Field Services Group, Inc.
Williams Alaska Pipeline Company, L.L.C.
Williams Bio-Energy, L.L.C.
Williams Merchant Services Company, Inc.
MAPCO Inc.
WFS Enterprises, Inc.
WFS-Liquids Company
Williams Field Services Company
Williams Gas Processing Company
Williams Gas Processing - Wamsutter Company
North Padre Island Spindown, Inc.
Williams Ethanol Services, Inc.
Williams Energy Marketing & Trading Company
Worthington Generation, L.L.C.
Memphis Generation, L.L.C.
Gas Supply, L.L.C.
Williams Generation Company - Hazelton
Juarez Pipeline Company
MAPL Investments, Inc.
Williams Refining & Marketing, L.L.C.
Williams Memphis Terminal, Inc.
Williams Mid-South Pipelines, L.L.C.
Williams Olefins, L.L.C.
Williams Olefins Feedstock Pipelines, L.L.C.
Williams Generating Memphis, LLC
WFS - NGL Pipeline Company Inc.
WFS - Offshore Gathering Company
Baton Rouge Fractionators, L.L.C.
Tri-States NGL Pipeline, L.L.C.
WILPRISE Pipeline Company, L.L.C.
Williams Gulf Coast Gathering Company, LLC
WFS Gathering Company L.L.C.
Williams Field Services - Matagorda Offshore Company, LLC
Williams Gas Processing - Mid-Continent Region Company
WFS - OCS Gathering Co.


                                 Schedule XIV-1

<PAGE>

WFS - Pipeline Company
HI-BOL Pipeline Company
Goebel Gathering Company, L.L.C.
Williams Petroleum Pipeline Systems, Inc.
Williams GP LLC**
Williams Oil Gathering, L.L.C
Williams Field Services - Gulf Coast Company, L.P.
Gulf Liquids Holdings, L.L.C.*
Gulf Liquids New River Project, LLC*
Williams Petroleum Services, L.L.C.
Longhorn Enterprises of Texas, Inc.
E-Birchtree, LLC

Alaska

Williams Express, Inc. (an Alaska corporation)
Williams Alaska Petroleum, Inc.
Williams Alaska Air Cargo Properties, L.L.C.
Williams Lynxs Alaska CargoPort, L.L.C.

Texas

Black Marlin Pipeline Company
Rio Grande Pipeline Company

Kansas

Nebraska Energy, L.L.C



- --------


*    These entities shall be Midstream Subsidiaries to the extent that such
     entities are Subsidiaries.

**   Williams GP LLC shall not be deemed a Midstream Subsidiary until Williams
     GP LLC has transferred the general partnership interests and incentive
     distribution rights in MLP to NewGP.



                                 Schedule XIV-2


<PAGE>


                                   EXHIBIT A-1

                                A PROMISSORY NOTE


     U.S. $______________________                                  July 25, 2000


     FOR VALUE RECEIVED, the undersigned,__________________________, a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________________________ (the "Bank"), for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below), on the
Stated Termination Date (as defined in the Credit Agreement referred to below),
the principal amount of $_________, or, if less, the aggregate principal amount
of the A Advances (as defined in the Credit Agreement referred to below) owed to
the Bank by the Borrower on such Stated Termination Date.

     The Borrower promises to pay interest on the unpaid principal amount hereof
until such principal amount is paid in full, at such interest rates, and payable
at such times, as are specified in the Credit Agreement referred to below. Both
principal and interest are payable in lawful money of the United States of
America to Citibank, N.A., as Agent, at 399 Park Avenue, New York, New York
10043, in same day funds.

     This A Promissory Note is one of the A Notes referred to in, and is subject
to and entitled to the benefits of the Credit Agreement, dated as of July 25,
2000 (as amended or otherwise modified from time to time, the "Credit
Agreement"), by and among the Borrower, the Bank, certain other borrowers party
thereto, certain other financial institutions parties thereto, The Chase
Manhattan Bank and Commerzbank AG, as Co-Syndication Agents, Credit Lyonnais New
York Branch, as Documentation Agent, and Citibank, N.A., as Agent for the Bank
and such other financial institutions. The Credit Agreement, among other things,
(i) provides for the making of advances to the Borrower from time to time
pursuant to Section 2.01 of the Credit Agreement in an aggregate outstanding
amount not to exceed at any time the U.S. dollar amount first above mentioned,
the indebtedness of the Borrower resulting from each such advance owed to the
Bank being evidenced by this A Promissory Note and (ii) contains provisions for
the acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified. Capitalized
terms used herein which are not defined herein and are defined in the Credit
Agreement are used herein as therein defined.

     The Borrower hereby waives presentment, demand, protest, notice of intent
to accelerate, notice of acceleration and any other notice of any kind, except
as provided in the Credit Agreement. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of such rights.

     This A Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.


                                 Exhibit A-1-1

<PAGE>


                                      [BORROWER NAME]







                                      By:
                                             ----------------------------------

                                      Name:
                                             ----------------------------------

                                      Title:
                                             ----------------------------------



                                  Exhibit A-1-2

<PAGE>


                       ADVANCES AND PAYMENTS OF PRINCIPAL

<TABLE>
<CAPTION>
                                                        Amount of
                                                       Principal                Unpaid
                                 Amount Of               Paid or               Principal              Notation
          Date                    Advance               Prepaid                 Balance                Made By
          ----                  ----------             -----------             ---------              --------
<S>                             <C>                     <C>                     <C>                   <C>


- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------

</TABLE>


                                  Exhibit A-1-3


<PAGE>


                                   EXHIBIT A-2

                                B PROMISSORY NOTE


U.S. $______________________                     Dated: ______________, ________


     FOR VALUE RECEIVED, the undersigned, ________________________, a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_____________________ (the "Bank"), for the account of its Applicable Lending
Office (as defined in the Credit Agreement referred to below), on _____________,
the principal amount of _____________ U.S. Dollars ($__________________).

     The Borrower promises to pay interest on the unpaid principal amount hereof
from the date hereof until such principal amount is paid in full, at the
interest rate and payable on the interest payment date or dates provided below:

             Interest Rate: ______% per annum (calculated on the basis

     of a year of _____ days for the actual number of days elapsed).

     Interest Payment

     Date or Dates: ______________________


     Both principal and interest are payable in lawful money of the United
States of America to Citibank, N.A., as Agent, for the account of the Bank at
the office of Citibank, N.A., at 399 Park Avenue, New York, New York 10043, in
same day funds.

     This B Promissory Note is one of the B Notes referred to in, and is
entitled to the benefits of the Credit Agreement, dated as of July 25, 2000 (as
amended or otherwise modified from time to time, the "Credit Agreement"), by and
among the Borrower, the Bank, certain other borrowers party thereto, certain
other financial institutions parties thereto, The Chase Manhattan Bank and
Commerzbank AG, as Co-Syndication Agents, Credit Lyonnais New York Branch, as
Documentation Agent, and Citibank, N.A., as Agent for the Bank and such other
financial institutions. The Credit Agreement contains, among other things,
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. Capitalized terms used herein which are not defined herein and
are defined in the Credit Agreement are used herein as therein defined.

     The Borrower hereby waives presentment, demand, protest, notice of intent
to accelerate, notice of acceleration and any other notice of any kind, except
as provided in the Credit Agreement. No failure to exercise, and no delay in
exercising, any rights hereunder on the part of the holder hereof shall operate
as a waiver of such rights.


                                  Exhibit A-2-1
<PAGE>


     This B Promissory Note shall be governed by, and construed in accordance
with, the laws of the State of New York.


                                  [BORROWER]







                                  By:
                                         ---------------------------------------

                                  Name:
                                         ---------------------------------------

                                  Title:
                                         ---------------------------------------













                                  Exhibit A-2-2
<PAGE>


                                   EXHIBIT B-1

                              NOTICE OF A BORROWING

                                                                          [Date]

Citicorp USA, Inc., as Agent
for the Banks parties to the Credit
Agreement referred to below
399 Park Avenue
New York, New York 10043

         ATTENTION:  The Williams Companies, Inc. Account Officer

Ladies and Gentlemen:

         The undersigned, ____________________ (the "Borrower"), (a) refers to
the Credit Agreement, dated as of July 25, 2000 (as amended or otherwise
modified from time to time, the "Credit Agreement"; the terms defined therein
and not defined herein being used herein as therein defined), by and among the
undersigned, certain other borrowers parties thereto, certain Banks parties
thereto, JPMorgan Chase Bank and Commerzbank AG, as Co-Syndication Agents,
Credit Lyonnais New York Branch, as Documentation Agent and Citicorp USA, Inc.,
as Agent for such Banks; (b) hereby gives you notice, irrevocably, pursuant to
Section 2.02 of the Credit Agreement that the undersigned hereby requests an A
Borrowing under the Credit Agreement and (c) in that connection sets forth below
the information relating to such A Borrowing (the "Proposed A Borrowing") as
required by Section 2.02 (a) of the Credit Agreement:

         (i)      The Business Day of the Proposed A Borrowing is __________,
                  19____.

         (ii)     The Type of A Advances comprising the Proposed A Borrowing is
                  [Base Rate Advances] [Eurodollar Rate Advances].

         (iii)    The aggregate amount of the Proposed A Borrowing is
                  $__________________.

         (iv)     [The Interest Period for each A Advance made as part of the
                  Proposed A Borrowing is __________ months.]

         The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed A Borrowing:

         (a)      the representations and warranties contained in Section 4.01
                  of the Credit Agreement as to the Borrower and its
                  Subsidiaries are correct on and as of the date of the Proposed
                  A Borrowing, before and after giving effect to the Proposed A
                  Borrowing and to the application of the proceeds therefrom, as
                  though made on and as of such date;

         (b)      no event has occurred and is continuing, or would result from
                  the Proposed A Borrowing or from the application of the
                  proceeds therefrom, which constitutes an


                                Exhibit B-1 - 1
<PAGE>

                  Event of Default or which would constitute an Event of Default
                  but for the requirement that notice be given or time elapse or
                  both;

         (c)      [the senior unsecured debt of the Borrower is rated __________
                  by S&P and __________ by Moody's; and]

         (d)      after giving effect to the Proposed A Borrowing and all other
                  Borrowings which have been requested on or prior to the date
                  of the Proposed A Borrowing but which have not been made prior
                  to such date, the aggregate principal amount of all Advances
                  will not exceed the aggregate of the Commitments of the Banks
                  to the Borrower (computed without regard to any B Reduction).

                                       Very truly yours,



                                       [BORROWER]







                                       By:
                                          --------------------------------------

                                       Name:
                                            ------------------------------------

                                       Title:
                                             -----------------------------------


cc:  Citicorp North America, Inc.
     1200 Smith Street, Suite 2000
     Houston, Texas 77002
     Attn:  The Williams Companies, Inc.
            Account Officer


                                Exhibit B-I - 2

<PAGE>


                                   EXHIBIT B-2

                              NOTICE OF B BORROWING

                                                                          [Date]

Citicorp USA, Inc., as Agent
for the Banks parties to the
Credit Agreement referred to below
399 Park Avenue
New York, New York 10043

         ATTENTION:  Bilal Aman

Ladies and Gentlemen:

         The undersigned, ______________________ (the "Borrower"), (a) refers to
the Credit Agreement, dated as of July 25, 2000 (as amended or otherwise
modified from time to time, the "Credit Agreement"; the terms defined therein
and not defined herein being used herein as therein defined), by and among the
undersigned, certain other borrowers parties thereto, certain Banks parties
thereto, JPMorgan Chase Bank and Commerzbank AG, as Co-Syndication Agents,
Credit Lyonnais New York Branch, as Documentation Agent and Citicorp USA, Inc.,
as Agent for such Banks; (b) hereby gives you notice, irrevocably, pursuant to
Section 2.16 of the Credit Agreement that the undersigned hereby requests a B
Borrowing under the Credit Agreement and (c) in that connection sets forth the
terms on which such B Borrowing (the "Proposed B Borrowing") is requested to be
made:

                  (A)      Date of B Borrowing _________________________________

                  (B)      Amount of B Borrowing _______________________________

                  (C)      Maturity Date _______________________________________

                  (D)      Interest Rate Basis _________________________________

                  (E)      Interest Payment Date(s) ____________________________

                  (F)      Prepayment Permitted [Yes/No]      [Conditions]

                  (G)      _____________________     _________________

         The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed B Borrowing:

         (e)      the representations and warranties contained in Section 4.01
                  of the Credit Agreement as to the Borrower and its
                  Subsidiaries are correct on and as of the date of the Proposed
                  B Borrowing, before and after giving effect to the Proposed B
                  Borrowing and to the application of the proceeds therefrom, as
                  though made on and as of such date;

         (f)      no event has occurred and is continuing, or would result from
                  the Proposed B Borrowing or from the application of the
                  proceeds therefrom, which constitutes an


                                Exhibit B-2 - 1
<PAGE>

                  Event of Default or which would constitute an Event of Default
                  but for the requirement that notice be given or time elapse or
                  both;

         (g)      following the making of the Proposed B Borrowing and all other
                  Borrowings to be made on the same day under the Credit
                  Agreement, the aggregate principal amount of all Advances of
                  the Banks to the Borrower then outstanding will not exceed the
                  aggregate amount of the Commitments of the Banks to the
                  Borrower (computed without regard to any B Reduction); and

         (h)      after giving effect to the Proposed B Borrowing and all other
                  Borrowings which have been requested on or prior to the date
                  of the Proposed B Borrowing but which have not been made prior
                  to such date, the aggregate principal amount of all Advances
                  will not exceed the aggregate of the Commitments of the Banks
                  (computed without regard to any B Reduction).

         The undersigned hereby confirms that the Proposed B Borrowing is to be
made available to it in accordance with Section 2.16(a)(v) of the Credit
Agreement.

                                        Very truly yours,



                                        [BORROWER NAME]





                                        By:
                                           -------------------------------------

                                        Name:
                                             -----------------------------------

                                        Title:
                                              ----------------------------------


cc:  Citicorp North America, Inc.
     1200 Smith Street, Suite 2000
     Houston, Texas 77002
     Attn:   The Williams Companies, Inc.
             Account Officer



                                Exhibit B-2 - 2

<PAGE>



                                    EXHIBIT C

                         OPINION OF WILLIAM G. VON GLAHN



                                  Exhibit C - 1



<PAGE>



                                   EXHIBIT D-1

                           OPINION OF NEW YORK COUNSEL

                                (ENFORCEABILITY)



                                  Exhibit D - 1


<PAGE>



                                   EXHIBIT D-2

                           OPINION OF NEW YORK COUNSEL

                                  (PERFECTION)

                                  Exhibit D - 2





<PAGE>



                                    EXHIBIT E

                            INVESTMENTS DESCRIBED IN
                    PARAGRAPH 5.02(E) OF THE CREDIT AGREEMENT

Loan Agreement dated as of September 8, 1999 between Williams Communications,
Inc., as Borrower, and TWC, as Lender, filed as Exhibit 10.57 to WCG's Form
10-K/A for the fiscal year ended December 31, 1999.

Various immaterial intercompany receivables between TWC or its Subsidiaries and
the WCG Subsidiaries for services rendered, which are settled on a reasonably
prompt basis. Services are rendered to the WCG Subsidiaries by TWC or its
Subsidiaries pursuant to certain intercompany services agreements, all of which
are filed as exhibits to WCG's Form 10-K/A for the fiscal year ended December
31, 1999.

As of July 25, 2000, TWC's investment in WCG consists of 395,434,965 shares of
Class B common stock.


                                   Exhibit E


<PAGE>


                                    EXHIBIT F

                               TRANSFER AGREEMENT

         This Transfer Agreement, dated as of_____________________ (this
"Agreement"), is made by and among The Williams Companies, Inc., a Delaware
corporation ("TWC"), Northwest Pipeline Corporation ("NWP"), Transcontinental
Gas Pipe Line Corporation ("TGPL") and Texas Gas Transmission Corporation
("TGT"), each a Delaware corporation (TWC, NWP, TGPL and TGT being each a
"Borrower" and collectively, the "Borrowers"); Citibank, N.A., as Agent for the
banks party to the Credit Agreement, dated as of July 25, 2000 (as such may be
amended from time to time, the "Credit Agreement"), by and among the Borrowers,
such Agent and such banks; ____________________________ ("Assignor"); and
___________________ ("Assignee"). In consideration of the mutual covenants
herein contained, the parties hereto agree as set forth herein.

         1. Transfer. Pursuant to the last sentence of Section 8.06(a) of the
Credit Agreement, Assignor hereby assigns to Assignee (without representation or
warranty to Assignee and without Assignee having recourse against Assignor as a
result of such assignment), and Assignee hereby assumes, a constant ____% of
each of the Assignor's Commitments (such term used throughout this Agreement
without giving effect to any B Reduction) to each of the Borrowers under the
Credit Agreement, such assignment from Assignor to Assignee being [all of
Assignor's Commitments to the Borrower] [(a) $______________ of Assignor's
$____________ Commitment to TWC; (b) $________ of Assignor's $____________
Commitment to NWP; (c) $_________________ of Assignor's $_____________
Commitment to TGPL; and (d) $_________________ of Assignor's $_______________
Commitment to TGT] (the amount of such Commitment to the Borrower so assigned is
called the "Assigned Portion" of such Commitment). [The Assignee is already a
Bank under the Credit Agreement with a Commitment of $__________, $__________,
$___________, $___________, $__________, $___________ and $_________ to TWC,
NWP, TGPL and TGT, respectively, prior to the assumption contemplated hereby.]
[The Assignee is hereby approved by the Agent [and the Borrowers] for purposes
of the assignment and assumption contemplated hereby.] As contemplated by such
Section 8.06, it is hereby agreed that:

         (i)      the Assignor is hereby released from all of its obligations
                  under the Credit Agreement with respect to or arising as a
                  result of the Assigned Portions of its Commitment assigned
                  hereby;

         (ii)     the Assignee hereby becomes obligated for the Assigned
                  Portions of such Commitment and all other obligations of the
                  Assignor (including, without limitation, obligations to the
                  Agent under Section 7.05 of the Credit Agreement or otherwise)
                  under the Credit Agreement with respect to or arising as a
                  result of the Assigned Portions of such Commitments;

         (iii)    the Assignee is hereby assigned the right to vote or consent
                  under the Credit Agreement and the other rights and
                  obligations of the Assignor under the Credit Agreement, in
                  each case to the extent of the Assigned Portions of such
                  Commitment;

                                    Exhibit F

<PAGE>

         (iv)     TWC, if requested or required to do so pursuant to Section
                  2.09 of the Credit Agreement, contemporaneously with its
                  execution and delivery hereof, will deliver, in replacement of
                  the A Note of the Assignor currently outstanding [(and in
                  replacement of Assignee's existing $______________ A Note)]
                  (a) to the Assignee, a new A Note in the amount of
                  $______________ [(and the Assignee agrees to mark "Exchanged"
                  and return to TWC, with reasonable promptness following such
                  delivery, any A Note of the Assignee being replaced thereby)],
                  (b) to the Assignor, a new A Note in the amount of
                  $______________ (and the Assignor agrees to return to TWC,
                  with reasonable promptness following delivery of such new A
                  Note, any A Note of the Assignor being replaced thereby,
                  marked "Exchanged"), and (c) to the Agent, photocopies of all
                  such new A Notes and of all such replaced A Notes;

         (v)      NWP, if requested or required to do so pursuant to Section
                  2.09 of the Credit Agreement, contemporaneously with its
                  execution and delivery hereof, will deliver, in replacement of
                  the A Note of the Assignor currently outstanding [(and in
                  replacement of Assignee's existing $___________ A Note)] (a)
                  to the Assignee, a new A Note in the amount of
                  $________________ [(and the Assignee agrees to mark
                  "Exchanged" and return to TWC, with reasonable promptness
                  following such delivery, any A Note of the Assignee being
                  replaced thereby)], (b) to the Assignor, a new A Note in the
                  amount of $___________ (and the Assignor agrees to return to
                  TWC, with reasonable promptness following delivery of such new
                  A Note, any A Note of the Assignor being replaced thereby,
                  marked "Exchanged"), and (c) to the Agent, photocopies of all
                  such new A Notes and of all such replaced A Notes;

         (vi)     TGPL, if requested or required to do so pursuant to Section
                  2.09 of the Credit Agreement, contemporaneously with its
                  execution and delivery hereof, will deliver, in replacement of
                  the A Note of the Assignor currently outstanding [(and in
                  replacement of Assignee's existing $________________ A Note)]
                  (a) to the Assignee, a new A Note in the amount of
                  $______________ [(and the Assignee agrees to mark "Exchanged"
                  and return to TGPL, with reasonable promptness following such
                  delivery, any A Note of the Assignee being replaced thereby)],
                  (b) to the Assignor, a new A Note in the amount of
                  $_____________ (and the Assignor agrees to return to TGPL,
                  with reasonable promptness following delivery of such new A
                  Note, any A Note of the Assignor being replaced thereby,
                  marked "Exchanged"), and (c) to the Agent, photocopies of all
                  such new A Notes and of all such replaced A Notes;

         (vii)    TGT, if requested or required to do so pursuant to Section
                  2.09 of the Credit Agreement, contemporaneously with its
                  execution and delivery hereof, will deliver, in replacement of
                  the A Note of the Assignor currently outstanding [(and in
                  replacement of Assignee's existing $_____________ A Note)] (a)
                  to the Assignee, a new A Note in the amount of $______________
                  [(and the Assignee agrees to mark "Exchanged" and return to
                  TGT, with reasonable promptness following such delivery, any A
                  Note of the Assignee being replaced thereby)], (b) to the
                  Assignor, a new A Note in the amount of $_____________ (and
                  the

                                    Exhibit F

<PAGE>

                  Assignor agrees to return to TGT, with reasonable promptness
                  following delivery of such new A Note, any A Note of the
                  Assignor being replaced thereby, marked "Exchanged"), and (c)
                  to the Agent, photocopies of all such new A Notes and of all
                  such replaced A Notes;

         (viii)   [inasmuch as there are currently no outstanding A Advances, no
                  transfer of A Advances is hereby made];

         (ix)     [$__________, $__________, $___________, $___________ of the
                  Assignor's outstanding A Advances to TWC, NWP, TGPL and TGT,
                  respectively, are hereby transferred to the Assignee, which
                  amounts represent [the aggregate amount of all of the
                  Assignor's outstanding A Advances to TWC, NWP, TGPL and TGT,
                  respectively,] [the amount of the assigned portions of the
                  outstanding A Advances of the Assignor to the Borrower being
                  hereby assigned to Assignee a portion of each such A Advance
                  with the assigned portion of each such A Advance being equal
                  to the amount of such A Advance multiplied by a fraction, the
                  numerator of which is the amount of the Assignor's Commitments
                  assumed hereby by the Assignee and the denominator of which is
                  the amount of the Assignor's Commitments (without giving
                  effect to any B Reduction) immediately prior to such
                  assumption]; [and)

         (x)      the Assignee hereby confirms that it is a party to the Credit
                  Agreement as a Bank and agrees that after giving effect to
                  this Agreement its Commitments will be $____________,
                  $____________, $_____________, $___________ to TWC, NWP, TGPL
                  and TGT, respectively; [and]

         (xi)     the Assignee hereby specifies the following offices as its
                  Applicable Lending Offices under the Credit Agreement:

                               Domestic                      Eurodollar

                            Lending Office                 Lending Office
                            --------------                 --------------

                  Attention:                          Attention:
                             ---------------------               ---------------
                  Telephone:                          Telephone:
                             ---------------------               ---------------
                  Telecopy:                           Telecopy:
                             ---------------------               ---------------
                  Answerback:                         Answerback:
                             ---------------------               ---------------


                                    Exhibit F

<PAGE>


         (xii)    [the Assignee hereby specifies the following as its address
                  for notices and communications under the Credit Agreement:

                  [Assignee]

                  Attention:  _____________________

                  Telephone:  _____________________

                  Telecopy:   _____________________

                  Answerback: _____________________

         2.       Miscellaneous.

                  2.1 Amendments, Etc. This Agreement shall not be amended,
waived or otherwise modified except in writing executed by the parties hereto.

                  2.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

                  2.3 Definitions. Capitalized terms used herein which are
defined in the Credit Agreement and not defined herein are used herein as
defined in the Credit Agreement.

                  2.4 Execution in Counterparts. This Agreement 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.

                  2.5 Effective Date. This Agreement shall be effective as of
the date first above written for purposes of computation of commitment fees
under the Credit Agreement and for all other relevant purposes.

                  2.6 Assignee Credit Decision. The Assignee acknowledges that
it has, independently and without reliance upon the Agent or any other Bank and
based on such financial statements and such other documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. The Assignee 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 action under any Note, the
Credit Agreement or this Agreement.

                  2.7 Indemnity. The Assignee agrees to indemnify and hold the
Assignor harmless against any and all losses, costs and expenses (including
without limitation reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
performance or non-performance of obligations assumed by Assignee under this
Agreement.

                                    Exhibit F

<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

[NAME OF ASSIGNEE]                     THE WILLIAMS COMPANIES, INC.


By:                                    By:
     -------------------------------         -----------------------------------
Name:                                  Name:
     -------------------------------         -----------------------------------
Title:                                 Title:
      ------------------------------         -----------------------------------

[NAME OF ASSIGNOR]                     NORTHWEST PIPELINE CORPORATION


By:                                    By:
     -------------------------------         -----------------------------------
Name:                                  Name:
     -------------------------------         -----------------------------------
Title:                                 Title:
      ------------------------------         -----------------------------------

CITICORP USA, INC., AS AGENT           TRANSCONTINENTAL GAS PIPE LINE
                                       CORPORATION


By:                                    By:
     -------------------------------         -----------------------------------
Name:                                  Name:
     -------------------------------         -----------------------------------
Title:                                 Title:
      ------------------------------         -----------------------------------

                                       TEXAS GAS TRANSMISSION CORPORATION


                                       By:
                                             -----------------------------------
                                       Name:
                                             -----------------------------------
                                       Title:
                                             -----------------------------------

                                    Exhibit F


<PAGE>


                                    EXHIBIT G

                               SECURITY AGREEMENT



                                    Exhibit G




<PAGE>

                                    EXHIBIT H

                             LLC GUARANTY AGREEMENT



                                    Exhibit H


<PAGE>

                                    EXHIBIT I

                               MIDSTREAM GUARANTY



                                    Exhibit I


<PAGE>

                                    EXHIBIT J

                                PLEDGE AGREEMENT



                                    Exhibit J


<PAGE>

                                    EXHIBIT K

                                HOLDINGS GUARANTY



                                    Exhibit K


<PAGE>


                                    EXHIBIT L

                              LC SECURITY AGREEMENT



                                    Exhibit L


<PAGE>


                                    EXHIBIT M

               EXISTING LOANS AND INVESTMENTS IN WCG SUBSIDIARIES


                TWC CONTINUING CONTRACTS TO WHICH WCG IS A PARTY

<TABLE>
<CAPTION>
                      AGREEMENT                             DATE                PARTIES
                      ---------                             ----                -------
<S>                                                         <C>                 <C>
- ----------------------------------------------------------------------------------------------------------------------
Amended and Restated Administrative Services Agreement
but excluding all Service Level Agreements included
therein other than those listed below
- -------------------------------------------------------
   Amended and Restated Administrative Services
   Agreement - Cafeteria Card (SLA No. ASF-11)
- -------------------------------------------------------
   Amended and Restated Administrative Services
   Agreement - Catering Services (SLA No. ASF-3)
- -------------------------------------------------------

   Amended and Restated Administrative Services             23-Apr-01           TWC and WCG
   Agreement - Data Center Floor Space (SLA No. IT-23)
- -------------------------------------------------------
   Amended and Restated Administrative Services
   Agreement - Security System Administration
   (SLA No. ASR-2)
- -------------------------------------------------------
   Amended and Restated Administrative Services
   Agreement - Telecommunications Support (PBX)
   (SLA No. IT-19)
- -------------------------------------------------------
   Amended and Restated Administrative Services
   Agreement - Warren Clinic (SLA No. HR-17)
- -------------------------------------------------------
   Amended and Restated Administrative Services
   Agreement - Records Management (Revised)
   (SLA No. ASF-9)
- ----------------------------------------------------------------------------------------------------------------------
Amended and Restated Confidentiality and                    1-Feb-02            TWC and WCG
Nondisclosure Agreement
- ----------------------------------------------------------------------------------------------------------------------
Amended and Restated Cross-License Agreement                23-Apr-01           TWC and WCG
- ----------------------------------------------------------------------------------------------------------------------
Amended and Restated Employee Benefits Agreement            23-Apr-01           TWC and WCG
- ----------------------------------------------------------------------------------------------------------------------
Amended and Restated Separation Agreement                   23-Apr-01           TWC and WCG
- ----------------------------------------------------------------------------------------------------------------------
Amendment of State of Oklahoma OIC Agreement                23-Apr-01           TWC and WCG
- ----------------------------------------------------------------------------------------------------------------------
ITWill Assignment and Assumption Agreement                  23-Apr-01           TWC and WCG
- ----------------------------------------------------------------------------------------------------------------------
Mutual Waiver, dated April 23, 2001                         23-Apr-01           TWC and WCG
- ----------------------------------------------------------------------------------------------------------------------
Professional Services Agreement                             23-Apr-01           TWC, WCG, The Feinberg Group, LLP
- ----------------------------------------------------------------------------------------------------------------------
Relocation Services Agreement                               2-Jan-02            Williams Relocation Management, Inc.
                                                                                (a TWC subsidiary) and WCG
- ----------------------------------------------------------------------------------------------------------------------
Restructuring Support Agreement                             23-Feb-02           TWC and WCG
- ----------------------------------------------------------------------------------------------------------------------
Shareholder Agreement                                       23-Apr-01           TWC and WCG
- ----------------------------------------------------------------------------------------------------------------------
Trademark License Agreement                                 23-Apr-01           TWC and WCG
- ----------------------------------------------------------------------------------------------------------------------
Guaranty Indemnification                                    26-Jul-02           TWC and WCG Agreement
- ----------------------------------------------------------------------------------------------------------------------
Reaffirmation and Cancellation Agreement                    15-Oct-02           TWC and WCG and its Subsidiaries

</TABLE>

All agreements and exhibits related to or incorporated by the foregoing that
were entered into to implement the transactions contemplated thereby, e.g.
Assignment and Assumption Agreements, Bills of Sale.


                       Exhibit M



<PAGE>



              TWC CONTINUING CONTRACTS TO WHICH WCG IS NOT A PARTY

<TABLE>
<CAPTION>
                      AGREEMENT                        DATE                     PARTIES
                      ---------                        ----                     -------
<S>                                                    <C>                      <C>
- ----------------------------------------------------------------------------------------------------------------------
Agreement Of Purchase And Sale And Construction        26-Feb-01 (as amended    Williams Headquarters Building Company
Completion                                             13-Mar-01,               and WCL
                                                       13-April-01,
                                                       13-Sep-01, 30-Apr-02
- ----------------------------------------------------------------------------------------------------------------------
Agreement To Terminate Aircraft Dry Lease - N352WC     27-Mar-02                Williams Aircraft Leasing, LLC (a TWC
                                                                                subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Aircraft Dry Lease - N358WC                            13-Sep-01                Williams Communications Aircraft, LLC
                                                                                (a TWC subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Aircraft Dry Lease - N359WC                            13-Sep-01                Williams Communications Aircraft, LLC
                                                                                (a TWC subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Bank of Oklahoma Tower Use Agreement                   23-Apr-01                Williams Headquarters Building Company
                                                                                and WCL
- ----------------------------------------------------------------------------------------------------------------------
Central Plant Lease Agreement                          23-Apr-01 (as amended    Williams Headquarters Building Company
                                                       13-Sep-01)               and Williams Technology Center, LLC (a
                                                                                WCL subsidiary)
- ----------------------------------------------------------------------------------------------------------------------
Construction, Operating and Maintenance Agreement      1-Jan-97 (as amended     Transcontinental Gas Pipe Line
                                                       19-Feb-99)               Corporation (a TWC subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Consulting Services Agreement                          29-Oct-01                Williams Pipe Line Company (a TWC
                                                                                subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Co-Occupancy Agreement                                 18-Feb-99                Northwest Pipeline Corporation (a TWC
                                                                                subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Co-Occupancy Agreement                                 22-Feb-99                Williams Gas Pipelines Central, Inc.
                                                                                (a TWC subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Co-Occupancy Agreement                                 1-May-00                 Williams Pipe Line Company (a TWC
                                                                                subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Co-Occupancy Agreement                                 5-Mar-99 (as amended     Mid-America Pipeline Company (a TWC
                                                       23-Apr-01)               subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Co-Occupancy Agreement                                 5-Mar-99 (as amended     Williams Field Services Company (a TWC
                                                       23-Apr-01)               subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Dark Fiber IRU Agreement                               26-Feb-01                Transcontinental Gas Pipe Line
                                                                                Corporation (a TWC Subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Fairfax Terminal Station Site Lease                    26-Aug-96                Williams Pipe Line Company (a TWC
                                                                                subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
First Amendment to Level 3 Sublease Agreement          1-Jan-99 (as amended     TWC and WCL
                                                       31-Dec-00 and assigned
                                                       23-Apr-01)
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>


                       Exhibit M


<PAGE>

<TABLE>
<CAPTION>
                      AGREEMENT                        DATE                     PARTIES
                      ---------                        ----                     -------
<S>                                                    <C>                      <C>
- ----------------------------------------------------------------------------------------------------------------------
Lease Agreement                                        1-Jan-97                 Williams Natural Gas Company (a TWC
                                                                                subsidiary now known as Williams Gas
                                                                                Pipelines Central, Inc.) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Lease Agreement                                        1-Sep-95                 Transcontinental Gas Pipe Line
                                                                                Corporation (a TWC subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Lease Agreement                                        1-Mar-97                 Texas Gas Transmission Corporation and
                                                                                WCL
- ----------------------------------------------------------------------------------------------------------------------
Management Services Agreement                          23-Apr-01 (as amended    Williams Headquarters Building Company
                                                       13-Sep-01)               and Williams Technology Center, LLC (a
                                                                                WCL subsidiary)
- ----------------------------------------------------------------------------------------------------------------------
Master Agreement                                       23-Feb-99 (as amended    Williams Pipe Line Company (a TWC
                                                       23-Apr-01)               subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Nondisclosure Agreement                                29-Oct-01                TWC and WCL
- ----------------------------------------------------------------------------------------------------------------------
Northwest Plaza Level Amended and Restated Lease       1-Jan-99 (as amended     Original Amended and Restated Lease
Agreement                                              31-Dec-00)               Agreement between Williams
                                                                                Headquarters Building Company,
                                                                                Landlord, and WCL, Tenant; amendment
                                                                                between TWC, Sublessor, and WCG,
                                                                                Sublessee
- ----------------------------------------------------------------------------------------------------------------------
Operation, Maintenance and Repair Agreement            19-Feb-99 (as amended    Mid-America Pipeline Company,
                                                       31-Aug-99)               Northwest Pipeline Corporation, Texas
                                                                                Gas Transmission Corporation,
                                                                                Transcontinental Gas Pipe Line
                                                                                Corporation, Williams Field Services
                                                                                Company, Williams Gas Pipelines
                                                                                Central, Inc. and Williams Pipe Line
                                                                                Company and WCL
- ----------------------------------------------------------------------------------------------------------------------
Partial Assignment and Assumption Agreement            26-Feb-01                Williams Headquarters Building Company
                                                                                and Williams Technology Center, LLC (a
                                                                                WCL subsidiary)
- ----------------------------------------------------------------------------------------------------------------------
Sale Agreement                                         14-Feb-97                Williams Pipe Line Company (a TWC
                                                                                subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Southwest Plaza Level Amended and Restated Lease       1-Jan-99                 Williams Headquarters Building Company
Agreement                                                                       and WCL
- ----------------------------------------------------------------------------------------------------------------------
Sublease Agreement                                     1-May-00                 Williams Pipe Line Company (a TWC
                                                                                subsidiary) and WCG; WCG assigned its
                                                                                rights to WCL on 2-Apr-02
- ----------------------------------------------------------------------------------------------------------------------
Technical Services Agreement                           1998                     Spectrum Network Systems Limited (now
                                                                                known as PowerTel Limited, a 45% WCG
                                                                                subsidiary) and Williams International
                                                                                Services Company (a TWC subsidiary)
- ----------------------------------------------------------------------------------------------------------------------
Teleport Services Agreement                            9-Oct-01                 Williams Energy Marketing & Trading
                                                                                co. (a TWC subsidiary and WCL
- ----------------------------------------------------------------------------------------------------------------------
The Depot Amended and Restated Lease Agreement         1-Jan-99 (as amended     Williams Headquarters Building Company
                                                       31-Dec-00 and assigned   and WCL
                                                       23-Apr-01)
- ----------------------------------------------------------------------------------------------------------------------
TWC Corporate Guarantee                                23-Apr-01                TWC guaranteed a TWC subsidiary in
                                                                                favor of a WCL subsidiary
- ----------------------------------------------------------------------------------------------------------------------
TWC Corporate Guarantee                                23-Apr-01                TWC guaranteed a TWC subsidiary in
                                                                                favor of a WCL subsidiary
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>


                       Exhibit M


<PAGE>

<TABLE>
<CAPTION>
                      AGREEMENT                        DATE                     PARTIES
                      ---------                        ----                     -------
<S>                                                    <C>                      <C>
- ----------------------------------------------------------------------------------------------------------------------
TWC Guaranty                                           23-Apr-01                TWC guaranteed a TWC subsidiary in
                                                                                favor of a WCL subsidiary
- ----------------------------------------------------------------------------------------------------------------------
User Agreement for Pipe                                5-Mar-99 (as amended     Williams Pipe Line Company (a TWC
                                                       23-Apr-01)               subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Utility Service Agreement                              23-Apr-01 (as amended    Williams Headquarters Building Company
                                                       13-Sep-01)               and Williams Technology Center, LLC (a
                                                                                WCL subsidiary)
- ----------------------------------------------------------------------------------------------------------------------
Web Hosting and Streaming Services Agreement           2-Oct-00                 Williams Energy Services, Inc. (a TWC
                                                                                subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Weld County Sublease Agreement                         19-Apr-96                Williams Natural Gas Company (a TWC
                                                                                subsidiary) and WCL
- ----------------------------------------------------------------------------------------------------------------------
Declaration of Reciprocal Easements (as amended)       15-Oct-02                Williams Headquarters Building Company
                                                                                and Williams Technology Center, LLC
- ----------------------------------------------------------------------------------------------------------------------
Membership Unit Purchase Agreement                     15-Oct-02                Williams Aircraft, Inc. and Williams
                                                                                Communications, LLC
- ----------------------------------------------------------------------------------------------------------------------
Real Estate Purchase Agreement                         15-Jul-02                Williams Headquarters Building
                                                                                Company, Williams Technology Center,
                                                                                LLC, Williams Communications, LLC,
                                                                                Williams Communications Group, Inc.
                                                                                and Williams Aircraft Leasing, LLC
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

All agreement and exhibits related to or incorporated by the foregoing that were
entered into to implement the transactions contemplated thereby, e.g. Assignment
and Assumption Agreements, Bills of Sale.

                       Exhibit M


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>5
<FILENAME>d00961exv10w3.txt
<DESCRIPTION>$900,000,000 CREDIT AGREEMENT
<TEXT>
<PAGE>
                                                                    Exhibit 10.3

                                                                  EXECUTION COPY







                      AMENDED AND RESTATED CREDIT AGREEMENT

                          Dated as of October 31, 2002

                                      among

                          THE WILLIAMS COMPANIES, INC.

                                   as Borrower

                               CITICORP USA, INC.

                          as Agent and Collateral Agent

                              BANK OF AMERICA N.A.

                              as Syndication Agent

                                 CITIBANK, N.A.
                              BANK OF AMERICA N.A.
                             THE BANK OF NOVA SCOTIA

                                as Issuing Banks

                             THE BANKS NAMED HEREIN

                                    as Banks

                                    Arranger:

                            SALOMON SMITH BARNEY INC.



<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

                                    ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1. Certain Defined Terms.............................................1

SECTION 1.2. Computation of Time Periods......................................26

SECTION 1.3. Accounting Terms.................................................26

SECTION 1.4. Miscellaneous....................................................26

SECTION 1.5. Ratings..........................................................27

                                   ARTICLE II
                   AMOUNTS AND TERMS OF THE LETTERS OF CREDIT

SECTION 2.1. Fees.............................................................27

SECTION 2.2. Reduction of the Commitments.....................................28

SECTION 2.3. Prepayments......................................................28

SECTION 2.4. Increased Costs..................................................31

SECTION 2.5. Payments and Computations........................................32

SECTION 2.6. Taxes............................................................33

SECTION 2.7. Sharing of Payments, Etc.........................................36

SECTION 2.8. Optional Termination.............................................36

SECTION 2.9. Extension of Termination Date....................................37

SECTION 2.10. Letter of Credit Facility.......................................37

                                   ARTICLE III
                                   CONDITIONS

SECTION 3.1. Conditions Precedent to Effectiveness of Agreement...............41

SECTION 3.2. Conditions Precedent to an Issuance of a Letter of Credit........42

SECTION 3.3. Special Condition to Effectiveness of Certain Provisions.........43


                                       i

<PAGE>

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

SECTION 4.1. Representations and Warranties of the Borrower...................43

                                    ARTICLE V
                            COVENANTS OF THE BORROWER

SECTION 5.1. Affirmative Covenants............................................48

SECTION 5.2. Negative Covenants...............................................54

                                   ARTICLE VI
                                EVENTS OF DEFAULT

SECTION 6.1. Events of Default................................................64

SECTION 6.2. LC Cash Collateral Accounts......................................67

                                   ARTICLE VII
                             [Intentionally Omitted]

                                  ARTICLE VIII
             THE AGENT; ISSUING BANKS; The collateral Agent; OTHERS

SECTION 8.1. Agent's Authorization and Action.................................67

SECTION 8.2. Agent's Reliance, Etc............................................68

SECTION 8.3. Issuing Banks' Reliance, Etc.....................................68

SECTION 8.4. Rights...........................................................69

SECTION 8.5. [Intentionally Omitted]..........................................69

SECTION 8.6. Indemnification..................................................69

SECTION 8.7. Successor Agent..................................................70

SECTION 8.8. Collateral Agent's Authorization and Action......................70

SECTION 8.9. Collateral Agent's Reliance, Etc.................................70

SECTION 8.10. Collateral Agent and Its Affiliates.............................71

SECTION 8.11. Bank Credit Decision............................................71

SECTION 8.12. Certain Rights of the Collateral Agent..........................71


                                       ii

<PAGE>

SECTION 8.13. Collateral Agent Indemnification................................72

SECTION 8.14. Successor Collateral Agent......................................72

SECTION 8.15. Other Agents; the Arranger......................................73

                                   ARTICLE IX
                                  MISCELLANEOUS

SECTION 9.1. Amendments, Etc..................................................73

SECTION 9.2. Notices, Etc.....................................................73

SECTION 9.3. No Waiver; Remedies..............................................74

SECTION 9.4. Costs and Expenses...............................................74

SECTION 9.5. Right of Set-off.................................................75

SECTION 9.6. Binding Effect; Transfers........................................75

SECTION 9.7. Judgment Currency................................................79

SECTION 9.8. Governing Law....................................................79

SECTION 9.9. Interest.........................................................79

SECTION 9.10. Execution in Counterparts.......................................80

SECTION 9.11. Survival of Agreements, Representations and Warranties, Etc.....80

SECTION 9.12. [INTENTIONALLY OMITTED.]........................................80

SECTION 9.13. Confidentiality.................................................80

SECTION 9.14. Waiver of Jury Trial............................................81

SECTION 9.15. Forum Selection and Consent to Jurisdiction.....................81

SECTION 9.16. Existing Defaults of No Effect..................................82


                                      iii

<PAGE>

                             Schedules and Exhibits

Schedule I    -        Bank Information
Schedule II   -        Notice Information for Borrower
Schedule III  -        Permitted Liens
Schedule IV   -        Commitments
Schedule V    -        Rating Categories
Schedule VI   -        Existing Projects
Schedule VII  -        [Intentionally Omitted]
Schedule VIII -        [Intentionally Omitted]
Schedule IX   -        Liens Securing Existing Debt/Obligations
Schedule X    -        Midstream Subsidiaries
Schedule XI   -        Progeny Facilities
Schedule XII  -        Post-Closing Items
Schedule XIII -        Outstanding Letters of Credit
Schedule XIV  -        Permitted Dispositions
Schedule XV   -        Additional Public Filing
Schedule XVI  -        Storage Lease



Exhibit A     -        Opinion of William G. von Glahn
Exhibit B-1   -        Opinion of New York Counsel (Enforceability)
Exhibit B-2   -        Opinion of New York Counsel (Perfection)
Exhibit C     -        Existing Loans and Investments in WCG Subsidiaries
Exhibit D     -        Form of Transfer Agreement
Exhibit E     -        Notice of Letter of Credit
Exhibit F     -        Form of Security Agreement
Exhibit G     -        Form of LLC Guaranty
Exhibit H     -        Form of Midstream Guaranty
Exhibit I     -        Form of Pledge Agreement
Exhibit J     -        Form of Holdings Guaranty




                                       iv

<PAGE>


                      AMENDED AND RESTATED CREDIT AGREEMENT

          This Amended and Restated Credit Agreement, dated as of October 31,
2002 (amending and restating the Credit Agreement dated as of July 31, 2002 (the
"Existing Credit Agreement") and as may be further amended, modified,
supplemented, renewed, extended or restated from time to time, this
"Agreement"), is by and among The Williams Companies, Inc., the various lenders
as are or may become parties hereto; the Issuing Banks, and Citicorp USA, Inc.,
as Agent and Collateral Agent. In consideration of the mutual covenants and
agreements contained herein, the Borrower, the Agent, the Collateral Agent, the
Issuing Banks and the Banks hereby agree as set forth herein.

                             PRELIMINARY STATEMENTS

          WHEREAS, the Borrower, the Banks, the U.S. Issuing Banks, the
Collateral Agent and the Agent have entered into the Existing Credit Agreement
whereby the Borrower has been entitled from time to time to request that an
Issuing Bank issue Letters of Credit pursuant to the terms and conditions and in
the amounts set forth therein.

          WHEREAS, each Issuing Bank is willing, on the terms and subject to the
conditions hereinafter set forth (including Article III), to issue Letters of
Credit and each Bank is willing to hold a participation interest in such Letters
of Credit on the terms and subject to the conditions hereinafter set forth
(including Article III).

          NOW, THEREFORE, the parties hereto have agreed to amend and restate
the Existing Credit Agreement, and the Existing Credit Agreement is hereby
amended and restated in its entirety as follows:

                                    ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS

          SECTION 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

          "Acceptable Security Interest" in any property shall mean a Lien
     granted pursuant to a Credit Document (a) which exists in favor of the
     Collateral Trustee for the benefit of itself and other parties, as more
     fully described in the Collateral Trust Agreement, (b) which is superior to
     all other Liens, except Permitted Liens, (c) which secures (i) the "Secured
     Obligations" as defined in the Security Agreement (d) which is perfected
     and is enforceable the Collateral Trustee for the benefit of itself and
     other parties, as more fully described in the Collateral Trust Agreement,
     against all other Persons in preference to any rights of any such other
     Person therein (other than Permitted Liens); provided that such Lien may be
     subject to the Agreed Exceptions.

          "Additional Mortgage" has the meaning specified in Section 5.1(f).

<PAGE>

          "Agent" means Citicorp USA, Inc. in its capacity as agent pursuant to
     Article VIII hereof and any successor Agent pursuant to Section 8.7.

          "Agreed Exceptions" means exceptions to title to be set forth in the
     Mortgage that are customary in similar mortgages, do not materially detract
     from the value of the assets covered thereby, do not secure Debt and arise
     in the ordinary course of business.

          "Agreement" has the meaning specified in the first paragraph of this
     Agreement.

          "American Soda" means American Soda, L.L.P., a Colorado limited
     liability partnership.

          "Applicable Issued LC Margin" means, for purposes of Section
     2.1(b)(ii), the rate per annum set forth in Schedule V under the heading
     "Applicable Issued LC Margin" for the relevant Rating Category applicable
     to the Borrower from time to time, and the Applicable Issued LC Margin for
     purposes of Section 2.1(b)(ii) shall change when and as the relevant
     applicable Rating Category changes, provided that for each day on which the
     aggregate stated amount of the Letters of Credit issued and outstanding
     hereunder is equal to or greater than 25% of the aggregate amount of the
     total Letter of Credit Commitments hereunder, the Applicable Issued LC
     Margin for the Borrower shall be increased by 0.250% for such day.

          "Applicable LC Commitment Margin" means, for purposes of Section
     2.1(b)(ii), the rate per annum set forth in Schedule V under the heading
     "Applicable LC Commitment Margin" for the relevant Rating Category
     applicable to the Borrower from time to time, and the Applicable LC
     Commitment Margin for purposes of Section 2.1(b)(ii) shall change when and
     as the relevant applicable Rating Category changes.

          "Arctic Fox Capital Contribution" means the transfer of the Equity
     Interests of Williams Energy (Canada), Inc. from Williams GmbH, in the form
     of a dividend, up through certain other Subsidiaries, to the Borrower, and
     by the Borrower in the form of a capital contribution to Arctic Fox Assets,
     L.L.C. ("Arctic Fox") as required by, and in accordance with, Amendment No.
     3 to Certain Operative Documents and Consents dated as of October 31, 2002,
     among, inter alia, the Borrower and Arctic Fox.

          "Arranger" means Salomon Smith Barney Inc.

          "Asset" or "property" (in each case, whether or not capitalized) means
     any right, title or interest in any kind of property or asset, whether
     real, personal or mixed, and whether tangible or intangible.

          "Attributable Obligation" of any Person means, with respect to any
     Sale and Lease-Back Transaction of such Person as of any particular time,
     the present value at such time discounted at the rate of interest implicit
     in the terms of the lease of the obligations of the lessee under such lease
     for net rental payments during the remaining term of the lease (including
     any period for which such lease has been extended or may, at the option of
     such Person, be extended).


                                       2

<PAGE>

          "Banks" means the lenders listed on the signature pages hereof and
     each other Person that becomes a Bank pursuant to the last sentence of
     Section 9.6(a).

          "Barrett" means, collectively, RMT and its Subsidiaries.

          "Barrett Loan" means the loans made pursuant to the Barrett Loan
     Agreement.

          "Barrett Loan Agreement" means the Credit Agreement, dated as of July
     31, 2002, among the Borrower, RMT LLC, RMT, the Lenders party thereto from
     time to time, Lehman Brothers Inc., as Arranger, and Lehman Commercial
     Paper Inc., as Syndication Agent and as Administrative Agent and the Loan
     Documents (as defined therein).

          "Base Rate" means a fluctuating interest rate per annum as shall be in
     effect from time to time which rate per annum shall at all times be equal
     to the highest of:

               (a) the rate of interest announced publicly by Citibank in New
          York, New York, from time to time, as Citibank's base rate;

               (b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
          nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i) 1/2 of 1
          percent per annum plus (ii) the rate obtained by dividing (A) the
          latest three-week moving average of secondary market morning offering
          rates in the United States for three-month certificates of deposit of
          major United States money market banks, such three-week moving average
          (adjusted to the basis of a year of 360 days) being determined weekly
          on each Monday (or, if such day is not a Business Day, on the next
          succeeding Business Day) for the three week period ending on the
          previous Friday by Citibank on the basis of such rates reported by
          certificate of deposit dealers to and published by the Federal Reserve
          Bank of New York or, if such publication shall be suspended or
          terminated, on the basis of quotations for such rates received by
          Citibank from three New York certificate of deposit dealers of
          recognized standing selected by Citibank, by (B) a percentage equal to
          100% minus the average of the daily percentages specified during such
          three week period by the Federal Reserve Board for determining the
          maximum reserve requirement (including, but not limited to, any
          emergency, supplemental or other marginal reserve requirement) for
          Citibank with respect to liabilities consisting of or including (among
          other liabilities) three-month Dollar non-personal time deposits in
          the United States, plus (iii) the average during such three-week
          period of the annual assessment rates estimated by Citibank for
          determining the then current annual assessment payable by Citibank to
          the Federal Deposit Insurance Corporation (or any successor) for
          insuring Dollar deposits of Citibank in the United States; and

               (c) the sum of 1/2 of one percent per annum plus the Federal
          Funds Rate in effect from time to time.

          "Borrower" means TWC.


                                       3

<PAGE>

          "Business Day" means a day of the year on which banks are not required
     or authorized to close in New York City or Toronto, Canada.

          "Business Entity" means a partnership, limited partnership, limited
     liability partnership, corporation (including a business trust), limited
     liability company, unlimited liability company, joint stock company, trust,
     unincorporated association, joint venture or other entity.

          "California Proceedings" means the proceedings with or in the State of
     California, as described in more detail on the Form 10-Q for the quarterly
     period ended June 30, 2002, filed by the Borrower with the Securities and
     Exchange Commission on August 14, 2002.

          "Canadian Dollar L/C Commitment" of any Issuing Bank means, at any
     time, the amount set opposite such Bank's name on Schedule IV under the
     heading "Canadian Dollar L/C Commitments" or as reflected for such Bank in
     the relevant Transfer Agreement to which it is a party, as such amount may
     be terminated, reduced or increased pursuant to Section 2.2, Section 2.8,
     Section 6.1 or Section 9.6(a).

          "Canadian Dollars" and "C$" means the lawful money of Canada.

          "Canadian Issuing Bank" means The Bank of Nova Scotia.

          "Canadian Letter of Credit" means any Letter of Credit payable in
     Canadian Dollars.

          "Capital Lease" means a lease that in accordance with generally
     acceptable accounting principles must be reflected on a company's balance
     sheet as an asset and corresponding liability.

          "Cardinal Pipeline System" means that intrastate natural gas pipeline
     system doing business under that name located in the State of North
     Carolina, in which the Borrower indirectly owned a 45% interest on July 31,
     2002.

          "Cash Collateralize" means, with respect to a Letter of Credit, the
     deposit in Dollars of immediately available funds into an LC Cash
     Collateral Account in an amount equal to the stated amount of (or the U.S.
     Dollar Equivalent thereof, in the case of Canadian Letters of Credit), and
     all Letter of Credit fees related to, such Letter of Credit.

          "Cash Flow" means, for any period, the Consolidated cash flow from
     operations of the Borrower and its Consolidated Subsidiaries for such
     period determined in accordance with generally accepted accounting
     principles; provided that in determining such Consolidated cash flow from
     operations, there shall be excluded therefrom (to the extent otherwise
     included therein) (a) any positive cash flow from operations of any Person
     (including Project Financing Subsidiaries) subject to any restriction
     prohibiting the distribution of cash to the Borrower or any of its
     Consolidated Subsidiaries, except and then only to the extent of the amount
     thereof that the Borrower or any of its Consolidated Subsidiaries actually
     receives or has the right to receive (within the limits


                                       4

<PAGE>

     of such restrictions) during such period, (b) proceeds resulting from the
     sale, transfer or other disposition of any property by the Borrower or its
     Consolidated Subsidiaries (other than sales, transfers and other
     dispositions in the ordinary course of business), (c) all other
     extraordinary items, (d) any item constituting the cumulative effect of a
     change in accounting principles, prior to applicable income taxes, (e)
     repayment of the WCG Synthetic Lease and (f) for the third Fiscal Quarter
     of 2002 only, margin and capital or adequate assurances relating to its
     refining and marketing and EMT.

          "Cash Equivalents" means any of the following, to the extent owned by
     the Borrower or any of its Subsidiaries free and clear of all Liens other
     than Permitted Liens and having a maturity of not greater than 270 days
     from the date of acquisition thereof: (a) readily marketable direct
     obligations of the Government of the United States or any agency or
     instrumentality thereof or obligations unconditionally guaranteed by the
     full faith and credit of the Government of the United States, (b) insured
     certificates of deposit of or time deposits with any commercial bank that
     is a Bank or a member of the Federal Reserve System, issues (or the parent
     of which issues) commercial paper rated as described in clause (c) below,
     is organized under the laws of the United States or any State thereof and
     has combined capital and surplus of at least $1 billion or (c) commercial
     paper in an aggregate amount of no more than $500,000,000, per issuer
     outstanding at any time, issued by any corporation organized under the laws
     of any State of the United States and rated at least "Prime-1" (or the then
     equivalent grade) by Moody's or "A-1" (or the then equivalent grade) by
     S&P.

          "Castle Partnership Agreement" means the Amended and Restated
     Agreement of Limited Partnership of Castle Associates L.P., dated as of
     December 23, 1998, by and among Garrison, L.L.C., a Delaware limited
     liability company, Laughton, L.L.C., a Delaware limited liability company,
     and Colchester LLC, a Delaware limited liability company, as amended,
     supplemented, amended and restated or otherwise modified from time to time.

          "Castle Transaction" means the purchase by TWC of the limited
     partnership interest in Castle Associates, L.P. ("Castle"), a Delaware
     partnership held by Colchester LLC, a Delaware limited liability company.

          "Citibank" means Citibank, N.A.

          "Citicorp" means Citicorp USA, Inc.

          "Code" means, as appropriate, the Internal Revenue Code of 1986, as
     amended, or any successor federal tax code, and any reference to any
     statutory provision shall be deemed to be a reference to any successor
     provision or provisions.

          "Collateral" means all personal and real property comprising the
     Midstream Assets of the Borrower, each Guarantor and each of the Midstream
     Subsidiaries (but excluding agreements that make up the Trading Book to the
     extent relating to contracts to which EMT is a party) whether now owned or
     hereafter acquired and all other property subject to a Lien for the benefit
     of the Banks in accordance with the terms of any Credit


                                       5

<PAGE>

     Document; provided that no real or personal property of RMT LLC or its
     Subsidiaries (including, without limitation, the RMT Equity Interests) or
     real or personal property of WGPC shall be included as "Collateral";
     provided with respect to oil of Williams Alaska Petroleum, Inc. ("WAPI")
     that is transported through the Trans-Alaska Pipeline System, the security
     interest in such oil shall attach only at the time such oil is delivered to
     WAPI through the Trans-Alaska Pipeline System at the outlet flange
     measuring device located at North Pole, Alaska.

          "Collateral Account" means a deposit account of the Borrower which
     meets each of the following requirements: (i) with a commercial banking
     institution that is a member of the Federal Reserve System, has its
     short-term deposits rated A- or higher by Moody's or S&P and has a combined
     capital, surplus and undivided profits of not less than $1,000,000,000,
     (ii) over which the Borrower has no control, (iii) in which an Acceptable
     Security Interest exists, (iv) as to which (if not held with the Collateral
     Agent) Borrower has complied with Sections 3.1 and 3.6 of the Security
     Agreement, and (v) deposits in which, if invested, may be invested only in
     those investments permitted under Sections 5.2(h) and (o).

          "Collateral Agent" means Citicorp in its capacity as Collateral Agent
     pursuant to Article VIII and any successor in such capacity pursuant to
     Section 8.14.

          "Collateral Trust Agreement" means the Collateral Trust Agreement
     dated as of July 31, 2002 by and among the Company, several of its
     Subsidiaries and Citibank N.A., as Collateral Trustee, which Collateral
     Trust Agreement provides for certain collateral to be held by such
     Collateral Trustee for the benefit of the Banks, Issuing Banks and agents
     under this Agreement, the lenders, issuing banks and agents under the
     Multiyear Williams Credit Agreement and the holders of certain public debt
     of TWC issued pursuant to that certain (i) Indenture between MAPCO Inc., as
     Issuer, and Bankers Trust Company, as Trustee dated March 31, 1990 and (ii)
     Indenture between Transco Energy Company, as Issuer, and Bankers Trust
     Company, as Trustee dated May 1, 1990.

          "Collateral Trustee" means Citibank, N.A., in its capacity as
     Collateral Trustee under the terms of the Collateral Trust Agreement and
     its successors or assigns appointed pursuant to Article 5 of the Collateral
     Trust Agreement.

          "Consolidated" refers to the consolidation of the accounts of any
     Person and its consolidated subsidiaries in accordance with generally
     accepted accounting principles.

          "Consolidated Net Worth" of any Person means the Net Worth of such
     Person and its Consolidated Subsidiaries on a Consolidated basis plus, in
     the case of the Borrower, the Designated Minority Interests to the extent
     not otherwise included; provided that in no event shall the value ascribed
     to Designated Minority Interests for the Consolidated Subsidiaries of the
     Borrower described in clauses (i) through (v), (vii) and (viii) of the
     definition of "Designated Minority Interests" below exceed $136,892,000 in
     the aggregate for the purposes of this definition. As used in this
     definition, "Designated Minority Interests" means, as of any date of
     determination, the total value, determined in accordance with generally
     accepted accounting principles, of the minority interests of


                                       6

<PAGE>

     Persons other than the Borrower and Consolidated Subsidiaries of the
     Borrower in the following Subsidiaries of the Borrower: (i) El Furrial,
     (ii) PIGAP II, (iii) Nebraska Energy, (iv) Seminole, (v) American Soda,
     (vi) the Midstream Asset MLP, (vii) Apco Argentina, Inc. and (viii) other
     Subsidiaries with a value not to exceed in the aggregate $9,000,000 for
     such other Subsidiaries not referred to in items (i) through (vii);
     provided that minority interests which provide for a stated preferred
     cumulative return shall not be included in "Designated Minority Interests".

          "Consolidated Subsidiaries" of any Person means all other Persons the
     financial statements of which are consolidated with those of such Person in
     accordance with generally accepted accounting principles. For the avoidance
     of doubt, as of the date of this Agreement, the MLP and its Subsidiaries
     shall be "Consolidated Subsidiaries" of the Borrower.

          "Consolidated Tangible Net Worth" of any Person means the Tangible Net
     Worth of such Person and its Consolidated Subsidiaries on a Consolidated
     basis.

          "Credit Documents" means this Agreement, the Security Documents, the
     Letter of Credit Documents, each Letter of Credit, all documents,
     instruments, agreements, certificates and notices at any time executed
     and/or delivered to the Agent, the Collateral Agent, the Collateral
     Trustee, the Surety Administrative Agent, any Issuing Bank, or any Bank in
     connection therewith.

          "Debt" means, in the case of any Person, the principal or equivalent
     amount (without duplication) of (i) indebtedness of such Person for
     borrowed money, (ii) obligations of such Person evidenced by bonds,
     debentures, notes or similar instruments, (iii) obligations of such Person
     to pay the deferred purchase price of property or services (other than
     trade payables not overdue by more than 60 days incurred in the ordinary
     course of business), (iv) obligations of such Person as lessee under leases
     that are, in accordance with generally accepted accounting principles,
     recorded as capital leases, (v) payments necessary to exercise a purchase
     option with respect to the property used by such Person and encumbered by a
     Synthetic Lease with such Person as lessee, excluding any portion of such
     amount representing accrued interest, transfer taxes or other ancillary
     items, (vi) obligations of such Person under any Financing Transaction,
     (vii) indebtedness incurred after July 31, 2002 of the Subsidiaries of such
     Person, and indebtedness incurred after the date of this Agreement of any
     other entity that has been created or utilized, directly or indirectly, for
     financing purposes of such Person or any of its Subsidiaries, (viii)
     obligations of such Person under guaranties in respect of, and obligations
     (contingent or otherwise) to purchase or otherwise acquire, or otherwise to
     assure a creditor against loss in respect of indebtedness or obligations of
     others of the kinds referred to in clauses (i) through (vii) of this
     definition, (ix) indebtedness or obligations of others of the kinds
     referred to in clauses (i) through (viii) of this definition secured by any
     Lien on or in respect of any property of such Person and (x) any
     Attributable Obligations of such Person; provided, however, that Debt shall
     not include (w) any obligations of the Borrower in respect of the FELINE
     PACS; (x) any obligations of the Borrower or its Subsidiaries in respect of
     the WCG Note Trust Bonds; (y) Non-Recourse Debt; (z) Performance
     Guaranties, (aa) monetary obligations or guaranties of


                                       7

<PAGE>

     monetary obligations of Persons as lessee under leases (other than, to the
     extent provided herein above, Synthetic Leases) that are, in accordance
     with generally accepted accounting principles, recorded as operating leases
     and (bb) guarantees by such Person of obligations of others which are not
     obligations described in clauses (i) through (x) of this definition, and
     provided further that where any such indebtedness or obligation of such
     Person is made jointly, or jointly and severally, with any third party or
     parties other than any Subsidiary of such Person, the amount thereof for
     the purpose of this definition only shall be the pro rata portion thereof
     payable by such Person, so long as such third party or parties have not
     defaulted on its or their joint and several portions thereof and can
     reasonably be expected to perform its or their obligations thereunder. For
     the avoidance of doubt, "Debt" shall include, without duplication, the
     principal amount of the obligations of the Borrower hereunder in respect of
     the Letters of Credit that have been drawn upon by the beneficiaries to the
     extent of the amount drawn.

          "Deepwater Assets" shall have the meaning given such term in Item 8 of
     Schedule XIV hereto.

          "Deepwater JV" means any Person to whom any Deepwater Assets have been
     transferred in connection with the formation of such Person and in which
     the Borrower or any of its Subsidiaries has retained an Equity Interest.

          "Deepwater Transactions" means, collectively, the transactions
     consummated in connection with (i) that certain Second Amended and Restated
     Participation Agreement dated January 28, 2002 by and among Williams Field
     Services - Gulf Coast Company, L.P., as Lessee, Williams Field Services
     Company, as Construction Agent, TWC, as Guarantor, Wells Fargo Bank
     Northwest, National Association, (f/k/a First Security Bank, National
     Association), as Certificate Trustee, Wells Fargo Bank Nevada, N.A.,
     (successor to First Security Trust Company of Nevada), as Collateral Agent,
     the Certificate Holders, Hatteras Funding Corporation, as CP Lender, the
     Facility Lenders, Bank of America, National Association, as Administrative
     Agent and Administrator, Banc of America Facilities Leasing, L.L.C., as
     Arranger, Bank of Nova Scotia, as Syndication Agent, and Credit Agricole
     Indosuez, as Documentation Agent and/or (ii) that certain Second Amended
     and Restated Participation Agreement dated January 28, 2002 by and among
     Williams Oil Gathering, L.L.C., as Lessee, Williams Field Services Company,
     as Construction Agent, TWC, as Guarantor, Wells Fargo Bank Northwest,
     National Association, (f/k/a First Security Bank, National Association), as
     Certificate Trustee, Wells Fargo Bank Nevada, N.A., (successor to First
     Security Trust Company of Nevada), as Collateral Agent, the Certificate
     Holders, Hatteras Funding Corporation, as CP Lender, the Facility Lenders,
     Bank of America, National Association, as Administrative Agent and
     Administrator, Banc of America Facilities Leasing, L.L.C., as Arranger,
     Bank of Nova Scotia, as Syndication Agent, and Credit Agricole Indosuez, as
     Documentation Agent.

          "Default" means any event or condition that, upon the giving of notice
     or passage of time or both, if required by Section 6.1, would constitute an
     Event of Default.


                                       8

<PAGE>

          "Designated Midstream Subsidiaries" means Nebraska Energy; Rio Grande
     Pipeline Company; Baton Rouge Fractionators, L.L.C.; Williams Lynxs Alaska
     CargoPort, L.L.C.; Tri-States NGL Pipeline, L.L.C; WILPRISE Pipeline
     Company, L.L.C.; Williams Alaska Air Cargo Properties, L.L.C.; NewGP;
     WilJet, L.L.C.; Longhorn Partners GP, L.L.C.; Longhorn Partners Pipeline,
     L.P.; Mapletree, LLC; E-Birchtree, LLC; and E-Oaktree, LLC.


          "Designated Minority Interests" has the meaning specified in the
     definition of "Consolidated Net Worth".

          "Designating Bank" has the meaning specified in Section 9.6(g).

          "Dollars" and "$" means lawful money of the United States of America.

          "EDGAR" means "Electronic Data Gathering, Analysis and Retrieval"
     system, a database maintained by the Securities and Exchange Commission
     containing electronic filings of issuers of certain securities.

          "El Furrial" means WilPro Energy Services (El Furrial) Limited, a
     Cayman Islands corporation.

          "Eligible Assignee" means (i) any Bank, (ii) any affiliate of any
     Bank, and (iii) any other Person not covered by clause (i) or (ii) of this
     definition that is consented to by the Borrower, the Agent and the Issuing
     Banks (which consents shall not be unreasonably withheld); provided that if
     any Default or Event of Default has occurred and is continuing, no consent
     of the Borrower shall be required; provided further that neither the
     Borrower nor any affiliate of the Borrower shall be an Eligible Assignee.

          "EMT" means Williams Energy Marketing & Trading Company.

          "Environment" shall have the meaning set forth in 42 U.S.C. ss.
     9601(8) or any successor statute and "Environmental" shall mean pertaining
     or relating to the Environment.

          "Environmental Permits" mean any and all material permits, licenses,
     registrations, exemptions and any other authorization required under any
     Environmental Protection Statutes.

          "Environmental Protection Statute" shall mean any United States local,
     state or federal, or any foreign, law, statute, regulation, order, consent
     decree or other agreement or Governmental Requirement arising from or in
     connection with or relating to the protection or regulation of the
     Environment, including those laws, statutes, regulations, orders, decrees,
     agreements and other Governmental Requirements relating to the disposal,
     cleanup, production, storing, refining, handling, transferring, processing
     or transporting of Hazardous Waste, Hazardous Substances or any pollutant
     or contaminant, wherever located.


                                       9

<PAGE>

          "Equity Interests" means any capital stock, partnership, joint
     venture, member or limited liability or unlimited liability company
     interest, beneficial interest in a trust or similar entity or other equity
     interest or investment of whatever nature.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
     amended from time to time, and the regulations promulgated and rulings
     issued thereunder from time to time.

          "ERISA Affiliate" means any trade or business (whether or not
     incorporated) which is a member of a group of which the Borrower is a
     member and which is under common control within the meaning of Section 414
     of the Code and the regulations promulgated thereunder.

          "Eurocurrency Liabilities" has the meaning assigned to that term in
     Regulation D of the Federal Reserve Board, as in effect from time to time.

          "Events of Default" has the meaning specified in Section 6.1.

          "Excluded Collateral" means (i) all property owned by RMT LLC or its
     Subsidiaries (including, without limitation, the RMT Equity Interests),
     WGPC and the Designated Midstream Subsidiaries, (ii) subject to Section
     5.1(f), all personal and real property owned by the Restricted Midstream
     Subsidiaries, (iii) the Excluded Equity Interests, (iv) except to the
     extent currently subject to an Acceptable Security Interest, the Refineries
     (subject to the requirements set forth in Section 5.1(e)), (v) the Mapco
     Office Building, (vi) the agreements that make up the Trading Book but only
     to the extent relating to contracts to which EMT is a party and (vii) any
     property of Williams Field Services Company to the extent that such
     property constitutes "Leased Property" (as such term is defined on even
     date herewith in the Deepwater Transactions).

          "Excluded Equity Interests" means (i) the Equity Interests in each of
     the Designated Midstream Subsidiaries (other than the Equity Interests of
     Williams Energy Services, LLC and Williams Natural Gas Liquids, Inc.);
     provided, however, as to each Designated Midstream Subsidiary, at such time
     as the Borrower or any of its Subsidiaries obtain the consents provided for
     in Paragraph 13 of Schedule XII the Equity Interest of such Designated
     Midstream Subsidiary shall cease to be an "Excluded Equity Interest" and
     (ii) subject to Section 5.1(f), the Equity Interest in each of the
     Restricted Midstream Subsidiaries.

          "Existing Credit Agreement" has the meaning specified in the recitals
     to this Agreement.

          "Federal Funds Rate" means, for any day, a fluctuating interest rate
     per annum equal for such day to the weighted average of the rates on
     overnight federal funds transactions with members of the Federal Reserve
     System arranged by federal funds brokers, as published for such day (or, if
     such day is not a Business Day, for the next preceding Business Day) by the
     Federal Reserve Bank of New York, or, if such rate is not so published for
     any day which is a Business Day, the average of the quotations for


                                       10

<PAGE>

     such day on such transactions received by the Agent from three federal
     funds brokers of recognized standing selected by it.

          "Federal Reserve Board" means the Board of Governors of the Federal
     Reserve System, or any federal agency or authority of the United States
     from time to time succeeding to its function.

          "FELINE PACS" means those certain units, as described in the
     Borrower's prospectus supplement dated January 7, 2002, issued by the
     Borrower in January, 2002 in an aggregate face amount of $1,100,000,000.

          "Financing Transaction" means, with respect to any Person, any
     individual or group of related Persons (i) prepaid forward sales of oil,
     gas, minerals or other assets by such Person, (ii) interest rate, currency,
     commodity or other swaps, collars, caps, options or other derivatives or
     (iii) sales or transfers of assets, the primary effect of which or an
     important purpose of which is to receive money or credit in advance coupled
     with an obligation to repay or perform in the future to effect repayment
     thereof, including any contract monetization or production payment.
     Notwithstanding the foregoing, the following transactions, if entered into
     in the ordinary course of business by the Borrower or any of its affiliates
     and otherwise permitted hereunder, shall be deemed not to be Financing
     Transactions: (a) sales or exchanges of property fully delivered within 90
     days of receipt of the first payment by a counterparty therefor, (b)
     interest rate, currency, commodity or other swaps, collars, caps, options
     or other derivatives (including prepayment of forward sales of property to
     a counterparty of the Borrower or any of its affiliates to hedge against
     risks in the ordinary course of business, provided that the forward
     delivery obligation with respect to the property sold must be fully
     performed within 120 days), and (c) "riskless" forward sales or exchanges
     of property whereby a third party guarantees the performance obligations of
     the Borrower or any of its affiliates to deliver such property without
     subrogation or other recourse against the Borrower or any of its affiliates
     by any party to the transaction. The term "contract monetization" as used
     in this definition means the acceleration of cash flows a contract party
     expects to receive from such contract pursuant to which the contract party
     retains a significant ongoing obligation to perform, but shall in any event
     exclude transactions commonly referred to as securitizations. The term
     "production payment" as used in this definition means a limited-term
     non-cost bearing right to receive produced hydrocarbons or the proceeds
     therefrom satisfiable in cash or in kind up to an aggregate defined amount
     of cash and/or hydrocarbons.

          "Fiscal Quarter" means any quarter of a Fiscal Year.

          "Fiscal Year" means any period of twelve consecutive calendar months
     ending on December 31; references to a Fiscal Year with a number
     corresponding to any calendar year (e.g., the "2002 Fiscal Year") refer to
     the Fiscal Year ending on December 31 of such calendar year.

          "Fitch" means Fitch, Inc.


                                       11

<PAGE>

          "Governmental Authority" means the government of the United States,
     any other nation or any political subdivision thereof, whether state or
     local, and any agency, authority, instrumentality, regulatory body, court,
     central bank or other Person exercising executive, legislative, judicial,
     taxing, regulatory or administrative powers or functions of or pertaining
     to government.

          "Governmental Requirements" means all judgments, orders, writs,
     injunctions, decrees, awards, laws, ordinances, statutes, regulations,
     rules, franchises, permits, certificates, licenses, authorizations and the
     like and any other requirements of any government or any commission, board,
     court, agency, instrumentality or political subdivision thereof.

          "Guaranties" means, collectively, the LLC Guaranty, the Midstream
     Guaranty and the Holdings Guaranty.

          "Guarantor" and "Guarantors" means, individually and collectively, as
     applicable, RMT LLC, WGPC, EMT and each of the Midstream Subsidiaries.

          "Hazardous Substance" shall have the meaning set forth in 42 U.S.C.
     ss. 9601(14) and shall also include each other substance considered to be a
     hazardous substance under any Environmental Protection Statute.

          "Hazardous Waste" shall have the meaning set forth in 42 U.S.C. ss.
     6903(5) and shall also include each other substance considered to be a
     hazardous waste under any Environmental Protection Statute (including 40
     C.F.R. ss. 261.3).

          "Hedge Agreements" means interest rate swap, cap or collar agreements,
     interest rate future or option contracts, currency swap agreements,
     currency future or option contracts and other hedging obligations.

          "Holdings Guaranty" means a Guaranty executed by RMT LLC in
     substantially the form of Exhibit J, as amended, supplemented or modified
     from time to time.

          "Hydrocarbons" (whether or not capitalized) means oil, gas, casinghead
     gas, condensate, distillate, and liquid hydrocarbons.

          "Indemnified Parties" has the meaning assigned to such term in Section
     9.4(b).

          "Insufficiency" means, with respect to any Plan, the amount, if any,
     by which the present value of the vested benefits under such Plan exceeds
     the fair market value of the assets of such Plan allocable to such
     benefits.

          "Interest Expense" means, for any period, the gross interest expense
     (determined in accordance with generally accepted accounting principles) of
     the Borrower and its Consolidated Subsidiaries accrued for such period,
     including that attributable to the capitalized amount of obligations owing
     under Capital Leases, all debt discount amortized in such period and all
     commissions, discounts and other fees and charges owed with respect to
     letters of credit and bankers' acceptance financing, net of interest income


                                       12

<PAGE>

     (determined in accordance with generally accepted accounting principles) of
     the Borrower and its Consolidated Subsidiaries, but excluding such interest
     expense, debt discount, commissions, discounts and other fees and charges
     and interest income to the extent attributable to the Non-Recourse Debt of
     Project Financing Subsidiaries; provided that interest expense incurred in
     connection with the WCG Note Trust Bonds shall be excluded from this
     definition.

          "Investment" in any Person means any loan or advance to such Person,
     any purchase or other acquisition of any Equity Interests or Debt or the
     assets comprising a division or business unit or a substantial part or all
     of the business of such Person, any capital contribution to such Person or
     any other direct or indirect investment in such Person, including, without
     limitation, any acquisition by way of a merger or consolidation and any
     arrangement pursuant to which the investor incurs Debt of the types
     referred to in clause (viii) or (ix) of the definition of "Debt" in respect
     of such Person.

          "Issuing Banks" means the U.S. Issuing Banks and the Canadian Issuing
     Bank, in their capacity as issuers of Letters of Credit.

          "LC Cash Collateral Accounts" has the meaning assigned to such term in
     Section 6.2.

          "LC Participation Percentage" of any Bank means, at any time, the
     percentage set opposite such Bank's name on Schedule IV or as reflected for
     such Bank in the relevant Transfer Agreement to which it is a party, as
     such amount may be terminated, reduced or increased pursuant to Section
     9.6(a).

          "Legacy L/Cs" means those outstanding letters of credit as of July 31,
     2002 as set forth on Schedule XI, to the extent such letters of credit have
     not been fully cash collateralized.

          "Lending Office" means, with respect to any Bank, the office of such
     Bank specified as its "Lending Office" opposite its name on Schedule I
     hereto or in the relevant Transfer Agreement delivered pursuant to Section
     9.6(a), or such other office of such Bank as such Bank may from time to
     time specify to the Borrower and the Agent.

          "Letter of Credit Commitment" of any Issuing Bank means, at any time,
     the amount set opposite such Bank's name on Schedule IV under the heading
     "U.S. Dollar L/C Commitments" or "Canadian Dollar L/C Commitments" or as
     reflected for such Bank in the relevant Transfer Agreement to which it is a
     party, as such amount may be terminated, reduced or increased pursuant to
     Section 2.2, Section 2.8, Section 6.1 or Section 9.6(a).

          "Letter of Credit Documents" means, with respect to any Letter of
     Credit, collectively, any application therefor and any other agreements,
     instruments, guarantees or other documents (whether general in application
     or applicable only to such Letter of Credit) governing or providing for (a)
     the rights and obligations of the parties concerned or at risk with respect
     to such Letter of Credit or (b) any collateral security for any of


                                       13

<PAGE>

     such obligations, each as the same may be modified and supplemented and in
     effect from time to time.

          "Letter of Credit Interest" means, for each Bank, (i) such Bank's
     participation interest in Letters of Credit (and, in the case of an Issuing
     Bank, such Issuing Bank's retained interest in Letters of Credit issued by
     it), and (ii) such Bank's rights and interests in Reimbursement Obligations
     and fees, interest and other amounts payable in connection with Letters of
     Credit and Reimbursement Obligations.

          "Letter of Credit Liability" means at any time and in respect of any
     Letter of Credit, the sum (without duplication) of (a) the maximum possible
     undrawn amount of such Letter of Credit at such time (after giving effect
     to any step up provision or other mechanism for increase, if any, and
     assuming that all conditions to drawing have been satisfied) plus (b) the
     aggregate unpaid amount of all drawings under such Letter of Credit that
     are unpaid at such time; provided that, with respect to any Canadian Letter
     of Credit, all amounts included in clause (a) or (b) hereof shall be
     calculated at the U.S. Dollar Equivalent thereof. For purposes of this
     Agreement, a Bank shall be deemed to hold a Letter of Credit Liability in
     an amount equal to its LC Participation Percentage in the related Letter of
     Credit.

          "Letters of Credit" has the meaning assigned to such term in Section
     2.10 and, for greater certainty, shall include all Canadian Letters of
     Credit.

          "Lien" means any mortgage, lien, pledge, charge, deed of trust,
     security interest, encumbrance or other analogous type of preferential
     arrangement to secure or provide for the payment of any Debt, trade
     payable, obligation or other liability of any Person, whether arising by
     contract, operation of law or otherwise (including the interest of a vendor
     or lessor under any conditional sale agreement, capital lease or other
     title retention agreement).

          "LLC Guaranty" means a Guaranty executed by WGPC in substantially the
     form of Exhibit G, as amended, supplemented or modified from time to time.

          "Major Subsidiary" means any Subsidiary of the Borrower with assets
     having a book value of $1,000,000,000 or more.

          "Majority Banks" means at any time (i) Banks having more than 50% of
     the LC Participation Percentages, or (ii) if the Letter of Credit
     Commitments have terminated and any Letter of Credit or any Letter of
     Credit Interest is outstanding, then Banks having more than 50% of the sum
     of the aggregate unpaid principal amount of the outstanding Letter of
     Credit Interests (provided that for purposes of this definition and
     Sections 2.8, 6.1 and 7.1 neither the Borrower nor any Subsidiary or
     Related Party of the Borrower, if a Bank, shall be included in (i) the
     Banks owed or holding Letter of Credit Interests or (ii) determining the
     aggregate amount of the Letter of Credit Interests).

          "Mapco Office Building" means the real property, improvements and
     related office equipment located at 1801 South Baltimore Avenue, Tulsa,
     Oklahoma.


                                       14

<PAGE>

          "MAPL" means Mid-America Pipeline Company, LLC, a Delaware limited
     liability company.

          "MAPL Asset Disposition" means the sale, transfer or other
     distribution of the Equity Interests in or assets of MAPL and Mapletree,
     LLC.

          "Material Subsidiary" means (i) each Major Subsidiary and each other
     Subsidiary of the Borrower (other than a Project Financing Subsidiary) that
     itself (on an unconsolidated, stand alone basis) owns in excess of 5% of
     the book value of the Consolidated assets of the Borrower and its
     Consolidated Subsidiaries, (ii) each of TGPL, TGT and NWP and (iii) each
     Subsidiary that owns any direct or indirect interest in TGPL, TGT and NWP.

          "Midstream Asset MLP" means one or more master limited partnerships
     included in the Consolidated financial statements of the Borrower to which
     the Borrower has transferred or shall transfer certain assets relating to
     the Midstream Business as well as certain marine and inland terminals and
     related pipeline systems, including MLP.

          "Midstream Assets" means all assets now owned or hereafter acquired by
     the Borrower or any of its Subsidiaries, which are either individually, or
     in conjunction with other Midstream Assets, necessary for the conduct of
     the Midstream Business by Borrower and its Subsidiaries, including the
     Refineries in Alaska and Tennessee, except that "Midstream Assets" shall
     not include (a) the assets being part of either of the MAPL Asset
     Disposition or Seminole Asset Disposition unless the MAPL Asset Disposition
     or Seminole Asset Disposition, as applicable, shall not have occurred on or
     prior to the date that is 60 days from July 31, 2002 and (b) any assets of
     NewGP or its Subsidiaries.

          "Midstream Business" means the gathering, marketing, dehydrating,
     treating, processing, fractionating, refining, storing, selling and
     transporting of Hydrocarbons and Refined Hydrocarbons in the United States,
     and any business relating thereto; provided that "Midstream Business" shall
     not include (i) operations that are directly related to the exploration and
     production of Hydrocarbons, (ii) the interstate transportation and storage
     of natural gas and associated liquid hydrocarbons under the jurisdiction of
     the Natural Gas Act, and (iii) the transportation and storage of natural
     gas and associated liquid hydrocarbons through the Cardinal Pipeline
     System.

          "Midstream Guaranty" means a Guaranty executed by certain Guarantors
     in substantially the form of Exhibit H, as amended, supplemented or
     modified from time to time.

          "Midstream Subsidiaries" means each Subsidiary of the Borrower
     (excluding Williams Mobile Bay Producer Services, L.L.C., NewGP and each of
     their Subsidiaries, if any) engaged either in whole or in part of the
     Midstream Business that either (1) owns, leases or has possession of
     Midstream Assets that have an aggregate fair market value of $1,000,000 or
     more, or (2) owns, leases or has possession of any Midstream Asset or right
     that is material to the ownership, leasing or operation of the Midstream
     Assets taken as a whole.


                                       15

<PAGE>

          "MLP" means Williams Energy Partners L.P., a Delaware limited
     partnership.

          "Moody's" means Moody's Investors Service, Inc. or its successor.

          "Mortgage" means each mortgage, deed of trust or comparable real
     property Lien document executed by any Guarantor from time to time, in such
     form as necessary to grant an Acceptable Security Interest in favor of the
     Collateral Trustee for the benefit of itself and other parties, as more
     fully described in the Collateral Trust Agreement.

          "Multiemployer Plan" means a "multiemployer plan" as defined in
     Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate of
     the Borrower is making or accruing an obligation to make contributions, or
     has within any of the preceding five plan years made or accrued an
     obligation to make contributions.

          "Multiple Employer Plan" means an employee benefit plan as defined in
     Section 3(2) of ERISA, other than a Multiemployer Plan, subject to Title IV
     of ERISA to which the Borrower or any ERISA Affiliate of the Borrower, and
     one or more employers other than the Borrower or an ERISA Affiliate of the
     Borrower, is making or accruing an obligation to make contributions or, in
     the event that any such plan has been terminated, to which the Borrower or
     any ERISA Affiliate of the Borrower made or accrued an obligation to make
     contributions during any of the five plan years preceding the date of
     termination of such plan.

          "Multiyear Williams Credit Agreement" means that certain First Amended
     and Restated Credit Agreement dated as of October 31, 2002 among the
     Borrower, NWP, TGPL and TGT, as Borrowers; the financial institutions party
     thereto, as "Banks" thereunder; JPMorgan Chase Bank (formerly known as The
     Chase Manhattan Bank) and Commerzbank AG, as Co-Syndication Agents; Credit
     Lyonnais New York Branch, as Documentation Agent; and Citibank, N.A. as
     Agent (as the same may from time to time be further amended, supplemented,
     restated or otherwise modified).

          "Natural Gas Act" shall mean the Natural Gas Act, 15
     U.S.C.ss.ss.717(a)-717(w).

          "Nebraska Energy" means Nebraska Energy, L.L.C., a Kansas limited
     liability company.

          "Net Cash Proceeds" means, with respect to any sale, transfer or other
     disposition of any asset or the sale or issuance of any equity interests
     (including, without limitation, any capital contribution) by any Person,
     the gross cash proceeds received (including any cash received by way of
     deferred payment pursuant to a promissory note, receivable or otherwise,
     but only as and when such cash is received) by or on behalf of such Person
     in connection with such transaction net of only (a) reasonable transaction
     costs, including customary and reasonable brokerage commissions,
     underwriting fees and discounts, legal fees, fees paid to accountants and
     financial advisors, finder's fees and other similar fees and commissions,
     (b) the amount of taxes payable in connection with or as a result of such
     transaction, (c) the amount of any Debt by the terms of the agreement or
     instrument governing such Debt (including, without limitation, the Barrett
     Loan Agreement and the WECI Note), that is required to be repaid or cash
     collateralized in the case of letters of


                                       16

<PAGE>

     credit, upon such disposition, including any premium, make-whole or
     breakage amount related thereto, (d) payments of unassumed liabilities
     relating to the assets sold at the time of, or within 60 days after, the
     date of such sale, and provided that such gross proceeds shall not include
     any portion of such gross cash proceeds which the Borrower determines in
     good faith should be reserved for post-closing adjustments (including
     indemnification payments, tax expenses and purchase price adjustments, to
     the extent the Person delivers to the Agent a certificate signed by an
     officer of such Person as to such determination), it being understood and
     agreed that on the day that all such post-closing adjustments have been
     determined (which shall not be later than 120 days following the date of
     the respective disposition; provided, further that such 120-day period
     shall be extended to the extent any amount of such proceeds is subject to a
     good faith dispute or claim), the amount (if any) by which the reserved
     amount in respect of such sale or disposition exceeds the actual
     post-closing adjustments payable by such Person shall constitute Net Cash
     Proceeds on such date received by such Person from such sale, lease,
     transfer or other disposition.

          "Net Worth" of any Person means, as of any date of determination, the
     excess of total assets of such Person plus all non-cash losses resulting
     from the write-down or disposition of the Trading Book over total
     liabilities of such Person, total assets and total liabilities each to be
     determined in accordance with generally accepted accounting principles;
     provided, however, that for purposes of calculating Net Worth, total
     liabilities shall not include any obligations of the Borrower in respect of
     the FELINE PACS.

          "NewGP" means a business entity organized under Delaware law, which
     may be formed before, on or after the date hereof, and which (i) will be at
     the time of formation a Wholly-Owned Subsidiary of the Borrower, and (ii)
     will be formed for the sole purpose of acquiring certain Equity Interests
     in MLP currently held by Williams GP, LLC and acting as the general partner
     of MLP.

          "Non-Recourse Debt" means (i) any Debt incurred by any Project
     Financing Subsidiary to finance the acquisition (other than the acquisition
     from the Borrower or any Subsidiary of the Borrower that is not a Project
     Financing Subsidiary), improvement, installation, design, engineering,
     construction, development, completion, maintenance or operation of, or
     otherwise to pay costs and expenses relating to or providing financing for,
     a project listed on Schedule VI or any new project commenced or acquired
     after July 31, 2002, which Debt does not provide for recourse against the
     Borrower or any Subsidiary of the Borrower (other than a Project Financing
     Subsidiary and such recourse as exists under a Performance Guaranty) or any
     property or asset of the Borrower or any Subsidiary of the Borrower (other
     than Equity Interests in, or the property or assets of, a Project Financing
     Subsidiary) and (ii) any refinancing of such Debt that does not increase
     the outstanding principal amount thereof at the time of the refinancing or
     increase the property subject to any Lien securing such Debt or otherwise
     add additional security or support for such Debt.

          "Notice of Letter of Credit" has the meaning specified in Section
     2.10(a).

          "NWP" means Northwest Pipeline Corporation, a Delaware corporation.


                                       17

<PAGE>

          "Obligations" means all Reimbursement Obligations and all other Debt,
     advances, debts, liabilities, obligations, indemnities, covenants and
     duties owing by the Borrower or any Guarantor to any Bank, the Agent, the
     Collateral Agent, the Collateral Trustee, the Surety Administrative Agent,
     any Issuing Bank, or any other Person required to be indemnified under any
     Credit Document, of any kind or nature, present or future, whether or not
     evidenced by any note, guaranty or other instrument, arising under or in
     connection with this Agreement or any other Credit Document or any of the
     transactions evidenced by this Agreement or any other Credit Document,
     whether or not for the payment of money, whether arising by reason of an
     extension of credit, loan, guaranty, indemnification or in any other
     manner, whether direct or indirect (including those acquired by
     assignment), absolute or contingent, due or to become due, now existing or
     hereafter arising and however acquired. The term "Obligations" includes all
     interest, charges, expenses, fees, attorneys' fees and disbursements and
     any other sum chargeable to the Borrower under this Agreement or any other
     Credit Document.

          "PBGC" means the Pension Benefit Guaranty Corporation.

          "Performance Guaranty" means any guaranty issued in connection with
     any Non-Recourse Debt that (i) if secured, is secured only by assets of or
     Equity Interests in a Project Financing Subsidiary, and (ii) guarantees to
     the provider of such Non-Recourse Debt or any other Person (a) performance
     of the improvement, installation, design, engineering, construction,
     acquisition, development, completion, maintenance or operation of, or
     otherwise affects any such act in respect of, all or any portion of the
     project that is financed by such Non-Recourse Debt, (b) completion of the
     minimum agreed equity contributions to the relevant Project Finance
     Subsidiary, or (c) performance by a Project Financing Subsidiary of
     obligations to Persons other than the provider of such Non-Recourse Debt.

          "Permitted Dispositions" means (a) the disposition of the assets or
     Persons set forth in Schedule XIV or the assets currently owned by such
     Persons and (b) the TWC Asset Dispositions.

          "Permitted Liens" means Liens specifically described on Schedule III.

          "Permitted Refinancing Debt" has the meaning assigned thereto on
     Schedule III.

          "Person" means an individual, partnership, corporation, limited
     liability company, business trust, joint stock company, trust,
     unincorporated association, joint venture or other Business Entity, or a
     government or any political subdivision or agency thereof.

          "PIGAP II" means WilPro Energy Services (PIGAP II) Limited, a Cayman
     Islands corporation.

          "Plan" means an employee pension benefit plan (other than a
     Multiemployer Plan) as defined in Section 3(2) of ERISA currently
     maintained by, or in the event such plan has terminated, to which
     contributions have been made or an obligation to make such contributions
     has accrued during any of the five plan years preceding the date of the
     termination of such plan by, the Borrower or any ERISA Affiliate of the
     Borrower for


                                       18

<PAGE>

     employees of the Borrower or any such ERISA Affiliate and covered by Title
     IV of ERISA or subject to the minimum funding standards under Section 412
     of the Code.

          "Pledge Agreement" means a Pledge Agreement executed by the Borrower
     and certain Guarantors in substantially the form of Exhibit I.

          "Plowshare Transaction" means the retirement of the Interests of the
     Class B Preferred Member in PPH (each as defined in the PPH Sponsor
     Agreement), held by Plowshare Investors LLC, a Delaware limited liability
     company, by PPH.

          "PPH Company Agreement" means the Amended and Restated Limited
     Liability Company Agreement of Piceance Production Holdings LLC, dated as
     of December 31, 2001, by and among Williams Production RMT Company, a
     Delaware corporation, Bison Royalty LLC, a Delaware limited liability
     company, Plowshare Investors LLC, a Delaware limited liability company, and
     Piceance Production Holdings LLC, a Delaware limited liability company.

          "PPH Sponsor Agreement" means the PPH Sponsor Agreement, dated as of
     December 31, 2001, by TWC in favor of Piceance Production Holdings LLC,
     Plowshare Investors LLC and the other indemnified parties named therein (as
     the same may from time to time be amended, modified or supplemented).

          "Prairie Wolf Facility" means the financing provided in connection
     with that certain $611,788,868 Joint Venture Sponsor Agreement dated as of
     December 28, 2000 (as amended, supplemented, amended and restated or
     otherwise modified from time to time, the "Sponsor Agreement"), among TWC,
     as Sponsor, and Williams Field Services Company, in favor of Prairie Wolf
     Investors, Arctic Fox Assets, L.L.C., Williams Energy (Canada), Inc. and
     the other Indemnified Persons (as defined in the Sponsor Agreement) listed
     therein.

          "Prairie Wolf Purchase Option Agreement" means the Purchase Option
     Agreement, dated as of December 28, 2000, among TWC, Prairie Wolf
     Investors, L.L.C., Citicorp North America, Inc., Ambac Private Holdings,
     L.L.C., Westboro Properties L.L.C., Stonehurst Capital L.L.C., BSCS XXXIX,
     Inc., Snow Goose Associates, L.L.C. and Arctic Fox Assets, L.L.C.

          "Prairie Wolf Transaction" means the purchase of the Investor
     Membership Interest (as defined in the Prairie Wolf Purchase Option
     Agreement) pursuant to the Prairie Wolf Purchase Option Agreement

          "Progeny Facilities" means the financing facilities specifically
     described on Schedule XI.

          "Project Financing Subsidiaries" means any non-material Subsidiary of
     the Borrower whose principal purpose is to incur Non-Recourse Debt and/or
     construct, lease, own or operate the assets financed thereby, or to become
     a direct or indirect partner, member or other equity participant or owner
     in a Business Entity created for such purpose, and substantially all the
     assets of which Subsidiary or Business Entity are


                                       19

<PAGE>

     limited to (x) those assets being financed (or to be financed), or the
     operation of which is being financed (or to be financed), in whole or in
     part by Non-Recourse Debt, or (y) Equity Interests in, or Debt or other
     obligations of, one or more other such Subsidiaries or Business Entities,
     or (z) Debt or other obligations of the Borrower or its Subsidiaries or
     other Persons. For purposes of this definition, a "non-material Subsidiary"
     shall mean any Consolidated Subsidiary of the Borrower which, as of the
     date of the most recent Consolidated balance sheet of the Borrower
     delivered pursuant to Section 4.1(e) or 5.1, has total assets which account
     for less than five percent (5%) of the total Consolidated assets of the
     Borrower and its Consolidated Subsidiaries, as shown on such Consolidated
     balance sheet; provided, that the aggregate assets of the non-material
     Subsidiaries shall not comprise more than ten percent (10%) of the total
     Consolidated assets of the Borrower and its Consolidated Subsidiaries, as
     shown on such Consolidated balance sheet.

          "Property" has the meaning specified in the definition of "assets".

          "Public Filings" means the Borrower's, NWP's, TGPL's and TGT's (i)
     annual report on Form 10-K/A for the year ended December 31, 2001, (ii)
     quarterly report on Form 10-Q for the quarter ended March 31, 2002, (iii)
     quarterly report on Form 10-Q for the quarter ended June 30, 2002 and (iv)
     each other quarterly and annual and other reports filed from time to time.

          "Purchase Card Agreement" means that certain Purchase Card Agreement
     among the Borrower and Citibank USA, N.A. dated January 29, 2002.

          "Rating Category" means, as to the Borrower, the relevant category
     applicable to the Borrower from time to time as set forth on Schedule V,
     which is based on the ratings (or lack thereof) of the Borrower's senior
     unsecured long-term debt by S&P or Moody's. In the event there is a split
     between the ratings of the Borrower's senior unsecured long-term debt by
     S&P and Moody, "Rating Category" shall be determined based on the lowest
     rating of the Borrower's senior unsecured long-term debt by S&P or Moody's.

          "Refined Hydrocarbons" means all products refined, separated,
     fractionated, settled, and dehydrated from Hydrocarbons and all products
     derived therefrom, including, without limitation, kerosene, liquefied
     petroleum gas, refined lubricating oils, diesel fuels, drip gasoline,
     natural gasoline, helium, sulfur and all other minerals.

          "Refineries" means the equity interest in and assets owned by the
     Midstream Business of the Borrower which produces Refined Hydrocarbons and
     is owned collectively by the following Subsidiaries: Williams Express,
     Inc., a Delaware corporation, Williams Alaska Pipeline Company, LLC, a
     Delaware limited liability company, Williams Alaska Petroleum, Inc., an
     Alaska corporation, Williams Alaska Air Cargo Properties, LLC, an Alaska
     limited liability company, Williams Lynx Alaska CargoPort, LLC, an Alaska
     limited liability company, Williams Express, Inc., an Alaska corporation,
     Williams Petroleum Pipeline Systems, Inc., a Delaware corporation, Williams
     Refining & Marketing, LLC, a Delaware limited liability company, Williams
     Olefins, LLC, a Delaware limited liability company, Williams Olefins
     Feedstock


                                       20

<PAGE>

     Pipelines, LLC, a Delaware limited liability company, Williams Memphis
     Terminal, Inc., a Delaware corporation, Williams Generating Memphis, LLC, a
     Delaware limited liability company, EMT (only with respect to its interest
     in a gas turbine, electric generating facility located in Memphis,
     Tennessee) and Memphis Generation, L.L.C., a Delaware limited liability
     company.

          "Reg U Limited Assets" means assets that are subject to any
     arrangement (as contemplated by Regulation U) with any Bank, the Agent, the
     Collateral Agent, the Collateral Trustee, or any Issuing Bank (i) that
     restricts the right or ability of the Borrower or its Subsidiaries to sell,
     pledge or otherwise dispose of (within the meaning of Regulation U) such
     assets or (ii) that provides that the exercise of such right is or may be
     cause for accelerating the maturity of all or any portion of any amount
     payable hereunder or under such arrangement.

          "Register" shall mean the books and accounts maintained by the Agent
     of the interests of each Bank under this Agreement and its Letter of Credit
     Interest, including records of transfers of any interests in this Agreement
     and the Letter of Credit Commitment of any Issuing Bank pursuant to Section
     9.6.

          "Reimbursement Obligations" means, at any time, the obligations of the
     Borrower then outstanding, or that may thereafter arise, in respect of all
     Letters of Credit then outstanding to reimburse amounts paid by any Issuing
     Bank in respect of any drawings under a Letter of Credit.

          "Related Party" of any Person means any corporation, partnership,
     joint venture or other entity of which more than 10% of the outstanding
     Equity Interests having ordinary voting power to elect a majority of the
     board of directors of such corporation, partnership, joint venture or other
     entity or others performing similar functions (irrespective of whether or
     not at the time Equity Interests of any other class or classes of such
     corporation, partnership, joint venture or other entity shall or might have
     voting power upon the occurrence of any contingency) is at the time
     directly or indirectly owned by such Person or which owns at the time
     directly or indirectly more than 10% of the Equity Interests having
     ordinary voting power to elect a majority of the board of directors of such
     Person or others performing similar functions (irrespective of whether or
     not at the time Equity Interests of any other class or classes of such
     corporation, partnership, joint venture or other entity shall or might have
     voting power upon the occurrence of any contingency); provided, however,
     that (i) neither the Borrower nor any Subsidiary of the Borrower shall be
     considered to be a Related Party of the Borrower or any Subsidiary of the
     Borrower and (ii) neither NewGP nor any Subsidiary of NewGP shall be
     considered to be a Related Party of NewGP or any Subsidiary of NewGP.

          "Restricted Midstream Subsidiaries" means Williams Mobile Bay Producer
     Services, L.L.C., Williams Field Services-Gulf Coast Company, L.P.,
     Williams Oil Gathering L.L.C., Gulf Liquids Holdings, L.L.C. and Gulf
     Liquids New River Project, LLC.

         "RMT" means Williams Production RMT Company.


                                       21

<PAGE>

          "RMT Asset Disposition" means the sale, transfer, lease, distribution
     or other disposition of the RMT Equity Interests or the assets of RMT LLC,
     RMT or its Subsidiaries in accordance with the provisions of the Barrett
     Loan Agreement.

          "RMT Equity Interests" means the Equity Interests in RMT and/or each
     of its Subsidiaries.

          "RMT LLC" means Williams Production Holdings LLC.

          "S&P" means Standard & Poor's Ratings Services, a division of The
     McGraw-Hill Companies, Inc., or its successor.

          "Sale Agreement" has the meaning specified in Section 5.1(e).

          "Sale and Lease-Back Transaction" of any Person means any arrangement
     entered into by such Person or any Subsidiary of such Person, directly or
     indirectly, whereby such Person or any Subsidiary of such Person shall sell
     or transfer any property, whether now owned or hereafter acquired to any
     other person (a "Transferee"), and whereby such Person or any Subsidiary of
     such Person shall then or thereafter rent or lease as lessee such property
     or any part thereof or rent or lease as lessee from such Transferee or any
     other Person other property which such Person or any Subsidiary of such
     Person intends to use for substantially the same purpose or purposes as the
     property sold or transferred.

          "Security Agreement" means a Security Agreement executed by the
     Borrower and certain of the Guarantors in substantially the form of Exhibit
     F.

          "Security Documents" means each Mortgage and Additional Mortgage, the
     Security Agreement, the Pledge Agreement, the Collateral Trust Agreement
     and the Guaranties.

          "Seminole" means Seminole Pipeline Company, a Delaware corporation.

          "Seminole Asset Disposition" means the sale, transfer or other
     distribution of the Equity Interests in or assets of Seminole and
     E-Oaktree, LLC.

          "Solvent" and "Solvency" mean, with respect to any Person on a
     particular date, that on such date (a) the fair value of the property of
     such Person is greater than the total amount of liabilities, including,
     without limitation, contingent liabilities, of such Person, (b) the present
     fair salable value of the assets of such Person is not less than the amount
     that will be required to pay the probable liability of such Person on its
     debts as they become absolute and matured, (c) such Person does not intend
     to, and does not believe that it will, incur debts or liabilities beyond
     such person's ability to pay such debts and liabilities as they mature and
     (d) such Person is not engaged in business or a transaction, and is not
     about to engage in business or a transaction, for which such Person's
     property would constitute an unreasonably small capital. The amount of
     contingent liabilities at any time shall be computed as the amount that, in
     the light of all the facts and circumstances existing at such time,
     represents the amount that can reasonably be expected to become an actual
     or matured liability.


                                       22

<PAGE>

          "SPC" has the meaning specified in Section 9.6(g).

          "Specified Escrow Arrangements" means (a) encumbrances arising under
     the Pledge and Assignment Agreement for the Purchase Card Agreement, dated
     as of January 29, 2002, as amended, supplemented, amended and restated or
     otherwise modified from time to time, whereby the Borrower has requested
     that the banks party thereto continue to issue credit under the Purchase
     Card Agreement; and (b) cash deposits at one or more financial institutions
     for the purpose of funding any potential shortfall in the daily net cash
     position of the Borrower or any of its Subsidiaries.

          "Stated Termination Date" means July 30, 2003, or such later date, if
     any as may be agreed to by the Borrower and the Banks pursuant to Section
     2.9.

          "Subordinated Debt" means any Debt of the Borrower which is
     effectively subordinated to the obligations of the Borrower hereunder.

          "Subject Subsidiaries" means all Subsidiaries of the Borrower other
     than NewGP and its Subsidiaries.

          "Subsidiary" of any Person means (i) any corporation, partnership,
     joint venture or other entity of which more than 50% of the outstanding
     Equity Interests having ordinary voting power to elect a majority of the
     board of directors of such corporation, partnership, joint venture or other
     entity or others performing similar functions (irrespective of whether or
     not at the time Equity Interests of any other class or classes of such
     corporation, partnership, joint venture or other entity shall or might have
     voting power upon the occurrence of any contingency) is at the time
     directly or indirectly owned by such Person, and (ii) any Person that is
     under the direct or indirect control of such Person, by voting rights,
     contract or otherwise, and in accordance with generally accepted accounting
     principles, is Consolidated with the Borrower in its Consolidated financial
     statements; provided that, for greater certainty, (x) MLP and its
     Subsidiaries (A) shall be considered Subsidiaries of NewGP, but (B) shall
     not otherwise be considered Subsidiaries of the Borrower, any Guarantor, or
     their respective Subsidiaries and (y) NewGP shall be considered a
     Subsidiary of the Borrower.

          "Surety Administrative Agent" means Citibank, N.A., in its capacity as
     surety administrative agent under the terms of the Midstream Guaranty and
     its successors or assigns appointed pursuant to Section 7(e) of the
     Midstream Guaranty.

          "Synthetic Lease" means any lease (including leases that may be
     terminated by the lessee at any time) of any property (whether real,
     personal or mixed) (i) that is not a capital lease in accordance with
     generally accepted accounting principles and (ii) in respect of which the
     lessee retains or obtains ownership of the property so leased for federal
     income tax purposes, other than any such lease under which such Person is
     the lessor.

          "Tangible Net Worth" of any Person means, as of any date of
     determination, the excess of total assets of such Person over total
     liabilities of such Person, total assets and total liabilities each to be
     determined in accordance with generally accepted accounting


                                       23

<PAGE>

     principles, excluding, however, from the determination of total assets (i)
     patents, patent applications, trademarks, copyrights and trade names, (ii)
     goodwill, organizational, experimental, research and development expense
     and other like intangibles, (iii) treasury stock, (iv) monies set apart and
     held in a sinking or other analogous fund established for the purchase,
     redemption or other retirement of capital stock or Subordinated Debt, and
     (v) unamortized debt discount and expense.

          "Termination Date" means the earlier of (i) the Stated Termination
     Date or (ii) the date of termination in whole of the Letter of Credit
     Commitments pursuant to Section 2.2, 2.8 or 6.1.

          "Termination Event" means (i) a "reportable event", as such term is
     described in Section 4043(c) of ERISA (other than a "reportable event" not
     subject to the provision for 30-day notice to the PBGC or a "reportable
     event" as such term is described in Section 4043(c)(3) of ERISA) which
     might reasonably be expected to result in a termination of, or the
     appointment of a trustee to administer, a Plan, or which causes the
     Borrower, due to actions of the PBGC, to be required to contribute at least
     $75,000,000 in excess of the contributions which otherwise would have been
     made to fund a Plan based upon the contributions recommended by such Plan's
     actuary), or (ii) the withdrawal of the Borrower or any ERISA Affiliate of
     the Borrower from a Multiple Employer Plan during a plan year in which it
     was a "substantial employer," as such term is defined in Section 4001(a)(2)
     of ERISA, or the incurrence of liability by the Borrower or any ERISA
     Affiliate of the Borrower under Section 4064 of ERISA upon the termination
     of a Plan or Multiple Employer Plan, or (iii) the distribution of a notice
     of intent to terminate a Plan pursuant to Section 4041(a)(2) of ERISA or
     the treatment of a Plan amendment as a termination under Section 4041 of
     ERISA, or (iv) the institution of proceedings to terminate a Plan by the
     PBGC under Section 4042 of ERISA, or (v) any other event or condition which
     might reasonably be expected to result in the termination of, or the
     appointment of, a trustee to administer, any Plan under Section 4042 of
     ERISA.

          "TGPL" means Transcontinental Gas Pipe Line Corporation, a Delaware
     corporation.

          "TGPL Bond Offering" means the $325,000,000, 8.875% Senior Notes
     issued on July 3, 2002, by TGPL.

          "TGT" means Texas Gas Transmission Corporation, a Delaware
     corporation.

          "Trading Book" means all mark to market daily and forward traded
     transactions inclusive of structured portfolio transactions consisting
     primarily of tolling and full requirements transactions.

          "Transfer Agreement" means an agreement executed pursuant to Section
     9.6 by an assignor Bank and assignee Bank substantially in the form of
     Exhibit D, which agreement shall be executed by the Borrower and the Agent
     to evidence the consent of each if such consent is required pursuant to the
     definition herein of "Eligible Assignee" or the terms of Section 9.6.


                                       24

<PAGE>

          "TWC" means The Williams Companies, Inc., a Delaware corporation.

          "TWC Asset Disposition" means the sale by TWC or by any of its
     Subsidiaries of (a) WPC, (b) the MAPL Asset Disposition, (c) the Seminole
     Asset Disposition, (d) the Refineries, (e) Williams Soda Products Company
     and American Soda, L.L.P, (f) Williams TravelCenters, Inc., (g) Williams
     Bio-Energy, LLC, (h) Williams Ethanol Services, Inc. and (i) Nebraska
     Energy, L.L.C.

          "TWC Preferred Stock" means the shares of preferred stock of TWC which
     may be mandatorily convertible into shares of common stock of TWC.

          "UBOC Turbine Financing" means the transaction contemplated by (a) the
     Turbine Financing and Agency Agreement, dated as of April 16, 2002, between
     Union Bank of California, N.A., each of the other financial institutions
     party thereto as a Lender or a Certificate Holder, WEMT Equipment Statutory
     Trust 2002 and EMT (the "TFA Agreement") and (b) the Operative Documents
     and the Lease (as such terms are defined in the TFA Agreement).

          "U.S. Dollar Equivalent" of any Canadian Dollar amount means, on any
     date of determination, the Dollar equivalent of such Canadian Dollar amount
     determined by the Agent by using the quoted spot rate at which Citibank's
     principal office in Toronto offers to exchange Dollars for Canadian Dollars
     in Toronto at 11:00 a.m. (New York City time) on such date, which
     determination shall be conclusive in the absence of manifest error, or if
     such principal office is not then quoting such a rate, then such rate as
     shown on page BOFC of the Reuters screen at such time on such date.

          "U.S. Dollar L/C Commitment" of any Issuing Bank means, at any time,
     the amount set opposite such Bank's name on Schedule IV under the heading
     "U.S. Dollar L/C Commitments" or as reflected for such Bank in the relevant
     Transfer Agreement to which it is a party, as such amount may be
     terminated, reduced or increased pursuant to Section 2.2, Section 2.8,
     Section 6.1 or Section 9.6(a).

          "U.S. Issuing Bank" means Citibank, N.A. and Bank of America N.A.,
     each in its capacity as issuers of Letters of Credit.

          "WCG" means Williams Communications Group, Inc., a Delaware
     corporation.

          "WCG Note Trust Bonds" means those certain debt securities issued by
     WCG Note Trust and WCG Note Corp. on March 28, 2001.

          "WCG Senior Notes Issuer" means, collectively, WCG Note Trust, a
     Delaware business trust, and WCG Note Corp., Inc., a Delaware corporation.

          "WCG Subsidiaries" means, collectively, WCG and any direct or indirect
     Subsidiary of WCG.

          "WCG Synthetic Lease" means that certain Amended and Restated Lease
     between State Street Bank and Trust Company of Connecticut, National
     Association, as


                                       25

<PAGE>

     Lessor and Williams Communications, Inc., as Lessee, dated as of September
     2, 1998, as amended, which has been terminated and was fully repaid on
     March 29, 2002.

          "WCG Unwind Transaction" means a transaction in which (i) the
     Borrower's and/or its Subsidiaries' Sale Leaseback transactions, dated as
     of September 13, 2001, with (x) WCG and its Subsidiary, Williams Technology
     Center, LLC ("WTC"), involving the Williams Technology Center, and (y) WCG
     and its Subsidiary, Williams Communications, LLC, involving corporate
     aircraft (collectively, the "WCG Sale Leaseback") are terminated, (ii) in
     exchange for such termination, the Borrower receives a promissory note or
     notes payable by the reorganized WCG, WTC and/or the other WCG
     Subsidiaries, individually or as co-makers, in an aggregate principal
     amount of $175,000,000 or less, and (iii) consideration from the Borrower
     and its Subsidiaries includes termination of the existing WCG Sale
     Leaseback and transfer of the Equity Interests in Williams Aircraft
     Leasing, LLC, but does not include any cash payment by the Borrower or any
     of its Subsidiaries to WCG or WTC.

          "WECI Note" means that certain promissory note, dated as of December
     28, 2000, issued by Williams Energy (Canada), Inc. in favor of the
     Registered Holders (as defined therein), as amended by Prairie Wolf
     Investors, L.L.C. Amendment No. 1, dated as of August 29, 2001, by
     Amendment No. 2 to Certain Prairie Wolf Operative Documents, dated as of
     March 28, 2002, and by Amendment No. 3 to Certain Operative Documents and
     Consents, dated as of October 31, 2002.

          "Wholly-Owned Subsidiary" of any Person means any Subsidiary of such
     Person all of the Equity Interests in which are owned by such Person and/or
     one or more other Wholly-Owned Subsidiaries of such Person.

          "WF Group" means Williams Field Services Group, Inc., a Delaware
     corporation.

          "WGPC" means Williams Gas Pipeline Company, LLC, a Delaware limited
     liability company.

          "Withdrawal Liability" shall have the meaning given such term under
     Part I of Subtitle E of Title IV of ERISA.

          "WPC" means Williams Gas Pipeline Central, Inc., a Delaware
     corporation.

          SECTION 1.2. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding."

          SECTION 1.3. Accounting Terms. All accounting terms not specifically
defined shall be construed in accordance with general accounting principles, and
each reference herein to "generally accepted accounting principles" shall mean
U.S. generally accepted accounting principles in effect, consistently applied.

          SECTION 1.4. Miscellaneous. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a


                                       26

<PAGE>

whole and not to any particular provision of this Agreement, and Article,
Section, Schedule and Exhibit references are to Articles and Sections of and
Schedules and Exhibits to this Agreement, unless otherwise specified. The term
"including" shall mean "including, without limitation,". References to any
document, instrument or agreement (a) shall include all exhibits, schedules and
other attachments thereto, (b) shall include all documents, instruments or
agreements issued or executed in replacement thereof and (c) shall mean such
document, instrument or agreement, or replacement or predecessor thereto, as
amended, modified and supplemented from time to time and in effect at any given
time so long as such amended, modified or supplemented document, instrument or
agreement does not violate the terms of this Agreement.

          SECTION 1.5. Ratings. A rating, whether public or private, by S&P or
Moody's shall be deemed to be in effect on the date of announcement or
publication by S&P or Moody's, as the case may be, of such rating or, in the
absence of such announcement or publication, on the effective date of such
rating and will remain in effect until the announcement or publication of, or in
the absence of such announcement or publication, the effective date of, any
change in, or withdrawal or termination of, such rating. In the event the
standards for any rating by Moody's or S&P are revised, or any such rating is
designated differently (such as by changing letter designations to different
letter designations or to numerical designations), the references herein to such
rating shall be deemed to refer to the revised or redesignated rating for which
the standards are closest to, but not lower than, the standards at the date
hereof for the rating which has been revised or redesignated, all as determined
by the Majority Banks in good faith. Long-term debt supported by a letter of
credit, guaranty, insurance or other similar credit enhancement mechanism shall
not be considered as senior unsecured long-term debt. If either Moody's or S&P
has at any time more than one rating applicable to senior unsecured long-term
debt of the Borrower, the lowest such rating shall be applicable for purposes
hereof. For example, if Moody's rates some senior unsecured long-term debt of
the Borrower Ba1 and other such debt of the Borrower Ba2, the senior unsecured
long-term debt of the Borrower shall be deemed to be rated Ba2 by Moody's.

                                   ARTICLE II
                   AMOUNTS AND TERMS OF THE LETTERS OF CREDIT

          SECTION 2.1. Fees.

          (a) Agent's Fees. The Borrower agrees to pay to the Agent, for its
sole account, such fees as may be separately agreed to in writing by the
Borrower and the Agent.

          (b) Letter of Credit Fees.

          (i) Issuing Banks. The Borrower agrees to pay to the Agent for the
     account of each Issuing Bank a fronting fee on the maximum possible amount
     of each Letter of Credit (for the stated duration thereof, and giving
     effect to any step up provision or other mechanism for increase that (1)
     occurs automatically or (2) that is unilaterally exercisable by the
     Borrower) issued by such Issuing Banks in an amount equal to 0.250% per
     annum. All amounts payable pursuant to this clause (i) in respect of any
     Letter of Credit shall be paid on the date such Letter of Credit is issued.


                                       27

<PAGE>


          (ii) Participating Banks. The Borrower agrees to pay to the Agent for
     the account of each Bank (in accordance with their respective LC
     Participation Percentage) a letter of credit fee (1) on the sum of the
     aggregate outstanding Letter of Credit Commitments of all Issuing Banks at
     the time of determination less the aggregate outstanding stated amount of
     the Letters of Credit issued by the Issuing Banks at such time in an amount
     equal to the Applicable LC Commitment Margin in effect from time to time
     per annum and (2) on the issued and outstanding stated amount of the
     Letters of Credit at the time of determination issued by the Issuing Banks
     in an amount equal to the Applicable Issued LC Margin in effect from time
     to time per annum (for the stated duration thereof, and giving effect to
     any step up provision or other mechanism for increase that (x) occurs
     automatically or (y) is unilaterally exercisable by the Borrower). All
     amounts payable pursuant to this clause (ii) shall be paid in arrears on
     the last day of each March, June, September and December and on the
     Termination Date.

     The letter of credit fees referred to in this Section 2.1(b) not paid on
     the date due shall accrue interest until such letter of credit fees are
     paid in full, due and payable on demand, at a per annum rate equal at all
     times to the sum of Base Rate plus 6.5% per annum.

          SECTION 2.2. Reduction of the Commitments. The Borrower shall have the
right, upon at least five Business Days notice to the Agent, to terminate in
whole or reduce ratably in part the unused portions of the respective Letter of
Credit Commitments; provided that each partial reduction shall be in the
aggregate amount of at least $10,000,000; and provided further that the
aggregate amount of the Letter of Credit Commitments shall not be reduced to an
amount which is less than the aggregate amount of all Letter of Credit
Liabilities.

          SECTION 2.3. Prepayments.

          (a) The Borrower may, upon notice to the Agent before 10:00 A.M. (New
York City time) on the date of prepayment stating the proposed date (which shall
be a Business Day) and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, Cash Collateralize the outstanding Letter of
Credit Liabilities in whole or in part, together with accrued interest and fees
to the date of such Cash Collateralization on the Cash Collateralized Letter of
Credit Liabilities; provided, however, that each partial Cash Collateralization
pursuant to this Section 2.3(a) shall be in an aggregate principal amount not
less than the lesser of (1) $5,000,000 and (2) the aggregate outstanding Letter
of Credit Liabilities at the time of such Cash Collateralization.

          (b) By no later than five Business Days from the date of receipt by
the Borrower or any of its Subject Subsidiaries of any Net Cash Proceeds from
(i) any asset disposition (other than the MAPL Asset Disposition, the Seminole
Asset Disposition, dispositions permitted in Section 5.2(e)(i) and (iii) and any
disposition of Collateral (other than the Refineries in Alaska and Memphis and
the assets related thereto)), (ii) an issuance of TWC Preferred Stock, (iii) any
disposition of Collateral permitted pursuant to Section 5.2(e) (other than the
Refineries in Alaska and Memphis and the assets related thereto and any
disposition permitted in Section 5.2(e)(i) and (iii)), or (iv) any issuance of
Equity Interests by the Borrower (other than TWC Preferred Stock), the Borrower
shall apply such Net Cash Proceeds as follows:


                                       28

<PAGE>

          (A) So long as the aggregate Commitments (as defined in the Multiyear
     Williams Credit Agreement each time used in this Section 2.3(b)) of the
     lenders to TWC under the Multiyear Williams Credit Agreement are greater
     than $400,000,000:

               (1) in the case of any such Net Cash Proceeds arising from any
          disposition referred to in clause (i) above which consists of the
          Refinery in Alaska owned by certain Subsidiaries and the assets
          related thereto, 50% of such Net Cash Proceeds shall be applied on a
          pro-rata basis to the permanent ratable reduction of the respective
          Commitments of the lenders to TWC under the Multiyear Williams Credit
          Agreement;

               (2) in the case of any such Net Cash Proceeds arising from any
          asset disposition referred to in clause (i) above and not otherwise
          applied pursuant to sub-clause (1) above (including any disposition of
          the Refinery in Memphis, Tennessee owned by certain Subsidiaries and
          the assets related thereto), 50% of such Net Cash Proceeds shall be
          applied on a pro-rata basis, without duplication, to the permanent
          ratable (x) reduction of the respective Commitments of the lenders to
          TWC under the Multiyear Williams Credit Agreement, (y) reduction of
          the outstanding amounts of the Progeny Facilities (excluding the
          Prairie Wolf Facility) and (z) cash collateralization of the Legacy
          L/Cs;

               (3) in the case of any such Net Cash Proceeds arising from an
          issuance of TWC Preferred Stock referred to in clause (ii) above, 100%
          of such Net Cash Proceeds shall be applied on a pro-rata basis,
          without duplication, to the permanent ratable (x) reduction of the
          respective Commitments of the lenders to TWC under the Multiyear
          Williams Credit Agreement, (y) reduction of the outstanding amounts of
          the Progeny Facilities (excluding the Prairie Wolf Facility) and (z)
          cash collateralization of the Legacy L/Cs;

               (4) in the case of any such Net Cash Proceeds arising from any
          disposition of Collateral referred to in clause (iii) above, 50% of
          such Net Cash Proceeds shall be applied on a pro-rata basis, without
          duplication, to the permanent ratable (x) reduction of the respective
          Commitments of the lenders to TWC under the Multiyear Williams Credit
          Agreement and (y) Cash Collateralization of the Letter of Credit
          Commitments; and

               (5) in the case of any such Net Cash Proceeds arising from any
          issuance of Equity Interests referred to in clause (iv) above, 50% of
          such Net Cash Proceeds shall be applied on a pro-rata basis, without
          duplication, to the permanent ratable (w) reduction of the respective
          Commitments of the lenders to TWC under the Multiyear Williams Credit
          Agreement, (x) Cash Collateralization of the Letter of Credit
          Commitments, (y) reduction of the outstanding amounts of the Progeny
          Facilities (excluding the Prairie Wolf Facility) and (z) cash
          collateralization of the Legacy L/Cs;

          (B) From such time that the aggregate Commitments of the lenders to
     TWC under the Multiyear Williams Credit Agreement are equal to or less than
     $400,000,000:


                                       29

<PAGE>

               (1) 50% of any Net Cash Proceeds arising from an asset
          disposition referred to in clause (A)(1) or (A)(4) above shall be
          applied, first, to fully Cash Collateralize the Letter of Credit
          Commitments, second, upon the Letter of Credit Commitments being fully
          Cash Collateralized, to a pro-rata and permanent ratable (without
          duplication) (x) reduction of the outstanding amounts of the Progeny
          Facilities (excluding the Prairie Wolf Facility) and (y) cash
          collateralization of the Legacy L/Cs, and third, upon the full Cash
          Collateralization of the Letter of Credit Commitments, the reduction
          of the outstanding amounts of the Progeny Facilities (excluding the
          Prairie Wolf Facility) to zero, and the full cash collateralization of
          the Legacy L/Cs, to a pro-rata and permanent reduction of the
          respective Commitments of the lenders under the Multiyear Williams
          Credit Agreement;

               (2) 50% of any Net Cash Proceeds arising from an asset
          disposition referred to in clause (A)(2) above shall be applied,
          first, on a pro-rata basis, without duplication, to the permanent
          ratable (x) reduction of the outstanding amounts of the Progeny
          Facilities (excluding the Prairie Wolf Facility) and (y) cash
          collateralization of the Legacy L/Cs and, second, upon the reduction
          of the outstanding amounts of the Progeny Facilities (excluding the
          Prairie Wolf Facility) to zero and the full cash collateralization of
          the Legacy L/Cs, to a pro-rata and permanent reduction of the
          respective Commitments of the lenders under the Multiyear Williams
          Credit Agreement;

               (3) 100% of any Net Cash Proceeds arising from an issuance of TWC
          Preferred Stock referred to in clause (A)(3) above shall be applied,
          first, on a pro-rata basis, without duplication, to the permanent
          ratable (x) reduction of the outstanding amounts of the Progeny
          Facilities (excluding the Prairie Wolf Facility) and (y) cash
          collateralization of the Legacy L/Cs and, second, upon the reduction
          of the outstanding amounts of the Progeny Facilities (excluding the
          Prairie Wolf Facility) to zero and the full cash collateralization of
          the Legacy L/Cs, to a pro-rata and permanent reduction of the
          respective Commitments of the lenders under the Multiyear Williams
          Credit Agreement; and

               (4) 50% of any Net Cash Proceeds arising from an issuance of
          Equity Interests referred to in clause (A)(5) above shall be applied,
          first, on a pro-rata basis, without duplication, to the permanent
          ratable (x) Cash Collateralization of the Letter of Credit
          Commitments, (x) reduction of the outstanding amounts of the Progeny
          Facilities (excluding the Prairie Wolf Facility) and (y) cash
          collateralization of the Legacy L/Cs, and second, upon the full Cash
          Collateralization of the Letter of Credit Commitments, the reduction
          of the outstanding amounts of the Progeny Facilities (excluding the
          Prairie Wolf Facility) to zero, and the full cash collateralization of
          the Legacy L/Cs, to a pro-rata and permanent reduction of the
          respective Commitments of the lenders under the Multiyear Williams
          Credit Agreement;

provided that no such mandatory (w) reduction of the Commitments of the lenders
under the Multiyear Williams Credit Agreement, (x) reduction of the outstanding
amounts of the Progeny


                                       30

<PAGE>

Facilities (excluding the Prairie Wolf Facility), (y) cash collateralization of
the Legacy L/Cs, or (z) Cash Collateralization of the Letter of Credit
Commitments shall be required pursuant to this Section 2.3(b) until the earlier
of (A) such time as the aggregate amount of Net Cash Proceeds from such asset
dispositions and equity issuances that have not previously been applied to a
mandatory reduction of the Commitments shall exceed $50,000,000 and (B) the end
of the Fiscal Quarter in which such Net Cash Proceeds are received by the
Borrower or any of its Subject Subsidiaries.

          (c) All amounts received by the Agent from either the Collateral Agent
or the Collateral Trustee pursuant to any Security Document shall be applied
first, to reimburse the Collateral Agent for all costs and expenses incurred by
the Collateral Agent in connection with, and other amounts expended by the
Collateral Agent for which the Collateral Agent is entitled to reimbursement
under, any Credit Document, and second, as set forth in Section 6.2.

          (d) In the event that on any Business Day the aggregate amount of all
Letter of Credit Liabilities exceeds the aggregate Letter of Credit Commitments
(the amount of such excess herein referred to as the "Excess Exposure"), the
Borrower will deliver to the Agent, at its address specified in Section 9.2, on
the next Business Day, for deposit into an LC Cash Collateral Account, an amount
at least equal to such Excess Exposure.

          (e) In the event that the U.S. Dollar Equivalent of the outstanding
amount of all Canadian Letters of Credit exceeds $50,000,000 for any period of
three consecutive Business Days (the amount of such excess at the close of
business on the third Business Day of such period herein referred to as the
"Additional Excess Exposure"), TWC shall deliver to the Agent, at its address
specified in Section 9.2, on the next Business Day following such three
consecutive Business Day period for deposit into the LC Cash Collateral Account,
an amount in Dollars equal to the Additional Excess Exposure.

          SECTION 2.4. Increased Costs.

          (a) If any Bank or Issuing Bank determines that compliance with any
law or regulation or any guideline or request from any central bank or other
governmental or monetary authority (whether or not having the force of law)
affects or would affect the amount of capital required or expected to be
maintained by such Bank or Issuing Bank, as the case may be, or any corporation
controlling such Bank or Issuing Bank, as the case may be, and that the amount
of such capital is increased by or based upon the existence of such Bank's or
such Issuing Bank's, as the case may be, commitment to issue Letters of Credit
or purchase participations in Letters of Credit and other commitments of this
type, then, upon demand by such Bank or Issuing Bank, as the case may be (with a
copy of such demand to the Agent), the Borrower shall immediately pay to the
Agent for the account of such Bank or Issuing Bank, as the case may be, from
time to time as specified by such Bank or Issuing Bank, as the case may be,
additional amounts sufficient to compensate such Bank or Issuing Bank, as the
case may be, or such corporation in the light of such circumstances, to the
extent that such Bank or Issuing Bank, as the case may be, reasonably determines
such increase in capital to be allocable to the existence of such Bank's or such
Issuing Bank's, as the case may be, commitment to issue Letters of Credit or
purchase participations in Letters of Credit hereunder. A certificate as to the
amount of such additional amounts, submitted to the Borrower and the Agent by
such Bank or Issuing Bank, as the case


                                       31

<PAGE>

may be, shall be prima facie evidence of the amount of such additional amounts.
No Bank or Issuing Bank shall have any right to recover any additional amounts
under this Section 2.4(a) for any period more than 90 days prior to the date
such Bank or Issuing Bank, as the case may be, notifies the Borrower of any such
compliance.

          (b) In the event that any Bank makes a demand for payment under
Section 2.6 or this Section 2.4, the Borrower may within ninety (90) days of
such demand, if no Default or Event of Default then exists, replace such Bank
with another commercial bank in accordance with all of the provisions of the
second and third sentences of Section 9.6(a), and clauses (b) and (d) of Section
9.6 (including execution of an appropriate Transfer Agreement); provided that
(i) all obligations of such Bank to purchase participations in Letters of Credit
shall be terminated and the Letter of Credit Interests held by such Bank and all
other obligations owed to such Bank hereunder shall be purchased in full without
recourse at par plus accrued interest at or prior to such replacement, (ii) such
replacement bank shall be an Eligible Assignee, (iii) such replacement bank
shall, from and after such replacement, be deemed for all purposes to be a
"Bank" hereunder with Letter of Credit Liabilities in the amount of the Letter
of Credit Liabilities of such Bank immediately prior to such replacement (plus,
if such replacement bank is already a Bank prior to such replacement the
respective Letter of Credit Liabilities of such Bank prior to such replacement),
as such amount may be changed from time to time pursuant hereto, and shall have
all of the rights, duties and obligations hereunder of the Bank being replaced,
including obligations under Section 2.10, and (iv) such other actions shall be
taken by the Borrower, such Bank and such replacement bank as may be appropriate
to effect the replacement of such Bank with such replacement bank on terms such
that such replacement bank has all of the rights, duties and obligations
hereunder as such Bank (including specification of the information contemplated
by Schedule I as to such replacement bank).

          (c) Before making any demand under this Section 2.4, each Bank agrees
to use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of, such
increased cost and would not, in the reasonable judgment of such Bank, be
otherwise disadvantageous to such Bank.

          SECTION 2.5. Payments and Computations.

          (a) The Borrower shall make each payment hereunder to be made by it
not later than 11:00 A.M. (New York City time) on the day when due (i) in the
case of any payment in respect of Canadian Letters of Credit, in Canadian
Dollars to the Canadian Issuing Bank at its Toronto address referred to in
Section 9.2 and (ii) in the case of all other payments, in Dollars to the Agent
at its New York address referred to in Section 9.2, in each case in same day
funds, without deduction, counterclaim or offset of any kind. The Agent or
Canadian Issuing Bank, as the case may be, will promptly thereafter cause to be
distributed like funds relating to the payment of principal, interest or letter
of credit fees to the Banks for the account of their respective Lending Offices,
and like funds relating to the payment of any other amount payable to any Bank
to such Bank for the account of its Lending Office, in each case to be applied
in accordance with the terms of this Agreement. The Agent will promptly pay to
the Collateral Agent like funds relating to the payment of any amount payable to
the Collateral Agent. In no event shall any Bank be entitled to share any fee
paid to the Agent pursuant to Section 2.1(a),


                                       32

<PAGE>

any other fee paid to the Agent, as such, or any fronting fee paid to an Issuing
Bank pursuant to Section 2.1(b).

          (b) [Intentionally Omitted.]

          (c) (i) All computations of interest based on clause (a) or clause (b)
of the definition herein of "Base Rate" shall be made by the Agent on the basis
of a year of 365 or 366 days, as the case may be, and (ii) all computations of
interest based on the Federal Funds Rate or clause (c) of the definition herein
of Base Rate shall be made by the Agent, and all computations of letter of
credit fees shall be made by the Issuing Bank that issued the relevant Letter of
Credit, on the basis of a year of 360 days, in each case for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest or letter of credit fees are payable. Each
determination by the Agent of an interest rate or fee hereunder shall be
conclusive and binding for all purposes, absent manifest error.

          (d) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or letter of credit fee, as the case may be.

          (e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due by the Borrower to any Bank
hereunder that the Borrower will not make such payment in full, the Agent may
assume that the Borrower has made such payment in full to the Agent on such date
and the Agent may, in reliance upon such assumption, cause to be distributed to
each Bank on such due date an amount equal to the amount then due such Bank
hereunder. If and to the extent the Borrower shall not have so made such payment
in full to the Agent, each Bank shall repay to the Agent forthwith on demand
such amount distributed to such Bank together with interest thereon, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent, at the Federal Funds Rate.

          SECTION 2.6. Taxes.

          (a) Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.5, free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings with respect thereto, and all liabilities with respect thereto,
excluding in the case of each Bank and the Agent, (i) taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the laws of
which such Bank or the Agent (as the case may be) is organized or any political
subdivision thereof and (ii) taxes imposed as a result of a present or former
connection between such Bank or the Agent, as the case may be, and the
jurisdiction imposing such tax or any political subdivision thereof and, in the
case of each Bank, taxes imposed on its income, and franchise taxes imposed on
it, by the jurisdiction of such Bank's Lending Office or any political
subdivision thereof, other than any such connection arising solely from the Bank
or Agent having executed or delivered, or performed its obligations or received
a payment under, or taken any other action related to this Agreement (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any


                                       33

<PAGE>

Bank or the Agent, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.6) such Bank or the Agent, as the
case may be, receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.

          (b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made by the Borrower hereunder or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement (hereinafter referred to as "Other Taxes").

          (c) The Borrower will indemnify each Bank, each Issuing Bank and the
Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section 2.6)
owed and paid by such Bank, such Issuing Bank or the Agent, as the case may be,
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Bank, such Issuing Bank or the Agent, as the case may be, makes
written demand therefor; provided that the Borrower shall have no liability
pursuant to this clause (c) of this Section 2.6 to indemnify a Bank, an Issuing
Bank or the Agent for Taxes or Other Taxes which were paid by such Bank, such
Issuing Bank or the Agent, as the case may be, more than ninety days prior to
such written demand for indemnification.

          (d) In the event that a Bank, an Issuing Bank or the Agent receives a
written communication from any governmental authority with respect to an
assessment or proposed assessment of any Taxes, such Bank, such Issuing Bank or
Agent, as the case may be, shall promptly notify the Borrower in writing and
provide the Borrower with a copy of such communication. The Agent's, an Issuing
Bank's or a Bank's failure to provide a copy of such communication to the
Borrower shall not relieve the Borrower of any of its obligations hereunder.

          (e) Within 30 days after the date of the payment of Taxes by or at the
direction of the Borrower, the Borrower will furnish to the Agent, at its
address referred to in Section 9.2, the original or a certified copy of a
receipt evidencing payment thereof. Should any Bank, any Issuing Bank or the
Agent ever receive any refund, credit or deduction from any taxing authority to
which such Bank, such Issuing Bank or the Agent, as the case may be, would not
be entitled but for the payment by the Borrower of Taxes as required by this
Section 2.6 (it being understood that the decision as to whether or not to
claim, and if claimed, as to the amount of any such refund, credit or deduction
shall be made by such Bank, such Issuing Bank or the Agent, as the case may be,
in its reasonable judgment), such Bank, such Issuing Bank or the Agent, as the
case may be, thereupon shall repay to the Borrower an amount with respect to
such refund, credit or deduction equal to any net reduction in taxes actually
obtained by such Bank, such Issuing Bank or the Agent, as the case may be, and
determined by such Bank, such Issuing Bank or the Agent, as the case may be, to
be attributable to such refund, credit or deduction.


                                       34

<PAGE>

          (f) Each Bank organized under the laws of a jurisdiction outside the
United States shall on or prior to the date of its execution and delivery of
this Agreement in the case of each Bank which is a party to this Agreement on
the date this Agreement becomes effective and on the date the Transfer Agreement
pursuant to which it becomes a Bank is first effective in the case of each other
Bank, and from time to time thereafter as necessary or appropriate (but only so
long thereafter as such Bank remains lawfully able to do so), provide each of
the Agent and the Borrower with two original Internal Revenue Service Forms
W-8BEN or W-8ECI (or, in the case of a Bank that has provided a certificate to
the Agent that it is not (i) a "bank" as defined in Section 881(c)(3)(A) of the
Internal Revenue Code, (ii) a ten-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower or (iii) a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Internal Revenue Code), Internal Revenue Service Form
W-8BEN), or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Bank is exempt from or entitled to a reduced rate
of United States withholding tax on payments pursuant to this Agreement or any
other Credit Document or, in the case of a Bank that has certified that it is
not a "bank" as described above, certifying that such Bank is a foreign
corporation. If the forms provided by a Bank at the time such Bank first becomes
a party to this Agreement indicate a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Bank provides the appropriate forms certifying
that a lesser rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes for periods governed by such forms.

          (g) For any period with respect to which a Bank has failed to provide
the Borrower with the appropriate form, certificate or other document described
in subsection (f) of this Section 2.6 (other than if such failure is due to a
change in the applicable law, or in the interpretation or application thereof,
occurring after the date on which a form, certificate or other document
originally was required to be provided) such Bank shall not be entitled to
indemnification under subsection (a) or (c) of this Section 2.6 with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Bank become subject to Taxes because of its failure to deliver a
form, certificate or other document required hereunder, the Borrower shall take
such steps as such Bank shall reasonably request to assist such Bank in
recovering such Taxes.

          (h) Any Bank claiming any additional amounts payable pursuant to this
Section 2.6 agrees to use reasonable efforts to change the jurisdiction of its
Lending Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that may thereafter accrue and
would not, in the reasonable judgment of such Bank, be otherwise materially
disadvantageous to such Bank.

          (i) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.6 shall survive the payment in full of principal and interest
hereunder and the Termination Date.

          (j) Notwithstanding any provision of this Agreement to the contrary,
this Section 2.6 shall be the sole provision governing indemnities and claims
for taxes under this Agreement.


                                       35

<PAGE>


          SECTION 2.7. Sharing of Payments, Etc. If any Bank shall obtain any
payment (whether voluntary or involuntary, or through the exercise of any right
of set-off or otherwise) on account of its Letter of Credit Interest (other than
pursuant to Section 2.6 or 9.4(b)) in excess of its ratable share of payments on
account of all Letter of Credit Interests obtained by all the Banks, such Bank
shall forthwith purchase from the other Banks such participations in the Letter
of Credit Interests of such other Banks as shall be necessary to cause such
purchasing Bank to share the excess payment ratably with each of them, provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Bank, such purchase from each Bank shall be
rescinded and such Bank shall repay to the purchasing Bank the purchase price to
the extent of such Bank's ratable share (according to the proportion of (i) the
amount of the participation purchased from such Bank as a result of such excess
payment to (ii) the total amount of such excess payment) of such recovery
together with an amount equal to such Bank's ratable share (according to the
proportion of (i) the amount of such Bank's required repayment to (ii) the total
amount so recovered from the purchasing Bank) of any interest or other amount
paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees that any Bank so purchasing a participation from
another Bank pursuant to this Section 2.7 may, to the fullest extent permitted
by law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank were the direct creditor
of the Borrower in the amount of such participation.

          SECTION 2.8. Optional Termination. Notwithstanding anything to the
contrary in this Agreement, if (i) any Person (other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Borrower or
of any Subsidiary of the Borrower) or two or more Persons acting in concert
(other than any group of employees of the Borrower or of any of its
Subsidiaries) shall have acquired beneficial ownership (within the meaning of
Rule l3d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934), directly or indirectly, of securities of the Borrower (or
other securities convertible into such securities) representing 35% 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, 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 elected or nominated by individuals who at the beginning of
such period were such directors or by individuals elected in accordance with
this clause (ii) shall cease for any reason (other than as a result of death,
incapacity or normal retirement) to constitute a majority of the board of
directors of the Borrower, or (iii) any Person (other than the Borrower or a
Wholly-Owned Subsidiary of the Borrower) or two or more Persons acting in
concert shall have acquired by contract or otherwise, or shall have entered into
a merger or purchase agreement with the Borrower pursuant to which such Person
or Persons shall have acquired the power to exercise, directly or indirectly, a
controlling influence over the management or policies of the Borrower; then the
Agent shall at the request, or may with the consent, of the Majority Banks, by
notice to the Borrower, declare all of the obligations of the Banks with respect
to any Letter of Credit issued after the date of such termination and the
obligation of each Issuing Bank to issue Letters of Credit to be terminated,
whereupon all of the Letter of Credit Commitments and each such obligation of
the Banks (including the obligation to issue or participate in any new Letter
of Credit issued after such termination, but specifically excluding the
obligation of each Bank to participate in Letters

                                       36

<PAGE>


of Credit outstanding at the time of such termination) shall forthwith
terminate, and the Borrower shall not have any further right to obtain Letters
of Credit hereunder.

          SECTION 2.9. Extension of Termination Date. By notice given to the
Agent and the Banks, at least thirty days but not more than forty-five days
before the Stated Termination Date then in effect, the Borrower may request the
Banks to extend the Stated Termination Date for an additional period to a date
which is 364 days after the then current Stated Termination Date. Within thirty
days after receipt of such request, each Bank that agrees, in its sole and
absolute discretion, to so extend the Stated Termination Date shall notify the
Borrower and the Agent in writing that it so agrees, and if all Banks so agree
the Stated Termination Date shall be so extended.

          SECTION 2.10. Letter of Credit Facility. Subject to the terms and
conditions of this Agreement, the Letter of Credit Commitments may be utilized,
upon the request of the Borrower, by the issuance by any Issuing Bank (such
issuance, and any funding of a draw thereunder, to be made by the Issuing Banks
in reliance on the agreements of the other Banks in this Section) of standby
letters of credit (collectively, the "Letters of Credit", and each a "Letter of
Credit") for the account of the Borrower or any of its Subsidiaries; provided
that in no event shall (i) the aggregate amount of all Letter of Credit
Liabilities exceed the aggregate Letter of Credit Commitments, (ii) at the time
of issuance, the U.S. Dollar Equivalent of the outstanding amount of all
Canadian Letters of Credit exceed $50,000,000, (iii) the aggregate amount of all
Letters of Credit issued by any Issuing Bank exceed the Letter of Credit
Commitment of such Issuing Bank, (v) the aggregate amount of all Letters of
Credit issued by the Issuing Banks hereunder exceed the aggregate U.S. Dollar
L/C Commitment, (v) the expiration date of any Letter of Credit extend beyond
the date that is ten Business Days prior to the Stated Termination Date then in
effect, (vi) any Canadian Letter of Credit be payable in any currency other than
Canadian Dollars, (vii) any U.S. Letter of Credit be payable in any currency
other than Dollars or (viii) any Letter of Credit be payable in more than one
currency. The following additional provisions shall apply to Letters of Credit:

          (a) Notice of Issuance. The Borrower shall give the Agent and the
     Issuing Bank from which it is requesting a Letter of Credit at least three
     Business Days' (or such shorter period as agreed to by the Agent and such
     Issuing Bank) prior notice, in the form of Exhibit E (a "Notice of Letter
     of Credit"), specifying the Business Day such Letter of Credit is to be
     issued and the account party or parties therefor and describing in
     reasonable detail the proposed terms of such Letter of Credit (including
     the beneficiary thereof) and the nature of the transactions or obligations
     proposed to be supported thereby; provided that (i) Canadian Letters of
     Credit shall be issued only by the Canadian Issuing Bank and (ii) the
     Canadian Issuing Bank shall not be required to issue any Letter of Credit
     other than Canadian Letters of Credit.

          (b) Participations in Letters of Credit. On each day during the period
     commencing with the issuance by any Issuing Bank of any Letter of Credit
     and until such Letter of Credit shall have expired or been terminated, the
     Letter of Credit Commitment of each Issuing Bank shall be deemed to be
     utilized for all purposes of this Agreement in an amount equal to the
     stated amount of such Letter of Credit. Each Bank agrees that, upon the
     issuance of any Letter of Credit hereunder by any Issuing Bank, it shall


                                       37

<PAGE>

     automatically acquire a participation in such Issuing Bank's liability
     under such Letter of Credit in an amount equal to such Bank's LC
     Participation Percentage of such liability, and each Bank thereby shall
     absolutely, unconditionally and irrevocably assume, as primary obligor and
     not as surety, and shall be unconditionally obligated to such Issuing Bank
     to the extent provided in this Section 2.10.

          (c) Reimbursement Obligations; Notice of Drawings. Upon receipt from
     the beneficiary of any Letter of Credit of any demand for payment under
     such Letter of Credit, the Issuing Bank that issued such Letter of Credit
     shall promptly notify the Borrower (through the Agent) of the amount to be
     paid by such Issuing Bank as a result of such demand and the date on which
     payment is to be made by such Issuing Bank to such beneficiary in respect
     of such demand, which shall be (unless same day payment is required by the
     terms of such Letter of Credit pursuant to a request of the Borrower) at
     least one Business Day after the date on which the Agent shall deliver such
     notice to the Borrower pursuant to this sentence. Notwithstanding the
     identity of the account party of any Letter of Credit, the Borrower hereby
     unconditionally agrees to pay and reimburse the Agent for the account of
     the Issuing Bank that issued a Letter of Credit for the amount of each
     demand for payment under such Letter of Credit that is in substantial
     compliance with the provisions of such Letter of Credit at or prior to the
     date on which payment is to be made by such Issuing Bank to the beneficiary
     thereunder, without presentment, demand, protest or other formalities of
     any kind, together with interest thereon at a rate per annum equal to the
     Base Rate plus 6.5% per annum for the period from the date of such demand
     until the date of such reimbursement. The Borrower's obligations to
     reimburse each Issuing Bank as provided herein shall be absolute,
     unconditional and irrevocable under all circumstances whatsoever, including
     the following circumstances: (i) any lack of validity of this Agreement,
     the other Credit Documents or the other documents to be delivered under
     this Agreement; (ii) the existence of any claim, set-off, defense or other
     right that the Borrower may have at any time against the Agent, any Bank,
     any Issuing Bank or any other Person, whether in connection with the
     transactions contemplated by this Agreement or any unrelated transaction;
     (iii) any action or inaction taken or suffered by any Issuing Bank under a
     Letter of Credit if taken in good faith and in conformity with applicable
     law; (iv) the payment by any Issuing Bank under a Letter of Credit against
     presentation of a demand, statement or other document which in the sole
     discretion of such Issuing Bank substantially complies with the terms of
     such Letter of Credit, including any demand, statement or other document
     which is forged, fraudulent, invalid or inaccurate in any respect; (v) any
     exchange, release or non-perfection of any collateral for, or any release
     or amendment or waiver of or consent to departure from any guarantee of,
     all or any of the Obligations of the Borrower in respect of any Letter of
     Credit; and (vi) any determination of invalidity or unenforceability with
     respect to any Letter of Credit after payment by an Issuing Bank
     thereunder.

          (d) Payments by Banks to Issuing Banks. To the extent that the
     Borrower fails to make any payment to an Issuing Bank that the Borrower is
     required to make pursuant to Section 2.10(c), each Bank (other than such
     Issuing Bank) shall pay to the Agent, for the account of such Issuing Bank
     in Dollars (or, in the case of Canadian Letters of Credit, in Canadian
     Dollars) and in immediately available funds, the amount of


                                       38

<PAGE>

     such Bank's LC Participation Percentage of any payment under a Letter of
     Credit upon notice by such Issuing Bank (through the Agent) to such Bank
     requesting such payment and specifying such amount. Each such Bank's
     obligation to make such payment to the Agent for the account of such
     Issuing Bank under this Section 2.10(d), and such Issuing Bank's right to
     receive the same, shall be absolute and unconditional and shall not be
     affected by any circumstance whatsoever other than the gross negligence or
     willful misconduct of such Issuing Bank in making payment under such Letter
     of Credit, including the failure of any other Bank to make its payment
     under this Section 2.10(d), the financial condition of the Borrower (or any
     account party in respect of such Letter of Credit), the existence of any
     Event of Default or the termination of the Letter of Credit Commitments. If
     any Bank shall default in its obligation to make any such payment to the
     Agent for the account of an Issuing Bank, for so long as such default shall
     continue the Agent may, at the request of such Issuing Bank, withhold from
     any payments received by the Agent under this Agreement for the account of
     such Bank the amount so in default and, to the extent so withheld, pay the
     same to such Issuing Bank for application to such defaulted obligation.

          (e) Participations in Reimbursement Obligations. Upon the making of
     each payment by a Bank to an Issuing Bank pursuant to Section 2.10(d) in
     respect of any Letter of Credit, such Bank shall, automatically and without
     any further action on the part of the Agent, any Issuing Bank or such Bank,
     acquire (i) a funded participation in an amount equal to such payment in
     the Reimbursement Obligation owing to such Issuing Bank by the Borrower
     hereunder and under the Letter of Credit Documents relating to such Letter
     of Credit and (ii) a participation in a percentage equal to such Bank's LC
     Participation Percentage in any interest or other amounts payable by the
     Borrower hereunder and under such Letter of Credit Documents in respect of
     such Reimbursement Obligation (other than the fronting fee contemplated by
     Section 2.1(b)(i)). Upon receipt by any Issuing Bank from or for the
     account of the Borrower of any payment in respect of any Reimbursement
     Obligation or any such interest or other amount (including by way of setoff
     or application of proceeds of any collateral security), such Issuing Bank
     shall promptly pay to the Agent, for the account of each Bank entitled
     thereto, such Bank's participation percentage of such payment, each such
     payment by such Issuing Bank to be made in the same currency and funds in
     which received by any Issuing Bank. In the event any payment received by
     such Issuing Bank and so paid to the Banks hereunder is rescinded or must
     otherwise be returned by any Issuing Bank, each Bank shall, upon the
     request of such Issuing Bank (through the Agent), repay to such Issuing
     Bank (through the Agent) the portion of such payment paid to such Bank.

          (f) Information Provided by Issuing Banks to Banks. Promptly after the
     issuance of or amendment to any Letter of Credit, the Issuing Bank that
     issued such Letter of Credit will notify the Agent and the Borrower in
     writing of such issuance or amendment and such notice shall be accompanied
     by a copy of such issuance or amendment. Upon receipt of such notice, the
     Agent shall notify each Bank of such issuance or amendment and, if
     requested by a Bank, the Agent shall provide such Bank with copies of such
     issued or amended Letter of Credit.


                                       39

<PAGE>

          (g) Conditions Precedent to Issuance, Extension and Modification. The
     issuance by any Issuing Bank of a Letter of Credit, or any extension of any
     outstanding Letter of Credit, shall be subject to satisfaction of each of
     the conditions precedent set forth in Article III, and shall further be
     subject to the conditions precedent that (i) such Letter of Credit shall be
     in such form and contain such terms as shall be reasonably satisfactory to
     such Issuing Bank consistent with its then current practices and procedures
     of general applicability with respect to letters of credit of the same type
     and (ii) the Borrower shall have executed and delivered such agreements and
     other instruments relating to such Letter of Credit as such Issuing Bank
     shall have reasonably requested consistent with its then current practices
     and procedures of general applicability with respect to letters of credit
     of the same type; provided that in the event of any conflict between any
     such application, agreement or other instrument and the provisions of this
     Agreement, the provisions of this Agreement shall control. The issuance by
     any Issuing Bank of any modification or supplement to any Letter of Credit
     hereunder shall be subject to the same conditions applicable under this
     Section 2.10 to the issuance of new Letters of Credit, and no such
     modification or supplement shall be issued hereunder unless the Letter of
     Credit affected thereby would have complied with such conditions had it
     originally been issued hereunder in such modified or supplemented form.

          (h) Interest Payable to Issuing Banks by Banks. To the extent that any
     Bank shall fail to pay any amount required to be paid pursuant to Section
     2.10(d) or (e) on the due date therefor, such Bank shall pay interest to
     the Issuing Bank owed such amount (through the Agent) on such amount from
     and including such due date to but excluding the date such payment is made
     at a rate per annum equal to the Federal Funds Rate.

          (i) Indemnification of the Banks, Issuing Banks and Agent. The
     Borrower hereby indemnifies and holds harmless each Bank, each Issuing Bank
     and the Agent from and against any and all claims, damages, losses,
     liabilities, costs and expenses that such Bank, such Issuing Bank or the
     Agent may incur (or that may be claimed against such Bank, such Issuing
     Bank or the Agent by any Person whatsoever) by reason of or in connection
     with the execution and delivery or transfer of or payment or refusal to pay
     by each Issuing Bank under any Letter of Credit (EXPRESSLY INCLUDING ANY
     SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE
     ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH BANK, SUCH ISSUING BANK
     OR THE AGENT, AS THE CASE MAY BE, BUT EXCLUDING ANY SUCH CLAIM, DAMAGE,
     LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL
     MISCONDUCT OF SUCH BANK, SUCH ISSUING BANK AND THE AGENT). IT IS THE INTENT
     OF THE PARTIES HERETO THAT EACH BANK, EACH ISSUING BANK OR THE AGENT, AS
     THE CASE MAY BE, SHALL, TO THE EXTENT PROVIDED IN THIS SECTION 2.10(I), BE
     INDEMNIFIED FOR ITS OWN ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE; provided
     that the Borrower shall not be required to indemnify any Bank, any Issuing
     Bank or the Agent for any claims, damages, losses, liabilities, costs or
     expenses to the extent, but only to the extent, caused by (x) in the case
     of each Issuing Bank, the willful misconduct or gross negligence of such
     Issuing Bank in determining whether a request presented under any Letter of
     Credit complied with the terms of such Letter of Credit or (y) in the case
     of any


                                       40

<PAGE>

     Bank, such Bank's failure to pay its Letter of Credit Liabilities pursuant
     to Sections 2.10(d), (e) and (h).

                                   ARTICLE III
                                   CONDITIONS

          SECTION 3.1. Conditions Precedent to Effectiveness of Agreement.
Subject to Section 3.3 below, the amendment and restatement of the Existing
Credit Agreement and the obligation of each Issuing Bank to maintain existing
issued Letters of Credit as Letters of Credit under this Agreement and to issue
new Letters of Credit under this Agreement is subject to the condition precedent
that the Agent shall have received the following, in form and substance
satisfactory to the Agent (and the Banks, in the case of the Security Documents)
and in sufficient copies (if applicable) for each Bank:

          (a) Certified copies of the resolutions of the Board of Directors, or
     the Executive Committee thereof, of the Borrower and each of its
     Subsidiaries being a party to any Security Document authorizing the
     execution of this Agreement, the other Credit Documents to which the
     Borrower or such Subsidiary is a party, and each Notice of Letter of
     Credit, and all other documents, in each case evidencing any necessary
     company action and governmental approvals, if any, with respect to each
     such Credit Document.

          (b) A certificate of the Secretary or an Assistant Secretary of the
     Borrower and each of its Subsidiaries being a party to any Security
     Document certifying (i) that attached thereto are true and correct copies
     of the Certificate of Incorporation and Bylaws, or other applicable
     formation documents, of the Borrower or such Subsidiary, together with any
     amendments thereto, and (ii) the names and true signatures of the officers
     of the Borrower or such Subsidiary authorized to sign each Credit Document.

          (c) Opinions of each of (i) William G. von Glahn, General Counsel of
     the Borrower, substantially in the form of Exhibit A hereto and (ii) New
     York counsel to the Borrower and Guarantors, substantially in the form of
     Exhibits B-1 and B-2 hereto, and, in each case, as to such other matters as
     any Bank through the Agent may reasonably request.

          (d) A duly executed and effective amendment and restatement of the
     Multiyear Williams Credit Agreement and amendment of each of the Progeny
     Facility documents, other than those automatically amended by virtue of the
     amendment to the Multiyear Williams Credit Agreement, each dated the date
     of this Agreement.

          (e) A certificate of an officer of the Borrower stating the respective
     ratings by each of S&P and Moody's of the senior unsecured long-term debt
     of the Borrower as in effect on the date of this Agreement.


                                       41

<PAGE>

          (f) A duly executed and effective amendment to the Pledge Agreement,
     Security Agreement, Collateral Trust Agreement, LLC Guaranty, and Midstream
     Guaranty each dated the date of this Agreement.

          (g) A duly executed and fully effective amendment and restatement of
     the Holdings Guaranty.

          (h) A certificate of an officer of the Borrower and each of its
     Subsidiaries being a party to any Security Document, dated as of the date
     of the execution and delivery of this Agreement (the statements made in
     each such certificate shall be true on and as of such date), certifying as
     to (i) the truth, in all material respects, of the representations and
     warranties contained in this Agreement (in the case of the Borrower only)
     and the Credit Documents as though made on and as of the date of the
     execution and delivery of this Agreement other than any such
     representations or warranties that, by their terms, refer to a specific
     date other than such date, in which case as of such specific date and (ii)
     the absence of any event (x) occurring and continuing after giving effect
     to this Agreement, the Barrett Loan Agreement and the agreements referred
     to in Section 3.1(d) hereof, and assuming the consummation of the
     transactions contemplated thereby, or (y) resulting from the execution and
     delivery of this Agreement and the Credit Documents and the performance of
     the Borrower or such Subsidiary, as applicable, of its obligations
     hereunder or under any other Credit Document, that constitutes an Event of
     Default (other than any Event of Default which may arise as a result of a
     draw or the probability of a draw under a letter of credit).

          (i) The Borrower shall have paid in full all accrued fees and expenses
     of the Agent (including the accrued fees and expenses of counsel to the
     Agent and local counsel to the Agent).

          (j) Counterparts of this Agreement, duly executed on behalf of the
     Borrower and the Majority Banks.

For purposes of determining compliance with the conditions specified in this
Section 3.1, each Bank shall be deemed to have (i) consented to, approved,
authorized and accepted and to be satisfied with each document or other matter
required under this Section 3.1 (provided that each Bank has received access to
a copy of each document set forth in clauses (f) and (g) hereof and the
Multiyear Williams Credit Agreement) and (ii) authorized the Collateral Agent
and the Collateral Trustee to execute the documents set forth in clauses (f) and
(g) hereof, as applicable, unless both (x) an officer of the Agent responsible
for the transactions contemplated by this Agreement shall have received written
notice from such Bank prior to the issuance of the initial Letter of Credit
under this Agreement specifying its objection thereto and (y) such Bank shall
not have accepted any portion of the fees set forth in Section 2.1(b). The Agent
shall give the Borrower notice when all actions required by Section 3.1 have
been satisfied.

          SECTION 3.2. Conditions Precedent to an Issuance of a Letter of
Credit. The obligation of each Issuing Bank to issue a Letter of Credit
(including the initial Letter of Credit) shall be subject to the further
conditions precedent that on the date of the requested issuance of such Letter
of Credit, the following statements shall be true (and each of the giving of the


                                       42

<PAGE>

applicable Notice of Letter of Credit and the issuance of such Letter of Credit
shall constitute a representation and warranty by the Borrower that on the date
such Letter of Credit is issued such statements are true):

          (a) the representations and warranties contained in Section 4.1 and in
     each of the Security Documents are correct on and as of the date of such
     Letter of Credit, before and after issuance of such Letter of Credit, as
     though made on and as of such date (unless such representation and warranty
     speaks solely as of a particular date or a particular period, in which
     case, as of such date or for such period),

          (b) no event has occurred and is continuing, or would result from the
     issuance of such Letter of Credit, which constitutes a Default or Event of
     Default, and

          (c) after giving effect to such Letter of Credit and Letters of Credit
     which have been requested by the Borrower on or prior to such date but
     which have not been made or issued prior to such date, the sum of the
     aggregate amount of all Letter of Credit Liabilities will not exceed the
     aggregate of the Letter of Credit Commitments.

          SECTION 3.3. Special Condition to Effectiveness of Certain Provisions.
Notwithstanding any contrary term or provision in Section 3.1 or elsewhere in
this Agreement, amendments relating to (x) the release of Collateral and (y)
Section 9.1, to the extent not permitted in the Existing Agreement without the
consent of all Banks, shall be of no force and effect until (a) the Agent shall
have received (i) a duly executed counterpart hereof from each Bank listed on
the signature pages hereof and (ii) a duly executed counterpart of the Multiyear
Williams Credit Agreement from each lender being a party thereto and (b) all
other conditions set forth in Section 3.1 are fully satisfied.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

     SECTION 4.1. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:

          (a) The Borrower is duly organized or validly formed, validly existing
     and (if applicable) in good standing under the laws of the State of
     Delaware and has all corporate or limited liability company powers and all
     governmental licenses, authorizations, certificates, consents and approvals
     required to carry on its business as now conducted in all material
     respects, except for those licenses, authorizations, certificates, consents
     and approvals the failure to have which could not reasonably be expected to
     have a material adverse effect on the business, assets, condition or
     operation of the Borrower and its Material Subsidiaries taken as a whole.
     Each Material Subsidiary (other than


                                       43

<PAGE>

     NewGP, if applicable) is duly organized or validly formed, validly existing
     and (if applicable) in good standing under the laws of its jurisdiction of
     incorporation or formation, except where the failure to be so organized,
     existing and in good standing could not reasonably be expected to have a
     material adverse effect on the business, assets, condition or operations of
     the Borrower and its Material Subsidiaries taken as a whole (other than
     NewGP, if applicable). Each Material Subsidiary (other than NewGP, if
     applicable) has all corporate or limited liability company powers and all
     governmental licenses, authorizations, certificates, consents and approvals
     required to carry on its business as now conducted in all material
     respects, except for those licenses, authorizations, certificates, consents
     and approvals the failure to have which could not reasonably be expected to
     have a material adverse effect on the business, assets, condition or
     operation of the Borrower and its Material Subsidiaries (other than NewGP,
     if applicable) taken as a whole.

          (b) After giving effect to this Agreement, the Multiyear Williams
     Credit Agreement, the Barrett Loan Agreement and the Progeny Facilities and
     assuming the consummation of the transactions contemplated thereby, the
     execution, delivery and performance by each of the Borrower and the
     Guarantors of the Credit Documents to which it is a party and the
     consummation of the transactions contemplated thereby are within the
     Borrower's or such Guarantor's, as the case may be, corporate or limited
     liability company powers, have been duly authorized by all necessary
     corporate or limited liability company action, do not contravene (i) the
     Borrower's or such Guarantor's, as the case may be, charter, by-laws or
     formation agreement or (ii) law or any restriction under any material
     agreement binding on or affecting the Borrower or any Guarantor (other than
     any default which may arise as a result of a draw or the probability of a
     draw under a letter of credit) and will not result in or require the
     creation or imposition of any Lien prohibited by this Agreement.

          (c) No authorization or approval or other action by, and no notice to
     or filing with, any governmental authority or regulatory body is required
     for the due execution, delivery and performance by the Borrower or any
     Guarantor of any Credit Document to which any of them is a party, or the
     consummation of the transactions contemplated thereby.

          (d) Each Credit Document to which the Borrower or any Guarantor is a
     party has been duly executed and delivered by such Person and is the legal,
     valid and binding obligation of such Person enforceable against such Person
     in accordance with its terms, except as such enforceability may be limited
     by any applicable bankruptcy, insolvency, reorganization, moratorium or
     similar law affecting creditors' rights generally and by general principles
     of equity.

          (e) (i) The Consolidated balance sheet of the Borrower and its
     Consolidated Subsidiaries as at December 31, 2001, and the related
     Consolidated statements of income and cash flows of the Borrower and its
     Consolidated Subsidiaries for the fiscal year then ended, copies of which
     have been furnished to each Bank, and the unaudited Consolidated balance
     sheet of the Borrower and its Consolidated Subsidiaries as at March 31,
     2002, and the related unaudited Consolidated statements of income and cash
     flows of the Borrower and its Consolidated Subsidiaries for the three
     months then ended, duly certified by an authorized financial officer of the
     Borrower, copies of which have been furnished to each Bank, fairly present
     (in the case of such balance sheet as at March 31, 2002, and such
     statements of income and cash flows for the three months then ended,
     subject to year-end audit adjustments and the lack of footnotes) the
     Consolidated


                                       44

<PAGE>

     financial condition of the Borrower and its Consolidated Subsidiaries as at
     such dates and the Consolidated results of operations of the Borrower and
     its Consolidated Subsidiaries for the year and three month period,
     respectively, ended on such dates, all in accordance with generally
     accepted accounting principles consistently applied. Except as has been
     disclosed to each Bank, from December 31, 2001 to the date of this
     Agreement, there has been no material adverse change in the Consolidated
     financial condition or Consolidated results of operations of the Borrower
     and its Consolidated Subsidiaries.

          (i) The unaudited Consolidated balance sheet of WGPC and its
     Consolidated Subsidiaries as at December 31, 2001, and the related
     unaudited Consolidated statements of income and cash flows of WGPC and its
     Consolidated Subsidiaries for the fiscal year then ended, copies of which
     have been furnished to each Bank, and the unaudited Consolidated balance
     sheet of WGPC and its Consolidated Subsidiaries as at March 31, 2002, and
     the unaudited related Consolidated statements of income and cash flows of
     WGPC and its Consolidated Subsidiaries for the three months then ended,
     duly certified by an authorized financial officer of WGPC, copies of which
     have been furnished to each Bank, fairly present (in the case of such
     balance sheet as at March 31, 2002, and such statements of income and cash
     flows for the three months then ended, subject to year-end audit
     adjustments and the lack of footnotes) the Consolidated financial condition
     of WGPC and its Consolidated Subsidiaries, respectively, as at such dates
     and the Consolidated results of operations of WGPC and its Consolidated
     Subsidiaries, respectively, for the year and three month period,
     respectively, ended on such dates, all in accordance with generally
     accepted accounting principles consistently applied. From December 31, 2001
     to the date of this Agreement, there has been no material adverse change in
     the Consolidated financial condition or Consolidated results of operations
     of WGPC and its Consolidated Subsidiaries.

          (ii) The unaudited Consolidated balance sheet of WF Group and its
     Consolidated Subsidiaries as at December 31, 2001, and the related
     unaudited Consolidated statements of income and cash flows of WF Group and
     its Consolidated Subsidiaries for the fiscal year then ended, copies of
     which have been furnished to each Bank, and the unaudited Consolidated
     balance sheet of WF Group and its Consolidated Subsidiaries as at March 31,
     2002, and the related unaudited Consolidated statements of income and cash
     flows of WF Group and its Consolidated Subsidiaries for the three months
     then ended, duly certified by an authorized financial officer of WF Group,
     copies of which have been furnished to each Bank, fairly present (in the
     case of such balance sheet as at March 31, 2002, and such statements of
     income and cash flows for the three months then ended, subject to the lack
     of footnotes) the Consolidated financial condition of WF Group and its
     Consolidated Subsidiaries as at such dates and the Consolidated results of
     operations of WF Group and its Consolidated Subsidiaries for the year and
     three month period, respectively, ended on such dates, all in accordance
     with generally accepted accounting principles consistently applied.

          (f) Except as set forth on Schedule XV or in the Public Filings or as
     otherwise disclosed in writing by the Borrower to the Banks and the Agent
     after the date hereof and approved by the Majority Banks, there is no
     pending or, to the knowledge of the Borrower, threatened action or
     proceeding affecting the Borrower, any Guarantor or any


                                       45

<PAGE>

     Material Subsidiary (other than NewGP, if applicable) of the Borrower or
     against any of its or their respective properties or revenues before any
     court, governmental agency or arbitrator, which could reasonably be
     expected to materially and adversely affect the financial condition or
     operations of the Borrower and its Subsidiaries taken as a whole or which
     purports to affect the legality, validity, binding effect or enforceability
     of this Agreement or any other Credit Document.

          (g) No Letter of Credit has been or will be used for any purpose or in
     any manner contrary to the provisions of Section 5.2(m).

          (h) The Borrower is not engaged in the business of extending credit
     for the purpose of purchasing or carrying margin stock (within the meaning
     of Regulation U issued by the Federal Reserve Board), and no proceeds of
     any issuance of a Letter of Credit will be used to purchase or carry any
     such margin stock (other than purchases of common stock expressly permitted
     by Section 5.2(m)) or to extend credit to others for the purpose of
     purchasing or carrying any such margin stock. Following application of the
     proceeds of each issuance of a Letter of Credit, no more than 25% of the
     value of the Reg U Limited Assets of the Borrower will consist of margin
     stock (as defined in Regulation U), and no more than 25% of the value of
     the Reg U Limited Assets of the Borrower and its Subsidiaries on a
     consolidated basis will consist of margin stock (as defined in Regulation
     U).

          (i) The Borrower is not an "investment company" or a company
     "controlled" by an "investment company" within the meaning of the
     Investment Company Act of 1940, as amended.

          (j) No Termination Event has occurred or is reasonably expected to
     occur with respect to any Plan that could reasonably be expected to have a
     material adverse effect on the Borrower or any Material Subsidiary (other
     than NewGP, if applicable) of the Borrower. The Borrower has not nor has
     any ERISA Affiliate of the Borrower received any notification that any
     Multiemployer Plan is in reorganization or has been terminated, within the
     meaning of Title IV of ERISA, and the Borrower is not aware of any reason
     to expect that any Multiemployer Plan is to be in reorganization or to be
     terminated within the meaning of Title IV of ERISA that would have any
     material adverse effect on the Borrower, any Material Subsidiary (other
     than NewGP, if applicable) of the Borrower or any ERISA Affiliate of the
     Borrower.

          (k) As of the date of this Agreement, the United States federal income
     tax returns of the Borrower and its Material Subsidiaries have been
     examined through the fiscal year ended December 31, 1995. The Borrower and
     its Subsidiaries have filed all United States Federal income tax returns
     and all other material domestic tax returns which are required to be filed
     by them and have paid, or provided for the payment before the same become
     delinquent of, all taxes due pursuant to such returns or pursuant to any
     assessment received by the Borrower or any such Subsidiary, other than
     those taxes contested in good faith by appropriate proceedings. The
     charges, accruals and reserves on the books of the Borrower and the
     Material Subsidiaries of the Borrower in respect of taxes are adequate.


                                       46

<PAGE>

          (l) The Borrower is not a "holding company," or a "subsidiary company"
     of a "holding company," or an "affiliate" of a "holding company" or of a
     "subsidiary company" of a "holding company," or a "public utility" within
     the meaning of the Public Utility Holding Company Act of 1935, as amended.

          (m) Except as set forth in the Public Filings or as otherwise
     disclosed in writing by the Borrower to the Banks and the Agent after the
     date hereof and approved by the Majority Banks, the Borrower and its
     respective Material Subsidiaries (other than NewGP, if applicable) are in
     compliance in all material respects with all Environmental Protection
     Statutes to the extent material to the operations or the consolidated
     financial condition of the Borrower and its Consolidated Subsidiaries taken
     as a whole. Except as set forth in the Public Filings or as otherwise
     disclosed in writing by the Borrower to the Banks and the Agent after the
     date hereof and approved by the Majority Banks, the aggregate contingent
     and non-contingent liabilities of the Borrower and its Consolidated
     Subsidiaries (other than those reserved for in accordance with generally
     accepted accounting principles and set forth in the financial statements
     regarding the Borrower referred to in Section 4.1(e) and delivered to each
     Bank and excluding liabilities to the extent covered by insurance if the
     insurer has confirmed that such insurance covers such liabilities or which
     the Borrower reasonably expects to recover from ratepayers) which are
     reasonably expected to arise in connection with (i) the requirements of
     Environmental Protection Statutes or (ii) any obligation or liability to
     any Person in connection with any Environmental matters (including any
     release or threatened release (as such terms are defined in the
     Comprehensive Environmental Response, Compensation and Liability Act of
     1980) of any Hazardous Waste, Hazardous Substance, other waste, petroleum
     or petroleum products into the Environment) could not reasonably be
     expected to have a material adverse effect on the business, assets,
     conditions or operations of the Borrower and its Consolidated Subsidiaries,
     taken as a whole. Each of the Borrower and its respective Material
     Subsidiaries (other than NewGP, if applicable) holds, or has submitted a
     good faith application for, all Environmental Permits (none of which has
     been terminated or denied) required for any of its current operations or
     for any property owned, leased, or otherwise operated by it; and is, and
     within the period of all applicable statutes of limitation has been, in
     compliance with all of its Environmental Permits.

          (n) Other than the Permitted Liens, the Borrower and its Subject
     Subsidiaries have good, valid and indefeasible title to, or a valid
     leasehold interest in, its respective property and to all property
     reflected by its respective balance sheet referenced in clause (e) above as
     being owned by the Borrower (except property sold or otherwise disposed of
     by the Borrower or its Subject Subsidiaries in conformity with the terms
     and conditions of the Multiyear Williams Credit Agreement). Each of the
     Borrower and the Midstream Subsidiaries have sufficient title to all
     Midstream Assets they collectively own and operate as is necessary for the
     conduct of the Midstream Business after the date hereof in accordance with
     the ownership and operation of the Midstream Business in the twelve months
     prior to the date hereof. There exists, or following completion of the
     post-closing items more fully described in Schedule XII, there will exist
     an Acceptable Security Interest in all Collateral other than the Excluded
     Collateral.


                                       47

<PAGE>

          (o) After giving effect to this Agreement and the concurrent
     amendments to various financing arrangements and agreements of the Borrower
     and its Subsidiaries, the Borrower and each Guarantor, individually and
     together with its Subsidiaries, is Solvent.

          (p) The Persons listed on Schedule X are all of the Midstream
     Subsidiaries and own, lease or hold all Midstream Assets necessary and/or
     appropriate for the operation and carrying on of the Midstream Business
     associated with the Midstream Assets as conducted during the 12 months
     preceding the date hereof.

          (q) Neither the Borrower nor any Guarantor is in default under or with
     respect to any of its margin requirements and capital assurance
     requirements in any respect which could reasonably be expected to have a
     material adverse effect on the Midstream Business of the Borrower or any
     Guarantor. No Default or Event of Default has occurred and is continuing.

          (r) Except as would not have a material adverse effect on the conduct
     of the Midstream Business conducted by the Midstream Subsidiaries, the
     various gathering systems which comprise part of the Midstream Assets are
     covered by recorded fee deeds, right of ways, easements, leases,
     servitudes, permits, licenses, or other instruments in favor of the
     Midstream Subsidiaries (or their predecessors in title) and their
     successors and assigns, which instruments establish a contiguous right of
     way for the respective gathering systems and grant the right to construct,
     operate, and maintain the respective gathering system in, over, under, and
     across the land covered thereby; provided that certain licenses and permits
     from railroads, utilities, owners of meter sites and various state and
     local Governmental Authorities and rights granted by Hydrocarbon producers
     on their respective properties may not be recorded. The pipelines
     comprising the various gathering systems which are part of the Midstream
     Assets of the Midstream Subsidiaries are located within the confines of
     contiguous rights of way and do not encroach upon any adjoining property in
     any material respects. The rights of ingress and egress held by the
     Midstream Subsidiaries with respect to such gathering systems allow the
     applicable Midstream Subsidiaries to inspect, operate, repair, and maintain
     such gathering systems in a normal manner consistent with past practices.

                                    ARTICLE V
                            COVENANTS OF THE BORROWER

          SECTION 5.1. Affirmative Covenants. So long as any Letter of Credit
shall remain outstanding, any Letter of Credit Liability shall exist or any
Issuing Bank shall have any Letter of Credit Commitment hereunder, the Borrower
will, unless the Majority Banks shall otherwise consent in writing:

          (a) Compliance with Laws, Etc. Comply, and cause each of its Subject
     Subsidiaries to comply, in all material respects with all applicable laws,
     rules, regulations and orders (except where failure to comply could not
     reasonably be expected to have a material adverse effect on the business,
     assets, condition or operations of the Borrower and its Subject
     Subsidiaries taken as a whole), such compliance to include the payment


                                       48

<PAGE>

     and discharge before the same become delinquent of all taxes, assessments
     and governmental charges or levies imposed upon it or any of its Subject
     Subsidiaries or upon any of its property or any property of any of its
     Subject Subsidiaries, and all lawful claims which, if unpaid, might become
     a Lien upon any property of it or any of its Subject Subsidiaries; provided
     that neither the Borrower nor any Subject Subsidiary of the Borrower shall
     be required to pay any such tax, assessment, charge, levy or claim which is
     being contested in good faith and by proper proceedings and with respect to
     which reserves in conformity with generally accepted accounting principles,
     if required by such principles, have been provided on the books of the
     Borrower or such Subject Subsidiary, as the case may be.

          (b) Reporting Requirements. Furnish to each of the Banks:

               (i) as soon as possible and in any event within five days after
          the occurrence of each Default or Event of Default, continuing on the
          date of such statement, a statement of an authorized financial officer
          of the Borrower setting forth the details of such Default or Event of
          Default and the actions, if any, which the Borrower has taken and
          proposes to take with respect thereto;

               (ii) as soon as available and in any event not later than 60 days
          after the end of each of the first three quarters of each fiscal year
          of the Borrower, (1) the unaudited Consolidated balance sheet of the
          Borrower and its Consolidated Subsidiaries as of the end of such
          quarter and the unaudited Consolidated statements of income and cash
          flows of the Borrower and its Consolidated Subsidiaries for the period
          commencing at the end of the previous year and ending with the end of
          such quarter, all in reasonable detail and duly certified (subject to
          year-end audit adjustments and the lack of footnotes) by an authorized
          financial officer of the Borrower as having been prepared in
          accordance with generally accepted accounting principles; provided
          that, if any financial statement referred to in this clause (ii) of
          Section 5.1(b) is readily available on-line through EDGAR as of the
          date on which such financial statement is required to be delivered
          hereunder, the Borrower shall not be obligated to furnish copies of
          such financial statement; and (2) a certificate of an authorized
          financial officer of the Borrower (a) stating that he has no knowledge
          that a Default or Event of Default has occurred and is continuing or,
          if a Default or Event of Default has occurred and is continuing, a
          statement as to the nature thereof and the action, if any, which the
          Borrower proposes to take with respect thereto, and (b) showing in
          detail the calculation supporting such statement in respect of
          Sections 5.2(b) and 5.2(c);

               (iii) as soon as available and in any event not later than 105
          days after the end of each fiscal year of the Borrower, (1) a copy of
          the annual audit report for such year for the Borrower and its
          Consolidated Subsidiaries, including therein the Consolidated balance
          sheet of the Borrower and its Consolidated Subsidiaries as of the end
          of such fiscal year and Consolidated statements of income and cash
          flows of the Borrower and its Consolidated Subsidiaries for such
          fiscal year, in each case prepared in accordance with generally
          accepted accounting principles and reported on by Ernst & Young, LLP
          or other


                                       49

<PAGE>

          independent certified public accountants of recognized standing
          acceptable to the Majority Banks; provided that if any financial
          statement referred to in this clause (iii) of Section 5.1(b) is
          readily available on-line through EDGAR as of the date on which such
          financial statement is required to be delivered hereunder, the
          Borrower shall not be obligated to furnish copies of such financial
          statement; and (2) a letter of such accounting firm to the Banks (a)
          stating that, in the course of the regular audit of the business of
          the Borrower and its Consolidated Subsidiaries, which audit was
          conducted by such accounting firm in accordance with generally
          accepted auditing standards, such accounting firm has obtained no
          knowledge that a Default or Event of Default has occurred and is
          continuing, or if, in the opinion of such accounting firm, a Default
          or Event of Default has occurred and is continuing, a statement as to
          the nature thereof, and (b) showing in detail the calculations
          supporting such statement in respect of Sections 5.2(b) and 5.2(c),
          (which letter may nevertheless be limited in form, scope and substance
          to the extent required by applicable accounting rules or guidelines in
          effect from time to time);

               (iv) such other information respecting the business or
          properties, or the condition or operations, financial or otherwise, of
          the Borrower or any of its Material Subsidiaries as any Bank through
          the Agent may from time to time reasonably request;

               (v) promptly after the sending or filing thereof, copies of all
          proxy material, reports and other information which the Borrower sends
          to any of its security holders, and copies of all final reports and
          final registration statements which the Borrower or any Material
          Subsidiary of the Borrower files with the Securities and Exchange
          Commission or any national securities exchange; provided that if such
          proxy materials and reports, registration statements and other
          information are readily available on-line through EDGAR, the Borrower
          or Material Subsidiary shall not be obligated to furnish copies
          thereof;

               (vi) as soon as possible and in any event within 30 Business Days
          after the Borrower or any ERISA Affiliate of the Borrower knows or has
          reason to know (A) that any Termination Event described in clause (i)
          of the definition of Termination Event with respect to any Plan has
          occurred that could have a material adverse effect on the Borrower or
          any Material Subsidiary of the Borrower or (B) that any other
          Termination Event with respect to any Plan has occurred or is
          reasonably expected to occur that could have a material adverse effect
          on the Borrower or any Material Subsidiary of the Borrower, a
          statement of the chief financial officer or chief accounting officer
          of the Borrower describing such Termination Event and the action, if
          any, which the Borrower or such Subsidiary proposes to take with
          respect thereto;

               (vii) promptly and in any event within 25 Business Days after
          receipt thereof by the Borrower or any ERISA Affiliate, copies of each
          notice received by the Borrower or any ERISA Affiliate of the Borrower
          from the PBGC stating its


                                       50

<PAGE>

          intention to terminate any Plan or to have a trustee appointed to
          administer any Plan;

               (viii) within 30 days following request therefor by any Bank,
          copies of each Schedule B (Actuarial Information) to each annual
          report (Form 5500 Series) of the Borrower or any ERISA Affiliate of
          the Borrower with respect to each Plan;

               (ix) promptly and in any event within 25 Business Days after
          receipt thereof by the Borrower or any ERISA Affiliate of the Borrower
          from the sponsor of a Multiemployer Plan, a copy of each notice
          received by the Borrower or any ERISA Affiliate of the Borrower
          concerning (A) the imposition of a Withdrawal Liability by a
          Multiemployer Plan, (B) the determination that a Multiemployer Plan
          is, or is expected to be, in reorganization within the meaning of
          Title IV of ERISA, (C) the termination of a Multiemployer Plan within
          the meaning of Title IV of ERISA, or (D) the amount of liability
          incurred, or expected to be incurred, by the Borrower or any ERISA
          Affiliate of the Borrower in connection with any event described in
          clause (A), (B) or (C) above that, in each case, could have a material
          adverse effect on the Borrower or any ERISA Affiliate of the Borrower;

               (x) not more than 60 days (or 105 days in the case of the last
          fiscal quarter of a fiscal year of the Borrower) after the end of each
          fiscal quarter of the Borrower, a certificate of an authorized
          financial officer of the Borrower stating the respective ratings, if
          any, by each of S&P and Moody's of the senior unsecured long-term debt
          of the Borrower as of the last day of such quarter;

               (xi) promptly after any withdrawal or termination of any letter
          of credit, guaranty, insurance or other credit enhancement referred to
          in the third to last sentence of Section 1.5 or any change in the
          indicated rating set forth therein or any change in, or issuance,
          withdrawal or termination of, the rating of any senior unsecured
          long-term debt of the Borrower by S&P or Moody's, notice thereof; and

               (xii) Promptly after any officer of the Borrower obtains
          knowledge thereof, notice of (1) any material violation of,
          noncompliance with, or remedial obligations under, any Environmental
          Protection Statute, or notification of such violation or noncompliance
          received from any Governmental Authority, and (2) any material release
          or threatened material release of Hazardous Substance or Hazardous
          Waste affecting any property owned, leased or operated by the Borrower
          or any Subsidiary of the Borrower that the Borrower or such Subsidiary
          is compelled by the requirements of any Environmental Protection
          Statute to report to any governmental agency, department, board or
          other instrumentality.

          (c) Maintenance of Insurance. Maintain, and cause each of its Material
     Subsidiaries (other than NewGP, if applicable) to maintain, insurance with
     responsible and reputable insurance companies or associations in such
     amounts and covering such risks as is usually carried by companies engaged
     in similar businesses and owning similar


                                       51

<PAGE>

     properties in the same general areas in which the Borrower or such Material
     Subsidiaries operate, provided that the Borrower or any of its Subsidiaries
     may self-insure to the extent and in the manner normal for companies of
     like size, type and financial condition.

          (d) Preservation of Corporate Existence, Etc. Preserve and maintain,
     and cause each of its Subject Subsidiaries (other than the WCG Senior Notes
     Issuer) to preserve and maintain, its corporate existence, rights,
     franchises and privileges in the jurisdiction of its incorporation, and
     qualify and remain qualified, and cause each Subject Subsidiary to qualify
     and remain qualified, as a foreign corporation in each jurisdiction in
     which qualification is necessary or desirable in view of its business and
     operations or the ownership of its properties, except (i) in the case of
     any Subject Subsidiary of the Borrower, where the failure of such Subject
     Subsidiary to so preserve, maintain, qualify and remain qualified could not
     reasonably be expected to have a material adverse effect on the business,
     assets, condition or operations of the Borrower and its Subsidiaries taken
     as a whole; (ii) in the case of the Borrower, where the failure of the
     Borrower to preserve and maintain such rights, franchises and privileges
     and to so qualify and remain qualified could not reasonably be expected to
     have a material adverse effect on the business, assets, condition or
     operations of the Borrower and its Subsidiaries taken as a whole, (iii) the
     Borrower and its Subject Subsidiaries may consummate any merger or
     consolidation permitted pursuant to Section 5.2(d), (iv) the Borrower and
     any of its Subject Subsidiaries may be converted into a limited liability
     company by statutory election; provided that any such conversion of the
     Borrower shall not affect its liabilities and obligations to the Banks
     pursuant to this Agreement, and (v) Permitted Dispositions and other
     dispositions permitted hereunder.

          (e) Acceptable Security Interest. Cause an Acceptable Security
     Interest to exist at all times in all Collateral, except as to the Excluded
     Collateral and as otherwise contemplated by Section 5.1(g). Notwithstanding
     the foregoing, if the Borrower and its Subsidiaries, as applicable, have
     not entered into and duly executed a purchase and sale agreement (the "Sale
     Agreement") for the Refineries on or before December 31, 2002, with an
     agreed closing date of no later than March 31, 2003, then the Borrower
     shall grant an Acceptable Security Interest over any part of the Refineries
     to the extent owned by the Borrower or any of its Subsidiaries within 15
     Business Days of the earlier of (i) December 31, 2002, if the Sale
     Agreement in connection with such part of the Refineries has not been
     executed by December 31, 2002, and (ii) March 31, 2003, if the sale in
     connection with such part of the Refineries has not been fully and duly
     consummated and closed by March 31, 2003, and all filing fees, expenses,
     mortgage taxes and any other costs and expenses of the Collateral Agent or
     Collateral Trustee incurred in connection therewith shall be payable by the
     Borrower on demand.

          (f) Further Assurances. At any time and from time to time, the
     Borrower shall, at its expense, promptly execute and deliver to the
     Collateral Trustee and/or the Collateral Agent such further instruments and
     documents, and take such further action (including, without limitation,
     with respect to the granting of an Acceptable Security Interest, on any
     personal or real property of the Borrower, any Restricted Midstream
     Subsidiary which, on the date of this Agreement, is subject to any
     contractual restriction prohibiting the granting of such a Lien on such
     property, if such contractual restriction


                                       52

<PAGE>

     shall terminate prior to the Termination Date), as the Majority Banks may
     from time to time reasonably request, in order to further carry out the
     intent and purpose of the Credit Documents and to establish and protect the
     rights, interests and remedies created, or intended to be created, in favor
     of the Collateral Trustee, Collateral Agent or any of the Banks, including
     the execution, delivery, recordation and filing of security agreements,
     financing statements and continuation statements under the law of any
     applicable jurisdiction and mortgages and deeds of trust necessary to grant
     an Acceptable Security Interest on all Collateral (other than any item of
     Collateral included in the definition of "Excluded Collateral" and subject
     to a contractual restriction prohibiting the granting of a Lien hereunder
     which contractual restriction has not terminated) of the Borrower and its
     Subsidiaries whether such Collateral is now owned, leased, possessed by
     license or any other means of acquiring a possessory interest or hereafter
     acquired or possessed (each such mortgage or deed of trust being an
     "Additional Mortgage"); provided, however, that neither NewGP, nor MLP, nor
     their respective Subsidiaries shall be required to grant a Lien on any of
     their property.

          (g) Post-Closing Requirements. On or before the dates more fully set
     forth in Schedule XII hereto, the Borrower shall satisfy, or shall cause
     the satisfaction, of the items more fully set forth in such Schedule XII.

          (h) Subsidiaries. (i) Give the Agent thirty days prior written notice
     of the creation or acquisition of any Subsidiary, other than (w) a Project
     Financing Subsidiary, (x) NewGP, (y) any Subsidiary of NewGP or Apco
     Argentina, Inc. or (z) the WCG Senior Notes Issuer and (ii) concurrently
     with the creation or acquisition of any such Subsidiary, cause such
     Subsidiary, other than (w) a Project Financing Subsidiary, (x) NewGP, (y)
     any Subsidiary of either MLP or NewGP or (z) the WCG Senior Notes Issuer,
     to provide to the Collateral Agent a Security Agreement granting an
     Acceptable Security Interest in the Equity Interests of such Subsidiary for
     the benefit of the Collateral Trustee, appropriate legal opinions and, if
     such Subsidiary owns any real property, a Mortgage covering such real
     property, all of which shall be in the form and substance satisfactory to
     the Collateral Agent; provided, however, that the requirements set forth in
     this clause (ii) shall not apply to any Subsidiary of the Borrower newly
     created solely in connection with Permitted Dispositions or any sales and
     dispositions permitted by Section 5.2(e) so long as the Permitted
     Disposition or other sale or disposition is consummated within sixty (60)
     days after the creation of such Subsidiary; provided, further, that if such
     Permitted Disposition or other sale or disposition is not consummated
     within such sixty (60) day period, the requirements set forth in clause
     (ii) above shall apply with respect to such Subsidiary on the Business Day
     immediately following the end of such sixty (60) day period.

          (i) Bond Proceeds. Cause the net proceeds from the TGPL Bond Offerings
     to be maintained in a separate, segregated account in the name of TGPL to
     be used solely as set forth in the offering documents for the TGPL Bond
     Offering.

          (j) Midstream Subsidiaries. Cause the representation set forth in
     Section 4.1(p) to be true at all times; provided that, for purposes of this
     clause (j), Schedule X shall be deemed to be modified from time to time to
     reflect the (x) divestiture of


                                       53

<PAGE>

     Midstream Subsidiaries and (y) formation of new Midstream Subsidiaries, in
     each case to the extent such divestiture or formation has been made in
     accordance with the terms of this Agreement.

          (k) Cash Deposits. Maintain all or substantially all of its and its
     Subject Subsidiaries' cash deposits with one or more of the lenders under
     the Multiyear Williams Credit Agreement, other than any cash deposits held
     in local operational accounts or any international accounts.

          (l) Barrett Liquidity Reserve. Cause RMT to at all times maintain the
     "Borrower Liquidity Reserve" (as defined in the Barrett Loan Agreement).

          (m) Replacement of Legacy L/C with Letter of Credit. Cause the
     issuance of a letter of credit to replace a Legacy L/C to the extent the
     replacement of such Legacy L/C shall be necessary to prevent the occurrence
     of a default in relation to, and draw on, such Legacy L/C.

          SECTION 5.2. Negative Covenants. So long as any Letter of Credit
Liability shall exist or any Issuing Bank shall have any Letter of Credit
Commitment hereunder, the Borrower will not, without the written consent of the
Majority Banks:

          (a) Liens, Etc. Create, assume, incur or suffer to exist, or permit
     any of its Subject Subsidiaries to create, assume, incur or suffer to
     exist, any Lien on or in respect of any of its property, whether now owned
     or hereafter acquired, or assign or otherwise convey, or permit any such
     Subject Subsidiary to assign or otherwise convey, any right to receive
     income, in each case to secure or provide for the payment of any Debt,
     trade payable or other obligation or liability of any Person (other than
     obligations or liabilities that are (i) neither Debt nor trade payables,
     (ii) incurred, and are owed to trading counterparties, in the ordinary
     course of the trading business of the Borrower or any Subject Subsidiary,
     and (iii) secured only by cash, short-term investments or a Letter of
     Credit and (iv) permitted by Section 5.2(o)); provided, however, that
     notwithstanding the foregoing (1) the Borrower or any of its Subject
     Subsidiaries may create, incur, assume or suffer to exist Permitted Liens
     and (2) RMT and RMT LLC may create, incur, assume or suffer to exist any
     Lien created pursuant to the Barrett Loan Agreement.

          (b) Debt.

               (i) In the case of the Borrower, permit the ratio of (A) the
          aggregate amount of Consolidated Debt of the Borrower and its
          Consolidated Subsidiaries to (B) the sum of the Consolidated Net Worth
          of the Borrower plus the aggregate amount of Consolidated Debt of the
          Borrower and its Consolidated Subsidiaries to exceed at any time (i)
          on or before December 30, 2002, 0.70 to 1.00, (ii) after December 30,
          2002 and on or before March 30, 2003, 0.68 to 1.00 and (iii) after
          March 30, 2003, 0.65 to 1.00.

               (ii) With respect to each of TGPL, TGT and NWP, permit the ratio
          of (A) the aggregate amount of Consolidated Debt of such Subsidiary
          and its Consolidated Subsidiaries to (B) the sum of the Consolidated
          Net Worth of such


                                       54

<PAGE>

          Subsidiary plus the aggregate amount of Consolidated Debt of such
          Subsidiary and its Consolidated Subsidiaries to exceed at any time
          0.55 to 1.00.

          (c) Cash Flow to Interest Expense Ratio. Permit, for any period of
     four consecutive quarters, the ratio of (A) the sum of Cash Flow plus
     Interest Expense to (B) Interest Expense to be less than 1.5 to 1.0.

          (d) Merger and Sale of Assets. Merge or consolidate with or into any
     other Person, or sell, lease or otherwise transfer a material part of its
     assets, or permit any of its Major Subsidiaries (other than Apco Argentina,
     Inc. and its Subsidiaries and NewGP, if applicable) to merge or consolidate
     with or into any other Person, or sell, lease or otherwise transfer a
     material part of such Major Subsidiary's assets, except that this Section
     5.2(d) shall not prohibit any sale or transfer permitted by Section 5.2(e),
     (f) or (o) or any Permitted Disposition.

          (e) Asset Disposition. Sell, lease, transfer or otherwise dispose of,
     or permit any of its Material Subsidiaries or the Guarantors to sell,
     lease, transfer or otherwise dispose of, any property of the Borrower or
     any Guarantor or Material Subsidiary of the Borrower, except:

               (i) sales of inventory in the ordinary course of business and on
          reasonable terms;

               (ii) sales of worn out, surplus, or obsolete equipment in the
          ordinary course of business, if no Event of Default exists at the time
          of such sale;

               (iii) replacement of equipment in the ordinary course of business
          with other equipment at least as useful and beneficial to the Borrower
          or its Material Subsidiaries and their respective businesses as the
          equipment replaced if no Event of Default exists at the time of such
          replacement and an Acceptable Security Interest exists in such other
          equipment at the time of such replacement;

               (iv) sales of other immaterial Property (other than Equity
          Interests, Debt or other obligations of any Subsidiary) in the
          ordinary course of business and on reasonable terms, if no Event of
          Default exists at the time of such sale; provided that Property may
          not be sold pursuant to this clause (iv) if the aggregate fair market
          value of all Property sold pursuant to this clause (iv) exceeds
          $250,000 in any year;

               (v) sales or other dispositions of assets which are not
          Collateral for cash in arm's length transactions;

               (vi) sales, leases, transfers or other dispositions of the
          Refineries (in whole or in part, including to each other);

               (vii) the MAPL Asset Disposition and Seminole Asset Disposition;


                                       55
<PAGE>

            (viii) sales or other dispositions of assets of NewGP or its
      Subsidiaries and the transfer by Williams GP LLC to NewGP of the general
      partnership interests and incentive distribution rights in MLP;

          (ix) Permitted Dispositions;

          (x) sale of Equity Interests in NewGP;

          (xi) transfers by the Guarantors to other Guarantors and transfers by
     non-Guarantor Subsidiaries to any other Subsidiary, in each case in the
     ordinary course of business;

          (xii) transfers to the State of California of up to 6 turbines in
     connection with the settlement of the California Proceedings,

          (xiii) the Arctic Fox Capital Contribution; and

          (xiv) transfers of Assets and Property by Subsidiaries of TGT which
     may not be restricted pursuant to that certain Indenture, dated as of April
     11, 1994, between TGT and The Chase Manhattan Bank, as Trustee;

     provided that, (A) 50% of the gross cash proceeds resulting from any
     disposition of Collateral permitted pursuant to clauses (ii), (iv) through
     (vii), (ix) and (x), shall be deposited immediately upon receipt to the
     Collateral Account to be maintained with, and under the control of, the
     Collateral Trustee pursuant to the Collateral Trust Agreement and applied
     in accordance with the terms and conditions of this Agreement and the
     Multiyear Williams Credit Agreement and (B) assets disposed of pursuant to
     clauses (i) through (v) shall not constitute a material part of the assets
     of TGPL, TGT or NWP and (C) with respect to any Collateral replaced,
     exchanged or transferred (in the case of clause (xi) only), or any non-cash
     proceeds received from the sale, transfer or other disposition of
     Collateral, in each case pursuant to this Section 5.2(e), the Borrower
     shall undertake all actions as more fully set forth in, and subject to,
     Section 5.1(f) to (1) grant an Acceptable Security Interest in favor of the
     Collateral Trustee on any new Collateral resulting from any such
     replacement or exchange or on the non-cash proceeds received from the sale
     or other disposition of Collateral and (2) in the case of Collateral
     transferred pursuant to clause (xi), to maintain an Acceptable Security
     Interest on such transferred Collateral.

          In connection with a requested release of Collateral pursuant to this
     Section 5.2, the Borrower shall deliver a Release Notice (as defined in the
     Collateral Trust Agreement) to the Collateral Trustee and the Collateral
     Trustee shall be required to forward such notice to the designated group
     pursuant to the terms of Section 2.5 of the Collateral Trust Agreement. If
     the notice period specified in the Collateral Trust Agreement expires prior
     to the Collateral Trustee receiving any objection to the specified release,
     then (x) the Collateral Trustee will execute and deliver all documents as
     may reasonably be requested to effect a release of the Liens on any such
     Collateral held by the Collateral Trustee pursuant to the Collateral Trust
     Agreement and the other Security Documents, (y) any Guarantor that is the
     owner of the assets subject to a disposition


                                       56
<PAGE>

          permitted pursuant to this Section 5.2(e) and whose entire Equity
          Interests are being conveyed in connection with such disposition,
          together with the Subsidiary or Subsidiaries that own such Equity
          Interests with respect to such ownership, shall be automatically
          released as a Guarantor under the Midstream Guaranty and as a party,
          or parties if applicable, to the Collateral Trust Agreement, Pledge
          Agreement and Security Agreement and (z) each Bank shall be deemed to
          have affirmatively approved the release of such Collateral and to the
          extent applicable, the release of such Guarantor, and its owners to
          the extent applicable, from the terms and conditions of the Midstream
          Guaranty, Collateral Trust Agreement, Pledge Agreement and Security
          Agreement.

               Notwithstanding anything in this Section 5.2(e) to the contrary,
          and for greater certainty, nothing in this Agreement shall prohibit
          (1) the transfer of Equity Interests of RMT from TWC to RMT LLC or any
          RMT Asset Disposition or (2) TWC or any of its Subsidiaries (including
          RMT LLC, RMT and their respective Subsidiaries) from selling, leasing,
          transferring or otherwise disposing of any property of the Borrower or
          any Subsidiaries of the Borrower in accordance with the provisions of
          the Barrett Loan Agreement. For the avoidance of doubt, the
          modification or limitation of voting rights with respect to any Equity
          Interests shall not constitute a disposition of property.

               The Banks hereby acknowledge that Williams Midstream Natural Gas,
          Inc. has entered into a storage lease more fully described on Schedule
          XVI attached hereto. The property subject to the lease is encumbered
          by Liens granted pursuant to the Security Documents. The Banks hereby
          authorize and instruct the Collateral Trustee to execute the
          Non-Disturbance and Attornment Agreement substantially in the form
          attached hereto as part of Schedule XVI.

               (f) Maintenance of Ownership of Certain Subsidiaries. Sell, issue
          or otherwise dispose of, or create, assume, incur or suffer to exist
          any Lien on or in respect of, or permit any of its Subsidiaries to
          sell, issue or otherwise dispose of or create, assume, incur or suffer
          to exist any Lien on or in respect of, any Equity Interests or any
          direct or indirect interest in any Equity Interests in any Material
          Subsidiary (other than NewGP, if applicable, the Refineries, MAPL,
          Seminole and their respective Subsidiaries and the Persons or assets
          referenced on Schedule XIV); provided, however, that this Section
          5.2(f) shall not prohibit (i) Permitted Liens, (ii) the sale or other
          disposition of the Equity Interests in any Subsidiary of the Borrower
          to the Borrower or any Wholly-Owned Subsidiary of the Borrower if, but
          only if, (x) there shall not exist or result a Default or Event of
          Default and (y) in the case of each sale or other disposition referred
          to in this proviso involving the Borrower or any of its Subsidiaries,
          such sale or other disposition could not reasonably be expected to
          impair materially the ability of the Borrower to perform its
          obligations hereunder and under any other Credit Document and the
          Borrower shall continue to exist, (iii) any Subsidiary from selling or
          otherwise disposing of any direct or indirect Equity Interests in any
          Subsidiary of the Borrower (other than TGPL, TGT or NWP), (iv) any RMT
          Asset Disposition, (v) the sale or other disposition of the Equity
          Interests in any Subsidiary of the Borrower pursuant to, and in
          accordance with, the Barrett Loan Agreement, or (vi) any Permitted
          Disposition; provided that, except with respect to any Permitted
          Disposition or any RMT Asset Disposition, after giving effect to any
          sale or other disposition of any Equity Interests


                                       57
<PAGE>

          owned directly or indirectly by a Major Subsidiary, such Subsidiary
          continues to be a Major Subsidiary. Nothing herein shall be construed
          to permit the Borrower or any of its Subject Subsidiaries to purchase
          shares, any interest in shares or any ownership interest in a WCG
          Subsidiary except as permitted by Section 5.2(h).

               (g) Agreements to Restrict Certain Transfers. Enter into or
          suffer to exist, or permit any of its Subject Subsidiaries to enter
          into or suffer to exist, any consensual encumbrance or consensual
          restriction (except under governmental regulations) on its ability or
          the ability of any of its Subject Subsidiaries (i) to pay, directly or
          indirectly, dividends or make any other distributions in respect of
          its capital stock or pay any Debt or other obligation owed to the
          Borrower or to any of its Subject Subsidiaries; or (ii) to make loans
          or advances to the Borrower or any Subject Subsidiary thereof, except,
          as to (i) and (ii) above, (1) encumbrances and restrictions on any
          Subsidiary that is not a Material Subsidiary, (2) those encumbrances
          and restrictions existing on July 31, 2002, (3) other customary
          encumbrances and restrictions now or hereafter existing of the
          Borrower or any Subsidiary thereof entered into in the ordinary course
          of business that are not more restrictive in any material respect than
          the encumbrances and restrictions with respect to the Borrower or its
          Subsidiaries existing on July 31, 2002, (4) encumbrances or
          restrictions on any Subsidiary that is obligated to pay Non-Recourse
          Debt arising in connection with such Non-Recourse Debt, (5)
          encumbrances and restrictions on Apco Argentina, Inc. or its
          Subsidiaries and (6) encumbrances and restrictions on any Subsidiary
          pursuant to the Barrett Loan Agreement.

               (h) Loans and Advances; Investments. (i) Make or permit to remain
          outstanding, or allow any of its Subject Subsidiaries to make or
          permit to remain outstanding, any loan or advance to, or own, purchase
          or acquire any obligations or debt or Equity Interests of, any WCG
          Subsidiary, except that the Borrower and its Subject Subsidiaries may
          (1) permit to remain outstanding, and to replace or refinance, loans
          and advances and other financing arrangements to, or Equity Interest
          in, a WCG Subsidiary existing or owned (in the case of such Equity
          Interests) as of July 31, 2002 and listed on Exhibit C hereof, but no
          such replacement or refinancing shall exceed the amount of such loans,
          advances or other amounts outstanding immediately prior to such
          replacement or refinancing, (2) pursuant to the WCG Unwind
          Transaction, acquire and own the promissory notes referred to in
          clause (ii) of the definition herein of WCG Unwind Transaction, (3)
          receive any distribution from WCG or any Subsidiary thereof in
          connection with the bankruptcy proceedings of WCG or any Subsidiary
          thereof and (4) purchase WCG Note Trust Bonds in accordance with
          Section 5.2(o). Except for those investments permitted in subsections
          (1), (2) and (3) above, the Borrower shall not, and the Borrower shall
          not permit any of its Subject Subsidiaries to, acquire or otherwise
          invest in Equity Interests in, or make any loan or advance to, a WCG
          Subsidiary; and

                    (ii) to the extent not expressly permitted by the terms of
               this Agreement, (x) amend or modify in any manner the Barrett
               Loans or the Barrett Loan Agreement on terms or conditions which
               would (1) increase the collateral therefor to include assets not
               owned by Barrett on the date hereof except for assets acquired
               hereafter by Barrett in the ordinary course of business as
               presently conducted by Barrett, (2) shorten the maturity of the
               Barrett Loans or (3) add any

                                       58
<PAGE>

               additional obligors with respect thereto or (y) replace or
               refinance the Barrett Loans unless the Board of Directors of TWC
               shall determine by resolution that such replacement or
               refinancing is on the best terms reasonably available to TWC or
               Barrett at such time.

               (i) Compliance with ERISA. (i) Terminate, or permit any ERISA
          Affiliate of the Borrower to terminate, any Plan so as to result in
          any material liability of the Borrower or any Material Subsidiary
          (other than NewGP, if applicable) of the Borrower or any ERISA
          Affiliate to the PBGC, if such material liability of such ERISA
          Affiliate could reasonably be expected to have a material adverse
          effect on the Borrower or any Material Subsidiary (other than NewGP,
          if applicable) of the Borrower, or (ii) permit to occur any
          Termination Event with respect to a Plan which would have a material
          adverse effect on the Borrower or any Subject Subsidiary of the
          Borrower.

               (j) Transactions with Related Parties. Make any sale to, make any
          purchase from, extend credit to, make payment for services rendered
          by, or enter into any other transaction with, or permit any Material
          Subsidiary of the Borrower to make any sale to, make any purchase
          from, extend credit to, make payment for services rendered by, or
          enter into any other transaction with, any Related Party of the
          Borrower or of such Material Subsidiary unless as a whole such sales,
          purchases, extensions of credit, rendition of services and other
          transactions are (at the time such sale, purchase, extension of
          credit, rendition of services or other transaction is entered into) on
          terms and conditions reasonably fair in all material respects to the
          Borrower or such Material Subsidiary in the good faith judgment of the
          Borrower.

               (k) Guarantees. After July 31, 2002, enter into any agreement to
          guarantee or otherwise become contingently liable for, or permit any
          of its Subject Subsidiaries to guarantee or otherwise become
          contingently liable for, Debt or any other obligation of any WCG
          Subsidiary or to otherwise assure a WCG Subsidiary, or any creditor of
          a WCG Subsidiary, against loss, except as set forth in Exhibit C.

               (l) Sale and Lease-Back Transactions. Enter into, or permit any
          of its Subject Subsidiaries (other than Apco Argentina, Inc.) to enter
          into, any Sale and Lease-Back Transaction, if after giving effect
          thereto the Borrower would not be permitted to incur at least $1.00 of
          additional Debt secured by a Lien permitted by paragraph (y) of
          Schedule III.

               (m) Use of Proceeds. Use any Letter of Credit for any purpose
          other than general corporate purposes relating to the business of the
          Borrower and its Subsidiaries, (including working capital and capital
          expenditures), or use any Letter of Credit in any manner which
          violates or results in a violation of law; provided, however, that no
          Letter of Credit will be used to acquire any equity security of a
          class which is registered pursuant to Section 12 of the Securities
          Exchange Act of 1934, as amended (other than any purchase of common
          stock of any corporation, if such purchase is not subject to Sections
          13 and 14 of the Securities Exchange Act of 1934 and is not opposed,
          resisted or recommended against by such corporation or its management
          or directors, provided that the aggregate amount of common stock of
          any corporation (other than Apco Argentina


                                       59

<PAGE>

          Inc., a Cayman Islands corporation) purchased during any calendar year
          shall not exceed 1% of the common stock of such corporation issued and
          outstanding at the time of such purchase) or in any manner which
          contravenes law, and no Letter of Credit will be used to purchase or
          carry any margin stock (within the meaning of Regulation U issued by
          the Federal Reserve Board). Notwithstanding anything to the contrary
          contained herein, if any, (i) with respect to EMT, Letters of Credit
          shall only be used, directly or indirectly, as necessary for the
          orderly disposition of the Trading Book and (ii) no Letter of Credit
          shall be used to pay any principal amounts outstanding, interest, fees
          or other costs with respect to the Barrett Loan, it being understood
          that Letters of Credit may be used to support margin requirements with
          regard to Hedge Agreements on oil and gas.

               (n) Restricted Payments. (i) Other than in connection with the
          Castle Transaction, the Arctic Fox Capital Contribution and the
          Plowshare Transaction, declare or pay any dividends, purchase, redeem,
          retire, defease or otherwise acquire for value any of its Equity
          Interests now or hereafter outstanding, return any capital to its
          stockholders, partners or members (or the equivalent Persons thereof)
          as such, make any distribution of assets, Equity Interests,
          obligations or securities to its stockholders, partners or members (or
          the equivalent Person thereof) as such, or permit any of its Subject
          Subsidiaries (other than Apco Argentina, Inc., TGT (to the extent
          there exists any contractual restriction prohibiting the Subsidiaries
          of TGT from restricting their ability to pay dividends) and their
          respective Subsidiaries) to do any of the foregoing, (ii) permit any
          of its Subject Subsidiaries to purchase, redeem, retire, defease or
          otherwise acquire for value any Equity Interests in the Borrower or
          (iii) permit its Subject Subsidiaries to make any prepayment with
          respect to any Debt (other than Debt issued or incurred in connection
          with the Progeny Facilities and related documents, Debt issued or
          incurred in accordance with the terms of Section 2.3(b), Debt issued
          prior to July 31, 2002 pursuant to the certain Indenture dated May 1,
          1990 with Transco Energy Company as issuer and Bank of New York as
          trustee, as supplemented from time to time, the WCG Note Trust Bonds,
          Debt under the Barrett Loan Agreement, Debt of Subsidiaries of TGT and
          Debt incurred in connection with the UBOC Turbine Financing) or
          repurchase any Debt securities except any repurchase or prepayment
          required by the terms thereof in effect on July 31, 2002, except that,
          so long as no Default shall have occurred and be continuing at the
          time of any action described in clauses (i), (ii) (other than with
          respect to RMT LLC and its Subsidiaries) and (iv) below or would
          result therefrom:

                    (i) the Borrower may (A) declare and pay cash dividends and
               distributions on its (1) 9 7/8ths% Cumulative Convertible
               Preferred Stock, (2) December 2000 Cumulative Convertible
               Preferred Stock and (3) March 2001 Mandatorily Convertible Single
               Reset Preferred Stock, (B) declare and pay cash dividends and
               distributions on TWC Preferred Stock issued on or after July 30,
               2002 in form and substance satisfactory to the Agent and (C) in
               any Fiscal Quarter, declare and pay cash dividends to its holders
               of common stock and purchase, redeem, retire or otherwise acquire
               shares of its own outstanding common stock for cash if after
               giving effect thereto the aggregate amount of such dividends,
               purchases, redemptions, retirements and acquisitions paid or made
               in any such Fiscal Quarter would be not greater than the sum of
               $6,250,000;


                                       60

<PAGE>

                    (ii) the Borrower or any Subsidiary of the Borrower may (A)
               declare and pay cash dividends or pay subordinated loans owed to
               the Borrower and (B) declare and pay cash dividends or pay
               subordinated loans, in each case in the ordinary course of
               business consistent with past practice, owed to any other
               Subsidiary of the Borrower (and payments to the holders of the
               Designated Minority Interests made concurrently with and in the
               same form as the payments to Subsidiaries of the Borrower);

                    (iii) the Borrower or any Subsidiary of the Borrower may
               make payments to non-Subsidiaries to the extent required under
               Financing Transactions or other agreements in effect as of July
               31, 2002, including, without limitation, payments made in
               connection with a downgrade by S&P and Moody's of the Borrower's
               senior unsecured long-term debt rating; and

                    (iv) the Borrower or any Subsidiary of the Borrower may make
               payments to non-Subsidiaries to the extent required under the
               organizational documents of the Deepwater JV.

               (o) Investments in Other Persons. Make or hold, or permit any of
          its Subject Subsidiaries to make or hold, any Investment in any
          Person, except:

                    (i) equity Investments by the Borrower and its Subsidiaries
               in their Subsidiaries outstanding on July 31, 2002 and additional
               Investments in Subsidiaries engaged in businesses reasonably
               related to the businesses carried on by the Borrower and its
               Subsidiaries on July 31, 2002 (including, without limitation, the
               Arctic Fox Capital Contribution); provided, that any such
               additional cash Investments shall not exceed $75,000,000
               annually, except to the extent such cash Investments are
               immediately returned to the Person making such Investment as a
               dividend, distribution or repayment of Debt;

                    (ii) loans and advances to employees in the ordinary course
               of the business of the Borrower and its Subsidiaries as presently
               conducted;

                    (iii) Investments of the Borrower and its Subsidiaries in
               Cash Equivalents;

                    (iv) Investments existing on July 31, 2002 or commitments
               for such Investments existing on July 31, 2002 and Investments
               made pursuant to such commitments after July 31, 2002;

                    (v) Investments by the Borrower and its Subsidiaries in
               Hedge Agreements entered into in the ordinary course of business
               and not for speculative purposes;

                    (vi) Investments consisting of intercompany debt;


                                       61
<PAGE>

                    (vii) Investments consisting of (A) the purchase of WCG Note
               Trust Bonds in an aggregate principal amount not to exceed
               $75,000 or (B) the Equity Interests in the WCG Senior Notes
               Issuer;

                    (viii) Investments by Apco Argentina, Inc. or its
               Subsidiaries in accordance with applicable laws and their
               governing documents; provided that such Investments shall only be
               made using cash generated solely by their business, operations
               and financings;

                    (ix) Investments not exceeding $12,000,000 in Williams Coal
               Seam Gas Royalty Trust units pursuant to agreements in place on
               the date hereof; provided that the purchase price of such units
               shall not exceed the then existing market price for such units;

                    (x) Investments consisting of the acquisition of Equity
               Interests of the Deepwater JV in exchange for the contribution of
               Deepwater Assets to the Deepwater JV and Investments made to
               maintain such Equity Interests;

                    (xi) Investments in Persons that are not Subsidiaries
               required to be made by the Borrower or any of its Subsidiaries in
               order to avoid default pursuant to agreements in existence on
               July 31, 2002;

                    (xii) any Investments necessary to maintain, in accordance
               with the partnership agreement, the 2% general partnership
               interest of NewGP in the MLP; provided, that the aggregate annual
               amount of such Investments under this clause (xii) shall not
               exceed $10,000,000;

                    (xiii) Investments permitted by Section 5.2(h);

                    (xiv) the Investment in the 0.2% general partnership
               interest in West Texas LPG Pipelines;

                    (xv) Investments by EMT contemplated by the UBOC Turbine
               Financing; and

                    (xvi) other Investments in an aggregate amount invested not
               to exceed $50,000,000 annually; provided that, with respect to
               Investments made under this clause (xvi), (1) any newly acquired
               or organized Subsidiary of the Borrower or any of its
               Subsidiaries shall be a Wholly-Owned Subsidiary thereof; (2)
               immediately before and after giving effect thereto, no Default
               shall have occurred and be continuing or would result therefrom;
               and (3) any company or business acquired or invested in pursuant
               to this clause (xv) shall be in the same line of business as the
               business of the Borrower or any of its Subsidiaries.

               (p) Subsidiary Debt. Permit any of its Subject Subsidiaries to
          create, incur, assume or suffer to exist Debt, other than (except as
          set forth in either Section 6(f) of the LLC Guaranty or Section 6(e)
          of the Holdings Guaranty) (i) Debt incurred, assumed or suffered to
          exist by TGPL, TGT, NWP or Apco Argentina, Inc. or their Subsidiaries,
          (ii)


                                       62
<PAGE>

          Debt incurred, assumed or suffered to exist by Subsidiaries (other
          than those referred to in clause (i) and Subsidiaries the stock of
          which is pledged under the Pledge Agreement) in an aggregate amount
          not to exceed $50,000,000 at any one time outstanding, (iii) Debt in
          existence on July 31, 2002, (iv) Debt under the Guaranties, (v) Debt
          of the Project Financing Subsidiaries, (vi) Debt under the Barrett
          Loan Agreement, (vii) Debt consisting of intercompany debt so long as
          the obligations of the debtors thereunder are subordinated to their
          obligations under the Credit Documents and are incurred in the
          ordinary course of the cash management system of the Borrower and its
          Subsidiaries, (viii) any Permitted Refinancing Debt incurred in
          exchange for, or the net proceeds of which are used to refund,
          refinance or replace Debt permitted to be incurred under this clause
          (p), and (ix) Debt incurred in connection with the Deepwater
          Transactions and the UBOC Turbine Financing.

               (q) Agreement to Restrict Transfers to NewGP. Transfer, or permit
          any of its Subject Subsidiaries to transfer, any property to NewGP,
          except (x) a transfer to NewGP of the Equity Interest in MLP held by
          Williams GP LLC or (y) any other transfer necessary to maintain the 2%
          general partnership interest of NewGP in the MLP; provided, that the
          aggregate annual amount of such Investments under clause (y) shall not
          exceed $10,000,000.

               (r) (R)Prepayments of Progeny Facilities and Legacy L/Cs. From
          July 31, 2002, prepay any Progeny Facility or reduce the commitment of
          any lender under any Progeny Facility, or cash collateralize any
          Legacy L/C; provided, that the Borrower may (i) prepay any Progeny
          Facility, (ii) reduce the commitment of any lender under any Progeny
          Facility and (iii) cash collateralize any Legacy L/C under any of the
          following circumstances:

                    (1) the Borrower may apply Net Cash Proceeds as required by
               Section 2.3(b);

                    (2) the Borrower may pay principal of a Progeny Facility as
               such principal matures and make any required prepayment or
               reduction of the commitments of any lender thereunder, in each
               case in accordance with the terms of such Progeny Facility in
               effect on July 31, 2002, and may prepay any such Progeny Facility
               simultaneously with the disposition of the assets associated with
               such Progeny Facility;

                    (3) the Borrower may make prepayments, reductions of
               commitments and cash collateralizations on a pro-rata basis to
               (x) the permanent ratable reduction of the outstanding amounts of
               the Progeny Facilities and (y) cash collateralize the Legacy
               L/Cs, until and unless the Legacy L/Cs are fully cash
               collateralized, in which case such prepayments, reductions of
               commitments or cash collateralizations may be made on a pro-rata
               basis to the permanent ratable reduction of the outstanding
               amounts of the Progeny Facilities;

                    (4) the Borrower may, in its sole absolute discretion, make
               any prepayment, commitment reduction or cash collaterallization
               of the type set forth


                                       63
<PAGE>

               in clauses (i) through (iii) above in an aggregate amount not to
               exceed $65,000,000 per annum; and

                    (5) the Borrower may prepay, defease or otherwise satisfy in
               whole or in part all of its obligations arising under the Letter
               of Credit and Reimbursement Agreement dated as of May 15, 1994,
               among Tulsa Parking Authority, The Williams Companies, Inc., Bank
               of Oklahoma, National Association, and Bank of America, N.A.
               (formerly NationsBank of Texas, N.A.), relative to Tulsa Parking
               Authority First Mortgage Revenue Bonds, as amended, and all
               documents, instruments, agreements, certificates and notices at
               any time executed and/or delivered in connection therewith.

          For the avoidance of doubt, nothing in this subsection (R) shall limit
          or restrict the Borrower from any payment or taking any action that is
          required by the terms of any Progeny Facility or Legacy L/C in effect
          on the date hereof.

                                   ARTICLE VI
                                EVENTS OF DEFAULT

     SECTION 6.1. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:


          (a) The Borrower (i) shall fail to pay any Reimbursement Obligation
     when the same becomes due and payable, or (ii) shall fail to pay any
     interest on any Reimbursement Obligation within three days after the same
     becomes due and payable or (iii) shall fail to pay any fee or other amount
     to be paid by it hereunder or under any Credit Document to which it is a
     party within ten days after the same becomes due and payable; or

          (b) Any certification, representation or warranty made by the Borrower
     or any Guarantor herein or in any other Credit Document or by the Borrower
     or any Guarantor (or any officer of the Borrower or any Guarantor) in
     writing under or in connection with this Agreement or in any other Credit
     Document or any instrument executed in connection herewith (including
     representations and warranties deemed made pursuant to Section 3.2) shall
     prove to have been incorrect in any material respect when made or deemed
     made; or

          (c) The Borrower or any Guarantor shall fail to perform or observe (i)
     any term, covenant or agreement contained in Section 5.1(b) on its part to
     be performed or observed and such failure shall continue for five Business
     Days after the earlier of the date notice thereof shall have been given to
     the Borrower by the Agent or any Bank or the date the Borrower shall have
     knowledge of such failure, or (ii) any term, covenant or agreement
     contained in this Agreement (other than a term, covenant or agreement
     contained in Section 5.1(b) or Section 5.2) or any other Credit Document on
     its part to be performed or observed and such failure shall continue for
     ten Business Days after the earlier of the date notice thereof shall have
     been given to the Borrower by the Agent or


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<PAGE>
     any Bank or the date the Borrower or Guarantor, as applicable, shall have
     knowledge of such failure; or (iii) any term, covenant or agreement
     contained in Section 5.2; or

          (d) The Borrower or any Subsidiary of the Borrower shall fail to pay
     any principal of or premium or interest on any Debt which is outstanding in
     a principal amount of at least $60,000,000 in the aggregate (excluding Debt
     incurred pursuant to any Letter of Credit) of the Borrower and/or such
     Subsidiary (as the case may be), when the same becomes due and payable
     (whether by scheduled maturity, required prepayment, acceleration, demand
     or otherwise), and such failure shall continue after the applicable grace
     period, if any, specified in the agreement or instrument relating to such
     Debt; or any other event shall occur or condition shall exist under any
     agreement or instrument relating to any such Debt and shall continue after
     the applicable grace period, if any, specified in such agreement or
     instrument, if the effect of such event or condition is to accelerate, or
     to permit the acceleration of, the maturity of such Debt; or any such Debt
     shall be declared to be due and payable, or required to be prepaid (other
     than by a regularly scheduled required prepayment, as required in
     connection with any permitted sale of assets or as required in connection
     with any casualty or condemnation), prior to the stated maturity thereof;
     provided, however, that the provisions of this Section 6.1(d) shall not
     apply to any Non-Recourse Debt of any non-material Subsidiary of the
     Borrower which is a Non-Borrowing Subsidiary as defined in the Multiyear
     Williams Credit Agreement; or

          (e) The Borrower or any Material Subsidiary of the Borrower (i) shall
     generally not pay its debts as such debts become due, or (ii) shall admit
     in writing its inability to pay its debts generally, or shall make a
     general assignment for the benefit of creditors or any proceeding shall be
     instituted by or against the Borrower or any Material Subsidiary of the
     Borrower seeking to adjudicate it a bankrupt or insolvent, or seeking
     liquidation, winding up, reorganization, arrangement, adjustment,
     protection, relief, or composition of it or its debts under any law
     relating to bankruptcy, insolvency or reorganization or relief of debtors,
     or seeking the entry of an order for relief or the appointment of a
     receiver, trustee, or other similar official for it or for any substantial
     part of its property and, in the case of any such proceeding instituted
     against it (but not instituted by it), shall remain undismissed or unstayed
     for a period of 60 days; or the Borrower or any Material Subsidiary of the
     Borrower shall take any action to authorize any of the actions set forth
     above in this subsection (e); or

          (f) Any judgment or order for the payment of money in excess of
     $60,000,000 shall be rendered against the Borrower or any Material
     Subsidiary of the Borrower and remain unsatisfied and either (i)
     enforcement proceedings shall have been commenced by any creditor upon such
     judgment or order or (ii) there shall be any period of 30 consecutive days
     during which a stay of enforcement of such judgment or order, by reason of
     a pending appeal or otherwise, shall not be in effect; or

          (g) Any Termination Event with respect to a Plan shall have occurred
     and, 30 days after notice thereof shall have been given to the Borrower by
     the Agent, (i) such Termination Event shall still exist and (ii) the sum
     (determined as of the date of occurrence of such Termination Event) of the
     Insufficiency of such Plan and the


                                       65
<PAGE>

     Insufficiency of any and all other Plans with respect to which a
     Termination Event shall have occurred and then exist (or in the case of a
     Plan with respect to which a Termination Event described in clause (ii) of
     the definition of Termination Event shall have occurred and then exist, the
     liability related thereto) is equal to or greater than $75,000,000; or

          (h) The Borrower or any ERISA Affiliate of the Borrower shall have
     been notified by the sponsor of a Multiemployer Plan that it has incurred
     Withdrawal Liability to such Multiemployer Plan in an amount which, when
     aggregated with all other amounts required to be paid to Multiemployer
     Plans in connection with Withdrawal Liabilities (determined as of the date
     of such notification), exceeds $75,000,000 in the aggregate or requires
     payments exceeding $50,000,000 per annum; or

          (i) The Borrower or any ERISA Affiliate of the Borrower shall have
     been notified by the sponsor of a Multiemployer Plan that such
     Multiemployer Plan is in reorganization or is being terminated, within the
     meaning of Title IV of ERISA, if as a result of such reorganization or
     termination the aggregate annual contributions of the Borrower and its
     ERISA Affiliates to all Multiemployer Plans which are then in
     reorganization or being terminated have been or will be increased over the
     amounts contributed to such Multiemployer Plans for the respective plan
     years which include July 31, 2002 by an amount exceeding $75,000,000;

          (j) Any provision (other than any provision excepted from, or subject
     to a qualification in, the opinion delivered pursuant to Section 3.1(C),
     but only to the extent of such exception or qualification) of any Security
     Document for any reason is not a legal, valid, binding and enforceable
     obligation of the Borrower or any Guarantor party thereto or the Borrower
     or any Guarantor party thereto shall so state in writing;

          (k) Any material portion of the Collateral that is not covered by
     adequate insurance shall be destroyed or any material portion of the
     Collateral shall otherwise become unavailable for use by its owner for a
     period in excess of 30 days (or 90 days if such owner has business
     interruption insurance adequate to cover the loss to it resulting from such
     Collateral being unavailable for use) or title to any material portion of
     the Collateral shall be successfully challenged; or

          (l) Any "Default" or "Event of Default" as defined in any Security
     Document shall occur;

then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Majority Banks, by notice to the Borrower, declare, the
obligation of each Issuing Bank to issue any Letter of Credit to be terminated,
whereupon each such obligation shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Majority Banks, by notice to the
Borrower, declare the principal of the Reimbursement Obligations, all interest
thereon and all other amounts payable by the Borrower under this Agreement and
any other Credit Document to be forthwith due and payable, whereupon all such
amounts shall become and be forthwith due and payable, without requirement of
any presentment, demand, protest, notice of intent to accelerate, further notice
of acceleration or other further notice of any kind (other than the notice
expressly provided for above), all of which are hereby expressly waived by the
Borrower;


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<PAGE>

provided, however, that in the event of any Event of Default described
in Section 6.1(e)(ii), (A) the obligation of each Issuing Bank to issue a Letter
of Credit shall automatically be terminated and (B) the principal of the
Reimbursement Obligations, all such interest and all such other amounts shall
automatically become and be 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.
For purposes of this Section 6.1, any Reimbursement Obligation owed to an SPC
shall be deemed to be owed to its Designating Bank.

     SECTION 6.2. LC Cash Collateral Accounts. Upon the occurrence and during
the continuance of any Event of Default (if the Agent has declared all amounts
owed hereunder to be due and payable), the Borrower agrees that it shall
forthwith, without any demand or the taking of any other action by any Issuing
Bank, the Agent, or any of the Banks, provide cover for the outstanding Letter
of Credit Liabilities by paying to the Agent immediately available funds in an
amount equal to the then aggregate undrawn face amount of all outstanding
Letters of Credit, which funds shall be deposited into a blocked deposit account
or accounts to be established and maintained at the office of Citibank (or an
affiliate thereof) in the name of the Agent as collateral security for any
outstanding Letter of Credit Liabilities (the "LC Cash Collateral Accounts").
The Borrower hereby pledges, and grants to the Agent for the ratable benefit of
each Issuing Bank and the Banks, a security interest in all funds held in the LC
Cash Collateral Accounts from time to time and all proceeds thereof, as security
for the payment of the outstanding Letter of Credit Liabilities. The Agent shall
from time to time withdraw funds then held in the LC Cash Collateral Accounts to
satisfy the payment of any Reimbursement Obligations owing to any Issuing Bank
as shall have become or shall become due and payable by the Borrower to such
Issuing Bank under this Agreement in connection with the Letters of Credit. The
Agent shall exercise reasonable care in the custody and preservation of any
funds held in the LC Cash Collateral Accounts and shall be deemed to have
exercised such care if such funds are accorded treatment substantially
equivalent to that which the Agent accords its own property, it being understood
that the Agent shall not have any responsibility for taking any necessary steps
to preserve rights against any parties with respect to any such funds. If at any
time (a) no Event of Default exists and (b) the funds in the LC Cash Collateral
Accounts (excluding, for purposes of this clause (b) only, an amount equal to
the aggregate cash proceeds deposited thereto in accordance with Section 2.3(b))
exceed the aggregate amount of all Letter of Credit Liabilities, the Agent
shall, upon request of the Borrower, return such excess to the Borrower or to
any Person designated by the Borrower.

                                  ARTICLE VII
                             [INTENTIONALLY OMITTED]
                                  ARTICLE VIII
             THE AGENT; ISSUING BANKS; THE COLLATERAL AGENT; OTHERS

     SECTION 8.1. Agent's Authorization and Action. Each Bank hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Agent by the
terms hereof, together with such powers as are reasonably incidental thereto. As
to any matters not expressly provided for by this


                                       67
<PAGE>

Agreement (including enforcement of the terms of this Agreement or collection of
the Reimbursement Obligations, fees and any other amounts due and payable
pursuant to this Agreement), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Banks, and such instructions shall be
binding upon all Banks; provided, however, that the Agent shall not be required
to take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or applicable law. The Agent agrees to give to each
Bank prompt notice of each notice given to it by the Borrower pursuant to the
terms of this Agreement.

     SECTION 8.2. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (i) may consult with
legal counsel (including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement or any other Credit Document; (iii) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or any other Credit
Document on the part of the Borrower or any Guarantor or to inspect the property
(including the books and records) of the Borrower or any Guarantor; (iv) shall
not be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto or thereto; (v) shall incur no
liability under or in respect of any Letter of Credit or this Agreement by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties; and (vi) may treat
any Issuing Bank that issues or has issued a Letter of Credit as being the
issuer of such Letter of Credit for all purposes.

     SECTION 8.3. Issuing Banks' Reliance, Etc. Neither the Issuing Banks nor
any directors, officers, agents or employees of the Issuing Banks shall be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement, except for its or their own gross negligence or
willful misconduct. The Issuing Banks shall not have, by reason of this
Agreement a fiduciary relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended or shall be so construed as to
impose upon the Issuing Banks any obligations in respect of this Agreement
except as expressly set forth herein. Without limitation of the generality of
the foregoing, the Issuing Banks: (i) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (ii) make no warranty or representation to any Bank and
shall not be responsible to any Bank for any statements, warranties or
representations (whether written or oral) made in or in connection with this
Agreement or any other Credit Document; (iii) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or any other Credit Document on the
part of the Borrower or any Guarantor or to


                                       68
<PAGE>

inspect the property (including the books and records) of the Borrower or any
Guarantor; (iv) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any other Credit Document or any other instrument or document
furnished pursuant hereto or thereto; and (v) shall incur no liability under or
in respect of any Letter of Credit or this Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.

     SECTION 8.4. Rights. With respect to any Letter of Credit Interest held by
it, Citicorp shall have the same rights and powers under this Agreement as any
other Bank and may exercise the same as though it was not the Agent and
Collateral Agent; with respect to its Letter of Credit Commitments, the
Reimbursement Obligations owed to it, any Letter of Credit Interest held by it,
the Issuing Banks shall have the right and power under this Agreement as any
other Bank and may exercise the same as though it was not an Issuing Bank, as
the case may be. The term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include each of the Issuing Banks in their individual capacity.
Citicorp, each Issuing Bank and the respective affiliates of each may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, the Borrower, any Subsidiary of the
Borrower, any Person who may do business with or own, directly or indirectly,
securities of the Borrower or any such Subsidiary and any other Person, all as
if Citicorp were not the Agent and Collateral Agent and each Issuing Bank was
not an Issuing Bank, in each case without any duty to account therefor to the
Banks.

     SECTION 8.5. [Intentionally Omitted].

     SECTION 8.6. Indemnification. The Banks agree to indemnify the Agent (to
the extent not reimbursed by the Borrower), ratably according to the respective
Letter of Credit Interests then held by each of them (or if no Letter of Credit
Interests are at the time outstanding, ratably according to their respective LC
Participation Percentage), from and against any and all claims, damages, losses,
liabilities and expenses (including reasonable fees and disbursements of
counsel) of any kind or nature whatsoever which may be imposed on, incurred by,
or asserted against the Agent in any way relating to or arising out of this
Agreement or any other Credit Document or any action taken or omitted by the
Agent under this Agreement or any other Credit Document (EXPRESSLY INCLUDING ANY
SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE ORDINARY,
SOLE OR CONTRIBUTORY NEGLIGENCE OF THE AGENT, BUT EXCLUDING ANY SUCH CLAIM,
DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE AGENT). IT IS THE INTENT OF THE PARTIES HERETO THAT
THE AGENT SHALL, TO THE EXTENT PROVIDED IN THIS SECTION 8.6, BE INDEMNIFIED FOR
ITS OWN ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under this Agreement to the extent that the Agent is
not reimbursed for such expenses by the Borrower.



                                       69
<PAGE>

     SECTION 8.7. Successor Agent. The Agent may resign at any time as Agent
under this Agreement by giving written notice thereof to the Banks and the
Borrower and may be removed at any time with or without cause by the Majority
Banks. Upon any such resignation or removal, the Majority Banks shall have the
right to appoint, with the consent the Borrower (which consent shall not be
unreasonably withheld and shall not be required if an Event of Default exists),
a successor Agent from among the Banks. If no successor Agent shall have been so
appointed by the Majority Banks with such consent, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a Bank which is a commercial bank organized under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent under this Agreement by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and shall function as the Agent under this
Agreement, and the retiring Agent shall be discharged from its duties and
obligations as Agent under this Agreement. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.

     SECTION 8.8. Collateral Agent's Authorization and Action. Each Bank hereby
appoints and authorizes the Collateral Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Collateral Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including enforcement of the terms of this Agreement or
collection of the Reimbursement Obligations, fees and any other amounts due and
payable pursuant to this Agreement), the Collateral Agent shall not be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Banks, and such instructions
shall be binding upon all Banks; provided, however, that the Collateral Agent
shall not be required to take any action which exposes the Collateral Agent to
personal liability or which is contrary to this Agreement or applicable law. The
Collateral Agent agrees to give to each Bank prompt notice of each notice given
to it by the Borrower pursuant to the terms of this Agreement.

     SECTION 8.9. Collateral Agent's Reliance, Etc. Neither the Collateral Agent
nor any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Collateral Agent: (i) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (ii)
makes no warranty or representation to any Bank and shall not be responsible to
any Bank for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement or any other Credit Document;
(iii) shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of this Agreement or
any other Credit Document on the part


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<PAGE>

of the Borrower or any Guarantor or to inspect the property (including the books
and records) of the Borrower or any Guarantor; (iv) shall not be responsible to
any Bank for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto or thereto; (v) shall incur no liability under or in
respect of any Note, Letter of Credit or this Agreement by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopier, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties; and (vi) may treat any Issuing Bank that
issues or has issued a Letter of Credit as being the issuer of such Letter of
Credit for all purposes.

     SECTION 8.10. Collateral Agent and Its Affiliates. With respect to any
Letter of Credit Interest held by it, each Bank which is also the Collateral
Agent shall have the same rights and powers under the Credit Documents as any
other Bank and may exercise the same as though it were not the Collateral Agent;
and the term "Bank" or "Banks" shall, unless otherwise expressly indicated,
include any Bank serving as the Collateral Agent in its individual capacity. Any
Bank serving as the Collateral Agent and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with, the
Borrower, any of the Subsidiaries and any Person who may do business with or own
securities of the Borrower or any Subsidiary, all as if such Bank were not the
Collateral Agent and without any duty to account therefor to the Banks.

     SECTION 8.11. Bank Credit Decision. Each of the Banks and the other
beneficiaries of any Security Document parties hereto (both on its own behalf
and on behalf of any of its affiliates that is a beneficiary of any Security
Document) acknowledges that it has, independently and without reliance upon the
Collateral Trustee, Collateral Agent, Agent, the Arranger, the Issuing Banks or
any other Bank and based on the financial statements referred to in Section
4.1(e) and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each of
the Banks and the other beneficiaries of any Security Document parties hereto
(both on its own behalf and on behalf of any of its Affiliates that is a
beneficiary of any Security Document) also acknowledges that it will,
independently and without reliance upon the Collateral Trustee, Collateral
Agent, Agent, the Arranger, the Issuing Banks 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 action under
this Agreement and the other Credit Documents. Neither the Collateral Trustee
nor the Collateral Agent shall have any duty or responsibility, either initially
or on a continuing basis, to provide any Person with any credit or other
information with respect thereto, whether coming into its possession before the
issuance of any Letter of Credit or at any time or times thereafter.

     SECTION 8.12. Certain Rights of the Collateral Agent. If the Collateral
Agent shall request instructions from the Majority Banks with respect to any act
or action (including failure to act) in connection with this Agreement or any
other Credit Document, the Collateral Agent shall be entitled to refrain from
such act or taking such action unless and until the Collateral Agent shall have
received instructions from the Majority Banks; and it shall not incur liability
to any Person by reason of so refraining. Without limiting the foregoing, no
Bank nor any beneficiary of any Security Document shall have any right of action
whatsoever against the Collateral Agent as a result of its acting or refraining
from acting hereunder or under any other


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<PAGE>
Loan Document in accordance with the instructions of the Majority Banks or all
of the Banks, as the case may be. Furthermore, except for action expressly
required of the Collateral Agent hereunder, the Collateral Agent shall in all
cases be fully justified in failing or refusing to act hereunder unless it shall
be specifically indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.

     SECTION 8.13. Collateral Agent Indemnification. The Banks agree to
indemnify the Collateral Agent (to the extent not reimbursed by the Borrower),
including to the extent the Collateral Agent is acting in its capacity as
"Collateral Trustee" under the Collateral Trust Agreement or as "Surety
Administrative Agent" under the Midstream Guaranty, ratably according to the
respective principal amounts of the Letter of Credit Interests then held by each
of them (or if no Letter of Credit Interests are at the time outstanding,
ratably according to their LC Participation Percentage), from and against any
and all claims, damages, losses, liabilities and expenses (including reasonable
fees and disbursements of counsel) of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Collateral Agent in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Collateral Agent under this Agreement or any other Credit Document
(EXPRESSLY INCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE
ATTRIBUTABLE TO THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF THE COLLATERAL
AGENT, BUT EXCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE
ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE COLLATERAL
AGENT). IT IS THE INTENT OF THE PARTIES HERETO THAT THE COLLATERAL AGENT SHALL,
TO THE EXTENT PROVIDED IN THIS SECTION 8.13, BE INDEMNIFIED FOR ITS OWN
ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE. Without limitation of the foregoing,
each Bank agrees to reimburse the Collateral Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
the Collateral Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under this Agreement to the extent that the
Collateral Agent is not reimbursed for such expenses by the Borrower.

     SECTION 8.14. Successor Collateral Agent. The Collateral Agent may resign
at any time as Collateral Agent under this Agreement by giving written notice
thereof to the Banks and the Borrower and may be removed at any time with or
without cause by the Majority Banks. Upon any such resignation or removal, the
Majority Banks shall have the right to appoint, with the consent of the Borrower
(which consent shall not be unreasonably withheld and shall not be required if
an Event of Default exists), a successor Collateral Agent from among the Banks.
If no successor Collateral Agent shall have been so appointed by the Majority
Banks with such consent, and shall have accepted such appointment, within 30
days after the retiring Collateral Agent's giving of notice of resignation or
the Majority Banks' removal of the retiring Collateral Agent, then the retiring
Collateral Agent may, on behalf of the Banks, appoint a successor Collateral
Agent, which shall be a Bank which is a commercial bank organized under the laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Collateral Agent under this Agreement by a successor Collateral
Agent, such successor Collateral Agent shall thereupon


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<PAGE>
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent and shall function as the Collateral Agent
under this Agreement, and the retiring Collateral Agent shall be discharged from
its duties and obligations as Collateral Agent under this Agreement. After any
retiring Collateral Agent's resignation or removal hereunder as Collateral
Agent, the provisions of this Article VIII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Collateral Agent under
this Agreement.

     SECTION 8.15. Other Agents; the Arranger. The other agents, the Collateral
Trustee, and the Arranger have no duties or obligations under this Agreement.
None of the other agents, the Collateral Trustee, nor the Arranger shall have,
by reason of this Agreement or the other Credit Documents, a fiduciary
relationship in respect of any Bank, and nothing in this Agreement or other
Credit Documents, express or implied, is intended or shall be so construed to
impose on any of the other agents or the Arranger any obligation in respect of
this Agreement or other Credit Documents.

                                   ARTICLE IX
                                  MISCELLANEOUS

     SECTION 9.1. Amendments, Etc. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Majority Banks, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Banks, do any of the following: (a) waive any of the
conditions specified in Article III, (b) increase the Letter of Credit
Commitments of the Issuing Banks or subject any Bank to any additional
obligation, (c) reduce the Reimbursement Obligations or any fees or other
amounts payable hereunder, (d) postpone any date fixed for any payment of the
Reimbursement Obligations or any fees or other amounts payable hereunder, (e)
take any action which requires the signing of all the Banks pursuant to the
terms of this Agreement, (f) change the definition of Majority Banks or
otherwise change the LC Participation Percentages or of the aggregate unpaid
principal amount of the Letter of Credit Liabilities or the Reimbursement
Obligations, or the number of Banks, which shall be required for the Banks or
any of them to take any action under this Agreement, (g) release any of the
Collateral (except as contemplated by the terms of Section 5.2(e) and Schedule
XIV on the date hereof), or (h) amend, waive any provision of, or consent to any
departure by the Borrower from, Section 2.3(b) or this Section 9.1; and provided
further that no amendment, waiver or consent shall, unless in writing and signed
by the Agent in addition to the Banks required above to take such action, affect
the rights or duties of the Agent under any Credit Document; and provided
further that no amendment, waiver or consent shall, unless in writing and signed
by each Issuing Bank in addition to the Banks required above to take such
action, affect the rights or duties of any Issuing Bank under any Credit
Document; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by the Collateral Agent in addition to the Banks
required above to take such action, affect the rights or duties of the
Collateral Agent under any Credit Document.

     SECTION 9.2. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telecopy communication) and mailed,
telecopied or


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delivered, if to any Bank, as specified opposite its name on Schedule I hereto
or specified in a Transfer Agreement for any assignee Bank delivered pursuant to
Section 9.6(a); if to the Borrower, as specified opposite its name on Schedule
II hereto; if to an Issuing Bank to its address as specified opposite its name
on Schedule I; and if to Citicorp, as Agent or Collateral Agent, to its address
at 2 Penns Way, Suite 200, New Castle, Delaware 19720 (telecopier number: (302)
894-6120), Attention: Williams Account Officer, with a copy to Citicorp North
America, Inc., 1200 Smith Street, Suite 2000, Houston, Texas 77002 (telecopier
number: (713) 654-2849), Attention: The Williams Companies, Inc. Account
Officer, or, as to the Borrower, any Issuing Bank, the Collateral Agent, or the
Agent, at such other address as shall be designated by such party in a written
notice to the other parties and, as to each other party, at such other address
as shall be designated by such party in a written notice to the Borrower, each
Issuing Bank, the Collateral Agent and the Agent. All such notices and
communications shall, when mailed or telecopied, be effective when received in
the mail, sent by telecopier to any party to the telecopier number as set forth
herein or on Schedule I or Schedule II or specified in a Transfer Agreement for
any assignee Bank delivered pursuant to Section 9.6(a) (or other telecopy number
specified by such party in a written notice to the other parties hereto),
respectively, except that notices and communications to the Agent shall not be
effective until received by the Agent. Any notice or communication to a Bank
shall be deemed to be a notice or communication to any SPC designated by such
Bank and no further notice to an SPC shall be required. Delivery by telecopier
of an executed counterpart of this Agreement or of any amendment or waiver of
any provision of this Agreement or any other Credit Document (other than a
Letter of Credit) shall be effective as delivery of a manually executed
counterpart thereof.

     SECTION 9.3. No Waiver; Remedies. No failure on the part of any Bank, the
Collateral Agent, the Collateral Trustee, any Issuing Bank, the Agent, the
Collateral Trustee, the Surety Administrative Agent, any Issuing Bank or the
Agent to exercise, and no delay in exercising, any right under this Agreement or
any other Credit Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies provided in
this Agreement are cumulative and not exclusive of any remedies provided by law.

     SECTION 9.4. Costs and Expenses.

     (a) (i) the Borrower agrees to pay on demand all reasonable out-of-pocket
costs and expenses of the Arranger and the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, the other Credit Documents and the other documents to be
delivered under this Agreement, including 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 under this Agreement
and any other Credit Document, the reasonable costs and expenses of the Issuing
Banks in connection with any Letter of Credit, the reasonable costs and expenses
of the Collateral Agent and all amounts paid by the Collateral Agent pursuant to
any Security Document, and (ii) the Borrower agrees to pay on demand all costs
and expenses, if any (including reasonable counsel fees and expenses, which may
include allocated costs of in-house counsel), of the Agent, the Collateral
Agent, the Issuing Banks and each Bank in connection with the enforcement
(whether before or after the occurrence of an Event of Default and whether
through negotiations


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(including formal workouts or restructurings), legal proceedings or otherwise)
against the Borrower or any Guarantor of any Credit Document.

     (b) The Borrower agrees, to the fullest extent permitted by law, to
indemnify and hold harmless the Agent, the Collateral Agent, the Issuing Banks,
other agents, the Arranger and each Bank and each of their respective directors,
officers, employees and agents (the "Indemnified Parties") from and against any
and all claims, damages, losses, liabilities and expenses (including reasonable
fees and disbursements of counsel) of any kind or nature whatsoever for which
any of them may become liable or which may be incurred by or asserted against
any of the Indemnified Parties (other than by another Bank or any successor or
assign of another Bank), in each case in connection with or arising out of or by
reason of any investigation, litigation, or proceeding, whether or not any of
the Indemnified Parties is a party thereto, arising out of, related to or in
connection with this Agreement or any transaction in which any proceeds of all
or any part of Letters of Credit are applied (EXPRESSLY INCLUDING ANY SUCH
CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE ORDINARY, SOLE OR
CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNIFIED PARTY, BUT EXCLUDING ANY SUCH CLAIM,
DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY). IT IS THE INTENT OF THE PARTIES
HERETO THAT EACH INDEMNIFIED PARTY SHALL, TO THE EXTENT PROVIDED IN THIS SECTION
9.4(b), BE INDEMNIFIED FOR ITS OWN ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE.

     SECTION 9.5. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.1 to authorize the Agent to
declare the Reimbursement Obligations due and payable pursuant to the provisions
of Section 6.1, each Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Bank to or for the credit
or the account of the Borrower against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement and the other Credit
Documents, if any, held by such Bank, irrespective of whether or not such Bank
shall have made any demand under this Agreement or the other Credit Documents
and although such obligations may be unmatured. Each Bank agrees promptly to
notify the Borrower after such set-off and application made by such Bank,
provided, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Bank under this Section are in
addition to other rights and remedies (including other rights of set-off) which
such Bank may have.

     SECTION 9.6. Binding Effect; Transfers.

     (a) This Agreement shall become effective when it shall have been executed
by the Borrower, the Agent, the Collateral Agent and the Issuing Banks, and when
each Bank listed on the signature pages hereof has delivered an executed
counterpart hereof to the Agent, has sent to the Agent a facsimile copy of its
signature hereon or has notified the Agent that such Bank has executed this
Agreement and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agent, the Collateral Agent, the Issuing Banks and each Bank and
their


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respective successors and assigns; provided, that the Borrower shall not have
the right to assign any of its rights hereunder or any interest herein without
the prior written consent of the Agent. Each Bank may assign to one or more
banks, financial institutions or other entities all or a portion of its rights
and obligations under this Agreement (including all or a portion of its Letter
of Credit Commitments or its Letter of Credit Interest); provided, however, that
(i) each such assignment shall be of a constant, and not a varying, percentage
of all rights and obligations under this Agreement, (ii) except in the case of
an assignment of all of a Bank's rights and obligations under this Agreement or
an assignment to another Bank, the amount of the Letter of Credit Commitment
and/or LC Participation Percentage of the assigning Bank being assigned pursuant
to each such assignment (determined as of the date of the Transfer Agreement
with respect to such assignment) shall in no event be less than $5,000,000 in
the aggregate or such lesser amount as may be consented to by the Agent and the
Borrower, (iii) each such assignment shall be to an Eligible Assignee, and (iv)
the parties to each such assignment shall execute and deliver to the Agent, for
its acceptance and recording in the Register maintained by the Agent, a Transfer
Agreement and, unless the assignment is to an affiliate of such Bank, a
processing and recordation fee of $3,500. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Transfer Agreement, (x) the assignee thereunder shall be a party hereto as a
"Bank" and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Transfer Agreement, have the rights and
obligations of a Bank hereunder (including obligations to the Agent pursuant to
Section 8.6 and to the Collateral Agent pursuant to Section 8.13) and (y) the
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Transfer Agreement,
relinquish its rights and be released from its obligations under this Agreement,
except for rights and obligations which continue after repayment of the
Reimbursement Obligations or termination of this Agreement pursuant to the
express terms of this Agreement (and, in the case of a Transfer Agreement
covering all of an assigning Bank's rights and obligations under this Agreement,
such Bank shall cease to be a party hereto).

     (b) By executing and delivering a Transfer Agreement, the Bank assignor
thereunder and the assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than as provided in such Transfer
Agreement, such assigning Bank makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
(whether written or oral) made in or in connection with this Agreement, any
other Credit Document or any other instrument or document furnished pursuant
hereto or in connection herewith, the perfection, existence, sufficiency or
value of any Collateral, guaranty or insurance or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Credit
Document or any other instrument or document furnished pursuant hereto or in
connection herewith; (ii) such assigning Bank makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any other Person or the performance or observance by the
Borrower or any other Person of any of its respective obligations under the
Credit Documents or any other instrument or document furnished pursuant hereto
or in connection herewith; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of such financial statements and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Transfer Agreement; (iv)
such assignee will, independently and without reliance upon the Agent, the
Collateral Agent, any Issuing Bank, such assigning Bank or any other Bank and
based on such financial statements and such other documents and


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information as it shall deem appropriate at the time, continue to make its own
credit analysis and decisions in taking or not taking action under this
Agreement, any of the other Credit Documents or any other instrument or
document; (v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Agent and the Collateral Agent,
respectively, to act as Agent and the Collateral Agent, respectively, on its
behalf and to exercise such powers and discretion under this Agreement, any
other Credit Document or any other document executed in connection herewith or
therewith as are delegated to the Agent and the Collateral Agent, respectively,
by the terms hereof or thereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Bank.

     (c) The Agent shall maintain a copy of each Transfer Agreement,
delivered to and accepted by it and the Register for the recordation of the
names and addresses of the Banks and the Letter of Credit Commitment, LC
Participation Percentage and Letter of Credit Interest of each Bank from time to
time.

     (d) Upon its receipt of a Transfer Agreement executed and completed by an
assigning Bank and an assignee representing that it is an Eligible Assignee (and
consented to by the Agent and, if required, by the Borrower), the Agent shall
(i) accept such Transfer Agreement, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.

     (e) Each Bank may sell participations to one or more banks or other
entities (other than the Borrower or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Letter of Credit Interest); provided, however, that (i) such
Bank's obligations under this Agreement shall remain unchanged, (ii) such Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) the Borrower, the Agent, the Collateral Agent, each
Issuing Bank and the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement, (iv) all amounts payable under this Agreement shall be calculated as
if such Bank had not sold such participation, and (v) the terms of any such
participation shall not restrict such Bank's ability to consent to any departure
by the Borrower herefrom without the approval of the participant, except that
the approval of the participant may be required to the extent that such
amendment, waiver or consent would reduce the principal of, or interest on, the
Reimbursement Obligations or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, or postpone any date
fixed for any payment of principal of, or interest on, the Reimbursement
Obligations or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation.

     (f) Notwithstanding any other provisions set forth in this Agreement, any
Bank may at any time create a security interest in all or any portion of its
rights under this Agreement (including its Letter of Credit Interest) in favor
of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Board without notice to or consent of the Borrower or the Agent.
Furthermore, any Bank may assign, as collateral or otherwise, any of its rights
(including rights to payments of principal of and/or interest on its Letter of
Credit Interest)


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under this Agreement or any of its Letter of Credit Interest to any Federal
Reserve Bank without notice to or consent of the Borrower or the Agent.

     (g) Notwithstanding anything to the contrary contained herein, any Bank (a
"Designating Bank") with the consent of the Agent (and, if no Event of Default
has occurred and is continuing, the Borrower) may grant to a special purpose
funding vehicle (an "SPC"), identified as such in writing from time to time by
the Designating Bank to the Agent and the Borrower, the option to fund all or
any part of any payment to any Issuing Bank which the Designating Bank has
agreed to make; provided that no Designating Bank shall have granted at any one
time such option to more than one SPC; and provided further that (i) such
Designating Bank's obligations under this Agreement shall remain unchanged, (ii)
such Designating Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the Borrower, the Issuing
Banks, the Collateral Agent, the Agent and the other Banks shall continue to
deal solely and directly with such Designating Bank in connection with such
Designating Bank's rights and obligations under this Agreement, (iv) any such
option granted to an SPC shall not constitute a commitment by such SPC to fund
any drawing under a Letter of Credit, and (v) neither the grant nor the exercise
of such option to an SPC shall increase the costs or expenses or otherwise
increase or change the obligations of the Borrower under this Agreement
(including its obligations under Section 2.6). The issuance of a Letter of
Credit by an SPC hereunder shall utilize the Letter of Credit Commitment of the
Designating Bank to the same extent, and as if, such Letter of Credit were
issued by such Designating Bank. Each party hereto hereby agrees that no SPC
shall be liable for any indemnity or similar payment obligation under this
Agreement to the extent that any such indemnity or similar payment obligations
shall have been paid by its Designating Bank. In furtherance of the foregoing,
each party hereto hereby agrees (which agreement shall survive the termination
of this Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper or other senior
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States. In
addition, notwithstanding anything to the contrary contained in this Section
9.6, an SPC may not assign its interest in any Letter of Credit Interests except
that, with notice to, but without the prior written consent of, the Borrower and
the Agent and without paying any processing fee therefor, such SPC may assign
all or a portion of its interests in any Letter of Credit Interests to the
Designating Bank or to any financial institutions (consented to by the Borrower
and Agent), providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Letter of Credit Interests.
Each Designating Bank shall serve as the agent of its SPC and shall on behalf of
its SPC: (i) receive any and all payments made for the benefit of such SPC and
(ii) give and receive all communications and notices, and vote, approve or
consent hereunder, and take all actions hereunder, including votes, approvals,
waivers, consents and amendments under or relating to this Agreement and the
other Credit Documents. Any such notice, communication, vote, approval, waiver,
consent or amendment shall be signed by the Designating Bank for the SPC and
need not be signed by such SPC on its own behalf. The Borrower, the Issuing
Banks, the Collateral Agent, the Agent and the Banks may rely thereon without
any requirement that the SPC sign or acknowledge the same or that notice be
delivered to the Borrower or the SPC. This Section 9.6(g) may not be amended
without the written consent of any SPC, which shall have been identified to the
Agent and the Borrower.

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          SECTION 9.7. Judgment Currency. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due from the Borrower
hereunder in Canadian Dollars into Dollars, the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the Agent
could purchase the Canadian Dollars with Dollars at the Agent's main New York
office on the Business Day preceding that on which final, non-appealable
judgment is given. The obligations of the Borrower in respect of any sum due in
Canadian Dollars to any Bank, any Issuing Bank, the Collateral Agent or the
Agent hereunder shall, notwithstanding any judgment in Dollars, be discharged
only to the extent that on the Business Day following receipt by such Bank, such
Issuing Bank, the Collateral Agent or the Agent (as the case may be) of any sum
adjudged to be so due in Dollars, such Bank, Issuing Bank, the Collateral Agent
or the Agent (as the case may be) may in accordance with normal, reasonable
banking procedures purchase the Canadian Dollars with Dollars. If the amount of
the Canadian Dollars so purchased is less than the sum originally due to such
Bank, Issuing Bank, the Collateral Agent or the Agent, as the case may be, in
the Canadian Dollars, the Borrower agrees, to the fullest extent that it may
effectively do so, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank, such Issuing Bank, the Collateral Agent or the
Agent, as the case may be, against such loss, and if the amount of Canadian
Dollars so purchased exceeds the sum originally due to such Bank, such Issuing
Bank, the Collateral Agent or the Agent, as the case may be, in Canadian
Dollars, such Bank, such Issuing Bank, the Collateral Agent or the Agent, as the
case may be, agrees to remit such excess to the Borrower.

          SECTION 9.8. Governing Law. This Agreement and the other Credit
Documents shall be governed by, and construed in accordance with, the laws of
the State of New York, except that Mortgages and Additional Mortgages may, to
the extent provided therein, be governed by and construed in accordance with the
laws of the respective states in which the real property covered thereby is
located.

          SECTION 9.9. Interest. It is the intention of the parties hereto that
the Agent, each Issuing Bank, the Collateral Agent and each Bank shall conform
strictly to usury laws applicable to it, if any. Accordingly, if the
transactions with the Agent, any Issuing Bank, the Collateral Agent or any Bank
contemplated hereby would be usurious under applicable law, then, in that event,
notwithstanding anything to the contrary in this Agreement or any other
agreement entered into in connection with or as security for this Agreement, it
is agreed as follows: (i) the aggregate of all consideration which constitutes
interest under applicable law that is contracted for, taken, reserved, charged
or received by the Agent, such Issuing Bank, the Collateral Agent or such Bank,
as the case may be, under this Agreement, any other Credit Document or under any
other agreement entered into in connection with or as security for this
Agreement or the other Credit Documents shall under no circumstances exceed the
maximum amount allowed by such applicable law and any excess shall be canceled
automatically and, if theretofore paid, shall at the option of the Agent, such
Issuing Bank, the Collateral Agent or such Bank, as the case may be, be credited
by the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case
may be, on the principal amount of the obligations owed to the Agent, such
Issuing Bank, the Collateral Agent or such Bank, as the case may be, by the
Borrower or refunded by the Agent, such Issuing Bank, the Collateral Agent or
such Bank, as the case may be, to the Borrower, and (ii) in the event that the
maturity of any obligation payable to the Agent, such Issuing Bank, the
Collateral Agent or such Bank, as the case may be, is accelerated or in the


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event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to the Agent, such Issuing Bank, the
Collateral Agent or such Bank, as the case may be, may never include more than
the maximum amount allowed by such applicable law and excess interest, if any,
to the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case
may be, provided for in this Agreement or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall, at the option of the Agent, such Issuing Bank, the
Collateral Agent or such Bank, as the case may be, be credited by the Agent,
such Issuing Bank, the Collateral Agent or such Bank, as the case may be, on the
principal amount of the obligations owed to the Agent, such Issuing Bank, the
Collateral Agent or such Bank, as the case may be, by the Borrower or refunded
by the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case
may be, to the Borrower.

          SECTION 9.10. Execution in Counterparts. This Agreement 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 9.11. Survival of Agreements, Representations and Warranties,
Etc. All warranties, representations and covenants made by the Borrower or any
officer of the Borrower herein or in any certificate or other document delivered
in connection with this Agreement shall be considered to have been relied upon
by the Banks and shall survive the issuance of any Letters of Credit regardless
of any investigation. The indemnities and other payment obligations of the
Borrower set forth in Sections 2.4, 2.6 and 9.4, the indemnities set forth in
Section 2.10 and the indemnities by the Banks in favor of the Agent, the
Collateral Agent and their respective officers, directors, employees and agents,
will survive the repayment of the Reimbursement Obligations and the termination
of this Agreement.

          SECTION 9.12. [INTENTIONALLY OMITTED.]

          SECTION 9.13. Confidentiality. Each Bank agrees that it will not
disclose without the prior consent of the Borrower (other than to employees,
auditors, accountants, counsel or other professional advisors of the Agent or
any Bank) any information with respect to the Borrower or its Subsidiaries
(which term shall be deemed to include the WCG Subsidiaries for purposes of this
Section 9.13), which is furnished pursuant to this Agreement and which (i) the
Borrower in good faith considers to be confidential and (ii) is either clearly
marked confidential or is designated by the Borrower to the Agent and the Banks
in writing as confidential, provided that any Bank may disclose any such
information (a) as has become generally available to the public, (b) as may be
required or appropriate in any report, statement or testimony submitted to or
required by any municipal, state or Federal regulatory body having or claiming
to have jurisdiction over such Bank or submitted to or required by the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena in
connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Bank, (e) to the prospective transferee
or grantee in connection with any contemplated transfer of any of the Letter of
Credit Commitments or Letter of Credit Interests or any interest therein by such
Bank or the grant of an option to an SPC to fund any drawing under a Letter of
Credit, provided that such prospective transferee


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executes an agreement with or for the benefit of the Borrower containing
provisions substantially identical to those contained in this Section 9.13, and
provided further that if the contemplated transfer is a grant of an option to
fund a drawing under a Letter of Credit to an SPC pursuant to Section 9.6(g),
such SPC may disclose (i) on a confidential basis, any non-public information
relating to such drawings funded by it to any rating agency, commercial paper
dealer or provider of any surety, guaranty or credit or liquidity enhancement to
such SPC, and (ii) if prior notice of the delivery thereof is given to the
Borrower, such information as may be required by law or regulation to be
delivered, (f) in connection with the exercise of any remedy by such Bank
following an Event of Default pertaining to this Agreement, any of the other
Credit Documents or any other document delivered in connection herewith, (g) in
connection with any litigation involving such Bank pertaining to this Agreement,
any of the other Credit Documents or any other document delivered in connection
herewith, (h) to any Bank, any Issuing Bank, the Collateral Agent or the Agent,
or (i) to any affiliate of any Bank, provided that such affiliate executes an
agreement with or for the benefit of the Borrower containing provisions
substantially identical to those contained in this Section 9.13.

          SECTION 9.14. Waiver of Jury Trial. THE BORROWER, THE AGENT, THE
COLLATERAL AGENT, THE ISSUING BANK AND THE BANKS HEREBY IRREVOCABLY WAIVE ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, ANY LETTER OF CREDIT OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

          SECTION 9.15. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY
CREDIT DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE BANKS, ANY ISSUING BANK ,
THE COLLATERAL AGENT OR THE BORROWER IN CONNECTION HEREWITH OR THEREWITH MAY BE
BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE
COUNTY OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION,
IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 9.2. THE BORROWER HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY
SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT
THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, THE


                                       81
<PAGE>


BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE CREDIT DOCUMENTS.

          SECTION 9.16. Existing Defaults of No Effect. Any default which has
occurred and is continuing under the Existing Agreement, if any, shall, upon the
satisfaction of the conditions set forth in Section 3.1, be deemed to be fully
and completely remedied and of no further force and effect, except to the extent
that the event or condition causing such default shall constitute a Default or
an Event of Default under this Agreement.



                                       82
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                    BORROWER:

                                    THE WILLIAMS COMPANIES, INC.

                                    By:    /s/ James G. Ivey
                                    Name:  James G. Ivey
                                    Title: Treasurer


<PAGE>



                                    CITICORP USA, INC., as Agent and Collateral
                                    Agent

                                    By:    /s/ Todd J. Mogil
                                    Name:  Todd J. Mogil
                                    Title: Vice President


<PAGE>


                                    CITIBANK, N.A. as Issuing Bank

                                    By:    /s/ Todd J. Mogil
                                    Name:  Todd J. Mogil
                                    Title: Vice President


<PAGE>


                                    BANKS:

                                    CITICORP USA, INC.

                                    By:    /s/ Todd J. Mogil
                                    Name:  Todd J. Mogil
                                    Title: Vice President


<PAGE>


                                    BANK OF AMERICA N.A., as Issuing Bank and
                                    Bank

                                    By:    /s/ Claire M. Liu
                                    Name:  Claire M. Liu
                                    Title: Managing Director


<PAGE>


                                    JPMORGAN CHASE BANK

                                    By:    /s/ Robert W. Traband
                                    Name:  Robert W. Traband
                                    Title: Vice President


<PAGE>


                                    TORONTO DOMINION (TEXAS), INC.

                                    By:    /s/ Jill Hall
                                    Name:  Jill Hall
                                    Title: Vice President


<PAGE>


                                    CREDIT LYONNAIS NEW YORK BRANCH

                                    By:    /s/ Olivier Audemard
                                    Name:  Olivier Audemard
                                    Title: Senior Vice President


<PAGE>


                                    THE BANK OF NOVA SCOTIA

                                    By:
                                    Name:
                                    Title:


<PAGE>


                                    MERRILL LYNCH CAPITAL CORP.

                                    By:    /s/ Carol J.E. Feeley
                                    Name:  Carol J.E. Feeley
                                    Title: Vice President


<PAGE>


                                    LEHMAN COMMERCIAL PAPER INC.

                                    By:    /s/ Francis Chang
                                    Name:  Francis Chang
                                    Title: Authorized Signatory



<PAGE>



                                   SCHEDULE I

                           APPLICABLE LENDING OFFICES


Name of Bank                  Lending Office
- ------------                  --------------

Citibank N.A.                 Citibank N.A.
                              399 Park Avenue
                              New York, New York 10043

                              Notices:
                              Citibank, N.A.
                              2 Penns Way, Suite 200
                              New Castle, Delaware 19720
                              Telecopier: (302) 894-6120
                              Attn:  The Williams Companies, Inc.
                              Account Officer

                              with copies to:
                              Citicorp North America, Inc.
                              1200 Smith Street, Suite 2000
                              Houston, Texas 77002
                              Telecopier: (713) 654-2849
                              Attn:  The Williams Companies, Inc.
                              Account Officer

Citicorp USA, Inc.            Citicorp USA, Inc.
                              399 Park Avenue
                              New York, New York 10043

                              Notices:
                              Citicorp USA, Inc.
                              399 Park Avenue
                              New York, New York 10043
                              Telecopier: (302) 894-6120
                              Attn:  The Williams Companies, Inc.
                              Account Officer

                              with copies to:
                              Citicorp North America, Inc.
                              1200 Smith Street, Suite 2000
                              Houston, Texas 77002
                              Telecopier: (713) 654-2849
                              Attn:  The Williams Companies, Inc.
                              Account Officer

The Bank of Nova Scotia       The Bank of Nova Scotia
                              600 Peachtree Street, N.E., Suite 2700
                              Atlanta, Georgia 30308
                              Telecopier: (404) 888-8998
                              Telephone: (404) 877-1555
                              Attn: Cleve Boushey


                                       83
<PAGE>

Name of Bank                  Lending Office
- ------------                  --------------

                              with copies to:
                              1100 Louisiana, Suite 3000
                              Houston, Texas 77002
                              Telecopier: (713) 752-2425
                              Telephone: (713) 759-3435
                              Attn: Joe Lattanzi

                              Telecopier: (713) 752-2425
                              Telephone: (713) 759-3426
                              Attn: John Frazell

Bank of America, N.A.         Bank of America, N.A.
                              901 Main Street, 14th Floor
                              Dallas, Texas 75202
                              Telecopier: (214) 290-9415
                              Telephone: (214) 209-1228
                              Attn:  Marija Salic

                              with copies to:
                              Bank of America, N.A.
                              Three Allen Center, Suite 4550
                              Houston, Texas 77002
                              Telecopier: (713) 651-4807
                              Telephone: (713) 651-4855
                              Attn:  Claire Liu

JPMorgan Chase Bank           JPMorgan Chase Bank
                              270 Park Avenue, 23rd Floor
                              New York, New York 10017
                              Telecopier: (212) 270-3089
                              Telephone: (212) 270-7056
                              Attn: Steve Wood

Credit Lyonnais               Credit Lyonnais
New York Branch               1301 Travis, Suite 2100
                              Houston, Texas 77002
                              Telecopier: (713) 890-8666
                              Telephone: (713) 890-8605
                              Attn: Rich Kaufman

                              Telecopier: (713) 751-0307
                              Telephone: (713) 753-8741
                              Attn:  Ericka Jackson

Toronto Dominion              Toronto Dominion (Texas), Inc.
(Texas), Inc.                 909 Fannin Street, 17th Floor
                              Houston, Texas 77010
                              Swift Address: TDOMU S4H
                              Telecopier: (713) 951-9921
                              Attn: Ann Slanis

Merrill Lynch Capital Corp.   Merrill Lynch Capital Corp.
                              4 World Financial Center, 7th Floor



                                       84
<PAGE>

Name of Bank                  Lending Office
- ------------                  --------------

                              New York, New York 10080
                              Telecopier: (212) 738-1649
                              Telephone: (212) 449-8414
                              Attn: Carol Seely (Notices)

                              Telecopier: (212) 738-1719
                              Telephone: (212) 449-6996
                              Attn: Mark Campbell (Operations)

Lehman  Commercial            Lehman Commercial Paper Inc.
Paper Inc.                    745 Seventh Avenue, 19th Floor
                              New York, NY 10019
                              Telecopier: (212) 526-0242/7691
                              Telephone: (212) 526-0330
                              Attn: Michele Swanson (Credit)

                              Telecopier: (212) 526-6653
                              Telephone: (212) 526-3321
                              Attn: Marie Cowell (Operations)


                                       85
<PAGE>





                                   SCHEDULE II

                              BORROWER INFORMATION


Name of Borrower                             Information for Notices
- ----------------                             -----------------------

The Williams Companies, Inc.                 The Williams Companies, Inc.
                                             One Williams Center, Suite 5000
                                             Tulsa, Oklahoma  74172
                                             Attention: Patti J. Kastl
                                             Telecopier: (918) 573-2065
                                             Telephone: (918) 573-2172


<PAGE>

                                  SCHEDULE III

                            PERMITTED BORROWER LIENS


(a) (i) Any Lien existing on any property at the time of the acquisition thereof
and not created in contemplation of such acquisition by the Borrower or any of
its Subsidiaries, whether or not assumed by the Borrower or any of its
Subsidiaries, (ii) purchase money, construction or analogous Liens securing
obligations incurred in connection with or financing the direct or indirect
costs of or relating to the acquisition, construction (including design,
engineering, installation, testing and other related activities), development
(including drilling), improvement, repair or replacement of property (including
such Liens securing Debt or other obligations incurred in connection with the
foregoing or within 30 days of the later of (x) the date on which such Property
was acquired or construction, development, improvement, repair or replacement
thereof was complete or (y) if applicable, the final "in service" date for
commencement of full operations of such property), provided that all such Liens
attach only to the property acquired, constructed, developed, improved or
repaired or constituting replacement property, and the principal amount of the
Debt or other obligations secured by such Lien, together with the principal
amount of all other Debt secured by a Lien on such property, shall not exceed
the gross acquisition, construction, replacement and other costs specified above
of or for the property, (iii) Liens on receivables created pursuant to a sale,
securitization or monetization of such receivables, and Liens on rights of the
Borrower or any Subsidiary related to such receivables which are transferred to
the purchaser of such receivables in connection with such sale, securitization
or monetization; provided that the Liens secure only the obligations of the
Borrower or any of its Subsidiaries in connection with such sale, securitization
or monetization, (iv) Liens created by or reserved in any operating lease
(whether for real or personal property) entered into in the ordinary course of
business (excluding Synthetic Leases) provided that the Liens created thereby
(1) attach only to the Property leased to the Borrower or one of its
Subsidiaries, pursuant to such operating lease and (2) secure only the
obligations under such lease and supporting documents that do not create
obligations other than with respect to the leased property (including for rent
and for compliance with the terms of the lease), (v) Liens on property subject
to a Capital Lease created by such Capital Lease and securing only obligations
under such Capital Lease and supporting documents that do not create obligations
other than with respect to the leased property, (vi) any interest or title of a
lessor in the property subject to any Capital Lease, Synthetic Lease or
operating lease, (vii) Liens in the form of filed Uniform Commercial Code or
personal property security statements (or similar filings outside Canada and the
United States) to perfect any Permitted Lien, and (viii) Liens on up to four
aircraft owned or leased by the Borrower or any Subsidiary of the Borrower.

(b) Any Lien existing on any property of a Subsidiary of the Borrower at the
time it becomes a Subsidiary of the Borrower and not created in contemplation
thereof and any Lien existing on any property of any Person at the time such
Person is merged or liquidated into or consolidated with the Borrower or any
Subsidiary thereof and not created in contemplation thereof.

(c) Mechanics', materialmen's, workmen's, warehousemen's, carrier's, landlord's
or other similar Liens arising in the ordinary course of business securing
amounts incurred in the ordinary

<PAGE>

course of business which are not more than 90 days past due or are being
contested in good faith by appropriate proceedings.

(d) Liens arising by reason of pledges, deposits or other security to secure
payment of workmen's compensation insurance or unemployment insurance, pension
plans or systems and other types of social security, and good faith deposits or
other security to secure tenders or leases of property or bids, in each case to
secure obligations of the Borrower or any of its Subsidiaries under such
insurance, tender, lease, bid or contract, as the case may be; provided,
however, that the only Liens permitted by this paragraph (d) shall be Liens
incurred in the ordinary course of business that do not secure any Debt or
accounts payable (other than accounts payable to the counterparties or obligees
applicable to the foregoing).

(e) Liens on deposits or other security given to secure public or statutory
obligations, or to secure or in lieu of surety bonds (other than appeal bonds)
and deposits as security for the payment of taxes or assessments or other
similar charges, in each case to secure obligations of the Borrower or any of
its Subsidiaries arising in the ordinary course of business; provided, however,
that the aggregate amount of obligations secured by Liens permitted by this
paragraph (e) shall not exceed 10% of Consolidated Tangible Net Worth of the
Borrower.

(f) Any Lien arising by reason of deposits with or the giving of any form of
security to any governmental agency or any body created or approved by law or
governmental regulation for any purpose at any time as required by law or
governmental regulation (i) as a condition to the transaction by the Borrower or
any of its Subsidiaries of any business or the exercise by the Borrower or any
of its Subsidiaries of any privilege or license, (ii) to enable the Borrower or
any of its Subsidiaries to maintain self-insurance or to participate in any fund
for liability on any insurance risks or (iii) in connection with workmen's
compensation, unemployment insurance, old age pensions or other social security
with respect to the Borrower or any of its Subsidiaries to share in the
privileges or benefits required for companies participating in such
arrangements.

(g) Liens incurred in the ordinary course of business upon rights-of-way
securing obligations (other than Debt and trade payables) of the Borrower or any
of its Subsidiaries.

(h) Undetermined mortgages and charges incidental to construction or maintenance
arising in the ordinary course of business which are not more than 90 days past
due or are being contested in good faith by appropriate proceedings.

(i) The right reserved to, or vested in, any municipality or governmental or
other public authority or railroad by the terms of any right, power, franchise,
grant, license, permit or by any provision of law, to terminate or to require
annual or other periodic payments as a condition to the continuance of such
right, power, franchise, grant, license or permit.

(j) The Lien of taxes, customs duties or other governmental charges or
assessments that are not at the time determined (or, if determined, are not at
the time delinquent), or that are delinquent but the validity of which is being
contested in good faith by the Borrower or any of its Subsidiaries by
appropriate proceedings and with respect to which reserves in conformity with
generally accepted accounting principles, if required by such principles, have
been provided on the books of the Borrower or the relevant Subsidiary of the
Borrower, as the case may be.

                                       2
<PAGE>

(k) The Lien reserved in (i) leases entered into in the ordinary course of
business for rent and for compliance with the terms of the lease in the case of
real or personal property leasehold estates or (ii) leases and sub-leases
granted to others that do not materially interfere with the ordinary course of
business of the Borrower and its Subsidiaries, taken as a whole.

(l) Defects and irregularities in the titles to any property (including
rights-of-way and easements) which are not material to the business, assets,
operations or financial condition of the Borrower and its Subsidiaries, taken as
a whole.

(m) Easements, exceptions or reservations in any property of the Borrower or any
of its Subsidiaries granted or reserved in the ordinary course of business for
the purpose of pipelines, roads, equipment, streets, alleys, highways,
railroads, the removal of oil, gas, coal or other minerals or timber, and other
like purposes, or for the joint or common use of real property, facilities and
equipment, or in favor of governmental authorities or public utilities, in each
case above which do not materially impair the use of such property for the
purposes for which it is held by the Borrower or such Subsidiary.

(n) Rights reserved to or vested in any municipality or public authority to
control or regulate any property of the Borrower or any of its Subsidiaries, or
to use such property in any manner which does not materially impair the use of
such property for the purposes for which it is held by the Borrower or such
Subsidiary.

(o) Any obligations or duties, affecting the property of the Borrower or any of
its Subsidiaries, to any municipality or public authority with respect to any
franchise, grant, license or permit.

(p) The Liens of any judgments in an aggregate amount for the Borrower and all
of its Subsidiaries (i) not in excess of $8,500,000, the execution of which has
not been stayed and (ii) not in excess of $40,000,000, the execution of which
has been stayed and which have been appealed and secured, if necessary, by a
stay or appeal bond or other security of similar effect and stay or appeal bonds
in respect of the judgments permitted in clause (ii).

(q) Zoning laws and ordinances.

(r) Liens existing on July 1, 2002, that secure only Debt and other obligations
incurred or committed and available for draw down on or prior to or outstanding
on July 1, 2002 and listed on Schedule IX as secured by such Liens.

(s) Liens existing on July 1, 2002 (i) that cover only immaterial assets and
(ii) that secure only Debt and other obligations incurred or committed and
available for draw down on or prior to or outstanding on July 1, 2002.

(t) Liens reserved in customary oil, gas and/or mineral leases for bonus or
rental payments and for compliance with the terms of such leases and Liens
reserved in customary operating agreements, farm-out and farm-in agreements,
exploration agreements, development agreements and other similar agreements for
compliance with the terms of such agreements; provided that (i) such Liens do
not secure Debt or accounts payable (other than obligations under such lease or


                                       3
<PAGE>

agreement, as the case may be) and (ii) such leases and agreements are entered
into in the ordinary course of business.

(u) Liens arising in the ordinary course of business out of all presently
existing and future division and transfer orders, advance payment agreements,
processing contracts, gas processing plant agreements, operating agreements, gas
balancing or deferred production agreements, participation, joint venture, joint
operating, pooling, unitization or communitization agreements, pipeline,
gathering or transportation agreements, tariffs, platform agreements, drilling
contracts, injection or repressuring agreements, cycling agreements,
construction agreements, salt water or other disposal agreements, leases,
sub-leases or rental agreements, royalty interests, overriding royalty
interests, farm-out and farm-in agreements, exploration and development
agreements, and any and all other contracts or agreements covering, arising out
of, used or useful in connection with or pertaining to the exploration,
development, operation, production, sale, use, purchase, exchange, storage,
separation, dehydration, treatment, compression, gathering, transportation,
processing, improvement, marketing, disposal or handling of any property of a
Person (each such order, agreement or contract being a "Subject Document"),
provided that and to the extent that (i) such Subject Documents are entered into
the ordinary course of business and contain terms customary for such documents
in the industry, (ii) such permitted Liens shall not include any security
interests in accounts receivable or other receivables and do not secure Debt or
accounts payable (other than accounts payable arising under the particular
Subject Document that creates the Lien), and (iii) such Subject Documents do not
create nor do such Liens secure Financing Transactions.

(v) Liens arising by law under Section 9.343 of the Texas Uniform Commercial
Code or similar statutes of states other than Texas.

(w) Liens arising pursuant to the Security Documents which secure the
obligations of TWC and its Subsidiaries under this Agreement and the Multiyear
Williams Credit Agreement and certain public debt of TWC, including Liens
securing Letters of Credit resulting from the Cash Collateralization thereof in
accordance with Section 6.2 hereof.

(x) Liens (i) in existence prior to the date hereof in the nature of a right of
offset or netting of cash amounts owed arising in the ordinary course of
business (and Liens on the trading receivables owed by any trading counterparty
and/or affiliate thereof to the Borrower or any affiliate thereof granted by the
Borrower or any such affiliate thereof under agreements commonly in use in the
industry of the Borrower or such affiliate, but solely to secure the offset or
netting rights of such trading counterparty and/or affiliates thereof to the
payment of such trading receivables arising from and to the extent of the
trading obligations of the Borrower or any affiliate thereof to such trading
counterparty or its affiliates) and (ii) Liens in the nature of a right of
offset or netting of cash amounts owed arising in the ordinary course of
business granted by EMT to any of EMT's trading counterparties and/or affiliates
thereof solely to secure the obligations of EMT to such trading counterparty
and/or affiliates thereof (and the offset or netting rights of such trading
counterparty and/or affiliates thereof related thereto), including, with respect
to EMT only, Liens for such purposes on the trading receivables of EMT arising
from amounts owed by such trading counterparty and/or affiliates thereof to EMT;
provided, however that no such Liens granted by EMT shall in any way create
rights of offset or netting or Liens against the Borrower or any Subject
Subsidiary or their respective Assets.


                                       4
<PAGE>

(y) Any Lien not permitted by paragraphs (a) through (x) above or (z) through
(ii) below securing Debt or Specified Escrow Arrangements of the Borrower or any
of its Subsidiaries if at the time of, and after giving effect to, the creation
or assumption of any such Lien, the aggregate (without duplication) of the
principal or equivalent amount of all Debt of the Borrower and its Subsidiaries
secured by all such Liens not so permitted by paragraphs (a) through (x) above
or (z) through (ii) below plus the amount of Attributable Obligations (other
than those relating to Liens described in clause (a)(viii)) of the Borrower and
its Subsidiaries in respect of Sale and Lease-Back Transactions permitted by
Section 5.2(l) does not exceed $100,000,000.

(z) Any overriding royalties or other rights of Pacific Northwest Pipeline
Corporation, a Delaware corporation ("Pacific") and Phillips Petroleum Company
("Phillips") or their respective successors in interest under a contract dated
January 9, 1953, as amended, between Phillips and Pacific, to which the Borrower
is successor in interest; and the obligations of the Borrower to surrender,
transfer, release or reassign the leases or interests or rights to which said
instruments relate under the conditions and upon the occurrence of the events
specified in said instruments.

(aa) Any option or other agreement to purchase any property of the Borrower or
any Subsidiary the purchase, sale or other disposition of which is not
prohibited by any other provision of this Agreement.

(bb) Liens securing reimbursement obligations with respect to letters of credit
that encumber documents and other property relating to such letters of credit
and the proceeds and products thereof.

(cc) Liens on the products and proceeds (including insurance, condemnation and
eminent domain proceeds) of and accessions to, and contract or other rights
(including rights under insurance policies and product warranties) derivative of
or relating to, property permitted to be subject to Liens under this Agreement
but subject to the same restrictions and limitations herein set forth as to
Liens on such property (including the requirement that such Liens on products,
proceeds, accessions and rights secure only obligations that such property is
permitted to secure).

(dd) Liens on the Property of a Project Finance Subsidiary or the Equity
Interests in such Project Finance Subsidiary securing the Non-Recourse Debt of
such Project Finance Subsidiary.

(ee) Liens on cash and short-term investments incurred in the ordinary course of
business, consistent with past practice and not for the purpose of securing Debt
(i) deposited by the Borrower or any of its Subsidiaries in margin accounts with
or on behalf of futures contract brokers or other counterparties or (ii) pledged
by the Borrower or any of its Subsidiaries, in the case of each of clauses (i)
and (ii) above, to secure its obligations with respect to (x) contracts
(including without limitation, physical delivery, option (whether cash or
financial), exchange, swap and futures contracts) for the purchase or sale of
any energy-related commodity or (y) interest rate or currency rate management
contracts.

(ff) Liens securing Debt of Apco Argentina, Inc. and/or its Subsidiaries;
provided that such Liens shall only apply to assets owned directly by Apco
Argentina, Inc. or its Subsidiaries.

(gg) Liens securing the Barrett Loan.


                                       5
<PAGE>

(hh) Liens securing Permitted Refinancing Debt (as defined below) (and related
obligations) covering substantially the same collateral securing (immediately
prior to such refinancing) the Debt Refinanced (as defined below) by such
Permitted Refinancing Debt; provided that: (i) the principal amount of such
Permitted Refinancing Debt does not exceed the principal amount of the Debt
Refinanced (plus the amount of penalties, premiums (including required premiums
and the amount of any premiums reasonably determined by the Borrower being in
its best economic interest and as necessary to accomplish such Refinancing by
means of a tender offer or privately negotiated repurchase), fees, accrued
interest and reasonable expenses and other obligations incurred in connection
therewith) at the time of refinancing; and (ii) such Debt is incurred either by
the Borrower or by such Subsidiary that is the obligor of the Debt being
Refinanced. "Permitted Refinancing Debt" means any Debt of the Borrower or any
of its Subsidiaries issued to Refinance other Debt of the Borrower or any such
Subsidiaries. "Refinance" means, in respect of any Debt, to refinance, extend,
renew, refund, repay, prepay, replace, acquire, redeem, defease or retire, or to
issue other Debt in exchange or replacement, directly or indirectly for, such
Debt in whole or in part.

(ii) Liens extending, renewing or replacing any of the foregoing Liens provided
that the principal amount of the Debt or other obligation secured by such Lien
is not increased or the maturity thereof shortened and such Lien is not extended
to cover any additional Debt, obligations or property, other than like
obligations of no greater principal amount and the substitution of like property
(or specific categories of property of the same grantor to the extent the terms
of the Lien being extended, renewed or replaced, extended to or covered such
categories of property) of no greater value.

(jj) Liens securing the obligations under that certain Master Agreement dated as
of March 6, 2000 among The Williams Companies, Inc., as Guarantor, Williams
TravelCenters, Inc. and certain other subsidiaries of The Williams Companies,
Inc., as Lessees, Atlantic Financial Group, Ltd., as Lessor, the Lenders party
thereto, SunTrust Bank, as Agent, Societe Generale, Southwest Agency, as
Documentation Agent, and KBC Bank, N.V., as Syndication Agent, as amended,
supplemented or otherwise modified.

(kk) Liens on cash deposits in the nature of a right of setoff, banker's lien,
counterclaim or netting of cash amounts owed arising in the ordinary course of
business on deposit accounts permitted pursuant to Section 5.1(k) of this
Agreement.

(ll) Liens securing the letters of credit outstanding as of July 31, 2002, as
set forth on Schedule XI, resulting from the cash collateralization thereof in
accordance with Section 2.04(c) of the Multiyear Williams Credit Agreement.

(mm) Liens occurring in, arising from, or associated with Specified Escrow
Arrangements.

(nn) Liens granted in connection with (i) Second Amended and Restated
Participation Agreement dated as of January 28, 2002 among Williams Oil
Gathering, L.L.C., a Delaware limited liability company, as Lessee, Williams
Field Services Company, Inc., a Delaware corporation, as Construction Agent, The
Williams Companies, Inc., a Delaware corporation, as Guarantor, Wells Fargo Bank
Northwest, National Association, (formerly known as First Security Bank,
National Association), as Certificate Trustee, Wells Fargo Bank Nevada, N.A.,


                                       6
<PAGE>

(successor by merger to First Security Trust Company of Nevada), as Collateral
Agent, the financial institutions named therein as Certificate Holders, Hatteras
Funding Corporation, a Delaware corporation, as CP Lender, the financial
institutions named therein as the Facility Lenders and Purchasers, Bank of
America, National Association, as Administrative Agent and Administrator for the
CP Lender, Banc of America Facilities Leasing, L.L.C., as Arranger, Bank of Nova
Scotia, as Syndication Agent, and Credit Agricole Indosuez, as Documentation
Agent, as amended, and related transaction documents and (ii) Second Amended and
Restated Participation Agreement dated as of January 28, 2002 among Williams
Field Services - Gulf Coast Company, L.P., a Delaware limited partnership, as
Lessee, Williams Field Services Company, a Delaware corporation, as Construction
Agent, The Williams Companies, Inc., a Delaware corporation, as Guarantor, Wells
Fargo Bank Northwest, National Association, (formerly known as First Security
Bank, National Association), as Certificate Trustee, Wells Fargo Bank Nevada,
N.A., (successor by merger to First Security Trust Company of Nevada), as
Collateral Agent, the financial institution named therein as Certificate
Holders, Hatteras Funding Corporation, a Delaware corporation, as CP Lender, the
financial institutions named therein as the Facility Lenders and Purchasers,
Bank of America, National Association, as Administrative Agent and Administrator
for the CP Lender, Banc of America Facilities Leasing, L.L.C., as Arranger, Bank
of Nova Scotia, as Syndication Agent, and Credit Agricole Indosuez, as
Documentation Agent, as amended, related transaction documents.


                                       7
<PAGE>


                                   SCHEDULE IV

                                   COMMITMENTS

                             AS OF OCTOBER 31, 2002

<TABLE>
<CAPTION>
                            U.S. DOLLAR L/C           CANADIAN DOLLAR         LC PARTICIPATION
       BANKS                  COMMITMENTS             L/C COMMITMENTS            PERCENTAGE
       -----                ---------------           ---------------         ----------------
<S>                          <C>                        <C>                        <C>
CITIBANK, N.A.               $200,000,000                    0                        0

BANK OF AMERICA N.A.         $200,000,000                    0                     20.625%

CITICORP USA, INC.                 0                         0                     20.625%

JPMORGAN CHASE BANK                0                         0                      16.25%

TORONTO DOMINION                   0                         0                      12.5%
(TEXAS), INC.

CREDIT LYONNAIS NEW                0                         0                      12.5%
YORK BRANCH

THE BANK OF NOVA                   0                    $50,000,000                 12.5%
SCOTIA

MERRILL LYNCH CAPITAL              0                         0                       2.5%
CORP.

LEHMAN COMMERCIAL                  0                         0                       2.5%
PAPER INC.
                             ------------               -----------                  ---
TOTAL:                       $400,000,000               $50,000,000                  100%
                             ============               ===========                  ===
</TABLE>


<PAGE>

                                   SCHEDULE V

                                RATING CATEGORIES

<TABLE>
<CAPTION>
                                                                      Applicable       Applicable LC
 Rating       S&P or Moody's ratings of the senior unsecured          Issued LC         Commitment
Category             long-term debt of the Borrower*                    Margin            Margin
- --------      ----------------------------------------------          ----------       -------------
 <S>          <C>                                                        <C>                <C>
  One         BB+ or better by S&P and Ba1 or better by Moody's          3.00%              0.75%

  Two         BB by S&P and Ba2 by Moody's                               3.50%              0.875%

  Three       BB- by S&P and Ba3 by Moody's                              4.00%              1.00%

  Four        B+ by S&P and B1 by Moody's                                4.25%              1.25%

  Five        Below B+ by S&P or below B1 by Moody's                     4.50%              1.50%
</TABLE>


*If split-rated, the lower rating will apply. At all times when no senior
unsecured long-term debt of the Borrower is rated by Moody's or when no senior
unsecured long-term debt of the Borrower is rated by S&P, Rating Category five
shall apply.



<PAGE>


                                   SCHEDULE VI

                                EXISTING PROJECTS


1.   Gulfstream

2.   Gulf Liquids

3.   Devil's Tower

4.   PIGAP II Project








<PAGE>


                                  SCHEDULE VII

                            [INTENTIONALLY OMITTED.]




<PAGE>


                                  SCHEDULE VIII

                            [INTENTIONALLY OMITTED.]




<PAGE>


                                   SCHEDULE IX

                    LIENS SECURING EXISTING DEBT/OBLIGATIONS

         Liens existing on July 1, 2002, that secure only Debt and other
obligations incurred or committed and available for draw down on or prior to or
outstanding on July 1, 2002 and listed on Schedule IX as secured by such Liens.
See clause (r) on Schedule III. Inclusion of the items on this Schedule shall
not be deemed an admission or representation that such items are properly
categorized as Debt or that they are secured.

1. Liens granted in connection with the Master Agreement dated as of March 6,
2000, among TWC, as Guarantor, Williams TravelCenters, Inc. and certain other
subsidiaries of TWC, as Lessees, Atlantic Financial Group, Ltd., as Lessor,
SunTrust Bank, as Agent, Societe Generale, Southwest Agency, as Documentation
Agent, and KBC Bank, N.V., as Syndication Agent and the Lenders party thereto,
as amended, and related transaction documents.

2. Liens granted in connection with the Joint Venture Sponsor Agreement dated as
of December 28, 2000, among TWC, as Sponsor and Williams Field Services Company,
in favor of Prairie Wolf Investors, L.L.C. ("Investor"), Arctic Fox Assets,
L.L.C., Williams Energy (Canada), Inc. and the other Indemnified Persons listed
therein, as amended, and related transaction documents.

3. Liens granted in connection with the PPH Sponsor Agreement dated as of
December 31, 2001, by TWC, as Sponsor, in favor of Piceance Production Holdings
LLC, Plowshare Investors LLC ("Investor"), and other Indemnified Persons listed
in the agreement, as amended, and related transaction documents.

4. Liens granted in connection with the Parent Support Agreement dated as of
December 23, 1998, made by TWC in favor of Castle Associates L.P. ("Castle") and
Colchester LLC ("Investor") and the other Indemnified Persons and Guaranteed
Parties listed therein, as amended, and related transaction documents.

5. Liens granted in connection with the Loan Agreement dated as of March 17,
1998 Pine Needle LNG Company, LLC among Pine Needle LNG Company, LLC and Central
Commercial Lending Institutions as the Lenders and Bank of Montreal as the agent
for the Lenders, and related transaction documents.


<PAGE>

6. Liens granted in connection with the Finance Agreement among WilPro Energy
Services (El Furrial) Limited, Overseas Private Investment Corporation dated as
of January 31, 1999, and related transaction documents.

7. Liens granted in connection with the Letter of Credit and Reimbursement
Agreement dated as of May 15, 1994, among Tulsa Parking Authority, The Williams
Companies, Inc., Bank of Oklahoma, National Association and Bank of America
(f/k/a NationsBank of Texas, N.A.), as amended, and related transaction
documents.

8. Liens granted in connection with the Loan Agreement dated as of March 31,
1988 between Pan-Alberta Resources Inc. and Canadian Imperial Bank of Commerce,
as amended, and related transaction documents.

9. Liens granted in connection with the Turbine Financing and Agency Agreement,
dated as of April 16, 2002, among Union Bank of California, N.A., WEMT Equipment
Statutory Trust 2002, Union Bank of California, N.A., as administrative agent,
and Williams Energy Marketing & Trading Company, and related transaction
documents.

10. Liens granted in connection with the Amended and Restated LLC Loan
Agreement, dated as of June 9, 2000, among Millennium Energy Fund, L.L.C. and
MEF Production Payment Trust, as amended, the Amended and Restated Notes Credit
Agreement dated as of June 9, 2000 among MEF Production Payment Trust as the
Borrower, certain financial institutions, Credit Lyonnais as Syndication Agent,
and Bank of Montreal, as Agent, and the Transaction Documents (as defined
therein) related thereto.


<PAGE>


                                   SCHEDULE X

                             MIDSTREAM SUBSIDIARIES

Delaware
- --------

Williams Energy Services, LLC
Williams Natural Gas Liquids, Inc.
Williams Midstream Natural Gas Liquids, Inc.
Williams Express, Inc. (a Delaware corporation)
Williams Field Services Group, Inc.
Williams Alaska Pipeline Company, L.L.C.
Williams Bio-Energy, L.L.C.
Williams Merchant Services Company, Inc.
MAPCO Inc.
WFS Enterprises, Inc.
WFS-Liquids Company
Williams Field Services Company
Williams Gas Processing Company
Williams Gas Processing - Wamsutter Company
North Padre Island Spindown, Inc.
Williams Ethanol Services, Inc.
Williams Energy Marketing & Trading Company
Worthington Generation, L.L.C.
Memphis Generation, L.L.C.
Gas Supply, L.L.C.
Williams Generation Company - Hazelton
Juarez Pipeline Company
MAPL Investments, Inc.
Williams Refining & Marketing, L.L.C.
Williams Memphis Terminal, Inc.
Williams Mid-South Pipelines, L.L.C.
Williams Olefins, L.L.C.
Williams Olefins Feedstock Pipelines, L.L.C.
Williams Generating Memphis, LLC
WFS - NGL Pipeline Company Inc.
WFS - Offshore Gathering Company
Baton Rouge Fractionators, L.L.C.
Tri-States NGL Pipeline, L.L.C.
WILPRISE Pipeline Company, L.L.C.
Williams Gulf Coast Gathering Company, LLC
WFS Gathering Company, L.L.C.
Williams Field Services - Matagorda Offshore Company, LLC

<PAGE>

Williams Gas Processing - Mid-Continent Region Company
WFS - OCS Gathering Co.
WFS - Pipeline Company
HI-BOL Pipeline Company
Goebel Gathering Company, L.L.C.
Williams Petroleum Pipeline Systems, Inc.
Williams GP LLC*
Williams Oil Gathering, L.L.C
Williams Field Services - Gulf Coast Company, L.P.
Gulf Liquids Holdings, L.L.C.**
Gulf Liquids New River Project, LLC**
Williams Petroleum Services, LLC
Longhorn Enterprises of Texas, Inc.
E-Birchtree, LLC

Alaska
- ------

Williams Express, Inc. (an Alaska corporation)
Williams Alaska Petroleum, Inc.
Williams Alaska Air Cargo Properties, L.L.C.
Williams Lynxs Alaska CargoPort, L.L.C.

Texas
- -----

Black Marlin Pipeline Company
Rio Grande Pipeline Company

Kansas
- ------

Nebraska Energy, L.L.C.





*    Williams GP LLC shall not be deemed a Midstream Subsidiary until
     Williams GP LLC has transferred the general partnership interests and
     incentive distribution rights in MLP to New GP.

**   These entities shall be Midstream Subsidiaries to the extent that such
     entities are Subsidiaries.



<PAGE>


                                   SCHEDULE XI

                               PROGENY FACILITIES

Parent Support Agreement dated as of December 23, 1998, made by The Williams
Companies, Inc. in favor of Castle Associates L.P., Colchester LLC and the other
Indemnified Persons and Guaranteed Parties listed therein, as amended.
Notwithstanding anything herein to the contrary, for purposes of Section 2.3(b)
of this Agreement, the outstanding amount of this Progeny Facility shall equal
the outstanding Unrecovered Capital (as defined in the Castle Partnership
Agreement) of the Limited Partner (as defined in the Castle Partnership
Agreement) plus accrued and undistributed First Priority Return (as defined in
the Castle Partnership Agreement) to be distributed to the Limited Partner in
accordance with Section 4.01(a) of the Castle Partnership Agreement plus all
other amounts then due and payable to the Limited Partner.

First Amended and Restated Term Loan Agreement dated as of October 31, 2002,
among The Williams Companies, Inc., as Borrower, and Credit Lyonnais New York
Branch, as Administrative Agent, and the Lenders named therein, as amended.

Second Amended and Restated Participation Agreement dated as of January 28, 2002
among Williams Oil Gathering, L.L.C., a Delaware limited liability company, as
Lessee, Williams Field Services Company, a Delaware corporation, as Construction
Agent, The Williams Companies, Inc., a Delaware corporation, as Guarantor, Wells
Fargo Bank Northwest, National Association (formerly known as First Security
Bank, National Association), as Certificate Trustee, Wells Fargo Bank Nevada,
N.A. (successor by merger to First Security Trust Company of Nevada), as
Collateral Agent, the financial institutions named therein as Certificate
Holders, Hatteras Funding Corporation, a Delaware corporation, as CP Lender, the
financial institutions named therein as the Facility Lenders and Purchasers,
Bank of America, National Association, as Administrative Agent and Administrator
for the CP Lender, Banc of America Facilities Leasing, L.L.C., as Arranger, Bank
of Nova Scotia, as Syndication Agent, and Credit Agricole Indosuez, as
Documentation Agent, as amended.

Second Amended and Restated Participation Agreement dated as of January 28, 2002
among Williams Field Services - Gulf Coast Company, L.P., a Delaware limited
partnership, as Lessee, Williams Field Services Company, a Delaware corporation,
as Construction Agent, The Williams Companies, Inc., a Delaware corporation, as
Guarantor, Wells Fargo Bank Northwest, National Association (formerly known as
First Security Bank, National Association), as Certificate Trustee, Wells Fargo
Bank Nevada, N.A. (successor by merger to First Security Trust Company of
Nevada), as Collateral Agent, the financial institutions named therein as
Certificate Holders, Hatteras Funding Corporation, a Delaware corporation, as CP
Lender, the financial institutions named therein as the Facility Lenders and
Purchasers, Bank of America, National Association, as Administrative Agent and
Administrator for the CP Lender, Banc of America Facilities Leasing, L.L.C., as
Arranger, Bank of Nova Scotia, as Syndication Agent, and Credit Agricole
Indosuez, as Documentation Agent, as amended.

<PAGE>

Term Loan Agreement dated as of January 29, 1999, among The Williams Companies,
Inc., as Borrower, and The Fuji Bank, Limited, as Administrative Agent, and the
Banks named therein, as amended.

Joint Venture Sponsor Agreement dated as of December 28, 2000, among The
Williams Companies, Inc., as Sponsor and Williams Field Services Company, in
favor of Prairie Wolf Investors, L.L.C., Arctic Fox Assets, L.L.C., Williams
Energy (Canada), Inc. and the other Indemnified Persons listed therein, as
amended.

Letter of Credit and Reimbursement Agreement dated as of May 15, 1994, among
Tulsa Parking Authority, The Williams Companies, Inc., Bank of Oklahoma,
National Association, and Bank of America, N.A. (formerly NationsBank of Texas,
N.A.), relative to Tulsa Parking Authority First Mortgage Revenue Bonds, as
amended.

Master Agreement dated as of March 6, 2000, among The Williams Companies, Inc.,
as Guarantor, Williams TravelCenters, Inc. and certain other subsidiaries of
TWC, as Lessees, Atlantic Financial Group, Ltd., as Lessor, SunTrust Bank, as
Agent, Societe Generale, Southwest Agency, as Documentation Agent, and KBC Bank,
N.V., as Syndication Agent and the Lenders party thereto, as amended.

PPH Sponsor Agreement dated as of December 31, 2001, by The Williams Companies,
Inc., as Sponsor, in favor of Piceance Production Holdings LLC, Plowshare
Investors LLC, and other Indemnified Persons listed in the agreement, as
amended. Notwithstanding anything herein to the contrary, for purposes of
Section 2.3(b) of this Agreement, the outstanding amount of this Progeny
Facility shall equal the outstanding Contributed Capital of the Class B
Preferred Member (each as defined in the PPH Company Agreement) plus the accrued
and unpaid Class B Priority Return (as defined in the PPH Company Agreement)
plus all other amounts then due and payable to the Class B Preferred Member.

Amended and Restated LLC Loan Agreement, dated as of June 9, 2000, among
Millennium Energy Fund, L.L.C. and MEF Production Payment Trust, as amended, the
Amended and Restated Notes Credit Agreement dated as of June 9, 2000 among MEF
Production Payment Trust as the Borrower, certain financial institutions, Credit
Lyonnais as Syndication Agent, and Bank of Montreal, as Agent, and the
Transaction Documents (as defined therein) related thereto.

Outstanding letters of credit as of July 31, 2002 (as set forth on Schedule
XIII) to the extent they have not been fully cash collateralized.

All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with any of the foregoing.


<PAGE>
                                  SCHEDULE XII

                               POST-CLOSING ITEMS

          1. Consents. The Borrower shall use its best efforts to obtain those
third party consents that have been identified by the Borrower (pursuant to a
written schedule delivered in connection with the execution of this Agreement)
as necessary in connection with the execution, delivery, filing and performance
of certain Mortgages.

          2. Legal Opinions. The Agent shall have received, with a counterpart
for each Issuing Bank, the executed legal opinions of local counsel to the
Agents in such states as requested by Agent which such legal opinions shall
cover such matters incident to the perfection of the Liens and the other
transactions contemplated by this Agreement as the Agent may reasonably require.
TO BE DELIVERED 30 DAYS AFTER THE REQUEST THEREFOR BY THE AGENT.

          3. Actions to Perfect Liens. The Agent shall have received properly
completed and executed financing statements (or other similar documents),
including, without limitation, duly executed financing statements on form UCC-1,
necessary or, in the opinion of the Collateral Agent, desirable to perfect the
Liens created by the Security Documents, and the Collateral Agent shall be
reasonably satisfied that, other than filing such financing statements and other
similar documents and the Mortgages, no other filings, recordings, registrations
or other actions are necessary or, in the opinion of the Collateral Agent,
desirable to perfect the Liens created by the Security Documents. TO BE
COMPLETED 15 DAYS AFTER THE REQUEST THEREFOR BY THE AGENT.

          4. Surveys. At the request of the Agent, the Agent shall have received
boundary line surveys of (i) the property leased by the Borrower and the
Midstream Subsidiaries located in the States of Alaska, Arkansas, Colorado, New
Mexico, Tennessee and Wyoming, and (ii) the real property owned by Borrower and
the Midstream Subsidiaries located in the States of Alaska, Arkansas, Colorado,
New Mexico, Tennessee and Wyoming, other than the Gathering Systems which
boundary line surveys shall in each case be (A) dated a date reasonably close to
the date of this Agreement (as determined by the Agent), (B) prepared by an
independent professional licensed land surveyor reasonably satisfactory to the
Agent, (C) prepared in a manner reasonably acceptable to the Agent and (D) shall
reflect that the buildings, structures and other improvements necessary for the
ownership and operation of the processing plants purported to be located on the
property surveyed do not protrude on any adjoining property nor do any
improvements located on land adjacent to the property surveyed encroach upon the
property surveyed, which encroachments or protrusions in either case could
reasonably be expected to adversely affect the ability of the Borrower or the
Midstream Subsidiaries to own, maintain, operate or sell the property surveyed
and/or the improvements located thereon. The Agent shall have received a
certificate of an authorized officer of the Borrower certifying said


<PAGE>

boundary line surveys are true and correct as of the date of this Agreement. TO
BE COMPLETED 60 DAYS AFTER REQUEST BY THE AGENT THEREFOR.

          5. Flood Insurance. If requested by the Agent, the Agent shall have
received a policy of flood insurance in form and substance satisfactory to the
Agent. TO BE COMPLETED 60 DAYS AFTER REQUEST BY THE AGENT THEREFOR.

          6. Copies of Documents. If requested by the Agent, the Agent shall
have received a copy, certified by such parties as the Agent may deem
appropriate, of any document burdening the property covered by any Mortgage. TO
BE COMPLETED 30 DAYS AFTER REQUEST BY THE AGENT THEREFOR.

          7. Lien Searches. The Agent shall have received the results of recent
lien searches by Persons reasonably satisfactory to the Agent, in each of the
jurisdictions and offices where assets of the Borrower or any of the Midstream
Subsidiaries are located or recorded, and such searches shall reveal no Liens on
any assets of the Borrower or any such Subsidiary, except for (i) Liens
permitted by this Agreement and (ii) Liens to be released or assigned to the
Agent, for the ratable benefit of the Banks, on the date of this Agreement in
connection with the execution, delivery and performance of the Credit Documents.
TO BE COMPLETED ON OR BEFORE NOVEMBER 15, 2002.

          8. Insurance. The Agent shall have received (i) copies of, or an
insurance broker's or agent's certificate as to coverage under, the insurance
policies required by this Agreement and the applicable provisions of the
Security Documents, each of which policies shall be endorsed or otherwise
amended to include a "standard" or "New York" lender's loss payable endorsement
and to name the Collateral Agent as additional insured, in form and substance
satisfactory to the Collateral Agent and (ii) confirmation from such insurance
broker that the scope and amount of coverage maintained by the Borrower and its
Subsidiaries are comparable to the scope and amount of the insurance maintained
by other companies of similar size in the same industry and general location. TO
BE COMPLETED ON OR BEFORE NOVEMBER 15, 2002.

          9. Environmental Reports. If requested by the Agent, the Agent shall
have received environmental assessment reports from E.vironment, Inc. with
respect to processing, refining and other facilities and other parcels of real
property owned or leased by the Borrower and the Midstream Subsidiaries, and the
Issuing Banks shall be reasonably satisfied with the potential environmental
liabilities to which the Borrower and its Subsidiaries may be subject based on
such reports. TO BE COMPLETED 60 DAYS AFTER THE REQUEST THEREFOR BY THE AGENT.

          10. Title Vested in Borrower. The Agent and the Issuing Banks shall be
reasonably satisfied that all filings and other actions required to be taken or
made in order to vest title to all of the Properties of the Borrower and the
Midstream Subsidiaries shall have been


<PAGE>

taken or made and are in full force and effect. TO BE COMPLETED 60 DAYS AFTER
THE REQUEST THEREFOR BY THE AGENT.

          11. Mortgages. The Borrower shall deliver to the Collateral Agent,
within fifteen Business Days of the delivery of any Mortgage to the Borrower
(or, with respect to Mortgages to be filed in Kansas, as promptly as possible
using its best efforts), evidence of such recordings and filings as may be
necessary, in the opinion of the Collateral Agent, to perfect the Liens created
by such Mortgage. Upon the request of Collateral Agent, the Borrower shall
provide all assistance as may be necessary in connection with the preparation of
the Mortgages.

          12. Consents to the Pledging of Excluded Equity Interest. The Borrower
shall use its best efforts to obtain all third party consents necessary to
pledge the Excluded Equity Interests (other than the Equity Interest in the
Restricted Midstream Subsidiaries and the Equity Interest of MLP held by NewGP)
pursuant to the Pledge Agreement. TO BE REQUESTED WITHIN 30 DAYS AFTER THE DATE
OF THIS AGREEMENT AND TO BE PURSUED DILIGENTLY THEREAFTER.

          13. Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be satisfactory in form and substance to the Agent, and the Agent shall have
received such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.

          14. Additional Legal Opinions. The Agent shall have received, with a
counterpart for each Issuing Bank under the L/C Agreement, executed legal
opinions which confirm that the Mortgages and deeds of trust filed with respect
to the Collateral shall continue to constitute valid, enforceable, and duly
recorded liens on the real property following the amendment and restatement of
the Existing Credit Agreement and of the Multiyear Williams Agreement, securing
the obligations of such agreements as amended. To the extent that any
supplemental deed of trust or mortgage filings are required in connection with
the above described legal opinions, the Agent shall have received evidence of
such recordings and filings as may be necessary, in the opinion of the
Collateral Agent, to ensure the continued perfection of the Liens created by any
such Mortgage. IN EACH CASE, TO BE COMPLETED 30 DAYS AFTER THE DATE OF THIS
AGREEMENT.

          15. Approvals of and Consents to Assignments. In connection with the
termination of (a) the Amended and Restated Guarantee, dated as of July 25,
2000, issued by TWC for the benefit of The Commonwealth Plan, Inc. and CBL
Capital Corporation, as amended, (b) the Lease Agreement, dated as of December
29, 1995, between The Commonwealth Plan, Inc., as Lessor, and WFS - Pipeline
Company, as Lessee, and (c) the Lease Agreement, dated as of December 29, 1995,
between CBL Capital Corporation, as Lessor, and WFS - Offshore Gathering
Company, as Lessee, TWC and either WFS - Offshore


<PAGE>

Gathering Company or WFS - Pipeline Company, as applicable, shall use their best
efforts to obtain (i) the approval of the United States Department of the
Interior, Minerals Management Service to the assignment of certain easements to
WFS - Offshore Gathering Company by CBL Capital Corporation and (ii) the
consents of third parties necessary to the assignments of any leases and/or
easements by CBL Capital Corporation to WFS - Offshore Gathering Company or by
The Commonwealth Plan, Inc. to WFS - Pipeline Company. TO BE COMPLETED ONE YEAR
AFTER THE DATE OF THIS AGREEMENT.


<PAGE>


                                  SCHEDULE XIII

                          OUTSTANDING LETTERS OF CREDIT


<PAGE>


                                  SCHEDULE XIV

                             PERMITTED DISPOSITIONS


1.   Apco Argentina

     o    Apco Argentina, Inc.

     o    Apco Properties Ltd. (100%)

     o    Petrolera Perez Companc S.A. (33.6%- Currently in process of
          purchasing an additional 5.5%)

2.   Energy International

     o    Energy International Corporation (owns "Gas to Liquids" technology).

3.   Discovery

     o    Williams Energy, L.L.C. owns a 50% interest in Discovery Producer
          Services LLC (unregulated) which in turn is the sole member of
          Discovery Gas Transmission LLC (regulated).

4.   Southern Ute  (Collateral)

     o    Williams Field Services Company's interest in natural gas pipeline
          gathering systems totaling approximately 91 miles of pipeline in La
          Plata County, Colorado, together with all associated real property
          interests, shipper contracts, and governmental permits, licenses,
          orders, approvals, certificates of occupancy and other authorizations.

5.   Dry Trail CO2 Recovery Plant  (Collateral)

     o    Williams Field Services Company owns and operates a 50 MMcfd CO2
          recovery plant in Texas County, Oklahoma located on 26 acres near the
          town of Hough, Oklahoma to remove and recycle CO2 at ExxonMobil's
          Postle field enhanced oil recovery project.

6.   Aux Sable and Alliance Canada Marketing L.P.

     o    Williams Alliance Canada Marketing Inc. has a 14.604% interest in
          Alliance Canada Marketing Ltd. which owns a 1% interest in and is the
          general partner of Alliance Canada Marketing L.P. (the "Alliance LP").
          Williams Alliance Canada Marketing Inc. also owns a 14.604% limited
          partnership interest in the remaining 99% of the Alliance LP.


<PAGE>

     o    Williams Natural Gas Liquids Canada, Inc. has a 14.604% interest in
          Aux Sable Canada Ltd. which owns a 1% interest in and is the general
          partner of Aux Sable Canada LP (the "Canada LP"). Williams Natural Gas
          Liquids Canada, Inc. also owns a 14.604% limited partnership interest
          in the remaining 99% of the Canada LP.

     o    Williams Natural Gas Liquids, Inc. has a 14.604% interest in Aux Sable
          Liquid Products Inc. which owns a 1% interest in and is the managing
          general partner of Aux Sable Liquid Products LP (the "Liquid LP").
          Williams Natural Gas Liquids, Inc. also owns a 14.604% limited
          partnership interest in the remaining 99% of the Liquid LP.

7.   Deepwater

     o    Devil's Tower

          The Devil's Tower floating production facility currently under
          construction that will be located on block 773 of Mississippi Canyon.
          The oil and gas export pipelines attached to the Devil's Tower Spar
          known as Canyon Chief and Mountaineer and associated pumps,
          compressors, platforms and other equipment.

     o    Gunnison

          The oil pipeline known as the Alpine Pipeline that begins at the
          Gunnison discovery and terminates at the platform located at GA 244.

     o    Canyon Station

          The Canyon Station fixed leg platform located at Main Pass block 261
          which processes oil and gas production from deepwater wells located in
          Mississippi Canyon.

     o    Equity of the Deepwater JV.

     o    Collectively, the property referred to in this Item 8; shall be
          referred to as the "Deepwater Assets"; provided that, for
          clarification, such assets are not subject to the Deepwater
          Transactions so long as such Deepwater Transactions are in full force
          and effect.


8.   Gulf Liquids

     o    Gulf Liquids New River Project, LLC and its assets. Gulf Liquids New
          River Project, LLC is 90% owned by Gulf Liquids Holdings, LLC, which
          is 100% owned by EM&T.


<PAGE>

9.   EM&T  (Collateral)

     o    Equity Interest in Williams Energy Marketing & Trading Company.

10.  Worthington Generation, L.L.C.  (Collateral)

     o    Equity Interests and assets of Worthington Generation, L.L.C.

11.  Williams Generation Company-Hazelton  (Collateral)

     o    Equity Interests and assets of Williams Generation Company-Hazelton.

12.  Williams Energy (Canada), Inc. and its Subsidiaries

     o    Equity Interests and assets of William Energy (Canada), Inc. and its
          Subsidiaries.

13.  Those certain gathering and related assets owned by Goebel Gathering
     Company, L.L.C. and WFS Gathering Company, L.L.C. subject to purchase and
     sale agreements with Enbridge Pipelines (Texas Gathering) Inc. dated
     October 10, 2001 for a purchase price of approximately $9,000,000.
     (Collateral)

14.  Property received from any sale, transfer or other disposition of
     Collateral made pursuant to Section 5.2(e). (Collateral)

15.  Mapco Office Building. (Collateral)

16.  For the avoidance of doubt, the disposition or redemption of the Class B
     Units in MLP shall not be a Permitted Disposition.

17.  Interests in joint development arrangements existing on July 31, 2002 by
     Williams Energy Marketing & Trading Company, which are transferred as a
     result of Williams Energy Marketing & Trading Company's decision not to
     continue funding.


<PAGE>

                                   SCHEDULE XV
                            ADDITIONAL PUBLIC FILING


1.   Consolidated Amended Complaint, In Re Williams Securities Litigation, Case
     No. 02-CV-72-H(M) in the United States District Court for the Northern
     District of Oklahoma.



<PAGE>


                                  SCHEDULE XVI

                                  STORAGE LEASE

On July 18, 2001 Williams Midstream Natural Gas Liquids, Inc. ("WMNGL"), as
sublessor, and Liberty Gas Storage LLC ("Liberty"), as sublessee, entered into a
sublease agreement whereby, upon satisfaction of certain conditions precedent by
the sublessee, WMNGL would sublease certain sulphur mines located in Calcasieu,
Louisiana to Liberty for the development of natural gas storage facilities.



<PAGE>


                         SUBORDINATION, NON-DISTURBANCE
                            AND ATTORNMENT AGREEMENT

          This Subordination, Non-Disturbance and Attornment Agreement (this
"Agreement"), is dated as of ____________ , 2002, by and between LIBERTY GAS
STORAGE PARTNERS, L.P., a Delaware limited partnership ("Liberty"), and
CITIBANK, N.A., as collateral agent (the "Agent") for certain lenders (the
"Lenders") described below.


                                    RECITALS

          A. WHEREAS, Liberty is the sublessee (by assignment from Liberty Gas
Storage LLC, a Delaware limited liability company) under the Sublease Agreement
dated July 18, 2001 (the "Sublease"), with WILLIAMS MIDSTREAM NATURAL GAS
LIQUIDS, INC., a Delaware corporation ("Williams"), as sublessor. The Sublease
covers a portion of certain lands, including pipeline corridors and access
rights of way, as well as certain salt caverns located thereon and associated
equipment, insofar and only insofar as same affect the following described
property situated in the Parish of Calcasieu, Louisiana:

          [Part of Sections 17, 20, 29, 32, Township 9 South, Range 10
          West, and more particularly described on Exhibit A-1, and
          shown on Exhibit A-5 attached hereto and made a part hereof.]
          [verify]

The term "Liberty Leased Assets" shall mean such property subleased by Williams
to Liberty, as described and defined in the Sublease.

          B. The subleasehold estate created by the Sublease is a portion of the
leasehold estate created by the Lease Agreement dated January 1, 1991 (the
"Burlington Lease") between Union Texas Petroleum Corporation and Union Texas
Products Corporation, recorded in Conveyance Book 2235, page 260, under Clerk's
File No. 2085889, in Calcasieu Parish, Louisiana. By various intermediate
conveyances, the current lessor under the Burlington Lease is Burlington
Resources Corporation [verify] and the current lessee under the Burlington Lease
is Williams.

          C. Williams has granted a mortgage dated __________, 2002 (the
"Mortgage") recorded in Mortgage Book ___ , Page ___ , under Clerk File No. ___
, in Calcasieu Parish, Louisiana, encumbering the leasehold estate and other
rights of Williams under the Burlington Lease to the Agent, for the benefit of
the Lenders from time to time parties ______________________ [INSERT description
of loan].

          D. WHEREAS, Liberty has requested that the Agent agree not to disturb
Liberty's possessory rights in the Liberty Leased Assets in the event the Agent
should foreclose on the Mortgage, provided the Sublease is then in full force
and effect and provided further that Liberty attorns to the Agent or the
purchaser at any foreclosure sale of the leasehold estate under the Burlington
Lease.

<PAGE>

                                    AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing, Liberty and Agent
hereby agree as follows:

          Section 1. Subordination. Subject to the express terms of this
Agreement, Liberty agrees that the Sublease, as the same may be modified,
amended or extended, and the subleasehold estate created thereby, and all of the
rights, remedies and options of Liberty thereunder, are and shall at all times
continue to be subject and subordinate in all respects to the Mortgage and the
lien thereof, and to all rights of Agent thereunder, including, without
limitation, all renewals, increases, modifications, consolidations and
extensions thereof.

          Section 2. Non-Disturbance. Agent agrees that if any action or
proceeding is commenced by Agent for the foreclosure of the Mortgage and the
seizure and sale of the Liberty Leased Assets as part of the leasehold estate
under the Burlington Lease, or if Agent acquires the Liberty Leased Assets,
whether through foreclosure or deed in lieu of foreclosure (or dation en
paiement), Agent shall maintain Liberty in possession under the terms of the
Sublease, provided that at such time the Sublease shall be in full force and
effect and shall not have expired or been terminated.

          Section 3. Attornment. Liberty agrees that if the Agent, any of the
Lenders or a purchaser at a sheriff's sale (each a "Transferee") shall become
the owner of the Liberty Leased Assets by reason of the foreclosure of the
Mortgage or the acceptance of a deed in lieu of foreclosure (or dation en
paiement) (a "Transfer Event"), and provided that at such time the Sublease
shall be in full force and effect and shall not have expired or been terminated,
the Sublease shall not be terminated or affected thereby, but shall continue in
full force and effect as a direct sublease between Liberty and such Transferee
upon all the terms, covenants and conditions set forth in the Sublease. Upon
such a Transfer Event, Liberty agrees to attorn to such Transferee as sublessor
under the Sublease, and to be bound by and perform all of the obligations
imposed by the Sublease on the sublessee thereunder. Also, upon such a Transfer
Event, the Transferee will be bound by all of the obligations imposed by the
Sublease on the sublessor; provided, however, that such Transferee shall not be:
(i) liable for any act or omission of Williams, provided that the foregoing
shall not be deemed to relieve such Transferee from the obligation to perform
any obligation of the sublessor under the Sublease which obligation (a) remains
unperformed at the time that such Transferee succeeds to the interest of
sublessor under the Sublease and (b) is made known to Transferee and Transferee
is provided notice and given the same opportunity to cure as afforded Williams
under the Sublease; or (ii) bound by any rent which Liberty might have paid
under the Sublease for more than one month in advance, unless actually received
by such Transferee; or (iii) bound by any amendment or modification of the
Sublease that could have a material adverse affect on Agent's rights as a
secured party; or (iv) subject to any offsets or defenses that Liberty might
have against Williams (or any prior sublessor, if applicable) unless Transferee
has been given written notice thereof and the same opportunity to cure as
afforded Williams under the Sublease.

<PAGE>


          Section 4. Covenants of Liberty. Liberty covenants and agrees that
contemporaneously with any written notice sent by Liberty to Williams of a
default by Williams under the Sublease, Liberty shall contemporaneously send a
copy of such default notice to the Agent.

          Section 5. Disclaimer by Agent. Notwithstanding any of the provisions
hereof, Agent shall have no obligation in favor of Liberty to perform any term,
covenant or condition contained in the Sublease, unless and until Agent acquires
ownership of the Liberty Leased Assets through foreclosure, deed in lieu of
foreclosure (or dation en paiement) or otherwise.

          Section 6. New Lease. Upon the written request of either Liberty or a
Transferee to the other given within thirty (30) days after any Transfer Event,
Liberty and such Transferee shall execute a new sublease of the Liberty Leased
Assets upon the same terms and conditions as the Sublease, which new sublease
shall cover any unexpired term of the Sublease existing prior to such Transfer
Event.

          Section 7. Notices. Any notice or other communication required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be considered as properly dispatched if delivered in person, sent by a
nationally recognized overnight courier (fee prepaid), mailed by certified mail
(postage prepaid return receipt requested), or transmitted by telecopier to the
address as set forth below. The following are the addresses of the parties:

          LIBERTY:

                    Liberty Gas Storage Partners, L.P.
                    2929 BriarPark, Suite 140
                    Houston, Texas 77042
                    Attention: ____________________
                    Facsimile: (713) 781-4966


<PAGE>


                    AGENT:
                    Citibank, N. A.
                    Collateral Trustee
                    111 Wall Street
                    New York, New York 10043
                    telecopier number: (212) 657-3862
                    Attention: Edward Morelli


                    with a copy to:
                    Citicorp North America, Inc.,
                    1200 Smith Street, Suite 2000
                    Houston, Texas 77002
                    telecopier number: (713) 654-2849)
                    Attention: The Williams Companies, Inc. Account Officer


          Section 8. Amendment. Neither this Agreement nor any provisions hereof
may be changed, waived, discharged or terminated orally or in any manner other
than by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought.

          SECTION 9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF LOUISIANA, EXCLUDING THE
LOUISIANA LAW OF CONFLICTS.

          Section 10. Successors. This Agreement shall inure to the benefit of
the parties hereto and their respective successors and assigns.

          Section 11. Counterparts. This Agreement may be executed in two or
more counterparts, and it shall not be necessary that the signatures of all
parties hereto be contained on any one counterpart hereof; each counterpart
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

          Executed by the duly authorized representatives of Liberty and the
Agent as of the date hereinabove first written.

<PAGE>

                                        LIBERTY GAS STORAGE


                                        By:
                                            -----------------------------------'
                                            Its:
                                                 -------------------------------

                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------



                                        CITIBANK, as Collateral Agent


                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------


<PAGE>




STATE OF TEXAS
COUNTY OF __________


          BEFORE ME, the undersigned Notary Public duly commissioned qualified
and sworn within and for the State and County written above, personally came and
appeared _________________________, to me personally known, and who being by me
duly sworn, did say that he is the authorized _____________________________ of
__________________________, the _____________________ of LIBERTY GAS STORAGE
______________________, whose name is subscribed to the foregoing Subordination,
Non-Disturbance and Attornment Agreement, and that he executed the foregoing
Subordination, Non-Disturbance and Attornment Agreement by authority of said
company's __________________ on behalf of said company as its free act and deed.

               THUS DONE AND SIGNED before me and the two undersigned witnesses
in the County and State aforesaid, on this ___ day of [___________], 2002.
Witness my hand and official seal.

WITNESSES:


- -------------------------------------      -------------------------------------
Name:                                      Name:
     --------------------------------           --------------------------------


- -------------------------------------
Name:
     --------------------------------


                                           -------------------------------------
                                                      NOTARY PUBLIC


                                           Seal
                                           My Commission expires:

<PAGE>



STATE OF NEW YORK
COUNTY OF NEW YORK


          BEFORE ME, the undersigned Notary Public duly commissioned qualified
and sworn within and for the State and County written above, personally came and
appeared _______________, to me personally known, and who being by me duly
sworn, did say that he is the authorized ____________ of CITIBANK, N.A., as
Collateral Agent, whose name is subscribed to the foregoing Subordination,
Non-Disturbance and Attornment Agreement, and that he executed the foregoing
Subordination, Non-Disturbance and Attornment Agreement by authority of said
company's __________________ on behalf of said company as its free act and deed.
THUS DONE AND SIGNED before me and the two undersigned witnesses in the County
and State aforesaid, on this ___ day of [___________], 2002. Witness my hand and
official seal.

WITNESSES:


- -------------------------------------      -------------------------------------
Name:                                      Name:
     --------------------------------           --------------------------------


- -------------------------------------
Name:
     --------------------------------


                                           -------------------------------------
                                                      NOTARY PUBLIC


                                           Seal
                                           My Commission expires:
<PAGE>

                                   EXHIBIT A-1
                    [Attach legal description from Sublease]


<PAGE>



                                                                       EXHIBIT A
                                                                              TO
                                                                CREDIT AGREEMENT

                         OPINION OF WILLIAM G. VON GLAHN



<PAGE>


                                                                     EXHIBIT B-1
                                                                              TO
                                                                CREDIT AGREEMENT

                           OPINION OF NEW YORK COUNSEL
                                (ENFORCEABILITY)



<PAGE>


                                                                     EXHIBIT B-2
                                                                              TO
                                                                CREDIT AGREEMENT

                           OPINION OF NEW YORK COUNSEL
                                  (PERFECTION)





<PAGE>

                                                                       EXHIBIT C
                                                                              TO
                                                                CREDIT AGREEMENT

               EXISTING LOANS AND INVESTMENTS IN WCG SUBSIDIARIES

<TABLE>
<CAPTION>
                                TWC CONTINUING CONTRACTS TO WHICH WCG IS A PARTY

                      AGREEMENT                                 DATE                    PARTIES
                      ---------                                 ----                    -------
<S>                                                             <C>                     <C>
Amended and Restated Administrative Services Agreement
but excluding all Service Level Agreements included therein
other than those listed below

     Amended and Restated Administrative Services Agreement
     - Cafeteria Card (SLA No. ASF-11)

     Amended and Restated Administrative Services Agreement
     - Catering Services (SLA No. ASF-3)                        23-Apr-01               TWC and WCG

     Amended and Restated Administrative Services Agreement
     - Data Center Floor Space (SLA No. IT-23)

     Amended and Restated Administrative Services Agreement
     - Security System Administration (SLA No. ASR-2)

     Amended and Restated Administrative Services Agreement
     - Telecommunications Support (PBX) (SLA No. IT-19)

     Amended and Restated Administrative Services Agreement
     - Warren Clinic (SLA No. HR-17)

     Amended and Restated Administrative Services Agreement
     - Records Management (Revised) (SLA No. ASF-9)

Amended and Restated Confidentiality and Nondisclosure
Agreement                                                       1-Feb-02                TWC and WCG

Amended and Restated Cross-License Agreement                    23-Apr-01               TWC and WCG

Amended and Restated Employee Benefits Agreement                23-Apr-01               TWC and WCG

Amended and Restated Separation Agreement                       23-Apr-01               TWC and WCG

Amendment of State of Oklahoma OIC Agreement                    23-Apr-01               TWC and WCG

ITWill Assignment and Assumption Agreement                      23-Apr-01               TWC and WCG

Mutual Waiver, dated April 23, 2001                             23-Apr-01               TWC and WCG

Professional Services Agreement                                 23-Apr-01               TWC, WCG, The Feinberg Group, LLP

Relocation Services Agreement                                   2-Jan-02                Williams Relocation Management, Inc.
                                                                                        (a TWC subsidiary) and WCG

Restructuring Support Agreement                                 23-Feb-02               TWC and WCG

Shareholder Agreement                                           23-Apr-01               TWC and WCG

Trademark License Agreement                                     23-Apr-01               TWC and WCG

Guaranty Indemnification                                        26-Jul-02               TWC and WCG Agreement

All agreements and exhibits related to or incorporated by the foregoing that were entered into to implement the transactions
contemplated thereby, e.g. Assignment and Assumption Agreements, Bills of Sale.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                      TWC CONTINUING CONTRACTS TO WHICH WCG IS A PARTY

                      AGREEMENT                                 DATE                    PARTIES
                      ---------                                 ----                    -------
<S>                                                             <C>                     <C>
Agreement of Purchase and Sale and Construction                 26-Feb-01 (as amended   Williams Headquarters
Completion                                                      13-Mar-01, 13-Apr-01,   Building Company and WCL
                                                                13-Sep-01, 30-Apr-02)


Agreement to Terminate Aircraft Dry Lease - N352WC              27-Mar-02               Williams Aircraft Leasing, LLC
                                                                                        (a TWC subsidiary) and WCL

Aircraft Dry Lease - N358WC                                     13-Sep-01               Williams Communications Aircraft,
                                                                                        LLC (a TWC subsidiary) and WCL

Aircraft Dry Lease - N359WC                                     13-Sep-01               Williams Communications Aircraft,
                                                                                        LLC (a TWC subsidiary) and WCL

Bank of Oklahoma Tower Use Agreement                            23-Apr-01               Williams Headquarters Building
                                                                                        Company and WCL

Central Plant Lease Agreement                                   23-Apr-01 (as amended   Williams Headquarters Building
                                                                13-Sep-01)              Company and Williams Technology
                                                                                        Center, LLC (a WCL subsidiary)

Construction, Operating and Maintenance Agreement               1-Jan-97 (as amended    Transcontinental Gas Pipe Line
                                                                19-Feb-99)              Corporation (a TWC subsidiary)
                                                                                        and WCL

Consulting Services Agreement                                   29-Oct-01               Williams Pipe Line Company
                                                                                        (a TWC subsidiary) and WCL

Co-Occupancy Agreement                                          18-Feb-99               Northwest Pipeline Corporation
                                                                                        (a TWC subsidiary) and WCL

Co-Occupancy Agreement                                          22-Feb-99               Williams Gas Pipelines Central, Inc.
                                                                                        (a TWC subsidiary) and WCL


Co-Occupancy Agreement                                          1-May-00                Williams Pipe Line Company
                                                                                        (a TWC subsidiary) and WCL

Co-Occupancy Agreement                                          5-Mar-99 (as amended    Mid-America Pipeline Company
                                                                23-Apr-01)              (a TWC subsidiary) and WCL


Co-Occupancy Agreement                                          5-Mar-99 (as amended    Williams Field Services Company
                                                                23-Apr-01)              (a TWC subsidiary) and WCL

Dark Fiber IRU Agreement                                        26-Feb-01               Transcontinental Gas Pipe Line
                                                                                        Corporation (a TWC Subsidiary)
                                                                                        and WCL

Fairfax Terminal Station Site Lease                             26-Aug-96               Williams Pipe Line Company
                                                                                        (a TWC subsidiary) and WCL

First Amendment to Level 3 Sublease Agreement                   1-Jan-99 (as amended    TWC and WCL
                                                                31-Dec-00 and assigned
                                                                23-Apr-01)
</TABLE>

                                       2

<PAGE>

<TABLE>
<CAPTION>
                      AGREEMENT                                 DATE                    PARTIES
                      ---------                                 ----                    -------
<S>                                                             <C>                     <C>
Lease Agreement                                                 1-Jan-97                Williams Natural Gas Company (a TWC
                                                                                        subsidiary now known as Williams Gas
                                                                                        Pipelines Central, Inc.) and WCL

Lease Agreement                                                 1-Sep-95                Transcontinental Gas Pipe Line
                                                                                        Corporation (a TWC subsidiary) and WCL

Lease Agreement                                                 1-Mar-97                Texas Gas Transmission Corporation
                                                                                        and WCL

Management Services Agreement                                   23-Apr-01 (as amended   Williams Headquarters Building Company
                                                                13-Sep-01)              and Williams Technology Center, LLC
                                                                                        (a WCL subsidiary)

Master Agreement                                                23-Feb-99 (as amended   Williams Pipe Line Company
                                                                23-Apr-01)              (a TWC subsidiary) and WCL

Nondisclosure Agreement                                         29-Oct-01               TWC and WCL

Northwest Plaza Level Amended and Restated Lease                1-Jan-99 (as amended    Original Amended and Restated Lease
Agreement                                                       31-Dec-00)              Agreement between Williams Headquarters
                                                                                        Building Company, Landlord, and WCL,
                                                                                        Tenant; amendment between TWC,
                                                                                        Sublessor, and WCG, Sublessee

Operation, Maintenance and Repair Agreement                     19-Feb-99 (as amended   Mid-America Pipeline Company, Northwest
                                                                31-Aug-99)              Pipeline Corporation, Texas Gas
                                                                                        Transmission Corporation,
                                                                                        Transcontinental Gas Pipe Line
                                                                                        Corporation, Williams Field Services
                                                                                        Company, Williams Gas Pipelines Central,
                                                                                        Inc. and Williams Pipe Line Company and
                                                                                        WCL

Partial Assignment and Assumption Agreement                     26-Feb-01               Williams Headquarters Building Company
                                                                                        and Williams Technology Center, LLC
                                                                                        (a WCL subsidiary)

Sale Agreement                                                  14-Feb-97               Williams Pipe Line Company
                                                                                        (a TWC subsidiary) and WCL

Southwest Plaza Level Amended and Restated Lease                1-Jan-99                Williams Headquarters Building Company
Agreement                                                                               and WCL

Sublease Agreement                                              1-May-00                Williams Pipe Line Company (a TWC
                                                                                        subsidiary) and WCG; WCG assigned its
                                                                                        rights to WCL on 2-Apr-02

Technical Services Agreement                                    1998                    Spectrum Network Systems Limited (now
                                                                                        known as PowerTel Limited, a 45% WCG
                                                                                        subsidiary) and Williams International
                                                                                        Services Company (a TWC subsidiary)

Teleport Services Agreement                                     9-Oct-01                Williams Energy Marketing & Trading co.
                                                                                        (a TWC subsidiary) and WCL

The Depot Amended and Restated Lease Agreement                  1-Jan-99 (as amended    Williams Headquarters Building Company
                                                                31-Dec-00 and assigned  and WCL
                                                                23-Apr-01)

TWC Corporate Guarantee                                         23-Apr-01               TWC guaranteed a TWC subsidiary in favor
                                                                                        of a WCL subsidiary

TWC Corporate Guarantee                                         23-Apr-01               TWC guaranteed a TWC subsidiary in favor
                                                                                        of a WCL subsidiary
</TABLE>

                                       3

<PAGE>

<TABLE>
<CAPTION>
                      AGREEMENT                                 DATE                    PARTIES
                      ---------                                 ----                    -------
<S>                                                             <C>                     <C>
TWC Guaranty                                                    23-Apr-01               TWC guaranteed a TWC subsidiary in favor
                                                                                        of a WCL subsidiary

User Agreement for Pipe                                         5-Mar-99 (as amended    Williams Pipe Line Company
                                                                23-Apr-01)              (a TWC subsidiary) and WCL

Utility Service Agreement                                       23-Apr-01 (as amended   Williams Headquarters Building Company
                                                                13-Sep-01)              and Williams Technology Center, LLC
                                                                                        (a WCL subsidiary)

Web Hosting and Streaming Services Agreement                    2-Oct-00                Williams Energy Services, Inc.
                                                                                        (a TWC subsidiary) and WCL

Weld County Sublease Agreement                                  19-Apr-96               Williams Natural Gas Company
                                                                                        (a TWC subsidiary) and WCL

Declaration of Reciprocal Easements (as amended)                15-Oct-02               Williams Headquarters Building Company
                                                                                        and Williams Technology Center, LLC

Membership Unit Purchase Agreement                              15-Oct-02               Williams Aircraft, Inc. and Williams
                                                                                        Communications, LLC

Real Estate Purchase Agreement                                  15-Jul-02               Williams Headquarters Building Company,
                                                                                        Williams Technology Center, LLC,
                                                                                        Williams Communications, LLC, Williams
                                                                                        Communications Group, Inc. and Williams
                                                                                        Aircraft Leasing, LLC

Reaffirmation and Cancellation Agreement                        15-Oct-02               TWC, WCG and its Subsidiaries


All agreement and exhibits related to or incorporated by the foregoing that were entered into to implement the transactions
contemplated thereby, e.g. Assignment and Assumption Agreements, Bills of Sale.
</TABLE>




                                       4






<PAGE>

                                                                       EXHIBIT D
                                                                              TO
                                                                CREDIT AGREEMENT

                           FORM OF TRANSFER AGREEMENT

                             Dated __________, 20__


          Reference is made to the Amended and Restated Credit Agreement, dated
as of October 31, 2002 (such Credit Agreement, as amended or otherwise modified
from time to time, being herein referred to as the "Credit Agreement"), among
The Williams Companies, Inc., as Borrower, Citicorp USA, Inc., as Agent and
Collateral Agent for the Banks, Bank of America N.A., as Syndication Agent, the
Banks and Issuing Banks parties thereto and Salomon Smith Barney Inc., as
Arranger. Terms defined in the Credit Agreement are used herein with the same
meaning.

          _________________________ (the "Assignor") and __________________ (the
"Assignee") agree as follows:

          1. The Assignor hereby sells and assigns to the Assignee, without
     recourse, and the Assignee hereby purchases and assumes from the Assignor,
     an interest in and to all of the Assignor's rights and obligations under
     the Credit Agreement and the other Credit Documents executed in connection
     therewith as of the date hereof equal to the percentage interest specified
     on Schedule 1 hereto of all outstanding rights and obligations under the
     Credit Agreement. After giving effect to such sale and assignment, the
     Assignee's and Assignor's respective Letter of Credit Commitments and LC
     Participation Percentage will be as set forth in Schedule 1.

          2. The Assignor (i) represents and warrants that it is the legal and
     beneficial owner of the interest being assigned by it hereunder and that
     such interest is free and clear of any adverse claim; (ii) makes no
     representation or warranty and assumes no responsibility with respect to
     any statements, warranties or representations made in or in connection with
     the Credit Agreement, the other Credit Documents or other instrument or
     document furnished pursuant thereto or in connection therewith, the
     perfection, existence, sufficiency or value of any Collateral, guaranty or
     insurance or the execution, legality, validity, enforceability,
     genuineness, sufficiency or value of the Credit Agreement, any of the other
     Credit Documents or any other instrument or document furnished pursuant
     thereto or in connection therewith; and (iii) makes no representation or
     warranty and assumes no responsibility with respect to the financial
     condition of the Borrower or any other Person or the performance or
     observance by the Borrower or any other Person of any of its respective
     obligations under the Credit Agreement, the other Credit Documents or any
     other instrument or document furnished pursuant thereto or in connection
     therewith.

          3. The Assignee (i) confirms that it has received a copy of the Credit
     Agreement, together with copies of the financial statements referred to in
     Section 4.1(e) of the Credit Agreement and such other documents and
     information as it has deemed


                                       5

<PAGE>

     appropriate to make its own credit analysis and decision to enter into this
     Transfer Agreement; (ii) agrees that it will, independently and without
     reliance upon the Agent, the Collateral Agent, any Issuing Bank, the
     Assignor, the Collateral 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 action
     under the Credit Agreement, any other Credit Document, or any other
     instrument or document; (iii) confirms that it is an Eligible Assignee;
     (iv) appoints and authorizes each of the Agent and the Collateral Agent,
     respectively, to take such action as agent on its behalf and to exercise
     such powers and discretion under the Credit Agreement as are delegated to
     the Agent and the Collateral Agent, respectively, by the terms thereof,
     together with such powers and discretion as are reasonably incidental
     thereto; (v) agrees that it will perform in accordance with their terms all
     of the obligations which by the terms of the Credit Agreement are required
     to be performed by it as a Bank; and (vi) specifies as its Lending Office
     (and address for notices) the office set forth beneath its name on the
     signature pages hereof.

          4. Following the execution of this Transfer Agreement by the Assignor
     and the Assignee, this Transfer Agreement will be delivered to the Agent
     for acceptance and recording by the Agent. The effective date of this
     Transfer Agreement (the "Effective Date") shall be the date of acceptance
     thereof by the Agent, unless otherwise specified on Schedule 1 hereto.

          5. Upon such acceptance and recording by the Agent, as of the
     Effective Date, (i) the Assignee shall be a party to the Credit Agreement
     and, to the extent provided in this Transfer Agreement, have the rights and
     obligations of a Bank thereunder and under the other Credit Documents and
     (ii) the Assignor shall, to the extent provided in this Transfer Agreement,
     relinquish its rights and be released from its obligations under the Credit
     Agreement and under the other Credit Documents.

          6. Upon such acceptance and recording by the Agent, from and after the
     Effective Date, the Agent shall make all payments under the Credit
     Agreement and the other instruments or documents furnished pursuant thereto
     or in connection therewith in respect of the interest assigned hereby
     (including all payments of principal, interest and fees with respect
     thereto) to the Assignee. The Assignor and Assignee shall make all
     appropriate adjustments in payments under the Credit Agreement and the
     other instruments or documents furnished pursuant thereto or in connection
     therewith for periods prior to the Effective Date directly between
     themselves.

          7. This Transfer Agreement shall be governed by, and construed in
     accordance with, the laws of the State of New York.

          8. This Transfer Agreement 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. Delivery
     of an executed counterpart of Schedule 1 to this Transfer Agreement by
     telecopier shall be as effective as delivery of a manually executed
     counterpart of this Transfer Agreement.


                                       6

<PAGE>


          IN WITNESS WHEREOF, the parties hereto have caused this Transfer
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written, such execution being made on Schedule 1
hereto.














                                        7


<PAGE>

                                   Schedule 1
                                       to
                               Transfer Agreement

<TABLE>
<S>                                                                              <C>
Section 1.
- ---------
LC Participation Percentage interest assigned:                                   ____________%
Assignee's LC Participation Percentage interest before giving effect to this
Transfer Agreement:                                                              ____________%
Assignee's LC Participation Percentage interest after giving effect to this
Transfer Agreement:                                                              ____________%
Assignor's remaining LC Participation Percentage interest after
giving effect to this Transfer Agreement:                                        ____________%


Section 2.
- ---------
U.S. Dollar L/C Commitment interest assigned:                                    $____________
Assignee's U.S. Dollar L/C Commitment before giving effect
to this Transfer Agreement:                                                      $____________
Assignee's U.S. Dollar L/C Commitment after giving effect to this
Transfer Agreement:                                                              $____________
Assignor's remaining U.S. Dollar L/C Commitment after
giving effect to this Transfer Agreement:                                        $____________

Canadian Dollar L/C Commitment interest assigned:                                $____________
Assignee's Canadian Dollar L/C Commitment before giving effect
to this Transfer Agreement:                                                      $____________
Assignee's Canadian Dollar L/C Commitment after giving effect
to this Transfer Agreement:                                                      $____________
Assignor's remaining Canadian Dollar L/C Commitment after
giving effect to this Transfer Agreement:                                        $____________
</TABLE>


<PAGE>


Section 3.


Effective Date: _____________________, 20____


                                       [NAME OF ASSIGNOR], as Assignor


                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:
                                           Dated:


                                       [NAME OF ASSIGNEE], as Assignee


                                       By:
                                           -------------------------------------
                                           Name:
                                           Title:
                                           Dated:

                                       Lending Office (and address for notices):

                                       [Address]


[Approved this ___ day of ______, _______


THE WILLIAMS COMPANIES, INC.


By:
    -------------------------------------
    Name:
    Title:]


[Approved this ___ day of ______, _______


[NAME OF [ISSUING BANK][BANK]], as [Issuing Bank][Bank]

By:
    -------------------------------------
    Name:
    Title:]


[Approved this ___ day of ______, _______


                                       2

<PAGE>

CITICORP USA, INC., as Agent

By:
    -------------------------------------
    Name:
    Title:]














                                       3

<PAGE>

                                                                       EXHIBIT E
                                                                              TO
                                                                CREDIT AGREEMENT

                       FORM OF NOTICE OF LETTER OF CREDIT


                                                                          [Date]



Citicorp USA, Inc., as Agent
for the Banks parties to the Credit
Agreement referred to below
399 Park Avenue
New York, New York 10043

          Attention:  Williams Account Officer

Ladies and Gentlemen:

The undersigned, The Williams Companies, Inc. (the "Borrower"), (a) refers to
that certain Credit Agreement, dated as of October 31, 2002 (as amended or
otherwise modified from time to time, the "Credit Agreement"; the terms defined
therein and not defined herein being used herein as therein defined), among The
Williams Companies, Inc., as Borrower, Citicorp USA, Inc., as Agent and
Collateral Agent for the Banks, Bank of America N.A., as Syndication Agent, the
Banks and Issuing Banks parties thereto and Salomon Smith Barney Inc., as
Arranger; (b) hereby gives you notice, irrevocably, pursuant to Section 2.10 of
the Credit Agreement that the undersigned hereby requests _____________ (the
"Issuing Bank") to issue an irrevocable standby Letter of Credit as set forth
below in such language as the Issuing Bank may deem appropriate and (c) in that
connection sets forth below the information relating to such standby Letter of
Credit (the "Standby Letter of Credit") as required by Section 2.10 of the
Credit Agreement:

     (i)   The Business Day upon which the Standby Letter of Credit will be
           issued is ______________, 20____ (the "Issuance Date").

     (ii)  The account party for the Standby Letter of Credit is the
           _____________.

     (iii) Attached hereto as Exhibit A are the proposed terms of the Standby
           Letter of Credit (including the beneficiary thereof and the nature of
           the transactions or obligations proposed to be supported thereby).

          The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the Issuance Date:

     (a)   the representations and warranties contained in Section 4.1 of the
           Credit Agreement and in each of the Security Documents are correct on
           and as of the

<PAGE>


          Issuance Date, before and after the issuance of the Standby Letter of
          Credit, as though made on and as of such date;

     (b)  no event has occurred and is continuing, or would result from the
          issuance of the Standby Letter of Credit, which constitutes a Default
          or Event of Default;

     (c)  after giving effect to the Standby Letter of Credit and all Letters of
          Credit which have been requested on or prior to the date hereof but
          which have not been made or issued prior to the date hereof, the sum
          of the aggregate principal amount of all Letter of Credit Liabilities
          will not exceed the aggregate of the Letter of Credit Commitments; and

     (d)  after giving effect to the Standby Letter of Credit and all Letters of
          Credit issued on or prior to the date hereof, the sum of the aggregate
          principal amount of all Letters of Credit issued by the Issuing Bank
          to which this issuance request is being made will not exceed the
          Letter of Credit Commitment of such Issuing Bank.

                                        Very truly yours,


                                        THE WILLIAMS COMPANIES, INC.


                                        By:
                                            ------------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------


cc:       Citicorp North America, Inc.
          1200 Smith Street, Suite 2000
          Houston, Texas 77002
          Attn: The Williams Companies, Inc.
                Account Officer

          [Issuing Bank]


                                       2

<PAGE>

                                                                       EXHIBIT F
                                                                              TO
                                                                CREDIT AGREEMENT

                           FORM OF SECURITY AGREEMENT



<PAGE>


                                                                       EXHIBIT G
                                                                              TO
                                                                CREDIT AGREEMENT

                              FORM OF LLC GUARANTY



<PAGE>


                                                                       EXHIBIT H
                                                                              TO
                                                                CREDIT AGREEMENT

                           FORM OF MIDSTREAM GUARANTY



<PAGE>


                                                                       EXHIBIT I
                                                                              TO
                                                                CREDIT AGREEMENT


                            FORM OF PLEDGE AGREEMENT



<PAGE>


                                                                       EXHIBIT J
                                                                              TO
                                                                CREDIT AGREEMENT

                            FORM OF HOLDINGS GUARANTY

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>d00961exv10w4.txt
<DESCRIPTION>GUARANTEE AND COLLATERAL AGREEMENT
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.4
                                                                  EXECUTION COPY


                      FIRST AMENDMENT TO SECURITY AGREEMENT

         This First Amendment dated as of October 31, 2002 (this "Amendment") to
the Security Agreement dated as of July 31, 2002 (as amended and modified from
time to time, the "Security Agreement"), is among The Williams Companies, Inc.
(the "Company"), and each of its Subsidiaries which is or which subsequently
becomes a party to the Security Agreement (together, with the Company, the
"Grantors"), in favor of Citibank, N.A., as collateral trustee ("Collateral
Trustee") for the benefit of the holders of the Secured Obligations. All
capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in the Security Agreement.

                                   WITNESSETH:

         WHEREAS, the parties hereto have agreed to amend certain provisions of
the Security Agreement;

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Security Agreement is hereby amended as follows:

1.       Amendments

         (a) Pursuant to the terms of those two certain Consent and Waivers each
         dated as of September 20, 2002, by and among the Company and the other
         signatories thereto, the Security Agreement was amended to (i) remove
         Williams Field Services - Gulf Coast Company, L.P. as a Grantor and
         (ii) add Williams Gulf Coast Gathering Company, LLC as a Grantor.
         Pursuant to this Amendment, the following additional parties are added
         as Grantors: WFS - Pipeline Company; WFS Gathering Company, L.L.C.;
         Williams Field Services-Matagorda Offshore Company, LLC; Williams Gas
         Processing - Mid Continent Region Company; WFS-OCS Gathering Co.;
         HI-BOL Pipeline Company; Goebel Gathering Company, L.L.C.; Williams
         Petroleum Services, LLC; Longhorn Enterprises of Texas, Inc.; and
         Williams GP LLC. Notwithstanding the foregoing, Williams GP LLC will
         not be deemed to be a Grantor under the Security Agreement until the
         occurrence of (i) the formation of NewGP (as defined in the New Credit
         Agreement) and (ii) the transfer by Williams GP LLC to NewGP of the
         general partnership interests and incentive distribution rights held by
         Williams GP LLC in Williams Energy Partners L.P. Company hereby
         covenants to cause the formation of NewGP and, contemporaneously
         therewith, transfer to NewGP the general partnership interests and
         incentive distribution rights held by Williams GP LLC in Williams
         Energy Partners L.P. promptly following its execution of this
         Amendment.


<PAGE>

         (b) The definition of "General Intangible" or "General Intangibles" set
         forth in Section 1.1 of the Security Agreement is amended by adding the
         phrase "provided, however that "General Intangibles" shall not include
         any general or limited partnership interests, limited liability company
         interests, trust interests, joint ventures interests or any other
         similar equity ownership rights arising under the law of any
         jurisdiction." to the end of such definition.

         (c) The definition of "Investment Property" set forth in Section 1.1 of
         the Security Agreement is amended by adding the phrase "provided,
         however that "Investment Property" shall not include any general or
         limited partnership interests, limited liability company interests,
         trust interests, joint ventures interests or any other similar equity
         ownership rights arising under the law of any jurisdiction unless such
         equity ownership interests or rights constitute Proceeds." to the end
         of such definition.

         (d) The following sentence shall be added to the end of Section 2.1 of
         the Security Agreement: "Notwithstanding the general grant of a
         security interest set forth above in this Section 2.1, (i) the security
         interest in the oil of Williams Alaska Petroleum, Inc. ("WAPI") that is
         transported through the Trans-Alaska Pipeline System shall attach only
         at the time such oil is delivered to WAPI through the Trans-Alaska
         Pipeline System at the outlet flange measuring device located at North
         Pole, Alaska and (ii) Excluded Collateral (as defined in the New Credit
         Agreement and the Multiyear Williams Credit Agreement) shall not
         constitute Collateral under this Security Agreement."

         (e) Section 3.6 of the Security Agreement is hereby amended and
         restated in its entirety and replaced with the following:

                           Section 3.6 Control of Investment Property. Each
                  Grantor shall take any and all actions reasonably requested by
                  Collateral Trustee to ensure that Collateral Trustee has a
                  first priority security interest in (subject only to Permitted
                  Liens other than the Permitted Liens described in Schedule III
                  Paragraphs y, gg, and jj from the New Credit Agreement and
                  Schedule VI Paragraphs y, gg, and jj from the Multiyear
                  Williams Credit Agreement) and "control" (within the meaning
                  of Section 8-106 of the UCC) of Collateral constituting
                  Investment Property and deposit accounts (as defined in the
                  UCC).

         (f) The following Section 3.11 is hereby added to the Security
         Agreement:

                           3.11 Permitted Dispositions. Notwithstanding anything
                  to the contrary in Section 3 of this Security Agreement, the
                  Grantors shall not be restricted from completing or permitting
                  any dispositions that can be completed without violating any
                  of the following provisions: Sections 5.2(e) and 5.2(f) of the
                  New Credit Agreement, and Sections 5.02(f) and 5.02(l) of the
                  Multiyear Williams Credit Agreement.




<PAGE>

         (g) Section 7.2 of the Security Agreement is hereby amended and
         restated in its entirety and replaced with the following:

                           Section 7.2 Action by Nominees. Notwithstanding
                  anything to the contrary in this Security Agreement, any and
                  all of the rights, powers and remedies of Collateral Trustee
                  under this Security Agreement may be exercised by any
                  nominee(s) of the Collateral Trustee or any other agent,
                  person, trustee or nominee acting on behalf of the Collateral
                  Trustee, and Collateral Trustee may assign or delegate all or
                  any part of its rights and obligations under this Security
                  Agreement to any one or more agent(s), person(s), trustee(s)
                  or other nominee(s).

         (h) Section 8.16 of the Security Agreement is hereby amended and
         restated in its entirety and replaced with the following:

                           Section 8.16 Incorporated Definitions and Provisions.
                  All defined terms and other provisions (including, without
                  limitation, the amendment provisions), that are incorporated
                  into this Security Agreement by reference to other agreements
                  shall incorporate into this Security Agreement the provisions
                  of such other agreements that exist as of the date hereof;
                  however, such provisions shall be automatically modified
                  herein by any amendment or modification that takes place after
                  the date hereof in such other referenced agreement(s); subject
                  to the following limitations: (a) no such amendment or
                  modification shall be effective with respect to this Security
                  Agreement until Collateral Trustee shall have received a copy
                  of such amendment or modification and (b) no provision of any
                  such amendment or modification that imposes any additional
                  liability, obligation or adverse effect on the Collateral
                  Trustee shall be effective with respect to this Security
                  Agreement unless the Collateral Trustee has executed a written
                  consent to such provision or to the amendment or modification
                  in which such provision is set forth.

         (i) The following Section 8.18 is hereby added to the Security
         Agreement:

                           Section 8.18 Joinder. Pursuant to the terms of the
                  Credit Documents certain Subsidiaries (hereafter referred to
                  as the "Joining Subsidiaries") may desire to or be required to
                  join this Security Agreement as Grantors. In connection with
                  any such joinder the Joining Subsidiary shall cause to be
                  executed and delivered (a) a joinder agreement substantially
                  in the form of the joinder agreement attached hereto as
                  Schedule IV and (b) authorization documentation, corporate
                  documentation, perfection documentation and opinion letters
                  reasonably satisfactory to the Collateral Trustee reflecting
                  the status of such Joining Subsidiary and the enforceability
                  of such agreements with respect to such Joining Subsidiary;
                  provided, however, that the Collateral Trustee shall have no
                  obligations with respect to the additional Collateral that
                  results from the addition of a Joining Subsidiary as a Grantor
                  pursuant to this Security Agreement





<PAGE>

                  prior to the delivery of such additional Collateral, and
                  Collateral Trustee shall have no duty to solicit the delivery
                  of any Collateral from any Grantor.

         (j) Schedule I to the Security Agreement is hereby amended and restated
         in its entirety and replaced with Schedule I attached hereto.

         (k) Schedule II to the Security Agreement is hereby amended and
         restated in its entirety and replaced with Schedule II attached hereto.

         (l) A new Schedule IV to the Security Agreement is hereby added which
         is the document attached as Schedule IV hereto.

2. Conditions to Effectiveness. This Amendment shall be deemed effective (the
"Effective Date") upon the satisfaction of the conditions precedent as set out
in Section 3.1 of that certain Amended and Restated Credit Agreement dated as of
October 31, 2002, among Company and the Financial Institutions named therein,
without giving effect to the terms of Section 3.3; provided, however, that the
Collateral Trustee shall have no obligations with respect to the additional
Collateral that results from the addition of Grantors as parties to the Security
Agreement pursuant to this Amendment prior to the delivery of such additional
Collateral, and the Collateral Trustee shall have no duty to solicit the
delivery of any Collateral from any Grantor. Notwithstanding anything to the
contrary herein, any provision or portion of a provision in this Amendment that
is or is determined to be a release of Collateral shall not be effective to
release such Collateral until the Collateral Trustee has received satisfactory
documentation that such release of Collateral is permitted by or has been
properly approved in accordance with the terms of the Collateral Trust
Agreement.

3. Governing Law. This Amendment shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.

4. Reference to and Effect on the Security Agreement. The amendments set forth
herein are limited precisely as written and shall not be deemed to be a consent
or waiver to, or modification of any other term or condition in the Security
Agreement or any of the documents referred to therein. Except as expressly
amended and consented hereby, the terms and conditions of the Security Agreement
shall continue in full force and effect, and as amended hereby, the Security
Agreement is ratified and confirmed in all respects. On and after the Effective
Date, the Security Agreement shall be deemed to mean the Security Agreement as
amended hereby.

5. Counterparts. This Amendment may be executed in several counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.

Schedule I:       Schedule I to Security Agreement
Schedule II:      Schedule II to Security Agreement
Schedule IV:      Form of Joinder Agreement



<PAGE>

         IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this Amendment to be signed in their
respective names.


                                      THE WILLIAMS COMPANIES, INC.,
                                      as Grantor


                                      By:     /s/ James G. Ivey
                                            ----------------------------------
                                      Name:   James G. Ivey
                                      Title:  Treasurer



                                      WORTHINGTON GENERATION, L.L.C.,
                                      as Grantor


                                      By:     /s/ William E. Hobbs
                                            ----------------------------------
                                      Name:   William E. Hobbs
                                      Title:  President



                                      WILLIAMS ALASKA PETROLEUM, INC.,
                                      as Grantor


                                      By:     /s/ Ralph A. Hill
                                            ----------------------------------
                                      Name:   Ralph A. Hill
                                      Title:  Chief Executive Officer



                                      WILLIAMS ALASKA PIPELINE COMPANY, L.L.C.,
                                      as Grantor


                                      By:     /s/ Ralph A. Hill
                                            ----------------------------------
                                      Name:   Ralph A. Hill
                                      Title:  Chief Executive Officer



                                      WILLIAMS REFINING & MARKETING, L.L.C.,
                                      as Grantor


                                      By:     /s/ James G. Ivey
                                            ----------------------------------
                                      Name:   James G. Ivey
                                      Title:  Assistant Treasurer
<PAGE>



                                    WILLIAMS PETROLEUM SERVICES, LLC,
                                    as Grantor


                                    By:  WILLIAMS ENERGY SERVICES, LLC, its sole
                                         member


                                    By:     /s/ Phillip D. Wright
                                           -------------------------
                                    Name:  Phillip D. Wright
                                    Title: President



                                    WILLIAMS PETROLEUM PIPELINE SYSTEMS,
                                    INC., as Grantor


                                    By:      /s/ Ralph A. Hill
                                            ---------------------
                                    Name:   Ralph A. Hill
                                    Title:  Senior Vice President



                                    WILLIAMS MID-SOUTH PIPELINES, LLC,
                                    as Grantor


                                    By:      /s/ James G. Ivey
                                            -------------------
                                    Name:   James G. Ivey
                                    Title:  Assistant Treasurer



                                    WILLIAMS GENERATION COMPANY-
                                    HAZLETON, as Grantor


                                    By:      /s/ Ralph A. Hill
                                            ------------------
                                    Name:   Ralph A. Hill
                                    Title:  Vice President



                                    WILLIAMS OLEFINS, L.L.C., as Grantor



                                    By:       /s/ James G. Ivey
                                            -------------------
                                    Name:   James G. Ivey
                                    Title:  Assistant Treasurer




<PAGE>


                                WILLIAMS OLEFINS FEEDSTOCK PIPELINES,
                                L.L.C., as Grantor



                                By:      /s/ James G. Ivey
                                        -------------------
                                Name:   James G. Ivey
                                Title:  Assistant Treasurer


                                WILLIAMS NATURAL GAS LIQUIDS, INC.,
                                as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President



                                WILLIAMS MERCHANT SERVICES COMPANY, INC.,
                                as Grantor



                                By:      /s/ William E. Hobbs
                                        ---------------------
                                Name:   William E. Hobbs
                                Title:  President


                                WILLIAMS MIDSTREAM NATURAL GAS
                                LIQUIDS, INC., as Grantor



                                By:       /s/ Alan S. Armstrong
                                         ----------------------
                                Name:    Alan S. Armstrong
                                Title:   Senior Vice President



                                WILLIAMS MEMPHIS TERMINAL, INC.,
                                as Grantor


                                By:      /s/ James G. Ivey
                                        -------------------
                                Name:   James G. Ivey
                                Title:  Assistant Treasurer


<PAGE>



                                WILLIAMS GULF COAST GATHERING
                                COMPANY, LLC, as Grantor


                                By:      /s/ James G. Ivey
                                        -------------------
                                Name:   James G. Ivey
                                Title:  Assistant Treasurer



                                WILLIAMS GP, LLC, as Grantor


                                By:      /s/ Don R. Wellendorf
                                        -------------------------------------
                                Name:   Don R. Wellendorf
                                Title:  President and Chief Executive Officer



                                WILLIAMS GENERATING MEMPHIS, LLC, as Grantor



                                By:       /s/ James G. Ivey
                                          -------------------
                                Name:    James G. Ivey
                                Title:   Assistant Treasurer



                                WILLIAMS GAS PROCESSING - WAMSUTTER
                                COMPANY, as Grantor



                                By:       /s/ Alan S. Armstrong
                                          ----------------------
                                Name:    Alan S. Armstrong
                                Title:   Senior Vice President



                                WILLIAMS GAS PROCESSING COMPANY,
                                as Grantor



                                By:       /s/ Alan S. Armstrong
                                          ----------------------
                                Name:    Alan S. Armstrong
                                Title:   Senior Vice President



<PAGE>




                                WILLIAMS GAS PROCESSING - MID-CONTINENT
                                REGION COMPANY, as Grantor


                                By:      /s/ Alan S. Armstrong
                                         ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President



                                WILLIAMS FIELD SERVICES GROUP, INC.,
                                as Grantor



                                By:       /s/ Alan S. Armstrong
                                          ----------------------
                                Name:    Alan S. Armstrong
                                Title:   Senior Vice President



                                WILLIAMS FIELD SERVICES COMPANY,
                                as Grantor



                                By:       /s/ Alan S. Armstrong
                                         ----------------------
                                Name:    Alan S. Armstrong
                                Title:   Senior Vice President



                                WILLIAMS FIELD SERVICES - MATAGORDA
                                OFFSHORE COMPANY, LLC, as Grantor


                                By:      /s/ James G. Ivey
                                        -------------------
                                Name:   James G. Ivey
                                Title:  Assistant Treasurer


                                WILLIAMS EXPRESS, INC. (A DELAWARE CORPORATION),
                                as Grantor



                                By:      /s/ Ralph A. Hill
                                        -----------------------
                                Name:   Ralph A. Hill
                                Title:  Chief Executive Officer


<PAGE>


                                WILLIAMS EXPRESS, INC. (AN ALASKA CORPORATION),
                                as Grantor



                                By:      /s/ Ralph A. Hill
                                        -----------------------
                                Name:   Ralph A. Hill
                                Title:  Chief Executive Officer



                                WILLIAMS ETHANOL SERVICES, INC.,
                                as Grantor



                                By:      /s/ Paul W. Nelson
                                        -------------------
                                Name:   Paul W. Nelson
                                Title:  Treasurer



                                WILLIAMS ENERGY SERVICES, LLC,
                                as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President


                                WILLIAMS BIO-ENERGY, L.L.C., as Grantor



                                By:      /s/ James G. Ivey
                                        --------------------
                                Name:   James G. Ivey
                                Title:  Assistant Treasurer



                                WILLIAMS ALASKA AIR CARGO PROPERTIES, L.L.C.,
                                as Grantor

                                By:  WILLIAMS ALASKA PETROLEUM, INC.,
                                     its sole member


                                By:      /s/ Ralph A. Hill
                                        -----------------------
                                Name:   Ralph A. Hill
                                Title:  Chief Executive Officer



<PAGE>



                                WFS-OFFSHORE GATHERING COMPANY, as Grantor



                                By:       /s/ Alan S. Armstrong
                                         ----------------------
                                Name:    Alan S. Armstrong
                                Title:   Senior Vice President



                                WFS-NGL PIPELINE COMPANY, INC.,
                                as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President



                                WFS-LIQUIDS COMPANY, as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President



                                WFS GATHERING COMPANY, L.L.C.,
                                as Grantor



                                By:       /s/ James G. Ivey
                                         -------------------
                                Name:    James G. Ivey
                                Title:   Assistant Treasurer



                                WFS ENTERPRISES, INC., as Grantor



                                By:      /s/ Mary Jane Bittick
                                        ----------------------
                                Name:   Mary Jane Bittick
                                Title:  Treasurer



<PAGE>



                                WFS - PIPELINE COMPANY, as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President



                                WFS - OCS GATHERING CO., as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President


                                NORTH PADRE ISLAND SPINDOWN, INC.,
                                AS GRANTOR



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President



                                MEMPHIS GENERATION, L.L.C.,
                                as Grantor



                                By:      /s/ William E. Hobbs
                                        ---------------------
                                Name:   William E. Hobbs
                                Title:  President



                                MAPL INVESTMENTS, INC.,
                                as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President





<PAGE>


                                MAPCO INC., as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President



                                LONGHORN ENTERPRISES OF TEXAS, INC.,
                                as Grantor



                                By:      /s/ Ralph A. Hill
                                        ---------------------
                                Name:   Ralph A. Hill
                                Title:  Senior Vice President



                                JUAREZ PIPELINE COMPANY,
                                as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President


                                HI-BOL PIPELINE COMPANY,
                                as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President



                                GOEBEL GATHERING COMPANY, L.L.C.,
                                as Grantor



                                By:      /s/ James G. Ivey
                                        -------------------
                                Name:   James G. Ivey
                                Title:  Assistant Treasurer



<PAGE>


                                GAS SUPPLY, L.L.C., as Grantor



                                By:      /s/ Ralph A. Hill
                                        ------------------
                                Name:   Ralph A. Hill
                                Title:  Senior Vice President



                                BLACK MARLIN PIPELINE COMPANY,
                                as Grantor



                                By:      /s/ Alan S. Armstrong
                                        ----------------------
                                Name:   Alan S. Armstrong
                                Title:  Senior Vice President



Each of the entities reflected on the following ten (10) pages is executing this
Amendment as a Financial Institution party to the Amended and Restated Credit
Agreement dated as of October 31, 2002 among the Company and the Financial
Institutions named therein.



                                CITICORP USA, INC., as Agent and
                                Collateral Agent

                                By  /s/ Todd J. Mogil
                                Name:   Todd J. Mogil
                                Title:  Vice President



                                BANKS AND ISSUING BANKS:

                                CITICORP N.A., AS ISSUING BANK

                                By  /s/ Todd J. Mogil
                                Name:   Todd J. Mogil
                                Title:  Attorney-in-Fact


<PAGE>




                                CITICORP USA, INC.

                                By   /s/ Todd J. Mogil
                                Name:   Todd J. Mogil
                                Title:  Vice President


                                THE BANK OF NOVA SCOTIA


                                By:  /s/ N. Bell
                                Name:   N. Bell
                                Title:  Senior Manager


                                BANK OF AMERICA N.A., as Issuing Bank and Bank


                                By:     /s/  Claire Liu
                                Name:   Claire Liu
                                Title:  Managing Director


                                JP MORGAN CHASE BANK

                                By:  /s/ Robert W. Traband
                                Name:   Robert W. Traband
                                Title:  Vice President



                                TORONTO DOMINION (TEXAS), INC.


                                By  /s/  Jill Hall
                                Name:   Jill Hall
                                Title:  Vice President


<PAGE>


                                CREDIT LYONNAIS NEW YORK BRANCH


                                By  /s/ O. Audermard
                                Name:   O. Audermard
                                Title:  Senior Vice President



                                MERRILL LYNCH CAPITAL CORP.


                                By:  /s/ Carol J.E. Feeley
                                Name:   Carol J.E. Feeley
                                Title:  Vice President



                                LEHMAN COMMERCIAL PAPER INC.,


                                By:  /s/ Francis Chang
                                Name:   Francis Chang
                                Title:  Authorized Signatory


<PAGE>


                  Each of the entities reflected on the following pages is
executing this Amendment as a Financial Institution party to the First Amended
and Restated Credit Agreement, dated of October 31, 2002, among the Company,
Northwest Pipeline Corporation, Transcontinental Gas Pipeline Corporation, Texas
Gas Transmission and the Financial Institutions named therein:





<PAGE>


                             AGENT:

                             CITICORP USA, INC., as Agent

                             By   /s/ Todd J. Mogil
                             Name:   Todd J. Mogil
                             Title:  Vice President



                             CO-SYNDICATION AGENTS:

                             JPMORGAN CHASE BANK
                             (formerly known as
                             THE CHASE MANHATTAN BANK), as
                             Co-Syndication Agent


                             By:     /s/  Robert W. Traband
                             Name:   Robert W. Traband
                             Title:  Vice President



                             COMMERZBANK AG,
                             as Co-Syndication Agent

                             By  /s/  Harry Yergey
                             Name:   Harry Yergey
                             Title:  Senior Vice Pres. and Manager

                             By  /s/  Brian Campbell
                             Name:   Brian Campbell
                             Title:  Senior Vice President



                             CREDIT LYONNAIS NEW YORK BRANCH
                             as Documentation Agent

                             By   /s/ O. Audemard
                             Name:   O. Audemard
                             Title:  Senior Vice President


                             BANKS:
                             CITICORP USA, INC.

                             By  /s/ Todd J. Mogil
                             Name:   Todd J. Mogil
                             Title:  Vice President


<PAGE>


                             CITICORP N.A., as Collateral Trustee

                             By  /s/ Camille Tamao
                             Name:   Camille Tamao
                             Title:  Vice President


                             BANK OF AMERICA, N.A.

                             By    /s/  Claire Liu
                             Name:   Claire Liu
                             Title:  Managing Director


                             BANK ONE, N.A. (MAIN OFFICE - CHICAGO)


                             By  /s/ Jeanie C. Gonzalez
                             Name:   Jeanie C. Gonzalez
                             Title:  Director




                             JPMORGAN CHASE BANK
                             (formerly known as
                             THE CHASE MANHATTAN BANK)


                             By   /s/  Robert W. Traband
                             Name:   Robert W. Traband
                             Title:  Vice President



                             COMMERZBANK AG
                             NEW YORK AND GRAND CAYMAN
                             BRANCHES

                             By  /s/ Brian J. Campbell
                             Name:   Brian J. Campbell
                             Title:  Senior Vice President

                             By  /s/ W. David Suttles
                             Name:   W. David Suttles
                             Title:  Vice President


<PAGE>




                             CREDIT LYONNAIS NEW YORK BRANCH


                             By  /s/ O. Audermard
                             Name:   O. Audermard
                             Title:  Senior Vice President



                             NATIONAL WESTMINSTER, PLC


                             By:  /s/ Charles Greer
                             Name:   Charles Greer
                             Title:  Senior Vice President



                             ABN AMRO BANK, N.V.


                             By  /s/ Frank R. Russo, Jr.
                             Name:   Frank R. Russo, Jr.
                             Title:  Group Vice President

                             By  /s/ Jeffrey G. White
                             Name:   Jeffrey G. White
                             Title:  Vice President



                             BANK OF MONTREAL


                             By  /s/ Mary Lee Latta
                             Name:   Mary Lee Latta
                             Title:  Director




                             THE BANK OF NEW YORK


                             By  /s/ Raymond J. Palmer
                             Name:   Raymond J. Palmer
                             Title:  Vice President


<PAGE>



                             BARCLAYS BANK PLC


                             By   /s/  Nicholas A. Bell
                             Name:   Nicholas A. Bell
                             Title:  Director, Loan Transaction Management



                             CIBC INC.


                             By  /s/ George Knight
                             Name:   George Knight
                             Title:  Managing Director
                                     CIBC World Markets Corp. As Agent



                             CREDIT SUISSE FIRST BOSTON


                             By   /s/ James P. Moran
                             Name:   James P. Moran
                             Title:  Director

                             By  /s/  Ian W. Nalitt
                             Name:   Ian W. Nalitt
                             Title:  Associate



                             ROYAL BANK OF CANADA


                             By   /s/  Peter Barnes
                             Name:   Peter Barnes
                             Title:  Senior Manager



                             THE BANK OF TOKYO-MITSUBISHI, LTD.,
                             HOUSTON AGENCY


                             By  /s/ Kelton Glasscock
                             Name:   Kelton Glasscock
                             Title:  Vice President and Manager


                             By  /s/ Jay Fort
                             Name:   Jay Fort
                             Title:  Vice President


<PAGE>



                             FLEET NATIONAL BANK
                             f/k/a Bank Boston, N.A.


                             By  /s/  Matthew W. Speh
                             Name:   Matthew W. Speh
                             Title:  Authorized Officer



                             SOCIETE GENERALE, SOUTHWEST AGENCY


                             By  /s/  J. Douglas McMurrey, Jr.
                             Name:   J. Douglas McMurrey, Jr.
                             Title:  Managing Director



                             TORONTO DOMINION (TEXAS), INC.


                             By  /s/  Jill Hall
                             Name:   Jill Hall
                             Title:  Vice President



                             UBS AG, STAMFORD BRANCH


                             By:  /s/ Kelly Smith
                             Name:   Kelly Smith
                             Title:  Director


                             By:  /s/ Robert Reuter
                             Name:   Robert Reuter
                             Title:  Executive Director



                             WELLS FARGO BANK TEXAS, N.A.


                             By   /s/ J. Alan Alexander
                             Name:   J. Alan Alexander
                             Title:  Vice President


<PAGE>


                             WESTLB AG, NEW YORK BRANCH


                             By:  /s/ Salvatore Battinelli
                             Name:   Salvatore Battinelli
                             Title:  Managing Director
                                     Credit Department



                             By  /s/  Duncan M. Robertson
                             Name:   Duncan M. Robertson
                             Title:  Director


                             CREDIT AGRICOLE INDOSUEZ


                             By  /s/  Larry Materi
                             Name:   Larry Materi
                             Title:  Vice President

                             By  /s/  Paul A. Dytrych
                             Name:   Paul A. Dytrych
                             Title:  Vice President
                                     Senior Relationship Manager



                             SUNTRUST BANK


                             By   /s/ Steven J. Newby
                             Name:   Steven J. Newby
                             Title:  Director



                             ARAB BANKING CORPORATION (B.S.C.)


                             By  /s/  Robert J. Ivosevich
                             Name:   Robert J. Ivosevich
                             Title:  Deputy General Manager


                             By  /s/  Barbara C. Sanderson
                             Name:   Barbara C. Sanderson
                             Title:  VP Head of Credit



                             BNP PARIBAS, HOUSTON AGENCY


                             By  /s/   Larry Robinson
                             Name:   Larry Robinson
                             Title:  Vice President

                             By  /s/  Mark A. Cox
                             Name:   Mark A. Cox
                             Title:  Director


<PAGE>



                             DZ BANK AG DEUTSCHE
                             ZENTRALGENOSSENSCHAFTSBANK, NEW YORK
                             BRANCH


                             By  /s/ Mark K. Connelly
                             Name:   Mark K. Connelly
                             Title:  Vice President


                             By  /s/ Richard W. Wilbert
                             Name:   Richard W. Wilbert
                             Title:  Vice President


                             KBC BANK N.V.


                             By: /s/ Michael V. Curran
                             Name:   Michael V. Curran
                             Title:  First Vice President


                             By: /s/ Diane M. Grimmig
                             Name:   Diane M. Grimmig
                             Title:  First Vice President


                             WACHOVIA BANK, NATIONAL ASSOCIATION


                             By: /s/ David E. Humphreys
                             Name:   David E. Humphreys
                             Title:  Vice President


                             MIZUHO CORPORATE BANK, LTD


                             By  /s/ Jacques Azagury
                             Name:   Jacques Azagury
                             Title:  Senior Vice President and Manager


                             SUMITOMO MITSUI BANKING CORPORATION


                             By  /s/ Leo E. Pagarigan
                             Name:   Leo E. Pagarigan
                             Title:  Senior Vice President


                             COMMERCE BANK, N.A.


                             By  /s/ Dennis R. Block
                             Name:   Dennis R. Block
                             Title:  Senior Vice President
<PAGE>



                                   SCHEDULE I
                                       TO
                               SECURITY AGREEMENT
                 STATE OF ORGANIZATION AND ADDRESSES OF GRANTORS

<Table>
<Caption>
                        Entity                                     Principal Address                        State of
                                                                                                         Incorporation
     --------------------------------------        -----------------------------------------             --------------
<S>                                                <C>                                                   <C>
     Black Marlin Pipeline Company                 One Williams Center, Tulsa, OK 74172                        TX

     Gas Supply, L.L.C.                            One Williams Center, Tulsa, OK 74172                        DE

     Goebel Gathering Company, L.L.C.              One Williams Center, Tulsa, OK 74172                        DE

     HI-BOL Pipeline Company                       One Williams Center, Tulsa, OK 74172                        DE

     Juarez Pipeline Company                       One Williams Center, Tulsa, OK 74172                        DE

     Longhorn Enterprises of Texas, Inc.           One Williams Center, Tulsa, OK 74172                        DE

     MAPCO Inc.                                    One Williams Center, Tulsa, OK 74172                        DE

     MAPL Investments, Inc.                        One Williams Center, Tulsa, OK 74172                        DE

     Memphis Generation, L.L.C.                    One Williams Center, Tulsa, OK 74172                        DE

     North Padre Island Spindown, Inc.             One Williams Center, Tulsa, OK 74172                        DE

     The Williams Companies, Inc.                  One Williams Center, Tulsa, OK 74172                        DE

     WFS Enterprises, Inc.                         One Williams Center, Tulsa, OK 74172                        DE

     WFS Gathering Company, L.L.C.                 One Williams Center, Tulsa, OK 74172                        DE

     WFS-Liquids Company                           One Williams Center, Tulsa, OK 74172                        DE

     WFS-NGL Pipeline Company, Inc.                One Williams Center, Tulsa, OK 74172                        DE

     WFS-OCS Gathering Co.                         One Williams Center, Tulsa, OK 74172                        DE
</Table>




<PAGE>

<Table>
<Caption>
                        Entity                                     Principal Address                        State of
                                                                                                         Incorporation
     --------------------------------------        -----------------------------------------             --------------
<S>                                                <C>                                                   <C>
     WFS-Offshore Gathering Company                One Williams Center, Tulsa, OK 74172                        DE

     WFS - Pipeline Company                        One Williams Center, Tulsa, OK 74172                        DE

     Williams Alaska Air Cargo Properties, L.L.C.  One Williams Center, Tulsa, OK 74172                        AK

     Williams Alaska Petroleum, Inc.               One Williams Center, Tulsa, OK 74172                        AK

     Williams Alaska Pipeline Company, L.L.C.      One Williams Center, Tulsa, OK 74172                        DE

     Williams Bio-Energy, LLC                      One Williams Center, Tulsa, OK 74172                        DE

     Williams Energy Services, LLC                 One Williams Center, Tulsa, OK 74172                        DE

     Williams Ethanol Services, Inc.               1300 South Second Street, Pekin, IL 61554                   DE

     Williams Express, Inc. (AK)                   One Williams Center, Tulsa, OK 74172                        AK

     Williams Express, Inc. (DE)                   One Williams Center, Tulsa, OK 74172                        DE

     Williams Field Services Company               P.O. Box 3102, Tulsa, OK  74101                             DE

     Williams Field Services Group, Inc.           P.O. Box 3102, Tulsa, OK  74101                             DE

     Williams Field Services-Matagorda Offshore    One Williams Center, Tulsa, OK  74172                       DE
        Company, LLC

     Williams Gas Processing Company               P.O. Box 3102 Tulsa, OK 74101                               DE

     Williams Gas Processing - Mid Continent       One Williams Center, Tulsa, OK 74172                        DE
        Region Company
</Table>




<PAGE>

<Table>
<Caption>
                        Entity                                     Principal Address                        State of
                                                                                                         Incorporation
     --------------------------------------        -----------------------------------------             --------------
<S>                                                <C>                                                   <C>
     Williams Gas Processing -Wamsutter Company    One Williams Center, Tulsa, OK 74172                        DE

     Williams Generating Memphis, LLC              One Williams Center, Tulsa, OK 74172                        DE

     Williams Generation Company - Hazleton        One Williams Center, Tulsa, OK 74172                        DE

     Williams GP LLC                               One Williams Center, Tulsa, OK 74172                        DE

     Williams Gulf Coast Gathering Company, LLC    One Williams Center, Tulsa, OK 74172                        DE

     Williams Memphis Terminal, Inc.               One Williams Center, Tulsa, OK 74172                        DE

     Williams Merchant Services Company, Inc       One Williams Center, Tulsa, OK 74172                        DE

     Williams Mid-South Pipelines, LLC             One Williams Center, Tulsa, OK 74172                        DE

     Williams Midstream Natural Gas Liquids, Inc.  One Williams Center, Tulsa, OK 74172                        DE

     Williams Natural Gas Liquids, Inc.            One Williams Center, Tulsa, OK 74172                        DE

     Williams Olefins Feedstock Pipelines, L.L.C.  One Williams Center, Tulsa, OK 74172                        DE

     Williams Olefins, L.L.C.                      One Williams Center, Tulsa, OK 74172                        DE

     Williams Petroleum Pipeline Systems, Inc.     One Williams Center, Tulsa, OK 74172                        DE

     Williams Petroleum Services, LLC              One Williams Center, Tulsa, OK 74172                        DE

</Table>



<PAGE>

<Table>
<Caption>
                        Entity                                     Principal Address                        State of
                                                                                                         Incorporation
     --------------------------------------        -----------------------------------------             --------------
<S>                                                <C>                                                   <C>
     Williams Refining & Marketing, L.L.C.         One Williams Center, Tulsa, OK 74172                        DE

     Worthington Generation, L.L.C.                One Williams Center, Tulsa, OK 74172                        DE
</Table>




<PAGE>


                                   SCHEDULE II
                                       TO
                               SECURITY AGREEMENT

                      REQUIRED FINANCING STATEMENT FILINGS

<Table>
<Caption>
                            Entity                             UCC Central Filing Offices of the Secretary of
                                                                       State for the Following
                                                                               States
     -------------------------------------------               ----------------------------------------------
<S>                                                            <C>
     1.       Black Marlin Pipeline Company                                        TX

     2.       Gas Supply, L.L.C.                                                   DE

     3.       Goebel Gathering Company, L.L.C.                                     DE

     4.       HI-BOL Pipeline Company                                              DE

     5.       Juarez Pipeline Company                                              DE

     6.       Longhorn Enterprises of Texas, Inc.                                  DE

     7.       MAPCO Inc.                                                           DE

     8.       MAPL Investments, Inc.                                               DE

     9.       Memphis Generation, L.L.C.                                           DE

     10.      North Padre Island Spindown, Inc.                                    DE

     11.      The Williams Companies, Inc.                                         DE

     12.      WFS Enterprises, Inc.                                                DE

     13.      WFS Gathering Company, L.L.C.                                        DE

     14.      WFS-Liquids Company                                                  DE

     15.      WFS-NGL Pipeline Company, Inc.                                       DE
</Table>





<PAGE>



<Table>
<Caption>
                            Entity                             UCC Central Filing Offices of the Secretary of
                                                                       State for the Following
                                                                               States
     -------------------------------------------               ----------------------------------------------
<S>                                                            <C>
     16.      WFS-OCS Gathering Co.                                                DE

     17.      WFS-Offshore Gathering Company                                       DE

     18.      WFS Pipeline Company                                                 DE

     19.      Williams Alaska Air Cargo Properties, L.L.C.                         AK

     20.      Williams Alaska Petroleum, Inc.                                      AK

     21.      Williams Alaska Pipeline Company, L.L.C.                             DE

     22.      Williams Bio-Energy, LLC                                             DE

     23.      Williams Energy Services, LLC                                        DE

     24.      Williams Ethanol Services, Inc.                                      DE

     25.      Williams Express, Inc. (AK)                                          AK

     26.      Williams Express, Inc. (DE)                                          DE

     27.      Williams Field Services Company                                      DE

     28.      Williams Field Services Group, Inc.                                  DE

     29.      Williams Field Services-Matagorda Offshore                           DE
              Company, LLC

     30.      Williams Gas Processing Company                                      DE

     31.      Williams Gas Processing - Mid Continent                              DE
              Region Company
</Table>


<PAGE>


<Table>
<Caption>
                            Entity                             UCC Central Filing Offices of the Secretary of
                                                                       State for the Following
                                                                               States
     -------------------------------------------               ----------------------------------------------
<S>                                                            <C>
     32.      Williams Gas Processing -Wamsutter Company                           DE

     33.      Williams Generating Memphis, LLC                                     DE

     34.      Williams Generation Company - Hazleton                               DE

     35.      Williams GP LLC                                                      DE

     36.      Williams Gulf Coast Gathering Company, LLC                           DE

     37.      Williams Memphis Terminal, Inc.                                      DE

     38.      Williams Merchant Services Company, Inc                              DE

     39.      Williams Mid-South Pipelines, LLC                                    DE

     40.      Williams Midstream Natural Gas Liquids, Inc.                         DE

     41.      Williams Natural Gas Liquids, Inc.                                   DE

     42.      Williams Olefins Feedstock Pipelines, L.L.C.                         DE

     43.      Williams Olefins, L.L.C.                                             DE

     44.      Williams Petroleum Pipeline Systems, Inc.                            DE

     45.      Williams Petroleum Services, LLC                                     DE

     46.      Williams Refining & Marketing, L.L.C.                                DE
</Table>




<PAGE>

<Table>
<Caption>
                            Entity                             UCC Central Filing Offices of the Secretary of
                                                                       State for the Following
                                                                               States
     -------------------------------------------               ----------------------------------------------
<S>                                                            <C>
     47.       Worthington Generation, L.L.C.                                      DE
</Table>






<PAGE>


                                   SCHEDULE IV
                                       TO
                               SECURITY AGREEMENT

                            FORM OF JOINDER AGREEMENT

                                JOINDER AGREEMENT
                          (name of joining subsidiary)

                               [         ,      ]
                                ---------  -----

         [Joining Subsidiary], a [_________ corporation] (the "Subsidiary"),
hereby agrees with (a) CITIBANK, N.A., as collateral trustee for the benefit of
the holders of the Secured Obligations, (b) THE WILLIAMS COMPANIES, INC., a
Delaware corporation (the "Company") and (c) the other parties to the Security
Documents (as defined below), as follows:

         All capitalized terms used herein and not defined herein shall have the
meanings ascribed to such terms in the Amended and Restated Credit Agreement,
dated as of October 31, 2002, by and among The Williams Companies, Inc., the
various lenders as are or may become parties thereto; the Issuing Banks, and
Citicorp USA, Inc., as Agent and Collateral Agent (as further amended, modified,
supplemented, renewed, extended or restated from time to time, the "Credit
Agreement").

         In accordance with the terms of the [Security Agreement, Pledge
Agreement and Collateral Trust Agreement] (collectively, the "Security
Documents"), the Subsidiary hereby (a) [joins the Security Agreement as a party
thereto and assumes all the obligations of a Grantor (as defined in the Security
Agreement) under the Security Agreement], (b) [joins the Pledge Agreement as a
party thereto and assumes all the obligations of a Pledgor (as defined in the
Pledge Agreement) under the Pledge Agreement], (c) [joins the Collateral Trust
Agreement as a party thereto and assumes all the obligations of a Debtor (as
defined in the Collateral Trust Agreement) under the Collateral Trust
Agreement], (d) agrees to be bound by the provisions of the Security Documents
as if the Subsidiary had been an original party to the Security Documents, and
(e) confirms that, after joining the Security Documents as set forth above, the
representations and warranties set forth in each of the Credit Documents with
respect to the Subsidiary are true and correct in all material respects as of
the date of this Joinder Agreement.

         For purposes of notices under the Security Documents, the notice
address for the Subsidiary may be given to the Subsidiary by providing notice
addressed to [Subsidiary's Name] c/o The Williams Companies, Inc., in any manner
that notice is permitted to be given to the Company pursuant to the terms of the
Credit Agreement.

         [Schedule I and Schedule II to the Security Agreement are hereby
supplemented with the information set forth on Exhibit I to this Joinder
Agreement.]





<PAGE>

         [Schedule I and Schedule II to the Pledge Agreement are hereby
supplemented with the information regarding the Subsidiary set forth on Exhibit
II to this Joinder Agreement.]

         THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

         THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

         IN WITNESS WHEREOF this Joinder Agreement is executed and delivered as
of the ___ day of ____________, _____.


                                        [Joining Subsidiary]



                                        By:
                                           ------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>7
<FILENAME>d00961exv10w5.txt
<DESCRIPTION>TERMINATION AGREEMENT - KEITH E BAILEY
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.5

                                                                  EXECUTION COPY


                       FIRST AMENDMENT TO PLEDGE AGREEMENT

         This First Amendment dated as of October 31, 2002 (this "Amendment") to
the Pledge Agreement dated as of July 31, 2002 (as amended and modified from
time to time, the "Pledge Agreement"), is among The Williams Companies, Inc., a
Delaware corporation (the "Company"), and each of its Subsidiaries which is or
which subsequently becomes a party to the Pledge Agreement (together, with the
Company, the "Pledgors"), in favor of Citibank, N.A., as collateral trustee
("Collateral Trustee") for the benefit of the holders of the Secured
Obligations. All capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to such terms in the Pledge Agreement.

                                   WITNESSETH:

         WHEREAS, the parties hereto have agreed to amend certain provisions of
the Pledge Agreement;

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Pledge Agreement is hereby amended as follows:

1.       Amendments.

         (a) Pursuant to the terms of those two certain Consent and Waivers each
         dated as of September 20, 2002, by and among the Company and the other
         signatories thereto, the Pledge Agreement was amended to (i) remove
         Williams Field Services - Gulf Coast Company, L.P. ("WFS") as an
         Obligor, (ii) acknowledge that the equity interests held by WFS
         Enterprises, Inc., and Williams Field Services Company in WFS were
         erroneously pledged, (iii) add Williams Gulf Coast Gathering Company,
         LLC ("Gathering") as an Obligor and (iv) add North Padre Island
         Spindown, Inc. as a Pledgor of its equity interest in Gathering.
         Pursuant to this Amendment, Williams GP LLC; Williams Petroleum
         Services, LLC; Longhorn Enterprises of Texas, Inc.; and WFS Gathering
         Company, L.L.C. are added as Pledgors, and the following additional
         parties are added as Obligors: WFS - Pipeline Company; WFS Gathering
         Company, L.L.C.; Williams Field Services - Matagorda Offshore Company,
         LLC; Williams Gas Processing - Mid Continent Region Company; WFS-OCS
         Gathering Co.; HI-BOL Pipeline Company; Goebel Gathering Company,
         L.L.C.; Williams Petroleum Services, LLC; Longhorn Enterprises of
         Texas, Inc.; and NewGP (as defined in the L/C Credit Agreement
         (hereafter defined)).

         (b) Section 1(b) of the Pledge Agreement is hereby amended by deleting
         such Section and replacing it in its entirety with the following:

                  (b) all shares of capital stock, general and limited
                  partnership interests, limited liability company interests,
                  trust interests, joint venture interests, ownership rights
                  arising under the law of any jurisdiction, and any evidence of



<PAGE>




                  the foregoing, together with any property and rights
                  derivative thereof, acquired, received or owned by any Pledgor
                  (other than those acquired, received or owned in anticipation
                  of a divestiture permitted by Section 5.1(h) of the L/C Credit
                  Agreement and Section 5.01(h) of the Multiyear Williams Credit
                  Agreement), which, after the date of this Agreement, becomes,
                  as a result of any occurrence, a Subsidiary of any Pledgor or
                  of the Company and which Subsidiary is engaged in the
                  Midstream Business or owns Midstream Assets;

         (c) The definition of "Pledged Shares" set forth in Section 1 of the
         Pledge Agreement is hereby amended by deleting the word "shares" in the
         first line of such definition and inserting the following phrase before
         the words "described in Schedule I":

                  "shares of capital stock, general and limited partnership
                  interests, limited liability company interests, trust
                  interests, joint venture interests, ownership rights arising
                  under the law of any jurisdiction and any evidence of the
                  foregoing, together with any property and rights derivative
                  thereof, all of the foregoing as".

         (d) The following sentence shall be added to the end of Section 1 of
         the Pledge Agreement:

                  "Notwithstanding the grant of a security interest set forth
                  above in this Section 1, Excluded Equity Interests (as defined
                  in the L/C Credit Agreement and the Multiyear Williams Credit
                  Agreement) shall not constitute Pledged Collateral under this
                  Agreement."

         (e) Section 4(k) and (l) of the Pledge Agreement are hereby amended by
         deleting such Sections and replacing them in their entirety with the
         following:

                  (k) Such Pledgor will (i) cause each issuer of shares of stock
                  comprising Pledged Collateral not to issue any stock or other
                  securities in addition to or in substitution for the shares of
                  stock comprising the Pledged Collateral issued by such issuer,
                  except for stock and other securities issued to such Pledgor
                  or another Pledgor and subject to this Agreement, (ii) pledge
                  hereunder, promptly upon its acquisition (directly or
                  indirectly) thereof, any and all additional shares of stock or
                  other securities of each issuer of Pledged Collateral, and
                  (iii) pledge hereunder, promptly upon its acquisition
                  (directly or indirectly) thereof, any and all shares of stock
                  or other equity interest covered by Section 1(b) hereof.
                  Notwithstanding anything to the contrary in this Section 4(k),
                  this section shall not restrict or limit in any way the
                  ability of Williams Energy Partners L.P. or NewGP or their
                  respective subsidiaries to issue stock or other equity
                  interest.

                           (l) Each Pledgor agrees that it (i) shall not sell,
                  assign, transfer, pledge, mortgage, hypothecate, dispose of or
                  encumber, or grant any option or warrant or Lien or right with
                  respect to, or permit any Liens to arise with respect to, the
                  Pledged Collateral, any of its rights in or to the Pledged
                  Collateral and any portion thereof, except for the pledge
                  thereof provided for in this Agreement, and



<PAGE>



                  (ii) except as permitted under Sections 5.1(d), 5.2(d) and
                  5.2(f) of the L/C Credit Agreement and Sections 5.01(d),
                  5.02(c) and 5.02(f) of the Multiyear Williams Credit
                  Agreement, shall not permit any issuer of shares of stock
                  comprising Pledged Collateral to terminate its corporate
                  existence, to be a party to any merger or consolidation, or to
                  sell, lease or dispose of all or substantially all of its
                  assets and properties in a single transaction or series of
                  related transactions.

         (e) The following paragraph is hereby added to the end of Section 4
         after the last lettered paragraph:

                           Notwithstanding anything to the contrary in Section 4
                  of this Pledge Agreement, (i) the Pledgors shall not be
                  restricted from completing or permitting any dispositions that
                  can be completed without violating any of the following
                  provisions: Sections 5.2(e) and 5.2(f) of the L/C Credit
                  Agreement, and Sections 5.02(f) and 5.02(l) of the Multiyear
                  Williams Credit Agreement, and (ii) the existence of Permitted
                  Liens (other than the Permitted Liens described in Schedule
                  III Paragraphs y, gg, and jj from the L/C Credit Agreement and
                  Schedule VI Paragraphs y, gg, and jj from the Multiyear
                  Williams Credit Agreement) shall not be a violation of any
                  representations, warranties or covenants set forth in Section
                  4 of this Pledge Agreement.

         (f) The first phrase of Section 6(a) which currently reads as follows:
         "(a) So long as no default or event of default, however denominated,
         under any Credit Document (an "Event of Default") has occurred:" is
         hereby amended by deleting such phrase and replacing it in its entirety
         with the following:

                           (a) The Pledgors shall have the rights described in
                  (i), (ii) and (iii) below until (x) a default or event of
                  default, however denominated, under any Credit Document (an
                  "Event of Default") has occurred, and (y) the notice
                  requirement in Section 6(b) has been complied with.

         (g) Paragraph (a) of Section 19 of the Pledge Agreement is hereby
         amended by deleting such paragraph and replacing it in its entirety
         with the following:

                           (a) This Agreement shall be governed by and construed
                  in accordance with the laws of the State of New York. All
                  capitalized terms that are used but not defined herein shall
                  have the meanings ascribed to such terms in that certain
                  Amended and Restated Credit Agreement dated as of October 31,
                  2002 (as amended, modified, supplemented or restated from time
                  to time, the "L/C Credit Agreement"), by and among the
                  Company, Citicorp USA, Inc., as agent and collateral agent,
                  Bank of America N. A. as syndication agent, Citibank, N.A.,
                  The Bank of Nova Scotia and Bank of America N.A. as issuing
                  banks, Salomon Smith Barney Inc. as Arranger, and the banks
                  named therein; provided, however that any subsequent
                  modification of a definition made pursuant to an amendment,
                  modification, supplement or



<PAGE>



                  restatement of the L/C Credit Agreement shall not apply to
                  this Agreement unless a conforming modification of such
                  definition is simultaneously made pursuant to an amendment,
                  modification, supplement or restatement of the Multiyear
                  Williams Credit Agreement. Unless otherwise defined herein or
                  in the L/C Credit Agreement, the terms defined in Articles 8
                  and 9 of the New York UCC are used herein as therein defined.

         (h) Section 24 of the Pledge Agreement is hereby amended by deleting
         such Section and replacing it in its entirety with the following:

                           24. Incorporated Definitions and Provisions. All
                  defined terms and other provisions (including, without
                  limitation, the amendment provisions), that are incorporated
                  into this Pledge Agreement by reference to other agreements or
                  statutes shall incorporate into this Pledge Agreement the
                  provisions of such other agreements and statutes that exist as
                  of the date hereof; however, such provisions shall be
                  automatically modified herein by any amendment or modification
                  that takes place after the date hereof in such other
                  referenced agreements or statutes; subject to the following
                  limitations: (a) no such amendment or modification (of an
                  above referenced agreement) shall be effective with respect to
                  this Pledge Agreement until Collateral Trustee shall have
                  received a copy of such amendment or modification and (b) no
                  provision of any such amendment or modification of an above
                  referenced agreement that imposes any additional liability,
                  obligation or adverse effect on the Collateral Trustee shall
                  be effective with respect to this Pledge Agreement unless the
                  Collateral Trustee has executed a written consent to such
                  provision or to the amendment or modification in which such
                  provision is set forth.

         (i) The following Section 25 is hereby added to the Pledge Agreement:

                           25. Joinder. Pursuant to the terms of the Credit
                  Documents certain Subsidiaries (hereafter referred to as the
                  "Joining Subsidiaries") may desire to or be required to join
                  this Pledge Agreement as Pledgors or Obligors. In connection
                  with any such joinder the Joining Subsidiary shall cause to be
                  executed and delivered (a) a joinder agreement substantially
                  in the form of the joinder agreement attached hereto as
                  Schedule VI and (b) authorization documentation, corporate
                  documentation, perfection documentation and opinion letters
                  reasonably satisfactory to the Collateral Trustee reflecting
                  the status of such Joining Subsidiary and the enforceability
                  of such agreements with respect to such Joining Subsidiary;
                  provided, however, that the Collateral Trustee shall have no
                  obligations with respect to the additional Pledged Collateral
                  that results from the addition of a Joining Subsidiary as a
                  Pledgor or Obligor pursuant to this Pledge Agreement prior to
                  the delivery of such additional Pledged Collateral, and
                  Collateral Trustee shall have no duty to solicit the delivery
                  of any Pledged Collateral from any Pledgor.

         (j) Schedule I to Pledge Agreement is hereby amended and restated in
         its entirety and replaced with Schedule I attached hereto.

         (k) Schedule II to Pledge Agreement is hereby amended and restated in
         its entirety and replaced with Schedule II attached hereto.



<PAGE>



         (l) A new Schedule VI to the Pledge Agreement is hereby added which is
         the document attached as Schedule VI hereto.

2. Acknowledgement. Williams Alaska Air Cargo Properties, L.L.C. hereby
acknowledges that it is a Pledgor and original signatory to the Pledge Agreement
effective as of July 31, 2002.

3. Conditions to Effectiveness. This Amendment shall be deemed effective (the
"Effective Date") upon the satisfaction of the conditions precedent as set out
in Section 3.1 of that certain Amended and Restated Credit Agreement dated as of
October 31, 2002, among the Company and the Financial Institutions named
therein, without giving effect to the terms of Section 3.3; provided, however,
that the Collateral Trustee shall have no obligations with respect to the
additional Pledged Collateral that results from the addition of Pledgors or
Obligors as parties to the Pledge Agreement pursuant to this Amendment prior to
the delivery of such additional Pledged Collateral, and the Collateral Trustee
shall have no duty to solicit the delivery of any Pledged Collateral from any
Pledgor or Obligor. Notwithstanding anything to the contrary herein, any
provision or portion of a provision in this Amendment that is or is determined
to be a release of Pledged Collateral shall not be effective to release such
Pledged Collateral until the Collateral Trustee has received satisfactory
documentation that such release of Pledged Collateral is permitted by or has
been properly approved in accordance with the terms of the Collateral Trust
Agreement.

2. Governing Law. This Amendment shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.

3. Reference to and Effect on the Pledge Agreement. The amendments set forth
herein are limited precisely as written and shall not be deemed to be a consent
or waiver to, or modification of any other term or condition in the Pledge
Agreement or any of the documents referred to therein. Except as expressly
amended and consented hereby, the terms and conditions of the Pledge Agreement
shall continue in full force and effect, and as amended hereby, the Pledge
Agreement is ratified and confirmed in all respects. On and after the Effective
Date, the Pledge Agreement shall be deemed to mean the Pledge Agreement as
amended hereby and all references to the Pledge Agreement shall be deemed to
refer to the Pledge Agreement as amended hereby.

4. Counterparts. This Amendment may be executed in several counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.


Schedule I:       Schedule I to Pledge Agreement
Schedule II:      Schedule II to Pledge Agreement
Schedule VI:      Form of Joinder Agreement



<PAGE>
         IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this Amendment to be signed in their
respective names.







                  THE WILLIAMS COMPANIES, INC.,
                  as Pledgor



                  By:            /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Treasurer



                  WILLIAMS REFINING & MARKETING, L.L.C.,
                  as Pledgor



                  By:            /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer



                  WILLIAMS PETROLEUM SERVICES, LLC,
                  as Pledgor



                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Senior Vice President



                  WILLIAMS PETROLEUM PIPELINE SYSTEMS,
                  INC., as Pledgor



                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Senior Vice President



                  WILLIAMS OLEFINS, L.L.C., as Pledgor



                  By:          /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer





<PAGE>



                  WILLIAMS NATURAL GAS LIQUIDS, INC..
                  as Pledgor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS MIDSTREAM NATURAL GAS LIQUIDS,
                  INC., as Pledgor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS MERCHANT SERVICES COMPANY,
                  INC., as Pledgor



                  By:          /s/ William E. Hobbs
                           -----------------------------------------
                           Name:    William E. Hobbs
                           Title:   President



                  WILLIAMS GP, LLC, as Pledgor



                  By:        /s/ Don R. Wellendorf
                           -----------------------------------------
                           Name:    Don R. Wellendorf
                           Title:   President and Chief
                                     Executive Officer



                  WILLIAMS FIELD SERVICES GROUP, INC.,
                  as Pledgor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President






<PAGE>





                  WILLIAMS EXPRESS, INC. (a Delaware corporation),
                  as Pledgor


                  By:           /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Chief Executive Officer



                  WILLIAMS ENERGY SERVICES, LLC,
                  as Pledgor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS ENERGY MARKETING & TRADING
                  COMPANY, as Pledgor



                  By:            /s/ William E. Hobbs
                           -----------------------------------------
                           Name:    William E. Hobbs
                           Title:   President



                  WILLIAMS BIO-ENERGY, L.L.C.,
                  as Pledgor



                  By:            /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer



                  WILLIAMS ALASKA PETROLEUM, INC.,
                  as Pledgor



                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Chief Executive Officer







<PAGE>




                  WILLIAMS ALASKA AIR CARGO PROPERTIES,
                  L.L.C., as Pledgor

                  By:      WILLIAMS ALASKA PETROLEUM, INC.
                           its sole member


                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Chief Executive Officer



                  WFS-NGL PIPELINE COMPANY, INC.,
                  as Pledgor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WFS-LIQUIDS COMPANY, as Pledgor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WFS GATHERING COMPANY, L.L.C.,
                  as Pledgor



                  By:            /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer



                  NORTH PADRE ISLAND SPINDOWN, INC.,
                  as Pledgor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President





<PAGE>






                  MAPCO INC. , as Pledgor



                  By:         /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  LONGHORN ENTERPRISES OF TEXAS, INC.,
                  as Pledgor



                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Senior Vice President



                  JUAREZ PIPELINE COMPANY,
                  AS PLEDGOR



                  By:         /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS ENERGY SERVICES, LLC,
                  as Obligor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  HI-BOL PIPELINE COMPANY, as Obligor



                  By:         /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President








<PAGE>




                  GOEBEL GATHERING COMPANY, L.L.C.,
                  as Obligor



                  By:         /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer



                  GAS SUPPLY, L.L.C., as Obligor



                  By:          /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Senior Vice President



                  BLACK MARLIN PIPELINE COMPANY.
                  as Obligor



                  By:         /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  MAPCO INC. , as Obligor



                  By:         /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  LONGHORN ENTERPRISES OF TEXAS, INC.,
                  as Obligor



                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Senior Vice President






<PAGE>





                  JUAREZ PIPELINE COMPANY,
                  AS OBLIGOR



                  By:         /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  MEMPHIS GENERATION, L.L.C., as Obligor



                  By:         /s/ William E. Hobbs
                           -----------------------------------------
                           Name:    William E. Hobbs
                           Title:   President



                  MAPL INVESTMENTS, INC. as Obligor



                  By:         /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  NORTH PADRE ISLAND SPINDOWN, INC.,
                  as Obligor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WFS ENTERPRISES, INC., as Obligor



                  By:         /s/ Mary Jane Bittick
                           -----------------------------------------
                           Name:    Mary Jane Bittick
                           Title:   Treasurer





<PAGE>





                  WFS - PIPELINE COMPANY, as Obligor



                  By:          /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WFS - OCS GATHERING CO., as Obligor



                  By:         /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WFS-NGL PIPELINE COMPANY, INC.,
                  as Obligor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WFS-LIQUIDS COMPANY, as Obligor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President




                  WFS GATHERING COMPANY, L.L.C.,
                  as Obligor



                  By:            /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer





<PAGE>




                  WFS-OFFSHORE GATHERING COMPANY, as Obligor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS ALASKA PETROLEUM, INC.,
                  as Obligor



                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Chief Executive Officer



                  WILLIAMS ALASKA AIR CARGO PROPERTIES,
                  L.L.C., as Obligor

                  By:      WILLIAMS ALASKA PETROLEUM, INC.
                           its sole member


                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Chief Executive Officer



                  WILLIAMS FIELD SERVICES - MATAGORDA
                  OFFSHORE COMPANY, LLC, as Obligor



                  By:         /s/ James G. Ivey
                           -----------------------------------------
                  Name:    James G. Ivey
                  Title:   Assistant Treasurer



                  WILLIAMS GULF COAST GATHERING COMPANY,
                  LLC, as Obligor



                  By:          /s/ James G. Ivey
                           -----------------------------------------
                  Name:    James G. Ivey
                  Title:   Assistant Treasurer





<PAGE>



                  WILLIAMS MID-SOUTH PIPELINES, LLC,
                  as Obligor



                  By:        /s/ James G. Ivey
                           -----------------------------------------
                  Name:    James G. Ivey
                  Title:   Assistant Treasurer



                  WORTHINGTON GENERATION, L.L.C.,
                  as Obligor



                  By:          /s/ William E. Hobbs
                           -----------------------------------------
                  Name:    William E. Hobbs
                  Title:   President



                  WILLIAMS ALASKA PIPELINE COMPANY,
                  L.L.C.,  as Obligor



                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Senior Vice President



                  WILLIAMS BIO-ENERGY, L.L.C.,
                  as Obligor



                  By:            /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer



                  WILLIAMS ETHANOL SERVICES, INC.,
                  as Obligor



                  By:          /s/ Paul W. Nelson
                           -----------------------------------------
                           Name:    Paul W. Nelson
                           Title:   Treasurer




<PAGE>

                  WILLIAMS EXPRESS INC. (an Alaska corporation),
                  as Obligor


                         By:          /s/ Ralph A. Hill
                                  ----------------------------------
                                  Name:    Ralph A. Hill
                                  Title:   Chief Executive Officer



                  WILLIAMS EXPRESS, INC. (a Delaware corporation),
                  as Obligor


                  By:           /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Chief Executive Officer






                  WILLIAMS FIELD SERVICES COMPANY,
                  as Obligor



                  By:        /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS FIELD SERVICES GROUP, INC.,
                  as Obligor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS GAS PROCESSING - MID-CONTINENT
                  REGION COMPANY, as Obligor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President


<PAGE>




                  WILLIAMS GAS PROCESSING - WAMSUTTER
                  COMPANY, as Obligor



                  By:          /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS GAS PROCESSING COMPANY,
                  as Obligor



                  By:         /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS GENERATING MEMPHIS, LLC.
                  as Obligor


                  By:            /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer



                  WILLIAMS GP, LLC, as Obligor



                  By:        /s/ Don R. Wellendorf
                           -----------------------------------------
                           Name:    Don R. Wellendorf
                           Title:   President and Chief
                                     Executive Officer



                  WILLIAMS MEMPHIS TERMINAL, INC.,
                  as Obligor



                  By:          /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer


<PAGE>



                  WILLIAMS MERCHANT SERVICES COMPANY,
                  INC., as Obligor



                  By:          /s/ William E. Hobbs
                           -----------------------------------------
                           Name:    William E. Hobbs
                           Title:   President



                  WILLIAMS MIDSTREAM NATURAL GAS LIQUIDS,
                  INC., as Obligor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS NATURAL GAS LIQUIDS, INC..
                  as Obligor



                  By:            /s/ Alan S. Armstrong
                           -----------------------------------------
                           Name:    Alan S. Armstrong
                           Title:   Senior Vice President



                  WILLIAMS OLEFINS FEEDSTOCK PIPELINES,
                  L.L.C., as Obligor



                  By:          /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer



                  WILLIAMS OLEFINS, L.L.C., as Obligor



                  By:          /s/ James G. Ivey
                           -----------------------------------------
                           Name:    James G. Ivey
                           Title:   Assistant Treasurer





<PAGE>



                  WILLIAMS PETROLEUM PIPELINE SYSTEMS,
                  INC., as Obligor



                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Senior Vice President



                  WILLIAMS PETROLEUM SERVICES, LLC,
                  as Obligor



                  By:            /s/ Ralph A. Hill
                           -----------------------------------------
                           Name:    Ralph A. Hill
                           Title:   Senior Vice President



                  WILLIAMS PRODUCTION COMPANY, L.L.C.,
                  as Obligor



                          By:          /s/ Ralph A. Hill
                                   ---------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Senior Vice President



                  WILLIAMS REFINING & MARKETING, L.L.C.,
                  as Obligor



                          By:            /s/ James G. Ivey
                                   ---------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer



                  WEG GP LLC, as Obligor



                  By:            /s/ Michael N. Mears
                           -----------------------------------------
                           Name:    Michael N. Mears
                           Title:   Vice President



<PAGE>



                  CITIBANK, N.A., as Collateral Trustee


                  By:         /s/ Camille Tomao
                           -----------------------------------------
                           Name:    Todd J. Mogil
                           Title:   Vice President




                  AGENT AND COLLATERAL AGENT

                  CITICORP USA, INC., as Agent and Collateral Agent

                  By   /s/ Todd J. Mogil
                  Name:  Todd J. Mogil
                  Title:  Vice President




                  BANKS AND ISSUING BANKS:


                  CITIBANK N.A., as Issuing Bank

                  By   /s/ Todd J. Mogil
                  Name:  Todd J. Mogil
                  Title:  Vice President




                  CITICORP USA, INC.

                  By   /s/ Todd J. Mogil
                  Name:  Todd J. Mogil
                  Title:  Vice President




                  THE BANK OF NOVA SCOTIA, as Canadian
                  Issuing Bank and Bank



                  By:
                  Name:
                  Title:




<PAGE>
                  BANK OF AMERICA N.A., as Issuing Bank and Bank



                  By:  /s/  Claire Liu
                  Name:  Claire Liu
                  Title:  Managing Director




                  JP MORGAN CHASE BANK



                  By:  /s/ Robert W. Traband
                  Name:  Robert W. Traband
                  Title:  Vice President




                  TORONTO DOMINION (TEXAS), INC.



                  By:  /s/  Jill Hall
                  Name:  Jill Hall
                  Title:  Vice President




                  CREDIT LYONNAIS NEW YORK BRANCH



                  By:  /s/ Olivier Audemard
                  Name:  Olivier Audemard
                  Title:  Senior Vice President




                  MERRILL LYNCH CAPITAL CORP.



                  By:  /s/  Carol J.E. Feeley
                  Name:  Carol J.E. Feeley
                  Title:  Vice President




                  LEHMAN COMMERCIAL PAPER INC.



                  By:  /s/  Francis Chang
                  Name:  Francis Chang
                  Title:  Authorized Signatory


<PAGE>


Each of the entities reflected on the following pages is executing this
Amendment as a Financial Institution party to the First Amended and Restated
Credit Agreement, doted as of October 31, 2002, among the Company, Northwest
Pipeline Corporation, Transcontinental Gas Pipeline Corporation, Texas Gas
Transmission and the Financial Institutions named therein:

<PAGE>



                         AGENT:

                         CITICORP, USA, INC., as Agent



                         By:  /s/  Todd J. Mogil
                         Name:  Todd J. Mogil
                         Title:  Vice President




                         CO-SYNDICATION AGENTS:

                         JPMORGAN CHASE BANK
                         (formerly known as
                         THE CHASE MANHATTAN BANK), as Co-Syndication Agent



                         By:  /s/  Robert W. Traband
                         Name:  Robert W. Traband
                         Title:  Vice President




                         COMMERZBANK AG,
                         as Co-Syndication Agent



                         By:  /s/  Harry Yergey
                         Name:  Harry Yergey
                         Title:  Senior Vice Pres. and Manager



                         By:  /s/  Brian Campbell
                         Name:  Brian Campbell
                         Title:  Senior Vice President




                         DOCUMENTATION AGENT:

                         CREDIT LYONNAIS NEW YORK BRANCH

                         as Documentation Agent


                         By:  /s/  Olivier Audemard
                         Name:  Olivier Audemard
                         Title:  Senior Vice President




                         BANKS:

                         CITIBANK, USA, INC.



                         By:  /s/  Todd J. Mogil
                         Name:  Todd J. Mogil
                         Title:  Vice President




<PAGE>


                         THE BANK OF NOVA SCOTIA



                         By:      /s/ N. Bell
                         Name:    N. Bell
                         Title:   Senior Manager




                         BANK OF AMERICA, N.A.



                         By:  /s/  Claire M. Liu
                         Name:  Claire M. Kiu
                         Title:  Vice President




                         BANK ONE, N.A. (MAIN OFFICE - CHICAGO)



                         By:  /s/  Jeanie C. Gonzalez
                         Name:  Jeanie C. Gozalez
                         Title:  Director




                         JPMORGAN CHASE BANK
                         (formerly known as
                         THE CHASE MANHATTAN BANK)



                         By:  /s/  Robert W. Traband
                         Name:  Robert W. Traband
                         Title:  Vice President




                         COMMERZBANK AG
                         NEW YORK AND GRAND CAYMAN BRANCHES



                         By:      /s/  Brian J. Campbell
                         Name:    Brian J. Campbell
                         Title:   Senior Vice President




                         By:      /s/ W. David Suttles
                         Name:    W. David Suttles
                         Title:   Vice President





<PAGE>


                         CREDIT LYONNAIS NEW YORK BRANCH



                         By:  /s/  Olivier Audermard
                         Name:  Olivier Audermard
                         Title:  Senior V.P.




                         NATIONAL WESTMINSTER BANK PLC NEW YORK BRANCH


                         By:      /s/ Charles Greer
                         Name:    Charles Greer
                         Title:   Senior Vice President




                         ABN AMRO BANK, N.V.



                         By:  /s/  Frank R. Russo, Jr.
                         Name:  Frank R. Russo, Jr.
                         Title:  Group Vice President



                         By:  /s/  Jeffrey G. White
                         Name:  Jeffrey G. White
                         Title:  Vice President




                         BANK OF MONTREAL



                         By:      /s/  Mary Lee Latta
                         Name:    Mary Lee Latta
                         Title:   Director
                                    Bank of Montreal




                         THE BANK OF NEW YORK



                         By:  /s/  Raymond J. Palmer
                         Name:  Raymond J. Palmer
                         Title:  Vice President




<PAGE>


                         BARCLAYS BANK PLC



                         By:      /s/  Nicholas A. Bell
                         Name:    Nicholas A. Bell
                         Title:   Director
                                  Loan Transaction Management




                         CIBC INC.




                         By:  /s/  George Knight
                         Name:  George Knight
                         Title:  Managing Director
                                 CIBC World Markets Corp., As Agent




                         CREDIT SUISSE FIRST BOSTON



                         By:  /s/ James P. Moran   /s/ Ian W. Nalitt
                         Name:  James P. Moran   Ian W. Nalitt
                         Title:  Director                 Associate




                         ROYAL BANK OF CANADA



                         By:  /s/  Peter Barnes
                         Name:  Peter Barnes
                         Title:  Senior Manager




                         THE BANK OF TOKYO-MITSUBISHI, LTD., HOUSTON AGENCY



                         By:      /s/ Kelton Glassock
                         Name:    Kelton Glassock
                         Title:   Vice President and Manager


                         By:      /s/ Jay Fort
                         Name:    Jay Fort
                         Title:   Vice President

<PAGE>


                         FLEET NATIONAL BANK
                         f/k/a Bank Boston, N.A.


                         By:  /s/  Matthew W. Speh
                         Name:  Matthew W. Speh
                         Title:  Authorized Officer



                         SOCIETE GENERALE, SOUTHWEST AGENCY



                         By:  /s/  J. Douglas McMurrey, Jr.
                         Name:  J. Douglas McMurrey, Jr.
                         Title:  Managing Director




                         TORONTO DOMINION (TEXAS), INC.



                         By:  /s/  Jill Hall
                         Name:  Jill Hall
                         Title:  Vice President




                         UBS AG, STAMFORD BRANCH



                         By:      /s/ Kelly Smith
                         Name:    Director
                         Title:   Recovery Management






                         WELLS FARGO BANK TEXAS, N.A.



                         By:  /s/  J. Alan Alexander
                         Name:  J. Alan Alexander
                         Title:  Vice President


<PAGE>


                         WESTLB AG, NEW YORK BRANCH



                         By:     /s/ Salvatore Bettnell     Duncan M. Robertson
                         Name:   Salvatore Bettnell         Duncan M. Robertson
                         Title:  Managing Director          Director
                                 Credit Department




                         CREDIT AGRICOLE INDOSUEZ



                         By:  /s/  Larry Materi
                         Name:   Larry Materi
                         Title:  Vice President



                         By:  /s/  Paul A. Dytrych
                         Name:  Paul A. Dytrych
                         Title:  Vice President




                         SUNTRUST BANK



                         By:  /s/  Steven J. Newby
                         Name:  Steven J. Newby
                         Title:  Director




                         ARAB BANKING CORPORATION (B.S.C.)



                         By:  /s/  Robert J. Ivosevich
                         Name:  Robert J. Ivosevich
                         Title:  Deputy General Manager



                         By:  /s/  Barbara O. Sanderson
                         Name:  Barbara O. Sanderson
                         Title:  VP Head of Credit



                         BANK OF CHINA, NEW YORK BRANCH



                         By:
                         Name:
                         Title:


<PAGE>


                         BANK OF OKLAHOMA, N.A.



                         By:
                         Name:
                         Title:




                         BNP PARIBAS, HOUSTON AGENCY



                         By:  /s/  Larry Robinson
                         Name:  Larry Robinson
                         Title:  Vice President



                         By:  /s/  Mark A. Cox
                         Name:  Mark A. Cox
                         Title:  Director




                         DZ BANK AG DEUTSCHE ZENTRALGENOSSENSCHAFTSBANK,
                         NEW YORK BRANCH



                         By:  /s/  Mark Connelly
                         Name:  Mark Connelly
                         Title:  Senior V.P.



                         By:  /s/  Richard W. Wilbert
                         Name:  Richard W. Wilbert
                         Title:  Vice President




                         KBC BANK N.V.



                         By:  /s/  Michael V. Curran
                         Name:  Robert Snauffer
                         Title:   First Vice President



                         By:  /s/  Diane M. Grimmig
                         Name:  Diane M. Grimmig
                         Title:  Vice President




                         WACHOVIA BANK, N.A.



                         By:  /s/  David E. Humphreys
                         Name:  David E. Humphreys
                         Title:  Vice President


<PAGE>


                         MIZUHO CORPORATE BANK, LTD



                         By:  /s/  Jacques Azagury
                         Name:  Jacques Azagury
                         Title:  Senior Vice President and Manager




                         SUMITOMO MITSUI BANKING CORPORATION



                         By:  /s/  Leo E. Pagarigan
                         Name:  Leo E. Pagarigan
                         Title:  Senior Vice President




                         COMMERCE BANK, N.A.




                         By:  /s/ Dennis R. Block
                         Name:  Dennis R. Block
                         Title:  Senior Vice President




                         ROYAL BANK OF SCOTLAND



                         By:
                         Name:
                         Title:




                         RZB FINANCE, LLC



                         By:
                         Name:
                         Title:






<PAGE>


                                   SCHEDULE I
                               TO PLEDGE AGREEMENT

                           SCHEDULE OF PLEDGED SHARES

<Table>
<Caption>
                                                                                         NUMBER OF        PERCENT OF
                                      STATE OF                                            SHARES/        TOTAL EQUITY
                                     ORGANIZATION                    STOCK                 UNITS          INTERESTS
                   PLEDGED           (PLEDGED         CLASS OF   CERTIFI-CATE   PAR        SHARES         OWNED BY
PLEDGOR            SUBSIDIARY        SUBSIDIARY)       STOCK          NO.      VALUE       UNITS           PLEDGOR*
- ------------------ ----------------- --------------- ------------ ---------- ---------- -------------- ---------------
<S>                <C>               <C>             <C>          <C>        <C>        <C>            <C>
The Williams       Williams Energy         DE            N/A         N/A        N/A          N/A            100%
Companies, Inc.    Services, LLC

                   Williams                DE          Common         1         100          10             100%
                   Natural Gas
                   Liquids, Inc.


                   Williams                DE          Common         2        1.00         1,000           100%
                   Midstream
                   Natural Gas
                   Liquids, Inc.

                   Williams                DE          Common         1        1.00         1,000           100%
                   Express, Inc.

Williams Energy    Williams Field          DE          Common         5        1.00         1,000           100%
Services, LLC      Services Group,
                   Inc.

                   Williams Alaska         DE            N/A         N/A        N/A          N/A            100%
                   Pipeline
                   Company, L.L.C.

                   Williams                DE            N/A         N/A        N/A          N/A            100%
                   Bio-Energy, LLC

                   Williams                DE          Common         3        1.00         1,000           100%
                   Merchant
                   Services
                   Company, Inc.

                   MAPCO Inc.              DE          Common         1        10.00         100            100%
</Table>



<PAGE>



<Table>
<S>                <C>               <C>             <C>          <C>        <C>        <C>            <C>
                   Williams                DE            N/A         N/A        N/A          N/A            100%
                   Production
                   Company, LLC

                   Williams GP LLC         DE            N/A         N/A        N/A          N/A           99.8%

                   NewGP***                                                                                99.8%

                   Williams Energy         DE           Units        N/A        N/A
                   Partners L.P.
                   Common
                   Subordinated                                                            757,193          5.5%
                                                                                          4,589,193        80.8%

                   Longhorn                DE          Common         3        $1.00        1,000           100%
                   Enterprises of
                   Texas, Inc.

                   Williams                DE            N/A         N/A        N/A          N/A            100%
                   Petroleum
                   Services, LLC

Williams Field     Black Marlin            TX          Common         16       0.10        44,800           100%
Services Group,    Pipeline Company
Inc.

                   WFS                     DE          Common         1        0.00          100            100%
                   Enterprises,
                   Inc.

                   WFS-Liquids             DE          Common         12       1.00          100            100%
                   Company

                   Williams Field          DE          Common         4        1.00         1,000           100%
                   Services Company

                   Williams Gas            DE          Common         2        1.00         1,000           100%
                   Processing
                   Company

                   Williams Gas            DE          Common         5        1.00         1,000           100%
                   Processing -
                   Wamsutter
                   Company
</Table>



<PAGE>


<Table>
<S>                <C>               <C>             <C>          <C>        <C>        <C>            <C>
                   Williams Gas            DE          Common         5        1.00         1,000           100%
                   Processing -
                   Mid Continent
                   Region Company

                   North Padre             DE          Common         1        1.00         1,000           100%
                   Island
                   Spindown, Inc.

                   WFS Gathering           DE            N/A         N/A        N/A          N/A            100%
                   Company, L.L.C.

                   Williams Field          DE            N/A         N/A        N/A          N/A            100%
                   Services-Matagorda
                   Offshore
                   Company, LLC

                   WFS-OCS                 DE          Common         2        1.00         1,000           100%
                   Gathering Co.

Williams           Williams Energy         DE          Common         7        1.00         1,000           100%
Merchant           Marketing &
Services           Trading Company
Company, Inc.

Williams Energy    Worthington             DE            N/A         N/A        N/A          N/A            100%
Marketing &        Generation,
Trading Company    L.L.C.

                   Memphis                 DE            N/A         N/A        N/A          N/A            100%
                   Generation,
                   L.L.C.

MAPCO Inc.         Gas Supply,             DE            N/A         N/A        N/A          N/A            100%
                   L.L.C.
</Table>




<PAGE>




<Table>
<S>                <C>               <C>             <C>          <C>        <C>        <C>            <C>
Williams Natural   Juarez Pipeline         DE          Common         2        1.00         1,000           100%
Gas Liquids, Inc.  Company

                   MAPL                    DE          Common         2        1.00         1,000           100%
                   Investments,
                   Inc.

                   WFS-NGL                 DE          Common         3        1.00         1,000           100%
                   Pipeline
                   Company, Inc.

                   Williams GP LLC         DE            N/A        N /A        N/A          N/A            0.2%

                   NewGP***                                                                                 0.2%

                   Williams Energy         DE           Units        N/A        N/A        322,501
                   Partners L.P.                                                          1,090,501
                   Common
                   Subordinated                                                                             2.3%
                                                                                                           19.2%

                   E-Birchtree,            DE          A Units        1         N/A          100            90%
                   LLC**

WFS-NGL Pipeline   WILPRISE                DE            N/A         N/A        N/A          N/A           37.35%
Company, Inc.      Pipeline
                   Company,
                   L.L.C.**

                   Tri-States NGL          DE            N/A         N/A        N/A          N/A           16.67%
                   Pipeline,
                   L.L.C.**

Juarez Pipeline    Rio Grande              TX            N/A         N/A        N/A          N/A            45%
Company            Pipeline
                   Company**

Williams           Baton Rouge             DE            N/A         N/A        N/A          N/A           27.5%
Midstream          Fractionators,
Natural Gas        L.L.C.**
Liquids, Inc.

Williams           Williams                 AK         Common         1        1.00         1,000           100%
Express, Inc., a   Express, Inc.
Delaware
corporation
</Table>




<PAGE>


<Table>
<S>                <C>               <C>             <C>          <C>        <C>        <C>            <C>
                   Williams                 DE           N/A         N/A        N/A          N/A            100%
                   Refining &
                   Marketing,
                   L.L.C.

                   Williams Alaska         AK          Common         1        1.00         1,000           100%
                   Petroleum, Inc.

Williams Alaska    Williams Alaska         AK            N/A         N/A        N/A          N/A            100%
Petroleum, Inc.    Air Cargo
                   Properties,
                   L.L.C.

Williams           Williams                DE            N/A         N/A        N/A          N/A            100%
Olefins, L.L.C.    Olefins
                   Feedstock
                   Pipelines,
                   L.L.C.

Williams           Williams                DE            N/A         N/A        N/A          N/A            100%
Refining &         Olefins, L.L.C.
Marketing, L.L.C.

                   Williams                DE            N/A         N/A        N/A          N/A            100%
                   Generating
                   Memphis, LLC

                   Williams                DE          Common         3        1.00         1,000           100%
                   Memphis
                   Terminal, Inc.

                   Williams                DE          Common         4        1.00         1,000           100%
                   Petroleum
                   Pipeline
                   Systems, Inc.

Williams           Williams                DE          Common         2        1.00         1,000           100%
Bio-Energy, LLC    Ethanol
                   Services, Inc.

                   Nebraska                KS            N/A         N/A        N/A          N/A           74.9%
                   Energy, L.L.C.**
</Table>



<PAGE>



<Table>
<S>                <C>               <C>             <C>          <C>        <C>        <C>            <C>
WFS Gathering      Goebel                  DE            N/A         N/A        N/A          N/A            100%
Company, L.L.C.    Gathering
                   Company, L.L.C.

WFS -Liquids       WFS-Offshore            DE          Common         5        0.00          100            100%
Company            Gathering
                   Company

                   WFS - Pipeline          DE          Common         3        0.00          100            100%
                   Company

                   HI-BOL Pipeline         DE          Common         2        0.00          100            100%
                   Company

Williams           Williams                DE            N/A         N/A        N/A          N/A            100%
Petroleum          Mid-South
Pipeline           Pipelines, LLC
Systems, Inc.

North Padre        Williams Gulf           DE            N/A         N/A        N/A          N/A            100%
Island Spindown,   Coast Gathering
Inc.               Company, LLC

Williams GP LLC    Williams Energy         DE           Units        N/A        N/A       7,830,924         100%
                   Partners L.P.
                   "B Units"

Williams Alaska    Williams Lynxs          AK            N/A         N/A        N/A          N/A            50%
Air Cargo          Alaska
Properties, LLC    Cargoport, LLC**


Longhorn           Longhorn                DE            N/A         N/A        N/A          N/A           31.49%
Enterprises of     Partners
Texas, Inc.        Pipeline, L.P.**
</Table>


<PAGE>
<Table>
<S>                <C>               <C>             <C>          <C>        <C>        <C>            <C>
Williams           Longhorn                DE            N/A         N/A        N/A          N/A           31.49%
Petroleum          Partners GP,
Services, LLC      L.L.C.**

                   Wiljet, L.L.C.**        AZ            N/A         N/A        N/A          N/A            50%
</Table>


* Each Pledgor is pledging all of the equity interests it owns or hereafter
acquires in each of its pledged Subsidiaries (except that Williams GP LLC is not
pledging the general partnership interests and incentive distribution rights it
owns in Williams Energy Partners L.P.). This column indicates the percent of
total equity interests in the pledged Subsidiary owned by this Pledgor as of the
date of this Agreement.

** Pledgor's pledge of the equity interests in this Subsidiary shall not be
effective until Pledgor has obtained all necessary consents in connection with
such pledge, as more fully described on Schedule XII of the L/C Credit
Agreement.

*** Such Pledgor's pledge of the equity interests in NewGP shall not be
effective until the occurrence of the formation of NewGP. Company covenants to
cause the formation of NewGP promptly following the execution of the Amendment.



<PAGE>



                                   SCHEDULE II
                               TO PLEDGE AGREEMENT

                               UCC FILING OFFICES



<Table>
<Caption>
                                                                     UCC Central Filing Offices of the
                                                                   Secretary of State for the Following
                            Entity                                               States
     ------------------------------------------------------ --------------------------------------------------
<S>           <C>                                           <C>
     A.       Juarez Pipeline Company                                              DE
     B.       Longhorn Enterprises of Texas, Inc.                                  DE
     C.       MAPCO Inc.                                                           DE
     D.       North Padre Island Spindown, Inc.                                    DE
     E.       The Williams Companies, Inc.                                         DE
     F.       WFS Gathering Company, L.L.C.                                        DE
     G.       WFS - Liquids Company                                                DE
     H.       WFS - NGL Pipeline Company, Inc.                                     DE
     I.       Williams Alaska Air Cargo Properties, LLC                            AK
     J.       Williams Alaska Petroleum, Inc.                                      AK
     K.       Williams Bio-Energy, LLC                                             DE
     L.       Williams Energy Marketing & Trading Company                          DE
     M.       Williams Energy Services, LLC                                        DE
     N.       Williams Express, Inc., a Delaware                                   DE
                corporation
     O.       Williams Field Services Group, Inc.                                  DE
     P.       Williams GP LLC                                                      DE
     Q.       Williams Merchant Services Company, Inc.                             DE
</Table>


<PAGE>
<Table>
<Caption>
                                                                     UCC Central Filing Offices of the
                                                                   Secretary of State for the Following
                            Entity                                               States
     ------------------------------------------------------ --------------------------------------------------
<S>           <C>                                           <C>
     R.       Williams Midstream Natural Gas Liquids, Inc.                         DE
     S.       Williams Natural Gas Liquids, Inc.                                   DE
     T.       Williams Olefins, L.L.C.                                             DE
     U.       Williams Petroleum Pipeline Systems, Inc.                            DE
     V.       Williams Petroleum Services, LLC                                     DE
     W.       Williams Refining & Marketing, L.L.C.                                DE
</Table>



<PAGE>



                                   SCHEDULE VI
                               TO PLEDGE AGREEMENT

                            FORM OF JOINDER AGREEMENT

                                JOINDER AGREEMENT
                          (name of joining subsidiary)

                               [---------, -----]

         [Joining Subsidiary], a [_________ corporation] (the "Subsidiary"),
hereby agrees with (a) CITIBANK, N.A., as collateral trustee for the benefit of
the holders of the Secured Obligations, (b) THE WILLIAMS COMPANIES, INC., a
Delaware corporation (the "Company") and (c) the other parties to the Security
Documents (as defined below), as follows:

         All capitalized terms used herein and not defined herein shall have the
meanings ascribed to such terms in the Amended and Restated Credit Agreement,
dated as of October 31, 2002, by and among The Williams Companies, Inc., the
various lenders as are or may become parties thereto; the Issuing Banks, and
Citicorp USA, Inc., as Agent and Collateral Agent (as further amended, modified,
supplemented, renewed, extended or restated from time to time, the "Credit
Agreement").

         In accordance with the terms of the [Security Agreement, Pledge
Agreement and Collateral Trust Agreement] (collectively, the "Security
Documents"), the Subsidiary hereby (a) [joins the Security Agreement as a party
thereto and assumes all the obligations of a Grantor (as defined in the Security
Agreement) under the Security Agreement], (b) [joins the Pledge Agreement as a
party thereto and assumes all the obligations of a Pledgor (as defined in the
Pledge Agreement) under the Pledge Agreement], (c) [joins the Collateral Trust
Agreement as a party thereto and assumes all the obligations of a Debtor (as
defined in the Collateral Trust Agreement) under the Collateral Trust
Agreement], (d) agrees to be bound by the provisions of the Security Documents
as if the Subsidiary had been an original party to the Security Documents, and
(e) confirms that, after joining the Security Documents as set forth above, the
representations and warranties set forth in each of the Credit Documents with
respect to the Subsidiary are true and correct in all material respects as of
the date of this Joinder Agreement.

         For purposes of notices under the Security Documents, the notice
address for the Subsidiary may be given to the Subsidiary by providing notice
addressed to [Subsidiary's Name] c/o The Williams Companies, Inc., in any manner
that notice is permitted to be given to the Company pursuant to the terms of the
Credit Agreement.

         [Schedule I and Schedule II to the Security Agreement are hereby
supplemented with the information set forth on Exhibit I to this Joinder
Agreement.]

         [Schedule I and Schedule II to the Pledge Agreement are hereby
supplemented with the information regarding the Subsidiary set forth on Exhibit
II to this Joinder Agreement.]



<PAGE>



         THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.


         THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.


         IN WITNESS WHEREOF this Joinder Agreement is executed and delivered as
of the ___ day of ____________,______.


                                            [Joining Subsidiary]



                                            By:
                                                 ------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>8
<FILENAME>d00961exv10w6.txt
<DESCRIPTION>SECURITY AGREEMENT
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.6

                                                                  EXECUTION COPY

                         FIRST AMENDMENT TO GUARANTY BY
                       WILLIAMS GAS PIPELINE COMPANY, LLC

         This First Amendment dated as of October 31, 2002 (this "Amendment") to
the Guaranty dated as of July 31, 2002 (as amended and modified from time to
time, the "Guaranty"), is executed by Williams Gas Pipeline Company, LLC (the
"Guarantor"), in favor of the Financial Institutions. All capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to such terms
in the Guaranty.

                                   WITNESSETH:

         WHEREAS, the parties hereto have agreed to amend certain provisions of
the Guaranty;

         NOW THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Guaranty is hereby amended as follows:

1.       Amendments.

         (a) The second sentence of the first paragraph of the Guaranty is
         amended by deleting such paragraph and replacing it in its entirety
         with the following:

                  "Capitalized terms used in this Guaranty but not defined
                  herein shall have the meanings set forth for such terms in the
                  Amended and Restated Credit Agreement dated as of October 31,
                  2002, executed by The Williams Companies, Inc., as borrower
                  (the "Company"), Citicorp USA, Inc., as agent and collateral
                  agent, Bank of America N.A. as syndication agent, Citibank,
                  N.A., The Bank of Nova Scotia and Bank of America N.A. as
                  issuing banks, Salomon Smith Barney Inc., as arranger, and the
                  banks named therein (as the same may be modified, replaced,
                  refinanced, amended or supplemented from time to time, the
                  "New Credit Agreement").

         (b) Paragraph "A" of the Introduction to the Guaranty is amended by
         deleting such paragraph and replacing it in its entirety with the
         following:

                  "The Company and/or its Subsidiaries (i) have entered into
                  certain financing transactions with, and (ii) prior to the
                  date hereof, have caused certain existing letters of credit to
                  be issued by, certain agents, lenders, financial institutions
                  and other investors (such agents, lenders, financial
                  institutions and investors, and, to the extent any such
                  financing transaction consists of or includes a guaranty
                  provided by the Company and/or its Subsidiaries, each of the
                  beneficiaries of such guaranty (as set forth therein) and each
                  of the entities more fully described on Schedule III



                                      -1-

<PAGE>

                  attached hereto (collectively, the "Financial Institutions");
                  provided, however, except as expressly noted on Schedule III,
                  neither the Company nor any of its Subsidiaries shall be a
                  deemed a "Financial Institution". Such financing transactions,
                  including those entered into in connection with the New Credit
                  Agreement and the existing letters of credit, are documented
                  by certain credit, security, letter of credit and guaranty
                  documents, all as more fully set forth on Schedule I attached
                  hereto (collectively, as the same may be modified, replaced,
                  refinanced, amended or supplemented from time to time, the
                  "Credit Documents"). "Borrowers" as used herein shall mean the
                  borrowers or guarantors under any one or more of the Credit
                  Documents."

         (c) Section 6(e) of the Guaranty is hereby amended by deleting such
         Section and replacing it in its entirety with the following:

                  "The Guarantor will not create, incur, assume or suffer to
                  exist, or permit any of its Subsidiaries to create, incur,
                  assume or suffer to exist, any Debt, except that Guarantor and
                  its Subsidiaries may create, incur, assume and suffer to exist
                  Debt: (i) which constitutes unsecured intercompany
                  Indebtedness of the Guarantor or any of its Subsidiaries to
                  the Company or to any Subsidiary of the Company, provided that
                  such intercompany Indebtedness (x) was incurred or is incurred
                  in the ordinary course of the business of the Guarantor or any
                  Subsidiary and (y) is expressly subordinated to the Guaranteed
                  Obligations (intercompany indebtedness that meets all of the
                  requirements of this clause (i) is referred to in this
                  Guaranty as "Acceptable Intercompany Indebtedness") or (ii) to
                  the extent permitted by the Credit Documents (including,
                  without limitation, Debt existing as of July 31, 2002, that is
                  permitted pursuant to Section 5.2(p) of the New Credit
                  Agreement or 5.02(p) of the Multiyear Williams Credit
                  Agreement)."

         (d) Section 6(f) of the Guaranty is hereby amended by deleting such
         Section and replacing it in its entirety with the following:

                  "The Guarantor will not create, incur, assume or suffer to
                  exist any obligation or liability other than (i) Debt
                  permitted under clause (i) of Section 6(e) above, (ii) this
                  Guaranty, (iii) obligations or liabilities that are listed on
                  Schedule II hereto, (iv) contractual obligations in the nature
                  of indemnities or guaranties of performance entered into in
                  the ordinary course of business in connection with the
                  disposition of Subsidiaries or assets of Subsidiaries and (v)
                  other obligations not exceeding $100,000 in the aggregate."

         (e) Section 6(h) of the Guaranty is hereby amended by deleting such
         Section and replacing it in its entirety with the following:



                                      -2-


<PAGE>

                  "Except to the extent expressly permitted by the New Credit
                  Agreement, the Guarantor will not sell, issue or otherwise
                  dispose of, or create, assume, incur of suffer to exist any
                  Lien on or in respect of, or permit any of its Subsidiaries to
                  sell, issue or otherwise dispose of or create, assume, incur
                  or suffer to exist any Lien on or in respect of, any Equity
                  Interests or any direct or indirect interest in any Equity
                  Interests in any Important Subsidiary. As used herein
                  "Important Subsidiary" means (i) any Subsidiary of the
                  Guarantor with assets having a book value of $1,000,000,000 or
                  more, other than Williams Gas Pipelines Central, Inc. (ii) any
                  Subsidiary of the Guarantor, other than Williams Gas Pipelines
                  Central, Inc., that itself (on an unconsolidated, stand alone
                  basis) owns in excess of 5% of the book value of the
                  Consolidated Assets of the Guarantor and its Consolidated
                  Subsidiaries and (iii) each of TGPL, TGT, and NWP. "TGPL",
                  "TGT", and "NWP" are used herein as defined in the Multiyear
                  Williams Credit Agreement."

         (f) Section 6(i) of the Guaranty is hereby amended by inserting the
         following phrase at the beginning such Section:

                  "Other than with respect to Acceptable Intercompany
                  Indebtedness owing by the Borrower or by any Subsidiary of the
                  Borrower to the Guarantor or any of its Subsidiaries,".

         (g) Section 8.01 of the Guaranty is hereby amended and restated in its
         entirety and replaced with the following:

                  8.01. Amendments, Etc. Any amendment or waiver to this
                  Guaranty shall be effective only if approved by Financial
                  Institutions holding at least 51% of the principal amount of
                  the Guaranteed Obligations at the time thereof and only in the
                  specific instance and for the specific purpose for which
                  given. Provided, however, that any amendment or waiver
                  releasing the Guarantor from any liability hereunder shall
                  require the unanimous consent of all Financial Institutions
                  and be effective only in the specific instance and for the
                  specific purpose for which given. No Financial Institution may
                  be removed as a beneficiary of this Guaranty without such
                  Financial Institution's prior written consent.

         (h) Section 8.06 of the Guaranty is hereby amended and restated in its
         entirety and replaced with the following:

                  "Section 8.06 Incorporated Definitions and Provisions. All
                  defined terms and other provisions that are incorporated into
                  this Guaranty by reference to other agreements shall
                  incorporate into this Guaranty the provisions of such other
                  agreements that exist as of the date hereof; however, such
                  provisions shall be automatically modified herein by any
                  amendment or modification that takes place after the date
                  hereof in such other referenced agreement(s)."



                                      -3-

<PAGE>


         (i) Schedule I to the Guaranty is hereby amended and restated in its
         entirety with Schedule I attached hereto.

         (j) A new Schedule II to the Guaranty and a new Schedule III to the
         Guaranty are hereby added which are the documents attached as Schedule
         II and Schedule III hereto.

2. Representations and Warranties. Guarantor hereby restates as of even date
herewith all of the representations and warranties contained in Section 5 of the
Guaranty.

3. Conditions to Effectiveness. This Amendment shall be deemed effective (the
"Effective Date") upon the satisfaction of the conditions precedent as set out
in Section 3.1 of that certain Amended and Restated Credit Agreement, dated as
of October 31, 2002, among Company and the Financial Institutions named therein,
without giving effect to the terms of Section 3.3.

4. Governing Law. This Amendment shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.

5. Reference to and Effect on the Guaranty. The amendments set forth herein are
limited precisely as written and shall not be deemed to be a consent or waiver
to, or modification of any other term or condition in the Guaranty or any of the
documents referred to therein. Except as expressly amended and consented hereby,
the terms and conditions of the Guaranty shall continue in full force and
effect, and as amended hereby, the Guaranty is ratified and confirmed in all
respects. On and after the Effective Date, the Guaranty shall be deemed to mean
the Guaranty as amended hereby.

6. Counterparts. This Amendment may be executed in several counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.

Schedule I:       Schedule I to Guaranty
Schedule II:      Schedule II to Guaranty
Schedule III:     Schedule III to Guaranty



                                      -4-

<PAGE>


         IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this Amendment to be signed in their
respective names.

                                      Williams Gas Pipeline Company, LLC,
                                      as Guarantor


                                      By:   /s/ James G. Ivey
                                          --------------------------------------
                                      Name:     James G. Ivey
                                            ------------------------------------
                                      Title:    Assistant Treasurer
                                            ------------------------------------



                                      [FINANCIAL INSTITUTIONS]


<PAGE>
         Each of the entities reflected on the following ten (10) pages is
executing this Amendment as a Financial Institution party to the Amended and
Restated Credit Agreement dated as of October 31, 2002 among the Company and the
Financial Institutions named therein:


<PAGE>


                                    AGENT AND COLLATERAL AGENT:

                                    CITICORP USA, INC., as Agent and Collateral
                                    Agent



                                    By:  /s/ Todd J. Mogil
                                    Name:  Todd J. Mogil
                                    Title:  Vice President


<PAGE>



                                    BANKS AND ISSUING BANKS:

                                    CITIBANK N.A., as Issuing Bank



                                    By:  /s/ Todd J. Mogil
                                    Name:  Todd J. Mogil
                                    Title:  Vice President


<PAGE>



                                    CITICORP USA, INC.



                                    By:  /s/ Todd J. Mogil
                                    Name:  Todd J. Mogil
                                    Title:  Vice President


<PAGE>



                                    THE BANK OF NOVA SCOTIA, as Canadian Issuing
                                    Bank and Bank



                                    By:
                                    Name:
                                    Title:


<PAGE>



                                    BANK OF AMERICA N.A., as Issuing Bank and
                                    Bank



                                    By:  /s/ Claire M. Liu
                                    Name:  Claire M. Liu
                                    Title:  Managing Director


<PAGE>



                                    JP MORGAN CHASE BANK



                                    By:  /s/ Robert W. Traband
                                    Name:  Robert W. Traband
                                    Title:  Vice President


<PAGE>



                                    TORONTO DOMINION (TEXAS), INC.



                                    By:   /s/ Jill Hall
                                    Name:  Jill Hall
                                    Title:  Vice President


<PAGE>



                                    CREDIT LYONNAIS NEW YORK BRANCH



                                    By:  /s/ Olivier Audermard
                                    Name:  Olivier Audermard
                                    Title:  Senior V.P.


<PAGE>



                                    MERRILL LYNCH CAPITAL CORP.



                                    By:  /s/ Carol J.E. Feeley
                                    Name:  Carol J.E. Feeley
                                    Title:  Vice President


<PAGE>



                                    LEHMAN COMMERCIAL PAPER INC.



                                    By:  /s/ Francis Chang
                                    Name:  Francis Chang
                                    Title:  Authorized Signatory






<PAGE>



                                   SCHEDULE I
                                CREDIT DOCUMENTS


NEW CREDIT FACILITY:

Amended and Restated Credit Agreement dated as of October 31, 2002 executed by
The Williams Companies, Inc., as borrower, Citicorp USA, Inc., as agent and
collateral agent, Bank of America N.A. as syndication agent, Citibank, N.A. and
Bank of America N.A. as issuing bank, Salomon Smith Barney Inc., as arranger,
and the banks named therein.

All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with the foregoing.

PROGENY AGREEMENTS

Parent Support Agreement dated as of December 23, 1998, made by The Williams
Companies, Inc. in favor of Castle Associates L. P. and Colchester LLC and the
other Indemnified Persons listed therein, as amended. Notwithstanding anything
in the Guaranty to the contrary, for purposes of Section 8.01 of the Guaranty,
the principal amount of this Progeny Facility shall equal the outstanding
Unrecovered Capital of the Limited Partner plus all accrued and undistributed
First Priority Return to be distributed to the Limited Partner in accordance
with Section 4.01(a) of the Castle Partnership Agreement plus all other amounts
then due and payable to the Limited Partner. As used herein, "Castle Partnership
Agreement" means the Amended and Restated Agreement of Limited Partnership of
Castle Associates L.P., dated as of December 23, 1998, by and among Garrison,
L.L.C., a Delaware limited liability company, Laughton, L.L.C., a Delaware
limited liability company, and Colchester LLC, a Delaware limited liability
company, as amended, supplemented, amended and restated or otherwise modified
from time to time. Capitalized terms used in this paragraph but not otherwise
defined herein shall have the meanings ascribed in the Castle Partnership
Agreement.

First Amended and Restated Term Loan Agreement dated as of October 31, 2002,
among The Williams Companies, Inc., as Borrower, and Credit Lyonnais New York
Branch, as Administrative Agent, and the Lenders named therein, as amended.

Second Amended and Restated Participation Agreement dated as of January 28,
2002, among Williams Oil Gathering, L.L.C., as Lessee, Williams Field Services
Company, a Delaware corporation, as Construction Agent, The Williams Companies,
Inc., a Delaware corporation, as Guarantor, Wells Fargo Bank Northwest, National
Association (formerly known as First Security Bank, National Association), as
Certificate Trustee, Wells Fargo Bank Nevada, N.A. (successor by merger to First
Security Trust Company of Nevada), as Collateral Agent, the financial
institutions named therein as the Facility Lenders and Purchasers, Bank of
America, National Association, as Administrative Agent and Administrator for the
CP Lender, Banc of America



<PAGE>

Facilities Leasing, L.L.C., as Arranger, Bank of Nova Scotia, as Syndication
Agent, and Credit Agricole Indosuez, as Documentation Agent, as amended by the
Consent and First Amendment dated as of July 31, 2002 and the Consent and Second
Amendment dated as of October 31, 2002. Second Amended and Restated
Participation Agreement dated as of January 28, 2002 among Williams Field
Services - Gulf Coast Company, L.P., a Delaware limited partnership, as Lessee,
Williams Field Services Company, a Delaware corporation, as Guarantor, Wells
Fargo Bank Northwest, National Association, (formerly known as First Security
National Bank , National Association), as Certificate Trustee, Wells Fargo Bank
Nevada N.A., (successor by merger to First Security Trust company of Nevada), as
Collateral Agent, the financial institutions named therein as Certificate
Holders, Hatteras Funding Corporation, a Delaware corporation, as CP Lender, the
financial institutions named therein as the Facility Lenders and Purchasers,
Bank of America, National Association, as Administrative Agent and Administrator
for the CP Lender, Banc of America Facilities Leasing, L.L.C., as Arranger, Bank
of Nova Scotia, as Syndication Agent, and Credit Agricole Indosuez, as
Documentation Agent, as amended by the Consent and First Amendment dated as of
July 31, 2002 and the consent and Second Amendment dated as of October 31, 2002.

$200,000,000 Term Loan Agreement dated as of January 29, 1999, among The
Williams Companies, Inc., as Borrower, and Mizuho Corporate Bank, Ltd., f/k/a
The Fuji Bank, Limited, as Administrative Agent, and the Banks named therein, as
amended.

Joint Venture Sponsor Agreement dated as of December 28, 2000, among The
Williams Companies, Inc., as Sponsor and Williams Field Services Company, in
favor of Prairie Wolf Investors, Arctic Fox Assets, L.L.C., Williams Energy
(Canada), Inc. and the other Indemnified Persons listed therein, as amended.
Notwithstanding anything in the Guaranty to the contrary, for purposes of
Section 8.01 of the Guaranty, the outstanding amount of this Progeny Facility
shall equal the outstanding Capital Contribution of the Joint Venture Class B
Member (each as defined in the Snow Goose Company Agreement) plus the accrued
and unpaid Class B Amount (as defined in the Snow Goose Company Agreement) plus
all other amounts then due and payable to the Joint Venture Class B Member. As
used herein, "Snow Goose Company Agreement" means the Amended and Restated
Company Agreement of Snow Goose Associates, L.L.C., a Delaware limited liability
company, Prairie Wolf Investors, L.L.C., a Delaware limited liability company,
and Snow Goose Associates, L.L.C., a Delaware limited liability company, as
amended, supplemented, amended and restated or otherwise modified from time to
time.

Letter of Credit and Reimbursement Agreement dated as of May 15, 1994, among
Tulsa Parking Authority, The Williams Companies, Inc., Bank of Oklahoma,
National Association, and Bank of America, N.A. (formerly NationsBank of Texas,
N.A.), relative to Tulsa Parking Authority First Mortgage Revenue Bonds, as
amended.

$127,000,000 Master Agreement dated as of March 6, 2000, among The Williams
Companies, Inc., as Guarantor, Williams TravelCenters, Inc. and certain other
subsidiaries of The Williams Companies, Inc., as Lessees, Atlantic Financial
Group, Ltd., as Lessor, SunTrust Bank, as Agent, Societe Generale, Southwest
Agency, as Documentation Agent, and KBC Bank, N.V., as Syndication Agent and the
Lenders named therein, as amended.


<PAGE>


PPH Sponsor Agreement dated as of December 31, 2001, by The Williams Companies,
Inc., as Sponsor, in favor of Piceance Production Holdings LLC, Plowshare
Investors LLC, and other Indemnified Persons listed in the agreement, as
amended. Notwithstanding anything in the Guaranty to the contrary, for purposes
of Section 8.01 of the Guaranty, the outstanding amount of this Progeny Facility
shall equal the outstanding Contributed Capital of the Class B Preferred Member
(each as defined in the PPH Company Agreement) plus the accrued and unpaid Class
B Priority Return (as defined in the PPH Company Agreement) plus all other
amounts then due and payable to the Class B Preferred Member. As used herein,
"PPH Company Agreement" means the Amended and Restated Limited Liability Company
Agreement of Piceance Production Holdings LLC, dated as of December 31, 2001, by
and among, Williams Production RMT Company, a Delaware corporation, Bison
Royalty LLC, a Delaware limited liability company, Plowshare Investors LLC, a
Delaware limited liability company, and Piceance Production Holdings LLC, a
Delaware limited liability company, as amended, supplemented, amended and
restated or otherwise modified from time to time.

Amended and Restated LLC Loan Agreement dated as of June 9, 2000 among
Millennium Energy Fund, L.L.C. and MEF Production Payment Trust, as amended, and
the Amended and Restated Notes Credit Agreement dated as of June 9, 2000 among
MEF Production Payment Trust as the Borrower, certain financial institutions
thereto, Credit Lyonnais as Syndication Agent, and Bank of Montreal, as Agent,
and the Transaction Documents (as defined therein) related thereto.

All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with any of the foregoing.

LEGACY L/CS

See Attachment 1 attached hereto.

All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with the letters of credit described on
Attachment 1.


<PAGE>


                                  ATTACHMENT 1

                                [TO BE ATTACHED]


<PAGE>


                                   SCHEDULE II
                               CERTAIN OBLIGATIONS


Obligations arising from that certain GSX Project Agreement dated April 23, 2001
among GSX Canada Limited Partnership, Georgia Strait Crossing Pipeline LP,
British Columbia Hydro and Power Authority, and Williams Gas Pipeline Company,
LLC, as amended from time to time, and agreements related thereto, not to exceed
$3 million in the aggregate outstanding at any time.


<PAGE>


                                  SCHEDULE III

NEW CREDIT AGREEMENT

1.       Citicorp USA, Inc., as Agent on behalf of the Lenders party to that
         certain Amended and Restated Credit Agreement dated as of October 31,
         2002 by and among The Williams Companies, Inc. as Borrower, the Lenders
         party thereto, Citibank, N.A., Bank of America N.A. and The Bank of
         Nova Scotia as Issuing Banks, Bank of America N.A. as Syndication
         Agent, Salomon Smith Barney Inc. as Arranger, and Citicorp USA, Inc.,
         as Agent and Collateral Agent.

PROGENY FACILITIES

1.       Castle Associates L.P.* and Colchester LLC and the other Indemnified
         Persons and Guaranteed Parties as parties to or beneficiaries of that
         certain Parent Support Agreement dated as of December 23, 1998 by The
         Williams Companies, Inc. in favor of Castle Associates L. P. and
         Colchester LLC and the other Indemnified Persons listed therein, as
         amended (the "Castle Parent Support Agreement"), and related
         transaction documents. Capitalized terms used but not otherwise defined
         in this paragraph 1 have the meanings ascribed in the Castle Parent
         Support Agreement.

2.       Credit Lyonnais New York Branch, as Administrative Agent on behalf of
         the Lenders party to the First Amended and Restated Term Loan Agreement
         dated as of October 31, 2002 among The Williams Companies, Inc., as
         Borrower, and Credit Lyonnais New York Branch, as Administrative Agent,
         and the Lenders named therein, as amended.

3.       First Security Bank, N.A. as Certificate Trustee on behalf of the
         Certificate Holders, Wells Fargo Bank Nevada, N.A., as Collateral
         Agent, and Bank of America, N.A., as Administrative Agent and
         Administrator under that certain Second Amended and Restated
         Participation Agreement, dated as of January 28, 2002, among Williams
         Oil Gathering, L.L.C., as Lessee, Williams Field Services Company, as
         Construction Agent, The Williams Companies, Inc., as Guarantor, First
         Security Bank, N.A. as Certificate Trustee, the Certificate Holders
         party thereto, Wells Fargo Bank Nevada, N.A., as Collateral Agent, Bank
         of America, N.A., as Administrative Agent and Administrator, as
         amended.

4.       First Security Bank, N.A. as Certificate Trustee on behalf of the
         Certificate Holders, Wells Fargo Bank Nevada, N.A., as Collateral
         Agent, and Bank of America, N.A., as Administrative Agent and
         Administrator under that certain Second Amended and Restated
         Participation Agreement, dated as of January 28, 2002, among Williams
         Field Services - Gulf Coast Company, L.P., as Lessee, Williams Field
         Services Company, as Construction Agent, The Williams Companies, Inc.,
         as Guarantor, First Security Bank, N.A. as Certificate Trustee, the
         Certificate Holders party thereto, Wells Fargo Bank Nevada, N.A., as
         Collateral Agent, Bank of America, N.A., as Administrative Agent and
         Administrator, as amended.


<PAGE>

5.       Mizuho Corporate Bank, Ltd., f/k/a The Fuji Bank, Limited, as
         Administrative Agent on behalf of the Banks party to the $200,000,000
         Term Loan Agreement, dated as of January 29, 1999, among The Williams
         Companies, Inc., as Borrower, and The Fuji Bank, Limited, as
         Administrative Agent, and the Banks named therein, as amended.

6.       Prairie Wolf Investors, L.L.C. and Snow Goose Associates, L.L.C*. and
         the other Indemnified Persons (as defined in the Joint Venture Sponsor
         Agreement) as parties to or beneficiaries of that certain Joint Venture
         Sponsor Agreement, dated as of December 28, 2000, among The Williams
         Companies, Inc., as Sponsor and Williams Field Services Company, in
         favor of Prairie Wolf Investors, L.L.C., Arctic Fox Assets, L.L.C.,
         Williams Energy (Canada), Inc. and the other Indemnified Persons listed
         therein, as amended, and related transaction documents.

7.       Tulsa Parking Authority and Bank of America, N.A. (formerly NationsBank
         of Texas, N.A.) as parties to that certain Letter of Credit and
         Reimbursement Agreement, dated as of May 15, 1994, among Tulsa Parking
         Authority, The Williams Companies, Inc., Bank of Oklahoma, National
         Association, and Bank of America, N.A. (formerly NationsBank of Texas,
         N.A.), relative to Tulsa Parking Authority First Mortgage Revenue
         Bonds, as amended, and related transaction documents.

8.       Atlantic Financial Group, Ltd., as Lessor, and SunTrust Bank, as Agent
         on behalf of the Lenders party to that certain Master Agreement, dated
         as of March 6, 2000, among The Williams Companies, Inc., as Guarantor,
         Williams TravelCenters, Inc. and certain other subsidiaries of The
         Williams Companies, Inc., as Lessees, Atlantic Financial Group, Ltd.,
         as Lessor, SunTrust Bank, as Agent, Societe Generale, Southwest Agency,
         as Documentation Agent, KBC Bank, N.V., as Syndication Agent, and the
         Lenders party thereto, as amended, and related transaction documents.

9.       Piceance Production Holdings LLC*, Plowshare Investors LLC and the
         other Indemnified Persons (as defined in the PPH Sponsor Agreement) as
         parties to or beneficiaries of that certain PPH Sponsor Agreement,
         dated as of December 31, 2001, by The Williams Companies, Inc., as
         Sponsor, in favor of Piceance Production Holdings LLC, Plowshare
         Investors LLC, and other Indemnified Persons listed in the agreement,
         as amended, and related transaction documents.

10.      The Guaranteed Parties under that certain Amended and Restated Payment
         and Performance Guaranty, Indemnity and Undertaking made by The
         Williams Companies, Inc. in favor of the Guaranteed Parties, dated
         October 31, 2002, as amended, and related transaction documents.



<PAGE>


11.      The Guaranteed Parties under that certain First Amendment to
         Performance Guaranty, Indemnity and Undertaking (Initial LLC Asset)
         made by The Williams Companies, Inc. in favor of the Guaranteed
         Parties, dated October 31, 2002, as amended, and related transaction
         documents.

LEGACY L/CS

1.       Each issuer of a letter of credit as set forth on Attachment 1 attached
         to Schedule I to the Guaranty.






*Notwithstanding anything in the Guaranty to the contrary, the entities marked
with an asterisk shall be deemed to be "Financial Institutions" for purposes of
the Guaranty for so long as any Person not an affiliate of the Company owns an
Equity Interest in such entity.

<PAGE>


THE WILLIAMS COMPANIES, INC.

LEGACY LETTERS OF CREDIT - FOR PURPOSE OF PRO RATA DISTRIBUTION OF NET CASH
PROCEEDS FROM ASSET SALES

AS OF 10-31-02

<Table>
<Caption>
LETTER OF                                      ACCOUNT
CREDIT #                                        PARTY                                    BENEFICIARY
- ---------                                      -------                                   -----------
<S>                                <C>                                          <C>
ABN-AMRO
S815546                            Wilpro Energy Services  PIGAP II Ltd         PDVSA Petroleo y Gas SA

     Total ABN-AMRO

BANK OF AMERICA
C7269699                           MAPCO, Inc.                                  Old Republic Insurance Company
C7269707                           MAPCO, Inc.                                  ACE Insurance Company of Texas
3020403                            WilPro Energy Services (El Furrial) Ltd      Citibank, N.A.
7409323                            The Williams Companies, Inc.                 PDVSA Petroleo y Gas, S.A.
3037033                            Barrett Resources Corporation                Oklahoma Tax Commission
5535821l135652                     TWC                                          Tulsa Parking Authority

     Total Bank of America

JPMORGAN CHASE
P-389157                           The Williams Companies, Inc.                 Citicorp North America Inc. as RCE Agent (Castle)
P-299538                           Wilpro Energy Services (PIGAP II) Limited    PDVSA Petroleo y Gas,  S.A.
P-219203                           Williams Energy Marketing  & Trading         The New York Independent System Operator, Inc.
P-224665                           Williams Energy Marketing  & Trading         Royal Bank of Canada
P-221802                           Williams Energy Marketing  & Trading         California Power  Exchange Corporation
P-221924                           The Williams Companies, Inc.                 National Union Fire Insurance et al
P-222915                           The Williams Companies, Inc.                 United States Fidelity & Guaranty
P-225395                           Williams Production RMT Co.                  Powder River Energy Corp.
P-225403                           Williams Production Mid-Continent Company    U.S. Dept. of Interior Bureau of Indian Affairs

     Total JPMorgan Chase

CITIBANK
33623046                           TWC on behalf of  ACCROVEN, SRL              PDVSA Gas S.A.  ACCRO III & IV Projects
33623048                           TWC on behalf of ACCROVEN, SRL               PDVSA Gas S.A.  ACCRO III & IV Projects
33623049                           TWC on behalf of ACCROVEN, SRL               PDVSA Gas S. ACCRO III & IV Projects

     Total Citibank

ROYAL BANK OF CANADA
1739/s19728                        TWC/WGP-Alliance Canada                      Montreal Trust Company of Canada
1739/s19729                        TWC/WGP-Alliance Canada                      The Bank of Nova Scotia Trust Co. of NY

     Total Royal Bank of Canada

TORONTO DOMINION
1699                               The Williams Companies, Inc.                 Prairie Wolf Investors

     Total Toronto Dominion

WELLS FARGO
NMS232199                          Transco Energy Company                       Transportation Insurance Company

     Total Wells Fargo

                                   Total LC's Outstanding


<Caption>

LETTER OF                                                        EXPIRY          % OF          CASH
CREDIT #                              AMOUNT        DATED         DATE           TOTAL      COLLATERAL
- ---------                             ------        -----        ------          -----      ----------
<S>                                <C>            <C>          <C>               <C>       <C>
ABN-AMRO
S815546                            $   5,000,000    9/1/1999    8/29/2003
                                   -------------
     Total ABN-AMRO                $   5,000,000                                  3.3%     $     471,000

BANK OF AMERICA
C7269699                           $     300,000   3/15/1995    3/30/2003
C7269707                           $   1,582,902   3/15/1995    3/31/2003
3020403                            $   5,652,733  11/15/1999   11/15/2002
7409323                            $     225,000    5/2/2002    5/31/2003
3037033                            $     200,000   4/16/2001    5/11/2003
5535821l135652                     $   8,608,985   5/15/1992    5/31/2003
                                   -------------
     Total Bank of America         $  16,569,620                                 11.0%     $   2,559,000

JPMORGAN CHASE
P-389157                           $   3,800,000  12/23/1998   12/23/2002
P-299538                           $  40,000,000    4/3/2000    4/16/2003
P-219203                           $   5,500,000  11/13/2001    12/1/2002
P-224665                           $   5,000,000   4/22/2002    4/30/2003
P-221802                           $   1,000,000    2/1/2002     2/1/2003
P-221924                           $   9,010,112    2/6/2002     3/1/2003
P-222915                           $   6,650,000    3/7/2002     3/1/2003
P-225395                           $   4,000,000   5/10/2002    5/10/2004
P-225403                           $      30,000   5/13/2002    5/17/2003
                                   -------------
     Total JPMorgan Chase          $  74,990,112                                 49.8%     $   9,720,000

CITIBANK
33623046                           $  32,500,000    3/9/2001     1/6/2003
33623048                           $   4,000,000    3/9/2001     1/6/2003
33623049                           $   1,000,000    3/9/2001     1/6/2003
                                   -------------
     Total Citibank                $  37,500,000                                 24.9%     $   3,536,000

ROYAL BANK OF CANADA
1739/s19728                        $   2,789,778  12/18/2000   12/17/2002
1739/s19729                        $   2,922,000  12/18/2000   12/17/2002
                                   -------------
     Total Royal Bank of Canada    $   5,711,778                                  3.8%     $     547,000

TORONTO DOMINION
1699                               $  10,860,000  12/28/2000   12/28/2005
                                   -------------
     Total Toronto Dominion        $  10,860,000                                  7.2%     $   1,024,000

WELLS FARGO
NMS232199                          $      40,000    2/2/1995     2/2/2003
                                   -------------
     Total Wells Fargo             $      40,000                                  0.0%     $      4,000

                                   $ 150,671,510                                  100%     $ 17,861,000
                                   =============                                          ------------
</Table>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>9
<FILENAME>d00961exv10w7.txt
<DESCRIPTION>PLEDGE AGREEMENT
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.7
                                                                  EXECUTION COPY

                  FIRST AMENDMENT TO COLLATERAL TRUST AGREEMENT

         This First Amendment dated as of October 31, 2002 (this "Amendment") to
the Collateral Trust Agreement dated as of July 31, 2002 (as amended and
modified from time to time, the "Collateral Trust Agreement"), is among The
Williams Companies, Inc., a Delaware corporation (the "Company"), and each of
its Subsidiaries which is or which subsequently becomes a party thereto
(together, with the Company, the "Debtors"), in favor of Citibank, N.A., as
collateral trustee ("Collateral Trustee") for the benefit of the holders of the
Secured Obligations. All capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Collateral Trust
Agreement.

                                   WITNESSETH:

         WHEREAS, the parties hereto have agreed to amend certain provisions of
the Collateral Trust Agreement;

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Collateral Trust Agreement is hereby amended as follows:

1.       Amendments

         (a) Pursuant to the terms of those two certain Consent and Waivers each
         dated as of September 20, 2002, by and among the Company and the other
         signatories thereto, the Collateral Trust Agreement was amended to (i)
         remove Williams Field Services - Gulf Coast Company, L.P. as a Debtor
         and (ii) add Williams Gulf Coast Gathering Company, LLC as Debtor.
         Pursuant to this Amendment, the following additional parties are added
         as Debtors: WFS - Pipeline Company; WFS Gathering Company, L.L.C.;
         Williams Field Services - Matagorda Offshore Company, LLC; Williams Gas
         Processing - Mid Continent Region Company; WFS-OCS Gathering Co.;
         HI-BOL Pipeline Company; Goebel Gathering Company, L.L.C.; Williams
         Petroleum Services, LLC; Longhorn Enterprises of Texas, Inc.; and
         Williams GP LLC.

         (b) The introductory paragraph of the Collateral Trust Agreement is
         hereby amended and restated in its entirety and replaced with the
         following:

                  "COLLATERAL TRUST AGREEMENT, dated as of July 31, 2002 (this
                  "Agreement"), among THE WILLIAMS COMPANIES, INC., a Delaware
                  corporation (the "Company"), the subsidiaries of the Company
                  which are or which subsequently become parties hereto (the
                  "Subsidiaries" and collectively


<PAGE>


                  with the Company, the "Debtors"), and CITIBANK, N.A., as
                  Collateral Trustee (the "Collateral Trustee"):"

         (c) The definition of Release Notice set forth in Section 1.1 of the
         Collateral Trust Agreement is hereby amended and restated in its
         entirety and replaced with the following:

                  "Release Notice: shall mean a written notice, signed by a
                  Responsible Officer of the Company and the Debtors with
                  interests in the Collateral to be released, that requests the
                  release of Liens held in favor of the Collateral Trustee in
                  such Collateral and that (a) certifies to the Collateral
                  Trustee that the release of such Collateral is permitted under
                  the applicable terms of the Principal Bank Facility and the
                  Principal L/C Facility (collectively, the "Facilities") and
                  has either been consented to by the Required Decision Group or
                  is expressly permitted under the applicable terms of the
                  Facilities without the need of any such consent, (b) sets
                  forth the estimated proceeds from the disposition of such
                  Collateral and the intended application thereof and confirms
                  that such application is in accordance with the applicable
                  requirements of the Facilities, and (c) covenants to the
                  Collateral Trustee that the proceeds of such Collateral shall
                  be applied as described therein."

         (d) The following Section 1.2 is hereby added to the Collateral Trust
         Agreement:

                  "1.2 Incorporated Definitions and Provisions. All defined
         terms that are incorporated into this Agreement by reference to other
         agreements shall incorporate into this Agreement the provisions of such
         other agreements that exist as of the date hereof; however, such
         provisions shall be automatically modified herein by any amendment or
         modification that takes place after the date hereof in such other
         referenced agreement(s); subject to the following limitations: (a) no
         such amendment or modification shall be effective with respect to this
         Agreement until Collateral Trustee shall have received a copy of such
         amendment or modification and (b) no provision of any such amendment or
         modification that imposes any additional liability, obligation or
         adverse effect on the Collateral Trustee shall be effective with
         respect to this Agreement unless the Collateral Trustee has executed a
         written consent to such provision or to the amendment or modification
         in which such provision is set forth.

         (e) Section 2.5 of the Collateral Trust Agreement is hereby amended and
         restated in its entirety and replaced with the following:

                  "2.5 Releases of Collateral.

                           (a) In connection with any proposed sale, assignment,
                  transfer, or other disposition of Collateral, the Company and
                  the Debtors with an interest in such Collateral may deliver a
                  Release Notice to the Collateral Trustee which the


<PAGE>


                  Collateral Trustee shall promptly distribute to the holders of
                  Secured Obligations under the Principal Bank Facility and the
                  Principal L/C Facility. Each of the holders of Secured
                  Obligations under either of the Facilities shall have 15 days
                  after the receipt of such Release Notice to notify the
                  Collateral Trustee if such holder believes that the release of
                  such Collateral is improper because (i) the release of such
                  Collateral is not permitted under the applicable terms of the
                  Facilities or has not been consented to by the Required
                  Decision Group or (ii) the intended application of the
                  proceeds from the disposition of such Collateral is not in
                  accordance with the applicable requirements of the Facilities
                  (any such certificate being referred to herein as an
                  "Objection Certificate"). If an Objection Certificate is not
                  delivered during such 15 day period, then the Collateral
                  Trustee shall be authorized to and agrees to release the Liens
                  of the Collateral Trustee in the Collateral described in the
                  Release Notice upon the contemporaneous receipt by Collateral
                  Trustee of the amount of the proceeds, if any, of such
                  permitted disposition that are required to be delivered to the
                  Collateral Trustee pursuant to the terms of the Facilities or
                  any of the Security Documents and as set out in the Release
                  Notice. If during the 15 day period referenced above the
                  Collateral Trustee receives an Objection Certificate, then the
                  Liens will not be released at the end of such period and the
                  Collateral Trustee will not take any actions requested under
                  the Release Notice until (x) such Objection Certificate shall
                  be withdrawn in writing by the holder of Secured Obligations
                  which shall have delivered the same to the Collateral Trustee
                  or (y) until the Collateral Trustee shall have received a
                  final order of a court of competent jurisdiction directing it
                  to release the Liens of the Collateral Trustee in such
                  Collateral. In connection with any release pursuant to this
                  Section 2.5, upon receipt of the appropriate amount of
                  proceeds from such disposition, if any, the Collateral Trustee
                  shall at the request of the Company execute a partial release
                  of the Liens granted under the Security Documents and such
                  instruments, including UCC-3 amendments or termination
                  statements, as are necessary to partially release or terminate
                  any documents constituting public notice of the Security
                  Documents and the Liens granted thereunder and shall assign
                  and transfer, or cause to be assigned and transferred, and
                  shall deliver, or cause to be delivered, to the applicable
                  Debtors, all property thereof then held by the Collateral
                  Trustee in which the Lien of the Collateral Trustee has been
                  released.

                           (b) Upon Collateral Trustee's receipt of the portion
                  of the gross proceeds from a disposition, if any, that are
                  required to be delivered to the Collateral Trustee pursuant to
                  the terms of the Facilities and as specified in the Release
                  Notice, Collateral Trustee shall hold such proceeds as
                  Collateral under this Agreement until Company delivers to
                  Collateral Trustee a division of proceeds certificate (a
                  "Division Certificate"). Concurrently with delivery of any
                  Division Certificate to the Collateral Trustee, the Company
                  shall deliver copies of such Division Certificate to the Agent
                  (as such term is defined in the Principal Bank Facility) for
                  the Banks that are party to the Principal Bank Facility and to

<PAGE>


                  the Agent (as such term is defined in the Principal L/C
                  Facility) for the Banks that are party to the Principal L/C
                  Facility. The Division Certificate shall be prepared based on
                  the terms of Section 2.04(c) of the Principal Bank Facility
                  and Section 2.3 (b) of the Principal L/C Facility. Upon
                  receipt of such a Division Certificate the Collateral Trustee
                  shall as soon as practicable disburse the proceeds, if any, it
                  has received consistent with the terms of the Division
                  Certificate. If Collateral Trustee obtains any proceeds
                  resulting from the sale of Collateral that are not required to
                  be delivered pursuant to the terms of Section 2.04(c) of the
                  Principal Bank Facility or Section 2.3 (b) of the Principal
                  L/C Facility to a holder of Secured Obligations or another
                  creditor of the Company or its Subsidiaries then the
                  Collateral Trustee shall as soon as practicable deliver such
                  proceeds to the Company free and clear of any Liens."

         (f) The following Section 2.10 is hereby added to the Collateral Trust
         Agreement:

                           "2.10 Releases in Connection with Permitted
                  Dispositions. Section 5.2(e) of the Principal L/C Facility and
                  Section 5.02(l) of the Principal Bank Facility provide that
                  certain dispositions will be permitted and that any Guarantor
                  (as defined therein) that is the owner of the assets subject
                  to the disposition permitted pursuant to Section 5.2(e) of the
                  Principal L/C Facility and Section 5.02(l) of the Principal
                  Bank Facility and whose Equity Interests (as defined therein)
                  are being conveyed in connection with such disposition (as
                  well as the owners' of such Equity Interests, to the extent of
                  such permitted distribution) shall be automatically released
                  as a party to this Agreement and to the other Security
                  Documents. The Debtors and the Collateral Trustee hereby
                  acknowledge and agree to the automatic release described above
                  and the Collateral Trustee agrees to and is hereby authorized
                  to execute documents and notices evidencing such releases;
                  provided, however, Collateral Trustee shall not be required to
                  execute any documents or notices in connection with any
                  automatic release unless Collateral Trustee has received
                  satisfactory certifications and documentation that the
                  conditions specified in Section 5.2(e) of the Principal L/C
                  Facility and Section 5.02(l) of the Principal Bank Facility
                  for obtaining an automatic release, if any, have been
                  satisfied."

         (g) The following Section 2.11 is hereby added to the Collateral Trust
         Agreement:

                           "2.11 Execution of Non-Disturbance and Attornment
                  Agreement. Collateral Trustee agrees to and is hereby
                  authorized to execute a non-disturbance and attornment
                  agreement in accordance with the provisions of Section 5.2(e)
                  of the Principal L/C Facility and Section 5.02(l) of the
                  Principal Bank Facility which agreement shall be substantially
                  in the form attached to such Principal L/C Facility and
                  referenced in such Section 5.2(e) and such Section 5.02(l)."

         (h) The following Section 6.9 is hereby added to the Collateral Trust
         Agreement:


<PAGE>


                  "Section 6.9 Joinder. Pursuant to the terms of the Master Debt
                  Agreements certain Persons (hereafter referred to as the
                  "Joining Subsidiaries") may desire to or be required to join
                  this Agreement as Debtors. In connection with any such joinder
                  the Joining Subsidiary shall cause to be executed and
                  delivered (a) a joinder agreement substantially in the form of
                  the joinder agreement attached hereto as Schedule II and (b)
                  authorization documentation, corporate documentation,
                  perfection documentation and opinion letters reasonably
                  satisfactory to the Collateral Trustee reflecting the status
                  of such Joining Subsidiary and the enforceability of such
                  agreements with respect to such Joining Subsidiary; provided,
                  however, that the Collateral Trustee shall have no obligations
                  with respect to the additional Collateral that results from
                  the addition of a Joining Subsidiary as a Debtor pursuant to
                  this Agreement prior to the delivery of such additional
                  Collateral, and Collateral Trustee shall have no duty to
                  solicit the delivery of any Collateral from any Debtor."

         (i) A new Schedule II to the Collateral Trust Agreement is hereby added
         which is the document attached as Schedule II hereto.

2. Acknowledgement. Williams Energy Marketing & Trading Company hereby
acknowledges that it is a Debtor and original signatory to the Collateral Trust
Agreement effective as of July 31, 2002.

3. Conditions to Effectiveness. This Amendment shall be deemed effective (the
"Effective Date") upon the satisfaction of the conditions precedent as set out
in Section 3.1 of that certain Amended and Restated Credit Agreement dated as of
October 31, 2002, among Company and the Financial Institutions named therein,
without giving effect to the terms of Section 3.3; provided, however, that the
Collateral Trustee shall have no obligations with respect to the additional
Collateral that results from the addition of Debtors as parties to the
Collateral Trust Agreement pursuant to this Amendment prior to the delivery of
such additional Collateral, and the Collateral Trustee shall have no duty to
solicit the delivery of any Collateral from any Debtor. Notwithstanding anything
to the contrary herein, any provision or portion of a provision in this
Amendment that is or is determined to be a release of Collateral shall not be
effective to release such Collateral until the Collateral Trustee has received
satisfactory documentation that such release of Collateral is permitted by or
has been properly approved in accordance with the terms of the Collateral Trust
Agreement.

4. Governing Law. This Amendment shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.

5. Reference to and Effect on the Collateral Trust Agreement. The amendments set
forth herein are limited precisely as written and shall not be deemed to be a
consent or waiver to, or modification of any other term or condition in the
Collateral Trust Agreement or any of the documents referred to therein. Except
as expressly amended and consented hereby, the terms and conditions of the
Collateral Trust Agreement shall continue in full force and effect, and as
amended hereby, the Collateral Trust Agreement is ratified and confirmed in all
respects. On


<PAGE>


and after the Effective Date, the Collateral Trust Agreement shall be deemed to
mean the Collateral Trust Agreement as amended hereby.

6. Counterparts. This Amendment may be executed in several counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.

Schedule II:  Form of Joinder Agreement

Houston/1474925

<PAGE>

         IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this Amendment to be signed in their
respective names.


                                   The Williams Companies, Inc.,
                                   as Debtor

                                   By:    /s/ James G. Ivey
                                      ------------------------------------------
                                   Name:  James G. Ivey
                                   Title: Treasurer


                                   AGENT:

                                   CITICORP USA, INC., as Agent

                                   By     /s/ Todd J. Mogil
                                      ------------------------------------------
                                   Name:  Todd J. Mogil
                                   Title: Vice President



                                   BANKS AND ISSUING BANKS:

                                   CITIBANK N.A., as Issuing Bank


                                   By     /s/ Todd J. Mogil
                                      ------------------------------------------
                                   Name:  Todd J. Mogil
                                   Title: Attorney-in-Fact


                                   CITIBANK N.A., as Collateral Trustee


                                   By     /s/ Camille Tomao
                                      ------------------------------------------
                                   Name:  Camille Tomao
                                   Title: Vice President



                                   CITICORP USA, INC.



                                   By     /s/ Todd J. Mogil
                                      ------------------------------------------
                                   Name:  Todd J. Mogil
                                   Title: Vice President




                                   BANKS:

                                   CITICORP USA, INC.



                                   By     /s/ Todd J. Mogil
                                      ------------------------------------------
                                   Name:  Todd J. Mogil
                                   Title: Vice President




<PAGE>


                                   THE BANK OF NOVA SCOTIA, as Canadian
                                   Issuing Bank and Bank


                                   By:
                                      ------------------------------------------
                                   Name:
                                   Title:



                                   BANK OF AMERICA, N.A., as Issuing
                                   Bank and Bank

                                   By     /s/ Claire Liu
                                      ------------------------------------------
                                   Name:  Claire Liu
                                   Title: Managing Director


                                   JP MORGAN CHASE BANK


                                   By:    /s/ Robert W. Traband
                                      ------------------------------------------
                                   Name:  Robert W. Traband
                                   Title: Vice President



                                   TORONTO DOMINION (TEXAS), INC.


                                   By:     /s/ Jill Hall
                                      ------------------------------------------
                                   Name:   Jill Hall
                                   Title:  Vice President


                                   CREDIT LYONNAIS NEW YORK BRANCH


                                   By:     /s/ Olivier Audemard
                                      ------------------------------------------
                                   Name:   Olivier Audemard
                                   Title:  Senior Vice President



<PAGE>


                                   MERRILL LYNCH CAPITAL CORP.


                                   By:     /s/ Carol  J. E. Feeley
                                      ------------------------------------------
                                   Name:   Carol J. E. Feeley
                                   Title:  Vice President



                                   LEHMAN COMMERCIAL PAPER INC.


                                   By:     /s/ Francis Chang
                                      ------------------------------------------
                                   Name:   Francis Chang
                                   Title:  Authorized Signatory



                                   CO-SYNDICATION AGENTS:

                                   JPMORGAN CHASE BANK
                                   (formerly known as
                                   THE CHASE MANHATTAN BANK),
                                   As Co-Syndication Agent


                                   By      /s/ Robert W. Traband
                                         ---------------------------------------
                                   Name:   Robert W. Traband
                                   Title:  Vice President






                                   COMMERZBANK AG,
                                   as Co-Syndication Agent

                                   By      /s/ Harry Yergey
                                        ----------------------------------------
                                   Name:   Harry Yergey
                                   Title:  Senior Vice President and Manager

                                   By      /s/ Brian Campbell
                                        ----------------------------------------
                                   Name:   Brian Campbell
                                   Title:  Senior Vice President


                                   DOCUMENTATION AGENT:

                                   CREDIT LYONNAIS NEW YORK BRANCH
                                   as Documentation Agent

                                   By:     /s/ Olivier Audemard
                                          --------------------------------------
                                   Name:   Olivier Audemard
                                   Title:  Senior Vice President



<PAGE>



                                   THE BANK OF NOVA SCOTIA


                                   By:     /s/ N. Bell
                                        ----------------------------------------
                                   Name:   N. Bell
                                   Title:  Senior Manager


                                   BANK OF AMERICA, N.A.


                                   By      /s/ Claire M. Liu
                                          --------------------------------------
                                   Name:   Claire M. Liu
                                   Title:  Managing Director



                                   BANK ONE, N.A. (MAIN OFFICE - CHICAGO)


                                   By      /s/ Jeanie C. Gonzalez
                                        ----------------------------------------
                                   Name:   Jeanie C. Gonzalez
                                   Title:  Director



                                   JPMORGAN CHASE BANK
                                   (formerly known as
                                   THE CHASE MANHATTAN BANK),


                                   By      /s/ Robert W. Traband
                                         ---------------------------------------
                                   Name:   Robert W. Traband
                                   Title:  Vice President



                                   COMMERZBANK AG
                                   NEW YORK AND GRAND CAYMAN BRANCHES

                                   By      /s/ Brian Campbell                 l
                                        ----------------------------------------
                                   Name:   Brian Campbell
                                   Title:  Senior Vice President


                                   By      /s/ W. David Suttles
                                        ----------------------------------------
                                   Name:   W. David Suttles
                                   Title:  Vice President



<PAGE>




                                   CREDIT LYONNAIS NEW YORK BRANCH


                                   By:     /s/ Olivier Audemard
                                          --------------------------------------
                                   Name:   Olivier Audemard
                                   Title:  Senior Vice President


                                   NATIONAL WESTMINSTER PLC



                                   By:     /s/ Charles Greer
                                       -----------------------------------------
                                   Name:   Charles Greer
                                   Title:  Senior Vice President



                                   ABN AMRO BANK, N.V.


                                   By:     /s/ Frank R. Russo, Jr.
                                        ----------------------------------------
                                   Name:   Frank R. Russo, Jr.
                                   Title:  Group Vice President

                                   By:     /s/ Jeffrey G. White
                                        ----------------------------------------
                                   Name:   Jeffrey G. White
                                   Title:  Vice President



                                   BANK OF MONTREAL


                                   By:     /s/ Mary Lee Latta
                                        ----------------------------------------
                                   Name:   Mary Lee Latta
                                   Title:  Director




                                   THE BANK OF NEW YORK


                                   By:     /s/ Raymond J. Palmer
                                        ----------------------------------------
                                   Name:   Raymond J. Palmer
                                   Title:  Vice President



<PAGE>




                                   BARCLAYS BANK PLC


                                   By:     /s/ Nicholas A. Bell
                                         ---------------------------------------
                                   Name:   Nicholas A. Bell
                                   Title:  Director



                                   CIBC INC.


                                   By:     /s/ George Knight
                                        ----------------------------------------
                                   Name:   George Knight
                                   Title:  Managing Director



                                   CREDIT SUISSE FIRST BOSTON


                                   By:     /s/ James P. Moran
                                         ---------------------------------------
                                   Name:   James P. Moran
                                   Title:  Director

                                   By:     /s/ Ian W. Nalitt
                                        ----------------------------------------
                                   Name:   Ian W. Nalitt
                                   Title:  Associate



                                   ROYAL BANK OF CANADA


                                   By:     /s/ Peter Barnes
                                     -------------------------------------------
                                   Name:   Peter Barnes
                                   Title:  Senior Manager



                                   THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                   HOUSTON AGENCY


                                   By      /s/ Kelton Glassock
                                       -----------------------------------------
                                   Name:   Kelton Glassock
                                   Title:  Vice President and Manager


                                   By      /s/ Jay Fort
                                       -----------------------------------------
                                   Name:   Jay Fort
                                   Title:  Vice President


<PAGE>


                                   FLEET NATIONAL BANK
                                   f/k/a Bank Boston, N.A.


                                   By      /s/ Matthew W. Speh
                                       -----------------------------------------
                                   Name:   Matthew W. Speh
                                   Title:  Authorized Officer


                                   SOCIETE GENERALE, SOUTHWEST AGENCY


                                   By      /s/ J. Douglas McMurrey, Jr.
                                       -----------------------------------------
                                   Name:   J. Douglas McMurrey, Jr.
                                   Title:  Managing Director


                                   TORONTO DOMINION (TEXAS), INC.


                                   By:     /s/ Jill Hall
                                           -------------------------------------
                                   Name:   Jill Hall
                                   Title:  Vice President


                                   UBS AG, STAMFORD BRANCH


                                   By:     /s/ Kelly Smith
                                       -----------------------------------------
                                   Name:   Kelly Smith
                                   Title:  Director Recovery Management


                                   By:     /s/ Robert Reuter
                                       -----------------------------------------
                                   Name:   Kelly Smith
                                   Title:  Executive Director


                                   WELLS FARGO BANK TEXAS, N.A.


                                   By      /s/ J. Alan Alexander
                                        ----------------------------------------
                                   Name:   J. Alan Alexander
                                   Title:  Vice President


<PAGE>


                      WESTLB AG, NEW YORK BRANCH


                      By       /s/ Salvatore Battinelli and Duncan M. Robertson
                               -------------------------------------------------
                      Name:    Salvatore Battinelli and Duncan M. Robertson
                      Title:   Managing Director
                               Director Credit Department

                      CREDIT AGRICOLE INDOSUEZ


                      By:      /s/ Larry Materi
                        --------------------------------------------------------
                      Name:    Larry Materi
                      Title:   Vice President

                      By:      /s/ Paul A. Dytrych
                        --------------------------------------------------------
                      Name:    Paul A. Dytrych
                      Title:   Vice President


                      SUNTRUST BANK


                      By:      /s/ Steven J. Newby
                         -------------------------------------------------------
                      Name:    Steven J. Newby
                      tle:     Director


                      ARAB BANKING CORPORATION (B.S.C.)


                      By:      /s/ Robert J. Ivosevich
                        --------------------------------------------------------
                      Name:    Robert J. Ivosevich
                      Title:   Deputy General Manager

                      By:      /s/ Barbara C. Sanderson
                        --------------------------------------------------------
                      Name:    Barbara C. Sanderson
                      Title:   VP Head of Credit

                      BANK OF CHINA, NEW YORK BRANCH


                      By:
                      Name:
                      Title:


<PAGE>


                                   BANK OF OKLAHOMA, N.A.


                                   By:
                                   Name:
                                   Title:

                                   BNP PARIBAS, HOUSTON AGENCY


                                   By:      /s/ Larry Robinson
                                     -------------------------------------------
                                   Name:    Larry Robinson
                                   Title:   Vice President

                                   By:      /s/ Mark A. Cox
                                     -------------------------------------------
                                   Name:    Mark A. Cox
                                   Title:   Director


                                   DZ BANK AG DEUTSCHE
                                   ZENTRALGENOSSENSCHAFTSBANK, NEW YORK BRANCH


                                   By:      /s/ Mark Connelly
                                     -------------------------------------------
                                   Name:    Mark Connelly
                                   Title:   Senior V.P.

                                   By:      /s/ Richard W. Wilbert
                                     -------------------------------------------
                                   Name:    Richard W. Wilbert
                                   Title:   Vice President


                                   KBC BANK N.V.


                                   By:      /s/ Michael V. Curran
                                      ------------------------------------------
                                   Name:    Michael V. Curran
                                   Title:   First Vice President

                                   By:      /s/ Diane M. Grimmig
                                      ------------------------------------------
                                   Name:    Diane M. Grimmig
                                   Title:   First Vice President

                                   WACHOVIA BANK, N.A.


                                   By:      /s/ David E. Humphreys
                                      ------------------------------------------
                                   Name:    David E. Humphreys
                                   Title:   Vice President


<PAGE>


                                   MUZUHO CORPORATE BANK, LTD


                                   By:
                                   Name:
                                   Title:


                                   SUMITOMO MITSUI BANKING CORPORATION


                                   By       /s/ Leo E. Pagarigan
                                       -----------------------------------------
                                   Name:    Leo E. Pagarigan
                                   Title:   Senior Vice President



                                   COMMERCE BANK, N.A.


                                   By:      /s/ Dennis R. Block
                                       -----------------------------------------
                                   Name:    Dennis R. Block
                                   Title:   Senior Vice President



                                   ROYAL BANK OF SCOTLAND


                                   By:
                                   Name:
                                   Title:

                                   RZB FINANCE, LLC


                                   By:
                                            ------------------------------------
                                   Name:
                                   Title:


<PAGE>


                                   WORTHINGTON GENERATION, L.L.C.



                                   By:      /s/ William E. Hobbs
                                           -------------------------------------
                                   Name:    William E. Hobbs
                                   Title:   President



                                   WILLIAMS REFINING & MARKETING, L.L.C.



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer



                                   WILLIAMS PETROLEUM SERVICES, LLC



                                   By:      /s/ Ralph A. Hill
                                           -------------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Senior Vice President


                                   WILLIAMS PETROLEUM PIPELINE SYSTEMS, INC.



                                   By:      /s/ Ralph A. Hill
                                            ------------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Senior Vice President


                                   WILLIAMS MID-SOUTH PIPELINES, LLC



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer



<PAGE>

                                   WILLIAMS GENERATION COMPANY-HAZLETON



                                   By:      /s/ Ralph A. Hill
                                            ------------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Vice President


                                   WILLIAMS OLEFINS, L.L.C.



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer



                                   WILLIAMS OLEFINS FEEDSTOCK PIPELINES, L.L.C.



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer


                                   WILLIAMS NATURAL GAS LIQUIDS, INC.



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President



                                   WILLIAMS MIDSTREAM NATURAL GAS LIQUIDS, INC.



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President


<PAGE>






                                   WILLIAMS MERCHANT SERVICES COMPANY, INC.



                                   By:      /s/ William E. Hobbs
                                            ------------------------------------
                                   Name:    William E. Hobbs
                                   Title:   President



                                   WILLIAMS MEMPHIS TERMINAL, INC.



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer



                                   WILLIAMS GULF COAST GATHERING COMPANY, LLC



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer



                                   WILLIAMS GP, LLC



                                   By:     /s/ Don R. Wellendorf
                                           -------------------------------------
                                   Name:   Don R. Wellendorf
                                   Title:  President and Chief Executive Officer


                                   WILLIAMS GENERATING MEMPHIS, LLC



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer


<PAGE>







                                   WILLIAMS GAS PROCESSING - WAMSUTTER COMPANY.



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President



                                   WILLIAMS GAS PROCESSING COMPANY



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President


                                   WILLIAMS GAS PROCESSING - MID-CONTINENT
                                   REGION COMPANY



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President



                                   WILLIAMS FIELD SERVICES GROUP, INC.



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President

                                   WILLIAMS FIELD SERVICES COMPANY



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President





<PAGE>

                                   WILLIAMS FIELD SERVICES - MATAGORDA OFFSHORE
                                   COMPANY, LLC



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer



                                   WILLIAMS EXPRESS, INC. (DE)



                                   By:      /s/ Ralph A. Hill
                                            ------------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Chief Executive Officer


                                   WILLIAMS EXPRESS INC. (AK)



                                   By:      /s/ Ralph A. Hill
                                            ------------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Chief Executive Officer


                                   WILLIAMS ETHANOL SERVICES, INC.



                                   By:      /s/ Paul W. Nelson
                                            ------------------------------------
                                   Name:    Paul W. Nelson
                                   Title:   Treasurer


                                   WILLIAMS ENERGY SERVICES, LLC



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President



<PAGE>







                                   WILLIAMS ENERGY MARKETING & TRADING COMPANY



                                   By:      /s/ William E. Hobbs
                                            ------------------------------------
                                   Name:    William E. Hobbs
                                   Title:   President



                                   WILLIAMS BIO-ENERGY, L.L.C.



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer



                                   WILLIAMS ALASKA PIPELINE COMPANY, L.L.C.



                                   By:      /s/ Ralph A. Hill
                                            ------------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Senior Vice President



                                   WILLIAMS ALASKA PETROLEUM, INC.



                                   By:      /s/ Ralph A. Hill
                                            ------------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Chief Executive Officer



                                   WILLIAMS ALASKA AIR CARGO PROPERTIES, L.L.C.



                                   By:      /s/ Ralph A. Hill
                                            ------------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Chief Executive Officer






<PAGE>






                                   WFS-OFFSHORE GATHERING COMPANY



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President


                                   WFS-NGL PIPELINE COMPANY, INC.



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President


                                   WFS-LIQUIDS COMPANY



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President


                                   WFS GATHERING COMPANY, L.L.C.



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer


                                   WFS ENTERPRISES, INC.



                                   By:      /s/ Mary Jane Bittick
                                            ------------------------------------
                                   Name:    Mary Jane Bittick
                                   Title:   Treasurer



<PAGE>







                                   WFS - PIPELINE COMPANY



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President




                                   WFS - OCS GATHERING CO.



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President


                                   NORTH PADRE ISLAND SPINDOWN, INC.



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President


                                   MEMPHIS GENERATION, L.L.C.



                                   By:      /s/ William E. Hobbs
                                            ------------------------------------
                                   Name:    William E. Hobbs
                                   Title:   President


                                   MAPL INVESTMENTS, INC.



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President





<PAGE>







                                   MAPCO INC.



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President


                                   LONGHORN ENTERPRISES OF TEXAS, INC.



                                   By:      /s/ Ralph A. Hill
                                            ------------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Senior Vice President


                                   JUAREZ PIPELINE COMPANY



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President



                                   HI-BOL PIPELINE COMPANY



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President


                                   GOEBEL GATHERING COMPANY, L.L.C.



                                   By:      /s/ James G. Ivey
                                            ------------------------------------
                                   Name:    James G. Ivey
                                   Title:   Assistant Treasurer



<PAGE>

                                   GAS SUPPLY, L.L.C.



                                   By:      /s/ Ralph A. Hill
                                            ------------------------------------
                                   Name:    Ralph A. Hill
                                   Title:   Senior Vice President



                                   BLACK MARLIN PIPELINE COMPANY



                                   By:      /s/ Alan S. Armstrong
                                            ------------------------------------
                                   Name:    Alan S. Armstrong
                                   Title:   Senior Vice President



<PAGE>


                                   SCHEDULE II
                                       TO
                           COLLATERAL TRUST AGREEMENT

                            FORM OF JOINDER AGREEMENT

                                JOINDER AGREEMENT
                          (name of joining subsidiary)

                               [_________, _____]

         [Joining Subsidiary], a [_________ corporation] (the "Subsidiary"),
hereby agrees with (a) CITIBANK, N.A., as collateral trustee for the benefit of
the holders of the Secured Obligations, (b) THE WILLIAMS COMPANIES, INC., a
Delaware corporation (the "Company") and (c) the other parties to the Security
Documents (as defined below), as follows:

         All capitalized terms used herein and not defined herein shall have the
meanings ascribed to such terms in the Amended and Restated Credit Agreement,
dated as of October 31, 2002, by and among The Williams Companies, Inc., the
various lenders as are or may become parties thereto; the Issuing Banks, and
Citicorp USA, Inc., as Agent and Collateral Agent (as further amended, modified,
supplemented, renewed, extended or restated from time to time, the "Credit
Agreement").

         In accordance with the terms of the [Security Agreement, Pledge
Agreement and Collateral Trust Agreement] (collectively, the "Security
Documents"), the Subsidiary hereby (a) [joins the Security Agreement as a party
thereto and assumes all the obligations of a Grantor (as defined in the Security
Agreement) under the Security Agreement], (b) [joins the Pledge Agreement as a
party thereto and assumes all the obligations of a Pledgor (as defined in the
Pledge Agreement) under the Pledge Agreement], (c) [joins the Collateral Trust
Agreement as a party thereto and assumes all the obligations of a Debtor (as
defined in the Collateral Trust Agreement) under the Collateral Trust
Agreement], (d) agrees to be bound by the provisions of the Security Documents
as if the Subsidiary had been an original party to the Security Documents, and
(e) confirms that, after joining the Security Documents as set forth above, the
representations and warranties set forth in each of the Credit Documents with
respect to the Subsidiary are true and correct in all material respects as of
the date of this Joinder Agreement.

         For purposes of notices under the Security Documents, the notice
address for the Subsidiary may be given to the Subsidiary by providing notice
addressed to [Subsidiary's Name] c/o The Williams Companies, Inc., in any manner
that notice is permitted to be given to the Company pursuant to the terms of the
Credit Agreement.

         [Schedule I and Schedule II to the Security Agreement are hereby
supplemented with the information set forth on Exhibit I to this Joinder
Agreement.]


<PAGE>


         [Schedule I and Schedule II to the Pledge Agreement are hereby
supplemented with the information regarding the Subsidiary set forth on Exhibit
II to this Joinder Agreement.]

         THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

         THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

         IN WITNESS WHEREOF this Joinder Agreement is executed and delivered as
of the ___ day of ____________, _____.

                                     [Joining Subsidiary]



                                     By:
                                        ---------------------------------------
                                     Name:
                                          -------------------------------------
                                     Title:
                                           ------------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>10
<FILENAME>d00961exv10w8.txt
<DESCRIPTION>GUARANTY
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.8
                                                                  EXECUTION COPY

                FIRST AMENDMENT TO GUARANTY BY MIDSTREAM ENTITIES

         This First Amendment dated as of October 31, 2002 (this "Amendment") to
the Guaranty dated as of July 31, 2002 (as amended and modified from time to
time, the "Guaranty"), is executed by certain Midstream Subsidiaries (the
"Guarantors"), in favor of Citibank, N.A., as surety administrative agent
("Agent") for the benefit of the holders of the Secured Obligations. All
capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to such terms in the Guaranty.

                                   WITNESSETH:

         WHEREAS, the parties hereto have agreed to amend certain provisions of
the Guaranty;

         NOW THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Guaranty is hereby amended as follows:

1.       Amendments

         (a) Pursuant to the terms of those two certain Consent and Waivers each
         dated as of September 20, 2002, by and among the Company and the other
         signatories thereto, the Guaranty was amended to (i) remove Williams
         Field Services - Gulf Coast Company, L.P., as a Guarantor and (ii) add
         Williams Gulf Coast Gathering Company, LLC, as a Guarantor. Pursuant to
         this Amendment, the following additional parties are added as
         Guarantors: WFS - Pipeline Company; WFS Gathering Company, L.L.C.;
         Williams Field Services - Matagorda Offshore Company, LLC; Williams Gas
         Processing - Mid Continent Region Company; WFS-OCS Gathering Co.;
         HI-BOL Pipeline Company; Goebel Gathering Company, L.L.C.; Williams
         Petroleum Services, LLC; Longhorn Enterprises of Texas, Inc.; and
         Williams GP LLC.

         (b) The second sentence of Section 1 of the Guaranty is hereby amended
         by adding at the end of such sentence the following proviso: ";
         provided that Guaranteed Obligations shall not include any increases
         which occur after the date hereof in the principal amount of the
         obligations under the Credit Documents (other than increases in the
         principal amount of such obligations that are provided for as of the
         date of the execution of this Agreement but not yet funded) and/or the
         commitments to advance funds or letters of credit thereunder".

         (c) Section 8.01 of the Guaranty is hereby amended and restated in its
         entirety and replaced with the following:

                  "8.01. Amendments, Etc. Any amendment or waiver to this
                  Guaranty shall be effective only if approved by Financial
                  Institutions holding at least 51% of the principal amount of
                  the Guaranteed Obligations at the time thereof and only in the
                  specific instance and for the specific purpose for which
                  given. Provided,


<PAGE>


                  however, any amendment or waiver releasing any Guarantor from
                  any liability hereunder shall require the unanimous consent of
                  all Financial Institutions and be effective only in the
                  specific instance and for the specific purpose for which
                  given. Notwithstanding the foregoing, any release of a
                  Guarantor as permitted in Section 5.2(e) of the L/C Credit
                  Agreement and Section 5.02(l) of the Multiyear Williams Credit
                  Agreement (without giving effect to any amendment or waiver of
                  such Sections except such amendments or waivers that are
                  unanimously approved under the terms of Section 9.1 of the L/C
                  Credit Agreement and Section 8.01 of the Multiyear Williams
                  Credit Agreement) shall not require any consent beyond
                  compliance with the appropriate provisions set forth in such
                  credit agreements. No Financial Institution may be removed as
                  a beneficiary of this Guaranty without such Financial
                  Institution's prior written consent."

         (d) Section 8.06 of the Guaranty is hereby amended and restated in its
         entirety and replaced with the following:

                  "Section 8.06 Incorporated Definitions and Provisions. All
                  defined terms and other provisions that are incorporated into
                  this Guaranty by reference to other agreements shall
                  incorporate into this Guaranty the provisions of such other
                  agreements that exist as of the date hereof; however, such
                  provisions shall be automatically modified herein by any
                  amendment or modification that takes place after the date
                  hereof in such other referenced agreement(s)."

         (e) The following Section 8.08 is hereby added to the Guaranty:

                  "Section 8.08 Joinder. Pursuant to the terms of the Credit
                  Documents certain Subsidiaries (hereafter referred to as the
                  "Joining Subsidiaries") may desire to or be required to join
                  this Guaranty as Guarantors. In connection with any such
                  joinder the Joining Subsidiary shall execute and deliver (a) a
                  joinder agreement substantially in the form of the joinder
                  agreement attached hereto as Schedule I and (b) authorization
                  documentation, corporate documentation, perfection
                  documentation and opinion letters satisfactory to the Agent
                  reflecting the status of such Joining Subsidiary and the
                  enforceability of such agreements with respect to such Joining
                  Subsidiary and reasonable opinions with respect to such
                  Joining Subsidiary."

         (f) A new Schedule I to the Security Agreement is hereby added which is
         the document attached as Schedule I hereto.

2. Conditions to Effectiveness. This Amendment shall be deemed effective (the
"Effective Date") upon the satisfaction of the conditions precedent as set out
in Section 3.1 of that certain Amended and Restated Credit Agreement, dated as
of October 31, 2002, among Company and the Financial Institutions named therein,
without giving effect to the terms of Section 3.3.

3. Governing Law. This Amendment shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.


                                      -2-
<PAGE>


4. Reference to and Effect on the Guaranty. The amendments set forth herein are
limited precisely as written and shall not be deemed to be a consent or waiver
to, or modification of any other term or condition in the Guaranty or any of the
documents referred to therein. Except as expressly amended and consented hereby,
the terms and conditions of the Guaranty shall continue in full force and
effect, and as amended hereby, the Guaranty is ratified and confirmed in all
respects. On and after the Effective Date, the Guaranty shall be deemed to mean
the Guaranty as amended hereby.

5. Counterparts. This Amendment may be executed in several counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.

Schedule I:   Form of Joinder Agreement


                                      -3-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto, acting through their duly
authorized representatives, have caused this amendment to be signed in their
respective names.


                                    AGENT:

                                    CITIBANK, N.A., as Agent (as defined in the
                                    Guaranty)


                                    By /s/ Todd J. Mogil
                                       -----------------------------------------
                                    Name: Todd J. Mogil
                                    Title: Vice President


                                    AGENT AND COLLATERAL AGENT:

                                    CITICORP USA, INC., as Agent and Collateral
                                    Agent

                                    By /s/ Todd J. Mogil
                                       -----------------------------------------
                                    Name: Todd J. Mogil
                                    Title: Vice President


                                    BANKS AND ISSUING BANKS:

                                    CITIBANK N.A., as Issuing Bank


                                    By /s/ Todd J. Mogil
                                       -----------------------------------------
                                    Name: Todd J. Mogil
                                    Title: Vice President


                                    CITICORP USA, INC.


                                    By /s/ Todd J. Mogil
                                       -----------------------------------------
                                    Name: Todd J. Mogil
                                    Title: Vice President


                                    THE BANK OF NOVA SCOTIA, as Canadian Issuing
                                    Bank and Bank


                                    By:
                                        ----------------------------------------
                                    Name:
                                    Title:


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    BANK OF AMERICA, N.A., as Issuing Bank and
                                    Bank

                                    By /s/ Claire M. Liu
                                       -----------------------------------------
                                    Name: Claire M. Liu
                                    Title: Managing Director


                                    JP MORGAN CHASE BANK


                                    By: /s/ Robert W. Traband
                                       -----------------------------------------
                                    Name: Robert W. Traband
                                    Title: Vice President


                                    TORONTO DOMINION (TEXAS), INC.


                                    By: /s/ Jill Hall
                                        ----------------------------------------
                                    Name: Jill Hall
                                    Title: Vice President


                                    CREDIT LYONNAIS NEW YORK BRANCH


                                    By: /s/ Olivier Audemard
                                        ----------------------------------------
                                    Name: Olivier Audemard
                                    Title: Senior Vice President


                                    MERRILL LYNCH CAPITAL CORP.


                                    By: /s/ Carol J. E. Feeley
                                        ----------------------------------------
                                    Name: Carol J. E. Feeley
                                    Title: Vice President


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    LEHMAN COMMERCIAL PAPER INC.


                                    By: /s/ Francis Chang
                                        ----------------------------------------
                                    Name: Francis Chang
                                    Title: Authorized Signatory


                                    CO-SYNDICATION AGENTS:

                                    JPMORGAN CHASE BANK
                                    (formerly known as
                                    THE CHASE MANHATTAN BANK),
                                    As Co-Syndication Agent


                                    By /s/ Robert W. Traband
                                       -----------------------------------------
                                    Name: Robert W. Traband
                                    Title: Vice President


                                    COMMERZBANK AG,
                                    as Co-Syndication Agent

                                    By /s/ Harry Yergey
                                       -----------------------------------------
                                    Name: Harry Yergey
                                    Title: Senior Vice Pres. and Manager

                                    By /s/ Brian Campbell
                                       -----------------------------------------
                                    Name: Brian Campbell
                                    Title: Senior Vice President


                                    DOCUMENTATION AGENT:

                                    CREDIT LYONNAIS NEW YORK BRANCH
                                    as Documentation Agent

                                    By: /s/ Olivier Audemard
                                        ----------------------------------------
                                    Name: Olivier Audemard
                                    Title: Senior Vice President


                                    BANKS:

                                    CITICORP, USA, INC.


                                    By /s/ Todd J. Mogil
                                       -----------------------------------------
                                    Name: Todd J. Mogil
                                    Title: Vice President


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    THE BANK OF NOVA SCOTIA

                                    By: /s/ N. Bell
                                       -----------------------------------------
                                    Name: N. Bell
                                    Title: Senior Manager


                                    BANK OF AMERICA, N.A.


                                    By /s/ Claire M. Liu
                                       -----------------------------------------
                                    Name: Claire M. Liu
                                    Title: Managing Director


                                    BANK ONE, N.A. (MAIN OFFICE - CHICAGO)


                                    By /s/ Jeanie C. Gonzalez
                                       -----------------------------------------
                                    Name: Jeanie C. Gonzalez
                                    Title: Director


                                    JPMORGAN CHASE BANK
                                    (formerly known as
                                    THE CHASE MANHATTAN BANK),


                                    By /s/ Robert W. Traband
                                       -----------------------------------------
                                    Name: Robert W. Traband
                                    Title: Vice President


                                    COMMERZBANK AG
                                    NEW YORK AND GRAND CAYMAN BRANCHES

                                    By /s/ Brian Campbell
                                       -----------------------------------------
                                    Name: Brian Campbell
                                    Title: Senior Vice President

                                    By /s/ W. David Suttles
                                       -----------------------------------------
                                    Name: W. David Suttles
                                    Title: Vice President



SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    CREDIT LYONNAIS NEW YORK BRANCH

                                    By: /s/ Olivier Audemard
                                        ----------------------------------------
                                    Name: Olivier Audemard
                                    Title: Senior Vice President


                                    NATIONAL WESTMINSTER PLC


                                    By: /s/ Charles Greer
                                        ----------------------------------------
                                    Name: Charles Greer
                                    Title: Senior Vice President


                                    ABN AMRO BANK, N.V.


                                    By /s/ Frank R. Russo, Jr.
                                       -----------------------------------------
                                    Name: Frank R. Russo, Jr.
                                    Title: Group Vice President

                                    By /s/ Jeffrey G. White
                                       -----------------------------------------
                                    Name: Jeffrey G. White
                                    Title: Vice President


                                    BANK OF MONTREAL


                                    By /s/ Mary Lee Latta
                                       -----------------------------------------
                                    Name: Mary Lee Latta
                                    Title: Director


                                    THE BANK OF NEW YORK


                                    By /s/ Raymond J. Palmer
                                       -----------------------------------------
                                    Name: Raymond J. Palmer
                                    Title: Vice President



SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    BARCLAYS BANK PLC


                                    By /s/ Nicholas A. Bell
                                       -----------------------------------------
                                    Name: Nicholas A. Bell
                                    Title: Director, Loan Transaction Management


                                    CIBC INC.


                                    By /s/ George Knight
                                       -----------------------------------------
                                    Name: George Knight
                                    Title: Managing Director


                                    CREDIT SUISSE FIRST BOSTON


                                    By /s/ James P. Moran
                                       -----------------------------------------
                                    Name: James P. Moran
                                    Title: Director

                                    By /s/ Ian W. Nalitt
                                       -----------------------------------------
                                    Name: Ian W. Nalitt
                                    Title: Associate


                                    ROYAL BANK OF CANADA


                                    By /s/ Peter Barnes
                                       -----------------------------------------
                                    Name: Peter Barnes
                                    Title: Senior Manager


                                    THE BANK OF TOKYO-MITSUBISHI, LTD., HOUSTON
                                    AGENCY


                                    By /s/ Kelton Glassock
                                       -----------------------------------------
                                    Name: Kelton Glassock
                                    Title: Vice President and Manager


                                    By /s/ Jay Fort
                                       -----------------------------------------
                                    Name: Jay Fort
                                    Title: Vice President


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    FLEET NATIONAL BANK
                                    f/k/a Bank Boston, N.A.


                                    By /s/ Matthew W. Speh
                                       -----------------------------------------
                                    Name: Matthew W. Speh
                                    Title: Authorized Officer


                                    SOCIETE GENERALE, SOUTHWEST AGENCY


                                    By /s/ J. Douglas McMurrey, Jr.
                                       -----------------------------------------
                                    Name: J. Douglas McMurrey, Jr.
                                    Title: Managing Director


                                    TORONTO DOMINION (TEXAS), INC.


                                    By: /s/ Jill Hall
                                       -----------------------------------------
                                    Name: Jill Hall
                                    Title: Vice President


                                    UBS AG, STAMFORD BRANCH


                                    By /s/ Kelly Smith
                                       -----------------------------------------
                                    Name: Kelly Smith
                                    Title: Director - Recovery Management

                                    By David J. Kalal
                                       -----------------------------------------
                                    Name: David J. Kalal
                                    Title: Executive Director - Recovery
                                           Management


                                    WELLS FARGO BANK TEXAS, N.A.


                                    By /s/ J. Alan Alexander
                                       -----------------------------------------
                                    Name: J. Alan Alexander
                                    Title: Vice President


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    WESTLB AG, NEW YORK BRANCH


                                    By /s/ Duncan M. Robertson
                                       -----------------------------------------
                                    Name: Duncan M. Robertson
                                    Title: Director

                                    Name: Salvatore Battinelli
                                    Title: Managing Director - Credit Department


                                    CREDIT AGRICOLE INDOSUEZ


                                    By /s/ Larry Materi
                                       -----------------------------------------
                                    Name: Larry Materi
                                    Title: Vice President

                                    By /s/ Paul A. Dytrych
                                       -----------------------------------------
                                    Name: Paul A. Dytrych
                                    Title: Vice President, Senior Relationship
                                           Manager


                                    SUNTRUST BANK


                                    By /s/ Steven J. Newby
                                       -----------------------------------------
                                    Name: Steven J. Newby
                                    Title: Director


                                    ARAB BANKING CORPORATION (B.S.C.)


                                    By /s/ Robert J. Ivosevich
                                       -----------------------------------------
                                    Name: Robert J. Ivosevich
                                    Title: Deputy General Manager

                                    By /s/ Barbara C. Sanderson
                                       -----------------------------------------
                                    Name: Barbara C. Sanderson
                                    Title: Vice President Head of Credit


                                    BANK OF CHINA, NEW YORK BRANCH


                                    By
                                    Name:
                                    Title:


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    BANK OF OKLAHOMA, N.A.


                                    By
                                       -----------------------------------------
                                    Name:
                                    Title:


                                    BNP PARIBAS, HOUSTON AGENCY


                                    By /s/ Larry Robinson
                                       -----------------------------------------
                                    Name: Larry Robinson
                                    Title: Vice President

                                    By /s/ Mark A. Cox
                                       -----------------------------------------
                                    Name: Mark A. Cox
                                    Title: Director


                                    DZ BANK AG DEUTSCHE
                                    ZENTRALGENOSSENSCHAFTSBANK, NEW YORK BRANCH


                                    By /s/ Mark Connelly
                                       -----------------------------------------
                                    Name: Mark Connelly
                                    Title: Senior V.P.

                                    By /s/ Richard W. Wilbert
                                       -----------------------------------------
                                    Name: Richard W. Wilbert
                                    Title: Vice President


                                    KBC BANK N.V.


                                    By /s/ Michael V. Curran
                                       -----------------------------------------
                                    Name: Michael V. Curran
                                    Title: First Vice President

                                    By /s/ Diane M. Grimmig
                                       -----------------------------------------
                                    Name: Diane M. Grimmig
                                    Title: First Vice President


                                    WACHOVIA BANK, N.A.


                                    By: /s/ David E. Humphreys
                                       -----------------------------------------
                                    Name: David E. Humphreys
                                    Title: Vice President


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    MIZUHO CORPORATE BANK, LTD


                                    By /s/ Jacques Azagury
                                       -----------------------------------------
                                    Name: Jacques Azagury
                                    Title: Senior Vice President and Manager


                                    SUMITOMO MITSUI BANKING CORPORATION


                                    By /s/ Leo E. Pagarigan
                                       -----------------------------------------
                                    Name: Leo E. Pagarigan
                                    Title: Senior Vice President


                                    COMMERCE BANK, N.A.


                                    By /s/ Dennis R. Block
                                       -----------------------------------------
                                    Name: Dennis R. Block
                                    Title: Senior Vice President


                                    ROYAL BANK OF SCOTLAND


                                    Name:
                                    Title:


                                    RZB FINANCE, LLC


                                    By
                                       -----------------------------------------
                                    Name:
                                    Title:


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    WORTHINGTON GENERATION, L.L.C.



                                    By: /s/ William E. Hobbs
                                       -----------------------------------------
                                    Name: William E. Hobbs
                                    Title: President



                                    WILLIAMS REFINING & MARKETING, L.L.C.


                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer


                                    WILLIAMS PETROLEUM SERVICES, LLC


                                    By: /s/ Ralph A. Hill
                                       -----------------------------------------
                                    Name: Ralph A. Hill
                                    Title: Senior Vice President


                                    WILLIAMS PETROLEUM PIPELINE SYSTEMS, INC.


                                    By: /s/ Ralph A. Hill
                                       -----------------------------------------
                                    Name: Ralph A. Hill
                                    Title: Senior Vice President


                                    WILLIAMS MID-SOUTH PIPELINES, LLC



                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    WILLIAMS GENERATION COMPANY-HAZLETON


                                    By: /s/ Ralph A. Hill
                                       -----------------------------------------
                                    Name: Ralph A. Hill
                                    Title: Vice President


                                    WILLIAMS OLEFINS, L.L.C.


                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer


                                    WILLIAMS OLEFINS FEEDSTOCK PIPELINES, L.L.C.


                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer

                                    WILLIAMS NATURAL GAS LIQUIDS, INC.


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President

                                    WILLIAMS MIDSTREAM NATURAL GAS LIQUIDS, INC.


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    WILLIAMS MERCHANT SERVICES COMPANY, INC.


                                    By: /s/ William E. Hobbs
                                       -----------------------------------------
                                    Name: William E. Hobbs
                                    Title: President


                                    WILLIAMS MEMPHIS TERMINAL, INC.


                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer


                                    WILLIAMS GULF COAST GATHERING COMPANY, LLC


                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer


                                    WILLIAMS GP, LLC


                                    By: /s/ Don R. Wellendorf
                                       -----------------------------------------
                                    Name: Don R. Wellendorf
                                    Title: President and Chief Executive Officer


                                    WILLIAMS GENERATING MEMPHIS, LLC


                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    WILLIAMS GAS PROCESSING - WAMSUTTER COMPANY.


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    WILLIAMS GAS PROCESSING COMPANY


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    WILLIAMS GAS PROCESSING - MID-CONTINENT
                                    REGION COMPANY


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    WILLIAMS FIELD SERVICES GROUP, INC.


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    WILLIAMS FIELD SERVICES COMPANY


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    WILLIAMS FIELD SERVICES - MATAGORDA OFFSHORE
                                    COMPANY, LLC


                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer


                                    WILLIAMS EXPRESS, INC. (DE)


                                    By: /s/ Ralph A. Hill
                                       -----------------------------------------
                                    Name: Ralph A. Hill
                                    Title: Chief Executive Officer


                                    WILLIAMS EXPRESS INC. (AK)


                                    By: /s/ Ralph A. Hill
                                       -----------------------------------------
                                    Name: Ralph A. Hill
                                    Title: Chief Executive Officer


                                    WILLIAMS ETHANOL SERVICES, INC.


                                    By: /s/ Paul W. Nelson
                                       -----------------------------------------
                                    Name: Paul W. Nelson
                                    Title: Treasurer


                                    WILLIAMS ENERGY SERVICES, LLC


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    WILLIAMS ENERGY MARKETING & TRADING COMPANY


                                    By: /s/ William E. Hobbs
                                       -----------------------------------------
                                    Name: William E. Hobbs
                                    Title: President


                                    WILLIAMS BIO-ENERGY, L.L.C.


                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer


                                    WILLIAMS ALASKA PIPELINE COMPANY, L.L.C.


                                    By: /s/ Ralph A. Hill
                                       -----------------------------------------
                                    Name: Ralph A. Hill
                                    Title: Senior Vice President


                                    WILLIAMS ALASKA PETROLEUM, INC.


                                    By: /s/ Ralph A. Hill
                                       -----------------------------------------
                                    Name: Ralph A. Hill
                                    Title: Chief Executive Officer


                                    WILLIAMS ALASKA AIR CARGO PROPERTIES, L.L.C.


                                    By: /s/ Ralph A. Hill
                                       -----------------------------------------
                                    Name: Ralph A. Hill
                                    Title: Chief Executive Officer


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    WFS-OFFSHORE GATHERING COMPANY


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    WFS-NGL PIPELINE COMPANY, INC.


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    WFS-LIQUIDS COMPANY


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    WFS GATHERING COMPANY, L.L.C.


                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer


                                    WFS ENTERPRISES, INC.


                                    By: /s/ Mary Jane Bittick
                                       -----------------------------------------
                                    Name: Mary Jane Bittick
                                    Title: Treasurer


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    WFS - PIPELINE COMPANY


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    WFS - OCS GATHERING CO.


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    NORTH PADRE ISLAND SPINDOWN, INC.


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    MEMPHIS GENERATION, L.L.C.


                                    By: /s/ William E. Hobbs
                                       -----------------------------------------
                                    Name: William E. Hobbs
                                    Title: President


                                    MAPL INVESTMENTS, INC.


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    MAPCO INC.


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    LONGHORN ENTERPRISES OF TEXAS, INC.


                                    By: /s/ Ralph A. Hill
                                       -----------------------------------------
                                    Name: Ralph A. Hill
                                    Title: Senior Vice President


                                    JUAREZ PIPELINE COMPANY


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    HI-BOL PIPELINE COMPANY


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President


                                    GOEBEL GATHERING COMPANY, L.L.C.


                                    By: /s/ James G. Ivey
                                       -----------------------------------------
                                    Name: James G. Ivey
                                    Title: Assistant Treasurer


SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY
<PAGE>


                                    GAS SUPPLY, L.L.C.


                                    By: /s/ Ralph A. Hill
                                       -----------------------------------------
                                    Name: Ralph A. Hill
                                    Title: Senior Vice President


                                    BLACK MARLIN PIPELINE COMPANY


                                    By: /s/ Alan S. Armstrong
                                       -----------------------------------------
                                    Name: Alan S. Armstrong
                                    Title: Senior Vice President



SIGNATURE PAGE TO
FIRST AMENDMENT TO MIDSTREAM GUARANTY


<PAGE>


                                   SCHEDULE I
                                       TO
                                    GUARANTY

                            FORM OF JOINDER AGREEMENT

                                JOINDER AGREEMENT
                          (name of joining subsidiary)

                               [_________, _____]

         This Joinder Agreement is entered into to join [Joining Subsidiary] as
an additional guarantor to the Guaranty dated as of July 31, 2002 (as amended,
supplemented or otherwise modified from time to time, the "Midstream Guaranty"),
which was executed by THE WILLIAMS COMPANIES, INC. (the "Company"), a Delaware
corporation, and certain Midstream Subsidiaries.

         [Joining Subsidiary], a [_________ corporation] (the "Subsidiary"),
hereby agrees with CITIBANK, N.A., as surety administrative agent for the
Financial Institution (as such term is defined in the Midstream Guaranty) as
follows:

         All capitalized terms used herein and not defined herein shall have the
meanings ascribed to such terms in the Amended and Restated Credit Agreement,
dated as of October 31, 2002, by and among The Williams Companies, Inc., the
various lenders as are or may become parties thereto; the Issuing Banks, and
Citicorp USA, Inc., as Agent and Collateral Agent (as further amended, modified,
supplemented, renewed, extended or restated from time to time, the "Credit
Agreement").

         In accordance with the terms of the Credit Documents and the Midstream
Guaranty (collectively, the "Security Documents"), the Subsidiary hereby (a)
joins the Midstream Guaranty as a party thereto and assumes all the obligations
of a Guarantor thereunder, (b) agrees to be bound by the provisions of the
Midstream Guaranty as if the Subsidiary had been an original party to the
Midstream Guaranty, and (c) confirms that, after joining the Midstream Guaranty
as set forth above, the representations and warranties set forth in each of the
Credit Documents with respect to the Subsidiary are true and correct in all
material respects as of the date of this Joinder Agreement.

         For purposes of notices under the Security Documents, the notice
address for the Subsidiary may be given to the Subsidiary by providing notice
addressed to [Subsidiary' Name] c/o The Williams Companies, Inc., in any manner
that notice is permitted to be given to the Company pursuant to the terms of the
Credit Agreement.

         THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

         THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.


                                      -4-
<PAGE>


         IN WITNESS WHEREOF this Joinder Agreement is executed and delivered as
of the ___ day of ____________, _____.

                                    [Joining Subsidiary]



                                    By:
                                       --------------------------------------
                                    Name:
                                         ------------------------------------
                                    Title:
                                          -----------------------------------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>11
<FILENAME>d00961exv10w9.txt
<DESCRIPTION>COLLATERAL TRUST AGREEMENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.9
                                                                  EXECUTION COPY

                              AMENDED AND RESTATED
                              SUBORDINATED GUARANTY


         This Amended and Restated Subordinated Guaranty, dated as of October
31, 2002 (amending and restating the Subordinated Guaranty dated as of July 31,
2002 (the "Existing Subordinated Guaranty") and as may be further amended,
modified, supplemented, renewed, extended or restated from time to time, this
"Guaranty"), is by Williams Production Holdings LLC, a Delaware limited
liability company ("Guarantor"), in favor of the Financial Institutions (as
defined below). Capitalized terms used in this Guaranty but not defined herein
shall have the meanings set forth for such terms in the Amended and Restated
Credit Agreement dated as of October 31, 2002, executed by The Williams
Companies, Inc., as borrower (the "Company"), Citicorp USA, Inc., as agent and
collateral agent, Bank of America N.A. as syndication agent, Citibank, N.A. and
Bank of America N.A. as issuing bank, Salomon Smith Barney Inc., as arranger,
and the banks named therein (as the same may be further modified, replaced,
refinanced, amended or supplemented from time to time, the "New Credit
Agreement").

                                  INTRODUCTION

   A. The Company and certain of its Subsidiaries (i) have entered into certain
financing transactions with and (ii) prior to the date hereof, have caused
certain other existing letters of credit to be issued by, certain lenders,
financial institutions and other investors (such lenders, financial institutions
and investors, and, to the extent any such financing transaction consists of or
includes a guaranty provided by the Company and/or its Subsidiaries, each of the
beneficiaries of such guaranty (as set forth therein) and each of the entities
more fully described on Schedule II attached hereto collectively, the "Financial
Institutions;" provided, however, except as expressly noted on Schedule II,
neither the Company nor any of its Subsidiaries shall be a deemed a "Financial
Institution;" and provided further, no such lender, financial institution or
investor shall be deemed a "Financial Institution" hereunder until such lender,
financial institution or investor, or an authorized representative of such
lender, financial institution or investor, (A) executes this Guaranty or (B)
expressly acknowledges in an instrument as of even date herewith and to which
the Senior Agent is named a third party beneficiary that any claims under this
Guaranty shall be subject to the subordination provisions contained in Section 7
hereof). Such financing transactions, including those entered into in connection
with the New Credit Agreement, and the existing letters of credit are documented
by certain credit, security, letter of credit and guaranty documents, all as
more fully set forth on Schedule I attached hereto (collectively, as the same
may be modified, replaced, refinanced, amended or supplemented from time to
time, "Credit Documents"). "Borrowers" as used herein shall mean the borrowers
or guarantors under any one or more of the Credit Documents.

   B. It is a condition to certain transactions under the Credit Documents that
the Guarantor shall have executed and delivered this Guaranty.

   C. From time to time the Company has made capital contributions and advances
to the


                                      -1-
<PAGE>


Guarantor. The Guarantor is a wholly owned Subsidiary of the Company and will
derive substantial direct or indirect benefit from the transactions contemplated
by the Credit Documents.

   NOW, THEREFORE, the parties hereto have agreed to amend and restate the
Existing Subordinated Guaranty, and the Existing Subordinated Guaranty is hereby
amended and restated in its entirety as follows:

   In order to induce the Financial Institutions to extend certain financing
transactions and letters of credit described in the Credit Documents, the
Guarantor hereby agrees for the ratable benefit of the Financial Institutions as
follows:

Section 1. Guaranty. Guarantor hereby unconditionally and irrevocably guarantees
the punctual payment when due, whether at stated maturity, by acceleration or
otherwise, of the obligations and indebtedness of the Company under the Credit
Documents (such obligations being referred to herein as the "Guaranteed
Obligations"); provided that Guaranteed Obligations shall not include any
increases which occur after the date hereof in the principal amount of the
obligations under the Credit Documents (other than increases in the principal
amount of such obligations that are provided for as of the date of the execution
of this Agreement but not yet funded) and/or the commitments to advance funds or
letters of credit thereunder. Without limiting the generality of the foregoing,
Guarantor's liability shall extend to all amounts which constitute part of the
Guaranteed Obligations even if such Guaranteed Obligations are declared
unenforceable or not allowable in a bankruptcy, reorganization, or similar
proceeding involving a Borrower, or any guarantor of any portion of the
foregoing Guaranteed Obligations (collectively such guarantors together with the
Guarantor and the Borrowers are referred to herein as the "Obligors"). This
Guaranty is a guarantee of payment, not of collection, and Guarantor is
primarily liable for the payment of the Guaranteed Obligations.

Section 2. Limit of Liability. The liabilities and obligations of the Guarantor
hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render such Guarantor's obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law.

Section 3. Guaranty Absolute. Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the Credit Documents,
regardless of any law, regulation, or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any Financial
Institution with respect thereto. The obligations of Guarantor under this
Guaranty are independent of the Guaranteed Obligations in each and every
particular, and a separate action or actions may be brought and prosecuted
against any other Obligor, or any other Person regardless of whether any other
Obligor or any other Person is joined in any such action or actions. The
liability of Guarantor under this Guaranty shall be absolute and unconditional
irrespective of:

         (a) The lack of validity or unenforceability of the Guaranteed
Obligations or any Credit Document (other than this Guaranty against the
Guarantor) for any reason whatsoever,


                                      -2-
<PAGE>


including that the act of creating the Guaranteed Obligations is ultra vires,
that the officers or representatives executing the documents creating the
Guaranteed Obligations exceeded their authority, that the Guaranteed Obligations
violate usury or other laws, or that any Obligor has defenses to the payment of
the Guaranteed Obligations, including breach of warranty, statute of frauds,
bankruptcy, statute of limitations, lender liability, or accord and
satisfaction;

         (b) Any change in the time, manner, or place of payment of, or in any
term of, any of the Guaranteed Obligations, any increase, reduction, extension,
or rearrangement of the Guaranteed Obligations, any amendment, supplement, or
other modification of the Credit Documents, or any waiver or consent granted
under the Credit Documents, including waivers of the payment and performance of
the Guaranteed Obligations;

         (c) Any release, exchange, subordination, waste, or other impairment
(including negligent impairment) of any collateral securing payment of the
Guaranteed Obligations; the failure of any Financial Institution or any other
person to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale, or other handling of the collateral; the fact that any
security interest, lien, or assignment related to any collateral for the
Guaranteed Obligations shall not be properly perfected, or shall prove to be
unenforceable or subordinate to any other security interest, lien, or
assignment;

         (d) Any full or partial release of any Obligor (other than the full or
partial release of the Guarantor);

         (e) The failure to apply or the manner of applying collateral or
payments of the proceeds of collateral against the Guaranteed Obligations;

         (f) Any change in the organization or structure of any Obligor; any
change in the shareholders, directors, or officers of any Obligor; or the
insolvency, bankruptcy, liquidation, or dissolution of any Obligor or any
defense that may arise in connection with or as a result of any such insolvency,
bankruptcy, liquidator or dissolution;

         (g) The failure to give notice of any extension of credit made by any
Financial Institution to any Obligor, notice of acceptance of this Guaranty,
notice of any amendment, supplement, or other modification of any Credit
Document, notice of the execution of any document or agreement creating new
Guaranteed Obligations, notice of any default or event of default, however
denominated, under the Credit Documents, notice of intent to demand, notice of
demand, notice of presentment for payment, notice of nonpayment, notice of
intent to protest, notice of protest, notice of grace, notice of dishonor,
notice of intent to accelerate, notice of acceleration, notice of bringing of
suit, notice of any Financial Institution's transfer of the Guaranteed
Obligations, notice of the financial condition of or other circumstances
regarding any Obligor, or any other notice of any kind relating to the
Guaranteed Obligations;

         (h) Any payment or grant of collateral by any Obligor to any Financial
Institution being held to constitute a preference under bankruptcy laws, or for
any reason any Financial Institution is required to refund such payment or
release such collateral;


                                      -3-
<PAGE>


         (i) Any other action taken or omitted which affects the Guaranteed
Obligations, whether or not such action or omission prejudices the Guarantor or
increases the likelihood that the Guarantor will be required to pay the
Guaranteed Obligations pursuant to the terms hereof;

         (j) The fact that all or any of the Guaranteed Obligations cease to
exist by operation of law, including, without limitation, by way of discharge,
limitation or tolling thereof under applicable bankruptcy laws; and

         (k) Any other circumstances which might otherwise constitute a defense
available to, or a discharge of any Obligor (other than the discharge of the
Guarantor).

Section 4. Financial Institutions' Rights and Certain Waivers.

         4.01 Notice and Other Remedies. Guarantor hereby waives promptness,
diligence, notice of acceptance, notice of acceleration, notice of intent to
accelerate, and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that any Financial Institution
protect, secure, perfect or insure any security interest or other Lien or any
property subject thereto or exhaust any right to take any action against any
Obligor or any other Person or any collateral.

         4.02. Waiver of Subrogation and Contribution. (a) Until such time as
the Guaranteed Obligations are irrevocably paid in full, Guarantor hereby
irrevocably waives any claim or other rights which it may acquire against any
Obligor that arise from the Guarantor's Guaranteed Obligations under this
Guaranty or any other Credit Document, including, without limitation, any right
of subrogation (including, without limitation, any statutory rights of
subrogation under Section 509 of the Bankruptcy Code, 11 U.S.C. Section 509),
reimbursement, exoneration, contribution, indemnification, or any right to
participate in any claim or remedy of any Financial Institution against any
Obligor, or any collateral which any Financial Institution now has or acquires.
If any amount shall be paid to Guarantor in violation of the preceding sentence
and the Guaranteed Obligations shall not have been paid in full, such amount
shall be held in trust for the benefit of the Financial Institutions, and shall
promptly be paid to the Financial Institutions to be applied to the Guaranteed
Obligations, whether matured or unmatured. Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Credit Documents and that the waiver set forth in this
Section 4.02(a) is knowingly made in contemplation of such benefits.

         (b) Guarantor agrees that, to the extent that any Borrower makes
payments to any Financial Institution, or any Financial Institution receives any
proceeds of collateral, and such payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
or otherwise required to be repaid, then to the extent of such repayment the
Guaranteed Obligations shall be reinstated and continued in full force and
effect as of the date such initial payment or collection of proceeds occurred.
GUARANTOR SHALL INDEMNIFY EACH FINANCIAL INSTITUTION AND EACH AFFILIATE THEREOF
AND THEIR RESPECTIVE DIRECTORS, OFFICERS AND EMPLOYEES FROM, AND DISCHARGE,
RELEASE, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL ACTUAL LOSSES,
LIABILITIES, GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, DISBURSEMENTS, CLAIMS OR DAMAGES TO WHICH ANY OF THEM MAY BECOME SUBJECT,


                                      -4-
<PAGE>


INSOFAR AS SUCH LOSSES, LIABILITIES, GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, DISBURSEMENTS, CLAIMS OR DAMAGES ARISE OUT OF OR RESULT
FROM (I) ANY ACTUAL OR PROPOSED USE BY ANY BORROWER, OR ANY AFFILIATE OF ANY
BORROWER OF THE PROCEEDS OF ANY ADVANCE, (II) ANY BREACH BY GUARANTOR OF ANY
PROVISION OF THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT, (III) ANY
INVESTIGATION, LITIGATION OR OTHER PROCEEDING (INCLUDING ANY THREATENED
INVESTIGATION OR PROCEEDING) RELATING TO THE FOREGOING, OR (IV) ANY
ENVIRONMENTAL CLAIM OR REQUIREMENT OF ENVIRONMENTAL LAWS CONCERNING OR RELATING
TO THE PRESENT OR PREVIOUSLY-OWNED OR OPERATED PROPERTIES, OR THE OPERATIONS OR
BUSINESS, OF ANY OBLIGOR, AND GUARANTOR SHALL REIMBURSE EACH FINANCIAL
INSTITUTION, AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE DIRECTORS, OFFICERS
AND EMPLOYEES, UPON DEMAND FOR ANY REASONABLE OUT-OF-POCKET EXPENSES (INCLUDING
LEGAL FEES) INCURRED IN CONNECTION WITH ANY SUCH INVESTIGATION, LITIGATION OR
OTHER PROCEEDING; AND EXPRESSLY INCLUDING ANY SUCH LOSSES, LIABILITIES,
GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
DISBURSEMENTS, CLAIMS, DAMAGES, OR EXPENSE INCURRED BY REASON OF THE PERSON
BEING INDEMNIFIED'S OWN NEGLIGENCE, BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES,
GUARANTEED OBLIGATIONS, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
DISBURSEMENTS, CLAIMS, DAMAGES OR EXPENSES INCURRED BY REASON OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, ANY PAYMENTS DUE WITH RESPECT
TO THIS SECTION 4.02(b) SHALL BE SUBJECT TO THE PRIOR PAYMENT IN FULL OF THE
SENIOR OBLIGATIONS.

         4.03. Modifications and Amendment to the Credit Documents. As provided
in Section 1 above, certain increases in the principal indebtedness outstanding
under the Credit Documents shall not constitute Guaranteed Obligations. Except
as to the foregoing, the parties to the Credit Documents shall have the right to
amend or modify such Credit Agreements without affecting the rights provided for
in this Guaranty.

         4.04 Limitation on Enforcement. By acceptance of the benefits provided
hereunder, each Financial Institution acknowledges and agrees that it will not
file, or join in or support the filing of, an involuntary proceeding or petition
in bankruptcy against Guarantor; provided such restriction shall not limit any
Financial Institution from making claims in or taking any other actions in
connection with any such proceeding which takes place.

Section 5. Representations and Warranties. Guarantor hereby represents and
warrants as follows:

         (a) Business Existence. Guarantor is duly organized, validly existing,
and in good standing under the laws of Delaware and is in good standing and
qualified to do business in each jurisdiction where its ownership or lease of
property or conduct of its business requires such qualification and where a
failure to be qualified could reasonably be expected to cause a material adverse
effect.

         (b) Power. The execution, delivery, and performance by Guarantor of
this Guaranty and the consummation of the transactions contemplated hereby (a)
are within Guarantor's limited liability company powers, (b) have been duly
authorized by all necessary limited liability company action, and (c) do not
contravene (i) Guarantor's certificate of formation or limited liability company
agreement or (ii) any law or any contractual restriction binding on or affecting
Guarantor or its property.


                                      -5-
<PAGE>


         (c) Authorization and Approvals. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Guarantor of
this Guaranty or the consummation of the transactions contemplated hereby.

         (d) Enforceable Obligations. This Guaranty has been duly executed and
delivered by Guarantor. This Guaranty is the legal, valid, and binding
obligation of Guarantor and is enforceable against Guarantor in accordance with
its terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium, or similar law affecting
creditors' rights generally.

         (e) Solvency. After giving effect to this Guaranty and the concurrent
amendments to various financing arrangements and agreements of the Company and
its Subsidiaries and the asset sales by the Company and/or its Subsidiaries that
were consummated by the Company on or about July 31, 2002, Guarantor,
individually and together with its Subsidiaries, is Solvent.

Section 6. Covenants.

         (a) In the event that a Financial Institution wishes to enforce the
guarantee contained in Section 1 hereof against Guarantor, then subject in all
cases to Section 7 below, it shall make written demand for payment from
Guarantor, provided that no such demand shall be required if Guarantor is in
bankruptcy, liquidation, or other insolvency proceedings, and provided that
failure by a Financial Institution to make such demand shall not affect
Guarantor's obligations under this Guaranty.

         (b) From and after the repayment in full of the Senior Obligations, the
following shall apply: All indebtedness of Guarantor to another Obligor or any
Borrower or any Subsidiary of a Borrower shall be subordinated to all
indebtedness of Guarantor to any Financial Institution under any of the Credit
Documents (the "Designated Indebtedness"), as follows:

                  (i) In the event of any insolvency or bankruptcy proceedings,
         or any receivership liquidation, reorganization, or other similar
         proceedings in connection therewith, relative to Guarantor, or to its
         property, or in the event of any proceedings for voluntary liquidation,
         dissolution, or other winding up of Guarantor, whether or not involving
         insolvency or bankruptcy, then the holders of the Designated
         Indebtedness shall be entitled to receive payment in full of all
         Designated Indebtedness before any Obligor or any Subsidiary of a
         Borrower shall receive any payment on account of principal or interest
         due such Person from Guarantor;

                  (ii) After the occurrence and during the continuance of any
         default or event of default, however denominated, under any Credit
         Document (an "Event of Default"), Guarantor shall not exercise or
         attempt to exercise any right of offset or counterclaim in respect of
         any of its obligations to any other Obligor or any Subsidiary of a
         Borrower if the effect thereof shall be to reduce the amount of any
         payment to which the holders of


                                      -6-
<PAGE>


         Designated Indebtedness would be entitled in the absence of such offset
         or counterclaim; and if and to the extent that, notwithstanding the
         foregoing, Guarantor is required by any mandatory provisions of law to
         exercise any such right of offset or counterclaim, each reduction of
         the amount owing on the account of the principal of or premium (if any)
         or interest owed to any Obligor or any Subsidiary of a Borrower by
         reason of such offset or counterclaim shall be deemed to be a payment
         by Guarantor in a like amount in respect of such amounts which clause
         (iv) below shall apply;

                  (iii) Following the occurrence and during the continuance of
         any Event of Default, (A) payment of the principal or interest upon any
         indebtedness owed to any Obligor or any Subsidiary of a Borrower shall
         not be made thereunder until payment in full of all Designated
         Indebtedness has been made and (B) the holders of the Designated
         Indebtedness shall be entitled to receive payment in full of all
         Designated Indebtedness prior to the entitlement of any Obligor or any
         Subsidiary of a Borrower to receive any payment of the principal or
         interest (except for payments which have been made prior to the
         occurrence of such event of default);

                  (iv) If, notwithstanding the provisions of the foregoing
         subparagraphs (i) through (iii), any payment or distribution on any
         indebtedness shall be received by Guarantor or any Obligor or any
         Subsidiary of a Borrower while an Event of Default exists and before
         the holders of the Designated Indebtedness shall have received payment
         in full on all Designated Indebtedness, such payment or distribution
         shall be (and shall be deemed to be) held in trust for the benefit of,
         and shall be paid over or delivered or transferred to, the holders of
         the Designated Indebtedness for application to the payment of all
         Designated Indebtedness held by such holder to the extent necessary to
         satisfy such Designated Indebtedness; and

                  (v) No present or future holder of Designated Indebtedness
         shall be prejudiced in its right to enforce subordination of any
         Obligor or any Subsidiary of a Borrower by any act or failure to act on
         the part of Guarantor whether or not such act or failure shall give
         rise to any right of rescission or other claim or cause of action on
         the part of Guarantor or any Borrower or any Subsidiary of a Borrower.
         The provisions of the foregoing paragraphs with respect to
         subordination are solely for the purpose of defining the relative
         rights of the holders of Designated Indebtedness on the one hand, and
         any Obligor or any Subsidiary of a Borrower on the other hand, and none
         of such provisions shall impair, as between Guarantor and any Obligor
         or any Subsidiary of a Borrower, the obligation of Guarantor, which is
         unconditional and absolute, to pay to any Obligor or any Subsidiary of
         a Borrower the principal and interest of any indebtedness in accordance
         with its terms, nor shall anything in such provisions prevent any other
         Obligor or any Subsidiary of a Borrower from exercising all remedies
         otherwise permitted by applicable law or hereunder upon default
         hereunder, subject to the rights of holders of Designated Indebtedness
         under such provisions.

         The terms of Section 6(b) shall not be applicable during the period
         that the Senior Obligations remain outstanding.


                                      -7-
<PAGE>


         (c) The Guarantor will not create, assume, incur or suffer to exist any
Lien on or in respect of any of its property, whether now owned or hereafter
acquired, or assign or otherwise convey any right to receive income except
pursuant to documents entered into in connection with the Senior Credit
Documents or as otherwise permitted therein.

         (d) The Guarantor will not create, incur, assume or suffer to exist any
Debt other than Debt that (i) is created pursuant to this Guaranty, (ii)
constitutes Senior Obligations or (iii) is permitted pursuant to the Senior
Credit Documents.

         (e) The Guarantor will not create, incur, assume or suffer to exist any
obligation or liability other than (i) Debt permitted under clause (d) above and
(ii) any obligation or liability that is permitted pursuant to the Senior Credit
Documents on the date hereof.

Section 7. Subordination.

         (a) By acceptance of this Guaranty, whether by execution on or about
the date hereof or acceptance in an instrument of even date herewith, each
Financial Institution hereby acknowledges that payments made by the Guarantor
under this Guaranty with respect to the Guaranteed Obligations shall be
subordinated to all of the Senior Obligations (as defined below), and that the
Guarantor shall not make payments to the Financial Institutions under this
Guaranty with respect to the Guaranteed Obligations in whole or in part until
the Senior Obligations have been paid in full. No Financial Institution shall
accept any payment from the Guarantor of or on account of any Guaranteed
Obligations at any time in contravention of the foregoing. Upon the occurrence
and during the continuance of any default or event of default, however
denominated, under any Credit Document or the Senior Credit Agreement (as
defined below) (an "Event of Default"), each Financial Institution shall pay to
the Senior Agent (as defined below) any payment made by Guarantor pursuant to
this Guaranty of all or any part of the Guaranteed Obligations and any amount so
paid to the Senior Agent shall be applied to payment of the Senior Obligations.
Each payment made by Guarantor pursuant to this Guaranty on the Guaranteed
Obligations received in violation of any of the provisions hereof shall be
deemed to have been received by the Financial Institutions as trustee for the
Senior Agent and shall be paid over to the Senior Agent immediately on account
of the Senior Obligations. The Financial Institutions agree not to ask, demand,
sue for, take or receive from Guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner (including, without
limitation, from or by way of collateral), any payment by the Guarantor under
this Guaranty unless and until the Senior Obligations are paid in full. Senior
Agent is hereby authorized to demand specific performance by the Financial
Institutions of its agreements set forth in this Section at any time the
Financial Institutions shall have failed to comply with any of the provisions of
this Section. The Financial Institutions hereby irrevocably waive any defense
based on the adequacy of remedies at law, which might be asserted as a bar to
such remedy of specific performance.

         (b) The Financial Institutions shall only be entitled to take any
remedial or enforcement actions against the Guarantor under this Guaranty upon
or after the earliest to occur of (i) the payment in full of all Senior
Obligations or (ii) the taking of any remedial or enforcement remedy by the
Senior Agent.


                                      -8-
<PAGE>


         (c) As used in this Guaranty, the following terms shall have the
following meanings:

         "Senior Agent" means the administrative agent under the Senior Credit
Agreement.

         "Senior Credit Agreement" means that certain Credit Agreement, dated as
of July 31, 2002, among The Williams Companies, Inc., a Delaware corporation,
Williams Production Holdings LLC, a Delaware limited liability company, Williams
Production RMT Company, a Delaware corporation, the Lenders party thereto from
time to time, Lehman Brothers Inc., as Arranger, and Lehman Commercial Paper
Inc., as Syndication Agent and as Administrative Agent, as amended, supplemented
or otherwise modified from time to time.

         "Senior Credit Documents" means the Senior Credit Agreement, the Senior
Guaranty, all other Loan Documents (as defined in the Senior Credit Agreement)
and all other documents evidencing or creating any Senior Obligations, and all
documents and instruments delivered in connection with or pursuant thereto or
under which rights or remedies with respect to any of the foregoing are
governed, as any such document or instrument may from time to time be amended,
renewed, restated, replaced, refinanced, supplemented or otherwise modified.

         "Senior Guaranty" means the guaranty of the Guarantor under that
certain Guarantee and Collateral Agreement, dated as of July 31, 2002, by
Williams Production RMT Company, the Guarantor and each of the other signatories
thereto in favor of the Senior Agent.

         "Senior Obligations" means all obligations of the Guarantor under the
Senior Credit Documents, and all other amounts, obligations, covenants and
duties owing by the Guarantor to any lender under the Senior Credit Documents.

Section 8. Miscellaneous.

         8.01. Amendments, Etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by any the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Financial
Institutions holding at least 51% of the principal amount of the Guaranteed
Obligations at the time thereof and shall be effective only in the specific
instance and for the specific purpose for which given. In addition to the
foregoing and so long as the Senior Obligations remain outstanding, no amendment
or waiver of (i) Section 7 of this Guaranty or (ii) any other provision of this
Guaranty that could have an adverse effect on the Guarantor's performance of the
Senior Credit Documents, the prepayment or repayment of the Senior Obligations
or the Senior Agent's rights hereunder shall be effective unless the same shall
be in writing and signed by the Senior Agent and shall be effective only in the
specific instance and for the specific purpose for which given. Provided,
however, that any amendment or waiver releasing the Guarantor from any liability
hereunder shall require the unanimous consent of all Financial Institutions and
be effective only in the specific instance and for the specific purpose for
which given. No Financial Institution may be removed as a beneficiary of this
Guaranty without such Financial Institution's prior written consent.


                                      -9-
<PAGE>


         8.02. Addresses for Notices. All notices and other communications to
Guarantor shall be delivered to the address set forth beneath its signature on
the signature page hereto, or to such other address as shall be designated by
the Guarantor by written notice to all of the Financial Institutions. All
notices and other communications provided for under this Guaranty shall be in
writing (including telecopy communication), shall be mailed, telecopied, or
delivered, and shall, when mailed or telecopied, be effective when received in
the mail or sent by telecopier.

         8.03. No Waiver; Remedies. No failure on the part of any Financial
Institution to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

         8.04. Right of Set-Off. From and after the repayment in full of the
Senior Obligations, the following shall apply: Upon the occurrence and during
the continuance of any default or event of default however described under a
Credit Document, each Financial Institution party to such Credit Document is
hereby authorized at any time, to the fullest extent permitted by law, to set
off and apply any deposits (general or special, time or demand, provisional or
final) and other indebtedness owing by such Financial Institution to the
accounts of the Guarantor against any and all of the obligations of the
Guarantor under this Guaranty, irrespective of whether or not such Financial
Institution shall have made any demand under this Guaranty and although such
obligations may be contingent and unmatured. Each Financial Institution agrees
promptly to notify the Guarantor after any such set-off and application made by
such Financial Institution provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of the
Financial Institutions under this Section 8.04 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which the
Financial Institutions may have.

         8.05. Continuing Guaranty; Assignments under Credit Documents. This
Guaranty is a continuing guaranty and shall (a) remain in full force and effect
until the indefeasible payment in full of the Guaranteed Obligations and all
other amounts payable under this Guaranty, (b) be binding upon Guarantor and its
respective successors and assigns, (c) inure to the benefit of, and be
enforceable by, each of the Financial Institutions and their respective
successors, transferees and assigns, and (d) not be terminated by Guarantor or
any other Person. Without limiting the generality of the foregoing clause (c),
any Financial Institution may assign or otherwise transfer all or any portion of
its rights and Guaranteed Obligations and the assignee shall thereupon become
vested with all the benefits in respect thereof granted to such Financial
Institution herein or otherwise. Upon the indefeasible payment in full and
termination of the Guaranteed Obligations, each guaranty granted hereby shall
terminate and all rights hereunder shall revert to the Guarantor to the extent
such rights have not been applied pursuant to the terms hereof. Upon any such
termination, each Financial Institution will, at Guarantor's expense, execute
and deliver to Guarantor such documents as Guarantor shall reasonably request
and take any other actions reasonably requested to evidence or effect such
termination. This Guaranty is not assignable by Guarantor without the written
consent of each Financial Institution.


                                      -10-
<PAGE>


         8.06 Incorporated Definitions. All defined terms that are incorporated
from other agreements into this Guaranty by reference shall have the meanings
assigned to such terms as of the date hereof but shall not be modified by any
subsequent amendment or modification that takes place after the date hereof
unless consented to by the parties hereto.

         8.07. Governing Law; Submission to Jurisdiction; Suits and Claims.

         (a) This Guaranty shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, except to the extent
provided in Section 8.07(b) hereof and to the extent that the federal laws of
the United States of America may otherwise apply.

         (b) Notwithstanding anything in Section 8.07(a) hereof to the contrary,
nothing in this Guaranty shall be deemed to constitute a waiver of any rights
which any of the Financial Institutions may have under the National Bank Act or
other federal law, including without limitation the right to charge interest at
the rate permitted by the laws of the State where the applicable Financial
Institution is located.

         (c) ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, ANY CREDIT DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE FINANCIAL
INSTITUTIONS OR GUARANTOR IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF NEW YORK AT THE ADDRESS SET FORTH BENEATH ITS SIGNATURE ON THE
SIGNATURE PAGE HERETO. GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT GUARANTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, GUARANTOR HEREBY
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE CREDIT DOCUMENTS.

         (d) GUARANTOR AND THE FINANCIAL INSTITUTIONS HEREBY IRREVOCABLY WAIVE
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

         (e) The provisions set forth in this Guaranty shall only be enforceable
by the Financial Institutions and their respective successors and assigns, and
no other Person shall have the right to bring any claim or cause of action based
on this Guaranty.

         8.08. Effectiveness. This Guaranty shall be deemed effective as of July
31, 2002 (the "Effective Date") upon the satisfaction of the conditions
precedent as set out in Section 3.1 of the New Credit Agreement, without giving
effect to the terms of Section 3.3.


                                      -11-
<PAGE>
          Guarantor has caused this Guaranty to be duly executed as of the date
first above written.


                                         WILLIAMS PRODUCTION HOLDINGS LLC,
                                         as Guarantor


                                         By:       /s/ Ralph A. Hill
                                         Name:     Ralph A. Hill
                                         Title:    Senior Vice President


<PAGE>



          Each of the entities reflected on the following ten (10) pages is
executing this Guaranty as a Financial Institution party to the Amended and
Restated Credit Agreement dated as of October 31, 2002 among the Company and the
Financial Institutions named therein:


<PAGE>



                                         AGENT AND COLLATERAL AGENT:

                                         CITICORP USA, INC., as Agent and
                                         Collateral Agent



                                         By:    /s/  Todd J. Mogil
                                         Name:  Todd J. Mogil
                                         Title: Vice President


<PAGE>



                                         BANKS AND ISSUING BANKS:

                                         CITIBANK N.A., as Issuing Bank



                                         By:    /s/ Todd J. Mogil
                                         Name:  Todd J. Mogil
                                         Title: Vice President


<PAGE>



                                         CITICORP USA, INC.



                                         By:    /s/ Todd J. Mogil
                                         Name:  Todd J. Mogil
                                         Title: Vice President


<PAGE>




                                         THE BANK OF NOVA SCOTIA. as Canadian
                                         Issuing Bank and Bank



                                         By:
                                         Name:
                                         Title:



<PAGE>




                                         BANK OF AMERICA, N.A., as Issuing Bank
                                         and Bank



                                         By:    /s/ Claire M. Liu
                                         Name:  Claire M. Liu
                                         Title: Managing Director


<PAGE>




                                         JP MORGAN CHASE BANK



                                         By:    /s/ Robert W. Traband
                                         Name:  Robert W. Traband
                                         Title: Vice President


<PAGE>




                                         TORONTO DOMINION (TEXAS), INC.



                                         By:    /s/ Jill Hall
                                         Name:  Jill Hall
                                         Title: Vice President


<PAGE>




                                         CREDIT LYONNAIS NEW YORK BRANCH



                                         By:    /s/ Olivier Audermard
                                         Name:  Olivier Audermard
                                         Title: Senior V.P.


<PAGE>



                                         MERRILL LYNCH CAPITAL CORP.



                                         By:    /s/ Carol J.E. Feeley
                                         Name:  Carol J.E. Feeley
                                         Title: Vice President


<PAGE>



                                         LEHMAN COMMERCIAL PAPER, INC.



                                         By:    /s/ Francis Chang
                                         Name:  Francis Chang
                                         Title: Authorized Signatory
<PAGE>


                                   SCHEDULE I
                                CREDIT DOCUMENTS


NEW CREDIT FACILITY:

Amended and Restated Credit Agreement dated as of October 31, 2002 executed by
The Williams Companies, Inc., as borrower, Citicorp USA, Inc., as agent and
collateral agent, Bank of America N.A. as syndication agent, Citibank, N.A. and
Bank of America N.A. as issuing bank, Salomon Smith Barney Inc., as arranger,
and the banks named therein.

All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with the foregoing.

PROGENY AGREEMENTS

Parent Support Agreement dated as of December 23, 1998, made by The Williams
Companies, Inc. in favor of Castle Associates L. P. and Colchester LLC and the
other Indemnified Persons listed therein, as amended (the "Castle Parent Support
Agreement"). Notwithstanding anything in the Guaranty to the contrary, for
purposes of Section 8.01 of the Guaranty, the principal amount of this Progeny
Facility shall equal the outstanding Unrecovered Capital of the Limited Partner
plus all accrued and undistributed First Priority Return to be distributed to
the Limited Partner in accordance with Section 4.01(a) of the Castle Partnership
Agreement plus all other amounts then due and payable to the Limited Partner. As
used herein, "Castle Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of Castle Associates L.P., dated as of December
23, 1998, by and among Garrison, L.L.C., a Delaware limited liability company,
Laughton, L.L.C., a Delaware limited liability company, and Colchester LLC, a
Delaware limited liability company, as amended, supplemented, amended and
restated or otherwise modified from time to time. Capitalized terms used in this
paragraph but not otherwise defined herein or in the Guaranty shall have the
meanings ascribed in the Castle Partnership Agreement.

First Amended and Restated Term Loan Agreement dated as of October 31, 2002,
among The Williams Companies, Inc., as Borrower, and Credit Lyonnais New York
Branch, as Administrative Agent, and the Lenders named therein, as amended.

Second Amended and Restated Participation Agreement dated as of January 28, 2002
among Williams Oil Gathering, L.L.C., a Delaware limited liability company, as
Lessee, Williams Field Services Company, a Delaware corporation, as Construction
Agent, The Williams Companies, Inc., a Delaware corporation, as Guarantor, Wells
Fargo Bank Northwest, National Association (formerly known as First Security
Bank, National Association), as Certificate Trustee, Wells Fargo Bank Nevada,
N.A. (successor by merger to First Security Trust Company of Nevada), as
Collateral Agent, the financial institutions named therein as the Facility
Lenders and Purchasers, Bank of America, National Association, as Administrative
Agent and Administrator for the CP Lender, Banc of America Facilities Leasing,
L.L.C., as Arranger, Bank of Nova Scotia, as Syndication Agent, and Credit
Agricole Indosuez, as Documentation Agent, as amended by the


<PAGE>


Consent and First Amendment dated as of July 31, 2002 and the Consent and Second
Amendment dated as of October 31, 2002. Second Amended and Restated
Participation Agreement dated as of January 28, 2002 among Williams Field
Services - Gulf Coast Company, L.P., a Delaware limited partnership, as Lessee,
Williams Field Services Company, a Delaware corporation, as Guarantor, Wells
Fargo Bank Northwest, National Association, (formerly known as First Security
National Bank, National Association), as Certificate Trustee, Wells Fargo Bank
Nevada N.A., (successor by merger to First Security Trust company of Nevada), as
Collateral Agent, the financial institutions named therein as Certificate
Holders, Hatteras Funding Corporation, a Delaware corporation, as CP Lender, the
financial institutions named therein as the Facility Lenders and Purchasers,
Bank of America, National Association, as Administrative Agent and Administrator
for the CP Lender, Banc of America Facilities Leasing, L.L.C., as Arranger, Bank
of Nova Scotia, as Syndication Agent, and Credit Agricole Indosuez, as
Documentation Agent, as amended by the Consent and First Amendment dated as of
July 31, 2002 and the consent and Second Amendment dated as of October 31, 2002.

$200,000,000 Term Loan Agreement dated as of January 29, 1999, among The
Williams Companies, Inc., as Borrower, and Mizuho Corporate Bank, Ltd., f/k/a
The Fuji Bank, Limited, as Administrative Agent, and the Banks named therein, as
amended.

Joint Venture Sponsor Agreement dated as of December 28, 2000, among The
Williams Companies, Inc., as Sponsor and Williams Field Services Company, in
favor of Prairie Wolf Investors, Arctic Fox Assets, L.L.C., Williams Energy
(Canada), Inc. and the other Indemnified Persons listed therein, as amended.
Notwithstanding anything in the Guaranty to the contrary, for purposes of
Section 8.01 of the Guaranty, the outstanding amount of this Progeny Facility
shall equal the outstanding Capital Contribution of the Joint Venture Class B
Member (each as defined in the Snow Goose Company Agreement) plus the accrued
and unpaid Class B Amount (as defined in the Snow Goose Company Agreement) plus
all other amounts then due and payable to the Joint Venture Class B Member. As
used herein, "Snow Goose Company Agreement" means the Amended and Restated
Company Agreement of Snow Goose Associates, L.L.C., a Delaware limited liability
company, Prairie Wolf Investors, L.L.C., a Delaware limited liability company,
and Snow Goose Associates, L.L.C., a Delaware limited liability company, as
amended, supplemented, amended and restated or otherwise modified from time to
time.

Letter of Credit and Reimbursement Agreement dated as of May 15, 1994, among
Tulsa Parking Authority, The Williams Companies, Inc., Bank of Oklahoma,
National Association, and Bank of America, N.A. (formerly NationsBank of Texas,
N.A.), relative to Tulsa Parking Authority First Mortgage Revenue Bonds, as
amended.

$127,000,000 Master Agreement dated as of March 6, 2000, among The Williams
Companies, Inc., as Guarantor, Williams TravelCenters, Inc. and certain other
subsidiaries of The Williams Companies, Inc., as Lessees, Atlantic Financial
Group, Ltd., as Lessor, SunTrust Bank, as Agent, Societe Generale, Southwest
Agency, as Documentation Agent, and KBC Bank, N.V., as Syndication Agent and the
Lenders named therein, as amended.

PPH Sponsor Agreement dated as of December 31, 2001, by The Williams Companies,
Inc., as Sponsor, in favor of Piceance Production Holdings LLC, Plowshare
Investors LLC, and other
<PAGE>


Indemnified Persons listed in the agreement, as amended (the "PPH Company
Agreement"). Notwithstanding anything in the Guaranty to the contrary, for
purposes of Section 8.01 of the Guaranty, the outstanding amount of this Progeny
Facility shall equal the outstanding Contributed Capital of the Class B
Preferred Member (each as defined in the PPH Company Agreement) plus the accrued
and unpaid Class B Priority Return (as defined in the PPH Company Agreement)
plus all other amounts then due and payable to the Class B Preferred Member. As
used herein, "PPH Company Agreement" means the Amended and Restated Limited
Liability Company Agreement of Piceance Production Holdings LLC, dated as of
December 31, 2001, by and among, Williams Production RMT Company, a Delaware
corporation, Bison Royalty LLC, a Delaware limited liability company, Plowshare
Investors LLC, a Delaware limited liability company, and Piceance Production
Holdings LLC, a Delaware limited liability company, as amended, supplemented,
amended and restated or otherwise modified from time to time.

Amended and Restated LLC Loan Agreement dated as of June 9, 2000 among
Millennium Energy Fund, L.L.C. and MEF Production Payment Trust, as amended, and
the Amended and Restated Notes Credit Agreement dated as of June 9, 2000 among
MEF Production Payment Trust as the Borrower, certain financial institutions
thereto, Credit Lyonnais as Syndication Agent, and Bank of Montreal, as Agent,
and the Transaction Documents (as defined therein) related thereto.

All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with any of the foregoing.

LEGACY L/Cs

See Attachment 1 attached hereto.

All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with the letters of credit described on
Attachment 1.
<PAGE>


                                  ATTACHMENT 1

                                [TO BE ATTACHED]


<PAGE>


                                   SCHEDULE II

NEW CREDIT AGREEMENT

    1.   Citicorp USA, Inc., as Agent on behalf of the Lenders party to that
         certain Amended and Restated Credit Agreement dated as of October 31,
         2002 by and among The Williams Companies, Inc. as Borrower, the Lenders
         party thereto, Citibank, N.A., Bank of America N.A. and The Bank of
         Nova Scotia as Issuing Banks, Bank of America N.A. as Syndication
         Agent, Salomon Smith Barney Inc. as Arranger, and Citicorp USA, Inc.,
         as Agent and Collateral Agent.

PROGENY FACILITIES

    1.   Castle Associates L.P.* and Colchester LLC and the other Indemnified
         Persons (as defined in the Castle Parent Support Agreement) and
         Guaranteed Parties (as defined in the Castle Parent Support Agreement)
         as parties to or beneficiaries of the Castle Parent Support Agreement
         and related transaction documents.

    2.   Credit Lyonnais New York Branch, as Administrative Agent on behalf of
         the Lenders party to the First Amended and Restated Term Loan Agreement
         dated as of October 31, 2002 among The Williams Companies, Inc., as
         Borrower, and Credit Lyonnais New York Branch, as Administrative Agent,
         and the Lenders named therein, as amended.

    3.   First Security Bank, N.A. as Certificate Trustee on behalf of the
         Certificate Holders, Wells Fargo Bank Nevada, N.A., as Collateral
         Agent, and Bank of America, N.A., as Administrative Agent and
         Administrator under that certain Second Amended and Restated
         Participation Agreement, dated as of January 28, 2002, among Williams
         Oil Gathering, L.L.C., as Lessee, Williams Field Services Company, as
         Construction Agent, The Williams Companies, Inc., as Guarantor, First
         Security Bank, N.A. as Certificate Trustee, the Certificate Holders
         party thereto, Wells Fargo Bank Nevada, N.A., as Collateral Agent, Bank
         of America, N.A., as Administrative Agent and Administrator, as
         amended.

    4.   First Security Bank, N.A. as Certificate Trustee on behalf of the
         Certificate Holders, Wells Fargo Bank Nevada, N.A., as Collateral
         Agent, and Bank of America, N.A., as Administrative Agent and
         Administrator under that certain Second Amended and Restated
         Participation Agreement, dated as of January 28, 2002, among Williams
         Field Services - Gulf Coast Company, L.P., as Lessee, Williams Field
         Services Company, as Construction Agent, The Williams Companies, Inc.,
         as Guarantor, First Security Bank, N.A. as Certificate Trustee, the
         Certificate Holders party thereto, Wells Fargo Bank Nevada, N.A., as
         Collateral Agent, Bank of America, N.A., as Administrative Agent and
         Administrator, as amended.

    5.   Mizuho Corporate Bank, Ltd., f/k/a The Fuji Bank, Limited, as
         Administrative Agent on behalf of the Banks party to the $200,000,000
         Term Loan Agreement, dated as of January 29, 1999, among The Williams
         Companies, Inc., as Borrower, and Mizuho Corporate



<PAGE>


         Bank, Ltd., f/k/a The Fuji Bank, Limited, as Administrative Agent, and
         the Banks named therein, as amended.

    6.   Prairie Wolf Investors, L.L.C. and Snow Goose Associates, L.L.C*. and
         the other Indemnified Persons (as defined in the Joint Venture Sponsor
         Agreement) as parties to or beneficiaries of that certain Joint Venture
         Sponsor Agreement, dated as of December 28, 2000, among The Williams
         Companies, Inc., as Sponsor and Williams Field Services Company, in
         favor of Prairie Wolf Investors, L.L.C., Arctic Fox Assets, L.L.C.,
         Williams Energy (Canada), Inc. and the other Indemnified Persons listed
         therein, as amended, and related transaction documents.

    7.   Tulsa Parking Authority and Bank of America, N.A. (formerly NationsBank
         of Texas, N.A.) as parties to that certain Letter of Credit and
         Reimbursement Agreement, dated as of May 15, 1994, among Tulsa Parking
         Authority, The Williams Companies, Inc., Bank of Oklahoma, National
         Association, and Bank of America, N.A. (formerly NationsBank of Texas,
         N.A.), relative to Tulsa Parking Authority First Mortgage Revenue
         Bonds, as amended, and related transaction documents.

    8.   Atlantic Financial Group, Ltd., as Lessor, and SunTrust Bank, as Agent
         on behalf of the Lenders party to that certain Master Agreement, dated
         as of March 6, 2000, among The Williams Companies, Inc., as Guarantor,
         Williams TravelCenters, Inc. and certain other subsidiaries of The
         Williams Companies, Inc., as Lessees, Atlantic Financial Group, Ltd.,
         as Lessor, SunTrust Bank, as Agent, Societe Generale, Southwest Agency,
         as Documentation Agent, KBC Bank, N.V., as Syndication Agent, and the
         Lenders party thereto, as amended, and related transaction documents.

    9.   Piceance Production Holdings LLC*, Plowshare Investors LLC and the
         other Indemnified Persons (as defined in the PPH Sponsor Agreement) as
         parties to or beneficiaries of that certain PPH Sponsor Agreement,
         dated as of December 31, 2001, by The Williams Companies, Inc., as
         Sponsor, in favor of Piceance Production Holdings LLC, Plowshare
         Investors LLC, and other Indemnified Persons listed in the agreement,
         as amended, and related transaction documents.

    10.  The Guaranteed Parties under that certain Amended and Restated Payment
         and Performance Guaranty, Indemnity and Undertaking made by The
         Williams Companies, Inc. in favor of the Guaranteed Parties, dated
         October 31, 2002, as amended, and related transaction documents.



<PAGE>


    11.  The Guaranteed Parties under that certain First Amendment to
         Performance Guaranty, Indemnity and Undertaking (Initial LLC Asset)
         made by The Williams Companies, Inc. in favor of the Guaranteed
         Parties, dated October 31, 2002, as amended, and related transaction
         documents.

LEGACY L/Cs

    1.   Each issuer of a letter of credit as set forth on Attachment 1 attached
         to Schedule I to the Guaranty.


*Notwithstanding anything in the Guaranty to the contrary, the entities marked
with an asterisk shall be deemed to be "Financial Institutions" for purposes of
the Guaranty for so long as any Person not an affiliate of the Company owns an
Equity Interest in such entity.
<PAGE>
THE WILLIAMS COMPANIES, INC.

LEGACY LETTERS OF CREDIT - FOR PURPOSE OF PRO RATA DISTRIBUTION OF NET CASH
PROCEEDS FROM ASSET SALES

AS OF 10-31-02

<Table>
<Caption>
LETTER OF                                      ACCOUNT
CREDIT #                                        PARTY                                    BENEFICIARY
- ---------                                      -------                                   -----------
<S>                                <C>                                          <C>
ABN-AMRO
S815546                            Wilpro Energy Services PIGAP II Ltd          PDVSA Petroleo y Gas SA

     Total ABN-AMRO

BANK OF AMERICA
C7269699                           MAPCO, Inc.                                  Old Republic Insurance Company
C7269707                           MAPCO, Inc.                                  ACE Insurance Company of Texas
3020403                            WilPro Energy Services (El Furrial) Ltd      Citibank, N.A.
7409323                            The Williams Companies, Inc.                 PDVSA Petroleo y Gas, S.A.
3037033                            Barrett Resources Corporation                Oklahoma Tax Commission
5535821l135652                     TWC                                          Tulsa Parking Authority

     Total Bank of America

JPMORGAN CHASE
P-389157                           The Williams Companies, Inc.                 Citicorp North America Inc. as RCE Agent (Castle)
P-299538                           Wilpro Energy Services (PIGAP II) Limited    PDVSA Petroleo y Gas, S.A.
P-219203                           Williams Energy Marketing & Trading          The New York Independent System Operator, Inc.
P-224665                           Williams Energy Marketing & Trading          Royal Bank of Canada
P-221802                           Williams Energy Marketing & Trading          California Power Exchange Corporation
P-221924                           The Williams Companies, Inc.                 National Union Fire Insurance et al
P-222915                           The Williams Companies, Inc.                 United States Fidelity & Guaranty
P-225395                           Williams Production RMT Co.                  Powder River Energy Corp.
P-225403                           Williams Production Mid-Continent Company    U.S. Dept. of Interior Bureau of Indian Affairs

     Total JPMorgan Chase

CITIBANK
33623046                           TWC on behalf of ACCROVEN, SRL               PDVSA Gas S.A. ACCRO III & IV Projects
33623048                           TWC on behalf of ACCROVEN, SRL               PDVSA Gas S.A. ACCRO III & IV Projects
33623049                           TWC on behalf of ACCROVEN, SRL               PDVSA Gas S. ACCRO III & IV Projects

     Total Citibank

ROYAL BANK OF CANADA
1739/s19728                        TWC/WGP-Alliance Canada                      Montreal Trust Company of Canada
1739/s19729                        TWC/WGP-Alliance Canada                      The Bank of Nova Scotia Trust Co. of NY

     Total Royal Bank of Canada

TORONTO DOMINION
1699                               The Williams Companies, Inc.                 Prairie Wolf Investors

     Total Toronto Dominion

WELLS FARGO
NMS232199                          Transco Energy Company                       Transportation Insurance Company

     Total Wells Fargo

                                   TOTAL LC's OUTSTANDING


<Caption>

LETTER OF                                                        EXPIRY          % OF          CASH
CREDIT #                              AMOUNT        DATED         DATE           TOTAL      COLLATERAL
- ---------                             ------        -----        ------          -----      ----------
<S>                                <C>            <C>          <C>               <C>       <C>
ABN-AMRO
S815546                            $   5,000,000    9/1/1999    8/29/2003
                                   -------------
     Total ABN-AMRO                $   5,000,000                                  3.3%     $     471,000

BANK OF AMERICA
C7269699                           $     300,000   3/15/1995    3/30/2003
C7269707                           $   1,582,902   3/15/1995    3/31/2003
3020403                            $   5,652,733  11/15/1999   11/15/2002
7409323                            $     225,000    5/2/2002    5/31/2003
3037033                            $     200,000   4/16/2001    5/11/2003
5535821l135652                     $   8,608,985   5/15/1992    5/31/2003
                                   -------------
     Total Bank of America         $  16,569,620                                 11.0%     $   2,559,000

JPMORGAN CHASE
P-389157                           $   3,800,000  12/23/1998   12/23/2002
P-299538                           $  40,000,000    4/3/2000    4/16/2003
P-219203                           $   5,500,000  11/13/2001    12/1/2002
P-224665                           $   5,000,000   4/22/2002    4/30/2003
P-221802                           $   1,000,000    2/1/2002     2/1/2003
P-221924                           $   9,010,112    2/6/2002     3/1/2003
P-222915                           $   6,650,000    3/7/2002     3/1/2003
P-225395                           $   4,000,000   5/10/2002    5/10/2004
P-225403                           $      30,000   5/13/2002    5/17/2003
                                   -------------
     Total JPMorgan Chase          $  74,990,112                                 49.8%     $   9,720,000

CITIBANK
33623046                           $  32,500,000    3/9/2001     1/6/2003
33623048                           $   4,000,000    3/9/2001     1/6/2003
33623049                           $   1,000,000    3/9/2001     1/6/2003
                                   -------------
     Total Citibank                $  37,500,000                                 24.9%     $   3,536,000

ROYAL BANK OF CANADA
1739/s19728                        $   2,789,778  12/18/2000   12/17/2002
1739/s19729                        $   2,922,000  12/18/2000   12/17/2002
                                   -------------
     Total Royal Bank of Canada    $   5,711,778                                  3.8%     $     547,000

TORONTO DOMINION
1699                               $  10,860,000  12/28/2000   12/28/2005
                                   -------------
     Total Toronto Dominion        $  10,860,000                                  7.2%     $   1,024,000

WELLS FARGO
NMS232199                          $      40,000    2/2/1995     2/2/2003
                                   -------------
     Total Wells Fargo             $      40,000                                  0.0%     $      4,000

                                   $ 150,671,510                                  100%     $ 17,861,000
                                   =============                                          ------------
</Table>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>12
<FILENAME>d00961exv10w10.txt
<DESCRIPTION>FORM OF GUARANTY
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.10







                 FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT


                                      among


                          THE WILLIAMS COMPANIES, INC.,
                                   as Borrower


                        CREDIT LYONNAIS NEW YORK BRANCH,
                             as Administrative Agent


                COMMERZBANK AG NEW YORK AND GRAND CAYMAN BRANCHES
                              as Syndication Agent


                            THE BANK OF NOVA SCOTIA,
                             as Documentation Agent


                                       and


                            THE LENDERS NAMED HEREIN,
                                     Lenders


                          DATED AS OF OCTOBER 31, 2002


<PAGE>




                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                               PAGE

<S>     <C>       <C>                                                                                          <C>
SECTION 1         DEFINITIONS AND TERMS...........................................................................1
         1.1      Definitions.....................................................................................1
         1.2      Number and Gender of Words; Other References...................................................24
         1.3      Accounting Terms...............................................................................25

SECTION 2         BORROWING PROVISIONS...........................................................................25
         2.1      Commitments; Borrowings from Designated Lenders................................................25
         2.2      Termination of Commitments.....................................................................25

SECTION 3         TERMS OF PAYMENT...............................................................................25
         3.1      Loan Accounts, Notes, and Payments.............................................................25
         3.2      Interest and Principal Payments................................................................26
         3.3      Interest Options...............................................................................29
         3.4      Quotation of Rates.............................................................................29
         3.5      Default Rate...................................................................................29
         3.6      Interest Recapture.............................................................................29
         3.7      Interest Calculations..........................................................................29
         3.8      Maximum Rate...................................................................................30
         3.9      Interest Periods...............................................................................30
         3.10     Conversions....................................................................................30
         3.11     Order of Application...........................................................................31
         3.12     Sharing of Payments, Etc.......................................................................31
         3.13     Offset.........................................................................................31
         3.14     Booking Borrowings.............................................................................31

SECTION 4         CHANGE IN CIRCUMSTANCES........................................................................31
         4.1      Increased Cost and Reduced Return..............................................................31
         4.2      Limitation on Types of Loans...................................................................33
         4.3      Illegality.....................................................................................33
         4.4      Treatment of Affected Loans....................................................................33
         4.5      Compensation; Replacement of Lenders...........................................................34
         4.6      Taxes..........................................................................................34

SECTION 5         FEES...........................................................................................36
         5.1      Treatment of Fees..............................................................................36
         5.2      Fees of Administrative Agent and Arranger......................................................36
         5.3      Amendment Fee..................................................................................36

SECTION 6         CONDITIONS PRECEDENT...........................................................................36
         6.1      Conditions Precedent to Closing................................................................36

SECTION 7         REPRESENTATIONS AND WARRANTIES.................................................................37
         7.1      Organization and Good Standing.................................................................37
         7.2      Authorization and Power........................................................................37
         7.3      Approvals and Consents.........................................................................37
         7.4      Enforceable Obligation.........................................................................37
</Table>



                                       i              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT


<PAGE>

<Table>
<S>               <C>                                                                                           <C>
         7.5      Financial Condition............................................................................37
         7.6      No Material Controversies......................................................................38
         7.7      Investment Company.............................................................................38
         7.8      ERISA Compliance...............................................................................38
         7.9      Taxes..........................................................................................38
         7.10     Holding Company................................................................................38
         7.11     Environmental Compliance.......................................................................38
         7.12     Use of Proceeds................................................................................39

SECTION 8         COVENANTS......................................................................................39
         8.1      Compliance with Laws, Etc......................................................................39
         8.2      Financial Statements, Reports and Documents....................................................40
         8.3      Maintenance of Insurance.......................................................................42
         8.4      Preservation of Corporate Existence, Etc.......................................................42
         8.5      Debt; Interest Coverage........................................................................42
         8.6      Liens, Etc.....................................................................................42
         8.7      Merger and Sale of Assets......................................................................43
         8.8      Agreements to Restrict Dividends and Certain Transfers.........................................43
         8.9      Loans and Advances; Investments................................................................43
         8.10     Maintenance of Ownership of Certain Subsidiaries...............................................44
         8.11     Compliance with ERISA..........................................................................44
         8.12     Transactions with Related Parties..............................................................44
         8.13     Guarantees.....................................................................................44
         8.14     Sale and Lease-Back Transactions...............................................................45
         8.15     Use of Proceeds of Borrowings..................................................................45
         8.16     Asset Disposition..............................................................................45
         8.17     Restricted Payments............................................................................46
         8.18     Investment in Other Persons....................................................................47
         8.19     Subsidiary Debt................................................................................48
         8.20     Compliance with Primary Credit Agreement.......................................................48
         8.21     Borrower Liquidity Reserve.....................................................................48
         8.22     Replacement of Legacy L/C with Letter of Credit................................................48
         8.23     Agreement to Restrict Transfers to NewGP.......................................................48
         8.24     Cash Collateralization of Legacy L/Cs..........................................................48

SECTION  9        DEFAULT........................................................................................49
         9.1      Payment of Obligation..........................................................................49
         9.2      Misrepresentation..............................................................................49
         9.3      Covenants......................................................................................49
         9.4      Default Under Other Debt.......................................................................49
         9.5      Debtor Relief..................................................................................50
         9.6      Judgments......................................................................................50
         9.7      Employee Benefit Plans.........................................................................50
         9.8      Validity and Enforceability of Loan Papers.....................................................51

SECTION 10        RIGHTS AND REMEDIES............................................................................51
         10.1     Remedies Upon Default..........................................................................51
         10.2     The Company Waivers............................................................................51
         10.3     Performance by Administrative Agent............................................................51
         10.4     Delegation of Duties and Rights................................................................52
</Table>



                                       ii             FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

<Table>
<S>               <C>                                                                                           <C>
         10.5     Not in Control.................................................................................52
         10.6     Course of Dealing..............................................................................52
         10.7     Cumulative Rights..............................................................................52
         10.8     Application of Proceeds........................................................................52
         10.9     Limitation of Rights...........................................................................52
         10.10    Expenditures by Lenders........................................................................52
         10.11    Indemnification................................................................................53

SECTION 11        AGREEMENT AMONG LENDERS........................................................................53
         11.1     Administrative Agent...........................................................................53
         11.2     Expenses.......................................................................................55
         11.3     Proportionate Absorption of Losses.............................................................55
         11.4     Delegation of Duties; Reliance.................................................................55
         11.5     Limitation of Liability........................................................................56
         11.6     Default; Collateral............................................................................57
         11.7     Limitation of Liability........................................................................57
         11.8     Relationship of Lenders........................................................................57
         11.9     Benefits of Agreement..........................................................................57
         11.10    Agents.........................................................................................57
         11.11    Obligation Several.............................................................................57

SECTION 12        MISCELLANEOUS..................................................................................57
         12.1     Headings.......................................................................................57
         12.2     Nonbusiness Days...............................................................................57
         12.3     Communications.................................................................................58
         12.4     Form and Number of Documents...................................................................58
         12.5     Exceptions to Covenants........................................................................58
         12.6     Survival.......................................................................................58
         12.7     Governing Law..................................................................................58
         12.8     Invalid Provisions.............................................................................58
         12.9     Entirety.......................................................................................58
         12.10    Jurisdiction; Venue; Service of Process; Jury Trial............................................59
         12.11    Amendments, Consents, Conflicts, and Waivers...................................................59
         12.12    Multiple Counterparts..........................................................................60
         12.13    Successors and Assigns; Assignments and Participations.........................................60
         12.14    Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances....................63
         12.15    Confidentiality................................................................................63
         12.16    No Bankruptcy Proceedings......................................................................64
         12.17    Guaranties.....................................................................................64
         12.18    Existing Defaults of No Effect.................................................................64
</Table>


                             EXHIBITS AND SCHEDULES

<Table>
<S>                   <C>       <C>
Exhibit A               -       Form of Term Note
Exhibit B               -       Form of Notice of Conversion
Exhibit C               -       Form of Assignment and Acceptance Agreement
Exhibit D-1             -       Form of Opinion of General Counsel of the Company and the
                                Guarantors
Exhibit D-2             -       Form of Opinion of New York Counsel to the Company and
                                the Guarantors
</Table>



                                      iii             FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

<Table>
<S>                   <C>       <C>
Exhibit E               -       Form of Designation Agreement
Exhibit F               -       Investments Described in Section 8.9 of the Agreement
Exhibit G               -       Existing Loans and Investments in WCG Subsidiaries
Schedule I              -       Permitted Liens
Schedule II             -       Material Controversies
Schedule III            -       Progeny Facilities
Schedule IV             -       Additional Public Filings
Schedule V              -       Permitted Dispositions
Schedule 2.1            -       Lenders and Commitments
Schedule 6.1            -       Conditions Precedent to Closing
</Table>



                                      iv              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT


<PAGE>


                    FIRST AMENDED AND RESTATED LOAN AGREEMENT

         THIS FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT is entered into as
of this 31 day of October, 2002, among THE WILLIAMS COMPANIES, INC., a Delaware
corporation (the "COMPANY"), LENDERS (hereinafter defined), COMMERZBANK AG NEW
YORK AND GRAND CAYMAN BRANCHES, as Syndication Agent (hereinafter defined), THE
BANK OF NOVA SCOTIA, as Documentation Agent (hereinafter defined), and CREDIT
LYONNAIS NEW YORK BRANCH, a duly licensed branch under the New York Banking Law
of a foreign banking corporation organized under the laws of the Republic of
France, as a Lender and as Administrative Agent (hereinafter defined) for itself
and the other Lenders, as hereinafter defined.

                                    RECITALS

         A. The Company, the Lenders, the Syndication Agent, the Documentation
Agent and the Administrative Agent are parties to that certain Term Loan
Agreement dated as of April 7, 2000, as amended by a First Amendment to Term
Loan Agreement dated as of August 21, 2000, a Waiver and Second Amendment to
term Loan Agreement dated as of January 31, 2001, a Third Amendment to Term Loan
Agreement dated as of February 7, 2002, a Fourth Amendment to Term Loan
Agreement Dated as of March 11, 2002, and a Fifth Amendment to term Loan
Agreement dated as of July 31, 2002 (such Term Loan Agreement, as so amended
herein referred to as the "Existing Loan Agreement"), pursuant to which the
Company has borrowed certain term loans from the Lenders in the aggregate
principal amount of $400,000,000 for the purpose of refinancing existing
indebtedness, financing acquisitions and capital expenditures and for general
corporate purposes.

         B. The Company has requested that the Existing Loan Agreement be
amended and restated as provided herein, and the Administrative Agent, the
Syndication Agent, the Documentation Agent, and the Lenders are willing to so
amend and restate the Existing Loan Agreement upon and subject to the terms and
conditions set forth in this Agreement.

         Accordingly, in consideration of the mutual covenants contained herein,
the Company, Administrative Agent, Syndication Agent, Documentation Agent and
Lenders agree that the Existing Loan Agreement is hereby amended and restated,
in its entirety, as follows:

SECTION 1  DEFINITIONS AND TERMS

         1.1 Definitions. As used herein:

         "ACCEPTABLE SECURITY INTEREST" in any property shall mean a Lien
granted pursuant to a Credit Document (i) which exists in favor of the
Collateral Trustee for the benefit of itself and other parties, as more fully
described in the Collateral Trust Agreement, (ii) which is superior to all other
Liens, except Permitted Liens, (iii) which secures the "Secured Obligations" as
defined in the Security Agreement (as defined in the L/C Agreement), and (iv)
which is perfected and is enforceable by the Collateral Trustee, for the benefit
of itself and other parties, as more fully described in the Collateral Trust
Agreement, against all other Persons in preference to any rights of any such
other Person therein (other than Permitted Liens); provided that such Lien may
be subject to the "Agreed Exceptions" (as defined in the L/C Agreement).

         "ADJUSTED EURODOLLAR RATE" means, for any Eurodollar Rate Borrowing for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined by the Administrative Agent to be equal
to the quotient obtained by dividing (a) the Eurodollar Rate for such



                                                      FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

Eurodollar Rate Borrowing for such Interest Period by (b) one minus the Reserve
Requirement for such Eurodollar Rate Borrowing for such Interest Period.

         "ADMINISTRATIVE AGENT" means Credit Lyonnais New York Branch and its
permitted successors or assigns as "Administrative Agent" under this Agreement.

         "ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire
substantially in the form of EXHIBIT C hereto, which each Lender shall complete
and provide to Administrative Agent.

         "AFFILIATE" of any Person means any other individual or entity who
directly or indirectly controls, or is controlled by, or is under common control
with, such Person, and, for purposes of this definition only, "control,"
"controlled by," and "under common control with" mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of voting securities, by contract, or otherwise).

         "AGENTS" means, collectively, the Administrative Agent, the Syndication
Agent and the Documentation Agent.

         "AGREEMENT" means this First Amended and Restated Term Loan Agreement
(as the same may hereafter be amended, modified, supplemented, or restated from
time to time).

         "AMERICAN SODA" means American Soda, L.L.P., a Colorado limited
liability partnership.

         "APPLICABLE LENDING OFFICE" means, for each Lender and for each Type of
Borrowing, the "Lending Office" of such Lender (or an Affiliate of such Lender)
designated on SCHEDULE 2.1 attached hereto or such other office that such Lender
(or an Affiliate of such Lender) may from time to time specify to Administrative
Agent and the Company by written notice in accordance with the terms hereof.

         "APPLICABLE MARGIN" means the percentage set forth in the table below
for the Type of Borrowing which corresponds to the Company's conformity, on any
date of determination, with the ratings (or implied ratings) established by both
S&P and Moody's applicable to the Company's senior, unsecured,
non-credit-enhanced long term indebtedness for borrowed money ("INDEX DEBT"):

<Table>
<Caption>
       INDEX DEBT RATINGS              EURODOLLAR           BASE RATE
                                     RATE BORROWINGS        BORROWINGS

<S>                                  <C>                   <C>
           Category 1
      BB+ and Ba1 or higher              3.250%               2.000%

           Category 2
           BB and Ba2                    3.750%               2.500%

           Category 3
          BB- and Ba3                    4.250%               3.000%

           Category 4
           B+ and B1                     4.500%               3.250%

           Category 5
       B and B2; or lower                4.750%               3.500%
</Table>



                                       2              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         For purposes of determining the Applicable Margin, with respect to the
         debt ratings criteria: (i) if neither Moody's nor S&P shall have in
         effect a rating for Index Debt (other than by reason of the
         circumstances referred to in the last sentence of this definition),
         then both such rating agencies will be deemed to have established
         ratings for Index Debt in Category 5; (ii) if only one of Moody's or
         S&P shall have in effect a rating for Index Debt, the Company and the
         Lenders will negotiate in good faith to agree upon another rating
         agency to be substituted by an agreement for the rating agency which
         shall not have a rating in effect, and in the absence of such agreement
         the Applicable Margin will be determined by reference to the available
         rating; (iii) except as expressly provided in the above table, if the
         ratings established by Moody's and S&P shall differ by (x) one
         Category, the Applicable Margin shall be determined by reference to the
         numerically higher Category, and (y) two or more Categories the
         Applicable Margin shall be determined by reference to the numerical
         Category which is the numerically highest such Category (for example,
         if the rating from S&P is in Category 2 and the rating from Moody's is
         in Category 5, the Applicable Margin shall be determined by reference
         to Category 5); and (iv) if any rating established by Moody's or S&P
         shall be changed (other than as a result of a change in the rating
         system of either Moody's or S&P), such change shall be effective as of
         the date on which such change is first announced by the rating agency
         making such change. If the rating system of either Moody's or S&P shall
         change prior to the payment in full of the Obligation, the Company and
         the Lenders shall negotiate in good faith to amend the references to
         specific ratings in this definition to reflect such changed rating
         system. If both Moody's and S&P shall cease to be in the business of
         rating corporate debt obligations, the Company and the Lenders shall
         negotiate in good faith to agree upon a substitute rating agency and to
         amend the references to specific ratings in this definition to reflect
         the ratings used by such substitute rating agency, and the Applicable
         Margin shall continue to be based upon the ratings Category in effect
         immediately prior to such event until such agreement on a substitute
         rating agency is reached.

         "ARRANGER" means Credit Lyonnais New York Branch and its successors and
assigns.

         "ARCTIC FOX" has the meaning specified in the definition of "Arctic Fox
Capital Contribution."

         "ARCTIC FOX CAPITAL CONTRIBUTION" means the transfer of the Equity
Interests of Williams Energy (Canada), Inc. from Williams GmbH, in the form of a
dividend, up through certain other Subsidiaries, to the Company, and by the
Company in the form of a capital contribution to Arctic Fox Assets, L.L.C.
("ARCTIC FOX") as required by, and in accordance with, Amendment No. 3 to
Certain Operative Documents and Consents dated as of October 31, 2002, among,
inter alia, the Company and Arctic Fox.

         "ASSET" or "PROPERTY" (in each case, whether or not capitalized) means
any right, title or interest in any kind of property or asset, whether real,
personal or mixed, and whether tangible or intangible.

         "ATTRIBUTABLE OBLIGATION" of any Person means, with respect to any Sale
and Lease-Back Transaction of such Person as of any particular time, the present
value at such time discounted at the rate of interest implicit in the terms of
the lease of the obligations of the lessee under such lease for net rental
payments during the remaining term of the lease (including any period for which
such lease has been extended or may, at the option of such Person, be extended).

         "BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"BANKRUPTCY" as now or hereinafter in effect, or any successor thereto.

         "BARRETT" means, collectively, RMT and its Subsidiaries.

         "BARRETT LOAN" means the loans made pursuant to the Barrett Loan
Agreement.



                                       3              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         "BARRETT LOAN AGREEMENT" means the Credit Agreement dated as of
July 31, 2002, among the Company, RMT LLC, RMT, the Lenders party thereto from
time to time, Lehman Brothers Inc., as Arranger, and Lehman Commercial Paper
Inc., as Syndication Agent and as Administrative Agent and the Loan Documents
(as defined therein).

         "BASE RATE" means, for any day, the rate per annum equal to the higher
of (a) the Federal Funds Rate for such day plus one-half of one percent (.5%) or
(b) the Prime Rate for such day. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate.

         "BASE RATE BORROWING" means a Borrowing bearing interest at the sum of
the Base Rate plus the Applicable Margin for Base Rate Borrowings.

         "BORROWING" means any amount disbursed (a) by one or more Lenders to
the Company under the Loan Papers, whether such amount constitutes an original
disbursement of funds or the continuation of an amount outstanding or (b) by any
Lender in accordance with, and to satisfy the obligations under, any Loan Paper.

         "BUSINESS DAY" means (a) for all purposes, any day other than Saturday,
Sunday, and any other day on which commercial banking institutions are required
or authorized by Law to be closed in New York, New York, and (b) in addition to
the foregoing, in respect of any Eurodollar Rate Borrowing, a day on which
dealings in United States dollars are conducted in the London interbank market
and commercial banks are open for international business in London.

         "BUSINESS ENTITY" means a partnership, limited partnership, limited
liability partnership, corporation (including a business trust), limited
liability company, unlimited liability company, joint stock company trust,
unincorporated association, joint venture or other entity.

         "CALIFORNIA PROCEEDINGS" means the proceedings with or in the State of
California, as described in more detail on the Form 10-Q for the quarterly
period ended June 30, 2002, filed by the Company with the Securities and
Exchange Commission on August 14, 2002.

         "CAPITAL LEASE" means a lease that in accordance with generally
acceptable accounting principles must be reflected on a company's balance sheet
as an asset and corresponding liability.

         "CARDINAL PIPELINE SYSTEM" means that intrastate natural gas pipeline
system doing business under that name located in the State of North Carolina, in
which the Company indirectly owned a 45% interest on July 31, 2002.

         "CASH COLLATERALIZE" has the meaning specified in SECTION 1.1 of the
L/C Agreement.

         "CASH EQUIVALENTS" means any of the following, to the extent owned by
the Company or any of its Subsidiaries free and clear of all Liens other than
Permitted Liens and having a maturity of not greater than 270 days from the date
of acquisition thereof: (a) readily marketable direct obligations of the
Government of the United States or any agency or instrumentality thereof or
obligations unconditionally guaranteed by the full faith and credit of the
Government of the United States, (b) insured certificates of deposit of or time
deposits with any commercial bank that is a Lender or a "Bank" under each of the
Primary Credit Agreement or the L/C Agreement or a member of the Federal Reserve
System, issues (or the parent of which issues) commercial



                                       4              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

paper rated as described in clause (c) below, is organized under the laws of the
United States or any State thereof and has combined capital and surplus of at
least $1 billion or (c) commercial paper in an aggregate amount of no more than
$500,000,000, per issuer outstanding at any time, issued by any corporation
organized under the laws of any State of the United States and rated at least
"Prime-1" (or the then equivalent grade) by Moody's Investors Service, Inc. or
"A-1" (or the then equivalent grade) by Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.

         "CASH FLOW" means, for any period, the Consolidated cash flow from
operations of the Company and its Consolidated Subsidiaries for such period
determined in accordance with generally accepted accounting principles; provided
that in determining such Consolidated cash flow from operations, there shall be
excluded therefrom (to the extent otherwise included therein) (a) any positive
cash flow from operations of any Person (including Project Financing
Subsidiaries) subject to any restriction prohibiting the distribution of cash to
the Company or any of its Consolidated Subsidiaries, except and then only to the
extent of the amount thereof that the Company or any of its Consolidated
Subsidiaries actually receives or has the right to receive (within the limits of
such restrictions) during such period, (b) proceeds resulting from the sale,
transfer or other disposition of any property by the Company or its Consolidated
Subsidiaries (other than sales, transfers and other dispositions in the ordinary
course of business), (c) all other extraordinary items, (d) any item
constituting the cumulative effect of a change in accounting principles, prior
to applicable income taxes, (e) repayment of the WCG Synthetic Lease and (f) for
the third Fiscal Quarter of 2002 only, margin and capital or adequate assurances
relating to its refining and marketing and EMT.

         "CASH HOLDINGS" of any Person means the total investment of such Person
at the time of determination in:

                  (a) demand deposits or time deposits maturing within one year
         with any Agent or any Lender or any Bank (as defined in the Primary
         Credit Agreement) (or other commercial banking institution of the
         stature referred to in CLAUSE (d)(i) of this definition);

                  (b) any note or other evidence of indebtedness, maturing not
         more than one (1) year after such time, issued or guaranteed by the
         United States Government or by a government of another country which
         carries a long-term rating of Aaa by Moody's or AAA by S&P;

                  (c) commercial paper, maturing not more than nine (9) months
         from the date of issue, which is issued by

                           (i) a corporation (other than an Affiliate of the
                  Company) rated (x) A-1 by S&P, P-1 by Moody's or F-1 by Fitch
                  or (y) lower than set forth in the immediately preceding
                  clause (x), provided, however, that the value of all such
                  commercial paper shall not exceed 10% of the total value of
                  all commercial paper comprising "Cash Holdings," or

                           (ii) any Agent or any Lender or any Bank (as defined
                  in the Primary Credit Agreement) (or its holding company) with
                  a rating on its long-term unsecured debt of at least AA from
                  S&P or Aa from Moody's;

                  (d) any certificate of deposit or bankers acceptance, maturing
         not more than three (3) years after such time, which is issued by
         either

                           (i) a commercial banking institution that is a member
                  of the Federal Reserve System and has a combined capital and
                  surplus and undivided profits of not less than $1,000,000,000;
                  or



                                       5              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

                           (ii) any Agent or any Lender or any Bank (as defined
                  in the Primary Credit Agreement)with a rating on its long-term
                  unsecured debt of at least AA from S&P or Aa from Moody's;

                  (e) notes or other evidences of indebtedness, maturing not
         more than three (3) years after such time, issued by

                           (i) a corporation (other than an Affiliate of the
                  Company) rated AA by S&P or Aa by Moody's, or

                           (ii) any Agent or any Lender or any Bank (as defined
                  in the Primary Credit Agreement) (or its holding company)with
                  a rating on its long-term unsecured debt of at least AA from
                  S&P or Aa from Moody's;

                  (f) any repurchase agreement entered into with any Agent or
         any Lender or any Bank (as defined in the Primary Credit Agreement) (or
         other commercial banking institution of the stature referred to in
         CLAUSE (d)(i) of this definition) which

                           (i) is secured by a fully perfected security interest
                  in any obligation of the type described in any of CLAUSES (a)
                  through (d);

                           (ii) has a market value at the time such repurchase
                  agreement is entered into of not less than 100% of the
                  repurchase obligation of Administrative Agent or such Lender
                  or Bank (as defined in the Primary Credit Agreement) (or other
                  commercial banking institution) thereunder; and

                  (g) money market preferred instruments by participation in a
         Dutch auction (or the equivalent) where the instrument is rated no
         lower than Aa by Moody's or AA by S&P.

         "CASTLE" means Castle Associates, L.P., a Delaware partnership.

         "CASTLE PARTNERSHIP AGREEMENT" means the Amended and Restated Agreement
of Limited Partnership of Castle Associates, L.P., dated as of December 23,
1998, by and among Garrison, L.L.C., a Delaware limited liability company,
Laughton, L.L.C., a Delaware limited liability company, and Colchester LLC, a
Delaware limited liability company, as amended, supplemented, amended and
restated or otherwise modified from time to time.

         "CASTLE TRANSACTION" means the purchase by the Company of the limited
partnership interest in Castle held by Colchester LLC, a Delaware Limited
liability company.

         "CLOSING DATE" means the date upon which this Agreement has been
executed by the Company, Determining Lenders, and Administrative Agent and all
conditions precedent specified in SECTION 6.1 have been satisfied or waived.

         "CODE" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code, and any reference to any statutory provision shall
be deemed to be a reference to any successor provision or provisions.

         "COLLATERAL" shall have the meaning specified in SECTION 1.1 of the L/C
Agreement.



                                       6              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         "COLLATERAL TRUST AGREEMENT" means that certain Collateral Trust
Agreement dated as of July 31, 2002 by and among the Company, several of its
Subsidiaries and the Collateral Trustee, which Collateral Trust Agreement
provides for certain Collateral to be held by such Collateral Trustee for the
benefit of the Banks and agents under the Primary Credit Agreement, the Banks,
Issuing Banks and agents under the L/C Agreement and the holders of certain
public debt of the Company issued pursuant to that certain (i) Indenture between
MAPCO Inc., as Issuer, Bankers Trust Company, as Trustee dated March 31, 1990
and (ii) Indenture between Transco Energy Company, as Issuer and Bankers Trust
Company, as Trustee dated May 1, 1990.

         "COLLATERAL TRUSTEE" means Citibank, N.A, in its capacity as
"Collateral Trustee" pursuant to the Collateral Trust Agreement and its
successors or assigns appointed pursuant to Article 5 of the Collateral Trust
Agreement.

         "COMMITMENT" means an amount (subject to reduction or cancellation as
herein provided) equal to $400,000,000.

         "COMMITMENT PERIOD" means the period of time from April 7, 2000 to and
including the earlier of (i) the date which is ninety (90) days after April 7,
2000, and (ii) the effective date of any other termination or cancellation of
the Lenders' commitments to make loans under, and in accordance with, this
Agreement.

         "COMPANY" is defined in the preamble to this Agreement and includes any
permitted successors of the Company.

         "CONSEQUENTIAL LOSS" means any actual loss or expense which any Lender
may reasonably incur in respect of a Eurodollar Rate Borrowing as a consequence
of (a) any failure or refusal of the Company (for any reasons whatsoever other
than a default by Administrative Agent or a Lender) to accept or utilize such
Borrowing after the Company shall have requested it under this Agreement, or (b)
any prepayment or payment of such Borrowing or conversion of such Borrowing to a
Borrowing of another Type, in each case, prior to the last day of the Interest
Period therefor.

         "CONSOLIDATED" refers to the consolidation of the accounts of any
Person and its consolidated subsidiaries in accordance with generally accepted
accounting principles.

        "CONSOLIDATED NET WORTH" of any Person means the Net Worth of such
Person and its Consolidated Subsidiaries on a Consolidated basis plus, in the
case of the Company, the Designated Minority Interests to the extent not
otherwise included; provided that, in no event shall the value ascribed to
Designated Minority Interests for the Consolidated Subsidiaries of the Company
described in clauses (i) through (v), (vii) and (viii) of the definition of
"Designated Minority Interests" below exceed $136,892,000 in the aggregate for
the purposes of this definition. As used in this definition, "Designated
Minority Interests" means, as of any date of determination, the total value,
determined in accordance with generally accepted accounting principles, of the
minority interests of Persons other than the Company and Consolidated
Subsidiaries of the Company in the following Subsidiaries of the Company: (i) El
Furrial, (ii) PIGAP II, (iii) Nebraska Energy, (iv) Seminole, (v) American Soda,
(vi) the Midstream Asset MLP, (vii) Apco Argentina, Inc. and (viii) other
Subsidiaries with a value not to exceed in the aggregate $9,000,000 for such
other Subsidiaries not referred to in items (i) through (viii); provided that
minority interests which provide for a stated preferred cumulative return shall
not be included in "Designated Minority Interests".

         "CONSOLIDATED SUBSIDIARIES" of any Person means all other Persons the
financial statements of which are consolidated with those of such Person in
accordance with generally accepted accounting principles. For



                                       7              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT


<PAGE>

the avoidance of doubt, as of the date of this Agreement, the MLP and its
Subsidiaries shall be "Consolidated Subsidiaries" of the Company.

         "CONSOLIDATED TANGIBLE NET WORTH" of any Person means the Tangible Net
Worth of such Person and its Consolidated Subsidiaries on a Consolidated basis.

         "CONSOLIDATING" refers to, with respect to the balance sheets and
statements of income and cash flow required by SECTIONS 7.5, 8.2(b) and 8.2(c),
the consolidation of the accounts of the Company and its Subsidiaries in
accordance with the following format: (i) the WCG Subsidiaries, (ii) the Company
and its Subsidiaries (which term does not include the WCG Subsidiaries), (iii)
consolidation adjustments, and (iv) Consolidated financial statements of the
Company and each of its Subsidiaries, including the WCG Subsidiaries.

         "CREDIT DOCUMENTS" means the Primary Credit Agreement, the L/C
Agreement, the L/C Collateral Documents, the Letter of Credit Documents, each
Letter of Credit, all documents, instruments, agreements, certificates and
notices at any time executed and/or delivered to the Collateral Trustee, the
"Surety Administrative Agent", "Agent," any "Issuing Bank," or any "Bank" (as
such terms are defined in each of the Primary Credit Agreement and the L/C
Agreement) in connection therewith.

         "DEBT" means, in the case of any Person, the principal or equivalent
amount (without duplication) of (i) indebtedness of such Person for borrowed
money, (ii) obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (iii) obligations of such Person to pay the deferred
purchase price of property or services (other than trade payables not overdue by
more than 60 days incurred in the ordinary course of business), (iv) obligations
of such Person as lessee under leases that are, in accordance with generally
accepted accounting principles, recorded as capital leases, (v) payments
necessary to exercise a purchase option with respect to the property used by
such Person and encumbered by a Synthetic Lease with such Person as lessee,
excluding any portion of such amount representing accrued interest, transfer
taxes or other ancillary items, (vi) obligations of such Person under any
Financing Transaction, (vii) indebtedness (other than that described in CLAUSES
(i) through (iv), (viii), (ix) and (x) of this definition) incurred after July
31, 2002 of the Subsidiaries of such Person, and indebtedness (other than that
described in CLAUSES (i) through (iv), (viii), (ix) and (x) of this definition)
incurred after July 31, 2002 of any other entity that has been created or
utilized, directly or indirectly, for financing purposes of such Person or any
of its Subsidiaries, (viii) obligations of such Person under guaranties in
respect of, and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of
indebtedness or obligations of others of the kinds referred to in CLAUSES (i)
through (vii) of this definition, (ix) indebtedness or obligations of others of
the kinds referred to in CLAUSES (i) through (viii) of this definition secured
by any Lien on or in respect of any property of such Person and (x) any
Attributable Obligations of such Person; provided, however, that Debt shall not
include (v) any obligation of the Company or its Subsidiaries in respect of the
WCG Note Trust Bonds; (w) any obligations of the Company in respect of the
FELINE PACS; (x) Non-Recourse Debt; (y) Performance Guaranties, (z) monetary
obligations or guaranties of monetary obligations of Persons as lessee under
leases (other than, to the extent provided herein above, Synthetic Leases) that
are, in accordance with generally accepted accounting principles, recorded as
operating leases and (aa) guarantees by such Person of obligations of others
which are not obligations described in CLAUSES (i) through (x) of this
definition, and provided further that where any such indebtedness or obligation
of such Person is made jointly, or jointly and severally, with any third party
or parties other than any Subsidiary of such Person, the amount thereof for the
purpose of this definition only shall be the pro rata portion thereof payable by
such Person, so long as such third party or parties have not defaulted on its or
their joint and several portions thereof and can reasonably be expected to
perform its or their obligations thereunder. For the avoidance of doubt, "DEBT"
shall not include the Letters of Credit.



                                       8              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         "DEEPWATER ASSETS" shall have the meaning given such term in Item 7 of
Schedule V hereto.

         "DEEPWATER JV" means any Person to whom any Deepwater Assets have been
transferred in connection with the formation of such Person and in which the
Company or any of its Subsidiaries has retained an Equity Interest.

         "DEEPWATER TRANSACTIONS" means, collectively, the transactions
consummated in connection with (i) that certain Second Amended and Restated
Participation Agreement dated January 28, 2002 by and among Williams Field
Services - Gulf Coast Company, L.P., as Lessee, Williams Field Services Company,
as Construction Agent, the Company, as Guarantor, Wells Fargo Bank Northwest,
National Association, (fka First Security Bank, National Association), as
Certificate Trustee, Wells Fargo Bank Nevada, N.A., (successor to First Security
Trust Company of Nevada), as Collateral Agent, the Certificate Holders, Hatteras
Funding Corporation, as CP Lender, the Facility Lenders, Bank of America,
National Association, as Administrative Agent and Administrator, Banc Of America
Facilities Leasing, L.L.C., as Arranger, Bank of Nova Scotia, as Syndication
Agent, and Credit Agricole Indosuez, as Documentation Agent and/or (ii) that
certain Second Amended and Restated Participation Agreement dated January 28,
2002 by and among Williams Oil Gathering, L.L.C., as Lessee, Williams Field
Services Company, as Construction Agent, the Company, as Guarantor, Wells Fargo
Bank Northwest, National Association, (fka First Security Bank, National
Association), as Certificate Trustee, Wells Fargo Bank Nevada, N.A., (successor
to First Security Trust Company of Nevada), as Collateral Agent, the Certificate
Holders, Hatteras Funding Corporation, as CP Lender, the Facility Lenders, Bank
of America, National Association, as Administrative Agent and Administrator,
Banc Of America Facilities Leasing, L.L.C., as Arranger, Bank of Nova Scotia, as
Syndication Agent, and Credit Agricole Indosuez, as Documentation Agent.

         "DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent
transfer or conveyance, suspension of payments or similar Laws from time to time
in effect affecting the Rights of creditors generally.

         "DEFAULT" is defined in SECTION 9.

         "DEFAULT RATE" means a per annum rate of interest equal from day to day
to the lesser of (a) the sum of the Base Rate plus the Applicable Margin for
Base Rate Borrowings plus 2% and (b) the Maximum Rate.

         "DESIGNATED LENDER" means a special purpose corporation that is
identified as such on the signature pages hereto next to the caption "Designated
Lender" as well as each special purpose corporation that (i) shall have become a
party to this Agreement pursuant to SECTION 12.13(f), and (ii) is not otherwise
a Lender.

         "DESIGNATED LENDER NOTE" means a promissory note of the Company,
substantially in the form of EXHIBIT A hereto, evidencing the obligation of the
Company, and "DESIGNATED LENDER NOTES" means any and all such promissory notes
issued hereunder.

         "DESIGNATING LENDER" shall mean each Lender that is identified as such
on the signature pages hereto next to the caption "Designating Lender" and
immediately below the signature of its Designated Lender as well as each Lender
that shall designate a Designated Lender pursuant to SECTION 12.13(f) hereof.

         "DESIGNATION AGREEMENT" means a designation agreement in substantially
the form of EXHIBIT E attached hereto, entered into by a Lender and a Designated
Lender and accepted by the Company and the Administrative Agent.



                                       9              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         "DESIGNATED MINORITY INTERESTS" has the meaning specified in the
definition of "Consolidated Net Worth" herein.

         "DETERMINING LENDERS" means for all purposes under the Loan Papers,
those Lenders who collectively hold at least 51% of the Principal Debt.

         "DISTRIBUTION" for any Person means, with respect to any shares of any
capital stock or other equity securities issued by such Person, (a) the
retirement, redemption, purchase, or other acquisition for value of any such
securities, (b) the declaration or payment of any dividend on or with respect to
any such securities, and (c) any other payment by such Person with respect to
such securities.

         "DOCUMENTATION AGENT" means The Bank of Nova Scotia and its permitted
successors or assigns as "DOCUMENTATION AGENT" under this Agreement.

         "DOLLARS" and the symbol $ shall mean lawful money of the United States
of America.

         "EDGAR" means "Electronic Data Gathering, Analysis and Retrieval"
system, a database maintained by the Securities and Exchange Commission
containing electronic filings of issuers of certain securities.

         "EL FURRIAL" means WilPro Energy Services (El Furrial) Limited, a
Cayman Islands corporation.

         "ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a Lender;
and (c) any other Person approved by Administrative Agent (which approval will
not be unreasonably withheld or delayed by Administrative Agent) and, unless a
Default has occurred and is continuing at the time any assignment is effected in
accordance with SECTION 12.13, the Company (such approval not to be unreasonably
withheld or delayed by the Company and such approval to be deemed given by the
Company if no objection is received by the assigning Lender and the
Administrative Agent from the Company within five Business Days after notice of
such proposed assignment has been provided by the assigning Lender to the
Company); provided, however, that neither the Company nor any Affiliate of the
Company shall qualify as an Eligible Assignee.

         "EMT" means Williams Energy Marketing & Trading Company.

         "ENVIRONMENT" shall have the meaning set forth in 42 U.S.C. Section
9601(8) or any successor statute, and "Environmental" shall mean pertaining or
related to the Environment.

         "ENVIRONMENTAL PERMITS" mean any and all material permits, licenses,
registrations, exemptions and any other authorization required under any
Environmental Protection Statutes.

         "ENVIRONMENTAL PROTECTION STATUTE" means any United States local, state
or federal, or any foreign, law, statute, regulation, order, consent decree or
other agreement or Governmental Requirement arising from or in connection with
or relating to the protection or regulation of the Environment, including,
without limitation, those laws, statutes, regulations, orders, decrees,
agreements and other Governmental Requirements relating to the disposal,
cleanup, production, storing, refining, handling, transferring, processing or
transporting of Hazardous Waste, Hazardous Substances or any pollutant or
contaminant, wherever located.

         "EQUITY INTERESTS" means any capital stock, partnership, joint venture,
member or limited liability or unlimited liability company interest, beneficial
interest in a trust or similar entity or other equity interest or investment of
whatever nature.



                                      10              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT


<PAGE>

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and rulings promulgated
thereunder from time to time.

         "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which is a member of a group of which the Company is a member and
which is under common control within the meaning of the regulations under
Section 414 of the Code.

         "EURODOLLAR RATE" means, for any Eurodollar Rate Borrowing for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Dow Jones Markets Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "Eurodollar Rate" shall mean,
for any Eurodollar Rate Borrowing for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/100 of 1%).

         "EURODOLLAR RATE BORROWING" means a Borrowing bearing interest at the
sum of the Adjusted Eurodollar Rate plus the Applicable Margin for Eurodollar
Rate Borrowings.

         "EXHIBIT" means an exhibit to this Agreement unless otherwise
specified.

         "EXISTING LOAN AGREEMENT" has the meaning specified in the Recitals of
this Agreement.

         "FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined (which
determination shall be conclusive and binding, absent manifest error) by
Administrative Agent to be equal to the weighted average of the rates on
overnight Federal funds transactions with member banks of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if no such rate
is so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate charged to the Administrative Agent (in its
individual capacity) on such day on such transactions as determined by the
Administrative Agent (which determination shall be conclusive and binding,
absent manifest error).

         "FELINE PACS" means those certain units, as described in the Company's
prospectus supplement dated January 7, 2002, issued by the Company in January,
2002 in an aggregate face amount of $1,100,000,000.

         "FINANCING TRANSACTION" means, with respect to any Person, any
individual or group of related Persons (i) prepaid forward sales of oil, gas,
minerals or other Assets by such Person, (ii) interest rate, currency, commodity
or other swaps, collars, caps, options or other derivatives or (iii) sales or
transfers of Assets, the primary effect of which or an important purpose of
which is to receive money or credit in advance coupled with an obligation to
repay or perform in the future to effect repayment thereof, including any
contract monetization or production payment. Notwithstanding the foregoing, the
following transactions, if entered into in the ordinary course of business by
the Company or any of its affiliates and otherwise permitted hereunder, shall be
deemed not to be Financing Transactions: (a) sales or exchanges of property
fully



                                      11              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

delivered within 90 days of receipt of the first payment by a counterparty
therefor, (b) interest rate, currency, commodity or other swaps, collars, caps,
options or other derivatives (including prepayment of forward sales of property
to a counterparty of the Company or any of its affiliates to hedge against risks
in the ordinary course of business, provided that the forward delivery
obligation with respect to the property sold must be fully performed within 120
days), and (c) "riskless" forward sales or exchanges of property whereby a third
party guarantees the performance obligations of the Company or any of its
affiliates to deliver such property without subrogation or other recourse
against the Company or any of its affiliates by any party to the transaction.
The term "contract monetization" as used in this definition means the
acceleration of cash flows a contract party expects to receive from such
contract pursuant to which the contract party retains a significant ongoing
obligation to perform, but shall in any event exclude transactions commonly
referred to as securitizations. The term "production payment" as used in this
definition means a limited-term non-cost bearing right to receive produced
hydrocarbons or the proceeds therefrom satisfiable in cash or in kind up to an
aggregate defined amount of cash and/or hydrocarbons.

         "FISCAL QUARTER" means any quarter of a Fiscal Year.

         "FISCAL YEAR" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., the "2002 Fiscal Year") refer to the Fiscal Year
ending on December 31 of such calendar year.

         "FITCH" means Fitch, Inc.

         "GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board which are applicable from time to time.

         "GOVERNMENTAL AUTHORITY" means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other Person exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

         "GOVERNMENTAL REQUIREMENTS" means all judgments, orders, writs,
injunctions, decrees, awards, laws, ordinances, statutes, regulations, rules,
franchises, permits, certificates, licenses, authorizations and the like and any
other requirements of any government or any commission, board, court, agency,
instrumentality or political subdivision thereof.

         "GUARANTORS" means, collectively, Williams Gas Pipeline Company,
L.L.C., a Delaware limited liability company, and Williams Production Holdings
L.L.C., a Delaware limited liability company.

         "HAZARDOUS SUBSTANCE" shall have the meaning set forth in 42 U.S.C.
Section 9601(14) and shall also include each other substance considered to be a
hazardous substance under any Environmental Protection Statute.

         "HAZARDOUS WASTE" shall have the meaning set forth in 42 U.S.C. Section
6903(5) and shall also include each other substance considered to be a hazardous
waste under any Environmental Protection Statute (including, without limitation,
40 C.F.R. Section 261.3).

         "HEDGE AGREEMENTS" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other hedging obligations.



                                      12              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         "HOLDINGS GUARANTY" means that certain Subordinated Guaranty dated as
of July 31, 2002 executed by RMT LLC in favor of the "Financial Institutions"
described therein, as amended, supplemented or modified from time to time.

         "HYDROCARBONS" (whether or not capitalized) means oil, gas, casinghead
gas, condensate, distillate, and liquid hydrocarbons.

         "INSUFFICIENCY" means with respect to any Plan, the amount, if any, by
which the present value of the vested benefits under such Plan exceeds the fair
market value of the assets of such Plan allocable to such benefits.

         "INTEREST EXPENSE" means, for any period, the gross interest expense
(determined in accordance with generally accepted accounting principles) of the
Company and its Consolidated Subsidiaries accrued for such period, including
that attributable to the capitalized amount of obligations owing under Capital
Leases, all debt discount amortized in such period and all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, net of interest income (determined in accordance
with generally accepted accounting principles) of the Company and its
Consolidated Subsidiaries, but excluding such interest expense, debt discount,
commissions, discounts and other fees and charges and interest income to the
extent attributable to the Non-Recourse Debt of Project Financing Subsidiaries;
provided that, interest expense incurred in connection with the WCG Note Trust
Bonds shall be excluded from this definition.

         "INTEREST PERIOD" is determined in accordance with SECTION 3.9.

         "INVESTMENT" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests or Debt or the Assets
comprising a division or business unit or a substantial part or all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation and any arrangement pursuant to
which the investor incurs Debt of the types referred to in CLAUSE (VIII) or (IX)
of the definition of "Debt" in respect of such Person.

         "L/C AGREEMENT" means that certain Amended and Restated Credit
Agreement dated as of October 31, 2002 among the Company, as "Borrower", the
"Agent," "Collateral Agent," "Syndication Agent," "Issuing Banks," the
"Arranger," and those certain financial institutions party thereto as "Banks"
(as the same may from time to time be further amended, supplemented, restated or
otherwise modified).

         "L/C COLLATERAL DOCUMENTS" means the "Security Documents" as defined in
the L/C Agreement.

         "L/C FACILITY" means the letter of credit facility under the L/C
Agreement.

         "LEGACY L/CS" means those outstanding letters of credit as of July 31,
2002 as set forth on SCHEDULE XII of the Primary Credit Agreement, to the extent
such Letters of Credit have not been fully Cash Collateralized.

         "LAWS" means all applicable statutes, laws, treaties, ordinances,
tariff requirements, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions, or interpretations of any Governmental Authority.

         "LENDERS" means, on any date of determination, (a) the financial
institutions named on SCHEDULE 2.1 (as the same may be amended from time to time
by Administrative Agent to reflect the assignments made in accordance with
SECTION 12.13(c) of this Agreement), and subject to the terms and conditions of
this Agreement, their respective successors and assigns, but not any Participant
who is not otherwise a party to this



                                      13              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

Agreement, and (b) the Designated Lenders, if any; provided, however, that the
term "Lender" shall exclude each Designated Lender when used in reference to a
Borrowing (except to the extent a Designated Lender is the obligee of a
Borrowing actually funded by it pursuant to SECTION 2.1(b) hereof), or terms
relating to the Borrowings (except as noted above).

         "LETTERS OF CREDIT" has the meaning specified in SECTION 1.1 of the L/C
Agreement.

         "LETTER OF CREDIT COMMITMENT" has the meaning specified in SECTION 1.1
of the L/C Agreement.

         "LETTER OF CREDIT DOCUMENTS" means, with respect to any Letter of
Credit, collectively, any application therefor and any other agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to such
Letter of Credit or (b) any collateral security for any of such obligations,
each as the same may be modified and supplemented and in effect from time to
time.

         "LIENS" means a mortgage, pledge, lien, security interest or other
charge or encumbrance, or any other analogous type of preferential arrangement
to secure or provide for the payment of any Debt, trade payable, obligation or
other liability of any Person, whether arising by contract, operation of law or
otherwise (including, without limitation, the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement).

         "LIQUIDITY BANK" means for any Designated Lender, at any date of
determination, the collective reference to the financial institutions which at
such date are providing liquidity or credit support facilities to or for the
account of such Designated Lender to fund such Designated Lender's obligations
hereunder or to support the securities, if any, issued by such Designated Lender
to fund such obligations.

         "LITIGATION" means any action by or before any Governmental Authority.

         "LLC GUARANTY" means that certain Guaranty dated as of July 31, 2002
executed by Williams Gas Pipeline Company, L.L.C. in favor of the "Financial
Institutions" described therein, as the same may be amended, modified or
supplemented from time to time.

         "LOAN PAPERS" means (a) this Agreement, certificates delivered pursuant
to this Agreement, and Exhibits and Schedules hereto, (b) the Holdings Guaranty,
the LLC Guaranty, and all other agreements, documents, or instruments in favor
of Agents or Lenders (or Administrative Agent on behalf of Lenders) delivered
pursuant to this Agreement or otherwise delivered in connection with all or any
part of the Obligation, and (c) all renewals, extensions, or restatements of, or
amendments or supplements to, any of the foregoing.

         "MAJOR SUBSIDIARY" means any Subsidiary of the Company with Assets
having a book value of $1,000,000,000 or more.

         "MAPL" means Mid-America Pipeline Company, LLC., a Delaware limited
liability company.

         "MAPL ASSET DISPOSITION" means the sale, transfer or other distribution
of the Equity Interests in or Assets of MAPL and Mapletree, LLC.

         "MATERIAL SUBSIDIARY" means (i) each Major Subsidiary and each other
Subsidiary of the Company (other than a Project Financing Subsidiary) that
itself (on an unconsolidated, stand alone basis) owns in excess



                                      14              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

of 5% of the book value of the Consolidated Assets of the Company and its
Consolidated Subsidiaries, (ii) each of TGPL, TGT and NWP and (iii) each
Subsidiary of the Company that owns any direct or indirect interest in TGPL, TGT
and NWP.

         "MATURITY DATE" means April 7, 2003.

         "MAXIMUM AMOUNT" and "MAXIMUM RATE" respectively mean, for each Lender,
the maximum non-usurious amount and the maximum non-usurious rate of interest
which, under applicable Law, such Lender is permitted to contract for, charge,
take, reserve, or receive on the Obligation.

         "MIDSTREAM ASSET MLP" means one or more master limited partnerships
included in the Consolidated financial statements of the Company to which the
Company has transferred or shall transfer certain assets relating to the
Midstream Business as well as certain marine and inland terminals and related
pipeline systems, including MLP.

         "MIDSTREAM ASSETS" means all Assets now owned or hereafter acquired by
the Company or any of its Subsidiaries, which are either individually, or in
conjunction with other Midstream Assets, necessary for the conduct of the
Midstream Business by the Company and its Subsidiaries, including the Refineries
in Alaska and Tennessee, except that "MIDSTREAM ASSETS" shall not include (a)
the assets being part of either of the MAPL Asset Disposition or Seminole Asset
Disposition unless the MAPL Disposition or Seminole Asset Disposition, as
applicable, shall not have occurred on or prior to the date that is 60 days from
July 31, 2002, and (b) any Assets of NewGP or any of its Subsidiaries.

         "MIDSTREAM BUSINESS" means the gathering, marketing, dehydrating,
treating, processing, fractionating, refining, storing, selling and transporting
of Hydrocarbons and Refined Hydrocarbons in the United States, and any business
relating thereto; provided that "Midstream Business" shall not include (i)
operations that are directly related to the exploration and production of
Hydrocarbons, (ii) the interstate transportation and storage of natural gas and
associated liquid hydrocarbons under the jurisdiction of the Natural Gas Act,
and (iii) the transportation and storage of natural gas and associated liquid
hydrocarbons through the Cardinal Pipeline System.

         "MIDSTREAM GUARANTY" means that certain guaranty executed by those
certain guarantors in substantially the form of EXHIBIT H to the L/C Agreement,
as amended, supplemented or modified from time to time.

         "MLP" means Williams Energy Partners L.P., a Delaware limited
partnership.

         "MOODY'S" means Moody's Investors Service, Inc. or any successor
thereto.

         "MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Company or any ERISA Affiliate of the Company
is making or accruing an obligation to make contributions, or has within any of
the preceding five (5) years made or accrued an obligation to make
contributions.

         "MULTIPLE EMPLOYER PLAN" means an employee benefit plan as defined in
Section 3(2) of ERISA, other than a Multiemployer Plan, subject to Title IV of
ERISA to which the Company or any ERISA Affiliate of any Borrower, and one or
more employers other than the Company or an ERISA Affiliate of the Company, is
making or accruing an obligation to make contributions or, in the event that any
such plan has been terminated, to which the Company or any ERISA Affiliate of
the Company made or accrued an obligation to make contributions during any of
the five plan years preceding the date of termination of such plan.



                                      15              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT


<PAGE>

         "NATURAL GAS ACT" shall mean the Natural Gas Act, 15 U.S.C Sections
717(a)-717(w).

         "NEBRASKA ENERGY" means Nebraska Energy, L.L.C., a Kansas limited
liability company.

         "NET CASH PROCEEDS" means, with respect to any sale, transfer or other
disposition of any asset or the sale or issuance of any equity interests
(including, without limitation, any capital contribution) by any Person, the
gross cash proceeds received (including any cash received by way of deferred
payment pursuant to a promissory note, receivable or otherwise, but only as and
when such cash is received) by or on behalf of such Person in connection with
such transaction net of only (a) reasonable transaction costs, including
customary and reasonable brokerage commissions, underwriting fees and discounts,
legal fees, fees paid to accountants and financial advisors, finder's fees and
other similar fees and commissions, (b) the amount of taxes payable in
connection with or as a result of such transaction, (c) the amount of any Debt
by the terms of the agreement or instrument governing such Debt (including,
without limitation, the Barrett Loan Agreement and the WECI Note), that is
required to be repaid or cash collateralized in the case of letters of credit,
upon such disposition, including any premium, make-whole or breakage amount
related thereto, (d) payments of unassumed liabilities relating to the assets
sold at the time of, or within 60 days after, the date of such sale; provided
that such gross proceeds shall not include any portion of such gross cash
proceeds which the Company determines in good faith should be reserved for
post-closing adjustments (including indemnification payments, tax expenses and
purchase price adjustments, to the extent the Person delivers to the
Administrative Agent a certificate signed by an officer of such Person as to
such determination), it being understood and agreed that on the day that all
such post-closing adjustments have been determined (which shall not be later
than 120 days following the date of the respective disposition; and provided,
further that such 120-day period shall be extended to the extent any amount of
such proceeds is subject to a good faith dispute or claim), the amount (if any)
by which the reserved amount in respect of such sale or disposition exceeds the
actual post-closing adjustments payable by such Person shall constitute Net Cash
Proceeds on such date received by such Person from such sale, lease, transfer or
other disposition.

         "NET DEBT" means as of any date of determination, the excess of (x) the
aggregate amount of all Debt of the Company and its Subsidiaries on a
Consolidated basis, excluding Non-Recourse Debt, over (y) the sum of the Cash
Holdings of the Company and its Subsidiaries on a Consolidated basis.

         "NET WORTH" of any Person means, as of any date of determination, the
excess of total assets of such Person plus all non-cash losses resulting from
the write-down or disposition of the Trading Book over total liabilities of such
Person, total assets and total liabilities each to be determined in accordance
with generally accepted accounting principles; provided, however, that for
purposes of calculating Net Worth, total liabilities shall not include any
obligations of the Company in respect of the FELINE PACS.

         "NEWGP" means a Business Entity organized under Delaware law, which may
be formed before, on or after the date hereof, and which (i) will be at the time
of formation a Wholly-Owned Subsidiary of the Company, and (ii) will be formed
for the sole purpose of acquiring certain Equity Interests in MLP currently held
by Williams GP, LLC and acting as the general partner of MLP.

         "NON-RECOURSE DEBT" means (i) any Debt incurred by any Project
Financing Subsidiary to finance the acquisition (other than the acquisition from
the Company or any Subsidiary of the Company that is not a Project Financing
Subsidiary), improvement, installation, design, engineering, construction,
development, completion, maintenance or operation of, or otherwise to pay costs
and expenses relating to or providing financing for, a project listed on
SCHEDULE IV to the Primary Credit Agreement or any new project commenced or
acquired after July 31, 2002, which Debt does not provide for recourse against
the Company or any Subsidiary of the Company (other than a Project Financing
Subsidiary and such recourse as exists under a



                                      16              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

Performance Guaranty) or any property or asset of the Company or any Subsidiary
of the Company (other than Equity Interests in, or the property or assets of a
Project Financing Subsidiary) and (ii) any refinancing of such Debt that does
not increase the outstanding principal amount thereof at the time of the
refinancing or increase the property subject to any Lien securing such Debt or
otherwise add additional security or support for such Debt.

         "NOTES" means, at the time of any determination thereof, all
outstanding and unpaid Term Notes.

         "NOTICE OF BORROWING" is defined in SECTION 2.3(a).

         "NOTICE OF CONVERSION" is defined in SECTION 3.10.

         "NWP" means Northwest Pipeline Corporation, a Delaware corporation.

         "OBLIGATION" means all present and future indebtedness, liabilities,
and obligations, and all renewals and extensions thereof, or any part thereof,
now or hereafter owed to Administrative Agent, any other Agent, or any Lender
arising from, by virtue of, or pursuant to any Loan Paper, together with all
interest accruing thereon, fees, costs, and reasonable expenses (including,
without limitation, all reasonable attorneys' fees and expenses incurred in the
enforcement or collection thereof) payable under the Loan Papers.

         "OTHER TAXES" shall have the meaning assigned to it in SECTION 4.6(b)
hereof.

         "PARTICIPANT" is defined in SECTION 12.13(e).

         "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereof, established pursuant to ERISA.

         "PERFORMANCE GUARANTY" means any guaranty issued in connection with any
Non-Recourse Debt that (i) if secured, is secured only by assets of or Equity
Interests in a Project Financing Subsidiary, and (ii) guarantees to the provider
of such Non-Recourse Debt or any other Person of the (a) performance of the
improvement, installation, design, engineering, construction, acquisition,
development, completion, maintenance or operation of, or otherwise affects any
such act in respect of, all or any portion of the project that is financed by
such Non-Recourse Debt, (b) completion of the minimum agreed equity
contributions to the relevant Project Finance Subsidiary, or (c) performance by
a Project Financing Subsidiary of obligations to Persons other than the provider
of such Non-Recourse Debt.

         "PERMITTED DISPOSITIONS" means (a) the disposition of the assets or
Persons set forth on SCHEDULE V or the assets currently owned by such Persons
and (b) the TWC Asset Dispositions.

         "PERMITTED LIENS" means Liens specifically described on SCHEDULE I.

         "PERMITTED REFINANCING DEBT" has the meaning assigned thereto on
SCHEDULE I.

         "PERSON" means an individual, sole proprietorship, partnership, joint
venture, association, trust, estate, business trust, corporation, not-for-profit
corporation, sovereign government or agency, instrumentality, or political
subdivision thereof, or any similar Business Entity or organization.

         "PIGAP II" means WilPro Energy Services (PIGAP II) Limited, a Cayman
Islands corporation.



                                      17              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         "PLAN" means an employee pension benefit plan (other than a
Multiemployer Plan) as defined in Section 3(2) of ERISA currently maintained by,
or, in the event such plan has terminated, to which contributions have been made
or an obligation to make contributions has accrued, during any of the five (5)
plan years preceding the date of termination of such plan by the Company or any
ERISA Affiliate for employees of the Company or any such ERISA Affiliate and
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code.

         "POWERTEL" means PowerTel Limited, an Australian corporation.

         "POTENTIAL DEFAULT" means the occurrence of any event or existence of
any circumstance which, with the giving of notice or lapse of time or both,
would become a Default.

         "PLOWSHARE TRANSACTION" means the retirement of the Interests of the
Class B Preferred Member in PPH (each as defined in the PPH Sponsor Agreement)
held by Plowshare Investors LLC, a Delaware limited liability company, by PPH.

         "PPH COMPANY AGREEMENT" means the Amended and Restated Limited
Liability Company Agreement of Piceance Production Holdings LLC, dated as of
December 31, 2001, by and among Williams Production RMT Company, a Delaware
corporation, Bison Royalty LLC, a Delaware limited liability company, Plowshare
Investors LLC, a Delaware limited liability company, and Piceance Production
Holdings LLC, a Delaware limited liability company.

         "PPH SPONSOR AGREEMENT" means the PPH Sponsor Agreement, dated as of
December 31, 2001, by the Company in favor of Piceance Production Holdings LLC,
Plowshare Investors LLC and the other indemnified parties named therein (as the
same may from time to time be amended, modified or supplemented).

         "PRAIRIE WOLF FACILITY" means the financing provided in connection with
that certain $611,788,868 Joint Venture Sponsor Agreement dated as of December
28, 2000 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "SPONSOR AGREEMENT"), among the Company, as Sponsor, and
Williams Field Services Company, in favor of Prairie Wolf Investors, Arctic Fox
Assets, L.L.C., Williams Energy (Canada), Inc. and the other Indemnified Persons
(as defined in the Sponsor Agreement) listed therein.

         "PRAIRIE WOLF PURCHASE OPTION AGREEMENT" means the Purchase Option
Agreement, dated as of December 28, 2000, among the Company, Prairie Wolf
Investors, L.L.C., Citicorp North America, Inc., Ambac Private Holdings, L.L.C.,
Westboro Properties L.L.C., Stonehurst Capital L.L.C., BSCS XXXIX, Inc., Snow
Goose Associates, L.L.C. and Arctic Fox Assets, L.L.C.

         "PRAIRIE WOLF TRANSACTION" means the purchase of the Investor
Membership Interest (as defined in the Prairie Wolf Purchase Option Agreement)
pursuant to the Prairie Wolf Purchase Option Agreement.

         "PRIMARY CREDIT AGREEMENT" means the First Amended and Restated Credit
Agreement dated as of October 31, 2002, by and among the Company and the other
borrowers named therein, as borrowers, the banks named therein, as lenders, the
banks named therein, as co-syndication agents and documentation agent, Citicorp
USA, Inc., as agent, and Salomon Smith Barney Inc. as arranger, as the same may
be from time to time modified or amended.

         "PRIME RATE" means the per annum rate of interest established from time
to time by Credit Lyonnais New York Branch, as its general reference rate of
interest for short-term commercial loans in Dollars to



                                      18              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

domestic borrowers, which rate may not be the lowest rate of interest charged by
Credit Lyonnais New York Branch on similar loans.

         "PRINCIPAL DEBT" means, on any date of determination, the aggregate
unpaid principal balance of all Borrowings under the Term Facility.

         "PRINCIPAL SUBSIDIARIES" means a collective reference to NWP, TGPL,
TGT, and WPC (each a "PRINCIPAL SUBSIDIARY").

         "PROGENY FACILITIES" means the financing facilities specifically
described on SCHEDULE III hereto.

         "PROJECT FINANCING SUBSIDIARIES" means any non-material Subsidiary of
the Company whose principal purpose is to incur Non-Recourse Debt and/or
construct, lease, own or operate the assets financed thereby, or to become a
direct or indirect partner, member or other equity participant or owner in a
Business Entity so created, and substantially all the assets of which Subsidiary
or Business Entity are limited to (x) those assets being financed (or to be
financed), or the operation of which is being financed (or to be financed), in
whole or in part by Non-Recourse Debt, or (y) Equity Interests in, or Debt or
other obligations of, one or more other such Subsidiaries or Business Entities,
or (z) Debt or other obligations of the Company or any of its Subsidiaries or
other Persons. For purposes of this definition, a "NON-MATERIAL SUBSIDIARY"
shall mean any Consolidated Subsidiary of the Company which, as of the date of
the most recent Consolidated balance sheet of the Company delivered pursuant to
SECTION 8.2(b) or 8.2(c), has total assets which account for less than five
percent (5%) of the total Consolidated assets of the Company and its
Consolidated Subsidiaries, as shown on such Consolidated balance sheet;
provided, that the aggregate assets of the non-material Subsidiaries shall not
comprise more than ten percent (10%) of the total Consolidated assets of the
Company and its Consolidated Subsidiaries, as shown on such Consolidated balance
sheet.

         "PROPERTY" has the meaning specified in the definition of "Assets".

         "PRO RATA or PRO RATA PART" means on any date of determination for any
Lender, the proportion that the sum of the Principal Debt owed to such Lender
bears to the sum of the Principal Debt.

         "PUBLIC FILINGS" means the Company's (i) annual report on Form 10-K/A
for the year ended December 31, 2001, (ii) quarterly report on Form 10-Q for the
quarter ended March 31, 2002, (iii) quarterly report on Form 10-Q for the
quarter ended June 30, 2002, and (iv) each other quarterly and annual and other
reports filed with the Securities Exchange Commission from time to time.

         "PURCHASE CARD AGREEMENT" means that certain Purchase Card Agreement
among the Company and Citicorp USA, Inc. dated January 29, 2002.

         "REFINED HYDROCARBONS" means all products refined, separated,
fractionated, settled, and dehydrated from Hydrocarbons and all products derived
therefrom, including, without limitation, kerosene, liquefied petroleum gas,
refined lubricating oils, diesel fuels, drip gasoline, natural gasoline, helium,
sulfur and all other minerals.

          "REFINERIES" means the equity interest in and assets owned by the
Midstream Business of the Company which produces Refined Hydrocarbons and is
owned collectively by the following Subsidiaries: Williams Express, Inc., a
Delaware corporation, Williams Alaska Pipeline Company, LLC, a Delaware limited
liability company, Williams Alaska Petroleum, Inc., an Alaska corporation,
Williams Alaska Air Cargo Properties, LLC, an Alaska limited liability company,
Williams Lynxs Alaska CargoPort, LLC, an Alaska limited liability company,
Williams Express, Inc., an Alaska corporation, Williams Petroleum Pipeline



                                      19              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

Systems, Inc., a Delaware corporation, Williams Refining & Marketing, LLC, a
Delaware limited liability company, Williams Olefins, LLC, a Delaware limited
liability company, Williams Olefins Feedstock Pipelines, LLC, a Delaware limited
liability company, Williams Memphis Terminal, Inc., a Delaware corporation,
Williams Generating Memphis, LLC, a Delaware limited liability company, EMT
(only with respect to its interest in a gas turbine, electric generating
facility in Memphis, Tennessee), and Memphis Generation, L.L.C., a Delaware
limited liability company.

         "REGISTER" is defined in SECTION 12.13(c).

         "REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as amended.

         "REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as amended.

         "RELATED PARTY" of any Person means any corporation, partnership, joint
venture or other entity of which more than 10% of the outstanding capital stock
or other equity interests having ordinary voting power to elect a majority of
the board of directors of such corporation, partnership, joint venture or other
entity or others performing similar functions (irrespective of whether or not at
the time capital stock or other equity interests of any other class or classes
of such corporation, partnership, joint venture or other entity shall or might
have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person or which owns at the time directly
or indirectly more than 10% of the outstanding capital stock or other equity
interests having ordinary voting power to elect a majority of the board of
directors of such Person or others performing similar functions (irrespective of
whether or not at the time capital stock or other equity interests of any other
class or classes of such corporation, partnership, joint venture or other entity
shall or might have voting power upon the occurrence of any contingency);
provided, however, that (i) neither the Company nor any Subsidiary of the
Company shall be considered to be a Related Party of the Company or any
Subsidiary of the Company, and (ii) neither NewGP nor any Subsidiary of NewGP
shall be considered to be a "Related Party" of NewGP or any Subsidiary of NewGP.

         "REPRESENTATIVES" means representatives, officers, directors,
employees, attorneys, and agents.

         "RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Eurodollar Rate Borrowings, "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
member banks with respect to (a) any category of liabilities which includes
deposits by reference to which the Adjusted Eurodollar Rate is to be determined,
or (b) any category of extensions of credit or other assets which include
Eurodollar Rate Borrowings. The Adjusted Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the Reserve
Requirement.

         "RESPONSIBLE OFFICER" means the chairman, president, chief executive
officer, chief financial officer, senior vice president, or treasurer of the
Company, or any other officer designated from time to time by the Board of
Directors of the Company, which designated officer is acceptable to
Administrative Agent.

         "RIGHTS" means rights, remedies, powers, privileges, and benefits.

         "RMT" means Williams Production RMT Company.



                                      20              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         "RMT ASSET DISPOSITION" means the sale, transfer, lease, distribution
or other disposition of the RMT Equity Interests or the assets of RMT LLC, RMT
or its Subsidiaries in accordance with the provisions of the Barrett Loan
Agreement.

         "RMT EQUITY INTERESTS" means the Equity Interests in RMT and/or each of
its Subsidiaries.

         "RMT LLC" means Williams Production Holdings LLC.

         "S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc.

         "SALE AND LEASE-BACK TRANSACTION" of any Person means any arrangement
entered into by such Person or any Subsidiary of such Person, directly or
indirectly, whereby such Person or any Subsidiary of such Person shall sell or
transfer any property, whether now owned or hereafter acquired to any other
Person (a "Transferee"), and whereby such Person or any Subsidiary of such
Person shall then or thereafter rent or lease as lessee such property or any
part thereof or rent or lease as lessee from such Transferee or any other Person
other property which such Person or any Subsidiary of such Person intends to use
for substantially the same purpose or purposes as the property sold or
transferred.

         "SCHEDULE" means, unless specified otherwise, a schedule attached to
this Agreement, as the same may be supplemented and modified from time to time
in accordance with the terms of the Loan Papers.

         "SEMINOLE"  means Seminole Pipeline Company, a Delaware corporation.

         "SEMINOLE ASSET DISPOSITION" means the sale, transfer or other
distribution of all or substantially all of the Equity Interests in or assets of
Seminole and E-Oaktree, LLC.

        "SODA ASH" means Williams Soda Products Company and American Soda,
L.L.P.

         "SPECIFIED ESCROW ARRANGEMENTS" means (a) encumbrances arising under
the Pledge and Assignment Agreement for that certain Purchase Card Agreement, as
amended, supplemented, amended and restated or otherwise modified from time to
time, whereby the Company has requested the continued issuance of credit under
the Purchase Card Agreement; and (b) cash deposits at one or more financial
institutions for the purpose of funding any potential shortfall in the daily net
cash position of the Company or any of its Subsidiaries.

         "SUBORDINATED DEBT" means any Debt of the Company which is effectively
subordinated to the obligations of the Company hereunder.

         "SUBJECT SUBSIDIARIES" means all Subsidiaries of the Company other than
NewGP and its Subsidiaries.

         "SUBSIDIARY" of any Person means (i) any corporation, partnership,
joint venture or other entity of which more than 50% of the outstanding Equity
Interests having ordinary voting power to elect a majority of the board of
directors of such corporation, partnership, joint venture or other entity or
others performing similar functions (irrespective of whether or not at the time
Equity Interests of any other class or classes of such corporation, partnership,
joint venture or other entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person and (ii) any Person that is under the direct or indirect control of
such Person, by voting rights, contract or otherwise, and in accordance with
generally accepted accounting principles, is Consolidated with such Person in
its Consolidated financial statements; provided that, for greater certainty, (x)
MLP and its Subsidiaries (A) shall be considered



                                      21              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

Subsidiaries of NewGP, but (B) shall not otherwise be considered Subsidiaries of
the Company or its Subsidiaries, and (y) NewGP shall be considered a Subsidiary
of the Company.

         "SYNDICATION AGENT" means Commerzbank AG New York and Grand Cayman
Branches and its respective permitted successors or assigns as "SYNDICATION
AGENT" under this Agreement.

         "SYNTHETIC LEASE" means any lease (including leases that may be
terminated by the lessee at any time) of any property (whether real, personal or
mixed) (i) that is not a capital lease in accordance with generally accepted
accounting principles and (ii) in respect of which the lessee retains or obtains
ownership of the property so leased for federal income tax purposes, other than
any such lease under which such Person is the lessor.

         "TANGIBLE NET WORTH" of any Person means, as of any date of
determination, the excess of total assets of such Person over total liabilities
of such Person, total assets and total liabilities each to be determined in
accordance with GAAP, excluding, however, from the determination of total assets
(a) patents, patent applications, trademarks, copyrights and trade names, (b)
goodwill, organizational, experimental, research and development expense and
other like intangibles, (c) treasury stock, (d) monies set apart and held in a
sinking or other analogous fund established for the purchase, redemption or
other retirement of capital stock or Subordinated Debt, and (e) unamortized debt
discount and expense.

         "TAXES" means, for any Person, taxes, assessments, or other
governmental charges or levies of a similar nature imposed upon such Person, its
income, or any of its properties, franchises, or assets.

         "TERM FACILITY" means the credit facility described in and subject to
the limitations of this Agreement.

         "TERM NOTE" means a promissory note in substantially the form of
EXHIBIT A, and all renewals and extensions of all or any part thereof.

         "TERMINATION EVENT" means (a) a "reportable event", as such term is
described in Section 4043 of ERISA (other than a "reportable event" not subject
to the provision for thirty (30) day notice to the PBGC or a "reportable event"
as such term is described in Section 4043(c)(3) of ERISA) which might reasonably
be expected to result in a termination of, or the appointment of a trustee to
administer, a Plan, or which causes the Company, due to actions of the PBGC, to
be required to contribute at least $75,000,000 in excess of the contributions
which otherwise would have been made to fund a Plan based upon the contributions
recommended by such Plan's actuary), or (b) the withdrawal of the Company or any
ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was
a "substantial employer," as such term is defined in Section 4001(a)(2) of
ERISA, or the incurrence of liability by the Company or any ERISA Affiliate
under Section 4064 of ERISA upon the termination of a Multiple Employer Plan, or
(c) the distribution of a notice of intent to terminate a Plan pursuant to
Section 4041(a)(2) of ERISA or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate a Plan by the PBGC under Section 4042 of ERISA, or (e) any other
event or condition which might reasonably be expected to result in the
termination of, or the appointment of a trustee to administer, any Plan under
Section 4042 of ERISA.

         "TGPL" means Transcontinental Gas Pipe Line Corporation, a Delaware
corporation.

         "TGT" means Texas Gas Transmission Corporation, a Delaware corporation.



                                      22              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         "TRADING BOOK" means, for any Person, all mark to market daily and
forward traded transactions of such Person inclusive of structured portfolio
transactions consisting primarily of tolling and full requirements transactions.

         "TRAVELCENTERS" means Williams TravelCenters, Inc.

         "TWC ASSET DISPOSITIONS" means the sale by the Company or by any of its
Subsidiaries of (a) WPC, (b) MAPL Asset Disposition, (c) Seminole Asset
Disposition, (d) the Refineries, (e) Soda Ash, (f) TravelCenters, and (g)
Bio-Energy.

         "TWC ASSET DISPOSITION DOCUMENTS" means all material agreements
relating to the TWC Asset Dispositions.

         "TWC PREFERRED STOCK" means the shares of preferred stock of the
Company which may be perpetual preferred stock or mandatorily convertible into
shares of common stock of the Company.

         "TYPE" means any type of Borrowing determined with respect to the
interest option applicable thereto.

         "UBOC TURBINE FINANCING" means the transactions contemplated by (i) the
Turbine Financing and Agency Agreement, dated as of April 16, 2002, between
Union Bank of California, N.A., each of the other financial institutions party
thereto as a Lender or Certificate Holder, WEMT Statutory Trust 2002 and EMT
(the "TFA AGREEMENT") and (ii) the Operative Documents and the Lease (as such
terms are defined in the TFA Agreement).

         "WCG" means Williams Communications Group, Inc., a Delaware
corporation.

         "WCG NOTE" means that certain promissory note dated March 28, 2001
issued by WCG to WCG Note Trust, a Delaware business trust, in a principal
amount of $1,500,000,000 with a maturity date of March 31, 2008.

         "WCG NOTE TRUST BONDS" means those certain debt securities issued by
WCG Note Trust and WCG Note Corp. on March 28, 2001.

         "WCG REFINANCING TRANSACTION" means any transaction or series of
related transactions pursuant to which the Company or any Subsidiary of the
Company becomes directly and primarily liable to the holders of the WCG Senior
Notes for an aggregate amount not exceeding the outstanding principal of the WCG
Senior Notes, together with all accrued and unpaid interest thereon, any fees,
and any premiums or make-whole payments payable as a result of a prepayment or
early redemption of the WCG Senior Notes, including, without limitation, by
means of (i) any amendment to the transaction documents pursuant to which the
WCG Senior Notes were issued, (ii) an exchange offer or tender offer for the WCG
Senior Notes or the WCG Note in consideration for which the Company or any
Subsidiary of the Company issues debt securities of the Company or any
Subsidiary of the Company, (iii) any redemption or repurchase, in whole or in
part, of the WCG Senior Notes by the Company or any Subsidiary of the Company,
(iv) any exercise of the "Share Trust Release Option" as defined in the
transaction documents pursuant to which the WCG Senior Notes were issued, or (v)
the Company or any Subsidiary of the Company making any payments in respect of
the WCG Senior Notes or the WCG Note.

         "WCG SENIOR NOTES" means those certain 8.25% Senior Secured Notes due
2004 in an aggregate principal amount of $1,400,000,000 issued by the WCG Senior
Notes Issuer.



                                      23              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         "WCG SENIOR NOTES ISSUER" means, collectively, WCG Note Trust, a
Delaware business trust, and WCG Note Corp., Inc., a Delaware corporation.

         "WCG SUBSIDIARIES" means, collectively, WCG and any direct or indirect
Subsidiary of WCG.

         "WCG SYNTHETIC LEASE" means that certain Amended and Restated Lease
between State Street Bank and Trust Company of Connecticut, National
Association, as Lessor and Williams Communications, Inc., as Lessee, dated as of
September 2, 1998, as amended, which has been terminated and was fully repaid on
March 29, 2002.

         "WCG UNWIND TRANSACTION" means a transaction in which (i) the Company's
and/or its Subsidiaries' Sale Leaseback transactions dated as of September 13,
2001, with (x) WCG and its Subsidiary, Williams Technology Center, LLC ("WTC")
involving the Williams Technology Center and (y) WCG and its Subsidiary,
Williams Communications, LLC, involving corporate aircraft (collectively, the
"WCG SALE LEASEBACK"), are terminated, (ii) in exchange for such termination,
the Company receives a promissory note or notes payable by the reorganized WCG,
WTC and/or the other WCG Subsidiaries, individually or as co-makers, in an
aggregate principal amount of $175,000,000 or less, and (iii) consideration from
the Company and its Subsidiaries includes termination of the existing WCG Sale
Leaseback, and the transfer of the Equity Interests in Williams Aircraft
Leasing, LLC, but does not include any cash payment by the Company or any of its
Subsidiaries to WCG or WTC.

         "WECI NOTE" means that certain promissory note, dated as of December
28, 2000, issued by Williams Energy (Canada), Inc. in favor of the Registered
Holders (as defined therein), as amended by Prairie Wolf Investors, L.L.C.
Amendment No. 1, dated as of August 29, 2001, by Amendment No. 2 to Certain
Prairie Wolf Operative Documents, dated as of March 28, 2002, and by Amendment
No. 3 to Certain Operative Documents and Consents, dated as of October 31, 2002.

         "WHOLLY-OWNED SUBSIDIARY" of any Person means any Subsidiary of such
Person all of the capital stock and other equity interests of which is owned by
such Person or any Wholly-Owned Subsidiary of such Person.

         "WITHDRAWAL LIABILITY" shall have the meaning given such term under
Part I of Subtitle E of Title IV of ERISA.

         "WPC" means Williams Gas Pipelines Central, Inc., a Delaware
corporation.

        1.2 Number and Gender of Words; Other References. Unless otherwise
specified, in the Loan Papers (a) where appropriate, the singular includes the
plural and vice versa, and words of any gender include each other gender, (b)
heading and caption references may not be construed in interpreting provisions,
(c) monetary references are to currency of the United States of America, (d)
section, paragraph, annex, schedule, exhibit, and similar references are to the
particular Loan Paper in which they are used, (e) references to "telecopy,"
"facsimile," "fax," or similar terms are to facsimile or telecopy transmissions,
(f) references to "including" mean including without limiting the generality of
any description preceding that word, (g) the rule of construction that
references to general items that follow references to specific items are limited
to the same type or character of those specific items is not applicable in the
Loan Papers, (h) references to any Person include that Person's heirs, personal
representatives, successors, trustees, receivers, and permitted assigns, (i)
references to any Law include every amendment or supplement to it, rule and
regulation adopted under it, and successor or replacement for it, and (j)
references to any Loan Paper or other document include every renewal and
extension of it, amendment and supplement to it, and replacement or substitution
for it.



                                      24              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         1.3 Accounting Terms. All accounting terms not specifically defined
shall be construed in accordance with general accounting principles, and each
reference herein to "generally accepted accounting principles" shall mean
generally accepted accounting principles in effect, consistently applied.

SECTION 2  BORROWING PROVISIONS.

         2.1 Commitments; Borrowings from Designated Lenders. (a) Subject to and
in reliance upon the terms, conditions, representations, and warranties in the
Loan Papers, each Lender (or its predecessors-in-interest) has severally and not
jointly made certain term loans to the Company pursuant to the Existing Loan
Agreement in an original aggregate principal amount equal to $400,000,000, of
which the amount equal to such Lender's "Outstanding Borrowings" as reflected on
Schedule 2.1 of this Agreement remain outstanding as of the date hereof and
shall be deemed to be Borrowings made hereunder. No amount borrowed and repaid
under this Agreement may be reborrowed by the Company hereunder.

                  (b) For any Lender which is a Designating Lender, any
Borrowing made from such Lender may be made from its Designated Lender in such
Designated Lender's sole discretion, and nothing herein shall constitute a
commitment to lend by such Designated Lender; provided that if any Designated
Lender elects not to, or fails to, make any such Borrowing available, its
Designating Lender hereby agrees that it shall make such Borrowing available
pursuant to the terms hereof. Any Borrowing actually funded by a Designated
Lender shall constitute a utilization of the Designating Lender's Pro Rata Part
of the Commitment for all purposes hereunder.

         2.2. Termination of Commitments. The Commitment Period has expired and
the aggregate outstanding Principal Debt is $400,000,000 thereby reducing the
Commitment to zero. Therefore, the parties hereto acknowledge and agree that
none of the Agents or the Lenders have any further obligation or commitment to
make any additional loans or advances to the Company under this Agreement.

         2.3. [Intentionally Omitted.]

SECTION 3  TERMS OF PAYMENT

         3.1 Loan Accounts, Notes, and Payments.

                  (a) Principal Debt shall be evidenced by the Term Notes issued
         under and pursuant to the Existing Loan Agreement.

                  (b) The Principal Debt owed to each Lender shall be further
         evidenced by one or more loan accounts or records maintained by such
         Lender in the ordinary course of business. The loan accounts or records
         maintained by the Administrative Agent (including, without limitation,
         the Register) and each Lender shall be conclusive evidence absent
         manifest error of the amount of the Borrowings made by the Company from
         each Lender under the Term Facility and the interest and principal
         payments thereon. Any failure to so record or any error in doing so
         shall not, however, limit or otherwise affect the obligation of the
         Company under the Loan Papers to pay any amount owing with respect to
         the Obligation.

                  (c) Each payment or prepayment on the Obligation is due and
         must be paid at Administrative Agent's principal office in New York,
         New York in funds which are or will be available for immediate use by
         Administrative Agent by 1:00 p.m., New York, New York time on the day
         due. Payments made after 1:00 p.m., New York, New York time, shall be
         deemed made on the Business Day next following. Administrative Agent
         shall pay to each Lender any payment or



                                      25              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         prepayment to which such Lender is entitled hereunder on the same day
         Administrative Agent shall have received the same from the Company;
         provided such payment or prepayment is received by Administrative Agent
         prior to 1:00 p.m. New York, New York time and otherwise before 1:00
         p.m. New York, New York time on the Business Day next following. If and
         to the extent Administrative Agent shall not make such payments to
         Lenders when due as set forth in the preceding sentence, such unpaid
         amounts shall accrue interest, payable by Administrative Agent, at the
         Federal Funds Rate from the due date until (but not including) the date
         on which Administrative Agent makes such payments to Lenders.

         3.2 Interest and Principal Payments.

                  (a) Interest on each Eurodollar Rate Borrowing shall be due
         and payable as it accrues on the last day of its respective Interest
         Period and on the Maturity Date, as applicable; provided that if any
         Interest Period is a period greater than three (3) months, then accrued
         interest shall also be due and payable on the date three (3) months
         after the commencement of such Interest Period. Interest on each Base
         Rate Borrowing shall be due and payable as it accrues on the last day
         of each calendar month, and on the Maturity Date.

                  (b) The Company shall pay on the Maturity Date all outstanding
         Principal Debt, together with all accrued and unpaid interest and fees.

                  (c) By no later than five Business Days from the date of
         receipt by the Company or any of its Subject Subsidiaries of any Net
         Cash Proceeds from (i) any asset disposition (other than the MAPL Asset
         Disposition, the Seminole Asset Disposition, dispositions permitted by
         SECTIONS 8.16(i) and (iii) and any disposition of Collateral (other
         than the Refineries in Alaska and Memphis and the Assets related
         thereof)), (ii) an issuance of TWC Preferred Stock, (iii) any
         disposition of Collateral permitted pursuant to SECTION 8.16 (other
         than the Refineries in Alaska and Memphis and the assets related
         thereto and dispositions permitted by SECTION 8.16(i) and (iii)), or
         (iv) any issuance of Equity Interests by the Company (other than TWC
         Preferred Stock), the Company shall apply such Net Cash Proceeds as
         follows (for purposes of this SUBSECTION 3.2(c) the terms "Commitments"
         and "Banks" shall have the meanings assigned to such terms in the
         Primary Credit Agreement):

                  (A)      So long as the aggregate Commitments of the Banks to
                           the Company under the Primary Credit Agreement are
                           greater than $400,000,000:

                           (1) in the case of any such Net Cash Proceeds arising
                  from any disposition referred to in clause (i) above which
                  consists of the Refinery in Alaska owned by certain
                  Subsidiaries and the assets related thereto, 50% of such Net
                  Cash Proceeds shall be applied on a pro-rata basis to the
                  permanent ratable reduction of the respective Commitments of
                  the Banks to the Company under the Primary Credit Agreement;

                           (2) in the case of any such Net Cash Proceeds arising
                  from any asset disposition referred to in clause (i) above and
                  not otherwise applied pursuant to sub-clause (1) above
                  (including any disposition of the Refinery in Memphis,
                  Tennessee owned by certain Subsidiaries and the assets related
                  thereto), 50% of such Net Cash Proceeds shall be applied on a
                  pro-rata basis, without duplication, to the permanent ratable
                  (A) reduction of the respective Commitments of the Banks to
                  the Company under the Primary Credit Agreement, (B) reduction
                  of the outstanding amounts of the Principal Debt and the other
                  Progeny Facilities (excluding the Prairie Wolf Facility) and
                  (C) cash collateralization of the Legacy L/Cs;



                                      26              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

                           (3) in the case of any such Net Cash Proceeds arising
                  from an issuance of TWC Preferred Stock referred to in clause
                  (ii) above, 100% of such Net Cash Proceeds shall be applied on
                  a pro-rata basis, without duplication, to the permanent
                  ratable (x) reduction of the respective Commitments of the
                  Banks to the Company under the Primary Credit Agreement, (y)
                  reduction of the outstanding amounts of the Principal Debt and
                  the other Progeny Facilities (excluding the Prairie Wolf
                  Facility) and (z) cash collateralization of the Legacy L/Cs;

                           (4) in the case of any such Net Cash Proceeds arising
                  from any disposition of Collateral referred to in clause (iii)
                  above, 50% of such Net Cash Proceeds shall be applied on a
                  pro-rata basis to the permanent ratable (x) reduction of the
                  respective Commitments of the Banks to the Company under the
                  Primary Credit Agreement and (y) Cash Collateralization of the
                  Letter of Credit Commitments; and

                           (5) in the case of any such Net Cash Proceeds arising
                  from any issuance of Equity Interests referred to in clause
                  (iv) above, 50% of such Net Cash Proceeds shall be applied on
                  a pro-rata basis, without duplication, to the permanent
                  ratable (w) reduction of the respective Commitments of the
                  Banks to the Company under the Primary Credit Agreement, (x)
                  Cash Collateralization of the of the Letter of Credit
                  Commitments, (y) reduction of the outstanding amounts of the
                  Principal Debt and the other Progeny Facilities (excluding the
                  Prairie Wolf Facility) and (z) cash collateralization of the
                  Legacy L/Cs;

                  (B)      From and after such time that the aggregate
                           Commitments of the Banks to the Company under the
                           Primary Credit Agreement are equal to or less than
                           $400,000,000:

                           (1) 50% of any Net Cash Proceeds arising from an
                  asset disposition referred to in clause (A)(1) or (A)(4) above
                  shall be applied, first, to fully Cash Collateralize the
                  Letter of Credit Commitments and, second, upon the Letter of
                  Credit Commitments being fully Cash Collateralized, to a
                  pro-rata and permanent ratable (without duplication) (x)
                  reduction of the outstanding amounts of the Principal Debt and
                  the other Progeny Facilities (excluding the Prairie Wolf
                  Facility) and (y) cash collateralization of the Legacy L/Cs,
                  and third, upon the full Cash Collateralization of the Letter
                  of Credit Commitments, the reduction of the outstanding
                  amounts of the Principal Debt and the other Progeny Facilities
                  (excluding the Prairie Wolf Facility) to zero, and the full
                  cash collateralization of the Legacy L/Cs to a pro-rata and
                  permanent reduction of the respective Commitments of the Banks
                  to the Company under the Primary Credit Agreement;

                           (2) 50% of any Net Cash Proceeds arising from an
                  asset disposition referred to in clause (A)(2) above shall be
                  applied, first, on a pro-rata basis, without duplication, to
                  the permanent ratable (x) reduction of the outstanding amounts
                  of the Principal Debt and the other Progeny Facilities
                  (excluding the Prairie Wolf Facility) and (y) cash
                  collateralization of the Legacy L/Cs, and, second, upon the
                  reduction of the outstanding amounts of the Principal Debt and
                  the other Progeny Facilities (excluding the Prairie Wolf
                  Facility) to zero and the full cash collateralization of the
                  Legacy L/Cs, to a pro-rata and permanent reduction of the
                  respective Commitments of the Banks to the Company under the
                  Primary Credit Agreement;



                                      27              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

                           (3) 100% of an Net Cash Proceeds arising from an
                  issuance of TWC Preferred Stock referred to in clause (A)(3)
                  above shall be applied, first, on a pro-rata basis, without
                  duplication, to the permanent ratable (x) reduction of the
                  outstanding amounts of the Principal Debt and the other
                  Progeny Facilities (excluding the Prairie Wolf Facility) and
                  (y) cash collateralization of the Legacy L/Cs and , second,
                  upon the reduction of the outstanding amounts of the Principal
                  Debt and the other Progeny Facilities (excluding the Prairie
                  Wolf Facility) to zero and the full cash collateralization of
                  the Legacy L/Cs, to a pro-rata and permanent reduction of the
                  respective Commitments of the Banks to the Company under the
                  Primary Credit Facility; and

                           (4) 50% of any Net Cash Proceeds arising from an
                  issuance of Equity Interests referred to in clause (A)(5)
                  above shall be applied, first, on a pro-rata basis, without
                  duplication, to the permanent ratable (w) Cash
                  Collateralization of the Letter of Credit Commitments, (x)
                  reduction of the outstanding amounts of the Principal Debt and
                  the other Progeny Facilities (excluding the Prairie Wolf
                  Facility) and (y) cash collateralization of the Legacy L/Cs,
                  and second, upon the full Cash Collateralization of the
                  Principal Debt and the other Progeny Facilities (excluding the
                  Prairie Wolf Facility) to zero, and the full cash
                  collateralization of the Legacy L/Cs, to a pro-rata and
                  permanent reduction of the respective Commitments of the Banks
                  to the Company under the Primary Credit Agreement.

         provided that no such mandatory (w) reduction of the Commitments under
         the Primary Credit Agreement, (x) reduction of the outstanding amount
         of the Progeny Facilities (excluding the Prairie Wolf Facility), (y)
         cash collateralization of the Legacy L/Cs, or (z) Cash
         Collateralization of the Letter of Credit Commitments shall be required
         pursuant to this SECTION 3.2(c) until the earlier of (A) such time as
         the aggregate amount of Net Cash Proceeds from such asset dispositions
         and equity issuances that have not previously been applied in
         accordance herewith shall exceed $50,000,000, and (B) the end of the
         Fiscal Quarter in which such Net Cash Proceeds are received by the
         Company or any of its Subsidiaries. If a reduction of the Commitments
         under the Primary Credit Agreement pursuant to this SECTION 3.2(c)
         shall cause the Commitments under the Primary Credit Agreement as so
         reduced to be less than the aggregate outstanding principal amount of
         the "Advances" under the Primary Credit Agreement (such positive
         difference between such Commitments and such outstanding Advances being
         referred to herein as the "Excess Amount"), the Company shall repay an
         aggregate principal amount not less than such Excess Amount, and except
         as set forth in this proviso, the obligation of the Company to apply
         Net Cash Proceeds to the reduction of the Commitments of the Banks
         under the Primary Credit Agreement shall not require any payments to
         such Banks. Any and all amounts required to be prepaid on the Principal
         Debt pursuant to this SECTION 3.2(c) shall be made together with (1)
         all accrued and unpaid interest on the principal amount so prepaid and
         (2) any Consequential Loss arising as a result thereof.

                  (d) After giving Administrative Agent advance written notice
         of the intent to prepay, the Company may voluntarily prepay all or any
         part of the Principal Debt from time to time and at any time, in whole
         or in part, without premium or penalty; provided that: (i) such notice
         must be received by Administrative Agent by 1:00 p.m. New York, New
         York time on (A) the third Business Day preceding the date of
         prepayment of a Eurodollar Rate Borrowing, and (B) one Business Day
         preceding the date of prepayment of a Base Rate Borrowing; (ii) each
         such partial prepayment must be in a minimum amount of at least
         $5,000,000 or a greater integral multiple of $1,000,000 thereof (if a
         Eurodollar Rate Borrowing or a Base Rate Borrowing); and (iii) all
         accrued interest on the Obligation to be prepaid must also be paid in
         full, to the date of such prepayment. Each notice of prepayment shall
         specify the prepayment date, the Type of Borrowing(s) and amount(s) of
         such



                                      28              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         Borrowing(s) to be prepaid and shall constitute a binding obligation of
         the Company to make a prepayment on the date stated therein.

         3.3 Interest Options. Except where specifically otherwise provided,
Borrowings shall bear interest at a rate per annum equal to the lesser of (a) as
to the respective Type of Borrowing (as designated by the Company in accordance
with this Agreement), the Base Rate plus the Applicable Margin for Base Rate
Borrowings, the Adjusted Eurodollar Rate plus the Applicable Margin for
Eurodollar Rate Borrowings, as the case may be, and (b) the Maximum Rate. Each
change in the Base Rate or the Maximum Rate subject to the terms of this
Agreement, will become effective, without notice to the Company or any other
Person, upon the effective date of such change.

         3.4. Quotation of Rates. It is hereby acknowledged that a Responsible
Officer or other appropriately designated officer of the Company may call
Administrative Agent on or before the date on which a Notice of Borrowing is to
be delivered by the Company in order to receive an indication of the rates then
in effect, but such indicated rates shall neither be binding upon Administrative
Agent or Lenders nor affect the rate of interest which thereafter is actually in
effect when the Notice of Borrowing is given.

         3.5 Default Rate. At the option of Determining Lenders and to the
extent permitted by Law, all past-due Principal Debt and accrued interest
thereon shall bear interest from maturity (whether stated or by acceleration) at
the Default Rate until paid, regardless whether such payment is made before or
after entry of a judgment.

         3.6 Interest Recapture. If the designated rate applicable to any
Borrowing exceeds the Maximum Rate, the rate of interest on such Borrowing shall
be limited to the Maximum Rate, but any subsequent reductions in such designated
rate shall not reduce the rate of interest thereon below the Maximum Rate until
the total amount of interest accrued thereon equals the amount of interest which
would have accrued thereon if such designated rate had at all times been in
effect. In the event that at maturity (stated or by acceleration), or at final
payment of the Principal Debt, the total amount of interest paid or accrued is
less than the amount of interest which would have accrued if such designated
rates had at all times been in effect, then, at such time and to the extent
permitted by Law, the Company shall pay an amount equal to the difference, if
any, by which (a) the lesser of the amount of interest which would have accrued
if such designated rates had at all times been in effect and the amount of
interest which would have accrued if the Maximum Rate had at all times been in
effect, exceeds (b) the amount of interest actually paid or accrued on the
Principal Debt.

         3.7 Interest Calculations.

                  (a) All payments of interest shall be calculated on the basis
         of actual number of days (including the first day but excluding the
         last day) elapsed but computed as if each calendar year consisted of
         (i) 360 days in the case of a Eurodollar Rate Borrowing or a Base Rate
         Borrowing calculated with reference to the Federal Funds Rate (unless
         such calculation would result in the interest on the Borrowings
         exceeding the Maximum Rate in which event such interest shall be
         calculated on the basis of a year of 365 or 366 days, as the case may
         be) and (ii) 365 or 366 days, as the case may be, in the case of a Base
         Rate Borrowing calculated with reference to the Prime Rate. All
         interest rate determinations and calculations by Administrative Agent
         shall be conclusive and binding absent manifest error.

                  (b) The provisions of this Agreement relating to calculation
         of the Base Rate and the Adjusted Eurodollar Rate are included only for
         the purpose of determining the rate of interest or other amounts to be
         paid hereunder that are based upon such rate.



                                      29              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         3.8 Maximum Rate. Regardless of any provision contained in any Loan
Paper, no Lender shall ever be entitled to contract for, charge, take, reserve,
receive, or apply, as interest on the Obligation, or any part thereof, any
amount in excess of the Maximum Rate, and, if a Lender ever does so, then such
excess shall be deemed a partial prepayment of principal and treated hereunder
as such and any remaining excess shall be refunded to the Company. In
determining if the interest paid or payable exceeds the Maximum Rate, the
Company and Lenders shall, to the maximum extent permitted under applicable Law,
(a) treat all Borrowings as but a single extension of credit (and Lenders and
the Company agree that such is the case and that provision herein for multiple
Borrowings is for convenience only), (b) characterize any nonprincipal payment
otherwise payable under the Loan Papers as an expense, fee, or premium, rather
than as interest, (c) exclude voluntary prepayments and the effects thereof, and
(d) amortize, prorate, allocate, and spread the total amount of interest
throughout the entire contemplated term of the Obligation; provided that, if the
Obligation is paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period of
existence thereof exceeds the Maximum Amount, Lenders shall refund such excess,
and, in such event, Lenders shall not, to the extent permitted by Law, be
subject to any penalties provided by any Laws for contracting for, charging,
taking, reserving, or receiving interest in excess of the Maximum Amount.

         3.9 Interest Periods. When the Company requests any Eurodollar Rate
Borrowing, the Company may elect the interest period (each an "INTEREST PERIOD")
applicable thereto, which shall be, at the Company's option, in respect of any
Eurodollar Rate Borrowing, one, two, three, or six months; provided, however,
that: (a) the initial Interest Period for a Eurodollar Rate Borrowing shall
commence on the date of such Borrowing (including the date of any conversion
thereto), and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
applicable thereto expires; (b) if any Interest Period for a Eurodollar Rate
Borrowing begins on a day for which there is no numerically corresponding
Business Day in the calendar month at the end of such Interest Period, such
Interest Period shall end on the next Business Day immediately following what
otherwise would have been such numerically corresponding day in the calendar
month at the end of such Interest Period (unless such date would be in a
different calendar month from what would have been the month at the end of such
Interest Period, or unless there is no numerically corresponding day in the
calendar month at the end of the Interest Period; whereupon, such Interest
Period shall end on the last Business Day in the calendar month at the end of
such Interest Period); (c) no Interest Period may be chosen with respect to any
portion of the Principal Debt which would extend beyond the scheduled repayment
date (including any dates on which mandatory prepayments are required to be
made) for such portion of the Principal Debt; and (d) no more than an aggregate
of six (6) Interest Periods shall be in effect at one time.

         3.10 Conversions. The Company may (a) convert a Eurodollar Rate
Borrowing on the last day of an Interest Period to a Base Rate Borrowing, (b)
convert a Base Rate Borrowing at any time to a Eurodollar Rate Borrowing, and
(c) elect a new Interest Period (in the case of a Eurodollar Rate Borrowing), by
giving notice (a "NOTICE OF CONVERSION," substantially in the form of EXHIBIT B)
of such intent no later than 11:00 a.m. New York, New York, time on the third
Business Day prior to the date of conversion or the last day of the Interest
Period, as the case may be (in the case of a conversion to a Eurodollar Rate
Borrowing or an election of a new Interest Period), and no later than 11:00 a.m.
New York, New York time one Business Day prior to the last day of the Interest
Period (in the case of a conversion to a Base Rate Borrowing); provided that the
principal amount converted to, or continued as, a Eurodollar Rate Borrowing
shall be in an amount not less than $5,000,000 or a greater integral multiple of
$1,000,000. Administrative Agent shall timely notify each Lender with respect to
each Notice of Conversion. Absent the Company's Notice of Conversion or election
of a new Interest Period, a Eurodollar Rate Borrowing shall be deemed converted
to a Base Rate Borrowing effective as of the expiration of the Interest Period
applicable thereto. No Eurodollar Rate Borrowing may be continued as a
Eurodollar Rate Borrowing, and no Base Rate Borrowing may be converted to a
Eurodollar Rate Borrowing, if (i) a Default has occurred and is continuing, or
(ii) the interest rate for such Eurodollar Rate Borrowing would exceed the
Maximum Rate.



                                      30              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         3.11 Order of Application.

                  (a) So long as no Default or Potential Default has occurred
         and is continuing, payments and prepayments of the Obligation shall be
         applied in the order and manner as the Company may direct; provided
         that, each such payment or prepayment (other than payments of fees
         payable solely to any Agent or a specific Lender) shall be allocated
         among Lenders in proportion to their respective Pro Rata Parts
         appropriate for the Term Facility in respect of which such payments
         were made.

                  (b) If a Default or Potential Default has occurred and is
         continuing (or if the Company fails to give directions as permitted
         under SECTION 3.11(a)), any payment or prepayment (including proceeds
         from the exercise of any Rights) shall be applied in the following
         order: (i) to the ratable payment of all fees and expenses for which
         Agents or Lenders have not been paid or reimbursed in accordance with
         the Loan Papers (as used in this SECTION 3.11(b), a "ratable payment"
         for any Lender or Agents shall be, on any date of determination, that
         proportion which the portion of the total fees and indemnities owed to
         such Lender or Agents bears to the total aggregate fees and indemnities
         owed to all Lenders or Agents on such date of determination); (ii) to
         the Pro Rata payment of all accrued and unpaid interest on the
         Principal Debt; (iii) to the Pro Rata payment of the remaining
         Principal Debt in such order as Determining Lenders may elect (provided
         that, Determining Lenders will apply such proceeds in an order that
         will minimize any Consequential Loss); and (vii) to the payment of the
         remaining Obligation in the order and manner Determining Lenders deem
         appropriate.

         3.12 Sharing of Payments, Etc.. If any Lender shall obtain any payment
(whether voluntary, involuntary, or otherwise, including, without limitation, as
a result of exercising its Rights under SECTION 3.13) which is in excess of its
ratable share of any such payment, such Lender shall purchase from the other
Lenders such participations as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery. The Company agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may to
the fullest extent permitted by Law, exercise all of its Rights of payment
(including the Right of offset) with respect to such participation as fully as
if such Lender were the direct creditor of the Company in the amount of such
participation.

         3.13 Offset. Upon the occurrence and during the continuance of a
Default, each Lender shall be entitled to exercise (for the benefit of all
Lenders in accordance with SECTION 3.12) the Rights of offset and/or banker's
Lien against each and every account and other property, or any interest therein,
which the Company may now or hereafter have with, or which is now or hereafter
in the possession of, such Lender to the extent of the full amount of the
Obligation owed to such Lender.

         3.14 Booking Borrowings. To the extent permitted by Law, any Lender may
make, carry, or transfer its Borrowings at, to, or for the account of any of its
branch offices or the office of any of its Affiliates; provided that no
Affiliate shall be entitled to receive any greater payment under SECTION 4 than
the transferor Lender would have been entitled to receive with respect to such
Borrowings.

SECTION 4  CHANGE IN CIRCUMSTANCES.

         4.1 Increased Cost and Reduced Return.

                  (a) If, after the date hereof, the adoption of any applicable
         law, rule, or regulation or any change in any applicable law, rule, or
         regulation, or any change in the interpretation or administration



                                      31              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         thereof by any Governmental Authority, or compliance by any Lender (or
         its Applicable Lending Office) with any request or directive (whether
         or not having the force of law) of any such Governmental Authority:

                           (i) shall subject such Lender (or its Applicable
                  Lending Office) to any Tax or other charge with respect to any
                  Eurodollar Rate Borrowing, its Notes, or its obligation to
                  loan Eurodollar Rate Borrowings, or change the basis of
                  taxation of any amounts payable to such Lender (or its
                  Applicable Lending Office) under this Agreement or its Notes
                  in respect of any Eurodollar Rate Borrowings (other than with
                  respect to taxes imposed on the taxable net income of such
                  Lender by any jurisdiction within which such Lender is
                  incorporated or organized or has its principal office, or
                  within which such Applicable Lending Office is located, or by
                  any other jurisdiction in which such Lender is deemed to be
                  doing business);

                           (ii) shall impose, modify, or deem applicable any
                  reserve, special deposit, assessment, or similar requirement
                  (other than the Reserve Requirement utilized in the
                  determination of the Adjusted Eurodollar Rate) relating to any
                  extensions of credit or other assets of, or any deposits with
                  or other liabilities or commitments of, such Lender (or its
                  Applicable Lending Office), including the commitment of such
                  Lender hereunder; or

                           (iii) shall impose on such Lender (or its Applicable
                  Lending Office) or the London interbank market any other
                  condition affecting this Agreement or its Notes or any of such
                  extensions of credit or liabilities or commitments;

         and the result of any of the foregoing is to increase the cost to such
         Lender (or its Applicable Lending Office) of making, converting into,
         continuing, or maintaining any Eurodollar Rate Borrowings or to reduce
         any sum received or receivable by such Lender (or its Applicable
         Lending Office) under this Agreement or its Notes with respect to any
         Eurodollar Rate Borrowing, then the Company shall pay to such Lender on
         demand such amount or amounts as will compensate such Lender for such
         increased cost or reduction as provided in SECTION 4.1(c) below. If any
         Lender requests compensation by the Company under this SECTION 4.1(a),
         the Company may, by notice to such Lender (with a copy to
         Administrative Agent), suspend the obligation of such Lender to loan or
         continue Borrowings of the Type with respect to which such compensation
         is requested, or to convert Borrowings of any other Type into
         Borrowings of such Type, until the event or condition giving rise to
         such request ceases to be in effect (in which case the provisions of
         SECTION 4.4 shall be applicable); provided, that such suspension shall
         not affect the right of such Lender to receive the compensation so
         requested.

                  (b) If, after the date hereof, any Lender shall have
         determined that the adoption of any applicable Law regarding capital
         adequacy or any change therein or in the interpretation or
         administration thereof by any Governmental Authority charged with the
         interpretation or administration thereof, or any request or directive
         regarding capital adequacy (whether or not having the force of law) of
         any such Governmental Authority has or would have the effect of
         reducing the rate of return on the capital of such Lender or any
         corporation controlling such Lender as a consequence of such Lender's
         obligations hereunder to a level below that which such Lender or such
         corporation could have achieved but for such adoption, change, request,
         or directive (taking into consideration its policies with respect to
         capital adequacy), then from time to time upon demand the Company shall
         pay to such Lender such additional amount or amounts as will compensate
         such Lender for such reduction; provided, however, that the Company
         shall not be obligated to pay any such additional amount or amounts
         incurred or accruing more than ninety (90) days prior to the date on
         which the affected Lender gives written notice thereof in accordance
         with SECTION 4.1(c) below.



                                      32              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

                  (c) Each Lender shall promptly notify the Company and
         Administrative Agent of any event of which it has knowledge, occurring
         after the date hereof, which will entitle such Lender to compensation
         pursuant to this Section and will designate a different Applicable
         Lending Office if such designation will avoid the need for, or reduce
         the amount of, such compensation and will not, in the judgment of such
         Lender, be otherwise disadvantageous to it. Any Lender claiming
         compensation under this Section shall furnish to the Company and
         Administrative Agent a statement setting forth in reasonable detail the
         additional amount or amounts to be paid hereunder which shall be
         presumed correct in the absence of manifest error. In determining such
         amount, such Lender may use any reasonable averaging and attribution
         methods.

         4.2 Limitation on Types of Loans. If on or prior to the first day of
any Interest Period for any Eurodollar Rate Borrowing:

                  (a) Administrative Agent determines (which determination shall
         be conclusive) that by reason of circumstances affecting the relevant
         market, adequate and reasonable means do not exist for ascertaining the
         Eurodollar Rate for such Interest Period; or

                  (b) Determining Lenders determine (which determination shall
         be conclusive) and notify Administrative Agent that the Adjusted
         Eurodollar Rate will not adequately and fairly reflect the cost to the
         Lenders of funding Eurodollar Rate Borrowings for such Interest Period;

then Administrative Agent shall give the Company prompt notice thereof
specifying the relevant amounts or periods, and so long as such condition
remains in effect, the Lenders shall be under no obligation to fund additional
Eurodollar Rate Borrowings, continue Eurodollar Rate Borrowings, or to convert
Base Rate Borrowings into Eurodollar Rate Borrowings, and the Company shall, on
the last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Rate Borrowings, either prepay such Borrowings or convert such
Borrowings into Base Rate Borrowings in accordance with the terms of this
Agreement.

         4.3 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Rate Borrowings hereunder, then
such Lender shall promptly notify the Company thereof and such Lender's
obligation to make or continue Eurodollar Rate Borrowings and to convert other
Base Rate Borrowings into Eurodollar Rate Borrowings shall be suspended until
such time as such Lender may again make, maintain, and fund Eurodollar Rate
Borrowings (in which case the provisions of SECTION 4.4 shall be applicable).

         4.4 Treatment of Affected Loans. If the obligation of any Lender to
fund Eurodollar Rate Borrowings or to continue, or to convert Base Rate
Borrowings into Eurodollar Rate Borrowings, shall be suspended pursuant to
SECTIONS 4.1, 4.2, or 4.3 hereof, such Lender's Eurodollar Rate Borrowings shall
be automatically converted into Base Rate Borrowings on the last day(s) of the
then current Interest Period(s) for Eurodollar Rate Borrowings (or, in the case
of a conversion required by SECTION 4.3 hereof, on such earlier date as such
Lender may specify to the Company with a copy to Administrative Agent) and,
unless and until such Lender gives notice as provided below that the
circumstances specified in SECTIONS 4.1, 4.2, or 4.3 hereof that gave rise to
such conversion no longer exist:

                  (a) to the extent that such Lender's Eurodollar Rate
         Borrowings have been so converted, all payments and prepayments of
         principal that would otherwise be applied to such Lender's Eurodollar
         Rate Borrowings shall be applied instead to its Base Rate Borrowings;
         and

                  (b) all Borrowings that would otherwise be made or continued
         by such Lender as Eurodollar Rate Borrowings shall be made or continued
         instead as Base Rate Borrowings, and all



                                      33              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         Borrowings of such Lender that would otherwise be converted into
         Eurodollar Rate Borrowings shall be converted instead into (or shall
         remain as) Base Rate Borrowings.

If such Lender gives notice to the Company (with a copy to Administrative Agent)
that the circumstances specified in SECTIONS 4.1, 4.2, or 4.3 hereof that gave
rise to the conversion of such Lender's Eurodollar Rate Borrowings pursuant to
this SECTION 4.4 no longer exist (which such Lender agrees to do promptly upon
such circumstances ceasing to exist) at a time when Eurodollar Rate Borrowings
made by other Lenders are outstanding, such Lender's Base Rate Borrowings shall
be automatically converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Rate Borrowings, to the extent
necessary so that, after giving effect thereto, all Eurodollar Rate Borrowings
held by the Lenders and by such Lender are held Pro Rata (as to principal
amounts, Types, and Interest Periods).

         4.5 Compensation; Replacement of Lenders.

                  (a) Upon the request of any Lender, the Company shall pay to
         such Lender such amount or amounts as shall be sufficient (in the
         reasonable opinion of such Lender) to compensate it for any
         Consequential Loss; provided that, in each case, the Person claiming
         such Consequential Loss has furnished the Company with a reasonably
         detailed statement of such loss, which statement shall be conclusive in
         the absence of manifest error.

                  (b) If any Lender requests compensation under SECTIONS 4.1 or
         if the Company is required to pay additional amounts to or for the
         account of any Lender pursuant to SECTION 4.6 (collectively,
         "ADDITIONAL AMOUNTS"), then the Company may, at its sole expense and
         effort, upon written notice to such Lender and Administrative Agent,
         require such Lender to assign and delegate, without recourse, all its
         interests, Rights, and obligations under this Agreement and the other
         Loan Papers to an Eligible Assignee that shall assume such obligations;
         provided that, (i) the Company shall have received the prior written
         consent of Administrative Agent to any such assignment; (ii) such
         Lender shall have received payment from the Company of any Additional
         Amounts owed to such Lender by the Company for periods prior to the
         replacement of such Lender and any costs incurred as a result of such
         replacement of a Lender; (iii) such assignment will result in reduction
         or elimination of the Additional Amounts; and (iv) such assignment and
         acceptance shall be made in accordance with, and subject to the
         requirements and restrictions contained in, SECTION 12.13(b), other
         than the restrictions imposed by SECTION 12.13(b)(iv). A Lender shall
         not be required to make any such assignment and delegation if, prior
         thereto, as a result of a waiver by such Lender or otherwise, the
         circumstances entitling such Borrowing to require such assignment and
         delegation cease to apply.

         4.6 Taxes.

                  (a) Any and all payments by the Company to or for the account
         of any Lender or Administrative Agent hereunder or under any other Loan
         Paper shall be made free and clear of and without deduction for any and
         all present or future Taxes, excluding, in the case of each Lender and
         Administrative Agent, Taxes imposed on its income and franchise Taxes
         imposed on it by any jurisdiction within which such Lender (or its
         Applicable Lending Office) or Administrative Agent (as the case may be)
         is incorporated or organized, or any political subdivision thereof, or
         by any other jurisdiction in which such Lender or Administrative Agent,
         as the case may be, is deemed to be doing business under the Tax Laws
         thereof (all such Non-Excluded Taxes referred to as "NON-EXCLUDED
         TAXES"). If the Company shall be required by law to deduct any
         Non-Excluded Taxes from or in respect of any sum payable under this
         Agreement or any other Loan Paper to any Lender or Administrative
         Agent, (i) the sum payable shall be increased as necessary so that
         after making all required deductions (including deductions applicable
         to additional sums payable under this



                                      34              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         SECTION 4.6) such Lender or Administrative Agent receives an amount
         equal to the sum it would have received had no such deductions been
         made, (ii) the Company shall make such deductions, (iii) the Company
         shall pay the full amount deducted to the relevant taxation authority
         or other authority in accordance with applicable law, and (iv) within
         thirty (30) days after the date of any payment of Non-Excluded Taxes,
         the Company shall furnish to Administrative Agent, at its address
         listed in SCHEDULE 2.1, the original or a certified copy of a receipt
         evidencing payment thereof.

                  (b) In addition, the Company agrees to pay any and all present
         or future stamp or documentary taxes or charges or similar levies which
         arise from any payment made under this Agreement or any other Loan
         Paper or from the execution or delivery of, or otherwise with respect
         to, this Agreement or any other Loan Paper (hereinafter referred to as
         "OTHER TAXES").

                  (c) THE COMPANY AGREES TO INDEMNIFY EACH LENDER AND
         ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF NON-EXCLUDED TAXES THAT
         SHOULD HAVE BEEN WITHHELD BY THE COMPANY AND OTHER TAXES (INCLUDING,
         WITHOUT LIMITATION, ANY NON-EXCLUDED TAXES THAT SHOULD HAVE BEEN
         WITHHELD BY THE COMPANY OR OTHER TAXES IMPOSED OR ASSERTED BY ANY
         JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 4.6) PAID BY SUCH
         LENDER OR ADMINISTRATIVE AGENT (AS THE CASE MAY BE) AND ANY LIABILITY
         (INCLUDING PENALTIES, INTEREST, AND EXPENSES) ARISING THEREFROM OR WITH
         RESPECT THERETO.

                  (d) Each Lender organized under the laws of a jurisdiction
         outside the United States, on or prior to the date of its execution and
         delivery of this Agreement in the case of each Lender listed on the
         signature pages hereof and on or prior to the date on which it becomes
         a Lender in the case of each other Lender, and from time to time
         thereafter if requested in writing by the Company or Administrative
         Agent (but only so long as such Lender remains lawfully able to do so),
         shall provide the Company and Administrative Agent with (i) two duly
         completed, accurate, and signed copies of Internal Revenue Service Form
         1001 or 4224, as appropriate, or any successor form prescribed by the
         Internal Revenue Service, certifying that such Lender is entitled to
         benefits under an income tax treaty to which the United States is a
         party which reduces the rate of withholding tax on payments of interest
         or certifying that the income receivable pursuant to this Agreement is
         effectively connected with the conduct of a trade or business in the
         United States, (ii) a duly completed, accurate and signed Internal
         Revenue Service Form W-8 or W-9, as appropriate, or any successor form
         prescribed by the Internal Revenue Service, and (iii) any other form or
         certificate required by any taxing authority (including any certificate
         required by Sections 871(h) and 881(c) of the Internal Revenue Code),
         certifying that such Lender is entitled to an exemption from or a
         reduced rate of tax on payments pursuant to this Agreement or any of
         the other Loan Papers.

                  (e) For any period with respect to which a Lender has failed
         to provide the Company and Administrative Agent with the appropriate
         form pursuant to SECTION 4.6(d) (unless such failure is due to a change
         in Law, other than any change in the nature of an anti-treaty shopping
         or limitation on benefits or similar provision, occurring subsequent to
         the date on which a form originally was required to be provided), such
         Lender shall not be entitled to indemnification under SECTION 4.6(a) or
         4.6(b) with respect to Taxes imposed by the United States; provided,
         however, that should a Lender, which is otherwise exempt from or
         subject to a reduced rate of withholding tax, become subject to Taxes
         because of its failure to deliver a form required hereunder, the
         Company shall take such steps as such Lender shall reasonably request
         to assist such Lender to recover such Taxes.

                  (f) If the Company is required to pay additional amounts to or
         for the account of any Lender pursuant to this SECTION 4.6, then such
         Lender will agree to use reasonable efforts to change



                                      35              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         the jurisdiction of its Applicable Lending Office so as to eliminate or
         reduce any such additional payment which may thereafter accrue if such
         change, in the judgment of such Lender, is not otherwise
         disadvantageous to such Lender.

                  (g) Without prejudice to the survival of any other agreement
         of the Company hereunder, the agreements and obligations of the Company
         contained in this SECTION 4.6 shall survive the payment in full of the
         Notes.

SECTION 5  FEES

         5.1 Treatment of Fees. Except as otherwise provided by Law, the fees
described in this SECTION 5: (a) do not constitute compensation for the use,
detention, or forbearance of money, (b) are in addition to, and not in lieu of,
interest and expenses otherwise described in this Agreement, (c) shall be
payable in accordance with SECTION 3.1, (d) shall be non-refundable, (e) shall,
to the fullest extent permitted by Law, bear interest, if not paid when due, at
the Default Rate, and (f) shall be calculated on the basis of actual number of
days (including the first day but excluding the last day) elapsed, but computed
as if each calendar year consisted of 360 days.

         5.2 Fees of Administrative Agent and Arranger. The Company shall pay to
Administrative Agent or Arranger, as the case may be, solely for their
respective accounts, the fees described in that certain separate letter
agreement dated as of January 26, 2000, between the Company, Administrative
Agent, and Arranger, which payments shall be made on the dates specified, and in
amounts calculated in accordance with, such letter agreement.

         5.3 Amendment Fee. The Company shall pay an amendment fee to each
Lender that shall have approved this Agreement and shall have delivered a duly
executed counterpart hereof not later than 5:00 p.m. (central standard time ),
on the Closing Date equal to the product of 0.10% multiplied by such Lender's
Pro Rata Part of the Principal Debt, payable in immediately available funds to
each such Lender on the Closing Date.

SECTION 6  CONDITIONS PRECEDENT

         6.1 Conditions Precedent to Closing. This Agreement shall not become
effective unless Administrative Agent has received all of the agreements,
documents, instruments, and other items described on SCHEDULE 6.1. For purposes
of determining compliance with the conditions specified in this SECTION 6.1,
each Lender who has executed and delivered this Agreement shall be deemed to
have (i) consented to, approved, authorized and accepted and to be satisfied
with each document or other matter required under this SECTION 6.1 (provided
that such Lender has received access to a copy of the L/C Agreement and the
Primary Credit Agreement) and (ii) authorized the Administrative Agent to
execute on such Lender's behalf the documents set forth in item 2 of SCHEDULE
6.1, as applicable, unless both (x) an officer of the Administrative Agent
responsible for the transactions contemplated by this Agreement shall have
received written notice from such Lender prior to the Closing Date specifying
its objection thereto and (y) such Lender shall not have accepted any portion of
the fees set forth in SECTION 5.3. The Administrative Agent shall give the
Company notice when all actions required by SECTION 6.1 have been satisfied.



                                      36              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

SECTION 7 REPRESENTATIONS AND WARRANTIES. To induce Lenders to enter into this
Agreement and to make the loans herein provided for, the Company hereby
covenants, represents and warrants to the Administrative Agent and to each
Lender that:

         7.1 Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all corporate powers and all governmental licenses,
authorizations, certificates, consents and approvals required to carry on its
business as now conducted in all material respects, except for those licenses,
authorizations, certificates, consents and approvals the failure to have which
could not reasonably be expected to have a material adverse effect on the
business, assets, condition or operation of the Company and its Material
Subsidiaries taken as a whole. Each Material Subsidiary (other than NewGP, if
applicable) of the Company is duly organized or formed, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation,
except where the failure to be so organized, existing and in good standing could
not reasonably be expected to have a material adverse effect on the business,
assets, condition or operations of the Company and its Material Subsidiaries
(other than NewGP, if applicable) taken as a whole. Each Material Subsidiary
(other than NewGP, if applicable) has all powers and all governmental licenses,
authorizations, certificates, consents and approvals required to carry on its
business as now conducted in all material respects, except for those licenses,
authorizations, certificates, consents and approvals the failure to have which
could not reasonably be expected to have a material adverse effect on the
business, assets, condition or operation of the Company and its Material
Subsidiaries (other than NewGP, if applicable) taken as a whole.

         7.2 Authorization and Power. After giving effect to this Agreement, the
Primary Credit Agreement, the L/C Agreement, the Barrett Loan Agreement and the
other Progeny Facilities and assuming the consummation of the transactions
contemplated thereby, the execution, delivery and performance by the Company and
the Guarantors and the consummation of the transactions contemplated thereby are
within the Company's or such Guarantor's, as the case may be, corporate or
limited liability company powers, have been duly authorized by all necessary
corporate or limited liability company action, do not contravene (a) the
Company's or such Guarantor's, as the case may be, charter, by-laws or formation
agreement, or (b) law or any contractual restriction binding on or affecting the
Company or any Guarantor and will not result in or require the creation or
imposition of any Lien prohibited by this Agreement.

         7.3 Approvals and Consents. No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
the Company or any Guarantor of the Loan Papers to which any of them is a party
or the consummation of the transactions contemplated by this Agreement.

         7.4 Enforceable Obligation. Each Loan Paper has been duly executed and
delivered by the Company or the applicable Guarantor, as the case may be, and is
the legal, valid and binding obligation of the Company or such Guarantor,
enforceable in accordance with its terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally and by general principles of
equity. The Notes of the Company are, the legal, valid and binding obligations
of the Company enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditor's rights generally and by general principles of equity.

         7.5 Financial Condition. The Consolidated balance sheet of the Company
and its Subsidiaries as at December 31,1999, and the related Consolidated
statements of income and cash flows of the Company and its Subsidiaries for the
fiscal year then ended, duly certified by an authorized financial officer of the
Company, fairly present, the Consolidated financial condition of the Company and
its Subsidiaries as at such



                                      37              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

date and the Consolidated results of operations of the Company and its
Subsidiaries for the year ended on such date, all in accordance with GAAP
consistently applied.

         7.6 No Material Controversies. Except as set forth in the Public
Filings or in SCHEDULE II or as otherwise disclosed in writing to the
Administrative Agent after the date hereof and approved by the Administrative
Agent and the Determining Lenders, there is no pending or, to the knowledge of
the Company, threatened action or proceeding affecting the Company or any
Material Subsidiary (including for the purposes of this SECTION 7.6, any WCG
Subsidiary and excluding NewGP, if applicable) before any court, governmental
agency or arbitrator, which could reasonably be expected to materially and
adversely affect the financial condition or operations of the Company and its
Subsidiaries taken as a whole or which purports to affect the legality,
validity, binding effect or enforceability of this Agreement or any Note.

         7.7 Investment Company. The Company is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

         7.8 ERISA Compliance. No Termination Event has occurred or is
reasonably expected to occur with respect to any Plan that could reasonably be
expected to have a material adverse effect on the Company or any Material
Subsidiaries (other than NewGP, if applicable) of the Company (including for the
purposes of this SECTION 7.8, any material WCG Subsidiaries). Neither the
Company nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and the Company is not aware of any reason to
expect that any Multiemployer Plan is to be in reorganization or to be
terminated within the meaning of Title IV of ERISA that could reasonably be
expected to have a material adverse effect on the Company or any Material
Subsidiaries (other than NewGP, if applicable) of the Company (including for the
purposes of this SECTION 7.8, any material WCG Subsidiaries) or any ERISA
Affiliate.

         7.9 Taxes. As of the date of this Agreement, the United States federal
income tax returns of the Company and its Material Subsidiaries (other than
NewGP, if applicable) have been examined through the fiscal year ended December
31, 1995. The Company and its Subsidiaries have filed all United States Federal
income tax returns and all other material domestic tax returns which are
required to be filed by them and have paid, or provided for the payment before
the same become delinquent of, all taxes due pursuant to such returns or
pursuant to any assessment received by the Company or any such Subsidiary, other
than those taxes contested in good faith by appropriate proceedings. The
charges, accruals and reserves on the books of the Company and its material
Subsidiaries in respect of taxes are adequate.

         7.10 Holding Company. The Company is not a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," or a "public
utility" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

         7.11 Environmental Compliance. Except as set forth on Schedule IV or in
the Public Filings or as otherwise disclosed in writing to the Administrative
Agent after the date hereof and approved by the Administrative Agent and the
Determining Lenders, the Company and its Material Subsidiaries (other than
NewGP, if applicable) are in compliance in all material respects with all
Environmental Protection Statutes to the extent material to the operations or
the Consolidated financial condition of the Company and its Consolidated
Subsidiaries taken as a whole. Except as set forth in the Public Filings or as
otherwise disclosed in writing to the Administrative Agent after the date hereof
and approved by the Administrative Agent and the Determining Lenders, the
aggregate contingent and non-contingent liabilities of the Company and its
Consolidated Subsidiaries (other than those reserved for in accordance with GAAP
and set forth in the



                                      38              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

financial statements regarding the Company referred to in SECTION 7.5 and
delivered to the Administrative Agent and excluding liabilities to the extent
covered by insurance if the insurer has confirmed that such insurance covers
such liabilities or which the Company reasonably expects to recover from
ratepayers) which are reasonably expected to arise in connection with (a) the
requirements of Environmental Protection Statutes or (b) any obligation or
liability to any Person in connection with any Environmental matters (including,
without limitation, any release or threatened release (as such terms are defined
in the Comprehensive Environmental Response, Compensation and Liability Act of
1980) of any Hazardous Waste, Hazardous Substance, other waste, petroleum or
petroleum products into the Environment) could not reasonably be expected to
have a material adverse effect on the business, assets, condition or operations
of the Company and its Consolidated Subsidiaries (including for the purposes of
this SECTION 7.11, the WCG Subsidiaries), taken as a whole. The Company and each
of its Material Subsidiaries (other than NewGP, if applicable) holds, or has
submitted a good faith application for all Environmental Permits (none of which
have been terminated or denied) required for any of its current operations or
for any property owned, leased, or otherwise operated by it; and is, and within
the period of all applicable statutes of limitation has been, in compliance with
all of its Environmental Permits.

         7.12 Use of Proceeds.

                  (a) No proceeds of any Borrowings will be used for any
         purposes or in any manner not permitted by SECTION 8.15.

                  (b) The Company is not engaged in the business of extending
         credit for the purpose of purchasing or carrying margin stock (within
         the meaning of Regulation U issued by the Board of Governors of the
         Federal Reserve System), and no proceeds of any Borrowing will be used
         to purchase or carry any such margin stock (other than purchases of
         common stock expressly permitted by SECTION 8.15) or to extend credit
         to others for the purpose of purchasing or carrying any such margin
         stock. Following the application of the proceeds of each Borrowing, not
         more than twenty-five percent (25%) of the value of the assets of the
         Company will be represented by such margin stock and not more than
         twenty-five percent (25%) of the value of the assets of the Company and
         its Subsidiaries (including for the purposes of this SECTION 7.12(b),
         the WCG Subsidiaries) will be represented by such margin stock.

SECTION 8  COVENANTS

         The Company covenants and agrees to perform, observe, and comply with
each of the following covenants, from the Closing Date and so long thereafter as
Lenders are committed to fund Borrowings under this Agreement and thereafter
until the payment in full of the Principal Debt and payment in full of all other
interest, fees, and other amounts of the Obligation then due and owing, unless
Company receives a prior written consent to the contrary by Administrative Agent
as authorized by Determining Lenders:

         8.1 Compliance with Laws, Etc. The Company shall comply, and cause each
of its Subject Subsidiaries to comply, in all material respects with all
applicable laws, rules, regulations and orders (except where failure to comply
could not reasonably be expected to have a material adverse effect on the
business, assets, condition or operations of the Company and its Subject
Subsidiaries taken as a whole), such compliance to include, without limitation,
the payment and discharge before the same become delinquent of all taxes,
assessments and governmental charges or levies imposed upon it or any of its
Subject Subsidiaries or upon any of its property or any property of any of its
Subject Subsidiaries, and all lawful claims which, if unpaid, might become a
Lien upon any property of it or any of its Subject Subsidiaries, provided that
neither the Company nor any of its Subject Subsidiaries shall be required to pay
any such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings and with respect to which reserves in



                                      39              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

conformity with GAAP, if required by such principles, have been provided on the
books of the Company or such Subject Subsidiary, as the case may be.

         8.2 Financial Statements, Reports and Documents. The Company shall
deliver to the Administrative Agent copies of the following:

                  (a) as soon as possible and in any event within five (5) days
         after the occurrence of each Default or Potential Default, continuing
         on the date of such statement, a statement of an authorized financial
         officer of the Company setting forth the details of such Default or
         Potential Default and the actions, if any, which the Company has taken
         and proposes to take with respect thereto;

                  (b) as soon as available and in any event not later than 60
         days after the end of each of the first three Fiscal Quarters of each
         Fiscal Year of the Company, (1) the unaudited Consolidated balance
         sheet of the Company and its Consolidated Subsidiaries as of the end of
         such Fiscal Quarter and the unaudited Consolidated statements of income
         and cash flows of the Company and its Consolidated Subsidiaries for the
         period commencing at the end of the previous year and ending with the
         end of such Fiscal Quarter, all in reasonable detail and duly certified
         (subject to year-end audit adjustments and the lack of footnotes) by an
         authorized financial officer of the Company as having been prepared in
         accordance with generally accepted accounting principles; provided
         that, if any financial statement referred to in this SECTION 8.2(b) is
         readily available on-line through EDGAR as of the date on which such
         financial statement is required to be delivered hereunder, the Company
         shall not be obligated to furnish copies of such financial statement;
         and (2) a certificate of an authorized financial officer of the Company
         (a) stating that he has no knowledge that a Default or Event of Default
         has occurred and is continuing or, if a Default or Event of Default has
         occurred and is continuing, a statement as to the nature thereof and
         the action, if any, which the Company proposes to take with respect
         thereto, and (b) showing in detail the calculation supporting such
         statement in respect of SECTION 8.6;

                  (c) as soon as available and in any event not later than 105
         days after the end of each Fiscal Year of the Company, (1) a copy of
         the annual audited report for such year for the Company and its
         Consolidated Subsidiaries, including therein Consolidated balance
         sheets of the Company and its Consolidated Subsidiaries as of the end
         of such Fiscal Year and Consolidated statements of income and cash
         flows of the Company and its Consolidated Subsidiaries for such Fiscal
         Year, in each case prepared in accordance with generally accepted
         accounting principles and reported on by Ernst & Young, LLP or other
         independent certified public accountants of recognized standing
         acceptable to the Determining Lenders; provided that if any financial
         statement referred to in this SECTION 8.2(c) is readily available
         on-line through EDGAR as of the date on which such financial statement
         is required to be delivered hereunder, the Company shall not be
         obligated to furnish copies of such financial statement; and (2) a
         letter of such accounting firm to the Lenders (a) stating that, in the
         course of the regular audit of the business of the Company and its
         Consolidated Subsidiaries, which audit was conducted by such accounting
         firm in accordance with generally accepted auditing standards, such
         accounting firm has obtained no knowledge that a Default or Event of
         Default has occurred and is continuing, or if, in the opinion of such
         accounting firm, a Default or Event of Default has occurred and is
         continuing, a statement as to the nature thereof, and (b) showing in
         detail the calculations supporting such statement in respect of SECTION
         8.6 (which letter may nevertheless be limited in form, scope and
         substance to the extent required by applicable accounting rules or
         guidelines in effect from time to time);



                                      40              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

                  (d) such other information respecting the business or
         properties, or the condition or operations, financial or otherwise, of
         the Company or any of its Material Subsidiaries as any Lender, through
         the Administrative Agent, may from time to time reasonably request;

                  (e) promptly after the sending or filing thereof, copies of
         all proxy material, reports and other information which the Company
         sends to any of its security holders, and copies of all final reports
         and final registration statements which the Company or any Material
         Subsidiary files with the Securities and Exchange Commission or any
         national securities exchange; provided that, if such proxy materials
         and reports, registration statements and other information are readily
         available on-line through EDGAR, the Company or such Material
         Subsidiary shall not be obligated to furnish copies thereof;

                  (f) as soon as possible and in any event within 30 Business
         Days after the Company or any ERISA Affiliate knows or has reason to
         know (A) that any Termination Event described in CLAUSE (a) of the
         definition of Termination Event with respect to any Plan has occurred
         that could have a material adverse effect on the Company or any
         Material Subsidiary of the Company or (B) that any other Termination
         Event with respect to any Plan has occurred or is reasonably expected
         to occur that could have a material adverse effect on the Company or
         any Material Subsidiary of the Company, a statement of the chief
         financial officer or chief accounting officer of the Company describing
         such Termination Event and the action, if any, which the Company
         proposes to take with respect thereto;

                  (g) promptly and in any event within twenty-five (25) Business
         Days after receipt thereof by the Company or any ERISA Affiliate,
         copies of each notice received by the Company or such ERISA Affiliate
         from the PBGC stating its intention to terminate any Plan or to have a
         trustee appointed to administer any Plan;

                  (h) within thirty (30) days following request therefor by the
         Administrative Agent, copies of each Schedule B (Actuarial Information)
         to each annual report (Form 5500 Series) of the Company or any ERISA
         Affiliate with respect to each Plan;

                  (i) promptly and in any event within twenty-five (25) Business
         Days after receipt thereof by the Company or any ERISA Affiliate from
         the sponsor of a Multiemployer Plan, a copy of each notice received by
         the Company or any ERISA Affiliate concerning (i) the imposition of a
         Withdrawal Liability by a Multiemployer Plan, (ii) the determination
         that a Multiemployer Plan is, or is expected to be, in reorganization
         within the meaning of Title IV of ERISA, (iii) the termination of a
         Multiemployer Plan within the meaning of Title IV of ERISA, or (iv) the
         amount of liability incurred, or expected to be incurred, by the
         Company or such ERISA Affiliate in connection with any event described
         in CLAUSE (i), (ii) or (iii) above that, in each case, could have a
         material adverse effect on the Company or any ERISA Affiliate;

                  (j) not more than sixty (60) days (or 105 days in the case of
         the last fiscal quarter of a fiscal year of the Company) after the end
         of each fiscal quarter of the Company, a certificate of an authorized
         financial officer of the Company stating the respective ratings, if
         any, by each of S&P and Moody's of the senior unsecured long-term debt
         of the Company as of the last day of such quarter;

                  (k) promptly after any change in, or withdrawal or termination
         of, the rating of any senior unsecured long-term debt of the Company by
         S&P or Moody's, notice thereof; and

                  (l) promptly after any officer of the Company obtains
         knowledge thereof, notice of (A) any material violation of,
         noncompliance with, or remedial obligations under, any Environmental



                                      41              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         Protection Statute or notification of such violation or noncompliance
         received from any Governmental Authority, and (B) any material release
         or threatened material release of Hazardous Substance or Hazardous
         Waste affecting any property owned, leased or operated by the Company
         or any Subsidiary of the Company that the Company or such Subsidiary is
         compelled by the requirements of any Environmental Protection Statute
         to report to any governmental agency, department, board or other
         instrumentality.

         8.3 Maintenance of Insurance. The Company shall maintain, and cause
each of its Material Subsidiaries (other than NewGP, if applicable) to maintain,
insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Company or such Material Subsidiaries operate, provided that the
Company or any of its Subsidiaries may self-insure to the extent and in the
manner normal for companies of like size, type and financial condition.

         8.4 Preservation of Corporate Existence, Etc. The Company shall
preserve and maintain, and cause each of its Subject Subsidiaries (other than
the WCG Senior Notes Issuer) to preserve and maintain, its corporate existence,
rights, franchises and privileges in the jurisdiction of its incorporation, and
qualify and remain qualified, and cause each Subject Subsidiary to qualify and
remain qualified, as a foreign corporation in each jurisdiction in which
qualification is necessary or desirable in view of its business and operations
or the ownership of its properties, except (a) in the case of any Subject
Subsidiary of the Company, where the failure of such Subject Subsidiary to so
preserve, maintain, qualify and remain qualified could not reasonably be
expected to have a material adverse effect on the business, assets, condition or
operations of the Company and its Subject Subsidiaries taken as a whole; (b) in
the case of the Company, where the failure of the Company to preserve and
maintain such rights, franchises and privileges and to so qualify and remain
qualified could not reasonably be expected to have a material adverse effect on
the business, assets, condition or operations of the Company and its Subject
Subsidiaries taken as a whole; (c) the Company and its Subject Subsidiaries may
consummate any merger or consolidation permitted pursuant to SECTION 8.7; (d)
the Company or any Subject Subsidiary of the Company may be converted into a
limited liability company by statutory election; provided that any such
conversion of the Company shall not affect its liabilities and obligations to
the Lenders pursuant to this Agreement; and (e) Permitted Dispositions and other
dispositions permitted hereunder.

         8.5 Debt; Interest Coverage. The Company shall not permit: (a) in the
case of the Company, the ratio of (i) the aggregate amount of Consolidated Debt
of the Company and its Consolidated Subsidiaries to (ii) the sum of the
Consolidated Net Worth of the Company plus the aggregate amount of Consolidated
Debt of the Company and its Consolidated Subsidiaries, to exceed at any time (x)
on or before December 30, 2002, 0.70 to 1.00, (y) after December 30, 2002 and on
or before March 30, 2003, 0.68 to 1.00, and (z) after March 30, 2003, 0.65 to
1.00; (b) in the case of each of TGPL, TGT and NWP, the ratio of (i) the
aggregate amount of Consolidated Debt of such Subsidiary and its Subsidiaries on
a Consolidated basis, to (ii) the sum of the Consolidated Net Worth of such
Subsidiary plus the aggregate amount of Consolidated Debt of such Subsidiary and
its Subsidiaries on a Consolidated basis, to exceed at any time 0.55 to 1.00.;
and (c) for any period of four consecutive Fiscal Quarters, the ratio of (i) the
sum of Cash Flow from operations of the Company plus Interest Expense of the
Company to (ii) Interest Expense of the Company, to be less than 1.5 to 1.0.

         8.6 Liens, Etc. The Company shall not create, assume, incur or suffer
to exist, or permit any of its Subject Subsidiaries to create, assume, incur or
suffer to exist, any Lien on or in respect of any of its property, whether now
owned or hereafter acquired, or assign or otherwise convey, or permit any such
Subject Subsidiary to assign or otherwise convey, any right to receive income,
in each case to secure or provide for the payment of any Debt, trade payable or
other obligation or liability or any Person (other than obligations or



                                      42              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>
liabilities that are (i) neither Debt nor trade payables, (ii) incurred, and
are owed to trading counterparties, in the ordinary course of the Company or any
of its Subject Subsidiaries, (iii) secured only by cash, short-term investments
or a Letter of Credit, and (iv) permitted by SECTION 8.18); provided however,
that notwithstanding the foregoing (1) the Company or any of its Subject
Subsidiaries may create, incur, assume or suffer to exist Permitted Liens, and
(2) RMT and RMT LLC may create, incur, assume or suffer to exist any Lien
created pursuant to the Barrett Loan Agreement.

         8.7 Merger and Sale of Assets. The Company shall not merge or
consolidate with or into any other Person, or sell, lease or otherwise transfer
a material part of its assets, or permit any of its Major Subsidiaries (other
than Apco Argentina, Inc. and its Subsidiaries, and NewGP, if applicable) to
merge or consolidate with or into any other Person, or sell, lease or otherwise
transfer a material part of such Major Subsidiary's assets, except that this
SECTION 8.17 shall not prohibit any sale or transfer permitted by SECTIONS 8.10,
8.16, 8.18 or any Permitted Disposition.

         8.8 Agreements to Restrict Dividends and Certain Transfers. The Company
shall not enter into or suffer to exist, or permit any of its Subject
Subsidiaries to enter into or suffer to exist, any consensual encumbrance or
consensual restriction (except under governmental regulations) on its ability or
the ability of any of its Subject Subsidiaries (i) to pay, directly or
indirectly, dividends or make any other distributions in respect of its capital
stock or pay any Debt or other obligation owed to the Company or to any of its
Subject Subsidiaries; or (ii) to make loans or advances to the Company or any
Subject Subsidiary thereof, except, as to (i) and (ii) above, (1) encumbrances
and restrictions on any Subsidiary that is not a Material Subsidiary, (2) those
encumbrances and restrictions existing on July 31, 2002, (3) other customary
encumbrances and restrictions now or hereafter existing of the Company or any
Subsidiary thereof entered into in the ordinary course of business that are not
more restrictive in any material respect than the encumbrances and restrictions
with respect to the Company or its Subsidiaries existing on July 31, 2002, (4)
encumbrances or restrictions on any Subsidiary that is obligated to pay
Non-Recourse Debt arising in connection with such Non-Recourse Debt, (5)
encumbrances and restrictions on Apco Argentina, Inc. or its Subsidiaries and
(6) encumbrances and restrictions on any Subsidiary pursuant to the Barrett Loan
Agreement.

         8.9 Loans and Advances; Investments. The Company shall not (i) make or
permit to remain outstanding, or allow any of its Subject Subsidiaries to make
or permit to remain outstanding, any loan or advance to, or own, purchase or
acquire any obligations or debt or Equity Interests of, any WCG Subsidiary,
except that the Company and its Subject Subsidiaries may (1) permit to remain
outstanding, and to replace or refinance, loans and advances and other financing
arrangements to, or Equity Interest in, a WCG Subsidiary existing or owned (in
the case of such Equity Interests) as of July 31, 2002 and listed on EXHIBIT F
hereto, but no such replacement or refinancing shall exceed the amount of such
loans, advances or other amounts outstanding immediately prior to such
replacement or refinancing, (2) pursuant to the WCG Unwind Transaction, acquire
and own the promissory notes referred to in CLAUSE (ii) of the definition herein
of WCG Unwind Transaction, (3) receive any distribution from WCG or any
Subsidiary thereof in connection with the bankruptcy proceedings of WCG or any
Subsidiary thereof, and (4) purchase WCG Note Trust Bonds in accordance with
SECTION 8.18. Except for those investments permitted in SUBSECTIONS (1), (2),
(3) and (4) above, the Company shall not, and the Company shall not permit any
of its Subject Subsidiaries to, acquire or otherwise invest in Equity Interests
in, or make any loan or advance to, a WCG Subsidiary; and (ii) to the extent not
expressly permitted by the terms of this Agreement, (x) amend or modify in any
manner, or allow any of its Subject Subsidiaries to amend or modify in any
manner, the Barrett Loans or the Barrett Loan Agreement on terms or conditions
which would (1) increase the Collateral therefor to include assets not owned by
Barrett on the date hereof except for assets acquired hereafter by Barrett in
the ordinary course of business as presently conducted by Barrett, (2) shorten
the maturity of the Barrett Loans, or (3) add any additional obligors with
respect thereto, or (y) replace or refinance, or allow any of its Subject
Subsidiaries to replace or refinance, the Barrett Loans unless the Board of
Directors of the Company shall determine by resolution that



                                      43              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

such replacement or refinancing is on the best terms reasonably available to the
Company or Barrett at such time.

         8.10 Maintenance of Ownership of Certain Subsidiaries. The Company
shall not sell, issue or otherwise dispose of, or create, assume, incur or
suffer to exist any Lien on or in respect of, or permit any of its Subsidiaries
to sell, issue or otherwise dispose of or create, assume, incur or suffer to
exist any Lien on or in respect of, any Equity Interests or any direct or
indirect interest in any Equity Interests in any of its Material Subsidiaries
(other than NewGP, if applicable, the Refineries, MAPL, Seminole and their
respective Subsidiaries and the Persons or assets referenced on Schedule V);
provided, however, that this SECTION 8.10 shall not prohibit (i) Permitted
Liens, (ii) the sale or other disposition of the Equity Interests in any
Subsidiary of the Company to the Company or any Wholly-Owned Subsidiary of the
Company if, but only if, (x) there shall not exist or result a Default or Event
of Default and (y) in the case of each sale or other disposition referred to in
this proviso involving the Company or any of its Subsidiaries, such sale or
other disposition could not reasonably be expected to impair materially the
ability of the Company to perform its obligations hereunder and any other Loan
Documents and the Company shall continue to exist, (iii) any Subsidiary from
selling or otherwise disposing of any direct or indirect Equity Interests in any
Subsidiary (other than TGPL, TGT, or NWP) of the Company, (iv) any RMT Asset
Disposition, (v) the sale or other disposition of the Equity Interests in any
Subsidiary of the Company pursuant to, and in accordance with the Barrett Loan
Agreement, and (vi) any Permitted Disposition; provided that, except with
respect to any Permitted Disposition or any RMT Asset Disposition, after giving
effect to any such sale or other disposition of any Equity Interests owned
directly or indirectly by a Major Subsidiary, such Subsidiary continues to be a
Major Subsidiary. Nothing herein shall be construed to permit the Company or any
of its Subject Subsidiaries to purchase shares, any interest in shares or any
ownership interest in a WCG Subsidiary except as permitted by SECTION 8.9.

         8.11 Compliance with ERISA. The Company shall not (a) terminate, or
permit any ERISA Affiliate to terminate, any Plan so as to result in any
material liability of the Company or any Material Subsidiary (other than NewGP,
if applicable) of the Company (including for purposes of this SECTION 8.11 any
material WCG Subsidiary) or any such ERISA Affiliate to the PBGC, if such
material liability of such ERISA Affiliate could reasonably be expected to have
a material adverse effect on the Company or any of its Material Subsidiaries
(other than NewGP, if applicable), or (b) permit to occur any Termination Event
with respect to a Plan which would have a material adverse effect on the Company
or any Subject Subsidiary of the Company (including for purposes of this SECTION
8.11 any material WCG Subsidiary).

         8.12 Transactions with Related Parties. The Company shall not make any
sale to, make any purchase from, extend credit to, make payment for services
rendered by, or enter into any other transaction with, or permit any Material
Subsidiary of the Company to make any sale to, make any purchase from, extend
credit to, make payment for services rendered by, or enter into any other
transaction with, any Related Party of the Company or of such Material
Subsidiary unless as a whole such sales, purchases, extensions of credit,
rendition of services and other transactions are (at the time such sale,
purchase, extension of credit, rendition of services or other transaction is
entered into) on terms and conditions reasonably fair in all material respects
to the Company or such Material Subsidiary in the good faith judgment of the
Company.

         8.13 Guarantees. After July 31, 2002, the Company shall not enter into
any agreement to guarantee or otherwise become contingently liable for, or
permit any of its Subject Subsidiaries to guarantee or otherwise become
contingently liable for, Debt or any other obligation of any WCG Subsidiary or
to otherwise assure a WCG Subsidiary, or any creditor of a WCG Subsidiary,
against loss, except as set forth in Exhibit G.



                                      44              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         8.14 Sale and Lease-Back Transactions. The Company shall not enter
into, or permit any of its Subject Subsidiaries (other than Apco Argentina,
Inc.) to enter into, any Sale and Lease-Back Transaction, if after giving effect
thereto the Company would not be permitted to incur at least $1.00 of additional
Debt secured by a Lien permitted by PARAGRAPH (y) of SCHEDULE I.

         8.15 Use of Proceeds of Borrowings. The Company shall not use any
proceeds of any Borrowings for any purpose other than general corporate purposes
relating to the business of the Company and its Subsidiaries, but excluding any
WCG Subsidiary (including, without limitation, repurchases by the Company of its
capital stock, working capital and capital expenditures) or use any such
proceeds in any manner which violates or results in a violation of Law;
provided, however that no proceeds of any Borrowings will be used to acquire any
equity security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, (other than any purchase of common
stock of any corporation, if such purchase is not subject to Sections 13 and 14
of the Securities Exchange Act of 1934 and is not opposed, resisted or
recommended against by such corporation or its management or directors, provided
that the aggregate amount of common stock of any corporation (other than Apco
Argentina Inc., a Cayman Islands corporation) purchased during any calendar year
shall not exceed 1% of the common stock of such corporation issued and
outstanding at the time of such purchase) or in any manner which contravenes
law, and no proceeds of any Borrowings will be used to purchase or carry any
margin stock (within the meaning of or Regulation U issued by the Board of
Governors of the Federal Reserve System). The Company may not use any proceeds
of any Borrowings to make any loan or advance to, or to own, purchase or acquire
any obligations or debt securities of, any WCG Subsidiary or to acquire or
otherwise invest in any stock or other equity or other ownership interest in a
WCG Subsidiary; provided, however, that nothing contained herein shall prohibit
or otherwise restrict the ability of the Company or any Subsidiary of the
Company to use the proceeds of any Borrowing to own, purchase or acquire the WCG
Senior Notes pursuant to the WCG Refinancing Transaction.

         8.16 Asset Disposition. The Company shall not sell, lease, transfer or
otherwise dispose of, or permit any of their Material Subsidiaries or the
Guarantors to sell, lease, transfer or otherwise dispose of, any property of the
Company or any Guarantor or any Material Subsidiary of the Company, except (i)
sales of inventory in the ordinary course of business and on reasonable terms,
(ii) sales of worn out, surplus or obsolete equipment in the ordinary course of
business, if no Default exists at the time of such sale, (iii) replacement of
equipment in the ordinary course of business with other equipment at least as
useful and beneficial to the Company or its Material Subsidiaries and their
respective businesses as the equipment replaced if no Default exists at the time
of such replacement and an Acceptable Security Interest exists in such other
equipment at the time of such replacement, (iv) sales of other immaterial
Property (other than Equity Interests, Debt or other obligations of any
Subsidiary) in the ordinary course of business and on reasonable terms, if no
Default exists at the time of such sale; provided that Property may not be sold
pursuant to this CLAUSE (iv) if the aggregate fair market value of all Property
sold pursuant to this CLAUSE (iv) exceeds $250,000 in any year, (v) sales or
other dispositions of assets which are not Collateral for cash in arm's length
transactions, (vi) sales, leases, transfers or other dispositions of the
Refineries (in whole or in part, including to each other), (vii) the MAPL Asset
Disposition and Seminole Asset Disposition, (viii) sales or other dispositions
of assets of NewGP or its Subsidiaries and the transfer by Williams GP, LLC to
NewGP of the general partnership interests and incentive distribution rights in
MLP, (ix) Permitted Dispositions, (x) sale of Equity Interests in NewGP, (xi)
transfers by the Guarantors to other Guarantors and transfers by non-Guarantor
Subsidiaries to any other Subsidiary, in each case in the ordinary course of
business and (xii) transfers to the State of California of up to 6 turbines in
connection with the settlement of the California Proceedings, (xiii) the Arctic
Fox Capital Contribution, and (xiv) transfers of Assets and Property by
Subsidiaries of TGT which may not be restricted pursuant to that certain
Indenture dated as of April 11, 1994 between TGT, as Issuer and The Chase
Manhattan Bank, as Trustee; provided that (A) 50% of the gross cash proceeds
resulting from any disposition of Collateral permitted pursuant to clauses (ii),
(iv) through (vii), (ix) and (x), shall, be deposited immediately upon receipt
to the Collateral Account (as defined in the Collateral Trust Agreement) to be
maintained with, and under the



                                      45              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

control of, the Collateral Trustee pursuant to the Collateral Trust Agreement
and applied in accordance with the terms and conditions of the L/C Agreement and
the Primary Credit Agreement and (B) assets disposed of pursuant to clauses (i)
through (v) shall not constitute a material part of the assets of TGPL, TGT or
NWP and (C) with respect to any Collateral replaced, exchanged or transferred
(in the case of clause (xi) only) or any non-cash proceeds received from the
sale, transfer or other disposition of Collateral, in each case pursuant to this
SECTION 8.16, the Company (or such Material Subsidiary or Guarantor, as
applicable) shall undertake all actions as more fully set forth in, and subject
to, Section 5.01(f) of the Primary Credit Agreement to (1) grant an Acceptable
Security Interest in favor of the Collateral Trustee on any new Collateral
resulting from any such replacement or exchange or on the non-cash proceeds
received from the sale or other disposition of Collateral and (2) in the case of
Collateral transferred pursuant to clause (xi), to maintain an Acceptable
Security Interest on such transferred Collateral. Notwithstanding anything in
this SECTION 8.16 to the contrary, and for greater certainty, nothing in this
Agreement shall prohibit (1) a transfer of Equity Interests of RMT from the
Company to RMT LLC or any RMT Asset Disposition or (2) the Company or any of its
Subsidiaries (including RMT LLC, RMT and their respective Subsidiaries) from
selling, leasing, transferring or otherwise disposing of any property of the
Company or any of its Subsidiaries in accordance with the provisions of the
Barrett Loan Agreement. For the avoidance of doubt, modification or limitation
of voting rights with respect to any Equity Interests shall not constitute a
disposition of property.

         8.17 Restricted Payments. The Company shall not (i), other than in
connection with the Castle Transaction, the Arctic Fox Capital Contribution, and
the Plowshare Transaction, declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its Equity Interests now
or hereafter outstanding, return any capital to its stockholders, partners or
members (or the equivalent Persons thereof) as such, make any distribution of
assets, Equity Interests, obligations or securities to its stockholders,
partners or members (or the equivalent Person thereof) as such, or permit any of
its Subject Subsidiaries (other than Apco Argentina, Inc., TGT (to the extent
there exists any contractual restriction prohibiting the Subsidiaries of TGT
from restricting their ability to pay dividends) and their respective
Subsidiaries) to do any of the foregoing, (ii) permit any of its Subject
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value
any Equity Interests in the Company, or (iii) permit its Subject Subsidiaries to
make any prepayment with respect to any Debt (other than Debt issued or incurred
in connection with the Progeny Facilities and related documents, Debt issued or
incurred in connection with the terms of SECTION 3.2(c), Debt issued prior to
July 31, 2002 pursuant to the certain Indenture dated May 1, 1990 with Transco
Energy Company as issuer and Bank of New York as trustee, as supplemented from
time to time, the WCG Note Trust Bonds, Debt under the Barrett Loan Agreement,
Debt of Subsidiaries of TGT and Debt incurred in connection with the UBOC
Turbine Financing) or repurchase any Debt securities except any repurchase or
repayment as required by the terms thereof in effect on July 31, 2002, except
that, so long as no Default shall have occurred and be continuing at the time of
any action described in CLAUSE (a), (b) (other than with respect to RMT LLC and
its Subsidiaries) and (d) below or would result therefrom:

                  (a) the Company may (A) declare and pay cash dividends and
         distributions on its (1) 9-7/8% Cumulative Convertible Preferred
         Stock, (2) December 2000 Cumulative Convertible Preferred Stock and (3)
         March 2001 Mandatorily Convertible Single Reset Preferred Stock, (B)
         declare and pay cash dividends and distributions on TWC Preferred Stock
         issued on or after July 30, 2002 in form and substance satisfactory to
         the Administrative Agent and (C) in any Fiscal Quarter, declare and pay
         cash dividends to its holders of common stock and purchase, redeem,
         retire or otherwise acquire shares of its own outstanding common stock
         for cash if after giving effect thereto the aggregate amount of such
         dividends, purchases, redemptions, retirements and acquisitions paid or
         made in any such Fiscal Quarter would be not greater than the sum of
         $6,250,000;

                  (b) the Company or any Subsidiary of the Company may (A)
         declare and pay cash dividends to the Company or any Subsidiary of the
         Company (as the case may be) or pay subordinated



                                      46              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         loans owed to the Company or any Subsidiary of the Company (as the case
         may be), (B) declare and pay cash dividends to any other Subsidiary of
         the Company or pay subordinated loans owed to any other Subsidiary of
         the Company, in each case in the ordinary course of business consistent
         with past practice, (and payments to the holders of the Designated
         Minority Interests made concurrently with and in the same form as the
         payments to Subsidiaries of the Company);

                  (c) the Company or any Subsidiary of the Company may make
         payments to non-Subsidiaries to the extent required under Financing
         Transactions or other agreements in effect as of July 31, 2002,
         including, without limitation, payments required as a result of
         downgrade by S&P and Moody's of the Company's senior unsecured
         long-term debt rating; and

                  (d) the Company or any Subsidiary of the Company may make
         payments to non-Subsidiaries to the extent required under the
         organizational documents of the Deepwater JV.

         8.18 Investments in Other Persons. The Company shall not make or hold,
or permit any of its Subject Subsidiaries to make or hold, any Investment in any
Person, except (i) equity Investments by the Company and its Subsidiaries in
their Subsidiaries outstanding on July 31, 2002 and additional investments in
Subsidiaries engaged in businesses reasonably related to the businesses carried
on by such Company and its Subsidiaries on July 31, 2002 (including, without
limitation, the Arctic Fox Capital Contribution); provided, that any such
additional cash Investments shall not exceed $75,000,000 annually, except to the
extent such cash Investments are immediately returned to the Person making such
Investment as a dividend, distribution or repayment of Debt; (ii) loans and
advances to employees in the ordinary course of the business of the company and
its Subsidiaries as presently conducted; (iii) Investments of the company and
its Subsidiaries in Cash Equivalents; (iv) Investments existing on July 31, 2002
or commitments for such Investments existing on July 31, 2002 and loans made
pursuant to such commitments after July 31, 2002; (v) Investments by the Company
and its Subsidiaries in Hedge Agreements entered into in the ordinary course of
business and not for speculative purposes; (vi) Investments consisting of
intercompany debt; (vii) Investments consisting of (A) the purchase of WCG Note
Trust Bonds in an aggregate principal amount not to exceed $75,000 or (B) the
Equity Interests in the WCG Senior Notes Issuer; (viii) Investments by Apco
Argentina, Inc. or its Subsidiaries in accordance with applicable laws and their
governing documents; provided that such Investments shall only be made using
cash generated solely by their business, operations and financings; (ix)
Investments not exceeding $12,000,000 in Williams Coal Seam Gas Royalty Trust
units pursuant to agreements in place on the date hereof; provided that the
purchase price of such units shall not exceed the then existing market price for
such units; (x) Investments consisting of the acquisition of Equity Interests of
the Deepwater JV in exchange for the contribution of Deepwater Assets to the
Deepwater JV and Investments made to maintain such Equity Interests; (xi)
Investments in Persons that are not Subsidiaries required to be made by the
Company or any of its Subsidiaries in order to avoid default pursuant to
agreements in existence on July 31, 2002; (xii) any Investments necessary to
maintain, in accordance with the partnership agreement, the 2% general
partnership interest of NewGP in the MLP; provided, that the aggregate annual
amount of such Investments under this clause (xii) shall not exceed $10,000,000,
(xiii) Investments permitted pursuant to SECTION 8.9, (xiv) the Investment in
the 0.2% general partnership interest in West Texas LPG Pipelines, (xv)
Investments by EMT contemplated by the UBOC Turbine Financing, and (xvi) other
Investments in an aggregate amount invested not to exceed $50,000,000 annually;
provided that, with respect to Investments made under this clause (xvi), (1) any
newly acquired or organized Subsidiary of the Company or any of its Subsidiaries
shall be a wholly-owned Subsidiary thereof; (2) immediately before and after
giving effect thereto, no Default shall have occurred and be continuing or would
result therefrom; and (3) any company or business acquired or invested in
pursuant to this clause (xvi) shall be in the same line of business as the
business of the Company or any of its Subsidiaries.



                                      47              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         8.19 Subsidiary Debt. The Company shall not permit any of its Subject
Subsidiaries to create, incur, assume or suffer to exist Debt, other than
(except as set forth in either Section 6(f) of the LLC Guaranty or Section 6(e)
of the Holdings Guaranty) (i) Debt incurred, assumed or suffered to exist by
TGPL, TGT, NWP, or Apco Argentina, Inc. or their Subsidiaries, (ii) Debt
incurred, assumed or suffered to exist by Subsidiaries (other than those
referred to in CLAUSE (i) and the Subsidiaries the stock of which is pledged
under the Pledge Agreement (as defined in the L/C Agreement)) in an aggregate
amount not to exceed $50,000,000 at any one time outstanding, (iii) Debt in
existence on July 31, 2002, (iv) Debt under the LLC Guaranty, the Midstream
Guaranty and the Holdings Guaranty, (v) Debt of the Project Financing
Subsidiaries, (vi) Debt under the Barrett Loan Agreement, (vii) Debt consisting
of intercompany debt so long as obligations of the debtors thereunder are
subordinated to their obligations under the Loan Papers and are incurred in the
ordinary course of the cash management systems of the Company and its
Subsidiaries, (viii) any Permitted Refinancing Debt incurred in exchange for, or
the net proceeds of which are used to refund, refinance or replace Debt
permitted to be incurred under this SECTION 8.19, and (ix) Debt incurred in
connection with the Deepwater Transactions and the UBOC Turbine Financing.

         8.20 Compliance with Primary Credit Agreement. The Company shall, and
shall cause each of the other "Borrowers" under the Primary Credit Agreement to
comply at all times with the terms and provisions of ARTICLE V of the Primary
Credit Agreement as in effect on the date hereof.

         8.21 Borrower Liquidity Reserve. The Company shall cause RMT to at all
times maintain the Borrower Liquidity Reserve (as defined in the Barrett Loan
Agreement).

         8.22 Replacement of Legacy L/C with Letter of Credit. The Company shall
cause the issuance of a letter of credit to replace a Legacy L/C to the extent
the replacement of such Legacy L/C shall be necessary to prevent the occurrence
of a default in relation to, and draw on, such Legacy L/C.

         8.23 Agreement to Restrict Transfers to NewGP. The Company shall not,
transfer, or permit any of its Subject Subsidiaries to transfer, any property to
NewGP, except a transfer to NewGP of the Equity Interest in MLP held by Williams
GP LLC or any other transfer necessary to maintain the 2% general partnership
interest of NewGP in MLP; provided that the aggregate annual amount of such
Investments under this SECTION 8.23 shall not exceed $10,000,000.

         8.24 Cash Collateralization of Legacy L/Cs. From July 31, 2002, the
Company shall not prepay any Progeny Facility or reduce the commitment of any
lender under any Progeny Facility, or cash collateralize any Legacy L/C;
provided that the Company may (i) prepay any Progeny Facility, (ii) reduce the
commitment of any lender under any Progeny Facility and (iii) cash collateralize
any Legacy L/Cs under any of the following circumstances:

         (1)      the Company may apply Net Cash Proceeds as required by SECTION
                  3.2(c);

         (2)      the Company may pay principal of a Progeny Facility as such
                  principal matures, and make any required prepayment or
                  reduction of the commitments of any lender thereunder, in each
                  case in accordance with the terms of such Progeny Facility in
                  effect on July 31, 2002, and may prepay any such Progeny
                  Facility simultaneously with the disposition of the assets
                  associated with such Progeny Facility;

         (3)      the Company may make prepayments, reductions of commitments
                  and cash collateralizations on a pro-rata basis to (x) the
                  permanent ratable reduction of the outstanding amounts of the
                  Progeny Facilities and (y) cash collateralize the Legacy L/Cs
                  until and unless the Legacy L/Cs are fully cash
                  collateralized, in which case such prepayments, reductions of
                  commitments or



                                      48              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

                  cash collateralizations may be made on a pro-rata basis to the
                  permanent ratable reduction of the outstanding amounts of the
                  Progeny Facilities;

         (4)      the Company, in its sole absolute discretion, may make any
                  prepayment, commitment reduction or cash collateralization of
                  the type set forth in clauses (i) through (iii) above in an
                  aggregate amount not to exceed $65,000,000 per annum; and

         (5)      the Company may prepay, defease or otherwise satisfy in whole
                  or in part all of its obligations arising under the Letter of
                  Credit and Reimbursement Agreement dated as of May 15, 1994,
                  among Tulsa Parking Authority, the Company, Bank of Oklahoma,
                  National Association, and Bank of America, N.A. (formerly
                  NationsBank of Texas, N.A.), relative to Tulsa Parking
                  Authority First Mortgage Revenue Bonds, as amended, and all
                  documents, instruments, agreements, certificates and notices
                  at any time executed and/or delivered in connection therewith.

         For the avoidance of doubt, nothing in this SECTION 8.24 shall limit or
restrict the Company from any payment or taking any action that is required by
the terms of any Progeny Facility or Legacy L/Cs in effect on the date hereof.

SECTION  9   DEFAULT.  The term "DEFAULT" means the occurrence and continuance
             of any one or more of the following events:

         9.1 Payment of Obligation. The Company (i) shall fail to pay all or any
part of the principal of the Obligation when the same becomes due (whether by
its terms, by acceleration, or as otherwise provided in the Loan Papers), (ii)
shall fail to pay any interest on the Principal Debt when the same becomes due
and payable, or (iii) shall fail to pay any other part of the Obligation
(including, without limitation, fees) within ten (10) days of when the same
becomes due (whether by its terms, by acceleration, or as otherwise provided in
the Loan Papers).

         9.2 Misrepresentation. Any representation or warranty made by the
Company or any Guarantor (or any of their respective officers) in writing under
or in connection with this Agreement or in any other Loan Paper or in any
certificate furnished under or in connection herewith shall prove to have been
incorrect in any material respect when made.

         9.3 Covenants. The Company or any Guarantor shall fail to perform or
observe (i) any term, covenant or agreement contained in SECTION 8.2 on its part
to be performed or observed and such failure shall continue for ten (10)
Business Days after the earlier of the date notice thereof shall have been given
to the Company by the Administrative Agent or any Lender or the date the Company
shall have knowledge of such failure, (ii) any term, covenant or agreement
contained in this Agreement (other than a term, covenant or agreement contained
in SECTION 8.2 or SECTIONS 8.5 - 8.24) or any Note or any other Loan Paper on
its part to be performed or observed; and such failure shall continue for five
(5) Business Days after the earlier of the date notice thereof shall have been
given to the Company by the Administrative Agent or any Lender or the date the
Company or such Guarantor, as applicable shall have knowledge of such failure;
or (iii) any term, covenant or agreement contained in SECTION 8.5 - 8.24.

         9.4 Default Under Other Debt. The Company or any of its Subsidiaries
shall fail to pay any principal of or premium or interest on any Debt which is
outstanding in a principal amount of at least $60,000,000 in the aggregate of
the Company or such Subsidiary (as the case may be), when the same becomes due
and payable (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or



                                      49              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

instrument relating to such Debt; or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Debt and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable, or required to be prepaid
(other than (i) by a regularly scheduled required prepayment, (ii) as required
in connection with any permitted sale of assets, (iii) as required in connection
with any casualty or condemnation, or (iv) or as a result of the giving of
notice of a voluntary prepayment), prior to the stated maturity thereof;
provided, however, that the provisions of this SECTION 9.4 shall not apply to
any Non-Recourse Debt of any Non-Borrowing Subsidiary (as defined in the Primary
Credit Agreement) of the Company.

         9.5 Debtor Relief. The Company or any of its Material Subsidiaries
shall generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against the Company or any of its Material Subsidiaries seeking to
adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), shall remain undismissed or
unstayed for a period of sixty (60) days; or the Company or any of its Material
Subsidiaries shall take any action to authorize any of the actions set forth
above in this SECTION 9.5.

         9.6 Judgments. Any judgment or order for the payment of money in excess
of $60,000,000 shall be rendered against the Company or any of its Material
Subsidiaries and remain unsatisfied and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or (ii) there
shall be any period of thirty (30) consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect.

         9.7 Employee Benefit Plans.

                  (a) Any Termination Event with respect to a Plan shall have
         occurred and, thirty (30) days after notice thereof shall have been
         given to the Company by the Administrative Agent, (i) such Termination
         Event shall still exist and (ii) the sum (determined as of the date of
         occurrence of such Termination Event) of the Insufficiency of such Plan
         and the Insufficiency of any and all other Plans with respect to which
         a Termination Event shall have occurred and then exist (or in the case
         of a Plan with respect to which a Termination Event described in CLAUSE
         (b) of the definition of Termination Event shall have occurred and then
         exist, the liability related thereto) is equal to or greater than
         $75,000,000; or

                  (b) The Company or any ERISA Affiliate shall have been
         notified by the sponsor of a Multiemployer Plan that it has incurred
         Withdrawal Liability to such Multiemployer Plan in an amount which,
         when aggregated with all other amounts required to be paid to
         Multiemployer Plans in connection with Withdrawal Liabilities
         (determined as of the date of such notification), exceeds $75,000,000
         or requires payments exceeding $50,000,000 per annum; or

                  (c) The Company or any ERISA Affiliate shall have been
         notified by the sponsor of a Multiemployer Plan that such Multiemployer
         Plan is in reorganization or is being terminated, within the meaning of
         Title IV of ERISA, if as a result of such reorganization or termination
         the aggregate annual contributions of the Company and its ERISA
         Affiliates to all Multiemployer Plans which are then in reorganization
         or being terminated have been or will be increased over the amounts
         contributed



                                      50              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT


<PAGE>

         to such Multiemployer Plans for the respective plan years which include
         July 31, 2002 by an amount exceeding $75,000,000.

         9.8 Validity and Enforceability of Loan Papers. Any provision (other
than any provision excepted from, or subject to a qualification in, the opinions
delivered pursuant to Item 9 of Schedule 6.1, but only to the extent of such
exception or qualification) of any Loan Paper for any reason shall cease to be a
legal, valid, binding and enforceable obligation of the Company or any Guarantor
party thereto or the Company or any Guarantor party thereto shall so state in
writing.

SECTION 10  RIGHTS AND REMEDIES

         10.1 Remedies Upon Default.

                  (a) If a Default exists under SECTION 9.5, the entire unpaid
         balance of the Obligation under the Term Facility shall automatically
         become due and payable without any action or notice of any kind
         whatsoever.

                  (b) If any Default exists, Administrative Agent may (and,
         subject to the terms of SECTION 11, shall upon the request of
         Determining Lenders) or Determining Lenders may, do any one or more of
         the following: (i) if the maturity of the Obligation under the Term
         Facility has not already been accelerated under SECTION 10.1(a),
         declare the entire unpaid balance of the Obligation, or any part
         thereof, immediately due and payable, whereupon it shall be due and
         payable; (ii) reduce any claim to judgment; (iii) to the extent
         permitted by Law, exercise (or request each Lender to, and each Lender
         shall be entitled to, exercise) the Rights of offset or banker's Lien
         against the interest of the Company in and to every account and other
         property of the Company which are in the possession of Administrative
         Agent or any Lender to the extent of the full amount of the Obligation
         (to the extent permitted by Law, the Company being deemed directly
         obligated to each Lender in the full amount of the Obligation for such
         purposes); and (iv) exercise any and all other legal or equitable
         Rights afforded by the Loan Papers, the Laws of the State of New York,
         or any other applicable jurisdiction as Administrative Agent shall deem
         appropriate, or otherwise, including, but not limited to, the Right to
         bring suit or other proceedings before any Governmental Authority
         either for specific performance of any covenant or condition contained
         in any of the Loan Papers or in aid of the exercise of any Right
         granted to Administrative Agent or any Lender in any of the Loan
         Papers.

         10.2 The Company Waivers. To the extent permitted by Law, the Company
hereby waives presentment and demand for payment, protest, notice of intention
to accelerate, notice of acceleration, and notice of protest and nonpayment, and
agrees that its liability with respect to the Obligation (or any part thereof),
shall not be affected by any renewal or extension in the time of payment of the
Obligation (or any part thereof), by any indulgence, or by any release or change
in any security for the payment of the Obligation (or any part thereof).

         10.3 Performance by Administrative Agent. If any covenant, duty, or
agreement of the Company is not performed in accordance with the terms of the
Loan Papers, after the occurrence and during the continuance of a Default,
Administrative Agent may, at its option (but subject to the approval of
Determining Lenders), perform or attempt to perform such covenant, duty, or
agreement on behalf of the Company. In such event, any amount expended by
Administrative Agent in such performance or attempted performance shall be
payable by the Company, to Administrative Agent on demand, shall become part of
the Obligation, and shall bear interest at the Default Rate from the date of
such expenditure by Administrative Agent until paid. Notwithstanding the
foregoing, it is expressly understood that Administrative Agent does not assume
and shall



                                      51              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

never have, except by its express written consent, any liability or
responsibility for the performance of any covenant, duty, or agreement of the
Company.

         10.4 Delegation of Duties and Rights. Lenders may perform any of their
duties or exercise any of their Rights under the Loan Papers by or through their
respective Representatives (provided, that such delegation does not release any
Lender of any of its obligations hereunder).

         10.5 Not in Control. Nothing in any Loan Paper shall, or shall be
deemed to (a) give any Agent or any Lender the Right to exercise control over
the assets (including real property), affairs, or management of the Company, (b)
preclude or interfere with compliance by the Company with any Law, or (c)
require any act or omission by the Company that may be harmful to Persons or
property. Any "material adverse event" or other materiality qualifier in any
representation, warranty, covenant, or other provision of any Loan Paper is
included for credit documentation purposes only and shall not, and shall not be
deemed to, mean that any Agent or any Lender acquiesces in any non-compliance by
the Company with any Law or document, or that any Agent or any Lender does not
expect the Company to promptly, diligently, and continuously carry out all
appropriate removal, remediation, and termination activities required or
appropriate in accordance with all Environmental Protection Statutes. No Agent
or Lender has any fiduciary relationship with or fiduciary duty to the Company
arising out of or in connection with the Loan Papers, and the relationship
between Agents and Lenders, on the one hand, and the Company, on the other hand,
in connection with the Loan Papers is solely that of debtor and creditor. The
power of Agents and Lenders under the Loan Papers is limited to the Rights
provided in the Loan Papers, which Rights exist solely to assure payment and
performance of the Obligation and may be exercised in a manner calculated by
Agents and Lenders in their respective good faith business judgment.

         10.6 Course of Dealing. The acceptance by Administrative Agent or
Lenders at any time and from time to time of partial payment on the Obligation
shall not be deemed to be a waiver of any Default then existing. No waiver by
Administrative Agent, Determining Lenders, or Lenders of any Default shall be
deemed to be a waiver of any other then-existing or subsequent Default. No delay
or omission by Administrative Agent, Determining Lenders, or Lenders in
exercising any Right under the Loan Papers shall impair such Right or be
construed as a waiver thereof or any acquiescence therein, nor shall any single
or partial exercise of any such Right preclude other or further exercise
thereof, or the exercise of any other Right under the Loan Papers or otherwise.

         10.7 Cumulative Rights. All Rights available to Administrative Agent
and Lenders under the Loan Papers are cumulative of and in addition to all other
Rights granted to Administrative Agent and Lenders at law or in equity, whether
or not the Obligation is due and payable and whether or not Administrative Agent
or Lenders have instituted any suit for collection, foreclosure, or other action
in connection with the Loan Papers.

         10.8 Application of Proceeds. Any and all proceeds ever received by
Administrative Agent or Lenders from the exercise of any Rights pertaining to
the Obligation shall be applied to the Obligation in the order and manner set
forth in SECTION 3.11.

         10.9 Limitation of Rights. Notwithstanding any other provision of this
Agreement or any other Loan Paper, any action taken or proposed to be taken by
Administrative Agent or any Lender under any Loan Paper which would affect the
operational, voting, or other control of the Company, shall be pursuant to any
applicable state Law, and the applicable rules and regulations thereunder.

         10.10 Expenditures by Lenders. The Company shall promptly pay within
thirty (30) days after request therefor (a) all reasonable costs, fees, and
expenses paid or incurred by any Agent incident to any Loan



                                      52              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

Paper (including, but not limited to, the reasonable fees and expenses of
counsel to Administrative Agent and the allocated cost of internal counsel in
connection with the negotiation, preparation, delivery, execution, coordination,
and administration of the Loan Papers and any related amendment, waiver, or
consent) and (b) following the occurrence and continuation of a Default, all
reasonable costs and expenses of Lenders and Administrative Agent incurred by
Administrative Agent or any Lender in connection with the enforcement of the
obligations of the Company arising under the Loan Papers (including, without
limitation, costs and expenses incurred in connection with any workout or
bankruptcy) or the exercise of any Rights arising under the Loan Papers
(including, but not limited to, reasonable attorneys' fees including allocated
cost of internal counsel, court costs and other costs of collection), all of
which shall be a part of the Obligation and shall bear interest at the Default
Rate from the date due until the date repaid by the Company.

         10.11 INDEMNIFICATION. THE COMPANY AGREES TO INDEMNIFY AND HOLD
HARMLESS EACH AGENT, ARRANGER, AND EACH LENDER AND EACH OF THEIR RESPECTIVE
AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
ATTORNEYS, AND ADVISORS (EACH, AN "INDEMNIFIED PARTY") FROM AND AGAINST ANY AND
ALL CLAIMS, DAMAGES, ACTUAL LOSSES, LIABILITIES, COSTS, AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) (BUT SPECIFICALLY EXCLUDING
TAXES), THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY INDEMNIFIED
PARTY, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY REASON OF
(INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY INVESTIGATION,
LITIGATION, OR PROCEEDING OR PREPARATION OF DEFENSE IN CONNECTION THEREWITH) THE
LOAN PAPERS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR
PROPOSED USE OF THE PROCEEDS OF THE BORROWINGS (INCLUDING ANY OF THE FOREGOING
ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED PARTY), EXCEPT TO THE EXTENT SUCH
CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE IS FOUND IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR
VIOLATION OF ANY LAW OR REGULATION BY SUCH INDEMNIFIED PARTY; PROVIDED, THAT THE
COMPANY SHALL HAVE NO OBLIGATION HEREUNDER TO ANY AGENT OR ANY LENDER WITH
RESPECT TO INDEMNIFIED LIABILITIES ARISING FROM (i) THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF ANY AGENT OR ANY SUCH LENDER, (ii) LEGAL PROCEEDINGS
COMMENCED AGAINST ANY AGENT OR ANY SUCH LENDER BY ANY SECURITY HOLDER OR
CREDITOR THEREOF ARISING OUT OF AND BASED UPON RIGHTS AFFORDED ANY SUCH SECURITY
HOLDER OR CREDITOR SOLELY IN ITS CAPACITY AS SUCH, OR (iii) LEGAL PROCEEDINGS
COMMENCED AGAINST ANY AGENT OR ANY SUCH LENDER BY ANY OTHER LENDER OR BY ANY
PARTICIPANT (AS DEFINED IN SECTION 12.13). IN THE CASE OF AN INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 10.11
APPLIES, EXCEPT AS PROVIDED ABOVE, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR
NOT SUCH INVESTIGATION, LITIGATION, OR PROCEEDING IS BROUGHT BY THE COMPANY, ITS
DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY OTHER PERSON
OR ANY INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. THE PARTIES HERETO AGREE NOT
TO ASSERT ANY CLAIM AGAINST ANY PARTY ON ANY THEORY OF LIABILITY, FOR SPECIAL,
INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE
RELATING TO THE LOAN PAPERS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE
ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE BORROWINGS. WITHOUT PREJUDICE TO
THE SURVIVAL OF ANY OTHER AGREEMENT OF THE COMPANY HEREUNDER, THE AGREEMENTS AND
OBLIGATIONS OF THE COMPANY CONTAINED IN THIS SECTION 10.11 SHALL SURVIVE THE
PAYMENT IN FULL OF THE BORROWINGS AND ALL OTHER AMOUNTS PAYABLE UNDER THIS
AGREEMENT.

SECTION 11  AGREEMENT AMONG LENDERS

         11.1 Administrative Agent.



                                      53              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

                  (a) Each Lender hereby appoints Credit Lyonnais New York
         Branch (and Credit Lyonnais New York Branch hereby accepts such
         appointment) as its nominee and agent, in its name and on its behalf:
         (i) to act as nominee for and on behalf of such Lender in and under all
         Loan Papers; (ii) to arrange the means whereby the funds of Lenders are
         to be made available to the Company under the Loan Papers; (iii) to
         take such action as may be requested by any Lender under the Loan
         Papers (when such Lender is entitled to make such request under the
         Loan Papers and after such requesting Lender has obtained the
         concurrence of such other Lenders as may be required under the Loan
         Papers); (iv) to receive all documents and items to be furnished to
         Lenders under the Loan Papers; (v) to be the secured party, mortgagee,
         beneficiary, and similar party in respect of, and to receive, as the
         case may be, any collateral for the benefit of Lenders; (vi) to timely
         distribute, and Administrative Agent agrees to so distribute, to each
         Lender all material information, requests, documents, and items
         received from the Company under the Loan Papers (including written
         disclosures pursuant to SECTION 8.2 (other than pursuant to SECTION
         8.2(d), which shall only be distributed to the requesting Lender),
         SECTION 7.6 and SECTION 7.11); (vii) to promptly distribute to each
         Lender its ratable part of each payment or prepayment (whether
         voluntary, as proceeds of collateral upon or after foreclosure, as
         proceeds of insurance thereon, or otherwise) in accordance with the
         terms of the Loan Papers; (viii) to deliver to the appropriate Persons
         requests, demands, approvals, and consents received from Lenders; and
         (ix) to execute, on behalf of Lenders, such releases or other documents
         or instruments as are permitted by the Loan Papers or as directed by
         Lenders or Determining Lenders (when entitled to so authorize) from
         time to time; provided, however, Administrative Agent shall not be
         required to take any action which exposes Administrative Agent to
         personal liability or which is contrary to the Loan Papers or
         applicable Law.

                  (b) Administrative Agent may resign at any time as
         Administrative Agent under the Loan Papers by giving written notice
         thereof to Lenders. Should the initial or any successor Administrative
         Agent ever cease to be a party hereto or should the initial or any
         successor Administrative Agent ever resign as Administrative Agent,
         then Determining Lenders shall elect the successor Administrative Agent
         from among the Lenders (other than the resigning Administrative Agent).
         If no successor Administrative Agent shall have been so appointed by
         Determining Lenders, within 30 days after the retiring Administrative
         Agent's giving of notice of resignation, then the retiring
         Administrative Agent may, on behalf of Lenders, appoint a successor
         Administrative Agent, which shall be a commercial bank having a
         combined capital and surplus of at least $1,000,000,000. Upon the
         acceptance of any appointment as Administrative Agent under the Loan
         Papers by a successor Administrative Agent, such successor
         Administrative Agent shall thereupon succeed to and become vested with
         all the Rights of the retiring Administrative Agent, and the retiring
         Administrative Agent shall be discharged from its duties and
         obligations of Administrative Agent under the Loan Papers and each
         Lender shall execute such documents as any Lender may reasonably
         request to reflect such change in and under the Loan Papers. After any
         retiring Administrative Agent's resignation as Administrative Agent
         under the Loan Papers, the provisions of this SECTION 11 shall inure to
         its benefit as to any actions taken or omitted to be taken by it while
         it was Administrative Agent under the Loan Papers.

                  (c) Administrative Agent, in its capacity as a Lender, shall
         have the same Rights under the Loan Papers as any other Lender and may
         exercise the same as though it were not acting as Administrative Agent;
         the term "Lender" shall, unless the context otherwise indicates,
         include Administrative Agent; and any resignation of Administrative
         Agent hereunder shall not impair or otherwise affect any Rights which
         it has or may have in its capacity as an individual Lender. Each Lender
         and the Company agree that Administrative Agent is not a fiduciary for
         Lenders or for the Company but simply is acting in the capacity
         described herein to alleviate administrative burdens for both the
         Company and Lenders, that Administrative Agent has no duties or
         responsibilities to Lenders



                                      54              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         or the Company except those expressly set forth herein, and that
         Administrative Agent in its capacity as a Lender has all Rights of any
         other Lender.

                  (d) Administrative Agent and its Affiliates may now or
         hereafter be engaged in one or more loan, letter of credit, leasing, or
         other financing transactions with the Company, act as trustee or
         depositary for the Company, or otherwise be engaged in other
         transactions with the Company (collectively, the "OTHER ACTIVITIES")
         not the subject of the Loan Papers. Without limiting the Rights of
         Lenders specifically set forth in the Loan Papers, Administrative Agent
         and its Affiliates shall not be responsible to account to Lenders for
         such other activities, and no Lender shall have any interest in any
         other activities, any present or future guaranties by or for the
         account of the Company which are not contemplated or included in the
         Loan Papers, any present or future offset exercised by Administrative
         Agent and its Affiliates in respect of such other activities, any
         present or future property taken as security for any such other
         activities, or any property now or hereafter in the possession or
         control of Administrative Agent or its Affiliates which may be or
         become security for the obligations of the Company arising under the
         Loan Papers by reason of the general description of indebtedness
         secured or of property contained in any other agreements, documents or
         instruments related to any such other activities; provided that, if any
         payments in respect of such guaranties or such property or the proceeds
         thereof shall be applied to reduction of the obligations of the Company
         arising under the Loan Papers, then each Lender shall be entitled to
         share in such application ratably. Each Lender acknowledges that, and
         consents to, Credit Lyonnais New York Branch's also serving as
         Administrative Agent under that certain Letter of Credit and
         Reimbursement Agreement of even date herewith among the Company, Credit
         Lyonnais New York Branch, as " Administrative Agent," and certain
         financial institutions party thereto.

         11.2 Expenses. Upon demand by Administrative Agent, each Lender shall
pay its Pro Rata Part of any reasonable expenses (including, without limitation,
court costs, reasonable attorneys' fees and other costs of collection) incurred
by Administrative Agent in connection with any of the Loan Papers if and to the
extent Administrative Agent does not receive reimbursement therefor from other
sources within 60 days after incurred; provided that, each Lender shall be
entitled to receive its Pro Rata Part of any reimbursement for such expenses, or
part thereof, which Administrative Agent subsequently receives from such other
sources.

         11.3 Proportionate Absorption of Losses. Except as otherwise provided
in the Loan Papers, nothing in the Loan Papers shall be deemed to give any
Lender any advantage over any other Lender insofar as the Obligation arising
under the Loan Papers is concerned, or to relieve any Lender from absorbing its
Pro Rata Part of any losses sustained with respect to the Obligation (except to
the extent such losses result from unilateral actions or inactions of any Lender
that are not made in accordance with the terms and provisions of the Loan
Papers).

         11.4 Delegation of Duties; Reliance. Administrative Agent may perform
any of its duties or exercise any of its Rights under the Loan Papers by or
through its Representatives. Administrative Agent and its Representatives shall
(a) be entitled to rely upon (and shall be protected in relying upon) any
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telecopy, telegram, telex or teletype message, statement, order, or other
documents or conversation believed by it or them to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinion of counsel selected by Administrative Agent, (b) be
entitled to deem and treat each Lender as the owner and holder of the Principal
Debt owed to such Lender for all purposes until, subject to SECTION 12.13,
written notice of the assignment or transfer thereof shall have been given to
and received by Administrative Agent (and any request, authorization, consent,
or approval of any Lender shall be conclusive and binding on each subsequent
holder, assignee, or transferee of the Principal Debt owed to such Lender or
portion thereof until such notice is given and received), (c) not be deemed to
have notice of the occurrence of a Default unless a responsible officer of



                                      55              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

Administrative Agent, who handles matters associated with the Loan Papers and
transactions thereunder, has actual knowledge thereof or Administrative Agent
has been notified thereof by a Lender or the Company, and (d) be entitled to
consult with legal counsel (including counsel for the Company), independent
accountants and other experts selected by Administrative Agent and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts.

         11.5 Limitation of Liability.

                  (a) None of the Agents or any of their respective
         Representatives shall be liable for any action taken or omitted to be
         taken by it or them under the Loan Papers in good faith and reasonably
         believed by it or them to be within the discretion or power conferred
         upon it or them by the Loan Papers or be responsible for the
         consequences of any error of judgment, except for fraud, gross
         negligence, or willful misconduct; and none of the Agents, or any of
         their respective Representatives has a fiduciary relationship with any
         Lender by virtue of the Loan Papers (provided that nothing herein shall
         negate the obligation of Administrative Agent to account for funds
         received by it for the account of any Lender).

                  (b) Unless indemnified to its satisfaction against loss, cost,
         liability, and expense, no Agent shall be compelled to do any act under
         the Loan Papers or to take any action toward the execution or
         enforcement of the powers thereby created or to prosecute or defend any
         suit in respect of the Loan Papers. If Administrative Agent requests
         instructions from Lenders or Determining Lenders, as the case may be,
         with respect to any act or action (including, but not limited to, any
         failure to act) in connection with any Loan Paper, such Agent shall be
         entitled (but shall not be required) to refrain (without incurring any
         liability to any Person by so refraining) from such act or action
         unless and until it has received such instructions. In no event,
         however, shall any Agent or any of its respective Representatives be
         required to take any action which it or they determine could incur for
         it or them criminal or onerous civil liability. Without limiting the
         generality of the foregoing, no Lender shall have any right of action
         against any Agent as a result of such Agent's acting or refraining from
         acting hereunder in accordance with the instructions of Determining
         Lenders.

                  (c) No Agent shall be responsible in any manner to any Lender
         or any Participant for, and each Lender represents and warrants that it
         has not relied upon any Agent in respect of, (i) the creditworthiness
         of the Company and the risks involved to such Lender, (ii) the
         effectiveness, enforceability, genuineness, validity, or the due
         execution of any Loan Paper, (iii) any representation, warranty,
         document, certificate, report, or statement made therein or furnished
         thereunder or in connection therewith, (iv) the existence, priority, or
         perfection of any Lien hereafter granted or purported to be granted
         under any Loan Paper, or (v) observation of or compliance with any of
         the terms, covenants, or conditions of any Loan Paper on the part of
         the Company. Each Lender agrees to indemnify Agents and their
         respective Representatives and hold them harmless from and against (but
         limited to such Lender's Pro Rata Part of) any and all liabilities,
         obligations, losses, damages, penalties, actions, judgments, suits,
         costs, reasonable expenses, and reasonable disbursements of any kind or
         nature whatsoever which may be imposed on, asserted against, or
         incurred by them in any way relating to or arising out of the Loan
         Papers or any action taken or omitted by them under the Loan Papers, to
         the extent such Agents and their respective Representatives are not
         reimbursed for such amounts by the Company (provided that, no Agent or
         its Representatives shall have the right to be indemnified hereunder
         for its or their own fraud, gross negligence, or willful misconduct);
         and provided, further, that no Designated Lender shall be liable for
         any payment under this SECTION 11.5(c) so long as, and to the extent
         that, its Designating Lender makes such payments in accordance with,
         and at the time required by, the terms of this Agreement.



                                      56              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         11.6 Default; Collateral. Upon the occurrence and continuance of a
Default, Lenders agree to promptly confer in order that Determining Lenders or
Lenders, as the case may be, may agree upon a course of action for the
enforcement of the Rights of Lenders; and Administrative Agent shall be entitled
to refrain from taking any action (without incurring any liability to any Person
for so refraining) unless and until Administrative Agent shall have received
instructions from Determining Lenders. In actions with respect to any property
of the Company, Administrative Agent is acting for the ratable benefit of each
Lender. Any and all agreements to subordinate (whether made heretofore or
hereafter) other indebtedness or obligations of the Company to the Obligation
shall be construed as being for the ratable benefit of each Lender. If
Administrative Agent acquires any security for the Obligation or any guaranty of
the Obligation upon or in lieu of foreclosure, the same shall be held for the
Pro Rata benefit of all Lenders.

         11.7 Limitation of Liability. To the extent permitted by Law (a) no
Agent (acting in their respective agent capacities) shall incur any liability to
any other Lender or Participant except for acts or omissions resulting from its
own fraud, gross negligence or wilful misconduct, and (b) no Agent, Lender, or
Participant shall incur any liability to any other Person for any act or
omission of any other Lender, Agent, or Participant.

         11.8 Relationship of Lenders. Nothing herein shall be construed as
creating a partnership or joint venture among Agents and Lenders.

         11.9 Benefits of Agreement. Except for the representations and
covenants in SECTION 11.1(c) in favor of the Company, none of the provisions of
this SECTION 11 shall inure to the benefit of the Company or any other Person
other than Lenders; consequently, neither the Company nor any other Person shall
be entitled to rely upon, or to raise as a defense, in any manner whatsoever,
the failure of any Agent or Lender to comply with such provisions.

         11.10 Agents. None of the Lenders identified in this Agreement as
"SYNDICATION AGENT" or "DOCUMENTATION AGENT" shall have any rights, powers,
obligations, liabilities, responsibilities, or duties under this Agreement other
than those applicable to all Lenders as such. Without limiting the foregoing,
none of the Lenders so identified as a "SYNDICATION AGENT" or "DOCUMENTATION
AGENT" shall have or be deemed to have any fiduciary relationship with any
Lender.

         11.11 Obligation Several. The obligations of Lenders hereunder are
several, and each Lender hereunder shall not be responsible for the obligations
of the other Lenders hereunder, nor will the failure of one Lender to perform
any of its obligations hereunder relieve the other Lenders from the performance
of their respective obligations hereunder.

SECTION 12  MISCELLANEOUS

         12.1 Headings. The headings, captions, and arrangements used in any of
the Loan Papers are, unless specified otherwise, for convenience only and shall
not be deemed to limit, amplify, or modify the terms of the Loan Papers, nor
affect the meaning thereof.

         12.2 Nonbusiness Days. In any case where any payment or action is due
under any Loan Paper on a day which is not a Business Day, such payment or
action may be delayed until the next-succeeding Business Day, but interest and
fees shall continue to accrue in respect of any payment to which it is
applicable until such payment is in fact made; provided that, if in the case of
any such payment in respect of a Eurodollar Rate Borrowing the next-succeeding
Business Day is in the next calendar month, then such payment shall be made on
the next-preceding Business Day.



                                      57              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         12.3 Communications. Unless specifically otherwise provided, whenever
any Loan Paper requires or permits any consent, approval, notice, request, or
demand from one party to another, such communication must be in writing (which
may be by telex or telecopy) to be effective and shall be deemed to have been
given (a) if by telex, when transmitted to the telex number, if any, for such
party, and the appropriate answer back is received, (b) if by telecopy, when
transmitted to the telecopy number for such party (and all such communications
sent by telecopy shall be confirmed promptly thereafter by personal delivery or
mailing in accordance with the provisions of this section; provided, that any
requirement in this parenthetical shall not affect the date on which such
telecopy shall be deemed to have been delivered), (c) if by mail, on the third
Business Day after it is enclosed in an envelope, properly addressed to such
party, properly stamped, sealed, and deposited in the appropriate official
postal service, or (d) if by any other means, when actually delivered to such
party. Until changed by notice pursuant hereto, the address (and telex and
telecopy numbers, if any) for Administrative Agent and each Lender is set forth
on SCHEDULE 2.1, and for the Company is the address set forth by the Company's
signature on the signature page of this Agreement. A copy of each communication
to Administrative Agent shall also be sent to Haynes and Boone, LLP, 901 Main
Street, Dallas, Texas 75202, Fax: 214/651-5940, Attn: Timothy Powers.

         12.4 Form and Number of Documents. Each agreement, document,
instrument, or other writing to be furnished under any provision of this
Agreement must be in form and substance and in such number of counterparts as
may be reasonably satisfactory to Administrative Agent and its counsel.

         12.5 Exceptions to Covenants. The Company shall not take any action or
fail to take any action which is permitted as an exception to any of the
covenants contained in any Loan Paper if such action or omission would result in
the breach of any other covenant contained in any of the Loan Papers.

         12.6 Survival. All covenants, agreements, undertakings,
representations, and warranties made in any of the Loan Papers shall survive all
closings under the Loan Papers and, except as otherwise indicated, shall not be
affected by any investigation made by any party. All rights of, and provisions
relating to, reimbursement and indemnification of any Agent or any Lender shall
survive termination of this Agreement and payment in full of the Obligation.

         12.7 GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE PARTIES TO THE LOAN
PAPERS AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION OF THE
LOAN PAPERS.

         12.8 Invalid Provisions. If any provision in any Loan Paper is held to
be illegal, invalid, or unenforceable, such provision shall be fully severable;
the appropriate Loan Paper shall be construed and enforced as if such provision
had never comprised a part thereof; and the remaining provisions thereof shall
remain in full force and effect and shall not be affected by such provision or
by its severance therefrom. Administrative Agent, Lenders, and the Company agree
to negotiate, in good faith, the terms of a replacement provision as similar to
the severed provision as may be possible and be legal, valid, and enforceable.

         12.9 ENTIRETY. THE RIGHTS AND OBLIGATIONS OF THE COMPANY, LENDERS, AND
AGENTS SHALL BE DETERMINED SOLELY FROM WRITTEN AGREEMENTS, DOCUMENTS, AND
INSTRUMENTS, AND ANY PRIOR ORAL AGREEMENTS BETWEEN SUCH PARTIES ARE SUPERSEDED
BY AND MERGED INTO SUCH WRITINGS. THIS AGREEMENT (AS AMENDED IN WRITING FROM
TIME TO TIME) AND THE OTHER WRITTEN LOAN PAPERS EXECUTED BY THE COMPANY, ANY
LENDER, OR ANY AGENT (TOGETHER WITH ALL COMMITMENT LETTERS AND FEE LETTERS AS
THEY RELATE TO THE PAYMENT OF FEES AFTER THE CLOSING DATE) REPRESENT THE FINAL
AGREEMENT BETWEEN THE COMPANY, LENDERS, AND AGENTS AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR



                                      58              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

SUBSEQUENT ORAL AGREEMENTS BY SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN SUCH PARTIES.

         12.10 JURISDICTION; VENUE; SERVICE OF PROCESS; JURY TRIAL. EACH PARTY
HERETO, IN EACH CASE FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY (A)
IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL
COURTS LOCATED IN THE BOROUGH OF MANHATTAN OR SOUTHERN DISTRICT OF NEW YORK, AND
AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL
PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THE LOAN PAPERS AND THE
OBLIGATION BY SERVICE OF PROCESS AS PROVIDED BY NEW YORK LAW, (B) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF OR IN
CONNECTION WITH THE LOAN PAPERS AND THE OBLIGATION BROUGHT IN ANY SUCH COURT,
(C) IRREVOCABLY WAIVES ANY CLAIMS THAT ANY LITIGATION BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (D) IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, POSTAGE PREPAID, AT ITS ADDRESS SET FORTH HEREIN, AND (E) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY LOAN
PAPER OR THE TRANSACTIONS CONTEMPLATED THEREBY. The scope of each of the
foregoing waivers is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including, without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. The Company and
each other party to this Agreement acknowledge that this waiver is a material
inducement to the agreement of each party hereto to enter into a business
relationship, that each has already relied on this waiver in entering into this
Agreement, and each will continue to rely on each of such waivers in related
future dealings. The Company and each other party to this Agreement warrant and
represent that they have reviewed these waivers with their legal counsel, and
that they knowingly and voluntarily agree to each such waiver following
consultation with legal counsel. THE WAIVERS IN THIS SECTION 12.10 ARE
IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS, AND
REPLACEMENTS TO OR OF THIS OR ANY OTHER LOAN PAPER. In the event of Litigation,
this Agreement may be filed as a written consent to a trial by the court.

         12.11 Amendments, Consents, Conflicts, and Waivers.

                  (a) Except as otherwise specifically provided, (i) this
         Agreement may only be amended, modified or waived by an instrument in
         writing executed jointly by the Company and Determining Lenders, and,
         in the case of any matter affecting Administrative Agent, by
         Administrative Agent, and may only be supplemented by documents
         delivered or to be delivered in accordance with the express terms
         hereof, and (ii) the other Loan Papers may only be the subject of an
         amendment, modification, or waiver if the Company and Determining
         Lenders, and, in the case of any matter affecting Administrative Agent,
         Administrative Agent, have approved same.

                  (b) Any amendment to or consent or waiver under this Agreement
         or any Loan Paper which purports to accomplish any of the following
         must be by an instrument in writing executed by the Company and
         executed (or approved, as the case may be) by each Lender, and, in the
         case of any matter affecting Administrative Agent, by Administrative
         Agent: (i) extends the due date or decreases the amount of any
         scheduled payment of the Obligation arising under Loan Papers beyond
         the date specified in the Loan Papers; (ii) reduces the interest rate
         or decreases the amount of interest, fees, or other sums payable to
         Administrative Agent or Lenders hereunder (except such reductions as
         are



                                      59              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         contemplated by this Agreement); or (iii) reduces the percentage
         specified in the definition of "DETERMINING LENDERS"; (iv) changes
         SECTION 3.2(c) or this CLAUSE (b) or any other matter specifically
         requiring the consent of all Lenders hereunder; or (v) consents to the
         assignment or transfer of the Company of any of its rights and
         obligations under this Agreement. Without the consent of Administrative
         Agent and Determining Lenders, no provision of SECTION 11 may be
         amended, modified, or waived. Each Designating Lender shall act on
         behalf of its Designated Lender with respect to any rights of its
         Designated Lender to grant or withhold any consent hereunder to the
         fullest extent it has been so delegated to act by its Designated Lender
         pursuant to its Designation Agreement.

                  (c) Any conflict or ambiguity between the terms and provisions
         herein and terms and provisions in any other Loan Paper shall be
         controlled by the terms and provisions herein.

                  (d) No course of dealing nor any failure or delay by
         Administrative Agent, any Lender, or any of their respective
         Representatives with respect to exercising any Right of Administrative
         Agent or any Lender hereunder shall operate as a waiver thereof. A
         waiver must be in writing and signed by Administrative Agent and
         Determining Lenders (or by all Lenders, if required hereunder) to be
         effective, and such waiver will be effective only in the specific
         instance and for the specific purpose for which it is given.

         12.12 Multiple Counterparts. This Agreement may be executed in a number
of identical counterparts, each of which shall be deemed an original for all
purposes and all of which constitute, collectively, one agreement; but, in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart. It is not necessary that each Lender execute
the same counterpart so long as identical counterparts are executed by the
Company, each Lender, and Administrative Agent. This Agreement shall become
effective when counterparts hereof shall have been executed and delivered to
Administrative Agent by each Lender, Administrative Agent, and the Company, or,
when Administrative Agent shall have received telecopied, telexed, or other
evidence satisfactory to it that such party has executed and is delivering to
Administrative Agent a counterpart hereof.

         12.13 Successors and Assigns; Assignments and Participations.

                  (a) This Agreement shall be binding upon, and inure to the
         benefit of the parties hereto and their respective successors and
         assigns, except that (i) the Company may not, directly or indirectly,
         assign or transfer, or attempt to assign or transfer, any of its
         Rights, duties or obligations under any Loan Papers without the express
         written consent of all Lenders, and (ii) except as permitted under this
         Section, no Lender may transfer, pledge, assign, sell any participation
         in, or otherwise encumber its portion of the Obligation.

                  (b) Each Lender may assign to one or more Eligible Assignees
         all or a portion of its Rights and obligations under this Agreement and
         the other Loan Papers (including, without limitation, all or a portion
         of its Borrowings and its Note); provided, however, that:

                           (i) each such assignment shall be to an Eligible
                  Assignee;

                         (ii) except in the case of an assignment to another
                  Lender or an assignment of all of a Lender's Rights and
                  obligations under this Agreement and the other Loan Papers,
                  any such partial assignment shall be in an amount at least
                  equal to $10,000,000 (or such lower amount as may be requested
                  by a Lender and agreed to by Administrative Agent, acting in
                  its sole discretion);



                                      60              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

                         (iii) each such assignment by a Lender shall be of a
                  constant, and not varying, percentage of all of its Rights and
                  obligations under this Agreement and the Notes; and

                         (iv) the parties to such assignment shall execute and
                  deliver to the Administrative Agent for its acceptance an
                  Assignment and Acceptance Agreement in the form of EXHIBIT C
                  hereto, together with any Notes subject to such assignment and
                  a processing fee of $3,000.

         Upon execution, delivery, and acceptance of such Assignment and
         Acceptance Agreement, the assignee thereunder shall be a party hereto
         and, to the extent of such assignment, have the obligations, Rights,
         and benefits of a Lender under the Loan Papers and the assigning Lender
         shall, to the extent of such assignment, relinquish its rights and be
         released from its obligations under the Loan Papers. Upon the
         consummation of any assignment pursuant to this Section, the Company
         shall issue appropriate Notes to the assignor and the assignee,
         reflecting such Assignment and Acceptance. If the assignee is not
         incorporated under the laws of the United States of America or a state
         thereof, it shall deliver to the Company and Administrative Agent
         certification as to exemption from deduction or withholding of Taxes in
         accordance with SECTION 4.6.

                  (c) Administrative Agent shall maintain at its address
         referred to in SECTION 12.3 a copy of each Assignment and Acceptance
         Agreement delivered to and accepted by it and a register for the
         recordation of the names and addresses of the Lenders and principal
         amount of the Borrowings owing to each Lender from time to time (the
         "REGISTER"). The entries in the Register shall be conclusive and
         binding for all purposes, absent manifest error, and the Company,
         Administrative Agent and Lenders may treat each Person whose name is
         recorded in the Register as a Lender hereunder for all purposes of the
         Loan Papers. The Register shall be available for inspection by the
         Company or any Lender at any reasonable time and from time to time upon
         reasonable prior notice. Upon the consummation of any assignment in
         accordance with this SECTION 12.13, SCHEDULE 2.1 shall automatically be
         deemed amended (to the extent required) by Administrative Agent to
         reflect the name, address, and respective Pro Rata Part of the
         Principal Debt of the assignor and assignee.

                  (d) Upon its receipt of an Assignment and Acceptance Agreement
         executed by the parties thereto, together with any Notes subject to
         such assignment and payment of the processing fee, Administrative Agent
         shall, if such Assignment and Acceptance has been completed and is in
         substantially the form of EXHIBIT C hereto, (i) accept such Assignment
         and Acceptance Agreement, (ii) record the information contained therein
         in the Register and (iii) give prompt notice thereof to the parties
         thereto.

                  (e) Subject to the provisions of this Section and in
         accordance with applicable Law, any Lender may, in the ordinary course
         of its commercial lending business and in accordance with applicable
         Law, at any time sell to one or more Persons (each a "PARTICIPANT")
         participating interests in its portion of the Obligation. In the event
         of any such sale to a Participant, (i) such Lender shall remain a
         "Lender" under this Agreement and the Participant shall not constitute
         a "Lender" hereunder, (ii) such Lender's obligations under this
         Agreement shall remain unchanged, (iii) such Lender shall remain solely
         responsible for the performance thereof, (iv) such Lender shall remain
         the holder of its share of the Principal Debt for all purposes under
         this Agreement, (v) the Company and Administrative Agent shall continue
         to deal solely and directly with such Lender in connection with such
         Lender's Rights and obligations under the Loan Papers, and (vi) such
         Lender shall be solely responsible for any withholding taxes or any
         filing or reporting requirements relating to such participation and
         shall hold the Company and Administrative Agent and their respective
         successors, permitted assigns, officers, directors, employees, agents,
         and representatives harmless against the same. Participants shall have
         no Rights under the Loan Papers, other than certain voting Rights as



                                      61              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         provided below. Subject to the following, each Lender shall be entitled
         to obtain (on behalf of its Participants) the benefits of SECTION 4
         with respect to all participations in its part of the Obligation
         outstanding from time to time so long as the Company shall not be
         obligated to pay any amount in excess of the amount that would be due
         to such Lender under SECTION 4 calculated as though no participations
         have been made. No Lender shall sell any participating interest under
         which the Participant shall have any Rights to approve any amendment,
         modification, or waiver of any Loan Paper, except to the extent such
         amendment, modification, or waiver extends the due date for payment of
         any amount in respect of principal (other than mandatory prepayments),
         interest, or fees due under the Loan Papers, reduces the interest rate
         or the amount of principal or fees applicable to the Obligation (except
         such reductions as are provided by this Agreement), or releases any
         guaranty or collateral, if any, for the Obligation (except such
         releases as are contemplated by this Agreement); provided that, in
         those cases where a Participant is entitled to the benefits of SECTION
         4 or a Lender grants Rights to its Participants to approve amendments
         to or waivers of the Loan Papers respecting the matters previously
         described in this sentence, such Lender must include a voting mechanism
         in the relevant participation agreement or agreements, as the case may
         be, whereby a majority of such Lender's portion of the Obligation
         (whether held by such Lender or Participant) shall control the vote for
         all of such Lender's portion of the Obligation. Except in the case of
         the sale of a participating interest to another Lender, the relevant
         participation agreement shall not permit the Participant to transfer,
         pledge, assign, sell participations in, or otherwise encumber its
         portion of the Obligation, unless the consent of the transferring
         Lender (which consent will not be unreasonably withheld) has been
         obtained.

                  (f) Any Lender may at any time designate not more than one
         Designated Lender to fund Borrowings on behalf of such Designating
         Lender subject to the terms of this SECTION 12.13(f), and the
         provisions of SECTIONS 12.13(b) AND 12.13(e) shall not apply to such
         designation. No Lender may have more than one Designated Lender at any
         time. Such designation may occur either by the execution of the
         signature pages hereof by such Lender and Designated Lender next to the
         appropriate "Designating Lender" and "Designated Lender" captions, or
         by execution by such parties of a Designation Agreement subsequent to
         the date hereof; provided, that any Lender and its Designated Lender
         executing the signatures pages hereof as "Designating Lender" and
         "Designated Lender", respectively, on the date hereof shall be deemed
         to have executed a Designation Agreement, and shall be bound by the
         respective representations, warranties and covenants contained therein,
         and such designation shall be conclusively deemed to be accepted by the
         Company and the Administrative Agent. The parties to each such
         designation occurring subsequent to the execution date hereof shall
         execute and deliver to the Administrative Agent and the Company for
         their acceptance a Designation Agreement. Upon such receipt of an
         appropriately completed Designation Agreement executed by a Designating
         Lender and a designee representing that it is a Designated Lender and
         consented to by the Company and the Administrative Agent, the
         Administrative Agent will accept such Designation Agreement and will
         give prompt notice thereof to the Company and the other Lenders,
         whereupon, (i) the Company shall execute and deliver to the Designating
         Lender a Designated Lender Note payable to the order of the Designated
         Lender, (ii) from and after the effective date specified in the
         Designation Agreement, the Designated Lender shall become a party to
         this Agreement with a right to fund Borrowings on behalf of its
         Designating Lender pursuant to SECTION 2.1(b), and (iii) the Designated
         Lender shall not be required to make payments with respect to any
         obligations in this Agreement except to the extent of excess cash flow
         of such Designated Lender which is not otherwise required to repay
         obligations of such Designated Lender which are then due and payable;
         provided, however, that regardless of such designation and assumption
         by the Designated Lender, the Designating Lender shall be and remain
         obligated to the Company, the Administrative Agent and the Lenders for
         each and every of the obligations of the Designating Lender and its
         related Designated Lender with respect to this Agreement, including,
         without limitation, any indemnification obligations



                                      62              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

         under SECTION 11.5(c) hereof and any sums otherwise payable to the
         Company by the Designated Lender.

                  Each Designating Lender, or a specified branch or affiliate
         thereof, shall serve as the administrative agent of its Designated
         Lender and shall on behalf of its Designated Lender: (i) receive any
         and all payments made for the benefit of such Designated Lender and
         (ii) give and receive all communications and notices and take all
         actions hereunder, including, without limitation, votes, approvals,
         waivers, consents and amendments under or relating to this Agreement
         and the other Loan Papers. Any such notice, communication, vote,
         approval, waiver, consent or amendment shall be signed by a Designating
         Lender, or specified branch or affiliate thereof, as administrative
         agent for its Designated Lender and need not be signed by such
         Designated Lender on its own behalf. The Company, the Administrative
         Agent and the Lenders may rely thereon without any requirement that the
         Designated Lender sign or acknowledge the same. No Designated Lender
         may assign or transfer all or any portion of its interest hereunder or
         under any other Loan Paper, other than pursuant to an assignment to its
         Designating Lender pursuant to a pledge to its Liquidity Lender (if
         any) in accordance with SECTION 12.13(g) of this Agreement, or
         otherwise in accordance with the provisions of this SECTION 12.13.

                  (g) Notwithstanding any other provision set forth in this
         Agreement, (i) any Lender may at any time assign and pledge all or any
         portion of its Borrowings and its Note to any Federal Reserve Bank as
         collateral security pursuant to Regulation A and any Operating Circular
         issued by such Federal Reserve Bank. No such assignment shall release
         the assigning Lender from its obligations hereunder and (ii) any
         Designated Lender may at any time create a security interest in, or
         pledge, all or any portion of its rights under and interest in this
         Agreement and the Designated Lender Note held by it in favor of its
         Liquidity Bank, and such Liquidity Bank may enforce such pledge or
         security interest in any manner permitted under applicable law,
         provided that (y) such Liquidity Bank possesses the characteristics
         necessary to be an Eligible Assignee under this Agreement, and (z) no
         such pledge shall release the Designating Lender from its obligations
         hereunder or grant to such Liquidity Bank the rights of a Lender
         hereunder absent foreclosure of such pledge.

                  (h) Any Lender may furnish any information concerning the
         Company in the possession of such Lender from time to time to Eligible
         Assignees and Participants (including prospective Eligible Assignees
         and Participants), subject, however, to SECTION 12.15 hereof.

         12.14 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. The Company's obligations under the Loan Papers shall remain in
full force and effect until payment in full of the Principal Debt and of all
interest, fees, and other amounts of the Obligation then due and owing, except
that SECTION 4, SECTION 10, and SECTION 12, and any other provisions under the
Loan Papers expressly intended to survive by the terms hereof or by the terms of
the applicable Loan Papers, shall survive such termination. If at any time any
payment of the principal of or interest on any Note or any other amount payable
by the Company under any Loan Paper is rescinded or must be otherwise restored
or returned upon the insolvency, bankruptcy, or reorganization of the Company or
otherwise, the obligations of the Company under the Loan Papers with respect to
such payment shall be reinstated as though such payment had been due but not
made at such time.

         12.15 Confidentiality. Administrative Agent and each Lender (each, a
"LENDING PARTY") agrees to use its best efforts to keep confidential any
information furnished or made available to it by the Company pursuant to this
Agreement that is marked confidential; provided that nothing herein shall
prevent any Lending Party from disclosing such information (a) to any other
Lending Party or any officer, director, employee, agent, or advisor of any
Lending Party, (b) to its auditors, accountants, legal counsel or other
professional advisors,



                                      63              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT

<PAGE>

(c) as required by any law, rule, or regulation, (d) upon the order of any court
or administrative agency, (e) upon the request or demand of any regulatory
agency or authority, (f) that is or becomes available to the public or that is
or becomes available to any Lending Party other than as a result of a disclosure
by any Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Paper, and (i) subject to provisions
substantially similar to those contained in this Section, to any Affiliate of
any Lending Party or to any actual or proposed participant or assignee. The
Company hereby consents to the disclosure of any non-public information with
respect to it which is related to this transaction by any Designated Lender to
any rating agency, commercial paper dealer, or provider of a surety, guaranty or
credit or liquidity enhancement to such Designated Lender.

         12.16 No Bankruptcy Proceedings. Each of the Company, the Lenders and
the Administrative Agent agrees that it will not institute against any
Designated Lender or join any other Person in instituting against any Designated
Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any federal or state bankruptcy or similar law, for one year
and one day after the payment in full of the latest maturing commercial paper
note issued by such Designated Lender; provided that the Designating Lender
hereby agrees to indemnify, save and hold harmless the Company, each Lender and
the Administrative Agent for any loss, cost, damage and expense arising out of
their inability to institute any such proceeding against its Designated Lender.

         12.17 Guaranties. As an inducement to the Administrative Agent and the
Lenders to enter into this Agreement, each Guarantor has executed and delivered
to the Administrative Agent this Agreement to (i) ratify and reaffirm their
respective obligations under the LLC Guaranty and the Holdings Guaranty, as
applicable, and (ii) evidence its acknowledgement, consent, and agreement (a) to
the execution, delivery, and performance of this Agreement by the Company, and
(b) that this Agreement in no way releases, diminishes, impairs, reduces, or
otherwise adversely affects any guaranties, assurances, or other obligations or
undertakings of such Guarantor under any Loan Paper.

         12.18 Existing Defaults of No Effect. Any default which has occurred
and is continuing under the Existing Loan Agreement, if any, shall, upon the
satisfaction of the conditions set forth in SECTION 6.1, be deemed to be fully
and completely remedied and of no further force and effect, except to the extent
that the event or condition causing such default shall constitute a Default or a
Potential Default under this Agreement. Without limiting the generality of the
foregoing, the Lenders hereby waive the condition precedent to the effectiveness
of the Fifth Amendment to Term Loan Agreement dated as of July 31, 2002 (the
"Fifth Amendment") that the Company provide a satisfactory legal opinion of its
special counsel, Skadden Arps, Slate, Meagher & Flom LLP contained in Paragraph
3(d) of the Fifth Amendment.

         EXECUTED on the respective dates shown on the signature pages hereto,
but effective as of the Closing Date.


                     [REMAINDER OF PAGE INTENTIONALLY BLANK.
                            SIGNATURE PAGES FOLLOW.]




                                      64              FIRST AMENDED AND RESTATED
                                                             TERM LOAN AGREEMENT
<PAGE>

         Signature Page to that certain First Amended and Restated Term Loan
Agreement dated as of October __, 2002, among The Williams Companies, Inc., as
the Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein.




Address for notices

One Williams Center, Suite 5000             THE WILLIAMS COMPANIES, INC.,
Tulsa, Oklahoma 74172                       a Delaware corporation
Attention:  Treasurer
Telephone No.: (918) 573-5551
Facsimile No.: (918) 573-2065               By:
                                                -------------------------------
                                            Name:  James G. Ivey
                                            Title: Treasurer


With a copy to:

One Williams Center, Suite 4100
Tulsa, Oklahoma 74172
Attention: Associate General Counsel
Telephone No.: (918) 573-2613
Facsimile No.: (918) 573-4503




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



Address for notices
One Williams Center, Suite 5000          WILLIAMS GAS PIPELINE COMPANY, L.L.C.
Tulsa, Oklahoma 74172
Attn: Treasurer
Telephone No.: (918) 573-5551
Facsimile No.: (918) 573-2065            By:      /s/ James G. Ivey
                                            -----------------------------------
                                         Name:    James G. Ivey
                                              ---------------------------------
                                         Title:   Assistant Treasurer
                                               --------------------------------


With a copy to:

One Williams Center, Suite 4100
Tulsa, Oklahoma 74172
Attn:    Associate General Counsel
Telephone No.: (918) 573-2613
Facsimile No.: (918) 573-4503




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.


Address for notices
One Williams Center, Suite 5000             WILLIAMS PRODUCTION HOLDINGS L.L.C.
Tulsa, Oklahoma 74172
Attn:  Treasurer
Telephone No.: (918) 573-5551
Facsimile No.: (918) 573-2065               By:      /s/ Ralph A. Hill
                                               --------------------------------
                                            Name:    Ralph A. Hill
                                                 ------------------------------
                                            Title:   Senior Vice President
                                                  -----------------------------


With a copy to:

One Williams Center, Suite 4100
Tulsa, Oklahoma 74172
Attn:  Associate General Counsel
Telephone No.: (918) 573-2613
Facsimile No.: (918) 573-4503




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



1301 Avenue of the Americas             CREDIT LYONNAIS NEW YORK BRANCH,
New York, New York 10019                as Administrative Agent and as a Lender


                                        By:      /s/ Olivier Audemard
                                           ------------------------------------
                                        Name:    Olivier Audemard
                                             ----------------------------------
                                        Title:   Senior Vice President
                                              ---------------------------------


With a copy to:
1301 Travis Street, Suite 2100
Houston, Texas 77002
Attention: Mr. Richard Kaufman
Telephone No.: 713-890-8605
Facsimile No.: 713-890-8666




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



1230 Peachtree Street, Suite 3500   COMMERZBANK AG NEW YORK AND GRAND
Atlanta, Georgia 30309              CAYMAN BRANCHES, as Syndication Agent,
Attn: Brian Campbell                as a Lender and as a Designating Lender
Telephone: (404) 888-6518
Facsimile: (404) 888-6539
                                    By:      /s/ Harry Yergey
                                       ----------------------------------------
                                    Name:    Harry Yergey
                                         --------------------------------------
                                    Title:   Senior Vice President and Manager
                                          -------------------------------------


                                    By:      /s/ Brian Campbell
                                       ----------------------------------------
                                    Name:    Brian Campbell
                                         --------------------------------------
                                    Title:   Senior Vice President
                                          -------------------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]


<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



                               FOUR WINDS FUNDING CORPORATION,
                               as a Designated Lender


                               By       COMMERZBANK AKTIENGESELLCHAFT, as
                                        Administrator and Attorney-in-Fact

                               By:
                                  ---------------------------------------------
                               Name:
                                    -------------------------------------------
                               Title:
                                     ------------------------------------------


                               By:
                                  ---------------------------------------------
                               Name:
                                    -------------------------------------------
                               Title:
                                     ------------------------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.


1100 Louisiana Street, Suite 3000        THE BANK OF NOVA SCOTIA,
Houston, Texas 77002                     as Documentation Agent and as a Lender
Attn:    Joe Latanzie
Telephone:  (713) 759-3435
Facsimile:  (713) 752-2425               By:
                                            -----------------------------------
                                         Name:
                                              ---------------------------------
                                         Title:
                                                -------------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



1020 19th Street, NW, Suite 500         ABU DHABI INTERNATIONAL BANK INC.,
Washington, DC 20036                    as a Lender
Attn:  David Young
Telephone: (202) 842-7956
Facsimile: (202) 842-7955               By:      /s/ David J. Young
                                           ------------------------------------
                                        Name:    David J. Young
                                             ----------------------------------
                                        Title:   Vice President
                                              ---------------------------------


                                        By:      /s/ Nagy S. Kolta
                                           ------------------------------------
                                        Name:    Nagy S. Kolta
                                             ----------------------------------
                                        Title:   Executive Vice President
                                              ---------------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.

470 Park Avenue South                       BANK POLSKA KASA OPIEKI S.A.,
32nd Street, 15th Floor                     as a Lender
New York, New York 10016
Attn:    Hussein El-Tawil
Telephone: (212) 251-1245
Facsimile: (212) 679-5910                   By:      /s/ Hussein El-Tawil
                                                -------------------------------
                                            Name:    Hussein El-Tawil
                                                  -----------------------------
                                            Title:   Vice President
                                                   ----------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



333 West 34th Street, 8th Floor         SALOMON BROTHERS HOLDING COMPANY, INC.
New York, NY 10001                      as a Lender
Attn: Shawn Bernet
Telephone: (212) 615-9142
Facsimile: (212) 615-9149               By:      /s/ Shawn Bernet
                                           ------------------------------------
                                        Name:    Shawn Bernet
                                             ----------------------------------
                                        Title:   Assistant Vice President
                                              ---------------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



685 3rd. Ave. 29th Floor,                   CHANG HWA COMMERCIAL BANK, LTD.,
New York, New York 10017                    NEW YORK BRANCH, as a Lender
Attn:    Peter Lien
Telephone: (212) 651-9770
Facsimile: (212) 651-9785                   By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]
<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



76 Madison Avenue, 12th Floor               FIRST COMMERCIAL BANK - NEW YORK
New York, New York 10016                    AGENCY, as a Lender
Attn:    Max Kwok
Telephone: (212) 684-9248
Facsimile: (212) 684-9315                   By:      /s/ Bruce M.J. Ju
                                               --------------------------------
                                            Name:    Bruce M.J. Ju
                                                  -----------------------------
                                            Title:   VP/General Manager
                                                  -----------------------------



[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



380 Madison Avenue, 21st Floor              GULF INTERNATIONAL BANK,
New York, New York 10017                    as a Lender
Attn:    Bill Shepard
Telephone:  (212) 922-2323
Facsimile:  (212) 922-2309                  By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------


                                            By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]
<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



200 Madison Avenue, Suite 20007             HUA NAN COMMERCIAL BANK, LTD.,
New York, New York 10016                    as a Lender
Attn:    Frank Tang
Telephone: (646) 435-1881
Facsimile: (212) 417-9341                   By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



150 East 42nd Street, 29th Floor           BAYERISCHE HYPO-UND
New York, New York 10017                   VEREINSBANK AG, NEW YORK
Attn:    Steve Atwell                      BRANCH, as a Lender
Telephone: (212) 672-5458
Facsimile: (212) 672-5530
                                           By:      /s/ Steve Atwell
                                              ---------------------------------
                                           Name:    Steve Atwell
                                                -------------------------------
                                           Title:   Director
                                                 ------------------------------



                                           By:      /s/ Shannon Batchman
                                              ---------------------------------
                                           Name:    Shannon Batchman
                                                -------------------------------
                                           Title:   Director
                                                 ------------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



245 Peachtree Center Avenue, Suite 2550         KBC BANK N.V., as a Lender
Atlanta, Georgia 30303
Attn:    Filip Ferrante
Telephone: (404) 584-5466
Facsimile: (404) 584-5465                       By:      /s/ Robert Snauffer
                                                   ----------------------------
                                                Name:    Robert Snauffer
                                                      -------------------------
                                                Title:   First Vice President
                                                      -------------------------


                                                By:      /s/ Eric Raskin
                                                   ----------------------------
                                                Name:    Eric Raskin
                                                     --------------------------
                                                Title:   Vice President
                                                      -------------------------

With a copy to:

125 West 55th Street
New York, New York 10019
Attn:    Diane Grimmig
Telephone:  (212) 541-0707
Facsimile:  (212) 541-0784




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



Grosse Bleiche 54-56                         LANDESBANK RHEINLAND-PFALZ,
Mainz, Germany 55098                         GIROZENTRALE,
Attn:    Daniel Juncker                      as a Lender
Telephone: (011) 49-61-31-133374
Facsimile: (011) 49-61-31-132599
                                             By:      /s/ Signature not legible
                                                -------------------------------
                                             Name:    Name not legible
                                                  -----------------------------
                                             Title:   Vice President
                                                   ----------------------------


                                             By:      /s/ Signature not legible
                                                -------------------------------
                                             Name:    Name not legible
                                                  -----------------------------
                                             Title:   Manager
                                                   ----------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



Ursulinenstra(beta)e 2                   LANDESBANK SAAR GIROZENTRALE,
66111 Saarbrucken, Germany               as a Lender
Attn:  Rolf Buchholz
Telephone: (011) 49-681-383-1304
Facsimile: (011) 49-681-383-1208         By:      /s/ Ulrich Hildebrandt
                                            -----------------------------------
                                         Name:    Ulrich Hildebrandt
                                              ---------------------------------
                                         Title:   Senior Vice President
                                               --------------------------------



                                         By:      /s/ Jorg Weber
                                            -----------------------------------
                                         Name:    Jorg Weber
                                              ---------------------------------
                                         Title:   Manager
                                               --------------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



Martensdamm 6                                 LANDESBANK SCHLESWIG-HOLSTEIN
Kiel, Germany 24103                           GIROZENTRALE, as a Lender
Attn:    Kerstin Spaeter
Telephone:  (011) 49-431-900-2765
Facsimile   (011) 49-431-900-17 94            By:      /s/ Dr. Nikolai Ulrich
                                                 ------------------------------
                                              Name:    Dr. Nikolai Ulrich
                                                   ----------------------------
                                              Title:   Vice President
                                                    ---------------------------



                                              By:      /s/ Andrea Kremser
                                                 ------------------------------
                                              Name:    Andrea Kremser
                                                   ----------------------------
                                              Title:   Assistant Vice President
                                                    ---------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



811 Wilshire Boulevard, Suite 1900          LAND BANK OF TAIWAN, LOS ANGELES
Los Angeles, California 90017               BRANCH, as a Lender
Attn:  Jonathan Kuo
Telephone: (213) 532-3789
Facsimile: (213) 532-3766                   By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]


<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



2250 East 73rd Street, Suite 200             LOCAL OKLAHOMA BANK, N.A.,
Tulsa, Oklahoma 74136                        as a Lender
Attn:    Elisabeth Blue
Telephone:  (918) 497-2422
Facsimile:  (918) 497-2497                   By:      /s/ Elisabeth F. Blue
                                                -------------------------------
                                             Name:    Elisabeth F. Blue
                                                  -----------------------------
                                             Title:   Senior Vice President
                                                   ----------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



299 Park Avenue, 17th Floor                   NATIONAL BANK OF KUWAIT, S.A.K.,
New York, New York 10171                      GRAND CAYMAN BRANCH, as a Lender
Attn:  Wendy Wanninger
Telephone: (212) 303-9807
Facsimile: (212) 888-2958                     By:      /s/ Robert J. McNeill
                                                 ------------------------------
                                              Name:    Robert J. McNeill
                                                   ----------------------------
                                              Title:   Executive Manager
                                                    ---------------------------


                                              By:      /s/ Muhannad Kamal
                                                 ------------------------------
                                              Name:    Muhannad Kamal
                                                   ----------------------------
                                              Title:   General Manager
                                                    ---------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]



<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



1200 Smith Street, Suite 3100        BNP PARIBAS, as a Lender
Houston, Texas 77002
Attn:    Mark Cox
Telephone: (713) 982-1152
Facsimile: (713) 859-6915            By:     /s/ Mark A. Cox and Larry Robinson
                                        ---------------------------------------
                                     Name:   Mark A. Cox and Larry Robinson
                                          -------------------------------------
                                     Title:  Director and Vice President
                                           -------------------------------------


With a copy to:

1200 Smith Street, Suite 3100
Houston, Texas 77002
Attn:    David Dodd
Telephone: (713) 982-1156
Facsimile: (713) 859-6915




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



135 Bishopsgate                             THE ROYAL BANK OF SCOTLAND PLC,
London, England EC2M 3UR                    as a Lender
Attn:    Jane Woodley
Telephone: (011) 44-207-375-5724
Facsimile: (011) 44-207-375-5919            By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------



With a copy to:

JP Morgan Chase Towers
600 Travis, Suite 6070
Houston, Texas 77002
Attn:    Adam Pettifer
Telephone: (713) 221-2416
Facsimile: (713) 221-2430




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]

<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.



277 Park Avenue, 6th Floor            SUMITOMO MITSUI BANKING
New York, New York 10172              CORPORATION, as a Lender
Attn:    Kenneth Austin
Telephone: (212) 224-4043
Facsimile: (212) 224-4384             By:  /s/ Leo E. Paqariqan
                                          -------------------------------------
                                      Name:    Leo E. Paqariqan
                                           ------------------------------------
                                      Title:   Senior Vice President
                                            -----------------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]



<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.


1221 McKinney Street, Suite 4100      MIZUHO CORPORATE BANK, LTD., as a Lender
Houston, Texas 77010
Attn:   Jacques Azagury
Telephone: (713) 650-7845
Facsimile: (713) 759-0717             By:  /s/ Jacques Azagury
                                         --------------------------------------
                                      Name: Jacques Azagury
                                           ------------------------------------
                                      Title:  Senior Vice President and Manager
                                            -----------------------------------


With a copy to:

1221 McKinney Street, Suite 4100
Houston, Texas 77010
Attn:    Scott Chappell
Telephone: (713) 650-7828
Facsimile:  (713) 759-0717




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]


<PAGE>


Signature Page to that certain First Amended and Restated Term Loan Agreement
dated as of October __, 2002, among The Williams Companies, Inc., as the
Company, Credit Lyonnais New York Branch, as Administrative Agent and as a
Lender, Commerzbank AG, as Syndication Agent and as a Lender, The Bank of Nova
Scotia, as Documentation Agent and as a Lender, and certain Lenders named
therein, including the undersigned.


55 East 52nd Street                       UFJ BANK LIMITED, as a Lender
New York, New York 10055
Attn:    Ryoichi Konishi
Telephone: (212) 339-6172
Facsimile: (212) 754-2360                 By: /s/ L.J. Perenyl
                                             ----------------------------------
                                          Name:    L.J. Perenyl
                                               --------------------------------
                                          Title:   Vice President
                                                -------------------------------




[THIS IS A SIGNATURE PAGE TO THE FIRST AMENDED AND RESTATED TERM LOAN AGREEMENT]


<PAGE>

                                    EXHIBIT A

                                FORM OF TERM NOTE

$_______________                                               October __, 2002


FOR VALUE RECEIVED, the undersigned, THE WILLIAMS COMPANIES, INC., a Delaware
corporation ("THE COMPANY"), hereby promises to pay to the order of (the
"LENDER"), at the offices of CREDIT LYONNAIS NEW YORK BRANCH, as Administrative
Agent for the Lender and others as hereinafter described, on the Maturity Date,
the lesser of (i) ($ ) and (ii) the aggregate Principal Debt disbursed by the
Lender to the Company and outstanding and unpaid on the Maturity Date (together
with accrued and unpaid interest thereon).

         This note has been executed and delivered under, and is subject to the
terms of, the First Amended and Restated Term Loan Agreement, dated as of
October 31, 2002 (as amended, modified, supplemented, or restated from time to
time, the "AGREEMENT"), among the Company, the Lender and other lenders named
therein, and the Administrative Agent, and is one of the "Term Notes" referred
to therein. Unless defined herein, capitalized terms used herein that are
defined in the Agreement have the meaning given to such terms in the Agreement.
Reference is made to the Agreement for provisions affecting this note regarding
applicable interest rates, principal and interest payment dates, final maturity,
voluntary and mandatory prepayments, acceleration of maturity, exercise of
Rights, payment of attorneys' fees, court costs and other costs of collection,
certain waivers by the Company and others now or hereafter obligated for payment
of any sums due hereunder and security for the payment hereof. Without limiting
the immediately preceding sentence, reference is made to SECTION 3.8 of the
Agreement for usury savings provisions.

         THE LAWS OF THE STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA
SHALL GOVERN THE RIGHTS AND DUTIES OF THE COMPANY AND THE LENDER AND THE
VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION HEREOF.

                                  THE WILLIAMS COMPANIES, INC.


                                  By
                                     ----------------------------------------
                                     James G. Ivey
                                     Treasurer


                                                                       Exhibit A
<PAGE>


                                    EXHIBIT B

                          FORM OF NOTICE OF CONVERSION

                             -------------- --, ----

Credit Lyonnais New York Branch,
         as Administrative Agent for the
         Lenders as defined in the First
         Amended and Restated Term
         Loan Agreement referred to below
1301 Avenue of the Americas
New York, New York 10019

Attn:
         ------------------------------
         Fax:  (214)
                    --------------

         Reference is made to (i) the First Amended and Restated Term Loan
Agreement, dated as of October 31, 2002 (as amended, modified, supplemented, or
restated from time to time, "AGREEMENT"), among the undersigned, the Lenders
named therein, and the Administrative Agent. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Agreement. The undersigned hereby gives you notice pursuant to SECTION 3.10
of the Agreement that it elects to convert a Borrowing from one Type to another
Type or elects a new Interest Period for a Eurodollar Rate Borrowing, and in
that connection, sets forth below the terms on which such election is requested
to be made:

<Table>
<S>     <C>                                                             <C>    <C>
(A)      Borrowing Date of Borrowing*                                   (A)
                                                                               -----------------

(B)      Amount of Borrowing**                                          (B)
                                                                               -----------------


(C)      Type of Borrowing***                                           (C)
                                                                               -----------------


(D)      For conversion to, or continuation of, a Eurodollar Rate
         Borrowing, the Interest Period and the last day thereof****    (D)
                                                                               -----------------
</Table>


         On the date the rate is set, please confirm the interest rate below and
return by facsimile transmission to _________________________________________.

                                   Very truly yours,

                                   THE WILLIAMS COMPANIES, INC.


                                   By:
                                      ------------------------------------------
                                   (Name):
                                          --------------------------------------
                                   (Title)
                                          --------------------------------------

Term Facility Rate:
                   -----------------

Confirmed by:
             -------------------------------


      *  Must be a Business Day at least three (3) Business Days following
         receipt by Administrative Agent of this Notice of Conversion from a
         Base Rate Borrowing to a Eurodollar Rate Borrowing or a continuation of
         a Eurodollar Rate Borrowing for an additional Interest Period.

    **   Not less than $5,000,000 or an integral multiple of $1,000,000.

   ***   Eurodollar Rate Borrowing or Base Rate Borrowing.

  ****   Eurodollar Rate Borrowing -- 1, 2, 3, or 6 months. In no event may the
         Interest Period end after the Maturity Date.


                                                                       Exhibit B
<PAGE>


                                    EXHIBIT C

                   FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT


         Reference is made to the First Amended and Restated Term Loan Agreement
dated as of October 31, 2002 (as amended, modified, supplemented, or restated
from time to time, the "AGREEMENT") among THE WILLIAMS COMPANIES, INC., a
Delaware corporation (the "COMPANY"), the Lenders, (each such term as defined in
the Agreement), and CREDIT LYONNAIS NEW YORK BRANCH, as the Administrative Agent
for Lenders ("ADMINISTRATIVE AGENT"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Agreement.

         The "ASSIGNOR" and the "ASSIGNEE" referred to on SCHEDULE 1 agree as
follows:

         1. The Assignor hereby sells and assigns to the Assignee, without
recourse and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's Rights and obligations under the Agreement and
the related Loan Papers as of the date hereof equal to the percentage interest
specified on SCHEDULE 1. After giving effect to such sale and assignment, the
Assignor's and the Assignee's amount of the Borrowings under the Term Facility
owing to each of them will be as set forth on SCHEDULE 1.

         2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Papers or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Loan Papers or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any party to any Loan Paper or the
performance or observance by any such party of any of its obligations under the
Loan Papers or any other instrument or document furnished pursuant thereto; and
(iv) attaches the Note held by the Assignor and requests that Administrative
Agent exchange such Note for new Notes. Such new Notes shall be prepared in
accordance with the provisions of SECTION 3.1(a) of the Agreement and will
reflect the respective Borrowings of the Assignee and the Assignor after giving
effect to this Assignment and Acceptance.

         3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the current financials statements of the
Company furnished pursuant to the Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor,
or any other Lender, 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 action under the Agreement; (iii) confirms that it is an
Eligible Assignee; (iv) appoints and authorizes Administrative Agent to take
such action as Administrative Agent on its behalf and to exercise such powers
and discretion under the Agreement as are delegated to Administrative Agent by
the terms thereof, together with such powers and discretion as are reasonably
incidental thereto; (v) agrees that it will perform in accordance with their
terms all of the obligations that by the terms of the Agreement are required to
be performed by it as a Lender.

         4. Following the execution of this Assignment and Acceptance, it will
be delivered to Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
"EFFECTIVE DATE") shall be the date of acceptance hereof by Administrative
Agent, unless otherwise specified on SCHEDULE 1.



                                                                       Exhibit C
<PAGE>



         5. Upon such acceptance and recording by Administrative Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Agreement and, to
the extent provided in this Assignment and Acceptance, have the Rights and
obligations of a Lender thereunder, and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its Rights and be
released from its obligations under the Agreement.

         6. Upon such acceptance and recording by Administrative Agent, from and
after the Effective Date, Administrative Agent shall make all payments under the
Agreement, the Notes, and loan accounts in respect of the interest assigned
hereby (including, without limitation, all payments of principal, interest, and
commitment fees and other fees with respect thereto) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Agreement and the other Loan Papers for periods prior to the Effective Date
directly between themselves.

         7. Unless the Assignee is a Lender or an Affiliate of a Lender (and
this sale and assignment is not made in connection with the sale of such
Affiliate), this Assignment and Acceptance may be conditioned upon the consent
of the Company and Administrative Agent pursuant to the definition of "Eligible
Assignee" in the Agreement. The execution and delivery of this Assignment and
Acceptance by the Company and Administrative Agent is evidence of this consent.

         8. As contemplated by SECTION 12.13(b)(vi) of the Agreement, the
Assignor or the Assignee (as determined between the Assignor and the Assignee)
agrees to pay to Administrative Agent for its account on the Effective Date in
federal funds a processing fee of $3,000.

         9. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE UNITED STATES OF
AMERICA AND THE STATE OF NEW YORK.

         10. This Assignment and Acceptance 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. Delivery of an executed
counterpart of SCHEDULE 1 to this Assignment and Acceptance by Telecopied shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.

         IN WITNESS WHEREOF, the Assignor and the Assignee have caused SCHEDULE
1 to this Assignment and Acceptance to be executed by their officers hereunto
duly authorized as of the date specified thereon.



                                                                       Exhibit C
<PAGE>


                                   SCHEDULE 1
                                       to
                       ASSIGNMENT AND ACCEPTANCE AGREEMENT
                                 (TERM FACILITY)



<Table>
<S>  <C>                                                                                      <C>
1.   Assigned Interest:

     (a)   Aggregate Borrowings owed to Assignor, immediately
           prior to giving effect to the assignment to Assignee                                $
                                                                                                -------------------

     (b)   Percentage Interest in Borrowings being assigned to
           Assignee by Assignor.                                                                                  %
                                                                                               -------------------

2.   Adjustments after giving effect to Assignment between Assignor and Assignee:

     (a)   Assignor's aggregate Borrowings                                                     $
                                                                                                -------------------

     (b)   Assignee's Borrowings acquired from Assignor pursuant to
           this Assignment                                                                     $
                                                                                                -------------------


3.   Effective Date (if other than date of acceptance by Administrative
     Agent):                                                                    *                  ,
                                                                                 -------------- ---  ------
</Table>



                                                                       Exhibit C
<PAGE>


                                   SCHEDULE 1
                                       to
                       ASSIGNMENT AND ACCEPTANCE AGREEMENT
                                 (TERM FACILITY)
                                  (PAGE 2 OF 2)




                                  [NAME OF ASSIGNOR], as Assignor


                                  By:
                                     ------------------------------------------
                                  Title:
                                        ---------------------------------------

                                  Dated:                         ,
                                        -------------------- ----  ------


                                  [NAME OF ASSIGNEE], as Assignee


                                  By:
                                     ------------------------------------------
                                  Title:
                                        ---------------------------------------

                                  Dated:                         ,
                                        -------------------- ----  ------



                                                                       Exhibit C
<PAGE>


     If SECTION 12.13(b) and CLAUSE (c) of the definition of "Eligible Assignee"
of the Agreement so require, the Company and Administrative Agent consent to
this Assignment and Acceptance.

                                      THE WILLIAMS COMPANIES, INC.,
                                      as The Company


                                      By:
                                         --------------------------------------
                                      Title:
                                            -----------------------------------

                                      Dated:                         ,
                                            -------------------- ----  ------


                                      CREDIT LYONNAIS NEW YORK BRANCH,
                                      as Administrative Agent


                                      By:
                                         --------------------------------------
                                      Title:
                                            -----------------------------------

                                      Dated:                         ,
                                            -------------------- ----  ------


     *     This date should be no earlier than five Business Days after the
           delivery of this Assignment and Acceptance to Administrative Agent.



                                                                       Exhibit C
<PAGE>


                                   EXHIBIT D-1

      FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY AND THE GUARANTORS







                                                                     Exhibit D-1

<PAGE>


                                   EXHIBIT D-2

                   FORM OF OPINION OF NEW YORK COUNSEL TO THE
                           COMPANY AND THE GUARANTORS







                                                                     Exhibit D-2
<PAGE>



                                    EXHIBIT E

                          FORM OF DESIGNATION AGREEMENT

                          Dated _________________, 2000

         Reference is made to that certain First Amended and Restated Term Loan
Agreement dated as of October 31, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Agreement") by and among The Williams
Companies, Inc. (the "Company"), the Lenders parties thereto, and Credit
Lyonnais, New York Branch, as Administrative Agent (the "Administrative Agent").
Terms defined in the Agreement are used herein with the same meaning.

         [NAME OF DESIGNATING LENDER] (the "Designating Lender"), [NAME OF
DESIGNEE] (the "Designee"), the Administrative Agent and the Company agree as
follows:

         1. Pursuant to SECTION 2.1(b) of the Agreement, the Designating Lender
hereby designates the Designee, and the Designee hereby accepts such
designation, to have a right to fund Borrowings pursuant to SECTION 2.1(a) of
the Agreement. Any delegation by Designating Lender to Designee of its rights to
fund Borrowings pursuant to such SECTION 2.1(b) shall be effective at the time
of the funding of such Borrowing and not before such time.

         2. Except as set forth in SECTION 7 below, the Designating Lender makes
no representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Paper or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of any
Loan Paper or any other instrument and document furnished pursuant thereto and
(b) the financial condition of the Company or the performance or observance by
the Company of any of its obligations under any Loan Paper or any other
instrument or document furnished pursuant thereto.

         3. The Designee (a) confirms that it has received a copy of each Loan
Paper, together with copies of the financial statements referred to in SECTIONS
7.5 and 8.2 of the Agreement and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Designation Agreement; (b) agrees that it will independently and without
reliance upon the Administrative Agent, the Designating Lender or any other
Lender 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
action under any Loan Paper; (c) confirms that it is a Designated Lender; (d)
appoints and authorizes the Administrative Agent to take such action as
Administrative Agent on its behalf and to exercise such powers and discretion
under any Loan Paper as are delegated to the Administrative Agent by the terms
thereof, together with such powers and discretion as are reasonably incidental
thereto; and (e) agrees that it will perform in accordance with their terms all
of the obligations which by the terms of any Loan Paper are required to be
performed by it as a Lender.

         4. The Designee hereby appoints [Designating Lender or a specified
branch or affiliate of Designating Lender] as Designee's Administrative Agent
and attorney in fact and grants to [Designating Lender or a specified branch or
affiliate of Designating Lender] an irrevocable power of attorney to receive
payments made for the benefit of Designee under the Agreement, to deliver and
receive all communications and notices under the Agreement and other Loan Papers
and to exercise on Designee's behalf all rights to vote and to grant and make
approvals, waivers, consents of amendments to or under the Agreement or other
Loan Papers. Any document executed by such Administrative Agent on the
Designee's behalf in connection with



                                                                       Exhibit E

<PAGE>

the Agreement or other Loan Papers shall be binding on the Designee. The
Company, the Administrative Agent and each of the Lenders may rely on and are
beneficiaries of the preceding provisions.

         5. Following the execution of this Designation Agreement by the
Designating Lender, its Designee and the Company, it will be delivered to the
Administrative Agent for acceptance and recording by the Administrative Agent.
The effective date for this Designation Agreement (the "Effective Date") shall
be the date of acceptance hereof by the Administrative Agent, unless otherwise
specified on the signature page thereto.

         6. Each of the Company, the Designating Lender and the Administrative
Agent hereby (i) acknowledges that the Designee is relying on the non-petition
provisions of SECTION 12.16 of the Agreement as agreed to by all signatories
thereto and (ii) reaffirms that it will not institute against the Designee or
join any other Person in instituting against the Designee any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
federal or state bankruptcy or similar law for one year and one day after the
payment in full of the latest maturing commercial paper note issued by the
Designee.

         7. The Designating Lender unconditionally agrees to pay or reimburse
the Designee and save the Designee harmless against all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
or asserted by any of the parties to the Loan Papers against the Designee, in
its capacity as such, in any way relating to or arising out of this Agreement or
any other Loan Papers or any action taken or omitted by the Designee hereunder
or thereunder, provided that the Designating Lender shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements if the same results from the
Designee's gross negligence or willful misconduct.

         8. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, the Designee shall be a party to the Agreement with a
right to fund Borrowings as a Designated Lender pursuant to SECTION 2.1(b) of
the Agreement and the rights and obligations of a Designated Lender related
thereto; provided, however, that the Designee shall not be required to make
payments with respect to such obligations except to the extent of excess cash
flow of the Designee which is not otherwise required to repay obligations of the
Designee Lender which are then due and payable. Notwithstanding the foregoing,
the [Designating Lender or a specified branch or affiliate of Designating
Lender], as administrative agent for the Designee, shall be and remain obligated
to the Company, the Administrative Agent and the Lenders for each and every of
the obligations of the Designee and the Designating Lender with respect to the
Agreement, including, without limitation, any indemnification obligations under
SECTION 11.5(c) of the Agreement and any sums otherwise payable to the Company
by the Designee.

         9. This Designation Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

         10. This Designation Agreement 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. Delivery of an executed
counterpart of a signature page to this Designation Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Designation Agreement.

                                                                       Exhibit E

<PAGE>
         IN WITNESS WHEREOF, the Designating Lender and the Designee intending
to be legally bound, have caused this Designation Agreement to be executed by
their officers hereunto duly authorized as of the date first above written.

                                      [NAME OF DESIGNATING LENDER],
                                      as Designating Lender


                                      By:
                                           ------------------------------------
                                      Title:


                                      [NAME OF DESIGNEE], as Designee


                                      By:
                                          -------------------------------------
                                      Title:
                                      Lending Office (and address for notices):


                                      THE WILLIAMS COMPANIES, INC.,
                                      as Company



                                      By:
                                      Title:

Accepted this ___ day
of __________, 200_                   Effective Date:


CREDIT LYONNAIS, NEW YORK BRANCH
as Administrative Agent


By:
    ------------------------------
Title:



                                                                       Exhibit E
<PAGE>


                                    EXHIBIT F


              INVESTMENTS DESCRIBED IN SECTION 8.9 OF THE AGREEMENT

Loan Agreement dated as of September 8, 1999, between Williams Communications,
Inc., as Borrower, and the Company, as Lender, filed as Exhibit 10.57 to WCG's
Form 10-K/A for the fiscal year ended December 31, 1999.

Various immaterial intercompany receivables between the Company or its
Subsidiaries and the WCG Subsidiaries for services rendered, which are settled
on a reasonably prompt basis. Services are rendered to the WCG Subsidiaries by
the Company or its Subsidiaries pursuant to certain intercompany services
agreements, all of which are filed as exhibits to WCG's Form 10-K/A for the
fiscal year ended December 31, 1999.

As of July 25, 2000, the Company's investment in WCG consists of 395,434,965
shares of Class B common stock.



                                                                       Exhibit F
<PAGE>


                                    EXHIBIT G

               EXISTING LOANS AND INVESTMENTS IN WCG SUBSIDIARIES


<Table>
<Caption>
                                        TWC CONTINUING CONTRACTS TO WHICH WCG IS A PARTY
                                        ------------------------------------------------
                      AGREEMENT                                DATE                           PARTIES
                      ---------                                ----                           -------

<S>                                                    <C>                    <C>
Amended and Restated Administrative Services
Agreement but excluding all Service Level Agreements   23-Apr-01              TWC and WCG
included therein other than those listed below

Amended and Restated Administrative Services
Agreement -- Cafeteria Card (SLA No. ASF-11)

Amended and Restated Administrative Services
Agreement -- Catering Services (SLA No. ASF-3)

Amended and Restated Administrative Services
Agreement -- Data Center Floor Space (SLA No. IT-23)

Amended and Restated Administrative Services
Agreement -- Security System Administration  (SLA
No. ASR-2)

Amended and Restated Administrative Services
Agreement -- Telecommunications Support (PBX) (SLA
No. IT-19)

Amended and Restated Administrative Services
Agreement -- Warren Clinic (SLA No. HR-17)

Amended and Restated Administrative Services
Agreement -- Records Management (Revised) (SLA No.
ASF-9)

Amended and Restated Confidentiality and               1-Feb-02               TWC and WCG
Nondisclosure Agreement

Amended and Restated Cross-License Agreement           23-Apr-01              TWC and WCG

Amended and Restated Employee Benefits Agreement       23-Apr-01              TWC and WCG

Amended and Restated Separation Agreement              23-Apr-01              TWC and WCG

Amendment of State of Oklahoma OIC Agreement           23-Apr-01              TWC and WCG

ITWill Assignment and Assumption Agreement             23-Apr-01              TWC and WCG

Mutual Waiver, dated April 23, 2001                    23-Apr-01              TWC and WCG

Professional Services Agreement                        23-Apr-01              TWC, WCG, The Feinberg Group, LLP

Relocation Services Agreement                          2-Jan-02               Williams Relocation Management, Inc.
                                                                              (a TWC subsidiary) and WCG

Restructuring Support Agreement                        23-Feb-02              TWC and WCG

Shareholder Agreement                                  23-Apr-01              TWC and WCG

Trademark License Agreement                            23-Apr-01              TWC and WCG

Guaranty Indemnification                               26-Jul-02              TWC and WCG Agreement

Reaffirmation and Cancellation Agreement               15-Oct-02              TWC and WCG and its Subsidiaries

All agreements and exhibits related to or incorporated by the foregoing that were entered into to implement the
transactions contemplated thereby, e.g. Assignment and Assumption Agreements, Bills of Sale.

Agreement Of Purchase And Sale And Construction        26-Feb-01 (as          Williams Headquarters Building Company
Completion                                             amended 13-Mar-01,     and WCL
                                                       13-April-01,
                                                       13-Sep-01, 30-Apr-02
</Table>



                                                                       Exhibit G
<PAGE>

<Table>
<Caption>
                                        TWC CONTINUING CONTRACTS TO WHICH WCG IS A PARTY
                                        ------------------------------------------------
                      AGREEMENT                                DATE                           PARTIES
                      ---------                                ----                           -------

<S>                                                    <C>                    <C>
Agreement To Terminate Aircraft Dry Lease -- N352WC    27-Mar-02              Williams Aircraft Leasing, LLC (a TWC
                                                                              subsidiary) and WCL

Aircraft Dry Lease -- N358WC                           13-Sep-01              Williams Communications Aircraft, LLC
                                                                              (a TWC subsidiary) and WCL

Aircraft Dry Lease -- N359WC                           13-Sep-01              Williams Communications Aircraft, LLC
                                                                              (a TWC subsidiary) and WCL

Bank of Oklahoma Tower Use Agreement                   23-Apr-01              Williams Headquarters Building Company
                                                                              and WCL

Central Plant Lease Agreement                          23-Apr-01 (as          Williams Headquarters Building Company
                                                       amended 13-Sep-01)     and Williams Technology Center, LLC (a
                                                                              WCL subsidiary)

Construction, Operating and Maintenance Agreement      1-Jan-97 (as amended   Transcontinental Gas Pipe Line
                                                       19-Feb-99)             Corporation (a TWC subsidiary) and WCL

Consulting Services Agreement                          29-Oct-01              Williams Pipe Line Company (a TWC
                                                                              subsidiary) and WCL

Co-Occupancy Agreement                                 18-Feb-99              Northwest Pipeline Corporation (a TWC
                                                                              subsidiary) and WCL

Co-Occupancy Agreement                                 22-Feb-99              Williams Gas Pipelines Central, Inc.
                                                                              (a TWC subsidiary) and WCL

Co-Occupancy Agreement                                 1-May-00               Williams Pipe Line Company (a TWC
                                                                              subsidiary) and WCL

Co-Occupancy Agreement                                 5-Mar-99 (as amended   Mid-America Pipeline Company (a TWC
                                                       23-Apr-01)             subsidiary) and WCL

Co-Occupancy Agreement                                 5-Mar-99 (as amended   Williams Field Services Company (a TWC
                                                       23-Apr-01)             subsidiary) and WCL

Dark Fiber IRU Agreement                               26-Feb-01              Transcontinental Gas Pipe Line
                                                                              Corporation (a TWC Subsidiary) and WCL

Fairfax Terminal Station Site Lease                    26-Aug-96              Williams Pipe Line Company (a TWC
                                                                              subsidiary) and WCL

First Amendment to Level 3 Sublease Agreement          1-Jan-99 (as amended   TWC and WCL
                                                       31-Dec-00 and
                                                       assigned 23-Apr-01)

Lease Agreement                                        1-Jan-97               Williams Natural Gas Company (a TWC
                                                                              subsidiary now known as Williams Gas
                                                                              Pipelines Central, Inc.) and WCL

Lease Agreement                                        1-Sep-95               Transcontinental Gas Pipe Line
                                                                              Corporation (a TWC subsidiary) and WCL

Lease Agreement                                        1-Mar-97               Texas Gas Transmission Corporation and
                                                                              WCL

Management Services Agreement                          23-Apr-01 (as          Williams Headquarters Building Company
                                                       amended 13-Sep-01)     and Williams Technology Center, LLC (a
                                                                              WCL subsidiary)

Master Agreement                                       23-Feb-99 (as          Williams Pipe Line Company (a TWC
                                                       amended 23-Apr-01)     subsidiary) and WCL

Nondisclosure Agreement                                29-Oct-01              TWC and WCL

Northwest Plaza Level Amended and Restated Lease       1-Jan-99 (as amended   Original Amended and Restated Lease
Agreement                                              31-Dec-00)             Agreement between Williams
</Table>


                                                                       Exhibit G
<PAGE>

<Table>
<Caption>
                                        TWC CONTINUING CONTRACTS TO WHICH WCG IS A PARTY
                                        ------------------------------------------------
                      AGREEMENT                                DATE                           PARTIES
                      ---------                                ----                           -------

<S>                                                    <C>                    <C>
                                                                              Headquarters Building Company, Landlord,
                                                                              and WCL, Tenant; amendment between
                                                                              TWC, Sublessor, and WCG, Sublessee

Operation, Maintenance and Repair Agreement            19-Feb-99 (as          Mid-America Pipeline Company,
                                                       amended 31-Aug-99)     Northwest Pipeline Corporation, Texas
                                                                              Gas Transmission Corporation,
                                                                              Transcontinental Gas Pipe Line
                                                                              Corporation, Williams Field Services
                                                                              Company, Williams Gas Pipelines
                                                                              Central, Inc. and Williams Pipe Line
                                                                              Company and WCL

Partial Assignment and Assumption Agreement            26-Feb-01              Williams Headquarters Building Company
                                                                              and Williams Technology Center, LLC (a
                                                                              WCL subsidiary)

Sale Agreement                                         14-Feb-97              Williams Pipe Line Company (a TWC
                                                                              subsidiary) and WCL

Southwest Plaza Level Amended and Restated Lease       1-Jan-99               Williams Headquarters Building Company
Agreement                                                                     and WCL

Sublease Agreement                                     1-May-00               Williams Pipe Line Company (a TWC
                                                                              subsidiary) and WCG; WCG assigned its
                                                                              rights to WCL on 2-Apr-02

Technical Services Agreement                           1998                   Spectrum Network Systems Limited (now
                                                                              known as PowerTel Limited, a 45% WCG
                                                                              subsidiary) and Williams International
                                                                              Services Company (a TWC subsidiary)

Teleport Services Agreement                            9-Oct-01               Williams Energy Marketing & Trading
                                                                              co. (a TWC subsidiary and WCL

The Depot Amended and Restated Lease Agreement         1-Jan-99 (as amended   Williams Headquarters Building Company
                                                       31-Dec-00 and          and WCL
                                                       assigned 23-Apr-01)

TWC Corporate Guarantee                                23-Apr-01              TWC guaranteed a TWC subsidiary in
                                                                              favor of a WCL subsidiary

TWC Corporate Guarantee                                23-Apr-01              TWC guaranteed a TWC subsidiary in
                                                                              favor of a WCL subsidiary

TWC Guaranty                                           23-Apr-01              TWC guaranteed a TWC subsidiary in
                                                                              favor of a WCL subsidiary

User Agreement for Pipe                                5-Mar-99 (as amended   Williams Pipe Line Company (a TWC
                                                       23-Apr-01)             subsidiary) and WCL

Utility Service Agreement                              23-Apr-01 (as          Williams Headquarters Building Company
                                                       amended 13-Sep-01)     and Williams Technology Center, LLC (a
                                                                              WCL subsidiary)

Web Hosting and Streaming Services Agreement           2-Oct-00               Williams Energy Services, Inc. (a TWC
                                                                              subsidiary) and WCL

Weld County Sublease Agreement                         19-Apr-96              Williams Natural Gas Company (a TWC
                                                                              subsidiary) and WCL

Declaration of Reciprocal Easements (as amended)       15-Oct-02              Williams Headquarters Building Company
                                                                              and Williams Technology Center, LLC

Membership Unit Purchase Agreement                     15-Oct-02              Williams Aircraft, Inc. and Williams
                                                                              Communications, LLC
</Table>



                                                                       Exhibit G
<PAGE>

<Table>
<Caption>
                                        TWC CONTINUING CONTRACTS TO WHICH WCG IS A PARTY
                                        ------------------------------------------------
                      AGREEMENT                                DATE                           PARTIES
                      ---------                                ----                           -------

<S>                                                    <C>                    <C>
Real Estate Purchase Agreement                         15-Jul-02              Williams Headquarters Building
                                                                              Company, Williams Technology Center,
                                                                              LLC, Williams Communications, LLC,
                                                                              Williams Communications Group, Inc.
                                                                              and Williams Aircraft Leasing, LLC

All agreement and exhibits related to or incorporated by the foregoing that were entered into to implement the
transactions contemplated thereby, e.g. Assignment and Assumption Agreements, Bills of Sale.
</Table>



                                                                       Exhibit G
<PAGE>


                                   SCHEDULE I

                                 PERMITTED LIENS


(a) (i) Any Lien existing on any property at the time of the acquisition thereof
and not created in contemplation of such acquisition by the Company or any of
its Subsidiaries, whether or not assumed by the Company or any of its
Subsidiaries, (ii) purchase money, construction or analogous Liens securing
obligations incurred in connection with or financing the direct or indirect
costs of or relating to the acquisition, construction (including design,
engineering, installation, testing and other related activities), development
(including drilling), improvement, repair or replacement of property (including
such Liens securing Debt or other obligations incurred in connection with the
foregoing or within 30 days of the later of (x) the date on which such Property
was acquired or construction, development, improvement, repair or replacement
thereof was complete or (y) if applicable, the final "in service" date for
commencement of full operations of such property), provided that all such Liens
attach only to the property acquired, constructed, developed, improved or
repaired or constituting replacement property, and the principal amount of the
Debt or other obligations secured by such Lien, together with the principal
amount of all other Debt secured by a Lien on such property, shall not exceed
the gross acquisition, construction, replacement and other costs specified above
of or for the property, (iii) Liens on receivables created pursuant to a sale,
securitization or monetization of such receivables, and Liens on rights of the
Company or any Subsidiary related to such receivables which are transferred to
the purchaser of such receivables in connection with such sale, securitization
or monetization; provided that the Liens secure only the obligations of the
Company or any of its Subsidiaries in connection with such sale, securitization
or monetization, (iv) Liens created by or reserved in any operating lease
(whether for real or personal property) entered into in the ordinary course of
business (excluding Synthetic Leases) provided that the Liens created thereby
(1) attach only to the Property leased to the Company or one of its
Subsidiaries, pursuant to such operating lease and (2) secure only the
obligations under such lease and supporting documents that do not create
obligations other than with respect to the leased property (including for rent
and for compliance with the terms of the lease), (v) Liens on property subject
to a Capital Lease created by such Capital Lease and securing only obligations
under such Capital Lease and supporting documents that do not create obligations
other than with respect to the leased property, (vi) any interest or title of a
lessor in the property subject to any Capital Lease, Synthetic Lease or
operating lease, (vii) Liens in the form of filed Uniform Commercial Code or
personal property security statements (or similar filings outside Canada and the
United States) to perfect any Permitted Lien, and (viii) Liens on up to four
aircraft owned or leased by any Company or any Subsidiary of any the Company.

(b) Any Lien existing on any property of a Subsidiary of the Company at the time
it becomes a Subsidiary of the Company and not created in contemplation thereof
and any Lien existing on any property of any Person at the time such Person is
merged or liquidated into or consolidated with the Company or any Subsidiary
thereof and not created in contemplation thereof.

(c) Mechanics', materialmen's, workmen's, warehousemen's, carrier's, landlord's
or other similar Liens arising in the ordinary course of business securing
amounts incurred in the ordinary course of business which are not more than 90
days past due or are being contested in good faith by appropriate proceedings.

(d) Liens arising by reason of pledges, deposits or other security to secure
payment of workmen's compensation insurance or unemployment insurance, pension
plans or systems and other types of social security, and good faith deposits or
other security to secure tenders or leases of property or bids, in each case to
secure obligations of the Company or any of its Subsidiaries under such
insurance, tender, lease, bid or contract, as the case may be; provided,
however, that the only Liens permitted by this PARAGRAPH (d) shall be



                                                                      Schedule I
<PAGE>

Liens incurred in the ordinary course of business that do not secure any Debt or
accounts payable (other than accounts payable to the counterparties or obligees
applicable to the foregoing).

(e) Liens on deposits or other security given to secure public or statutory
obligations, or to secure or in lieu of surety bonds (other than appeal bonds)
and deposits as security for the payment of taxes or assessments or other
similar charges, in each case to secure obligations of the Company or any of its
Subsidiaries arising in the ordinary course of business; provided, however, that
the aggregate amount of obligations secured by Liens permitted by this PARAGRAPH
(e) shall not exceed 10% of Consolidated Tangible Net Worth of the Company.

(f) Any Lien arising by reason of deposits with or the giving of any form of
security to any governmental agency or any body created or approved by law or
governmental regulation for any purpose at any time as required by law or
governmental regulation (i) as a condition to the transaction by the Company or
any of its Subsidiaries of any business or the exercise by the Company or any of
its Subsidiaries of any privilege or license, (ii) to enable the Company or any
of its Subsidiaries to maintain self-insurance or to participate in any fund for
liability on any insurance risks or (iii) in connection with workmen's
compensation, unemployment insurance, old age pensions or other social security
with respect to the Company or any of its Subsidiaries to share in the
privileges or benefits required for companies participating in such
arrangements.

(g) Liens incurred in the ordinary course of business upon rights-of-way
securing obligations (other than Debt and trade payables) of the Company or any
of its Subsidiaries.

(h) Undetermined mortgages and charges incidental to construction or maintenance
arising in the ordinary course of business which are not more than 90 days past
due or are being contested in good faith by appropriate proceedings.

(i) The right reserved to, or vested in, any municipality or governmental or
other public authority or railroad by the terms of any right, power, franchise,
grant, license, permit or by any provision of law, to terminate or to require
annual or other periodic payments as a condition to the continuance of such
right, power, franchise, grant, license or permit.

(j) The Lien of taxes, customs duties or other governmental charges or
assessments that are not at the time determined (or, if determined, are not at
the time delinquent), or that are delinquent but the validity of which is being
contested in good faith by the Company or any of its Subsidiaries by appropriate
proceedings and with respect to which reserves in conformity with generally
accepted accounting principles, if required by such principles, have been
provided on the books of the Company or the relevant Subsidiary of any Company,
as the case may be.

(k) The Lien reserved in (i) leases entered into in the ordinary course of
business for rent and for compliance with the terms of the lease in the case of
real or personal property leasehold estates or (ii) leases and sub-leases
granted to others that do not materially interfere with the ordinary course of
business of the Company and its Subsidiaries, taken as a whole.

(l) Defects and irregularities in the titles to any property (including
rights-of-way and easements) which are not material to the business, assets,
operations or financial condition of the Company and its Subsidiaries, taken as
a whole.

(m) Easements, exceptions or reservations in any property of the Company or any
of its Subsidiaries granted or reserved in the ordinary course of business for
the purpose of pipelines, roads, equipment, streets, alleys, highways,
railroads, the removal of oil, gas, coal or other minerals or timber, and other
like purposes,



                                                                      Schedule I
<PAGE>

or for the joint or common use of real property, facilities and equipment, or in
favor of governmental authorities or public utilities, in each case above which
do not materially impair the use of such property for the purposes for which it
is held by the Company or such Subsidiary.

(n) Rights reserved to or vested in any municipality or public authority to
control or regulate any property of the Company or any of its Subsidiaries, or
to use such property in any manner which does not materially impair the use of
such property for the purposes for which it is held by the Company or such
Subsidiary.

(o) Any obligations or duties, affecting the property of the Company or any of
its Subsidiaries, to any municipality or public authority with respect to any
franchise, grant, license or permit.

(p) The Liens of any judgments in an aggregate amount for the Company and all of
its Subsidiaries (i) not in excess of $8,500,000, the execution of which has not
been stayed and (ii) not in excess of $40,000,000, the execution of which has
been stayed and which have been appealed and secured, if necessary, by a stay or
appeal bond or other security of similar effect and stay or appeal bonds in
respect of the judgments permitted in CLAUSE (ii).

(q) Zoning laws and ordinances.

(r) Liens existing on July 1, 2002, that secure only Debt and other obligations
incurred or committed and available for draw down on or prior to or outstanding
on July 1, 2002 and listed on Annex A to this Schedule I as secured by such
Liens.

(s) Liens existing on July 1, 2002 (i) that cover only immaterial assets and
(ii) that secure only Debt and other obligations incurred or committed and
available for draw down on or prior to or outstanding on July 1, 2002.

(t) Liens reserved in customary oil, gas and/or mineral leases for bonus or
rental payments and for compliance with the terms of such leases and Liens
reserved in customary operating agreements, farm-out and farm-in agreements,
exploration agreements, development agreements and other similar agreements for
compliance with the terms of such agreements; provided that (i) such Liens do
not secure Debt or accounts payable (other than obligations under such lease or
agreement, as the case may be) and (ii) such leases and agreements are entered
into in the ordinary course of business.

(u) Liens arising in the ordinary course of business out of all presently
existing and future division and transfer orders, advance payment agreements,
processing contracts, gas processing plant agreements, operating agreements, gas
balancing or deferred production agreements, participation, joint venture, joint
operating, pooling, unitization or communitization agreements, pipeline,
gathering or transportation agreements, tariffs, platform agreements, drilling
contracts, injection or repressuring agreements, cycling agreements,
construction agreements, salt water or other disposal agreements, leases,
sub-leases or rental agreements, royalty interests, overriding royalty
interests, farm-out and farm-in agreements, exploration and development
agreements, and any and all other contracts or agreements covering, arising out
of, used or useful in connection with or pertaining to the exploration,
development, operation, production, sale, use, purchase, exchange, storage,
separation, dehydration, treatment, compression, gathering, transportation,
processing, improvement, marketing, disposal or handling of any property of a
Person (each such order, agreement or contract being a "Subject Document"),
provided that and to the extent that (i) such Subject Documents are entered into
the ordinary course of business and contain terms customary for such documents
in the industry, (ii) such permitted Liens shall not include any security
interests in accounts receivable or other receivables and do not secure Debt or
accounts payable (other than accounts payable arising under the particular
Subject Document



                                                                      Schedule I
<PAGE>

that creates the Lien), and (iii) such Subject Documents do not create nor do
such Liens secure Financing Transactions.

(v) Liens arising by law under SECTION 9.343 of the Texas Uniform Commercial
Code or similar statutes of states other than Texas.

(w) Liens arising pursuant to the L/C Collateral Documents which secure the
obligations of the Company and its Subsidiaries under the Primary Credit
Agreement and the L/C Agreement and certain public debt of the Company,
including Liens securing Letters of Credit resulting from the Cash
Collateralization thereof in accordance with SECTION 6.2 of the L/C Agreement.

(x) Liens (i) in existence prior to the date hereof in the nature of a right of
offset or netting of cash amounts owed arising in the ordinary course of
business (and Liens on the trading receivables owed by any trading counterparty
and/or affiliate thereof to the Company or any affiliate thereof granted by the
Company or any such affiliate thereof under agreements commonly in use in the
industry of the Company or such affiliate, but solely to secure the offset or
netting rights of such trading counterparty and/or affiliates thereof to the
payment of such trading receivables arising from and to the extent of the
trading obligations of the Company or any affiliate thereof to such trading
counterparty or its affiliates), and (ii) Liens in the nature of a right of
offset or netting of cash amounts owed arising in the ordinary course of
business granted by EMT to any of EMT's trading counterparties and/or affiliates
thereof solely to secure the obligations of EMT to such trading counterparty
and/or affiliates thereof (and the offset or netting rights of such trading
counterparty and/or affiliates thereof related thereto), including, with respect
to EMT only, Liens for such purposes on the trading receivables of EMT arising
from amounts owed by such trading counterparty and/or affiliates thereof to EMT;
provided, however, that no such Liens granted by EMT shall in any way create
rights of offset or netting or Liens against the Company or any Subject
Subsidiary or their respective Assets.

(y) Any Lien not permitted by PARAGRAPHS (a) through (x) above or (z) through
(ii) below securing Debt or Specified Escrow Arrangements of the Company or any
of its Subsidiaries if at the time of, and after giving effect to, the creation
or assumption of any such Lien, the aggregate (without duplication) of the
principal or equivalent amount of all Debt of the Company and its Subsidiaries
secured by all such Liens not so permitted by PARAGRAPHS (a) through (x) above
or (z) through (II) below plus the amount of Attributable Obligations (other
than those relating to Liens described in CLAUSE (a)(viii)) of the Company and
its Subsidiaries in respect of Sale and Lease-Back Transactions permitted by
SECTION 8.14 does not exceed $100,000,000.

(z) To the extent applicable, any overriding royalties or other rights of
Pacific Northwest Pipeline Corporation, a Delaware corporation ("Pacific") and
Phillips Petroleum Company ("Phillips") or their respective successors in
interest under a contract dated January 9, 1953, as amended, between Phillips
and Pacific, to which the Company is successor in interest; and the obligations
of the Company to surrender, transfer, release or reassign the leases or
interests or rights to which said instruments relate under the conditions and
upon the occurrence of the events specified in said instruments.

(aa) Any option or other agreement to purchase any property of any Company or
any Subsidiary the purchase, sale or other disposition of which is not
prohibited by any other provision of this Agreement.

(bb) Liens securing reimbursement obligations with respect to letters of credit
that encumber documents and other property relating to such letters of credit
and the proceeds and products thereof.

(cc) Liens on the products and proceeds (including insurance, condemnation and
eminent domain proceeds) of and accessions to, and contract or other rights
(including rights under insurance policies and product warranties) derivative of
or relating to, property permitted to be subject to Liens under this Agreement



                                                                      Schedule I
<PAGE>

but subject to the same restrictions and limitations herein set forth as to
Liens on such property (including the requirement that such Liens on products,
proceeds, accessions and rights secure only obligations that such property is
permitted to secure).

(dd) Liens on the Property of a Project Finance Subsidiary or the Equity
Interests in such Project Finance Subsidiary securing the Non-Recourse Debt of
such Project Finance Subsidiary.

(ee) Liens on cash and short-term investments incurred in the ordinary course of
business, consistent with past practice and not for the purpose of securing Debt
(i) deposited by the Company or any of its Subsidiaries in margin accounts with
or on behalf of futures contract brokers or other counterparties or (ii) pledged
by the Company or any of its Subsidiaries, in the case of each of CLAUSES (i)
and (II) above, to secure its obligations with respect to (x) contracts
(including without limitation, physical delivery, option (whether cash or
financial), exchange, swap and futures contracts) for the purchase or sale of
any energy-related commodity or (y) interest rate or currency rate management
contracts.

(ff) Liens securing Debt of Apco Argentina, Inc. and/or its Subsidiaries;
provided that such Liens shall only apply to assets owned directly by Apco
Argentina, Inc. and/or its Subsidiaries.

(gg) Liens securing the Barrett Loan.

(hh) Liens securing Permitted Refinancing Debt (as defined below) (and related
obligations) covering the substantially the same collateral) securing
(immediately prior to such refinancing) the Debt Refinanced (as defined below)
by such Permitted Refinancing Debt; provided that: (i) the principal amount of
such Permitted Refinancing Debt does not exceed the principal amount of the Debt
Refinanced (plus the amount of penalties, premiums (including required premiums
and the amount of any premiums reasonably determined by any Company being in its
best economic interest and as necessary to accomplish such Refinancing by means
of a tender offer or privately negotiated repurchase), fees, accrued interest
and reasonable expenses and other obligations incurred in connection therewith)
at the time of refinancing; and (ii) such Debt is incurred either by the Company
or by such Subsidiary that is the obligor of the Debt being Refinanced.
"Permitted Refinancing Debt" means any Debt of the Company or any of its
Subsidiaries issued to Refinance other Debt of the Company or any such
Subsidiaries. "Refinance" means, in respect of any Debt to refinance, extend,
renew, refund, repay, prepay, replace, acquire, redeem, defease or retire, or to
issue other Debt in exchange or replacement, directly or indirectly for, such
Debt in whole or in part.

(ii) Liens extending, renewing or replacing any of the foregoing Liens; provided
that the principal amount of the Debt or other obligation secured by such Lien
is not increased or the maturity thereof shortened and such Lien is not extended
to cover any additional Debt, obligations or property, other than like
obligations of no greater principal amount and the substitution of like property
(or specific categories of property of the same grantor to the extent the terms
of the Lien being extended, renewed or replaced, extended to or covered such
categories of property) of no greater value.

(jj) Liens securing the obligations under that certain Master Agreement dated as
of March 6, 2000 among The Williams Companies Inc, as Guarantor, Williams
TravelCenters, Inc. and certain other subsidiaries of The Williams Companies
Inc., as Lessees, Atlantic Financial Group, Ltd., as Lessor, the Lenders party
thereto, SunTrust Bank, as Agent, Societe Generale, Southwest Agency, as
Documentation Agent and KBC Bank, N.V., as Syndication Agent as amended,
supplemented or otherwise modified.

(kk) Liens on cash deposits in the nature of a right of setoff, banker's lien,
counterclaim or netting of cash amounts owed arising in the ordinary course of
business on deposit accounts permitted pursuant to Section 5.01(k) of the
Primary Credit Agreement.



                                                                      Schedule I
<PAGE>

(ll) Liens securing the Legacy L/Cs resulting from the cash collateralization
thereof in accordance with SECTION 3.2(c) of this Agreement.

(mm) Liens occurring in, arising from, or associated with Specified Escrow
Arrangements.

(nn) Liens granted in connection with (i) Second Amended and Restated
Participation Agreement dated as of January 28, 2002 among Williams Oil
Gathering, L.L.C., a Delaware limited liability company, as Lessee, Williams
Field Services Company, Inc., a Delaware corporation, as Construction Agent, The
Williams Companies, Inc., a Delaware corporation, as Guarantor, Wells Fargo Bank
Northwest, National Association, (formerly known as First Security Bank,
National Association), as Certificate Trustee, Wells Fargo Bank Nevada, N.A.,
(successor by merger to First Security Trust Company of Nevada), as Collateral
Agent, the financial institutions named therein as Certificate Holders, Hatteras
Funding Corporation, a Delaware corporation, as CP Lender, the financial
institutions named therein as the Facility Lenders and Purchasers, Bank of
America, National Association, as Administrative Agent and Administrator for the
CP Lender, Banc Of America Facilities Leasing, L.L.C., as Arranger, Bank of Nova
Scotia, as Syndication Agent, and Credit Agricole Indosuez, as Documentation
Agent, as amended, and related transaction documents and (ii) Second Amended and
Restated Participation Agreement dated as of January 28, 2002 among Williams
Field Services - Gulf Coast Company, L.P., a Delaware limited partnership, as
Lessee, Williams Field Services Company, a Delaware corporation, as Construction
Agent, The Williams Companies, Inc., a Delaware corporation, as Guarantor, Wells
Fargo Bank Northwest, National Association, (formerly known as First Security
Bank, National Association), as Certificate Trustee, Wells Fargo Bank Nevada,
N.A., (successor by merger to First Security Trust Company of Nevada), as
Collateral Agent, the financial institution named therein as Certificate
Holders, Hatteras Funding Corporation, a Delaware corporation, as CP Lender, the
financial institutions named therein as the Facility Lenders and Purchasers,
Bank of America, National Association, as Administrative Agent and Administrator
for the CP Lender, Banc Of America Facilities Leasing, L.L.C., as Arranger, Bank
of Nova Scotia, as Syndication Agent, and Credit Agricole Indosuez, as
Documentation Agent, as amended and related transaction documents.



                                                                      Schedule I
<PAGE>


                                     ANNEX A
                                  TO SCHEDULE I


                    LIENS SECURITY EXISTING DEBT/OBLIGATIONS


Liens existing on July 1, 2002, that secure only Debt and other obligations
incurred or committed and available for draw down on or prior to or outstanding
on July 1, 2002 and listed on Annex A to Schedule I as secured by such Liens.
See clause (r) on Schedule I. Inclusion of the items on this Annex shall not be
deemed an admission or representation that such items are properly categorized
as Debt or that they are secured.

1. Liens granted in connection with the Master Agreement dated as of March 6,
2000, among the Company, as Guarantor, Williams TravelCenters, Inc. and certain
other Subsidiaries of the Company, as Lessees, Atlantic Financial Group, Ltd.,
as Lessor, SunTrust Bank, as Agent, Societe Generale, Southwest Agency, as
Documentation Agent and KBC Bank, N.V., as Syndication Agent and the Lenders
party thereto, as amended, and related transaction documents.

2. Liens granted in connection with the Joint Venture Sponsor Agreement dated as
of December 28, 2000, among TWC, as Sponsor and Williams Field Services Company,
in favor of Prairie Wolf Investors, L.L.C. ("Investor"), Arctic Fox Assets,
L.L.C., Williams Energy (Canada), Inc. and the other Indemnified Persons listed
therein, as amended, and related transaction documents.

3. Liens granted in connection with the PPH Sponsor Agreement dated as of
December 31, 2001, by TWC, as Sponsor, in favor of Piceance Production Holdings
LLC, Plowshare Investors LLC ("Investor"), and other Indemnified Persons listed
in the agreement, as amended, and related transaction documents.

4. Liens granted in connection with the Parent Support Agreement dated as of
December 23, 1998, made by TWC in favor of Castle Associates L.P. ("Castle") and
Colchester LLC ("Investor") and the other Indemnified Persons and Guaranteed
Parties listed therein, as amended, and related transaction documents.

5. Liens granted in connection with the Loan Agreement dated as of March 17,
1998 Pine Needle LNG Company, LLC among Pine Needle LNG Company, LLC and Central
Commercial Lending Institutions as the Lenders and Bank of Montreal as the agent
for the Lenders, and related transaction documents.

6. Liens granted in connection with the Finance Agreement among WilPro Energy
Services (El Furrial) Limited, Overseas Private Investment Corporation dated as
of January 31, 1999, and related transaction documents.

7. Liens granted in connection with the Letter of Credit and Reimbursement
Agreement dated as of May 15, 1994, among Tulsa Parking Authority, The Williams
Companies, Inc., Bank of Oklahoma, National Association and Bank of America
(f/k/a NationsBank of Texas, N.A.), as amended, and related transaction
documents.

8. Liens granted in connection with the Loan Agreement dated as of March 31,
1988 between Pan-Alberta Resources Inc. and Canadian Imperial Bank of Commerce,
as amended, and related transaction documents.


                                                                      Schedule I
<PAGE>

9. Liens granted in connection with the Turbine Financing and Agency Agreement,
dated as of April 16, 2002, among Union Bank of California, N.A., WEMT Equipment
Statutory Trust 2002, Union Bank of California, N.A., as administrative agent,
and Williams Energy Marketing & Trading Company, and related transaction
documents.

10. Liens granted in connection with the Amended and Restated LLC Loan Agreement
dated as of June 9, 2000 among Millennium Energy Fund, L.L.C. and MEF Production
Payment Trust, as amended, and the Amended and Restated Notes Credit Agreement
dated as of June 9, 2000 among MEF Production Payment Trust as the Borrower,
certain financial institutions thereto, Credit Lyonnais as Syndication Agent,
and Bank of Montreal, as Agent, and the Transaction Documents (as defined
therein) related thereto.



                                                                      Schedule I
<PAGE>


                                   SCHEDULE II

                             MATERIAL CONTROVERSIES

                                      None




                                                                     Schedule II
<PAGE>


                                  SCHEDULE III

                               PROGENY FACILITIES

Parent Support Agreement dated as of December 23, 1998, made by The Williams
Companies, Inc. in favor of Castle Associates L. P., Colchester LLC, and the
other Indemnified Persons and Guaranteed Parties listed therein, as amended.
Notwithstanding anything herein to the contrary, for purposes of SECTION 3.2(c)
of this Agreement, the outstanding amount of this Progeny Facility shall equal
the outstanding Unrecovered Capital (as defined in the Castle Partnership
Agreement) of the Limited Partner (as defined in the Castle Partnership
Agreement) plus accrued and undistributed First Priority Return (as defined in
the Castle Partnership Agreement) to be distributed to the Limited Partner in
accordance with Section 4.01(a) of the Castle Partnership Agreement plus all
other amounts then due and payable to the Limited Partner.

First Amended and Restated Term Loan Agreement dated as of October 31, 2002,
among The Williams Companies, Inc., as Borrower, and Credit Lyonnais New York
Branch, as Administrative Agent, and the Lenders named therein, as amended.

Second Amended and Restated Participation Agreement dated as of January 28,
2002, among Williams Oil Gathering, L.L.C., a Delaware limited liability
company, as Lessee, Williams Field Services - Company, a Delaware corporation,
as Construction Agent, the Company, as Guarantor, Wells Fargo Bank Northwest,
National Association (formerly known as First Security Bank, National
Association), as Certificate Trustee, Wells Fargo Bank Nevada, N.A. (successor
by merger to First Security Trust Company of Nevada), as Collateral Agent, the
financial institutions named therein as Certificate Holders, Hatteras Funding
Corporation, a Delaware corporation, as CP Lender, the financial institutions
named therein as the Facility Lenders and Purchasers, Bank of America, National
Association, as Administrative Agent and Administrator for the CP Lender, Banc
Of America Facilities Leasing, L.L.C., as Arranger, Bank of Nova Scotia, as
Syndication Agent, and Credit Agricole Indosuez, as Documentation Agent, as
amended.

Second Amended and Restated Participation Agreement dated as of January 28, 2002
among Williams Field Services - Gulf Coast Company, L.P., a Delaware limited
partnership, as Lessee, Williams Field Services Company, a Delaware corporation,
as Construction Agent, the Company, as Guarantor, Wells Fargo Bank Northwest,
National Association (formerly known as First Security Bank, National
Association), as Certificate Trustee, Wells Fargo Bank Nevada, N.A. (successor
by merger to First Security Trust Company of Nevada), as Collateral Agent, the
financial institutions named therein as Certificate Holders, Hatteras Funding
Corporation, a Delaware corporation, as CP Lender, the financial institutions
named therein as the Facility Lenders and Purchasers, Bank of America, National
Association, as Administrative Agent and Administrator for the CP Lender, Banc
Of America Facilities Leasing, L.L.C., as Arranger, Bank of Nova Scotia, as
Syndication Agent, and Credit Agricole Indosuez, as Documentation Agent, as
amended by the Consent and First Amendment dated as of July 31, 2002 and the
Consent and Second Amendment dated as of October 31, 2002.

Term Loan Agreement dated as of January 29, 1999, among The Williams Companies,
Inc., as Borrower, and The Fuji Bank, Limited, as Administrative Agent, and the
Banks named therein, as amended.

Joint Venture Sponsor Agreement dated as of December 28, 2000, among the
Williams Company, Inc., as Sponsor, and Williams Field Services Company, in
favor of Prairie Wolf Investors, L.L.C. Arctic Fox Assets, L.L.C., Williams
Energy (Canada), Inc. and the other Indemnified Persons listed therein, as
amended.

Letter of Credit and Reimbursement Agreement dated as of May 15, 1994, among
Tulsa Parking Authority, The Williams Companies, Inc., Bank of Oklahoma,
National Association, and Bank of America, N.A.



                                                                    Schedule III

<PAGE>
(formerly NationsBank of Texas, N.A.), relative to Tulsa Parking Authority First
Mortgage Revenue Bonds, as amended.

Master Agreement dated as of March 6, 2000, among The Williams Companies, Inc.,
as Guarantor, Williams TravelCenters, Inc. and certain other subsidiaries of the
Company, as Lessees, Atlantic Financial Group, Ltd., as Lessor, SunTrust Bank,
as Agent, Societe Generale, Southwest Agency, as Documentation Agent, and KBC
Bank, N.V., as Syndication Agent, and the Lenders party thereto, as amended.

PPH Sponsor Agreement dated as of December 31, 2001, by The Williams Companies,
Inc., as Sponsor, in favor of Piceance Production Holdings LLC, Plowshare
Investors LLC, and other Indemnified Persons listed in the agreement, as
amended. Notwithstanding anything herein to the contrary, for purposes of
SECTION 3.2(c) of this Agreement, the outstanding amount of this Progeny
Facility shall equal the outstanding Contributed Capital of the Class B
Preferred Member (each as defined in the PPH Company Agreement) plus the accrued
and unpaid Class B Priority Return (as defined in the PPH Company Agreement)
plus all other amounts then due and payable to the Class B Preferred Member.

Amended and Restated LLC Loan Agreement, dated as of June 9, 2000, among
Millennium Energy Fund, L.L.C. and MEF Production Payment Trust, as amended, the
Amended and Restated Notes Credit Agreement dated as of June 9, 2000 among MEF
Production Payment Trust as Borrower, certain financial institutions, Credit
Lyonnais as Syndication Agent, and Bank of Montreal, as Agent, and the
Transaction Documents (as defined therein) related thereto.

Outstanding letters of credit as of July 31, 2002 (as set forth on Schedule III
to the Primary Credit Agreement) to the extent they have not been fully cash
collateralized.

All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with any of the foregoing.



                                                                    Schedule III
<PAGE>


                                   SCHEDULE IV

                            ADDITIONAL PUBLIC FILINGS


         1.       Consolidated Amended Complaint, In Re Williams Securities
                  Litigation, Case No. 02-CV-72-H(M) in the United States
                  District Court for the Northern District of Oklahoma.



                                                                     Schedule IV
<PAGE>

                                   SCHEDULE V

                             PERMITTED DISPOSITIONS


1.       Apco Argentina

         o    Apco Argentina, Inc.

         o    Apco Properties Ltd. (100%)

         o    Petrolera Perez Companc S.A. (33.6% - Currently in process of
              purchasing an additional 5.5%)

2.       Energy International

         o    Energy International Corporation (owns "Gas to Liquids"
              technology).

3.       Discovery

         o    Williams Energy, L.L.C. owns a 50% interest in Discovery Producer
              Services LLC (unregulated) which in turn is the sole member of
              Discovery Gas Transmission LLC (regulated).

4.       Southern Ute (Collateral)

         o    Williams Field Services Company's interest in natural gas pipeline
              gathering systems totaling approximately 91 miles of pipeline in
              La Plata County, Colorado, together with all associated real
              property interests, shipper contracts, and governmental permits,
              licenses, orders, approvals, certificates of occupancy and other
              authorizations.

5.       Dry Trail CO(2) Recovery Plant (Collateral)

         o    Williams Field Services Company owns and operates a 50 MMcfd CO(2)
              recovery plant in Texas County, Oklahoma located on 26 acres near
              the town of Hough, Oklahoma to remove and recycle CO(2) at
              ExxonMobil's Postle field enhanced oil recovery project.

6.       Aux Sable and Alliance Canada Marketing L.P.

         o    Williams Alliance Canada Marketing Inc. has a 14.604% interest in
              Alliance Canada Marketing Ltd. which owns a 1% interest in and is
              the general partner of Alliance Canada Marketing L.P. (the
              "Alliance LP"). Williams Alliance Canada Marketing Inc. also owns
              a 14.604% limited partnership interest in the remaining 99% of the
              Alliance LP.

         o    Williams Natural Gas Liquids Canada, Inc. has a 14.604% interest
              in Aux Sable Canada Ltd. which owns a 1% interest in and is the
              general partner of Aux Sable Canada LP (the "Canada LP"). Williams
              Natural Gas Liquids Canada, Inc. also owns a 14.604% limited
              partnership interest in the remaining 99% of the Canada LP.

         o    Williams Natural Gas Liquids, Inc. has a 14.604% interest in Aux
              Sable Liquid Products Inc. which owns a 1% interest in and is the
              managing general partner of Aux Sable Liquid Products LP (the
              "Liquid LP"). Williams Natural Gas Liquids, Inc. also owns a
              14.604% limited partnership interest in the remaining 99% of the
              Liquid LP.

7.       Deepwater

         o    Devil's Tower

              The Devil's Tower floating production facility currently under
              construction that will be located



                                                                      Schedule V
<PAGE>

              on block 773 of Mississippi Canyon. The oil and gas export
              pipelines attached to the Devil's Tower Spar known as Canyon
              Chief and Mountaineer and associated pumps, compressors,
              platforms and other equipment.

         o    Gunnison

              The oil pipeline known as the Alpine Pipeline that begins at the
              Gunnison discovery and terminates at the platform located at GA
              244.

         o    Canyon Station

              The Canyon Station fixed leg platform located at Main Pass block
              261 which processes oil and gas production from deepwater wells
              located in Mississippi Canyon.

         o    Equity of the Deepwater JV.

         o    Collectively, the property referred to in this Item 8 shall be
              referred to as the "Deepwater Assets;" provided that, for
              clarification such assets are not subject to the Deepwater
              Transactions so long as such Deepwater Transactions are in full
              force and effect.

8.       Gulf Liquids

         o    Gulf Liquids New River Project, LLC and its assets and
              liabilities. Gulf Liquids New River Project LLC is 90% owned by
              Gulf Liquids Holdings, LLC, which is 100% owned by EM&T.

9.       EM&T (Collateral)

         o    Equity Interest in Williams Energy Marketing & Trading Company.

10.      Worthington Generation, L.L.C. (Collateral)

         o    Equity Interests and assets of Worthington Generation, L.L.C.

11       Williams Generation Company-Hazelton (Collateral)

         o    Equity Interests and assets of Williams Generation
              Company-Hazelton.

12.      Williams Energy (Canada), Inc. and its Subsidiaries

         o    Equity Interests and assets of William Energy (Canada), Inc. and
              its Subsidiaries.

13.      Those certain gathering and related assets owned by Goebel Gathering
         Company, L.L.C. and WFS Gathering Company, L.L.C. subject to purchase
         and sale agreements with Enbridge Pipelines (Texas Gathering) Inc.
         dated October 10, 2001 for a purchase price of approximately
         $9,000,000. (Collateral)

14.      Property received from any sale, transfer or other disposition of
         Collateral made pursuant to SECTION 8.16. (Collateral)



                                                                      Schedule V
<PAGE>

15.      Mapco Office Building (Collateral)

16.      For the avoidance of doubt, the disposition or redemption of the
         Class B Units in MLP shall not be a Permitted Disposition.

17.      Interests in joint development arrangements existing on July 31, 2002
         by Williams Energy Marketing & Trading Company, which are transferred
         as a result of Williams Energy Marketing & Trading Company's decision
         not to continue funding.



                                                                      Schedule V
<PAGE>

                                  SCHEDULE 2.1

                             LENDERS AND BORROWINGS



<Table>
<Caption>
                                                         OUTSTANDING                     PERCENTAGE
            NAME AND ADDRESS OF LENDERS                  BORROWINGS                       OF TOTAL
            ---------------------------                  -----------                     ----------

<S>                                                  <C>                                <C>
Credit Lyonnais New York Branch                      $ 36,314,900                            10.000%
1301 Avenue of the Americas
New York, New York 10019

Commerzbank  AG New York and Grand Cayman Branches   $ 27,236,175                             7.500%
1230 Peachtree Street, Northeast, Suite 3500
Atlanta, Georgia 30309

The Bank of Nova Scotia                              $ 18,157,450                             5.000%
600 Peachtree Street, Northeast, Suite 2700'
Atlanta, Georgia 30308

Bayerische Hypo-Und Vereinsbank AG, New York Branch  $ 40,854,262                            11.250%
150 East 42nd Street, 29th Floor
New York New York 10048

Mizuho Corporate Bank, Ltd.                          $ 45,393,625                            12.500%
1221 McKinney Street, Suite 4100
Houston, Texas 77010

KBC Bank N.V.                                        $ 18,157,450                             5.000%
245 Peachtree Center Avenue, Suite 2550
Atlanta, Georgia 30303

The Royal Bank of Scotland, plc                      $ 27,236,175                             7.500%
Wall Street Plaza
88 Pine Street, 26th Floor
New York, New York 20005-1801

BNP Paribas                                          $ 18,157,450                             5.000%
1200 Smith Street, Suite 3100
Houston, Texas 77002

Hau Nan Commercial Bank, Ltd.                        $ 18,157,450                             5.000%
Two World Trade Center, Suite 2846
New York, New York 10048

Landesbank Rhenland-Pfalz, Girozentrale              $  9,078,725                             2.500%
Grosse Bleiche 54-56
Mainz, Germany 55092
</Table>



                                                                    Schedule 2.1
<PAGE>

<Table>
<Caption>
                                                         OUTSTANDING                     PERCENTAGE
            NAME AND ADDRESS OF LENDERS                  BORROWINGS                       OF TOTAL
            ---------------------------                  -----------                     ----------

<S>                                                  <C>                                <C>
Abu Dhabi International Bank Inc.                    $ 9,078,725                              2.500%
1020 19th Street, Northwest, Suite 500
Washington, DC 20036

Chang Hwa Commercial Bank, Ltd. New York Branch      $ 9,078,725                              2.500%
One World Trade Center, Suite 3211
New York, New York 10048

Land Bank of Taiwan, Los Angeles Branch              $ 9,078,725                              2.500%
811 Wilshire Boulevard, Suite 1900
Los Angeles, California  90017

Gulf International Bank                              $ 9,078,725                              2.500%
380 Madison Avenue, 21st Floor
New York, New York 10017

Local Oklahoma Bank, N.A.                            $ 9,078,725                              2.500%
2250 East 73rd Street, Suite 200
Tulsa, Oklahoma 74136

Landesbank Schleswig-Holstein Girozentrale           $ 9,078,725                              2.500%
Martensdamm 6
Kiel, Germany  24103

National Bank of Kuwait, S.A.K., Grand Cayman        $ 9,078,725                              2.500%
Branch
299 Park Avenue, 17th Floor
New York, New York 10171

Sumitomo Mitsui Banking Corporation                  $ 9,078,725                              2.500%
277 Park Avenue, 6th Floor
New York, New York 10172

UFJ Bank Limited                                     $ 9,078,725                              2.500%
55 East 52nd Street
New York, New York 10055

First Commercial Bank-New York Agency                $ 9,078,725
76 Madison Avenue, 12th Floor                                                                 2.500%
New York, New York  10016

Bank Polska Kasa Opieki S.A.                         $ 4,539,363                              1.250%
470 Park Avenue South
32nd Street, 15th Floor
New York, New York 10016
</Table>



                                                                    Schedule 2.1

<PAGE>

<Table>
<Caption>
                                                         OUTSTANDING                     PERCENTAGE
            NAME AND ADDRESS OF LENDERS                  BORROWINGS                       OF TOTAL
            ---------------------------                  -----------                     ----------

<S>                                                  <C>                                      <C>
Landesbank Saar Girozentrale                         $ 4,539,363                              1.250%
Ulsulenan Strasse
Saabrucken, Germany 266111

Salomon Brothers Holding Company, Inc.               $ 4,539,363                              1.250%
333 West 34th Street, 8th Floor
New York, New York 10001

                     Totals                          $363,149,000                           100.000%
</Table>



                                                                    Schedule 2.1

<PAGE>

                                  SCHEDULE 6.1

                         CONDITIONS PRECEDENT TO CLOSING


         The Agreement shall not become effective unless Administrative Agent
has received all of the following (unless otherwise indicated, all documents
shall be dated as of October 31, 2002 and all terms used with their initial
letters capitalized are used herein with their meanings as defined in the
Agreement):

        1. The Agreement. The Agreement (together with all Schedules and
Exhibits thereto) executed by the Company, the Guarantors, the Determining
Lenders, and Administrative Agent.

        2. Amended Guaranties. An amended and restated Holdings Guaranty and a
First Amendment to the LLC Guaranty, in form and substance satisfactory to the
Administrative Agent and the Determining Lenders.

         3. Certificate of Incorporation; Articles of Organization. A copy of
the Certificate of Incorporation of the Company and the Articles of Organization
of each Guarantor, accompanied by certificates that such copies are correct and
complete, one dated a Current Date (as used herein, the term "CURRENT DATE"
means any date not more than thirty (30) days prior to the Closing Date) issued
by the Secretary of State of the state in which such Business Entity is
organized, and one dated the Closing Date executed by its Secretary or Assistant
Secretary.

         4. Bylaws; Operating Agreement. A copy of the Bylaws of the Company and
all amendments thereto, accompanied by a certificate that such copy is correct
and complete, dated the Closing Date and executed by the Secretary or Assistant
Secretary of the Company, and a copy of the Operating Agreement (or similar
formation document) of each Guarantor and all amendments thereto, accompanied by
a certificate that such copy is correct and complete, dated the Closing Date and
executed by the Secretary or Assistant Secretary of such Guarantor.

         5. Good Standing and Authority. Certificates of the Delaware Secretary
of State and the Oklahoma Secretary of State, dated a Current Date, to the
effect that the Company and the Guarantors are in good standing with respect to
the payment of franchise and similar Taxes (to the extent such information is
available) and is duly qualified to transact business in such jurisdiction.

         6. Incumbency. Certificates of incumbency dated as of the Closing Date
with respect to all officers and "authorized representatives" of the Company and
the Guarantors who will be authorized to execute or attest any of the Loan
Papers on behalf of the Company or such Guarantor, executed by the Secretary or
an Assistant Secretary of the Company or such Guarantor, as applicable.

         7. Resolutions. Copies of resolutions duly adopted by the Board of
Directors of the Company and the Guarantors approving this Agreement and the
other Loan Papers and authorizing the transactions contemplated in such Loan
Papers, accompanied by a certificate of the Secretary or an Assistant Secretary
of the Company or such Guarantor, as applicable dated as of the Closing Date
certifying that such copy is a true and correct copy of resolutions duly adopted
at a meeting of (which may be held by conference telephone or similar
communications equipment by means of which all Persons participating in a
meeting can hear each other if permitted by applicable Law and, if required by
such Law, by its Bylaws), or by the unanimous written consent of (if permitted
by applicable Law and, if required by such Law, by its Bylaws), the Board of
Directors of the Company or such Guarantor, as applicable, and that such
resolutions constitute all the resolutions adopted with respect to such
transactions, have not been amended, modified, or revoked in any respect (except



                                                                    Schedule 6.1


<PAGE>

as any such resolution may be modified by any such other resolution), and are in
full force and effect as of the Closing Date.

         8. A certificate of an officer of the Company, dated as of the date of
this Agreement (the statements made in each such certificate shall be true on
and as of such date), certifying as to (i) the truth, in all material respects,
of the representations and warranties contained in this Agreement and the Loan
Papers as though made on and as of the date of this Agreement other than any
such representations or warranties that, by their terms, refer to a specific
date other than such date, in which case as of such specific date and (ii) the
absence of any event (x) occurring and continuing after giving effect to this
Agreement, the Barrett Loan Agreement and the agreements described in item (11)
below and the consummation of the transactions contemplated thereby, or (y)
resulting from the execution and delivery of this Agreement and the other Loan
Papers and the performance of the Company of its obligations hereunder or under
any other Loan Paper, that constitutes a Default.

         9. Opinions of Counsel to the Company. (i) The opinion of the General
Counsel to the Company and the Guarantors, addressed to Administrative Agent,
Syndication Agent, Documentation Agent, and Lenders, substantially in the form
of EXHIBIT D-1, and (ii) the opinion of New York counsel to the Company and the
Guarantors, substantially in the form of EXHIBIT D-2, each dated the Closing
Date and in form and substance satisfactory to the Administrative Agent.

         10. Payment of Closing Fees and Expenses. Payment of all fees payable
on or prior to the Closing Date to Administrative Agent and the Lenders as
provided for in SECTION 5 of the Agreement, together with reimbursements to
Administrative Agent for all reasonable fees and expenses incurred in connection
with the negotiation, preparation, and closing of the transactions evidenced by
the Loan Papers (including, without limitation, reasonable attorneys' fees and
expenses).

         11. A duly executed and fully effective (i) amendment and restatement
of the L/C Agreement, (ii) amendment and restatement of the Primary Credit
Agreement, and (iii) amendment of each of the Progeny Facility documents, other
than this Agreement and those automatically amended by virtue of the amendment
and restatement of the Primary Credit Agreement, each dated the date of this
Agreement and in form and substance satisfactory to the Administrative Agent.



                                                                    Schedule 6.1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>13
<FILENAME>d00961exv10w11.txt
<DESCRIPTION>FORM OF SUBORDINATED GUARANTY
<TEXT>
<PAGE>


                                                                   EXHIBIT 10.11
                                                                  EXECUTION COPY


                       SETTLEMENT AND RETENTION AGREEMENT


         THIS SETTLEMENT AND RETENTION AGREEMENT ("Agreement") is entered into
this 7th day of August, 2002, by and between THE WILLIAMS COMPANIES, INC., a
Delaware Corporation ("Company"), and William G. von Glahn ("Executive");

         WHEREAS, Executive has expressed an interest in retiring immediately
due to health considerations;

         WHEREAS, the Company has determined that it is critical to retain the
services of Executive as an employee until January 2, 2003 ("Separation Date")
in order to have sufficient time to appoint Executive's successor and to permit
the orderly transition of projects from Executive to such successor;

         WHEREAS, the Company has also determined that the continued
availability of Executive after his retirement is also needed in order to
provide such orderly transition;

         WHEREAS, Executive is willing to delay his retirement to the Separation
Date and to provide consulting services after his retirement in accordance with
the provisions of this Agreement and the Consulting Agreement, a copy of which
is attached hereto as Exhibit "A";

         WHEREAS, Executive has requested, effective on his Separation Date, a
distribution of his entire interest in the Williams Companies Supplemental
Retirement Plan ("SERP") to be applied as an offset to his stock option loan in
accordance with this Agreement and Executive understands that he will not
receive any further consideration, benefits or payments under the SERP; and




<PAGE>

         WHEREAS, Executive further understands that his voluntary retirement on
the Separation Date pursuant to this Agreement, will prevent him from receiving
his Company deferred stock awards that would otherwise vest on or after January
2, 2003, unless such awards should vest, in accordance with their respective
terms, during his employment for reasons such as the Executive's death; and

         NOW, THEREFORE, in consideration of their mutual promises made herein
and for other good and valuable consideration, and intending to be legally
bound, the Company and Executive hereby agree as follows:

                  1. Executive Services. Executive agrees to continue to perform
         his services as General Counsel until January 2, 2003 or such earlier
         time as may be determined by the Company in its sole and absolute
         discretion. It is expressly recognized by the parties hereto that
         Executive will continue to be employed by the Company as an "at will"
         employee and that the Company may terminate his services at any time
         with or without any reason. During his employment, Executive shall
         receive his current salary and except as otherwise provided in this
         Agreement, he shall be entitled to continue to participate in those
         employee benefit programs currently made available to him, unless such
         employee benefit programs are amended or terminated in accordance with
         their respective terms. The termination of Executive's employment prior
         to January 2, 2003 shall not in any way relieve Executive of any of his
         obligations hereunder including, but not limited to, his duty to
         provide consulting services and to provide a written release to the
         Company in accordance with the terms hereof.





                                       2
<PAGE>

                  2. Company Payments. On, or within ten (10) days of the date
         on which the Release Agreement set forth in Exhibit "B" becomes
         effective in accordance with its terms, the Company shall, in
         consideration of Executive's covenants and obligations hereunder:

                           (i)      Grant Executive's request to receive and
                                    apply his entire benefit with respect to the
                                    SERP, having a total value of Two Million,
                                    One Hundred Ninety-three Thousand, One
                                    Hundred and Thirty-two Dollars
                                    ($2,193,132.00), less all amounts required
                                    to be withheld under applicable federal and
                                    state tax laws, as an offset to his stock
                                    option loan;

                           (ii)     Pay Executive the sum of Three Hundred
                                    Thousand Dollars ($300,000.00), less all
                                    amounts required to be withheld under
                                    applicable federal and state tax laws, as a
                                    retention payment, provided the Company
                                    shall be entitled to apply the net amount
                                    due (after applicable tax withholdings) as a
                                    loan offset;

                           (iii)    Pay Executive, in connection with his
                                    retirement on the Separation Date pursuant
                                    to this Agreement, the sum of Five Hundred
                                    and Seventy-one Thousand Dollars
                                    ($571,000.00), less all amounts required to
                                    be withheld under applicable federal and
                                    state tax laws, as a severance payment in
                                    lieu of any and all severance payments, that
                                    may be owed to the Executive, provided the
                                    Company shall be entitled to apply





                                       3
<PAGE>

                                    the net amount due (after applicable tax
                                    withholdings) as a loan offset; and

                           (iv)     Pay Executive the sum of Two Hundred Fifty
                                    Thousand Dollars ($250,000.00), less all
                                    amounts required to be withheld under
                                    applicable federal and state tax laws, for
                                    agreeing to not compete, executing the
                                    Consulting Agreement set forth on Exhibit
                                    "A", and agreeing not to solicit employees,
                                    provided the Company shall be entitled to
                                    apply the net amount due (after applicable
                                    tax withholdings) as a loan offset.

                  Unless Executive has repaid his stock option loan, the Company
         shall not be required to deliver any funds to Executive in order to
         satisfy its obligations under this Paragraph 2. The Company's
         obligation with respect to such payments shall be limited to: (i)
         withholding and remitting to the appropriate governmental agency the
         minimum withholding amounts required under applicable federal and state
         laws and regulations and (ii) applying the remaining amount of such
         payments as an offset to repay the Executive's stock option loan until
         such loan is discharged in full with the balance of the payments, if
         any, being remitted to Executive. If the payments hereunder are not
         sufficient to repay such loan, Executive shall repay the remaining
         indebtedness of such loan within thirty (30) days after Executive's
         termination of employment, and, upon such payment, Company shall
         release the existing collateral for the loan.




                                       4
<PAGE>

                  3. SERP. The Executive hereby acknowledges and agrees that his
         SERP benefit is being paid to him at his request and that he will not
         be entitled to any further payments under the SERP. Executive hereby
         releases and forever discharges the SERP, the Company, its subsidiaries
         and affiliates (the "Williams Group") from any and all liabilities in
         connection with the SERP, including, but not limited to, any liability
         to provide any further payments to Executive. In addition, Executive
         hereby voluntarily waives any right which he may otherwise have to
         participate in the SERP and acknowledges and agrees that his release
         and waiver under this Paragraph 3 is part of the consideration for the
         agreement of the Company to permit his SERP benefit to be used as an
         offset to his loan obligation.

                  4. Severance. Due to the retention and severance payment being
         made hereunder, Executive also hereby voluntarily waives any right
         which he may have to receive severance payments (other than the
         payments provided hereunder) of any nature whatsoever from the Company,
         including but not limited to, the severance payments that are provided
         under any severance plans, practices, programs or agreements maintained
         by or contributed to by the Williams Group, including, but not limited
         to, any change-in-control severance plan or agreement.

                  5. Forfeiture of Deferred Stock Awards. Since the Executive's
         employment will cease on the Separation Date due to his voluntary
         retirement on January 2,






                                       5
<PAGE>

         2003, Executive further acknowledges and agrees that all of his
         existing deferred stock awards that are scheduled to vest on or after
         January 2, 2003 will be forfeited unless such awards vest before that
         date pursuant to their existing terms.

                  6. Consulting. Executive and Company agree that Executive,
         upon the termination of his employment, will provide consulting
         services to the Company in accordance with the terms of the Consulting
         Agreement attached hereto as Exhibit "A".

                  7. Execution of Release. Executive agrees to execute no
         earlier than January 3, 2003, the Release Agreement attached hereto as
         Exhibit "B", provided that the Release shall in no way impair
         Executive's rights to indemnity from the Williams Group, including, but
         not limited to, his rights to indemnification under any certificate of
         incorporation, any by-laws, any corporate resolutions, any employee
         benefit plans, any insurance policies or any other instrument or
         agreement to which a member of the Williams Group is bound. Executive
         further understands that the execution of such Release is a material
         part of the consideration for the Company payments under Paragraph 2
         hereof.

                  8. EICP Bonus. Executive may receive a bonus under the
         Executive Incentive Compensation Program for the 2002 calendar year.
         Such bonus, if any, will be determined by the Compensation Committee
         and will be based on a target opportunity of sixty-five percent (65%)
         of base pay, actual Company financial performance and, as determined by
         the Compensation Committee, stock performance and personal performance.
         The bonus, if any, will be paid, less all amounts required to be
         withheld under applicable federal and state tax laws, in a lump sum at
         the same time payment is made to other participants,






                                       6
<PAGE>

         provided the Company shall be entitled to apply the net amount due
         (after applicable tax withholdings) as a loan offset.

                  9. Insurance and Indemnification. To the extent permitted by
         law and as provided in its Certificate of Incorporation and By-Laws,
         the Company shall use its best efforts to maintain directors and
         officers insurance providing coverage to Executive for, and shall
         indemnify and hold harmless Executive from, all claims made against him
         to the extent they relate to, or arise out of, his employment at the
         Company as a director, officer or employee.

                  10. Benefits. Except as otherwise provided in Paragraphs 3, 4
         and 5 hereof, nothing contained herein shall be construed to abrogate
         Executive's rights under any employee benefit or incentive compensation
         plan. Executive's rights under any such employee benefit or incentive
         compensation plan shall be governed by the terms of such plan.

                  11. Confidentiality. Executive covenants and agrees that,
         during and for six (6) years after termination of Executive's
         employment with Company, Executive shall not, unless required by
         applicable law, divulge, furnish, disclose or make accessible to any
         person, entity or governmental authority any knowledge or information,
         techniques, processes, trade secrets, customer information or lists,
         plans, devices or material with respect to any secret, confidential or
         sensitive research or development work, promotions, ideas,
         opportunities, business plans, designs, products or production methods
         of the Williams Group or with respect to any other secret, confidential
         or sensitive aspect of the business of the Williams Group, except as
         may be necessary in the






                                       7
<PAGE>

         furtherance and conduct of the business of the Williams Group. It is
         acknowledged that the Williams Group would be irreparably harmed if
         Executive should breach the provisions of this Paragraph 11.
         Accordingly, the Company is granted the right of specific performance
         to enforce the provisions of this Paragraph 11. The Executive also
         acknowledges that this Paragraph 11 is a material term of this
         Agreement and that its breach could result in damage to the Williams
         Group that may be difficult to ascertain and that upon any such breach
         or in reasonable anticipation of any such breach, the Company will be
         entitled to an order of any court of competent jurisdiction to enjoin
         such breach.

                  12. Exclusive Service. Executive shall devote his full
         business time and attention and his best efforts to the performance of
         his duties hereunder.

                  13. Derogatory Remarks. The Executive will not make public
         derogatory comments regarding the Williams Group at any time before or
         after his termination of employment.

                  14. Files and Records. Promptly upon termination of his
         employment, the Executive will return to the Company all property and
         all files and other documentation belonging to or relating or in any
         way pertaining to the Williams Group or the business or operations of
         the Williams Group, except as may be required by the Executive in the
         bona fide enforcement of this Agreement.

                  15. Cooperation in Litigation. To the extent reasonably
         necessary and upon reasonable notice, following his termination of
         employment, the Executive will cooperate with the Williams Group in
         connection with the prosecution or defense of any claim asserted by or
         against any of them (excluding a claim in






                                       8
<PAGE>

         connection with the enforcement of this Agreement) with respect to
         which the Executive may have any knowledge.

                  16. General Provisions.

                           (a) Binding Agreement: This Agreement will be binding
                  upon, and inure to the benefit of, Executive and the Company
                  and their respective permitted successors and permitted
                  assigns.

                           (b) Amendment of Agreement: This Agreement may not be
                  modified or amended except by an instrument in writing signed
                  by both Executive and a duly authorized representative of
                  Company.

                           (c) Waiver: No term or condition of this Agreement
                  will be deemed to have been waived, nor will there by any
                  estoppel against the enforcement of any provision of this
                  Agreement, except by written instrument of the party charged
                  with such waiver or estoppel. No such written waiver will be
                  deemed a continuing waiver unless specifically stated therein,
                  and each such waiver will operate only as to the specific term
                  or condition waived and shall not constitute a waiver of such
                  term or condition for the future or as to any act other than
                  that specifically waived.

                           (d) Headings: The heading of paragraphs or
                  subparagraphs herein are included solely for convenience or
                  reference and will not control the meaning or interpretation
                  of any of the provisions of this Agreement.

                           (e) Notices: Any and all notices required to be sent
                  pursuant to the terms of this Agreement will be sent by
                  registered or certified mail or be personally delivered to the
                  parties hereto at the following addresses or



                                       9
<PAGE>


                  such other addresses as they may designate:

                           Executive:
                           William G. von Glahn
                           2767 S. Utica
                           Tulsa, OK 74114

                           Company:

                           The Williams Companies, Inc.
                           Attn:  Senior Vice President, Human Resources
                           One William Center
                           P. O. Box 2400
                           Tulsa, Oklahoma 74102

                           (f) Governing Law: All the terms and provisions of
                  this Agreement and their validity, interpretation, performance
                  and enforcement will be governed by the laws of the State of
                  Oklahoma.

                           (g) Agreement Binding: Except as otherwise expressly
                  provided herein, the obligations of Executive under this
                  Agreement will continue after the termination of Executive's
                  employment with the Company for any reason, and will be
                  binding on Executive's heirs, executors, legal representatives
                  and permitted assigns and will inure to the benefit of the
                  Company and any successors and assigns of the Company.



                                       10
<PAGE>


         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day first written above.

                                          THE WILLIAMS COMPANIES, INC.

                                          By: /s/ Michael P. Johnson
                                             ----------------------------------
                                          Title: Senior Vice President
                                                 ------------------------------

Witness:
/s/ Marcia M. MacLeod
- ------------------------------------

                                          /s/ William G. von Glahn
                                          -------------------------------------
                                          William G. von Glahn



                                       11
<PAGE>


                                   EXHIBIT "A"

                              CONSULTING AGREEMENT

         THIS CONSULTING AGREEMENT is entered into this 7th day of August, 2002,
by and between THE WILLIAMS COMPANIES, INC. a Delaware Corporation, ("Williams")
and William G. von Glahn ("Consultant").

         WHEREAS, Williams wishes to avail itself of Consultant's knowledge,
expertise and experience by hiring Consultant as a consultant;

         WHEREAS, Consultant is willing to serve as a consultant to Williams
upon the terms and conditions set forth below;

         NOW, THEREFORE, in consideration of their mutual promises and for other
good and valuable consideration, Williams and Consultant hereby agree as
follows:

         1. Consulting Services.

                  (a) During the period beginning on the date on which
         Consultant ceases to be employed by Williams and continuing until
         December 31, 2005 (the "Consulting Period"), Consultant shall provide
         to Williams, its subsidiaries and affiliates (the "Williams Group"),
         consulting services commensurate with his status and experience with
         respect to such matters as shall be reasonably requested from time to
         time by the General Counsel of Williams (the "Williams
         Representative"), provided that Consultant shall not be required to
         provide such services during any period when he is unable to perform
         due to his health. Consultant shall provide consulting services to the
         Williams Group only as needed and when reasonably requested by the
         Williams Representative, provided that, without his prior consent,
         Consultant shall not be required to






<PAGE>

         devote more than one hundred twenty (120) hours in any calendar month
         to the performance of any consulting services hereunder. The Consultant
         shall determine the time and location at which he shall perform such
         services, subject to the right of the Williams Representative to
         reasonably request by advance written notice that such services be
         performed at a specific time and at a specific location. The Consultant
         shall honor any such request unless he is unable to perform due to his
         health, or he has a conflicting business commitment that would preclude
         him from performing such services at the time and/or place requested by
         the Williams Representative, and in such circumstances, shall make
         reasonable efforts to arrange a mutually satisfactory alternative.
         Williams shall use its reasonable best efforts not to require the
         performance of consulting services in any manner that unreasonably
         interferes with any other business activity of Consultant.

                  (b) Consultant shall not, solely by virtue of the consulting
         services provided hereunder, be considered to be an officer or employee
         of any member of the Williams Group during the Consulting Period, and
         shall not have the power or authority to contract in the name of or
         bind any member of the Williams Group. Consultant shall at all times be
         treated as an independent contractor and shall be responsible for the
         payment of all taxes with respect to all amounts paid to him hereunder.
         Consultant shall not, by reason of the services performed hereunder, be
         entitled to participate in any employee benefits plan, program or
         arrangement made available to any employee of the Williams Group.






                                       2
<PAGE>

                  (c) This Agreement is personal to the Consultant and all of
         the services required of the Consultant hereunder shall be performed
         personally by him.

         2. Consulting Fees. In respect of the services to be performed
hereunder, Williams shall pay Consultant Three Hundred Fifty Dollars ($350.00)
for each hour of consulting service, within ten (10) business days following
submission by Consultant of an itemized report indicating the hours of service
performed and fully describing the services rendered. Williams shall also
reimburse Consultant for such reasonable travel, lodging and other appropriate
expenses incurred by Consultant in the course or on account of rendering
consulting services hereunder, subject to the submission by the Consultant of
evidence of such expenses in a form reasonably satisfactory to Williams.

         3. Confidential Information. The Consultant shall not, at any time
during the Consulting Period, make use of or disclose, directly or indirectly,
any (i) trade secret or other confidential or secret information of the Williams
Group or (ii) other technical, business, proprietary or financial information of
the Williams Group not available to the public generally or to the competitors
of the Williams Group ("Confidential Information"), except to the extent that
such Confidential Information (a) becomes a matter of public record or is
published in a newspaper, magazine or other periodical available to the general
public, other than as a result of any act or omission of the Consultant, (b) is
required to be disclosed by any law, regulation or order of any court or
regulatory commission, department or agency, provided that the Consultant gives
prompt notice of such requirement to Williams to enable Williams to seek an
appropriate protective order, or (c) is necessary to perform properly the
Consultant's duties under this Agreement.




                                       3
<PAGE>

Promptly following the termination of the Consulting Period, the Consultant
shall surrender to Williams all records, memoranda, notes, plans, reports,
computer tapes and software and other documents and data which constitute
Confidential Information which he may then possess or have under his control
(together with all copies thereof).

         4. Noncompetition; Nonsolicitation.

                  (a) The Consultant acknowledges that during the Consulting
         Period he will become familiar with trade secrets and other
         confidential information concerning the Williams Group and that his
         services will be of special, unique and extraordinary value to the
         Williams Group.

                  (b) The Consultant agrees that during the Consulting Period he
         shall not in any manner, directly or indirectly, through any person,
         firm or corporation, alone or as a member of a partnership or as an
         officer, director, stockholder, investor or employee of or consultant
         to any other corporation or enterprise or otherwise, engage or be
         engaged, or assist any other person, firm corporation or enterprise in
         engaging or being engaged, in any business, in which the Consultant was
         involved or had knowledge, being conducted by, or contemplated by, the
         Williams Group during the Consulting Period, in any geographic area in
         which the Williams Group is then conducting such business.

                  (c) The Consultant further agrees that during the Consulting
         Period he shall not in any manner, directly or indirectly, induce or
         attempt to induce any employee of Williams Group to terminate or
         abandon him or his employment for any purpose whatsoever.




                                       4
<PAGE>

                  (d) Nothing in this Paragraph 4 shall prohibit the Consultant
         from being (i) a stockholder in a mutual fund or a diversified
         investment company or (ii) a passive owner of not more than two percent
         (2%) of the outstanding stock of any class of a corporation, any
         securities of which are publicly traded, so long as the Consultant has
         no active participation in the business of such corporation.

                  (e) If, at any time of enforcement of this Paragraph 4, a
         court or an arbitrator holds that the restrictions stated herein are
         unreasonable under circumstances then existing, the parties hereto
         agree that the maximum period, scope or geographical area reasonable
         under such circumstances shall be substituted for the stated period,
         scope or area and that the court or arbitrator shall be allowed to
         revise the restrictions contained herein to cover the maximum period,
         scope and area permitted by law. This Agreement shall not authorize a
         court or arbitrator to increase or broaden any of the restrictions in
         this Paragraph.

         5. Hold Harmless. Consultant shall hold harmless Williams, its
subsidiaries and affiliates, and its and their respective shareholders,
officers, directors, employees and attorneys against any damage, injury, death,
claim, loss, charge or expense (including, without limitation, attorneys' fees
and court costs and the costs of investigation) of any party, including
Consultant, arising out of or relating to, or claimed to arise out of or relate
to, Consultant's performance of this Agreement.

         6. Termination of the Consulting Services. Williams may terminate this
Agreement solely for Cause, which shall be limited to either (i) the conviction
of the Consultant of a felony which has a substantial effect on the business or
reputation of the business or reputation of the Williams Group or (ii) the
continual and repeated failure of






                                       5
<PAGE>

the Consultant to perform the services required of him hereunder, after written
notice of the alleged failures and an opportunity to cure has been given. The
Consultant may only terminate this Agreement due to a material breach hereof by
Williams.

         7. Termination of Benefits. Nothing in this Agreement shall be
construed to limit, reduce, offset or otherwise impair Consultant's rights to
any benefits or compensation vested or accrued under the terms of the employee
benefit plans, programs or arrangements maintained by Williams, other than those
benefits which were released or waived by Consultant pursuant to the Settlement
and Retention Agreement dated August 7, 2002.

         8. Enforcement. The parties hereto agree that the Williams Group would
be damaged irreparably in the event that any provision of Paragraph 3 or 4 of
this Agreement were not performed in accordance with its terms or were otherwise
breached and that money damages would be an inadequate remedy for any such
nonperformance or breach. Accordingly, Williams and its successors and permitted
assigns shall be entitled, in addition to other rights and remedies existing in
their favor, to an injunction or injunctions to prevent any breach or threatened
breach of any of such provisions and to enforce such provisions specifically
(without posting a bond or other security). The Consultant agrees that he will
submit himself to the personal jurisdiction of the courts of the State of
Oklahoma in any action by Williams to enforce an arbitration award against him
or to obtain interim injunctive or other relief pending an arbitration decision.

         9. Disputes. Any controversy or claim arising out of or relating to
this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the






                                       6
<PAGE>

rules of the American Arbitration Association then in effect in the State of
Oklahoma, and judgment upon such award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. The arbitration shall be held
in Tulsa, Oklahoma, each party to bear its own costs. The arbitrator shall have
the authority to award any remedy or relief that a court of competent
jurisdiction could order or grant, including, without limitation, the issuance
of an injunction. However, either party may, without inconsistency with this
arbitration provision, apply to any court having jurisdiction over such dispute
or controversy and seek interim provisional, injunctive or other equitable
relief until the arbitration award is rendered or the controversy is otherwise
resolved. Williams and the Consultant acknowledge that this Agreement evidences
a transaction involving interstate commerce.

         10. Williams Policies. The Consultant will comply with and abide by
Williams' policies on alcohol and drug abuse and no smoking, each of which is
attached hereto as an exhibit hereto and incorporated herein by reference.

         11. Miscellaneous. This Agreement may only be amended by a written
instrument signed by Williams and Consultant. Except as otherwise expressly
provided hereunder, this Agreement shall constitute the entire agreement between
Williams and Consultant with respect to the subject matter hereof. This
Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.

         12. Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed given when (i) delivered
personally or by overnight courier to the following address of the other party
hereto (or such other






                                       7
<PAGE>

address for such party as shall be specified by notice given pursuant to this
Paragraph) or (ii) sent by facsimile to the following facsimile number of the
other party hereto (or such other facsimile number for such party as shall be
specified by notice given pursuant to this address of such party pursuant to
this Paragraph:

                  If to Williams, to:
                  The Williams Companies, Inc.
                  Attn:  Senior Vice President, Human Resources
                  One William Center
                  P. O. Box 2400
                  Tulsa, Oklahoma 74102

                  If to the Consultant, to:
                  William G. von Glahn
                  2767 S. Utica
                  Tulsa, Oklahoma 74114

         13. Successor and Assigns. This Agreement shall be enforceable by the
Consultant and his heirs, executors, administrators and legal representatives,
and by Williams and its successors and assigns.

         14. Survival. Paragraphs 3, 4 and 9 of this Agreement shall survive and
continue in full force and effect in accordance with their respective terms,
notwithstanding any termination of the Consulting Period.

         15. Governing Law. This Agreement shall be governed by the laws of the
State of Oklahoma, without reference to the principles of conflicts of law.



                                       8
<PAGE>


         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day first written above.

                                         THE WILLIAMS COMPANIES, INC.

                                         By:  /s/ Michael P. Johnson
                                            ---------------------------------
                                         Title: Senior Vice President
                                               ------------------------------

Witness: /s/ Marcia M. MacLeod
- ------------------------------
                                          /s/ William G. von Glahn
                                         ------------------------------------
                                         William G. von Glahn




                                       9
<PAGE>



                                   EXHIBIT "B"

                                     RELEASE

         THIS RELEASE (this "Agreement") is entered into this ____ day of
January, 2003, by and between The Williams Companies, Inc. ("Williams") and
William G. von Glahn ("Mr. von Glahn") and is effective seven days after the
execution hereof by Mr. von Glahn (hereinafter the "Effective Date").

         WHEREAS, the parties entered into a Settlement and Retention Agreement
dated August 7, 2002 ("Settlement and Retention Agreement"); and

         WHEREAS, such Settlement and Retention Agreement provided for the
execution of this Agreement on or after January 3, 2003.

         NOW, THEREFORE, in consideration of the mutual promises made herein,
and for other good and valuable consideration, the parties hereby agree as
follows:

                      COVENANTS AND OBLIGATIONS OF WILLIAMS

         1. Williams Payments and Obligations. Williams shall pay to Mr. von
Glahn the payments required under Paragraph 2 of the Settlement and Retention
Agreement and apply such payments in accordance with such agreement. The Company
will also perform its obligations under the Settlement and Retention Agreement.

                   COVENANTS AND OBLIGATIONS OF MR. VON GLAHN

         1. Release. Except for the obligations specifically set forth in this
Agreement and the Settlement and Retention Agreement, including Paragraphs 7 and
9 thereof, Mr. von Glahn for himself, his attorneys, and his heirs, executors,
administrators, successors and assigns, does hereby fully, finally and forever
release and discharge Williams and its subsidiaries, affiliates, predecessors,
successors and assigns and their respective officers, directors, employees,
representatives, agents and fiduciaries, de facto or de jure ("Released
Parties") of and from any and all charges, claims, actions (in law or in
equity), suits, demands, losses, expenses, damages, debts, liabilities,
obligations, disputes, proceedings, or any other manner of liability (known or
unknown) including without limitation those arising from, in whole or in part,
the employment relationship between Williams and Mr. von Glahn or the
termination thereof which exist, or have heretofore accrued, fixed or
contingent, known or unknown, including without limitation any claims arising
under 42 U.S.C. Section 1981, 42 U.S.C. Section 1983, 42 U.S.C. Section 1985, 42
U.S.C. Section 1986, the Equal Pay Act, 29 U.S.C. Section 206(d), the National
Labor Relations Act, as amended, 29 U.S.C. Section 160, et seq., the Americans
With Disabilities Act, 42 U.S.C. Section 12101, et seq.,






<PAGE>

the Employee Retirement Income Security Act of 1974, as amended, ("ERISA"), 29
U.S.C. Section 1001, et seq., the Age Discrimination in Employment Act, 29
U.S.C.Section 621, et seq., Title VII of the Civil Rights Act of 1964 as amended
by the Civil Rights Act of 1991, 42 U.S.C. Section 2000e, et seq., the Family
and Medical Leave Act, 29 U.S.C.Section 2601 et seq., and claims of wrongful
discharge, defamation, infliction of emotional distress, termination in
violation of public policy, retaliatory discharge, including those based on
workers' compensation retaliation under state statutes, discrimination on the
basis of handicap, or claims related to employee benefits or arising under any
federal or state statute or common law.

         2. Mr. von Glahn's Covenants. By signing this Agreement, Mr. von Glahn
covenants, agrees, represents and warrants that:

                  (a) He has not filed and will not in the future file any
         lawsuits, complaints, petitions or accusatory pleadings against any of
         the Released Parties in any court based upon, arising out of or in any
         way related to any event or events occurring prior to the signing of
         this Agreement, including, without limitation, his employment with any
         of the Released Parties or the termination thereof;

                  (b) This Agreement specifically includes, without limitation,
         all claims asserted by or on behalf of Mr. von Glahn against any of the
         Released Parties, together with all claims which might have been
         asserted by or on behalf of Mr. von Glahn in any suit, claim (known or
         unknown), charge or grievance against any of the Released Parties for
         or on account of any matter or things whatsoever up to and including
         the effective date of this Agreement; and

                  (c) Mr. von Glahn waives all rights to recovery for any
         damages or compensation awarded as a result of any suit or proceeding
         by any third party or governmental agency on Mr. von Glahn's behalf
         related to claims released in Section 1 herein.

         3. No Admission of Liability. Notwithstanding the provisions of this
Agreement and the payments to be made by Williams to Mr. von Glahn hereunder,
Williams does not admit any manner of liability to Mr. von Glahn but has entered
into this Agreement as a means of settling any and all disputes between Williams
and Mr. von Glahn.

         4. Independent Advice. Mr. von Glahn has been encouraged to seek
independent legal and tax advice concerning the provisions of this Agreement in
general and, after such advice and consultation, Mr. von Glahn has freely and
knowingly entered into this Agreement. Mr. von Glahn acknowledges, understands
and affirms that:

                  (a) This Agreement is a binding legal document;




<PAGE>

                  (b) Mr. von Glahn voluntarily signs and enters into this
         Agreement without reservation after having given the matter full and
         careful consideration;

                  (c) Mr. von Glahn acknowledges that he has been provided with
         the opportunity of at least twenty-one (21) days in which to consider
         this Agreement and that he has been advised to consult with an attorney
         before signing this Agreement. If Mr. von Glahn elects to take less
         than twenty-one (21) days to consider this Agreement, he does so
         knowingly, willingly and on advice of counsel, with full understanding
         that he is waiving a statutory right to take the full twenty-one (21)
         days. Mr. von Glahn warrants that after careful review and study of
         this Agreement, he understands that the terms set forth herein are
         those actually agreed upon. Further, Mr. von Glahn acknowledges and
         understands that he has seven (7) days from his execution of this
         Agreement to revoke or rescind it, in writing, and that after the
         expiration of such seven (7) day period this Agreement is effective and
         enforceable and may not be revoked.

         5. No Release of Vested Benefit. Mr. von Glahn does not, by this
Agreement, release or discharge any right to any vested, deferred benefit in any
qualified employee benefit plan which provides for retirement, pension, savings,
thrift and/or employee stock ownership, as such terms are used under ERISA,
maintained by any of the Released Parties which employed Mr. von Glahn.
Provided, Mr. von Glahn agrees that he is not entitled to any other severance
payment except as set forth in the Settlement and Retention Agreement.

                               GENERAL PROVISIONS

         1. Binding Effect. This Agreement is binding upon and shall inure to
the benefit of the parties hereto and their respective successors, assigns,
personal representatives, officers, directors, agents, attorneys, parents,
subsidiaries and affiliates.

         2. Waiver or Amendment. No waiver, alteration, or modification of any
of the provisions of this Agreement shall be binding unless in writing and
signed both by Mr. von Glahn and a duly authorized representative of Williams.

         3. Entirety. This Agreement and the Settlement and Retention Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof. This Agreement and the Settlement and Retention Agreement
supersede any and all other negotiations, understandings or agreements, whether
oral or in writing between the parties with respect to the subject matter hereof
including, without limitation, any and all compensation or benefits payable to
Mr. von Glahn.





<PAGE>

         4. Miscellaneous. This Agreement and the rights and obligations
hereunder shall be construed in all respects in accordance with the internal
laws of the State of Oklahoma without reference to the conflict of laws
provisions thereof. Should any provision of this Agreement be found or declared
or determined by a court of competent jurisdiction to be invalid, the validity
of the remaining parts, terms or provisions shall not be affected thereby and
any such invalid part, term or provision shall be deemed not to be a part of
this Agreement. Any litigation concerning this Agreement or the facts or matters
described herein shall be brought only in a court of competent jurisdiction in
Tulsa County, Tulsa, Oklahoma.

         5. Authorization. Each person signing this Agreement as a party or on
behalf of a party represents that he is duly authorized to sign this Agreement
and such party's behalf and is executing this Agreement voluntarily, knowingly
and without any duress or coercion.

         MR. VON GLAHN FURTHER STATES THAT HE HAS CAREFULLY READ THIS DOCUMENT
AND KNOWS AND UNDERSTANDS THE CONTENTS HEREOF AND THAT HE SIGNS THIS AGREEMENT
AS HIS OWN FREE ACT AND DEED. THE PROVISIONS OF THIS AGREEMENT SHALL BE
EFFECTIVE THE DATE ON WHICH MR. VON GLAHN SIGNS THIS AGREEMENT.

WITNESS:                                    THE WILLIAMS COMPANIES, INC.

                                         By:
- ------------------------                    -----------------------------------

                                         Title:
                                               --------------------------------

                                         Date signed:
                                                     --------------------------


                                         --------------------------------------
                                         WILLIAM G. VON GLAHN

                                         Date signed:
                                                     --------------------------




<PAGE>



                                 ACKNOWLEDGMENT

         I HEREBY ACKNOWLEDGE that _________________________, in accordance with
the Age Discrimination in Employment Act, as amended by the Older Workers
Benefit Protection Act of 1990, informed me in writing that:

                  (1) I should consult with an attorney before signing the
         Release Agreement ("Release");

                  (2) I may review the Release for a period of up to twenty-one
         (21) days following the Separation Date. If I choose to take less than
         twenty-one (21) days to review the Release, I do so knowingly,
         willingly and on advice of counsel;

                  (3) For a period of seven days following the signing of the
         Release, I may revoke the Release, and that the Release will not become
         effective or enforceable until the seven day revocation period has
         elapsed which is the "Effective Date" set forth in the Release; and

                  (4) The sums described in Paragraph 2 of the Settlement and
         Retention Agreement will not be paid to me until the seven day
         revocation period has elapsed.

         I HEREBY FURTHER ACKNOWLEDGE receipt of this Release Agreement on the
7th day of August, 2002.

WITNESS:

- -----------------------------

                                             -------------------------------
                                             William G. von Glahn








</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>14
<FILENAME>d00961exv10w12.txt
<DESCRIPTION>FORM OF CHANGE IN CONTROL SEVERANCE AGREEMENT
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.12


                          THE WILLIAMS COMPANIES, INC.

                      CHANGE IN CONTROL SEVERANCE AGREEMENT

                              (TIER ONE EXECUTIVES)


<PAGE>

                                TABLE OF CONTENTS

<Table>
<S>                                                                       <C>
ARTICLE I. Definitions.....................................................1

   1.1   "Accrued Annual Bonus"............................................1
   1.2   "Accrued Base Salary".............................................1
   1.3   "Accrued Obligations".............................................1
   1.4   "Affiliate".......................................................1
   1.5   "Agreement Date"..................................................2
   1.6   "Agreement Term"..................................................2
   1.7   "Annual Bonus"....................................................2
   1.8   "Article" ........................................................2
   1.9   "Base Salary".....................................................2
   1.10     "Beneficial Owner".............................................2
   1.11     "Beneficiary"..................................................2
   1.12     "Board"........................................................2
   1.13     "Cause"........................................................2
   1.14     "Cause Determination"..........................................3
   1.15     "Change Date"..................................................3
   1.16     "Change in Control"............................................3
   1.17     "Code".........................................................4
   1.18     "Competitive Business".........................................4
   1.19     "Confidential Information".....................................5
   1.20     "Consummation Date"............................................5
   1.21     "Disability"...................................................6
   1.22     "Disability Effective Date"....................................6
   1.23     "Employer".....................................................6
   1.24     "ERISA"........................................................6
   1.25     "Exchange Act".................................................6
   1.26     "Good Reason"..................................................6
   1.27     "Gross-Up Payment".............................................8
   1.28     "including"....................................................8
   1.29     "IRS"..........................................................8
   1.30     "Legal and Other Expenses".....................................8
   1.31     "Lump Sum Value"...............................................8
   1.32     "Merger of Equals".............................................8
   1.33     "Merger of Equals Cessation Date"..............................9
   1.34     "Merger of Equals Cessation Notice"............................9
   1.35     "Non-Qualified Plan"...........................................9
   1.36     "Notice of Consideration"......................................9
   1.37     "Notice of Termination"........................................9
   1.38     "Person"......................................................10
   1.39     "Post-Change Period"..........................................10
   1.40     "Post-Merger of Equals Period"................................10
   1.41     "Potential Parachute Payment".................................10
   1.42     "Pro-rata Annual Bonus".......................................10
   1.43     "Reorganization Transaction"..................................10
</Table>


<PAGE>

<Table>
<S>                                                                       <C>
   1.44     "Restricted Shares"...........................................10
   1.45     "SEC".........................................................10
   1.46     "Section".....................................................10
   1.47     "SERP"........................................................10
   1.48     "Stock Options"...............................................10
   1.49     "Subsidiary" .................................................10
   1.50     "Surviving Corporation".......................................10
   1.51     "Target Annual Bonus".........................................10
   1.52     "Taxes".......................................................11
   1.53     "Termination Date"............................................11
   1.54     "Termination of Employment"...................................11
   1.55     "Voting Securities"...........................................12
   1.56     "Williams"....................................................12
   1.57     "Williams Incumbent Directors"................................12
   1.58     "Williams Parties"............................................12
   1.59     "Work Product"................................................12

ARTICLE II. Williams' Obligations Upon Termination of Employment..........12
   2.1   If by Executive for Good Reason or by an Employer
          Other Than for Cause or Disability..............................12
   2.2   If by the Employer for Cause.....................................15
   2.3   If by a Participant Other Than for Good Reason...................17
   2.4   If by Death or Disability........................................17
   2.5   Waiver and Release...............................................17
   2.6   Breach of Covenants..............................................17

ARTICLE III. Certain Additional Payments by Williams......................18
   3.1   Gross-Up Payment.................................................18
   3.2   Gross-Up Payment.................................................18
   3.3   Limitation on Gross-Up Payments..................................18
   3.4   Additional Gross-up Amounts......................................18
   3.5   Amount Increased or Contested....................................19
   3.6   Refunds..........................................................21

ARTICLE IV. Expenses and Interest.........................................21
   4.1   Legal and Other Expenses.........................................21
   4.2   Interest.........................................................21

ARTICLE V. No Set-off or Mitigation.......................................22
   5.1   No Set-off by Williams...........................................22
   5.2   No Mitigation....................................................22

ARTICLE VI. Restrictive Covenants.........................................22
   6.1   Confidential Information.........................................22
   6.2   Non-Competition..................................................23
   6.3   Non-Solicitation.................................................23
</Table>



                                     - ii -

<PAGE>

<Table>
<S>                                                                       <C>
   6.4   Intellectual Property............................................24
   6.5   Non-Disparagement................................................25
   6.6   Reasonableness of Restrictive Covenants..........................25
   6.7   Right to Injunction: Survival of Undertakings....................25

ARTICLE VII. Non-Exclusivity of Rights....................................26
   7.1   Waiver of Certain Other Rights...................................26
   7.2   Other Rights.....................................................26
   7.3   No Right to Continued Employment.................................27

ARTICLE VIII. Claims Procedures...........................................27
   8.1   Filing a Claim...................................................27
   8.2   Review of Claim Denial...........................................27

ARTICLE IX. Miscellaneous.................................................27
   9.1   No Assignability.................................................27
   9.2   Successors.......................................................28
   9.3   Payments to Beneficiary..........................................28
   9.4   Non-Alienation of Benefits.......................................28
   9.5   Severability.....................................................28
   9.6   Amendments.......................................................28
   9.7   Notices..........................................................28
   9.8   Joint and Several Liability......................................29
   9.9   Counterparts.....................................................29
   9.10     Governing Law.................................................29
   9.11     Captions......................................................29
   9.12     Number and Gender.............................................29
   9.13     Tax Withholding...............................................29
   9.14     No Rights Prior to Change Date................................29
   9.15     Entire Agreement..............................................30
</Table>



                                    - iii -



<PAGE>

                          THE WILLIAMS COMPANIES, INC.
                      CHANGE-IN-CONTROL SEVERANCE AGREEMENT


         THIS AGREEMENT dated as of (Effective_Date), (the "Agreement Date") is
made by and between The Williams Companies, Inc., a corporation incorporated
under the laws of the State of Delaware (together with successors thereto,
"Williams"), and (Name) ("Executive").

                                    RECITALS

         The Board of Directors of Williams (the "Board") has determined that it
is in the best interests of Williams and its shareholders to encourage and
motivate the Executive to devote his full attention to the performance of his
assigned duties without the distraction of concerns regarding his involuntary or
constructive termination of employment due to a Change in Control of Williams.
The Executive is employed by Williams or a Subsidiary and may from time to time
be employed by one or more Subsidiaries. Williams and its Subsidiaries believe
that it is in the best interest of the Executive, their customers, the
communities they serve, and the stockholders of Williams to provide financial
assistance through severance payments and other benefits to Executive if
Executive is involuntarily or constructively terminated upon or within a certain
period after a Change in Control. This Agreement is intended to accomplish these
objectives.

         This Agreement supersedes and replaces all other written or oral
exchanges, agreements, understandings, or arrangements between or among
Executive and Williams and/or the Subsidiary entered into prior to the date
hereof and relating to severance or benefits in relation to a Change in Control,
including, but not limited to the Williams Companies, Inc. Change in Control
Severance Protection Plan as effective January 1, 1990 and amended and restated
June 1, 1999.

                                   ARTICLE I.

                                   DEFINITIONS

         As used in this Agreement, the terms specified below shall have the
following meanings:

         1.1 "Accrued Annual Bonus" means the amount of any Annual Bonus earned
but not yet paid as of the Termination Date, other than amounts Executive has
elected to defer.

         1.2 "Accrued Base Salary" means the amount of Executive's Base Salary
that is accrued but not yet paid as of the Termination Date, other than amounts
Executive has elected to defer.

         1.3 "Accrued Obligations" means, as of any date, the sum of Executive's
Accrued Base Salary, Accrued Annual Bonus, any accrued but unpaid paid time off,
and any other amounts and benefits which are then due to be paid or provided to
Executive by Williams (other than pursuant to Section 2.1(a)(iii)(A) and (B)),
but have not yet been paid or provided (as applicable).

         1.4 "Affiliate" means any Person (including a Subsidiary) that directly
or indirectly, through one or more intermediaries, controls, or is controlled by
or is under common control with Williams. For purposes of this definition the
term "control" with respect to any Person


<PAGE>

means the power to direct or cause the direction of management or policies of
such Person, directly or indirectly, whether through the ownership of Voting
Securities, by contract or otherwise.

         1.5 "Agreement Date" -- see the introductory paragraph of this
Agreement.

         1.6 "Agreement Term" means the period commencing on the Agreement Date
and ending on the second anniversary of the Agreement Date or, if later, such
later date to which the Agreement Term is extended under the following sentence,
unless earlier terminated as provided herein. Commencing on the first
anniversary of the Agreement Date, the Agreement Term shall automatically be
extended each day by one day to create a new two-year term until, at any time
after the first anniversary of the Agreement Date, Williams delivers written
notice (an "Expiration Notice") to Executive that the Agreement shall expire on
a date specified in the Expiration Notice (the "Expiration Date") that is not
less than 12 months after the date the Expiration Notice is delivered to
Executive; provided, however, that if a Change Date, or Merger of Equals occurs
before the Expiration Date specified in the Expiration Notice, then such
Expiration Notice shall be void and of no further effect. Notwithstanding
anything herein to the contrary, the Agreement Term shall end at the end of the
Severance Period (as defined in Section 2.1(c))if applicable, or if there is no
Severance Period, the earliest of the following: (a) the second anniversary of
the Change Date, or (b) the Termination Date.

         1.7 "Annual Bonus" means the opportunity to receive payment of a cash
annual incentive.

         1.8 "Article" means an article of this Agreement.

         1.9 "Base Salary" means annual base salary in effect on the Termination
Date, disregarding any reduction that would qualify as Good Reason.

         1.10 "Beneficial Owner" means such term as defined in Rule 13d-3 of the
SEC under the Exchange Act.

         1.11 "Beneficiary" -- see Section 9.3.

         1.12 "Board" means the Board of Directors of Williams or, from and
after the Change Date that gives rise to a Surviving Corporation, the Board of
Directors of such Surviving Corporation.

         1.13 "Cause" means any one or more of the following:

         (a) Executive's conviction of or plea of nolo contendere to a felony or
other crime involving fraud, dishonesty or moral turpitude;

         (b) Executive's willful or reckless material misconduct in the
performance of his duties which results in an adverse effect on Williams, the
Subsidiary or an Affiliate;

         (c) Executive's willful or reckless violation or disregard of the code
of business conduct;



                                     - 2 -
<PAGE>

         (d) Executive's material willful or reckless violation or disregard of
a Williams or Subsidiary policy; or

         (e) Executive's habitual or gross neglect of duties;

provided, however, that for purposes of clauses (b) and (e), Cause shall not
include any one or more of the following:

                  (i) bad judgment or negligence, other than Executive's
         habitual neglect of duties or gross negligence;

                  (ii) any act or omission believed by Executive in good faith
         to have been in or not opposed to the interest of Williams, the
         Subsidiary or an Affiliate (without intent of Executive to gain,
         directly or indirectly, a profit to which Executive was not legally
         entitled);

                  (iii) any act or omission with respect to which a
         determination could properly have been made by the Board that Executive
         had satisfied the applicable standard of conduct for indemnification or
         reimbursement under Williams' by-laws, any applicable indemnification
         agreement, or applicable law, in each case as in effect at the time of
         such act or omission; or

                  (iv) during a Post-Change Period other than a Post-Merger of
         Equals Period, failure to meet performance goals, objectives or
         measures following good faith efforts to meet such goals, objectives or
         measures; and

further provided that, for purposes of clauses (b) through (e), if an act, or a
failure to act, which was done, or omitted to be done, by Executive in good
faith and with a reasonable belief that Executive's act, or failure to act, was
in the best interests of Williams, the Subsidiary or an Affiliate or was
required by applicable law or administrative regulation, such breach shall not
constitute Cause if, within 10 days after Executive is given written notice of
such breach that specifically refers to this Section, Executive cures such
breach to the fullest extent that it is curable.

         1.14 "Cause Determination" --see Section 2.2(b)(iv)

         1.15 "Change Date" means the date on which a Change in Control first
occurs during the Agreement Term.

         1.16 "Change in Control" means, except as otherwise provided below, the
occurrence of any one or more of the following during the Agreement Term:

         (a) any person (as such term is used in Rule 13d-5 of the SEC under the
Exchange Act) or group (as such term is defined in Sections 3(a)(9) and 13(d)(3)
of the Exchange Act), other than an Affiliate of Williams or any employee
benefit plan (or any related trust) sponsored or maintained by Williams or any
of its Affiliates (a "Related Party"), becomes the Beneficial Owner of 20% or
more of the common stock of Williams or of Voting Securities representing 20% or
more of the combined voting power of all Voting Securities of Williams,



                                     - 3 -
<PAGE>

except that no Change in Control shall be deemed to have occurred solely by
reason of such beneficial ownership by a Person (a "Similarly Owned Company")
with respect to which both more than 75% of the common stock of such Person and
Voting Securities representing more than 75% of the combined voting power of the
Voting Securities of such Person are then owned, directly or indirectly, by the
persons who were the direct or indirect owners of the common stock and Voting
Securities of Williams immediately before such acquisition, in substantially the
same proportions as their ownership, immediately before such acquisition, of the
common stock and Voting Securities of Williams, as the case may be; or

         (b) Williams Incumbent Directors (determined using the Agreement Date
as the baseline date) cease for any reason to constitute at least a majority of
the directors of Williams then serving; or

         (c) consummation of a merger, reorganization, recapitalization,
consolidation, or similar transaction (any of the foregoing, a "Reorganization
Transaction"), other than a Reorganization Transaction that results in the
Persons who were the direct or indirect owners of the outstanding common stock
and Voting Securities of Williams immediately before such Reorganization
Transaction becoming, immediately after the consummation of such Reorganization
Transaction, the direct or indirect owners, of both at least 65% of the
then-outstanding common stock of the Surviving Corporation and Voting Securities
representing at least 65% of the combined voting power of the then-outstanding
Voting Securities of the Surviving Corporation, in substantially the same
respective proportions as such Persons' ownership of the common stock and Voting
Securities of Williams immediately before such Reorganization Transaction; or

         (d) approval by the stockholders of Williams of a plan or agreement for
the sale or other disposition of all or substantially all of the consolidated
assets of Williams or a plan of complete liquidation of Williams, other than any
such transaction that would result in (i) a Related Party owning or acquiring
more than 50% of the assets owned by Williams immediately prior to the
transaction or (ii) the Persons who were the direct or indirect owners of the
outstanding common stock and Voting Securities of Williams immediately before
such transaction becoming, immediately after the consummation of such
transaction, the direct or indirect owners, of more than 50% of the assets owned
by Williams immediately prior to the transaction.

Notwithstanding the occurrence of any of the foregoing events, a Change in
Control shall not occur with respect to Executive if, in advance of such event,
Executive agrees in writing that such event shall not constitute a Change in
Control.

         1.17 "Code" means the Internal Revenue Code of 1986, as amended.

         1.18 "Competitive Business" means, as of any date, any energy business
and any individual or entity (and any branch, office, or operation thereof)
which engages in, or proposes to engage in (with Executive's assistance) any of
the following in which the Executive has been engaged in the twelve (12) months
preceding the Termination Date (i) the harnessing, production, transmission,
distribution, marketing or sale of oil, gas or other energy product or the
transmission or distribution thereof through pipelines, wire or cable or similar
medium (ii) any



                                     - 4 -
<PAGE>

other business actively engaged in by Williams which represents for any calendar
year or is projected by Williams (as reflected in a business plan adopted by
Williams before Executive's Termination Date) to yield during any year during
the first three-fiscal year period commencing on or after Executive's
Termination Date, more than 5% of the gross revenue of Williams, and, in either
case, which is located (x) anywhere in the United States, or (y) anywhere
outside of the United States where Williams is then engaged in, or proposes as
of the Termination Date to engage in to the knowledge of the Executive, any of
such activities.

         1.19 "Confidential Information" means any information, ideas,
processes, methods, designs, devices, inventions, data, techniques, models and
other information developed or used by Williams or any Affiliate and not
generally known in the relevant trade or industry relating to Williams' or its
Affiliates' products, services, businesses, operations, employees, customers or
suppliers, whether in tangible or intangible form, which gives Williams and its
Affiliates a competitive advantage in the harnessing, production, transmission,
distribution, marketing or sale of oil, gas or other energy or the transmission
or distribution thereof through pipelines, wire or cable or similar medium or in
the energy services or energy trading industry and other businesses in which
Williams or an Affiliate is engaged, or of third parties which Williams or
Affiliate is obligated to keep confidential, or which was learned, discovered,
developed, conceived, originated or prepared during or as a result of
Executive's performance of any services on behalf of Williams or any Affiliate,
and which falls within any of the following general categories:

         (a) information relating to trade secrets of Williams or any Affiliate
or any customer or supplier of Williams or any Affiliate;

         (b) information relating to existing or contemplated products,
services, technology, designs, processes, formulae, algorithms, research or
product developments of Williams or any Affiliate or any customer or supplier of
Williams or any Affiliate;

         (c) information relating to business plans or strategies, sales or
marketing methods, methods of doing business, customer lists, customer usages
and/or requirements, supplier information of Williams or any Affiliate or any
customer or supplier of Williams or any Affiliate; information subject to
protection under the Uniform Trade Secrets Act, as adopted by the State of
Oklahoma, or to any comparable protection afforded by applicable law; or

         (d) any other confidential information which either Williams or any
Affiliate or any customer or supplier of Williams or any Affiliate may
reasonably have the right to protect by patent, copyright or by keeping it
secret and confidential.

         (e) Notwithstanding the foregoing, Confidential Information shall not
include: (i) information that is or becomes generally known through no fault of
Executive; (ii) information received from a third party outside of Williams that
was disclosed without a breach of any confidentiality obligation; or (iii)
information approved for release by written authorization of Williams.

         1.20 "Consummation Date" means the date on which a Reorganization
transaction is consummated.



                                     - 5 -
<PAGE>

         1.21 "Disability" means any medically determinable physical or mental
impairment of Executive that:

         (a) has lasted for a continuous period of not less than (i) six months
or (ii) such longer period, if any, that is available to Executive under his
Employer's policies relating to the continuation of employee status after the
onset of disability, as such policies are applicable to other peer executives of
the Employer immediately prior to the Change Date,

         (b) can be expected to be permanent or of indefinite duration, and

         (c) renders Executive substantially unable to perform his duties.

The Employer shall provide or cause to be provided Executive or his legal
representative, as applicable, (i) written notice in accordance with Section 9.7
of the intention of Executive's employer to terminate his employment for
Disability and (ii) a certification of Executive's Disability by a physician
selected by the Employer or its insurers, subject to the consent of Executive or
his legal representative, which consent shall not be unreasonably withheld or
delayed. Executive's employment shall terminate effective on the 30th day (the
"Disability Effective Date") after his receipt of such notice unless, before the
Disability Effective Date, he shall have resumed the full-time performance of
his duties.

         1.22 "Disability Effective Date" -- see the definition of "Disability".

         1.23 "Employer" means Williams or, if Executive is not employed
directly by Williams, the Subsidiary that from time to time employs Executive on
or after the Agreement Date, and the successor of either (provided, in the case
of a Subsidiary, that such successor is also a Subsidiary).

         1.24 "ERISA" means the Employee Retirement Income security Act of 1974,
as amended.

         1.25 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         1.26 "Good Reason" means a Termination of Employment by Executive in
accordance with the substantive and procedural provisions of this Section.

         (a) Termination of Employment by Executive for "Good Reason" means a
Termination of Employment initiated by Executive on account of any one or more
of the following actions or omissions that, unless otherwise specified, occurs
during a Post-Change Period:

                  (i) a material adverse reduction in the nature or scope of
         Executive's office, position, duties, functions, responsibilities or
         authority (including reporting responsibilities and authority) during a
         Post-Change Period other than a Merger of Equals from the most
         significant of those held, exercised and assigned at any time during
         the 90-day period immediately before the later of (x) the Change Date
         or (y) the Merger of Equals Cessation Date;



                                     - 6 -
<PAGE>

                  (ii) any reduction in or failure to pay Executive's annual
         Base Salary at an annual rate not less than 12 times the highest
         monthly base salary paid or payable to Executive by his Employer in
         respect of the 12-month period immediately before the Change Date;

                  (iii) any reduction in the Target Annual Bonus which Executive
         may earn determined as of the Change Date or failure to pay Executive's
         Annual Bonus on terms substantially equivalent to those provided to
         peer executives of the Employer;

                  (iv) a material reduction of Executive's aggregate
         compensation and/or aggregate benefits from the amounts and/or levels
         in effect on the Change Date, unless such reduction is part of a Policy
         applicable to peer executives of the Employer and of any successor
         entity;

                  (v) required relocation during a Post-Change Period other than
         a Post-Merger of Equals Period of more than 50 miles of (A) Executive's
         workplace, or (B) the principal offices of the Employer or its
         successor (if such offices are Executive's workplace), in each case
         without the consent of Executive; provided, however, in both cases of
         (A) and (B) of this subsection (v), such new location is farther from
         Executive's residence than the prior location;

                  (vi) the failure at any time of a successor to Executive's
         Employer explicitly to assume and agree to be bound by this Agreement;
         provided, however, that the failure of a business unit or the Employer,
         which has been sold, spun-off or otherwise disaggregated by the
         Employer, to assume this Agreement during a Post-Merger of Equals
         Period shall not qualify as Good Reason for purposes of this clause
         (vi); or

                  (vii) the giving of a Notice of Consideration pursuant to
         Section 2.2(b)(ii) or Section 2.2(d) and the subsequent failure to
         terminate Executive for Cause and within a period of 90 days thereafter
         in compliance with all of the substantive and procedural requirements
         of Section 2.2;

         (b) Notwithstanding anything in this Agreement to the contrary, no act
or omission shall constitute grounds for "Good Reason":

                  (i) Unless Executive gives a Notice of Termination to Williams
         and the Employer 30 days prior to his intent to terminate his
         employment for Good Reason which describes the alleged act or omission
         giving rise to Good Reason; and

                  (ii) Unless such Notice of Termination is given within 90 days
         of Executive's first actual knowledge of such act or omission, or if
         such act or omission would not constitute Good Reason during a
         Post-Merger of Equals Period, unless Executive's Termination Date is
         within 90 days after the first date on which he first obtained actual
         knowledge of the fact that no Merger of Equals has occurred or that a
         Merger of Equals Cessation has occurred; and


                                     - 7 -
<PAGE>

                  (iii) Unless Williams or the Employer fails to cure such act
         or omission within the 30 day period after receiving the Notice of
         Termination; and

                  (iv) If Executive has consented in writing to such act or
         omission in a document that makes specific reference to this Section.

         1.27 "Gross-Up Payment" -- see Section 3.1.

         1.28 "including" means including without limitation.

         1.29 "IRS" means the Internal Revenue Service of the United States of
America.

         1.30 "Legal and Other Expenses" -- see Section 4.1.

         1.31 "Lump Sum Value" of an annuity payable pursuant to a defined
benefit plan means, as of a specified date, the present value of such annuity,
as determined as of such date, under generally accepted actuarial principles
using (a) the applicable interest rate, mortality tables and other methods and
assumptions that the Pension Benefit Guaranty Corporation ("PBGC") would use in
determining the value of an immediate annuity on the Termination Date or (b) if
such interest rate and mortality assumptions are no longer published by the
PBGC, interest rate and mortality assumptions determined in a manner as similar
as practicable to the manner by which the PBGC's interest rate and mortality
assumptions were determined immediately prior to the PBGC's cessation of
publication of such assumptions; provided, however, that if such defined benefit
plan provides for a lump sum distribution, then "Lump Sum Value" shall mean such
lump sum amount.

         1.32 "Merger of Equals" means, as of any date, a Reorganization
Transaction that, notwithstanding the fact that such transaction may also
qualify as a Change in Control, satisfies all of the conditions set forth in
subsections (a), (b) and (c) below:

         (a) less than 65%, but not less than 50%, of the common stock of the
Surviving Corporation outstanding immediately after the consummation of the
Reorganization Transaction, together with Voting Securities representing less
than 65%, but not less than 50%, of the combined voting power of all Voting
Securities of the Surviving Corporation outstanding immediately after such
consummation shall be owned, directly or indirectly, by the persons who were the
owners directly or indirectly of the common stock and Voting Securities of
Williams immediately before such consummation in substantially the same
proportions as their respective direct or indirect ownership, immediately before
such consummation, of the common stock and Voting Securities of Williams,
respectively; and

         (b) Williams Incumbent Directors (determined using the date immediately
preceding the Consummation Date as the baseline date) shall, throughout the
period beginning on the Consummation Date and ending on the second anniversary
of the Consummation Date, continue to constitute not less than 50% of the
members of the Board; and

         (c) the person who was the Chief Executive Officer of Williams
immediately prior to the Consummation Date shall serve as the Chief Executive
Officer of the Surviving



                                     - 8 -
<PAGE>

Corporation at all times during the period commencing on the Consummation Date
and ending on the first anniversary of the Consummation Date;

provided, however, that a Reorganization Transaction that qualifies as a Merger
of Equals shall cease to qualify as a Merger of Equals (a "Merger of Equals
Cessation") and shall instead qualify as a Change in Control that is not a
Merger of Equals from and after the first date during the Post-Change Period
(such date, the "Merger of Equals Cessation Date") as of which any one or more
of the following shall occur for any reason:

                  (i) any condition of subsection (a) of this Section shall for
         any reason not be satisfied immediately after the consummation of the
         Reorganization Transaction; or

                  (ii) as of the close of business on any date on or after the
         Consummation Date and before the second anniversary of the Change Date,
         any condition of subsections (a) and/or (b) of this Section shall not
         be satisfied; or

                  (iii) on any date prior to the first anniversary of the
         Consummation Date, Williams shall make a filing with the SEC, issue a
         press release, or make a public announcement to the effect that the
         Chief Executive Officer of Williams has resigned or will resign or be
         terminated, other than on account of a scheduled retirement, or
         Williams is seeking or intends to seek a replacement for the then-Chief
         Executive Officer of Williams, whether such resignation, termination or
         replacement is to become effective before or after such first
         anniversary of the Consummation Date.

Williams shall give Executive written notice, in accordance with Section 9.7, of
any Merger of Equals Cessation and the applicable Merger of Equals Cessation
Date as soon as practicable after the Merger of Equals Cessation Date.

         1.33 "Merger of Equals Cessation Date" - see the definition of "Merger
of Equals."

         1.34 "Merger of Equals Cessation Notice" means a written notice given
in accordance with Section 9.7 by the Employer to notify Executive of the facts
and circumstances of a Merger of Equals Cessation, including the Merger of
Equals Cessation Date.

         1.35 "Non-Qualified Plan" means any deferred compensation plan,
program, policy, practice or procedure (including a SERP) that is not qualified
under Section 401(a) of the Code, and which is sponsored by Williams, the
Employer, or the Surviving Corporation.

         1.36 "Notice of Consideration" -- see Section 2.2(b)(ii).

         1.37 "Notice of Termination" means a written notice of a Termination of
Employment given in accordance with Section 9.7 that sets forth (a) the specific
termination provision in this Agreement relied on by the party giving such
notice, (b) in reasonable detail the specific facts and circumstances claimed to
provide a basis for such Termination of Employment, and (c) if the Termination
Date is other than the date of receipt of such Notice of Termination, the
Termination Date.



                                     - 9 -
<PAGE>

         1.38 "Person" means any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government instrumentality, division, agency, body or department.

         1.39 "Post-Change Period" means the period commencing on the Change
Date and ending on the earlier of the Termination Date or the second anniversary
of the Change Date.

         1.40 "Post-Merger of Equals Period" means the period commencing on the
Consummation Date that qualifies as a Merger of Equals and ending on the second
anniversary of such Consummation Date or, if sooner, the Merger of Equals
Cessation Date.

         1.41 "Potential Parachute Payment" - see Section 3.1.

         1.42 "Pro-rata Annual Bonus" means, in respect of an Employer's fiscal
year during which the Termination Date occurs, an amount equal to the product of
Executive's Target Annual Bonus (determined as of the Termination Date)
multiplied by a fraction, the numerator of which equals the number of days from
and including the first day of such fiscal year through and including the
Termination Date, and the denominator of which equals 365.

         1.43 "Reorganization Transaction" -- see clause (c) of the definition
of "Change in Control".

         1.44 "Restricted Shares" means shares of restricted stock, restricted
stock units, deferred stock or similar awards.

         1.45 "SEC" means the United States Securities and Exchange Commission.

         1.46 "Section" means, unless the context otherwise requires, a section
of this Agreement.

         1.47 "SERP" means a supplemental executive retirement plan that is a
Non-Qualified Plan.

         1.48 "Stock Options" means stock options, stock appreciation rights or
similar awards.

         1.49 "Subsidiary" means an Affiliate with respect to which Williams
owns, directly or indirectly, Voting Securities representing more than 50% of
the aggregate voting power of the then-outstanding Voting Securities. Status as
a Subsidiary shall cease if Williams ceases own, directly, or indirectly, more
than 50% of such aggregate voting power.

         1.50 "Surviving Corporation" means the corporation resulting from a
Reorganization Transaction or, if securities representing at least 50% of the
aggregate voting power of all Voting Securities of such resulting corporation
are directly or indirectly owned by another corporation, such other corporation.

         1.51 "Target Annual Bonus" means, as of any date, the amount equal to
the product of Executive's Base Salary determined as of such date multiplied by
the percentage of such Base



                                     - 10 -
<PAGE>

Salary to which Executive would have been entitled immediately prior to such
date under any Annual Bonus arrangement for the fiscal year for which the Annual
Bonus is awarded if the performance goals established pursuant to such Annual
Bonus were achieved at the 100% level as of the end of the fiscal year;
provided, however, that if Executive's Annual Bonus is discretionary and no 100%
target level is formally established either under the Annual Bonus arrangement
or otherwise, Executive's "Target Annual Bonus" shall mean the amount equal to
the 50% of Executive's Base Salary.

         1.52 "Taxes" means federal, state, local and other income, employment
and other taxes.

         1.53 "Termination Date" means the date of the receipt of the Notice of
Termination by Executive (if such notice is given by Executive's Employer) or by
Executive's Employer (if such notice is given by Executive), or any later date,
not more than 30 days after the giving of such notice, specified in such notice;
provided, however, that:

         (a) Executive's employment is terminated by reason of death or
Disability, the Termination Date shall be the date of Executive's death or the
Disability Effective Date, as applicable, regardless of whether a Notice of
Termination has been given; and

         (b) if no Notice of Termination is given, the Termination Date shall be
the last date on which Executive is employed by an Employer;

         (c) if Notice of Termination is given during a Post-Merger of Equals
Period, then the Termination Date shall be deemed to be in the Post-Merger of
Equals Period, whether or not a Merger of Equals Cessation date occurs prior to
the Termination Date; and

         (d) for purposes of Article VI (Restrictive Covenants) if the Executive
does not have a Termination of Employment, the Termination Date shall be the
later of the date the entity that employs Executive ceases to be a Subsidiary,
or, after a Disaggregation (as defined in Section 1.54), the date Executive's
employment with the successor business unit terminates, whether such termination
is initiated by such successor or by Executive.

         1.54 "Termination of Employment" means, in respect of Executive, any
cessation of Executive's employment with Williams and its Subsidiaries, whether
such cessation occurs (a) on the initiative of the Employer or Executive or (b)
by reason of the death of Executive; provided that for the purposes of Article
II, (i) the mere cessation of a Subsidiary's status as a Subsidiary shall not
effect a Termination of Employment, and (ii) if the Executive's cessation of
employment with Williams and its Subsidiaries is effected through a sale,
spin-off or other disaggregation ("Disaggregation") by Williams or an Affiliate
of the business unit (including but not limited to the Subsidiary) which
employed Executive immediately prior to such Disaggregation ("Transfer"),
whether such Disaggregation occurs before or after a Change in Control, and if
Executive is employed in substantially the same position (without regard to
reporting obligations) by the successor to such business unit immediately
following the Transfer, then the Disaggregation shall not be deemed to effect a
"Termination of Employment," nor shall a subsequent termination of employment or
job restructuring with such business unit after the Disaggregation be deemed to
effect a "Termination of Employment."



                                     - 11 -
<PAGE>

         1.55 "Voting Securities" of a corporation means securities of such
corporation that are entitled to vote generally in the election of directors of
such corporation.

         1.56 "Williams" -- see the introductory paragraph of this Agreement.

         1.57 "Williams Incumbent Directors" means, determined as of any date by
reference to any baseline date:

         (a) the members of the Board on the date of such determination who have
been members of the Board since such baseline date, and

         (b) the members of the Board on the date of such determination who were
appointed or elected after such baseline date and whose election, or nomination
for election by stockholders of Williams or the Surviving Corporation, as
applicable, was approved by a vote or written consent of two-thirds (or by a
simple majority for purposes of subsection (b) of the definition of "Merger of
Equals") of the directors comprising the Williams Incumbent Directors on the
date of such vote or written consent, but excluding each such member whose
initial assumption of office was in connection with (i) an actual or threatened
election contest, including a consent solicitation, relating to the election or
removal of one or more members of the Board, (ii) a "tender offer" (as such term
is used in Section 14(d) of the Exchange Act), (iii) a proposed Reorganization
Transaction, or (iv) a request, nomination or suggestion of any Beneficial Owner
of Voting Securities representing 20% or more of the aggregate voting power of
the Voting Securities of Williams or the Surviving Corporation, as applicable.

         1.58 "Williams Parties" means Williams and Executive's Employer.

         1.59 "Work Product" means all ideas, inventions and business plans that
Executive makes, conceives, discovers or develops alone or with others during
the course of Executive's employment with Williams or during the one year period
following Executive's Termination Date, including any inventions, modifications,
discoveries, developments, improvements, computer programs, processes, products
or procedures (whether or not protectable upon application by copyright, patent,
trademark, trade secret or other proprietary rights).

                                  ARTICLE II.

              WILLIAMS' OBLIGATIONS UPON TERMINATION OF EMPLOYMENT

         2.1 If by Executive for Good Reason or by an Employer Other Than for
Cause or Disability. If Executive has a Termination of Employment for Good
Reason or there is an Employer-initiated Termination of Employment of the
Executive for any reason other than Cause or Disability during the Post-Change
Period, then Williams' and the Employer's sole obligations to Executive under
this Article II shall be as follows:

         (a) Severance Payments. Executive shall be paid a lump-sum cash amount
equal to the sum of the following, no more than ten (10) business days after the
Termination Date (provided, however, such lump-sum amount shall be paid no more
than 30 business days after a Termination Date that occurs during a Post-Merger
of Equals Period):



                                     - 12 -
<PAGE>

                  (i) Accrued Obligations. All Accrued Obligations;

                  (ii) Prorated Annual Bonus for Year of Termination.
         Executive's Pro-rata Annual Bonus reduced (but not below zero) by the
         amount of any Annual Bonus paid to Executive with respect to the
         Employer's fiscal year during which the Termination Date occurs;

                  (iii) Deferred Pensions and Pension Enhancements. Subject to
         the proviso following subsection (iii)(D), the sum of:

                           (A) all vested amounts previously deferred by or
                  accrued to the benefit of Executive under any defined benefit
                  or defined contribution Non-Qualified Plans, together with any
                  vested accrued earnings thereon, to the extent that such
                  amounts and earnings have not been previously paid, under the
                  terms of such Non-Qualified Plan,

                           (B) all unvested amounts previously deferred by or
                  accrued to the benefit of Executive under any defined benefit
                  or defined contribution Non-Qualified Plans, together with any
                  unvested accrued earnings on vested or unvested deferred
                  amounts, to the extent that such amounts and earnings have not
                  been previously paid and will not be provided under the terms
                  of such Non-Qualified Plan,

                           (C) an amount equal to the sum of the value of the
                  unvested portion of Executive's accounts or accrued benefits
                  under any defined contribution plan qualified under Section
                  401(a) of the Code maintained by the Williams Parties as of
                  the Termination date and forfeited by Executive due to
                  Termination of Employment

                           (D) an amount equal to the positive difference, if
                  any, between (1) and (2), where:

                                    (1) is the sum of the Lump-Sum Values that
                           would be payable to Executive under any defined
                           benefit Non-Qualified Plan (in which Executive was a
                           participant) calculated as if Executive (I) had
                           attained as of the Termination Date an age that is up
                           to three years greater than Executive's actual age,
                           and (II) accrued a number of years of service (or, in
                           the case of a cash balance-type plan, a number of
                           years' worth of additional allocations based on
                           compensation as of the Termination Date) that is up
                           to three years greater than the number of years of
                           service actually accrued by (or the number of years'
                           worth of additional allocations actually credited to)
                           Executive as of the Termination Date; provided that
                           (x) in the case of both I and II above, such
                           additional years of age and/or service and/or
                           allocations (if any) shall be added only if and to
                           the



                                     - 13 -
<PAGE>

                           extent that Executive's benefit is greater with such
                           additional years than without such additional years,
                           (y) years of service and/or allocations credited
                           under (x) shall be taken into account for purposes of
                           determining the amount of such benefits, entitlement
                           to (but not commencement of) early retirement
                           benefits, and all other purposes of such defined
                           benefit plans, and (z) such years of service and/or
                           allocations credited under (x) shall be in addition
                           to the number of additional years of service or
                           allocations (if any) credited to Executive pursuant
                           to any other agreement between a Williams Party and
                           the Executive;

                           and

                                    (2) is the Lump Sum Value of the aggregate
                           amounts paid or payable to Executive under such
                           defined benefit Non-Qualified Plan;

         provided that if the Termination Date occurs during a Post-Merger of
         Equals Period, payment of the amounts described in subsections (iii)(A)
         and (iii)(D) shall be postponed and such amounts shall be paid to
         Executive the later of the date payable pursuant to the terms of the
         applicable plan, or after (but no more than ten (10) business days
         after) the Merger of Equals Cessation Date, if any; and

                  (iv) Multiple of Salary and Bonus. An amount equal to three
         (3.0) times the sum of (A) Base Salary plus (B) the Target Annual
         Bonus, each determined as of the Termination Date; provided, however,
         that any reduction in Executive's Base Salary or Target Annual Bonus
         that would qualify as Good Reason shall be disregarded for this
         purpose.

         (b) Stock Incentive Awards. If the Termination Date occurs during any
portion of a Post-Change Period that does not also qualify as a Post-Merger of
Equals Period, on Executive's Termination Date, (i) all of Executive's Stock
Options then outstanding shall immediately become fully vested and remain
exercisable until the 18-month anniversary of the Termination Date (or such
later date as may be provided in the applicable award agreement) or, if earlier,
the option expiration date for any such Stock Option, and (ii) all of
Executive's Restricted Shares then outstanding shall immediately become fully
vested and nonforfeitable.

         (c) Continuation of Welfare Benefits.

                  (i) During the lesser of the period during which Executive or
         a qualifying beneficiary (as defined in Section 607 of the Employee
         Retirement Income Security Act of 1974, as amended) has in effect an
         election for post-termination continuation coverage or conversion
         rights to welfare benefits under applicable law, including Section 4980
         of the Code ("COBRA"), or the period ending on the 18-month anniversary
         of the Termination Date ("Severance



                                     - 14 -
<PAGE>

         Period"), Executive (or, if applicable, the qualifying beneficiary)
         shall be entitled to such coverage at an out-of-pocket premium cost
         that does not exceed the out-of-pocket premium cost applicable to
         similarly situated active employees (and their eligible dependents);
         provided, however, that if Executive is eligible to retiree benefits
         provided under any welfare benefit plan, program, policy, practice or
         procedure of the Williams Parties, Executive shall be entitled to
         receive such retiree benefits in lieu of the COBRA coverage provided by
         this Section 2.1(c).

                  (ii) For purposes of determining eligibility for (but not the
         time of commencement of) such retiree benefits, Executive shall be
         considered to have attained an age that is three years greater than
         Executive's actual age.

         (d) Outplacement. Executive shall be reimbursed for reasonable fees and
costs for outplacement services incurred by Executive within six (6) months
after the Termination Date, promptly upon presentation of reasonable
documentation of such fees and costs, subject to a maximum of $25,000.

         (e) Indemnification. Executive shall be indemnified and held harmless
by Williams and the Employer on the same terms as other peer executives and to
the greatest extent permitted under applicable law as the same now exists or may
hereafter be amended and the Employer's and Williams's by-laws as such exist on
the Agreement Date if Executive was, is, or is threatened to be, made a party to
any pending, completed or threatened action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any other
proceeding whether civil, criminal, administrative or investigative, and whether
formal or informal, by reason of the fact that Executive is or was, or had
agreed to become, a director, officer, employee, agent or fiduciary of the
Employer or any other entity which Executive is or was serving at the request of
the Employer or Williams ("Proceeding"), against all expenses (including
reasonable attorneys' fees) and all claims, damages, liabilities and losses
incurred or suffered by Executive or to which Executive may become subject for
any reason. A Proceeding shall not include any proceeding to the extent it
concerns or relates to a matter described in Section 4.1 (concerning
reimbursement of certain costs and expenses). Upon receipt from Executive of (i)
a written request for an advancement of expenses, which Executive reasonably
believes will be subject to indemnification hereunder and (ii) a written
undertaking by Executive to repay any such amounts if it shall ultimately be
determined that Executive is not entitled to indemnification under this
Agreement or otherwise, the Employer shall advance such expenses to Executive or
pay such expenses for Executive, all in advance of the final disposition of any
such matter.

         (f) Directors' and Officers' Liability Insurance. For a period of six
years after the Termination Date (or for any known longer applicable statute of
limitations period), the Executive shall be entitled to coverage under a
directors' and officers' liability insurance policy in an amount no less than,
and on the same terms as those provided to peer executive officers and directors
of the Employer.

         2.2 If by the Employer for Cause.



                                     - 15 -
<PAGE>

         (a) Termination for Cause. If Executive has a Termination of Employment
for Cause during the Post-Change Period, the Williams Parties' sole obligation
to Executive under this Article II shall be to pay Executive a lump-sum cash
amount equal to all Accrued Obligations determined as of the Termination Date.

         (b) Change in Control that is not a Merger of Equals: Procedural
Requirements for Termination for Cause. For any Termination of Employment for
Cause during any part of a Post-Change Period that is not a Post-Merger of
Equals Period, the Williams Parties shall strictly observe each of the following
substantive and procedural provisions:

                  (i) The Board shall call a meeting for the stated purpose of
         determining whether Executive's acts or omissions satisfy the
         requirements of the definition of "Cause" and, if so, whether to
         terminate Executive's employment for Cause.

                  (ii) Not less than 15 days prior to the date of such meeting,
         the Board shall provide or cause to be provided Executive and each
         member of the Board written notice (a "Notice of Consideration") of (A)
         a detailed description of the acts or omissions alleged to constitute
         Cause, (B) the date of such meeting of the Board, and (C) Executive's
         rights under clauses (iii) and (iv) below.

                  (iii) Executive shall have the opportunity to appear before
         the Board in person and, at Executive's option, with legal counsel,
         and/or present to the Board a written response to the Notice of
         Consideration.

                  (iv) Executive's employment may be terminated for Cause only
         if (A) the acts or omissions specified in the Notice of Consideration
         did in fact occur and such actions or omissions do constitute Cause as
         defined in this Agreement, (B) the Board, by affirmative vote of at
         least 66 2/3 of its members (excluding Executive's vote), makes a
         specific determination to such effect and to the effect that
         Executive's employment should be terminated for Cause ("Cause
         Determination"), and (C) Williams thereafter provides Executive with a
         Notice of Termination that specifies in specific detail the basis of
         such Termination of Employment for Cause and which Notice shall be
         consistent with the reasons set forth in the Notice of Consideration.

         Nothing in this Section 2.2(b) shall preclude the Board, by majority
         vote, from suspending Executive from his duties, with pay, at any time.

         (c) Change in Control that is not a Merger of Equals: Standard of
Review. In the event that the existence of Cause shall become an issue in any
action or proceeding between Executive, on the one hand, and any one or more of
the Williams Parties on the other hand, the Williams Parties, as applicable,
shall, notwithstanding the Cause Determination, have the burden of establishing
that the actions or omissions specified in the Notice of Consideration did in
fact occur and do constitute Cause and that the Williams Parties have satisfied
all applicable substantive and procedural requirements of this Section.



                                     - 16 -
<PAGE>

         (d) Merger of Equals Procedures and Standards. If the Notice of
Consideration is given during any portion of a Post-Change Period that also
qualifies as a Post-Merger of Equals Period, Sections 2.2(b) and (c) shall apply
as modified below:

                  (i) Executive shall have the opportunity to present to the
         Board a written response to the Notice of Consideration, but shall not
         have the right to appear in person or by counsel before the Board; and

                  (ii) The Cause Determination shall require the affirmative
         vote of a simple majority of the members of the Board.

                  (iii) In the event that the existence of Cause shall become an
         issue in any action or proceeding between Executive, on the one hand,
         and any one or more of the Williams Parties, on the other hand, the
         Cause Determination shall be final and binding on all parties.

         2.3 If by a Participant Other Than for Good Reason. If Executive has a
Termination of Employment initiated by the Executive during the Post-Change
Period other than for Good Reason, Disability or death, the sole obligation of
the Williams Parties to Executive under this Article II shall be to pay
Executive a lump-sum cash amount equal to all Accrued Obligations determined as
of the Termination Date.

         2.4 If by Death or Disability. If Executive dies during the Post-Change
Period or if Executive has a Termination of Employment during the Post-Change
Period by reason of Executive's Disability, the Williams Parties' sole
obligation to Executive under this Article II shall be to pay Executive a
lump-sum cash amount equal to all Accrued Obligations determined as of the
Termination Date.

         2.5 Waiver and Release. Notwithstanding anything herein to the
contrary, no Williams Party shall have any obligation to Executive under
Articles II and/or III unless and until Executive executes a release and waiver
of Williams, the Employer and Affiliates, in substantially the same form as
attached hereto as Exhibit A, or as otherwise mutually acceptable.

         2.6 Breach of Covenants. If a court determines that Executive has
breached any non-competition, non-solicitation, non-disparagement, confidential
information or intellectual property covenant entered into at any time between
Executive (on the one hand) and Williams, the Employer, or any Affiliate (on the
other hand), including the Restrictive Covenants in Article VI, (a) no Williams
Party shall have any obligation to pay or provide any severance or benefits
under Articles II and/or III, (b) all of Executive's unexercised Stock Options
shall terminate as of the date of the breach, (c) all of Executive's Restricted
Stock shall be forfeited as of the date of the breach, (d) Executive shall
reimburse a Williams Party for any amount already paid under Articles II and/or
III, and (e) Executive shall repay to the Company an amount equal to the
aggregate "spread" (as defined below) on all Stock Options exercised in the one
year period prior to the first date on which Executive breached any such
covenant ("Breach Date"). For purposes of this Section 2.6, "spread" in respect
of any Stock Option shall mean the product of the number of shares as to which
such Stock Option has been exercised during the one year period prior to the
Breach Date multiplied by the difference between the closing price of the common
stock on



                                     - 17 -
<PAGE>

the exercise date (or if the common stock did not trade on the New York Stock
Exchange on the exercise date, the most recent date on which the common stock
did so trade) and the exercise price of the Stock Options.

                                  ARTICLE III.

                     CERTAIN ADDITIONAL PAYMENTS BY WILLIAMS

         3.1 Gross-Up Payment. If at any time or from time to time, it shall be
determined by the Employer's independent auditors that any payment or other
benefit to Executive pursuant to Article II of this Agreement or otherwise
("Potential Parachute Payment") is or will become subject to the excise tax
imposed by Section 4999 of the Code or any similar tax payable under any United
States federal, state, local, foreign or other law ("Excise Taxes"), then the
Employer shall, pursuant to Section 3.2, pay or cause to be paid a tax gross-up
payment ("Gross-Up Payment") with respect to all such Excise Taxes and other
Taxes on the Gross-Up Payment.

         3.2 Gross-Up Payment. The Gross-Up Payment shall be an amount equal to
the product of

         (a) The amount of the Excise Taxes,

                  multiplied by

         (b) A fraction (the "Gross-Up Multiple"), the numerator of which is one
(1.0), and the denominator of which is one (1.0) minus the lesser of (i) the
sum, expressed as a decimal fraction, of the effective marginal rates of any
Taxes and any Excise Taxes applicable to the Gross-Up Payment or (ii) .80, it
being intended that the Gross-Up Multiple shall in no event exceed five (5.0).
If different rates of tax are applicable to various portions of a Gross-Up
Payment, the weighted average of such rates shall be used.

The Gross-Up Payment is intended to compensate Executive for all such Excise
Taxes and any other Taxes payable by Executive with respect to the Gross-Up
Payment. The Employer shall pay or cause to be paid the Gross-Up Payment to
Executive within thirty (30) days of the calculation of such amount, but in no
event after Executive makes payment to the IRS of such Excise Taxes.

         3.3 Limitation on Gross-Up Payments. To the extent possible, any
payments or other benefits to Executive pursuant to Article II of the Agreement
shall be allocated as consideration for restrictive covenants applicable to
Executive.

         3.4 Additional Gross-up Amounts. If, for any reason, the Employer's
independent auditors later determine that the amount of Excise Taxes payable by
Executive is greater than the amount initially determined pursuant to Section
3.2, then the Employer shall, subject to Section 3.3 and 3.5, pay Executive,
within thirty (30) days of such determination, or pay to the IRS as required by
applicable law, an amount (which shall also be deemed a Gross-Up Payment) equal
to the product of:



                                     - 18 -
<PAGE>

         (a) the sum of (i) such additional Excise Taxes and (ii) any interest,
penalties, expenses or other costs incurred by Executive as a result of having
taken a position in accordance with a determination made pursuant to Sections
3.2 or 3.5,

                  multiplied by

         (b) the Gross-Up Multiple.

         3.5 Amount Increased or Contested.

         (a) Executive shall notify all Williams Parties in writing (a
"Participant's Notice") of any claim by the IRS or other taxing authority (an
"IRS Claim") that, if successful, would require the payment by Executive of
Excise Taxes in respect of Potential Parachute Payments in an amount in excess
of the amount of such Excise Taxes determined in accordance with Section 3.2.
Executive's Notice shall include the nature and amount of such IRS Claim, the
date on which such IRS Claim is due to be paid (the "IRS Claim Deadline"), and a
copy of all notices and other documents or correspondence received by Executive
in respect of such IRS Claim. Executive shall give Executive's Notice as soon as
practicable, but no later than the earlier of (i) 10 days after Executive first
obtains actual knowledge of such IRS Claim or (ii) five days before the IRS
Claim Deadline; provided, however, that any failure to give Executive's Notice
shall affect the Williams Parties' obligations under this Article only to the
extent that a Williams Party is actually prejudiced by such failure. If at least
one business day before the IRS Claim Deadline the Employer shall:

                  (i) deliver to Executive a written certificate from the
         Employer's independent auditors ("Company Certificate") to the effect
         that, notwithstanding the IRS Claim, the amount of Excise Taxes,
         interest or penalties payable by Executive is either zero or an amount
         less than the amount specified in the IRS Claim,

                  (ii) pay to Executive, or to the IRS as required by applicable
         law, an amount (which shall also be deemed a Gross-Up Payment) equal to
         difference between the product of (A) amount of Excise Taxes, interest
         and penalties specified in the Company Certificate, if any, multiplied
         by (B) the Gross-Up Multiple, less the portion of such product, if any,
         previously paid to Executive by the Employer, and

                  (iii) direct Executive pursuant to Section 3.5(d) to contest
         the balance of the IRS Claim,

then Executive shall pay only the amount, if any, of Excise Taxes, interest and
penalties specified in the Company Certificate. In no event shall Executive pay
an IRS Claim earlier than 30 business days after having given Executive's Notice
(or, if sooner, the IRS Claim Deadline).

         (b) At any time after the payment by Executive of any amount of Excise
Taxes, other Taxes or related interest or penalties in respect of Potential
Parachute Payments (including any such amount equal to or less than the amount
of such Excise Taxes specified in any




                                     - 19 -
<PAGE>

Company Certificate, or IRS Claim), any Williams Party may in its discretion
require Executive to pursue a claim for a refund (a "Refund Claim") of all or
any portion of such Excise Taxes, other Taxes, interest or penalties as may be
specified by the Williams Party in a written notice to Executive.

         (c) If a Williams Party notifies Executive in writing that a Williams
Party desires Executive to contest an IRS Claim or to pursue a Refund Claim,
Executive shall:

                  (i) give the Williams Party all information that it reasonably
         requests in writing from time to time relating to such IRS Claim or
         Refund Claim, as applicable,

                  (ii) take such action in connection with such IRS Claim or
         Refund Claim (as applicable) as the Williams Party reasonably requests
         in writing from time to time, including accepting legal representation
         with respect thereto by an attorney selected by the Williams Party,
         subject to the approval of Executive (which approval shall not be
         unreasonably withheld or delayed),

                  (iii) cooperate with the Williams Party in good faith to
         contest such IRS Claim or pursue such Refund Claim, as applicable,

                  (iv) permit the Williams Party to participate in any
         proceedings relating to such IRS Claim or Refund Claim, as applicable,
         and

                  (v) contest such IRS Claim or prosecute Refund Claim (as
         applicable) to a determination before any administrative tribunal, in a
         court of initial jurisdiction and in one or more appellate courts, as
         the Williams Party may from time to time determine in its discretion.

         The Williams Party shall control all proceedings in connection with
         such IRS Claim or Refund Claim (as applicable) and in its discretion
         may cause Executive to pursue or forego any and all administrative
         appeals, proceedings, hearings and conferences with the Internal
         Revenue Service or other taxing authority in respect of such IRS Claim
         or Refund Claim (as applicable); provided that (A) any extension of the
         statute of limitations relating to payment of taxes for the taxable
         year of Executive relating to the IRS Claim is limited solely to such
         IRS Claim, (B) the Williams Party's control of the IRS Claim or Refund
         Claim (as applicable) shall be limited to issues with respect to which
         a Gross-Up Payment would be payable, and (C) Executive shall be
         entitled to settle or contest, as the case may be, any other issue
         raised by the Internal Revenue Service or other taxing authority.

         (d) Any Williams Party may at any time in its discretion direct
Executive to (i) contest the IRS Claim in any lawful manner or (ii) pay the
amount specified in an IRS Claim and pursue a Refund Claim; provided, however,
that if a Williams Party directs Executive to pay an IRS Claim and pursue a
Refund Claim, the Williams Party shall advance the amount of such payment to
Executive on an interest-free basis and shall indemnify Executive, on an
after-tax basis, for any Excise Tax or income tax, including related interest or
penalties, imposed with respect to such advance.





                                     - 20 -
<PAGE>

         (e) The Williams Party shall pay directly all legal, accounting and
other costs and expenses (including additional interest and penalties) incurred
by the Williams Party or Executive in connection with any IRS Claim or Refund
Claim, as applicable, and shall indemnify Executive, on an after-tax basis, for
any Excise Tax or income tax, including related interest and penalties, imposed
as a result of such payment of costs and expenses.

         3.6 Refunds. If, after the receipt by Executive or the IRS of any
payment or advance of Excise Taxes or other Taxes by any Williams Party,
Executive receives any refund with respect to such Excise Taxes, Executive shall
(subject to the Employer complying with any applicable requirements of Section
3.5) promptly pay the Williams Party which paid the Gross-Up Payment the amount
of such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Executive of an amount advanced by
any Williams Party pursuant to Section 3.5 or receipt by the IRS of an amount
paid by a Williams Party on behalf of Executive pursuant to Section 3.5, a
determination is made that Executive shall not be entitled to any refund with
respect to such claim and a Williams Party does not notify Executive in writing
of its intent to contest such determination within 30 days after the Williams
Parties receive written notice of such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid. Any contest of a denial of refund shall be controlled by Section
3.5(d).

                                  ARTICLE IV.

                              EXPENSES AND INTEREST

         4.1 Legal and Other Expenses.

         (a) If Executive incurs legal fees or other expenses (including expert
witness and accounting fees) in an effort to determine, secure, preserve,
establish entitlement to, or obtain benefits under this Agreement (collectively,
"Legal and Other Expenses"), Executive shall, regardless of the outcome of such
effort, be entitled to payment of or reimbursement for such Legal and Other
Expenses in accordance with Section 4.1(b).

         (b) All Legal and Other Expenses shall be paid or reimbursed on a
monthly basis within 10 days after presentation of Executive's written request
for reimbursement accompanied by evidence that such Legal and Other Expenses
were incurred.

         (c) If Executive does not prevail (after exhaustion of all available
judicial remedies) in respect of a claim by Executive or by one or more of the
Williams Parties, hereunder, and such parties establish before a court of
competent jurisdiction that Executive had no reasonable basis for his claim
hereunder, or for his response to such parties' claim hereunder, or acted in bad
faith, no further payment of or reimbursement for Legal and Other Expenses shall
be due to Executive in respect of such claim and Executive shall refund any
amounts previously paid or reimbursed hereunder with respect to such claim.

         4.2 Interest. If an amount due is not paid to Executive under this
Agreement within five business days after such amount first became due and
owing, interest shall accrue on such



                                     - 21 -
<PAGE>

amount from the date it became due and owing until the date of payment at a
annual rate equal to 200 basis points above the base commercial lending rate
published in The Wall Street Journal in effect from time to time during the
period of such nonpayment.

                                   ARTICLE V.

                            NO SET-OFF OR MITIGATION

         5.1 No Set-off by Williams. Executive's right to receive when due the
payments and other benefits provided for under this Agreement is absolute,
unconditional and subject to no setoff, counterclaim, recoupment, or other
claim, right or action that any Williams Party may have against Executive or
others, except as expressly provided in this Section. Notwithstanding the prior
sentence, any Williams Party shall have the right to deduct any amounts
outstanding on any loans or other extensions of credit to Executive from a
Williams Party from Executive's payments and other benefits (if any) provided
for under this Agreement. Time is of the essence in the performance by the
Williams Parties of their respective obligations under this Agreement.

         5.2 No Mitigation. Executive shall not have any duty to mitigate the
amounts payable by any Williams Party under this Agreement by seeking new
employment or self-employment following termination. Except as specifically
otherwise provided in this Agreement, all amounts payable pursuant to this
Agreement shall be paid without reduction regardless of any amounts of salary,
compensation or other amounts which may be paid or payable to Executive as the
result of Executive's employment by another employer or self-employment.

                                  ARTICLE VI.

                              RESTRICTIVE COVENANTS

         6.1 Confidential Information. The Executive acknowledges that in the
course of performing services for Williams and its Affiliates, Executive may
create (alone or with others), learn of, have access to and receive Confidential
Information. The Executive recognizes that all such Confidential Information is
the sole and exclusive property of Williams and its Affiliates or of third
parties which Williams or Affiliate is obligated to keep confidential, that it
is Williams' policy to keep all such Confidential Information confidential, and
that disclosure of Confidential Information would cause damage to Williams and
its Affiliates. The Executive agrees that, except as required by the duties of
Executive's employment with Williams or any of its Affiliates and except in
connection with enforcing the Executive's rights under this Agreement or if
compelled by a court or governmental agency, in each case provided that prior
written notice is given to Williams, Executive will not, without the written
consent of Williams, willfully disseminate or otherwise disclose, directly or
indirectly, any Confidential Information obtained during his employment with the
Williams or its Affiliates, and will take all necessary precautions to prevent
disclosure, to any unauthorized individual or entity inside or outside Williams,
and will not use the Confidential Information or permit its use for the benefit
of Executive or any other Person other than Williams or its Affiliates. These
obligations shall continue during and after the termination of Executive's
employment for any reason and for so long as the Confidential Information
remains Confidential Information.




                                     - 22 -
<PAGE>

         6.2 Non-Competition. During the period beginning on the Agreement Date
and ending on the first anniversary of the Termination Date, regardless of the
reason for Executive's Termination of Employment, Executive agrees that without
the written consent of Williams Executive shall not at any time, directly or
indirectly, in any capacity:

         (a) engage or participate in, become employed by, serve as a director
of, or render advisory or consulting or other services in connection with, any
Competitive Business; provided, however, that after the Executive's Termination
of Employment, this Section 6.2 shall not preclude Executive from (i) being an
employee of, or consultant to, any business unit of a Competitive Business if
(A) such business unit does not qualify as a Competitive Business in its own
right and (B) Executive does not have any direct or indirect involvement in, or
responsibility for, any operations of such Competitive Business that cause it to
qualify as a Competitive Business, or (ii) with the approval of Williams, being
a consultant to, an advisor to, a director of, or an employee of a Competitive
Business; or

         (b) make or retain any financial investment, whether in the form of
equity or debt, or own any interest, in any Competitive Business. Nothing in
this subsection (b) shall, however, restrict Executive from making an investment
in any Competitive Business if such investment does not (i) represent more than
1% of the aggregate market value of the outstanding capital stock or debt (as
applicable) of such Competitive Business, (ii) give Executive any right or
ability, directly or indirectly, to control or influence the policy decisions or
management of such Competitive Business, or (iii) create a conflict of interest
between Executive's duties to Williams and its Affiliates or under this
Agreement and his interest in such investment.

         6.3 Non-Solicitation. During the period beginning on the Agreement Date
and ending on the first anniversary of the Termination Date, regardless of the
reason for Executive's Termination of Employment, Executive shall not, directly
or indirectly:

         (a) other than in connection with the good-faith performance of his
duties as an officer of Williams or its Affiliates, cause or attempt to cause
any employee or agent of Williams or an Affiliate to terminate his or her
relationship with Williams or an Affiliate;

         (b) employ, engage as a consultant or adviser, or solicit the
employment or engagement as a consultant or adviser, of any employee or agent of
Williams or an Affiliate (other than by Williams or its Affiliates), or cause or
attempt to cause any Person to do any of the foregoing;

         (c) establish (or take preliminary steps to establish) a business with,
or cause or attempt to cause others to establish (or take preliminary steps to
establish) a business with, any employee or agent of Williams or an Affiliate,
if such business is or will be a Competitive Business; or

         (d) interfere with the relationship of Williams or an Affiliate with,
or endeavor to entice away from Williams or an Affiliate, any Person who or
which at any time during the period commencing one year prior to the Termination
Date was or is, to the Executive's knowledge, a material customer or material
supplier of, or maintained a material business relationship with, Williams or an
Affiliate.



                                     - 23 -
<PAGE>

         6.4 Intellectual Property.

         (a) During the period of Executive's employment with Williams and any
Affiliate, and thereafter upon Williams' request, regardless of the reason for
Executive's Termination of Employment, Executive shall disclose immediately to
Williams all Work Product that: (i) relates to the business of Williams or any
Affiliate or any customer or supplier to Williams or an Affiliate or any of the
products or services being developed, manufactured, sold or otherwise provided
by Williams or an Affiliate or that may be used in relation therewith; or (ii)
results from tasks or projects assigned to Executive by Williams or an
Affiliate; or (iii) results from the use of the premises or personal property
(whether tangible or intangible) owned, leased or contracted for by Williams or
an Affiliate. Executive agrees that any Work Product shall be the property of
Williams and, if subject to copyright, shall be considered a "work made for
hire" within the meaning of the Copyright Act of 1976, as amended. If and to the
extent that any such Work Product is not a "work made for hire" within the
meaning of the Copyright Act of 1976, as amended, Executive hereby assigns to
Williams all right, title and interest in and to the Work Product, and all
copies thereof, and the copyright, patent, trademark, trade secret and all
proprietary rights in the Work Product, without further consideration, free from
any claim, lien for balance due, or rights of retention thereto on the part of
Executive.

         (b) Williams hereby notifies Executive that the preceding Section
6.4(a) does not apply to any inventions for which no equipment, supplies,
facility, or trade secret information of Williams or an Affiliate was used and
which was developed entirely on the Executive's own time, unless: (i) the
invention relates (a) to the business of Williams or an Affiliate, or (b) to the
actual or demonstrably anticipated research or development of Williams or any
Affiliate, or (ii) the invention results from any work performed by the
Executive for Williams or any Affiliate.

         (c) Executive agrees that upon disclosure of Work Product to Williams,
Executive will, during employment and at any time thereafter, at the request and
cost of Williams, execute all such documents and perform all such acts as
Williams or an Affiliate (or their respective duly authorized agents) may
reasonably require: (i) to apply for, obtain and vest in the name of Williams
alone (unless Williams otherwise directs) letters patent, copyrights or other
analogous protection in any country throughout the world, and when so obtained
or vested to renew and restore the same; and (ii) to prosecute or defend any
opposition proceedings in respect of such applications and any opposition
proceedings or petitions or applications for revocation of such letters patent,
copyright or other analogous protection, or otherwise in respect of the Work
Product.

         (d) In the event that Williams is unable, after reasonable effort, to
secure Executive's execution of such documents as provided in Section 6.4(c),
whether because of Executive's physical or mental incapacity or for any other
reason whatsoever, Executive hereby irrevocably designates and appoints Williams
and its duly authorized officers and agents as his agent and attorney-in-fact,
to act for and on his behalf to execute and file any such application or
applications and to do all other lawfully permitted acts to further the
prosecution, issuance and protection of letters patent, copyright and other
intellectual property protection with the same legal force and effect as if
personally executed by Executive.





                                     - 24 -
<PAGE>

         6.5 Non-Disparagement.

         (a) Executive agrees not to make, or cause to be made, any statement,
observation or opinion, or communicate any information (whether oral or written,
directly or indirectly) that (i) accuses or implies that Williams and/or any of
its Affiliates, together with their respective present or former officers,
directors, partners, stockholders, employees and agents, and each of their
predecessors, successors and assigns, engaged in any wrongful, unlawful or
improper conduct, whether relating to Executive's employment (or the termination
thereof), the business or operations of Williams, or otherwise; or (ii)
disparages, impugns or in any way reflects adversely upon the business or
reputation of Williams and/or any of its Affiliates, together with their
respective present or former officers, directors, partners, stockholders,
employees and agents, and each of their predecessors, successors and assigns.

         (b) Williams agrees not to authorize any statement, observation or
opinion, or communicate any information (whether oral or written, direct or
indirect) that (i) accuses or implies that Executive engaged in any wrongful,
unlawful or improper conduct relating to Executive's employment or termination
thereof with Williams, or otherwise; or (ii) disparages, impugns or in any way
reflects adversely upon the reputation of Executive.

         (c) Nothing herein shall be deemed to preclude Executive or Williams
from providing truthful testimony or information pursuant to subpoena, court or
other similar legal process.

         6.6 Reasonableness of Restrictive Covenants.

         (a) Executive acknowledges that the covenants contained in this
Agreement are reasonable in the scope of the activities restricted, the
geographic area covered by the restrictions, and the duration of the
restrictions, and that such covenants are reasonably necessary to protect
Williams' legitimate interests in its Confidential Information, its proprietary
work, and in its relationships with its employees, customers and suppliers.

         (b) Williams has, and the Executive has had an opportunity to, consult
with their respective legal counsel and to be advised concerning the
reasonableness and propriety of such covenants. Executive acknowledges that his
observance of the covenants contained herein will not deprive Executive of the
ability to earn a livelihood or to support his or her dependents.

         (c) Executive understands he is bound by the terms of this Article VI,
whether or not he receives severance payments under the Agreement or otherwise.

         6.7 Right to Injunction: Survival of Undertakings.

         (a) In recognition of the confidential nature of the Confidential
Information, and in recognition of the necessity of the limited restrictions
imposed by this Agreement, Executive and Williams agree that it would be
impossible to measure solely in money the damages which Williams would suffer if
Executive were to breach any of his obligations hereunder. Executive
acknowledges that any breach of any provision of this Agreement would
irreparably injure Williams. Accordingly, Executive agrees that if he breaches
any of the provisions of this



                                     - 25 -
<PAGE>

Agreement, Williams shall be entitled, in addition to any other remedies to
which Williams may be entitled under this Agreement or otherwise, to an
injunction to be issued by a court of competent jurisdiction, to restrain any
breach, or threatened breach, of any provision of this Agreement, and Executive
hereby waives any right to assert any claim or defense that Williams has an
adequate remedy at law for any such breach.

         (b) If a court determines that any covenant included in this Article VI
is unenforceable in whole or in part because of such covenant's duration or
geographical or other scope, such court shall have the power to modify the
duration or scope of such provision, as the case may be, so as to cause such
covenant as so modified to be enforceable.

         (c) All of the provisions of this Agreement shall survive any
Termination of Employment of the Executive, without regard to the reasons for
such termination. Notwithstanding Section 2.6, in addition to any other rights
it may have, neither Williams nor any Affiliate shall have any obligation to pay
or provide severance or other benefits (except as may be required under the
Employee Retirement Income Security Act of 1974, as amended) after the
Termination Date if the Executive has breached any of Executive's obligations
under this Agreement.

                                  ARTICLE VII.

                            NON-EXCLUSIVITY OF RIGHTS

         7.1 Waiver of Certain Other Rights. To the extent that Executive shall
have received severance payments or other severance benefits under any other
plan, program, policy, practice or procedure or agreement of any Williams Party
prior to receiving severance payments or other severance benefits pursuant to
Article II, the severance payments or other severance benefits under such other
plan, program, policy, practice or procedure or agreement shall reduce (but not
below zero) the corresponding severance payments or other benefits to which
Executive shall be entitled under Article II. To the extent that Executive
accepts payments made pursuant to Article II, he shall be deemed to have waived
his right to receive a corresponding amount of future severance payments or
other severance benefits under any other plan, program, policy, practice or
procedure or agreement of any Williams Party. To the extent that Executive
accepts payments with respect to a Non-Qualified Plan under Section 2.1,
Executive shall be deemed to have waived his right to receive duplicate payments
or benefits under any Non-Qualified Plan of any Williams Party that have been
accrued as of the Termination Date.

         7.2 Other Rights. Except as expressly provided in Section 7.1 and as
provided in the Recitals to this Agreement, this Agreement shall not prevent or
limit Executive's continuing or future participation in any benefit, bonus,
incentive or other plan, program, policy, practice or procedure provided by a
Williams Party and for which Executive may qualify, nor shall this Agreement
limit or otherwise affect such rights as Executive may have under any other
agreements with a Williams Party. Amounts that are vested benefits or that
Executive is otherwise entitled to receive under any plan, program, policy,
practice or procedure and any other payment or benefit required by law at or
after the Termination Date shall be payable in accordance with such plan,
program, policy, practice or procedure or applicable law except as expressly
modified by this Agreement.





                                     - 26 -
<PAGE>

         7.3 No Right to Continued Employment. Nothing in this Agreement shall
guarantee the right of Executive to continue in employment, and Williams and the
Employer retain the right to terminate the Executive's employment at any time
for any reason or for no reason.

                                 ARTICLE VIII.

                                CLAIMS PROCEDURES

         8.1 Filing a Claim.

         (a) Each individual eligible for benefits under this Agreement
         ("Claimant") may submit his application for benefits ("Claim") to
         Williams (or to such other person as may be designated by Williams) in
         writing in such form as is provided or approved by Williams. A Claimant
         shall have no right to seek review of a denial or benefits, or to bring
         any action in any court to enforce a Claim, prior to his filing a Claim
         and exhausting his rights to review under Sections 8.1 and 8.2.

         (b) When a Claim has been filed properly, it shall be evaluated and the
         Claimant shall be notified of the approval or the denial of the Claim
         within 30 days after the receipt of such Claim. A Claimant shall be
         given a written notice in which the Claimant shall be advised as to
         whether the Claim is granted or denied, in whole or in part. If a Claim
         is denied, in whole or in part, the notice shall contain (i) the
         specific reasons for the denial, (ii) references to pertinent
         provisions of this Agreement on which the denial is based, (iii) a
         description of any additional material or information necessary to
         perfect the Claim and an explanation of why such material or
         information is necessary, and (iv) the Claimant's right to seek review
         of the denial.

         8.2 Review of Claim Denial. If a Claim is denied, in whole or in part,
or if a Claim is neither approved nor denied within the 30-day period specified
Section 8.1(b), the Claimant shall have the right at any time to (a) request
that Williams (or such other person as shall be designated in writing by
Williams) review the denial or the failure to approve or deny the Claim, (b)
review pertinent documents, and (c) submit issues and comments in writing.
Within 30 days after such a request is received, Williams shall complete its
review and give the Claimant written notice of its decision. Williams shall
include in its notice to Claimant the specific reasons for its decision and
references to provisions of this Agreement on which its decision is based.

                                  ARTICLE IX.

                                  MISCELLANEOUS

         9.1 No Assignability. This Agreement is personal to Executive and
without the prior written consent of Williams shall not be assignable by
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
representatives.



                                     - 27 -
<PAGE>

         9.2 Successors. This Agreement shall inure to the benefit of and be
binding upon Williams and its successors and assigns. Williams will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of Williams (or
the Employer during any Post-Change Period other than a Post-Merger of Equals
Period) to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that Williams (or, if applicable, the Employer)
would be required to perform it if no such succession had taken place. Any
successor to the business or assets of Williams (or any Employer) which assumes
or agrees to perform this Agreement by operation of law, contract, or otherwise
shall be jointly and severally liable with Williams (or the Employer) under this
Agreement as if such successor were Williams (or the Employer). If Executive's
employment is transferred from Williams to a Subsidiary, or from a Subsidiary to
Williams or another Subsidiary, the rights and obligations of the Employer
(determined prior to such transfer) shall automatically become the rights and
obligations of the Employer (determined immediately following such transfer),
without requiring the consent of Executive.

         9.3 Payments to Beneficiary. If Executive dies before receiving amounts
to which Executive is entitled under this Agreement, such amounts shall be paid
in a lump sum to one or more beneficiaries designated in writing by Executive
(each, a "Beneficiary"). If none is so designated, the Executive's estate shall
be his or her Beneficiary.

         9.4 Non-Alienation of Benefits. Benefits payable under this Agreement
shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any
kind, either voluntary or involuntary, before actually being received by
Executive, and any such attempt to dispose of any right to benefits payable
under this Agreement shall be void.

         9.5 Severability. If any one or more Articles, Sections or other
portions of this Agreement are declared by any court or governmental authority
to be unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any Article, Section or other portion not so declared to be unlawful
or invalid. Any Article, Section or other portion so declared to be unlawful or
invalid shall be construed so as to effectuate the terms of such Article,
Section or other portion to the fullest extent possible while remaining lawful
and valid.

         9.6 Amendments. This Agreement shall not be amended or modified except
by written instrument executed by Williams and Executive.

         9.7 Notices. All notices and other communications under this Agreement
shall be in writing and delivered by hand, by nationally-recognized delivery
service that promises overnight delivery, or by first-class registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

                          If to Executive, to Executive at his most recent home
                          address on file with Williams.




                                     - 28 -
<PAGE>

                          If to Williams or the Employer:

                          The Williams Companies, Inc.
                          One Williams Center
                          Tulsa, Oklahoma 74172
                          Attention:  General Counsel

or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.

         9.8 Joint and Several Liability. In the event that the Employer incurs
any obligation to Executive pursuant to this Agreement, such Employer, Williams
and each Subsidiary, if any, of which such Employer is a subsidiary shall be
jointly and severally liable with such Employer for such obligation.

         9.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.

         9.10 Governing Law. This Agreement shall be interpreted and construed
in accordance with the laws of the State of Oklahoma, without regard to its
choice of law principles, except to the extent preempted by federal law.

         9.11 Captions. The captions of this Agreement are not a part of the
provisions hereof and shall have no force or effect.

         9.12 Number and Gender. Wherever appropriate, the singular shall
include the plural, the plural shall include the singular, and the masculine
shall include the feminine.

         9.13 Tax Withholding. Williams may withhold from any amounts payable
under this Agreement or otherwise payable to Executive any Taxes Williams
determines to be required under applicable law or regulation and may report all
such amounts payable to such authority as is required by any applicable law or
regulation.

         9.14 No Rights Prior to Change Date. Notwithstanding any provision of
this Agreement to the contrary, this Agreement shall not entitle Executive to
any compensation, severance or other payments or benefits of any kind prior to a
Change Date.



                                     - 29 -
<PAGE>

         9.15 Entire Agreement. This Agreement contains the entire understanding
of Williams and Executive with respect to its subject matter.

         IN WITNESS WHEREOF, Executive and The Williams Companies, Inc. have
executed this Change in Control Severance Agreement ________________, 2002.

                                    EXECUTIVE


                                    -----------------------------------------


                                    THE WILLIAMS COMPANIES, INC.


                                    By:
                                        -------------------------------------
                                    Title:
                                           ----------------------------------


                                     - 30 -
<PAGE>

                                    EXHIBIT A
       THE WILLIAMS COMPANIES, INC. CHANGE IN CONTROL SEVERANCE AGREEMENT
                               WAIVER AND RELEASE

                           [ATTACH Waiver and Release]


                                     - 31 -

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>15
<FILENAME>d00961exv12.txt
<DESCRIPTION>COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TEXT>
<PAGE>



                                                                      EXHIBIT 12

                  The Williams Companies, Inc. and Subsidiaries
           Computation of Ratio of Earnings to Combined Fixed Charges
                    and Preferred Stock Dividend Requirements
                              (Dollars in millions)

<Table>
<Caption>
                                                                            Nine months ended
                                                                           September 30, 2002
                                                                           ------------------
<S>                                                                        <C>

Earnings:
   Income (loss) from continuing operations before income taxes               $     (947.0)
   Add:
      Interest expense - net                                                         828.8
      Rental expense representative of interest factor                                23.3
      Preferred returns and minority interest in income
         of consolidated subsidiaries                                                 60.6
      Interest accrued - 50% owned company                                             3.7
      Equity losses in less than 50% owned companies                                  16.7
      Other                                                                            4.9
                                                                              ------------

         Total earnings (loss) as adjusted plus fixed charges                 $       (9.0)
                                                                              ============

Fixed charges and preferred stock dividend requirements:
   Interest expense - net                                                     $      828.8
   Capitalized interest                                                               20.0
   Rental expense representative of interest factor                                   23.3
   Pre-tax effect of preferred stock dividend requirements of the Company             22.6
   Pre-tax effect of preferred returns of subsidiaries                                14.7
   Interest accrued - 50% owned company                                                3.7
                                                                              ------------

         Combined fixed charges and preferred stock dividend requirements     $      913.1
                                                                              ============

Ratio of earnings to combined fixed charges and preferred stock dividend
   requirements                                                                         (a)
                                                                              ============
</Table>

(a)  Earnings were inadequate to cover combined fixed charges and preferred
     stock dividend requirements by $922.1 million for the nine months ended
     September 30, 2002.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>16
<FILENAME>d00961exv99w1.txt
<DESCRIPTION>CERTIFICATION OF CHIEF EXECUTIVE OFFICER
<TEXT>
<PAGE>
                                                                    EXHIBIT 99.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


         In connection with the Quarterly Report of The Williams Companies, Inc.
(the "Company") on Form 10-Q for the period ending September 30, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Steven J. Malcolm, Chief Executive Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

         (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.


/s/ Steven J. Malcolm
- ---------------------------
Steven J. Malcolm
Chief Executive Officer
November 14, 2002




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>17
<FILENAME>d00961exv99w2.txt
<DESCRIPTION>CERTIFICATION OF CHIEF FINANCIAL OFFICER
<TEXT>
<PAGE>


                                                                    EXHIBIT 99.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


         In connection with the Quarterly Report of The Williams Companies, Inc.
(the "Company") on Form 10-Q for the period ending September 30, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Jack D. McCarthy, Chief Financial Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

         (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.


/s/ Jack D. McCarthy
- ----------------------------
Jack D. McCarthy
Chief Financial Officer
November 14, 2002


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
