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<DESCRIPTION>FORM 10-K FOR FISCAL YEAR END DECEMBER 31, 2001
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<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K

(MARK ONE)
     [X]         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

                                       OR

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

                         COMMISSION FILE NUMBER 1-16335

                         WILLIAMS ENERGY PARTNERS L.P.
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                   DELAWARE                                      73-1599053
       (State or other jurisdiction of                        (I.R.S. Employer
        incorporation or organization)                      Identification No.)
               WILLIAMS GP LLC
     ONE WILLIAMS CENTER, TULSA, OKLAHOMA                          74172
   (Address of principal executive offices)                      (Zip Code)
</Table>

              Registrant's telephone number, including area code:
                                 (918) 573-2000

          Securities registered pursuant to Section 12(b) of the Act:

<Table>
<Caption>
                                      NAME OF EACH EXCHANGE ON
       TITLE OF EACH CLASS                WHICH REGISTERED
       -------------------            ------------------------
<S>                                <C>
Common Units representing limited      New York Stock Exchange
       partnership interests
</Table>

       Securities registered pursuant to Section 12(g) of the Act:  NONE

     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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

     The aggregate market value of the registrant's voting and non-voting units
held by non-affiliates as of the close of business on February 28, 2002, was
approximately $154.7 million.

     The number of units of the registrant's common units held by non-affiliates
and outstanding at February 28, 2002, was 4,600,000.

                      DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                         WILLIAMS ENERGY PARTNERS L.P.

                                   FORM 10-K

                                     PART I

ITEM 1. BUSINESS

(a) GENERAL DEVELOPMENT OF BUSINESS

     We were formed as a limited partnership under the laws of the State of
Delaware in August 2000. The principal executive offices of Williams GP LLC, our
general partner, are located at One Williams Center, Tulsa, Oklahoma 74172
(telephone (918) 573-2000).

     On October 30, 2000, we filed with the Securities and Exchange Commission a
registration statement on Form S-1 related to an initial public offering of
common units. In February 2001, 4,600,000 common units, representing
approximately 40 percent of our total outstanding units, were sold to the
public. The Williams Companies, Inc., through its wholly owned subsidiaries,
currently owns approximately 60 percent of our Partnership interests including
its general partner interest.

     Effective June 30, 2001, we purchased two petroleum distribution facilities
in Little Rock, Arkansas, from TransMontaigne, Inc. for $29.1 million. These
facilities primarily handle gasoline and diesel fuel and have 452,000 barrels of
storage capacity.

     Effective November 8, 2001, we purchased the crude oil storage and
distribution assets of Geonet Gathering, Inc., for $21.1 million. The assets
included three pipelines in Gibson, Louisiana that have a combined capacity to
distribute up to 60,000 barrels per day of crude oil from a storage facility
into pipeline interconnects. The acquisition also included long-term lease
agreements for 56,000 barrels of crude oil storage, two barge docks and a truck
loading rack.

(b) FINANCIAL INFORMATION ABOUT SEGMENTS

     See Part II, Item 8 -- Financial Statements and Supplementary Data.

(c) NARRATIVE DESCRIPTION OF BUSINESS

     We were formed by The Williams Companies, Inc., which we sometimes refer to
as Williams or WMB, to own, operate and acquire a diversified portfolio of
complementary energy assets. We are principally engaged in the storage,
transportation and distribution of refined petroleum products and ammonia. Our
asset portfolio currently consists of:

     - Five petroleum product terminal facilities located along the Gulf Coast
       and near the New York harbor. We refer to these facilities as our marine
       terminals.

     - 25 petroleum product terminals (some of which are partially owned)
       located principally in the southeastern United States. We refer to these
       terminals as our inland terminals.

     - An ammonia pipeline and terminals system, which extends approximately
       1,100 miles from Texas and Oklahoma to Minnesota.

     Upon the closing of our initial public offering in February 2001, four
marine terminals, 24 inland terminals and the ammonia pipeline and terminals
system were transferred to us, including the related liabilities. We acquired an
additional marine terminal and two additional inland terminals and sold one
inland terminal during 2001.

                          PETROLEUM PRODUCT TERMINALS

     The United States refined petroleum product distribution system links oil
refineries to end-users of gasoline and other refined petroleum products. It is
comprised of a network of terminals, storage facilities,

                                        1
<PAGE>

pipelines, tankers, barges, rail cars and trucks and is used to move refined
petroleum products from refineries to the ultimate end-consumer. Throughout the
distribution system, terminals play a key role in moving product to the end-user
market by providing storage, distribution, blending and other ancillary
services. Products stored in and distributed through our terminal network
include:

     - Refined Petroleum Products, which are the output from refineries and are
       often used as fuels for consumers. Refined petroleum products include
       gasoline, diesel, jet fuel, kerosene and heating oil.

     - Blendstocks, which are blended with other products to change or enhance
       their characteristics such as increasing a gasoline's octane or oxygen
       content. Blendstocks include products such as alkylates and oxygenates.

     - Heavy Oils and Feedstocks, which are often used as burner fuels or
       feedstocks for further processing by refineries and petrochemical
       facilities. Heavy oils and feedstocks include products such as number six
       fuel oil, vacuum gas oil and asphalt.

     Within our terminal network, we operate two types of terminals: marine
terminals and inland terminals. Our marine terminal facilities are located in
close proximity to refineries and are large storage and distribution facilities
that handle refined petroleum products, blendstocks and heavy oils and
feedstocks. Our inland terminals are located in the southeastern United States
and are primarily located along third party pipelines such as Colonial, TEPPCO
and Plantation. These facilities receive products from pipelines and distribute
them to third parties at the terminals, who in turn deliver them to end-users
such as retail outlets. Because these terminals are unregulated, the marketplace
determines the prices we can charge for our services. Williams Energy Marketing
& Trading Company and Williams Refining & Marketing, L.L.C., subsidiaries of The
Williams Companies, Inc., utilize our facilities to support their business
activities and are among our largest terminal customers. Williams Energy
Marketing & Trading Company and Williams Refining & Marketing, L.L.C.
represented approximately 13 percent and 9 percent, respectively, of our
terminal's revenues and 11 percent and 7 percent, respectively, of our total
revenues for the year ended December 31, 2001.

MARINE TERMINALS

     The Gulf Coast region is a major hub for petroleum refining, representing
approximately 42 percent of total U.S. daily refining capacity and 67 percent of
U.S. refining capacity expansion from 1990 to 2000. The growth in Gulf Coast
refining capacity has resulted in part from consolidation in the petroleum
industry to take advantage of economies of scale from operating larger,
concentrated refineries. We expect this trend to continue in order to meet
growing domestic and international demand. From 1990 to 2000, the amount of
petroleum products exported from the Gulf Coast region increased by
approximately 18 percent, or 195 million barrels. The growth in refining
capacity and increased product flow attributable to the Gulf Coast region has
created a need for additional transportation, storage and distribution
facilities. In the future, the competition resulting from the consolidation
trend, combined with continued environmental pressures, governmental regulations
and market conditions, could result in the closing of smaller, less economical
inland refiners, creating even greater demand for petroleum products refined in
the Gulf Coast region.

     We own and operate five marine terminal facilities, including four marine
terminal facilities located along the Gulf Coast and one terminal facility
located in Connecticut near the New York harbor. Our marine terminals are large
storage and distribution facilities that provide inventory management, storage
and distribution services for refiners and other large end-users of petroleum
products. Our marine terminal facilities have an aggregate storage capacity of
approximately 17.6 million barrels.

     Our marine terminal facilities primarily receive petroleum products by ship
and barge, short-haul pipeline connections to neighboring refineries and common
carrier pipelines. We distribute petroleum products from our marine terminals by
all of those means as well as by truck and rail. Once the product has reached
our terminal facilities, we store the product for a period of time ranging from
a few days to several months. Products that we store in our marine terminal
facilities include petroleum products, blendstocks and heavy oils and
feedstocks.

                                        2
<PAGE>

     In addition to providing storage and distribution services, our marine
terminal facilities provide ancillary services including heating, blending and
mixing of stored products and injection services. Many heavy oils require
heating to keep them in a liquid state. In addition, in order to meet government
specifications, products often must be combined with other products through the
blending and mixing process. Blending is the combination of products from
different storage tanks. Once the products are blended together, the mixing
process circulates the blended product through mixing lines and nozzles to
further combine the products. Finally, injection is the process of injecting
refined petroleum products with additives and dyes to comply with governmental
regulations and to meet our customer's marketing initiatives. We also provide
marine vessel fueling services, referred to as bunkering.

     Our terminals generate fees primarily through providing long term or spot
on demand storage services and inventory management for a variety of customers.
Refiners and chemical companies will typically use our facilities because their
facilities are inadequate, either because of size constraints or the specialized
handling requirements of the stored product. We also provide storage services
and inventory management to various industrial end users, marketers and traders
that require access to large storage capacity.

     The following table outlines our marine terminal locations, capacities,
primary products handled and the connections to and from these terminals:

<Table>
<Caption>
                                            RATED STORAGE
                                              CAPACITY
                                              (THOUSAND
FACILITY                                      BARRELS)         PRIMARY PRODUCTS HANDLED           CONNECTIONS
--------                                    -------------      ------------------------           -----------
<S>                                         <C>             <C>                              <C>
Galena Park, Texas........................      8,884       Refined petroleum products,      Pipeline, barge, ship,
                                                              blendstocks, heavy oils and      rail and truck
                                                              feedstocks
Corpus Christi, Texas.....................      2,711       Blendstocks, heavy oils and      Pipeline, barge, ship
                                                              feedstocks                       and truck
Marrero, Louisiana........................      2,006       Heavy oils and feedstocks        Barge, ship, rail and
                                                                                               truck
Gibson, Louisiana.........................         56       Crude oil and condensate         Pipeline, barge and
                                                                                               truck
New Haven, Connecticut....................      3,986       Refined petroleum products,      Pipeline, barge, ship
                                                              heavy oils and feedstocks        and truck
                                               ------
          Total storage capacity..........     17,643
                                               ======
</Table>

     Galena Park Facility.  Our Galena Park, Texas facility is located along the
Houston Ship Channel and is one of the largest marine distribution facilities in
the United States. It has 103 tanks with an aggregate storage capacity of 8.9
million barrels, two ship docks and three barge docks and includes a storage
tank at Channelview, Texas. The facility stores a mix of refined petroleum
products, blendstocks and heavy oils and feedstocks. We primarily receive
products in this facility via barge, pipe and ship and distribute products from
the facility via truck, barge, ship and pipeline.

     Our Galena Park facility provides our customers with access to multiple
common carrier pipelines, deep-water port facilities that accommodate both ship
and barge traffic and loading and unloading facilities for trucks and rail cars.
The facility has a 14-inch, 2.5-mile pipeline that runs under the Houston Ship
Channel to the Witter Street Station. The Witter Street Station is a major
pipeline junction that connects our facility to most major Gulf Coast refineries
and common carrier pipelines such as the TEPPCO Partners, L.P. and El Paso
Corporation pipelines. These refineries and pipelines provide marketers such as
Valero Marketing and Supply Company, Koch Supply and Trading Company, CITGO
Petroleum Corporation, El Paso Corporation and Shell Oil Company with
opportunities to supply their retail and wholesale needs along our terminal
network. We also own two 36-inch pipelines and one 14-inch pipeline that connect
our facility to the Colonial and Explorer pipelines, providing distribution
capacity to markets in the southeastern, east coast and

                                        3
<PAGE>

midwestern United States. We also own one active pipeline and several inactive
pipelines that run to the Holland Avenue Station and connect our facility to
Equistar Chemicals' petrochemical plant.

     Corpus Christi Facility.  Our Corpus Christi, Texas facility is located
near four major refineries and one petrochemical plant. This facility includes
47 tanks with an aggregate storage capacity of 2.7 million barrels. We primarily
receive products at our Corpus Christi facility by ship and barge through three
docks owned by the Port of Corpus Christi, and we deliver product by barge,
ship, truck and pipeline, including El Paso's common carrier pipeline with
appropriate connections that transport products from Corpus Christi to Houston.

     We provide inventory management and storage services for the refineries and
petrochemical plants. We store blendstocks, heavy oils and feedstocks. Our
Corpus Christi facility has pipeline connections to many of the local refineries
including Koch, CITGO, El Paso and Equistar Chemicals' petrochemical plant.

     Marrero Facility.  Our Marrero, Louisiana facility is located adjacent to
the Mississippi River and is 22 miles from the Port of New Orleans. This
facility has 71 tanks with an aggregate storage capacity of 2.0 million barrels
and three barge docks. We primarily receive products at our Marrero facility by
ship and barge, and we deliver products from Marrero by rail, barge and truck.
In addition, our facility is connected to a Texaco, Inc. terminal by four
separate pipelines.

     Our Marrero facility primarily stores heavy oils and feedstocks. Also, a
major local refiner uses our facility to store its excess production.

     Gibson Facility.  Our Gibson, Louisiana facility is located adjacent to
Bayou Black, a body of water which connects to the Intracoastal Waterway. The
facility has five tanks with an aggregate storage capacity of 0.1 million
barrels and two barge docks. The facility receives products by barge, pipeline
and truck, and we primarily deliver products by pipeline.

     Our Gibson terminal primarily stores and transports crude oil and
condensate. The facility is connected to the Ship Shoal Pipeline system by one
8-inch pipeline and one 6-inch pipeline, both of which we own.

     New Haven Facility.  Our New Haven, Connecticut facility has four refined
product terminals, the Waterfront, Forbes, 85 East and Hamden terminals, with an
aggregate refined product storage capacity of 3.6 million barrels and asphalt
tankage with 0.4 million barrels of storage capacity. Our New Haven facility
receives product by ship and barge and distributes products by pipeline and
truck. We also have the capability to deliver products via ship and barge.

     Our Waterfront terminal has 0.8 million barrels of storage capacity and
handles refined petroleum products. We receive products in this terminal via
barge and ship, and we deliver products from the terminal via truck, barge and
the Buckeye Pipeline. The Forbes terminal has 0.6 million barrels of storage
capacity and handles refined petroleum products. The Forbes terminal is
connected to the Waterfront terminal by four two-way 10-inch and 12-inch
pipelines that we own. The 85 East terminal has 1.4 million barrels of storage
capacity and handles refined petroleum products and asphalt. The Hamden terminal
has 1.2 million barrels of storage capacity and handles refined petroleum
products. The Hamden terminal is connected to the 85 East Terminal by a three
mile 8-inch pipeline that we own.

     Customers and Contracts.  We have long-standing relationships with oil
refiners, suppliers and traders at our facilities, and most of our customers
have consistently renewed their short-term contracts. During 2001, approximately
89 percent of our marine terminal working storage capacity was under contract.
As of December 31, 2001, approximately 44 percent of the revenues that we
generated were from contracts with remaining terms in excess of one year or that
renew on an annual basis. Williams Energy Marketing & Trading Company
represented approximately 17 percent of revenues at our marine terminals for the
year ended December 31, 2001. For a further discussion of revenues from major
customers and concentration of credit risk, refer to Note 6 of the Consolidated
Financial Statements.

     Markets and Competition.  We believe that the strong demand for our marine
terminal facilities from our refining and chemical customers results from our
cost-effective distribution services and key transportation links such as
deep-water ports. We experience the greatest demand at our marine terminals in a
contango
                                        4
<PAGE>

market, when customers tend to store more product to take advantage of favorable
pricing expected in the future. When the opposite market condition, known as
backwardation, exists, some companies choose not to store product. The
additional heating and blending services that we provide at our marine
terminals, however, attract additional demand for our storage services and
result in increased revenue opportunities.

     Several major and integrated oil companies have their own proprietary
storage terminals along the Gulf Coast that are currently being used in their
refining operations. If these companies choose to shut down their refining
operations and elect to store and distribute refined petroleum products through
their proprietary terminals, we would experience increased competition for the
services that we provide. In addition, several companies have facilities in the
Gulf Coast region and offer competing storage and distribution services.

INLAND TERMINALS

     We own and operate a network of 25 refined petroleum product terminals
located primarily in the southeastern United States. These terminals have a
combined storage capacity of 5.0 million barrels. Our customers utilize these
facilities to take delivery of refined petroleum products transported on major
common-carrier interstate pipelines. The majority of our inland terminals
connect to the Colonial, Plantation, TEPPCO or Explorer pipelines, and some
facilities have multiple pipeline connections. In addition, our Dallas terminal
connects to Dallas Love Field airport via a 6-inch pipeline we purchased in
April 2001. During 2001, gasoline represented approximately 53 percent of the
volume of product distributed through our inland terminals, with the remaining
47 percent consisting of distillates such as low sulfur diesel and jet fuel.

     Our inland terminal facilities typically consist of multiple storage tanks
that are connected by a third-party pipeline system. We load and unload products
through an automated system that allows products to move directly from the
common carrier pipeline to our storage tanks and directly from our storage tanks
to a truck or rail car loading rack.

     We are an independent provider of storage and distribution services.
Because we do not own the products moving through our terminals, we are not
exposed to the risks of product ownership. We operate our inland terminals as
distribution terminals, and we primarily serve the retail, industrial and
commercial sales markets. We provide the following services at our inland
terminals:

     - inventory and supply management through our virtual supply network and
       the ATLAS 2000 software system;

     - distribution; and

     - other services such as injection of gasoline additives.

     We generate revenues by charging our customers a fee based on the amount of
product that we deliver through our terminals. We charge these fees when we
deliver the product to our customers and load it into a truck or rail car. In
addition to throughput fees, we generate revenues by charging our customers a
fee for injecting additives into gasoline, diesel and jet fuel, and for
filtering jet fuel.

     We wholly own 14 of these inland terminals and our percentage ownership of
the remaining 11 inland terminals ranges from 50 percent to 79 percent. The
following table sets forth our inland terminal locations, percentage ownership,
capacities and methods of supply:

<Table>
<Caption>
                                                           TOTAL STORAGE
                                            PERCENTAGE        CAPACITY
FACILITY                                    OWNERSHIP    (THOUSAND BARRELS)        CONNECTIONS
--------                                    ----------   ------------------        -----------
<S>                                         <C>          <C>                  <C>
Alabama
  Mobile..................................     100               135          Barge
  Montgomery..............................     100               104          Plantation Pipeline
Arkansas
  South Little Rock.......................     100               273          TEPPCO Pipeline
  North Little Rock.......................     100               179          TEPPCO Pipeline
</Table>

                                        5
<PAGE>

<Table>
<Caption>
                                                           TOTAL STORAGE
                                            PERCENTAGE        CAPACITY
FACILITY                                    OWNERSHIP    (THOUSAND BARRELS)        CONNECTIONS
--------                                    ----------   ------------------        -----------
<S>                                         <C>          <C>                  <C>
Florida
  Jacksonville............................     100               252          Barge and ship
Georgia
  Doraville...............................     100               295          Colonial and
                                                                              Plantation Pipelines
  Albany..................................      79               124          Colonial Pipeline
Missouri
  St. Charles.............................     100               118          Explorer Pipeline
North Carolina
  Charlotte...............................     100               334          Colonial Pipeline
  Selma...................................      79               305          Colonial Pipeline
  Greensboro..............................      60               248          Colonial Pipeline
  Greensboro..............................      79               239          Colonial and
                                                                              Plantation Pipelines
  Charlotte...............................      79               158          Colonial Pipeline
South Carolina
  North Augusta...........................      79               156          Colonial Pipeline
  North Augusta...........................     100               123          Colonial Pipeline
  Spartanburg.............................     100               116          Colonial Pipeline
Tennessee
  Nashville...............................      50               252          Colonial Pipeline and
                                                                              barge
  Nashville...............................     100               164          Colonial Pipeline
  Nashville...............................      79               148          Colonial Pipeline
  Knoxville...............................     100               115          Colonial and
                                                                              Plantation Pipelines
  Chattanooga.............................     100               105          Colonial Pipeline
Texas
  Dallas..................................     100               400          Explorer and Magtex
                                                                              Pipelines and
                                                                              pipeline to Dallas
                                                                              Love Field owned by
                                                                              us
  Southlake...............................      50               277          Explorer, Koch and
                                                                              UDS Pipelines
Virginia
  Montvale................................      79               171          Colonial Pipeline
  Richmond................................      79               169          Colonial Pipeline
                                                               -----
          Total...........................                     4,960
                                                               =====
</Table>

     Our inland terminals are equipped with automated loading facilities that
are available 24 hours a day. The Williams Companies, Inc.'s proprietary ATLAS
2000 software system allows us to manage inventory across our inland terminal
network and bill our customers electronically. The ATLAS system provides our
customers with the ability to manage, among other things, inventory allocations,
throughput and carrier certification from remote locations. Our customers can
access the ATLAS system via the internet. Under our omnibus agreement, The
Williams Companies, Inc. and its affiliates have licensed the use of the ATLAS
2000 software system to us. See Item 13 -- Certain Relationships and Related
Transactions.

     Customers and Contracts.  All but four of our inland terminals were
acquired by The Williams Companies, Inc. over a period of five years, beginning
with the acquisition of interests in eight terminals in 1996. When The Williams
Companies, Inc. acquired the new terminals, it generally entered into long-term

                                        6
<PAGE>

throughput contracts with the sellers under which they agreed to continue to use
the facilities. These agreements typically last for two to ten years from the
beginning of the agreement, and must be renegotiated at the end of the term. In
addition to these agreements, we enter into separate contracts with new
customers that typically last for one year with a continuing one year renewal
provision. Most of these contracts contain a minimum throughput provision that
obligates the customer to move a minimum amount of product through our terminals
or pay for terminal capacity reserved but not used. Our customers include:

     - retailers that sell gasoline and other petroleum products through
       proprietary retail networks;

     - wholesalers that sell petroleum products to retailers as well as to large
       commercial and industrial end-users;

     - exchange transaction customers, where we act as an intermediary so that
       the parties to the transaction are able to exchange petroleum products;
       and

     - traders that arbitrage, trade and market products stored in our
       terminals.

     For the year ended December 31, 2001, Williams Refining & Marketing, L.L.C.
accounted for approximately 38 percent of our inland terminal revenues. For a
further discussion of revenues from major customers and concentration of credit
risk, refer to Note 6 to the Consolidated Financial Statements.

     Markets and Competition.  We compete with other independent terminal
operators as well as integrated oil companies on the basis of terminal location
and versatility, services provided and price. Our competition from independent
operators primarily comes from distribution companies with marketing and trading
arms, independent terminal operators and refining and marketing companies.

                     AMMONIA PIPELINE AND TERMINALS SYSTEM

     We own and operate a 1,100-mile pipeline and terminals system. Our pipeline
transports ammonia from production facilities in Texas and Oklahoma to terminals
in the Midwest for ultimate distribution to end-users in Iowa, Kansas,
Minnesota, Missouri, Nebraska, Oklahoma and South Dakota. The ammonia we
transport is primarily used as a nitrogen fertilizer. Nitrogen is an essential
nutrient for plant growth and is the single most important element for
maintenance of high crop yields for all grains. Unlike other primary nutrients,
however, nitrogen must be applied each year because virtually all of its
nutritional value is consumed during the growing season. Ammonia is the most
cost-effective source of nitrogen and the simplest nitrogen fertilizer. It is
also the primary feedstock for the production of upgraded nitrogen fertilizers
and chemicals.

     Although ammonia consumption peaks in the fall and early spring, ammonia
production is reasonably consistent throughout the year. Generally, storage
facilities reach their peak storage capacities during early spring, prior to
agricultural application. As a result, we experience only limited seasonal
fluctuations for transportation services on our pipeline. Our customers inject
the ammonia they produce into our pipeline, and we transport it as a liquid to
terminal facilities and storage and upgrade facilities located in the Midwest.

     Ammonia is produced by reacting natural gas with air at high temperatures
and pressures in the presence of catalysts. Because natural gas is the primary
feedstock for the production of ammonia, ammonia is typically produced near
abundant sources of natural gas. Natural gas prices were significantly higher
than historical levels between 1999 and the first six months of 2001. As a
result, our customers substantially curtailed their production of ammonia and
shipped lower volumes of ammonia on our pipeline. However, our shippers have
committed to minimum shipping agreements of an aggregate of 700,000 tons per
year through June 2005.

     Operations.  We are a common carrier transportation pipeline and terminals
company. We do not produce or trade ammonia, and we do not take title to the
ammonia we transport. Rather, we earn revenue from the following sources:

     - transportation tariffs for the use of our pipeline capacity; and

     - throughput fees at our six company-owned terminals.

                                        7
<PAGE>

     We generate approximately 94 percent of our revenue through transportation
tariffs. These tariffs are postage stamp tariffs, which means that each shipper
pays a defined rate per ton of ammonia shipped regardless of the distance that
ton of ammonia travels on our pipeline. In addition to transportation tariffs,
we also earn revenue by charging our customers for services at the six terminals
we own, including unloading ammonia from our customers' trucks to inject it into
our pipeline for shipment and removing ammonia from our pipeline to load it into
our customers' trucks.

     Facilities.  Our pipeline was the world's first common carrier pipeline for
ammonia. The main trunk line was completed in 1968. Today, it represents one of
two ammonia pipelines operating in the United States and has a maximum annual
delivery capacity of approximately 900,000 tons. Our ammonia pipeline system
originates at production facilities in Borger, Texas, Verdigris, Oklahoma and
Enid, Oklahoma and terminates in Mankato, Minnesota.

     We transport ammonia to 13 delivery points along our pipeline system. The
facilities at these points provide our customers with the ability to deliver
ammonia to distributors who sell the ammonia to farmers and to store ammonia for
future use. These facilities also provide our customers with the ability to
remove ammonia from our pipeline for distribution to upgrade facilities that
produce complex nitrogen compounds such as urea, ammonium nitrate, ammonium
phosphate and ammonium sulfate.

     Customers and Contracts.  We ship ammonia for three customers:

     - Farmland Industries, Inc., one of the largest farmer-owned cooperatives
       in the United States;

     - Agrium U.S. Inc., a subsidiary of Agrium Inc., the largest producer of
       nitrogen fertilizers in North America; and

     - Terra Nitrogen, L.P., a wholesaler of nitrogen fertilizer products.

     Each of these companies has an ammonia production facility connected to our
pipeline as well as related storage and distribution facilities along the
pipeline. The transportation contracts with our customers extend through June
2005. Our customers are obligated to ship an aggregate minimum of 700,000 tons
per year and have historically shipped an amount in excess of the required
minimum. Our customers have been shipping ammonia through our pipeline for an
average of more than 20 years.

     Each transportation contract contains a ship or pay mechanism, whereby each
customer must ship a specific minimum tonnage per year and an aggregate minimum
tonnage over the life of the contract. On July 1 of each contract year, each of
our customers nominates a tonnage that it expects to ship during the upcoming
year. This annual commitment may be equal to or greater than the contractual
minimum tonnage.

     Currently, our customers' annual commitments represent 78 percent of our
pipeline's 900,000 ton per year capacity. If a customer fails to ship its annual
commitment, that customer must pay for the pipeline capacity it did not use.

     In general, our customers have historically shipped ammonia in excess of
their annual commitments. We allow our customers to bank any ammonia shipped in
excess of their annual commitments. If a customer has previously shipped an
amount in excess of its annual commitment, the shipper may offset subsequent
annual shipment shortfalls against the excess tonnage in its bank. There are
approximately 115,000 tons in this combined bank that may be used to offset
future ship or pay obligations.

     The transportation contracts establish a fixed tariff schedule per ton of
ammonia shipped for each customer for the first five years of the contract
period. Because of the long-term nature of these contracts, the shippers receive
a volume incentive tariff per ton that decreases with increased commitments.
Since July 1, 2000, we have had the right to adjust our tariff schedule on an
annual basis pursuant to a formula contained in the contracts. The adjustment
formula takes into consideration the cost of labor, power, property taxes and
changes in the producer price index. We use the combined increase or decrease in
these factors to calculate any increases or decreases in tariffs. Any annual
adjustment is limited to a maximum increase or decrease of five percent measured
against the rate previously in effect. These tariff adjustments cannot decrease
the tariffs to rates less than those charged in 1997.

                                        8
<PAGE>

     Two of our three customers have credit ratings below investment grade. For
a further discussion of revenues from major customers and concentrations of
credit risk, refer to Note 6 of the Consolidated Financial Statements.

     Markets and Competition.  Demand for nitrogen fertilizer has typically
followed a combination of weather patterns and growth in population, acres
planted and fertilizer application rates. Because natural gas is the primary
feedstock for the production of ammonia, the profitability of our customers is
impacted by high natural gas prices. To the extent our customers are unable to
pass on higher costs to their customers, they may reduce shipments through our
pipeline.

     We compete primarily with ammonia shipped by rail carriers, but we believe
we have a distinct advantage over rail carriers because ammonia is a gas under
normal atmospheric conditions and must be either placed under pressure or cooled
to -33 degrees Celsius to be shipped or stored. Because the transportation and
storage of ammonia requires specialized handling, we believe that pipeline
transportation is the safest and most cost-effective method for transporting
bulk quantities of ammonia.

     We also compete to a limited extent in the areas served by the far northern
segment of our ammonia pipeline and terminals system with the other United
States ammonia pipeline, which originates on the Gulf Coast and transports
domestically produced and imported ammonia.

TARIFF REGULATION

  Interstate Regulation

     The Surface Transportation Board, a part of the United States Department of
Transportation, has jurisdiction over interstate pipeline transportation of
ammonia. The Surface Transportation Board succeeded the Interstate Commerce
Commission which previously regulated pipeline transportation of ammonia.

     The Surface Transportation Board is responsible for rate regulation of
pipeline transportation of commodities other than water, gas or oil. These
transportation rates must be reasonable, and a pipeline carrier may not
unreasonably discriminate among its shippers. If the Surface Transportation
Board finds that a carrier's rates violate these statutory commands, it may
prescribe a reasonable rate. In determining a reasonable rate, the Surface
Transportation Board will consider, among other factors, the effect of the rate
on the volumes transported by that carrier, the carrier's revenue needs and the
availability of other economic transportation alternatives.

     The Surface Transportation Board does not need to provide rate relief
unless shippers lack effective competitive alternatives. If the Surface
Transportation Board determines that effective competitive alternatives are not
available and a pipeline holds market power, then it must determine whether the
pipeline rates are reasonable. The Board generally applies constrained market
pricing principles in its economic analysis. Constrained market pricing provides
two alternative methodologies for examining the reasonableness of a carrier's
rates. The first approach examines a carrier's existing system to determine
whether the carrier is already earning sufficient funds to cover its costs and
provide a sufficient return on investment, or would earn sufficient funds after
eliminating unnecessary costs from specifically identified inefficiencies and
cross-subsidies in its operations. The second approach calculates the revenue
requirements that a hypothetical, new and optimally efficient carrier would need
to meet in order to serve the complaining shippers.

     Customers that protest rates in Surface Transportation Board proceedings
may use any methodology they choose that is consistent with constrained market
pricing principles. When addressing revenue adequacy, a complainant must provide
more than a single period snapshot of a carrier's costs and revenues. The
complainant must measure whether a carrier earns adequate revenues over a period
of time, as measured by a multi-period discounted cash flow analysis.

     The Surface Transportation Board has held that unreasonable discrimination
occurs when (1) there is a disparity in rates, (2) the complaining party is
competitively injured, (3) the carrier is the common source of both the
allegedly prejudicial and preferential treatment and (4) the disparity in rates
is not justified by transportation conditions.

                                        9
<PAGE>

  Intrastate Regulation

     Because in some instances we transport ammonia between two terminals in the
same state, our pipeline operations are subject to regulation by the state
regulatory authorities in Iowa, Nebraska, Oklahoma and Texas. Although the
Oklahoma Corporation Commission and the Texas Railroad Commission have the
authority to regulate our rates, the state commissions have generally not
investigated the rates or practices of ammonia pipelines in the absence of
shipper complaints.

SAFETY AND MAINTENANCE

     We monitor our marine terminals, inland terminals and ammonia pipeline and
terminals system on a regular basis to ensure reliability, safety and efficiency
of our assets. We believe that our assets have been constructed and are
maintained in all material respects in accordance with applicable federal, state
and local laws, including, where applicable, the regulations of the Department
of Transportation, and accepted industry standards.

ENVIRONMENTAL

  General

     Our operation of terminals and associated facilities in connection with the
storage and transportation of crude oil and other liquid hydrocarbons, together
with our operation of an ammonia pipeline, are subject to stringent and complex
laws and regulations governing the discharge of materials into the environment
or otherwise relating to environmental protection. As an owner or lessee and
operator of these facilities, we must comply with these laws and regulations at
the federal, state and local levels. As with the industry generally, our
compliance with existing and anticipated laws and regulations increases the cost
of planning, constructing and operating our terminals, pipeline and other
facilities. Included in our construction and operation costs are cost items
necessary to maintain or upgrade our equipment and facilities. Failure to comply
with these laws and regulations may result in the assessment of administrative,
civil and criminal penalties, imposition of remedial actions and issuance of
injunctions or construction bans or delays on ongoing operations. We believe
that our operations are in material compliance with applicable environmental
laws and regulations. However, these laws and regulations are subject to
frequent change and we cannot provide assurance that the cost to comply with
these laws and regulations in the future will not have a material adverse effect
on our financial position or results of operations.

  Indemnification

     Williams Energy Services, LLC has agreed to indemnify us for up to $15.0
million for environmental liabilities that exceed the amounts covered by the
seller indemnities and insurance coverage described below. The indemnity applies
to environmental liabilities arising from conduct prior to February 9, 2001 and
discovered within three years of February 9, 2001. Liabilities resulting from a
change in law after February 9, 2001 are excluded from this indemnity.

     In accordance with our acquisition agreement with Amerada Hess Corporation,
Hess will indemnify us for environmental and other liabilities related to the
three Gulf Coast marine terminals we acquired from them in August 1999,
including:

     - Indemnification for specified cleanup actions of pre-acquisition releases
       of hazardous substances. This indemnity is capped at a maximum of $15.0
       million. Hess, however, has no liability until the aggregate amount of
       initial losses is in excess of a $2.5 million deductible, and then Hess
       is liable only for the succeeding $12.5 million in losses. This indemnity
       will remain in effect until July 30, 2004.

     - Indemnification for already known and required cleanup actions at the
       Corpus Christi, Texas and Galena Park, Texas terminals. This indemnity
       has no limit and will remain in effect until July 30, 2014.

                                        10
<PAGE>

     - Indemnification for a variety of pre-acquisition fines and claims that
       may be imposed or asserted under the Superfund Law and federal Resource
       Conservation and Recovery Act ("RCRA") or analogous state laws. This
       indemnity is not subject to any limit or deductible amount.

     In addition to these indemnities, Hess retained liability for the
performance of corrective actions associated with a cooling tower at the Corpus
Christi, Texas terminal and a vapor recovery unit and process safety management
compliance matter at the Galena Park, Texas terminal.

     We have insurance against the first $2.5 million of environmental
liabilities related to the Hess terminals that arose prior to closing of the
acquisition from Hess, with a deductible of $0.3 million, and any environmental
liabilities in excess of $15.0 million up to an aggregate of $50.0 million.

     In connection with the acquisition of the New Haven, Connecticut marine
terminal facility acquired from Wyatt Energy, Incorporated and the acquisitions
of our inland terminals, the sellers of those terminals agreed to indemnify us
against specified environmental liabilities. We also have insurance until August
31, 2005 for up to $25.0 million of environmental liabilities for the New Haven
marine terminal facility, with a deductible of $0.3 million.

  Hazardous Substances and Wastes

     In most instances, the environmental laws and regulations affecting our
operations relate to the release of hazardous substances or solid wastes into
the water or soils, and include measures to control pollution of the
environment. For instance, the Comprehensive Environmental Response,
Compensation and Liability Act, also known as the Superfund law, and comparable
state laws impose liability, without regard to fault or the legality of the
original conduct, on certain classes of persons who are considered to be
responsible for the release of a hazardous substance into the environment. These
persons include the owner or operator of the disposal site or sites where the
release occurred and companies that disposed or arranged for the disposal of the
hazardous substances. Under the Superfund law, these persons may be subject to
joint and several liability for the costs of cleaning up the hazardous
substances that have been released into the environment, for damages to natural
resources and for the costs of certain health studies. The Superfund law also
authorizes the Environmental Protection Agency, or EPA, and in some instances,
third parties to act in response to threats to the public health or the
environment and to seek to recover from the responsible classes of persons the
costs they incur. It is not uncommon for neighboring landowners and other third
parties to file claims for personal injury and property damage allegedly caused
by hazardous substances or other pollutants released into the environment. In
the course of our ordinary operations, we may generate waste that falls within
the Superfund law's definition of a hazardous substance and as a result, we may
be jointly and severally liable under the Superfund law for all or part of the
costs required to clean up sites at which those hazardous substances have been
released into the environment.

     Our operations also generate wastes, including hazardous wastes, that are
subject to the requirements of the RCRA and comparable state statutes. We are
not currently required to comply with a substantial portion of the RCRA
requirements because our operations routinely generate only small quantities of
hazardous wastes, and we do not hold ourselves out as a hazardous waste
treatment, storage or disposal facility operator that is required to obtain a
RCRA hazardous waste permit. While RCRA currently exempts a number of wastes,
including many oil and gas exploration and production wastes, from being subject
to hazardous waste requirements, the EPA from time to time will consider the
adoption of stricter disposal standards for non-hazardous wastes. Moreover, it
is possible that additional wastes, which could include non-hazardous wastes
currently generated during operations, will in the future be designated as
hazardous wastes. Hazardous wastes are subject to more rigorous and costly
storage and disposal requirements than are non-hazardous wastes. Changes in the
regulations could have a material adverse effect on our capital expenditures or
operating expenses.

     We currently own or lease properties where hydrocarbons are being or have
been handled for many years. Although we have utilized operating and disposal
practices that were standard in the industry at the time, hydrocarbons or other
wastes may have been disposed of or released on, under or from the properties
owned or leased by us or on or under other locations where these wastes have
been taken for disposal. In addition, many
                                        11
<PAGE>

of these properties have been operated by third parties whose treatment and
disposal or release of hydrocarbons or other wastes was not under our control.
These properties and wastes disposed thereon may be subject to the Superfund
law, RCRA and analogous state laws. Under these laws, we could be required to
remove or remediate previously disposed wastes, including wastes disposed of or
released by prior owners or operators, to clean up contaminated property,
including groundwater contaminated by prior owners or operators, or to make
capital improvements to prevent future contamination.

     We are currently evaluating soil and groundwater conditions at a number of
our properties where historical operations conducted primarily by former site
owners or operators or more recent operations conducted by us may have resulted
in releases of hydrocarbons or other wastes. These investigations and possible
cleanup activities are either under consideration or already have been or will
be initiated at our petroleum products terminals in Mobile, Alabama; New Haven,
Connecticut; Doraville and South Albany, Georgia; Gibson, Louisiana; St.
Charles, Missouri; Greensboro and Selma, North Carolina; North Augusta, South
Carolina; Nashville, Tennessee; Dallas and Galena Park, Texas; and Montvale and
Richmond, Virginia. Similar operations are also being conducted at an ammonia
terminal facility in Early, Iowa and along our ammonia pipeline in Valley,
Nebraska and Noble County, Oklahoma. We expect to conduct a number of these
investigatory and cleanup activities at an estimated cost of $5.4 million, and
we have recognized a liability for that amount. Of that liability, $5.1 million
is expected to be recoverable from affiliates or third parties pursuant to
contractual requirements. In other instances, prior owners or operators of these
properties are performing or are expected to perform these activities pursuant
to contractual requirements that make these prior owners or operators
responsible for performing the activities.

  Aboveground Storage Tanks

     States in which we operate typically have laws and regulations governing
above ground tanks containing liquid substances. Generally, these laws and
regulations require that these tanks include secondary containment systems or
that the operators take alternative precautions to ensure that no contamination
results from any leaks or spills from the tanks. Although there is not currently
a federal statute dedicated to regulating these above ground tanks, there is a
possibility that a law could one day be passed in the United States. We believe
we are in material compliance with all applicable above ground storage tank laws
and regulations. As part of our assessment of facility operations, we have
identified some above ground tanks at our terminals in Charlotte and Selma,
North Carolina and Nashville, Tennessee that either are, or are suspected of
being, coated with lead-based paints. The removal and disposal of any paints
that are found to be lead-based, whenever such activities are conducted in the
future as part of our day-to-day maintenance activities, will require increased
handling by us. However, we do not expect the costs associated with this
increased handling to be significant. We believe that the future implementation
of above ground storage tank laws or regulations will not have a material
adverse effect on our financial condition or results of operations.

  Water Discharges

     Our operations can result in the discharge of pollutants, including oil.
The Oil Pollution Act was enacted in 1990 and amends provisions of the Federal
Water Pollution Control Act of 1972 or the Water Pollution Control Act and other
statutes as they pertain to prevention and response to oil spills. The Oil
Pollution Act subjects owners of facilities to strict, joint and potentially
unlimited liability for removal costs and certain other consequences of an oil
spill such as natural resource damages, where the spill is into navigable
waters, along shorelines or in the exclusive economic zone of the United States.
In the event of an oil spill from one of our facilities into navigable waters,
substantial liabilities could be imposed upon us. States in which we operate
have also enacted similar laws. Regulations have been or are being developed
under the Oil Pollution Act and comparable state laws that may also impose
additional regulatory burdens on our operations. We have determined that the
secondary containment surrounding above ground tanks at our Galena Park, Texas,
terminal requires upgrading to comply with the law, at an estimated cost of $0.1
million. We do not expect these expenditures to have a material adverse effect
on our financial condition or results of operations.

     The Federal Water Pollution Control Act imposes restrictions and strict
controls regarding the discharge of pollutants into navigable waters. This law
and comparable state laws require that permits be obtained to
                                        12
<PAGE>

discharge pollutants into state and federal waters and impose substantial
potential liability for the costs of noncompliance and damages. Where required,
we hold discharge permits that were issued under the Federal Water Pollution
Control Act or a state-delegated program, and we believe that we are in material
compliance with the terms of those permits. While we have experienced permit
discharge exceedances at our terminals in Selma, North Carolina and North
Augusta, South Carolina, we are resolving these exceedances by electing to make
capital improvements to the wastewater handling system at Selma at an estimated
cost of $0.1 million and by discontinuing wastewater discharges at the North
Augusta terminal. In addition, similar capital expenditures to improve
wastewater handling systems are expected to be made to comply with applicable
laws at our terminal in Galena Park, Texas, at an estimated cost of $0.4
million. We do not expect our compliance with existing permits and foreseeable
new permit requirements, nor any of the estimated capital expenditures to
upgrade or replace existing wastewater handling systems to have a material
adverse effect on our financial position or results of operations.

  Air Emissions

     Our operations are subject to the federal Clean Air Act and comparable
state and local laws. Under such laws, permits are typically required to emit
pollutants into the atmosphere. Amendments to the federal Clean Air Act enacted
in 1990, as well as recent or soon to be proposed changes to state
implementation plans, or SIPs, for controlling air emissions in regional,
non-attainment areas require or will require most industrial operations in the
United States to incur capital expenditures in order to meet air emission
control standards developed by the EPA and state environmental agencies. As a
result of these amendments, our facilities that emit volatile organic compounds
or nitrogen oxides are subject to increasingly stringent regulations, including
requirements that some sources install maximum or reasonably available control
technology. In addition, the amendments include an operating permit for major
sources of volatile organic compounds, which applies to some of our facilities.
We also expect that changes to the state implementation plans pertaining to air
quality in regional, non-attainment areas will have an impact on our terminals
in Doraville, Georgia and Galena Park and Dallas, Texas, possibly resulting in
the need to upgrade air pollution control equipment. We believe that we
currently hold or have applied for all necessary air permits and that we are in
material compliance with applicable air laws and regulations. Nevertheless, we
anticipate making capital improvements involving modification or repair of roofs
and seals on certain of our tanks at Galena Park, Texas and Corpus Christi,
Texas to comply with applicable law, at a total estimated cost of $0.5 million.
In addition, we previously received a notice of violation for air permitting
issues relating to operation of a vapor recovery unit at our terminal in Galena
Park, Texas. The alleged violation commenced while the property was operated by
Hess and continued after The Williams Companies, Inc.'s acquisition of the
property. In order to optimize our vapor recovery compliance, we have acquired a
vapor combustion unit which is in the final stages of testing. If any penalties
are imposed on us as a result of the assessed notice of violation that relates
to ownership or operation of the vapor recovery unit, then Hess has agreed to
reimburse us for costs arising prior to December 19, 2000. Although we can give
no assurances, we believe implementation of the 1990 federal Clean Air Act
Amendments and any changes to the SIPs pertaining to air quality in regional
non-attainment areas will not have a material adverse effect on our financial
condition or results of operations.

EMPLOYEE SAFETY

     We are subject to the requirements of the federal Occupational Safety and
Health Act, or OSHA, and comparable state statutes that regulate the protection
of the health and safety of workers. In addition, the OSHA hazard communication
standard requires that certain information be maintained about hazardous
materials used or produced in operations and that this information be provided
to employees, state and local government authorities and citizens. We believe
that our operations are in material compliance with OSHA requirements, including
general industry standards, record keeping requirements and monitoring of
occupational exposure to regulated substances.

                                        13
<PAGE>

TITLE TO PROPERTIES

     Substantially all of our pipelines are constructed on rights-of-way granted
by the apparent record owners of this property. The rights-of-way for our
ammonia pipelines are shared with other pipelines owned by affiliates of The
Williams Companies, Inc. In some instances these rights-of-way are revocable at
the election of the grantor. In many instances, lands over which rights-of-way
have been obtained are subject to prior liens which have not been subordinated
to the right-of-way grants. In some cases, not all of the apparent record owners
have joined in the right-of-way grants. We have obtained permits from public
authorities to cross over or under, or to lay facilities in or along water
courses, county roads, municipal streets and state highways, and in some
instances, these permits are revocable at the election of the grantor. We have
also obtained permits from railroad companies to cross over or under lands or
rights-of-way, many of which are also revocable at the grantor's election. In
some cases, property for pipeline purposes was purchased in fee. We have the
right of eminent domain to acquire rights-of-way and lands necessary for our
ammonia pipeline. However, the original owner of the pipeline may not have
concluded eminent domain proceedings for some rights-of-way.

     Some of the leases, easements, rights-of-way, permits and licenses
transferred to us, upon the completion of our initial public offering in
February 2001, required the consent of the grantor to transfer these rights,
which in some instances is a governmental entity. We have obtained substantially
all required third-party consents, permits and authorizations sufficient for the
transfer to us of the assets necessary for us to operate our business in all
material respects. Failure to obtain such consents, permits or authorizations
should not have a material adverse effect on the operation of our business.

     We have sufficient title to all of our assets subject to the limitations
described in this section, or we are entitled to indemnification from affiliates
of The Williams Companies, Inc. for right-of-way defects or failures under the
omnibus agreement. Although title to these properties is subject to encumbrances
in some cases, such as customary interests generally retained in connection with
acquisition of real property, liens related to environmental liabilities
associated with historical operations, liens for current taxes and other burdens
and minor easements, restrictions and other encumbrances to which the underlying
properties were subject at the time of acquisition by our predecessor or us,
none of these burdens should materially detract from the value of our properties
or from our interest in them or materially interfere with their use in the
operation of our business.

EMPLOYEES

     To carry out our operations, our general partner or its affiliates employ
approximately 195 people who provide direct support to our operations. Other
than at our Galena Park marine terminal facility, none of these employees are
represented by labor unions. The employees at our Galena Park marine terminal
facility are currently represented by a union, but have indicated their
unanimous desire to terminate their union affiliation. Nevertheless, the
National Labor Relations Board has ordered us to bargain with the union as the
exclusive collective bargaining representative of the employees at the facility.
We are appealing this decision. If our appeal is unsuccessful, we will bargain
with the union as ordered by the National Labor Relations Board. Our general
partner considers its employee relations to be good.

FORWARD-LOOKING STATEMENTS

     Certain matters discussed in this report, excluding historical information,
include forward-looking statements -- statements that discuss our expected
future results based on current and pending business operations. We make 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 we
believe these forward-looking statements are based on reasonable assumptions,
statements made regarding future results are subject to numerous assumptions,
uncertainties and risks that may cause future results to be materially different
from the results stated or implied in this document.

                                        14
<PAGE>

     The following are among the important factors that could cause actual
results to differ materially from any results projected, forecasted, estimated
or budgeted:

     - Changes in demand for refined petroleum products that we store and
       distribute;

     - Changes in demand for storage in our petroleum product terminals;

     - Changes in the throughput on petroleum product pipelines owned and
       operated by third parties and connected to our petroleum product
       terminals;

     - Loss of Williams Energy Marketing & Trading and/or Williams Refining &
       Marketing, L.L.C. as customers;

     - Loss of one or all of our three customers on our ammonia pipeline and
       terminals system;

     - An increase in the price of natural gas, which increases ammonia
       production costs and reduces the amount of ammonia transported through
       our ammonia pipeline and terminals system;

     - Changes in the federal government's policy regarding farm subsidies,
       which negatively impact the demand for ammonia and reduce the amount of
       ammonia transported through our ammonia pipeline and terminals system;

     - An increase in the competition our petroleum products terminals and
       ammonia pipeline and terminals system encounter;

     - The occurrence of an operational hazard or unforeseen interruption for
       which we are not adequately insured;

     - Changes in general economic conditions in the United States;

     - Changes in laws and regulations to which we are subject, including tax,
       environmental and employment laws and regulations;

     - The cost and effects of legal and administrative claims and proceedings
       against us or our subsidiaries;

     - The ability to raise capital in a cost-effective way;

     - The effect of changes in accounting policies;

     - The ability to manage rapid growth;

     - The ability to control costs;

     - Supply disruption; and

     - Global and domestic economic repercussions from terrorist activities and
       the government's response thereto.

(d) FINANCIAL INFORMATION ABOUT GEOGRAPHICAL AREAS

     We have no revenue or segment profit or loss attributable to international
activities.

ITEM 2. PROPERTIES

     See Item 1(c) for a description of the locations and general character of
our material properties.

ITEM 3. LEGAL PROCEEDINGS

     We are a party to various legal actions that have arisen in the ordinary
course of our business. We do not believe that the resolution of these matters
will have a material adverse effect on our financial condition or results of
operations.

                                        15
<PAGE>

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of the unitholders, through
solicitation of proxies or otherwise, during the fiscal year covered by this
report.

                                    PART II

ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Our common units are listed on the New York Stock Exchange under the symbol
"WEG". At the close of business on February 28, 2002, we had 51 holders of
record of our common units. The high and low closing sales price ranges
(composite transactions) and distributions declared by quarter for 2001 since
the close of our initial public offering on February 9, 2001 are as follows:

<Table>
<Caption>
                                                                       2001
                                                         --------------------------------
QUARTER                                                   HIGH     LOW     DISTRIBUTIONS*
-------                                                  ------   ------   --------------
<S>                                                      <C>      <C>      <C>
1st....................................................  $31.00   $23.00       $.2920
2nd....................................................  $33.42   $28.45       $.5625
3rd....................................................  $40.40   $29.40       $.5775
4th....................................................  $44.00   $37.00       $.5900
</Table>

---------------

* Distributions declared associated with each respective quarter. Distributions
  were declared and paid within 45 days following the close of each quarter. The
  distribution for the first quarter of 2001 was pro-rated for the period from
  February 10, 2001 through March 31, 2001.

     We have also issued subordinated units, all of which are held by two
affiliates of our general partner, for which there is no established public
trading market.

     During the subordination period, the holders of our common units are
entitled to receive each quarter a minimum quarterly distribution of $0.525 per
unit ($2.10 annualized) prior to any distribution of available cash to holders
of our subordinated units. The subordination period is defined generally as the
period that will end on the first day of any quarter beginning after December
31, 2005 if (1) we have distributed at least the minimum quarterly distribution
on all outstanding units with respect to each of the immediately preceding three
consecutive, non-overlapping four-quarter periods and (2) our adjusted operating
surplus, as defined in our partnership agreement, during such periods equals or
exceeds the amount that would have been sufficient to enable us to distribute
the minimum quarterly distribution on all outstanding units on a fully diluted
basis and the related distribution on the 2 percent general partner interest
during those periods. In addition, one-quarter of the subordinated units may
convert to common units on a one-for-one basis after December 31, 2003 and
one-quarter of the subordinated units may convert to common units on a
one-for-one basis after December 31, 2004 if we meet the tests set forth in our
partnership agreement. If the subordination period ends, the rights of the
holders of subordinated units will no longer be subordinated to the rights of
the holders of common units and the subordinated units may be converted into
common units.

     During the subordination period, our cash is distributed first 98 percent
to the holders of common units and 2 percent to our general partner until there
has been distributed to the holders of common units an amount equal to the
minimum quarterly distribution and arrearages in the payment of the minimum
quarterly distribution on the common units for any prior quarter. Any additional
cash is distributed 98 percent to the holders of subordinated units and 2
percent to our general partner until there has been distributed to the holders
of subordinated units an amount equal to the minimum quarterly distribution.

                                        16
<PAGE>

     Our general partner is entitled to incentive distributions if the amount we
distribute with respect to any quarter exceeds specified target levels shown
below:

<Table>
<Caption>
                                                               PERCENTAGE OF DISTRIBUTIONS
                                                              -----------------------------
QUARTERLY DISTRIBUTION AMOUNT PER UNIT                        UNITHOLDERS   GENERAL PARTNER
--------------------------------------                        -----------   ---------------
<S>                                                           <C>           <C>
Up to $.578.................................................      98               2
Above $.578 up to $.656.....................................      85              15
Above $.656 up to $.788.....................................      75              25
Above $.788.................................................      50              50
</Table>

     We must distribute all of our cash on hand at the end of each quarter, less
reserves established by our general partner. We refer to this cash as available
cash as defined in our partnership agreement. The amount of available cash may
be greater than or less than the minimum quarterly distribution. We currently
pay quarterly cash distributions of $0.59 per unit. In general, we intend to
continue to pay comparable cash distributions in the future assuming no adverse
change in our operations, economic conditions and other factors. We cannot
guarantee that future distributions, if any, will continue at such levels.

USE OF PROCEEDS

     On February 5, 2001, our Registration Statement on Form S-1 (Registration
No. 333-48866) with the Securities and Exchange Commission became effective. The
managing underwriter for this transaction was Lehman Brothers Inc. Under the
registration statement, we issued 5,679,694 common units and 5,679,694
subordinated units, of which 1,679,694 common units and all of the subordinated
units were issued to affiliates of our general partner.

     The closing date of our initial public offering was February 9, 2001, and
on that date we sold 4,000,000 common units to the public at a price of $21.50
per unit, or $86.0 million. Underwriter commissions on this sale were $5.6
million. In addition, concurrent with the closing of the initial public
offering, we borrowed $90.1 million under a credit facility with Bank of America
and incurred $0.9 million of debt issuance costs. Subsequent to the initial
public offering, the underwriters exercised in full their over-allotment option
and purchased an additional 600,000 common units for $12.9 million. Underwriter
commissions on this sale were $0.8 million. The aggregate offering price of the
common units (including the over-allotment) was $98.9 million.

     Net proceeds from the sale of common units, after underwriter commissions,
were $92.5 million, and net proceeds from the borrowings under the credit
facility with Bank of America were $89.2 million, for total net proceeds of
$181.7 million. We used $3.1 million of the net proceeds to pay legal,
accounting and other professional services costs associated with the initial
public offering. Another $12.1 million of the proceeds was used to redeem
600,000 common units from Williams Energy Services, LLC, an affiliate of our
general partner, to reimburse it for capital expenditures related to our assets.
The remaining proceeds of $166.5 million were used to reduce affiliate note
balances with Williams.

                                        17
<PAGE>

ITEM 6.

                     SELECTED FINANCIAL AND OPERATING DATA
        (IN THOUSANDS, EXCEPT OPERATING STATISTICS AND PER UNIT AMOUNTS)

     The historical financial information presented below for Williams Energy
Partners L.P. was derived from our audited consolidated financial statements as
of December 31, 2001 and 2000 and for the three years ended December 31, 2001.
These financial data are an integral part of, and should be read in conjunction
with, the consolidated financial statements and notes thereto. All other amounts
have been prepared from our financial records. Information concerning
significant trends in the financial condition and results of operations is
contained in Management's Discussion and Analysis of Financial Condition and
Results of Operations on pages 20 through 33 of this report.

<Table>
<Caption>
                                                         YEAR ENDED DECEMBER 31,
                                           ---------------------------------------------------
                                             2001       2000       1999       1998      1997
                                           --------   --------   ---------   -------   -------
<S>                                        <C>        <C>        <C>         <C>       <C>
INCOME STATEMENT DATA:
Operating revenues.......................  $ 86,054   $ 72,492   $  44,388   $20,846   $19,526
Operating expenses.......................    37,314     33,489      18,635     7,618     7,176
Depreciation and amortization............    11,748      9,333       4,610     1,190     1,100
General and administrative...............     8,955     11,963       5,458     3,950     4,603
                                           --------   --------   ---------   -------   -------
     Total costs and expenses............  $ 58,017   $ 54,785   $  28,703   $12,758   $12,879
                                           --------   --------   ---------   -------   -------
Operating profit.........................  $ 28,037   $ 17,707   $  15,685   $ 8,088   $ 6,647
Interest expense (income)(a).............     6,932     12,827       4,775    (1,371)   (1,149)
Minority interest expense................       229         --          --        --        --
Other (income) expense, net..............    (1,058)        33          --        27       (41)
                                           --------   --------   ---------   -------   -------
Income before income taxes...............  $ 21,934   $  4,847   $  10,910   $ 9,432   $ 7,837
Income taxes.............................       187      1,842       4,144     3,589     2,920
                                           --------   --------   ---------   -------   -------
Net income...............................  $ 21,747   $  3,005   $   6,766   $ 5,843   $ 4,917
                                           ========   ========   =========   =======   =======
Basic and diluted net income per limited
  partner unit...........................  $   1.87
                                           ========
BALANCE SHEET DATA:
Working capital..........................  $  4,098   $  7,380   $   9,240   $24,997   $24,890
Working capital less affiliate note
  receivable(b)..........................     4,098      7,380       9,240       203     1,262
Total assets.............................   399,444    318,505     283,339    73,002    65,316
Long-term debt...........................   139,500         --          --        --        --
Affiliate long-term note payable(b)......        --    226,188     197,165        --        --
Partners' capital........................   224,910     69,856      66,851    60,085    54,242
CASH FLOW DATA:
Net cash flow provided by (used in):
     Operating activities................  $ 42,508   $ 15,635   $   5,659   $ 8,844   $ 9,279
     Investing activities................   (63,270)   (41,749)   (237,733)   (8,844)   (9,279)
     Financing activities................    34,593     26,114     232,074        --        --
Cash distributions declared per
  unit(c)................................  $   2.02
OTHER DATA:
Operating margin:
  Petroleum product terminals............  $ 38,240   $ 31,286   $  17,141   $ 3,599   $ 3,568
  Ammonia pipeline and terminals
     system..............................    10,500      7,717       8,612     9,629     8,782
EBITDA(d)................................    40,614     27,007      20,295     9,251     7,788
Maintenance capital......................     9,211      7,474       2,236     1,666     1,472
Maintenance capital to be reimbursed to
  Partnership by affiliate...............    (3,929)        --          --        --        --
</Table>

                                        18
<PAGE>

<Table>
<Caption>
                                                         YEAR ENDED DECEMBER 31,
                                           ---------------------------------------------------
                                             2001       2000       1999       1998      1997
                                           --------   --------   ---------   -------   -------
<S>                                        <C>        <C>        <C>         <C>       <C>
OPERATING STATISTICS:
  Petroleum product terminals:
     Marine terminal average storage
       capacity utilized per month
       (million barrels)(e)..............      15.7       14.7        10.1       N/A       N/A
     Marine terminal throughput (million
       barrels)(f).......................      11.5        3.7         N/A       N/A       N/A
     Inland terminal throughput (million
       barrels)..........................      56.7       56.1        58.1      26.8      21.3
  Ammonia pipeline and terminals system:
     Volume shipped (thousand tons)......       763        713         795       896       893
</Table>

---------------

(a)  From 1999 to February 9, 2001, interest income and expense was allocated to
     the terminal and ammonia operations based upon their actual affiliate note
     receivable or payable balance. After February 9, 2001, interest expense is
     based on our outstanding debt balance.

(b)  Management believes that excluding the affiliate note receivable, but not
     the affiliate accounts receivable, from working capital provides a more
     appropriate comparative representation of working capital. The affiliate
     note receivable and payable result from our long-term involvement in
     Williams' cash management program. The notes were due on demand; however,
     in February 2001, we borrowed $90.1 million under a credit facility, which
     expires in February 2004 and issued 4,000,000 common units in our
     Partnership in an initial public offering for net proceeds, after
     underwriter commissions, of $80.4 million. An additional 600,000 common
     units were sold subsequent to the initial public offering when the
     underwriters exercised their over-allotment option. Net proceeds of $12.1
     million from this sale were used to redeem 600,000 common units held by
     Williams Energy Services, LLC to reimburse it for capital expenditures
     related to our assets. The remaining affiliate note payable was contributed
     to us as a capital contribution by an affiliate of Williams. As a result,
     the affiliate note payable at December 31, 2000 and 1999, have been
     classified as long-term.

(c)  Cash distributions declared for 2001 include a pro-rated distribution for
     the first quarter which included the period from February 10, 2001 through
     March 31, 2001. The cash distribution associated with the fourth quarter of
     2001 was declared on January 22, 2002 and paid on February 14, 2002.

(d)  EBITDA is defined as earnings before interest expense, income taxes and
     depreciation and amortization expense.

(e)  For the year ended December 31, 1999, represents the average storage
     capacity utilized per month for the Gulf Coast marine terminals for the
     five months that we owned these assets in 1999. For the year ended December
     31, 2000, represents the twelve month average storage capacity utilized for
     the Gulf Coast facilities (11.8 million barrels) and the four months that
     we owned the New Haven, Connecticut facility in 2000 (2.9 million barrels).
     For the year ended December 31, 2001, represents the average storage
     capacity utilized for the Gulf Coast facilities (12.7 million barrels) and
     the New Haven, Connecticut facility (3.0 million barrels).

(f)  For the year ended December 31, 2000, represents activity at the New Haven,
     Connecticut facility, which was acquired in September 2000. For the year
     ended December 31, 2001, represents a full year of activity for the New
     Haven facility (9.3 million barrels) and two months of activity at the
     Gibson, Louisiana facility (2.2 million barrels), which was acquired on
     October 31, 2001.

                                        19
<PAGE>

ITEM 7.

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

     Williams Energy Partners L.P. is a Delaware limited partnership formed by
The Williams Companies, Inc. in August 2000 to own, operate and acquire a
diversified portfolio of complementary energy assets. We are principally engaged
in the storage, transportation and distribution of refined petroleum products
and ammonia. Our current asset portfolio consists of:

     - five marine terminal facilities;

     - 25 inland terminals (some of which are partially owned); and

     - an ammonia pipeline and terminals system.

     Most of these assets were acquired and owned by several wholly-owned
subsidiaries of The Williams Companies, Inc. prior to our initial public
offering ("IPO"). Upon the closing of our initial public offering on February 9,
2001, these assets were transferred to Williams Energy Partners L.P., including
the related liabilities. The following discussion has been prepared as if the
assets were operated as a stand-alone business throughout the periods presented.

OVERVIEW

     Our marine terminal facilities, which are large product storage facilities,
generate revenues primarily from fees that we charge customers for storage and
throughput services. Our inland terminals earn revenues primarily from fees that
we charge based on the volumes of refined petroleum products distributed from
our terminals. Our inland terminals also earn ancillary revenues from injecting
additives into gasoline and jet fuel, from filtering jet fuel and from rental
income. Also included in ancillary revenues is the gain or loss resulting from
differences in metered-versus-physical volumes of refined petroleum products
received at our terminals. Our ammonia pipeline and terminals system earns the
majority of its revenue from transportation tariffs that we charge for
transporting ammonia through our pipeline.

     Operating costs and expenses we incur in our marine and inland terminals
are principally fixed costs related to routine maintenance as well as field and
support personnel. Other costs, including fuel and power, fluctuate with storage
capacity or throughput levels. Generally, most of the operating costs for our
ammonia pipeline and terminals system fluctuate with the volume of ammonia
transported through our pipeline.

     The Williams Companies, Inc. allocates both indirect and direct general and
administrative expenses to its subsidiaries. Indirect expenses, including legal,
accounting, treasury, engineering, information technology and other corporate
services, are based on a calculation that compares a combination of operating
margins, payroll costs and property, plant and equipment to The Williams
Companies, Inc. and its subsidiaries. Historically, the amount of indirect
general and administrative expenses allocated to us increased as the relative
size of our operations compared to The Williams Companies, Inc.'s operations
increased. Direct expenses allocated by The Williams Companies, Inc. are
primarily salaries and benefits of employees, officers and directors associated
with the business activities of the subsidiary. We will reimburse our general
partner and its affiliates for indirect and direct expenses they incur on our
behalf. We agreed with our general partner, subject to future acquisitions or
other changes in the business, that the general and administrative expenses to
be reimbursed will not exceed $6.0 million for 2001, excluding expenses
associated with the Partnership's Long-Term Incentive Plan, even though the
direct and allocated general and administrative costs incurred by the general
partner were significantly higher. As a result of the acquisitions made during
2001, the amount of general and administrative expenses charged to us increased
to $6.3 million. Including the 7 percent escalation amount, the annual general
and administrative expense charge increased to $6.7 million beginning in January
2002.

                                        20
<PAGE>

     We have little direct exposure to commodity price fluctuations since we do
not trade commodities. However, our operations can be indirectly affected by
overall price trends for the products we handle. During periods when the price
of a product is lower today than the price available through the forward pricing
market, the market for that product is said to be in "contango." A contango
market is favorable to our marine terminal facilities because this market
condition incentivizes customers to store product in the near term to take
advantage of expected higher future prices. Conversely, when the price of a
product today is higher than the price available through the forward pricing
market, the market is said to be "backwardated." In a backwardated market,
customers are less likely to store product because market conditions incentivize
them to sell as much product as possible to take advantage of higher current
prices. The forward pricing market for petroleum products became backwardated in
the second quarter of 1999 and remained so through second quarter 2001,
contributing to reduced storage revenues during that time. The market reversed
to contango during the latter half of 2001 and remained so through 2001,
contributing to increased storage revenues. We cannot predict whether the
current contango market will continue.

ACQUISITION HISTORY

     We are principally engaged in the storage, transportation and distribution
of refined petroleum products and ammonia. We materially increased our
operations through a series of transactions, including:

     - in December 2001, the acquisition of a natural gas liquids pipeline in
       Illinois from Aux Sable Liquid Products L.P.;

     - in October 2001, the acquisition of one marine crude oil terminal
       facility located in Gibson, Louisiana from Geonet Gathering, Inc.;

     - in June 2001, the acquisition of two inland refined petroleum product
       terminals in Little Rock, Arkansas from TransMontaigne, Inc.;

     - in April 2001, the acquisition of a refined petroleum product pipeline
       located in Dallas, Texas from Equilon Pipeline Company LLC;

     - in September 2000, the acquisition of one marine refined petroleum
       product terminal facility located in New Haven, Connecticut from Wyatt
       Energy, Incorporated;

     - in March 2000, the acquisition of a 50.0 percent ownership interest in
       one inland refined petroleum product terminal in Southlake, Texas from
       CITGO Petroleum Corporation;

     - in August 1999, the acquisition of three marine refined petroleum product
       terminal facilities, located in Galena Park and Corpus Christi, Texas and
       Marrero, Louisiana from Amerada Hess Corporation;

     - in February 1999, the acquisition of an additional 10.0 percent interest
       in eight inland refined petroleum product terminals located in Georgia,
       North Carolina, South Carolina, Tennessee and Virginia from Murphy Oil
       USA, Inc., which increased our ownership percentage in these terminals to
       78.9 percent; and

     - in January 1999, the acquisition of 12 inland refined petroleum product
       terminals, located in Alabama, Florida, Mississippi, North Carolina,
       Ohio, South Carolina and Tennessee from Amoco Oil Company.

                                        21
<PAGE>

RESULTS OF OPERATIONS

  Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

  FINANCIAL HIGHLIGHTS

<Table>
<Caption>
                                                               YEAR ENDED
                                                              DECEMBER 31,
                                                              -------------
                                                              2001    2000
                                                              -----   -----
                                                               (MILLIONS)
<S>                                                           <C>     <C>
Revenues:
  Petroleum product terminals...............................  $71.5   $60.8
  Ammonia pipeline and terminals system.....................   14.6    11.7
                                                              -----   -----
     Total revenues.........................................   86.1    72.5
Operating expenses:
  Petroleum product terminals...............................   33.3    29.5
  Ammonia pipeline and terminals system.....................    4.0     4.0
                                                              -----   -----
     Total operating expenses...............................   37.3    33.5
                                                              -----   -----
     Total operating margin.................................  $48.8   $39.0
                                                              =====   =====
</Table>

  OPERATING STATISTICS

<Table>
<S>                                                           <C>     <C>
Petroleum product terminals:
  Marine terminal facilities:
     Average storage capacity utilized per month (barrels in
      millions)(a)..........................................   15.7    14.7
     Throughput (barrels in millions)(b)....................   11.5     3.7
  Inland terminals:
     Throughput (barrels in millions).......................   56.7    56.1
Ammonia pipeline and terminals system:
  Volume shipped (tons in thousands)........................    763     713
</Table>

---------------

(a)  For the year ended December 31, 2000, represents the twelve-month average
     storage capacity utilized for the Gulf Coast marine terminal facilities
     (11.8) and the four months that we owned the New Haven, Connecticut
     facility in 2000 (2.9). For the year ended December 31, 2001, represents
     the average storage capacity utilized for the Gulf Coast facilities (12.7)
     and the New Haven facility (3.0).

(b)  For the year ended December 31, 2000, represents four months of activity at
     the New Haven, Connecticut facility, which was acquired in September 2000.
     For the year ended December 31, 2001, represents a full year of activity at
     the New Haven facility (9.3) and two months of activity at the Gibson,
     Louisiana facility (2.2), which was acquired on October 31, 2001.

     Our combined revenues for the year ended December 31, 2001 were $86.1
million compared to $72.5 million for the year ended December 31, 2000, an
increase of $13.6 million, or 19 percent. This increase was a result of:

     - an increase in petroleum product terminals revenues of $10.7 million, or
       18 percent, due to the following:

      - an increase in the marine terminal facilities revenues of $11.2 million,
        from $44.1 million to $55.3 million. This increase reflects increased
        volumes as a result of our acquisitions of the New Haven, Connecticut
        facility in September 2000 and the Gibson, Louisiana facility in October
        2001. In addition, the increase was due to a 0.9 million barrel per
        month higher utilization at our Gulf Coast marine facilities due to an
        improved marketing environment. Included in 2001 revenue is a $0.5
        million decrease from $9.9 million in 2000 to $9.4 million in 2001 from
        Williams Energy Marketing & Trading, an affiliate of our general
        partner, which utilizes our facilities in connection with their trading
        business; and

                                        22
<PAGE>

      - a decrease in inland terminal revenues of $0.5 million, from $16.7
        million to $16.2 million primarily due to the December 2000 expiration
        of a customer's contractual commitment to utilize a specific amount of
        throughput capacity. The customer contract that expired was executed in
        January 1999 in conjunction with the acquisition of 12 inland terminals.
        These revenue decreases were partially offset by additional revenues
        from the acquisition of two inland terminals in Little Rock, Arkansas on
        June 30, 2001. Included in this revenue is a $1.0 million decrease from
        $7.5 million in 2000 to $6.5 million in 2001 from Williams Refining &
        Marketing and Williams Energy Marketing & Trading; affiliates of our
        general partner, which utilize our facilities in connection with their
        trading business;

     - an increase in ammonia pipeline and terminals system revenues of $2.9
       million, or 25 percent. Part of the increase is due to a $1.3 million
       throughput deficiency billing resulting from a shipper not meeting its
       minimum annual throughput commitment for the contract year ended June
       2001. However, favorable conditions were experienced primarily during the
       fourth quarter of 2001 for the application of ammonia, resulting in a
       50,000 ton, or 7 percent, increase in pipeline volume shipped compared to
       2000. Unusually warm weather during the fall season resulted in higher
       demand for ammonia application on agricultural fields. In addition, the
       price of natural gas, the primary component for the production of
       ammonia, declined to more historical levels, resulting in our customers
       electing to produce and ship more ammonia through our pipeline to meet
       increased demand and replenish inventories. Tariffs also increased by
       $0.71 per ton, from a weighted-average tariff of $15.50 per ton for 2000
       compared to a tariff of $16.21 per ton for 2001. The increase in the
       weighted-average tariff resulted from the annual mid-year indexing
       adjustments allowed under the transportation agreements.

     Operating expenses for the year ended December 31, 2001 were $37.3 million
compared to $33.5 million for the year ended December 31, 2000, an increase of
$3.8 million, or 11 percent. This increase was a result of:

     - an increase in petroleum product terminals expenses of $3.8 million, or
       13 percent, due to:

      - an increase in marine terminal facilities expenses of $3.0 million, from
        $21.2 million to $24.2 million, primarily due to the acquisition and
        assimilation of the New Haven, Connecticut facility which was acquired
        in September 2000 and the Gibson, Louisiana facility which was acquired
        in late October 2001. Expenses at the Gulf Coast facilities increased
        slightly due to higher utility costs, partially offset by lower
        environmental and maintenance expenses; and

      - an increase in inland terminal expenses of $0.8 million, from $8.3
        million to $9.1 million. Expenses primarily increased due to the
        acquisition of the Little Rock, Arkansas terminals in June 2001 as well
        as increased property taxes at some of our other inland terminal
        locations;

     - ammonia pipeline and terminals system operating costs were unchanged, as
       reduced property taxes offset slightly higher environmental accruals.

     Depreciation expense for the year ended December 31, 2001 was $11.7 million
compared to $9.3 million for the year ended December 31, 2000, an increase of
$2.4 million, or 26 percent. This increase primarily resulted from a full year
of depreciation related to the New Haven, Connecticut marine facility acquired
in September 2000, the acquisitions of the two Little Rock, Arkansas inland
terminals in June 2001 and the Gibson, Louisiana marine facility in October
2001.

     General and administrative expenses for the year ended December 31, 2001
were $9.0 million compared to $12.0 million for the year ended December 31,
2000, a decrease of $3.0 million, or 25 percent. This decrease is a result of
the general and administrative expense limit of $6.0 million per year
established in the Omnibus Agreement at the time of the initial public offering.
General and administrative expense for the current year includes the established
limit plus additional general and administrative costs associated with
businesses acquired during 2001 and incentive compensation expenses related to
the Partnership's performance. Costs associated with the Long-Term Incentive
Plan were $2.0 million in 2001 and are specifically excluded from the $6.0
million annual general and administrative expense. The limit on general and
administrative expense that can be charged by our general partner to the
Partnership will continue to be adjusted in the future to

                                        23
<PAGE>

reflect inflation and additional direct general and administrative expenses
associated with completed acquisitions.

     Interest expense for the year ended December 31, 2001 was $6.9 million
compared to $12.8 million for the year ended December 31, 2000. The decline in
interest was primarily related to the partial payment and cancellation of an
affiliate note in connection with the closing of the initial public offering of
Williams Energy Partners on February 9, 2001, and lower interest rates.
Concurrent with the closing of our offering, we borrowed $90.1 million under our
term loan facility and revolving credit facility. At the end of 2001, $90.0
million was still outstanding under the term loan as well as $49.5 million under
the revolving credit facility due to the acquisition of the Little Rock,
Arkansas terminals and the Gibson, Louisiana facility.

     We do not pay income taxes because we are a partnership. We based our
income tax provision for the pre-initial public offering earnings upon the
effective income tax rate for The Williams Companies, Inc. for those periods of
38.0 percent. The effective income tax rate exceeds the U.S. federal statutory
income tax rate primarily due to state income taxes.

     Net income for the year ended December 31, 2001 was $21.7 million compared
to $3.0 million for the year ended December 31, 2000, an increase of $18.7
million, or 623 percent. Our operating margin increased by $9.8 million during
the period, primarily as a result of the acquisitions of the New Haven, Little
Rock and Gibson terminal facilities. Operating margin further increased due to
enhanced utilization of our Gulf Coast marine facilities and increased revenues
from our ammonia pipeline and terminals system. While depreciation increased by
$2.4 million, general and administrative expenses and interest declined by $8.9
million. In addition, other income of $1.0 million was reported to recognize the
gain on the sale of the Meridian, Mississippi inland terminal in October 2001.
Minority interest expense increased by $0.2 million but income taxes declined by
$1.6 million as a result of the Partnership not paying taxes after the initial
public offering closing on February 9, 2001.

  Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

  FINANCIAL HIGHLIGHTS

<Table>
<Caption>
                                                               YEAR ENDED
                                                              DECEMBER 31,
                                                              -------------
                                                              2000    1999
                                                              -----   -----
                                                               (MILLIONS)
<S>                                                           <C>     <C>
Revenues:
  Petroleum product terminals...............................  $60.8   $32.3
  Ammonia pipeline and terminals system.....................   11.7    12.1
                                                              -----   -----
     Total revenues.........................................   72.5    44.4
Operating expenses:
  Petroleum product terminals...............................   29.5    15.1
  Ammonia pipeline and terminals system.....................    4.0     3.5
                                                              -----   -----
     Total operating expenses...............................   33.5    18.6
                                                              -----   -----
     Total operating margin.................................  $39.0   $25.8
                                                              =====   =====
</Table>

  OPERATING STATISTICS

<Table>
<S>                                                           <C>     <C>
Petroleum product terminals:
  Marine terminal facilities:
     Average storage capacity utilized per month (barrels in
      millions)(a)..........................................   14.7    10.1
     Throughput (barrels in millions)(b)....................    3.7     N/A
  Inland terminals:
     Throughput (barrels in millions).......................   56.1    58.1
Ammonia pipeline and terminals system:
  Volume shipped (tons in thousands)........................    713     795
</Table>

---------------

(a)  For the year ended December 31, 1999, represents the average storage
     capacity utilized per month for the Gulf Coast marine terminal facilities
     for the five months that we owned these assets in 1999. For the year

                                        24
<PAGE>

     ended December 31, 2000, represents the twelve-month average storage
     capacity utilized for the Gulf Coast facilities (11.8) and the four months
     that we owned the New Haven, Connecticut facility in 2000 (2.9).

(b)  Represents four months of activity at the New Haven, Connecticut facility,
     which was acquired in September 2000.

     Our combined revenues for the year ended December 31, 2000 were $72.5
million compared to $44.4 million for the year ended December 31, 1999, an
increase of $28.1 million, or 63 percent. This increase was a result of:

     - an increase in petroleum product terminals revenues of $28.5 million, or
       88 percent, due to the following:

      - an increase in the marine terminal facilities revenues of $28.3 million,
        from $15.8 million to $44.1 million. This increase reflects increased
        volumes as a result of our acquisition of the Gulf Coast facilities in
        August 1999, a 1.7 million barrel per month increase in utilization of
        the Gulf Coast facilities and the acquisition of the New Haven,
        Connecticut facility in September 2000. Slightly offsetting these
        increases was a storage revenue rate decline at the Gulf Coast
        facilities of approximately $.015 per barrel as a result of a revenue
        deficiency billing associated with the purchase of the Gulf Coast
        terminal facilities from Amerada Hess ending in July 2000. Included in
        the 2000 revenue is a $7.5 million increase from $2.4 million in 1999 to
        $9.9 million in 2000 from Williams Energy Marketing & Trading, an
        affiliate of our general partner, which utilizes our facilities in
        connection with its trading business; and

      - an increase in inland terminal revenues of $0.2 million, from $16.5
        million to $16.7 million, as increased ancillary revenues more than
        offset reduced throughput revenues resulting from a decline in
        throughput volumes of 2.0 million barrels. Our throughput volume
        decreased primarily because of the gradual reduction, beginning in
        January 2000, of a customer's contractual commitment to utilize a
        specific amount of throughput capacity. This contract was entered into
        in January 1999 in connection with our acquisition of 12 inland
        terminals. This volume reduction was partially offset by a volume
        increase resulting from the Southlake, Texas terminal acquisition in
        March 2000 and increased marketing activity by Williams Energy Marketing
        & Trading. Included in this revenue is a $3.0 million increase from $4.5
        million in 1999 to $7.5 million in 2000 from Williams Energy Marketing &
        Trading.

     - ammonia pipeline and terminals system revenues declined by $0.4 million,
       or 3 percent, primarily due to a 82,000 ton, or 10 percent, reduction of
       ammonia shipped through our pipeline. This decline was due to lower
       product demand as well as the continuing impact of higher prices for
       natural gas, the primary component for the production of ammonia. Wet
       weather during the 2000 spring planting season resulted in reduced farm
       demand for ammonia. Further, due to higher natural gas prices, our
       customers elected to produce and transport lower quantities of ammonia
       and to draw more ammonia from their existing inventories to meet demand.
       This volume decline was partially offset by a higher weighted average
       tariff of $15.50 per ton for 2000 compared to a tariff of $14.74 per ton
       for 1999. The increase in the weighted average tariff resulted from the
       2000 mid-year indexing adjustment allowed under the transportation
       agreements as well as the expiration of a discount received by one of our
       customers.

     Operating expenses for the year ended December 31, 2000 were $33.5 million
compared to $18.6 million for the year ended December 31, 1999, an increase of
$14.9 million, or 80 percent. This increase was a result of:

     - an increase in petroleum product terminals expenses of $14.4 million, or
       95 percent, due to:

      - an increase in marine terminal facilities expenses of $15.2 million,
        from $6.0 million to $21.2 million, due to the acquisition and
        assimilation of the Gulf Coast facilities, which were acquired in August
        1999 and the New Haven, Connecticut facility which was acquired in
        September 2000; and

                                        25
<PAGE>

      - a decrease in inland terminal expenses of $0.8 million, from $9.1
        million to $8.3 million, primarily resulting from a decrease in
        environmental expenses associated with a system-wide environmental
        evaluation in 1999, decreases in employee relocation expenses associated
        with 12 terminals acquired in 1999 and a decrease in utility expenses as
        a result of lower throughput volumes. These reductions were slightly
        offset by increased costs related to our Southlake, Texas terminal
        acquired in March, 2000;

     - ammonia pipeline and terminals system operating costs increased $0.5
       million, or 14 percent, primarily due to increased utility costs as a
       result of higher natural gas prices.

     Depreciation expense for the year ended December 31, 2000 was $9.3 million
compared to $4.6 million for the year ended December 31, 1999, an increase of
$4.7 million, or 102 percent. This increase primarily resulted from a full year
of depreciation related to the Gulf Coast marine facilities acquired in August
1999 and the acquisition of the New Haven, Connecticut marine facility in
September 2000.

     General and administrative expenses for the year ended December 31, 2000
were $12.0 million compared to $5.5 million for the year ended December 31,
1999, an increase of $6.5 million, or 118 percent. This increase resulted
principally from the acquisition of the Gulf Coast marine facilities and the New
Haven, Connecticut marine facility. As a result of these acquisitions, the
percentage increase of our asset growth was greater than the percentage increase
of the growth in assets of The Williams Companies, Inc. and its subsidiaries.
Therefore, The Williams Companies, Inc. allocated more general and
administrative expenses to us.

     Affiliate interest expense for the year ended December 31, 2000 was $12.8
million compared to $4.8 million for the year ended December 31, 1999. A
significant portion of this increase can be attributed to carrying twelve months
of debt in 2000 related to the acquisition of the Gulf Coast marine facilities
in August 1999 and the acquisition of the New Haven, Connecticut facility in
September 2000.

     We based our income tax provision for 2000 and 1999 upon the effective
income tax rate for The Williams Companies, Inc. for those periods of 38.0
percent. The effective income tax rate exceeds the U.S. federal statutory income
tax rate primarily due to state income taxes.

     Net income for the year ended December 31, 2000 was $3.0 million compared
to $6.8 million for the year ended December 31, 1999, a decrease of $3.8
million, or 56 percent. While the operating margin increased by $13.2 million
during the period, this was more than offset by an $11.2 million increase in
depreciation and general and administrative expenses and an $8.0 million
increase in interest expense, all of which are principally a result of the
acquisitions of the Gulf Coast and New Haven, Connecticut marine terminal
facilities in August 1999 and September 2000, respectively. In addition, income
tax expense decreased $2.2 million due to the decline in earnings in 2000 as
compared to 1999.

LIQUIDITY AND CAPITAL RESOURCES

  Cash Flows and Capital Expenditures

     Net cash provided by operating activities for the year ended December 31,
2001 was $42.5 million compared to $15.6 million for the year ended December 31,
2000 and $5.7 million for the year ended December 31, 1999. The increase from
2000 to 2001 was primarily attributable to increased net income before
depreciation and deferred compensation costs. Acquisitions and enhanced
operations of our initial assets increased operating margins significantly. In
addition, our initial public offering in 2001 resulted in reduced general and
administrative costs and interest expense as well as the elimination of income
taxes. The increase from 1999 to 2000 was primarily attributable to a reduction
in the account receivable due from our affiliate, Williams Energy Marketing &
Trading. During this period, acquisitions also added significantly to operating
margins, but these increases were offset by an increase in general and
administrative expense allocations, higher depreciation and increased interest
expense.

     Net cash used by investing activities for the years ended December 31,
2001, 2000 and 1999 was $63.3 million, $41.7 million and $237.7 million,
respectively. We increased capital expenditures during these

                                        26
<PAGE>

years primarily to make acquisitions of petroleum product terminals. In 2001, we
acquired two inland terminals in Little Rock, Arkansas and a marine terminal
facility in Gibson, Louisiana. In 2000, we acquired one inland terminal and the
New Haven, Connecticut marine terminal facility. In 1999, we acquired 12 inland
terminals, the Gulf Coast marine facilities and an additional ownership interest
in eight existing inland terminals.

     Net cash provided by financing activities for the years ended December 31,
2001, 2000 and 1999 was $34.6 million, $26.1 million and $232.1 million,
respectively. The cash flow for 2001 is primarily comprised of proceeds from our
equity and debt proceeds at the time of our initial public offering and $49.5
million associated with additional borrowings for the acquisitions of the Little
Rock, Arkansas terminals and Gibson, Louisiana marine terminal facility. The
1999 and 2000 amounts represent loans received from The Williams Companies, Inc.
to fund our terminal acquisitions.

  Capital Requirements

     The storage, transportation and distribution business requires continual
investment to upgrade or enhance existing operations and to ensure compliance
with safety and environmental regulations. The capital requirements of our
business have consisted, and we expect them to continue to consist, primarily
of:

     - maintenance capital expenditures, such as those required to maintain
       equipment reliability and safety and to address environmental
       regulations; and

     - expansion capital expenditures to acquire additional complementary assets
       to grow our business and to expand or upgrade our existing facilities,
       such as projects that increase storage or throughput volumes.

     According to the Omnibus Agreement between Williams Energy Partners L.P.
and The Williams Companies, Inc., Williams will reimburse us for maintenance
capital in excess of $4.9 million per year during 2001 and 2002 on the assets
initially included in the initial public offering up to a combined maximum
reimbursement of $15.0 million. We incurred $3.9 million of maintenance capital
costs in 2001 in excess of the $4.9 million limit agreed to with Williams. We
received reimbursement of $2.0 million of these during 2001, with the remaining
$1.9 million reimbursement made in January 2002. The total amount we expect to
spend on maintenance capital for these assets in 2002 will exceed $4.9 million.
As a result, Williams will continue to make capital contributions to Williams
Energy Partners L.P. during 2002. In addition to maintenance capital, we are
also planning to incur expansion and upgrade capital expenditures at our
existing facilities, including pipeline connections. The total amount we plan to
spend for expansion is approximately $11.0 million in 2002, not including
capital needs associated with acquisition opportunities. We expect to fund our
capital expenditures, including any acquisitions, from cash provided by
operations and, to the extent necessary, from the proceeds of:

     - borrowings under the revolving credit facility discussed below and other
       borrowings; and

     - issuance of additional common units.

     If capital markets tighten and we are unable to fund these expenditures,
our business may be adversely affected and we may not be able to acquire
additional assets and businesses.

  Liquidity

     Subsequent to the closing of our initial public offering on February 9,
2001, we have relied on cash generated from internal operations as our primary
source of funding. To review the risks associated with our cash flows generated
from operations, refer to Risks Related to our Business discussed beginning on
page 30. Additional funding requirements are being served by a $175.0 million
credit facility that expires on February 5, 2004. This credit facility is
comprised of a $90.0 million term loan and an $85.0 million revolving credit
facility. The revolving credit facility is comprised of a $73.0 million
acquisition sub-facility and a $12.0 million working capital sub-facility.

     Immediately after the closing of the offering, our Partnership borrowed the
entire $90.0 million term loan and $0.1 million under the revolving credit
facility. As of December 31, 2001, $23.5 million was available
                                        27
<PAGE>

under the acquisition sub-facility after borrowing $49.5 million to fund the
Little Rock, Arkansas and Gibson, Louisiana acquisitions. Borrowings for the Aux
Sable transaction occurred during January 2002. In addition, $12.0 million was
available under the working capital sub-facility at December 31, 2001.

     The credit facility contains various operational and financial covenants.
Management believes that we are in compliance with all of these covenants.

ENVIRONMENTAL

     Our operations are subject to environmental laws and regulations adopted by
various governmental authorities in the jurisdictions in which these operations
are conducted. We have accrued liabilities for estimated site restoration costs
to be incurred in the future at our facilities and properties, including
liabilities for environmental remediation obligations at various sites where we
have been identified as a potentially responsible party. Under our accounting
policies, liabilities are recorded when site restoration and environmental
remediation and cleanup obligations are either known or considered probable and
can be reasonably estimated.

     In conjunction with our initial public offering, Williams Energy Services,
LLC, a subsidiary of The Williams Companies, Inc., agreed to indemnify us
against any covered environmental losses, up to $15.0 million, relating to
assets it contributed to Williams Energy Partners L.P. that arose prior to
February 9, 2001, that become known within three years after February 9, 2001
and that exceed all amounts recovered or recoverable by us under contractual
indemnities from third parties or under any applicable insurance policies.

     As of December 31, 2001 we had accrued environmental liabilities of $5.4
million. Management estimates that these expenditures for environmental
remediation liabilities will be paid over the next five to ten years.
Receivables associated with environmental liabilities of $5.1 million have been
recognized as recoverable from affiliates and third parties.

IMPACT OF INFLATION

     Although the impact of inflation has slowed in recent years, it is still a
factor in the United States economy and may increase the cost to acquire or
replace property, plant and equipment and may increase the costs of labor and
supplies. To the extent permitted by competition, regulation and our existing
agreements, we have and will continue to pass along increased costs to our
customers in the form of higher fees.

CRITICAL ACCOUNTING POLICIES

     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. We deem the following accounting policies to be critical:

     - Revenues are recognized in the month that services are rendered. Changes
       in the available tankage for storage and demand for petroleum and
       anhydrous ammonia products could have a material impact on our revenues.

     - Depreciation expense is calculated based on management's best estimate of
       the remaining useful lives of our assets. Because of the expected long
       useful lives of our assets, we depreciate terminals and pipelines over a
       30-year to 67-year period for financial statement purposes. Changes in
       the estimated lives of our assets could have a material effect on results
       of operations.

     - Incentive compensation expense is recorded for the restricted unit
       compensation program for Williams' employees who directly support the
       Partnership. The expense associated with the one-time initial public
       offering award is based on the price of the units on the date of grant.
       The expense associated with the annual incentive compensation plan is
       computed based on the estimated number of units that will ultimately vest
       adjusted by the current market value of the units at each period end. The
       Partnership is accruing costs for these units based on management's
       estimate that the maximum

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<PAGE>

       number of units will vest. Any changes in those assumptions would result
       in lower compensation expense to the Partnership.

     - Environmental liabilities are recorded when site restoration,
       environmental remediation and cleanup obligations are either known or
       considered probable and can be reasonably estimated. Environmental
       liabilities are recorded independently of any potential claim for
       recovery. Receivables are recognized in cases where reimbursements for
       remediation costs are considered probable. During 2001, we recorded a
       $2.6 million environmental liability associated with our New Haven
       facility. The amount of the liability was based on third-party
       engineering estimates developed as part of our Phase II environmental
       assessment, required by the State of Connecticut. This environmental
       liability could change materially upon finalization of the more
       comprehensive Phase III assessment, scheduled to be completed in the
       summer of 2002. This environmental liability is covered by the
       Partnership's indemnifications from Williams Energy Services, LLC up to a
       maximum amount of $15.0 million; hence, any adjustments to the liability
       should not impact the Partnership's results of operations.

     - With the adoption of Statement of Financial Accounting Standards No. 142,
       goodwill will no longer be amortized beginning January 1, 2002 but will
       be tested periodically for impairment. Management's judgments and
       assumptions relative to estimating the future cash flows of our various
       assets will be critical in determining whether an impairment exists and,
       if so, the financial impact of such impairment. Changes in market
       conditions, customers and/or industry financial conditions, technology
       and other factors could materially impact the future assessment of
       goodwill values, which could have a material impact on our results of
       operations, financial condition and cash flows.

NEW ACCOUNTING PRONOUNCEMENTS

     In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." This Statement supersedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of" and amends 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 Statement retains the basic framework of SFAS No.
121, resolves certain implementation issues of SFAS No. 121, extends
applicability to discontinued operations and broadens the presentation of
discontinued operations to include a component of an entity. The Statement is to
be applied prospectively and is effective for financial statements issued for
fiscal years beginning after December 15, 2001. The Statement is not expected to
have any initial impact on our results of operations or financial position.

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs and amends FASB Statement No.
19, "Financial Accounting and Reporting by Oil and Gas Producing Companies." The
Statement requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made and that the associated asset retirement
costs be capitalized as part of the carrying amount of the long-lived asset. The
Statement is effective for financial statements issued for fiscal years
beginning after June 15, 2002. We plan to adopt this standard in January 2003,
and we are evaluating its effect on our results of operations and financial
position.

     In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 establishes
accounting and reporting standards for business combinations and requires all
business combinations to be accounted for by the purchase method. The Statement
is effective for all business combinations for which the date of acquisition is
July 1, 2001 or later. SFAS No. 142 addresses accounting and reporting standards
for goodwill and other intangible assets. Under this Statement, goodwill and
intangible assets with indefinite useful lives will no longer be amortized but
will be tested annually for impairment. The Statement becomes effective for all
fiscal years beginning after December 15, 2001. We will apply the new rules on
accounting for goodwill and other intangible assets

                                        29
<PAGE>

beginning January 1, 2002. Based on the amount of goodwill recorded as of
December 31, 2001, application of the non-amortization provision of the
Statement will result in a decrease to amortization expense in future years of
approximately $1.1 million.

     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This was followed in June 2000 by the
issuance of SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities," which amends SFAS No. 133. SFAS No. 133 and No. 138
establish accounting and reporting standards for derivative financial
instruments. The standards require that all derivative financial instruments be
recorded on the balance sheet at their fair value. Changes in fair value of
derivatives will be recorded each period in earnings if the derivative is not a
hedge. If a derivative qualifies for special hedge accounting, changes in the
fair value of the derivative will either be recognized in earnings as an offset
against the change in fair value of the hedged assets, liabilities or firm
commitments also recognized in earnings, or the changes in fair value will be
deferred on the balance sheet until the hedged item is recognized in earnings.
The ineffective portion of a derivative's change in fair value will be
recognized immediately in earnings. These standards were adopted on January 1,
2001. There was no impact to our financial position, results of operations or
cash flows from adopting these standards.

     The FASB issued SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." The Statement provides
guidance for determining whether a transfer of financial assets should be
accounted for as a sale or a secured borrowing and whether a liability has been
extinguished. The Statement is effective for recognition and reclassification of
collateral and for disclosures ending after December 15, 2000. The Statement
became effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after March 31, 2001. The initial
application of SFAS No. 140 had no impact on our results of operations and
financial position.

RELATED PARTY TRANSACTIONS

     Williams Energy Marketing & Trading Company and Williams Refining &
Marketing, L.L.C., subsidiaries of The Williams Companies, Inc. and affiliates
of the Partnership, are significant customers at our petroleum product
terminals, representing 11.0 percent and 7.2 percent, respectively, of our total
revenues for the year ended December 31, 2001. The services we provide them are
conducted pursuant to various contracts between them and the Partnership. As of
December 31, 2001, 3 percent of the revenues from these affiliates were
generated under contracts renewing on a monthly basis, while 97 percent were
generated under contracts with remaining terms in excess of one year or that are
renewed on an annual basis.

RISKS RELATED TO OUR BUSINESS

WE MAY NOT BE ABLE TO GENERATE SUFFICIENT CASH FROM OPERATIONS TO ALLOW US TO
PAY THE MINIMUM QUARTERLY DISTRIBUTION FOLLOWING ESTABLISHMENT OF CASH RESERVES
AND PAYMENT OF FEES AND EXPENSES, INCLUDING PAYMENTS TO OUR GENERAL PARTNER.

     The amount of cash we can distribute on our common units principally
depends upon the cash we generate from our operations. Because the cash we
generate from operations will fluctuate from quarter to quarter, we may not be
able to pay the minimum quarterly distribution for each quarter. Our ability to
pay the minimum quarterly distribution each quarter depends primarily on cash
flow, including cash flow from financial reserves and working capital
borrowings, and not solely on profitability, which is affected by non-cash
items. As a result, we may make cash distributions during periods when we record
losses and may not make cash distributions during periods when we record net
income.

POTENTIAL FUTURE ACQUISITIONS AND EXPANSIONS, IF ANY, MAY AFFECT OUR BUSINESS BY
SUBSTANTIALLY INCREASING THE LEVEL OF OUR INDEBTEDNESS AND CONTINGENT
LIABILITIES AND INCREASING OUR RISKS OF BEING UNABLE TO EFFECTIVELY INTEGRATE
THESE NEW OPERATIONS.

     From time to time, we evaluate and acquire assets and businesses that we
believe complement our existing assets and businesses. Acquisitions may require
substantial capital or the incurrence of substantial indebtedness. If we
consummate any future acquisitions, our capitalization and results of operations
may
                                        30
<PAGE>

change significantly, and you will not have the opportunity to evaluate the
economic, financial and other relevant information that we will consider in
determining the application of these funds and other resources.

     Acquisitions and business expansions involve numerous risks, including
difficulties in the assimilation of the assets and operations of the acquired
businesses, inefficiencies and difficulties that arise because of unfamiliarity
with new assets and the businesses associated with them and new geographic areas
and the diversion of management's attention from other business concerns.
Further, unexpected costs and challenges may arise whenever businesses with
different operations or management are combined, and we may experience
unanticipated delays in realizing the benefits of an acquisition. Following an
acquisition, we may discover previously unknown liabilities associated with the
acquired business for which we have no recourse under applicable indemnification
provisions.

OUR FINANCIAL RESULTS DEPEND ON THE DEMAND FOR THE REFINED PETROLEUM PRODUCTS
THAT WE STORE AND DISTRIBUTE.

     Any sustained decrease in demand for refined petroleum products in the
markets served by our terminals could result in a significant reduction in the
volume of products that we store at our marine terminal facilities and in the
throughput in our inland terminals, and therefore reduce our cash flow and our
ability to pay cash distributions to you. Factors that could lead to a decrease
in market demand include:

     - an increase in the market price of crude oil that leads to higher refined
       product prices, which may reduce demand for gasoline and other petroleum
       products. Market prices for refined petroleum products are subject to
       wide fluctuation in response to changes in global and regional supply
       over which we have no control;

     - a recession or other adverse economic condition that results in lower
       spending by consumers and businesses on transportation fuels such as
       gasoline, jet fuel and diesel;

     - higher fuel taxes or other governmental or regulatory actions that
       increase the cost of gasoline;

     - an increase in fuel economy, whether as a result of a shift by consumers
       to more fuel-efficient vehicles or technological advances by
       manufacturers; and

     - the increased use of alternative fuel sources, such as fuel cells and
       solar, electric and battery-powered engines. Several state and federal
       initiatives mandate this increased use.

WHEN PRICES FOR THE FUTURE DELIVERY OF PETROLEUM PRODUCTS THAT WE STORE IN OUR
MARINE TERMINALS FALL BELOW CURRENT PRICES, CUSTOMERS ARE LESS LIKELY TO STORE
THESE PRODUCTS, THEREBY REDUCING OUR STORAGE REVENUES.

     This market condition is commonly referred to as "backwardation." When the
petroleum product market is in backwardation, the demand for storage capacity at
our marine terminal facilities may decrease. The forward pricing market for
petroleum products moved to backwardation in the second quarter of 1999 and
continued for a majority of 2000. This market condition contributed to reduced
storage revenues in 1999 and 2000. In 2001, the forward pricing market remained
backwardated during the first half of the year, reversing during the latter half
of 2001. If this market becomes strongly backwardated for an extended period of
time, it may affect our ability to pay cash distributions to you.

WE DEPEND ON PETROLEUM PRODUCT PIPELINES OWNED AND OPERATED BY OTHERS TO SUPPLY
OUR TERMINALS.

     Most of our inland and marine terminal facilities depend on connections
with petroleum product pipelines owned and operated by third parties. Reduced
throughput on these pipelines because of testing, line repair, damage to
pipelines, reduced operating pressures or other causes could result in our being
unable to deliver products to our customers from our terminals or receive
products for storage and could adversely affect our ability to pay cash
distributions to you.

                                        31
<PAGE>

COLLECTIVELY, OUR AFFILIATES WILLIAMS ENERGY MARKETING & TRADING AND WILLIAMS
REFINING & MARKETING ARE OUR LARGEST CUSTOMER, AND ANY REDUCTION IN THEIR USE OF
OUR TERMINAL FACILITIES COULD REDUCE OUR ABILITY TO PAY CASH DISTRIBUTIONS TO
YOU.

     For the year ended December 31, 2001, our affiliates Williams Energy
Marketing & Trading and Williams Refining & Marketing collectively accounted for
approximately 18 percent of our revenues. If Williams Energy Marketing & Trading
and Williams Refining & Marketing were to decrease the throughput volume they
allocate to our terminals for any reason, we could experience difficulty in
replacing those lost volumes. Because our operating costs are primarily fixed, a
reduction in throughput would result in not only a reduction of revenues, but
also a decline in net income and cash flow of a similar magnitude, which would
reduce our ability to pay cash distributions to you. Either Williams Energy
Marketing & Trading or Williams Refining & Marketing could reduce the volume of
throughput it allocates to us because of market conditions or because of factors
that specifically affect Williams Energy Marketing & Trading or Williams
Refining & Marketing, including a decrease in demand for products in the markets
served by our terminals or a loss of customers in those markets.

OUR AMMONIA PIPELINE AND TERMINALS SYSTEM IS DEPENDENT ON THREE CUSTOMERS.

     Three customers ship all of the ammonia on our pipeline and utilize the six
terminals that we own and operate on the pipeline. We have contracts with
Farmland Industries, Inc., Agrium U.S. Inc. and Terra Nitrogen, L.P. through
June 2005 that obligate them to ship-or-pay for specified minimum quantities of
ammonia. Two of these customers have credit ratings below investment grade. The
loss of any one of these three customers or their failure or inability to pay us
would adversely affect our ability to pay cash distributions to you.

HIGH NATURAL GAS PRICES CAN INCREASE AMMONIA PRODUCTION COSTS AND REDUCE THE
AMOUNT OF AMMONIA TRANSPORTED THROUGH OUR AMMONIA PIPELINE AND TERMINALS SYSTEM.

     The profitability of our customers that produce ammonia partially depends
on the price of natural gas, which is the principal raw material used in the
production of ammonia. From 1999 through the first half of 2001, natural gas
prices were substantially higher than historical averages. As a result, our
customers substantially curtailed their production of ammonia and shipped lower
volumes of ammonia on our pipeline. Because of this, our ammonia business
realized reduced revenues and cash flows in 1999, 2000 and the first six months
of 2001. Our ammonia pipeline and terminals system revenues increased during the
second half of 2001 with the return of high natural gas prices to lower
historical levels. An extended period of high natural gas prices may cause our
customers to produce and ship lower volumes of ammonia, which could adversely
affect our ability to pay cash distributions to you.

CHANGES IN THE FEDERAL GOVERNMENT'S POLICY REGARDING FARM SUBSIDIES COULD
NEGATIVELY IMPACT THE DEMAND FOR AMMONIA AND RESULT IN DECREASED SHIPMENTS
THROUGH OUR AMMONIA PIPELINE AND TERMINALS SYSTEM.

     Our customers who ship ammonia through our pipeline primarily market the
ammonia to corn farmers in the Midwest. The government's Freedom to Farm program
enacted by the 1996 Farm Bill has provided these farmers with increased
incentives to grow corn, resulting in large corn crops over the last few years.
This program, however, ends in 2002 and is under legislative consideration at
this time. If the program is revised or terminated, it could reduce farmers'
incentive to grow corn and reduce the demand for the ammonia used to fertilize
the crops. In addition, the federal government and state governments have been
providing tax credits related to the production of ethanol, for which corn is
the essential element. If these tax incentives are reduced or repealed, the
demand for ammonia would be reduced and our customers might reduce the volumes
transported through our pipeline.

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<PAGE>

OUR MARINE AND INLAND TERMINALS ENCOUNTER COMPETITION FROM OTHER TERMINAL
COMPANIES AND OUR AMMONIA PIPELINE AND TERMINALS SYSTEM ENCOUNTERS COMPETITION
FROM RAIL CARRIERS AND ANOTHER AMMONIA PIPELINE.

     Our marine and inland terminals face competition from large, generally
well-financed companies that own many terminals, as well as from small
companies. Our marine and inland terminals also encounter competition from
integrated refining and marketing companies that own their own terminal
facilities. Our customers demand delivery of products on tight time schedules
and in a number of geographic markets. If our quality of service declines or we
cannot meet the demands of our customers, they may use our competitors.

     We compete primarily with rail carriers for the transportation of ammonia.
If our customers elect to transport ammonia by rail rather than pipeline, we may
realize lower revenues and cash flows and our ability to pay cash distributions
may be adversely affected. Our ammonia pipeline also competes with the Koch
Pipeline Company LP ammonia pipeline in Iowa and Nebraska.

OUR BUSINESS IS SUBJECT TO FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS THAT
GOVERN THE ENVIRONMENTAL AND OPERATIONAL SAFETY ASPECTS OF OUR OPERATIONS.

     Our marine and inland terminal facilities and ammonia pipeline and
terminals system are subject to the risk of incurring substantial costs and
liabilities under environmental and safety laws. These costs and liabilities
arise under increasingly strict environmental and safety laws, including
regulations and governmental enforcement policies, and as a result of claims for
damages to property or persons arising from our operations. Failure to comply
with these laws and regulations may result in assessment of administrative,
civil and criminal penalties, imposition of cleanup and site restoration costs
and liens and, to a lesser extent, issuance of injunctions to limit or cease
operations. If we were unable to recover these costs through increased revenues,
our ability to pay cash distributions to you could be adversely affected.

     We own a number of properties that have been used for many years to
distribute or store petroleum products by third parties not under our control.
In some cases, owners, tenants or users of these properties have disposed of or
released hydrocarbons or solid wastes on or under these properties. In addition,
some of our terminals are located on or near current or former refining and
terminal operations, and there is a risk that contamination is present on these
sites. The transportation of ammonia by our pipeline is hazardous and may result
in environmental damage, including accidental releases that may cause death or
injuries to humans and farm animals and damage to crops.

TERRORIST ATTACKS AIMED AT OUR FACILITIES COULD ADVERSELY AFFECT OUR BUSINESS.

     On September 11, 2001, the United States was the target of terrorist
attacks of unprecedented scale. Since the September 11 attacks, the U.S.
government has issued warnings that energy assets, specifically our nation's
pipeline infrastructure, may be the future target of terrorist organizations.
These developments have subjected our operations to increased risks. Any future
terrorist attack on our facilities, those of our customers and, in some cases,
those of other pipelines, could have a material adverse effect on our business.

OUR BUSINESS INVOLVES MANY HAZARDS AND OPERATIONAL RISKS, SOME OF WHICH MAY NOT
BE COVERED BY INSURANCE.

     Our operations are subject to the many hazards inherent in the
transportation of refined petroleum products and ammonia, including ruptures,
leaks and fires. These risks could result in substantial losses due to personal
injury or loss of life, severe damage to and destruction of property and
equipment and pollution or other environmental damage and may result in
curtailment or suspension of our related operations. We are not fully insured
against all risks incident to our business. In addition, as a result of market
conditions, premiums for our insurance policies have increased substantially and
could escalate further. In some instances, insurance could become unavailable or
available only for reduced amounts of coverage. For example, insurance carriers
are now requiring broad exclusions for losses due to war risk and terrorist and
sabotage acts. If a significant accident or event occurs that is not fully
insured, it could adversely affect our financial position or results of
operations.

                                        33
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Williams Energy Partners currently does not engage in interest rate,
foreign currency exchange rate or commodity price-hedging transactions.

     Market risk is the risk of loss arising from adverse changes in market
rates and prices. The principal market risk to which we are exposed is interest
rate risk. Debt we incur under our credit facility bears variable interest based
on LIBOR. If the LIBOR changed by 0.125 percent, our annual debt coverage
obligations associated with the $139.5 million of outstanding borrowings under
the term loan and revolving credit facility at December 31, 2001 would change by
approximately $0.2 million. Unless interest rates change significantly in the
future, our exposure to interest rate market risk is minimal.

                                        34
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                         REPORT OF INDEPENDENT AUDITORS

The Board of Directors of Williams GP LLC,
General Partner of Williams Energy Partners L.P.

     We have audited the accompanying consolidated balance sheets of Williams
Energy Partners L.P. as of December 31, 2001 and 2000, and the related
consolidated statements of income, partners' capital and cash flows for each of
the three years in the period ended December 31, 2001. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Williams Energy
Partners L.P. at December 31, 2001 and 2000, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2001 in conformity with accounting principles generally accepted in
the United States.

                                          ERNST & YOUNG LLP

Tulsa, Oklahoma
March 4, 2002

                                        35
<PAGE>

                         WILLIAMS ENERGY PARTNERS L.P.

                       CONSOLIDATED STATEMENTS OF INCOME
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                YEAR ENDED DECEMBER 31,
                                                              ---------------------------
                                                               2001      2000      1999
                                                              -------   -------   -------
<S>                                                           <C>       <C>       <C>
Revenues:
  Third party...............................................  $70,155   $55,077   $37,469
  Affiliate.................................................   15,899    17,415     6,919
                                                              -------   -------   -------
     Total revenues.........................................   86,054    72,492    44,388
Costs and expenses:
  Operating.................................................   37,314    33,489    18,635
  Depreciation and amortization.............................   11,748     9,333     4,610
  Affiliate general and administrative......................    8,955    11,963     5,458
                                                              -------   -------   -------
     Total costs and expenses...............................   58,017    54,785    28,703
                                                              -------   -------   -------
Operating profit............................................   28,037    17,707    15,685
Interest expense:
  Affiliate interest expense................................    1,843    12,827     4,775
  Other interest expense....................................    5,089        --        --
Minority interest expense...................................      229        --        --
Other (income) expense......................................   (1,058)       33        --
                                                              -------   -------   -------
Income before income taxes..................................   21,934     4,847    10,910
Provision for income taxes..................................      187     1,842     4,144
                                                              -------   -------   -------
Net income..................................................  $21,747   $ 3,005   $ 6,766
                                                              =======   =======   =======
Allocation of 2001 net income:
  Portion applicable to the period January 1 through
     February 9, 2001.......................................  $   304
  Portion applicable to the period after February 9, 2001...   21,443
                                                              -------
     Net income.............................................  $21,747
                                                              =======
General partner's interest in income applicable to the
  period after February 9, 2001.............................  $   226
                                                              =======
Limited partners' interest in income applicable to the
  period after February 9, 2001.............................  $21,217
                                                              =======
Basic and diluted net income per limited partner unit.......  $  1.87
                                                              =======
Weighted average number of units outstanding for the period
  after February 9, 2001....................................   11,359
                                                              =======
</Table>

                            See accompanying notes.

                                        36
<PAGE>

                         WILLIAMS ENERGY PARTNERS L.P.

                          CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                 DECEMBER 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
                                     ASSETS
Current assets:
  Cash and cash equivalents.................................  $ 13,831   $     --
  Accounts receivable (less allowance for doubtful
     accounts -- $285 in 2001)..............................    13,822     10,645
  Affiliate accounts receivable.............................     2,874      1,875
  Prepaid insurance.........................................        --        903
  Other current assets......................................       330        685
                                                              --------   --------
       Total current assets.................................    30,857     14,108
Property, plant and equipment, at cost......................   380,706    340,975
  Less: accumulated depreciation............................    51,326     40,127
                                                              --------   --------
       Net property, plant and equipment....................   329,380    300,848
Deferred equity offering costs..............................        --      2,539
Goodwill (less amortization of $145)........................    22,282         --
Other intangibles (less amortization of $310)...............     2,639         --
Long-term affiliate receivables.............................     4,459         --
Long-term receivables.......................................     8,809        262
Other noncurrent assets.....................................     1,018        748
                                                              --------   --------
  Total assets..............................................  $399,444   $318,505
                                                              ========   ========

                         LIABILITIES & PARTNERS' CAPITAL
Current liabilities:
  Accounts payable..........................................  $  5,795   $  3,640
  Affiliate accounts payable................................     6,681         --
  Accrued affiliate payroll and benefits....................       797      1,169
  Accrued taxes other than income...........................     2,314      1,919
  Accrued interest payable..................................       277         --
  Environmental liabilities.................................       905         --
  Other current liabilities.................................     1,136         --
  Acquisition payable.......................................     8,854         --
                                                              --------   --------
       Total current liabilities............................    26,759      6,728
Long-term debt..............................................   139,500         --
Long-term affiliate payable.................................     1,262         --
Other deferred liabilities..................................       284         --
Affiliate note payable......................................        --    226,188
Deferred income taxes.......................................        --     13,789
Environmental liabilities...................................     4,479      1,944
Minority interest...........................................     2,250         --
Commitments and contingencies
Partners' capital:
  Common unitholders (5,680 units outstanding at December
     31, 2001)..............................................   101,452     69,856
  Subordinated unitholders (5,680 units outstanding at
     December 31, 2001).....................................   121,237         --
  General partner...........................................     2,221         --
                                                              --------   --------
     Total partners' capital................................   224,910     69,856
                                                              --------   --------
     Total liabilities and partners' capital................  $399,444   $318,505
                                                              ========   ========
</Table>

                            See accompanying notes.

                                        37
<PAGE>

                         WILLIAMS ENERGY PARTNERS L.P.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                  YEAR ENDED DECEMBER 31,
                                                              --------------------------------
                                                                2001        2000       1999
                                                              ---------   --------   ---------
<S>                                                           <C>         <C>        <C>
Operating Activities:
    Net income..............................................  $  21,747   $  3,005   $   6,766
    Adjustments to reconcile net income to net cash provided
     by operating activities:
         Depreciation and amortization......................     11,748      9,333       4,610
         Debt issuance costs amortization...................        253         --          --
         Minority interest expense..........................        229         --          --
         Deferred compensation expense......................      2,048         --          --
         Bad debt expense...................................        285         --          --
         Deferred income taxes..............................        187      1,842       4,144
         Gain on sale of assets.............................     (1,058)        --          --
         Changes in components of operating assets and
           liabilities:
         Accounts receivable................................     (3,155)    (1,417)     (6,130)
         Affiliate accounts receivable......................       (999)     2,870      (3,927)
         Prepaid insurance..................................        903       (544)         --
         Accounts payable...................................      2,155       (303)      2,825
         Affiliate accounts payable.........................      6,184         --          --
         Accrued income taxes due affiliate.................         --         --      (2,315)
         Accrued affiliate payroll and benefits.............       (372)       509         630
         Accrued taxes other than income....................        391      1,679         (55)
         Accrued interest payable...........................        277         --          --
         Current and noncurrent environmental liabilities...      3,338       (346)        172
         Other current and noncurrent assets and
           liabilities......................................     (1,653)      (993)     (1,061)
                                                              ---------   --------   ---------
         Net cash provided by operating activities..........     42,508     15,635       5,659
Investing Activities:
    Additions to property, plant & equipment................    (15,511)   (10,649)     (4,318)
    Purchases of businesses.................................    (49,409)   (31,100)   (223,300)
    Proceeds from sale of business..........................      1,650         --          --
    Advances on affiliate note receivable...................         --         --     (10,115)
                                                              ---------   --------   ---------
      Net cash used by investing activities.................    (63,270)   (41,749)   (237,733)
Financing Activities:
    Distributions paid......................................    (16,599)        --          --
    Borrowings under credit facility........................    139,500         --          --
    Capital contributions by affiliate......................      1,792         --          --
    Sales of Common Units to public (less underwriters'
     commissions and payment of formation costs)............     89,362         --          --
    Debt placement costs....................................       (909)        --          --
    Redemption of 600,000 Common Units from affiliate.......    (12,060)        --          --
    Payments on affiliate note payable......................   (166,493)    (5,955)         --
    Proceeds from affiliate note payable....................         --     32,069     232,074
                                                              ---------   --------   ---------
      Net cash provided by financing activities.............     34,593     26,114     232,074
                                                              ---------   --------   ---------
Change in cash and cash equivalents.........................     13,831         --          --
Cash and cash equivalents at beginning of period............         --         --          --
                                                              ---------   --------   ---------
Cash and cash equivalents at end of period..................  $  13,831   $     --   $      --
                                                              =========   ========   =========
Supplemental non-cash investing and financing transactions:
  Contributions by affiliate of predecessor company deferred
    income tax liability....................................  $  13,976         --          --
  Contribution of long-term debt to Partnership capital.....     59,695         --          --
  Purchase of Aux Sable pipeline............................      8,854         --          --
  Deferred equity offering costs............................         --      2,539          --
                                                              ---------   --------   ---------
    Total...................................................  $  82,525   $  2,539   $      --
                                                              =========   ========   =========
</Table>

                            See accompanying notes.

                                        38
<PAGE>

                         WILLIAMS ENERGY PARTNERS L.P.

                  CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
                      (IN THOUSANDS, EXCEPT UNIT AMOUNTS)

<Table>
<Caption>
                                           NUMBER OF LIMITED PARTNER
                                                     UNITS                                                    TOTAL
                                           --------------------------                             GENERAL   PARTNERS'
                                             COMMON     SUBORDINATED     COMMON    SUBORDINATED   PARTNER    CAPITAL
                                           ----------   -------------   --------   ------------   -------   ---------
<S>                                        <C>          <C>             <C>        <C>            <C>       <C>
Balance -- January 1, 1999...............         --             --     $ 60,085     $     --     $   --    $ 60,085
Net income...............................                                  6,766                               6,766
                                           ---------      ---------     --------     --------     ------    --------
Balance -- December 31, 1999.............         --             --       66,851           --         --      66,851
Net income...............................                                  3,005                               3,005
                                           ---------      ---------     --------     --------     ------    --------
Balance -- December 31, 2000.............         --             --       69,856           --         --      69,856
Portion of net income applicable to
  period Jan. 1, 2001 through Feb. 9,
  2001...................................         --             --          304           --         --         304
                                           ---------      ---------     --------     --------     ------    --------
Balance -- February 9, 2001..............         --             --       70,160           --         --      70,160
Issuance of units to public..............  4,600,000             --       89,362           --         --      89,362
Contribution of net assets of predecessor
  companies..............................  1,679,694      5,679,694      (48,484)     118,762      2,326      72,604
Redemption of common units...............   (600,000)            --      (12,060)          --         --     (12,060)
Distributions............................         --             --       (8,134)      (8,134)      (331)    (16,599)
Portion of net income applicable to
  period Feb. 10 through Dec. 31, 2001...         --             --       10,608       10,609        226      21,443
Balance -- December 31, 2001
                                           ---------      ---------     --------     --------     ------    --------
                                           5,679,694      5,679,694     $101,452     $121,237     $2,221    $224,910
                                           =========      =========     ========     ========     ======    ========
</Table>

                            See accompanying notes.

                                        39
<PAGE>

                         WILLIAMS ENERGY PARTNERS L.P.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND PRESENTATION

     Williams Energy Partners L.P. (the "Partnership") is a Delaware limited
partnership that was formed in August 2000, to acquire, own and operate: (a)
selected petroleum product terminals owned by Williams Energy Ventures, Inc.
("WEV"), and (b) an ammonia pipeline and terminals system, Williams Ammonia
Pipeline, Inc., ("WAPI"), owned by Williams Natural Gas Liquids, Inc. ("WNGL").
Prior to the closing of the Partnership's initial public offering in February
2001, WEV was owned by Williams Energy Services, LLC ("WES"). Both WES and WNGL
are wholly-owned subsidiaries of The Williams Companies, Inc. ("Williams").
Williams GP LLC (the "Managing GP" or "General Partner"), a Delaware limited
liability company, was also formed in August 2000, to serve as managing general
partner for the Partnership.

     On February 9, 2001, the Partnership completed its initial public offering
of 4,000,000 common units representing limited partner interests in the
Partnership at a price of $21.50 per unit. The proceeds of $86.0 million were
used to pay underwriter commissions of $5.6 million and legal, professional fees
and costs associated with the initial public offering of $3.1 million, with the
remainder used to reduce affiliate note balances with Williams.

     On October 28, 2000, the Partnership and the Managing GP formed a limited
operating partnership named Williams OLP, L.P. ("OLP") to serve as limited
partner of the operating limited partnerships. Concurrent with the closing of
the initial public offering and pursuant to the Contribution and Conveyance
Agreement dated February 9, 2001, WEV converted itself into Williams Terminals
Holdings, L.P. ("WTH LP"). Williams Pipeline Holdings, LLC, a subsidiary of WTH
LP, converted itself into Williams Pipeline Holdings, LP ("WPH LP") and Williams
Ammonia Pipeline, Inc. converted itself into Williams Ammonia Pipeline, L.P.
("WAP LP"). All three converted entities are Delaware limited partnerships. WNGL
contributed 3.05 percent of its ownership in WAP LP and WES contributed 2.05
percent of its ownership in WTH LP to the Managing GP in exchange for 19.2
percent and 80.8 percent ownership interest in the Managing GP, respectively.
WNGL contributed the remainder of its interest in WAP LP to the OLP and WES
contributed the remainder of its interest in WTH LP and all of its interest in
WPH LP to the OLP in exchange for ownership interests in the OLP. The Managing
GP contributed all of its interest in WAP LP, WTH LP and WPH LP in exchange for:
(a) a 1.0 percent managing general partner interest in the Partnership and (b) a
1.0101 percent managing general partner interest in the OLP. WNGL contributed to
the Partnership all of its limited partner interest in OLP in exchange for
322,501 common units and 1,090,501 subordinated units, and WES contributed all
of its limited partner interest in OLP to the Partnership in exchange for
1,357,193 common units and 4,589,193 subordinated units.

     Subsequent to the initial public offering, the underwriters exercised their
over-allotment option and purchased 600,000 common units, also at a price of
$21.50 per unit. The net proceeds of $12.1 million, after underwriter
commissions of $0.8 million, from this over-allotment option were used to redeem
600,000 of the common units held by WES to reimburse it for capital expenditures
related to the Partnership's assets. Upon completion of this transaction,
Williams owned 60 percent of the equity units of the Partnership. The
Partnership maintained the historical costs of the net assets received under the
Contribution Agreement. Following the exercise of the underwriters
over-allotment, 40.09 percent of the Partnership is owned by the public and
59.91 percent, including the general partners ownership, is owned by affiliates
of Williams Energy Partners L.P.

     On February 26, 2002, the Partnership formed a wholly-owned Delaware
corporation named Williams GP Inc. ("GP Inc.") The Partnership then contributed
a 0.001 percent limited partner interest in OLP to GP Inc. as a capital
contribution. The OLP agreement was then amended to convert GP Inc.'s OLP
limited partner interest to a general partner interest and to convert the
General Partner's existing interest to a limited partner interest. The General
Partner then contributed its 1.0101 percent OLP limited partner interest to the
Partnership in exchange for an additional 1.0 percent general partner interest
in the Partnership.

                                        40
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The resulting structure is as follows: Williams GP LLC serves as the
managing general partner for the Partnership. OLP is the limited partner of the
operating limited partnerships and GP Inc. serves as its general partner. The
operating limited partnerships are comprised of WTH LP, WPH LP and WAP LP.
Williams NGL LLC was established to serve as general partner of the operating
limited partnerships and is owned by OLP. Under the resulting structure, the
limited partners' liability in each of the limited partnerships is limited to
their investment.

  Pro Forma Results of Operations (Unaudited):

<Table>
<Caption>
                                                                   2000
                                                              --------------
                                                              (IN THOUSANDS,
                                                                EXCEPT PER
                                                              UNIT AMOUNTS)
<S>                                                           <C>
Revenues....................................................     $77,560
Operating expenses..........................................      36,106
Depreciation................................................       9,992
Affiliate general and administrative expense................       6,000
                                                                 -------
Operating profit............................................      25,462
Interest expense............................................      (7,784)
Minority interest expense...................................        (178)
Other income (expense)......................................         (33)
                                                                 -------
Net income..................................................     $17,467
General partner's interest in net income....................         175
                                                                 -------
Limited partners' interest in net income....................     $17,292
                                                                 =======
Net income per limited partner unit.........................     $  1.52
                                                                 =======
Weighted average number of units outstanding................      11,359
                                                                 =======
</Table>

     The pro forma results of operations for the year ended December 31, 2000,
are derived from the historical financial statements of the Partnership. The pro
forma results of operations reflect certain pro forma adjustments to the
historical results of operations as if the MLP had been formed on January 1,
2000. Significant pro forma adjustments include: (a) pro forma interest on debt
outstanding on February 9, 2001, (b) reductions in general and administrative
expenses to $6.0 million per year, (c) additional revenues and expenses from
acquisitions as though the acquisitions had occurred as of January 1, 2000, (d)
reductions of $0.7 million in 2000 for additional revenues recognized as a
result of a revenue guarantee provided by Amerada Hess Corporation for a
specified period after the acquisition of the Gulf Coast marine terminals and
(e) the elimination of income tax expense as income taxes are the responsibility
of the unitholders and not the MLP.

2. DESCRIPTION OF BUSINESSES

     Williams Energy Partners L.P. owns and operates certain petroleum product
terminal operations and an interstate common carrier ammonia pipeline.

  Petroleum Product Terminals

     Most of the Partnership's 30 petroleum product terminals are strategically
located along or near third party pipelines or petroleum refineries. The
terminal network consists of marine terminals and inland terminals. The
petroleum product terminals provide a variety of services such as distribution,
storage, blending, inventory management and additive injection to a diverse
customer group including governmental customers and end-users in the downstream
refining, retail, commercial trading, industrial and petrochemical

                                        41
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

industries. Products stored in and distributed through the petroleum product
terminal network include refined petroleum products, blendstocks and heavy oils
and feedstocks. The inland terminals are located primarily in the southeastern
United States. Four marine terminal facilities are located along the Gulf Coast
and one marine terminal facility is located in Connecticut near the New York
harbor. Other than at our Galena Park marine terminal facility, none of the
employees assigned to the petroleum product terminal operations are covered by
collective bargaining agreements. The employees at the Galena Park marine
terminal facility are currently represented by a union, but have indicated their
unanimous desire to terminate their union affiliation. Nevertheless, the
National Labor Relations Board has ordered the Partnership to bargain with the
union as the exclusive collective bargaining representative of the employees at
the facility. The Partnership is appealing this decision.

  Ammonia Pipeline and Terminals System

     The ammonia pipeline and terminals system consists of an ammonia pipeline
and six company-owned terminals. Shipments on the pipeline primarily originate
from ammonia production plants located in Borger, Texas and Enid and Verdigris,
Oklahoma for transport to terminals throughout the Midwest for ultimate
distribution to end-users in Iowa, Kansas, Minnesota, Missouri, Nebraska,
Oklahoma and South Dakota. The ammonia transported through the system is used
primarily as nitrogen fertilizer. Approximately 94 percent of ammonia system
revenues are generated from transportation tariffs received from three
customers, who are obligated under "ship or pay" contracts to ship an aggregate
minimum of 700,000 tons per year but have historically shipped an amount in
excess of the required minimum. The current ammonia transportation contracts
extend through June 2005. The tariffs charged by the interstate ammonia pipeline
are regulated by the Surface Transportation Board of the U.S. Department of
Transportation.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  Basis of Presentation

     The petroleum product terminal operations consist of 30 independent
petroleum product terminal facilities and associated storage, located across 12
states primarily in the South, Southeast and Gulf Coast areas of the United
States. For 11 of these petroleum product terminals, Williams Energy Partners
L.P. owns varying undivided ownership interests. From inception, ownership of
these assets has been structured as an ownership of an undivided interest in
assets, not as an ownership interest in a partnership, limited liability
company, joint venture or other form of entity. Marketing and invoicing are
controlled separately by each owner, and each owner is responsible for any loss,
damage or injury that may occur to their own customers. As a result, Williams
Energy Partners L.P. applies proportionate consolidation for their interests in
these assets. All of the remaining terminal facilities and the ammonia pipeline
are wholly-owned subsidiaries and are fully consolidated.

  Reclassifications

     Certain previously reported balances have been classified differently to
conform with current year presentation.

  Use of Estimates

     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.

                                        42
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

  Cash Equivalents

     Cash and cash equivalents include demand and time deposits and other
marketable securities with maturities of three months or less when acquired.

  Property, Plant and Equipment

     Property, plant and equipment are stated at cost. Expenditures for
maintenance and repairs are charged to operations in the period incurred. The
costs of property, plant and equipment sold or retired and the related
accumulated depreciation is removed from the accounts, and any associated gains
or losses are recorded in the income statement, in the period of sale or
disposition. Depreciation of property, plant and equipment is provided on the
straight-line basis.

  Goodwill and Other Intangible Assets

     Goodwill, which represents the excess of cost over fair value of assets of
businesses acquired, was amortized on a straight-line basis over a period of 20
years for those assets acquired prior to July 1, 2001. Other intangible assets
are amortized on a straight-line basis over a period of up to 25 years.

  Impairment of Long-Lived Assets

     Williams Energy Partners L.P. evaluates its long-lived assets of
identifiable business activities for impairment when events or changes in
circumstances indicate, in management's judgment, that the carrying value of
such assets may not be recoverable. The determination of whether an impairment
has occurred is based on management's estimate of undiscounted future cash flows
attributable to the assets as compared to the carrying value of the assets. If
an impairment has occurred, the amount of the impairment recognized is
determined by estimating the fair value for the assets and recording a provision
for loss if the carrying value is greater than fair value.

     For assets identified to be disposed of in the future, the carrying value
of these assets is compared to the estimated fair value less the cost to sell to
determine if an impairment is required. Until the assets are disposed of, an
estimate of the fair value is redetermined when related events or circumstances
change.

  Revenue Recognition

     Revenues are recognized in the month that services are rendered.

  Income Taxes

     Prior to February 9, 2001, Williams Energy Partners L.P.'s operations wee
included in Williams' consolidated federal income tax return. Williams Energy
Partners L.P. income tax provisions were computed as though separate returns
were filed. Deferred income taxes were computed using the liability method and
were provided on all temporary differences between the financial basis and tax
basis of Williams Energy Partners L.P.'s assets and liabilities.

     Effective with the closing of the Partnership's initial public offering on
February 9, 2001 (See Note 1), the Partnership is not a taxable entity for
federal and state income tax purposes. Accordingly, no recognition has been
given to income taxes for financial reporting purposes. The tax on Partnership
net income is borne by the individual partners through the allocation of taxable
income. Net income for financial statement purposes may differ significantly
from taxable income of unitholders as a result of differences between the tax
basis and financial reporting basis of assets and liabilities and the taxable
income allocation requirements under the Partnership Agreement. The aggregate
difference in the basis of the Partnership's net assets for financial and

                                        43
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

tax reporting purposes cannot be readily determined because information
regarding each partner's tax attributes in the Partnership is not available to
the Partnership.

  Employee Stock-Based Awards

     Williams' employee stock-based awards are accounted for under provisions of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. Williams' fixed plan common stock
options do not result in compensation expense because the exercise price of the
stock options equals the market price of the underlying stock on the date of
grant.

     The Partnership's General Partner has issued incentive awards to Williams'
employees assigned to the Partnership. These awards are also accounted for under
provisions of Accounting Principles Board Opinion No. 25. Since the exercise
price of the unit awards is less than the market price of the underlying units
on the date of grant, compensation expense is recognized by the General Partner
and directly allocated to the Partnership.

  Environmental

     Environmental expenditures that relate to current or future revenues are
expensed or capitalized based upon the nature of the expenditures. Expenditures
that relate to an existing condition caused by past operations that do not
contribute to current or future revenue generation are expensed. Environmental
liabilities are recorded independently of any potential claim for recovery.
Receivables are recognized in cases where the realization of reimbursements of
remediation costs are considered probable. Accruals related to environmental
matters are generally determined based on site-specific plans for remediation,
taking into account prior remediation experience of Williams Energy Partners
L.P. and Williams.

  Earnings Per Unit

     Basic earnings per unit are based on the average number of common and
subordinated units outstanding. Diluted earnings per unit include any dilutive
effect of restricted unit grants.

  Recent Accounting Standards

     In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." This Statement supersedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of" and amends 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 Statement retains the basic framework of SFAS No.
121, resolves certain implementation issues of SFAS No. 121, extends
applicability to discontinued operations and broadens the presentation of
discontinued operations to include a component of an entity. The Statement is to
be applied prospectively and is effective for financial statements issued for
fiscal years beginning after December 15, 2001. The Statement is not expected to
have any initial impact on the Partnership's results of operations or financial
position.

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs and amends FASB Statement No.
19, "Financial Accounting and Reporting by Oil and Gas Producing Companies." The
Statement requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made and that the associated asset retirement
costs be capitalized as part of the carrying amount of the long-lived asset. The
Statement is effective for financial statements

                                        44
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

issued for fiscal years beginning after June 15, 2002. The Partnership plans to
adopt this standard in January 2003, and we are evaluating its effect on the
Partnership's results of operations and financial position.

     In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 establishes
accounting and reporting standards for business combinations and requires all
business combinations to be accounted for by the purchase method. The Statement
is effective for all business combinations for which the date of acquisition is
July 1, 2001 or later. SFAS No. 142 addresses accounting and reporting standards
for goodwill and other intangible assets. Under this Statement, goodwill and
intangible assets with indefinite useful lives will no longer be amortized, but
will be tested annually for impairment. The Statement becomes effective for all
fiscal years beginning after December 15, 2001. The Partnership will apply the
new rules on accounting for goodwill and other intangible assets beginning
January 1, 2002. Based on the amount of goodwill recorded as of December 31,
2001 application of the non-amortization provision of the Statement will result
in a decrease to amortization expense in future years of approximately $1.1
million.

     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This was followed in June 2000 by the
issuance of SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities," which amends SFAS No. 133. SFAS No. 133 and No. 138
establish accounting and reporting standards for derivative financial
instruments. The standards require that all derivative financial instruments be
recorded on the balance sheet at their fair value. Changes in fair value of
derivatives will be recorded each period in earnings if the derivative is not a
hedge. If a derivative qualifies for special hedge accounting, changes in the
fair value of the derivative will either be recognized in earnings as an offset
against the change in fair value of the hedged assets, liabilities or firm
commitments also recognized in earnings, or the changes in fair value will be
deferred on the balance sheet until the hedged item is recognized in earnings.
The ineffective portion of a derivative's change in fair value will be
recognized immediately in earnings. These standards were adopted on January 1,
2001. There was no impact to Williams Energy Partners L.P.'s financial position,
results of operations or cash flows from adopting these standards.

     The FASB issued SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." The Statement provides
guidance for determining whether a transfer of financial assets should be
accounted for as a sale or a secured borrowing and whether a liability has been
extinguished. The Statement is effective for recognition and reclassification of
collateral and for disclosures ending after December 15, 2000. The Statement
became effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after March 31, 2001. The initial
application of SFAS No. 140 had no impact on our results of operations and
financial position.

4. ACQUISITIONS AND DIVESTITURES

     Petroleum product terminal facilities and partial ownership interests in
several petroleum product terminals were acquired for cash during the periods
presented and are described below. All acquisitions, except the Aux Sable
transaction, were accounted for as purchases of businesses and the results of
operations of the acquired petroleum product terminals are included with the
combined results of operations from their acquisition dates.

     On December 31, 2001, the Partnership purchased an 8.5-mile, 8-inch natural
gas liquids pipeline in northeastern Illinois from Aux Sable Liquid Products
L.P. ("Aux Sable") for $8.9 million. The Partnership then entered into a
long-term lease arrangement under which Aux Sable is the sole lessee of these
assets. The Partnership has accounted for this transaction as a capital lease.
The lease expires in December 2016 and has a purchase option after the first
year. The minimum lease payments to be made by Aux Sable are $19.2 million in
total and $1.3 million per year over each of the next five years. Aux Sable has
the right to re-acquire the pipeline at the end of the lease for a de minimis
amount. The fair value of the lease at December 31, 2001, approximates its
carrying value.
                                        45
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In October 2001, the Partnership acquired the crude oil storage and
distribution assets of Geonet Gathering, Inc. ("Geonet") located in Gibson,
Louisiana. The Partnership acquired these assets with the intent to use the
facility as a crude storage and distribution facility with an affiliate company
as its primary customer. The purchase price was approximately $21.1 million,
consisting of $20.3 million in cash and $0.9 million in assumed liabilities. The
purchase price and allocation to assets acquired and liabilities assumed was as
follows (in thousands):

<Table>
<S>                                                           <C>
Purchase price:
  Cash paid, including transaction costs....................  $20,261
  Liabilities assumed.......................................      856
                                                              -------
  Total purchase price......................................  $21,117
                                                              =======
Allocation of purchase price:
  Current assets............................................  $    62
  Property, plant and equipment.............................    4,607
  Goodwill..................................................   13,719
  Intangible assets.........................................    2,729
                                                              -------
  Total allocation..........................................  $21,117
                                                              =======
</Table>

     Factors contributing to the recognition of goodwill are the market in which
the facility is located and the opportunity to enter into a throughput agreement
with an affiliate company, combined with the affiliate company's ability to
trade around those assets. Of the amount allocated to intangible assets, $2.0
million represents the value of the leases associated with this facility, which
have amortization periods of up to 25 years. The remaining $0.7 million
allocated to intangible assets represents covenants not-to-compete and has an
amortization period of five years. Total weighted average amortization period of
intangible assets is approximately 16 years. Of the consideration paid for the
facility, $1.0 million is held in escrow, pending final evaluation of necessary
repairs by the Partnership.

     In June 2001, the Partnership purchased two petroleum product terminals
located in Little Rock, Arkansas from TransMontaigne, Inc. ("TransMontaigne") at
a cost of $29.1 million, of which $20.2 million was allocated to property, plant
and equipment and $8.9 million to goodwill and other intangibles. Goodwill
resulting from this acquisition is being amortized over a 20-year period. The
final purchase price allocation has not been determined pending assessment of
the environmental liabilities assumed.

     In April 2001, the Partnership purchased a 6-mile pipeline for $0.3 million
from Equilon Pipeline Company LLC, enabling connection of its existing Dallas,
Texas area petroleum storage and distribution facility to Dallas Love Field. The
acquisition was made in conjunction with an agreement for the Partnership to
provide jet fuel delivery services into Dallas Love Field for Southwest
Airlines. In December 2001, the Partnership completed construction of additional
jet fuel storage tanks at its distribution facility in Dallas to support
delivery of jet fuel to the airport. Total cost of the pipeline and construction
of the additional jet fuel storage tanks totaled $5.5 million.

     In September 2000, a northeast petroleum product terminal facility in New
Haven, Connecticut was acquired from Wyatt Energy, Incorporated ("Wyatt") and
its affiliates for approximately $30.8 million.

     In March 2000, a 50 percent ownership interest in CITGO Petroleum
Corporation's petroleum product terminal located in Southlake, Texas was
acquired for approximately $0.3 million.

     In August 1999, three storage and distribution petroleum product terminals
and Terminal Pipeline Company ("TPC"), a wholly owned subsidiary of Amerada Hess
Corporation ("Hess"), were acquired from Hess for approximately $212 million.
The petroleum product terminals are located in Galena Park and Corpus Christi,
Texas and Marrero, Louisiana. TPC owned a common carrier pipeline that began at
a connection east

                                        46
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of the Houston Ship Channel and terminated at the Galena Park terminal. The
pipeline acquired from Hess was converted to private pipeline status during
2001.

     In February 1999, an additional 10 percent ownership interest in eight
petroleum product terminals was acquired from Murphy Oil USA, Inc. for
approximately $3.4 million, which increased the Partnership's ownership interest
to 78.9 percent from 68.9 percent. The petroleum product terminals, which are
now operated by the Partnership, are located in Georgia, North Carolina, South
Carolina, Tennessee and Virginia.

     In January 1999, 11 petroleum product terminals owned by Amoco Oil Company
("Amoco") were acquired. The petroleum product terminals, located in Alabama,
Florida, Mississippi, North Carolina, Ohio, South Carolina and Tennessee, were
acquired for approximately $6.9 million. In addition, Amoco's 60 percent
interest in a twelfth petroleum product terminal, located in Greensboro, North
Carolina, was acquired for approximately $1.0 million.

     The following summarized unaudited pro forma financial information for the
years ended December 31, 2001 and 2000 assumes each acquisition had occurred on
January 1 of the year immediately preceding the year of the acquisition (in
thousands):

<Table>
<Caption>
                                                               2001      2000
                                                              -------   -------
<S>                                                           <C>       <C>
Revenues:
  Williams Energy Partners L.P..............................  $86,054   $72,492
  Acquired businesses.......................................    5,552    14,354
                                                              -------   -------
     Combined...............................................  $91,606   $86,846
                                                              =======   =======
Net income:
  Williams Energy Partners L.P..............................  $21,747   $ 3,005
  Acquired businesses.......................................      659     1,083
                                                              -------   -------
     Combined...............................................  $22,406   $ 4,088
                                                              =======   =======
Basic net income per limited partner unit...................  $  1.95
                                                              =======
</Table>

     The pro forma results include operating results prior to the acquisitions
and adjustments to interest expense, depreciation expense and income taxes. The
pro forma consolidated results do not purport to be indicative of results that
would have occurred had the acquisitions been in effect for the periods
presented, nor do they purport to be indicative of results that will be obtained
in the future.

     Except where stated above, the purchase prices of the above acquisitions
were allocated to various categories of property, plant and equipment and
liabilities based upon the fair value of the assets acquired and liabilities
assumed.

     In October 2001, the Meridian, Mississippi terminal, previously reported
with the Terminals business segment, was sold for $1.7 million. The Partnership
recognized a gain of $1.1 million associated with the sale of the terminal,
which is included in other income.

                                        47
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment consists of the following (in thousands):

<Table>
<Caption>
                                                        DECEMBER 31,        ESTIMATED
                                                     -------------------   DEPRECIABLE
                                                       2001       2000        LIVES
                                                     --------   --------   -----------
<S>                                                  <C>        <C>        <C>
Construction work-in-progress......................  $  5,618   $  4,931
Land and right-of-way..............................    27,162     26,977
Buildings..........................................     7,828      7,404    30 years
Storage tanks......................................   162,451    147,858    30 years
Pipeline and station equipment.....................    52,822     42,529   30-67 years
Processing equipment...............................   122,161    110,214    30 years
Other..............................................     2,664      1,062   10-30 years
                                                     --------   --------
          Total....................................  $380,706   $340,975
                                                     ========   ========
</Table>

     Depreciation expense for the years ended December 31, 2001, 2000 and 1999
was $11.2 million, $9.3 million and $4.6 million, respectively.

6. MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

     Williams Energy Marketing & Trading, an affiliate customer, Farmland
Industries, Inc. and BP are major customers of the Partnership. No other
customer accounted for more than 10 percent of total revenues during 2001, 2000
and 1999. Williams Energy Marketing & Trading and BP are customers of the
petroleum product terminals segment. Farmland Industries, Inc. is a customer of
the ammonia pipeline segment. The percentage of revenues derived by customer is
provided below:

<Table>
<Caption>
                                                              2001    2000    1999
                                                              ----    ----    ----
<S>                                                           <C>     <C>     <C>
Customer A..................................................  10.3%    8.7%   15.1%
Customer B..................................................   0.8%    4.5%   13.9%
Williams Energy Marketing & Trading.........................  11.0%   24.0%   15.6%
                                                              ----    ----    ----
  Total.....................................................  22.1%   37.2%   44.6%
                                                              ====    ====    ====
</Table>

     The accounts receivable balance of Williams Energy Marketing & Trading
accounted for 8.2 percent and 15.0 percent of total accounts and affiliate
receivables at December 31, 2001 and 2000, respectively.

     Any issues impacting these industries could impact the Partnership's
overall exposure to credit risk. While sales to petroleum product terminal and
ammonia pipeline customers are generally unsecured, the financial condition and
creditworthiness of customers are routinely evaluated. The Partnership has the
ability with many of its contracts to sell stored customer products to recover
unpaid receivable balances, if necessary.

     Demand for nitrogen fertilizer has typically followed a combination of
weather patterns and growth in population, acres planted and fertilizer
application rates. Because natural gas is the primary feedstock for the
production of ammonia, the profitability of our customers is impacted by high
natural gas prices. To the extent they are unable to pass on higher costs to
their customers, they may reduce shipments through the pipeline.

     During 2001, the Partnership reserved $0.3 million for potential bad debt
losses. However, no accounts were written off during 2001.

7. EMPLOYEE BENEFIT PLANS

     All employees dedicated to, or otherwise supporting, Williams Energy
Partners L.P. are employees of The Williams Companies, Inc. and substantially
all of these employees are covered by Williams' noncontribu-

                                        48
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

tory defined benefit pension plans and health care plan that provides
postretirement medical benefits to certain retired employees. Contributions for
pension and postretirement medical benefits related to Williams Energy Partners
L.P.'s participation in the Williams' plans were $0.3 million, $0.2 million and
$0.2 million in 2001, 2000 and 1999, respectively.

     Williams maintains various defined contribution plans in which employees
supporting Williams Energy Partners L.P. are included. Williams Energy Partners
L.P.'s costs related to these plans were $0.5 million, $0.4 million and $0.2
million in 2001, 2000 and 1999, respectively.

8. RELATED PARTY TRANSACTIONS

     Williams Energy Marketing & Trading Company and Williams Refining &
Marketing, L.L.C., subsidiaries of The Williams Companies, Inc. and affiliates
of the Partnership, are significant customers at our petroleum product
terminals, representing 11.0 percent and 7.2 percent, respectively, of our total
revenues for the year ended December 31, 2001. The accounts receivable balance
of Williams Energy Marketing & Trading Company accounted for 8.2 percent and
15.0 percent of total accounts and affiliate receivables at December 31, 2001
and 2000, respectively. The accounts receivable balance of Williams Refining &
Marketing, L.L.C. was 2.4 percent and 0 percent of total accounts and affiliate
receivables at December 31, 2001 and 2000, respectively. The services we provide
them are conducted pursuant to various contracts between them and the
Partnership. As of December 31, 2001, 3 percent of the revenues from these
affiliates were generated under contracts renewing on a monthly basis, while 97
percent were generated under contracts with remaining terms in excess of one
year or that are renewed on an annual basis.

     Williams allocates its affiliates, including the Partnership, for certain
corporate administrative expenses, which are directly identifiable or allocable
to the affiliates. Prior to the initial public offering, allocated general
corporate expenses were based on a three-factor formula that considered
operating margins, property, plant and equipment and payroll. Beginning with the
closing date of the initial public offering, the general partner, through
provisions included in the Omnibus Agreement, has limited the amount of general
and administrative costs allocated to the Partnership. The additional general
and administrative costs incurred by the general partner, but not charged to the
Partnership, totaled $10.4 million for the period February 10, 2001 through
December 31, 2001. A summary of the general and administrative expenses charged
to the Partnership is as follows (in thousands):

<Table>
<Caption>
                                                             YEAR ENDED DECEMBER 31,
                                                            -------------------------
                                                             2001     2000      1999
                                                            ------   -------   ------
<S>                                                         <C>      <C>       <C>
Direct costs..............................................  $  562   $ 5,239   $3,351
Allocated costs...........................................   8,393     6,724    2,107
                                                            ------   -------   ------
          Total general and administrative expenses.......  $8,955   $11,963   $5,458
                                                            ======   =======   ======
</Table>

     The above costs are reflected in affiliate general and administrative
expenses in the accompanying consolidated statements of income. In management's
estimation, the allocation methodologies used are reasonable and the direct and
allocated expenses represent amounts that would have been incurred on a stand-
alone basis.

     The affiliate payable primarily represents amounts owed to affiliates for
general and administrative expenses and operational costs incurred on the
Partnership's behalf. Affiliate payroll and benefit costs are amounts due to
affiliate companies for salary and wages and associated charges for employees
directly assigned to the Partnership. Long-term affiliate payables represent
amounts due to an affiliate for certain non-compete agreements and for amounts
associated with long-term incentive compensation.

     Prior to February 9, 2001, the Partnership was a participant in Williams'
cash management program. As of December 31, 2000, the Partnership's affiliate
note payable consisted of an unsecured promissory note

                                        49
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

agreement with Williams for advances from Williams. The advances were due on
demand; however, in February 2001, a portion of the advances was refinanced with
debt and equity offerings (see Note 1). Williams contributed the remaining
advances in exchange for equity of the Partnership. Therefore, the affiliate
note payable was classified as noncurrent at December 31, 2000.

     Affiliate interest income or expense is calculated at the London Interbank
Offered Rate ("LIBOR") plus a spread based on the outstanding balance of the
note receivable or note payable with Williams. The spread is equivalent to the
spread above LIBOR rates on Williams' revolving credit facility. The interest
rate of the note with Williams was 7.6 percent at December 31, 2000. As the
interest rate on the affiliate note payable is variable, the carrying value of
the affiliate note payable at December 31, 2000 approximates its fair value.

9. INCOME TAXES

     The provision for income taxes is as follows (in thousands):

<Table>
<Caption>
                                                               YEAR ENDED DECEMBER 31,
                                                              -------------------------
                                                              2001     2000      1999
                                                              -----   -------   -------
<S>                                                           <C>     <C>       <C>
Current:
  Federal...................................................  $ --    $   --    $   --
  State.....................................................    --        --        --
Deferred:
  Federal...................................................   163     1,617     3,646
  State.....................................................    24       225       498
                                                              ----    ------    ------
                                                              $187    $1,842    $4,144
                                                              ====    ======    ======
</Table>

     Reconciliations from the provision for income taxes at the U.S. federal
statutory rate to the effective tax rate for the provision for income taxes are
as follows (in thousands):

<Table>
<Caption>
                                                               YEAR ENDED DECEMBER 31,
                                                              -------------------------
                                                              2001     2000      1999
                                                              -----   -------   -------
<S>                                                           <C>     <C>       <C>
Income taxes at statutory rate..............................  $172    $1,696    $3,819
Increase resulting from:
  State taxes, net of federal income tax benefit............    15       146       324
  Other.....................................................    --        --         1
                                                              ----    ------    ------
Provision for income taxes..................................  $187    $1,842    $4,144
                                                              ====    ======    ======
</Table>

     Significant components of deferred tax liabilities and assets as of
December 31, 2000, are as follows (in thousands):

<Table>
<S>                                                           <C>
Deferred tax liabilities:
  Property, plant and equipment.............................  $39,798
Deferred tax assets:
  Net operating loss carryforward...........................   25,270
  Environmental liability...................................      739
                                                              -------
       Total deferred tax assets............................  $26,009
                                                              -------
       Net deferred tax liabilities.........................  $13,789
                                                              =======
</Table>

     Williams Energy Partners L.P. recognized a pre-initial public offering
federal net operating loss for income tax purposes of $3.9 million and $57.0
million for the years 2001 and 2000, respectively. The $3.9 million federal net
operating loss expires in 2021. The $57.0 million federal net operating loss
carryforward expires in 2020. Payments to Williams in lieu of income taxes were
$2.3 million in 1999.

                                        50
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     As a result of the initial public offering and the concurrent transactions
on February 9, 2001 (see Note 1), the net deferred tax liability on that date
was assumed by Williams, in exchange for an additional equity investment in
Williams Energy Partners L.P.

10. LONG-TERM DEBT

     Long-term debt and available borrowing capacity at December 31, 2001, were
$139.5 million and $35.5 million, respectively. At December 31, 2001, the
Partnership had a $175.0 million bank credit facility, led by Bank of America.
The credit facility was comprised of a $90.0 million term loan facility and an
$85.0 million revolving credit facility, which includes a $73.0 million
acquisition sub-facility and a $12.0 million working capital sub-facility. On
February 9, 2001, the OLP borrowed $90.0 million under the term loan facility
and $0.1 million under the acquisition sub-facility. The $0.1 million borrowed
under the acquisition sub-facility was repaid in July 2001. In June 2001, the
Partnership borrowed $29.5 million under the acquisition facility to fund the
purchase of two terminals in Little Rock, Arkansas from TransMontaigne. In
October 2001, the Partnership borrowed $20.0 million to fund the acquisition of
the Gibson, Louisiana terminal from Geonet. The credit facility's term extends
through February 5, 2004, with all amounts due at that time. Borrowings under
the credit facility carry an interest rate equal to the LIBOR plus a spread from
1.0 percent to 1.5 percent, depending on the OLP's leverage ratio. Interest is
also assessed on the unused portion of the credit facility at a rate from 0.2
percent to 0.4 percent, depending on the OLP's leverage ratio. The OLP's
leverage ratio is defined as the ratio of consolidated total debt to
consolidated earnings before interest, income taxes, depreciation and
amortization for the period of the four fiscal quarters ending on such date.
Closing fees associated with the initiation of the credit facility were $0.9
million, which are being amortized over the life of the facility. Average
interest rates at December 31, 2001 were 3.1 percent for the term loan facility
and 3.3 percent for the acquisition sub-facility. Cash paid for interest for the
twelve months ended December 31, 2001 was $6.7 million. Interest capitalized was
$0.1 million in 2001. The fair value of the long-term debt approximates its
carrying value, because of the floating interest rate applied to the debt
facility.

11. LONG-TERM INCENTIVE PLAN

     In February 2001, the general partner adopted the Williams Energy Partners'
Long-Term Incentive Plan for Williams' employees who perform services for
Williams Energy Partners L.P. and directors of the general partner. The
Long-Term Incentive Plan consists of two components, phantom units and unit
options. The Long-Term Incentive Plan permits the grant of awards covering an
aggregate of 700,000 common units. The Long-Term Incentive Plan is administered
by the compensation committee of the general partner's board of directors.

     In April 2001, the general partner issued grants of 92,500 phantom units to
certain key employees associated with the Partnership's initial public offering
in February 2001. These one-time initial public offering phantom units will vest
over a 34-month period ending on February 9, 2004, and are subject to forfeiture
if employment is terminated prior to vesting. These units are subject to early
vesting if the Partnership achieves certain performance measures. The
Partnership recognized $0.7 million of compensation expense associated with
these grants in 2001. The fair market value of the phantom units associated with
this grant was $2.7 million on the grant date.

     In April 2001, the general partner issued grants of 64,200 phantom units
associated with the annual incentive compensation plan. The actual number of
units that will be awarded under this grant will be determined by the
Partnership on February 9, 2004. At that time, the Partnership will assess
whether certain performance criteria have been met and determine the number of
units that will be awarded, which could range from zero units up to a total of
128,400 units. These units are also subject to forfeiture if employment is
terminated prior to February 9, 2004. These awards do not have an early vesting
feature. The Partnership recognized $1.3 million of deferred compensation
expense associated with these awards in 2001. The fair market value of the
phantom units associated with this grant was $5.4 million on December 31, 2001.

                                        51
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Certain employees of Williams dedicated to or otherwise supporting Williams
Energy Partners L.P. receive stock-based compensation awards from Williams.
Williams has several plans providing for common-stock-based awards to employees
and to nonemployee directors. The plans permit the granting of various types of
awards including, but not limited to, stock options, stock-appreciation rights,
restricted stock and deferred stock. Awards may be granted for no consideration
other than prior and future services or based on certain financial performance
targets being achieved. The purchase price per share for stock options and the
grant price for stock-appreciation rights may not be less than the market price
of the underlying stock on the date of grant. Depending upon terms of the
respective plans, stock options generally become exercisable in one-third
increments each year from the date of the grant or after three or five years,
subject to accelerated vesting if certain future Williams' stock prices or
specific Williams' financial performance targets are achieved. Stock options
expire 10 years after grant.

     The following summary reflects Williams' stock option activity for 2001,
2000 and 1999, for those employees principally supporting Williams Energy
Partners L.P. operations:

<Table>
<Caption>
                                            2001                  2000                  1999
                                     -------------------   -------------------   -------------------
                                               WEIGHTED-             WEIGHTED-             WEIGHTED-
                                                AVERAGE               AVERAGE               AVERAGE
                                               EXERCISE              EXERCISE              EXERCISE
                                     OPTIONS     PRICE     OPTIONS     PRICE     OPTIONS     PRICE
                                     -------   ---------   -------   ---------   -------   ---------
<S>                                  <C>       <C>         <C>       <C>         <C>       <C>
Outstanding -- beginning of year...  73,302     $34.58     54,002     $29.79     39,402     $24.72
Granted............................  31,439      34.77     20,800      45.76     16,600      40.26
Forfeited..........................  (3,000)     43.14         --         --         --         --
Exercised..........................  (2,500)     30.14     (1,500)     17.31     (2,000)     16.69
                                     ------                ------                ------
Outstanding -- ending of year......  99,241      34.49     73,302      34.58     54,002      29.79
                                     ======                ======                ======
Exercisable at end of year.........  67,802      34.36     73,302      34.58     54,002      29.79
                                     ======                ======                ======
</Table>

     The following summary provides information about outstanding and
exercisable Williams' stock options, held by employees principally supporting
Williams Energy Partners L.P. operations, at December 31, 2001:

<Table>
<Caption>
                                                                                WEIGHTED-
                                                                   WEIGHTED-     AVERAGE
                                                                    AVERAGE     REMAINING
                                                                   EXERCISE    CONTRACTUAL
RANGE OF EXERCISE PRICES                                 OPTIONS     PRICE        LIFE
------------------------                                 -------   ---------   -----------
<S>                                                      <C>       <C>         <C>
$16.13 to $23.00.......................................  17,168     $19.81      5.0 years
$27.38 to $34.77.......................................  47,673      33.40      8.2 years
$39.94 to $46.06.......................................  34,400      43.32      8.0 years
                                                         ------
          Total........................................  99,241      34.49      7.6 years
                                                         ======
</Table>

     The estimated fair value at the date of grant of options for Williams'
common stock granted in 2001, 2000 and 1999, using the Black-Scholes option
pricing model, is as follows:

<Table>
<Caption>
                                                              2001     2000     1999
                                                             ------   ------   ------
<S>                                                          <C>      <C>      <C>
Weighted-average grant date fair value of options for
  Williams' common stock granted during the year...........  $10.93   $15.44   $11.90
Assumptions:
     Dividend yield........................................     1.9%     1.5%     1.5%
     Volatility............................................    35.0%    31.0%    28.0%
     Risk-free interest rate...............................     4.8%     6.5%     5.6%
     Expected life (years).................................     5.0      5.0      5.0
</Table>

                                        52
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Pro forma net income, assuming Williams Energy Partners L.P. had applied
the fair-value method of SFAS No. 123, "Accounting for Stock-Based Compensation"
in measuring compensation costs beginning with 1999 employee stock-based awards,
are as follows (in thousands, except per unit amounts):

<Table>
<Caption>
                                     2001                   2000                   1999
                             --------------------   --------------------   --------------------
                             PRO FORMA   REPORTED   PRO FORMA   REPORTED   PRO FORMA   REPORTED
                             ---------   --------   ---------   --------   ---------   --------
<S>                          <C>         <C>        <C>         <C>        <C>         <C>
Net income.................   $21,683    $21,747     $2,861      $3,005     $6,579      $6,766
                              =======    =======     ======      ======     ======      ======
Net income per limited
  partner unit.............   $  1.86    $  1.87
                              =======    =======
</Table>

     Pro forma amounts for 2000 include the total compensation expense from the
awards made in 2000, as these awards fully vested in 2000 as a result of the
accelerated vesting provisions. Pro forma amounts for 1999 include the remaining
total compensation expense from Williams' awards made in 1998 and the total
compensation expense from Williams' awards made in 1999 as a result of the
accelerated vesting provisions. Since compensation expense from stock options is
recognized over the future years' vesting period for pro forma disclosure
purposes, and additional awards generally are made each year, pro forma amounts
may not be representative of future years' amounts.

12. SEGMENT DISCLOSURES

     Management evaluates performance based upon segment profit or loss from
operations, which includes revenues from affiliate and external customers,
operating expenses, depreciation and affiliate general and administrative
expenses. The accounting policies of the segments are the same as those
described in Note 3 -- Summary of Significant Accounting Policies. Affiliate
revenues are accounted for as if the sales were to unaffiliated third parties.

     The Partnership's reportable segments are strategic business units that
offer different products and services. The segments are managed separately
because each segment requires different marketing strategies and business
knowledge.

<Table>
<Caption>
                        YEAR ENDED DECEMBER 31, 2001      YEAR ENDED DECEMBER 31, 2000      YEAR ENDED DECEMBER 31, 1999
                       -------------------------------   -------------------------------   -------------------------------
                       PETROLEUM                         PETROLEUM                         PETROLEUM
                        PRODUCT    AMMONIA                PRODUCT    AMMONIA                PRODUCT    AMMONIA
                       TERMINALS   PIPELINE    TOTAL     TERMINALS   PIPELINE    TOTAL     TERMINALS   PIPELINE    TOTAL
                       ---------   --------   --------   ---------   --------   --------   ---------   --------   --------
                                                                 (IN THOUSANDS)
<S>                    <C>         <C>        <C>        <C>         <C>        <C>        <C>         <C>        <C>
Revenues:
  Third party
    customers........  $ 55,611    $14,544    $ 70,155   $ 43,367    $11,710    $ 55,077   $ 25,330    $12,139    $ 37,469
  Affiliate
    customers........    15,899         --      15,899     17,415         --      17,415      6,919         --       6,919
                       --------    -------    --------   --------    -------    --------   --------    -------    --------
    Total revenues...    71,510     14,544      86,054     60,782     11,710      72,492     32,249     12,139      44,388
Operating expenses...    33,270      4,044      37,314     29,496      3,993      33,489     15,108      3,527      18,635
Depreciation and
  amortization.......    11,099        649      11,748      8,688        645       9,333      3,969        641       4,610
Affiliate general and
  administrative
  expenses...........     7,641      1,314       8,955     10,351      1,612      11,963      3,915      1,543       5,458
                       --------    -------    --------   --------    -------    --------   --------    -------    --------
Segment profit.......  $ 19,500    $ 8,537    $ 28,037   $ 12,247    $ 5,460    $ 17,707   $  9,257    $ 6,428    $ 15,685
                       ========    =======    ========   ========    =======    ========   ========    =======    ========
Total assets.........  $368,409    $31,035    $399,444   $296,819    $21,686    $318,505   $261,425    $21,914    $283,339
Goodwill.............  $ 22,282    $    --    $ 22,282   $     --    $    --    $     --   $     --    $    --    $     --
Additions to
  long-lived
  assets.............  $ 64,590    $   330    $ 64,920   $ 41,348    $   401    $ 41,749   $227,234    $   384    $227,618
</Table>

                                        53
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Non-cash charges for incentive compensation costs, included in 2001
affiliate general and administrative expenses, were $1.7 million for the
petroleum product terminal operations and $0.3 million for the ammonia pipeline
operations.

13. COMMITMENTS AND CONTINGENCIES

     The Partnership leases land, tanks and related terminal equipment at the
Gibson terminal facility. Minimum future lease payments for these leases as of
December 31, 2001, are $0.1 million for each of the next five years and $1.7
million thereafter. The lease payments can be canceled after 2006 and include
provisions for renewal of the lease at five-year increments which can extend the
lease for a total of 25 years.

     In conjunction with the 1999 acquisition of the Gulf Coast marine terminals
from Hess, Hess has disclosed to the Partnership all suits, actions, claims,
arbitrations, administrative, governmental investigation or other legal
proceedings pending or threatened, against or related to the assets acquired by
the Partnership, which arise under environmental law. Hess agreed to indemnify
the Partnership against all environmental claims and losses arising from any
matters related to the pre-acquisition period through July 30, 2014. In the
event that any pre-acquisition releases of hazardous substances are identified
by the Partnership prior to July 20, 2004, the Partnership will be liable for
the first $2.5 million of environmental liabilities, Hess will be liable for the
next $12.5 million of losses, and the Partnership will assume responsibility for
any losses in excess of $15.0 million. Hess has indemnified the Partnership
against any pre-acquisition fines and claims that may be imposed or asserted
against the Partnership under environmental laws. At both December 31, 2001 and
December 31, 2000, the Partnership had accrued $0.6 million for costs that may
not be recoverable under Hess' indemnification.

     WES has agreed to indemnify the Partnership against any covered
environmental losses, up to $15.0 million, relating to assets it contributed to
the Partnership that arose prior to February 9, 2001, that become known within
three years after February 9, 2001, and that exceed all amounts recovered or
recoverable by the Partnership under contractual indemnities from third parties
or under any applicable insurance policies. Covered environmental losses are
those non-contingent environmental losses, costs, damages and expenses suffered
or incurred by the Partnership arising from correction of violations of, or
performance of remediation required by, environmental laws in effect at February
9, 2001, due to events and conditions associated with the operation of the
assets and occurring before February 9, 2001.

     Estimated liabilities for environmental costs were $5.4 million and $1.9
million at December 31, 2001 and 2000, respectively. Management estimates that
expenditures associated with these environmental remediation liabilities will be
paid over the next five to ten years. Receivables associated with these
environmental liabilities of $5.1 million and $0.3 million at December 31, 2001
and 2000, respectively, have been recognized as recoverable from WES and third
parties. These estimates, provided on an undiscounted basis, were determined
based primarily on data provided by a third-party environmental evaluation
service. These liabilities have been classified as current or non-current based
on management's estimates regarding the timing of actual payments.

     During 2001, the Partnership recorded an environmental liability of $2.6
million at its New Haven, Connecticut facility, which was acquired in September
2000. This liability was based on third-party environmental engineering
estimates completed as part of a Phase II environmental assessment, routinely
required by the State of Connecticut to be conducted by the purchaser following
the acquisition of a petroleum storage facility. The Partnership will complete a
Phase III environmental assessment at this facility during the second or third
quarter of 2002, and the environmental liability could change materially based
on this more thorough analysis. The environmental liabilities at this location
are covered by the WES environmental indemnifications to the Partnership.

                                        54
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     WNGL will indemnify the Partnership for right-of-way defects or failures in
our ammonia pipeline easements for 15 years after the initial public offering
closing date. WES has also indemnified the Partnership for right-of-way defects
or failures associated with the marine terminal facilities at Galena Park,
Corpus Christi and Marrero for 15 years after the initial public offering
closing date.

     The Partnership is party to various other claims, legal actions and
complaints arising in the ordinary course of business. In the opinion of
management, the ultimate resolution of all claims, legal actions and complaints
after consideration of amounts accrued, insurance coverage or other
indemnification arrangements will not have a material adverse effect upon the
Partnership's future financial position, results of operations or cash flows.

14. QUARTERLY FINANCIAL DATA (UNAUDITED)

     Summarized quarterly financial data is as follows (in thousands, except per
unit amounts).

<Table>
<Caption>
                                                  FIRST    SECOND     THIRD    FOURTH
                                                 QUARTER   QUARTER   QUARTER   QUARTER
                                                 -------   -------   -------   -------
<S>                                              <C>       <C>       <C>       <C>
2001
Revenues.......................................  $20,286   $21,646   $21,778   $22,344
Operating and depreciation and amortization
  expenses.....................................   11,226    11,126    12,060    14,650
Net income.....................................    3,904     7,394     5,663     4,786
Basic and diluted net income per limited
  partner unit.................................     0.31      0.64      0.49      0.42
2000
Revenues.......................................  $17,856   $18,764   $16,988   $18,884
Operating and depreciation expenses............    8,887    11,052     9,582    13,301
Net income.....................................    2,168       669       587      (419)
</Table>

     Basic and diluted net income for the first quarter of 2001 is calculated on
the Limited Partners' interest in net income applicable for the period after
February 9, 2001, through the end of the quarter. Revenues and expenses in 2001
were impacted by the acquisition of two terminals from TransMontaigne in June
2001 and the Gibson terminal from Geonet in October 2001. See Note
4 -- Acquisitions. Second quarter 2001 revenues were impacted by a $1.0 million
throughput deficiency billing to an ammonia pipeline customer. Fourth quarter
net income included a gain of $1.1 million on the sale of the Meridian,
Mississippi terminal. Interest expense for 2001 reflects the payment and
forgiveness of the predecessor company's affiliate debt and new borrowings by
the Partnership. Net income was also impacted by incentive compensation costs of
$2.0 million during 2001.

     Revenues and expenses in 2000 were impacted by the Southlake terminal
acquisition in March 2000 and the marine terminal acquisition from Wyatt Energy
in September 2000. Second quarter 2000 expenses included a $0.5 million charge
from the write-off of an unsuccessful business transaction. Third quarter 2000
expenses included a $0.6 million environmental accrual. A throughput revenue
deficiency billing related to the August 1999 acquisition of certain assets from
Amerada Hess resulted in adjustments to revenues of $0.7 million impacting the
first and second quarters of 2000.

                                        55
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. DISTRIBUTIONS

     On May 15, 2001, the Partnership paid cash distributions of $0.292 per unit
on its outstanding common and subordinated units to unitholders of record at the
close of business on May 1, 2001. This distribution represented the minimum
quarterly distribution for the 50-day period following the initial public
offering closing date, which included February 10, 2001 through March 31, 2001.
The total distributions paid were $3.4 million.

     On August 14, 2001, the Partnership paid cash distributions of $0.5625 per
unit on its outstanding common and subordinated units to unitholders of record
at the close of business on August 2, 2001. The total distributions paid were
$6.5 million.

     On November 14, 2001, the Partnership paid cash distributions of $0.5775
per unit on its outstanding common and subordinated units to unitholders of
record at the close of business on November 1, 2001. The total distributions
paid were $6.7 million.

     Total distributions paid during 2001 were as follows (in thousands except
per unit amounts):

<Table>
<Caption>
                                                               AMOUNT    DISTRIBUTION
                                                              PER UNIT      AMOUNT
                                                              --------   ------------
<S>                                                           <C>        <C>
Common Unitholders..........................................   $1.43       $ 8,134
Subordinated Unitholders....................................   $1.43         8,134
General Partner.............................................   $1.43           331
                                                                           -------
          Total.............................................               $16,599
                                                                           =======
</Table>

16. EARNINGS PER UNIT

     The following table provides details of the basic and diluted earnings per
unit computations (in thousands, except per unit amounts):

<Table>
<Caption>
                                                     FOR THE YEAR ENDED DECEMBER 31, 2001
                                                    --------------------------------------
                                                      INCOME          UNITS       PER UNIT
                                                    (NUMERATOR)   (DENOMINATOR)    AMOUNT
                                                    -----------   -------------   --------
<S>                                                 <C>           <C>             <C>
Limited partners' interest in income applicable to
  the period after February 9, 2001...............    $21,217
Basic earnings per common and subordinated unit...    $21,217        11,359        $1.87
Effect of dilutive restrictive unit grants........         --            11           --
                                                      -------        ------        -----
Diluted earnings per common and subordinated
  unit............................................    $21,217        11,370        $1.87
                                                      =======        ======        =====
</Table>

     Units reported as dilutive securities are related to restricted unit grants
associated with the one-time initial public offering award (see Note 11).

17. PARTNERS' CAPITAL

     Of the 5,679,694 common units outstanding at December 31, 2001, 4,600,000
are held by the public, with the remaining 1,079,694 held by affiliates of the
Partnership. All of the 5,679,694 subordinated units are held by affiliates of
the Partnership.

     During the subordination period, the Partnership can issue up to 2,839,847
additional common units without obtaining unitholder approval. In addition, the
general partner can issue an unlimited number of common units as follows:

     - Upon exercise of the underwriters' over-allotment option;

     - Upon conversion of the subordinated units;

                                        56
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     - Under employee benefit plans;

     - Upon conversion of the general partner interest and incentive
       distribution rights as a result of a withdrawal of the general partner;

     - In the event of a combination or subdivision of common units;

     - In connection with an acquisition or a capital improvement that increases
       cash flow from operations per unit on a pro forma basis; or

     - If the proceeds of the issuance are used exclusively to repay up to $40.0
       million of our indebtedness.

     The subordination period will end when the Partnership meets certain
financial tests provided for in the Partnership agreement but it generally
cannot end before December 31, 2005.

     The limited partners holding common units of the Partnership have the
following rights, among others:

     - Right to receive distributions of the Partnership's available cash within
       45 days after the end of each quarter;

     - Right to transfer common unit ownership to substitute limited partners;

     - Right to receive an annual report, containing audited financial
       statements and a report on those financial statements by our independent
       public accountants within 120 days after the close of the fiscal year
       end;

     - Right to receive information reasonably required for tax reporting
       purposes within 90 days after the close of the calendar year;

     - Right to vote according to the limited partners' percentage interest in
       the Partnership on any meeting that may be called by the general partner.
       However, if any person or group other than the general partner and its
       affiliates acquires beneficial ownership of 20 percent or more of any
       class of units, that group or person loses voting rights on all of its
       units; and

     - Right to inspect our books and records at the unitholders' own expense.

     Net income is allocated to the general partner and limited partners based
on their proportionate share of cash distributions for the period. Cash
distributions to the general partner and limited partners are made based on the
following table:

<Table>
<Caption>
                                                               PERCENTAGE OF DISTRIBUTIONS
                                                              -----------------------------
ANNUAL DISTRIBUTION AMOUNT (PER UNIT)                         UNITHOLDERS   GENERAL PARTNER
-------------------------------------                         -----------   ---------------
<S>                                                           <C>           <C>
Up to $2.31.................................................      98               2
Above $2.31 up to $2.62.....................................      85              15
Above $2.62 up to $3.15.....................................      75              25
Above $3.15.................................................      50              50
</Table>

     In the event of a liquidation, all property and cash in excess of that
required to discharge all liabilities will be distributed to the Partners in
proportion to the positive balances in their respective tax-basis capital
accounts.

18. REGISTRATION STATEMENT (UNAUDITED)

     The Partnership plans to file a shelf registration statement to register
common units representing limited partner interests and debt securities,
including guarantees. The Partnership, exclusive of its investment in all of its
wholly-owned operating limited partnerships and subsidiaries, has no independent
assets or operations. If a series of debt securities is guaranteed, such series
will be guaranteed by all of the Partnership's operating limited partnerships
and subsidiaries on a full and unconditional and joint and several basis.

                                        57
<PAGE>
                         WILLIAMS ENERGY PARTNERS L.P.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

19. OTHER EVENTS

     On February 14, 2002, the Partnership paid cash distributions of $0.59 per
unit on its outstanding common and subordinated units to unitholders of record
at the close of business on February 1, 2002. The total distribution, including
distributions paid to the general partner on its equivalent units, was $6.9
million.

     With the payment of the $0.59 per unit distribution on February 14, 2002,
the first early vesting performance measure of the one-time initial public
offering grant was achieved, and 46,250 units associated with this grant vested
on that date. The Partnership recognized additional compensation expense of $1.0
million with the vesting of these units in February 2002.

     In January 2002, the Partnership borrowed $8.5 million to finance the
acquisition of a pipeline from Aux Sable and remitted those funds to complete
the transaction. The Partnership entered into a long-term lease arrangement with
Aux Sable under which Aux Sable is the sole lessee of these assets. The
transaction will be accounted for as a capital lease.

                                        58
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

     None

                                    PART III

ITEM 10. PARTNERSHIP MANAGEMENT

     Our general partner manages our operations and activities. Unitholders do
not directly or indirectly participate in our management or operations. Our
general partner owes a fiduciary duty to the unitholders. Our general partner is
liable, as a general partner, for all of our debts (to the extent not paid from
our assets), except for specific non-recourse indebtedness or other obligations.
Whenever possible, our general partner intends to incur indebtedness or other
obligations that are non-recourse.

     Three members of the board of directors of our general partner serve on a
conflicts committee to review specific matters, which the board of directors
believes may involve conflicts of interest. When a conflict arises, the
conflicts committee will determine if the resolution of the conflict of interest
is fair and reasonable to us. The members of the conflicts committee are not
officers or employees of our general partner or directors, officers or employees
of its affiliates. Any matters approved by the conflicts committee are
conclusively deemed to be fair and reasonable to us, approved by all of our
partners, and not a breach by our general partner of any duties it may owe us or
our unitholders. In addition, the members of the conflicts committee also serve
on an audit committee, which reviews our external financial reporting,
recommends engagement of our independent auditors and reviews procedures for
internal auditing and the adequacy of our internal accounting controls and on
the compensation committee that oversees compensation decisions for the officers
of Williams GP LLC as well as the compensation plans described below.

     As is commonly the case with publicly-traded limited partnerships, we are
managed and operated by the officers and are subject to the oversight of the
directors of our general partner. All of our personnel are employees of our
affiliates.

     Some officers of our general partner may spend a substantial amount of time
managing the business and affairs of The Williams Companies, Inc. and its
affiliates. These officers may face a conflict regarding the allocation of their
time between our business and the other business interests of The Williams
Companies, Inc. Our general partner causes its officers to devote as much time
as is necessary for the proper conduct of our business and affairs. Steven J.
Malcolm and Phillip D. Wright devote approximately three percent of their time
to Williams Energy Partners. Craig R. Rich devotes approximately fifty percent
of his time to our operations and Don R. Wellendorf, our Senior Vice President,
Chief Financial Officer and Treasurer, devotes approximately seventy-five
percent of his time to our operations. Jay A. Wiese devotes ninety-five percent
of his time to our operations. The board of directors of the general partner is
presently composed of seven directors.

                                        59
<PAGE>

DIRECTORS AND EXECUTIVE OFFICERS OF WILLIAMS GP LLC

     The following table sets forth certain information with respect to the
executive officers and members of the board of directors of our general partner.
Executive officers and directors are elected for one-year terms.

<Table>
<Caption>
NAME                                        AGE              POSITION WITH GENERAL PARTNER
----                                        ---              -----------------------------
<S>                                         <C>   <C>
Steven J. Malcolm.........................  53    Chief Executive Officer and Chairman of the Board
Phillip D. Wright.........................  46    President and Chief Operating Officer, Director
Don R. Wellendorf.........................  49    Senior Vice President, Chief Financial Officer and
                                                    Treasurer, Director
Jay A. Wiese..............................  44    Vice President, Terminal Services and Development
Craig R. Rich.............................  50    General Counsel
Keith E. Bailey...........................  58    Director
William A. Bruckmann, III.................  50    Director
Don J. Gunther............................  63    Director
William W. Hanna..........................  65    Director
</Table>

     Steven J. Malcolm serves as the Chief Executive Officer and Chairman of the
Board of Directors of our general partner and was elected as Chief Executive
Officer on January 7, 2001, and Director on February 9, 2001. He is currently
President and Chief Executive Officer of The Williams Companies, Inc. and has
served in the capacity as President since September 2001, and as Chief Executive
Officer since January 2002. From 1998 to September 2001, he served as President
and Chief Executive Officer of Williams Energy Services, LLC. From 1994 to 1998,
he served as Senior Vice President for The Williams Companies, Inc.'s midstream
gas and liquids division, and from 1993 to 1994, worked as Senior Vice President
of the mid-continent region for Williams Field Services. From 1984 to 1993, he
held various positions with Williams Natural Gas Company, including director of
business development, director of gas management and vice president of gas
management and supply.

     Phillip D. Wright serves as President, Chief Operating Officer and Director
of our general partner and was elected as President and Chief Operating Officer
on January 7, 2001, and Director on February 9, 2001. He is currently President
and Chief Executive Officer for Williams Energy Services, LLC and has served in
that capacity since September 2001. From 1996 to September 2001, he served as
Senior Vice President of Enterprise Development and Planning for Williams Energy
Services, LLC. From 1989 to 1996 he held various senior management positions
with The Williams Companies, Inc.'s primary refined product pipeline, Williams
Pipe Line Company, Williams Energy Ventures, Inc. and Williams Energy Services
Company. Prior to 1989, he spent 13 years working for Conoco, Inc.

     Don R. Wellendorf serves as Senior Vice President, Chief Financial Officer,
Treasurer and Director of our general partner and was elected as Senior Vice
President, Chief Financial Officer and Treasurer on January 7, 2001, and as
Director on February 9, 2001. Since 1998, he has served as Vice President of
Strategic Development and Planning for Williams Energy Services, LLC. Prior to
The Williams Companies, Inc.'s merger with MAPCO Inc. in 1998, he was Vice
President and Treasurer for MAPCO from 1995 to 1998. From 1994 to 1995, he
served as Vice President and Corporate Controller for MAPCO. He began his career
in 1979 as an accountant with MAPCO and held various accounting positions with
MAPCO from 1979 to 1994.

     Jay A. Wiese serves as Vice President, Terminal Services and Development of
our general partner and was elected on January 7, 2001. He is currently Managing
Director, Terminal Services and Commercial Development for Williams Energy
Services, LLC and has served in that capacity since 2000. From 1995 to 2000, he
served as Director, Terminal Services and Commercial Development of The Williams
Companies, Inc.'s terminal distribution business. Prior to 1995, Mr. Wiese held
various operations, marketing and business development positions with Williams
Pipe Line Company, Williams Energy Ventures, Inc. and Williams Energy Services
Company. He joined Williams Pipe Line Company in 1982.

     Craig R. Rich serves as General Counsel of our general partner and was
elected on January 7, 2001. He is currently Associate General Counsel of
Williams Energy Services, LLC and has served in that capacity since 1996. From
1993 to 1996, he served as General Counsel of The Williams Companies, Inc.'s
midstream gas

                                        60
<PAGE>

and liquids division. Prior to that time, Mr. Rich was a Senior Attorney
representing Williams Gas Pipeline-West. He joined Williams in 1985.

     Keith E. Bailey serves as a Director of the general partner and was elected
on February 9, 2001. He is currently Chairman of the Board of The Williams
Companies, Inc. and served in that capacity since 1994. He served as President
of The Williams Companies, Inc. from 1992 to 1994 and served as its Chief
Executive Officer from 1994 to January 2002. He served as Executive Vice
President of The Williams Companies, Inc. from 1986 to 1992.

     William A. Bruckmann, III serves as a director of our general partner and
was elected on May 9, 2001. He is a former managing director at Chase
Securities, Inc. He has more than 25 years of banking experience, starting with
Manufacturers Hanover Trust Company, where he became a senior officer in 1985.
Mr. Bruckmann later served as managing director, sector head of the
Manufacturers Hanover's gas pipeline and midstream practices through the
acquisition of Manufacturers Hanover by Chemical Bank and the acquisition of
Chemical Bank by Chase Bank.

     Don J. Gunther serves as a director of our general partner and was elected
May 9, 2001. He is a retired vice chairman of Bechtel Group Inc. He began his
career with Bechtel in 1961 and was promoted to a variety of positions,
including Bechtel's executive committee in 1989; president of Bechtel Petroleum
in 1984; president of Europe, Africa, Middle East and southwest Asia operations
in 1992; and president of Bechtel Americas in 1995. He was named vice chairman
in July 1997, retiring from the position in 1998.

     William W. Hanna serves as a director of our general partner and was
elected on January 18, 2002. He is a retired vice chairman of Koch Industries
where he held management and leadership positions since he commenced employment
in 1968. In his first year, he established a gas and gas liquids group. In 1981,
he became executive vice president of energy products for Koch. In 1984, he was
elected to the board of directors, and in 1987, was named president and chief
operating officer. In 1999, he was named vice chairman.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

     Section 16(a) of the Securities Exchange Act of 1934 requires directors,
executive officers and persons who beneficially own more than 10 percent of our
units to file certain reports with the Securities and Exchange Commission and
the New York Stock Exchange concerning their beneficial ownership of our equity
securities. The Securities and Exchange Commission regulations also require that
a copy of all such Section 16(a) forms filed must be furnished to us by the
executive officers, directors and greater than 10 percent unitholders. Based on
a review of the copies of such forms and amendments thereto received by us with
respect to 2001, we are not aware of any late filings.

ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

     We have no employees. We are managed by the officers of our general
partner. We reimburse The Williams Companies, Inc. for indirect and direct
expenses incurred on our behalf, as discussed in Part II, Item 7. A percentage
of the compensation expense of each executive officer is allocated by The
Williams Companies, Inc. to us as follows: Mr. Malcolm, three percent; Mr. Rich,
fifty percent; Mr. Wellendorf, seventy-five percent; Mr. Wiese, ninety-five
percent; and Mr. Wright, three percent. The following table represents
compensation expense allocated to us by The Williams Companies, Inc. for the
fiscal year ended

                                        61
<PAGE>

December 31, 2001, for the CEO and each of the four other most highly
compensated executive officers of our general partner.

                      ALLOCATED SUMMARY COMPENSATION TABLE

<Table>
<Caption>
                                                                         ALLOCATED
                                                                         LONG-TERM
                                                                       COMPENSATION
                                      ALLOCATED ANNUAL COMPENSATION    -------------
                                      ------------------------------     WMB STOCK        ALL OTHER
NAME AND PRINCIPAL POSITION           YEAR      SALARY       BONUS     OPTION SHARES   COMPENSATION(1)
---------------------------           -----    ---------    --------   -------------   ---------------
<S>                                   <C>      <C>          <C>        <C>             <C>
Steven J. Malcolm...................  2001     $ 15,360     $19,089         5,248          $  337
  Chief Executive Officer &
  Chairman of the Board
Craig R. Rich.......................  2001       77,765      41,793         4,550           4,556
  General Counsel
Don R. Wellendorf...................  2001      149,004      86,964         4,289           1,585
  Sr. Vice President, Chief
  Financial Officer, Treasurer and
  Director
Jay A. Wiese........................  2001      139,474      66,861         3,881           2,383
  Vice President, Terminal
  Services & Development
Phillip D. Wright...................  2001        8,156       6,104           819             235
  President & Chief
  Operating Officer, Director
</Table>

---------------

(1) Represents expense allocated by our general partner to us on behalf of each
    executive officer for contributions made by the general partner to the
    Investment Plus Plan, a defined contribution plan.

                                        62
<PAGE>

ALLOCATED STOCK OPTION GRANTS IN THE LAST FISCAL YEAR

     The following table provides certain information concerning the grant of
Williams' stock options during the last fiscal year to the named executive
officers. The number of options granted, percent of total options granted and
the grant date present values reported below represent The Williams Companies,
Inc. allocation to us as follows: Mr. Malcolm, three percent; Mr. Rich, fifty
percent; Mr. Wellendorf, seventy-five percent; Mr. Wiese, ninety-five percent;
and Mr. Wright, three percent.

              ALLOCATED WILLIAMS OPTION GRANTS IN LAST FISCAL YEAR

<Table>
<Caption>
                                                                  INDIVIDUAL GRANTS(1)
                                      -----------------------------------------------------------------------------
                                                                PERCENT OF
                                                                  TOTAL
                                                                 OPTIONS
                                                  NUMBER OF     GRANTED TO
                                                     WMB         WILLIAMS      EXERCISE                  GRANT DATE
                                        DATE       OPTIONS     EMPLOYEES IN   PRICE (PER    EXPIRATION    PRESENT
NAME                                  GRANTED    GRANTED(2)    FISCAL YEAR      SHARE)         DATE       VALUE(2)
----                                  --------   -----------   ------------   -----------   ----------   ----------
<S>                                   <C>        <C>           <C>            <C>           <C>          <C>
Steven J. Malcolm...................  01/18/01       3,431         0.05%       $34.7712      01/18/11     $45,701
                                      04/02/01         817         0.01%       $39.9812      04/02/11     $12,508
                                      09/19/01       1,000         0.01%       $26.7900      09/19/11     $10,070
                                                  --------        -----                                   -------
                                                     5,248         0.07%                                  $68,279

Craig R. Rich.......................  01/18/01       4,550         0.06%       $34.7712      01/18/11     $60,606
                                                  --------        -----                                   -------
                                                     4,550         0.06%                                  $60,606

Don R. Wellendorf...................  01/18/01       4,289         0.06%       $34.7712      01/18/11     $57,129
                                                  --------        -----                                   -------
                                                     4,289         0.06%                                  $57,129

Jay A. Wiese........................  01/18/01       3,881         0.05%       $34.7712      01/18/11     $51,695
                                                  --------        -----                                   -------
                                                     3,881         0.05%                                  $51,695

Phillip D. Wright...................  01/18/01         294        0.004%       $34.7712      01/18/11     $ 3,916
                                      09/19/01         525        0.007%       $26.7900      09/19/11     $ 5,287
                                                  --------        -----                                   -------
                                                       819        0.011%                                  $ 9,203
</Table>

---------------

(1) Options granted in 2001 were granted subject to accelerated vesting if
    certain future Williams' stock prices or specific Williams' financial
    performance targets are achieved. The Williams Companies, Inc. granted these
    options under its 1996 Stock Plan and its Stock Plan for Nonofficer
    Employees. Williams' stock option shares granted prior to the April 23, 2001
    spinoff of Williams Communications Group, Inc. were adjusted as a result of
    the spinoff using a factor of 1.089263 per share.

(2) The grant date present value is determined using the Black-Scholes option
    pricing model and is based on assumptions about future stock price
    volatility and dividend yield. The model does not take into account that the
    stock options are subject to vesting restrictions and that executives cannot
    sell their options. The following weighted-average values were determined
    based on the above grants. The weighted-average volatility of the expected
    market price of Williams common stock is 29.6 percent. The weighted-average
    risk-free rate of return is 5.3 percent. The model assumes a dividend yield
    of 1.9 percent and an exercise date at the end of the contractual term in
    2011. The actual value, if any, that may be realized by an executive will
    depend on the market price of Williams' Common Stock on the date of
    exercise. The dollar amounts shown are not intended to forecast possible
    future appreciation in Williams' stock price.

                                        63
<PAGE>

ALLOCATED OPTION EXERCISES AND FISCAL YEAR-END VALUES

     The following table provides certain information on stock option exercises
of Williams' stock options during the last fiscal year by the named executive
officers and the value of such officers' unexercised options at December 31,
2001. This table represents the allocated value of option exercises of Williams'
stock.

       ALLOCATED OPTION EXERCISES OF WILLIAMS' STOCK IN LAST FISCAL YEAR
                       AND FISCAL YEAR-END OPTION VALUES

<Table>
<Caption>
                                                        NUMBER OF UNEXERCISED         VALUE OF UNEXERCISED
                                                             OPTIONS AT               IN-THE-MONEY OPTIONS
                              SHARES                     FISCAL YEAR-END(1)            AT FISCAL YEAR-END
                             ACQUIRED      VALUE     ---------------------------   ---------------------------
NAME                        ON EXERCISE   REALIZED   EXERCISABLE   UNEXERCISABLE   EXERCISABLE   UNEXERCISABLE
----                        -----------   --------   -----------   -------------   -----------   -------------
<S>                         <C>           <C>        <C>           <C>             <C>           <C>
Steven J. Malcolm.........      -0-         $-0-         -0-           5,248          $-0-            -0-
Craig R. Rich.............      -0-          -0-         -0-           4,550           -0-            -0-
Don R. Wellendorf.........      -0-          -0-         -0-           4,289           -0-            -0-
Jay A. Wiese..............      -0-          -0-         -0-           3,881           -0-            -0-
Phillip D. Wright.........      -0-          -0-         -0-             819           -0-            -0-
</Table>

---------------

(1) Williams' stock option shares granted and unexercised prior to the April 23,
    2001 spinoff of Williams Communications Group, Inc. were adjusted as a
    result of the spinoff using a factor of 1.089263.

     The following table provides certain information concerning the grant of
our units under the Williams Energy Partners' Long-Term Incentive Plan during
the last fiscal year to the named executive officers:

              LONG-TERM INCENTIVE PLAN-AWARDS IN LAST FISCAL YEAR

<Table>
<Caption>
                                                                          ESTIMATED FUTURE PAYOUTS UNDER
                                                      PERFORMANCE OR       NON-STOCK PRICE-BASED PLANS
                                                    OTHER PERIOD UNTIL   --------------------------------
                                        NUMBER        MATURATION OR      THRESHOLD     TARGET    MAXIMUM
NAME                                   OF UNITS           PAYOUT          # UNITS     # UNITS    # UNITS
----                                   --------     ------------------   ----------   --------   --------
<S>                                    <C>          <C>                  <C>          <C>        <C>
Steven J. Malcolm....................   13,000(1)       34 Months          13,000      13,000     13,000
                                        ------                             ------      ------     ------
                                        13,000                             13,000      13,000     13,000
Craig R. Rich........................    5,000(1)       34 Months           5,000       5,000      5,000
                                         4,500(2)       34 Months           4,500       4,500      9,000
                                        ------                             ------      ------     ------
                                         9,500                              9,500       9,500     14,000
Don R. Wellendorf....................   13,000(1)       34 Months          13,000      13,000     13,000
                                        13,300(2)       34 Months          13,300      13,300     26,600
                                        ------                             ------      ------     ------
                                        26,300                             26,300      26,300     39,600
Jay A. Wiese.........................   15,500(1)       34 Months          15,500      15,500     15,500
                                         4,500(2)       34 Months           4,500       4,500      9,000
                                        ------                             ------      ------     ------
                                        20,000                             20,000      20,000     24,500
Phillip D. Wright....................   13,000(1)       34 Months          13,000      13,000     13,000
                                        15,800(2)       34 Months          15,800      15,800     31,600
                                        ------                             ------      ------     ------
                                        28,800                             28,800      28,000     44,600
</Table>

---------------

(1) Represents an initial public offering grant of our phantom units on April
    19, 2001 (market values at date of grant are noted as follows): Mr. Malcolm,
    13,000 units valued at $399,100; Mr. Rich, 5,000 units valued at $153,500;
    Mr. Wellendorf, 13,000 units valued at $399,100; Mr. Wiese, 15,500 units
    valued at $475,850 and Mr. Wright, 13,000 units valued at $399,100. The
    units are subject to early vesting if we achieve certain performance
    measures.

(2) Represents phantom units of deferred limited interest granted on April 19,
    2001 (market values at date of grant are noted as follows): Mr. Rich, 4,500
    units valued at $138,150; Mr. Wellendorf, 13,300 units valued at $408,310;
    Mr. Wiese, 4,500 units valued at $138,150; and Mr. Wright, 15,800 units
    valued at

                                        64
<PAGE>

    $485,060. At the end of the vesting period, the number of units awarded
    under this grant will be determined based on our assessment of whether
    certain performance criteria have been met. The number of units could range
    from zero to two times the number of units granted.

COMMITTEES, MEETINGS AND DIRECTOR COMPENSATION

     Our general partner's Board of Directors has the responsibility for
establishing broad policies and for our overall performance. However, the Board
is not involved in our day-to-day operations. The Board is kept informed of our
business through discussions with the Chief Executive Officer, and other
officers, by reviewing analyses and reports provided to it on a regular basis
and by participating in Board and Committee meetings.

     Our general partner's Board of Directors held 4 meetings during 2001. Each
director during 2001 attended all of the Board meetings. The Board has
established standing committees to consider designated matters. The Committees
of the Board are Audit, Compensation and Conflicts.

  Audit Committee.

     The members of the Audit Committee are: William A. Bruckmann, III,
Chairman, Don J. Gunther and William W. Hanna. The Audit Committee is composed
of nonemployee directors who review our external financial reporting, recommend
engagement of our independent auditors and review procedures for internal
auditing and the adequacy of our internal accounting controls. The Committee
held 4 meetings during 2001 and all members of the Committee in 2001 attended
each of the meetings.

  Compensation Committee.

     The members of the Compensation Committee are:  Don J. Gunther, Chairman,
William A. Bruckmann, III and William W. Hanna. The members of the Compensation
Committee oversee related compensation decisions for the officers of our general
partner. The Committee held 1 meeting during 2001 and all members of the
Committee in 2001 were in attendance.

  Conflicts Committee.

     The members of the Conflicts Committee are:  William A. Bruckmann, III,
Chairman, Don J. Gunther and William W. Hanna. The Conflicts Committee reviews
specific matters which the board of directors believe may involve conflicts of
interest. The Conflicts Committee will determine if the resolution of the
conflict of interest is fair and reasonable to us. The members of the Conflicts
Committee are not officers or employees of our general partner or directors,
officers or employees of its affiliates. The Committee held 2 meetings during
2001 and all members of the Committee in 2001 were in attendance.

  Compensation of Directors.

     Employee directors receive no additional compensation for service on our
general partner's Board of Directors or Committees of the Board. Nonemployee
directors receive an annual retainer of $10,000 in cash and 400 of our common
units. Chairmen of the Audit, Compensation and Conflicts Committees receive an
annual retainer of $1,000. Nonemployee directors receive $1,000 for each Board
meeting attended and $500 for each Audit, Compensation or Conflicts Committee
meeting attended.

     Nonemployee directors may elect to receive all or any part of cash fees in
the form of common units or phantom units. Phantom units may be deferred to any
subsequent year or until such individual ceases to be a director. Nonemployee
directors may also elect to defer receipt of their annual unit retainer to any
subsequent year or until such individual ceases to be a director. Distribution
equivalents are paid on phantom units and may be received in cash or reinvested
in additional phantom units. One director elected to defer fees under this plan
in 2001.

     In addition, each independent director will be reimbursed for out-of-pocket
expenses in connection with attending meetings of the board of directors or
committees. Each director will be fully indemnified by us for actions associated
with being a director to the extent permitted under Delaware law.
                                        65
<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth the beneficial ownership of units held by
beneficial owners of five percent or more of the units, by directors of the
general partner, by each named executive officer of the general partner and by
all directors and executive officers of the general partner as a group as of
February 28, 2002.

<Table>
<Caption>
                                              PERCENTAGE OF                  PERCENTAGE OF
                                    COMMON       COMMON       SUBORDINATED   SUBORDINATED    PERCENTAGE OF
NAME OF BENEFICIAL OWNER             UNITS        UNITS          UNITS           UNITS        TOTAL UNITS
------------------------            -------   -------------   ------------   -------------   -------------
<S>                                 <C>       <C>             <C>            <C>             <C>
Williams Energy Services,
  LLC(1)..........................  757,193       13.3         4,589,193         80.8            47.1
Williams Natural Gas Liquids,
  Inc.(1).........................  322,501        5.7         1,090,501         19.2            12.4
Steven J. Malcolm(3)(4)...........    2,500         --                --                           --
Phillip D. Wright(2)(4)...........       --         --                --           --              --
Don R. Wellendorf(4)..............       --         --                --           --              --
Jay A. Wiese(4)...................       --         --                --           --              --
Craig R. Rich(4)..................       --         --                --           --              --
Keith E. Bailey(3)(4).............       --         --                --           --              --
Don J. Gunther(4).................       --         --                --           --              --
William A. Bruckmann, III(4)......       --         --                --           --              --
William W. "Bill" Hanna(4)........       --         --                --           --              --
All directors and executive
  officers as a Group (nine
  persons)(4).....................       --         --                --           --              --
</Table>

---------------

(1) Williams GP LLC is owned through Williams Energy Services, LLC and Williams
    Natural Gas Liquids, Inc., which are subsidiaries of The Williams Companies,
    Inc. The address of The Williams Companies, Inc., Williams Energy Services,
    LLC and Williams Natural Gas Liquids, Inc. is One Williams Center, Tulsa,
    Oklahoma 74172.

(2) Does not include any common units or subordinated units owned by Williams
    Energy Services, LLC or by Williams Natural Gas Liquids, Inc. Mr. Wright in
    his capacity as Chairman and Chief Executive Officer of Williams Energy
    Services, LLC and as Chairman, President and Director of Williams Natural
    Gas Liquids, Inc. may be deemed to beneficially own these units.

(3) Does not include any common units or subordinated units owned by Williams
    Energy Services, LLC or by Williams Natural Gas Liquids, Inc. Mr. Bailey in
    his capacity as Chairman and Mr. Malcolm in his capacity as Chief Executive
    Officer of The Williams Companies, Inc., which is the owner of Williams
    Energy Services, LLC and Williams Natural Gas Liquids, Inc., may be deemed
    to beneficially own these units.

(4) In each instance, a dash ( -- ) indicates that the individual or group does
    not own any units, or the percentage calculation is less than 0.1 percent.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Williams Energy Marketing & Trading Company and Williams Refining &
Marketing, L.L.C., subsidiaries of The Williams Companies, Inc. and affiliates
of the Partnership, are significant customers at our petroleum product
terminals, representing 11.0 percent and 7.2 percent, respectively, of our total
revenues for the year ended December 31, 2001. The services we provide them are
conducted pursuant to various contracts between them and the Partnership. As of
December 31, 2001, 3 percent of the revenues from these affiliates were
generated under contracts renewing on a monthly basis, while 97 percent were
generated under contracts with remaining terms in excess of one year or that are
renewed on an annual basis.

     Affiliates of The Williams Companies, Inc. own 1,079,694 common units and
5,679,694 subordinated units representing an approximate aggregate 60 percent
limited partner interest in us and Williams OLP, L.P. In addition, Williams GP
LLC owns an aggregate 2 percent general partner interest in us and Williams OLP,
L.P. The general partner's ability, as general partner, to manage and operate
Williams Energy Partners and The Williams Companies, Inc.'s affiliates'
ownership of an approximate aggregate 60 percent limited partner

                                        66
<PAGE>

interest in us effectively gives the general partner the right to veto some
actions of Williams Energy Partners and to control the management of Williams
Energy Partners L.P.

DISTRIBUTIONS AND PAYMENTS TO THE GENERAL PARTNER AND ITS AFFILIATES

     The following table summarizes the distributions and payments to be made by
us to our general partner and its affiliates in connection with the formation,
ongoing operation and liquidation of Williams Energy Partners. These
distributions and payments were determined by and among affiliated entities and
are not the result of arm's length negotiations.

FORMATION STAGE

The consideration received by our
general partner and its affiliates,
  Williams Energy Services, LLC and
  Williams Natural Gas Liquids,
  Inc., for the transfer of the
  affiliates' interests in the
  subsidiaries and a capital
  contribution......................     1,679,694 common units and 5,679,694
                                         subordinated units;

                                         a combined 2 percent general partner
                                         interest in Williams Energy Partners
                                         L.P. and Williams OLP, L.P.;

                                         the incentive distribution rights; and

                                         $166.5 million of the net proceeds of
                                         our initial public offering of the
                                         common units and the borrowings under
                                         the credit facility. In addition, the
                                         net proceeds of $12.1 million from the
                                         exercise of the underwriters'
                                         over-allotment option in our initial
                                         public offering were used to redeem
                                         600,000 common units from Williams
                                         Energy Services, LLC, an affiliate of
                                         the general partner, as partial
                                         reimbursement for capital expenditures
                                         incurred by Williams Energy Services,
                                         LLC for assets we own after the initial
                                         public offering.

                                         Williams Energy Services, LLC and
                                         Williams Natural Gas Liquids, Inc.,
                                         affiliates of The Williams Companies,
                                         Inc., transferred to us their interests
                                         in the entities that became our
                                         subsidiaries in exchange for 1,679,694
                                         common units, 5,679,694 subordinated
                                         units, the incentive distribution
                                         rights and the combined 2 percent
                                         general partner interest described
                                         above. The common units and
                                         subordinated units received by Williams
                                         Energy Services, LLC and Williams
                                         Natural Gas Liquids, Inc. were valued
                                         at the $21.50 initial public offering
                                         price. In addition, the over-allotment
                                         was exercised for 600,000 common units.
                                         Those units were redeemed from the
                                         1,357,193 common units initially owned
                                         by Williams Energy Services, LLC. After
                                         the redemption of these units,
                                         affiliates of the Partnership owned
                                         1,079,694 common units.

                                        67
<PAGE>

OPERATIONAL STAGE

Distributions of available cash to
our general partner and its
  affiliates........................     Cash distributions will generally be
                                         made 98 percent to the unitholders,
                                         including to affiliates of the general
                                         partner as holders of common units and
                                         subordinated units, and 2 percent to
                                         the general partner. However,
                                         distributions that exceed the specified
                                         target levels will result in our
                                         general partner receiving increasing
                                         percentages of the distributions, up to
                                         50 percent of the distributions above
                                         the highest target level.

                                         Assuming we have sufficient available
                                         cash to continue to pay distributions
                                         on all of our outstanding units for
                                         four quarters at our current
                                         distribution level of $0.59 per unit
                                         per quarter, our general partner and
                                         its affiliates would receive annual
                                         distributions of approximately $0.6
                                         million on the combined 2 percent
                                         general partner interest and a
                                         distribution of approximately $16.0
                                         million on their common and
                                         subordinated units.

Payments to our general partner and
its affiliates......................     Our general partner and its affiliates
                                         will not receive any management fee or
                                         other compensation for the management
                                         of Williams Energy Partners L.P. Our
                                         general partner and its affiliates will
                                         be reimbursed, however, for direct and
                                         indirect expenses incurred on our
                                         behalf. Per the Omnibus Agreement, in
                                         2001 we were charged $6.0 million,
                                         prorated for the Partnership's partial
                                         2001 year, for general and
                                         administrative expenses, excluding
                                         expenses associated with incentive
                                         compensation plans and completed
                                         acquisitions. The annual general and
                                         administrative expense charge was
                                         increased to $6.3 million by the end of
                                         2001. The increase is due to the
                                         incremental general and administrative
                                         expenses associated with acquisitions
                                         made during 2001. In 2002, the annual
                                         general and administrative expense
                                         charge was increased to $6.7 million,
                                         including the annual escalator as
                                         provided in the Partnership's Omnibus
                                         Agreement.

Withdrawal or removal of our general
partner.............................     If our general partner withdraws in
                                         violation of the Partnership agreement
                                         or is removed for cause, a successor
                                         general partner has the option to buy
                                         the general partner interests and
                                         incentive distribution rights for a
                                         cash price equal to fair market value.
                                         If our general partner withdraws or is
                                         removed under any other circumstances,
                                         the departing general partner has the
                                         option to require the successor general
                                         partner to buy the departing general
                                         partner's interests and its incentive
                                         distribution rights for a cash price
                                         equal to fair market value.

                                         If either of these options is not
                                         exercised, the departing general
                                         partner's interests and incentive
                                         distribution

                                        68
<PAGE>

                                         rights will automatically convert into
                                         common units equal to the fair market
                                         value of those interests. In addition,
                                         we will be required to pay the
                                         departing general partner for expense
                                         reimbursements.

LIQUIDATION STAGE

Liquidation.........................     Upon our liquidation, the partners,
                                         including our general partner, will be
                                         entitled to receive liquidating
                                         distributions according to their
                                         particular capital account balances.

RIGHTS OF OUR GENERAL PARTNER

     Our general partner and its affiliates own 1,079,694 common units and
5,679,694 subordinated units, representing an aggregate 58.3 percent limited
partner interest in Williams Energy Partners L.P. In addition, our general
partner owns an aggregate 2 percent general partner interest in Williams Energy
Partners L.P. and the operating limited Partnership on a combined basis. Through
the general partner's ability, as general partner, to manage and operate our
business and The Williams Companies, Inc.'s affiliates' ownership of 1,079,694
common units and all of the outstanding subordinated units, the general partner
will control the management of our business.

OMNIBUS AGREEMENT

     We entered into an agreement in February 2001 with The Williams Companies,
Inc. and its affiliates and our general partner, that governs:

     - potential competition among us and the other parties to the agreement;

     - reimbursement of general and administrative expenses;

     - indemnification for environmental liabilities and right-of-way defects or
       failures;

     - the grant of a license for use of the ATLAS 2000 software system and
       other intellectual property; and

     - reimbursement of maintenance capital expenditures.

  Competition

     The Williams Companies, Inc. and its affiliates have agreed that they will
not own or operate assets that are used to transport, store or distribute
ammonia in the United States or terminal and store refined petroleum products in
the continental United States. We refer to these assets below as restricted
assets. The Williams Companies, Inc. will not be prohibited from owning or
operating the following restricted assets:

     - any restricted assets owned, leased or operated by The Williams
       Companies, Inc. at the closing of our initial public offering on February
       9, 2001;

     - any restricted assets acquired after February 9, 2001 with a fair market
       value not greater than $20.0 million;

     - any restricted assets constructed by The Williams Companies, Inc. after
       February 9, 2001 with construction costs not greater than $20.0 million;
       and

     - any restricted assets constructed or acquired by The Williams Companies,
       Inc. after February 9, 2001 that are connected to assets owned by The
       Williams Companies, Inc. or are primarily related to and located within
       50 miles of The Williams Companies, Inc.'s refinery in Memphis,
       Tennessee.

     If The Williams Companies, Inc. acquires or constructs restricted assets
other than those identified above, it shall offer to sell such assets to us
within six months of acquiring or completing construction. If we and The
Williams Companies, Inc. are unable to agree on the terms of the sale, we and
The Williams
                                        69
<PAGE>

Companies, Inc. will appoint a mutually-agreed-upon, nationally-recognized
investment banking firm to determine the fair market value of the restricted
assets. Once the investment bank submits its valuation of the restricted assets
to The Williams Companies, Inc. and us, we will have the right, but not the
obligation, to purchase the business in accordance with the following process:

     - If the valuation of the investment bank is in the range between the
       proposed sale and purchase values of The Williams Companies, Inc. and us,
       we will have the right to purchase the business at the valuation
       submitted by the investment bank.

     - If the valuation of the investment bank is less than the proposed
       purchase value submitted by us, we will have the right to purchase the
       business for the amount submitted by us.

     - If the valuation of the investment bank is greater than the proposed sale
       value submitted by The Williams Companies, Inc., we will have the right
       to purchase the business for the amount submitted by The Williams
       Companies, Inc.

     If we elect not to purchase any restricted assets, The Williams Companies,
Inc. will be permitted to own or operate such assets without limitation.

  General and Administrative Expenses

     In 2002, we will reimburse the general partner or The Williams Companies,
Inc. for general and administrative expenses of not more than $6.7 million,
excluding expenses associated with our Long-Term Incentive Plan. This amount may
increase during the next nine years as follows:

     - In each year after 2002, the amount of general and administrative
       expenses, excluding expenses associated with the Long-Term Incentive
       Plan, allocated to us by The Williams Companies, Inc. and the general
       partner may increase by no more than the greater of 7 percent or the
       percentage increase in the consumer price index for that year.

     - If we make an acquisition, our general and administrative expense
       allocation may increase by the amount of these expenses included in our
       valuation of the business we acquire.

  Indemnification

     Williams Energy Services, LLC and Williams Natural Gas Liquids, Inc. have
agreed to indemnify us for up to $15.0 million for environmental liabilities
that exceed the amounts covered by the seller indemnities and insurance
coverage. The indemnity applies to environmental liabilities arising from
conduct prior to February 9, 2001 and discovered within three years of February
9, 2001. Liabilities resulting from a change in law after February 9, 2001 are
excluded from this indemnity. Williams Natural Gas Liquids, Inc. will indemnify
us for right-of-way defects or failures in our ammonia pipeline for 15 years
after the date of February 9, 2001. Williams Energy Services, LLC will indemnify
us for right-of-way defects or failures associated with our marine terminal
facilities at Galena Park, Corpus Christi and Marrero for 15 years after
February 9, 2001.

  ATLAS 2000 License

     The Williams Companies, Inc. and its affiliates have granted a license to
us for the use of the ATLAS 2000 software system (and to permit customers to use
the system to track inventories) and other intellectual property, including our
logo, for as long as The Williams Companies, Inc. controls our general partner,
at no charge.

  Maintenance Capital Expenditures

     In 2001 and 2002, The Williams Companies, Inc. will reimburse us for
maintenance capital expenditures for our current operations in excess of $4.9
million per year, subject to a maximum aggregate reimbursement of $15.0 million
over this two year period.

                                        70
<PAGE>

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a) 1 and 2.

<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Covered by reports of independent auditors:
  Consolidated statements of income for the three years
     ended December 31, 2001................................   36
  Consolidated balance sheets at December 31, 2001 and
     2000...................................................   37
  Consolidated statements of cash flows for the three years
     ended December 31, 2001................................   38
  Consolidated statement of partners' capital...............   39
  Notes 1 through 19 to Consolidated financial statements...   40
Not covered by reports of independent auditors:
  Quarterly financial data (unaudited) -- See Note 14 to
     Consolidated financial statements......................   55
  Registration statement -- See Note 18.....................   57
</Table>

     All other schedules have been omitted since the required information is not
present or is not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the financial
statements and notes thereto.

     (a) 3 and (c).  The exhibits listed below are filed as part of this annual
report.

<Table>
<Caption>
EXHIBIT NO.                           DESCRIPTION
-----------                           -----------
<C>           <S>
 Exhibit 3
    (a)       -- Amended and Restated Agreement of Limited Partnership of
                 Williams Energy Partners L.P. dated February 9, 2001.
    (b)       -- Amended and Restated Agreement of Limited Partnership of
                 Williams OLP, L.P. dated February 9, 2001.
    *(c)      -- Second Restated and Amended LLC Agreement for Williams GP
                 LLC (filed as Exhibit 4.3 to Form S-8 filed October 16,
                 2001).
    (d)       -- Reorganization Agreement dated March 4, 2002 among
                 Williams Energy Partners L.P., Williams OLP, L.P.,
                 Williams GP LLC, and Williams GP Inc.

 Exhibit 10
    (a)       -- Credit Agreement dated February 6, 2001 between Williams
                 OLP, L.P., Bank of America, N.A., Lehman Commercial
                 Paper, Inc., and Suntrust Bank, including Amendment No. 1
                 dated July 31, 2001, and Amendment No. 2 dated July 31,
                 2001.
    (b)       -- Contribution, Conveyance and Assumption Agreement dated
                 February 9, 2001, between Williams Energy Partners L.P.;
                 Williams OLP, L.P.; Williams GP LLC; Williams Energy
                 Services, LLC; Williams Natural Gas Liquids, Inc.;
                 Williams NGL, LLC; Williams Terminal Holdings, L.P.;
                 Williams Terminal Holdings, L.L.C.; Williams Ammonia
                 Pipeline, L.P. and Williams Bio-Energy, LLC.
    (c)       -- Omnibus Agreement dated February 9, 2001, between
                 Williams Companies, Inc.; Williams Energy Services, LLC;
                 Williams Natural Gas Liquids, Inc.; Williams Pipe Line
                 Company, LLC; Williams Information Services Corporation;
                 Williams Energy Partners L.P.; Williams OLP, L.P. and
                 Williams GP LLC, and Amendment 1 to the Omnibus Agreement
                 dated January 28, 2002.
    (d)       -- Purchase and Sale Agreement dated October 18, 2001,
                 between Geonet Gathering, Inc. and Williams Terminals
                 Holdings, L.P., including Exhibits A, B, C and D.
    (e)       -- Products Terminalling Agreement dated November 1, 2001,
                 between Williams Terminals Holdings, L.P. and Williams
                 Energy Marketing & Trading Company.
</Table>

                                        71
<PAGE>

<Table>
<Caption>
EXHIBIT NO.                           DESCRIPTION
-----------                           -----------
<C>           <S>
    (f)       -- Facilities Sale Agreement dated June 30, 2001, between
                 Transmontaigne, Inc. and Williams Terminals Holdings,
                 L.P., including Schedules 2.1(a) and 2.1(b) and (c).
    *(g)      -- Williams Energy Partners Long-Term Incentive Plan (filed
                 as Exhibit 4.1 to Form S-8 filed October 16, 2001).
 Exhibit 21   -- Subsidiaries of Williams GP LLC.
Exhibit 23.1  -- Consent of Independent Auditor.
 Exhibit 24   -- Power of Attorney together with certified resolution.
 Exhibit 99   -- Williams GP LLC's balance sheet of December 31, 2001 and
                 notes thereto.
</Table>

---------------

* Each such exhibit has heretofore been filed with the Securities and Exchange
  Commission as part of the filing indicated and is incorporated herein by
  reference.

     (c) Reports on Form 8-K.

          The Partnership's unaudited earnings for the three and six months
     ending September 30, 2001 and 2000, were issued on Form 8-K on October 25,
     2001.

          The Partnership announced its acquisition of a petroleum storage and
     distribution facility in Gibson, Louisiana from Geonet Gathering, Inc. on
     Form 8-K on November 8, 2001.

     (d) We do not own any partially-owned companies.

                                        72
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, we have duly caused this report to be signed on our behalf
by the undersigned, thereunto duly authorized.

                                          WILLIAMS ENERGY PARTNERS L.P.
                                          (Registrant)

                                          By: Williams GP LLC, its General
                                              Partner

                                          By:     /s/ SUZANNE H. COSTIN
                                            ------------------------------------
                                                     Suzanne H. Costin
                                                      Attorney-in-fact

Date: March 7, 2002

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on our behalf and in the
capacities and on the dates indicated.

<Table>
<Caption>
                    SIGNATURE                                      TITLE                       DATE
                    ---------                                      -----                       ----
<C>     <C>                                          <S>                                  <C>


              /s/ STEVEN J. MALCOLM*                 Chief Executive Officer (Principal   March 7, 2002
 ------------------------------------------------      Executive Officer) and Chairman
                Steven J. Malcolm                      of the Board of Williams GP LLC,
                                                       General Partner of Williams
                                                       Energy Partners L.P.


              /s/ DON R. WELLENDORF*                 Senior Vice President, Chief         March 7, 2002
 ------------------------------------------------      Financial Officer and Treasurer
                Don R. Wellendorf                      (Principal Financial and
                                                       Accounting Officer) of Williams
                                                       GP LLC, General Partner of
                                                       Williams Energy Partners L.P.


              /s/ PHILLIP D. WRIGHT*                 President, Chief Operating Officer   March 7, 2002
 ------------------------------------------------      and Director of Williams GP LLC,
                Phillip D. Wright                      General Partner of Williams
                                                       Energy Partners L.P.


               /s/ KEITH E. BAILEY*                  Director of Williams GP LLC,         March 7, 2002
 ------------------------------------------------      General Partner of Williams
                 Keith E. Bailey                       Energy Partners L.P.


          /s/ WILLIAM A. BRUCKMANN, III*             Director of Williams GP LLC,         March 7, 2002
 ------------------------------------------------      General Partner of Williams
            William A. Bruckmann, III                  Energy Partners L.P.


               /s/ DON J. GUNTHER*                   Director of Williams GP LLC,         March 7, 2002
 ------------------------------------------------      General Partner of Williams
                  Don J. Gunther                       Energy Partners L.P.
</Table>

                                        73
<PAGE>

<Table>
<Caption>
                    SIGNATURE                                      TITLE                       DATE
                    ---------                                      -----                       ----

<C>     <C>                                          <S>                                  <C>


              /s/ WILLIAM W. HANNA*                  Director of Williams GP LLC,         March 7, 2002
 ------------------------------------------------      General Partner of Williams
                 William W. Hanna                      Energy Partners L.P.

 *By:             /s/ SUZANNE H. COSTIN                                                   March 7, 2002
        ------------------------------------------
                    Suzanne H. Costin
                     Attorney-in-fact
</Table>

                                        74
<PAGE>

                               INDEX TO EXHIBITS

<Table>
<Caption>
EXHIBIT NO.                            DESCRIPTION
-----------                            -----------
<C>            <S>
  Exhibit 3
     (a)       -- Amended and Restated Agreement of Limited Partnership of
                  Williams Energy Partners L.P. dated February 9, 2001.
     (b)       -- Amended and Restated Agreement of Limited Partnership of
                  Williams OLP, L.P. dated February 9, 2001.
    *(c)       -- Second Restated and Amended LLC Agreement for Williams GP
                  LLC (filed as Exhibit 4.3 to Form S-8 filed October 16,
                  2001).
     (d)       -- Reorganization Agreement dated March 4, 2002 among
                  Williams Energy Partners L.P., Williams OLP, L.P.,
                  Williams GP LLC, and Williams GP Inc.

 Exhibit 10
     (a)       -- Credit Agreement dated February 6, 2001 between Williams
                  OLP, L.P., Bank of America, N.A., Lehman Commercial
                  Paper, Inc., and Suntrust Bank, including Amendment No. 1
                  dated July 31, 2001, and Amendment No. 2 dated July 31,
                  2001.
     (b)       -- Contribution, Conveyance and Assumption Agreement dated
                  February 9, 2001, between Williams Energy Partners L.P.;
                  Williams OLP, L.P.; Williams GP LLC; Williams Energy
                  Services, LLC; Williams Natural Gas Liquids, Inc.;
                  Williams NGL, LLC; Williams Terminal Holdings, L.P.;
                  Williams Terminal Holdings, L.L.C.; Williams Ammonia
                  Pipeline, L.P. and Williams Bio-Energy, LLC.
     (c)       -- Omnibus Agreement dated February 9, 2001, between
                  Williams Companies, Inc.; Williams Energy Services, LLC;
                  Williams Natural Gas Liquids, Inc.; Williams Pipe Line
                  Company, LLC; Williams Information Services Corporation;
                  Williams Energy Partners L.P.; Williams OLP, L.P. and
                  Williams GP LLC, and Amendment 1 to the Omnibus Agreement
                  dated January 28, 2002.
     (d)       -- Purchase and Sale Agreement dated October 18, 2001,
                  between Geonet Gathering, Inc. and Williams Terminals
                  Holdings, L.P., including Exhibits A, B, C and D.
     (e)       -- Products Terminalling Agreement dated November 1, 2001,
                  between Williams Terminals Holdings, L.P. and Williams
                  Energy Marketing & Trading Company.
     (f)       -- Facilities Sale Agreement dated June 30, 2001, between
                  Transmontaigne, Inc. and Williams Terminals Holdings,
                  L.P., including Schedules 2.1(a) and 2.1(b) and (c).
    *(g)       -- Williams Energy Partners Long-Term Incentive Plan (filed
                  as Exhibit 4.1 to Form S-8 filed October 16, 2001).
 Exhibit 21    -- Subsidiaries of Williams GP LLC.
Exhibit 23.1   -- Consent of Independent Auditor.
 Exhibit 24    -- Power of Attorney together with certified resolution.
 Exhibit 99    -- Williams GP LLC's balance sheet of December 31, 2001 and
                  notes thereto.
</Table>

---------------

* Each such exhibit has heretofore been filed with the Securities and Exchange
  Commission as part of the filing indicated and is incorporated herein by
  reference.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(A)
<SEQUENCE>3
<FILENAME>d94597ex3-a.txt
<DESCRIPTION>AMENDED/RESTATED AGREEMENT OF LIMITED PARTNERSHIP
<TEXT>
<PAGE>
                                                                    EXHIBIT 3(a)

                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                          WILLIAMS ENERGY PARTNERS L.P.


<PAGE>


                                TABLE OF CONTENTS

                                   ARTICLE I.
                                   DEFINITIONS

<TABLE>
<CAPTION>
<S>            <C>                                                                          <C>
Section 1.1.   Definitions...................................................................1
Section 1.2.   Construction.................................................................19

                            ARTICLE II. ORGANIZATION

Section 2.1.   Formation....................................................................19
Section 2.2.   Name.........................................................................20
Section 2.3.   Registered Office; Registered Agent; Principal Office; Other Offices.........20
Section 2.4.   Purpose and Business.........................................................20
Section 2.5.   Powers.......................................................................21
Section 2.6.   Power of Attorney............................................................21
Section 2.7.   Term.........................................................................22
Section 2.8.   Title to Partnership Assets..................................................22

                                  ARTICLE III.
                           RIGHTS OF LIMITED PARTNERS

Section 3.1.   Limitation of Liability......................................................23
Section 3.2.   Management of Business.......................................................23
Section 3.3.   Outside Activities of the Limited Partners...................................23
Section 3.4.   Rights of Limited Partners...................................................24

                                   ARTICLE IV.
        CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
                       REDEMPTION OF PARTNERSHIP INTERESTS

Section 4.1.   Certificates.................................................................25
Section 4.2.   Mutilated, Destroyed, Lost or Stolen Certificates............................25
Section 4.3.   Record Holders...............................................................26
Section 4.4.   Transfer Generally...........................................................26
Section 4.5.   Registration and Transfer of Limited Partner Interests.......................27
Section 4.6.   Transfer of the General Partner's General Partner Interest...................28
Section 4.7.   Transfer of Incentive Distribution Rights....................................28
Section 4.8.   Restrictions on Transfers....................................................29
Section 4.9.   Citizenship Certificates; Non-citizen Assignees..............................29
Section 4.10.  Redemption of Partnership Interests of Non-citizen Assignees.................30

                                   ARTICLE V.
           CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

Section 5.1.   Organizational Contributions.................................................32
Section 5.2.   Contributions by the General Partner and its Affiliates......................32
Section 5.3.   Contributions by Initial Limited Partners and Reimbursement of the
               General Partner..............................................................32
</TABLE>

                                      -i-

<PAGE>


<TABLE>
<CAPTION>
<S>            <C>                                                                          <C>
Section 5.4.   Interest and Withdrawal......................................................33
Section 5.5.   Capital Accounts.............................................................33
Section 5.6.   Issuances of Additional Partnership Securities...............................36
Section 5.7.   Limitations on Issuance of Additional Partnership Securities.................37
Section 5.8.   Conversion of Subordinated Units.............................................39
Section 5.9.   Limited Preemptive Right.....................................................40
Section 5.10.  Splits and Combination.......................................................41
Section 5.11.  Fully Paid and Non-Assessable Nature of Limited Partner Interests............42

                                   ARTICLE VI.
                          ALLOCATIONS AND DISTRIBUTIONS

Section 6.1.   Allocations for Capital Account Purposes.....................................42
Section 6.2.   Allocations for Tax Purposes.................................................49
Section 6.3.   Requirement and Characterization of Distributions; Distributions
               to Record Holders............................................................52
Section 6.4.   Distributions of Available Cash from Operating Surplus.......................52
Section 6.5.   Distributions of Available Cash from Capital Surplus.........................54
Section 6.6.   Adjustment of Minimum Quarterly Distribution and Target
               Distribution Levels..........................................................54
Section 6.7.   Special Provisions Relating to the Holders of Subordinated Units.............55
Section 6.8.   Special Provisions Relating to the Holders of Incentive Distribution Rights..55
Section 6.9.   Entity-Level Taxation........................................................56

                                  ARTICLE VII.
                      MANAGEMENT AND OPERATION OF BUSINESS

Section 7.1.   Management...................................................................56
Section 7.2.   Certificate of Limited Partnership...........................................58
Section 7.3.   Restrictions on General Partner's Authority..................................59
Section 7.4.   Reimbursement of the General Partner.........................................59
Section 7.5.   Outside Activities...........................................................60
Section 7.6.   Loans from the General Partner; Loans or Contributions from the
               Partnership; Contracts with Affiliates; Certain Restrictions on
               the General Partner..........................................................62
Section 7.7.   Indemnification..............................................................63
Section 7.8.   Liability of Indemnitees.....................................................65
Section 7.9.   Resolution of Conflicts of Interest..........................................65
Section 7.10.  Other Matters Concerning the General Partner.................................67
Section 7.11.  Purchase or Sale of Partnership Securities...................................68
Section 7.12.  Registration Rights of the General Partner and its Affiliates................68
Section 7.13.  Reliance by Third Parties....................................................70

                                  ARTICLE VIII.
                     BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 8.1.   Records and Accounting.......................................................70
Section 8.2.   Fiscal Year..................................................................71
Section 8.3.   Reports......................................................................71
</TABLE>

                                      -ii-

<PAGE>


<TABLE>
<CAPTION>
                                   ARTICLE IX.
                                   TAX MATTERS

<S>            <C>                                                                          <C>
Section 9.1.   Tax Returns and Information..................................................71
Section 9.2.   Tax Elections................................................................71
Section 9.3.   Tax Controversies............................................................72
Section 9.4.   Withholding..................................................................72

                                   ARTICLE X.
                              ADMISSION OF PARTNERS

Section 10.1.  Admission of Initial Limited Partners........................................72
Section 10.2.  Admission of Substituted Limited Partner.....................................73
Section 10.3.  Admission of Successor General Partner.......................................73
Section 10.4.  Admission of Additional Limited Partners.....................................73
Section 10.5.  Amendment of Agreement and Certificate of Limited Partnership................74

                                   ARTICLE XI.
                        WITHDRAWAL OR REMOVAL OF PARTNERS

Section 11.1.  Withdrawal of the General Partner............................................74
Section 11.2.  Removal of the General Partner...............................................76
Section 11.3.  Interest of Departing Partner and Successor General Partner..................76
Section 11.4.  Termination of Subordination Period, Conversion of Subordinated
               Units and Extinguishment of Cumulative Common Unit Arrearages................78
Section 11.5.  Withdrawal of Limited Partners...............................................78

                                  ARTICLE XII.
                           DISSOLUTION AND LIQUIDATION

Section 12.1.  Dissolution..................................................................78
Section 12.2.  Continuation of the Business of the Partnership After Dissolution............78
Section 12.3.  Liquidator...................................................................79
Section 12.4.  Liquidation..................................................................80
Section 12.5.  Cancellation of Certificate of Limited Partnership...........................81
Section 12.6.  Return of Contributions......................................................81
Section 12.7.  Waiver of Partition..........................................................81
Section 12.8.  Capital Account Restoration..................................................81

                                  ARTICLE XIII.
            AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

Section 13.1.  Amendment to be Adopted Solely by the General Partner........................81
Section 13.2.  Amendment Procedures.........................................................83
Section 13.3.  Amendment Requirements.......................................................83
Section 13.4.  Special Meetings.............................................................84
Section 13.5.  Notice of a Meeting..........................................................84
Section 13.6.  Record Date..................................................................84
Section 13.7.  Adjournment..................................................................85
Section 13.8.  Waiver of Notice; Approval of Meeting; Approval of Minutes...................85
</TABLE>

                                     -iii-

<PAGE>




<TABLE>
<CAPTION>
<S>            <C>                                                                          <C>
Section 13.9.  Quorum.......................................................................85
Section 13.10. Conduct of a Meeting.........................................................86
Section 13.11. Action Without a Meeting.....................................................86
Section 13.12. Voting and Other Rights......................................................87

                                  ARTICLE XIV.
                                     MERGER

Section 14.1.  Authority....................................................................87
Section 14.2.  Procedure for Merger or Consolidation........................................87
Section 14.3.  Approval by Limited Partners of Merger or Consolidation......................88
Section 14.4.  Certificate of Merger........................................................89
Section 14.5.  Effect of Merger.............................................................89

                                   ARTICLE XV.
                   RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS

Section 15.1.  Right to Acquire Limited Partner Interests...................................90

                                  ARTICLE XVI.
                               GENERAL PROVISIONS

Section 16.1.  Addresses and Notices........................................................92
Section 16.2.  Further Action...............................................................92
Section 16.3.  Binding Effect...............................................................92
Section 16.4.  Integration..................................................................92
Section 16.5.  Creditors....................................................................93
Section 16.6.  Waiver.......................................................................93
Section 16.7.  Counterparts.................................................................93
Section 16.8.  Applicable Law...............................................................93
Section 16.9.  Invalidity of Provisions.....................................................93
Section 16.10. Consent of Partners..........................................................93
</TABLE>

                                      -iv-

<PAGE>


              AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                          WILLIAMS ENERGY PARTNERS L.P.

        THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF WILLIAMS
ENERGY PARTNERS L.P. dated as of February 9, 2001, is entered into by and among
Williams GP LLC, a Delaware corporation, as the General Partner, Williams
Natural Gas Liquids, Inc., a Delaware corporation, and Williams Energy Services,
LLC, a Delaware limited liability company, as the Organizational Limited
Partner, together with any other Persons who become Partners in the Partnership
or parties hereto as provided herein. In consideration of the covenants,
conditions and agreements contained herein, the parties hereto hereby agree as
follows:

                                   ARTICLE I.
                                   DEFINITIONS

Section 1.1. Definitions.

        The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.

        "Acquisition" means any transaction in which any Group Member acquires
(through an asset acquisition, merger, stock acquisition or other form of
investment) control over all or a portion of the assets, properties or business
of another Person for the purpose of increasing the operating capacity or
revenues of the Partnership Group from the operating capacity or revenues of the
Partnership Group existing immediately prior to such transaction.

        "Additional Book Basis" means the portion of any remaining Carrying
Value of an Adjusted Property that is attributable to positive adjustments made
to such Carrying Value as a result of Book-Up Events. For purposes of
determining the extent that Carrying Value constitutes Additional Book Basis:

               (i) Any negative adjustment made to the Carrying Value of an
        Adjusted Property as a result of either a Book-Down Event or a Book-Up
        Event shall first be deemed to offset or decrease that portion of the
        Carrying Value of such Adjusted Property that is attributable to any
        prior positive adjustments made thereto pursuant to a Book-Up Event or
        Book-Down Event.

               (ii) If Carrying Value that constitutes Additional Book Basis is
        reduced as a result of a Book-Down Event and the Carrying Value of other
        property is increased as a result of such Book-Down Event, an allocable
        portion of any such increase in Carrying Value shall be treated as
        Additional Book Basis; provided that the amount treated as Additional
        Book Basis pursuant hereto as a result of such Book-Down Event shall not
        exceed the amount by which the Aggregate Remaining Net Positive
        Adjustments after such Book-Down Event exceeds the remaining Additional
        Book Basis attributable to all of the Partnership's Adjusted Property
        after such Book-Down Event (determined without regard to the application
        of this clause (ii) to such Book-Down Event).


<PAGE>


        "Additional Book Basis Derivative Items" means any Book Basis Derivative
Items that are computed with reference to Additional Book Basis. To the extent
that the Additional Book Basis attributable to all of the Partnership's Adjusted
Property as of the beginning of any taxable period exceeds the Aggregate
Remaining Net Positive Adjustments as of the beginning of such period (the
"Excess Additional Book Basis"), the Additional Book Basis Derivative Items for
such period shall be reduced by the amount that bears the same ratio to the
amount of Additional Book Basis Derivative Items determined without regard to
this sentence as the Excess Additional Book Basis bears to the Additional Book
Basis as of the beginning of such period.

        "Additional Limited Partner" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 10.4 and who is shown as such on the
books and records of the Partnership.

        "Adjusted Capital Account" means the Capital Account maintained for each
Partner as of the end of each fiscal year of the Partnership, (a) increased by
any amounts that such Partner is obligated to restore under the standards set by
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to
restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b)
decreased by (i) the amount of all losses and deductions that, as of the end of
such fiscal year, are reasonably expected to be allocated to such Partner in
subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury
Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions
that, as of the end of such fiscal year, are reasonably expected to be made to
such Partner in subsequent years in accordance with the terms of this Agreement
or otherwise to the extent they exceed offsetting increases to such Partner's
Capital Account that are reasonably expected to occur during (or prior to) the
year in which such distributions are reasonably expected to be made (other than
increases as a result of a minimum gain chargeback pursuant to Section 6.1(d)(i)
or 6.1(d)(ii)). The foregoing definition of Adjusted Capital Account is intended
to comply with the provisions of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The
"Adjusted Capital Account" of a Partner in respect of a General Partner
Interest, a Common Unit, a Subordinated Unit or an Incentive Distribution Right
or any other specified interest in the Partnership shall be the amount which
such Adjusted Capital Account would be if such General Partner Interest, Common
Unit, Subordinated Unit, Incentive Distribution Right or other interest in the
Partnership were the only interest in the Partnership held by a Partner from and
after the date on which such General Partner Interest, Common Unit, Subordinated
Unit, Incentive Distribution Right or other interest was first issued.

        "Adjusted Operating Surplus" means, with respect to any period,
Operating Surplus generated during such period (a) less (i) any net increase in
Working Capital Borrowings during such period and (ii) any net reduction in cash
reserves for Operating Expenditures during such period not relating to an
Operating Expenditure made during such period, and (b) plus (i) any net decrease
in Working Capital Borrowings during such period and (ii) any net increase in
cash reserves for Operating Expenditures during such period required by any debt
instrument for the repayment of principal, interest or premium. Adjusted
Operating Surplus does not include that portion of Operating Surplus included in
clause (a)(i) of the definition of Operating Surplus.

        "Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii).


                                      -2-
<PAGE>


        "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.

        "Aggregate Remaining Net Positive Adjustments" means, as of the end of
any taxable period, the sum of the Remaining Net Positive Adjustments of all the
Partners.

        "Agreed Allocation" means any allocation, other than a Required
Allocation, of an item of income, gain, loss or deduction pursuant to the
provisions of Section 6.1, including, without limitation, a Curative Allocation
(if appropriate to the context in which the term "Agreed Allocation" is used).

        "Agreed Value" of any Contributed Property means the fair market value
of such property or other consideration at the time of contribution as
determined by the General Partner using such reasonable method of valuation as
it may adopt. The General Partner shall, in its discretion, use such method as
it deems reasonable and appropriate to allocate the aggregate Agreed Value of
Contributed Properties contributed to the Partnership in a single or integrated
transaction among each separate property on a basis proportional to the fair
market value of each Contributed Property.

        "Agreement" means this Amended and Restated Agreement of Limited
Partnership of Williams Energy Partners L.P., as it may be amended, supplemented
or restated from time to time.

        "Assignee" means a Non-citizen Assignee or a Person to whom one or more
Limited Partner Interests have been transferred in a manner permitted under this
Agreement and who has executed and delivered a Transfer Application as required
by this Agreement, but who has not been admitted as a Substituted Limited
Partner.

        "Associate" means, when used to indicate a relationship with any Person,
(a) any corporation or organization of which such Person is a director, officer
or partner or is, directly or indirectly, the owner of 20% or more of any class
of voting stock or other voting interest; (b) any trust or other estate in which
such Person has at least a 20% beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity; and (c) any relative or
spouse of such Person, or any relative of such spouse, who has the same
principal residence as such Person.

        "Available Cash" means, with respect to any Quarter ending prior to the
Liquidation Date,

               (a) the sum of (i) all cash and cash equivalents of the
        Partnership Group on hand at the end of such Quarter, and (ii) all
        additional cash and cash equivalents of the Partnership Group on hand on
        the date of determination of Available Cash with respect to such Quarter
        resulting from Working Capital Borrowings made subsequent to the end of
        such Quarter, less


                                      -3-
<PAGE>



               (b) the amount of any cash reserves that is necessary or
        appropriate in the reasonable discretion of the General Partner to (i)
        provide for the proper conduct of the business of the Partnership Group
        (including reserves for future capital expenditures and for anticipated
        future credit needs of the Partnership Group) subsequent to such
        Quarter, (ii) comply with applicable law or any loan agreement, security
        agreement, mortgage, debt instrument or other agreement or obligation to
        which any Group Member is a party or by which it is bound or its assets
        are subject or (iii) provide funds for distributions under Section 6.4
        or 6.5 in respect of any one or more of the next four Quarters;
        provided, however, that the General Partner may not establish cash
        reserves pursuant to (iii) above if the effect of such reserves would be
        that the Partnership is unable to distribute the Minimum Quarterly
        Distribution on all Common Units, plus any Cumulative Common Unit
        Arrearage on all Common Units, with respect to such Quarter; and,
        provided further, that disbursements made by a Group Member or cash
        reserves established, increased or reduced after the end of such Quarter
        but on or before the date of determination of Available Cash with
        respect to such Quarter shall be deemed to have been made, established,
        increased or reduced, for purposes of determining Available Cash, within
        such Quarter if the General Partner so determines.

               Notwithstanding the foregoing, "Available Cash" with respect to
        the Quarter in which the Liquidation Date occurs and any subsequent
        Quarter shall equal zero.

        "Book Basis Derivative Items" means any item of income, deduction, gain
or loss included in the determination of Net Income or Net Loss that is computed
with reference to the Carrying Value of an Adjusted Property (e.g.,
depreciation, depletion, or gain or loss with respect to an Adjusted Property).

        "Book-Down Event" means an event which triggers a negative adjustment to
the Capital Accounts of the Partners pursuant to Section 5.5(d).

        "Book-Tax Disparity" means with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Section 5.5 and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.

        "Book-Up Event" means an event which triggers a positive adjustment to
the Capital Accounts of the Partners pursuant to Section 5.5(d).

        "Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States of
America or the states of New York or Oklahoma shall not be regarded as a
Business Day.

        "Capital Account" means the capital account maintained for a Partner
pursuant to Section 5.5. The "Capital Account" of a Partner in respect of a
General Partner Interest, a


                                      -4-
<PAGE>

Common Unit, a Subordinated Unit, an Incentive Distribution Right or any other
Partnership Interest shall be the amount which such Capital Account would be if
such General Partner Interest, Common Unit, Subordinated Unit, Incentive
Distribution Right or other Partnership Interest were the only interest in the
Partnership held by a Partner from and after the date on which such General
Partner Interest, Common Unit, Subordinated Unit, Incentive Distribution Right
or other Partnership Interest was first issued.

        "Capital Contribution" means any cash, cash equivalents or the Net
Agreed Value of Contributed Property that a Partner contributes to the
Partnership pursuant to this Agreement or the Contribution and Conveyance
Agreement.

        "Capital Improvement" means any (a) addition or improvement to the
capital assets owned by any Group Member or (b) acquisition of existing, or the
construction of new capital assets (including, without limitation, pipeline
systems, terminals, storage facilities and related assets), in each case made to
increase the operating capacity or revenues of the Partnership Group from the
operating capacity or revenues of the Partnership Group existing immediately
prior to such addition, improvement, acquisition or construction.

        "Capital Surplus" has the meaning assigned to such term in Section
6.3(a).

        "Carrying Value" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all depreciation,
amortization and cost recovery deductions charged to the Partners' and
Assignees' Capital Accounts in respect of such Contributed Property, and (b)
with respect to any other Partnership property, the adjusted basis of such
property for federal income tax purposes, all as of the time of determination.
The Carrying Value of any property shall be adjusted from time to time in
accordance with Sections 5.5(d)(i) and 5.5(d)(ii) and to reflect changes,
additions or other adjustments to the Carrying Value for dispositions and
acquisitions of Partnership properties, as deemed appropriate by the General
Partner.

        "Cause" means a court of competent jurisdiction has entered a final,
non-appealable judgment finding the General Partner liable for actual fraud,
gross negligence or willful or wanton misconduct in its capacity as general
partner of the Partnership.

        "Certificate" means a certificate (i) substantially in the form of
Exhibit A to this Agreement, (ii) issued in global form in accordance with the
rules and regulations of the Depositary or (iii) in such other form as may be
adopted by the General Partner in its discretion, issued by the Partnership
evidencing ownership of one or more Common Units or a certificate, in such form
as may be adopted by the General Partner in its discretion, issued by the
Partnership evidencing ownership of one or more other Partnership Securities.

        "Certificate of Limited Partnership" means the Certificate of Limited
Partnership of the Partnership filed with the Secretary of State of the State of
Delaware as referenced in Section 2.1, as such Certificate of Limited
Partnership may be amended, supplemented or restated from time to time.

        "Citizenship Certification" means a properly completed certificate in
such form as may be specified by the General Partner by which an Assignee or a
Limited Partner certifies that he


                                      -5-
<PAGE>

(and if he is a nominee holding for the account of another Person, that to the
best of his knowledge such other Person) is an Eligible Citizen.

        "Claim" has the meaning assigned to such term in Section 7.12(c).

        "Closing Date" means the first date on which Common Units are sold by
the Partnership to the Underwriters pursuant to the provisions of the
Underwriting Agreement.

        "Closing Price" has the meaning assigned to such term in Section
15.1(a).

        "Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time. Any reference herein to a specific section or sections of the
Code shall be deemed to include a reference to any corresponding provision of
successor law.

        "Combined Interest" has the meaning assigned to such term in Section
11.3(a).

        "Commission" means the United States Securities and Exchange Commission.

        "Common Unit" means a Partnership Security representing a fractional
part of the Partnership Interests of all Limited Partners and Assignees and of
the General Partner (exclusive of its interest as a holder of the General
Partner Interest and Incentive Distribution Rights) and having the rights and
obligations. specified with respect to Common Units in this Agreement. The term
"Common Unit" does not refer to a Subordinated Unit prior to its conversion into
a Common Unit pursuant to the terms hereof.

        "Common Unit Arrearage" means, with respect to any Common Unit, whenever
issued, as to any Quarter within the Subordination Period, the excess, if any,
of (a) the Minimum Quarterly Distribution with respect to a Common Unit in
respect of such Quarter over (b) the sum of all Available Cash distributed with
respect to a Common Unit in respect of such Quarter pursuant to Section
6.4(a)(i).

        "Conflicts Committee" means a committee of the Board of Directors of the
General Partner composed entirely of three or more directors who are neither
security holders, officers nor employees of the General Partner nor officers,
directors or employees of any Affiliate of the General Partner.

        "Contributed Property" means each property or other asset, in such form
as may be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership. Once the Carrying Value of a Contributed Property is adjusted
pursuant to Section 5.5(d), such property shall no longer constitute a
Contributed Property, but shall be deemed an Adjusted Property.

        "Contribution and Conveyance Agreement" means that certain Contribution,
Conveyance and Assumption Agreement, dated as of the Closing Date, among the
General Partner, the Partnership, the Operating Partnership and certain other
parties, together with the additional conveyance documents and instruments
contemplated or referenced thereunder.

        "Cumulative Common Unit Arrearage" means, with respect to any Common
Unit, whenever issued, and as of the end of any Quarter, the excess, if any, of
(a) the sum resulting


                                      -6-
<PAGE>


from adding together the Common Unit Arrearage as to an Initial Common Unit for
each of the Quarters within the Subordination Period ending on or before the
last day of such Quarter over (b) the sum of any distributions theretofore made
pursuant to Section 6.4(a)(ii) and the second sentence of Section 6.5 with
respect to an Initial Common Unit (including any distributions to be made in
respect of the last of such Quarters).

        "Curative Allocation" means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 6.1(d)(xi).

        "Current Market Price" has the meaning assigned to such term in Section
15.1(a).

        "Delaware Act" means the Delaware Revised Uniform Limited Partnership
Act, 6 Del C. Section 17-101, et seq., as amended, supplemented or restated from
time to time, and any successor to such statute.

        "Departing Partner" means a former General Partner from and after the
effective date of any withdrawal or removal of such former General Partner
pursuant to Section 11.1 or 11.2.

        "Depositary" means, with respect to any Units issued in global form, The
Depository Trust Company and its successors and permitted assigns.

        "Economic Risk of Loss" has the meaning set forth in Treasury Regulation
Section 1.752-2(a).

        "Eligible Citizen" means a Person qualified to own interests in real
property in jurisdictions in which any Group Member does business or proposes to
do business from time to time, and whose status as a Limited Partner or Assignee
does not or would not subject such Group Member to a significant risk of
cancellation or forfeiture of any of its properties or any interest therein.

        "Event of Withdrawal" has the meaning assigned to such term in Section
11.1(a).

        "Final Subordinated Units" has the meaning assigned to such term in
Section 6.1(d)(x).

        "First Liquidation Target Amount" has the meaning assigned to such term
in Section 6.1(c)(i)(D).

        "First Target Distribution" means $0.5775 per Unit per Quarter (or, with
respect to the period commencing on the Closing Date and ending on March 31,
2001, it means the product of $0.5775 multiplied by a fraction of which the
numerator is the number of days in such period, and of which the denominator is
90), subject to adjustment in accordance with Sections 6.6 and 6.9.

        "General Partner" means Williams GP LLC and its successors and permitted
assigns as general partner of the Partnership.

        "General Partner Interest" means the ownership interest of the General
Partner in the Partnership (in its capacity as a general partner without
reference to any Limited Partner Interest


                                      -7-
<PAGE>


held by it) which may be evidenced by Partnership Securities or a combination
thereof or interest therein, and includes any and all benefits to which the
General Partner is entitled as provided in this Agreement, together with all
obligations of the General Partner to comply with the terms and provisions of
this Agreement.

        "Group" means a Person that with or through any of its Affiliates or
Associates has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting (except voting pursuant to a revocable proxy or
consent given to such Person in response to a proxy or consent solicitation made
to 10 or more Persons) or disposing of any Partnership Securities with any other
Person that beneficially owns, or whose Affiliates or Associates beneficially
own, directly or indirectly, Partnership Securities.

        "Group Member" means a member of the Partnership Group.

        "Holder" as used in Section 7.12, has the meaning assigned to such term
in Section 7.12(a).

        "Incentive Distribution Right" means a non-voting Limited Partner
Interest issued to the General Partner in connection with the transfer of
substantially all of its general partner interest in Williams Ammonia Pipeline,
L.P. and Williams Terminals Holdings, L.P. to the Partnership pursuant to
Section 5.2, which Partnership Interest will confer upon the holder thereof only
the rights and obligations specifically provided in this Agreement with respect
to Incentive Distribution Rights (and no other rights otherwise available to or
other obligations of a holder of a Partnership interest). Notwithstanding
anything in this Agreement to the contrary, the holder of an Incentive
Distribution Right shall not be entitled to vote such Incentive Distribution
Right on any Partnership matter except as may otherwise be required by law.

        "Incentive Distributions" means any amount of cash distributed to the
holders of the Incentive Distribution Rights pursuant to Sections 6.4(a)(v),
(vi) and (vii) and 6.4(b)(iii), (iv) and (v).

        "Indemnified Persons" has the meaning assigned to such term in Section
7.12(c).

        "Indemnitee" means (a) the General Partner, (b) any Departing Partner,
(c) any Person who is or was an Affiliate of the General Partner or any
Departing Partner, (d) any Person who is or was a member, partner, officer,
director, employee, agent or trustee of any Group Member, the General Partner or
any Departing Partner or any Affiliate of any Group Member, the General Partner
or any Departing Partner, and (e) any Person who is or was serving at the
request of the General Partner or any Departing Partner or any Affiliate of the
General Partner or any Departing Partner as an officer, director, employee,
member, partner, agent, fiduciary or trustee of another Person; provided, that a
Person shall not be an Indemnitee by reason of providing, on a fee-for-services
basis, trustee, fiduciary or custodial services.

        "Initial Common Units" means the Common Units sold in the Initial
Offering.

        "Initial Limited Partners" means the General Partner (with respect to
the Incentive Distribution Rights received by it pursuant to Section 5.2)
Williams Natural Gas Liquids, Inc.,


                                      -8-
<PAGE>

Williams Energy Services and the Underwriters, in each case upon being admitted
to the Partnership in accordance with Section 10.1.

        "Initial Offering" means the initial offering and sale of Common Units
to the public, as described in the Registration Statement.

        "Initial Unit Price" means (a) with respect to the Common Units and the
Subordinated Units, the initial public offering price per Common Unit at which
the Underwriters offered the Common Units to the public for sale as set forth on
the cover page of the prospectus included as part of the Registration Statement
and first issued at or after the time the Registration Statement first became
effective or (b) with respect to any other class or series of Units, the price
per Unit at which such class or series of Units is initially sold by the
Partnership, as determined by the General Partner, in each case adjusted as the
General Partner determines to be appropriate to give effect to any distribution,
subdivision or combination of Units.

        "Interim Capital Transactions" means the following transactions if they
occur prior to the Liquidation Date: (a) borrowings, refinancings or refundings
of indebtedness and sales of debt securities (other than Working Capital
Borrowings and other than for items purchased on open account in the ordinary
course of business) by any Group Member; (b) sales of equity interests by any
Group Member (other than the Common Units sold to the Underwriters pursuant to
the exercise of their over-allotment option); and (c) sales or other voluntary
or involuntary dispositions of any assets of any Group Member other than (i)
sales or other dispositions of inventory, accounts receivable and other assets
in the ordinary course of business, and (ii) sales or other dispositions of
assets as part of normal retirements or replacements.

        "Issue Price" means the price at which a Unit is purchased from the
Partnership, after taking into account any sales commission or underwriting
discount charged to the Partnership.

        "Limited Partner" means, unless the context otherwise requires, (a) the
Organizational Limited Partner prior to its withdrawal from the Partnership,
each Initial Limited Partner, each Substituted Limited Partner, each Additional
Limited Partner and any Partner upon the change of its status from General
Partner to Limited Partner pursuant to Section 11.3 or (b) solely for purposes
of Articles V, VI, VII and IX, each Assignee; provided, however, that when the
term "Limited Partner" is used herein in the context of any vote or other
approval, including without limitation Articles XIII and XIV, such term shall
not, solely for such purpose, include any holder of an Incentive Distribution
Right except as may otherwise be required by law.

        "Limited Partner Interest" means the ownership interest of a Limited
Partner or Assignee in the Partnership, which may be evidenced by Common Units,
Subordinated Units, Incentive Distribution Rights or other Partnership
Securities or a combination thereof or interest therein, and includes any and
all benefits to which such Limited Partner or Assignee is entitled as provided
in this Agreement, together with all obligations of such Limited Partner or
Assignee to comply with the terms and provisions of this Agreement; provided,
however, that when the term "Limited Partner Interest" is used herein in the
context of any vote or other approval, including without limitation Articles
XIII and XIV, such term shall not, solely for such purpose, include any holder
of an Incentive Distribution Right except as may otherwise be required by law.


                                      -9-
<PAGE>


        "Liquidation Date" means (a) in the case of an event giving rise to the
dissolution of the Partnership of the type described in clauses (a) and (b) of
the first sentence of Section 12.2, the date on which the applicable time period
during which the holders of Outstanding Units have the right to elect to
reconstitute the Partnership and continue its business has expired without such
an election being made, and (b) in the case of any other event giving rise to
the dissolution of the Partnership, the date on which such event occurs.

        "Liquidator" means one or more Persons selected by the General Partner
to perform the functions described in Section 12.3 as liquidating trustee of the
Partnership within the meaning of the Delaware Act.

        "Merger Agreement" has the meaning assigned to such term in Section
14.1.

        "Minimum Quarterly Distribution" means $0.525 per Unit per Quarter (or
with respect to the period commencing on the Closing Date and ending on March
31, 2001, it means the product of $0.525 multiplied by a fraction of which the
numerator is the number of days in such period and of which the denominator is
90), subject to adjustment in accordance with Sections 6.6 and 6.9.

        "National Securities Exchange" means an exchange registered with the
Commission under Section 6(a) of the Securities Exchange Act of 1934, as
amended, supplemented or restated from time to time, and any successor to such
statute, or the Nasdaq National Market or any successor thereto.

        "Net Agreed Value" means, (a) in the case of any Contributed Property,
the Agreed Value of such property reduced by any liabilities either assumed by
the Partnership upon such contribution or to which such property is subject when
contributed, and (b) in the case of any property distributed to a Partner or
Assignee by the Partnership, the Partnership's Carrying Value of such property
(as adjusted pursuant to Section 5.5(d)(ii)) at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner or
Assignee upon such distribution or to which such property is subject at the time
of distribution, in either case, as determined under Section 752 of the Code.

        "Net Income" means, for any taxable year, the excess, if any, of the
Partnership's items of income and gain (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over the Partnership's items of loss and deduction (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation
of Net Income shall be determined in accordance with Section 5.5(b) and shall
not include any items specially allocated under Section 6.1(d); provided that
the determination of the items that have been specially allocated under Section
6.1(d) shall be made as if Section 6.1(d)(xii) were not in this Agreement.

        "Net Loss" means, for any taxable year, the excess, if any, of the
Partnership's items of loss and deduction (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over the Partnership's items of income and gain (other than
those items taken into account in the computation of Net


                                      -10-
<PAGE>

Termination Gain or Net Termination Loss) for such taxable year. The items
included in the calculation of Net Loss shall be determined in accordance with
Section 5.5(b) and shall not include any items specially allocated under Section
6.1(d); provided that the determination of the items that have been specially
allocated under Section 6.1(d) shall be made as if Section 6.1(d)(xii) were not
in this Agreement.

        "Net Positive Adjustments" means, with respect to any Partner, the
excess, if any, of the total positive adjustments over the total negative
adjustments made to the Capital Account of such Partner pursuant to Book-Up
Events and Book-Down Events.

        "Net Termination Gain" means, for any taxable year, the sum, if
positive, of all items of income, gain, loss or deduction recognized by the
Partnership after the Liquidation Date. The items included in the determination
of Net Termination Gain shall be determined in accordance with Section 5.5(b)
and shall not include any items of income, gain or loss specially allocated
under Section 6.1(d).

        "Net Termination Loss" means, for any taxable year, the sum, if
negative, of all items of income, gain, loss or deduction recognized by the
Partnership after the Liquidation Date. The items included in the determination
of Net Termination Loss shall be determined in accordance with Section 5.5(b)
and shall not include any items of income, gain or loss specially allocated
under Section 6.1(d).

        "Non-citizen Assignee" means a Person whom the General Partner has
determined in its discretion does not constitute an Eligible Citizen and as to
whose Partnership Interest the General Partner has become the Substituted
Limited Partner, pursuant to Section 4.9.

        "Nonrecourse Built-in Gain" means with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or pledge
securing a Nonrecourse Liability, the amount of any taxable gain that would be
allocated to the Partners pursuant to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and
6.2(b)(iii) if such properties were disposed of in a taxable transaction in full
satisfaction of such liabilities and for no other consideration.

        "Nonrecourse Deductions" means any and all items of loss, deduction or
expenditures (including, without limitation, any expenditures described in
Section 705(a)(2)(B) of the Code) that, in accordance with the principles of
Treasury Regulation Section 1.704-2(b), are attributable to a Nonrecourse
Liability.

        "Nonrecourse Liability" has the meaning set forth in Treasury Regulation
Section 1.752-1(a)(2).

        "Notice of Election to Purchase" has the meaning assigned to such term
in Section 15.1(b).

        "Omnibus Agreement" means that Omnibus Agreement, dated as of the
Closing Date, among The Williams Companies, Inc., the General Partner, the
Partnership and the Operating Partnership.


                                      -11-
<PAGE>


        "Operating Expenditures" means all Partnership Group expenditures,
including, but not limited to, taxes, reimbursements of the General Partner,
repayment of Working Capital Borrowings, debt service payments, and capital
expenditures, subject to the following:

               (a) Payments (including prepayments) of principal of and premium
        on indebtedness other than Working Capital Borrowings shall not
        constitute Operating Expenditures.

               (b) Operating Expenditures shall not include (i) capital
        expenditures made for Acquisitions or for Capital Improvements, (ii)
        payment of transaction expenses relating to Interim Capital Transactions
        or (iii) distributions to Partners. Where capital expenditures are made
        in part for Acquisitions or for Capital Improvements and in part for
        other purposes, the General Partner's good faith allocation between the
        amounts paid for each shall be conclusive.

        "Operating Partnership" means Williams OLP, L.P., a Delaware limited
partnership, and any successors thereto.

        "Operating Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of the Operating Partnership, as it may be
amended, supplemented or restated from time to time.

        "Operating Surplus" means, with respect to any period ending prior to
the Liquidation Date, on a cumulative basis and without duplication,

               (a) the sum of (i) $15 million plus all cash and cash equivalents
        of the Partnership Group on hand as of the close of business on the
        Closing Date, (ii) all cash receipts of the Partnership Group for the
        period beginning on the Closing Date and ending with the last day of
        such period, other than cash receipts from Interim Capital Transactions
        (except to the extent specified in Section 6.5) and (iii) all cash
        receipts of the Partnership Group after the end of such period but on or
        before the date of determination of Operating Surplus with respect to
        such period resulting from Working Capital Borrowings, less

               (b) the sum of (i) Operating Expenditures for the period
        beginning on the Closing Date and ending with the last day of such
        period and (ii) the amount of cash reserves that is necessary or
        advisable in the reasonable discretion of the General Partner to provide
        funds for future Operating Expenditures; provided, however, that
        disbursements made (including contributions to a Group Member or
        disbursements on behalf of a Group Member) or cash reserves established,
        increased or reduced after the end of such period but on or before the
        date of determination of Available Cash with respect to such period
        shall be deemed to have been made, established, increased or reduced,
        for purposes of determining Operating Surplus, within such period if the
        General Partner so determines.

        Notwithstanding the foregoing, "Operating Surplus" with respect to the
Quarter in which the Liquidation Date occurs and any subsequent Quarter shall
equal zero.


                                      -12-
<PAGE>


        "Opinion of Counsel" means a written opinion of counsel (who may be
regular counsel to the Partnership or the General Partner or any of its
Affiliates) acceptable to the General Partner in its reasonable discretion.

        "Option Closing Date" means the date or dates on which any Common Units
are sold by the Partnership to the Underwriters upon exercise of the
Over-Allotment Option.

        "Organizational Limited Partner" means Williams Energy Services, LLC in
its capacity as the organizational limited partner of the Partnership pursuant
to this Agreement.

        "Outstanding" means, with respect to Partnership Securities, all
Partnership Securities that are issued by the Partnership and reflected as
outstanding on the Partnership's books and records as of the date of
determination; provided, however, that if at any time any Person or Group (other
than the General Partner or its Affiliates) beneficially owns 20% or more of any
Outstanding Partnership Securities of any class then Outstanding, all
Partnership Securities owned by such Person or Group shall not be voted on any
matter and shall not be considered to be Outstanding when sending notices of a
meeting, of Limited Partners to vote on any matter (unless otherwise required by
law), calculating required votes, determining the presence of a quorum or for
other similar purposes under this Agreement, except that Common Units so owned
shall be considered to be Outstanding for purposes of Section 11.1(b)(iv) (such
Common Units shall not, however, be treated as a separate class of Partnership
Securities for purposes of this Agreement); provided, further, that the
foregoing limitation shall not apply (i) to any Person or Group who acquired 20%
or more of any Outstanding Partnership Securities of any class then Outstanding
directly from the General Partner or its Affiliates or (ii) to any Person or
Group who acquired 20% or more of any Outstanding Partnership Securities of any
class then Outstanding directly or indirectly from a Person or Group described
in clause (i) provided that the General Partner shall have notified such Person
or Group in writing that such limitation shall not apply.

        "Over-Allotment Option" means the over-allotment option granted to the
Underwriters by the Partnership pursuant to the Underwriting Agreement.

        "Parity Units" means Common Units and all other Units of any other class
or series that have the right to participate (i) in distributions of Available
Cash from Operating Surplus pursuant to each of subclauses (a)(i) and (a)(ii) of
Section 6.4 in the same order of priority with respect to the participation of
Common Units in such distributions or (ii) to participate in allocations of Net
Termination Gain pursuant to Section 6.1(c)(i)(B) in the same order of priority
with the Common Units. Units whose participation in such (i) distributions of
Available Cash from Operating Surplus and (ii) allocations of Net Termination
Gain are subordinate in order of priority to such distributions and allocations
on Common Units shall not constitute Parity Units even if such Units are
convertible under certain circumstances into Common Units or Parity Units.

        "Partner Nonrecourse Debt" has the meaning set forth in Treasury
Regulation Section 1.704-2(b)(4).

        "Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Treasury Regulation Section 1.704-2(i)(2).


                                      -13-
<PAGE>


        "Partner Nonrecourse Deductions" means any and all items of loss,
deduction or expenditure (including, without limitation, any expenditure
described in Section 705(a)(2)(B) of the Code) that, in accordance with the
principles of Treasury Regulation Section 1.704-2(i), are attributable to a
Partner Nonrecourse Debt.

        "Partners" means the General Partner and the Limited Partners.

        "Partnership" means Williams Energy Partners L.P., a Delaware limited
partnership, and any successors thereto.

        "Partnership Group" means the Partnership, the Operating Partnership and
any Subsidiary of any such entity, treated as a single consolidated entity.

        "Partnership Interest" means an interest in the Partnership, which shall
include the General Partner Interest and Limited Partner Interests.

        "Partnership Minimum Gain" means that amount determined in accordance
with the principles of Treasury Regulation Section 1.704-2(d).

        "Partnership Security" means any class or series of equity interest in
the Partnership (but excluding any options, rights, warrants and appreciation
rights relating to an equity interest in the Partnership), including without
limitation, Common Units, Subordinated Units and Incentive Distribution Rights.

        "Percentage Interest" means as of any date of determination (a) as to
the General Partner (with respect to its General Partner Interest), an aggregate
1.0%, (b) as to any Unitholder or Assignee holding Units, the product obtained
by multiplying (i) 99% less the percentage applicable to paragraph (c) by (ii)
the quotient obtained by dividing (A) the number of Units held by such
Unitholder or Assignee by (B) the total number of all Outstanding Units, and (c)
as to the holders of additional Partnership Securities issued by the Partnership
in accordance with Section 5.6, the percentage established as a part of such
issuance. The Percentage Interest with respect to an Incentive Distribution
Right shall at all times be zero.

        "Person" means an individual or a corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity.

        "Per Unit Capital Amount" means, as of any date of determination, the
Capital Account, stated on a per Unit basis, underlying any Unit held by a
Person other than the General Partner or any Affiliate of the General Partner
who holds Units.

        "Pro Rata" means (a) when modifying Units or any class thereof,
apportioned equally among all designated Units in accordance with their relative
Percentage Interests, (b) when modifying Partners and Assignees, apportioned
among all Partners and Assignees in accordance with their relative Percentage
Interests and (c) when modifying holders of Incentive Distribution Rights,
apportioned equally among all holders of Incentive Distribution Rights in
accordance with the relative number of Incentive Distribution Rights held by
each such holder.


                                      -14-
<PAGE>


        "Purchase Date" means the date determined by the General Partner as the
date for purchase of all Outstanding Units of a certain class (other than Units
owned by the General Partner and its Affiliates) pursuant to Article XV.

        "Quarter" means, unless the context requires otherwise, a fiscal
quarter, or with respect to the first fiscal quarter after the Closing Date the
portion of such fiscal quarter after the Closing Date, of the Partnership.

        "Recapture Income" means any gain recognized by the Partnership
(computed without regard to any adjustment required by Section 734 or Section
743 of the Code) upon the disposition of any property or asset of the
Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.

        "Record Date" means the date established by the General Partner for
determining (a) the identity of the Record Holders entitled to notice of, or to
vote at, any meeting of Limited Partners or entitled to vote by ballot or give
approval of Partnership action in writing without a meeting or entitled to
exercise rights in respect of any lawful action of Limited Partners or (b) the
identity of Record Holders entitled to receive any report or distribution or to
participate in any offer.

        "Record Holder" means the Person in whose name a Common Unit is
registered on the books of the Transfer Agent as of the opening of business on a
particular Business Day, or with respect to other Partnership Securities, the
Person in whose name any such other Partnership Security is registered on the
books which the General Partner has caused to be kept as of the opening of
business on such Business Day.

        "Redeemable Interests" means any Partnership Interests for which a
redemption notice has been given, and has not been withdrawn, pursuant to
Section 4.10.

        "Registration Statement" means the Registration Statement on Form S-1
(Registration No. 333-48866) as it has been or as it may be amended or
supplemented from time to time, filed by the Partnership with the Commission
under the Securities Act to register the offering and sale of the Common Units
in the Initial Offering.

        "Remaining Net Positive Adjustments" means as of the end of any taxable
period, (i) with respect to the Unitholders holding Common Units or Subordinated
Units, the excess of (a) the Net Positive Adjustments of the Unitholders holding
Common Units or Subordinated Units as of the end of such period over (b) the sum
of those Partners' Share of Additional Book Basis Derivative Items for each
prior taxable period, (ii) with respect to the General Partner (as holder of the
General Partner Interest), the excess of (a) the Net Positive Adjustments of the
General Partner as of the end of such period over (b) the sum of the General
Partner's Share of Additional Book Basis Derivative Items with respect to the
General Partner Interest for each prior taxable period, and (iii) with respect
to the holders of Incentive Distribution Rights, the excess of (a) the Net
Positive Adjustments of the holders of Incentive Distribution Rights as of the
end of such period over (b) the sum of the Share of Additional Book Basis
Derivative Items of the holders of the Incentive Distribution Rights for each
prior taxable period.



                                      -15-
<PAGE>

        "Required Allocations" means (a) any limitation imposed on any
allocation of Net Losses or Net Termination Losses under Section 6.1(b) or
6.1(c)(ii) and (b) any allocation of an item of income, gain, loss or deduction
pursuant to Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or
6.1(d)(ix).

        "Residual Gain" or "Residual Loss" means any item of gain or loss; as
the case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of a Contributed Property
or Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to eliminate
Book-Tax Disparities.

        "Restricted Business" has the meaning assigned to such term in the
Omnibus Agreement.

        "Second Liquidation Target Amount" has the meaning assigned to such term
in Section 6.1(c)(i)(E).

        "Second Target Distribution" means $0.65625 per Unit per Quarter (or,
with respect to the period commencing on the Closing Date and ending on March
31, 2001, it means the product of $0.65625 multiplied by a fraction of which the
numerator is equal to the number of days in such period and of which the
denominator is 90), subject to adjustment in accordance with Sections 6.6 and
6.9.

        "Securities Act" means the Securities Act of 1933, as amended,
supplemented or restated from time to time and any successor to such statute.

        "Share of Additional Book Basis Derivative Items" means in connection
with any allocation of Additional Book Basis Derivative Items for any taxable
period, (i) with respect to the Unitholders holding Common Units or Subordinated
Units, the amount that bears the same ratio to such Additional Book Basis
Derivative Items as the Unitholders' Remaining Net Positive Adjustments as of
the end of such period bears to the Aggregate Remaining Net Positive Adjustments
as of that time, (ii) with respect to the General Partner (as holder of the
General Partner Interest), the amount that bears the same ratio to such
additional Book Basis Derivative Items as the General Partner's Remaining Net
Positive Adjustments as of the end of such period bears to the Aggregate
Remaining Net Positive Adjustment as of that time, and (iii) with respect to the
Partners holding Incentive Distribution Rights, the amount that bears the same
ratio to such Additional Book Basis Derivative Items as the Remaining Net
Positive Adjustments of the Partners holding the Incentive Distribution Rights
as of the end of such period bears to the Aggregate Remaining Net Positive
Adjustments as of that time.

        "Special Approval" means approval by a majority of the members of the
Conflicts Committee.

        "Subordinated Unit" means a Unit representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees (other than of
holders of the Incentive Distribution Rights) and having the rights and
obligations specified with respect to Subordinated Units in this Agreement. The
term "Subordinated Unit" as used herein does not include a Common Unit or Parity
Unit. A Subordinated Unit that is convertible into a Common Unit or a Parity
Unit shall not constitute a Common Unit or Parity Unit until such conversion
occurs.


                                      -16-
<PAGE>

        "Subordination Period" means the period commencing on the Closing Date
and ending on the first to occur of the following dates:

               (a) the first day of any Quarter beginning after December 31,
        2005 in respect of which (i) (A) distributions of Available Cash from
        Operating Surplus on each of the Outstanding Common Units and
        Subordinated Units with respect to each of the three consecutive,
        non-overlapping four-Quarter periods immediately preceding such date
        equaled or exceeded the sum of the Minimum Quarterly Distribution (or
        portion thereof for the first fiscal quarter after the Closing Date) on
        all Outstanding Common Units and Subordinated Units during such periods
        and (B) the Adjusted Operating Surplus generated during each of the
        three consecutive, non-overlapping four-Quarter periods immediately
        preceding such date equaled or exceeded the sum of the Minimum Quarterly
        Distribution on all of the Common Units and Subordinated Units that were
        Outstanding during such periods on a fully diluted basis (i.e., taking
        into account for purposes of such determination all Outstanding Common
        Units, all Outstanding Subordinated Units, all Common Units and
        Subordinated Units issuable upon exercise of employee options that have,
        as of the date of determination, already vested or are scheduled to vest
        prior to the end of the Quarter immediately following the Quarter with
        respect to which such determination is made, and all Common Units and
        Subordinated Units that have as of the date of determination, been
        earned by but not yet issued to management of the Partnership in respect
        of incentive compensation), plus the related distribution on the General
        Partner Interest in the Partnership and on the general partner interest
        in the Operating Partnership, during such periods and (ii) there are no
        Cumulative Common Unit Arrearages; and

               (b) the date on which the General Partner is removed as general
        partner of the Partnership upon the requisite vote by holders of
        Outstanding Units under circumstances where Cause does not exist and
        Units held by the General Partner and its Affiliates are not voted in
        favor of such removal.

        "Subsidiary" means, with respect to any Person, (a) a corporation of
which more than 50% of the voting power of shares entitled (without regard to
the occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof, or (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or indirectly,
at the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such-Person.


                                      -17-
<PAGE>


        "Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 10.2 in place of and with
all the rights of a Limited Partner and who is shown as a Limited Partner on the
books and records of the Partnership.

        "Surviving Business Entity" has the meaning assigned to such term in
Section 14.2(b).

        "Third Target Distribution" means $0.7875 per Unit per Quarter (or, with
respect to the period commencing on the Closing Date and ending on March 31,
2001, it means the product of $0.7875 multiplied by a fraction of which the
numerator is equal to the number of days in such period and of which the
denominator is 90), subject to adjustment in accordance with Sections 6.6 and
6.9.

        "Third Target Liquidation Amount" has the meaning assigned to such term
in Section 6.1(c)(i)(F).

        "Trading Day" has the meaning assigned to such term in Section 15.1(a).

        "Transfer" has the meaning assigned to such term in Section 4.4(a).

        "Transfer Agent" means such bank, trust company or other Person
(including the General Partner or one of its Affiliates) as shall be appointed
from time to time by the Partnership to act as registrar and transfer agent for
the Common Units; provided that if no Transfer Agent is specifically designated
for any other Partnership Securities, the General Partner shall act in such
capacity.

        "Transfer Application" means an application and agreement for transfer
of Units in the form set forth on the back of a Certificate or in a form
substantially to the same effect in a separate instrument.

        "Underwriter" means each Person named as an underwriter in Schedule I to
the Underwriting Agreement who purchases Common Units pursuant thereto.

        "Underwriting Agreement" means the Underwriting Agreement dated February
5, 2001 among the Underwriters, the Partnership and certain other parties,
providing for the purchase of Common Units by such Underwriters.

        "Unit" means a Partnership Security that is designated as a "Unit" and
shall include Common Units and Subordinated Units but shall not include (i) a
General Partner Interest or (ii) Incentive Distribution Rights.

        "Unitholders" means the holders of Common Units and Subordinated Units.

        "Unit Majority" means, during the Subordination Period, at least a
majority of the Outstanding Common Units, excluding Common Units held by the
General Partner and any Affiliates of the General Partner, voting as a class and
at least a majority of the Outstanding Subordinated Units voting as a class, and
thereafter, at least a majority of the Outstanding Common Units.


                                      -18-
<PAGE>


        "Unpaid MQD" has the meaning assigned to such term in Section
6.1(c)(i)(B).

        "Unrealized Gain" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the fair
market value of such property as of such date (as determined under Section
5.5(d)) over (b) the Carrying Value of such property as of such date (prior to
any adjustment to be made pursuant to Section 5.5(d) as of such date).

        "Unrealized Loss" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the Carrying
Value of such property as of such date (prior to any adjustment to be made
pursuant to Section 5.5(d) as of such date) over (b) the fair market value of
such property as of such date (as determined under Section 5.5(d)).

        "Unrecovered Capital" means at any time, with respect to a Unit, the
Initial Unit Price less the sum of all distributions constituting Capital
Surplus theretofore made in respect of an Initial Common Unit and any
distributions of cash (or the Net Agreed Value of any distributions in kind) in
connection with the dissolution and liquidation of the Partnership theretofore
made in respect of an Initial Common Unit, adjusted as the General Partner
determines to be appropriate to give effect to any distribution, subdivision or
combination of such Units.

        "US GAAP" means United States Generally Accepted Accounting Principles
consistently applied.

        "Withdrawal Opinion of Counsel" has the meaning assigned to such term in
Section 11.1(b).

        "Working Capital Borrowings" means borrowings exclusively for working
capital purposes made pursuant to a credit facility or other arrangement
requiring all such borrowings thereunder to be reduced to a relatively small
amount each year (or for the year in which the Initial Offering is consummated,
the 12-month period beginning on the Closing Date) for an economically
meaningful period of time.

Section 1.2. Construction.

        Unless the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa; (b) references to Articles and Sections refer to Articles and
Sections of this Agreement; and (c) the term "include" or "includes" means
includes, without limitation, and "including" means including, without
limitation.

                                   ARTICLE II.
                                  ORGANIZATION

Section 2.1. Formation.

        The General Partner and the Organizational Limited Partner have
previously formed the Partnership as a limited partnership pursuant to the
provisions of the Delaware Act and hereby amend and restate the original
Agreement of Limited Partnership of Williams Energy Partners


                                      -19-
<PAGE>

L.P. in its entirety. This amendment and restatement shall become effective on
the date of this Agreement. Except as expressly provided to the contrary in this
Agreement, the rights, duties (including fiduciary duties), liabilities and
obligations of the Partners and the administration, dissolution and termination
of the Partnership shall be governed by the Delaware Act, All Partnership
Interests shall constitute personal property of the owner thereof for all
purposes and a Partner has no interest in specific Partnership property.

Section 2.2. Name.

        The name of the Partnership shall be "Williams Energy Partners L.P." The
Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the General Partner in its sole discretion,
including the name of the General Partner. The words "Limited Partnership,"
"Ltd." or similar words or letters shall be included in the Partnership's name
where necessary for the purpose of complying with the laws of any jurisdiction
that so requires. The General Partner in its discretion may change the name of
the Partnership at any time and from time to time and shall notify the Limited
Partners of such change in the next regular communication to the Limited
Partners.

Section 2.3. Registered Office; Registered Agent; Principal Office; Other
Offices.

        Unless and until changed by the General Partner, the registered office
of the Partnership in the State of Delaware shall be located at 1209 Orange
Street, Wilmington, Delaware 19801, and the registered agent for service of
process on the Partnership in the State of Delaware at such registered office
shall be The Corporation Trust Company. The principal office of the Partnership
shall be located at One Williams Center, Tulsa, Oklahoma 74172 or such other
place as the General Partner may from time to time designate by notice to the
Limited Partners. The Partnership may maintain offices at such other place or
places within or outside the State of Delaware as the General Partner deems
necessary or appropriate. The address of the General Partner shall be One
Williams Center, Tulsa Oklahoma 74172 or such other place as the General Partner
may from time to time designate by notice to the Limited Partners.

Section 2.4. Purpose and Business.

        The Purpose and nature of the business to be conducted by the
Partnership shall be to (a) serve as a Partner of the Operating Partnership and,
in connection therewith, to exercise all the rights and powers conferred upon,
the Partnership as a partner of the Operating Partnership pursuant to the
Operating Partnership Agreement or otherwise, (b) engage directly in, or enter
into or form any corporation, partnership, joint venture, limited liability
company or other arrangement to engage indirectly in, any business activity that
the Operating Partnership is permitted to engage in by the Operating Partnership
Agreement and, in connection therewith, to exercise all of the rights and powers
conferred upon the Partnership pursuant to the agreements relating to such
business activity, (c) engage directly in, or enter into or form any
corporation, partnership, joint venture, limited liability company or other
entity or arrangement to engage indirectly in, any business activity that the
General Partner approves and which lawfully may be conducted by a limited
partnership organized pursuant to the Delaware Act and, in connection therewith,
to exercise all of the rights and powers conferred upon the Partnership pursuant
to the agreements relating to such business activity; provided, however, that
the General Partner


                                      -20-
<PAGE>

reasonably determines, as of the date of the acquisition or commencement of such
activity, that such activity (i) generates "qualifying income" (as such term is
defined pursuant to Section 7704 of the Code) or a Subsidiary, or a Partnership
activity that generates qualifying income, or (ii) enhances the operations of an
activity of the Operating Partnership and (d) do anything necessary or
appropriate to the foregoing, including the making of capital contributions or
loans to a Group Member. The General Partner has no obligation or duty to the
Partnership, the Limited Partners, or the Assignees to propose or approve, and
in its discretion may decline to propose or approve, the conduct by the
Partnership of any business.

Section 2.5. Powers.

        The Partnership shall be empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described in Section
2.4 and for the protection and benefit of the Partnership.

Section 2.6. Power of Attorney.

            (a) Each Limited Partner and each Assignee hereby constitutes and
appoints the General Partner and, if a Liquidator shall have been selected
pursuant to Section 12.3, the Liquidator, (and any successor to the Liquidator
by merger, transfer, assignment, election or otherwise) and each of their
authorized officers and attorneys-in-fact, as the case may be, with full power
of substitution, as his true and lawful agent and attorney-in-fact, with full
power and authority in his name, place and stead, to:

            (i) execute, swear to, acknowledge, deliver, file and record in the
        appropriate public offices (A) all certificates, documents and other
        instruments (including this Agreement and the Certificate of Limited
        Partnership and all amendments or restatements hereof or thereof) that
        the General Partner or the Liquidator deems necessary or appropriate to
        form, qualify or continue the existence or qualification of the
        Partnership as a limited partnership (or a partnership in which the
        limited partners have limited liability) in the State of Delaware and in
        all other jurisdictions in which the Partnership may conduct business or
        own property; (B) all certificates, documents and other instruments that
        the General Partner or the Liquidator deems necessary or appropriate to
        reflect, in accordance with its terms, any amendment, change,
        modification or restatement of this Agreement; (C) all certificates,
        documents and other instruments (including conveyances and a certificate
        of cancellation) that the General Partner or the Liquidator deems
        necessary or appropriate to reflect the dissolution and liquidation of
        the Partnership pursuant to the terms of this Agreement; (D) all
        certificates, documents and other instruments relating to the admission,
        withdrawal, removal or substitution of any Partner pursuant to, or other
        events described in, Article IV, X, XI or XII; (E) all certificates,
        documents and other instruments relating to the determination of the
        rights, preferences and privileges of any class or series of Partnership
        Securities issued pursuant to Section 5.6; and (F) all certificates,
        documents and other instruments (including agreements and a certificate
        of merger) relating to a merger or consolidation of the Partnership
        pursuant to Article XIV; and


                                      -21-
<PAGE>

            (ii) execute, swear to, acknowledge, deliver, file and record all
        ballots, consents, approvals, waivers, certificates, documents and other
        instruments necessary or appropriate, in the discretion of the General
        Partner or the Liquidator, to make, evidence, give, confirm or ratify
        any vote, consent, approval, agreement or other action that is made or
        given by the Partners hereunder or is consistent with the terms of this
        Agreement or is necessary or appropriate, in the discretion of the
        General Partner or the Liquidator, to effectuate the terms or intent of
        this Agreement; provided, that when required by Section 13.3 or any
        other provision of this Agreement that establishes a percentage of the
        Limited Partners or of the Limited Partners of any class or series
        required to take any action, the General Partner and the Liquidator may
        exercise the power of attorney made in this Section 2.6(a)(ii) only
        after the necessary vote, consent or approval of the Limited Partners or
        of the Limited Partners of such class or series, as applicable.

        Nothing contained in this Section 2.6(a) shall be construed as
authorizing the General Partner to amend this Agreement except in accordance
with Article XIII or as may be otherwise expressly provided for in this
Agreement.

            (b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, and it shall survive and, to
the maximum extent permitted by law, not be affected by the subsequent death,
incompetency, disability, incapacity, dissolution, bankruptcy or termination of
any Limited Partner or Assignee and the transfer of all or any portion of such
Limited Partner's or Assignee's Partnership Interest and shall extend to such
Limited Partner's or Assignee's heirs, successors, assigns and personal
representatives. Each such Limited Partner or Assignee hereby agrees to be bound
by any representation made by the General Partner or the Liquidator acting in
good faith pursuant to such power of attorney; and each such Limited Partner or
Assignee, to the maximum extent permitted by law, hereby waives any and all
defenses that may be available to contest, negate or disaffirm the action of the
General Partner or the Liquidator taken in good faith under such power of
attorney. Each Limited Partner or Assignee shall execute and deliver to the
General Partner or the Liquidator, within 15 days after receipt of the request
therefor, such further designation, powers of attorney and other instruments as
the General Partner or the Liquidator deems necessary to effectuate this
Agreement and the purposes of the Partnership.

Section 2.7. Term.

        The term of the Partnership commenced upon the filing of the Certificate
of Limited Partnership in accordance with the Delaware Act and shall continue in
existence until the dissolution of the Partnership in accordance with the
provisions of Article XII. The existence of the Partnership as a separate legal
entity shall continue until the cancellation of the Certificate of Limited
Partnership as provided in the Delaware Act.

Section 2.8. Title to Partnership Assets.

        Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner or Assignee, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the


                                      -22-
<PAGE>


name of the Partnership, the General Partner, one or more of its Affiliates or
one or more nominees, as the General Partner may determine. The General Partner
hereby declares and warrants that any Partnership assets for which record title
is held in the name of the General Partner or one or more of its Affiliates or
one or more nominees shall be held by the General Partner or such Affiliate or
nominee for the use and benefit of the Partnership in accordance with the
provisions of this Agreement; provided, however, that the General Partner shall
use reasonable efforts to cause record title to such assets (other than those
assets in respect of which the General Partner determines that the expense and
difficulty of conveyancing makes transfer of record title to the Partnership
impracticable) to be vested in the Partnership as soon as reasonably
practicable; provided, further, that, prior to the withdrawal or removal of the
General Partner or as soon thereafter as practicable, the General Partner shall
use reasonable efforts to effect the transfer of record title to the Partnership
and, prior to any such transfer, will provide for the use of such assets in a
manner satisfactory to the General Partner. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which record title to such Partnership assets is
held.

                                  ARTICLE III.
                           RIGHTS OF LIMITED PARTNERS

Section 3.1. Limitation of Liability.

        The Limited Partners and the Assignees shall have no liability under
this Agreement except as expressly provided in this Agreement or the Delaware
Act.

Section 3.2. Management of Business.

        No Limited Partner or Assignee, in its capacity as such, shall
participate in the operation, management or control (within the meaning of the
Delaware Act) of the Partnership's business, transact any business in the
Partnership's name or have the power to sign documents for or otherwise bind the
Partnership. Any action taken by any Affiliate of the General Partner or any
officer, director, employee, manager, member, general partner, agent or trustee
of the General Partner or any of its Affiliates, or any officer, director,
employee, manager, member, general partner, agent or trustee of a Group Member,
in its capacity as such, shall not be deemed to be participation in the control
of the business of the Partnership by a limited partner of the Partnership
(within the meaning of Section 17-303(a) of the Delaware Act) and shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.

Section 3.3. Outside Activities of the Limited Partners.

        Subject to the provisions of Section 7.5 and the Omnibus Agreement,
which shall continue to be applicable to the Persons referred to therein,
regardless of whether such Persons shall also be Limited Partners or Assignees,
any Limited Partner or Assignee shall be entitled to and may have business
interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities in direct competition
with the Partnership Group. Neither the Partnership nor any of the other
Partners or Assignees shall have


                                      -23-
<PAGE>


any rights by virtue of this Agreement in any business ventures of any Limited
Partner or Assignee.

Section 3.4. Rights of Limited Partners.

            (a) In addition to other rights provided by this Agreement or by
applicable law, and except as limited by Section 3.4(b), each Limited Partner
shall have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon reasonable written demand
and at such Limited Partner's own expense:

            (i) to obtain true and full information regarding the status of the
        business and financial condition of the Partnership;

            (ii) promptly after becoming available, to obtain a copy of the
        Partnership's federal, state and local income tax returns for each year;

            (iii) to have furnished to him a current list of the name and last
        known business, residence or mailing address of each Partner;

            (iv) to have furnished to him a copy of this Agreement and the
        Certificate of Limited Partnership and all amendments thereto, together
        with a copy of the executed copies of all powers of attorney pursuant to
        which this Agreement, the Certificate of Limited Partnership and all
        amendments thereto have been executed;

            (v) to obtain true and full information regarding the amount of cash
        and a description and statement of the Net Agreed Value of any other
        Capital Contribution by each Partner and which each Partner has agreed
        to contribute in the future, and the date on which each became a
        Partner; and

            (vi) to obtain such other information regarding the affairs of the
        Partnership as is just and reasonable.

            (b) The General Partner may keep confidential from the Limited
Partners and Assignees, for such period of time as the General Partner deems
reasonable, (i) any information that the General Partner reasonably believes to
be in the nature of trade secrets or (ii) other information the disclosure of
which the General Partner in good faith believes (A) is not in the best
interests of the Partnership Group, (B) could damage the Partnership Group or
(C) that any Group Member is required by law or by agreement with any third
party to keep confidential (other than agreements with Affiliates of the
Partnership the primary purpose of which is to circumvent the obligations set
forth in this Section 3.4).


                                      -24-
<PAGE>



                                   ARTICLE IV.
        CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
                       REDEMPTION OF PARTNERSHIP INTERESTS

Section 4.1. Certificates.

        Upon the Partnership's issuance of Common Units or Subordinated Units to
any Person, the Partnership shall issue one or more Certificates in the name of
such Person evidencing the number of such Units being so issued. In addition,
(a) upon the General Partner's request, the Partnership shall issue to it one or
more Certificates in the name of the General Partner evidencing its interests in
the Partnership and (b) upon the request of any Person owning Incentive
Distribution Rights or any other Partnership Securities other than Common Units
or Subordinated Units, the Partnership shall issue to such Person one or more
certificates evidencing such Incentive Distribution Rights or other Partnership
Securities other than Common Units or Subordinated Units. Certificates shall be
executed on behalf of the Partnership by the Chairman of the Board, President or
any Vice President and the Secretary or any Assistant Secretary of the General
Partner. No Common Unit Certificate shall be valid for any purpose until it has
been countersigned by the Transfer Agent; provided, however, that if the General
Partner elects to issue Common Units in global form, the Common Unit
Certificates shall be valid upon receipt of a certificate from the Transfer
Agent certifying that the Common Units have been duly registered in accordance
with the directions of the Partnership and the Underwriters. Subject to the
requirements of Section 6.7(b), the Partners holding Certificates evidencing
Subordinated Units may exchange such Certificates for Certificates evidencing
Common Units on or after the date on which such Subordinated Units are converted
into Common Units pursuant to the terms of Section 5.8.

Section 4.2. Mutilated, Destroyed, Lost or Stolen Certificates.

            (a) If any mutilated Certificate is surrendered to the Transfer
Agent, the appropriate officers of the General Partner on behalf of the
Partnership shall execute, and the Transfer Agent shall countersign and deliver
in exchange therefor, a new Certificate evidencing the same number and type of
Partnership Securities as the Certificate so surrendered.

            (b) The appropriate officers of the General Partner on behalf of the
Partnership shall execute and deliver, and the Transfer Agent shall countersign
a new Certificate in place of any Certificate previously issued if the Record
Holder of the Certificate:

            (i) makes proof by affidavit, in form and substance satisfactory to
        the Partnership, that a previously issued Certificate has been lost,
        destroyed or stolen;

            (ii) requests the issuance of a new Certificate before the
        Partnership has notice that the Certificate has been acquired by a
        purchaser for value in good faith and without notice of an adverse
        claim;

            (iii) if requested by the Partnership, delivers to the Partnership a
        bond, in form and substance satisfactory to the Partnership, with surety
        or sureties and with fixed or open penalty as the Partnership may
        reasonably direct, in its sole discretion, to indemnify the Partnership,
        the Partners, the General Partner and the Transfer Agent against any


                                      -25-
<PAGE>


        claim that may be made on account of the alleged loss, destruction or
        theft of the Certificate; and

            (iv) satisfies any other reasonable requirements imposed by the
        Partnership.

        If a Limited Partner or Assignee fails to notify the Partnership within
a reasonable time after he has notice of the loss, destruction or theft of a
Certificate, and a transfer of the Limited Partner Interests represented by the
Certificate is registered before the Partnership, the General Partner or the
Transfer Agent receives such notification, the Limited Partner or Assignee shall
be precluded from making any claim against the Partnership, the General Partner
or the Transfer Agent for such transfer or for a new Certificate.

            (c) As a condition to the issuance of any new Certificate under this
Section 4.2, the Partnership may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Transfer
Agent) reasonably connected therewith.

Section 4.3. Record Holders.

        The Partnership shall be entitled to recognize the Record Holder as the
Partner or Assignee with respect to any Partnership Interest and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such Partnership Interest on the part of any other Person, regardless of whether
the Partnership shall have actual or other notice thereof, except as otherwise
provided by law or any applicable rule, regulation, guideline or requirement of
any National Securities Exchange on which such Partnership Interests are listed
for trading. Without limiting the foregoing, when a Person (such as a broker,
dealer, bank, trust company or clearing corporation or an agent of any of the
foregoing) is acting as nominee, agent or in some other representative capacity
for another Person in acquiring and/or holding Partnership Interests, as between
the Partnership on the one hand, and such other Persons on the other, such
representative Person (a) shall be the Partner or Assignee (as the case may be)
of record and beneficially, (b) must execute and deliver a Transfer Application
and (c) shall be bound by this Agreement and shall have the rights and
obligations of a Partner or Assignee (as the case may be) hereunder and as, and
to the extent, provided for herein.

Section 4.4. Transfer Generally.

            (a) The term "transfer," when used in this Agreement with respect to
a Partnership Interest, shall be deemed to refer to a transaction by which the
General Partner assigns its General Partner Interest to another Person who
becomes the General Partner, by which the holder of a Limited Partner Interest
assigns such Limited Partner Interest to another Person who is or becomes a
Limited Partner or an Assignee, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other disposition by law
or otherwise.

            (b) No Partnership Interest shall be transferred, in whole or in
part, except in accordance with the terms and conditions set forth in this
Article IV. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article IV shall be null and void.


                                      -26-
<PAGE>


            (c) Nothing contained in this Agreement shall be construed to
prevent a disposition by any member of the General Partner of any or all of the
issued and outstanding membership interests of the General Partner.

Section 4.5. Registration and Transfer of Limited Partner Interests.

            (a) The Partnership shall keep or cause to be kept on behalf of the
Partnership a register in which, subject to such reasonable regulations as it
may prescribe and subject to the provisions of Section 4.5(b), the Partnership
will provide for the registration and transfer of Limited Partner Interests. The
Transfer Agent is hereby appointed registrar and transfer agent for the purpose
of registering Common Units and transfers of such Common Units as herein
provided. The Partnership shall not recognize transfers of Certificates
evidencing Limited Partner Interests unless such transfers are effected in the
manner described in this Section 4.5. Upon surrender of a Certificate for
registration of transfer of any Limited Partner Interests evidenced by a
Certificate, and subject to the provisions of Section 4.5(b), the appropriate
officers of the General Partner on behalf of the Partnership shall execute and
deliver, and in the case of Common Units, the Transfer Agent shall countersign
and deliver, in the name of the holder or the designated transferee or
transferees, as required pursuant to the holder's instructions, one or more new
Certificates evidencing the same aggregate number and type of Limited Partner
Interests as was evidenced by the Certificate so surrendered.

            (b) Except as otherwise provided in Section 4.9, the Partnership
shall not recognize any transfer of Limited Partner Interests until the
Certificates evidencing such Limited Partner Interests are surrendered for
registration of transfer and such Certificates are accompanied by a Transfer
Application duly executed by the transferee (or the transferee's
attorney-in-fact duly authorized in writing). No charge shall be imposed by the
Partnership for such transfer; provided, that as a condition to the issuance of
any new Certificate under this Section 4.5, the Partnership may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed with respect thereto.

            (c) Limited Partner Interests may be transferred only in the manner
described in this Section 4.5. The transfer of any Limited Partner Interests and
the admission of any new Limited Partner shall not constitute an amendment to
this Agreement.

            (d) Until admitted as a Substituted Limited Partner pursuant to
Section 10.2, the Record Holder of a Limited Partner Interest shall be an
Assignee in respect of such Limited Partner Interest. Limited Partners may
include custodians, nominees or any other individual or entity in its own or any
representative capacity.

            (e) A transferee of a Limited Partner Interest who has completed and
delivered a Transfer Application shall be deemed to have (i) requested admission
as a Substituted Limited Partner, (ii) agreed to comply with and be bound by and
to have executed this Agreement, (iii) represented and warranted that such
transferee has the right, power and authority and, if an individual, the
capacity to enter into this Agreement, (iv) granted the powers of attorney set
forth in this Agreement and (v) given the consents and approvals and made the
waivers contained in this Agreement.


                                      -27-
<PAGE>

            (f) The General Partner and its Affiliates shall have the right at
any time to transfer their Subordinated Units and Common Units (whether issued
upon conversion of the Subordinated Units or otherwise) to one or more Persons.

Section 4.6. Transfer of the General Partner's General Partner Interest.

            (a) Subject to Section 4.6(c) below, prior to March 31, 2011, the
General Partner shall not transfer all or any part of its General Partner
Interest to a Person unless such transfer (i) has been approved by the prior
written consent or vote of the holders of at least a majority of the Outstanding
Common Units (excluding Common Units held by the General Partner and its
Affiliates) or (ii) is of all, but not less than all, of its General Partner
Interest to (A) an Affiliate of the General Partner or (B) another Person in
connection with the merger or consolidation of the General Partner with or into
another Person or the transfer by the General Partner of all or substantially
all of its assets to another Person.

            (b) Subject to Section 4.6(c) below, on or after March 31, 2011, the
General Partner may transfer all or any of its General Partner Interest without
Unitholder approval.

            (c) Notwithstanding anything herein to the contrary, no transfer by
the General Partner of all or any part of its General Partner Interest to
another Person shall be permitted unless (i) the transferee agrees to assume the
rights and duties of the General Partner under this Agreement and the Operating
Partnership Agreement and to be bound by the provisions of this Agreement and
the Operating Partnership Agreement, (ii) the Partnership receives an Opinion of
Counsel that such transfer would not result in the loss of limited liability of
any Limited Partner or of any limited partner of the Operating Partnership or
cause the Partnership or the Operating Partnership to be treated as an
association taxable as a corporation or otherwise to be taxed as an entity for
federal income tax purposes (to the extent not already so treated or taxed) and
(iii) such transferee also agrees to purchase all (or the appropriate portion
thereof, if applicable) of the partnership or membership interest of the General
Partner as the general partner or managing member of each other Group Member. In
the case of a transfer pursuant to and in compliance with this Section 4.6, the
transferee or successor (as the case may be) shall, subject to compliance with
the terms of Section 10.3, be admitted to the Partnership as a General Partner
immediately prior to the transfer of the Partnership Interest, and the business
of the Partnership shall continue without dissolution.

Section 4.7. Transfer of Incentive Distribution Rights.

        Prior to March 31, 2011, a holder of Incentive Distribution Rights may
transfer any or all of the Incentive Distribution Rights held by such holder
without any consent of the Unitholders (a) to an Affiliate or (b) to another
Person in connection with (i) the merger or consolidation of such holder of
Incentive Distribution Rights with or into such other Person or (ii) the
transfer by such holder of all or substantially all of its assets to such other
Person. Any other transfer of the Incentive Distribution Rights prior to March
31, 2011, shall require the prior approval of holders at least a majority of the
Outstanding Common Units (excluding Common Units held by the General Partner and
its Affiliates). On or after March 31, 2011, the General Partner or any other
holder of Incentive Distribution Rights may transfer any or all of its Incentive
Distribution Rights without Unitholder approval. Notwithstanding anything herein
to the contrary, no



                                      -28-
<PAGE>

transfer of Incentive Distribution Rights to another Person shall be permitted
unless the transferee agrees to be bound by the provisions of this Agreement.
The General Partner shall have the authority (but shall not be required) to
adopt such reasonable restrictions on the transfer of Incentive Distribution
Rights and requirements for registering the transfer of Incentive Distribution
Rights as the General Partner, in its sole discretion, shall determine are
necessary or appropriate.

Section 4.8. Restrictions on Transfers.

            (a) Except as provided in Section 4.8(d) below, but notwithstanding
the other provisions of this Article IV, no transfer of any Partnership
Interests shall be made if such transfer would (i) violate the then applicable
federal or state securities laws or rules and regulations of the Commission, any
state securities commission or any other governmental authority with
jurisdiction over such transfer, (ii) terminate the existence or qualification
of the Partnership or Operating Partnership under the laws of the jurisdiction
of its formation, or (iii) cause the Partnership or Operating Partnership to be
treated as an association taxable as a corporation or otherwise to be taxed as
an entity for federal income tax purposes (to the extent not already so treated
or taxed).

            (b) The General Partner may impose restrictions on the transfer of
Partnership Interests if a subsequent Opinion of Counsel determines that such
restrictions are necessary to avoid a significant risk of the Partnership or
Operating Partnership becoming taxable as a corporation or otherwise to be taxed
as an entity for federal income tax purposes. The restrictions may be imposed by
making such amendments to this Agreement as the General Partner may determine to
be necessary or appropriate to impose such restrictions; provided, however, that
any amendment that the General Partner believes, in the exercise of its
reasonable discretion, could result in the delisting or suspension of trading of
any class of Limited Partner Interests on the principal National Securities
Exchange on which such class of Limited Partner Interests is then traded must be
approved, prior to such amendment being effected, by the holders of at least a
majority of the Outstanding Limited Partner Interests of such class.

            (c) The transfer of a Subordinated Unit that has converted into a
Common Unit shall be subject to the restrictions imposed by Section 6.7(b).

            (d) Nothing contained in this Article IV, or elsewhere in this
Agreement, shall preclude the settlement of any transactions involving
Partnership Interests entered into through the facilities of any National
Securities Exchange on which such Partnership Interests are listed for trading.

Section 4.9. Citizenship Certificates; Non-citizen Assignees.

            (a) If any Group Member is or becomes subject to any federal, state
or local law or regulation that, in the reasonable determination of the General
Partner, creates a substantial risk of cancellation or forfeiture of any
property in which the Group Member has an interest based on the nationality,
citizenship or other related status of a Limited Partner or Assignee, the
General Partner may request any Limited Partner or Assignee to furnish to the
General Partner, within 30 days after receipt of such request, an executed
Citizenship


                                      -29-
<PAGE>

Certification or such other information concerning his nationality, citizenship
or other related status (or, if the Limited Partner or Assignee is a nominee
holding for the account of another Person, the nationality, citizenship or other
related status of such Person) as the General Partner may request. If a Limited
Partner or Assignee fails to furnish to the General Partner within the
aforementioned 30-day period such Citizenship Certification or other requested
information or if upon receipt of such Citizenship Certification or other
requested information the General Partner determines, with the advice of
counsel, that a Limited Partner or Assignee is not an Eligible Citizen, the
Partnership Interests owned by such Limited Partner or Assignee shall be subject
to redemption in accordance with the provisions of Section 4.10. In addition,
the General Partner may require that the status of any such Partner or Assignee
be changed to that of a Non-citizen Assignee and, thereupon, the General Partner
shall be substituted for such Non-citizen Assignee as the Limited Partner in
respect of his Limited Partner Interests.

            (b) The General Partner shall, in exercising voting rights in
respect of Limited Partner Interests held by it on behalf of Non-citizen
Assignees, distribute the votes in the same ratios as the votes of Partners
(including without limitation the General Partner) in respect of Limited Partner
Interests other than those of Non-citizen Assignees are cast, either for,
against or abstaining as to the matter.

            (c) Upon dissolution of the Partnership, a Non-citizen Assignee
shall have no right to receive a distribution in kind pursuant to Section 12.4
but shall be entitled to the cash equivalent thereof, and the Partnership shall
provide cash in exchange for an assignment of the Non-citizen Assignee's share
of the distribution in kind. Such payment and assignment shall be treated for
Partnership purposes as a purchase by the Partnership from the Non-citizen
Assignee of his Limited Partner Interest (representing his right to receive his
share of such distribution in kind).

            (d) At any time after he can and does certify that he has become an
Eligible Citizen, a Non-citizen Assignee may, upon application to the General
Partner, request admission as a Substituted Limited Partner with respect to any
Limited Partner Interests of such Non-citizen Assignee not redeemed pursuant to
Section 4.10, and upon his admission pursuant to Section 10.2, the General
Partner shall cease to be deemed to be the Limited Partner in respect of the
Non-citizen Assignee's Limited Partner Interests.

Section 4.10. Redemption of Partnership Interests of Non-citizen Assignees.

            (a) If at any time a Limited Partner or Assignee fails to furnish a
Citizenship Certification or other information requested within the 30-day
period specified in Section 4.9(a), or if upon receipt of such Citizenship
Certification or other information the General Partner determines, with the
advice of counsel, that a Limited Partner or Assignee is not an Eligible
Citizen, the Partnership may, unless the Limited Partner or Assignee establishes
to the satisfaction of the General Partner that such Limited Partner or Assignee
is an Eligible Citizen or has transferred his Partnership Interests to a Person
who is an Eligible Citizen and who furnishes a Citizenship Certification to the
General Partner prior to the date fixed for redemption as provided below, redeem
the Partnership Interest of such Limited Partner or Assignee as follows:


                                      -30-
<PAGE>

            (i) The General Partner shall, not later than the 30th day before
        the date fixed for redemption, give notice of redemption to the Limited
        Partner or Assignee, at his last address designated on the records of
        the Partnership or the Transfer Agent, by registered or certified mail,
        postage prepaid. The notice shall be deemed to have been given when so
        mailed. The notice shall specify the Redeemable Interests, the date
        fixed for redemption, the place of payment, that payment of the
        redemption price will be made upon surrender of the Certificate
        evidencing the Redeemable Interests and that on and after the date fixed
        for redemption no further allocations or distributions to which the
        Limited Partner or Assignee would otherwise be entitled in respect of
        the Redeemable Interests will accrue or be made.

            (ii) The aggregate redemption price for Redeemable Interests shall
        be an amount equal to the Current Market Price (the date of
        determination of which shall be the date fixed for redemption) of
        Limited Partner Interests of the class to be so redeemed multiplied by
        the number of Limited Partner Interests of each such class included
        among the Redeemable Interests. The redemption price shall be paid, in
        the discretion of the General Partner, in cash or by delivery of a
        promissory note of the Partnership in the principal amount of the
        redemption price, bearing interest at the rate of 10% annually and
        payable in three equal annual installments of principal together with
        accrued interest, commencing one year after the redemption date.

            (iii) Upon surrender by or on behalf of the Limited Partner or
        Assignee, at the place specified in the notice of redemption, of the
        Certificate evidencing the Redeemable Interests, duly endorsed in blank
        or accompanied by an assignment duly executed in blank, the Limited
        Partner or Assignee or his duly authorized representative shall be
        entitled to receive the payment therefor.

            (iv) After the redemption date, Redeemable Interests shall no longer
        constitute issued and Outstanding Limited Partner Interests.

            (b) The provisions of this Section 4.10 shall also be applicable to
Limited Partner Interests held by a Limited Partner or Assignee as nominee of a
Person determined to be other than an Eligible Citizen.

            (c) Nothing in this Section 4.10 shall prevent the recipient of a
notice of redemption from transferring his Limited Partner Interest before the
redemption date if such transfer is otherwise permitted under this Agreement.
Upon receipt of notice of such a transfer, the General Partner shall withdraw
the notice of redemption, provided the transferee of such Limited Partner
Interest certifies to the satisfaction of the General Partner in a Citizenship
Certification delivered in connection with the Transfer Application that he is
an Eligible Citizen. If the transferee fails to make such certification, such
redemption shall be effected from the transferee on the original redemption
date.


                                      -31-
<PAGE>


                                   ARTICLE V.
           CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

Section 5.1. Organizational Contributions.

        In connection with the formation of the Partnership under the Delaware
Act, the General Partner made an initial Capital Contribution to the Partnership
in the amount of $10.00 for an interest in the Partnership and has been admitted
as the General Partner of the Partnership, and the Organizational Limited
Partner made an initial Capital Contribution to the Partnership in the amount of
$990.00 for an interest in the Partnership and has been admitted as a Limited
Partner of the Partnership. As of the Closing Date, the interest of the
Organizational Limited Partner shall be redeemed as provided in the Contribution
and Conveyance Agreement; the initial Capital Contributions of each Partner
shall thereupon be refunded; and the Organizational Limited Partner shall cease
to be a Limited Partner of the Partnership. Ninety-nine percent of any interest
or other profit that may have resulted from the investment or other use of such
initial Capital Contributions shall be allocated and distributed to the
Organizational Limited Partner, and the balance thereof shall be allocated and
distributed to the General Partner.

Section 5.2. Contributions by the General Partner and its Affiliates.

            (a) On the Closing Date and pursuant to the Contribution and
Conveyance Agreement, (i) the General Partner shall contribute to the
Partnership, as a Capital Contribution, all of its interest in Williams Ammonia
Pipeline, L.P., a Delaware limited partnership, and all of its interest in
Williams Terminals Holdings, L.P., a Delaware limited partnership, in exchange
for (A) the continuation of its General Partner Interest, subject to all of the
rights, privileges and duties of the General Partner under this Agreement, and
(B) the Incentive Distribution Rights, (ii) Williams Natural Gas Liquids, Inc.,
will contribute to the Partnership, as a Capital Contribution, all of its
limited partner interest in the Operating Partnership in exchange for 322,501
Common Units and 1,090,501 Subordinated Units and (iii) Williams Energy
Services, LLC will contribute to the Partnership, as a Capital Contribution, all
of its limited partner interest in the Operating Partnership in exchange for
1,357,193 Common Units and 4,589,193 Subordinated Units.

            (b) Upon the issuance of any additional Limited Partner Interests by
the Partnership (other than the issuance of the Common Units issued in the
Initial Offering or pursuant to the Over-Allotment Option), the General Partner
shall be required to make additional Capital Contributions equal to 1/99th of
any amount contributed to the Partnership by the Limited Partners in exchange
for such additional Limited Partner Interests. Except as set forth in the
immediately preceding sentence and Article XII, the General Partner shall not be
obligated to make any additional Capital Contributions to the Partnership.

Section 5.3. Contributions by Initial Limited Partners and Reimbursement of the
General Partner.

            (a) On the Closing Date and pursuant to the Underwriting Agreement,
each Underwriter shall contribute to the Partnership cash in an amount equal to
the Issue Price per Initial Common Unit multiplied by the number of Common Units
specified in the Underwriting


                                      -32-
<PAGE>


Agreement to be purchased by such Underwriter at the Closing Date. In exchange
for such Capital Contributions by the Underwriters, the Partnership shall issue
Common Units to each Underwriter on whose behalf such Capital Contribution is
made in an amount equal to the quotient obtained by dividing (i) the cash
contribution to the Partnership by or on behalf of such Underwriter by (ii) the
Issue Price per Initial Common Unit.

            (b) Upon the exercise of the Over-Allotment Option, each Underwriter
shall contribute to the Partnership cash in an amount equal to the Issue Price
per Initial Common Unit, multiplied by the number of Common Units specified in
the Underwriting Agreement to be purchased by such Underwriter at the Option
Closing Date. In exchange for such Capital Contributions by the Underwriters,
the Partnership shall issue Common Units to each Underwriter on whose behalf
such Capital Contribution is made in an amount equal to the quotient obtained by
dividing (i) the cash contributions to the Partnership by or on behalf of such
Underwriter by (ii) the Issue Price per Initial Common Unit. Upon receipt by the
Partnership of the Capital Contributions from the Underwriters as provided in
this Section 5.3(b), the Partnership shall use such cash to redeem from Williams
Energy Services, LLC that number of Common Units held by Williams Energy
Services, LLC equal to the number of Common Units issued to the Underwriters as
provided in this Section 5.3(b).

            (c) No Limited Partner Interests will be issued or issuable as of or
at the Closing Date other than (i) the Common Units issuable pursuant to
subparagraph (a) hereof in aggregate number equal to 4,000,000 Units, (ii) the
"Option Units" as such term is used in the Underwriting Agreement issuable upon
exercise of the Over-Allotment Option pursuant to subparagraph (b) hereof in an
aggregate number of up to 600,000 Units, (iii) the 5,679,694 Subordinated Units
issuable to the General Partner or its Affiliates pursuant to Section 5.2
hereof, and (iv) the Incentive Distribution Rights.

Section 5.4. Interest and Withdrawal.

        No interest on Capital Contributions shall be paid by the Partnership.
No Partner or Assignee shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent, if any, that distributions made
pursuant to this Agreement or upon termination of the Partnership may be
considered as such by law and then only to the extent provided for in this
Agreement. Except to the extent expressly provided in this Agreement, no Partner
or Assignee shall have priority over any other Partner or Assignee either as to
the return of Capital Contributions or as to profits, losses or distributions.
Any such return shall be a compromise to which all Partners and Assignees agree
within the meaning of 17-502(b) of the Delaware Act.

Section 5.5. Capital Accounts.

            (a) The Partnership shall maintain for each Partner (or a beneficial
owner of Partnership Interests held by a nominee in any case in which the
nominee has furnished the identity of such owner to the Partnership in
accordance with Section 6031(c) of the Code or any other method acceptable to
the General Partner in its sole discretion) owning a Partnership Interest a
separate Capital Account with respect to such Partnership Interest in accordance
with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital
Account shall be increased by (i) the amount of all Capital Contributions made
to the Partnership with respect to


                                      -33-
<PAGE>

such Partnership Interest pursuant to this Agreement and (ii) all items of
Partnership income and gain (including, without limitation, income and gain
exempt from tax) computed in accordance with Section 5.5(b) and allocated with
respect to such Partnership Interest pursuant to Section 6.1, and decreased by
(x) the amount of cash or Net Agreed Value of all actual and deemed
distributions of cash or property made with respect to such Partnership Interest
pursuant to this Agreement and (y) all items of Partnership deduction and loss
computed in accordance with Section 5.5(b) and allocated with respect to such
Partnership Interest pursuant to Section 6.1.

            (b) For purposes of computing the amount of any item of income,
gain, loss or deduction which is to be allocated pursuant to Article VI and is
to be reflected in the Partners' Capital Accounts, the determination,
recognition and classification of any such item shall be the same as its
determination, recognition and classification for federal income tax purposes
(including, without limitation, any method of depreciation, cost recovery or
amortization used for that purpose), provided, that:

            (i) Solely for purposes of this Section 5.5, the Partnership shall
        be treated as owning directly its proportionate share (as determined by
        the General Partner based upon the provisions of the Operating
        Partnership Agreement) of all property owned by the Operating
        Partnership or any other Subsidiary that is classified as a partnership
        for federal income tax purposes.

            (ii) All fees and other expenses incurred by the Partnership to
        promote the sale of (or to sell) a Partnership Interest that can neither
        be deducted nor amortized under Section 709 of the Code, if any, shall,
        for purposes of Capital Account maintenance, be treated as an item of
        deduction at the time such fees and other expenses are incurred and
        shall be allocated among the Partners pursuant to Section 6.1.

            (iii) Except as otherwise provided in Treasury Regulation Section
        1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss
        and deduction shall be made without regard to any election under Section
        754 of the Code which may be made by the Partnership and, as to those
        items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code,
        without regard to the fact that such items are not includable in gross
        income or are neither currently deductible nor capitalized for federal
        income tax purposes. To the extent an adjustment to the adjusted tax
        basis of any Partnership asset pursuant to Section 734(b) or 743(b) of
        the Code is required, pursuant to Treasury Regulation Section
        1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital
        Accounts, the amount of such adjustment in the Capital Accounts shall be
        treated as an item of gain or loss.

            (iv) Any income, gain or loss attributable to the taxable
        disposition of any Partnership property shall be determined as if the
        adjusted basis of such property as of such date of disposition were
        equal in amount to the Partnership's Carrying Value with respect to such
        property as of such date.

            (v) In accordance with the requirements of Section 704(b) of the
        Code, any deductions for depreciation, cost recovery or amortization
        attributable to any Contributed


                                      -34-
<PAGE>

        Property shall be determined as if the adjusted basis of such property
        on the date it was acquired by the Partnership were equal to the Agreed
        Value of such property. Upon an adjustment pursuant to Section 5.5(d) to
        the Carrying Value of any Partnership property subject to depreciation,
        cost recovery or amortization, any further deductions for such
        depreciation, cost recovery or amortization attributable to such
        property shall be determined (A) as if the adjusted basis of such
        property were equal to the Carrying Value of such property immediately
        following such adjustment and (B) using a rate of depreciation, cost
        recovery or amortization derived from the same. method and useful life
        (or, if applicable, the remaining useful life) as is applied for federal
        income tax purposes; provided, however, that, if the asset has a zero
        adjusted basis for federal income tax purposes, depreciation, cost
        recovery or amortization deductions shall be determined using any
        reasonable method that the General Partner may adopt.

            (vi) If the Partnership's adjusted basis in a depreciable or cost
        recovery property is reduced for federal income tax purposes pursuant to
        Section 48(q)(1) or 48(q)(3) of the Code, the amount of such reduction
        shall, solely for purposes hereof, be deemed to be an additional
        depreciation or cost recovery deduction in the year such property is
        placed in service and shall be allocated among the Partners pursuant to
        Section 6.1. Any restoration of such basis pursuant to Section 48(q)(2)
        of the Code shall, to the extent possible, be allocated in the same
        manner to the Partners to whom such deemed deduction was allocated.

            (c) (i) A transferee of a Partnership Interest shall succeed to a
pro rata portion of the Capital Account of the transferor relating to the
Partnership Interest so transferred.

            (ii) Immediately prior to the transfer of a Subordinated Unit or of
        a Subordinated Unit that has converted into a Common Unit pursuant to
        Section 5.8 by a holder thereof (other than a transfer to an Affiliate
        unless, the General Partner elects to have this subparagraph 5.5(c)(ii)
        apply), the Capital Account maintained for such Person with respect to
        its Subordinated Units or converted Subordinated Units will (A) first,
        be allocated to the Subordinated Units or converted Subordinated Units
        to be transferred in an amount equal to the product of (x) the number of
        such Subordinated Units or converted Subordinated Units to be
        transferred and (y) the Per Unit Capital Amount for a Common Unit, and
        (B) second, any remaining balance in such Capital Account will be
        retained by the transferor, regardless of whether it has retained any
        Subordinated Units or converted Subordinated Units. Following any such
        allocation, the transferor's Capital Account, if any, maintained with
        respect to the retained Subordinated Units or converted Subordinated
        Units, if any, will have a balance equal to the amount allocated under
        clause (B) above, and the transferee's Capital Account established with
        respect to the transferred Subordinated Units or converted Subordinated
        Units will have a balance equal to the amount allocated under clause (A)
        above.

            (d) (i) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership Interests for
cash or Contributed Property or the conversion of the General Partner's Combined
Interest to Common Units pursuant to Section 11.3(b), the Capital Account of all
Partners and the Carrying Value of each Partnership property immediately prior
to such issuance shall be adjusted upward or downward to reflect any


                                      -35-
<PAGE>

Unrealized Gain or Unrealized Loss attributable to such Partnership property, as
if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale
of each such property immediately prior to such issuance and had been allocated
to the Partners at such time pursuant to Section 6.1(c) in the same manner as
any item of gain or loss actually recognized during such period would have been
allocated. In determining such Unrealized Gain or Unrealized Loss, the aggregate
cash amount and fair market value of all Partnership assets (including, without
limitation, cash or cash equivalents) immediately prior to the issuance of
additional Partnership Interests shall be determined by the General Partner
using such reasonable method of valuation as it may adopt; provided, however,
that the General Partner, in arriving at such valuation, must take fully into
account the fair market value of the Partnership Interests of all Partners at
such time. The General Partner shall allocate such aggregate value among the
assets of the Partnership (in such manner as it determines in its discretion to
be reasonable) to arrive at a fair market value for individual properties.

            (ii) In accordance with Treasury Regulation Section
        1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed
        distribution to a Partner of any Partnership property (other than a
        distribution of cash that is not in redemption or retirement of a
        Partnership Interest), the Capital Accounts of all Partners and the
        Carrying Value of all Partnership property shall be adjusted upward or
        downward to reflect any Unrealized Gain or Unrealized Loss attributable
        to such Partnership property, as if such Unrealized Gain or Unrealized
        Loss had been recognized in a sale of such property immediately prior to
        such distribution for an amount equal to its fair market value, and had
        been allocated to the Partners, at such time, pursuant to Section 6.1(c)
        in the same manner as any item of gain or loss actually recognized
        during such period would have been allocated. In determining such
        Unrealized Gain or Unrealized Loss the aggregate cash amount and fair
        market value of all Partnership assets (including, without limitation,
        cash or cash equivalents) immediately prior to a distribution shall (A)
        in the case of an actual distribution which is not made pursuant to
        Section 12.4 or in the case of a deemed contribution and/or
        distribution, be determined and allocated in the same manner as that
        provided in Section 5.5(d)(i) or (B) in the case of a liquidating
        distribution pursuant to Section 12.4, be determined and allocated by
        the Liquidator using such reasonable method of valuation as it may
        adopt.

Section 5.6. Issuances of Additional Partnership Securities.

            (a) Subject to Section 5.7, the Partnership may issue additional
Partnership Securities and options, rights, warrants and appreciation rights
relating to the Partnership Securities for any Partnership purpose at any time
and from time to time to such Persons for such consideration and on such terms
and conditions as shall be established by the General Partner in its sole
discretion, all without the approval of any Limited Partners.

            (b) Each additional Partnership Security authorized to be issued by
the Partnership pursuant to Section 5.6(a) may be issued in one or more classes,
or one or more series of any such classes, with such designations, preferences,
rights, powers and duties (which may be senior to existing classes and series of
Partnership Securities), as shall be fixed by the General Partner in the
exercise of its sole discretion, including (i) the right to share Partnership
profits and losses or items thereof; (ii) the right to share in Partnership
distributions; (iii) the


                                      -36-
<PAGE>


rights upon dissolution and liquidation of the Partnership; (iv) whether, and
the terms and conditions upon which, the Partnership may redeem the Partnership
Security; (v) whether such Partnership Security is issued with the privilege of
conversion or exchange and, if so, the terms and conditions of such conversion
or exchange; (vi) the terms and conditions upon which each Partnership Security
will be issued, evidenced by certificates and assigned or transferred; and (vii)
the right, if any, of each such Partnership Security to vote on Partnership
matters, including matters relating to the relative designations, preferences,
rights, powers and duties of such Partnership Security.

            (c) The General Partner is hereby authorized and directed to take
all actions that it deems necessary or appropriate in connection with (i) each
issuance of Partnership Securities and options, rights, warrants and
appreciation rights relating to Partnership Securities pursuant to this Section
5.6, (ii) the conversion of the General Partner Interest and Incentive
Distribution Rights into Units pursuant to the terms of this Agreement, (iii)
the admission of Additional Limited Partners and (iv) all additional issuances
of Partnership Securities. The General Partner is further authorized and
directed to specify the relative rights, powers and duties of the holders of the
Units or other Partnership Securities being so issued. The General Partner shall
do all things necessary to comply with the Delaware Act and is authorized and
directed to do all things it deems to be necessary or advisable in connection
with any future issuance of Partnership Securities or in connection with the
conversion of the General Partner Interest and Incentive Distribution Rights
into Units pursuant to the terms of this Agreement, including compliance with
any statute, rule, regulation or guideline of any federal, state or other
governmental agency or any, National Securities Exchange on which the Units or
other Partnership Securities are listed for trading.

Section 5.7. Limitations on Issuance of Additional Partnership Securities.

        The issuance of Partnership Securities pursuant to Section 5.6 shall be
subject to the following restrictions and limitations:

            (a) During the Subordination Period, the Partnership shall not issue
(and shall not issue any options, rights, warrants or appreciation rights
relating to) an aggregate of more than 2,839,847 additional Parity Units without
the prior approval of the holders of a Unit Majority. In applying this
limitation, there shall be excluded Common Units and other Parity Units issued
(A) in connection with the exercise of the Over-Allotment Option pursuant to
Section 5.3(b), (B) in accordance with Section 5.7(b), (C) upon conversion of
Subordinated Units pursuant to Section 5.8, (D) upon conversion of the General
Partner Interest and Incentive Distribution Rights pursuant to Section 11.3(b),
(E) pursuant to the employee benefit plans of the General Partner, the
Partnership or any other Group Member and (F) in the event of a combination or
subdivision of Common Units.

            (b) The Partnership may also issue an unlimited number of Parity
Units, prior to the end of the Subordination Period and without the prior
approval of the Unitholders, if such issuance occurs (i) in connection with an
Acquisition or a Capital Improvement or (ii) within 365 days of, and the net
proceeds from such issuance are used to repay debt incurred in connection with,
an Acquisition or a Capital Improvement, in each case where such Acquisition or
Capital Improvement involves assets that, if acquired by the Partnership as of
the date that is one year


                                      -37-
<PAGE>

prior to the first day of the Quarter in which such Acquisition is to be
consummated or such Capital Improvement is to be completed, would have resulted,
on a pro forma basis, in an increase in:

               (A)    the amount of Adjusted Operating Surplus generated by the
                      Partnership on a per-Unit basis (for all Outstanding
                      Units) with respect to each of the four most recently
                      completed Quarters (on a pro forma basis as described
                      below) as compared to

               (B)    the actual amount of Adjusted Operating Surplus generated
                      by the Partnership on a per-Unit basis (for all
                      Outstanding Units) (excluding Adjusted Operating Surplus
                      attributable to the Acquisition or Capital Improvement)
                      with respect to each of such four most recently completed
                      Quarters.

        If the issuance of Parity Units with respect to an Acquisition or
Capital Improvement occurs within the first four full Quarters after the Closing
Date, then Adjusted Operating Surplus as used in clauses (A) (subject to the
succeeding sentence) and (B) above shall be calculated (i) for each Quarter, if
any, that commenced after the Closing Date for which actual results of
operations are available, based on the actual Adjusted Operating Surplus of the
Partnership generated with respect to such Quarter, and (ii) for each other
Quarter, on a pro forma basis consistent with the procedures, as applicable, set
forth in Appendix D to the Registration Statement. Furthermore, the amount in
clause (A) shall be determined on a pro forma basis assuming that (1) all of the
Parity Units to be issued in connection with or within 365 days of such
Acquisition or Capital Improvement had been issued and outstanding, (2) all
indebtedness for borrowed money to be incurred or assumed in connection with
such Acquisition or Capital Improvement (other than any such indebtedness that
is to be repaid with the proceeds of such issuance of Parity Units) had been
incurred or assumed, in each case as of the commencement of such four-Quarter
period, (3) the personnel expenses that would have been incurred by the
Partnership in the operation of the acquired assets are the personnel expenses
for employees to be retained by the Partnership in the operation of the acquired
assets, and (4) the non-personnel costs and expenses are computed on the same
basis as those incurred by the Partnership in the operation of the Partnership's
business at similarly situated Partnership facilities.

            (c) The Partnership may also issue an unlimited number of Parity
Units, prior to the end of the Subordination Period and without the approval of
the Unitholders, if the proceeds from such issuance are used exclusively to
repay up to $40.0 million of indebtedness of a Group Member where the aggregate
amount of distributions that would have been paid with respect to such newly
issued Units or Partnership Securities, plus the related distributions on the
General Partner Interest in the Partnership and the Operating Partnership in
respect of the four-Quarter period ending prior to the first day of the Quarter
in which the issuance is to be consummated (assuming such additional Units or
Partnership Securities had been Outstanding throughout such period and that
distributions equal to the distributions that were actually paid on the
Outstanding Units during the period were paid on such additional Units or
Partnership Securities) did not exceed the interest costs actually incurred
during such period on the indebtedness that is to be repaid (or, if such
indebtedness was not outstanding throughout the entire period, would have been
incurred had such indebtedness been outstanding for the entire


                                      -38-
<PAGE>


period). In the event that the Partnership is required to pay a prepayment
penalty in connection with the repayment of such indebtedness, for purposes of
the foregoing test the number of Parity Units issued to repay such indebtedness
shall be deemed increased by the number of Parity Units that would need to be
issued to pay such penalty.

            (d) During the Subordination Period, the Partnership shall not issue
(and shall not issue any options, rights, warrants or appreciation rights
relating to) additional Partnership Securities having rights to distributions or
in liquidation ranking prior or senior to the Common Units, without the prior
approval of the holders of a Unit Majority.

            (e) No fractional Units shall be issued by the Partnership.

Section 5.8. Conversion of Subordinated Units.

            (a) A total of 1,419,923 of the outstanding Subordinated Units will
convert into Common Units on a one-for-one basis on the first day after the
Record Date for distribution in respect of any Quarter ending on or after
December 31, 2003, in respect of which:

            (i) distributions under Section 6.4 in respect of all Outstanding
        Common Units and Subordinated Units with respect to each of the three
        consecutive, non-overlapping four-Quarter periods immediately preceding
        such date equaled or exceeded the sum of the Minimum Quarterly
        Distribution on all of the Outstanding Common Units and Subordinated
        Units during such periods;

            (ii) the Adjusted Operating Surplus generated during each of the
        three consecutive, non-overlapping four-Quarter periods immediately
        preceding such date equaled or exceeded the sum of the Minimum Quarterly
        Distribution on all of the Common Units and Subordinated Units that were
        Outstanding during such periods on a fully-diluted basis (i.e. taking
        into account for purposes of such determination all Outstanding Common
        Units, all Outstanding Subordinated Units, all Common Units and
        Subordinated Units issuable upon exercise of employee options that have,
        as of the date of determination, already vested or are scheduled to vest
        prior to the end of the Quarter immediately following the Quarter with
        respect to which such determination is made, and all Common Units and
        Subordinated Units that have, as of the date of determination, been
        earned by but not yet issued to management of the Partnership in respect
        of incentive compensation), plus the related distribution on the General
        Partner Interest in the Partnership and the Operating Partnerships,
        during such periods; and

            (iii) the Cumulative Common Unit Arrearage on all of the Common
        Units is zero.

            (b) An additional 1,419,923 of the Outstanding Subordinated Units
will convert into Common Units on a one-for-one basis on the first day after the
Record Date for distribution in respect of any Quarter ending on or after
December 31, 2004, in respect of which:

            (i) distributions under Section 6.4 in respect of all Outstanding
        Common Units and Subordinated Units with respect to each of the three
        consecutive, non-overlapping four-Quarter periods immediately preceding
        such date equaled or exceeded


                                      -39-
<PAGE>

        the sum of the Minimum Quarterly Distribution on all of the Outstanding
        Common Units and Subordinated Units during such periods;

            (ii) the Adjusted Operating Surplus generated during each of the
        three consecutive, non-overlapping four-Quarter periods immediately
        preceding such date equaled or exceeded the sum of the Minimum Quarterly
        Distribution on all of the Common Units and Subordinated Units that were
        Outstanding during such periods on a fully-diluted basis (i.e. taking
        into account for purposes of such determination all Outstanding Common
        Units, all Outstanding Subordinated Units, all Common Units and
        Subordinated Units issuable upon exercise of employee options that have,
        as of the date of determination, already vested or are scheduled to vest
        prior to the end of the Quarter immediately following the Quarter with
        respect to which such determination is made, and all Common Units and
        Subordinated Units that have, as of the date of determination, been
        earned by but not yet issued to management of the Partnership in respect
        of incentive compensation), plus the related distribution on the General
        Partner Interest in the Partnership and the Operating Partnerships,
        during such periods; and

            (iii) the Cumulative Common Unit Arrearage on all of the Common
        Units is zero;

provided, however, that the conversion of Subordinated Units pursuant to this
Section 5.8(b) may not occur until at least one year following the conversion of
Subordinated Units pursuant to Section 5.8(a).

            (c) In the event that less than all of the Outstanding Subordinated
Units shall convert into Common Units pursuant to Section 5.8(a) or 5.8(b) at a
time when there shall be more than one holder of Subordinated Units, then,
unless all of the holders of Subordinated Units shall agree to a different
allocation, the Subordinated Units that are to be converted into Common Units
shall be allocated among the holders of Subordinated Units pro rata based on the
number of Subordinated Units held by each such holder.

            (d) Any Subordinated Units that are not converted into Common Units
pursuant to Sections 5.8(a) and (b) shall convert into Common Units on a
one-for-one basis on the first day following the Record Date for distributions
in respect of the final Quarter of the Subordination Period.

            (e) Notwithstanding any other provision of this Agreement, all the
then Outstanding Subordinated Units will automatically convert into Common Units
on a one-for-one basis as set forth in, and pursuant to the terms of, Section
11.4.

            (f) A Subordinated Unit that has converted into a Common Unit shall
be subject to the provisions of Section 6.7(b).

Section 5.9. Limited Preemptive Right.

        Except as provided in this Section 5.9 and in Section 5.2, no Person
shall have any preemptive, preferential or other similar right with respect to
the issuance of any Partnership Security, whether unissued, held in the treasury
or hereafter created. The General Partner shall

                                      -40-
<PAGE>


have the right, which it may from time to time assign in whole or in part to any
of its Affiliates, to purchase Partnership Securities from the Partnership
whenever, and on the same terms that, the Partnership issues Partnership
Securities to Persons other than the General Partner and its Affiliates, to the
extent necessary to maintain the Percentage Interests of the General Partner and
its Affiliates equal to that which existed immediately prior to the issuance of
such Partnership Securities.

Section 5.10. Splits and Combination.

            (a) Subject to Sections 5.10(d), 6.6 and 6.9 (dealing with
adjustments of distribution levels), the Partnership may make a Pro Rata
distribution of Partnership Securities to all Record Holders or may effect a
subdivision or combination of Partnership Securities so long as, after any such
event, each Partner shall have the same Percentage Interest in the Partnership
as before such event, and any amounts calculated on a per Unit basis (including
any Common Unit Arrearage or Cumulative Common Unit Arrearage) or stated as a
number of Units (including the number of Subordinated Units that may convert
prior to the end of the Subordination Period and the number of additional Parity
Units that may be issued pursuant to Section 5.7 without a Unitholder vote) are
proportionately adjusted retroactive to the beginning of the Partnership.

            (b) Whenever such a distribution, subdivision or combination of
Partnership Securities is declared, the General Partner shall select a Record
Date as of which the distribution, subdivision or combination shall be effective
and shall send notice thereof at least 20 days prior to such Record Date to each
Record Holder as of a date not less than 10 days prior to the date of such
notice. The General Partner also may cause a firm of independent public
accountants selected by it to calculate the number of Partnership Securities to
be held by each Record Holder after giving effect to such distribution,
subdivision or combination. The General Partner shall be entitled to rely on any
certificate provided by such firm as conclusive evidence of the accuracy of such
calculation.

            (c) Promptly following any such distribution, subdivision or
combination, the Partnership may issue Certificates to the Record Holders of
Partnership Securities as of the applicable Record Date representing the new
number of Partnership Securities held by such Record Holders, or the General
Partner may adopt such other procedures as it may deem appropriate to reflect
such changes. If any such combination results in a smaller total number of
Partnership Securities Outstanding, the Partnership shall require, as a
condition to the delivery to a Record Holder of such new Certificate, the
surrender of any Certificate held by such Record Holder immediately prior to
such Record Date.

            (d) The Partnership shall not issue fractional Units upon any
distribution, subdivision or combination of Units. If a distribution,
subdivision or combination of Units would result in the issuance of fractional
Units but for the provisions of Section 5.7(e) and this Section 5.10(d), each
fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall
be rounded to the next higher Unit).


                                      -41-
<PAGE>

Section 5.11. Fully Paid and Non-Assessable Nature of Limited Partner Interests.

        All Limited Partner Interests issued pursuant to, and in accordance with
the requirements of, this Article V shall be fully paid and non-assessable
Limited Partner Interests in the Partnership, except as such non assessability
may be affected by Section 17-607 of the Delaware Act.

                                   ARTICLE VI.
                          ALLOCATIONS AND DISTRIBUTIONS

Section 6.1. Allocations for Capital Account Purposes.

        For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Section 5.5(b)) shall be
allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.

            (a) Net Income. After giving effect to the special allocations set
forth in Section 6.1(d), Net Income for each taxable year and all items of
income, gain, loss and deduction taken into account in computing Net Income for
such taxable year shall be allocated as follows:

            (i) First, 100% to the General Partner in an amount equal to the
        aggregate Net Losses allocated to the General Partner pursuant to
        Section 6.1(b)(iii) for all previous taxable years until the aggregate
        Net Income allocated to the General Partner pursuant to this Section
        6.1(a)(i) for the current taxable year and all previous taxable years is
        equal to the aggregate Net Losses allocated to the General Partner
        pursuant to Section 6.1(b)(iii) for all previous taxable years;

            (ii) Second, 1% to the General Partner in an amount equal to the
        aggregate Net Losses allocated to the General Partner pursuant to
        Section 6.1(b)(ii) for all previous taxable years and 99% to the
        Unitholders, in accordance with their respective Percentage Interests,
        until the aggregate Net Income allocated to such Partners pursuant to
        this Section 6.1(a)(ii) for the current taxable year and all previous
        taxable years is equal to the aggregate Net Losses allocated to such
        Partners pursuant to Section 6.1(b)(ii) for all previous taxable years;
        and

            (iii) Third, the balance, if any, 1% to the General Partner and 99%
        to the Unitholders, in accordance with their respective Percentage
        Interests.

            (b) Net Losses. After giving effect to the special allocations set
forth in Section 6.1(d), Net Losses for each taxable period and all items of
income, gain, loss and deduction taken into account in computing Net Losses for
such taxable period shall be allocated as follows:

            (i) First, 1% to the General Partner and 99% to the Unitholders, in
        accordance with their respective Percentage Interests, until the
        aggregate Net Losses allocated pursuant to this Section 6.1(b)(i) for
        the current taxable year and all previous taxable


                                      -42-
<PAGE>


        years is equal to the aggregate Net Income allocated to such Partners
        pursuant to Section 6.1(a)(iii) for all previous taxable years, provided
        that the Net Losses shall not be allocated pursuant to this Section 6. 1
        (b)(i) to the extent that such allocation would cause any Unitholder to
        have a deficit balance in its Adjusted Capital Account at the end of
        such taxable year (or increase any existing deficit balance in its
        Adjusted Capital Account);

            (ii) Second, 1% to the General Partner and 99% to the Unitholders in
        accordance with their respective Percentage Interests; provided, that
        Net Losses shall not be allocated pursuant to this Section 6.1(b)(ii) to
        the extent that such allocation would cause any Unitholder to have a
        deficit balance in its Adjusted Capital Account at the end of such
        taxable year (or increase any existing deficit balance in its Adjusted
        Capital Account);

            (iii) Third, the balance, if any, 100% to the General Partner.

            (c) Net Termination Gains and Losses. After giving effect to the
special allocations set forth in Section 6.1(d), all items of income, gain, loss
and deduction taken into account in computing Net Termination Gain or Net
Termination Loss for such taxable period shall be allocated in the same manner
as such Net Termination Gain or Net Termination Loss is allocated hereunder. All
allocations under this Section 6.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided under this Section
6.1 and after all distributions of Available Cash provided under Sections 6.4
and 6.5 have been made; provided, however, that solely for purposes of this
Section 6.1(c), Capital Accounts shall not be adjusted for distributions made
pursuant to Section 12.4.

            (i) If a Net Termination Gain is recognized (or deemed recognized
        pursuant to Section 5.5(d)), such Net Termination Gain shall be
        allocated among the Partners in the following manner (and the Capital
        Accounts of the Partners shall be increased by the amount so allocated
        in each of the following subclauses, in the order listed, before an
        allocation is made pursuant to the next succeeding subclause):

            (A) First, to each Partner having a deficit balance in its Capital
                Account, in the proportion that such deficit balance bears to
                the total deficit balances in the Capital Accounts of all
                Partners, until each such Partner has been allocated Net
                Termination Gain equal to any such deficit balance in its
                Capital Account;

            (B) Second, 99% to all Unitholders holding Common Units, Pro Rata,
                and 1% to the General Partner until the Capital Account in
                respect of each Common Unit then Outstanding is equal to the sum
                of (1) its Unrecovered Capital plus (2) the Minimum Quarterly
                Distribution for the Quarter during which the Liquidation Date
                occurs, reduced by any distribution pursuant to Section
                6.4(a)(i) or (b)(i) with respect to such Common Unit for such
                Quarter (the amount determined pursuant to this clause (2) is
                hereinafter defined as the "Unpaid MQD") plus (3) any then
                existing Cumulative Common Unit Arrearage;


                                      -43-
<PAGE>


            (C) Third, if such Net Termination Gain is recognized (or is deemed
                to be recognized) prior to the expiration of the Subordination
                Period, 99% to all Unitholders holding Subordinated Units, Pro
                Rata, and 1% to the General Partner until the Capital Account in
                respect of each Subordinated Unit then Outstanding equals the
                sum of (1) its Unrecovered Capital, determined for the taxable
                year (or portion thereof) to which this allocation of gain
                relates, plus (2) the Minimum Quarterly Distribution for the
                Quarter during which the Liquidation Date occurs, reduced by any
                distribution pursuant to Section 6.4(a)(iii) with respect to
                such Subordinated Unit for such Quarter;

            (D) Fourth, 99% to all Unitholders, Pro Rata, and 1% to the General
                Partner until the Capital Account in respect of each Common Unit
                then Outstanding is equal to the sum of (1) its Unrecovered
                Capital, plus (2) the Unpaid MQD, plus (3) any then existing
                Cumulative Common Unit Arrearage, plus (4) the excess of (aa)
                the First Target Distribution less the Minimum Quarterly
                Distribution for each Quarter of the Partnership's existence
                over (bb) the cumulative per Unit amount of any distributions of
                Operating Surplus that was distributed pursuant to Sections
                6.4(a)(iv) and 6.4(b)(ii) (the sum of (1) plus (2) plus (3) plus
                (4) is hereinafter defined as the "First Liquidation Target
                Amount");

            (E) Fifth, 85.8673% to all Unitholders, Pro Rata, 13.1327% to the
                holders of the Incentive Distribution Rights, Pro Rata, and 1%
                to the General Partner until the Capital Account in respect of
                each Common Unit then Outstanding is equal to the sum of (1) the
                First Liquidation Target Amount, plus (2) the excess of (aa) the
                Second Target Distribution less the First Target Distribution
                for each Quarter of the Partnership's existence over (bb) the
                cumulative per Unit amount of any distributions of Operating
                Surplus that was distributed pursuant to Sections 6.4(a)(v) and
                6.4(b)(iii) (the sum of (1) plus (2) is hereinafter defined as
                the "Second Liquidation Target Amount");

            (F) Sixth, 75.7653% to all Unitholders, Pro Rata, 23.2347% to the
                holders of the Incentive Distribution Rights, Pro Rata, and 1%
                to the General Partner until the Capital Account in respect of
                each Common Unit then Outstanding is equal to the sum of (1) the
                Second Liquidation Target Amount, plus (2) the excess of (aa)
                the Third Target Distribution less the Second Target
                Distribution for each Quarter of the Partnership's existence
                over (bb) the cumulative per Unit amount of any distributions of
                Operating Surplus that was distributed pursuant to Sections
                6.4(a)(vi) and 6.4(b)(iv) (the sum of (1) plus (2) is
                hereinafter defined as the "Third Liquidation Target Amount");

            (G) Finally, any remaining amount 50.5102% to all Unitholders, Pro
                Rata, 48.4898% to the holders of the Incentive Distribution
                Rights, Pro Rata, and 1% to the General Partner.


                                      -44-
<PAGE>


            (ii) If a Net Termination Loss is recognized (or deemed recognized
        pursuant to Section 5.5(d)), such Net Termination Loss shall be
        allocated among the Partners in the following manner:

            (A) First, if such Net Termination Loss is recognized (or is deemed
                to be recognized) prior to the conversion of the last
                Outstanding Subordinated Unit, 99% to the Unitholders holding
                Subordinated Units, Pro Rata, and 1% to the General Partner
                until the Capital Account in respect of each Subordinated Unit
                then Outstanding has been reduced to zero;

            (B) Second, 99% to all Unitholders holding Common Units, Pro Rata,
                and 1% to the General Partner until the Capital Account in
                respect of each Common Unit then Outstanding has been reduced to
                zero; and

            (C) Third, the balance, if any, 100% to the General Partner.

            (d) Special Allocations. Notwithstanding any other provision of this
Section 6.1, the following special allocations shall be made for such taxable
period:

            (i) Partnership Minimum Gain Chargeback. Notwithstanding any other
        provision of this Section 6.1, if there is a net decrease in Partnership
        Minimum Gain during any Partnership taxable period, each Partner shall
        be allocated items of Partnership income and gain for such period (and,
        if necessary, subsequent periods) in the manner and amounts provided in
        Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and
        1.704-20)(2)(i), or any successor provision. For purposes of this
        Section 6.1(d), each Partner's Adjusted Capital Account balance shall be
        determined, and the allocation of income or gain required hereunder
        shall be effected, prior to the application of any other allocations
        pursuant to this Section 6.1(d) with respect to such taxable period
        (other than an allocation pursuant to Sections 6.1(d)(vi) and
        6.1(d)(vii)). This Section 6.1(d)(i) is intended to comply with the
        Partnership Minimum Gain chargeback requirement in Treasury Regulation
        Section 1.704-2(f) and shall be interpreted consistently therewith.

            (ii) Chargeback of Partner Nonrecourse Debt Minimum Gain.
        Notwithstanding the other provisions of this Section 6.1 (other than
        Section 6.1(d)(i)), except as provided in Treasury Regulation Section
        1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt
        Minimum Gain during any Partnership taxable period, any Partner with a
        share of Partner Nonrecourse Debt Minimum Gain at the beginning of such
        taxable period shall be allocated items of Partnership income and gain
        for such period (and, if necessary, subsequent periods) in the manner
        and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
        1.704-20)(2)(ii), or any successor provisions. For purposes of this
        Section 6.1(d), each Partner's Adjusted Capital Account balance shall be
        determined, and the allocation of income or gain required hereunder
        shall be effected, prior to the application of any other allocations
        pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other
        than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii), with
        respect to such taxable period. This Section 6.1(d)(ii) is intended to
        comply with the chargeback of items of income and gain


                                      -45-
<PAGE>

        requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be
        interpreted consistently therewith.

            (iii) Priority Allocations.

            (A) If the amount of cash or the Net Agreed Value of any property
                distributed (except cash or property distributed pursuant to
                Section 12.4) to any Unitholder with respect to its Units for a
                taxable year is greater (on a per Unit basis) than the amount of
                cash or the Net Agreed Value of property distributed to the
                other Unitholders with respect to their Units (on a per Unit
                basis), then (1) each Unitholder receiving such greater cash or
                property distribution shall be allocated gross income in an
                amount equal to the product of (aa) the amount by which the
                distribution (on a per Unit basis) to such Unitholder exceeds
                the distribution (on a per Unit basis) to the Unitholders
                receiving the smallest distribution and (bb) the number of Units
                owned by the Unitholder receiving the greater distribution; and
                (2) the General Partner shall be allocated gross income in an
                aggregate amount equal to 1/99th of the sum of the amounts
                allocated in clause (1) above.

            (B) After the application of Section 6.1(d)(iii)(A), all or any
                portion of the remaining items of Partnership gross income or
                gain for the taxable period, if any, shall be allocated 100% to
                the holders of Incentive Distribution Rights, Pro Rata, until
                the aggregate amount of such items allocated to the holders of
                Incentive Distribution Rights pursuant to this paragraph
                6.1(d)(iii)(B) for the current taxable year and all previous
                taxable years is equal to the cumulative amount of all Incentive
                Distributions made to the holders of Incentive Distribution
                Rights from the Closing Date to a date 45 days after the end of
                the current taxable year.

            (iv) Qualified Income Offset. In the event any Partner unexpectedly
        receives any adjustments, allocations or distributions described in
        Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
        1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of
        Partnership income and gain shall be specially allocated to such Partner
        in an amount and manner sufficient to eliminate, to the extent required
        by the Treasury Regulations promulgated under Section 704(b) of the
        Code, the deficit balance, if any, in its Adjusted Capital Account
        created by such adjustments, allocations or distributions as quickly as
        possible unless such deficit balance is otherwise eliminated pursuant to
        Section 6.1(d)(i) or (ii).

            (v) Gross Income Allocations. In the event any Partner has a deficit
        balance in its Capital Account at the end of any Partnership taxable
        period in excess of the sum of (A) the amount such Partner is required
        to restore pursuant to the provisions of this Agreement and (B) the
        amount such Partner is deemed obligated to restore pursuant to Treasury
        Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner shall be
        specially allocated items of Partnership gross income and gain in the
        amount of such excess as quickly as possible; provided, that an
        allocation pursuant to this


                                      -46-
<PAGE>

        Section 6.1(d)(v) shall be made only if and to the extent that such
        Partner would have a deficit balance in its Capital Account as adjusted
        after all other allocations provided for in this Section 6.1 have been
        tentatively made as if this Section 6.1(d)(v) were not in this
        Agreement.

            (vi) Nonrecourse Deductions. Nonrecourse Deductions for any taxable
        period shall be allocated to the Partners in accordance with their
        respective Percentage Interests. If the General Partner determines in
        its good faith discretion that the Partnership's Nonrecourse Deductions
        must be allocated in a different ratio to satisfy the safe harbor
        requirements of the Treasury Regulations promulgated under Section
        704(b) of the Code, the General Partner is authorized, upon notice to
        the other Partners, to revise the prescribed ratio to the numerically
        closest ratio that does satisfy such requirements.

            (vii) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions
        for any taxable period shall be allocated 100% to the Partner that bears
        the Economic Risk of Loss with respect to the Partner Nonrecourse Debt
        to which such Partner Nonrecourse Deductions are attributable in
        accordance with Treasury Regulation Section 1.704-2(i). If more than one
        Partner bears the Economic Risk of Loss with respect to a Partner
        Nonrecourse Debt, such Partner Nonrecourse Deductions attributable
        thereto shall be allocated between or among such Partners in accordance
        with the ratios in which they share such Economic Risk of Loss.

            (viii) Nonrecourse Liabilities. For purposes of Treasury Regulation
        Section 1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities
        of the Partnership in excess of the sum of (A) the amount of Partnership
        Minimum Gain and (B) the total amount of Nonrecourse Built-in Gain shall
        be allocated among the Partners in accordance with their respective
        Percentage Interests.

            (ix) Code Section 754 Adjustments. To the extent an adjustment to
        the adjusted tax basis of any Partnership asset pursuant to Section
        734(b) or 743(c) of the Code is required, pursuant to Treasury
        Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in
        determining Capital Accounts, the amount of such adjustment to the
        Capital Accounts shall be treated as an item of gain (if the adjustment
        increases the basis of the asset) or loss (if the adjustment decreases
        such basis), and such item of gain or loss shall be specially allocated
        to the Partners in a manner consistent with the manner in which their
        Capital Accounts are required to be adjusted pursuant to such Section of
        the Treasury Regulations.

            (x) Economic Uniformity. At the election of the General Partner with
        respect to any taxable period ending upon, or after, the termination of
        the Subordination Period, all or a portion of the remaining items of
        Partnership gross income or gain for such taxable period, after taking
        into account allocations pursuant to Section 6.1(d)(iii), shall be
        allocated 100% to each Partner holding Subordinated Units that are
        Outstanding as of the termination of the Subordination Period ("Final
        Subordinated Units") in the proportion of the number of Final
        Subordinated Units held by such Partner to the total number of Final
        Subordinated Units then Outstanding, until each such Partner has been
        allocated an amount of gross income or gain which increases the Capital
        Account


                                      -47-
<PAGE>

        maintained with respect to such Final Subordinated Units to an amount
        equal to the product of (A) the number of Final Subordinated Units held
        by such Partner and (B) the Per Unit Capital Amount for a Common Unit.
        The purpose of this allocation is to establish uniformity between the
        Capital Accounts underlying Final Subordinated Units and the Capital
        Accounts underlying Common Units held by Persons other than the General
        Partner and its Affiliates immediately prior to the conversion of such
        Final Subordinated Units into Common Units. This allocation method for
        establishing such economic uniformity will only be available to the
        General Partner if the method for allocating the Capital Account
        maintained with respect to the Subordinated Units between the
        transferred and retained Subordinated Units pursuant to Section
        5.5(c)(ii) does not otherwise provide such economic uniformity to the
        Final Subordinated Units.

            (xi) Curative Allocation.

            (A) Notwithstanding any other provision of this Section 6.1, other
                than the Required Allocations, the Required Allocations shall be
                taken into account in making the Agreed Allocations so that, to
                the extent possible, the net amount of items of income, gain,
                loss and deduction allocated to each Partner pursuant to the
                Required Allocations and the Agreed Allocations, together, shall
                be equal to the net amount of such items that would have been
                allocated to each such Partner under the Agreed Allocations had
                the Required Allocations and the related Curative Allocation not
                otherwise been provided in this Section 6.1. Notwithstanding the
                preceding sentence, Required Allocations relating to (1)
                Nonrecourse Deductions shall not be taken into account except to
                the extent that there has been a decrease in Partnership Minimum
                Gain and (2) Partner Nonrecourse Deductions shall not be taken
                into account except to the extent that there has been a decrease
                in Partner Nonrecourse Debt Minimum Gain. Allocations pursuant
                to this Section 6.1(d)(xi)(A) shall only be made with respect to
                Required Allocations to the extent the General Partner
                reasonably determines that such allocations will otherwise be
                inconsistent with the economic agreement among the Partners.
                Further, allocations pursuant to this Section 6.1(d)(xi)(A)
                shall be deferred with respect to allocations pursuant to
                clauses (1) and (2) hereof to the extent the General Partner
                reasonably determines that such allocations are likely to be
                offset by subsequent Required Allocations.

            (B) The General Partner shall have reasonable discretion, with
                respect to each taxable period, to (1) apply the provisions of
                Section 6.1(d)(xi)(A) in whatever order is most likely to
                minimize the economic distortions that might otherwise result
                from the Required Allocations, and (2) divide all allocations
                pursuant to Section 6.1(d)(xi)(A) among the Partners in a manner
                that is likely to minimize such economic distortions.

            (xii) Corrective Allocations. In the event of any allocation of
        Additional Book Basis Derivative Items or any Book-Down Event or any
        recognition of a Net Termination Loss, the following rules shall apply:


                                      -48-
<PAGE>


            (A) In the case of any allocation of Additional Book Basis
                Derivative Items (other than an allocation of Unrealized Gain or
                Unrealized Loss under Section 5.5(d) hereof), the General
                Partner shall allocate additional items of gross income and gain
                away from the holders of Incentive Distribution Rights to the
                Unitholders and the General Partner, or additional items of
                deduction and loss away from the Unitholders and the General
                Partner to the holders of Incentive Distribution Rights, to the
                extent that the Additional Book Basis Derivative Items allocated
                to the Unitholders or the General Partner exceed their Share of
                Additional Book Basis Derivative Items. For this purpose, the
                Unitholders and the General Partner shall be treated as being
                allocated Additional Book Basis Derivative Items to the extent
                that such Additional Book Basis Derivative Items have reduced
                the amount of income that would otherwise have been allocated to
                the Unitholders or the General Partner under the Partnership
                Agreement (e.g., Additional Book Basis Derivative Items taken
                into account in computing cost of goods sold would reduce the
                amount of book income otherwise available for allocation among
                the Partners). Any allocation made pursuant to this Section
                6.1(d)(xii)(A) shall be made after all of the other Agreed
                Allocations have been made as if this Section 6.1(d)(xii) were
                not in this Agreement and, to the extent necessary, shall
                require the reallocation of items that have been allocated
                pursuant to such other Agreed Allocations.

            (B) In the case of any negative adjustments to the Capital Accounts
                of the Partners resulting from a Book-Down Event or from the
                recognition of a Net Termination Loss, such negative adjustment
                (1) shall first be allocated, to the extent of the Aggregate
                Remaining Net Positive Adjustments, in such a manner, as
                reasonably determined by the General Partner, that to the extent
                possible the aggregate Capital Accounts of the Partners will
                equal the amount which would have been the Capital Account
                balance of the Partners if no prior Book-Up Events had occurred,
                and (2) any negative adjustment in excess of the Aggregate
                Remaining Net Positive Adjustments shall be allocated pursuant
                to Section 6.1(c) hereof.

            (C) In making the allocations required under this Section
                6.1(d)(xii), the General Partner, in its sole discretion, may
                apply whatever conventions or other methodology it deems
                reasonable to satisfy the purpose of this Section 6.1(d)(xii).

Section 6.2. Allocations for Tax Purposes.

            (a) Except as otherwise provided herein, for federal income tax
purposes, each item of income, gain, loss and deduction shall be allocated among
the Partners in the same manner as its correlative item of "book" income, gain,
loss or deduction is allocated pursuant to Section 6.1.


                                      -49-
<PAGE>


            (b) In an attempt to eliminate Book-Tax Disparities attributable to
a Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be allocated for
federal income tax purposes among the Partners as follows:

            (i) (A) In the case of a Contributed Property, such items
        attributable thereto shall be allocated among the Partners in the manner
        provided under Section 704(c) of the Code that takes into account the
        variation between the Agreed Value of such property and its adjusted
        basis at the time of contribution; and (B) any item of Residual Gain or
        Residual Loss attributable to a Contributed Property shall be allocated
        among the Partners in the same manner as its correlative item of "book"
        gain or loss is allocated pursuant to Section 6.1.

            (ii) (A) In the case of an Adjusted Property, such items shall (1)
        first, be allocated among the Partners in a manner consistent with the
        principles of Section 704(c) of the Code to take into account the
        Unrealized Gain or Unrealized Loss attributable to such property and the
        allocations thereof pursuant to Section 5.5(d)(i) or 5.5(d)(ii), and (2)
        second, in the event such property was originally a Contributed
        Property, be allocated among the Partners in a manner consistent with
        Section 6.2(b)(i)(A); and (B) any item of Residual Gain or Residual Loss
        attributable to an Adjusted Property shall be allocated among the
        Partners in the same manner as its correlative item of "book" gain or
        loss is allocated pursuant to Section 6.1.

            (iii) The General Partner shall apply the principles of Treasury
        Regulation Section 1.704-3(d) to eliminate Book-Tax Disparities.

            (c) For the proper administration of the Partnership and for the
preservation of uniformity of the Limited Partner Interests (or any class or
classes thereof), the General Partner shall have sole discretion to (i) adopt
such conventions as it deems appropriate in determining the amount of
depreciation, amortization and cost recovery deductions; (ii) make special
allocations for federal income tax purposes of income (including, without
limitation, gross income) or deductions; and (iii) amend the provisions of this
Agreement as appropriate (x) to reflect the proposal or promulgation of Treasury
Regulations under Section 704(b) or Section 704(c) of the Code or (y) otherwise
to preserve or achieve uniformity of the Limited Partner Interests (or any class
or classes thereof). The General Partner may adopt such conventions, make such
allocations and make such amendments to this Agreement as provided in this
Section 6.2(c) only if such conventions, allocations or amendments would not
have a material adverse effect on the Partners, the holders of any class or
classes of Limited Partner Interests issued and Outstanding or the Partnership,
and if such allocations are consistent with the principles of Section 704 of the
Code.

            (d) The General Partner in its discretion may determine to
depreciate or amortize the portion of an adjustment under Section 743(b) of the
Code attributable to unrealized appreciation in any Adjusted Property (to the
extent of the unamortized Book-Tax Disparity) using a predetermined rate derived
from the depreciation or amortization method and useful life applied to the
Partnership's common basis of such property, despite any inconsistency of such
approach with Treasury Regulation Section 1.167(c)-1(a)(6) or any successor
regulations thereto.


                                      -50-
<PAGE>

If the General Partner determines that such reporting position cannot reasonably
be taken, the General Partner may adopt depreciation and amortization
conventions under which all purchasers acquiring Limited Partner Interests in
the same month would receive depreciation and amortization deductions, based
upon the same applicable rate as if they had purchased a direct interest in the
Partnership's property. If the General Partner chooses not to utilize such
aggregate method, the General Partner may use any other reasonable depreciation
and amortization conventions to preserve the uniformity of the intrinsic tax
characteristics of any Limited Partner Interests that would not have a material
adverse effect on the Limited Partners or the Record Holders of any class or
classes of Limited Partner Interests.

            (e) Any gain allocated to the Partners upon the sale or other
taxable disposition of any Partnership asset shall, to the extent possible,
after taking into account other required allocations of gain pursuant to this
Section 6.2, be characterized as Recapture Income in the same proportions and to
the same extent as such Partners (or their predecessors in interest) have been
allocated any deductions directly or indirectly giving rise to the treatment of
such gains as Recapture Income.

            (f) All items of income, gain, loss, deduction and credit recognized
by the Partnership for federal income tax purposes and allocated to the Partners
in accordance with the provisions hereof shall be determined without regard to
any election under Section 754 of the Code which may be made by the Partnership;
provided, however, that such allocations, once made, shall be adjusted as
necessary or appropriate to take into account those adjustments permitted or
required by Sections 734 and 743 of the Code.

            (g) Each item of Partnership income, gain, loss and deduction, shall
for federal income tax purposes, be determined on an annual basis and prorated
on a monthly basis and shall be allocated to the Partners as of the opening of
the New York Stock Exchange on the first Business Day of each month; provided,
however, that (i) such items for the period beginning on the Closing Date and
ending on the last day of the month in which the Option Closing Date or the
expiration of the Over-allotment Option occurs shall be allocated to the
Partners as of the opening of the New York Stock Exchange on the first Business
Day of the next succeeding month; and provided, further, that gain or loss on a
sale or other disposition of any assets of the Partnership or any other
extraordinary item of income or loss realized and recognized other than in the
ordinary course of business, as determined by the General Partner in its sole
discretion, shall be allocated to the Partners as of the opening of the New York
Stock Exchange on the first Business Day of the month in which such gain or loss
is recognized for federal income tax purposes. The General Partner may revise,
alter or otherwise modify such methods of allocation as it determines necessary
or appropriate in its sole discretion, to the extent permitted or required by
Section 706 of the Code and the regulations or rulings promulgated thereunder.

            (h) Allocations that would otherwise be made to a Limited Partner
under the provisions of this Article VI shall instead be made to the beneficial
owner of Limited Partner Interests held by a nominee in any case in which the
nominee has furnished the identity of such owner to the Partnership in
accordance with Section 6031(c) of the Code or any other method acceptable to
the General Partner in its sole discretion.



                                      -51-
<PAGE>


Section 6.3. Requirement and Characterization of Distributions; Distributions to
             Record Holders.

            (a) Within 45 days following the end of each Quarter commencing with
the Quarter ending on March 31, 2001, an amount equal to 100% of Available Cash
with respect to such Quarter shall, subject to Section 17-607 of the Delaware
Act, be distributed in accordance with this Article VI by the Partnership to the
Partners as of the Record Date selected by the General Partner in its reasonable
discretion. All amounts of Available Cash distributed by the Partnership on any
date from any source shall be deemed to be Operating Surplus until the sum of
all amounts of Available Cash theretofore distributed by the Partnership to the
Partners pursuant to Section 6.4 equals the Operating Surplus from the Closing
Date through the close of the immediately preceding Quarter. Any remaining
amounts of Available Cash distributed by the Partnership on such date shall,
except as otherwise provided in Section 6.5, be deemed to be "Capital Surplus."
All distributions required to be made under this Agreement shall be made subject
to Section 17-607 of the Delaware Act.

            (b) Notwithstanding Section 6.3(a), in the event of the dissolution
and liquidation of the Partnership, all receipts received during or after the
Quarter in which the Liquidation Date occurs, other than from borrowings
described in (a)(ii) of the definition of Available Cash, shall be applied and
distributed solely in accordance with, and subject to the terms and conditions
of, Section 12.4.

            (c) The General Partner shall have the discretion to treat taxes
paid by the Partnership on behalf of, or amounts withheld with respect to, all
or less than all of the Partners, as a distribution of Available Cash to such
Partners.

            (d) Each distribution in respect of a Partnership Interest shall be
paid by the Partnership, directly or through the Transfer Agent or through any
other Person or agent, only to the Record Holder of such Partnership Interest as
of the Record Date set for such distribution. Such payment shall constitute full
payment and satisfaction of the Partnership's liability in respect of such
payment, regardless of any claim of any Person who may have an interest in such
payment by reason of an assignment or otherwise.

Section 6.4. Distributions of Available Cash from Operating Surplus.

            (a) During Subordination Period. Available Cash with respect to any
Quarter within the Subordination Period that is deemed to be Operating Surplus
pursuant to the provisions of Section 6.3 or 6.5 shall, subject to Section
17-607 of the Delaware Act, be distributed as follows, except as otherwise
required by Section 5.6(b) in respect of additional Partnership Securities
issued pursuant thereto:

            (i) First, 99% to the Unitholders holding Common Units, Pro Rata,
        and 1% to the General Partner until there has been distributed in
        respect of each Common Unit then Outstanding an amount equal to the
        Minimum Quarterly Distribution for such Quarter;

            (ii) Second, 99% to the Unitholders holding Common Units, Pro Rata,
        and 1% to the General Partner until there has been distributed in
        respect of each Common Unit


                                      -52-
<PAGE>

        then Outstanding an amount equal to the Cumulative Common Unit Arrearage
        existing with respect to such Quarter;

            (iii) Third, 99% to the Unitholders holding Subordinated Units, Pro
        Rata, and 1% to the General Partner until there has been distributed in
        respect of each Subordinated Unit then Outstanding an amount equal to
        the Minimum Quarterly Distribution for such Quarter;

            (iv) Fourth, 99% to all Unitholders, Pro Rata, and 1% to the General
        Partner until there has been distributed in respect of each Unit then
        Outstanding an amount equal to the excess of the First Target
        Distribution over the Minimum Quarterly Distribution for such Quarter;

            (v) Fifth, 85.8673% to all Unitholders, Pro Rata, 13.1327% to the
        holders of the Incentive Distribution Rights, Pro Rata, and 1% to the
        General Partner until there has been distributed in respect of each Unit
        then Outstanding an amount equal to the excess of the Second Target
        Distribution over the First Target Distribution for such Quarter;

            (vi) Sixth, 75.7653% to all Unitholders, Pro Rata, 23.2347% to the
        holders of the Incentive Distribution Rights, Pro Rata, and 1% to the
        General Partner until there has been distributed in respect of each Unit
        then Outstanding an amount equal to the excess of the Third Target
        Distribution over the Second Target Distribution for such Quarter; and

            (vii) Thereafter, 50.5102% to all Unitholders, Pro Rata, 48.4898% to
        the holders of the Incentive Distribution Rights, Pro Rata, and 1% to
        the General Partner;

provided, however, if the Minimum Quarterly Distribution, the First Target
Distribution, the Second Target Distribution and the Third Target Distribution
have been reduced to zero pursuant to the second sentence of Section 6.6(a), the
distribution of Available Cash that is deemed to be Operating Surplus with
respect to any Quarter will be made solely in accordance with Section
6.4(a)(vii).

            (b) After Subordination Period. Available Cash with respect to any
Quarter after the Subordination Period that is deemed to be Operating Surplus
pursuant to the provisions of Section 6.3 or 6.5, subject to Section 17-607 of
the Delaware Act, shall be distributed as follows, except as otherwise required
by Section 5.6(b) in respect of additional Partnership Securities issued
pursuant thereto:

            (i) First, 99% to all Unitholders, Pro Rata, and 1% to the General
        Partner until there has been distributed in respect of each Unit then
        Outstanding an amount equal to the Minimum Quarterly Distribution for
        such Quarter;

            (ii) Second, 99% to all Unitholders, Pro Rata, and 1% to the General
        Partner until there has been distributed in respect of each Unit then
        Outstanding an amount equal to the excess of the First Target
        Distribution over the Minimum Quarterly Distribution for such Quarter;


                                      -53-
<PAGE>

            (iii) Third, 85.8673% to all Unitholders, Pro Rata, and 13.1327% to
        the holders of the Incentive Distribution Rights, Pro Rata, and 1% to
        the General Partner until there has been distributed in respect of each
        Unit then Outstanding an amount equal to the excess of the Second Target
        Distribution over the First Target Distribution for such Quarter;

            (iv) Fourth, 75.7653% to all Unitholders, Pro Rata, and 23.2347% to
        the holders of the Incentive Distribution Rights, Pro Rata, and 1% to
        the General Partner until there has been distributed in respect of each
        Unit then Outstanding an amount equal to the excess of the Third Target
        Distribution over the Second Target Distribution for such Quarter; and

            (v) Thereafter, 50.5102% to all Unitholders, Pro Rata, and 48.4898%
        to the holders of the Incentive Distribution Rights, Pro Rata, and 1% to
        the General Partner;

provided, however, if the Minimum Quarterly Distribution, the First Target
Distribution, the Second Target Distribution and the Third Target Distribution
have been reduced to zero pursuant to the second sentence of Section 6.6(a), the
distribution of Available Cash that is deemed to be Operating Surplus with
respect to any Quarter will be made solely in accordance with Section 6.4(b)(v).

Section 6.5. Distributions of Available Cash from Capital Surplus.

        Available Cash that is deemed to be Capital Surplus pursuant to the
provisions of Section 6.3(a) shall, subject to Section 17-607 of the Delaware
Act, be distributed, unless the provisions of Section 6.3 require otherwise, 99%
to all Unitholders, Pro Rata, and 1% to the General Partner until a hypothetical
holder of a Common Unit acquired on the Closing Date has received with respect
to such Common Unit, during the period since the Closing Date through such date,
distributions of Available Cash that are deemed to be Capital Surplus in an
aggregate amount equal to the Initial Unit Price. Available Cash that is deemed
to be Capital Surplus shall then be distributed 99% to all Unitholders holding
Common Units, Pro Rata, and 1% to the General Partner until there has been
distributed in respect of each Common Unit then Outstanding an amount equal to
the Cumulative Common Unit Arrearage. Thereafter, all Available Cash shall be
distributed as if it were Operating Surplus and shall be distributed in
accordance with Section 6.4.

Section 6.6. Adjustment of Minimum Quarterly Distribution and Target
Distribution Levels.

            (a) The Minimum Quarterly Distribution, First Target Distribution,
Second Target Distribution, Third Target Distribution Common Unit Arrearages and
Cumulative Common Unit Arrearages shall be proportionately adjusted in the event
of any distribution, combination or subdivision (whether effected by a
distribution payable in Units or otherwise) of Units or other Partnership
Securities in accordance with Section 5.10. In the event of a distribution of
Available Cash that is deemed to be from Capital Surplus, the then applicable
Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution shall be adjusted proportionately
downward to equal the product obtained by multiplying the otherwise applicable
Minimum Quarterly Distribution, First Target Distribution,


                                      -54-
<PAGE>

Second Target Distribution and Third Target Distribution, as the case may be, by
a fraction of which the numerator is the Unrecovered Capital of the Common Units
immediately after giving effect to such distribution and of which the
denominator is the Unrecovered Capital of the Common Units immediately prior to
giving effect to such distribution.

               (b) The Minimum Quarterly Distribution, First Target
Distribution, Second Target Distribution and Third Target Distribution shall
also be subject to adjustment pursuant to Section 6.9.

Section 6.7. Special Provisions Relating to the Holders of Subordinated Units.

               (a) Except with respect to the right to vote on or approve
matters requiring the vote or approval of a percentage of the holders of
Outstanding Common Units and the right to participate in allocations of income,
gain, loss and deduction and distributions made with respect to Common Units,
the holder of a Subordinated Unit shall have all of the rights and obligations
of a Unitholder holding Common Units hereunder; provided, however, that
immediately upon the conversion of Subordinated Units into Common Units pursuant
to Section 5.8, the Unitholder holding a Subordinated Unit shall possess all of
the rights and obligations of a Unitholder holding Common Units hereunder,
including the right to vote as a Common Unitholder and the right to participate
in allocations of income, gain, loss and deduction and distributions made with
respect to Common Units; provided, however, that such converted Subordinated
Units shall remain subject to the provisions of Sections 5.5(c)(ii), 6.1(d)(x)
and 6.7(b).

               (b) The Unitholder holding a Subordinated Unit which has
converted into a Common Unit pursuant to Section 5.8 shall not be issued a
Common Unit Certificate pursuant to Section 4.1, and shall not be permitted to
transfer its converted Subordinated Units to a Person which is not an Affiliate
of the holder until such time as the General Partner determines, based on advice
of counsel, that a converted Subordinated Unit should have, as a substantive
matter, like intrinsic economic and federal income tax characteristics, in all
material respects, to the intrinsic economic and federal income tax
characteristics of an Initial Common Unit. In connection with the condition
imposed by this Section 6.7(b), the General Partner may take whatever reasonable
steps are required to provide economic uniformity to the converted Subordinated
Units in preparation for a transfer of such converted Subordinated Units,
including the application of Sections 5.5 (c)(ii) and 6.1(d)(x); provided,
however, that no such steps may be taken that would have a material adverse
effect on the Unitholders holding Common Units represented by Common Unit
Certificates.

Section 6.8. Special Provisions Relating to the Holders of Incentive
             Distribution Rights.

        Notwithstanding anything to the contrary set forth in this Agreement,
the holders of the Incentive Distribution Rights (a) shall (i) possess the
rights, and obligations provided in this Agreement with respect to a Limited
Partner pursuant to Articles III and VII and (ii) have a Capital Account as a
Partner pursuant to Section 5.5 and all other provisions related thereto and (b)
shall not (i) be entitled to vote on any matters requiring the approval or vote
of the holders of Outstanding Units, (ii) be entitled to any distributions other
than as provided in Sections 6.4(a)(v), (vi) and (vii), 6.4(b)(iii), (iv) and
(v), and 12.4 or (iii) be allocated items of income, gain, loss or deduction
other than as specified in this Article VI.


                                      -55-
<PAGE>


Section 6.9. Entity-Level Taxation.

        If legislation is enacted or the interpretation of existing language is
modified by the relevant governmental authority which causes the Partnership or
the Operating Partnership to be treated as an association taxable as a
corporation or otherwise subjects the Partnership or the Operating Partnership
to entity-level taxation for federal income tax purposes, the then applicable
Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution shall be adjusted to equal the
product obtained by multiplying (a) the amount thereof by (b) one minus the sum
of (i) the highest marginal federal corporate (or other entity, as applicable)
income tax rate of the Partnership or such Operating Partnership for the taxable
year of the Partnership or the Operating Partnership in which such Quarter
occurs (expressed as a percentage) plus (ii) the effective overall state and
local income tax rate (expressed as a percentage) applicable to the Partnership
or the Operating Partnership for the calendar year next preceding the calendar
year in which such Quarter occurs (after taking into account the benefit of any
deduction allowable for federal income tax purposes with respect to the payment
of state and local income taxes), but only to the extent of the increase in such
rates resulting from such legislation or interpretation. Such effective overall
state and local income tax rate shall be determined for the taxable year next
preceding the first taxable year during which the Partnership or the Operating
Partnership is taxable for federal income tax purposes as an association taxable
as a corporation or is otherwise subject to entity-level taxation by determining
such rate as if the Partnership or the Operating Partnership had been subject to
such state and local taxes during such preceding taxable year.

                                  ARTICLE VII.
                      MANAGEMENT AND OPERATION OF BUSINESS

Section 7.1. Management.

            (a) The General Partner shall conduct, direct and manage all
activities of the Partnership. Except as otherwise expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership shall be exclusively vested in the General Partner, and no Limited
Partner or Assignee shall have any management power over the business and
affairs of the Partnership. In addition to the powers now or hereafter granted a
general partner of a limited partnership under applicable law or which are
granted to the General Partner under any other provision of this Agreement, the
General Partner, subject to Section 7.3, shall have full power and authority to
do all things and on such terms as it, in its sole discretion, may deem
necessary or appropriate to conduct the business of the Partnership, to exercise
all powers set forth in Section 2.5 and to effectuate the purposes set forth in
Section 2.4, including the following:

            (i) the making of any expenditures, the lending or borrowing of
        money, the assumption or guarantee of, or other contracting for,
        indebtedness and other liabilities, the issuance of evidences of
        indebtedness, including indebtedness that is convertible into
        Partnership Securities, and the incurring of any other obligations;


                                      -56-
<PAGE>

            (ii) the making of tax, regulatory and other filings, or rendering
        of periodic or other reports to governmental or other agencies having
        jurisdiction over the business or assets of the Partnership;

            (iii) the acquisition, disposition, mortgage, pledge, encumbrance,
        hypothecation or exchange of any or all of the assets of the Partnership
        or the merger or other combination of the Partnership with or into
        another Person (the matters described in this clause (iii) being
        subject, however, to any prior approval that may be required by Section
        7.3);

            (iv) the use of the assets of the Partnership (including cash on
        hand) for any purpose consistent with the terms of this Agreement,
        including the financing of the conduct of the operations of the
        Partnership Group; subject to Section 7.6(a), the lending of funds to
        other Persons (including the Operating Partnership); the repayment of
        obligations of the Partnership Group and the making of capital
        contributions to any member of the Partnership Group;

            (v) the negotiation, execution and performance of any contracts,
        conveyances or other instruments (including instruments that limit the
        liability of the Partnership under contractual arrangements to all or
        particular assets of the Partnership, with the other party to the
        contract to have no recourse against the General Partner or its assets
        other than its interest in the Partnership, even if same results in the
        terms of the transaction being less favorable to the Partnership than
        would otherwise be the case);

            (vi) the distribution of Partnership cash;

            (vii) the selection and dismissal of employees (including employees
        having titles such as "president," "vice president," "secretary" and
        "treasurer") and agents, outside attorneys, accountants, consultants and
        contractors and the determination of their compensation and other terms
        of employment or hiring;

            (viii) the maintenance of such insurance for the benefit of the
        Partnership Group and the Partners as it deems necessary or appropriate;

            (ix) the formation of, or acquisition of an interest in, and the
        contribution of property and the making of loans to, any further limited
        or general partnerships, joint ventures, limited liability companies,
        corporations or other relationships (including the acquisition of
        interests in, and the contributions of property to, the Operating
        Partnership from time to time) subject to the restrictions set forth in
        Section 2.4;

            (x) the control of any matters affecting the rights and obligations
        of the Partnership, including the bringing and defending of actions at
        law or in equity and otherwise engaging in the conduct of litigation and
        the incurring of legal expense and the settlement of claims and
        litigation;

            (xi) the indemnification of any Person against liabilities and
        contingencies to the extent permitted by law;


                                      -57-
<PAGE>


            (xii) the entering into of listing agreements with any National
        Securities Exchange and the delisting of some or all of the Limited
        Partner Interests from, or requesting that trading be suspended on, any
        such exchange (subject to any prior approval that may be required under
        Section 4.8);

            (xiii) unless restricted or prohibited by Section 5.7, the purchase,
        sale or other acquisition or disposition of Partnership Securities, or
        the issuance of additional options, rights, warrants and appreciation
        rights relating to Partnership Securities; and

            (xiv) the undertaking of any action in connection with the
        Partnership's participation in the Operating Partnership as a partner.

            (b) Notwithstanding any other provision of this Agreement, the
Operating Partnership Agreement, the Delaware Act or any applicable law, rule or
regulation, each of the Partners and the Assignees and each other Person who may
acquire an interest in Partnership Securities hereby (i) approves, ratifies and
confirms the execution, delivery and performance by the parties thereto of the
Operating Partnership Agreement, the Underwriting Agreement, the Omnibus
Agreement, the Contribution and Conveyance Agreement, and the other agreements
and other described in or filed as exhibits to the Registration Statement that
are related to the transactions contemplated by the Registration Statement; (ii)
agrees that the General Partner (on its own or through any officer of the
Partnership) is authorized to execute, deliver and perform the agreements
referred to in clause (i) of this sentence and the other agreements, acts,
transactions and matters described in or contemplated by the Registration
Statement on behalf of the Partnership without any further act, approval or vote
of the Partners or the Assignees or the other Persons who may acquire an
interest in Partnership Securities; and (iii) agrees that the execution,
delivery or performance by the General Partner, any Group Member or any
Affiliate of any of them, of this Agreement or any agreement authorized or
permitted under this Agreement (including the exercise by the General Partner or
any Affiliate of the General Partner of the rights accorded pursuant to Article
XV), shall not constitute a breach by the General Partner of any duty that the
General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement (or any other agreements) or of any duty stated or
implied by law or equity.

Section 7.2.   Certificate of Limited Partnership.

        The General Partner has caused the Certificate of Limited Partnership to
be filed with the Secretary of State of the State of Delaware as required by the
Delaware Act and shall use all reasonable efforts to cause to be filed such
other certificates or documents as may be determined by the General Partner in
its sole discretion to be reasonable and necessary or appropriate for the
formation, continuation, qualification and operation of a limited partnership
(or a partnership in which the limited partners have limited liability) in the
State of Delaware or any other state in which the Partnership may elect to do
business or own property. To the extent that such action is determined by the
General Partner in its sole discretion to be reasonable and necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate of Limited Partnership and do all things to maintain the
Partnership as a limited partnership (or a partnership or other entity in which
the limited partners have limited liability) under the laws of


                                      -58-
<PAGE>


the State of Delaware or of any other state in which the Partnership may elect
to do business or own property. Subject to the terms of Section 3.4(a), the
General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate of Limited Partnership, any qualification
document or any amendment thereto to any Limited Partner.

Section 7.3. Restrictions on General Partner's Authority.

            (a) The General Partner may not, without written approval of the
specific act by holders of all of the Outstanding Limited Partner Interests or
by other written instrument executed and delivered by holders of all of the
Outstanding Limited Partner Interests subsequent to the date of this Agreement,
take any action in contravention of this Agreement, including, except as
otherwise provided in this Agreement, (i) committing any act that would make it
impossible to carry on the ordinary business of the Partnership; (ii) possessing
Partnership property, or assigning any rights in specific Partnership property,
for other than a Partnership purpose; (iii) admitting a Person as a Partner;
(iv) amending this Agreement in any manner; or (v) transferring its interest as
general partner of the Partnership.

            (b) Except as provided in Articles XII and XIV, the General Partner
may not sell, exchange or otherwise dispose of all or substantially all of the
Partnership's assets in a single transaction or a series of related transactions
(including by way of merger, consolidation or other combination) or approve on
behalf of the Partnership the sale, exchange or other disposition of all or
substantially all of the assets of the Operating Partnership, without the
approval of holders of a Unit Majority; provided however that this provision
shall not preclude or limit the General Partner's ability to mortgage, pledge,
hypothecate or grant a security interest in all or substantially all of the
assets of the Partnership or Operating Partnership and shall not apply to any
forced sale of any or all of the assets of the Partnership or Operating
Partnership pursuant to the foreclosure of, or other realization upon, any such
encumbrance. Without the approval of holders of a Unit Majority, the General
Partner shall not, on behalf of the Partnership, (i) consent to any amendment to
the Operating Partnership Agreement or, except as expressly permitted by Section
7.9(d), take any action permitted to be taken by a partner of the Operating
Partnership, in either case, that would have a material adverse effect on the
Partnership as a partner of the Operating Partnership or (ii) except as
permitted under Sections 4.6, 11.1 and 11.2, elect or cause the Partnership to
elect a successor general partner of the Partnership or the Operating
Partnership.

Section 7.4. Reimbursement of the General Partner.

            (a) Except as provided in this Section 7.4 and elsewhere in this
Agreement or in the Operating Partnership Agreement, the General Partner shall
not be compensated for its services as general partner or managing member of any
Group Member.

            (b) The General Partner shall be reimbursed on a monthly basis, or
such other reasonable basis as the General Partner may determine in its sole
discretion, for (i) all direct and indirect expenses it incurs or payments it
makes on behalf of the Partnership (including salary, bonus, incentive
compensation and other amounts paid to any Person including Affiliates of the
General Partner to perform services for the Partnership or for the General
Partner in the discharge of its duties to the Partnership), and (ii) all other
necessary or appropriate expenses


                                      -59-
<PAGE>

allocable to the Partnership or otherwise reasonably incurred by the General
Partner in connection with operating the Partnership's business (including
expenses allocated to the General Partner by its Affiliates). The General
Partner shall determine the expenses that are allocable to the Partnership in
any reasonable manner determined by the General Partner in its sole discretion.
Reimbursements pursuant to this Section 7.4 shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section 7.7.

            (c) Subject to Section 5.7, the General Partner, in its sole
discretion and without the approval of the Limited Partners (who shall have no
right to vote in respect thereof), may propose and adopt on behalf of the
Partnership employee benefit plans, employee programs and employee practices
(including plans, programs and practices involving the issuance of Partnership
Securities or options to purchase Partnership Securities), or cause the
Partnership to issue Partnership Securities in connection with, or pursuant to,
any employee benefit plan, employee program or employee practice maintained or
sponsored by the General Partner or any of its Affiliates, in each case for the
benefit of employees of the General Partner, any Group Member or any Affiliate,
or any of them, in respect of services performed, directly or indirectly, for
the benefit of the Partnership Group. The Partnership agrees to issue and sell
to the General Partner or any of its Affiliates any Partnership Securities that
the General Partner or such Affiliate is obligated to provide to any employees
pursuant to any such employee benefit plans, employee programs or employee
practices. Expenses incurred by the General Partner in connection with any such
plans, programs and practices (including the net cost to the General Partner or
such Affiliate of Partnership Securities purchased by the General Partner or
such Affiliate from the Partnership to fulfill options or awards under such
plans, programs and practices) shall be reimbursed in accordance with Section
7.4(b). Any and all obligations of the General Partner under any employee
benefit plans, employee programs or employee practices adopted by the General
Partner as permitted by this Section 7.4(c) shall constitute obligations of the
General Partner hereunder and shall be assumed by any successor General Partner
approved pursuant to Section 11.1 or 11.2 or the transferee of or successor to
all of the General Partner's General Partner Interest pursuant to Section 4.6.

Section 7.5. Outside Activities.

            (a) After the Closing Date, the General Partner, for so long as it
is the General Partner of the Partnership (i) agrees that its sole business will
be to act as the general partner or managing member of the Partnership, the
Operating Partnership, and any other partnership or limited liability company of
which the Partnership or the Operating Partnership is, directly or indirectly, a
partner or member and to undertake activities that are ancillary or related
thereto (including being a limited partner in the Partnership), (ii) shall not
engage in any business or activity or incur any debts or liabilities except in
connection with or incidental to (A) its performance as general partner or
managing member of one or more Group Members or as described in or contemplated
by the Registration Statement or (B) the acquiring, owning or disposing of debt
or equity securities in any Group Member and (iii) except to the extent
permitted in the Omnibus Agreement, shall not, and shall cause its Affiliates
not to, engage in any Restricted Business.

            (b) The Williams Companies, Inc. and certain of its Affiliates have
entered into the Omnibus Agreement with the Partnership and the Operating
Partnership, which


                                      -60-
<PAGE>


agreement sets forth certain restrictions on the ability of The Williams
Companies, Inc. and its Affiliates to engage in Restricted Businesses.

            (c) Except as specifically restricted by Section 7.5(a) and the
Omnibus Agreement, each Indemnitee (other than the General Partner) shall have
the right to engage in businesses of every type and description and other
activities for profit and to engage in and possess an interest in other business
ventures of any and every type or description, whether in businesses engaged in
or anticipated to be engaged in by any Group Member, independently or with
others, including business interests and activities in direct competition with
the business and activities of any Group Member, and none of the same shall
constitute a breach of this Agreement or any duty express or implied by law to
any Group Member or any Partner or Assignee. Neither any Group Member, any
Limited Partner nor any other Person shall have any rights by virtue of this
Agreement, the Operating Partnership Agreement or the partnership relationship
established hereby or thereby in any business ventures of any Indemnitee.

            (d) Subject to the terms of Section 7.5(a), Section 7.5(b), Section
7.5(c) and the Omnibus Agreement, but otherwise notwithstanding anything to the
contrary in this Agreement, (i) the engaging in competitive activities by any
Indemnitees (other than the General Partner) in accordance with the provisions
of this Section 7.5 is hereby approved by the Partnership and all Partners, (ii)
it shall be deemed not to be a breach of the General Partner's fiduciary duty or
any other obligation of any type whatsoever of the General Partner for the
Indemnitees (other than the General Partner) to engage in such business
interests and activities in preference to or to the exclusion of the Partnership
and (iii) except as set forth in the Omnibus Agreement, the General Partner and
the Indemnities shall have no obligation to present business opportunities to
the Partnership.

            (e) The General Partner and any of its Affiliates may acquire Units
or other Partnership Securities in addition to those acquired on the Closing
Date and, except as otherwise provided in this Agreement, shall be entitled to
exercise all rights of the General Partner or Limited Partner, as applicable,
relating to such Units or Partnership Securities.

            (f) The term "Affiliates" when used in Section 7.5(a) and Section
7.5(e) with respect to the General Partner shall not include any Group Member or
any Subsidiary of the Group Member.

            (g) Anything in this Agreement to the contrary notwithstanding, to
the extent that provisions of Sections 7.7, 7.8, 7.9, 7.10 or other Sections of
this Agreement purport or are interpreted to have the effect of restricting the
fiduciary duties that might otherwise, as a result of Delaware or other
applicable law, be owed by the General Partner to the Partnership and its
Limited Partners, or to constitute a waiver or consent by the Limited Partners
to any such restriction, such provisions shall be inapplicable and have no
effect in determining whether the General Partner has complied with its
fiduciary duties in connection with determinations made by it under this Section
7.5.


                                      -61-
<PAGE>


Section 7.6. Loans from the General Partner; Loans or Contributions from the
Partnership; Contracts with Affiliates; Certain Restrictions on the General
Partner.

            (a) The General Partner or its Affiliates may lend to any Group
Member, and any Group Member may borrow from the General Partner or any of its
Affiliates, funds needed or desired by the Group Member for such periods of time
and in such amounts as the General Partner may determine; provided, however,
that in any such case the lending party may not charge the borrowing party
interest at a rate greater than the rate that would be charged the borrowing
party or impose terms less favorable to the borrowing party than would be
charged or imposed on the borrowing party by unrelated lenders on comparable
loans made on an arm's-length basis (without reference to the lending party's
financial abilities or guarantees). The borrowing party shall reimburse the
lending party for any costs (other than any additional interest costs) incurred
by the lending party in connection with the borrowing of such funds. For
purposes of this Section 7.6(a) and Section 7.6(b), the term "Group Member"
shall include any Affiliate of a Group Member that is controlled by the Group
Member. No Group Member may lend funds to the General Partner or any of its
Affiliates (other than another Group Member).

            (b) The Partnership may lend or contribute to any Group Member, and
any Group Member may borrow from the Partnership, funds on terms and conditions
established in the sole discretion of the General Partner; provided, however,
that the Partnership may not charge the Group Member interest at a rate less
than the rate that would be charged to the Group Member (without reference to
the General Partner's financial abilities or guarantees) by unrelated lenders on
comparable loans. The foregoing authority shall be exercised by the General
Partner in its sole discretion and shall not create any right or benefit. in
favor of any Group Member or any other Person.

            (c) The General Partner may itself, or may enter into an agreement
with any of its Affiliates to, render services to a Group Member or to the
General Partner in the discharge of its duties as general partner of the
Partnership. Any services rendered to a Group Member by the General Partner or
any of its Affiliates shall be on terms that are fair and reasonable to the
Partnership; provided, however, that the requirements of this Section 7.6(c)
shall be deemed satisfied as to (i) any transaction approved by Special
Approval, (ii) any transaction, the terms of which are no less favorable to the
Partnership Group than those generally being provided to or available from
unrelated third parties or (iii) any transaction that, taking into account the
totality of the relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous to the
Partnership Group), is equitable to the Partnership Group. The provisions of
Section 7.4 shall apply to the rendering of services described in this Section
7.6(c).

            (d) The Partnership Group may transfer assets to joint ventures,
other partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions as are consistent with this Agreement and applicable
law.

            (e) Neither the General Partner nor any of its Affiliates shall
sell, transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions that are
fair and reasonable to the Partnership; provided,


                                      -62-
<PAGE>


however, that the requirements of this Section 7.6(e) shall be deemed to be
satisfied as to (i) the transactions effected pursuant to Sections 5.2 and 5.3,
the Contribution and Conveyance Agreement and any other transactions described
in or contemplated by the Registration Statement, (ii) any transaction approved
by Special Approval, (iii) any transaction, the terms of which are no less
favorable to the Partnership than those generally being provided to or available
from unrelated third parties, or (iv) any transaction that, taking into account
the totality of the relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous to the
Partnership), is equitable to the Partnership. With respect to any contribution
of assets to the Partnership in exchange for Partnership Securities, the
Conflicts Committee, in determining whether the appropriate number of
Partnership Securities are being issued, may take into account, among other
things, the fair market value of the assets, the liquidated and contingent
liabilities assumed, the tax basis in the assets, the extent to which tax-only
allocations to the transferor will protect the existing partners of the
Partnership against a low tax basis, and such other factors as the Conflicts
Committee deems relevant under the circumstances.

            (f) The General Partner and its Affiliates will have no obligation
to permit any Group Member to use any facilities or assets of the General
Partner and its Affiliates, except as may be provided in contracts entered into
from time to time specifically dealing with such use, nor shall there be any
obligation on the part of the General Partner or its Affiliates to enter into
such contracts.

            (g) Without limitation of Sections 7.6(a) through 7.6(f), and
notwithstanding anything to the contrary in this Agreement, the existence of the
conflicts of interest described in the Registration Statement are hereby
approved by all Partners.

Section 7.7. Indemnification.

            (a) To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all Indemnitees shall be
indemnified and held harmless by the Partnership from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in which
any Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as an Indemnitee; provided, that in each case
the Indemnitee acted in good faith and in a manner that such Indemnitee
reasonably believed to be in, or (in the case of a Person other than the General
Partner) not opposed to, the best interests of the Partnership and, with respect
to any criminal proceeding, had no reasonable cause to believe its conduct was
unlawful; provided, further, no indemnification pursuant to this Section 7.7
shall be available to the General Partner with respect to its obligations
incurred pursuant to the Underwriting Agreement or the Contribution and
Conveyance Agreement (other than obligations incurred by the General Partner on
behalf of the Partnership or the Operating Partnership). The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption that
the Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership, it being agreed that the General Partner shall not be
personally liable for such


                                      -63-
<PAGE>

indemnification and shall have no obligation to contribute or loan any monies or
property to the Partnership to enable it to effectuate such indemnification.

            (b) To the fullest extent permitted by law, expenses (including
legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant
to Section 7.7(a) in defending any claim, demand, action; suit or proceeding
shall, from time to time, be advanced by the Partnership prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by
the Partnership of any undertaking by or on behalf of the Indemnitee to repay
such amount if it shall be determined that the Indemnitee is not entitled to be
indemnified as authorized in this Section 7.7.

            (c) The indemnification provided by this Section 7.7 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to any vote of the holders of Outstanding Limited Partner
Interests, as a matter of law or otherwise, both as to actions in the
Indemnitee's capacity as an Indemnitee and as to actions in any other capacity
(including any capacity under the Underwriting Agreement), and shall continue as
to an Indemnitee who has ceased to serve in such capacity and shall inure to the
benefit of the heirs, successors, assigns and administrators of the Indemnitee.

            (d) The Partnership may purchase and maintain (or reimburse the
General Partner or its Affiliates for the cost of) insurance, on behalf of the
General Partner, its Affiliates and such other Persons as the General Partner
shall determine, against any liability that may be asserted against or expense
that may be incurred by such Person in connection with the Partnership's
activities or such Person's activities on behalf of the Partnership, regardless
of whether the Partnership would have the power to indemnify such Person against
such liability under the provisions of this Agreement.

            (e) For purposes of this Section 7.7, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute "fines" within the meaning of Section 7.7(a); and action taken
or omitted by the Indemnitee with respect to any employee benefit plan in the
performance of its duties for a purpose reasonably believed by it to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be
for a purpose which is in, or not opposed to, the best interests of the
Partnership.

            (f) In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.

            (g) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.


                                      -64-
<PAGE>

            (h) The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

            (i) No amendment, modification or repeal of this Section 7.7 or any
provision hereof shall in any manner terminate, reduce or impair the right of
any past, present or future Indemnitee to be indemnified by the Partnership, nor
the obligations of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 7.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or-in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.

Section 7.8. Liability of Indemnitees.

            (a) Notwithstanding anything to the contrary set forth in this
Agreement, no Indemnitee shall be liable for monetary damages to the
Partnership, the Limited Partners, the Assignees or any other Persons who have
acquired interests in the Partnership Securities, for losses sustained or
liabilities incurred as a result of any act or omission if such Indemnitee acted
in good faith.

            (b) Subject to its obligations and duties as General Partner set
forth in Section 7.1(a), the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents, and the General Partner
shall not be responsible for any misconduct or negligence on the part of any
such agent appointed by the General Partner in good faith.

            (c) To the extent that, at law or in equity, an Indemnitee has
duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or to the Partners, the General Partner and any other Indemnitee
acting in connection with the Partnership's business or affairs shall not be
liable to the Partnership or to any Partner for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent
that they restrict or otherwise modify the duties and liabilities of an
Indemnitee otherwise existing at law or in equity, are agreed by the Partners to
replace such other duties and liabilities of such Indemnitee.

            (d) Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the liability to the Partnership, the Limited Partners, the
General Partner, and the Partnership's and General Partner's directors, officers
and employees under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.

Section 7.9. Resolution of Conflicts of Interest.

            (a) Unless otherwise expressly provided in this Agreement or the
Operating Partnership Agreement, whenever a potential conflict of interest
exists or arises between the General Partner or any of its Affiliates, on the
one hand, and the Partnership, the Operating Partnership, any Partner or any
Assignee, on the other, any resolution or course of action by the


                                      -65-
<PAGE>


General Partner or its Affiliates in respect of such conflict of interest shall
be permitted and deemed approved by all Partners, and shall not constitute a
breach of this Agreement, of the Operating Partnership Agreement, of any
agreement contemplated herein or therein, or of any duty stated or implied by
law or equity, if the resolution or course of action is, or by operation of this
Agreement is deemed to be, fair and reasonable to the Partnership. The General
Partner shall be authorized but not required in connection with its resolution
of such conflict of interest to seek Special Approval of such resolution. Any
conflict of interest and any resolution of such conflict of interest shall be
conclusively deemed fair and reasonable to the Partnership if such conflict of
interest or resolution is (i) approved by Special Approval (as long as the
material facts known to the General Partner or any of its Affiliates regarding
any proposed transaction were disclosed to the Conflicts Committee at the time
it gave its approval), (ii) on terms no less favorable to the Partnership than
those generally being provided to or available from unrelated third parties or
(iii) fair to the Partnership, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Partnership). The General
Partner may also adopt a resolution or course of action that has not received
Special Approval. The General Partner (including the Conflicts Committee in
connection with any Special Approval) shall be authorized in connection with its
determination of what is "fair and reasonable" to the Partnership and in
connection with its resolution of any conflict of interest to consider (A) the
relative interests of any party to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interest; (B) any
customary or accepted industry practices and any customary or historical
dealings with a particular Person; (C) any applicable generally accepted
accounting practices or principles; and (D) such additional factors as the
General Partner (including the Conflicts Committee) determines in its sole
discretion to be relevant, reasonable or appropriate under the circumstances.
Nothing contained in this Agreement, however, is intended to nor shall it be
construed to require the General Partner (including the Conflicts Committee) to
consider the interests of any Person other than the Partnership. In the absence
of bad faith by the General Partner, the resolution, action or terms so made,
taken or provided by the General Partner with respect to such matter shall not
constitute a breach of this Agreement or any other agreement contemplated herein
or a breach of any standard of care or duty imposed herein or therein or, to the
extent permitted by law, under the Delaware Act or any other law, rule or
regulation.

            (b) Whenever this Agreement or any other agreement contemplated
hereby provides that the General Partner or any of its Affiliates is permitted
or required to make a decision (i) in its "sole discretion" or "discretion,"
that it deems "necessary or appropriate" or "necessary or advisable" or under a
grant of similar authority or latitude, except as otherwise provided herein, the
General Partner or such Affiliate shall be entitled to consider only such
interests and factors as it desires and shall have no duty or obligation to give
any consideration to any interest of, or factors affecting, the Partnership, the
Operating Partnership, any Limited Partner or any Assignee, (ii) it may make
such decision in its sole discretion (regardless of whether there is a reference
to "sole discretion" or "discretion") unless another express standard is
provided for, or (iii) in "good faith" or under another express standard, the
General Partner or such Affiliate shall act under such express standard and
shall not be subject to any other or different standards imposed by this
Agreement, the Operating Partnership Agreement, any other agreement contemplated
hereby or under the Delaware Act or any other law, rule or regulation. In
addition, any actions taken by the General Partner or such Affiliate consistent
with the standards of "reasonable discretion" set forth in the definitions of
Available Cash or Operating


                                      -66-
<PAGE>


Surplus shall not constitute a breach of any duty of the General Partner to the
Partnership or the Limited Partners. The General Partner shall have no duty,
express or implied, to sell or otherwise dispose of any asset of the Partnership
Group other than in the ordinary course of business. No borrowing by any Group
Member or the approval thereof by the General Partner shall be deemed to
constitute a breach of any duty of the General Partner to the Partnership or the
Limited Partners by reason of the fact that the purpose or effect of such
borrowing is directly or indirectly to (A) enable distributions to the General
Partner or its Affiliates (including in their capacities as Limited Partners) to
exceed 1% of the total amount distributed to all partners or (B) hasten the
expiration of the Subordination Period or the conversion of any Subordinated
Units into Common Units.

            (c) Whenever a particular transaction, arrangement or resolution of
a conflict of interest is required under this Agreement to be "fair and
reasonable" to any Person, the fair and reasonable nature of such transaction,
arrangement or resolution shall be considered in the context of all similar or
related transactions.

            (d) The Unitholders hereby authorize the General Partner, on behalf
of the Partnership as a partner or member of a Group Member, to approve of
actions by the general partner or managing member of such Group Member similar
to those actions permitted to be taken by the General Partner pursuant to this
Section 7.9.

Section 7.10.  Other Matters Concerning the General Partner.

            (a) The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties.

            (b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion (including an Opinion of Counsel) of such Persons as to matters
that the General Partner reasonably believes to be within such Person's
professional or expert competence shall be conclusively presumed to have been
done or omitted in good faith and in accordance with such opinion.

            (c) The General Partner shall have the right, in respect of any of
its powers or obligations hereunder, to act through any of its duly authorized
officers, a duly appointed attorney or attorneys-in-fact or the duly authorized
officers of the Partnership.

            (d) Any standard of care and duty imposed by this Agreement or under
the Delaware Act or any applicable law, rule or regulation shall be modified,
waived or limited to the extent permitted by law, as required to permit the
General Partner to act under this Agreement or any other agreement contemplated
by this Agreement and to make any decision pursuant to the authority prescribed
in this Agreement, so long as such action is reasonably believed by the General
Partner to be in, or not inconsistent with, the best interests of the
Partnership.


                                      -67-
<PAGE>


Section 7.11.  Purchase or Sale of Partnership Securities.

        The General Partner may cause the Partnership to purchase or otherwise
acquire Partnership Securities; provided that, except as permitted pursuant to
Section 4.10, the General Partner may not cause any Group Member to purchase
Subordinated Units during the Subordination Period. As long as Partnership
Securities are held by any Group Member, such Partnership Securities shall not
be considered Outstanding for any purpose, except as otherwise provided herein.
The General Partner or any Affiliate of the General Partner may also purchase or
otherwise acquire and sell or otherwise dispose of Partnership Securities for
its own account, subject to the provisions of Articles IV and X.

Section 7.12.  Registration Rights of the General Partner and its Affiliates.

            (a) If (i) the General Partner or any Affiliate of the General
Partner (including for purposes of this Section 7.12, any Person that is an
Affiliate of the General Partner at the date of this Agreement notwithstanding
that it may later cease to be an Affiliate of the General Partner) holds
Partnership Securities that it desires to sell and (ii) Rule 144 of the
Securities Act (or any successor rule or regulation to Rule 144) or another
exemption from registration is not available to enable such holder of
Partnership Securities (the "Holder") to dispose of the number of Partnership
Securities it desires to sell at the time it desires to do so without
registration under the Securities Act, then upon the request of the General
Partner or any of its Affiliates, the Partnership shall file with the Commission
as promptly as practicable after receiving such request, and use all reasonable
efforts to cause to become effective and remain effective for a period of not
less than six months following its effective date or such shorter period as
shall terminate when all Partnership Securities covered by such registration
statement have been sold, a registration statement under the Securities Act
registering the offering and sale of the number of Partnership Securities
specified by the Holder; provided, however, that the Partnership shall not be
required to effect more than three registrations pursuant to this Section
7.12(a); and provided further, that if the Conflicts Committee determines in its
good faith judgment that a postponement of the requested registration for up to
six months would be in the best interests of the Partnership and its Partners
due to a pending transaction, investigation or other event, the filing of such
registration statement or the effectiveness thereof may be deferred for up to
six months, but not thereafter. In connection with any registration pursuant to
the immediately preceding sentence, the Partnership shall promptly prepare and
file (x) such documents as may be necessary to register or qualify the
securities subject to such registration under the securities laws of such states
as the Holder shall reasonably request; provided, however, that no such
qualification shall be required in any jurisdiction where, as a result thereof,
the Partnership would become subject to general service of process or to
taxation or qualification to do business as a foreign corporation or partnership
doing business in such jurisdiction solely as a result of such registration, and
(y) such documents as may be necessary to apply for listing or to list the
Partnership Securities subject to such registration on such National Securities
Exchange as the Holder shall reasonably request, and do any and all other acts
and things that may reasonably be necessary or advisable to enable the Holder to
consummate a public sale of such Partnership Securities in such states. Except
as set forth in Section 7.12(c), all costs and expenses of any such registration
and offering (other than the underwriting discounts and commissions) shall be
paid by the Partnership, without reimbursement by the Holder.


                                      -68-
<PAGE>

            (b) If the Partnership shall at any time propose to file a
registration statement under the Securities Act for an offering of equity
securities of the Partnership for cash (other than an offering relating solely
to an employee benefit plan), the Partnership shall use all reasonable efforts
to include such number or amount of securities held by the Holder in such
registration statement as the Holder shall request. If the proposed offering
pursuant to this Section 7.12(b) shall be an underwritten offering, then, in the
event that the managing underwriter or managing underwriters of such offering
advise the Partnership and the Holder in writing that in their opinion the
inclusion of all or some of the Holder's Partnership Securities would adversely
and materially affect the success of the offering, the Partnership shall include
in such offering only that number or amount, if any, of securities held by the
Holder which, in the opinion of the managing underwriter or managing
underwriters, will not so adversely and materially affect the offering. Except
as set forth in Section 7.12(c), all costs and expenses of any such registration
and offering (other than the underwriting discounts and commissions) shall be
paid by the Partnership, without reimbursement by the Holder.

            (c) If underwriters are engaged in connection with any registration
referred to in this Section 7.12, the Partnership shall provide indemnification,
representations, covenants, opinions and other assurance to the underwriters in
form and substance reasonably satisfactory to such underwriters. Further, in
addition to and not in limitation of the Partnership's obligation under Section
7.7, the Partnership shall, to the fullest extent, permitted by law, indemnify
and hold harmless the Holder, its officers, directors and each Person who
controls the Holder (within the meaning of the Securities Act) and any agent
thereof (collectively, "Indemnified Persons") against any losses, claims,
demands, actions, causes of action, assessments, damages, liabilities (joint or
several), costs and expenses (including interest, penalties and reasonable
attorneys' fees and disbursements), resulting to, imposed upon, or incurred by
the Indemnified Persons, directly or indirectly, under the Securities Act or
otherwise (hereinafter referred to in this Section 7.12(c) as a "claim" and in
the plural as "claims") based upon, arising out of or resulting from any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which any Partnership Securities were registered
under the Securities Act or any state securities or Blue Sky laws, in any
preliminary prospectus (if used prior to the effective date of such registration
statement), or in any summary or final prospectus or in any amendment or
supplement thereto (if used during the period the Partnership is required to
keep the registration statement current), or arising out of, based upon or
resulting from the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein
not misleading; provided, however, that the Partnership shall not be liable to
any Indemnified Person to the extent that any such claim arises out of, is based
upon or results from an untrue statement or alleged untrue statement or omission
or alleged omission made in such registration statement, such preliminary,
summary or final prospectus or such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Partnership by or on
behalf of such Indemnified Person specifically for use in the preparation
thereof.

            (d) The provisions of Section 7.12(a) and 7.12(b) shall continue to
be applicable with respect to the General Partner (and any of the General
Partner's Affiliates) after it ceases to be a Partner of the Partnership, during
a period of two years subsequent to the effective date of such cessation and for
so long thereafter as is required for the Holder to sell all of the Partnership
Securities with respect to which it has requested during such two-year period


                                      -69-
<PAGE>


inclusion in a registration statement otherwise filed or that a registration
statement be filed; provided, however, that the Partnership shall not be
required to file successive registration statements covering the same
Partnership Securities for which registration was demanded during such two-year
period. The provisions of Section 7.12(c) shall continue in effect thereafter.

            (e)  Any request to register Partnership Securities pursuant to
this Section 7.12 shall (i) specify the Partnership Securities intended to be
offered and sold by the Person making the request, (ii) express such Person's
present intent to offer such shares for distribution, (iii) describe the nature
or method of the proposed offer and sale of Partnership Securities, and (iv)
contain the undertaking of such Person to provide all such information and
materials and take all action as may be required in order to permit the
Partnership to comply with all applicable requirements in connection with the
registration of such Partnership Securities.

Section 7.13.  Reliance by Third Parties.

        Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner and any officer of the General Partner authorized by the General Partner
to act on behalf of and in the name of the Partnership has full power and
authority to encumber, sell or otherwise use in any manner any and all assets of
the Partnership and to enter into any authorized contracts on behalf of the
Partnership, and such Person shall be entitled to deal with the General Partner
or any such officer as if it were the Partnership's sole party in interest, both
legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies that may be available against such Person to contest,
negate or disaffirm any action of the General Partner or any such officer in
connection with any such dealing. In no event shall any Person dealing with the
General Partner or any such officer or its representatives be obligated to
ascertain that the terms of the Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
any such officer or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner or
its representatives shall be conclusive evidence in favor of any and every
Person relying thereon or claiming thereunder that (a) at the time of the
execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering
such certificate, document or instrument was duly authorized and empowered to do
so for and on behalf of the Partnership and (c) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.

                                  ARTICLE VIII.
                     BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 8.1.   Records and Accounting.

        The General Partner shall keep or cause to be kept at the principal
office of the Partnership appropriate books and records with respect to the
Partnership's business, including all books and records necessary to provide to
the Limited Partners any information required to be provided pursuant to Section
3.4(a). Any books and records maintained by or on behalf of the Partnership in
the regular course of its business, including the record of the Record Holders
and


                                      -70-
<PAGE>


Assignees of Units or other Partnership Securities, books of account and records
of Partnership proceedings, may be kept on, or be in the form of, computer
disks, hard drives, punch cards, magnetic tape, photographs, micrographics or
any other information storage device; provided, that the books and records so
maintained are convertible into clearly legible written form within a reasonable
period of time. The books of the Partnership shall be maintained, for financial
reporting purposes, on an accrual basis in accordance with U.S. GAAP.

Section 8.2.   Fiscal Year.

        The fiscal year of the Partnership shall be a fiscal year ending
December 31.

Section 8.3.   Reports.

            (a) As soon as practicable, but in no event later than 120 days
after the close of each fiscal year of the Partnership, the General Partner
shall cause to be mailed or furnished to each Record Holder of a Unit as of a
date selected by the General Partner in its discretion, an annual report
containing financial statements of the Partnership for such fiscal year of the
Partnership, presented in accordance with U.S. GAAP, including a balance sheet
and statements of operations, Partnership equity and cash flows, such statements
to be audited by a firm of independent public accountants selected by the
General Partner.

            (b) As soon as practicable, but in no event later than 90 days after
the close of each Quarter except the last Quarter of each fiscal year, the
General Partner shall cause to be mailed or furnished to each Record Holder of a
Unit, as of a date selected by the General Partner in its discretion, a report
containing unaudited financial statements of the Partnership and such other
information as may be required by applicable law, regulation or rule of any
National Securities Exchange on which the Units are listed for trading, or as
the General Partner determines to be necessary or appropriate.

                                   ARTICLE IX.
                                   TAX MATTERS

Section 9.1.   Tax Returns and Information.

        The Partnership shall timely file all returns of the Partnership that
are required for federal, state and local income tax purposes on the basis of
the accrual method and a taxable year ending on December 31. The tax information
reasonably required by Record Holders for federal and state income tax reporting
purposes with respect to a taxable year shall be furnished to them within 90
days of the close of the calendar year in which the Partnership's taxable year
ends. The classification, realization and recognition of income, gain, losses
and deductions and other items shall be on the accrual method of accounting for
federal income tax purposes.

Section 9.2. Tax Elections.

            (a) The Partnership shall make the election under Section 754 of the
Code in accordance with applicable regulations thereunder, subject to the
reservation of the right to seek to revoke any such election upon the General
Partner's determination that such revocation is in the best interests of the
Limited Partners. Notwithstanding any other provision herein contained,


                                      -71-
<PAGE>



for the purposes of computing the adjustments under Section 743(b) of the Code,
the General Partner shall be authorized (but not required) to adopt a convention
whereby the price paid by a transferee of a Limited Partner Interest will be
deemed to be the lowest quoted closing price of the Limited Partner Interests on
any National Securities Exchange on which such Limited Partner Interests are
traded during the calendar month in which such transfer is deemed to occur
pursuant to Section 6.2(g) without regard to the actual price paid by such
transferee.

            (b) The Partnership shall elect to deduct expenses incurred in
organizing the Partnership ratably over a sixty-month period as provided in
Section 709 of the Code.

            (c) Except as otherwise provided herein, the General Partner shall
determine whether the Partnership should make any other elections permitted by
the Code.

Section 9.3.   Tax Controversies.

        Subject to the provisions hereof, the General Partner is designated as
the Tax Matters Partner (as defined in the Code) and is authorized and required
to represent the Partnership (at the Partnership's expense) in connection with
all examinations of the Partnership's affairs by tax authorities, including
resulting administrative and judicial proceedings, and to expend Partnership
funds for professional services and costs associated therewith. Each Partner
agrees to cooperate with the General Partner and to do or refrain from doing any
or all things reasonably required by the General Partner to conduct such
proceedings.

Section 9.4. Withholding.

        Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines in its discretion to
be necessary or appropriate to cause the Partnership and the Operating
Partnership to comply with any withholding requirements established under the
Code or any other federal, state or local law including, without limitation,
pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that
the Partnership is required or elects to withhold and pay over to any taxing
authority any amount resulting from the allocation or distribution of income to
any Partner or Assignee (including, without limitation, by reason of Section
1446 of the Code), the amount withheld may at the discretion of the General
Partner be treated by the Partnership as a distribution of cash pursuant to
Section 6.3 in the amount of such withholding from such Partner.

                                   ARTICLE X.
                              ADMISSION OF PARTNERS

Section 10.1.  Admission of Initial Limited Partners.

        Upon the issuance by the Partnership of Common Units, Subordinated Units
and Incentive Distribution Rights to Williams Natural Gas Liquids, Inc.,
Williams Energy Services and the Underwriters as described in Section 5.3 in
connection with the Initial Offering and the execution by each party of a
Transfer Application, the General Partner shall admit such parties to the
Partnership as Initial Limited Partners in respect of the Common Units purchased
by them.


                                      -72-
<PAGE>


Section 10.2.  Admission of Substituted Limited Partner.

        By transfer of a Limited Partner Interest in accordance with Article IV,
the transferor shall be deemed to have given the transferee the right to seek
admission as a Substituted Limited Partner subject to the conditions of, and in
the manner permitted under, this Agreement. A transferor of a Certificate
representing a Limited Partner Interest shall, however, only have the authority
to convey to a purchaser or other transferee who does not execute and deliver a
Transfer Application (a) the right to negotiate such Certificate to a purchaser
or other transferee and (b) the right to transfer the right to request admission
as a Substituted Limited Partner to such purchaser or other transferee in
respect of the transferred Limited Partner Interests. Each transferee of a
Limited Partner Interest (including any nominee holder or an agent acquiring
such Limited Partner Interest for the account of another Person) who executes
and delivers a Transfer Application shall, by virtue of such execution and
delivery, be an Assignee and be deemed to have applied to become a Substituted
Limited Partner with respect to the Limited Partner Interests so transferred to
such Person. Such Assignee shall become a Substituted Limited Partner (x) at
such time as the General Partner consents thereto, which consent may be given or
withheld in the General Partner's discretion, and (y) when any such admission is
shown on the books and records of the Partnership. If such consent is withheld,
such transferee shall be an Assignee. An Assignee shall have an interest in the
Partnership equivalent to that of a Limited Partner with respect to allocations
and distributions, including liquidating distributions, of the Partnership. With
respect to voting rights attributable to Limited Partner Interests that are held
by Assignees, the General Partner shall be deemed to be the Limited Partner with
respect thereto and shall, in exercising the voting rights in respect of such
Limited Partner Interests on any matter, vote such Limited Partner Interests at
the written direction of the Assignee who is the Record Holder of such Limited
Partner Interests. If no such written direction is received, such Limited
Partner Interests will not be voted. An Assignee shall have no other rights of a
Limited Partner.

Section 10.3.  Admission of Successor General Partner.

        A successor General Partner approved pursuant to Section 11.1 or 11.2 or
the transferee of or successor to all of the General Partner Interest pursuant
to Section 4.6 who is proposed to be admitted as a successor General Partner
shall be admitted to the Partnership as the General Partner, effective
immediately prior to the withdrawal or removal of the predecessor or
transferring General Partner pursuant to Section 11.1 or 11.2 or the transfer of
the General Partner Interest pursuant to Section 4.6; provided, however, that no
such successor shall be admitted to the Partnership until compliance with the
terms of Section 4.6 has occurred and such successor has executed and delivered
such other documents or instruments as may be required to effect such admission.
Any such successor shall, subject to the terms hereof, carry on the business of
the members of the Partnership Group without dissolution.

Section 10.4.  Admission of Additional Limited Partners.

            (a) A Person (other than the General Partner, an Initial Limited
Partner or a Substituted Limited Partner) who makes a Capital Contribution to
the Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the


                                      -73-
<PAGE>

General Partner of all of the terms and conditions of this Agreement, including
the power of attorney granted in Section 2.6, and (ii) such other documents or
instruments as may be required in the discretion of the General Partner to
effect such Person's admission as an Additional Limited Partner.

            (b) Notwithstanding anything to the contrary in this Section 10.4,
no Person shall be admitted as an Additional Limited Partner without the consent
of the General Partner, which consent may be given or withheld in the General
Partner's discretion. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such Person is
recorded as such in the books and records of the Partnership, following the
consent of the General. Partner to such admission.

Section 10.5.  Amendment of Agreement and Certificate of Limited Partnership.

        To effect the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Delaware Act to
amend the records of the Partnership to reflect such admission and, if
necessary, to prepare as soon as practicable an amendment to this Agreement and,
if required by law, the General Partner shall prepare and file an amendment to
the Certificate of Limited Partnership, and the General Partner may for this
purpose, among others, exercise the power of attorney granted pursuant to
Section 2.6.

                                   ARTICLE XI.
                        WITHDRAWAL OR REMOVAL OF PARTNERS

Section 11.1.  Withdrawal of the General Partner.

            (a) The General Partner shall be deemed to have withdrawn from the
Partnership upon the occurrence of any one of the following events (each such
event herein referred to as an "Event of Withdrawal");

            (i) The General Partner voluntarily withdraws from the Partnership
        by giving written notice to the other Partners (and it shall be deemed
        that the General Partner has withdrawn pursuant to this Section
        11.1(a)(i) if the General Partner voluntarily withdraws as general
        partner of the Operating Partnership);

            (ii) The General Partner transfers all of its rights as General
        Partner pursuant to Section 4.6;

            (iii) The General Partner is removed pursuant to Section 11.2;

            (iv) The General Partner (A) makes a general assignment for the
        benefit of creditors; (B) files a voluntary bankruptcy petition for
        relief under Chapter 7 of the United States Bankruptcy Code; (C) files a
        petition or answer seeking for itself a liquidation, dissolution or
        similar relief (but not a reorganization) under any law; (D) files an
        answer or other pleading admitting or failing to contest the material
        allegations of a petition filed against the General Partner in a
        proceeding of the type described in clauses (A)-(C) of this Section
        11.1(a)(iv); or (E) seeks, consents to or acquiesces in the


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        appointment of a trustee (but not a debtor-in-possession), receiver or
        liquidator of the General Partner or of all or any substantial part of
        its properties;

            (v) A final and non-appealable order of relief under Chapter 7 of
        the United States Bankruptcy Code is entered by a court with appropriate
        jurisdiction pursuant to a voluntary or involuntary petition by or
        against the General Partner; or

            (vi) (A) in the event the General Partner is a corporation, a
        certificate of dissolution or its equivalent is filed for the General
        Partner, or 90 days expire after the date of notice to the General
        Partner of revocation of its charter without a reinstatement of its
        charter, under the laws of its state of incorporation; (B) in the event
        the General Partner is a partnership or a limited liability company, the
        dissolution and commencement of winding up of the General Partner; (C)
        in the event the General Partner is acting in such capacity by virtue of
        being a trustee of a trust, the termination of the trust; (D) in the
        event the General Partner is a natural person, his death or adjudication
        of incompetency; and (E) otherwise in the event of the termination of
        the General Partner.

        If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or
(vi)(A), (B), (C) or (E) occurs, the withdrawing General Partner shall give
notice to the Limited Partners within 30 days after such occurrence. The
Partners hereby agree that only the Events of Withdrawal described in this
Section 11.1 shall result in the withdrawal of the General Partner from the
Partnership.

            (b) Withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal shall not constitute a breach of this
Agreement under the following circumstances: (i) at any time during the period
beginning on the Closing Date and ending at 12:00 midnight, Eastern Standard
Time, on December 31, 2010, the General Partner voluntarily withdraws by giving
at least 90 days' advance notice of its intention to withdraw to the Limited
Partners; provided that prior to the effective date of such withdrawal, the
withdrawal is approved by Unitholders holding at least a majority of the
Outstanding Common Units (excluding Common Units held by the General Partner and
its Affiliates) and the General Partner delivers to the Partnership an Opinion
of Counsel ("Withdrawal Opinion of Counsel") that such withdrawal (following the
selection of the successor General Partner) would not result in the loss of the
limited liability of any Limited Partner or of a limited partner of the
Operating Partnership or cause the Partnership or the Operating Partnership to
be treated as an association taxable as a corporation or otherwise to be taxed
as an entity for federal income tax purposes (to the extent not previously
treated as such); (ii) at any time after 12:00 midnight, Eastern Standard Time,
on December 31, 2010, the General Partner voluntarily withdraws by giving at
least 90 days' advance notice to the Unitholders, such withdrawal to take effect
on the date specified in such notice; (iii) at any time that the General Partner
ceases to be the General Partner pursuant to Section 11.1(a)(ii) or is removed
pursuant to Section 11.2; or (iv) notwithstanding clause (i) of this sentence,
at any time that the General Partner voluntarily withdraws by giving at least 90
days' advance notice of its intention to withdraw to the Limited Partners, such
withdrawal to take effect on the date specified in the notice, if at the time
such notice is given one Person and its Affiliates (other than the General
Partner and its Affiliates) own beneficially or of record or control at least
50% of the Outstanding Units. The withdrawal of the General Partner from the
Partnership upon the occurrence of an Event of Withdrawal shall also constitute
the withdrawal


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of the General Partner as general partner or managing member, as the case may
be, of the other Group Members. If the General Partner gives a notice of
withdrawal pursuant to Section 11.1(a)(i), the holders of a Unit Majority, may,
prior to the effective date of such withdrawal, elect a successor General
Partner. The Person so elected as successor General Partner shall automatically
become the successor general partner or managing member, as the case may be, of
the other Group Members of which the General Partner is a general partner or a
managing member. If, prior to the effective date of the General Partner's
withdrawal, a successor is not selected by the Unitholders as provided herein or
the Partnership does not receive a Withdrawal Opinion of Counsel, the
Partnership shall be dissolved in accordance with Section 12.1. Any successor
General Partner elected in accordance with the terms of this Section 11.1 shall
be subject to the provisions of Section 10.3.

Section 11.2.  Removal of the General Partner.

        The General Partner may be removed if such removal is approved by the
Unitholders holding at least 66 2/3% of the Outstanding Units (including Units
held by the General Partner and its Affiliates). Any such action by such holders
for removal of the General Partner must also provide for the election of a
successor General Partner by the Unitholders holding a Unit Majority (including
Units held by the General Partner and its Affiliates). Such removal shall be
effective immediately following the admission of a successor General Partner
pursuant to Section 10.3. The removal of the General Partner shall also
automatically constitute the removal of the General Partner as general partner
or managing member, as the case may be, of the other Group Members of which the
General Partner is a general partner or a managing member. If a Person is
elected as a successor General Partner in accordance with the terms of this
Section 11.2, such Person shall, upon admission pursuant to Section 10.3,
automatically become a successor general partner or managing member, as the case
may be, of the other Group Members of which the General Partner is a general
partner or a managing member. The right of the holders of Outstanding Units to
remove the General Partner shall not exist or be exercised unless the
Partnership has received an opinion opining as to the matters covered by a
Withdrawal Opinion of Counsel. Any successor General Partner elected in
accordance with the terms of this Section 11.2 shall be subject to the
provisions of Section 10.3.

Section 11.3.  Interest of Departing Partner and Successor General Partner.

            (a) In the event of (i) withdrawal of the General Partner under
circumstances where such withdrawal does not violate this Agreement or (ii)
removal of the General Partner by the holders of Outstanding Units under
circumstances where Cause does not exist, if a successor General Partner is
elected in accordance with the terms of Section 11.1 or 11.2, the Departing
Partner shall have the option exercisable prior to the effective date of the
departure of such Departing Partner to require its successor to purchase its
General Partner Interest and its general partner interest (or equivalent
interest) in the other Group Members and all of its Incentive Distribution
Rights (collectively, the "Combined Interest") in exchange for an amount in cash
equal to the fair market value of such Combined Interest, such amount to be
determined and payable as of the effective date of its departure. If the General
Partner is removed by the Unitholders under circumstances where Cause exists or
if the General Partner withdraws under circumstances where such withdrawal
violates this Agreement or the Operating Partnership Agreement, and if a
successor General Partner is elected in accordance with the terms of


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Section 11.1 or 11.2, such successor shall have the option, exercisable prior to
the effective date of the departure of such Departing Partner, to purchase the
Combined Interest for such fair market value of such Combined Interest. In
either event, the Departing Partner shall be entitled to receive all
reimbursements due such Departing Partner pursuant to Section 7.4, including any
employee-related liabilities (including severance liabilities), incurred in
connection with the termination of any employees employed by the General Partner
for the benefit of the Partnership or the other Group Members.

        For purposes of this Section 11.3(a), the fair market value of the
Combined Interest shall be determined by agreement between the Departing Partner
and its successor or, failing agreement within 30 days after the effective date
of such Departing Partner's departure, by an independent investment banking firm
or other independent expert selected by the Departing Partner and its successor,
which, in turn, may rely on other experts, and the determination of which shall
be conclusive as to such matter. If such parties cannot agree upon one
independent investment banking firm or other independent expert within 45 days
after the effective date of such departure, then the Departing Partner shall
designate an independent investment banking firm or other independent expert,
the Departing Partner's successor shall designate an independent investment
banking firm or other independent expert, and such firms or experts shall
mutually select a third independent investment banking firm or independent
expert, which third independent investment banking firm or other independent
expert shall determine the fair market value of the Combined Interest. In making
its determination, such third independent investment banking firm or other
independent expert may consider the then current trading price of Units on any
National Securities Exchange on which Units are then listed, the value of the
Partnership's assets, the rights and obligations of the Departing Partner and
other factors it may deem relevant.

            (b) If the Combined Interest is not purchased in the manner set
forth in Section 11.3(a), the Departing Partner (or its transferee) shall become
a Limited Partner and its Combined Interest shall be converted into Common Units
pursuant to a valuation made by an investment banking firm or other independent
expert selected pursuant to Section 11.3(a), without reduction in such
Partnership Interest (but subject to proportionate dilution by reason of the
admission of its successor). Any successor General Partner shall indemnify the
Departing Partner (or its transferee) as to all debts and liabilities of the
Partnership arising on or after the date on which the Departing Partner (or its
transferee) becomes a Limited Partner. For purposes of this Agreement,
conversion of the Combined Interest to Common Units will be characterized as if
the General Partner (or its transferee) contributed its Combined Interest to the
Partnership in exchange for the newly issued Common Units.

            (c) If a successor General Partner is elected in accordance with the
terms of Section 11.1 or 11.2 and the option described in Section 11.3(a) is not
exercised by the party entitled to do so, the successor General Partner shall,
at the effective date of its admission to the Partnership, contribute to the
Partnership cash in the amount equal to 1/99th of the Net Agreed Value of the
Partnership's assets on such date. In such event, such successor General Partner
shall, subject to the following sentence, be entitled to 1% of all Partnership
allocations and distributions. The successor General Partner shall cause this
Agreement to be amended to reflect that, from and after the date of such
successor General Partner's admission, the successor General Partner's interest
in all Partnership distributions and allocations shall be 1%.


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Section 11.4. Termination of Subordination Period, Conversion of Subordinated
Units and Extinguishment of Cumulative Common Unit Arrearages.

        Notwithstanding any provision of this Agreement, if the General Partner
is removed as general partner of the Partnership under circumstances where Cause
does not exist and Units held by the General Partner and its Affiliates are not
voted in favor of such removal, (i) the Subordination Period will end and all
Outstanding Subordinated Units will immediately and automatically convert into
Common Units on a one-for-one basis and (ii) all Cumulative Common Unit
Arrearages on the Common Units will be extinguished.

Section 11.5.  Withdrawal of Limited Partners.

        No Limited Partner shall have any right to withdraw from the
Partnership; provided, however, that when a transferee of a Limited Partner's
Limited Partner Interest becomes a Record Holder of the Limited Partner Interest
so transferred, such transferring Limited Partner shall cease to be a Limited
Partner with respect to the Limited Partner Interest so transferred.

                                  ARTICLE XII.
                           DISSOLUTION AND LIQUIDATION

Section 12.1.  Dissolution.

        The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the removal or withdrawal of the General Partner, if a successor General Partner
is elected pursuant to Section 11.1 or 11.2, the Partnership shall not be
dissolved and such successor General Partner shall continue the business of the
Partnership. The Partnership shall dissolve, and (subject to Section 12.2) its
affairs shall be wound up, upon:

            (a) an Event of Withdrawal of the General Partner as provided in
Section 11.1(a) (other than Section 11.1(a)(ii)), unless a successor is elected
and an Opinion of Counsel is received as provided in Section 11.1(b) or 11.2 and
such successor is admitted to the Partnership pursuant to Section 10.3;

            (b) an election to dissolve the Partnership by the General Partner
that is approved by the holders of a Unit Majority;

            (c) the entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Delaware Act; or

            (d) the sale of all or substantially all of the assets and
properties of the Partnership Group.

Section 12.2. Continuation of the Business of the Partnership After Dissolution.

        Upon (a) dissolution of the Partnership following an Event of Withdrawal
caused by the withdrawal or removal of the General Partner as provided in
Section 11.1(a)(i) or (iii) and the failure of the Partners to select a
successor to such Departing Partner pursuant to Section 11.1 or


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11.2, then within 90 days thereafter, or (b) dissolution of the Partnership upon
an event constituting an Event of Withdrawal as defined in Section 11.1(a)(iv),
(v) or (vi), then, to the maximum extent permitted by law, within 180 days
thereafter, the holders of a Unit Majority may elect to reconstitute the
Partnership and continue its business on the same terms and conditions set forth
in this Agreement by forming a new limited partnership on terms identical to
those set forth in this Agreement and having as the successor general partner a
Person approved by the holders of a Unit Majority. Unless such an election is
made within the applicable time period as set forth above, the Partnership shall
conduct only activities necessary to wind up its affairs. If such an election is
so made, then:

            (i) the reconstituted Partnership shall continue unless earlier
        dissolved in accordance with this Article XII;

            (ii) if the successor General Partner is not the former General
        Partner, then the interest of the former General Partner shall be
        treated in the manner provided in Section 11.3; and

            (iii) all necessary steps shall be taken to cancel this Agreement
        and the Certificate of Limited Partnership and to enter into and, as
        necessary, to file a new partnership agreement and certificate of
        limited partnership, and the successor general partner may for this
        purpose exercise the powers of attorney granted the General Partner
        pursuant to Section 2.6; provided, that the right of the holders of a
        Unit Majority to approve a successor General Partner and to reconstitute
        and to continue the business of the Partnership shall not exist and may
        not be exercised unless the Partnership has received an Opinion of
        Counsel that (x) the exercise of the right would not result in the loss
        of limited liability of any Limited Partner and (y) neither the
        Partnership, the reconstituted limited partnership nor the Operating
        Partnership would be treated as an association taxable as a corporation
        or otherwise be taxable as an entity for federal income tax purposes
        upon the exercise of such right to continue.

Section 12.3. Liquidator.

        Upon dissolution of the Partnership, unless the Partnership is continued
under an election to reconstitute and continue the Partnership pursuant to
Section 12.2, the General Partner shall select one or more Persons to act as
Liquidator. The Liquidator (if other than the General Partner) shall be entitled
to receive such compensation for its services as may be approved by holders of
at least a majority of the Outstanding Common Units and Subordinated Units
voting as a single class. The Liquidator (if other than the General Partner)
shall agree not to resign at any time without 15 days' prior notice and may be
removed at any time, with or without cause, by notice of removal approved by
holders of at least a majority of the Outstanding Common Units and Subordinated
Units voting as a single class. Upon dissolution, removal or resignation of the
Liquidator, a successor and substitute Liquidator (who shall have and succeed to
all rights, powers and duties of the original Liquidator) shall within 30 days
thereafter be approved by holders of at least a majority of the Outstanding
Common Units and Subordinated Units voting as a single class. The right to
approve a successor or substitute Liquidator in the manner provided herein shall
be deemed to refer also to any such successor or substitute Liquidator approved
in the manner herein provided. Except as expressly provided in this Article XII,
the


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Liquidator approved in the manner provided herein shall have and may exercise,
without further authorization or consent of any of the parties hereto, all of
the powers conferred upon the General Partner under the terms of this Agreement
(but subject to all of the applicable limitations, contractual and otherwise,
upon the exercise of such powers, other than the limitation on sale set forth in
Section 7.3(b)) to the extent necessary or desirable in the good faith judgment
of the Liquidator to carry out the duties and functions of the Liquidator
hereunder for and during such period of time as shall be reasonably required in
the good faith judgment of the Liquidator to complete the winding up and
liquidation of the Partnership as provided for herein.

Section 12.4.  Liquidation.

        The Liquidator shall proceed to dispose of the assets of the
Partnership, discharge its liabilities, and otherwise wind up its affairs in
such manner and over such period as the Liquidator determines to be in the best
interest of the Partners, subject to Section 17-804 of the Delaware Act and the
following:

            (a) Disposition of Assets. The assets may be disposed of by public
or private sale or by distribution in kind to one or more Partners on such terms
as the Liquidator and such Partner or Partners may agree. If any property is
distributed in kind, the Partner receiving the property shall be deemed for
purposes of Section 12.4(c) to have received cash equal to its fair market
value; and contemporaneously therewith, appropriate cash distributions must be
made to the other Partners. The Liquidator may, in its absolute discretion,
defer liquidation or distribution of the Partnership's assets for a reasonable
time if it determines that an immediate sale or distribution of all or some of
the Partnership's assets would be impractical or would cause undue loss to the
Partners. The Liquidator may, in its absolute discretion, distribute the
Partnership's assets, in whole or in part, in kind if it determines that a sale
would be impractical or would cause undue loss to the Partners.

            (b) Discharge of Liabilities. Liabilities of the Partnership include
amounts owed to the Liquidator as compensation for serving in such capacity
(subject to the terms of Section 12.3) and amounts to Partners otherwise than in
respect of their distribution rights under Article VI. With respect to any
liability that is contingent, conditional or unmatured or is otherwise not yet
due and payable, the Liquidator shall either settle such claim for such amount
as it thinks appropriate or establish a reserve of cash or other assets to
provide for its payment. When paid, any unused portion of the reserve shall be
distributed as additional liquidation proceeds.

            (c) Liquidation Distributions. All property and all cash in excess
of that required to discharge liabilities as provided in Section 12.4(b) shall
be distributed to the Partners in accordance with, and to the extent of, the
positive balances in their respective Capital Accounts, as determined after
taking into account all Capital Account adjustments (other than those made by
reason of distributions pursuant to this Section 12.4(c)) for the taxable year
of the Partnership during which the liquidation of the Partnership occurs (with
such date of occurrence being determined pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such
taxable year (or, if later, within 90 days after said date of such occurrence).


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Section 12.5. Cancellation of Certificate of Limited Partnership.

        Upon the completion of the distribution of Partnership cash and property
as provided in Section 12.4 in connection with the liquidation of the
Partnership, the Partnership shall be terminated and the Certificate of Limited
Partnership and all qualifications of the Partnership as a foreign limited
partnership in jurisdictions other than the State of Delaware shall be canceled
and such other actions as may be necessary to terminate the Partnership shall be
taken.

Section 12.6.  Return of Contributions.

        The General Partner shall not be personally liable for, and shall have
no obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate, the return of the Capital Contributions of the Limited
Partners or Unitholders, or any portion thereof, it being expressly understood
that any such return shall be made solely from Partnership assets.

Section 12.7.  Waiver of Partition.

        To the maximum extent permitted by law, each Partner hereby waives any
right to partition of the Partnership property.

Section 12.8.  Capital Account Restoration.

        No Limited Partner shall have any obligation to restore any negative
balance in its Capital Account upon liquidation of the Partnership. The General
Partner shall be obligated to restore any negative balance in its Capital
Account upon liquidation of its interest in the Partnership by the end of the
taxable year of the Partnership during which such liquidation occurs, or, if
later, within 90 days after the date of such liquidation.

                                  ARTICLE XIII.
            AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

Section 13.1.  Amendment to be Adopted Solely by the General Partner.

        Each Partner agrees that the General Partner, without the approval of
any Partner or Assignee, may amend any provision of this Agreement and execute,
swear to, acknowledge, deliver, file and record whatever documents may be
required in connection therewith, to reflect:

            (a) a change in the name of the Partnership, the location of the
principal place of business of the Partnership, the registered agent of the
Partnership or the registered office of the Partnership;

            (b) admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;

            (c) a change that, in the sole discretion of the General Partner, is
necessary or advisable to qualify or continue the qualification of the
Partnership as a limited partnership or a partnership in which the Limited
Partners have limited liability under the laws of any state or to


                                      -81-
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ensure that the Partnership and the Operating Partnership will not be treated as
an association taxable as a corporation or otherwise taxed as an entity for
federal income tax purposes;

            (d) a change that, in the discretion of the General Partner, (i)
does not adversely affect the Limited Partners (including any particular class
of Partnership Interests as compared to other classes of Partnership Interests)
in any material respect, (ii) is necessary or advisable to (A) satisfy any
requirements, conditions or guidelines contained in any opinion, directive,
order, ruling or regulation of any federal or state agency or judicial authority
or contained in any federal or state statute (including the Delaware Act) or (B)
facilitate the trading of the Limited Partner Interests (including the division
of any class or classes of Outstanding Limited Partner Interests into different
classes to facilitate uniformity of tax consequences within such classes of
Limited Partner Interests) or comply with any rule, regulation, guideline or
requirement of any National Securities Exchange on which the Limited Partner
Interests are or will be listed for trading, compliance with any of which the
General Partner determines in its discretion to be in the best interests of the
Partnership and the Limited Partners, (iii) is necessary or advisable in
connection with action taken by the General Partner pursuant to Section 5.10 or
(iv) is required to effect the intent expressed in the Registration Statement or
the intent of the provisions of this Agreement or is otherwise contemplated by
this Agreement;

            (e) a change in the fiscal year or taxable year of the Partnership
and any changes that, in the discretion of the General Partner, are necessary or
advisable as a result of a change in the fiscal year or taxable year of the
Partnership including, if the General Partner shall so determine, a change in
the definition of "Quarter" and the dates on which distributions are to be made
by the Partnership;

            (f) an amendment that is necessary, in the Opinion of Counsel, to
prevent the Partnership, or the General Partner or its directors, officers,
trustees or agents from in any manner being subjected to the provisions of the
Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940,
as amended, or "plan asset" regulations adopted under the Employee Retirement
Income Security Act of 1974, as amended, regardless of whether such are
substantially similar to plan asset regulations currently applied or proposed by
the United States Department of Labor;

            (g) subject to the terms of Section 5.7, an amendment that, in the
discretion of the General Partner, is necessary or advisable in connection with
the authorization of issuance of any class or series of Partnership Securities
pursuant to Section 5.6;

            (h) any amendment expressly permitted in this Agreement to be made
by the General Partner acting alone;

            (i) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 14.3;

            (j) an amendment that, in the discretion of the General Partner, is
necessary or advisable to reflect, account for and deal with appropriately the
formation by the Partnership of, or investment by the Partnership in, any
corporation, partnership, joint venture, limited


                                      -82-
<PAGE>


liability company or other entity, in connection with the conduct by the
Partnership of activities permitted by the terms of Section 2.4;

            (k) a merger or conveyance pursuant to Section 14.3(d); or

            (l) any other amendments substantially similar to the foregoing.

Section 13.2.  Amendment Procedures.

        Except as provided in Sections 13.1 and 13.3, all amendments to this
Agreement shall be made in accordance with the following requirements.
Amendments to this Agreement may be proposed only by or with the consent of the
General Partner which consent may be given or withheld in its sole discretion. A
proposed amendment shall be effective upon its approval by the holders of a Unit
Majority, unless a greater or different percentage is required under this
Agreement or by Delaware law. Each proposed amendment that requires the approval
of the holders of a specified percentage of Outstanding Units shall be set forth
in a writing that contains the text of the proposed amendment. If such an
amendment is proposed, the General Partner shall seek the written approval of
the requisite percentage of Outstanding Units or call a meeting of the
Unitholders to consider and vote on such proposed amendment. The General Partner
shall notify all Record Holders upon final adoption of any such proposed
amendments.

Section 13.3. Amendment Requirements.

            (a) Notwithstanding the provisions of Sections 13.1 and 13.2, no
provision of this Agreement that establishes a percentage of Outstanding Units
(including Units deemed owned by the General Partner) required to take any
action shall be amended, altered, changed, repealed or rescinded in any respect
that would have the effect of reducing such voting percentage unless such
amendment is approved by the written consent or the affirmative vote of holders
of Outstanding Units whose aggregate Outstanding Units constitute not less than
the voting requirement sought to be reduced.

            (b) Notwithstanding the provisions of Sections 13.1 and 13.2, no
amendment to this Agreement may (i) enlarge the obligations of any Limited
Partner without its consent, unless such shall be deemed to have occurred as a
result of an amendment approved pursuant to Section 13.3(c), (ii) enlarge the
obligations of, restrict in any way any action by or rights of, or reduce in any
way the amounts distributable, reimbursable or otherwise payable to, the General
Partner or any of its Affiliates without its consent, which consent may be given
or withheld in its sole discretion, (iii) change Section 12.1(b), or (iv) change
the term of the Partnership or, except as set forth in Section 12.1(b), give any
Person the right to dissolve the Partnership.

            (c) Except as provided in Section 14.3, and except as otherwise
provided, and without limitation of the General Partner's authority to adopt
amendments to this Agreement without the approval of any Partners or Assignees
as contemplated in Section 13.1, any amendment that would have a material
adverse effect on the rights or preferences of any class of Partnership
Interests in relation to other classes of Partnership Interests must be approved
by the holders of not less than a majority of the Outstanding Partnership
Interests of the class affected.


                                      -83-
<PAGE>


            (d) Notwithstanding any other provision of this Agreement, except
for amendments pursuant to Section 13.1 and except as otherwise provided by
Section 14.3(b), no amendments shall become effective without the approval of
the holders of at least 90% of the Outstanding Common Units and Subordinated
Units voting as a single class unless the Partnership obtains an Opinion of
Counsel to the effect that such amendment will not affect the limited liability
of any Limited Partner under applicable law.

            (e) Except as provided in Section 13.1, this Section 13.3 shall only
be amended with the approval of the holders of at least 90% of the Outstanding
Units.

Section 13.4.  Special Meetings.

        All acts of Limited Partners to be taken pursuant to this Agreement
shall be taken in the manner provided in this Article XIII. Special meetings of
the Limited Partners may be called by the General Partner or by Limited Partners
owning 20% or more of the Outstanding Limited Partner Interests of the class or
classes for which a meeting is proposed. Limited Partners shall call a special
meeting by delivering to the General Partner one or more requests in writing
stating that the signing Limited Partners wish to call a special meeting and
indicating the general or specific purposes for which the special meeting is to
be called. Within 60 days after receipt of such a call from Limited Partners or
within such greater time as may be reasonably necessary for the Partnership to
comply with any statutes, rules, regulations, listing, agreements or similar
requirements governing the holding of a meeting or the solicitation of proxies
for use at such a meeting, the General Partner shall send a notice of the
meeting to the Limited Partners either directly or indirectly through the
Transfer Agent. A meeting shall be held at a time and place determined by the
General Partner on a date not less than 10 days nor more than 60 days after the
mailing of notice of the meeting. Limited Partners shall not vote on matters
that would cause the Limited Partners to be deemed to be taking part in the
management and control of the business and affairs of the Partnership so as to
jeopardize the Limited Partners' limited liability under the Delaware Act or the
law of any other state in which the Partnership is qualified to do business.

Section 13.5.  Notice of a Meeting.

        Notice of a meeting called pursuant to Section 13.4 shall be given to
the Record Holders of the class or classes of Limited Partner Interests for
which a meeting is proposed in writing by mail or other means of written
communication in accordance with Section 16.1. The notice shall be deemed to
have been given at the time when deposited in the mail or sent by other means of
written communication.

Section 13.6.  Record Date.

        For purposes of determining the Limited Partners entitled to notice of
or to vote at a meeting of the Limited Partners or to give approvals without a
meeting as provided in Section 13.11 the General Partner may set a Record Date,
which shall not be less than 10 nor more than 60 days before (a) the date of the
meeting (unless such requirement conflicts with any rule, regulation, guideline
or requirement of any National Securities Exchange on which the Limited Partner
Interests are listed for trading, in which case the rule, regulation, guideline
or requirement of such exchange shall govern) or (b) in the event that approvals
are sought without


                                      -84-
<PAGE>


a meeting, the date by which Limited Partners are requested in writing by the
General Partner to give such approvals.

Section 13.7.  Adjournment.

        When a meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting and a new Record Date need not be fixed, if the
time and place thereof are announced at the meeting at which the adjournment is
taken, unless such adjournment shall be for more than 45 days. At the adjourned
meeting, the Partnership may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than 45 days
or if a new Record Date is fixed for the adjourned meeting, a notice of the
adjourned meeting shall be given in accordance with this Article XIII.

Section 13.8.  Waiver of Notice; Approval of Meeting; Approval of Minutes.

        The transactions of any meeting of Limited Partners, however called and
noticed, and whenever held, shall be as valid as if it had occurred at a meeting
duly held after regular call and notice, if a quorum is present, either in
person or by proxy, and if, either before or after the meeting, Limited Partners
representing such quorum who were present in person or by proxy and entitled to
vote, sign a written waiver of notice or an approval of the holding of the
meeting or an approval of the minutes thereof. All waivers and approvals shall
be filed with the Partnership records or made a part of the minutes of the
meeting. Attendance of a Limited Partner at a meeting shall constitute a waiver
of notice of the meeting, except when the Limited Partner does not approve, at
the beginning of the meeting, of the transaction of any business because the
meeting is not lawfully called or convened; and except that attendance at a
meeting is not a waiver of any right to disapprove the consideration of matters
required to be included in the notice of the meeting, but not so included, if
the disapproval is expressly made at the meeting

Section 13.9.  Quorum.

        The holders of a majority of the Outstanding Limited Partner Interests
of the class or classes for which a meeting has been called (including Limited
Partner Interests deemed owned by the General Partner) represented in person or
by proxy shall constitute a quorum at a meeting of Limited Partners of such
class or classes unless any such action by the Limited Partners requires
approval by holders of a greater percentage of such Limited Partner Interests,
in which case the quorum shall be such greater percentage. At any meeting of the
Limited Partners duly called and held in accordance with this Agreement at which
a quorum is present, the act of Limited Partners holding Outstanding Limited
Partner Interests that in the aggregate represent a majority of the Outstanding
Limited Partner Interests entitled to vote and be present in person or by proxy
at such meeting shall be deemed to constitute the act of all Limited Partners,
unless a greater or different percentage is required with respect to such action
under the provisions of this Agreement, in which case the act of the Limited
Partners holding Outstanding Limited Partner Interests that in the aggregate
represent at least such greater or different percentage shall be required. The
Limited Partners present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment, notwithstanding the
withdrawal of enough Limited Partners to leave less than a quorum, if any action
taken (other than adjournment) is approved by the required percentage of
Outstanding Limited Partner Interests


                                      -85-
<PAGE>


specified in this Agreement (including Limited Partner Interests deemed owned by
the General Partner). In the absence of a quorum any meeting of Limited Partners
may be adjourned from time to time by the affirmative vote of holders of at
least a majority of the Outstanding Limited Partner Interests entitled to vote
at such meeting (including Limited Partner Interests deemed owned by the General
Partner) represented either in person or by proxy, but no other business may be
transacted, except as provided in Section 13.7.

Section 13.10. Conduct of a Meeting.

        The General Partner shall have full power and authority concerning the
manner of conducting any meeting of the Limited Partners or solicitation of
approvals in writing, including the determination of Persons entitled to vote,
the existence of a quorum, the satisfaction of the requirements of Section 13.4,
the conduct of voting, the validity and effect of any proxies and the
determination of any controversies, votes or challenges arising in connection
with or during the meeting or voting. The General Partner shall designate a
Person to serve as chairman of any meeting and shall further designate a Person
to take the minutes of any meeting. All minutes shall be kept with the records
of the Partnership maintained by the General Partner. The General Partner may
make such other regulations consistent with applicable law and this Agreement as
it may deem advisable concerning the conduct of any meeting of the Limited
Partners or solicitation of approvals in writing, including regulations in
regard to the appointment of proxies, the appointment and duties of inspectors
of votes and approvals, the submission and examination of proxies and other
evidence of the right to vote, and the revocation of approvals in writing.

Section 13.11. Action Without a Meeting.

        If authorized by the General Partner, any action that may be taken at a
meeting of the Limited Partners may be taken without a meeting if an approval in
writing setting forth the action so taken is signed by Limited Partners owning
not less than the minimum percentage of the Outstanding Limited Partner
Interests (including Limited Partner Interests deemed owned by the General
Partner) that would be necessary to authorize or take such action at a meeting
at which all the Limited Partners were present and voted (unless such provision
conflicts with any rule, regulation, guideline or requirement of any National
Securities Exchange on which the Limited Partner Interests are listed for
trading, in which case the rule, regulation, guideline or requirement of such
exchange shall govern). Prompt notice of the taking of action without a meeting
shall be given to the Limited Partners who have not approved in writing. The
General Partner may specify that any written ballot submitted to Limited
Partners for the purpose of taking any action without a meeting shall be
returned to the Partnership within the time period, which shall be not less than
20 days, specified by the General Partner. If a ballot returned to the
Partnership does not vote all of the Limited Partner Interests held by the
Limited Partners the Partnership shall be deemed to have failed to receive a
ballot for the Limited Partner Interests that were not voted. If approval of the
taking of any action by the Limited Partners is solicited by any Person other
than by or on behalf of the General Partner, the written approvals shall have no
force and effect unless and until (a) they are deposited with the Partnership in
care of the General Partner, (b) approvals sufficient to take the action
proposed are dated as of a date not more than 90 days prior to the date
sufficient approvals are deposited with the Partnership and (c) an Opinion of
Counsel is delivered to the General Partner to the effect that the exercise of
such right and the action proposed to be taken with respect to any particular
matter (i) will not


                                      -86-
<PAGE>

cause the Limited Partners to be deemed to be taking part in the management and
control of the business and affairs of the Partnership so as to jeopardize the
Limited Partners' limited liability, and (ii) are otherwise permissible under
the state statutes then governing the rights, duties and liabilities of the
Partnership and the Partners.

Section 13.12. Voting and Other Rights.

            (a) Only those Record Holders of the Limited Partner Interests on
the Record Date set pursuant to Section 13.6 (and also subject to the
limitations contained in the definition of "Outstanding") shall be entitled to
notice of, and to vote at, a meeting of Limited Partners or to act with respect
to matters as to which the holders of the Outstanding Limited Partner Interests
have the right to vote or to act. All references in this Agreement to votes of,
or other acts that may be taken by, the Outstanding Limited Partner Interests
shall be deemed to be references to the votes or acts of the Record Holders of
such Outstanding Limited Partner Interests.

            (b) With respect to Limited Partner Interests that are held for a
Person's account by another Person (such as a broker, dealer, bank, trust
company or clearing corporation, or an agent of any of the foregoing), in whose
name such Limited Partner Interests are registered, such other Person shall, in
exercising the voting rights in respect of such Limited Partner Interests on any
matter, and unless the arrangement between such Persons provides otherwise, vote
such Limited Partner Interests in favor of, and at the direction of, the Person
who is the beneficial owner, and the Partnership shall be entitled to assume it
is so acting without further inquiry. The provisions of this Section 13.12(b)
(as well as all other provisions of this Agreement) are subject to the
provisions of Section 4.3.

                                  ARTICLE XIV.
                                     MERGER

Section 14.1.  Authority.

        The Partnership may merge or consolidate with one or more corporations,
limited liability companies, business trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including a
general partnership or limited partnership, formed under the laws of the State
of Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation ("Merger Agreement") in accordance
with this Article XIV.

Section 14.2.  Procedure for Merger or Consolidation.

        Merger or consolidation of the Partnership pursuant to this Article XIV
requires the prior approval of the General Partner. If the General Partner shall
determine, in the exercise of its discretion, to consent to the merger or
consolidation, the General Partner shall approve the Merger Agreement, which
shall set forth:

            (a) The names and jurisdictions of formation or organization of each
of the business entities proposing to merge or consolidate;


                                      -87-
<PAGE>


            (b) The name and jurisdiction of formation or organization of the
business entity that is to survive the proposed merger or consolidation (the
"Surviving Business Entity");

            (c) The terms and conditions of the proposed merger or
consolidation;

            (d) The manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property or
general or limited partner interests, rights, securities or obligations of the
Surviving Business Entity; and (i) if any general or limited partner interests,
securities or rights of any constituent business entity are not to be exchanged
or converted solely for, or into, cash, property or general or limited partner
interests, rights, securities or obligations of the Surviving Business Entity,
the cash, property or general or limited partner interests, rights, securities
or obligations of any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such general or
limited partner interests, securities or rights are to receive in exchange for,
or upon conversion of their general or limited partner interests, securities or
rights, and (ii) in the case of securities represented by certificates, upon the
surrender of such certificates, which cash, property or general or limited
partner interests, rights, securities or obligations of the Surviving Business
Entity or any general or limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof, are to be
delivered;

            (e) A statement of any changes in the constituent documents or the
adoption of new constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust, certificate or agreement
of limited partnership, operating agreement or other similar charter or
governing document) of the Surviving Business Entity to be effected by such
merger or consolidation;

            (f) The effective time of the merger, which may be the date of the
filing of the certificate of merger pursuant to Section 14.4 or a later date
specified in or determinable in accordance with the Merger Agreement (provided,
that if the effective time of the merger is to be later than the date of the
filing of the certificate of merger, the effective time shall be fixed no later
than the time of the filing of the certificate of merger and stated therein);
and

            (g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the General Partner.

Section 14.3. Approval by Limited Partners of Merger or Consolidation.

            (a) Except as provided in Section 14.3(d), the General Partner, upon
its approval of the Merger Agreement, shall direct that the Merger Agreement be
submitted to a vote of Limited Partners, whether at a special meeting or by
written consent, in either case in accordance with the requirements of Article
VII. A copy or a summary of the Merger Agreement shall be included in or
enclosed with the notice of a special meeting or the written consent.

            (b) Except as provided in Section 14.3(d), the Merger Agreement
shall be approved upon receiving the affirmative vote or consent of the holders
of a Unit Majority unless the Merger Agreement contains any provision that, if
contained in an amendment to this Agreement, the provisions of this Agreement or
the Delaware Act would require for its approval


                                      -88-
<PAGE>

the vote or consent of a greater percentage of the Outstanding Limited Partner
Interests or of any class of Limited Partners, in which case such greater
percentage vote or consent shall be required for approval of the Merger
Agreement.

            (c) Except as provided in Section 14.3(d), after such approval by
vote or consent of the Limited Partners, and at any time prior to the filing of
the certificate of merger pursuant to Section 14.4, the merger or consolidation
may be abandoned pursuant to provisions therefor, if any, set forth in the
Merger Agreement.

            (d) Notwithstanding anything else contained in this Article XIV or
in this Agreement, the General Partner is permitted, in its discretion, without
Limited Partner approval, to merge the Partnership or any Group Member into, or
convey all of the Partnership's assets to, another limited liability entity
which shall be newly formed and shall have no assets, liabilities or operations
at the time of such Merger other than those it receives from the Partnership or
other Group Member if (i) the General Partner has received an Opinion of Counsel
that the merger or conveyance, as the case may be, would not result in the loss
of the limited liability of any Limited Partner or any partner in the Operating
Partnership or cause the Partnership or the Operating Partnership to be treated
as an association taxable as a corporation or otherwise to be taxed as an entity
for federal income tax purposes (to the extent not previously treated as such),
(ii) the sole purpose of such merger or conveyance is to effect a mere change in
the legal form of the Partnership into another limited liability entity and
(iii) the governing instruments of the new entity provide the Limited Partners
and the General Partner with the same rights and obligations as are herein
contained.

Section 14.4.  Certificate of Merger.

        Upon the required approval by the General Partner and the Unitholders of
a Merger Agreement, a certificate of merger shall be executed and filed with the
Secretary of State of the State of Delaware in conformity with the requirements
of the Delaware Act.

Section 14.5.  Effect of Merger.

            (a) At the effective time of the certificate of merger:

            (i) all of the rights, privileges and powers of each of the business
        entities that has merged or consolidated, and all property, real,
        personal and mixed, and all debts due to any of those business entities
        and all other things and causes of action belonging to each of those
        business entities, shall be vested in the Surviving Business Entity and
        after the merger or consolidation shall be the property of the Surviving
        Business Entity to the extent they were of each constituent business
        entity;

            (ii) the title to any real property vested by deed or otherwise in
        any of those constituent business entities shall not revert and is not
        in any way impaired because of the merger or consolidation;

            (iii) all rights of creditors and all liens on or security interests
        in property of any of those constituent business entities shall be
        preserved unimpaired; and


                                      -89-
<PAGE>



            (iv) all debts, liabilities and duties of those constituent business
        entities shall attach to the Surviving Business Entity and may be
        enforced against it to the same extent as if the debts, liabilities and
        duties had been incurred or contracted by it.

            (b) A merger or consolidation effected pursuant to this Article
shall not be deemed to result in a transfer or assignment of assets or
liabilities from one entity to another.

                                   ARTICLE XV.
                   RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS

Section 15.1.  Right to Acquire Limited Partner Interests.

            (a) Notwithstanding any other provision of this Agreement, if at any
time not more than 20% of the total Limited Partner Interests of any class then
Outstanding is held by Persons other than the General Partner and its
Affiliates, the General Partner shall then have the right, which right it may
assign and transfer in whole or in part to the Partnership or any Affiliate of
the General Partner, exercisable in its sole discretion, to purchase all, but
not less than all, of such Limited Partner Interests of such class then
Outstanding held by Persons other than the General Partner and its Affiliates,
at the greater of (x) the Current Market Price as of the date three days prior
to the date that the notice described in Section 15 is mailed and (y) the
highest price paid by the General Partner or any of its Affiliates for any such
Limited Partner Interest of such class purchased during the 90-day period
preceding the date that the notice described in Section 15.1(b) is mailed. As
used in this Agreement, (i) "Current Market Price" as of any date of any class
of Limited Partner Interests listed or admitted to trading on any National
Securities Exchange means the average of the daily Closing Prices (as
hereinafter defined) per limited partner interest of such class for the 20
consecutive Trading Days (as hereinafter defined) immediately prior to such
date; (ii) "Closing Price" for any day means the last sale price on such day,
regular way, or in case no such sale takes place on such day, the average of the
closing bid and asked prices on such day, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted for trading on the principal National
Securities Exchange on which such Limited Partner Interests of such class are
listed or admitted to trading or, if such Limited Partner Interests of such
class are not listed or admitted to trading on any National Securities Exchange,
the last quoted price on such day or, if not so quoted, the average of the high
bid and low asked prices on such day in the over-the-counter market, as reported
by the Nasdaq Stock Market or any other system then in use, or, if on any such
day such Limited Partner Interests of such class are not quoted by any such
organization, the average of the closing bid and asked prices on such day as
furnished by a professional market maker making a market in such Limited Partner
Interests of such class selected by the General Partner, or if on any such day
no market maker is making a market in such Limited Partner Interests of such
class, the fair value of such Limited Partner Interests on such day as
determined reasonably and in good faith by the General Partner; and (iii)
"Trading Day" means a day on which the principal National Securities Exchange on
which such Limited Partner Interests of any class are listed or admitted to
trading is open for the transaction of business or, if Limited Partner Interests
of a class are not listed or admitted to trading on any National Securities
Exchange, a day on which banking institutions in New York City generally are
open.


                                      -90-
<PAGE>


            (b) If the General Partner, any Affiliate of the General Partner or
the Partnership elects to exercise the right to purchase Limited Partner
Interests granted pursuant to Section 15.1(a), the General Partner shall deliver
to the Transfer Agent notice of such election to purchase (the "Notice of
Election to Purchase") and shall cause the Transfer Agent to mail a copy of such
Notice of Election to Purchase to the Record Holders of Limited Partner
Interests of such class (as of a Record Date selected by the General Partner) at
least 10, but not more than 60, days prior to the Purchase Date. Such Notice of
Election to Purchase shall also be published for a period of at least three
consecutive days in at least two daily newspapers of general circulation printed
in the English language and published in the Borough of Manhattan, New York. The
Notice of Election to Purchase shall specify the Purchase Date and the price
(determined in accordance with Section 15.1(a)) at which Limited Partner
Interests will be purchased and state that the General Partner, its Affiliate or
the Partnership, as the case may be, elects to purchase such Limited Partner
Interests, upon surrender of Certificates representing such Limited Partner
interests in exchange for payment, at such office or offices of the Transfer
Agent as the Transfer Agent may specify, or as may be required by any National
Securities Exchange on which such Limited Partner Interests are listed or
admitted to trading. Any such Notice of Election to Purchase mailed to a Record
Holder of Limited Partner Interests at his address as reflected in the records
of the Transfer Agent shall be conclusively presumed to have been given
regardless of whether the owner receives such notice. On or prior to the
Purchase Date, the General Partner, its Affiliate or the Partnership, as the
case may be, shall deposit with the Transfer Agent cash in an amount sufficient
to pay the aggregate purchase price of all of such Limited Partner Interests to
be purchased in accordance with this Section 15.1. If the Notice of Election to
Purchase shall have been duly given as aforesaid at least 10 days prior to the
Purchase Date, and if on or prior to the Purchase Date the deposit described in
the preceding sentence has been made for the benefit of the holders of Limited
Partner Interests subject to purchase as provided herein, then from and after
the Purchase Date, notwithstanding that any Certificate shall not have been
surrendered for purchase, all rights of the holders of such Limited Partner
Interests (including any rights pursuant to Articles IV, V, VI, and XII) shall
thereupon cease, except the right to receive the purchase price (determined in
accordance with Section 15.1(a)) for Limited Partner Interests therefor, without
interest, upon surrender to the Transfer Agent of the Certificates representing
such Limited Partner Interests, and such Limited Partner Interests shall
thereupon be deemed to be transferred to the General Partner, its Affiliate or
the Partnership, as the case may be, on the record books of the Transfer Agent
and the Partnership, and the General Partner or any Affiliate of the General
Partner, or the Partnership, as the case may be, shall be deemed to be the owner
of all such Limited Partner Interests from and after the Purchase Date and shall
have all rights as the owner of such Limited Partner Interests (including all
rights as owner of such Limited Partner Interests pursuant to Articles IV, V, VI
and XII).

            (c) At any time from and after the Purchase Date, a holder of an
Outstanding Limited Partner Interest subject to purchase as provided in this
Section 15.1 may surrender his Certificate evidencing such Limited Partner
Interest to the Transfer Agent in exchange for payment of the amount described
in Section 15.1(a), therefor, without interest thereon.


                                      -91-
<PAGE>


                                  ARTICLE XVI.
                               GENERAL PROVISIONS

Section 16.1.  Addresses and Notices.

        Any notice, demand, request, report or proxy materials required or
permitted to be given or made to a Partner or Assignee under this Agreement
shall be in writing and shall be deemed given or made when delivered in person
or when sent by first class United States mail or by other means of written
communication to the Partner or Assignee at the address described below. Any
notice, payment or report to be given or made to a Partner or Assignee hereunder
shall be deemed conclusively to have been given or made, and the obligation to
give such notice or report or to make such payment shall be deemed conclusively
to have been fully satisfied, upon sending of such notice, payment or report to
the Record Holder of such Partnership Securities at his address as shown on the
records of the Transfer Agent or as otherwise shown on the records of the
Partnership, regardless of any claim of any Person who may have an interest in
such Partnership Securities by reason of any assignment or otherwise. An
affidavit or certificate of making of any notice, payment or report in
accordance with the provisions of this Section 16.1 executed by the General
Partner, the Transfer Agent or the mailing organization shall be prima facie
evidence of the giving or making of such notice, payment or report. If any
notice, payment or report addressed to a Record Holder at the address of such
Record Holder appearing on the books and records of the Transfer Agent or the
Partnership is returned by the United States Postal Service marked to indicate
that the United States Postal Service is unable to deliver it, such notice,
payment or report and any subsequent notices, payments and reports shall be
deemed to have been duly given or made without further mailing (until such time
as such Record Holder or another Person notifies the Transfer Agent or the
Partnership of a change in his address) if they are available for the Partner or
Assignee at the principal office of the Partnership for a period of one year
from the date of the giving or making of such notice, payment or report to the
other Partners and Assignees. Any notice to the Partnership shall be deemed
given if received by the General Partner at the principal office of the
Partnership designated pursuant to Section 2.3. The General Partner may rely and
shall be protected in relying on any notice or other document from a Partner,
Assignee or other Person if believed by it to be genuine.

Section 16.2.  Further Action.

        The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.

Section 16.3.  Binding Effect.

        This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

Section 16.4.  Integration.

        This Agreement constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.


                                      -92-
<PAGE>


Section 16.5.  Creditors.

        None of the provisions of this Agreement shall be for the benefit of, or
shall be enforceable by, any creditor of the Partnership.

Section 16.6.  Waiver.

        No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach of any other covenant, duty, agreement or condition.

Section 16.7.  Counterparts.

        This Agreement may be executed in counterparts, all of which together
shall constitute an agreement binding on all the parties hereto, notwithstanding
that all such parties are not signatories to the original or the same
counterpart. Each party shall become bound by this Agreement immediately upon
affixing its signature hereto or, in the case of a Person acquiring a Unit, upon
accepting the certificate evidencing such Unit or executing and delivering a
Transfer Application as herein described, independently of the signature of any
other party.

Section 16.8.  Applicable Law.

        This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware, without regard to the principles of conflicts of
law.

Section 16.9.  Invalidity of Provisions.

        If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

Section 16.10. Consent of Partners.

        Each Partner hereby expressly consents and agrees that, whenever in this
Agreement it is specified that an action may be taken upon the affirmative vote
or consent of less than all of the Partners, such action may be so taken upon
the concurrence of less than all of the Partners and each Partner shall be bound
by the results of such action.

                     [Rest of Page Intentionally Left Blank]


                                      -93-
<PAGE>


        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above:

                                  GENERAL PARTNER:

                                  WILLIAMS GP LLC

                                  By:    /s/ Don R. Wellendorf
                                         ---------------------------------------
                                  Name:       Don R. Wellendorf
                                         ---------------------------------------
                                  Title:      Senior V.P., C.F.O. & Treasurer
                                         ---------------------------------------

                                  ORGANIZATIONAL LIMITED PARTNER:

                                  WILLIAMS ENERGY SERVICES LLC

                                  By:      /s/  Don R. Wellendorf
                                         ---------------------------------------
                                  Name:          Don R. Wellendorf
                                         ---------------------------------------
                                  Title: Vice President - Enterprise Development
                                         ---------------------------------------
                                         And Planning, Strategic
                                         -----------------------

                                  LIMITED PARTNERS:

                                  All Limited Partners now and hereafter
                                  admitted as Limited Partners of the
                                  Partnership, pursuant to powers of attorney
                                  now and hereafter executed in favor of, and
                                  granted and delivered to the General Partner.

                                  WILLIAMS NATURAL GAS LIQUIDS, INC.

                                  By:      /s/ Don R. Wellendorf
                                         ---------------------------------------
                                  Name:         Don R. Wellendorf
                                         ---------------------------------------
                                  Title:               Vice President



                                      -94-
<PAGE>

                                    EXHIBIT A
                               TO THE AMENDED AND
                  RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
                          WILLIAMS ENERGY PARTNERS L.P.
                       CERTIFICATE EVIDENCING COMMON UNITS
                    REPRESENTING LIMITED PARTNER INTERESTS IN
                          WILLIAMS ENERGY PARTNERS L.P.

No. __________                                           __________ Common Units

        In accordance with Section 4.1 of the Amended and Restated Agreement of
Limited Partnership of Williams Energy Partners L.P., as amended, supplemented
or restated from time to time (the "Partnership Agreement"), Williams Energy
Partners L.P., a Delaware limited partnership (the "Partnership"), hereby
certifies that (the "Holder") is the registered owner of Common Units
representing limited partner interests in the Partnership (the "Common Units")
transferable on the books of the Partnership, in person or by duly authorized
attorney, upon surrender of this Certificate properly endorsed and accompanied
by a properly executed application for transfer of the Common Units represented
by this Certificate. The rights, preferences and limitations of the Common Units
are set forth in, and this Certificate and the Common Units represented hereby
are issued and shall in all respects be subject to the terms and provisions of,
the Partnership Agreement. Copies of the Partnership Agreement are on file at,
and will be furnished without charge on delivery of written request to the
Partnership at, the principal office of the Partnership located at One Williams
Center, Tulsa, Oklahoma 74172. Capitalized terms used herein but not defined
shall have the meanings given them in the Partnership Agreement.

        The Holder, by accepting this Certificate, is deemed to have (i)
requested admission as, and agreed to become, a Limited Partner and to have
agreed to comply with and be bound by and to have executed the Partnership
Agreement, (ii) represented and warranted that the Holder has all right, power
and authority and, if an individual, the capacity necessary to enter into the
Partnership Agreement, (iii) granted the powers of attorney provided for in the
Partnership Agreement and (iv) made the waivers and given the consents and
approvals contained in the Partnership Agreement.

        This Certificate shall not be valid far any purpose unless it has been
countersigned and registered by the Transfer Agent and Registrar.

<TABLE>
<CAPTION>
<S>                                                <C>
Dated:                                             WILLIAMS ENERGY PARTNERS L.P.
      ----------------
Countersigned and Registered by:                   By:    Williams GP LLC, its General Partner

                                                   By:
                                                      ----------------------------------------
as Transfer Agent and Registrar                    Name:
                                                        --------------------------------------
By:                                                By:
   ---------------------------------                  ----------------------------------------
        Authorized Signature                              Secretary
</TABLE>


                                      -95-
<PAGE>


                            [REVERSE OF CERTIFICATE]

                                 ABBREVIATIONS

        The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as follows according to applicable laws or
regulations:

TEN COM -   as tenants in common                UNIF GIFT/TRANSFERS MIN ACT
TEN ENT -   as tenants by the entireties        __________ Custodian _________
                                                (Cust)                (Minor)

JT TEN -    as joint tenants with right of      under Uniform Gifts/Transfers to
            survivorship and not as             CD Minors Act (State)
            tenants in common

        Additional abbreviations, though not in the above list, may also be
used.

                           ASSIGNMENT OF COMMON UNITS

                                       IN

                          WILLIAMS ENERGY PARTNERS L.P.
              IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
           DUE TO TAX SHELTER STATUS OF WILLIAMS ENERGY PARTNERS L.P.

        You have acquired an interest in Williams Energy Partners L.P., One
Williams Center, Tulsa, Oklahoma 74172, whose taxpayer identification number is
[ ]. The Internal Revenue Service has issued Williams Energy Partners L.P. the
following tax shelter registration number:

        YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL REVENUE SERVICE
IF YOU CLAIM ANY DEDUCTION, LOSS, CREDIT OR OTHER TAX BENEFIT OR REPORT ANY
INCOME BY REASON OF YOUR INVESTMENT IN WILLIAMS ENERGY PARTNERS L.P.

        You must report the registration number as well as the name and taxpayer
identification number of Williams Energy Partners L.P. on Form 8271. FORM 8271
MUST BE ATTACHED TO THE RETURN ON WHICH YOU CLAIM THE DEDUCTION, LOSS, CREDIT OR
OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR INVESTMENT IN WILLIAMS
ENERGY PARTNERS L.P.

        If you transfer your interest in Williams Energy Partners L.P. to
another person, you are required by the Internal Revenue Service to keep a list
containing (a) that person's name, address and taxpayer identification number,
(b) the date on which you transferred the interest and (c) the name, address and
tax shelter registration number of Williams Energy Partners L.P. If you do not
want to keep such a list, you must (1) send the information specified above to
the Partnership, which will keep the list for this tax shelter, and (2) give a
copy of this notice to the person to whom you transfer your interest. Your
failure to comply with any of the above-described responsibilities could result
in the imposition of a penalty under Section 6707(b) or 6708(a) of the Internal
Revenue Code of 1986, as amended, unless such failure is shown to be due to
reasonable cause.


                                      -96-
<PAGE>


        ISSUANCE OF A REGISTRATION NUMBER DOES NOT INDICATE THAT THIS INVESTMENT
OR THE CLAIMED TAX BENEFITS HAVE BEEN REVIEWED, EXAMINED OR APPROVED BY THE
INTERNAL REVENUE SERVICE.

        FOR VALUE RECEIVED, hereby assigns, conveys, sells and transfers unto
(Please print or typewrite name (Please insert Social Security or other and
address of Assignee) identifying number of Assignee)

__________ Common Units representing limited partner interests evidenced by this
Certificate, subject to the Partnership Agreement, and does hereby irrevocably
constitute and appoint __________ as its attorney-in-fact with full power of
substitution to transfer the same on the books of Williams Energy Partners L.P.

Date:                             NOTE:   The signature to any endorsement
                                          hereon must correspond with the name
                                          as written upon the face of this
                                          Certificate in every particular,
                                          without alteration, enlargement or
                                          change.


SIGNATURE(S) MUST BE                      (Signature)
GUARANTEED BY A MEMBER
FIRM OF THE NATIONAL
ASSOCIATION OF
SECURITIES DEALERS, INC.                  (Signature)
OR BY A COMMERCIAL BANK
OR TRUST COMPANY
SIGNATURE(S) GUARANTEED


        No transfer of the Common Units evidenced hereby will be registered on
the books of the Partnership, unless the Certificate evidencing the Common Units
to be transferred is surrendered for registration or transfer and an Application
for Transfer of Common Units has been executed by a transferee either (a) on the
form set forth below or (b) on a separate application that the Partnership will
furnish on request without charge. A transferor of the Common Units shall have
no duty to the transferee with respect to execution of the transfer application
in order for such transferee to obtain registration of the transfer of the
Common Units.


                                      -97-
<PAGE>


                    APPLICATION FOR TRANSFER OF COMMON UNITS

        The undersigned ("Assignee") hereby applies for transfer to the name of
the Assignee of the Common Units evidenced hereby.

        The Assignee (a) requests admission as a Substituted Limited Partner and
agrees to comply with and be bound by, and hereby executes, the Amended and
Restated Agreement of Limited Partnership of Williams Energy Partners L.P. (the
"Partnership"), as amended, supplemented or restated to the date hereof (the
"Partnership Agreement"), (b) represents and warrants that the Assignee has all
right, power and authority and, if an individual, the capacity necessary to
enter into the Partnership Agreement, (c) appoints the General Partner of the
Partnership and, if a Liquidator shall be appointed, the Liquidator of the
Partnership as the Assignee's attorney-in-fact to execute, swear to, acknowledge
and file any document, including, without limitation, the Partnership Agreement
and any amendment thereto and the Certificate of Limited Partnership of the
Partnership and any amendment thereto, necessary or appropriate for the
Assignee's admission as a Substituted Limited Partner and as a party to the
Partnership Agreement, (d) gives the powers of attorney provided for in the
Partnership Agreement, and (e) makes the waivers and gives the consents and
approvals contained in the Partnership Agreement. Capitalized terms not defined
herein have the meanings assigned to such terms in the Partnership Agreement.

Date:
      ----------------

<TABLE>
<CAPTION>
<S>                                                        <C>
 Social Security or other identifying number of            Signature of Assignee
 Assignee

 Purchase Price including commissions, if any              Name and Address of Assignee

 Type of Entity (check one):

        |_|    Individual           |_|     Partnership          |_|    Corporation

        |_|    Trust                |_|     Other (specify)

Nationality (check one):

        |_|    U.S. Citizen, Resident or Domestic Entity

        |_|    Foreign Corporation  |_|     Non-resident Alien
</TABLE>

        If the U.S. Citizen, Resident or Domestic Entity box is checked, the
following certification must be completed.

        Under Section 1445(e) of the Internal Revenue Code of 1986, as amended
(the "Code"), the Partnership must withhold tax with respect to certain
transfers of property if a holder of an interest in the Partnership is a foreign
person. To inform the Partnership that no withholding is required with respect
to the undersigned interestholder's interest in it, the undersigned hereby
certifies the following (or, if applicable, certifies the following on behalf of
the interestholder).


                                      -98-
<PAGE>


Complete Either A or B:

A.      Individual Interestholder

        1.     I am not a non-resident alien for purposes of U.S. income
               taxation.

        2.     My U.S. taxpayer identification number (Social Security Number)
               is __________.

        3.     My home address is ___________.

B.      Partnership, Corporation or Other Interestholder

        1.     ________________ is not a foreign corporation, foreign
               partnership, foreign trust (Name of Interestholder) or foreign
               estate (as those terms are defined in the Code and Treasury
               Regulations).

        2.     The interestholder's U.S. employer identification number is
               ___________.

        3.     The interestholder's office address and place of incorporation
               (if applicable) is ___________.

        The interestholder agrees to notify the Partnership within sixty (60)
days of the date the interestholder becomes a foreign person.

        The interestholder understands that this certificate may be disclosed to
the Internal Revenue Service by the Partnership and that any false statement
contained herein could be punishable by fine, imprisonment or both.

        Under penalties of perjury, I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete and, if applicable, I further declare that I have authority to sign
this document on behalf of:

                        --------------------------------
                             Name of Interestholder

                        --------------------------------
                               Signature and Date

                        --------------------------------
                              Title (if applicable)

        Note: If the Assignee is a broker, dealer, bank, trust company, clearing
corporation, other nominee holder or an agent of any of the foregoing, and is
holding for the account of any other person, this application should be
completed by an officer thereof or, in the case of a broker or dealer, by a
registered representative who is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.,
or, in the case of any other nominee holder, a person performing a similar
function. If the Assignee is a broker, dealer, bank, trust company, clearing
corporation, other nominee owner or an agent of any of the foregoing, the above
certification as to any person for whom the Assignee will hold the Common Units
shall be made to the best of the Assignee's knowledge.


                                      -99-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(B)
<SEQUENCE>4
<FILENAME>d94597ex3-b.txt
<DESCRIPTION>AMENDED/RESTATED AGREEMENT OF LIMITED PARTNERSHIP
<TEXT>
<PAGE>
                                                                    EXHIBIT 3(b)




                              AMENDED AND RESTATED

                        AGREEMENT OF LIMITED PARTNERSHIP

                                       OF

                               WILLIAMS OLP, L.P.




<PAGE>


                                TABLE OF CONTENTS
<TABLE>
<S>                <C>                                                                      <C>
ARTICLE I. DEFINITIONS.......................................................................1
   Section 1.1.    Definitions...............................................................1
   Section 1.2.    Construction..............................................................8

ARTICLE II. ORGANIZATION.....................................................................8
   Section 2.1.    Formation.................................................................8
   Section 2.2.    Name......................................................................9
   Section 2.3.    Registered Office; Registered Agent; Principal Office; Other Offices......9
   Section 2.4.    Purpose and Business......................................................9
   Section 2.5.    Powers....................................................................9
   Section 2.6.    Power of Attorney.........................................................9
   Section 2.7.    Term.....................................................................11
   Section 2.8.    Title to Partnership Assets..............................................11

ARTICLE III. RIGHTS OF LIMITED PARTNERS.....................................................11
   Section 3.1.    Limitation of Liability..................................................11
   Section 3.2.    Management of Business...................................................12
   Section 3.3.    Outside Activities of the Limited Partners...............................12
   Section 3.4.    Rights of Limited Partners...............................................12

ARTICLE IV. TRANSFERS OF PARTNERSHIP INTERESTS..............................................13
   Section 4.1.    Transfer Generally.......................................................13
   Section 4.2.    Transfer of General Partner's Partnership Interest.......................13
   Section 4.3.    Transfer of a Limited Partner's Partnership Interest.....................13
   Section 4.4.    Restrictions on Transfers................................................14

ARTICLE V. CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS......................14
   Section 5.1.    Initial Contributions....................................................14
   Section 5.2.    Contributions Pursuant to the Contribution and Conveyance Agreement......14
   Section 5.3.    Additional Capital Contributions.........................................15
   Section 5.4.    Interest and Withdrawal..................................................15
   Section 5.5.    Capital Accounts.........................................................15
   Section 5.6.    Loans from Partners......................................................18
   Section 5.7.    Limited Preemptive Rights................................................18
   Section 5.8.    Fully Paid and Non-Assessable Nature of Partnership Interests............18

ARTICLE VI. ALLOCATIONS AND DISTRIBUTIONS...................................................18
   Section 6.1.    Allocations for Capital Account Purposes.................................18
   Section 6.2.    Allocations for Tax Purposes.............................................22
   Section 6.3.    Distributions............................................................24

ARTICLE VII. MANAGEMENT AND OPERATION OF BUSINESS...........................................24
   Section 7.1.    Management...............................................................24
</TABLE>


                                      -i-
<PAGE>

<TABLE>
<S>                <C>                                                                      <C>
   Section 7.2.    Certificate of Limited Partnership.......................................26
   Section 7.3.    Restrictions on General Partner's Authority..............................27
   Section 7.4.    Reimbursement of the General Partner.....................................27
   Section 7.5.    Outside Activities.......................................................28
   Section 7.6.    Loans from the General Partner; Loans or Contributions from the
                   Partnership; Contracts with Affiliates; Certain Restrictions on
                   the General Partner......................................................29
   Section 7.7.    Indemnification..........................................................31
   Section 7.8.    Liability of Indemnitees.................................................32
   Section 7.9.    Resolution of Conflicts of Interest......................................33
   Section 7.10.   Other Matters Concerning the General Partner.............................34
   Section 7.11.   Reliance by Third Parties................................................35

ARTICLE VIII. BOOKS, RECORDS, ACCOUNTING AND REPORTS........................................36
   Section 8.1.    Records and Accounting...................................................36
   Section 8.2.    Fiscal Year..............................................................36

ARTICLE IX. TAX MATTERS.....................................................................36
   Section 9.1.    Tax Returns and Information..............................................36
   Section 9.2.    Tax Elections............................................................36
   Section 9.3.    Tax Controversies........................................................36
   Section 9.4.    Withholding..............................................................37

ARTICLE X. ADMISSION OF PARTNERS............................................................37
   Section 10.1.   Admission of Partners....................................................37
   Section 10.2.   Admission of Substituted Limited Partner.................................37
   Section 10.3.   Admission of Additional Limited Partners.................................37
   Section 10.4.   Admission of Successor or Transferee General Partner.....................38
   Section 10.5.   Amendment of Agreement and Certificate of Limited Partnership............38

ARTICLE XI. WITHDRAWAL OR REMOVAL OF PARTNERS...............................................38
   Section 11.1.   Withdrawal of the General Partner........................................38
   Section 11.2.   Removal of the General Partner...........................................40
   Section 11.3.   Interest of Departing Partner............................................40
   Section 11.4.   Withdrawal of a Limited Partner..........................................40

ARTICLE XII. DISSOLUTION AND LIQUIDATION....................................................41
   Section 12.1.   Dissolution..............................................................41
   Section 12.2.   Continuation of the Business of the Partnership After Dissolution........41
   Section 12.3.   Liquidator...............................................................42
   Section 12.4.   Liquidation..............................................................42
   Section 12.5.   Cancellation of Certificate of Limited Partnership.......................43
   Section 12.6.   Return of Contributions..................................................43
   Section 12.7.   Waiver of Partition......................................................43
   Section 12.8.   Capital Account Restoration..............................................43

ARTICLE XIII. AMENDMENT OF PARTNERSHIP AGREEMENT............................................44
</TABLE>


                                      -ii-
<PAGE>


<TABLE>
<S>                <C>                                                                      <C>
   Section 13.1.   Amendment to be Adopted Solely by the General Partner....................44
   Section 13.2.   Amendment Procedures.....................................................45

ARTICLE XIV. MERGER.........................................................................45
   Section 14.1.   Authority................................................................45
   Section 14.2.   Procedure for Merger or Consolidation....................................45
   Section 14.3.   Approval by Limited Partners of Merger or Consolidation..................46
   Section 14.4.   Certificate of Merger....................................................47
   Section 14.5.   Effect of Merger.........................................................47

ARTICLE XV. GENERAL PROVISIONS..............................................................48
   Section 15.1.   Addresses and Notices....................................................48
   Section 15.2.   Further Action...........................................................48
   Section 15.3.   Binding Effect...........................................................48
   Section 15.4.   Integration..............................................................48
   Section 15.5.   Creditors................................................................48
   Section 15.6.   Waiver...................................................................48
   Section 15.7.   Counterparts.............................................................48
   Section 15.8.   Applicable Law...........................................................49
   Section 15.9.   Invalidity of Provisions.................................................49
   Section 15.10.  Consent of Partners......................................................49
</TABLE>


                                     -iii-
<PAGE>


                              AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                               WILLIAMS OLP, L.P.

        THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of WILLIAMS
OLP, L.P., dated as of February 9, 2001 is entered into by and between Williams
GP LLC, a Delaware limited liability company, as the General Partner, and
Williams Energy Partners, L.P., a Delaware limited partnership, as the Limited
Partner, together with any other Persons who hereafter become Partners in the
Partnership or parties hereto as provided herein.

                                R E C I T A L S:

        WHEREAS, Williams GP LLC and Williams Energy Partners, L.P. formed the
Partnership pursuant to the Agreement of Limited Partnership of Williams OLP,
L.P. dated as of October 26, 2000 (the "Prior Agreement") and a Certificate of
Limited Partnership filed with the Secretary of State of the State of Delaware
on such date; and

        WHEREAS, the Partners of the Partnership now desire to amend the Prior
Agreement to reflect additional contributions by the Partners and certain other
matters.

        NOW, THEREFORE, in consideration of the covenants, conditions and
agreements contained herein, the parties hereto hereby amend the Prior Agreement
and, as so amended, restate it in its entirety as follows:

                                   ARTICLE I.
                                   DEFINITIONS

Definitions.

        The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
Capitalized terms used herein but not otherwise defined shall have the meaning
assigned to such term in the MLP Agreement.

               "Additional Limited Partner" means a Person admitted to the
        Partnership as a Limited Partner pursuant to Section 10.4 and who is
        shown as such on the books and records of the Partnership.

               "Adjusted Capital Account" means the Capital Account maintained
        for each Partner as of the end of each fiscal year of the Partnership,
        (a) increased by any amounts that such Partner is obligated to restore
        under the standards set by Treasury Regulation Section
        1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury
        Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by
        (i) the amount of all losses and deductions that, as of the end of such
        fiscal year, are reasonably expected to be allocated to such Partner in
        subsequent years under Sections 704(e)(2) and 706(d) of the Code and
        Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of
        all distributions that, as of the end of such fiscal year, are
        reasonably expected to be made to such Partner in subsequent years in
        accordance with the terms of this Agreement or otherwise to the extent
        they exceed offsetting increases to such Partner's Capital Account that
        are reasonably expected to occur during (or prior to) the year in which
        such distributions are reasonably expected to be made (other than
        increases as a result of a minimum gain chargeback pursuant to Section
        6.1(d)(i) or 6.1(d)(ii)). The foregoing definition of Adjusted Capital
        Account is intended to comply with the provisions of Treasury Regulation
        Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
        therewith. The "Adjusted Capital Account" of a Partner in respect of a
        General Partner Interest or any other specified interest in the
        Partnership shall be the amount which such Adjusted Capital Account
        would be if such General Partner Interest or other interest in the
        Partnership were the only interest in the Partnership held by a Partner
        from and after the date on which such general partner interest or other
        interest was first issued.


                                      -1-
<PAGE>


               "Adjusted Property" means any property the Carrying Value of
        which has been adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii).

               "Affiliate" means, with respect to any Person, any other Person
        that directly or indirectly through one or more intermediaries controls,
        is controlled by or is under common control with, the Person in
        question. As used herein, the term "control" means the possession,
        direct or indirect, of the power to direct or cause the direction of the
        management and policies of a Person, whether through ownership of voting
        securities, by contract or otherwise.

               "Agreed Allocation" means any allocation, other than a Required
        Allocation, of an item of income, gain, loss or deduction pursuant to
        the provisions of Section 6.1, including, without limitation, a Curative
        Allocation (if appropriate to the context in which the term "Agreed
        Allocation" is used).

               "Agreed Value" of any Contributed Property means the fair market
        value of such property or other consideration at the time of
        contribution as determined by the General Partner using such reasonable
        method of valuation as it may adopt. The General Partner shall, in its
        discretion, use such method as it deems reasonable and appropriate to
        allocate the aggregate Agreed Value of Contributed Properties
        contributed to the Partnership in a single or integrated transaction
        among each separate property on a basis proportional to the fair market
        value of each Contributed Property.

               "Agreement" means this Amended and Restated Agreement of Limited
        Partnership of Williams OLP, L.P., as it may be amended, supplemented or
        restated from time to time.

               "Assets" means the assets being conveyed to the Partnership on
        the Closing Date pursuant to Section 5.2 and the Contribution and
        Conveyance Agreement.

               "Assignee" means a Person to whom one or more Partnership
        Interests have been transferred in a manner permitted under this
        Agreement, but who has not been admitted as a Substituted Limited
        Partner.

               "Associate" means, when used to indicate a relationship with any
        Person, (a) any corporation or organization of which such Person is a
        director, officer or partner or is, directly or indirectly, the owner of
        20% or more of any class of voting stock or other voting interest; (b)
        any trust or other estate in which such Person has at least a 20%
        beneficial interest or as to which such Person serves as trustee or in a
        similar fiduciary capacity; and (c) any relative or spouse of such
        Person, or any relative of such spouse, who has the same principal
        residence as such Person.

                "Assumed Liabilities" means the liabilities that the Partnership
        is either assuming or taking subject to in connection with the
        conveyance of the Assets pursuant to Section 5.2 and the Contribution
        and Conveyance Agreement.

                "Available Cash" means, with respect to any Quarter ending prior
        to the Liquidation Date,

                      (a) the sum of (i) all cash and cash equivalents of the
        Partnership on hand at the end of such Quarter, and (ii) all additional
        cash and cash equivalents of the Partnership on hand on the date of
        determination of Available Cash with respect to such Quarter resulting
        from Working Capital Borrowings made subsequent to the end of such
        Quarter, less

                      (b) the amount of any cash reserves that is necessary or
        appropriate in the reasonable discretion of the General Partner to (i)
        provide for the proper conduct of the business of the Partnership
        (including reserves for future capital expenditures and for anticipated
        future credit needs of the Partnership) subsequent to such Quarter, (ii)
        comply with applicable law or any loan agreement, security agreement,
        mortgage, debt instrument or other agreement or obligation to which any
        Group Member is a party or by which it is bound or its assets are
        subject or (iii) provide funds for distributions under Section 6.4 or
        6.5 of the MLP Agreement in respect of any one or more of the next four
        Quarters; provided, however, that the General Partner may not establish
        cash reserves pursuant to (iii) above if the effect of such reserves
        would be that the MLP is unable to distribute the Minimum Quarterly
        Distribution on all


                                      -2-
<PAGE>


        Common Units, plus any Cumulative Common Unit Arrearage on all Common
        Units, with respect to such Quarter; and provided further that
        disbursements made by a Group Member or cash reserves established,
        increased or reduced after the end of such Quarter but on or before the
        date of determination of Available Cash with respect to such Quarter
        shall be deemed to have been made, established, increased or reduced,
        for purposes of determining Available Cash, within such Quarter if the
        General Partner so determines.

                      Notwithstanding the foregoing, "Available Cash" with
        respect to the Quarter in which the Liquidation Date occurs and any
        subsequent Quarter shall equal zero.

               "Book-Tax Disparity" means with respect to any item of
        Contributed Property or Adjusted Property, as of the date of any
        determination, the difference between the Carrying Value of such
        Contributed Property or Adjusted Property and the adjusted basis thereof
        for federal income tax purposes as of such date. A Partner's share of
        the Partnership's Book-Tax Disparities in all of its Contributed
        Property and Adjusted Property will be reflected by the difference
        between such Partner's Capital Account balance as maintained pursuant to
        Section 5.5 and the hypothetical balance of such Partner's Capital
        Account computed as if it had been maintained strictly in accordance
        with federal income tax accounting principles.

               "Business Day" means Monday through Friday of each week, except
        that a legal holiday recognized as such by the government of the United
        States of America or the states of New York or Texas shall not be
        regarded as a Business Day.

               "Capital Account" means the capital account maintained for a
        Partner pursuant to Section 5.5. The "Capital Account" of a Partner in
        respect of a General Partner Interest or any other specified interest in
        the Partnership shall be the amount which such Capital Account would be
        if such General Partner Interest or other specified interest in the
        Partnership were the only interest in the Partnership held by a Partner
        from and after the date on which such General Partner Interest or other
        specified interest in the Partnership was first issued.

               "Capital Contribution" means any cash, cash equivalents or the
        Net Agreed Value of Contributed Property that a Partner contributes to
        the Partnership pursuant to this Agreement or the Contribution and
        Conveyance Agreement.

               "Carrying Value" means (a) with respect to a Contributed
        Property, the Agreed Value of such property reduced (but not below zero)
        by all depreciation, amortization and cost recovery deductions charged
        to the Partners' and Assignees' Capital Accounts in respect of such
        Contributed Property, and (b) with respect to any other Partnership
        property, the adjusted basis of such property for federal income tax
        purposes, all as of the time of determination. The Carrying Value of any
        property shall be adjusted from time to time in accordance with Sections
        5.5(d)(i) and 5.5(d)(ii) and to reflect changes, additions or other
        adjustments to the Carrying Value for dispositions and acquisitions of
        Partnership properties, as deemed appropriate by the General Partner.

               "Certificate of Limited Partnership" means the Certificate of
        Limited Partnership of the Partnership filed with the Secretary of State
        of the State of Delaware as referenced in Section 2.1, as such
        Certificate of Limited Partnership may be amended, supplemented or
        restated from time to time.

               "Closing Date" means the first date on which Common Units are
        sold by the MLP to the Underwriters pursuant to the provisions of the
        Underwriting Agreement.

               "Code" means the Internal Revenue Code of 1986, as amended and in
        effect from time to time. Any reference herein to a specific section or
        sections of the Code shall be deemed to include a reference to any
        corresponding provision of successor law.

                "Commission" means the United States Securities and Exchange
        Commission.

                "Common Unit" has the meaning assigned to such term in the MLP
        Agreement.


                                      -3-
<PAGE>


               "Contributed Property" means each property or other asset, in
        such form as may be permitted by the Delaware Act, but excluding cash,
        contributed to the Partnership. Once the Carrying Value of a Contributed
        Property is adjusted pursuant to Section 5.5(d), such property shall no
        longer constitute a Contributed Property, but shall be deemed an
        Adjusted Property.

               "Contribution and Conveyance Agreement" means that certain
        Contribution, Conveyance and Assumption Agreement, dated as of the
        Closing Date, among the General Partner, the MLP, the Partnership and
        certain other parties.

               "Curative Allocation" means any allocation of an item of income,
        gain, deduction, loss or credit pursuant to the provisions of Section
        6.1(d)(ix).

                "Delaware Act" means the Delaware Revised Uniform Limited
        Partnership Act, 6 Del. C. Section 17-101, et seq., as amended,
        supplemented or restated from time to time, and any successor to such
        statute.

               "Departing Partner" means a former General Partner from and after
        the effective date of any withdrawal or removal of such former General
        Partner pursuant to Section 11.1 or 11.2.

               "Economic Risk of Loss" has the meaning set forth in Treasury
        Regulation Section 1.752-2(a).

               "Event of Withdrawal" has the meaning assigned to such term in
        Section 11.1(a).

               "General Partner" means Williams GP LLC and its successors and
        permitted assigns as general partner of the Partnership.

               "General Partner Interest" means the ownership interest of the
        General Partner in the Partnership (in its capacity as a general
        partner) and includes any and all benefits to which the General Partner
        is entitled as provided in this Agreement, together with all obligations
        of the General Partner to comply with the terms and provisions of this
        Agreement.

               "Group" means a Person that with or through any of its Affiliates
        or Associates has any agreement, arrangement or understanding for the
        purpose of acquiring, holding, voting (except voting pursuant to a
        revocable proxy or consent given to such Person in response to a proxy
        or consent solicitation made to 10 or more Persons) or disposing of any
        MLP Securities with any other Person that beneficially owns, or whose
        Affiliates or Associates beneficially own, directly or indirectly, MLP
        Securities.

               "Group Member" means a member of the Partnership Group.

               "Indemnitee" means (a) the General Partner, (b) any Departing
        Partner, (c) any Person who is or was an Affiliate of the General
        Partner or any Departing Partner, (d) any Person who is or was a member,
        partner, officer, director, employee, agent or trustee of any Group
        Member, the General Partner or any Departing Partner or any Affiliate of
        any Group Member, the General Partner or any Departing Partner, and (e)
        any Person who is or was serving at the request of the General Partner
        or any Departing Partner or any Affiliate of the General Partner or any
        Departing Partner as an officer, director, employee, member, partner,
        agent, fiduciary or trustee of another Person; provided, that a Person
        shall not be an Indemnitee by reason of providing, on a fee-for-services
        basis, trustee, fiduciary or custodial services.

               "Initial Offering" means the initial offering and sale of Common
        Units to the public, as described in the Registration Statement.

               "Limited Partner" means any Person that is admitted to the
        Partnership as a limited partner pursuant to the terms and conditions of
        this Agreement; but the term Limited Partner shall not include any
        Person from and after the time such Person withdraws as a Limited
        Partner from the Partnership.

               "Limited Partner Interest" means the ownership interest of a
        Limited Partner or Assignee in the Partnership and includes any and all
        benefits to which such Limited Partner or Assignee is entitled as


                                      -4-
<PAGE>


        provided in this Agreement, together with all obligations of such
        Limited Partner or Assignee to comply with the terms and provisions of
        this Agreement.

               "Liquidation Date" means (a) in the case of an event giving rise
        to the dissolution of the Partnership of the type described in clauses
        (a) and (b) of the first sentence of Section 12.2, the date on which the
        applicable time period during which the Partners have the right to elect
        to reconstitute the Partnership and continue its business has expired
        without such an election being made, and (b) in the case of any other
        event giving rise to the dissolution of the Partnership, the date on
        which such event occurs.

               "Liquidator" means one or more Persons selected by the General
        Partner to perform the functions described in Section 12.3 as
        liquidating trustee of the Partnership within the meaning of the
        Delaware Act.

                "Merger Agreement" has the meaning assigned to such term in
        Section 14.1.

               "Minimum Quarterly Distribution" has the meaning assigned to such
        term in the MLP Agreement.

               "MLP" means Williams Energy Partners, L.P.

                "MLP Agreement" means the Amended and Restated Agreement of
        Limited Partnership of Williams Energy Partners, L.P., as it may be
        amended, supplemented or restated from time to time.

               "MLP Security" has the meaning assigned to the term "Partnership
        Security" in the MLP Agreement.

               "Net Agreed Value" means, (a) in the case of any Contributed
        Property, the Agreed Value of such property reduced by any liabilities
        either assumed by the Partnership upon such contribution or to which
        such property is subject when contributed, and (b) in the case of any
        property distributed to a Partner or Assignee by the Partnership, the
        Partnership's Carrying Value of such property (as adjusted pursuant to
        Section 5.5(d)(ii)) at the time such property is distributed, reduced by
        any indebtedness either assumed by such Partner or Assignee upon such
        distribution or to which such property is subject at the time of
        distribution, in either case, as determined under Section 752 of the
        Code.

               "Net Income" means, for any taxable year, the excess, if any, of
        the Partnership's items of income and gain (other than those items taken
        into account in the computation of Net Termination Gain or Net
        Termination Loss) for such taxable year over the Partnership's items of
        loss and deduction (other than those items taken into account in the
        computation of Net Termination Gain or Net Termination Loss) for such
        taxable year. The items included in the calculation of Net Income shall
        be determined in accordance with Section 5.5(b) and shall not include
        any items specially allocated under Section 6.1(d).

               "Net Loss" means, for any taxable year, the excess, if any, of
        the Partnership's items of loss and deduction (other than those items
        taken into account in the computation of Net Termination Gain or Net
        Termination Loss) for such taxable year over the Partnership's items of
        income and gain (other than those items taken into account in the
        computation of Net Termination Gain or Net Termination Loss) for such
        taxable year. The items included in the calculation of Net Loss shall be
        determined in accordance with Section 5.5(b) and shall not include any
        items specially allocated under Section 6.1(d).

               "Net Termination Gain" means, for any taxable year, the sum, if
        positive, of all items of income, gain, loss or deduction recognized by
        the Partnership after the Liquidation Date. The items included in the
        determination of Net Termination Gain shall be determined in accordance
        with Section 5.5(b) and shall not include any items of income, gain or
        loss specially allocated under Section 6.1(d).

               "Net Termination Loss" means, for any taxable year, the sum, if
        negative, of all items of income, gain, loss or deduction recognized by
        the Partnership after the Liquidation Date. The items included in the
        determination of Net Termination Loss shall be determined in accordance
        with Section 5.5(b) and shall not include any items of income, gain or
        loss specially allocated under Section 6.1(d).


                                      -5-
<PAGE>


               "Nonrecourse Built-in Gain" means with respect to any Contributed
        Properties or Adjusted Properties that are subject to a mortgage or
        pledge securing a Nonrecourse Liability, the amount of any taxable gain
        that would be allocated to the Partners pursuant to Sections
        6.2(b)(i)(A), 6.2(b)(ii)(A) and 6.2(b)(iii) if such properties were
        disposed of in a taxable transaction in full satisfaction of such
        liabilities and for no other consideration.

               "Nonrecourse Deductions" means any and all items of loss,
        deduction or expenditures (described in Section 705(a)(2)(B) of the
        Code) that, in accordance with the principles of Treasury Regulation
        Section 1.704-2(b), are attributable to a Nonrecourse Liability.

               "Nonrecourse Liability" has the meaning set forth in Treasury
        Regulation Section 1.752-1(a)(2).

               "OLP Subsidiary" means a Subsidiary of the OLP.

                "Omnibus Agreement" means that Omnibus Agreement, dated as of
        the Closing Date, among The Williams Companies, Inc., the General
        Partner, the MLP and the Partnership.

               "Opinion of Counsel" means a written opinion of counsel (which
        may be regular counsel to the Partnership or the General Partner or any
        of its Affiliates) acceptable to the General Partner in its reasonable
        discretion.

               "Partner Nonrecourse Debt" has the meaning set forth in Treasury
        Regulation Section 1.704-2(b)(4).

               "Partner Nonrecourse Debt Minimum Gain" has the meaning set forth
        in Treasury Regulation Section 1.704-2(i)(2).

               "Partner Nonrecourse Deductions" means any and all items of loss,
        deduction or expenditure (including, without limitation, any expenditure
        described in Section 705(a)(2)(B) of the Code) that, in accordance with
        the principles of Treasury Regulation Section 1.704-2(i), are
        attributable to a Partner Nonrecourse Debt.

                "Partnership" means Williams OLP, L.P., a Delaware limited
        partnership, and any successors thereto.

               "Partnership Group" means the Partnership and all OLP
        Subsidiaries, treated as a single consolidated entity.

               "Partnership Interest" means an ownership interest of a Partner
        in the Partnership, which shall include the General Partner Interest and
        the Limited Partner Interest(s).

               "Partnership Minimum Gain" means that amount determined in
        accordance with the principles of Treasury Regulation Section
        1.704-2(d).

               "Percentage Interest" means the percentage interest in the
        Partnership held by each Partner upon completion of the transactions in
        Section 5.2 and shall mean, (a) as to the General Partner, 1.0101% and
        (b) as to the MLP, 98.9899%.

               "Person" means an individual or a corporation, limited liability
        company, partnership, joint venture, trust, unincorporated organization,
        association, government agency or political subdivision thereof or other
        entity.

               "Prior Agreement" is defined in the Recitals.


                                      -6-
<PAGE>


               "Pro Rata" means, when modifying Partners and Assignees,
        apportioned among all Partners and Assignees in accordance with their
        relative Percentage Interests.

               "Quarter" means, unless the context requires otherwise, a fiscal
        quarter of the Partnership.

               "Recapture Income" means any gain recognized by the Partnership
        (computed without regard to any adjustment required by Section 734 or
        Section 743 of the Code) upon the disposition of any property or asset
        of the Partnership, which gain is characterized as ordinary income
        because it represents the recapture of deductions previously taken with
        respect to such property or asset.

               "Registration Statement" means the Registration Statement on Form
        S-1 (Registration No. 333-48866) as it has been or as it may be amended
        or supplemented from time to time, filed by the MLP with the Commission
        under the Securities Act to register the offering and sale of the Common
        Units in the Initial Offering.

               "Required Allocations" means (a) any limitation imposed on any
        allocation of Net Losses or Net Termination Losses under Section 6.1(b)
        or 6.1(c)(ii) and (b) any allocation of an item of income, gain, loss or
        deduction pursuant to Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv),
        6.1(d)(vii) or 6.1(d)(ix).

               "Residual Gain" or "Residual Loss" means any item of gain or
        loss, as the case may be, of the Partnership recognized for federal
        income tax purposes resulting from a sale, exchange or other disposition
        of a Contributed Property or Adjusted Property, to the extent such item
        of gain or loss is not allocated pursuant to Section 6.2(b)(i)(A) or
        6.2(b)(ii)(A), respectively, to eliminate Book-Tax Disparities.

               "Restricted Business" has the meaning assigned to such term in
        the Omnibus Agreement.

               "Securities Act" means the Securities Act of 1933, as amended,
        supplemented or restated from time to time and any successor to such
        statute.

                "Special Approval" has the meaning assigned to such term in the
        MLP Agreement.

               "Subsidiary" means, with respect to any Person, (a) a corporation
        of which more than 50% of the voting power of shares entitled (without
        regard to the occurrence of any contingency) to vote in the election of
        directors or other governing body of such corporation is owned, directly
        or indirectly, at the date of determination, by such Person, by one or
        more Subsidiaries of such Person or a combination thereof, (b) a
        partnership (whether general or limited) in which such Person or a
        Subsidiary of such Person is, at the date of determination, a general or
        limited partner of such partnership, but only if more than 50% of the
        partnership interests of such partnership (considering all of the
        partnership interests of the partnership as a single class) is owned,
        directly or indirectly, at the date of determination, by such Person, by
        one or more Subsidiaries of such Person, or a combination thereof, or
        (c) any other Person (other than a corporation or a partnership) in
        which such Person, one or more Subsidiaries of such Person, or a
        combination thereof, directly or indirectly, at the date of
        determination, has (i) at least a majority ownership interest or (ii)
        the power to elect or direct the election of a majority of the directors
        or other governing body of such Person.

               "Substituted Limited Partner" means a Person who is admitted as a
        Limited Partner to the Partnership pursuant to Section 10.2 in place of
        and with all the rights of a Limited Partner and who is shown as a
        Limited Partner on the books and records of the Partnership.

               "Surviving Business Entity" has the meaning assigned to such term
        in Section 14.2(b).

                "Transfer" has the meaning assigned to such term in Section
        4.4(a).

               "Underwriter" means each Person named as an underwriter in
        Schedule I to the Underwriting Agreement who purchases Common Units
        pursuant thereto.


                                      -7-
<PAGE>


               "Underwriting Agreement" means the Underwriting Agreement dated
        February 5, 2001 among the Underwriters, the MLP and certain other
        parties, providing for the purchase of Common Units by such
        Underwriters.

                "Unit" has the meaning assigned to such term in the MLP
        Agreement.

                "Unit Majority" has the meaning assigned to such term in the MLP
        Agreement.

               "Unrealized Gain" attributable to any item of Partnership
        property means, as of any date of determination, the excess, if any, of
        (a) the fair market value of such property as of such date (as
        determined under Section 5.5(d)) over (b) the Carrying Value of such
        property as of such date (prior to any adjustment to be made pursuant to
        Section 5.5(d) as of such date).

               "Unrealized Loss" attributable to any item of Partnership
        property means, as of any date of determination, the excess, if any, of
        (a) the Carrying Value of such property as of such date (prior to any
        adjustment to be made pursuant to Section 5.5(d) as of such date) over
        (b) the fair market value of such property as of such date (as
        determined under Section 5.5(d)).

                "U.S. GAAP" means United States Generally Accepted Accounting
        Principles consistently applied.

               "Working Capital Borrowings" means borrowings exclusively for
        working capital purposes made pursuant to a credit facility or other
        arrangement requiring all such borrowings thereunder to be reduced to a
        relatively small amount each year for an economically meaningful period
        of time.

Construction.

        Unless the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa; (b) references to Articles and Sections refer to Articles and
Sections of this Agreement; and (c) the term "include" or "includes" means
includes, without limitation, and "including" means including, without
limitation.

                                   ARTICLE II.
                                  ORGANIZATION

Formation.

        The Partnership was previously formed as a limited partnership pursuant
to the provisions of the Delaware Act. The Partners hereby amend and restate the
Prior Agreement in its entirety. This amendment and restatement shall become
effective on the date of this Agreement. Except as expressly provided to the
contrary in this Agreement, the rights, duties (including fiduciary duties),
liabilities and obligations of the Partners and the administration, dissolution
and termination of the Partnership shall be governed by the Delaware Act. All
Partnership Interests shall constitute personal property of the owner thereof
for all purposes and a Partner has no interest in specific Partnership property.


                                      -8-
<PAGE>


Name.

        The name of the Partnership shall be "Williams OLP, L.P." The
Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the General Partner in its sole discretion,
including the name of the General Partner. The words "Limited Partnership,"
"L.P." or "Ltd." or similar words or letters shall be included in the
Partnership's name where necessary for the purpose of complying with the laws of
any jurisdiction that so requires. The General Partner in its discretion may
change the name of the Partnership at any time and from time to time and shall
notify the other Partner(s) of such change in the next regular communication to
the Partners.

Registered Office; Registered Agent; Principal Office; Other Offices.

        Unless and until changed by the General Partner, the registered office
of the Partnership in the State of Delaware shall be located at 1209 Orange
Street, Wilmington, Delaware 19801, and the registered agent for service of
process on the Partnership in the State of Delaware at such registered office
shall be The Corporation Trust Company. The principal office of the Partnership
shall be located at One Williams Center, Tulsa, Oklahoma 74172 or such other
place as the General Partner may from time to time designate by notice to the
Limited Partners. The Partnership may maintain offices at such other place or
places within or outside the State of Delaware as the General Partner deems
necessary or appropriate. The address of the General Partner shall be One
Williams Center, Tulsa, Oklahoma 74172 or such other place as the General
Partner may from time to time designate by notice to the Limited Partners.

Purpose and Business.

        The purpose and nature of the business to be conducted by the
Partnership shall be to (a) acquire, manage, operate and sell the Assets and any
similar assets or properties now or hereafter acquired by the Partnership, (b)
engage directly in, or enter into or form any corporation, partnership, joint
venture, limited liability company or other arrangement to engage indirectly in,
any business activity that the Partnership is permitted to engage in, or any
type of business or activity engaged in by the General Partner prior to the
Closing Date and, in connection therewith, to exercise all of the rights and
powers conferred upon the Partnership pursuant to the agreements relating to
such business activity, (c) engage directly in, or enter into or form any
corporation, partnership, joint venture, limited liability company or other
arrangement to engage indirectly in, any business activity that is approved by
the General Partner and which lawfully may be conducted by a limited partnership
organized pursuant to the Delaware Act and, in connection therewith, to exercise
all of the rights and powers conferred upon the Partnership pursuant to the
agreements relating to such business activity; provided, however, that the
General Partner reasonably determines, as of the date of the acquisition or
commencement of such activity, that such activity (i) generates "qualifying
income" (as such term is defined pursuant to Section 7704 of the Code) or (ii)
enhances the operations of an activity of the Partnership that generates
qualifying income, and (d) do anything necessary or appropriate to the
foregoing, including the making of capital contributions or loans to a Group
Member, the MLP or any Subsidiary of the MLP. The General Partner has no
obligation or duty to the Partnership, the Limited Partners, or the Assignees to
propose or approve, and in its discretion may decline to propose or approve, the
conduct by the Partnership of any business.

Powers.

        The Partnership shall be empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described in Section
2.4 and for the protection and benefit of the Partnership.

Power of Attorney.

            (a) Each Partner and each Assignee hereby constitutes and appoints
the General Partner and, if a Liquidator shall have been selected pursuant to
Section 12.3, the Liquidator (and any successor to the Liquidator by merger,
transfer, assignment, election or


                                      -9-
<PAGE>


otherwise) and each of their authorized officers and attorneys-in-fact, as the
case may be, with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in his name, place and stead,
to:

               (i) execute, swear to, acknowledge, deliver, file and record in
        the appropriate public offices (A) all certificates, documents and other
        instruments (including this Agreement and the Certificate of Limited
        Partnership and all amendments or restatements hereof or thereof) that
        the General Partner or the Liquidator deems necessary or appropriate to
        form, qualify or continue the existence or qualification of the
        Partnership as a limited partnership (or a partnership in which the
        limited partners have limited liability) in the State of Delaware and in
        all other jurisdictions in which the Partnership may conduct business or
        own property; (B) all certificates, documents and other instruments that
        the General Partner or the Liquidator deems necessary or appropriate to
        reflect, in accordance with its terms, any amendment, change,
        modification or restatement of this Agreement; (C) all certificates,
        documents and other instruments (including conveyances and a certificate
        of cancellation) that the General Partner or the Liquidator deems
        necessary or appropriate to reflect the dissolution and liquidation of
        the Partnership pursuant to the terms of this Agreement; (D) all
        certificates, documents and other instruments relating to the admission,
        withdrawal, removal or substitution of any Partner pursuant to, or other
        events described in, Article IV, X, XI or XII; (E) all certificates,
        documents and other instruments relating to the determination of the
        rights, preferences and privileges of any class or series of Partnership
        Interests issued pursuant hereto; and (F) all certificates, documents
        and other instruments (including agreements and a certificate of merger)
        relating to a merger or consolidation of the Partnership pursuant to
        Article XIV; and

               (ii) execute, swear to, acknowledge, deliver, file and record all
        ballots, consents, approvals, waivers, certificates, documents and other
        instruments necessary or appropriate, in the discretion of the General
        Partner or the Liquidator, to make, evidence, give, confirm or ratify
        any vote, consent, approval, agreement or other action that is made or
        given by the Partners hereunder or is consistent with the terms of this
        Agreement or is necessary or appropriate, in the discretion of the
        General Partner or the Liquidator, to effectuate the terms or intent of
        this Agreement; provided, that when required by any provision of this
        Agreement that establishes a percentage of the Limited Partners or of
        the Limited Partners of any class or series required to take any action,
        the General Partner and the Liquidator may exercise the power of
        attorney made in this Section 2.6(a)(ii) only after the necessary vote,
        consent or approval of the Limited Partners or of the Limited Partners
        of such class or series, as applicable.

        Nothing contained in this Section 2.6(a) shall be construed as
authorizing the General Partner to amend this Agreement except in accordance
with Article XIII or as may be otherwise expressly provided for in this
Agreement.

            (b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, and it shall survive and, to
the maximum extent permitted by law, not be affected by the subsequent death,
incompetency, disability, incapacity, dissolution, bankruptcy or termination of
any Limited Partner or Assignee and the transfer of all or any portion of such
Limited Partner's or Assignee's Partnership Interest and shall extend to such


                                      -10-
<PAGE>


Limited Partner's or Assignee's successors and assigns. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by the
General Partner or the Liquidator acting in good faith pursuant to such power of
attorney; and each such Limited Partner or Assignee, to the maximum extent
permitted by law, hereby waives any and all defenses that may be available to
contest, negate or disaffirm the action of the General Partner or the Liquidator
taken in good faith under such power of attorney. Each Limited Partner or
Assignee shall execute and deliver to the General Partner or the Liquidator,
within 15 days after receipt of the request therefor, such further designation,
powers of attorney and other instruments as the General Partner or the
Liquidator deems necessary to effectuate this Agreement and the purposes of the
Partnership.

Term.

        The term of the Partnership commenced upon the filing of the Certificate
of Limited Partnership in accordance with the Delaware Act and shall continue
until the dissolution of the Partnership in accordance with the provisions of
Article XII. The existence of the Partnership as a separate legal entity shall
continue until the cancellation of the Certificate of Limited Partnership as
provided in the Delaware Act.

Title to Partnership Assets.

        Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner or Assignee, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner, one or more of its Affiliates or one or more nominees, as
the General Partner may determine. The General Partner hereby declares and
warrants that any Partnership assets for which record title is held in the name
of the General Partner or one or more of its Affiliates or one or more nominees
shall be held by the General Partner or such Affiliate or nominee for the use
and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use reasonable
efforts to cause record title to such assets (other than those assets in respect
of which the General Partner determines that the expense and difficulty of
conveyancing makes transfer of record title to the Partnership impracticable) to
be vested in the Partnership as soon as reasonably practicable; provided,
further, that, prior to the withdrawal or removal of the General Partner or as
soon thereafter as practicable, the General Partner shall use reasonable efforts
to effect the transfer of record title to the Partnership and, prior to any such
transfer, will provide for the use of such assets in a manner satisfactory to
the General Partner. All Partnership assets shall be recorded as the property of
the Partnership in its books and records, irrespective of the name in which
record title to such Partnership assets is held.

                                  ARTICLE III.
                           RIGHTS OF LIMITED PARTNERS

Limitation of Liability.

        The Limited Partners and the Assignees shall have no liability under
this Agreement except as expressly provided in this Agreement or in the Delaware
Act.


                                      -11-
<PAGE>


Management of Business.

        No Limited Partner or Assignee, in its capacity as such, shall
participate in the operation, management or control (within the meaning of the
Delaware Act) of the Partnership's business, transact any business in the
Partnership's name or have the power to sign documents for or otherwise bind the
Partnership. Any action taken by any Affiliate of the General Partner or any
officer, director, employee, member, general partner, agent or trustee of the
General Partner or any of its Affiliates, or any officer, director, employee,
member, general partner, agent or trustee of a Group Member, in its capacity as
such, shall not be deemed to be participation in the control of the business of
the Partnership by a limited partner of the Partnership (within the meaning of
Section 17-303(a) of the Delaware Act) and shall not affect, impair or eliminate
the limitations on the liability of the Limited Partners or Assignees under this
Agreement.

Outside Activities of the Limited Partners.

        Subject to the provisions of Section 7.5 and the Omnibus Agreement,
which shall continue to be applicable to the Persons referred to therein,
regardless of whether such Persons shall also be Limited Partners or Assignees,
any Limited Partner or Assignee shall be entitled to and may have business
interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities in direct competition
with the Partnership Group. Neither the Partnership nor any of the other
Partners or Assignees shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner or Assignee.

Rights of Limited Partners.

               (a) In addition to other rights provided by this Agreement or by
applicable law, and except as limited by Section 3.4(b), each Limited Partner
shall have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon reasonable written demand
and at such Limited Partner's own expense:

               (i) to obtain true and full information regarding the status of
        the business and financial condition of the Partnership;

               (ii) promptly after becoming available, to obtain a copy of the
        Partnership's federal, state and local income tax returns for each year;

               (iii) to have furnished to him a current list of the name and
        last known business, residence or mailing address of each Partner;

               (iv) to have furnished to him a copy of this Agreement and the
        Certificate of Limited Partnership and all amendments thereto, together
        with a copy of the executed copies of all powers of attorney pursuant to
        which this Agreement, the Certificate of Limited Partnership and all
        amendments thereto have been executed;

               (v) to obtain true and full information regarding the amount of
        cash and a description and statement of the Net Agreed Value of any
        other Capital Contribution by each Partner and which each Partner has
        agreed to contribute in the future, and the date on which each became a
        Partner; and

               (vi) to obtain such other information regarding the affairs of
        the Partnership as is just and reasonable.


                                      -12-
<PAGE>


               (b) The General Partner may keep confidential from the Limited
Partners and Assignees, for such period of time as the General Partner deems
reasonable, (i) any information that the General Partner reasonably believes to
be in the nature of trade secrets or (ii) other information the disclosure of
which the General Partner in good faith believes (A) is not in the best
interests of the MLP or the Partnership Group, (B) could damage the MLP or the
Partnership Group or (C) that any Group Member is required by law or by
agreement with any third party to keep confidential (other than agreements with
Affiliates of the Partnership the primary purpose of which is to circumvent the
obligations set forth in this Section 3.4).

                                   ARTICLE IV.
                       TRANSFERS OF PARTNERSHIP INTERESTS

Transfer Generally.

               (a) The term "transfer," when used in this Agreement with respect
to a Partnership Interest, shall be deemed to refer to a transaction by which
the General Partner assigns its General Partner Interest to another Person who
becomes the General Partner (or an Assignee) or by which the holder of a Limited
Partner Interest assigns such Limited Partner Interest to another Person who
becomes a Limited Partner (or an Assignee), and includes a sale, assignment,
gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other
disposition by law or otherwise.

               (b) No Partnership Interest shall be transferred, in whole or in
part, except in accordance with the terms and conditions set forth in this
Article IV. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article IV shall be null and void.

               (c) Nothing contained in this Agreement shall be construed to
prevent a disposition by any member of the General Partner of any or all of the
issued and outstanding member interests of the General Partner.

Transfer of General Partner's Partnership Interest.

        If the General Partner transfers its interest as the general partner of
the MLP to any Person in accordance with the provisions of the MLP Agreement,
the General Partner shall contemporaneously therewith transfer all, but not less
than all, of its General Partner Interest to such Person, and the Limited
Partners and Assignees, if any, hereby expressly consent to such transfer.
Except as set forth in the immediately preceding sentence and in Sections 5.2
and 10.1, a General Partner may not transfer all or any part of its Partnership
Interest as the General Partner.

Transfer of a Limited Partner's Partnership Interest.

        A Limited Partner may transfer all, but not less than all, of its
Partnership Interest as a Limited Partner in connection with the merger,
consolidation or other combination of such Limited Partner with or into any
other Person or the transfer by such Limited Partner of all or substantially all
of its assets to another Person, and following any such transfer such Person may
become a Substituted Limited Partner pursuant to Article X. Except as set forth
in the immediately preceding sentence and in Sections 5.2 and 10.1, or in
connection with any pledge of (or any related foreclosure on) a Partnership
Interest of a Limited Partner solely for the purpose of securing, directly or
indirectly, indebtedness of the Partnership or the MLP, a Limited Partner may
not transfer all or any part of its Partnership Interest or withdraw from the
Partnership.


                                      -13-
<PAGE>


Restrictions on Transfers.

               (a) Notwithstanding the other provisions of this Article IV, no
transfer of any Partnership Interest shall be made if such transfer would (i)
violate the then applicable federal or state securities laws or the rules and
regulations of the Commission, any state securities commission or any other
governmental authority with jurisdiction over such transfer, (ii) terminate the
existence or qualification of the Partnership or the MLP under the laws of the
jurisdiction of its formation or (iii) cause the Partnership or the MLP to be
treated as an association taxable as a corporation or otherwise to be taxed as
an entity for federal income tax purposes (to the extent not already so treated
or taxed).

               (b) The General Partner may impose restrictions on the transfer
of Partnership Interests if a subsequent Opinion of Counsel determines that such
restrictions are necessary to avoid a significant risk of the Partnership or the
MLP becoming taxable as a corporation or otherwise to be taxed as an entity for
federal income tax purposes. The restrictions may be imposed by making such
amendments to this Agreement as the General Partner may determine to be
necessary or appropriate to impose such restrictions.

                                   ARTICLE V.
           CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

Initial Contributions.

        In connection with the formation of the Partnership under the Delaware
Act, the General Partner made an initial Capital Contribution to the Partnership
in the amount of $10.10 in exchange for an interest in the Partnership and was
admitted as General Partner and as a Limited Partner, and the MLP made an
initial Capital Contribution to the Partnership in the amount of $989.90 in
exchange for an interest in the Partnership and was admitted as a Limited
Partner.

Contributions Pursuant to the Contribution and Conveyance Agreement.

               (a) Pursuant to the Contribution and Conveyance Agreement, the
General Partner has contributed to the Partnership, as a Capital Contribution
(i) all of its interest in Williams Ammonia Pipeline, L.P. and Terminals, L.P.
and (ii) all of its interest in WNGL LLC in exchange for a continuation of its
General Partner Interest.

               (b) Pursuant to the Contribution and Conveyance Agreement,
Williams Natural Gas Liquids, Inc. and Williams Energy Services, LLC have
contributed to the Partnership, as Capital Contributions, their interests in
Williams Ammonia Pipeline, L.P. and Terminals, L.P., respectively, in exchange
for Limited Partner Interests. Immediately following such contributions,
Williams Natural Gas Liquids, Inc. and Williams Energy Services, LLC transferred
all of their respective Partnership Interests to the MLP in exchange for certain
interests therein as more particularly described in the Registration Statement.

               (c) Pursuant to the Contribution and Conveyance Agreement, the
MLP has contributed to the Partnership, as a Capital Contribution (i) cash in
the amount of $86.0 million and (ii) all of its limited partner interests in
Terminals, L.P., in exchange for its Limited Partner Interest.


                                      -14-
<PAGE>


               (d) Following the foregoing transactions, the General Partner
holds a 1.0101% Partnership Interest as General Partner and the MLP holds a
98.9899% Partnership Interest as a Limited Partner.

Additional Capital Contributions.

        With the consent of the General Partner, any Limited Partner may, but
shall not be obligated to, make additional Capital Contributions to the
Partnership. Contemporaneously with the making of any Capital Contributions by a
Limited Partner, in addition to those provided in Sections 5.1 and 5.2, the
General Partner shall be obligated to make an additional Capital Contribution to
the Partnership in an amount equal to 1.0101 divided by 98.9899 times the amount
of the additional Capital Contribution then made by such Limited Partner. Except
as set forth in the immediately preceding sentence and in Article XII, the
General Partner shall not be obligated to make any additional Capital
Contributions to the Partnership.

Interest and Withdrawal.

        No interest shall be paid by the Partnership on Capital Contributions.
No Partner or Assignee shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent, if any, that distributions made
pursuant to this Agreement or upon termination of the Partnership may be
considered as such by law and then only to the extent provided for in this
Agreement. Except to the extent expressly provided in this Agreement, no Partner
or Assignee shall have priority over any other Partner or Assignee either as to
the return of Capital Contributions or as to profits, losses or distributions.
Any such return shall be a compromise to which all Partners and Assignees agree
within the meaning of Section 17-502(b) of the Delaware Act.

Capital Accounts.

               (a) The Partnership shall maintain for each Partner (or a
beneficial owner of Partnership Interests held by a nominee in any case in which
the nominee has furnished the identity of such owner to the Partnership in
accordance with Section 6031(c) of the Code or any other method acceptable to
the General Partner in its sole discretion) owning a Partnership Interest a
separate Capital Account with respect to such Partnership Interest in accordance
with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital
Account shall be increased by (i) the amount of all Capital Contributions made
to the Partnership with respect to such Partnership Interest pursuant to this
Agreement and (ii) all items of Partnership income and gain (including, without
limitation, income and gain exempt from tax) computed in accordance with Section
5.5(b) and allocated with respect to such Partnership Interest pursuant to
Section 6.1, and decreased by (x) the amount of cash or Net Agreed Value of all
actual and deemed distributions of cash or property made with respect to such
Partnership Interest pursuant to this Agreement and (y) all items of Partnership
deduction and loss computed in accordance with Section 5.5(b) and allocated with
respect to such Partnership Interest pursuant to Section 6.1.

               (b) For purposes of computing the amount of any item of income,
gain, loss or deduction which is to be allocated pursuant to Article VI and is
to be reflected in the Partners' Capital Accounts, the determination,
recognition and classification of any such item shall be the same as its
determination, recognition and classification for federal income tax purposes
(including, without limitation, any method of depreciation, cost recovery or
amortization used for that purpose), provided, that:

                (i) Solely for purposes of this Section 5.5, the Partnership
        shall be treated as owning directly its proportionate share (as
        determined by the General Partner) of all


                                      -15-
<PAGE>


        property owned by any OLP Subsidiary that is classified as a partnership
        for federal income tax purposes.

               (ii) All fees and other expenses incurred by the Partnership to
        promote the sale of (or to sell) a Partnership Interest that can neither
        be deducted nor amortized under Section 709 of the Code, if any, shall,
        for purposes of Capital Account maintenance, be treated as an item of
        deduction at the time such fees and other expenses are incurred and
        shall be allocated among the Partners pursuant to Section 6.1.

               (iii) Except as otherwise provided in Treasury Regulation Section
        1.704-1(b)(2)(iv)(m), computation of all items of income, gain, loss and
        deduction shall be made without regard to any election under Section 754
        of the Code which may be made by the Partnership and, as to those items
        described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without
        regard to the fact that such items are not includable in gross income or
        are neither currently deductible nor capitalized for federal income tax
        purposes. To the extent an adjustment to the adjusted tax basis of any
        Partnership asset pursuant to Section 734(b) or 743(b) of the Code is
        required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m),
        to be taken into account in determining Capital Accounts, the amount of
        such adjustment in the Capital Accounts shall be treated as an item of
        gain or loss.

               (iv) Any income, gain or loss attributable to the taxable
        disposition of any Partnership property shall be determined as if the
        adjusted basis of such property as of such date of disposition were
        equal in amount to the Partnership's Carrying Value with respect to such
        property as of such date.

               (v) In accordance with the requirements of Section 704(b) of the
        Code, any deductions for depreciation, cost recovery or amortization
        attributable to any Contributed Property shall be determined as if the
        adjusted basis of such property on the date it was acquired by the
        Partnership were equal to the Agreed Value of such property. Upon an
        adjustment pursuant to Section 5.5(d) to the Carrying Value of any
        Partnership property subject to depreciation, cost recovery or
        amortization, any further deductions for such depreciation, cost
        recovery or amortization attributable to such property shall be
        determined (A) as if the adjusted basis of such property were equal to
        the Carrying Value of such property immediately following such
        adjustment and (B) using a rate of depreciation, cost recovery or
        amortization derived from the same method and useful life (or, if
        applicable, the remaining useful life) as is applied for federal income
        tax purposes; provided, however, that, if the asset has a zero adjusted
        basis for federal income tax purposes, depreciation, cost recovery or
        amortization shall be determined using any reasonable method that the
        General Partner may adopt.

                (vi) If the Partnership's adjusted basis in a depreciable or
        cost recovery property is reduced for federal income tax purposes
        pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount of such
        reduction shall, solely for purposes hereof, be deemed to be an
        additional depreciation or cost recovery deduction in the year such
        property is placed in service and shall be allocated among the Partners
        pursuant to Section 6.1. Any restoration of such basis pursuant to
        Section 48(q)(2) of the Code shall,


                                      -16-
<PAGE>


        to the extent possible, be allocated in the same manner to the Partners
        to whom such deemed deduction was allocated.

               (c) A transferee of a Partnership Interest shall succeed to a pro
rata portion of the Capital Account of the transferor relating to the
Partnership Interest so transferred.

               (d) (i) In accordance with Treasury Regulation Section
        1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership Interests
        for cash or Contributed Property or the conversion of the General
        Partner's Partnership Interest to Common Units pursuant to Section
        11.3(a), the Capital Accounts of all Partners and the Carrying Value of
        each Partnership property immediately prior to such issuance shall be
        adjusted upward or downward to reflect any Unrealized Gain or Unrealized
        Loss attributable to such Partnership property, as if such Unrealized
        Gain or Unrealized Loss had been recognized on an actual sale of each
        such property immediately prior to such issuance and had been allocated
        to the Partners at such time pursuant to Section 6.1 in the same manner
        as any item of gain or loss actually recognized during such period would
        have been allocated. In determining such Unrealized Gain or Unrealized
        Loss, the aggregate cash amount and fair market value of all Partnership
        assets (including, without limitation, cash or cash equivalents)
        immediately prior to the issuance of additional Partnership Interests
        shall be determined by the General Partner using such reasonable method
        of valuation as it may adopt; provided, however, that the General
        Partner, in arriving at such valuation, must take fully into account the
        fair market value of the Partnership Interests of all Partners at such
        time. The General Partner shall allocate such aggregate value among the
        assets of the Partnership (in such manner as it determines in its
        discretion to be reasonable) to arrive at a fair market value for
        individual properties.

                      (ii) In accordance with Treasury Regulation Section
        1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed
        distribution to a Partner of any Partnership property (other than a
        distribution of cash that is not in redemption or retirement of a
        Partnership Interest), the Capital Accounts of all Partners and the
        Carrying Value of all Partnership property shall be adjusted upward or
        downward to reflect any Unrealized Gain or Unrealized Loss attributable
        to such Partnership property, as if such Unrealized Gain or Unrealized
        Loss had been recognized in a sale of such property immediately prior to
        such distribution for an amount equal to its fair market value, and had
        been allocated to the Partners, at such time, pursuant to Section 6.1(c)
        in the same manner as any item of gain or loss actually recognized
        during such period would have been allocated. In determining such
        Unrealized Gain or Unrealized Loss the aggregate cash amount and fair
        market value of all Partnership assets (including, without limitation,
        cash or cash equivalents) immediately prior to a distribution shall (A)
        in the case of an actual distribution which is not made pursuant to
        Section 12.4 or in the case of a deemed contribution and/or
        distribution, be determined and allocated in the same manner as that
        provided in Section 5.5(d)(i) or (B) in the case of a liquidating
        distribution pursuant to Section 12.4, be determined and allocated by
        the Liquidator using such reasonable method of valuation as it may
        adopt.


                                      -17-
<PAGE>


Loans from Partners.

        Loans by a Partner to the Partnership shall not constitute Capital
Contributions. If any Partner shall advance funds to the Partnership in excess
of the amounts required hereunder to be contributed by it to the capital of the
Partnership, the making of such excess advances shall not result in any increase
in the amount of the Capital Account of such Partner. The amount of any such
excess advances shall be a debt obligation of the Partnership to such Partner
and shall be payable or collectible only out of the Partnership assets in
accordance with the terms and conditions upon which such advances are made.

Limited Preemptive Rights.

        Except as provided in Section 5.3, no Person shall have preemptive,
preferential or other similar rights with respect to (a) additional Capital
Contributions; (b) issuance or sale of any class or series of Partnership
Interests, whether unissued, held in the treasury or hereafter created; (c)
issuance of any obligations, evidences of indebtedness or other securities of
the Partnership convertible into or exchangeable for, or carrying or accompanied
by any rights to receive, purchase or subscribe to, any such Partnership
Interests; (d) issuance of any right of subscription to or right to receive, or
any warrant or option for the purchase of, any such Partnership Interests; or
(e) issuance or sale of any other securities that may be issued or sold by the
Partnership.

Fully Paid and Non-Assessable Nature of Partnership Interests.

        All Partnership Interests issued to Limited Partners pursuant to, and in
accordance with the requirements of, this Article V shall be fully paid and
non-assessable Partnership Interests, except as such non-assessability may be
affected by Section 17-607 of the Delaware Act.

                                   ARTICLE VI.
                          ALLOCATIONS AND DISTRIBUTIONS

Allocations for Capital Account Purposes.

        For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Section 5.5(b)) shall be
allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.

               (a) Net Income. After giving effect to the special allocations
set forth in Section 6.1(d), Net Income for each taxable year and all items of
income, gain, loss and deduction taken into account in computing Net Income for
such taxable year shall be allocated among the Partners as follows:

               (i) First, 100% to the General Partner, until the aggregate Net
        Income allocated to the General Partner pursuant to this Section
        6.1(a)(i) for the current taxable year and all previous taxable years is
        equal to the aggregate Net Losses allocated to the General Partner
        pursuant to Section 6.1(b)(ii) for all previous taxable years;

               (ii) Second, 1.0101% to the General Partner and 98.9899% to the
        Limited Partners in accordance with their respective Percentage
        Interests.

               (b) Net Losses. After giving effect to the special allocations
set forth in Section 6.1(d), Net Losses for each taxable period and all items of
income, gain, loss and


                                      -18-
<PAGE>


deduction taken into account in computing Net Losses for such taxable period
shall be allocated among the Partners as follows:

               (i) First, 1.0101% to the General Partner and 98.9899% to the
        Limited Partners, in accordance with their respective Percentage
        Interests; provided, however, that Net Losses shall not be allocated to
        a Limited Partner pursuant to this Section 6.1(b)(i) to the extent that
        such allocation would cause a Limited Partner to have a deficit balance
        in its Adjusted Capital Account at the end of such taxable year (or
        increase any existing deficit balance in such Limited Partners's
        Adjusted Capital Account);

               (ii) Second, the balance, if any, 100% to the General Partner.

               (c) Net Termination Gains and Losses. After giving effect to the
special allocations set forth in Section 6.1(d), all items of income, gain, loss
and deduction taken into account in computing Net Termination Gain or Net
Termination Loss for such taxable period shall be allocated in the same manner
as such Net Termination Gain or Net Termination Loss is allocated hereunder. All
allocations under this Section 6.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided under this Section
6.1 and after all distributions of Available Cash provided under Section 6.4
have been made with respect to the taxable period ending on or before the
Liquidation Date; provided, however, that solely for purposes of this Section
6.1(c), Capital Accounts shall not be adjusted for distributions made pursuant
to Section 12.4.

               (i) If a Net Termination Gain is recognized (or deemed recognized
        pursuant to Section 5.5(d)), such Net Termination Gain shall be
        allocated among the Partners in the following manner (and the Capital
        Accounts of the Partners shall be increased by the amount so allocated
        in each of the following subclauses, in the order listed, before an
        allocation is made pursuant to the next succeeding subclause):

                      (A) First, to each Partner having a deficit balance in its
               Capital Account, in the proportion that such deficit balance
               bears to the total deficit balances in the Capital Accounts of
               all Partners, until each such Partner has been allocated Net
               Termination Gain equal to any such deficit balance in its Capital
               Account; and

                      (B) Second, 1.0101% to the General Partner and 98.9899% to
               the Limited Partners, in accordance with their respective
               Percentage Interests.

               (ii) If a Net Termination Loss is recognized (or deemed
        recognized pursuant to Section 5.5(d)), such Net Termination Loss shall
        be allocated among the Partners in the following manner:

                      First, to the General Partner and the Limited Partners in
               proportion to, and to the extent of, the positive balances in
               their respective Capital Accounts; and

                      Second, the balance, if any, 100% to the General Partner.


                                      -19-
<PAGE>


               (d) Special Allocations. Notwithstanding any other provision of
this Section 6.1, the following special allocations shall be made for such
taxable period:

               (i) Partnership Minimum Gain Chargeback. Notwithstanding any
        other provision of this Section 6.1, if there is a net decrease in
        Partnership Minimum Gain during any Partnership taxable period, each
        Partner shall be allocated items of Partnership income and gain for such
        period (and, if necessary, subsequent periods) in the manner and amounts
        provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2)
        and 1.704-2(j)(2)(i), or any successor provision. For purposes of this
        Section 6.1(d), each Partner's Adjusted Capital Account balance shall be
        determined, and the allocation of income or gain required hereunder
        shall be effected, prior to the application of any other allocations
        pursuant to this Section 6.1(d) with respect to such taxable period
        (other than an allocation pursuant to Sections 6.1(d)(v) and
        6.1(d)(vi)). This Section 6.1(d)(i) is intended to comply with the
        Partnership Minimum Gain chargeback requirement in Treasury Regulation
        Section 1.704-2(f) and shall be interpreted consistently therewith.

               (ii) Chargeback of Partner Nonrecourse Debt Minimum Gain.
        Notwithstanding the other provisions of this Section 6.1 (other than
        Section 6.1(d)(i)), except as provided in Treasury Regulation Section
        1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt
        Minimum Gain during any Partnership taxable period, any Partner with a
        share of Partner Nonrecourse Debt Minimum Gain at the beginning of such
        taxable period shall be allocated items of Partnership income and gain
        for such period (and, if necessary, subsequent periods) in the manner
        and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
        1.704-2(j)(2)(ii), or any successor provisions. For purposes of this
        Section 6.1(d), each Partner's Adjusted Capital Account balance shall be
        determined, and the allocation of income or gain required hereunder
        shall be effected, prior to the application of any other allocations
        pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other
        than an allocation pursuant to Sections 6.1(d)(v) and 6.1(d)(vi), with
        respect to such taxable period. This Section 6.1(d)(ii) is intended to
        comply with the chargeback of items of income and gain requirement in
        Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted
        consistently therewith.

               (iii) Qualified Income Offset. In the event any Partner
        unexpectedly receives any adjustments, allocations or distributions
        described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
        1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of
        Partnership income and gain shall be specially allocated to such Partner
        in an amount and manner sufficient to eliminate, to the extent required
        by the Treasury Regulations promulgated under Section 704(b) of the
        Code, the deficit balance, if any, in its Adjusted Capital Account
        created by such adjustments, allocations or distributions as quickly as
        possible unless such deficit balance is otherwise eliminated pursuant to
        Section 6.1(d)(i) or (ii).

               (iv) Gross Income Allocations. In the event any Partner has a
        deficit balance in its Capital Account at the end of any Partnership
        taxable period in excess of the sum of (A) the amount such Partner is
        required to restore pursuant to the provisions of this Agreement and (B)
        the amount such Partner is deemed obligated to restore pursuant to


                                      -20-
<PAGE>


        Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner
        shall be specially allocated items of Partnership gross income and gain
        in the amount of such excess as quickly as possible; provided, that an
        allocation pursuant to this Section 6.1(d)(iv) shall be made only if and
        to the extent that such Partner would have a deficit balance in its
        Capital Account as adjusted after all other allocations provided for in
        this Section 6.1 have been tentatively made as if this Section
        6.1(d)(iv) were not in this Agreement.

               (v) Nonrecourse Deductions. Nonrecourse Deductions for any
        taxable period shall be allocated to the Partners in accordance with
        their respective Percentage Interests. If the General Partner determines
        in its good faith discretion that the Partnership's Nonrecourse
        Deductions must be allocated in a different ratio to satisfy the safe
        harbor requirements of the Treasury Regulations promulgated under
        Section 704(b) of the Code, the General Partner is authorized, upon
        notice to the other Partners, to revise the prescribed ratio to the
        numerically closest ratio that does satisfy such requirements.

               (vi) Partner Nonrecourse Deductions. Partner Nonrecourse
        Deductions for any taxable period shall be allocated 100% to the Partner
        that bears the Economic Risk of Loss with respect to the Partner
        Nonrecourse Debt to which such Partner Nonrecourse Deductions are
        attributable in accordance with Treasury Regulation Section 1.704-2(i).
        If more than one Partner bears the Economic Risk of Loss with respect to
        a Partner Nonrecourse Debt, such Partner Nonrecourse Deductions
        attributable thereto shall be allocated between or among such Partners
        in accordance with the ratios in which they share such Economic Risk of
        Loss.

               (vii) Nonrecourse Liabilities. For purposes of Treasury
        Regulation Section 1.752-3(a)(3), the Partners agree that Nonrecourse
        Liabilities of the Partnership in excess of the sum of (A) the amount of
        Partnership Minimum Gain and (B) the total amount of Nonrecourse
        Built-in Gain shall be allocated among the Partners in accordance with
        their respective Percentage Interests.

               (viii) Code Section 754 Adjustments. To the extent an adjustment
        to the adjusted tax basis of any Partnership asset pursuant to Section
        734(b) or 743(c) of the Code is required, pursuant to Treasury
        Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in
        determining Capital Accounts, the amount of such adjustment to the
        Capital Accounts shall be treated as an item of gain (if the adjustment
        increases the basis of the asset) or loss (if the adjustment decreases
        such basis), and such item of gain or loss shall be specially allocated
        to the Partners in a manner consistent with the manner in which their
        Capital Accounts are required to be adjusted pursuant to such Section of
        the Treasury Regulations.

               (ix)   Curative Allocation.

                        (A) Notwithstanding any other provision of this Section
                6.1, other than the Required Allocations, the Required
                Allocations shall be taken into account in making the Agreed
                Allocations so that, to the extent possible, the net amount of
                items of income, gain, loss and deduction allocated to each
                Partner pursuant to the


                                      -21-
<PAGE>


                Required Allocations and the Agreed Allocations, together, shall
                be equal to the net amount of such items that would have been
                allocated to each such Partner under the Agreed Allocations had
                the Required Allocations and the related Curative Allocation not
                otherwise been provided in this Section 6.1. Notwithstanding the
                preceding sentence, Required Allocations relating to (1)
                Nonrecourse Deductions shall not be taken into account except to
                the extent that there has been a decrease in Partnership Minimum
                Gain and (2) Partner Nonrecourse Deductions shall not be taken
                into account except to the extent that there has been a decrease
                in Partner Nonrecourse Debt Minimum Gain. Allocations pursuant
                to this Section 6.1(d)(ix)(A) shall only be made with respect to
                Required Allocations to the extent the General Partner
                reasonably determines that such allocations will otherwise be
                inconsistent with the economic agreement among the Partners.
                Further, allocations pursuant to this Section 6.1(d)(ix)(A)
                shall be deferred with respect to allocations pursuant to
                clauses (1) and (2) hereof to the extent the General Partner
                reasonably determines that such allocations are likely to be
                offset by subsequent Required Allocations.

                        (B) The General Partner shall have reasonable
                discretion, with respect to each taxable period, to (1) apply
                the provisions of Section 6.1(d)(ix)(A) in whatever order is
                most likely to minimize the economic distortions that might
                otherwise result from the Required Allocations, and (2) divide
                all allocations pursuant to Section 6.1(d)(ix)(A) among the
                Partners in a manner that is likely to minimize such economic
                distortions.

Allocations for Tax Purposes.

               (a) Except as otherwise provided herein, for federal income tax
purposes, each item of income, gain, loss and deduction shall be allocated among
the Partners in the same manner as its correlative item of "book" income, gain,
loss or deduction is allocated pursuant to Section 6.1.

               (b) In an attempt to eliminate Book-Tax Disparities attributable
to a Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be allocated for
federal income tax purposes among the Partners as follows:

               (i) (A) In the case of a Contributed Property, such items
        attributable thereto shall be allocated among the Partners in the manner
        provided under Section 704(c) of the Code that takes into account the
        variation between the Agreed Value of such property and its adjusted
        basis at the time of contribution; and (B) any item of Residual Gain or
        Residual Loss attributable to a Contributed Property shall be allocated
        among the Partners in the same manner as its correlative item of "book"
        gain or loss is allocated pursuant to Section 6.1.

                (ii) (A) In the case of an Adjusted Property, such items shall
        (1) first, be allocated among the Partners in a manner consistent with
        the principles of Section 704(c) of the Code to take into account the
        Unrealized Gain or Unrealized Loss attributable to


                                      -22-
<PAGE>


        such property and the allocations thereof pursuant to Section 5.5(d)(i)
        or 5.5(d)(ii), and (2) second, in the event such property was originally
        a Contributed Property, be allocated among the Partners in a manner
        consistent with Section 6.2(b)(i)(A); and (B) any item of Residual Gain
        or Residual Loss attributable to an Adjusted Property shall be allocated
        among the Partners in the same manner as its correlative item of "book"
        gain or loss is allocated pursuant to Section 6.1.

               (iii) The General Partner shall apply the principles of Treasury
        Regulation Section 1.704-3(d) to eliminate Book-Tax Disparities.

               (c) For the proper administration of the Partnership and for the
preservation of uniformity of the Units or other limited partner interests of
the MLP (or any class or classes thereof), the General Partner shall have sole
discretion to (i) adopt such conventions as it deems appropriate in determining
the amount of depreciation, amortization and cost recovery deductions; (ii) make
special allocations for federal income tax purposes of income (including,
without limitation, gross income) or deductions; and (iii) amend the provisions
of this Agreement as appropriate (x) to reflect the proposal or promulgation of
Treasury Regulations under Section 704(b) or Section 704(c) of the Code or (y)
otherwise to preserve or achieve uniformity of the Units or other limited
partner interests of the MLP (or any class or classes thereof). The General
Partner may adopt such conventions, make such allocations and make such
amendments to this Agreement as provided in this Section 6.2(c) only if such
conventions, allocations or amendments would not have a material adverse effect
on the Partners, the holders of any class or classes of Units or other limited
partner interests of the MLP issued and outstanding or the Partnership and if
such allocations are consistent with the principles of Section 704 of the Code.

               (d) The General Partner in its discretion may determine to
depreciate or amortize the portion of an adjustment under Section 743(b) of the
Code attributable to unrealized appreciation in any Adjusted Property (to the
extent of the unamortized Book-Tax Disparity) using a predetermined rate derived
from the depreciation or amortization method and useful life applied to the
Partnership's common basis of such property, despite any inconsistency of such
approach with Treasury Regulation Section 1.167(c)-l(a)(6) or any successor
regulation thereto. If the General Partner determines that such reporting
position cannot reasonably be taken, the General Partner may adopt depreciation
and amortization conventions under which all purchasers acquiring limited
partner interests of the MLP in the same month would receive depreciation and
amortization deductions, based upon the same applicable rate as if they had
purchased a direct interest in the Partnership's property. If the General
Partner chooses not to utilize such aggregate method, the General Partner may
use any other reasonable depreciation and amortization conventions to preserve
the uniformity of the intrinsic tax characteristics of any limited partner
interests of the MLP that would not have a material adverse effect on the
Partners or the holders of any class or classes of limited partner interests of
the MLP.

               (e) Any gain allocated to the Partners upon the sale or other
taxable disposition of any Partnership asset shall, to the extent possible,
after taking into account other required allocations of gain pursuant to this
Section 6.2, be characterized as Recapture Income in the same proportions and to
the same extent as such Partners (or their predecessors in interest) have been
allocated any deductions directly or indirectly giving rise to the treatment of
such gains as Recapture Income.


                                      -23-
<PAGE>


               (f) All items of income, gain, loss, deduction and credit
recognized by the Partnership for federal income tax purposes and allocated to
the Partners in accordance with the provisions hereof shall be determined
without regard to any election under Section 754 of the Code which may be made
by the Partnership; provided, however, that such allocations, once made, shall
be adjusted as necessary or appropriate to take into account those adjustments
permitted or required by Sections 734 and 743 of the Code.

               (g) The General Partner may adopt such methods of allocation of
income, gain, loss or deduction between a transferor and a transferee of a
Partnership Interest as it determines necessary, to the extent permitted or
required by Section 706 of the Code and the regulations or rulings promulgated
thereunder.

               (h) Allocations that would otherwise be made to a Partner under
the provisions of this Article VI shall instead be made to the beneficial owner
of Partnership Interests held by a nominee in any case in which the nominee has
furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Code or any other method acceptable to the General
Partner in its sole discretion.

Distributions.

               (a) Within 45 days following the end of each Quarter commencing
with the Quarter ending on March 31, 2001, an amount equal to 100% of Available
Cash with respect to such Quarter shall, subject to Section 17-607 of the
Delaware Act, be distributed in accordance with this Article VI by the
Partnership to the Partners in accordance with their respective Percentage
Interests. The immediately preceding sentence shall not require any distribution
of cash if and to the extent such distribution would be prohibited by applicable
law or by any loan agreement, security agreement, mortgage, debt instrument or
other agreement or obligation to which the Partnership is a party or by which it
is bound or its assets are subject. All distributions required to be made under
this Agreement shall be made subject to Section 17-607 of the Delaware Act.

               (b) In the event of the dissolution and liquidation of the
Partnership, all receipts received during or after the Quarter in which the
Liquidation Date occurs, other than from borrowings described in (a)(ii) of the
definition of Available Cash, shall be applied and distributed solely in
accordance with, and subject to the terms and conditions of, Section 12.4.

               (c) The General Partner shall have the discretion to treat taxes
paid by the Partnership on behalf of, or amounts withheld with respect to, all
or less than all of the Partners, as a distribution of Available Cash to such
Partners.

                                  ARTICLE VII.
                      MANAGEMENT AND OPERATION OF BUSINESS

Management.

               (a) The General Partner shall conduct, direct and manage all
activities of the Partnership. Except as otherwise expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership shall be exclusively vested in the General Partner,


                                      -24-
<PAGE>


and no Limited Partner or Assignee shall have any management power over the
business and affairs of the Partnership. In addition to the powers now or
hereafter granted a general partner of a limited partnership under applicable
law or which are granted to the General Partner under any other provision of
this Agreement, the General Partner, subject to Section 7.3, shall have full
power and authority to do all things and on such terms as it, in its sole
discretion, may deem necessary or appropriate to conduct the business of the
Partnership, to exercise all powers set forth in Section 2.5 and to effectuate
the purposes set forth in Section 2.4, including the following:

               (i) the making of any expenditures, the lending or borrowing of
        money, the assumption or guarantee of, or other contracting for,
        indebtedness and other liabilities, the issuance of evidences of
        indebtedness, including indebtedness that is convertible into a
        Partnership Interest, and the incurring of any other obligations;

               (ii) the making of tax, regulatory and other filings, or
        rendering of periodic or other reports to governmental or other agencies
        having jurisdiction over the business or assets of the Partnership;

               (iii) the acquisition, disposition, mortgage, pledge,
        encumbrance, hypothecation or exchange of any or all of the assets of
        the Partnership or the merger or other combination of the Partnership
        with or into another Person (the matters described in this clause (iii)
        being subject, however, to any prior approval that may be required by
        Section 7.3);

               (iv) the use of the assets of the Partnership (including cash on
        hand) for any purpose consistent with the terms of this Agreement,
        including the financing of the conduct of the operations of the
        Partnership Group, subject to Section 7.6, the lending of funds to other
        Persons (including the MLP and any member of the Partnership Group), the
        repayment of obligations of the MLP or any member of the Partnership
        Group and the making of capital contributions to any member of the
        Partnership Group;

               (v) the negotiation, execution and performance of any contracts,
        conveyances or other instruments (including instruments that limit the
        liability of the Partnership under contractual arrangements to all or
        particular assets of the Partnership, with the other party to the
        contract to have no recourse against the General Partner or its assets
        other than its interest in the Partnership, even if same results in the
        terms of the transaction being less favorable to the Partnership than
        would otherwise be the case);

               (vi) the distribution of Partnership cash;

               (vii) the selection and dismissal of employees (including
        employees having titles such as "president," "vice president,"
        "secretary" and "treasurer") and agents, outside attorneys, accountants,
        consultants and contractors and the determination of their compensation
        and other terms of employment or hiring;

                (viii) the maintenance of such insurance for the benefit of the
        Partnership Group and the Partners as it deems necessary or appropriate;


                                      -25-
<PAGE>


               (ix) the formation of, or acquisition of an interest in, and the
        contribution of property and the making of loans to, any further limited
        or general partnerships, joint ventures, limited liability companies,
        corporations or other relationships subject to the restrictions set
        forth in Section 2.4;

               (x) the control of any matters affecting the rights and
        obligations of the Partnership, including the bringing and defending of
        actions at law or in equity and otherwise engaging in the conduct of
        litigation and the incurring of legal expense and the settlement of
        claims and litigation; and

                (xi) the indemnification of any Person against liabilities and
        contingencies to the extent permitted by law.

               (b) Notwithstanding any other provision of this Agreement, the
MLP Agreement, the Delaware Act or any applicable law, rule or regulation, each
of the Partners and Assignees and each other Person who may acquire an interest
in the Partnership hereby (i) approves, ratifies and confirms the execution,
delivery and performance by the parties thereto of the Partnership Agreement,
the MLP Agreement, the Underwriting Agreement, the Omnibus Agreement, the
Contribution and Conveyance Agreement and the other agreements and documents
described in or filed as exhibits to the Registration Statement that are related
to the transactions contemplated by the Registration Statement; (ii) agrees that
the General Partner (on its own or through any officer of the Partnership) is
authorized to execute, deliver and perform the agreements referred to in clause
(i) of this sentence and the other agreements, acts, transactions and matters
described in or contemplated by the Registration Statement on behalf of the
Partnership without any further act, approval or vote of the Partners or the
Assignees or the other Persons who may acquire an interest in the Partnership;
and (iii) agrees that the execution, delivery or performance by the General
Partner, the MLP, any Group Member or any Affiliate of any of them, of this
Agreement or any agreement authorized or permitted under this Agreement
(including the exercise by the General Partner or any Affiliate of the General
Partner of the rights accorded pursuant to Article XV), shall not constitute a
breach by the General Partner of any duty that the General Partner may owe the
Partnership or the Limited Partners or any other Persons under this Agreement
(or any other agreements) or of any duty stated or implied by law or equity.

Certificate of Limited Partnership.

        The General Partner has caused the Certificate of Limited Partnership to
be filed with the Secretary of State of the State of Delaware as required by the
Delaware Act and shall use all reasonable efforts to cause to be filed such
other certificates or documents as may be determined by the General Partner in
its sole discretion to be reasonable and necessary or appropriate for the
formation, continuation, qualification and operation of a limited partnership
(or a partnership in which the limited partners have limited liability) in the
State of Delaware or any other state in which the Partnership may elect to do
business or own property. To the extent that such action is determined by the
General Partner in its sole discretion to be reasonable and necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate of Limited Partnership and do all things to maintain the
Partnership as a limited partnership (or a partnership or other entity in which
the limited partners have limited liability) under the laws of the State of
Delaware or of any other state in which the Partnership may elect to do business
or own property. Subject to the terms of Section 3.4(a), the General Partner
shall not be required, before or after filing, to deliver or mail a copy of the
Certificate of Limited Partnership, any qualification document or any amendment
thereto to any Limited Partner or Assignee.


                                      -26-
<PAGE>


Restrictions on General Partner's Authority.

               (a) The General Partner may not, without written approval of the
specific act by the Limited Partners or by other written instrument executed and
delivered by the Limited Partners subsequent to the date of this Agreement, take
any action in contravention of this Agreement, including, except as otherwise
provided in this Agreement, (i) committing any act that would make it impossible
to carry on the ordinary business of the Partnership; (ii) possessing
Partnership property, or assigning any rights in specific Partnership property,
for other than a Partnership purpose; (iii) admitting a Person as a Partner;
(iv) amending this Agreement in any manner or (v) transferring its General
Partner Interest.

               (b) Except as provided in Articles XII and XIV, the General
Partner may not sell, exchange or otherwise dispose of all or substantially all
of the Partnership's assets in a single transaction or a series of related
transactions (including by way of merger, consolidation or other combination) or
approve on behalf of the Partnership the sale, exchange or other disposition of
all or substantially all of the assets of the Partnership, without the approval
of the Limited Partners; provided however that this provision shall not preclude
or limit the General Partner's ability to mortgage, pledge, hypothecate or grant
a security interest in all or substantially all of the assets of the Partnership
and shall not apply to any forced sale of any or all of the assets of the
Partnership pursuant to the foreclosure of, or other realization upon, any such
encumbrance. Without the approval of at least a Unit Majority, the General
Partner shall not, on behalf of the MLP, (i) consent to any amendment to this
Agreement or, except as expressly permitted by Section 7.9(d) of the MLP
Agreement, take any action permitted to be taken by a Partner, in either case,
that would have a material adverse effect on the MLP as a Partner or (ii) except
as permitted under Sections 4.6, 11.1 and 11.2 of the MLP Agreement, elect or
cause the MLP to elect a successor general partner of the Partnership.

Reimbursement of the General Partner.

               (a) Except as provided in this Section 7.4 and elsewhere in this
Agreement or in the MLP Agreement, the General Partner shall not be compensated
for its services as General Partner, general partner of the MLP or as general
partner of any Group Member.

               (b) The General Partner shall be reimbursed on a monthly basis,
or such other reasonable basis as the General Partner may determine in its sole
discretion, for (i) all direct and indirect expenses it incurs or payments it
makes on behalf of the Partnership (including salary, bonus, incentive
compensation and other amounts paid to any Person including Affiliates of the
General Partner to perform services for the Partnership or for the General
Partner in the discharge of its duties to the Partnership), and (ii) all other
necessary or appropriate expenses allocable to the Partnership or otherwise
reasonably incurred by the General Partner in connection with operating the
Partnership's business (including expenses allocated to the General Partner by
its Affiliates). The General Partner shall determine the expenses that are
allocable to the Partnership in any reasonable manner determined by the General
Partner in its sole discretion. Reimbursements pursuant to this Section 7.4
shall be in addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 7.7.


                                      -27-
<PAGE>


               (c) Subject to Section 5.7, the General Partner, in its sole
discretion and without the approval of the Limited Partners (who shall have no
right to vote in respect thereof), may propose and adopt on behalf of the
Partnership employee benefit plans, employee programs and employee practices, or
cause the Partnership to issue Partnership Interests in connection with or
pursuant to any employee benefit plan, employee program or employee practice
maintained or sponsored by the General Partner or any of its Affiliates, in each
case for the benefit of employees of the General Partner any Group Member or any
Affiliate, or any of them, in respect of services performed, directly or
indirectly, for the benefit of the Partnership Group. Expenses incurred by the
General Partner in connection with any such plans, programs and practices shall
be reimbursed in accordance with Section 7.4(b). Any and all obligations of the
General Partner under any employee benefit plans, employee programs or employee
practices adopted by the General Partner as permitted by this Section 7.4(c)
shall constitute obligations of the General Partner hereunder and shall be
assumed by any successor General Partner approved pursuant to Section 11.1 or
11.2 or the transferee of or successor to all of the General Partner's General
Partner Interest pursuant to Section 4.2.

Outside Activities.

               (a) After the Closing Date, the General Partner, for so long as
it is the General Partner of the Partnership (i) agrees that its sole business
will be to act as the General Partner of the Partnership, the general partner
and agent of the MLP, and a general partner or managing member of any other
partnership or limited liability company of which the Partnership or the MLP is,
directly or indirectly, a partner or member, as the case may be, and to
undertake activities that are ancillary or related thereto (including being a
limited partner in the MLP), (ii) shall not engage in any business or activity
or incur any debts or liabilities except in connection with or incidental to (A)
its performance as general partner of the Partnership, the MLP or one or more
Group Members or as described in or contemplated by the Registration Statement
or (B) the acquiring, owning or disposing of debt or equity securities in any
Group Member and (iii) except to the extent permitted in the Omnibus Agreement,
shall not, and shall cause its Affiliates not to, engage in any Restricted
Business.

               (b) The Omnibus Agreement, to which the Partnership is a party,
sets forth certain restrictions on the ability of The Williams Companies, Inc.
to engage in Restricted Businesses.

               (c) Except as specifically restricted by Section 7.5(a) and the
Omnibus Agreement, each Indemnitee (other than the General Partner) shall have
the right to engage in businesses of every type and description and other
activities for profit and to engage in and possess an interest in other business
ventures of any and every type or description, whether in businesses engaged in
or anticipated to be engaged in by the MLP or any Group Member, independently or
with others, including business interests and activities in direct competition
with the business and activities of the MLP or any Group Member, and none of the
same shall constitute a breach of this Agreement or any duty express or implied
by law to the MLP or any Group Member or any Partner or Assignee. Neither the
MLP nor any Group Member, any Limited Partner, nor any other Person shall have
any rights by virtue of this Agreement, the MLP Agreement or the partnership
relationship established hereby or thereby in any business ventures of any
Indemnitee.


                                      -28-
<PAGE>


               (d) Subject to the terms of Section 7.5(a), Section 7.5(b),
Section 7.5(c) and the Omnibus Agreement, but otherwise notwithstanding anything
to the contrary in this Agreement, (i) the engaging in competitive activities by
any Indemnitee (other than the General Partner) in accordance with the
provisions of this Section 7.5 is hereby approved by the Partnership and all
Partners, (ii) it shall be deemed not to be a breach of the General Partner's
fiduciary duty or any other obligation of any type whatsoever of the General
Partner for the Indemnitees (other than the General Partner) to engage in such
business interests and activities in preference to or to the exclusion of the
Partnership and (iii) except as set forth in the Omnibus Agreement, the General
Partner and the Indemnities shall have no obligation to present business
opportunities to the Partnership.

               (e) The General Partner and any of its Affiliates may acquire
Units or other MLP Securities in addition to those acquired on the Closing Date
and, except as otherwise provided in this Agreement, shall be entitled to
exercise all rights relating to such Units or MLP Securities.

               (f) The term "Affiliates" when used in Section 7.5(a) and Section
7.5(e) with respect to the General Partner shall not include any Group Member or
any Subsidiary of the MLP or any Group Member.

               (g) Anything in this Agreement to the contrary notwithstanding,
to the extent that provisions of Sections 7.7, 7.8, 7.9, 7.10 or other Sections
of this Agreement purport or are interpreted to have the effect of restricting
the fiduciary duties that might otherwise, as a result of Delaware or other
applicable law, be owed by the General Partner to the Partnership and its
Limited Partners, or to constitute a waiver or consent by the Limited Partners
to any such restriction, such provisions shall be inapplicable and have no
effect in determining whether the General Partner has complied with its
fiduciary duties in connection with determinations made by it under this Section
7.5.

Loans from the General Partner; Loans or Contributions from the Partnership;
Contracts with Affiliates; Certain Restrictions on the General Partner.

               (a) The General Partner or its Affiliates may lend to the MLP or
any Group Member, and the MLP or any Group Member may borrow from the General
Partner or any of its Affiliates, funds needed or desired by the MLP or the
Group Member for such periods of time and in such amounts as the General Partner
may determine; provided, however, that in any such case the lending party may
not charge the borrowing party interest at a rate greater than the rate that
would be charged the borrowing party or impose terms less favorable to the
borrowing party than would be charged or imposed on the borrowing party by
unrelated lenders on comparable loans made on an arm's-length basis (without
reference to the lending party's financial abilities or guarantees). The
borrowing party shall reimburse the lending party for any costs (other than any
additional interest costs) incurred by the lending party in connection with the
borrowing of such funds. For purposes of this Section 7.6(a) and Section 7.6(b),
the term "Group Member" shall include any Affiliate of a Group Member that is
controlled by the Group Member. No Group Member may lend funds to the General
Partner or any of its Affiliates (other than the MLP, a Subsidiary of the MLP or
a Subsidiary of another Group Member).


                                      -29-
<PAGE>


               (b) The Partnership may lend or contribute to any Group Member,
and any Group Member may borrow from the Partnership, funds on terms and
conditions established in the sole discretion of the General Partner; provided,
however, that the Partnership may not charge the Group Member interest at a rate
less than the rate that would be charged to the Group Member (without reference
to the General Partner's financial abilities or guarantees) by unrelated lenders
on comparable loans. The foregoing authority shall be exercised by the General
Partner in its sole discretion and shall not create any right or benefit in
favor of any Group Member or any other Person.

               (c) The General Partner may itself, or may enter into an
agreement with any of its Affiliates to, render services to a Group Member or to
the General Partner in the discharge of its duties as general partner of the
Partnership. Any services rendered to a Group Member by the General Partner or
any of its Affiliates shall be on terms that are fair and reasonable to the
Partnership; provided, however, that the requirements of this Section 7.6(c)
shall be deemed satisfied as to (i) any transaction approved by Special
Approval, (ii) any transaction, the terms of which are no less favorable to the
Partnership Group than those generally being provided to or available from
unrelated third parties or (iii) any transaction that, taking into account the
totality of the relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous to the
Partnership Group), is equitable to the Partnership Group. The provisions of
Section 7.4 shall apply to the rendering of services described in this Section
7.6(c).

               (d) The Partnership Group may transfer assets to joint ventures,
other partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions as are consistent with this Agreement and applicable
law.

               (e) Neither the General Partner nor any of its Affiliates shall
sell, transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions that are
fair and reasonable to the Partnership; provided, however, that the requirements
of this Section 7.6(e) shall be deemed to be satisfied as to (i) the
transactions effected pursuant to Sections 5.2 and 5.3, the Contribution and
Conveyance Agreement and any other transactions described in or contemplated by
the Registration Statement, (ii) any transaction approved by Special Approval,
(iii) any transaction, the terms of which are no less favorable to the
Partnership than those generally being provided to or available from unrelated
third parties, or (iv) any transaction that, taking into account the totality of
the relationships between the parties involved (including other transactions
that may be particularly favorable or advantageous to the Partnership Group), is
equitable to the Partnership.

               (f) The General Partner and its Affiliates will have no
obligation to permit any Group Member to use any facilities or assets of the
General Partner and its Affiliates, except as may be provided in contracts
entered into from time to time specifically dealing with such use, nor shall
there be any obligation on the part of the General Partner or its Affiliates to
enter into such contracts.


                                      -30-
<PAGE>


               (g) Without limitation of Sections 7.6(a) through 7.6(f), and
notwithstanding anything to the contrary in this Agreement, the existence of the
conflicts of interest described in the Registration Statement are hereby
approved by all Partners.

Indemnification.

               (a) To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all Indemnitees shall be
indemnified and held harmless by the Partnership from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in which
any Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as an Indemnitee; provided, that in each case
the Indemnitee acted in good faith and in a manner that such Indemnitee
reasonably believed to be in, or (in the case of a Person other than the General
Partner) not opposed to, the best interests of the Partnership and, with respect
to any criminal proceeding, had no reasonable cause to believe its conduct was
unlawful; provided, further, no indemnification pursuant to this Section 7.7
shall be available to the General Partner with respect to its obligations
incurred pursuant to the Underwriting Agreement or the Contribution and
Conveyance Agreement (other than obligations incurred by the General Partner on
behalf of the MLP or the Partnership). The termination of any action, suit or
proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the
Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership, it being agreed that the General Partner shall not be
personally liable for such indemnification and shall have no obligation to
contribute or loan any monies or property to the Partnership to enable it to
effectuate such indemnification.

               (b) To the fullest extent permitted by law, expenses (including
legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant
to Section 7.7(a) in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Partnership prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by
the Partnership of any undertaking by or on behalf of the Indemnitee to repay
such amount if it shall be determined that the Indemnitee is not entitled to be
indemnified as authorized in this Section 7.7.

               (c) The indemnification provided by this Section 7.7 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, both as to actions in the Indemnitee's capacity as an Indemnitee and
as to actions in any other capacity (including any capacity under the
Underwriting Agreement), and shall continue as to an Indemnitee who has ceased
to serve in such capacity and shall inure to the benefit of the heirs,
successors, assigns and administrators of the Indemnitee.

               (d) The Partnership may purchase and maintain (or reimburse the
General Partner or its Affiliates for the cost of) insurance, on behalf of the
General Partner, its Affiliates and such other Persons as the General Partner
shall determine, against any liability that may be


                                      -31-
<PAGE>


asserted against or expense that may be incurred by such Person in connection
with the Partnership's activities or such Person's activities on behalf of the
Partnership, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this
Agreement.

               (e) For purposes of this Section 7.7, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute "fines" within the meaning of Section 7.7(a); and action taken
or omitted by it with respect to any employee benefit plan in the performance of
its duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, the best interests of the Partnership.

               (f) In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.

               (g) An Indemnitee shall not be denied indemnification in whole or
in part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.

               (h) The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

               (i) No amendment, modification or repeal of this Section 7.7 or
any provision hereof shall in any manner terminate, reduce or impair the right
of any past, present or future Indemnitee to be indemnified by the Partnership,
nor the obligations of the Partnership to indemnify any such Indemnitee under
and in accordance with the provisions of this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.

Liability of Indemnitees.

               (a) Notwithstanding anything to the contrary set forth in this
Agreement, no Indemnitee shall be liable for monetary damages to the
Partnership, the Limited Partners, the Assignees or any other Persons who have
acquired interests in the Units or other Partnership Securities of the MLP, for
losses sustained or liabilities incurred as a result of any act or omission if
such Indemnitee acted in good faith.

               (b) Subject to its obligations and duties as General Partner set
forth in Section 7.1(a), the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents, and the General Partner
shall not be responsible for any misconduct or negligence on the part of any
such agent appointed by the General Partner in good faith.


                                      -32-
<PAGE>


               (c) To the extent that, at law or in equity, an Indemnitee has
duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or to the Limited Partners, the General Partner and any other
Indemnitee acting in connection with the Partnership's business or affairs shall
not be liable to the Partnership or to any Partner for its good faith reliance
on the provisions of this Agreement. The provisions of this Agreement, to the
extent that they restrict or otherwise modify the duties and liabilities of an
Indemnitee otherwise existing at law or in equity, are agreed by the Partners to
replace such other duties and liabilities of such Indemnitee.

               (d) Any amendment, modification or repeal of this Section 7.8 or
any provision hereof shall be prospective only and shall not in any way affect
the limitations on the liability to the Partnership, the Limited Partners, the
General Partner, and the Partnership's and General Partner's directors, officers
and employees under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.

Resolution of Conflicts of Interest.

               (a) Unless otherwise expressly provided in this Agreement or the
MLP Agreement, whenever a potential conflict of interest exists or arises
between the General Partner or any of its Affiliates, on the one hand, and the
Partnership, the MLP, any Partner or any Assignee, on the other, any resolution
or course of action by the General Partner or its Affiliates in respect of such
conflict of interest shall be permitted and deemed approved by all Partners, and
shall not constitute a breach of this Agreement of the MLP Agreement, of any
agreement contemplated herein or therein, or of any duty stated or implied by
law or equity, if the resolution or course of action is, or by operation of this
Agreement is deemed to be, fair and reasonable to the Partnership. The General
Partner shall be authorized but not required in connection with its resolution
of such conflict of interest to seek Special Approval of such resolution. Any
conflict of interest and any resolution of such conflict of interest shall be
conclusively deemed fair and reasonable to the Partnership if such conflict of
interest or resolution is (i) approved by Special Approval (as long as the
material facts known to the General Partner or any of its Affiliates regarding
any proposed transaction were disclosed to the Conflicts Committee at the time
it gave its approval), (ii) on terms no less favorable to the Partnership than
those generally being provided to or available from unrelated third parties or
(iii) fair to the Partnership, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Partnership). The General
Partner may also adopt a resolution or course of action that has not received
Special Approval. The General Partner (including the Conflicts Committee in
connection with Special Approval) shall be authorized in connection with its
determination of what is "fair and reasonable" to the Partnership and in
connection with its resolution of any conflict of interest to consider (A) the
relative interests of any party to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interest; (B) any
customary or accepted industry practices and any customary or historical
dealings with a particular Person; (C) any applicable generally accepted
accounting practices or principles; and (D) such additional factors as the
General Partner (including the Conflicts Committee) determines in its sole
discretion to be relevant, reasonable or appropriate under the circumstances.
Nothing contained in this Agreement, however, is intended to nor shall it be
construed to require the General Partner (including the Conflicts Committee) to


                                      -33-
<PAGE>


consider the interests of any Person other than the Partnership. In the absence
of bad faith by the General Partner, the resolution, action or terms so made,
taken or provided by the General Partner with respect to such matter shall not
constitute a breach of this Agreement or any other agreement contemplated herein
or a breach of any standard of care or duty imposed herein or therein or, to the
extent permitted by law, under the Delaware Act or any other law, rule or
regulation.

               (b) Whenever this Agreement or any other agreement contemplated
hereby provides that the General Partner or any of its Affiliates is permitted
or required to make a decision (i) in its "sole discretion" or "discretion,"
that it deems "necessary or appropriate" or "necessary or advisable" or under a
grant of similar authority or latitude, except as otherwise provided herein, the
General Partner or such Affiliate shall be entitled to consider only such
interests and factors as it desires and shall have no duty or obligation to give
any consideration to any interest of, or factors affecting, the Partnership, the
MLP, any Limited Partner or any Assignee, (ii) it may make such decision in its
sole discretion (regardless of whether there is a reference to "sole discretion"
or "discretion") unless another express standard is provided for, or (iii) in
"good faith" or under another express standard, the General Partner or such
Affiliate shall act under such express standard and shall not be subject to any
other or different standards imposed by this Agreement, the MLP Agreement, any
other agreement contemplated hereby or under the Delaware Act or any other law,
rule or regulation. In addition, any actions taken by the General Partner or
such Affiliate consistent with the standards of "reasonable discretion" set
forth in the definition of Available Cash shall not constitute a breach of any
duty of the General Partner to the Partnership or the Limited Partners. The
General Partner shall have no duty, express or implied, to sell or otherwise
dispose of any asset of the Partnership Group other than in the ordinary course
of business. No borrowing by any Group Member or the approval thereof by the
General Partner shall be deemed to constitute a breach of any duty of the
General Partner to the Partnership or the Limited Partners by reason of the fact
that the purpose or effect of such borrowing is directly or indirectly to (A)
enable distributions to the General Partner or its Affiliates to exceed 1.0101%
of the total amount distributed to all Partners or (B) hasten the expiration of
the Subordination Period or the conversion of any Subordinated Units into Common
Units.

               (c) Whenever a particular transaction, arrangement or resolution
of a conflict of interest is required under this Agreement to be "fair and
reasonable" to any Person, the fair and reasonable nature of such transaction,
arrangement or resolution shall be considered in the context of all similar or
related transactions.

               (d) The Limited Partner hereby authorizes the General Partner, on
behalf of the Partnership as a partner or member of a Group Member, to approve
of actions by the general partner of such Group Member similar to those actions
permitted to be taken by the General Partner pursuant to this Section 7.9.

Other Matters Concerning the General Partner.

               (a) The General Partner may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice,


                                      -34-
<PAGE>


request, consent, order, bond, debenture or other paper or document believed by
it to be genuine and to have been signed or presented by the proper party or
parties.

               (b) The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be
taken in reliance upon the opinion (including an Opinion of Counsel) of such
Persons as to matters that the General Partner reasonably believes to be within
such Person's professional or expert competence shall be conclusively presumed
to have been done or omitted in good faith and in accordance with such opinion.

               (c) The General Partner shall have the right, in respect of any
of its powers or obligations hereunder, to act through any of its duly
authorized officers, a duly appointed attorney or attorneys-in-fact or the duly
authorized officers of the Partnership.

               (d) Any standard of care and duty imposed by this Agreement or
under the Delaware Act or any applicable law, rule or regulation shall be
modified, waived or limited, to the extent permitted by law, as required to
permit the General Partner to act under this Agreement or any other agreement
contemplated by this Agreement and to make any decision pursuant to the
authority prescribed in this Agreement, so long as such action is reasonably
believed by the General Partner to be in, or not inconsistent with, the best
interests of the Partnership.

Reliance by Third Parties.

        Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner and any officer of the General Partner authorized by the General Partner
to act on behalf of and in the name of the Partnership has full power and
authority to encumber, sell or otherwise use in any manner any and all assets of
the Partnership and to enter into any authorized contracts on behalf of the
Partnership, and such Person shall be entitled to deal with the General Partner
or any such officer as if it were the Partnership's sole party in interest, both
legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies that may be available against such Person to contest,
negate or disaffirm any action of the General Partner or any such officer in
connection with any such dealing. In no event shall any Person dealing with the
General Partner or any such officer or its representatives be obligated to
ascertain that the terms of the Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
any such officer or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner or
its representatives shall be conclusive evidence in favor of any and every
Person relying thereon or claiming thereunder that (a) at the time of the
execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering
such certificate, document or instrument was duly authorized and empowered to do
so for and on behalf of the Partnership and (c) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.


                                      -35-
<PAGE>


                                  ARTICLE VIII.
                     BOOKS, RECORDS, ACCOUNTING AND REPORTS

Records and Accounting.

        The General Partner shall keep or cause to be kept at the principal
office of the Partnership appropriate books and records with respect to the
Partnership's business, including all books and records necessary to provide to
the Limited Partners any information required to be provided pursuant to Section
3.4(a). Any books and records maintained by or on behalf of the Partnership in
the regular course of its business, including books of account and records of
Partnership proceedings, may be kept on, or be in the form of, computer disks,
hard drives, punch cards, magnetic tape, photographs, micrographics or any other
information storage device. The books of the Partnership shall be maintained,
for financial reporting purposes, on an accrual basis in accordance with U.S.
GAAP.

Fiscal Year.

        The fiscal year of the Partnership shall be a fiscal year ending
December 31.

                                   ARTICLE IX.
                                   TAX MATTERS

Tax Returns and Information.

        The Partnership shall timely file all returns of the Partnership that
are required for federal, state and local income tax purposes on the basis of
the accrual method and a taxable year ending on December 31. The tax information
reasonably required by the Partners for federal and state income tax reporting
purposes with respect to a taxable year shall be furnished to them within 90
days of the close of the calendar year in which the Partnership's taxable year
ends. The classification, realization and recognition of income, gain, losses
and deductions and other items shall be on the accrual method of accounting for
federal income tax purposes.

Tax Elections.

               (a) The Partnership shall make the election under Section 754 of
the Code in accordance with applicable regulations thereunder, subject to the
reservation of the right to seek to revoke any such election upon the General
Partner's determination that such revocation is in the best interests of the
Limited Partners.

               (b) The Partnership shall elect to deduct expenses incurred in
organizing the Partnership ratably over a sixty-month period as provided in
Section 709 of the Code.

               (c) Except as otherwise provided herein, the General Partner
shall determine whether the Partnership should make any other elections
permitted by the Code.

Tax Controversies.

        Subject to the provisions hereof, the General Partner is designated as
the Tax Matters Partner (as defined in the Code) and is authorized and required
to represent the Partnership (at the Partnership's expense) in connection with
all examinations of the Partnership's affairs by tax authorities, including
resulting administrative and judicial proceedings, and to expend Partnership
funds for professional services and costs associated therewith. Each Partner
agrees to cooperate with the General Partner and to do or refrain from doing any
or all things reasonably required by the General Partner to conduct such
proceedings.


                                      -36-
<PAGE>


Withholding.

        Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines in its discretion to
be necessary or appropriate to cause the Partnership to comply with any
withholding requirements established under the Code or any other federal, state
or local law including, without limitation, pursuant to Sections 1441, 1442,
1445 and 1446 of the Code. To the extent that the Partnership is required or
elects to withhold and pay over to any taxing authority any amount resulting
from the allocation or distribution of income to any Partner or Assignee
(including, without limitation, by reason of Section 1446 of the Code), the
amount withheld may at the discretion of the General Partner be treated by the
Partnership as a distribution of cash pursuant to Section 6.3 in the amount of
such withholding from such Partner.

                                   ARTICLE X.
                              ADMISSION OF PARTNERS

Admission of Partners.

        Upon the consummation of the transfers and conveyances described in
Section 5.2, the General Partner shall be the sole general partner of the
Partnership and the MLP shall be the sole limited partner of the Partnership.

Admission of Substituted Limited Partner.

        By transfer of a Limited Partner Interest in accordance with Article IV,
the transferor shall be deemed to have given the transferee the right to seek
admission as a Substituted Limited Partner subject to the conditions of, and in
the manner permitted under, this Agreement. A transferor of a Limited Partner
Interest shall, however, only have the authority to convey to a purchaser or
other transferee (a) the right to negotiate such Limited Partner Interest to a
purchaser or other transferee and (b) the right to request admission as a
Substituted Limited Partner to such purchaser or other transferee in respect of
the transferred Limited Partner Interests. Each transferee of a Limited Partner
Interest shall be an Assignee and be deemed to have applied to become a
Substituted Limited Partner with respect to the Limited Partner Interests so
transferred to such Person. Such Assignee shall become a Substituted Limited
Partner (x) at such time as the General Partner consents thereto, which consent
may be given or withheld in the General Partner's discretion, and (y) when any
such admission is shown on the books and records of the Partnership. If such
consent is withheld, such transferee shall remain an Assignee. An Assignee shall
have an interest in the Partnership equivalent to that of a Limited Partner with
respect to allocations and distributions, including liquidating distributions,
of the Partnership. With respect to voting rights attributable to Limited
Partner Interests that are held by Assignees, the General Partner shall be
deemed to be the Limited Partner with respect thereto and shall, in exercising
the voting rights in respect of such Limited Partner Interests on any matter,
vote such Limited Partner Interests at the written direction of the Assignee. If
no such written direction is received, such Partnership Interests will not be
voted. An Assignee shall have no other rights of a Limited Partner.

Admission of Additional Limited Partners.

               (a) A Person (other than the General Partner, the MLP or a
Substituted Limited Partner) who makes a Capital Contribution to the Partnership
in accordance with this Agreement shall be admitted to the Partnership as an
Additional Limited Partner only upon furnishing to the General Partner (i)
evidence of acceptance in form satisfactory to the General Partner of all of the
terms and conditions of this Agreement, including the power of attorney granted
in Section 2.6, and (ii) such other documents or instruments as may be required
in the discretion of the General Partner to effect such Person's admission as an
Additional Limited Partner.

               (b) Notwithstanding anything to the contrary in this Section
10.3, no Person shall be admitted as an Additional Limited Partner without the
consent of the General Partner,


                                      -37-
<PAGE>


which consent may be given or withheld in the General Partner's discretion. The
admission of any Person as an Additional Limited Partner shall become effective
on the date upon which the name of such Person is recorded as such in the books
and records of the Partnership, following the consent of the General Partner to
such admission.

Admission of Successor or Transferee General Partner.

        A successor General Partner approved pursuant to Section 11.1 or 11.2 or
the transferee of or successor to all of the General Partner's Partnership
Interest pursuant to Section 4.2 who is proposed to be admitted as a successor
General Partner shall, subject to compliance with the terms of Section 11.3, if
applicable, be admitted to the Partnership as the General Partner, effective
immediately prior to the withdrawal or removal of the predecessor or
transferring General Partner pursuant to Section 11.1 or 11.2 or the transfer of
the General Partner Interest pursuant to Section 4.2, provided, however, that no
such successor shall be admitted to the Partnership until compliance with the
terms of Section 4.2 has occurred and such successor has executed and delivered
such other documents or instruments as may be required to effect such admission.
Any such successor shall, subject to the terms hereof, carry on the business of
the members of the Partnership Group without dissolution.

Amendment of Agreement and Certificate of Limited Partnership.

        To effect the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Delaware Act to
amend the records of the Partnership to reflect such admission and, if
necessary, to prepare as soon as practicable an amendment to this Agreement and,
if required by law, the General Partner shall prepare and file an amendment to
the Certificate of Limited Partnership, and the General Partner may for this
purpose, among others, exercise the power of attorney granted pursuant to
Section 2.6.

                                   ARTICLE XI.
                        WITHDRAWAL OR REMOVAL OF PARTNERS

Withdrawal of the General Partner.

               (a) The General Partner shall be deemed to have withdrawn from
the Partnership upon the occurrence of any one of the following events (each
such event herein referred to as an "Event of Withdrawal");

                (i) The General Partner voluntarily withdraws from the
        Partnership by giving written notice to the other Partners;

                (ii) The General Partner transfers all of its rights as General
        Partner pursuant to Section 4.2;

                (iii) The General Partner is removed pursuant to Section 11.2;

                (iv) The General Partner withdraws from, or is removed as the
        General Partner of, the MLP;

                (v) The General Partner (A) makes a general assignment for the
        benefit of creditors; (B) files a voluntary bankruptcy petition for
        relief under Chapter 7 of the


                                      -38-
<PAGE>


        United States Bankruptcy Code; (C) files a petition or answer seeking
        for itself a liquidation, dissolution or similar relief (but not a
        reorganization) under any law; (D) files an answer or other pleading
        admitting or failing to contest the material allegations of a petition
        filed against the General Partner in a proceeding of the type described
        in clauses (A)-(C) of this Section 11.1(a)(v); or (E) seeks, consents to
        or acquiesces in the appointment of a trustee (but not a debtor in
        possession), receiver or liquidator of the General Partner or of all or
        any substantial part of its properties;

               (vi) A final and non-appealable order of relief under Chapter 7
        of the United States Bankruptcy Code is entered by a court with
        appropriate jurisdiction pursuant to a voluntary or involuntary petition
        by or against the General Partner; or

               (vii) (A) in the event the General Partner is a corporation, a
        certificate of dissolution or its equivalent is filed for the General
        Partner, or 90 days expire after the date of notice to the General
        Partner of revocation of its charter without a reinstatement of its
        charter, under the laws of its state of incorporation; (B) in the event
        the General Partner is a partnership or limited liability company, the
        dissolution and commencement of winding up of the General Partner; (C)
        in the event the General Partner is acting in such capacity by virtue of
        being a trustee of a trust, the termination of the trust; (D) in the
        event the General Partner is a natural person, his death or adjudication
        of incompetency; and (E) otherwise in the event of the termination of
        the General Partner.

        If an Event of Withdrawal specified in Section 11.1(a)(iv)(with respect
to withdrawal), (v), (vi) or (vii)(A), (B), (C) or (E) occurs, the withdrawing
General Partner shall give notice to the Limited Partners within 30 days after
such occurrence. The Partners hereby agree that only the Events of Withdrawal
described in this Section 11.1 shall result in the withdrawal of the General
Partner from the Partnership.

               (b) Withdrawal of the General Partner from the Partnership upon
the occurrence of an Event of Withdrawal shall not constitute a breach of this
Agreement under the following circumstances: (i) at any time during the period
beginning on the Closing Date and ending at 12:00 midnight, Eastern Standard
Time, on December 31, 2010, the General Partner voluntarily withdraws by giving
at least 90 days' advance notice of its intention to withdraw to the Limited
Partners; provided that prior to the effective date of such withdrawal, the
withdrawal is approved by the Limited Partners and the General Partner delivers
to the Partnership an Opinion of Counsel ("Withdrawal Opinion of Counsel") that
such withdrawal (following the selection of the successor General Partner) would
not result in the loss of the limited liability of any Limited Partner or of the
limited partners of the MLP or cause the Partnership or the MLP to be treated as
an association taxable as a corporation or otherwise to be taxed as an entity
for federal income tax purposes (to the extent not previously treated as such);
(ii) at any time after 12:00 midnight, Eastern Standard Time, on December 31,
2010, the General Partner voluntarily withdraws by giving at least 90 days'
advance notice to the Limited Partners, such withdrawal to take effect on the
date specified in such notice; (iii) at any time that the General Partner ceases
to be the General Partner pursuant to Section 11.1(a)(ii), (iii) or (iv). If the
General Partner gives a notice of withdrawal pursuant to Section 11.1(a)(i)
hereof or Section 11.1(a)(i) of the MLP Agreement, the Limited Partners may,
prior to the effective date of such withdrawal, elect a successor General
Partner; provided, however, that such successor shall be the same person, if
any, that is elected by the limited partners of the MLP pursuant to Section 11.1
of the MLP Agreement as the successor to the general partner of the MLP. If,
prior to the effective date of


                                      -39-
<PAGE>


the General Partner's withdrawal, a successor is not selected by the Limited
Partners as provided herein or the Partnership does not receive a Withdrawal
Opinion of Counsel, the Partnership shall be dissolved in accordance with
Section 12.1. Any successor General Partner elected in accordance with the terms
of this Section 11.1 shall be subject to the provisions of Section 10.3.

Removal of the General Partner.

               (a) The General Partner shall be removed if the General Partner
is removed as the general partner of the MLP pursuant to Section 11.2 of the MLP
Agreement. Such removal shall be effective concurrently with the effectiveness
of the removal of the General Partner as the general partner of the MLP pursuant
to the terms of the MLP Agreement. If a successor general partner for the MLP is
elected in connection with the removal of the General Partner, such successor
general partner for the MLP shall, upon admission pursuant to Article X,
automatically become the successor General Partner of the Partnership. The
admission of any such successor General Partner to the Partnership shall be
subject to the provisions of Section 10.3.

               (b) The General Partner may be removed by the MLP. Upon the
removal of the General Partner by the MLP, the MLP shall elect a successor
general partner for the Partnership. The admission of any such successor General
Partner to the Partnership shall be subject to the provisions of Section 10.3.

Interest of Departing Partner.

               (a) The Partnership Interest of the Departing Partner departing
as a result of withdrawal or removal pursuant to Section 11.1 or 11.2 shall
(unless it is otherwise required to be converted into Common Units pursuant to
Section 11.3(b) of the MLP Agreement) be purchased by the successor to the
Departing Partner for cash in the manner specified in the MLP Agreement. Such
purchase (or conversion into Common Units, as applicable) shall be a condition
to the admission to the Partnership of the successor as the General Partner. Any
successor General Partner shall indemnify the Departing Partner as to all debts
and liabilities of the Partnership arising on or after the effective date of the
withdrawal or removal of the Departing Partner.

               (b) The Departing Partner shall be entitled to receive all
reimbursements due such Departing Partner pursuant to Section 7.4, including any
employee-related liabilities (including severance liabilities), incurred in
connection with the termination of any employees employed by such Departing
Partner for the benefit of the Partnership.

Withdrawal of a Limited Partner.

        Without the prior written consent of the General Partner, which may be
granted or withheld in its sole discretion, and except as provided in Section
10.1, no Limited Partner shall have the right to withdraw from the Partnership.


                                      -40-
<PAGE>


                                  ARTICLE XII.
                           DISSOLUTION AND LIQUIDATION

Dissolution.

        The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the removal or withdrawal of the General Partner, if a successor General Partner
is elected pursuant to Section 11.1 or 11.2, the Partnership shall not be
dissolved and such successor General Partner shall continue the business of the
Partnership. The Partnership shall dissolve, and (subject to Section 12.2) its
affairs shall be wound up, upon:

               (a) an Event of Withdrawal of the General Partner as provided in
Section 11.1(a) (other than Section 11.1(a)(ii)), unless a successor is elected
and an Opinion of Counsel is received as provided in Section 11.1(b) or 11.2 and
such successor is admitted to the Partnership pursuant to Section 10.4;

               (b) an election to dissolve the Partnership by the General
Partner that is approved by all of the Limited Partners;

               (c) the entry of a decree of judicial dissolution of the
Partnership pursuant to the provisions of the Delaware Act;

               (d) the sale of all or substantially all of the assets and
properties of the Partnership Group; or

               (e) the dissolution of the MLP.

Continuation of the Business of the Partnership After Dissolution.

        Upon (a) dissolution of the Partnership following an Event of Withdrawal
caused by the withdrawal or removal of the General Partner as provided in
Section 11.1(a)(i) or (iii) and the failure of the Partners to select a
successor to such Departing Partner pursuant to Section 11.1 or 11.2, then
within 90 days thereafter, or (b) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v) or
(vi) of the MLP Agreement, then, to the maximum extent permitted by law, within
180 days thereafter, all of the Limited Partners may elect to reconstitute the
Partnership and continue its business on the same terms and conditions set forth
in this Agreement by forming a new limited partnership on terms identical to
those set forth in this Agreement and having as a general partner a Person
approved by a majority in interest of the Limited Partners. In addition, upon
dissolution of the Partnership pursuant to Section 12.1(e), if the MLP is
reconstituted pursuant to Section 12.2 of the MLP Agreement, the reconstituted
MLP may, within 180 days after such event of dissolution, acting alone,
regardless of whether there are any other Limited Partners, elect to
reconstitute the Partnership in accordance with the immediately preceding
sentence. Upon any such election by the Limited Partners or the MLP, as the case
may be, all Partners shall be bound thereby and shall be deemed to have approved
same. Unless such an election is made within the applicable time period as set
forth above, the Partnership shall conduct only activities necessary to wind up
its affairs. If such an election is so made, then:

               (a) the reconstituted Partnership shall continue until dissolved
in accordance with this Article XII;

               (b) if the successor General Partner is not the former General
Partner, then the interest of the former General Partner shall be purchased by
the successor General Partner or converted into Common Units as provided in the
MLP Agreement; and


                                      -41-
<PAGE>


               (c) all necessary steps shall be taken to cancel this Agreement
and the Certificate of Limited Partnership and to enter into and, as necessary,
to file, a new partnership agreement and certificate of limited partnership, and
the successor General Partner may for this purpose exercise the power of
attorney granted the General Partner pursuant to Section 2.6; provided, that the
right to approve a successor General Partner and to reconstitute and to continue
the business of the Partnership shall not exist and may not be exercised unless
the Partnership has received an Opinion of Counsel that (x) the exercise of the
right would not result in the loss of limited liability of the Limited Partners
or any limited partner of the MLP and (y) neither the Partnership, the
reconstituted limited partnership, the MLP nor any Group Member would be treated
as an association taxable as a corporation or otherwise be taxable as an entity
for federal income tax purposes upon the exercise of such right to continue.

Liquidator.

        Upon dissolution of the Partnership, unless the Partnership is continued
under an election to reconstitute and continue the Partnership pursuant to
Section 12.2, the General Partner shall select one or more Persons to act as
Liquidator. The Liquidator (if other than the General Partner) shall be entitled
to receive such compensation for its services as may be approved by a majority
of the Limited Partners. The Liquidator (if other than the General Partner)
shall agree not to resign at any time without 15 days' prior notice and may be
removed at any time, with or without cause, by notice of removal approved by a
majority in interest of the Limited Partners. Upon dissolution, removal or
resignation of the Liquidator, a successor and substitute Liquidator (who shall
have and succeed to all rights, powers and duties of the original Liquidator)
shall within 30 days thereafter be approved by at least a majority in interest
of the Limited Partners. The right to approve a successor or substitute
Liquidator in the manner provided herein shall be deemed to refer also to any
such successor or substitute Liquidator approved in the manner herein provided.
Except as expressly provided in this Article XII, the Liquidator approved in the
manner provided herein shall have and may exercise, without further
authorization or consent of any of the parties hereto, all of the powers
conferred upon the General Partner under the terms of this Agreement (but
subject to all of the applicable limitations, contractual and otherwise, upon
the exercise of such powers, other than the limitation on sale set forth in
Section 7.3(b)) to the extent necessary or desirable in the good faith judgment
of the Liquidator to carry out the duties and functions of the Liquidator
hereunder for and during such period of time as shall be reasonably required in
the good faith judgment of the Liquidator to complete the winding up and
liquidation of the Partnership as provided for herein.

Liquidation.

        The Liquidator shall proceed to dispose of the assets of the
Partnership, discharge its liabilities, and otherwise wind up its affairs in
such manner and over such period as the Liquidator determines to be in the best
interest of the Partners, subject to Section 17-804 of the Delaware Act and the
following:

               (a) Disposition of Assets. The assets may be disposed of by
public or private sale or by distribution in kind to one or more Partners on
such terms as the Liquidator and such Partner or Partners may agree. If any
property is distributed in kind, the Partner receiving the property shall be
deemed for purposes of Section 12.4(c) to have received cash equal to its fair
market value; and contemporaneously therewith, appropriate cash distributions
must be made to the other Partners. The Liquidator may, in its absolute
discretion, defer liquidation or distribution of the Partnership's assets for a
reasonable time if it determines that an immediate sale or distribution of all
or some of the Partnership's assets would be impractical or would cause undue
loss to the Partners. The Liquidator may, in its absolute discretion, distribute
the Partnership's assets, in whole or in part, in kind if it determines that a
sale would be impractical or would cause undue loss to the Partners.


                                      -42-
<PAGE>


               (b) Discharge of Liabilities. Liabilities of the Partnership
include amounts owed to the Liquidator as compensation for serving in such
capacity (subject to the terms of Section 12.3) and amounts owed to Partners
otherwise than in respect of their distribution rights under Article VI. With
respect to any liability that is contingent, conditional or unmatured or is
otherwise not yet due and payable, the Liquidator shall either settle such claim
for such amount as it thinks appropriate or establish a reserve of cash or other
assets to provide for its payment. When paid, any unused portion of the reserve
shall be distributed as additional liquidation proceeds.

               (c) Liquidation Distributions. All property and all cash in
excess of that required to discharge liabilities as provided in Section 12.4(b)
shall be distributed to the Partners in accordance with, and to the extent of,
the positive balances in their respective Capital Accounts, as determined after
taking into account all Capital Account adjustments (other than those made by
reason of distributions pursuant to this Section 12.4(c)) for the taxable year
of the Partnership during which the liquidation of the Partnership occurs (with
such date of occurrence being determined pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such
taxable year (or, if later, within 90 days after said date of such occurrence).

Cancellation of Certificate of Limited Partnership.

        Upon the completion of the distribution of Partnership cash and property
as provided in Section 12.4 in connection with the liquidation of the
Partnership, the Partnership shall be terminated and the Certificate of Limited
Partnership, and all qualifications of the Partnership as a foreign limited
partnership in jurisdictions other than the State of Delaware, shall be canceled
and such other actions as may be necessary to terminate the Partnership shall be
taken.

Return of Contributions.

        The General Partner shall not be personally liable for, and shall have
no obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate, the return of the Capital Contributions of the Limited
Partners, or any portion thereof, it being expressly understood that any such
return shall be made solely from Partnership assets.

Waiver of Partition.

        To the maximum extent permitted by law, each Partner hereby waives any
right to partition of the Partnership property.

Capital Account Restoration.

        No Limited Partner shall have any obligation to restore any negative
balance in its Capital Account upon liquidation of the Partnership. The General
Partner shall be obligated to restore any negative balance in its Capital
Account upon liquidation of its interest in the Partnership by the end of the
taxable year of the Partnership during which such liquidation occurs, or, if
later, within 90 days after the date of such liquidation.


                                      -43-
<PAGE>


                                  ARTICLE XIII.
                       AMENDMENT OF PARTNERSHIP AGREEMENT

Amendment to be Adopted Solely by the General Partner.

        Each Partner agrees that the General Partner, without the approval of
any Partner or Assignee, may amend any provision of this Agreement and execute,
swear to, acknowledge, deliver, file and record whatever documents may be
required in connection therewith, to reflect:

               (a) a change in the name of the Partnership, the location of the
principal place of business of the Partnership, the registered agent of the
Partnership or the registered office of the Partnership;

               (b) admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;

               (c) a change that, in the sole discretion of the General Partner,
is necessary or advisable to qualify or continue the qualification of the
Partnership as a limited partnership or a partnership in which the Limited
Partners have limited liability under the laws of any state or to ensure that no
Group Member will be treated as an association taxable as a corporation or
otherwise taxed as an entity for federal income tax purposes;

               (d) a change that, in the discretion of the General Partner, (i)
does not adversely affect the Limited Partners (including any particular class
of Partnership Interests as compared to other classes of Partnership Interests)
in any material respect, (ii) is necessary or advisable to (A) satisfy any
requirements, conditions or guidelines contained in any opinion, directive,
order, ruling or regulation of any federal or state agency or judicial authority
or contained in any federal or state statute (including the Delaware Act) or (B)
facilitate the trading of limited partner interests of the MLP (including the
division of any class or classes of outstanding limited partner interests of the
MLP into different classes to facilitate uniformity of tax consequences within
such classes of limited partner interests of the MLP) or comply with any rule,
regulation, guideline or requirement of any National Securities Exchange on
which such limited partner interests are or will be listed for trading,
compliance with any of which the General Partner determines in its discretion to
be in the best interests of the MLP and the limited partners of the MLP, (iii)
is required to effect the intent expressed in the Registration Statement or the
intent of the provisions of this Agreement or is otherwise contemplated by this
Agreement or (iv) is required to conform the provisions of this Agreement with
the provisions of the MLP Agreement as the provisions of the MLP Agreement may
be amended, supplemented or restated from time to time;

               (e) a change in the fiscal year or taxable year of the
Partnership and any changes that, in the discretion of the General Partner, are
necessary or advisable as a result of a change in the fiscal year or taxable
year of the Partnership including, if the General Partner shall so determine, a
change in the definition of "Quarter" and the dates on which distributions are
to be made by the Partnership;

               (f) an amendment that is necessary, in the Opinion of Counsel, to
prevent the Partnership, or the General Partner or its members, directors,
officers, trustees or agents from in


                                      -44-
<PAGE>


any manner being subjected to the provisions of the Investment Company Act of
1940, as amended, the Investment Advisers Act of 1940, as amended, or "plan
asset" regulations adopted under the Employee Retirement Income Security Act of
1974, as amended, regardless of whether such are substantially similar to plan
asset regulations currently applied or proposed by the United States Department
of Labor;

               (g) any amendment expressly permitted in this Agreement to be
made by the General Partner acting alone;

               (h) an amendment effected, necessitated or contemplated by a
Merger Agreement approved in accordance with Section 14.3;

               (i) an amendment that, in the discretion of the General Partner,
is necessary or advisable to reflect, account for and deal with appropriately
the formation by the Partnership of, or investment by the Partnership in, any
corporation, partnership, joint venture, limited liability company or other
entity, in connection with the conduct by the Partnership of activities
permitted by the terms of Section 2.4;

               (j) a merger or conveyance pursuant to Section 14.3(d); or

               (k) any other amendments substantially similar to the foregoing.

Amendment Procedures.

        Except with respect to amendments of the type described in Section 13.1,
all amendments to this Agreement shall be made in accordance with the following
requirements: Amendments to this Agreement may be proposed only by or with the
consent of the General Partner which consent may be given or withheld in its
sole discretion. A proposed amendment shall be effective upon its approval by
the Limited Partners.

                                  ARTICLE XIV.
                                     MERGER

Authority.

        The Partnership may merge or consolidate with one or more corporations,
limited liability companies, business trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including a
general partnership or limited partnership, formed under the laws of the State
of Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation ("Merger Agreement") in accordance
with this Article XIV.

Procedure for Merger or Consolidation.

        Merger or consolidation of the Partnership pursuant to this Article XIV
requires the prior approval of the General Partner. If the General Partner shall
determine, in the exercise of its discretion, to consent to the merger or
consolidation, the General Partner shall approve the Merger Agreement, which
shall set forth:

               (a) The names and jurisdictions of formation or organization of
each of the business entities proposing to merge or consolidate;


                                      -45-
<PAGE>


               (b) The name and jurisdiction of formation or organization of the
business entity that is to survive the proposed merger or consolidation (the
"Surviving Business Entity");

               (c) The terms and conditions of the proposed merger or
consolidation;

               (d) The manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property or
general or limited partner interests, rights, securities or obligations of the
Surviving Business Entity; and (i) if any general or limited partner interests,
securities or rights of any constituent business entity are not to be exchanged
or converted solely for, or into, cash, property or general or limited partner
interests, rights, securities or obligations of the Surviving Business Entity,
the cash, property or general or limited partner interests, rights, securities
or obligations of any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such general or
limited partner interests, securities or rights are to receive in exchange for,
or upon conversion of their general or limited partner interests, securities or
rights, and (ii) in the case of securities represented by certificates, upon the
surrender of such certificates, which cash, property or general or limited
partner interests, rights, securities or obligations of the Surviving Business
Entity or any general or limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof, are to be
delivered;

               (e) A statement of any changes in the constituent documents or
the adoption of new constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust, certificate or agreement
of limited partnership or other similar charter or governing document) of the
Surviving Business Entity to be effected by such merger or consolidation;

               (f) The effective time of the merger, which may be the date of
the filing of the certificate of merger pursuant to Section 14.4 or a later date
specified in or determinable in accordance with the Merger Agreement (provided,
that if the effective time of the merger is to be later than the date of the
filing of the certificate of merger, the effective time shall be fixed no later
than the time of the filing of the certificate of merger and stated therein);
and

               (g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the General Partner.

Approval by Limited Partners of Merger or Consolidation.

               (a) Except as provided in Section 14.3(d), the General Partner,
upon its approval of the Merger Agreement, shall direct that the Merger
Agreement be submitted to a vote of the Limited Partners, whether at a special
meeting or by written consent, in either case in accordance with the
requirements of Article XIII. A copy or a summary of the Merger Agreement shall
be included in or enclosed with the notice of a special meeting or the written
consent.

               (b) Except as provided in Section 14.3(d), the Merger Agreement
shall be approved upon receiving the affirmative vote or consent of the Limited
Partners.


                                      -46-
<PAGE>


               (c) Except as provided in Section 14.3(d), after such approval by
vote or consent of the Limited Partners, and at any time prior to the filing of
the certificate of merger pursuant to Section 14.4, the merger or consolidation
may be abandoned pursuant to provisions therefor, if any, set forth in the
Merger Agreement.

               (d) Notwithstanding anything else contained in this Article XIV
or in this Agreement, the General Partner is permitted, in its discretion,
without Limited Partner approval, to merge the Partnership or any Group Member
into, or convey all of the Partnership's assets to, another limited liability
entity which shall be newly formed and shall have no assets, liabilities or
operations at the time of such Merger other than those it receives from the
Partnership or other Group Member if (i) the General Partner has received an
Opinion of Counsel that the merger or conveyance, as the case may be, would not
result in the loss of the limited liability of any Limited Partner or any
limited partner in the MLP or cause the Partnership or the MLP to be treated as
an association taxable as a corporation or otherwise to be taxed as an entity
for federal income tax purposes (to the extent not previously treated as such),
(ii) the sole purpose of such merger or conveyance is to effect a mere change in
the legal form of the Partnership into another limited liability entity and
(iii) the governing instruments of the new entity provide the Limited Partners
and the General Partner with substantially the same rights and obligations as
are herein contained.

Certificate of Merger.

        Upon the required approval by the General Partner and the Limited
Partners of a Merger Agreement, a certificate of merger shall be executed and
filed with the Secretary of State of the State of Delaware in conformity with
the requirements of the Delaware Act.

Effect of Merger.

               (a) At the effective time of the certificate of merger:

               (i) all of the rights, privileges and powers of each of the
        business entities that has merged or consolidated, and all property,
        real, personal and mixed, and all debts due to any of those business
        entities and all other things and causes of action belonging to each of
        those business entities, shall be vested in the Surviving Business
        Entity and after the merger or consolidation shall be the property of
        the Surviving Business Entity to the extent they were of each
        constituent business entity;

               (ii) the title to any real property vested by deed or otherwise
        in any of those constituent business entities shall not revert and is
        not in any way impaired because of the merger or consolidation;

               (iii) all rights of creditors and all liens on or security
        interests in property of any of those constituent business entities
        shall be preserved unimpaired; and

               (iv) all debts, liabilities and duties of those constituent
        business entities shall attach to the Surviving Business Entity and may
        be enforced against it to the same extent as if the debts, liabilities
        and duties had been incurred or contracted by it.


                                      -47-
<PAGE>


               (b) A merger or consolidation effected pursuant to this Article
shall not be deemed to result in a transfer or assignment of assets or
liabilities from one entity to another.

                                   ARTICLE XV.
                               GENERAL PROVISIONS

Addresses and Notices.

        Any notice, demand, request, report or proxy materials required or
permitted to be given or made to a Partner or Assignee under this Agreement
shall be in writing and shall be deemed given or made when delivered in person
or when sent by first class United States mail or by other means of written
communication to the Partner at the address described below. Any notice to the
Partnership shall be deemed given if received by the General Partner at the
principal office of the Partnership designated pursuant to Section 2.3. The
General Partner may rely and shall be protected in relying on any notice or
other document from a Partner, Assignee or other Person if believed by it to be
genuine.

Further Action.

        The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.

Binding Effect.

        This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

Integration.

        This Agreement constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.

Creditors.

        None of the provisions of this Agreement shall be for the benefit of, or
shall be enforceable by, any creditor of the Partnership.

Waiver.

        No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
breach of any other covenant, duty, agreement or condition.

Counterparts.

        This Agreement may be executed in counterparts, all of which together
shall constitute an agreement binding on all the parties hereto, notwithstanding
that all such parties are not signatories to the original or the same
counterpart. Each party shall become bound by this Agreement immediately upon
affixing its signature hereto, independently of the signature of any other
party.


                                      -48-
<PAGE>


Applicable Law.

        This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware, without regard to the principles of conflicts of
law.

Invalidity of Provisions.

        If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

Consent of Partners.

        Each Partner hereby expressly consents and agrees that, whenever in this
Agreement it is specified that an action may be taken upon the affirmative vote
or consent of less than all of the Partners, such action may be so taken upon
the concurrence of less than all of the Partners and each Partner shall be bound
by the results of such action.

                     [Rest of Page Intentionally Left Blank]


                                      -49-
<PAGE>


               IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.

                            GENERAL PARTNER:

                            WILLIAMS GP LLC


                            By:      /s/ Don R. Wellendorf
                               ----------------------------------
                            Name: Don R. Wellendorf
                            Its:  Senior V.P., C.F.O. & Treasurer

                            LIMITED PARTNERS:

                            WILLIAMS ENERGY PARTNERS

                            By:   Williams GP LLC
                            Its:  General Partner

                                  By:   /s/ Don R. Wellendorf
                                     ----------------------------
                                  Name: Don R. Wellendorf
                                  Its: Senior V.P., C.F.O. & Treasurer

                            WILLIAMS NATURAL GAS LIQUIDS, INC.

                            (with respect to Section 5.2 of the Agreement)


                            By:      /s/ Don R. Wellendorf
                               ----------------------------------
                            Name: Don R. Wellendorf
                            Its:  Vice President

                            WILLIAMS ENERGY SERVICES, LLC

                            (with respect to Section 5.2 of the Agreement)


                            By:      /s/ Don R. Wellendorf
                               ----------------------------------
                            Name: Don R. Wellendorf
                            Its:  Vice President - Enterprise Development and
                                  Planning, Strategic

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(D)
<SEQUENCE>5
<FILENAME>d94597ex3-d.txt
<DESCRIPTION>REORGANIZATION AGREEMENT
<TEXT>
<PAGE>
                                                                    EXHIBIT 3(d)

                            REORGANIZATION AGREEMENT

         THIS REORGANIZATION AGREEMENT, dated as of March 4, 2002, is entered
into by and among Williams Energy Partners L.P., a Delaware limited partnership
(the "MLP"), Williams OLP, L.P., a Delaware limited partnership (the "OLP"),
Williams GP LLC, a Delaware limited liability company ("GP LLC") and Williams GP
Inc., a Delaware corporation ("GP Inc.").

                                    RECITALS

         WHEREAS, GP LLC owns a 1% general partner interest in the MLP and a
1.0101% general partner interest in the OLP;

         WHEREAS, the parties to this Agreement have determined that it would be
in their best interests to reorganize the equity ownership structure of the OLP
such that the OLP becomes a 100%-owned subsidiary of the MLP;

         WHEREAS, in order to accomplish the objectives and purposes in the
preceding recital, prior to the date hereof, the MLP has formed GP Inc. and
contributed $1,000 in exchange for all of the capital stock in GP Inc.;

         NOW, THEREFORE, in consideration of their mutual undertakings and
agreements hereunder, the parties to this Agreement undertake and agree as
follows:

                                   ARTICLE I

                                   DEFINITIONS

         1.1 Definitions. In addition to the capitalized terms defined in the
opening paragraph of this Agreement, the following capitalized terms shall have
the meanings given below.

                  "Agreement" means this Reorganization Agreement.

                  "Delaware Act" means the Delaware Revised Uniform Limited
Partnership Act.

                  "MLP Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of Williams Energy Partners L.P. dated as of
February 9, 2001, as the same may be amended or restated pursuant to the terms
hereof.

                  "OLP Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of Williams OLP, L.P. dated as of February 9,
2001, as the same may be amended or restated pursuant to the terms hereof.

                  "Revised OLP General Partner Interest" has the meaning set
forth in Section 2.1.

                  "Revised OLP Limited Partner Interest" has the meaning set
forth in Section 2.2.



                                       1
<PAGE>

                                   ARTICLE II

                          CONTRIBUTIONS AND ASSIGNMENTS

         2.1 Contribution by the MLP to GP Inc. The MLP hereby grants,
contributes, transfers and conveys to GP Inc., its successors and assigns, all
right, title and interest in and to a .001% limited partner interest in the OLP
(the "Revised OLP General Partner Interest") and GP Inc. hereby accepts the
Revised OLP General Partner Interest as a contribution to the capital of GP Inc.

         2.2 Recharacterization of Interests. Effective contemporaneously with
contribution of the Revised OLP General Partner Interest pursuant to Section 2.1
hereof, (i) the Revised OLP General Partner Interest shall be recharacterized as
a general partner interest and (ii) the 1.0101% general partner interest held by
GP LLC in the OLP (the "Revised OLP Limited Partner Interest") shall be
recharacterized as a limited partner interest. The OLP hereby acknowledges
receipt of the opinion of counsel required in Section 4.2 of the OLP Partnership
Agreement.

         2.3 Contribution by GP LLC to the MLP. Effective contemporaneously with
the contribution of the Revised OLP General Partner Interest pursuant to Section
2.1 hereof and the recharacterization of interests pursuant to Section 2.2
hereof, GP LLC hereby grants, contributes, transfers, assigns and conveys to the
MLP, its successors and assigns, all right, title and interest of GP LLC in and
to the Revised OLP Limited Partner Interest, and the MLP hereby accepts the
Revised OLP Limited Partner Interest, as a contribution to the capital of the
MLP in exchange for the increase in the general partner interest of GP LLC in
the MLP as set forth in Section 5.2 hereof.

                                  ARTICLE III

                    SUCCESSION OF GENERAL PARTNER OF THE OLP

         3.1 Withdrawal of GP LLC as General Partner of OLP. Effective
contemporaneously with the contribution of the Revised OLP General Partner
Interest pursuant to Section 2.1 hereof, the recharacterization of interests
pursuant to Section 2.2 hereof and pursuant to Section 11.1 of the OLP
Partnership Agreement, GP LLC hereby ceases to be and withdraws as general
partner of the OLP and proposes GP Inc. to act and serve as sole general partner
of the OLP. The OLP acknowledges receipt of the opinion of counsel required in
Section 11.1(b) of the OLP Partnership Agreement.

         3.2 GP Inc. as Successor General Partner of OLP. Effective
contemporaneously with (i) GP Inc.'s acceptance of the contributions to GP Inc.
of the Revised OLP General Partner Interest pursuant to Section 2.1 and the
recharacterization of such interest pursuant to Section 2.2 and (ii) the
cessation and withdrawal of GP LLC as general partner of the OLP, GP Inc.
accepts and agrees to duly and timely pay, perform and discharge the rights,
duties and obligations of the general partner of the OLP and all of the terms
and conditions of the OLP Partnership Agreement in accordance with Section 10.4
of the OLP Partnership Agreement, and GP Inc. agrees to serve as general partner
of the OLP and to be bound by the OLP Partnership Agreement (and, to the extent
applicable, the MLP Partnership Agreement), as each is amended



                                      -2-
<PAGE>


by this Agreement or as may be further amended by the terms of the respective
partnership agreement, and GP Inc. is hereby admitted as the successor general
partner of the OLP.

                                   ARTICLE IV

            ASSUMPTION OF AND INDEMNIFICATION FOR CERTAIN LIABILITIES

         4.1 Assumption of Certain Liabilities and Obligations of GP LLC by GP
Inc. In connection with the transfer of the Revised OLP General Partner Interest
and the succession by GP Inc. as general partner of the OLP, GP Inc. hereby
assumes and agrees to duly and timely pay, perform and discharge all liabilities
and obligations of the OLP to the full extent (and only to the extent) that GP
LLC, as general partner of the OLP, has been or would have been in the future,
were it not for the execution and delivery of this Agreement, obligated to pay,
perform and discharge such liabilities and obligations

                                   ARTICLE V

                      AMENDMENTS TO PARTNERSHIP AGREEMENTS

         5.1 Amendments to the OLP Partnership Agreement. In order to further
the purposes of this Agreement, each of GP LLC, as withdrawing general partner
of the OLP, GP Inc., as successor general partner of the OLP, and the MLP, as
limited partner of the OLP, hereby approve and adopt the following amendments to
the OLP Partnership Agreement in accordance with Article XIII thereof:

                  (a) Article I - Definitions is hereby amended by adding or
         amending the definitions of the following terms to read in their
         entirety as follows:

                           "Conflicts Committee" means a committee of the board
                  of directors of the MLP General Partner composed entirely of
                  two or more directors who are neither security holders,
                  officers nor employees of the MLP General Partner nor
                  officers, directors or employees of any Affiliate of such
                  entity.

                           "General Partner" means Williams GP Inc. and its
                  successors and permitted assigns as general partner of the
                  Partnership.

                           "GP Reorganization Agreement" means the
                  Reorganization Agreement, dated as of March 4, 2002 among the
                  Partnership, the MLP, the General Partner and the MLP General
                  Partner.

                           "MLP General Partner" means Williams GP LLC and its
                  successors and permitted assigns in its capacity as general
                  partner of the MLP.

                           "Percentage Interest" means as of the date of such
                  determination (a) as to the General Partner, 0.001% and (b) as
                  to the MLP, 99.999%.

                           "Special Approval" means approval by a majority of
                  the members of the Conflicts Committee.



                                      -3-
<PAGE>

                           "Transfer" has the meaning assigned to such term in
                  Section 4.1(a).

                  (b) Section 4.2 is hereby amended to read in its entirety as
         follows:

                           "Section 4.2 Transfer of General Partner's
                  Partnership Interest.

                           No provision of this Agreement shall be construed to
                  prevent (and the Limited Partners do hereby expressly consent
                  to) (i) the transfer by the General Partner of all or a
                  portion of its General Partner Interest to one or more
                  Affiliates, which transferred General Partner Interest, to the
                  extent not transferred to a successor General Partner, shall
                  constitute a Limited Partner Interest or (ii) the transfer by
                  the General Partner, in whole and not in part, of its General
                  Partner Interest upon its merger, consolidation or other
                  combination into any other Person or the transfer by it of all
                  or substantially all of its assets to another Person if, in
                  the case of a transfer described in either clause (i) or (ii)
                  of this sentence, the rights and duties of the General Partner
                  with respect to the General Partner Interest so transferred,
                  or the rights and duties of a Limited Partner with respect to
                  the Limited Partner Interest so transferred, are assumed by
                  the transferee and the transferee agrees to be bound by the
                  provisions of this Agreement; provided, however, that in
                  either such case, the transferee is primarily controlled,
                  directly or indirectly, by the MLP General Partner or any
                  Person primarily controlling, directly or indirectly, the MLP
                  General Partner; provided, further that in either such case,
                  such transferee furnishes to the Partnership an Opinion of
                  Counsel that such merger, consolidation, combination, transfer
                  or assumption will not result in a loss of limited liability
                  of the Limited Partners or cause the Partnership to be taxable
                  as a corporation or otherwise taxed as an entity for federal
                  income tax purposes. In the case of a transfer pursuant to
                  this Section 4.2 to a Person proposed as a successor general
                  partner of the Partnership, the transferee or successor (as
                  the case may be) shall be admitted to the Partnership as the
                  General Partner immediately prior to the transfer of the
                  Partnership Interest, and the business of the Partnership
                  shall continue without dissolution."

                  (c) Section 5.3 is hereby amended change the term "1.0101" to
         "0.001" and to change the term "98.9899" to "99.999."

                  (d) Section 6.1(a)(ii) is hereby amended to read in its
         entirety as follows:

                           "Second, 100% to the General Partner and the Limited
                  Partners in accordance with their respective Percentage
                  Interests."

                  (e) Section 6.1(b)(i) is hereby amended to read in its
         entirety as follows:

                           "First, 100% to the General Partner and the Limited
                  Partners in accordance with their respective Percentage
                  Interests; provided, however, that the Net Losses shall not be
                  allocated to a Limited Partner pursuant to this Section
                  6.1(b)(i) to the extent that such allocation would cause a
                  Limited Partner to have deficit balance in its Adjusted
                  Capital Account at the end of such taxable year (or



                                      -4-
<PAGE>

                  increase any existing deficit balance in such Limited
                  Partner's Adjusted Capital Account);"

                  (f) Section 6.1(c)(i)(B) is hereby amended to read in its
         entirety as follows:

                           "Second, 100% to the General Partner and the Limited
                  Partners in accordance with their respective Percentage
                  Interests."

                  (g) The last sentence of Section 7.3(b) is hereby amended to
         read in its entirety as follows:

                           "Without the approval of at least a Unit Majority,
                  the General Partner shall not (i) consent to any amendment to
                  this Agreement or except as expressly permitted by Section
                  7.9(d) of the MLP Agreement, take any action permitted to be
                  taken by a Partner, in either case, that would have a material
                  adverse effect on the MLP as a Partner or (ii) except as
                  permitted under Sections 4.2, 11.1 and 11.2 of this Agreement,
                  elect a successor general partner of the Partnership."

                  (h) The last sentence of Section 7.9(b) is hereby amended to
         change the term "1.0101%" to "0.001%."

                  (i) Section 11.1(a)(iv) is hereby deleted in its entirety and
         replaced with the word "[Reserved]".

                  (j) The second sentence of Section 11.1(b) is hereby amended
         to read in its entirety as follows:

                           "If the General Partner gives a notice of withdrawal
                  pursuant to Section 11.1(a)(i) hereof, the Limited Partners
                  may, prior to the effective date of such withdrawal, elect a
                  successor General Partner."

                  (k) Section 11.2 is hereby amended to read in its entirety as
         follows:

                           "Section 11.2 Removal of the General Partner. The
                  General Partner may be removed by the holders of a majority of
                  the Limited Partner Interests. If the General Partner is
                  removed pursuant to this Section 11.2, the Limited Partners
                  may, prior to the effective date of such removal, elect a
                  successor General Partner. The admission of any such successor
                  General Partner to the Partnership shall be subject to the
                  provisions of Section 10.4."

                  (l) Section 11.3(a) is hereby amended to delete the
         parenthetical in the first sentence and to add a new third sentence
         that reads in its entirety as follows:

                           "Notwithstanding the foregoing, an assignment of all
                  or any portion of a General Partner's (or Departing General
                  Partner's) Partnership Interest to the MLP as Limited Partner,
                  or to any other Person (other than an individual) the
                  ownership interest of which is then transferred to the MLP,
                  can be made in exchange for an increased interest in the MLP
                  and in lieu of a cash purchase."



                                      -5-
<PAGE>

                  (m) Article XV is hereby amended to add the following
         immediately after Section 15.10.

                           "Section 15.11 Amendments to Reflect GP
                  Reorganization Agreement. In addition to the amendments to
                  this Agreement contained in the GP Restructuring Agreement and
                  notwithstanding any other provision of this Agreement to the
                  contrary, this Agreement shall be deemed to be further amended
                  and modified to the extent necessary, but only to the extent
                  necessary, to carry out the purposes and intent of the GP
                  Reorganization Agreement."

         5.2 Amendments to MLP Partnership Agreement. In order to further the
purposes of this Agreement and to evidence the increased interest of the general
partner in the MLP issued in exchange for the contributions to the MLP made
pursuant to Article II hereof, GP LLC, as general partner of the MLP, having
determined that the following amendments would not materially adversely affect
the limited partners of the MLP, hereby exercises its rights and powers to amend
the MLP Partnership Agreement without the approval of any limited partner or
assignee pursuant to Section 13.1(d)(i) of the MLP Partnership Agreement, hereby
approves and adopts the following amendments to the MLP Partnership Agreement in
accordance with Article XIII thereof:

                  (a) Section 1.1 is hereby amended by amending the definitions
         of the following terms to read in their entirety as follows:

                           "GP Reorganization Agreement" means the
                  Reorganization Agreement, dated as of March 4, 2002, among the
                  Partnership, the Operating Partnership, the General Partner
                  and the Operating General Partner.

                           "Operating General Partner" means Williams GP Inc., a
                  Delaware corporation and wholly owned subsidiary of the
                  Partnership, and any successors and permitted assigns as the
                  general partner of the Operating Partnership.

                           "Operating Partnership" means Williams OLP, L.P., a
                  Delaware limited partnership, and such other Persons that are
                  treated as partnerships for federal income tax purposes that
                  are majority-owned by the Partnership and controlled by the
                  Partnership (whether by direct or indirect ownership of the
                  general partner of such Person or otherwise) and established
                  or acquired for the purpose of conducting the business of the
                  Partnership.

                           "Operating Partnership Agreement" means the agreement
                  of limited partnership of any Operating Partnership that is a
                  limited partnership, or any limited liability company
                  agreement of any Operating Partnership that is a limited
                  liability company that is treated as a partnership for federal
                  income tax purposes, as such may be amended, supplemented or
                  restated from time to time.

                           "Percentage Interest" means as of the date of such
                  determination (a) as to the General Partner, 2% and (b) as to
                  any Limited Partner or Assignee holding Units, the product of
                  (i) 98% multiplied by (ii) the quotient of (x) the number of
                  Units held by such Limited Partner or Assignee divided by (y)
                  the total number of



                                      -6-
<PAGE>

                  all Units then Outstanding; provided, however, that following
                  any issuance of additional Units by the Partnership in
                  accordance with Section 5.6 hereof, proper adjustment shall be
                  made to the Percentage Interest represented by each Unit to
                  reflect such issuance. The Percentage Interest with respect to
                  an Incentive Distribution Right shall at all times be zero.

                  (b) The definition of Subordination Period in Section 1.1 is
         hereby amended to delete the phrase "and on the general partner
         interest in the Operating Partnership" in clause (a)(i).

                  (c) Section 4.6(c)(i) is hereby amended to delete the phrase
         "and the Operating Partnership Agreement" both places it appears.

                  (d) Section 4.8(b) is hereby amended to delete the phrase "or
         Operating Partnership" in the first sentence.

                  (e) Section 5.2(b) is hereby amended to change the term
         "1/99th" to "2%."

                  (f) Section 5.8(a)(ii) and Section 5.8(b)(ii) are each hereby
         amended to delete the phrase "and the Operating Partnerships" in the
         last line of each section.

                  (g) Section 6.1(a)(ii), Section 6.1(b)(i) and Section
         6.1(b)(ii) are each hereby amended to change the term "1%" to "2%" and
         to change the term "99%" to "98%."

                  (h) Section 6.1(c)(i) is hereby amended to read in its
         entirety as follows:

                           "(i) If a Net Termination Gain is recognized (or
                  deemed recognized pursuant to Section 5.5(d)), such Net
                  Termination Gain shall be allocated between the General
                  Partner and the Limited Partners in the following manner (and
                  the Capital Accounts of the Partners shall be increased by the
                  amount so allocated in each of the following subclauses, in
                  the order listed, before an allocation is made pursuant to the
                  next succeeding subclause):

                                    (A) First, to each Partner having a deficit
                           balance in its Capital Account, in the proportion
                           that such deficit balance bears to the total deficit
                           balances in the Capital Accounts of all Partners,
                           until each such Partner has been allocated Net
                           Termination Gain equal to any such deficit balance in
                           its Capital Account;

                                    (B) Second, 100% to the General Partner and
                           to all Limited Partners, in accordance with their
                           respective Percentage Interests, until the Capital
                           Account in respect of each Unit then Outstanding is
                           equal to the sum of (1) its Unrecovered Capital plus
                           (2) the Minimum Quarterly Distribution for the
                           Quarter during which the Liquidation Date occurs,
                           reduced by any distribution pursuant to Section
                           6.4(a)(i) or (b)(i) with respect to such Common Unit
                           for such Quarter (the amount determined pursuant to
                           this clause (2) is hereinafter defined as the "Unpaid
                           MQD") plus (3) any then existing Cumulative Common
                           Unit Arrearage;



                                      -7-
<PAGE>

                                    (C) Third, if such Net Termination Gain is
                           recognized (or is deemed to be recognized) prior to
                           the expiration of the Subordination Period, 100% to
                           the General Partner and to all Limited Partners, in
                           accordance with their respective Percentage Interests
                           until the Capital Account in respect of each
                           Subordinated Unit then Outstanding equals the sum of
                           (1) its Unrecovered Capital, determined for the
                           taxable year (or portion thereof) to which this
                           allocation of gain relates, plus (2) the Minimum
                           Quarterly Distribution for the Quarter during which
                           the Liquidation Date occurs, reduced by any
                           distribution pursuant to Section 6.4(a)(iii) with
                           respect to such Subordinated Unit for such Quarter;

                                    (D) Fourth, 85% to all Unitholders, Pro
                           Rata, 13% to the holders of the Incentive
                           Distribution Rights, Pro Rata, and 2% to the General
                           Partner until the Capital Account in respect of each
                           Common Unit then Outstanding is equal to the sum of
                           (1) its Unrecovered Capital, plus (2) the Unpaid MQD,
                           plus (3) any then existing Cumulative Common Unit
                           Arrearage, plus (4) the excess of (aa) the First
                           Target Distribution less the Minimum Quarterly
                           Distribution for each Quarter of the Partnership's
                           existence over (bb) the cumulative per Unit amount of
                           any distributions of Operating Surplus that was
                           distributed pursuant to Sections 6.4(a)(iv) and
                           6.4(b)(ii) (the sum of (1) plus (2) plus (3) plus (4)
                           is hereinafter defined as the "First Liquidation
                           Target Amount");

                                    (E) Fifth, 75% to all Unitholders, Pro Rata,
                           23% to the holders of the Incentive Distribution
                           Rights, Pro Rata, and 2% to the General Partner until
                           the Capital Account in respect of each Common Unit
                           then Outstanding is equal to the sum of (1) the First
                           Liquidation Target Amount, plus (2) the excess of
                           (aa) the Second Target Distribution less the First
                           Target Distribution for each Quarter of the
                           Partnership's existence over (bb) the cumulative per
                           Unit amount of any distributions of Operating Surplus
                           that was distributed pursuant to Sections 6.4(a)(v)
                           and 6.4(b)(iii) (the sum of (1) plus (2) is
                           hereinafter defined as the "Second Liquidation Target
                           Amount"); and

                                    (F) Finally, any remaining amount 50% to all
                           Unitholders, Pro Rata, 48 % to the holders of the
                           Incentive Distribution Rights, Pro Rata, and 2% to
                           the General Partner."

                  (i) Section 6.1(c)(ii)(A) and Section 6.1(c)(ii)(B) are each
         hereby amended to change the term "99%" to "98%" and to change the term
         "1%" to "99%."

                  (j) Sections 6.4 and 6.5 are hereby amended to read in their
         entirety as follows:

                          "Section 6.4 Distributions of Available Cash from
                  Operating Surplus.



                                      -8-
<PAGE>

                           (a) During Subordination Period. Available Cash with
                  respect to any Quarter within the Subordination Period that is
                  deemed to be Operating Surplus pursuant to the provisions of
                  Section 6.3 or 6.5 shall, subject to Section 17-607 of the
                  Delaware Act, be distributed as follows, except as otherwise
                  required by Section 5.6(b) in respect of additional
                  Partnership Securities issued pursuant thereto:

                           (i)      First, 98% to the Unitholders holding Common
                                    Units, Pro Rata, and 2% to the General
                                    Partner until there has been distributed in
                                    respect of each Common Unit then Outstanding
                                    an amount equal to the Minimum Quarterly
                                    Distribution for such Quarter;

                           (ii)     Second, 98% to the Unitholders holding
                                    Common Units, Pro Rata, and 2% to the
                                    General Partner until there has been
                                    distributed in respect of each Common Unit
                                    then Outstanding an amount equal to the
                                    Cumulative Common Unit Arrearage existing
                                    with respect to such Quarter;

                           (iii)    Third, 98% to the Unitholders holding
                                    Subordinated Units, Pro Rata, and 2% to the
                                    General Partner until there has been
                                    distributed in respect of each Subordinated
                                    Unit then Outstanding an amount equal to the
                                    Minimum Quarterly Distribution for such
                                    Quarter;

                           (iv)     Fourth, 85% to all Unitholders, Pro Rata,
                                    13% to the holders of the Incentive
                                    Distribution Rights, Pro Rata, and 2% to the
                                    General Partner until there has been
                                    distributed in respect of each Unit then
                                    Outstanding an amount equal to the excess of
                                    the First Target Distribution over the
                                    Minimum Quarterly Distribution for such
                                    Quarter;

                           (v)      Fifth, 75% to all Unitholders, Pro Rata, 23%
                                    to the holders of the Incentive Distribution
                                    Rights, Pro Rata, and 2% to the General
                                    Partner until there has been distributed in
                                    respect of each Unit then Outstanding an
                                    amount equal to the excess of the Second
                                    Target Distribution over the First Target
                                    Distribution for such Quarter; and

                           (vi)     Thereafter, 50% to all Unitholders, Pro
                                    Rata, 48% to the holders of the Incentive
                                    Distribution Rights, Pro Rata, and 2% to the
                                    General Partner;

                  provided, however, if the Minimum Quarterly Distribution, the
                  First Target Distribution and the Second Target Distribution
                  have been reduced to zero pursuant to the second sentence of
                  Section 6.6(a), the distribution of Available Cash that is
                  deemed to be Operating Surplus with respect to any Quarter
                  will be made solely in accordance with Section 6.4(a)(vi).



                                      -9-
<PAGE>

                           (b) After Subordination Period. Available Cash with
                  respect to any Quarter after the Subordination Period that is
                  deemed to be Operating Surplus pursuant to the provisions of
                  Section 6.3 or 6.5, subject to Section 17-607 of the Delaware
                  Act, shall be distributed as follows, except as otherwise
                  required by Section 5.6(b) in respect of additional
                  Partnership Securities issued pursuant thereto:

                           (i)      First, 98% to all Unitholders, Pro Rata, and
                                    2% to the General Partner until there has
                                    been distributed in respect of each Unit
                                    then Outstanding an amount equal to the
                                    Minimum Quarterly Distribution for such
                                    Quarter;

                           (ii)     Second, 85% to all Unitholders, Pro Rata,
                                    and 13% to the holders of the Incentive
                                    Distribution Rights, Pro Rata, and 2% to the
                                    General Partner until there has been
                                    distributed in respect of each Unit then
                                    Outstanding an amount equal to the excess of
                                    the First Target Distribution over the
                                    Minimum Quarterly Distribution for such
                                    Quarter;

                           (iii)    Third, 75% to all Unitholders, Pro Rata, and
                                    23% to the holders of the Incentive
                                    Distribution Rights, Pro Rata, and 2% to the
                                    General Partner until there has been
                                    distributed in respect of each Unit then
                                    Outstanding an amount equal to the excess of
                                    the Second Target Distribution over the
                                    First Target Distribution for such Quarter;
                                    and

                           (iv)     Thereafter, 50% to all Unitholders, Pro
                                    Rata, and 48% to the holders of the
                                    Incentive Distribution Rights, Pro Rata, and
                                    2% to the General Partner;

                  provided, however, if the Minimum Quarterly Distribution, the
                  First Target Distribution and the Second Target Distribution
                  have been reduced to zero pursuant to the second sentence of
                  Section 6.6(a), the distribution of Available Cash that is
                  deemed to be Operating Surplus with respect to any Quarter
                  will be made solely in accordance with Section 6.4(b)(iv).

                                   "Section 6.5 Distributions of Available Cash
                  from Capital Surplus.

                                    Available Cash that is deemed to be Capital
                           Surplus pursuant to the provisions of Section 6.3(a)
                           shall, subject to Section 17-607 of the Delaware Act,
                           be distributed, unless the provisions of Section 6.3
                           require otherwise, 98% to all Unitholders, Pro Rata,
                           and 2% to the General Partner until a hypothetical
                           holder of a Common Unit acquired on the Closing Date
                           has received with respect to such Common Unit, during
                           the period since the Closing Date through such date,
                           distributions of Available Cash that are deemed to be
                           Capital



                                      -10-
<PAGE>

                           Surplus in an aggregate amount equal to the Initial
                           Unit Price. Available Cash that is deemed to be
                           Capital Surplus shall then be distributed 98% to all
                           Unitholders holding Common Units, Pro Rata, and 2% to
                           the General Partner until there has been distributed
                           in respect of each Common Unit then Outstanding an
                           amount equal to the Cumulative Common Unit Arrearage.
                           Thereafter, all Available Cash shall be distributed
                           as if it were Operating Surplus and shall be
                           distributed in accordance with Section 6.4."

                  (k) Section 7.1(a)(xiv) is hereby amended to read in its
         entirety as follows:

                           "the undertaking of any action in connection with the
                  Partnership's ownership or operation of any Group Member,
                  including exercising, on behalf and for the benefit of the
                  Partnership, the Partnership's rights as the sole stockholder
                  of the Operating General Partner."

                  (l) Section 7.3(b) is hereby amended to delete the phrase "of
         the Partnership or the Operating Partnership" in the last line of that
         section.

                  (m) Section 7.5(a) is hereby amended to delete the references
         to the Operating Partnership.

                  (n) Section 7.8(d) is hereby amended to add the phrase "and
         the Operating General Partner's" immediately prior to the word
         "directors."

                  (o) Section 7.9(b) is hereby amended to change the term "1%"
         to "2%."

                  (p) Section 9.4 is hereby amended to delete the phrase "and
         the Operating Partnership."

                  (q) Section 11.1(a)(i) is hereby amended to read in its
         entirety as follows:

         "The General Partner voluntarily withdraws from the Partnership by
giving notice to the other Partners."

                  (r) Section 11.3(a) is hereby amended to delete the phrase "or
         an Operating Partnership Agreement."

                  (s) Section 11.3(c) is hereby amended to change the term
         "1/99th" to "2%" and to change the term "1%" to "2%" both places it
         appears.

                  (t) Article XVI is hereby amended to add the following
         immediately after Section 16.10:

                           "Section 16.11 Amendments to Reflect GP
                  Reorganization Agreement. In addition to the amendments to
                  this Agreement contained in the GP Restructuring Agreement and
                  notwithstanding any other provision of this Agreement to the
                  contrary, this Agreement shall be deemed to be further amended
                  and modified to the extent necessary, but only to the extent
                  necessary, to carry out the purposes and intent of the GP
                  Reorganization Agreement."



                                      -11-
<PAGE>

         5.3 Restatement of Partnership Agreements. Each of the partners of the
MLP and the OLP that is a party hereto agrees to execute and deliver a restated
and amended version of each of the MLP Partnership Agreement and the OLP
Partnership Agreement to which it is a party incorporating the amendments to
such agreement adopted by this Agreement together with such other amendments
intended to clarify the agreement as the general partner of such limited
partnership determines as are appropriate and not having a material adverse
effect on the limited partners of the partnership, and in the case of the MLP,
the holders of outstanding Units therein.

                                   ARTICLE VI

                                  MISCELLANEOUS

         6.1 Other Assurances. From time to time after the date hereof, and
without any further consideration, each of the parties to this Agreement shall
execute, acknowledge and deliver all such additional instruments, notices and
other documents, and will do all such other acts and things, all in accordance
with applicable law, as may be necessary or appropriate to more fully and
effectively carry out the purposes and intent of this Agreement.

         6.2 Costs. The MLP shall pay all expenses arising out of the
contributions, assignments and deliveries to be made hereunder, including the
expenses of amending the MLP Partnership Agreement and the OLP Partnership
Agreement.

         6.3 Successors and Assigns. The Agreement shall be binding upon and
inure to the benefit of the parties signatory hereto and their respective
successors and assigns.

         6.4 No Third Party Rights. The provisions of this Agreement are
intended to bind the parties signatory hereto as to each other and are not
intended to and do not create rights in any other person or confer upon any
other person any benefits, rights or remedies and no person is or is intended to
be a third party beneficiary of any of the provisions of this Agreement.

         6.5 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.

         6.6 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware.

         6.7 Amendment or Modification. This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto.



                                      -12-
<PAGE>



         IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.


                                 WILLIAMS ENERGY PARTNERS L.P.

                                 By:  WILLIAMS GP LLC, as general partner



                                      By:    /s/ Don R. Wellendorf
                                         ---------------------------------------
                                      Name:  Don R. Wellendorf
                                      Title: Senior Vice President


                                 WILLIAMS OLP L.P.

                                 By:  WILLIAMS GP LLC, as general partner



                                      By:    /s/ Don R. Wellendorf
                                         ---------------------------------------
                                      Name:  Don R. Wellendorf
                                      Title: Senior Vice President


                                 WILLIAMS GP LLC


                                 By:    /s/ Don R. Wellendorf
                                    --------------------------------------------
                                 Name:  Don R. Wellendorf
                                 Title: Senior Vice President



                                 WILLIAMS GP INC.,


                                 By:    /s/ Don R. Wellendorf
                                    --------------------------------------------
                                 Name:  Don R. Wellendorf
                                 Title: Senior Vice President



                                      -13-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(A)
<SEQUENCE>6
<FILENAME>d94597ex10-a.txt
<DESCRIPTION>CREDIT AGREEMENT
<TEXT>
<PAGE>
                                                                   EXHIBIT 10(a)












                                CREDIT AGREEMENT

                                      among

                               WILLIAMS OLP, L.P.
                                as the Borrower,

                             BANK OF AMERICA, N.A.,
                             as Administrative Agent

                         LEHMAN COMMERCIAL PAPER, INC.,
                              as Syndication Agent

                                 SUNTRUST BANK,
                             as Documentation Agent

                                       and

                            The Lenders Party Hereto

                                  $150,000,000

                            SENIOR CREDIT FACILITIES




                         BANC OF AMERICA SECURITIES LLC
                                       AND
                              LEHMAN BROTHERS INC.
                  Joint Lead Arrangers and Joint Book Managers



                          DATED AS OF FEBRUARY 6, 2001


<PAGE>


                                TABLE OF CONTENTS

<Table>
<Caption>
         Section                                                                                               Page
         -------                                                                                               ----

<S>      <C>          <C>                                                                                      <C>
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS.......................................................................1
         1.01         Defined Terms...............................................................................1
         1.02         Other Interpretive Provisions..............................................................18
         1.03         Accounting Terms...........................................................................19
         1.04         Rounding...................................................................................19
         1.05         References to Agreements and Laws..........................................................19

ARTICLE II. THE COMMITMENTS AND BORROWINGS.......................................................................19
         2.01         Revolver Facility..........................................................................19
         2.02         Term Loan Facility.........................................................................20
         2.03         Borrowings, Conversions and Continuations of Loans.........................................20
         2.04         Prepayments................................................................................21
         2.05         Reduction or Termination of Commitments....................................................23
         2.06         Repayment of Loans.........................................................................23
         2.07         Interest...................................................................................23
         2.08         Fees.......................................................................................24
         2.09         Computation of Interest and Fees...........................................................24
         2.10         Evidence of Debt...........................................................................25
         2.11         Payments Generally.........................................................................25
         2.12         Sharing of Payments........................................................................26
         2.13         Order of Application.......................................................................27

ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY..............................................................28
         3.01         Taxes......................................................................................28
         3.02         Illegality.................................................................................28
         3.03         Inability to Determine Rates...............................................................29
         3.04         Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate
                      Loans......................................................................................29
         3.05         Funding Losses.............................................................................30
         3.06         Matters Applicable to all Requests for Compensation........................................30
         3.07         Survival...................................................................................30

ARTICLE IV. CONDITIONS PRECEDENT TO BORROWINGS...................................................................30
         4.01         Conditions of Initial Borrowing............................................................30
         4.01A        Dealine for Initial Funding Date...........................................................32
         4.02         Conditions to all Loans....................................................................32

ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................33
         5.01         Existence; Qualification and Power; Compliance with Laws...................................33
         5.02         Authorization; No Contravention............................................................33
         5.03         Governmental Authorization.................................................................33
         5.04         Binding Effect.............................................................................33
         5.05         Financial Statements; No Material Adverse Effect...........................................33
         5.06         Litigation.................................................................................34
         5.07         No Default.................................................................................34
         5.08         Ownership of Property; Liens...............................................................34
         5.09         Environmental Compliance...................................................................34
         5.10         Insurance..................................................................................34
</Table>


                                       i

<PAGE>

<Table>
<S>      <C>          <C>                                                                                      <C>
         5.11         Taxes......................................................................................34
         5.12         ERISA Compliance...........................................................................35
         5.13         Subsidiaries...............................................................................35
         5.14         Margin Regulations; Investment Company Act; Public Utility Holding Company Act; Use
                      of Proceeds................................................................................35
         5.15         Disclosure.................................................................................36
         5.16         Labor Matters..............................................................................36
         5.17         Compliance with Laws.......................................................................36

ARTICLE VI. AFFIRMATIVE COVENANTS................................................................................36
         6.01         Financial Statements.......................................................................36
         6.02         Certificates; Other Information............................................................37
         6.03         Notices....................................................................................38
         6.04         Payment of Obligations.....................................................................38
         6.05         Preservation of Existence, Etc.............................................................38
         6.06         Maintenance of Assets and Business.........................................................38
         6.07         Maintenance of Insurance...................................................................39
         6.08         Compliance with Laws.......................................................................39
         6.09         Books and Records..........................................................................39
         6.10         Inspection Rights..........................................................................39
         6.11         Compliance with ERISA......................................................................39
         6.12         Use of Proceeds............................................................................39
         6.13         Clean Down Period..........................................................................40
         6.14         Guaranties.................................................................................40
         6.15         Material Agreements........................................................................40

ARTICLE VII. NEGATIVE COVENANTS..................................................................................40
         7.01         Liens......................................................................................40
         7.02         Investments................................................................................41
         7.03         Indebtedness, Synthetic Leases and Swap Obligations........................................41
         7.04         Fundamental Changes........................................................................42
         7.05         Dispositions...............................................................................42
         7.06         Lease Obligations..........................................................................43
         7.07         Restricted Payments; Payments of Permitted Affiliate Subordinated Debt.....................43
         7.08         ERISA......................................................................................43
         7.09         Nature of Business; Capital Expenditures...................................................43
         7.10         Transactions with Affiliates...............................................................43
         7.11         Burdensome Agreements......................................................................43
         7.12         Use of Proceeds............................................................................43
         7.13         Operating Agreements.......................................................................44
         7.14         Financial Covenants........................................................................44

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES.....................................................................44
         8.01         Events of Default..........................................................................44
         8.02         Remedies Upon Event of Default.............................................................46

ARTICLE IX. ADMINISTRATIVE AGENT.................................................................................47
         9.01         Appointment and Authorization of Administrative Agent......................................47
         9.02         Delegation of Duties.......................................................................47
         9.03         Liability of Administrative Agent..........................................................47
         9.04         Reliance by Administrative Agent...........................................................47
</Table>



                                       ii

<PAGE>


<Table>
<S>      <C>          <C>                                                                                      <C>
         9.05         Notice of Default..........................................................................48
         9.06         Credit Decision; Disclosure of Information by Administrative Agent.........................48
         9.07         Indemnification of Administrative Agent....................................................49
         9.08         Administrative Agent in its Individual Capacity............................................49
         9.09         Successor Administrative Agent.............................................................49
         9.10         Other Agents; Lead Managers................................................................50

ARTICLE X. MISCELLANEOUS.........................................................................................50
         10.01        Amendments, Etc............................................................................50
         10.02        Notices and Other Communications; Facsimile Copies.........................................51
         10.03        No Waiver; Cumulative Remedies.............................................................52
         10.04        Attorney Costs; Expenses and Taxes.........................................................52
         10.05        Indemnification............................................................................52
         10.06        Payments Set Aside.........................................................................53
         10.07        Successors and Assigns.....................................................................53
         10.08        Confidentiality............................................................................55
         10.09        Set-off....................................................................................56
         10.10        Interest Rate Limitation...................................................................56
         10.11        Counterparts...............................................................................57
         10.12        Integration................................................................................57
         10.13        Survival of Representations and Warranties.................................................57
         10.14        Severability...............................................................................57
         10.15        Foreign Lenders............................................................................57
         10.16        Governing Law..............................................................................58
         10.17        Waiver of Right to Trial by Jury...........................................................58
         10.18        No General Partner's Liability.............................................................59
         10.19        ENTIRE AGREEMENT...........................................................................59

         SIGNATURES.............................................................................................S-1
</Table>



                                      iii


<PAGE>


<Table>
<S>     <C>       <C>      <C>
SCHEDULES

         2.01     Commitments and Pro Rata Shares
         5.13     Subsidiaries
         10.02    Addresses for Notices to Borrower, Guarantors and Administrative Agent

EXHIBITS
                  Form of

         A-1               Borrowing Notice
         A-2               Conversion/Continuation Notice
         B-1               Revolver Note
         B-2               Term Note
         C-1               Compliance Certificate pursuant to SECTION 6.02(a)
         C-2               Compliance Certificate pursuant to SECTION 7.02 and SECTION 7.03
         D                 Assignment and Acceptance
         E                 Guaranty
         F-1 and F-2       Opinions of Counsel
         G                 Intercompany Note evidencing Permitted Affiliate Subordinated Debt
</Table>



                                       iv



<PAGE>

                                CREDIT AGREEMENT

         This CREDIT AGREEMENT ("AGREEMENT") is entered into as of February 6,
2001, among WILLIAMS OLP, L.P., a Delaware limited partnership (the "BORROWER"),
each lender from time to time party hereto (collectively, the "LENDERS" and
individually, a "LENDER"), BANK OF AMERICA, N.A., as Administrative Agent,
LEHMAN COMMERCIAL PAPER, INC., as Syndication Agent, and SUNTRUST BANK, as
Documentation Agent.

         The Borrower has requested that the Lenders provide a term loan
facility and a revolving credit facility, and the Lenders are willing to do so
on the terms and conditions set forth herein.

         In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:

                                   ARTICLE I.
                        DEFINITIONS AND ACCOUNTING TERMS

         1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:

         ACCEPTABLE INDEMNITY means, with respect to a judgment, an agreement
between a Referenced Person as indemnitee (the "INDEMNITEE") and a third party
as indemnitor (the "INDEMNITOR") pursuant to which such Referenced Person is
entitled to be indemnified against and reimbursed for any and all losses,
liabilities, and expenses arising in connection with such judgment, provided
that (i) the Indemnitor shall be reasonably acceptable to the Required Lenders,
(ii) the Indemnitor shall have accepted liability pursuant to a written
undertaking that is satisfactory to the Required Lenders, and (iii) unless
otherwise agreed by the Required Lenders, the Indemnitor's obligations shall be
secured, pursuant to arrangements that are reasonably satisfactory to the
Required Lenders, by cash collateral pledged to the Indemnitee or by a letter of
credit, guaranty, bond or other credit support issued for the benefit of the
Indemnitee.

         ACQUISITION means any transaction or series of related transactions for
the purpose of, or resulting in, directly or indirectly, (a) the acquisition by
a Company of all or substantially all of the assets of a Person or of any
business or division of a Person; (b) the acquisition by a Company of more than
50% of any class of Voting Stock (or similar ownership interests) of any Person;
or (c) a merger, consolidation, amalgamation, or other combination by a Company
with another Person if a Company is the surviving entity, provided that, (i) in
any merger involving the Borrower, the Borrower must be the surviving entity;
and (ii) in any merger involving a wholly-owned Subsidiary and another
Subsidiary, the wholly-owned Subsidiary shall be the survivor.

         ACQUISITION SUBFACILITY has the meaning specified in SECTION 2.01(a).

         ACQUISITION SUBFACILITY COMMITMENT means an amount (subject to
reduction or cancellation as herein provided) equal to $40,000,000.00.

         ACQUISITION SUBFACILITY PRINCIPAL DEBT means, on any date of
determination, the aggregate unpaid principal amount of all Borrowings under the
Acquisition Subfacility.

         ADMINISTRATIVE AGENT means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.



                                       1
<PAGE>

         ADMINISTRATIVE AGENT'S OFFICE means the Administrative Agent's address
and, as appropriate, account as set forth on SCHEDULE 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.

         ADMINISTRATIVE DETAILS FORM means the Administrative Details Reply Form
furnished by a Lender to the Administrative Agent in connection with this
Agreement.

         AFFILIATE means, as to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to be controlled by any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 50% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners; or (b)
to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

         AGENT/ARRANGER FEE LETTER has the meaning specified in SECTION 2.08(b).

         AGENT-RELATED PERSONS means the Administrative Agent (including any
successor administrative agent), together with its Affiliates (including, in the
case of Bank of America in its capacity as the Administrative Agent, Banc of
America Securities LLC), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.

         AGGREGATE COMMITMENTS has the meaning set forth in the definition of
"Commitment."

         AGGREGATE COMMITTED SUM means, on any date of determination, the sum of
all Committed Sums then in effect for all Lenders in respect of the Revolver
Facility and the Term Loan Facility (as the same may have been reduced or
canceled as provided in the Loan Documents).

         AGREEMENT means this Credit Agreement.

         APPLICABLE RATE means the following percentages per annum set forth in
the table below, on any date of determination, with respect to the Type of
Borrowing or commitment fee that corresponds to the Leverage Ratio at such date
of determination, as calculated based on the quarterly Compliance Certificate
most recently delivered pursuant to SECTION 6.02(a):

<Table>
<Caption>
                                          Applicable Rate
      ----------------------------------------------------------------------------------------
      Pricing                                     Commitment       Eurodollar      Base Rate +
       Level             Leverage Ratio            fee (bps)      Rate + (bps)        (bps)
      -------            --------------           ----------      ------------     -----------

<S>                  <C>                          <C>             <C>              <C>
         1           Less than or equal to           17.5             100.0             0
                           2.00:1.00

         2           Less than or equal to           25.0             120.0            20.0
                    3.00:1.00, but greater
                        than 2.00:1.00

         3           Greater than 3.00:1.00          35.0             145.0            40.0
</Table>

         Pricing Level 2 above shall be in effect for a period of six (6) months
beginning on the Initial Funding Date unless, during such six (6) month period,
the Leverage Ratio falls within Pricing Level 3 above, in which case Pricing
Level 3 shall apply.



                                       2
<PAGE>

         ARRANGERS means Banc of America Securities LLC and Lehman Brothers
Inc., in their capacities as joint lead arrangers and joint book managers, and
ARRANGER means either one of them.

         ASSET ACQUISITION has the meaning set forth in SECTION 7.14(c)(i).

         ASSIGNMENT AND ACCEPTANCE means an Assignment and Acceptance
substantially in the form of EXHIBIT D.

         ASSUMED DEBT means that certain Indebtedness assumed by Terminal
Holdings LLC, originally incurred to partially finance the $259,000,000 purchase
of certain terminal, storage, pipeline and related assets (such assets being
herein called the FINANCED ASSETS).

         ATTORNEY COSTS means and includes all reasonable fees and disbursements
of any law firm or other external counsel and the reasonable allocated cost of
internal legal services and all reasonable disbursements of internal counsel.

         ATTRIBUTABLE INDEBTEDNESS means, on any date, in respect of any Capital
Lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP.

         ATTRIBUTABLE PRINCIPAL means, on any date, in respect of any Synthetic
Lease Obligation, the capitalized amount of the remaining lease payments under
the relevant lease that would appear on a balance sheet of such Person prepared
as of such date in accordance with GAAP if such lease were accounted for as a
capital lease.

         AUTHORIZATIONS means all filings, recordings, and registrations with,
and all validations or exemptions, approvals, orders, authorizations, consents,
franchises, licenses, certificates, and permits from, any Governmental
Authority.

         BANK GUARANTIES means guaranties or other agreements or instruments
serving a similar function issued by a bank or other financial institution.

         BANK OF AMERICA means Bank of America, N.A.

         BASE RATE means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." Such rate is a rate set by Bank of America based
upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.

         BASE RATE LOAN means a Loan that bears interest based on the Base Rate.

         BOARD means the Board of Governors of the Federal Reserve System of the
United States of America.

         BORROWER has the meaning set forth in the introductory paragraph
hereto.



                                       3
<PAGE>

         BORROWER'S OPERATING AGREEMENTS means the following: (a) Borrower's and
its Subsidiaries' Organization Documents, (b) the Omnibus Agreement, and (c) the
Contribution Agreement.

         BORROWING means a borrowing consisting of simultaneous Loans of the
same Type and having the same Interest Period made by each of the Lenders
pursuant to SECTIONS 2.01 and 2.02.

         BORROWING NOTICE means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Loans as the same
Type, pursuant to SECTION 2.03(a), which, if in writing, shall be substantially
in the form of EXHIBIT A-1 or A-2, as applicable.

         BUSINESS DAY means any day other than a Saturday, Sunday, or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
applicable offshore Dollar interbank market.

         CAPITAL EXPENDITURE by a Person means an expenditure (determined in
accordance with GAAP) for any fixed asset owned by such Person for use in the
operations of such Person having a useful life of more than one year, or any
improvements or additions thereto.

         CAPITAL LEASE means any capital lease or sublease which should be
capitalized on a balance sheet in accordance with GAAP.

         CHANGE OF CONTROL means (a) the failure of the TWC to own, directly or
indirectly, 100% of the general partnership interests in the MLP, (b) the
failure of TWC to own, directly or indirectly, 100% of the general partnership
interests in the Borrower, or (c) the failure of the MLP to be the sole limited
partner of the Borrower.

         CLOSING DATE means the date upon which this Agreement has been executed
by the Borrower, the Lenders and the Administrative Agent.

         CODE means the Internal Revenue Code of 1986.

         COMMITMENT means, as to each Revolver Lender, its obligation to make
Loans to the Borrower pursuant to SECTION 2.01, in an amount at any one time
outstanding not to exceed its Committed Sum, and, as to each Term Loan Lender,
its obligation to lend to the Borrower on the Conditions Effective Date pursuant
to SECTION 2.02, in an amount not to exceed its Committed Sum, in each case as
such amount may be reduced or adjusted from time to time in accordance with this
Agreement (collectively, the "AGGREGATE COMMITMENTS").

         COMMITTED SUM means (a) for any Revolver Lender, with respect to the
Acquisition Subfacility, at any date of determination occurring prior to the
Revolver Maturity Date, the amount stated beside such Lender's name under the
heading for the Acquisition Subfacility on the most-recently amended SCHEDULE
2.01 to this Agreement (which amount is subject to increase, reduction, or
cancellation in accordance with the Loan Documents), (b) for any Revolver
Lender, with respect to the Working Capital/Distribution Subfacility, at any
date of determination occurring prior to the Revolver Maturity Date, the amount
stated beside such Lender's name under the heading for the Working
Capital/Distribution Subfacility on the most recently amended SCHEDULE 2.01 to
this Agreement (which amount is subject to increase, reduction, or cancellation
in accordance with the Loan Documents), and (c) for any Term Loan Lender, with
respect to the Term Loan Facility, at any date of determination occurring prior
to the date of



                                       4
<PAGE>

the initial Borrowing for the Term Loan Facility, the amount stated beside such
Lender's name under the heading for the Term Loan Facility on the most-recently
amended SCHEDULE 2.01 to this Agreement (which amount is subject to increase,
reduction, or cancellation in accordance with the Loan Documents).

         COMPANY and COMPANIES means, on any date of determination thereof,
Borrower and each of its Subsidiaries.

         COMPLIANCE CERTIFICATE means a certificate substantially in the form of
EXHIBIT C-1 or EXHIBIT C-2, as applicable.

         CONDITIONS EFFECTIVE DATE means the first date all the conditions
precedent in SECTION 4.01 are satisfied or waived in accordance with SECTION
4.01 (or, in the case of SECTIONS 4.01(b) and (c), waived by the Person entitled
to receive the applicable payment).

         CONSOLIDATED EBITDA means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, (b) Consolidated Interest Charges, (c) the amount of
taxes, based on or measured by income, used or included in the determination of
such Consolidated Net Income, and (d) the amount of depreciation and
amortization expense deducted in determining such Consolidated Net Income.

         CONSOLIDATED INTEREST CHARGES means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, fees, charges and related expenses of the Borrower and its
Subsidiaries in connection with Indebtedness (including capitalized interest),
in each case to the extent treated as interest in accordance with GAAP, less
interest income from temporary investments, and (b) the portion of rent expense
of the Borrower and its Subsidiaries with respect to such period under Capital
Leases that is treated as interest in accordance with GAAP.

         CONSOLIDATED LEASE AND RENTAL EXPENSE means the lease and rental
expense of the Borrower and its Subsidiaries on a consolidated basis.

         CONSOLIDATED NET INCOME means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, the net income or net loss of the Borrower
and its Subsidiaries from continuing operations, provided that there shall be
excluded from such net income (to the extent otherwise included therein): (a)
net extraordinary gains and losses (other than, in the case of losses, losses
resulting from charges against net income to establish or increase reserves for
potential environmental liabilities and reserves for exposure under rate cases),
(b) net gains or losses in respect of Dispositions of assets other than in the
ordinary course of business, (c) any gains or losses attributable to non-cash
write-ups or write-downs of assets, and (d) proceeds of any insurance on
property, plant or equipment.

         CONSOLIDATED TOTAL DEBT means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (a) the
outstanding principal amount of all obligations and liabilities, whether current
or long-term, for borrowed money (including Obligations hereunder), (b) that
portion of obligations with respect to Capital Leases of the Borrower and its
Subsidiaries, and (c) without duplication, all Guaranty Obligations with respect
to Indebtedness of the type specified in subsections (a) and (b) above of
Persons other than the Borrower or any Subsidiary.

         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.



                                       5
<PAGE>

         CONTRIBUTION AGREEMENT means the Contribution, Conveyance and
Assumption Agreement dated as of the date of MLP Offering Closing, among the
MLP, the Borrower, TWC and certain of its Affiliates.

         DEBT ISSUANCE means the issuance, incurrence or assumption of
Indebtedness or a Synthetic Lease by the Borrower or any of its Subsidiaries
after the Closing Date, other than Permitted Affiliate Subordinated Debt and
Indebtedness arising under the Loan Documents.

         DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of
America, and all other liquidation, conservatorship, bankruptcy, assignment for
the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States of America or
other applicable jurisdictions from time to time in effect and affecting the
rights of creditors generally.

         DEFAULT means any event that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.

         DEFAULT RATE means an interest rate equal to (a) the Base Rate plus (b)
the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.

         DISPOSITION or DISPOSE means the sale, transfer, license or other
disposition (including any sale and leaseback transaction) of any property by
any Person, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

         DOLLAR 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.

         ELIGIBLE ASSIGNEE means (a) a Lender; (b) an Affiliate of a Lender; and
(c) any other Person (other than a natural Person) approved by the
Administrative Agent and, unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or
delayed).

         ENVIRONMENTAL LAW means any applicable Law that relates to (a) the
condition or protection of air, groundwater, surface water, soil, or other
environmental media, (b) the environment, including natural resources or any
activity which affects the environment, (c) the regulation of any pollutants,
contaminants, wastes, substances, and Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Federal Water Pollution Control Act, as
amended by the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Emergency Planning and Community Right to Know Act of 1986 (42 U.S.C. Section
11001 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section
1801 et seq.), the National Environmental Policy Act of 1969 (42 U.S.C. Section
4321 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Rivers and Harbors Act (33 U.S.C. Section 401 et seq.), the Safe Drinking Water
Act (42 U.S.C. Section 201 and Section 300f et seq.), the Solid



                                       6
<PAGE>

Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976 and the Hazardous and Solid Waste Amendments of 1984 (42 U.S.C. Section
6901 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et
seq.), and analogous state and local Laws, as any of the foregoing may have been
and may be amended or supplemented from time to time, and any analogous future
enacted or adopted Law, or (d) the Release or threatened Release of Hazardous
Substances.

         ERISA means the Employee Retirement Income Security Act of 1974 and any
regulations issued pursuant thereto.

         ERISA AFFILIATE means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions of this Agreement relating to obligations imposed under
Section 412 of the Code).

         ERISA EVENT means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.

         EURODOLLAR RATE means for any Interest Period with respect to any
Eurodollar Rate Loan:

                  (a) the rate per annum equal to the rate determined by the
         Administrative Agent to be the offered rate that appears on the page
         (such page currently being page 3750) of the Telerate screen (or any
         successor thereto) that displays an average British Bankers Association
         Interest Settlement Rate for deposits in Dollars (for delivery on the
         first day of such Interest Period) with a term equivalent to such
         Interest Period, determined as of approximately 11:00 a.m. (London
         time) two Business Days prior to the first day of such Interest Period,
         or

                  (b) if the rate referenced in the preceding subsection (a)
         does not appear on such page or service or such page or service shall
         cease to be available, the rate per annum equal to the rate determined
         by the Administrative Agent to be the offered rate on such other page
         or other service that displays an average British Bankers Association
         Interest Settlement Rate for deposits in Dollars (for delivery on the
         first day of such Interest Period) with a term equivalent to such
         Interest Period, determined as of approximately 11:00 a.m. (London
         time) two Business Days prior to the first day of such Interest Period,
         or

                  (c) if the rates referenced in the preceding subsections (a)
         and (b) are not available, the rate per annum determined by the
         Administrative Agent as the rate of interest (rounded upward to the
         next 1/100th of 1%) at which deposits in Dollars for delivery on the
         first day of such Interest Period in same day funds in the approximate
         amount of the Eurodollar Rate Loan being made, continued or converted
         by Bank of America and with a term equivalent to such Interest Period



                                       7
<PAGE>

         would be offered by Bank of America's London Branch to major banks in
         the offshore Dollar market at their request at approximately 11:00 a.m.
         (London time) two Business Days prior to the first day of such Interest
         Period.

         EURODOLLAR RATE LOAN means a Loan that bears interest at a rate based
on the Eurodollar Rate.

         EVENT OF DEFAULT means any of the events or circumstances specified in
ARTICLE VIII.

         FACILITIES means, collectively, the Revolver Facility and the Term Loan
Facility; FACILITY means either of the Revolver Facility or the Term Loan
Facility.

         FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank 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 of the quotations for such day on such transactions
received by the Administrative Agent from three federal funds brokers of
recognized standing selected by the Administrative Agent.

         FINANCED ASSETS has the meaning set forth herein in the definition of
Assumed Debt.

         FOREIGN LENDER has the meaning specified in SECTION 10.15.

         FOREIGN SUBSIDIARY of any Person means a Subsidiary of such Person that
is organized or incorporated under the Laws of a jurisdiction other than a
jurisdiction of the United States.

         GAAP means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied. If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (a) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (b) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

         GENERAL PARTNER means Williams GP LLC, a Delaware limited liability
company, a wholly-owned Subsidiary of TWC.

         GOVERNMENTAL AUTHORITY means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or



                                       8
<PAGE>

functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.

         GUARANTORS means any Person, including, but not limited to, each
Subsidiary of Borrower which undertakes to be liable for all or any part of the
Obligations by execution of a Guaranty, or otherwise.

         GUARANTY means a Guaranty now or hereafter made by any Guarantor in
favor of the Administrative Agent on behalf of the Lenders, substantially in the
form of EXHIBIT E, as may be amended from time to time.

         GUARANTY OBLIGATION means, as to any Person, (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other payment obligation of another
Person (the "primary obligor") in any manner, whether directly or indirectly,
and including any obligation of such Person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other payment obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other payment obligation of the payment of such
Indebtedness or other payment obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the
primary obligor so as to enable the primary obligor to pay such Indebtedness or
other payment obligation, or (iv) entered into for the purpose of assuring in
any other manner the obligees in respect of such Indebtedness or other payment
obligation of the payment thereof or to protect such obligees against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such
Person securing any Indebtedness or other payment obligation of any other
Person, whether or not such Indebtedness or other payment obligation is assumed
by such Person; provided, however, that the term "Guaranty Obligation" shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guaranty Obligation shall be deemed to be
the lesser of (a) an amount equal to the stated or determinable outstanding
amount of the related primary obligation and (b) the maximum amount for which
such guarantying Person may be liable pursuant to the terms of the instrument
embodying such Guaranty Obligation, unless the outstanding amount of such
primary obligation and the maximum amount for which such guarantying Person may
be liable are not stated or determinable, in which case the amount of such
Guaranty Obligation shall be the maximum reasonably anticipated liability in
respect thereof as determined by the guarantying Person in good faith.

         HAZARDOUS SUBSTANCE means (a) any substance that is designated,
defined, or classified as a hazardous waste, hazardous material, pollutant,
contaminant, or toxic or hazardous substance, or that is otherwise regulated,
under any Environmental Law, including without limitation any hazardous
substance within the meaning of Section 101(14) of CERCLA, and (b) petroleum,
oil, gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet
fuel, and other refined petroleum hydrocarbons.

         INDEBTEDNESS means, as to any Person at a particular time, all of the
following:

                  (a) all obligations of such Person for borrowed money and all
         obligations of such Person evidenced by bonds, debentures, notes, loan
         agreements or other similar instruments;

                  (b) the face amount of all letters of credit (including
         standby and commercial), banker's acceptances, Bank Guaranties, and
         similar instruments issued for the account of such Person, and, without
         duplication, all drafts drawn and unpaid thereunder;

                  (c) whether or not so included as liabilities in accordance
         with GAAP, all obligations of such Person to pay the deferred purchase
         price of property or services, other than trade accounts



                                       9
<PAGE>

         payable in the ordinary course of business not overdue by more than 60
         days, and indebtedness (excluding prepaid interest thereon) secured by
         a Lien on property owned or being purchased by such Person (including
         indebtedness arising under conditional sales or other title retention
         agreements), whether or not such indebtedness shall have been assumed
         by such Person or is limited in recourse;

                  (d) Capital Leases; and

                  (e) all Guaranty Obligations of such Person in respect of any
         of the foregoing.

         For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner, unless such Indebtedness is expressly made non-recourse to such
Person except for customary exceptions acceptable to the Required Lenders. The
amount of any Capital Lease as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date.

         INDEMNIFIED LIABILITIES has the meaning set forth in SECTION 10.05.

         INDEMNITEES has the meaning set forth in SECTION 10.05.

         INITIAL FUNDING DATE means the date that the initial Loan is made under
this Agreement, which date shall be the Conditions Effective Date.

         INITIAL FUNDING DATE FINANCIAL STATEMENTS means the financial
statements delivered pursuant to clauses (C) and (D) of SECTION 4.01(a)(vii).

         INITIAL FUNDING DATE PRO FORMAS means the balance sheets delivered
pursuant to clauses (A) and (B) of SECTION 4.01(a)(vii).

         INTEREST COVERAGE RATIO means the ratio of (a) the sum of (i)
Consolidated EBITDA for the period of the four prior fiscal quarters ending on
such date and (ii) Consolidated Lease and Rental Expense during such period to
(b) the sum of (i) Consolidated Interest Charges during such period and (ii)
Consolidated Lease and Rental Expense during such period.

         INTEREST PAYMENT DATE means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan, the last Business Day of each March, June, September and
December and the Revolver Maturity Date or the Term Loan Maturity Date, as
applicable.

         INTEREST PERIOD means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Borrowing Notice;
provided that:

                  (i) any Interest Period that would otherwise end on a day that
         is not a Business Day shall be extended to the next succeeding Business
         Day unless, in the case of a Eurodollar Rate Loan, such Business Day
         falls in another calendar month, in which case such Interest Period
         shall end on the next preceding Business Day;



                                       10
<PAGE>

                  (ii) any Interest Period pertaining to a Eurodollar Rate Loan
         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 the calendar month at the end of such Interest Period;
         and

                  (iii) no Interest Period shall extend beyond the scheduled
         Revolver Maturity Date or the Term Loan Maturity Date, as applicable.

         INVESTMENT means, as to any Person, any acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
capital stock or other securities of another Person, (b) a loan, advance or
capital contribution to, guaranty of debt of, or purchase or other acquisition
of any other debt or equity participation or interest in, another Person,
including any partnership or joint venture interest in such other Person, or (c)
the purchase or other acquisition (in one transaction or a series of
transactions) of assets of another Person that constitute a business unit. For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

         IRS means the United States Internal Revenue Service.

         LAWS means, collectively, all applicable international, foreign,
Federal, state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, licenses,
authorizations and permits of, any Governmental Authority.

         LENDER has the meaning specified in the introductory paragraph hereto.

         LENDING OFFICE means, as to any Lender, the office or offices of such
Lender set forth on its Administrative Details Form, or such other office or
offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

         LEVERAGE RATIO means, for the Borrower and its Subsidiaries on a
consolidated basis, the ratio of (a) Consolidated Total Debt (excluding
Permitted Affiliate Subordinated Debt) as of the determination date to (b)
Consolidated EBITDA for the period of the four fiscal quarters ending on such
date.

         LIEN means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever to secure or provide for payment of any obligation of any
Person, (including any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable Laws of any jurisdiction), including the interest
of a purchaser of accounts receivable.

         LOAN means an extension of credit by a Lender to the Borrower under
ARTICLE II.

         LOAN DOCUMENTS means this Agreement, each Note, the Agent/Arranger Fee
Letter, each Borrowing Notice, each Compliance Certificate and the Guaranties.

         LOAN PARTIES means, collectively, the Borrower and each Guarantor.



                                       11
<PAGE>

         MATERIAL ADVERSE EFFECT means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties or condition
(financial or otherwise) of the Borrower or the Borrower and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of the Borrower or of
the Loan Parties, collectively, to perform their obligations under the Loan
Documents; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against the Borrower or the Loan Parties, collectively,
of any Loan Documents.

         MATERIAL AGREEMENT means (a) the Borrower's Operating Agreements, and
(b) any other contract material to the business of the Borrower and its
Subsidiaries, taken as a whole.

         MATURITY DATE means the later of (a) the Revolver Maturity Date, and
(b) the Term Loan Maturity Date.

         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 Obligations.

         MLP means Williams Energy Partners L.P., a Delaware limited
partnership.

         MLP OFFERING means the initial sale to the public of common units in
the MLP pursuant to the MLP Registration Statement.

         MLP OFFERING CLOSING means the consummation of the sale of common units
to the public pursuant to the MLP Registration Statement.

         MLP REGISTRATION STATEMENT means the Registration Statement filed on
October 30, 2000 with the Securities and Exchange Commission in connection with
the sale of common units in the MLP, as amended by Amendment No. 2 filed on
January 25, 2001, as may be further amended.

         MULTIEMPLOYER PLAN means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
three calendar years, has made or been obligated to make contributions.

         NET CASH PROCEEDS means (a) with respect to any Significant Sale, cash
(including any cash received by way of deferred payment pursuant to a promissory
note or otherwise, as and when received) received by the Borrower or any of its
Subsidiaries in connection with and as consideration therefor, on or after the
date of consummation of such transaction, after (i) deduction of Taxes payable
in connection with or as a result of such transaction, (ii) payment of all usual
and customary brokerage commissions and all other reasonable fees and expenses
related to such transaction (including, without limitation, reasonable
attorneys' fees and closing costs incurred in connection with such transaction),
(iii) deduction of appropriate amounts required to be reserved (in accordance
with GAAP) for post-closing adjustments by the Borrower or any of its
Subsidiaries in connection with such transaction, against any liabilities
retained by the Borrower or any of its Subsidiaries after such transaction,
which liabilities are associated with the asset or assets being sold, including,
without limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction, and (iv) deduction for the amount
of any Indebtedness (other than the Obligations or Indebtedness owed to the
Borrower or any of its Subsidiaries) secured by the respective asset or assets
being sold, which Indebtedness is repaid as a result of such transaction; (b)
with respect to any Debt Issuance, cash received, on or after the date of
incurrence of such Indebtedness, by the Borrower



                                       12
<PAGE>

or any of its Subsidiaries from the incurrence of such Indebtedness after (i)
payment of all reasonable attorneys' fees and usual and customary underwriting
commissions, closing costs, and other reasonable expenses associated with such
Debt Issuance, and (ii) deductions for the amount of any other Indebtedness
(other than the Obligations or Indebtedness owed to the Borrower or any of its
Subsidiaries) which is required to be repaid concurrently with or otherwise as a
result of the incurrence of such Indebtedness; provided, however, in the case of
Taxes that are deductible under clause (a)(i) preceding or post-closing
adjustments under clause (a)(iii) preceding, but which Taxes or post-closing
adjustments have not actually been paid or are not yet payable, the Borrower or
any of its Subsidiaries selling such assets may deduct from the cash proceeds an
amount (the "RESERVED AMOUNT") equal to the amount reserved in accordance with
GAAP as a reasonable estimate for such Taxes or post-closing adjustments, so
long as, at the time such Taxes or post-closing adjustments are actually paid,
the amount, if any, by which the Reserved Amount exceeds the Taxes or
post-closing adjustments actually paid shall constitute additional "NET CASH
PROCEEDS" of such Significant Sale.

         NOTES means promissory notes of the Borrower, substantially in the form
of EXHIBIT B-1 and B-2 hereto, evidencing the obligation of Borrower to repay
the Loans, and "NOTE" means any one of such promissory notes issued hereunder.

         OBLIGATIONS means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest that accrues after the commencement by or against any Loan
Party or any Referenced Person thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding; provided that, all
references to the "Obligations" in each Guaranty and in SECTIONS 2.11(c) and
10.09 of this Agreement shall, in addition to the foregoing, also include all
present and future indebtedness, liabilities, and obligations (and all renewals
and extensions thereof or any part thereof) now or hereafter owed to any Lender
or any Affiliate of a Lender arising from or pursuant to any Swap Contract
entered into by the Borrower.

         OMNIBUS AGREEMENT means the Omnibus Agreement dated as of the date of
the MLP Offering Closing, among the MLP, the Borrower, TWC and certain of its
Affiliates.

         ORGANIZATION DOCUMENTS means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws; (b) with respect to any
limited liability company, the articles of formation and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other form of
business entity, the partnership, joint venture or other applicable agreement of
formation and any agreement, instrument, filing or notice with respect thereto
filed in connection with its formation with the secretary of state or other
department in the state of its formation, in each case as amended from time to
time.

         OTHER TAXES has the meaning specified in SECTION 3.01(b).

         OUTSTANDING AMOUNT means on any date, the sum of the Revolver Principal
Debt and the Term Loan Principal Debt.

         PARTICIPANT has the meaning specified in SECTION 10.07(d).

         PARTNERSHIP AGREEMENT means (a) prior to the MLP Offering Closing, the
Partnership Agreement dated October 26, 2000, and (b) after the MLP Offering
Closing, the Amended and Restated Agreement of



                                       13
<PAGE>

Limited Partnership of Williams Energy Partners, L.P., in the form attached as
an Appendix to the MLP Registration Statement (in Amendment No. 2 thereto), with
such changes, if any, as are satisfactory to the Required Lenders.

         PBGC means the Pension Benefit Guaranty Corporation.

         PENSION PLAN means any "employee pension benefit plan" (as such term is
defined in Section 3(2)(A) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding five plan years.

         PERMITTED ACQUISITION means an Acquisition, so long as the following
requirements have been satisfied:

                  (i) Such Acquisition shall not result in the Borrower's
         ownership of a Foreign Subsidiary;

                  (ii) At the time of the closing of the Acquisition, the
         Borrower shall deliver to the Administrative Agent (A) a certificate of
         a Responsible Officer of Borrower certifying that as of the closing of
         the Acquisition, no Default or Event of Default (including a Default
         pursuant to SECTION 7.09) shall exist or occur as a result thereof and
         after giving effect thereto, and (B) a copy of the purchase agreement
         governing such Acquisition;

                  (iii) At the time of closing of the Acquisition, the Borrower
         shall deliver to the Administrative Agent a Compliance Certificate in
         the form of EXHIBIT C-2, demonstrating pro forma compliance with
         SECTIONS 7.03 and 7.14, as of the closing of the Acquisition after
         giving effect thereto and after giving effect to any Indebtedness
         (including Obligations) incurred in connection therewith; and

                  (iv) If such Acquisition results in the Borrower's ownership
         of a Subsidiary who is not yet a Guarantor, the Borrower shall have
         complied with the requirements of SECTION 6.14 as of the date of such
         Acquisition.

         PERMITTED AFFILIATE SUBORDINATED DEBT means unsecured Indebtedness of
the Borrower owed to TWC or a Subsidiary of TWC, subordinated to the Obligations
pursuant to subordination terms substantially in the form set forth in EXHIBIT G
or such other subordination terms as shall be satisfactory to (and prior to the
incurrence of such Indebtedness, approved by) the Required Lenders, provided
that such Indebtedness (i) shall not bear a rate of interest which is greater
than a market rate of interest, (ii) shall not require any Principal Payment
earlier than six (6) months after the Maturity Date, and (iii) shall be subject
to such other terms as set forth on the form of Intercompany Note attached
hereto as EXHIBIT G or as shall be reasonably satisfactory to (and prior to the
incurrence of such Indebtedness, approved by) the Required Lenders.

         PERMITTED LIENS means Liens permitted under SECTION 7.01 as described
in such Section.

         PERSON means any individual, trustee, corporation, general partnership,
limited partnership, limited liability company, joint stock company, trust,
unincorporated organization, bank, business association, firm, joint venture or
Governmental Authority.



                                       14
<PAGE>

         PLAN means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.

         PRESENT AND RELATED BUSINESSES means the storage, transportation and
distribution of hydrocarbons and ammonia, and businesses related thereto.

         PRINCIPAL PAYMENT means a payment of principal (or, in the case of a
Synthetic Lease, Attributable Principal), whether pursuant to an amortization
schedule, at maturity, or otherwise.

         PRO RATA SHARE means, at any date of determination, for any Lender with
respect to a particular Facility or Subfacility, the percentage (carried out to
the ninth decimal place) that its Committed Sum for such Facility or Subfacility
bears to the aggregate Committed Sums of all Lenders for such Facility or
Subfacility.

         QUARTERLY DISTRIBUTIONS means the distributions by the Borrower of
Available Cash (as defined in the Partnership Agreement).

         REFERENCE PERIOD has the meaning set forth in SECTION 7.14(c)(i).

         REFERENCED PERSON means the Borrower, any Guarantor, the General
Partner, or any of their respective Subsidiaries, and the MLP.

         REGISTER has the meaning set forth in SECTION 10.07(c).

         RELEASE means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposal,
deposit, dispersal, migrating, or other movement into the air, ground, or
surface water, or soil in violation of any Environmental Law.

         REPORTABLE EVENT means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.

         REQUIRED LENDERS means (a) on any date of determination on and after
the Closing Date and prior to the date of the initial Borrowing, those Lenders
holding 50.1% or more of the Aggregate Committed Sum, (b) on any date of
determination on and after the date of the initial Borrowing and prior to the
Revolver Maturity Date, those Lenders holding 50.1% or more of the sum of (i)
the Revolver Commitment plus (ii) the Term Loan Principal Debt; and (c) on any
date of determination on or after the Revolver Maturity Date, those Lenders
holding 50.1% or more of the Outstanding Amount.

         REQUIRED REVOLVER LENDERS means (a) on any date of determination on and
after the Closing Date and prior to the Revolver Maturity Date, those Lenders
holding more than 50% of the Revolver Commitment, and (b) on any date of
determination on or after the Revolver Maturity Date, those Lenders holding more
than 50% of the Revolver Principal Debt.

         REQUIRED TERM LENDERS means (a) on any date of determination on and
after the Closing Date and prior to the date of the initial Borrowing, those
Lenders holding more than 50% of the Term Loan Commitment, and (b) on any date
of determination on and after the date of the initial Borrowing, Term Loan
Lenders holding more than 50% of the Term Loan Principal Debt.

         RESPONSIBLE OFFICER means the president, chief executive officer, chief
financial officer, treasurer or assistant treasurer of a Loan Party or other
Person, as applicable. Any document delivered hereunder



                                       15
<PAGE>

that is signed by a Responsible Officer of a Loan Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such Loan Party and such Responsible Officer shall
be conclusively presumed to have acted on behalf of such Loan Party.

         RESTRICTED PAYMENT means any dividend or other distribution (whether in
cash, securities or other property) with respect to any equity interest in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such equity interest or of any option, warrant or other right to acquire any
such equity interest.

         REVOLVER COMMITMENT means an amount (subject to reduction or
cancellation as herein provided) equal to the sum of (i) the Acquisition
Subfacility Commitment, plus (ii) the Working Capital/Distribution Subfacility
Commitment.

         REVOLVER FACILITY means the credit facility as described in and subject
to the limitations set forth in SECTION 2.01.

         REVOLVER LENDER means, on any date of determination, any Lender that
has a Committed Sum under the Revolver Facility or that is owed any Revolver
Principal Debt.

         REVOLVER MATURITY DATE means (a) February 5, 2004, or (b) such earlier
effective date of any other termination, cancellation, or acceleration of all
commitments to lend under the Revolver Facility.

         REVOLVER NOTE means a promissory note in substantially the form of
EXHIBIT B-1, and all renewals and extensions of all or any part thereof.

         REVOLVER PRINCIPAL DEBT means, on any date of determination, the
aggregate unpaid principal balance of all Borrowings under the Revolver
Facility.

         RIGHTS means rights, remedies, powers, privileges, and benefits.

         SIGNIFICANT SALE means any Disposition (other than a Disposition
permitted by SECTION 7.05(a)) by a Company to any other Person (other than to
the Borrower or to a Wholly-owned Subsidiary of the Borrower) with respect to
which the Net Cash Proceeds realized by any Company for such Disposition exceed
$25,000 and when aggregated with the Net Cash Proceeds from all such other
Dispositions occurring since the Closing Date, equals or exceeds an amount which
is equal to 4% of the Borrower's assets (measured as of the close of the most
recent fiscal quarter end).

         SUBFACILITIES means, collectively, the Acquisition Subfacility and the
Working Capital/Distribution Subfacility.

         SUBSIDIARY of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.



                                       16
<PAGE>

         SWAP CONTRACT means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.

         SWAP TERMINATION VALUE means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender).

         SYNTHETIC LEASE OBLIGATION means the monetary obligation 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 that
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). The amount of any Synthetic
Lease Obligation as of any date shall be deemed to be the amount of Attributable
Principal in respect thereof as of such date.

         TAXES has the meaning set forth in SECTION 3.01.

         TERM LOAN COMMITMENT means an amount (subject to reduction or
cancellation as herein provided) equal to $90,000,000.

         TERM LOAN FACILITY means the credit facility as described in and
subject to the limitations set forth in SECTION 2.02.

         TERM LOAN LENDER means, on any date of determination, any Lender that
has a Committed Sum under the Term Loan Facility or that is owed any Term Loan
Principal Debt.

         TERM NOTE means a promissory note substantially in the form of EXHIBIT
B-2, and all renewals and extensions of all or any part thereof.

         TERM LOAN MATURITY DATE means the earlier of (a) February 5, 2004, and
(b) the effective date of any other termination, cancellation, or acceleration
of the commitment to lend under the Term Loan Facility.

         TERM LOAN PRINCIPAL DEBT means, on any date of determination, the
aggregate unpaid principal balance of all Borrowings under the Term Loan
Facility.



                                       17
<PAGE>

         TERMINALS HOLDING LLC means Williams Terminals Holding LLC, a Delaware
limited liability company to be merged into Terminals L.P. on or prior to the
MLP Offering Closing.

         TERMINALS L.P. means Williams Terminals Holding L.P., a Delaware
limited partnership, a wholly-owned Subsidiary of TWC, which will become a
Subsidiary of Borrower on or prior to the MLP Offering Closing.

         TWC means The Williams Companies, Inc.

         TYPE means, with respect to a Loan, its character as a Base Rate Loan
or a Eurodollar Rate Loan.

         UNFUNDED PENSION LIABILITY means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

         VOTING STOCK means the capital stock (or equivalent thereof) of any
class or kind, of a Person, the holders of which are entitled to vote for the
election of directors, managers, or other voting members of the governing body
of such Person.

         WHOLLY-OWNED when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) shall be owned by Parent or one
or more of its Wholly-owned Subsidiaries.

         WORKING CAPITAL/DISTRIBUTION SUBFACILITY has the meaning specified in
SECTION 2.01(c).

         WORKING CAPITAL/DISTRIBUTION SUBFACILITY COMMITMENT means an amount
(subject to reduction or cancellation as herein provided) equal to
$20,000,000.00.

         WORKING CAPITAL/DISTRIBUTION SUBFACILITY PRINCIPAL DEBT means, on any
date of determination, the aggregate unpaid principal amount of all Borrowings
under the Working Capital/Distribution Subfacility.

         1.02 OTHER INTERPRETIVE PROVISIONS.

         (a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.

         (b)      (i) The words "HEREIN" and "HEREUNDER" and words of similar
import when used in any Loan Document shall refer to such Loan Document as a
whole and not to any particular provision thereof.

                  (ii) Unless otherwise specified herein, Article, Section,
         Exhibit and Schedule references are to this Agreement.

                  (iii) The term "INCLUDING" is by way of example and not
         limitation.

                  (iv) The term "DOCUMENTS" includes any and all instruments,
         documents, agreements, certificates, notices, reports, financial
         statements and other writings, however evidenced.



                                       18
<PAGE>

         (c) In the computation of periods of time from a specified date to a
later specified date, the word "FROM" means "FROM AND INCLUDING;" the words "TO"
and "UNTIL" each mean "TO BUT EXCLUDING;" and the word "through" means "TO AND
INCLUDING."

         (d) Section headings herein and the other Loan Documents are included
for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.

         1.03 ACCOUNTING TERMS. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise specifically prescribed
herein.

         1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

         1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan Document; and
(b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.

                                  ARTICLE II.
                         THE COMMITMENTS AND BORROWINGS

         2.01 REVOLVER FACILITY. (a) Each Revolver Lender severally, but not
jointly, agrees to lend to Borrower such Revolver Lender's Pro Rata Share of one
or more Borrowings under (i) the Acquisition Subfacility (further described in
SECTION 2.01(b) below) not to exceed such Lender's Committed Sum under the
Acquisition Subfacility, and (ii) the Working Capital/Distribution Subfacility
(further described in SECTION 2.01(c) below) not to exceed such Lender's
Committed Sum under the Working Capital/Distribution Subfacility. Such
Borrowings may be repaid and reborrowed from time to time in accordance with the
terms and provisions of the Loan Documents; provided that, each such Borrowing
must occur on a Business Day and no later than the Business Day immediately
preceding the Revolver Maturity Date.

         (b) Loans under the Acquisition Subfacility shall be available to
Borrower for the purposes set forth in SECTION 6.12(b). After giving effect to
any Borrowing under the Acquisition Subfacility, the Acquisition Subfacility
Principal Debt shall not exceed the Acquisition Subfacility Commitment then in
effect.

         (c) Loans under the Working Capital/Distribution Subfacility shall be
available to Borrower for the purposes set forth in SECTION 6.12(c); provided,
however, Borrowings under the Working Capital/Distribution Subfacility will be
available to fund Quarterly Distributions only if, at the time of such Borrowing
and after giving effect thereto, there is at least $9,000,000.00 of the Working
Capital/Distribution Subfacility Commitment undrawn and available for working
capital purposes. After



                                       19
<PAGE>

giving effect to any Borrowing under the Working Capital/Distribution
Subfacility, the Working Capital/Distribution Subfacility Principal Debt shall
not exceed the Working Capital/Distribution Subfacility Commitment then in
effect.

         2.02 TERM LOAN FACILITY. Subject to and in reliance upon the terms,
conditions, representations, and warranties in the Loan Documents, each Term
Loan Lender severally, but not jointly, agrees to lend to Borrower in a single
disbursement on the Conditions Effective Date such Lender's Pro Rata Share of
the Term Loan Commitment. If all or a portion of the Term Loan Principal Debt is
paid or prepaid, then the amount so paid or prepaid may not be reborrowed. Any
portion of the Term Loan Commitment that remains undisbursed after the initial
disbursement under the Term Loan Facility shall be reduced to zero and cancelled
on the date of such initial disbursement.

         2.03 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.

         (a) Each Borrowing, each conversion of Loans from one Type to the
other, and each continuation of Loans as the same Type shall be made upon the
Borrower's irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m., New York time, (i) three Business Days prior to the
requested date of any Borrowing of, conversion to or continuation of Eurodollar
Rate Loans, (ii) one Business Day prior to the conversion of Eurodollar Rate
Loans to Base Rate Loans, and (iii) on the requested date of any Borrowing of
Base Rate Loans. Each such telephonic notice must be confirmed promptly by
delivery to the Administrative Agent of a written Borrowing Notice,
appropriately completed and signed by an authorized officer of the Borrower.
Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall
be in a principal amount of $500,000 or a whole multiple of $500,000 in excess
thereof. Each Borrowing of or conversion to Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Borrowing Notice (whether telephonic or written) shall specify (i) whether
the Borrowing, conversion or continuation (as applicable) is under the Term Loan
Facility or the Revolver Facility, and if it is under the Revolver Facility,
whether it is under the Acquisition Subfacility or the Working
Capital/Distribution Subfacility, (ii) whether the Borrower is requesting a
Borrowing, a conversion of Loans from one Type to the other, or a continuation
of Loans as the same Type, (iii) the requested date of the Borrowing, conversion
or continuation, as the case may be (which shall be a Business Day), (iv) the
principal amount of Loans to be borrowed, converted or continued, (v) the Type
of Loans to be borrowed or to which existing Loans are to be converted, and (vi)
if applicable, the duration of the Interest Period with respect thereto. If the
Borrower fails to specify a Type of Loan in a Borrowing Notice or if the
Borrower fails to give a timely notice requesting a conversion or continuation,
then the applicable Loans shall be made or continued as, or converted to, Base
Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective
as of the last day of the Interest Period then in effect with respect to the
applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such Borrowing
Notice, but fails to specify an Interest Period, it will be deemed to have
specified an Interest Period of one month.

         (b) Following receipt of a Borrowing Notice, the Administrative Agent
shall promptly notify each Lender of its Pro Rata Share of the applicable Loans,
and if no timely notice of a conversion or continuation is provided by the
Borrower, the Administrative Agent shall notify each Lender of the details of
any automatic conversion to Base Rate Loans described in the preceding
subsection. In the case of a Borrowing, each Lender shall make the amount of its
Loan available to the Administrative Agent in immediately available funds at the
Administrative Agent's Office not later than 1:00 p.m., New York time, on the
Business Day specified in the applicable Borrowing Notice. Upon satisfaction of
the applicable conditions set forth in SECTION 4.02 (and, if such Borrowing is
the initial Borrowing, SECTION 4.01), the



                                       20
<PAGE>

Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to the Administrative Agent by the Borrower.

         (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of the Interest Period for such
Eurodollar Rate Loan. During the existence of a Default or Event of Default, no
Loans may be requested as, converted to or continued as Eurodollar Rate Loans
without the consent of the Required Lenders, and the Required Lenders may demand
that any or all of the then outstanding Eurodollar Rate Loans be converted
immediately to Base Rate Loans.

         (d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Eurodollar Rate Loan upon
determination of such interest rate. The determination of the Eurodollar Rate by
the Administrative Agent shall be conclusive in the absence of manifest error.

         (e) After giving effect to all Borrowings, all conversions of Loans
from one Type to the other, and all continuations of Loans as the same Type,
there shall not be more than ten (10) Interest Periods in effect at any given
time with respect to Loans.

         2.04 PREPAYMENTS.

         (a) Optional Prepayments. The Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay in
whole or in part the Acquisition Subfacility Principal Debt, the Working
Capital/Distribution Subfacility Principal Debt and/or the Term Loan Principal
Debt without premium or penalty; provided that (i) such notice must be received
by the Administrative Agent not later than 11:00 a.m., New York time, (A) three
Business Days prior to any date of prepayment of Eurodollar Rate Loans, and (B)
on the date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar
Rate Loans shall be in a principal amount of $500,000 or a whole multiple of
$500,000 in excess thereof; and (iii) any prepayment of Base Rate Loans shall be
in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof. Each such notice shall specify the date and amount of such prepayment,
the Facility (or, as the case may be, Subfacility) being prepaid and the Type(s)
of Loans to be prepaid. The Administrative Agent will promptly notify each
Lender of its receipt of each such notice, and of such Lender's Pro Rata Share
of such prepayment. If such notice is given by the Borrower, the Borrower shall
make such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein. Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest thereon, together with
any additional amounts required pursuant to SECTION 3.05. Each such prepayment
shall be applied to the Loans of the Lenders in accordance with their respective
Pro Rata Shares.

         Unless a Default or Event of Default has occurred and is continuing or
would arise as a result thereof any payment or prepayment of the Revolver
Principal Debt may be reborrowed by Borrower, subject to the terms and
conditions hereof.

         (b) Mandatory Prepayments from Net Cash Proceeds. Until such time as
the Outstanding Amount has been repaid in full and the Revolver Commitment
terminated in full, the Outstanding Amount (and, as applicable, the Revolver
Commitment) shall be permanently prepaid (or reduced, as the case may be), in
the amounts and upon the occurrence of any of the following events:



                                       21
<PAGE>

                  (i) Debt Issuance. In the event of any Debt Issuance by a
         Company, if Outstanding Indebtedness exceeds $30,000,000 after giving
         effect to such Debt Issuance, then concurrently with such Debt
         Issuance, the Loans shall be prepaid using Net Cash Proceeds of such
         Debt Issuance (and the Revolver Commitment reduced to the extent
         required by this SECTION 2.04(b)) by the Required Amount as defined in
         this SECTION 2.04(b)(i). As used in this Section: (A) "Outstanding
         Indebtedness" as of any date means the aggregate principal amount of
         outstanding Indebtedness plus the Attributable Principal of all
         Synthetic Leases of the Borrower and its Subsidiaries (including the
         Indebtedness and Synthetic Leases being issued, incurred or assumed on
         such date but excluding Permitted Affiliate Subordinated Debt and
         excluding Indebtedness under the Loan Documents), and (B) "Required
         Amount" means the lesser of (i) 100% of the Net Cash Proceeds of such
         Debt Issuance and (ii) amount by which the Outstanding Indebtedness
         exceeds $30,000,000.

                  (ii) Significant Sales. If any portion of the Net Cash
         Proceeds realized by a Company from any Significant Sale (including any
         deferred purchase price therefor and any Net Cash Proceeds of any asset
         disposition which constitutes a Significant Sale) has not been
         reinvested in assets used in the Present and Related Businesses of a
         Company within ninety (90) days from the receipt by such Company of
         such Net Cash Proceeds (including receipt of any deferred payments for
         any such Significant Sale or portion thereof, if and when received),
         then on the day following the ninetieth day after receipt of such Net
         Cash Proceeds, the Outstanding Amount shall be prepaid (and the
         Revolver Commitment reduced to the extent required in this SECTION
         2.04(b)), in the order and manner specified in the following paragraph,
         by an amount equal to 100% of all such Net Cash Proceeds not so
         reinvested.

         The commitment reductions or prepayments provided for under SECTIONS
2.04(b)(i) and (ii) are in addition to the payments provided for in SECTION
6.13. The prepayments and commitment reductions under SECTIONS 2.04(b)(i) and
(ii) shall be applied as follows, unless a Default or Event of Default has
occurred and is continuing or would arise as a result thereof (whereupon the
provisions of SECTION 2.13(b) shall apply): (A) first, as a prepayment of the
Term Loan Principal Debt until paid in full, and (B) second, as a mandatory
permanent reduction of the Revolver Commitment and a mandatory prepayment of the
Revolver Principal Debt, provided, however, the allocation of commitment
reductions or prepayments between the Subfacilities shall be determined (i) if
no Default or Event of Default has occurred and is continuing, in the order and
manner that the Borrower specifies, or (ii) if the Borrower fails to so specify
or if a Default or Event of Default has occurred and is continuing, in the order
and manner that the Revolver Required Lenders deem appropriate. All mandatory
prepayments of the Term Loan Principal Debt shall be allocated Pro Rata to each
Term Loan Lender. All mandatory prepayments of the Revolver Facility shall be
allocated Pro Rata to each Revolver Lender. All mandatory prepayments of the
Revolver Facility made pursuant to this SECTION 2.04(b) shall permanently reduce
the Revolver Commitment.

         (c) Clean-Down Period. The Borrower shall make such repayments of the
Working Capital/Distribution Subfacility Principal Debt as are required by
SECTION 6.13.

         (d) Revolver Facility Mandatory Payments/Reductions. On any date of
determination (i) if the Acquisition Subfacility Principal Debt exceeds the
Acquisition Subfacility Commitment then in effect (including as a result of any
Revolver Commitment reduction pursuant to SECTION 2.04(b)), then the Borrower
shall make a mandatory prepayment of the Acquisition Subfacility Principal Debt
in at least the amount of such excess, and (ii) if the Working
Capital/Distribution Subfacility Principal Debt exceeds the Working
Capital/Distribution Subfacility Commitment then in effect (including as a
result of any Revolver Commitment reduction pursuant to SECTION 2.04(b)), then
the Borrower shall make a mandatory



                                       22
<PAGE>

prepayment of the Working Capital/Distribution Subfacility Principal Debt in at
least the amount of such excess. All mandatory prepayments under the Revolver
Facility or Revolver Commitment reductions hereunder shall be allocated among
the Revolver Lenders in accordance with their respective Pro Rata Share under
the Revolver Facility.

         (e) Mandatory Prepayments: Interest/Consequential Loss. All prepayments
under this SECTION 2.04 shall be made together with accrued interest to the date
of such prepayment on the principal amount prepaid and any amounts due under
SECTION 3.05.

         2.05 REDUCTION OR TERMINATION OF COMMITMENTS. The Borrower may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or
(prior to the Initial Funding Date) permanently reduce the Term Loan Commitment,
or permanently reduce the Revolver Commitment to an amount not less than the
then existing Revolver Principal Debt; provided that (i) any such notice shall
be received by the Administrative Agent not later than 11:00 a.m., five Business
Days prior to the date of termination or reduction, and (ii) any such partial
reduction shall be in an aggregate amount of $5,000,000 or any whole multiple of
$1,000,000 in excess thereof. The Administrative Agent shall promptly notify the
Lenders of any such notice of reduction or termination. Once reduced in
accordance with this Section, the Commitments may not be increased. Any
reduction of the Revolver Commitment shall be applied to the Commitment of each
Revolver Lender according to its Pro Rata Share, and any reduction of the Term
Loan Commitment shall be applied to the Commitment of each Term Loan Lender
according to its Pro Rata Share. All commitment fees on the portion of the
Commitment so terminated which have accrued to the effective date of any
termination of Commitments shall be paid on the effective date of such
termination.

         2.06 REPAYMENT OF LOANS. The Borrower shall repay to the Revolver
Lenders on the Revolver Maturity Date the Revolver Principal Debt and the
Borrower shall repay to the Term Loan Lenders on the Term Loan Maturity Date the
Term Loan Principal Debt.

         2.07 INTEREST.

         (a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Rate and (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the
Applicable Rate.

         (b) While any Event of Default exists or after acceleration, (i) the
Borrower shall pay interest on the principal amount of all outstanding
Obligations at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Law, and (ii) accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

         (c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.

         (d) 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



                                       23
<PAGE>

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
Outstanding Amount, 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 Borrower shall pay an amount equal to the difference between (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, and (b) the amount of
interest actually paid or accrued on the Outstanding Amount.

         2.08 FEES.

         (a) Commitment Fee. For the period commencing on the Closing Date and
ending on the earlier of (i) the date of the initial Borrowing under the Term
Loan Facility or (ii) termination of the Term Loan Commitment, the Borrower
shall pay to the Administrative Agent for the account of each Term Loan Lender
in accordance with its Pro Rata Share, a commitment fee equal to the Applicable
Rate times the Term Loan Commitment. For the period commencing on the Closing
Date and ending on the Revolver Maturity Date, the Borrower shall pay to the
Administrative Agent for the account of each Revolver Lender in accordance with
its Pro Rata Share, a commitment fee equal to the Applicable Rate times the
actual daily amount by which the aggregate Revolver Commitment exceeds the
Revolver Principal Debt. The commitment fee shall accrue at all times from the
Closing Date, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date. The
commitment fee shall be calculated quarterly in arrears, and if there is any
change in the Applicable Rate during any quarter, the actual daily amount shall
be computed and multiplied by the Applicable Rate separately for each period
during such quarter that such Applicable Rate was in effect. The commitment fee
shall accrue at all times, including at any time during which one or more of the
conditions in ARTICLE IV is not met.

         (b) Arrangement and Agency Fees. The Borrower shall pay an arrangement
fee to the Arrangers for the Arrangers' own account, and shall pay an agency fee
to the Administrative Agent for the Administrative Agent's own account, in the
amounts and at the times specified in the letter agreement, dated January 5,
2001 (the "AGENT/ARRANGER FEE LETTER"), between the Borrower, the Arrangers and
the Administrative Agent. Such fees shall be fully earned when paid and shall be
nonrefundable for any reason whatsoever.

         (c) Lenders' Upfront Fee. On the Initial Funding Date, the Borrower
shall pay to the Administrative Agent, for the account of the Lenders in
accordance with their respective Pro Rata Shares, an upfront fee in the agreed
amount in accordance with the Agent/Arranger Fee Letter. Such upfront fees are
for the credit facilities by the Lenders under this Agreement and are fully
earned on the date paid. The upfront fee paid to each Lender is solely for its
own account and is nonrefundable for any reason whatsoever.

         2.09 COMPUTATION OF INTEREST AND FEES. Computation of interest on Base
Rate Loans shall be calculated on the basis of a year of 365 or 366 days, as the
case may be, and the actual number of days elapsed. Computation of all other
types of interest and all fees shall be calculated on the basis of a year of 360
days and the actual number of days elapsed, which results in a higher yield to
the payee thereof than a method based on a year of 365 or 366 days. Interest
shall accrue on each Loan for the day on which the Loan is made, and shall not
accrue on a Loan, or any portion thereof, for the day on which the Loan or such
portion is paid, provided that any Loan that is repaid on the same day on which
it is made shall bear interest for one day.



                                       24
<PAGE>

         2.10 EVIDENCE OF DEBT. The Loans made by each Lender shall be evidenced
by one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Loans made by the Lenders to the
Borrower and the interest and payments thereon. Any failure so to record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Borrower hereunder to pay any amount owing with respect to the Loans. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of such Lender shall control. Upon the
request of any Lender made through the Administrative Agent, such Lender's Loans
may be evidenced by one or more of the following Notes (as the case may be): (i)
a Revolver Note (with respect to the Revolver Principal Debt), and (ii) a Term
Note (with respect to the Term Loan Principal Debt). Each Lender may attach
schedules to its Note(s) and endorse thereon the date, Type (if applicable),
amount and maturity of the applicable Loans and payments with respect thereto.

         2.11 PAYMENTS GENERALLY.

         (a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 12:00 noon,
New York time, on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its Pro Rata Share (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer
to such Lender's Lending Office. All payments received by the Administrative
Agent after 12:00 noon, New York time, shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.

         (b) Subject to the definition of "Interest Period," if any payment to
be made by the Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.

         (c) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully the Obligations, such funds shall be
applied (i) first, toward costs and expenses (including Attorney Costs and
amounts payable under ARTICLE III) incurred by the Administrative Agent and each
Lender, (ii) second, toward repayment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, (iii) third, toward repayment of
principal then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal then due to such parties, and (iv)
fourth, toward the repayment of all other Obligations.

         (d) Unless the Borrower or any Lender has notified the Administrative
Agent prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:



                                       25
<PAGE>

                  (i) if the Borrower failed to make such payment, each Lender
         shall forthwith on demand repay to the Administrative Agent the portion
         of such assumed payment that was made available to such Lender in
         immediately available funds, together with interest thereon in respect
         of each day from and including the date such amount was made available
         by the Administrative Agent to such Lender to the date such amount is
         repaid to the Administrative Agent in immediately available funds, at
         the Federal Funds Rate from time to time in effect; and

                  (ii) if any Lender failed to make such payment, such Lender
         shall forthwith on demand pay to the Administrative Agent the amount
         thereof in immediately available funds, together with interest thereon
         for the period from the date such amount was made available by the
         Administrative Agent to the Borrower to the date such amount is
         recovered by the Administrative Agent (the "COMPENSATION PERIOD") at a
         rate per annum equal to the Federal Funds Rate from time to time in
         effect. If such Lender pays such amount to the Administrative Agent,
         then such amount shall constitute such Lender's Loan, included in the
         applicable Borrowing. If such Lender does not pay such amount forthwith
         upon the Administrative Agent's demand therefor, the Administrative
         Agent may make a demand therefor upon the Borrower, and the Borrower
         shall pay such amount to the Administrative Agent, together with
         interest thereon for the Compensation Period at a rate per annum equal
         to the rate of interest applicable to the applicable Borrowing. Nothing
         herein shall be deemed to relieve any Lender from its obligation to
         fulfill its Commitment or to prejudice any rights which the
         Administrative Agent or the Borrower may have against any Lender as a
         result of any default by such Lender hereunder.

         A notice of the Administrative Agent to any Lender with respect to any
amount owing under this subsection (d) shall be conclusive, absent manifest
error.

         (e) If any Lender makes available to the Administrative Agent funds for
any Loan to be made by such Lender as provided in the foregoing provisions of
this ARTICLE II, and the conditions to the applicable Borrowing set forth in
ARTICLE IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

         (f) The obligations of the Lenders hereunder to make Loans are several
and not joint. The failure of any Lender to make any Loan on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan or purchase its participation.

         (g) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

         2.12 SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it,
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other Lenders such
participations in the Loans made by them, as shall be necessary to cause such
purchasing Lender to share the excess payment in respect of such Loan or such
participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender, such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with



                                       26
<PAGE>

an amount equal to such paying Lender's ratable share (according to the
proportion of (i) the amount of such paying Lender's required repayment to (ii)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to SECTION 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.

         2.13 ORDER OF APPLICATION.

         (a) No Default. If no Default or Event of Default exists and if no
order of application is otherwise specified in the Loan Documents, payments and
prepayments of the Obligations shall be applied first to fees, second to accrued
interest then due and payable on the Outstanding Amount, and then to the
remaining Obligations in the order and manner as Borrower may direct.

         (b) Default. If a Default or Event of Default exists (or if Borrower
fails to give directions as permitted under SECTION 2.13(a)), any payment or
prepayment (including proceeds from the exercise of any Rights) shall be applied
to the Obligations in the following order: (i) to the payment of enforcement
expenses incurred by the Administrative Agent, including Attorney Costs; (ii) to
the ratable payment of all other fees, expenses, and indemnities for which the
Administrative Agent or Lenders have not been paid or reimbursed in accordance
with the Loan Documents (as used in this SECTION 2.13(b)(ii), a "RATABLE
PAYMENT" for any Lender or the Administrative Agent shall be, on any date of
determination, that proportion which the portion of the total fees, expenses,
and indemnities owed to such Lender or the Administrative Agent bears to the
total aggregate fees and indemnities owed to all Lenders and the Administrative
Agent on such date of determination); (iii) to the ratable payment of accrued
and unpaid interest on the Outstanding Amount (as used in this SECTION
2.13(b)(iii), "RATABLE PAYMENT" means, for any Lender, on any date of
determination, that proportion which the accrued and unpaid interest on the
Outstanding Amount owed to such Lender bears to the total accrued and unpaid
interest on the Outstanding Amount owed to all Lenders); (iv) to the ratable
payment of the Outstanding Amount (as used in this SECTION 2.13(b)(iv), "RATABLE
PAYMENT" means for any Lender, on any date of determination, that proportion
which the Outstanding Amount owed to such Lender bears to the Outstanding Amount
owed to all Lenders); and (v) to the payment of the remaining Obligations, if
any, in the order and manner Required Lenders deem appropriate.

         Subject to the provisions of ARTICLE IX and provided that
Administrative Agent shall not in any event be bound to inquire into or to
determine the validity, scope, or priority of any interest or entitlement of any
Lender and may suspend all payments or seek appropriate relief (including,
without limitation, instructions from Required Lenders or an action in the
nature of interpleader) in the event of any doubt or dispute as to any
apportionment or distribution contemplated hereby, Administrative Agent shall
promptly distribute such amounts to each Lender in accordance with the Agreement
and the related Loan Documents.



                                       27
<PAGE>

                                  ARTICLE III.
                     TAXES, YIELD PROTECTION AND ILLEGALITY

         3.01 TAXES.

         (a) Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its net
income, and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of which the
Administrative Agent or such Lender, as the case may be, is organized or
maintains its Lending Office (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as "TAXES"). If the Borrower shall be
required by any Laws to deduct any Taxes from or in respect of any sum payable
under any Loan Document to the Administrative Agent or any Lender, (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 Section), each of the Administrative Agent and such Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable Laws, and (iv) within 30 days after the date of such
payment, the Borrower shall furnish to the Administrative Agent (which shall
forward the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.

         (b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "OTHER TAXES").

         (c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent (for the account of such Lender) or to such Lender, at the
time interest is paid, such additional amount that such Lender specifies as
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) such Lender would have
received if such Taxes or Other Taxes had not been imposed.

         (d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under SECTION 3.01(c) and (iii) any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto. Payment under
this subsection (d) shall be made within 30 days after the date the Lender or
the Administrative Agent makes a demand therefor.

         3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or materially restricts the authority of such Lender to
purchase or sell, or to take deposits of, Dollars in the applicable offshore
Dollar market, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the



                                       28
<PAGE>

Borrower through the Administrative Agent, any obligation of such Lender to make
or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar
Rate Loans shall be suspended until such Lender notifies the Administrative
Agent and the Borrower that the circumstances giving rise to such determination
no longer exist. Upon receipt of such notice, the Borrower shall, upon demand
from such Lender (with a copy to the Administrative Agent), prepay or, if
applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans,
either on the last day of the Interest Period thereof, if such Lender may
lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower
shall also pay interest on the amount so prepaid or converted. Each Lender
agrees to designate a different Lending Office if such designation will avoid
the need for such notice and will not, in the reasonable judgment of such
Lender, otherwise be materially disadvantageous to such Lender.

         3.03 INABILITY TO DETERMINE RATES. If the Administrative Agent
determines in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the applicable offshore Dollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, or adequate and
reasonable means do not exist for determining the Eurodollar Rate for such
Eurodollar Rate Loan, or (b) if the Required Lenders determine and notify the
Administrative Agent that the Eurodollar Rate for such Eurodollar Rate Loan does
not adequately and fairly reflect the cost to the Lenders of funding such
Eurodollar Rate Loan, then the Administrative Agent will promptly notify the
Borrower and all Lenders. Thereafter, the obligation of the Lenders to make or
maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent
revokes such notice. Upon receipt of such notice, the Borrower may revoke any
pending request for a Borrowing, conversion or continuation of Eurodollar Rate
Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of Base Rate Loans in the amount specified therein.

         3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON
EURODOLLAR RATE LOANS.

         (a) If any Lender determines that as a result of the introduction of or
any change in or in the interpretation of any Law, or such Lender's compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans, or a reduction in
the amount received or receivable by such Lender in connection with any of the
foregoing (excluding for purposes of this subsection (a) any such increased
costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to
which SECTION 3.01 shall govern), (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the Laws of
which such Lender is organized or has its Lending Office, and (iii) reserve
requirements contemplated by SECTION 3.04(c) utilized, as to Eurodollar Rate
Loans, in the determination of the Eurodollar Rate), then from time to time upon
demand of such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such increased cost or reduction. No Lender shall have the right
to recover such additional amounts for any period more than 90 days prior to the
date such Lender notified the Borrower thereof.

         (b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by such Lender (or its Lending Office) therewith, has 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
(taking into consideration its policies with respect to capital adequacy and
such Lender's desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower



                                       29
<PAGE>

shall pay to such Lender such additional amounts as will compensate such Lender
for such reduction. No Lender shall have the right to recover such additional
amounts for any period more than 90 days prior to the date such Lender notified
the Borrower thereof.

         (c) The Borrower shall pay to each Lender, as long as such Lender shall
be required under regulations of the Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as "Eurocurrency liabilities"), additional costs on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive), which shall be due and
payable on each date on which interest is payable on such Loan, provided the
Borrower shall have received at least 15 days' prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a Lender
fails to give notice 15 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 15 days from receipt of such
notice.

         3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:

         (a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or

         (b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this SECTION 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the applicable offshore Dollar interbank market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Rate Loan was in fact so funded.

         3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. A certificate
of the Administrative Agent or any Lender claiming compensation under this
ARTICLE III and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, the Administrative Agent or such Lender may use any reasonable
averaging and attribution methods.

         3.07 SURVIVAL. All of the Borrower's obligations under this ARTICLE III
shall survive termination of the Commitments and payment in full of all the
other Obligations.

                                  ARTICLE IV.
                       CONDITIONS PRECEDENT TO BORROWINGS

         4.01 CONDITIONS OF INITIAL BORROWING. The obligation of each Lender to
make its initial Loan hereunder is subject to satisfaction of the following
conditions precedent:



                                       30
<PAGE>

         (a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) and unless
otherwise specified, each properly executed by an authorized officer of the
signing Loan Party, each dated the Conditions Effective Date (or, in the case of
certificates of governmental officials, a recent date before the Conditions
Effective Date) and each in form and substance reasonably satisfactory to the
Administrative Agent and its legal counsel:

                  (i) executed counterparts of this Agreement and the Guaranty;

                  (ii) Term Notes and/or Revolver Notes (as applicable) executed
         by the Borrower in favor of each Lender requesting such Notes, each in
         a principal amount equal to such Lender's Committed Sum;

                  (iii) such certificates of resolutions or other action,
         incumbency certificates and/or other certificates of officers of each
         Loan Party as the Administrative Agent may require to establish the
         identities of and verify the authority and capacity of each officer
         thereof authorized to act in connection with this Agreement and the
         other Loan Documents to which such Loan Party is a party;

                  (iv) such evidence as the Administrative Agent may reasonably
         require to verify that each Loan Party and the General Partner is duly
         organized or formed, validly existing, in good standing and qualified
         to engage in business in the jurisdiction of its organization and in
         each other jurisdiction in which it is required to be qualified to
         engage in business, except where such failure would not have a Material
         Adverse Effect;

                  (v) a certificate signed by an officer of the Borrower
         certifying (A) that the MLP Offering Closing has occurred and that the
         gross proceeds of the sale of limited partnership units (other than
         proceeds paid by TWC and its Affiliates) are not less than $55,000,000,
         (B) that the representations and warranties contained in ARTICLE V are
         true and correct in all respects on and as of such date, (C) no Default
         or Event of Default has occurred and is continuing as of such date, (D)
         since December 31, 1999 there has occurred no material adverse change
         in the business, assets, liabilities (actual or contingent),
         operations, condition (financial or otherwise) or prospects of the
         Borrower, any Guarantor or any of the businesses, assets or liabilities
         acquired or assumed or being acquired or assumed by the Borrower or any
         of its Subsidiaries, (E) the Borrower and its Subsidiaries own the
         assets and businesses reflected on the Initial Funding Date Pro Formas,
         including without limitation the Financed Assets, free and clear of all
         Liens other than Permitted Liens, and (F) no action, suit,
         investigation or proceeding is pending or threatened in any court or
         before any arbitrator or governmental authority by or against the
         Borrower, any Guarantor or any of the Borrower's partners or any of
         their respective properties, that (x) could reasonably be expected to
         materially and adversely affect the Borrower or any Guarantor, or (y)
         purports to affect or pertain to any transaction contemplated hereby or
         the ability of the Borrower or any Guarantor to perform its obligations
         under the Loan Documents;

                  (vi) opinions from (i) Vinson & Elkins, L.L.P., counsel to
         each Loan Party and the General Partner, substantially in the form of
         EXHIBIT F-1 hereto, and (ii) William G. von Glahn, counsel to each Loan
         Party and the General Partner, substantially in the form of EXHIBIT F-2
         hereto;

                  (vii) receipt of the following: (A) unaudited pro forma
         opening balance sheet for each of the MLP and the General Partner; (B)
         an estimated pro forma opening balance sheet of the



                                       31
<PAGE>

         Borrower; (C) combined audited balance sheets of Williams Energy
         Partners L.P. (a subsidiary of The Williams Companies, Inc.) as of
         December 31, 1998 and 1999 and audited income statements and statements
         of cash flows for each of the three years in the period ended December
         31, 1999; and (D) combined audited balance sheets of Marine Terminals
         Predecessor (as that term is used in the MLP Registration Statement) as
         of December 31, 1998 and July 31, 1999 and audited income statements
         and statements of cash flows for Marine Terminals Predecessor for each
         of the two years in the period ended December 31, 1998 and the seven
         months ended July 31, 1999;

                  (viii) copies of the following, in each case in form and
         substance reasonably satisfactory to the Required Lenders: (A) the
         Products Terminalling Agreement between Terminals Holding, LLC and
         Williams Energy Marketing & Trading Company; (B) the Omnibus Agreement;
         and (C) the Contribution Agreement.

                  (ix) a letter from CT Corporation System, Inc., to accept
         service of process in the State of New York on behalf of the Borrower
         and each Guarantor; and

                  (x) such other assurances, certificates, documents, consents
         or opinions as the Administrative Agent or the Required Lenders
         reasonably may require.

         (b) Any fees required to be paid on or before the Conditions Effective
Date shall have been paid.

         (c) The Borrower shall have paid Attorney Costs of the Administrative
Agent to the extent invoiced prior to or on the Conditions Effective Date.

         4.01A DEADLINE FOR INITIAL FUNDING DATE. If for any reason the Initial
Funding Date has not occurred on or before the 60th day after the Closing Date,
then, unless otherwise agreed by all Lenders, the commitments of the Lenders to
make Loans shall terminate on and as of such date.

         4.02 CONDITIONS TO ALL LOANS. The obligation of each Lender to honor
any Borrowing Notice (other than a Borrowing Notice requesting only a conversion
of Loans to the other Type, or a continuation of Loans as the same Type) is
subject to the following conditions precedent:

         (a) The representations and warranties of the Borrower contained in
ARTICLE V, or which are contained in any document furnished at any time under or
in connection herewith, shall be true and correct on and as of the date of such
Borrowing, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date.

         (b) No Default or Event of Default shall exist or would result from
such proposed Borrowing.

         (c) The Administrative Agent shall have received a Borrowing Notice in
accordance with the requirements hereof.

         (d) The Administrative Agent shall have received, in form and substance
reasonably satisfactory to it, such other assurances, certificates, documents or
consents related to the foregoing as the Administrative Agent or the Required
Lenders reasonably may require.

         Each Borrowing Notice (other than a Borrowing Notice requesting only a
conversion of Loans to the other Type or a continuation of Loans as the same
Type) submitted by the Borrower shall be deemed to



                                       32
<PAGE>

be a representation and warranty that the conditions specified in SECTIONS
4.02(a) and (b) have been satisfied on and as of the date of the applicable
Borrowing.

                                   ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants to the Administrative Agent and
the Lenders that:

         5.01 EXISTENCE; QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. As of
the Initial Funding Date, the General Partner shall be the sole general partner
of the Borrower, and all of the limited partnership interests in the Borrower
shall be owned by the MLP. The General Partner and each Loan Party (a) is a
corporation, partnership or limited liability company duly organized or formed,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, (b) has all requisite power and authority and all
governmental licenses, authorizations, consents and approvals to own its assets,
carry on its business and to execute, deliver, and perform its obligations under
the Loan Documents to which it is a party, (c) is duly qualified and is licensed
and in good standing under the Laws of each jurisdiction where its ownership,
lease or operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws, except in each
case referred to in clause (c) or this clause (d), to the extent that failure to
do so could not reasonably be expected to have a Material Adverse Effect.

         5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of any
of such Person's Organization Documents; (b) conflict with or result in any
breach or contravention of, or the creation of any Lien under, any Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject; or (c) violate any Law.

         5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Loan Party of
this Agreement or any other Loan Document.

         5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.

         5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.

         (a) The Initial Funding Date Financial Statements were prepared in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein. The Initial Funding Date Pro Formas
and the Initial Funding Date Financial Statements (i) fairly present the
financial condition of the entities therein named and their respective
Subsidiaries as of the date thereof and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein; and
(ii) show all



                                       33
<PAGE>

material indebtedness and other liabilities, direct or contingent, of the
entities therein named and their Subsidiaries as of the date thereof, including
liabilities for taxes, material commitments and Indebtedness in accordance with
GAAP consistently applied throughout the period covered thereby.

         (b) Since the dates of the Initial Funding Date Financial Statements,
there has been no event or circumstance that has or could reasonably be expected
to have a Material Adverse Effect.

         5.06 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Borrower after due and diligent
investigation, overtly threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, by or against the Borrower or
any of its Subsidiaries or against any of their properties or revenues which (a)
purport to affect or pertain to this Agreement or any other Loan Document, or
any of the transactions contemplated hereby, or (b) if determined adversely,
could reasonably be expected to have a Material Adverse Effect.

         5.07 NO DEFAULT. There is no failure of any Material Agreement to be in
effect, and there is no default by the Borrower or any of its Subsidiaries under
any Material Agreement, if such failure to remain in effect, or such default,
could reasonably be expected to have a Material Adverse Effect.

         5.08 OWNERSHIP OF PROPERTY; LIENS. The Borrower and each Subsidiary has
good and marketable title to, or valid leasehold interests in, all its real and
personal property necessary or used in the ordinary conduct of its business,
except for such defects in title as would not, individually or in the aggregate,
have a Material Adverse Effect. As of the Conditions Effective Date, the
property of the Borrower and its Subsidiaries is subject to no Liens, other than
Permitted Liens.

         5.09 ENVIRONMENTAL COMPLIANCE. The Borrower has reasonably concluded
that (a) there are no claims alleging potential liability under or
responsibility for violation of any Environmental Law except any such claims
that would not, individually or in the aggregate, have a Material Adverse
Effect, (b) there is no environmental condition or circumstance, such as the
presence or Release of any Hazardous Substance, on any property owned, operated
or used by the Borrower or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect, and (c) there is no violation of or
by the Borrower or any of its Subsidiaries of any existing Environmental Law,
except for such violations as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

         5.10 INSURANCE. As of the Initial Funding Date, the properties of the
Borrower and its Subsidiaries are insured with financially sound and reputable
insurance companies not Affiliates of the Borrower, in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Borrower or its Subsidiaries operate.

         5.11 TAXES. The Borrower and its Subsidiaries have filed all Federal,
state and other material tax returns and reports required to be filed, and have
paid all Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
the Borrower or any Subsidiary that would, if made, have a Material Adverse
Effect.



                                       34
<PAGE>

         5.12 ERISA COMPLIANCE.

         (a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws except
to the extent that noncompliance could not reasonably be expected to have a
Material Adverse Effect. Each Plan that is intended to qualify under Section
401(a) of the Code has received a favorable determination letter from the IRS or
an application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Borrower, nothing has occurred
which would prevent, or cause the loss of, such qualification. The Borrower and
each ERISA Affiliate have made all required contributions to each Plan subject
to Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.

         (b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could be reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any ERISA Affiliate has engaged in or
knowingly permitted to occur and, to the Borrower's knowledge, no other party
has engaged in or permitted to occur any prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan that has resulted or
could be reasonably expected to result in a Material Adverse Effect.

         (c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability that (when aggregated
with any other Unfunded Pension Liability) has resulted or could reasonably be
expected to result in a Material Adverse Effect; (iii) neither the Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA) which could reasonably be
expected to result in a Material Adverse Effect; (iv) neither the Borrower nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section 4219
of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA
with respect to a Multiemployer Plan which could reasonably be expected to
result in a Material Adverse Effect; and (v) neither the Borrower nor any ERISA
Affiliate has engaged in a transaction that could be subject to Sections 4069 or
4212(c) of ERISA.

         5.13 SUBSIDIARIES. As of the Closing Date the Borrower has no
Subsidiaries. As of the Initial Funding Date the Borrower will have no
Subsidiaries other than those specifically disclosed in SCHEDULE 5.13.

         5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT; USE OF PROCEEDS.

         (a) The Borrower is not engaged and will not engage, principally or as
one of its important activities, in the business of purchasing or carrying
margin stock (within the meaning of Regulation U issued by the Board), or
extending credit for the purpose of purchasing or carrying margin stock. Margin
Stock constitutes less than 25% of those assets of the Loan Parties which are
subject to any limitation on a sale, pledge, or other restrictions hereunder.

         (b) None of the Borrower, any Person controlling the Borrower, or any
Subsidiary (i) 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," within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940.



                                       35
<PAGE>

         (c) The Borrower will use all proceeds of Borrowings in the manner set
forth in SECTION 6.12.

         5.15 DISCLOSURE. No statement, information, report, representation, or
warranty made by any Loan Party in any Loan Document or furnished to the
Administrative Agent or any Lender by or on behalf of any Loan Party in
connection with any Loan Document contains any untrue statement of a material
fact or omits any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

         5.16 LABOR MATTERS. To the Borrower's knowledge, there are no actual or
threatened strikes, labor disputes, slowdowns, walkouts, or other concerted
interruptions of operations by the employees of the Borrower or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect. Hours worked by and payment made to employees of the Borrower or any of
its Subsidiaries have not been in violation of the Fair Labor Standards Act of
1938 or any other applicable Law dealing with such matters, other than any such
violations, individually or collectively, which could not reasonably be expected
to have a Material Adverse Effect. All payments due from the Borrower or any of
its Subsidiaries on account of employee health and welfare insurance have been
paid or accrued as a liability on its books, other than any such nonpayments
which could not, individually or collectively, reasonably be expected to have a
Material Adverse Effect.

         5.17 COMPLIANCE WITH LAWS. Neither the Borrower nor any of its
Subsidiaries are in violation of any Laws, other than such violations which
could not, individually or collectively, reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries has
received notice alleging any noncompliance with any Laws, except for such
noncompliance which no longer exists, or which non-compliance could not
reasonably be expected to have a Material Adverse Effect.

                                  ARTICLE VI.
                              AFFIRMATIVE COVENANTS

         So long as any Lender shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, the Borrower shall, and
shall (except in the case of the covenants set forth in SECTIONS 6.01, 6.02,
6.03 and 6.12) cause each Subsidiary to:

         6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and each
Lender, in form and detail reasonably satisfactory to the Administrative Agent
and the Required Lenders:

         (a) within 45 days of the date of the MLP Offering Closing, a
consolidated unaudited balance sheet of the Borrower and its Subsidiaries as of
such date, in reasonable detail and certified by a Responsible Officer of the
Borrower as fairly presenting the financial condition of the Borrower and its
Subsidiaries; and

         (b) as soon as available, but in any event within 105 days after the
end of each fiscal year of the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal year, and the related
statements of income and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all in
reasonable detail, and certified by a Responsible Officer of the Borrower as
fairly presenting the financial condition, results of operations and cash flows
of the Borrower and its Subsidiaries in accordance with GAAP; and



                                       36
<PAGE>

         (c) as soon as available, but in any event within 60 days after the end
of each of the first three fiscal quarters of each fiscal year of the Borrower,
a consolidated balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal quarter, and the related statements of income and cash flows for
such fiscal quarter and for the portion of the Borrower's fiscal year then
ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail and certified by a
Responsible Officer of the Borrower as fairly presenting the financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP; and

         (d) as soon as available, but in any event within 105 days after the
end of each fiscal year of the MLP, consolidated balance sheets of the MLP and
its Subsidiaries as at the end of such fiscal year, and the related statements
of income and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail, audited and accompanied by a report and opinion of Ernst & Young LLP or
other independent certified public accountant of nationally recognized standing
reasonably acceptable to the Required Lenders, which report and opinion shall be
prepared in accordance with GAAP and shall not be subject to any qualifications
or exceptions as to the scope of the audit nor to any qualifications and
exceptions not reasonably acceptable to the Required Lenders; provided, that, if
any financial statement referred to in this clause (d) is readily available
on-line through EDGAR, the Borrower shall not be obligated to furnish copies of
such financial statement; and

         (e) as soon as available, but in any event within 60 days after the end
of each of the first three fiscal quarters of each fiscal year of the MLP, a
consolidated balance sheet of the MLP and its Subsidiaries as at the end of such
fiscal quarter, and the related statements of income and cash flows for such
fiscal quarter and for the portion of the MLP's fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding fiscal
quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail and certified by a Responsible
Officer of the MLP as fairly presenting the financial condition, results of
operations and cash flows of the MLP and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes.

         6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:

         (a) concurrently with the delivery of the financial statements referred
to in SECTIONS 6.01(b) and (c), a duly completed Compliance Certificate in form
of EXHIBIT C-1 signed by a Responsible Officer of the Borrower;

         (b) promptly after requested by the Administrative Agent or any Lender,
copies of any detailed audit reports, management letters or recommendations
submitted to the board of directors or equivalent governing body (or the audit
committee thereof) of the Borrower or any of its Subsidiaries by independent
accountants in connection with the accounts or books of the Borrower or any of
its Subsidiaries, or any audit of any of them;

         (c) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the equity owners of the MLP, and copies of all annual, regular, periodic and
special reports and registration statements which the MLP may file or be
required to file with the Securities and Exchange Commission under Section 13 or
15(d) of the Securities Exchange Act of 1934, and not otherwise required to be
delivered to the Administrative Agent pursuant hereto;



                                       37
<PAGE>

provided, that, if such report, proxy, financial statement or other report or
communication is readily available on-line through EDGAR, the Borrower shall not
be obligated to furnish copies thereof; and

         (d) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or the MLP as the Administrative
Agent, at the request of any Lender, may from time to time reasonably request.

         6.03 NOTICES. Promptly notify the Administrative Agent and each Lender:

         (a) of the occurrence of any Default or Event of Default, as soon as
possible but in any event within ten days after the occurrence thereof;

         (b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including any of the following events if
such has resulted or could reasonably be expected to result in a Material
Adverse Effect: (i) breach or non-performance of, or any default under, a
Contractual Obligation of the Borrower or any Subsidiary; (ii) any litigation,
investigation, proceeding or suspension between the Borrower or any Subsidiary
and any Governmental Authority;

         (c) of any litigation, investigation or proceeding affecting any
Referenced Person in which (i) the amount involved exceeds (individually or
collectively) $15,000,000, or (ii) injunctive relief or similar relief is
sought, which could be reasonably expected to have a Material Adverse Effect;
and

         (d) of any material change in accounting policies or financial
reporting practices by the Borrower or the MLP.

         Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to SECTION
6.03(a) shall describe with particularity any and all provisions of this
Agreement or other Loan Document that have been breached.

         6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by the Borrower or such Subsidiary; and (b) all lawful claims which,
if unpaid, would by law become a Lien upon its property.

         6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and maintain
in full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization, except in a transaction permitted by
SECTION 7.04 and 7.05, (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except in a transaction permitted by SECTION
7.04 and 7.05, and (c) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.

         6.06 MAINTENANCE OF ASSETS AND BUSINESS (a) Maintain all material
licenses, permits, and franchises necessary for the normal business; (b) keep
all of its assets which are useful in and necessary to its business in good
working order and condition (ordinary wear and tear excepted) and make all
necessary repairs thereto and replacements thereof; and (c) do all things
necessary to obtain, renew, extend, and



                                       38
<PAGE>

continue in effect all Authorizations which may at any time and from time to
time be necessary for the Borrower and its Subsidiaries to operate their
businesses in compliance with applicable Law; except where the failure to so
maintain, renew, extend, or continue in effect could not reasonably be expected
to have a Material Adverse Effect.

         6.07 MAINTENANCE OF INSURANCE. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.

         6.08 COMPLIANCE WITH LAWS. Comply in all material respects with the
requirements of all Laws (including Environmental Laws) applicable to it or to
its business or property, except in such instances in which (i) such requirement
of Law is being contested in good faith or a bona fide dispute exists with
respect thereto; or (ii) the failure to comply therewith could not be reasonably
expected to have a Material Adverse Effect.

         6.09 BOOKS AND RECORDS.

         (a) Maintain proper books of record and account, in which full, true
and correct entries in conformity with GAAP consistently applied shall be made
of all financial transactions and matters involving the assets and business of
the Borrower or such Subsidiary, as the case may be; and (b) maintain such books
of record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over the Borrower or
such Subsidiary, as the case may be.

         6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants, at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to the Borrower;
provided, however, that when an Event of Default exists the Administrative Agent
or any Lender (or any of their respective representatives or independent
contractors) may do any of the foregoing at the expense of the Borrower at any
time during normal business hours and without advance notice.

         6.11 COMPLIANCE WITH ERISA. Do, and cause each of its ERISA Affiliates
to do, each of the following: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
Federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; and (c) make all required
contributions to any Plan subject to Section 412 of the Code.

         6.12 USE OF PROCEEDS.

         (a) Use the proceeds of the Term Loan Facility to repay the Assumed
Debt; and

         (b) Use the proceeds of the Acquisition Subfacility as follows (i) to
finance Acquisitions by the Borrower and its Subsidiaries of Persons or assets
subject to compliance with this Agreement, including SECTIONS 7.02 and 7.09,
(ii) for Capital Expenditures, and (iii) on the Initial Funding Date, the
Borrower



                                       39
<PAGE>

may request a Borrowing in an amount not to exceed $100,000.00 to partially
repay the Assumed Debt; and

         (c) Use the proceeds of the Working Capital/Distribution Subfacility to
(i) fund working capital requirements of the Borrower and its Subsidiaries, (ii)
fund Quarterly Distributions to the extent permitted by SECTION 7.07(a)(ii) and
(iii) pay fees owed pursuant to this Agreement, provided, however, Borrowings
under the Working Capital/Distribution Subfacility shall be made to fund the
Quarterly Distributions only if, at the time of such Borrowing and after giving
effect thereto, there is at least $9,000,000.00 of the Working
Capital/Distribution Subfacility Commitment undrawn and available for working
capital purposes.

         6.13 CLEAN DOWN PERIOD. For a period of fifteen (15) consecutive days
during the twelve-month period beginning on the Initial Funding Date, and for a
period of fifteen (15) consecutive days during each twelve-month period
thereafter, there shall be no Loans outstanding under the Working
Capital/Distribution Subfacility.

         6.14 GUARANTIES. As an inducement to the Administrative Agent and
Lenders to enter into this Agreement, cause each Subsidiary to execute and
deliver to Administrative Agent a Guaranty substantially in the form and upon
the terms of EXHIBIT E, providing for the guaranty of payment and performance of
the Obligations. In addition, promptly after the formation or acquisition of any
new entity that is (or becomes) a Subsidiary, cause such new entity to execute
and deliver to Administrative Agent a Guaranty substantially in the form and
upon the terms of EXHIBIT E, providing for the guaranty of payment and
performance of the Obligations, together with certified copies of such
Subsidiary's Organization Documents and opinions of counsel with respect to such
Subsidiary and such Guaranty, in substantially the forms of EXHIBIT F-1 and F-2
hereto.

         6.15 MATERIAL AGREEMENTS. Maintain the Material Agreements in effect,
except where failure to remain in effect could not reasonably be expected to
have a Material Adverse Effect.

                                  ARTICLE VII.
                               NEGATIVE COVENANTS

         So long as any Lender shall have any Commitment hereunder, or any Loan
or other Obligations shall remain unpaid or unsatisfied, the Borrower shall not,
nor shall it permit any Subsidiary to, directly or indirectly:

         7.01 LIENS. Create, incur, assume or suffer to exist, any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired,
other than the following:

         (a) Liens pursuant to any Loan Document;

         (b) Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings, if adequate reserves with respect thereto
are maintained on the books of the applicable Person in accordance with GAAP;

         (c) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which



                                       40
<PAGE>

are being contested in good faith and by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person;

         (d) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;

         (e) deposits 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, in each case
incurred in the ordinary course of business;

         (f) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which do not in any case materially detract
from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person;

         (g) judgment Liens not giving rise to an Event of Default; and

         (h) Liens securing Indebtedness incurred or assumed for the purpose of
financing all or any part of the cost or purchase price of any asset and
renewals, extensions, amendments and modifications of such Indebtedness,
provided that such Indebtedness is permitted under SECTION 7.03(c); provided
further that (i) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness, (ii) the Indebtedness secured
thereby does not exceed the cost or fair market value, whichever is lower, of
the property being acquired on the date of acquisition, and (iii) such Liens
attach to such asset concurrently with or within 180 days of the related asset
acquisition.

         7.02 INVESTMENTS. Make any Investments, except:

         (a) Investments held by the Borrower or such Subsidiary in the form of
cash equivalents;

         (b) Investments by the Borrower and Subsidiaries in the Borrower or any
Person that, prior to such Investment, is a Guarantor;

         (c) Trade accounts receivable which are for goods furnished or services
rendered in the ordinary course of business; and

         (d) Permitted Acquisitions.

         7.03 INDEBTEDNESS, SYNTHETIC LEASES AND SWAP OBLIGATIONS. Create,
incur, assume or suffer to exist any Indebtedness, Synthetic Leases or
obligations under Swap Contracts, except:

         (a) Indebtedness under the Loan Documents;

         (b) Obligations (contingent or otherwise) of the Borrower existing or
arising under any Swap Contract, provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risk and not for purposes of speculation or
taking a "market view;" and (ii) such Swap Contract does not contain any
provision exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party;



                                       41
<PAGE>

         (c) Indebtedness in respect of purchase money obligations incurred or
assumed as described in SECTION 7.01(h); provided that the aggregate amount of
such Indebtedness at any one time outstanding shall not exceed $5,000,000;

         (d) Unsecured Indebtedness of the Borrower and Synthetic Leases of the
Borrower in an aggregate principal amount not to exceed $75,000,000 at any time
outstanding, provided, such Indebtedness and Synthetic Leases bear not more than
a market rate of interest and shall not require any Principal Payment earlier
than six (6) months after the Maturity Date; provided further, that at the time
any such Indebtedness or Synthetic Lease is incurred, (i) no Default or Event of
Default exists; and (ii) not later than the date that such Indebtedness or
Synthetic Lease is incurred, the Borrower delivers to the Administrative Agent a
Compliance Certificate in the form of EXHIBIT C-2 evidencing pro forma
compliance, as of the date of the incurrence of such Indebtedness or Synthetic
Lease and after giving effect thereto, with this SECTION 7.03 and SECTION 7.14;
and

         (e) Permitted Affiliate Subordinated Debt in an aggregate principal
amount not to exceed $50,000,000 outstanding at any time, provided that at the
time any such Indebtedness is incurred, (i) no Default or Event of Default
exists; and (ii) not later than the date that such Indebtedness is incurred, the
Borrower delivers to the Administrative Agent a Compliance Certificate in the
form of EXHIBIT C-2 evidencing pro forma compliance, as of the date of the
incurrence of such Indebtedness and after giving effect thereto, with this
SECTION 7.03 and SECTION 7.14.

         7.04 FUNDAMENTAL CHANGES. Merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except that, so long
as no Default or Event of Default exists or would result therefrom:

         (a) mergers and consolidations constituting Permitted Acquisitions are
permitted, provided that in any merger or consolidation involving the Borrower,
the Borrower is the surviving entity;

         (b) any Subsidiary may merge with (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person, or (ii) any one or more
Subsidiaries, provided that when any wholly-owned Subsidiary is merging with
another Subsidiary, the wholly-owned Subsidiary shall be the continuing or
surviving Person; and

         (c) any Subsidiary may sell all or substantially all of its assets
(upon voluntary liquidation or otherwise), to the Borrower or to another
Subsidiary; provided that if the seller in such a transaction is a wholly-owned
Subsidiary, then the purchaser must also be a wholly-owned Subsidiary.

         7.05 DISPOSITIONS. Make any Disposition or enter into any agreement to
make any Disposition, except:

         (a) Dispositions of inventory in the ordinary course of business;

         (b) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business; and

         (c) Dispositions of property by any Subsidiary to the Borrower or to a
wholly-owned Subsidiary; and



                                       42
<PAGE>

         (d) If no Default or Event of Default then exists or arises as a result
thereof, Dispositions for fair market value for cash, provided that if a
prepayment is required by SECTION 2.04(b)(II), the Borrower shall make such
prepayment concurrently with such Disposition.

         7.06 LEASE OBLIGATIONS. Create or suffer to exist any obligations for
the payment of rent for any property under lease or agreement to lease, except:
(a) operating leases (other than those constituting Synthetic Lease Obligations)
entered into or assumed by the Borrower or any Subsidiary in the ordinary course
of business, and (b) Synthetic Lease Obligations to the extent permitted by
SECTION 7.03(d).

         7.07 RESTRICTED PAYMENTS; PAYMENTS OF PERMITTED AFFILIATE SUBORDINATED
DEBT. (a) Declare or make, directly or indirectly, any Restricted Payment, or
incur any obligation (contingent or otherwise) to do so, except that:

                  (i) each Subsidiary may make Restricted Payments to the
         Borrower and to wholly-owned Subsidiaries;

                  (ii) the Borrower may make Quarterly Distributions; provided,
         that at the time of such distribution no Default or Event of Default
         exists or would result therefrom.

         (b) While any Default or Event of Default exists, the Borrower will not
make any payments of principal or interest on Permitted Affiliate Subordinated
Debt.

         7.08 ERISA. At any time engage in a transaction which could be subject
to Section 4069 or 4212(c) of ERISA, or permit any Plan to (a) engage in any
non-exempt "prohibited transaction" (as defined in Section 4975 of the Code);
(b) fail to comply with ERISA or any other applicable Laws; or (c) incur any
material "accumulated funding deficiency" (as defined in Section 302 of ERISA),
which, with respect to each event listed above, could be reasonably expected to
have a Material Adverse Effect.

         7.09 NATURE OF BUSINESS; CAPITAL EXPENDITURES. Engage in any line of
business other than Present and Related Businesses, or make any Capital
Expenditures except in connection with Present and Related Businesses.

         7.10 TRANSACTIONS WITH AFFILIATES. 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 Affiliate of the Borrower 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 the
applicable Subsidiary in the good faith judgment of the Borrower.

         7.11 BURDENSOME AGREEMENTS. Enter into any Contractual Obligation that
limits the ability (a) of any Subsidiary to make Restricted Payments to the
Borrower or to otherwise transfer property to the Borrower or (b) of the
Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on
property of such Person.

         7.12 USE OF PROCEEDS. Use the proceeds of any Loan for purposes other
than those permitted by SECTION 6.12, or use the proceeds of any Loan, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the Board)
or to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.



                                       43
<PAGE>

         7.13 OPERATING AGREEMENTS. Permit any amendment to any of Borrower's
Operating Agreements if such amendment could reasonably be expected to
materially adversely affect the Lenders.

         7.14 FINANCIAL COVENANTS.

         (a) INTEREST COVERAGE RATIO. Permit the Interest Coverage Ratio as of
the end of any fiscal quarter of the Borrower to be less than the ratio of 3.0
to 1.0.

         (b) LEVERAGE RATIO. Permit the Leverage Ratio as of the end of any
fiscal quarter of the Borrower to be greater than the ratio of 4.0 to 1.0.

         (c) PRO FORMA ADJUSTMENTS FOR ASSET ACQUISITIONS. For purposes of
determining compliance with this SECTION 7.14 (but not for the purpose of
calculating the Leverage Ratio used in the determination of the Applicable
Rate):

                  (i) Consolidated EBITDA shall be calculated after giving
         effect, on a pro forma basis for the four consecutive fiscal quarters
         most recently completed, to any asset acquisitions (an "ASSET
         ACQUISITION") occurring during the period commencing on the first day
         of such period to and including the date of determination (herein
         called the "REFERENCE PERIOD"), as if such Asset Acquisition occurred
         on the first day of the Reference Period (an Asset Acquisition includes
         an asset acquisition that gives rise to the need to calculate
         compliance hereunder as a result of a Company incurring or assuming
         Indebtedness in connection with such asset acquisition); and

                  (ii) If, in connection with an Asset Acquisition during any
         Reference Period, any Indebtedness (including Permitted Affiliate
         Subordinated Debt and Loans hereunder) or any Synthetic Lease is
         incurred or assumed by the Borrower or any Subsidiary, then
         Consolidated Interest Charges shall be calculated, on a pro forma basis
         for the four quarters most recently completed, as if such Indebtedness
         or Synthetic Lease had been incurred on the first day of the Reference
         Period.

                                 ARTICLE VIII.
                         EVENTS OF DEFAULT AND REMEDIES

         8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event
of Default:

         (a) Non-Payment. The Borrower fails to pay (i) when and as required to
be paid herein, any amount of principal of any Loan or (ii) within ten days
after the same becomes due, any interest on any Loan, any commitment or other
fee due hereunder, or any other amount payable hereunder or under any other Loan
Document; or

         (b) Specific Covenants. The Borrower fails to perform or observe any
term, covenant or agreement contained in any of SECTION 6.03(a), 6.12 or 6.13;

         (c) Other Defaults. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for ten Business Days after the earlier of the date notice
thereof shall have been given to the Borrower by the Administrative Agent or any
Lender or the date the Borrower has knowledge of such failure; or



                                       44
<PAGE>

         (d) Representations and Warranties. Any representation or warranty made
or deemed made by the Borrower or any other Loan Party herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith
proves to have been incorrect in any material respect when made or deemed made;
or

         (e) Cross-Default. (i) The Borrower or any other Referenced Person (A)
fails to make any payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness,
Guaranty Obligation or Synthetic Lease (other than Indebtedness hereunder)
having an aggregate principal amount (or, in the case of a Synthetic Lease,
Attributable Principal) (including undrawn or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than (individually or collectively) $15,000,000, or (B)
fails to observe or perform any other agreement or condition relating to any
such Indebtedness, Guaranty Obligation or Synthetic Lease or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness, the lessor under such
Synthetic Lease or the beneficiary or beneficiaries of such Guaranty Obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness or Synthetic Lease to be demanded or to become due or to be
repurchased or redeemed (automatically or otherwise) prior to its stated
maturity, or such Guaranty Obligation to become payable or cash collateral in
respect thereof to be demanded; or (ii) (A) there occurs under any Swap Contract
an Early Termination Date (as defined in such Swap Contract) resulting from any
event of default under such Swap Contract as to which the Borrower or any other
Referenced Person is the Defaulting Party (as defined in such Swap Contract) and
the Swap Termination Value owed by the Borrower or any other Referenced Person
as a result thereof is greater than (individually or collectively) $15,000,000,
or (B) there occurs under any Swap Contract an Early Termination Date (as
defined in such Swap Contract) resulting from any Termination Event (as so
defined) under such Swap Contract as to which the Borrower or any other
Referenced Person is an Affected Party (as so defined) and the Swap Termination
Value owed by the Borrower or any other Referenced Person as a result thereof is
greater than (individually or collectively) $15,000,000 and such amount is not
paid when due under such Swap Contract; or

         (f) Insolvency Proceedings, Etc. The Borrower or any other Referenced
Person institutes or consents to the institution of any proceeding under any
Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any part of its
property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

         (g) Inability to Pay Debts; Attachment. (i) The Borrower or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against property which is a
material part of the property of the Borrower and its Subsidiaries taken as a
whole, and is not released, vacated or fully bonded within 45 days after its
issue or levy; or

         (h) Judgments. There is entered against the Borrower or any other
Referenced Person (i) a final judgment or order for the payment of money in an
aggregate amount exceeding (individually or collectively) $15,000,000 (to the
extent not covered by (x) independent third-party insurance as to which



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<PAGE>

the insurer does not dispute coverage or (y) an Acceptable Indemnity), or (ii)
any non-monetary final judgment that has, or would reasonably be expected to
have, a Material Adverse Effect and, in either case, (A) enforcement proceedings
are commenced by any creditor upon such judgment or order, or (B) there is a
period of 30 consecutive days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, is not in effect; or

         (i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower or any Subsidiary under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
$15,000,000, or (ii) the Borrower or any ERISA Affiliate fails to pay when due,
after the expiration of any applicable grace period, any installment payment
with respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of $15,000,000; or

         (j) Invalidity of Loan Documents. Any Loan Document, at any time after
its execution and delivery and for any reason other than the agreement of all
the Lenders or satisfaction in full of all the Obligations, ceases to be in full
force and effect, or is declared by a court of competent jurisdiction to be null
and void, invalid or unenforceable in any material respect; or any Loan Party
denies that it has any or further liability or obligation under any Loan
Document, or purports to revoke, terminate or rescind any Loan Document; or

         (k) Change of Control. There occurs any Change of Control; or

         (l) Dissolution. Any Loan Party shall dissolve, liquidate, or otherwise
terminate its existence, except as permitted in SECTION 7.04.

         8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs,
the Administrative Agent:

         (a) shall, at the request of, or may, with the consent of the Required
Term Lenders, declare the commitment of each Term Loan Lender to make Loans
under the Term Loan Facility to be terminated, whereupon such commitments and
obligation shall be terminated; and shall, at the request of, or may, with the
consent of the Required Revolver Lenders, declare the commitment of each
Revolver Lender to make Loans under the Revolver Facility to be terminated,
whereupon such commitments and obligation shall be terminated;

         (b) shall, at the request of, or may, with the consent of, the Required
Lenders, declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which are hereby expressly
waived by the Borrower; and

         (c) shall, at the request of, or may, with the consent of, the Required
Lenders, exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law;

provided, however, that upon the occurrence of any event specified in subsection
(f) of SECTION 8.01, the obligation of each Lender to make Loans shall
automatically terminate, the unpaid principal amount of all



                                       46
<PAGE>

outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, in each case without further act of the
Administrative Agent or any Lender.

                                  ARTICLE IX.
                              ADMINISTRATIVE AGENT

         9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT. Each Lender
hereby irrevocably (subject to SECTION 9.09) appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Loan Document, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender or participant, 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 the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.

         9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects in the absence of
gross negligence or willful misconduct.

         9.03 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall
(a) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Loan Party or any officer
thereof, contained herein or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender or participant 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 any Loan Party or any Affiliate thereof.

         9.04 RELIANCE BY ADMINISTRATIVE AGENT.

         (a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper



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<PAGE>

Person or Persons, and upon advice and statements of legal counsel (including
counsel to any Loan Party), independent accountants and other experts selected
by the Administrative Agent. The Administrative Agent shall be fully justified
in failing or refusing to take any action under any Loan Document unless it
shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders or all the Lenders,
if required hereunder, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and participants. Where
this Agreement expressly permits or prohibits an action unless the Required
Lenders otherwise determine, the Administrative Agent shall, and in all other
instances, the Administrative Agent may, but shall not be required to, initiate
any solicitation for the consent or a vote of the Lenders.

         (b) For purposes of determining compliance with the conditions to the
initial Borrowing specified in SECTION 4.01, each Lender that has funded its Pro
Rata Share of the Borrowing(s) on the Initial Funding Date shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter either sent by the Administrative Agent to such Lender for
consent, approval, acceptance or satisfaction, or required hereunder to be
consented to or approved by or acceptable or satisfactory to a Lender.

         9.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
ARTICLE VIII; provided, however, that unless and until the Administrative Agent
has received any such direction, 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 or in the best
interest of the Lenders.

         9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person 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 investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent herein, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations,



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<PAGE>

property, financial and other condition or creditworthiness of any of the Loan
Parties or any of their respective Affiliates which may come into the possession
of any Agent-Related Person.

         9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand each Agent-Related Person (to the extent not reimbursed by or on
behalf of any Loan Party and without limiting the obligation of any Loan Party
to do so), pro rata, and hold harmless each Agent-Related Person from and
against any and all Indemnified Liabilities incurred by it; provided, however,
that no Lender shall be liable for the payment to any Agent-Related Person of
any portion of such Indemnified Liabilities resulting from such Person's gross
negligence or willful misconduct; provided, however, that no action taken in
accordance with the directions of the Required Lenders shall be deemed to
constitute gross negligence or willful misconduct for purposes of this Section.
Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
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, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower. The
undertaking in this Section shall survive termination of the Commitments, the
payment of all Obligations hereunder and the resignation or replacement of the
Administrative Agent.

         9.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Bank of America
and its Affiliates may make loans to, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with each of the Loan Parties and their
respective Affiliates as though Bank of America were not the Administrative
Agent hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive information regarding any Loan Party or its Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Loan Party or such Affiliate) and acknowledge that the Administrative Agent
shall be under no obligation to provide such information to them. With respect
to its Loans, Bank of America shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Administrative Agent, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.

         9.09 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower. If the Administrative Agent resigns under this Agreement, the Required
Lenders shall appoint from among the Lenders a successor administrative agent
for the Lenders which successor administrative agent shall be consented to by
the Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term "ADMINISTRATIVE AGENT" shall mean
such successor administrative



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<PAGE>

agent and the retiring Administrative Agent's appointment, powers and duties as
Administrative Agent shall be terminated. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
ARTICLE IX and SECTIONS 10.03 and 10.13 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement. If no successor administrative agent has accepted
appointment as Administrative Agent by the date which is 30 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 perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above.

         9.10 OTHER AGENTS; LEAD MANAGERS. None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a
"syndication agent," as a "documentation agent," any other type of agent (other
than the Administrative Agent), "joint lead arranger," "joint book manager" or
"lead manager" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

                                   ARTICLE X.
                                  MISCELLANEOUS

         10.01 AMENDMENTS, ETC.

         (a) No amendment or waiver of any provision of this Agreement or any
other Loan Document, and no consent to any departure by the Borrower or any
other Loan Party therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrower or the applicable Loan Party, as the case may
be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall, unless in writing and signed by each of the Lenders directly
affected thereby and by the Borrower, and acknowledged by the Administrative
Agent, do any of the following:

                  (i) extend or increase the Commitment of any Lender (or
         reinstate any Commitment terminated pursuant to SECTION 8.02);

                  (ii) postpone any date fixed by this Agreement or any other
         Loan Document for any payment or mandatory prepayment of principal,
         interest, fees or other amounts due to the Lenders (or any of them)
         hereunder or under any other Loan Document;

                  (iii) reduce the principal of, or the rate of interest
         specified herein on, any Loan or (subject to clause (B) of the proviso
         below) any fees or other amounts payable hereunder or under any other
         Loan Document, or change the manner of computation of any financial
         covenant used in determining the Applicable Rate that would result in a
         reduction of any interest rate on any Loan; provided, however, that
         only the consent of the Required Lenders shall be necessary to amend
         the definition of "Default Rate" or to waive any obligation of the
         Borrower to pay interest at the Default Rate; or



                                       50
<PAGE>

                  (iv) amend this Section, or SECTION 2.12, or any provision
         herein providing for unanimous consent or other action by all the
         Lenders;

and, provided further, that (A) no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent in addition to the Required
Lenders or all the Lenders, as the case may be, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document; and
(B) the Agent/Arranger Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, any Lender that has failed to
fund any portion of the Loans required to be funded by it hereunder shall not
have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Pro Rata Share of such Lender may not be increased
without the consent of such Lender.

         (b) Any amendment to any Loan Document which purports to (i) change the
allocation of payments between the Facilities, (ii) decrease the amount of any
mandatory prepayment or commitment reduction required by SECTION 2.04 or (iii)
change this SECTION 10.01(b), must be by an instrument in writing executed by
Borrower, the Administrative Agent and by (A) the Required Term Lenders and (B)
the Required Revolver Lenders.

         10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.

         (a) General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder and under the other Loan
Documents shall be in writing (including by facsimile transmission) and mailed,
faxed or delivered, to the address, facsimile number or (subject to subsection
(c) below) electronic mail address specified for notices on SCHEDULE 10.02 (for
the Borrower, each Guarantor and the Administrative Agent) or the signature
pages hereto (for the other Lenders); or, in the case of the Borrower, the
Guarantors or the Administrative Agent, to such other address as shall be
designated by such party in a notice to the other parties, and in the case of
any other party, to such other address as shall be designated by such party in a
notice to the Borrower and the Administrative Agent. All such notices and other
communications shall be deemed to be given or made upon the earlier to occur of
(i) actual receipt by the intended recipient and (ii) (A) if delivered by hand
or by courier, when signed for by the intended recipient; (B) if delivered by
mail, four Business Days after deposit in the mails, postage prepaid; (C) if
delivered by facsimile, when sent and receipt has been confirmed by telephone;
and (D) if delivered by electronic mail (which form of delivery is subject to
the provisions of subsection (c) below), when delivered; provided, however, that
notices and other communications to the Administrative Agent pursuant to ARTICLE
II shall not be effective until actually received by such Person. Any notice or
other communication permitted to be given, made or confirmed by telephone
hereunder shall be given, made or confirmed by means of a telephone call to the
intended recipient at the number specified on SCHEDULE 10.02 or such Person's
signature page, as applicable, it being understood and agreed that a voicemail
message shall in no event be effective as a notice, communication or
confirmation hereunder.

         (b) Effectiveness of Facsimile Documents and Signatures. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof; provided, however, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.



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<PAGE>

         (c) Limited Use of Electronic Mail. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, and may not be used for any other purpose.

         (d) Reliance by Administrative Agent and Lenders. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Borrowing Notices) purportedly given by or on behalf of
the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
each Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

         10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder 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 or therein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

         10.04 ATTORNEY COSTS; EXPENSES AND TAXES. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all reasonable costs and expenses
incurred in connection with the preparation, negotiation, syndication,
administration and execution of this Agreement and the other Loan Documents and
any amendment, waiver, consent or other modification of the provisions hereof
and thereof (whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or
reimburse the Administrative Agent and each Lender for all costs and expenses
incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any workout or
restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs. The foregoing costs and expenses shall include all other out-of-pocket
expenses incurred by the Administrative Agent and the cost of independent public
accountants and other outside experts retained by the Administrative Agent or
any Lender. The agreements in this Section shall survive the termination of the
Commitments and repayment of all the other Obligations.

         10.05 INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, the Borrower and each Guarantor (by execution of a
Guaranty) agrees to indemnify, save and hold harmless each Agent-Related Person,
each Arranger, each Lender and their respective Affiliates, directors, officers,
employees, counsel, agents and attorneys-in-fact (collectively the
"INDEMNITEES") from and against: (a) any and all claims, demands, actions or
causes of action that are asserted against any Indemnitee by any Person (other
than the Administrative Agent or any Lender) relating directly or indirectly to
a claim, demand, action or cause of action that such Person asserts or may
assert against any Loan Party, any Affiliate of any Loan Party or any of their
respective officers or directors, arising out of or relating to, the Loan
Documents, the Commitments, the use or contemplated use of the proceeds of any
Loans, or the relationship of any Loan Party, the Administrative Agent and the
Lenders under this Agreement or any other Loan Document; (b) any and all claims,
demands, actions or causes of action that may at any time (including at any time
following repayment of the Obligations and the resignation of the



                                       52
<PAGE>

Administrative Agent or the replacement of any Lender) be asserted or imposed
against any Indemnitee, arising out of or relating to, the Loan Documents, the
Commitments, the use or contemplated use of the proceeds of any Loans, or the
relationship of any Loan Party, the Administrative Agent and the Lenders under
this Agreement or any other Loan Document; (c) without limiting the foregoing,
any and all claims, demands, actions or causes of action that are asserted or
imposed against any Indemnitee, (i) under the application of any Environmental
Law applicable to the Borrower or any of its Subsidiaries or any of their
properties or assets, including the treatment or disposal of Hazardous
Substances on any of their properties or assets, (ii) as a result of the breach
or non-compliance by the Borrower or any Subsidiary with any Environmental Law
applicable to the Borrower or any Subsidiary, (iii) due to past ownership by the
Borrower or any Subsidiary of any of their properties or assets or past activity
on any of their properties or assets which, though lawful and fully permissible
at the time, could result in present liability, (iv) due to the presence, use,
storage, treatment or disposal of Hazardous Substances on or under, or the
escape, seepage, leakage, spillage, discharge, emission or release from, any of
the properties owned or operated by the Borrower or any Subsidiary (including
any liability asserted or arising under any Environmental Law), regardless of
whether caused by, or within the control of, the Borrower or such Subsidiary, or
(v) due to any other environmental, health or safety condition in connection
with the Loan Documents; (d) any administrative or investigative proceeding by
any Governmental Authority arising out of or related to a claim, demand, action
or cause of action described in subsection (a), (b) or (c) above; and (e) any
and all liabilities (including liabilities under indemnities), losses, costs or
expenses (including Attorney Costs) that any Indemnitee suffers or incurs as a
result of the assertion of any foregoing claim, demand, action, cause of action
or proceeding, or as a result of the preparation of any defense in connection
with any foregoing claim, demand, action, cause of action or proceeding, in all
cases, WHETHER OR NOT ARISING OUT OF THE NEGLIGENCE OF AN INDEMNITEE, and
whether or not an Indemnitee is a party to such claim, demand, action, cause of
action or proceeding (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"); provided that no Indemnitee shall be entitled to indemnification
for any claim caused by its own gross negligence or willful misconduct. The
agreements in this Section shall survive the termination of the Commitments and
repayment of all the other Obligations.

         10.06 PAYMENTS SET ASIDE. To the extent that the Borrower makes a
payment to the Administrative Agent or any Lender, or the Administrative Agent
or any Lender exercises its right of set-off, and such payment or the proceeds
of such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.

         10.07 SUCCESSORS AND ASSIGNS.

         (a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the



                                       53
<PAGE>

extent expressly contemplated hereby, the Indemnitees) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

         (b) Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment of the entire remaining amount of the
assigning Lender's Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender, the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding
thereunder) of the assigning Lender subject to each such assignment, determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent, shall not be less than $1,000,000 in the
case of any assignment of a Revolver Commitment and Revolver Principal Debt, or
$5,000,000 in the case of any assignment of any Term Loan Principal Debt, unless
each of the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrower otherwise consents (each such consent
not to be unreasonably withheld or delayed), (ii) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not prohibit the
assignment of a proportionate part of all the assigning Lender's rights and
obligations in respect of one Facility, and (iii) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500 (such fee
to be paid by the assignor or the assignee, as may be agreed between them). An
assignment need not be ratable as between the Term Loan Facility and the
Revolver Facility. Subject to acceptance and recording thereof by the
Administrative Agent pursuant to subsection (c) of this Section, from and after
the effective date specified in each Assignment and Acceptance, the Eligible
Assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of SECTIONS 3.07, 10.04 and 10.05). Upon request,
the Borrower (at its expense) shall execute and deliver new or replacement Notes
to the assigning Lender and the assignee Lender. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

         (c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the Borrower
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

         (d) Any Lender may, without the consent of, or notice to, the Borrower
or the Administrative Agent, sell participations to one or more banks or other
entities (a "PARTICIPANT") in all or a portion of such Lender's rights and/or
obligations under this Agreement (including all or a portion of its Commitment
and/or the Loans owing to it); provided that (i) such Lender's obligations under
this Agreement shall



                                       54
<PAGE>

remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
that would (i) postpone any date upon which any payment of money is scheduled to
be paid to such Participant, (ii) reduce the principal, interest, fees or other
amounts payable to such Participant, or (iii) release any Guarantor from the
Guaranty. Subject to subsection (e) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of SECTIONS 3.01, 3.04 and
3.05 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of SECTION 10.09
as though it were a Lender, provided such Participant agrees to be subject to
SECTION 2.12 as though it were a Lender.

         (e) A Participant shall not be entitled to receive any greater payment
under SECTION 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of SECTION 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with SECTION 10.15 as though
it were a Lender.

         (f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its
Notes, if any) to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

         (g) If the consent of the Borrower to an assignment or to an Eligible
Assignee is required hereunder (including a consent to an assignment which does
not meet the minimum assignment threshold specified in clause (i) of the proviso
to the first sentence of SECTION 10.07(b)), the Borrower shall be deemed to have
given its consent five Business Days after the date notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by the Borrower prior to such fifth Business Day.

         10.08 CONFIDENTIALITY. Each Lender agrees that it will not disclose
without the prior consent of the Borrower (other than to directors, officers,
employees, auditors, accountants, counsel or other professional advisors of the
Administrative Agent or any Lender) any information with respect to the Borrower
or its Subsidiaries, 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
Administrative Agent or the Lenders in writing as confidential, provided that
any Lender 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 Lender
or submitted to or required by the Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States of America 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



                                       55
<PAGE>

law, order, regulation or ruling applicable to such Lender, (e) to any Eligible
Assignee of or Participant in, or any prospective Eligible Assignee of or
Participant in, any of its rights or obligations under this Agreement, provided
that such Eligible Assignee or Participant or prospective Eligible Assignee or
Participant executes an agreement containing provisions substantially similar to
those contained in this SECTION 10.08, (f) in connection with the exercise of
any remedy by such Lender following an Event of Default pertaining to the Loan
Documents, (g) in connection with any litigation involving such Lender
pertaining to the Loan Documents, (h) to any Lender or the Administrative Agent,
or (i) to any Affiliate of any Lender (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such
information and instructed to keep such information confidential).

         10.09 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) 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 by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to the Administrative Agent and the Lenders, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.

         10.10 INTEREST RATE LIMITATION. Regardless of any provision contained
in any Loan Document, neither the Administrative Agent nor any Lender shall ever
be entitled to contract for, charge, take, reserve, receive, or apply, as
interest on all or any part of the Obligations, any amount in excess of the
Maximum Rate, and, if any 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 Borrower. In determining if the
interest paid or payable exceeds the Maximum Rate, the Borrower and the Lenders
shall, to the maximum extent permitted under applicable Law, (a) treat all
Borrowings as but a single extension of credit (and the Lenders and the Borrower
agree that such is the case and that provision herein for multiple Borrowings is
for convenience only), (b) characterize any nonprincipal payment 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 Obligations.
However, if the Obligations are 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, the Lenders shall refund
such excess, and, in such event, the 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. If, contrary to the parties' intent expressed in SECTION 10.16(a), the
Laws of the State of Texas are applicable for purposes of determining the
"Maximum Rate" or the "Maximum Amount," then those terms mean the "weekly
ceiling" from time to time in effect under Texas Finance Code Section 303.305,
as amended. The Borrower agrees that Chapter 346 of the Texas Finance Code, as
amended (which regulates certain revolving credit loan accounts and revolving
tri-party accounts), does not apply to the Obligations.



                                       56
<PAGE>

         10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         10.12 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.

         10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or Event of Default at the time of any Borrowing, and shall continue
in full force and effect as long as any Loan or any other Obligation shall
remain unpaid or unsatisfied.

         10.14 SEVERABILITY. Any provision of this Agreement and the other Loan
Documents to which the Borrower is a party 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 thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

         10.15 FOREIGN LENDERS. Each Lender that is a "foreign corporation,
partnership or trust" within the meaning of the Code (a "FOREIGN LENDER") shall
deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or after accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Person and entitling it to an exemption
from, or reduction of, withholding tax on all payments to be made to such Person
by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Person by the Borrower
pursuant to this Agreement) or such other evidence satisfactory to the Borrower
and the Administrative Agent that such Person is entitled to an exemption from,
or reduction of, U.S. withholding tax. Thereafter and from time to time, each
such Person shall (a) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the
Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Person by the Borrower pursuant to this Agreement, (b) promptly
notify the Agent of any change in circumstances which would modify or render
invalid any claimed exemption or reduction, and (c) take such steps as shall not
be materially disadvantageous to it, in the reasonable judgment of such Lender,
and as may be reasonably necessary (including the re-designation of its Lending
Office) to avoid any requirement of applicable Laws that the Borrower make any
deduction or withholding for taxes from amounts payable to such Person. If such
Person fails to deliver the above forms or other documentation, then the
Administrative Agent may withhold from any interest payment to such Person an
amount equivalent to the applicable withholding tax imposed by Sections 1441 and
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                                       57
<PAGE>

the Code, without reduction. If any Governmental Authority asserts that the
Administrative Agent did not properly withhold any tax or other amount from
payments made in respect of such Person, such Person shall indemnify the
Administrative Agent therefor, including all penalties and interest, any taxes
imposed by any jurisdiction on the amounts payable to the Agent under this
Section, and costs and expenses (including Attorney Costs) of the Administrative
Agent. The obligation of the Lenders under this Section shall survive the
payment of all Obligations and the resignation or replacement of the
Administrative Agent.

         10.16 GOVERNING LAW.

         (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

         (b) EACH COMPANY AND OTHER PARTY HERETO, AND EACH GUARANTOR, BY
EXECUTION OF A GUARANTY, AGREES AS TO THIS SECTION 10.16(b). ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF
MANHATTAN OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE
Agent AND EACH LENDER CONSENTS, AND BY EXECUTION OF A GUARANTY, EACH GUARANTOR
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE BORROWER, EACH GUARANTOR, THE ADMINISTRATIVE
Agent AND EACH LENDER (1) IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO, AND (2) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE
PREPAID, AT ITS ADDRESS FOR NOTICES DESIGNATED HEREIN. THE BORROWER, EACH
GUARANTOR, THE ADMINISTRATIVE Agent AND EACH LENDER WAIVES PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE. THE BORROWER AND EACH GUARANTOR, BY ITS
EXECUTION OF A GUARANTY, AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE
OF PROCESS IN NEW YORK IN CONNECTION WITH ACTIONS AND PROCEEDINGS UNDER THE LOAN
DOCUMENTS AND TO DELIVER TO THE ADMINISTRATIVE AGENT EVIDENCE THEREOF.

         10.17 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
AND EACH GUARANTOR, BY EXECUTION OF A GUARANTY, HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES TO THE LOAN DOCUMENTS OR ANY OF THEM WITH RESPECT TO
ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE;



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<PAGE>

AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE COMPANIES TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

         10.18 NO GENERAL PARTNER'S LIABILITY. The Lenders agree for themselves
and their respective successors and assigns, including any subsequent holder of
any Note, that any claim against the Borrower which may arise under any Loan
Document shall be made only against and shall be limited to the assets of the
Borrower and the Guarantors, and that no judgment, order or execution entered in
any suit, action or proceeding, whether legal or equitable, on this Agreement,
such Note or any of the other Loan Documents shall be obtained or enforced
against the General Partner or its assets for the purpose of obtaining
satisfaction and payment of such Note, the Indebtedness evidenced thereby or any
claims arising thereunder or under this Agreement or any other Loan Document,
any right to proceed against the General Partner individually or its respective
assets being hereby expressly waived, renounced and remitted by the Lenders for
themselves and their respective successors and assigns. Nothing in this SECTION
10.18, however, shall be construed so as to prevent the Administrative Agent,
any Lender or any other holder of any Note from commencing any action, suit or
proceeding with respect to or causing legal papers to be served upon the General
Partner for the purpose of obtaining jurisdiction over Borrower.

         10.19 ENTIRE AGREEMENT. This Agreement and the other Loan Documents
represent the final agreement between 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 between the parties.

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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.


                                WILLIAMS OLP, L.P.

                                By:  WILLIAMS GP LLC, its
                                     General Partner


                                     By:     /s/ Don R. Wellendorf
                                        ---------------------------------------
                                     Name:   Don R. Wellendorf
                                     Title:  Chief Financial Officer and
                                             Treasurer




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                               BANK OF AMERICA, N.A., as Administrative Agent


                               By:      /s/ Claire Liu
                                    -------------------------------------------
                               Name:    Claire M. Liu
                               Title:   Managing Director



                               BANK OF AMERICA, N.A., as a Lender


                               By:      /s/ Claire Liu
                                    -------------------------------------------
                               Name:    Claire M. Liu
                               Title:   Managing Director




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


                              By:       /s/ Michele Swanson
                                  ---------------------------------------------
                              Name:     Michele Swanson
                              Title:    Authorized Signatory




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                              LEHMAN COMMERCIAL PAPER INC.

                              Address for Notices

                              Lehman Commercial Paper Inc.
                              3 World Financial Center, 11th Floor
                              New York, New York 10285

                              Telephone:  (212) 526-0330
                              Facsimile:  (212) 526-0242
                              Attn:  Michele Swanson




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                              SUNTRUST BANK, as Documentation Agent and as a
                              Lender


                                   By:          /s/ David J. Edge
                                        ---------------------------------------
                                   Name:        David J. Edge
                                   Title:       Director




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                              SUNTRUST BANK

                              Address for Notices:

                              SunTrust Bank
                              Mail Code 1929
                              303 Peachtree Street, 3rd Floor
                              Atlanta, Georgia  30308

                              Telephone: (404) 827-6735
                              Facsimile: (404) 827-6270
                              Attn:  David Edge




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<PAGE>



                              ABN AMRO BANK, N.V.


                                   By:         /s/ Michael Nepveux
                                        ---------------------------------------
                                   Name:       Michael Nepveux
                                   Title:      Group Vice President



                                   By:         /s/ Frank R. Russo, Jr
                                        ---------------------------------------
                                   Name:       Frank R. Russo, Jr.
                                   Title:      Vice President




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                              ABN AMRO BANK, N.V.

                              Address for Notices:

                              ABN AMRO Bank N.V.
                              3 Riverway, Suite 1700
                              Houston, Texas  77056

                              Telephone: (713) 964-3342
                              Facsimile: (713) 621-5801
                              Attn:  Frank Russo




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                              NATIONAL WESTMINSTER BANK PLC,
                              NEW YORK BRANCH


                                   By:        /s/ Scott Barton
                                        ---------------------------------------
                                   Name:      Scott Barton
                                   Title:     Sr. Vice President




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                              NATIONAL WESTMINSTER BANK PLC,
                              NEW YORK BRANCH

                              Address for Notices:

                              National Westminster Bank Plc
                              600 Travis Street, Suite 6070
                              Houston, Texas  77002

                              Telephone: (713) 221-2417
                              Facsimile: (713) 221-2430
                              Attn:  Jill Gander




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                              BANK ONE, NA (Chicago Office), as Lender


                                   By:         /s/ Jeanie Harman
                                        ---------------------------------------
                                   Name:       Jeanie Harman
                                   Title:      First Vice President




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                                  BANK ONE, NA

                                  Address for Notices:

                                  Bank One, NA
                                  910 Travis Street, 6th Floor
                                  Houston, Texas  77002

                                  Telephone: (713) 751-6174
                                  Facsimile: (713) 751-3982
                                  Attn:  Jeanie Harman




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                              BARCLAYS BANK PLC


                                   By:       /s/ Nicholas A. Bell
                                        ---------------------------------------
                                   Name:     Nicholas A. Bell
                                   Title:    Director, Loan Transaction
                                             Management




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                              BARCLAYS BANK PLC

                              Address for Notices:

                              Barclays Bank Plc
                              222 Broadway, 8th Floor
                              New York, New York 10038

                              Telephone: (212) 412-4029
                              Facsimile: (212) 412-7585
                              Attn:  Nicholas Bell




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                              BAYERISCHE LANDESBANK GIROZENTRALE,
                              CAYMAN ISLANDS BRANCH


                                   By:       /s/ Alexander Kohnert
                                        ---------------------------------------
                                   Name:     Alexander Kohnert
                                   Title:    First Vice President


                                   By:       /s/ James Fox
                                        ---------------------------------------
                                   Name:     James Fox
                                   Title:    Vice President




                        [THIS IS A SIGNATURE PAGE TO THE
                      WILLIAMS OLP, L.P. CREDIT AGREEMENT]


<PAGE>


                              BAYERISCHE LANDESBANK GIROZENTRALE,
                              CAYMAN ISLANDS BRANCH

                              Address for Notices:

                              Bayerische Landesbank Girozentrale
                              560 Lexington Avenue
                              New York, New York  10022

                              Telephone: (212) 230-9105
                              Facsimile: (212) 310-9868
                              Attn:  Stephen Christenson




                        [THIS IS A SIGNATURE PAGE TO THE
                      WILLIAMS OLP, L.P. CREDIT AGREEMENT]
<PAGE>


                              NATEXIS BANQUES POPULAIRES


                                   By:      /s/ Louis P. Laville, III
                                        ---------------------------------------
                                   Name:    Louis P. Laville, III
                                   Title:   Vice President/Group Manager



                                   By:      /s/ Daniel Payer
                                        ---------------------------------------
                                   Name:    Daniel Payer
                                   Title:   Vice President





                        [THIS IS A SIGNATURE PAGE TO THE
                      WILLIAMS OLP, L.P. CREDIT AGREEMENT]

<PAGE>


                              NATEXIS BANQUES POPULAIRES

                              Address for Notices:

                              Natexis Banques Populaires
                              333 Clay Street, Suite 4340
                              Houston, Texas  77002

                              Telephone:  (713) 759-9401
                              Facsimile:   (713) 759-9908
                              Attn:  Daniel Payer





                        [THIS IS A SIGNATURE PAGE TO THE
                      WILLIAMS OLP, L.P. CREDIT AGREEMENT]

<PAGE>



                                                                   SCHEDULE 2.01


                                   COMMITMENTS


<Table>
<Caption>
            LENDER                                      REVOLVING FACILITY                                  TERM LOAN FACILITY
            ------                                      ------------------                                  ------------------
                                                                         Working Capital/
                                    Acquisition Subfacility          Distribution Subfacility
                                    -----------------------          ------------------------

<S>                                 <C>                              <C>                                    <C>
Bank of America                          $5,333,333.33                     $2,666,666.67                      $12,000,000.00

Lehman Commercial Paper, Inc.            $5,333,333.33                     $2,666,666.67                      $12,000,000.00

SunTrust Bank                            $5,333,333.33                     $2,666,666.67                      $12,000,000.00

ABN AMRO Bank, N.V.                      $4,666,666.67                     $2,333,333.33                      $10,500,000.00

National Westminster Bank Plc            $4,666,666.67                     $2,333,333.33                      $10,500,000.00

Bank One, NA                             $4,000,000.00                     $2,000,000.00                       $9,000,000.00

Barclays Bank Plc                        $4,000,000.00                     $2,000,000.00                       $9,000,000.00

Bayerische Landesbank                    $4,000,000.00                     $2,000,000.00                       $9,000,000.00
Girozentrale

Natexis Banques Populaires               $2,666,666.67                     $1,333,333.33                       $6,000,000.00



            Total:                        $40,000,000                       $20,000,000                         $90,000,000
</Table>



                                       1
<PAGE>


                                                                   SCHEDULE 5.13



                                  SUBSIDIARIES
                          AND OTHER EQUITY INVESTMENTS



Part (a). Subsidiaries as of the Closing Date.

None

Part (b). Subsidiaries as of the Initial Funding Date:

<Table>
<Caption>
                  Name                      Jurisdiction of Incorporation                   Ownership
                  ----                      -----------------------------                   ---------

<S>                                         <C>                                         <C>
    Williams Natural Gas Liquids LLC                   Delaware                          Borrower (100%)
             ("WNG LLC")

    Williams Terminals Holding L.P.                    Delaware                  Limited Partner: Borrower (99%)
                                                                                 General Partner: WNG LLC (1%)

    Williams Pipelines Holdings L.P.                   Delaware                  Limited Partner: Borrower (99%)
                                                                                 General Partner: WNG LLC (1%)

    Williams Ammonia Pipeline L.P.                     Delaware                  Limited Partner: Borrower (99%)
                                                                                 General Partner: WNG LLC (1%)
</Table>



                                       1

<PAGE>


                                                                  SCHEDULE 10.02



                       ADDRESSES FOR NOTICES TO BORROWER,
                       GUARANTORS AND ADMINISTRATIVE AGENT



ADDRESS FOR NOTICES TO BORROWER

WILLIAMS OLP, L.P.
c/o Williams GP, LLC
One Williams Center
Tulsa, Oklahoma  74172
Attn:  Mr. Don R. Wellendorf
Telephone: (918) 573-4119
Facsimile: (918) 573-3864
Electronic Mail: don.wellendorf@williams.com


ADDRESS FOR NOTICES TO GUARANTORS

c/o Williams GP, LLC
One Williams Center
Tulsa, Oklahoma  74172
Attn:  Mr. Don R. Wellendorf
Telephone: (918) 573-4119
Facsimile: (918) 573-3864
Electronic Mail: don.wellendorf@williams.com


ADDRESSES FOR BANK OF AMERICA

Administrative Agent's Office and Bank of America's  Lending Office
(for payments and Borrowing Notices):
Bank of America, N.A.
901 Main Street, 14th Floor
Dallas, TX  75202
Attention: Ben Cosgrove
Telephone: 214-209-9254
Facsimile: 214-290-9439
Electronic Mail: ben.cosgrove@bankofamerica.com
Account No.: 1292000883
Ref:  Williams OLP, L.P.
ABA# 111000012



                                       1
<PAGE>


Other Notices as Administrative Agent:
Bank of America, N.A.
901 Main Street, 14th Floor
Dallas, TX  75202
Attention: Ben Cosgrove
Telephone: 214-209-9254
Facsimile: 214-290-9439
Electronic Mail: ben.cosgrove@bankofamerica.com

Other Notices as a Lender:
Bank of America, N.A.
333 Clay Street, Suite #4550
Houston, TX  77002
Attention: Claire Liu, Managing Director
Telephone: 713-651-4855
Facsimile: 713-651-4841
Electronic Mail: claire.liu@bankofamerica.com



                                       2
<PAGE>



                                                                     EXHIBIT A-1



                            FORM OF BORROWING NOTICE

                                                       Date:
                                                             ------------,-----

To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

         Reference is made to that certain Credit Agreement, dated as of
February 6, 2001 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "AGREEMENT;" the terms defined
therein being used herein as therein defined), among Williams OLP, L.P., a
Delaware limited partnership (the "BORROWER"), the Lenders from time to time
party thereto, Bank of America, N.A., as Administrative Agent, Lehman Commercial
Paper, Inc., as Syndication Agent, and SunTrust Bank, as Documentation Agent.

         The undersigned hereby requests (select one):

I.       REVOLVER FACILITY

         A.       Acquisition Subfacility

                  1.       Status Information for the Acquisition Subfacility

                           (a)      Amount of the Acquisition Subfacility:
                                    $40,000,000

                           (b)      Acquisition Subfacility Principal Debt prior
                                    to the Borrowing requested herein:
                                    $
                                     ------------------

                           (c)      Principal amount of Loans under the
                                    Acquisition Subfacility available to be
                                    borrowed: $
                                               ------------------

                  2.       Amount of Borrowing: $
                                                 -----------

                  3.       Requested date of Borrowing:                  , 200
                                                        -----------------     --

                  4.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for $
                                                        ------------------

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)      one month for     $
                                                                ---------------
                                    (ii)     two months for    $
                                                                ---------------
                                    (iii)    three months for  $
                                                                ---------------



                                  Exhibit A-1
                                     Page 1
                            Form of Borrowing Notice
<PAGE>

                                    (iv)     six months for    $
                                                                ---------------

         B.       Working Capital/Distribution Subfacility

                  1.       Status Information for the Working Capital/
                           Distribution Subfacility

                           (a)      Amount of the Acquisition Facility:
                                    $20,000,000

                           (b)      Working Capital/Distribution Subfacility
                                    Principal Debt prior to the Borrowing
                                    requested herein: $
                                                       -----------------

                           (c)      Principal amount of Loans under the Working
                                    Capital/Distribution Subfacility available
                                    to be borrowed (prior to the following
                                    requested herein) (1(a) minus 1(b)):
                                    $
                                     ------------------

                  2.       Amount of Borrowing: $
                                                 -------------

                  3.       Requested date of Borrowing:                , 200  .
                                                        ---------------     --

                  4.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for $                   .
                                                        -------------------

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)      one month for     $
                                                                ---------------
                                    (ii)     two months for    $
                                                                ---------------
                                    (iii)    three months for  $
                                                                ---------------
                                    (iv)     six months for    $
                                                                ---------------
                  5.       Purpose of Loan:

                               Working Capital
                           ---
                               To fund Quarterly Distribution (SECTION 6.11(c)
                           --- (ii) of the Agreement)

                  6.       If the Loan is for the purpose of funding Quarterly
                           Distribution: Amount remaining undrawn under the
                           Working Capital/Distribution Subfacility after giving
                           effect to the Borrowing herein requested is:
                           $
                            ------------
                           (must be not less than $9,000,000)

II.      Term Loan Facility

                  1.       Amount of Borrowing:  $
                                                  ------------
                  2.       Requested date of Borrowing:                , 200  .
                                                        ---------------     --
                  3.       Requested Type of Loan and applicable Dollar amount:



                                  Exhibit A-1
                                     Page 2
                            Form of Borrowing Notice
<PAGE>

                           (a)      Base Rate Loan for $                      .
                                                        ----------------------

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)      one month for     $
                                                                ---------------
                                    (ii)     two months for    $
                                                                ---------------
                                    (iii)    three months for  $
                                                                ---------------
                                    (iv)     six months for    $
                                                                ---------------

         The undersigned hereby certifies that the following statements will be
true on the date of the proposed Borrowing(s) after giving effect thereto and to
the application of the proceeds therefrom:

                  (a) the representations and warranties of the Borrower
contained in ARTICLE V of the Agreement are true and correct as though made on
and as of such date (except such representations and warranties which expressly
refer to an earlier date, which are true and correct as of such earlier date);
and

                  (b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed Borrowing(s).

         The Borrowing requested herein complies with SECTIONS 2.01, 2.02 and
2.03 of the Agreement, as applicable.

                              WILLIAMS OLP, L.P.

                              By   Williams GP LLC, its
                                   General Partner

                              By:
                                   --------------------------------------------
                              Name:
                                     ------------------------------------------
                              Title:
                                      -----------------------------------------



                                  Exhibit A-1
                                     Page 3
                            Form of Borrowing Notice

<PAGE>



                                                                     EXHIBIT A-2



                     FORM OF CONVERSION/CONTINUATION NOTICE

                                                      Date:               ,
                                                             -------------  ----

TO:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

         Reference is made to that certain Credit Agreement, dated as of
February 6, 2001 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "AGREEMENT"; the terms defined
therein being used herein as herein defined), among Williams OLP, L.P., a
Delaware limited partnership (the "BORROWER"), the Lenders from time to time
party thereto, Bank of America, N.A., as Administrative Agent, Lehman Commercial
Paper, Inc., as Syndication Agent, and SunTrust Bank, as Documentation Agent.

         The undersigned hereby requests (select one):

I.       REVOLVER FACILITY

         A.       Acquisition Subfacility

                  1.       Amount of [conversion] [continuation]:  $
                                                                    -----------

<Table>
<Caption>
                  2.       Existing rate:                              Check applicable blank
                                                                       ----------------------

<S>                        <C>      <C>                                <C>
                           (a)      Base Rate
                                                                        ----------------------
                           (b)      Eurodollar Rate Loan with
                                    Interest Period of:

                                    (i)     one month
                                                                        ----------------------
                                    (ii)    two months
                                                                        ----------------------
                                    (iii)   three months
                                                                        ----------------------
                                    (iv)    six months
                                                                        ----------------------
</Table>

                  3.       If a Eurodollar Rate Loan, date of the last day of
                           the Interest Period for such Loan:
                                         , 200  .
                           --------------     --

                  The Loan described above is to be [converted] [continued] as
                  follows:

                  4.       Requested date of [conversion] [continuation]:
                                            , 200  .
                           -----------------     --

                  5.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for $                      .
                                                        ----------------------



                                  Exhibit A-2
                                     Page 1
                     Form of Conversion Continuation Notice

<PAGE>

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)     one month for      $
                                                                ---------------
                                    (ii)    two months for     $
                                                                ---------------
                                    (iii)   three months for   $
                                                                ---------------
                                    (iv)    six months for     $
                                                                ---------------

         B.       Working Capital/Distribution Subfacility

                  1.       Amount of [conversion] [continuation]:  $
                                                                    -----------

<Table>
<Caption>
                  2.       Existing rate:                              Check applicable blank
                                                                       ----------------------

<S>                        <C>                                         <C>
                           (a)      Base Rate
                                                                        ----------------------
                           (b)      Eurodollar Rate Loan with
                                    Interest Period of:

                                    (i)     one month
                                                                        ----------------------
                                    (ii)    two months
                                                                        ----------------------
                                    (iii)   three months
                                                                        ----------------------
                                    (iv)    six months
                                                                        ----------------------
</Table>

                  3.       If a Eurodollar Rate Loan, date of the last day of
                           the Interest Period for such Loan:
                                         , 200  .
                           --------------     --

                  The Loan described above is to be [converted] [continued] as
                  follows:

                  4.       Requested date of [conversion] [continuation]:
                                            , 200  .
                           -----------------     --

                  5.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for $                      .
                                                        ----------------------
                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)     one month for       $
                                                                ---------------
                                    (ii)    two months for      $
                                                                ---------------
                                    (iii)   three months for    $
                                                                ---------------
                                    (iv)    six months for      $
                                                                ---------------

II.      TERM LOAN FACILITY

                  1.       Amount of [conversion] [continuation]:  $
                                                                    -----------
<Table>
<Caption>
                  2.       Existing rate:                              Check applicable blank
                                                                       ----------------------

<S>                        <C>      <C>                                <C>
                           (a)      Base Rate
                                                                        ---------------------

                           (b)      Eurodollar Rate Loan with
                                    Interest Period of:

                                    (i)     one month
                                                                        ---------------------
                                    (ii)    two months
                                                                        ---------------------
                                    (iii)   three months
                                                                        ---------------------
                                    (iv)    six months
                                                                        ---------------------
</Table>



                                  Exhibit A-2
                                     Page 2
                     Form of Conversion Continuation Notice


<PAGE>

                  4.       If a Eurodollar Rate Loan, date of the last day of
                           the Interest Period for such Loan:
                                         , 200  .
                           --------------     --

                  The Loan described above is to be [converted] [continued] as
                  follows:

                  4.       Requested date of [conversion] [continuation]:
                                            , 200  .
                           -----------------     --

                  3.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for $                       .
                                                        -----------------------

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)     one month for      $
                                                                ---------------
                                    (ii)    two months for     $
                                                                ---------------
                                    (iii)   three months for   $
                                                                ---------------
                                    (iv)    six months for     $
                                                                ---------------

         The [conversion] [continuation] requested herein complies with SECTIONS
2.01, 2.02 and 2.03 of the Agreement, as applicable.

                              WILLIAMS OLP, L.P.

                              By   Williams GP LLC, its
                                   General Partner

                              By:
                                   --------------------------------------------
                              Name:
                                     ------------------------------------------
                              Title:
                                      -----------------------------------------



                                  Exhibit A-2
                                     Page 3
                     Form of Conversion Continuation Notice

<PAGE>



                                                                     EXHIBIT B-1



                              FORM OF REVOLVER NOTE

$                                                               February 6, 2001
 -----------------------------------

         FOR VALUE RECEIVED, the undersigned (the "BORROWER"), hereby promises
to pay to the order of _____________________________ (the "LENDER"), on the
Revolver Maturity Date (as defined in the Credit Agreement referred to below)
the principal amount of __________________Dollars ($____________), or such
lesser principal amount of Loans (as defined in such Credit Agreement) due and
payable by the Borrower to the Lender on the Revolver Maturity Date under that
certain Credit Agreement, dated as of even date herewith (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
"AGREEMENT;" the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, Bank of
America, N.A., as Administrative Agent, Lehman Commercial Paper, Inc., as
Syndication Agent, and SunTrust Bank, as Documentation Agent.

         The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates, and at such times as are specified in the
Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.

         This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and is subject to optional and mandatory prepayment in
whole or in part as provided therein. This Note is also entitled to the benefits
of each Guaranty. Upon the occurrence of one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable all as provided in
the Agreement. Loans made by the Lender shall be evidenced by one or more loan
accounts or records maintained by the Lender in the ordinary course of business.
The Lender may also attach schedules to this Note and endorse thereon the date,
amount and maturity of its Loans and payments with respect thereto.

         This Note is a Loan Document and is subject to SECTION 10.10 of the
Credit Agreement, which is incorporated herein by reference the same as if set
forth herein verbatim.

         The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, notice of
intent to accelerate, notice of acceleration, demand, dishonor and non-payment
of this Note.



                                  Exhibit B-1
                                     Page 1
                              Form of Revolver Note

<PAGE>


         THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

                              WILLIAMS OLP, L.P.

                              By:   Williams GP LLC, its
                                    General Partner

                              By:
                                   --------------------------------------------
                              Name:
                                     ------------------------------------------
                              Title:
                                      -----------------------------------------



                                  Exhibit B-1
                                     Page 2
                              Form of Revolver Note

<PAGE>


                     LOANS AND PAYMENTS WITH RESPECT THERETO


<Table>
<Caption>
                                                                              Amount of
                                                                             Principal or        Revolver
                       Type of Loan        Amount of           End of       Interest Paid     Principal Debt       Notation
       Date                Made            Loan Made      Interest Period      This Date          This Date         Made By
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------

<S>                  <C>               <C>               <C>               <C>               <C>               <C>







</Table>



                                  Exhibit B-1
                                     Page 3
                              Form of Revolver Note

<PAGE>



                                                                     EXHIBIT B-2


                                FORM OF TERM NOTE

$                                                               February 6, 2001
 -----------------------------------

         FOR VALUE RECEIVED, the undersigned (the "BORROWER"), hereby promises
to pay to the order of _____________________________ (the "LENDER"), on the Term
Loan Maturity Date (as defined in the Credit Agreement referred to below) the
principal amount of __________________Dollars ($____________), or such lesser
principal amount of Loans (as defined in such Credit Agreement) due and payable
by the Borrower to the Lender on the Term Loan Maturity Date under that certain
Credit Agreement, dated as of even date herewith (as amended, restated,
extended, supplemented or otherwise modified in writing from time to time, the
"AGREEMENT;" the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, Bank of
America, N.A., as Administrative Agent, Lehman Commercial Paper, Inc., as
Syndication Agent, and SunTrust Bank, as Documentation Agent.

         The Borrower promises to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates, and at such times as are specified in the
Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Office. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.

         This Note is one of the Notes referred to in the Agreement, is entitled
to the benefits thereof and is subject to optional and mandatory prepayment in
whole or in part as provided therein. This Note is also entitled to the benefits
of each Guaranty. Upon the occurrence of one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable all as provided in
the Agreement. Loans made by the Lender shall be evidenced by one or more loan
accounts or records maintained by the Lender in the ordinary course of business.
The Lender may also attach schedules to this Note and endorse thereon the date,
amount and maturity of its Loans and payments with respect thereto.

         This Note is a Loan Document and is subject to SECTION 10.10 of the
Credit Agreement, which is incorporated herein by reference the same as if set
forth herein verbatim.

         The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, notice of
intent to accelerate, notice of acceleration, demand, dishonor and non-payment
of this Note.



                                   Exhibit B-2
                                     Page 1
                                Form of Term Note

<PAGE>


         THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

                              WILLIAMS OLP, L.P.

                              By:   Williams GP LLC, its
                                    General Partner

                              By:
                                   --------------------------------------------
                              Name:
                                     ------------------------------------------
                              Title:
                                      -----------------------------------------



                                   Exhibit B-2
                                     Page 2
                                Form of Term Note


<PAGE>


                     LOANS AND PAYMENTS WITH RESPECT THERETO



<Table>
<Caption>
                                                                              Amount of
                                                                             Principal or        Revolver
                       Type of Loan        Amount of           End of       Interest Paid     Principal Debt       Notation
       Date                Made            Loan Made      Interest Period      This Date          This Date         Made By
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------

<S>                  <C>               <C>               <C>               <C>               <C>               <C>
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
-------------------- ----------------- ----------------- ----------------- ----------------- ----------------- -----------------
</Table>



                                   Exhibit B-2
                                     Page 3
                                Form of Term Note

<PAGE>


                                                                     EXHIBIT C-1


                         FORM OF COMPLIANCE CERTIFICATE
                   (Pursuant to SECTION 6.02 of the Agreement)

         Financial Statement Date:             ,
                                    -----------  ----

To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

         Reference is made to that certain Credit Agreement, dated as of
February 6, 2001 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "AGREEMENT;" the terms defined
therein being used herein as therein defined), among Williams OLP, L.P., a
Delaware limited partnership (the "BORROWER"), the Lenders from time to time
party thereto, Bank of America, N.A., as Administrative Agent, Lehman Commercial
Paper, Inc., as Syndication Agent, and SunTrust Bank, as Documentation Agent.
Capitalized terms used herein but not defined herein shall have the meaning set
forth in the Agreement.

         The undersigned Responsible Officer hereby certifies as of the date
 hereof that he/she is the __________________________________________________
of the Borrower, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Administrative Agent on the behalf of the Borrower, and
that:

[Use following for fiscal year-end financial statements]

         1. Attached hereto as SCHEDULE 1 are the year-end unaudited financial
statements required by SECTION 6.01(b) of the Agreement for the fiscal year of
the Borrower ended as of the above date. Such financial statements fairly
present the financial condition, results of operations and cash flows of the
Borrower and its Subsidiaries in accordance with GAAP as at such date and for
such period, subject only to normal year-end audit adjustments and the absence
of footnotes.

         2. Attached hereto as SCHEDULE 2 are the year-end audited financial
statements required by SECTION 6.01(d) of the Agreement for the fiscal year of
the MLP ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.

[Use following for fiscal quarter-end financial statements]

         1. Attached hereto as SCHEDULE 1 are the unaudited financial statements
required by SECTION 6.01(c) of the Agreement for the fiscal quarter of the
Borrower ended as of the above date. Such financial statements fairly present
the financial condition, results of operations and cash flows of the Borrower
and its Subsidiaries in accordance with GAAP as at such date and for such
period, subject only to normal year-end audit adjustments and the absence of
footnotes.

         2. Attached hereto as SCHEDULE 3 are the unaudited financial statements
required by SECTION 6.01(d) of the Agreement for the fiscal quarter of the MLP
ended as of the above date, together with a certificate of a Responsible Officer
of the MLP stating that such financial statements fairly present the financial
condition, results of operations and cash flows of the MLP and its Subsidiaries
in accordance with GAAP as at such date and for such period, subject only to
normal year-end audit adjustments and the absence of footnotes.



                                  Exhibit C-1
                                     Page 1
                         Form of Compliance Certificate
<PAGE>

[Use the following for both fiscal year-end and quarter-end financial
statements]

         3. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by the attached financial
statements.

         4. A review of the activities of the Borrower during such fiscal period
has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrower performed and
observed all its Obligations under the Loan Documents, and no Default or Event
of Default has occurred and is continuing except as follows (list of each such
Default or Event of Default and include the information required by SECTION 6.03
of the Credit Agreement):

         [                          ]

         5. The covenant analyses and information set forth on SCHEDULE 2
attached hereto are true and accurate on and as of the date of this Certificate.

         IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of ______________, ________.

                              WILLIAMS OLP, L.P.

                              By:   Williams GP LLC, its
                                    General Partner

                              By:
                                   --------------------------------------------
                              Name:
                                     ------------------------------------------
                              Title:
                                      -----------------------------------------



                                  Exhibit C-1
                                     Page 2
                         Form of Compliance Certificate

<PAGE>


                For the Quarter/Year ended ___________________("STATEMENT DATE")

                                   SCHEDULE 2
                          to the Compliance Certificate
                                  ($ in 000's)

<Table>
<S>      <C>      <C>                                                           <C>                <C>
I.       SECTION 2.01(a) - Acquisition Subfacility ($40,000,000)

         A.       Acquisition Subfacility Principal Debt on the first day of
                  the most recently ended fiscal quarter (the "SUBJECT
                  Quarter"):                                                                        $
                                                                                                     -------------
         B.       Borrowings under the Acquisition Subfacility during the
                  Subject Quarter (list each by the date and $ amount of the
                  Borrowing):                                                    Date               $Amount
                                                                                 ----                ------

         C.       Borrowings repaid under the Acquisition Subfacility during
                  the Subject Quarter (list each by the date and $ amount of
                  the repayment):                                                Date               $Amount
                                                                                 ----                ------

         D.       Acquisition Subfacility Principal Debt on the last day of
                  the Subject Quarter:                                                              $
                                                                                                     -------------

         E.       On any day during the Subject Quarter, did the Acquisition
                  Subfacility Principal Debt exceed $40,000,000?
                                                                                                    YES/NO
II.      SECTION 2.01(b) - Working Capital/Distribution Subfacility
         ($20,000,000)

         A.       Working Capital/Distribution Subfacility Principal Debt on
                  the first day of the Subject Quarter:                                             $
                                                                                                     -------------

         B.       Borrowings under the Working Capital/Distribution Subfacility
                  to fund working capital requirements of the Borrower and its
                  Subsidiaries (list each by the date and $ amount of the
                  Borrowing):                                                    Date               $Amount
                                                                                 ----                ------

         C.       Borrowings under the Working Capital/Distribution Subfacility
                  to fund Quarterly Distributions (list each by the date and
                  $ amount of the Borrowing):                                    Date               $Amount
                                                                                 ----                ------

         D.       Borrowings repaid under the Working Capital/Distribution
                  Subfacility (list each by the date and $ amount of the
                  repayment):                                                    Date               $Amount
                                                                                 ----                ------

</Table>


                                  Exhibit C-1
                                     Page 3
                         Form of Compliance Certificate


<PAGE>

<Table>
<S>      <C>      <C>                                                         <C>                   <C>
         E.       Working Capital/Distribution Subfacility Principal Debt on
                  the last day of the Subject Quarter:                                              $
                                                                                                     -------------

         F.       On any day during the Subject Quarter, did the Working
                  Capital/Distribution Subfacility Principal Debt exceed
                  $20,000,000?                                                                      YES/NO

         G.       On the date of each Borrowing under the Working
                  Capital/Distribution Subfacility (after giving effect to
                  such Borrowing), was the undrawn amount of Working
                  Capital/Distribution Subfacility Commitment $9,000,000 or
                  more?  (SECTION 2.01(b))                                                          YES/NO

III.     SECTION 6.13 - Clean Down Period for Working Capital/Distribution
         Subfacility

         A.       One clean down period of fifteen (15) consecutive days
                  during the twelve (12) month period beginning on the Initial
                  Funding Date, and for a period of fifteen (15) consecutive
                  days each twelve (12) month period thereafter is required.
                  For the current twelve (12) month period, describe the clean
                  down period (period of consecutive days (and dates) during
                  the current twelve (12) month period that the Working
                  Capital/Distribution Subfacility Principal Debt = $0.00):
                                                                                 # of Days          Dates
IV.      SECTION 7.03 - Indebtedness

         A.       Principal amount of purchase money indebtedness outstanding
                  (SECTION 7.03(c)):                                                                $
                                                                                                     -------------

                  Maximum permitted $5,000,000

         B.       Principal amount of unsecured Indebtedness and Synthetic
                  Leases permitted pursuant to SECTION 7.03(d):


                  1.       Amount of unsecured Indebtedness:                                        $
                                                                                                     -------------
                  2.       Amount of Synthetic Leases:                                              $
                                                                                                     -------------

                  3.       Aggregate amount of unsecured Indebtedness and
                           Synthetic Leases under SECTION 7.03(d) (IV.B.1 +
                           IV.B.2):                                                                 $
                                                                                                     -------------

                  Maximum permitted: $75,000,000.
</Table>



                                  Exhibit C-1
                                     Page 4
                         Form of Compliance Certificate

<PAGE>

<Table>
<S>      <C>      <C>      <C>                                                                     <C>
         C.       Principal amount of Permitted Affiliated Subordinated Debt
                  outstanding (SECTION 7.03(e)):                                                    $
                                                                                                     -------------

                  Maximum permitted:  $50,000,000

V.       SECTION 7.14(a) - Interest Coverage Ratio.

         A.       Consolidated EBITDA for four consecutive fiscal quarters
                  ending on above date ("SUBJECT PERIOD"):

                  1.       Consolidated Net Income for Subject Period:                              $
                                                                                                     -------------

                  2.       Consolidated Interest Charges for Subject Period:
                                                                                                    $
                                                                                                     -------------

                  3.       Provision for income taxes for Subject Period:
                                                                                                    $
                                                                                                     -------------

                  4.       Depreciation expenses for Subject Period:                                $
                                                                                                     -------------

                  5.       Amortization expenses for intangibles for Subject
                           Period:                                                                  $
                                                                                                     -------------

                  6.       Consolidated EBITDA (prior to pro forma adjustments
                           for Asset Acquisitions pursuant to SECTION
                           7.14(c)(i)) (Lines V.A.1 + 2 + 3 + 4 + 5):
                                                                                                    $
                                                                                                     -------------

                  7.       Pro forma adjustments to EBITDA for Asset
                           Acquisitions during the Subject Period (SECTION
                           7.14(c)(i)), giving effect to such Asset Acquisitions
                           on a pro forma basis for the Subject Period as if
                           such Asset Acquisitions occurred on the first day of
                           the Subject Period:
                                                                                                    $
                                                                                                     -------------

                  8.       Consolidated EBITDA, including pro forma
                           adjustments for Asset Acquisitions (Lines V.A.6 +
                           V.A.7):                                                                  $
                                                                                                     -------------

         B.       Consolidated Interest Charges for Subject Period:

                  1.       Consolidated Interest Charges for the four
                           consecutive fiscal quarters ending on the above
                           date:                                                                    $
                                                                                                     -------------

                  2.       Pro forma adjustment for Interest Charges during
                           the four consecutive fiscal quarters beginning on
                           the above date:                                                          $
                                                                                                     -------------
</Table>



                                  Exhibit C-1
                                     Page 5
                         Form of Compliance Certificate

<PAGE>

<Table>
<S>      <C>      <C>      <C>                                                                     <C>
                  3.       Consolidated Interest Charges, including pro forma
                           adjustments (Lines V.B.1 + V.B.2):                                       $
                                                                                                     -------------

         C.       Consolidated Lease and Rental Expense for Subject Period:

                  1.       Consolidated Lease and Rental Expense for the four
                           consecutive fiscal quarters ending on the above
                           date:                                                                    $
                                                                                                     -------------

                  2.       Pro forma adjustment for Consolidated Lease and
                           Rental Expense during the four consecutive fiscal
                           quarters beginning on the above date:
                                                                                                    $
                                                                                                     -------------

                  3.       Consolidated Lease and Rental Expense, including
                           pro forma adjustments (Lines V.C.1 + V.C.2):                             $
                                                                                                     -------------

         D.       Interest Coverage Ratio:

                  1.       Consolidated EBITDA adjusted for Asset Acquisitions
                           (Line V.A.8):                                                            $
                                                                                                     -------------

                  2.       Consolidated Interest Charges adjusted for Asset
                           Acquisitions (Line V.B.3):                                               $
                                                                                                     -------------

                  3.       Consolidated Lease and Rental Expense, including pro
                           forma adjustments (Line V.C.3):                                          $
                                                                                                     -------------

                  4.       Interest Coverage Ratio (Line V.D.1 + Line V.D.3))
                           (Line V.D.2 + Line V.D.3):                                                      to 1.0
                                                                                                     -----

                  Minimum required: 3.0:1.0

VI.      SECTION 7.14(b) - Leverage Ratio

         A.       Consolidated Total Debt:                                                          $
                                                                                                     -------------

         B.       Permitted Affiliate Subordinated Debt:                                            $
                                                                                                     -------------

         C.       Consolidated Total Debt excluding Permitted Affiliate
                  Subordinated Debt (Line VI.A minus Line VI.B):                                    $
                                                                                                     -------------
</Table>



                                  Exhibit C-1
                                     Page 6
                         Form of Compliance Certificate

<PAGE>

<Table>
<S>      <C>      <C>                                                                              <C>
         D.       Consolidated EBITDA (including pro forma adjustments for
                  Asset Acquisitions) (Line V.A.8 above):
                                                                                                    $
                                                                                                     -------------

         E.       Leverage Ratio (Line VI.C / Line VI.D):
                                                                                                          to 1.0
                                                                                                    -----
                  Maximum permitted: 4.0:1.0
</Table>



                                  Exhibit C-1
                                     Page 7
                         Form of Compliance Certificate
<PAGE>


                                                                     EXHIBIT C-2


                         FORM OF COMPLIANCE CERTIFICATE
         (Pursuant to SECTION 7.02(d) and SECTION 7.03 of the Agreement)


To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

         Reference is made to that certain Credit Agreement, dated as of
February 6, 2001 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "AGREEMENT;" the terms defined
therein being used herein as therein defined), among Williams OLP, L.P., a
Delaware limited partnership (the "BORROWER"), the Lenders from time to time
party thereto, Bank of America, N.A., as Administrative Agent, Lehman Commercial
Paper, Inc., as Syndication Agent, and SunTrust Bank, as Documentation Agent.
Capitalized terms used herein but not defined herein shall have the meaning set
forth in the Agreement.

         This Compliance Certificate is being delivered pursuant to [SECTION
7.02(d)] [SECTION 7.03(d)] [SECTION 7.03(e)] of the Credit Agreement in
connection with the incurrence of additional Indebtedness by the Borrower (the
"ADDITIONAL INDEBTEDNESS").

         The undersigned Responsible Officer hereby certifies as of the date
 hereof that he/she is the of the Borrower, and that, as such, he/she is
 authorized to execute and deliver this Certificate to the
Administrative Agent on the behalf of the Borrower, and that:

         1. No Default or Event of Default has occurred and is continuing or
exists or will exist after the incurrence of the Additional Indebtedness.

         2. Attached hereto are true and correct copies of the agreements and
instruments governing the Additional Indebtedness, as follows: (describe).

         IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________, ________.

                               WILLIAMS OLP, L.P.

                               By:  Williams GP LLC, its
                                    General Partner

                               By:
                                    -------------------------------------------
                               Name:
                                      -----------------------------------------
                               Title:
                                       ----------------------------------------

                       Date of Statement: ___________________ ("STATEMENT DATE")



                                  Exhibit C-2
                                     Page 1
                         Form of Compliance Certificate


<PAGE>


                                   SCHEDULE 2
                          to the Compliance Certificate
                                  ($ in 000's)

<Table>
<S>     <C>       <C>      <C>                                                                     <C>
I.       SECTION 7.03 - Indebtedness

         A.       Principal amount of purchase money indebtedness outstanding
                  (SECTION 7.03(c)):                                                                $
                                                                                                     ------------

                  Maximum permitted:  $5,000,000

         B.       Principal amount of Unsecured Indebtedness and Synthetic
                  Leases permitted pursuant to SECTION 7.03(d):

                  1.       Amount of unsecured Indebtedness:                                        $
                                                                                                     ------------

                  2.       Amount of Synthetic Leases:                                              $
                                                                                                     ------------

                  3.       Aggregate amount of unsecured Indebtedness and
                           Synthetic Leases under SECTION 7.03(d) (I.B.1 +
                           I.B.2):                                                                  $
                                                                                                     ------------

                  Maximum permitted: $75,000,000.

         C.       Principal amount of Permitted Affiliate Subordinated Debt
                  outstanding (SECTION 7.03(e)):                                                    $
                                                                                                     ------------

                  Maximum permitted:  $50,000,000
</Table>



                                  Exhibit C-2
                                     Page 2
                         Form of Compliance Certificate

<PAGE>



                                                                       EXHIBIT D


                        FORM OF ASSIGNMENT AND ACCEPTANCE

         Reference is made to that certain Credit Agreement, dated as of
February 6, 2001 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "AGREEMENT;" the terms defined
therein being used herein as therein defined), among Williams OLP, L.P., a
Delaware limited partnership (the "BORROWER"), the Lenders from time to time
party thereto, Bank of America, N.A., as Administrative Agent, Lehman Commercial
Paper, Inc., as Syndication Agent, and SunTrust Bank, as Documentation Agent.

         The assignor identified on the signature page hereto (the "ASSIGNOR")
and the assignee identified on the signature page hereto (the "ASSIGNEE") agree
as follows:

         1. (a) Subject to paragraph 11, effective as of the date specified on
SCHEDULE 1 hereto (the "EFFECTIVE DATE"), the Assignor hereby irrevocably sells
and assigns to the Assignee without recourse to the Assignor, and the Assignee
hereby irrevocably purchases and assumes from the Assignor without recourse to
the Assignor, the interest with respect to [that Facility] [those Facilities]
under the Credit Agreement described on SCHEDULE 1 hereto (the "ASSIGNED
INTEREST") in and to the Assignor's rights and obligations under the Agreement.

         (b) From and after the Effective Date, (i) the Assignee shall be a
party under the Agreement and will have all the rights and obligations of a
Lender for all purposes under the Loan Documents to the extent of the Assigned
Interest and be bound by the provisions thereof, and (ii) to the extent of the
Assigned Interest, the Assignor shall relinquish its rights and be released from
its obligations under the Agreement. The Assignor and/or the Assignee, as agreed
by the Assignor and the Assignee, shall deliver, in immediately available funds,
any applicable assignment fee required under SECTION 10.07(b) of the Agreement.

         2. On the Effective Date, the Assignee shall pay to the Assignor, in
immediately available funds, an amount equal to the purchase price of the
Assigned Interest as agreed upon by the Assignor and the Assignee.

         3. From and after the Effective Date, the Administrative Agent shall
make all payments under the Agreement and the Notes, if any, in respect of the
Assigned Interest (including all payments of principal, interest and fees with
respect thereto) to the Assignee. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Agreement and such Notes, if any,
for periods prior to the Effective Date directly between themselves.

         4. The Assignor represents and warrants to the Assignee that:

                  (a) The Assignor is the legal and beneficial owner of the
         Assigned Interest, and the Assigned Interest is free and clear of any
         adverse claim;

                  (b) the Assigned Interest listed on SCHEDULE 1 accurately and
         completely sets forth the Outstanding Amount of all Loans relating to
         the Assigned Interest as of the Effective Date;

                  (c) it has the power and authority and the legal right to
         make, deliver and perform, and has taken all necessary action, to
         authorize the execution, delivery and performance of this



                                   Exhibit D
                                     Page 1
                        Form of Assignment and Acceptance


<PAGE>

         Assignment and Acceptance, and any and all other documents delivered by
         it in connection herewith and to fulfill its obligations under, and to
         consummate the transactions contemplated by, this Assignment and
         Acceptance and the Loan Documents, and no consent or authorization of,
         filing with, or other act by or in respect of any Governmental
         Authority, is required in connection in connection herewith or
         therewith; and

                  (d) this Assignment and Acceptance constitutes the legal,
         valid and binding obligation of the Assignor.

         The Assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of
its Affiliates or the performance by the Borrower or any of its Affiliates of
their respective obligations under the Loan Documents, and assumes no
responsibility with respect to any statements, warranties or representations
made under or in connection with any Loan Document or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan Document
other than as expressly set forth above.

         5. The Assignee represents and warrants to the Assignor and the
Administrative Agent that:

                  (a) it is an Eligible Assignee;

                  (b) it has the full power and authority and the legal right to
         make, deliver and perform, and has taken all necessary action, to
         authorize the execution, delivery and performance of this Assignment
         and Acceptance, and any and all other documents delivered by it in
         connection herewith and to fulfill its obligations under, and to
         consummate the transactions contemplated by, this Assignment and
         Acceptance and the Loan Documents, and no consent or authorization of,
         filing with, or other act by or in respect of any Governmental
         Authority, is required in connection in connection herewith or
         therewith;

                  (c) this Assignment and Acceptance constitutes the legal,
         valid and binding obligation of the Assignee;

                  (d) under applicable Laws no tax will be required to be
         withheld by the Administrative Agent or the Borrower with respect to
         any payments to be made to the Assignee hereunder or under any Loan
         Document, and unless otherwise indicated in the space opposite the
         Assignee's signature below, no tax forms described in SECTION 10.15 of
         the Agreement are required to be delivered by the Assignee; and

                  (e) the Assignee has received a copy of the Agreement,
         together with copies of the most recent financial statements of the
         Borrower delivered pursuant thereto, 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. The
         Assignee has independently and without reliance upon the Assignor or
         the Administrative Agent and based on such information as the Assignee
         has deemed appropriate, made its own credit analysis and decision to
         enter into this Assignment and Acceptance. The Assignee will,
         independently and without reliance upon the Administrative Agent or any
         Lender, and based upon 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.



                                   Exhibit D
                                     Page 2
                        Form of Assignment and Acceptance
<PAGE>

         6. The Assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Agreement, the other Loan Documents or any other instrument
or document furnished pursuant hereto or thereto as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto.

         7. If either the Assignee or the Assignor desires one or more Notes to
evidence its Loans, it shall request the Administrative Agent to procure such
Notes from the Borrower.

         8. The Assignor and the Assignee agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance.

         9. This Assignment and Acceptance shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns;
provided, however, that the Assignee shall not assign its rights or obligations
hereunder without the prior written consent of the Assignor and any purported
assignment, absent such consent, shall be void.

         10. This Assignment and Acceptance may be executed by facsimile
signatures with the same force and effect as if manually signed and may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. This
Assignment and Acceptance shall be governed by and construed in accordance with
the laws of the state specified in SECTION 10.16 of the Agreement entitled
"Governing Law."

         11. The effectiveness of the assignment described herein is subject to:

         (a) if such consent is required by the Agreement, receipt by the
Assignor and the Assignee of the consent of the Administrative Agent and/or the
Borrower to the assignment described herein. By delivering a duly executed and
delivered copy of this Assignment and Acceptance to the Administrative Agent,
the Assignor and the Assignee hereby request any such required consent and
request that the Administrative Agent register the Assignee as a Lender under
the Agreement effective as of the Effective Date; and

         (b) receipt by the Administrative Agent of (or other arrangements
acceptable to the Administrative Agent with respect to) any applicable
assignment fee referred to in SECTION 10.07(b) of the Agreement and any tax
forms required by SECTION 10.15 of the Agreement.

         By signing below, the Administrative Agent agrees to register the
Assignee as a Lender under the Agreement, effective as of the Effective Date
with respect to the Assigned Interest, and will adjust the registered Pro Rata
Share of the Assignor under the Agreement to reflect the assignment of the
Assigned Interest.

         12. Attached hereto as SCHEDULE 2 is all contact, address, account and
other administrative information relating to the Assignee.



                                   Exhibit D
                                     Page 3
                        Form of Assignment and Acceptance

<PAGE>


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

<Table>
<S>                                                    <C>
                                                       Assignor:

                                                       [Name of Assignor]

                                                       By:
                                                          ----------------------------------------------------
                                                       Name:
                                                            --------------------------------------------------
                                                       Title:
                                                             -------------------------------------------------


                                                       Assignee:
                                                       [Name of Assignee]
[ ]  Tax forms required by
     SECTION 10.15 of the Agreement included           By:
                                                          ----------------------------------------------------
                                                       Name:
                                                            --------------------------------------------------
                                                       Title:
                                                             -------------------------------------------------
</Table>

(Signatures continue)



                                   Exhibit D
                                     Page 4
                        Form of Assignment and Acceptance

<PAGE>


         In accordance with and subject to SECTION 10.07 of the Credit
Agreement, the undersigned consent to the foregoing assignment as of the
Effective Date:

Williams OLP, L.P.

By:    Williams GP LLC, its
       General Partner


By:
     ------------------------------------------------
Name:
       ----------------------------------------------
Title:
        ---------------------------------------------

BANK OF AMERICA, N.A.,
as Administrative Agent


By:
     ------------------------------------------------
      Title:



                                   Exhibit D
                                     Page 5
                        Form of Assignment and Acceptance

<PAGE>



                                         SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE


                              THE ASSIGNED INTEREST

Effective Date:
                ----------------------

<Table>
<Caption>
                                                                          Commitment Percentage
                                                        (i.e. the proportion that Assignee's Committed Sum to be
                                                       acquired bears to the Aggregate Committed Sum or Percentage
                               Committed Sum or        of Outstanding Amount assigned (i.e. the proportion that the
                                  Outstanding           Outstanding Amount to be acquired by Assignee bears to the
                                Amount Assigned         aggregate Outstanding Amount under the respective Facility)
Assigned Facility               (as applicable)                     (set forth to at least 8 decimal points)
-----------------              ----------------        ------------------------------------------------------------

<S>                           <C>                                       <C>
REVOLVER FACILITY                                                                         %
                                  -----------                                  ----------
TERM LOAN FACILITY                                                                        %
                                  -----------                                  ----------
</Table>



                                   Schedule 1
                                     Page 1
                        Form of Assignment and Acceptance

<PAGE>



                                         SCHEDULE 2 TO ASSIGNMENT AND ACCEPTANCE


                             ADMINISTRATIVE DETAILS

        (Assignee to list names of credit contacts, addresses, phone and
            facsimile numbers, electronic mail addresses and account
                            and payment information)





                                   Schedule 2
                                     Page 1
                        Form of Assignment and Acceptance


<PAGE>



                                                                       EXHIBIT E



                                FORM OF GUARANTY

         THIS GUARANTY is executed as of February 6, 2001, jointly and severally
by the undersigned (each a "GUARANTOR" and collectively the "GUARANTORS"), for
the benefit of BANK OF AMERICA, N.A., a national banking association (in its
capacity as Administrative Agent for the benefit of Lenders).

                                    RECITALS

         A. Williams OLP, L.P., a Delaware limited partnership ("BORROWER"),
Bank of America, N.A., as Administrative Agent (including its permitted
successors and assigns in such capacity, "ADMINISTRATIVE AGENT"), Lehman
Commercial Paper, Inc., as Syndication Agent, SunTrust Bank, as Documentation
Agent, and the Lenders now or hereafter party to the Credit Agreement (including
their respective permitted successors and assigns, "Lenders") have entered into
a Credit Agreement, dated as of February 6, 2001 (as amended, modified,
supplemented, or restated from time to time, the "CREDIT AGREEMENT");

         B. Provisions of the Credit Agreement permit Guarantors to directly or
indirectly receive proceeds of Borrowings made pursuant thereto; and

         C. This Guaranty is integral to the transactions contemplated by the
Loan Documents and the execution and delivery hereof, is a condition precedent
to Lenders' obligations to extend credit under the Loan Documents.

         ACCORDINGLY, for adequate and sufficient consideration, the receipt and
adequacy of which are hereby acknowledged, each Guarantor, jointly and
severally, guarantees to Administrative Agent and Lenders the prompt payment of
the Guaranteed Debt (defined below) as follows:

         1. DEFINITIONS. Terms defined in the Credit Agreement have the same
meanings when used, unless otherwise defined, in this Guaranty. As used in this
Guaranty:

         BORROWER means Borrower, Borrower as a debtor-in-possession, and any
receiver, trustee, liquidator, conservator, custodian, or similar party
appointed for Borrower or for all or substantially all of Borrower's assets
under any Debtor Relief Law.

         CREDIT AGREEMENT is defined in the recitals to this Guaranty.

         GUARANTEED DEBT means, collectively, (a) the Obligations and (b) all
present and future costs, attorneys' fees, and expenses reasonably incurred by
Administrative Agent or any Lender to enforce Borrower's, any Guarantor's, or
any other obligor's payment of any of the Guaranteed Debt, including, without
limitation (to the extent lawful), all present and future amounts that would
become due but for the operation of Sections 502 or 506 or any other provision
of Title 11 of the United States Code and all present and future accrued and
unpaid interest (including, without limitation, all post-maturity interest and
any post-petition interest in any proceeding under Debtor Relief Laws to which
Borrower or any Guarantor becomes subject).

         GUARANTOR and GUARANTORS is defined in the preamble to this Guaranty.



                                   Exhibit E
                                     Page 1
                                Form of Guaranty

<PAGE>

         LENDER means, individually, or LENDERS means, collectively, on any date
of determination, the Lenders and their permitted successors and assigns.

         SUBORDINATED DEBT means, for each Guarantor, all present and future
obligations of any Company to such Guarantor, whether those obligations are (a)
direct, indirect, fixed, contingent, liquidated, unliquidated, joint, several,
or joint and several, (b) due or to become due to such Guarantor, (c) held by or
are to be held by such Guarantor, (d) created directly or acquired by assignment
or otherwise, or (e) evidenced in writing.

         2. GUARANTY. This is an absolute, irrevocable, and continuing guaranty
of payment, not collection, and the circumstance that at any time or from time
to time the Guaranteed Debt may be paid in full does not affect the obligation
of any Guarantor with respect to the Guaranteed Debt incurred after that. This
Guaranty remains in effect until the Guaranteed Debt is fully paid and
performed, and all commitments to extend any credit under the Loan Documents
have terminated. No Guarantor may rescind or revoke its obligations with respect
to the Guaranteed Debt. Notwithstanding any contrary provision, it is the
intention of Guarantors, Lenders, and Administrative Agent that the amount of
the Guaranteed Debt guaranteed by each Guarantor by this Guaranty shall be in,
but not in excess of, the maximum amount permitted by fraudulent conveyance,
fraudulent transfer, or similar Laws applicable to each such Guarantor.
Accordingly, notwithstanding anything to the contrary contained in this Guaranty
or any other agreement or instrument executed in connection with the payment of
any of the Guaranteed Debt, the amount of the Guaranteed Debt guaranteed by any
Guarantor under this Guaranty 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 provision of any applicable state Law.

         3. CONSIDERATION. Each Guarantor represents and warrants that its
liability under this Guaranty may reasonably be expected to directly or
indirectly benefit it.

         4. CUMULATIVE RIGHTS. If any Guarantor becomes liable for any
indebtedness owing by Borrower to Administrative Agent or any Lender, other than
under this Guaranty, that liability may not be in any manner impaired or
affected by this Guaranty. The Rights of Administrative Agent or Lenders under
this Guaranty are cumulative of any and all other Rights that Administrative
Agent or Lenders may ever have against any Guarantor. The exercise by
Administrative Agent or Lenders of any Right under this Guaranty or otherwise
does not preclude the concurrent or subsequent exercise of any other Right.

         5. PAYMENT UPON DEMAND. If an Event of Default exists, each Guarantor
shall, on demand and without further notice of dishonor and without any notice
having been given to any Guarantor previous to that demand of either the
acceptance by Administrative Agent or Lenders of this Guaranty or the creation
or incurrence of any Guaranteed Debt, pay the amount of the Guaranteed Debt then
due and payable to Administrative Agent and Lenders; provided that, if an Event
of Default exists and Administrative Agent or Lenders cannot, for any reason,
accelerate the Obligations, then the Guaranteed Debt shall be, as among
Guarantors, Administrative Agent, and Lenders, a fully matured, due, and payable
obligation of Guarantors to Administrative Agent and Lenders. It is not
necessary for Administrative Agent or Lenders, in order to enforce that payment
by any Guarantor, first or contemporaneously to institute suit or exhaust
remedies against Borrower or others liable on any Guaranteed Debt.



                                   Exhibit E
                                     Page 2
                                Form of Guaranty

<PAGE>

         6. SUBORDINATION. The Subordinated Debt is expressly subordinated to
the full and final payment of the Guaranteed Debt. Upon the occurrence and
during the continuation of an Event of Default, each Guarantor agrees not to
accept any payment of any Subordinated Debt from any Company. If any Guarantor
receives any payment of any Subordinated Debt in violation of the foregoing,
such Guarantor shall hold that payment in trust for Administrative Agent and
Lenders and promptly turn it over to Administrative Agent, in the form received
(with any necessary endorsements), to be applied to the Guaranteed Debt.

         7. SUBROGATION AND CONTRIBUTION. Until payment in full of the
Guaranteed Debt and the termination of the Obligations of Lenders to extend
credit under the Loan Documents, (a) no Guarantor may assert, enforce, or
otherwise exercise any Right of subrogation to any of the Rights or Liens of
Administrative Agent or Lenders or any other beneficiary against Borrower or any
other obligor on the Guaranteed Debt or any Collateral or other security or any
Right of recourse, reimbursement, subrogation, contribution, indemnification, or
similar Right against Borrower or any other obligor on any Guaranteed Debt or
any Guarantor of it, and (b) each Guarantor defers all of the foregoing Rights
(whether they arise in equity, under contract, by statute, under common Law, or
otherwise). Upon payment in full of the Guaranteed Debt and the termination of
the obligations of Lenders to extend credit under the Loan Documents, each
Guarantor shall be subrogated to the rights of the Administrative Agent and
Lenders against Borrower and the other obligors.

         8. NO RELEASE. Each Guarantor agrees that its obligations under this
Guaranty may not be released, diminished, or affected by the occurrence of any
one or more of the following events: (a) any taking or accepting of any
additional guaranty or any other security or assurance for any Guaranteed Debt;
(b) any release, surrender, exchange, subordination, impairment, or loss of any
Collateral securing any Guaranteed Debt; (c) any full or partial release of the
liability of any other obligor on the Obligations, except for any final release
resulting from payment in full of such Obligations; (d) the modification of, or
waiver of compliance with, any terms of any other Loan Document; (e) the
insolvency, bankruptcy, or lack of corporate or partnership power of any other
obligor at any time liable for any Guaranteed Debt, whether now existing or
occurring in the future; (f) any renewal, extension, or rearrangement of any
Guaranteed Debt or any adjustment, indulgence, forbearance, or compromise that
may be granted or given by Administrative Agent or any Lender to any other
obligor on the Obligations; (g) any neglect, delay, omission, failure, or
refusal of Administrative Agent or any Lender to take or prosecute any action in
connection with the Guaranteed Debt or to foreclose, take, or prosecute any
action in connection with any Loan Document; (h) any failure of Administrative
Agent or any Lender to notify any Guarantor of any renewal, extension, or
assignment of any Guaranteed Debt, or the release of any security or of any
other action taken or refrained from being taken by Administrative Agent or any
Lender against Borrower or any new agreement between Administrative Agent, any
Lender, and Borrower; it being understood that neither Administrative Agent nor
any Lender is required to give any Guarantor any notice of any kind under any
circumstances whatsoever with respect to or in connection with any Guaranteed
Debt, other than any notice required to be given in this Guaranty; (i) the
unenforceability of any Guaranteed Debt against any other obligor or any
security securing same because it exceeds the amount permitted by Law, the act
of creating it is ultra vires, the officers creating it exceeded their authority
or violated their fiduciary duties in connection with it, or otherwise; (j) any
payment of the Obligations to Administrative Agent or any Lender is held to
constitute a preference under any Debtor Relief Law or for any other reason
Administrative Agent or any Lender is required to refund that payment or make
payment to someone else (and in each such instance this Guaranty will be
reinstated in an amount equal to that payment); or (k) any other circumstance
which might otherwise constitute a defense available to, or a legal or equitable
discharge of, Borrower or any Guarantor.



                                   Exhibit E
                                     Page 3
                                Form of Guaranty
<PAGE>

         9. WAIVERS. By execution hereof, each Guarantor 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 Guaranteed Debt (or any part thereof) shall not be
affected by any renewal or extension in the time of payment of the Obligations
(or any part thereof). To the maximum extent lawful, each Guarantor waives all
Rights by which it might be entitled to require suit on an accrued Right of
action in respect of any Guaranteed Debt or require suit against Borrower or
others.

         10. LOAN DOCUMENTS. By execution hereof, each Guarantor covenants and
agrees that certain representations, warranties, terms, covenants, and
conditions set forth in the Loan Documents are applicable to Guarantors by their
terms and shall be imposed upon Guarantors, and each Guarantor reaffirms that
each such representation and warranty is true and correct and covenants and
agrees to promptly and properly perform, observe, and comply with each such
term, covenant, or condition. Moreover, each Guarantor acknowledges and agrees
that this Guaranty is subject to the offset provisions of the Loan Documents in
favor of Administrative Agent and Lenders. In the event the Credit Agreement or
any other Loan Document shall cease to remain in effect for any reason
whatsoever during any period when any part of the Guaranteed Debt remains
unpaid, the terms, covenants, and agreements of the Credit Agreement or such
other Loan Document incorporated herein by reference shall nevertheless continue
in full force and effect as obligations of Guarantors under this Guaranty.

         11. RELIANCE AND DUTY TO REMAIN INFORMED. Each Guarantor confirms that
it has executed and delivered this Guaranty after reviewing the terms and
conditions of the Loan Documents and such other information as it has deemed
appropriate in order to make its own credit analysis and decision to execute and
deliver this Guaranty. Each Guarantor confirms that it has made its own
independent investigation with respect to Borrower's creditworthiness and is not
executing and delivering this Guaranty in reliance on any representation or
warranty by Administrative Agent or any Lender as to that creditworthiness. Each
Guarantor expressly assumes all responsibilities to remain informed of the
financial condition of Borrower and any circumstances affecting Borrower's
ability to perform under the Loan Documents to which it is a party.

         12. LOAN DOCUMENT. This Guaranty is a Loan Document and is subject to
the applicable provisions of ARTICLES 1 and 10 of the Credit Agreement,
including, without limitation, the provisions relating to GOVERNING LAW, AND
WAIVER OF RIGHT TO JURY TRIAL, both of which are incorporated into this Guaranty
by reference the same as if set forth in this Guaranty verbatim.

         13. NOTICES. All notices required or permitted under this Guaranty, if
any, shall be given in the manner set forth in Section 10.02 of the Credit
Agreement.

         14. AMENDMENTS, ETC. No amendment, waiver, or discharge to or under
this Guaranty is valid unless it is in writing and is signed by the party
against whom it is sought to be enforced and is otherwise in conformity with the
requirements of SECTION 10.01 of the Credit Agreement.

         15. ADMINISTRATIVE AGENT AND LENDERS. Administrative Agent is
Administrative Agent for each Lender under the Credit Agreement. All Rights
granted to Administrative Agent under or in connection with this Guaranty are
for each Lender's ratable benefit. Administrative Agent may, without the joinder
of any Lender, exercise any Rights in Administrative Agent's or Lenders' favor
under or in connection with this Guaranty. Administrative Agent's and each
Lender's Rights and obligations vis-a-vis each other may be subject to one or
more separate agreements between those parties.



                                   Exhibit E
                                     Page 4
                                Form of Guaranty
<PAGE>

However, no Guarantor is required to inquire about any such agreement or is
subject to any of its terms unless such Guarantor specifically joins such
agreement Therefore, neither Guarantor nor its successors or assigns is entitled
to any benefits or provisions of any such separate agreement or is entitled to
rely upon or raise as a defense any party's failure or refusal to comply with
the provisions of such agreement.

         16. ADDITIONAL GUARANTORS. From time to time subsequent to the time
hereof, additional Persons may execute and deliver guaranties to the
Administrative Agent. Each Guarantor hereunder expressly agrees that its
obligations arising hereunder shall not be affected or diminished by any such
additional guaranties.

         17. PARTIES. This Guaranty benefits Administrative Agent, Lenders, and
their respective successors and assigns and binds Guarantors and their
respective successors and assigns. Upon appointment of any successor
Administrative Agent under the Credit Agreement, all of the Rights of
Administrative Agent under this Guaranty automatically vest in that new
Administrative Agent as successor Administrative Agent on behalf of Lenders
without any further act, deed, conveyance, or other formality other than that
appointment. The Rights of Administrative Agent and Lenders under this Guaranty
may be transferred with any assignment of the Guaranteed Debt pursuant to and in
accordance with the terms of the Credit Agreement. The Credit Agreement contains
provisions governing assignments of the Guaranteed Debt and of Rights and
obligations under this Guaranty.

                     REMAINDER OF PAGE INTENTIONALLY BLANK.
                          SIGNATURE PAGE(s) TO FOLLOW.



                                   Exhibit E
                                     Page 5
                                Form of Guaranty

<PAGE>


         EXECUTED as of the date first stated in this Guaranty.


                              GUARANTORS:

                              WILLIAMS NATURAL GAS LIQUIDS LLC


                              By:
                                 ----------------------------------------------
                              Name:
                                   --------------------------------------------
                              Title:
                                    -------------------------------------------


                              WILLIAMS TERMINALS HOLDING L.P.

                              By:      WILLIAMS NATURAL GAS LIQUIDS LLC, its
                                       General Partner


                              By:
                                 ----------------------------------------------
                              Name:
                                   --------------------------------------------
                              Title:
                                    -------------------------------------------


                              WILLIAMS PIPELINES HOLDINGS L.P.


                              By:      WILLIAMS NATURAL GAS LIQUIDS LLC, its
                                       General Partner


                              By:
                                 ----------------------------------------------
                              Name:
                                   --------------------------------------------
                              Title:
                                    -------------------------------------------


                              WILLIAMS AMMONIA PIPELINE L.P.


                              By:      WILLIAMS NATURAL GAS LIQUIDS LLC, its
                                       General Partner


                              By:
                                 ----------------------------------------------
                              Name:
                                   --------------------------------------------
                              Title:
                                    -------------------------------------------



                                   Exhibit E
                                     Page 6
                                Form of Guaranty

<PAGE>



                                                                     EXHIBIT F-1



                           FORM OF OPINION OF COUNSEL

                                February __, 2001



To each of the Lenders parties to the Credit
Agreement referred to below, and
Bank of America, N.A., as
Administrative Agent for the Lenders

Ladies and Gentlemen:

         We have acted as special counsel to (i) Williams OLP, L.P. (the
"Borrower"), (ii) Williams Natural Gas Liquids LLC ("WNGL"), Williams Terminals
Holding L.P. ("WTH"), Williams Pipelines Holdings L.P. ("WPH") and Williams
Ammonia Pipeline L.P. ("WAP", together with WNGL, WTH and WPH, the
"Guarantors"), and (iii) Williams GP, LLC (the "General Partner") in connection
with the Credit Agreement dated as of February 6, 2001, by and among the
Borrower, the Lenders party thereto, Bank of America, N.A., as Administrative
Agent for the Lenders, Lehman Commercial Paper, Inc., as Syndication Agent, and
SunTrust Bank, as Documentation Agent (the "Credit Agreement").

         This opinion is furnished to you at the request of the Borrower
pursuant to Section 4.01(a)(vi) of the Credit Agreement. Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.

A.       BASIS OF OPINION

         In rendering the opinion set forth herein, we have examined and relied
on originals or copies, certified or otherwise identified to our satisfaction of
the following ("Loan Documents"):

         (a)      the Credit Agreement;

         (b)      the Notes;

         (c)      the Guaranty executed by the Guarantors;

         (d)      a copy of the opinion letter of William G. von Glahn, General
                  Counsel of The Williams Companies, Inc., addressed to you and
                  dated the date hereof or the date of the Credit Agreement, as
                  the case may be;

         (e)      copies of such corporate documents and records of the Loan
                  Parties, certificates of officers and representatives of
                  certain of the Loan Parties, and such other agreements,
                  documents, instruments and certificates of public officials
                  and other Persons as we have deemed necessary or appropriate
                  for the purposes of rendering the opinion expressed herein;
                  and

         (f)      such matters of law as we have deemed necessary or appropriate
                  as a basis for the opinion expressed herein.



                                  Exhibit F-1
                                     Page 1
                           Form of Opinion of Counsel
<PAGE>

B.       ASSUMPTIONS

         In rendering the opinion expressed below, we have assumed, with your
permission, without independent investigation or inquiry, (a) the due
authorization, execution and delivery of the Loan Documents by all parties to
such documents (other than the Loan Parties) and that the Loan Documents are
valid, binding and enforceable (subject to the limitations on enforceability of
the types referred to in the qualifications below) against the parties thereto
(other than the Loan Parties), (b) the legal capacity of natural persons, (c)
the genuineness of all signatures on all documents that we examined, (d) the
authenticity of all documents submitted to us as originals, and (e) the
conformity to authentic originals of all documents submitted to us as certified,
conformed or photostatic copies.

         As to questions of fact material to the opinion hereinafter expressed,
we have relied without investigation upon the representations and warranties of
the Borrower and the Guarantors made in the Loan Documents. We have made no
examination or investigation to verify the accuracy or completeness of any
financial, accounting, or statistical information set forth in the Loan
Documents or otherwise furnished to you and, accordingly, express no opinion
with respect thereto.

         Insofar as our opinion expressed below relates to the matters set forth
in the above-mentioned opinion letter, we have assumed without independent
investigation the correctness of the matters set forth in such opinion, and our
opinion is subject to the assumptions, qualifications and limitations set forth
in such opinion letter.

C.       OPINION

         Based upon our examination and review as set forth in Section A hereof,
and subject to the assumptions, exceptions, qualifications, and limitations set
forth in Sections B and D hereof, we are of the opinion that the Credit
Agreement and each of the Notes constitute valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their respective
terms, and that the Guaranty constitutes valid and binding obligations of each
of the Guarantors enforceable against each of the Guarantors in accordance with
its terms.

D.       QUALIFICATIONS AND EXCEPTIONS

         The opinion rendered above is subject in all respects to the following
qualifications and comments:

         1.       Our opinion above, as to enforceability, is subject to the
                  effect of any applicable bankruptcy, insolvency, fraudulent
                  conveyance, reorganization, moratorium and other similar laws
                  relating to or affecting creditors' rights generally.

         2.       Our opinion is subject to the effect of general principles of
                  equity (whether considered in a proceeding in equity or at
                  law). In rendering our opinion, we have assumed that the
                  parties to the Loan Documents will perform their obligations
                  and exercise their rights under such documents within the
                  standards of reasonableness, good faith and fair dealing
                  imposed by applicable law.

         3.       We express no opinion with respect to the legality, validity,
                  binding nature, or enforceability of any of the following
                  provisions found in the Loan Documents, if any: (i) provisions
                  relating to waivers, precluding a party from asserting certain
                  claims or defenses or from obtaining or exercising certain
                  rights, releases, and remedies, or excusing



                                  Exhibit F-1
                                     Page 2
                           Form of Opinion of Counsel
<PAGE>

                  a party from damages, liability, or obligations to the extent
                  such provisions may violate public policy or otherwise violate
                  applicable law; (ii) provisions relating to subrogation
                  rights, delay or omission of enforcement of rights or
                  remedies, severability, or set offs that violate applicable
                  law; (iii) provisions obligating a party to submit to the
                  jurisdiction or venue of any court; (iv) provisions purporting
                  to establish evidentiary standards for suits or proceedings to
                  enforce the Loan Documents; (v) provisions that decisions by a
                  party are conclusive; and (vi) provisions purporting to effect
                  the automatic service of process on any person.

         4.       We are members of the bar of the States of New York and Texas
                  and we express no opinion as to the laws of any jurisdiction
                  other than the laws of the States of New York and Texas, the
                  General Corporate Law of the State of Delaware and the Federal
                  laws of the United States of America.

         5.       This opinion letter is limited to the matters stated herein
                  and no opinions may be implied or inferred beyond the matters
                  expressly stated herein.

         6.       The opinion expressed herein is as of the date hereof, and we
                  assume no obligation to update or supplement such opinion to
                  reflect any facts or circumstances that may hereafter come to
                  our attention or any changes in law that may hereafter occur.

         7.       This opinion is being furnished only to the addresses named
                  above, and has been rendered solely for your benefit in
                  connection with the Credit Agreement and the transactions
                  contemplated thereby and may not be used, circulated, quoted,
                  relied upon or otherwise referred to for any other purpose
                  without our prior written consent; provided, however, that any
                  Person that becomes a Lender or successor Administrative Agent
                  pursuant to the terms of the Credit Agreement may rely on this
                  opinion as if it were addressed to such Person and delivered
                  on the date hereof.

                                         Very truly yours,



                                         VINSON & ELKINS L.L.P.



                                  Exhibit F-1
                                     Page 3
                           Form of Opinion of Counsel

<PAGE>



                                                                     EXHIBIT F-2



                           FORM OF OPINION OF COUNSEL

February __, 2001

To each of the Lenders parties to the Credit
Agreement referred to below, and
Bank of America, N.A., as
Administrative Agent for the Lenders

Ladies and Gentlemen:

         I am General Counsel of The Williams Companies, Inc. and have acted as
counsel to (i) Williams OLP, L.P. (the "Borrower"), (ii) Williams Natural Gas
Liquids LLC ("WNGL"), Williams Terminals Holding L.P. ("WTH"), Williams
Pipelines Holdings L.P. ("WPH") and Williams Ammonia Pipeline L.P. ("WAP",
together with WNGL, WTH and WPH, the "Guarantors"), and (iii) Williams GP, LLC
(the "General Partner," and together with the Borrower and the Guarantors, the
"Transaction Parties") in connection with the Credit Agreement dated as of
February 6, 2001, by and among the Borrower, the Lenders party thereto, Bank of
America, N.A., as Administrative Agent for the Lenders, Lehman Commercial Paper,
Inc., as Syndication Agent, and SunTrust Bank, as Documentation Agent (the
"Agreement"). This opinion is furnished to you at the request of the Borrower
pursuant to Section 4.01(a)(vi) of the Agreement. Terms defined in the Agreement
not otherwise defined herein are used herein as therein defined.

         In connection with the opinions expressed herein, I, or attorneys
reporting to me, have examined and relied upon copies of the following
documents:

         (a)      the Agreement, including all exhibits, schedules, and
                  attachments thereto, and any Notes issued pursuant thereto
                  (the "Notes");

         (b)      the Guaranty dated as of even date with the Agreement executed
                  by each of the Guarantors (the "Guaranty");

         (c)      Certificates of the Secretary of State of the State of
                  Delaware dated February ___, 2001, attesting to the continued
                  existence and good standing of the Transaction Parties in
                  Delaware; and

         (d)      the Organization Documents of the Transaction Parties and all
                  amendments thereto.

         Those documents identified in items (a) and (b) above are collectively
referred to herein as the "Credit Documents." In connection with this opinion, I
or other attorneys acting under my supervision have (i) investigated such
questions of law, (ii) examined such partnership and company documents and
records of the Transaction Parties and certificates of public officials, and
(iii) received such information from officers and representatives of the
Transaction Parties and made such investigations as I or other attorneys under
my supervision have deemed necessary or appropriate for the purposes of this
opinion. I have not, nor have other attorneys under my supervision, conducted
independent investigations or inquiries to determine the existence of matters,
actions, proceedings, items, documents, facts, judgments, decrees,



                                  Exhibit F-2
                                     Page 1
                           Form of Opinion of Counsel
<PAGE>

franchises, certificates, permits, or the like and have made no independent
search of the records of any court, arbitrator, or governmental authority
affecting any Person, and no inference as to my knowledge thereof shall be drawn
from the fact of my representation of any party or otherwise.

         In rendering the opinions herein, I have assumed without independent
verification (i) the genuineness of all signatures of the Lenders and the
Administrative Agent, (ii) the capacity of the signing officers of each of the
Lenders and the Administrative Agent, (iii) the authenticity of all documents
submitted to me as original and the conformity with the authentic originals of
all documents submitted to me as copies, and (iv) the due execution and
delivery, pursuant to due authorization, of the Agreement by the Lenders and the
Administrative Agent and the enforceability of the Agreement against the Lenders
and the Administrative Agent.

         Based upon and subject to the foregoing and the other qualifications,
limitations, and assumptions set forth below and upon such other matters as I
have deemed appropriate, I am of the opinion that:

         1.       The Borrower is a limited partnership duly organized, validly
                  existing, and in good standing under the laws of the State of
                  Delaware; WNGL is a limited liability company duly organized,
                  validly existing, and in good standing under the laws of the
                  State of Delaware; and each of WTH, WPH and WAP is a limited
                  partnership duly organized, validly existing, and in good
                  standing under the laws of the State of Delaware.

         2.       Each Transaction Party has the partnership or company power
                  and authority to own and lease its property and to conduct the
                  business in which it is currently engaged. The execution,
                  delivery, and performance by each of the Transaction Parties
                  of the Credit Documents and the consummation of the
                  transactions contemplated by the Credit Documents are (a)
                  within its partnership or company powers, (b) will not
                  contravene (i) the Organization Documents of any Transaction
                  Party, (ii) any law, rule, or regulation applicable to any
                  Transaction Party (including, without limitation, Regulation X
                  of the Board of Governors of the Federal Reserve System), or
                  (iii) any contractual or legal restriction, and (c) will not
                  result in or require the creation or imposition of any Lien
                  prohibited by the Credit Documents.

         3.       The Agreement has been duly authorized, executed, and
                  delivered to the Administrative Agent by the Borrower, and the
                  Guaranty has been duly authorized, executed, and delivered to
                  the Administrative Agent by each of the Guarantors.

         4.       No authorization, 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 any Transaction Party of the Credit Documents
                  to which it is a party or the consummation of the transactions
                  contemplated by the Credit Documents, except, in the case of
                  such performance, for such authorizations, approvals, actions,
                  notices, and filings which have been made or obtained.

         5.       To my knowledge there are no pending or overtly threatened
                  actions or proceedings against any Transaction Party before
                  any court, governmental agency, or arbitrator that purport to
                  affect the legality, validity, binding effect, or
                  enforceability of the Credit Documents, or that would
                  reasonably be expected to have a materially adverse effect
                  upon the financial condition or operations of any Transaction
                  Party, taken as a whole.



                                  Exhibit F-2
                                     Page 2
                           Form of Opinion of Counsel

<PAGE>

         6.       No Transaction 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. No Transaction
                  Party 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.

         7.       In any action or proceeding arising out of or relating to the
                  Credit Documents in any court of the State of Oklahoma or in
                  any Federal court sitting in the State of Oklahoma, assuming
                  (i) proper venue, jurisdiction, and a full and proper
                  presentation of the issues and the law to the court, (ii) such
                  action or proceeding is not dismissed on the basis of an
                  inconvenient forum, and (iii) that the court properly applies
                  Oklahoma law, such court would (a) recognize and give effect
                  to the provisions of the Credit Documents that set forth the
                  governing law, and (b) construe the Credit Documents in
                  accordance with the internal laws of the State of New York.
                  Subject to the foregoing and without limiting the generality
                  thereof, a court of the State of Oklahoma or a Federal court
                  sitting in the State of Oklahoma would apply the usury law of
                  the State of New York, and would not apply the usury law of
                  the State of Oklahoma, to the Credit Documents. However, if a
                  court were to hold that the Credit Documents are governed by
                  or are to be construed in accordance with the laws of the
                  State of Oklahoma, the Agreement, when executed and delivered
                  by the parties thereto, would be, under the laws of the State
                  of Oklahoma, legal, valid, and binding obligations of the
                  Borrower, enforceable against the Borrower in accordance with
                  its terms, and the Guaranty would be, under the laws of the
                  State of Oklahoma, legal, valid and binding obligations of
                  each Guarantor, enforceable against each Guarantor in
                  accordance with its terms.

         The opinions expressed in this letter are subject to the following
additional qualifications and limitations:

         A.       My opinion in paragraph 1 with respect to the organization and
                  good standing of the Borrower, WNGL, WTH, WPH and WAP is based
                  solely on Certificates, dated as of February ___, 2001, from
                  the Secretary of State of the State of Delaware, certifying as
                  to such matters.

         B.       My opinion in the last sentence of paragraph 7 above is
                  subject, insofar as enforceability is concerned, to the effect
                  of any applicable bankruptcy, insolvency, reorganization,
                  fraudulent conveyance, moratorium, or similar law affecting
                  creditors' rights and remedies generally.

         C.       My opinion in the last sentence of paragraph 7 above is
                  subject, insofar as enforceability is concerned, to the effect
                  of general principles of equity including principles of
                  commercial reasonableness, good faith, and fair dealing
                  (regardless of whether considered in a proceeding in equity or
                  at law).

         D.       I express no opinion with respect to the enforceability of any
                  of the following: (i) indemnification provisions to the extent
                  the same are violative of federal or state securities laws,
                  rules, or regulations, or of public policy, (ii) clauses
                  waiving right to trial by jury,



                                  Exhibit F-2
                                     Page 3
                           Form of Opinion of Counsel
<PAGE>

                  exculpation clauses, or clauses granting offset rights to the
                  Banks or against any deposits or in respect of matured claims,
                  (iii) clauses relating to recovery of attorneys' fees in
                  connection with the enforcement of obligations, (iv) clauses
                  relating to release of unmatured claims and integration
                  clauses to the effect that no representation was made other
                  than as appears in the Agreement, (v) clauses purporting to
                  waive unmatured rights, representations, warranties, or
                  affirmative or negative covenants to the extent such
                  representations, warranties, or covenants can be construed to
                  be independent clauses which purport to be legal, valid,
                  binding, and enforceable by themselves, as distinguished from
                  being clauses that trigger an event of default, and
                  severability and similar clauses, and (vi) clauses that
                  incorporate by reference a document or instrument or agreement
                  not in existence on the date hereof to the extent that any
                  such document, instrument, or agreement is the basis of an
                  effort to enforce the Agreement, insofar as any of the
                  foregoing are contained in the Agreement.

         E.       I express no opinion as to the effect on the opinions herein
                  stated of compliance or non-compliance by any Lender with any
                  applicable state, federal, or other laws or regulations
                  applying only to banks, or the legal or regulatory status of
                  any Lender.

         F.       My opinion in paragraph 7 above assumes (i) application of New
                  York law would not be found to be contrary to a fundamental
                  policy of a state with a materially greater interest in
                  determining the question presented and the laws of which would
                  govern in absence of an effective choice of law, and (ii) the
                  Syndication Agent, one of the Joint Lead Arrangers and Joint
                  Book Managers, and one or more Lenders, each have their
                  principal place of business located in the State of New York,
                  and one or more Lenders has a place of business located in the
                  State of New York.

         G.       Qualification of any statement or opinion herein by the use of
                  the words "to my knowledge" means that during the course of
                  representation in connection with the transactions
                  contemplated by the Agreement, no information has come to the
                  attention of me or attorneys reporting to me that would give
                  me or such attorneys current actual knowledge of the existence
                  of facts or matters so qualified. I have not undertaken any
                  investigation to determine the existence of facts, and no
                  inference as to my knowledge thereof shall be drawn from the
                  fact of the representation by me or attorneys reporting to me
                  of any party or otherwise.

         I am admitted to practice law in the States of Oklahoma and New York,
and, accordingly, the opinions expressed herein are based upon and limited
exclusively to the laws of the States of Oklahoma and New York, the General
Corporation Law of the State of Delaware and the laws of the United States of
America insofar as any of such laws are applicable. I render no opinion with
respect to any other laws.

         This opinion letter is solely for the benefit of the Lenders and the
Administrative Agent, their respective successors, assigns, participants, and
other transferees and counsel for the Persons referred to in this sentence, in
consummating the transaction contemplated by the Credit Documents, and may not
be used or relied upon by, quoted, transmitted to, or filed with any other
Person or for any other purpose whatsoever without in each instance my prior
written consent. This opinion speaks as of its date, and I undertake no, and
hereby expressly disclaim any, duty to advise you as to any changes of fact or
law coming to my attention after the date hereof.

                                      Very truly yours,

                                      William G. von Glahn



                                  Exhibit F-2
                                     Page 4
                           Form of Opinion of Counsel
<PAGE>


                                                                       EXHIBIT G



                                 PROMISSORY NOTE
                                                           _______________, 2000


         WILLIAMS OLP, L.P. (the "BORROWER") promises to pay to the order of
________________ ("HOLDER"), upon the earlier of demand (provided, however, that
no demand may be made prior to Permitted Demand Date) or the Stated Termination
Date, the aggregate unpaid principal amount of Advances made by Holder to the
Borrower hereunder, in immediately available funds at the main office of Holder,
together with interest on the unpaid principal amount hereof at the rate set
forth herein. Capitalized terms used herein and not otherwise defined shall have
the meaning set forth in Exhibit A attached hereto and made a part of this
Promissory Note.

         Holder shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record, the date and amount of each Advance and
the date and amount of each principal payment hereunder and such recording shall
be conclusive and binding for all purposes, absent manifest error; provided
however, that the failure to so record shall not affect the Borrower's
obligations under this Promissory Note.

         Interest shall be computed on the basis of a year of 360 days for the
actual number of days elapsed at the Eurodollar Rate per annum plus the
Applicable Margin in effect from time to time. The interest rate will be a fixed
rate for the entire calendar month commencing on the first calendar day of the
month and ending on the last calendar day of the month. The Borrower shall pay
interest on the unpaid principal amount monthly on the 25th date of each month,
and on the date of payment in full.

         Any amount of principal not paid when due shall bear interest, from the
date on which such amount is due until such amount is paid in full, at a rate
per annum equal to the sum of the rate per annum required to be paid on the
Advance plus 2% per annum.

         No failure to exercise, and no delay in exercising any rights hereunder
on the part of the holders hereof shall operate as a waiver of such rights.

         The undersigned agrees to pay all costs, including reasonable
attorney's fees, incurred by the holder in enforcing payment hereof.

         The Borrower agrees, and Holder as holder of this Promissory Note and
by acceptance of this Promissory Note agrees, that the payment of any principal,
interest or penalty under this Promissory Note is expressly subordinated to the
Senior Debt for the benefit of the Administrative Agent and the Lenders, as
follows:

         1. Subordination of Payment. After such time as a Default or Event of
Default (as defined in the OLP Credit Agreement) has occurred and is continuing,
Holder will not ask for, demand, sue for, take, receive or accept from the
Borrower, by setoff or in any other manner, any payment or distribution on
account of the obligations evidenced by this Promissory Note, nor present this
Promissory Note for payment.

         2. No Payments in Violation of Senior Debt Documents. Holder will not
ask for, demand, sue for, take, receive or accept from the Borrower, by setoff
or in any other manner, any payment or distribution on account of the debt
evidenced by this Promissory Note, if the making of such payment



                                   Exhibit G
                                     Page 1
                             Form of Promissory Note
<PAGE>

would constitute, or would result in the occurrence of, a violation of the OLP
Credit Agreement, or would result in the occurrence of any Default or Event of
Default thereunder.

         3. Bankruptcy, Receivership and Similar Proceedings.

                  (a) Upon any payment or distribution of all or any of the
assets or securities of the Borrower of any kind or character, whether in cash,
property or securities, upon dissolution, winding up, liquidation,
reorganization, arrangement, adjustment, protection or relief of the Borrower or
its debts whether voluntary or involuntary or in bankruptcy, insolvency,
receivership, arrangement, reorganization, relief or other proceedings (an
"INSOLVENCY PROCEEDING") or upon an arrangement for the benefit of creditors or
any other marshalling of the assets and liabilities of the Borrower or
otherwise, all Senior Debt shall first be paid in full in cash before the Holder
shall be entitled to receive any payment of the obligations evidenced by this
Promissory Note. Upon any of the circumstances referred to in the preceding
sentence, any payment or distribution of assets or securities of the Borrower of
any kind or character, whether in cash, property or securities, to which Holder
would be entitled except for the provisions of Sections 1 through 6 of this
Promissory Note, shall be made by the Borrower or any receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, directly to the Administrative Agent for the benefit of the
Lenders for application to the payment or prepayment of all Senior Debt in full.

                  (b) In the event of any Insolvency Proceeding, whether or not
pursuant to bankruptcy laws, Holder will at the Administrative Agent's request
file any claim, proof of claim, proof of interest or other instrument of similar
character necessary to enforce the obligations of the Borrower in respect to the
debt evidenced by this Promissory Note and will hold all payments on and
proceeds from such debt evidenced by this Promissory Note in trust for the
Administrative Agent and the Lenders and pay the same over to the Administrative
Agent in the form received (together with any necessary endorsement), to be
applied on the Senior Debt remaining unpaid until all Senior Debt shall be paid
in full. In the event that Holder shall fail to take any such action requested
by the Administrative Agent, the Administrative Agent may, as attorney-in-fact
for Holder, take such action on behalf of Holder and Holder hereby appoints the
Administrative Agent as attorney-in-fact for Holder to demand, sue for, collect
and receive any and all such monies, dividends or other assets and give
acquittance therefor and to file any claim, proof of claim, proof of interest or
other instrument of similar character and take such other proceeding in the
Administrative Agent's own name or in the name of Holder as the Administrative
Agent may deem necessary or advisable for the enforcement of these subordination
provisions; this appointment is irrevocable and is coupled with an interest in
such monies, dividends and assets. Holder will execute and deliver to the
Administrative Agent such other and further powers of attorney or other
instruments as the Administrative Agent may request in order to accomplish the
foregoing.

         4. Payments Held in Trust. In the event Holder shall receive any
payment or distribution on account of the debt evidenced by this Promissory Note
which Holder is prohibited from receiving under the provisions of the foregoing
paragraphs 1, 2 or 3, Holder will hold any amount so received in trust for the
Administrative Agent and the Lenders and will forthwith turn over such payment
to the Administrative Agent in the form received by Holder (together with any
necessary endorsement) to be applied on the Senior Debt remaining unpaid until
all Senior Debt has been paid in full, after giving effect to any concurrent
payment or distribution to the Administrative Agent.

         5. Restrictions on Action Against Borrower. Holder will not commence
any action or proceeding against the Borrower to recover all or any part of the
debt evidenced by this Promissory Note, nor join with any other creditor, unless
the Administrative Agent shall also join, in bringing any proceedings against
the Borrower under any bankruptcy, reorganization, readjustment of debt,
arrangement



                                   Exhibit G
                                     Page 2
                             Form of Promissory Note
<PAGE>

of debt, receivership, liquidation or insolvency law, or statute of the federal
or any state government, unless and until all Senior Debt shall have been paid
in full and all commitments to lend under the OLP Credit Agreement have
terminated.

         6. Miscellaneous.

                  (a) All rights and interests of Lenders and the Administrative
Agent under Sections 1 through 6 of this Promissory Note, and all agreements and
obligations of the Holder and the Borrower under such Sections, shall remain in
full force and effect irrespective of: (i) any lack of validity or
enforceability of the OLP Credit Agreement or the other OLP Loan Documents; (ii)
any change in the time, manner or place of payment of, or in any other term of,
all or any of the Senior Debt, or any other amendment or waiver of or any
consent to departure from the OLP Credit Agreement or the other OLP Loan
Documents; (iii) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any guaranty,
for all or any of the Senior Debt; or (iv) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Borrower or
a subordinated creditor.

                  (b) The provisions of these Sections 1 through 6 shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Senior Debt is rescinded or must otherwise be returned
by the Administrative Agent or any Lender upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, all as though such payment had not
been made.

                  (c) No failure on the part of the Administrative Agent or any
Lender 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.

                  (d) The provisions of these Sections 1 through 6 shall (i)
remain in full force and effect until the Senior Debt shall have been paid in
full and all commitments to lend under the OLP Credit Agreement have terminated,
(ii) be binding upon the Holder, the Borrower and their successors and assigns,
and (iii) inure to the benefit of and be enforceable by the Administrative Agent
and the Lenders and their successors, transferees and assigns.

         This Promissory Note shall be governed by and construed in accordance
with the laws of the State of Oklahoma and reflects an uncommitted credit
arrangement between the Borrower and Holder.

                                    WILLIAMS OLP, L.P.


                                    By:
                                       ----------------------------------------
                                    Name:
                                    Title:



                                   Exhibit G
                                     Page 3
                             Form of Promissory Note

<PAGE>


                                    EXHIBIT A


         "ADVANCE" means any advance by Holder to the Borrower of funds
evidenced by the Promissory Note.

         "APPLICABLE MARGIN" means the rate per annum set forth in Schedule XI
of the Credit Agreement under the heading "Applicable Margin" for the relevant
Rating Category applicable to Holder as of 10:00 A.m. on the first day of each
month. If the first day of the month is not a business day, the previous
business day's Rating Category applicable to Holder will prevail. The Applicable
Margin shall change when and as the relevant Rating Category applicable to
Holder changes.

         "CITIBANK" means Citibank, N.A.

         "COMMITMENT DRAWN": means the total amount drawn by the Credit
Agreement Borrowers under the Credit Agreement.

         "CREDIT AGREEMENT" means that certain Credit Agreement as may be
amended from time to time, among Holder, Northwest Pipeline Corporation,
Transcontinental Gas Pipe Line Corporation, and Texas Gas Transmission
Corporation, (collectively, the "CREDIT AGREEMENT BORROWERS"), Citibank, N.A.,
as Agent, and the banks parties thereto.

         "EURODOLLAR RATE" means an interest per annum (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such rate is not such a
multiple) equal to the rate per annum at which deposits in U.S. dollars are
offered by the principal office in London, England, to prime banks in the London
interbank market at 11:00 A.M. (London time) as reported by Citibank's telephone
recorded rate announcement ("TRRA") on the first day of each month, obtained by
calling (212) 291-6644. If the first day of the month is not a business day, the
previous day's rate will prevail. The Eurodollar Rate may also be referred to as
LIBOR or the LIBOR rate ("LONDON INTERBANK OFFERED RATE") by the TRRA.

         "MOODY'S" means Moody's Investors Service, Inc.

         "OLP CREDIT AGREEMENT" means that certain Credit Agreement dated as of
February 6, 2001, as may be amended and restated from time to time, among the
Borrower, Bank of America, N.A., as Administrative Agent (the "ADMINISTRATIVE
AGENT") the other agents therein named, and the lenders from time to time party
thereto (the "LENDERS").

         "OLP LOAN DOCUMENTS" means the Loan Documents as defined in the OLP
Credit Agreement, as such Loan Documents may from time to time be amended and
restated.

         "PERMITTED DEMAND DATE" means the date that is six months after the
Maturity Date as defined in the OLP Credit Agreement, or if earlier, the date
that all amounts owed under the OLP Credit Agreement have been paid in full and
all Commitments to lend thereunder have been terminated.

         "RATING CATEGORY" means, as to Holder, the relevant category applicable
to Holder from time to time as set forth in Schedule XI of the Credit Agreement,
which is based on the ratings (or lack thereof) of Holder's senior unsecured
long-term debt by S&P or Moody's.

         "S&P" means Standard & Poor's Ratings Group, a division of The McGraw
Hill Companies, Inc.



                                   Exhibit G
                                     Page 4
                             Form of Promissory Note
<PAGE>

         "SENIOR DEBT" means (a) all Obligations of Borrower as defined in the
OLP Credit Agreement, and all obligations of Borrower to any Lender or any
Affiliate (as defined in the OLP Credit Agreement) of a Lender arising from or
pursuant to any Swap Contract, in each case due or to become due, now existing
or hereafter arising, and (b) all indebtedness of the Borrower the proceeds of
which are used to refinance the foregoing Senior Debt, in each case including
without limitation interest that occurs after the commencement by or against the
Borrower of any proceeding under any bankruptcy, reorganization, readjustment of
debt, arrangement of debt, receivership, liquidation or insolvency law, or
statute of the federal or any state government naming Borrower as the debtor in
such proceeding.

         "STATED TERMINATION DATE" has the meaning set forth in the Credit
Agreement.

         "SWAP CONTRACT" has the meaning set forth in the OLP Credit Agreement.



                                   Exhibit G
                                     Page 5
                             Form of Promissory Note

<PAGE>

       Daily Intercompany Promissory Note Balance and Interest Calculation



         Lender:           THE WILLIAMS COMPANIES, INC.
         Borrower:         WILLIAMS OLP, L.P.
         Account:
         Month, Year:
                           ----------
         TERMS

         Rate:
                           ----------

<Table>
<Caption>
                           Beginning                                            Ending
         Date              Balance          Debits            Credits           Balance          Interest
         ----              ---------        ------            -------           -------          --------
<S>                        <C>              <C>               <C>               <C>              <C>


</Table>



                                   Exhibit G
                                     Page 6
                             Form of Promissory Note

<PAGE>
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                               AND LIMITED WAIVER

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER (this
"AMENDMENT") is entered into as of July 31, 2001, among WILLIAMS OLP, L.P., a
Delaware limited partnership ("BORROWER"), the undersigned Guarantors
("GUARANTORS"), BANK OF AMERICA, N.A., as Administrative Agent (the
"ADMINISTRATIVE AGENT") for the Lenders under the Credit Agreement hereinafter
referenced, and the Lenders (as defined in the Credit Agreement) party hereto.

         Reference is made to the Credit Agreement dated as of February 6, 2001
(the "CREDIT AGREEMENT") among Borrower, Administrative Agent, Lehman Commercial
Paper, Inc., as Syndication Agent, SunTrust Bank as Documentation Agent, and the
Lenders party thereto. Unless otherwise defined in this Amendment, capitalized
terms used herein shall have the meaning set forth in the Credit Agreement; all
Section and Schedule references herein are to Sections and Schedules in the
Credit Agreement; and all Paragraph references herein are to Paragraphs in this
Amendment.

                                    RECITALS

         A. Borrower has advised the Administrative Agent and the Lenders that
as of March 31, 2001, the Interest Coverage Ratio was 2.3 to 1.0, which is lower
than the 3.0 Interest Coverage Ratio required by SECTION 7.14(a) of the Credit
Agreement. Borrower has advised that this is the result of including, in such
calculation, interest expense with respect to approximately $225,000,000 of
intercompany debt that was repaid with proceeds of the MLP Offering. Therefore,
Borrower has requested that the Administrative Agent and the Lenders agree to
waive such Interest Coverage Ratio default, and to amend the definition of
Interest Coverage Ratio. Borrower also has requested amendments to the Credit
Agreement to allocate a portion of the Revolver Commitment from the Working
Capital/Distribution Subfacility to the Acquisition Subfacility so that the
Acquisition Subfacility Commitment equals $48,000,000 and the Working
Capital/Distribution Subfacility Commitment equals $12,000,000. In addition to
this First Amendment, Borrower also has requested that the Administrative Agent
and the Lenders enter into a Second Amendment to Credit Agreement to increase
the Revolver Commitment from $60,000,000 to an amount up to $85,000,000 by
increasing the Acquisition Subfacility from $48,000,000 to an amount up to
$73,000,000.

         B. Subject to the terms and conditions of this Amendment, the
Administrative Agent and the undersigned Lenders are willing to agree to such
amendments.

         Accordingly, for adequate and sufficient consideration, the parties
hereto agree, as follows:

         PARAGRAPH 1. LIMITED WAIVER. The undersigned Administrative Agent and
Lenders hereby waive the Event of Default under SECTION 7.14(a) of the Credit
Agreement resulting from the Interest Coverage Ratio being less than 3.0 to 1.0
as of the fiscal quarter ending March 31, 2001. Nothing herein shall, or shall
be deemed to, waive the provisions of SECTION 7.14(a) or any other provisions of
the Credit Agreement, except as expressly set forth above with respect to the
Interest Coverage Ratio as of March 31, 2001.





                                        1    FIRST AMENDMENT TO CREDIT AGREEMENT

<PAGE>

         PARAGRAPH 2. AMENDMENTS.

         2.1 DEFINITIONS.

         (a) The definition of "ACQUISITION SUBFACILITY COMMITMENT" is amended
in its entirety to read as follows:

                  "ACQUISITION SUBFACILITY COMMITMENT means an amount (subject
                  to reduction or cancellation as herein provided) equal to
                  $48,000,000.00."

         (b) The definition of "INTEREST COVERAGE RATIO" is amended in its
entirety to read as follows:

                  "INTEREST COVERAGE RATIO" means (1) as of June 30, 2001 and as
                  of September 30, 2001 (each, a "DETERMINATION DATE") the ratio
                  of (a) the sum of (i) Consolidated EBITDA for the period from
                  January 1, 2001 through such Determination Date and (ii)
                  Consolidated Lease and Rental Expense during such period to
                  (b) the sum of (i) Consolidated Interest Charges during such
                  period and (ii) Consolidated Lease and Rental Expense during
                  such period, and (2) as of the last day of the fiscal quarter
                  ending on December 31, 2001 and as of the last day of each
                  fiscal quarter thereafter the ratio of (a) the sum of (i)
                  Consolidated EBITDA for the period of the four prior fiscal
                  quarters ending on such date and (ii) Consolidated Lease and
                  Rental Expense during such period to (b) the sum of (i)
                  Consolidated Interest Charges during such period and (ii)
                  Consolidated Lease and Rental Expense during such period. For
                  purposes of calculating the Interest Coverage Ratio,
                  Consolidated Interest Charges for the fiscal quarter ending
                  March 31, 2001 shall be calculated on a pro forma basis based
                  on Consolidated Interest Charges for the period from February
                  6, 2001 through March 31, 2001."

         (c) The definition of "WORKING CAPITAL/DISTRIBUTION SUBFACILITY
COMMITMENT" is amended in its entirety to read as follows:

                  "WORKING CAPITAL/DISTRIBUTION SUBFACILITY COMMITMENT means an
                  amount (subject to reduction or cancellation as herein
                  provided) equal to $12,000,000.00."

         2.2 SCHEDULE 2.01. SCHEDULE 2.01 is hereby deleted in its entirety and
SCHEDULE 2.01 attached hereto is substituted in lieu thereof.

         2.3 EXHIBITS.

         (a) EXHIBIT A-1 is hereby deleted in its entirety and EXHIBIT A-1
attached hereto is substituted in lieu thereof.

         (b) EXHIBIT C-1 is hereby deleted in its entirety and EXHIBIT C-1
attached hereto is substituted in lieu thereof.



                                        2    FIRST AMENDMENT TO CREDIT AGREEMENT
<PAGE>

         PARAGRAPH 3. EFFECTIVE DATE. Notwithstanding any contrary provision,
this Amendment is not effective until the date (the "EFFECTIVE DATE") the
Administrative Agent shall have received counterparts of this Amendment,
executed by Borrower, Guarantors and the Required Lenders.

         PARAGRAPH 4. ACKNOWLEDGMENT AND RATIFICATION. As a material inducement
to the Administrative Agent and the Lenders to execute and deliver this
Amendment, Borrower and each Guarantor (a) consent to the agreements in this
Amendment and (b) agree and acknowledge that the execution, delivery, and
performance of this Amendment shall in no way release, diminish, impair, reduce,
or otherwise affect the respective obligations of Borrower or any Guarantor
under the Loan Documents to which it is a party, which Loan Documents shall
remain in full force and effect, and all guaranties and Rights thereunder are
hereby ratified and confirmed.

         PARAGRAPH 5. REPRESENTATIONS. As a material inducement to the
Administrative Agent and the Lenders to execute and deliver this Amendment,
Borrower and each Guarantor represent and warrant to the Administrative Agent
and the Lenders that as of the Effective Date of this Amendment and as of the
date of execution of this Amendment, (a) all representations and warranties in
the Loan Documents are true and correct in all material respects as though made
on the date hereof, except to the extent that any of them speak to a different
specific date, and (b) after taking into account the waiver in Paragraph 1 of
this Amendment, no Default or Event of Default exists.

         PARAGRAPH 6. EXPENSES. Borrower shall pay all reasonable costs, fees,
and expenses paid or incurred by the Administrative Agent incident to this
Amendment, including, without limitation, the fees and expenses of the
Administrative Agent's counsel in connection with the negotiation, preparation,
delivery, and execution of this Amendment and any related documents.

         PARAGRAPH 7. MISCELLANEOUS. This Amendment is a "Loan Document"
referred to in the Credit Agreement. The provisions relating to Loan Documents
in ARTICLE 10 of the Credit Agreement are incorporated in this Amendment by
reference. Unless stated otherwise (a) the singular number includes the plural
and vice versa and words of any gender include each other gender, in each case,
as appropriate, (b) headings and captions may not be construed in interpreting
provisions, (c) this Amendment must be construed, and its performance enforced,
under New York law, (d) if any part of this Amendment is for any reason found to
be unenforceable, all other portions of it nevertheless remain enforceable, and
(e) this Amendment may be executed in any number of counterparts with the same
effect as if all signatories had signed the same document, and all of those
counterparts must be construed together to constitute the same document.

         PARAGRAPH 8. ENTIRE AGREEMENT. THIS AMENDMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THIS AMENDMENT AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

         PARAGRAPH 9. PARTIES. This Amendment binds and inures to the benefit of
Borrower, Guarantors, Administrative Agent, Lenders, and their respective
successors and assigns.

         PARAGRAPH 10. FURTHER ASSURANCES. The parties hereto each agree to
execute from time to time such further documents as may be necessary to
implement the terms of this Agreement.



                                        3    FIRST AMENDMENT TO CREDIT AGREEMENT
<PAGE>

         The parties hereto have executed this Amendment in multiple
counterparts to be effective as of the Effective Date.

                     REMAINDER OF PAGE INTENTIONALLY BLANK.
                           SIGNATURE PAGES TO FOLLOW.



                                        4    FIRST AMENDMENT TO CREDIT AGREEMENT

<PAGE>


                              BORROWER:

                              WILLIAMS OLP, L.P.

                              By:  WILLIAMS GP LLC, its
                                   General Partner


                                   By:    /s/ Don R. Wellendorf
                                         ---------------------
                                   Name:  Don R. Wellendorf
                                         --------------------------------------
                                   Title: Vice President, Strategic Development
                                         --------------------------------------
                                           & Planning
                                         --------------------------------------



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]



<PAGE>


                                 GUARANTORS:

                                 WILLIAMS NGL, LLC


                                 By:  /s/ Don R. Wellendorf
                                    -------------------------------------------
                                 Name:    Don R. Wellendorf
                                      -----------------------------------------
                                 Title:   Vice President, Strategic Development
                                       ----------------------------------------
                                            & Planning
                                       ----------------------------------------



                                 WILLIAMS TERMINALS HOLDING L.P.

                                 By:  WILLIAMS NGL, LLC, its
                                      General Partner


                                 By:  /s/ Don R. Wellendorf
                                    -------------------------------------------
                                 Name:    Don R. Wellendorf
                                      -----------------------------------------
                                 Title:   Vice President, Strategic Development
                                       ----------------------------------------
                                            & Planning
                                       ----------------------------------------



                                 WILLIAMS PIPELINES HOLDINGS L.P.


                                 By:  WILLIAMS NGL, LLC, its
                                      General Partner


                                 By:  /s/ Don R. Wellendorf
                                    -------------------------------------------
                                 Name:    Don R. Wellendorf
                                      -----------------------------------------
                                 Title:   Vice President, Strategic Development
                                       ----------------------------------------
                                            & Planning
                                       ----------------------------------------



                                 WILLIAMS AMMONIA PIPELINE L.P.


                                 By:  WILLIAMS NGL, LLC, its
                                      General Partner


                                 By:  /s/ Don R. Wellendorf
                                    -------------------------------------------
                                 Name:    Don R. Wellendorf
                                      -----------------------------------------
                                 Title:   Vice President, Strategic Development
                                       ----------------------------------------
                                            & Planning
                                       ----------------------------------------



                                 BANK OF AMERICA, N.A., as Administrative Agent
                                 and as a Lender


                                 By:       /s/ Claire M. Liu
                                      -----------------------------------------
                                      Claire M. Liu
                                      Managing Director



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]

<PAGE>



                                 LEHMAN COMMERCIAL PAPER, INC.


                                      By:     /s/ Michele Swanson
                                         --------------------------------------
                                      Name:       Michele Swanson
                                           ------------------------------------
                                      Title:      Authorized Signatory
                                            -----------------------------------



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]


<PAGE>



                                 SUNTRUST BANK


                                      By:     /s/ David J. Edge
                                         --------------------------------------
                                      Name:       David J. Edge
                                           ------------------------------------
                                      Title:      Director
                                            -----------------------------------



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]


<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
                                            -----------------------------------



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]

<PAGE>


                                 NATIONAL WESTMINSTER BANK PLC,
                                 NEW YORK BRANCH


                                      By:      /s/ Scott Barton
                                         --------------------------------------
                                      Name:        Scott Barton
                                           ------------------------------------
                                      Title:       Sr. Vice President
                                            -----------------------------------



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]



<PAGE>



                                 BANK ONE, NA


                                      By:    /s/ Dianne L. Russell
                                         --------------------------------------
                                      Name:      Dianne L. Russell
                                           ------------------------------------
                                      Title:     Vice President
                                            -----------------------------------



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]



<PAGE>


                                 BARCLAYS BANK PLC


                                      By:      /s/ Nicholas A. Bell
                                         --------------------------------------
                                      Name:        Nicholas A. Bell
                                           ------------------------------------
                                      Title:       Director
                                            -----------------------------------



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]



<PAGE>


                                 BAYERISCHE LANDESBANK GIROZENTRALE,
                                 CAYMAN ISLANDS BRANCH


                                      By:     /s/ Hereward Drummond
                                         --------------------------------------
                                      Name:       Hereward Drummond
                                           ------------------------------------
                                      Title:      Senior Vice President
                                            -----------------------------------


                                      By:     /s/ James Fox
                                         --------------------------------------
                                      Name:       James Fox
                                           ------------------------------------
                                      Title:      Vice President
                                            -----------------------------------



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]

<PAGE>


                                 NATEXIS BANQUES POPULAIRES


                                      By:     /s/ Daniel Payer
                                         --------------------------------------
                                      Name:       Daniel Payer
                                           ------------------------------------
                                      Title:      Vice President
                                            -----------------------------------


                                      By:      /s/ Louis P. Laville, III
                                         --------------------------------------
                                      Name:        Louis P. Laville, III
                                           ------------------------------------
                                      Title:       Group Manager
                                            -----------------------------------



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]

<PAGE>


                                 UBS AG, STAMFORD BRANCH


                                      By:    /s/ Wilfred V. Saint
                                         --------------------------------------
                                      Name:      Wilfred V. Saint
                                           ------------------------------------
                                      Title:     Associate Director, Banking
                                            -----------------------------------
                                                 Products Services, US
                                            -----------------------------------



                                             /s/ Lynne B. Alfarone
                                            -----------------------------------
                                                 Lynne B. Alfarone
                                            -----------------------------------
                                                 Associate Director, Banking
                                            -----------------------------------
                                                 Products Services, US
                                            -----------------------------------



             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]


<PAGE>

                                  SCHEDULE 2.01



                                   COMMITMENTS

<Table>
<Caption>
            LENDER                                      REVOLVING FACILITY                                  TERM LOAN FACILITY
            ------                  ---------------------------------------------------------               ------------------
                                                                         Working Capital/
                                    Acquisition Subfacility          Distribution Subfacility
                                    -----------------------          ------------------------

<S>                                 <C>                              <C>                                 <C>
Bank of America                          $4,800,000.00                     $1,200,000.00                       $9,000,000.00

Lehman Commercial Paper, Inc.            $4,800,000.00                     $1,200,000.00                       $9,000,000.00

SunTrust Bank                            $5,600,000.00                     $1,400,000.00                      $10,500,000.00

ABN AMRO Bank, N.V.                      $5,600,000.00                     $1,400,000.00                      $10,500,000.00

National Westminster Bank Plc            $5,600,000.00                     $1,400,000.00                      $10,500,000.00

Bank One, NA                             $4,800,000.00                     $1,200,000.00                       $9,000,000.00

Barclays Bank Plc                        $4,800,000.00                     $1,200,000.00                       $9,000,000.00

Bayerische Landesbank                    $4,800,000.00                     $1,200,000.00                       $9,000,000.00
Girozentrale

UBS AG, Stamford Branch                  $4,000,000.00                     $1,000,000.00                       $7,500,000.00

Natexis Banques Populaires               $3,200,000.00                     $ 800,000.00                        $6,000,000.00



            Total:                        $48,000,000                       $12,000,000                         $90,000,000
</Table>




                                                                   SCHEDULE 2.01

<PAGE>

                                                                     EXHIBIT A-1


                            FORM OF BORROWING NOTICE

                                                       Date:             ,
                                                              -----------  -----

To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of February 6, 2001
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the "AGREEMENT;" the terms defined therein being used herein
as therein defined), among Williams OLP, L.P., a Delaware limited partnership
(the "BORROWER"), the Lenders from time to time party thereto, Bank of America,
N.A., as Administrative Agent, Lehman Commercial Paper, Inc., as Syndication
Agent, and SunTrust Bank, as Documentation Agent.

The undersigned hereby requests (select one):

I.       REVOLVER FACILITY

         A.       Acquisition Subfacility

                  1.       Status Information for the Acquisition Subfacility

                           (a)      Amount of the Acquisition Subfacility:
                                    $48,000,000

                           (b)      Acquisition Subfacility Principal Debt prior
                                    to the Borrowing requested herein:
                                    $
                                     -------------

                           (c)      Principal amount of Loans under the
                                    Acquisition Subfacility available to be
                                    borrowed: $
                                               --------------

                  2.       Amount of Borrowing:  $
                                                  -----------

                  3.       Requested date of Borrowing:                 , 200  .
                                                        ----------------     --

                  4.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for $                       .
                                                        -----------------------

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)     one month for      $
                                                                ---------------
                                    (ii)    two months for     $
                                                                ---------------
                                    (iii)   three months for   $
                                                                ---------------
                                    (iv)    six months for     $
                                                                ---------------



                                   Exhibit A-1
                                     Page 1
                            Form of Borrowing Notice


<PAGE>

B.       Working Capital/Distribution Subfacility

                  1.       Status Information for the Working
                           Capital/Distribution Subfacility

                           (a)      Amount of the Working Capital/Distribution
                                    Subfacility: $12,000,000

                           (b)      Working Capital/Distribution Subfacility
                                    Principal Debt prior to the Borrowing
                                    requested herein: $
                                                       ------------

                           (c)      Principal amount of Loans under the Working
                                    Capital/Distribution Subfacility available
                                    to be borrowed (prior to the following
                                    requested herein) (1(a) minus 1(b)):
                                    $
                                     -----------------

                  2.       Amount of Borrowing:  $
                                                  ---------------

                  3.       Requested date of Borrowing:               , 200  .
                                                         -------------     --

                  4.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for $                      .
                                                        ----------------------

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)     one month for      $
                                                                ---------------
                                    (ii)    two months for     $
                                                                ---------------
                                    (iii)   three months for   $
                                                                ---------------
                                    (iv)    six months for     $
                                                                ---------------

                  5.       Purpose of Loan:

                               Working Capital
                           ---
                               To fund Quarterly Distribution (SECTION 6.11(c)
                           --- (ii) of the Agreement)

                  6.       If the Loan is for the purpose of funding Quarterly
                           Distribution: Amount remaining undrawn under the
                           Working Capital/Distribution Subfacility after giving
                           effect to the Borrowing herein requested is:
                           $                  (must be not less than $9,000,000)
                            -----------------

II.      Term Loan Facility

                  1.       Amount of Borrowing:  $
                                                  ------------

                  2.       Requested date of Borrowing:                 , 200  .
                                                        ----------------     --

                  3.       Requested Type of Loan and applicable Dollar amount:



                                   Exhibit A-1
                                     Page 2
                            Form of Borrowing Notice


<PAGE>

                           (a)      Base Rate Loan for $                       .
                                                        -----------------------

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)     one month for      $
                                                                ---------------
                                    (ii)    two months for     $
                                                                ---------------
                                    (iii)   three months for   $
                                                                ---------------
                                    (iv)    six months for     $
                                                                ---------------

The undersigned hereby certifies that the following statements will be true on
the date of the proposed Borrowing(s) after giving effect thereto and to the
application of the proceeds therefrom:

                  (a) the representations and warranties of the Borrower
contained in ARTICLE V of the Agreement are true and correct as though made on
and as of such date (except such representations and warranties which expressly
refer to an earlier date, which are true and correct as of such earlier date);
and

                  (b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed Borrowing(s).

The Borrowing requested herein complies with SECTIONS 2.01, 2.02 and 2.03 of the
Agreement, as applicable.

                                  WILLIAMS OLP, L.P.

                                  By   Williams GP LLC, its
                                       General Partner

                                  By:
                                       ----------------------------------------
                                  Name:
                                         --------------------------------------
                                  Title:
                                          -------------------------------------



                                   Exhibit A-1
                                     Page 3
                            Form of Borrowing Notice


<PAGE>



                                                                     EXHIBIT C-1


                         FORM OF COMPLIANCE CERTIFICATE
                   (Pursuant to SECTION 6.02 of the Agreement)

         Financial Statement Date:  ___________, ____

To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of February 6, 2001
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the "AGREEMENT;" the terms defined therein being used herein
as therein defined), among Williams OLP, L.P., a Delaware limited partnership
(the "BORROWER"), the Lenders from time to time party thereto, Bank of America,
N.A., as Administrative Agent, Lehman Commercial Paper, Inc., as Syndication
Agent, and SunTrust Bank, as Documentation Agent. Capitalized terms used herein
but not defined herein shall have the meaning set forth in the Agreement.

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the _____________________________________________________________ of
the Borrower, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Administrative Agent on the behalf of the Borrower, and
that:

[Use following for fiscal year-end financial statements]

1. Attached hereto as SCHEDULE 1 are the year-end unaudited financial statements
required by SECTION 6.01(b) of the Agreement for the fiscal year of the Borrower
ended as of the above date. Such financial statements fairly present the
financial condition, results of operations and cash flows of the Borrower and
its Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

2. Attached hereto as SCHEDULE 2 are the year-end audited financial statements
required by SECTION 6.01(d) of the Agreement for the fiscal year of the MLP
ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.

[Use following for fiscal quarter-end financial statements]

1. Attached hereto as SCHEDULE 1 are the unaudited financial statements required
by SECTION 6.01(c) of the Agreement for the fiscal quarter of the Borrower ended
as of the above date. Such financial statements fairly present the financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

2. Attached hereto as SCHEDULE 3 are the unaudited financial statements required
by SECTION 6.01(d) of the Agreement for the fiscal quarter of the MLP ended as
of the above date, together with a certificate of a Responsible Officer of the
MLP stating that such financial statements fairly present the financial
condition, results of operations and cash flows of the MLP and its Subsidiaries
in accordance with GAAP



                                  Exhibit C-1
                                     Page 1
                         Form of Compliance Certificate
<PAGE>

as at such date and for such period, subject only to normal year-end audit
adjustments and the absence of footnotes.

[Use the following for both fiscal year-end and quarter-end financial
statements]

3. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of the
Borrower during the accounting period covered by the attached financial
statements.

4. A review of the activities of the Borrower during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such fiscal period the Borrower performed and observed all its
Obligations under the Loan Documents, and no Default or Event of Default has
occurred and is continuing except as follows (list of each such Default or Event
of Default and include the information required by SECTION 6.03 of the Credit
Agreement):

[                          ]

5. The covenant analyses and information set forth on SCHEDULE 2 attached hereto
are true and accurate on and as of the date of this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________, ________.

                                  WILLIAMS OLP, L.P.

                                  By:   Williams GP LLC, its
                                        General Partner

                                  By:
                                       ----------------------------------------
                                  Name:
                                         --------------------------------------
                                  Title:
                                          -------------------------------------

               For the Quarter/Year ended ___________________ ("STATEMENT DATE")



                                  Exhibit C-1
                                     Page 2
                         Form of Compliance Certificate

<PAGE>


                                   SCHEDULE 2
                          to the Compliance Certificate
                                  ($ in 000's)

<Table>
<S>      <C>      <C>                                                           <C>                <C>
I.       SECTION 2.01(a) - Acquisition Subfacility ($48,000,000)

         A.       Acquisition Subfacility Principal Debt on the first day of
                  the most recently ended fiscal quarter (the "SUBJECT
                  Quarter"):                                                                        $
                                                                                                     -----------

         B.       Borrowings under the Acquisition Subfacility during the
                  Subject Quarter (list each by the date and $ amount of the
                  Borrowing):                                                    Date               $Amount
                                                                                 ----                ------

         C.       Borrowings repaid under the Acquisition Subfacility during the
                  Subject Quarter (list each by the date and $ amount of the
                  repayment):                                                    Date               $Amount
                                                                                 ----                ------

         D.       Acquisition Subfacility Principal Debt on the last day of
                  the Subject Quarter:                                                              $
                                                                                                     -----------

         E.       On any day during the Subject Quarter, did the Acquisition
                  Subfacility Principal Debt exceed $48,000,000?
                                                                                                    YES/NO
II.      SECTION 2.01(b) - Working Capital/Distribution Subfacility
         ($12,000,000)

         A.       Working Capital/Distribution Subfacility Principal Debt on
                  the first day of the Subject Quarter:                                             $
                                                                                                     -----------

         B.       Borrowings under the Working Capital/Distribution Subfacility
                  to fund working capital requirements of the Borrower and its
                  Subsidiaries (list each by the date and $ amount of the
                  Borrowing):                                                    Date               $Amount
                                                                                 ----                ------

         C.       Borrowings under the Working Capital/Distribution Subfacility
                  to fund Quarterly Distributions (list each by the date and
                  $ amount of the Borrowing):                                    Date               $Amount
                                                                                 ----                ------

         D.       Borrowings repaid under the Working Capital/Distribution
                  Subfacility (list each by the date and $ amount of the
                  repayment):                                                    Date               $Amount
                                                                                 ----                ------
</Table>



                                  Exhibit C-1
                                     Page 3
                         Form of Compliance Certificate

<PAGE>

<Table>
<S>      <C>      <C>                                                           <C>                <C>
         E.       Working Capital/Distribution Subfacility Principal Debt on
                  the last day of the Subject Quarter:                                              $
                                                                                                     -----------

         F.       On any day during the Subject Quarter, did the Working
                  Capital/Distribution Subfacility Principal Debt exceed
                  $12,000,000?                                                                      YES/NO

         G.       On the date of each Borrowing under the Working
                  Capital/Distribution Subfacility (after giving effect to
                  such Borrowing), was the undrawn amount of Working
                  Capital/Distribution Subfacility Commitment $9,000,000 or
                  more?  (SECTION 2.01(b))                                                          YES/NO

III.     SECTION 6.13 - Clean Down Period for Working Capital/Distribution
         Subfacility

         A.       One clean down period of fifteen (15) consecutive days
                  during the twelve (12) month period beginning on the Initial
                  Funding Date, and for a period of fifteen (15) consecutive
                  days each twelve (12) month period thereafter is required.
                  For the current twelve (12) month period, describe the clean
                  down period (period of consecutive days (and dates) during
                  the current twelve (12) month period that the Working
                  Capital/Distribution Subfacility Principal Debt = $0.00):
                                                                                 # of Days          Dates
IV.      SECTION 7.03 - Indebtedness

         A.       Principal amount of purchase money indebtedness outstanding
                  (SECTION 7.03(c)):                                                                $
                                                                                                     -----------

                  Maximum permitted $5,000,000

         B.       Principal amount of unsecured Indebtedness and Synthetic
                  Leases permitted pursuant to SECTION 7.03(d):

                  1.       Amount of unsecured Indebtedness:                                        $
                                                                                                     -----------

                  2.       Amount of Synthetic Leases:                                              $
                                                                                                     -----------

                  3.       Aggregate amount of unsecured Indebtedness and
                           Synthetic Leases under SECTION 7.03(d) (IV.B.1 +
                           IV.B.2):                                                                 $
                                                                                                     -----------

                  Maximum permitted: $75,000,000.
</Table>



                                  Exhibit C-1
                                     Page 4
                         Form of Compliance Certificate

<PAGE>

<Table>
<S>      <C>      <C>                                                           <C>                <C>
         C.       Principal amount of Permitted Affiliated Subordinated Debt
                  outstanding (SECTION 7.03(e)):                                                    $
                                                                                                     -----------

                  Maximum permitted:  $50,000,000

V.       SECTION 7.14(a) - Interest Coverage Ratio.

         A.       Consolidated EBITDA for the relevant period (as specified in
                  the definition of "Interest Coverage Ratio") ending on above
                  date ("SUBJECT PERIOD"):

                  1.       Consolidated Net Income for Subject Period:                              $
                                                                                                     -----------

                  2.       Consolidated Interest Charges for Subject Period:                        $
                                                                                                     -----------

                  3.       Provision for income taxes for Subject Period:                           $
                                                                                                     -----------

                  4.       Depreciation expenses for Subject Period:                                $
                                                                                                     -----------

                  5.       Amortization expenses for intangibles for Subject
                           Period:                                                                  $
                                                                                                     -----------

                  6.       Consolidated EBITDA (prior to pro forma adjustments
                           for Asset Acquisitions pursuant to SECTION
                           7.14(c)(i)) (Lines V.A.1 + 2 + 3 + 4 + 5):                               $
                                                                                                     -----------

                  7.       Pro forma adjustments to EBITDA for Asset
                           Acquisitions during the Subject Period (SECTION
                           7.14(c)(i)), giving effect to such Asset Acquisitions
                           on a pro forma basis for the Subject Period as if
                           such Asset Acquisitions occurred on the first day of
                           the Subject Period:                                                      $
                                                                                                     -----------

                  8.       Consolidated EBITDA, including pro forma
                           adjustments for Asset Acquisitions (Lines V.A.6 +
                           V.A.7):                                                                  $
                                                                                                     -----------

         B.       Consolidated Interest Charges for Subject Period:

                  1.       Consolidated Interest Charges for the Subject
                           Period:                                                                  $
                                                                                                     ----------
</Table>



                                  Exhibit C-1
                                     Page 5
                         Form of Compliance Certificate

<PAGE>

<Table>
<S>      <C>      <C>                                                           <C>                <C>
                  2.       Pro forma adjustment for the Subject Period:                             $
                                                                                                     ----------

                  3.       Consolidated Interest Charges, including pro forma
                           adjustments (Lines V.B.1 + V.B.2):                                       $
                                                                                                     ----------

         C.       Consolidated Lease and Rental Expense for Subject Period:

                  1.       Consolidated Lease and Rental Expense for the
                           Subject Period:                                                          $
                                                                                                     ----------

                  2.       Pro forma adjustment for Consolidated Lease and
                           Rental Expense during the Subject Period:                                $
                                                                                                     ----------

                  3.       Consolidated Lease and Rental Expense, including
                           pro forma adjustments (Lines V.C.1 + V.C.2):                             $
                                                                                                     ----------

         D.       Interest Coverage Ratio:

                  1.       Consolidated EBITDA adjusted for Asset Acquisitions
                           (Line V.A.8):                                                            $
                                                                                                     ----------

                  2.       Consolidated Interest Charges adjusted for Asset
                           Acquisitions (Line V.B.3):                                               $
                                                                                                     ----------

                  3.       Consolidated Lease and Rental Expense, including pro
                           forma adjustments (Line V.C.3):                                          $
                                                                                                     ----------

                  4.       Interest Coverage Ratio (Line V.D.1 + Line V.D.3))
                           (Line V.D.2 + Line V.D.3):                                                     to 1.0
                                                                                                    -----

                  Minimum required: 3.0:1.0

VI.      SECTION 7.14(b) - Leverage Ratio

         A.       Consolidated Total Debt:                                                          $
                                                                                                     ----------

         B.       Permitted Affiliate Subordinated Debt:                                            $
                                                                                                     ----------

         C.       Consolidated Total Debt excluding Permitted Affiliate
                  Subordinated Debt (Line VI.A minus Line VI.B):                                    $
                                                                                                     ----------
</Table>



                                  Exhibit C-1
                                     Page 6
                         Form of Compliance Certificate

<PAGE>

<Table>
<S>      <C>      <C>                                                           <C>                <C>
         D.       Consolidated EBITDA (including pro forma adjustments for
                  Asset Acquisitions) (Line V.A.8 above):                                           $
                                                                                                     ----------

         E.       Leverage Ratio (Line VI.C / Line VI.D):

                  Maximum permitted: 4.0:1.0                                                             to 1.0
                                                                                                    -----
</Table>



                                  Exhibit C-1
                                     Page 7
                         Form of Compliance Certificate
<PAGE>

                      SECOND AMENDMENT TO CREDIT AGREEMENT


         THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is entered
into as of July 31, 2001, among WILLIAMS OLP, L.P., a Delaware limited
partnership ("BORROWER"), the undersigned Guarantors ("GUARANTORS"), BANK OF
AMERICA, N.A., as Administrative Agent (the "ADMINISTRATIVE AGENT") for the
Lenders under the Credit Agreement hereinafter referenced, and the Lenders (as
defined in the Credit Agreement) party hereto.

         Reference is made to the Credit Agreement dated as of February 6, 2001
(the "CREDIT AGREEMENT") among Borrower, Administrative Agent, Lehman Commercial
Paper, Inc., as Syndication Agent, SunTrust Bank as Documentation Agent, and the
Lenders party thereto, as amended by that certain First Amendment to Credit
Agreement dated as of July 31, 2001. Unless otherwise defined in this Amendment,
capitalized terms used herein shall have the meaning set forth in the Credit
Agreement; all Section and Schedule references herein are to Sections and
Schedules in the Credit Agreement; and all Paragraph references herein are to
Paragraphs in this Amendment.

                                    RECITALS

         A. Borrower has requested that the Lenders agree to amend certain
provisions of the Credit Agreement, as herein set forth, in order to increase
the Revolver Commitment by increasing the Acquisition Subfacility Commitment by
$25,000,000.

         B. Additionally, Borrower has requested a modification of the
definition of Consolidated Net Income which would cap general and administrative
expenses at $1,500,000 for each quarter prior to the second quarter of 2001 for
purposes of calculating the Interest Coverage Ratio, the Leverage Ratio and the
Applicable Rate.

         C. Subject to the terms and conditions of this Amendment, the Lenders
are willing to agree to such amendments.

         Accordingly, for adequate and sufficient consideration, the parties
hereto agree, as follows:

         PARAGRAPH 1. AMENDMENTS.

         1.1 DEFINITIONS.

         (a) The definition of "ACQUISITION SUBFACILITY COMMITMENT" is amended
in its entirety to read as follows:

                  "ACQUISITION SUBFACILITY COMMITMENT means an amount (subject
                  to reduction or cancellation as herein provided) equal to
                  $73,000,000.00."

         (b) The definition of "CONSOLIDATED NET INCOME" is amended to add the
following language to the end of such definition:

                  "For purposes of determining compliance with SECTIONS 7.14(a)
                  and 7.14(b) and for purposes of determining the Applicable
                  Rate, Consolidated Net Income for each of the fiscal quarters
                  ending on or prior to March 31, 2001 shall not include G&A
                  Expenses in excess of



                                        1  SECOND AMENDMENT TO CREDIT AGREEMENT
<PAGE>

                  $1,500,000 for such quarter. "G&A EXPENSES" shall mean general
                  and administrative expenses required to be reimbursed by
                  Borrower to TWC pursuant to the Omnibus Agreement."

         1.2 SCHEDULE 2.01. SCHEDULE 2.01 is hereby deleted in its entirety and
SCHEDULE 2.01 attached hereto is substituted in lieu thereof.

         1.3 EXHIBITS.

                  (a) EXHIBIT A-1 is hereby deleted in its entirety and EXHIBIT
         A-1 attached hereto is substituted in lieu thereof.

                  (b) EXHIBIT C-1 is hereby deleted in its entirety and EXHIBIT
         C-1 attached hereto is substituted in lieu thereof.

         PARAGRAPH 2. EFFECTIVE DATE. Notwithstanding any contrary provision,
this Amendment is not effective until the date (the "EFFECTIVE DATE") (a) the
Administrative Agent shall have received counterparts of this Amendment,
executed by Borrower, Guarantors and each of the Lenders, and (b) Borrower shall
have paid to the Administrative Agent for the account of each Lender an
amendment fee equal to 25 basis points times the amount of the increase in such
Lender's Commitment reflected in SCHEDULE 2.01 attached hereto.

         PARAGRAPH 3. ACKNOWLEDGMENT AND RATIFICATION. As a material inducement
to the Administrative Agent and the Lenders to execute and deliver this
Amendment, Borrower and each Guarantor (a) consent to the agreements in this
Amendment and (b) agree and acknowledge that the execution, delivery, and
performance of this Amendment shall in no way release, diminish, impair, reduce,
or otherwise affect the respective obligations of Borrower or any Guarantor
under the Loan Documents to which it is a party, which Loan Documents shall
remain in full force and effect, and all guaranties and Rights thereunder are
hereby ratified and confirmed.

         PARAGRAPH 4. REPRESENTATIONS. As a material inducement to the
Administrative Agent and the Lenders to execute and deliver this Amendment,
Borrower and each Guarantor represent and warrant to the Administrative Agent
and the Lenders that as of the Effective Date of this Amendment and as of the
date of execution of this Amendment, (a) all representations and warranties in
the Loan Documents are true and correct in all material respects as though made
on the date hereof, except to the extent that any of them speak to a different
specific date, and (b) no Default or Event of Default exists.

         PARAGRAPH 5. EXPENSES. Borrower shall pay all reasonable costs, fees,
and expenses paid or incurred by Administrative Agent incident to this
Amendment, including, without limitation, the fees and expenses of
Administrative Agent's counsel in connection with the negotiation, preparation,
delivery, and execution of this Amendment and any related documents.

         PARAGRAPH 6. MISCELLANEOUS. This Amendment is a "Loan Document"
referred to in the Credit Agreement. The provisions relating to Loan Documents
in ARTICLE 10 of the Credit Agreement are incorporated in this Amendment by
reference. Unless stated otherwise (a) the singular number includes the plural
and vice versa and words of any gender include each other gender, in each case,
as appropriate, (b) headings and captions may not be construed in interpreting
provisions, (c) this Amendment must be construed, and its performance enforced,
under New York law, (d) if any part of this Amendment is for any reason found to
be unenforceable, all other portions of it nevertheless remain enforceable, and
(e) this



                                        2  SECOND AMENDMENT TO CREDIT AGREEMENT


<PAGE>

Amendment may be executed in any number of counterparts with the same effect as
if all signatories had signed the same document, and all of those counterparts
must be construed together to constitute the same document.

         PARAGRAPH 7. ENTIRE AGREEMENT. THIS AMENDMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THIS AMENDMENT AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

         PARAGRAPH 8. PARTIES. This Amendment binds and inures to the benefit of
Borrower, Guarantors, Administrative Agent, the Lenders, and their respective
successors and assigns.

         PARAGRAPH 9. FURTHER ASSURANCES. The parties hereto each agree to
execute from time to time such further documents as may be necessary to
implement the terms of this Agreement.

         The parties hereto have executed this Amendment in multiple
counterparts to be effective as of the Effective Date.

        REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURE PAGES TO FOLLOW.



                                        3  SECOND AMENDMENT TO CREDIT AGREEMENT
<PAGE>


                             BORROWER:

                             WILLIAMS OLP, L.P.

                             By:  WILLIAMS GP LLC, its
                                  General Partner


                                  By:    /s/ Don R. Wellendorf
                                     ------------------------------------------
                                  Name:      Don R. Wellendorf
                                       ----------------------------------------
                                  Title:     Vice President
                                        ---------------------------------------
                                               Strategic Development & Planning
                                        ---------------------------------------



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]


<PAGE>



                                GUARANTORS:

                                WILLIAMS NGL, LLC


                                By:      /s/ Don R. Wellendorf
                                   --------------------------------------------
                                Name:        Don R. Wellendorf
                                     ------------------------------------------
                                Title:       Vice President
                                      -----------------------------------------
                                               Strategic Development & Planning
                                      -----------------------------------------



                                WILLIAMS TERMINALS HOLDING L.P.


                                By:  WILLIAMS NGL, LLC, its
                                     General Partner


                                By:      /s/ Don R. Wellendorf
                                   --------------------------------------------
                                Name:        Don R. Wellendorf
                                     ------------------------------------------
                                Title:       Vice President
                                      -----------------------------------------
                                               Strategic Development & Planning
                                      -----------------------------------------



                                WILLIAMS PIPELINES HOLDINGS L.P.


                                By:  WILLIAMS NGL, LLC, its
                                     General Partner


                                By:      /s/ Don R. Wellendorf
                                   --------------------------------------------
                                Name:        Don R. Wellendorf
                                     ------------------------------------------
                                Title:       Vice President
                                      -----------------------------------------
                                               Strategic Development & Planning
                                      -----------------------------------------



                                WILLIAMS AMMONIA PIPELINE L.P.


                                By:  WILLIAMS NGL, LLC, its
                                     General Partner

                                By:      /s/ Don R. Wellendorf
                                   --------------------------------------------
                                Name:        Don R. Wellendorf
                                     ------------------------------------------
                                Title:       Vice President
                                      -----------------------------------------
                                               Strategic Development & Planning
                                      -----------------------------------------



                                BANK OF AMERICA, N.A., as Administrative Agent
                                and as a Lender


                                By:   /s/ Claire M. Liu
                                   --------------------------------------------
                                   Claire M. Liu
                                   Managing Director



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]

<PAGE>



                                LEHMAN COMMERCIAL PAPER, INC.


                                     By:     /s/ Michele Swanson
                                        ---------------------------------------
                                     Name:       Michele Swanson
                                          -------------------------------------
                                     Title:      Authorized Signatory
                                           ------------------------------------



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]


<PAGE>



                                SUNTRUST BANK


                                     By:     /s/ David J. Edge
                                        ---------------------------------------
                                     Name:       David J. Edge
                                          -------------------------------------
                                     Title:      Director
                                           ------------------------------------



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]

<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
                                           ------------------------------------



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]

<PAGE>


                                NATIONAL WESTMINSTER BANK PLC,
                                NEW YORK BRANCH


                                     By:      /s/ Scott Barton
                                        ---------------------------------------
                                     Name:        Scott Barton
                                          -------------------------------------
                                     Title:       Sr. Vice President
                                           ------------------------------------



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]

<PAGE>



                                BANK ONE, NA


                                     By:    /s/ Dianne L. Russell
                                        ---------------------------------------
                                     Name:      Dianne L. Russell
                                          -------------------------------------
                                     Title:     Vice President
                                           ------------------------------------



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]

<PAGE>



                                BARCLAYS BANK PLC


                                     By:      /s/ Nicholas A. Bell
                                        ---------------------------------------
                                     Name:        Nicholas A. Bell
                                          -------------------------------------
                                     Title:       Director
                                           ------------------------------------



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]

<PAGE>


                                BAYERISCHE LANDESBANK GIROZENTRALE,
                                CAYMAN ISLANDS BRANCH


                                     By:     /s/ Hereward Drummond
                                        ---------------------------------------
                                     Name:       Hereward Drummond
                                          -------------------------------------
                                     Title:      Senior Vice President
                                           ------------------------------------


                                     By:     /s/ James Fox
                                        ---------------------------------------
                                     Name:       James Fox
                                          -------------------------------------
                                     Title:      Vice President
                                           ------------------------------------



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]
<PAGE>


                                NATEXIS BANQUES POPULAIRES


                                     By:     /s/ Daniel Payer
                                        ---------------------------------------
                                     Name:       Daniel Payer
                                          -------------------------------------
                                     Title:      Vice President
                                           ------------------------------------


                                     By:     /s/ Louis P. Laville, III
                                        ---------------------------------------
                                     Name:       Louis P. Laville, III
                                          -------------------------------------
                                     Title:      Group Manager
                                           ------------------------------------



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]
<PAGE>


                                UBS AG, STAMFORD BRANCH


                                     By:    /s/ Wilfred V. Saint
                                        ---------------------------------------
                                     Name:      Wilfred V. Saint
                                          -------------------------------------
                                     Title:     Associate Director, Banking
                                           ------------------------------------
                                                  Products Services, US
                                           ------------------------------------



                                            /s/ Lynne B. Alfarone
                                           ------------------------------------
                                                Lynne B. Alfarone
                                           ------------------------------------
                                                Associate Director, Banking
                                           ------------------------------------
                                                  Products Services, US
                                           ------------------------------------



            [SIGNATURE PAGE TO SECOND AMENDMENT TO CREDIT AGREEMENT]

<PAGE>


                                  SCHEDULE 2.01

                                   COMMITMENTS


<Table>
<Caption>
              LENDER                                      REVOLVING FACILITY                                TERM LOAN FACILITY
              ------                    -------------------------------------------------------             ------------------
                                                                           Working Capital/
                                        Acquisition Subfacility        Distribution Subfacility
                                        -----------------------        ------------------------

<S>                                     <C>                            <C>                                 <C>
Bank of America                              $9,800,000.00                   $1,200,000.00                     $9,000,000.00

Lehman Commercial Paper, Inc.                $7,300,000.00                   $1,200,000.00                     $9,000,000.00

SunTrust Bank                                $8,100,000.00                   $1,400,000.00                    $10,500,000.00

ABN AMRO Bank, N.V.                          $8,100,000.00                   $1,400,000.00                    $10,500,000.00

National Westminster Bank Plc                $8,100,000.00                   $1,400,000.00                    $10,500,000.00

Bank One, NA                                 $7,300,000.00                   $1,200,000.00                     $9,000,000.00

Barclays Bank Plc                            $4,800,000.00                   $1,200,000.00                     $9,000,000.00

Bayerische Landesbank Girozentrale           $7,300,000.00                   $1,200,000.00                     $9,000,000.00

UBS AG, Stamford Branch                      $6,500,000.00                   $1,000,000.00                     $7,500,000.00

Natexis Banques Populaires                   $5,700,000.00                   $ 800,000.00                      $6,000,000.00


              Total:                          $73,000,000                     $12,000,000                       $90,000,000
</Table>



                                                                   SCHEDULE 2.01

<PAGE>

                                                                     EXHIBIT A-1



                            FORM OF BORROWING NOTICE

                                                       Date:             ,
                                                              -----------  -----

To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of February 6, 2001
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the "AGREEMENT;" the terms defined therein being used herein
as therein defined), among Williams OLP, L.P., a Delaware limited partnership
(the "BORROWER"), the Lenders from time to time party thereto, Bank of America,
N.A., as Administrative Agent, Lehman Commercial Paper, Inc., as Syndication
Agent, and SunTrust Bank, as Documentation Agent.

The undersigned hereby requests (select one):

I.       REVOLVER FACILITY

         A.       Acquisition Subfacility

                  1.       Status Information for the Acquisition Subfacility

                           (a)      Amount of the Acquisition Subfacility:
                                    $73,000,000

                           (b)      Acquisition Subfacility Principal Debt prior
                                    to the Borrowing requested herein:
                                    $
                                     -----------------

                           (c)      Principal amount of Loans under the
                                    Acquisition Subfacility available to be
                                    borrowed: $
                                                ----------------

                  2.       Amount of Borrowing: $
                                                 ---------------

                  3.       Requested date of Borrowing:                 , 200  .
                                                        ----------------     --

                  4.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for $                      .
                                                        ----------------------

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)     one month for      $
                                                                ---------------
                                    (ii)    two months for     $
                                                                ---------------
                                    (iii)   three months for   $
                                                                ---------------
                                    (iv)    six months for     $
                                                                ---------------



                                   Exhibit A-1
                                     Page 1
                            Form of Borrowing Notice


<PAGE>

B.       Working Capital/Distribution Subfacility

                  1.       Status Information for the Working
                           Capital/Distribution Subfacility

                           (a)      Amount of the Working Capital/Distribution
                                    Subfacility: $12,000,000

                           (b)      Working Capital/Distribution Subfacility
                                    Principal Debt prior to the Borrowing
                                    requested herein: $
                                                       -------------

                           (c)      Principal amount of Loans under the Working
                                    Capital/Distribution Subfacility available
                                    to be borrowed (prior to the following
                                    requested herein) (1(a) minus 1(b)):
                                    $
                                     --------------

                  2.       Amount of Borrowing:  $
                                                  ----------------

                  3.       Requested date of Borrowing:                , 200  .
                                                         --------------     --

                  4.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for $                     .
                                                        ---------------------

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)     one month for      $
                                                                ---------------
                                    (ii)    two months for     $
                                                                ---------------
                                    (iii)   three months for   $
                                                                ---------------
                                    (iv)    six months for     $
                                                                ---------------

                  5.       Purpose of Loan:

                               Working Capital
                           ---
                               To fund Quarterly Distribution (SECTION 6.11(c)
                           --- (ii) of the Agreement)

                  6.       If the Loan is for the purpose of funding Quarterly
                           Distribution: Amount remaining undrawn under the
                           Working Capital/Distribution Subfacility after giving
                           effect to the Borrowing herein requested is:
                           $
                            -----------------
                           (must be not less than $9,000,000)

II.      Term Loan Facility

                  1.       Amount of Borrowing:  $
                                                  -------------

                  2.       Requested date of Borrowing:                , 200  .
                                                        ---------------     --

                  3.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for $                      .
                                                        ----------------------


                                  Exhibit A-1
                                     Page 2
                            Form of Borrowing Notice
<PAGE>
                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)     one month for      $
                                                                ---------------
                                    (ii)    two months for     $
                                                                ---------------
                                    (iii)   three months for   $
                                                                ---------------
                                    (iv)    six months for     $
                                                                ---------------

The undersigned hereby certifies that the following statements will be true on
the date of the proposed Borrowing(s) after giving effect thereto and to the
application of the proceeds therefrom:

                  (a) the representations and warranties of the Borrower
contained in ARTICLE V of the Agreement are true and correct as though made on
and as of such date (except such representations and warranties which expressly
refer to an earlier date, which are true and correct as of such earlier date);
and

                  (b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed Borrowing(s).

The Borrowing requested herein complies with SECTIONS 2.01, 2.02 and 2.03 of the
Agreement, as applicable.

                              WILLIAMS OLP, L.P.

                              By   Williams GP LLC, its
                                   General Partner

                              By:
                                   --------------------------------------------
                              Name:
                                     ------------------------------------------
                              Title:
                                      -----------------------------------------



                                  Exhibit A-1
                                     Page 3
                            Form of Borrowing Notice
<PAGE>

                                                                     EXHIBIT C-1


                         FORM OF COMPLIANCE CERTIFICATE
                   (Pursuant to SECTION 6.02 of the Agreement)

         Financial Statement Date:             ,
                                    -----------  ----

To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of February 6, 2001
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the "AGREEMENT;" the terms defined therein being used herein
as therein defined), among Williams OLP, L.P., a Delaware limited partnership
(the "BORROWER"), the Lenders from time to time party thereto, Bank of America,
N.A., as Administrative Agent, Lehman Commercial Paper, Inc., as Syndication
Agent, and SunTrust Bank, as Documentation Agent. Capitalized terms used herein
but not defined herein shall have the meaning set forth in the Agreement.

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the _________________________________________________________________
of the Borrower, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Administrative Agent on the behalf of the Borrower, and
that:

[Use following for fiscal year-end financial statements]

1. Attached hereto as SCHEDULE 1 are the year-end unaudited financial statements
required by SECTION 6.01(b) of the Agreement for the fiscal year of the Borrower
ended as of the above date. Such financial statements fairly present the
financial condition, results of operations and cash flows of the Borrower and
its Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

2. Attached hereto as SCHEDULE 2 are the year-end audited financial statements
required by SECTION 6.01(d) of the Agreement for the fiscal year of the MLP
ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.

[Use following for fiscal quarter-end financial statements]

1. Attached hereto as SCHEDULE 1 are the unaudited financial statements required
by SECTION 6.01(c) of the Agreement for the fiscal quarter of the Borrower ended
as of the above date. Such financial statements fairly present the financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

2. Attached hereto as SCHEDULE 3 are the unaudited financial statements required
by SECTION 6.01(d) of the Agreement for the fiscal quarter of the MLP ended as
of the above date, together with a certificate of a Responsible Officer of the
MLP stating that such financial statements fairly present the financial
condition, results of operations and cash flows of the MLP and its Subsidiaries
in accordance with GAAP as at such date and for such period, subject only to
normal year-end audit adjustments and the absence of footnotes.



                                  Exhibit C-1
                                     Page 1
                         Form of Compliance Certificate
<PAGE>

[Use the following for both fiscal year-end and quarter-end financial
statements]

3. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of the
Borrower during the accounting period covered by the attached financial
statements.

4. A review of the activities of the Borrower during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such fiscal period the Borrower performed and observed all its
Obligations under the Loan Documents, and no Default or Event of Default has
occurred and is continuing except as follows (list of each such Default or Event
of Default and include the information required by SECTION 6.03 of the Credit
Agreement):

[                          ]

5. The covenant analyses and information set forth on SCHEDULE 2 attached hereto
are true and accurate on and as of the date of this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as
of ______________, ________.

                             WILLIAMS OLP, L.P.

                             By:   Williams GP LLC, its
                                   General Partner

                             By:
                                  ---------------------------------------------
                             Name:
                                    -------------------------------------------
                             Title:
                                     ------------------------------------------

                For the Quarter/Year ended ___________________("STATEMENT DATE")



                                  Exhibit C-1
                                     Page 2
                         Form of Compliance Certificate
<PAGE>


                                   SCHEDULE 2
                          to the Compliance Certificate
                                  ($ in 000's)


<Table>
<S>     <C>       <C>                                                           <C>                 <C>
I.       SECTION 2.01(a) - Acquisition Subfacility ($73,000,000)

         A.       Acquisition Subfacility Principal Debt on the first day of
                  the most recently ended fiscal quarter (the "SUBJECT
                  QUARTER"):                                                                        $
                                                                                                     ----------

         B.       Borrowings under the Acquisition Subfacility during the
                  Subject Quarter (list each by the date and $ amount of the
                  Borrowing):                                                    Date               $Amount
                                                                                 ----                ------

         C.       Borrowings repaid under the Acquisition Subfacility during
                  the Subject Quarter (list each by the date and $ amount of
                  the repayment):                                                Date               $Amount
                                                                                 ----                ------

         D.       Acquisition Subfacility Principal Debt on the last day of
                  the Subject Quarter:                                                              $
                                                                                                     ----------

         E.       On any day during the Subject Quarter, did the Acquisition
                  Subfacility Principal Debt exceed $73,000,000?
                                                                                                    YES/NO
II.      SECTION 2.01(b) - Working Capital/Distribution Subfacility
         ($12,000,000)

         A.       Working Capital/Distribution Subfacility Principal Debt on
                  the first day of the Subject Quarter:                                             $
                                                                                                     ----------

         B.       Borrowings under the Working Capital/Distribution Subfacility
                  to fund working capital requirements of the Borrower and its
                  Subsidiaries (list each by the date and $ amount of the
                  Borrowing):                                                    Date               $Amount
                                                                                 ----                ------

         C.       Borrowings under the Working Capital/Distribution Subfacility
                  to fund Quarterly Distributions (list each by the date and
                  $ amount of the Borrowing):                                    Date               $Amount
                                                                                 ----                ------

         D.       Borrowings repaid under the Working Capital/Distribution
                  Subfacility (list each by the date and $ amount of the
                  repayment):                                                    Date               $Amount
                                                                                 ----                ------
</Table>



                                  Exhibit C-1
                                     Page 3
                         Form of Compliance Certificate

<PAGE>

<Table>
<S>     <C>       <C>                                                           <C>                 <C>
         E.       Working Capital/Distribution Subfacility Principal Debt on
                  the last day of the Subject Quarter:                                              $
                                                                                                     ----------

         F.       On any day during the Subject Quarter, did the Working
                  Capital/Distribution Subfacility Principal Debt exceed
                  $12,000,000?                                                                      YES/NO

         G.       On the date of each Borrowing under the Working
                  Capital/Distribution Subfacility (after giving effect to
                  such Borrowing), was the undrawn amount of Working
                  Capital/Distribution Subfacility Commitment $9,000,000 or
                  more?  (SECTION 2.01(b))                                                          YES/NO

III.     SECTION 6.13 - Clean Down Period for Working Capital/Distribution
         Subfacility

         A.       One clean down period of fifteen (15) consecutive days
                  during the twelve (12) month period beginning on the Initial
                  Funding Date, and for a period of fifteen (15) consecutive
                  days each twelve (12) month period thereafter is required.
                  For the current twelve (12) month period, describe the clean
                  down period (period of consecutive days (and dates) during
                  the current twelve (12) month period that the Working
                  Capital/Distribution Subfacility Principal Debt = $0.00):
                                                                                 # of Days          Dates
IV.      SECTION 7.03 - Indebtedness

         A.       Principal amount of purchase money indebtedness outstanding
                  (SECTION 7.03(c)):                                                                $
                                                                                                     ----------

                  Maximum permitted $5,000,000

         B.       Principal amount of unsecured Indebtedness and Synthetic
                  Leases permitted pursuant to SECTION 7.03(d):

                  1.       Amount of unsecured Indebtedness:                                        $
                                                                                                     ----------

                  2.       Amount of Synthetic Leases:                                              $
                                                                                                     ----------

                  3.       Aggregate amount of unsecured Indebtedness and
                           Synthetic Leases under SECTION 7.03(d) (IV.B.1 +
                           IV.B.2):                                                                 $
                                                                                                     ----------

                  Maximum permitted: $75,000,000.
</Table>




                                  Exhibit C-1
                                     Page 4
                         Form of Compliance Certificate

<PAGE>

<Table>
<S>     <C>       <C>                                                           <C>                 <C>
         C.       Principal amount of Permitted Affiliated Subordinated Debt
                  outstanding (SECTION 7.03(e)):                                                    $
                                                                                                     ----------

                  Maximum permitted:  $50,000,000

V.       SECTION 7.14(a) - Interest Coverage Ratio.

         A.       Consolidated EBITDA for the relevant period (as specified in
                  the definition of "Interest Coverage Ratio") ending on above
                  date ("SUBJECT PERIOD"):

                  1.       Consolidated Net Income for Subject Period:                              $
                                                                                                     ----------

                  2.       Consolidated Interest Charges for Subject Period:                        $
                                                                                                     ----------

                  3.       Provision for income taxes for Subject Period:                           $
                                                                                                     ----------

                  4.       Depreciation expenses for Subject Period:                                $
                                                                                                     ----------

                  5.       Amortization expenses for intangibles for Subject
                           Period:                                                                  $
                                                                                                     ----------

                  6.       Consolidated EBITDA (prior to pro forma adjustments
                           for Asset Acquisitions pursuant to SECTION
                           7.14(c)(i)) (Lines V.A.1 + 2 + 3 + 4 + 5):                               $
                                                                                                     ----------

                  7.       Pro forma adjustments to EBITDA for Asset
                           Acquisitions during the Subject Period (SECTION
                           7.14(c)(i)), giving effect to such Asset Acquisitions
                           on a pro forma basis for the Subject Period as if
                           such Asset Acquisitions occurred on the first day of
                           the Subject Period:                                                      $
                                                                                                     ----------
                  8.       Consolidated EBITDA, including pro forma
                           adjustments for Asset Acquisitions (Lines V.A.6 +
                           V.A.7):                                                                  $
                                                                                                     ----------

         B.       Consolidated Interest Charges for Subject Period:

                  1.       Consolidated Interest Charges for the Subject
                           Period:                                                                  $
                                                                                                     ----------

                  2.       Pro forma adjustment for Interest Charges during
                           the Subject Period:                                                      $
                                                                                                     ----------
</Table>



                                  Exhibit C-1
                                     Page 5
                         Form of Compliance Certificate
<PAGE>

<Table>
<S>     <C>       <C>                                                           <C>                 <C>

                  3.       Consolidated Interest Charges, including pro forma
                           adjustments (Lines V.B.1 + V.B.2):                                       $
                                                                                                     ----------

         C.       Consolidated Lease and Rental Expense for Subject Period:

                  1.       Consolidated Lease and Rental Expense for the
                           Subject Period:                                                          $
                                                                                                     ----------

                  2.       Pro forma adjustment for Consolidated Lease and
                           Rental Expense during the Subject Period:                                $
                                                                                                     ----------

                  3.       Consolidated Lease and Rental Expense, including
                           pro forma adjustments (Lines V.C.1 + V.C.2):                             $
                                                                                                     ----------

         D.       Interest Coverage Ratio:

                  1.       Consolidated EBITDA adjusted for Asset Acquisitions
                           (Line V.A.8):                                                            $
                                                                                                     ----------

                  2.       Consolidated Interest Charges adjusted for Asset
                           Acquisitions (Line V.B.3):                                               $
                                                                                                     ----------

                  3.       Consolidated Lease and Rental Expense, including pro
                           forma adjustments (Line V.C.3):                                          $
                                                                                                     ----------

                  4.       Interest Coverage Ratio (Line V.D.1 + Line V.D.3))
                           (Line V.D.2 + Line V.D.3):                                                     to 1.0
                                                                                                    -----

                  Minimum required: 3.0:1.0

VI.      SECTION 7.14(b) - Leverage Ratio

         A.       Consolidated Total Debt:                                                          $
                                                                                                     ----------

         B.       Permitted Affiliate Subordinated Debt:                                            $
                                                                                                     ----------

         C.       Consolidated Total Debt excluding Permitted Affiliate
                  Subordinated Debt (Line VI.A minus Line VI.B):                                    $
                                                                                                     ----------

         D.       Consolidated EBITDA (including pro forma adjustments for
                  Asset Acquisitions) (Line V.A.8 above):                                           $
                                                                                                     ----------

         E.       Leverage Ratio (Line VI.C / Line VI.D):                                                to 1.0
                                                                                                    -----
                  Maximum permitted: 4.0:1.0
</Table>



                                  Exhibit C-1
                                     Page 6
                         Form of Compliance Certificate


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(B)
<SEQUENCE>7
<FILENAME>d94597ex10-b.txt
<DESCRIPTION>CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT
<TEXT>
<PAGE>
                                                                  EXHIBIT 10(b)



                CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

         THIS CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT, dated as of
February 9, 2001, is entered into by and among Williams Energy Partners L.P., a
Delaware limited partnership (the "MLP"); Williams OLP, L.P., a Delaware limited
partnership (the "OLP"); Williams GP LLC, a Delaware limited liability company
("GP LLC"); Williams Energy Services, LLC, a Delaware limited liability company
("WES"); Williams Natural Gas Liquids, Inc., a Delaware corporation ("WNGL");
Williams NGL, LLC, a Delaware limited liability company ("WNGL LLC"); Williams
Terminals Holdings, L.P., a Delaware limited partnership ("Terminals LP");
Williams Terminals Holdings, L.L.C., a Delaware limited liability company ("WTH
LLC"); Williams Ammonia Pipeline, L.P., a Delaware limited partnership ("WAP
LP"); and Williams Bio-Energy, LLC ("WBE LLC"), a Delaware limited liability
company.

                                    RECITALS

               WHEREAS, WES and GP LLC have formed the MLP pursuant to the
Delaware Revised Uniform Limited Partnership Act (the "Delaware Act"), for the
purpose of acquiring, owning and operating the assets of Williams Energy
Ventures, Inc., a Delaware corporation ("WEV"), and certain subsidiaries of WEV
and WNGL used in storage, transportation and distribution of refined petroleum
products and ammonia except for the Excluded Assets, as hereinafter defined;

               WHEREAS, in order to accomplish the objectives and purposes in
the preceding recital, the following actions have been taken prior to the date
hereof:

         1. WES has formed GP LLC and contributed $1,000 in exchange for all of
         the membership interests in GP LLC;

         2. WES and GP LLC have formed the MLP to which WES contributed $990 in
         exchange for a 99% limited partner interest, and GP LLC contributed $10
         in exchange for a 1% general partner interest in the MLP;

         3. GP LLC and the MLP have formed the OLP to which GP LLC contributed
         $10.10 in exchange for a 1.0101% general partner interest and the MLP
         contributed $989.90 in exchange for a 98.9899% limited partner interest
         in the OLP;

         4. WEV has formed WBE LLC and contributed $1,000 in exchange for all of
         the membership interests in WBE LLC; and

         5. WNGL has formed WNGL LLC and contributed $1,000 in exchange for all
         of the membership interests in WNGL LLC;

               WHEREAS, concurrently with the consummation of the transactions
contemplated hereby, each of the following matters shall occur:

         1. WES will contribute 1% of the stock of WEV to GP LLC as a capital
         contribution and WEV will file articles of conversion to convert itself
         into Terminals LP designating GP LLC as the 1% general partner and WES
         as the 99% limited partner.




                                      -1-
<PAGE>

         2. Terminals LP will contribute the Excluded Assets to WBE LLC and WBE
         LLC will assume all liabilities associated with such assets.

         3. Terminals LP will distribute 99% of its interest in WBE LLC to WES
         and 1% of its interest in WBE LLC to GP LLC and, in turn, GP LLC will
         distribute its interest in WBE LLC to WES.

         4. WNGL will contribute .001% of the stock of Williams Ammonia
         Pipeline, Inc., a Delaware corporation ("WAPI"), to WNGL LLC, and WAPI
         will file articles of conversion to convert itself into WAP LP
         designating WNGL LLC as the .001% general partner and WNGL as the
         99.999% limited partner.

         5. WNGL will contribute its interest in WNGL LLC and a 3.0528508%
         limited partner interest in WAP LP to GP LLC in exchange for a
         19.1999932% interest in GP LLC.

         6. WES will contribute a 2.0538502% limited partner interest in
         Terminals LP to GP LLC in exchange for an 80.8000068% interest in GP
         LLC.

         7. WNGL will contribute its remaining 96.9461498% limited partner
         interest in WAP LP; WES will contribute its remaining 95.9461492%
         limited partner interest in Terminals LP; and GP LLC will contribute
         (a) a 3.0528508% limited partner interest in WAP LP and a 1.1831795%
         limited partner interest in Terminals LP and (b) its 100.0% interest in
         WNGL LLC to the OLP, all in exchange for (x) a 19.2001413% OLP limited
         partner interest, (y) an 80.7998587% OLP limited partner interest and
         (z) a 1.0101% OLP general partner interest, respectively.

         8. The OLP will contribute a .001% interest in Terminals LP to WNGL LLC
         as a capital contribution and that interest will become a general
         partner interest in Terminals LP.

         9. The OLP will borrow $90,100,000 on a nonrecourse basis (to GP LLC).

         10. The Agreements of Limited Partnership of each of the following will
         be amended and restated to reflect the applicable matters set forth
         above and in Articles II and IV of this Agreement:

                  (a)      the MLP; and

                  (b)      the OLP.

         11. The Limited Liability Company Agreements of each of the following
         will be amended to reflect the applicable matters set forth in Articles
         II and IV of this Agreement:

                  (a)      Wiljet;

                  (b)      NE LLC;

                  (c)      WNGL LLC;

                  (d)      WPH LLC; and

                  (e)      WTH LLC.




                                        2
<PAGE>

               NOW, THEREFORE, in consideration of their mutual undertakings and
agreements hereunder, the parties to this Agreement undertake and agree as
follows:

                                    ARTICLE I

                      DEFINITIONS; CONCURRENT TRANSACTIONS

         1.1   Definitions. The following capitalized terms shall have the
meanings given below.

               "Agreement" means this Contribution, Conveyance and Assumption
Agreement.

               "Common Units" means common limited partner interests in the MLP.

               "Conveyance, Assignment and Bill of Sale" means a Conveyance,
Assignment and Bill of Sale in recordable form from Terminals LP to WBE LLC
conveying the Excluded Assets, the form of which is attached hereto as Exhibit
A.

               "Delaware Act" has the meaning assigned to such term in the
Recitals to this Agreement.

               "Effective Time" means 12:01 a.m. Eastern Standard Time on
February 9, 2001.

               "Excluded Assets" means all of Terminals LP's interest in and to
the following matters:

                           (a) the real property and other property interests
               described in that certain Conveyance, Assignment and Bill of Sale
               of even date herewith from Terminals LP to WBE LLC including (i)
               the United terminal facility at the Phoenix, Arizona airport,
               (ii) its Aurora, Ohio petroleum products terminal facility
               located at 1521 South Chillicothe, Aurora, Ohio and (iii)
               miscellaneous office furnishings, network hardware, network
               software, and certain tenant finish on the 36th floor of the
               building located at One Williams Center, Tulsa, Oklahoma (herein
               all matters in this clause [a] being collectively called the
               "Terminals LP Real and Personal Assets");

                           (b) Williams Ethanol Services Inc. ("WESI");

                           (c) Remaining fifty percent (50%) membership interest
               in Wiljet, L.L.C., a Delaware limited liability company
               ("Wiljet"); and

                           (d) Remaining seventy-one percent (71%) membership
               interest in Nebraska Energy, L.L.C. ("NE LLC").


               "GP LLC" shall have the meaning assigned to such term in the
first paragraph of this Agreement.

               "Laws" means any and all laws, statutes, ordinances, rules or
regulations promulgated by a governmental authority, orders of a governmental
authority, judicial decisions, decisions of arbitrators or determinations of any
governmental authority or court.

               "MLP" shall have the meaning assigned to such term in the first
paragraph of this Agreement.

               "NE LLC" shall have the meaning assigned to such term in the
definition of "Excluded Assets".




                                        3
<PAGE>

               "OLP" shall have the meaning assigned to such term in the first
paragraph of this Agreement.

               "OLP Aggregate Interests" shall have the meaning assigned to such
term in Section 2.26.

               "OLP Interest of WNGL" shall have the meaning assigned to such
term in Section 2.17.

               "OLP Interest of WES" shall have the meaning assigned to such
term in Section 2.18.

               "Option" shall have the meaning assigned to such term in Section
2.27.

               "Partial Terminals LP Interest of WES" shall have the meaning
assigned to such term in Section 2.10.

               "Partial WAP LP Interest of WNGL" shall have the meaning assigned
to such term in Section 2.9.

               "Remaining Terminals LP Interest of WES" shall have the meaning
assigned to such term in Section 2.12.

               "Remaining WAP LP Interest of WNGL" shall have the meaning
assigned to such term in Section 2.11.

               "Restriction" shall have the meaning assigned to such term in
Section 9.2.

               "Restriction-Asset" shall have the meaning assigned to such term
in Section 9.2.

               "Specific Conveyances" shall have the meaning assigned to such
term in Section 2.29.

               "Subordinated Units" means subordinated limited partner interests
in the MLP.

               "Terminals LP" shall have the meaning assigned to such term in
the first paragraph of this Agreement.

               "Terminals LP Assumed Liabilities" means all of Terminals LP
liabilities arising from or relating to the Terminals LP Real and Personal
Assets, as of the Effective Time, of every kind, character and description,
whether known or unknown, accrued or contingent, and whether or not reflected on
the books and records of Terminals LP as of the Effective Time.

               "Terminals LP Interest in Wiljet" shall have the meaning assigned
to such term in Section 2.4.

               "Terminals LP Interest in NE LLC" shall have the meaning assigned
to such term in Section 2.5.

               "Terminals LP Interests of GP LLC" shall have the meaning
assigned to such term in Section 2.16. "Terminals LP Interests of the MLP" shall
have the meaning assigned to such term in Section 2.19.

               "Terminals LP Partial Interest of the OLP" shall have the meaning
assigned to such term in Section 2.14.


                                       4
<PAGE>

               "Terminals LP Real and Personal Assets" shall have the meaning
assigned to such term in the definition of "Excluded Assets".

               "WAPI" shall have the meaning assigned to such term in the
Recitals to this Agreement.

               "WAPI Stock" shall have the meaning assigned to such term in
Section 2.8.

               "WAP LP" shall have the meaning assigned to such term in the
first paragraph of this Agreement.

               "WBE LLC" shall have the meaning assigned to such term in the
first paragraph of this Agreement.

               "WBE LLC Interest of GP LLC" shall have the meaning assigned to
such term in Section 2.7.

               "WBE LLC Interest of Terminals LP" shall have the meaning
assigned to such term in Section 2.6.

               "WESI" shall have the meaning assigned to such term in the
definition of "Excluded Assets".

               "WESI Stock" shall have the meaning assigned to such term in
Section 2.3.

               "WEV" shall have the meaning assigned to such term in the
Recitals to this Agreement.

               "WEV Stock" shall have the meaning assigned to such term in
Section 2.1.

               "Wiljet" shall have the meaning assigned to such term in the
definition of "Excluded Assets".

               "WNGL" shall have the meaning assigned to such term in the first
paragraph of this Agreement.

               "WNGL LLC" shall have the meaning assigned to such term in the
first paragraph of this Agreement.

               "WNGL LLC Interest of WNGL" shall have the meaning assigned to
such term in paragraph 2.9 of this Agreement.

               "WPH LLC" means Williams Pipelines Holdings, L.L.C., a Delaware
limited liability company.

               "WPH LLC and WTH LLC Interests" shall have the meaning assigned
to such term in paragraph 2.25 of this Agreement.

               "WTH LLC" shall have the meaning assigned to such term in the
first paragraph of this Agreement.

         1.2 Recordation of Evidence of Ownership of Assets. In connection with
the conversions and mergers under the Delaware Act that are referred to in the
recitals to this Agreement, the parties to this Agreement acknowledge that
certain jurisdictions in which the assets of the applicable parties to such
conversions and mergers are located may require that documents be recorded by
the entities resulting from such conversions and mergers in order to evidence
title in such entities. All such



                                       5
<PAGE>

documents shall evidence such new ownership and are not intended to modify, and
shall not modify, any of the terms, covenants and conditions herein set forth.

                                   ARTICLE II

                 CONTRIBUTIONS OF VARIOUS ASSETS AND PARTNERSHIP

                     AND LIMITED LIABILITY COMPANY INTERESTS

         2.1 Contribution of WEV Common Stock by WES to GP LLC. WES hereby
grants, contributes, transfers and conveys to GP LLC, its successors and
assigns, all right, title and interest in and to 1.0% of the issued and
outstanding common stock of WEV equal to one share of such common stock (the
"WEV Stock"), and GP LLC hereby accepts the WEV Stock as a contribution to the
capital of GP LLC.

         TO HAVE AND TO HOLD the WEV Stock unto GP LLC, its successors and
assigns, together with all and singular the rights and appurtenances thereto in
anywise belonging, subject, however, to the terms and conditions stated in this
Agreement, forever.

         2.2 Contribution by Terminals LP to WBE LLC of the Terminals LP Real
and Personal Assets. Terminals LP hereby grants, contributes, transfers, assigns
and conveys to WBE LLC, its successors and assigns, for its and their own use
forever, all right, title and interest of Terminals LP in and to the Terminals
LP Real and Personal Assets, and WBE LLC hereby accepts the Terminals LP Real
and Personal Assets, as a contribution to the capital of WBE LLC.

         TO HAVE AND TO HOLD the Terminals LP Real and Personal Assets unto WBE
LLC, its successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.3 Contribution by Terminals LP to WBE LLC of WESI Common Stock.
Terminals LP hereby grants, contributes, transfers, assigns and conveys to WBE
LLC, its successors and assigns, all right, title and interest in and to all of
the issued and outstanding common stock of WESI (the "WESI Stock"), and WBE LLC
hereby accepts the WESI Stock as an additional contribution to the capital of
WBE LLC.

         TO HAVE AND TO HOLD the WESI Stock unto WBE LLC, its successors and
assigns, together with all and singular the rights and appurtenances thereto in
anywise belonging, subject, however, to the terms and conditions stated in this
Agreement, forever.

         2.4 Contribution by Terminals LP to WBE LLC of Interest in Wiljet.
Terminals LP hereby grants, distributes, transfers, assigns and conveys to WBE
LLC, its successors and assigns, for its own use forever, all right, title and
interest of Terminals LP's membership interest in and to Wiljet (the "Terminals
LP Interest in Wiljet"), and WBE LLC hereby accepts the Terminals LP Interest in
Wiljet.

         TO HAVE AND TO HOLD the Terminals LP Interest in Wiljet unto WBE LLC,
its successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.5 Contribution by Terminals LP to WBE LLC of Interest in NE LLC.
Terminals LP hereby grants, distributes, transfers, assigns and conveys to WBE
LLC, its successors and assigns, for its own use forever, all right, title and
interest of Terminals LP's membership interest in and to



                                       6
<PAGE>

NE LLC (the "Terminals LP Interest in NE LLC"), and WBE LLC hereby accepts the
Terminals LP Interest in NE LLC.

         TO HAVE AND TO HOLD the Terminals LP Interest in NE LLC unto WBE LLC,
its successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.6 Distributions by Terminals LP to WES and GP LLC of Interest in WBE
LLC. Terminals LP hereby grants, distributes, transfers, assigns and conveys to
WES and GP LLC, their respective successors and assigns, for their own use
forever, all right, title and interest of Terminals LP in and to WBE LLC, being
a 100% membership interest (the "WBE LLC Interest of Terminals LP"), in the
following percentage interests:

         (i)  To WES, a 99.0% interest; and

         (ii) To GP LLC, a 1.0% interest;

and WES and GP LLC hereby accept the WBE LLC Interest of Terminals LP in the
respective percentage interests set forth above.

         TO HAVE AND TO HOLD the WBE LLC Interest of Terminals LP unto WES and
GP LLC in the respective percentage interests set forth immediately above, their
successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.7 Distribution by GP LLC of Interest in WBE LLC to WES. GP LLC hereby
grants, distributes, transfers, assigns and conveys to WES, its successors and
assigns, for its own use forever, all right, title and interest of GP LLC in and
to WBE LLC, being a 1.0% membership interest (the "WBE LLC Interest of GP LLC"),
and WES hereby accepts the WBE LLC Interest of GP LLC.

         TO HAVE AND TO HOLD the WBE LLC Interest of GP LLC unto WES, its
successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.8 Contribution of WAPI Common Stock by WNGL to WNGL LLC. WNGL hereby
grants, contributes, transfers, assigns and conveys to WNGL LLC, its successors
and assigns, all right, title and interest in and to .001% of the issued and
outstanding common stock of WAPI equal to 1/10th of one share of such common
stock (the "WAPI Stock"), and WNGL LLC hereby accepts the WAPI Stock as an
additional contribution to the capital of WNGL LLC.

         TO HAVE AND TO HOLD the WAPI Stock unto WNGL LLC, its successors and
assigns, together with all and singular the rights and appurtenances thereto in
anywise belonging, subject, however, to the terms and conditions stated in this
Agreement, forever.

         2.9 Contribution of Interest in WNGL LLC by WNGL to GP LLC. WNGL hereby
grants, contributes, transfers, assigns and conveys to GP LLC, its successors
and assigns, (a) all right, title and interest in and to WNGL LLC, being a
100.0% membership interest (the "WNGL LLC Interest of WNGL") and (b) a
3.0528508% limited partner interest in WAP LP (the "Partial WAP LP Interest of
WNGL"), and GP LLC hereby accepts the WNGL LLC Interest of WNGL and the Partial
WAP LP Interest of WNGL as a contribution to the capital of WNGL LLC in exchange
for a 19.1999932% membership interest in GP LLC.


                                       7
<PAGE>

         TO HAVE AND TO HOLD the WNGL LLC Interest of WNGL and the Partial WAP
LP Interest of WNGL unto GP LLC, its successors and assigns, together with all
and singular the rights and appurtenances thereto in anywise belonging, subject,
however, to the terms and conditions stated in this Agreement, forever.

         2.10 Contribution of Interest in Terminals LP by WES to GP LLC. WES
hereby grants, contributes, transfers, assigns and conveys to GP LLC, its
successors and assigns, all right, title and interest in and to a 2.0538502%
limited partner interest in Terminals LP (the "Partial Terminals LP Interest of
WES"), and GP LLC hereby accepts the Partial Terminals LP Interest of WES as an
additional contribution to the capital of GP LLC in which it holds an
80.8000068% membership interest.

         TO HAVE AND TO HOLD the Partial Terminals LP Interest of WES unto GP
LLC, its successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.11 Contribution of the Remaining Interest in WAP LP by WNGL to the
OLP. WNGL hereby grants, contributes, transfers, assigns and conveys to the OLP,
its successors and assigns, all right, title and interest in and to all of its
remaining 96.9461492% limited partner interest in WAP LP (the "Remaining WAP LP
Interest of WNGL"), and the OLP hereby accepts the Remaining WAP LP Interest of
WNGL as a contribution to the capital of the OLP in exchange for a 19.2001413%
limited partner interest in the OLP.

         TO HAVE AND TO HOLD the Remaining WAP LP Interest of WNGL unto the OLP,
its successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.12 Contribution of the Remaining Interest in Terminals LP by WES to
the OLP. WES hereby grants, contributes, transfers, assigns and conveys to the
OLP, its successors and assigns, all right, title and interest in and to all of
its remaining 96.9461498% limited partner interest in Terminals LP (the
"Remaining Terminals LP Interest of WES"), and the OLP hereby accepts the
Remaining Terminals LP Interest of WES as a contribution to the capital of the
OLP in exchange for an 80.7998587% limited partner interest in the OLP.

         TO HAVE AND TO HOLD the Remaining Terminals LP Interest of WES unto the
OLP, its successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.13 Contribution of Interests in WAP LP, Terminals LP and WNGL LLC by
GP LLC to the OLP. GP LLC hereby grants, contributes, transfers, assigns and
conveys to the OLP, its successors and assigns, all of its right, title and
interest in and to (a) a 3.0528508% limited partner interest in WAP LP , (b) a
1.1831795% limited partner interest in Terminals LP and (c) its 100.0% interest
in WNGL LLC (herein collectively called the "GP LLC Aggregate Interests"), and
the OLP hereby accepts the GP LLC Aggregate Interests as a contribution to the
capital of OLP in which it holds a 1.0101% general partner interest.

         TO HAVE AND TO HOLD the GP LLC Aggregate Interests unto the OLP, its
successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.14 Contribution of Interest in Terminals LP by the OLP to WNGL LLC.
The OLP hereby grants, contributes, transfers, assigns and conveys to WNGL LLC,
its successors and assigns,



                                       8
<PAGE>

a .001% limited partner interest in Terminals LP (the "Terminals LP Partial
Interest of the OLP"), which is hereby converted into a .001% general partner
interest in Terminals LP and the one percent (1%) general partner interest of GP
LLC in Terminals LP is hereby converted to a limited partner interest in
Terminals LP, and WNGL LLC hereby accepts the Terminals LP Partial Interest of
the OLP as an additional contribution to the capital of WNGL LLC.

         TO HAVE AND TO HOLD the Terminals LP Partial Interest of the OLP unto
WNGL LLC, its successors and assigns, together with all and singular the rights
and appurtenances thereto in anywise belonging, subject, however, to the terms
and conditions stated in this Agreement, forever.

         2.15 Public Cash Contribution. The parties to this Agreement
acknowledge a cash contribution of $86,000,000 from the public to the MLP in
exchange for 4,000,000 Common Units representing a 34.86103% limited partner
interest in the MLP (and a 34.5089% interest in the MLP and OLP on a combined
basis).

         2.16 Contribution of Remaining Interest in Terminals LP by GP LLC to
the MLP. GP LLC hereby grants, contributes, transfers, assigns and conveys to
the MLP, its successors and assigns, all of its remaining 0.8706707% limited
partner interest in Terminals LP (the "Terminals LP Interests of GP LLC"), and
the MLP hereby accepts the Terminals LP Interests of GP LLC as an additional
contribution to the capital of the MLP in which it holds a 1.0% general partner
interest.

         TO HAVE AND TO HOLD the Terminals LP Interests of GP LLC unto the MLP,
its successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.17 Contribution of Remaining Interest in the OLP by WNGL to the MLP.
WNGL hereby grants, contributes, transfers, assigns and conveys to the MLP, its
successors and assigns, all of its limited partner interest in the OLP, being a
19.2001413% limited partner interest (the "OLP Interest of WNGL"), and the MLP
hereby accepts the OLP Interest of WNGL as an additional contribution to the
capital of the MLP in exchange for 322,501 Common Units and 1,090,501
Subordinated Units to WNGL.

         TO HAVE AND TO HOLD the OLP Interest of WNGL unto the MLP its
successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.18 Contribution of Remaining Interest in the OLP by WES to the MLP.
WES hereby grants, contributes, transfers, assigns and conveys to the MLP, its
successors and assigns, all of its limited partner interest in the OLP, being an
80.7998587% limited partner interest (the "OLP Interest of WES"), and the MLP
hereby accepts the OLP Interest of WES as an additional contribution to the
capital of the MLP in exchange for 1,357,193 Common Units and 4,589,193
Subordinated Units to WES.

         TO HAVE AND TO HOLD the OLP Interest of WES unto the MLP its successors
and assigns, together with all and singular the rights and appurtenances thereto
in anywise belonging, subject, however, to the terms and conditions stated in
this Agreement, forever.

         2.19 Contribution of Interests in Terminals LP by the MLP to the OLP.
The MLP hereby grants, contributes, transfers, assigns and conveys to the OLP,
its successors and assigns, all of its interests in and to its 0.8706707%
limited partner interest in Terminals LP (the "Terminals LP Interests of the
MLP"), and the OLP hereby accepts the Terminals LP Interests of the MLP as an
additional contribution to the capital of the OLP.


                                       9
<PAGE>

         TO HAVE AND TO HOLD the Terminals LP Interests of the MLP unto the OLP,
its successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.20 MLP Cash Contribution to the OLP. The OLP acknowledges receipt
from the MLP of $86,000,000 in cash obtained from the public offering described
in Section 2.15 above as an additional capital contribution by the MLP to the
OLP, and the parties to this Agreement acknowledge that the OLP has used such
capital contribution (a) to pay all of the underwriting discounts and offering
expenses incurred by the MLP in connection with the public offering of the
Common Units (estimated at $9,800,000) and (b) to make an additional capital
contribution to Terminals LP as described in Section 2.21.

         2.21 OLP Cash Contribution. Terminals LP acknowledges receipt of an
additional capital contribution by the OLP of $166,300,000 of even date
herewith, which is being contributed by Terminals LP as an additional capital
contribution to WTH LLC.

         2.22 Terminals LP Cash Contribution. WTH LLC acknowledges receipt of an
additional capital contribution by Terminals LP of $166,300,000 of even date
herewith, and the parties to this Agreement acknowledge that such amount is
being paid by WTH LLC to The Williams Companies, Inc. to repay $166,300,000 of
the amount of its outstanding indebtedness owed to The Williams Companies, Inc.

         2.23 Cancellation of Debt Owed to The Williams Companies, Inc. All
parties to this Agreement hereby acknowledge the cancellation by The Williams
Companies, Inc. of all indebtedness owed to The Williams Companies, Inc. by WEV
and WPH LLC.

         2.24 Distribution of Receivable to WNGL. WAPI hereby distributes to
WNGL its account receivable due from WES.

         2.25 Distribution to the OLP by Terminals LP of Interests in WPH LLC
and WTH LLC. Terminals LP hereby grants, distributes, transfers, assigns and
conveys to the OLP, its successors and assigns, for their own use forever, all
right, title and interest of Terminals LP in and to all of the membership
interests in WPH LLC and WTH LLC (collectively, the "WPH LLC and WTH LLC
Interests"), and the OLP hereby accepts the WPH LLC and WTH LLC Interests.

         TO HAVE AND TO HOLD the WPH LLC and WTH LLC Interests unto the OLP, its
successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.26 Contribution of Interests in WPH LLC and WTH LLC by the OLP to
WNGL LLC. The OLP hereby grants, contributes, transfers and conveys to WNGL LLC,
its successors and assigns, a .001% membership interest in and to each of WPH
LLC and WTH LLC (herein collectively called the "OLP Aggregate Interests"), and
WNGL LLC hereby accepts the OLP Aggregate Interests as an additional
contribution to the capital of WNGL.

         TO HAVE AND TO HOLD the OLP Aggregate Interests unto WNGL LLC, its
successors and assigns, together with all and singular the rights and
appurtenances thereto in anywise belonging, subject, however, to the terms and
conditions stated in this Agreement, forever.

         2.27 Purchase of Additional Common Units. The underwriters of the
public offering referred to in Section 2.15 above were granted a 30-day option
(the "Option") to purchase up to 600,000 Common Units. The Option has been
exercised and the parties to this Agreement



                                       10
<PAGE>

acknowledge an additional cash contribution of $12,900,000 from the public to
the MLP, through the underwriters, in exchange for 600,000 Common Units.

         2.28 Redemption of Common Units of WES. WES acknowledges receipt of
$12,061,500 from the MLP in payment for the redemption of 600,000 Common Units
owned by WES as a partial reimbursement to WES for certain capital expenditures
incurred with respect to assets contributed, directly or indirectly, to the MLP
by WES.

         2.29 Specific Conveyances. To further evidence the asset contribution
set forth in Section 2.2 above and to more fully and effectively convey record
title with respect to the real property included in the Excluded Assets,
Terminals LP has executed and delivered to WBE LLC certain Conveyance,
Assignment and Bill of Sale instruments (the "Specific Conveyances"). The
Specific Conveyances shall evidence and perfect the sale and contribution made
by this Agreement and shall not constitute a second conveyance of the Excluded
Assets or interests therein and shall be subject to the terms of this Agreement.
The Specific Conveyances are not intended to modify, and shall not modify, any
of the terms, covenants and conditions herein set forth and are not intended to
create, and shall not create, any additional covenants or warranties of or by
Terminals LP.

                                   ARTICLE III

                             ADDITIONAL TRANSACTIONS

         3.01 Conversion of WPH LLC to Williams Pipelines Holdings, L.P. The
parties to this Agreement acknowledge that WPH LLC has adopted articles of
conversion and has converted to Williams Pipelines Holdings, L.P., a Delaware
limited partnership, having (a) WNGL LLC as the general partner owning a .001%
general partner interest and (b) the OLP as the limited partner owning a 99.999%
limited partner interest.

         3.02 Merger of WTH LLC into Terminals LP. The parties to this Agreement
acknowledge that WTH LLC has merged into Terminals LP.

                                   ARTICLE IV

                        ASSUMPTION OF CERTAIN LIABILITIES

         4.1 Assumption of Terminals LP Liabilities of Terminals LP by WBE LLC.
In connection with the contribution by Terminals LP of the Terminals LP Real and
Personal Assets to WBE LLC, as set forth in Section 2.2 above, WBE LLC hereby
assumes and agrees to duly and timely pay, perform and discharge all of the
Terminals LP Assumed Liabilities, to the full extent that Terminals LP has been
heretofore or would have been in the future, were it not for the execution and
delivery of this Agreement, obligated to pay, perform and discharge the
Terminals LP Assumed Liabilities; provided, however, that said assumption and
agreement to duly and timely pay, perform and discharge the Terminals LP Assumed
Liabilities shall not (i) increase the obligation of WBE LLC with respect to the
Terminals LP Assumed Liabilities beyond that of Terminals LP, (ii) waive any
valid defense that was available to Terminals LP with respect to the Terminals
LP Assumed Liabilities or (iii) enlarge any rights or remedies of any third
party under any of the Terminals LP Assumed Liabilities.

         4.2 Assumption of Liabilities and Obligations of Terminals LP by WBE
LLC. In connection with the contribution by Terminals LP of the Terminals LP
Interest in Wiljet to WBE LLC, as set forth in Section 2.4 above, WBE LLC,
according to the membership percentage interest


                                       11
<PAGE>

in Wiljet hereby assumes and agrees to duly and timely pay, perform and
discharge all obligations and liabilities of Terminals LP as such member under
the Limited Liability Company Agreement of Wiljet, to the full extent that
Terminals LP has been heretofore or would have been in the future, were it not
for the execution and delivery of this Agreement, obligated to pay, perform and
discharge such obligations and liabilities; provided, however, that said
assumption and agreement to duly and timely pay, perform and discharge such
obligations and liabilities shall not increase the obligation of WBE LLC with
respect to such obligations and liabilities beyond that of Terminals LP to the
extent of such membership interest contributed by Terminals LP.

         4.3 Assumption of Liabilities and Obligations of Terminals LP by WBE
LLC. In connection with the contribution by Terminals LP of the Terminals LP
Interest in NE LLC to WBE LLC, as set forth in Section 2.5 above, WBE LLC,
according to the membership percentage interest in NE LLC hereby assumes and
agrees to duly and timely pay, perform and discharge all obligations and
liabilities of Terminals LP as such member under the Limited Liability Company
Agreement of NE LLC, to the full extent that Terminals LP has been heretofore or
would have been in the future, were it not for the execution and delivery of
this Agreement, obligated to pay, perform and discharge such obligations and
liabilities; provided, however, that said assumption and agreement to duly and
timely pay, perform and discharge such obligations and liabilities shall not
increase the obligation of WBE LLC with respect to such obligations and
liabilities beyond that of Terminals LP to the extent of such membership
interest contributed by Terminals LP.

         4.4 Assumption of Liabilities and Obligations of Terminals LP by WES
and GP LLC. In connection with the distribution by Terminals LP of the WBE LLC
Interest of Terminals LP to WES and GP LLC, as set forth in Section 2.6 above,
WES and GP LLC, according to their respective membership percentage interests in
WBE LLC hereby assume and agree to duly and timely pay, perform and discharge
all obligations and liabilities of Terminals LP as such member under the Limited
Liability Company Agreement of WBE LLC, to the full extent that Terminals LP has
been heretofore or would have been in the future, were it not for the execution
and delivery of this Agreement, obligated to pay, perform and discharge such
obligations and liabilities; provided, however, that said assumption and
agreement to duly and timely pay, perform and discharge such obligations and
liabilities shall not increase the obligation of WES or GP LLC with respect to
such obligations and liabilities beyond that of Terminals LP to the extent of
such membership interests distributed by Terminals LP.

         4.5 Assumption of Liabilities and Obligations of GP LLC by WES. In
connection with the distribution by GP LLC of the WBE LLC Interest of GP LLC to
WES, as set forth in Section 2.7 above, WES hereby assumes and agrees to duly
and timely pay, perform and discharge all obligations and liabilities of GP LLC
as such member under the Limited Liability Company Agreement of WBE LLC, to the
full extent that GP LLC has been heretofore or would have been in the future,
were it not for the execution and delivery of this Agreement, obligated to pay,
perform and discharge such obligations and liabilities; provided, however, that
said assumption and agreement to duly and timely pay, perform and discharge such
obligations and liabilities shall not increase the obligation of WES with
respect to such obligations and liabilities beyond that of GP LLC to the extent
of such membership interests distributed by GP LLC.

         4.6 Assumption of Liabilities and Obligations of WNGL by GP LLC. In
connection with the contribution by WNGL of the WNGL LLC Interest of WNGL and
the Partial WAP LP Interest of WNGL to GP LLC, as set forth in Section 2.9
above, GP LLC hereby assumes and agrees to duly and timely pay, perform and
discharge all obligations and liabilities of WNGL as such member



                                       12
<PAGE>

under the Limited Liability Company Agreement of WNGL LLC and as such limited
partner under the Agreement of Limited Partnership of WAP LP, to the full extent
that WNGL has been heretofore or would have been in the future, were it not for
the execution and delivery of this Agreement, obligated to pay, perform and
discharge such obligations and liabilities; provided, however, that said
assumption and agreement to duly and timely pay, perform and discharge such
obligations and liabilities shall not increase the obligation of GP LLC with
respect to such obligations and liabilities beyond that of WNGL to the extent of
such membership interest and limited partnership interest contributed by WNGL.

         4.7 Assumption of Liabilities and Obligations of WES by GP LLC. In
connection with the contribution by WES of the Partial Terminals LP Interest of
WES, as set forth in Section 2.10 above, GP LLC hereby assumes and agrees to
duly and timely pay, perform and discharge all obligations and liabilities as
such a limited partner under the Agreement of Limited Partnership of Terminals
LP, to the full extent that WES has been heretofore or would have been in the
future, were it not for the execution and delivery of this Agreement, obligated
to pay, perform and discharge such obligations and liabilities; provided,
however, that said assumption and agreement to duly and timely pay, perform and
discharge such obligations and liabilities shall not increase the obligation of
GP LLC with respect to such obligations and liabilities beyond that of WES to
the extent of such limited partner interest contributed by WES.

         4.8 Assumption of Liabilities and Obligations of WNGL by the OLP. In
connection with the contribution by WNGL of the Remaining WAP LP Interest of
WNGL to the OLP, as set forth in Section 2.11 above, the OLP hereby assumes and
agrees to duly and timely pay, perform and discharge all obligations and
liabilities as such a limited partner under the Agreement of Limited Partnership
of WAP LP, to the full extent that WNGL has been heretofore or would have been
in the future, were it not for the execution and delivery of this Agreement,
obligated to pay, perform and discharge such obligations and liabilities;
provided, however, that said assumption and agreement to duly and timely pay,
perform and discharge such obligations and liabilities shall not increase the
obligation of the OLP with respect to such obligations and liabilities beyond
that of WNGL to the extent of such limited partner interest contributed by WNGL.

         4.9 Assumption of Liabilities and Obligations of WES by the OLP. In
connection with the contribution by WES of the Remaining Terminals LP Interest
of WES to the OLP, as set forth in Section 2.12 above, the OLP hereby assumes
and agrees to duly and timely pay, perform and discharge all obligations and
liabilities as such a limited partner under the Agreement of Limited Partnership
of Terminals LP, to the full extent that WES has been heretofore or would have
been in the future, were it not for the execution and delivery of this
Agreement, obligated to pay, perform and discharge such obligations and
liabilities; provided, however, that said assumption and agreement to duly and
timely pay, perform and discharge such obligations and liabilities shall not
increase the obligation of the OLP with respect to such obligations and
liabilities beyond that of WES to the extent of such partnership interest
contributed by WES.

         4.10 Assumption of Liabilities and Obligations of GP LLC by the OLP. In
connection with the contributions by GP LLC of the GP LLC Aggregate Interests to
the OLP, as set forth in Section 2.13 above, the OLP hereby assumes and agrees
to duly and timely pay, perform and discharge all obligations and liabilities as
(a) such a limited partner under the Agreement of Limited Partnership of WAP LP,
(b) such a limited partner under the Agreement of Limited Partnership of
Terminals LP and (c) a member under the Limited Liability Company Agreement of
WNGL LLC, to the full extent that GP LLC has been heretofore or would have been
in the future, were it not for



                                       13
<PAGE>

the execution and delivery of this Agreement, obligated to pay, perform and
discharge such obligations and liabilities; provided, however, that said
assumption and agreement to duly and timely pay, perform and discharge such
obligations and liabilities shall not increase the obligation of the OLP with
respect to such obligations and liabilities beyond that of GP LLC to the extent
of such partnership interests and membership interests contributed by GP LLC.

         4.11 Assumption of Liabilities and Obligations of the OLP by WNGL LLC.
In connection with the contribution by the OLP of the Terminals LP Partial
Interest of the OLP to WNGL LLC, as set forth in Section 2.14 above, WNGL LLC
hereby assumes and agrees to duly and timely pay, perform and discharge all
obligations and liabilities as such a limited partner under the Agreement of
Limited Partnership of Terminals LP, to the full extent that the OLP has been
heretofore or would have been in the future, were it not for the execution and
delivery of this Agreement, obligated to pay, perform and discharge such
obligations and liabilities; provided, however, that said assumption and
agreement to duly and timely pay, perform and discharge such obligations and
liabilities shall not increase the obligation of WNGL LLC with respect to such
obligations and liabilities beyond that of the OLP to the extent of such
partnership interest contributed by the OLP.

         4.12 Assumption of Liabilities and Obligations of GP LLC by the MLP. In
connection with the contribution by GP LLC of the Terminals LP Interests of GP
LLC to the MLP, as set forth in Section 2.16 above, MLP hereby assumes and
agrees to duly and timely pay, perform and discharge all obligations and
liabilities as such a limited partner under the Agreement of Limited Partnership
of Terminals LP to the full extent of the partnership interests that GP LLC has
been heretofore or would have been in the future, were it not for the execution
and delivery of this Agreement, obligated to pay, perform and discharge such
obligations and liabilities; provided, however, that said assumption and
agreement to duly and timely pay, perform and discharge such obligations and
liabilities shall not increase the obligation of MLP with respect to such
obligations and liabilities beyond that of GP LLC to the extent of such
partnership interests contributed by GP LLC.

         4.13 Assumption of Liabilities and Obligations of WNGL by the MLP. In
connection with the contribution by WNGL of the OLP Interest of WNGL, as set
forth in Section 2.17 above, MLP hereby assumes and agrees to duly and timely
pay, perform and discharge all obligations and liabilities as such a limited
partner under the Agreement of Limited Partnership of the OLP to the full extent
that WNGL has been heretofore or would have been in the future, were it not for
the execution and delivery of this Agreement, obligated to pay, perform and
discharge such obligations and liabilities; provided, however, that said
assumption and agreement to duly and timely pay, perform and discharge such
obligations and liabilities shall not increase the obligation of MLP with
respect to such obligations and liabilities beyond that of WNGL to the extent of
such partnership interest contributed by WNGL.

         4.14 Assumption of Liabilities and Obligations of WES by the MLP. In
connection with the contribution by WES of the OLP Interest of WES to the MLP,
as set forth in Section 2.18 above, the MLP hereby assumes and agrees to duly
and timely pay, perform and discharge all obligations and liabilities as such a
limited partner under the Agreement of Limited Partnership of the OLP to the
full extent that WES has been heretofore or would have been in the future, were
it not for the execution and delivery of this Agreement, obligated to pay,
perform and discharge such obligations and liabilities; provided, however, that
said assumption and agreement to duly and timely pay, perform and discharge such
obligations and liabilities shall not increase the obligation of the MLP


                                       14
<PAGE>

with respect to such obligations and liabilities beyond that of WES to the
extent of such partnership interest contributed by WES.

         4.15 Assumption of Liabilities and Obligations of the MLP to the OLP.
In connection with the contribution by the MLP of the Terminals LP Interests of
the MLP to the OLP, as set forth in Section 2.19 above, the OLP hereby assumes
and agrees to duly and timely pay, perform and discharge all obligations and
liabilities as such a limited partner under the Agreement of Limited Partnership
of Terminals LP to the full extent of the partnership interests that the MLP has
been heretofore or would have been in the future, were it not for the execution
and delivery of this Agreement, obligated to pay, perform and discharge such
obligations and liabilities; provided, however, that said assumption and
agreement to duly and timely pay, perform and discharge such obligations and
liabilities shall not increase the obligation of the OLP with respect to such
obligations and liabilities beyond that of the MLP to the extent of such
partnership interests contributed by the MLP.

         4.16 Assumption of Liabilities and Obligations of Terminals LP by the
OLP. In connection with the distributions by Terminals LP of the WPH LLC and WTH
LLC Interests to the OLP, as set forth in Section 2.25 above, the OLP hereby
assumes and agrees to duly and timely pay, perform and discharge all obligations
and liabilities of Terminals LP as such member under the Limited Liability
Company Agreements of WPH LLC and WTH LLC, to the full extent that Terminals LP
has been heretofore or would have been in the future, were it not for the
execution and delivery of this Agreement, obligated to pay, perform and
discharge such obligations and liabilities; provided, however, that said
assumption and agreement to duly and timely pay, perform and discharge such
obligations and liabilities shall not increase the obligation of the OLP with
respect to such obligations and liabilities beyond that of Terminals LP to the
extent of such membership interests distributed by Terminals LP.

         4.17 Assumption of Liabilities and Obligations of the OLP by WNGL LLC.
In connection with the contribution by the OLP of the OLP Aggregate Interests to
WNGL LLC, as set forth in Section 2.26 above, WNGL LLC hereby assumes and agrees
to duly and timely pay, perform and discharge all obligations and liabilities of
the OLP as such a member under the Limited Liability Company Agreements of WPH
LLC and WTH LLC, to the full extent that the OLP has been heretofore or would
have been in the future, were it not for the execution and delivery of this
Agreement, obligated to pay, perform and discharge such obligations and
liabilities; provided, however, that said assumption and agreement to duly and
timely pay, perform and discharge such obligations and liabilities shall not
increase the obligation of WNGL LLC with respect to such obligations and
liabilities beyond that of the OLP to the extent of such membership interests
contributed by the OLP.

                                    ARTICLE V

                                 INDEMNIFICATION

         5.1 Indemnification With Respect to Excluded Assets. WBE LLC shall
indemnify, defend and hold harmless Terminals LP, its partners and their
respective members, directors, officers, employees and their respective
successors and assigns, from and against any and all claims, demands, costs,
liabilities (INCLUDING, WITHOUT LIMITATION, LIABILITIES ARISING BY WAY OF ACTIVE
OR PASSIVE NEGLIGENCE) and expenses (including court costs and reasonable
attorneys' fees) of every kind, character and description, whether known or
unknown, accrued or contingent, and whether or



                                       15
<PAGE>

not reflected on the books and records of Terminals LP as of the Effective Time,
arising from or relating to (i) the Excluded Assets or (ii) any failure of
Terminals LP to comply with any applicable bulk sales law of any jurisdiction in
connection with the transfer of the Excluded Assets to WBE LLC.

         5.2 Indemnification With Respect to Assumption of Liabilities. WBE LLC
shall indemnify, defend and hold harmless Terminals LP, its partners and their
respective members, directors, officers, employees and their respective
successors and assigns from and against any and all claims, demands, costs,
liabilities (INCLUDING, WITHOUT LIMITATION, LIABILITIES ARISING BY WAY OF ACTIVE
OR PASSIVE NEGLIGENCE) and expenses (including court costs and reasonable
attorneys' fees) of every kind, character and description, whether known or
unknown, accrued or contingent, and whether or not reflected on the books and
records of Terminals LP as of the Effective Time, arising from or relating to
the liabilities assumed by WBE LLC with respect to the Excluded Assets.

                                   ARTICLE VI

                                  TITLE MATTERS

         6.1 Encumbrances. The contribution of the Terminals LP Real and
Personal Assets made to WBE LLC by Terminals LP under this Agreement are made
expressly subject to (a) all recorded and unrecorded liens, encumbrances,
agreements, defects, restrictions, adverse claim and all laws, rules,
regulations, ordinances, judgments and orders of governmental authorities or
tribunals having or asserting jurisdiction over the Terminals LP Real and
Personal Assets and operations conducted thereon or therewith, in each case to
the extent the same are valid and enforceable and affect the Terminals LP Real
and Personal Assets, including, without limitation, (a) all matters that a
current on the ground survey or visual inspection of the Terminals LP Real and
Personal Assets would reflect, (b) the liabilities assumed by WBE LLC with
respect to the Terminals LP Real and Personal Assets, and (c) all matters
contained in the Specific Conveyances.



         6.2 Disclaimer of Warranties; Subrogation; Waiver of Bulk Sales Laws.

                (a) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
     AGREEMENT, WBE LLC ACKNOWLEDGES AND AGREES THAT TERMINALS LP HAS NOT MADE,
     DOES NOT MAKE, AND SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS,
     WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR
     CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR
     WRITTEN, PAST OR PRESENT (ALL OF WHICH ARE EXPRESSLY DISCLAIMED BY
     TERMINALS LP), REGARDING (A) THE TITLE, VALUE, NATURE, QUALITY OR CONDITION
     OF THE TERMINALS LP REAL AND PERSONAL ASSETS INCLUDING, WITHOUT LIMITATION,
     THE WATER, SOIL, GEOLOGY OR ENVIRONMENTAL CONDITION OF THE TERMINALS LP
     REAL AND PERSONAL ASSETS GENERALLY, INCLUDING THE PRESENCE OR LACK OF
     HAZARDOUS SUBSTANCES OR OTHER MATTERS ON THE TERMINALS LP REAL AND PERSONAL
     ASSETS, (B) THE INCOME TO BE DERIVED FROM THE TERMINALS LP REAL AND
     PERSONAL ASSETS, (C) THE SUITABILITY OF THE TERMINALS LP REAL AND PERSONAL
     ASSETS FOR ANY AND ALL ACTIVITIES AND USES WHICH WBE LLC MAY CONDUCT
     THEREON, (D) THE COMPLIANCE OF OR BY THE TERMINALS LP REAL AND PERSONAL
     ASSETS OR



                                       16
<PAGE>

     THEIR OPERATION WITH ANY LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING,
     ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS,
     ORDERS OR REQUIREMENTS), OR (E) THE HABITABILITY, MERCHANTABILITY,
     MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE
     TERMINALS LP REAL AND PERSONAL ASSETS. WBE LLC ACKNOWLEDGES AND AGREES THAT
     WBE LLC HAS THE OPPORTUNITY TO INSPECT THE TERMINALS LP REAL AND PERSONAL
     ASSETS AND WBE LLC IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE
     TERMINALS LP REAL AND PERSONAL ASSETS AND NOT ON ANY INFORMATION PROVIDED
     OR TO BE PROVIDED BY TERMINALS LP. TERMINALS LP IS NOT LIABLE OR BOUND IN
     ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR
     INFORMATION PERTAINING TO THE TERMINALS LP REAL AND PERSONAL ASSETS
     FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY. WBE LLC
     ACKNOWLEDGES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE CONTRIBUTION
     OF THE TERMINALS LP REAL AND PERSONAL ASSETS AS PROVIDED FOR HEREIN IS MADE
     IN AN "AS IS", "WHERE IS" CONDITION WITH ALL FAULTS, AND THE TERMINALS LP
     REAL AND PERSONAL ASSETS ARE CONTRIBUTED AND CONVEYED BY TERMINALS LP AND
     ACCEPTED BY WBE LLC SUBJECT TO THE FOREGOING. THIS PARAGRAPH SHALL SURVIVE
     SUCH CONTRIBUTION AND CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT. THE
     PROVISIONS OF THIS SECTION 6.2 HAVE BEEN NEGOTIATED BY TERMINALS LP AND WBE
     LLC AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND
     NEGATION OF ANY REPRESENTATIONS OR WARRANTIES OF TERMINALS LP, WHETHER
     EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE TERMINALS LP REAL AND
     PERSONAL ASSETS THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN
     EFFECT, OR OTHERWISE.

                (b) The contribution of the Terminals LP Real and Personal
     Assets made under this Agreement is made with full rights of substitution
     and subrogation of WBE LLC, and all persons claiming by, through and under
     Terminals LP, to the extent assignable, in and to all covenants and
     warranties by the predecessors-in-title of Terminals LP, and with full
     subrogation of all rights accruing under applicable statutes of limitation
     and all rights of action of warranty against all former owners of the
     Terminals LP Real and Personal Assets.

                (c) Terminals LP and WBE LLC agree that the disclaimers
     contained in this Section 6.2 are "conspicuous" disclaimers. Any covenants
     implied by statute or law by the use of the words "grant," "convey,"
     "bargain," "sell," "assign," "transfer," "deliver," or "set over" or any of
     them or any other words used in this Agreement or any exhibits hereto are
     hereby expressly disclaimed, waived or negated.

                (d) Each of the parties hereto hereby waives compliance with any
     applicable bulk sales law or any similar law in any applicable jurisdiction
     in respect of the transactions contemplated by this Agreement.



                                       17
<PAGE>

                                   ARTICLE VII

                               FURTHER ASSURANCES

         7.1 Further Assurances. From time to time after the date hereof, and
without any further consideration, Terminals LP and WBE LLC, shall execute,
acknowledge and deliver all such additional deeds, assignments, bills of sale,
conveyances, instruments, notices, releases, acquittances and other documents,
and will do all such other acts and things, all in accordance with applicable
law, as may be necessary or appropriate (i) more fully to assure WBE LLC, its
successors and assigns, all of the properties, rights, titles, interests,
estates, remedies, powers and privileges by this Agreement granted to WBE LLC
with respect to the Excluded Assets or which are intended so to be and (ii) more
fully and effectively to vest in WBE LLC and its successors and assigns
beneficial and record title to the interests hereby contributed and assigned to
WBE LLC or intended so to be and to more fully and effectively carry out the
purposes and intent of this Agreement.

         7.2 Other Assurances. From time to time after the date hereof, and
without any further consideration, each of the parties to this Agreement shall
execute, acknowledge and deliver all such additional instruments, notices and
other documents, and will do all such other acts and things, all in accordance
with applicable law, as may be necessary or appropriate to more fully and
effectively carry out the purposes and intent of this Agreement.

                                  ARTICLE VIII

                                POWER OF ATTORNEY

         Terminals LP hereby constitutes and appoints WBE LLC, its successors
and assigns, its true and lawful attorney-in-fact with full power of
substitution for it and in its name, place and stead or otherwise on behalf of
Terminals LP, its successors and assigns, and for the benefit of WBE LLC, its
successors and assigns, to demand and receive from time to time the Excluded
Assets and to execute in the name of Terminals LP and its successors and assigns
instruments of conveyance, instruments of further assurance and to give receipts
and releases in respect of the same, and from time to time to institute and
prosecute in the name of WBE LLC or Terminals LP for the benefit of WBE LLC, as
may be appropriate, any and all proceedings at law, in equity or otherwise which
WBE LLC, its successors and assigns may deem proper in order to collect, assert
or enforce any claims, rights or titles of any kind in and to the Excluded
Assets, and to defend and compromise any and all actions, suits or proceedings
in respect of any of the Excluded Assets and to do any and all such acts and
things in furtherance of this Agreement as WBE LLC or its successors or assigns
shall deem advisable. Terminals LP hereby declares that the appointment hereby
made and the powers hereby granted are coupled with an interest and are and
shall be irrevocable and perpetual and shall not be terminated by any act of
Terminals LP, its successors or assigns or by operation of law.

                                   ARTICLE IX

                                  MISCELLANEOUS

         9.1 Order of Completion of Transactions; Effective Time.

               (a) The transactions provided for in Articles I, II, III and IV
     of this Agreement shall be completed on the date of this Agreement in the
     following order:

               First, the transactions provided for in Article II shall be
     completed;



                                       18
<PAGE>

               Second, the transactions provided for in Article IV shall be
     completed; and

               Third, the transactions provided for in Article III shall be
     completed.

               (b) The contribution of the Excluded Assets to WBE LLC shall be
     effective for all purposes as of the Effective Time.

         9.2 Consents; Restriction on Assignment. If there are prohibitions
against or conditions to the contribution and conveyance of one or more portions
of the Excluded Assets without the prior written consent of third parties,
including, without limitation, governmental agencies (other than consents of a
ministerial nature which are normally granted in the ordinary course of
business), which if not satisfied would result in a breach of such prohibitions
or conditions or would give an outside party the right to terminate WBE LLC's
rights with respect to such portion of the Excluded Assets (herein called a
"Restriction"), then any provision contained in this Agreement to the contrary
notwithstanding, the transfer of title to or interest in each such portion of
the Excluded Assets (herein called the "Restriction-Asset") pursuant to this
Agreement shall not become effective unless and until such Restriction is
satisfied, waived or no longer applies. When and if such a Restriction is so
satisfied, waived or no longer applies, to the extent permitted by applicable
law and any applicable contractual provisions, the assignment of the
Restriction-Asset subject thereto shall become effective automatically as of the
Effective Time, without further action on the part of WBE LLC or either of the
Terminals LP. Terminals LP and WBE LLC agree to use their reasonable best
efforts to obtain satisfaction of any Restriction on a timely basis. The
description of any portion of the Excluded Assets as a "Restriction-Asset" shall
not be construed as an admission that any Restriction exists with respect to the
transfer of such portion of the Excluded Assets. In the event that any
Restriction-Asset exists, Terminals LP agrees to hold such Restriction-Asset in
trust for the exclusive benefit of WBE LLC and to otherwise use its reasonable
best efforts to provide WBE LLC with the benefits thereof, and Terminals LP will
enter into other agreements, or take such other action as it may deem necessary,
in order to help ensure that WBE LLC has the assets and concomitant rights
necessary to enable it to operate the Excluded Assets contributed to WBE LLC in
all material respects as they were operated prior to the Effective Time.

         9.3 Costs. WBE LLC shall pay all sales, use and similar taxes arising
out of the contributions, conveyances and deliveries to be made hereunder, and
shall pay all documentary, filing, recording, transfer, deed, and conveyance
taxes and fees required in connection therewith. In addition, WBE LLC shall be
responsible for all costs, liabilities and expenses (including court costs and
reasonable attorneys' fees) incurred in connection with the satisfaction or
waiver of any Restriction pursuant to Section 9.2.

         9.4 Headings; References; Interpretation. All Article and Section
headings in this Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any of the provisions hereof.
The words "hereof," "herein" and "hereunder" and words of similar import, when
used in this Agreement, shall refer to this Agreement as a whole, including
without limitation, all Exhibits attached hereto, and not to any particular
provision of this Agreement. All references herein to Articles, Sections, and
Exhibits shall, unless the context requires a different construction, be deemed
to be references to the Articles, Sections and Exhibits of this Agreement,
respectively, and all such Exhibits attached hereto are hereby incorporated
herein and made a part hereof for all purposes. All personal pronouns used in
this Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders, and the singular shall include the plural and vice
versa. The use herein of the word "including" following any



                                       19
<PAGE>

general statement, term or matter shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not non-limiting
language (such as "without limitation," "but not limited to," or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that could reasonably fall within the
broadest possible scope of such general statement, term or matter.

         9.5 Successors and Assigns. The Agreement shall be binding upon and
inure to the benefit of the parties signatory hereto and their respective
successors and assigns.

         9.6 No Third Party Rights. The provisions of this Agreement are
intended to bind the parties signatory hereto as to each other and are not
intended to and do not create rights in any other person or confer upon any
other person any benefits, rights or remedies and no person is or is intended to
be a third party beneficiary of any of the provisions of this Agreement.

         9.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto.

         9.8 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Oklahoma applicable to contracts
made and to be performed wholly within such state without giving effect to
conflict of law principles thereof, except to the extent that it is mandatory
that the law of some other jurisdiction, wherein the Excluded Assets are
located, shall apply.

         9.9 Severability. If any of the provisions of this Agreement are held
by any court of competent jurisdiction to contravene, or to be invalid under,
the laws of any political body having jurisdiction over the subject matter
hereof, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as if it did not contain
the particular provision or provisions held to be invalid, and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Agreement at the time of
execution of this Agreement.

         9.10 Deed; Bill of Sale; Assignment. To the extent required by
applicable law, this Agreement shall also constitute a "deed," "bill of sale" or
"assignment" of the Excluded Assets.

         9.11 Amendment or Modification. This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto.

         9.12 Integration. This Agreement supersedes all previous understandings
or agreements between the parties, whether oral or written, with respect to its
subject matter. This document is an integrated agreement which contains the
entire understanding of the parties. No understanding, representation, promise
or agreement, whether oral or written, is intended to be or shall be included in
or form part of this Agreement unless it is contained in a written amendment
hereto executed by the parties hereto after the date of this Agreement.



                                       20
<PAGE>



               IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.


                                    WILLIAMS ENERGY PARTNERS L.P., a Delaware
                                    limited partnership

                                    By:  Williams GP LLC, a Delaware limited
                                         liability company, as general partner


                                         By:   /s/ Don R. Wellendorf
                                            -----------------------------------
                                         Name:  Don R. Wellendorf
                                         Title: Senior V.P., C.F.O. & Treasurer

                                                                  "MLP"

                                    WILLIAMS OLP, L.P., a Delaware limited
                                    partnership

                                    By:  Williams GP LLC, a Delaware limited
                                         liability company, as general partner


                                         By:    /s/ Don R. Wellendorf
                                            -----------------------------------
                                         Name:  Don R. Wellendorf
                                         Title: Senior V.P., C.F.O. & Treasurer

                                                      "OLP"

                                    WILLIAMS GP LLC, a Delaware limited
                                    liability company


                                    By:      /s/ Don R. Wellendorf
                                       ---------------------------------------
                                    Name:    Don R.Wellendorf
                                    Title:   Senior V.P., C.F.O. & Treasurer

                                                    "GP LLC"


                                      [S-P]


<PAGE>


                                    WILLIAMS ENERGY SERVICES, LLC, a Delaware
                                    limited liability company


                                    By:      /s/ Don R. Wellendorf
                                       ---------------------------------------
                                    Name:    Don R. Wellendorf
                                    Title:   Vice President - Enterprise
                                             Development And Planning,
                                             Strategic

                                                     "WES"


                                    WILLIAMS NATURAL GAS LIQUIDS, INC., a
                                    Delaware corporation


                                    By:      /s/ Don R. Wellendorf
                                       ---------------------------------------
                                    Name:    Don R. Wellendorf
                                    Title:   Vice President

                                                    "WNGL"


                                    WILLIAMS NGL, LLC, a Delaware limited
                                    liability company


                                    By:      /s/ Don R. Wellendorf
                                       ---------------------------------------
                                    Name:    Don R. Wellendorf
                                    Title:   Senior V.P., C.F.O. & Treasurer

                                                  "WNGL LLC"


                                    WILLIAMS TERMINALS HOLDINGS, L.P., a
                                    Delaware limited partnership

                                    By:    Williams NGL, LLC, a Delaware
                                           limited liability company,
                                           as general partner


                                           By:   /s/ Don R. Wellendorf
                                              --------------------------------
                                           Name:    Don R. Wellendorf
                                           Title:   Senior V.P., C.F.O. &
                                                    Treasurer

                                                  "Terminals LP"


                                      [S-P]
<PAGE>

                                    WILLIAMS TERMINALS HOLDINGS, L.L.C., a
                                    Delaware limited liability company


                                    By:      /s/ Michael N. Mears
                                       ---------------------------------------
                                    Name:  Michael N. Mears
                                    Title: Vice President

                                                    "WTH LLC"


                                    WILLIAMS AMMONIA PIPELINE, L.P., a Delaware
                                    limited partnership

                                    By:  Williams NGL, LLC, a Delaware limited
                                         liability company, as general partner


                                         By:     /s/ Don R. Wellendorf
                                            ----------------------------------
                                         Name:  Don R. Wellendorf
                                         Title: Senior V.P., C.F.O. & Treasurer

                                                    "WAP LP"



                                    WILLIAMS BIO-ENERGY, LLC, a Delaware limited
                                    liability company


                                    By:     /s/ Michael N. Mears
                                       ---------------------------------------
                                    Name:  Michael N. Mears
                                    Title: Vice President

                                                    "WBE LLC"



                                     [S-P]
<PAGE>



                                    EXHIBIT A
              TO CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT

Recording Requested by and When Recorded Return to: Vinson & Elkins L.L.P., 3500
First City Tower, Houston, Texas 77002, ATTN: J. Brian Sokolik



                     CONVEYANCE, ASSIGNMENT AND BILL OF SALE


         This Conveyance, Assignment and Bill of Sale (this "Conveyance"),
effective as of ________, 2001 (the "Effective Date"), is from WILLIAMS
TERMINALS HOLDINGS L.P., a Delaware limited partnership (successor by conversion
under Section 266 of the Delaware General Corporation Law to Williams Energy
Ventures, Inc.) (herein called "Grantor"), and in favor of WILLIAMS BIO-ENERGY,
LLC, a Delaware limited liability company, whose mailing address is One Williams
Center, Mail Drop 35-1, Tulsa, Oklahoma 74172 (herein calls "Grantee").


                                    ARTICLE I
                          GRANTING AND HABENDUM CLAUSES

         1.1 Granting and Habendum Clauses.

         For good and valuable consideration, the receipt and sufficiency of
which Grantee hereby acknowledges, Grantor hereby contributes, conveys, assigns,
transfers, delivers, and sets over unto Grantee, its successors and assigns, all
right, title, interests and estate of Grantor in and to the following described
property, to-wit:

         (a) FEE LANDS. THE TRACTS OF LAND USED IN CONNECTION WITH THE OPERATION
OF THE UNITED TERMINAL FACILITY LOCATED AT THE PHOENIX, ARIZONA AIRPORT AND THE
TERMINAL FACILITY LOCATED IN AURORA, OHIO (THE "FACILITIES"), INCLUDING, WITHOUT
LIMITATION, THE TRACTS OR PARCELS OF LAND DESCRIBED ON EXHIBIT A ATTACHED
HERETO, TOGETHER WITH ALL PIPELINES, BUILDINGS, STRUCTURES, IMPROVEMENTS,
EQUIPMENT, APPURTENANCES AND FIXTURES OF EVERY KIND OR NATURE LOCATED ON SAID
PARCELS OF LAND, INCLUDING, WITHOUT LIMITATION, ALL STORAGE TANKS, FITTINGS,
VALVES, CONNECTIONS, CATHODIC OR ELECTRIC PROTECTION UNITS, BYPASSES,
REGULATORS, METERS, PUMPS, ENGINES, PIPES, GATES, TELEPHONE AND TELEGRAPH LINES,
ELECTRIC POWER LINES, POLES, WIRES, CASINGS, RADIO TOWERS AND FIXTURES,
TERMINALS, DOCKS, PIERS AND TRUCK RACKS LOCATED ON SAID LANDS (COLLECTIVELY, THE
"FEE LANDS" AND SINGULARLY, THE "FEE LAND");

         (b) EASEMENTS. THE EASEMENTS, RIGHTS OF WAY, SERVITUDES, LEASES,
SURFACE RIGHTS, INTERESTS IN LAND, PERMITS, LICENSES AND GRANTS, AND ALL
AMENDMENTS TO EACH THEREOF USED IN CONNECTION WITH THE OPERATION OF THE
FACILITIES, INCLUDING, WITHOUT LIMITATION, THOSE DESCRIBED ON EXHIBIT A HERETO,
TOGETHER WITH ALL PRESCRIPTIVE RIGHTS AND ALL FRANCHISES, PRIVILEGES, PERMITS,
GRANTS, LEASES, AND CONSENTS IN FAVOR OF GRANTOR, OR GRANTOR'S PREDECESSORS IN
TITLE, IN, ON, OVER AND UNDER LANDS, ROADS, HIGHWAYS, RAILROADS, RIVERS, CANALS
DITCHES, BRIDGES, PARKS, PUBLIC



                                    Exhibit A
              to Contribution, Conveyance and Assumption Agreement
                                        1

<PAGE>

GROUNDS OR STRUCTURES, OR ELSEWHERE, AND ALL RIGHTS INCIDENT THERETO, RIGHTS
UNDER CONDEMNATION JUDGMENTS, JUDGMENTS ON DECLARATION OF TAKING, AND PERMITS
AND GRANTS FOR THE INSTALLATION, MAINTENANCE, REPAIR, REMOVAL AND OPERATION OF
THE PIPELINES (AS HEREINAFTER DEFINED);

         (c) PIPELINES. THE PRESENTLY EXISTING PIPELINES LOCATED IN, ON, OVER,
UNDER OR ADJACENT TO THE PROPERTY DESCRIBED IN (A) AND (B) ABOVE, TOGETHER WITH
ALL BUILDINGS, STRUCTURES, IMPROVEMENTS, FACILITIES, EQUIPMENT AND APPURTENANCES
OF EVERY KIND OR NATURE THAT ARE A PART OF, AFFIXED TO OR USED IN CONNECTION
THEREWITH; AND

         (d) OTHER INTERESTS. WITH RESPECT TO THE PROPERTY DESCRIBED IN SECTIONS
1.1(A) THROUGH (C), ALL AND SINGULAR TENEMENTS, HEREDITAMENTS AND APPURTENANCES
BELONGING OR IN ANY WISE APPERTAINING TO SUCH PROPERTY, OR ANY PART THEREOF,
INCLUDING, WITHOUT LIMITATION, ALL REVERSIONARY INTERESTS AND REVERSIONS,
REMAINDERS, AFTER-ACQUIRED TITLE, AND ALL THE RIGHT, TITLE, INTEREST, ESTATE AND
CLAIM WHATSOEVER, AT LAW AS WELL AS IN EQUITY, OF GRANTOR IN AND TO THE ABOVE
DESCRIBED PROPERTY FROM AND AFTER THE EFFECTIVE DATE.

         The property described in (a) through (d) of this Section 1.1 shall be
referred to herein collectively as the "Subject Property".

         TO HAVE AND TO HOLD the Subject Property, subject to the terms and
conditions hereof, unto Grantee, its successors and assigns, forever.


                                   ARTICLE II
                      ENCUMBRANCES AND WARRANTY DISCLAIMERS

         2.1 Permitted Encumbrances.

         This Conveyance is made and accepted expressly subject to (a) the terms
and conditions set forth in such conveyances, assignments, bills of sale and
other instruments as are described in Exhibit A and to all liens, charges,
encumbrances, contracts, agreements, instruments, obligations, defects,
restrictions, security interests, options or preferential rights to purchase,
adverse claims, reservations, exceptions, easements, rights-of-way, conditions,
leases, other matters affecting the Subject Property or to which it is subject;
and (b) to all matters that a current on the ground survey or visual inspection
would reflect.

         2.2 Contributions Agreement.

         This Conveyance is expressly made subject to the terms and conditions
of that certain Contribution, Conveyance and Assumption Agreement dated as of
__________, 2001, among Grantor, Grantee and the other parties thereto (the
"Contribution Agreement"). All capitalized terms used herein shall have the
meanings given to such terms in the Contribution Agreement, unless otherwise
defined herein. Nothing contained in this Conveyance shall in any way affect the
provisions set forth in the Contribution Agreement nor shall this Conveyance
expand or contract any rights or remedies under the Contribution Agreement,
including without limitation any rights to indemnification specified therein.
This Conveyance is intended only to effect the transfer of the


                                    Exhibit A
              to Contribution, Conveyance and Assumption Agreement
                                       -2-

<PAGE>


Subject Property to Grantee as provided for in the Contribution Agreement and
shall be governed entirely in accordance with the terms and conditions of the
Contribution Agreement. In the event of a conflict between the terms of this
Conveyance and the terms of the Contribution Agreement, the terms of the
Contribution Agreement shall prevail.

         2.3 Disclaimer of Warranties; Subrogation.

         Except as expressly provided herein or in the Contribution Agreement,
this Conveyance is made, and is accepted by Grantee, without warranty of title,
express, implied or statutory, and without recourse, but with full substitution
and subrogation of Grantee, and all persons claiming by, through, and under
Grantee, to the extent assignable, in and to all covenants and warranties by the
predecessors in title of Grantor and with full subrogation of all rights
accruing under applicable statutes of limitation or prescription and all rights
of action of warranty against all former owners of the Subject Property. Except
as expressly provided herein or in the Contribution Agreement, any covenants
implied by statute or by the use of the words "convey", "sell", "assign",
"transfer", "deliver", or "set over" or any of them or any other words used in
this Conveyance, are hereby expressly disclaimed, waived and negated.


                                   ARTICLE III
                                  MISCELLANEOUS


         3.1 Further Assurances.

         Grantor and Grantee agree to take all such further actions and to
execute, acknowledge and deliver all such further documents that are necessary
or useful in carrying out the purposes of this Conveyance. So long as authorized
by applicable law so to do, Grantor agrees to execute, acknowledge and deliver
to Grantee all such other additional instruments, notices, affidavits, deeds,
conveyances, assignments and other documents and to do all such other and
further acts and things as may be necessary or useful to more fully and
effectively grant, bargain, assign, convey, transfer and deliver to Grantee the
Subject Property conveyed hereby or intended so to be conveyed.

         3.2 Successors and Assigns; No Third Party Beneficiary.

         This Conveyance shall be binding upon, and shall and inure to the
benefit of, Grantor and Grantee and their successors and assigns. The provisions
of this Conveyance are not intended to and do not create rights in any other
person or entity or confer upon any other person or entity any benefits, rights
or remedies and no person or entity is or is intended to be a third party
beneficiary of any of the provisions of this Conveyance.

         3.3 Governing Law.

         This Conveyance and the legal relations between the parties shall be
governed by, and construed in accordance with, the laws of the State of
Oklahoma, excluding any conflict of law rule which would refer any issue to the
laws of another jurisdiction, except when it is mandatory that the law of the
jurisdiction wherein the Subject Property is located shall apply.



                                    Exhibit A
              to Contribution, Conveyance and Assumption Agreement
                                       -3-

<PAGE>

         3.5 Exhibits.

         Reference is made to Exhibit A which is attached hereto and made a part
hereof for all purposes. Reference in Exhibit A to an instrument on file in the
public records is made for all purposes, but shall not imply that such
instrument is valid, binding or enforceable or affects any Subject Property nor
creates any right, title, interest or claim in favor of any party other than
Grantor and Grantee, respectively.

         3.6 Headings; References; Defined Terms.

         All Section headings in this Conveyance are for convenience only and
shall not be deemed to control or affect the meaning or construction of any of
the provisions hereof. The words "hereof", "herein" and "hereunder" and words of
similar import, when used in this Conveyance, shall refer to this Conveyance as
a whole, including, without limitation, all Schedules and Exhibits attached
hereto, and not to any particular provision of this Conveyance.

         3.7 Counterparts.

         This Conveyance may be executed in any number of counterparts, all of
which together shall constitute one agreement binding on the parties hereto.

         3.8 Severability.

         If any of the provisions of this Conveyance are held by any court of
competent jurisdiction to contravene, or to be invalid under, the laws of any
political body having jurisdiction over the subject matter hereof, such
contravention or invalidity shall not invalidate the entire agreement. Instead,
this Conveyance shall be construed as if it did not contain the particular
provision or provisions held to be invalid and an equitable adjustment shall be
made and necessary provision added so as to give effect to the intention of the
parties as expressed in this Conveyance at the time of execution of this
Conveyance.



                                    Exhibit A
              to Contribution, Conveyance and Assumption Agreement
                                       -4-

<PAGE>



         IN WITNESS WHEREOF, this Conveyance has been duly executed by the
parties hereto on the dates of the acknowledgments set forth below, to be
effective, however, as of the Effective Date.

                                          GRANTOR:

                                          WILLIAMS TERMINALS HOLDINGS L.P.,
                                          a Delaware limited partnership

                                          By:  Williams NGL, LLC, a Delaware
                                               limited liability company,
                                               as general partner


                                               By:
                                                  ----------------------------
                                                  Name:   Don R. Wellendorf
                                                  Title:  Senior V.P., C.F.O. &
                                                          Treasurer


                                          GRANTEE:

                                          WILLIAMS BIO-ENERGY, LLC, a Delaware
                                          limited liability company


                                          By:
                                             ---------------------------------
                                          Name:
                                          Title:



                                    Exhibit A
              to Contribution, Conveyance and Assumption Agreement
                                       -5-

<PAGE>




Attachment:   Exhibit A: Fee Lands, Easements, Leases, Rights-of-Way, Permits,
              Licenses, Etc.

STATE OF OKLAHOMA          )
                           ) SS.
COUNTY OF TULSA            )


         This instrument was acknowledged before me on the ____ day of
______________, 2001, by Don Wellendorf, Senior V.P., C.F.O. and Treasurer of
Williams NGL, LLC, a Delaware limited liability company and General Partner of
WILLIAMS TERMINALS HOLDING, L.P., a Delaware limited partnership, on behalf of
and in its capacity as General Partner of WILLIAMS TERMINALS HOLDING, L.P.


                                                  ----------------------------
                                                  NOTARY PUBLIC


My Commission Expires:

----------------------------


STATE OF OKLAHOMA          )
                           ) SS.
COUNTY OF TULSA            )


         This instrument was acknowledged before me on the ____ day of
______________, 2001, by________________, __________________ of WILLIAMS
BIO-ENERGY LLC, a Delaware limited liability company, on behalf of WILLIAMS
BIO-ENERGY LLC.


                                                  ----------------------------
                                                  NOTARY PUBLIC


My Commission Expires:


----------------------------


                                    Exhibit A
              to Contribution, Conveyance and Assumption Agreement
                                       -6-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(C)
<SEQUENCE>8
<FILENAME>d94597ex10-c.txt
<DESCRIPTION>OMNIBUS AGREEMENT
<TEXT>
<PAGE>
                                                                  EXHIBIT 10(c)



                                                                EXECUTION COPY



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

                                OMNIBUS AGREEMENT

                                      among

                          THE WILLIAMS COMPANIES, INC.

                          WILLIAMS ENERGY SERVICES, LLC

                       WILLIAMS NATURAL GAS LIQUIDS, INC.

                         WILLIAMS PIPE LINE COMPANY, LLC

                    WILLIAMS INFORMATION SERVICES CORPORATION

                          WILLIAMS ENERGY PARTNERS L.P.

                               WILLIAMS OLP, L.P.

                                       and

                                 WILLIAMS GP LLC


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




<PAGE>


                                OMNIBUS AGREEMENT


         THIS OMNIBUS AGREEMENT is entered into on, and effective as of, the
Closing Date among The Williams Companies, Inc., a Delaware corporation
("Williams"), Williams Energy Services, LLC a Delaware limited liability company
("WES"), Williams Natural Gas Liquids, Inc., a Delaware corporation ("WNGL"),
Williams Pipe Line Company, LLC, a Delaware limited liability company ("Williams
Pipe Line"), Williams Information Services Corporation, a Delaware corporation
("WISC"), Williams Energy Partners L.P., a Delaware limited partnership (the
"MLP"), Williams GP LLC, a Delaware limited liability company (the "General
Partner") and Williams OLP, L.P., a Delaware limited partnership (the "OLP").


                                   RECITALS:


         1. Williams, WES, WNGL, the MLP, the OLP and the General Partner, for
itself and in its capacity as the general partner of the MLP and the OLP, desire
by their execution of this Agreement to evidence their understanding, as more
fully set forth in Article II of this Agreement, with respect to (a) those
business opportunities that Williams will not avail itself of during the
Applicable Period unless each of the MLP and the OLP has declined to engage in
such business opportunity for its own account and (b) the procedures whereby
such business opportunities are to be offered to the MLP and the OLP and
accepted or declined.

         2. WES, WNGL, the General Partner, the MLP and the OLP desire by their
execution of this Agreement to evidence their understanding, as more fully set
forth in Article III of this Agreement, with respect to certain indemnification
obligations of WES and WNGL in favor of the Partnership Entities (as defined
herein).

         3. Williams, WES, WNGL, the General Partner, the MLP and the OLP desire
by their execution of this Agreement to evidence their understanding, as more
fully set forth in Article IV of this Agreement, with respect to the general and
administrative expenses to be reimbursed by the MLP to Williams.

         4. Williams, Williams Pipe Line and WISC (the "Licensors") and the
Partnership Entities desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article V of this Agreement,
with respect to grants of intellectual property from the Licensors to the
Partnership Entities.

         5. Williams, WES, WNGL, the General Partner, the MLP and the OLP desire
by their execution of this Agreement to evidence their understanding, as more
fully set forth in Article VI of this Agreement, with respect to certain capital
expenditures to be reimbursed by Williams to the MLP.

         In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:


                                      -2-
<PAGE>


                                    ARTICLE I
                                   DEFINITIONS

         1.1 DEFINITIONS. (a) Capitalized terms used herein but not defined
shall have the meanings given them in the MLP Agreement.

         (b) As used in this Agreement, the following terms shall have the
respective meanings set forth below:

                  "Agreement" means this Omnibus Agreement, as it may be
         amended, modified, or supplemented from time to time.

                  "Applicable Period" means the period commencing on the Closing
         Date and terminating on the date on which the General Partner (or any
         Person that directly, or indirectly through one or more intermediaries,
         is controlled by or under common control with Williams) ceases to be
         the general partner of the MLP and the OLP.

                  "Assets" is defined in Section 3.1

                  "Change of Control" means, with respect to any Person (the
         "Applicable Person"), any of the following events: (i) any sale, lease,
         exchange or other transfer (in one transaction or a series of related
         transactions) of all or substantially all of the Applicable Person's
         assets to any other Person unless immediately following such sale,
         lease, exchange or other transfer such assets are owned, directly or
         indirectly, by the Applicable Person; (ii) the consolidation or merger
         of the Applicable Person with or into another Person pursuant to a
         transaction in which the outstanding Voting Stock of the Applicable
         Person is changed into or exchanged for cash, securities or other
         property, other than any such transaction where (a) the outstanding
         Voting Stock of the Applicable Person is changed into or exchanged for
         Voting Stock of the surviving corporation or its parent and (b) the
         holders of the Voting Stock of the Applicable Person immediately prior
         to such transaction own, directly or indirectly, not less than a
         majority of the Voting Stock of the surviving corporation or its parent
         immediately after such transaction; and (iii) a "person" or "group"
         (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act)
         being or becoming the "beneficial owner" (as defined in Rules 13d-3 and
         13d-5 under the Exchange Act) of more than 50% of all of the then
         outstanding Voting Stock of the Applicable Person, except in a merger
         or consolidation which would not constitute a Change of Control under
         clause (ii) above.

                  "Closing Date" means the date of the closing of the initial
         public offering of common units representing limited partner interests
         in the MLP.

                  "Conflicts Committee" is defined in the MLP Agreement.

                  "Control" means the possession, direct or indirect, of the
         power to direct or cause the direction of the management and policies
         of a Person, whether through ownership of voting securities, by
         contract or otherwise.


                                      -3-
<PAGE>

                  "Covered Environmental Losses" is defined in Section 3.1.

                  "Environmental Laws" means all federal, state, and local laws,
         statutes, rules, regulations, orders, and ordinances relating to
         protection of health and the environment including, without limitation,
         the federal Comprehensive Environmental Response, Compensation, and
         Liability Act, the Superfund Amendments Reauthorization Act, the
         Resource Conservation and Recovery Act, the Clean Air Act, the Federal
         Water Pollution Control Act, the Toxic Substances Control Act, the Oil
         Pollution Act, the Safe Drinking Water Act, the Hazardous Materials
         Transportation Act, and other environmental conservation and protection
         laws, each as amended through the Closing Date.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
         amended.

                  "General Partner" means the General Partner and its successors
         as general partner of the MLP and the OLP, unless the context otherwise
         requires.

                  "Licensees" means, for purposes of Article V hereof, the
         Partnership Entities.

                  "Licensors" means, for purposes of Article V hereof, Williams,
         Williams Pipe Line Company and WISC.

                  "Marks" means (i) all trademarks, tradenames, logos and/or
         service marks identified on Schedule I attached hereto and (ii) those
         trademarks, tradenames, service marks or logos associates with the
         Licensors' Software or with the subject matter of other licenses
         granted hereunder.

                  "MLP" is defined in the introduction to this Agreement.

                  "MLP Agreement" means the Amended and Restated Agreement of
         Limited Partnership of the MLP, dated as of the Closing Date, as such
         agreement is in effect on the Closing Date, to which reference is
         hereby made for all purposes of this Agreement. No amendment or
         modification to the MLP Agreement subsequent to the Closing Date shall
         be given effect for the purposes of this Agreement unless consented to
         by each of the parties to this Agreement.

                  "Offer" is defined in Section 2.3.

                  "OLP" is defined in the introduction to this Agreement.

                  "Partnership Entities" means the General Partner, the MLP, the
         OLP and any Person controlled by the General Partner, the MLP or the
         OLP.

                  "Partnership Group" means the MLP, the OLP and any Person
         controlled by such entities.


                                      -4-
<PAGE>

                  "Person" means an individual, corporation, partnership, joint
         venture, trust, limited liability company, unincorporated organization
         or any other entity.

                  "Prospectus" means the final prospectus, dated February 5,
         2001, relating to the initial public offering of common units
         representing limited partnership interests in the MLP, as filed with
         Securities and Exchange Commission pursuant to Rule 424(b) under the
         Securities Act of 1933.

                  "Restricted Assets" is defined in Section 2.1.

                  "Software" means, with respect to the software programs
         identified on Schedule I attached hereto as such exist on the Closing
         Date, (i) the source code, the object code, any enhancements, upgrades,
         modifications and new versions, and (ii) any documentation and
         instructions regarding use.

                  "Voting Stock" means securities of any class of Williams
         entitling the holders thereof to vote on a regular basis in the
         election of members of the board of directors of Williams.

                  "WES" is defined in the introduction to this Agreement.

                  "WISC" is defined in the introduction to this Agreement.

                  "Williams" is defined in the introduction to this Agreement.

                  "Williams Entities" means Williams and any Person controlled
         by Williams, other than the Partnership Entities.

                  "Williams Pipe Line" is defined in the introduction to this
         Agreement.

                  "WNGL" is defined in the introduction to this Agreement.

                                   ARTICLE II
                             BUSINESS OPPORTUNITIES

         2.1 RESTRICTED ASSETS. During the Applicable Period, each of the
Williams Entities shall be prohibited from engaging in or acquiring any business
having assets engaged in the following activities ("Restricted Assets"): (a) the
transportation, storage or distribution of ammonia or related products in the
United States and (b) the ownership and operation of facilities for the
terminalling and storage of refined petroleum products in any state in the
United States, except Alaska and Hawaii.

         2.2 PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 2.1
to the contrary, a Williams Entity may own and operate Restricted Assets under
the following circumstances:

               (a) The Restricted Assets were owned, leased or operated by the
Williams Entities on the date of this Agreement.


                                      -5-
<PAGE>

               (b) The value of the Restricted Assets acquired in a transaction
does not exceed $20 million at the time of the acquisition, as determined by the
Board of Directors of WES, in its sole discretion.

               (c) (i) The value of the Restricted Assets acquired in a
transaction exceeds $20 million at the time of acquisition, as determined by the
Board of Directors of WES, in its sole discretion and (ii) the General Partner
(with the approval of the Conflicts Committee) has elected not to cause a member
of the Partnership Group to pursue such opportunity in accordance with the
procedures set forth in Section 2.3.

               (d) The original cost of Restricted Assets constructed by a
Williams Entity does not exceed $20 million, as determined by the Board of
Directors of WES, in its sole discretion.

               (e) (i) The original cost of Restricted Assets constructed by a
Williams Entity exceeds $20 million, as determined by the Board of Directors of
WES, in its sole discretion and (ii) the General Partner (with the approval of
the Conflicts Committee) has elected not to cause a member of the Partnership
Group to pursue such opportunity in accordance with the procedures set forth in
Section 2.3.

               (f) The Restricted Assets, at the time of acquisition or
construction, are either connected to assets owned by the Williams Entities or
are primarily related to the operations or business of, and are located within
50 miles of, the refinery owned by Williams in Memphis, Tennessee.

         2.3 PROCEDURES. In the event that a Williams Entity acquires or
constructs Restricted Assets valued or having an original cost in excess of $20
million at the time of the acquisition or the completion of construction, as
determined by the Board of Directors of WES, then not later than six months
after the consummation of the acquisition and not later than one year after the
completion of construction by such Williams Entity of the Restricted Assets,
such Williams Entity shall notify the General Partner of such purchase or
construction and offer the MLP the opportunity to purchase such Restricted
Assets. As soon as practicable, but in any event, within 60 days after receipt
of such notification, the General Partner shall notify the Williams Entity that
either (i) the General Partner has elected, with the approval of the Conflicts
Committee, not to cause a member of the Partnership Group to purchase such
Restricted Assets, in which event the Williams Entity shall be forever free to
continue to own or operate such Restricted Assets, or (ii) the General Partner
has elected to cause a member of the Partnership Group to purchase such
Restricted Assets, in which event the following procedures shall be followed:

               (a) Within 30 days of receipt of the notice from the General
Partner that the General Partner has elected to cause a member of the
Partnership Group to purchase the Restricted Assets, the Williams Entity shall
submit an offer to the General Partner to sell the Restricted Assets (the
"Offer") to any member of the Partnership Group on the terms and for the
consideration stated in the Offer.

               (b) The Williams Entity and the General Partner shall negotiate
after receipt of such Offer by the General Partner, the terms on which the
Restricted Assets will be sold to a


                                      -6-
<PAGE>

member of the Partnership Group. The Williams Entity shall provide all
information concerning the business, operations and finances of such Restricted
Assets as may be reasonably requested by the General Partner.

                              (i) If the Williams Entity and the General Partner
               agree on such terms within 60 days after receipt by the General
               Partner of the Offer, a member of the Partnership Group shall
               purchase the Restricted Assets on such terms as soon as
               commercially practicable after such agreement has been reached.

                              (ii) If the Williams Entity and the General
               Partner are unable to agree on the terms of a sale during the
               60-day period after receipt by the General Partner of the Offer,
               the Williams Entity and the General Partner will engage an
               independent investment banking firm with a national reputation to
               determine the fair market value of the Restricted Assets. In
               determining the fair market value of the Restricted Assets, the
               investment banking firm will have access to the proposed sale and
               purchase values for the submitted by Williams and the General
               Partner, respectively. Such investment banking firm will
               determine the value of the Restricted Assets within 30 days and
               furnish the Williams Entity and the General Partner its opinion
               of such value. The fees of the investment banking firm's
               appraisal will be split equally between Williams and the MLP.
               Upon receipt of such opinion, the General Partner will have the
               option, but not the obligation, subject to the approval of the
               Conflicts Committee, to:

                              (iii) (A) cause a member of the Partnership Group
               to purchase the Restricted Assets in accordance with the
               following process:

                                    (1) if the valuation of the investment
                           banking firm is in the range between the proposed
                           sale/purchase values of Williams and the General
                           Partner, a member of the Partnership Group will have
                           the right to purchase the Restricted Assets at the
                           valuation submitted by the investment banking firm;

                                    (2) if the valuation of the investment
                           banking firm is less than the proposed purchase value
                           submitted by the General Partner, a member of the
                           Partnership Group will have the right to purchase the
                           Restricted Assets for the amount submitted by the
                           General Partner; and

                                    (3) if the valuation of the investment
                           banking firm is greater than the proposed sale value
                           submitted by Williams, a member of the Partnership
                           Group will have the right to purchase the Restricted
                           Assets for the amount submitted by Williams; or

                           (B) decline to purchase such Restricted Assets, in
                  which event the Williams Entity forever will be free to
                  continue to own and operate such Restricted Assets.

         2.4 SCOPE OF PROHIBITION. Except as provided in this Article II and the
Partnership Agreement, each Williams Entity shall be free to engage in any
business activity whatsoever, including those that may be in direct competition
with any Partnership Entity.


                                      -7-
<PAGE>

         2.5 ENFORCEMENT. The Williams Entities agree and acknowledge that the
Partnership Group does not have an adequate remedy at law for the breach by the
Williams Entities of the covenants and agreements set forth in this Article II,
and that any breach by the Williams Entities of the covenants and agreements set
forth in Article II would result in irreparable injury to the Partnership Group.
The Williams Entities further agree and acknowledge that any member of the
Partnership Group may, in addition to the other remedies which may be available
to the Partnership Group, file a suit in equity to enjoin the Williams Entities
from such breach, and consent to the issuance of injunctive relief under this
Agreement.

                                  ARTICLE III
                                 INDEMNIFICATION

         3.1 WILLIAMS ENERGY SERVICES ENVIRONMENTAL INDEMNIFICATION. WES shall
indemnify, defend and hold harmless the Partnership Entities from and against
any Covered Environmental Losses relating to the assets of the Partnership
Entities described in the Prospectus that arose prior to the Closing Date (the
"Assets") that become known within three years after the Closing Date and that
exceed all amounts recovered or recoverable by any Partnership Entity under
contractual indemnities from third Persons or under any applicable insurance
policies. "Covered Environmental Losses" mean those non-contingent environmental
losses, costs, damages and expenses suffered or incurred by the Partnership
Entities arising from correction of violations of, or performance of remediation
required by, Environmental Laws in effect at the Closing Date due to events and
conditions associated with the operation of the Assets and occurring before the
Closing Date.

         3.2 LIMITATIONS REGARDING ENVIRONMENTAL INDEMNIFICATION. WES shall have
no indemnification obligation under Section 3.1 for claims made after the third
anniversary of the date of this Agreement. The aggregate liability of WES in
respect of all Covered Environmental Losses under Section 3.1 shall not exceed
$15 million.

         3.3 WNGL RIGHT OF WAY INDEMNIFICATION. WNGL shall indemnify, defend and
hold harmless the Partnership Entities and their successors or assigns for a
period of 15 years after the Closing Date from and against any losses, costs,
damages, expenses and fees suffered or incurred by any of the Partnership
Entities or their successors or assigns as a result of (a) the failure of
Williams Ammonia Pipeline, L.P. or its successors or assigns to be the owner of
such valid and indefeasible easement rights in and to the easements and rights
of way in which the ammonia pipeline is located as of the Closing Date as are
necessary to enable Williams Ammonia Pipeline, L.P. and its successors and
assigns to continue to own and operate the ammonia pipeline in the manner that
it has been owned and operated as of the Closing Date; and (b) the failure of
Williams Ammonia Pipeline, L.P. or its successors and assigns to have the
consents and permits necessary to allow such pipeline to cross the roads,
waterways, railroads and other areas upon which the ammonia pipeline is located
as of the Closing Date.

         3.4 WILLIAMS ENERGY SERVICES RIGHT OF WAY INDEMNIFICATION. WES shall
indemnify, defend and hold harmless, the Partnership Entities and their
successors and assigns, for a period of 15 years after the Closing Date, from
and against any losses, costs, damages, expenses and fees suffered or incurred
by any of the Partnership Entities or their successors or assigns as a result of
(a) the failure of Williams Terminals Holdings, L.P. or its successors and
assigns to be



                                      -8-
<PAGE>

the owner of valid and indefeasible easement rights in and to the easements and
rights of way in which the pipelines that are associated with the marine
terminal facilities at Galena Park, Texas, Corpus Christi, Texas and Marrero,
Louisiana are located, as of the Closing Date, that are necessary to enable
Williams Terminals Holdings, L.P. and its successors and assigns to continue to
own and operate the pipelines in all material respects in the manner that such
pipelines have been owned and operated, prior to the Closing Date; and (b) the
failure of Williams Terminals Holdings, L.P. or its successors and assigns to
have the consents and permits necessary to allow such pipelines to cross roads,
waterways, railroads and other areas upon which such pipelines are located as of
the Closing Date.

         3.5 INDEMNIFICATION PROCEDURES.

                  (a) The Partnership Entities agree that within a reasonable
         period of time after they become aware of facts giving rise to a claim
         for indemnification pursuant to Section 3.1 or Section 3.3, they will
         provide notice thereof in writing to WES or WNGL, as applicable,
         specifying the nature of and specific basis for such claim.

                  (b) WES or WNGL, as applicable, shall have the right to
         control all aspects of the defense of (and any counterclaims with
         respect to) any claims brought against the Partnership Entities that
         are covered by the indemnification set forth in Section 3.1 and Section
         3.3, including, without limitation, the selection of counsel,
         determination of whether to appeal any decision of any court and the
         settling of any such matter or any issues relating thereto; provided,
         however, that no such settlement shall be entered into without the
         consent of the Partnership Entities unless it includes a full release
         of the Partnership Entities from such matter or issues, as the case may
         be.

                  (c) The Partnership Entities agree, at their own cost and
         expense, to cooperate fully with WES or WNGL, as applicable, with
         respect to all aspects of the defense of any claims covered by the
         indemnification set forth in Section 3.1 and Section 3.3, including,
         without limitation, the prompt furnishing to WES or WNGL, as
         applicable, of any correspondence or other notice relating thereto that
         the Partnership Entities may receive, permitting the names of the
         Partnership Entities to be utilized in connection with such defense,
         the making available to WES or WNGL, as applicable, of any files,
         records or other information of the Partnership Entities that WES or
         WNGL considers relevant to such defense and the making available to WES
         or WNGL, as applicable, of any employees of the Partnership Entities;
         provided, however, that in connection therewith WES and WNGL agree to
         use reasonable efforts to minimize the impact thereof on the operations
         of such Partnership Entities. In no event shall the obligation of the
         Partnership Entities to cooperate with WES or WNGL as set forth in the
         immediately preceding sentence be construed as imposing upon the
         Partnership Entities an obligation to hire and pay for counsel in
         connection with the defense of any claims covered by the
         indemnification set forth in this Article III; provided, however, that
         the Partnership Entities may, at their own option, cost and expense,
         hire and pay for counsel in connection with any such defense. WES and
         WNGL agree to keep any such counsel hired by the Partnership Entities
         reasonably informed as to the status of any such defense, but WES and
         WNGL, as applicable, shall have the right to retain sole control over
         such defense.


                                      -9-
<PAGE>

                  (d) In determining the amount of any loss, cost, damage or
         expense for which any of the Partnership Entities are entitled to
         indemnification under this Agreement, the gross amount of the
         indemnification will be reduced by (i) any insurance proceeds realized
         or to be realized by the Partnership Entities, and such correlative
         insurance benefit shall be net of any incremental insurance premium
         that becomes due and payable by the Partnership Entities as a result of
         such claim and (ii) all amounts recovered or recoverable by any
         Partnership Entity under contractual indemnities from third Persons as
         described in Section 3.1

                                   ARTICLE IV
                       GENERAL AND ADMINISTRATIVE EXPENSES

         4.1 INITIAL GENERAL AND ADMINISTRATIVE EXPENSES. The initial general
and administrative expenses to be reimbursed by the Partnership Group to
Williams will not exceed $6 million for the year 2001, excluding expenses
associated with incentive compensation plans (the "Baseline G&A"). The Baseline
G&A will be prorated to reflect the actual number of months for which services
are actually provided to the Partnership Group by Williams, including the
entirety of the month in which such services begin.

         4.2 SUBSEQUENT GENERAL AND ADMINISTRATIVE EXPENSES. The Baseline G&A
may increase only as follows during the first ten years of the MLP:

                  (a) Each year, the Baseline G&A (as adjusted in accordance
         with this Article IV) may be increased by no more than the greater of
         7% per year or the percentage increase in the Consumer Price Index -
         All Urban Consumers, U.S. City Average, Not Seasonally Adjusted.

                  (b) If the Partnership Group makes an acquisition, the
         Baseline G&A will be increased based upon the amount of general and
         administrative expense included in the valuation of such acquisition
         made by the General Partner on a pro forma basis for the succeeding
         four fiscal quarters. The portion of this pro forma amount that is
         proportionate to the remainder of the MLP fiscal year in which the
         acquisition is made will be added to the Baseline G&A for that year.
         The entire pro forma amount will be added to Baseline G&A in the
         succeeding fiscal years.

                                   ARTICLE V
                                LICENSE AGREEMENT

         5.1 GRANT OF LICENSE. Subject to the terms and conditions herein, the
Licensors hereby grant to each Licensee, and each Licensee hereby accepts, a
non-exclusive, world-wide, non-transferable, royalty-free, perpetual license
during the term of this Agreement on an "AS IS, WHERE IS" basis to use the
Software solely for the internal use by each Licensee's employees for the
benefit of such Licensee, any Person directly or indirectly controlled by or
under common control with such Licensee, but specifically excluding disclosure
to any third parties including, without limitation, any customer of such
Licensee.

         5.2 RESTRICTIONS ON SOFTWARE. (a) Each of the Licensees agrees that it
shall not sublicense, license, disclose or otherwise make available any part of
the Software to any person



                                      -10-
<PAGE>

other than: (i) each of Licensees' employees who is required to have access to
the Software; and (ii) each of Licensees' consultants who is required to have
access to the Software and who has executed a non-disclosure agreement
containing obligations of confidence consistent with the restrictions set forth
in this Agreement.

                  (b) Each Licensee shall keep the Software in a secure
         environment and shall take reasonable commercial steps necessary to
         protect the Software, or any part thereof, from unauthorized disclosure
         or release.

                  (c) Each Licensee shall be entitled to create a sufficient
         number of copies of the Software for backup and archival purposes only
         provided that such Licensee reproduces and applies all copyright
         notices and any other proprietary rights notices that appear on the
         original copies supplied by Licensors. Licensees shall not be permitted
         to adapt, create derivative works of, translate, perform or display
         publicly, post or otherwise modify the Software.

                  (d) Each of the Licensees agrees that it shall not use the
         Software for any development or analysis purposes whatsoever and that
         it shall not decompile or reverse engineer the Software.

                  (e) Each Licensee acknowledges and agrees that Licensors shall
         own all intellectual property rights in and to the Software.

         5.3 GRANT OF LICENSE. Subject to the terms and conditions herein,
Licensors hereby grant to Licensees the right and license to use the Marks
solely in connection with the Licensees' businesses and the services performed
therewith within the United States during the term of this Agreement.

         5.4 RESTRICTIONS ON MARKS. In order to ensure the quality of uses under
the Marks, and to protect the goodwill of the Marks, Licensees agree as follows:

                  (a) Licensees will only use the Marks in formats approved by
         Licensors and only in strict association with the Licensees' businesses
         and the services performed therewith;

                  (b) Prior to publishing any new format or appearance of the
         Marks or the advertising or promotional materials, Licensees shall
         first provide such format, appearance or materials to Licensors for its
         approval. If Licensors do not inform Licensees in writing within
         fourteen (14) days from the date of the receipt of such new format,
         appearance, or materials that such new format, appearance, or materials
         is acceptable, then such new format, appearance or materials shall be
         deemed to be unacceptable and disapproved by Licensors. Licensors may
         withhold approval of any proposed changes to the format, appearance or
         materials which Licensees propose to use in Licensors' sole discretion;

                    (c) Licensees shall not use any other trademarks, service
        marks, trade names or logos in connection with the Marks or use the
        Marks or any trademark or


                                      -11-
<PAGE>

         servicemark confusingly similar to the Marks after the termination of
         this Agreement. Licensors will not use the Marks in such a manner so as
         to impair the validity or enforceability or in any way disparage or
         dilute the Marks.

         5.5 OWNERSHIP. Licensors shall own all right, title and interest,
including all goodwill relating thereto, in and to the Marks, and all trademark
rights embodied therein shall at all times be solely vested in Licensors.
Licensors shall also own all right, title, and interest in and to the Software.
Licensees have no right, title, interest or claim of ownership in the Marks or
the Software, except for the licenses granted in this Agreement. All use of the
Marks shall inure to the benefit of Licensors. Licensees agree that they will
not attack the title of Licensors in and to the Marks or the Software.

         5.6 CONFIDENTIALITY. The Licensees shall maintain in strictest
confidence all confidential or nonpublic information or material disclosed by
Licensors embodied in or reflected in the Software and in the materials supplied
hereunder in connection with the license of the Marks, whether in writing or
orally and whether or not marked as confidential. Such confidential information
includes, but is not limited to, algorithms, inventions, ideas, processes,
computer system architecture and design, operator interfaces, operational
systems, technical information, technical specifications, training and
instruction manuals, and the like. In furtherance of the foregoing
confidentiality obligation, Licensees shall limit disclosure of such Software
and other confidential information to those of their employees, contractors or
agents having a need to access the Software and confidential information for the
purpose of exercising rights granted hereunder.

         5.7 ESTOPPEL. Nothing in this Agreement shall be construed as
conferring by implication, estoppel, or otherwise upon Licensees (a) any license
or other right under the intellectual property rights of Licensors other than
the license granted herein to the Software and Marks as set forth expressly
herein or (b) any license rights other than those expressly granted herein.

         5.8 WARRANTIES; DISCLAIMERS.

               (a) The Licensors represent and warrant that (i) they own and
have the right to license the Software and the Marks licensed under this
Agreement, (ii) the Software and the Marks do not infringe upon the rights of
any third parties and (iii) the Software includes all software owned or licensed
by Licensors that is necessary and sufficient to operate the Assets in the
manner in which they are currently operated by the Licensors or their
affiliates.

               (b) EXCEPT FOR THE WARRANTIES AND REPRESENTATIONS DESCRIBED IN
SECTION 5.8(a), LICENSORS DISCLAIM ANY AND ALL WARRANTIES, CONDITIONS OR
REPRESENTATIONS (EXPRESS OR IMPLIED, ORAL OR WRITTEN) WITH RESPECT TO THE
SUBJECT MATTER HEREOF, OR ANY PART THEREOF, INCLUDING ANY AND ALL IMPLIED
WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS OR SUITABILITY FOR
ANY PURPOSE (WHETHER THE PARTY KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR
IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) WHETHER ALLEGED TO ARISE BY LAW,
BY REASON OF CUSTOM OR USAGE IN THE TRADE OR BY COURSE OF DEALING. THE SOFTWARE
AND DOCUMENTATION LICENSED


                                      -12-
<PAGE>

HEREUNDER IS LICENSED "AS IS" AND LICENSEES AGREE THAT THE SOFTWARE MAY HAVE
BUGS AND THAT INTERRUPTIONS IN ITS OPERATION MAY OCCUR.

         5.9 INDEMNIFICATION.

               (a) Each Licensee shall jointly and severally, and to the fullest
extent permitted by applicable law, defend, indemnify and hold harmless the
Licensors and their respective successors and assigns authorized hereunder and
any of their respective officers, directors, employees, agents and
representatives from and against any and all claims, demands, damages, losses,
costs and expenses arising out of or related in any way to this Article V to the
extent such claims are attributable to such Licensee's failure to comply with
its obligations under this Article V or Licensee's negligence or the negligence
of Licensee's employees, agents, subcontractors or other representatives
regarding this Article V.

               (b) Each Licensor shall jointly and severally, and to the fullest
extent permitted by applicable law, defend, indemnify and hold harmless the
Licensees and their respective successors and assigns authorized hereunder and
any of their respective officers, directors, employees, agents and
representatives from and against any and all claims, demands, damages, losses,
costs and expenses arising out of or related in any way to this Article V to the
extent such claims are attributable to (i) Licensor's failure to comply with its
obligations under this Article V, (ii) any claim of infringement or ownership
asserted by a third party as to the Software or Marks or (iii) Licensor's
negligence or the negligence of Licensor's employees, agents, subcontractors or
other representatives regarding this Article V.

                                   ARTICLE VI
                              CAPITAL EXPENDITURES

         6.1 WILLIAMS REIMBURSEMENT OF PARTNERSHIP GROUP MAINTENANCE CAPITAL
EXPENDITURES. Williams will reimburse the Partnership Group for maintenance
capital expenditures in excess of $4.9 million made by the Partnership Group in
each year over a two year period beginning in the year 2001, subject to a
maximum aggregate reimbursement of $15.0 million over the two year period.

                                  ARTICLE VII
                                  MISCELLANEOUS

         7.1 CHOICE OF LAW; SUBMISSION TO JURISDICTION. This Agreement shall be
subject to and governed by the laws of the State of Oklahoma, excluding any
conflicts-of-law rule or principle that might refer the construction or
interpretation of this Agreement to the laws of another state. Each party hereby
submits to the jurisdiction of the state and federal courts in the State of
Oklahoma and to venue in Tulsa, Oklahoma.

         7.2 NOTICE. All notices or requests or consents provided for or
permitted to be given pursuant to this Agreement must be in writing and must be
given by depositing same in the United States mail, addressed to the Person to
be notified, postpaid, and registered or certified with return receipt requested
or by delivering such notice in person or by telecopier or telegram to such
party. Notice given by personal delivery or mail shall be effective upon actual
receipt. Notice given by telegram or telecopier shall be effective upon actual
receipt if received during


                                      -13-
<PAGE>

the recipient's normal business hours, or at the beginning of the recipient's
next business day after receipt if not received during the recipient's normal
business hours. All notices to be sent to a party pursuant to this Agreement
shall be sent to or made at the address set forth below such party's signature
to this Agreement, or at such other address as such party may stipulate to the
other parties in the manner provided in this Section 7.2.

         7.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties relating to the matters contained herein, superseding all prior
contracts or agreements, whether oral or written, relating to the matters
contained herein.

         7.4 TERMINATION. This Agreement will terminate upon a Change in Control
of the General Partner. In addition, the provisions of Article II of this
Agreement may be terminated by Williams upon a Change of Control of Williams. In
the event of termination of this Agreement, the Licensees' right to utilize or
possess the Software and the Marks licensed under this Agreement shall
automatically cease. Within 15 days after the termination of this Agreement, the
Licensees shall (i) return to Licensors or destroy the original and all copies,
in any form, of all Software and Inventions, or parts thereof, for which it has
received a license hereunder and (ii) provide a certified affidavit executed by
an officer of the Licensees to the effect that the destruction has been
completed.

         7.5 EFFECT OF WAIVER OR CONSENT. No waiver or consent, express or
implied, by any party to or of any breach or default by any Person in the
performance by such Person of its obligations hereunder shall be deemed or
construed to be a consent or waiver to or of any other breach or default in the
performance by such Person of the same or any other obligations of such Person
hereunder. Failure on the part of a party to complain of any act of any Person
or to declare any Person in default, irrespective of how long such failure
continues, shall not constitute a waiver by such party of its rights hereunder
until the applicable statute of limitations period has run.

         7.6 AMENDMENT OR MODIFICATION. This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto; provided, however, that the MLP and the OLP may not, without the prior
approval of the Conflicts Committee, agree to any amendment or modification of
this Agreement that, in the reasonable discretion of the General Partner, will
adversely affect the holders of Common Units. Each such instrument shall be
reduced to writing and shall be designated on its face an "Amendment" or an
"Addendum" to this Agreement.

         7.7 ASSIGNMENT. No party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other parties
hereto.

         7.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.

         7.9 SEVERABILITY. If any provision of this Agreement or the application
thereof to any Person or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.


                                      -14-
<PAGE>

         7.10 GENDER, PARTS, ARTICLES AND SECTIONS. Whenever the context
requires, the gender of all words used in this Agreement shall include the
masculine, feminine and neuter, and the number of all words shall include the
singular and plural. All references to Article numbers and Section numbers refer
to Articles and Sections of this Agreement.

         7.11 FURTHER ASSURANCES. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.

         7.12 WITHHOLDING OR GRANTING OF CONSENT. Each party may, with respect
to any consent or approval that it is entitled to grant pursuant to this
Agreement, grant or withhold such consent or approval in its sole and
uncontrolled discretion, with or without cause, and subject to such conditions
as it shall deem appropriate.

         7.13 U.S. CURRENCY. All sums and amounts payable to or to be payable
pursuant to the provisions of this Agreement shall be payable in coin or
currency of the United States of America that, at the time of payment, is legal
tender for the payment of public and private debts in the United States of
America.

         7.14 LAWS AND REGULATIONS. Notwithstanding any provision of this
Agreement to the contrary, no party this Agreement shall be required to take any
act, or fail to take any act, under this Agreement if the effect thereof would
be to cause such party to be in violation of any applicable law, statute, rule
or regulation.

         7.15 NEGOTIATION OF RIGHTS OF LIMITED PARTNERS, ASSIGNEES, AND THIRD
PARTIES. The provisions of this Agreement are enforceable solely by the parties
to this Agreement, and no Limited Partner, Assignee or other Person of the MLP
or the OLP shall have the right, separate and apart from the MLP or the OLP, to
enforce any provision of this Agreement or to compel any party to this Agreement
to comply with the terms of this Agreement.




                                      -15-
<PAGE>


         IN WITNESS WHEREOF, the Parties have executed this Agreement on, and
effective as of, the Closing Date.


                                     THE WILLIAMS COMPANIES, INC.


                                     By:     /s/ William G. von Glahn
                                         --------------------------------------
                                         Name:   William G. von Glahn
                                         Title:  Senior Vice President

                                     Address for Notice:

                                     One Williams Center
                                     Tulsa, Oklahoma  74172
                                     Telecopy Number:  (918) 573-2296


                                     WILLIAMS ENERGY SERVICES, LLC


                                     By:     /s/ Don R. Wellendorf
                                         --------------------------------------
                                         Name:   Don R. Wellendorf
                                         Title:  Vice President -
                                                 Enterprise Development
                                                 And Planning, Strategic

                                     Address for Notice:

                                     One Williams Center
                                     Tulsa, Oklahoma  74172
                                     Telecopy Number:  (918) 573-2296


                                     WILLIAMS NATURAL GAS LIQUIDS, INC.


                                     By:     /s/ Don R. Wellendorf
                                         --------------------------------------
                                         Name:   Don R. Wellendorf
                                         Title:  Vice President

                                     Address for Notice:

                                     One Williams Center
                                     Tulsa, Oklahoma  74172
                                     Telecopy Number:  (918) 573-2296


                                      -16-
<PAGE>


                                     WILLIAMS PIPE LINE COMPANY, LLC


                                     By:     /s/ Michael N. Mears
                                         --------------------------------------
                                         Name:   Michael N. Mears
                                         Title:  Vice President -
                                                 Transportation and Terminals

                                     Address for Notice:

                                     One Williams Center
                                     Tulsa, Oklahoma  74172
                                     Telecopy Number:  (918) 573-2296

                                     WILLIAMS INFORMATION SERVICES CORPORATION


                                     By:     /s/ William G. von Glahn
                                         --------------------------------------
                                         Name:   William G. von Glahn
                                         Title:  Vice President

                                     Address for Notice:

                                     One Williams Center
                                     Tulsa, Oklahoma  74172
                                     Telecopy Number:  (918) 573-2296


                                     WILLIAMS ENERGY PARTNERS L.P.

                                     By:    WILLIAMS GP LLC, its sole
                                            general partner


                                            By:    /s/ Don R. Wellendorf
                                               --------------------------------
                                            Name:   Don R. Wellendorf
                                            Title:  Senior V.P., C.F.O. &
                                                    Treasurer

                                     Address for Notice:

                                     One Williams Center
                                     Tulsa, Oklahoma  74172
                                     Telecopy Number:  (918) 573-2296



                                      -17-
<PAGE>

                                     WILLIAMS OLP, L.P.

                                     By:    WILLIAMS GP LLC, its sole
                                            general partner



                                            By:   /s/ Don R. Wellendorf
                                               --------------------------------
                                               Name:   Don R. Wellendorf
                                               Title:  Senior V.P., C.F.O. &
                                                       Treasurer

                                     Address for Notice:

                                     One Williams Center
                                     Tulsa, Oklahoma  74172
                                     Telecopy Number:  (918) 573-2296


                                     WILLIAMS GP LLC



                                     By:    /s/ Don R. Wellendorf
                                         --------------------------------------
                                         Name:  Don R. Wellendorf
                                         Title: Senior V. P., C.F.O. & Treasurer

                                     Address for Notice:

                                     One Williams Center
                                     Tulsa, Oklahoma  74172
                                     Telecopy Number:  (918) 573-2296


                                      -18-
<PAGE>


                                   SCHEDULE I
                              INTELLECTUAL PROPERTY

Software and Inventions:

Automated Transportation Logistics Activity System, a/k/a "Atlas 2000" Terminal
Automation System, a/k/a "TAS" Scquire Manage and Analyze Geographic Inventory
Control, a/k/a "MAGIC" Supervisory Control and Data system, a/k/a "SCADA"
Customer Information System, a/k/a "CIS"

Marks:

The Williams name and logo necessary for the following MLP name and logo:


[WILLIAMS ENERGY PARTNERS LOGO]





                                      -19-
<PAGE>
                                   AMENDMENT I

         This Amendment I is made this 28th day of January, 2002, to that
certain Omnibus Agreement among The Williams Companies, Inc., Williams Energy
Services, LLC, Williams Natural Gas Liquids, Inc., Williams Pipe Line Company,
LLC, WilliAms Information Services Corporation, Williams Energy Partners L.P.,
Williams GP LLC, and Williams OLP, L.P. dated as of the Closing Date defined
therein, (the "Agreement"). The parties hereto agree as follows:

1.       Article IV, Section 4.1 is amended to read as follows--

     4.1 INITIAL GENERAL AND ADMINISTRATIVE EXPENSES. The initial general and
     administrative expenses to be reimbursed by the Partnership Group to
     Williams will not exceed $6 million for the year 2001, excluding expenses
     associated with the Williams Energy Partners Long Term Incentive Plan (the
     "Baseline G&A"). The Baseline G&A will be prorated to reflect the actual
     number of months for which services are actually provided to the
     Partnership Group by Williams, including the entirety of the month in which
     such services begin.


2.       Article V, Section 5.1 is amended to read as follows--

         5.1 GRANT OF LICENSE. The Licensors hereby grant to each Licensee, and
     each licensee hereby accepts, a non-exclusive, world-wide,
     non-transferable, royalty-free, perpetual license during the term of this
     Agreement on an "AS IS, WHERE IS" basis to use the Software under the terms
     and conditions provided herein.


3.       Article V, Section 5.2 is amended to read as follows--

         5.2 RESTRICTIONS ON SOFTWARE. (a) Each of the Licensees agrees that it
     shall not sublicense, license, disclose or otherwise make available any
     part of the Software to any person other than: (i) each of Licensees'
     employees who is required to have access to the Software; and (ii) each of
     Licensees' consultants who is required to have access to the Software and
     who has executed a non-disclosure agreement containing obligations of
     confidence consistent with the restrictions set forth in this Agreement.

          (b) Each Licensee shall keep the Software in a secure environment and
     shall take reasonable commercial steps necessary to protect the Software,
     or any part thereof, from unauthorized disclosure or release.

          (c) Each Licensee shall be entitled to create a sufficient number of
     copies of the Software for backup and archival purposes only provided that
     such Licensee reproduces and applies all copyright notices and any other
     proprietary rights notices that appear on the original copies supplied by
     Licensors. Licensees shall not be permitted to adapt, create derivative
     works of, translate, perform or display publicly, post or otherwise modify
     the Software.

          (d) Each of the Licensees agrees that it shall not use the Software
     for any development or analysis purposes whatsoever and that it shall not
     decompile or reverse engineer the Software.



                                   Page 1 of 3
<PAGE>



          (e) Each Licensee acknowledges and agrees that Licensors shall own all
     intellectual property rights in and to the Software.

          (f) The foregoing notwithstanding, the Licensees may sublicense use of
     the object code and any enhancements, upgrades, modifications and new
     versions of Automated Transportation Activity System a/k/a "Atlas 2000" to
     Licensees' customers. Any such sublicense shall be on a non-exclusive,
     non-transferable basis and shall be subject to obligations of confidence
     consistent with the restrictions set forth in this Agreement.


2. Unless defined otherwise herein, terms used in this Amendment I shall have
the same defined meaning as set forth in the Agreement.

     IN WITNESS WHEREOF, the parties have caused this Amendment I to be executed
as of the date first above written.


                                  THE WILLIAMS COMPANIES, INC.

                                  By:       /s/ William G. von Glahn
                                     -------------------------------------------
                                  Name:   William G. von Glahn
                                       -----------------------------------------
                                  Title:  Senior Vice President
                                        ----------------------------------------

                                  WILLIAMS ENERGY SERVICES, LLC

                                  By:       /s/ Don R. Wellendorf
                                     -------------------------------------------
                                  Name:  Don R. Wellendorf
                                  Title: Vice President - Enterprise Development
                                         And Planning, Strategic


                                  WILLIAMS NATURAL GAS LIQUIDS, INC.

                                  By:       /s/ Don R. Wellendorf
                                     -------------------------------------------
                                  Name:  Don R. Wellendorf
                                  Title: Vice President

                                  WILLIAMS PIPE LINE COMPANY, LLC

                                  By:       /s/ Michael Mears
                                     -------------------------------------------
                                  Name:  Michael Mears
                                  Title: Vice President


                                  WILLIAMS INFORMATION SERVICES
                                  CORPORATION

                                  By:       /s/ William G. von Glahn
                                     -------------------------------------------
                                  Name:  William G. von Glahn
                                       -----------------------------------------
                                  Title: Vice President
                                        ----------------------------------------



                                   Page 2 of 3
<PAGE>



                                  WILLIAMS ENERGY PARTNERS L.P.

                                  By: WILLIAMS GP LLC, its general partner

                                  By:       /s/ Don R. Wellendorf
                                     -------------------------------------------
                                  Name:  Don R. Wellendorf
                                  Title: Senior V.P., C.F.O. & Treasurer


                                  WILLIAMS OLP, L.P.

                                  By: WILLIAMS GP LLC, its general partner

                                  By:       /s/ Don R. Wellendorf
                                     -------------------------------------------
                                  Name:  Don R. Wellendorf
                                  Title: Senior V.P., C.F.O. & Treasurer


                                  WILLIAMS GP LLC

                                  By:      /s/ Don R. Wellendorf
                                     -------------------------------------------
                                  Name:  Don R. Wellendorf
                                  Title: Senior V.P., C.F.O. & Treasurer



                                   Page 3 of 3


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(D)
<SEQUENCE>9
<FILENAME>d94597ex10-d.txt
<DESCRIPTION>PURCHASE AND SALE AGREEMENT
<TEXT>
<PAGE>
                                                                   EXHIBIT 10(d)

                           PURCHASE AND SALE AGREEMENT


THIS PURCHASE AND SALE AGREEMENT, is made and entered into as of the 18 day of
October , 2001, by and between Geonet Gathering, Inc., a Texas corporation
having its business office in Houston, Texas ("Seller"), and Williams Terminals
Holdings, L.P., a Delaware limited partnership having its business office in
Tulsa, Oklahoma ("Buyer"), sometimes referred to herein collectively as
"Parties" or singularly as "Party."

                                   WITNESSETH

WHEREAS, Seller is engaged in the business of purchasing, financing, trading,
hedging, managing product quality and specifications, controlling loses,
selling, and transporting of crude oil;

WHEREAS, Seller has an interest in a certain crude oil terminal located in
Terrebonne Parish, Louisiana and pipelines and other equipment and real property
interests related thereto; and

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from
Seller such Subject Property (defined below), upon the terms and conditions set
forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the representations,
warranties, agreements and covenants contained herein, the Parties agree as
follows:

                                    ARTICLE 1
                                   DEFINITIONS

"Affiliates" means with respect to any individual or legal business entity, any
Person which directly or indirectly controls, is controlled by, or is under a
common control with such individual or legal business entity. The term "control"
(including the terms "controlled by" and "under common control with") as used in
the preceding sentence means the possession, directly or indirectly, of the
power to direct or cause the direction of management and policies of a Person.

"Agreement" means this Purchase and Sale Agreement and all exhibits and
schedules attached hereto.

"Assignment and Assumption Agreement" has the meaning set forth in Section 4.2.1
(c).

"Assigned Permits" means all permits, licenses and authorizations held by the
Seller to own and/or operate the Louisiana Facilities as a crude oil storage and
terminal facility in the manner and in the areas in which the Louisiana
Facilities are being used or operated that are described in Exhibit D.

"Assigned Real Property Interests" means all leases, easements, rights-of-way
and licenses and instruments or other legally enforceable obligations affecting
or related to the Louisiana Facilities, including without limitation the
Terminal Lease, the New Dock Lease and the On Shore Tie-In


                                       1
<PAGE>


Agreement for the Ship Shoal Pipeline System dated December 22, 1997 between
Seller and Ship Shoal Pipeline Company, all of which are listed on Exhibit C.

"Best of Seller's Knowledge" means the personal knowledge of the majority
shareholder Henry O. Harper, Jr., the corporate officers or the Employees who,
in the normal scope of their employment would have knowledge of the subject
matter and who shall make reasonable efforts to discover and deliver the
document, fact or information to Buyer.

"Bill of Sale" has the meaning set forth in Section 4.2.1 (b).

"Buyer" means Williams Terminals Holdings, L.P.

"Buyer Indemnitees" has the meaning set forth in Section 12.2.

"Claim Notice" has the meaning set forth in Section 12.1.

"Claims or Losses" has the meaning set forth in Section 12.2.

"Closing" has the meaning set forth in Section 4.1.

"Closing Date" means the date as set forth and calculated in Section 4.1.

"Code" means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.

"Crude Oil Inventories" means all inventories of crude oil owned by Seller at
the Effective Time, including crude oil and/or condensate located in barges,
tanks, pipelines and other facilities, which Crude Oil Inventories are not being
sold to Buyer pursuant to this Agreement but which are being sold to Williams
Energy Marketing & Trading Company pursuant to the terms of that certain
Louisiana Facilities Commercial Development Transition Agreement.

"Cure Period" has the meaning set forth in Section 5.3.2.

"Disclosure Schedule" has the meaning set forth in Article 6.

"Effective Time" has the meaning set forth in Section 4.1.

"Employees" has the meaning set forth in Section 8.3.1.

"Environment" means soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, drainage basins, and
wetlands), groundwater, drinking water supply, stream sediments, ambient air,
plant and animal life, and any other medium or natural resource.


                                       2
<PAGE>


"Environmental Law or Environmental Laws" means all applicable common law,
federal, state, or local law, including any plans, rules, regulations, orders or
ordinances adopted, or other criteria and guidelines promulgated pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986 and as
further amended, 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control
Act, as amended, 15 U.S.C. Section 2601 et seq.; the Hazardous Materials
Transportation Act, as amended, 49 U.S.C. Section 1802 et seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et seq.; the
Clean Water Act, as amended, 33 U.S.C. Section 1251 et seq.; the Clean Air Act,
as amended, 42 U.S.C. Section 7401 et seq.; the Federal Safe Drinking Water Act,
as amended, 42 U.S.C. Section 300f et seq.; the Emergency Planning and Community
Right To Know Act, as amended, 42 U.S.C. Section 11001 et seq.; and other
applicable federal, state, or local law, including any plans, rules,
regulations, orders, or ordinances adopted pursuant to the preceding laws or
other similar laws, regulations, rules, orders, or ordinances that are currently
in effect and as may be amended or created in the future relating to the
protection of human health and the Environment.

"Escrow Agent" has the meaning set forth in Section 3.2.

"Escrow Fund" has the meaning set forth in Section 3.2.

"Governmental Authority" means any federal, state, county, city or other
political subdivision, agency, department, board, court or instrumentality that
has jurisdiction over the asset, entity or matter in question.

"Hazardous Materials" means any wastes, substances or materials, whether solid,
liquids or gases, that are deemed hazardous, toxic, pollutants or contaminants,
including, but not limited to, substances defined as "hazardous wastes",
"hazardous materials," "restricted hazardous materials," "extremely hazardous
substances," "toxic substances," or words of similar meaning and regulatory
effect in any of the Environmental Laws. "Hazardous Materials" also includes,
but is not limited to, (a) any petrochemical or petroleum products, oil or coal
ash, radioactive materials, radon gas, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation and transformers or other
equipment that contain dielectric fluid which may contain levels of
polychlorinated biphenyls; and (b) any other chemical, material or substance, or
combination thereof, exposure to which is prohibited, limited or regulated by
any applicable Environmental Law.

"Indemnified Party" has the meaning set forth in Section 12.7.

"Indemnifying Party" has the meaning set forth in Section 12.7.

"Losses" has the meaning set forth in Section 12.2.

"Louisiana Facilities" means that certain crude oil terminal located in
Terrebonne Parish, Louisiana and pipelines and other equipment and real property
interests related thereto as more particularly described in Section 2.1 and in
the Special Warranty Deed, Bill of Sale and the Assignment and Assumption
Agreement.


                                       3
<PAGE>


"Louisiana Facilities Commercial Development Transition Agreement" means that
certain agreement between Geonet Gathering, Inc. as seller, and Williams Energy
Marketing & Trading Company, as buyer, pursuant to the terms of which Geonet
Gathering, Inc. sells and Williams Energy Marketing & Trading Company buys the
Crude Oil Inventories.

"New Dock Lease" means all of Lessee's interest in a certain oil barge off-load
dock site as described within a certain Lease Contract dated December 10, 1999,
effective date being October 1, 1999, between Eugene H. Darnall, as Trustee of
the Carline Land Trust, ("Lessor") and Geonet Gathering, Inc. ("Lessee") leasing
to Lessee space for an (a) oil barge off-load dock together with approximately
4000 feet of 8-inch, 6-inch and 12-inch diameter pipelines running easterly from
said dock, (b) approximately 4000 feet of 6-inch diameter pipeline running
southeasterly from said dock, and (c) one 6-inch and one 8-inch diameter
pipelines approximately 6,146 feet long and 30 feet wide in Sections 52, 53, 54,
55, 56, 57, 58, 59 and 81 all in T16S - R14E, Terrebonne Parish, Louisiana.

"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, governmental agency or authority, or any other
entity.

"Products" has the meaning set forth in Section 8.2.

"Purchase Price" has the meaning set forth in Section 3.2.

"Release" means any emission, spill, seepage, leak, escape, leaching, discharge,
injection, pumping, pouring, emptying, dumping, or disposing of Hazardous
Materials into or upon the Environment.

"Retained Matters" means the cash, cash equivalents, accounts receivable,
accounts payable and rights and obligations earned, incurred or accrued in
periods prior to the Effective Time, and the office equipment and business and
other administrative records located in the offices of the Seller in Houston,
Texas.

"Seller" means Geonet Gathering, Inc., a Texas corporation.

"Seller Indemnitees" has the meaning set forth in Section 12.3.

"Special Warranty Deed" has the meaning set forth in Section 4.2.1 (a).

"Subject Property" has the meaning set forth in Section 2.1.

"Survival Period" has the meaning set forth in Section 12.1.

"Terminal Lease" means any lease agreement, and any amendment thereto, executed
by Seller as the Lessee and multiple lessors, which lease pertains to a tract of
land consisting of approximately five acres in Terrebonne Parish, Louisiana and
upon which are located (a) a 16'x16' combination office,


                                       4
<PAGE>


tool and test house, (b) two 10,000 barrel steel tanks designated tanks #8000
and #8001, (c) a 37,500 barrel steel tank designated tank #8002, (d) a 10'x24'
barge loading dock, (e) inter-connecting piping, a 10" dock line, and a pump,
all of such personal property also being leased by Seller. Such Terminal Lease
includes, without limitation, (1) the "Lease Agreement" executed between Seller
and multiple lessors the term of which began on or about September 15, 1993, (2)
"Addendum to Lease Agreement" executed on or about September 15, 1993, (3)
"Amendment to Lease Agreement" effective on or about February 1, 1997, (4)
"Amendment to Lease Agreement" effective on or about August 27, 1998 and (5) the
"Property Lease Agreement" attached hereto as Exhibit H and the execution of
which has been recently requested of the multiple lessors by Seller.

"Title Company" means Chicago Title Insurance Company.

"Title Commitment" has the meaning set forth in Section 5.3.2.

"Title Defect" has the meaning set forth in Section 5.3.2.

                                    ARTICLE 2
                         DESCRIPTION OF SUBJECT PROPERTY

2.1 Description of Subject Property. The property that is the subject of this
Agreement (collectively, the "Subject Property") consists of (i) the business
goodwill from operations located in Texas and (ii) the Louisiana Facilities,
which more specifically include the following:

         (a) the real property held in fee related to the Louisiana Facilities
and any and all appurtenant surface leases, easements, rights of way, permits
and licenses that grant real property rights, and other interests in real
property in which Seller has an interest servicing, benefiting and/or pertaining
to the real property held in fee described in Exhibit A, and any and all
buildings, structures, fixtures and other real property improvements situated on
the real property held in fee described on Exhibit A;

         (b) the personal property, including, without limitation, the
facilities, pipelines, equipment and other personal property currently used in
the operation, repair and maintenance of the Louisiana Facilities and situated
thereon in which Seller has an interest, and, any and all piping, valves,
fittings, meters, tanks, pumps and other engineering works situated at the
Louisiana Facilities and appurtenant equipment and facilities, including, but
not limited to, terminal delivery lines in which Seller has an interest,
described in Exhibit B;

         (c) all programs, applications and computer software systems (with the
source code, the object code and all related documentation for such programs,
applications and computer software systems) thereto used by Seller in the
operation of the Seller's business related to the Louisiana Facilities, to the
extent identified as assignable and transferable in Exhibit B;

         (d) all policy, procedure, operation, safety and/or training manuals
related to Seller's operation of the Seller's business and the Louisiana
Facilities;


                                       5
<PAGE>


         (e) all right, title and interest associated with the Assigned Real
Property Interests, which are described in Exhibit C together with all of
Seller's original records related to said Assigned Real Property Interests;

         (f) all right, title and interest associated with the Assigned Permits,
to the extent identified as assignable and transferable in Exhibit D;

         and

         (g) all goodwill associated with the business of the Seller.

             The Subject Property specifically excludes the Retained Matters,
all bottom sediment and water ("BS&W"), Products and Crude Oil Inventories and
all contract rights of Seller with respect to the purchase or sale of such
Products and Crude Oil Inventories.

                                    ARTICLE 3
                    PURCHASE AND SALE OF THE SUBJECT PROPERTY

3.1 Agreement to Sell and Purchase the Subject Property. Upon the terms and
subject to the conditions set forth in this Agreement, at the Closing, Seller
shall sell, transfer, convey, assign and deliver to Buyer, and Buyer shall
purchase, acquire and accept from Seller on the Closing Date the Subject
Property.

3.2 Purchase Price. Upon the terms and subject to the conditions set forth in
this Agreement, Buyer shall pay to Seller a total amount of $20,150,000 for the
Subject Property (the "Purchase Price"), subject to any adjustments, prorations
and deductions as provided herein, to be delivered at the Closing. Of the
Purchase Price, Buyer shall pay to Seller $19,150,000 by wire transfer of
immediately available funds to such account as Seller shall designate to Buyer
in writing not less than two (2) business days prior to the Closing Date. Buyer
shall deposit the remaining $1,000,000 of the Purchase Price (the "Escrow Fund")
with Bank of Oklahoma, N.A., the "Escrow Agent." The Escrow Agent shall (i)
place the Escrow Fund in an interest-bearing account, and (ii) hold, manage and
disburse the Escrow Fund only in accordance with the terms of the Escrow
Agreement, the form of which is attached hereto as Exhibit I. Upon disbursement
of the Escrow Fund, Buyer shall pay to Seller interest on the Escrow Fund in an
amount equal to the interest or other income earned by the escrow during the
period prior to disbursement.

3.3 Purchase Price Allocation. Buyer and Seller agree that the allocation of the
Purchase Price among the Subject Property set forth in Schedule K shall govern
for all income tax purposes. Seller and Buyer shall report the transactions
contemplated hereby on all tax returns (including information returns and
supplements thereto required to be filed by the parties under Section 1060 of
the Code) in a manner consistent with such allocation. The parties agree that
the initial payment of the Purchase Price at the Closing is attributable to the
Seller's sale of the Subject Property, including the Seller's


                                       6
<PAGE>


goodwill and personal property and that portion of the Purchase Price paid
through the Escrow Fund is attributable to Seller's sale of the goodwill.


                                    ARTICLE 4
                                     CLOSING

4.1 Closing. The closing of the sale and purchase contemplated by this Agreement
("Closing") shall take place on such date ("Closing Date") and at such place as
Buyer and Seller may mutually agree to in writing. The "Effective Time" of such
Closing shall be deemed to be 7:00 a.m. Central Daylight Savings Time on the
Closing Date.

4.2 Deliveries at Closing.

         4.2.1 Seller's Deliveries. At the Closing, Seller shall deliver to
Buyer the following:

                  (a) Special Warranty Deed, in the form of Exhibit E attached
         hereto, executed by Seller and conveying to Buyer all of the real
         property described in Exhibit A;

                  (b) Bill of Sale, in the form of Exhibit F attached hereto,
         executed by Seller and selling and transferring to Buyer all of the
         personal property described in Exhibit B;

                  (c) Assignment and Assumption Agreement, in the form of
         Exhibit G attached hereto, executed by Seller, whereby all of Seller's
         rights, interests and obligations arising after the Effective Time in
         and to the Assigned Real Property Interests, and Assigned Permits are
         assigned to Buyer;

                  (d) Such documents as required, including UCC-3 filings as
         appropriate, in a form and substance satisfactory to Buyer, to evidence
         the release of any and all security interests in the Subject Property;

                  (e) All written or electronically stored files, maps, records,
         documents and other instruments in the possession or control of Seller
         related to the Subject Property, including, without limitation, those
         related to construction, acquisition, maintenance, operation or
         regulatory compliance of the Louisiana Facilities;

                  (f) Copies of duly-adopted actions of shareholders and
         resolutions of the Board of Directors of Seller approving the
         execution, delivery and performance of this Agreement, certified by an
         officer of Seller and in a form and substance satisfactory to Buyer;

                  (g) Officer's certificate, in a form and substance
         satisfactory to Buyer, that Seller's representations and warranties are
         true and correct as of the Closing Date;


                                       7
<PAGE>


                  (h) a foreign ownership affidavit pursuant to Section 1445 of
         the Code, in form and substance satisfactory to Buyer;

                  (i) Document(s) evidencing that any and all persons or
         entities with preferential purchase rights, options or other rights to
         purchase or acquire any interest in the Subject Property, in whole or
         in part, as set forth in the Disclosure Schedule, have been given
         notice of their right to exercise the same, together with evidence of a
         waiver of such rights or a certificate from Seller that such rights
         have not been exercised;

                  (j) Schedule and certificates of insurance of property and
         liability insurance and schedule of surety bonds in effect regarding
         the right, title and interest of the Seller in the Subject Property for
         the period immediately prior to the Closing, including types of
         coverage, deductibles, limits, policy numbers, period of coverage and
         names of insurance companies; and

                  (k) Affidavit in a form acceptable to the Title Company,
         certifying the full payment of all bills that may create workman's or
         materialman's liens on the Subject Property and any other document from
         Seller reasonably required by the Title Company for the issuance of a
         policy of title insurance.

         4.2.2 Buyer's Deliveries. At the Closing, Buyer shall deliver to Seller
the following:

                  (a) The Purchase Price, subject to any adjustments,
         prorations, additions or deductions as set forth in this Agreement;

                  (b) Assignment and Assumption Agreement, in the form of
         Exhibit G, executed by Buyer, whereby Buyer or its designee assumes all
         of Seller's rights and obligations under the Assigned Real Property
         Interests from and after Closing; and

                  (c) Officer's certificate, in form and substance satisfactory
         to Buyer, that Buyer's representations and warranties are true and
         correct as of the Closing Date.

4.3      Prorations and Adjustments.

         4.3.1 Except as otherwise provided in this Section 4.3 and in the
Transition Agreement between Williams Energy Marketing & Trading Company, Buyer
and Seller and the Revenue Sharing Agreement between Williams Energy Marketing &
Trading Company and Seller, all taxes, assessments, utilities, rents and other
expenses and revenues arising out of or relating to Seller's interest in the
Subject Property shall be prorated between Seller and Buyer as of the Effective
Time. Buyer and Seller hereby agree to cooperate, following the Closing, in the
distribution of any such expense(s) and/or revenue(s) the amount of which is
unknown as of the Effective Time.

         4.3.2 All real estate, personal property, and other ad valorem taxes
assessed or payable for all years prior to 2001 against the Subject Property
shall be the responsibility of Seller. That portion


                                       8
<PAGE>


of real estate, personal property, and other ad valorem taxes assessed or
payable for the year 2001 against the Subject Property shall be prorated between
the parties to the Effective Time, with Seller being responsible for the
prorated portion of such taxes up to the Effective Time, and Buyer being
responsible for its prorated portion of such taxes at the Effective Time and
thereafter. If Seller's prorated portion of such 2001 taxes is payable in
arrears, Seller will pay Buyer, at Closing, Seller's estimated proportionate
share of 2001 real estate, personal property, and ad valorem taxes, such
estimate being based on the latest assessment, and Buyer shall be responsible
for payment of all such taxes for the 2001 tax year and upon payment thereof,
necessary corrections to the estimated 2001 amount paid at Closing by Seller
will be paid promptly by the appropriate party to the other party. If Buyer's
prorated portion of such 2001 taxes is payable in advance, Buyer will reimburse
to Seller, at Closing, the amount of such prepaid taxes which is attributable to
the period on and after the Effective Time and which have been paid by Seller.

         4.3.3 Buyer shall pay at Closing: (a) all recording fees; (b) all
survey fees related to any survey conducted by Buyer pursuant to Section
5.3.1(b); (c) any and all escrow or closing agent fees; (d) all premiums of
title insurance policies and any endorsements thereto desired by Buyer related
to the Subject Property and (e) one-half of the cost of identification and
measurement of Crude Oil Inventories and Product pursuant to Section 8.2(b).

         4.3.4 Seller shall pay at Closing: (a) all sales, use, excise or
personal property transfer taxes related to the Subject Property; (b) all fees
charged by the Title Company related to providing the Title Commitment for the
Subject Property and any updates thereto, (c) all survey fees related to any
surveys provided by Seller pursuant to Section 5.3.1(a) and (d) one-half of the
cost of identification and measurement of Crude Oil Inventories and Product
pursuant to Section 8.2(b).

                                    ARTICLE 5
                        INSPECTIONS AND APPROVAL OF TITLE

5.1 Access to Information. Buyer's and its Affiliates' respective officers,
employees, representatives, and agents shall have access to all of the records
of Seller pertaining to the ownership, use and/or operation of the Subject
Property in Seller's possession or capable of being obtained by Seller by
request, including, without limitation, records, books, contracts, commitments,
reports, permits, applications, monitoring reports, environmental
assessments/audits, studies, correspondence and any other relevant data at all
reasonable times from the date hereof to the Closing in order that Buyer may
make such technical, legal, financial, accounting, environmental or other review
or investigation as Buyer deems desirable; and the officers, employees,
representatives, and agents of Seller shall permit such access to such data or
information or furnish Buyer with such data or information as may be reasonably
requested by Buyer, including, but not limited to, access to such information
maintained in electronic format. Buyer may inspect and, at its own expense, make
copies of such data and information as Buyer deems reasonably necessary. Seller
shall also make available its officers, agents, employees and other
representatives, during normal business hours, to discuss with Buyer and Buyer's
representatives any and all information relating to the Subject Property and to
the ownership, use and operation thereof.


                                       9
<PAGE>


5.2 Access to the Subject Property. At Buyer's sole cost, risk, and expense,
Seller may, at Seller's sole option, provide Buyer's and its Affiliates'
respective employees, representatives and agents with access to the Subject
Property at all reasonable times from the date hereof to the Closing for the
purpose of inspection and review of the Subject Property; provided that Buyer
shall not be authorized, unless specifically authorized in writing by Seller,
which authorization may be withheld by Seller for any reason which reason need
not be disclosed to Buyer, to conduct (i) any inspection or review of the
Subject Property that will interfere with or restrict in any way the operations
of the business of the Seller or (ii) any environmental assessment of the
Subject Property.

5.3 Real Property Title.

         5.3.1 Survey.

               (a) Within five (5) days following the date of this Agreement,
Seller shall deliver to Buyer any and all surveys, prepared prior to the date of
this Agreement, in Seller's possession or available to Seller, of all interests,
including leases and easements, in the real property associated with the Subject
Property.

               (b) If, in the reasonable judgment of Buyer or the Title Company,
the surveys described under 5.3.1 (a) are inadequate for any reason, Buyer shall
have the right to cause metes and bounds surveys to be made of the real property
described in Section 2.1(a), the leasehold property associated with the New Dock
Lease and/or the leasehold property associated with the Terminal Lease, together
with all appurtenant fixtures and improvements, by a registered surveyor
acceptable to the Title Company. If Buyer should acquire additional surveys,
Seller shall cooperate as needed in utilizing the Buyer's new surveys as new
legal descriptions for all or any portion of the fee or leasehold interests
which are a part of the Louisiana Facilities. If necessary, Seller shall acquire
new amendments for the Terminal Lease and/or the New Dock Lease utilizing
Buyer's additional surveys as new descriptions for the property affected by said
leasehold interest.

         5.3.2 Title Defects. Buyer shall order or has previously ordered title
commitments and upon receipt of the surveys referenced in Sections 5.3.1(a)
and/or 5.3.1(b), Buyer shall order revised title commitments from the Title
Company (both the original and any revised title commitments collectively the
"Title Commitment") with respect to the real property described in Section
2.1(a) together with the leasehold property associated with the New Dock Lease
and the leasehold property associated with the Terminal Lease. Within ten (10)
days following Buyer's receipt of the Title Commitment and within five (5) days
of Buyer's receipt of any revision to any such Title Commitment showing any new
title matter, Buyer shall notify Seller in writing as to whether Buyer objects
to any title matter which appears on such Title Commitment ("Title Defect").
Seller shall have the option to remove or cure any Title Defect during the
thirty (30) day period after receipt of Buyer's notice ("Cure Period") to remedy
Title Defects. In the event that Seller fails or chooses not to remedy the Title
Defects to Buyer's satisfaction within the Cure Period, Buyer shall have the
option, exercisable within: (i) ten (10) days from the expiration of the Cure
Period; or, if a shorter period of time, (ii) ten (10) day from Seller's written
notice of its choice not to remedy the Title Defects, to:


                                       10
<PAGE>


               (a) accept the status of the title subject to the Title Defects
and proceed with the performance of this Agreement, in which case the Special
Warranty Deed in the form of Exhibit E and/or the Assignment and Assumption
Agreement in the form of Exhibit G will be modified, if applicable, to make the
Title Defect an exception to Seller's warranties thereunder;

               (b) extend the Cure Period for a reasonable period mutually
agreeable to the parties to give Seller an additional opportunity to remedy the
Title Defects at the end of which period, if Seller still has not cured the
Title Defect to Buyer's satisfaction, Buyer shall have ten (10) days after such
period ends to elect option (a) or (c) in this Section 5.3.2; or

               (c) terminate this Agreement by giving written notice to Seller.

                                    ARTICLE 6
                            REPRESENTATIONS OF SELLER

         Subject to the disclosures as provided by Seller on Schedule J, if any
("Disclosure Schedule"), Seller represents and warrants to Buyer as of the date
hereof and as of the Closing Date that:

6.1 Organization, Qualification and Good Standing. Seller (a) is a corporation,
duly organized, validly existing, and in good standing under the laws of the
State of Texas, (b) is duly qualified to transact business and is in good
standing under the laws of each jurisdiction where the conduct of its business
requires it to so qualify, and (c) has all the requisite company power and
authority to own or hold under lease its property and assets, and to transact
the business in which it is engaged.

6.2 Authority. This Agreement has been duly executed and delivered by Seller.
Seller has the full corporate power and authority to enter into this Agreement,
to make the representations, warranties, covenants and agreements made herein
and to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all requisite
shareholder and corporate action on the part of Seller.

6.3 Legally Binding. This Agreement and each of the documents described herein
to be executed by Seller constitute legal, valid and binding obligations of
Seller, enforceable against Seller in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency, or other similar laws
affecting the enforceability of creditors' rights in general, and to moratorium
laws from time to time in effect. The enforceability of Seller's obligations
under this Agreement is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

6.4 No Violation or Breach Resulting from this Transaction. Neither the
execution and delivery of this Agreement by Seller nor the consummation by
Seller of the transactions contemplated hereby:


                                       11
<PAGE>


         (a) will constitute a violation or breach by Seller of any judgment,
order, writ, injunction or decrees issued against or imposed upon Seller;

         (b) will result in the violation by Seller of any applicable law,
order, rule or regulation or decree of any governmental or quasi-governmental
authority; or

         (c) will constitute a breach of or default under (or an event that,
with giving of notice or passage of time or both, would constitute a breach of
or default under), or will result in the termination of, or accelerate the
performance required by, or result in the creation or imposition of any security
interest, lien, charge or other encumbrance upon the Subject Property under, any
contract, instrument or agreement to which Seller is a party or by which Seller
or any of its assets is bound.

6.5 No Consent Required. No approval, notification, permits, licenses,
authorization, or other action by, to or from, or filing with, any Governmental
Authority or any third party is required in connection with the execution,
delivery, and performance by Seller of this Agreement.

6.6 Governmental/ Regulatory Notices/ Judicial Actions. Except for matters
related to an Environmental Law,

         (a) There are no violations of or instances of noncompliance with any
laws, rules, regulations, ordinances, orders, judgments and decrees applicable
to Seller's ownership, use, and operation of the Subject Property or the
condition thereof;

         (b) There are no pending, or to the Best of Seller's Knowledge,
threatened claims, actions, suits, proceedings, or investigations by or before
any court or Governmental Authority against Seller with respect to its interest
in the Subject Property or the operations thereof;

         (c) There are no judgments, orders, writs or injunctions of any
Governmental Authority in effect against Seller or affecting the Subject
Property; and

         (d) There are no pending condemnation or similar proceedings affecting
the Subject Property or any portion thereof, nor to the Best of Seller's
Knowledge, is any such action threatened against all or any portion of the
Subject Property.

6.7 Assigned Permits. Seller has delivered to Buyer true and complete copies of
all Assigned Permits. The list of Assigned Permits provided on Exhibit "D" is a
complete list of all of the permits, licenses and authorizations, excluding
Environmental Permits, held by the Seller to own and/or operate the Subject
Property as a crude oil storage and terminal facility in the manner and in the
areas in which the Subject Property is being used or operated. To the Best of
Seller's Knowledge, each Assigned Permit has been granted by the appropriate
Governmental Authority and is valid and in full force and effect.


                                       12
<PAGE>


6.8 Taxes. All returns required to be filed pursuant to federal, state or local
laws with respect to the ownership and operation of the Subject Property have
been or will be timely filed, and all taxes (other than income taxes) imposed or
assessed, whether federal, state or local, on the Subject Property that would
result in a lien attaching to the Subject Property if not paid, have been or
will be timely paid or validly contested. Furthermore, no tax returns covered by
this Section are now under audit or, to the Best of Seller's Knowledge
investigation by any taxing authority, and no suits or other judicial or
administrative proceedings or claims are pending, or to the Best of Seller's
Knowledge, threatened with respect to any tax return covered by this Section
6.8.

6.9 Assigned Real Property Interests. Seller has or will deliver to Buyer, true
and complete copies of each Assigned Real Property Interest. The list of
Assigned Real Property Interests provided on Exhibit C is a complete list of all
of the leases, easements, rights of way, licenses and other legally enforceable
interests held by Seller for the operation, maintenance and placement of the
Subject Property prior to Closing. Seller has received no notice of a claim or
cause of action that gives rise to a right of offset by any party under any of
the Assigned Real Property Interests for monies owed by Seller. Seller is not in
violation, breach or default under the Assigned Real Property Interest nor, to
the Best of Seller's Knowledge, is any other party to the Assigned Real Property
Interests in violation, breach or default thereunder. To the Best of Seller's
Knowledge, the Assigned Real Property Interests are valid and enforceable
according to their terms.

6.10 Title to Subject Property. Except (a) for any claims or encumbrances that
do not arise by, through or under Seller, or (b) any lien for taxes that are not
yet due and payable, Seller has good and indefeasible title to the Subject
Property free and clear of all liens, charges, mortgages, security interests,
pledges, lease or deed restrictions or other encumbrances of any nature
whatsoever created by, through or under Seller, but not otherwise.

6.11 Insurance. There are no occurrences and/or incidents that have been
reported as a claim or potential claim and are ongoing, open and/or outstanding
claims against Seller's insurance on its ownership interest in the Subject
Property.

6.12 Foreign Person. Seller is not a "foreign person" as defined in Section 1445
of the Code and the regulations promulgated thereunder.

6.13 Preferential Purchase Rights. There are no preferential purchase rights,
options, or other rights held by any person or entity not a party to this
Agreement to purchase or acquire any interest in the Subject Property, in whole
or in part, as a result of the transactions contemplated by this Agreement.

6.14 Condition and Sufficiency of Property. The buildings, structures and
equipment associated with the Subject Property are structurally sound, are in
good operating condition and repair, and are adequate for the uses to which they
are being put, and none of such is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs that are not material in nature or
cost. The buildings, structures and equipment associated with the Subject
Property are sufficient for the continued conduct of operations on the Subject
Property after the Closing in substantially the same


                                       13
<PAGE>


manner as such operations have been conducted prior to the Closing; provided,
however, the Seller disclaims any and all liability to the extent of any
modifications that are made after the Closing to any of the Subject Property or
the methods of operation thereof.

6.15 Records. All records and documents relating to the operation and
maintenance of the Subject Property furnished to Buyer were prepared and
maintained in the ordinary course of business, and, to the Best of Seller's
Knowledge, are complete and sufficient for the conduct of the Seller's business
in the same manner as conducted prior to the Closing. Seller has delivered to
Buyer true and correct copies of the report of independent auditors for the
Seller with respect to the calendar years 1998, 1999 and 2000. Furthermore,
Seller will, by October 31, 2001, make available to Buyer for its analysis
certain operational reports prepared by the management of the Seller for its
internal use in accordance with GAAP (subject to post period adjustments) with
respect to the period beginning January 1, 2001 through and including September
30, 2001. Except as specifically stated, no representation or warranty is made
with respect to any records, financial statements, reports, or other data except
as set out in this Section 6.15.

6.16 Brokers. Seller represents and warrants it has not retained any brokers
with respect to this Agreement and agrees to indemnify Buyer against any claim
by any third person for any commission, brokerage, finder's fee or any other
payment based upon any agreement or understanding between such third person and
Seller.

6.17 Disclosure. No representation or warranty of Seller in this Agreement omits
to state a material fact necessary to make the statements herein, in light of
the circumstances made, not misleading.

                                    ARTICLE 7
                            REPRESENTATIONS OF BUYER

         Buyer represents and warrants to Seller as of the date hereof and as of
the Closing Date that:

7.1 Organization and Good Standing. Buyer is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware.

7.2 Authority. This Agreement has been duly executed and delivered by Buyer.
Buyer has the full requisite power and authority to enter into this Agreement,
to make the representations, warranties, covenants and agreements made herein
and to consummate the transactions contemplated hereby. The execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all requisite
partnership action on the part of Buyer; including, without limitation,
receiving all approvals and authorizations from the board of directors of its
general partner and any special committee of that board of directors reviewing
this transaction subject to completion of due diligence to the satisfaction of
Buyer.

7.3 Legally Binding. This Agreement and each of the documents described herein
to be executed by Buyer constitute legal, valid and binding obligations of
Buyer, enforceable against Buyer in


                                       14
<PAGE>


accordance with their terms, except as enforcement may be limited by bankruptcy,
insolvency, or other similar laws affecting the enforceability of creditors'
rights in general, and to moratorium laws from time to time in effect. The
enforceability of Buyer's obligations under this Agreement is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

7.4 No Violation. The execution and delivery of this Agreement and the
performance by the Buyer of the terms of this Agreement do not conflict with or
result in a violation or breach of the corporate organizational documents of
Buyer or of any agreement, instrument, order, writ, judgment, decree, statute,
rule, or regulation to which Buyer is a party or is subject.

7.5 Brokers. Buyer represents and warrants it has not retained any brokers with
respect to this Agreement and agrees to indemnify Seller against any claim by
any third person for any commission, brokerage, finder's fee or any other
payment based upon any agreement or understanding between such third person and
Buyer.

                                    ARTICLE 8
                 OTHER AGREEMENTS AND OBLIGATIONS OF THE PARTIES

8.1 Conduct of Business Pending Closing.

         8.1.1 From the date of execution of this Agreement to and including the
Closing Date, Seller shall:

                  (a) conduct the business of the Subject Property in the
         ordinary course consistent with past practices;

                  (b) maintain the Subject Property in good repair, order and
         condition consistent with past practice, subject only to normal wear
         and tear;

                  (c) operate the Subject Property in compliance with all
         statutes, laws, ordinances, rules, regulations and orders applicable to
         the Subject Property;

                  (d) maintain records relating to the Subject Property
         consistent with past practice; and

                  (e) continue in full force and effect the insurance currently
         maintained by Seller on the Subject Property with substantially the
         same form and with the same limits and deductibles as presently
         maintained by Seller.

         8.1.2 Without limiting the generality of Section 8.1.1, except as
expressly provided in this Agreement, from the date hereof to and including the
Closing Date, Seller shall not, without Buyer's written consent:

                  (a) sell, transfer, encumber or otherwise dispose of any of
         its interest in the Subject Property;


                                       15
<PAGE>


                  (b) enter into any agreements, commitments or contracts
         affecting the Subject Property other than agreements in the ordinary
         course of business (including agreements with its customers for storage
         in the Subject Property) or in accordance with past practices, and in
         no event for any term in excess of thirty (30) days following the
         Closing Date, or terminate, amend or modify any of the Assigned Real
         Property Interests; provided, however, Buyer agrees that Seller
         continue the effort to obtain full execution of the "Property Lease
         Agreement" associated with the Terminal Lease in the form attached
         hereto as Exhibit H.

                  (c) settle any pending judicial or administrative litigation
         or claim applicable to Seller's interest in the Subject Property except
         for settlements which do not impose any obligation on the Subject
         Property or the operation of the Subject Property which extends beyond
         the Closing Date;

                  (d) make any material changes to the physical characteristics
         of the Subject Property; or

                  (e) make any capital commitments or expenditures in excess of
         $10,000 except for expenditures made in connection with any emergency
         or other force majeure event.

8.2 Transfer of Custody of Inventory.

         (a) It is understood by the parties that Seller will have, as of the
Closing Date, custody of crude oil owned by third parties at, from or in transit
to the Subject Property (hereinafter referred to as the "Products") and of the
Crude Oil Inventories and BS&W. The BS&W, Products and Crude Oil Inventories are
specifically excluded from this sale, except as to the transfer of their custody
from Seller to Buyer.

         (b) On the Closing Date, the quality of the Products and Crude Oil
Inventories shall be in compliance with Seller's existing product
specifications, Seller will transfer custody of the Products and Crude Oil
Inventories to Buyer, and Buyer will issue to Seller any necessary documentation
to acknowledge receipt of the Products and Crude Oil Inventories upon Buyer's
verification and acceptance of both the physical and book Products and Crude Oil
Inventories. At Closing, Seller shall also transfer custody of the BS&W to
Buyer.

8.3 Employee Matters.

         8.3.1    Employment and Compensation of Employees. Buyer and its
                  Affiliates will have the right, after execution of this
                  Agreement, to interview and offer employment to any and all of
                  the people employed on behalf of Seller in connection with the
                  Subject Property (the "Employees") on such terms as Buyer will
                  determine. Buyer and its Affiliates shall have no obligation
                  to offer employment to or to employ such Employees.

         8.3.2    Employee Liabilities. Seller will be solely responsible for
                  all liabilities and obligations with respect to the Employees,
                  including, but not limited to, compensation or employee
                  benefits arising before the Effective Time. Seller will bear
                  all severance costs for the Employees terminated by Geonet or
                  its agent and arising out of the transactions contemplated by
                  this Agreement. Buyer will be solely responsible for all
                  liabilities and obligations with respect to the compensation
                  or employee benefits of


                                       16
<PAGE>


                  those Employees, if any, who are employed by Buyer and which
                  arise with respect to employment with Buyer after the
                  Effective Time.

8.4 Seller's Covenant Not to Compete.

         (a) Seller agrees that for the lesser of two (2) years after the
Closing Date or for so long as Buyer owns or operates the Subject Property,
neither Seller nor its present or future Affiliates will, directly or
indirectly, own, manage, operate, control, or participate in the ownership,
management, operation or control of, any crude oil terminal within Terrebonne,
St. James, St. Mary, Iberia, Vermilion, Cameron, LaFourche, Jefferson, or
Plaquemines Parishes.

         (b) The Parties specifically acknowledge and agree that the remedy at
law for any breach of the foregoing will be inadequate and that Buyer, in
addition to any other relief available herein, shall be entitled to temporary
and permanent injunctive relief without the necessity of proving actual damage;
provided, however, Buyer will notify Seller of any breach and allow Seller
twenty-four (24) hours to cease the activities resulting in the breach prior to
Buyer pursuing its available remedies as set forth herein. In the event that the
provisions of this Section should ever be deemed to exceed the limitation
provided by applicable law, then the Parties agree that such provisions shall be
reformed to set forth the maximum limitations permitted.

8.5 Public Announcements. Except as required by applicable law or the applicable
rules and regulations of any governmental agency or stock exchange, neither
Seller nor Buyer shall give notice to third parties or otherwise make any public
statement or releases concerning this Agreement, its content or the transactions
contemplated hereby except for such written information as shall have been
approved in writing as to form and content by both Parties; provided, however,
Buyer shall have no such obligation following the Closing of the transaction
contemplated herein.

8.6 Third Party Negotiations. Seller will not, directly or indirectly, through
any representative or otherwise, solicit or entertain offers from, negotiate
with or in any manner encourage, discuss, accept or consider any proposal of any
other party relating to the sale, lease or other disposition of the Subject
Property, in whole or in part, whether through direct purchase, merger,
consolidation or business combination.

8.7 Reasonable Efforts and Further Negotiations. Each of the Parties will use
its respective reasonable efforts to (a) cause to be fulfilled and satisfied all
of the conditions to the Closing and (b) cause to be performed all of the
matters required of it at or prior to the Closing. The Parties agree to
negotiate the form and content of any documents required to be delivered at the
Closing, or otherwise required to effect the transactions contemplated hereby,
in good faith, taking into consideration the intents and purposes of this
Agreement and terms and conditions normally and reasonably found in transactions
of similar form and magnitude.

8.8 Seller Disclosure Schedule. From the date of this Agreement to the Closing
Date, Seller shall have the continuing obligation to promptly supplement or
amend the Disclosure Schedule, being delivered concurrently with the execution
of this Agreement and attached hereto, with respect to any matter hereafter
arising or discovered which, if existing or known at the date of this Agreement,
would have been required to be set forth or described in the Disclosure
Schedule.


                                       17
<PAGE>


                                    ARTICLE 9
                       CONDITIONS TO OBLIGATIONS OF SELLER

         The obligations of Seller to effect the transactions contemplated by
this Agreement on the Closing Date shall be subject to the fulfillment, prior to
or at the Closing, of each of the conditions set forth in this Article 9 (unless
waived, in whole or in part, in writing by Seller).

9.1 Representation and Warranties True. The representations and warranties made
by Buyer as set forth in Article 7 of this Agreement shall have been true and
correct when made and shall be true and correct as of the Closing Date as though
such representations and warranties were made at and as of such date.

9.2 Performance of Obligations. Buyer shall have performed, observed and
complied with, in all material respects, all agreements, obligations, covenants
and conditions required by this Agreement to be performed or complied with by it
on or prior to the Closing Date.

9.3 Litigation. No action or proceeding shall be pending or threatened against
Seller or Buyer in any court of law or by any Governmental Authority on the
Closing Date, wherein an unfavorable judgment, decree or order could prevent,
make unlawful or materially affect the consummation of the transactions
contemplated by this Agreement.

9.4 Documents and Deliveries. All instruments and documents required on Buyer's
part to effectuate this Agreement and the transactions contemplated hereby shall
be delivered to Seller and shall be in form and substance consistent with the
requirements herein.

9.5 Collateral Agreements. The following agreements shall have been fully
executed and delivered:

         (a)      the Louisiana Facilities Commercial Development Transition
                  Agreement ;

         (b)      the Employment and Nonsolicitation/Noncompetition/
                  Confidentiality Agreement between Williams Energy Marketing &
                  Trading Company and Don Robinson; and

         (c)      the Consulting and Nonsolicitation/Noncompetition/
                  Confidentiality between Williams Energy Marketing & Trading
                  Company and Larry Golden;

         (d)      the "Property Lease Agreement" associated with the Terminal
                  Lease in the form attached hereto as Exhibit H;

         (e)      the Agreement between Williams Energy Marketing & Trading
                  Company and Seller, or its designated Affiliate, regarding the
                  services of Don Robinson and other Geonet employees who become
                  employees of Williams Energy Marketing & Trading Company for
                  the closing of the books of Geonet for the year ended December
                  31, 2001;

         (f)      the Transition Services Agreement between Williams Energy
                  Marketing & Trading Company, Seller and Buyer; and

         (g)      the Revenue Sharing Agreement between Williams Energy
                  Marketing & Trading Company and Seller.


                                       18
<PAGE>


                                   ARTICLE 10
                       CONDITIONS TO OBLIGATIONS OF BUYER

         The obligations of Buyer to effect the transactions contemplated by
this Agreement on the Closing Date shall be subject to the fulfillment, prior to
or at the Closing, of each of the conditions set forth in this Article 10
(unless waived, in whole or in part, in writing by Buyer).

10.1 Representation and Warranties True. The representations and warranties made
by Seller as set forth in Article 6 of this Agreement shall have been true and
correct when made and shall be true and correct as of the Closing Date as though
such representations and warranties were made at and as of such date without
giving effect to any update to Seller's Disclosure Schedule.

10.2 Performance of Obligations. Seller shall have performed, observed and
complied with, in all material respects, all agreements, obligations, covenants
and conditions required by this Agreement to be performed or complied with by it
on or prior to the Closing Date.

10.3 Litigation. No action or proceeding shall be pending or threatened against
Seller or Buyer in any court of law or by any administrative or governmental
agency on the Closing Date, wherein an unfavorable judgment, decree or order
could prevent, make unlawful or materially affect the consummation of the
transactions contemplated by this Agreement.

10.4 Absence of Certain Changes. There shall not have occurred with respect to
the Subject Property any act or omission constituting a violation of any
Environmental Law, rule or regulation of any Governmental Authority between the
date of this Agreement and the Closing Date nor any damage or destruction,
whether covered by insurance or not, which could materially adversely affect the
normal utilization and operations of the Subject Property.

10.5 Documents and Deliveries. All instruments and documents required on
Seller's part to effectuate this Agreement and the transactions contemplated
hereby shall be delivered to Buyer and shall be in form and substance consistent
with the requirements herein.

10.6 Title Insurance Policy. The Title Company shall have committed to issue to
Buyer at Closing, an extended coverage ALTA owner's policy of title insurance
(subject only to such Title Defects as Buyer has accepted under Section
5.3.2(a)) upon payment by Buyer of its regularly scheduled premium, insuring
Buyer's interests in (a) that portion of the Subject Property described in
Section 2.1(a), (b) a leasehold interest in the New Dock and (c) a leasehold
interest in the Terminal Lease in an amount satisfactory to Buyer, subject only
to delivery of the executed Bill of Sale, Assignment and Assumption Agreement
and Special Warranty Deed, the printed provisions of such policy, and such title
matters accepted by Buyer pursuant to Section 5.3.2

10.7 Due Diligence Review. Buyer shall have completed, to Buyer's satisfaction,
a due diligence investigation of the Subject Property, including without
limitation, any Seller authorized physical inspection of the Subject Property
and a review of any and all documents and other writings related to or affecting
the Subject Property and Buyer, in its sole judgment, is satisfied with the
results of the due diligence investigation .

10.8 Preferential Purchase Rights/Consents to Assignment. Seller shall have
provided written notice of this Agreement to any Persons with preferential
purchase rights to the Subject Property pursuant to and in accordance with the
terms of the governing documents and either (i) such Persons shall have notified
Seller of their intent to either waive or not to exercise their preferential
rights with respect to this Agreement, or (ii) said preferential rights of first
refusal shall have expired pursuant


                                       19
<PAGE>


to the terms of the governing documents. Seller shall also have received the
consent of any third parties required for the assignment of Assigned Real
Property Interests, including without limitation, consent of (1) the Carline
Land Trust for assignment of the New Dock Lease, (2) Ship Shoal Pipeline Company
for assignment of that Onshore Tie-In Agreement for the Ship Shoal Pipeline
System dated December 22, 1997 between Seller and Ship Shoal Pipeline Company,
(3) the Servitude for Pipeline between Seller and Henrietta Marie Smith Hunt,
(4) the Servitude for Pipeline between Seller and Gertrude B. Rodriquez, (5) the
Servitude for Pipeline between Seller and Arthur E. Lagard and Juanita Steward
Lagard, (6) the Servitude for Pipeline between Seller and IP Petroleum Company,
Inc. and (7) the Pipeline Right-of-Way Grant between Seller and the State of
Louisiana.

10.9 Collateral Agreements. The following agreements shall have been fully
executed and delivered:

         (a)      Louisiana Facilities Commercial Development Transition
                  Agreement;

         (b)      the Employment and Nonsolicitation/Noncompetition/
                  Confidentiality Agreement between Williams Energy Marketing &
                  Trading Company and Don Robinson; and

         (c)      the Consulting and Nonsolicitation/Noncompetition/
                  Confidentiality between Williams Energy Marketing & Trading
                  Company and Larry Golden;

         (d)      the "Property Lease Agreement" associated with the Terminal
                  Lease in the form attached hereto as Exhibit H;

         (e)      the Agreement between Williams Energy Marketing & Trading
                  Company and Seller, or its designated Affiliate, regarding the
                  services of Don Robinson and other Geonet employees who become
                  employees of Williams Energy Marketing & Trading Company for
                  the closing of the books of Geonet for the year ended December
                  31, 2001;

         (h)      the Transition Services Agreement between Williams Energy
                  Marketing & Trading Company, Seller and Buyer; and

         (f)      the Revenue Sharing Agreement between Williams Energy
                  Marketing & Trading Company and Seller.

10.10 Approvals. The conditions of approvals and authorizations from the board
of directors of Buyer's general partner and any special committee of that board
of directors reviewing this transaction have been satisfied.

                                   ARTICLE 11
                         LOSS BY CASUALTY; CONDEMNATION

11.1 Risk of Loss. Risk of loss of or damage to the Subject Property shall be
borne by Seller until the Closing Date; thereafter, Buyer shall bear the risk of
loss or damage. Seller shall promptly notify Buyer of any casualty to the
Subject Property, any condemnation proceeding commenced or threatened, or the
exercise of any preferential right to purchase any of the Subject Property prior
to the Closing. In the event of any such casualty, condemnation proceeding or
exercise of preferential rights, Buyer shall elect in writing to either (a)
purchase the Subject Property under the terms and conditions set forth herein
with a reduction to Purchase Price as agreed upon by Buyer and Seller before
Buyer makes this election, or (b) terminate this Agreement, in which event,
except as otherwise provided herein, neither Party shall have any further rights
or obligations hereunder.


                                       20
<PAGE>


                                   ARTICLE 12
                                 INDEMNIFICATION

12.1 Survival. Except as provided in Sections 8.4 and 12.4, the representations,
warranties, covenants and obligations of the Parties under Section 6.14 shall
survive until December 31, 2001 and under the remainder of this Agreement shall
survive until the first anniversary date of the Closing (with such time period
beginning at the Effective Time through December 31, 2001, the first anniversary
of this Agreement or forever, as appropriate, being referred to as the "Survival
Period"); provided, however, that any bona fide claim relating thereto (a) is
asserted in writing to the other Party specifying in reasonable detail the
specific nature of the Claim and the estimated amount of such Claim ("Claim
Notice"), and (b) shall, if delivered in accordance with Section 12.7 during the
Survival Period, with respect only to such Claim, survive the Survival Period.

12.2 Indemnification by Seller.

         (a) Seller shall indemnify, defend and hold harmless Buyer, its
Affiliates, successors and assigns and their respective directors, officers,
employees, shareholders, trustees, beneficiaries, representatives and agents
(collectively, the "Buyer Indemnitees") from and against any and all claims,
demands, actions or causes of action, assessments, judgments, court costs,
penalties, damages, interest, losses, costs, expenses, obligations, and
liabilities (including without limitation, reasonable consultants' and
attorneys' fees and expenses) of every type and nature whatsoever (collectively,
"Claims or Losses") suffered by Buyer as a result of:

         (i) any inaccuracy in or breach by Seller of any representation,
         warranty, covenant or agreement of Seller set forth in this Agreement ;

         (ii) the ownership or operation of the Subject Property prior to the
         Effective Time and events occurring or conditions existing prior to the
         Effective Time; provided, however, that this Section 12.2 shall not
         apply, and Section 12.4 shall govern, with respect to Claims or Losses
         arising out of environmental matters; or

         (iii) any noncompliance by Seller with any bulk transfer laws that may
         be applicable to the transaction contemplated by this Agreement.

12.3 Indemnification by Buyer. Buyer shall indemnify, defend and hold Seller,
its parent, Affiliates, successors and assigns and their respective directors,
officers, employees, shareholders, representatives, trustees, beneficiaries and
agents (collectively, the "Seller Indemnitees") harmless from and against any
and all Claims or Losses suffered by Seller as a result of:

         (a) any inaccuracy in or breach by Buyer of any representation,
warranty, covenant or agreement of Buyer set forth in this Agreement; or

         (b) the ownership, operation or use of the Subject Property that
relates to the period of time after the Effective Time.

12.4 Environmental Indemnification.

                  (a) BUYER HEREBY RELEASES AND DISCHARGES SELLER INDEMNITEES
         FROM, AND AGREES TO INDEMNIFY, DEFEND AND HOLD SELLER INDEMNITEES
         HARMLESS FROM, ANY AND ALL CLAIMS OR LOSSES AT LAW OR IN EQUITY, KNOWN
         OR UNKNOWN, WHETHER NOW EXISTING OR ARISING IN THE FUTURE, CONTINGENT
         OR OTHERWISE, REGARDLESS OF ANY


                                       21
<PAGE>


         NEGLIGENCE OR STRICT LIABILITY OF SELLER INDEMNITIES, WITH RESPECT TO
         ANY CONDITION OF THE ENVIRONMENT, WHETHER OR NOT ADVERSE AND WHETHER AT
         THE SUBJECT PROPERTY (REGARDLESS OF WHETHER THE CONDITION ORIGINATED AT
         THE SUBJECT PROPERTY OR OFF SITE TO THE SUBJECT PROPERTY) OR ANY
         PROPERTY OFF SITE TO THE SUBJECT PROPERTY (PROVIDED THAT THE CONDITION
         ORIGINATED AT THE SUBJECT PROPERTY), EXISTING BEFORE, OR ON, THE
         EFFECTIVE TIME OR ARISING AFTER THE EFFECTIVE TIME, INCLUDING, BUT NOT
         LIMITED TO:

                  (i) MATTERS OR CIRCUMSTANCES RELATING TO ENVIRONMENTAL LAWS
                  WHETHER IN EFFECT BEFORE, ON OR AFTER THE EFFECTIVE TIME;

                  (ii) THE RELEASE INTO THE ENVIRONMENT; OR

                  (iii) PROTECTION OF THE ENVIRONMENT OR PUBLIC HEALTH.

         (b) BUYER EXPRESSLY AGREES TO ASSUME THE RISK THAT THE SUBJECT PROPERTY
MAY CONTAIN HAZARDOUS MATERIALS ON THE SUBJECT PROPERTY OR IN THE ENVIRONMENT AT
THE SUBJECT PROPERTY, INCLUDING WITHOUT LIMITATION NATURALLY OCCURRING
RADIOACTIVE MATERIALS, HYDROCARBONS, OR HAZARDOUS MATERIALS , AND THAT PHYSICAL
CONDITIONS, WHETHER OR NOT ADVERSE, INCLUDING, BUT NOT LIMITED TO, THE PRESENCE
OF UNKNOWN ABANDONED FACILITIES, SUMPS AND PIPELINES THAT MAY NOT HAVE BEEN
REVEALED BY BUYER'S INVESTIGATION.

12.5 Limitation on Liability.

         (a) Neither party hereto shall have any liability for Claims or Losses
pursuant to Article 12 unless a Claim Notice has been delivered to the other
Party as required by Section 12.7 within the applicable Survival Period.

         (b) The Parties hereto agree to waive any rights to special,
incidental, consequential, indirect or punitive damages, including without
limitation, loss of profits, resulting from any Claim or Loss except to the
extent that such result from third party claims; provided however that the
foregoing restriction shall not relate (i) to a breach of the representation
provided in Section 6.14, regarding the condition of the Subject Property or
(ii) to any environmental matter for which the Buyer provides indemnity pursuant
to Section 12.4.

         (c) Buyer's only recourse for indemnification from the Seller for any
and all Claims or Losses pursuant to this Article 12 or otherwise, shall be to
collect from the Escrow Agent out of the Escrow Fund under the terms and methods
provided in Section 12.7 and the Escrow Agreement, which is attached hereto as
Exhibit H. UPON CLOSING, SELLER SHALL NO LONGER BE LIABLE IN ANYWAY UNDER THIS
AGREEMENT OR OTHERWISE BEYOND THE AMOUNT OF MONEY AVAILABLE IN THE ESCROW FUND
(MINUS ANY PENDING CLAIMS) AT THE TIME THE CLAIM IS MADE; PROVIDED, HOWEVER, IF
THE ESCROW FUND HAS ALREADY BEEN LIQUIDATED AND DISTRIBUTED TO SELLER PURSUANT
TO THE ESCROW AGREEMENT, SELLER SHALL NO LONGER BE LIABLE.


                                       22
<PAGE>


12.6 Cooperation by Buyer and Seller. Buyer and Seller shall cooperate fully
with one another in connection with any matters covered by the indemnity
obligations under this Agreement. Such cooperation shall include, without
limitation, providing the other Party with reasonable access to files,
properties and personnel and advance notification of any meeting or
communications with any third parties which could reasonably be expected to
affect the rights or obligations of the other Party under this Agreement.

12.7 Notice of Asserted Liability; Opportunity to Defend. All claims for
indemnification under this Article 12 shall be asserted and resolved pursuant to
this Section 12.7. Any person claiming indemnification hereunder is hereinafter
referred to as the "Indemnified Party" and any person against whom such claims
are asserted hereunder is hereinafter referred to as the "Indemnifying Party".

         (a) Third Party Claims. In the event that any Claims or Losses are
asserted against or sought to be collected from an Indemnified Party by a third
party ("Third Party Claims"), the Indemnified Party shall with reasonable
promptness provide to the Indemnifying Party a Third Party Claim Notice. The
Indemnifying Party shall not be obligated to indemnify the Indemnified Party
with respect to any such Third Party Claims if the Indemnified Party fails to
notify the Indemnifying Party thereof in accordance with the provisions of this
Agreement in reasonably sufficient time so that the Indemnifying Party's ability
to defend against the Third Party Claims is not prejudiced. The Indemnifying
Party shall have 30 days from the personal delivery or receipt of the Third
Party Claim Notice ("Notice Period") to notify the Indemnified Party (a) whether
or not it disputes the liability of the Indemnifying Party to the Indemnified
Party hereunder with respect to such Third Party Claims and/or (b) whether or
not it desires, at the sole cost and expense of the Indemnifying Party, to
defend the Indemnified Party against such Third Party Claims. If the
Indemnifying Party notifies the Indemnified Party within the Notice Period that
it desires to defend the Indemnified Party against such Third Party Claims, the
Indemnifying Party shall have the right to defend all appropriate proceedings,
with counsel of its own choosing, which proceedings shall be promptly settled or
prosecuted by them to a final conclusion. If the Indemnified Party desires to
participate in, but not control, any such defense or settlement it may do so at
its sole cost and expense. If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate with the Indemnifying Party and its
counsel in contesting any Third Party Claims that the Indemnifying Party elects
to contest or, if appropriate and related to the claim in question, in making
any counterclaim against the person asserting the Third Party Claims, or any
cross-complaint against any person. No Third Party Claim may be settled or
otherwise compromised in a manner which imposes any obligation or liability on
the Indemnifying Party or Indemnified Party without the prior written consent of
the Indemnifying Party or Indemnified Party, respectively, provided that a
reasonable defense(s) to such Third Party Claim exists.

         (b) Other Claims. A claim for indemnification for any matter not
involving a third party claim may be asserted by delivery of a Claim Notice to
the party from whom indemnification is sought. The Indemnified Party shall with
reasonable promptness provide to the Indemnifying Party such Claim Notice. The
Indemnifying Party shall not be obligated to indemnify the Indemnified Party
with respect to any such claims if the Indemnified Party fails to provide notice
to the Indemnifying Party thereof in accordance with the provisions of this
Agreement in reasonably sufficient time so that the Indemnifying Party's ability
to address the subject of the indemnification is not prejudiced.

12.8 Exclusive Remedy. As between the Buyer and Seller, the remedies and the
rights, obligations and limitations relating thereto set forth in this Article
12 are the exclusive remedies with respect to


                                       23
<PAGE>


this Agreement, the events giving rise to this Agreement, and the transactions
provided for herein or contemplated hereby or thereby.

                                   ARTICLE 13
                   DISCLAIMER OF CONDITION OF Subject Property

         EXCEPT AS PROVIDED IN ARTICLE 6, SELLER DISCLAIMS, AND BUYER HEREBY
WAIVES, ALL IMPLIED OR STATUTORY WARRANTIES AND REPRESENTATIONS OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, DESCRIPTION, CONDITIONS,
DESIGN OR OTHERWISE, WITH RESPECT TO THE Subject Property.

                                   ARTICLE 14
                                   TERMINATION

14.1 Termination Events. This Agreement may, by notice given prior to or at the
Closing, be terminated:

         (a) by either Buyer or Seller if a breach of any material provision of
this Agreement has been committed by the other party and such breach has not
been waived;

         (b) (1) by Buyer, if any of the conditions in Article 10 has not been
satisfied as of the Closing Date or if satisfaction of such a condition is or
becomes impossible (other than through the failure of Buyer to comply with its
obligations under this Agreement) and Buyer has not waived such condition on or
before Closing; or (2) by Seller, if any of the conditions in Article 9 has not
been satisfied as of the Closing Date or if satisfaction of such a condition is
or becomes impossible (other than through the failure of Seller to comply with
its obligations under this Agreement) and Seller has not waived such condition
on or before Closing;

         (c) by mutual consent of Buyer and Seller; or

         (d) by either Buyer or Seller if the Closing has not occurred (other
than through the failure of any party seeking to terminate this Agreement to
comply fully with its obligations under this Agreement) on or before October 31,
2001, or such later date as the parties may agree upon.

14.2 Effect of Termination. Each party's right of termination under Section 14.1
is in addition to any other rights it may have under this Agreement or
otherwise, and the exercise of a right of termination will not be an election of
remedies. If this Agreement is terminated pursuant to Section 14.1, all further
obligations of the parties under this Agreement will terminate except that the
obligations in Sections 6.16, 7.5, 8.5 and 15.2 will survive; provided, however,
that if this Agreement is terminated by a party because of the breach of the
Agreement by the other party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the other party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.


                                       24
<PAGE>


                                   ARTICLE 15
                                  MISCELLANEOUS

15.1 Notices. All notices or correspondence required or permitted to be given
hereunder shall be in writing. Notices may be given in person, or may be sent by
nationally recognized overnight courier, registered or certified mail (postage
prepaid and return receipt requested) or facsimile with written confirmation to
the party to be notified at the following address:

         If to Seller:       Geonet Gathering, Inc.
                             10203 Birchridge Drive
                             Suite 400
                             Humble, Texas 77338
                             Attn: President
                             Fax #: (281) 446-8442

         If to Buyer:        Williams Terminals Holdings, L.P.
                             One Williams Center, Mail Drop 720
                             Tulsa, Oklahoma   74101
                             Attn: Jay Wiese
                             Fax #: (918)573-6865

or such other address as may be designated by notice to the other party. Notices
shall be deemed given when received by the party to be notified; provided,
however, that notices received after 5:00 p.m. or on a non-business day shall be
deemed to be given the following business day.

15.2 Expenses. Except as otherwise provided herein, each party hereto shall bear
its own expenses incurred in connection with the preparation, execution and
performance of this Agreement and the transactions contemplated herein. In the
event of termination of this Agreement, the obligation of each party to pay its
own expenses will be subject to any rights of such party arising from a breach
of this Agreement by the other party.

15.3 Further Assurances. Buyer and Seller shall upon request execute and deliver
or cause to be executed and delivered all documents, conveyances, deeds,
assignments, or other instruments or further assurance, and shall do or cause to
be done any acts or things as may be reasonably necessary or advisable to
implement and give full effect to the provisions of this Agreement.

15.4 Waiver. Except as otherwise provided herein, neither the failure nor any
delay on the part of any party in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, or of any other right, power or
remedy; nor shall any single or partial exercise of any right, power or remedy
preclude any further or other exercise thereof, or the exercise of any other
right, power or remedy. No waiver of any of the provisions of this Agreement
shall be valid unless it is in writing and signed by the party against whom it
is sought to be enforced.

15.5 Parties in Interest. Nothing in this Agreement, expressed or implied, is
intended to create any third party beneficiary or to confer upon any third
person any rights or remedies under or by reason of this Agreement.

15.6 Assignability. This Agreement shall not be assigned in whole or in part by
either Party except upon the prior written consent of the other Party; provided,
however, that the preceding requirement for consent shall not apply to Buyer if
Buyer assigns this Agreement, in whole or in part, to one or more of its
Affiliates. In the later case, Buyer shall give Seller prompt notice of such
assignment.


                                       25
<PAGE>


15.7 Successor and Assigns. Subject to Section 15.6, this Agreement shall inure
to the benefit of and be binding upon Buyer and Seller and their respective
successors and assigns.

15.8 Amendments. This Agreement may only be amended or modified by a written
instrument executed by the duly authorized representatives of both Seller and
Buyer.

15.9 Headings. The article and section headings contained herein are for
convenience only and shall not in any way affect the meaning, construction or
interpretation of this Agreement.

15.10 Partial Invalidity. In the event any provision or portion of a provision
hereof is held to be invalid, void, or unenforceable, such holding shall not
affect the remaining portion of that provision or any other provision hereof.

15.11 Interpretation. This Agreement is the product of negotiations during which
all parties have had an opportunity to make alterations, changes, and deletions
to the text and have, in fact, made such alterations, deletions, and additions.
This Agreement should be read as if drafted equally by all concerned with no
presumption or penalty attached to any party for its particular role in
producing any preliminary of final draft of this Agreement.

15.12 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be an original, but all of which together shall constitute
one and the same instrument.

15.13 Governing Law. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER, SHALL BE CONSTRUED, INTERPRETED, ENFORCED, AND GOVERNED BY
THE LAWS OF THE STATE OF OKLAHOMA, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES
THEREOF; PROVIDED HOWEVER, REAL PROPERTY RIGHTS ASSOCIATED WITH THIS AGREEMENT
SHALL BE CONSTRUED, INTERPRETED, ENFORCED, AND GOVERNED BY THE LAWS OF THE STATE
OF LOUISIANA, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES THEREOF.

15.14 Entire Agreement. This Agreement, together with the exhibits and schedules
attached hereto, embodies the entire agreement and understanding between the
parties with respect to the subject matter hereof and supersedes any and all
prior agreements and understandings relating thereto, written and oral,
including, but not limited to, prior drafts of this Agreement and that certain
Nondisclosure Agreement executed by the Seller and Williams Energy Services,
LLC, dated February 23, 2001.

                [Remainder of this page intentionally left blank]


                                       26
<PAGE>


IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement
by their respective, duly authorized representatives as of the date first above
written.

Geonet Gathering, Inc.

By:      /s/ Larry J. Golden
   -------------------------------
Name:        Larry J. Golden
     -----------------------------
Title:       President
      ----------------------------

Williams Terminals Holdings, L.P.

By:      Williams NGL, LLC, a Delaware limited
         liability company, as general partner

         By:       /s/ Don R. Wellendorf
            ------------------------------------------
         Name:      Don R. Wellendorf
              ----------------------------------------
         Title: Sr. Vice President, CPO and Treasurer
               ---------------------------------------


                                       27
<PAGE>


                           LIST OF EXHIBITS/SCHEDULES


<Table>
<S>                           <C>
Exhibit A             -       Fee Property Description

Exhibit B             -       Personal Property Description

Exhibit C             -       Assigned Real Property Interests

Exhibit D             -       Assigned Permits

Exhibit E             -       Form of Special Warranty Deed

Exhibit F             -       Form of Bill of Sale

Exhibit G             -       Form of Assignment and Assumption Agreement

Exhibit H             -       Form of "Property Lease Agreement"

Exhibit I             -       Form of Escrow Agreement

Schedule J            -       Seller's Disclosure Schedule

Schedule K            -       Purchase Price Allocation
</Table>


                                       28
<PAGE>


                                    EXHIBIT A


                           [Fee Property Descriptions]

                                   Tract No. 1
A CERTAIN TRACT OF LAND, situated in the Parish of Terrebonne, Louisiana, shown
and designated as Tract 25 on a plat of survey entitled "Final Plat of Survey of
Oak Forest Plantation Estates, located in Section 80 and 81, T16S, R15E and
Sections 30 and 31, T17S, R15E, Terrebonne Parish, Louisiana", which plat was
dated September 19, 1979, revised October 29, 1979, prepared by the Office of T.
Baker Smith & Son, Inc., approved by Charles M. Camp and duly recorded November
30, 1979, at COB 776, folio 619, Entry Number 612226 and at Map Volume 49, folio
74 as Map Number 5361; said tract having the size and dimensions and being
located as shown on said plat; namely:

TRACT 25 containing 6.6150 acres, measuring a front of 126.22 feet on the
southerly ordinary low water line of Bayou Black by a depth of 2307.06 feet
along the easternmost line with a dept of 2303.27 feet along the westernmost
line, containing a width of 125.75 feet on the rear or southernmost side, being
bounded in the front by Bayou Black, on the easternmost side by property owned
by Thomas B. Goldsby, Jr., or assigns on the westernmost side by Tract 24, and
on the rear and southernmost side by property of Williams, Inc., or their
assigns, together with all improvements thereon and all rights, ways. privileges
and servitudes thereunto belonging or otherwise appertaining.

LESS AND EXCEPT the following portion of Tract 25 sold to Langdon S. Anderson,
Jr., et ux, by act dated January 7, 1985 and recorded at Entry No. 752048,
Terrebonne Parish, Louisiana, described as follows:

A certain portion of Lot 25 containing the southernmost 773 feet being bounded
as follows: on the north by the remainder of Tract 25 formerly owned by Marion
Hewett; on the west by other property of Langdon S. Anderson, Jr., now or
formerly; on the south by the land owned by Williams, Inc.; and on the east by
property owned by Thomas B. Goldsby, Jr., or his assigns. The northern line of
said property conveyed herein is also bordered by a drainage canal; as will be
more fully shown on the plat recorded in Map Volume 61, folio 11, records of
Terrebonne Parish. FOR TITLE SEE: COB 1322, folio 514, records of Terrebonne
Parish. SEE ALSO: Entry No. 928862.

Which has the address of 5379 Bayou Black Drive, Gibson, Louisiana 70356.


<PAGE>



                       Exhibit A [Fee Property] continued

                                   Tract No. 2

A certain tract of property situated in the Parish of Terrebonne, State of
Louisiana and designated as Lot One (1) of LIVE OAK ESTATES on a plat of survey
entitled "Final Plat Survey of Live Oak Estates Located in Section 81, T16S,
R15E and Section 30, T17S, R15E, Terrebonne Parish, Louisiana", dated February
27, 1980 and revised March 3, 1980, prepared by the office of T. Baker Smith &
Son, Inc., approved by Charles M. Camp, said plat having been duly filed of
record under Entry No. 632036 at COB 806 folio 153, and as Map No. 5731 at Map
Vol. 51, folio 34; said lot having the size and dimensions and being located as
shown on said plat, namely Lot One (1), containing 6.626 acres, measuring a
width of 126.24 feet along the southern ordinary low water line of Bayou Black
by a depth of 2,307.06 feet along its western property line and a depth of
2,310.94 feet along its eastern property line with a width along its rear or
southerly property line of 125.75 feet; together with all the buildings and
improvements thereon and all rights, ways, privileges and servitudes thereunto
belonging or in anywise appertaining. Bounded in the front by Bayou Black, on
the west by property of Douglas Fruge, et al, bounded on the east by Lot 2 of
Live Oak Estates, bounded in the rear by the property of Williams, Inc.

(See COB 800 folio 545, Entry No. 627891 and COB 849 folio 599, Entry No.
660319, records of Terrebonne Parish, Louisiana.)



<PAGE>



                                    EXHIBIT B


                        [Personal Property Descriptions]


o  Floating Roofs - Tank 8000, 8001, & 8002
o  Tank Bottom - Tank 8002
o  Tank Repairs - All Tanks
o  Site Preparation, Tank farm and 8 mile pipeline. Pipe Purchased for Repair of
   8 mile line and Construction two new lines
o  Truck Tanks o Pipeline construction - 8 mile line (6" pipeline)
o  Pipeline construction - new lines connecting terminal to "Carline" Dock and
   connecting terminal to Ship Shoal at Gibson (12", 8" and 6" pipelines)
o  Pumps and Electronics at Terminal including (3) Discharge pump units and (1)
   Offloading pump unit
o  Dock Construction on "Carline" Property
o  (2) dock areas with cranes and hoses
o  Miscellaneous Assets at Terminal, such as:
   - Office foundations and construction of buildings including (1) Dispatch
   bldg (1) Bunk House bldg and (1) MCC bldg
   - Hoses
   - Parking lot refurbishment
   - Paint
   - Plumbing
   - Computers and Monitors including (3) computers on site
   - Lab Equipment
o  Furniture & Fixtures at Terminal
o  Proprietary Computer Ticket System
o  Nissan Pickup Truck and Pursuit 2550 Cuddy Cabin Boat with two 200 hp Suzuki
   outdrive units (1986 model boat with 2000 model motors)
o  Lawn equipment including (1) 4200 John Deere Tractor with bush hog front end
   loader and box blade attachment, (1) LT 133 John Deere Lawn mower and (1)
   Weed eater
o  Portable Building
o  Spare pipe at 12" x 150 ' and 6 " x 100'.
o  (1) Tandem axle trailer for Tractor
o  (1) LATC unit located at Shell Equilon facility
o  (1) 6" pipeline 8 miles to Chacahuola tank farm


<PAGE>



                                    EXHIBIT C


                       [Assigned Real Property Interests]

o  Terminal Lease
o  New Dock Lease
o  On Shore Tie-In Agreement for the Ship Shoal Pipeline System dated December
   22, 1997 between Seller and Ship Shoal Pipeline Company
o  all interests identified on the attached "Exhibit C continued"


<PAGE>
                                                                    Page 1 of 14

EXHIBIT C CONTINUED


<Table>
<Caption>
TR. #   INSTRUMENT TITLE             DATED      GRANTOR/LICENSOR                GRANTEE/LICENSEE
-----   ----------------             -----      ----------------                ----------------
<S>     <C>                          <C>        <C>                             <C>
322     SERVITUDE FOR PIPELINES      3/15/99    SHELL OIL COMPANY,              GEONET GATHERING, INC.,
                                                A DELAWARE CORPORATION          A TEXAS CORPORATION


324,    SERVITUDE FOR PIPELINES      3/10/99    EQUILON PIPELINE COMPANY        GEONET GATHERING, INC.,
325,                                            LLC, A DELAWARE LIMITED         A TEXAS CORPORATION
326,                                            LIABILITY COMPANY
327 &
328

329     SERVITUDE FOR PIPELINE       11/13/98   DENNIS R. LEONARD AND           GEONET GATHERING, INC.,
                                                KAREN FONTENOT LEONARD          A TEXAS CORPORATION

331     SERVITUDE FOR PIPELINE       11/11/98   SUZANNE M. LANDRY               GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


332     SERVITUDE FOR PIPELINE       11/11/98   SIDNEY J. LANDRY, JR. AND       GEONET GATHERING, INC.,
                                                HAZEL A. LANDRY                 A TEXAS CORPORATION


333     SERVITUDE FOR PIPELINE       11/9/98    CRAIG J. THERIOT, SR. AND       GEONET GATHERING, INC.,
                                                WINNIE BOUDREAUX THERIOT        A TEXAS CORPORATION


334     SERVITUDE FOR PIPELINE       12/30/98   ELISHA LYNORE ROBINSON,         GEONET GATHERING, INC.,
                                                INDIVIDUALLY AND AS NATURAL     A TEXAS CORPORATION
                                                TUTRIX OF CHARLES TOBIAS
                                                ROBINSON AND CHANTLER
                                                TIANA ROBINSON


<Caption>


TR. #   INSTRUMENT TITLE             LAND DESCRIPTION                                             DATE REC.      BOOK      ENTRY #
-----   ----------------             ----------------                                             ---------      ----      -------
<S>     <C>                          <C>                                                          <C>            <C>       <C>
322     SERVITUDE FOR PIPELINES      A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK           3/26/99       1642       1042381
                                     OF BAYOU BLACK, DESIGNATED AS LOT 22 IN SECTION
                                     30, TOWNSHIP 17 SOUTH, RANGE 15 EAST.

324,    SERVITUDE FOR PIPELINES      A CERTAIN TRACT OF LAND ON LEFT DESCENDING BANK OF            3/26/99       1642       1042380
325,                                 BAYOU BLACK, DESIGNATED AS LOTS 17, 18, 19, 20 AND
326,                                 21 IN SECTION 30, TOWNSHIP 17 SOUTH, RANGE 15 EAST.
327 &
328

329     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99       1642       1042463
                                     BAYOU BLACK LOCATED IN SECTION 30, TOWNSHIP 17 SOUTH,
                                     RANGE 15 EAST AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

331     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99       1642       1042462
                                     OF BAYOU BLACK LOCATED IN SECTION 30, TOWNSHIP 17 SOUTH,
                                     RANGE 15 EAST AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

332     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99       1642       1042461
                                     BAYOU BLACK LOCATED IN SECTION 30, TOWNSHIP 17 SOUTH,
                                     RANGE 15 EAST AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

333     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99       1642       1042460
                                     BAYOU BLACK LOCATED IN SECTION 30, TOWNSHIP 17 SOUTH,
                                     RANGE 15 EAST AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

334     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        UNKNOWN       COB        1046139
                                     BAYOU BLACK LOCATED IN SECTION 30, TOWNSHIP 17 SOUTH,                       1648
                                     RANGE 15 EAST AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.
</Table>



<PAGE>



                                                                    Page 2 of 14


EXHIBIT C CONTINUED


<Table>
<Caption>
TR. #   INSTRUMENT TITLE             DATED      GRANTOR/LICENSOR                GRANTEE/LICENSEE
-----   ----------------             -----      ----------------                ----------------
<S>     <C>                          <C>        <C>                             <C>
335     SERVITUDE FOR PIPELINE       12/17/98   HOWARD D. PINKSTON AND          GEONET GATHERING, INC.,
                                                BRENDA DIGGS PINKSTON           A TEXAS CORPORATION


336     SERVITUDE FOR PIPELINE       1/5/99     ELDRIDGE J. GAUDET              GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


337     SERVITUDE FOR PIPELINE       12/4/98    HERMAN L. CRAWFORD              GEONET GATHERING, INC.,
& 338                                           AND CARRIE T. CRAWFORD          A TEXAS CORPORATION


339     SERVITUDE FOR PIPELINE       1/14/99    MORGAN PIERCE                   GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION





340     SERVITUDE FOR PIPELINE       1/12/99    DAVID N. PIERCE                 GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION





342     SERVITUDE FOR PIPELINE       1/7/99     RUDOLPH P. AUCOIN AND           GEONET GATHERING, INC.,
                                                ADA GUIDRY AUCOIN               A TEXAS CORPORATION


<Caption>


TR. #   INSTRUMENT TITLE             LAND DESCRIPTION                                             DATE REC.      BOOK      ENTRY #
-----   ----------------             ----------------                                             ---------      ----      -------
<S>     <C>                          <C>                                                          <C>            <C>       <C>
335     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99       1642       1042459
                                     BAYOU BLACK LOCATED IN SECTION 30, TOWNSHIP 17 SOUTH,
                                     RANGE 15 EAST AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

336     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99       1642       1042458
                                     BAYOU BLACK LOCATED IN SECTION 30, TOWNSHIP 17 SOUTH,
                                     RANGE 15 EAST AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

337     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99       1642       1042457
& 338                                BAYOU BLACK LOCATED IN SECTION 30, TOWNSHIP 17 SOUTH,
                                     RANGE 15 EAST AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

339     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99       1642       1042456
                                     BAYOU BLACK SHOWN AND DESIGNATED AS TRACT SEVEN ON A
                                     PLAT OF SURVEY ENTITLED "FINAL PLAT SURVEY OF LIVE OAK
                                     ESTATES, LOCATED IN SECTION 81, T16S-R15E AND SECTION 30,
                                     T17S-R15E, TERREBONNE PARRISH, LOUISIANA" AS MORE FULLY
                                     DESCRIBED IN THIS INSTRUMENT.

340     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99       1642       1042455
                                     BAYOU BLACK SHOWN AND DESIGNATED AS TRACT SIX ON A PLAT
                                     OF SURVEY ENTITLED "FINAL PLAT SURVEY OF LIVE OAK ESTATES
                                     LOCATED IN SECTION 81 T16S-R15E AND SECTION 30, T17S- R15E,
                                     TERREBONNE PARRISH, LOUISIANA" AS MORE FULLY DESCRIBED IN
                                     THIS INSTRUMENT.

342     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99       1642       1042454
                                     BAYOU BLACK SHOWN AND DESIGNATED AS TRACTS THREE, FOUR
                                     AND FIVE OF LIVE OAK ESTATES, LOCATED IN SECTION 81, T16S-
                                     R15E AND SECTION 30, T17S-R15E AS MORE FULLY DESCRIBED IN
                                     THIS INSTRUMENT.
</Table>


<PAGE>



                                                                    Page 3 of 14
EXHIBIT C CONTINUED


<Table>
<Caption>
TR. #   INSTRUMENT TITLE             DATED      GRANTOR/LICENSOR                GRANTEE/LICENSEE
-----   ----------------             -----      ----------------                ----------------
<S>     <C>                          <C>        <C>                             <C>
343     SERVITUDE FOR PIPELINE       1/7/99     ROGERS DEHART, JR. AND          GEONET GATHERING, INC.,
                                                KATHY A. DEHART                 A TEXAS CORPORATION



344     SERVITUDE FOR PIPELINE       2/22/99    KIM B. LEBLANC                  GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION



345,    SERVITUDE FOR PIPELINE       1/22/99    BOB'S BAYOU BLACK MARINA,       GEONET GATHERING, INC.,
346 &                                           INC.                            A TEXAS CORPORATION
348

349     SERVITUDE FOR PIPELINE       12/8/98    FRANCIS A. MARCEAUX AND         GEONET GATHERING, INC.,
                                                RUTH C. MARCEAUX                A TEXAS CORPORATION


351     SERVITUDE FOR PIPELINE       11/16/98   NORMAN H. BREAUX, JR.           GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


352     SERVITUDE FOR PIPELINE       12/18/98   DREXEL D. ROY, JR. AND          GEONET GATHERING, INC.,
                                                BETHANY ROY                     A TEXAS CORPORATION


353     SERVITUDE FOR PIPELINE       12/21/98   DWAYNE T. ROY                   GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


<Caption>


TR. #   INSTRUMENT TITLE           LAND DESCRIPTION                                               DATE REC.      BOOK      ENTRY #
-----   ----------------           ----------------                                               ---------      ----      -------
<S>     <C>                        <C>                                                            <C>            <C>       <C>
343     SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042453
                                   BAYOU BLACK SHOWN AND DESIGNATED AS TRACT 2 OF LIVE
                                   OAK ESTATES LOCATED IN SECTION 81, T16S-R15E AND SECTION
                                   30, T17S-R15E AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

344     SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042452
                                   BAYOU BLACK LOCATED IN SECTION 61, T16S-R14E AND
                                   SECTION 72, T16S-R15E AS MORE FULLY DESCRIBED IN THIS
                                   INSTRUMENT.

345,    SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042451
346 &                              BAYOU BLACK LOCATED IN SECTION 30, T16S-R15E AS MORE
348                                FULLY DESCRIBED IN THIS INSTRUMENT.

349     SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042450
                                   BAYOU BLACK LOCATED IN SECTION 81, T16S-R15E AS MORE
                                   FULLY DESCRIBED IN THIS INSTRUMENT.

351     SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042449
                                   BAYOU BLACK LOCATED IN SECTION 81, T16S-R15E AS MORE
                                   FULLY DESCRIBED IN THIS INSTRUMENT.

352     SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042448
                                   BAYOU BLACK LOCATED IN SECTION 81, T16S-R15E AS MORE
                                   FULLY DESCRIBED IN THIS INSTRUMENT.

353     SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042447
                                   BAYOU BLACK LOCATED IN SECTION 81, T16S-R15E, BEING LOT
                                   19 OF OAK FOREST PLANTATION AS MORE FULLY DESCRIBED IN THIS
                                   INSTRUMENT.
</Table>



<PAGE>



                                                                    Page 4 of 14

EXHIBIT C CONTINUED


<Table>
<Caption>
TR. #   INSTRUMENT TITLE             DATED      GRANTOR/LICENSOR                GRANTEE/LICENSEE
-----   ----------------             -----      ----------------                ----------------
<S>     <C>                          <C>        <C>                             <C>

354     SERVITUDE FOR PIPELINE       12/4/98    CHARLES A. AUCOIN AND           GEONET GATHERING, INC.,
                                                LINDA WILLIAMS AUCOIN           A TEXAS CORPORATION


355     SERVITUDE FOR PIPELINE       12/10/98   ETHEL DUPRE FRYOU, ET AL        GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


356     SERVITUDE FOR PIPELINE       3/15/99    RODERIC D. RYAN AND             GEONET GATHERING, INC.,
                                                ANNE HEBERT RYAN                A TEXAS CORPORATION


357     SERVITUDE FOR PIPELINE       1/27/99    RICHARD JAMES AUTIN, JR.        GEONET GATHERING, INC.,
                                                AND TERRI MARTIN AUTIN          A TEXAS CORPORATION


358     SERVITUDE FOR PIPELINE       11/17/98   ALFRED C. BERGERON AND          GEONET GATHERING, INC.,
                                                SHIRLEY SAVOIE BERGERON         A TEXAS CORPORATION


359     SERVITUDE FOR PIPELINE       1/25/99    CARROL J. BOYNE AND GLORIA      GEONET GATHERING, INC.,
                                                LEON BOYNE                      A TEXAS CORPORATION


360     SERVITUDE FOR PIPELINE       11/4/98    DAISY GUNNER DIGGS,             GEONET GATHERING, INC.,
                                                INDIVIDUALLY AND AS CO-TRUSTEE  A TEXAS CORPORATION
                                                OF THE BYRON DIGGS TRUST AND
                                                THE SHARON DIGGS TRUST
                                                AND RICKY LEBLANC, AS
                                                CO-TRUSTEE OF THE BYRON DIGGS
                                                TRUST AND THE SHARON DIGGS
                                                TRUST


<Caption>


TR. #   INSTRUMENT TITLE          LAND DESCRIPTION                                              DATE REC.       BOOK      ENTRY #
-----   ----------------          ----------------                                              ---------       ----      -------
<S>     <C>                       <C>                                                           <C>             <C>       <C>

354     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042446
                                  BAYOU BLACK LOCATED IN SECTION 81, T16S-R15E AS
                                  MORE FULLY DESCRIBED IN THIS INSTRUMENT.

355     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042445
                                  BAYOU BLACK LOCATED IN SECTION 81, T16S-R15E AS
                                  MORE FULLY DESCRIBED IN THIS INSTRUMENT.

356     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042444
                                  BAYOU BLACK LOCATED IN SECTION 81, T16S-R15E AS
                                  MORE FULLY DESCRIBED IN THIS INSTRUMENT.

357     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042443
                                  BAYOU BLACK LOCATED IN SECTION 81, T16S-R15E AS
                                  MORE FULLY DESCRIBED IN THIS INSTRUMENT.

358     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042442
                                  BAYOU BLACK LOCATED IN SECTIONS 80 AND/OR 81, T16S-
                                  R15E AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

359     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042441
                                  BAYOU BLACK LOCATED IN SECTIONS 80 AND/OR 81, T16S-
                                  R15E AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

360     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF         3/26/99        1642       1042440
                                  BAYOU BLACK LOCATED IN SECTIONS 80 AND/OR 81, T16S-
                                  R15E AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.
</Table>


<PAGE>


                                                                    Page 5 of 14


EXHIBIT C CONTINUED


<Table>
<Caption>
TR. #   INSTRUMENT TITLE             DATED      GRANTOR/LICENSOR                GRANTEE/LICENSEE
-----   ----------------             -----      ----------------                ----------------
<S>     <C>                          <C>        <C>                             <C>
361     SERVITUDE FOR PIPELINE       11/5/98    GILBERT M. GOLDMAN AND          GEONET GATHERING, INC.,
                                                MARY MORRIS GOLDMAN             A TEXAS CORPORATION


362     SERVITUDE FOR PIPELINE       11/5/98    ERIC M. WILKINSON               GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


363     SERVITUDE FOR PIPELINE       1/22/99    JOHN D. WHIPPLE AND             GEONET GATHERING, INC.,
                                                CHRISTINA L. WHIPPLE            A TEXAS CORPORATION





364,    SERVITUDE FOR PIPELINE       10/26/98   MARGARET T. GUIDRY, PAUL        GEONET GATHERING, INC.,
365 &                                           HAROLD GUIDRY AND ERIC C.       A TEXAS CORPORATION
366                                             GUIDRY

364,    SERVITUDE FOR PIPELINE       10/26/98   KENNETH J. GUIDRY               GEONET GATHERING, INC.,
365 &
366

367     SERVITUDE FOR PIPELINE       11/10/98   LEEWOOD L. HEBERT AND           GEONET GATHERING, INC.,
                                                HELLEN ORTEGO HEBERT            A TEXAS CORPORATION



<Caption>


TR. #   INSTRUMENT TITLE           LAND DESCRIPTION                                               DATE REC.     BOOK      ENTRY #
-----   ----------------           ----------------                                               ---------     ----      -------
<S>     <C>                        <C>                                                            <C>           <C>       <C>
361     SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99      1642       1042439
                                   BAYOU BLACK IN SECTIONS 80 AND/OR 81, T16S-R15E
                                   AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

362     SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99      1642       1042438
                                   BAYOU BLACK IN SECTIONS 80 AND/OR 81, T16S-R15E AS
                                   MORE FULLY DESCRIBED IN THIS INSTRUMENT.

363     SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99      1642       1042437
                                   BAYOU BLACK SHOWN AND DESIGNATED AS TRACT EIGHT ON A
                                   PLAT OF SURVEY ENTITLED "FINAL PLAT SURVEY OF OAK FOREST
                                   PLANTATION ESTATES LOCATED IN SECTIONS 80 & 81, T16S-R15E
                                   AND SECTIONS 30 & 31, T17S-R15E, TERREBONNE PARISH,
                                   LOUISIANA" AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

364,    SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99      1642       1042436
365 &                              BAYOU BLACK LOCATED IN SECTION 81, T16S-R15E AS MORE FULLY
366                                DESCRIBED IN THIS INSTRUMENT.

364,    SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99      1642       1042435
365 &                              BAYOU BLACK LOCATED IN SECTION 81, T16S-R15E AS MORE
366                                FULLY DESCRIBED IN THIS INSTRUMENT.

367     SERVITUDE FOR PIPELINE     A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99      1642       1042434
                                   BAYOU BLACK SHOWN AND DESIGNATED AS TRACT THREE ON
                                   A PLAT OF SURVEY ENTITLED "FINAL PLAT SURVEY OF OAK FOREST
                                   PLANTATION ESTATES LOCATED IN SECTION 80, T16S-R15E AND
                                   SECTIONS 30 & 31, T17S-R15E, TERREBONNE PARISH,
                                   LOUISIANA" AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.
</Table>


<PAGE>


                                                                    Page 6 of 14

EXHIBIT C CONTINUED


<Table>
<Caption>
TR. #   INSTRUMENT TITLE             DATED      GRANTOR/LICENSOR                GRANTEE/LICENSEE
-----   ----------------             -----      ----------------                ----------------
<S>     <C>                          <C>        <C>                             <C>
368     SERVITUDE FOR PIPELINE       2/12/99    ARTHUR D. LAGARD AND            GEONET GATHERING, INC.,
                                                JUANITA STEWARD LAGARD          A TEXAS CORPORATION






369     SERVITUDE FOR PIPELINE       11/2/98    HENRY J. TYLER AND              GEONET GATHERING, INC.,
                                                CLAUDETTE DIGGS TYLER           A TEXAS CORPORATION





370     SERVITUDE FOR PIPELINE       2/8/99     MCARTHUR GIROIR AND             GEONET GATHERING, INC.,
                                                LORRAINE BOURGEOIS GIROIR       A TEXAS CORPORATION


371     SERVITUDE FOR PIPELINE       2/4/99     MARIE VALENTI TRAINER,          GEONET GATHERING, INC.,
                                                EXECUTRIX AND                   A TEXAS CORPORATION
                                                AS A REPRESENTATIVE OF THE
                                                SUCCESSION OF CECIL W. TRAINER

371-B   SERVITUDE FOR PIPELINE       11/4/98    JASON PAUL BOURGEOIS AND        GEONET GATHERING, INC.,
                                                CHASITY H. BOURGEOIS            A TEXAS CORPORATION


373     SERVITUDE FOR PIPELINE       10/5/98    OLGA BERTRAND SIMON AND         GEONET GATHERING, INC.,
                                                BETTY JANE SIMON VEILLON        A TEXAS CORPORATION



<Caption>


TR. #   INSTRUMENT TITLE          LAND DESCRIPTION                                                DATE REC.     BOOK      ENTRY #
-----   ----------------          ----------------                                                ---------     ----      -------
<S>     <C>                       <C>                                                             <C>           <C>       <C>
368     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF           2/12/99      1637       1039665
                                  BAYOU BLACK SHOWN AND DESIGNATED AS TRACT TWO ON A
                                  A PLAT OF SURVEY ENTITLED "FINAL PLAT SURVEY OF OAK
                                  FOREST PLANTATION ESTATES, LOCATED IN SECTION
                                  80, T16S-R15E AND SECTIONS 30 & 31, T17S-R15E,
                                  TERREBONNE PARISH, LOUISIANA" AS MORE FULLY DESCRIBED
                                  IN THIS INSTRUMENT.

369     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF           3/26/99      1642       1042433
                                  BAYOU BLACK SHOWN AND DESIGNATED AS TRACT ONE ON A
                                  PLAT OF SURVEY ENTITLED "FINAL PLAT SURVEY OF OAK FOREST
                                  PLANTATION ESTATES, LOCATED IN SECTION 80, T16S-R15E AND
                                  SECTIONS 30 & 31, T17S-R15E, TERREBONNE PARISH, LOUISIANA" AS
                                  MORE FULLY DESCRIBED IN THIS INSTRUMENT.

370     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF           3/26/99      1642       1042432
                                  BAYOU BLACK IN SECTION 80, T16S-R15E AS MORE FULLY
                                  DESCRIBED IN THIS INSTRUMENT.

371     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF           3/26/99      1642       1042431
                                  BAYOU BLACK IN SECTION 80, T16S-R15E AS MORE FULLY
                                  DESCRIBED IN THIS INSTRUMENT.


371-B   SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF           3/26/99      1642       1042430
                                  BAYOU BLACK IN SECTION 80, T16S-R15E AS MORE FULLY
                                  DESCRIBED IN THIS INSTRUMENT.

373     SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF           3/26/99      1642       1042429
                                  BAYOU BLACK IN SECTION 80, T16S-R15E AS MORE FULLY
                                  DESCRIBED IN THIS INSTRUMENT.
</Table>


<PAGE>


                                                                    Page 7 of 14


EXHIBIT C CONTINUED


<Table>
<Caption>
TR. #   INSTRUMENT TITLE             DATED      GRANTOR/LICENSOR                GRANTEE/LICENSEE
-----   ----------------             -----      ----------------                ----------------
<S>     <C>                          <C>        <C>                             <C>

374     SERVITUDE FOR PIPELINE       1/28/99    RALPH R. STRAHN AND             GEONET GATHERING, INC.,
                                                IVA E. LEE STRAHN               A TEXAS CORPORATION


375     SERVITUDE FOR PIPELINE       1/29/99    LARRY J. AUCOIN AND             GEONET GATHERING, INC.,
                                                PHYLLIS RODRIGUEZ AUCOIN        A TEXAS CORPORATION


376     SERVITUDE FOR PIPELINE       1/29/99    CARRIE TURNER GIVENS            GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


377     SERVITUDE FOR PIPELINE       1/11/99    PAUL W. GRANGER                 GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


379-B   SERVITUDE FOR PIPELINE       1/19/99    RICARDO P. VEGA AND             GEONET GATHERING, INC.,
                                                DONNA PIERCE VEGA               A TEXAS CORPORATION


381     SERVITUDE FOR PIPELINE       11/17/98   TERREBONNE PARISH               GEONET GATHERING, INC.,
                                                RECREATION DISTRICT NO. 8       A TEXAS CORPORATION


382     SERVITUDE FOR PIPELINE       1/15/99    JAMES P. DOIRON, SR. AND        GEONET GATHERING, INC.,
                                                ROSLYN F. DOIRON                A TEXAS CORPORATION


383     SERVITUDE FOR PIPELINE       1/19/99    ERNEST A. VICKNAIR, JR.         GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION



<Caption>


TR. #   INSTRUMENT TITLE             LAND DESCRIPTION                                            DATE REC.       BOOK      ENTRY #
-----   ----------------             ----------------                                            ---------       ----      -------
<S>     <C>                          <C>                                                         <C>             <C>       <C>
374     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042428
                                     BAYOU BLACK IN SECTIONS 79 AND/OR 80, T16S-R15E AS
                                     MORE FULLY DESCRIBED IN THIS INSTRUMENT.

375     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042427
                                     BAYOU BLACK IN SECTION 79, T16S-R15E AS MORE FULLY
                                     DESCRIBED IN THIS INSTRUMENT.

376     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042425
                                     BAYOU BLACK IN SECTION 78 AND/OR 79, T16S-R15E AS
                                     MORE FULLY DESCRIBED IN THIS INSTRUMENT.

377     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042424
                                     BAYOU BLACK IN SECTION 78 AND/OR 79, T16S-R15E AS
                                     MORE FULLY DESCRIBED IN THIS INSTRUMENT.

379-B   SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042423
                                     BAYOU BLACK IN SECTION 78 AND/OR 79, T16S-R15E AS
                                     MORE FULLY DESCRIBED IN THIS INSTRUMENT.

381     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042422
                                     BAYOU BLACK IN SECTION 78, T16S-R15E AS MORE FULLY
                                     DESCRIBED IN THIS INSTRUMENT.

382     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042421
                                     BAYOU BLACK IN SECTION 78, T16S-R15E AS MORE FULLY
                                     DESCRIBED IN THIS INSTRUMENT.

383     SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042426
                                     BAYOU BLACK IN SECTION 79, T16S-R15E AS MORE FULLY
                                     DESCRIBED IN THIS INSTRUMENT.
</Table>



<PAGE>


                                                                    Page 8 of 14

EXHIBIT C CONTINUED


<Table>
<Caption>
TR. #   INSTRUMENT TITLE             DATED      GRANTOR/LICENSOR                GRANTEE/LICENSEE
-----   ----------------             -----      ----------------                ----------------
<S>     <C>                          <C>        <C>                             <C>

384     SERVITUDE OF USE             12/18/98   IP PETROLEUM COMPANY,           GEONET GATHERING, INC.
        FOR PIPELINE                            INC., A DELAWARE
                                                CORPORATION

384    SERVITUDE FOR PIPELINE        10/19/98   DIANNE S. POWELL, ET AL         GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


384    SERVITUDE FOR PIPELINE        10/5/98    EDWARD SIMMONS                  GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


384    SERVITUDE FOR PIPELINE        10/27/98   IDA MAE SIMMONS AND             GEONET GATHERING, INC.,
                                                MICHAEL CARL SIMMONS, SR.       A TEXAS CORPORATION


384    SERVITUDE FOR PIPELINE        10/28/98   AD VAL, INC.                    GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


384    SERVITUDE FOR PIPELINE        10/14/98   MARK J. HATHERILL               GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


384    SERVITUDE FOR PIPELINE        12/10/98   BARBARA ANN SONNIER             GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        11/30/98   JOHN L. GUIDRY                  GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


<Caption>


TR. #   INSTRUMENT TITLE            LAND DESCRIPTION                                            DATE REC.       BOOK      ENTRY #
-----   ----------------            ----------------                                            ---------       ----      -------
<S>     <C>                         <C>                                                         <C>             <C>       <C>
384    SERVITUDE OF USE             A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042420
       FOR PIPELINE                 BAYOU BLACK IN SECTIONS 76, 77 AND 78, T16S-R15E
                                    AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

384    SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042419
                                    BAYOU BLACK IN SECTIONS 76, 77 AND 78, T16S-R15E
                                    AS MORE FULLY DESCRIBED IN THIS INSTRUMENT.

384    SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042418
                                    BAYOU BLACK IN SECTIONS 76, 77 AND 78, T16S-R15E AS
                                    MORE FULLY DESCRIBED IN THIS INSTRUMENT.

384    SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042417
                                    BAYOU BLACK IN SECTIONS 76, 77 AND 78, T16S-R15E AS
                                    MORE FULLY DESCRIBED IN THIS INSTRUMENT.

384    SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042416
                                    BAYOU BLACK IN SECTIONS 76, 77 AND 78, T16S-R15E AS
                                    MORE FULLY DESCRIBED IN THIS INSTRUMENT.

384    SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042415
                                    BAYOU BLACK IN SECTIONS 76, 77 AND 78, T16S-R15E AS
                                    MORE FULLY DESCRIBED IN THIS INSTRUMENT.

384    SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042414
                                    BAYOU BLACK IN SECTIONS 76, 77 AND 78, T16S-R15E AS
                                    MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE       A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF       3/26/99        1642       1042388
                                    BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                    MORE FULLY DESCRIBED IN THIS INSTRUMENT.
</Table>



<PAGE>


                                                                    Page 9 of 14

EXHIBIT C CONTINUED

<Table>
<Caption>
TR. #   INSTRUMENT TITLE             DATED      GRANTOR/LICENSOR                GRANTEE/LICENSEE
-----   ----------------             -----      ----------------                ----------------
<S>     <C>                          <C>        <C>                             <C>
387    SERVITUDE FOR PIPELINE        11/23/98   CHARLES F. GUIDRY               GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        2/24/99    ELSIE W. AUSTIN                 GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        2/24/99    NANCY W. CASTETTE               GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        2/24/99    KYLE GUIDRY                     GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        2/19/99    CAROLYN ANDERSON PALMER         GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        2/9/99     CHERYLL GUIDRY HENSON           GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        2/6/99     JANET GUIDRY BLANCHARD          GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        1/18/99    MICHAEL J. POWELL               GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION



<Caption>


TR. #   INSTRUMENT TITLE         LAND DESCRIPTION                                               DATE REC.       BOOK      ENTRY #
-----   ----------------         ----------------                                               ---------       ----      -------
<S>     <C>                      <C>                                                            <C>             <C>       <C>
387    SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99        1642       1042387
                                 BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                 MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99        1642       1042413
                                 BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                 MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99        1642       1042412
                                 BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                 MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99        1642       1042411
                                 BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                 MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99        1642       1042410
                                 BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                 MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99        1642       1042409
                                 BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                 MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99        1642       1042408
                                 BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                 MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE    A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF          3/26/99        1642       1042407
                                 BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                 MORE FULLY DESCRIBED IN THIS INSTRUMENT.
</Table>



<PAGE>


                                                                   Page 10 of 14

EXHIBIT C CONTINUED


<Table>
<Caption>
TR. #   INSTRUMENT TITLE             DATED      GRANTOR/LICENSOR                GRANTEE/LICENSEE
-----   ----------------             -----      ----------------                ----------------
<S>     <C>                          <C>        <C>                             <C>
387    SERVITUDE FOR PIPELINE        1/25/99    ROY A. BROWN,                   GEONET GATHERING, INC.,
                                                USUFRUCTUARY AND                A TEXAS CORPORATION
                                                LEAH CATHERINE BROWN

387    SERVITUDE FOR PIPELINE        1/26/99    SHARON GUIDRY DALTON            GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        1/23/99    DAVID E. POWELL                 GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        1/20/99    SIDNEY J. LANDRY                GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        1/22/99    KATHLEEN L. PRENTICE            GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        1/15/99    LAMAR LANDRY                    GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        1/13/99    MONICA LANDRY                   GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


387    SERVITUDE FOR PIPELINE        1/14/99    JUDY W. BRUNO                   GEONET GATHERING, INC.,
                                                                                A TEXAS CORPORATION


<Caption>


TR. #   INSTRUMENT TITLE           LAND DESCRIPTION                                             DATE REC.       BOOK       ENTRY #
-----   ----------------           ----------------                                             ---------       ----       -------
<S>     <C>                        <C>                                                          <C>             <C>        <C>
387    SERVITUDE FOR PIPELINE      A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99        1642       1042406
                                   BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                   MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE      A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99        1642       1042405
                                   BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                   MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE      A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99        1642       1042404
                                   BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                   MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE      A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99        1642       1042403
                                   BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                   MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE      A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99        1642       1042402
                                   BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                   MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE      A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99        1642       1042401
                                   BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                   MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE      A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99        1642       1042400
                                   BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                   MORE FULLY DESCRIBED IN THIS INSTRUMENT.

387    SERVITUDE FOR PIPELINE      A CERTAIN TRACT OF LAND ON THE LEFT DESCENDING BANK OF        3/26/99        1642       1042399
                                   BAYOU BLACK IN SECTIONS 75 AND 76, T16S-R15E AS
                                   MORE FULLY DESCRIBED IN THIS INSTRUMENT.
</Table>

<PAGE>



                                    EXHIBIT D


                         [Assigned Permits Description]


<Table>
<Caption>
NAME OF PERMIT                                                   ASSIGNABILITY
--------------                                                   -------------
<S>                                                              <C>
1.    Spill Prevention Control/Spill Prevention                   Assignable
      Control and Countermeasure Plan

2.    Oil Transfer Manual                                         Assignable

3.    Facility Response Plan                                      Assignable

4.    Air Permit                                                  Assignable
</Table>




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(E)
<SEQUENCE>10
<FILENAME>d94597ex10-e.txt
<DESCRIPTION>PRODUCTS TERMINALLING AGREEMENT
<TEXT>
<PAGE>
                                                                   EXHIBIT 10(e)

                         PRODUCTS TERMINALLING AGREEMENT

THIS PRODUCTS TERMINALLING AGREEMENT ("AGREEMENT"), EXECUTED ON THE 1ST DAY OF
NOVEMBER, 2001, IS MADE BETWEEN WILLIAMS TERMINALS HOLDINGS, L.P., A DELAWARE
LIMITED PARTNERSHIP, WHOSE ADDRESS IS P.O. BOX 3448, MD 720-A, TULSA, OKLAHOMA
74101 ("WILLIAMS") AND WILLIAMS ENERGY MARKETING & TRADING COMPANY A DELAWARE
CORPORATION, WHOSE ADDRESS IS ONE WILLIAMS CENTER, TULSA, OKLAHOMA 74172
("CUSTOMER"). IN ACCORDANCE WITH THIS AGREEMENT, WILLIAMS DESIRES TO PROVIDE
CERTAIN SERVICES TO CUSTOMER AT ITS TERMINAL, AND CUSTOMER DESIRES TO UTILIZE
SUCH FACILITIES TO RECEIVE SERVICES, ALL AS SET FORTH BELOW. ACCORDINGLY, THE
PARTIES AGREE AS FOLLOWS:

1.   AGREEMENT. Each person and party signing this Agreement represents that it
     has full power and authority to enter into and perform this Agreement, that
     the signing and delivery of this Agreement has been duly authorized by all
     necessary corporate action of such party, and that this Agreement
     constitutes the valid and binding obligation of such party. This Agreement
     will only be binding when signed below by both of the parties.

2.   DEFINITIONS. In addition to the definitions provided elsewhere in this
     Agreement, the following definitions will apply:

     "ADJUSTED TRANSPORTATION CAPACITY" means the actual amount of
     Transportation Capacity provided hereunder, calculated using a
     Transportation Capacity base rate of, for the first three (3) calendar
     months of this Agreement, 40,500 bbl per day and, for the remainder of the
     term of this Agreement, 54,000 bbl per day.

     "AFFILIATE" means any entity which directly or indirectly controls, is
     controlled by, or is under a common control with a party. The term
     "control" (including the terms "controlled by" and "under common control
     with") as used in the preceding sentence means the possession, directly or
     indirectly, of the power to direct or cause the direction of management and
     policies of an entity.

     "BARREL" or "BBL" means 42 U.S. Gallons.

     "BERTHING" means the actions performed by Williams necessary to effect a
     Delivery by Marine Vessel that occur during the time period beginning when
     the Marine Vessel ceases motion alongside any Terminal dock and ending when
     Product is first capable of passing the fixed dock flange.

     "BLEND" or "BLENDING" means the mixing together of Products with different
     specifications to achieve a resultant Product with certain desired
     specifications.

     "CATASTROPHIC EVENT" shall mean the reduction of Transportation Capacity to
     25,000 bbls per day or less for more than thirty (30) days.

     "CONTRACT YEAR" means a twelve-month period beginning on the effective date
     of this Agreement and each subsequent twelve-month period beginning on the
     anniversary date of this Agreement during the term of this Agreement.

     "DELIVERY" or "DELIVERIES" means the transfer of Product from a Marine
     Vessel, truck or pipeline into the Terminal.

     "GALLON" means a volume of 231 cubic inches of Product measured at a
     temperature of 60 degrees Fahrenheit.

     "LAW" means any and all laws, regulations, rules, ordinances, codes, orders
     and decrees affecting this Agreement of any local, state, federal
     governmental authority having jurisdiction.

     "LOSS ALLOWANCE" means that amount of Product as set forth in Section 27.

     "MARINE VESSEL" means any type of barge, tug or other waterborne craft.

     "NEW WASTE" means any amount of Waste a) present in the tanks at the
     Terminal in excess of Pre-Existing Waste, or b) in any tank after it shall
     have been previously cleaned during the term of this Agreement.

     "PIPELINE SPECIFICATIONS" means the specifications for Product of Ship
     Shoal Pipeline, including but not limited to sulphur content and API
     gravity.

     "PRE-EXISTING WASTE" means the amount of Waste present in the tanks at the
     Terminal as measured by Williams and Customer within thirty (30) days of
     the execution of this Agreement, set forth in Exhibit "B".

     "PRODUCT" means crude oil and condensate.

     "PROPERTY" means that parcel of land specifically described in Exhibit "A".

     "RECEIPT" or "RECEIVE" means the transfer of Product out of the Terminal
     into truck, pipeline, or another terminal.


                                       1
<PAGE>


     "SERVICES" means those services described in Section 3 of this Agreement,
     the use of any other facilities and any other services necessary to meet
     Williams' obligations hereunder.

     "SERVICES FEES" means the rates set forth in Section 8, below.

     "SERVICES OPTION" means the first right of refusal granted hereunder to
     Customer to use any Surplus Transportation Capacity.

     "SERVICES OPTION FEES" means the rates set forth in Section 9, below.

     "SHIP SHOAL PIPELINE" shall mean Ship Shoal Pipeline Company or its
     successor.

     "STORAGE CAPACITY" means the physical volume in which Product can be held
     within the tanks at the Terminal, which tanks shall include the two (2)
     tanks of 8,000 bbl nominal capacity and the one (1) tank of 30,000 bbl
     nominal capacity currently at the Terminal.

     "SURPLUS TRANSPORTATION CAPACITY" means any amount of daily Transportation
     Capacity in excess of 60,000 bbl per day that may exist at any time at the
     Terminal or on the Property.

     "TERMINAL" means the Williams crude oil terminal located adjacent to Bayou
     Black in Terrebonne Parish, Louisiana, including tanks, pipelines, docks,
     other facilities comprising it and any other facilities that Williams shall
     deem necessary to fulfill its obligations hereunder.

     "TRANSPORT" or "TRANSPORTATION" means the physical movement of Product from
     the Delivery point to the Receipt point, including any actions required to
     be performed by Williams necessary to meet Customer's Blending
     requirements.

     "TRANSPORTATION CAPACITY" means that rate at which Williams is able to
     Transport through the Terminal as more specifically set forth in Section 3
     of this Agreement.

     "VACATING" means the actions performed by Williams necessary to undock a
     Marine Vessel that occur during the time period beginning when Product
     ceases passing the fixed dock pipeline flange and ending when the Marine
     Vessel is capable of leaving the dock.

     "WASTE" means any tank bottom, tank heel, water, sludge, sediment,
     particulate, or other residual matter present in the tanks at any time at
     the Terminal.

3.   SERVICES PROVIDED BY WILLIAMS. Williams agrees to provide the Services
     described below at its Terminal. Williams agrees to provide the amount of
     such Services as set forth in this Section 3, twenty-four (24) hours a day,
     seven (7) days a week, 365 days per year, except where indicated otherwise
     in this Agreement. Williams shall provide Customer with prior notice of any
     planned Service capacity reduction as soon as possible, but in no case less
     than 48 hours prior notice. For an unplanned Service capacity reduction,
     Williams shall provide Customer with notice as soon as reasonably possible,
     but in any event within 24 hours of such outage.

          A.   DELIVERIES: Williams shall receive all Customer Deliveries
               subject only to the limitations of the facilities and equipment
               within the Terminal, except that the combined time for Williams
               to Berth and Vacate any Marine Vessel shall not exceed two (2)
               hours. In the event that any time required for the measurement of
               Product quality by Customer or its inspector, such time will be
               excluded from the calculation of time required for Williams to
               Berth and Vacate any Marine Vessel.

          B.   STORAGE: Williams shall provide Customer Product storage capacity
               at the full amount of Williams' Storage Capacity at any time. At
               the time this Agreement is executed the amount of Storage
               Capacity to be provided Customer by Williams at any time shall be
               no less than 46,000 bbl.

          C.   BLENDING: Williams shall Blend Product for the benefit of
               Customer in accordance with Customer's instructions, which
               Williams may require to be in writing, and which are subject to
               change at any time. At the time of this Agreement Williams shall
               have the capability of Blending Customer's Product at the rate of
               no less than 1,000 bbl per hour of sour crude with no less than
               1,500 bbl per hour of sweet crude. Williams' responsibilities set
               forth in this Section 3 are qualified by Customer having provided
               adequate volumes of Product Blend stocks to Williams.

          D.   TRANSPORTATION: Williams agrees to Transport Product from the
               Terminal into the Ship Shoal Pipeline according to the schedule
               provided by Customer. For the first three (3) calendar months of
               this Agreement, Williams shall provide Transportation Capacity at
               the rate of no less than 45,000 bbl per day. For the remainder of
               the term of this Agreement, Williams shall provide Transportation
               Capacity at the rate of no less than 60,000 bbl per day.
               Williams' responsibilities set forth in this Section 4 are
               qualified by Customer having scheduled Deliveries and Receipts as
               may be necessary to accommodate Customer's Transportation
               instructions. Any penalties or disruptions on the Ship Shoal
               Pipeline related to Product quality shall be the responsibility
               of the party at fault.

4.   WILLIAMS' SERVICE COMMITMENT. Williams shall meet all Service performance
     standards set forth in Section 3, above. In the event the Terminal
     experiences Service capacity reduction associated with any of the
     facilities set forth below, the duration of Service capacity reduction of
     each facility experiencing a reduction shall be measured to the nearest
     quarter hour, sufficiently documented and presented to Customer for
     approval monthly as set forth in Section 17. For the first three (3)
     calendar months of this Agreement, all such time measurements shall be
     converted to a Transportation Capacity reduction according to the standard
     rates set forth in Section 4(a), below and in accordance with the
     calculation rules set forth in Subsection 4(c), below. For the remaining
     term, the standard rates set forth in Section 4(b), below and the
     calculation rules set forth in Section 4(c), below, shall be used.


                                       2
<PAGE>
          a. STANDARD RATES FOR THE FIRST THREE (3) CALENDAR MONTHS:

               1.   Tank 8000: 307 bbl per hour
               2.   Tank 8001: 307 bbl per hour
               3.   Tank 8002: 1,074 bbl per hour
               4.   Main Pump: 1,688 bbl per hour
               5.   8" Pipeline: 1,688 bbl per hour
               6.   Large Dock: 844 bbl per hour
               7.   Small Dock: 844 bbl per hour
               8.   Berthing and Vacating - Large Dock: 844 bbl per hour
               9.   Berthing and Vacating - Small Dock: 844 bbl per hour
               10.  Ship Shoal Pipeline: 1,688 bbl per hour

          b. STANDARD RATES FOR THE REMAINING TERM:

                    1.   Tank 8000: 409 bbl per hour
                    2.   Tank 8001: 409 bbl per hour
                    3.   Tank 8002: 1,432 bbl per hour
                    4.   Main Pump: 2,250 bbl per hour
                    5.   8" Pipeline: 1,688 bbl per hour
                    6.   6" Pipeline: 562 bbl per hour
                    7.   Large Dock: 1,125 bbl per hour
                    8.   Small Dock: 1,125 bbl per hour
                    9.   Berthing and Vacating - Large Dock: 1,125 bbl per hour
                    10.  Berthing and Vacating - Small Dock: 1,125 bbl per hour
                    11.  Ship Shoal Pipeline: 2,250 bbl per hour

          c. CALCULATION RULES:

               1.   In no case shall the standard rate used to calculate a
                    Transportation Capacity reduction exceed a) 1,688 bbl per
                    hour during the first three (3) calendar months, or b) 2,250
                    bbl per hour for the remaining term.
               2.   In the event that two or more of the facilities set forth
                    above are experiencing Service capacity reductions at the
                    same time the highest standard rate of such facilities shall
                    be used to calculate a Transportation Capacity reduction,
                    except as set forth in Calculation Rule 3.
               3.   Notwithstanding anything to the contrary contained in this
                    Section 4, if a) both the Large Dock and the Small Dock are
                    unable to receive Marine Vessels during the same period of
                    time, b) both the 8" pipeline and the 6" pipeline (after the
                    first three (3) calendar months) are unable to move Product
                    during the same period of time, c) two Marine Vessels are
                    experiencing a Transportation Capacity reduction while
                    Berthing and Vacating, or d) two or more tanks are
                    experiencing a Transportation Capacity reduction during the
                    same period of time, then the sum of the standard rates for
                    such facilities shall be used to calculate a Transportation
                    Capacity reduction.
               4.   Should Williams exceed two (2) hours to Berth and Vacate a
                    Marine Vessel then the Transportation Capacity reduction
                    shall be calculated using the standard rate for Berthing and
                    Vacating set forth above and applied as a Transportation
                    Capacity reduction.
               5.   Should Williams Berth and Vacate a Marine Vessel in less
                    than one and a half (1.5) hours, then an off-set shall be
                    calculated using the standard rate for Berthing and Vacating
                    set forth above and applied against any Transportation
                    Capacity reductions set forth in this Section 4. Any such
                    Berthing and Vacating off-set shall be limited to no more
                    than 270,000 bbls in any six (6) month period.

     CONVERSION EXAMPLES:

     o    If the Storage capacity of Tank 8000 is reduced for three (3) hours,
          the amount of Transportation Capacity reduction shall be calculated as
          1,227 bbl (3 hours x 409 bbl per hour).

     o    If the Storage capacity of Tank 8000 was reduced for six (6) hours and
          the Large Dock was unable to receive Marine Vessels for three (3)
          hours during the same time period, the total amount of Transportation
          Capacity reduction would be 4,602 bbl calculated in the following
          manner:

              (a)  The Storage capacity of Tank 8000 is reduced for three (3)
                   hours alone, therefore, the amount of Transportation Capacity
                   reduction during this three (3) hour time period shall be
                   calculated as 1,227 bbl (3 hours x 409 bbl per hour).

              (b)  Because the Storage capacity of Tank 8000 and the ability of
                   the Large Dock to receive Marine Vessels were both reduced
                   during the same three (3) time period, the rate used to
                   calculate the Transportation Capacity reduction would be the
                   higher of the rates for the two (2) facilities, therefore,
                   the amount of Transportation Capacity reduction for this
                   three (3) hour period of time is 3,375 (3 hours x 1,125 bbl
                   per hour).

     o    If both the Large Dock and the Small Dock are unable to receive Marine
          Vessels during the same three (3) hour time period, the total amount
          of Transportation Capacity reduction would be 6,750 bbl (3 hours x
          2,250 bbl per hour).


                                       3
<PAGE>


         o        If Williams requires three (3) hours to Berth and Vacate a
                  Marine Vessel the total amount of Transportation Capacity
                  reduction would be 1,125 bbl (1 hour x 1,125 bbl per hour).

         o        If Williams should Berth and Vacate a Marine Vessel in one (1)
                  hour the total amount of Transportation Capacity offset shall
                  be 563 bbl (0.5 hours x 1,125).

5. TRUE UP. As set forth below, beginning with the month this Agreement is
executed, the parties shall make periodic adjustments to the payment set forth
in Section 8 below, based on the amount, if any, of Transportation Capacity
reductions which exceed the standard set forth in Section 6 below. After having
performed any such periodic true up and calculation of applicable liquidated
damages, the parties shall begin a new Transportation Capacity reduction
calculation the following period. The parties shall perform a true up at the end
of each six (6) calendar month period.

6. LIQUIDATED DAMAGES. At the time of first six (6) calendar month true-up
period, should the sum of all Transportation Capacity reduction amounts
(including all applicable off-sets) calculated during such period exceed 958,125
bbl, then Williams shall credit Customer for Services Fees payments at the rate
of $0.2386 per barrel for such Transportation Capacity reduction amount in
excess of 958,125 bbl. At the time of any subsequent six (6) calendar month
true-up, should the sum of all Transportation Capacity reduction amounts
(including all applicable off-sets) calculated during such period exceed
1,095,000 bbl, then Williams shall credit Customer for Services Fees payments at
the rate of $0.2045 per barrel for such Transportation Capacity reduction amount
in excess of 1,095,000 bbl. All such liquidated damages shall be subject to the
annual escalation set forth in Section 17. The credit provided by this Section
will be Williams' sole liability and Customer's sole remedy for Williams'
failure to meet the service performance standards specified in Sections 3 and 4
of this Agreement; however, this limitation shall not apply to loss of Product.

7. CUSTOMER RESPONSIBILITIES. Customer shall be responsible for nominating,
scheduling and effecting both Deliveries and Receipts. The parties expressly
recognize that the actual amount of Services provided during any time period is
determined in part by the timing and amounts of such Deliveries and Receipts.

8. SERVICES FEES. Customer shall pay $0.2386 per bbl of Adjusted Transportation
Capacity during the first six (6) calendar months, and $0.2045 per barrel of
Adjusted Transportation Capacity during the remaining term, subject to a maximum
payment of $4,031,583 in any one (1) year period, subject to the adjustments set
forth in Section 5, above, and in accordance with the payment terms set forth in
Section 17, including annual escalation.

9. SERVICES OPTION FEES. Williams shall not offer any Surplus Transportation
Capacity to any third party under any terms and conditions without first having
offered such Surplus Transportation Capacity to Customer under terms and
conditions no less favorable than those set forth herein. In addition to the
Services Fees set forth in Section 8 above, if at any time Williams should have
available and/or create Surplus Transportation Capacity, and Customer should
elect to Transport using some amount of such Surplus Transportation Capacity,
then for any barrels transported by Customer in using such Surplus
Transportation Capacity, Customer shall have the right to use any such Surplus
Transportation Capacity at rates not to exceed the Services Option Fees set
forth below, subject to the annual escalation set forth in Section 17.

        a.       60,001 bbl - 65,000 bbl:  $0.0200 per excess bbl.
        b.       65,001 bbl - 70,000 bbl:  $0.0300 per excess bbl.
        c.       70,001 bbl and greater:   $0.0500 per excess bbl.

10. TERMINAL OPERATIONS. Control and operation of the Terminal will rest
exclusively with Williams, which will comply with and provide all certifications
required by Law applicable to the ownership, control and operation of the
Terminal. Williams shall be an independent contractor with respect to the
performance of the Services, and Customer shall have no direction or control of
Williams or its employees, agents, or other representatives except in the
results to be obtained. Customer will have the right to make physical checks of
Product in Williams' custody and to observe the performance of the Services
provided hereunder. However, this right may not be exercised in a manner that
interferes with Williams' operation or control of the Terminal.

11. DELIVERIES TO AND RECEIPTS FROM THE TERMINAL. All Deliveries to Williams and
Receipts by the Customer will be at the Terminal by the Delivery and Receipt
means set forth in this Agreement. Additionally, Deliveries by Marine Vessel
will be made in accordance with the following:

     A. MARINE VESSEL SCHEDULING. Customer will be responsible for scheduling
deliveries of Product by Marine Vessel to the Terminal. Customer will
communicate with the Terminal to determine which dock is available prior to the
arrival of any Marine Vessel scheduled. Williams reserves the right, in its sole
discretion, to refuse to allow any Marine Vessel to dock at the Terminal to
protect the safety of the Terminal, its personnel, or the environment.

     B. VACATING BERTH. Williams may order any Marine Vessel chartered,
contracted or nominated by Customer to vacate its berth if such action is
required, in Williams' sole discretion, for the safe operation of the Terminal.

     C. POLLUTION, PREVENTION AND RESPONSIBILITY. Customer will insofar as it is
able under the terms of any applicable charter party Agreement require that
Marine Vessels chartered, contracted or nominated by Customer promptly and
diligently prevent, mitigate and remediate all pollution emanating from said
Marine Vessels. All Marine Vessels chartered, contracted or nominated by
Customer hereunder will have secured and carry a current U.S. Coast Guard
Certificate of Financial Responsibility (Water Pollution).

     D. LAYTIME AND DEMURRAGE. IN NO EVENT WILL WILLIAMS HAVE ANY LIABILITY TO
CUSTOMER FOR LAYTIME OR DEMURRAGE.


                                       4
<PAGE>


12. MEASUREMENT AND TESTING. Williams shall measure quantities of Deliveries and
Receipts using Terminal tank gauges. Customer shall the right to have an
independent inspector to observe and verify such quantity measurements. The cost
of an independent inspector shall be borne by Customer. In the absence of any
measurements by an independent inspector, the results of the tests and
measurements made by Williams will be conclusive and binding on Customer, except
in the event of fraud or manifest error.

Williams shall have the right to test the quality of the Product. Any tests for
quality will be made in accordance with established ASTM standards and methods,
except to the extent such standards and methods conflict with applicable
governmental standards and methods. In the event of such conflict, governmental
standards and methods will control. Customer shall have the right to verify any
tests for quality conducted by Williams. Such verification shall be performed by
a mutually acceptable independent inspector. In the event of a dispute between
Williams and Customer regarding the quality of Product, the party deemed to be
in error shall pay for the cost of the inspector, including any laboratory
costs. In the absence of any tests by an independent inspector, the results of
the tests and measurements made by Williams will be conclusive and binding on
Customer, except in the event of fraud or manifest error.

Williams' obligation to make any delivery of Product to Customer will be
satisfied by delivering the volume of Product initially Delivered by Customer to
Terminal less the Loss Allowance set forth in this Agreement. Tank heel volume
will be put in place by Customer upon initial Delivery and be made available to
Customer within thirty (30) days of termination of this Agreement. In addition,
Customer will retain sufficient Product in the Terminal, in Williams' reasonable
opinion, to maintain minimum levels in Storage Capacity and pipelines, taking
into account the needs of pump suction and any floating roof tanks utilized.

13. QUALITY. Williams shall have the right to reject Delivery or conditionally
accept Delivery of any Product if Williams shall reasonably determine that such
Product contains chemicals or contaminants that may harm the Terminal. If any
product tendered for Delivery to the Terminal by Customer fails to meet this
specification, Williams may, at Williams' option, (a) reject the Product and
refuse to take Delivery; or (b) take Delivery of the Product and store it until
such time as Customer can remove the Product from the Terminal within a
reasonable period of time; or (c) take Delivery of the Product and store it
until such time as Williams can remove the Product from the Terminal at
Customer's cost.

14. PRODUCT RESPONSIBILITY. Title to Product will not pass to Williams. Williams
shall at all times use reasonable care and diligence to preserve and protect
Customer's Product from contamination, damage or loss while such Product is in
the Terminal. Williams shall not be responsible for any type of loss or damage
(including contamination) to Customer's Product caused by events beyond
Williams' control. For Deliveries to the Terminal, Customer will be responsible
for Product until it enters Williams' fixed dock flange, pipeline receiving
flange, or receiving hose, as the case may be. For Receipts from the Terminal,
Customer will be responsible for Product when it leaves Williams' fixed dock
flange, pipeline Receipt flange, or Receipt hose, as the case may be. In the
event Williams is deemed responsible for loss or damage to Product under this
Section 14, Williams shall be liable for damage or loss of Product under the
pricing formula as set forth in Section 27. If any Product is sold, exchanged,
or otherwise not owned by Customer while at the Terminal, Customer will
nevertheless be deemed the owner thereof for purposes of this Agreement.
Customer will continue to be responsible for all charges, taxes, terms and
conditions of this Agreement as if such Product were owned by Customer.

15. PRODUCT INFORMATION. Customer will sign in its name, pay for and furnish to
Williams at the Terminal all information, documents, labels, placards,
containers and other materials and data required under Law, together with
written instructions as to their use and disposition, except to the extent that
Williams as a terminal operator is obligated by Law to provide such information.
At Williams' request, Customer will provide Williams with a material safety data
sheet for each Product prior to Delivery of that Product to the Terminal.
Customer acknowledges that Williams may have an obligation under Law to disclose
information regarding Product to governmental authorities, parties handling the
Product, parties exposed to the Product, and to the general public, and Customer
promptly will provide Williams with any information required by Law for such
disclosures. Customer will prepare, file and maintain copies of all reports
required by Law to be filed with any federal, state or local governmental agency
concerning Delivery, Storage and Receipt of its Product, except to the extent
that Williams as a terminal operator is obligated by Law to prepare such
reports, and Customer promptly will transmit any such reports to Williams.

16. WASTE MEASUREMENT AND REMOVAL. Within thirty (30) days of the execution of
this Agreement, Williams and Customer shall hire an independent inspector to
measure the amount of Pre-Existing Waste. Williams and Customer will each be
responsible for the payment of 50% of the cost of measuring Pre-Existing Waste.
Results of the measurement of Pre-Existing Waste will be attached to this
Agreement as Exhibit "B". Williams may, from time to time at its reasonable
discretion or as required by Law, determine that it is necessary to remove Waste
and clean the tanks at the Terminal. Within fifteen (15) days of receiving
Williams notice, Williams and Customer shall hire an independent inspector to
measure the amount of Waste in the tanks at that time. Williams and Customer
will each be responsible for the payment of 50% of the cost of measuring the
Waste. The cost cleaning tanks will be borne by Williams. Williams will be
responsible for the cost of disposal of Pre-Existing Waste. Williams and
Customer will each be responsible for the payment of 50% of the cost of
measuring New Waste. Customer will be responsible for the cost of disposal of
New Waste.

17. INVOICING AND PAYMENT. Williams will invoice Customer monthly, in arrears,
for Services Fees or Service Option Fees (less adjustments for Loss Allowance
reimbursement and Transportation Capacity reductions as applicable) owed by
Customer to Williams under this Agreement. Such invoice shall be supported by an
statement that Williams shall also provide Customer monthly reporting in barrels
the beginning amount of Product at the Terminal, itemized detail of each
Delivery and Receipt, the ending amount of Product at the Terminal, the total
amount of product Transported during the month, the amount of Loss Allowance
generated during the month, the details of any Services Option Fees and all
applicable Transportation reduction calculation details. Customer will pay the
amount of each invoice by ACH credit less any amounts in dispute. Disputes about
the amount of an invoice will be resolved as set forth in Section 32. Customer
will be assessed a late charge of one and one-half percent (1.5%) interest per
month (or the highest rate permitted by Law, whichever is less) for any invoice
not paid within thirty (30) days of the date of the invoice, except for amounts
which are in dispute. Payments will be made in accordance with the instructions
provided by Williams from time to time. All charges under this Agreement are
subject to escalation at the rate of one percent (1%) per year. Escalation will
commence on the first anniversary of this Agreement. Williams' acceptance of
payment for any Service performed after the expiration or termination of this
Agreement will not be deemed a renewal of this Agreement.


                                       5
<PAGE>


18. AUDIT. Williams agrees to retain its books and records related to the
charges to Customer for Services provided under this Agreement for a period of
two (2) years from the date the Services are rendered. Customer may request to
audit these books and records at Williams' property during normal Business
Hours. Any such audit will be at Customer's expense; however, should
discrepancies be discovered as a result of Customer's independently commissioned
audit, Williams shall be responsible for any and all costs associated with such
audit. Customer's payment obligations will survive the expiration or termination
of this Agreement.

19. LIABILITIES. WILLIAMS WILL INDEMNIFY, DEFEND, AND HOLD HARMLESS CUSTOMER ITS
PARENTS AND AFFILIATES, AND ITS AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, AND OTHER REPRESENTATIVES FROM AND AGAINST ANY CLAIMS,
ACTIONS, JUDGMENTS, LIABILITIES, LOSSES, COSTS, DAMAGES, FINES, PENALTIES AND
EXPENSES TO THE EXTENT ARISING FROM: (A) THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
WILLIAMS, ITS EMPLOYEES, AGENTS, CONTRACTORS, OR OTHER REPRESENTATIVES IN THE
PERFORMANCE OF THIS AGREEMENT; OR (B) THE FAILURE OF WILLIAMS TO COMPLY WITH THE
TERMS AND CONDITIONS OF THIS AGREEMENT. CUSTOMER WILL INDEMNIFY, DEFEND, AND
HOLD HARMLESS WILLIAMS ITS PARENTS AND AFFILIATES, AND ITS AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND OTHER REPRESENTATIVES FROM AND
AGAINST ANY CLAIMS, ACTIONS, JUDGMENTS, LIABILITIES, LOSSES, COSTS, DAMAGES,
FINES, PENALTIES AND EXPENSES TO THE EXTENT ARISING FROM: (A) THE NEGLIGENCE OR
WILLFUL MISCONDUCT OF CUSTOMER, ITS EMPLOYEES, AGENTS, CONTRACTORS (INCLUDING:
THE OWNERS, OPERATORS, AND VOYAGE CHARTERS OF MARINE VESSELS; AND THE OWNERS AND
OPERATORS OF TRUCKS), OR OTHER REPRESENTATIVES IN THE PERFORMANCE OF THIS
AGREEMENT; OR (B) THE FAILURE OF CUSTOMER TO COMPLY WITH THE TERMS AND
CONDITIONS OF THIS AGREEMENT. WITHOUT LIMITATION OF THIRD PARTY CLAIMS, NEITHER
PARTY WILL HAVE ANY LIABILITY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR
SPECIAL LOSS, DAMAGE OR COST (INCLUDING, WITHOUT LIMITATION, LOST BUSINESS
OPPORTUNITY OR LOST PROFIT), HOWSOEVER AND BY WHOMSOEVER CAUSED, EVEN IF THE
POSSIBILITY OF SUCH LOSS, DAMAGE OR COST WAS FORESEEABLE. The indemnities
expressed in this Agreement will survive the expiration, termination, or
suspension of this Agreement.

20. TAXES AND OTHER CHARGES. Customer will pay all taxes and assessments, now
existing or hereafter created, that may be assessed by any governmental
authority against any Product (including Waste), against the property of
Customer, or against Williams (except for income, franchise and real estate
taxes assessed against the Terminal) with respect to the receiving, storing,
handling, shipping or disposing of any Product, Waste or property of Customer,
including any value added tax, sales tax, excise tax, inventory tax, spill tax,
pollution control tax, emission control tax or similar tax assessment. If a
change in Law requires Williams to incur any additional expense in order to
continue to receive, store, handle, ship or dispose of any Product, Waste, or
property of Customer, Customer will pay the cost of such expenses, including any
engineering, construction, and operating expenses.

21. FORCE MAJEURE. Notwithstanding any other provision of this Agreement to the
contrary, all circumstances causing either party's non-performance under this
Agreement and the remedies therefore have been adequately addressed in this
Agreement, therefore, there shall be no excuse for non-performance based on
force majeure.

22. DEFAULT. Either party will be in default under this Agreement if it: (a)
breaches any material provision of this Agreement; (b) makes an assignment for
the benefit of creditors or consents to or acquiesces in the appointment of a
receiver, liquidator, fiscal agent, or trustee; or (c) becomes insolvent or
enters into a voluntary or involuntary bankruptcy or receivership. In the event
of any default, the other party will give the defaulting party notice of the
default and a thirty (30) day opportunity to cure. If the defaulting party fails
to cure the default within the cure period, the other party may terminate this
Agreement.

23. CLAIMS. Each party will immediately give notice to the other party in
writing of any claim or dispute hereunder, and include as part of such notice
full and complete details, specifics and backup documentation pertaining to it.
In no event will one party be liable to the other party unless such a written
notice together with all supporting documentation available is delivered within
sixty (60) days after the facts upon which the claim or dispute is based first
became known, or reasonably should have first become known, to espousing such
claim or dispute.

24. COMMISSIONS AND GIFTS. No director, officer, employee, agent, or other
representative of either party will give or receive any commission, fee, rebate,
gift or entertainment of significant value or cost in connection with this
Agreement. Further, neither party will give any commission, fee, rebate, gift or
entertainment of significant value or cost to any government official or
employee in connection with this Agreement.

25. CONFIDENTIALITY. The parties understand and agree that the terms and
conditions of this Agreement, all documents referred to herein and
communications between the parties regarding this Agreement (collectively
"Confidential Information") are confidential as between Williams and Customer
and will not, without the other party's prior written consent, be disclosed by a
party to a third party, other than a parties' representatives or agents who have
a need to know. In the event that either party is requested or becomes legally
compelled (by oral questions, interrogatories, request for information or
documents, subpoena, civil investigative demand or similar process) to disclose
any Confidential Information, it will give the other party prompt notice thereof
so that a protective order or other appropriate remedy may be sought and/or
waiver of compliance with the provisions of this Agreement granted. The party
requesting a protective order will bear all costs related thereto. In the event
that such protective order or other remedy is not obtained, the party who has
been requested or legally compelled to disclose Confidential Information agrees
that it will furnish only that portion of the Confidential Information which is
legally required and will exercise its reasonable efforts to obtain reliable
assurance that confidential treatment will be accorded to the Confidential
Information which is disclosed in such manner.

26. INSURANCE. The rates quoted herein do not include any insurance on the
Product covered hereunder while it is the possession of Williams, it being
clearly understood and agreed that such property insurance, if any be desired by
Customer, will be carried by Customer at its own expense. If Customer does carry
any insurance on the property, Customer's insurance carrier will endorse the
policies to waive all rights of subrogation against Williams and Customer will
provide Williams with evidence of such waiver of subrogation, either in the form
of the endorsement or a certificate of insurance. Both parties will obtain and
maintain in full force and effect commercial general liability coverage which
will include, but not be limited to, bodily injury, property damage, blanket
contractual liability and independent contractor liability, sudden and
accidental pollution and explosion, collapse and underground


                                       6
<PAGE>


coverage with limits of at least $2MM per occurrence and with insurance
companies reasonably satisfactory to the other party as respects all duties and
obligations pursuant to this Agreement. Each party will also maintain in full
force and effect workers' compensation insurance complying with the laws of the
state or states having jurisdiction over each employee, whether or not Customer
is required by such laws to maintain such insurance, and employer's liability
coverage with limits of at least $1MM each accident, $1MM disease each employee
and $1MM disease policy limit. For any work performed offshore or on navigable
waterways, this insurance will be endorsed to provide full Maritime liability
coverage, including Longshoreman's and Harbor Worker's Act, Outer Continental
Shelf Land Act, Jones Act, Death on High Seas Act and In Rem. Owners and/or
charters of Marine Vessels or barges will obtain and maintain in full force and
effect hull and machinery insurance, including collision and tower's liability,
equal to the full value of the Marine Vessel. Protection and indemnity
insurance, including coverage for chartered vessels, members of crew, In Rem,
contractual liability, excess collision, and tower's liability on Ocean P&I
Clause SP-23 (revised January 1956) Form, or equivalent with a combined single
limit of $5,000,000 or that required by law, whichever is greater. All policies
carried by each party will require their carriers to endorse the policies to
waive subrogation rights in favor of the other party and, except for workers'
compensation. To the extent of the indemnity obligations specified in this
Agreement, each party will provide to the other party certificates showing
evidence of such coverages as of the effective date of this Agreement. Each
party will maintain all such policies current. The mere purchase and existence
of insurance does not reduce or release either party from any liability incurred
and/or assumed within the scope of this Agreement. Customer will cause all
Marine Vessels, truck carriers and rail car carriers which are chartered,
contracted, or nominated hereunder by Customer to comply with Law and to carry
all liability and pollution insurance required by Law.

27. LOSS ALLOWANCE. For the first twelve (12) months, Williams will be allowed,
for actual losses incurred (as substantiated by Williams measurement records), a
Loss Allowance no greater than 0.5% by volume of the quantity of Product
Transported by Williams on any day during the term of this Agreement. For the
remaining term of the Agreement, the Loss Allowance for any month shall be 120%
of the average of the actual monthly loss amounts incurred over a twelve (12)
month period, including the current month (excluding any monthly loss amounts
greater than +/- one (1) standard deviation from the mean of the distribution of
such twelve (12) monthly actual loss amounts). Customer agrees that Williams
will not be liable for any such Loss Allowance. Williams shall reimburse
Customer for actual losses in excess of such Loss Allowance monthly at a price
equal to the monthly average of the PLATTS LLS posting at St. James for the
month in which such loss shall occur per the terms as set forth in Section 17.

28. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA WITHOUT REGARD TO THE CHOICE
OF LAW PRINCIPLES THEREOF.

29. ASSIGNMENT. Neither party will assign or transfer this Agreement in whole or
in part, or any of the rights or obligations contained herein (including the
right to the storage of Product), without the prior written consent of the other
party, which consent shall not be unreasonably withheld and any purported
assignment in violation of this provision will be void. Without limitation of
the foregoing, consent to assignment may be conditioned upon the acceptance by
the assignee of additional terms and conditions related to the creditworthiness
of the assignee. Consent to assignment by one party will not relieve the other
party from any of its duties or obligations under this Agreement, unless
otherwise specifically stated in the written consent. Notwithstanding the
foregoing, either party may assign this Agreement to an Affiliate without such
consent. Subject to the foregoing, this Agreement will bind and inure to the
benefit of the successors, assigns and transferees of the parties hereof.

30. NOTICES. Any notice by either party to the other will be deemed to have been
properly given if delivered personally, faxed with telephone and written
confirmation of receipt, or mailed to said party by certified or registered
mail, postage and charges prepaid, to the address set out below, unless and
until another address will have been specified in writing by said party.


<Table>
<S>                                                                     <C>
                  CUSTOMER:                                            WILLIAMS:
                  Address:          Williams Energy Marketing
                                    & Trading Company                  Address:         Williams Terminals Holdings, L.P.
                                    Attn: Cody Nicholson                                Attn: Bill Copeland
                                    P. O. Box 3448, MD WRC                              P.O. Box 3448, MD 720-A
                                    Tulsa, OK  74101-3448                               Tulsa, OK 74101
                  Telephone:        918-573-5307                       Telephone:       918-573-3424
                  Facsimile:        918-573-4686                       Facsimile:       918-573-6865
</Table>

30.  TERM AND TERMINATION. The term of this Agreement shall be for a period of
     nine (9) years from the date this Agreement is executed. If a Catastrophic
     Event shall occur, this Agreement shall be suspended immediately and the
     obligations of Williams to provide Services and Customer to provide payment
     under this Agreement shall be suspended. The term of this Agreement shall
     not be affected by any such suspension.

Within forty (40) days after the occurrence of a Catastrophic Event, Williams
shall propose a plan to fully restore Transportation Capacity to no less than
the maximum capacity in effect immediately prior to the Catastrophic Event,
unless Williams can demonstrate, and the parties mutually agree, that such a
plan is impossible or impractical. If the parties mutually agree within fifteen
(15) days that it is impossible or impractical for Williams to fully restore
Transportation Capacity this Agreement will terminate immediately. Any
disagreements as to Williams' ability to fully restore Transportation Capacity
within fifteen (15) days will be settled by the dispute resolution procedures
set forth in Section 32 of this Agreement.

The plan submitted by Williams shall include, but may not be limited to a) the
date certain that Williams shall fully restore Transportation Capacity to no
less than the maximum capacity in effect immediately prior to the Catastrophic
Event, b) a proposal to enable Customer to operate its business without any loss
of profit or other damage during the period in which the Terminal is operating
at reduced capacity, c) the amount of any remaining Transportation Capacity at
the Terminal, and d) any other applicable terms and conditions which Customer
may require to evaluate Williams' plan.

Customer shall evaluate Williams' plan in good faith to determine whether it
will indeed protect Customer from loss of profit or other damage to its business
while Transportation Capacity is being restored. Customer's evaluation shall
consider, but shall not be limited to a) any incremental costs incurred to
transact business at another terminal, b) any change in product market value
related to transacting business at another terminal and c) the


                                       7
<PAGE>


competitive impact related to conducting business at another terminal. The
parties shall have fifteen (15) days to negotiate an interim agreement based on
Williams' plan.

If the parties do not reach an interim agreement within such fifteen (15) days,
this Agreement shall terminate immediately; however, if either party believes
that the other party has not negotiated the interim agreement in good faith,
then that party may appeal to the Dispute Resolution procedures established in
Section 32 of this Agreement. If the parties mutually agree to and execute such
an interim agreement, the terms of such interim agreement shall prevail. Should
Williams not restore Transportation Capacity by the date agreed to in the
interim agreement, the interim agreement shall immediately terminate and
Customer shall, at that time, determine, in its sole discretion whether this
Agreement will continue in effect or contemporaneously terminate as well.
Alternatively, should Williams restore Transportation Capacity by the date
agreed to in the interim agreement, this Agreement shall immediately be
reinstated.

In any event, the term of this Agreement shall not be affected by any suspension
under this Section 31.

32. DISPUTE RESOLUTION. The parties shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by negotiation
between executives who have authority to settle the controversy and who are at a
higher level of management than the persons with direct responsibility for
administration of this contract. Any party may give the other party written
notice of any dispute not resolved in the normal course of business. Within
fifteen (15) days after delivery of the notice, the receiving party shall submit
to the other a written response. The notice and the response shall include (a) a
statement of each party's position and a summary of arguments supporting that
position, and (b) the name and title of the executive who will represent that
party and of any other person who will accompany the executive. Within thirty
(30) days after delivery of the disputing party's notice, the executives of both
parties shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to attempt to resolve the dispute. All
reasonable requests for information made by one party to the other will be
honored. If the matter has not been resolved by these persons within forty-five
(45) days of the disputing party's notice, the dispute shall be referred to more
senior executives of both parties who have authority to settle the dispute and
who shall likewise meet to attempt to resolve the dispute. If the dispute has
not been resolved by negotiation within forty-five (45) days of the disputing
party's notice, or if the parties failed to meet within twenty (20) days, the
parties shall endeavor to settle the dispute by mediation under the then current
CPR Mediation Procedure. Unless otherwise agreed, the parties will select a
mediator from the CPR Panels of Distinguished Neutrals. All negotiations
pursuant to this clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of applicable rules of evidence.

33. CONCLUDING PROVISIONS. This Agreement is made as an accommodation to
Customer, and in no event will Williams' services be deemed to be those of a
public utility or common carrier. If any action is taken or threatened by any
governmental authority to declare the Terminal, Williams or Customer a public
utility or common carrier, Williams may by written notice terminate this
Agreement on the effective date of such action. Williams will own all
improvements to the Terminal, including those for which Customer has made a
financial contribution. The word "including" does not limit the preceding words
or terms. If any provision of this Agreement is held to be unenforceable to any
extent, the remaining provisions will be enforced to the maximum extent allowed
by law. All section titles and headings in this Agreement are merely for
convenience, and will not limit in any way the interpretation of this Agreement.
No provisions of this Agreement will be construed against or interpreted to the
disadvantage of any party by reason of such party's having drafted such
provision. Except as otherwise provided herein, the remedies provided in this
Agreement are cumulative, not exclusive, and in addition to all other remedies
in either party's favor at law, in equity or otherwise. No waiver of any breach
by either party of any terms, conditions, or obligations will be deemed a waiver
of subsequent breaches of the same or other nature. This Agreement will not be
deemed to be for the benefit of any third party, or give any other party any
right to enforce its provisions and neither this Agreement nor the parties'
performance hereunder will be deemed to have created a joint venture or
partnership between the parties. This Agreement constitutes the entire Agreement
between the parties. There are no promises, terms, conditions, representations,
warranties, or obligations other than those contained herein. Except as
otherwise provided herein, no variation or modification hereof will be deemed
valid unless it is in writing and signed by both parties.

IN WITNESS WHEREOF the parties have by their duly authorized representatives
signed this Agreement.

<Table>
<S>                                                              <C>
        WILLIAMS ENERGY MARKETING                                WILLIAMS TERMINALS HOLDINGS L.P.
        & TRADING COMPANY                                        BY WILLIAMS NGL, LLC, ITS GENERAL PARTNER

        By:         /s/ Mike Selman                              By:            /s/ Jay A. Wiese
               ------------------------------------                    -----------------------------------
        Name:       Mike Selman                                  Name:          Jay A. Wiese
               ------------------------------------                    -----------------------------------
        Title:      VP Portfolio Management                      Title:         VP, Terminal Services
               ------------------------------------                    -----------------------------------
</Table>



                                       8
<PAGE>



                                    EXHIBIT A

                             DESCRIPTION OF PROPERTY
                           WILLIAMS CRUDE OIL TERMINAL

Commencing at a point having Louisiana State Plane Coordinates of X=2,104,634.70
and Y=368,062.82, said point being the Point of Beginning;
Thence, N67 degrees 29' 04"W a distance of 313.01 feet to a 3/4" G.I.P.;
Thence, N22 degrees 27' 56"E a distance of 577.43 feet to a 3/4" G.I.P.;
Thence, S48 degrees 32' 43"E a distance of 130.00 feet to a 3/4" G.I.P.;
Thence, N35 degrees 55' 00"W a distance of 179.75 feet to a 3/4" G.I.P.;
Thence, S49 degrees 09' 06"E a distance of 170.00 feet to a 3/4" G.I.P.;
Thence, S26 degrees 01' 56" W a distance of 66.80 feet to a point;
Thence, S26 degrees 04' 42" W a distance of 161.47 feet to a point;
Thence, S22 degrees 38' 15" W a distance of 208.00 feet to a point;
Thence, S21 degrees 43' 02" W a distance of 118.04 feet to a point;
Thence, S21 degrees 15' 52" W a distance of 102.76 feet to the Point of
Beginning containing 4.52 acres.

Commencing at a point having Louisiana State Plane Coordinates of X=2,104,674.20
and Y=368,045.53, said point being the Point of Beginning;
Thence, N 22 degrees 16' 06" E a distance of 91.89 feet to a point;
Thence, N 21 degrees 43' 16" E a distance of 117.87 feet to a point;
Thence, N 22 degrees 33' 29" E a distance of 90.25 feet to a point;
Thence, S 67 degrees 32' 50" E a distance of 10.60 feet to a point;
Thence, S 19 degrees 57' 46" W a distance of 124.51 feet to a point;
Thence, S 23 degrees 51' 27" W a distance of 175.67 feet to a point;
Thence, N 67 degrees 32' 50" W a distance of 10.23 feet to the Point of
Beginning containing 0.090 acres.

Commencing at a point having Louisiana State Plane Coordinates of X=2,104,915.10
and Y=368,644.73, said point being the Point of Beginning;
Thence, N 49 degrees 08' 52" W a distance of 206.35 feet to a 3/4" G.I.P.;
Thence, N 25 degrees 54' 11" E a distance of 475.81 feet to a 3/4" G.I.P.;
Thence along a curve to the right having a Delta of 10 degrees 30' 46", a Radius
of 3148.05 feet, an Arc Length of 577.61 feet, and a Chord Bearing and Distance
of N 32 degrees 32' 34" E - 576.80 feet to a set 1/2" G.I.P.;
Thence, N 36 degrees 48' 43" E a distance of 496.04 feet to a 3/4" G.I.P.;
Thence, along a curve to the left having a Delta of 21 degrees 30' 23", a Radius
of 365.22 feet, an Arc Length of 137.09 feet, and a Chord Bearing and Distance
of S 28 degrees 48' 30" W - 136.29 feet to a set 3/4" G.I.P.;
Thence, N 12 degrees 35' 03" E a distance of 180.11 feet to a 3/4" G.I.P.;
Thence, along a curve to the right having a Delta of 15 degrees 16' 53", a
Radius of 527.09 feet, an Arc Length of 140.58 feet, and a Chord Bearing and
Distance of N 23 degrees 04' 17" E - 140.16 feet to a set 3/4" G.I.P.;
Thence, N 38 degrees 49' 06" E a distance of 177.99 feet to a 3/4" G.I.P.;
Thence, S 60 degrees 09' 00" E a distance of 148.40 feet to a 3/4" G.I.P.;
Thence, S 49 degrees 19' 35" E a distance of 96.91 feet to a 3/4" G.I.P.;
Thence, along the curve to the left having a Delta of 25 degrees 00' 00", a
Radius of 297.92 feet, an Arc Length of 129.99 feet, and a Chord Bearing and
Distance of N 58 degrees 02' 46" E - 128.96 feet to a set 3/4" G.I.P.;
Thence, along a curve to the left having a Delta of 28 degrees 33' 55", a Radius
of 267.23 feet, an Arc Length of 133.23 feet, and a Chord Bearing and Distance
of N 28 degrees 45' 34" E - 131.85 feet to a set 3/4" G.I.P.;
Thence, S 12 degrees 41' 06" W a distance of 187.21 feet to a point;
Thence, along the curve to the right having a Delta of 21 degrees 09' 46", a
Radius of 550.36 feet, an Arc Length of 203.28 feet, and a Chord Bearing and
Distance of S 28 degrees 10' 03" W - 202.13 feet to a point;
Thence, S 36 degrees 49' 03" W a distance of 497.72 feet to a point;
Thence, S 34 degrees 54' 42" W a distance of 304.43 feet to a point;
Thence, S 29 degrees 40' 22" W a distance of 239.42 feet to a point;
Thence, S 26 degrees 15' 08" W a distance of 325.55 feet to the Point of
Beginning containing 10.3 acres.



                                       9

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(F)
<SEQUENCE>11
<FILENAME>d94597ex10-f.txt
<DESCRIPTION>FACILITIES SALES AGREEMENT
<TEXT>
<PAGE>
                                                                   EXHIBIT 10(f)

                            FACILITIES SALE AGREEMENT


                                 BY AND BETWEEN


                               TRANSMONTAIGNE INC.
                                    AS SELLER


                                       AND


                        WILLIAMS TERMINALS HOLDINGS, L.P.
                                    AS BUYER


                               DATED JUNE 30, 2001



                    ---------------------------------------


<PAGE>



                                      INDEX


<Table>
<S>               <C>                                                                <C>
SECTION  1.       DEFINITIONS
         1.1.     Specific Definitions................................................6
         1.2.     Other Terms........................................................11
         1.3.     Other Definitional Provisions......................................11

SECTION  2.       PURCHASE AND SALE OF ASSETS
         2.1.     Purchase and Sale of Assets........................................11
         2.2.     Retained Assets....................................................12
         2.3.     Title and Risk of Loss.............................................12

SECTION  3.       PURCHASE PRICE
         3.1.     Purchase Price.....................................................12

SECTION  4.       CERTAIN CONTRACTUAL OBLIGATIONS
         4.1.     Certain Contractual Obligations....................................13
         4.2.     Retained Liabilities...............................................13

SECTION  5.       REPRESENTATIONS AND WARRANTIES OF SELLER
         5.1.     Organization and Good Standing.....................................13
         5.2.     Authority; Authorization of Agreement..............................13
         5.3.     No Violation.......................................................14
         5.4.     Compliance with Laws; Taxes; Permits...............................14
         5.5.     Contracts and Rights-of-Way........................................15
         5.6.     Assets.............................................................15
         5.7.     Title to Assets....................................................15
         5.8.     Operation of Facilities............................................15
         5.9.     Environmental Compliance...........................................15
         5.10.    Books and Records..................................................16
         5.11.    Litigation.........................................................16
         5.12.    No Broker..........................................................16
         5.13.    Credit Facility Release............................................16
         5.14.    Governmental Approval..............................................16
         5.15.    Public Utility Holding Company Act.................................17
         5.16     Seller Not a Foreign Corporation...................................17
         5.17     Improvements and Personal Property.................................17
         5.18.    Additives, Dyes and Butanes........................................17
         5.19     No Other Representations and Warranties............................17

SECTION  6.       REPRESENTATIONS AND WARRANTIES OF BUYER
         6.1.     Organization and Good Standing.....................................17
         6.2.     Authority; Authorization of Agreement..............................18
</Table>


                                        2
<PAGE>

<Table>
<S>               <C>                                                               <C>
         6.3.     No Violation......................................................18
         6.4.     No Broker.........................................................18
         6.5.     Government Approval...............................................18
         6.6.     Public Utility....................................................18
         6.7.     Knowledgeable Investor............................................19
         6.8.     No Other Representations and Warranties...........................19

SECTION  7.       CONDUCT AND PRE-CLOSING COVENANTS OF THE PARTIES
         7.1.     Access and Information; Due Diligence.............................19
         7.2.     Continued Operation...............................................19
         7.3.     Title Insurance, Survey of and Title to Real Property.............20
         7.4.     Damage or Condemnation............................................21
         7.5.     Press Releases/Announcements......................................21
         7.6.     Environmental/Operations Audit....................................22
         7.7.     Contract Notices..................................................22
         7.8.     Consents..........................................................23
         7.9.     Completion of Due Diligence.......................................23
         7.10     Establishing Product Inventory....................................23
         7.11.    Employees.........................................................24

SECTION  8.       CERTAIN POST-CLOSING COVENANTS
         8.1.     Payment of Liabilities............................................25
         8.2.     Baseline Audit and Baseline Audit Report..........................25
         8.3.     Revenues and Remittance of Monies.................................26
         8.4.     Confidentiality...................................................26
         8.5.     Contingency Payments..............................................26
         8.6.     Use of Terminal Automation System.................................27
         8.7.     Audited Financials................................................27

SECTION  9.       CONDITIONS TO OBLIGATIONS OF BUYER AT CLOSING
         9.1.     Compliance; Accuracy of Representations...........................27
         9.2.     Buyer's Board Approval............................................27
         9.3.     Officers' Certificates............................................27
         9.4.     No Orders or Lawsuits.............................................28
         9.5.     Third Person Consents.............................................28
         9.6.     Absence of Certain Changes........................................28
         9.7.     Conveyance Documents..............................................28
         9.8.     Due Diligence.....................................................28
         9.9.     Title Insurance Policy............................................29
         9.10     Transition Services...............................................29
         9.11     Terminal Use and Access Agreement.................................29
         9.12     Letter of Credit..................................................29
         9.13     Butane Blending Software..........................................29
         9.14     TEPPCO Line Space Agreement.......................................29
</Table>


                                        3
<PAGE>

<Table>
<S>               <C>                                                               <C>
SECTION  10.      CONDITIONS TO OBLIGATIONS SELLER AT CLOSING
         10.1.    Compliance; Accuracy of Representations...........................29
         10.2.    Seller's Board Approval ..........................................30
         10.3.    Officers' Certificates............................................30
         10.4.    No Orders or Lawsuits.............................................30
         10.5.    Third Person Consents.............................................30
         10.6.    Purchase Price....................................................30
         10.7.    Exchange Agreement................................................30

SECTION  11.      CLOSING...........................................................30

SECTION  12.      TAX MATTERS
         12.1.    Taxes and Recording Fees..........................................31
         12.2.    Allocation of Property Taxes......................................31

SECTION  13.      INDEMNIFICATION
         13.1.    Environmental Indemnification.....................................31
         13.2.    Other Indemnification by Seller...................................32
         13.3.    Indemnification by Buyer..........................................32
         13.4.    Termination of Indemnification....................................32
         13.5.    Procedures Related to Indemnification.............................34
         13.6.    Other Claims......................................................35
         13.7.    Mitigation........................................................36
         13.8.    Tax Treatment.....................................................36
         13.9     Survival of Representations.......................................36
         13.10    Exclusive Remedy..................................................36

SECTION  14.      NOTICE OF DEFAULT AND TERMINATION
         14.1.    Notice of Default by Seller.......................................36
         14.2.    Notice of Default by Buyer........................................37
         14.3.    Breach of Representation or Warranty..............................37
         14.4.    Termination Prior to Closing......................................37
         14.5.    Effect of Termination.............................................37

SECTION  15.      GENERAL PROVISIONS
         15.1.    Further Assurances................................................37
         15.2.    Expenses..........................................................38
         15.3.    Notices...........................................................38
         15.4.    Governing Law.....................................................39
         15.5.    Entire Agreement..................................................39
         15.6.    No Assignment; Successors.........................................39
         15.7.    Amendments; Waiver................................................39
         15.8.    Convenient Reference..............................................39
</Table>


                                       4
<PAGE>


<Table>
<S>        <C>                                                                        <C>
           15.9.    Counterparts......................................................40
           15.10.   No Third Person Beneficiaries.....................................40
           15.11    Attorney Fees.....................................................40
           15.12    Limitation on Liability...........................................40


EXECUTION.............................................................................41

EXHIBITS

             Exhibit 1.1               Map of Facilities
             Exhibit 9.7               Forms of Deed, Bill of Sale, Assignment
                                       and Assumption of Contracts and
                                       Assignment and Assumption of Permits
             Exhibit 9.10              Form of Transition Services Agreement
             Exhibit 9.11              Form of Terminal Use and Access Agreement
             Exhibit 9.13              Form of Software License Agreement
             Exhibit 9.14              Form of TEPPCO Line Space Agreement
             Exhibit 13.1(b)           Form of Access and Indemnity Agreement

SCHEDULES

             Schedule 2.1(a)           Real Property and Rights-of-Way
             Schedule 2.1 (b) and (c)  Personal Property and Improvements
             Schedule 2.1(e)           Assigned Contracts
             Schedule 2.1(g)           Permits
             Schedule 5.4              Exceptions to Compliance with Laws
             Schedule 5.7              Permitted Encumbrances
             Schedule 5.8              Exceptions to Operation of Facilities
                                       According to Standards
             Schedule 5.9              Environmental Non-Compliance
             Schedule 5.11             Litigation
             Schedule 8.2(b)           Baseline Audit Report
</Table>



                                       5
<PAGE>

                            FACILITIES SALE AGREEMENT

         THIS FACILITIES SALE AGREEMENT dated June 30, 2001, is by and between
TRANSMONTAIGNE INC., a Delaware corporation, together with its wholly owned
subsidiary, TransMontaigne Terminaling Inc., an Arkansas corporation
(hereinafter referred to as "Seller") and WILLIAMS TERMINALS HOLDINGS, L.P., a
Delaware limited partnership (hereinafter referred to as "Buyer", with Seller
and Buyer being individually referred to as "Party" and collectively referred to
as the "Parties").

                                    RECITALS:

         A. Seller presently owns a 100% interest in and operates two petroleum
products storage terminals known as the Little Rock Terminal Complex, together
with certain butane storage and pipeline facilities associated therewith located
in North Little Rock, Arkansas.

         B. Seller desires to sell and transfer and Buyer desires to purchase
and acquire all rights, properties, and assets associated with the foregoing
described properties, including certain obligations as specified in this
Agreement, on the terms and conditions described herein;

         FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows:

SECTION 1. DEFINITIONS

         1.1. Specific Definitions. As used herein the following terms shall
have the meanings defined below:

              Additives and Dyes has the meaning set forth in Section 3.

              Affiliated Company means with respect to any individual or legal
business entity, any Person, which directly or indirectly controls, is
controlled by, or is under a common control with such individual or legal
business entity. The term "control" (including the terms "controlled by" and
"under common control with") as used in the preceding sentence means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of a Person.

              Agreement means this Facilities Sale Agreement, including the
Exhibits and Schedules attached hereto, as amended, modified and supplemented
from time to time.

              Assets has the meaning set forth in Section 2.1.

              Assigned Contracts means those Contracts listed in Schedule 2.1(e)
that are a part of the Assets as the same have been amended in accordance with
this Agreement prior to the Closing and are assignable by Seller.



                                       6
<PAGE>

              Baseline Audit Report has the meaning set forth in Section 8.2.

              Books and Records means physical and/or electronic copies of all
non-privileged and existing engineering, operating, accounting, local property
tax, legal (related to the title to the Assets or any matter reflected on any
exhibit or schedule attached to this Agreement), business, marketing, land and
other data, files, documents, instruments, notes, papers and books and records
relating to the Assets and Facilities (but not other corporate financial, tax
and legal files and records) in the custody or control of Seller, including
without limitation, journals, deeds, property records, title policies, drawings,
records, maps, charts, surveys, prints, customer lists, computer software and
files, source and retrieval programs (including related documentation), and
environmental operating records, studies, audits, plans and reports of spills or
leaks, whether or not prepared internally by Seller or by unaffiliated parties.

              Butane has the meaning set forth in Section 3.

              Butane Blending Software has the meaning set forth in Section
2.1(c).

              Buyer Indemnified Parties has the meaning set forth in Section
13.1.

              Claims means any demand, Proceeding, charge, loss, cost, expense
(including reasonable attorney's fees and expert fees and expenses), damage,
fine, penalty, interest, judgment, or liability of any nature whatsoever.

              Closing means the closing of the purchase and sale of the Assets
as contemplated by this Agreement.

              Closing Date means the date set for the Closing in accordance with
Section 11.

              Closing Year means the calendar year in which the Closing occurs.

              Code means the Internal Revenue Code of 1986, as amended.

              Contracts means any written agreement, contract, commitment, lease
or instrument, including all amendments, modifications and supplements thereto,
affecting the Assets.

              Conveyance Documents means all deeds, bills of sale, assignments
and other good and sufficient instruments of transfer, conveyance and
assignment, in such form and substance as Buyer may reasonably request, to
effect or evidence the sale, conveyance, assignment, transfer, and delivery of
the Assets to Buyer and to vest in Buyer title to the Assets in accordance with
this Agreement.

              Credit Facility Liens has the meaning set forth in Section 5.13.

              Dollar and $ means lawful currency of the United States of
America.



                                       7
<PAGE>

              Effective Date means 11:59 p.m., Central Daylight Time, June 30,
2001.

              Environmental Arbitrator has the meaning set forth in Section
13.1(c).

              Environmental Claims means Claims involving or relating to
Polluting Substances, Releases, environmental conditions, situations,
circumstances, events, or incidents on, at or concerning, originating at or
relating to the Facilities or the Assets, or arising out of acts or omissions
occurring in connection with the ownership or operation of any of the Facilities
or Assets and arising either (i) from or related to a violation of, or remedial
requirement under, any Environmental Laws or (ii) based upon any common law
cause of action, including, without limitation, nuisance, trespass, negligence,
strict liability or public trust doctrine, whether such Environmental Claim
arises before or after the Effective Date and whether arising on or off of the
Facilities, including, without limitation, all Claims in connection with (a)
bringing the Assets and Facilities into compliance with Environmental Laws and
(b) the investigation or remediation of Polluting Substances contamination at
the Facilities.

              Environmental Laws means all Laws relating to public health, or to
pollution or protection of the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, the Clean Air Act, as amended, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), the Toxic Substances Control Act ("TSCA"), the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Safe Drinking Water Act, as amended, the Hazardous Materials
Transportation Act, as amended, the Oil Pollution Act of 1990 ("OPA"), any
regulations or state laws or regulations implementing the foregoing federal
laws, and all other Laws or regulations relating to (a) emissions, discharges,
releases, or cleanup of pollutants, contaminants, chemicals, polychlorinated
biphenyls (PCB's), solid wastes, or toxic or hazardous substances or wastes
(collectively, "Polluting Substances"), (b) the generation, processing,
distribution, use, treatment, handling, storage, disposal or transportation of
Polluting Substances (c) the use, maintenance, and closure of any portion of the
Facilities, or (d) environmental conservation or protection. For purposes of the
definition of Environmental Laws, the following terms have the following
meanings: "hazardous substance" means those substances listed in 49 CFR
ss.172.101 and 40 CFR Part 302, petroleum and requested substances as defined in
Subtitle I to RCRA, and radiation; "release" has the meaning specified in
Section 101(22) of CERCLA; and "disposal" has the meaning specified in RCRA;
provided, however, that to the extent the laws of the state in which the
property is located establish a meaning for "hazardous substance," "release," or
"disposal" or comparable terms that is broader than that specified above, such
broader meaning shall apply.

              Facilities means the two petroleum storage terminals known as the
Little Rock Terminal Complex, situated at 3222 Central Airport Road, North
Little Rock, Arkansas 72117 ("North Terminal") and 2725 Central Airport Road,
North Little Rock, Arkansas 72117 ("South Terminal"), including (a) the two
petroleum product pipelines, butane pipeline, and a fiber optic service line
that connect the North Terminal and the South Terminal (b) all butane storage
facilities and equipment located on or adjacent to the North Terminal and (c)
two petroleum product pipelines



                                       8
<PAGE>

approximately sixteen inches (16") in diameter, one from the North Terminal and
one from the South Terminal, both of which connect to a delivery point with
TEPPCO, all as more fully depicted on the map attached hereto as Exhibit 1.1 as
operated by Seller on the date hereof, and identified in Schedule 2.1.

              Governmental Authority means any federal, state, local, foreign or
other governmental or administrative authority, agency, court or tribunal having
jurisdiction.

              Improvements has the meaning set forth in Section 2.1(b).

              Indemnified Party has the meaning set forth in Section 13.6(a).

              Indemnifying Party has the meaning set forth in Section 13.6(a).

              Inspection has the meaning set forth in Section 7.6.

              Inspection Period has the meaning set forth in Section 7.6.

              Law means all applicable local, state, federal and foreign laws
and rules, regulations, codes, and ordinances promulgated thereunder, judgments,
orders, consent orders, or decrees, excluding, however, any Environmental Laws.

              Lien means any lien, charge, mortgage, pledge, security interest,
right of first refusal, option, judgment, restrictive covenant or condition or
encumbrance in respect of or affecting the Assets, except the Credit Facility
Lien.

              Party and Parties has the meaning set forth in the preamble.

              Permit means any license, permit, franchise, authority, consent or
approval of a Governmental Authority applicable to the ownership or operation of
the Assets.

              Permitted Encumbrances means (a) the Liens described in Schedule
5.7, and (b) Liens for current Taxes which are not yet due and payable, or which
Seller is contesting in good faith and which are specifically described in
Schedule 5.7, including, without limitation, any easement, signage lease or
other similar burdens that encumber the Real Property.

              Person means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
government (or agency or political subdivision thereof).

              Personal Property has the meaning set forth in Section 2.1(c).

              Polluting Substances has the meaning set forth in the definition
of Environmental Laws.



                                       9
<PAGE>

              Prior Year means the calendar year immediately preceding the
Closing Year.

              Proceeding means any action, suit, claim, investigation, review or
other proceeding, at law or in equity, before any federal, state, municipal or
other governmental court, department, commission, board, bureau, agency or other
instrumentality or any arbitrator, board of arbitration or similar entity.

              Product means refined petroleum products, Additives and Dyes,
butane and blending materials.

              Product Inventory means the Products that are stored in the
Facilities.

              Purchase Price has the meaning set forth in Section 3.

              Real Property has the meaning set forth in Section 2.1(a).

              Release has the meaning set forth in the definition of
Environmental Law.

              Remedial Action has the meaning set forth in Section 13.1(b).

              Retained Environmental Claims means any Environmental Claim that
relates to (a) an environmental condition, situation, circumstance, event, or
incident identified in the Baseline Audit Report and any Environmental Claim
pertaining to Seller's transportation or disposal of Polluting Substances
off-site of the Assets and Facilities.

              Retained Liabilities has the meaning set forth in Section 4.2.

              Right-of-Way means any right-of-way, easement, access agreement,
lease, license, permit or prescriptive right that is a part of the Assets.

              Schedules means the exhibits, appendices and schedules to this
Agreement.

              Seller Indemnified Parties has the meaning set forth in Section
13.3.

              Tax means, as relating to any of the Assets, a federal, state or
local income tax, assessment, duty, fee, levy or other governmental charge,
together with and including without limitation, any and all interest, fines,
penalties, assessments and additions to tax resulting from, relating to, or
incurred in connection with any such tax or any contest or dispute thereof.

              Third Person means any Person other than Seller or Buyer, or
Affiliated Companies.

              Third Person Claim has the meaning set forth in Section 13.6(a).



                                       10
<PAGE>

              TPSI has the meaning set forth in Section 8.7

              TPSI Product means that portion of the Product Inventory located
in the Facilities or in transit to the Facilities that is owned by TPSI.

              Transition Services Agreement has the meaning set forth in Section
9.11.

         1.2. Other Terms. Other terms may be defined elsewhere in the text of
this Agreement and shall have the meaning indicated throughout this Agreement.

         1.3. Other Definitional Provisions.

              (a) 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.

              (b) The terms defined in the singular have a comparable meaning
when used in the plural, and vice versa.

              (c) Each and every exhibit or schedule to this Agreement is
included in it and attached for all purposes by the reference in this Agreement
to the specific exhibit or schedule.

              (d) Whenever the Parties have agreed that any approval or consent
will not be "unreasonably withheld", such phrase will also include the Parties
agreement that the approval or consent will not be unreasonably delayed or
conditioned.

              (e) Whenever a statement is qualified by the term "knowledge,"
"best knowledge" or similar term or phrase, it is intended to indicate actual
knowledge, or the possession of information, data or documents that would give
actual knowledge, on the part of the officers, directors of a Person or current
Facility management employees at a level of terminal manager or higher who,
after due inquiry, and in the normal scope of their employment would have such
actual knowledge.

SECTION 2. PURCHASE AND SALE OF ASSETS

         2.1. Purchase and Sale of Assets. At Closing, but effective as of the
Effective Date, Seller shall sell, transfer, assign, convey, set over and
deliver to Buyer, and Buyer shall purchase and acquire from Seller, all of the
properties, privileges, rights, interests and claims for interests, tangible and
intangible, of, relating primarily to, or used primarily in connection with any
portion of the Facilities, including, without limitation, the following (the
"Assets"):

              (a) Real Property. All those certain tracts or parcels of real
property wholly or partly owned in fee simple by Seller or its Affiliated
Companies upon which the Improvements are located and all Rights-of-Way, and
other rights and interests in and to real property and



                                       11
<PAGE>

appurtenances thereto relating to or used in connection with any portion of the
Facilities, all as more particularly described in Schedule 2.1(a) ("Real
Property");

              (b) Improvements. All of the buildings, structures, fixtures,
facilities and other improvements relating to or used in connection with any
portion of the Facilities, including, without limitation, aboveground bulk or
other storage tanks, aboveground and underground refined product and natural gas
liquids pipelines, loading racks, pipe-racks, docks, utility fixtures, sheds,
pads, parking areas, walkways, storage areas, and roadways, as more particularly
described on Schedule 2.1(b) and (c) ("Improvements");

              (c) Personal Property. All field vehicles and leases thereto,
computer equipment and such related third party computer programs, applications
and software systems that Seller has the right to transfer, spare parts and
materials inventory, machinery, equipment, pumps, piping, engines, compressors,
heaters, electronic instrumentation, valves, meters, tools, office furniture,
fire equipment and, parts, supplies and other moveable equipment and tangible
personal property relating to or used in connection with any portion of the
Facilities as more particularly described in Schedule 2.1(b) and (c) ("Personal
Property") but excluding Seller's proprietary butane blending operation program
and codes (source or object) and all related written explanations of the use of
such program ("Butane Blending Software");

              (d) Additives and Dyes. The Additives and Dyes;

              (e) Contract Rights. All Assigned Contracts, as more particularly
described in Schedule 2.1(e);

              (f) Books and Records. Copies of all Books and Records; and

              (g) Permits. All Permits relating to or used in connection with
any portion of the Facilities, as more particularly described on Schedule
2.1(g).

         2.2. Retained Assets. Except for the Assets, as described in Section
2.1, Seller shall, at Closing, retain all right, title, interest and obligation
to and with respect to all of its assets and liabilities.

         2.3. Title and Risk of Loss. Title and risk of loss with respect to the
Assets shall pass to Buyer at the Effective Date.

SECTION 3. PURCHASE PRICE

         The purchase price for all of the Assets and Facilities shall be
$29,000,000.00 (the "Purchase Price"). The Purchase Price will be adjusted as
follows: (a) It will be increased after Closing by an additional sum for
additives and dyes owned by Seller ("Additives and Dyes") based upon Seller's
cost, with quantities to be measured by Parties as of the Effective Date, (b) it
will be adjusted after Closing by an additional sum for butane owned by Seller
("Butane") based upon the "OPIS" Conway



                                       12
<PAGE>

low posted price for normal butane as of June 29, 2001, plus 7.8 cents per
gallon, and will be purchased by an Affiliated Company of Buyer, with quantities
of Butane to be measured by the Parties as of the Effective Date and (c) it will
be adjusted at and after Closing in accordance with Section 12 and the other
applicable provisions of this Agreement. Buyer shall arrange to have the
Purchase Price delivered to Seller On July 2, 2001 by wire transfer in
immediately available funds to an account previously designated by Seller.


SECTION 4. CERTAIN CONTRACTUAL OBLIGATIONS

         4.1. Certain Contractual Obligations. In connection with the sale of
the Assets hereunder, upon the Effective Date, Buyer shall perform and satisfy
the obligations arising under the Assigned Contracts, the Permits and the
Rights-of-Way on and after the Effective Date.

         4.2. Retained Liabilities. Except for the express assumption by Buyer
of those certain obligations relating to the Assets, as specified in Section
4.1, and arising on and after the Effective Date or as expressly set forth in
this Agreement with respect to Environmental Claims that are not Retained
Environmental Claims, Buyer shall not assume or be bound or obligated by, and
Seller hereby acknowledges the retention of, any and all duties,
responsibilities, obligations or liabilities, whether fixed, absolute, accrued,
known or unknown, contingent or otherwise, of Seller of any kind whatsoever,
whether or not related to the Assets, whether or not such duties,
responsibilities, obligations or liabilities are disclosed on any Schedules
attached hereto (the "Retained Liabilities" provided that the term "Retained
Liabilities" shall not include any Retained Environmental Claim the
indemnification for which is governed by Section 13). Nothing contained in the
Schedules hereto shall increase, decrease or modify in any way whatsoever
Buyer's obligations under Section 4.1, nor result in Buyer's becoming
responsible for any liabilities, duties and obligations of Seller.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER

         Seller represents and warrants to Buyer as follows:

         5.1. Organization and Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, having all necessary power and authority to carry on its respective
business as presently conducted and to own, lease, and operate all properties
and assets now owned, leased or operated by it qualified to do business as a
foreign corporation and in good standing in the State of Arkansas.

         5.2. Authority; Authorization of Agreement. Upon receipt of the
approval of its Board of Directors, which board has not yet reviewed this
Agreement or the transaction contemplated hereby, Seller will have all requisite
corporate power and authority to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and to perform all the terms and
conditions hereof to be performed by it. The execution and delivery of this
Agreement by Seller and the consummation of the transactions contemplated hereby
have been duly authorized and approved by all requisite corporate action on the
part of Seller. This Agreement has been duly executed and delivered by



                                       13
<PAGE>

Seller and constitutes the legal, valid and binding obligation of Seller,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency or other similar Laws relating to or affecting the
enforcement of creditor's rights generally and to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).

         5.3. No Violation. This Agreement and the execution and delivery hereof
by Seller does not, and the fulfillment and compliance with the terms and
conditions hereof, and the consummation of the transactions contemplated hereby
will not:

              (a)   violate or conflict with any provision of Seller's corporate
                    charter or other organizational or governance documents of
                    Seller;

              (b)   violate or conflict with any provision of any Law or
                    Environmental Law or any judicial, administrative or
                    arbitration order, award, judgment, writ, injunction or
                    decree applicable to or binding upon Seller or the Assets;

              (c)   conflict with or result in a breach of, constitute a default
                    under (whether with notice or lapse of time or both), or
                    accelerate or permit the acceleration of performance
                    required by, or require any consent or approval under any
                    instrument, contract or other agreement to which Seller is a
                    party or by which it is bound or to which any of its Assets
                    are subject ; or

              (d)   result in the creation of or imposition of any Lien upon any
                    of the Assets.

         5.4. Compliance with Laws; Taxes; Permits.

              (a) Except as set forth in Schedule 5.4, Seller is not in
violation of or in default under any Law, governmental determination, court or
other order, governmental certification requirement or other public limitation;
and

              (b) Except as set forth in Schedule 5.4, Seller has filed in a
timely manner all reports, returns and forms as may have been required under
applicable Laws for and paid all amounts for all required Taxes or similar
assessments (except amounts for Taxes being diligently contested in good faith
by appropriate procedures and disclosed in Schedule 5.4) including any interest,
penalties or additions attributable thereto shown as due on all such filings. No
Proceedings or other actions that are pending, or to Seller's knowledge, that
are threatened seek the assessment or collection of the additional Taxes of any
kind from Seller specifically relating to any portion of the Facilities or the
Assets, and no other examination by the Internal Revenue Service or any other
taxing authority affecting any portion of the Facilities or the Assets is now
pending. Taxes which Seller was required by Law to withhold or collect in
respect to the Facilities or the Assets have been withheld or collected and have
been paid over to the proper governmental authorities or are properly held by
Seller for such payment when due and payable.



                                       14
<PAGE>

              (c) Except as disclosed in Schedule 5.4, (i) Seller has all
Permits necessary for the operation of the Facilities and the Assets as
currently conducted, (ii) each such Permit is in full force and effect, and
(iii) is in compliance with all its obligations with respect thereto, and no
event has occurred which permits, or upon the giving of notice or the passage of
time or both would permit, the revocation or termination of any thereof.

         5.5. Contracts and Rights-of-Way. Seller is not in, nor has it received
written notice of, default under any Contract or Right-of-Way to which it is a
party, or by which it or its properties is bound. All Assigned Contracts and
Rights-of-Way represent valid, binding and enforceable agreements of the parties
thereto subject to applicable bankruptcy, insolvency, or other similar Laws
relating to or affecting the enforcement of creditors' rights generally and to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law). Seller has made available to Buyer true,
correct and complete copies of all Assigned Contracts and Rights-of-Way
affecting the Assets and Facilities, as currently operated.

         5.6. Assets. The Assets constitute all of the properties and assets
necessary for the operation of, relating to or used in connection with the
Facilities.

         5.7. Title to Assets. Seller has good, valid, and marketable title to
100% interest in the Assets, free and clear of all Liens, but subject to (i) all
easements, restrictions and encumbrances that are a matter of public record and
(ii) the Outdoor Advertising Leases in favor of Bestco Sign Company dated April
1, 1994, as described in Schedule 5.7. Seller warrants and will defend the
aforesaid title to the Assets to Buyer and its successors and assigns forever
against the lawful claims and demands of all persons claiming by, through or
under Seller, with the right to full substitution and subrogation of Buyer in
and to all covenants and warranties by others given or made in respect of all or
part of the Assets before the Effective Date, and to which Seller has succeeded.

         5.8. Operation of Facilities. Except as disclosed on Schedule 5.8, the
Facilities and Improvements, taken as a whole, have been maintained and operated
in accordance with Seller's normal operating standards and practices and are in
good operating condition, repair and maintenance, subject only to ordinary wear
and tear.

         5.9. Environmental Compliance.

              (a) Except as disclosed in Schedule 5.9, the Facilities and the
Assets are in compliance with applicable Environmental Laws.

              (b) Seller has furnished or made available to Buyer all Books and
Records relating to environmental liabilities and reasonably requested by Buyer
to be made available to it under Section 7.1.

              (c) Except as disclosed in Schedule 5.9, there are no past or
present or, to the best of Seller's knowledge, future events, conditions,
circumstances, activities, practices, incidents, actions or plans, which will
prevent continued substantial compliance with applicable Environmental Laws and
the terms and conditions of any Permits.



                                       15
<PAGE>

              (d) Except as set forth in Schedule 5.9, Seller has not received
any written notice from any Governmental Authority of any actual or potential
non-compliance with the terms and conditions of any Permits with respect to the
any portion of the Facilities or the Assets.

              (e) Except as set forth in Schedule 5.9, Seller has not received
any written notice of any civil, criminal or administrative Proceeding involving
the Facilities that arise under any applicable Environmental Laws.

         5.10. Books and Records. The Books and Records have been maintained in
accordance with good business practices and all financials relating to or
depicting the past and current operations of the Facilities have been prepared
in accordance with generally accepted accounting principles and fairly and
accurately present the financial condition of the Assets, except where
projections have been made, in which case the assumptions upon which the
projections have been based are noted therein.

         5.11. Litigation. Except as set forth in Schedule 5.11, there is no
pending, or to Seller's knowledge threatened, Proceeding involving Seller, any
of the Facilities or any of the Assets at law or in equity, by or before any
Governmental Authority or any arbitrator or mediator. Except as set forth in
Schedule 5.11, there are no orders, writs, judgments, stipulations, injunctions,
decrees, determinations, awards or other decisions of any Governmental
Authority, or any arbitrator or mediator, outstanding against Seller, any
portion of the Facilities or any of the Assets.

         5.12. No Broker. Seller has not retained or employed any broker,
finder, or similar agent, or otherwise taken any action in connection with the
negotiations relating to this Agreement and the transactions contemplated hereby
in a manner so as to give rise to any claims against any of the Parties for any
brokerage commission, finder's fee or other similar payment.

         5.13. Credit Facility Release. All of the Assets have previously been
pledged by Seller as security to Fleet National Bank N.A., as agent for Fleet
National Bank and other secured lenders pursuant to the Security Agreement dated
January 13, 2000 in connection with that certain Fourth Amended and Restated
Credit Agreement dated as of February 11, 2000, by and between Seller and Fleet
National Bank, N.A., as amended and that certain Amended and Restated Master
Shelf Agreement dated February 11, 2000 by and between Seller and Prudential
Insurance Company, as amended (collectively, the "Credit Facility Liens").
Except with respect to the necessity to obtain a release of the Credit Facility
lien upon the Assets before the Effective Date and taking such steps as are
required in Sections 7.8 and 7.9 to obtain consent to the assignment of Assigned
Contracts, no other Third Person consent, approvals, waiver or authorization of
any Third Person is required to be obtained in connection with the execution and
delivery of this Agreement by Seller, or the consummation by Seller of the
transactions contemplated hereby.

         5.14. Governmental Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any Governmental
Authority is required to be obtained or made in connection with the execution
and delivery of this Agreement by Seller or the consummation by Seller of the
transactions contemplated hereby.



                                       16
<PAGE>

         5.15. Public Utility Holding Company Act. Neither Seller nor any of its
Affiliated Companies is a "holding company", or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.

         5.16. Seller Not a Foreign Corporation. The Seller is not a "Foreign
Corporation" as that term is used in Section 1445 of the Code.

         5.17. Improvements and Personal Property. Seller has good and
marketable title to the Personal Property and the Improvements, and such
Improvements and Personal Property are free of Liens. Except as set forth in
this Agreement, the Improvements and Personal Property are being transferred "AS
IS" AND WITH ALL FAULTS AND SELLER MAKES NO WARRANTY WITH RESPECT TO THE
PHYSICAL CONDITION OF THE IMPROVEMENTS AND PERSONAL PROPERTY, OR TO THE
MERCHANTABILITY OF SUCH IMPROVEMENTS AND PERSONAL PROPERTY OR FITNESS OF SUCH
IMPROVEMENTS AND PERSONAL PROPERTY FOR ANY PARTICULAR PURPOSE.

         5.18. Additives, Dyes and Butane. Seller has good and marketable title
to the Additives, Dyes and Butanes, and such Additives, Dyes and Butanes are
free of Liens. The Additives, Dyes and Butanes meet all requirements of Laws and
Environmental Laws, including without limitation the regulations of the EPA
governing additives set forth in Part 80 of Title 40 of the Code of Federal
Regulations, as amended, if applicable.

         5.19. No Other Representations or Warranties. Except for the
representations and warranties of Seller in this Agreement and the certificates,
documents, instruments and writings delivered to Buyer by or on behalf of Seller
pursuant to this Agreement, neither Seller nor any other Person makes or shall
be deemed to have made any other representations or warranties on behalf of
Seller, express or implied, and Seller hereby disclaims any such representations
and warranties, whether by Seller, any of Seller's employees, agents or
representatives, or any other Person. EXCEPT AS SET FORTH IN THIS AGREEMENT, THE
ASSETS AND THE FACILITIES ARE SOLD TO BUYER "AS IS, WHERE IS" WITH ALL FAULTS.
EXCEPT AS SPECIFICALLY SET FORTH HEREIN, SELLER HEREBY EXPRESSLY DISCLAIMS AND
NEGATES TO BUYER AND ALL THIRD PERSONS ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, DESIGN, PERFORMANCE, CONDITION, CERTIFICATE,
MAINTENANCE, OR SPECIFICATION.

SECTION 6. REPRESENTATIONS AND WARRANTIES OF BUYER.

         Buyer represents and warrants to Seller as follows:

         6.1. Organization and Good Standing. Buyer is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with all necessary



                                       17
<PAGE>

power and authority to carry on its business as presently conducted and to own,
lease and operate all properties and assets now owned, leased and operated by
it.

         6.2. Authority; Authorization of Agreement. Upon receipt of the
approval of the Board of Directors of its general partner, which board has not
yet reviewed this Agreement or the transaction contemplated hereby, Buyer will
have all requisite power and authority to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and to perform all the terms and
conditions hereof to be performed by it. Subject to Buyer receiving approval
from the Board of Directors of its general partner, this Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid and binding
obligation of Buyer, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency or other similar Laws relating to
or affecting the enforcement of creditor's rights generally and to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).

         6.3. No Violation. This Agreement and the execution and delivery hereof
by Buyer do not, and the fulfillment and compliance with the terms and
conditions hereof, and the consummation of the transactions contemplated hereby
will not:

         (a)  violate or conflict with any provision of the charter or other
              organizational or governance documents of Buyer;

         (b)  violate or conflict with any provision of any Law or Environmental
              Law or any judicial, administrative or arbitration order, award,
              judgment, writ, injunction or decree applicable to or binding upon
              Buyer; or

         (c)  conflict with or result in a breach of, constitute a default under
              (whether with notice or lapse of time or both), or accelerate or
              permit the acceleration of performance required by, or require any
              consent or approval under any instrument, contract or other
              agreement to which Buyer is a party or by which it is bound or to
              which any of its properties is subject.

         6.4. No Broker. Buyer has not retained or employed any broker, finder,
or similar agent, or otherwise taken any action in connection with the
negotiations relating to this Agreement and the transactions contemplated hereby
in a manner so as to give rise to any claims against any of the Parties for any
brokerage commission, finder's fee or other similar payment.

         6.5. Governmental Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any Governmental
Authority is required to be obtained or made in connection with the execution
and delivery of this Agreement by Buyer or the consummation by Buyer of the
transaction contemplated hereby.

         6.6. Public Utility. Neither Buyer nor any of its Affiliated Companies
is a "holding company", or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935 and related rules and regulations.



                                       18
<PAGE>

         6.7. Knowledgeable Investor. Without limitation of the express
representations, warranties, covenants and agreements of Seller contained in
this Agreement, Buyer acknowledges that it is an experienced and knowledgeable
investor in terminaling, transportation, storage and petroleum exchange business
and the operation of petroleum product storage facilities and that in conducting
the Inspection under Section 7.6 and due diligence as described in Section 9.8
involving the Assets and Facilities, it is relying solely on its independent
investigation and audit of, and appraisal and judgment with respect to, the
Assets and Facilities and Buyer assumes full responsibility for any conclusions
or analysis relating to the Assets and Facilities and any decisions to proceed
with the purchase of the Assets and Facilities based upon such due diligence and
investigation.

         6.8. No Other Representations and Warranties. Except for the
representations and warranties of Buyer in this Agreement and the certificates,
documents, instruments and writings delivered to Seller by or on behalf of Buyer
pursuant to this Agreement, neither Buyer nor any other Person makes or shall be
deemed to have made any other representations or warranties on behalf of Buyer,
express or implied, and Buyer hereby disclaims any such representations or
warranties, whether by Buyer, any of Buyer's employees, agents or
representatives, or any other Person.

SECTION 7. PRE-CLOSING CONDUCT AND COVENANTS OF THE PARTIES

         7.1. Access and Information; Due Diligence. Subject to Section 7.6,
from and after the date hereof to and including the Closing Date, Seller shall,
upon prior written request, afford to the Buyer and its officers, employees,
agents and authorized representatives of Buyer access during normal business
hours, to the Facilities, the Assets and all Books and Records pertaining
thereto. Seller shall also make available to Buyer, upon prior written request,
personnel knowledgeable with respect thereto at any reasonable time, in order
that Buyer may make such factual, financial, accounting technical or legal due
diligence investigation which Buyer considers desirable, and the officers,
employees and representatives of Seller shall furnish Buyer with such Books and
Records as may be reasonably requested in order that Buyer may complete such due
diligence investigation of the Assets and Facilities to its reasonable
satisfaction.

         7.2. Continued Operation.

              (a) From and after the date hereof to and including the Effective
Date, Seller shall:

                  (1)      continue to operate and maintain the Facilities and
                           the Assets (A) in working order, condition, and
                           repair that are substantially the same as on the date
                           hereof (normal wear and tear excepted) and consistent
                           with Seller's past standards and practices, good
                           industry practices and (B) in such a manner so that
                           the representations and warranties of Seller
                           contained herein shall be true and correct as of the
                           Effective Date as if made on and as of the Effective
                           Date;



                                       19
<PAGE>

                  (2)      continue in effect all present insurance coverage on
                           the Facilities and the Assets;

                  (3)      cooperate with Buyer to effect an orderly transition
                           in the ownership of the Assets and Facilities; and

                  (4)      protect and preserve the relationships with the
                           existing customers at the Facilities.

              (b) From and after the date hereof to and including the Effective
Date, Seller shall not without the prior written consent of Buyer (which consent
shall not be unreasonably withheld):

                  (1)      grant any easements, rights-of-way, licenses, or
                           similar rights or enter into, terminate or amend any
                           Contract which is a part of or affects the Facilities
                           or the Assets;

                  (2)      abandon or fail to maintain any Right-of-Way or
                           Permit which is a part of or would have an effect
                           upon the Facilities or the Assets;

                  (3)      incur any obligation or liability in respect of the
                           Assets or Facilities or make any expenditure which
                           individually or in the aggregate exceeds $25,000.00
                           except for expenditures made in connection with any
                           emergency or other force majeure event;

                  (4)      sell, assign, transfer, mortgage, pledge, subject to
                           any Lien or otherwise dispose of or encumber any
                           Asset (excluding the Credit Facility Liens);

                  (5)      settle any pending Proceeding or Claim applicable to
                           Seller's interest in the Facilities or the Assets
                           except for settlements which do not impose any
                           obligation on the Facilities or the Assets or the
                           operation of the Facilities or the Assets which
                           extends beyond the Closing Date;

                  (6)      make any material change in the conduct of the
                           business or operations of the Facilities; or

                  (7)      commit to any of the foregoing.

         7.3. Title Insurance, Survey of and Title to Real Property.

              (a) Upon Buyer's written request, Seller will provide to Buyer, at
no cost to Buyer, any Books and Records containing title information relating to
the Facilities. Seller makes no representation as to the accuracy of this
information. Prior to Closing, Buyer will (1) order a title examination and
commitments from Chicago Title Insurance Company, and (2) order ALTA land
surveys from a Arkansas licensed surveyor for the Real Property associated with
the North Terminal and the South



                                       20
<PAGE>

Terminal and all other fee-owned real property sites that form a part of the
Assets in anticipation of Buyer's acquisition of extended title insurance from
the title insurance company. The final revised commitments for extended title
insurance based, in part, on the results of the surveys, must be received by
Buyer prior to Closing. Such title commitments shall be deemed to be acceptable
to Buyer if they reflect good, valid and marketable title to the Facilities in
fee simple and free and clear of all Liens and title defects, except Permitted
Encumbrances. Examination of title to the Facilities, title insurance premiums
and surveys, if any, will be at Buyer's cost.

              (b) From and after the date hereof to and including the Closing
Date, Buyer shall have the right to inspect and examine title to the Assets. In
the event such examination reveals any defects in title, Buyer shall notify
Seller in writing immediately, but prior to Closing of such defects. Upon
receipt of said notice, Seller shall cure all such defects to title contained in
Buyer's notice at Seller's sole expense. If all such defects of title contained
in Buyer's written notice thereof have not been cured by Seller, or waived by
Buyer on or prior to the Closing Date, Seller and Buyer shall attempt to agree
upon an appropriate adjustment to the Purchase Price to account for such
matters. If within a reasonable period after the commencement of negotiations
relating to such adjustment to the Purchase Price, Buyer and Seller have not
agreed upon an adjustment in the Purchase Price, either Party may terminate this
Agreement by giving notice to Seller. Any notice given by Buyer pursuant to this
Section 7.3, or the failure to give any such notice shall not affect Buyer's
right to seek indemnification under Section 13.1, unless such defect has been
waived by Buyer pursuant to this Section 7.3.

         7.4. Damage or Condemnation. If the Facilities or any part thereof is
damaged or condemned or condemnation proceedings affecting any part of the
Facilities are filed or threatened prior to the Closing Date and the cost of the
restoration or repair of such part of the Facilities to its condition
immediately prior to such damage or condemnation, as reasonably estimated by
Seller, exceeds $250,000, then Seller shall promptly give written notice thereof
to Buyer giving the full particulars of such damage or condemnation, the
estimated time for completion of such restoration or repair, and Seller's
estimate of the cost of restoration or repair thereof . In any such notice,
Seller shall also elect to either (a) bear all costs of such repair or
restoration or (b) state its willingness to endeavor to agree with Buyer upon an
appropriate adjustment to the Purchase Price for such matters. Within five (5)
days of the date of receipt by Buyer of such a notice from Seller under (b)
above, Buyer shall attempt to agree with Seller upon an appropriate adjustment
to the Purchase Price, failing which either Party may terminate this Agreement.
In the event Buyer fails to terminate this Agreement with respect to any damage
or condemnation notice, then Seller shall proceed to make the repairs or
restoration specified therein at Seller's sole cost, risk and expense.

         7.5 Press Releases/Announcements. Prior to Closing, neither Party shall
make any public announcement or issue any press release regarding this
Agreement, the transactions contemplated hereby or the status of negotiations
between the parties regarding the same without first conferring with the others.
If the Parties are unable to agree as to the text or time of release of any such
announcement, no announcement will be made unless the Party proposing the
announcement is advised by legal counsel that the announcement is legally
required to be made, in which case the other Parties shall be immediately
advised of the text and time of release of the announcement. The Parties



                                       21
<PAGE>

further agree to consult with each other on all press releases and announcements
to be issued at Closing concerning the transactions contemplated by this
Agreement. The Buyer and Seller may each continue such communications with
employees, customers, suppliers, lenders, stockholders and other particular
groups as may be legally required and not inconsistent with the best interests
of the other Party or the prompt consummation of the transactions contemplated
by this Agreement.

         7.6. Environmental/Operations Audit.

              (a) From and after the date of this Agreement to and including the
Closing Date (the "Inspection Period") Buyer will have the (1) right of access
to all Books and Records pertaining to the condition of the Assets and
Facilities reasonably requested by Buyer in writing, and (2) subject to the
execution of a mutually agreeable access agreement, the right of access to the
Assets and the Facilities for the purpose of conducting surveys, inspections,
and such other examinations of the Assets and Facilities as Buyer may desire
subject to Paragraphs (b) and (c) of this Section 7.6 (collectively, (1) and (2)
constitute the "Inspection"). Buyer will use reasonable care in the course of
performing the Inspection. Buyer will defend and indemnify Seller for any claims
or liabilities arising out of the performance of the Inspection, except to the
extent due to Seller's gross negligence or willful misconduct. In the exercise
of its rights under this Paragraph, Buyer will minimize any interference with
Seller's operations on the Facilities, (except for terminal managers in the
presence of a management representative of Seller or employment interviews
conducted with the consent of Seller) will not engage in discussions with any
site personnel and will give Seller reasonable advance written notice of any
Inspection activities. Buyer will pay all expenses associated with the
Inspection, including the disposal of any wastes generated by testing. Seller
may otherwise participate in the testing at its cost. Seller will have the right
to approve and witness all testing activities. Seller will be promptly provided
with all non-privileged written information and reports, raw data and test
results generated by the Inspection. All information pertaining to the Assets
and Facilities shall be subject to the terms of the Nondisclosure Agreement
between Seller and Williams Energy Services LLC dated February 6, 2001.

              (b) The Inspection shall include a review of all available
operational records of the Assets, and only those environmental assessment
activities which are part of the ASTM Phase I Environmental Assessment process
(as defined in ASTM Standard E-1527-00, the "Phase I Environmental Assessment"),
which shall include records review, including but not limited to review of
records maintained or on file with appropriate state and federal regulatory
bodies, site reconnaissance and interviews; provided, however, that the Phase I
Environmental Assessment shall also include a review of any relevant,
publicly-available information concerning geologic and/or hydro-geologic
conditions associated with the Assets. The Parties agree that the Phase I
Environmental Assessment shall not involve any testing or sampling activities of
materials such as soil and groundwater associated with any potential
environmental conditions involving the Assets.

         7.7 Contract Notices. Subject to Section 7.8, the Parties shall on the
Closing Date execute and deliver notices with regard to each of the Assigned
Contracts, Rights-of-Way and Permits, which are assignable by Seller in form and
substance reasonably acceptable to the Buyer, stating that Seller has assigned
to Buyer its interest therein and Buyer has accepted a delegation of



                                       22
<PAGE>

Seller's duties arising thereunder on or after the Effective Date (excluding any
Retained Liabilities).

         7.8 Consents. Seller shall secure from any Third Person and prepare and
deliver to Buyer prior to Closing, fully executed, all forms of those consents
or waivers that are necessary and proper to consummate the sale, assignment and
conveyance to Buyer of the Assets. All of such consents and waivers shall be in
form and substance reasonably satisfactory to Buyer. However, if such Third
Person consents to Assigned Contracts, Rights-of-Way or other assignments or
conveyances of the Assets have not been obtained before Closing, the Parties
will negotiate in good faith to arrive upon an appropriate mutually agreeable
adjustment to the Purchase Price. If such an adjustment in the Purchase Price
can not be agreed upon or other provision has not been made therefore and
mutually agreed upon in writing prior to Closing, Buyer may terminate this
Agreement prior to Closing and both Parties will be released from all further
obligations related to this Agreement.

         7.9 Completion of Due Diligence. The due diligence review to be
undertaken by Buyer, as referenced in this Section 7 (excluding the Baseline
Audit and Baseline Audit Report, which shall be governed by Section 8.2 and
title defects, which shall be governed by Section 7.3) and Section 9.8 shall be
completed prior to the Closing, unless extended by mutual written agreement.

         7.10 Establishing Product Inventory.

              (a) The Facilities shall close at 12:00 a.m. on July 1, 2001.
Between that time and 7:00 a.m. on July 1, 2001, an independent third party
inspection company mutually selected by Buyer and Seller (the cost of which will
be shared equally between the Parties) will perform an inventory and measurement
based upon applicable pipeline run tickets or bills of lading or observed
metering, gauging or measurement procedures of all Product Inventory located in
the Facilities' storage tanks and in active pipelines (including line fill in
such pipelines) to determine the volume all Product Inventory located (1) in
above-ground storage tanks at the Facilities and (2) in the line-fill at the
Facilities. All measurements of tanks hereunder shall be made from tank gauges
on 100 percent tank table basis or by positive displacement meters. All
measurements and tests shall be made in accordance with the latest ATM or
ASME-API (Petroleum PD Meter Code) published methods then in effect, whichever
apply. Volume and gravity shall be adjusted to 60(Degree) Fahrenheit for each
barrel (consisting for 42 U.S. gallons) and adjusted for tank shell temperature
correction factors to 60 degrees Fahrenheit. Full deduction for all bottom
sediment and water shall be made according to the ASTM Standard Method then in
effect. The final inventory volume for each type of Product comprising Product
Inventory shall be subject to Buyer's approval, which will not be unreasonably
withheld. Within ten (10) days of the Effective Date, at Buyer's option and upon
written notification, Seller shall be responsible for disposal of any water in
the storage tanks as measured under this Section within ten (10) days of receipt
of said notice.

              (b) At the Effective Date, Seller shall transfer custody of the
Product



                                       23
<PAGE>

Inventory and title to the tank bottom sediment to Buyer. Buyer shall assume
responsibility for the Product Inventory on behalf of and in accordance with the
direction of the respective customers. Seller will remain responsible and liable
for the exchange contract obligations of TPSI.

         7.11 Employees.

              (a) In order to assist Buyer in evaluating those employees
performing direct operational and substantial direct support services related to
the Facilities ("Employees"), Seller will as soon as practicable after the
execution of this Agreement by both Parties make available to Buyer a complete
list of the names, dates of hire and annual compensation or hourly rates
(including any currently taxable profit-sharing, bonus or other form of
compensation) of such Employees as of April 30, 2001.

              (b) Buyer is not obligated to offer employment to or continue the
employment of any officer, employee, agent, or representative of Seller,
including, without limitation, the Employees. Any successor clause or agreement
in any labor contracts or other labor arrangements, if any currently in effect,
would not be applicable to the sale and purchase of the Property, or otherwise
affect or impose any conditions or obligations on Buyer.

              (c) Buyer will evaluate and make hiring decisions with respect to
the Employees in a legal manner and will indemnify Seller with respect to any
claims or causes of action stemming from or related to such hiring decisions.
With respect to any Employees to which Buyer elects to make offers of employment
(which employment would be conditional upon the Closing of all transactions
contemplated under this Agreement and Seller's termination of such affected
Employees' employment with Seller, and would commence on the Effective Date),
and who accept such offers and are hired by Buyer, Buyer will hire such
Employees at wage and salary levels and enroll such Employees in welfare,
pension and other fringe benefit plans, substantially equivalent to those
presently offered to similarly situated employees of Buyer. Unless otherwise
precluded by ERISA or the terms of its existing benefits plans, Buyer will
credit such Employees with the years of service, as shown in Seller's records,
for purposes of eligibility and vesting under Buyer's retirement plans and
determination of benefits under Buyer's paid time off, severance, short-term
disability and service award plans. Buyer will notify Seller four days prior to
the Closing Date as to which of the Employees Buyer has extended or intends to
extend offers of employment, as well as those to whom Buyer has not extended or
will not extend an offer. Immediately prior to the Effective Date, Seller will
terminate the employment of such Employees to whom Buyer extends employment
offers and such employees accept such offers prior to that date. Buyer will
provide Seller with a copy of the terms and conditions of each offer extended,
including without limitation, job title, job duties and responsibilities, annual
wage or salary, and applicable welfare, pension and fringe benefit plans.

              (d) Seller will offer severance benefits to those Employees to
whom Buyer does not extend an offer of employment in accordance with paragraph
(c) above and who are subsequently terminated by Seller. If within one (1) year
after Closing, Buyer hires any Employee that has received severance benefits
from Seller, Buyer will reimburse Seller for all severance benefits paid by
Seller to such Employee.



                                       24
<PAGE>

              (e) Seller will fully pay or otherwise satisfy any claims by any
directors, officers, employees, shareholders, agents and representatives of
Seller relating to this Agreement, the performance or consummation thereof, and
any claims by any of them relating to or arising out of (i) their employment by
Seller, (ii) any employment contract involving Seller, (iii) any pension or
other benefit liabilities of Seller, (iv) any law requiring notice of severance
or severance benefit. With respect to any Employees of Seller who are terminated
by Seller, Seller will defend (with counsel reasonably acceptable to Buyer) and
indemnify Buyer from and against all claims, expenses, lawsuits and obligations
with respect to or arising from such termination, and Seller will comply with
all applicable laws in connection therewith, including, without limitation, the
Worker Adjustment and Retraining Notification Act.

SECTION 8. CERTAIN POST-CLOSING COVENANTS

         8.1. Payment of Liabilities. Seller shall pay or otherwise satisfy in
the ordinary course all of Seller's trade payables that relate to the period
prior to the Effective Date with respect to the Assets and shall fully pay or
otherwise satisfy all other Retained Liabilities.

         8.2. Baseline Audit and Baseline Audit Report.

              (a) For six months after the Effective Date, Buyer, at its option
may undertake such Phase II and other assessment as Buyer deems necessary for
Buyer to fully determine the environmental condition and status of compliance
with Environmental Laws of the Assets. Such environmental assessment (the
"Baseline Audit") shall establish the environmental condition and Environmental
Law compliance status of the Assets as of the Effective Date. Buyer will provide
reasonable prior notice to Seller of the commencement of the Baseline Audit and
provide Seller or its authorized representative the opportunity to observe the
audit and take duplicate samples of environmental constituents at Seller's sole
cost and upon the execution of an access agreement containing terms and
provisions mutually acceptable to the Parties. If Seller fails to witness the
Baseline Audit, Buyer may proceed to conduct it without Seller. If within the
aforesaid six-month period Buyer has not completed its work on the Baseline
Audit, Buyer waives its right to assert its environmental indemnification rights
under Section 13.1 against Seller.

              (b) Upon conclusion of the Baseline Audit, Buyer shall provide
Seller a copy of the written report thereof (the "Baseline Audit Report") and
for thirty (30) days after Seller's receipt of such report, Seller may make any
reasonable recommendations for changes in the report, including, without
limitation, changes based on test results of samples taken by Seller during the
Baseline Audit or re-testing of samples taken by Buyer during the Baseline
Audit. The Parties will negotiate in good faith to resolve any disputes with
respect to the Baseline Audit Report within sixty (60) days following the end of
the aforesaid thirty-day period and if at the end of such period, they not
resolved such dispute to their mutual satisfaction, they will submit the dispute
to arbitration by an Environmental Arbitrator in accordance with the procedures
described in Section 13.1 (c) and (d). The arbitrator will resolve the dispute
based upon a written opinion containing a reasoned explanation for his or her
decision, which decision will be the exclusive remedy in respect of any such
dispute, final and binding on the Buyer and Seller for all purposes and may be
entered



                                       25
<PAGE>

in any court of competent jurisdiction. The provisions of this Section 8.2 will
survive the Effective Date and this Agreement will be amended subsequent to the
Effective Date to include the Baseline Audit Report, mutually acceptable to both
Parties, which shall be attached hereto as Schedule 8.2 (b).

         8.3. Revenues and Remittance of Monies. All revenues, costs and
expenses attributable to the Assets prior to the Effective Date shall belong to
Seller, and all revenues, costs and expenses attributable to the Assets from and
after the Effective Date shall belong to Buyer. If a Party receives any monies
from a Third Person that are due to another Party, it shall promptly remit such
monies to such Party.

         8.4. Confidentiality. All information provided by one Party to the
other Party up to the Effective Date in connection with and as a result of this
Agreement shall be deemed "Information", as such term is defined in the
Nondisclosure Agreement between Williams Energy Services, LLC and TTI dated
February 6, 2001, and shall be governed by the terms and provisions thereof,
which agreement Buyer and Seller both agreed and ratified as applying to this
transaction under the Letter of Intent between them dated May 17, 2001 and which
they both agree and ratify as applying to them under this Agreement.

         8.5 Contingency Payments.

         (a) For a period not to exceed five years after the Effective Date,
Seller will pay to Buyer certain amounts ("Contingency Payments") related to a
certain shortfall in Product delivered from the Facilities up to a maximum of
$725,000 per year (with the total of such payments not exceeding $3,625,000 over
the five-year period) based on the following formula:

              [(A - B) x D] / C = E

         Where:
                  A = 11,862,500 barrels (32,500 barrels per day);
                  B = The total volume in barrels of all Products delivered from
                      the Facilities during the year for which the Contingency
                      Payment may be due or 7,300,000 barrels (20,000 barrels
                      per day), whichever is greater;
                  C = 4,562,500 barrels (12,500 barrels per day);
                  D = $725,000; and
                  E = Total Contingency Payment due to Buyer.

         For purposes of this Section 8.5, the term "year" is defined as a
period of twelve calendar months following the Effective Date and each
subsequent twelve-month period. Each such Contingency Payment, if any, will be
paid to Buyer within thirty (30) days after the end of each year for which it is
due. As soon as reasonably possible after each month during the period that such
Contingency Payments are due, Buyer will provide Seller with a monthly statement
of the aggregate volume of Products delivered from the Facilities for the prior
month by the 15th of the following month.



                                       26
<PAGE>

         (b) To secure the payment of such Contingency Payments and unless
otherwise provided in this Section 8.5(b), Seller will obtain each year during
the period said Contingency Payments are due, a letter of credit ("Letter of
Credit") in a form acceptable to Buyer and in the amount equal to the remaining
maximum value of the Contingency Payment. The Letter of Credit may also be drawn
upon with respect to any of the indemnification obligations of Seller under this
Agreement. Buyer will be responsible for and will pay upon receipt of an invoice
from Seller, the first $50,000 of the yearly cost of such Letter of Credit.
Buyer will review in good faith at least annually the need for Seller to obtain
such Letter of Credit and notify Seller at least thirty (30) days prior to the
end of each year whether Seller should renew the Letter of Credit for the
following year.

         (c) The Contingency Payments will not be subject to the deductible
amount provided in Section 13.2.

         8.6. Use of Terminal Automation System. So long as Seller or its
Affiliated Company is a customer of the Facilities, Buyer will allow Seller or
its Affiliated Company at no cost (except actual third party expenses incurred
by Buyer) to utilize the terminal automation system to allocate Product liftings
of the individual customers of Seller or its Affiliated Company.

         8.7 Audited Financials. Seller will supply Buyer with audited
financials by July 31, 2001 in compliance with Regulation SX of the SEC. Buyer
will pay fifty percent of third party expenses incurred by Seller for such
audited financials.

SECTION 9. CONDITIONS TO OBLIGATIONS OF BUYER AT CLOSING

         The obligations of Buyer to purchase the Assets and Facilities under
this Agreement are subject to the satisfaction, at or before the Closing, of the
following conditions:

         9.1. Compliance; Accuracy of Representations. Seller shall not be in
material breach of any of Seller's covenants, agreements, and conditions
required by this Agreement to be performed, satisfied, or complied with by it on
or before the Closing, and all representations and warranties of Seller in this
Agreement or in any certificate, document, instrument or writing delivered to
Buyer by or on behalf of Seller under this Agreement shall be true and correct
on and as of the Closing Date with the same force and effect as though they had
been made on the Closing Date.

         9.2 Buyer's Board Approval. The Board of Directors of the general
partner of Buyer shall have authorized the execution, delivery, and performance
of this Agreement and the consummation of the transactions contemplated herein.

         9.3. Officers' Certificates. Buyer shall have received certificates
dated as of the Closing Date, in form and substance reasonably satisfactory to
Buyer,

              (a) signed by the President or Vice President of Seller certifying
that (1) all representations and warranties made by Seller in this Agreement or
in any certificate, document, instrument or other writing delivered to Buyer by
or on behalf of Seller under this Agreement are true



                                       27
<PAGE>

and correct on and as of the Closing Date as though made on, as of and with
respect to the Closing Date, and (2) all covenants, agreements, and conditions
required by this Agreement to be performed, satisfied or complied with by Seller
on or before the Closing Date have been performed, satisfied and complied with;

              (b) signed by Secretary or an Assistant Secretary of Seller
certifying (1) the accuracy and completeness of the copies of, as well as the
current effectiveness of, the resolutions to be attached thereto of the Board of
Directors of Seller authorizing the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein, and (2)
the incumbency of the officer executing this Agreement on behalf of Seller and
any documents to be executed and delivered by Seller at the Closing.

         9.4. No Orders or Lawsuits. No order, writ, injunction or decree shall
have been entered and be in effect by any court of competent jurisdiction or any
Governmental Authority, and no Law shall have been promulgated or enacted and be
in effect, that restrains, enjoins or invalidates the transactions contemplated
hereby. No Proceeding initiated by any Person shall be pending before any court
or Governmental Authority seeking to restrain or prohibit or declare illegal, or
seeking substantial damages in connection with, the transactions contemplated by
this Agreement.

         9.5. Third Person Consents. Seller shall have obtained all Third Person
consents in accordance with Section 7.8 (except for those indicated on Schedule
2.1(e) as immaterial) and lien releases or waivers necessary to consummate the
transactions contemplated by this Agreement, including, without limitation, a
release of the Credit Facility Liens, all of such consents and waivers being in
form and substance reasonably satisfactory to Buyer.

         9.6. Absence of Certain Changes. There shall not have occurred with
respect to the Facilities or the Assets any act or omission constituting a
violation of any Law or Environmental Law between the date of this Agreement and
the Closing Date nor any damage or destruction, whether covered by insurance or
not, which could materially adversely affect the utilization and operations of
the Facilities or the Assets.

         9.7. Conveyance Documents. Seller shall have duly executed and
delivered to Buyer the Conveyance Documents and all other instruments and
documents required on Seller's part to effectuate this Agreement and the
transactions contemplated hereby in form and substance reasonably satisfactory
to Buyer, including without limitation, the Deed, Bill of Sale Assignment and
Assumption of Contracts and Assignment and Assumption of Permits, in the forms
attached hereto as Exhibit 9.7.

         9.8. Due Diligence. Buyer shall have completed a due diligence
investigation of the Assets and Facilities to its reasonable satisfaction, with
the results of such investigation also reasonably satisfactory to Buyer. Such
due diligence investigation shall cover the matters described in Section 7 and
shall also include, but not be limited to, Buyer: (i) conducting a Phase I
environmental site assessment of the Assets and Facilities; (ii) conducting a
physical inspection of the Assets and Facilities and review of maintenance
records and verifying that the Assets and Facilities include all equipment
necessary for the efficient operation of the Facilities and that such equipment
is in good



                                       28
<PAGE>

repair and operating condition; (iii) verifying the existence and validity of
real property interests necessary for the operation of the Assets and Facilities
and that all documents evidencing such interests are properly executed, recorded
and assignable in their entirety; (iv) verifying that any and all Assigned
Contracts have not been materially breached, are currently in effect, and
assignable and that there are no material unanticipated current or potential
liabilities; and (v) verifying that the Assets and Facilities are in material
compliance with all applicable Laws and Environmental Laws.

         9.9. Title Insurance Policy. Chicago Title Insurance Company shall, in
accordance with the title commitment standard specified in Section 7.3(a), have
committed to issue to Buyer at Closing an extended coverage ALTA owner's policy
of title insurance upon payment by Buyer of its regularly scheduled premium,
insuring Buyer's interests in the Real Property associated with the North
Terminal and the South Terminal and all other fee-owned real property sites that
form a part of the Assets in an amount satisfactory to Buyer, subject only to
delivery of satisfactory title from Seller to Buyer.

         9.10. Transition Services. At Closing, Seller shall execute and deliver
a Transition Services Agreement in the form attached hereto as Exhibit 9.10.

         9.11. Terminal Use and Access Agreement. At Closing, TPSI and Buyer
will executed a Terminal Use and Access Agreement covering the TPSI Product
Inventory in the form attached to this Agreement as Exhibit 9.11.

         9.12. Letter of Credit. At Closing, Seller shall provide and deliver a
Letter of Credit as provided in Section 8.5.

         9.13. Butane Blending Software. At Closing, Seller and Buyer will
execute a Software License Agreement for the Butane Blending Software in the
form attached to this Agreement as Exhibit 9.13.

         9.14. TEPPCO Line Space Agreement. At Closing Seller shall execute and
deliver the TEPPCO Line Space Agreement in the form attached hereto as Exhibit
9.14.


SECTION 10. CONDITIONS TO OBLIGATIONS OF SELLER AT CLOSING

         The obligations of Seller to sell and transfer the Assets and
Facilities under this Agreement are subject to the satisfaction, at or before
the Closing, of the following conditions:

         10.1. Compliance; Accuracy of Representations. Buyer shall not be in
breach of any of Buyer's covenants, agreements, and conditions required by this
Agreement to be performed, satisfied, or complied with by it on or before the
Closing, and the representations and warranties of Buyer in this Agreement or in
any certificate, document, instrument or writing delivered to Seller by or on
behalf of Buyer under this Agreement shall be true and correct on and as of the
Closing Date with the same force and effect as though they had been made on the
Closing Date.



                                       29
<PAGE>

         10.2. Seller's Board Approval. The Board of Directors of Seller shall
have authorized the execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated herein.

         10.3. Officers' Certificates. Seller shall have received certificates
dated as of the Closing Date, in form and substance reasonably satisfactory to
Seller,

              (a) signed by the President or a Vice President of Buyer
certifying that (1) all representations and warranties made by Buyer in this
Agreement or in any certificate, document, instrument or other writing delivery
to Seller by or on behalf of Buyer under this Agreement are true and correct on
and as of the Closing Date as though made on, as of and with respect to the
Closing Date, and (2) all covenants, agreements, and conditions required by this
Agreement to be performed, satisfied or complied with by Buyer on or before the
Closing Date have been performed, satisfied and complied with; and

              (b) signed by Buyer's Secretary or an Assistant Secretary
certifying (1) the accuracy and completeness of the copies of, as well as the
current effectiveness of, the resolutions to be attached thereto of the Board of
Directors of Buyer authorizing the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein, and (2)
the incumbency of the officers executing this Agreement on behalf of Buyer and
any documents to be executed and delivered by Buyer at the Closing,.

         10.4. No Orders or Lawsuits. No order, writ, injunction or decree shall
have been entered and be in effect by any court of competent jurisdiction or any
Governmental Authority, and no Laws shall have been promulgated or enacted and
be in effect, that restrains, enjoins or invalidates the transactions
contemplated hereby. No Proceeding initiated by any Person shall be pending
before any court or Governmental Authority seeking to restrain or prohibit or
declare illegal, or seeking substantial damages in connection with, the
transactions contemplated by this Agreement.

         10.5. Third Person Consents. Buyer shall have obtained all Third Person
consents or waivers that Seller was able to obtain, all of such consents and
waivers being in form and substance reasonably satisfactory to Seller.

         10.6. Purchase Price. Buyer shall deliver to Seller on the Closing Date
the Purchase Price in accordance with Section 3.1.

         10.7. Exchange Agreement. At Closing Affiliated Companies of Seller and
Buyer shall have entered into an exchange agreement with respect to deliveries
of TPSI Product to the Facilities.

SECTION 11. CLOSING

         The Closing shall take place at the offices of Seller, at 370 17th
Street, Suite 2750, Denver, Colorado, or such other place mutually agreeable to
the Parties, no later than June 30, 2001, which



                                       30
<PAGE>

date may be extended only by mutual written agreement of the Parties. Facsimile
signatures are an acceptable means of indicating that a Party has executed this
Agreement and any other documents required for purposes of Closing, provided
that each Party will be provided with original executed copies of this Agreement
and such documents within a reasonable period of time after receipt of such
facsimile signatures.

SECTION 12. TAX MATTERS

         12.1. Taxes and Recording Fees. Except as provided otherwise in Section
12.2, Buyer and Seller shall divide equally all local state and federal sales
taxes and fees incurred in connection with the transaction herein including
without limitation all sales, use and transfer taxes, as well as recording and
documentary fee, if any.

         12.2. Allocation of Property Taxes. Each Party shall pay its respective
pro rata portion of all ad valorem or similar Taxes under any property or lease
included in the Assets for the Closing Year. The Purchase Price shall be reduced
by a reasonable estimate of all ad valorem or similar Taxes for the Closing Year
(based on the Taxes for the Prior Year) prorated to the Effective Date; Seller
shall make available to Buyer copies of all statements and assessments
reflecting Taxes for the Prior Year. Buyer shall pay such sums to the
appropriate taxing authorities when due, prior to becoming delinquent. Except as
set forth in this Section 12, Buyer shall have no other liability for Taxes
payable by Seller for the period prior to the Effective Date relating to the
operations or business of Seller or the transactions contemplated hereunder.

SECTION 13. INDEMNIFICATION

         13.1. Environmental Indemnification.

               (a) Except as otherwise expressly limited in this Section 13.1,
Seller shall indemnify Buyer, and its Affiliated Companies and each of their
respective officers, directors, employees, stockholders, partners and
representatives ("Buyer Indemnified Parties") and hold them harmless from all
Retained Environmental Claims. Seller's environmental indemnity obligations
under this Section 13.1 will be limited under the following circumstances: (1)
Seller will have no indemnity obligations to Buyer for any Retained
Environmental Claim that, under the Environmental Laws in effect as of the
Effective Date, does not require "corrective action" (actions required to
satisfy legal requirements of the applicable Governmental Authority including,
without limitation, no action, monitoring, remediation through attenuation,
confinement or treatment) but subsequently requires corrective action if Seller
reasonably establishes that Buyer contributed to or exacerbated any portion of
the Polluting Substances that required such corrective action; and (2) with
respect to any Retained Environmental Claim for which Seller has initiated
"Remedial Action" (as defined below in subsection (b)), Seller will have no
indemnity obligations for that portion of remediation or corrective action



                                       31
<PAGE>

costs which Seller reasonably establishes to be caused by Buyer's contribution
to the condition subject to Remedial Action.

               (b) Without limiting the other provisions of this Section 13, if
Buyer has a claim against Seller related to an Retained Environmental Claim,
Seller shall, subject to Buyer's input and approval, which approval will not be
unreasonably withheld, manage any investigation, remediation, corrective action
or other activities required to address the condition(s) giving rise to such
Retained Environmental Claim ("Remedial Action"). Without limiting Buyer's right
to make claims for indemnification under Section 13.1, Buyer shall cooperate
with Seller and shall, if reasonable, avoid taking any action that would have an
adverse effect on Seller's ability to seek reimbursement under any applicable
insurance policy for the benefit of Seller, or on Seller's ability to exercise
any available contractual rights of contribution or indemnification, including,
without limitation, that which may be obtained by Seller in relation to its
participation in any federal, state or local administered restoration,
reimbursement or other environmental liability indemnification program. Seller
shall (1) provide Buyer the opportunity to review in advance such Remedial
Action to be taken or implemented and the form and substance of any plan, report
or submission to be transmitted to any Governmental Entity regarding such
Remedial Action, and (2) provide Buyer periodic written reports regarding the
status of such Remedial Action, including any correspondence with any
Governmental Entity regarding such Remedial Action, and Seller's decisions after
the Effective Date on such matters shall be subject to Buyer's approval, which
approval shall not be unreasonably withheld. For the purpose of conducting such
Remedial Action, Buyer and Seller will enter an Access Agreement in
substantially the form attached hereto as Exhibit 13.1(b).

               (c) If a dispute arises hereunder with respect to any Retained
Environmental Claim, then the Buyer and Seller shall select a nationally
recognized environmental consultant to arbitrate such dispute in accordance with
the procedures set forth in subparagraph (d) below. If the Buyer and Seller
cannot agree on one such environmental consultant within thirty (30) days, each
Party shall select its own nationally recognized environmental consultant within
thirty (30) days thereafter, which consultants shall jointly select a third
environmental consultant to arbitrate such dispute. The agreed upon or selected
environmental consultant shall be deemed the "Environmental Arbitrator." The
arbitration provided for in this subparagraph (c) and in subparagraph (d) below
shall be the Parties' exclusive remedy in respect of a dispute concerning
indemnification for environmental matters under this Section 13.1.

               (d) In accordance with the then current Expedited Procedures of
the Commercial Arbitration Rules of the American Arbitration Association, Buyer
and Seller shall submit disputes concerning indemnification for environmental
matters under this Section 13.1 and, if applicable, their respective estimates
of the applicable dollar amount of such Retained Environmental Claim to the
Environmental Arbitrator for a final, binding resolution. If the dispute
concerns only a dollar amount, the Environmental Arbitrator shall choose one or
the other of such estimates as the final amount of Retained Environmental Claim.
The arbitration shall be conducted in Dallas, Texas. No transcript or recording
shall be made of any arbitration session. The decision of the Environmental
Arbitrator shall be final and binding on the Buyer and Seller for all purposes
and may be entered in any court of competent jurisdiction. The losing party
shall pay the expenses of the Environmental Arbitrator.



                                       32
<PAGE>

               (e) From and after the Effective Date, Buyer shall provide Seller
with prompt written notice of any releases, leaks or spills of Polluting
Substances occurring on the Assets and Facilities, whether or not reportable to
any Governmental Authority (collectively a "Release"), with full particulars as
to the time, date and location thereof, the substance involved and steps or
methods undertaken with respect to clean-up or remediation thereof.

         13.2. Other Indemnification by Seller. Seller shall indemnify the Buyer
Indemnified Parties against and hold them harmless from any Claim suffered or
incurred by any such Buyer Indemnified Party to the extent arising from,
relating to or otherwise in respect of (a) any breach of any representation or
warranty of Seller contained in this Agreement or in any certificate delivered
pursuant hereto, (b) any breach of any covenant of Seller contained in this
Agreement and (c) all Retained Liabilities. In no event shall Seller be
obligated to indemnify Buyer or any other person with respect to any matter to
the extent that Seller has already provided indemnity for such matter pursuant
to this Agreement. Except for (1) Seller's obligation to indemnify Buyer with
respect to Retained Environmental Claims and (2) Seller's obligation to pay
Contingency Payments pursuant to Section 8.5, Seller shall have no liability for
any of the other foregoing Claims and Retained Liabilities unless the aggregate
of all losses, liabilities, costs and expenses relating to such other Claim or
Retained Liability for which Seller would, but for this limitation, be liable
exceeds on a cumulative basis an amount equal to $250,000, in which case Seller
shall be liable for the full amount over this $250,000 deductible.

         13.3. Indemnification by Buyer. Buyer shall indemnify Seller, its
Affiliated Companies and each of their respective officers, directors,
employees, stockholders, agents and representatives ("Seller Indemnified
Parties") against and hold them harmless from any Claim suffered or incurred by
any Seller Indemnified Party to the extent arising from (a) any breach of any
representation or warranty of Buyer contained in this Agreement or in any
certificate delivered pursuant hereto, (b) any breach of any covenant of Buyer
contained in this Agreement, (c) all obligations and liabilities related to the
Assets and Facilities, other than Retained Liabilities and other items which
Seller has expressly agreed to pay or perform pursuant to this Agreement or for
which indemnification is provided under Section 13.2, (d) any act or omission of
Buyer, its officers, directors, employees, agents or designated representatives
in connection with Buyer's conduct of the Inspection at Seller's Facilities
pursuant to Section 7.6, except to the extent of Seller's gross negligence or
willful misconduct related to the Inspection, (e) all Environmental Claims other
than Retained Environmental Claims and (f) any environmental matters described
in Subsections 13.1(a)(1) and 13.1(a)(2) with respect to which Seller's
environmental indemnity obligations under Section 13.1 do not apply.

         13.4. Termination of Indemnification. The obligations to indemnify and
hold harmless a Party, (a) for Retained Environmental Claims pursuant to Section
13.1, shall not terminate; provided, however, Seller's obligations to indemnify
and hold Buyer harmless for Retained Environmental Claims that involve Remedial
Action shall only continue until Seller receives a written completion or closure
order or other determination or action reasonably acceptable to Buyer finally
resolving that the Remedial Action undertaken by Seller with respect to the
Retained Environmental Claim satisfies the requirements of all applicable
Environmental Laws and has been completed to the satisfaction of



                                       33
<PAGE>

the applicable Governmental Authority ; (b) pursuant to Sections 13.2(a) and
13.3(a), shall terminate when the applicable representation, warranty or
covenant terminates pursuant to Section 13.9; provided however, that such
obligations to indemnify and hold harmless shall not terminate with respect to
any item as to which the Indemnified Party shall have, before the expiration of
the applicable period, previously made a Claim by delivering a notice of such
Claim (stating in reasonable detail the basis of such Claim) to the Indemnifying
Party, and (c) pursuant to the other clauses Sections 13.2 and 13.3 shall not
terminate.

         13.5 Procedures Relating to Indemnification.

              (a) In order for either the Seller Indemnified Parties or the
Buyer Indemnified Parties ("Indemnified Party") to be entitled to any
indemnification by a Party ("Indemnifying Party") provided for under this
Agreement in respect of, arising out of or involving a Claim by a Third Person
("Third Person Claim") against the Indemnified Party, such Indemnified Party
must notify the Indemnifying Party in writing, and in reasonable detail, of the
Third Person Claim within ten (10) business days after receipt by such
Indemnified Party of written notice of the Third Person Claim; provided,
however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the Indemnifying Party
shall have been actually prejudiced as a result of such failure (except that the
Indemnifying Party shall not be liable for any expenses incurred during the
period in which the Indemnified Party failed to give such notice). Thereafter,
the Indemnified Party shall deliver to the Indemnifying Party, within five
business days after the Indemnified Party's receipt thereof, copies of all
notices and document (including court papers) received by the Indemnified Party
relating to the Third Person Claim.

              (b) If a Third Person Claim is made against an Indemnified Party,
the Indemnifying Party shall be entitled to participate in the defense thereof
and, if it so chooses and acknowledges its obligation to indemnify the
Indemnified Party for such Third Person Claim, to assume the defense thereof
with counsel selected by the Indemnifying Party; provided that such counsel is
not reasonably objected to by the Indemnified Party. Should the Indemnifying
Party so elect to assume the defense of a Third Person Claim, the Indemnifying
Party shall not be liable to the Indemnified Party for legal expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof. If the Indemnifying Party assumes such defense, the Indemnified Party
shall have the right to participate in the defense thereof and to employ counsel
(not reasonably objected to by the Indemnifying Party), at its own expense,
separate from the counsel employed by the Indemnifying Party, it being
understood that the Indemnifying Party shall control such defense. The
Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnified Party for any period during which the Indemnifying Party has
failed to assume the defense thereof (other than during the period prior to the
time the Indemnified Party shall have given notice of the Third Person Claim as
provided above).

              (c) If the Indemnifying Party so elects to assume the defense of
any Third Person Claim, all of the indemnified parties shall cooperate with the
Indemnifying Party in the defense or prosecution thereof. Such cooperation shall
include the retention and (upon the Indemnifying Party's request) the provision
to the Indemnifying Party of records and information, which are reasonably



                                       34
<PAGE>

relevant to such Third Person Claim, and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. Whether or not the Indemnifying Party shall
have assumed the defense of a Third Person Claim, the Indemnified Party shall
not admit any liability with respect to, or settle, compromise or discharge,
such Third Person Claim without the Indemnifying Party's prior written consent
(which consent shall not be unreasonably withheld). If the Indemnifying Party
shall have assumed the defense of a Third Person Claim, the Indemnified Party
shall agree to any settlement, compromise or discharge of a Third Person Claim
which the Indemnifying Party may recommend and which by its terms obligates the
Indemnifying Party to pay the full amount of the liability in connection with
such Third Person Claim, which releases the Indemnifying Party completely in
connection with such Third Person Claim and which would not otherwise adversely
affect the Indemnified Party.

              (d) Notwithstanding the foregoing, the Indemnifying Party shall
not be entitled to assume the defense of any Third Person Claim (and shall be
liable for the fees and expenses of counsel incurred by the Indemnified Party in
defending such Third Person Claim) if the Third Person Claim seeks an order,
injunction or other equitable relief or relief for other than money damages
against the Indemnified Party which the Indemnified Party reasonably determines,
after conferring with its outside counsel, cannot be separated from any related
claim for money damages. If such equitable relief or other relief portion of the
Third Person Claim can be so separated from that for money damages, the
Indemnifying Party shall be entitled to assume the defense of the portion
relating to money damages. The indemnification required by Sections 13.1, 13.2
and 13.3 shall be made by periodic payments of the amount thereof during the
course of the investigation, remediation or defense, as and when bills are
received or loss, liability, claim, damage or expense is incurred. All claims
under Section 13.1, 13.2, or 13.3 other than Third Person Claims shall be
governed by Section 13.6 below.

         13.6. Other Claims. In the event any Indemnified Party should have a
claim against any Indemnifying Party under Section 13.1, 13.2 or 13.3 that does
not involve a Third Person Claim being asserted against or sought to be
collected from such Indemnified Party, the Indemnified Party shall deliver
notice of such Claim with reasonable promptness to the Indemnifying Party. The
failure by any Indemnified Party so to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability that it may have to such
Indemnified Party under Section 13.1, 13.2 or 13.3, except to the extent that
the Indemnifying Party demonstrates that it has been materially prejudiced by
such failure. If the Indemnifying Party does not notify the Indemnified Party
within 20 calendar days following its receipt of such notice that the
Indemnifying Party disputes its liability to the Indemnified Party, under
Section 13.1, 13.2 or 13.3, such Claim specified by the Indemnified Party in
such notice shall be conclusively deemed a liability of the Indemnifying Party
under Section 13.1, 13.2 or 13.3 and the Indemnifying Party shall pay the amount
of such liability to the Indemnified Party on demand or, in the case of any
notice in which the amount of the Claim (or any portion thereof) is estimated,
on such later date when the amount of such Claim (or such portion thereof)
becomes finally determined. If the Indemnifying Party has timely disputed its
liability with respect to such Claim, as provided above, the Indemnifying Party,
and the Indemnified Party shall proceed in good faith to negotiate a resolution
of such dispute and, if not resolved through negotiations, such dispute shall be
resolved by litigation in an appropriate court of competent jurisdiction;
provided, however, that if



                                       35
<PAGE>

such dispute concerns indemnification for environmental matters under Section
13.1, it shall be submitted to arbitration in accordance with the procedures set
forth in Section 13.1.

         13.7. Mitigation. Buyer and Seller shall cooperate with each other with
respect to resolving any Claim with respect to which one Party is obligated to
indemnify the other party hereunder, including by making Reasonable Efforts to
mitigate or resolve any such Claim; provided that such Party shall not be
required to make such efforts if they would be detrimental in any material
respect to such Party. In the event that Buyer or Seller shall fail to make such
Reasonable Effort's to mitigate or resolve any Claim, then (unless the proviso
to the foregoing covenant shall be applicable) notwithstanding anything else to
the contrary contained herein, the other Party shall not be required to
indemnify any person for any Claim that could reasonably be expected to have
been avoided if Buyer or Seller, as the case may be, had made such efforts.

         13.8. Tax Treatment. Any payments made pursuant to this Section 13
shall be treated as purchase price adjustments by all Parties for tax purposes
to the extent permitted by Law.

         13.9. Survival of Representations, Warranties and Covenants. The
representations and warranties of Seller set forth in Sections 5.1, 5.2, 5.3 and
5.19 shall not terminate. All other representations, warranties and covenants of
Seller and Buyer in this Agreement and in any certificate delivered pursuant to
this Agreement shall survive the Effective Date and, except for the limitation
included in the second sentence of Section 5.17, shall terminate at the close of
business three (3) years following the Effective Date, except that because
specific indemnification rights and obligations are set forth in Section 13.1,
Sellers representations and warranties in Section 5.9 shall not survive the
Effective Date. All of the provisions of Sections 8, 13 and 15.12 will also
survive the Effective Date.

         13.10 Exclusive Remedy. The indemnification rights as set forth in this
Section 13 shall be the exclusive remedy available to the Parties for any
misrepresentation, breach of warranty, or breach of covenant under this
Agreement.

SECTION 14. NOTICE OF DEFAULT AND TERMINATION

         14.1. Notice of Default by Seller. Seller shall give written notice to
Buyer promptly after Seller obtains knowledge of or receives any notice claiming
or alleging the occurrence of:

               (a) Any breach or default, or event which notice or the passage
of time or both might constitute a breach or default, with respect to any
Assigned Contracts, Permits, or Rights-of-Way or similar rights relating to any
portion of the Facilities;

               (b) Any damage or losses reasonably estimated to exceed in the
aggregate of $100,000 with respect to the Assets;

               (c) Any circumstance, event or omission which would result in (i)
any of Seller's representations or warranties contained in this Agreement being
or becoming inaccurate or misleading, or (ii) the creation of any Lien on any of
the Assets except for any Permitted Encumbrance; or



                                       36
<PAGE>

               (d) Any breach by Seller of this Agreement.

         14.2. Notice of Default by Buyer. Buyer shall give written notice to
Seller promptly after Buyer obtains knowledge of or receives any notice claiming
or alleging the occurrence of:

               (a) Any circumstance, event or omission which would result in any
of Buyer's representations or warranties contained in this Agreement being or
becoming inaccurate or misleading; or

               (b) Any breach by Buyer of this Agreement.

         14.3. Breach of Representation or Warranty. If prior to Closing either
Seller or Buyer learns that any representation or warranty contained in Sections
5 or 6 is or has become untrue in any material respect, and the breaching Party
fails to cure the untrue representation and warranty within fifteen (15) days of
the notice (in which case the Closing Date will be extended to the extent
necessary to assure that such remedial action has been completed in such
manner), the non-breaching Party will have the right to terminate this Agreement
in addition to any other remedies to which it is entitled.

         14.4. Termination Prior to Closing.

               (a) Either Party may terminate this Agreement prior to Closing
upon written notice to the other Party:

                   (i)    in accordance with Sections 7.3, 7.4, 7.8 or 14.3; or

                   (ii)   if the Closing shall not have occurred on or before
                          June 30, 2001, other than due to the breach of this
                          Agreement by the Party giving such notice; or

                   (iii)  there shall be any failure by the other Party to fully
                          perform one or more of its other obligations under
                          this Agreement which are performable on or prior to
                          the Closing Date.

         14.5 Effect of Termination. Any termination pursuant to this Section 14
shall be without liability of or to any Party to this Agreement; provided,
however, that any such termination shall not relieve any Party from any
liability for such Party's breach of the provisions of this Agreement prior to
the date of termination.

SECTION 15. GENERAL PROVISIONS

         15.1. Further Assurances. At any time or from time to time at and after
the Closing, each of the Parties shall, at the request of the other, execute and
deliver or cause to be executed and delivered



                                       37
<PAGE>

all such assignments, consents, documents and instruments, and take or cause to
be taken all such other reasonable actions as may be necessary or desirable in
order to more fully and effectively carry out the intents and purposes of this
Agreement.

         15.2. Expenses.

               (a) Each Party shall pay and discharge all liabilities and
expenses incurred by or on behalf of it in connection with the preparation,
authorization, execution and performance of this Agreement and the transactions
contemplated herein, including but not limited to (i) all fees and expenses of
agents, representatives, counsel and accountants, and (ii) all amounts payable
with respect to any claim for brokerage or finder's fees or other commissions in
respect of the transactions contemplated by this Agreement based in any way on
any agreement, arrangement or understanding made by or on behalf of such Party.

               (b) Except as otherwise provided in Section 15.11, all other
legal expenses incurred by either Party after the date of this Agreement shall
be the responsibility of the Party incurring such expenses.

         15.3. Notices. All notices, requests, demands and other communications
required or permitted to be given under this Agreement shall be deemed to have
been duly given if in writing and delivered personally or received via
first-class, postage prepaid, registered or certified mail, by private overnight
courier service, or by facsimile addressed as follows:

               If to Seller:

                        TransMontaigne Terminaling Inc.
                        370 Seventeenth Street, Suite 2700
                        Denver, Colorado 80202
                        Telephone:    (303) 626-8200
                        Facsimile:     (303) 626-8228
                        Attn: President and General Counsel


               If to Buyer:

                        Williams Terminals Holdings, L.P.
                        One Williams Center, Mail Drop-720A
                        Tulsa, Oklahoma 74172
                        Telephone: (918) 573-3602
                        Facsimile: (918) 573-6865
                        Attn: Vice President



                                       38
<PAGE>

         15.4. Governing Law. EXCEPT WITH REGARD TO ANY REAL PROPERTY LAW
ISSUES, THIS AGREEMENT AND THE PERFORMANCE OF THE TRANSACTIONS CONTEMPLATED
HEREBY SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF COLORADO, WITHOUT REGARD TO ANY CONFLICT-OF-LAWS PROVISION
THEREOF THAT WOULD OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION. WITH REGARD TO ANY REAL PROPERTY LAW ISSUES, THIS AGREEMENT AND
THE PERFORMANCE OF THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ARKANSAS,
WITHOUT REGARD TO ANY CONFLICT-OF-LAW PROVISION THEREOF THAT WOULD OTHERWISE
REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.

         15.5. Entire Agreement. This Agreement together with the certificates,
documents, instruments and writings that are delivered pursuant hereto sets
forth the entire agreement and understanding of the Parties with respect of the
transaction contemplated hereby and supersedes all prior agreements,
arrangements and understandings relating to the subject matter hereof,
including, without limitation, the Letter of Intent dated May 17, 2001 between
the Parties. No representation, promise, inducement or statement of intention
with respect to the subject matter of this Agreement has been made by either
Party which is not embodied in this Agreement together with the certificates,
documents, instruments and writings that are delivered pursuant hereto, and
neither of the Parties shall be bound by or liable for any alleged
representation, promise, inducement or statement of intention not so set forth.

         15.6. No Assignment; Successors.All of the terms, covenants,
representations, warranties and conditions of this Agreement shall be binding
upon, and inure to the benefit of an be enforceable by, the Parties hereto and
their respective successors, but neither this Agreement nor the rights and
obligations of either of the Parties hereunder shall be assigned or otherwise
transferred to any Person without the prior written consent of the other Party,
which consent shall not be unreasonably withheld. Any assignment made without
obtaining such consent will be void.

         15.7. Amendments; Waiver. This Agreement may be amended, superseded or
canceled, and any of the terms hereof may be waived, only by a written
instrument specifically stating that it amends, supersedes or cancels this
Agreement or waives any of the terms herein, executed by both Parties or, in the
case of a waiver, by the Party waiving compliance. The failure of either Party
at any time to require performance of any provision herein shall in no manner
affect the right at a later time to enforce the same. No waiver by either Party
of any condition, or of any breach of any term, covenant, representation or
warranty, shall be deemed or constitute a waiver of any other condition, or
breach of any other term, covenant, representation or warranty, nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.

         15.8. Convenient Reference. Section headings contained in this
Agreement are for convenient reference only, and shall not in any way affect the
meaning or interpretation of this Agreement.



                                       39
<PAGE>

         15.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

         15.10. No Third Person Beneficiaries. Nothing in this Agreement,
whether express or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any Person other than the Parties and their
respective permitted successors and assigns.

         15.11 Attorney Fees. A Party in breach of this Agreement shall, on
demand, indemnify and hold harmless the other Party for and against all
reasonable out-of-pocket expenses, including legal fees, incurred by such Party
by reason of the enforcement and protection of its rights under this Agreement
after entry of a final non-appealable order.

         15.12. Limitation on Liability. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER HEREUNDER FOR
EXEMPLARY, PUNITIVE, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF
ANY KIND, ARISING DIRECTLY OR INDIRECTLY FROM, INCIDENT TO, OR CONNECTED WITH
THE ASSETS OR THE SALE THEREOF, REGARDLESS OF SOLE OR CONCURRENT NEGLIGENCE,
STRICT LIABILITY, OR DEFECT IN PREMISES, EQUIPMENT OR MATERIAL, AND REGARDLESS
OF WHETHER PRE-EXISTING THIS SALE. This Section 15.12 shall in no way limit or
qualify (a) the Parties' indemnification obligations under Section 13 with
respect to Claims made against either or both of the Parties by a Third Person
or (b) the Buyer's right to be fully indemnified and held harmless from and
against all consequential damages sustained or incurred by Buyer as the result
of pipeline Right-of-Way Claims asserted by Buyer no later than October 31,
2001.



                                       40
<PAGE>

         IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the date first set forth above.


                                     TRANSMONTAIGNE INC.


                                     By:  /s/ Mark S. Huff
                                        ----------------------------------------
                                        Mark S. Huff, Vice President


                                     WILLIAMS TERMINALS HOLDINGS, L.P.
                                     By:  Williams NGL, LLC, its General Partner


                                     By:  /s/ Jay A. Wiese
                                        ----------------------------------------
                                        Jay A. Wiese, Vice President




                                       41

<PAGE>


        SCHEDULE 2.1(a) - DESCRIPTION OF REAL PROPERTY AND RIGHTS OF WAY

ATTACHED TO AND MADE A PART OF THAT CERTAIN FACILITIES SALE AGREEMENT DATED JUNE
   30, 2001 BETWEEN WILLIAMS TERMINALS HOLDINGS, L.P. AND TRANSMONTAIGNE INC.


(A)      Real Property

         (1) South Terminal Facility

                  A part of the northwest quarter of the northwest quarter (NW
         1/4 NW 1/4) of Section 27 and a part of the northeast quarter of the
         northeast quarter (NE 1/4 NE 1/4) of Section 28, all in Township 2
         North, Range 11 West, Pulaski County, Arkansas, being more particularly
         described as follows:

                  Commencing at the SE Corner of said NW 1/4 of the NW 1/4,
         Section 27, thence N 89 degrees 14 minutes 00 seconds W, along the
         South line of said NW 1/4 of the NW 1/4, 81.29 feet to the west Right
         of Way of Interstate 40 Overpass Road (Airport Road) for the Point of
         Beginning. Thence continue N 89 degrees, 14 minutes, 00 seconds W,
         along said South line, 1233.63 feet to the SW Corner of said NW 1/4 of
         the NW 1/4; thence N 89 degrees 44 minutes, 09 seconds W, along the
         south line of said NE 1/4 of the NE 1/4, Section 28, 157.82 feet to the
         high bank of a slough; thence N 23 degrees 08 minutes 28 seconds W
         along said high bank of a slough, 484.37 feet to the south Right of Way
         line of Interstate 40; thence N 81 degrees, 31 minutes, 00 seconds E,
         along said south Right of Way, 1434.06 feet to the west Right of Way
         line of Overpass Road (Airport Road); thence S 14 degrees, 10 minutes,
         24 seconds E, along said west Right of Way line, 625.14 feet; thence
         continue along said west Right of Way line S 08 degrees, 34 minutes, 07
         seconds E, 68.84 feet to the Point of Beginning. Containing 18.48
         (804.852 Sq. Ft.) more of less, and also described as Lot 1,
         Transmontaigne Addition in the Bill of Assurance dated November 10,
         1998, Instrument No. 98-90649 and on Plat No. F-387, both filed of
         record on November 16, 1998 with the Circuit County Recorder in the
         County of Pulaski, State of Arkansas, which Lot 1, "Transmontaigne
         Addition", also includes Lots 1 and 2, "Airport Road Addition", as
         described in the Plat and Bill of Assurance of Lot 1 and 2, Airport
         Road Addition, dated April 8, 1994 and filed in the records of Pulaski
         County as Instrument No. 94-26809 on April 12, 1994.

         (2) North Terminal Facility

                  Beginning at a 3/4-inch pipe at the Southeast corner of the SW
         1/4 of Section 22, Township 2 North, Range 11 West, Pulaski county,
         Arkansas; thence South 00 degrees 48 minutes West along the East line
         of the NW 1/4 of Section 27 for 41.16 feet


<PAGE>


         to the North right-of-way line of interstate highway #40; thence
         South 81 degrees 31 minutes West along said right-of-way for 1419.56
         feet to a 3/4-inch pipe at the intersection of the North right-of-way
         line of interstate highway #40 and the East right-of-way line of an
         access road to the North; thence North 13 degrees 15 minutes West along
         the said East right-of-way line of the access road to the North and its
         extension for 774.82 feet to a boat spike; thence East for 1583.68 feet
         to a 3/4-inch pipe on the East line of the SW 1/2 of Section 22; thence
         South 00 degrees 10 minutes West along said East line for 503.64 feet
         to the point of beginning. The foregoing tract is situated in the SW
         1/4 of Section 22 and the NW 1/4 of Section 27, Township 2 North, Range
         11 West, Pulaski County, Arkansas and does contain 22.487 acres, more
         or less.

(B)      Together with the following Rights-of-Way and Easements:

         (1) All rights and privileges and appurtenances thereto, including the
         following as conveyed to Shell Oil Company in that Deed by Texas
         Eastern Transmission Corporation dated November 10, 1978, recorded as
         Instrument No. 78-46309 in the Office of the Recorder of Pulaski
         County, Arkansas; (1) a 16-inch underground pipeline located within the
         premises hereinabove conveyed and within the easement granted to
         Grantor in said Deed, (2) a 2-inch water line, (3) the right to receive
         water through a 4-inch line and (4) the right to use the access road
         from U.S. Highway 70; but subject however to the covenants and
         conditions as set forth in the aforesaid Deed, and as all of the
         aforesaid were conveyed by Shell Oil Company to continental Ozark, Inc.
         in Warranty Deed dated November 10, 1978, recorded as Instrument No.
         78-46310 in the records of Pulaski County, Arkansas;

         (2) The right of ingress and egress as set forth in Easement and
         Right-of-Way from TE Products Pipeline Company to COZ Terminaling,
         Inc., recorded September 26, 1996 as Instrument No. 96-67609;

         (3) The right of access between controlled access highway and
         contiguous land, contained in Warranty Deed executed February 26, 1959,
         by Texas Eastern Transmission Corporation, recorded in Deed Book 689 at
         page 477 in records of Pulaski County, Arkansas; and

         (4) The Pipe Line Easement dated June 24, 1960, granted by Texas
         Eastern Transmission Corporation to Gulf Oil Corporation, recorded in
         Book 737 at page 443 in the records of Pulaski County, Arkansas, which
         easement was conveyed to North Little Rock Terminaling Com.
         (predecessor in interest to TransMontaigne Terminaling Inc.) by Chevron
         U.S.A. Products Company, a Division of Chevron U.S.A. Inc., by Special
         Warranty Deed dated May 7, 1993, recorded May 13, 1993 as document
         93-30319, as an appurtenance to the aforesaid South Terminal Facility
         Real Property.


<PAGE>



          SCHEDULE 2.1(b) AND (c) - PERSONAL PROPERTY AND IMPROVEMENTS

  ATTACHED TO AND MADE A PART OF THAT CERTAIN FACILITIES SALE AGREEMENT DATED
           JUNE 30, 2001 BETWEEN WILLIAMS TERMINALS HOLDINGS, L.P. AND
                               TRANSMONTAIGNE INC.



INVENTORY LIST

TRANSMONTAIGNE TERMINALING - NORTH TERMINAL

TANKAGE

101 - HSD                109 - TEXACO SYSTEM 3 GAS ADDITIVE (TEXACO OWNS)
102 - LSD                ALL ASSOCIATED PIPING AND INJECTORS
103 - LSD                110 - GENERIC ADDITIVE - 8000 GALLON TANK
104 - PREMIUM 93         111 - TRANSMIX
105 - NOLEAD             112 - RED DYE ADDITIVE 2 - 500 GALLON TANKS
1 - 6 BUTANE             DROP OUT TANK FOR VCU
7 - PROPANE              PROPANE TANK FOR VCU (AMERIGAS OWNS)

EQUIPMENT

JOHN ZINK FLARE
MCGILL VAPOR RECOVERY UNIT - NOT OPERABLE
OIL-WATER SEPARATOR
KOEHLER FLASH TESTER
SOLARTRON
GRABNER RVP TESTER
2 WHEELED FIRE EXTINGUISHERS
PORTABLE FIRE EXTINGUISHERS
GUARDIAN 2 AUTOMATION SYSTEM COMPUTER 16" LINE FROM TEPPCO TO RECEIVING MANIFOLD
5 - 12" TWIN SEAL MANIFOLD VALVES 5 - 4" TWIN SEAL VALVES (MANUAL VALVES)
2 - 6" GAS AND DSL TRANSFER LINES THAT CONNECT THE NORTH AND SOUTH TERMINALS
1 - 3" BUTANE LINE THAT CONNECTS THE NORTH AND SOUTH TERMINALS
1 - 75 HP TRANSFER PUMP AND MOTOR

BUILDINGS

STORAGE BUILDING 5 X 5
CUT SHACK 10 X 8
OFFIC/WAREHOUSE 30 X 96
2 BAY LOADING RACK

SUPPLIES

CLEANING SUPPLIES AND TOILETRIES
VARIOUS OFFICE SUPPLIES


<PAGE>


INVENTORY LIST

TRANSMONTAIGNE TERMINALING - SOUTH TERMINAL

TANKAGE

501 - LSD                509 - TEXACO SYSTEM 3 GAS ADDITIVE (TEXACO OWNS)
502 - NOLEAD             ALL ASSOCIATED PIPING AND INJECTORS
503 - HSD                510 - GENERIC ADDITIVE 10,000 GALLON TANK
504 - LSD                511 - TEXACO PREM. DSL ADDITIVE (TEXACO OWNS)
505 - TRANSMIX           ALL ASSOCIATED PIPING AND INJECTORS
506 - PREMIUM 93         513 - RED DYE ADDITIVE
507 - TRANSMIX           010 - CHEVRON ENVIRONMENTAL RECOVERY (CHEVRON OWNS)
508 - NOLEAD             PROPANE TANK FOR VCU  (AMERIGAS OWNS)
                         DROP OUT TANK FOR VCU

<Table>
<S>                                                             <C>
EQUIPMENT                                                       TOOLS

16" LINE FROM TEPPCO TO RECEIVING MANIFOLD                      STOCK SUPPLY - NUTS, BOLTS, WASHERS AND FITTINGS
L2900 KUBOTA TRACTOR                                            ASSORTED SIZES OF WRENCHES AND PIPE WRENCHES
LAND PRIDE FINISH MOWER                                         VARIOUS SPARE PARTS
BUSHWACKER BUSH HOG                                             VARIOUS SHOVELS, RAKES AND BROOMS
2 HOMELITE WEEDEATERS
TSURUMI AC GENERATOR                                            SUPPLIES
SMALL PORTABLE PRESSURE WASHER
MUD PUMP                                                        CLEANING SUPPLIES AND TOILETRIES
BATTERY CHARGER                                                 VARIOUS OFFICE SUPPLIES
CAMPBELL HAUSFELD PORTABLE AIR COMPRESSOR
HEAVY DUTY DRILL PRESS                                          BUILDINGS
INGERSOL-RAND GRINDER
DIXIE CHOPPER 72" CUT                                           WAREHOUSE 30 X 60
2 COMPRESSOR UNIT MODEL# 30 CAV1OV                              WAREHOUSE, OFFICE WITH LOADING DOCK 60 X 120
PENSKY-MARTENS FLASH TESTER                                     WAREHOUSE/DRIVER BUILDING 32 X 16
VAPOR FREE SAMPLER                                              STORAGE SHED 10 X 8
GRABNER RVP TESTER                                              CUT SHACK 10 X 8 WITH VAPOR FREE SAMPLER
VARIOUS 2" - 8" PIPING                                          2 BAY LOADING RACK
4 WHEELED FIRE EXTINGUISHERS
32 PORTABLE FIRE EXTINGUISHERS
3 LONG TABLES AND CHAIRS
BUILT IN DESKS AND CABINETRY
1 DESK
1 CUBICLE
GUARDIAN 2 AUTOMATION SYSTEM COMPUTER
GUARDIAN 1 COMPUTER FOR LION INVENTORY AND METER READINGS
1 TANGET COMPUTER
1 CBT COMPUTER
MCGILL VRU - NOT IN SERVICE
JOHN ZINK VCU
1 - 50 HP TRANSFER PUMP AND MOTOR
</Table>


<PAGE>


NORTH TERMINAL

NORTH LITTLE ROCK, AR
EQUIPMENT LIST


<Table>
<Caption>
=====================================================================================================================
      EQUIPMENT VENDOR               EQUIPMENT DESCRIPTION                  MODEL NAME              MODEL #
=====================================================================================================================
<S>                          <C>                                           <C>                   <C>
Diamond                      Guardian/2 System                                  G2

---------------------------------------------------------------------------------------------------------------------
Smith/Prime                  N-87 Meter                                        Prime
---------------------------------------------------------------------------------------------------------------------
Smith/Prime                  89,91,93 Orem/Blend Meter                          N/A
---------------------------------------------------------------------------------------------------------------------
Smith/Prime                  N-87 Meter                                         N/A
---------------------------------------------------------------------------------------------------------------------
Smith/Prime                  LSD/RED Meter                                      N/A
---------------------------------------------------------------------------------------------------------------------
Smith/Prime                  LSD Meter                                          N/A
---------------------------------------------------------------------------------------------------------------------
Smith/PD                     HSD Meter                                          F4
---------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------
Smith                        N-87 Preset                                    Electronic          Accuload-RBM
---------------------------------------------------------------------------------------------------------------------
Smith                        89,91,93 Orem/Blend Preset                     Electronic          Accuload-RBM
---------------------------------------------------------------------------------------------------------------------
Smith                        N-87 Preset                                    Electronic          Accuload-RBM
---------------------------------------------------------------------------------------------------------------------
Smith                        LSD/RED Preset                                 Electronic          Accuload-RBM
---------------------------------------------------------------------------------------------------------------------
Smith                        LSD Preset                                     Electronic          Accuload-RBM
---------------------------------------------------------------------------------------------------------------------
Smith                        HSD Preset                                     Electronic          Accuload-RBM
---------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------
Temp. Probe                  N-87 Temp. Probe                                100 OHMS
---------------------------------------------------------------------------------------------------------------------
Temp. Probe                  89,91,93 Orem/Blend Temp. Probe                 100 OHMS
---------------------------------------------------------------------------------------------------------------------
Temp. Probe                  N-87 Temp. Probe                                100 OHMS
---------------------------------------------------------------------------------------------------------------------
Temp. Probe                  LSD/RED Temp. Probe                             100 OHMS
---------------------------------------------------------------------------------------------------------------------
Temp. Probe                  LSD Temp. Probe                                 100 OHMS
---------------------------------------------------------------------------------------------------------------------
Temp. Probe                  HSD Temp. Probe                                 100 OHMS
---------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------
Smith/Prime                  N-87 Meter                                        Prime
---------------------------------------------------------------------------------------------------------------------
Smith/Prime                  89,91,93 Orem/Blend Meter                          N/A
---------------------------------------------------------------------------------------------------------------------
Smith/Prime                  N-87 Meter                                         N/A
---------------------------------------------------------------------------------------------------------------------
Smith/Prime                  LSD/RED Meter                                      N/A
---------------------------------------------------------------------------------------------------------------------

<Caption>

====================================================================================
      EQUIPMENT VENDOR       VERSION #     SPECIFIC LOCATION
====================================================================================
<S>                          <C>           <C>
Diamond                        3.01        3222 Central Airport N. Little Rock, AR
                                           72117
------------------------------------------------------------------------------------
Smith/Prime                   size 4       Lane 1, Meter 1
------------------------------------------------------------------------------------
Smith/Prime                   size 4       Lane 1, Meter 2
------------------------------------------------------------------------------------
Smith/Prime                   size 4       Lane 1, Meter 3
------------------------------------------------------------------------------------
Smith/Prime                   size 4       Lane 1, Meter 4
------------------------------------------------------------------------------------
Smith/Prime                   size 4       Lane 1, Meter 5
------------------------------------------------------------------------------------
Smith/PD                      size 4       Lane 1, Meter 6
------------------------------------------------------------------------------------

------------------------------------------------------------------------------------
Smith                                      Lane 1, Meter 1
------------------------------------------------------------------------------------
Smith                                      Lane 1, Meter 2
------------------------------------------------------------------------------------
Smith                                      Lane 1, Meter 3
------------------------------------------------------------------------------------
Smith                                      Lane 1, Meter 4
------------------------------------------------------------------------------------
Smith                                      Lane 1, Meter 5
------------------------------------------------------------------------------------
Smith                                      Lane 1, Meter 6
------------------------------------------------------------------------------------

------------------------------------------------------------------------------------
Temp. Probe                                Lane 1, Meter 1,  Meter
------------------------------------------------------------------------------------
Temp. Probe                                Lane 1, Meter 2,  Meter
------------------------------------------------------------------------------------
Temp. Probe                                Lane 1, Meter 3,  Meter
------------------------------------------------------------------------------------
Temp. Probe                                Lane 1, Meter 4,  Meter
------------------------------------------------------------------------------------
Temp. Probe                                Lane 1, Meter 5,  Meter
------------------------------------------------------------------------------------
Temp. Probe                                Lane 1, Meter 6,  Meter
------------------------------------------------------------------------------------

------------------------------------------------------------------------------------
Smith/Prime                   size 4       Lane 2, Meter 1
------------------------------------------------------------------------------------
Smith/Prime                   size 4       Lane 2, Meter 2
------------------------------------------------------------------------------------
Smith/Prime                   size 4       Lane 2, Meter 3
------------------------------------------------------------------------------------
Smith/Prime                   size 4       Lane 2, Meter 4
------------------------------------------------------------------------------------
</Table>

North Terminal

NORTH LITTLE ROCK, AR
EQUIPMENT LIST



<PAGE>


<Table>
<Caption>
=========================================================================================================================
      EQUIPMENT VENDOR               EQUIPMENT DESCRIPTION                  MODEL NAME                   MODEL #
=========================================================================================================================
<S>                          <C>                                            <C>                 <C>
Smith/Prime                  LSD Meter                                          N/A
-------------------------------------------------------------------------------------------------------------------------
Smith/PD                     HSD Meter                                          F4
-------------------------------------------------------------------------------------------------------------------------
Smith                        N-87 Preset                                    Electronic          Accuload-RBM
-------------------------------------------------------------------------------------------------------------------------
Smith                        89,91,93 Orem/Blend Preset                     Electronic          Accuload-RBM
-------------------------------------------------------------------------------------------------------------------------
Smith                        N-87 Preset                                    Electronic          Accuload-RBM
-------------------------------------------------------------------------------------------------------------------------
Smith                        LSD/RED Preset                                 Electronic          Accuload-RBM
-------------------------------------------------------------------------------------------------------------------------
Smith                        LSD Preset                                     Electronic          Accuload-RBM
-------------------------------------------------------------------------------------------------------------------------
Smith                        HSD Preset                                     Electronic          Accuload-RBM
-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
Temp. Probe                  N-87 Temp. Probe                                100 OHMS
-------------------------------------------------------------------------------------------------------------------------
Temp. Probe                  89,91,93 Orem/Blend Temp. Probe                 100 OHMS
-------------------------------------------------------------------------------------------------------------------------
Temp. Probe                  N-87 Temp. Probe                                100 OHMS
-------------------------------------------------------------------------------------------------------------------------
Temp. Probe                  LSD/RED Temp. Probe                             100 OHMS
-------------------------------------------------------------------------------------------------------------------------
Temp. Probe                  LSD Temp. Probe                                 100 OHMS
-------------------------------------------------------------------------------------------------------------------------
Temp. Probe                  HSD Temp. Probe                                 100 OHMS
-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
ICM                          Additive Injector                            Texaco System 3       3110
-------------------------------------------------------------------------------------------------------------------------
ICM                          Additive Injector                           Chevron - OGA 402      3110
-------------------------------------------------------------------------------------------------------------------------
ICM                          Additive Injector                            Morton Red BD50       3110
-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
M&J Level Transmitter        Automatic Tank Gauge                           Butane Only
-------------------------------------------------------------------------------------------------------------------------

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

<Caption>

======================================================================
      EQUIPMENT VENDOR        VERSION #     SPECIFIC LOCATION
======================================================================
<S>                           <C>           <C>
Smith/Prime                    size 4       Lane 2, Meter 5
----------------------------------------------------------------------
Smith/PD                       size 4       Lane 2, Meter 6
----------------------------------------------------------------------
Smith                                       Lane 2, Meter 1
----------------------------------------------------------------------
Smith                                       Lane 2, Meter 2
----------------------------------------------------------------------
Smith                                       Lane 2, Meter 3
----------------------------------------------------------------------
Smith                                       Lane 2, Meter 4
----------------------------------------------------------------------
Smith                                       Lane 2, Meter 5
----------------------------------------------------------------------
Smith                                       Lane 2, Meter 6
----------------------------------------------------------------------

----------------------------------------------------------------------
Temp. Probe                                 Lane 2, Meter 1,  Meter
----------------------------------------------------------------------
Temp. Probe                                 Lane 2, Meter 2,  Meter
----------------------------------------------------------------------
Temp. Probe                                 Lane 2, Meter 3,  Meter
----------------------------------------------------------------------
Temp. Probe                                 Lane 2, Meter 4,  Meter
----------------------------------------------------------------------
Temp. Probe                                 Lane 2, Meter 5,  Meter
----------------------------------------------------------------------
Temp. Probe                                 Lane 2, Meter 6,  Meter
----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------
ICM
----------------------------------------------------------------------
ICM
----------------------------------------------------------------------
ICM
----------------------------------------------------------------------

----------------------------------------------------------------------
M&J Level Transmitter
======================================================================
</Table>


<PAGE>


North Terminal

NORTH LITTLE ROCK, AR
EQUIPMENT LIST

<Table>
<Caption>
===========================================================================================================================
      EQUIPMENT VENDOR                     Equipment Description                     MODEL NAME               MODEL #
===========================================================================================================================
<S>                          <C>                                                     <C>                  <C>
Tank Valves Motor Operated:  None
---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------
 N/A                         Tank 101 Rack Pump Motor, HSD                              25 hp
---------------------------------------------------------------------------------------------------------------------------
Siemens                      Tank 102 Rack Pump Motor, LSD                              50 hp
---------------------------------------------------------------------------------------------------------------------------
Siemens                      Tank 103 Rack Pump Motor, LSD                              50 hp
---------------------------------------------------------------------------------------------------------------------------
Siemens                      Tank 104 Rack Pump Motor, 93                               50 hp
---------------------------------------------------------------------------------------------------------------------------
US Electric                  Tank 105 Rack Pump Motor, 87                               40 hp
---------------------------------------------------------------------------------------------------------------------------
Baldor                       Tank 109 Rack Pump Motor, Tex Add                          2 hp
---------------------------------------------------------------------------------------------------------------------------
Baldor                       Tank 110 Rack Pump Motor, Gen Add                          2 hp
---------------------------------------------------------------------------------------------------------------------------
Baldor                       Tank 112 Rack Pump Motor, Red Dye                          2 hp
---------------------------------------------------------------------------------------------------------------------------
Siemens                      Tank 1 Rack Pump Motor, Butane                             30 hp
---------------------------------------------------------------------------------------------------------------------------
Siemens                      Tank 2 Rack Pump Motor, Butane                             20 hp
---------------------------------------------------------------------------------------------------------------------------
 N/A                         Tank 3 Rack Pump Motor, Butane
---------------------------------------------------------------------------------------------------------------------------
 N/A                         Tank 4 Rack Pump Motor, Butane
---------------------------------------------------------------------------------------------------------------------------
 N/A                         Tank 5 Rack Pump Motor, Butane
---------------------------------------------------------------------------------------------------------------------------
 N/A                         Tank 6 Rack Pump Motor, Butane
---------------------------------------------------------------------------------------------------------------------------
 N/A                         Tank 7 Rack Pump Motor, Butane
---------------------------------------------------------------------------------------------------------------------------
 N/A                         Tank 111 Rack Pump Motor, T-Mix
---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------
N/A                          Tank 101 Rack Pump , HSD
---------------------------------------------------------------------------------------------------------------------------
Gorman-Ruff                  Tank 102 Rack Pump , LSD                           Impeller Dia. 13 1/4
---------------------------------------------------------------------------------------------------------------------------
Allis- Chalmers              Tank 103 Rack Pump , LSD                             Impeller Dia. 13
---------------------------------------------------------------------------------------------------------------------------
Gorman-Ruff                  Tank 104 Rack Pump , 93                            Impeller Dia. 13 1/4
---------------------------------------------------------------------------------------------------------------------------
Goulds                       Tank 105 Rack Pump , 87                              Impeller Dia. 13
---------------------------------------------------------------------------------------------------------------------------
ASI AF483-T                  Tank 109 Rack Pump , Tex Add                      Impeller Dia. Mag Drive
---------------------------------------------------------------------------------------------------------------------------
ASI AF483-T                  Tank 110 Rack Pump , Gen Add                      Impeller Dia. Mag Drive
===========================================================================================================================
North Terminal
---------------------------------------------------------------------------------------------------------------------------
NORTH LITTLE ROCK, AR
---------------------------------------------------------------------------------------------------------------------------
EQUIPMENT LIST
---------------------------------------------------------------------------------------------------------------------------

<Caption>

====================================================================
      EQUIPMENT VENDOR       VERSION#          Specific Location
====================================================================
<S>                          <C>               <C>
Tank Valves Motor Operated:
--------------------------------------------------------------------

--------------------------------------------------------------------
 N/A                                           Tank 101
--------------------------------------------------------------------
Siemens                                        Tank 102
--------------------------------------------------------------------
Siemens                                        Tank 103
--------------------------------------------------------------------
Siemens                                        Tank 104
--------------------------------------------------------------------
US Electric                                    Tank 105
--------------------------------------------------------------------
Baldor                                         Tank 109
--------------------------------------------------------------------
Baldor                                         Tank 110
--------------------------------------------------------------------
Baldor                                         Tank 112
--------------------------------------------------------------------
Siemens                                        Tank 1
--------------------------------------------------------------------
Siemens                                        Tank 2
--------------------------------------------------------------------
 N/A                                           Tank 3
--------------------------------------------------------------------
 N/A                                           Tank 4
--------------------------------------------------------------------
 N/A                                           Tank 5
--------------------------------------------------------------------
 N/A                                           Tank 6
--------------------------------------------------------------------
 N/A                                           Tank 7
--------------------------------------------------------------------
 N/A                                           Tank 111
--------------------------------------------------------------------

--------------------------------------------------------------------
N/A                                            Tank 101
--------------------------------------------------------------------
Gorman-Ruff                                    Tank 102
--------------------------------------------------------------------
Allis- Chalmers                                Tank 103
--------------------------------------------------------------------
Gorman-Ruff                                    Tank 104
--------------------------------------------------------------------
Goulds                                         Tank 105
--------------------------------------------------------------------
ASI AF483-T                                    Tank 109
--------------------------------------------------------------------
ASI AF483-T                                    Tank 110
====================================================================
North Terminal
--------------------------------------------------------------------
NORTH LITTLE ROCK, AR
--------------------------------------------------------------------
EQUIPMENT LIST
--------------------------------------------------------------------
</Table>


<PAGE>


<Table>
<Caption>
=========================================================================================================================
      EQUIPMENT VENDOR                     Equipment Description                     MODEL NAME               MODEL #
=========================================================================================================================
<S>                          <C>                                               <C>                         <C>
ASI AF483-T                  Tank 112 Rack Pump , Red Dye                      Impeller Dia. Mag Drive
=========================================================================================================================
N/A                          Tank 5 Rack Pump , Butane
-------------------------------------------------------------------------------------------------------------------------
N/A                          Tank 6 Rack Pump , Butane
-------------------------------------------------------------------------------------------------------------------------
N/A                          Tank 7 Rack Pump , Butane
-------------------------------------------------------------------------------------------------------------------------
N/A                          Tank 111 Rack Pump , T-Mix
-------------------------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------------------------
Alarm                        Tank 1                                                    Butane
-------------------------------------------------------------------------------------------------------------------------
Alarm                        Tank 2                                                    Butane
-------------------------------------------------------------------------------------------------------------------------
Alarm                        Tank 3                                                    Butane
-------------------------------------------------------------------------------------------------------------------------
Alarm                        Tank 4                                                    Butane
-------------------------------------------------------------------------------------------------------------------------
Alarm                        Tank 5                                                    Butane
-------------------------------------------------------------------------------------------------------------------------
Alarm                        Tank 6                                                    Butane
-------------------------------------------------------------------------------------------------------------------------
Alarm                        Tank 7                                                    Butane
-------------------------------------------------------------------------------------------------------------------------
Canon                        Copier                                                    NP6016           NDF-13893
Canon                        Fax Machine                                                                CFX-L4000
CCTV                         4 Channel, color w/VHS recorder
Goulds                       North-to South Transfer pump                              3X4X10
Seimens                      North-to-South Transfer pump motor                         75hp
Allen Bradley                SLC 5/03; 13 slot rack                                   1747 L532
Allen Bradley                SLC 5/04; 10 slot rack                                   1747 L541
Allen Bradley                SCL 5/03; 13 slot rack                                   1747 L532
3Com                         Superstack II data hub                                    3C250L
=========================================================================================================================

<Caption>

======================================================================
      EQUIPMENT VENDOR           VERSION#          Specific Location
======================================================================
<S>                           <C>                  <C>
ASI AF483-T                                        Tank 112
======================================================================
N/A                                                Tank 5
----------------------------------------------------------------------
N/A                                                Tank 6
----------------------------------------------------------------------
N/A                                                Tank 7
----------------------------------------------------------------------
N/A                                                Tank 111
----------------------------------------------------------------------

----------------------------------------------------------------------
Alarm                        High Level Alarm      Tank 1
----------------------------------------------------------------------
Alarm                        High Level Alarm      Tank 2
----------------------------------------------------------------------
Alarm                        High Level Alarm      Tank 3
----------------------------------------------------------------------
Alarm                        High Level Alarm      Tank 4
----------------------------------------------------------------------
Alarm                        High Level Alarm      Tank 5
----------------------------------------------------------------------
Alarm                        High Level Alarm      Tank 6
----------------------------------------------------------------------
Alarm                        High Level Alarm      Tank 7
----------------------------------------------------------------------
Canon
Canon
CCTV
Goulds
Seimens
Allen Bradley
Allen Bradley
Allen Bradley
3Com
======================================================================
</Table>


<PAGE>


SOUTH TERMINAL

NORTH LITTLE ROCK, AR

EQUIPMENT LIST

<Table>
<Caption>
====================================================================================================
     EQUIPMENT VENDOR            EQUIPMENT DESCRIPTION            MODEL NAME            MODEL #
----------------------------------------------------------------------------------------------------
<S>                       <C>                                     <C>                <C>
Diamond                   Guardian/2 System                           G2

----------------------------------------------------------------------------------------------------
Brooks                    N87 Meter                                 Turbine
----------------------------------------------------------------------------------------------------
Brooks                    N89,91,93 Prem/Blend Meter                Turbine
----------------------------------------------------------------------------------------------------
Brooks                    N-87 Meter                                Turbine
----------------------------------------------------------------------------------------------------
Brooks                    LSD Meter                                 Turbine
----------------------------------------------------------------------------------------------------
Brooks                    LSD Meter                                 Turbine
----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------
Brooks                    N87 Preset                                  IMS
----------------------------------------------------------------------------------------------------
Brooks                    N89,91,93 Prem/Blend Preset                 IMS
----------------------------------------------------------------------------------------------------
Brooks                    N-87 Preset                                 IMS
----------------------------------------------------------------------------------------------------
Brooks                    LSD Preset                                  IMS
----------------------------------------------------------------------------------------------------
Brooks                    LSD Preset                                  IMS
----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------
Temp. Probe               N87 Temp. Probe                         RTD in Ohms
----------------------------------------------------------------------------------------------------
Temp. Probe               N89,91,93 Prem/Blend Temp. Probe        RTD in Ohms
----------------------------------------------------------------------------------------------------
Temp. Probe               N87 Temp. Probe                         RTD in Ohms
----------------------------------------------------------------------------------------------------
Temp. Probe               LSD Temp. Probe                         RTD in Ohms
----------------------------------------------------------------------------------------------------
Temp. Probe               LSD Temp. Probe                         RTD in Ohms
----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------
Brooks                    N87 Meter                                 Turbine
----------------------------------------------------------------------------------------------------
Brooks                    N89,91,93 Orem/Blend Meter                Turbine
----------------------------------------------------------------------------------------------------
Brooks                    N87 Meter                                 Turbine
----------------------------------------------------------------------------------------------------
Brooks                    LSD/RED Meter                             Turbine
----------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------
Brooks                    N87 Preset                                  IMS
----------------------------------------------------------------------------------------------------
Brooks                    N89,91,93 Orem/Blend Preset                 IMS
----------------------------------------------------------------------------------------------------
Brooks                    N87 Preset                                  IMS
====================================================================================================
SOUTH TERMINAL
----------------------------------------------------------------------------------------------------
NORTH LITTLE ROCK, AR
----------------------------------------------------------------------------------------------------
EQUIPMENT LIST
====================================================================================================

<Caption>

===============================================================================
     EQUIPMENT VENDOR     VERSION #  SPECIFIC LOCATION
-------------------------------------------------------------------------------
<S>                       <C>        <C>
Diamond                     3.01     2725 Central Airport N. Little Rock, AR
                                     72117
-------------------------------------------------------------------------------
Brooks                     size 4    Lane 1, Meter 1
-------------------------------------------------------------------------------
Brooks                     size 4    Lane 1, Meter 2
-------------------------------------------------------------------------------
Brooks                     size 4    Lane 1, Meter 3
-------------------------------------------------------------------------------
Brooks                     size 4    Lane 1, Meter 4
-------------------------------------------------------------------------------
Brooks                     size 4    Lane 1, Meter 5
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Brooks                               Lane 1, Meter 1
-------------------------------------------------------------------------------
Brooks                               Lane 1, Meter 2
-------------------------------------------------------------------------------
Brooks                               Lane 1, Meter 3
-------------------------------------------------------------------------------
Brooks                               Lane 1, Meter 4
-------------------------------------------------------------------------------
Brooks                               Lane 1, Meter 5
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Temp. Probe                          Lane 1, Meter 1,  Meter
-------------------------------------------------------------------------------
Temp. Probe                          Lane 1, Meter 2,  Meter
-------------------------------------------------------------------------------
Temp. Probe                          Lane 1, Meter 3,  Meter
-------------------------------------------------------------------------------
Temp. Probe                          Lane 1, Meter 4,  Meter
-------------------------------------------------------------------------------
Temp. Probe                          Lane 1, Meter 5,  Meter
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Brooks                     size 4    Lane 2, Meter 1
-------------------------------------------------------------------------------
Brooks                     size 4    Lane 2, Meter 2
-------------------------------------------------------------------------------
Brooks                     size 4    Lane 2, Meter 3
-------------------------------------------------------------------------------
Brooks                     size 4    Lane 2, Meter 4
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Brooks                               Lane 2, Meter 1
-------------------------------------------------------------------------------
Brooks                               Lane 2, Meter 2
-------------------------------------------------------------------------------
Brooks                               Lane 2, Meter 3
===============================================================================
SOUTH TERMINAL
-------------------------------------------------------------------------------
NORTH LITTLE ROCK, AR
-------------------------------------------------------------------------------
EQUIPMENT LIST
===============================================================================
</Table>


<PAGE>


<Table>
<Caption>
=======================================================================================================
     EQUIPMENT VENDOR            EQUIPMENT DESCRIPTION            MODEL NAME            MODEL #
=======================================================================================================
<S>                       <C>                                <C>                  <C>
Brooks                    LSD/RED Preset                              IMS
-------------------------------------------------------------------------------------------------------
Temp. Probe               N87 Temp. Probe                         RTD in Ohms
-------------------------------------------------------------------------------------------------------
Temp. Probe               N89,91,93 Orem/Blend Temp. Probe        RTD in Ohms
-------------------------------------------------------------------------------------------------------
Temp. Probe               N87 Temp. Probe                         RTD in Ohms
-------------------------------------------------------------------------------------------------------
Temp. Probe               LSD/RED Temp. Probe                     RTD in Ohms
-------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------------
Mini Pak                  Additive Injector                     Texaco System 3   Gate City
-------------------------------------------------------------------------------------------------------
Gatepak                   Additive Injector                    Chevron - OGA 402  Gate City EI2007-1
-------------------------------------------------------------------------------------------------------
Gatepak                   Additive Injector                     Texaco Red Dye    Gate City EI0755-1
-------------------------------------------------------------------------------------------------------
Blend-Pak                 Additive Injector                  Morton Red Dye BD-50 Gate City
=======================================================================================================

<Caption>

===============================================================================
     EQUIPMENT VENDOR     VERSION #  SPECIFIC LOCATION
===============================================================================
<S>                       <C>        <C>
Brooks                               Lane 2, Meter 4
-------------------------------------------------------------------------------
Temp. Probe                          Lane 2, Meter 1,  Meter
-------------------------------------------------------------------------------
Temp. Probe                          Lane 2, Meter 2,  Meter
-------------------------------------------------------------------------------
Temp. Probe                          Lane 2, Meter 3,  Meter
-------------------------------------------------------------------------------
Temp. Probe                          Lane 2, Meter 4,  Meter
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Mini Pak
-------------------------------------------------------------------------------
Gatepak
-------------------------------------------------------------------------------
Gatepak
-------------------------------------------------------------------------------
Blend-Pak
===============================================================================
</Table>


<PAGE>


SOUTH TERMINAL

NORTH LITTLE ROCK, AR

EQUIPMENT LIST CONT.

<Table>
<Caption>
==================================================================================================
     EQUIPMENT VENDOR            EQUIPMENT DESCRIPTION            MODEL NAME           MODEL #
==================================================================================================
<S>                       <C>                                     <C>               <C>
Automatic Tank Gauge:     No
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
Tank Valves Motor         Tanks 501-506: Receipt
Operated:
--------------------------------------------------------------------------------------------------
                          Tanks 507, 509, 510, 512, 513: none
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
GE                        Tank 501 Rack Pump Motor, N87              50 hp
--------------------------------------------------------------------------------------------------
GE                        Tank 502 Rack Pump Motor, N87              50 hp
--------------------------------------------------------------------------------------------------
Century                   Tank 503 Rack Pump Motor, LSD              40 hp
--------------------------------------------------------------------------------------------------
                          Tank 504 Rack Pump Motor, LSD
--------------------------------------------------------------------------------------------------
                          Tank 505 Rack Pump Motor, T-Mix
--------------------------------------------------------------------------------------------------
Siemens                   Tank 506 Rack Pump Motor, 93               40 hp
--------------------------------------------------------------------------------------------------
                          Tank 507 Rack Pump Motor, Offspec
--------------------------------------------------------------------------------------------------
Baldor                    Tank 509 Rack Pump Motor, Tex Add          2 hp
--------------------------------------------------------------------------------------------------
Baldor                    Tank 510 Rack Pump Motor, Gen Add          2 hp
--------------------------------------------------------------------------------------------------
Baldor                    Tank 512 Rack Pump Motor, Tex Red          2 hp
--------------------------------------------------------------------------------------------------
Baldor                    Tank 513 Rack Pump Motor, Red Dye          2 hp
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
Goulds                    Tank 501 Rack Pump , N87             Impeller Dia. 13
--------------------------------------------------------------------------------------------------
Goulds                    Tank 502 Rack Pump , N87             Impeller Dia. 13
--------------------------------------------------------------------------------------------------
Goulds                    Tank 503 Rack Pump , LSD             Impeller Dia. 13
--------------------------------------------------------------------------------------------------
                          Tank 504 Rack Pump , LSD
--------------------------------------------------------------------------------------------------
                          Tank 505 Rack Pump , T-Mix
--------------------------------------------------------------------------------------------------
Goulds                    Tank 506 Rack Pump , 93              Impeller Dia. 13
--------------------------------------------------------------------------------------------------
                          Tank 507 Rack Pump , Offspec
--------------------------------------------------------------------------------------------------
ASI A483-T                Tank 509 Rack Pump , Tex Add
--------------------------------------------------------------------------------------------------
ASI A483-T                Tank 510 Rack Pump , Gen Add
--------------------------------------------------------------------------------------------------

<Caption>

=================================================================================
     EQUIPMENT VENDOR     VERSION #                SPECIFIC LOCATION
=================================================================================
<S>                       <C>           <C>
Automatic Tank Gauge:
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
Tank Valves Motor
Operated:
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
GE                                     Tank 501
---------------------------------------------------------------------------------
GE                                     Tank 502
---------------------------------------------------------------------------------
Century                                Tank 503
---------------------------------------------------------------------------------
                                       Tank 504
---------------------------------------------------------------------------------
                                       Tank 505
---------------------------------------------------------------------------------
Siemens                                Tank 506
---------------------------------------------------------------------------------
                                       Tank 507
---------------------------------------------------------------------------------
Baldor                                 Tank 509
---------------------------------------------------------------------------------
Baldor                                 Tank 510
---------------------------------------------------------------------------------
Baldor                                 Tank 512
---------------------------------------------------------------------------------
Baldor                                 Tank 513
---------------------------------------------------------------------------------

---------------------------------------------------------------------------------
Goulds                                 Tank 501
---------------------------------------------------------------------------------
Goulds                                 Tank 502
---------------------------------------------------------------------------------
Goulds                                 Tank 503
---------------------------------------------------------------------------------
                                       Tank 504
---------------------------------------------------------------------------------
                                       Tank 505
---------------------------------------------------------------------------------
Goulds                                 Tank 506
---------------------------------------------------------------------------------
                                       Tank 507
---------------------------------------------------------------------------------
ASI A483-T                             Tank 509
---------------------------------------------------------------------------------
ASI A483-T                             Tank 510
---------------------------------------------------------------------------------
</Table>


<PAGE>


SOUTH TERMINAL

NORTH LITTLE ROCK, AR

EQUIPMENT LIST

<Table>
<Caption>
====================================================================================================
     EQUIPMENT VENDOR            EQUIPMENT DESCRIPTION            MODEL NAME           MODEL #
----------------------------------------------------------------------------------------------------
<S>                       <C>                                  <C>                <C>
ASI A483-T                Tank 512 Rack Pump , Tex Red
----------------------------------------------------------------------------------------------------
ASI A483-T                Tank 513 Rack Pump , Red Dye
----------------------------------------------------------------------------------------------------
Canon                     Copier                                    NP2120
----------------------------------------------------------------------------------------------------
Canon                     Fax Machine                              CFX-L4000
----------------------------------------------------------------------------------------------------
Tangent                   CPU                                    Pentium Based
----------------------------------------------------------------------------------------------------
Allen Bradley             SLC 5/03: 7 Slot rack                    1747 L532
----------------------------------------------------------------------------------------------------
Allen Bradley             PanelView 600                                           2711-K6C3L1
----------------------------------------------------------------------------------------------------
Allen Bradley             PanelView 900                                           2711-L9A3
----------------------------------------------------------------------------------------------------
Allen Bradley             SLC 5/01;7 slot rack
----------------------------------------------------------------------------------------------------
3Com                      Superstack ll data hub                                  3C250L
----------------------------------------------------------------------------------------------------
Xerox                     Copier                                                  PA-1
----------------------------------------------------------------------------------------------------
Hewlet Packard            CPU                                     Vectra; 486
----------------------------------------------------------------------------------------------------
CCTV                      4 channel, color w/VHS recorder
----------------------------------------------------------------------------------------------------
Goulds                    Tank 508E Rack pump                       4X6X13
----------------------------------------------------------------------------------------------------
Goulds                    Tank 508W Rack pump                       4X6X13
----------------------------------------------------------------------------------------------------
U.S. Electric Motors      Tank 508W Rack pump motor                  60 hp
----------------------------------------------------------------------------------------------------
U.S. Electric Motors      Tank 508E Rack pump motor                  60 hp
----------------------------------------------------------------------------------------------------
Goulds                    South-to-North transfer pump              4X6X13
----------------------------------------------------------------------------------------------------
G.E.                      South-to-North transfer pump motor         60 hp
Hi Tech                   Electronic Sign                                         WO1511
====================================================================================================

<Caption>

=================================================================================
     EQUIPMENT VENDOR     VERSION #                SPECIFIC LOCATION
---------------------------------------------------------------------------------
<S>                       <C>          <C>
ASI A483-T                             Tank 512
---------------------------------------------------------------------------------
ASI A483-T                             Tank 513
---------------------------------------------------------------------------------
Canon
---------------------------------------------------------------------------------
Canon
---------------------------------------------------------------------------------
Tangent
---------------------------------------------------------------------------------
Allen Bradley
---------------------------------------------------------------------------------
Allen Bradley
---------------------------------------------------------------------------------
Allen Bradley
---------------------------------------------------------------------------------
Allen Bradley
---------------------------------------------------------------------------------
3Com
---------------------------------------------------------------------------------
Xerox
---------------------------------------------------------------------------------
Hewlet Packard
---------------------------------------------------------------------------------
CCTV
---------------------------------------------------------------------------------
Goulds
---------------------------------------------------------------------------------
Goulds
---------------------------------------------------------------------------------
U.S. Electric Motors
---------------------------------------------------------------------------------
U.S. Electric Motors
---------------------------------------------------------------------------------
Goulds
---------------------------------------------------------------------------------
G.E.
Hi Tech
=================================================================================
</Table>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>12
<FILENAME>d94597ex21.txt
<DESCRIPTION>SUBSIDIARIES OF THE COMPANY
<TEXT>
<PAGE>
                                                                      EXHIBIT 21


                  LIST OF SUBSIDIARIES AS OF DECEMBER 31, 2001


Williams GP LLC, a Delaware limited liability company, and general partner of
Registrant

Williams Energy Partners L.P., a Delaware limited partnership

Williams OLP, L.P., a Delaware limited partnership

Williams NGL, LLC, a Delaware limited liability company

Williams Terminals Holdings, L.P., a Delaware limited partnership

Williams Pipelines Holdings, L.P., a Delaware limited partnership

Williams Ammonia Pipeline, L.P., a Delaware limited partnership

Williams Fractionation Holdings, L.P., a Delaware limited partnership



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>13
<FILENAME>d94597ex23-1.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG LLP
<TEXT>
<PAGE>
                                                                   EXHIBIT 23.1


                         Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Williams Energy Partners Long-Term Incentive Plan of our
report dated March 4, 2002, with respect to the consolidated financial
statements of Williams Energy Partners L.P. and of our report dated March 4,
2002, with respect to the consolidated balance sheet of Williams GP LLC included
in the Annual Report (Form 10-K) for the year ended December 31, 2001.

                                                   Ernst & Young LLP

Tulsa, Oklahoma
March 4, 2002

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>14
<FILENAME>d94597ex24.txt
<DESCRIPTION>POWER OF ATTORNEY
<TEXT>
<PAGE>


                                                                      EXHIBIT 24
                                 WILLIAMS GP LLC

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS that each of the undersigned individuals, in
their capacity as a director or officer, or both, as hereinafter set forth below
their signature, of WILLIAMS GP LLC, a Delaware limited liability company, as
general partner of Williams Energy Partners L.P. (Williams GP), does hereby
constitute and appoint CRAIG R. RICH AND SUZANNE H. COSTIN their true and lawful
attorneys and each of them (with full power to act without the other) their true
and lawful attorneys for them and in their name and in their capacity as a
director or officer, or both, of Williams GP, as hereinafter set forth below
their signature, to sign Williams Energy Partners L.P.'s Annual Report to the
Securities and Exchange Commission on Form 10-K for the fiscal year ended
December 31, 2001, and any and all amendments thereto or all instruments
necessary or incidental in connection therewith; and

THAT the undersigned Williams GP does hereby constitute and appoint CRAIG R.
RICH AND SUZANNE H. COSTIN its true and lawful attorneys and each of them (with
full power to act without the other) its true and lawful attorney for it and in
its name and on its behalf to sign said Form 10-K and any and all amendments
thereto and any and all instruments necessary or incidental in connection
therewith.

Each of said attorneys shall have full power of substitution and resubstitution,
and said attorneys or any of them or any substitute appointed by any of them
hereunder shall have full power and authority to do and perform in the name and
on behalf of each of the undersigned, in any and all capacities, every act
whatsoever requisite or necessary to be done in the premises, as fully to all
intents and purposes as each of the undersigned might or could do in person, the
undersigned hereby ratifying and approving the acts of said attorneys or any of
them or of any such substitute pursuant hereto.

IN WITNESS WHEREOF, the undersigned have executed this instrument, all as of the
22 day of January, 2002.



 /s/ Steven J. Malcolm                            /s/ Phillip D. Wright
--------------------------------------           -------------------------------
         Steven J. Malcolm                            Phillip D. Wright
Chairman of the Board, Chief Executive           President, Chief Operating
       Officer and Director                         Officer and Director
   (Principal Executive Officer)


 /s/ Don R. Wellendorf                            /s/ Keith E. Bailey
--------------------------------------           -------------------------------
         Don R. Wellendorf                            Keith E. Bailey
   Senior Vice President, Chief                           Director
  Financial Officer, Treasurer
          and Director
    (Principal Financial and
       Accounting Officer)


 /s/ William A. Bruckmann, III                    /s/ Don J. Gunther
--------------------------------------           -------------------------------
     William A. Bruckmann, III                           Don J. Gunther
    Director of Williams GP LLC,                   Director of Williams GP LLC,
 General Partner of Williams Energy                General Partner of Williams
           Partners L.P.                               Energy Partners L.P.


 /s/ William W. Hanna
--------------------------------------
          William W. Hanna
    Director of Williams GP LLC,
 General Partner of Williams Energy
           Partners L.P.


WILLIAMS GP LLC, as General Partner of Williams Energy Partners L.P.

<PAGE>


 /s/ Don R. Wellendorf
----------------------------------
     Don R. Wellendorf
Senior Vice President, Chief
Financial Officer, Treasurer
       and Director
 (Principal Financial and
    Accounting Officer)


ATTEST:


 /s/ Suzanne H. Costin
-----------------------
     Suzanne H. Costin
        Secretary


                                 WILLIAMS GP LLC

I, the undersigned, Suzanne H. Costin, Secretary of WILLIAMS GP LLC, a Delaware
limited liability company, as general partner of Williams Energy Partners L.P.
(hereinafter called the Company), do hereby certify that, pursuant to the
Limited Liability Company Act of the General Corporation Law of Delaware, the
members of the Board of Directors of the Company unanimously consented, as of
January 22, 2002, to the following:

RESOLVED that, the Chairman of the Board, the President or any Vice President of
the Company be, and each of them hereby is, authorized and empowered to execute
a Power of Attorney for use in connection with the execution and filing, for and
on behalf of the Company as General Partner of Williams Energy Partners L.P.,
under the Securities Exchange Act of 1934, of the Annual Report on Form 10-K for
the fiscal year ended December 31, 2001, for Williams Energy Partners L.P.

I further certify that the foregoing resolution has not been modified, revoked
or rescinded and is in full force and effect.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal
of WILLIAMS GP LLC this 5 day of March, 2002.


 /s/ Suzanne H. Costin
----------------------
     Suzanne H. Costin
        Secretary


[CORPORATE SEAL]

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>15
<FILENAME>d94597ex99.txt
<DESCRIPTION>WILLIAMS GP LLC'S BALANCE SHEET OF DECEMBER 2001
<TEXT>
<PAGE>
                                                                      EXHIBIT 99


                         REPORT OF INDEPENDENT AUDITORS


The Board of Directors
Williams GP LLC

         We have audited the accompanying consolidated balance sheet of Williams
GP LLC as of December 31, 2001. The consolidated balance sheet is the
responsibility of the Company's management. Our responsibility is to express an
opinion on the consolidated balance sheet based on our audit.

         We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated balance
sheet is free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the balance sheet. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall balance sheet
presentation. We believe that our audit of the consolidated balance sheet
provides a reasonable basis for our opinion.

         In our opinion, the consolidated balance sheet referred to above
presents fairly, in all material respects, the financial position of Williams GP
LLC at December 31, 2001, in conformity with accounting principles generally
accepted in the United States.




                                               ERNST & YOUNG LLP



Tulsa, Oklahoma
March 4, 2002



<PAGE>

                                 WILLIAMS GP LLC
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2001
                                 (IN THOUSANDS)

<Table>
<S>                                                                                       <C>
                                               ASSETS
     Current assets:
        Cash and cash equivalents ...................................................     $   13,831
        Accounts receivable (less allowance for doubtful accounts - $285)............         13,822
        Affiliate accounts receivable ...............................................          2,874
        Prepaid insurance ...........................................................            756
        Other current assets ........................................................            620
                                                                                          ----------
          Total current assets ......................................................         31,903
     Property, plant and equipment, at cost .........................................        380,706
     Less: accumulated depreciation .................................................         51,326
                                                                                          ----------
          Net property, plant and equipment .........................................        329,380
     Goodwill (less amortization of $145) ...........................................         22,282
     Other intangibles (less amortization of $310) ..................................          2,639
     Long-term affiliate receivable .................................................          4,459
     Long-term receivable ...........................................................          8,809
     Other noncurrent assets ........................................................          1,079
                                                                                          ----------
        Total assets ................................................................     $  400,551
                                                                                          ==========

                                     LIABILITIES AND OWNERS' EQUITY
     Current liabilities:
        Accounts payable ............................................................     $    5,907
        Affiliate accounts payable ..................................................         14,451
        Accrued affiliate payroll and benefits ......................................          1,518
        Accrued taxes other than income .............................................          2,314
        Accrued interest ............................................................            277
        Environmental liabilities ...................................................            905
        Acquisition payable .........................................................          8,854
        Other current liabilities ...................................................          1,535
                                                                                          ----------
          Total current liabilities .................................................         35,761
     Long-term debt .................................................................        139,500
     Long-term affiliate payable ....................................................          1,262
     Other deferred liabilities .....................................................          2,082
     Environmental liabilities ......................................................          4,479
     Minority interest ..............................................................         90,242
     Commitments and contingencies
     Owners' equity .................................................................        127,225
                                                                                          ----------
        Total liabilities and owners' equity ........................................     $  400,551
                                                                                          ==========
</Table>


                             See accompanying notes.



                                       2
<PAGE>

                                 WILLIAMS GP LLC
                     NOTES TO THE CONSOLIDATED BALANCE SHEET


1.   ORGANIZATION AND PRESENTATION

     Williams Energy Partners L.P. (the "Partnership") is a Delaware limited
partnership that was formed in August 2000, to acquire, own and operate: (a)
selected petroleum product terminals owned by Williams Energy Ventures, Inc.
("WEV"), and (b) an ammonia pipeline and terminals system, Williams Ammonia
Pipeline, Inc., ("WAPI"), owned by Williams Natural Gas Liquids, Inc. ("WNGL").
Prior to the closing of the Partnership's initial public offering ("IPO") in
February 2001, WEV was owned by Williams Energy Services, LLC ("WES"). Both WES
and WNGL are wholly-owned subsidiaries of The Williams Companies, Inc.
("Williams"). Williams GP LLC (the "Managing GP" or "General Partner"), a
Delaware limited liability company, was also formed in August 2000, to serve as
managing general partner for the Partnership.

     On February 9, 2001, the Partnership completed its IPO of 4,000,000 common
units representing limited partner interests in the Partnership at a price of
$21.50 per unit. The proceeds of $86.0 million were used to pay underwriter
commissions of $5.6 million and legal, professional fees and costs associated
with the IPO of $3.1 million, with the remainder used to reduce affiliate note
balances with Williams.

     On October 28, 2000, the Partnership and the Managing GP formed a limited
operating partnership named Williams OLP, L.P. ("OLP") to serve as limited
partner of the operating limited partnerships. Concurrent with the closing of
the IPO and pursuant to the Contribution and Conveyance Agreement dated February
9, 2001, WEV converted itself into Williams Terminals Holdings, L.P. ("WTH LP").
Williams Pipeline Holdings, LLC, a subsidiary of WTH LP, converted itself into
Williams Pipeline Holdings, LP ("WPH LP") and Williams Ammonia Pipeline, Inc.
converted itself into Williams Ammonia Pipeline, L.P. ("WAP LP"). All three
converted entities are Delaware limited partnerships. WNGL contributed 3.05
percent of its ownership in WAP LP and WES contributed 2.05 percent of its
ownership in WTH LP to the Managing GP in exchange for 19.2 percent and 80.8
percent ownership interest in the Managing GP, respectively. WNGL contributed
the remainder of its interest in WAP LP to the OLP and WES contributed the
remainder of its interest in WTH LP and all of its interest in WPH LP to the OLP
in exchange for ownership interests in the OLP. The Managing GP contributed all
of its interest in WAP LP, WTH LP and WPH LP in exchange for: (a) a 1.0 percent
managing general partner interest in the Partnership and (b) a 1.0101 percent
managing general partner interest in the OLP. WNGL contributed to the
Partnership all of its limited partner interest in OLP in exchange for 322,501
common units and 1,090,501 subordinated units, and WES contributed all of its
limited partner interest in OLP to the Partnership in exchange for 1,357,193
common units and 4,589,193 subordinated units.

     Subsequent to the IPO, the underwriters exercised their over-allotment
option and purchased 600,000 common units, also at a price of $21.50 per unit.
The net proceeds of $12.1 million, after underwriter commissions of $0.8
million, from this over-allotment option were used to redeem 600,000 of the
common inits held by WES to reimburse it for capital expenditures related to the
Partnership's assets. Upon completion of this transaction, Williams owned 60
percent of the equity units of the Partnership. The Partnership maintained the
historical costs of the net assets received under the Contribution Agreement.
Following the exercise of the underwriters over-allotment, 40.09 percent of the
Partnership is owned by the public and 59.91 percent, including the general
partners ownership, is owned by affiliates of Williams Energy Partners L.P.

      On February 26, 2002, the Partnership formed a wholly-owned Delaware
corporation named Williams GP Inc. ("GP Inc.") The Partnership then contributed
a 0.001 percent limited partner interest in OLP to GP Inc. as a capital
contribution. The OLP agreement was then amended to convert GP Inc.'s OLP
limited partner interest to a general partner interest and to convert the
General Partner's existing interest to a limited partner interest. The General
Partner then contributed its 1.0101 percent OLP limited partner interest to the
Partnership in exchange for an additional 1.0 percent general partner interest
in the Partnership.

     The resulting structure is as follows: Williams GP LLC serves as the
managing general partner for the Partnership. OLP is the limited partner of the
operating limited partnerships and GP Inc. serves as its general partner. The
operating limited partnerships are comprised of WTH LP, WPH LP and WAP LP.
Williams NGL



                                       3
<PAGE>
                                Williams GP LLC
             Notes To The Consolidated Balance Sheets - (continued)


LLC was established to serve as general partner of the operating limited
partnerships and is owned by OLP. Under the resulting structure, the limited
partners' liability in each of the limited partnerships is limited to their
investment.

2.   DESCRIPTION OF BUSINESSES

     Williams GP LLC serves as managing general partner for the Partnership. The
Partnership owns and operates certain petroleum product terminal operations and
an interstate common carrier ammonia pipeline.

   PETROLEUM PRODUCT TERMINALS

     Most of the General Partner's 30 petroleum product terminals are
strategically located along or near third party pipelines or petroleum
refineries. The terminal network consists of marine terminals and inland
terminals. The petroleum product terminals provide a variety of services such as
distribution, storage, blending, inventory management and additive injection to
a diverse customer group including governmental customers and end-users in the
downstream refining, retail, commercial trading, industrial and petrochemical
industries. Products stored in and distributed through the petroleum product
terminal network include refined petroleum products, blendstocks and heavy oils
and feedstocks. The inland terminals are located primarily in the southeastern
United States. Four marine terminal facilities are located along the Gulf Coast
and one marine terminal facility is located in Connecticut near the New York
harbor. Other than at our Galena Park marine terminal facility, none of the
employees assigned to the petroleum product terminal operations are covered by
collective bargaining agreements. The employees at the Galena Park marine
terminal facility are currently represented by a union, but have indicated their
unanimous desire to terminate their union affiliation. Nevertheless, the
National Labor Relations Board has ordered the Partnership to bargain with the
union as the exclusive collective bargaining representative of the employees at
the facility. The Partnership is appealing this decision.

   AMMONIA PIPELINE AND TERMINALS SYSTEM

     The ammonia pipeline and terminals system consists of an ammonia pipeline
and six company-owned terminals. Shipments on the pipeline primarily originate
from ammonia production plants located in Borger, Texas and Enid and Verdigris,
Oklahoma for transport to terminals throughout the Midwest for ultimate
distribution to end-users in Iowa, Kansas, Minnesota, Missouri, Nebraska,
Oklahoma and South Dakota. The ammonia transported through the system is used
primarily as nitrogen fertilizer. Approximately 94 percent of ammonia system
revenues are generated from transportation tariffs received from three
customers, who are obligated under "ship or pay" contracts to ship an aggregate
minimum of 700,000 tons per year but have historically shipped an amount in
excess of the required minimum. The current ammonia transportation contracts
extend through June 2005. The tariffs charged by the interstate ammonia pipeline
are regulated by the Surface Transportation Board of the U.S. Department of
Transportation.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   BASIS OF PRESENTATION

     The General Partner has an effective ownership in the Partnership of 59.9
percent. This effective ownership is derived through its 2.0 percent general
partnership ownership, which gives it control of the partnership, and its
affiliates who own 57.9 percent of the Partnership. The Partnership is fully
consolidated in Williams GP LLC's balance sheet.

     The petroleum product terminal operations consist of 30 independent
petroleum product terminal facilities and associated storage, located across 12
states primarily in the South, Southeast and Gulf Coast areas of the United
States. For 11 of these petroleum product terminals, Williams Energy Partners
L.P. owns varying undivided ownership interests. From inception, ownership of
these assets has been structured as an ownership of an undivided interest in
assets, not as an ownership interest in a partnership, limited liability
company, joint venture or other form of entity. Marketing and invoicing are
controlled separately by each owner, and each owner is responsible for any loss,
damage or injury that may occur to their own customers. As a result, Williams
Energy Partners L.P. applies proportionate consolidation for their interests in
these assets. All of the remaining terminal facilities and the ammonia pipeline
are wholly-owned subsidiaries and are fully consolidated.



                                       4
<PAGE>
                                Williams GP LLC
             Notes To The Consolidated Balance Sheets - (continued)


   USE OF ESTIMATES

     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.

   CASH EQUIVALENTS

     Cash and cash equivalents include demand and time deposits and other
marketable securities with maturities of three months or less when acquired.

   PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment are stated at cost. Expenditures for
maintenance and repairs are charged to operations in the period incurred. The
costs of property, plant and equipment sold or retired and the related
accumulated depreciation is removed from the accounts, and any associated gains
or losses are recorded in the income statement, in the period of sale or
disposition. Depreciation of property, plant and equipment is provided on the
straight-line basis.

   GOODWILL AND OTHER INTANGIBLE ASSETS

     Goodwill, which represents the excess of cost over fair value of assets of
businesses acquired, was amortized on a straight-line basis over a period of 20
years for those assets acquired prior to July 1, 2001. Other intangible assets
are amortized on a straight-line basis over a period of up to 25 years.

   IMPAIRMENT OF LONG-LIVED ASSETS

     The General Partner evaluates its long-lived assets of identifiable
business activities for impairment when events or changes in circumstances
indicate, in management's judgment, that the carrying value of such assets may
not be recoverable. The determination of whether an impairment has occurred is
based on management's estimate of undiscounted future cash flows attributable to
the assets as compared to the carrying value of the assets. If an impairment has
occurred, the amount of the impairment recognized is determined by estimating
the fair value for the assets and recording a provision for loss if the carrying
value is greater than fair value.

     For assets identified to be disposed of in the future, the carrying value
of these assets is compared to the estimated fair value less the cost to sell to
determine if an impairment is required. Until the assets are disposed of, an
estimate of the fair value is redetermined when related events or circumstances
change.

   INCOME TAXES

     Williams GP LLC is a partnership for income tax purposes and therefore is
not subject to federal or state income taxes. Income taxes for Williams GP LLC
are the responsibility of the owners of this partnership, which are affiliates
of Williams GP LLC. Prior to February 9, 2001, Williams Energy Partners L.P.'s
operations were included in Williams' consolidated federal income tax return.
Williams Energy Partners L.P. income tax provisions were computed as though
separate returns were filed. Deferred income taxes were computed using the
liability method and were provided on all temporary differences between the
financial basis and tax basis of Williams Energy Partners L.P.'s assets and
liabilities.

     Effective with the closing of Williams Energy Partners L.P.'s initial
public offering on February 9, 2001 (See Note 1), the Partnership is not a
taxable entity for federal and state income tax purposes. Accordingly, no
recognition has been given to income taxes for financial reporting purposes. The
tax on Partnership net income is borne by the individual partners through the
allocation of taxable income. Net income for financial statement purposes may
differ significantly from taxable income of unitholders as result of differences
between the tax basis and financial reporting basis of assets and liabilities
and the taxable income allocation requirements under the Partnership Agreement.
The aggregate difference in the basis of the Partnership's net assets for
financial and tax reporting purposes cannot be readily determined because
information regarding each partner's tax attributes in the Partnership is not
available to the partnership.



                                       5
<PAGE>
                                Williams GP LLC
             Notes To The Consolidated Balance Sheets - (continued)


   EMPLOYEE STOCK-BASED AWARDS

     Williams' employee stock-based awards are accounted for under provisions of
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations. Williams' fixed plan common stock
options do not result in compensation expense because the exercise price of the
stock options equals the market price of the underlying stock on the date of
grant.

     The General Partner has issued incentive awards to Williams' employees
assigned to the Partnership. These awards are also accounted for under
provisions of Accounting Principles Board Opinion No. 25. Since the exercise
price of the unit awards is less than the market price of the underlying units
on the date of grant, compensation expense is recognized by the General Partner
and directly allocated to the Partnership.

   ENVIRONMENTAL

     Environmental expenditures that relate to current or future revenues are
expensed or capitalized based upon the nature of the expenditures. Expenditures
that relate to an existing condition caused by past operations that do not
contribute to current or future revenue generation are expensed. Environmental
liabilities are recorded independently of any potential claim for recovery.
Receivables are recognized in cases where the realization of reimbursements of
remediation costs are considered probable. Accruals related to environmental
matters are generally determined based on site-specific plans for remediation,
taking into account prior remediation experience of the General Partner and
Williams.

   RECENT ACCOUNTING STANDARDS

     In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." This Statement supersedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of" and amends 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 Statement retains the basic framework of SFAS No.
121, resolves certain implementation issues of SFAS No. 121, extends
applicability to discontinued operations and broadens the presentation of
discontinued operations to include a component of an entity. The Statement is to
be applied prospectively and is effective for financial statements issued for
fiscal years beginning after December 15, 2001. The Statement is not expected to
have any initial impact on the General Partner's results of operations or
financial position.

     In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs and amends FASB Statement No.
19, "Financial Accounting and Reporting by Oil and Gas Producing Companies." The
Statement requires that the fair value of a liability for an asset retirement
obligation be recognized in the period in which it is incurred if a reasonable
estimate of fair value can be made and that the associated asset retirement
costs be capitalized as part of the carrying amount of the long-lived asset. The
Statement is effective for financial statements issued for fiscal years
beginning after June 15, 2002. The Partnership plans to adopt this standard in
January 2003, and we are evaluating its effect on the General Partner's results
of operations and financial position.

     In June 2001, the FASB issued SFAS No. 141, "Business Combinations" and
SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 establishes
accounting and reporting standards for business combinations and requires all
business combinations to be accounted for by the purchase method. The Statement
is effective for all business combinations for which the date of acquisition is
July 1, 2001 or later. SFAS No. 142 addresses accounting and reporting standards
for goodwill and other intangible assets. Under this Statement, goodwill and
intangible assets with indefinite useful lives will no longer be amortized, but
will be tested annually for impairment. The Statement becomes effective for all
fiscal years beginning after December 15, 2001. The General Partner will apply
the new rules on accounting for goodwill and other intangible assets beginning
January 1, 2002. Based on the amount of goodwill recorded as of December 31,
2001 application of the non-amortization provision of the Statement will result
in a decrease to amortization expense in future years of approximately $1.1
million.



                                       6
<PAGE>
                                Williams GP LLC
             Notes To The Consolidated Balance Sheets - (continued)


     In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This was followed in June 2000 by the
issuance of SFAS No. 138, "Accounting for Certain Derivative Instruments and
Certain Hedging Activities," which amends SFAS No. 133. SFAS No. 133 and No. 138
establish accounting and reporting standards for derivative financial
instruments. The standards require that all derivative financial instruments be
recorded on the balance sheet at their fair value. Changes in fair value of
derivatives will be recorded each period in earnings if the derivative is not a
hedge. If a derivative qualifies for special hedge accounting, changes in the
fair value of the derivative will either be recognized in earnings as an offset
against the change in fair value of the hedged assets, liabilities or firm
commitments also recognized in earnings, or the changes in fair value will be
deferred on the balance sheet until the hedged item is recognized in earnings.
The ineffective portion of a derivative's change in fair value will be
recognized immediately in earnings. These standards were adopted on January 1,
2001. There was no impact to the General Partner's financial position, results
of operations or cash flows from adopting these standards.

     The FASB issued SFAS No. 140, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." The Statement provides
guidance for determining whether a transfer of financial assets should be
accounted for as a sale or a secured borrowing and whether a liability has been
extinguished. The Statement is effective for recognition and reclassification of
collateral and for disclosures ending after December 15, 2000. The Statement
became effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after March 31, 2001. The initial
application of SFAS No. 140 had no impact on the General Partner's results of
operations and financial position.

4.   ACQUISITIONS AND DIVESTITURES

     Petroleum product terminal facilities and partial ownership interests in
several petroleum product terminals were acquired for cash during the periods
presented and are described below. All acquisitions, except the Aux Sable
transaction, were accounted for as purchases of businesses and the results of
operations of the acquired petroleum product terminals are included with the
combined results of operations from their acquisition dates.

     On December 31, 2001, the Partnership purchased an 8.5-mile, 8-inch natural
gas liquids pipeline in northeastern Illinois from Aux Sable Liquid Products
L.P. ("Aux Sable") for $8.9 million. The Partnership then entered into a
long-term lease arrangement under which Aux Sable is the sole lessee of these
assets. The Partnership has accounted for this transaction as a capital lease.
The lease expires in December 2016 and has a purchase option after the first
year. The minimum lease payments to be made by Aux Sable are $19.2 million in
total and $1.3 million per year over each of the next five years. Aux Sable has
the right to re-acquire the pipeline at the end of the lease for a de minimis
amount. The fair value of the lease at December 31, 2001, approximates its
carrying value.

     In October 2001, the Partnership acquired the crude oil storage and
distribution assets of Geonet Gathering, Inc. ("Geonet") located in Gibson,
Louisiana. The Partnership acquired these assets with the intent to use the
facility as a crude storage and distribution facility with an affiliate company
as its primary customer. The purchase price was approximately $21.1 million,
consisting of $20.3 million in cash and $0.9 million in assumed liabilities. The
purchase price and allocation to assets acquired and liabilities assumed was as
follows (in thousands):

<Table>
<S>                                                       <C>
     Purchase price:
         Cash paid, including transaction costs .....     $   20,261
         Liabilities assumed ........................            856
                                                          ----------
         Total purchase price .......................     $   21,117
                                                          ==========

     Allocation of purchase price:
         Current assets .............................     $       62
         Property, plant and equipment ..............          4,607
         Goodwill ...................................         13,719
         Intangible assets ..........................          2,729
                                                          ----------
         Total allocation ...........................     $   21,117
                                                          ==========
</Table>

     Factors contributing to the recognition of goodwill are the market in which
the facility is located and the opportunity to enter into a throughput agreement
with an affiliate company, combined with the affiliate company's



                                       7
<PAGE>
                                Williams GP LLC
             Notes To The Consolidated Balance Sheets - (continued)


ability to trade around those assets. Of the amount allocated to intangible
assets, $2.0 million represents the value of the leases associated with this
facility, which have amortization periods of up to 25 years. The remaining $0.7
million allocated to intangible assets represents covenants not-to-compete and
has an amortization period of five years. Total weighted average amortization
period of intangible assets is approximately 16 years. Of the consideration paid
for the facility, $1.0 million is held in escrow, pending final evaluation of
necessary repairs by the Partnership.

     In June 2001, the Partnership purchased two petroleum product terminals
located in Little Rock, Arkansas from TransMontaigne, Inc. ("TransMontaigne") at
a cost of $29.1 million, of which $20.2 million was allocated to property, plant
and equipment and $8.9 million to goodwill and other intangibles. Goodwill
resulting from this acquisition is being amortized over a 20-year period. The
final purchase price allocation has not been determined pending assessment of
the environmental liabilities assumed.

     In April 2001, the Partnership purchased a 6-mile pipeline for $0.3 million
from Equilon Pipeline Company LLC, enabling connection of its existing Dallas,
Texas area petroleum storage and distribution facility to Dallas Love Field. The
acquisition was made in conjunction with an agreement for the Partnership to
provide jet fuel delivery services into Dallas Love Field for Southwest
Airlines. In December 2001, the Partnership completed construction of additional
jet fuel storage tanks at its distribution facility in Dallas to support
delivery of jet fuel to the airport. Total cost of the pipeline and construction
of the additional jet fuel storage tanks totaled $5.5 million.

     Except where stated above, the purchase prices of the above acquisitions
were allocated to various categories of property, plant and equipment and
liabilities based upon the fair value of the assets acquired and liabilities
assumed.

5.   PROPERTY, PLANT AND EQUIPMENT

     Property, plant and equipment consists of the following (in thousands):

<Table>
<Caption>
                                                                 ESTIMATED
                                                                DEPRECIABLE
                                                   2001            LIVES
                                                 --------       -----------
<S>                                             <C>            <C>
Construction work-in-progress                    $  5,618
Land and right-of-way                              27,162
Buildings                                           7,828          30 years
Storage tanks                                     162,451          30 years
Pipeline and station equipment                     52,822       30 - 67 years
Processing equipment                              122,161          30 years
Other                                               2,664       10 - 30 years
                                                 --------
     Total                                       $380,706
                                                 ========
</Table>

6.   CONCENTRATION OF CREDIT RISK

     Any issues impacting the petroleum product and ammonia industries could
impact the Partnership's overall exposure to credit risk. While sales to
petroleum product terminal and ammonia pipeline customers are generally
unsecured, the financial condition and creditworthiness of customers are
routinely evaluated. The Partnership has the ability with many of its contracts
to sell stored customer products to recover unpaid receivable balances, if
necessary.

     Demand for nitrogen fertilizer has typically followed a combination of
weather patterns and growth in population, acres planted and fertilizer
application rates. Because natural gas is the primary feedstock for the
production of ammonia, the profitability of our customers is impacted by high
natural gas prices. To the extent they are unable to pass on higher costs to
their customers, they may reduce shipments through the pipeline.



                                       8
<PAGE>
                                Williams GP LLC
             Notes To The Consolidated Balance Sheets - (continued)


     The accounts receivable balance of Williams Energy Marketing & Trading
accounted for 8.2 percent of total accounts and affiliate receivables at
December 31, 2001. During 2001, the Partnership reserved $0.3 million for
potential bad debt losses. However, no accounts were written off during 2001.

7.   RELATED PARTY TRANSACTIONS

     Williams Energy Marketing & Trading and Williams Refining & Marketing, LLC,
subsidiaries of the Williams Companies and affiliates of the Partnership, are
significant customers at our petroleum product terminals, representing 11.0
percent and 7.2 percent, respectively, of our total revenues for the year ended
December 31, 2001. The accounts receivable balances of Williams Energy Marketing
& Trading and Williams Refining & Marketing accounted for 8.2 percent and 2.4
percent, respectively, of total affiliate receivables as of December 31, 2001.
The services we provide them are conducted pursuant to various contracts between
them and the Partnership. As of December 31, 2001, 3 percent of the revenues
from these affiliates were generated under contracts renewing on a monthly
basis, while 97 percent were generated under contracts with remaining terms in
excess of one year or that are renewed on an annual basis.

     The affiliate payable primarily represents amounts owed to affiliates for
general and administrative expenses and operational costs of the partnership
incurred on the General Partner's and Partnership's behalf. Affiliate payroll
and benefit costs are amounts due to affiliate companies for salary and wages
and associated charges for employees directly assigned to the Partnership.
Long-term affiliate payables represent amounts due to an affiliate for certain
non-compete agreements and for amounts associated with long-term incentive
compensation.

8.   LONG-TERM DEBT

     Long-term debt and available borrowing capacity at December 31, 2001, were
$139.5 million and $35.5 million, respectively. At December 31, 2001, the
Partnership had a $175.0 million bank credit facility, led by Bank of America.
The credit facility was comprised of a $90.0 million term loan facility and an
$85.0 million revolving credit facility, which includes a $73.0 million
acquisition sub-facility and a $12.0 million working capital sub-facility. On
February 9, 2001, the OLP borrowed $90.0 million under the term loan facility
and $0.1 million under the acquisition sub-facility. The $0.1 million borrowed
under the acquisition sub-facility was repaid in July 2001. In June 2001, the
Partnership borrowed $29.5 million under the acquisition facility to fund the
purchase of two terminals in Little Rock, Arkansas from TransMontaigne. In
October 2001, the Partnership borrowed $20.0 million to fund the acquisition of
the Gibson, Louisiana terminal from Geonet. The credit facility's term extends
through February 5, 2004, with all amounts due at that time. Borrowings under
the credit facility carry an interest rate equal to the LIBOR plus a spread from
1.0 percent to 1.5 percent, depending on the OLP's leverage ratio. Interest is
also assessed on the unused portion of the credit facility at a rate from 0.2
percent to 0.4 percent, depending on the OLP's leverage ratio. The OLP's
leverage ratio is defined as the ratio of consolidated total debt to
consolidated earnings before interest, income taxes, depreciation and
amortization for the period of the four fiscal quarters ending on such date.
Closing fees associated with the initiation of the credit facility were $0.9
million, which are being amortized over the life of the facility. Average
interest rates at December 31, 2001 were 3.1 percent for the term loan facility
and 3.3 percent for the acquisition sub-facility. Cash paid for interest for the
twelve months ended December 31, 2001 was $6.7 million. Interest capitalized was
$0.1 million in 2001. The fair value of the long-term debt approximates its
carrying value, because of the floating interest rate applied to the debt
facility.

9.   LONG-TERM INCENTIVE PLAN

     In February 2001, the general partner adopted the Williams Energy Partners'
Long-Term Incentive Plan for Williams' employees who perform services for
Williams Energy Partners L.P. and directors of the general partner. The
Long-Term Incentive Plan consists of two components, phantom units and unit
options. The Long-Term Incentive Plan permits the grant of awards covering an
aggregate of 700,000 common units. The Long-Term Incentive Plan is administered
by the compensation committee of the general partner's board of directors.

     In April 2001, the general partner issued grants of 92,500 phantom units to
certain key employees associated with the Partnership's initial public offering
in February 2001. These one-time IPO phantom units will vest over a 34-month
period ending on February 9, 2004, and are subject to forfeiture if employment
is terminated prior to



                                       9
<PAGE>
                                Williams GP LLC
             Notes To The Consolidated Balance Sheets - (continued)


vesting. These units are subject to early vesting if the Partnership achieves
certain performance measures. The Partnership recognized $0.7 million of
compensation expense associated with these grants in 2001. The fair market value
of the phantom units associated with this grant was $2.7 million on the grant
date.

     In April 2001, the general partner issued grants of 64,200 phantom units
associated with the annual incentive compensation plan. The actual number of
units that will be awarded under this grant will be determined by the
Partnership on February 9, 2004. At that time, the Partnership will assess
whether certain performance criteria have been met and determine the number of
units that will be awarded, which could range from zero units up to a total of
128,400 units. These units are also subject to forfeiture if employment is
terminated prior to February 9, 2004. These awards do not have an early vesting
feature. The Partnership recognized $1.3 million of deferred compensation
expense associated with these awards in 2001. The fair market value of the
phantom units associated with this grant was $5.4 million on December 31, 2001.

     Certain employees of Williams dedicated to or otherwise supporting Williams
Energy Partners L.P. receive stock-based compensation awards from Williams.
Williams has several plans providing for common-stock-based awards to employees
and to nonemployee directors. The plans permit the granting of various types of
awards including, but not limited to, stock options, stock-appreciation rights,
restricted stock and deferred stock. Awards may be granted for no consideration
other than prior and future services or based on certain financial performance
targets being achieved. The purchase price per share for stock options and the
grant price for stock-appreciation rights may not be less than the market price
of the underlying stock on the date of grant. Depending upon terms of the
respective plans, stock options generally become exercisable in one-third
increments each year from the date of the grant or after three or five years,
subject to accelerated vesting if certain future Williams' stock prices or
specific Williams' financial performance targets are achieved. Stock options
expire 10 years after grant.

     The following summary reflects Williams' stock option activity for 2001 for
those employees principally supporting Williams Energy Partners L.P. operations:

<Table>
<Caption>
                                                                       WEIGHTED-
                                                                       AVERAGE
                                                                       EXERCISE
                                                       OPTIONS          PRICE
                                                      ----------      ----------
<S>                                                   <C>             <C>
     Outstanding - beginning of year ............         73,302      $    34.58
     Granted ....................................         31,439           34.77
     Forfeited ..................................         (3,000)          43.14
     Exercised ..................................         (2,500)          30.14
                                                      ----------
     Outstanding - ending of year ...............         99,241           34.49
                                                      ==========
     Exercisable at end of year .................         67,802           34.36
                                                      ==========
</Table>

     The following summary provides information about outstanding and
exercisable Williams' stock options, held by employees principally supporting
Williams Energy Partners L.P. operations, at December 31, 2001:

<Table>
<Caption>
                                                                 WEIGHTED-
                                                  WEIGHTED-       AVERAGE
                                                         REMAINING
                                                  EXERCISE      CONTRACTUAL
     RANGE OF EXERCISE PRICES       OPTIONS         PRICE           LIFE
     ------------------------      ----------     ----------    -----------
<S>                                <C>            <C>           <C>
     $16.13 to $23.00 ........         17,168     $    19.81      5.0 years
     $27.38 to $34.77 ........         47,673          33.40      8.2 years
     $39.94 to $46.06 ........         34,400          43.32      8.0 years
                                   ----------
          Total ..............         99,241          34.49      7.6 years
                                   ==========
</Table>

     The estimated fair value at the date of grant of options for Williams'
common stock granted in 2001 using the Black-Scholes option pricing model, is as
follows:



                                       10
<PAGE>
                                Williams GP LLC
             Notes To The Consolidated Balance Sheets - (continued)

<Table>
<S>                                                                   <C>
     Weighted-average grant date fair value of options for
         Williams' common stock granted during the year .........     $  10.93

     Assumptions:
          Dividend yield ........................................          1.9%
          Volatility ............................................         35.0%
          Risk-free interest rate ...............................          4.8%
          Expected life (years) .................................          5.0
</Table>

10.  COMMITMENTS AND CONTINGENCIES

     The Partnership leases land, tanks and related terminal equipment at the
Gibson terminal facility. Minimum future lease payments for these leases as of
December 31, 2001, are $0.1 million for each of the next five years and $1.7
million thereafter. The lease payments can be canceled after 2006 and include
provisions for renewal of the lease at five-year increments which can extend the
lease for a total of 25 years.

     In conjunction with the 1999 acquisition of the Gulf Coast marine terminals
from Hess, Hess has disclosed to the Partnership all suits, actions, claims,
arbitrations, administrative, governmental investigation or other legal
proceedings pending or threatened, against or related to the assets acquired by
the Partnership, which arise under environmental law. Hess agreed to indemnify
the Partnership against all environmental claims and losses arising from any
matters related to the pre-acquisition period through July 30, 2014. In the
event that any pre-acquisition releases of hazardous substances are identified
by the Partnership prior to July 20, 2004, the Partnership will be liable for
the first $2.5 million of environmental liabilities, Hess will be liable for the
next $12.5 million of losses, and the Partnership will assume responsibility for
any losses in excess of $15.0 million. Hess has indemnified the Partnership
against any pre-acquisition fines and claims that may be imposed or asserted
against the Partnership under environmental laws. At December 31, 2001, the
Partnership had accrued $0.6 million for costs that may not be recoverable under
Hess' indemnification.

     WES has agreed to indemnify the Partnership against any covered
environmental losses, up to $15.0 million, relating to assets it contributed to
the Partnership that arose prior to February 9, 2001, that become known within
three years after February 9, 2001, and that exceed all amounts recovered or
recoverable by the Partnership under contractual indemnities from third parties
or under any applicable insurance policies. Covered environmental losses are
those non-contingent environmental losses, costs, damages and expenses suffered
or incurred by the Partnership arising from correction of violations of, or
performance of remediation required by, environmental laws in effect at February
9, 2001, due to events and conditions associated with the operation of the
assets and occurring before February 9, 2001.

     Estimated liabilities for environmental costs were $5.4 million at December
31, 2001. Management estimates that expenditures associated with these
environmental remediation liabilities will be paid over the next five to ten
years. Receivables associated with these environmental liabilities of $5.1
million at December 31, 2001, have been recognized as recoverable from
affiliates and third parties. These estimates, provided on an undiscounted
basis, were determined based primarily on data provided by a third-party
environmental evaluation service. These liabilities have been classified as
current or non-current based on management's estimates regarding the timing of
actual payments.

     During 2001, the Partnership recorded an environmental liability of $2.6
million at its New Haven, Connecticut facility, which was acquired in September
2000. This liability was based on third-party environmental engineering
estimates completed as part of a Phase II environmental assessment, routinely
required by the State of Connecticut to be conducted by the purchaser following
the acquisition of a petroleum storage facility. The Partnership will complete a
Phase III environmental assessment at this facility during the second or third
quarter of 2002, and the environmental liability could change materially based
on this more thorough analysis. The environmental liabilities at this location
are covered by the WES environmental indemnifications to the Partnership.

     WNGL will indemnify the Partnership for right-of-way defects or failures in
our ammonia pipeline easements for 15 years after the IPO closing date. WES has
also indemnified the Partnership for right-of-way defects or



                                       11
<PAGE>
                                Williams GP LLC
             Notes To The Consolidated Balance Sheets - (continued)


failures associated with the marine terminal facilities at Galena Park, Corpus
Christi and Marrero for 15 years after the IPO closing date.

     The Partnership is party to various other claims, legal actions and
complaints arising in the ordinary course of business. In the opinion of
management, the ultimate resolution of all claims, legal actions and complaints
after consideration of amounts accrued, insurance coverage or other
indemnification arrangements will not have a material adverse effect upon the
Partnership's future financial position, results of operations or cash flows.

11.  DISTRIBUTIONS

     On May 15, 2001, the Partnership paid cash distributions of $0.292 per unit
on its outstanding common and subordinated units to unitholders of record at the
close of business on May 1, 2001. This distribution represented the minimum
quarterly distribution for the 50-day period following the IPO closing date,
which included February 10, 2001 through March 31, 2001. The total distributions
paid were $3.4 million.

     On August 14, 2001, the Partnership paid cash distributions of $0.5625 per
unit on its outstanding common and subordinated units to unitholders of record
at the close of business on August 2, 2001. The total distributions paid were
$6.5 million.

     On November 14, 2001, the Partnership paid cash distributions of $0.5775
per unit on its outstanding common and subordinated units to unitholders of
record at the close of business on November 1, 2001. The total distributions
paid were $6.7 million.

     Total distributions paid during 2001 were as follows (in thousands except
per unit amounts):

<Table>
<Caption>
                                             AMOUNT      DISTRIBUTION
                                            PER UNIT        AMOUNT
                                           ----------    ------------
<S>                                        <C>           <C>
     Common Unitholders ..............     $     1.43     $    8,134
     Subordinated Unitholders ........     $     1.43          8,134
     General Partner .................     $     1.43            331
                                                          ----------
          Total ......................                    $   16,599
                                                          ==========
</Table>

12.  OWNERS' EQUITY

     The roll-forward of owners' equity is as follows (in thousands):

<Table>
<S>                                             <C>
     Balance - December 31, 2000 ..........     $        1
     Capital contribution by affiliates ...        134,358
     Net income ...........................          2,709
     Distributions ........................         (9,843)
                                                ----------
     Balance - December 31, 2001 ..........     $  127,225
                                                ==========
</Table>

     Of the Partnership's 5,679,694 common units outstanding at December 31,
2001, 4,600,000 are held by the public, with the remaining 1,079,694 held by
affiliates of the Partnership. All of the Partnership's 5,679,694 subordinated
units are held by affiliates of the Partnership.

     During the subordination period, the Partnership can issue up to 2,839,847
additional common units without obtaining unitholder approval. In addition, the
general partner can issue an unlimited number of common units as follows:

          o    Upon exercise of the underwriters' over-allotment option;

          o    Upon conversion of the subordinated units;

          o    Under employee benefit plans;

          o    Upon conversion of the general partner interest and incentive
               distribution rights as a result of a withdrawal of the general
               partner;



                                       12
<PAGE>
                                Williams GP LLC
             Notes To The Consolidated Balance Sheets - (continued)


          o    In the event of a combination or subdivision of common units;

          o    In connection with an acquisition or a capital improvement that
               increases cash flow from operations per unit on a pro forma
               basis; or

          o    If the proceeds of the issuance are used exclusively to repay up
               to $40.0 million of our indebtedness.

     The subordination period will end when the Partnership meets certain
financial tests provided for in the Partnership agreement but it generally
cannot end before December 31, 2005.

     The limited partners holding Common Units of the Partnership have the
following rights, among others:

          o    Right to receive distributions of the Partnership's available
               cash within 45 days after the end of each quarter;

          o    Right to transfer common unit ownership to substitute limited
               partners;

          o    Right to receive an annual report, containing audited financial
               statements and a report on those financial statements by our
               independent public accountants within 120 days after the close of
               the fiscal year end;

          o    Right to receive information reasonably required for tax
               reporting purposes within 90 days after the close of the calendar
               year;

          o    Right to vote according to the limited partners' percentage
               interest in the Partnership on any meeting that may be called by
               the general partner. However, if any person or group other than
               the general partner and its affiliates acquires beneficial
               ownership of 20 percent or more of any class of units, that group
               or person loses voting rights on all of its units; and

          o    Right to inspect our books and records at the unitholders' own
               expense.

      Net income is allocated to the general partner and limited partners based
on their proportionate share of cash distributions for the period. Cash
distributions to the general partner and limited partners are made based on the
following table:

<Table>
<Caption>
                                     Percentage of Distributions
       Annual Distribution         -------------------------------
             Amount                Unitholders     General Partner
       -------------------         -----------     ---------------
<S>                                <C>             <C>

           Up to $2.31                  98                2
     Above $2.31 up to $2.62            85               15
     Above $2.62 up to $3.15            75               25
           Above $3.15                  50               50
</Table>

      In the event of a liquidation, all property and cash in excess of that
required to discharge all liabilities will be distributed to the Partners in
proportion to the positive balances in their respective tax-basis capital
accounts.

13.  OTHER EVENTS

      On February 14, 2002, the Partnership paid cash distributions of $0.59 per
unit on its outstanding common and subordinated units to unitholders of record
at the close of business on February 1, 2002. The total distribution, including
distributions paid to the general partner on its equivalent units, was $6.9
million.

      In January 2002, the Partnership borrowed $8.5 million to finance the
acquisition of a pipeline from Aux Sable and remitted those funds to complete
the transaction. The Partnership entered into a long-term lease arrangement with
Aux Sable under which Aux Sable is the sole lessee of these assets. The
transaction will be accounted for as a capital lease.



                                       13

</TEXT>
</DOCUMENT>
</SUBMISSION>
