EXECUTION COPY

$500,000,000

TERM LOAN AGREEMENT

AMONG

WILLIAMS PRODUCTION HOLDINGS LLC,

WILLIAMS PRODUCTION RMT COMPANY,
AS BORROWER,

THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,

LEHMAN BROTHERS INC. AND
BANC OF AMERICA SECURITIES LLC,
AS JOINT LEAD ARRANGERS,

CITICORP USA, INC. AND
JPMORGAN CHASE BANK,
AS CO-SYNDICATION AGENTS,

BANK OF AMERICA, N.A.,
AS DOCUMENTATION AGENT,

AND

LEHMAN COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT

DATED AS OF MAY 30, 2003

TABLE OF CONTENTS

                                                                                                                    PAGE
SECTION 1.            DEFINITIONS...............................................................................      1

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

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

SECTION 2.            AMOUNT AND TERMS OF TERM LOAN COMMITMENTS.................................................     21

         2.1      Term Loan Commitments.........................................................................     21

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

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

         2.4      Repayment of Term Loans; Evidence of Debt.....................................................     22

         2.5      Fees, etc.....................................................................................     23

         2.6      Optional Prepayments..........................................................................     23

         2.7      Mandatory Prepayments.........................................................................     23

         2.8      Conversion and Continuation Options...........................................................     24

         2.9      Minimum Amounts and Maximum Number of Eurodollar Tranches.....................................     24

         2.10     Interest Rates and Payment Dates..............................................................     25

         2.11     Computation of Interest and Fees..............................................................     25

         2.12     Inability to Determine Interest Rate..........................................................     25

         2.13     Pro Rata Treatment and Payments...............................................................     26

         2.14     Requirements of Law...........................................................................     27

         2.15     Taxes.........................................................................................     28

         2.17     Illegality....................................................................................     31

         2.18     Change of Lending Office......................................................................     31

         2.19     Replacement of Lenders under Certain Circumstances............................................     31

SECTION 3.            REPRESENTATIONS AND WARRANTIES............................................................     32

         3.1      Financial Condition...........................................................................     32

         3.2      No Change.....................................................................................     32

         3.3      Corporate Existence; Compliance with Law......................................................     33

         3.4      Corporate Power; Authorization; Enforceable Obligations.......................................     33

         3.5      No Legal Bar..................................................................................     33

         3.6      No Material Litigation........................................................................     33

TABLE OF CONTENTS
(CONTINUED)

                                                                                                                    PAGE
         3.7      No Default....................................................................................     34

         3.8      Ownership of Property; Liens..................................................................     34

         3.9      Intellectual Property.........................................................................     34

         3.10     Taxes.........................................................................................     34

         3.11     Federal Regulations...........................................................................     34

         3.12     Labor Matters.................................................................................     34

         3.13     ERISA.........................................................................................     35

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

         3.15     Subsidiaries..................................................................................     35

         3.16     Use of Proceeds...............................................................................     35

         3.17     Environmental Matters.........................................................................     35

         3.18     Accuracy of Information, etc..................................................................     37

         3.19     Security Documents............................................................................     37

         3.20     Solvency......................................................................................     38

         3.21     Hydrocarbon Interests.........................................................................     38

         3.22     Permits.......................................................................................     38

         3.23     Lease Payments................................................................................     38

         3.24     Public Utility Holding Company Act............................................................     39

SECTION 4.            CONDITIONS PRECEDENT......................................................................     39

         4.1      Conditions to the Term Loan...................................................................     39

SECTION 5.            AFFIRMATIVE COVENANTS.....................................................................     42

         5.1      Financial Statements..........................................................................     42

         5.2      Certificates; Other Information...............................................................     43

         5.3      Payment of Obligations........................................................................     44

         5.4      Conduct of Business and Maintenance of Existence, etc.........................................     44

         5.5      Maintenance of Property; Insurance............................................................     45

         5.6      Inspection of Property; Books and Records; Discussions........................................     45

         5.7      Notices.......................................................................................     46

         5.8      Environmental Laws............................................................................     46

TABLE OF CONTENTS
(CONTINUED)

                                                                                                                    PAGE
         5.9      Additional Collateral, etc....................................................................     46

         5.10     Further Assurances............................................................................     47

         5.11     Capital Expenditure...........................................................................     48

SECTION 6.            NEGATIVE COVENANTS........................................................................     48

         6.1      Financial Condition Covenants.................................................................     48

         6.2      Limitation on Indebtedness....................................................................     48

         6.3      Limitation on Liens...........................................................................     49

         6.4      Limitation on Fundamental Changes.............................................................     52

         6.5      Limitation on Disposition of Property.........................................................     52

         6.6      Limitation on Restricted Payments.............................................................     54

         6.7      Limitation on Investments.....................................................................     55

         6.8      Limitation on Optional Payments and Modifications of Indebtedness.............................     56

         6.9      Limitation on Transactions with Affiliates....................................................     56

         6.10     Limitation on Sales and Leasebacks............................................................     56

         6.11     Limitation on Changes in Fiscal Periods.......................................................     56

         6.12     Limitation on Negative Pledge Clauses.........................................................     56

         6.13     Limitation on Restrictions on Subsidiary Distributions, etc...................................     57

         6.14     Business Activities...........................................................................     57

         6.15     Holdings Negative Pledge; Limitation on Assets................................................     57

         6.16     Minimum Borrower Liquidity....................................................................     58

SECTION 7.            EVENTS OF DEFAULT.........................................................................     58

         7.2      Certain Cure Rights...........................................................................     61

SECTION 8.            THE AGENTS................................................................................     62

         8.1      Appointment...................................................................................     62

         8.2      Delegation of Duties..........................................................................     62

         8.3      Exculpatory Provisions........................................................................     62

         8.4      Reliance by Agents............................................................................     63

         8.5      Notice of Default.............................................................................     63

         8.6      Non-Reliance on Agents and Other Lenders......................................................     63

TABLE OF CONTENTS
(CONTINUED)

                                                                                                                    PAGE
         8.7      Indemnification...............................................................................     64

         8.8      Agent in Its Individual Capacity..............................................................     64

         8.9      Successor Administrative Agent................................................................     65

         8.10     Authorization to Release Liens and Guarantees.................................................     65

         8.11     The Arrangers; the Co-Syndication Agents; the Documentation Agent.............................     65

SECTION 9.            MISCELLANEOUS.............................................................................     65

         9.1      Amendments and Waivers........................................................................     65

         9.2      Notices.......................................................................................     67

         9.3      No Waiver; Cumulative Remedies................................................................     68

         9.4      Survival of Representations and Warranties....................................................     68

         9.5      Payment of Expenses...........................................................................     69

         9.6      Successors and Assigns; Participations and Assignments........................................     70

         9.7      Adjustments; Set off..........................................................................     73

         9.8      Counterparts..................................................................................     74

         9.9      Severability..................................................................................     74

         9.10     Integration...................................................................................     74

         9.11     GOVERNING LAW.................................................................................     74

         9.12     Submission to Jurisdiction; Waivers...........................................................     74

         9.13     Acknowledgments...............................................................................     75

         9.14     Confidentiality...............................................................................     75

         9.15     Release of Collateral and Guarantee Obligations...............................................     76

         9.16     Delivery of Lender Addenda....................................................................     76

         9.17     WAIVERS OF JURY TRIAL.........................................................................     76

TERM LOAN AGREEMENT, dated as of May 30, 2003, among WILLIAMS PRODUCTION HOLDINGS LLC, a Delaware limited liability company ("Holdings"), WILLIAMS PRODUCTION RMT COMPANY, a Delaware corporation (the "Borrower"), the several banks and other financial institutions or entities from time to time parties to this Agreement as lenders (the "Lenders"), LEHMAN BROTHERS INC. ("LBI") and BANC OF AMERICA SECURITIES LLC, as joint advisors, joint lead arrangers and joint book runners (together in such capacities, the "Arrangers"), CITICORP USA, INC. and JPMORGAN CHASE BANK, as co-syndication agents (together in such capacities, the "Co-Syndication Agents"), BANK OF AMERICA, N.A., as documentation agent (in such capacity, the "Documentation Agent"), and LEHMAN COMMERCIAL PAPER INC. ("LCPI"), as administrative agent (in such capacity, the "Administrative Agent").

W I T N E S S E T H:

WHEREAS, the Lenders are willing to make a term loan available to the Borrower upon and subject to the terms and conditions hereinafter set forth; and

WHEREAS, the Borrower intends to refinance the Existing Credit Agreement (as defined below) with proceeds from the term loan hereunder;

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

SECTION 1. DEFINITIONS

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

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

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

"Agents": the collective reference to the Co-Syndication Agents, the Documentation Agent and the Administrative Agent.

"Agreement": this Term Loan Agreement, as amended, supplemented or otherwise modified from time to time.

"Applicable Margin": (a) with respect to Base Rate Loans, a rate per annum equal to 2.75%, and (b) with respect to Eurodollar Loans, a rate per annum equal to 3.75%.

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

"Arrangers": as defined in the preamble hereto.

"Asset Sale": any Disposition of Property or series of related Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d), (e), (f), (i), (j), (k), (l) or (m) of Section 6.5) which yields gross proceeds to Holdings, the Borrower or any of the Borrower's Subsidiaries in excess of $500,000.

"Assignee": as defined in Section 9.6(c).

"Assignor": as defined in Section 9.6(c).

"Barrett Trust": the trust created pursuant to the Trust Agreement dated as of November 1, 1997 by and among Barrett Resources Corporation, a Delaware corporation, in its capacity as the initial Manager, Delaware Trust Capital Management, Inc., a Delaware banking corporation in its capacity as Special Trustee and the Holders signatory thereto (as amended, supplemented or otherwise modified from time to time).

"Base Rate": for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the prime lending rate as set forth on the British Banking Association Telerate Page 5 (or such other comparable page as may, in the opinion of the Administrative Agent, replace such page for the purpose of displaying such rate), as in effect from time to time. Any change in the Base Rate due to a change in the Prime Rate actually available or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually available.

"Base Rate Loans": Term Loans for which the applicable rate of interest is based upon the Base Rate.

"Benefited Lender": as defined in Section 9.7.

"Bison Entities": means, collectively, Bison Royalty LLC, PPH and Rulison Production Company LLC.

"Board": the Board of Governors of the Federal Reserve System of the United States (or any successor).

"Borrower": as defined in the preamble hereto.

"Borrowing Notice": with respect to any request for borrowing of Term Loans hereunder, a notice from the Borrower, substantially in the form of, and containing the information prescribed by, Exhibit I, delivered to the Administrative Agent.

"Business Day": (a) for all purposes other than as covered by clause (b) below, a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close and
(b) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a Business Day described in clause (a) and which is also a day for trading by and between banks in Dollar deposits in the interbank eurodollar market.

"Capital Expenditures": for any period, with respect to any Person, the aggregate of all expenditures by such Person for the acquisition or leasing (pursuant to a capital lease) of fixed or capital assets, the drilling of wells or additions to equipment (including replacements, capitalized repairs and improvements during such period) which are required to be capitalized under GAAP on a balance sheet of such Person.

"Capital Lease Obligations": with respect to any Person, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP; and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP.

"Capital Stock": any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

"Cash Equivalents": (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank deposits having maturities of one year or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States of America or any state thereof having combined capital and surplus of not less than $100,000,000; (c) commercial paper of an issuer rated at least A-2 by S&P or P-2 by Moody's, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of commercial paper issuers generally, and maturing within 270 days from the date of acquisition; (d) short-term tax exempt securities including municipal notes, commercial paper, auction rate floaters, and floating rate notes rated either "P-1" by Moody's or "A-1" by S&P and maturing within 270 days from the date of acquisition; (e) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than 30 days with respect to securities issued or fully guaranteed or insured by the United States government; (f) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A by S&P or A by Moody's; (g) securities with maturities of one year or less from the date of acquisition backed by standby

letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) of this definition; and (h) shares of money market mutual or similar funds which invest primarily in assets satisfying the requirements of clauses (a) through (g) of this definition.

"Change of Control": the occurrence of any of the following events: (i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than 50% of the outstanding common stock of Parent; (ii) the board of directors of Parent shall cease to consist of a majority of Continuing Directors; (iii) Parent shall cease to own and control, of record and beneficially, directly, 100% of each class of outstanding Capital Stock of Holdings free and clear of all Liens; or (iv) Holdings shall cease to own and control, of record and beneficially, directly, 100% of each class of outstanding Capital Stock of the Borrower (other than the Class B Common Stock of the Borrower issued to the Administrative Agent) free and clear of all Liens (except Liens created by the Guarantee and Collateral Agreement).

"Closing Date": the date on which the conditions precedent set forth in Section 4.1 shall have been satisfied, which date shall be not later than June 15, 2003.

"Code": the United States Internal Revenue Code of 1986, as amended from time to time.

"Collateral": all Property of the Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to be created by any Security Document; provided that the Collateral shall not include in any event (i) the Properties set forth on Schedules 6.5(f)(i) and 6.5(i), (ii) the Capital Stock of the Bison Entities, (iii) any Property of a Bison Entity other than an Oil and Gas Property of such Bison Entity, and (iv) any Oil and Gas Property with a fair market value of less than $2,000,000 (so long as the aggregate fair market value of the Properties excluded by the Borrower and any other Grantor from inclusion in the Collateral as a result of such threshold at any time does not exceed $10,000,000 in the aggregate) and (v) any other Property excluded from the Collateral pursuant to the terms of the Guarantee and Collateral Agreement.

"Collateral Account": as defined in the Guarantee and the Collateral Agreement.

"Commonly Controlled Entity": an entity, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group that includes the Borrower and that is treated as a single employer under Section 414 of the Code.

"Compliance Certificate": a certificate duly executed by a Responsible Officer, substantially in the form of Exhibit B.

"Confidential Information Memorandum": the Confidential Information Memorandum dated May 2003 and furnished to the initial Lenders in connection with the syndication of the Facility.

"Consolidated EBITDA": of any Person for any period, Consolidated Net Income of such Person and its Subsidiaries for such period plus, without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) income tax expense, (b) consolidated interest expense calculated in accordance with GAAP of such Person and its Subsidiaries, amortization or write-off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including, in the case of the Borrower, the Term Loans), (c) depreciation, depletion and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) any extraordinary, unusual or non-recurring expenses or losses, (f) regardless of whether such amount is reflected as a charge in the statement of such Consolidated Net Income but only to the extent that such amount is not reflected in Consolidated Net Income, cash received by such Person in respect of hedge agreements entered into by Parent or its Affiliates hedging the oil or gas production of the Borrower, (g) non-cash corporate overhead allocated to the Borrower in amounts consistent with past practice which are not reimbursed by the Borrower pursuant to Section 6.6, (h) any other non-cash charges and (i) any impairment of goodwill or property asset carrying value, and minus, to the extent included in the statement of such Consolidated Net Income for such period, the sum of (w) interest income (except (I) to the extent deducted in determining Consolidated Interest Expense and (II) interest accrued in respect of investments made with the proceeds of the cash collateral contemplated by Section 6.17), (x) any extraordinary, unusual or non-recurring income or gains, (y) to the extent that such amount is not reflected in Consolidated Net Income, cash payments by such Person in respect of hedge agreements entered into by Parent or its Affiliates hedging the oil or gas production of the Borrower and (z) any other non-cash income, all as determined on a consolidated basis; provided that for such relevant fiscal quarter period prior to the fiscal quarter ended September 30, 2003, the applicable "Consolidated EBITDA" shall be as set forth on Schedule 1.1(d).

"Consolidated Interest Coverage Ratio": for any period, the ratio of (a) Consolidated EBITDA of the Borrower and its Subsidiaries for such period to (b) Consolidated Interest Expense of the Borrower and its Subsidiaries for such period.

"Consolidated Interest Expense": of any Person for any period, total cash interest expense (including that attributable to Capital Lease Obligations) of such Person and its Subsidiaries for such period with respect to all outstanding Indebtedness of such Person and its Subsidiaries (including, without limitation, all commissions, discounts and other fees and charges owed by such Person with respect to letters of credit and bankers' acceptance financing and net costs of such Person under Hedge Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP, and excluding all fees and expenses incurred in connection with this Agreement); provided that for the fiscal quarters ending September 30, 2003, December 31, 2003 and March 31, 2004, "Consolidated Interest Expense" for the relevant period shall be deemed to equal Consolidated Interest Expense for such fiscal quarter (and each fiscal quarter commencing on or after July 1, 2003) multiplied by 4, 2 and 4/3, respectively.

"Consolidated Net Income": of any Person for any period, the consolidated net income (or loss) of such Person and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided that in calculating Consolidated Net

Income of the Borrower and its consolidated Subsidiaries for any period, there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Subsidiaries (excluding, however, any merger or consolidation of a Subsidiary with and into the Borrower or another Subsidiary), and (b) the income (or deficit) of any Person (other than a Subsidiary of the Borrower) in which the Borrower or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by the Borrower or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary of the Borrower to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any Contractual Obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

"Continuing Directors": as to any Person, the directors of such Person on the Closing Date, after giving effect to the transactions contemplated hereby, and each other director, if, in each case, such other director's nomination for election to the board of directors of such Person is recommended by at least 66-2/3% of the then Continuing Directors or such other director receives the vote of each of the shareholders of such Person on the Closing Date in his or her election by the shareholders of such Person.

"Contractual Obligation": as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its Property is bound.

"Default": any of the events specified in Section 7.1, whether or not any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

"Derivatives Counterparty": as defined in Section 6.6.

"Disposition": with respect to any Property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof; and the terms "Dispose" and "Disposed of" shall have correlative meanings.

"Disqualified Stock": any Capital Stock or other ownership or profit interest of any Loan Party that any Loan Party is or, upon the passage of time or the occurrence of any event, may become obligated to redeem, purchase, retire, defease or otherwise make any payment in respect of in consideration other than Capital Stock (other than Disqualified Stock) prior to the date one year and one day after the Maturity Date.

"Dollars" and "$": lawful currency of the United States of America.

"Domestic Subsidiary": any Subsidiary of the Borrower organized under the laws of any jurisdiction within the United States of America.

"Eligible Assignee": (i) a Lender; (ii) an Affiliate of a Lender; (iii) a Related Fund (iv) a commercial bank organized under the laws of the United States, or any State thereof; (v) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof; (vi) a commercial bank organized under the laws of any other country that is a member of the Organization for Economic Cooperation and Development or has concluded

special lending arrangements with the International Monetary Fund associated with its General Arrangements to Borrow, or a political subdivision of any such country, so long as such bank is acting through a branch or agency located in the country in which it is organized or another country that is described in this clause (vi); (vii) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and (viii) the central bank of any country that is a member of the Organization for Economic Cooperation and Development; provided that neither the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible Assignee.

"Engineering Report": a report prepared by the Borrower (in which case, such report shall be reviewed or audited by an Approved Engineer in a manner consistent with past practices) or an Approved Engineer as of December 31 of each year for purposes of compliance with Section 5.2(d) and, if the Borrower has so elected, as of any other date and, in each case, subject to reasonable review by the Administrative Agent showing the net present value (using a 10.0% discount rate and with prices adjusted to reflect a ten year future market price strip (and, assuming for all periods subsequent to year ten, the price determined for year ten) reasonably determined by the Borrower and reasonably satisfactory to the Administrative Agent) of the projected future net revenues attributable to the Proved Reserves.

"Environmental Laws": any and all laws, rules, orders, regulations, statutes, ordinances, guidelines, codes, decrees, or other legally enforceable requirements (including, without limitation, common law) of the United States, or any state, local, municipal or other governmental authority, regulating, relating to or imposing liability or standards of conduct concerning protection of the environment or of human health, as has been, is now, or may at any time hereafter be, in effect.

"Environmental Permits": any and all permits, licenses, approvals, registrations, and other authorizations required under any Environmental Law.

"ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time.

"Eurocurrency Reserve Requirements": for any day, the aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including, without limitation, basic, supplemental, marginal and emergency reserves) under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Board) maintained by a member bank of the Federal Reserve System.

"Eurodollar Base Rate": with respect to each day during each Interest Period, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" for purposes of this definition

shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent.

"Eurodollar Loans": Term Loans for which the applicable rate of interest is based upon the Eurodollar Rate.

"Eurodollar Rate": with respect to each day during each Interest Period, a rate per annum determined for such day in accordance with the following formula (rounded upward to the nearest 1/100th of 1%):

"Eurodollar Tranche": the collective reference to Eurodollar Loans the then current Interest Periods with respect to all of which begin on the same date and end on the same later date.

"Event of Default": any of the events specified in Section 7.1, provided that any requirement for the giving of notice, the lapse of time, or both, has been satisfied.

"Excluded Foreign Subsidiaries": any Foreign Subsidiary in respect of which either (a) the pledge of greater than 65% of the Capital Stock of such Subsidiary as Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would, in the good faith judgment of the Borrower, result in adverse tax consequences to the Borrower.

"Existing Credit Agreement": the Credit Agreement, dated as of July 31, 2002, among Parent, Holdings, the Borrower, the several lenders from time to time party thereto, LBI, as Lead Arranger and Book Manager, LCPI, as Syndication Agent, and LCPI, as Administrative Agent, as the same may be amended, supplemented or otherwise modified from time to time.

"Facility": the Term Loan Commitments and the Term Loans made thereunder.

"Federal Funds Effective Rate": for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by it.

"Foreign Subsidiary": any Subsidiary of the Borrower that is not a Domestic Subsidiary.

"Funding Office": the office specified from time to time by the Administrative Agent as its funding office by notice to the Borrower and the Lenders.

"GAAP": generally accepted accounting principles in the United States of America in effect on the date hereof, with respect to determinations under Section 6.1, and otherwise in effect from time to time.

"Gas Gathering Systems": the gas plant and those certain gas gathering systems consisting of all equipment, assets, rights-of-way, surface leases, contracts and related assets more particularly described on schedule 1.1(b) attached hereto.

"GE Equipment": the Equipment (as defined in the UCC) purchased or constructed with the proceeds of the GE Loan.

"GE Loan": the loan made to the Borrower by General Electric Capital Corporation pursuant to the Interim Loan and Security Agreement, dated as of June 16, 2002, in an aggregate principal amount not to exceed $17,000,000.

"Governing Documents": collectively, as to any Person, the articles or certificate of incorporation and bylaws, any shareholders agreement, certificate of formation, limited liability company agreement, partnership agreement or other formation or constituent documents of such Person.

"Governmental Authority": any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of government.

"Grantor": as defined in the Guarantee and Collateral Agreement.

"Guarantee and Collateral Agreement": the Guarantee and Collateral Agreement to be executed and delivered by Holdings, the Borrower and each Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may be amended, supplemented or otherwise modified from time to time.

"Guarantee Obligation": as to any Person (the "guaranteeing person"), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit), if to induce the creation of such obligation of such other Person the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the "primary obligations") of any other third Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any Property constituting direct or indirect security therefor, (ii) to advance or supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase Property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (x) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (y) the maximum amount for which such guaranteeing person may be liable pursuant

to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person's maximum reasonably anticipated liability in respect thereof as determined by the Borrower in good faith.

"Guarantors": the collective reference to Holdings and the Subsidiary Guarantors.

"Hedge Agreements": (a) all interest rate swaps, caps or collar agreements or similar arrangements entered into by the Borrower or any of its Subsidiaries providing for protection against fluctuations in interest rates or currency exchange rates or the exchange of nominal interest obligations, either generally or under specific contingencies and (b) all hedging agreements entered into by the Borrower or any of its Subsidiaries in connection with the hedging of commodity prices, including basis (transportation) hedges.

"Holdings": as defined in the preamble hereto.

"Holdings Subordinated Guaranty": the Amended and Restated Subordinated Guaranty, dated as of October 31, 2002, by Holdings in favor of the Financial Institutions (as defined therein).

"Hydrocarbons": oil, gas, casing head gas, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons, all products refined, separated, settled and dehydrated therefrom and all products refined therefrom, including, without limitation, kerosene, liquefied petroleum gas, refined lubricating oils, diesel fuel, drip gasoline, natural gasoline, helium, sulfur and all other minerals.

"Hydrocarbon Interests": all rights, titles, interests and estates now owned or hereafter acquired by the Borrower or any of its Subsidiaries in any and all oil, gas and other liquid or gaseous hydrocarbon properties and interests, including without limitation, mineral fee or lease interests, production sharing agreements, concession agreements, license agreements, service agreements, risk service agreements or similar Hydrocarbon interests granted by an appropriate Governmental Authority, farmout, overriding royalty and royalty interests, net profit interests, oil payments, production payment interests and similar interests in Hydrocarbons, including any reserved or residual interests of whatever nature.

"Indebtedness": of any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase price of Property or services (other than (I) trade payables and (II) customary obligations under Oil and Gas Agreements, in each case, incurred in the ordinary course of such Person's business), (c) all obligations of such Person evidenced by notes, bonds (other than obligations in respect of surety, performance and guarantee bonds issued for the account of such Person in the ordinary course of business), debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to Property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such

Property), (e) all Capital Lease Obligations of such Person, (f) all obligations of such Person, contingent or otherwise, as an account party or applicant under acceptance, letter of credit or similar facilities, (g) all Guarantee Obligations of such Person in respect of obligations of the kind referred to in clauses (a) through (f) above, (h) all obligations of the kind referred to in clauses (a) through (g) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on Property (including, without limitation, accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation and (i) for the purposes of Section 7.1(e) only, all obligations of such Person in respect of Hedge Agreements.

"Indemnified Liabilities": as defined in Section 9.5.

"Indemnitee": as defined in Section 9.5.

"Insolvency": with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of Section 4245 of ERISA.

"Insolvent": pertaining to a condition of Insolvency.

"Intellectual Property": the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, technology, know-how and processes, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

"Interest Payment Date": (a) as to any Base Rate Loan, the last day of each March, June, September and December to occur while such Term Loan is outstanding and the final maturity date of such Term Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or shorter, the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer than three months, each day that is three months, or a whole multiple thereof, after the first day of such Interest Period and the last day of such Interest Period and (d) as to any Term Loan, the date of any repayment or prepayment made in respect thereof.

"Interest Period": as to any Eurodollar Loan, (a) initially, the period commencing on the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower in its notice of borrowing or notice of conversion, as the case may be, given with respect thereto; and (b) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:

(1) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into

another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

(2) any Interest Period that would otherwise extend beyond the date final payment is due on the Term Loans, shall end on the such due date, as applicable; and

(3) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period.

"Investments": as defined in Section 6.7.

"Lehman Entity": any of LCPI or any of its affiliates (including Syndicated Loan Funding Trust).

"Lender Addendum": with respect to any initial Lender, a Lender Addendum, substantially in the form of Exhibit H, to be executed and delivered by such Lender on the Closing Date as provided in Section 9.17.

"Lenders": as defined in the preamble hereto.

"Lien": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

"Loan Documents": this Agreement, the Security Documents, the Term Notes, and all documents, instruments, agreements, certificates and notices at any time executed and/or delivered to the Administrative Agent, any of the other Agents, the Arrangers or any Lender in connection herewith or therewith.

"Loan Parties": Holdings, the Borrower and each Subsidiary of the Borrower that is a party to a Loan Document.

"Loans": the collective reference to the Term Loans and any other loan made by any Lender pursuant to this Agreement.

"Material Adverse Effect": a material adverse effect on or affecting in a material and adverse manner (a) the business, assets, property, condition (financial or otherwise) or prospects of Holdings, the Borrower and the Borrower's Subsidiaries taken as a whole, or (b) the validity or enforceability of this Agreement, the Guarantee and Collateral Agreement, the Mortgages or the other Security Documents, or the Term Notes or the rights or remedies of the Agents or the Lenders hereunder or thereunder.

"Material Environmental Amount": an amount or amounts payable by the Borrower and/or any of its Subsidiaries, in the aggregate in excess of $10,000,000 in any one year for: costs to (i) comply with any requirement or interpretation of Environmental Law imposed after the Closing Date that constitutes a material change; or (ii) respond to, remove or remediate a release to the environment of Materials of Environmental Concern; provided, however, such amount excludes ordinary and customary costs for obtaining, complying with and maintaining Environmental Permits, and for plugging and abandonment and site restoration upon cessation of production. Such amount includes compensatory damages, (including, without limitation, damages to natural resources), punitive damages, fines, and penalties pursuant to any Environmental Law.

"Materials of Environmental Concern": any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products, polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants, contaminants, radioactivity, and any other substances of any kind, whether or not any such substance is defined as hazardous or toxic under any Environmental Law, that is regulated pursuant to or reasonably could give rise to liability under any Environmental Law.

"Maturity Date: May 30, 2007.

"Moody's": Moody's Investors Service, Inc. and its successors.

"Mortgaged Properties": the real properties and leasehold estates listed on Schedule 1.1(a), as to which the Administrative Agent for the benefit of the Secured Parties shall be granted a Lien pursuant to the Mortgages.

"Mortgages": each of the mortgages and deeds of trust made by any Loan Party in favor of, or for the benefit of, the Administrative Agent for the benefit of the Secured Parties, substantially in the form of Exhibit D (with such changes thereto as shall be advisable under the law of the jurisdiction in which such mortgage or deed of trust is to be recorded), as the same may be amended, supplemented or otherwise modified from time to time.

"Multiemployer Plan": a Plan that is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

"Net Cash Proceeds": (a) in connection with any Asset Sale or any Recovery Event, the proceeds thereof in the form of cash and cash equivalents (including any such proceeds received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but only as and when received) of such Asset Sale or Recovery Event, net of attorneys' fees, accountants' fees, investment banking fees, amounts required to be applied to the repayment of Indebtedness secured by a Lien expressly permitted hereunder on any asset which is the subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security Document) and other customary fees and expenses actually incurred in connection therewith and net of taxes paid or reasonably estimated to be payable as a result thereof (after taking into account any available tax credits or deductions and any tax sharing arrangements), and (b) in connection with any issuance or sale of equity securities or debt securities or instruments or the incurrence of loans, the cash proceeds received

from such issuance or incurrence, net of attorneys' fees, investment banking fees, accountants' fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith.

"New Notes": as defined in Section 6.2(i).

"Non-Excluded Taxes": as defined in Section 2.15(a).

"Non-U.S. Lender": as defined in Section 2.15(d).

"Obligations": the unpaid principal of and interest on (including, without limitation, interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans, and all other obligations and liabilities of the Borrower to the Administrative Agent or to any Lender or any Qualified Counterparty, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement, any other Loan Document, any Specified Hedge Agreement or any other document made, delivered or given in connection herewith or therewith, whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including, without limitation, all fees, charges and disbursements of counsel to the Administrative Agent or to any Lender that are required to be paid by the Borrower pursuant hereto) or otherwise; provided, that (i) obligations of the Borrower or any Subsidiary under any Specified Hedge Agreement shall be secured and guaranteed pursuant to the Security Documents only to the extent that, and for so long as, the other Obligations are so secured and guaranteed and (ii) any release of Collateral or Guarantors effected in the manner permitted by this Agreement shall not require the consent of holders of obligations under Specified Hedge Agreements.

"Oil and Gas Agreements": operating agreements, processing agreements, farm-out and farm-in agreements, development agreements, area of mutual interest agreements, contracts for the gathering and/or transportation of oil and natural gas, unitization agreements, pooling arrangements, joint bidding agreements, joint venture agreements, participation agreements, surface use agreements, service contracts, tax credit agreements, leases and subleases of Oil and Gas Properties or other similar customary agreements, transactions, properties, interests or arrangements, howsoever designated, in each case made or entered into in the ordinary course of business as conducted by the Borrower and its Subsidiaries.

"Oil and Gas Business": (a) the acquisition, exploration, exploitation, development, operation, management and disposition of interests in Hydrocarbon Interests and Hydrocarbons; (b) gathering, marketing, treating, processing, storage, selling and transporting of any production from such interests or Hydrocarbon Interests, including, without limitation, the marketing of Hydrocarbons obtained from unrelated Persons; (c) any business relating to or arising from exploration for or development, production, treatment, processing, storage, transportation or marketing of oil, gas and other minerals and products produced in association therewith; and (d) any activity that is ancillary or necessary or desirable to facilitate the activities described in clauses (a) through (c) of this definition.

"Oil and Gas Properties": (a) Hydrocarbon Interests; (b) the Property now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including, without limitation, all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interest; (e) all Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, the lands covered thereby and all oil in tanks and all rents, issues, profits, proceeds, products, revenues and other income from or attributable to the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Property in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests, Property, Gas Gathering System, rights, titles, interests and estates described or referred to above, including, without limitation, any and all Property, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment or other personal property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing and (g) to the extent not included in the foregoing, any and all other oil or gas property described in
Section 4.09(y) of the RMT Senior Notes Indenture.

"Other Taxes": any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

"Parent": The Williams Companies, Inc., a Delaware corporation.

"Parent Event of Default": the occurrence of any of the following: (i) Parent shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Parent shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Parent any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against Parent any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against

all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) Parent shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Parent shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (vi) Parent shall default in making any payment of any principal of or interest on any Indebtedness of Parent the outstanding principal amount of which exceeds $150,000,000 on the scheduled or original due date with respect thereto.

"Participant": as defined in Section 9.6(b).

"Payment Office": the office specified from time to time by the Administrative Agent as its payment office by notice to the Borrower and the Lenders.

"PBGC": the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA (or any successor).

"Permitted Cure Security": an equity security of Holdings that is not Disqualified Stock and upon which all dividends or distributions are payable and paid in additional shares of such equity security.

"Permitted Liens": the collective reference to (i) in the case of Collateral other than Pledged Stock, Liens permitted by Section 6.3 and (ii) in the case of Collateral consisting of Pledged Stock, non-consensual Liens permitted by Section 6.3 to the extent arising by operation of law.

"Permits": the collective reference to (i) Environmental Permits, and (ii) any and all other franchises, licenses, leases, permits, approvals, notifications, certifications, registrations, authorizations, exemptions, qualifications, easements, rights of way, Liens and other rights, privileges and approvals required under any Requirement of Law.

"Person": an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

"Plan": at a particular time, any employee benefit plan that is covered by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

"Pledged Notes": as defined in the Guarantee and Collateral Agreement

"Pledged Stock": as defined in the Guarantee and Collateral Agreement.

"PPH": Piceance Production Holdings LLC, a Delaware limited liability company.

"Pro Forma Balance Sheet": as defined in Section 3.1(a).

"Projections": as defined in Section 5.2(e).

"Property": any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock and Hydrocarbon Interests.

"Proved Reserves" those recoverable Hydrocarbons which have been estimated with reasonable certainty, as demonstrated by geological and engineering data, to be economically recoverable from the Borrower's Oil and Gas Properties by existing operating methods under existing economic conditions.

"PV-10 Value": at the particular time in question, the net present value (determined in accordance with the definition of Engineering Report) of the projected future net revenues attributable to the Proved Reserves included in the Borrower's Oil and Gas Properties, as set forth in the Engineering Report most recently provided by the Borrower pursuant to Section 5.2(d).

"Qualified Counterparty": with respect to any Specified Hedge Agreement, any counterparty thereto that, at the time such Specified Hedge Agreement was entered into, was a Lender or an affiliate of a Lender.

"Real Estate": all real property held or used by the Borrower or its Subsidiaries, which the Borrower or the relevant Subsidiary owns in fee or in which it holds a leasehold interest as a tenant.

"Recovery Event": any settlement of or payment in respect of any property or casualty insurance claim or any condemnation proceeding relating to any asset of Holdings, the Borrower or any of the Borrower's Subsidiaries.

"Register": as defined in Section 9.6(d).

"Regulation U": Regulation U of the Board as in effect from time to time.

"Reinvestment Deferred Amount": with respect to any Reinvestment Event, the aggregate Net Cash Proceeds received by Holdings, the Borrower or any of Borrower's Subsidiaries in connection therewith that are not applied to prepay the Term Loans pursuant to Section 2.7(b) as a result of the delivery of a Reinvestment Notice.

"Reinvestment Event": any Asset Sale or Recovery Event in respect of which the Borrower has delivered a Reinvestment Notice.

"Reinvestment Notice": a written notice executed by a Responsible Officer stating that no Default or Event of Default has occurred and is continuing and that the Borrower (directly or indirectly through a Subsidiary) intends and expects to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to make capital expenditures useful in its business or otherwise acquire assets useful in its business.

"Reinvestment Prepayment Amount": with respect to any Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any amount expended prior to the relevant Reinvestment Prepayment Date to make capital expenditures useful in its business or otherwise acquire assets useful in the Borrower's business.

"Reinvestment Prepayment Date": with respect to any Reinvestment Event, the earlier of (a) the date occurring twelve months after such Reinvestment Event and (b) the date on which the Borrower shall have determined not to, or shall have otherwise ceased to undertake to, make capital expenditures useful in the Borrower's business or otherwise acquire assets useful in the Borrower's business with all or any portion of the relevant Reinvestment Deferred Amount.

"Related Fund": with respect to any Lender, any fund that (x) invests as a regular part of its business in commercial loans and (y) is managed or advised by the same investment advisor as such Lender, by such Lender or an Affiliate of such Lender.

"Reorganization": with respect to any Multiemployer Plan, the condition that such plan is in reorganization within the meaning of Section 4241 of ERISA.

"Reportable Event": any of the events set forth in Section 4043(c) of ERISA, other than those events described in Section 4043(c)(3) of ERISA and other than those events as to which the thirty day notice period is waived under subsections .22, .24 (solely with respect to partial termination of a Plan), .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. Section 4043.

"Required Lenders": at any time, the holders of more than 50% of (a) until the Closing Date, the Term Loan Commitments and (b) thereafter, the sum of the aggregate unpaid principal amount of the Term Loans then outstanding.

"Requirement of Law": as to any Person, the Certificate of Incorporation and By Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

"Reserve Report": means a report setting forth the Proved Reserves by reserve category attributable to the Hydrocarbon Interests constituting Proved Reserves owned directly by the Borrower or any Subsidiary thereof, a projection of the rate of production and net operating income with respect thereto, as of a specified date, and such other information as is customarily obtained from and provided in such reports, satisfactory in form and substance to the Administrative Agent. All Reserve Reports prepared after the Closing Date and required by this Agreement or any of the other Loan documents shall be prepared, reviewed or audited in a manner consistent with the past practices of the Borrower by an Approved Engineer.

"Responsible Officer": the chief executive officer, president, senior vice president, chief financial officer, treasurer or controller of the Borrower, but in any event, with respect to financial matters, the chief financial officer, treasurer or controller of the Borrower.

"Restricted Payments": as defined in Section 6.6.

"RMT Senior Notes": the $150,000,000 7.55% Senior Notes due 2007 of the Borrower issued pursuant to the Indenture, dated as of February 1, 1997 (as amended, supplemented or otherwise modified from time to time, the "Senior Note Indenture"), between the Borrower and Bankers Trust Company, as Trustee.

"SEC": the Securities and Exchange Commission (or successors thereto or an analogous Governmental Authority).

"Secured Parties": as defined in the Guarantee and Collateral Agreement.

"Security Documents": the collective reference to the Guarantee and Collateral Agreement, the Mortgages and all other security documents hereafter delivered to the Administrative Agent granting a Lien on any Property of any Person to secure the obligations and liabilities of any Loan Party under any Loan Document.

"Single Employer Plan": any Plan that is covered by Title IV of ERISA, but which is not a Multiemployer Plan.

"Solvent": with respect to any Person, as of any date of determination, (a) the amount of the "present fair saleable value" of the assets of such Person will, as of such date, exceed the amount of all "liabilities of such Person, contingent or otherwise", as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such Person will, as of such date, be greater than the amount that will be required to pay the liability of such Person on its debts as such debts become absolute and matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, and (d) such Person will be able to pay its debts as they mature. For purposes of this definition, (i) "debt" means liability on a "claim", and (ii) "claim" means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

"Specified Hedge Agreement": any Hedge Agreement described in clause (a) of such definition entered into by the Borrower or any Subsidiary and any Qualified Counterparty.

"S&P": Standard & Poor's Rating Services and its successors.

"Subsidiary": as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

"Subsidiary Guarantor": each Subsidiary of the Borrower.

"Term Loan": as defined in Section 2.1.

"Term Loan Commitment": as to any Lender, the obligation of such Lender, if any, to make a Term Loan to the Borrower hereunder in a principal amount not to exceed the amount set forth under the heading "Term Loan Commitment" opposite such Lender's name on Schedule 1 to the Lender Addendum delivered by such Lender, or, as the case may be, in the Assignment and Acceptance pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof. The original aggregate amount of the Term Loan Commitments is $500,000,000.

"Term Loan Percentage": as to any Lender at any time, the percentage which such Lender's Term Loan Commitment then constitutes of the aggregate Term Loan Commitments (or, at any time after the Closing Date, the percentage which the aggregate principal amount of such Lender's Term Loans then outstanding constitutes of the aggregate principal amount of the Term Loans then outstanding).

"Term Note": as defined in Section 2.4(e).

"Total Senior Secured Debt": at any time, an amount equal to the sum of the aggregate principal amount of Indebtedness outstanding at such time under this Agreement.

"Transferee": as defined in Section 9.14.

"Type": as to any Term Loan, its nature as a Base Rate Loan or a Eurodollar Loan.

"UCC": the Uniform Commercial Code as in effect from time to time in the State of New York.

"U.S. Lender": each Lender (or Transferee), each Issuing Lender and each Agent that is a United States person as defined in section 7701(a)(30) of the Code.

"Wholly Owned Subsidiary": as to any Person, any other Person all of the Capital Stock of which (other than directors' qualifying shares required by law) is owned by such Person directly and/or through other Wholly Owned Subsidiaries.

"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is a Wholly Owned Subsidiary of the Borrower.

1.2 Other Definitional Provisions. Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the other Loan Documents or any certificate or other document made or delivered pursuant hereto or thereto.

(a) As used herein and in the other Loan Documents, and any certificate or other document made or delivered pursuant hereto or thereto, accounting terms relating to Holdings, the Borrower and its Subsidiaries not defined in Section 1.1 and accounting terms

partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP.

(b) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(c) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(d) All calculations of financial ratios set forth in
Section 6.1 shall be calculated to the same number of decimal places as the relevant ratios are expressed in and shall be rounded upward if the number in the decimal place immediately following the last calculated decimal place is five or greater. For example, if the relevant ratio is to be calculated to the hundredth decimal place and the calculation of the ratio is 5.126, the ratio will be rounded up to 5.13.

SECTION 2. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS

2.1 Term Loan Commitments. Subject to the terms and conditions hereof, the Lenders severally agree to make term loans (each, a "Term Loan") to the Borrower on the Closing Date in an amount for each Lender not to exceed the amount of the Term Loan Commitment of such Lender. The Term Loans may from time to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with Sections 2.2 and 2.8.

2.2 Procedure for Term Loan Borrowing. The Borrower shall deliver to the Administrative Agent a Borrowing Notice (which Borrowing Notice must be received by the Administrative Agent prior to 10:00 A.M., New York City time, one Business Day prior to the anticipated Closing Date) requesting that the Lenders make the Term Loans on the Closing Date. The Term Loans made on the Closing Date shall initially be Base Rate Loans, and no Term Loan may be converted into or continued as a Eurodollar Loan prior to the date which is 5 Business Days after the Closing Date or such shorter period as may be reasonably acceptable to the Administrative Agent. Upon receipt of such Borrowing Notice the Administrative Agent shall promptly notify each Lender thereof. Not later than 12:00 Noon, New York City time, on the Closing Date each Lender shall make available to the Administrative Agent at the Funding Office an amount in immediately available funds equal to the Term Loan or Term Loans to be made by such Lender. The Administrative Agent shall make available to the Borrower the aggregate of the amounts made available to the Administrative Agent by the Lenders, in like funds as received by the Administrative Agent.

2.3 Repayment of Term Loans. The Term Loan of each Lender shall mature in 16 consecutive quarterly installments, commencing on September 30, 2003, each of which shall be in an amount equal to such Lender's Term Loan Percentage multiplied by the percentage set forth below opposite such installment of the aggregate principal amount of Term Loans made on the Closing Date:

    Installment                          Percentage
    -----------                          ----------
September 30, 2003                         0.25%
December 31, 2003                          0.25%
March 31, 2004                             0.25%
June 30, 2004                              0.25%
September 30, 2004                         0.25%
December 31, 2004                          0.25%
March 31, 2005                             0.25%
June 30, 2005                              0.25%
September 30, 2005                         0.25%
December 31, 2005                          0.25%
March 31, 2006                             0.25%
June 30, 2006                              0.25%
September 30, 2006                         0.25%
December 31, 2006                          0.25%
March 31, 2007                             0.25%
May 30, 2007                              96.25%

2.4 Repayment of Term Loans; Evidence of Debt. The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of the appropriate Lender the principal amount of each Term Loan of such Lender in installments according to the schedule set forth in Section 2.3 (or on such earlier date on which the Term Loans become due and payable pursuant to Section 7.1); provided that the Borrower shall repay the unpaid principal amount of the Term Loans on the Maturity Date. The Borrower hereby further agrees to pay interest on the unpaid principal amount of the Term Loans from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in Section 2.10.

(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to such Lender resulting from each Term Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement.

(b) The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant to Section 9.6(d), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Term Loan made hereunder and any Term Note evidencing such Term Loan, the Type of such Term Loan and each Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) both the amount of any sum received by the Administrative Agent hereunder from the Borrower and each Lender's share thereof.

(c) The entries made in the Register and the accounts of each Lender maintained pursuant to Section 2.4(b) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation

of the Borrower to repay (with applicable interest) the Term Loans made to the Borrower by such Lender in accordance with the terms of this Agreement.

(d) The Borrower agrees that, upon the request to the Administrative Agent by any Lender, the Borrower will promptly execute and deliver to such Lender a promissory note of the Borrower evidencing any Term Loans of such Lender, substantially in the forms of Exhibit G (a "Term Note"), with appropriate insertions as to date and principal amount; provided, that delivery of Term Notes shall not be a condition precedent to the occurrence of the Closing Date or the making of the Term Loans on the Closing Date.

2.5 Fees, etc. The Borrower agrees to pay to the Arrangers and the Agents the fees in the amounts and on the dates previously agreed to in writing by the Borrower, the Arrangers and the Agents.

2.6 Optional Prepayments. The Borrower may at any time and from time to time prepay the Term Loans, in whole or in part, without premium or penalty (except as otherwise provided herein), upon irrevocable notice delivered to the Administrative Agent at least three Business Days prior thereto in the case of Eurodollar Loans and at least one Business Day prior thereto in the case of Base Rate Loans, which notice shall specify the date and amount of such prepayment, and whether such prepayment is of Eurodollar Loans or Base Rate Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.16. Upon receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to such date on the amount prepaid. Partial prepayments of Term Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple thereof.

2.7 Mandatory Prepayments. If any Capital Stock shall be issued (excluding any Capital Stock issued to Parent or any of its Affiliates), or Indebtedness incurred, by Holdings, the Borrower or any of Borrower's Subsidiaries (excluding any Indebtedness incurred in accordance with
Section 6.2(a) to (h), (i) (to the extent set forth therein), and (j) and (k)), then on the date of such issuance or incurrence, the Term Loans shall be prepaid, by an amount equal to the amount of the Net Cash Proceeds of such issuance or incurrence. The provisions of this Section do not constitute a consent to the issuance of any equity securities by any entity whose equity securities are pledged pursuant to the Guarantee and Collateral Agreement, or a consent to the incurrence of any Indebtedness by Holdings, the Borrower or any of the Borrower's Subsidiaries.

(a) If on any date Holdings, the Borrower or any of Borrower's Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be delivered in respect thereof, on the date of receipt by Holdings, the Borrower or any of the Borrower's Subsidiaries of such Net Cash Proceeds, the Term Loans shall be prepaid by an amount equal to the amount of such Net Cash Proceeds; provided that such prepayment of the Term Loans need not be made pursuant to this Section 2.7(b) until the Borrower or any of its Subsidiaries shall have received at least $10,000,000 in Net Cash Proceeds in the aggregate from Asset Sales or Recovery Events, at which time, such $10,000,000

in Net Cash Proceeds from any Asset Sales or Recovery Events and all further Net Cash Proceeds from any Asset Sales or Recovery Events received prior to application, shall be promptly applied to the prepayment of the Term Loans as set forth in this Section 2.7(b) and after giving effect to such prepayment the foregoing $10,000,000 basket shall be reinstated; and provided, further, that, notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales and Recovery Events that may be excluded from the foregoing requirement pursuant to a Reinvestment Notice shall not exceed $50,000,000 in any fiscal year of the Borrower and (ii) on each Reinvestment Prepayment Date the Term Loans shall be prepaid by an amount equal to the Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event. The provisions of this Section do not constitute a consent to the consummation of any Disposition not permitted by Section 6.5.

2.8 Conversion and Continuation Options. The Borrower may elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving the Administrative Agent at least two Business Days' prior irrevocable notice of such election, provided that any such conversion of Eurodollar Loans may be made only on the last day of an Interest Period with respect thereto. The Borrower may elect from time to time to convert Base Rate Loans to Eurodollar Loans by giving the Administrative Agent at least three Business Days' prior irrevocable notice of such election (which notice shall specify the length of the initial Interest Period therefor), provided that no Base Rate Loan may be converted into a Eurodollar Loan (i) when any Event of Default has occurred and is continuing and the Administrative Agent has, or the Required Lenders have, determined in its or their sole discretion not to permit such conversions or
(ii) after the date that is one month prior to the final scheduled termination or maturity date of the Facility. Upon receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof.

(a) The Borrower may elect to continue any Eurodollar Loan as such upon the expiration of the then current Interest Period with respect thereto by giving irrevocable notice to the Administrative Agent, in accordance with the applicable provisions of the term "Interest Period" set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Term Loans, provided that no Eurodollar Loan may be continued as such
(i) when any Event of Default has occurred and is continuing and the Administrative Agent has, or the Required Lenders have, determined in its or their sole discretion not to permit such continuations or (ii) after the date that is one month prior to the final scheduled termination or maturity date of the Facility, and provided, further, that if the Borrower shall fail to give any required notice as described above in this paragraph or if such continuation is not permitted pursuant to the preceding proviso, such Term Loans shall be converted automatically to Base Rate Loans on the last day of such then expiring Interest Period. Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender thereof.

2.9 Minimum Amounts and Maximum Number of Eurodollar Tranches. Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions, continuations and optional prepayments of Eurodollar Loans and all selections of Interest Periods shall be in such amounts and be made pursuant to such elections so that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any one time.

2.10 Interest Rates and Payment Dates. Each Eurodollar Loan shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate determined for such day plus the Applicable Margin.

(a) Each Base Rate Loan shall bear interest for each day on which it is outstanding at a rate per annum equal to the Base Rate in effect for such day plus the Applicable Margin.

(b) (i) If all or a portion of the principal amount of any Term Loan shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), all Obligations (whether or not overdue) (to the extent legally permitted) shall bear interest at a rate per annum that is equal to the rate that would otherwise be applicable thereto pursuant to the foregoing provisions of this Section plus 2% and (ii) if all or a portion of any interest payable on any Term Loan or any fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the rate then applicable to Base Rate Loans plus 2%, in each case, with respect to clauses (i) and (ii) above, from the date of such non payment until such amount is paid in full (after as well as before judgment).

(c) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.

2.11 Computation of Interest and Fees. Interest, fees, commissions payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that, with respect to Base Rate Loans on which interest is calculated on the basis of the Prime Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be) day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each determination of a Eurodollar Rate. Any change in the interest rate on a Term Loan resulting from a change in the Base Rate or the Eurocurrency Reserve Requirements shall become effective as of the opening of business on the day on which such change becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of the effective date and the amount of each such change in interest rate.

(a) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.10(a).

2.12 Inability to Determine Interest Rate. If prior to the first day of any Interest Period:

(a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting

the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or

(b) the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Term Loans during such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as practicable thereafter. If such notice is given (x) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans, (y) any Term Loans that were to have been converted on the first day of such Interest Period to Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans shall be converted, on the last day of the then current Interest Period with respect thereto, to Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Term Loans to Eurodollar Loans.

2.13 Pro Rata Treatment and Payments. Each borrowing by the Borrower from the Lenders hereunder shall be made pro rata according to the respective Term Loan Percentages of the Lenders. Each payment (other than prepayments) in respect of principal or interest in respect of the Term Loans and each payment in respect of fees payable hereunder shall be applied to the amounts of such obligations owing to the Lenders pro rata according to the respective amounts then due and owing to the Lenders.

(a) Each payment (including each prepayment) of the Term Loans shall be allocated among the Lenders holding such Term Loans pro rata based on the principal amount of such Term Loans held by such Lenders, and shall be applied to the installments of such Term Loans pro rata based on the remaining outstanding principal amount of such installments. Amounts prepaid on account of the Term Loans may not be reborrowed.

(b) The application of any payment of Term Loans (including optional and mandatory prepayments) shall be made, first, to Base Rate Loans and, second, to Eurodollar Loans. Each payment of the Term Loans shall be accompanied by accrued interest to the date of such payment on the amount paid.

(c) All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Payment Office, in Dollars and in immediately available funds. Any payment made by the Borrower after 12:00 Noon, New York City time, on any Business Day shall be deemed to have been on the next following Business Day. The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to

extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.

(d) Unless the Administrative Agent shall have been notified in writing by any Lender prior to the Closing Date that such Lender will not make the amount that would constitute its share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by the required time on the Closing Date, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the daily average Federal Funds Effective Rate for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest error. If such Lender's share of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days after such Closing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon at the rate per annum applicable to Base Rate Loans, on demand, from the Borrower.

(e) Unless the Administrative Agent shall have been notified in writing by the Borrower prior to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is making such payment, and the Administrative Agent may, but shall not be required to, in reliance upon such assumption, make available to the Lenders their respective pro rata shares of a corresponding amount. If such payment is not made to the Administrative Agent by the Borrower within three Business Days after such due date, the Administrative Agent shall be entitled to recover, on demand, from each Lender to which any amount which was made available pursuant to the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower.

2.14 Requirements of Law. If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

(i) shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement or any Eurodollar Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by Section 2.15 and changes in the rate of tax on the overall net income of such Lender);

(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the Eurodollar Rate hereunder; or

(iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender, by an amount which such Lender deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, within 30 days of written demand therefor, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled.

(b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender's or such corporation's capital as a consequence of its obligations hereunder or under to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request therefor, the Borrower shall pay to such Lender within 30 days of such written demand therefor, such additional amount or amounts as will compensate such Lender or such corporation for such reduction.

(c) A certificate describing in reasonable detail the basis for any additional amounts payable pursuant to this Section submitted by any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. The Borrower shall not be obligated to make any payment to any Lender under this Section which is attributable to any period of time occurring more than 180 days prior to the date of any certificate delivered pursuant to the preceding sentence. The obligations of the Borrower pursuant to this Section shall survive the termination of this Agreement and the payment of the Term Loans and all other amounts payable hereunder.

2.15 Taxes. All payments made by the Borrower or any other Loan Party under this Agreement and the other Loan Documents shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on any Agent or

any Lender as a result of a present or former connection between such Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from such Agent's or such Lender's having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any other Loan Document). If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") or any Other Taxes are required to be withheld from any amounts payable to any Agent or any Lender hereunder, the amounts so payable to such Agent or such Lender shall be increased to the extent necessary to yield to such Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement; provided, however, that the Borrower or any other Loan Party shall not be required to increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to such Lender's failure to comply with the requirements of paragraph (d) or (e) of this Section or (ii) that are United States withholding taxes imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement, except to the extent that such Lender's assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph (a).

(a) In addition, the Borrower and each other Loan Party shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(b) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower or any other Loan Party, as promptly as possible thereafter the Borrower or such other Loan Party shall send to the Administrative Agent for the account of the relevant Agent or Lender, as the case may be, a certified copy of an original official receipt received by the Borrower or any other Loan Party showing payment thereof. If the Borrower or such other Loan Party fails to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, the Borrower and each other Loan Party shall indemnify the Agents and the Lenders for the full amount of Non-Excluded Taxes or Other Taxes and any incremental taxes, interest or penalties that may become payable by any Agent or any Lender as a result of any such failure. The agreements in this Section 2.15 shall survive the termination of this Agreement and the payment of the Term Loans and all other amounts payable hereunder.

(c) (i) Each Lender (or Transferee) and each administrative agent that is not a person (as defined in section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender entitled to exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio interest" a Form W-8BEN, or any subsequent versions thereof or successors thereto properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrower under this Agreement and the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related

participation). In addition, each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to deliver.

(ii) Each U.S. Lender shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of U.S. Internal Revenue Service Form W-9, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such U.S. Lender certifying that such Lender is entitled to an exemption from United States backup withholding tax on all payments by the Borrower under this Agreement and the other Loan Documents. Such forms shall be delivered by each U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation). In addition, each U.S. Lender shall deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such U.S. Lender. Each U.S. Lender shall promptly notify the Borrower at any time it determines that it is no longer in a position to provide any previously delivered certificate to the Borrower (or any other form of certification adopted by the U.S. taxing authorities for such purpose). Solely for purposes of this Section 2.15(d), a U.S. Lender shall not include a Lender (or Transferee), or Issuing Lender or Agent, as the case may be, that is treated as an exempt recipient based on the indicators described in Treasury Regulation section 1.6049-4(c)(1)(ii).

(d) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Borrower, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate, provided that such Lender is legally entitled to complete, execute and deliver such documentation and in such Lender's reasonable judgment such completion, execution or submission would not materially prejudice the legal position of such Lender.

2.16 If any payment of principal, or conversion, of any Eurodollar Loan made to the Borrower is made other than on the last day of an Interest Period relating to such Eurodollar Loan, as a result of a payment made pursuant to Section 2.6 or 2.7 or acceleration of the maturity of such Eurodollar Loan pursuant to Section 7.1 or for any other reason or any conversion pursuant to Section 2.8, the Borrower shall, upon demand of any Lender (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Lender any amounts required to compensate such Lender for any additional losses, costs or expenses which it may reasonably incur as a result of any such payment, purchase or conversion, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain such Eurodollar Loan.

2.17 Illegality. Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such suspension no longer exist and (b) such Lender's Term Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Term Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to Section 2.16.

2.18 Change of Lending Office. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.14, 2.15(a) or 2.17 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Term Loans affected by such event with the object of avoiding the consequences of such event; provided, that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of any Borrower or the rights of any Lender pursuant to Section 2.14, 2.15(a) or 2.17.

2.19 Replacement of Lenders under Certain Circumstances. The Borrower shall be permitted to replace any Lender that (a) requests reimbursement for amounts owing pursuant to Section 2.14 or 2.15 or gives a notice of illegality pursuant to Section 2.17 or (b) defaults in its obligation to make Term Loans hereunder, with a replacement financial institution; provided that (i) such replacement does not conflict with any Requirement of Law, (ii) no Event of Default shall have occurred and be continuing at the time of such replacement, (iii) prior to any such replacement, such Lender shall have taken no action under Section 2.18 so as to eliminate the continued need for payment of amounts owing pursuant to Section 2.14 or 2.15 or to eliminate the illegality referred to in such notice of illegality given pursuant to Section 2.17, (iv) the replacement financial institution shall purchase, at par, all Term Loans and other amounts owing to such replaced Lender on or prior to the date of replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.16 (as though Section 2.16 were applicable) if any Eurodollar Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest Period relating thereto, (vi) the replacement financial institution, if not already a Lender, shall be reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender shall be obligated to make such replacement in accordance with the provisions of Section 9.6 (provided that the Borrower shall be obligated to pay the registration and processing fee referred to therein), (viii) the Borrower shall pay all additional amounts (if any) required pursuant to Section 2.14 or 2.15, as the case may be, in respect of any period prior to the date on which such replacement shall be consummated, and
(ix) any such replacement shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any other Lender shall have against the replaced Lender.

SECTION 3. REPRESENTATIONS AND WARRANTIES

To induce the Arrangers, the Agents and the Lenders to enter into this Agreement and to make the Term Loans, Holdings and the Borrower hereby jointly and severally represent and warrant to each Arranger, each Agent and each Lender that:

3.1 Financial Condition. The unaudited pro forma consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at March 31, 2003 (the "Pro Forma Balance Sheet"), copies of which have heretofore been furnished to each Lender, has been prepared giving effect (as if such events had occurred on such date) to (i) the Term Loans to be made on the Closing Date and the use of proceeds thereof and (ii) the payment of fees and expenses in connection with the foregoing. The Pro Forma Balance Sheet has been prepared based on the best information available to the Borrower as of the date of delivery thereof, and presents fairly on a pro forma basis the estimated financial position of Borrower and its consolidated Subsidiaries as at March 31, 2003, assuming that the events specified in the preceding sentence had actually occurred at such date.

(a) The audited consolidated balance sheet of the Borrower and its Subsidiaries as at December 31, 2002, and the related consolidated statements of income and of cash flows for the fiscal year ended on such date, and the audited consolidated balance sheet of the Borrower and its Subsidiaries as at December 31, 2001, and the related consolidated statements of income and of cash flows for the period from May 4, 2001 to December 31, 2001, each reported on by and accompanied by an unqualified report from Ernst & Young LLP, present fairly the consolidated financial condition of the Borrower and its Subsidiaries as at such date, and the consolidated results of its operations and its consolidated cash flows for the respective periods then ended. The unaudited consolidated balance sheet of the Borrower and its Subsidiaries as at March 31, 2003, and the related unaudited consolidated statements of income and cash flows for the 3-month period ended on such date, present fairly the consolidated financial condition of the Borrower and its Subsidiaries as at such date, and the consolidated results of its operations and its consolidated cash flows for the respective period then ended (subject to normal year-end audit adjustments). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein and the absence of footnotes in unaudited statements). Except for the Holdings Subordinated Guaranty and intercompany Indebtedness eliminated in a consolidation of Holdings and its Subsidiaries, Holdings, the Borrower and Borrower's Subsidiaries do not have any material Guarantee Obligations, contingent liabilities and liabilities for taxes, or any long term leases or unusual forward or long term commitments, including, without limitation, any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, that are not reflected in the most recent financial statements referred to in this paragraph or the footnotes thereto. Except as disclosed on Schedule 3.1, during the period from December 31, 2002 to and including the date hereof there has been no Disposition by the Borrower and its Subsidiaries of any material part of its business or Property.

3.2 No Change. Since December 31, 2002, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

3.3 Corporate Existence; Compliance with Law. Each of Holdings, the Borrower and the Borrower's Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (b) has the corporate or equivalent power and authority to own and operate its Property, to lease the Property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where its ownership, lease or operation of Property or the conduct of its business requires such qualification and (d) is in compliance with all Requirements of Law, except in the case of clauses (c) and (d), to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

3.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan Party has the corporate or equivalent power and authority to make, deliver and perform the Loan Documents to which it is a party and, in the case of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary corporate or other action to authorize the execution, delivery and performance of the Loan Documents to which it is a party and, in the case of the Borrower, to authorize the borrowings on the terms and conditions of this Agreement. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or the execution, delivery, performance, validity or enforceability of this Agreement or any of the other Loan Documents, except (i) consents, authorizations, filings and notices described in Schedule 3.4, which consents, authorizations, filings and notices have been obtained or made and are in full force and effect and (ii) the filings referred to in Section 3.19. This Agreement has been, and each other Loan Document to which any Loan Party is a party will be, duly executed and delivered on behalf of each Loan Party that is a party thereto. This Agreement constitutes, and each other Loan Document upon execution will constitute, a legal, valid and binding obligation of each Loan Party that is a party thereto, enforceable against each such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

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

3.6 No Material Litigation. Except as set forth on Schedule 3.6 (any such litigation set forth therein could not, in the judgment of the Borrower, reasonably be expected to have a Material Adverse Effect), no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of Holdings or the Borrower, threatened by or against Holdings, the Borrower or any of the Borrower's Subsidiaries

or against any of their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse Effect.

3.7 No Default. Neither Holdings, the Borrower nor any of the Borrower's Subsidiaries is in default under or with respect to any of its Contractual Obligations in any respect that could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.

3.8 Ownership of Property; Liens. Each of Holdings, the Borrower and the Borrower's Subsidiaries has a valid interest in all its Property, and none of such Property is subject to any Lien other than Permitted Liens and imperfections in title that do not in the aggregate materially detract from the value or use of such Property in the business of Borrower and its Subsidiaries.

3.9 Intellectual Property. Each of Holdings, the Borrower and the Borrower's Subsidiaries owns, or is licensed to use, all Intellectual Property necessary for the conduct of its business as currently conducted. No material claim has been asserted and is pending by any Person challenging or questioning the use of any Intellectual Property or the validity or effectiveness of any Intellectual Property, nor does Holdings or the Borrower know of any valid basis for any such claim. The use of Intellectual Property by Holdings, the Borrower and the Borrower's Subsidiaries does not infringe on the rights of any Person in any material respect.

3.10 Taxes. Each of Holdings, the Borrower and each of their respective Subsidiaries has filed or caused to be filed all Federal, state and other material tax returns that are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its Property and all other material taxes, fees or other charges imposed on it or any of its Property by any Governmental Authority (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of Holdings, the Borrower or their respective Subsidiaries, as the case may be); and no tax Lien has been filed that is not a Permitted Lien, and, to the knowledge of Holdings and the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge.

3.11 Federal Regulations. No part of the proceeds of any Term Loans will be used for "purchasing" or "carrying" any "margin stock" within the respective meanings of each of the quoted terms under Regulation U as now and from time to time hereafter in effect or for any purpose that violates the provisions of the Regulations of the Board. If requested by any Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U 1 referred to in Regulation U.

3.12 Labor Matters. There are no strikes or other labor disputes against Holdings, the Borrower or any of the Borrower's Subsidiaries pending or, to the knowledge of Holdings or the Borrower, threatened that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. Hours worked by and payment made to employees of Holdings, the Borrower and the Borrower's Subsidiaries have not been in violation of the Fair

Labor Standards Act or any other applicable Requirement of Law dealing with such matters that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect. All payments due from Holdings, the Borrower or any of the Borrower's Subsidiaries on account of employee health and welfare insurance that (individually or in the aggregate) could reasonably be expected to have a Material Adverse Effect if not paid have been paid or accrued as a liability on the books of Holdings, the Borrower or the relevant Subsidiary.

3.13 ERISA. Except as set forth on Schedule 3.13, neither a Reportable Event nor an "accumulated funding deficiency" (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five year period prior to the date on which this representation is made with respect to any Plan. Each Plan has complied in all material respects with the applicable provisions of ERISA and the Code. No termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period. Except as set forth on Section 3.13, the present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made, exceed the value of the assets of such Plan allocable to such accrued benefits by a material amount. Neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to result in a material liability under ERISA, and neither the Borrower nor any Commonly Controlled Entity would become subject to any material liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.

3.14 Investment Company Act; Other Regulations. No Loan Party is an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. No Loan Party is subject to regulation under any Requirement of Law (other than Regulation X of the Board) which limits its ability to incur Indebtedness.

3.15 Subsidiaries. The Subsidiaries listed on Schedule 3.15 constitute all the Subsidiaries of Holdings at the date hereof. Schedule 3.15 sets forth as of the Closing Date the name and jurisdiction of incorporation of each Subsidiary of Holdings and, as to each Subsidiary, the percentage of each class of Capital Stock owned by each Loan Party.

(a) There are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors' qualifying shares) of any nature relating to any Capital Stock of Holdings, the Borrower or any of the Borrower's Subsidiaries.

3.16 Use of Proceeds. The proceeds of the Term Loans shall be used (i) to repay in part loans outstanding under, and other amounts due in respect of, the Existing Credit Agreement, and to pay related fees and expenses, and (ii) for general corporate purposes.

3.17 Environmental Matters. Except as set forth on Schedule 3.17 (provided, however, that any such matters set forth therein could not, in the judgment of the Borrower,

reasonably be expected to have a Material Adverse Effect) and other than exceptions to any of the following that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect:

(a) Holdings, the Borrower and the Borrower's Subsidiaries: (i) are, and within the period of all applicable statutes of limitation have been, in compliance with all applicable Environmental Laws; (ii) hold all Environmental Permits (each of which is in full force and effect) required for any of their current operations or for any property owned, leased, or otherwise operated by any of them; (iii) are, and within the period of all applicable statutes of limitation have been, in compliance with all of their Environmental Permits; and (iv) reasonably believe that: each of their Environmental Permits will be timely renewed and complied with; any additional Environmental Permits that may be required of any of them will be timely obtained and complied with; and compliance with any Environmental Law that is or is expected to become applicable to any of them will be timely attained and maintained.

(b) Materials of Environmental Concern are not present at, on, under, in, or about any real property now or formerly owned, leased or operated by Holdings, the Borrower or any of the Borrower's Subsidiaries, or at any other location (including, without limitation, any location to which Materials of Environmental Concern have been sent for re-use or recycling or for treatment, storage, or disposal) which could reasonably be expected to (i) give rise to liability of Holdings, the Borrower or any of the Borrower's Subsidiaries under any applicable Environmental Law or otherwise result in costs to Holdings, the Borrower or any of the Borrower's Subsidiaries, or (ii) interfere with Holdings', the Borrower's or any of the Borrower's Subsidiaries' continued operations, or (iii) impair the fair saleable value of any real property owned or leased by Holdings, the Borrower or any of the Borrower's Subsidiaries.

(c) There is no judicial, administrative, or arbitral proceeding (including any notice of violation or alleged violation) under or relating to any Environmental Law to which Holdings, the Borrower or any of the Borrower's Subsidiaries is, or to the knowledge of Holdings or the Borrower will be, named as a party that is pending or, to the knowledge of Holdings or the Borrower, threatened.

(d) None of Holdings, the Borrower or any of the Borrower's Subsidiaries has received any written request for information, or been notified that it is a potentially responsible party under or relating to the federal Comprehensive Environmental Response, Compensation, and Liability Act or any similar Environmental Law.

(e) None of Holdings, the Borrower or any of the Borrower's Subsidiaries has entered into or agreed to any consent decree, order, or settlement or other agreement, or is subject to any judgment, decree, or order or other agreement, in any judicial, administrative, arbitral, or other forum for dispute resolution, relating to compliance with or liability under any Environmental Law.

(f) None of Holdings, the Borrower or any of the Borrower's Subsidiaries has assumed or retained, by contract or operation of law, any liabilities of any kind, fixed or contingent, known or unknown, under any Environmental Law.

3.18 Accuracy of Information, etc. No statement or information contained in this Agreement, any other Loan Document, the Confidential Information Memorandum or any other document, certificate or statement (other than projections and the financial statements of the Borrower for fiscal years 1998, 1999 and 2000 and the first 7 months of fiscal year 2001) furnished to the Arrangers, the Administrative Agent, any other Agent or the Lenders or any of them, by or on behalf of any Loan Party for use in connection with the transactions contemplated by this Agreement or the other Loan Documents, contained as of the date such statement, information, document or certificate was so furnished (or, in the case of the Confidential Information Memorandum, as of the date of this Agreement) and taken as a whole, any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements contained herein or therein not misleading. The projections and pro forma financial information contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of Holdings and the Borrower to be reasonable at the time made, it being recognized by the Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount. There is no fact known to any Loan Party that could reasonably be expected to have a Material Adverse Effect that has not been expressly disclosed herein, in the other Loan Documents, in the Confidential Information Memorandum or in any other documents, certificates and statements furnished to the Arrangers, the Administrative Agent, any other Agent and the Lenders for use in connection with the transactions contemplated hereby and by the other Loan Documents.

3.19 Security Documents. The Guarantee and Collateral Agreement is effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein and proceeds thereof. In the case of the Pledged Stock described in the Guarantee and Collateral Agreement, when any stock certificates representing such Pledged Stock are delivered to the Administrative Agent, and in the case of the other Collateral described in the Guarantee and Collateral Agreement, when financing statements in appropriate form are filed in the offices specified on Schedule 3.19(a)-1 (which financing statements have been duly completed and executed, delivered to and authorized to be filed by the Administrative Agent) and such other filings as are specified on Schedule 3 to the Guarantee and Collateral Agreement have been completed, the Guarantee and Collateral Agreement shall constitute (to the extent perfection can be accomplished by filings of UCC financing statements or the delivery and possession of Pledged Stock or Pledged Notes) a fully perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds thereof, as security for the Obligations (as defined in the Guarantee and Collateral Agreement), in each case prior and superior in right to any other Person (except, in the case of Collateral other than Pledged Stock, Permitted Liens). Schedule 3.19(a)-2 lists each UCC Financing Statement that (i) names any Loan Party as debtor and (ii) will remain on file after the Closing Date. Schedule 3.19(a)-3 lists each UCC Financing Statement that (i) names any Loan Party as debtor and (ii) will be terminated on or prior to the Closing Date; and on or prior to the Closing Date, the Borrower will have delivered to the Administrative Agent, or caused to be filed, duly completed UCC termination statements, authorized or authenticated by the relevant secured party, in respect of each UCC Financing Statement listed in Schedule 3.19(a)-3.

(a) Upon the due execution and recordation thereof, each of the Mortgages will be effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a legal, valid, binding and enforceable Lien on, and security interest in, the Mortgaged Properties described, and as defined, therein and proceeds and products thereof, and when the Mortgages are filed in the offices specified on Schedule 3.19(b), each such Mortgage shall constitute a fully perfected first-priority Lien on, and security interest in, all of the Mortgaged Properties and the proceeds and products thereof, as security for the Obligations, in each case prior and superior in right to any Liens of any other Person other than Permitted Liens.

3.20 Solvency. The Loan Parties are, taken as a whole, and after giving effect to the incurrence of all Indebtedness and obligations being incurred in connection herewith will be, and will continue to be, Solvent.

3.21 Hydrocarbon Interests. As of the Closing Date, Schedule 3.21 sets forth a list of all of the Hydrocarbon Interests consisting of oil and gas leaseholds, mineral interests, royalty and overriding royalty interests in which the Borrower or any of its Subsidiaries has an interest.

3.22 Permits. Except as set forth in Section 3.17 (provided, however, that any such matters set forth therein could not, in the judgment of the Borrower, reasonably be expected to have a Material Adverse Effect) and other than exceptions to any of the following that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect: (i) each of Holdings, the Borrower and the Borrower's Subsidiaries has obtained and holds all Permits required in respect of all Real Estate and for any other property otherwise operated by or on behalf of, or for the benefit of, such Person and for the operation of each of its businesses as presently conducted, (ii) all such Permits are in full force and effect, and each of Holdings, the Borrower and the Borrower's Subsidiaries has performed and observed all requirements of such Permits, (iii) no event has occurred which allows or results in, or after notice or lapse of time would allow or result in, revocation or termination by the issuer thereof or in any other impairment of the rights of the holder of any such Permit, (iv) no such Permits contain any restrictions, either individually or in the aggregate, that are materially burdensome to Holdings, the Borrower or any of the Borrower's Subsidiaries, or to the operation of any of its businesses or any property owned, leased or otherwise operated by such Person, (v) each of Holdings, the Borrower and the Borrower's Subsidiaries reasonably believes that the Permits necessary for the operation of its Oil and Gas Business, taken as a whole, will be renewed and complied with and that any additional permits necessary for the operation of its Oil and Gas Business, taken as a whole, will be obtained and complied with.

(a) Except as set forth on Schedule 3.22(b) and except for filings and recordings required for the perfection of Liens, no consent or authorization of, filing with, Permit from, or other act by or in respect of, any Governmental Authority is required in connection with the execution, delivery, performance, validity or enforceability of, or enforcement of remedies (including, without limitation, foreclosure on the Collateral) pursuant to, this Agreement and the other Loan Documents.

3.23 Lease Payments. Each of Holdings, the Borrower and the Borrower's Subsidiaries has paid all royalties and payments required to be made by it under leases of Oil and

Gas Properties (except for properties abandoned in the ordinary course of business or with respect to which the failure to pay such royalties and other payments could not reasonably be expected to have a Material Adverse Effect) where any of the Collateral is or may be located from time to time (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of Holdings, the Borrower or such Subsidiary, as the case may be); to the knowledge of Holdings or the Borrower, no claim is being asserted with respect to any such payments that, individually or in the aggregate, could be reasonably expected to have a Material Adverse Effect.

3.24 Public Utility Holding Company Act. Neither the Borrower nor any of its Subsidiaries 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, as amended.

SECTION 4. CONDITIONS PRECEDENT

4.1 Conditions to the Term Loan. The agreement of each Lender to make the Term Loan requested to be made by it hereunder is subject to the satisfaction, prior to or concurrently with the making of such Term Loan on the Closing Date, of the following conditions precedent:

(a) Loan Documents. The Administrative Agent shall have received (i) this Agreement, executed and delivered by a duly authorized officer of Holdings and the Borrower, (ii) the Guarantee and Collateral Agreement, executed and delivered by a duly authorized officer of Holdings, the Borrower and each Subsidiary Guarantor, and (iii) a Lender Addendum executed and delivered by each Lender and accepted by the Borrower.

(b) Pro Forma Balance Sheet; Financial Statements. The Lenders shall have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated financial statements of the Borrower and its Subsidiaries for the 1998, 1999, 2000 and 2002 fiscal years, (iii) audited consolidated financial statements of the Borrower and its Subsidiaries for the period from August 1, 2001 to December 31, 2001, (iv) unaudited consolidated financial statements of the Borrower and its Subsidiaries for the period from January 1, 2001 to July 31, 2001 (without footnotes) and (v) unaudited interim consolidated financial statements of the Borrower and its Subsidiaries for the fiscal quarter of the Borrower ended March 31, 2003; and such financial statements shall not, in the reasonable judgment of the Lenders, reflect any material adverse change in the consolidated financial condition of the Borrower and its Subsidiaries, as reflected in the financial statements or projections contained in the Confidential Information Memorandum.

(c) Approvals. All governmental and third party approvals (including landlords' and other consents) necessary or, in the reasonable judgment of the Administrative Agent, advisable in connection with the continuing operations of Holdings, the Borrower and the Borrower's Subsidiaries and the transactions contemplated hereby shall have been obtained and be in full force and effect.

(d) Related Agreements. The Administrative Agent shall have received (in a form reasonably satisfactory to the Administrative Agent), true and correct copies, certified as to authenticity by the Borrower, of such documents or instruments as may be reasonably requested by the Administrative Agent, including, without limitation, a copy of any debt instrument, security agreement or other material contract to which Parent or any Loan Party may be a party that is requested by the Administrative Agent.

(e) Termination of Existing Credit Agreement. The Administrative Agent shall have received evidence reasonably satisfactory to the Administrative Agent that the Existing Credit Agreement shall be simultaneously terminated, all amounts thereunder shall be simultaneously paid in full and arrangements reasonably satisfactory to the Administrative Agent shall have been made for the termination of Liens and security interests granted in connection therewith.

(f) Fees. The Administrative Agent and the other Agents shall have received all fees required to be paid, and all expenses for which invoices have been presented (including reasonable fees, disbursements and other charges of Weil, Gotshal & Manges LLP and LeBoeuf Lamb, Greene & MacRae, L.L.P., counsel to the Administrative Agent), on or before the Closing Date. All such amounts will be paid with proceeds of Term Loans made on the Closing Date and will be reflected in the funding instructions given by the Borrower to the Administrative Agent on or before the Closing Date.

(g) Business Plan. The Lenders shall have received satisfactory business projections for fiscal years 2003 - 2007.

(h) Solvency Certification. The Lenders shall have received a Solvency Certificate, substantially in the form of Exhibit J, from the treasurer or controller of Holdings and the Borrower, which shall document the solvency of Holdings, the Borrower and the Borrower's Subsidiaries considered as a whole after giving effect to the transactions contemplated hereby.

(i) Lien Searches. The Administrative Agent shall have received the results of a recent lien search in each of the jurisdictions in which Uniform Commercial Code financing statements or other filings or recordations have been or should be made to evidence or perfect security interests in all assets of the Loan Parties, and such search shall reveal no liens on any of the assets of the Loan Party, except for Liens permitted by
Section 6.3.

(j) Reserve Reports. The Administrative Agent shall have received a Reserve Report dated as of December 31, 2002, covering the Hydrocarbon Interests of the Borrower and its Subsidiaries, in form and substance satisfactory to the Administrative Agent.

(k) Closing Certificate. The Administrative Agent shall have received a certificate of each Loan Party, dated the Closing Date, substantially in the form of Exhibit C, with appropriate insertions and attachments.

(l) Legal Opinions. The Administrative Agent shall have received the following executed legal opinions:

(i) the legal opinion of Gibson, Dunn & Crutcher LLP, counsel to Holdings, the Borrower and the Borrower's Subsidiaries, substantially in the form of Exhibit F-1;

(ii) the legal opinion of Davis Graham & Stubbs LLP, counsel to the Borrower, substantially in the form of Exhibit F-2; and

(iii) such other legal opinions of local counsel as are requested by the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent.

Each such legal opinion shall cover such other matters incident to the transactions contemplated by this Agreement as the Administrative Agent may reasonably require.

(m) Pledged Stock; Stock Powers; Acknowledgment and Consent; Pledged Notes. The Administrative Agent shall have received (i) the certificates representing the shares of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof, (ii) an Acknowledgment and Consent, substantially in the form of Annex II to the Guarantee and Collateral Agreement, duly executed by any issuer of Capital Stock pledged pursuant to the Guarantee and Collateral Agreement that is not itself a party to the Guarantee and Collateral Agreement and (iii) each promissory note pledged pursuant to the Guarantee and Collateral Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank satisfactory to the Administrative Agent) by the pledgor thereof.

(n) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing statement) required by the Security Documents or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by
Section 6.3 and Liens subject to releases delivered at Closing), shall have been filed, registered or recorded or shall have been delivered to the Administrative Agent be in proper form for filing, registration or recordation.

(o) Oil and Gas Mortgages. The Lenders shall have received, in form satisfactory for filing, Mortgages on each of the Borrower's Oil and Gas Properties, other than those set forth on Schedules 6.5(f)(i) or 6.5(i) or any Oil and Gas Property with a fair market value as of the Closing Date of less than $2,000,000 (so long as the aggregate fair market value of the Properties excluded by the Borrower from inclusion in the Collateral as a result of such threshold at any time does not exceed $10,000,000 in the aggregate).

(p) Insurance. The Administrative Agent shall have received insurance certificates satisfying the requirements of Section 5.3 of the Guarantee and Collateral Agreement.

(q) Minimum Rating. The Facility shall have been assigned a senior secured credit rating of not less than B3 from Moody's and B+ from S&P, which ratings shall remain in effect on the Closing Date.

(r) Environmental. The Lenders shall be reasonably satisfied with the environmental affairs of the Borrower and its Subsidiaries.

(s) Representations and Warranties. Each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct on and as of the Closing Date.

(t) No Default. No Default or Event of Default shall have occurred and be continuing on the Closing Date or after giving effect to the Term Loans requested to be made on the Closing Date.

SECTION 5. AFFIRMATIVE COVENANTS

Holdings and the Borrower hereby jointly and severally agree that, so long as any Term Loan or other amount is owing to any Lender, any Arranger or any Agent hereunder, each of Holdings and the Borrower shall and shall cause each of the Borrower's Subsidiaries to:

5.1 Financial Statements. Furnish to the Administrative Agent for the benefit of each Lender:

(a) as soon as available, but in any event within 105 days after the end of each fiscal year of the Borrower, a copy of the audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the related audited consolidated statements of income and of cash flows for such year, setting forth in each case in comparative form the figures as of the end of and for the previous year, reported on without a "going concern" or like qualification or exception, or qualification arising out of the scope of the audit, by Ernst & Young LLP or other independent certified public accountants of nationally recognized standing;

(b) as soon as available, but in any event not later than 60 days after the end of each of the first three quarterly periods of each fiscal year of the Borrower, the unaudited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such quarter and the related unaudited consolidated statements of income and of cash flows for such quarter and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures as of the end of and for the corresponding period in the previous year, certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year end audit adjustments and the absence of footnotes); and

all such financial statements to be prepared in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein) and to present fairly the financial condition of the Borrower and its Subsidiaries as of the dates thereof and the results of operations for the periods covered thereby.

5.2 Certificates; Other Information. Furnish to the Administrative Agent:

(a) concurrently with the delivery of the financial statements referred to in Section 5.1(a), a certificate of the independent certified public accountants reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default, except as specified in such certificate;

(b) concurrently with the delivery of any financial statements pursuant to Section 5.1, (i) a certificate of a Responsible Officer stating that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate and (ii) in the case of quarterly or annual financial statements, (x) a Compliance Certificate containing all information and calculations necessary for determining compliance by the Borrower with Section 6.1 as of the last day of the fiscal quarter or fiscal year of the Borrower, as the case may be, and (y) to the extent not previously disclosed to the Administrative Agent in writing, a listing of any county and state, where any Loan Party has an Oil and Gas Property required to be pledged to the Lenders pursuant to Section 5.9;

(c) concurrently with any Compliance Certificate delivered pursuant to paragraph (b) above, (i) a production statement that identifies the most recent information available relating to net revenue interests of Hydrocarbons sold by the Borrower and its Subsidiaries and (ii) a statement of revenues and expenses attributable to the Hydrocarbon Interests of the Borrower and its Subsidiaries for such fiscal quarter ended;

(d) concurrently with the delivery of any financial statements pursuant to Section 5.1(a), and such other time as the Borrower may, in its sole discretion elect, an Engineering Report;

(e) as soon as available, and in any event no later than 45 days after the end of each fiscal year of the Borrower, a detailed consolidated budget for the following fiscal year (including a projected consolidated balance sheet of the Borrower and the Borrower's Subsidiaries as of the end of the following fiscal year, and the related consolidated statements of projected cash flow, projected changes in financial position and projected income), and, as soon as available, significant revisions, if any, by the Borrower for any material changes to such budget and projections with respect to such fiscal year (collectively, the "Projections"), which Projections shall in each case be accompanied by a certificate of a Responsible Officer stating that such Projections are based on reasonable estimates, information and assumptions and that such Responsible Officer has no reason to believe that such Projections are incorrect or misleading in any material respect;

(f) within 60 days after the end of each fiscal quarter of the Borrower (or in the case of the fourth fiscal quarter of each year, within 105 days after the end of such fiscal quarter), a narrative discussion and analysis of the financial condition and results of operations of the Borrower and the Borrower's Subsidiaries for such fiscal quarter and for the period from the beginning of the then current fiscal year to the end of such fiscal quarter, as compared to the portion of the Projections covering such periods and to the comparable periods of the previous year;

(g) no later than 10 Business Days prior to the effectiveness thereof, copies of substantially final drafts of any proposed amendment, supplement, waiver or other modification with respect the Governing Documents of Holdings, the Borrower or any of the Borrower's Subsidiaries that could reasonably be expected to have a Material Adverse Effect;

(h) to the extent not previously provided, within five days after the same are sent, copies of all financial statements and reports that Holdings, the Borrower or any of the Borrower's Subsidiaries sends to the holders of any class of its public debt securities or public equity securities and, within five days after the same are filed, copies of all financial statements and reports that Holdings, the Borrower or any of the Borrower's Subsidiaries may make to, or file with, the SEC;

(i) promptly and in any event within 10 days of a Responsible Officer obtaining knowledge thereof: (i) notice of any development, event, or condition that, individually or in the aggregate with other developments, events or conditions, could reasonably be expected to result in the payment by Holdings, the Borrower or any of the Borrower's Subsidiaries, in the aggregate, of a Material Environmental Amount; and (ii) any notice that any Governmental Authority may condition approval of, or any application for, an Environmental Permit or any other Permit held by Holdings, the Borrower or any of the Borrower's Subsidiaries on terms and conditions that could reasonably be expected to have a Material Adverse Effect;

(j) promptly upon receipt thereof, copies of all title opinions produced in the ordinary course of business or delivered to or received by the Borrower or its Subsidiaries covering any Oil and Gas Properties acquired by the Borrower or its Subsidiaries after the Closing Date; and

(k) promptly, such additional financial and other information as the Administrative Agent may from time to time reasonably request.

5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its material obligations of whatever nature, except (i) where the failure to pay, discharge or otherwise satisfy such obligations, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, or (ii) where the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of Holdings, the Borrower or Borrower's Subsidiaries, as the case may be.

5.4 Conduct of Business and Maintenance of Existence, etc. (a) (i) Preserve, renew and keep in full force and effect its corporate or other existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business, except, in each case, as otherwise permitted by Section 6.4 and except, in the case of clause (ii) above, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations and Requirements of Law, except to the extent that failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

5.5 Maintenance of Property; Insurance. Keep all of its Property and systems useful and necessary in its business in good working order and condition, ordinary wear and tear and casualty and condemnation excepted, subject to Dispositions permitted under Section 6.5 and maintain with financially sound and reputable insurance companies insurance on all its Property in at least such amounts and against at least such risks (but including in any event public liability, product liability and business interruption) as are usually insured against in the same general area by companies engaged in the same or a similar business.

(a) Maintain all rights of way, easements, grants, privileges, licenses, certificates, and permits necessary for the use of any Real Estate the failure of which to maintain could reasonably be expected to result in a Material Adverse Effect and will not, without the prior written consent of the Administrative Agent, consent to any public or private restriction as to the use of any Real Estate that could reasonably be expected to interfere materially with the use or operation of a material portion of the Real Estate by the Borrower or any of its Subsidiaries.

(b) (i) Comply with the terms of each lease in respect of Oil and Gas Properties so as to not permit any material uncured default on its part to exist in respect of such lease and renew the terms of such leases on commercially reasonable terms, except such defaults and expiration of leases that could not be reasonably expected to have a Material Adverse Effect and (ii) in accordance with prudent industry practices, perform or cause to be performed each and every material act required by each and all of the leases in respect of its material Oil and Gas Properties and all other material agreements and material contracts constituting or affecting its material Oil and Gas Properties, do all things necessary to keep unimpaired its rights thereunder and prevent any forfeiture thereof or default thereunder, and operate or cause to be operated such Oil and Gas Properties in a diligent, careful and efficient manner in material compliance with all applicable Requirements of Law, in each case, except to the extent the failure to so act could not reasonably be expected to have a Material Adverse Effect.

(c) Preserve and protect the Lien status of each respective Mortgage and, if any Lien (other than unrecorded Liens permitted under Section 6.3 that arise by operation of law and other Liens permitted under
Section 6.3(b)(i), (ii), (v), (vi), (x), (xi), (xii), (xiii), (xiv), (xv) and
(xvi)) is asserted against any material Mortgaged Property, promptly and at its expense, give the Administrative Agent a detailed written notice of such Lien and pay the underlying claim in full or take such other action so as to cause it to be released or bonded over in a manner satisfactory to the Administrative Agent.

5.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities and (b) permit representatives of any Lender to visit and inspect any of its properties and examine and make abstracts from any of its books and records upon reasonably prior written notice, at any reasonable time, at such Lender's expense (so long as no Event of Default shall have occurred and be continuing) and as often as may reasonably be desired and to discuss the business, operations, properties and financial and other condition of Holdings, the Borrower and Borrower's Subsidiaries with officers and employees of Holdings, the Borrower and Borrower's Subsidiaries and, so long as (i) accompanied by a Responsible Officer and (ii) no

more often than annually unless an Event of Default shall have occurred and be continuing, with its independent certified public accountants.

5.7 Notices. Promptly after a Responsible Officer has knowledge, give notice to the Administrative Agent for the benefit of each Lender:

(a) the occurrence of any Default or Event of Default;

(b) any (i) default or event of default under any Contractual Obligation of Holdings, the Borrower or any of Borrower's Subsidiaries or (ii) litigation, investigation or proceeding which may exist at any time between Holdings, the Borrower or any of Borrower's Subsidiaries and any Governmental Authority, that in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect;

(c) any litigation or proceeding affecting Holdings, the Borrower or any of Borrower's Subsidiaries in which the amount involved is $10,000,000 or more and not covered by insurance or in which injunctive or similar relief is sought which, if granted, could reasonably be expected to cause a Material Adverse Effect;

(d) the following events, as soon as possible and in any event within 30 days after a Responsible Officer knows thereof: (i) the occurrence of any Reportable Event with respect to any Plan, a failure to make any required contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or the taking of any other action by the PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the withdrawal from, or the termination, Reorganization or Insolvency of, any Plan; and

(e) any development or event that has had or could reasonably be expected to have a Material Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action Holdings, the Borrower or the relevant Subsidiary proposes to take with respect thereto.

5.8 Environmental Laws. Comply in all material respects with, and use commercially reasonable best efforts to cause compliance in all material respects by all tenants and subtenants, if any, with, all applicable Environmental Laws, and obtain, comply with and maintain, in each case in all material respects, and use commercially reasonable best efforts to cause all tenants and subtenants, if any, to obtain, comply with and maintain, in each case in all material respects, the Environmental Permits that are material and necessary for the continued operation of its Oil and Gas Business.

(a) Conduct and complete all investigations, studies, sampling and testing associated with response, removal or remediation actions required under Environmental Laws.

5.9 Additional Collateral, etc. With respect to any Property having a value of at least $2,000,000 individually (so long as the aggregate fair market value of the Properties

excluded by the Borrower from inclusion in the Collateral as a result of such threshold at any time does not exceed $10,000,000 in the aggregate) acquired after the Closing Date by any Grantor (other than (x) Property acquired by an Excluded Foreign Subsidiary, (y) Property (other than any Oil and Gas Property) acquired by any Bison Entities, and (z) any other Property excluded from the Collateral pursuant to the terms of the Guarantee and Collateral Agreement) as to which the Administrative Agent, for the benefit of the Secured Parties, does not have a perfected Lien, promptly (i) execute and deliver to the Administrative Agent Mortgages, such amendments to the Guarantee and Collateral Agreement or such other documents as the Administrative Agent deems necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a security interest (subject to Permitted Liens) in such Property and
(ii) take all actions necessary or advisable to grant to the Administrative Agent, for the benefit of the Secured Parties, a perfected first priority security interest in such Property, including without limitation, the filing of Mortgages or Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Administrative Agent.

(a) With respect to any new Subsidiary (other than an Excluded Foreign Subsidiary) created or acquired after the Closing Date (which, for the purposes of this paragraph, shall include any existing Subsidiary that ceases to be an Excluded Foreign Subsidiary), by Holdings, the Borrower or any of Borrower's Subsidiaries, cause such new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement and (B) to take such actions necessary or advisable to grant to the Administrative Agent for the benefit of the Secured Parties a security interest (subject to Permitted Liens) in the Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary, including, without limitation, the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be requested by the Administrative Agent.

(b) Use commercially reasonable efforts to deliver to the Administrative Agent, for the benefit of the Lenders, as soon as commercially practicable, the certificates representing the shares of Class B Common Stock of the Borrower (or substitute certificates with the same rights) issued to the Original Lenders (as defined in the Existing Credit Agreement), together with a stock power for each such certificate executed by a duly authorized officer of such Original Lender.

5.10 Further Assurances. From time to time execute and deliver, or cause to be executed and delivered, such additional instruments, certificates or documents, and take such actions, as the Administrative Agent may reasonably request for the purposes of implementing or effectuating the provisions of this Agreement and the other Loan Documents, or of more fully perfecting or renewing the rights of the Administrative Agent and the Lenders with respect to the Collateral (or with respect to any additions thereto or replacements or proceeds thereof or with respect to any other property or assets hereafter acquired by Holdings, the Borrower or any Subsidiary which may be deemed to be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the Administrative Agent or any Lender of any power, right, privilege or remedy pursuant to this Agreement or the other Loan Documents which requires any consent, approval, recording, qualification or authorization of any Governmental Authority, Holdings and the Borrower will execute and deliver, or will cause the execution and delivery of, all applications,

certifications, instruments and other documents and papers that the Administrative Agent or such Lender may be required to obtain from Holdings, the Borrower or any of the Borrower's Subsidiaries for such governmental consent, approval, recording, qualification or authorization.

5.11 Capital Expenditure. The Capital Expenditures of the Borrower and its Subsidiaries shall be at least $40,000,000 in each fiscal year beginning on or after January 1, 2004, (excluding any Capital Expenditures made with the proceeds of any Reinvestment Deferred Amount).

SECTION 6. NEGATIVE COVENANTS

Holdings and the Borrower hereby jointly and severally agree that, so long as any Term Loan or other amount is owing to any Lender, any Arranger or any Agent hereunder, each of Holdings and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, directly or indirectly:

6.1 Financial Condition Covenants.

(a) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage Ratio for any period of four consecutive fiscal quarters of the Borrower ending September 30, 2003 and each fiscal quarter thereafter to be less than 3.00 to 1.00.

(b) PV-10 Value to Total Senior Secured Debt Ratio. Permit the ratio of PV-10 Value to Total Senior Secured Debt as of September 30, 2003 and as of each March 31 and September 30 thereafter to be less than 1.75 to 1.00.

6.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

(a) Indebtedness of any Loan Party pursuant to any Loan Document;

(b) Indebtedness of the Borrower to any Subsidiary and of any Wholly Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;

(c) Indebtedness outstanding on the date hereof and listed on Schedule 6.2(c) and any refinancings, refundings, renewals or extensions thereof (without any increase in the principal amount thereof or any shortening of the maturity of any principal amount thereof);

(d) Guarantee Obligations made in the ordinary course of business by the Borrower or any of its Subsidiaries of obligations of the Borrower or any Subsidiary Guarantor;

(e) Guarantee Obligations of the Borrower or any Subsidiary Guarantor in respect of any other Indebtedness permitted under this
Section 6.2;

(f) Indebtedness of Holdings pursuant to the Holdings Subordinated Guaranty;

(g) Indebtedness in respect of acceptances, letters of credit or similar instruments in the ordinary course of the Borrower's exploration and production activities in an aggregate face or principal amount not to exceed $30,000,000;

(h) Indebtedness of any Loan Party to Parent or its Affiliates (other than the Loan Parties) that has been subordinated to such Loan Party's Obligations on terms reasonably satisfactory to the Administrative Agent;

(i) senior unsecured notes and senior unsecured subordinated notes (collectively, the "New Notes") issued by the Borrower or Holdings containing covenants, events of default and other terms customary for such transactions or otherwise less restrictive to Holdings and its Subsidiaries than those set forth in this Agreement or otherwise reasonably satisfactory to the Administrative Agent; provided that (x) the interest rate applicable thereto does not exceed the then applicable market interest rate and the maturity date therefor is no earlier than the date one year and one day after the Maturity Date, (y) no Default or Event of Default exists at the time of the issuance of such notes or would result therefrom and (z) the requirements of Section 2.7(a) are complied with in connection therewith for the Net Cash Proceeds of any Indebtedness permitted by this Section 6.2(i) in excess of $150,000,000;

(j) Indebtedness in respect of any standby letters of credit that may be delivered in connection with Section 6.17; and

(k) additional Indebtedness of the Borrower or any of its Subsidiaries in an aggregate principal amount (for the Borrower and all Subsidiaries) not to exceed $50,000,000 at any one time outstanding.

6.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except for (a) with respect to Holdings, Liens granted pursuant to the Loan Documents and (b) with respect to the Borrower and its Subsidiaries only, the following Liens:

(i) Lessors' royalties, overriding royalties, reversionary interests and similar burdens;

(ii) Any required third-party consents to assignment of leases and contracts and preferential purchase rights;

(iii) Liens for taxes or assessments not yet due or not yet delinquent or, if delinquent, that are being contested in good faith in the normal course of business and for which adequate reserves are maintained in accordance with GAAP;

(iv) all rights to consent by, required notices to, filings with, or other actions by Governmental Authorities in connection with the sale or conveyance of the assets if the same is customarily obtained subsequent to such sale or conveyance;

(v) Rights of reassignment upon the surrender or expiration of any lease;

(vi) easements, rights-of-way, servitudes, permits, surface leases and other rights with respect to surface operations on, over or in respect of any of the Oil and Gas Properties or any restriction on access thereto and that do not materially interfere with the operation of the affected Oil and Gas Property;

(vii) Materialman's, mechanics', repairman's, employees', contractors', operators or other similar Liens or charges arising in the ordinary course of business incidental to construction, maintenance or operation of the assets of the Borrower or the Borrower's Subsidiaries, (i) if they have not been filed pursuant to law and the time for filing has expired, (ii) if filed, they have not yet become due and payable or payment is being withheld as provided by law or (iii) if their validity is being contested in good faith by appropriate action;

(viii) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation;

(ix) Liens, pledges or deposits by or on behalf of the Borrower or any of the Borrower's Subsidiaries to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(x) Liens in existence on the date hereof listed on Schedule 6.3(b)(x), securing Indebtedness permitted by Section 6.2(c), including extensions, renewals and replacements of such Liens granted in connection with any refinancing, refunding, renewal or extension of any such Indebtedness, provided that no such Lien is spread to cover any additional Property after the Closing Date and that the amount of Indebtedness secured thereby is not increased;

(xi) any interest or title of a lessor under any lease entered into by the Borrower or any of the Borrower's Subsidiaries in the ordinary course of its business and covering only the assets so leased;

(xii) Liens arising out of all presently existing and future division and transfer orders, advance payment agreements, processing contracts, gas processing plant agreements, operating agreements, gas balancing or deferred production agreements, pooling, unitization or communitization agreements, pipeline, gathering or transportation agreements, platform agreements, drilling contracts,

injection or repressuring agreements, cycling agreements, construction agreements, salt water or other disposal agreements, leases or rental agreements, farm-out and farm-in agreements, exploration and development agreements, and any and all other contracts or agreements covering, arising out, used or useful in connection with or pertaining to the exploration, development, operation, production, sale, use, purchase, exchange, storage, separation, dehydration, treatment, compression, gathering, transportation, processing, improvement, marketing, disposal, or handling of any Hydrocarbon Interest of the Borrower or any Subsidiary thereof; provided that such agreements are entered into in the ordinary course of business and contain terms customary for such agreements in the industry; and provided further that no Liens described in this paragraph (xii) shall be granted or created in connection with the incurrence of Indebtedness;

(xiii) Rights reserved to or vested in any Governmental Authority to control or regulate any of the Oil and Gas Properties in any manner and all Requirements of Law of general applicability in that area;

(xiv) Liens arising out of operating agreements, unitization and pooling agreements and production sales contracts securing amounts not yet due or, if due, being contested in good faith in the ordinary course of business;

(xv) Gas imbalances that obligate the Borrower to provide and make up free of charge, and that other third parties are entitled to take without paying for, under applicable contracts, as a result of any imbalances in production or sales from the assets at any wells, in any pipelines, at any gas plant or in storage;

(xvi) defects, irregularities and deficiencies in the title to any rights of way or any Hydrocarbon Interest of the Borrower or any Subsidiary thereof which in the aggregate do not materially impair the use of such rights of way or any Hydrocarbon Interest for the purposes for which such rights of way and any other Hydrocarbon Interest are held by such Person, and defects, irregularities and deficiencies in title to any Hydrocarbon Interest of the Borrower or any of its Subsidiaries, which defects, irregularities or deficiencies have been cured by possession under applicable statutes of limitations;

(xvii) Liens on the GE Equipment to secure the GE Loan;

(xviii) Liens granted pursuant to the Loan Documents to secure the Obligations (including Specified Hedge Agreements);

(xix) purchase money security interests and Liens in respect of Capital Lease Obligations permitted by Section 6.2(c) or Section 6.2(k);

(xx) Liens granted in cash collateral to support the issuance of letters of credit permitted pursuant to Section 6.2;

(xxi) normal and customary depositary Liens in favor of banks or other depositary institutions incurred in the ordinary course of business; and

(xxii) Liens securing other Indebtedness of the Borrower and its Subsidiaries; provided, the aggregate amount of the Indebtedness, secured by Liens permitted pursuant to this clause (xxiii) shall not exceed $50,000,000 at any one time outstanding less the amount of Indebtedness secured pursuant to clause
(xix) of this Section 6.3.

6.4 Limitation on Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its Property or business, except that:

(a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower (provided that the Borrower shall be the continuing or surviving corporation) or with or into any Subsidiary Guarantor (provided that (i) the Subsidiary Guarantor shall be the continuing or surviving corporation or (ii) simultaneously with such transaction, the continuing or surviving corporation shall become a Subsidiary Guarantor and the Borrower shall comply with Section 5.10 in connection therewith);

(b) any Subsidiary of the Borrower may Dispose of any or all of its assets (upon voluntary liquidation or otherwise) to the Borrower or any Subsidiary Guarantor; and

(c) the Borrower or any Subsidiary may Dispose of the Capital Stock or other Property or business of a Subsidiary of Borrower in a transaction permitted under Section 6.5.

6.5 Limitation on Disposition of Property. Dispose of any of its Property (including, without limitation, receivables and leasehold interests), whether now owned or hereafter acquired, or, in the case of any Subsidiary of Holdings, issue or sell any shares of such Subsidiary's Capital Stock to any Person, except:

(a) the Disposition of obsolete, surplus or worn out property in the ordinary course of business;

(b) the Disposition of Hydrocarbons or other inventory in the ordinary course of business;

(c) Dispositions permitted by Section 6.4(b);

(d) the sale or issuance of (i) any Capital Stock of a Subsidiary of the Borrower (other than Disqualified Stock) to the Borrower or any Subsidiary Guarantor or (ii) the Borrower's Capital Stock (other than Disqualified Stock) to Holdings;

(e) any trade or exchange of Oil and Gas Properties or Capital Stock in any corporation or royalty trust in the Oil and Gas Business owned by the Borrower or any of its Subsidiaries for Oil and Gas Properties owned or held by another Person if the fair market value of such Oil and Gas Properties or Capital Stock traded or exchanged by the Borrower or any such Subsidiary (including any cash or Cash Equivalents (excluding cash exchanged with respect to the reimbursement of drilling costs or revenues received by the parties thereto), not to exceed 15% of the such fair market value, to be delivered to the Borrower or such Subsidiary) is reasonably equivalent to the fair market value of the Oil and Gas Properties (together with any cash or Cash Equivalents (excluding cash exchanged with respect to the reimbursement of drilling costs or revenues received by the parties thereto), not to exceed 15% of such fair market value) to be received by the Borrower or such Subsidiary; provided that, such fair market value shall, if at such time the ratio of PV-10 Value to Total Senior Secured Debt is less than 2.25 to 1.00 and such fair market value is equal to or greater than $25,000,000 be as determined in good faith by the Board of Directors of the Borrower as evidenced by a Board resolution delivered to the Administrative Agent; provided further that the Borrower and its Subsidiaries shall execute and deliver Mortgages to the Administrative Agent on any Oil and Gas Properties received by the Borrower or its Subsidiaries to the extent required by Section 5.9 (provided, however, that notwithstanding anything in this Section 6.5(e) to the contrary, Holdings, the Borrower and the Borrower's Subsidiaries may not trade or exchange Oil and Gas Properties or Capital Stock in any corporation or royalty trust in the Oil and Gas Business owned by the Borrower or any of its Subsidiaries for Oil and Gas Properties owned or held by another Person in an amount exceeding $50,000,000 per fiscal year;

(f) (i) Dispositions described in detail on Schedule 6.5(f)(i) required in connection with operating contracts, joint venture agreements and lease agreements existing on the date hereof and (ii) Dispositions of Property acquired after the Closing Date required in connection with operating contracts, joint venture agreements and lease arrangements entered into after the date hereof in the ordinary course of business and on arm's-length terms (which Disposition is with the other party to such agreement), the aggregate value of which shall not exceed $25,000,000 per fiscal year;

(g) the Disposition of assets having a fair market value not to exceed $50,000,000 per fiscal year; provided that not less than 85% of the proceeds of any such Disposition are solely in the form of cash and the Loan Parties party to such Disposition comply with the provisions of Section 2.7(b);

(h) any Recovery Event, provided, that the requirements of Section 2.7(b) are complied with in connection therewith;

(i) the Dispositions described on Schedule 6.5(i);

(j) (i) Dispositions by a Loan Party to a Grantor and
(ii) Dispositions by a Loan Party that is not a Grantor to another Loan Party;

(k) so long as no Default or Event of Default shall have occurred and be continuing prior to or after giving effect to such Disposition (without giving effect in any fiscal quarter of the Borrower or at any time to any Cure Amount provided for in Section 7.2 and the Borrower is in compliance with Section 6.1 without giving effect to Section 7.2), the Disposition of Hedge Agreements or other contracts by a Loan Party to the Parent or one of its Affiliates to the extent permitted by Section 6.9;

(l) Dispositions consummated in the ordinary course of business on an arm's-length basis pursuant to Oil and Gas Agreements; and

(m) Dispositions described on Schedule 6.5(m).

6.6 Limitation on Restricted Payments. Declare or pay any dividend (other than in common stock of the Borrower) on, or make any payment on account of, or set apart assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition of, any Capital Stock of Holdings, the Borrower or any of the Borrower's Subsidiaries, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Holdings, the Borrower or any of the Borrower's Subsidiaries, or enter into any derivatives or other transaction with any financial institution, commodities or stock exchange or clearinghouse (a "Derivatives Counterparty") obligating Holdings, the Borrower or any of the Borrower's Subsidiaries to make payments to such Derivatives Counterparty as a result of any change in market value of any such Capital Stock (collectively, "Restricted Payments"), except that:

(a) any Subsidiary may make Restricted Payments to the Borrower or any Subsidiary Guarantor;

(b) the Borrower may pay dividends to Holdings to permit Holdings to (i) pay corporate overhead expenses incurred in the ordinary course of business not to exceed $2,000,000 in any fiscal year; (ii) pay dividends to the Parent to pay the corporate overhead and administration expenses allocated (in a manner consistent with past practices) to the Borrower and its Subsidiaries, and (iii) pay any taxes which are due and payable by Holdings and the Borrower as part of a consolidated group;

(c) any Loan Party may make Dispositions permitted in
Section 6.5(l); and

(d) so long as (i) no Default or Event of Default shall have occurred and be continuing prior to or after giving effect to such dividend (without giving effect in any fiscal quarter of the Borrower or at any time to any Cure Amount provided for in Section 7.2 and the Borrower is in compliance with Section 6.1 without giving effect to Section 7.2), including compliance on a pro forma basis with Section 6.16, and (ii) five Business Days prior to making such dividend, the Borrower delivers to the Administrative Agent a Compliance Certificate containing all information and calculations necessary for determining compliance by the Borrower with Section 6.1(b) as of the date of such Compliance Certificate, based on the PV-10 Value and the Total Senior Secured Debt as of the date of such Compliance Certificate and the Engineering Report most recently delivered to the Administrative Agent, then the Borrower may pay dividends to Holdings and the Parent.

6.7 Limitation on Investments. Make any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or all or substantially all of the assets of an unrelated Person or a division of an unrelated Person, or make any other investment in, any other Person (all of the foregoing, "Investments"), except:

(a) extensions of trade credit in the ordinary course of business;

(b) Investments in Cash Equivalents;

(c) Investments arising in connection with the incurrence of Indebtedness permitted by Section 6.2(b) and (c);

(d) loans and advances to employees of Holdings, the Borrower or any Subsidiaries of the Borrower in the ordinary course of business (including, without limitation, for travel, entertainment and relocation expenses) in an aggregate amount for Holdings, the Borrower and Subsidiaries of the Borrower not to exceed $1,000,000 at any one time outstanding;

(e) Investments (other than those relating to the incurrence of Indebtedness permitted by Section 6.7(c)) by Holdings, the Borrower or any of Borrower's Subsidiaries in the Borrower or any Person that, prior to such Investment, is a Subsidiary Guarantor;

(f) Investments arising in connection with the Holdings Subordinated Guaranty;

(g) Investments pursuant to Oil and Gas Agreements;

(h) the acquisition of the beneficial interests in the Barrett Trust not already held by the Borrower, so long as after giving effect to such acquisition all beneficial interests of the Barrett Trust are held by the Borrower for aggregate consideration not to exceed $3,000,000;

(i) loans by a Grantor to the Parent or any of its Subsidiaries so long as (i) no Parent Event of Default has occurred and is continuing; (ii) no Default or Event of Default shall have occurred and be continuing prior and after giving effect thereto without giving effect in any fiscal quarter of the Borrower or at any time to any Cure Amount provided for in
Section 7.2 and the Borrower is in compliance with Section 6.1 without giving effect to Section 7.2; and (iii) any such loans are represented by a note, which shall be pledged to the Administrative Agent for the benefit of the Lenders pursuant to Section 5.9;

(j) Investments made in connection with the acquisition of (i) the Capital Stock of any Person, so long as (x) after giving effect to such acquisition, such Person becomes a Subsidiary Guarantor, (y) the Borrower complies with Section 5.9 and (z) such Person is engaged in the Oil and Gas Business; and (ii) all or substantially all of the assets of an unrelated Person or a division of an unrelated Person, in each case engaged in the Oil and Gas Business; provided the aggregate amount of such Investments pursuant to this
Section 6.7(j) shall not exceed $100,000,000 during the term of this Agreement; and

(k) other Investments in any fiscal year not to exceed $25,000,000.

6.8 Limitation on Optional Payments and Modifications of Indebtedness. (i) Make or offer to make any optional or voluntary payment, prepayment, repurchase or redemption of, or otherwise voluntarily or optionally defease, any New Notes, or segregate funds for any such payment, prepayment, repurchase, redemption or defeasance, or enter into any derivative or other transaction with any Derivatives Counterparty obligating Holdings, the Borrower or any of the Borrower's Subsidiaries to make payments to such Derivatives Counterparty as a result of any change in market value of such New Notes, (ii) amend or permit the amendment of its Governing Documents in any manner determined by the Administrative Agent to be materially adverse to the Lenders or (iii) amend, modify or otherwise change, or consent or agree to any amendment, modification, waiver or other change to, any of the terms (including, without limitation, the subordination terms) of any RMT Senior Notes or New Notes (other than any such amendment, modification, waiver or other change that would not adversely affect the interests of the Lenders in any material respect).

6.9 Limitation on Transactions with Affiliates. Except for the Holdings Subordinated Guaranty, enter into any transaction, relating to any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate
(other than the Borrower or any other Grantor) unless such transaction is (a) not prohibited by this Agreement and (b) in the ordinary course of business of Holdings, Borrower or such Subsidiary, as the case may be, upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary, as the case may be, than it would obtain in a comparable arm's-length transaction with a Person that is not an Affiliate; provided that if (i) such transaction (or series of transactions) is a Disposition of Property the fair market value of which is greater than $25,000,000 and (ii) at the time of such transaction, the ratio of the PV-10 Value to Total Senior Secured Debt is less than 2.25 to 1.00, then Holdings, the Borrower or any of the Borrower's Subsidiaries shall not enter into such transaction unless the Board of Directors of the Borrower has approved such transaction, as evidenced by a resolution of such Board of Directors delivered to the Administrative Agent.

6.10 Limitation on Sales and Leasebacks. Enter into any arrangement with any Person providing for the leasing by Holdings, the Borrower or any of the Borrower's Subsidiaries of Property which has been or is to be sold or transferred by Holdings, the Borrower or such Subsidiary to such Person or to any other Person to whom funds have been or are to be advanced by such Person on the security of such Property or rental obligations of Holdings, the Borrower or such Subsidiary.

6.11 Limitation on Changes in Fiscal Periods. Permit the fiscal year of Holdings, the Borrower or any of the Borrower's Subsidiaries to end on a day other than December 31 or change Holdings', the Borrower's or any of the Borrower's Subsidiaries' method of determining fiscal quarters, in each case, without the prior written consent of the Administrative Agent. The Lenders hereby authorize the Agents to enter into such amendments to effect such modifications, if any, in accordance with the provisions of this Section.

6.12 Limitation on Negative Pledge Clauses. Enter into or suffer to exist or become effective any agreement that prohibits or limits the ability of Holdings, the Borrower or any of the Borrower's Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure the Obligations or, in the case of any guarantor, its obligations under the Guarantee and Collateral Agreement, other than (a) this Agreement and the other Loan Documents, (b) any agreements governing any purchase money Liens or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or limitation shall only be effective against the assets financed thereby), (c) any agreements in effect on the date of this Agreement, (d) customary provisions in Oil and Gas Agreements in respect of Collateral the fair market value of which does not exceed $10,000,000 in the aggregate, and (e) customary anti-assignment provisions in any contract entered into from and after the date of this Agreement.

6.13 Limitation on Restrictions on Subsidiary Distributions, etc. Enter into or suffer to exist or become effective any consensual encumbrance or restriction on the ability of the Borrower or any of the Borrower's Subsidiaries to (a) make Restricted Payments in respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness or other obligation owed to Holdings, the Borrower or any other Subsidiary or (b) make loans or advances to Holdings, the Borrower or any other Subsidiary except for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing under the Loan Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant to an agreement that has been entered into in connection with the Disposition of all or substantially all of the Capital Stock or assets of such Subsidiary, (iii) encumbrances and restrictions on any Subsidiary that is not a material Subsidiary, (iv) those encumbrances and restrictions existing on the Closing Date, and (v) other customary encumbrances and restrictions now or hereafter existing of a Borrower or any Subsidiary thereof entered into in the ordinary course of business that are not more restrictive in any material respect than the encumbrances and restrictions with respect to a Borrower or its Subsidiaries existing on the Closing Date.

6.14 Business Activities. In the case of the Borrower and its Subsidiaries, engage in any business activity other than the Oil and Gas Business. In the case of Holdings, notwithstanding anything to the contrary in this Agreement or any other Loan Document, (a) conduct, transact or otherwise engage in, or commit to conduct, transact or otherwise engage in, any business or operations other than those incidental to its ownership of the Capital Stock of the Borrower, (b) incur, create, assume or suffer to exist any Indebtedness or other liabilities or financial obligations, except (i) nonconsensual obligations imposed by operation of law, (ii) pursuant to the Loan Documents to which it is a party and (iii) obligations with respect to its Capital Stock,
(iv) the Holdings Subordinated Guaranty, (v) intercompany Indebtedness permitted hereunder, (vi) liabilities in respect of Hedge Agreements temporarily held by Holdings prior to transfer to an Affiliate, or (c) own, lease, manage or otherwise operate any properties or assets (including cash (other than cash received in connection with dividends made by the Borrower in accordance with
Section 6.6 and intercompany loans permitted under Section 6.2 and cash received from Parent or any Affiliate for transmittal to the Borrower and its Subsidiaries) and Cash Equivalents) other than the ownership of shares of Capital Stock of the Borrower and Hedge Agreements temporarily held prior to transfer to an Affiliate.

6.15 Holdings Negative Pledge; Limitation on Assets. Solely with respect to Holdings, (a) create, incur, assume or suffer to exist any Lien upon any of its Property or revenues, whether now owned or hereafter acquired, to secure any Indebtedness of Holdings, except for (X) Liens granted pursuant to the Loan Documents, (Y) non-consensual Liens imposed by operation of law and (Z) Liens permitted by Section 6.3(b)(iii) or (b) hold any Property other than (i) all of the Capital Stock of the Borrower, and (ii) temporary ownership of assets being conveyed by the Borrower to the Parent, or the Parent to the Borrower, in accordance with the terms of this Agreement.

6.16 Minimum Borrower Liquidity. Permit the sum of (a) cash and Cash Equivalents held by the Borrower in the Collateral Account plus
(b) an irrevocable standby letter of credit naming the Administrative Agent as beneficiary issued by a financial institution reasonably acceptable to the Administrative Agent, to be less than $20,000,000, multiplied by a fraction, the numerator of which is the aggregate unpaid principal amount of Term Loans at the time of determination, and the denominator of which is $500,000,000.

SECTION 7. EVENTS OF DEFAULT

7.1 If any of the following events shall occur and be continuing:

(a) The Borrower shall fail to pay any principal of any Loan when due in accordance with the terms hereof; or the Borrower shall fail to pay any interest on any Loan; or any Loan Party shall fail to pay any other amount payable hereunder or under any other Loan Document, within five days after any such interest or other amount becomes due in accordance with the terms hereof;

(b) Any representation or warranty made or deemed made by any Loan Party herein or in any other Loan Document or that is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been inaccurate in any material respect on or as of the date made or deemed made;

(c) (i) Any Loan Party shall default in the observance or performance of any agreement contained in Section 5.2(k), clause (i) of Section
5.4(a) (with respect to Holdings and the Borrower only), Section 5.7(a), Section 6 or Section 5 of the Guarantee and Collateral Agreement, or (ii) an "Event of Default" under and as defined in any material Mortgage shall have occurred and be continuing;

(d) Any Loan Party shall default in the observance or performance of any other covenant or agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) through (c) of this Section), and such default shall continue unremedied for a period of 30 days following the first to occur of (i) a Responsible Officer obtaining knowledge of such default and (ii) the Administrative Agent delivering written notice of such default to the Borrower;

(e) Holdings, the Borrower or any of the Borrower's Subsidiaries shall (i) default in making any payment of any principal of any Indebtedness (including, without limitation, any Guarantee Obligation, but excluding the Term Loans) on the scheduled or

original due date with respect thereto; or (ii) default in making any payment of any interest on any such Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created; or (iii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable; provided that a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of Default unless, at such time, one or more defaults, events or conditions of the type described in clauses (i),
(ii) and (iii) of this paragraph (e) shall have occurred and be continuing with respect to Indebtedness the outstanding principal amount of which exceeds in the aggregate $25,000,000;

(f) (i) Holdings, the Borrower or any of the Borrower's Subsidiaries shall commence any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Holdings, the Borrower or any of the Borrower's Subsidiaries shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against Holdings, the Borrower or any of the Borrower's Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above that (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days; or (iii) there shall be commenced against Holdings, the Borrower or any of the Borrower's Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets that results in the entry of an order for any such relief that shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) Holdings, the Borrower or any of the Borrower's Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings, the Borrower or any of the Borrower's Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;

(g) (i) Any Person shall engage in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of the Required Lenders, likely to result in the termination of such Plan for purposes of Title IV of

ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion of the Required Lenders is likely to, incur any liability in connection with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan, (vi) the Borrower, any of the Borrower's Subsidiaries or any Commonly Controlled Entity shall be required to make during any fiscal year of the Borrower payments pursuant to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to retired employees (or their dependents) that, in the aggregate, exceed the amount set forth on Schedule 7(g)(i) with respect to such fiscal year, (vii) the Borrower, any of the Borrower's Subsidiaries or any Commonly Controlled Entity shall be required to make during any fiscal year of the Borrower contributions to any defined benefit pension plan subject to Title IV of ERISA (including any Multiemployer Plan) that, in the aggregate, exceed the amount set forth on Schedule 7(g)(ii) with respect to such fiscal year or; and in each case in clauses (i) through (vii) above, such event or condition, together with all other such events or conditions, if any, could, in the sole judgment of the Required Lenders, reasonably be expected to have a Material Adverse Effect;

(h) One or more judgments or decrees shall be entered against Holdings, the Borrower or any of the Borrower's Subsidiaries involving for Holdings, the Borrower and the Borrower's Subsidiaries taken as a whole a liability (not paid or fully covered by insurance as to which the relevant insurance company has acknowledged coverage) of $25,000,000 or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof;

(i) Any of the Security Documents shall cease, for any reason (other than pursuant to the terms thereof), to be in full force and effect, or any Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien created by any of the Security Documents shall cease to be enforceable and of the same effect and priority purported to be created thereby;

(j) The guarantees contained in (i) Section 2 of the Guarantee and Collateral Agreement shall cease, for any reason (other than pursuant to the terms thereof), to be in full force and effect, any Loan Party shall so assert;

(k) Any Loan Party or any Affiliate of any Loan Party shall assert that any provision of any Loan Document is not in full force and effect; or

(l) Any Change of Control shall occur;

then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or (ii) of paragraph (f) above with respect to any Loan Party, automatically the Term Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents shall immediately become due and payable, and (B) if such event is any other Event of Default, with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower, declare the Term Loans hereunder (with accrued interest thereon) and all other amounts owing under this Agreement and the other Loan Documents to be due and payable forthwith, whereupon the same shall immediately become due and payable. Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent and the

Lenders shall be entitled to exercise any and all remedies available under the Security Documents, including, without limitation, the Guarantee and Collateral Agreement and the Mortgages, or otherwise available under applicable law or otherwise.

7.2 Certain Cure Rights.

(a) Financial Condition Covenants. Notwithstanding anything to the contrary contained in Section 7.1, in the event that the Borrower fails to comply with the requirements of Sections 6.1(a) or (b) (each, a "Financial Condition Covenant"), (i) with respect to Section 6.1(a), until the expiration of the 10th Business Day (the "Section 6.1(a) Cure Period Date") subsequent to the date the certificate calculating such Financial Condition Covenant is required to be delivered pursuant to Section 5.2(b), Holdings shall have the right to issue to the Parent or an Affiliate Permitted Cure Securities for cash or otherwise receive cash contributions to the capital of Holdings, and to contribute such cash to the capital of the Borrower or (ii) with respect to
Section 6.1(b), the Borrower shall have the right to prepay the Term Loans in an amount necessary to comply with Section 6.1(b), which prepayment shall be in no more than three substantially equal monthly installments, the first such payment to be due within 30 days after the date the certificate calculating such Financial Condition Covenant is required to be delivered pursuant to Section 5.2(b) and the remaining payments due on the numerically corresponding day of each of the subsequent two months (or, if a subsequent month does not contain a numerically corresponding day or such corresponding day is not a Business Day, such payment will be due on the immediately preceding Business Day) or such earlier dates as are reasonably satisfactory to the Administrative Agent (each such three monthly dates or earlier dates approved by the Administrative Agent, the "Section 6.1(b) Cure Period Dates")(clauses (i) and (ii) collectively, the "Cure Right"). Upon the receipt by the Borrower of such cash for purposes of
Section 6.1(a) (the "Cure Amount") or upon such prepayment of the Term Loans for purposes of Section 6.1(b) (the amount of such payment or prepayment being the "Prepayment Amount"), pursuant to the exercise by the Borrower of such Cure Right, such Financial Condition Covenant shall be recalculated giving effect to the following pro forma adjustments:

(A) with respect to Section 6.1(a), Consolidated EBITDA shall be increased, solely for the purpose of measuring the Financial Condition Covenant in Section 6.1(a) and not for any other purpose under this Agreement, by an amount equal to the Cure Amount;

(B) with respect to Section 6.1(b), Total Senior Secured Debt shall be decreased by an amount equal to the Prepayment Amount; and

(C) if, after giving effect to the foregoing recalculations, the Borrower shall then be in compliance with the requirements of all Financial Condition Covenants, the Borrower shall be deemed to have satisfied the requirements of the Financial Condition Covenants as of the relevant date of determination with the same effect as though there had been no failure to comply therewith at such date, and the applicable breach or default of the Financial Condition Covenants which had occurred shall be deemed cured for all

purposes of this Agreement. Prior to the
Section 6.1(a) Cure Period Date in the case of Section 6.1(a), and prior to any of the
Section 6.1(b) Cure Period Dates in the case of Section 6.1(b), notwithstanding anything to the contrary contained in Section 7.1, no Default or Event of Default shall be deemed to have occurred as a result of any failure of the Borrower to comply with such respective Sections. If, after giving effect to the foregoing calculations or otherwise, the Borrower is not in compliance with
Section 6.1(a) on the Section 6.1(a) Cure Period Date or with Section 6.1(b) on the third Section 6.1(b) Cure Period Date or there is a failure to make any of the three required prepayments on the dates specified above or other dates approved by the Administrative Agent, an Event of Default shall be in existence as of such date.

(b) Limitations on Exercise of Cure Right, etc. Notwithstanding anything herein to the contrary, (i) in no event shall the Borrower be entitled to exercise the Cure Right with respect to Section 6.1(a) in more than two consecutive fiscal quarters and (ii) in any six fiscal quarter period, there must be a period of at least two consecutive fiscal quarters during which the Borrower has not exercised its Cure Right with respect to
Section 6.1(a). To the extent a fiscal quarter ended for which the Financial Condition Covenants are initially recalculated as a result of a Cure Right is included in the calculation of a Financial Condition Covenant in a subsequent fiscal period, the Cure Amount shall be included in the amount of Consolidated EBITDA for such initial fiscal period.

SECTION 8. THE AGENTS

8.1 Appointment. Each Lender hereby irrevocably designates and appoints the Agents as the agents of such Lender under this Agreement and the other Loan Documents, and each Lender irrevocably authorizes each Agent, in such capacity, to take such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, no Agent shall have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against any Agent.

8.2 Delegation of Duties. Each Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Agent shall be responsible for the negligence or misconduct of any agents or attorneys-in fact selected by it with reasonable care.

8.3 Exculpatory Provisions. Neither any Agent nor any of its officers, directors, employees, agents, attorneys in fact or affiliates shall be (i) liable for any action

lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except to the extent that any of the foregoing are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from its or such Person's own gross negligence or willful misconduct) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by Parent or any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Agents under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Loan Party to perform its obligations hereunder or thereunder. The Agents shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party.

8.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Loan Parties), independent accountants and other experts selected by such Agent. The Agents may deem and treat the payee of any Term Note as the owner thereof for all purposes unless such Term Note shall have been transferred in accordance with Section 9.6 and all actions required by such Section in connection with such transfer shall have been taken. Each Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders (or, if so specified by this Agreement, all Lenders or any other instructing group of Lenders specified by this Agreement) as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders (or, if so specified by this Agreement, all Lenders or any other instructing group of Lenders specified by this Agreement), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Term Loans.

8.5 Notice of Default. No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless such Agent shall have received notice from a Lender, Holdings or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Administrative Agent shall receive such a notice, the Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders (or, if so specified by this Agreement, all Lenders or any other instructing group of Lenders specified by this Agreement); provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or

refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.

8.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that neither any of the Agents nor any of their respective officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or warranties to it and that no act by any Agent hereafter taken, including any review of the affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute any representation or warranty by any Agent to any Lender. Each Lender represents to the Agents that it has, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates and made its own decision to make its Term Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Loan Parties and their affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, no Agent shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into the possession of such Agent or any of its officers, directors, employees, agents, attorneys in fact or affiliates.

8.7 Indemnification. The Lenders agree to indemnify each Agent in its capacity as such (to the extent not reimbursed by Holdings or the Borrower and without limiting the obligation of Holdings or the Borrower to do so), ratably according to their respective Term Loan Percentages in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Term Loan Commitments shall have terminated and the Term Loans shall have been paid in full, ratably in accordance with such Term Loan Percentages immediately prior to such date), for, and to save each Agent harmless from and against, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time (including, without limitation, at any time following the payment of the Term Loans) be imposed on, incurred by or asserted against such Agent in any way relating to or arising out of, the Term Loan Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from such Agent's gross negligence or willful misconduct. The agreements in this Section shall survive the payment of the Term Loans and all other amounts payable hereunder.

8.8 Agent in Its Individual Capacity. Each Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Loan Party as though such Agent were not an Agent. With respect to its Term Loans made or renewed by it, each Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not an Agent, and the terms "Lender" and "Lenders" shall include each Agent in its individual capacity.

8.9 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 shall resign as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall (unless an Event of Default under Section 7.1(a) or
Section 7.1(f) with respect to the Borrower shall have occurred and be continuing) be subject to approval by the Borrower (which approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term "Administrative Agent" shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Term Loans. If no successor agent has accepted appointment as Administrative Agent by the date that is 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 assume and 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. Any of the Co-Syndication Agents may, at any time, by notice to the Lenders and the Administrative Agent, resign as Co-Syndication Agent hereunder, whereupon the duties, rights, obligations and responsibilities of such Co-Syndication Agent hereunder shall automatically be assumed by, and inure to the benefit of, the remaining Co-Syndication Agent, or if none, the Administrative Agent, without any further act by any Co-Syndication Agent, the Administrative Agent or any Lender. After any retiring Agent's resignation as Agent, the provisions of this Section 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement and the other Loan Documents.

8.10 Authorization to Release Liens and Guarantees. The Administrative Agent is hereby irrevocably authorized by each of the Lenders to effect any release of Liens or guarantee obligations contemplated by Section 9.15.

8.11 The Arrangers; the Co-Syndication Agents; the Documentation Agent. Neither the Arrangers, the Co-Syndication Agents nor the Documentation Agent, in their respective capacities as such, shall have any duties or responsibilities, and shall incur no liability, under this Agreement and the other Loan Documents.

SECTION 9. MISCELLANEOUS

9.1 Amendments and Waivers. Neither this Agreement or any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except

in accordance with the provisions of this Section 9.1. The Required Lenders and each Loan Party party to the relevant Loan Document may, or (with the written consent of the Required Lenders) the Administrative Agent and each Loan Party party to the relevant Loan Document may, from time to time, (a) enter into written amendments, supplements or modifications hereto and to the other Loan Documents (including amendments and restatements hereof or thereof) for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such terms and conditions as may be specified in the instrument of waiver, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall:

(i) forgive the principal amount or extend the final scheduled date of maturity of any Term Loan, extend the scheduled date of any amortization payment in respect of any Term Loan, reduce the stated rate of any interest or fee payable hereunder or extend the scheduled date of any payment thereof, increase the amount or extend the expiration date of any Term Loan Commitment of any Lender, or require additional consents to be obtained with respect to the sale or any assignment or participations of any interests of the Lenders hereunder, in each case without the consent of each Lender directly affected thereby;

(ii) amend, modify or waive any provision of this
Section or reduce any percentage specified in the definition of Required Lenders, or consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, release all or substantially all of the Collateral or release all or substantially all of the Subsidiary Guarantors from their guarantee obligations under the Guarantee and Collateral Agreement, or amend the definition of Interest Period so as to allow intervals of greater than six months, in each case without the consent of all Lenders;

(iii) amend, modify or waive any provision of
Section 8, or any other provision of this Agreement affecting the rights and obligations of any Agent, without the consent of any Agent directly affected thereby; or

(iv) amend, modify or waive any provision of
Section 2.18 without the consent of each Lender directly affected thereby.

Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the Agents and all future holders of the Term Loans. In the case of any waiver, the Loan Parties, the Lenders and the Agents shall be restored to their former position and rights hereunder and under the other Loan Documents, and any Default or Event of Default waived shall be deemed to be cured and

not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon. Any such waiver, amendment, supplement or modification shall be effected by a written instrument signed by the parties required to sign pursuant to the foregoing provisions of this Section; provided, that delivery of an executed signature page of any such instrument by facsimile transmission shall be effective as delivery of a manually executed counterpart thereof.

For the avoidance of doubt, this Agreement and any other Loan Document may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and each Loan Party to each relevant Loan Document (x) to add one or more additional credit facilities to this Agreement and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof (collectively, the "Additional Extensions of Credit") to share ratably in the benefits of this Agreement and the other Loan Documents with the Term Loans and the accrued interest and fees in respect thereof and (y) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders; provided, however, that no such amendment shall permit the Additional Extensions of Credit to share ratably with or with preference to the Term Loans in the application of mandatory prepayments without the consent of the Required Lenders.

9.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or three Business Days after being deposited in the mail (registered or certified), postage prepaid, or, in the case of telecopy notice, when received, addressed (a) in the case of Holdings, the Borrower and the Agents, as follows and (b) in the case of the Lenders, as set forth in an administrative questionnaire delivered to the Administrative Agent or on Schedule I to the Lender Addendum to which such Lender is a party or, in the case of a Lender which becomes a party to this Agreement pursuant to an Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case of any party, to such other address as such party may hereafter notify to the other parties hereto:

Holdings or the Borrower:                Williams Production Holdings LLC
                                         One Williams Center
                                         Suite 4100
                                         Tulsa, Oklahoma 74172
                                         Attention: Jim Kimble;
                                         Treasury Compliance Group
                                         Telecopy: (918) 573-2065
                                         Telephone: (918) 573-7159

                                         with a copy to:

                                       67

                                         Williams Production RMT Company
                                         One Williams Center
                                         Suite 4100
                                         Tulsa, Oklahoma 74172
                                         Attention: Assistant General Counsel -
                                         Corporate
                                         Telecopy: (918) 573-4503
                                         Telephone: (918) 573-2613

The Administrative Agent:                Lehman Commercial Paper Inc.
                                         745 Seventh Avenue
                                         New York, New York 10019
                                         Attention: Francis Chang
                                         Telecopy: (212) 526-0242
                                         Telephone: (212) 526-5390

                                         with a copy to:

                                         Attention: Michelle Rosolinsky
                                         Telecopy: (212) 526-6590
                                         Telephone: (212) 526-4979

The Arrangers:                           Lehman Brothers Inc.
                                         745 Seventh Avenue
                                         New York, New York 10019
                                         Attention:  Francis Chang
                                         Telecopy:  (212) 526-0242
                                         Telephone:  (212) 526-5390

                                         Banc of America Securities LLC
                                         100 North Tryon Street
                                         NC1-007-06-07
                                         Charlotte, North Carolina  28255
                                         Attention: Kelly Warnement/Anabel
                                         Morris/Diana Himes
                                         Telecopy: (704) 388-0648
                                         Telephone: (704) 388-8943/(704) 387-
                                         1939/(704) 387-9951

provided that any notice, request or demand to or upon the Agent or any Lender shall not be effective until received.

9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any

single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

9.4 Survival of Representations and Warranties. All representations and warranties made herein, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Term Loans and other extensions of credit hereunder.

9.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse the Agents and the Arrangers for all their reasonable out of pocket costs and expenses incurred in connection with the syndication of the Facilities (other than fees payable to syndicate members) and the development, preparation and execution of, or preservation of any rights under, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees and disbursements and other charges of Weil, Gotshal & Manges LLP and LeBoeuf, Lamb, Greene & MacRae, LLP and the charges of Intralinks, (b) to pay or reimburse each Lender, the Arrangers, and the Agents for all their costs and expenses incurred in connection with the enforcement of any rights under this Agreement, the other Loan Documents and any other documents prepared in connection herewith or therewith, including, without limitation, the fees and disbursements of outside counsel to each Lender and of counsel to each of the Arrangers and the Administrative Agent, (c) to pay, indemnify, or reimburse each Lender Arranger, and the Agents for, and hold each Lender, Arranger, and the Agents harmless from, any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents, and (d) to pay, indemnify or reimburse each Lender, each Arranger, each Agent, their respective affiliates, and their respective officers, directors, trustees, employees, advisors, agents and controlling persons (each, an "Indemnitee") for, and hold each Indemnitee harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement, the other Loan Documents and any such other documents, including, without limitation, any of the foregoing relating to the use of proceeds of the Term Loans or the violation of, noncompliance with or liability under, any Environmental Law applicable to the operations of any Loan Party any of the Properties and the fees and disbursements and other charges of legal counsel in connection with claims, actions or proceedings by any Indemnitee against the Borrower hereunder (all the foregoing in this clause (d), collectively, the "Indemnified Liabilities"), provided, that the Borrower shall have no obligation hereunder to any Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnitee.

No Indemnitee shall be liable for any damages arising from the use by unauthorized persons of Information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such persons or for any special, indirect, consequential or punitive damages in connection with the Facilities. Without limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its Subsidiaries so to waive, all rights for contribution or any other rights of recovery with respect to all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind or nature, under or related to Environmental Laws, that any of them might have by statute or otherwise against any Indemnitee. All amounts due under this Section shall be payable not later than 30 days after written demand therefor. Statements payable by the Borrower pursuant to this Section shall be submitted to the Borrower in accordance with Section 9.2, or to such other Person or address as may be hereafter designated by the Borrower in a notice to the Administrative Agent. The agreements in this Section shall survive repayment of the Term Loans and all other amounts payable hereunder.

9.6 Successors and Assigns; Participations and Assignments. This Agreement shall be binding upon and inure to the benefit of Holdings, the Borrower, the Lenders, the Agents, all future holders of the Term Loans and their respective successors and assigns, except that the Borrower may not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Agents and each Lender.

(a) Any Lender may, without the consent of the Borrower, in accordance with applicable law, at any time sell to one or more banks, financial institutions or other entities (each, a "Participant") participating interests in any Term Loan owing to such Lender, any Term Loan Commitment of such Lender or any other interest of such Lender hereunder and under the other Loan Documents. In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Term Loan for all purposes under this Agreement and the other Loan Documents, and the Borrower and the Agents shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Loan Documents. In no event shall any Participant under any such participation have any right to approve any amendment or waiver of any provision of any Loan Document, or any consent to any departure by any Loan Party therefrom, except to the extent that such amendment, waiver or consent would require the consent of all Lenders pursuant to Section
9.1. The Borrower agrees that if amounts outstanding under this Agreement and the Term Loans are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall, to the maximum extent permitted by applicable law, be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement, provided that, in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in Section 9.7(a) as fully as if such Participant were a Lender hereunder. The Borrower also agrees that each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 with respect to its participation in the Term Loan Commitments and the Term Loans outstanding from time to

time as if such Participant were a Lender; provided that, in the case of Section 2.15, such Participant shall have complied with the requirements of said Section, and provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such Section than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. In addition, each transferor Lender selling a participation to a Participant under this Section 9.6(b): (i) shall keep a register, meeting the requirements of Treasury Regulation section 5f.103-1(c), of each such Participant, specifying such Participant's entitlement to payments of principal and interest with respect to such participation, and (ii) shall collect from each such Participant the appropriate forms, certificates and statements described in Section 2.15 (and updated as required by Section 2.15) as if such Participant were a Lender under Section 2.15.

(b) Any Lender (an "Assignor") may, in accordance with applicable law and upon written notice to the Administrative Agent, at any time and from time to time assign to any Lender or any affiliate or Related Fund thereof or, with the consent of the Administrative Agent and the Borrower (which, in each case, shall not be unreasonably withheld or delayed) (provided that (x) no such consent need be obtained by a Lehman Entity for assignments to Eligible Assignees and (y) the consent of the Borrower need not be obtained if any Default or Event of Default shall have occurred and be continuing), to an additional bank, financial institution or other entity (an "Assignee") all or any part of its rights and obligations under this Agreement pursuant to an Assignment and Acceptance, substantially in the form of Exhibit E, executed by such Assignee and such Assignor (and, where the consent of the Administrative Agent is required pursuant to the foregoing provisions, by the Administrative Agent) and delivered to the Administrative Agent for its acceptance and recording in the Register; provided that no such assignment to an Assignee (other than any Lender or any affiliate or Related Fund thereof) shall be in an aggregate principal amount of less than $1,000,000 (other than in the case of an assignment of all of a Lender's interests under this Agreement), unless otherwise agreed by the Borrower and the Administrative Agent. Upon such execution, delivery, acceptance and recording, from and after the effective date determined pursuant to such Assignment and Acceptance in the Register, (x) the Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with Term Commitments and Term Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of an Assignor's rights and obligations under this Agreement, such Assignor shall cease to be a party hereto, except as to Section 2.14, 2.15 and 9.5 in respect of the period prior to such effective date). For purposes of the minimum assignment amounts set forth in this paragraph, multiple assignments by two or more Related Funds shall be aggregated.

(c) The Administrative Agent shall, on behalf of the Borrower, maintain at its address referred to in Section 9.2 a copy of each Assignment and Acceptance delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the Term Loan Commitment of, and principal amount of the Term Loans owing to, each Lender from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and the Borrower, each Agent and the Lenders shall treat each Person whose name is recorded in the Register as the owner of the Term Loans and any Term Notes evidencing such Term Loans recorded therein for all purposes of this Agreement. Any assignment of any Term

Loan, whether or not evidenced by a Term Note, shall be effective only upon appropriate entries with respect thereto being made in the Register (and each Term Note shall expressly so provide). Any assignment or transfer of all or part of a Term Loan evidenced by a Term Note shall be registered on the Register only upon surrender for registration of assignment or transfer of the Term Note evidencing such Term Loan, accompanied by a duly executed Assignment and Acceptance; thereupon one or more new Term Notes in the same aggregate principal amount shall be issued to the designated Assignee, and the old Term Notes shall be returned by the Administrative Agent to the Borrower marked "canceled". The Register shall be available for inspection by the Borrower or any Lender (with respect to any entry relating to such Lender's Term Loans) at any reasonable time and from time to time upon reasonable prior notice.

(d) Upon its receipt of an Assignment and Acceptance executed by an Assignor and an Assignee (and, in any case where the consent of any other Person is required by Section 9.6(c), by each such other Person) together with payment to the Administrative Agent of a registration and processing fee of $3,500 (treating multiple, simultaneous assignments by or to two or more Related Funds as a single assignment) (except that no such registration and processing fee shall be payable (y) in connection with an assignment by or to a Lehman Entity or (z) in the case of an Assignee which is already a Lender or is an affiliate or Related Fund of a Lender or a Person under common management with a Lender), the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the effective date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Borrower. On or prior to such effective date, the Borrower, at its own expense, upon request, shall execute and deliver to the Administrative Agent (in exchange for Term Notes, of the assigning Lender) a new applicable Term Note to the order of such Assignee and its registered assigns in an amount equal to the applicable Term Loans, as the case may be, assumed or acquired by it pursuant to such Assignment and Acceptance and, if the Assignor has retained Term Loans, as the case may be, upon request, a new Term Note, as the case may be, to the order of the Assignor and its registered assigns in an amount equal to the applicable Term Loans retained by it hereunder. Such new Term Note or Term Notes shall be dated the Closing Date and shall otherwise be in the form of the Term Note or Term Notes replaced thereby.

(e) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this Section concerning assignments of Term Loans and Term Notes relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests in Term Loans and Term Notes, including, without limitation, any pledge or assignment by a Lender of any Term Loan or Term Note to any Federal Reserve Bank in accordance with applicable law.

(f) Notwithstanding anything to the contrary contained herein, any Lender (a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC"), identified as such in writing from time to time by the Granting Lender to the Administrative Agent and the Borrower, the option to provide to the Borrower all or any part of any Term Loan that such Granting Lender would otherwise be obligated to make to the Borrower pursuant to this Agreement; provided that (i) nothing herein shall constitute a commitment by any SPC to make any Term Loan and (ii) if an SPC elects not to exercise such option or otherwise fails to provide all or any part of such Term Loan, the Granting Lender shall be obligated to make such Term

Loan pursuant to the terms hereof. The making of a Term Loan by an SPC hereunder shall utilize the Term Loan Commitment of the Granting Lender to the same extent, and as if, such Term Loan were made by such Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement (all liability for which shall remain with the Granting Lender). In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other indebtedness of any SPC, it will not institute against, or join any other person in instituting against, such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States or any state thereof. In addition, notwithstanding anything to the contrary in this Section 9.6(g), any SPC may (A) with notice to, but without the prior written consent of, the Borrower and the Administrative Agent and without paying any processing fee therefor, assign all or a portion of its interests in any Term Loans to the Granting Lender, or with the prior written consent of the Borrower and the Administrative Agent (which consent shall not be unreasonably withheld) to any financial institutions providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Term Loans, and (B) disclose on a confidential basis any non-public information relating to its Term Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancement to such SPC; provided that non-public information with respect to the Parent, the Borrower or any of their respective Subsidiaries may be disclosed only with the Borrower's prior written consent which will not be unreasonably withheld. This paragraph (g) may not be amended without the written consent of any SPC with Term Loans outstanding at the time of such proposed amendment.

9.7 Adjustments; Set off. Except to the extent that this Agreement provides for payments to be allocated to a particular Lender or to the Lenders under a particular Facility, if any Lender (a "Benefited Lender") shall at any time receive any payment of all or part of the Obligations owing to it, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set off, pursuant to events or proceedings of the nature referred to in Section 7.1(f), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender's Obligations, such Benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender's Obligations, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

(a) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right upon the election of the Required Lenders following the occurrence and during the continuance of an Event of Default, without prior notice to Holdings or the Borrower, any such notice being expressly waived by Holdings and the Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrower hereunder (whether at the stated maturity, by acceleration or otherwise), to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in

any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of the Borrower. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such setoff and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such setoff and application.

9.8 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement or of a Lender Addendum by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower and the Administrative Agent.

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

9.10 Integration. This Agreement and the other Loan Documents represent the entire agreement of Holdings, the Borrower, the Agents, the Arranger and the Lenders with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Arranger, any Agent or any Lender relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.

9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

9.12 Submission to Jurisdiction; Waivers. Each of Holdings and the Borrower hereby irrevocably and unconditionally:

(a) submits for itself and its Property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non exclusive general jurisdiction of the courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar

form of mail), postage prepaid, to Holdings or the Borrower, as the case may be at its address set forth in Section 9.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

9.13 Acknowledgments. Each of Holdings and the Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents;

(b) neither the Arranger, any Agent nor any Lender has any fiduciary relationship with or duty to Holdings or the Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Arranger, the Agents and the Lenders, on one hand, and Holdings and the Borrower, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Arranger, the Agents and the Lenders or among Holdings, the Borrower and the Lenders.

9.14 Confidentiality. Each of the Agents and the Lenders agrees to keep confidential all non-public information provided to it by any Loan Party pursuant to this Agreement that is designated by such Loan Party as confidential; provided that nothing herein shall prevent any Agent or any Lender from disclosing any such information (a) to the Arranger, any Agent, any other Lender or any affiliate of any thereof, (b) to any Participant or Assignee (each, a "Transferee") or prospective Transferee that agrees to comply with the provisions of this Section or substantially equivalent provisions, (c) to any of its employees, directors, agents, attorneys, accountants and other professional advisors, (d) to any financial institution or any Eligible Assignee that is a direct or indirect contractual counterparty in swap agreements or such contractual counterparty's professional advisor (so long as such contractual counterparty or professional advisor to such contractual counterparty agrees to be bound by the provisions of this Section), (e) upon the request or demand of any Governmental Authority having jurisdiction over it, (f) in response to any order of any court or other Governmental Authority or as may otherwise be required pursuant to any Requirement of Law, (g) in connection with any litigation or similar proceeding, (h) that has been publicly disclosed other than in breach of this Section, (i) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender's investment portfolio in connection with ratings issued with respect to such Lender or (j) in connection with the exercise of any remedy hereunder or under any other Loan Document. Notwithstanding anything herein to the contrary, any party subject to confidentiality obligation hereunder or under

any other related document (and any employee, representative or other agent of such party) may disclose to any and all persons, without limitation of any kind, such party's U.S. federal income tax treatment and tax structure of the transactions contemplated by this Agreement relating to such party and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure. However, no such party shall disclose any information relating to such tax treatment or tax structure to the extent nondisclosure is reasonably necessary in order to comply with applicable securities laws. Subject to the foregoing, nothing herein shall release any Lender from any other confidentiality agreement previously executed with any Borrower.

9.15 Release of Collateral and Guarantee Obligations. Notwithstanding anything to the contrary contained herein or in any other Loan Document, upon request of the Borrower in connection with any Disposition of Property permitted by the Loan Documents, the Administrative Agent shall (without notice to, or vote or consent of, any Lender, or any affiliate of any Lender that is a party to any Specified Hedge Agreement) take such actions as shall be required to release its security interest in any Collateral being Disposed of in such Disposition, and to release any guarantee obligations under any Loan Document of any Person being Disposed of in such Disposition, to the extent necessary to permit consummation of such Disposition in accordance with the Loan Documents.

(a) Notwithstanding anything to the contrary contained herein or any other Loan Document, when all Obligations (other than obligations in respect of any Specified Hedge Agreement) have been paid in full, all Term Loan Commitments have terminated or expired, upon request of the Borrower, the Administrative Agent shall (without notice to, or vote or consent of, any Lender, or any affiliate of any Lender that is a party to any Specified Hedge Agreement) take such actions as shall be required to release its security interest in all Collateral, and to release all guarantee obligations under any Loan Document, whether or not on the date of such release there may be outstanding Obligations in respect of Specified Hedge Agreements. Any such release of guarantee obligations shall be deemed subject to the provision that such guarantee obligations shall be reinstated if after such release any portion of any payment in respect of the Obligations guaranteed thereby shall be rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payment had not been made.

(b) Notwithstanding anything in this Agreement or the other Loan Documents to the contrary, the Administrative Agent shall be authorized to release the Mortgages and Liens on the Oil and Gas Properties permitted to be sold, exchanged or traded under Section 6.5 of this Agreement without any further action by the Lenders.

9.16 Delivery of Lender Addenda. Each initial Lender shall become a party to this Agreement by delivering to the Administrative Agent a Lender Addendum duly executed by such Lender, the Borrower and the Administrative Agent.

9.17 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

William Production Holdings LLC

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

WILLIAMS PRODUCTION RMT COMPANY

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

LEHMAN COMMERCIAL PAPER INC.,
as Administrative Agent

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

[Signature Page to Term Loan Agreement]

1.1(a)         Mortgaged Property
1.1(b)         Gas Gathering Systems
1.1(c)         Historical Hedging Addbacks
1.1(d)         Consolidated EBITDA
3.1            Pre-Closing Dispositions
3.4            Consents, Authorizations, Filings and Notices
3.6            Material Litigation
3.13           Reportable Events
3.15           Subsidiaries
3.17           Environmental
3.19(a)-1      UCC Filing Jurisdictions
3.19(a)-2      UCC Financing Statements to Remain on File
3.19(a)-3      UCC Financing Statements to be Terminated
3.19(b)        Mortgage Filing Jurisdictions
3.21           Hydrocarbon Interests
3.22(b)        Consents
6.2(c)         Existing Indebtedness
6.3(b)(x)      Existing Liens
6.5(f)(i)      Dispositions
6.5(i)         Certain Dispositions
6.5(m)         Specified Dispositions
7(g)(i)        Required Payments to Employee Welfare Benefit Plans
7(g)(ii)       Required Payments to Multiemployer Plans

EXHIBITS:

A        Form of Guarantee and Collateral Agreement
B        Form of Compliance Certificate
C        Form of Closing Certificate
D        Form of Mortgage
E        Form of Assignment and Acceptance
F-1      Form of Legal Opinion of Gibson, Dunn & Crutcher LLP
F-2      Form of Legal Opinion of Davis, Graham & Stubbs LLP
G        Form of Term Note
H        Form of Lender Addendum
I        Form of Borrowing Notice
J        Form of Solvency Certificate

EXECUTION COPY

GUARANTEE AND COLLATERAL AGREEMENT

made by

WILLIAMS PRODUCTION HOLDINGS LLC,

WILLIAMS PRODUCTION RMT COMPANY

and certain of its Subsidiaries

in favor of

LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

Dated as of May 30, 2003

TABLE OF CONTENTS

                                                                                                                    Page
                                                                                                                    ----
Section 1.        DEFINED TERMS.................................................................................      1

         1.1      Definitions...................................................................................      1

         1.2      Other Definitional Provisions.................................................................      6

Section 2.        GUARANTEE.....................................................................................      6

         2.1      Guarantee.....................................................................................      6

         2.2      Right of Contribution.........................................................................      7

         2.3      No Subrogation................................................................................      7

         2.4      Amendments, Etc. With Respect to the Borrower Obligations.....................................      8

         2.5      Guarantee Absolute and Unconditional..........................................................      8

         2.6      Reinstatement.................................................................................     10

         2.7      Payments......................................................................................     10

Section 3.        GRANT OF SECURITY INTEREST....................................................................     10

Section 4.        REPRESENTATIONS AND WARRANTIES................................................................     12

         4.1      Representations in Term Loan Agreement........................................................     12

         4.2      Title; No Other Liens.........................................................................     12

         4.3      Perfected First-Priority Liens................................................................     12

         4.4      Chief Executive Office........................................................................     13

         4.5      Inventory and Equipment.......................................................................     13

         4.6      Farm Products.................................................................................     13

         4.7      Pledged Securities............................................................................     13

         4.8      Receivables...................................................................................     13

         4.9      Vehicles......................................................................................     13

         4.10     Intellectual Property.........................................................................     13

         4.11     Contracts.....................................................................................     14

         4.12     Commercial Tort Claims........................................................................     15

Section 5.        COVENANTS.....................................................................................     15

         5.1      Covenants in Term Loan Agreement..............................................................     15

         5.2      Delivery of Instruments and Chattel Paper.....................................................     15

         5.3      Maintenance of Insurance......................................................................     15

         5.4      Payment of Obligations........................................................................     16

                                                                                                                    Page
                                                                                                                    ----
         5.5      Maintenance of Perfected Security Interest; Further Documentation.............................     16

         5.6      Changes in Name, Etc..........................................................................     16

         5.7      Notices.......................................................................................     17

         5.8      Investment Property...........................................................................     17

         5.9      Receivables...................................................................................     18

         5.10     Contracts.....................................................................................     18

         5.11     Intellectual Property.........................................................................     19

         5.12     Vehicles......................................................................................     20

         5.13     Notice of Commercial Tort Claims..............................................................     20

         5.14     Subordination.................................................................................     21

Section 6.        REMEDIAL PROVISIONS...........................................................................     21

         6.1      Certain Matters Relating to Receivables.......................................................     21

         6.2      Communications with Obligors; Grantors Remain Liable..........................................     22

         6.3      Pledged Stock.................................................................................     22

         6.4      Proceeds to be Turned Over To Administrative Agent............................................     23

         6.5      Application of Proceeds.......................................................................     23

         6.6      Code and Other Remedies.......................................................................     24

         6.7      Registration Rights...........................................................................     24

         6.8      Waiver; Deficiency............................................................................     25

Section 7.        THE ADMINISTRATIVE AGENT......................................................................     26

         7.1      Administrative Agent's Appointment as Attorney-in-Fact, etc...................................     26

         7.2      Duty of Administrative Agent..................................................................     27

         7.3      Execution of Financing Statements.............................................................     28

         7.4      Authority of Administrative Agent.............................................................     28

Section 8.        MISCELLANEOUS.................................................................................     28

         8.1      Amendments in Writing.........................................................................     28

         8.2      Notices.......................................................................................     28

         8.3      No Waiver by Course of Conduct; Cumulative Remedies...........................................     28

         8.4      Enforcement Expenses; Indemnification.........................................................     29

         8.5      Successors and Assigns........................................................................     29

         8.6      Set-Off.......................................................................................     29

         8.7      Counterparts..................................................................................     30

         8.8      Severability..................................................................................     30

                                                                                                           Page
                                                                                                           ----
8.9      Section Headings..............................................................................     30

8.10     Integration...................................................................................     30

8.11     GOVERNING LAW.................................................................................     30

8.12     Submission To Jurisdiction; Waivers...........................................................     30

8.13     Acknowledgements..............................................................................     31

8.14     Additional Guarantors.........................................................................     31

8.15     Releases......................................................................................     31

8.16     WAIVER OF JURY TRIAL..........................................................................     32

Schedule 1        Notice Addresses of Guarantors

Schedule 2        Description of Pledged Securities

Schedule 3        Filings and Other Actions Required to Perfect
                  Security Interest

Schedule 4        Jurisdiction of Organization, Identification Number
                  and Location of Chief Executive Office

Schedule 5        Locations of Inventory and Equipment

Schedule 6        Intellectual Property

Schedule 7        Existing Prior Liens

Schedule 8        Commercial Tort Claims

ANNEXES:

Annex I           Assumption Agreement

Annex II          Acknowledgment and Consent

                                      iii

                  GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 30, 2003,

made by Williams Production RMT Company, a Delaware corporation (the "Borrower"), and each of the other signatories hereto (together with any other entity that may become a party hereto as provided herein, the "Guarantors" and, together with the Borrower, the "Grantors" ) in favor of LEHMAN COMMERCIAL PAPER INC., as Administrative Agent (in such capacity, the "Administrative Agent") for the banks and other financial institutions (the "Lenders") from time to time parties to the Term Loan Agreement, dated as of May 30, 2003 (as amended, supplemented or otherwise modified from time to time, the "Term Loan Agreement"), among WILLIAMS PRODUCTION HOLDINGS LLC, a Delaware limited liability company ("Holdings"), the Borrower, the Lenders, LEHMAN BROTHERS INC. and Banc of America Securities LLC, as joint advisors, joint lead arrangers and joint book runners, CITICORP USA, INC. and JPMORGAN CHASE BANK, as co-syndication agents, BANK OF AMERICA, N.A., as documentation agent, and the Administrative Agent.

W I T N E S S E T H:

WHEREAS, pursuant to the Term Loan Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;

WHEREAS, the Borrower is a member of an affiliated group of companies that includes each Guarantor;

WHEREAS, certain of the Qualified Counterparties may enter into Specified Hedge Agreements with one or more of the Borrower and the Guarantors;

WHEREAS, the Borrower and the Guarantors are engaged in related businesses, and each Guarantor will derive substantial direct and indirect benefit from the making of the term loans under the Term Loan Agreement and from the Specified Hedge Agreements; and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective term loans to the Borrower under the Term Loan Agreement that the Borrower and the Guarantors shall have executed and delivered this Agreement to the Administrative Agent for the benefit of the Secured Parties;

NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders to enter into the Term Loan Agreement and to induce the Lenders to make their respective term loans to the Borrower thereunder, the Borrower and each Guarantor hereby agrees with the Administrative Agent, for the benefit of the Secured Parties, as follows:

SECTION 1. DEFINED TERMS

1.1 Definitions. Unless otherwise defined herein, terms defined in the Term Loan Agreement and used herein shall have the meanings given to them in the Term Loan Agreement and the following terms are used herein as defined in the New York UCC: Accounts, Certificated Security, Chattel Paper, Commercial Tort Claims, Documents, Equipment, Farm

Products, General Intangibles, Goods, Instruments, Inventory, Letter of Credit Rights and Supporting Obligations.

(a) The following terms shall have the following meanings:

"Agreement": this Guarantee and Collateral Agreement, as the same may be amended, supplemented or otherwise modified from time to time.

"Borrower Term Loan Agreement Obligations": the collective reference to the unpaid principal of and interest on the Term Loans and all other obligations and liabilities of the Borrower (including, without limitation, interest accruing at the then applicable rate provided in the Term Loan Agreement after the maturity of the Term Loans and interest accruing at the then applicable rate provided in the Term Loan Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to the Administrative Agent or any Lender, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Term Loan Agreement, this Agreement, or the other Loan Documents, or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to the Lenders that are required to be paid by the Borrower pursuant to the terms of any of the foregoing agreements).

"Borrower Hedge Agreement Obligations": the collective reference to all obligations and liabilities of the Borrower (including, without limitation, interest accruing at the then applicable rate provided in any Specified Hedge Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post petition interest is allowed in such proceeding) to any Qualified Counterparty, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any Specified Hedge Agreement or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the relevant Qualified Counterparty that are required to be paid by the Borrower pursuant to the terms of any Specified Hedge Agreement).

"Borrower Obligations": the collective reference to (i) the Borrower Term Loan Agreement Obligations, (ii) the Borrower Hedge Agreement Obligations, but only to the extent that, and only so long as, the Borrower Term Loan Agreement Obligations are secured and guaranteed pursuant hereto and (iii) all other obligations and liabilities of the Borrower, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Agreement (including, without limitation, all fees and disbursements of counsel to

the Administrative Agent or to the Secured Parties that are required to be paid by the Borrower pursuant to the terms of this Agreement).

"Collateral": as defined in Section 3.

"Collateral Account": any collateral account established by the Administrative Agent as provided in Section 5.12, 6.1 or 6.4.

"Contracts": contracts and agreements, as the same may be amended, supplemented or otherwise modified from time to time, including, without limitation, (i) all rights of any Grantor to receive moneys due and to become due to it thereunder or in connection therewith, (ii) all rights of any Grantor to damages arising thereunder and (iii) all rights of any Grantor to perform and to exercise all remedies thereunder.

"Copyrights": (i) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished (including, without limitation, those listed in Schedule 6), all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations, recordings and applications in the United States Copyright Office, and
(ii) the right to obtain all renewals thereof.

"Copyright Licenses": any written agreement naming any Grantor as licensor or licensee (including, without limitation, those listed in Schedule 6), granting any right under any Copyright, including, without limitation, the grant of rights to manufacture, distribute, exploit and sell materials derived from any Copyright.

"Deposit Account": as defined in the Uniform Commercial Code of any applicable jurisdiction and, in any event, including, without limitation, any demand, time, savings, passbook or like account maintained with a depositary institution.

"Excluded Assets": the collective reference to (i) with respect to the Borrower, the Capital Stock owned by the Borrower in (a) Bison Royalty LLC, (b) Piceance Production Holdings LLC, (c) Rulison Production Company LLC or (d) any Subsidiary created or acquired after the Closing Date, in each case to the extent the grant by the Borrower of a security interest pursuant to this Agreement in the Borrower's right, title and interest in such Capital Stock is prohibited, would require the grant of security interest securing obligations or would constitute a breach, event of default or event which with notice or lapse of time would become an event of default under any contract, agreement, instrument or indenture binding on Parent or any of its Subsidiaries and in effect on the date hereof, (ii) with respect to the
(a) Bison Royalty LLC, (b) Piceance Production Holdings LLC, and (c) Rulison Production Company LLC, any property other than Oil and Gas Property, (iii) with respect to the Borrower, the GE Equipment securing the obligations of the Borrower under the GE Loan, to the extent the grant by the Borrower of a security interest pursuant to this Agreement in the Borrower's right, title and interest in such GE Equipment is prohibited, would require the grant of security interest securing obligations or would constitute a breach, event of default or event which with notice or lapse of time would become an event of default under the GE Loan, (iv) with respect to the grant of a security interest pursuant to this Agreement in any other

Contract, General Intangible, Pledged Securities (other than those issued by the Borrower or a Subsidiary), Copyright, License, Patent License or Trademark License ("Intangible Assets") which (A) is prohibited by legally enforceable provisions of any contract, agreement, instrument or indenture governing such Intangible Assets, (B) would give any other party to such contract, agreement, instrument or indenture a legally enforceable right to terminate its obligations thereunder or (C) is permitted only with the consent of another party, if the requirement to obtain such consent is legally enforceable and such consent has not been obtained; provided, that in any event any Receivable or any money or other amounts due or to become due under any such contract, agreement, instrument, indenture or other Collateral shall not be Excluded Assets to the extent that any of the foregoing is (or if it contained a provision limiting the transferability or pledge thereof would be) subject to Section 9-406 of the New York UCC, (v) any Property that does not constitute (A) Collateral of any Grantor under the Existing Guarantee and Collateral Agreement or (B) an Oil and Gas Property, in each case, to the extent that the grant of a security interest pursuant to this Agreement in such Property is prohibited, would require the grant of security interest securing obligations to another or would constitute a breach, event of default or event which with notice or lapse of time would become an event of default under any contract, agreement, instrument or indenture binding on Parent or any of its Subsidiaries and in effect on the date hereof or would reduce the right of Parent or any of its Subsidiaries to grant a security interest securing obligations to another Person under any contract, agreement, instrument or indenture binding on Parent or any of its Subsidiaries, (vi) any office building or related fixtures, (vii) any property set forth on Schedules 6.5(f)(i) or 6.5(i) of the Term Loan Agreement and (viii) Foreign Subsidiary Voting Stock excluded from the definition of "Pledged Stock" set forth in this Section 1.1.

"Existing Guarantee and Collateral Agreement": the Guarantee and Collateral Agreement dated as of July 31, 2002 made by the Parent, the Borrower and certain of its Subsidiaries in favor of Lehman Commercial Paper Inc., as Administrative Agent.

"Foreign Subsidiary": any Subsidiary organized under the laws of any jurisdiction outside the United States of America.

"Foreign Subsidiary Voting Stock": the voting Capital Stock of any Foreign Subsidiary.

"Grantor Obligations": with respect to the Borrower, the Borrower Obligations, and with respect to any other Grantor, its Guarantor Obligations.

"Guarantor Hedge Agreement Obligations": the collective reference to all obligations and liabilities of a Guarantor (including, without limitation, interest accruing at the then applicable rate provided in any Specified Hedge Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Guarantor, whether or not a claim for post-filing or post petition interest is allowed in such proceeding) to any Qualified Counterparty, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, any Specified Hedge Agreement or any other document made, delivered or given in connection

therewith, in each case whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the relevant Qualified Counterparty that are required to be paid by such Guarantor pursuant to the terms of any Specified Hedge Agreement).

"Guarantor Obligations": with respect to any Guarantor, the collective reference to (i) any Guarantor Hedge Agreement Obligations of such Guarantor, but only to the extent that, and only so long as, the other Obligations of such Guarantor are secured and guaranteed pursuant hereto, and (ii) all obligations and liabilities of such Guarantor which may arise under or in connection with this Agreement (including, without limitation, Section 2) or any other Loan Document to which such Guarantor is a party, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Administrative Agent or to any Secured Party that are required to be paid by such Guarantor pursuant to the terms of this Agreement or any other Loan Document).

"Intellectual Property": the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

"Intercompany Note": any promissory note evidencing loans made by any Grantor to Parent or any of its Subsidiaries.

"Investment Property": the collective reference to (i) all "investment property" as such term is defined in Section 9-102(a)(49) of the New York UCC (other than any Foreign Subsidiary Voting Stock excluded from the definition of "Pledged Stock" in this Section 1.1) and (ii) whether or not constituting "investment property" as so defined, all Pledged Notes and all Pledged Stock.

"Issuers": the collective reference to each issuer of any Investment Property.

"New York UCC": the Uniform Commercial Code as from time to time in effect in the State of New York.

"Obligations": (i) in the case of the Borrower, the Borrower Obligations, (ii) in the case of each Guarantor, its Guarantor Obligations, and (iii) in the case of each Grantor, its Grantor Obligations.

"Patents": (i) all letters patent of the United States, any other country or any political subdivision thereof, all reissues and extensions thereof and all goodwill associated therewith, including, without limitation, any of the foregoing referred to in Schedule 6,
(ii) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including, without

limitation, any of the foregoing referred to in Schedule 6, and (iii) all rights to obtain any reissues or extensions of the foregoing.

"Patent License": all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in part by a Patent, including, without limitation, any of the foregoing referred to in Schedule 6.

"Pledged Notes": all promissory notes listed on Schedule 2, all Intercompany Notes at any time issued to any Grantor and all other promissory notes issued to or held by any Grantor (other than promissory notes issued in connection with extensions of trade credit by any Grantor in the ordinary course of business).

"Pledged Securities": the collective reference to the Pledged Notes and the Pledged Stock.

"Pledged Stock": the shares of Capital Stock listed on Schedule 2, together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Person that may be issued or granted to, or held by, any Grantor while this Agreement is in effect; provided that in no event shall more than 65% of the total outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be required to be pledged hereunder.

"Proceeds": all "proceeds" as such term is defined in Section 9-102(a)(64) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, including, without limitation, all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

"Receivable": any right to payment for goods sold, leased, licensed, assigned or otherwise disposed of, or for services rendered (except for any right to payment of any Grantor from Parent or any of its Subsidiaries), whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, any Account).

"Secured Parties": the collective reference to the Administrative Agent, the Lenders and any Qualified Counterparties.

"Securities Act": the Securities Act of 1933, as amended.

"Trademarks": (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common-law rights related

thereto, including, without limitation, any of the foregoing referred to in Schedule 6, and (ii) the right to obtain all renewals thereof.

"Trademark License": any agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark, including, without limitation, any of the foregoing referred to in Schedule 6.

"Vehicles": all cars, trucks, trailers, construction and earth moving equipment and other vehicles covered by a certificate of title law of any state and all tires and other appurtenances to any of the foregoing.

1.2 Other Definitional Provisions. The words "hereof," "herein", "hereto" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Schedule references are to this Agreement unless otherwise specified.

(a) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

(b) Where the context requires, terms relating to the Collateral or any part thereof, when used in relation to a Grantor, shall refer to such Grantor's Collateral or the relevant part thereof.

SECTION 2. GUARANTEE

2.1 Guarantee. (a) (i) The Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantee to the Administrative Agent and the Secured Parties, for the ratable benefit of the Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Borrower when due (whether at stated maturity, by acceleration or otherwise) of the Borrower Obligations (other than, in the case of each Guarantor, Borrower Obligations arising pursuant to clause
(ii) of this Section 2.1(a) in respect of Guarantor Hedge Agreement Obligations in respect of which such Guarantor is a primary obligor).

(ii) The Borrower hereby unconditionally and irrevocably guarantees to the Administrative Agent and the Secured Parties, for the ratable benefit of the Secured Parties and their respective successors, endorsees, transferees and assigns, the prompt and complete payment and performance by each Guarantor when due (whether at stated maturity, by acceleration or otherwise) of the Guarantor Hedge Agreement Obligations of such Guarantor.

(a) Anything herein or in any other Loan Document to the contrary notwithstanding, (i) the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to fraudulent conveyances or transfers or the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2) and (ii) the maximum liability of the Borrower under this Section 2 shall in no event exceed the amount which can be guaranteed by the Borrower under applicable federal and state laws

relating to fraudulent conveyances or transfers or the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2).

(b) Each Guarantor agrees that the Borrower Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee of such Guarantor contained in this Section 2 or affecting the rights and remedies of the Administrative Agent or any Secured Party hereunder. The Borrower agrees that the Guarantor Hedge Agreement Obligations may at any time and from time to time exceed the amount of the liability of the Borrower under this Section 2 without impairing the guarantee of the Borrower contained in this Section 2 or affecting the rights and remedies of the Administrative Agent or any Secured Party hereunder.

(c) Subject to Section 8.15 hereof, the guarantee contained in this Section 2 shall remain in full force and effect until all the Borrower Obligations (other than Borrower Obligations arising under Section 2.1(a)(ii) hereof) and the obligations of each Guarantor under the guarantee contained in this Section 2 (other than Guarantor Obligations in respect of Borrower Obligations arising under Section 2.1(a)(ii) hereof) shall have been satisfied by full and final payment in cash, notwithstanding that from time to time during the term of the Term Loan Agreement the Borrower may be free from any Borrower Obligations and any or all of the Guarantors may be free from their respective Guarantor Hedge Agreement Obligations.

(d) No payment made by the Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent or any Secured Party from the Borrower, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Borrower Obligations or the Guarantor Hedge Agreement Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of the Borrower or any Guarantor under this
Section 2 which shall, notwithstanding any such payment (other than any payment made by the Borrower or such Guarantor in respect of the Borrower Obligations or the Guarantor Hedge Agreement Obligations or any payment received or collected from the Borrower or such Guarantor in respect of the Borrower Obligations or the Guarantor Hedge Agreement Obligations), remain liable for the Borrower Obligations and the Guarantor Hedge Agreement Obligations up to the maximum liability of the Borrower or such Guarantor hereunder until the Borrower Obligations and the Guarantor Hedge Agreement Obligations are fully and finally paid in cash.

2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder or the Guarantor Hedge Agreement Obligations, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. The Borrower and each Guarantor agrees that to the extent that the Borrower or any Guarantor shall have paid more than its proportionate share of any payment made hereunder in respect of any Guarantor Hedge Agreement Obligation of any other Guarantor, the Borrower or such Guarantor, as the case may be, shall be entitled to seek and receive contribution from and against the Borrower and any other Guarantor which has not paid its proportionate share of such payment. The Borrower's and each Guarantor's right of contribution under this Section 2.2 shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of the

Borrower or any Guarantor to the Administrative Agent and the Secured Parties, and the Borrower and each Guarantor shall remain liable to the Administrative Agent and the Secured Parties for the full amount guaranteed by the Borrower or such Guarantor hereunder.

2.3 No Subrogation. Notwithstanding any payment made by the Borrower or any Guarantor hereunder or any set-off or application of funds of the Borrower or any Guarantor by the Administrative Agent or any Secured Party, neither the Borrower nor any Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any Secured Party against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any Secured Party for the payment of the Borrower Obligations or the Guarantor Hedge Agreement Obligations, nor shall the Borrower or any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by the Borrower or such Guarantor hereunder, until all amounts owing to the Administrative Agent and the Secured Parties by the Borrower on account of the Borrower Obligations are fully and finally paid in cash. If any amount shall be paid to the Borrower or any Guarantor on account of such subrogation rights at any time when all of the Borrower Obligations shall not have been fully and finally paid in cash, such amount shall be held by the Borrower or such Guarantor in trust for the Administrative Agent and the Secured Parties, segregated from other funds of the Borrower or such Guarantor, and shall, forthwith upon receipt by the Borrower or such Guarantor, be turned over to the Administrative Agent in the exact form received by the Borrower or such Guarantor (duly indorsed by the Borrower or such Guarantor to the Administrative Agent, if required), to be applied against the Borrower Obligations or the Guarantor Hedge Agreement Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.

2.4 Amendments, Etc. With Respect to the Borrower Obligations. The Borrower and each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against the Borrower or any Guarantor and without notice to or further assent by the Borrower or any Guarantor, any demand for payment of any of the Borrower Obligations or Guarantor Hedge Agreement Obligations made by the Administrative Agent or any Secured Party may be rescinded by the Administrative Agent or such Secured Party and any of the Borrower Obligations or Guarantor Hedge Agreement Obligations continued, and the Borrower Obligations or Guarantor Hedge Agreement Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any Secured Party (with the consent of such of the Borrower and the Guarantor as shall be required thereunder), and the Specified Hedge Agreements, the Term Loan Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders or all Lenders, as the case may be) may (with the consent of such of the Borrower and the Guarantor as shall be required thereunder) deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Administrative Agent or any Secured Party for the payment of the Borrower Obligations or Guarantor Hedge Agreement Obligations may (with the consent of such of the Borrower and the Guarantor as shall be required thereunder) be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor any Secured Party shall, except to

the extent set forth in, and for the benefit of the parties to, the agreements and instruments governing such Lien or guarantee, have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Borrower Obligations or Guarantor Hedge Agreement Obligations or for the guarantees contained in this Section 2 or any property subject thereto.

2.5 Guarantee Absolute and Unconditional. (a) Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Borrower Obligations (other than any notice with respect to any Guarantor Hedge Agreement Obligation with respect to which such Guarantor is a primary obligor and to which it is entitled pursuant to the applicable Specified Hedge Agreement) and notice of or proof of reliance by the Administrative Agent or any Secured Party upon the guarantee contained in this
Section 2 or acceptance of the guarantee contained in this Section 2; the Borrower Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Administrative Agent and the Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower or any of the Guarantors with respect to the Borrower Obligations (other than any diligence, presentment, protest, demand or notice with respect to any Guarantor Hedge Agreement Obligation with respect to which such Guarantor is a primary obligor and to which it is entitled pursuant to the applicable Specified Hedge Agreement). Each Guarantor understands and agrees that the guarantee of such Guarantor contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (1) the validity or enforceability of the Term Loan Agreement or any other Loan Document, any of the Borrower Obligations or any collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Secured Party,
(2) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower or any other Person against the Administrative Agent or any Secured Party, or (3) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Borrower for the Borrower Obligations, or of such Guarantor under the guarantee of such Guarantor contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Administrative Agent or any Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Guarantor or any other Person or against any collateral security or guarantee for the Borrower Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent or any Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability under this Section 2, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any Secured Party against any

Guarantor. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings.

(a) The Borrower waives any and all notice of the creation, renewal, extension or accrual of any of the Guarantor Hedge Agreement Obligations and notice of or proof of reliance by the Administrative Agent or any Secured Party upon the guarantee by the Borrower contained in this Section 2 or acceptance of the guarantee by the Borrower contained in this Section 2; the Guarantor Hedge Agreement Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee by the Borrower contained in this Section 2; and all dealings between the Borrower and any of the Guarantors, on the one hand, and the Administrative Agent and the Secured Parties, on the other hand, with respect to any Guarantor Hedge Agreement Obligation likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee by the Borrower contained in this Section 2. The Borrower waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower with respect to the Guarantor Hedge Agreement Obligations. The Borrower understands and agrees that the guarantee by the Borrower contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (1) the validity or enforceability of the Guarantor Hedge Agreement Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any Secured Party, (2) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by any Person against the Administrative Agent or any Secured Party, or (3) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower or any Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the applicable Guarantor for the applicable Guarantor Hedge Agreement Obligations, or of the Borrower under its guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand under this Section 2 or otherwise pursuing its rights and remedies under this Section 2 against the Borrower, the Administrative Agent or any Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against any Guarantor or any other Person or against any collateral security or guarantee for the Guarantor Hedge Agreement Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent or any Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from any Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of any Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve the Borrower of any obligation or liability under this Section 2, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent or any Secured Party against the Borrower under this Section 2. For the purposes hereof "demand" shall include the commencement and continuance of any legal proceedings.

2.6 Reinstatement. The guarantee contained in this
Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Borrower Obligations or Guarantor Hedge Agreement Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Secured Party upon

the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

2.7 Payments. The Borrower and each Guarantor hereby guarantees that payments by it hereunder will be paid to the Administrative Agent without set-off or counterclaim (i) in the case of obligations in respect of Borrower Obligations arising under the Term Loan Agreement or any other Loan Document, in Dollars at the Payment Office specified in the Term Loan Agreement, and (ii) in the case of obligations in respect of any Borrower Hedge Agreement Obligations or any Guarantor Hedge Agreement Obligations, in the currency and at the place specified in the applicable Specified Hedge Agreement.

SECTION 3. GRANT OF SECURITY INTEREST

Each Grantor hereby assigns and transfers to the Administrative Agent, and hereby grants to the Administrative Agent and the Secured Parties, for the ratable benefit of the Secured Parties, a security interest in, all of the following property now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest (collectively, the "Collateral"), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of such Grantor's Obligations:

(a) all Accounts;

(b) all Chattel Paper;

(c) all Contracts;

(d) all Deposit Accounts;

(e) all Documents;

(f) all Equipment;

(g) all General Intangibles;

(h) all Instruments;

(i) all Intellectual Property;

(j) all Inventory;

(k) all Investment Property;

(l) all Letter of Credit Rights;

(m) all Vehicles;

(n) all Commercial Tort Claims described on Schedule 8 and on any supplement thereto received by the Administrative Agent pursuant to Section 5.10;

(o) all Goods and other property, whether tangible or intangible and wherever located, not otherwise described above;

(p) all books and records pertaining to the Collateral; and

(q) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing, all Supporting Obligations in respect of any of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

provided, that the Collateral shall not include the Excluded Assets; provided, further, that if and when the prohibition which prevents the granting by such Grantor to the Administrative Agent of a security interest in such Excluded Asset is removed or otherwise terminated, the Administrative Agent will be deemed to have, and at all times from and after the date hereof to have had, a security interest in such Excluded Asset, as the case may be.

SECTION 4. REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to enter into the Term Loan Agreement and to induce the Lenders to make their respective term loans to the Borrower thereunder, each Grantor, and with respect to Section 4.1, each Guarantor, hereby represents and warrants to the Administrative Agent and each Lender that:

4.1 Representations in Term Loan Agreement. In the case of each Guarantor, the representations and warranties set forth in Section 3 of the Term Loan Agreement as they relate to such Guarantor or to the Loan Documents to which such Guarantor is a party, each of which is hereby incorporated herein by reference, are true and correct, and the Administrative Agent and each Lender shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed to be a reference to such Guarantor's knowledge.

4.2 Title; No Other Liens. Except for the security interest granted to the Administrative Agent and the Secured Parties for the ratable benefit of the Secured Parties pursuant to this Agreement and the other Liens permitted to exist on the Collateral by the Term Loan Agreement, such Grantor owns each item of the Collateral free and clear of any and all Liens or claims of others. No financing statement or other public notice with respect to all or any part of the Collateral is on file or of record in any public office, except such as have been filed in favor of the Administrative Agent and the Secured Parties, for the ratable benefit of the Secured Parties, pursuant to this Agreement or as are permitted by the Term Loan Agreement.

4.3 Perfected First-Priority Liens. The security interests granted pursuant to this Agreement (a) upon completion of the filings and other actions specified on Schedule 3 (which, in the case of all UCC financing statements and Mortgages referred to on said Schedule, have been delivered to the Administrative Agent in completed and duly executed form) will

constitute valid perfected security interests in all of the Collateral in favor of the Administrative Agent and the Secured Parties, for the ratable benefit of the Secured Parties, as collateral security for such Grantor's Obligations, enforceable in accordance with the terms hereof against all creditors of such Grantor and any Persons purporting to purchase any Collateral from such Grantor and (b) in respect of Collateral consisting of Capital Stock are prior to all other Liens in existence on the date hereof, and (c) in respect of all other Collateral are prior to all other Liens in existence on the date hereof except for Permitted Liens.

4.4 Jurisdiction of Organization; Chief Executive Office. On the date hereof, such Grantor's jurisdiction of organization, identification number from the jurisdiction of organization (if any), and the location of such Grantor's chief executive office or sole place of business or principal residence, as the case may be, are specified on Schedule 4. Such Grantor has furnished to the Administrative Agent a certified charter, certificate of incorporation or other organization document and long-form good standing certificate as of a date which is recent to the date hereof.

4.5 Inventory and Equipment. On the date hereof, the Inventory and the Equipment (other than mobile goods) are kept in the counties listed on Schedule 5.

4.6 Farm Products. None of the Collateral constitutes, or is the Proceeds of, Farm Products.

4.7 Investment Property. The shares of Pledged Stock pledged by such Grantor hereunder constitute all the issued and outstanding shares of all classes of the Capital Stock of each Issuer owned by such Grantor or, in the case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.

(a) All the shares of the Pledged Stock have been duly and validly issued and are fully paid and nonassessable.

(b) Each of the Pledged Notes constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

(c) Such Grantor is the record and beneficial owner of the Investment Property pledged by it hereunder, free of any and all Liens or options in favor of, or claims of, any other Person, except the security interest created by this Agreement and Permitted Liens.

4.8 Receivables. No amount payable to such Grantor under or in connection with any Receivable is evidenced by any Instrument or Chattel Paper which has not been delivered to the Administrative Agent to the extent required by Section 5.2.

(a) None of the obligors on any Receivable is a Governmental Authority, except for Receivables constituting not more than 5% of the face amount of all Receivables.

(b) The amounts represented by such Grantor to the Secured Parties from time to time as owing to such Grantor in respect of the Receivables will at such times be accurate.

4.9 Vehicles. The aggregate book value of all Vehicles owned by all Grantors is less than $5,000,000.

4.10 Intellectual Property. Schedule 6 lists all registered Intellectual Property owned by such Grantor in its own name on the date hereof.

(a) On the date hereof, all material Intellectual Property of such Grantor described on Schedule 6 is valid, subsisting, unexpired and enforceable, has not been abandoned and does not infringe the intellectual property rights of any other Person.

(b) Except as set forth in Schedule 6, on the date hereof, none of the Intellectual Property is the subject of any licensing or franchise agreement pursuant to which such Grantor is the licensor or franchisor.

(c) No holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of, or such Grantor's rights in, any Intellectual Property in any respect that could reasonably be expected to have a Material Adverse Effect.

(d) No action or proceeding is pending, or, to the knowledge of such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question the validity of any material Intellectual Property or such Grantor's ownership interest therein, or (ii) which, could reasonably be expected to have a material adverse effect on the value of any Intellectual Property.

4.11 Contracts. Subject to 9407(b), 9408(b), 9409(b) of the New York UCC, no consent of any party (other than such Grantor) to any Contract is required, or purports to be required, in connection with the execution, delivery and performance of this Agreement.

(a) No amount payable to such Grantor under or in connection with any Contract is evidenced by any Instrument or Chattel Paper which, to the extent required to be delivered pursuant to Section 5.2 has not been delivered to the Administrative Agent.

SECTION 5. COVENANTS

Each Grantor, and with respect to Sections 5.1, 5.7 and 5.11, each Guarantor, covenants and agrees with the Administrative Agent and the Secured Parties that, from and after the date of this Agreement until the Obligations shall have been paid in full:

5.1 Covenants in Term Loan Agreement. In the case of each Guarantor, such Guarantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such Guarantor or any of its Subsidiaries.

5.2 Delivery of Instruments and Chattel Paper. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument,

Certificated Security or Chattel Paper, such Instrument, Certificated Security or Chattel Paper shall be promptly delivered to the Administrative Agent, duly indorsed in a manner satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Agreement; provided that the Grantors shall not be obligated to deliver to the Administrative Agent any Instruments or Chattel Paper held by any Grantor at any time to the extent that the aggregate face amount of all such Instruments and Chattel Paper held by all Grantors at such time does not exceed $10,000,000.

5.3 Maintenance of Insurance. Such Grantor will maintain, with financially sound and reputable companies, insurance on all its Property (including, without limitation, all Inventory, Equipment and Vehicles) in at least such amounts and against at least such risks as are usually insured against by businesses of similar size and character of such Grantor, including, without limitation, (i) property insurance against loss by fire, explosion, theft and such other casualties as may be reasonably satisfactory to the Administrative Agent and (ii) insurance covering such Grantor, the Administrative Agent and the Secured Parties against liability for personal injury and property damage relating to such Property.

(a) All such insurance shall (i) provide that no cancellation, material reduction in amount or material change in coverage thereof shall be effective until at least 30 days after receipt by the Administrative Agent of written notice thereof, (ii) name the Administrative Agent as an additional insured party under such liability insurance and loss payee under such property insurance, (iii) if reasonably requested by the Administrative Agent and to the extent obtainable on commercially reasonable terms, include a breach of warranty clause and (iv) be reasonably satisfactory in all other respects to the Administrative Agent.

(b) The Borrower shall deliver to the Administrative Agent and the Lenders a report of a reputable insurance broker with respect to such insurance substantially concurrently with the delivery by the Borrower to the Administrative Agent of its audited financial statements for each fiscal year and such supplemental reports with respect thereto as the Administrative Agent may from time to time reasonably request.

5.4 Maintenance of Perfected Security Interest; Further Documentation. (a) Such Grantor shall maintain the security interest created by this Agreement as a perfected security interest having at least the priority described in Section 4.3 and shall defend such security interest against the claims and demands of all Persons whomsoever.

(a) Such Grantor will furnish to the Administrative Agent and the Lenders from time to time statements and schedules further identifying and describing the assets and property of such Grantor and such other reports in connection with the Collateral as the Administrative Agent may reasonably request, all in reasonable detail.

(b) At any time and from time to time, upon the written request of the Administrative Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver, and have recorded, such further instruments and documents and take such further actions as the Administrative Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, (i) the filing of any financing or continuation statements under the Uniform Commercial Code (or other similar laws) in effect in any jurisdiction with

respect to the security interests created hereby and (ii) in the case of Investment Property, Deposit Accounts and Letter of Credit Rights, taking any actions necessary to enable the Administrative Agent to obtain "control" (within the meaning of the applicable Uniform Commercial Code) with respect thereto.

5.5 Changes in Name, Etc. Such Grantor will not, except upon 15 days' prior written notice to the Administrative Agent and delivery to the Administrative Agent of all additional executed financing statements and other documents reasonably requested by the Administrative Agent to maintain the validity, perfection and priority of the security interests provided for herein:

(i) change its jurisdiction of organization or the location of its chief executive office or sole place of business or principal residence from that referred to in Section 4.4; or

(ii) change its name.

5.6 Notices. Such Grantor will advise the Administrative Agent promptly, in reasonable detail, of any Lien (other than security interests created hereby or Liens permitted under the Term Loan Agreement) on any of the Collateral which would adversely affect the ability of the Administrative Agent to exercise any of its remedies hereunder.

5.7 Investment Property. (a) If such Grantor shall become entitled to receive or shall receive any certificate (including, without limitation, any certificate representing a dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), option or rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Administrative Agent and the Secured Parties, hold the same in trust for the Administrative Agent and the Secured Parties and deliver the same forthwith to the Administrative Agent in the exact form received, duly indorsed by such Grantor to the Administrative Agent, if required, together with an undated stock power covering such certificate duly executed in blank by such Grantor and with, if the Administrative Agent so requests, signature guaranteed, to be held by the Administrative Agent, subject to the terms hereof, as additional collateral security for the Obligations; provided, however, that any such certificate that does not evidence securities issued by a Subsidiary of Holdings may be held in a Securities Account included in the Collateral. Any sums paid upon or in respect of the Investment Property upon the liquidation or dissolution of any Issuer shall (i) unless such Issuer is a Subsidiary of Holdings, be held or deposited in a Securities Account or a Deposit Account included in the Collateral (until used or reinvested in the ordinary course of business) or (ii) be paid over to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Investment Property, or any property shall be distributed upon or with respect to the Investment Property pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Administrative Agent, be delivered to the Administrative Agent to be held by it hereunder as additional collateral security for the Obligations. If any sums of money or property so paid or distributed in respect of the Investment

Property shall be received by such Grantor, such Grantor shall, until such money or property is held or deposited in a Securities Account or Deposit Account (as permitted under clause (i) above) or paid or delivered to the Administrative Agent, hold such money or property in trust for the Secured Parties, segregated from other funds of such Grantor, as additional collateral security for the Obligations. Notwithstanding the foregoing, the Grantors shall not be required to pay over to the Administrative Agent or deliver to the Administrative Agent as Collateral any proceeds of any liquidation or dissolution of any Issuer, or any distribution of capital or property in respect of any Investment Property, to the extent that (i) such liquidation, dissolution or distribution, if treated as a Disposition of the relevant Issuer, would be permitted by the Term Loan Agreement and (ii) the proceeds thereof are applied toward prepayment of Term Loans to the extent required by the Term Loan Agreement.

(a) Without the prior written consent of the Administrative Agent, such Grantor will not (i) vote to enable, or take any other action to permit, any Issuer that is a Subsidiary of Holdings to issue any stock or other equity securities of any nature or to issue any other securities convertible into or granting the right to purchase or exchange for any stock or other equity securities of any nature of any Issuer, unless such securities are delivered to the Administrative Agent, concurrently with the issuance thereof, to be held by the Administrative Agent as Collateral, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Investment Property or Proceeds thereof (except pursuant to a transaction not prohibited by the Term Loan Agreement), or (iii) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Investment Property or Proceeds thereof, or any interest therein, except for the security interests created by this Agreement and except for Permitted Liens.

(b) In the case of each Grantor and each Guarantor which is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Pledged Securities issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 5.7(a) with respect to the Pledged Securities issued by it and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to
Section 6.3(c) or 6.7 with respect to the Pledged Securities issued by it.

(c) Each Subsidiary of Holdings that is a partnership or a limited liability company and each Grantor (i) confirms that none of the terms of any equity interest issued by such Issuer provides that such equity interest is a "security" within the meaning of Sections 8-102 and 8-103 of the New York UCC (a "Security"), (ii) agrees that it will, and cause such Issuer to, take no action to cause or permit any such equity interest to become a Security, (iii) agrees that it will not, and cause such Issuer to not, issue any certificate representing any such equity interest and (iv) agrees that if, notwithstanding the foregoing, any such equity interest shall be or become a Security, it will, or cause such Issuer to, (and the Grantor that holds such equity interest hereby instructs such Issuer to) comply with instructions originated by the Administrative Agent without further consent by such Grantor.

5.8 Receivables. Other than in the ordinary course of business consistent with its past practice, such Grantor will not (i) grant any extension of the time of payment of any Receivable, (ii) compromise or settle any Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Receivable, (iv) allow any credit or discount whatsoever on any Receivable or (v) amend, supplement or modify any Receivable in any manner that could adversely affect the value thereof except to the extent that failure to comply with any or all of the provisions of clauses (i) to (iv) (inclusive) of this Section 5.8 could not reasonably be expected to have a Material Adverse Effect.

(a) Such Grantor will deliver to the Administrative Agent a copy of each material demand, notice or document received by it that questions or calls into doubt the validity or enforceability of more than 5% of the aggregate amount of the then outstanding Receivables.

5.9 Intellectual Property. Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall file an application for the registration of any Intellectual Property with the United States Patent and Trademark Office, the United States Copyright Office or any similar office or agency in any other country or any political subdivision thereof, such Grantor shall report such filing to the Administrative Agent within five Business Days after the last day of the fiscal quarter in which such filing occurs. Upon request of the Administrative Agent, such Grantor shall execute and deliver, and have recorded, any and all agreements, instruments, documents, and papers as the Administrative Agent may request to evidence the Administrative Agent's and the Secured Parties' security interest in any Copyright, Patent or Trademark and the goodwill and general intangibles of such Grantor relating thereto or represented thereby.

5.10 Notice of Commercial Tort Claims. Such Grantor agrees that, if it shall acquire any interest in any Commercial Tort Claim in excess of $25,000,000 (whether from another Person or because such Commercial Tort Claim shall have come into existence) and, if requested by the Administrative Agent,
(i) such Grantor shall, promptly upon such acquisition, deliver to the Administrative Agent, in each case in form and substance reasonably satisfactory to the Administrative Agent, a notice of the existence and nature of such Commercial Tort Claim and deliver a supplement to Schedule 8 containing a specific description of such Commercial Tort Claim, certified by such Grantor as true, correct and complete, (ii) the provision of Section 3 shall apply to such Commercial Tort Claim (and the Grantor authorizes the Administrative Agent to supplement such schedule with a description of such Commercial Tort Claim if such Grantor fails to deliver the supplement described in clause (i)) and (iii) such Grantor shall execute and deliver to the Administrative Agent, in each case in form and substance reasonably satisfactory to the Administrative Agent, any certificate, agreement and other document, and take all other action, deemed by the Administrative Agent to be reasonably necessary or appropriate for the Administrative Agent to obtain, on behalf of the Secured Parties, a first-priority, perfected security interest in all such Commercial Tort Claims. Any supplement to Schedule 8 delivered pursuant to this Section 5.10 shall become part of Schedule 8 for all purposes hereunder other than, absent a written consent of the Administrative Agent, for purpose of the representations and warranties set forth in Section 4.12.

5.11 Subordination. Any Indebtedness of the Borrower or any of its Subsidiaries to Parent, Holdings or any of Parent's Subsidiaries (other than Holdings, the

Borrower or any of the Borrower's Subsidiaries) shall be subordinated in right of payment to the Obligations under the Loan Documents.

5.12 Collateral Account. The Borrower will maintain a Collateral Account under the sole dominion and control of the Administrative Agent for any cash or Cash Equivalents deposited therein pursuant to Section 6.16 of the Term Loan Agreement.

SECTION 6. REMEDIAL PROVISIONS

6.1 Certain Matters Relating to Receivables. The Administrative Agent shall have the right, at any time after the occurrence and during the continuance of an Event of Default, to make test verifications of the Receivables in any manner and through any medium that it reasonably considers advisable, and each Grantor shall furnish all such assistance and information as the Administrative Agent may require in connection with such test verifications. At any time and from time to time after the occurrence and during the continuance of an Event of Default, upon the Administrative Agent's request and at the expense of the relevant Grantor, such Grantor shall cause independent public accountants or others satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Receivables.

(a) The Administrative Agent hereby authorizes each Grantor to collect such Grantor's Receivables, subject to the Administrative Agent's direction and control after the occurrence and during the continuance of an Event of Default, and the Administrative Agent may curtail or terminate said authority at any time after the occurrence and during the continuance of an Event of Default. If required by the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, any payments of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any event, within two Business Days) deposited by such Grantor in the exact form received, duly indorsed by such Grantor to the Administrative Agent if required, in a Collateral Account maintained under the sole dominion and control of the Administrative Agent, subject to withdrawal by the Administrative Agent for the account of the Secured Parties only as provided in Section 6.5, and (ii) until so turned over, shall be held by such Grantor in trust for the Administrative Agent and the Secured Parties, segregated from other funds of such Grantor.

(b) At the Administrative Agent's request, after the occurrence of and during the continuance of an Event of Default, each Grantor shall make available to the Administrative Agent all original and other documents evidencing, and relating to, the agreements and transactions which gave rise to the Receivables, including, without limitation, all original orders, invoices and shipping receipts.

(c) At any time after the occurrence and during the continuance of an Event of Default, at the Administrative Agent's request each Grantor will cooperate with the Administrative Agent to establish a system of lockbox accounts, under the sole dominion and control of the Administrative Agent, into which all Receivables shall be paid and from which all collected funds will be transferred to a Collateral Account.

6.2 Communications with Obligors; Grantors Remain Liable. The Administrative Agent in its own name or in the name of others may at any time after the

occurrence and during the continuance of an Event of Default communicate with obligors under the Receivables and parties to the Contracts to verify with them to the Administrative Agent's satisfaction the existence, amount and terms of any Receivables or Contracts.

(a) Upon the request of the Administrative Agent at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall notify obligors on the Receivables and parties to the Contracts that the Receivables and the Contracts have been assigned to the Administrative Agent and the Secured Parties for the ratable benefit of the Lenders and that payments in respect thereof shall be made directly to the Administrative Agent.

(b) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of the Receivables (or any agreement giving rise thereto) and Contracts to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. Neither the Administrative Agent nor any Secured Party shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) or Contract by reason of or arising out of this Agreement or the receipt by the Administrative Agent or any Secured Party of any payment relating thereto, nor shall the Administrative Agent or any Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Receivable (or any agreement giving rise thereto) or Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

6.3 Pledged Stock. Unless an Event of Default shall have occurred and be continuing and the Administrative Agent shall have given notice to the relevant Grantor of the Administrative Agent's intent to exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted to receive all cash dividends paid in respect of the Pledged Stock and all payments made in respect of the Pledged Notes, in each case to the extent permitted in the Term Loan Agreement, and to exercise all voting and corporate rights with respect to the Pledged Securities; provided, however, that no vote shall be cast or corporate right exercised or other action taken which, would materially impair the Collateral (except Dispositions permitted under the Term Loan Agreement) or which would result in any violation of any provision of the Term Loan Agreement, this Agreement or any other Loan Document.

(a) If an Event of Default shall occur and be continuing and the Administrative Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Securities and make application thereof to the Obligations in the order set forth in Section 6.5, and (ii) any or all of the Pledged Securities shall be registered in the name of the Administrative Agent or its nominee, and the Administrative Agent or its nominee may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Securities at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to such Pledged Securities as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Securities upon the merger, consolidation, reorganization, recapitalization

or other fundamental change in the corporate structure of any Issuer, or upon the exercise by any Grantor or the Administrative Agent of any right, privilege or option pertaining to such Pledged Securities, and in connection therewith, the right to deposit and deliver any and all of the Pledged Securities with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Administrative Agent may determine), all without liability except to account for property actually received by it, but the Administrative Agent shall have no duty to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing.

(b) Each Grantor hereby authorizes and instructs each Issuer of any Pledged Securities pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Administrative Agent in writing that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Securities directly to the Administrative Agent.

6.4 Proceeds to be Turned Over To Administrative Agent. In addition to the rights of the Administrative Agent and the Secured Parties specified in Section 6.1 with respect to payments of Receivables, if an Event of Default shall occur and be continuing and, if required by the Administrative Agent, all Proceeds received by any Grantor consisting of cash, checks and Instruments shall be held by such Grantor in trust for the Administrative Agent and the Secured Parties, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Administrative Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Administrative Agent, if required). All Proceeds received by the Administrative Agent hereunder shall be held by the Administrative Agent in a Collateral Account maintained under its sole dominion and control. All Proceeds while held by the Administrative Agent in a Collateral Account (or by such Grantor in trust for the Administrative Agent and the Secured Parties) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in Section 6.5.

6.5 Application of Proceeds. If an Event of Default shall have occurred and be continuing and the Lenders have elected to exercise remedies in accordance with the terms of the Term Loan Agreement, at any time at the Administrative Agent's election, the Administrative Agent may apply all or any part of Proceeds constituting Collateral, whether or not held in any Collateral Account, and any proceeds of the guarantee set forth in Section 2, in payment of the Obligations in the following order:

First, to pay incurred and unpaid fees and expenses of the Administrative Agent under the Loan Documents;

Second, to the Administrative Agent, for application by it towards payment of amounts then due and owing and remaining unpaid in respect of the Obligations, pro rata among the Secured Parties according to the amounts of the Obligations then due and owing and remaining unpaid to the Secured Parties;

Third, to the Administrative Agent, for application by it towards prepayment of the Obligations, pro rata among the Secured Parties according to the amounts of the Obligations then held by the Secured Parties; and

Fourth, any balance of such Proceeds remaining after the Obligations shall have been paid in full shall be paid over to the Borrower or to whomsoever may be lawfully entitled to receive the same.

6.6 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Administrative Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the New York UCC or any other applicable law. Without limiting the generality of the foregoing, the Administrative Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of the Administrative Agent or any Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. The Administrative Agent or any Secured Party shall have the right upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in any Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the Administrative Agent's request, to assemble the Collateral and make it available to the Administrative Agent at places which the Administrative Agent shall reasonably select, whether at such Grantor's premises or elsewhere. The Administrative Agent shall apply the net proceeds of any action taken by it pursuant to this
Section 6.6 with respect to any Grantor's Collateral, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral of such Grantor or in any way relating to the Collateral of such Grantor or the rights of the Administrative Agent and the Secured Parties hereunder with respect thereto, including, without limitation, reasonable attorneys' fees and disbursements, to the payment in whole or in part of the Obligations of such Grantor, in the order specified in Section 6.5, and only after such application and after the payment by the Administrative Agent of any other amount required by any provision of law, including, without limitation, Section 9-615(a)(3) of the New York UCC, need the Administrative Agent account for the surplus, if any, to any Grantor. To the extent permitted by applicable law, each Grantor waives all claims, damages and demands it may acquire against the Administrative Agent or any Secured Party arising out of the exercise by them of any rights hereunder, (except to the extent that such claims, damages and demands resulted from the gross negligence or willful misconduct of the Administrative Agent or any Secured Party). If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.

6.7 Registration Rights. If the Administrative Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Section 6.6, and if in the opinion of the Administrative Agent it is necessary or advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, with respect to any Issuer that is a Subsidiary of Holdings, the relevant Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Administrative Agent, necessary or advisable to register the Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act,
(ii) use its best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the opinion of the Administrative Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Each Grantor agrees to cause such Issuer to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Administrative Agent shall designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act.

(a) Each Grantor recognizes that the Administrative Agent may be unable to effect a public sale of any or all the Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Each Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Administrative Agent shall be under no obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.

(b) Each Grantor agrees to use its best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and binding and in compliance with any and all other applicable Requirements of Law. Each Grantor further agrees that a breach of any of the covenants contained in this Section 6.7 will cause irreparable injury to the Administrative Agent and the Secured Parties, that the Administrative Agent and the Secured Parties have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section 6.7 shall be specifically enforceable against such Grantor, and such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred under the Term Loan Agreement.

6.8 Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay its Obligations and the fees and disbursements of any attorneys employed by the Administrative Agent or any Secured Party to collect such deficiency.

SECTION 7. THE ADMINISTRATIVE AGENT

7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. Each Grantor hereby irrevocably constitutes and appoints the Administrative Agent and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to carry out any obligation imposed on such Grantor under this Agreement or to enable the Administrative Agent or any Lender and any officer or agent thereof, to exercise any of the rights, remedies, powers and authorities conferred on them under or by this Agreement, and, without limiting the generality of the foregoing, each Grantor hereby gives the Administrative Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following:

(i) in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Receivable or Contract or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by the Administrative Agent for the purpose of collecting any and all such moneys due under any Receivable or Contract or with respect to any other Collateral whenever payable;

(ii) in the case of any Intellectual Property, execute and deliver, and have recorded, any and all agreements, instruments, documents and papers as the Administrative Agent may request to evidence the Administrative Agent's and the Secured Parties' security interest in such Intellectual Property and the goodwill and general intangibles of such Grantor relating thereto or represented thereby;

(iii) pay or discharge taxes and Liens levied or placed on or threatened against the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof;

(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any indorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

(v) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to the Administrative Agent or as the Administrative Agent shall direct; ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; sign and indorse any invoices, freight or express bills, bills of lading, storage or

warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; defend any suit, action or proceeding brought against such Grantor with respect to any Collateral; settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, give such discharges or releases as the Administrative Agent may deem appropriate; assign any Copyright, Patent or Trademark (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), throughout the world for such term or terms, on such conditions, and in such manner, as the Administrative Agent shall in its sole discretion determine; and generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes, and do, at the Administrative Agent's option and such Grantor's expense, at any time, or from time to time, all acts and things which the Administrative Agent deems necessary to protect, preserve or realize upon the Collateral and the Administrative Agent's and the Secured Parties' security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do; and license or sublicense whether on an exclusive or non-exclusive basis, any Intellectual Property for such term and on such conditions and in such manner as the Administrative Agent shall in its sole judgment determine and, in connection therewith, such Grantor hereby grants to the Administrative Agent for the benefit of the Secured Parties a royalty-free, world-wide irrevocable license of its Intellectual Property.

Anything in this Section 7.1(a) to the contrary notwithstanding, the Administrative Agent agrees that it will not exercise any rights under the power of attorney provided for in this Section 7.1(a) unless an Event of Default shall have occurred and be continuing.

(b) If any Grantor fails to perform or comply with any of its agreements contained herein, the Administrative Agent, at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement.

(c) The expenses of the Administrative Agent incurred in connection with actions undertaken as provided in this Section 7.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due Base Rate Loans under the Term Loan Agreement, from the date of payment by the Administrative Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Administrative Agent on demand.

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released.

7.2 Duty of Administrative Agent. The Administrative Agent's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession,

under Section 9-207 of the New York UCC or otherwise, shall be to deal with it in the same manner as the Administrative Agent deals with similar property for its own account. Neither the Administrative Agent, any Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Administrative Agent and the Secured Parties hereunder are solely to protect the Administrative Agent's and the Secured Parties' interests in the Collateral and shall not impose any duty upon the Administrative Agent or any Secured Party to exercise any such powers. The Administrative Agent and the Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

7.3 Execution of Financing Statements. Pursuant to any applicable law, each Grantor authorizes the Administrative Agent to file or record financing statements and other filing or recording documents or instruments with respect to the Collateral without the signature of such Grantor in such form and in such offices as the Administrative Agent determines appropriate to perfect the security interests of the Administrative Agent under this Agreement. Each Grantor (other than the Bison Entities and each Grantor that becomes a party hereto after the date hereof) authorizes the Administrative Agent to use the collateral description "all assets" in any such financing statements. Each of the Bison Entities and each Grantor that becomes a party hereto after the date hereof authorizes the Administrative Agent to use the collateral description "Oil and Gas Properties" in any such financing statements (as well as a description of any other Collateral provided to the Lenders by such Grantor pursuant to the terms hereof). Each Grantor hereby ratifies and authorizes the filing by the Administrative Agent of any financing statement with respect to the Collateral made prior to the date hereof.

7.4 Authority of Administrative Agent. Each Grantor acknowledges that the rights and responsibilities of the Administrative Agent under this Agreement with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement shall, as between the Administrative Agent and the Secured Parties, be governed by the Term Loan Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and the Grantors, the Administrative Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority. Notwithstanding any other provision herein or in any Loan Document, the only duty or responsibility of the Administrative Agent to any Qualified Counterparty under this Agreement is the duty to remit to such Qualified Counterparty any amounts to which it is entitled pursuant to Section 6.5.

SECTION 8. MISCELLANEOUS

8.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except in accordance

with Section 9.1 of the Term Loan Agreement. No consent of any Qualified Counterparty shall be required for any waiver, amendment, supplement or other modification to this Agreement.

8.2 Notices. All notices, requests and demands to or upon the Administrative Agent, the Borrower or any Guarantor hereunder shall be effected in the manner provided for in Section 9.2 of the Term Loan Agreement; provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth on Schedule 1.

8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the Administrative Agent nor any Secured Party shall by any act (except by a written instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Administrative Agent or any Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Administrative Agent or such Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

8.4 Enforcement Expenses; Indemnification. The Borrower and each Guarantor agree to pay, or reimburse each Secured Party and the Administrative Agent for, all its costs and expenses incurred in collecting against the Borrower or such Guarantor under the guarantee contained in Section 2 or otherwise enforcing any rights under this Agreement and the other Loan Documents to which the Borrower or such Guarantor is a party, including, without limitation, the fees and disbursements of outside counsel to each Secured Party and of counsel to the Administrative Agent.

(a) The Borrower and each Guarantor agree to pay, and to save the Administrative Agent and the Secured Parties harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement.

(b) The Borrower and each Guarantor agree to pay, and to save the Administrative Agent and the Secured Parties harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement to the extent the Borrower would be required to do so pursuant to
Section 9.5 of the Term Loan Agreement.

(c) The agreements in this Section shall survive repayment of the Obligations and all other amounts payable under the Term Loan Agreement and the other Loan Documents.

8.5 Successors and Assigns. This Agreement shall be binding upon the successors and assigns of the Borrower and each Guarantor and shall inure to the benefit of the Administrative Agent and the Secured Parties and their successors and assigns; provided that except pursuant to mergers and consolidations permitted under the Term Loan Agreement, neither the Borrower nor any Guarantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent.

8.6 Set-Off. The Borrower and each Guarantor hereby irrevocably authorize the Administrative Agent and each Secured Party at any time and from time to time upon the election of the Required Lenders following the occurrence and during the continuance of an Event of Default, without notice to the Borrower or such Guarantor or any other Guarantor, any such notice being expressly waived by the Borrower and each Guarantor, to set-off and appropriate and apply any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Administrative Agent or such Secured Party to or for the credit or the account of the Borrower or such Guarantor, or any part thereof in such amounts as the Administrative Agent or such Secured Party may elect, against and on account of the obligations and liabilities of the Borrower or such Guarantor to the Administrative Agent or such Secured Party hereunder and claims of every nature and description of the Administrative Agent or such Secured Party against the Borrower or such Guarantor, in any currency, whether arising hereunder, under the Term Loan Agreement, any other Loan Document or otherwise, as the Administrative Agent or such Secured Party may elect, whether or not the Administrative Agent or any Secured Party has made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The Administrative Agent and each Secured Party shall notify the Borrower or such Guarantor promptly of any such set-off and the application made by the Administrative Agent or such Secured Party of the proceeds thereof; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Administrative Agent and each Secured Party under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Administrative Agent or such Secured Party may have.

8.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

8.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

8.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

8.10 Integration. This Agreement and the other Loan Documents represent the agreement of the Borrower, the Guarantors, the Administrative Agent and the Secured Parties

with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Secured Party relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Loan Documents.

8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8.12 Submission To Jurisdiction; Waivers. The Borrower and each Guarantor hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

(b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to the Borrower or such Guarantor at its address referred to in Section 8.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or shall limit the right to sue in any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, punitive or consequential damages.

8.13 Acknowledgements. The Borrower and each Guarantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;

(b) neither the Administrative Agent nor any Secured Party has any fiduciary relationship with or duty to the Borrower or any Guarantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Borrower and the Guarantors, on the one hand, and the Administrative Agent and Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties or among the Borrower, the Guarantors and the Secured Parties.

8.14 Additional Guarantors and/or Grantors. Each Subsidiary of the Borrower (other than an Excluded Foreign Subsidiary) created or acquired after the Closing Date (which, for purposes of this paragraph, shall include any Subsidiary that ceases to be an Excluded Foreign Subsidiary), by Holdings, the Borrower or any of its Subsidiaries, shall become a Guarantor and Grantor under this Agreement, by execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex I hereto.

8.15 Releases. At such time as the Term Loans and the other Obligations (other than Borrower Hedge Agreement Obligations and Guarantor Hedge Agreement Obligations and contingent obligations under general indemnification provisions as to which no claim is pending or reasonably forseeable) shall have been paid in full, the Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Administrative Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request and sole expense of any Grantor following any such termination, the Administrative Agent shall deliver to such Grantor any Collateral held by the Administrative Agent hereunder, and execute and deliver to such Grantor such documents as such Grantor shall reasonably request to evidence such termination.

(a) If any of the Collateral shall be sold, transferred or otherwise disposed of by any Grantor in a transaction permitted by the Term Loan Agreement, then the Administrative Agent, at the request and sole expense of such Grantor, shall execute and deliver to such Grantor all releases or other documents reasonably necessary or desirable for the release of the Liens created hereby on such Collateral. At the request and sole expense of the Borrower, a Subsidiary Guarantor shall be released from its obligations hereunder in the event that all the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of in a transaction permitted by the Term Loan Agreement; provided that the Borrower shall have delivered to the Administrative Agent, at least ten Business Days (or such shorter period agreed to by the Administrative Agent) prior to the date of the proposed release, a written request for release identifying the relevant Subsidiary Guarantor and the terms of the sale or other disposition in reasonable detail, including the price thereof and any expenses in connection therewith, together with a certification by the Borrower stating that such transaction is in compliance with the Term Loan Agreement and the other Loan Documents.

No consent of any Qualified Counterparty shall be required for any release of Collateral or Guarantors pursuant to this Section.

8.16 WAIVER OF JURY TRIAL. THE BORROWER AND EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, EACH AGENT AND EACH SECURED PARTY, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed and delivered as of the date first above written.

WILLIAMS PRODUCTION HOLDINGS LLC

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

WILLIAMS PRODUCTION RMT COMPANY

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

BARRETT RESOURCES INTERNATIONAL
CORPORATION

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

BARGATH INC.

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

BARRETT FUELS CORPORATION

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

RULISON GAS COMPANY, LLC

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

BISON ROYALTY LLC

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

PICEANCE PRODUCTION HOLDINGS, LLC

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

RULISON PRODUCTION COMPANY LLC

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

Annex I to Guarantee and Collateral Agreement

ASSUMPTION AGREEMENT, dated as of ________________, 200__, made by ______________________________, a ______________ corporation (the "Additional Guarantor"), in favor of LEHMAN COMMERCIAL PAPER INC. ("LCPI"), as administrative agent (in such capacity, the "Administrative Agent") for the financial institutions (the "Lenders") party to the Term Loan Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in such Term Loan Agreement.

W I T N E S S E T H :

WHEREAS, Williams Production Holdings LLC ("Holdings"), Williams Production RMT Company (the "Borrower"), the Lenders, Lehman Brothers Inc. and Banc of America Securities LLC, as joint advisors, joint lead arrangers and joint book runners, Citicorp USA, Inc. and JPMorgan Chase Bank, as co-syndication agents, Bank of America, N.A., as documentation agent, and the Administrative Agent, have entered into a Term Loan Agreement, dated as of May 30, 2003 (as amended, supplemented or otherwise modified from time to time, the "Term Loan Agreement");

WHEREAS, in connection with the Term Loan Agreement, Holdings, the Borrower and certain of its Subsidiaries (other than the Additional Guarantor) have entered into a Guarantee and Collateral Agreement, dated as of May 30, 2003 (as amended, supplemented or otherwise modified from time to time, the "Guarantee and Collateral Agreement") in favor of the Administrative Agent for the benefit of the Secured Parties;

WHEREAS, the Term Loan Agreement requires the Additional Guarantor to become a party to the Guarantee and Collateral Agreement; and

WHEREAS, the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee and Collateral Agreement;

NOW, THEREFORE, IT IS AGREED:

1. Guarantee and Collateral Agreement. By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in
Section 8.14 of the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and Collateral Agreement as a Guarantor and a Grantor thereunder with the same force and effect as if originally named therein as a Guarantor and a Grantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor and a Grantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedules _______* to the Guarantee and Collateral Agreement. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in

Section 4 of the Guarantee and Collateral Agreement is true and correct on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date.

2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

[ADDITIONAL GUARANTOR/GRANTOR]

By: ____________________________
Name:
Title:

Annex II to Guarantee and Collateral Agreement

ACKNOWLEDGEMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Guarantee and Collateral Agreement, dated as of May 30, 2003 (the "Agreement"), made by the Borrower and the Guarantors parties thereto for the benefit of LEHMAN COMMERCIAL PAPER INC., as Administrative Agent (in such capacity, the "Administrative Agent"). The undersigned agrees for the benefit of the Administrative Agent and the Lenders as follows:

1. The undersigned will be bound by the terms of the Agreement and will comply with such terms insofar as such terms are applicable to the undersigned.

2. The undersigned will notify the Administrative Agent promptly in writing of the occurrence of any of the events described in Section 5.7(a) of the Agreement.

3. The terms of Sections 5.7, 6.3(c) and 6.7 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it, or prohibited, pursuant to Section 5.7, 6.3(c) or 6.7 of the Agreement.

[NAME OF ISSUER]

By: ________________________________
Name:
Title:

Fax: _______________________________

EXHIBIT 10.3

EXECUTION COPY

U.S. $800,000,000

CREDIT AGREEMENT

Dated as of June 6, 2003

among

THE WILLIAMS COMPANIES, INC.
NORTHWEST PIPELINE CORPORATION
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
as Borrowers

CITIBANK, N.A.

as Administrative Agent and Collateral Agent

BANK OF AMERICA, N.A.

as Syndication Agent

JPMORGAN CHASE BANK

as Documentation Agent

CITIBANK, N.A.
BANK OF AMERICA, N.A.

as Issuing Banks

THE BANKS NAMED HEREIN

as Banks

and

CITIGROUP GLOBAL MARKETS INC.
BANC OF AMERICA SECURITIES LLC

as Joint Lead Arrangers & Joint Book Runners

TABLE OF CONTENTS

                                                                                                          Page
                                                                                                          ----
                                                ARTICLE I
                                    DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1. Certain Defined Terms.....................................................................     2

SECTION 1.2. Computation of Time Periods...............................................................    12

SECTION 1.3. Accounting Terms..........................................................................    12

SECTION 1.4. Miscellaneous.............................................................................    12

                                               ARTICLE II

                AMOUNTS AND TERMS OF THE REVOLVING CREDIT ADVANCES AND LETTERS OF CREDIT

SECTION 2.1. Revolving Credit Advances and Letters of Credit...........................................    13

SECTION 2.2. Issuance of and Drawings and Reimbursement Under Letters of Credit........................    13

SECTION 2.3. Making the Revolving Credit Advances......................................................    17

SECTION 2.4. Voluntary Reduction of the Commitments....................................................    18

SECTION 2.5. Prepayments...............................................................................    19

SECTION 2.6. Increased Costs...........................................................................    19

SECTION 2.7. Payments and Computations.................................................................    20

SECTION 2.8. Taxes.....................................................................................    21

SECTION 2.9. Sharing of Payments, Etc..................................................................    24

SECTION 2.10. Evidence of Debt.........................................................................    24

SECTION 2.11. Fees.....................................................................................    25

SECTION 2.12. Repayment of Revolving Credit Advances...................................................    26

SECTION 2.13. Interest.................................................................................    26

SECTION 2.14. Interest Rate Determination..............................................................    27

SECTION 2.15. Optional Conversion of Revolving Credit Advances.........................................    27

SECTION 2.16. Illegality...............................................................................    28

SECTION 2.17. Additional Interest on Eurodollar Rate Advances..........................................    28

SECTION 2.18. Existing Letters of Credit...............................................................    28

                                               ARTICLE III
                                               CONDITIONS

SECTION 3.1. Conditions Precedent to Effectiveness of Agreement........................................    29

SECTION 3.2. Conditions Precedent to a Revolving Credit Advance and an Issuance of a Letter of Credit..    30

                                               ARTICLE IV
                                     REPRESENTATIONS AND WARRANTIES

SECTION 4.1. Representations and Warranties of the Borrowers...........................................    32

                                                ARTICLE V
                                       COVENANTS OF THE BORROWERS

SECTION 5.1. Affirmative Covenants.....................................................................    34

SECTION 5.2. Negative Covenants........................................................................    36

                                               ARTICLE VI
                                            EVENTS OF DEFAULT

SECTION 6.1. Events of Default.........................................................................    37

                                               ARTICLE VII
                           THE AGENT; THE COLLATERAL AGENT; AND ISSUING BANKS

SECTION 7.1. Agent's and Collateral Agent's Authorization and Action...................................    39

SECTION 7.2. Agent's and Collateral Agent's Reliance, Etc..............................................    39

SECTION 7.3. Issuing Banks' Reliance, Etc..............................................................    40

SECTION 7.4. Rights....................................................................................    40

SECTION 7.5. Indemnification...........................................................................    41

SECTION 7.6. Successor Agent and Collateral Agent......................................................    42

SECTION 7.7. Bank Credit Decision......................................................................    42

SECTION 7.8. Certain Rights of the Collateral Agent....................................................    43

SECTION 7.9. Other Agents..............................................................................    43

                                              ARTICLE VIII
                                              MISCELLANEOUS

SECTION 8.1. Amendments, Etc...........................................................................    43

SECTION 8.2. Notices, Etc..............................................................................    44

SECTION 8.3. No Waiver; Remedies.......................................................................    45

SECTION 8.4. Costs and Expenses........................................................................    46

SECTION 8.5. Binding Effect; Transfers.................................................................    47

SECTION 8.6. Governing Law.............................................................................    50

SECTION 8.7. Interest..................................................................................    51

SECTION 8.8. Execution in Counterparts.................................................................    51

SECTION 8.9. Survival of Agreements, Representations and Warranties, Etc...............................    51

SECTION 8.10. Confidentiality..........................................................................    51

SECTION 8.11. Waiver of Jury Trial.....................................................................    53

SECTION 8.12. Severability.............................................................................    53

SECTION 8.13. Forum Selection and Consent to Jurisdiction..............................................    53

SECTION 8.14. Nature of Obligations....................................................................    53

Schedule I      -     Bank Information
Schedule II     -     Notice Information for the Borrowers
Schedule III    -     Commitments

Exhibit A       -     Opinion of James J. Bender, Esq., General Counsel of TWC
Exhibit B       -     Opinion of White & Case LLP, New York Counsel
Exhibit C       -     Form of Transfer Agreement
Exhibit D-1     -     Notice of Letter of Credit
Exhibit D-2     -     Notice of Revolving Credit Borrowing
Exhibit E       -     Form of Security Agreement
Exhibit F       -     Form of Note

CREDIT AGREEMENT

This Credit Agreement dated as of June 6, 2003 (as may be further amended, modified, supplemented, renewed, extended or restated from time to time, this "Agreement"), is by and among THE WILLIAMS COMPANIES, INC., a Delaware corporation ("TWC"), NORTHWEST PIPELINE CORPORATION, a Delaware corporation ("NWP"), TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware corporation ("TGPL", and together with TWC and NWP, the "Borrowers" and each, a "Borrower"), the banks, financial institutions and other institutional lenders listed on the signature pages hereof as banks (the "Banks"), CITIBANK, N.A. ("Citibank") and BANK OF AMERICA, N.A. ("BofA") (the "Issuing Banks" and each, an "Issuing Bank"), CITIBANK, as agent (together with any successor agent appointment pursuant to Article VII, the "Agent") and collateral agent (together with any successor agent appointment pursuant to Article VII, the "Collateral Agent"), BofA, as syndication agent, JPMORGAN CHASE BANK ("JPMorgan") as documentation agent (the "Documentation Agent"), and CITIGROUP GLOBAL MARKETS INC. ("CGMI") and BANC OF AMERICA SECURITIES LLC ("BAS", together with CGMI, the "Co-Lead Arrangers"), as joint lead arrangers and joint book runners. In consideration of the mutual covenants and agreements contained herein, the Borrowers, the Banks, the Issuing Banks, the Agent, and the Co-Lead Arrangers hereby agree as set forth herein.

PRELIMINARY STATEMENTS

WHEREAS, each of the Borrowers is a borrower under that certain First Amended and Restated Credit Agreement dated as of October 31, 2002 (as amended, restated, supplemented or otherwise modified, the "Multiyear Agreement") with the banks party thereto, JPMorgan and Commerzbank AG, as co-syndication agents, Credit Lyonnais New York Branch, as documentation agent, Citicorp USA, Inc. ("CUSA"), as agent, and CGMI (formerly known as Salmon Smith Barney Inc. ("SSBI")), as arranger;

WHEREAS, TWC is the borrower under that certain Amended and Restated Credit Agreement dated as of October 31, 2002 (as amended, restated, supplemented or otherwise modified, the "LC Agreement"; and together with the Multiyear Agreement, the "Existing Credit Documentation") with the banks party thereto, CUSA, as agent and collateral agent, BofA, as syndication agent, and CGMI (formally known as SSBI), as arranger;

WHEREAS, the Borrowers have requested that the Banks lend to the Borrowers and the Issuing Banks issue Letters of Credit for the account of the Borrowers to (a) refinance in full outstanding indebtedness under the Existing Credit Documentation (it being understood that such letters of credit shall be fully cash-collateralized) and (b) provide for the working capital needs and general corporate purposes of the Borrowers, including, without limitation, acquisition of the Borrowers' equity securities and debt; and

WHEREAS, the Issuing Banks and Banks are willing to lend such amounts and to issue such Letters of Credit on the terms and subject to the conditions hereinafter set forth (including Article III);

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.1.Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

"Agent" means Citibank, in its capacity as administrative agent pursuant to Article VII hereof and any successor Agent pursuant to Section 7.6.

"Agreement" has the meaning specified in the first paragraph of this Agreement.

"Applicable Margin" means, for any Eurodollar Rate Advance, 0.75% per annum.

"Authorized Financial Officer" means the Chief Financial Officer, Chief Accounting Officer, and the Treasurer of any Person.

"Authorized Officer" means the President, Chief Executive Officer, Chief Financial Officer, the General Counsel, any Vice President, the Secretary, the Assistant Secretary, the Treasurer, Assistant Treasurer, or the Controller of a Person or any other officer designated as an "Authorized Officer" by the Board of Directors (or equivalent governing body) of such Person.

"Available Amount" of any Letter of Credit means, at any time, the maximum amount available to be drawn under such Letter of Credit at such time as set forth in Section 2.1(b) (assuming compliance at such time with all conditions to drawing).

"Banks" means the lenders listed on the signature pages hereof and each other Person that becomes a Bank pursuant to Section 8.5(a).

"Base Rate" means a fluctuating interest rate per annum in effect from time to time, which rate per annum shall at all times be equal to the higher of:

(a) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank's base rate; and

(b) 1/2 of 1% per annum above the Federal Funds Rate.

"Base Rate Advance" means a Revolving Credit Advance that bears interest as provided in Section 2.13(a)(i).

"BofA" has the meaning specified in the recitals hereto.

"Borrowers" has the meaning specified in the recitals hereto.

"Business Day" means a day of the year on which banks are not required or authorized to close in New York City.

"Business Entity" means a partnership, limited partnership, limited liability partnership, corporation (including a business trust), limited liability company, unlimited liability company, joint stock company, trust, unincorporated association, joint venture or other entity.

"CGMI" has the meaning specified in the recitals hereto.

"Change of Control Event" means the occurrence of any of the following: (i) any Person (other than a trustee or other fiduciary holding securities under an employee benefit plan of TWC or of any Subsidiary of TWC) or two or more Persons acting in concert (other than any group of employees of TWC or of any of its Subsidiaries) shall have acquired beneficial ownership (within the meaning of Rule l3d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of securities of TWC (or other securities convertible into such securities) representing 50% or more of the combined voting power of all securities of TWC entitled to vote in the election of directors, other than securities having such power only by reason of the happening of a contingency, or (ii) during any period of up to 24 consecutive months, commencing on or after the date of this Agreement, individuals who at the beginning of such period were directors of TWC or who were elected or nominated by individuals who at the beginning of such period were such directors or by individuals elected in accordance with this clause (ii) shall cease for any reason (other than as a result of death, incapacity or normal retirement) to constitute a majority of the board of directors of TWC.

"Citibank" has the meaning specified in the recitals hereto.

"Code" means, as appropriate, the Internal Revenue Code of 1986, as amended, or any successor federal tax code, and any reference to any statutory provision shall be deemed to be a reference to any successor provision or provisions.

"Co-Lead Arrangers" has the meaning specified in the recitals hereto.

"Collateral" has the meaning specified in the Security Agreement.

"Collateral Account" has the meaning specified in the Security Agreement.

"Collateral Agent" means Citibank in its capacity as Collateral Agent pursuant to Article VII and any successor in such capacity pursuant to Section 7.6.

"Collateral Coverage Requirement" means any time that the aggregate mark-to-market value of all Collateral is equal to or greater than 105% of the Total Credit Exposure.

"Commitment" means a Revolving Credit Commitment or a Letter of Credit Commitment.

"Commitment Fee" has the meaning specified in Section 2.11(c).

"Consolidated" refers to the consolidation of the accounts of any Person and its consolidated subsidiaries in accordance with generally accepted accounting principles.

"Consolidated Subsidiaries" of any Person means all other Persons the financial statements of which are consolidated with those of such Person in accordance with generally accepted accounting principles.

"Convert", "Conversion" and "Converted" each refers to a conversion of Revolving Credit Advances of one Type into Revolving Credit Advances of the other Type pursuant to Sections 2.15, 2.16 and 2.17.

"Credit Documents" means this Agreement, the Security Agreement, the Letter of Credit Documents, each Letter of Credit, each Note, each Notice of Letter of Credit, each Notice of Revolving Credit Borrowing, and each certificate pursuant to Sections 3.2(ii), 5.1(b)(ii), and 5.1(b)(iii) at any time executed and/or delivered to the Agent, the Collateral Agent, any Issuing Bank, or any Bank in connection therewith.

"Cross-Acceleration Event" means the occurrence or existence of any event or condition under any agreement or instrument relating to any Debt which is outstanding in a principal amount of at least $250,000,000 in the aggregate (excluding Debt incurred pursuant to any Letter of Credit or Revolving Credit Advance) of any Borrower the result of which is the acceleration of the final stated maturity of such Debt or any such Debt shall not be paid at its final stated maturity (giving effect to any applicable grace periods and any extensions thereof).

"CUSA" has the meaning specified in the recitals hereto.

"Debt" means, in the case of any Person, the principal or equivalent amount (without duplication) of (i) indebtedness of such Person for borrowed money, (ii) obligations of such Person evidenced by bonds, debentures or notes, (iii) obligations of such Person to pay the deferred purchase price of property or services (other than trade payables), (iv) obligations of such Person as lessee under leases that are, in accordance with generally accepted accounting principles, recorded as capital leases, and (v) obligations of such Person under guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) of this definition.

"Default" means any event or condition that, upon the giving of notice or passage of time or both, if required by Section 6.1, would constitute an Event of Default.

"Designating Bank" has the meaning specified in Section 8.5(g).

"Documentation Agent" has the meaning specified in the recitals hereto.

"Dollars" and "$" means lawful money of the United States of America.

"Domestic Lending Office" means, with respect to any Bank, the office of such Bank specified as its "Domestic Lending Office" opposite its name on Schedule I hereto or in the Transfer Agreement pursuant to which it became a Bank, or such other office of such Bank as such Bank may from time to time specify to the Borrowers and the Agent.

"EDGAR" means "Electronic Data Gathering, Analysis and Retrieval" system (or any successor system thereof), a database maintained by the Securities and Exchange Commission containing electronic filings of issuers of certain securities.

"Effective Date" has the meaning specified in Section 3.1.

"Eligible Assignee" means (i) any Bank, (ii) any affiliate of any Bank, and (iii) any other Person not covered by clause (i) or (ii) of this definition that is consented to by the Borrowers, the Agent and the Issuing Banks (which consents shall not be unreasonably withheld); provided that if any Event of Default has occurred and is continuing, no consent of the Borrowers shall be required; provided further that neither the Borrowers nor any affiliate of the Borrowers shall be an Eligible Assignee.

"Equity Interests" means any capital stock, partnership, joint venture, member or limited liability or unlimited liability company interest, beneficial interest in a trust or similar entity or other equity interest or investment of whatever nature.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder from time to time.

"ERISA Affiliate" means any trade or business (whether or not incorporated) which is a member of a group of which the Borrowers are members and which is under common control within the meaning of Section 414 of the Code and the regulations promulgated thereunder.

"Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D of the Federal Reserve Board, as in effect from time to time.

"Eurodollar Lending Office" means, with respect to any Bank, the office of such Bank specified as its "Eurodollar Lending Office" opposite its name on Schedule I hereto or in the Transfer Agreement pursuant to which it became a Bank (or, if no such office is specified, its Domestic Lending Office), or such other office of such Bank as such Bank may from time to time specify to the Borrowers and the Agent.

"Eurodollar Rate" means, for any Eurodollar Rate Advance comprising part of the same Revolving Credit Borrowing for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Dow Jones Markets Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "Eurodollar Rate" shall mean, for any Eurodollar Rate Advance comprising part of the same Revolving Credit Borrowing for

any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided, however, if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).

"Eurodollar Rate Advance" means a Revolving Credit Advance that bears interest as provided in Section 2.13(a)(ii).

"Eurodollar Rate Reserve Percentage" of any Bank for any Interest Period for any Eurodollar Rate Advance means the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable) under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) for such Bank with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period.

"Events of Default" has the meaning specified in Section 6.1.

"Existing Credit Documentation" has the meaning specified in the preliminary statements hereto.

"Federal Funds Rate" means, for any day, a fluctuating interest rate per annum equal for such day to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by it.

"Federal Reserve Board" means the Board of Governors of the Federal Reserve System, or any federal agency or authority of the United States from time to time succeeding to its function.

"Financial Letter of Credit" means any Letter of Credit supporting only indebtedness for borrowed money.

"Fiscal Quarter" means any quarter of a Fiscal Year.

"Fiscal Year" means any period of twelve consecutive calendar months ending on December 31; references to a Fiscal Year with a number corresponding to any calendar

year (e.g., the "2002 Fiscal Year") refer to the Fiscal Year ending on December 31 of such calendar year.

"Fronting Fee" shall have the meaning specified in Section 2.11(b)(i).

"Governmental Authority" means the government of the United States, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other Person exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

"Governmental Requirements" means all judgments, orders, writs, injunctions, decrees, awards, laws, ordinances, statutes, regulations, rules, franchises, permits, certificates, licenses, authorizations and the like and any other requirements of any government or any commission, board, court, agency, instrumentality or political subdivision thereof.

"Indemnified Parties" has the meaning assigned to such term in
Section 8.4(b).

"Interest Period" means, for each Eurodollar Rate Advance comprising part of the same Revolving Credit Borrowing, the period commencing on the date of such Eurodollar Rate Advance or the date of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance and ending on the last day of the period selected by a Borrower pursuant to the provisions below and, thereafter, with respect to Eurodollar Rate Advances, each subsequent period commencing on the last day of the immediately preceding Interest Period and ending on the last day of the period selected by a Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one, two, three or six months, as a Borrower may, upon notice received by the Agent not later than 11:00 A.M. (New York City time) on the third Business Day prior to the first day of such Interest Period, select; provided, however, that:

(i) a Borrower may not select any Interest Period that ends after the Termination Date;

(ii) Interest Periods commencing on the same date for Eurodollar Rate Advances comprising part of the same Revolving Credit Borrowing shall be of the same duration;

(iii) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day; provided, however, that, if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day; and

(iv) whenever the first day of any Interest Period occurs on a day of an initial calendar month for which there is no numerically corresponding day in the calendar month that succeeds such initial calendar month by the number of

months equal to the number of months in such Interest Period, such Interest Period shall end on the last Business Day of such succeeding calendar month.

"Issuing Banks" has the meaning specified in the recitals hereto.

"JPMorgan" has the meaning specified in the recitals hereto.

"Judgment Event" means any judgment or order rendered against any Borrower for the payment of money in excess of $250,000,000 (and not adequately covered by insurance as to which a solvent and unaffiliated insurance company has provided coverage and has acknowledged liability) shall remain undischarged, unvacated, unbonded or unstayed for a period of 60 days.

"LC Agreement" has the meaning specified in the recitals hereto.

"LC Participation Percentage" of any Bank means, at any time, the percentage set opposite such Bank's name on Schedule III or as reflected for such Bank in the relevant Transfer Agreement to which it is a party, as such amount may be terminated, reduced or increased pursuant to Section 8.5(a).

"Lending Office" means, with respect to any Bank, the office of such Bank specified as its "Lending Office" opposite its name on Schedule I hereto or in the relevant Transfer Agreement delivered pursuant to Section 8.5(a), or such other office of such Bank as such Bank may from time to time specify to the Borrowers and the Agent.

"Letter of Credit Commitment" of any Issuing Bank means, at any time, the amount set opposite such Bank's name on Schedule III under the heading "Letter of Credit Commitments" or as reflected for such Bank in the relevant Transfer Agreement to which it is a party, as such amount may be terminated, reduced or increased pursuant to Section 2.4, Section 6.1 or Section 8.5(a).

"Letter of Credit Documents" means, with respect to any Letter of Credit, collectively, any application therefor and any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (i) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (ii) any collateral security for any of such obligations, each as the same may be modified and supplemented and in effect from time to time.

"Letter of Credit Fee" shall have the meaning specified in
Section 2.11(b)(ii).

"Letter of Credit Interest" means, for each Bank, (i) such Bank's participation interest in Letters of Credit (and, in the case of an Issuing Bank, such Issuing Bank's retained interest in Letters of Credit issued by it), and (ii) such Bank's rights and interests in Reimbursement Obligations and fees, interest and other amounts payable in connection with Letters of Credit and Reimbursement Obligations.

"Letter of Credit Liability" means at any time and in respect of any Letter of Credit, the sum (without duplication) of (a) the Available Amount of such Letter of Credit at such time (after giving effect to any step up provision or other mechanism for increase, if any, and assuming that all conditions to drawing have been satisfied) plus (b) the aggregate unpaid amount of all drawings under such Letter of Credit that are unpaid at such time. For purposes of this Agreement, a Bank shall be deemed to hold a Letter of Credit Liability in an amount equal to its LC Participation Percentage in the related Letter of Credit.

"Letters of Credit" has the meaning assigned to such term in
Section 2.1(b).

"Majority Banks" means, at any time, Banks owed or holding more than 50% of the sum of (i) the aggregate unpaid principal amount of Revolving Credit Advances outstanding at such time, or if no such principal amount is then outstanding, the aggregate Revolving Credit Commitments and (ii) the aggregate Available Amount of all Letters of Credit outstanding at such time, or if no such Available Amount of Letters of Credit are then outstanding, then (x) the LC Participation Percentages, or (y) if the Letter of Credit Commitments have terminated and any Letter of Credit or any Letter of Credit Interest is outstanding, then the aggregate unpaid principal amount of the outstanding Letter of Credit Interests; provided that for purposes of this definition no Borrower shall be considered a "Bank".

"Mandatory Prepayment Event" means any of the following:
Change of Control Event; Cross-Acceleration Event; or Judgment Event.

"Multiemployer Plan" means any multiemployer plan, as defined in Section 4001 (a)(3) of ERISA, which is maintained by (or to which there is an obligation to contribute of) the Borrowers or an ERISA Affiliate of the Borrowers.

"Note" means a promissory note of a Borrower payable to the order of any Bank, in substantially the form of Exhibit F hereto (as such note may be amended, endorsed or otherwise modified from time to time), delivered at the request of such Bank pursuant to Section 2.10 or 8.6, together with any other note accepted from time to time in substitution or replacement therefore.

"Notice of Letter of Credit" has the meaning specified in
Section 2.2(a).

"Notice of Revolving Credit Borrowing" has the meaning specified in Section 2.3(a).

"NWP" has the meaning specified in the recitals hereto.

"Obligations" means all Reimbursement Obligations and all other Debt, advances, debts, liabilities, obligations, indemnities, covenants and duties owing by any Borrower to any Bank, the Agent, the Collateral Agent, any Issuing Bank, or any other Person required to be indemnified under any Credit Document, of any kind or nature, present or future, whether or not evidenced by any Note, guaranty or other instrument, arising under or in connection with this Agreement or any other Credit Document or any of the

transactions evidenced by this Agreement or any other Credit Document, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. The term "Obligations" includes all interest, charges, expenses, fees, attorneys' fees and disbursements and any other sum chargeable to any Borrower under this Agreement or any other Credit Document.

"PBGC" means the Pension Benefit Guaranty Corporation.

"Person" means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other Business Entity, or a government or any political subdivision or agency thereof.

"Plan" means an employee pension benefit plan (other than a Multiemployer Plan) as defined in Section 3(2) of ERISA currently maintained by, or in the event such plan has terminated, to which contributions have been made or an obligation to make such contributions has accrued during any of the five plan years preceding the date of the termination of such plan by, the Borrowers or any ERISA Affiliate of the Borrowers for employees of the Borrowers or any such ERISA Affiliate and covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code.

"Public Filings" means the Borrowers' (i) annual report on Form 10-K/A for the year ended December 31, 2002, (ii) quarterly report on Form 10-Q for the quarter ended March 31, 2003, and (iii) each other quarterly and annual and other reports filed with the SEC from time to time.

"Register" has the meaning specified in Section 8.5(c).

"Regulation U" means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

"Reimbursement Obligations" means, at any time, the obligations of any of the Borrowers then outstanding, or that may thereafter arise, in respect of all Letters of Credit then outstanding to reimburse amounts paid by any Issuing Bank in respect of any drawings under a Letter of Credit.

"Revolving Credit Advance" means an advance by a Bank to a Borrower as part of a Revolving Credit Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a "Type" of Revolving Credit Advance).

"Revolving Credit Borrowing" means a borrowing consisting of simultaneous Revolving Credit Advances of the same Type made by each of the Banks, pursuant to Section 2.1(a).

"Revolving Credit Commitment" means, with respect to any Bank at any time, the amount set forth opposite such Banks' name on Schedule III hereto under the caption "Revolving Credit Commitment" or, if such Bank has entered into one or more Transfer

Agreements, set forth for such Bank in the Register maintained by the Agent pursuant to Section 8.5(c) as such Lender's "Revolving Credit Commitment", as such amount may be reduced at or prior to such time pursuant to Section 2.4.

"Security Agreement" means a Security Agreement executed by TWC in substantially the form of Exhibit E.

"SPC" has the meaning specified in Section 8.5(g).

"Subsidiary" of any Person means any corporation, partnership, joint venture or other entity of which more than 50% of the outstanding Equity Interests having ordinary voting power to elect a majority of the board of directors of such corporation, partnership, joint venture or other entity or others performing similar functions (irrespective of whether or not at the time Equity Interests of any other class or classes of such corporation, partnership, joint venture or other entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person.

"Termination Date" means the earlier of (i) June 6, 2005 or
(ii) the date of termination in whole of the Commitments pursuant to
Section 2.4 or 6.1.

"Termination Event" means (i) a "reportable event", as such term is described in Section 4043(c) of ERISA (other than a "reportable event" not subject to the provision for 30-day notice to the PBGC or a "reportable event" as such term is described in Section 4043(c)(3) of ERISA) which might reasonably be expected to result in a termination of, or the appointment of a trustee to administer, a Plan, or which causes TWC, due to actions of the PBGC, to be required to contribute at least $75,000,000 in excess of the contributions which otherwise would have been made to fund a Plan based upon the contributions recommended by such Plan's actuary, or (ii) the withdrawal of a Borrower or any ERISA Affiliate of such Borrower from a Multiple Employer Plan during a plan year in which it was a "substantial employer," as such term is defined in Section 4001(a)(2) of ERISA, or the incurrence of liability by a Borrower or any ERISA Affiliate of such Borrower under Section 4064 of ERISA upon the termination of a Plan or Multiple Employer Plan, or (iii) the distribution of a notice of intent to terminate a Plan pursuant to Section 4041(a)(2) of ERISA or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, or (iv) the institution of proceedings to terminate a Plan by the PBGC under
Section 4042 of ERISA, or (v) any other event or condition which might reasonably be expected to result in the termination of, or the appointment of, a trustee to administer, any Plan under Section 4042 of ERISA.

"TGPL" has the meaning specified in the recitals hereto.

"Total Credit Exposure" means the sum of the Total L/C Exposure plus the Total Loan Exposure plus the amount of any other Obligations that are not paid when due and remain outstanding.

"Total L/C Exposure" means at any time, the aggregate amount of all Letter of Credit Liabilities with respect to all issued Letters of Credit.

"Total Loan Exposure" means at any time, the aggregate principal amount of all outstanding Revolving Credit Advances.

"Transfer Agreement" means an agreement executed pursuant to
Section 8.5 by an assignor Bank and assignee Bank substantially in the form of Exhibit C, which agreement shall be executed by the Borrowers and the Agent to evidence the consent of each if such consent is required pursuant to the definition herein of "Eligible Assignee" or the terms of Section 8.5.

"TWC" has the meaning specified in the recitals hereto.

"Unused Revolving Credit Commitment" with respect to each Bank at any time, (a) such Bank's Revolving Credit Commitment at such time minus (b) the sum of (i) the aggregate principal amount of all Revolving Credit Advances made by such Bank and outstanding at such time and (ii) such Bank's Letter of Credit Liability.

"Wholly-Owned Subsidiary" of any Person means any Subsidiary of such Person all of the Equity Interests in which are owned by such Person and/or one or more other Wholly-Owned Subsidiaries of such Person.

"Withdrawal Liability" shall have the meaning given such term under Part I of Subtitle E of Title IV of ERISA.

SECTION 1.2. Computation of Time Periods. In this Agreement in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding".

SECTION 1.3. Accounting Terms. All accounting terms not specifically defined shall be construed in accordance with general accounting principles, and each reference herein to "generally accepted accounting principles" shall mean U.S. generally accepted accounting principles in effect, consistently applied.

SECTION 1.4. Miscellaneous. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article, Section, Schedule and Exhibit references are to Articles and Sections of and Schedules and Exhibits to this Agreement, unless otherwise specified. The term "including" shall mean "including, without limitation". References to any document, instrument or agreement (a) shall include all exhibits, schedules and other attachments thereto, (b) shall include all documents, instruments or agreements issued or executed in replacement thereof and (c) shall mean such document, instrument or agreement, or replacement or predecessor thereto, as amended, modified and supplemented from time to time and in effect at any given time so long as such amended, modified or supplemented document, instrument or agreement does not violate the terms of this Agreement.

ARTICLE II

AMOUNTS AND TERMS OF THE REVOLVING CREDIT
ADVANCES AND LETTERS OF CREDIT

SECTION 2.1. Revolving Credit Advances and Letters of Credit.

(a) Revolving Credit Advances. Each Bank severally agrees, on the terms and conditions hereinafter set forth, to make Revolving Credit Advances to each Borrower from time to time on any Business Day during the period from the Effective Date until the Termination Date in an aggregate amount to all Borrowers not to exceed at any time such Bank's Unused Revolving Credit Commitment at such time. Each Revolving Credit Borrowing shall be in an aggregate amount of not less than $10,000,000 or an integral multiple of $1,000,000 in excess thereof and shall consist of Revolving Credit Advances made on the same day by the Banks ratably according to their respective Revolving Credit Commitments. Within the limits of this Section 2.1(a), a Borrower may borrow under this Section 2.1(a), prepay pursuant to Section 2.5 and reborrow under this Section 2.1(a).

(b) Letters of Credit. Each Issuing Bank agrees, on the terms and conditions hereinafter set forth, to issue standby or trade letters of credit (collectively, the "Letters of Credit", and each a "Letter of Credit") for the account of any Borrower (such issuance, and any funding of a draw thereunder, to be made by the Issuing Banks in reliance on the agreements of the other Banks pursuant to Section 2.2) from time to time on any Business Day during the period from the Effective Date until 30 days prior to the Termination Date in an aggregate Available Amount (i) for all Letters of Credit issued by the Issuing Banks not to exceed at any time the lesser of (A) the aggregate of all Letter of Credit Commitments at such time and (B) the Letter of Credit Commitment of such Issuing Bank at such time and (ii) for each such Letter of Credit not to exceed an amount equal to the Unused Revolving Credit Commitments of the Banks at such time; provided that at no time shall all Letter of Credit Liabilities exceed the aggregate amount of the Letter of Credit Commitments. No Letter of Credit shall have an expiration date (including all rights of a Borrower or the beneficiary to require renewals) later then 10 Business Days prior to the Termination Date. Within the limits referred to above, a Borrower may request the issuance of Letters of Credit under this Section 2.1(b), repay any Letter of Credit Liability resulting from drawings thereunder pursuant to
Section 2.2(a) and request the issuance of additional Letters of Credit under this Section 2.1(b).

SECTION 2.2. Issuance of and Drawings and Reimbursement Under Letters of Credit.

(a) Notice of Issuance. A Borrower shall give the Agent and the Issuing Bank from which it is requesting a Letter of Credit at least three Business Days' (or such shorter period as agreed to by the Agent and such Issuing Bank) prior notice, in the form of Exhibit D-1 (a "Notice of Letter of Credit"), specifying the Business Day such Letter of Credit is to be issued and the account party or parties therefor and describing in reasonable detail the proposed terms of such Letter of Credit (including the beneficiary thereof) and the nature of the transactions or obligations proposed to be supported thereby.

(b) Participations in Letters of Credit. On each day during the period commencing with the issuance by any Issuing Bank of any Letter of Credit and until such Letter of Credit shall have expired or been terminated, the Letter of Credit Commitment of each Issuing Bank shall be deemed to be utilized for all purposes of this Agreement in an amount equal to the Available Amount of such Letter of Credit. Each Bank agrees that, upon the issuance of any Letter of Credit hereunder by any Issuing Bank, it shall automatically acquire a participation in such Issuing Bank's liability under such Letter of Credit in an amount equal to such Bank's LC Participation Percentage of such liability, and each Bank thereby shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and shall be unconditionally obligated to such Issuing Bank to the extent provided in this Section 2.2(b).

(c) Reimbursement Obligations; Notice of Drawings. Upon receipt from the beneficiary of any Letter of Credit of any demand for payment under such Letter of Credit, the Issuing Bank that issued such Letter of Credit shall promptly notify the applicable Borrower (through the Agent) of the amount to be paid by such Issuing Bank as a result of such demand and the date on which payment is to be made by such Issuing Bank to such beneficiary in respect of such demand, which shall be (unless same day payment is required by the terms of such Letter of Credit pursuant to a request of such Borrower) at least one Business Day after the date on which the Agent shall deliver such notice to the applicable Borrower pursuant to this sentence. Notwithstanding the identity of the account party of any Letter of Credit, the Borrowers hereby unconditionally agree to pay and reimburse the Agent for the account of the Issuing Bank that issued a Letter of Credit for the amount of each demand for payment under such Letter of Credit that is in substantial compliance with the provisions of such Letter of Credit at or prior to the date on which payment is to be made by such Issuing Bank to the beneficiary thereunder, without presentment, demand, protest or other formalities of any kind, together with interest thereon at a rate per annum equal to the Base Rate for the period from the date of such demand until the date of such reimbursement; provided that, to the extent that any Reimbursement Obligation has not been reimbursed by any Borrower to the applicable Issuing Bank hereunder, the Collateral Agent shall withdraw funds from the Collateral Account upon the request (such request to be delivered to the Collateral Agent by TWC on the same day of the receipt of notice from the Agent to the Borrowers pursuant to this Section 2.2(c)) of TWC (in accordance with the Security Agreement), in an amount of such outstanding Reimbursement Obligation and apply such funds for the satisfaction and reimbursement of such Issuing Bank. The Borrowers' obligations to reimburse each Issuing Bank as provided herein shall be absolute, unconditional and irrevocable under all circumstances whatsoever, including the following circumstances: (i) any lack of validity of this Agreement, the other Credit Documents or the other documents to be delivered under this Agreement; (ii) the existence of any claim, set-off, defense or other right that a Borrower may have at any time against the Agent, any Bank, any Issuing Bank or any other Person, whether in connection with the transactions contemplated by this Agreement or any unrelated transaction; (iii) any action or inaction taken or suffered by any Issuing Bank under a Letter of Credit if taken in good faith and in conformity with applicable law; (iv) the payment by any Issuing Bank under a Letter of Credit against presentation of a demand, statement or other document which in the sole discretion of such Issuing Bank substantially complies with the terms of such Letter of Credit, including any demand, statement or other document which is forged, fraudulent, invalid or inaccurate in any respect; (v) any exchange, release or non-perfection of any collateral for, or any release or amendment or waiver of or consent to departure from any guarantee of, all or any of the Obligations of the applicable Borrower in respect of any Letter of

Credit; and (vi) any determination of invalidity or unenforceability with respect to any Letter of Credit after payment by an Issuing Bank thereunder.

(d) Payments by Banks to Issuing Banks. To the extent that a Borrower fails to make any payment to an Issuing Bank that such Borrower is required to make pursuant to Section 2.2(c), each Bank (other than such Issuing Bank) shall pay to the Agent, for the account of such Issuing Bank in Dollars and in immediately available funds, the amount of such Bank's LC Participation Percentage of any payment under a Letter of Credit upon notice by such Issuing Bank (through the Agent) to such Bank requesting such payment and specifying such amount. Each such Bank's obligation to make such payment to the Agent for the account of such Issuing Bank under this Section 2.2(d), and such Issuing Bank's right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever other than the gross negligence or willful misconduct of such Issuing Bank in making payment under such Letter of Credit, including the failure of any other Bank to make its payment under this Section 2.2(d), the financial condition of a Borrower (or any account party in respect of such Letter of Credit), the existence of any Event of Default or the termination of the Letter of Credit Commitments. If any Bank shall default in its obligation to make any such payment to the Agent for the account of an Issuing Bank, for so long as such default shall continue the Agent may, at the request of such Issuing Bank withhold from any payments received by the Agent under this Agreement for the account of such Bank the amount so in default and, to the extent so withheld and pay the same to such Issuing Bank for application to such defaulted obligation.

(e) Participations in Reimbursement Obligations. Upon the making of each payment by a Bank to an Issuing Bank pursuant to Section 2.2(d) in respect of any Letter of Credit, such Bank shall, automatically and without any further action on the part of the Agent, any Issuing Bank or such Bank, acquire (i) a funded participation in an amount equal to such payment in the Reimbursement Obligation owing to such Issuing Bank by the applicable Borrower hereunder and under the Letter of Credit Documents relating to such Letter of Credit and (ii) a participation in a percentage equal to such Bank's LC Participation Percentage in any interest or other amounts payable by the Borrowers hereunder and under such Letter of Credit Documents in respect of such Reimbursement Obligation (other than the Fronting Fee contemplated by Section 2.11(b)(i)). Upon receipt by any Issuing Bank from or for the account of a Borrower of any payment in respect of any Reimbursement Obligation or any such interest or other amount (including by way of setoff or application of proceeds of any collateral security or the withdrawal and application of funds from the Collateral Account as required by Section 2.2(c)), such Issuing Bank shall promptly pay to the Agent, for the account of each Bank entitled thereto, such Bank's Participation Percentage of such payment, each such payment by such Issuing Bank to be made in the same currency and funds in which received by any Issuing Bank. In the event any payment received by such Issuing Bank and so paid to the Banks hereunder is rescinded or must otherwise be returned by any Issuing Bank, each Bank shall, upon the request of such Issuing Bank (through the Agent), repay to such Issuing Bank (through the Agent) the portion of such payment paid to such Bank.

(f) Information Provided by Issuing Banks to Banks. Promptly after the issuance of or amendment to any Letter of Credit, the Issuing Bank that issued such Letter of Credit will notify the Agent and the applicable Borrower in writing of such issuance or amendment and such notice shall be accompanied by a copy of such issued or amended Letter of

Credit. Upon receipt of such notice, the Agent shall notify each Bank of such issuance or amendment and, if requested by a Bank, the Agent shall provide such Bank with copies of such issued or amended Letter of Credit and any related Letter of Credit Documents thereto.

(g) Conditions Precedent to Issuance, Extension and Modification. The issuance by any Issuing Bank of a Letter of Credit, or any extension of any outstanding Letter of Credit, shall be subject to satisfaction of each of the conditions precedent set forth in Article III, and shall further be subject to the conditions precedent that (i) such Letter of Credit shall be in such form and contain such terms as shall be reasonably satisfactory to such Issuing Bank consistent with its then current practices and procedures of general applicability with respect to letters of credit of the same type and
(ii) the applicable Borrower shall have executed and delivered such agreements and other instruments relating to such Letter of Credit as such Issuing Bank shall have reasonably requested consistent with its then current practices and procedures of general applicability with respect to letters of credit of the same type; provided that in the event of any conflict between any such application, agreement or other instrument and the provisions of this Agreement, the provisions of this Agreement shall control. The issuance by any Issuing Bank of any amendment, modification or supplement to any Letter of Credit hereunder which increases the stated amount thereof or extends the termination date thereof shall be subject to the same conditions applicable under this Section 2.2 to the issuance of new Letters of Credit, and no such modification or supplement shall be issued hereunder unless the Letter of Credit affected thereby would have complied with such conditions had it originally been issued hereunder in such modified or supplemented form.

(h) Interest Payable to Issuing Banks by Banks. To the extent that any Bank shall fail to pay any amount required to be paid pursuant to Sections 2.2(d) or (e) on the due date therefor, such Bank shall pay interest to the Issuing Bank owed such amount (through the Agent) on such amount from and including such due date to but excluding the date such payment is made at a rate per annum equal to the Federal Funds Rate.

(i) Indemnification of the Banks, Issuing Banks and Agent. The Borrowers hereby indemnify and hold harmless each Bank, each Issuing Bank and the Agent from and against any and all claims, damages, losses, liabilities, costs and expenses that such Bank, such Issuing Bank or the Agent may incur (or that may be claimed against such Bank, such Issuing Bank or the Agent by any Person whatsoever) by reason of or in connection with the execution and delivery or transfer of or payment or refusal to pay by each Issuing Bank under any Letter of Credit (EXPRESSLY INCLUDING ANY SUCH CLAIM, DAMAGE, LOSS,
LIABILITY OR EXPENSE ATTRIBUTABLE TO THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH BANK, SUCH ISSUING BANK OR THE AGENT, AS THE CASE MAY BE, BUT EXCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH BANK, SUCH ISSUING BANK AND THE AGENT). IT IS THE INTENT OF THE PARTIES HERETO THAT EACH BANK, EACH ISSUING BANK OR THE AGENT, AS THE CASE MAY BE, SHALL, TO THE EXTENT PROVIDED IN THIS SECTION 2.2(i), BE INDEMNIFIED FOR ITS OWN ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE; provided that the Borrowers shall not be required to indemnify any Bank, any Issuing Bank or the Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (A) in the case of

each Issuing Bank, the willful misconduct or gross negligence of such Issuing Bank in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (B) in the case of any Bank, such Bank's failure to pay its Letter of Credit Liabilities pursuant to Sections 2.2(d), (e) and (h).

SECTION 2.3. Making the Revolving Credit Advances.

(a) Each Revolving Credit Borrowing shall be made on notice, given not later than 11:00 a.m. (New York City time) on the third Business Day prior to the date of the proposed Revolving Credit Borrowing in the case of a Revolving Credit Borrowing consisting of Eurodollar Rate Advances, or 10:00 a.m. (New York City Time) the Business Day of the proposed Revolving Credit Borrowing in the case of a Revolving Credit Borrowing consisting of Base Rate Advances, by the Borrower to the Agent, which shall give to each Bank prompt notice thereof by telecopier or telex. Each such notice of a Revolving Credit Borrowing (a "Notice of Revolving Credit Borrowing") shall be by telephone, confirmed immediately in writing, or telecopier or telex in substantially the form of Exhibit D-2 hereto, specifying therein the requested
(i) date of such Revolving Credit Borrowing, (ii) Type of Revolving Credit Advance, (iii) aggregate amount of such Revolving Credit Borrowing, and (iv) in the case of a Revolving Credit Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for each such Revolving Credit Advance. Each Bank shall, before 12:00 p.m. (New York City time) on the date of such Revolving Credit Borrowing, make available for the account of its Applicable Lending Office to the Agent at the Agent's Account, in same day funds, such Bank's ratable portion of such Revolving Credit Borrowing. After the Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Article III, the Agent will make such funds available to the Borrower at the Agent's address referred to in Section 8.2.

(b) Anything in Section 2.3(a) to the contrary notwithstanding, a Borrower may not select Eurodollar Rate Advances for any Revolving Credit Borrowing if the aggregate obligation of the Banks to make Eurodollar Rate Advances shall then be suspended pursuant to Sections 2.3(e), 2.14 or 2.16.

(c) No Borrower may select Eurodollar Rate Advances for any Revolving Credit Borrowing if the aggregate amount of such Revolving Credit Borrowings is less than $10,000,000.

(d) Each Notice of Revolving Credit Borrowing shall be irrevocable and binding on such Borrower. In the case of any Revolving Credit Borrowing that the related Notice of Revolving Credit Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrowers shall indemnify each Bank against any loss, cost or expense incurred by such Bank as a result of any failure by the Borrowers to fulfill on or before the date specified in such Notice of Revolving Credit Borrowing for such Revolving Credit Borrowing the applicable conditions set forth in Article III, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Bank to fund the Revolving Credit Advance to be made by such Bank as part of such Revolving Credit Borrowing when such Revolving Credit Advance, as a result of such failure, is not made on such date.

(e) If the Agent is unable to determine the Eurodollar Rate for Eurodollar Rate Advances, the obligation of the Banks to make, or to Convert Revolving Credit Advances into, Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrowers and the Banks that the circumstances causing such suspension no longer exist, and, except as provided in Section 2.3(f), each Revolving Credit Advance comprising any requested Revolving Credit Borrowing shall be a Base Rate Advance.

(f) If a Borrower has requested a proposed Revolving Credit Borrowing consisting of Eurodollar Rate Advances and as a result of circumstances referred to in Section 2.3(e) or Section 2.14(b) such Revolving Credit Borrowing would not consist of Eurodollar Rate Advances, such Borrower may, by notice given not later than 3:00 p.m. (New York City time) at least one Business Day prior to the date such proposed Revolving Credit Borrowing would otherwise be made, cancel such Revolving Credit Borrowing, in which case such Revolving Credit Borrowing shall be cancelled and no Revolving Credit Advances shall be made as a result of such requested Revolving Credit Borrowing, but such Borrower shall indemnify the Banks in connection with such cancellation as contemplated by Section 2.3(d).

(g) Unless the Agent shall have received notice from a Bank prior to the date of any Revolving Credit Borrowing that such Bank will not make available to the Agent such Bank's ratable portion of such Revolving Credit Borrowing, the Agent may assume that such Bank has made such portion available to the Agent on the date of such Revolving Credit Borrowing in accordance with
Section 2.3(a) and the Agent may, in reliance upon such assumption, make available to a Borrower on such date a corresponding amount. If and to the extent that such Bank shall not have so made such ratable portion available to the Agent, such Bank and Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to such Borrower until the date such amount is repaid to the Agent, at (i) in the case of such Borrower, the interest rate applicable at the time to Revolving Credit Advances comprising such Revolving Credit Borrowing and (ii) in the case of such Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Bank's Revolving Credit Advance as part of such Revolving Credit Borrowing for purposes of this Agreement and such Borrower shall be relieved of its obligations to repay such amount under this Section 2.3(g).

(h) The failure of any Bank to make the Revolving Credit Advance to be made by it as part of any Revolving Credit Borrowing shall not relieve any other Bank of its obligation, if any, hereunder to make its Revolving Credit Advance on the date of such Revolving Credit Borrowing, but no Bank shall be responsible for the failure of any other Bank to make the Revolving Credit Advance to be made by such other Bank on the date of any Revolving Credit Borrowing.

SECTION 2.4. Voluntary Reduction of the Commitments. Each Borrower shall have the right, upon at least three Business Days notice to the Agent, to terminate in whole or reduce ratably in part (i) the Unused Revolving Credit Commitments and (ii) the unused portions of the Letter of Credit Commitments; provided that each partial reduction shall be in the aggregate amount of at least $10,000,000 or an integral multiple of $1,000,000 in excess thereof and shall be made ratably among the Banks or Issuing Banks, as the case may be, in accordance

with their respective Commitments hereunder; and provided further that the aggregate amount of the Letter of Credit Commitments shall not be reduced to an amount which is less than the aggregate amount of all Letter of Credit Liabilities.

SECTION 2.5. Prepayments.

(a) Optional. Each Borrower may, upon notice to the Agent
(i) before 10:00 a.m. (New York City time) for Base Rate Advances on the date of prepayment and (ii) upon at least three Business Days' notice to the Agent for Eurodollar Rate Advances stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given by such Borrower shall, prepay the outstanding principal amount of the Revolving Credit Advances comprising part of the same Revolving Credit Borrowing in whole or ratably in part, together with accrued interest and fees to the date of such prepayment on the principal amount prepaid and amounts, if any, required to be paid pursuant
Section 8.4(c) as a result of such prepayment; provided, however, that each prepayment pursuant to this Section 2.5(a) shall be in an aggregate principal amount not less than $5,000,000.

(b) Mandatory. Upon the date of receipt of written notice by the Borrowers from the Agent or the Majority Banks of the occurrence of any Mandatory Prepayment Event (such written notice to be delivered by the Agent or the Majority Banks to the Borrowers not later than ten Business Days from the date of an occurrence of any Mandatory Prepayment Event), all then outstanding Revolving Credit Advances, including any amounts required to be paid pursuant to
Section 8.4(c) as a result of such prepayment, shall be repaid by the Borrowers (which the Borrowers may elect to repay using amounts on deposit in the Collateral Account (in accordance with the Security Agreement) if and to the extent funds are available in such Collateral Account) by no later than 10 Business Days from the date of receipt of such written notice of such Mandatory Prepayment Event.

SECTION 2.6. Increased Costs.

(a) If any Bank or Issuing Bank determines that compliance with any law or regulation or any guideline or request from any central bank or other governmental or monetary authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Bank or Issuing Bank, as the case may be, or any corporation controlling such Bank or Issuing Bank, as the case may be, and that the amount of such capital is increased by or based upon the existence of such Bank's or such Issuing Bank's, as the case may be, commitment to lend hereunder, issue Letters of Credit or purchase participations in Letters of Credit and other commitments of this type, then, upon demand by such Bank or Issuing Bank, as the case may be (with a copy of such demand and related certificate (which certificate shall specify in reasonable detail the nature of such change in capital requirements, the proposed (or actual) compliance change to be adopted by the applicable Bank or Issuing Bank and the calculations upon which any compensation is claimed hereunder) to the Agent), the Borrowers shall immediately pay to the Agent within five Business Days of receipt of such demand for the account of such Bank or Issuing Bank, as the case may be, from time to time as specified by such Bank or Issuing Bank, as the case may be, additional amounts sufficient to compensate such Bank or Issuing Bank, as the case may be, or such corporation in the light of such circumstances, to the extent that such Bank or Issuing Bank, as the case may be,

reasonably determines such increase in capital to be allocable to the existence of such Bank's or such Issuing Bank's, as the case may be, commitment to lend, issue Letters of Credit or purchase participations in Letters of Credit hereunder. A certificate as to the amount of such additional amounts, submitted to the Borrowers and the Agent by such Bank or Issuing Bank, as the case may be, shall be prima facie evidence of the amount of such additional amounts. No Bank or Issuing Bank shall have any right to recover any additional amounts under this Section 2.6(a) for any period more than 90 days prior to the date such Bank or Issuing Bank, as the case may be, notifies the Borrowers of any such compliance.

(b) In the event that any Bank (i) makes a demand for payment under Section 2.2, 2.8, 2.17 or this Section 2.6, or (ii) does not agree to provide its consent or agree to any amendment or waiver pursuant to Section 8.1 where such consent or agreement to provide an amendment or waiver is required of all the Banks hereto, TWC may within ninety (90) days of such demand or non-consent, if no Default or Event of Default then exists, replace such Bank with another commercial bank in accordance with all of the provisions of the second and third sentences of Section 8.5(a), and clauses (b) and (d) of Section
8.5 (including execution of an appropriate Transfer Agreement); provided that
(w) all obligations of such Bank to lend hereunder or purchase participations in Letters of Credit shall be terminated and the Letter of Credit Interests held by such Bank and Notes payable to such Bank and all other obligations owed to such Bank hereunder shall be purchased in full without recourse at par plus accrued interest and fees at or prior to such replacement, (x) such replacement bank shall be an Eligible Assignee, (y) such replacement bank shall, from and after such replacement, be deemed for all purposes to be a "Bank" hereunder with a Revolving Credit Commitment and Letter of Credit Liabilities in the amount of the Revolving Credit Commitment and Letter of Credit Liabilities of such Bank to such Borrower immediately prior to such replacement (plus, if such replacement bank is already a Bank prior to such replacement the respective Revolving Credit Commitment and Letter of Credit Liabilities of such Bank to such Borrower prior to such replacement), as such amount may be changed from time to time pursuant hereto, and shall have all of the rights, duties and obligations hereunder of the Bank being replaced, including obligations under Section 2.1(b), and (z) such other actions shall be taken by the Borrowers, such Bank and such replacement bank as may be appropriate to effect the replacement of such Bank with such replacement bank on terms such that such replacement bank has all of the rights, duties and obligations hereunder as such Bank (including specification of the information contemplated by Schedule I as to such replacement bank).

(c) Before making any demand under this Section 2.6, each Bank agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a different Lending Office if the making of such a designation would avoid the need for, or reduce the amount of, such increased cost and would not, in the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank.

SECTION 2.7. Payments and Computations.

(a) Each Borrower shall make each payment hereunder to be made by it not later than 11:00 a.m. (New York City time) on the day when due in Dollars to the Agent at its New York address referred to in Section 8.2, in each case in same day funds, without deduction, counterclaim or offset of any kind. The Agent will promptly thereafter cause to be distributed

like funds relating to the payment of principal, interest or any fees to the Banks for the account of their respective Lending Offices, and like funds relating to the payment of any other amount payable to any Bank to such Bank for the account of its Lending Office, in each case to be applied in accordance with the terms of this Agreement. The Agent will promptly pay to the Collateral Agent like funds relating to the payment of any amount payable to the Collateral Agent. In no event shall any Bank be entitled to share any fee paid to the Agent pursuant to Section 2.11(a), any other fee paid to the Agent, as such, or any Fronting Fee paid to an Issuing Bank pursuant to Section 2.11(b)(i).

(b) (i) All computations of interest based on clause (a) of the definition herein of "Base Rate" and all computations of all Commitment Fees, Letter of Credit Fees, Fronting Fees and all other fees shall be made by the Agent on the basis of a year of 365 or 366 days, as the case may be, and
(ii) all computations of interest based on the Eurodollar Rate, the Federal Funds Rate and interest pursuant to Section 2.17 shall be made by the Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest, letter of credit fees or other fees are payable. Each determination by the Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(c) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, commitment fee, letter of credit fee or any other fee hereunder, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Revolving Credit Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.

(d) Unless the Agent shall have received notice from a Borrower prior to the date on which any payment is due by such Borrower to any Bank hereunder that such Borrower will not make such payment in full, the Agent may assume that such Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank hereunder. If and to the extent such Borrower shall not have so made such payment in full to the Agent, each Bank shall repay to the Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Agent, at the Federal Funds Rate.

SECTION 2.8. Taxes.

(a) Any and all payments by any Borrower hereunder shall be made, in accordance with Section 2.7, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings with respect thereto, and all liabilities with respect thereto, excluding in the case of each Bank and the Agent, (i) taxes imposed on its net income or net profits, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Bank or the Agent (as the case may be) is organized or any political subdivision thereof and (ii) taxes imposed as a result of a present or former connection

between such Bank or the Agent, as the case may be, and the jurisdiction imposing such tax or any political subdivision thereof and, in the case of each Bank, taxes imposed on its net income or net profits, and franchise taxes imposed on it, by the jurisdiction of such Bank's Lending Office or any political subdivision thereof, other than any such connection arising solely from the Bank or Agent having executed or delivered, or performed its obligations or received a payment under, or taken any other action related to this Agreement (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as "Taxes"). If any Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to any Bank or the Agent, (i) the sum payable shall be increased as may be necessary so that after making all required deductions for Taxes (including deductions for Taxes applicable to additional sums payable under this Section 2.8) such Bank or the Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions for Taxes been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

(b) In addition, each Borrower agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies which arise from any payment made by such Borrower hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (hereinafter referred to as "Other Taxes").

(c) Each Borrower will indemnify each Bank, each Issuing Bank and the Agent for the full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.8) owed and paid by such Bank, such Issuing Bank or the Agent, as the case may be, and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. This indemnification shall be made within 30 days from the date such Bank, such Issuing Bank or the Agent, as the case may be, makes written demand therefor; provided that such Borrower shall have no liability pursuant to this clause (c) of this Section 2.8 to indemnify a Bank, an Issuing Bank or the Agent for Taxes or Other Taxes which were paid by such Bank, such Issuing Bank or the Agent, as the case may be, more than ninety days prior to such written demand for indemnification.

(d) In the event that a Bank, an Issuing Bank or the Agent receives a written communication from any governmental authority with respect to an assessment or proposed assessment of any Taxes, such Bank, such Issuing Bank or Agent, as the case may be, shall promptly notify TWC in writing and provide TWC with a copy of such communication. The Agent's, an Issuing Bank's or a Bank's failure to provide a copy of such communication to TWC shall not relieve TWC of any of its obligations hereunder.

(e) Promptly following payment of Taxes by or at the direction of any Borrower, such Borrower will furnish to the Agent, at its address referred to in Section 8.2, the original or a certified copy of a receipt evidencing payment thereof (or, if no such receipt is reasonably available, other evidence of payment reasonably acceptable to the Agent). Should any Bank, any Issuing Bank or the Agent ever receive any refund, credit or deduction from any taxing authority to which such Bank, such Issuing Bank or the Agent, as the case may be, would not be entitled but for the payment by such Borrower of Taxes as required by this Section 2.8 (it

being understood that the decision as to whether or not to claim, and if claimed, as to the amount of any such refund, credit or deduction shall be made by such Bank, such Issuing Bank or the Agent, as the case may be, in its reasonable judgment), such Bank, such Issuing Bank or the Agent, as the case may be, thereupon shall repay to such Borrower an amount with respect to such refund, credit or deduction equal to any net reduction in taxes actually obtained by such Bank, such Issuing Bank or the Agent, as the case may be, and determined by such Bank, such Issuing Bank or the Agent, as the case may be, to be attributable to such refund, credit or deduction.

(f) Each Bank organized under the laws of a jurisdiction outside the United States shall on or prior to the date of its execution and delivery of this Agreement in the case of each Bank which is a party to this Agreement on the date this Agreement becomes effective and on the date the Transfer Agreement pursuant to which it becomes a Bank is first effective in the case of each other Bank, and from time to time thereafter as necessary or appropriate (but only so long thereafter as such Bank remains lawfully able to do so), provide each of the Agent and each Borrower with two original Internal Revenue Service Forms W-8BEN or W-8ECI (or, in the case of a Bank that has provided a certificate to the Agent that it is not (i) a "bank" as defined in
Section 881(c)(3)(A) of the Code, (ii) a ten-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of such Borrower or (iii) a controlled foreign corporation related to such Borrower (within the meaning of
Section 864(d)(4) of the Code), Internal Revenue Service Form W-8BEN), or any successor or other form prescribed by the Internal Revenue Service, certifying that such Bank is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement or any other Credit Document or, in the case of a Bank that has certified that it is not a "bank" as described above, certifying that such Bank is a foreign corporation. If the forms provided by a Bank at the time such Bank first becomes a party to this Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Bank provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such forms.

(g) For any period with respect to which a Bank has failed to provide any Borrower with the appropriate form, certificate or other document described in subsection (f) of this Section 2.8 (other than if such failure is due to a change in the applicable law, or in the interpretation or application thereof, occurring after the date on which a form, certificate or other document originally was required to be provided) such Bank shall not be entitled to indemnification under subsection (a) or (c) of this Section 2.8 with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should a Bank become subject to Taxes because of its failure to deliver a form, certificate or other document required hereunder, the Borrowers shall take such steps as such Bank shall reasonably request (at such Bank's expense) to assist such Bank in recovering such Taxes.

(h) Any Bank claiming any additional amounts payable pursuant to this Section 2.8 agrees to use reasonable efforts to change the jurisdiction of its Lending Office if the making of such a change would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the reasonable judgment of such Bank, be otherwise materially disadvantageous to such Bank.

(i) If a Borrower determines in good faith that a reasonable basis exists for contesting a Tax, the relevant Bank, or the Agent, as applicable, shall provide reasonable cooperation to such Borrower in challenging such Tax at such Borrower's expense and if requested by such Borrower in writing; provided, however, that no Bank shall be required to take any action hereunder which, in the reasonable discretion of such Bank, would cause such Bank or its applicable lending office to suffer a legal, regulatory or material economic disadvantage.

(j) Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in this Section 2.8 shall survive the payment in full of principal and interest hereunder and the Termination Date.

(k) Notwithstanding any provision of this Agreement or the Notes to the contrary, this Section 2.8 shall be the sole provision governing indemnities and claims for taxes under this Agreement.

SECTION 2.9. Sharing of Payments, Etc. If any Bank shall obtain any payment (whether voluntary or involuntary, or through the exercise of any right of set-off or otherwise) on account of the Revolving Credit Advances made by it or its Letter of Credit Interest (other than pursuant to Section 2.6, 2.8, 2.17, 8.4(b) or 8.4(c)) in excess of its ratable share of payments on account of all Revolving Credit Advances and Letter of Credit Interests obtained by all the Banks, such Bank shall forthwith purchase from the other Banks such participations in the Revolving Credit Advances and Letter of Credit Interests of such other Banks as shall be necessary to cause such purchasing Bank to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Bank, such purchase from each Bank shall be rescinded and such Bank shall repay to the purchasing Bank the purchase price to the extent of such Bank's ratable share (according to the proportion of (i) the amount of the participation purchased from such Bank as a result of such excess payment to (ii) the total amount of such excess payment) of such recovery together with an amount equal to such Bank's ratable share (according to the proportion of (i) the amount of such Bank's required repayment to (ii) the total amount so recovered from the purchasing Bank) of any interest or other amount paid or payable by the purchasing Bank in respect of the total amount so recovered. Each Borrower agrees that any Bank so purchasing a participation from another Bank pursuant to this Section 2.9 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Bank were the direct creditor of such Borrower in the amount of such participation; provided, that in no event shall the Borrowers be liable for duplicative payments under this Section 2.9 in respect to any Obligation or other liability under the Credit Documents.

SECTION 2.10. Evidence of Debt. Each Bank and Issuing Bank shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Bank or Issuing Bank resulting from each Revolving Credit Advance or Letter of Credit Interest owing to such Bank or Issuing Bank, as the case may be, from time to time, including the amounts of principal and interest payable and paid to such Bank or Issuing Bank from time to time hereunder. Each Borrower agrees that upon notice by any Bank to such Borrower (with a copy of such notice to the Agent) to the effect that a promissory note or other evidence of indebtedness is required or appropriate in order for such Bank to evidence (whether

for purposes of pledge, enforcement or otherwise) such Revolving Credit Advance owing to, or to be made by, such Bank, such Borrower shall promptly execute and deliver to such Bank, with a copy to the Agent, a Note in substantially the form of Exhibit F hereto payable to the order of such Bank. All references to Notes in the Credit Documents shall mean Notes, if any, to the extent issued hereunder.

(a) The Register maintained by the Agent pursuant to
Section 8.5(c) shall set forth (i) the date and amount of each Letter of Credit and Revolving Credit Borrowing made hereunder, the Type of Revolving Credit Advances comprising such Revolving Credit Borrowing and, if appropriate, the Interest Period applicable thereto, (ii) the terms of each Transfer Agreement delivered to and accepted by it, (iii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Bank hereunder, and (iv) the amount of any sum received by the Agent from any Borrower hereunder and each Bank's share thereof.

(b) Entries made in good faith by the Agent in the Register pursuant to subsection (b) above, and by each Bank or Issuing Bank in its account or accounts pursuant to subsection (a) above, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from any Borrower to, in the case of the Register, the Agent and, in the case of such account or accounts, such Bank, Issuing Bank or the Agent, under this Agreement, absent manifest error; provided, however, that the failure of the Agent or such Bank or Issuing Bank to make an entry, or any finding that an entry is incorrect, in the Register or such account or accounts shall not limit or otherwise affect the obligations of the Borrowers under this Agreement.

SECTION 2.11. Fees.

(a) Agent's and Collateral Agent's Fees. TWC agrees to pay to the Agent and the Collateral Agent, for their respective sole account, such fees as may be separately agreed to in writing by TWC and the Agent and the Collateral Agent.

(b) Letter of Credit Fees.

(i) Fronting Fee. The Borrowers agree to pay to the Agent for the account of each Issuing Bank a fronting fee (a "Fronting Fee") based on the Available Amount of each Letter of Credit (for the stated duration thereof, and giving effect to any step up provision or other mechanism for increase that (x) occurs automatically and is not subject to the occurrence or satisfaction or any condition or contingency or
(y) that is unilaterally exercisable by such Borrower) issued by such Issuing Banks in an amount equal to 0.125% per annum. All Fronting Fees payable pursuant to this Section 2.11(b)(i) shall be payable in arrears on the last Business Day of each Fiscal Quarter and on the Termination Date. In addition, the Borrowers shall pay directly to each Issuing Bank for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such Issuing Bank relating to Letters of Credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(ii) Participating Banks. The Borrowers agree to pay to the Agent for the account of each Bank a letter of credit fee (a "Letter of Credit Fee") based on such Bank's LC Participation Percentage of the average daily aggregate Available Amount of all Letters of Credit outstanding from time to time at a rate of 0.75% per annum (for the stated duration thereof, and giving effect to any step up provision or other mechanism for increase that (x) occurs automatically and is not subject to the occurrence or satisfaction or any condition or contingency or (y) is unilaterally exercisable by the Borrowers). All amounts payable pursuant to this Section 2.11(b)(ii) shall be paid in arrears on the last Business Day of each Fiscal Quarter and on the Termination Date.

(c) Commitment Fees. The Borrowers agree to pay to the Agent for the account of each Bank a commitment fee (a "Commitment Fee"), in an amount equal to 0.10% per annum on such Bank's Unused Revolving Credit Commitment. All amounts payable pursuant to this Section 2.11(c) shall be paid in arrears on the last Business Day of each Fiscal Quarter and on the Termination Date.

SECTION 2.12. Repayment of Revolving Credit Advances. Each Borrower shall repay to the Agent for the ratable account of the Banks on the Termination Date, or such earlier date as the Notes may become due and payable pursuant to Article VI, the aggregate principal amount of the Revolving Credit Advances then outstanding.

SECTION 2.13. Interest.

(a) Scheduled Interest. Each Borrower shall pay interest on the unpaid principal amount of each Revolving Credit Advance owing to each Bank from the date of such Revolving Credit Advance until such principal amount shall be paid in full, at the following rates per annum:

(i) Base Rate Advances. During such periods as such Revolving Credit Advance is a Base Rate Advance, a rate per annum equal at all times the Base Rate in effect from time to time, payable in arrears quarterly on the last Business Day of each Fiscal Quarter during such periods and on the date such Base Rate Advance shall be Converted or paid in full.

(ii) Eurodollar Rate Advances. During such periods as such Revolving Credit Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each Interest Period for such Revolving Credit Advance to the sum of (x) the Eurodollar Rate for such Interest Period for such Revolving Credit Advance plus (y) the Applicable Margin in effect from time to time, payable in arrears on the last day of such Interest Period and, if such Interest Period has a duration of more than three months, on each day that occurs during such Interest Period every three months from the first day of such Interest Period and on the date such Eurodollar Rate Advance shall be Converted or paid in full.

(b) Default Interest. Upon the occurrence and during the continuance of an Event of Default under Section 6.1(a), the Borrowers shall pay interest on (i) the unpaid principal amount of each (x) Revolving Credit Advance owing to each Bank, payable in arrears in the

amounts and on the dates referred to in Section 2.13(a) or (y) Reimbursement Obligation owing to each Bank, payable in arrears in the amounts and from the date referred to in Section 2.2(c), plus 2% per annum above the rate per annum required to be paid on such Revolving Credit Advance pursuant to Section 2.13(a) or such rate per annum required to be paid on such Reimbursement Obligation pursuant to Section 2.2(c) and (ii) to the fullest extent permitted by law, the amount of any interest, Fronting Fee, Commitment Fee, Letter of Credit Fee or any other fee or other amount payable hereunder that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on Base Rate Advances pursuant to Section 2.13(a)(i).

SECTION 2.14. Interest Rate Determination.

(a) The Agent shall give prompt notice to the Borrowers and the Banks of the applicable interest rate determined by the Agent for purposes of Section 2.13(a)(i) or 2.13(a)(ii).

(b) If, with respect to any Eurodollar Rate Revolving Credit Advances, the Majority Banks notify the Agent that the Eurodollar Rate for any Interest Period for such Revolving Credit Advances will not adequately reflect the cost to such Majority Banks of making, funding or maintaining their respective Eurodollar Rate Advances for such Interest Period, the Agent shall forthwith so notify the Borrowers and the Banks, whereupon (i) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance, and (ii) the obligation of the Banks to make, or to Convert Revolving Credit Advances into, Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrowers and the Banks that the circumstances causing such suspension no longer exist.

(c) If a Borrower shall fail to select the duration of any Interest Period for any Eurodollar Rate Advances in accordance with the provisions contained in the definition of "Interest Period" in Section 1.01, the Agent will forthwith so notify such Borrower and the Banks and such Revolving Credit Advances will automatically, on the last day of the then existing Interest Period therefor, Convert into Base Rate Advances.

(d) On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances comprising any Revolving Credit Borrowing shall be reduced, by payment or prepayment or otherwise, to less than $10,000,000, such Revolving Credit Advances shall automatically Convert into Base Rate Advances and the applicable Borrower shall pay any amounts required to be paid pursuant Section 8.4(c) as a result of such Conversion.

(e) Upon the occurrence and during the continuance of any Event of Default under Section 6.1(a), (i) each Eurodollar Rate Advance will automatically, on the last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the obligation of the Banks to make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended.

SECTION 2.15. Optional Conversion of Revolving Credit Advances. Any Borrower may on any Business Day, upon notice given to the Agent not later than 11:00 a.m.

(New York City time) on the third Business Day prior to the date of the proposed Conversion and subject to the provisions of Sections 2.14 and 2.16, Convert all Revolving Credit Advances of one Type comprising the same Revolving Credit Borrowing into Revolving Credit Advances of the other Type; provided, however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made only on the last day of an Interest Period for such Eurodollar Rate Advances and any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in an amount not less than $10,000,000. Each such notice of a Conversion shall, within the restrictions specified above, specify (a) the date of such Conversion, (b) the Revolving Credit Advances to be Converted and (c) if such Conversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for each such Advance. Each notice of Conversion shall be irrevocable and binding on such Borrower.

SECTION 2.16. Illegality. Notwithstanding any other provision of this Agreement, if any Bank shall notify the Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or any central bank or other governmental authority having relevant jurisdiction asserts that it is unlawful, for any Bank or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, (a) each Eurodollar Rate Advance will automatically, upon such demand, Convert into a Base Rate Advance and (b) the obligation of the Banks to make Eurodollar Rate Advances or to Convert Revolving Credit Advances into Eurodollar Rate Advances shall be suspended until the Agent shall notify the Borrowers and the Banks that the circumstances causing such suspension no longer exist.

SECTION 2.17. Additional Interest on Eurodollar Rate Advances. Each Borrower shall pay to each Bank, so long as such Bank shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Advance of such Bank to such Borrower, from the date of such Revolving Credit Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (a) the Eurodollar Rate for the Interest Period for such Revolving Credit Advance from (b) the rate obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Bank for such Interest Period, payable on each date on which interest is payable on such Revolving Credit Advance. Such additional interest shall be determined by such Bank and notified to such Borrower through the Agent. A certificate as to the amount of such additional interest submitted to such Borrower and the Agent by such Bank shall be conclusive and binding for all purposes, absent manifest error. No Bank shall have the right to recover any additional interest pursuant to this Section 2.17 for any period more than 90 days prior to the date such Bank notifies the Borrowers that additional interest may be charged pursuant to this Section 2.17.

SECTION 2.18. Existing Letters of Credit. Effective as of the Effective Date, all "Letters of Credit" issued and outstanding under the LC Agreement for the account of TWC shall be deemed to be Letters of Credit hereunder.

ARTICLE III

CONDITIONS

SECTION 3.1. Conditions Precedent to Effectiveness of Agreement. Article II hereof shall become effective on and as of the first date (the "Effective Date") on which the Agent shall have received counterparts of this Agreement duly executed by the Borrowers and all of the Banks and the following additional conditions precedent have been satisfied or the following additional documents have been received (except as provided otherwise in Section 3.1(i) below, all in form and substance satisfactory to the Agent):

(a) Except as otherwise disclosed publicly (including disclosure in Public Filings prior to the date hereof) or to the Co-Lead Arrangers and the Banks prior to the date hereof, there shall not have occurred a material adverse change in the business, financial condition, operations or properties of the Borrowers and their Subsidiaries, taken as a whole, since December 31, 2002.

(b) The Agent shall have received (in addition to a fully executed counterpart of this Agreement) the Notes, to the extent requested by a Bank and an executed copy of each other Credit Document.

(c) The Agent shall have received certified copies of the resolutions of the Board of Directors, or the Executive Committee thereof, of each Borrower authorizing the execution of this Agreement, the Notes and each Notice of Letter of Credit and Notice of Revolving Credit Borrowing, and any other Credit Documents to which such Borrower is a party, and all other documents, in each case evidencing any necessary company action and governmental and other third party approvals and consents, if any, with respect to each such Credit Document and the transactions thereunder and hereunder.

(d) The Agent shall have received a certificate of the Secretary or an Assistant Secretary of each Borrower certifying the names and true signatures of the officers of such Borrower authorized to sign each Credit Document to which it is or is to be a party and the other documents to be delivered hereunder and thereunder.

(e) The Agent shall have received a copy of a certificate of the Secretary of State of the jurisdiction of incorporation of each Borrower, dated reasonably near the Effective Date, certifying (i) as to a true and correct copy of the charter of such Borrower, and each amendment thereto on file in such Secretary's office and (ii) that (x) such amendments are the only amendments to such Borrower's charter or other organizational documents on file in such Secretary's office, (y) such Borrower has paid all franchise taxes to the date of such certificate and (z) such Borrower is duly incorporated and in good standing or presently subsisting under the laws of the State of the jurisdiction of its incorporation.

(f) The Agent shall have received opinions of each of (i) James J. Bender, Esq., General Counsel of TWC, substantially in the forms of Exhibit A hereto and (ii) White & Case LLP, New York counsel to the Borrowers, substantially in the form of

Exhibit B, and, in each case, as to such other matters as any Bank through the Agent may reasonably request.

(g) The Agent shall have received a certificate of each Borrower, signed on behalf of such Borrower by an Authorized Officer thereof, dated as of the Effective Date (the statements made in which certificate shall be true on and as of the Effective Date), certifying as to (i) the absence of any amendments to the charter of such Borrower since the date of the Secretary of State's certificate referred to in clause (e) above, (ii) a true and correct copy of the bylaws of such Borrower as in effect on the date on which the resolutions referred to in clause (c) were adopted and on the Effective Date, (iii) the due incorporation and good standing or valid existence of such Borrower as a corporation organized under the laws of the jurisdiction of its incorporation or organization, (iv) the truth, in all material respects, of the representations and warranties contained in this Agreement and the Credit Documents as though made on and as of the Effective Date other than any such representations or warranties that, by their terms, refer to a specific date other than the Effective Date, in which case as of such specific date and (v) the absence of any event occurring and continuing, or resulting from the consummation of the transactions hereunder or pursuant to the Credit Documents, that constitutes an Event of Default (other than any Event of Default which may arise as a result of a draw or probability of a draw under a Letter of Credit).

(h) TWC shall have paid in full all accrued fees and expenses of the Agent, the Co-Lead Arrangers and the Banks (including the accrued reasonable fees and expenses of counsel to the Agent and the Co-Lead Arrangers for which an invoice has been received by the Borrowers).

(i) Evidence that the Existing Credit Documentation shall have been terminated including (unless TWC otherwise agrees) release of substantially all liens thereunder and TWC shall have paid or agreed to pay all fees and expenses reasonably incurred pursuant therewith.

SECTION 3.2. Conditions Precedent to a Revolving Credit Advance and an Issuance of a Letter of Credit. The obligation of each Bank to make a Revolving Credit Advance on the occasion of any Revolving Credit Borrowing and each Issuing Bank to issue or renew a Letter of Credit shall be subject to the further conditions precedent that (i) the Agent shall have received a Notice of Revolving Credit Borrowing in the form of Exhibit D-2 hereto or a Notice of Letter of Credit in the form of Exhibit D-1 hereto, as the case may be, (ii) in the case of each Revolving Credit Advance and issuance or renewal of a Financial Letter of Credit only, the Agent shall have received a certificate of an Authorized Officer of TWC certifying that the delivery and deposit of Collateral to the Collateral Account in connection with such Revolving Credit Borrowing or issuance or renewal of a Financial Letter of Credit does not give rise to default or an event of default pursuant to the terms and conditions of any material indenture, agreement or other instrument of the Borrowers which restricts the amount of Collateral which the Borrowers are permitted to provide hereunder in such detail as the Agent may reasonably require and (iii) on the date of such Revolving Credit Borrowing or issuance of such Letter of Credit, the following statements shall be true (and each of the giving of the applicable Notice of Borrowing or Notice of Letter of Credit and the acceptance by such Borrower of the proceeds of

such Revolving Credit Borrowing or issuance of such Letter of Credit shall constitute a representation and warranty by such Borrower that on the date of such Revolving Credit Borrowing or such Letter of Credit is issued such statements are true):

(a) there has been no Change of Control Event;

(b) each of the representations and warranties contained in Section 4.1(a) through (d), (h) and (l) are correct in all material respects on and as of the date of such Revolving Credit Borrowing or issuance or renewal of such Letter of Credit, before and after giving effect to such Revolving Credit Borrowing or issuance or renewal of such Letter of Credit, as though made on and as of such date (unless such representation and warranty speaks solely as of a particular date or a particular period, in which case, as of such date or for such period);

(c) solely in connection with any Revolving Credit Borrowing or issuance or renewal of a Financial Letter of Credit, there has been no, nor will there be, any Cross-Acceleration Event or Judgment Event before or after giving effect to such Revolving Credit Borrowing or issuance or renewal of such Financial Letter of Credit;

(d) no event has occurred and is continuing, or would result from such Revolving Credit Borrowing or issuance or renewal of such Letter of Credit, which constitutes a Default or Event of Default;

(e) after giving effect to such Revolving Credit Borrowing or issuance of such Letter of Credit and Letters of Credit which have been requested by such Borrower on or prior to such date but which have not been made or issued prior to such date, the sum of the aggregate amount of all Revolving Credit Advances and Letter of Credit Liabilities will not exceed the aggregate of the Commitments of the Banks; and

(f) the aggregate mark-to-market value of all Collateral in the Collateral Account for which the Collateral Agent has a first-priority perfected security interest shall be equal to or greater than the Collateral Coverage Requirement before and after giving effect to such Revolving Credit Borrowing or issuance or renewal of such Letter of Credit.

provided that, notwithstanding anything in this Section 3.2 to the contrary, with respect to any Letters of Credit which shall automatically renew by their own terms unless a notice of non-renewal is given by the applicable Issuing Bank, such Issuing Bank may give such notice of non-renewal (after notice to such Borrower and in no event earlier than the date 10 days prior to the latest date on which it is entitled to do so) if applicable conditions precedent pursuant to this Section 3.2 are not satisfied at the date of issuance of the notice of non-renewal.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

SECTION 4.1. Representations and Warranties of the Borrowers. The Borrowers represent and warrant as follows:

(a) Each Borrower is duly organized, validly existing and in good standing under the laws of the State of Delaware and has all corporate powers and all governmental licenses, authorizations, certificates, consents and approvals required to carry on its business as now conducted in all material respects.

(b) After giving effect to this Agreement and assuming the consummation of the transactions contemplated hereby, the execution, delivery and performance by each of the Borrowers of the Credit Documents to which it is a party and the consummation of the transactions contemplated thereby are within such Borrower's corporate power, have been duly authorized by all necessary corporate action, and do not contravene (i) such Borrower's charter or by-laws, or (ii) law or any restriction under any material agreement binding on or affecting any Borrower (other than any default which may arise as a result of a draw or the probability of a draw under a Letter of Credit).

(c) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required for the due execution, delivery and performance by any Borrower of any Credit Document to which any of them is a party, or the consummation of the transactions contemplated thereby.

(d) Each Credit Document to which any Borrower is a party has been duly executed and delivered by such Person and is the legal, valid and binding obligation of such Person enforceable against such Person in accordance with its terms, except as such enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally and by general principles of equity.

(e) The Consolidated balance sheets of TWC and its Subsidiaries as at December 31, 2002, and the related Consolidated statements of income and cash flows of TWC and its Subsidiaries for the fiscal year then ended, copies of which have been furnished to each Bank, and the Consolidated balance sheet of TWC and its Subsidiaries as at March 31, 2003, and the related Consolidated statements of income and cash flows of TWC and its Subsidiaries for the three months then ended, duly certified by an authorized financial officer of TWC, copies of which have been furnished to each Bank, fairly present in all material respects (in the case of such balance sheets as at March 31, 2003, and such statements of income and cash flows for the three months then ended, subject to normal recurring and other adjustments) the Consolidated financial condition of TWC and its Subsidiaries as at such dates and the Consolidated results of operations of TWC and its Subsidiaries for the year and three-month period, respectively, ended on such dates, all in accordance with generally accepted accounting principles consistently applied. Except as has been disclosed to each Bank prior to the date of this Agreement,

from December 31, 2002 to the date of this Agreement, there has been no material adverse change in the Consolidated financial condition or Consolidated results of operations of TWC and its Consolidated Subsidiaries.

(i) The Consolidated balance sheet of NWP and its Subsidiaries as at December 31, 2002, and the related Consolidated statement of income and cash flows of NWP and its Subsidiaries for the fiscal year then ended, copies of which have been furnished to each Bank, and the Consolidated balance sheet of NWP and its Subsidiaries as at March 31, 2003, and the related Consolidated statement of income and cash flows of NWP and its Subsidiaries for the three months then ended, duly certified by an authorized financial officer of NWP, copies of which have been furnished to each Bank, fairly present in all material respects, subject, in the case of such balance sheet as at March 31, 2003, and such statements of income and cash flows for the three months then ended, to normal recurring and other adjustments, the Consolidated financial condition of NWP and its Subsidiaries as at such dates and the Consolidated results of operations of NWP and its Subsidiaries for the year and three-month period, respectively, ended on such dates, all in accordance with generally accepted accounting principles consistently applied.

(ii) The Consolidated balance sheet of TGPL and its Subsidiaries as at December 31, 2002, and the related Consolidated statement of income and cash flows of TGPL and its Subsidiaries for the fiscal year then ended, copies of which have been furnished to each Bank, and the Consolidated balance sheet of TGPL and its Subsidiaries as at March 31, 2003, and the related Consolidated statement of income and cash flows of TGPL and its Subsidiaries for the three months then ended, duly certified by an authorized financial officer of TGPL, copies of which have been furnished to each Bank, fairly present in all material respects, subject, in the case of such balance sheet as at March 31, 2003, and such statements of income and cash flows for the three months then ended, to year-end audit adjustments, the Consolidated financial condition of TGPL and its Subsidiaries as at such dates and the Consolidated results of operations of TGPL and its Subsidiaries for the year and three-month period, respectively, ended on such dates, all in accordance with generally accepted accounting principles consistently applied.

(f) Except as set forth in the Public Filings, there is no pending or, to the knowledge of each Borrower, threatened action or proceeding affecting any Borrower or any of their Subsidiaries or against any of its or their respective properties or revenues before any Governmental Authority or arbitrator (other than such threatened actions or proceedings which are being contested in good faith and by appropriate proceedings and with respect to which liabilities in conformity with generally accepted accounting principles, if required by such principles, have been established by the applicable Borrower or such Subsidiary, as the case may be) which could reasonably be expected to materially and adversely affect the value of the Collateral or on the ability of the Banks to exercise their rights and remedies in respect of the Collateral.

(g) No Letter of Credit or Revolving Credit Advance has been or will be used for any purpose or in any manner contrary to the provisions of Section 5.2(b).

(h) No Borrower is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Federal Reserve Board), and no proceeds of any issuance of a Letter of Credit or Revolving Credit Advance will be used to purchase or carry any such margin stock (other than purchases of common stock expressly permitted by Section 5.2(b)) or to extend credit to others for the purpose of purchasing or carrying any such margin stock.

(i) No Borrower is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

(j) No Termination Event has occurred or is reasonably expected to occur with respect to any Plan that could reasonably be expected to have a material adverse effect on the value of the Collateral, the perfection or priority of the liens of the Collateral Agent (for the benefit of the Secured Parties) on any material portion of such Collateral, or the ability of the Banks to exercise their rights and remedies in respect of the Collateral. No Borrower has nor has any ERISA Affiliate of any Borrower received any notification that any Multiemployer Plan is in reorganization or has been terminated, within the meaning of Title IV of ERISA, and no Borrower is aware of any reason to expect that any Multiemployer Plan is to be in reorganization or to be terminated within the meaning of Title IV of ERISA that would have any material adverse effect on the value of the Collateral or the ability of the Banks to exercise their rights and remedies in respect of the Collateral.

(k) No Borrower is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company," or a "public utility" within the meaning of the Public Utility Holding Company Act of 1935, as amended.

(l) After taking all actions required to be made by TWC which are necessary to perfect the security interest in the Collateral created under the Security Agreement, the Security Agreement will create in favor of the Collateral Agent for the benefit of the Secured Parties (as defined in the Security Agreement) a valid, and together with any applicable actions, perfected first priority security interest in the Collateral, securing payment of the Secured Obligations (as defined in the Security Agreement). TWC is the legal and beneficial owner of the Collateral free and clear of any lien other than those in favor of the Collateral Agent for the benefit of the Secured Parties.

ARTICLE V

COVENANTS OF THE BORROWERS

SECTION 5.1. Affirmative Covenants. So long as any Revolving Credit Advance shall remain unpaid, any Letter of Credit or Reimbursement Obligation shall remain outstanding, any Letter of Credit Liability shall exist, any Issuing Bank shall have any Letter of Credit Commitment or any Bank shall have any Commitment hereunder, each Borrower will, unless the Majority Banks shall otherwise consent in writing:

(a) Compliance with Laws, Etc. Comply in all material respects with all applicable laws, rules, regulations and orders (other than such non-compliance matters which are being contested in good faith and by proper proceedings and with respect to which reserves in conformity with generally accepted accounting principles, if required by such principles, have been established by the applicable Borrower books of such Borrower) and where such failure to comply could not reasonably be expected to have a material adverse effect on the value of the Collateral, the perfection or priority of the liens of the Collateral Agent (for the benefit of the Secured Parties) on any material portion of such Collateral, or on the ability of the Banks to exercise their rights and remedies in respect of the Collateral.

(b) Reporting Requirements. Furnish to each of the Banks:

(i) as soon as possible and in any event within five Business Days after the occurrence of each Default, Event of Default or Mandatory Prepayment Event, continuing on the date of such statement, a statement of an Authorized Financial Officer of such Borrower setting forth the details of such Default or Event of Default and the actions, if any, which such Borrower has taken and proposes to take with respect thereto;

(ii) as soon as available and in any event not later than 60 days after the end of each of the first three quarters of each Fiscal Year of such Borrower, (1) the unaudited Consolidated balance sheet of such Borrower and its Consolidated Subsidiaries as of the end of such quarter and the unaudited Consolidated statements of income and cash flows of such Borrower and its Consolidated Subsidiaries for the period commencing at the end of the previous year and ending with the end of such quarter, all in reasonable detail and duly certified (subject to normal recurring and other adjustments and the lack of footnotes) by an Authorized Financial Officer of such Borrower as having been prepared in accordance with generally accepted accounting principles; provided that, if any financial statement referred to in this clause (ii) of Section 5.1(b) is readily available on-line through EDGAR as of the date on which such financial statement is required to be delivered hereunder, such Borrower shall not be obligated to furnish copies of such financial statement; and (2) a certificate of an Authorized Financial Officer of such Borrower stating that he or she has no knowledge that a Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and the action, if any, which such Borrower proposes to take with respect thereto;

(iii) as soon as available and in any event not later than (1) 105 days after the end of each Fiscal Year of such Borrower, a copy of the annual audited report for such year for such Borrower and its Consolidated Subsidiaries, including therein the Consolidated balance sheet of such Borrower and its Consolidated Subsidiaries as of the end of such fiscal year and Consolidated statements of income and cash flows of such Borrower and its Consolidated Subsidiaries for such fiscal year, in each case prepared in accordance with

generally accepted accounting principles and reported on by Ernst & Young, LLP or other independent certified public accountants of recognized standing acceptable to the Majority Banks; provided that if any financial statement referred to in this clause (iii) of Section 5.1(b) is readily available on-line through EDGAR as of the date on which such financial statement is required to be delivered hereunder, the Borrowers shall not be obligated to furnish copies of such financial statement; and (2) 120 days after the end of each Fiscal Year of such Borrower, a certificate of an Authorized Financial Officer of such Borrower stating that he or she has no knowledge that a Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and the action, if any, which such Borrower proposes to take with respect thereto.

(iv) promptly after the sending or filing thereof, copies of all proxy material, reports and other information which any Borrower sends to any of its security holders, and copies of all final reports and final registration statements which any Borrower files with the Securities and Exchange Commission or any national securities exchange; provided that if such proxy materials and reports, registration statements and other information are readily available on-line through EDGAR, such Borrower shall not be obligated to furnish copies thereof.

(c) Preservation of Corporate Existence, Etc. Preserve and maintain its existence, legal structure, legal name, and rights (charter and statutory), in the jurisdiction of its incorporation or formation, and qualify and remain qualified as a foreign corporation and maintain and preserve its franchise and privileges in each jurisdiction in which such qualification, franchise or privilege is necessary or desirable in view of its business and operations in the reasonable judgment of the applicable Borrower, except any Borrowers may consummate any merger, consolidation or sale, lease or transfer all or substantially of its assets as permitted pursuant to Section 5.2(a).

(d) Security Interest in Collateral. Cause, and take all action reasonably requested by the Collateral Agent to maintain, a first priority perfected security interest to exist at all times in the Collateral held on deposit in the Collateral Account in favor of the Collateral Agent for the benefit of itself and the Secured Parties (as defined in the Security Agreement) pursuant to the Security Agreement.

SECTION 5.2. Negative Covenants. So long as any Revolving Credit Advance shall remain unpaid, any Letter of Credit or Reimbursement Obligation shall remain outstanding, any Letter of Credit Liability shall exist, any Issuing Bank shall have any Letter of Credit Commitment or any Bank shall have any Commitment hereunder, each Borrower will not, without the written consent of the Majority Banks:

(a) Mergers, Etc. Merge or consolidate with or into any other Person, or sell, lease or otherwise transfer all or substantially all of its assets, except that any Borrower may merge into, consolidate with or into or sell, lease or otherwise transfer all or substantially all of its assets to any successor or purchaser Business Entity so long as such successor or purchaser Business Entity shall be organized in the United States of

America and shall have expressly assumed this Agreement and the obligations of such Borrower hereunder and under the other Credit Documents.

(b) Use of Proceeds. Use any Letter of Credit or proceeds of any Revolving Credit Advance for any purpose other than general corporate purposes relating to the business of a Borrower (including without limitation, working capital, capital expenditures, and the acquisition, purchase or redemption of any Equity Interests or of any Debt of any Borrower or its Subsidiary), or use any Letter of Credit or proceeds of any Revolving Credit Advance in any manner which violates or results in a violation of law.

ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.1. Events of Default. If any of the following events ("Events of Default") shall occur and be continuing:

(a) Any Borrower (i) shall fail to pay any Reimbursement Obligation when the same becomes due and payable, (ii) shall fail to pay any principal of any Revolving Credit Advance or any Note executed by it when the same becomes due and payable, (iii) shall fail to pay any interest on any Reimbursement Obligation, Revolving Credit Advance or Note within five Business Days after the same becomes due and payable or (iv) shall fail to pay any fee or other amount to be paid by it hereunder or under any Credit Document to which it is a party within ten days after the same becomes due and payable; or

(b) Any certification, representation or warranty made by any Borrower herein or in any other Credit Document or by any Borrower (or any officer of any Borrower) in writing under or in connection with this Agreement or in any other Credit Document or any instrument executed in connection herewith (including representations and warranties deemed made pursuant to Section 3.2) shall prove to have been materially incorrect in any material respect when made or deemed made; or

(c) Any Borrower shall fail to perform or observe (i) any term, covenant or agreement contained in Section 5.1(b)(i) on its part to be performed or observed and such failure shall continue for five Business Days after the earlier of the date notice thereof shall have been given to such Borrower by the Agent or any Bank or the date any Authorized Financial Officer of such Borrower shall have actual knowledge of such failure, or (ii) any term, covenant or agreement contained in Section 5.1(b) (other than a term, covenant or agreement contained in Section 5.1(b)(i)) on its part to be performed or observed and such failure shall continue for ten Business Days after the earlier of the date notice thereof shall have been given to such Borrower by the Agent or any Bank or the date any Authorized Financial Officer of such Borrower shall have actual knowledge of such failure, or (iii) any term, covenant or agreement contained in this Agreement (other than a term, covenant or agreement contained in Section 5.1(b), Section 5.1(d) or Section 5.2) or any other Credit Document on its part to be performed or observed and such

failure shall continue for thirty days after the earlier of the date notice thereof shall have been given to such Borrower by the Agent or any Bank or the date any Authorized Financial Officer of such Borrower shall have actual knowledge of such failure, or (iv) any term, covenant or agreement contained in Section 5.1(d) on its part to be performed or observed and such failure shall continue for one Business Day after the earlier of the date notice thereof shall have been given to such Borrower by the Agent or any Bank or the date any Authorized Financial Officer of such Borrower shall have actual knowledge of such failure, or (v) any term, covenant or agreement contained in Section 5.2; or

(d) Any Borrower (i) shall generally not pay its debts as such debts become due, or (ii) shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors or any proceeding shall be instituted by or against the Borrower seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it), shall remain undismissed or unstayed for a period of 60 days; or any Borrower shall take any action to authorize any of the actions set forth above in this subsection (d); or

(e) Any material provision in the Security Agreement for any reason is not a legal, valid, binding and enforceable obligation of any Borrower party thereto or any Borrower party thereto shall so state in writing; or

(f) the aggregate mark-to-market value of the Collateral shall be less than the Collateral Coverage Requirement for a period of five consecutive Business Days after the date of receipt by the Borrowers of written notice (which notice shall specify in reasonable detail the calculation and amount of such shortfall amount) from the Collateral Agent;

then, and in any such event, the Agent (i) shall at the request, or may with the consent, of the Majority Banks, by notice to the Borrowers, declare the Commitments of each Bank, the obligations of each Issuing Bank to issue any Letter of Credit and each Bank to make Revolving Credit Advances to be terminated, whereupon each such obligation shall forthwith terminate, and (ii) shall at the request, or may with the consent, of the Majority Banks, by notice to the Borrowers, declare the principal of the Reimbursement Obligations and Revolving Credit Advances, all interest thereon and all other amounts payable by the Borrowers under this Agreement and any other Credit Document to be forthwith due and payable, whereupon all such amounts shall become and be forthwith due and payable, without requirement of any presentment, demand, protest, notice of intent to accelerate, further notice of acceleration or other further notice of any kind (other than the notice expressly provided for above), all of which are hereby expressly waived by the Borrowers; provided, however, that in the event of any Event of Default described in Section 6.1(d)(ii), (A) the Commitments of each Bank, the obligation of each Issuing Bank to issue a Letter of Credit and each Bank to make Revolving Credit Advances shall automatically be terminated and (B) the principal of the Reimbursement Obligations and

Revolving Credit Advances, all such interest and all such other amounts shall automatically become and be due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or any other notice of any kind, all of which are hereby expressly waived by the Borrowers. For purposes of this Section 6.1, any Reimbursement Obligation or Revolving Credit Advances owed to an SPC shall be deemed to be owed to its Designating Bank.

ARTICLE VII

THE AGENT; THE COLLATERAL AGENT; AND ISSUING BANKS

SECTION 7.1. Agent's and Collateral Agent's Authorization and Action. Each Bank hereby appoints and authorizes the Agent and the Collateral Agent to take such action respectively as agent and collateral agent on its behalf and to exercise such powers under this Agreement and the other Credit Documents as are delegated respectively to the Agent and to the Collateral Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by the Credit Documents (including enforcement of the terms of this Agreement or collection of the Reimbursement Obligations or Notes, fees and any other amounts due and payable pursuant to this Agreement), neither the Agent nor the Collateral Agent shall be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Banks, and such instructions shall be binding upon all Banks and all holders of Notes; provided, however, that the neither the Agent nor the Collateral Agent shall be required to take any action which exposes the Agent or the Collateral Agent to personal liability or which is contrary to the Credit Documents or applicable law. The Agent and the Collateral Agent agree to give to each Bank prompt notice of each notice given to it by any Borrower pursuant to the terms of this Agreement or any other Credit Document.

SECTION 7.2. Agent's and Collateral Agent's Reliance, Etc. Neither the Agent nor the Collateral Agent nor any of their respective directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by them or under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, the Agent and the Collateral Agent: (i) may consult with their respective legal counsel (including counsel for any Borrower), independent public accountants and other experts selected by them and shall not be liable for any action taken or omitted to be taken in good faith by them in accordance with the advice of such counsel, accountants or experts; (ii) make no warranty or representation to any Bank and shall not be responsible to any Bank for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement or any other Credit Document; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Credit Document on the part of any Borrower or to inspect the property (including the books and records) of any Borrower; (iv) shall not be responsible to any Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement, any other Credit Document or any other instrument or document furnished pursuant hereto or thereto; (v) shall incur no liability under or

in respect of any Letter of Credit, Note or this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) believed by them in their reasonable judgement to be genuine and signed or sent by the proper party or parties; (vi) may treat any Issuing Bank that issues or has issued a Letter of Credit as being the issuer of such Letter of Credit for all purposes and (vii) may treat a Bank as the obligee of any Revolving Credit Advance or, if applicable, the payee of any Note as the holder thereof, until the Agent receives and accepts a Transfer Agreement executed by a Borrower (if required pursuant to Section 8.5), the assignor Bank and the assigning Bank pursuant to Section 8.5.

SECTION 7.3. Issuing Banks' Reliance, Etc. Neither the Issuing Banks nor any directors, officers, agents or employees of the Issuing Banks shall be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement, except for its or their own gross negligence or willful misconduct. The Issuing Banks shall not have, by reason of this Agreement a fiduciary relationship in respect of any Bank; and nothing in this Agreement, expressed or implied, is intended or shall be so construed as to impose upon the Issuing Banks any obligations in respect of this Agreement except as expressly set forth herein. Without limitation of the generality of the foregoing, the Issuing Banks: (i) may consult with legal counsel (including counsel for any Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) make no warranty or representation to any Bank and shall not be responsible to any Bank for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement or any other Credit Document; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Credit Document on the part of any Borrower or to inspect the property (including the books and records) of any Borrower; (iv) shall not be responsible to any Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Credit Document or any other instrument or document furnished pursuant hereto or thereto; and (v) shall incur no liability under or in respect of any Letter of Credit or this Agreement by acting upon any notice, consent, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) believed by it in its reasonable judgment to be genuine and signed or sent by the proper party or parties.

SECTION 7.4. Rights. With respect to its Commitments, the Revolving Credit Advances made by it and the Notes, if any, issued to it, or any Letter of Credit Interest held by it, Citibank shall have the same rights and powers under any such Note and this Agreement as any other Bank and may exercise the same as though it was not the Agent and Collateral Agent; with respect to its Letter of Credit Commitments, the Reimbursement Obligations owed to it, any Letter of Credit Interest held by it, the Issuing Banks shall have the right and power under this Agreement as any other Bank and may exercise the same as though it was not an Issuing Bank, as the case may be. The term "Bank" or "Banks" shall, unless otherwise expressly indicated, include each of the Issuing Banks in their individual capacity. Citibank, each Issuing Bank and the respective affiliates of each may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, any Borrower, any Person who may do business with or own, directly or indirectly, securities of any Borrower and any other Person, all as if Citibank were not the Agent and Collateral Agent and each Issuing Bank was not an Issuing Bank, in each case without any duty to account therefor to the Banks.

SECTION 7.5. Indemnification. The Banks agree to indemnify the Agent and the Collateral Agent (to the extent not reimbursed by the Borrowers), ratably according to the respective Letter of Credit Interests then held by each of them plus the respective principal amounts of the Revolving Credit Advances owed to each of them (or if no Letter of Credit Interests or Revolving Credit Advances are at the time outstanding, ratably according to their respective LC Participation Percentage plus their Revolving Credit Commitments), from and against any and all claims, damages, losses, liabilities and expenses (including reasonable fees and disbursements of counsel) of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against either the Agent or the Collateral Agent in any way relating to or arising out of this Agreement or any other Credit Document or any action taken or omitted by the Agent or the Collateral Agent under this Agreement or any other Credit Document (EXPRESSLY
INCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF THE AGENT, BUT EXCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE AGENT AND THE COLLATERAL AGENT). IT IS THE INTENT OF THE PARTIES HERETO THAT THE AGENT AND THE COLLATERAL AGENT SHALL, TO THE EXTENT PROVIDED IN THIS SECTION 7.5, BE INDEMNIFIED FOR RESPECTIVELY FOR THEIR OWN ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE. Without limitation of the foregoing, each Bank agrees to reimburse the Agent and the Collateral Agent promptly upon demand for their respective ratable shares of any out-of-pocket expenses (including counsel fees) incurred respectively by the Agent and the Collateral Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under this Agreement or any other Credit Document to the extent that the Agent and the Collateral Agent are not reimbursed for such expenses by the Borrowers.

(a) The Banks agree to indemnify each Issuing Bank (to the extent not reimbursed by the Borrowers), ratably according to the respective Letter of Credit Interests then held by each of them plus the respective principal amounts so the Revolving Credit Advances owed to each of them (or if no Letter of Credit Interests or Revolving Credit Advances are at the time outstanding, ratably according to their respective LC Participation Percentage plus their Revolving Credit Commitments), from and against any and all claims, damages, losses, liabilities and expenses (including reasonable fees and disbursements of counsel) of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against any Issuing Bank in any way relating to or arising out of this Agreement or any other Credit Document or any action taken or omitted by any Issuing Bank under this Agreement or any other Credit Document (EXPRESSLY INCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF ANY ISSUING BANK, BUT EXCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH ISSUING BANK). IT IS THE INTENT OF THE PARTIES HERETO THAT AN ISSUING BANK SHALL, TO THE EXTENT PROVIDED IN THIS SECTION 7.5, BE INDEMNIFIED FOR ITS OWN ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE. Without limitation of the foregoing, each Bank agrees to reimburse each Issuing Bank promptly upon demand for its

ratable share of ay out-of-pocket expenses (including counsel fees) incurred by such Issuing Bank in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through renegotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under this Agreement or any other Credit Documents to the extent that such Issuing Bank is not reimbursed for such expenses by the Borrowers.

SECTION 7.6. Successor Agent and Collateral Agent. The Agent and Collateral Agent may resign at any time respectively as Agent and Collateral Agent under this Agreement by giving written notice thereof to the Banks and the Borrowers and may be removed at any time with or without cause by the Majority Banks; provided, however, that any removal of the Agent will not be effective until it has also been replaced as Collateral Agent. Upon any such resignation or removal, the Majority Banks shall have the right to appoint, with the consent of the Borrowers (which consent shall not be unreasonably withheld and shall not be required if an Event of Default exists), a successor Agent and Collateral Agent from among the Banks. If no successor Agent and Collateral Agent shall have been so appointed by the Majority Banks with such consent, and shall have accepted such appointment, within 30 days after the respective retiring Agent's or Collateral Agent's giving of notice of resignation or the Majority Banks' removal of the retiring Agent or Collateral Agent, then the retiring Agent or Collateral Agent may, on behalf of the Banks, appoint respectively a successor Agent or Collateral Agent, which shall be a Bank which is a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as Agent or Collateral Agent under this Agreement by respectively a successor Agent or Collateral Agent, such successor Agent or Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent or Collateral Agent and shall function as the Agent or Collateral Agent under this Agreement, and the retiring Agent or Collateral Agent shall be discharged from its duties and obligations as Agent or Collateral Agent under this Agreement. After any retiring Agent's or Collateral Agent's resignation or removal hereunder respectively as Agent or Collateral Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent or Collateral Agent under this Agreement.

SECTION 7.7. Bank Credit Decision. Each of the Banks acknowledges that it has, independently and without reliance upon the Collateral Agent, the Agent, the Documentation Agent, the Co-Lead Arrangers, the Issuing Banks or any other Bank and based on the financial statements referred to in
Section 4.1(e) and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each of the Banks and the other beneficiaries of any Security Agreement parties hereto (both on its own behalf and on behalf of any of its Affiliates that is a beneficiary of any Security Agreement) also acknowledges that it will, independently and without reliance upon the Collateral Agent, the Agent, the Documentation Agent, the Co-Lead Arrangers, the Issuing Banks or any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Credit Documents. The Collateral Agent shall not have any duty or responsibility, either initially or on a continuing basis, to provide any Person with any

credit or other information with respect thereto, whether coming into its possession before the issuance of any Letter of Credit or at any time or times thereafter.

SECTION 7.8. Certain Rights of the Collateral Agent. If the Collateral Agent shall request instructions from the Majority Banks with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the Collateral Agent shall be entitled to refrain from such act or taking such action unless and until the Collateral Agent shall have received instructions from the Majority Banks; and it shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Bank nor any beneficiary of any Security Agreement shall have any right of action whatsoever against the Collateral Agent as a result of its acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Majority Banks or all of the Banks, as the case may be. Furthermore, except for action expressly required of the Collateral Agent hereunder, the Collateral Agent shall in all cases be fully justified in failing or refusing to act hereunder unless it shall be specifically indemnified to its satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.

SECTION 7.9. Other Agents. The other agents, Documentation Agent and the Co-Lead Arrangers have no duties or obligations under this Agreement. None of the other agents, the Documentation Agent or the Co-Lead Arrangers shall have, by reason of this Agreement or the other Credit Documents, a fiduciary relationship in respect of any Bank, and nothing in this Agreement or other Credit Documents, express or implied, is intended or shall be so construed to impose on any of the other agents, the Documentation or the Co-Lead Arrangers any obligation in respect of this Agreement or other Credit Documents.

ARTICLE VIII

MISCELLANEOUS

SECTION 8.1. Amendments, Etc. No amendment or waiver of any provision of this Agreement, nor consent to any departure by any Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Banks, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by all the Banks, do any of the following: (a) except as provided in Section 3.1(i), waive any of the conditions specified in Article III, (b) increase the Commitments of the Banks or the Letter of Credit Commitments of the Issuing Banks or subject any Bank to any additional obligation, (c) reduce the Reimbursement Obligations, (d) reduce the principal of, or interest on (other than any interest pursuant to Section 2.13(b)), the Revolving Credit Advances or any fees or other amounts payable hereunder, (e) postpone any date fixed for any payment of the Reimbursement Obligations, Revolving Credit Advances or any fees or other amounts payable hereunder, (f) change the definition of Majority Banks or otherwise change the LC Participation Percentages, the percentage of the Commitments or of the aggregate unpaid principal amount of the Revolving Credit Advances, Letter of Credit Liabilities or the Reimbursement Obligations, or the number of Banks, which shall be required for the Banks or any of them to take any action under this Agreement,
(g) release any of the Collateral, except as set forth in the Security

Agreement or Section 2.2(c), (h) amend, waive any provision of, or consent to any departure by any Borrower from Section 2.5(b), Section 2.9 or this Section 8.1, (i) decrease the percentage set forth in the definition of "Collateral Coverage Requirement" or (j) amend or modify the definition of "Collateral" as defined herein or as defined in the Security Agreement; and provided further that no amendment, waiver or consent shall, unless in writing and signed by the Agent in addition to the Banks required above to take such action, affect the rights or duties of the Agent under any Credit Document; and provided further that no amendment, waiver or consent shall, unless in writing and signed by each Issuing Bank in addition to the Banks required above to take such action, affect the rights or duties of any Issuing Bank under any Credit Document; and provided further that no amendment, waiver or consent shall, unless in writing and signed by the Collateral Agent in addition to the Banks required above to take such action, affect the rights or duties of the Collateral Agent under any Credit Document.

SECTION 8.2. Notices, Etc. All notices and other communications provided for hereunder shall be either (x) in writing (including telecopy communication) and mailed, telecopied or delivered or (y) as and to the extent set forth in Section 8.2(b) and in the provisos to this Section 8.2(a), in an electronic medium and delivered, as set forth in Section 8.2(b), if to any Bank, as specified opposite its name on Schedule I hereto or specified in a Transfer Agreement for any assignee Bank delivered pursuant to Section 8.5(a); if to a Borrower, as specified opposite its name on Schedule II hereto; if to an Issuing Bank to its address as specified opposite its name on Schedule I; and if to Citibank, as Agent or Collateral Agent, to its address at 2 Penns Way, Suite 200, New Castle, Delaware 19720 (telecopier number: (302) 894-6120), Attention:
Williams Account Officer, with a copy to Citicorp North America, Inc., 1200 Smith Street, Suite 2000, Houston, Texas 77002 (telecopier number: (713) 654-2849), Attention: The Williams Companies, Inc. Account Officer, or, as to any Borrower, any Issuing Bank, the Collateral Agent, or the Agent, at such other address as shall be designated by such party in a written notice to the other parties and, as to each other party, at such other address as shall be designated by such party in a written notice to any Borrower, each Issuing Bank, the Collateral Agent and the Agent; provided that materials required to be delivered pursuant to Section 5.1(b)(ii), (iii) and (iv) shall be delivered to the Agent as specified in Section 8.2(b) or as otherwise specified to any Borrower by the Agent; provided, further, that any communication that (A) relates to a request for a new, or a conversion of an existing, borrowing or other extension of credit (including any election of an interest rate or interest period relating thereto), (B) relates to the payment of any principal or other amount due under the Credit Agreement prior to the scheduled date therefor, (C) provides notice of any Default or Event of Default under the Credit Agreement or (D) is required to be delivered to satisfy any condition precedent to the effectiveness of the Credit Agreement and/or any borrowing or other extension of credit thereunder, shall be in writing (including telecopy communication) and mailed, telecopied or delivered pursuant to this Section
8.2(a). All such notices and communications shall, when mailed, telecopied or e-mailed, be effective when received in the mail, sent by telecopier to any party to the telecopier number as set forth herein or on Schedule I or Schedule II or specified in a Transfer Agreement for any assignee Bank delivered pursuant to Section 8.5(a) (or other telecopy number specified by such party in a written notice to the other parties hereto) or confirmed by e-mail, respectively, except that notices and communications to the Agent shall not be effective until received by the Agent. Any notice or communication to a Bank shall be deemed to be a notice or communication to any SPC designated by such Bank and no further notice to an SPC shall be required. Delivery by telecopier of an executed counterpart of this Agreement or of any amendment or waiver of any

provision of this Agreement or any other Credit Document (other than a Letter of Credit) shall be effective as delivery of a manually executed counterpart thereof.

(a) So long as Citibank is the Agent, materials required to be delivered pursuant to Section 5.1(b)(ii), (iii) and (iv) may be delivered to the Agent (x) in an electronic medium in a format acceptable to the Agent and the Lenders by e-mail at oploanswebadmin@citigroup.com or (y) in accordance with
Section 8.2(a)(x). The Borrowers agree that the Agent may make such materials, as well as any other written information, documents, instruments and other material relating to any Borrower, any Subsidiaries or any other materials or matters relating to this Agreement, the Notes or any of the transactions contemplated hereby (collectively, the "Communications") available to the Banks by posting such notices on "e-Disclosure" (the "Platform"), the Agent's internet delivery system that is part of Fixed Income Direct, Global Fixed Income's primary web portal. Although the primary web portal is secured with a dual firewall and a User ID/Password Authorization System and the Platform is secured through a single user per deal authorization method whereby each user may access the Platform only on a deal-by-deal basis, the Borrowers acknowledge that (i) the distribution of material through an electronic medium is not necessarily secure and that there are confidentiality and other risks associated with such distribution, (ii) the Platform is provided "as is" and "as available" and (iii) neither the Agent nor any of its Affiliates warrants the accuracy, adequacy or completeness of the Communications or the Platform and each expressly disclaims liability for errors or omissions in the Communications or the Platform. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by the Agent or any of its Affiliates in connection with the Platform.

(b) Each Bank agrees that notice to it (as provided in the next sentence) (a "Notice") specifying that any Communications have been posted to the Platform shall constitute effective delivery of such information, documents or other materials to such Bank for purposes of this Agreement; provided that, if requested by any Bank, the Agent shall deliver a copy of the Communications to such Bank by e-mail or telecopier. Each Bank agrees (i) to notify the Agent in writing of such Bank's e-mail address to which a Notice may be sent by electronic transmission (including by electronic communication) on or before the date such Bank becomes a party to this Agreement (and from time to time thereafter to ensure that the Agent has on record an effective e-mail address for such Bank) and (ii) that any Notice may be sent to such e-mail address.

SECTION 8.3. No Waiver; Remedies. No failure on the part of any Bank, the Collateral Agent, any Issuing Bank, any Issuing Bank or the Agent to exercise, and no delay in exercising, any right under this Agreement or any other Credit Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies provided in this Agreement are cumulative and not exclusive of any remedies provided by law.

SECTION 8.4. Costs and Expenses.

(a) (i) TWC agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Co-Lead Arrangers, the Documentation Agent, the Collateral Agent, the Agent and the Issuing Banks in connection with the preparation, execution, delivery, administration, modification and amendment of this Agreement, the Letters of Credit, the Notes, or any other Credit Document and the other documents to be delivered under this Agreement, including the reasonable fees and out-of-pocket expenses of counsel for the Agent with respect thereto and with respect to advising the Agent as to its rights and responsibilities under this Agreement, the Notes and any other Credit Document, the reasonable costs and expenses of the Issuing Banks in connection with any Letter of Credit, the reasonable costs and expenses of the Collateral Agent and all amounts paid by the Collateral Agent pursuant to the Security Agreement, and
(ii) TWC agrees to pay on demand all costs and expenses, if any (including reasonable counsel fees and expenses, which may include allocated costs of in-house counsel), of the Agent, the Collateral Agent, the Documentation Agent, the Issuing Banks and each Bank in connection with the enforcement (whether before or after the occurrence of an Event of Default and whether through negotiations (including formal workouts or restructurings), legal proceedings or otherwise) against any Borrower.

(b) Each Borrower agrees, to the fullest extent permitted by law, to indemnify and hold harmless the Agent, the Collateral Agent, the Documentation Agent, the Issuing Banks, other agents, the Co-Lead Arrangers and each Bank and each of their respective directors, officers, employees and agents (the "Indemnified Parties") from and against any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and disbursements of counsel) of any kind or nature whatsoever for which any of them may become liable or which may be incurred by or asserted against any of the Indemnified Parties (other than by another Bank or any successor or assign of another Bank), in each case in connection with or arising out of or by reason of any investigation, litigation, or proceeding, whether or not any of the Indemnified Parties is a party thereto, arising out of, related to or in connection with the Notes, any Letter of Credit, this Agreement, any Credit Document or any transaction in which any proceeds of all or any part of Letters of Credit or Revolving Credit Advances are applied (EXPRESSLY INCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNIFIED PARTY, BUT EXCLUDING ANY SUCH CLAIM, DAMAGE, LOSS, LIABILITY OR EXPENSE ATTRIBUTABLE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY OR THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS OF SUCH INDEMNIFIED PARTY). IT IS THE INTENT OF THE PARTIES HERETO THAT EACH INDEMNIFIED PARTY SHALL, TO THE EXTENT PROVIDED IN THIS SECTION 8.4(b), BE INDEMNIFIED FOR ITS OWN ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE.

(c) If any payment of principal of, or Conversion of, any Eurodollar Rate Advance is made by any Borrower to or for the account of a Bank other than on the last day of the Interest Period for such Eurodollar Rate Advance, as a result of a payment, prepayment or Conversion pursuant to this Agreement or acceleration of the maturity of the Notes pursuant to

Section 6.1, such Borrower shall, upon demand by such Bank (with a copy of such demand to the Agent), pay to the Agent for the account of such Bank any amounts required to compensate such Bank for any additional losses, costs or expenses that it may reasonably incur as a result of such payment or Conversion, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any Bank to fund or maintain such Eurodollar Rate Advance.

(d) Without prejudice to the survival of any other agreement of the Borrowers hereunder, the agreements and obligations of the Borrowers contained in Sections 2.2, 2.6 and 2.8 and this Section 8.4 shall survive the payment in full of principal, interest and all other amounts payable hereunder and under the Notes.

SECTION 8.5. Binding Effect; Transfers.

(a) This Agreement shall become effective (other than Article II, which shall become effective upon satisfaction of the conditions precedent set forth in Section 3.1) when it shall have been executed by the Borrowers, the Agent, the Collateral Agent and the Issuing Banks, and when each Bank listed on the signature pages hereof has delivered an executed counterpart hereof to the Agent, has sent to the Agent a facsimile copy of its signature hereon or has notified the Agent that such Bank has executed this Agreement and thereafter shall be binding upon and inure to the benefit of the Borrowers, the Agent, the Collateral Agent, the Issuing Banks and each Bank and their respective successors and assigns; provided that the Borrowers shall not have the right to assign any of their rights hereunder or any interest herein without the prior written consent of the Agent. Each Bank may assign to one or more banks, financial institutions or other entities all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Credit Advances owing to such Bank, any Note or Notes held by such Bank, its Letter of Credit Commitments, its Letter of Credit Interest and any or all of its Commitments); provided, however, that (i) each such assignment shall be of a constant, and not a varying, percentage of all rights and obligations under this Agreement and the Notes, (ii) except in the case of an assignment of all of a Bank's rights and obligations under this Agreement or an assignment to another Bank, the amount of the Commitment, Letter of Credit Commitment and/or LC Participation Percentage of the assigning Bank being assigned pursuant to each such assignment (determined as of the date of the Transfer Agreement with respect to such assignment) shall in no event be less than $10,000,000 in the aggregate or such lesser amount as may be consented to by the Agent and the respective Borrowers, (iii) each such assignment shall be to an Eligible Assignee, and (iv) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register maintained by the Agent, a Transfer Agreement and, unless the assignment is to an affiliate of such Bank, a processing and recordation fee of $3,500. Upon such execution, delivery, acceptance and recording, from and after the effective date specified in each Transfer Agreement, (x) the assignee thereunder shall be a party hereto as a "Bank" and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Transfer Agreement, have the rights and obligations of a Bank hereunder (including obligations to the Agent and the Collateral Agent pursuant to Section 7.6) and (y) the Bank assignor thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Transfer Agreement, relinquish its rights and be released from its obligations under this Agreement, except for rights and obligations which continue after repayment of the Reimbursement Obligations and

Revolving Credit Advances or termination of this Agreement pursuant to the express terms of this Agreement (and, in the case of a Transfer Agreement covering all of an assigning Bank's rights and obligations under this Agreement, such Bank shall cease to be a party hereto).

(b) By executing and delivering a Transfer Agreement, the Bank assignor thereunder and the assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Transfer Agreement, such assigning Bank makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement, any other Credit Document or any other instrument or document furnished pursuant hereto or in connection herewith, the perfection, existence, sufficiency or value of any Collateral or the execution, legality, validity, enforceability, genuineness, sufficiency or value of any Credit Document or any other instrument or document furnished pursuant hereto or in connection herewith; (ii) such assigning Bank makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or any other Person or the performance or observance by any Borrower or any other Person of any of its respective obligations under the Credit Documents or any other instrument or document furnished pursuant hereto or in connection herewith; (iii) such assignee confirms that it has received a copy of this Agreement, together with copies of such financial statements and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Transfer Agreement; (iv) such assignee will, independently and without reliance upon the Agent, the Collateral Agent, any Issuing Bank, such assigning Bank or any other Bank and based on such financial statements and such other documents and information as it shall deem appropriate at the time, continue to make its own credit analysis and decisions in taking or not taking action under this Agreement, any of the other Credit Documents or any other instrument or document; (v) such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the Agent and the Collateral Agent, respectively, to act as Agent and the Collateral Agent, respectively, on its behalf and to exercise such powers and discretion under this Agreement, any other Credit Document or any other document executed in connection herewith or therewith as are delegated to the Agent and the Collateral Agent, respectively, by the terms hereof or thereof, together with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Bank.

(c) The Agent shall maintain a copy of each Transfer Agreement, delivered to and accepted by it and a register for the recordation of the names and addresses of each Bank together with its respective Commitment, Letter of Credit Commitment, LC Participation Percentage, Letter of Credit Interest and the principal amount of the Revolving Credit Advances owing to such Bank from time to time (the "Register"). The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Borrowers, the Agent, the Issuing Banks and the Banks may treat each Person whose name is recorded in the Register as a Bank hereunder for all purposes of this Agreement. The Register shall be available for inspection by any Borrower or any Bank at any reasonable time and from time to time upon reasonable prior notice.

(d) Upon its receipt of a Transfer Agreement executed and completed by an assigning Bank and an assignee representing that it is an Eligible Assignee (and consented to by

the Agent and, if required, by the applicable Borrower), the Agent shall (i) accept such Transfer Agreement, (ii) record the information contained therein in the Register and (iii) give prompt notice thereof to such Borrower. If requested by the assigning or assignee Bank, each Borrower after its receipt of such notice, shall, at its own expense, execute and deliver to the Agent in exchange for the surrendered Notes, new Notes to the order of such assignee Bank in an amount equal to the Commitment assumed by it pursuant to such Transfer Agreement and, if the assigning Bank has retained a Commitment hereunder new Notes to the order of the assigning Bank in an amount equal to the Commitment retained by it hereunder. Such new Notes shall be in an aggregate principal amount equal to the aggregate principal amount of such surrendered Notes, shall be dated the effective date of such Transfer Agreement and shall otherwise be in substantially the form of Exhibit F hereto

(e) Each Bank may sell participations to one or more banks or other entities (other than the Borrowers or any of their Affiliates) in or to all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment, the Revolving Credit Advances owing to it, the Notes held by it and its Letter of Credit Interest); provided, however, that (i) such Bank's obligations under this Agreement shall remain unchanged, (ii) such Bank shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) such Bank shall remain the holder of any such Note for all purposes of this Agreement, (iv) the Borrowers, the Agent, the Collateral Agent, each Issuing Bank and the other Banks shall continue to deal solely and directly with such Bank in connection with such Bank's rights and obligations under this Agreement, (v) all amounts payable under this Agreement shall be calculated as if such Bank had not sold such participation, and (vi) the terms of any such participation shall not restrict such Bank's ability to consent to any departure by any Borrower herefrom without the approval of the participant, except that the approval of the participant may be required to the extent that such amendment, waiver or consent would reduce the principal of, or interest on, the Reimbursement Obligations or Revolving Credit Advances or any fees or other amounts payable hereunder, in each case to the extent subject to such participation, or postpone any date fixed for any payment of principal of, or interest on, the Reimbursement Obligations or Revolving Credit Advances or any fees or other amounts payable hereunder, in each case to the extent subject to such participation.

(f) Notwithstanding any other provisions set forth in this Agreement, any Bank may at any time create a security interest in all or any portion of its rights under this Agreement (including its Letter of Credit Interest) or any of its Notes in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Board without notice to or consent of the Borrowers or the Agent. Furthermore, any Bank may assign, as collateral or otherwise, any of its rights (including rights to payments of principal of and/or interest on its Letter of Credit Interest or Revolving Credit Advances made by such Bank) under this Agreement, its Notes or any of its Letter of Credit Interest to any Federal Reserve Bank without notice to or consent of any Borrowers or the Agent.

(g) Notwithstanding anything to the contrary contained herein, any Bank (a "Designating Bank") with the consent of the Agent (and, if no Event of Default has occurred and is continuing, the Borrowers) may grant to a special purpose funding vehicle (an "SPC"), identified as such in writing from time to time by the Designating Bank to the Agent and the Borrowers, the option to fund all or any part of any payment to any Issuing Bank or Revolving

Credit Advance which the Designating Bank has agreed to make; provided that no Designating Bank shall have granted at any one time such option to more than one SPC; and provided further that (i) such Designating Bank's obligations under this Agreement shall remain unchanged, (ii) such Designating Bank shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Borrowers, the Issuing Banks, the Collateral Agent, the Agent and the other Banks shall continue to deal solely and directly with such Designating Bank in connection with such Designating Bank's rights and obligations under this Agreement, (iv) any such option granted to an SPC shall not constitute a commitment by such SPC to fund any drawing under a Letter of Credit or to fund any Revolving Credit Advance, and (v) neither the grant nor the exercise of such option to an SPC shall increase the costs or expenses or otherwise increase or change the obligations of a Borrower under this Agreement (including its obligations under Section 2.7). The issuance of a Letter of Credit or the making of a Revolving Credit Advance by an SPC hereunder shall utilize the Commitment of the Designating Bank to the same extent, and as if, such Revolving Credit Advance were made by or such Letter of Credit were issued by such Designating Bank. Each party hereto hereby agrees that no SPC shall be liable for any indemnity or similar payment obligation under this Agreement to the extent that any such indemnity or similar payment obligations shall have been paid by its Designating Bank. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding commercial paper or other senior indebtedness of any SPC, it will not institute against, or join any other person in instituting against such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under the laws of the United States. In addition, notwithstanding anything to the contrary contained in this Section 8.5, an SPC may not assign its interest in any Letter of Credit Interests or Revolving Credit Advance except that, with notice to, but without the prior written consent of, the Borrowers and the Agent and without paying any processing fee therefor, such SPC may assign all or a portion of its interests in any Letter of Credit Interests or Revolving Credit Advance to the Designating Bank or to any financial institutions (consented to by the Borrowers and Agent), providing liquidity and/or credit support to or for the account of such SPC to support the funding or maintenance of Letter of Credit Interests or Revolving Credit Advance. Each Designating Bank shall serve as the agent of its SPC and shall on behalf of its SPC: (i) receive any and all payments made for the benefit of such SPC and (ii) give and receive all communications and notices, and vote, approve or consent hereunder, and take all actions hereunder, including votes, approvals, waivers, consents and amendments under or relating to this Agreement, the Notes and the other Credit Documents. Any such notice, communication, vote, approval, waiver, consent or amendment shall be signed by the Designating Bank for the SPC and need not be signed by such SPC on its own behalf. The Borrowers, the Issuing Banks, the Collateral Agent, the Agent and the Banks may rely thereon without any requirement that the SPC sign or acknowledge the same or that notice be delivered to the Borrowers or the SPC. This Section 8.5(g) may not be amended without the written consent of any SPC, which shall have been identified to the Agent and the Borrowers.

SECTION 8.6. Governing Law. This Agreement, the Notes and the other Credit Documents shall be governed by, and construed in accordance with, the laws of the State of New York.

SECTION 8.7. Interest. It is the intention of the parties hereto that the Agent, each Issuing Bank, the Collateral Agent and each Bank shall conform strictly to usury laws applicable to it, if any. Accordingly, if the transactions with the Agent, any Issuing Bank, the Collateral Agent or any Bank contemplated hereby would be usurious under applicable law, then, in that event, notwithstanding anything to the contrary in this Agreement or any other agreement entered into in connection with or as security for this Agreement, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under applicable law that is contracted for, taken, reserved, charged or received by the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, under this Agreement, the Notes and any other Credit Document or under any other agreement entered into in connection with or as security for this Agreement, the Notes or the other Credit Documents shall under no circumstances exceed the maximum amount allowed by such applicable law and any excess shall be canceled automatically and, if theretofore paid, shall at the option of the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, be credited by the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, on the principal amount of the obligations owed to the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, by the applicable Borrower or refunded by the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, to the applicable Borrower, and (ii) in the event that the maturity of any obligation payable to the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, is accelerated or in the event of any required or permitted prepayment, then such consideration that constitutes interest under law applicable to the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, may never include more than the maximum amount allowed by such applicable law and excess interest, if any, to the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, provided for in this Agreement or otherwise shall be canceled automatically as of the date of such acceleration or prepayment and, if theretofore paid, shall, at the option of the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, be credited by the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, on the principal amount of the obligations owed to the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, by the Borrowers or refunded by the Agent, such Issuing Bank, the Collateral Agent or such Bank, as the case may be, to the applicable Borrower.

SECTION 8.8. Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

SECTION 8.9. Survival of Agreements, Representations and Warranties, Etc. All warranties, representations and covenants made by any Borrower or any officer of any Borrower herein or in any certificate or other document delivered in connection with this Agreement shall be considered to have been relied upon by the Banks and shall survive the issuance of any Letters of Credit and the issuance and delivery of the Notes (if any) and the making of Revolving Credit Advances regardless of any investigation.

SECTION 8.10. Confidentiality.

(a) Subject to paragraph (b) below, each Bank agrees that it will not disclose without the prior consent of TWC (other than to employees, auditors, accountants, counsel or other professional advisors of the Agent or any Bank) any information with respect to the Borrowers, which is furnished pursuant to this Agreement and which (i) the Borrowers in good faith considers to be confidential and (ii) is either clearly marked confidential or is designated by the Borrowers to the Agent and the Banks in writing as confidential; provided that any Bank may disclose any such information (1) as has become generally available to the public, (2) as may be required or appropriate in any report, statement or testimony submitted to or required by any municipal, state or Federal regulatory body having or claiming to have jurisdiction over such Bank or submitted to or required by the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors, (3) as may be required or appropriate in response to any summons or subpoena in connection with any litigation, (4) in order to comply with any law, order, regulation or ruling applicable to such Bank, (5) to the prospective transferee or grantee in connection with any contemplated transfer of any of the Commitments, Letter of Credit Commitments, Letter of Credit Interests or Revolving Credit Advances or any interest therein by such Bank or the grant of an option to an SPC to fund any drawing under a Letter of Credit or Revolving Credit Advance; provided that such prospective transferee executes an agreement with or for the benefit of the Borrowers containing provisions substantially identical to those contained in this Section 8.10; and provided further that if the contemplated transfer is a grant of an option to fund a drawing under a Letter of Credit or Revolving Credit Advance to an SPC pursuant to Section 8.5(g), such SPC may disclose (x) on a confidential basis, any non-public information relating to such drawings funded by it to any rating agency, commercial paper dealer or provider of any surety, guaranty or credit or liquidity enhancement to such SPC, and (y) if prior notice of the delivery thereof is given to the Borrowers, such information as may be required by law or regulation to be delivered, (6) in connection with the exercise of any remedy by such Bank following an Event of Default pertaining to this Agreement, any of the Notes or any of the other Credit Documents or any other document delivered in connection herewith, (7) in connection with any litigation involving such Bank pertaining to this Agreement, any of the Notes or any of the other Credit Documents or any other document delivered in connection herewith, (8) to any Bank, any Issuing Bank, the Collateral Agent or the Agent, or (9) to any affiliate of any Bank; provided that such affiliate executes an agreement with or for the benefit of the Borrowers containing provisions substantially identical to those contained in this Section 8.10.

(b) Notwithstanding anything herein or in any of the other Credit Documents to the contrary, the Borrowers, the Agent and each Bank (and each employee, representative or other agent of any such Person) may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such Person relating to such tax treatment and tax structure. For purposes of this Section 8.11(b), "tax treatment" means the purported or claimed U.S. federal income tax treatment of the transaction, and "tax structure" means any fact that may be relevant to understanding the purported or claimed U.S. federal income tax treatment of the transaction. The authorization to disclose the tax treatment and tax structure of the transactions contemplated hereby contained in the first sentence was applicable immediately upon commencement of discussions between the Borrowers, the Agent and the Banks with respect to the transactions contemplated hereby.

SECTION 8.11. Waiver of Jury Trial. THE BORROWERS, THE AGENT,
THE COLLATERAL AGENT, THE ISSUING BANK AND THE BANKS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE NOTES, ANY LETTER OF CREDITS, ANY OTHER CREDIT DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

SECTION 8.12. Severability. In the event any one or more of the provisions contained in this Agreement or in any other Credit Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 8.13. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY CREDIT DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE BANKS, ANY ISSUING BANK, THE COLLATERAL AGENT OR THE BORROWERS IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE COUNTY OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL MAY BE FOUND. THE BORROWERS IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN ACCORDANCE WITH SECTION 8.2. THE BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH BORROWER HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE CREDIT DOCUMENTS.

SECTION 8.14. Nature of Obligations. Notwithstanding anything in this Agreement to the contrary, (a) NWP and TGPL shall be obligated only with respect in each case

for the Revolving Credit Advances made to such Borrower (and all interest and fees thereto) under Section 2.1(a) and the Reimbursement Obligations and fees with respect to the Letters of Credit issued for the account of such Borrower pursuant to Section 2.1(b) and (b) TWC shall be obligated for all obligations of each Borrower hereunder.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

BORROWERS:

THE WILLIAMS COMPANIES, INC.

By:    /s/ Steven J. Malcolm
Name:  Steven J. Malcolm
Title: Chief Executive Officer, Chairman
       of the Board, and President

NORTHWEST PIPELINE CORPORATION

By:    /s/ J. Douglas Whisenant
Name:  J. Douglas Whisenant
Title: Senior Vice President

TRANSCONTINENTAL GAS PIPE LINE
CORPORATION

By:    /s/ J. Douglas Whisenant
Name:  J. Douglas Whisenant
Title: Senior Vice President

CITIBANK, N.A., as Administrative Agent and Collateral Agent

By:    /s/ J. Chris Lyons
Name:  J. Chris Lyons
Title: Vice President

CITIBANK, N.A. as Issuing Bank and Bank

By:    /s/ J. Chris Lyons
Name:  J. Chris Lyons
Title: Vice President

BANK OF AMERICA, N.A., as Syndication Agent

By:    /s/ Claire Liu
Name:  Claire M. Liu
Title: Managing Director

BANK OF AMERICA, N.A., as Issuing Bank and Bank

By:    /s/ Claire Liu
Name:  Claire M. Liu
Title: Managing Director

JPMORGAN CHASE BANK, as Documentation Agent and Bank

By:    /s/ Robert Traband
Name:  Robert W. Traband
Title: Vice President

THE BANK OF NOVA SCOTIA, as Bank

By:    /s/ N. Bell
Name:  N. Bell
Title: Senior Manager

BARCLAYS BANK PLC, as Bank

By:    /s/ Nicholas A. Bell
Name:  Nicholas A. Bell
Title: Director, Loan Transaction
       Management

THE ROYAL BANK OF SCOTLAND PLC, as Bank

By:    /s/ P. J. Dundee
Name:  Patricia J. Dundee
Title: Senior Vice President

CREDIT LYONNAIS NEW YORK BRANCH, as Bank

By:    /s/ O. Audemard
Name:  Olivier Audemard
Title: Senior Vice President

LEHMAN COMMERICAL PAPER, INC., as Bank

By:    /s/ G. Andrew Keith
Name:  G. Andrew Keith
Title: Authorized Signatory

TORONTO DOMINION (TEXAS), INC., as Bank

By:    /s/ Jill Hall
Name:  Jill Hall
Title: Vice President

WESTLB AG, NEW YORK BRANCH, as Bank

By:    /s/ S. Battinelli
Name:  Sal Battinelli
Title: Managing Director

By:    /s/ Duncan Robertson
Name:  Duncan Robertson
Title: Executive Director

BANK ONE, N.A. (MAIN OFFICE - CHICAGO),
as Bank

By:    /s/ Jeanie Gonzalez
Name:  Jeanie Gonzalez
Title: Director

MERRILL LYNCH BANK USA, as Bank

By:    /s/ Louis Alder
Name:  Louis Alder
Title: Vice President

MORGAN STANLEY SENIOR FUNDING, INC., as
bank

By:    /s/ Jaap Tonckens
Name:  Jaap L. Tonckens
Title: Vice President

BANK OF OKLAHOMA, N.A., as Bank

By:    /s/ Robert Mattax
Name:  Robert D. Mattax
Title: Senior Vice President

BMO NESBITT BURNS FINANCING, INC., as
Bank

By:    /s/ Thomas E. McGraw
Name:  Thomas E. McGraw
Title: Vice President

THE BANK OF TOKYO-MITSUBISHI, LTD.,
HOUSTON AGENCY, as Bank

By:    /s/ K. Glasscock
Name:  K. Glasscock
Title: Vice President and Manager

By:    /s/ J. Fort
Name:  J. Fort
Title: Vice President

Name of Bank                  Lending Office
------------                  --------------
Citibank, N.A.                Citibank, N.A.
                              399 Park Avenue
                              New York, New York 10043

                              Notices:
                              Citibank, N.A.
                              2 Penns Way, Suite 200
                              New Castle, Delaware 19720
                              Telecopier: (302) 894-6120
                              Attn: The Williams Companies, Inc.
                              Account Officer

                              with copies to:
                              Citicorp North America, Inc.
                              1200 Smith Street, Suite 2000
                              Houston, Texas 77002
                              Telecopier: (713) 654-2849
                              Attn: The Williams Companies, Inc.
                              Account Officer

Bank of America, N.A.         Bank of America, N.A.
                              901 Main Street, 14th Floor
                              Dallas, Texas 75202
                              Telecopier: (214) 290-9415
                              Telephone: (214) 209-1228
                              Attn: Marija Salic

                              with copies to:
                              Bank of America, N.A.
                              Bank of America Center
                              700 Louisiana, 8th Floor
                              Houston, Texas 77002
                              Telecopier: (713) 247-7286
                              Telephone: (713) 247-7235
                              Attn: Claire Liu

The Bank of Nova Scotia       The Bank of Nova Scotia
                              600 Peachtree Street, N.E., Suite 2700
                              Atlanta, Georgia 30308
                              Telecopier: (404) 888-8998
                              Telex: 00542319
                              Attn: Robert L. Ahern

                              with copies to:
                              1100 Louisiana, Suite 3000

Name of Bank                  Lending Office
------------                  --------------
                              Houston, Texas 77002
                              Telecopier: (713) 752-2425
                              Telephone: (713) 759-3440
                              Attn:

Bank One, NA                  Bank One, NA
(Chicago)                     1 Bank One Plaza
                              0634, 1 FNP, 10
                              Chicago, Illinois 60670
                              Telephone: (312) 732-5219
                              Telecopier: (312) 732-4840
                              Attn:

JPMorgan Chase Bank           JPMorgan Chase Bank
                              1111 Fannin - 10th Floor
                              Houston, TX 77002
                              Telecopier: (713) 427-6307
                              Telephone: (713) 750-2377
                              Attn: Jamie Kurtz

Credit Lyonnais               Credit Lyonnais New York Branch
New York Branch               1301 Avenue of the Americas
                              New York, New York 10019
                              Telecopier: (713) 759-9766
                              Telephone: (713) 753-8723
                              Attn: Bernadette Archie

Bank of Montreal              Bank of Montreal
                              115 S. LaSalle Street, 11th Floor
                              Chicago, Illinois 60603
                              Telecopier: (312) 750-6061
                              Telephone: (312) 750-4359
                              Attn: Anita Blake

                              BMO Nesbitt Burns Financing, Inc.
                              700 Louisiana, Suite 4400
                              Houston, TX 77002
                              Telecopier: (713) 223-4007
                              Telephone: (713) 546-9750
                              Attn: Cahal Carmody

Morgan Stanley Senior         Morgan Stanley Senior Funding, Inc.
Funding, Inc.                 1585 Broadway
                              New York, New York 10036
                              Telecopier: (212) 507-3663
                              Telephone: (212) 762-2787
                              Attn: Michael O'Hare

Name of Bank                  Lending Office
------------                  --------------
Merrill Lynch Bank USA        Merrill Lynch Bank USA
                              15 West South Temple, Suite 300
                              Salt Lake City, UT 84101
                              Telecopier: (801) 531-7470
                              Telephone: (801) 526-8316
                              Attn: Frank K. Stepan

Barclays Bank PLC             Barclays Bank PLC
                              200 Park Avenue
                              New York, New York 10166
                              Telecopier: (212) 412-7600
                              Telephone: (212) 412-4029
                              Attn: Nicholas Bell

The Bank of Tokyo-            The Bank of Tokyo-Mitsubishi, Ltd.,
Mitsubishi, Ltd.,             Houston Agency
Houston Agency                1100 Louisiana Street, Suite 2800
                              Houston, Texas 77002-5216
                              Telecopier: (713) 655-3855
                              Telephone: (713) 655-3845
                              Attn: J.M. McIntyre

Toronto Dominion (Texas),     Toronto Dominion (Texas), Inc.
Inc.                          909 Fannin Street, 17th Floor
                              Houston, Texas 77010
                              Swift Address: TDOMU S4H
                              Telecopier: (713) 951-9921
                              Attn: Jill Hall

Lehman Commercial Paper,      Lehman Commercial Paper, Inc.
Inc.                          745 7th Avenue, 16th Floor
                              New York, New York 10019
                              Telecopier: (212) 520-0450
                              Telephone: (212) 526-6560
                              Attn: Marie Cowell

Westdeutsche Landesbank       Westdeutsche Landesbank Girozentrale,
Girozentrale, New York        New York Branch
Branch                        1211 Avenue of the Americas
                              New York, New York 10036
                              Telecopier: (212) 852-6307
                              Telephone: (212) 852-6096
                              Attn: Jeffrey S. Davidson

The Royal Bank of Scotland    The Royal Bank of Scotland
                              New York Branch
                              101 Park Avenue, 12th Floor

Name of Bank                  Lending Office
------------                  --------------
                              New York, New York 10178
                              Telecopier: (212) 401-1494
                              Telephone: (212) 401-1406
                              Attn: Sheila Shaw

                              Notices:
                              The Royal Bank of Scotland
                              600 Travis Street, Suite 6070
                              Houston, TX 77002
                              Telecopier: (713) 221-2430
                              Telephone: (713) 221-2423
                              Attn: Patricia Dundee

Bank of Oklahoma, N.A.        Bank of Oklahoma, N.A.
                              BOK Tower 8 SE
                              One Williams Center
                              Tulsa, OK 74172
                              Telecopier: (918) 280-3318
                              Telephone: (918) 588-6675
                              Attn: Laurie Brumbaugh

Name of Borrowers                               Information for Notices
-----------------                               -----------------------
The Williams Companies, Inc.                    The Williams Companies, Inc.
                                                One Williams Center, Suite 5000
                                                Tulsa, Oklahoma 74172
                                                Attention: Patti J. Kastl
                                                Telecopier: (918) 573-2065
                                                Telephone: (918) 573-2172

Northwest Pipeline Corporation                  Northwest Pipeline Corporation
                                                2800 Post Oak Blvd.
                                                Houston, TX 77056
                                                Attention: Jeff P. Heinrichs
                                                Telecopier: (713) 215-2435
                                                Telephone: (713) 215-2356

Transcontinental Gas Pipe Line Corporation      Transcontinental Gas Pipe Line Corporation
                                                2800 Post Oak Blvd.
                                                Houston, TX 77056
                                                Attention: Jeff P. Heinrichs
                                                Telecopier: (713) 215-2435
                                                Telephone: (713) 215-2356

------------------------------------------------------------------------------------------------------------------------
                                                      Revolving Credit    Letter of Credit   LC Participation Percentage
Banks                                                  Commitment ($)      Commitment ($)                (%)
------------------------------------------------------------------------------------------------------------------------
Citibank, N.A                                            90,000,000         400,000,000                 11.250
------------------------------------------------------------------------------------------------------------------------
Bank of America, N.A                                     90,000,000         400,000,000                 11.250
------------------------------------------------------------------------------------------------------------------------
JPMorgan Chase Bank                                      90,000,000                   0                 11.250
------------------------------------------------------------------------------------------------------------------------
The Bank of Nova Scotia                                  60,000,000                   0                  7.500
------------------------------------------------------------------------------------------------------------------------
Barclays Bank plc                                        60,000,000                   0                  7.500
------------------------------------------------------------------------------------------------------------------------
The Royal Bank of Scotland plc                           60,000,000                   0                  7.500
------------------------------------------------------------------------------------------------------------------------
Credit Lyonnais New York Branch                          60,000,000                   0                  7.500
------------------------------------------------------------------------------------------------------------------------
Lehman Commercial Paper, Inc.                            60,000,000                   0                  7.500
------------------------------------------------------------------------------------------------------------------------
Toronto Dominion (Texas), Inc.                           60,000,000                   0                  7.500
------------------------------------------------------------------------------------------------------------------------
WESTLB AG, New York Branch                               35,000,000                   0                  4.375
------------------------------------------------------------------------------------------------------------------------
Bank One, N.A. (Main Office - Chicago)                   35,000,000                   0                  4.375
------------------------------------------------------------------------------------------------------------------------
Merrill Lynch Bank USA                                   20,000,000                   0                  2.500
------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Senior Funding, Inc.                      20,000,000                   0                  2.500
------------------------------------------------------------------------------------------------------------------------
Bank of Oklahoma, N.A                                    20,000,000                   0                  2.500
------------------------------------------------------------------------------------------------------------------------
BMO Nesbitt Burns Financing, Inc.                        20,000,000                   0                  2.500
------------------------------------------------------------------------------------------------------------------------
The Bank of Tokyo-Mitsubishi, Ltd., Houston Agency       20,000,000                   0                  2.500
------------------------------------------------------------------------------------------------------------------------
TOTAL                                                  $800,000,000*                                   100.000
------------------------------------------------------------------------------------------------------------------------

EXHIBIT A
TO
CREDIT AGREEMENT

OPINION OF JAMES J. BENDER, ESQ.
GENERAL COUNSEL OF TWC

EXHIBIT B
TO
CREDIT AGREEMENT

OPINION OF WHITE & CASE, L.L.P.
NEW YORK COUNSEL

EXHIBIT C
TO
CREDIT AGREEMENT

FORM OF TRANSFER AGREEMENT

Dated __________, 20__

Reference is made to the Credit Agreement, dated as of June 6, 2003 (such Credit Agreement, as amended or otherwise modified from time to time, being herein referred to as the "Credit Agreement"), among The Williams Companies, Inc., Northwest Pipeline Corporation, and Transcontinental Gas Pipe Line Corporation, as Borrowers, Citibank, N.A., as Agent for the Banks, Bank of America N.A., as Syndication Agent, the Banks and Issuing Banks parties thereto. Terms defined in the Credit Agreement are used herein with the same meaning.

___________________ (the "Assignor") and ________________ (the "Assignee") agree as follows:

1. The Assignor hereby sells and assigns to the Assignee, without recourse, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to all of the Assignor's rights and obligations under the Credit Agreement and the other Credit Documents executed in connection therewith as of the date hereof equal to the percentage interest specified on Schedule 1 hereto of all outstanding rights and obligations under the Credit Agreement. After giving effect to such sale and assignment, the Assignee's and Assignor's respective Letter of Credit Commitments and LC Participation Percentage will be as set forth in Schedule 1.

2. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement, the other Credit Documents or other instrument or document furnished pursuant thereto or in connection therewith, the perfection, existence, sufficiency or value of any Collateral, guaranty or insurance or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant thereto or in connection therewith; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrowers or any other Person or the performance or observance by the Borrowers or any other Person of any of their respective obligations under the Credit Agreement, the other Credit Documents or any other instrument or document furnished pursuant thereto or in connection therewith.

3. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 4.1(e) of the Credit Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Transfer

Agreement; (ii) agrees that it will, independently and without reliance upon the Agent, any Issuing Bank, the Assignor, any other Bank and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, any other Credit Document, or any other instrument or document; (iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes each of the Agent and the Collateral Agent, respectively, to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement as are delegated to the Agent, respectively, by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Bank; and (vi) specifies as its Lending Office (and address for notices) the office set forth beneath its name on the signature pages hereof.

4. Following the execution of this Transfer Agreement by the Assignor and the Assignee, this Transfer Agreement will be delivered to the Agent for acceptance and recording by the Agent. The effective date of this Transfer Agreement (the "Effective Date") shall be the date of acceptance thereof by the Agent, unless otherwise specified on Schedule 1 hereto.

5. Upon such acceptance and recording by the Agent, as of the Effective Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Transfer Agreement, have the rights and obligations of a Bank thereunder and under the other Credit Documents and (ii) the Assignor shall, to the extent provided in this Transfer Agreement, relinquish its rights and be released from its obligations under the Credit Agreement and under the other Credit Documents.

6. Upon such acceptance and recording by the Agent, from and after the Effective Date, the Agent shall make all payments under the Credit Agreement and the other instruments or documents furnished pursuant thereto or in connection therewith in respect of the interest assigned hereby (including all payments of principal, interest and fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement and the other instruments or documents furnished pursuant thereto or in connection therewith for periods prior to the Effective Date directly between themselves.

7. This Transfer Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

8. This Transfer Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of Schedule 1 to this Transfer Agreement by telecopier shall be as effective as delivery of a manually executed counterpart of this Transfer Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Transfer Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution being made on Schedule 1 hereto.

Schedule 1 to Transfer Agreement

Section 1.

LC Participation Percentage interest assigned:                    ____________%

Assignee's LC Participation Percentage interest before giving
effect to this Transfer Agreement:                                ____________%

Assignee's LC Participation Percentage interest after giving
effect to this Transfer Agreement:                                ____________%

Assignor's remaining LC Participation Percentage interest after
giving effect to this Transfer Agreement:                         ______ _____%

Section 2.

Letter of Credit Commitment interest assigned:                    $___________

Assignee's Letter of Credit Commitment before giving effect
to this Transfer Agreement:                                       $___________

Assignee's Letter of Credit Commitment after giving effect to
this Transfer Agreement:                                          $___________

Assignor's remaining Letter of Credit Commitment after
giving effect to this Transfer Agreement:                         $___________

Section 3.

Effective Date: _____________________, 20____

[NAME OF ASSIGNOR], as Assignor

By:_________________________ Name:

Title:
Dated:

[NAME OF ASSIGNEE], as Assignee

By:_________________________
Name:
Title:
Dated:

Lending Office (and address for notices):

[Address]

Approved this ___ day of ______, _______

THE WILLIAMS COMPANIES, INC.

By:________________________
Name:
Title:

Approved this ___ day of ______, _______

[NAME OF [ISSUING BANK][BANK]], as [Issuing Bank][Bank]

By:________________________
Name:
Title:

Approved this ___ day of ______, _______

CITIBANK, N.A., as Agent

By:________________________
Name:
Title:

EXHIBIT D-1
TO
CREDIT AGREEMENT

FORM OF NOTICE OF LETTER OF CREDIT

[Date]

Citibank, N.A., as Agent
for the Banks parties to the Credit
Agreement referred to below
399 Park Avenue
New York, New York 10043

Attention: Williams Account Officer

Ladies and Gentlemen:

The undersigned, The Williams Companies, Inc. Northwest Pipeline Corporation, and Transcontinental Gas Pipeline Corporation (the "Borrowers"), (a) refer to that certain Credit Agreement, dated as of June 6, 2003 (as amended or otherwise modified from time to time, the "Credit Agreement"; the terms defined therein and not defined herein being used herein as therein defined), among The Williams Companies, Inc., Northwest Pipeline Corporation, Transcontinental Gas Pipe Line Corporation, as Borrowers, Citibank, N.A., as Agent and Collateral Agent for the Banks, Bank of America N.A., as Syndication Agent, the Banks and Issuing Banks parties thereto and Citigroup Global Markets Inc., as Co-Lead Arrangers; (b) hereby gives you notice, irrevocably, pursuant to Section 2.1 of the Credit Agreement that the undersigned hereby requests _____________ (the "Issuing Bank") to issue an irrevocable Letter of Credit as set forth below in such language as the Issuing Bank may deem appropriate and (c) in that connection sets forth below the information relating to such Letter of Credit (the "Letter of Credit") as required by Section 2.1 of the Credit Agreement:

(i) The Business Day upon which the Letter of Credit will be issued is ______________, 20____ (the "Issuance Date").

(ii) The account party for the Letter of Credit is the ___________.

(iii) Attached hereto as Exhibit A are the proposed terms of the Letter of Credit (including the beneficiary thereof and the nature of the transactions or obligations proposed to be supported thereby).

The undersigned hereby certifies that each of the representations and warranties pursuant to Section 3.2 of the Credit Agreement are true on the date hereof, and will be true on the date of the Issuance Date.

Very truly yours,

[THE WILLIAMS COMPANIES, INC. /
NORTHWEST PIPELINE CORPORATION /
TRANSCONTINENTAL GAS PIPELINE
CORPORATION]

By:_____________________________
Name:___________________________
Title:__________________________

cc: Citicorp North America, Inc.
1200 Smith Street, Suite 2000
Houston, Texas 77002
Attn: The Williams Companies, Inc. Account Officer

[Issuing Bank]

EXHIBIT D-2
TO
CREDIT AGREEMENT

FORM OF NOTICE OF REVOLVING CREDIT BORROWING

[Date]

Citibank, N.A., as Agent
for the Banks parties to the Credit
Agreement referred to below
399 Park Avenue
New York, New York 10043

ATTENTION: The Williams Companies, Inc. Account Officer

Ladies and Gentlemen:

The undersigned, ____________________ (the "Borrower"), (a) refers to the Credit Agreement, dated as of June 6, 2003 (as may be further amended, modified, supplemented, renewed, extended or restated from time to time, the "Credit Agreement"; the terms defined therein and not defined herein being used herein as therein defined), by and among the undersigned, [The Williams Companies, Inc.,][Northwest Pipeline Corporation,][Transcontinental Gas Pipe Line Corporation,] certain Banks parties thereto, Citibank, N.A., as Administrative Agent and Collateral Agent, Bank of America N.A., as Syndication Agent, Citibank, N.A. and Bank of America N.A., as Issuing Banks, Citigroup Global Markets Inc. and Banc of America Securities LLC, as Co-Lead Arrangers;
(b) hereby gives you notice, irrevocably, pursuant to Section 2.3(a) of the Agreement that the undersigned hereby requests a Revolving Credit Borrowing under the Agreement and (c) in that connection sets forth below the information relating to such Revolving Credit Borrowing (the "Proposed Revolving Credit Borrowing") as required by Section 2.3 (a) of the Credit Agreement:

(i) The Business Day of the Proposed Revolving Credit Borrowing is __________, 20____.

(ii) The type of Revolving Credit Advance comprising the Proposed Revolving Credit Borrowing is a [Base Rate Advance]
[Eurodollar Rate Advance].

(iii) The aggregate amount of the Proposed Revolving Credit Borrowing is $__________________.

(iv) [The Interest Period for each Revolving Credit Advance made as part of the Proposed Revolving Credit Borrowing is __________ months.]

The undersigned hereby certifies that each of the representations and warranties pursuant to Section 3.2 are true on the date hereof, and will be true on the date of the Proposed Revolving Credit Borrowing.

Very truly yours,

[BORROWER]

By:_______________________________
Name:_____________________________
Title:____________________________

cc: Citicorp North America, Inc.
1200 Smith Street, Suite 2000
Houston, Texas 77002
Attn: The Williams Companies, Inc. Account Officer

EXHIBIT E
TO
CREDIT AGREEMENT

FORM OF SECURITY AGREEMENT

EXHIBIT F
TO
CREDIT AGREEMENT

FORM OF NOTE

U.S.$_______________ Dated: _____________, 200_

FOR VALUE RECEIVED, the undersigned, ____________, a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of _________________________ (the "Bank") for the account of its Applicable Lending Office (as defined in the Credit Agreement referred to below) on the Termination Date (as defined in the Credit Agreement referred to below) the principal sum of U.S.$___________ or, if less, the aggregate principal amount of the Revolving Credit Advances made by the Bank to the Borrower pursuant to the Credit Agreement, dated as of June 6, 2003 (as amended or otherwise modified from time to time, the "Credit Agreement"; the terms defined therein and not defined herein being used herein as therein defined), among The Williams Companies, Inc., Northwest Pipeline Corporation, Transcontinental Gas Pipe Line Corporation, as Borrowers, Citibank, N.A., as Agent and Collateral Agent for the Banks, Bank of America N.A., as Syndication Agent, the Banks and Issuing Banks parties thereto and Citigroup Global Markets Inc. and Banc of America Securities LLC, as Co-Lead Arrangers) outstanding on the Termination Date.

The Borrower promises to pay interest on the unpaid principal amount of each Revolving Credit Advance from the date of such Revolving Credit Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement. Both principal and interest in respect of each Revolving Credit Advance are payable in lawful money of the United States of America to the Agent at its account maintained at 388 Greenwich Street, New York, New York 10013, in same day funds.

Each Revolving Credit Advance owing to the Bank by the Borrower pursuant to the Credit Agreement, and all payments made on account of principal thereof, shall be recorded by the Bank and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Promissory Note.

This Promissory Note is one of the Notes referred to in, and is entitled to the benefits of, the Credit Agreement. The Credit Agreement, among other things, (i) provides for the making of Revolving Credit Advances by the Bank to the Borrower from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Revolving Credit Advance being evidenced by this Promissory Note and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. Capitalized terms used herein which are not defined herein and are defined in the Credit Agreement are used herein as therein defined.

The Borrower hereby waives presentment, demand, protest, notice of intent to accelerate, notice of acceleration and any other notice of any kind, except as provided in the

Credit Agreement. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights.

This Promissory Note shall be governed by, and construed in accordance with, the laws of the State of New York.

[BORROWER'S NAME]

By________________
Name:_____________
Title:____________

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                  AMOUNT OF         AMOUNT OF
               REVOLVING CREDIT   PRINCIPAL PAID   UNPAID PRINCIPAL   NOTATION
    DATE           ADVANCE          OR PREPAID          BALANCE        MADE BY
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EXHIBIT 10.4

EXECUTION COPY

SECURITY AGREEMENT

Dated as of June 6, 2003

Among

THE WILLIAMS COMPANIES, INC.

as Grantor

CITIBANK, N.A.

as Collateral Agent

and

CITIBANK, N.A.

as Securities Intermediary

SECTION                                                                                                PAGE
Section 1.   Grant of Security.................................................................          2

Section 2.   Security for Obligations..........................................................          2

Section 3.   The Collateral Account............................................................          3

Section 4.   Maintaining the Collateral........................................................          4

Section 5.   Investing of Amounts in the Collateral Account....................................          4

Section 6.   Release of Amounts................................................................          5

Section 7.   Representations and Warranties....................................................          5

Section 8.   Further Assurances................................................................          6

Section 9.   Post-Closing Changes..............................................................          7

Section 10.  Other Liens.......................................................................          7

Section 11.  Collateral Agent Appointed Attorney-in-Fact.......................................          7

Section 12.  The Collateral Agent's Duties.....................................................          7

Section 13.  Remedies..........................................................................          8

Section 14.  Indemnity and Expenses............................................................          8

Section 15.  Amendments; Waivers...............................................................          9

Section 16.  Notices, Etc......................................................................          9

Section 17.  Continuing Security Interest; Assignments under the Credit Agreement..............          9

Section 18.  Termination.......................................................................         10

Section 19.  Execution in Counterparts.........................................................         10

Section 20.  Governing Law.....................................................................         10

Schedules I      -   Chief Executive Office, Type Of Organization, Jurisdiction
                     Of Organization And Organizational Identification Number

                               SECURITY AGREEMENT

                  SECURITY AGREEMENT dated as of June 6, 2003 (as may be

amended, modified, supplemented, renewed, extended or restated from time to time, this "AGREEMENT") among THE WILLIAMS COMPANIES, INC., a Delaware corporation (the "GRANTOR"), CITIBANK, N.A., as collateral agent (in such capacity, together with any successor collateral agent appointed pursuant to Article VII of the Credit Agreement (as hereinafter defined), the "COLLATERAL AGENT") for the Banks, the Issuing Banks, the Agent (each as defined in the Credit Agreement) and the Collateral Agent (the "SECURED PARTIES") and CITIBANK, N.A., as securities intermediary of Grantor (in such capacity, the "SECURITIES INTERMEDIARY").

PRELIMINARY STATEMENTS.

(1) The Grantor, Transcontinental Gas Pipe Line Corporation and Northwest Pipeline Corporation have entered into a Credit Agreement dated as of June 6, 2003 (said Agreement, as it may hereafter be amended, amended and restated, supplemented or otherwise modified from time to time, being the "CREDIT AGREEMENT") with the Secured Parties.

(2) Pursuant to the Credit Agreement, the Grantor is entering into this Agreement in order to grant to the Collateral Agent for the ratable benefit of the Secured Parties a security interest (the "SECURITY INTEREST") in the Collateral (as hereinafter defined) to secure the Secured Obligations (as hereinafter defined).

(3) The Grantor has opened Account No. 795241 (the "COLLATERAL ACCOUNT"), with the Securities Intermediary at its office at 111 Wall Street, 14th Floor, New York, NY 10005, in the name of the Grantor but under the control (within the meaning of Section 8-106 of the UCC (as defined below)) of the Collateral Agent and subject to the terms of this Agreement.

(4) The Securities Intermediary has agreed to calculate, on a daily basis, the mark-to-market value of the securities held in the Collateral Account and to provide such calculations to any Secured Party, as such Secured Party may reasonably request from time to time.

(5) It is a condition precedent to the making of Revolving Credit Advances by the Banks and the issuance of Letters of Credit by the Issuing Banks under the Credit Agreement that the Grantor shall have granted the assignment and security interest and made the pledge and assignment contemplated by this Agreement.

(6) The Grantor will derive substantial direct and indirect benefit from the transactions contemplated herein and by the other Credit Documents.

(7) Terms defined in the Credit Agreement and not otherwise defined in this Agreement are used in this Agreement as defined in the Credit Agreement. Further, unless otherwise defined in this Agreement or in the Credit Agreement, terms defined in Article 8 or 9 of the UCC (as defined below) and/or in the Federal Book Entry Regulations (as defined below) are used in this Agreement as such terms are defined in such Article 8 or 9 and/or the Federal Book Entry Regulations. "UCC" means the Uniform Commercial Code as in effect, from time

to time, in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, "UCC" means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority. The term "FEDERAL BOOK ENTRY REGULATIONS" means (a) the federal regulations contained in Subpart B ("Treasury/Reserve Automated Debt Entry System (TRADES)") governing book-entry securities consisting of U.S. Treasury bonds, notes and bills and Subpart D ("ADDITIONAL PROVISIONS") of 31 C.F.R. Part 357, 31 C.F.R. Section 357.2,
Section 357.10 through Section 357.14 and Section 357.41 through Section 357.44 and (b) to the extent substantially identical to the federal regulations referred to in clause (a) above (as in effect from time to time), the federal regulations governing other book-entry securities.

NOW, THEREFORE, in consideration of the premises and in order to induce the Banks to make Revolving Advances and the Issuing Banks to issue Letters of Credit under the Credit Agreement, the Grantor hereby agrees with the Collateral Agent for the ratable benefit of the Secured Parties as follows:

Section 1. Grant of Security. The Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured Parties, a security interest in the Grantor's right, title and interest in and to the following (collectively, the "COLLATERAL"):

(a) the Collateral Account and all funds and financial assets from time to time credited thereto (including, without limitation, Government Securities (as hereinafter defined)), all interest, dividends, distributions, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such funds and financial assets, and all certificates and instruments, if any, from time to time representing or evidencing the Collateral Account;

(b) all interest, dividends, distributions, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the then existing Collateral.

"GOVERNMENT SECURITIES" means any of the following and each having a maturity of not greater than 2 years from the date of acquisition thereof: (i) United States treasury securities, including bills, notes and bonds; and (ii) securities of any agency of the Government of the United States that are explicitly guaranteed by the full faith and credit of the Government of the United States.

Section 2. Security for Obligations. This Agreement secures the payment of all obligations of the Grantor and the Borrowers, now or hereafter existing under the Credit Documents, whether direct or indirect, absolute or contingent, and whether for principal, reimbursement obligations, interest, fees, premiums, penalties, indemnifications, contract causes of action, costs, expenses or otherwise (all such obligations being the "SECURED OBLIGATIONS"). Without limiting the generality of the foregoing, this Agreement secures, as to each Borrower, the payment of all amounts that constitute part of the Secured Obligations and would be owed by such Borrower to any Secured Party under the Credit Documents but for the fact that they are

unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving a Borrower.

Section 3. The Collateral Account. The Securities Intermediary represents to and agrees with the Grantor and the Collateral Agent that:

(a) The Securities Intermediary maintains the Collateral Account in the name of, and for the benefit of, the Grantor, and all property held by the Securities Intermediary for the account of the Grantor is, and will continue to be, credited to the Collateral Account and maintained therein from time to time.

(b) The Collateral Account is a "securities account" as such term is used in Section 8-501(a) of the UCC and, in accordance therewith, (i) the Securities Intermediary is the securities intermediary with respect to the property credited from time to time to the Collateral Account, (ii) the Grantor is the entitlement holder with respect to the property credited from time to time to the Collateral Account and (iii) the Securities Intermediary agrees to treat the Grantor as entitled to exercise the rights that comprise the financial assets credited to the Collateral Account.

(c) The Securities Intermediary will comply with all notifications it receives directing it to invest, withdraw, transfer or redeem any property in the Collateral Account (each, an "ENTITLEMENT ORDER") originated by the Collateral Agent without further consent by the Grantor or any other person; provided that, without limiting the absolute obligation of the Securities Intermediary to comply with any Entitlement Order originated by the Collateral Agent, the Collateral Agent agrees with the Grantor that the Collateral Agent will not originate any Entitlement Order except in accordance with the terms of this Agreement; provided, further, that promptly thereafter, the Securities Intermediary shall give the Grantor written notice of the same at its address specified in the Credit Agreement.

(d) The Securities Intermediary shall comply with Entitlement Orders originated by the Grantor (subject to the terms of this Agreement); provided, however, if the Securities Intermediary receives a notice from the Collateral Agent that it will exercise exclusive control over the Collateral Account upon a Specified Event of Default (as hereinafter defined), the Securities Intermediary shall cease complying with Entitlement Orders or other directions concerning the Collateral Account, originated by the Grantor; provided, further, that in the event of any conflict between any Entitlement Order originated by the Grantor and any Entitlement Order originated by the Collateral Agent, the Entitlement Order originated by the Collateral Agent will prevail.

(e) The Securities Intermediary will treat all cash, securities and other property credited to the Collateral Account as "financial assets" as such term is defined in Section 8-102(a)(9) of the UCC.

(f) The State of New York is, and will continue to be, the Securities Intermediary's jurisdiction for purposes of Section 8-110(e)(2) of the UCC so long as the Security Interest shall remain in effect.

Section 4. Maintaining the Collateral. So long as any Revolving Credit Advance or any other obligation of the Grantor or any Borrower under any Credit Document shall remain unpaid, any Letter of Credit or Letter of Credit Liability shall be outstanding or any Bank shall have any Commitment:

(a) The Grantor will maintain all Collateral only with the Collateral Agent or the Securities Intermediary (or such other Person acceptable to the Collateral Agent and the Grantor that complies with the provisions herein which has agreed, in a record authenticated by the Grantor, the Collateral Agent and such Person, to (i) comply with instructions originated by the Collateral Agent directing the disposition of funds in the Collateral Account without the further consent of the Grantor and (ii) waive or subordinate in favor of the Collateral Agent all claims of such Person (including, without limitation, claims by way of a security interest, lien or right of setoff or right of recoupment) to the Collateral, which authenticated record shall be in form and substance satisfactory to the Collateral Agent and the Grantor).

(b) The Collateral Agent shall, at the direction of the Grantor, at any time and without notice to, or consent from, any Bank, and notwithstanding the occurrence or continuance of any Event of Default, transfer, or direct the transfer of, funds from the Collateral Account to the Agent to satisfy any Borrower's Obligations under the Credit Agreement whether or not such Obligations are then due and payable.

(c) The Collateral Agent shall, at the request of the Agent, at any time and without consent from the Grantor or any Borrower, transfer, or direct the transfer of, funds from the Collateral Account to satisfy any Borrower's obligations under the Credit Documents which are then due and payable (provided that promptly thereafter the Collateral Agent shall give the Grantor written notice of the same) if an Event of Default shall have occurred and be continuing.

(d) Subject to Sections 4(b) and 6(d) hereof, upon the occurrence and continuance of an Event of Default under Section 6.1(d) or (f) of the Credit Agreement (each a "SPECIFIED EVENT OF DEFAULT"), the Collateral Agent shall have sole right to direct the investment and disposition of funds with respect to the Collateral Account and it shall be a term and condition of the Collateral Account, notwithstanding any term or condition to the contrary in any other agreement relating to the Collateral Account that no amount (including, without limitation, interest credited thereto) will be paid or released to or for the account of, or withdrawn by or for the account of, the Grantor, any Borrower or any other Person from the Collateral Account.

(e) Contemporaneously herewith, the Grantor shall cause a certificate of incumbency to be executed in the form of Exhibit A hereto (such certificate may be amended or modified by the Grantor from time to time by adding or deleting the names of persons authorized to act on behalf of the Grantor with respect to the Collateral Account).

Section 5. Investing of Amounts in the Collateral Account. So long as no Specified Event of Default shall have occurred and be continuing and subject to the provisions of

Sections 4, 6 and 18 hereof, the Grantor will be permitted to (a) invest, or direct the Securities Intermediary to invest, amounts received with respect to the Collateral Account in Government Securities, and only Government Securities, and credited to the Collateral Account, as the Grantor may select and (b) invest interest paid on the Government Securities referred to in clause (a) above, and reinvest other proceeds of any such Government Securities that may mature or be sold, in each case in such Government Securities credited in the same manner. Interest and proceeds that are not invested or reinvested in Government Securities as provided above shall be deposited and held in the Collateral Account (such uninvested amounts shall not earn or accrue interest thereon). In addition, so long as no Specified Event of Default shall have occurred and be continuing, the Grantor shall have the right at any time to exchange, or direct the Securities Intermediary to exchange, such Government Securities for similar Government Securities of smaller or larger determinations, or for other Government Securities, credited to the Collateral Account.

Section 6. Release of Amounts. So long as (x) no Specified Event of Default shall have occurred and be continuing, and (y) the mark-to-market value of the Collateral shall exceed the Collateral Coverage Requirement (i) by not less than $1,000,000 at any time, and upon two Business Days prior written notice by the Grantor to the Collateral Agent, or (ii) on the last Business Day of each month, if requested by the Grantor, then the Collateral Agent shall immediately transfer, or direct the Securities Intermediary to transfer, such excess amount, or a portion thereof as may be requested by the Grantor, to the Grantor or at its order.

(a) So long as (x) no Specified Event of Default shall have occurred and be continuing, and (y) upon two Business Days prior written notice by the Grantor to the Collateral Agent that (i) any outstanding Revolving Credit Advance has been repaid or (ii) any outstanding Letter of Credit has expired and is undrawn, then the Collateral Agent shall immediately transfer, or direct the Securities Intermediary to transfer, such amount in excess of the Collateral Coverage Requirement, or a portion thereof as may be requested by the Grantor, as is then on deposit in the Collateral Account to the Grantor or at its order.

(b) Upon the occurrence of a Mandatory Prepayment Event and unless the Grantor has otherwise paid all then outstanding obligations of the Grantor with respect to the Revolving Credit Advances, the Collateral Agent shall, at the direction of the Agent, pay and release, or direct the Securities Intermediary to pay and release, to the Agent to be applied to all then outstanding obligations of the Grantor or any Borrower with respect to the Revolving Credit Advances, such amount as is then on deposit in the Collateral Account.

(c) Notwithstanding Sections 6(a) and 6(b), and whether or not an Event of Default has occurred and is continuing, upon two Business Days prior written notice by the Grantor to the Collateral Agent, the Collateral Agent shall immediately transfer, or direct the Securities Intermediary to transfer, such amount in excess of 107.5% of the Total Credit Exposure, or a portion thereof as may be requested by the Grantor, as is then on deposit in the Collateral Account to the Grantor or at its order.

Section 7. Representations and Warranties. The Grantor represents and warrants as follows:

(a) The Grantor's exact legal name, as defined in Section 9-503(a) of the UCC, is correctly set forth in Schedule 1 hereto. The Grantor is located (within the meaning of Section 9-307 of the UCC) and has its chief executive office in the state or jurisdiction set forth in Schedule I hereto. The information set forth in Schedule I hereto with respect to the Grantor is true and accurate in all respects. The Grantor has not previously changed its name, location, chief executive office, type of organization, jurisdiction of organization or organizational identification number from those set forth in Schedule I within the previous five years of the date hereof.

(b) The Grantor is the legal and beneficial owner of the Collateral free and clear of any lien, claim, option or right of others, except for the security interest created under this Agreement. No effective financing statement or other instrument similar in effect covering all or any part of such Collateral or listing the Grantor or any trade name of the Grantor as debtor is on file in any recording office, except such as may have been filed in favor of the Collateral Agent relating to the Credit Documents.

(c) All filings and other actions necessary to perfect the security interest in the Collateral of the Grantor created under this Agreement have been duly made or taken and are in full force and effect, and this Agreement creates in favor of the Collateral Agent for the benefit of the Secured Parties a valid and, together with such filings and other actions, perfected first priority security interest in the Collateral of the Grantor, securing the payment of the Secured Obligations.

(d) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or any other third party is required for (i) the grant by the Grantor of the security interest granted hereunder or for the execution, delivery or performance of this Agreement by the Grantor, or (ii) the perfection or maintenance of the security interest created hereunder (including the first priority nature of such security interest), except for the filing of financing and continuation statements under the UCC, which financing statements have been duly filed and are in full force and effect.

(e) The aggregate mark-to-market value of all Collateral in the Collateral Account for which the Collateral Agent has a first-priority perfected security interest is equal to or greater than the Collateral Coverage Requirement as of the date hereof.

Section 8. Further Assurances. The Grantor agrees that from time to time, at the expense of the Grantor, it will promptly execute and deliver, or otherwise authenticate, all further instruments and documents, and take all further action that may be necessary or desirable, or that the Collateral Agent may reasonably request, in order to perfect and protect the security interest granted or purported to be granted by the Grantor hereunder or to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to the Collateral. Without limiting the generality of the foregoing, the Grantor will promptly with respect to Collateral: (i) execute or authenticate and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Collateral Agent may reasonably request, in order to perfect and preserve the security interest granted or purported to be granted by the Grantor hereunder; and (ii) deliver to the Collateral

Agent evidence that all other action that the Collateral Agent may deem reasonably necessary or desirable in order to perfect and protect the security interest created by the Grantor under this Agreement has been taken.

(a) The Grantor hereby authorizes the Collateral Agent to file one or more financing or continuation statements, and amendments thereto, including, without limitation, one or more financing statements indicating that such financing statements cover the Collateral (or words of similar effect) of the Grantor, in each case without the signature of the Grantor. A photocopy or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law. The Grantor ratifies its authorization for the Collateral Agent to have filed such financing statements, continuation statements or amendments filed prior to the date hereof.

(b) The Grantor will furnish to the Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with such Collateral as the Collateral Agent may reasonably request in writing, all in reasonable detail.

Section 9. Post-Closing Changes. The Grantor will not change its name, type of organization, jurisdiction of organization, organizational identification number or location from those set forth in Section 7(a) of this Agreement without first giving at least 15 Business Days' prior written notice to the Collateral Agent and taking all action required by the Collateral Agent for the purpose of perfecting or protecting the security interest granted by this Agreement. If the Grantor does not have an organizational identification number and later obtains one, it will forthwith notify the Collateral Agent of such organizational identification number.

Section 10. Other Liens. The Grantor agrees that it will not create or permit to suffer to exist any lien upon or with respect to any of the Collateral except for the pledge, assignment and security interest created under this Agreement.

Section 11. Collateral Agent Appointed Attorney-in-Fact. The Grantor hereby irrevocably appoints the Collateral Agent the Grantor's attorney-in-fact, with full authority in the place and stead of the Grantor and in the name of the Grantor or otherwise, from time to time upon the occurrence and during the continuance of an Event of Default, in the Collateral Agent's discretion, to take any action and to execute any instrument that the Collateral Agent may deem necessary to accomplish the purposes of this Agreement.

Section 12. The Collateral Agent's Duties. The powers conferred on the Collateral Agent hereunder are solely to protect the Secured Parties' interest in the Collateral and shall not impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Collateral, as to ascertaining or taking action with respect to exchanges, maturities, tenders or other matters relative to any Collateral, whether or not any Secured Party has or is deemed to have knowledge of such matters. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its possession if such Collateral is accorded treatment substantially equal to that which it accords its own property.

Section 13. Remedies. If any Event of Default shall have occurred and be continuing:

(a) The Collateral Agent may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party upon default under the UCC (whether or not the UCC applies to the affected Collateral) and also may: (i) subject to
Section 13(b), exercise any and all rights and remedies of the Grantor under or in connection with the Collateral, or otherwise in respect of the Collateral, including, without limitation, withdraw, or cause or direct the withdrawal, of all funds with respect to the Collateral and
(ii) exercise all other rights and remedies with respect to the other Collateral, including, without limitation, those set forth in Section 9-607 of the UCC.

(b) Any cash held by or on behalf of the Collateral Agent and all cash proceeds received by or on behalf of the Collateral Agent in respect of any collection from, or other realization upon all or any part of the Collateral shall be held by the Collateral Agent as collateral for, and/or then or at any time thereafter applied (after payment of any amounts payable to the Collateral Agent pursuant to
Section 3 hereof) in whole or in part by the Collateral Agent for the ratable benefit of the Secured Parties against, all or any part of the Secured Obligations, in the following manner:

(i) first, paid to the Collateral Agent, the Securities Intermediary and the Agent for any amounts then owing to the Collateral Agent, the Securities Intermediary and the Agent pursuant to Section 8.4 of the Credit Agreement or otherwise under the Credit Documents, ratably in accordance with such respective amounts then owing to the Collateral Agent, the Securities Intermediary and the Agent; and

(ii) second, ratably paid to the Banks and the Issuing Banks or any amounts then owing to them under the Credit Documents ratably in accordance with such respective amounts then owing to such Banks and Issuing Banks.

Any surplus of such cash or cash proceeds held by or on the behalf of the Collateral Agent and remaining after payment in full of all the Secured Obligations shall be paid over to the Grantor or to whomsoever may be lawfully entitled to receive such surplus.

(c) The Collateral Agent may, without notice to the Grantor except as required by law and at any time or from time to time, charge, set-off and otherwise apply all or any part of the Secured Obligations against any funds held with respect to the Collateral.

Section 14. Indemnity and Expenses. The Grantor agrees to indemnify, defend and save and hold harmless each Secured Party and the Securities Intermediary and each of their affiliates and their respective officers, directors, employees, agents and advisors (each, an "INDEMNIFIED PARTY") from and against, and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or resulting from this Agreement (including, without

limitation, enforcement of this Agreement), except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party's gross negligence or willful misconduct or the gross negligence or willful misconduct of such Indemnified Party's affiliates, officers, directors, employees, agents or advisors.

(a) The Grantor will upon demand pay to the Collateral Agent and the Securities Intermediary the amount of any and all reasonable expenses, including, without limitation, the reasonable fees and expenses of its counsel, that the Collateral Agent and the Securities Intermediary may incur in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from or other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of the Collateral Agent or the other Secured Parties hereunder or (iv) the failure by the Grantor to perform or observe any of the provisions hereof.

Section 15. Amendments; Waivers. No amendment or waiver of any provision of this Agreement, and no consent to any departure by the Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Collateral Agent and the Securities Intermediary, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of the Collateral Agent or any other Secured Party or the Securities Intermediary 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 such right preclude any other or further exercise thereof or the exercise of any other right.

Section 16. Notices, Etc. All notices and other communications provided for hereunder shall be either (i) in writing (including telegraphic, telecopier or telex communication) and mailed, telegraphed, telecopied, telexed or otherwise delivered or (ii) by electronic mail (if electronic mail addresses are designated as provided below) confirmed immediately in writing, in the case of the Borrowers or the Collateral Agent, addressed to it at its address specified in the Credit Agreement, if to the Securities Intermediary, at its address specified on its signature page hereto or, as to any party, at such other address as shall be designated by such party in a written notice to the other parties. All such notices and other communications shall, when mailed, telegraphed, telecopied, telexed, sent by electronic mail or otherwise, be effective when deposited in the mails, delivered to the telegraph company, telecopied, confirmed by telex answerback, sent by electronic mail and confirmed in writing, or otherwise delivered (or confirmed by a signed receipt), respectively, addressed as aforesaid; except that notices and other communications to the Collateral Agent or the Securities Intermediary shall not be effective until received by the Collateral Agent or the Securities Intermediary, as the case may be. Delivery by telecopier of an executed counterpart of any amendment or waiver of any provision of this Agreement or Schedule hereto shall be effective as delivery of an original executed counterpart thereof.

Section 17. Continuing Security Interest; Assignments under the Credit Agreement. This Agreement shall create a continuing security interest in the Collateral and shall (a) remain in full force and effect until the latest of (i) the payment in full in cash of the Secured Obligations, (ii) the Termination Date and (iii) the termination or expiration of all Letters of

Credit, (b) be binding upon the Grantor, its successors and assigns and (c) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Secured Parties and their respective successors, transferees and assigns. Without limiting the generality of the foregoing clause
(c), any Bank may assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement in accordance therewith (including, without limitation, all or any portion of its Commitments, the Revolving Credit Advances owing to it and the Note or Notes, if any, held by it) to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Bank herein or otherwise, in each case as provided in Section 8.6 of the Credit Agreement.

Section 18. Termination. Upon the latest of (i) the payment in full in cash of the Secured Obligations, (ii) the Termination Date and (iii) the termination or expiration of all Letters of Credit, the security interest granted hereby shall terminate and all rights to the Collateral shall revert to the applicable Grantor. Upon any such termination, the Collateral Agent will, at the Grantor's expense, execute and deliver to the Grantor such documents as the Grantor shall reasonably request to evidence such termination.

Section 19. Execution in Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by telecopier shall be effective as delivery of an original executed counterpart of this Agreement.

Section 20. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

[Signatures follow.]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

THE WILLIAMS COMPANIES, INC., as Grantor

By: /s/  Steven J. Malcolm
Name:  Steven J. Malcolm
Title: Chairman of the Board

CITIBANK, N.A., as Collateral Agent and Secured Party

By: /s/  Gordon H. DeKuyper
Name:  Gordon H. DeKuyper
Title: Vice President

CITIBANK, N.A., as Securities Intermediary

By: /s/ Camille Tomao
Name: Camille Tomao
Title: Vice President

Address:

111 Wall Street, 14th Floor
New York, New York 10055

                    CHIEF EXECUTIVE           TYPE OF         JURISDICTION OF   ORGANIZATIONAL
   GRANTOR              OFFICE              ORGANIZATION        ORGANIZATION       I.D. NO.
---------------   -------------------       ------------      ---------------   --------------
The Williams      One Williams Center
Companies, Inc.   Tulsa, OK  74172          Corporation           Delaware          2116534

EXHIBIT A TO THE
SECURITY AGREEMENT

CERTIFICATE OF INCUMBENCY

Reference is made to (i) the credit agreement, dated as of June 6, 2003 (as may be further amended, modified, supplemented, renewed, extended or restated from time to time, the "CREDIT AGREEMENT"), by and among The Williams Companies, Inc. (the "COMPANY"), Northwest Pipeline Corporation, Transcontinental Gas Pipe Line Corporation, each a Delaware corporation, as borrowers, the banks, issuing banks, financial institutions and other institutional lenders party thereto, and Citibank, N.A., as agent and collateral agent ("CITIBANK"), and (ii) the security agreement, dated as of June 6, 2003 (the "SECURITY AGREEMENT"), made by the Company to Citibank.

The undersigned certifies that s/he is the [INSERT TITLE] of the Company, and as such s/he is authorized to execute this certificate and further certifies that the following persons have been elected or appointed, are qualified, and are now acting in the capacity or capacities indicated below, and that the signatures set forth opposite their respective names are their true and genuine signatures. S/he further certifies that any of the persons listed below is authorized [CHOOSE ONE: INDIVIDUALLY OR JOINTLY WITH ONE OTHER PERSON] to execute agreements and give written instructions with regard to any matters pertaining to the Collateral Account (as defined in the Security Agreement); provided, that, in all respects, such execution of agreements and giving of written instructions shall be subject to the provisions of the Credit Agreement and the Security Agreement:

             Name                                Title / Phone                                Signature
             ----                                -------------                                ----------
                                                        /
_______________________________      _______________________________________      ___________________________________
                                                       /
_______________________________      _______________________________________      ___________________________________
                                                       /
_______________________________      _______________________________________      ___________________________________

IN WITNESS WHEREOF, I have caused this certificate to be duly executed and delivered as of the ___ day of ______, 200__.

THE WILLIAMS COMPANIES, INC.

[TO BE SIGNED BY AN OFFICER
OTHER THAN ONE LISTED ABOVE]

By __________________________
Name:
Title:

EXHIBIT 10.5

STOCK PURCHASE AGREEMENT

STOCK PURCHASE AGREEMENT, dated as of May 19, 2003 (this "Agreement"), between MEHC Investment, Inc., a South Dakota corporation (the "Seller"), MidAmerican Energy Holdings Company, an Iowa corporation ("MidAmerican"), and The Williams Companies, Inc., a Delaware corporation (the "Purchaser").

W I T N E S S E T H:

WHEREAS, the Seller is the owner of 1,466,667 shares (the "Shares") of 9-7/8% Cumulative Convertible Preferred Stock, par value $1.00 per share, of the Purchaser (the "Preferred Stock"), purchased pursuant to the Stock Purchase Agreement, dated as of March 7, 2002 (the "Purchase Agreement"), by and among the Purchaser, the Seller and MidAmerican;

WHEREAS, the Purchaser desires to repurchase the Shares from the Seller and the Seller desires to sell the Shares to the Purchaser; and

WHEREAS, the Seller is a wholly owned subsidiary of MidAmerican.

NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the terms and conditions set forth herein, the parties hereto hereby agree as follows:

SECTION 1. PURCHASE AND SALE

(a) Subject to the terms and conditions set forth in this Agreement and in reliance upon the Purchaser's and Seller's respective representations and warranties set forth below, on the Closing Date, the Seller shall sell to the Purchaser, and the Purchaser shall purchase from the Seller, the Shares for an aggregate purchase price of $288,750,000 (the "Purchase Price"). Such sale and purchase shall be effected on the Closing Date by the Seller delivering to the Purchaser the stock certificate evidencing the Shares together with a duly executed stock power, against delivery by the Purchaser to the Seller of the Purchase Price by wire transfer of immediately available United States dollars to such account as the Seller shall designate prior to the Closing Date.

(b) The closing of such sale and purchase (the "Closing") shall take place at 10:00 a.m. on the first business day after the satisfaction or waiver of the conditions set forth in Sections 5(c) and 6(c) (provided that if, on the first date that such conditions are satisfied, all necessary consents, waivers, authorizations and approvals are by their express terms irrevocable, then the Closing shall be on such business day thereafter as may be specified by Purchaser to Seller in a notice delivered at least two business days prior to such closing date but in no event

shall such closing date be later than July 15, 2003), or at such other time as the Purchaser and the Seller shall agree in writing (the "Closing Date"), at the offices of Willkie Farr & Gallagher, 787 Seventh Avenue, New York, New York 10019, or such other location as the Purchaser and the Seller shall mutually select.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND MIDAMERICAN

The Seller and MidAmerican represent and warrant to the Purchaser that:

2.1. Organization, Good Standing, Qualification, Etc.

(a) The Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the State of South Dakota, and it has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement. MidAmerican is a corporation duly organized, validly existing and in good standing under the laws of the State of Iowa, and it has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement. No other action on the part of the Seller or MidAmerican is necessary to authorize the execution, delivery and performance of this Agreement by the Seller or MidAmerican and each of the transactions contemplated hereby.

(b) This Agreement constitutes a valid and binding obligation of the Seller and MidAmerican, enforceable against the Seller and MidAmerican in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies.

(c) The execution and delivery by the Seller and MidAmerican of this Agreement do not, and the fulfillment of the terms hereof by the Seller and MidAmerican will not:

(i) require the Seller or MidAmerican or any of their Affiliates to obtain any consent, approval or action of, or make any filing with or give any notice to, any Person the failure of which to obtain, make or give would, individually or in the aggregate, reasonably be expected to delay or prevent the fulfillment of the terms of this Agreement or have a material adverse effect on the assets, properties, business, net income or financial condition of the Seller and its subsidiaries, taken as a whole; or

(ii) result in a breach of any of the terms, conditions or provisions of, or constitute a default under, or permit the acceleration of rights under or termination of, the Seller's or MidAmerican's organizational documents, any agreement, lease, contract, note, mortgage, indenture, arrangement or other obligations to which the Seller or MidAmerican or any of their

Affiliates is a party, or any order, judgment, rule or regulation of any Governmental Entity having jurisdiction over the Seller or MidAmerican or any of their Affiliates or over their respective assets, properties or businesses, except for such breaches, defaults, accelerations and terminations that would not, individually or in the aggregate, reasonably be expected to delay or prevent the fulfillment of terms of this Agreement or have a material adverse effect on the assets, properties, business, net income or financial condition of MidAmerican and its subsidiaries, taken as a whole.

2.2. Shares

The Seller is the sole beneficial owner of the Shares and owns the Shares free and clear of adverse claims, liens or restrictions on transfer, except as set forth in Section 5.3 of the Purchase Agreement, and, upon delivery of the Shares and payment therefore pursuant hereto, the Purchaser will have acquired all legal and beneficial ownership of the Shares, free and clear of such adverse claims, liens or restrictions on transfer (except as set forth in
Section 5.3 of the Purchase Agreement).

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represent and warrant to the Seller as follows:

(a) The Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and it has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement. No other action on the part of the Purchaser is necessary to authorize the execution, delivery and performance of this Agreement by the Purchaser and each of the transactions contemplated hereby.

(b) This Agreement constitutes a valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies.

(c) Except as set forth on Schedule 3(c), the execution and delivery by the Purchaser of this Agreement do not, and the fulfillment of the terms hereof by the Purchaser will not:

(i) require the Purchaser or any of its Affiliates to obtain any consent, approval or action of, or make any filing with or give any notice to, any Person the failure of which to obtain, make or give would, individually or in the aggregate, reasonably be expected to delay or prevent the fulfillment of the terms of this Agreement or have a material adverse effect on the assets, properties, business, net income or financial condition of the Purchaser and its subsidiaries, taken as a whole; or

(ii) result in a breach of any of the terms, conditions or provisions of, or constitute a default under, or permit the acceleration of rights under or termination of, the Purchaser's organizational documents, any agreement, lease, contract, note, mortgage, indenture, arrangement or other obligation to which the Purchaser or any of its Affiliates, is a party, or any order, judgment, rule or regulation of any Governmental Entity having jurisdiction over the Purchaser or any of its Affiliates or over their respective assets, properties or businesses, except for such breaches, defaults, accelerations and terminations that would not, individually or in the aggregate, reasonably be expected to delay or prevent the fulfillment of the terms of this Agreement or have a material adverse effect on the assets, properties, business, net income or financial condition of the Purchaser and its subsidiaries, taken as a whole.

(d) The Purchaser has accumulated "earning and profits" as of the taxable year ended December 31, 2002 which, when added to the current "earnings and profits" for the taxable year ended December 31, 2003, will be sufficient in the aggregate to qualify any dividends declared on the Shares through the Closing Date as a "dividend" within the meaning of Section 316(a) of the Internal Revenue Code of 1986, as amended.

(e) The Purchaser is and, after giving effect to the purchase of the Shares and the other obligations being incurred in connection with this Agreement, will be "Solvent". As used herein, the term "Solvent" means, as of any date of determination, that (a) the amount of the "present fair saleable value" of the assets of the Purchaser will, as of such date, exceed the amount of all "liabilities" of the Purchaser, "contingent or otherwise", as of such date, as such quoted terms are determined in accordance with applicable federal and state laws governing determinations of the insolvency of debtors of debtors, (b) the Purchaser will not have, as of such date, an unreasonably small amount of capital with which to conduct its business, (c) the Purchaser will be able to pay its debts as they mature, and (d) the Purchaser is not insolvent within the meaning of any applicable requirements of law in the jurisdictions where Purchaser is located or where the transactions contemplated by this Agreement are occurring. For purposes of this definition, (i) "debt" means liability on a "claim", and (ii) "claim" means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

(f) The Purchaser currently has sufficient immediately available funds in cash or cash equivalents and will on the Closing Date have sufficient immediately available funds, in cash, to pay the Purchase Price and to pay any other amounts payable pursuant to this Agreement and to effect the transactions contemplated hereby.

SECTION 4. COVENANTS

4.1. Covenants of the Seller and the Purchaser

Subject to the terms and conditions of this Agreement, each of the parties shall use reasonable best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary or desirable under applicable legal requirements, to consummate and make effective the transactions contemplated by this Agreement. If at any time after the Closing Date, any further action is necessary or desirable to carry out the purposes of this Agreement, the parties hereto shall use their reasonable best efforts to take or cause to be taken all such necessary or desirable action and execute, deliver and file, or cause to be executed, delivered and filed, all necessary or desirable documentation.

4.2. Covenants of the Seller

After the date hereof and prior to the Closing Date, except as
(i) expressly provided for in this Agreement, or (ii) consented to in writing by the Purchaser, the Seller will not:

(i) take any action, or knowingly omit to take any action, that would, or that would reasonably be expected to, result in (A) any of the representations and warranties of the Seller set forth in Section 2 becoming untrue, or (B) any of the conditions to the obligations of the Purchaser set forth in Section 5 not being satisfied; or

(ii) enter into any agreement or commitment to do any of the foregoing.

4.3. Covenants of the Purchaser

(a) After the date hereof and prior to the Closing Date, except as (i) expressly provided for in this Agreement, or (ii) consented to in writing by the Seller, the Purchaser will not:

(i) take any action, or knowingly omit to take any action, that would, or that would reasonably be expected to, result in (A) any of the representations and warranties of the Purchaser set forth in Section 3 becoming untrue, or (B) any of the conditions to the obligations of the Seller set forth in Section 6 not being satisfied; or

(ii) enter into any agreement or commitment to do any of the foregoing.

(b) The Purchaser shall use its commercially reasonable efforts to validly obtain all consents, authorizations, waivers and approvals required to be obtained by the Purchaser or its Affiliates to perform its obligations under this Agreement. The Purchaser shall provide the Seller with such current and full updates with respect to the status of such consents, authorizations, waivers and approvals as the Seller may reasonably request from time to time.

SECTION 5. CLOSING CONDITIONS OF THE PURCHASER

The obligations of the Purchaser to effect the transactions contemplated by this Agreement shall be subject to the satisfaction on or prior to the Closing Date of the following conditions, any one or more of which may be waived by the Purchaser in accordance with Section 7.4:

(a) All representations and warranties made by the Seller in this Agreement shall be true and correct in all material respects (except that the representations and warranties made in Section 2.1(c) and Section 2.2 shall be true and correct in all respects) on and as of the Closing Date as if again made by the Seller on and as of such date.

(b) The Seller shall have performed in all material respects all obligations required under this Agreement to be performed by it on or before the Closing Date.

(c) The Purchaser shall have received a certificate, dated the Closing Date, signed by the Chief Executive Officer or the Chief Financial Officer of the Seller, certifying that the conditions specified in the foregoing paragraphs (a) and (b) of this Section 5 have been satisfied.

(d) The consents, waivers, authorizations and approvals set forth on Schedule 3(c) shall have been obtained and shall be in full force and effect on the Closing Date.

(e) No preliminary or permanent injunction or other order issued by any Governmental Entity, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any Governmental Entity, which declares this Agreement or the Preferred Stock invalid or unenforceable in any respect or which prevents the consummation of the transactions contemplated hereby or thereby, shall be in effect; and no action or proceeding before any Governmental Entity shall have been instituted by a Governmental Entity or threatened by any Governmental Entity which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement or the Preferred Stock.

SECTION 6. CLOSING CONDITIONS OF THE SELLER

The obligations of the Seller to effect the transactions contemplated by this Agreement shall be subject to the satisfaction on or prior to the Closing Date of the following conditions, any one or more of which may be waived by the Seller in accordance with Section 7.4:

(a) All representations and warranties made by the Purchaser in this Agreement shall be true and correct in all material respects (except that the representations and warranties made in Sections 3(c), 3(d) and 3(e) shall be true and correct in all respects and the representations and warranties made in Section 3(f) shall be true and correct in all respects as of the Closing Date) on and as of the Closing Date as if again made by the Purchaser on and as of such date.

(b) The Purchaser shall have performed in all material respects all obligations required under this Agreement to be performed by it on or before the Closing Date.

(c) To the extent that the agreements set forth on Schedule 3(c) have not been terminated and have no further force and effect as of the Closing Date (as demonstrated by evidence reasonably satisfactory to Seller and MidAmerican), the consents, waivers, authorizations and approvals set forth on Schedule 3(c), except for the consent required under the transaction described in paragraph 6 of such Schedule, shall have been validly obtained and shall be in full force and effect on the Closing Date.

(d) The Seller shall have received a certificate, dated the Closing Date, signed by the Chief Executive Officer or the Chief Financial Officer of the Purchaser, certifying that the conditions specified in the foregoing paragraphs (a), (b) and (c) of this Section 6 have been satisfied.

(e) The Seller shall have received the opinion of White & Case, LLP, dated the Closing Date and addressed to the Seller, in form and substance reasonably satisfactory to the Seller, that, to the extent that the agreements set forth in Schedule 3(c) have not been terminated and have no further force and effect as of the Closing Date, the execution, delivery and performance by the Purchaser of this Agreement does not violate the agreements set forth on Schedule 3(c), with the exception of the agreement listed in paragraph 6 of Schedule 3(c).

(f) (A) If the Closing Date occurs on or prior to July 1, 2003, then (i) at least ten days prior to the dividend payment date and before seeking any of the third party consents required to consummate the transactions contemplated hereby, the Purchaser shall have declared the regular quarterly dividend on the Preferred Stock for the period ending June 30, 2003 and it shall be payable on the earlier of the Closing Date or July 1, 2003 to holders of record of the Shares on May 19, 2003 and (ii) such dividend shall have been paid to such record holder on or prior to the Closing Date; provided that, if the Closing Date occurs before July 1, 2003, then the Purchaser shall only be required to have paid a dividend on the Shares in an aggregate amount equal to the product of the regular quarterly dividend amount of $6,789,062.50 multiplied by a fraction the numerator of which is the number of days elapsed in the second quarter of 2003 from and including April 1, 2003 through the day preceding the Closing Date and the denominator of which is 90; or (B) if the Closing Date occurs after July 1, 2003, then (i) the Purchaser shall have declared and paid the regular quarterly dividend on the Preferred Stock for the period ended June 30, 2003, (ii) at least ten days prior to the Closing Date the Purchaser shall have declared the regular quarterly dividend on the Preferred Stock for the period ending September 30, 2003 and it shall be payable on the Closing Date to holders of record of the Shares on May 19, 2003 and (iii) such dividend shall have been paid to such record holder on or prior to the Closing Date; provided that the Purchaser shall only be required to have paid a dividend on the Shares in an amount equal to the product of the regular quarterly dividend amount of $6,789,062.50 multiplied by a fraction the numerator of which is the number of days elapsed in the third quarter of 2003 from and including July 1, 2003 through the day preceding the Closing Date and the denominator of which is 90.

(g) No preliminary or permanent injunction or other order issued by any Governmental Entity, nor any statute, rule, regulation, decree or executive order promulgated or

enacted by any Governmental Entity, which declares this Agreement or the Preferred Stock invalid or unenforceable in any respect or which prevents the consummation of the transactions contemplated hereby or thereby, shall be in effect; and no action or proceeding before any Governmental Entity shall have been instituted by a Governmental Entity or threatened by any Governmental Entity which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of the Transaction Documents or the Preferred Stock.

SECTION 7. TERMINATION, AMENDMENT AND WAIVER

7.1. Termination

(a) This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing:

(i) by mutual written consent of the Seller and the Purchaser;

(ii) by the Seller, in the event that the Purchaser fails to comply with any of its covenants or agreements contained herein, or breaches its representations and warranties contained herein, such failure to comply or breach, if curable, is not cured within five business days after receipt by the Purchaser of notice specifying particularly such failure to comply or breach, and such failure to comply or breach would result in the failure to satisfy the conditions set forth in Sections 6(a), 6(b), 6(c) and/or 6(f) on or before July 15, 2003;

(iii) by the Purchaser, in the event that the Seller fails to comply with any of its covenants or agreements contained herein, or breaches its representations and warranties contained herein, such failure to comply or breach, if curable, is not cured within five business days after receipt by the Seller of notice specifying particularly such failure to comply or breach, and such failure to comply or breach would result in a failure to satisfy the conditions set forth in Section 5(a) and/or 5(b) on or before July 15, 2003;

(iv) by the Seller or the Purchaser, in the event that a Governmental Entity shall have issued an order, decree or ruling or taken any other action (which order, decree or ruling the parties hereto shall use their reasonable best efforts to lift), which permanently restrains, enjoins or otherwise prohibits the transactions contemplated by this Agreement and which is not subject to appeal;

(b) This Agreement shall terminate automatically if the Closing Date has not occurred by July 15, 2003.

7.2. Effect of Termination

In the event of termination and abandonment of this Agreement pursuant to Section 7.1(a), written notice thereof shall forthwith be given to the other party hereto and this

Agreement shall terminate and the transactions contemplated hereby shall be abandoned, without further action by the Seller or the Purchaser. If (x) this Agreement is terminated as provided herein by the Seller pursuant to Section 7.1(a)(ii) or (y) this Agreement is terminated pursuant to Section 7.1(b) and, on July 15, 2003, all consents, waivers, authorizations and approvals set forth on Schedule 3(c) have not been obtained or are not in full force and effect or the failure to consummate the transaction on or prior to July 15, 2003 was otherwise not due solely to a failure of the conditions set forth in Section
5(a), Section 5(b) or Section 5(c) to be satisfied, then the Purchaser shall pay the Seller a cash termination fee (the "Termination Fee") of $13,750,000, payable within three business days of the date of the termination of this Agreement. If (x) this Agreement is terminated as provided herein by the Purchaser pursuant to Section 7.1(a)(iii) or (y) this Agreement is terminated pursuant to Section 7.1(b) and, on July 15, 2003, all consents, waivers, authorizations and approvals set forth on Schedule 3(c) have been validly obtained and are in full force and effect and the failure to consummate the closing on or prior to July 15, 2003 was due solely to a failure of the conditions set forth in Section 5(a), 5(b) or 5(c), then the Seller shall pay the Purchaser a cash termination fee (the "Seller Fee") of $13,750,000, payable within three business days of the date of such termination of this Agreement. If this Agreement is otherwise terminated as provided herein, no party to this Agreement shall have any liability or further obligation to any other party to this Agreement. Notwithstanding the foregoing, no termination of this Agreement pursuant to this Section 7 shall relieve any party of liability for misrepresentation or breach of any provision of this Agreement occurring before such termination, provided that (x) the sole liability of the Purchaser for any breach or misrepresentation by it hereunder upon termination of this Agreement shall be the payment of the Termination Fee and (y) the sole liability of the Seller or the Guarantor for any breach or misrepresentation hereunder upon termination of this Agreement shall be the payment of the Seller Fee.

7.3. Amendment

This Agreement may be amended, modified or supplemented only by a written instrument executed by the parties hereto.

7.4. Waiver

The Purchaser or the Seller may, by written notice to the other party (i) extend the time for the performance of any of the obligations or other actions of the other party hereto, (ii) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any documents delivered pursuant to this Agreement by the other party, (iii) waive compliance with any of the covenants of the other party contained in this Agreement, (iv) waive performance of any of the obligations of the other party or (v) waive fulfillment of any of the conditions to its own obligations under this Agreement or in any documents delivered pursuant to this Agreement by the other party. The waiver by either party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach, whether or not similar, unless such waiver specifically states that it is to be construed as a continuing waiver.

SECTION 8. INTERPRETATION OF THIS AGREEMENT

8.1. Certain Terms Defined

As used in this Agreement, the following terms have the respective meanings set forth below:

Affiliate: shall mean a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned Person.

Governmental Entity: shall mean any U.S. or non-U.S. (a) federal, state, county, local or municipal governmental, administrative or regulatory authority, agency, commission, tribunal, body or political subdivision thereof, (b) other governmental, quasi-governmental, regulatory or self-regulatory entity, (c) court or administrative tribunal, or (d) arbitration tribunal or other non-Governmental Entity with applicable jurisdiction.

Person: shall mean an individual, corporation, association, trust, limited liability company, limited partnership, limited liability partnership, partnership, incorporated organization, other entity or group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934), and a Governmental Entity.

8.2. Governing Law

This Agreement shall be governed by and construed in accordance with the internal and substantive laws of New York and without regard to any conflicts of laws concepts, which would apply the substantive law of some other jurisdiction.

8.3. Paragraph and Section Headings

The headings of the sections and subsections and any table of contents of this Agreement are solely for convenience of reference and shall not affect the meaning or interpretation of this Agreement or any term or provision hereof.

SECTION 9. SURVIVAL

The respective representations and warranties of the parties hereto contained herein or in any certificates or other documents delivered pursuant to this Agreement on the Closing shall survive the Closing.

SECTION 10. MISCELLANEOUS

10.1. Notices

(a) All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed to have been duly made or delivered, if delivered personally or sent by overnight courier or facsimile (with evidence of confirmation of receipt), in each case to the parties at the following addresses:

(1) if to the Seller:

MEHC Investment, Inc. C/o MidAmerican Capital 335 Sioux Point Road Suite 100
Dakota Dunes, SD 57049

Attention: Dennis Melstad Facsimile: (605) 232-5925

With a copy to:

MidAmerican Energy Holdings Company 320 South 36th St.

Suite 400
Omaha, NE 68131

Attention: Douglas L. Anderson, Esq.
Facsimile: (402) 231-1658

With a copy to:

Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6009

Attention: Peter J. Hanlon, Esq. / William N. Dye, Esq.
Facsimile: (212) 728-8111

(2) if to the Purchaser:

The Williams Companies, Inc. One Williams Center Tulsa, Oklahoma 74172

Attention: Debbie Fleming Facsimile: (918) 573-2065

With a copy to:

The Williams Companies, Inc. One Williams Center Tulsa, Oklahoma 74172

Attention: James J. Bender, Esq.

Facsimile: (918) 573-5942

With a copy to:

White & Case LLP
1155 Avenue of the Americas
New York, New York 10036

Attention: David E. Joyce
Facsimile: (212) 354-8113

or such other persons or at such other addresses as shall be furnished by either party by like notice to the other, and such notice or communication shall be deemed to have been given or made as of the date so delivered or mailed. No change in any of such addresses shall be effective insofar as notices under this
Section 10.1 are concerned unless such changed address is located in the United States of America and notice of such change shall have been given to such other party hereto as provided in this Section 10.1.

10.2. Expenses

All legal, accounting, financial advisory and other fees, costs and expenses of a party hereto incurred in connection with this Agreement and the performance of the transactions contemplated hereby shall be paid by the party incurring such fees, costs and expenses.

10.3. Publicity

On or prior to the Closing Date, neither party shall, nor shall it permit its Affiliates to, issue or cause the publication of any press release or other announcement with respect to this Agreement or the transactions contemplated hereby without the consent of the other party hereto. Notwithstanding the foregoing, in the event any such press release or announcement is required (in the reasonable judgment of either party after consulting with outside counsel experienced in such matters) by law or stock exchange rule to be made by the

party proposing to issue the same, such party shall use its reasonable best efforts to consult in good faith with the other party prior to the issuance of any such press release or announcement.

10.4. Confidentiality

The Seller and MidAmerican agree to keep the material non-public information with respect to the Purchaser and its subsidiaries provided to Seller or MidAmerican in connection with the transactions contemplated by this Agreement (the "Confidential Information") strictly confidential and not to disclose any of it to anyone without the prior written consent of the Purchaser, provided that the Seller and MidAmerican may disclose such information to (a) the Seller's or MidAmerican's auditors, accountants, attorneys and other professional advisors in connection with such auditors', accountants', attorneys' and advisors' performance of professional services for the Seller, if the Seller or MidAmerican (i) advises such auditors, accountants, attorneys and advisors, as the case may be, of the confidential nature of such Confidential Information and (ii) imposes on such auditors, accountants, attorneys and advisors (or they are otherwise subject to) confidentiality obligations in respect of the Confidential Information comparable to those which MidAmerican ordinarily imposes with respect to its own confidential information, and (b) to any regulatory authorities or examiners or any rating agencies in connection with their supervision, examination or ratings of the Seller or MidAmerican or any affiliate thereof or as required in any reports filed by the Seller or such affiliate with such regulatory authorities or as may otherwise be required by applicable laws. The confidentiality obligations imposed by the foregoing sentence shall not apply, or shall cease to apply, to any such information (a) which was or becomes generally available to the public other than as a result of a disclosure by the Seller or MidAmerican (or any of their respective employees, officers, directors, representatives, agents or advisors) in violation of the terms of this Agreement, (b) which was available, or becomes available, to the Seller or MidAmerican on a non-confidential basis prior to its disclosure by the Purchaser or (c) becomes known to the Seller or MidAmerican from a source other than the Purchaser under circumstances not involving a breach known to the Seller or MidAmerican of a confidentiality obligation of such source to the Purchaser. The obligations of Seller and MidAmerican under this Section 10.4 shall terminate on, and be of no further effect from and after, the first anniversary of the date of this Agreement.

10.5. Submission to Jurisdiction

With respect to any suit, action or proceeding initiated by a party to this Agreement arising out of, under or in connection with this Agreement or the transactions contemplated hereby, the Seller and the Purchaser each hereby submit to the exclusive jurisdiction of any state or federal court sitting in the State of New York and irrevocably waive, to the fullest extent permitted by law, any objection that they may now have or hereafter obtain to the laying of venue in any such court in any such suit, action or proceeding.

10.6. Successors and Assigns

The rights and obligations of the parties hereto shall inure to the benefit of and shall be binding upon the authorized successors and permitted assigns of each party. Neither party hereto may assign its rights or obligations under this Agreement or designate another

person (i) to perform all or part of its obligations under this Agreement or
(ii) to have all or part of its rights and benefits under this Agreement, in each case without the prior written consent of the other party.

10.7. Entire Agreement

This Agreement represents the entire agreement and understanding of the parties with reference to the transactions set forth herein and therein and no representations or warranties have been made in connection with this Agreement other than those expressly set forth herein or in the certificates and other documents delivered in accordance herewith. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter of this Agreement and all prior drafts of this Agreement, all of which are merged into the final executed versions of this Agreement.

10.8. Severability

This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable.

10.9. Counterparts

Facsimile transmission of any signed original document and/or retransmission of any signed facsimile transmission shall be the same as delivery of an original. At the request of the Seller or the Purchaser, the parties will confirm facsimile transmission by signing a duplicate original document. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement.

10.10. Guarantee

MidAmerican guarantees performance by the Seller of the Seller's obligations under this Agreement.

10.11. Indemnity.

From and after the Closing Date, notwithstanding the Closing or the delivery of the Shares and regardless of any investigation at any time made by or on behalf of the Seller or MidAmerican or of any knowledge or information that the Seller or MidAmerican may have, the Purchaser shall indemnify and agree to defend, save and hold the Seller and MidAmerican and their officers, directors, employees, agents and affiliates (collectively, the "INDEMNIFIED PARTIES") harmless if any such Indemnified Party shall at any time or from time to time suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys', consultants' and experts' fees), claim or cause of action (each, a "LOSS") arising out of, relating to, or resulting from any failure by Purchaser to obtain or maintain in full force and effect any consent, waiver, authorization or approval relating to the agreements described in paragraph 6 of Schedule 3(c) and/or any related cross-defaults. Without limiting the foregoing, the Indemnified Parties shall have the right, but not the obligation, to participate at Purchaser's expense in the defense of any claim or action by counsel of the Indemnified Party's choice and to have their reasonable expenses in connection therewith promptly reimbursed by Purchaser and shall in any event use their reasonable best efforts to cooperate with and assist the Purchaser. If the Purchaser fails timely to defend, contest or otherwise protect against such suit, action, investigation, claim or proceeding, the Indemnified Parties shall have the right to do so, including, without limitation, the right to make any compromise or settlement thereof, and the Indemnified Parties shall be entitled to recover the entire cost thereof from the Purchaser, including, without limitation, reasonable attorneys' fees, disbursements and amounts paid as the result of such suit, action, investigation, claim or proceeding.

IN WITNESS WHEREOF, the Seller, the Purchaser and MidAmerican have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

THE WILLIAMS COMPANIES, INC.

By: /s/ Donald R. Chappell
    ------------------------------------
    Name: Donald R. Chappell
    Title: Senior Vice President and CFO

MEHC INVESTMENT, INC.

By: /s/Douglas L. Anderson
    ------------------------------------
    Name: Douglas L. Anderson
    Title: Vice President

MIDAMERICAN ENERGY HOLDINGS COMPANY.

By: /s/ Douglas L. Anderson
    ------------------------------------
    Name: Douglas L. Anderson
    Title: Senior Vice President

EXECUTION COPY

EXHIBIT 10.6

PURCHASE AGREEMENT

BY AND AMONG

WILLIAMS ENERGY SERVICES, LLC,

WILLIAMS NATURAL GAS LIQUIDS, INC. AND

WILLIAMS GP LLC

COLLECTIVELY, AS SELLING PARTIES,

AND

WEG ACQUISITIONS, L.P.
A DELAWARE LIMITED PARTNERSHIP,
AS BUYER,

FOR THE PURCHASE AND SALE OF

(i) ALL THE MEMBERSHIP INTERESTS OF

WEG GP LLC
A DELAWARE LIMITED LIABILITY COMPANY,

(ii) ALL OF THE COMMON UNITS AND SUBORDINATED UNITS OF

WILLIAMS ENERGY PARTNERS, L.P.
A DELAWARE LIMITED PARTNERSHIP

OWNED BY WILLIAMS ENERGY SERVICES, LLC AND WILLIAMS NATURAL GAS LIQUIDS, INC.

AND

(iii) ALL THE CLASS B COMMON UNITS OF

WILLIAMS ENERGY PARTNERS, L.P.
A DELAWARE LIMITED PARTNERSHIP

DATED AS OF APRIL 18, 2003

TABLE OF CONTENTS

                                                                                                           PAGE
                                                                                                           ----
ARTICLE I. SALE AND PURCHASE...........................................................................      2

    SECTION 1.1. Agreement to Sell and to Purchase.....................................................      2
    SECTION 1.2. Deliveries at Closing.................................................................      3
    SECTION 1.3. Purchase Price........................................................................      5

ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES..........................................      7

    SECTION 2.1. Organization..........................................................................      7
    SECTION 2.2. Capitalization of the New Company; Title..............................................      8
    SECTION 2.3. Partnership Capitalization; Title.....................................................      8
    SECTION 2.4. Subsidiaries; Equity Interests; Business of GP Companies..............................     10
    SECTION 2.5. Validity of Agreement; Authorization..................................................     10
    SECTION 2.6. No Conflict or Violation..............................................................     11
    SECTION 2.7. Consents and Approvals................................................................     11
    SECTION 2.8. New Company Financial Statements; SEC Reports; Operating Surplus......................     12
    SECTION 2.9. Absence of Certain Changes or Events..................................................     12
    SECTION 2.10. Tax Matters..........................................................................     13
    SECTION 2.11. Absence of Undisclosed Liabilities...................................................     14
    SECTION 2.12. Real and Personal Property...........................................................     14
    SECTION 2.13. Intellectual Property and Computer Hardware..........................................     15
    SECTION 2.14. Licenses, Permits and Governmental Approvals.........................................     16
    SECTION 2.15. Compliance with Law..................................................................     16
    SECTION 2.16. Litigation...........................................................................     17
    SECTION 2.17. Contracts............................................................................     17
    SECTION 2.18. Brokers..............................................................................     18
    SECTION 2.19. Employees; Employee Plans............................................................     18
    SECTION 2.20. Insurance............................................................................     19
    SECTION 2.21. Environmental; Health and Safety Matters.............................................     20
    SECTION 2.22. Regulatory Matters...................................................................     22
    SECTION 2.23. Books and Records; Other Information.................................................     22
    SECTION 2.24. WPL Contribution Agreement...........................................................     22
    SECTION 2.25. Customers and Suppliers..............................................................     22
    SECTION 2.26. Adequacy of Assets...................................................................     22
    SECTION 2.27. Excluded Assets......................................................................     22
    SECTION 2.28. Solvency.............................................................................     23
    SECTION 2.29. Auction Process......................................................................     23

ARTICLE III. REPRESENTATIONS AND WARRANTIES OF BUYER...................................................     23

    SECTION 3.1. Limited Partnership Organization......................................................     23
    SECTION 3.2. Validity of Agreement; Authorization..................................................     23
    SECTION 3.3. No Conflict or Violation..............................................................     24
    SECTION 3.4. Consents and Approvals................................................................     24
    SECTION 3.5. Financial Ability.....................................................................     24
    SECTION 3.6. Buyer Status..........................................................................     24

    SECTION 3.7. Brokers...............................................................................     25
    SECTION 3.8. Independent Investigation.............................................................     25
    SECTION 3.9. Investment Intent; Investment Experience; Restricted Securities.......................     25

ARTICLE IV. COVENANTS..................................................................................     25

    SECTION 4.1. Certain Changes and Conduct of Business...............................................     25
    SECTION 4.2. Access to Properties and Records......................................................     27
    SECTION 4.3. Employee Matters......................................................................     29
    SECTION 4.4. Consents and Approvals................................................................     34
    SECTION 4.5. Further Assurances....................................................................     35
    SECTION 4.6. Commercially Reasonable Efforts.......................................................     36
    SECTION 4.7. Notice of Breach......................................................................     36
    SECTION 4.8. Confidential Information..............................................................     36
    SECTION 4.9. Tax Covenants.........................................................................     37
    SECTION 4.10. Insurance, Bonds and Collateral......................................................     38
    SECTION 4.11. Information Technology...............................................................     39
    SECTION 4.12. Software License.....................................................................     41
    SECTION 4.13. Non-software Copyright License.......................................................     42
    SECTION 4.14. Transitional Trademark License; Legal Names..........................................     42
    SECTION 4.15. Maximum Amount of Certain of Buyer's Costs and Expenses..............................     43
    SECTION 4.16. Office Lease; Office Furniture and Equipment; Office Supplies........................     44
    SECTION 4.17. No Solicitation; Termination of Discussions..........................................     44
    SECTION 4.18. Confirmation of Termination of Old Omnibus Agreement.................................     45
    SECTION 4.19. New Company Intercompany Accounts....................................................     45
    SECTION 4.20. Certain Costs and Expenses of Board of Directors of New Company......................     46
    SECTION 4.21. New Company Audited Financial Statements.............................................     46

ARTICLE V. CONDITIONS TO OBLIGATIONS OF BUYER..........................................................     46

    SECTION 5.1. Receipt of Documents..................................................................     46
    SECTION 5.2. Representations and Warranties of the Selling Parties.................................     46
    SECTION 5.3. Performance of Selling Parties' Obligations...........................................     47
    SECTION 5.4. Consents and Approvals................................................................     47
    SECTION 5.5. No Violation of Orders................................................................     47
    SECTION 5.6. Director Resignations.................................................................     48
    SECTION 5.7. Employment............................................................................     48
    SECTION 5.8. Legal Opinion.........................................................................     48
    SECTION 5.9. Debt Financing........................................................................     48
    SECTION 5.10. Absence of Specified Events..........................................................     48
    SECTION 5.11. Material Adverse Effect..............................................................     48
    SECTION 5.12. Financial Advisor's Opinion..........................................................     48
    SECTION 5.13. Waivers of Existing Debt Agreements..................................................     49

ARTICLE VI. CONDITIONS TO OBLIGATIONS OF SELLING PARTIES...............................................     49

    SECTION 6.1. Receipt of Documents..................................................................     49
    SECTION 6.2. Representations and Warranties of Buyer...............................................     49
    SECTION 6.3. Performance of Buyer's Obligations....................................................     49
    SECTION 6.4. Consents and Approvals................................................................     49

    SECTION 6.5. No Violation of Orders................................................................     50
    SECTION 6.6. Legal Opinion.........................................................................     50
    SECTION 6.7. Assumption of Consent Decree..........................................................     50

ARTICLE VII. TERMINATION AND ABANDONMENT...............................................................     50

    SECTION 7.1. Methods of Termination; Upset Date....................................................     50
    SECTION 7.2. Effect of Termination.................................................................     51

ARTICLE VIII. SURVIVAL; INDEMNIFICATION................................................................     51

    SECTION 8.1. Survival..............................................................................     51
    SECTION 8.2. Indemnification Coverage..............................................................     52
    SECTION 8.3. Procedures............................................................................     56
    SECTION 8.4. Waiver of Consequential, Etc. Damages.................................................     57
    SECTION 8.5. Compliance with Express Negligence Rule...............................................     57
    SECTION 8.6. Liquidated Damages....................................................................     57
    SECTION 8.7. Remedy................................................................................     58
    SECTION 8.8. Tax Treatment of Indemnity Payments...................................................     58

ARTICLE IX. MISCELLANEOUS PROVISIONS...................................................................     58

    SECTION 9.1. Publicity.............................................................................     58
    SECTION 9.2. Successors and Assigns; Third-Party Beneficiaries.....................................     59
    SECTION 9.3. Investment Bankers, Financial Advisors, Brokers and Finders...........................     59
    SECTION 9.4. Fees and Expenses.....................................................................     60
    SECTION 9.5. Off-Set Right.........................................................................     60
    SECTION 9.6. Notices...............................................................................     60
    SECTION 9.7. Entire Agreement......................................................................     61
    SECTION 9.8. Waivers and Amendments................................................................     62
    SECTION 9.9. Severability..........................................................................     62
    SECTION 9.10. Titles and Headings..................................................................     62
    SECTION 9.11. Signatures and Counterparts..........................................................     62
    SECTION 9.12. Enforcement of the Agreement; Damages................................................     63
    SECTION 9.13. Governing Law........................................................................     63
    SECTION 9.14. Disclosure...........................................................................     63
    SECTION 9.15. Consent to Jurisdiction..............................................................     63
    SECTION 9.16. Certain Definitions..................................................................     64

Exhibits

Exhibit 1.2(a)(i)       WES Bill of Sale
Exhibit 1.2(a)(ii)      WNGL Bill of Sale
Exhibit 1.2(a)(iv)(1)   New Omnibus Agreement
Exhibit 1.2(a)(iv)(2)   Transition Services Agreement
Exhibit 1.2(a)(iv)(3)   ATLAS Assignment, Contribution and License Agreement
Exhibit 1.2(a)(iv)(4)   Services Agreement
Exhibit 5.8             Opinion of Counsel(s) for the Selling Parties
Exhibit 6.6             Opinion of Counsel for the Buyer

Disclosure Schedules

Schedule 1.3            Purchase Price Allocation
Schedule 2.1            Qualification Jurisdictions
Schedule 2.3(d)(i)      Preemptive Purchase Rights
Schedule 2.3(d)(ii)     Outstanding Options
Schedule 2.4            Subsidiaries; Equity Interests; Encumbrances
Schedule 2.6            Conflict or Violation; Encumbrances
Schedule 2.7            Seller Parties' Consents and Approvals
Schedule 2.8            New Company Financial Statements
Schedule 2.9            Certain Changes or Events
Schedule 2.10(b)(i)     Tax Matters
Schedule 2.10(b)(ii)    Contested Taxes Exceeding $100,000
Schedule 2.11           Absence of Undisclosed Liabilities
Schedule 2.12(a)        Real and Personal Property
Schedule 2.12(b)        Permitted Encumbrances
Schedule 2.13(a)        Intellectual Property
Schedule 2.13(b)        Licensed Software
Schedule 2.14           Licenses, Permits and Governmental Approvals
Schedule 2.15           Compliance with Laws
Schedule 2.16           Litigation
Schedule 2.17           Material Contracts
Schedule 2.18           Seller Parties' Brokers
Schedule 2.19(b)(i)     Employee Plans
Schedule 2.19(b)(ii)    Seller Plans
Schedule 2.19(f)(i)     Business Employees
Schedule 2.19(f)(ii)    Change of Control Agreements
Schedule 2.19(g)(i)     Represented Employees
Schedule 2.19(g)(ii)    Union Organizing Activities
Schedule 2.20(a)(i)     Parent Policies
Schedule 2.20(a)(ii)    Partnership Policies
Schedule 2.20(b)        Additional Policies
Schedule 2.21           Environmental; Health and Safety Matters
Schedule 2.25           Termination Notices
Schedule 2.26           Adequacy of Assets
Schedule 3.4            Buyer's Consents and Approvals

                                       iv

Schedule 3.7            Buyer's Brokers
Schedule 4.1            Certain Changes and Conduct of Business
Schedule 4.10(a)        Bonds, Letters of Credit and Cash Collateral
Schedule 4.14           Legal Names
Schedule 5.13           Forms of Waivers Under Existing Debt Agreements
Schedule 8.2(c)         Environmental Matters Subject to Special Indemnification
Schedule 8.3(b)         Environmental Remediation Procedures

PURCHASE AGREEMENT

THIS PURCHASE AGREEMENT (this "AGREEMENT") is made and entered into as of this 18th day of April, 2003, by and among WILLIAMS ENERGY SERVICES, LLC, a Delaware limited liability company ("WES"), WILLIAMS NATURAL GAS LIQUIDS, INC., a Delaware corporation ("WNGL"), and Williams GP LLC, a Delaware limited liability company (the "OLD COMPANY," and collectively with WES and WNGL, the "SELLING PARTIES") and WEG Acquisitions, L.P., a Delaware limited partnership ("BUYER").

W I T N E S S E T H:

WHEREAS, WES and WNGL are the sole members of both (i) WEG GP LLC, a Delaware limited liability company (the "NEW COMPANY," and with the Old Company, the "GP COMPANIES") and (ii) the Old Company;

WHEREAS, (i) WES owns a 99.81% membership interest in the New Company (the "WES NEW LLC INTERESTS"), and WNGL owns a 0.19% membership interest in the New Company (the "WNGL NEW LLC INTERESTS," and with the WES New LLC Interest, the "NEW LLC INTERESTS"); and (ii) WES owns a 99.80% membership interest in the Old Company and WNGL owns a 0.20% membership interest in the Old Company;

WHEREAS, the New Company is the sole general partner of Williams Energy Partners, L.P., a Delaware limited partnership (the "PARTNERSHIP"), and the New Company owns (i) a 2.0% general partner interest in the Partnership (the "GP INTEREST") and (ii) all of the incentive distribution rights with respect to the Partnership (the "IDRs");

WHEREAS, other than the GP Interest and the IDRs, the Partnership also has outstanding common units representing limited partner interests in the Partnership (the "COMMON UNITS"), Class B common units representing limited partner interests in the Partnership (the "CLASS B COMMON UNITS") and subordinated units representing limited partner interests in the Partnership (the "SUBORDINATED UNITS");

WHEREAS, WES owns 757,193 Common Units (the "WES COMMON UNITS") and 4,589,193 subordinated units (the "WES SUBORDINATED UNITS," and with the WES Common Units, the "WES UNITS"), which, in the aggregate, represent a 19.3% limited partner interest in the Partnership;

WHEREAS, WNGL owns 322,501 Common Units (the "WNGL COMMON UNITS") and 1,090,501 Subordinated Units (the "WNGL SUBORDINATED UNITS," and with the WNGL Common Units, the "WNGL UNITS"), which, in the aggregate, represent a 5.1% limited partner interest in the Partnership;

WHEREAS, the Old Company owns 7,830,924 Class B Common Units, which, in the aggregate, represent a 28.2% limited partner interest in the Partnership;

WHEREAS, the general public holds 12,600,000 Common Units, which, in the aggregate, represent a 45.4% limited partner interest in the Partnership;

WHEREAS, Buyer desires to purchase the New LLC Interests, the WES Units, the WNGL Units and the Class B Common Units (collectively, the "SECURITIES") from the respective Selling Parties, and each Selling Party desires to sell the Securities owned by it to the Buyer, in each case upon the terms and subject to the conditions set forth in this Agreement;

WHEREAS, as of the date hereof, The Williams Companies, Inc. ("PARENT") has entered into a Guaranty and Covenant Agreement ("PARENT GUARANTY") in favor of Buyer and the other Buyer Indemnified Parties, pursuant to which, among other things, Parent has guaranteed the payment and performance by the Selling Parties of all of their liabilities and obligations under this Agreement and the Transaction Documents (as defined herein);

WHEREAS, the Board of Directors of Parent has received an opinion from Lehman Brothers, Inc., dated as of the date hereof, to the effect that the consideration (as defined therein) to be received by Parent pursuant to this Agreement is fair, from a financial point of view, to Parent; and

NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the parties hereto hereby agree as follows:

ARTICLE I.
SALE AND PURCHASE

SECTION 1.1. AGREEMENT TO SELL AND TO PURCHASE.

(a) On the Closing Date (as hereinafter defined) and upon the terms and subject to the conditions set forth in this Agreement:

(i) WES shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase and accept from WES, the WES New LLC Interests and the WES Units, in each case, free and clear of any pledges, restrictions on transfer, proxies and voting or other agreements, liens, claims, charges, mortgages, security interests or other legal or equitable encumbrances, limitations or restrictions of any nature whatsoever ("ENCUMBRANCES"), except, in the case of the WES New LLC Interests, as may be set forth in the New LLC Agreement (as defined in Section 2.2) or, in the case of the WES Units, as may be set forth in the Partnership Agreement (as defined in Section 2.3);

(ii) WNGL shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase and accept from WNGL, the WNGL New LLC Interests and the WNGL Units, in each case, free and clear of any Encumbrances, except, in the case of the WNGL New LLC Interests, as may be set forth in the New LLC Agreement or, in the case of the WNGL Units, as may be set forth in the Partnership Agreement; and

(iii) The Old Company shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase and accept from the Old Company, the Class B Common Units, free and clear of any Encumbrances, except as may be set forth in the Partnership Agreement.

(b) The closing of such sale and purchase (the "CLOSING") shall take place at 10:00 a.m. (New York time), on the third business day after the satisfaction of the conditions contained in Articles V and VI (other than those conditions that by their nature are to be fulfilled at Closing), or at such other time and date as the parties hereto shall agree in writing (the "CLOSING DATE"), at the offices of Vinson & Elkins L.L.P. in New York, New York or at such other place as the parties hereto shall agree in writing.

SECTION 1.2. DELIVERIES AT CLOSING.

(a) At the Closing, the Selling Parties shall make the following deliveries to Buyer:

(i) WES shall deliver to Buyer:

(1) a duly executed bill of sale, in substantially the form attached hereto as Exhibit 1.2(a)(i), transferring the WES New LLC Interests (the "WES BILL OF SALE");

(2) (i) a duly executed certificate, countersigned by the Transfer Agent (as defined below), representing 757,193 Common Units in the name of the Buyer (or an Affiliate designated in writing), (ii) a copy of a letter from WES, addressed to and acknowledged by the Bank of New York, as the transfer agent and registrar with respect to the Common Units (the "TRANSFER AGENT"), instructing such Transfer Agent to cancel the certificate(s) representing the WES Common Units and to reissue a new certificate representing 757,193 Common Units in the name of the Buyer (or an Affiliate designated in writing) and (iii) a copy of the cancelled certificate(s) representing the WES Common Units;

(3) (i) a duly executed certificate, countersigned by the transfer agent therefor, representing 4,589,193 Subordinated Units in the name of the Buyer (or an Affiliate designated in writing),
(ii) a copy of a letter from WES, addressed to and acknowledged by the New Company, as the general partner of the Partnership and the transfer agent and registrar with respect to the Subordinated Units, instructing the New Company to cancel the certificate(s) representing the WES Subordinated Units and to reissue a new certificate representing 4,589,193 Subordinated Units in the name of the Buyer (or an Affiliate designated in writing) and
(iii) a copy of the cancelled certificate(s) representing the WES Subordinated Units;

(ii) WNGL shall deliver to Buyer:

(1) a duly executed bill of sale, in substantially the form attached hereto as Exhibit 1.2(a)(ii), transferring the WNGL New LLC

Interests (the "WNGL BILL OF SALE," and with the WES Bill of Sale, the "BILLS OF SALE");

(2) (i) a duly executed certificate, countersigned by the Transfer Agent, representing 322,501 Common Units in the name of the Buyer (or an Affiliate designated in writing), (ii) a copy of a letter from WNGL, addressed to and acknowledged by the Transfer Agent, instructing the Transfer Agent to cancel the certificate(s) representing the WNGL Common Units and to reissue a new certificate representing 322,501 Common Units in the name of the Buyer (or an Affiliate designated in writing) and (iii) a copy of the cancelled certificate(s) representing the WNGL Common Units;

(3) (i) a duly executed certificate, countersigned by the transfer agent therefor, representing 1,090,501 Subordinated Units in the name of the Buyer (or an Affiliate designated in writing),
(ii) a copy of a letter from WNGL, addressed to and acknowledged by the New Company, as the general partner of the Partnership and the transfer agent and registrar with respect to the Subordinated Units, instructing the New Company to cancel the certificate(s) representing the WNGL Subordinated Units and to reissue a new certificate representing 1,090,501 Subordinated Units in the name of the Buyer (or an Affiliate designated in writing) and
(iii) a copy of the cancelled certificate(s) representing the WNGL Subordinated Units;

(iii) the Old Company shall deliver to Buyer: (1) a duly executed certificate, countersigned by the transfer agent therefor, representing 7,830,924 Class B Common Units in the name of the Buyer (or an Affiliate designated in writing), (2) a copy of a letter from the Old Company, addressed to and acknowledged by the New Company, as the general partner of the Partnership and the transfer agent and registrar with respect to the Class B Common Units, instructing the New Company to cancel the certificate(s) representing 7,830,924 Class B Common Units in the name of the Old Company and to reissue a new certificate representing 7,830,924 Class B Common Units in the name of the Buyer (or an Affiliate designated in writing) and (3) a copy of the cancelled certificate(s) in the name of the Old Company;

(iv) WES and WNGL shall together deliver to Buyer:

(1) a duly executed copy of the New Omnibus Agreement, in substantially the form attached hereto as Exhibit 1.2(a)(iv)(1);

(2) a duly executed copy of the Transition Services Agreement, in substantially the form attached hereto as Exhibit 1.2(a)(iv)(2);

(3) a duly executed copy of the ATLAS Assignment, Contribution and License Agreement, in substantially the form attached hereto as Exhibit 1.2(a)(iv)(3); and

(4) a duly executed copy of a Services Agreement between Buyer and the Selling Parties, in form and substance to be mutually agreed on by the parties, reflecting the terms on the term sheet attached as Exhibit 1.2(a)(iv)(4).

(b) At the Closing, Buyer shall make the following deliveries to the Selling Parties (or the New Company as specified in clause
(ii) below):

(i) payment of the First Payment of the Purchase Price, as provided in Section 1.3 below;

(ii) one or more transfer applications in respect of the Common Units, Class B Common Units and Subordinated Units to be acquired by it, in the form specified in the Partnership Agreement, seeking admission to the Partnership as a substitute limited partner (the "UNIT TRANSFER APPLICATION(S)");

(iii) a duly executed copy of the New Omnibus Agreement, in substantially the form attached hereto as Exhibit 1.2(a)(iv)(1);

(iv) a duly executed copy of the Transition Services Agreement, in substantially the form attached hereto as Exhibit 1.2(a)(iv)(2);

(v) a duly executed copy of the ATLAS Assignment, Contribution and License Agreement, in substantially the form attached hereto as Exhibit 1.2(a)(iv)(3); and

(vi) a duly executed copy of a Services Agreement between Buyer and the Selling Parties, in form and substance to be mutually agreed on by the parties, reflecting the terms on the term sheet attached as Exhibit 1.2(a)(iv)(4).

SECTION 1.3. PURCHASE PRICE

(a) The aggregate purchase price for the Securities (the "PURCHASE PRICE"), subject to adjustment, if applicable, only pursuant to
Section 1.3(f) and Section 8.8, shall be paid to the Selling Parties in up to four payments, of which:

(i) the first payment of the Purchase Price shall be $509,868,000.00 (the "FIRST PAYMENT") and shall be paid as provided in Section 1.3(b);

(ii) the Second Payment (defined below) shall be calculated and paid as specified in Sections 1.3(b) and (c) below;

(iii) the Third Payment (defined below) shall be calculated and paid as specified in Sections 1.3(b) and (d) below; and

(iv) the Fourth Payment (defined below) shall be paid as specified in Sections 1.3(b) and (e) below.

(b) Each of the First Payment, the Second Payment and the Third Payment shall be paid by wire transfer to the Selling Parties of immediately available funds made to not more than three bank accounts in the United States of America, as designated in writing by the Selling Parties not less than three business days in advance of the applicable payment, (i) on the Closing Date (in the case of the First Payment), (ii) on the date specified in
Section 1.3(c) (in the case of the Second Payment) and (iii) from time to time as provided in Section 1.3(d) hereof (in the case of the Third Payment). The Buyer shall pay the Fourth Payment from time to time in accordance with Section 8.2(c) hereof. The Purchase Price shall be allocated between the Selling Parties and among the Securities in accordance with Schedule 1.3, which schedule shall be completed prior to Closing.

(c) If the Closing occurs at any time on or after May 1, 2003 (or if the Closing shall occur during the quarterly period ending September 30, 2003, August 1, 2003), the Buyer will pay to the Selling Parties an amount equal to the product of the Per Day Rate (as defined below) times the number of calendar days in the period that commences on May 1, 2003 (or if the Closing shall occur during the quarterly period ending September 30, 2003, August 1, 2003) and ends on the Closing Date; provided, however, in no event shall the amount payable pursuant to this Section 1.3(c) exceed the product of the Per Day Rate times fifteen (15) (the amount, if any, calculated pursuant to this Section 1.3(c), the "SECOND PAYMENT"). As used herein, the term "PER DAY RATE" means a fraction, of which (i) the numerator is equal to the product of (A) the quarterly cash distribution per Common Unit for the quarterly period ending June 30, 2003 (or, in the event that the Closing occurs subsequent to the record date for the cash distribution for the quarterly period ending June 30, 2003 and prior to the record date for the cash distribution for the quarterly period ending September 30, 2003, the quarterly cash distribution per Common Unit for the quarterly period ending September 30, 2003) times (B) 14,590,312, and (ii) of which the denominator is 91. Buyer shall pay the Second Payment to the Selling Parties within one business day following the date of receipt from the Partnership by Buyer of the cash distribution to the holders of Common Units for the quarterly period ending June 30, 2003 (or, in the event that the Closing occurs subsequent to the record date for the cash distribution for the quarterly period ending June 30, 2003 and prior to the record date for the cash distribution for the quarterly period ending September 30, 2003, within one business day following the date of receipt from the Partnership by Buyer of the cash distribution to the holders of Common Units for the quarterly period ending September 30, 2003), or as soon thereafter as Buyer is permitted to make payment of the Second Payment under the definitive debt financing documents pursuant to the debt financing commitment letter described in Section 3.5.

(d) From and after the Closing Date, upon any sale by Buyer or any of its Affiliates (excluding the Partnership Group) of any Common Units (including, without limitation, Common Units issued to Buyer or its Affiliates upon conversion of the Class B Common Units or the Subordinated Units) or of any Class B Common Units or upon the redemption by any of the Partnership Entities of any of the Common Units or Class B Common Units held by Buyer or its Affiliates (excluding the Partnership Group), Buyer shall pay to the Selling Parties an amount for each such Common Unit or Class B Common Unit sold or redeemed equal to 85% of the amount, if any, by which the proceeds received by the Buyer or its

Affiliates (net of any underwriting commissions, placement fees or other offering expenses payable by the Buyer or its Affiliates) exceeds $37.50 per Common Unit or Class B Common Unit (the aggregate amounts, if any, payable to the Selling Parties pursuant to this Section 1.3(d), the "THIRD PAYMENT"); provided, however, that this Section 1.3(d) shall apply only with respect to the first 5,000,000 units (whether Common Units or Class B Common Units or any combination thereof) held by Buyer or its Affiliates (excluding the Partnership Group) which are sold or redeemed; provided, further, that the maximum amount payable to the Selling Parties pursuant to this Section 1.3(d) shall in no event exceed $20 million. Buyer undertakes and agrees to notify the Selling Parties in writing promptly after each such sale or redemption of Common Units or Class B Common Units (which notice shall include the price(s) at which such Common Units or Class B Common Units were sold or redeemed). Buyer shall pay any amounts due to the Selling Parties pursuant to this Section 1.3(d) no later than the third business day following the closing date of any such sale or redemption. For so long as the Selling Parties are entitled to receive payments pursuant to this
Section 1.3(d), Buyer agrees that it shall not, and shall not permit its Affiliates (excluding the Partnership Group) to, sell, convey, assign or otherwise dispose of any Common Units or Class B Common Units for consideration other than cash. Notwithstanding the foregoing, this Section 1.3(d) shall not in any way obligate Buyer or any of its Affiliates (i) to sell any Common Units or Class B Common Units or give rise to any optional or mandatory redemption rights or obligations with respect to the Common Units or the Class B Common Units or
(ii) to make any payments to the Selling Parties to the extent not permitted under any definitive debt financing documents entered into pursuant to the debt financing commitment letter described in Section 3.5.

(e) Buyer shall assume at the Closing the obligations, and make the applicable payments from time to time, as specified in accordance with Section 8.2(c) hereof (the "FOURTH PAYMENT").

(f) If the Closing Price (as defined in Section 9.16) of the Common Units as of three business days prior to Closing is less than $32.00 per unit, then the First Payment shall be reduced by an amount equal to the difference between $32.00 and such Closing Price multiplied by 14,590,312.

ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES

As of the date hereof, each of the Selling Parties hereby represents and warrants, jointly and severally, to Buyer as follows:

SECTION 2.1. ORGANIZATION.

(a) WES is a limited liability company duly formed, validly existing and in good standing under the laws of Delaware, and WNGL is a corporation duly formed, validly existing and in good standing under the laws of Delaware.

(b) Each of the GP Companies is a limited liability company, duly formed, validly existing and in good standing under the laws of Delaware, and the Partnership is a limited partnership duly formed, validly existing and in good standing under the laws of Delaware. Each

of the Partnership Entities (as defined in Section 2.4) is a corporation, limited partnership or limited liability company, as the case may be, duly formed, validly existing and in good standing under the laws of Delaware and has all requisite corporate, limited partnership or limited liability company power and authority, as the case may be, and all governmental licenses, authorizations, permits, consents and approvals to own its respective properties and assets and to conduct its business as now conducted, except where the failure to have such governmental licenses, authorizations, permits, consents and approvals would not have a Material Adverse Effect (as defined in Section 9.16). Each of the Partnership Entities is duly qualified to do business as a foreign entity and is in good standing in each jurisdiction where the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualification necessary, except where the failure to be so qualified or in good standing would not individually or in the aggregate have a Material Adverse Effect. Schedule 2.1 sets forth for each Partnership Entity all of the jurisdictions in which such Partnership Entity is qualified to do business.

SECTION 2.2. CAPITALIZATION OF THE NEW COMPANY; TITLE.

WES and WNGL are the sole members of the New Company in the proportions set forth in the Recitals to this Agreement. The WES New LLC Interests are owned of record and beneficially solely by WES, and the WNGL New LLC Interests are owned of record and beneficially solely by WNGL. All of such New LLC Interests have been duly authorized and validly issued in accordance with the Limited Liability Company Agreement of the New Company, dated as of November 15, 2002 (the "NEW LLC AGREEMENT"), are fully paid (to the extent required by the New LLC Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware Limited Liability Company Act). Except for the New LLC Interests, there are no outstanding securities of the New Company. There are no preemptive or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any interest in the New Company pursuant to any agreement to which any of the New Company or the Selling Parties is a party or to which any of them may be bound. There are no outstanding options, warrants or similar rights to purchase or acquire any equity interests in the New Company. Each of the Selling Parties has valid and marketable title to the New LLC Interest owned by it, free and clear of any Encumbrances (other than the Parent Credit Facility Liens (as defined in Section 9.16), which shall be released at or prior to Closing). A true and correct copy of the New LLC Agreement, with any and all amendments thereto to the date hereof, has been made available by the Selling Parties to the Buyer or its representatives.

SECTION 2.3. PARTNERSHIP CAPITALIZATION; TITLE.

(a) The New Company is the sole general partner of the Partnership. The New Company is the sole record and beneficial owner of the GP Interest, which represents a 2.0% general partner interest in the Partnership, and the GP Interest has been duly authorized and validly issued in accordance with the Partnership Agreement. Except for any Encumbrances provided in the Partnership Agreement, the New Company owns such GP Interest, free and clear of any Encumbrances.

(b) As of the date hereof, the Partnership has no limited partner interests issued and outstanding other than the following:

(i) 12,600,000 Common Units issued to the general public;

(ii) the WES Common Units and the WNGL Common Units issued to WES and WNGL, respectively, and with respect to which WES and WNGL, as applicable, are the sole record and beneficial owners and have valid and marketable title (subject to restrictions on transfer that may be imposed thereon under the Securities Act and state "blue sky" securities laws);

(iii) the WES Subordinated Units and the WNGL Subordinated Units issued to WES and WNGL, respectively, and with respect to which WES and WNGL, as applicable, are the sole record and beneficial owners and have valid and marketable title (subject to restrictions on transfer that may be imposed thereon under the Securities Act and state "blue sky" securities laws);

(iv) the Class B Common Units issued to the Old Company and with respect to which the Old Company is the sole record and beneficial owner and has valid and marketable title (subject to restrictions on transfer that may be imposed thereon under the Securities Act and state "blue sky" securities laws); and

(v) the IDRs held by the New Company and with respect to which the New Company is the sole record and beneficial owner and has valid and marketable title (subject to restrictions on transfer that may be imposed thereon under the Securities Act and state "blue sky" securities laws).

Each of such Common Units, Subordinated Units, Class B Common Units and IDRs and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Second Amended and Restated Agreement of Limited Partnership of the Partnership, dated as of September 27, 2002, as amended by Amendments Nos. 1 and 2 thereto, each dated as of November 15, 2002 (as amended, the "PARTNERSHIP AGREEMENT"); and are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except to the extent such nonassessability may be affected by Section 17-607 of the Delaware Revised Uniform Limited Partnership Act (the "DELAWARE LP ACT")).

(c) Except for any Encumbrances provided in the Partnership Agreement, (i) the New Company owns all of the IDRs, free and clear of any Encumbrances, (ii) the Old Company owns all of the Class B Common Units, free and clear of any Encumbrances (other than the Parent Credit Facility Liens, which shall be released at or prior to Closing), (iii) WES owns all of the WES Units, free and clear of any Encumbrances (other than the Parent Credit Facility Liens, which shall be released at or prior to Closing), and (iv) WNGL owns all of the WNGL Units, free and clear of any Encumbrances (other than the Parent Credit Facility Liens, which shall be released at or prior to Closing).

(d) Except as described in the Partnership Agreement or in Schedule 2.3(d)(i) hereto, there are no preemptive or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of any interest in the Partnership (provided that the foregoing shall not apply to any such restriction on voting or transfer that any holder of Common Units (other than the Selling Parties) may have imposed upon such Common Units). Except as described in

the Partnership Agreement and for "phantom" units ("PHANTOM UNITS") granted under the Williams Energy Partners Long-Term Incentive Plan as described in Schedule 2.3(d)(ii), there are no outstanding options, warrants or similar rights to purchase or acquire from any of the Partnership Entities, Parent or the Selling Parties any equity interests in the Partnership.

SECTION 2.4. SUBSIDIARIES; EQUITY INTERESTS; BUSINESS OF GP COMPANIES.

(a) Except as set forth on Schedule 2.4, neither of the GP Companies nor the Partnership has any subsidiaries, and does not own, directly or indirectly, any shares of capital stock, voting rights or other equity interests or investments in any other Person. Except as set forth in the Partnership Agreement or on Schedule 2.4, neither of the GP Companies nor the Partnership has any obligation or rights to acquire by any means, directly or indirectly, any capital stock, voting rights, equity interests or investments in another Person. Except for Encumbrances set forth on Schedule 2.4, the Partnership owns, directly or indirectly, all of the issued and outstanding partnership, membership or other equity interests of each of the subsidiaries set forth on Schedule 2.4 free and clear of any Encumbrances. The New Company, the Partnership and each of the subsidiaries of the Partnership set forth on Schedule 2.4 are collectively referred to herein as the "PARTNERSHIP ENTITIES."

(b) Old Company was formed as a limited liability company under the laws of Delaware on August 30, 2000 and, from its date of formation until November 15, 2002, did not (i) engage in or conduct, directly or indirectly, any business or other activities other than serving as the general partner of the Partnership, owning the GP Interest, IDRs and Class B Common Units and owning all of the outstanding membership interests of Williams Energy Management LLC, a Delaware limited liability company ("OLD COMPANY SUBSIDIARY"),
(ii) have any employees, (iii) incur any indebtedness, liability or obligations, absolute or contingent, other than any joint and several liability under Delaware law for indebtedness, liabilities and obligations of the Partnership Group that are reflected in the consolidated financial statements of the Partnership included in the SEC Reports (other than Affiliate intercompany obligations incurred in the ordinary course of business), or (iv) own or hold any ownership or other interests in any real or personal property other than as provided in clause (i) above. Old Company Subsidiary was formed as a limited liability company under the laws of Delaware on April 10, 2002 and, from its date of formation until November 15, 2002, did not (1) engage in or conduct, directly or indirectly, any business or other activities, (2) have any employees, (3) incur any indebtedness, liability or obligation, absolute or contingent (other than Affiliate intercompany obligations incurred in the ordinary course of business), or (4) own or hold any ownership or other interests in any real or personal property. New Company was formed as a limited liability company under the laws of Delaware on November 12, 2002 and, since its date of formation, has not engaged in or conducted, directly or indirectly, any business or other activities other than serving as the general partner of the Partnership and owning the GP Interest and the IDRs.

SECTION 2.5. VALIDITY OF AGREEMENT; AUTHORIZATION.

Each of the Selling Parties and Parent has the power and authority to enter into this Agreement and the Transaction Documents to which it is party and to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and such Transaction Documents and the performance of the Selling Parties' and Parent's obligations hereunder and

thereunder have been duly authorized by the Board of Directors of WES, the Board of Directors of WNGL, the members of the Old Company and the Board of Directors of Parent, as applicable, and no other proceedings on the part of any of the Selling Parties or Parent are necessary to authorize such execution, delivery and performance. This Agreement and the Transaction Documents to which any of the Selling Parties or Parent is party have been (in the case of this Agreement and the Parent Guaranty), or will be at the Closing (in the case of such other Transaction Documents), duly executed and delivered by each of the Selling Parties or Parent, as applicable, and constitute, or will constitute at the Closing, as applicable, each such party's valid and binding obligation enforceable against each such party in accordance with its terms (except to the extent that its enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar law affecting the enforcement of creditors' rights generally or by general equitable principles).

SECTION 2.6. NO CONFLICT OR VIOLATION.

The execution, delivery and performance of this Agreement and the Transaction Documents by any of the Selling Parties or Parent does not and will not: (a) violate or conflict with any provision of the Organizational Documents (as defined in Section 9.16) of Parent, any Selling Party or any of the Partnership Entities; (b) violate any applicable provision of law, statute, judgment, order, writ, injunction, decree, award, rule, or regulation of any foreign, federal, tribal, state or local government, court, arbitrator, agency or commission or other governmental or regulatory body or authority ("GOVERNMENTAL AUTHORITY"); (c) violate, result in a breach of, constitute (with due notice or lapse of time or both) a default or cause any obligation, penalty or premium to arise or accrue under any material contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which Parent or any of the Selling Parties or Partnership Entities is a party or by which any of them is bound or to which any of their respective properties or assets is subject; (d) result in the creation or imposition of any Encumbrance upon any of the properties or assets of any of the Partnership Entities; or (e) result in the cancellation, modification, revocation or suspension of any License (as defined in Section 2.14) of any of the Partnership Entities, except in the cases of clauses (b), (d) and (e) above, as would not have a Material Adverse Effect and, in the case of clauses (c) and (d) above, as set forth on Schedule 2.6.

SECTION 2.7. CONSENTS AND APPROVALS.

Except as disclosed on Schedule 2.7, no material consent, approval, waiver or authorization of, or filing, registration or qualification with, any Governmental Authority or any other Person (on the part of Parent or any of the Selling Parties or Partnership Entities) is required for any such party to execute and deliver this Agreement or the Transaction Documents to which Parent or any of the Selling Parties is party or to perform its respective obligations hereunder or thereunder (except under (i) the Parent Credit Facility and (ii) the Parent Credit Facility Security Documents (as defined in Section 9.16), which consents or approvals will be obtained prior to or at Closing).

SECTION 2.8. NEW COMPANY FINANCIAL STATEMENTS; SEC REPORTS; OPERATING SURPLUS.

(a) Attached as Schedule 2.8 are copies of the unaudited balance sheet, as of December 31, 2002, and the unaudited income statements and statements of cash flows for the 12-month period, or portion thereof, ended December 31, 2002, of the New Company and the unaudited balance sheet, income statement and statements of cash flows for the three-month period ended March 31, 2003, of the New Company (collectively, the "NEW COMPANY FINANCIAL STATEMENTS"). The New Company Financial Statements were prepared in accordance with U.S. generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved and fairly present in all material respects the financial condition of the New Company as of their respective dates and the results of its operations for the periods covered thereby.

(b) Since October 30, 2000, (i) the Partnership has timely made all filings (the "SEC REPORTS") required to be made under the Securities Act of 1933, as amended (the "SECURITIES ACT"), and the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), (ii) all SEC Reports filed by the Partnership, at the time filed (in the case of documents filed pursuant to the Exchange Act) or when declared effective by the Securities and Exchange Commission (the "SEC") (in the case of registration statements filed under the Securities Act) complied in all material respects with the applicable requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC thereunder, (iii) no such SEC Report, at the time described above, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading, (iv) all financial statements contained or incorporated by reference in such SEC Reports complied as to form when filed in all material respects with the rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the financial condition of the Partnership and its consolidated subsidiaries at and as of the respective dates thereof and the consolidated results of operations and changes in cash flows for the periods indicated (subject, in the case of unaudited financial statements, to normal year-end audit adjustments consistent with prior periods).

(c) The Operating Surplus (as defined in the Partnership Agreement) of the Partnership as of March 31, 2003 was not less than $150 million.

SECTION 2.9. ABSENCE OF CERTAIN CHANGES OR EVENTS.

Except as set forth on Schedule 2.9, since December 31, 2002, the business of each of the Partnership Entities has been conducted in the ordinary course of business consistent with past practices and none of the Partnership Entities has taken any of the actions described in Section 4.1(a) through (n), except in connection with entering into this Agreement. Since December 31, 2002, there has not been any event or condition that has had, or is reasonably expected to have, a Material Adverse Effect.

SECTION 2.10. TAX MATTERS.

(a) For purposes of this Agreement, "TAX RETURNS" shall mean returns, reports, exhibits, schedules, information statements and other documentation (including any additional or supporting material) filed or maintained, or required to be filed or maintained, in connection with the calculation, determination, assessment or collection of any Tax and shall include any amended returns required as a result of examination adjustments made by the Internal Revenue Service or other Tax authority. For purposes of this Agreement, "TAX" or "TAXES" shall mean any and all federal, state, local, foreign and other taxes, levies, fees, imposts and duties of whatever kind (including any interest, penalties or additions to the tax imposed in connection therewith or with respect thereto), including, without limitation, taxes imposed on, or measured by, income, franchise, profits or gross receipts, and also ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, employment, social security, workers' compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes and customs duties.

(b) Except as disclosed on Schedule 2.10(b)(i), (i) each of the Partnership Entities has filed (or joined in the filing of) when due all Tax Returns required by applicable law to be filed with respect to each of the Partnership Entities other than those Tax Returns the failure of which to file would not have a Material Adverse Effect; (ii) all such Tax Returns were true, correct and complete in all material respects as of the time of such filing;
(iii) all Taxes relating to periods ending on or before the Closing Date owed by the any of the Partnership Entities (whether or not shown on any Tax Return) at any time on or prior to the Closing Date, if required to have been paid, have been or will be timely paid (except for Taxes that are being contested in good faith in appropriate proceedings and, to the extent the amount being contested exceeds $100,000, that are set forth on Schedule 2.10(b)(ii)); (iv) any material liability of any of the Partnership Entities for Taxes not yet due and payable, or that is being contested in good faith in appropriate proceedings, has been provided for on the financial statements of the applicable Partnership Entity or Entities, as the case may be, in accordance with GAAP; (v) there is no action, suit, proceeding, investigation, audit or claim now pending against, or with respect to, any of the Partnership Entities in respect of any material Tax or Tax assessment, nor has any claim for additional material Tax or Tax assessment been asserted in writing or, to the Knowledge of the Selling Parties (as defined in Section 9.16), been proposed by any Tax authority; (vi) since August 13, 2000, no written claim has been made by any Tax authority in a jurisdiction where any of the Partnership Entities does not currently file a Tax Return that it is or may be subject to Tax by such jurisdiction, nor to the Knowledge of the Selling Parties has any such assertion been threatened or proposed in writing;
(vii) none of the Partnership Entities has any outstanding request for any extension of time within which to pay its Taxes or file its Tax Returns; (viii) there has been no waiver or extension of any applicable statute of limitations for the assessment or collection of any Taxes of any of the Partnership Entities; (ix) none of the Partnership Entities has entered into any agreement or arrangement with any Tax authority that requires any of the Partnership Entities to take any action or to refrain from taking any action; (x) none of the Selling Parties is a "foreign person" within the meaning of Section 1445 of the United States Internal Revenue Code of 1986, as amended (the "CODE"); (xi) none of the Partnership Entities is a party to any agreement, whether written or unwritten, providing for the payment of Taxes, payment for Tax losses, entitlements to refunds or similar Tax matters; (xii) the New Company

has made, or shall be eligible to make, an election pursuant to Section 754 of the Code; and (xiii) each of the Partnership Entities has withheld and paid all material Taxes required to be withheld by such Partnership Entity in connection with any amounts paid or owing to any employee, creditor, independent contractor or other third party.

(c) In each tax year since the formation of the Partnership up to and including the current tax year, at least 90% of the Partnership's gross income has been income which is "qualifying income" within the meaning of
Section 7704(d) of the Code.

(d) Except for Williams GP, Inc., none of the Partnership Entities has elected to be treated as a corporation.

(e) The only representations and warranties given in respect of Tax matters are those contained in this Section 2.10 and none of the other representations and warranties shall be deemed to constitute, directly or indirectly, a representation and warranty in respect of Tax matters.

SECTION 2.11. ABSENCE OF UNDISCLOSED LIABILITIES.

(a) Except as disclosed on Schedule 2.11, none of the Partnership Entities has any indebtedness or liability, absolute or contingent, which is not shown or provided for in the New Company Financial Statements or in the consolidated financial statements of the Partnership included in the SEC Reports, other than (i) liabilities incurred or accrued in the ordinary course of business consistent with past practice, including liens for current taxes and assessments not in default, since December 31, 2002, (ii) liabilities of the New Company that individually or in the aggregate are not material to the New Company and that are not required by GAAP to be included in the New Company Financial Statements or (iii) liabilities of the Partnership or any of its subsidiaries that individually or in the aggregate are not material to the Partnership and its subsidiaries, taken as a whole, and that are not required by GAAP to be included in the consolidated financial statements of the Partnership.

(b) As of the Closing Date, New Company will not have any indebtedness, liabilities or obligations, absolute or contingent, other than indebtedness, liabilities and obligations (i) that have been incurred on behalf of the Partnership in the ordinary course of business that are properly reimbursable by the Partnership or (ii) the responsibility for which is specifically allocated under this Agreement.

SECTION 2.12. REAL AND PERSONAL PROPERTY.

Except as disclosed on Schedule 2.12(a), each of the Partnership Entities owns valid and defensible fee title to, or holds a valid leasehold interest in, or a right-of-way or easement (collectively, the "RIGHTS-OF-WAY") through, all real property used or necessary for the conduct of the business of each such Partnership Entity as it is presently conducted ("REAL PROPERTY"), and each of the Partnership Entities has good and valid title to all of the material tangible personal property and assets which it owns and which are reflected in the New Company Financial Statements or in the consolidated financial statements of the Partnership included in the SEC Reports or which are thereafter acquired to the date hereof (except for assets and properties sold, consumed or otherwise disposed of in the ordinary course of business consistent

with past practices since December 31, 2002), and all such Real Property, assets and properties are owned or leased free and clear of all Encumbrances, except for (i) Encumbrances set forth on Schedule 2.12(b), (ii) liens for current Taxes not yet due and payable or for Taxes the validity of which is being contested in good faith (and to the extent the amount being contested exceeds $100,000, that are set forth on Schedule 2.10(b)(ii)), (iii) Encumbrances to secure indebtedness reflected in the consolidated financial statements of the Partnership included in the SEC Reports, (iv) Encumbrances that will be discharged on or prior to the Closing Date, (v) laws, ordinances and regulations affecting building use and occupancy or reservations of interest in title (collectively, "PROPERTY RESTRICTIONS") imposed or promulgated by law or any Governmental Authority with respect to Real Property, including zoning regulations, provided they do not materially interfere with the present use of the applicable Real Property, (vi) Encumbrances, Property Restrictions, Rights-of-Way and written agreements of record or copies of which have been furnished to Buyer, provided they do not materially interfere with the present use of the applicable Real Property, (vii) mechanics', carriers', workmen's, repairmen's or similar types of liens, if any, which do not materially detract from the value of or materially interfere with the present use of any Real Property subject thereto or affected thereby and which have arisen or been incurred in the ordinary course of business, (viii) Parent Credit Facility Liens (which shall be released prior to or at Closing) and (ix) Encumbrances and minor title defects that do not materially detract from the value or materially interfere with the present use of the asset subject thereto (clauses (i) through
(ix) above referred to collectively as "PERMITTED ENCUMBRANCES"). Notwithstanding the foregoing, with respect to Rights-of-Way, the Selling Parties represent only that each of the Partnership Entities has sufficient title thereto to enable it to conduct its business as presently conducted.

SECTION 2.13. INTELLECTUAL PROPERTY AND COMPUTER HARDWARE.

(a) (x) Except as set forth on Schedule 2.13(a) and for the Automated Transportation Logistics Activity System (the "ATLAS 2000 SYSTEM") and (y) except as may be identified during development of the IT Migration Plan (as defined in Section 4.11 below), contemplated under the Transition Services Agreement and for such other matters that also would not have a Material Adverse Effect, (i) one or more of the Partnership Entities owns all right, title and interest in and to, or has a valid and enforceable license or other right to use lawfully, all the Intellectual Property (as defined in Section 9.16) used by any Partnership Entity in connection with its business free and clear of all liens (other than the Parent Credit Facility Liens, which shall be released at or prior to Closing, and the terms of any such license), and Schedule 2.13(a) sets forth a list of such Intellectual Property so used by the Partnership Entities;
(ii) none of the Partnership Entities has infringed or otherwise violated the Intellectual Property of any Person, (iii) to the Knowledge of the Selling Parties, no Person has infringed or otherwise violated the Intellectual Property of any of the Partnership Entities or any Intellectual Property associated with software indicated as owned on Schedule 2.13(b), (iv) the consummation of the transactions contemplated in this Agreement and the Transaction Documents will not alter, impair or extinguish any Intellectual Property of any of the Partnership Entities or any Intellectual Property associated with software indicated as owned on Schedule 2.13(b)) and (v) to the Knowledge of the Selling Parties, there are no agreements, judicial orders or settlement agreements which limit or restrict any of the Partnership Entities' rights to use any Intellectual Property or any Intellectual Property associated with software indicated as owned on Schedule 2.13(b).

(b) Other than the ATLAS 2000 System, a listing of all material computer software owned by or licensed to the Selling Parties and/or its Affiliates which is used in connection with the business of the Partnership Entities as presently conducted is identified in Schedule 2.13(b). None of such owned or licensed software infringes or otherwise violates the Intellectual Property of any Person. Such licensed software is referred to herein as the "LICENSED SOFTWARE."

(c) The Selling Parties or their Affiliates own all right, title and interest to the ATLAS 2000 System and own all right, title and interest to or have a valid and enforceable lease, license or other right to use lawfully any software listed on Schedule 2.13(b) or computer hardware associated with the ATLAS 2000 System that will be transferred to the Partnership Entities in accordance with Section 4.11 or the ATLAS Assignment, Contribution and License Agreement.

(d) The only representations and warranties given in respect of Intellectual Property and matters and agreements relating thereto are those contained in this Section 2.13, and none of the other representations and warranties shall be deemed to constitute, directly or indirectly, a representation and warranty in respect of Intellectual Property and matters or agreements relating thereto.

SECTION 2.14. LICENSES, PERMITS AND GOVERNMENTAL APPROVALS.

Except as set forth on Schedule 2.14, (a) each of the Partnership Entities has all material consents, licenses, permits, certificates, franchises, authorizations and approvals issued or granted to any such Partnership Entity by, and has made all material registrations and filings with, any Governmental Authority as are necessary for the conduct of its business as currently conducted (each a "LICENSE" and, collectively, the "LICENSES"); (b) each License has been issued to, and duly obtained and fully paid for by, the holder thereof and is valid, in full force and effect, except where such invalidity or failure to be in full force and effect would not have a Material Adverse Effect, and (c) none of such Licenses will terminate or become terminable as a result of the transactions contemplated by this Agreement or the Transaction Documents. Notwithstanding anything to the contrary in this Section 2.14, the representations and warranties in this Section 2.14 shall not apply to (x) any right to Intellectual Property (which shall be subject to the representations in
Section 2.13) or (y) any License required under applicable Environmental Law (which shall be subject to the representations in Section 2.21(a)(v)).

SECTION 2.15. COMPLIANCE WITH LAW.

Except with respect to Tax matters (which are provided for in Section 2.10), Intellectual Property matters (which are provided for in Section 2.13) or environmental, health and safety matters (which are provided for in Section 2.21) and except as set forth on Schedule 2.15 or in the SEC Reports, since February 9, 2001, the operations of each of the Partnership Entities have been conducted in material compliance with all applicable laws, regulations, orders and other requirements of all Governmental Authorities having jurisdiction over each such Partnership Entity and its respective assets, properties and operations. Without limiting the generality of the foregoing, Parent, the Selling Parties and the Partnership Entities have been at all times, and are, in compliance with the Consent Decree (as defined in Section 4.4).

SECTION 2.16. LITIGATION.

Except as set forth on Schedule 2.16, there are no Legal Proceedings pending or, to the Knowledge of the Selling Parties, threatened against or involving Parent or any Affiliate thereof, including the Selling Parties and the Partnership Entities that, individually or in the aggregate, are reasonably likely to (a) have a Material Adverse Effect or (b) materially impair or delay the ability of any of the Parent or Selling Parties to perform its obligations under this Agreement or the Transaction Documents or consummate the transactions contemplated hereby or thereby. Except as set forth on Schedule 2.16 or as set forth in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2002 (the "2002 10-K") under the caption "Item 3: Legal Proceedings" or in Note 16 "Commitments and Contingencies" of the Notes to Consolidated Financial Statements included under the caption "Item 8: Financial Statements and Supplementary Data," there is no order, judgment, injunction or decree of any Governmental Authority outstanding against Parent or any of the Selling Parties or Partnership Entities that, individually or in the aggregate, would have any effect referred to in the foregoing clauses (a) and (b). "LEGAL PROCEEDING" shall mean any judicial, administrative or arbitral actions, suits, proceedings (public or private), investigations or governmental proceedings before any Governmental Authority. Notwithstanding the foregoing, the representations and warranties in this Section 2.16 shall not include Legal Proceedings in respect of any Environmental Law (which shall instead be subject to the representations in Section 2.21(a)(iv)).

SECTION 2.17. CONTRACTS.

Schedule 2.17 sets forth (other than those contracts filed as exhibits to the 2002 10-K and subject to the dollar amount limitations of clauses (i) or
(ii) below) a true and complete list of the following contracts, agreements, instruments and commitments to which any of the Partnership Entities is a party or otherwise relating to or affecting any of its assets, properties or operations, whether written or oral: (i) contracts calling for, or that the Selling Parties expect to result in, payments by or to any of the Partnership Entities of amounts greater than $1,000,000 per year; (ii) contracts, loan agreements, letters of credit, repurchase agreements, mortgages, security agreements, guarantees, pledge agreements, trust indentures and promissory notes and similar documents relating to the borrowing of money or for lines of credit in any case for amounts in excess of $1,000,000; (iii) partnership or joint venture agreements; and (iv) contracts limiting or purporting to limit the ability of any of the Partnership Entities to compete in any line of business or with any Person or in any geographic area (collectively with those contracts filed as exhibits to the 2002 10-K, "MATERIAL CONTRACTS"). Each Material Contract is valid, binding and enforceable against such Partnership Entity or Partnership Entities party thereto and, to the Knowledge of the Selling Parties, each of the other parties thereto in accordance with its terms, and in full force and effect on the date hereof (and each such Material Contract will be in full force and effect on the Closing Date, except for any Material Contract that terminates in accordance with its terms) except where a failure to be so valid, binding or enforceable or in full force and effect would not have a Material Adverse Effect. With respect to each Material Contract, no Partnership Entity party thereto and, to the Knowledge of the Selling Parties, no other party thereto is in breach or default, and to the Knowledge of the Selling Parties, no event has occurred which with notice or lapse of time or both would constitute a breach or default, or permit termination, modification or acceleration, thereunder.

SECTION 2.18. BROKERS.

Except as disclosed on Schedule 2.18, neither the Parent nor any of the Selling Parties has employed the services of an investment banker, financial advisor, broker or finder in connection with this Agreement or any of the transactions contemplated hereby.

SECTION 2.19. EMPLOYEES; EMPLOYEE PLANS.

(a) None of the Partnership Entities has, nor since February 9, 2001 has had, any employees.

(b) Except as disclosed on Schedule 2.19(b)(i), none of the Partnership Entities sponsors, maintains or contributes to or has an obligation (secondary, contingent or otherwise) to contribute to and at any time during the past five years has sponsored, maintained or contributed to or has had an obligation to contribute to, any "employee benefit plan," as defined under Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or any other bonus, pension, stock option, stock purchase, benefit, welfare, profit-sharing, retirement, disability, vacation, severance, hospitalization, insurance, incentive, deferred compensation and other similar fringe or employee benefit plans, funds, programs or arrangements, whether written or oral ("EMPLOYEE PLANS") (such Employee Plans listed on Schedule 2.19(b)(i) being the "PARTNERSHIP PLANS"). Each of the Partnership Plans is maintained or sponsored solely by one or more of the Partnership Entities. Schedule 2.19(b)(ii) sets forth a true and complete list of all Employee Plans, other than Partnership Plans, which cover, are maintained for the benefit of, or relate to any or all Business Employees (as defined below) (the "SELLER PLANS").

(c) Each Partnership Plan and Seller Plan has been maintained and operated in material compliance with its terms, the requirements of applicable law, including the Code and ERISA, and each Seller Plan intended to be "qualified" within the meaning of Section 401(a) of the Code is qualified and has received a favorable determination letter from the IRS that covers all amendments required by applicable law to have been made to such plan as of the Closing Date or has timely filed an application to receive a favorable determination letter as to such qualified status.

(d) No Partnership Plan is subject to ERISA and no Seller Plan covering Business Employees is a multiemployer plan, as defined in Section 3(37) of ERISA.

(e) As of the date hereof, the Partnership Entities do not have any liability, including secondary liability, under Title IV of ERISA with respect to any plan, including, without limitation, any Seller Plan nor any liability under Section 302 of ERISA or Section 412 of the Code.

(f) Schedule 2.19(f)(i) sets forth a list showing the names of the active employees of the Selling Parties or their Affiliates who spend fifty percent (50%) or more of their business time engaged in, or in activities related to, the business and/or affairs of any of the Partnership Entities (the "BUSINESS EMPLOYEES") and showing which of such employees regularly devote substantially all of their business time to the business and/or affairs of the Partnership Entities. Except as set forth on Schedule 2.19(f)(ii), there are no contracts,

agreements, plans or arrangements covering any Business Employee with "change of control" or similar provisions that would be triggered as a result of the consummation of any of the transactions contemplated by this Agreement. None of the Business Employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement with any Selling Party, any Partnership Entity, Parent or any other subsidiary of Parent, or to the Knowledge of the Selling Parties, subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of such employee's efforts to promote the interests of the Partnership Entities or Buyer or that would conflict with the business of any of the Partnership Entities as presently conducted. None of Parent, the Selling Parties nor any of the Partnership Entities has received notice from any officer or key Business Employee or group of Business Employees, that such person(s) intends to terminate their employment.

(g) An Affiliate of the Selling Parties is a party to an amended collective bargaining agreement with the Paper, Allied-Industrial, Chemical, and Energy Workers International Union ("PACE") and with PACE Local 5-348 with respect to certain Business Employees as set forth on Schedule 2.19(g)(i), including all existing memorandums of agreement related thereto (collectively, the "PACE COLLECTIVE BARGAINING AGREEMENT"), a copy of which has been furnished to the Buyer. Except as disclosed on Schedule 2.19(g)(i), none of the Business Employees is covered by any collective bargaining agreement with respect to services performed in connection with the business or operations of any of the Partnership Entities and, except as disclosed in Schedule 2.19(g)(ii), to the Knowledge of the Selling Parties, there are not any union organizing efforts underway with respect to any such employees.

(h) Each Partnership Plan may be unilaterally terminated by a Partnership Entity at any time without liability to any Person, except as provided under the terms of the affected plan.

SECTION 2.20. INSURANCE.

(a) Schedule 2.20(a)(i) sets forth a summary listing of all current liability and property insurance policies covering the properties, assets, employees, directors and/or operations of the Partnership Entities that are provided by the Parent or its Affiliates (other than the Partnership Entities) (collectively, the "PARENT POLICIES"). Schedule 2.20(a)(ii) sets forth a summary listing of all current liability and property insurance policies covering the properties, assets, employees, directors and/or operations of all of the Partnership Entities that are provided by the Partnership Entities (collectively, the "PARTNERSHIP POLICIES" and together with the Parent Policies, the "POLICIES"). All premiums payable under the Policies have been paid in a timely manner and Parent (and each of its Affiliates and the Partnership Entities covered thereunder) has complied fully with the terms and conditions of all such Policies.

(b) Except as set forth in Schedule 2.20(b) hereto, all Policies are in full force and effect. None of Parent or the Selling Parties will cancel any of the Partnership Policies or cause any of the Partnership Policies to be canceled, and each of the Partnership Policies will continue to be in full force and effect in accordance with their terms upon the consummation of the transactions contemplated hereby. Subject to Section 4.10(b), coverage for the each of the Partnership Entities under the Parent Policies shall terminate on the Closing Date, except that

coverage for the Partnership Entities under the excess liability policies of the Parent Policies shall terminate on May 1, 2003 at 12:01 a.m. Central Time, and the additional insurance policies to be provided by the Partnership Entities in Schedule 2.20(b) shall be procured by the Selling Parties or Parent, as of May 1, 2003, at the cost of the Partnership. Parent is not (nor is any Affiliate or Partnership Entity covered under any Policy) in default under any provisions of the Policies, and there is no claim by any of the Partnership Entities or any other Person pending under any of the Policies as to which coverage with respect to any of the Partnership Entities has been questioned, denied or disputed by the underwriters or issuers of such Policies.

SECTION 2.21. ENVIRONMENTAL; HEALTH AND SAFETY MATTERS.

(a) Except as set forth on Schedule 2.21:

(i) Each of the Partnership Entities and its operations, activities, Real Property and assets are in material compliance with all applicable Environmental Laws (as defined in paragraph (b) below);

(ii) There are no Hazardous Materials present in, or being released to, the air, surface or sub-surface soils or in the groundwater at, on, in, under, beneath, or in the vicinity of the activities, operations, Real Property or assets of the Partnership Entities in amounts or concentrations that are reasonably likely to result in a material liability under any Environmental Laws;

(iii) None of Parent, the Selling Parties nor any of the Partnership Entities has received any written request for information, or has received written notification that it has any liability, or is a potentially responsible party, under any Environmental Law that is material in nature with respect to any on-site or off-site location for which liability is currently being asserted against them with respect to the activities, operations, Real Property or assets of any of the Partnership Entities;

(iv) There are no material writs, injunctions, decrees, orders or judgments outstanding, or any Legal Proceedings pending or, to the Knowledge of the Selling Parties, threatened involving any of the Partnership Entities or the activities, operations, Real Property or assets of the Partnership Entities relating to (A) its compliance with any Environmental Law, or (B) the release, disposal, discharge, spill, treatment, storage or recycling of Hazardous Materials (as defined in paragraph (b) below) into the environment at any on-site or off-site location;

(v) Each of the Partnership Entities has obtained, currently maintains and is in material compliance with all Licenses which are required under Environmental Laws for its operations, activities, Real Property and assets (collectively, "ENVIRONMENTAL PERMITS"), and all such Environmental Permits are in effect. No appeal nor any other Legal Proceeding is pending to revoke any such Environmental Permit, nor, to the Knowledge of the Selling Parties, threatened, and to the Knowledge of the Selling Parties, no facts or circumstances exist that if unabated would be reasonably expected to result in any Environmental Permit being revoked, rescinded or withdrawn, or not being renewed or reissued on substantially the same terms;

(vi) The Selling Parties and Parent have made available to Buyer all internal and external audits, studies and reports on environmental matters relevant to the Partnership Entities that (A) have been retained in the files of any Selling Party or their Affiliates or the Partnership Entities and (B) were prepared or received at any time after January 1, 1998 (including such documents that may relate to the Excluded Assets, as defined in the WPL Contribution Agreement, and any real property of the type described in
Section 2.21(a)(vii) below); and

(vii) The representations in Sections 2.21(a)(ii), (a)(iii) and (a)(iv) above, also apply to with respect to real property or assets that were owned, leased or operated by the Partnership Entities subsequent to January 1, 1998 but that are no longer owned, leased or operated by the Partnership Entities on the date hereof, but only with respect to the periods such real property or assets were owned, leased or operated by the Partnership Entities; provided, however, that such representation with respect to Section 2.21(a)(iv) is made only to the Knowledge of the Selling Parties.

(b) The following terms shall have the following meanings:

"ENVIRONMENTAL LAW" shall mean current local, county, state, federal, and/or foreign law (including common law), statute, code, ordinance, rule, order, judgment, decree, regulation or other legal obligation relating to the protection of health, safety or the environment or natural resources and in effect on the date hereof, including, without limitation, the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. section 9601 et seq.), as amended ("CERCLA"), the Resource Conservation and Recovery Act (42 U.S.C. section 6901 et seq.), as amended ("RCRA"), the Federal Water Pollution Control Act (33 U.S.C. section 1251 et seq.), as amended, the Clean Air Act (42 U.S.C. section 7401 et seq.), as amended, the Toxic Substances Control Act (15 U.S.C. section 2601 et seq.), as amended, the Occupational Safety and Health Act (29 U.S.C. section 651 et seq.), as amended, the Safe Drinking Water Act (42 U.S.C. section 300(f) et seq.), as amended, analogous state, tribal or local laws, and any similar, implementing or successor law, and any amendment, rule, regulation, or directive issued thereunder, including any determination by, or interpretation of any of the foregoing by any Governmental Authority that has the force of law.

"HAZARDOUS MATERIAL" shall mean any substance, material or waste which is regulated by any Environmental Law as hazardous, toxic, a pollutant, contaminant or words of similar meaning including, without limitation, petroleum, petroleum products, petroleum hydrocarbons, petroleum by-products, crude oil, and any components, fractions or derivatives thereof, methyl tertiary butyl ether ("MTBE"), ammonia, asbestos, urea, formaldehyde and polychlorinated biphenyls.

(c) The only representations and warranties given in respect of environmental, health and safety matters and compliance with and liability under Environmental Laws are those contained in this Section 2.21 and none of the other representations and warranties shall be deemed to constitute, directly or indirectly, a representation and warranty in respect of environmental, health and safety matters or compliance with and liability under Environmental Laws.

SECTION 2.22. REGULATORY MATTERS.

(a) None of the Partnership Entities is a "public utility company," "holding company" or "subsidiary" or "affiliate" of a holding company as such terms are defined in the Public Utility Holding Company Act of 1935, as amended.

(b) None of the Partnership Entities is an "investment company" or a company "controlled by" an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

SECTION 2.23. BOOKS AND RECORDS; OTHER INFORMATION.

The minute books and other similar records of the Partnership Entities contain true and correct copies of all actions taken at all meetings of the Partnership's limited partners, the Boards of Directors of the Old Company and the New Company or any committee thereof and all written consents executed in lieu of any such meetings. Complete copies of all such minute books and other similar records have been made available to Buyer.

SECTION 2.24. WPL CONTRIBUTION AGREEMENT.

None of the rights, benefits or privileges of any of the Partnership Entities under the (i) WPL Contribution Agreement or (ii) the Corporate Guarantee, dated as of March 14, 2003, of Parent in favor of the New Company will be impaired by the consummation of the transactions contemplated by this Agreement or the Transaction Documents.

SECTION 2.25. CUSTOMERS AND SUPPLIERS.

Except as set forth on Schedule 2.25, since January 1, 2003, none of the Partnership Entities, the Selling Parties or Parent has received any written notice that any shipper or customer will discontinue its business relationship with any of the Partnership Entities, and to the Knowledge of the Selling Parties, no such action has been threatened by any material shipper or customer.

SECTION 2.26. ADEQUACY OF ASSETS.

Except as set forth on Schedule 2.26 or as contemplated in the Transition Services Agreement, the tangible assets to be owned by the Partnership Entities immediately after the Closing will be adequate to permit such Partnership Entities to conduct their respective business in substantially the same manner as conducted immediately prior to the Closing.

SECTION 2.27. EXCLUDED ASSETS.

All properties that are part of the Excluded Assets (as defined in
Section 1.1 of the WPL Contribution Agreement) ("EXCLUDED ASSETS") have been transferred from the applicable Partnership Entity to another entity that is not a Partnership Entity.

SECTION 2.28. SOLVENCY.

Each of the Selling Parties and Parent is, and immediately after giving effect to the transactions contemplated by this Agreement and the Transaction Documents will be Solvent. For purposes of this Section 2.28, "SOLVENT" means, with respect to the applicable party on any date of determination, that on such date (a) the fair value of the property of such party is greater than the total amount of liabilities, including, without limitation, contingent liabilities of such party that would constitute liabilities under GAAP, (b) the present fair saleable value of the assets of such party is not less than the amount that will be required to pay its debts as they become absolute and matured, taking into account the possibility of refinancing such obligations and selling assets, (c) such party does not intend to, and does not believe that it will, incur debts or liabilities beyond such party's ability to pay such debts as they mature taking into account the possibility of refinancing such obligations and selling assets and (d) such party is not engaged in business or a transaction, and does not intend to engage in business or a transaction, for which such party's property remaining after such transaction would constitute unreasonably small capital.

SECTION 2.29. AUCTION PROCESS.

The Selling Parties and Parent acknowledge that (i) this Agreement and the other Transaction Documents are the culmination of an extensive auction process, fair in substance and procedure, undertaken by the Selling Parties and Parent to identify and negotiate a transaction with a bidder who was prepared to give the best offer for the Securities, (ii) they have selected Buyer as the successful bidder in accordance with the bidding procedures established for such auction and (iii) this Agreement constitutes the best offer for the Securities.

ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF BUYER

As of the date hereof, Buyer hereby represents and warrants to each of the Selling Parties as follows:

SECTION 3.1. LIMITED PARTNERSHIP ORGANIZATION.

Buyer is a limited partnership duly organized, validly existing and in good standing under the laws of the state of Delaware and has all requisite limited partnership power and authority to own its properties and assets and to conduct its business as now conducted. Buyer is duly qualified to do business as a foreign entity in every jurisdiction where the character of the properties owned or leased by it or the nature of the business conducted by it makes such qualifications necessary.

SECTION 3.2. VALIDITY OF AGREEMENT; AUTHORIZATION.

Buyer has the power and authority to enter into this Agreement and the Transaction Documents to which Buyer is a party and to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and such Transaction Documents and the performance of Buyer's obligations hereunder and thereunder have been duly authorized by the Board of Directors of the general partner of Buyer and no other proceedings on the part of Buyer,

its general partner or its owners are necessary to authorize such execution, delivery and performance. This Agreement and the Transaction Documents to which Buyer is a party each have been (in the case of this Agreement) or will be at the Closing (in the case of such Transaction Documents) duly executed and delivered by Buyer and constitute or will constitute at the Closing, as applicable, the valid and binding obligation of Buyer enforceable against Buyer in accordance with its terms (except to the extent that its enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar law affecting the enforcement of creditors' rights generally or by general equitable principles).

SECTION 3.3. NO CONFLICT OR VIOLATION.

The execution, delivery and performance by Buyer of this Agreement and the Transaction Documents to which Buyer is a party does not and will not: (a) violate or conflict with any provision of its or its general partner's Organizational Documents, (b) violate any applicable provision of law, or any order, judgment or decree of any Governmental Authority, (c) violate or result in a breach of or constitute (with due notice or lapse of time or both) a default under any contract, lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which Buyer is a party or by which it is bound or to which any of its properties or assets is subject or (d) result in the creation or imposition of any Encumbrance upon any of its properties or assets where such violations, breaches, defaults or Encumbrances in the aggregate would have a material adverse effect on the transactions contemplated hereby or on the assets, properties, business, operations, net income or financial condition of Buyer.

SECTION 3.4. CONSENTS AND APPROVALS.

Except as disclosed on Schedule 3.4, no material consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority or any other Person (on the part of Buyer), is required for Buyer to execute and deliver this Agreement or the Transaction Documents to which Buyer is a party or to perform its obligations hereunder or thereunder.

SECTION 3.5. FINANCIAL ABILITY.

Buyer has (a) obtained commitments for debt financing, subject to the satisfaction of the terms and conditions set forth in such commitment letter and
(b) obtained equity financing commitments, subject to the satisfaction of terms and conditions set forth in this Agreement and in such commitment letter, copies of which debt and equity financing commitment letters have been provided to the Selling Parties, and which collectively will, if and when such debt and equity financing is provided to Buyer pursuant to such commitment letters, provide Buyer with sufficient immediately available funds at the Closing to pay the First Payment of the Purchase Price and to effect the transactions contemplated hereby.

SECTION 3.6. BUYER STATUS.

Buyer is not an employee benefit plan or other organization exempt from taxation pursuant to Section 501(a) of the Code, a non-resident alien, a foreign corporation or other foreign Person, or a regulated investment company within the meaning of Section 851 of the Code.

SECTION 3.7. BROKERS.

Except as disclosed on Schedule 3.7, Buyer has not employed the services of an investment banker, financial advisor, broker or finder in connection with this Agreement or any of the transactions contemplated hereby.

SECTION 3.8. INDEPENDENT INVESTIGATION.

Buyer has conducted its own independent investigation, review and analysis of the business, operations, assets, liabilities, results of operations, financial condition and prospects of each of the Partnership Entities, both individually and on a consolidated basis, which investigation, review and analysis was done by Buyer and its Affiliates and, to the extent Buyer deemed necessary or appropriate, by Buyer's representatives. Buyer acknowledges that it and its representatives have been provided adequate access to the personnel, properties, premises and records of each of the Partnership Entities for such purpose.

SECTION 3.9. INVESTMENT INTENT; INVESTMENT EXPERIENCE; RESTRICTED SECURITIES.

In acquiring the Securities, Buyer is not offering or selling, and will not offer or sell the Securities, for the Selling Parties in connection with any distribution of any of such Securities, and Buyer does not have a participation and will not participate in any such undertaking or in any underwriting of such an undertaking except in compliance with applicable federal and state securities laws. Buyer acknowledges that it is able to fend for itself, can bear the economic risk of its investment in the Securities, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in all of such Securities. Buyer is an "accredited investor" as such term is defined in Regulation D under the Securities Act. Buyer understands that none of the Securities will have been registered pursuant to the Securities Act or any applicable state securities laws, that all of such Securities will be characterized as "restricted securities" under federal securities laws and that under such laws and applicable regulations none of such Securities can be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom.

ARTICLE IV.
COVENANTS

SECTION 4.1. CERTAIN CHANGES AND CONDUCT OF BUSINESS.

From and after the date of this Agreement and until the Closing Date, Selling Parties will use their commercially reasonable efforts to cause each of the Partnership Entities to (except as required or permitted pursuant to the terms hereof or as set forth on Schedule 4.1) conduct its business in the ordinary course of business consistent with past practices and to use its commercially reasonable efforts to preserve intact their business organization and relationships of any Partnership Entity with third parties. Without limiting the generality of the foregoing, without the prior written consent of Buyer (which consent will not be unreasonably withheld or delayed), except as required or permitted pursuant to the terms of this Agreement or as set forth on Schedule 4.1, the Selling Parties will use their commercially reasonable efforts to cause each of the Partnership Entities not to:

(a) make any material change in the conduct of its businesses and operations;

(b) make any change in its Organizational Documents or issue any additional equity securities or grant any option, warrant or right to acquire any equity securities or issue any security convertible into or exchangeable for its equity securities;

(c) other than Williams G.P., Inc., elect to be treated as a corporation for tax purposes;

(d) (i) incur, assume or guarantee any indebtedness for borrowed money, issue any notes, bonds, debentures (other than Affiliate intercompany obligations incurred in the ordinary course of business or actions taken to comply with the representation in Section 2.11(b) or the covenant in
Section 4.19) or other corporate securities or grant any option, warrant or right to purchase any thereof or (ii) issue any securities convertible or exchangeable for debt securities of any of the Partnership Entities;

(e) make any sale, assignment, transfer, abandonment or other conveyance of any of its assets or any part thereof except for dispositions of inventory or of worn-out or obsolete equipment for fair or reasonable value in the ordinary course of business consistent with past practices;

(f) subject any of its assets, or any part thereof, to any Encumbrance except Permitted Encumbrances as may arise in the ordinary course of business consistent with past practices by operation of law;

(g) redeem, retire, purchase or otherwise acquire, directly or indirectly, any of its equity interests or declare, set aside or pay any dividends or other distribution in respect of such Partnership Entity's equity interests, other than (i) regular quarterly cash distributions by the Partnership from Available Cash (as defined in the Partnership Agreement) at a rate of no greater than $0.80 per unit (with a proportionate distribution to the New Company in respect of the GP Interest and any distribution on the IDRs provided for in the Partnership Agreement), (ii) dividends or other distributions by the New Company to the Selling Parties of all or any portion of any cash distributions that the New Company may have received pursuant to clause
(i), (iii) any dividends or other distributions made by any subsidiaries of the Partnership to other direct or indirect wholly owned subsidiaries of the Partnership, or to the Partnership itself, in the ordinary course of business consistent with past practices and (iv) actions taken to comply with the representation in Section 2.11(b) or the covenant in Section 4.19;

(h) (i) except as may be required by applicable law, enter into, adopt or make any material amendments to or terminate any bonus, profit sharing, compensation, severance, termination, stock option, stock appreciation right, Phantom Units, restricted stock, performance unit, stock equivalent, stock purchase, pension, retirement, deferred compensation, employment, severance or other employee benefit agreement, trust, plan, fund or other arrangement for the benefit or welfare of any officer or director of any of the Partnership Entities or any Business Employee, except to the extent (1) such adoptions, terminations, amendments or modifications similarly affect employees of the Selling Parties or their Affiliates who are similarly situated to the Business Employees and (2) do not in the aggregate result in a material increase in benefits

or compensation expense to the Partnership Entities, taken as a whole; (ii) except for normal increases in the ordinary course of business consistent with past practice that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Partnership Entities, taken as a whole, increase the benefits or compensation to any officer or director of any of the Partnership Entities or any Business Employee; or (iii) pay to any officer or director of any of the Partnership Entities or any Business Employee any benefit not permitted by any employee benefit agreement, trust, plan, fund, or other arrangement as in effect on the date hereof;

(i) acquire any material assets or properties, except for inventory in the ordinary course of business consistent with past practices;

(j) loan or advance any amount to, or sell, transfer or lease any properties or assets to, or enter into any agreement or arrangement with, any of its Affiliates (other than intercompany receivables in the ordinary course of business or actions taken to comply with the representation in Section 2.11(b) or the covenant in Section 4.19);

(k) fail to duly and timely file or cause to be filed all reports and returns required to be filed with any Governmental Authority and promptly pay or cause to be paid when due all Taxes, assessments and governmental charges, unless contested in good faith in appropriate proceedings;

(l) permit any insurance policy naming any of the Partnership Entities as a beneficiary to expire or be cancelled or terminated, unless a comparable insurance policy is obtained and in effect in replacement thereof;

(m) (i) take or permit any action to be taken that would make any representation or warranty of the Selling Parties under this Agreement inaccurate in any material respect prior to the Closing Date or (ii) omit or cause to omit to take any action necessary to prevent any such representation or warranty from being inaccurate in any material respect at any such time;

(n) issue any units except for (i) issuances of Common Units to directors of the New Company in the ordinary course of business and consistent with past practices or (ii) issuances pursuant to commitments or obligations in respect of Phantom Units outstanding on the date hereof pursuant to the Williams Energy Partners Long-Term Incentive Plan, as described on Schedule 2.3(d)(ii); or

(o) commit itself to do any of the foregoing.

SECTION 4.2. ACCESS TO PROPERTIES AND RECORDS.

(a) Each of the Selling Parties shall afford, and shall cause each of the Partnership Entities (and to the extent reasonably necessary, Parent) to afford, to Buyer and Buyer's accountants, counsel and representatives (collectively "BUYER REPRESENTATIVES"), upon reasonable advance notice to the Selling Parties or their financial adviser, reasonable access during normal business hours throughout the period commencing on the date hereof and ending on the Closing Date (or the earlier termination of this Agreement pursuant to Article VII hereof) to all personnel, properties, books, contracts, and records of each of the Partnership Entities and

their agents, including legal representatives, accountants and environmental and engineering consultants (provided that the Selling Parties or their designee(s) may, in the sole discretion of the Selling Parties, accompany the person(s) to whom such access is provided as contemplated herein) and, during such period, shall furnish promptly to Buyer all information concerning the business, properties, liabilities and personnel of any of the Partnership Entities as Buyer may request, provided that no investigation or receipt of information pursuant to this Section 4.2 shall affect any representation or warranty of the Selling Parties or Buyer's reliance thereon. Additionally, Buyer shall hold in confidence all such information on the terms and subject to the conditions contained in the Confidentiality Agreement (as defined in Section 9.16). Buyer shall have no right of access to, and the Selling Parties shall have no obligation to provide to Buyer, (1) bids received from other Persons in connection with the transactions contemplated by this Agreement and information and analysis (including financial analysis) relating to such bids or (2) any information the disclosure of which the Selling Parties have concluded may jeopardize any privilege available to the Selling Parties or any of the Partnership Entities relating to such information or would cause any of such entities to breach a confidentiality obligation. Buyer agrees that if Buyer or its authorized representatives receive, or if the information (whether in electronic mail format, on computer hard drives or otherwise) held by any of the Partnership Entities as of the Closing includes information that relates to the business operations or other strategic matters of the Parent or any of the Selling Parties or any of their Affiliates (other than the Partnership Entities) such information shall be held in confidence on the terms and subject to the conditions contained in the Confidentiality Agreement, but the term of the restriction on the disclosure and use of such information shall continue in effect as to such information for a period of two years from the Closing. Buyer further agrees that if any of the Selling Parties or Partnership Entities inadvertently furnishes to Buyer copies of or access to information that is subject to clause (2) of the second preceding sentence, Buyer will, upon the Selling Parties' request, promptly return the same to the Selling Parties together with any and all extracts therefrom or notes pertaining thereto (whether in electronic or other format). Buyer shall indemnify, defend, and hold harmless the Selling Parties and their Affiliates from and against any "LOSSES" (as defined in Section 8.2) asserted against or suffered by the Seller Indemnified Parties (as defined in Section 8.2) relating to, resulting from, or arising out of any personal injury to, or property damage directly caused by, any Buyer Representative during any site visit, examination or investigation conducted in accordance with this Section 4.2(a), except where such personal injury or property damage results from the gross negligence or willful misconduct of the Selling Parties, Parent, the Partnership Entities or any employee or agent thereof.

(b) Buyer agrees that it shall preserve and keep all books and records relating to the business or operations of the Partnership Entities on or before the Closing Date in Buyer's possession for a period of at least six years from the Closing Date. Notwithstanding the foregoing, Buyer agrees that it shall preserve and keep all books and records of the Partnership Entities relating to any audit or investigation instituted by a Governmental Authority or any litigation (whether or not existing on the Closing Date) if it is reasonably likely that such investigation or litigation may relate to matters occurring prior to the Closing, without regard to the six-year period set forth in this Section 4.2(b).

SECTION 4.3. EMPLOYEE MATTERS.

(a) Buyer intends to offer, or cause an Affiliate to offer, employment to substantially all Business Employees who are identified on Schedule 2.19(f)(i) as full-time Business Employees and may offer employment to such Business Employees who are identified as less than full-time as it may choose, based on the recommendation of the key management of the Partnership Entities, in either case, on terms and conditions for each Business Employee as are substantially comparable, in the aggregate, to industry standards for similarly situated employees located in the same geographic region, as determined in good faith by Buyer, such employment to commence as contemplated in accordance with the Transition Services Agreement. In addition, within fifteen (15) days after the execution of this Agreement, representatives of Buyer and the Selling Parties shall meet to identify employees of the Selling Parties or any of their Affiliates who are not Business Employees and to whom Buyer and the Selling Parties agree that Buyer may make offers of employment (collectively, the "ADDITIONAL EMPLOYEES"). The Selling Parties agree that if any of the Additional Employees are covered by employee benefit plans or programs of Parent or any of its Affiliates other than Seller Plans, the Selling Parties shall provide Buyer with copies of such plans or programs as promptly as practicable after such Additional Employees are identified. Any such offers of employment made by the Buyer to an Additional Employee shall be on at least the same basis as the offers Buyer makes to Business Employees. Promptly following such agreement regarding the Additional Employees, the Selling Parties shall prepare and submit to Buyer a list of the Additional Employees. Buyer or one or more of its Affiliates shall use commercially reasonable efforts to notify Selling Parties of the names of those Business Employees and Additional Employees that accept such employment offers from Buyer or any other Affiliate of Buyer prior to the Closing Date and in no event more than fifteen (15) days after the Closing Date. The Selling Parties and their Affiliates shall not discourage any Business Employee or Additional Employee to whom an offer of employment is made by Buyer or an Affiliate of Buyer from accepting such offer. Business Employees and Additional Employees who accept employment from Buyer and become employees of Buyer or an Affiliate thereof in accordance with the Transition Services Agreement are referred to herein as "TRANSFERRED EMPLOYEES."

(b) Business Employees who are covered by the PACE Collective Bargaining Agreement are identified on Schedule 2.19(g)(i) (the "REPRESENTED EMPLOYEES"). At the time the first Represented Employee becomes a Transferred Employee (the "REPRESENTED EMPLOYEE TRANSFER DATE"), Buyer agrees to
(i) comply with all legal requirements that may be applicable as a result of the Transferred Employees who are Represented Employees being represented by any labor organization, (ii) recognize PACE as the exclusive bargaining unit for the Transferred Employees who are Represented Employees and (iii) assume (and otherwise adopt) all rights and obligations of the Selling Parties under the PACE Collective Bargaining Agreement with respect to Transferred Employees who are Represented Employees. Notwithstanding anything herein to the contrary, Buyer shall offer employment, commencing in accordance with the Transition Services Agreement, to all Represented Employees.

(c) Effective as of the Represented Employee Transfer Date, Buyer shall assume the Williams Pipe Line Company Pension Plan for Hourly Employees (the "PENSION PLAN"). On or as soon as practicable thereafter, the Selling Parties or their applicable Affiliate shall cause the assets of the Pension Plan held under the current master trust to be transferred to a

trust established or maintained by the Buyer or one of its Affiliates. Such transfer shall be made within one business day after any valuation date of the current master trust and shall be made in cash, marketable securities or other property acceptable to Buyer. Prior to such transfer of assets, the Selling Parties shall make a contribution to the Pension Plan in an amount necessary to cause the accrued benefit obligations under FASB 87 with respect to the Pension Plan to be fully funded as of the last day of the month immediately preceding the month that includes the Represented Employee Transfer Date using actuarial assumptions and factors used for FASB 87 reporting purposes in the year that includes the Represented Employee Transfer Date, which contribution shall also include the amount necessary to satisfy in full the minimum funding contribution liability for the 2002 plan year and the estimated minimum funding contribution liability for the 2003 plan year, as prorated for the partial 2003 plan year through Represented Employee Transfer Date, whether or not such 2002 and 2003 plan year funding contributions are then due.

(d) The Selling Parties' shall retain the obligation for providing retiree medical and retiree life benefits to all employees and former employees (including their eligible dependents and beneficiaries) of the Selling Parties and their Affiliates other than Transferred Employees. On or as soon as practicable after the Represented Employee Transfer Date, the Selling Parties shall transfer to Buyer sponsorship of the Voluntary Employee Beneficiary Association ("VEBA") trust established or maintained for the Represented Employees' retiree medical, including all assets of such trust.

(e) The Selling Parties' shall retain the obligation for providing long-term disability benefits to (i) those Represented Employees who, immediately prior to the Represented Employee Transfer Date, are receiving benefits under The Williams Companies, Inc. Long-Term Disability Plan (but the parties hereto agree that such retained obligation shall not include the obligation under the Pension Plan in respect of such totally disabled persons to continue to accrue benefits, which obligation is to be assumed by Buyer as of the Represented Employee Transfer Date under Section 4.3(c) above) and (ii) those Represented Employees who become totally disabled on or after the Represented Employee Transfer Date as a result of an injury or illness occurring prior to the Represented Employee Transfer Date.

(f) Transferred Employees shall participate in employee benefit plans and programs of the Buyer, which shall provide benefits that are substantially comparable, in the aggregate, to industry standards for similarly situated employees located in the same geographic region, as determined in good faith by Buyer, and that, subject to the terms of the PACE Collective Bargaining Agreement and Section 4.3(r), shall cover each Transferred Employee effective as of the date each such employee becomes a Transferred Employee (each such date, an "EMPLOYEE TRANSFER DATE").

(g) Each Transferred Employee shall, without duplication of benefits, be given credit for all service with Selling Parties or their Affiliates prior to the Employee Transfer Date, using the same methodology used by such parties as of immediately prior to such date for crediting service and determining levels of benefits under the Seller Plans, (i) under all employee benefit plans, programs and arrangements maintained by or contributed to by the Buyer in which a Transferred Employee becomes a participant for purposes of eligibility to participate, vesting and determination of level of benefits (excluding, however, benefit accrual under any defined

benefit plans), and (ii) for purposes of calculating the amount of each Transferred Employee's severance benefits, if any.

(h) With respect to the plan year during which an Employee Transfer Date occurs, Buyer will (i) waive all limitations as to preexisting conditions exclusions and waiting periods with respect to participation and coverage requirements applicable to the Transferred Employees under any medical, dental and life insurance benefit plans that such employees may be eligible to participate in after his or her Employee Transfer Date, other than limitations or waiting periods that are already in effect with respect to such employee and that have not been satisfied as of his or her Employee Transfer Date under any welfare plan maintained for the Transferred Employee immediately prior to his or her Employee Transfer Date, and (ii) provide each Transferred Employee with credit for any co-payments and deductibles paid prior to his or her Employee Transfer Date in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans that such employee is eligible to participate in after his or her Employee Transfer Date.

(i) Effective as of each Employee Transfer Date, each Transferred Employee shall become fully vested in his or her account balances in any defined contribution or 401(k) Plan maintained by the Selling Parties or their Affiliates on behalf of such Transferred Employee (the "SELLER SAVINGS PLAN") and distributions of such account balances shall be made available to each such Transferred Employee as soon as practicable following his or her Employee Transfer Date, in accordance with the provisions of the Seller Savings Plan and applicable law. Participants shall be permitted to elect rollovers of such accounts (excluding after-tax amounts) in cash to a defined contribution or
401(k) Plan maintained by Buyer (the "BUYER SAVINGS PLAN"). Pending such distribution or rollover, the Seller Savings Plan shall permit each Transferred Employee with a loan outstanding under the Seller Savings Plan to continue to be able to repay such loan. Notwithstanding the foregoing, if requested by Buyer and at Buyer's sole cost, the Selling Parties shall cause a spinoff of the accounts of the Transferred Employees to a Buyer 401(k) plan on such terms as reasonably requested by Buyer.

(j) As of the occurrence of the first Employee Transfer Date, Buyer shall have in effect flexible spending reimbursement accounts under a cafeteria plan qualifying under Section 125 of the Code (the "BUYER 125 PLAN") that provides benefits to the Transferred Employees that are substantially identical in all material respects to those provided by the flexible spending reimbursement accounts under the cafeteria plan in which the Transferred Employees are eligible to participate immediately prior to such date (the "SELLER 125 PLAN"). Buyer agrees to cause the Buyer 125 Plan to accept a spin-off of the flexible spending reimbursement accounts from the Seller 125 Plan and to honor and continue through the end of the calendar year in which an Employee Transfer Date occurs the elections made by each Transferred Employee under the Seller 125 Plan in respect of the flexible spending reimbursement accounts that are in effect immediately prior to the Employee Transfer Date. As soon as practicable following an Employee Transfer Date, the Selling Parties shall cause to be transferred to Buyer an amount in cash equal to the excess of the aggregate accumulated contributions to the flexible spending reimbursement accounts made during

the year in which an Employee Transfer Date occurs by the applicable Transferred Employee over the aggregate reimbursement payouts made for such year from such accounts to such Transferred Employee. If the aggregate reimbursement payouts from the flexible reimbursement accounts made during the year in which an Employee Transfer Date occurs made to the applicable Transferred Employee exceed the aggregate accumulated contributions to such accounts for such year by the applicable Transferred Employee, Buyer shall cause such excess to be transferred to the Selling Parties as soon as practicable following the applicable Employee Transfer Date. On and after an Employee Transfer Date, Buyer shall assume and be solely responsible for all claims by the applicable Transferred Employee under the Seller 125 Plan, whether incurred prior to, on or after the applicable Employee Transfer Date, that have not been paid in full as of the applicable Employee Transfer Date.

(k) Buyer and the Selling Parties agree to cooperate as necessary to effectuate the provisions of this Section 4.3 and to ensure an orderly transition of benefits coverage with respect to the Transferred Employees from the Seller Plans to Buyer's plans.

(l) Buyer shall assume all paid-time-off obligations of the Selling Parties and their Affiliates with respect to each Transferred Employee, and each Transferred Employee shall, without duplication of benefits, be given credit for all accrued but unused paid-time-off under Selling Parties or their Affiliate's paid-time-off program as of such Transferred Employee's Employee Transfer Date, using the same methodology used by the Selling Parties or their Affiliates immediately prior to such Employee Transfer Date for crediting service and determining the amount of such paid-time-off benefits. Buyer shall also assume the full obligation to pay all or any portion of any bonus or incentive plan benefit for the years 2002 and 2003, to the extent unpaid as of an Employee Transfer Date, with respect to any Transferred Employee; provided, however, the Selling Parties will promptly reimburse Buyer for (i) any portion of any bonus paid after the applicable Employee Transfer Date for the year 2002, to the extent that the bonus so paid does not exceed the unpaid portion of the bonus declared for such period in respect of such Transferred Employee and (ii) for the allocable portion of any bonus paid after the applicable Employee Transfer Date for the year 2003 to the extent such bonus is included in general and administrative expenses of the Partnership and not in operating and maintenance expenses, such allocable portion to be equal to the product of (A) a fraction, of which (I) the numerator is the number of days in the period from and including January 1, 2003 to but excluding the Closing Date, and (II) the denominator is 365, times (B) the amount of such bonus included in general and administrative expenses of the Partnership that is so paid for the year 2003 to such Transferred Employee, provided, that in no event shall the amount used in this subclause (B) exceed the 2003 target bonus amount established by Parent for such Transferred Employee.

(m) If Buyer terminates the employment of a Transferred Employee at any time between his or her Employee Transfer Date and the first anniversary of such date for a reason other than cause, but excluding any termination in which such employee is offered substantially comparable continued employment by another Person, Buyer shall provide such Transferred Employee who is not a Represented Employee with a severance benefit equal to the greater of
(i) the benefit provided under Buyer's severance plan or program and (ii) a sum equal to two weeks of pay for every year of service with a minimum of six weeks and a maximum of fifty-two weeks total severance benefit.

(n) For a period of one year after the Closing Date:

(i) except as contemplated by the Transition Services Agreement, neither Buyer nor any of its Affiliates shall, directly or indirectly, (A) induce any employee of any of the Selling Parties or their Affiliates (other than the Transferred Employees) to leave the employ of any such Selling Party or Affiliate thereof or (B) employ or otherwise engage as an employee, independent contractor or otherwise any such employee, except that Buyer and its Affiliates shall not be precluded from hiring any such employee who (y) initiates discussions regarding such employment without any direct or indirect solicitation by Buyer or its Affiliates or (z) responds to any public advertisement placed by Buyer or its Affiliates; and

(ii) neither the Selling Parties nor any of their Affiliates shall, directly or indirectly, (A) induce any of the Transferred Employees to leave the employ of any Partnership Entity or Buyer or any of its Affiliates or (B) employ or otherwise engage as an employee, independent contractor or otherwise any such Transferred Employee, except that the Selling Parties and their Affiliates shall not be precluded from hiring any such employee who (y) initiates discussions regarding such employment without any direct or indirect solicitation by the Selling Parties or their Affiliates or (z) responds to any public advertisement placed by the Selling Parties or their Affiliates.

(o) Effective as of each Employee Transfer Date, the applicable Transferred Employee who is not a Represented Employee shall become fully vested in his or her accrued benefits under The Williams Companies, Inc. Pension Plan maintained by the Selling Parties or their Affiliates.

(p) The Selling Parties shall bear the full and sole responsibility and liability for providing any notice to the Selling Parties' or Parent's employees which may be required pursuant to the Federal Working Adjustment and Retraining Notification Act of 1988 ("WARN") or any similar applicable law for any employment loss which occurs in connection with this transaction and shall hold Buyer and its Affiliates (including the Partnership Entities) harmless from and against any and all losses associated with or related to the Selling Parties failure to comply with WARN or any similar law with respect to such employees. Notwithstanding the foregoing, to the extent that WARN liability on the part of the Selling Parties or Parent is triggered with respect to a Business Employee due to Buyer or one or more of its Affiliates terminating the employment of one or more Transferred Employees after the applicable Employee Transfer Date, then any WARN liability that otherwise would be attributed to the Selling Parties or Parent with respect to a Business Employee shall instead be the sole responsibility of the Buyer.

(q) Notwithstanding anything in this Agreement to the contrary, Buyer and its Affiliates (including the Partnership Entities) are not assuming any obligation or liability of the Selling Parties or any of their Affiliates, including any Seller Plan, or any liability thereunder, to any Transferred Employee or other Person except to the extent such liability or obligation is specifically assumed pursuant to this Section 4.3.

(r) Nothing in this Section 4.3 shall prevent Buyer or an Affiliate thereof from amending or terminating, in its sole discretion, any employee benefit plan of Buyer or an Affiliate thereof at any time following the Closing, subject to the provisions of the PACE Collective Bargaining Agreement and Section 4.3(m) above; provided, however, that Buyer agrees to indemnify and protect the Seller Indemnified Parties for any liability they may have as a result of amending or terminating any employee benefit plan of Buyer or an Affiliate thereof following the Closing.

SECTION 4.4. CONSENTS AND APPROVALS.

(a) On or as promptly as practicable after the date hereof, the Selling Parties shall cause Parent to deliver notice (a copy of which will be furnished to Buyer) to the Federal Trade Commission, as required under that certain order, dated June 17, 1998, to which Parent is subject (the "CONSENT DECREE"). The Selling Parties and Buyer shall each use all commercially reasonable efforts to obtain, and in the case of the Selling Parties, cause Parent and the Partnership Entities to obtain, all necessary consents, waivers, authorizations and approvals of all Governmental Authorities and of all other Persons required in connection with the execution, delivery and performance by such party of this Agreement and will cooperate fully with the other party in promptly seeking to obtain all such authorizations, consents, orders, and approvals, giving such notices, and making such filings. If the parties agree that a filing is required, each party shall (i) file or cause to be filed, as promptly as practicable (and in any event within five (5) business days after the execution and delivery of this Agreement), with the Federal Trade Commission and the United States Department of Justice, all reports and other documents required to be filed by such party under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR ACT") concerning the transactions contemplated hereby and (ii) promptly comply with or cause to be complied with any requests by the Federal Trade Commission or the United States Department of Justice for additional information concerning such transactions, in each case so that the waiting period applicable to this Agreement and the transactions contemplated hereby under the HSR Act shall expire as soon as practicable after the execution and delivery of this Agreement. Each party agrees to request, and to cooperate with the other party in requesting, early termination of any applicable waiting period under the HSR Act. The costs of any filing fees required in connection with any HSR filing shall be borne equally between Buyer, on the on hand, and the Selling Parties, on the other hand; provided, however, that any and all costs and expenses otherwise incurred by any of the parties in connection with obtaining any necessary consents, waivers, authorizations and approvals hereunder shall be borne solely by the party required to obtain or deliver such consents, waivers, authorizations and approvals; provided, further, any and all costs and expenses incurred by any of the parties in connection with obtaining the waivers, consents and amendments referred to in Section 5.13 hereunder shall be borne by the Selling Parties.

(b) Without limiting the generality of the parties' undertakings pursuant to Section 4.6, the parties shall:

(i) use commercially reasonable efforts to prevent the entry in a judicial or administrative proceeding brought under any antitrust law by the Federal Trade Commission, the United States Department of Justice or any other party of a permanent or preliminary injunction or other order that would make consummation of the

transactions contemplated by this Agreement unlawful or that would prevent or delay such consummation;

(ii) take promptly, in the event that such an injunction or order has been issued in such a proceeding, any and all reasonable steps, including the appeal thereof and the posting of a bond necessary to vacate, modify, or suspend such injunction or order, so as to permit such consummation on a schedule as close as possible to that contemplated by this Agreement; and

(iii) not take a position or agree to a settlement that will or would reasonably be expected to have a material adverse effect on the Buyer or a material adverse effect on the Selling Parties or otherwise prejudice the Buyer's or the Selling Parties' intent with respect to the transactions contemplated hereby.

(c) If the transfer of any instrument, contract, license, lease, permit, or other document to Buyer hereunder shall require the consent of any party thereto other than the Selling Parties, Parent or the Old Company, then this Agreement shall not constitute an agreement to assign the same, and such item shall not be assigned to or assumed by Buyer, if an actual or attempted assignment thereof would constitute a breach thereof or default thereunder. In such case, the parties shall cooperate and each shall use commercially reasonable efforts to obtain such consents of such other parties to the extent required and, if and when any such consents are obtained, to transfer the applicable instrument, contract, license, lease, permit, or other document. If any such consent cannot be obtained, the Selling Parties shall cooperate in any reasonable arrangement designed to obtain for Buyer all benefits, privileges and obligations of the applicable instrument, contract, license, lease, permit, or document, including, without limitation, possession, use, risk of loss, potential for gain and dominion, control and demand.

(d) During the term of this Agreement and prior to the Closing, Buyer will negotiate in good faith and use its commercially reasonable efforts to finalize the terms and conditions of the debt financing described in
Section 3.5, including without limitation, the execution and delivery of definitive agreements for same containing terms and conditions to funding that are consistent in all material respects with the commitment therefor referenced in Section 3.5, so that Buyer will have the immediately available funds to pay the First Payment of the Purchase Price at Closing; provided, however, Buyer (or its Affiliates) shall not be required to make any representation in such definitive agreements relating to the Partnership Entities that it is not true. Buyer will notify the Selling Parties, upon request, of the status of the negotiations for the debt financing described in Section 3.5.

SECTION 4.5. FURTHER ASSURANCES.

Upon the request of Buyer at any time on or after the Closing Date, each of the Selling Parties will promptly execute and deliver, or cause Parent to execute and deliver, such further instruments of assignment, transfer, conveyance, endorsement, direction or authorization and other documents as Buyer or its counsel may reasonably request in order to perfect title of Buyer and its successors and assigns to the Securities or otherwise to effectuate the purposes of this Agreement.

SECTION 4.6. COMMERCIALLY REASONABLE EFFORTS.

Upon the terms and subject to the conditions of this Agreement, each of the parties hereto will use all commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable consistent with applicable law to consummate and make effective in the most expeditious manner practicable the transactions contemplated hereby. Without limiting the generality of the foregoing, upon the reasonable request of Buyer from time to time, the Selling Parties shall use their commercially reasonable efforts to assist Buyer in meeting the condition referred to in Section 5.9.

SECTION 4.7. NOTICE OF BREACH.

Each party shall promptly give to the other parties written notice with particularity upon having knowledge of any matter that would constitute a breach by such party of any representation, warranty, agreement or covenant of such party contained in this Agreement, including, without limitation, the Selling Parties' representations in Article II. The Selling Parties shall have the obligation prior to the Closing to supplement the Disclosure Schedule in a prompt manner with respect to any matter that would have been required to be set forth on or described in such Disclosure Schedule (a "DISCLOSURE SCHEDULE UPDATE"). Any such supplemental disclosure (i) will not be deemed to have been disclosed as of the date of this Agreement for purposes of determining whether the conditions set forth in Article V have been satisfied (unless such supplemental disclosure relates to an update made in response to Section 2.21(a)(vii)), and (ii) shall not be deemed to have cured any breach of representation, warranty, covenant or agreement relating to the matters set forth in such update for purposes of indemnification pursuant to Article VIII, unless such supplemental disclosure relates to an update to Schedule 2.25 hereto by reason of an action taken by a customer or shipper after the date hereof, in which case a breach of the representation in Section 2.25 shall not be deemed to have occurred for purposes of indemnification pursuant to Article VIII.

SECTION 4.8. CONFIDENTIAL INFORMATION.

(a) For two (2) years after the Closing, the Selling Parties and their Affiliates shall not, directly or indirectly, disclose to any Person any information not in the public domain or generally known in the industry, in any form, whether acquired prior to or after the Closing Date, relating to the business and operations of the Partnership Entities; provided, however, that any such confidential information received, obtained or created in the course of defending any claim or action under Article VIII hereof shall not be disclosed for a period of two (2) years following the resolution of such claim or action. Notwithstanding the foregoing, the Selling Parties may disclose any information relating to the business and operations of the Partnership Entities (i) if required by law or applicable stock exchange rule, and (ii) to such other Persons if, at the time such information is provided, such Person is already in the possession of such information.

(b) Except as consented to by Buyer in writing, none of the Selling Parties and their Affiliates shall release any Person from any Bidder Confidentiality Agreement (as defined below) now existing with respect to the Securities or Partnership Entities or waive or amend any provision thereof. After the Closing Date, the Selling Parties shall use commercially reasonable

efforts to have all confidential information either returned to the Selling Parties or destroyed. Furthermore, if any parties to the Bidder Confidentiality Agreements breach the terms of their respective agreement, upon the request of Buyer, the Selling Parties and Parent shall cooperate with Buyer to enforce the terms of such Bidder Confidentiality Agreements at Buyer's cost and expense. The term "BIDDER CONFIDENTIALITY AGREEMENTS" shall mean the confidentiality agreements between any of Parent, the Selling Parties or any of their Affiliates or advisors and prospective purchasers (other than Buyer or its Affiliates) of the Securities.

SECTION 4.9. TAX COVENANTS.

(a) The Selling Parties shall cause the Partnership Entities to prepare and file all Tax Returns relating to any of the Partnership Entities with the appropriate federal, state, local and foreign governmental agencies and cause the Partnership Entities to pay the Taxes shown to be due thereon, for which Tax Returns are due and Taxes are payable prior to the Closing Date. For periods ending on or prior to the Closing Date, but for which Tax Returns are not due and Taxes are not payable as of the Closing Date, (i) the Selling Parties shall prepare and submit to Buyer for review, signature, and filing all such Tax Returns required to be filed by the New Company, and, at such time, the Selling Parties shall pay to the Buyer the Taxes shown to be due thereon, and (ii) the Buyer shall cause the Partnership Entities (other than the New Company) to prepare and file all Tax Returns and cause the Partnership Entities to pay the Taxes shown to be due thereon.

(b) Buyer shall cause the Partnership Entities to prepare all Tax Returns relating to the Partnership Entities for periods beginning on or before the Closing Date and ending after the Closing Date. With respect to any such Tax Return relating to the New Company, Buyer shall determine (by an interim closing of the books as of the Closing Date except for ad valorem and property taxes owed or owing by the New Company, which shall be prorated on a daily basis) the Tax that would have been due with respect to the period covered by such Tax Return if such taxable period ended on and included the Closing Date (the "PRE-CLOSING TAX"). Not later than 30 days prior to the due date of each such Tax Return, Buyer shall deliver a copy of such Tax Return to the Selling Parties together with a statement of the excess, if any, of the Pre-Closing Tax over the amount set up as a liability for such Tax on the financial statements of the New Company. Buyer shall make or cause to be made such changes in such Tax Returns or the statement of excess, if any, as the Selling Parties may reasonably request, which changes shall be subject to Buyer's approval, which shall not be unreasonably withheld. Not later than five days prior to the due date of such Tax Return, the Selling Parties shall pay to Buyer the amount of such excess. Upon receipt thereof, Buyer shall file or cause to be filed such Tax Return and shall pay all Taxes shown to be due thereon.

(c) The Selling Parties will cause any tax sharing agreement or similar arrangement with respect to Taxes involving any of the Partnership Entities to be terminated effective as of the Closing Date, to the extent any such agreement or arrangement relates to any such entity, and after the Closing Date none of the Partnership Entities shall have any obligation under any such agreement or arrangement for any past, present or future period.

(d) All excise, sales, use, transfer (including real property transfer or gains), stamp, documentary, filing, recordation and other similar taxes, together with any interest,

additions or penalties with respect thereto and any interest in respect of such additions or penalties, resulting directly from the transactions contemplated by this Agreement (the "TRANSFER TAXES"), shall be borne by the Selling Parties. Notwithstanding anything to the contrary in this Section 4.9, any Tax Returns that must be filed in connection with Transfer Taxes shall be prepared and filed when due by the party primarily or customarily responsible under the applicable local law for filing such Tax Returns, and such party will use commercially reasonable efforts to provide such Tax Returns to the other party at least ten days prior to the due date for such Tax Returns.

(e) Notwithstanding anything to the contrary contained herein, any franchise Tax paid or payable with respect to any of the Partnership Entities shall be allocated to the taxable period during which the right to do business is obtained by the payment of the franchise Tax.

SECTION 4.10. INSURANCE, BONDS AND COLLATERAL.

(a) Buyer shall use its commercially reasonable efforts to take, or cause the Partnership Entities to take, such actions as may be necessary or appropriate so that all surety bonds, letters of credit, and cash collateral issued in respect of any of the Partnership Entities and listed on Schedule 4.10(a) (collectively, the "BONDS") are replaced as soon as practicable and in no event later than 60 days after the Closing Date. Buyer shall indemnify, defend and hold harmless the Selling Parties and their Affiliates for any and all Losses (in each case without deduction or set off) incurred on account of such Bonds after the Closing Date.

(b) Notwithstanding the termination of coverage on the Closing Date (or May 1, 2003, in the case of excess liability policies of the Parent Policies) for each of the Partnership Entities under the Parent Policies described in Section 2.20(b), the Selling Parties shall take or cause the Parent to take appropriate action to ensure that upon and after the Closing (i) each of the Partnership Entities shall continue to be covered by such Parent Policies for claims relating to or arising from events or occurrences happening prior to such termination of coverage and, with respect to "claims made" policies, which are reported prior to such termination of coverage, to the same extent as each such entity was covered prior to Closing under each of such Parent Policies, and
(ii) each of the Partnership Entities is named as an insured or additional insured party under such Parent Policies in respect of such claims. After the Closing Date, the Selling Parties or Parent shall continue to manage the claims described in the immediately preceding sentence and shall be responsible for all costs on account of such claims, including but not limited to deductibles and retention and third-party administration charges. For a period of five years after the Closing Date, the Selling Parties shall provide or cause Parent to provide the Buyer, as reasonably requested by the Buyer, historical insurance carrier loss-runs and internally administered loss-runs in respect of the Partnership Entities.

(c) Without limiting the generality of Section 4.10(b), after the Closing Date, Parent or its Affiliates (other than the Partnership Entities) shall continue to manage all workers' compensation claims of all Transferred Employees that are known and reported on or prior to the Closing Date, or that are covered under the workers compensation policy provided by the Parent. The Selling Parties shall be responsible for all costs on account of such claims, including but not limited to deductibles and third party administrator charges.

SECTION 4.11. INFORMATION TECHNOLOGY.

(a) ATLAS Contribution and License Back Agreement. The Selling Parties shall, or shall cause one or more of their Affiliates to, assign and transfer, at or immediately prior to Closing, all right, title and interest to the ATLAS 2000 System, any additional software related thereto and any computer hardware associated therewith to the Partnership Entity or Partnership Entities, as the case may be, designated by the Buyer pursuant to an Assignment, Contribution and License Agreement, in substantially the form attached hereto as Exhibit 1.2(a)(iv)(3) (the "ATLAS ASSIGNMENT, CONTRIBUTION AND LICENSE AGREEMENT"). The ATLAS Assignment, Contribution and License Agreement shall provide for, among other things, Buyer to cause the applicable Partnership Entity or Entities to grant WES a license, which WES may sublicense to Williams Bio-Energy LLC, to use, copy, modify, enhance and upgrade the ATLAS 2000 System to support any business owned or operated by Williams Bio-Energy LLC for so long as Williams Bio-Energy LLC continues to use the ATLAS 2000 System.

(b) IT Migration Team and Migration Assets. The parties shall each designate up to three (3) representatives to a migration team ("IT MIGRATION TEAM") that shall be responsible for determining the software and computer hardware ("IT ASSETS") that will be necessary for Buyer to continue operations of the Partnership Entities in substantially as efficient a manner in which such operations are conducted by the Partnership Entities as of the Closing Date, taking into account, as appropriate, the impact on such items as may be necessary in light of the reduced size and scale of Buyer and the Partnership Entities immediately after the Closing as compared to the size and scale (and corresponding needs) of Parent and its Affiliates (including the Partnership Entities) immediately before the Closing. The IT Migration Team shall identify (i) those certain IT Assets to be transferred or assigned to the Partnership Entities by the Selling Parties or their Affiliates (which IT Assets shall include, subject to the approval of the Partnership Entities, all computer hardware that is not wholly owned by any of the Partnership Entities, but that is owned by Parent or any of its Affiliates, and that is (A) not required for the on-going business of Parent and its subsidiaries (other than the Partnership Entities) and (B) is used more than 50% of the time or for the benefit of Transferred Employees) (the "TRANSFERRED ASSETS") and (ii) those certain IT Assets to be purchased, leased or licensed by or for the benefit of the Partnership Entities as a substitute for IT Assets retained by the Selling Parties or their Affiliates, subject to the parameters set forth in the immediately preceding sentence (the "SUBSTITUTED ASSETS," and collectively with Transferred Assets, the "MIGRATION ASSETS"); provided, however, the Selling Parties shall retain the sole discretion as to whether any IT Asset owned, licensed or leased by the Selling Parties or their Affiliates is transferred or assigned to the Partnership Entities as a Transferred Asset, including without limitation the IT Assets listed on Schedule 2.13(b).

(c) Dispute Resolution. If the Selling Parties and Buyer are unable to agree as to whether one or more IT Assets are to be included among the Substituted Assets (or the terms of the purchase, lease or license of such assets), the parties will compile a list of such disputed IT Assets (the "Dispute List"). The Dispute List will, in the case of each category of disputed IT Asset, set forth the Selling Parties' choice and Buyer's choice of IT Asset to be deemed a Substituted Asset and the terms of the purchase, lease or license of such assets. The parties will refer the dispute to a technology consultant of nationally recognized standing (the "TECHNOLOGY CONSULTANT") to be selected in the following manner: the Selling Parties will select three (3)

candidates and deliver a written notice containing the names of such candidates to Buyer, and within five (5) days of receiving such notice, Buyer will select one of such three candidates to serve as the Technology Consultant. The Technology Consultant may not be otherwise engaged by the Selling Parties or Buyer, or their respective Affiliates, in connection with the transactions contemplated under this Agreement and the Transaction Documents and shall not have performed any material services on behalf of the Selling Parties or Buyer, or their respective Affiliates, during the five (5) years immediately preceding the date of this Agreement. Upon selection, the Technology Consultant shall immediately be engaged by the parties, with costs and expenses of the Technology Consultant to be borne equally be the Selling Parties, on the one hand, and Buyer, on the other hand. For a period of ten (10) days following the engagement of the Technology Consultant, the Selling Parties and Buyer shall be entitled to furnish the Technology Consultant with such supporting documentation as they deem reasonable to support their respective positions with respect any or all of the IT Assets on the Dispute List. The Technology Consultant shall resolve the dispute, with respect to each category of disputed IT Asset on the Dispute List, by choosing either the Selling Parties' or Buyer's choice of IT Asset (and either Selling Parties' or Buyers' terms of the purchase, lease or license of such assets), and the decision of the Technology Consultant shall be final and binding on the Selling Parties and Buyer. The Technology Consultant shall resolve the dispute with respect to each category of IT Asset on the Dispute List within thirty (30) days after the engagement of the Technology Consultant.

(d) IT Migration Plan. The IT Migration Team shall also be responsible for developing a detailed plan that will include timetables for and estimated costs of the transfer, assignment, purchase, lease or license, as the case may be, of the Migration Assets (the "IT MIGRATION PLAN"). The IT Migration Plan shall provide, among other things, that if requested by Buyer, the Selling Parties or their Affiliates will use commercially reasonable efforts to obtain for Buyer, on commercially reasonable terms, such Substituted Assets as requested, subject to Section 4.11(c) above. The Migration Team shall use commercially reasonable efforts to complete the development of the IT Migration Plan prior to the Closing Date and, in any event, shall complete the IT Migration Plan by no later than fifteen (15) days after the Closing Date. The time from such date through completion of the implementation of the IT Migration Plan shall be stated therein and shall be referred to as the "IT MIGRATION PERIOD." It is understood by the parties hereto that the IT Migration Plan will be subject to mutual revision, agreement for which shall not be unreasonably withheld by either party, during the IT Migration Period. Upon completion of the IT Migration Plan, the Selling Parties shall promptly thereafter transfer the Transferred Assets to Buyer, or the Partnership Entities designated by Buyer.

(e) Costs.

(i) Costs Relating to Preparation of IT Migration Plan. All costs related to the Selling Parties' and their Affiliates' employees and contractors involved in the preparation of the IT Migration Plan shall be borne by the Selling Parties, and all costs related to Buyer's employees and contractors involved in the preparation of the IT Migration Plan shall be borne by Buyer. Costs incurred by Buyer pursuant to this Section 4.11(e)(i) shall not be subject to the Expense Limit (as defined in Section 4.15).

(ii) Costs Relating to Implementation of IT Migration Plan. All costs related to the implementation of the IT Migration Plan, including without limitation the transfer and assignment of Transferred Assets and purchase, lease or license of Substituted Assets, as the case may be (and including the cost of time, labor and expenses of employees of the Selling Parties and their Affiliates in connection therewith) (collectively, "IMPLEMENTATION COSTS"), shall be borne by the Buyer, subject in the case of this Section 4.11(e)(ii) to the Expense Limit. The Implementation Costs also shall include, without limitation, the following costs and expenses: (i) all cost associated with the transfer of leases or licenses relating to Transferred Assets,
(ii) any excess costs or fees associated with any of the Selling Parties or their Affiliates being deemed to be a service bureau by a vendor of such Migration Assets, (iii) costs relating to the conversion and loading of data, and (iv) costs relating to the integration of the Migration Assets into the Partnership Entities' information technology systems.

(iii) Costs Relating to Transition Services. All costs and expenses associated with ongoing maintenance and support services provided by the Selling Parties or their Affiliates with respect to the Migration Assets, whether provided under the Transition Services Agreement (other than Implementation Costs) or otherwise, shall not be subject to the Expense Limit.

(f) Miscellaneous. In the case of Transferred Assets
(including software and computer hardware associated with the ATLAS 2000 System) that are (i) leased by the Selling Parties or their Affiliates, such leases shall be transferred to Buyer, and upon such transfer, Buyer shall assume full responsibility for such leases, and (ii) assigned to any of the Partnership Entities, including license and contract rights, the Selling Parties shall secure any consents necessary for such assignments. If Buyer elects to obtain its own leases or licenses for Substituted Assets without the assistance of the Selling Parties, Buyer shall upon the request of the Selling Parties submit to them documentation showing proper licensing prior to the end of the IT Migration Period

SECTION 4.12. SOFTWARE LICENSE.

With respect to any Licensed Software that is included in the Transferred Assets (the "TRANSFERRED LICENSED SOFTWARE"), the Selling Parties, for themselves and on behalf of their Affiliates, shall, in accordance with
Section 4.11(d), grant to the Partnership Entities and the Buyer and its Affiliates, a worldwide nonexclusive royalty-free, perpetual license, with the right to assign and sublicense only to such Affiliates, to use, copy, modify, enhance, and upgrade, solely for their internal business purposes and not as a service bureau, the Transferred Licensed Software, except as not permitted pursuant to any license relating thereto. Any copies of the Transferred Licensed Software and any documentation related thereto must contain all copyright and other intellectual property rights notices included thereon at the time of Closing. The Partnership Entities and Buyer shall not be entitled to receive and Selling Parties and their Affiliates shall have no obligation to provide any modifications, enhancements, or upgrades made to the Transferred Licensed Software developed subsequent to the date of transfer of such Licensed Transferred Software to the Buyer or the Partnership Entities. To the extent that they possess such, the Selling Parties and their Affiliates shall provide copies to Buyer and the Partnership Entities of the source code for all Transferred Licensed Software. Ownership of all

intellectual property rights in the Transferred Licensed Software remains with Selling Parties and their Affiliates; provided, following the date of transfer to Buyer and the Partnership Entities, the intellectual property rights to any modifications, enhancements and upgrades to the Transferred Licensed Software will be owned by the party making such modifications, enhancements and upgrades and there shall be no right for any party to disclose such to any other party. The Partnership Entities and Buyer shall not take any action that is materially inconsistent with the Selling Parties' and their Affiliates' rights in the Transferred Licensed Software. Except as otherwise expressly provided in this section, the Transferred Licensed Software and any related documentation are provided on an "as is" basis, and the Selling Parties and their Affiliates hereby expressly disclaim any implied warranty of merchantability or fitness for a particular purpose. The Selling Parties and their Affiliates do not warrant that the Transferred Licensed Software or documentation are error-free or that the Partnership Entities' or Buyer's use thereof will be uninterrupted. Buyer shall have the right to transfer its rights as granted herein to a third party only upon the sale or transfer of all or substantially all of the Securities or the assets of the Partnership Entities or a majority of the New LLC Interests to such third party, except to the extent any such transfer is not permitted pursuant to any license relating thereto. All rights with respect to Transferred Licensed Software not expressly granted to Buyer in this Section 4.12 are retained by the Selling Parties and their Affiliates.

SECTION 4.13. NON-SOFTWARE COPYRIGHT LICENSE.

Effective upon the Closing Date, the Selling Parties, for themselves and on behalf of their Affiliates, hereby grant to the Partnership Entities, Buyer and its Affiliates, a nonexclusive royalty-free, perpetual license, without right to sublicense, to use, copy, modify, enhance, and upgrade, solely for their internal business purposes and not as a service bureau, all manuals, user guides, standards and operation procedures and similar documents owned by the Selling Parties and/or their Affiliates and used by the Partnership Entities. All copies of the foregoing must reproduce and include all copyright and other intellectual property rights notices as such appear on such items at the time of Closing or as specifically provided with respect to any such item by the Selling Parties. All rights with respect to such items not expressly granted to Buyer in this Section 4.13 are retained by the Selling Parties and their Affiliates.

SECTION 4.14. TRANSITIONAL TRADEMARK LICENSE; LEGAL NAMES.

(a) Effective upon the Closing Date, the Selling Parties and their Affiliates, hereby grant to the Partnership Entities, Buyer and its Affiliates a nonexclusive, nontransferable, royalty-free license, without right to sublicense, to use, solely in the Partnership Entities' businesses as they have been conducted since February 9, 2001 and as they are presently conducted, any and all trademarks, service marks, trade names, trade dress and domain names owned by the Selling Parties and their Affiliates solely to the extent appearing on existing inventory, advertising materials and property of the Partnership Entities (such as signage, vehicles, and equipment) (collectively "SELLERS' MARKS") for a period of nine (9) months from the Closing Date ("LICENSE PERIOD"). The Buyer and the Partnership Entities may use such existing inventory, advertising materials and property during the License Period, but shall not create new inventory, advertising materials or property using Sellers' Marks. Buyer and the Partnership Entities shall promptly replace or remove Sellers' Marks on inventory, advertising materials and other property, provided that all such use shall cease no later than the end of the

License Period. The nature and quality of all uses of Sellers' Marks by Buyer and the Partnership Entities shall conform to the nature and quality of the uses of Sellers' Marks by the Selling Parties, Parent and the Partnership Entities as of the date hereof. Immediately upon expiration of the License Period, the Buyer and the Partnership Entities shall cease all further use of Sellers' Marks and shall adopt new trademarks, service marks, and trade names that are not confusingly similar to Sellers' Marks. All rights not expressly granted in this
Section 4.14 with respect to Sellers' Marks are hereby reserved. In the event Buyer or any of the Partnership Entities breaches the provisions of this Section 4.14 and such breach is not cured (or reasonable steps taken to prevent its reoccurrence for such breaches that cannot be cured) within fifteen (15) business days after receipt by Buyer or such Partnership Entity of written notice of such breach, the Selling Parties may immediately terminate the License Period upon fifteen (15) days written notice.

(b) No later than ninety (90) days following the Closing Date, Buyer shall have caused each of the Partnership Entities listed on Schedule 4.14 hereof to change its legal name so that there is no longer any reference therein to the name "Williams" or any variation, derivation or abbreviation thereof, and in connection therewith, Buyer shall cause each such Partnership Entity to make all necessary filings of certificates with the Secretary of State of the State of Delaware and to otherwise amend its Organizational Documents by such date.

SECTION 4.15. MAXIMUM AMOUNT OF CERTAIN OF BUYER'S COSTS AND EXPENSES.

Notwithstanding any other provision of this Agreement, all (i) Implementation Costs and (ii) one-time costs and capital expenditures related to (A) the transition, transfer or conveyance of assets, operations or employees from the Selling Parties or Parent to the Buyer or the Partnership Entities or (B) the changing of the names of the Partnership Entities (up to a maximum amount of $650,000 plus reasonable legal expenses and filing fees in the case of this clause (B)), in excess in the aggregate of $5,000,000 (the "EXPENSE LIMIT") incurred by Buyer or the Partnership Entities that would otherwise be borne by Buyer or the Partnership Entities (without reimbursement) shall instead be borne by the Selling Parties or promptly reimbursed by the Selling Parties to Buyer or the Partnership Entities; provided, however, that the Expense Limit shall only apply to costs, expenses and capital expenditures incurred by Buyer or the Partnership Entities within twelve (12) months of the Closing Date. Other than the costs, expenses and capital expenditures referred to in the immediately preceding sentence, all costs, expenses and capital expenditures incurred by Buyer or the Partnership Entities in connection with consummation of the transactions contemplated in this Agreement and the Transaction Documents shall not be included in the Expense Limit nor be subject of any obligation of the Selling Parties or any of their Affiliates to pay or reimburse such costs, expenses and capital expenditures, including if applicable the cost and expense of relocating Transferred Employees, property or assets from the One Williams Center building in Tulsa, Oklahoma, except pursuant to the Transition Services Agreement or as otherwise agreed to by the parties.

SECTION 4.16. OFFICE LEASE; OFFICE FURNITURE AND EQUIPMENT; OFFICE SUPPLIES.

Buyer and the Selling Parties shall negotiate in good faith to enter into a lease, as soon as reasonably practicable following the Closing Date, between the Selling Parties or an Affiliate, as lessor, and Buyer or a Partnership Entity, as lessee, for a term of not less than five (5) years and at a rate comparable to that for similar unfurnished commercial space in Tulsa, Oklahoma, subject to the immediately succeeding sentence, to provide the office space at One Williams Center in Tulsa, Oklahoma, currently occupied by the Transferred Employees and the IT Assets transferred to Buyer or the Partnership Entities under the IT Migration Plan or such other or additional space in One Williams Center as may be mutually agreed upon. The lease will also provide for Williams to provide PBX services to Buyer and the Partnership Entities for the term of such lease, at a cost that is agreed upon by the parties and will be incorporated into such lease. At such time as Buyer and the Partnership Entities relocate from the One Williams Center building in Tulsa, Oklahoma, Williams agrees to purchase on behalf of Buyer and the Partnership Entities a system sufficient to provide PBX services to Buyer and the Partnership Entities in their new location. Upon the execution and delivery of such lease, the Selling Parties will transfer, without additional consideration, to the Partnership Entities (i) the material office furniture and equipment owned by the Selling Parties or their Affiliates and currently used by the Transferred Employees (at One Williams Center in Tulsa, Oklahoma) and (ii) office supplies of the type currently used by such Transferred Employees in a quantity sufficient to last for approximately ninety (90) days assuming customary usage in accordance with past practices. Effective as of the Closing, regardless of the execution of such lease, the Selling Parties hereby transfer, without additional consideration, to the Partnership Entities all office furniture owned by the Selling Parties or their Affiliates that is currently used by the Transferred Employees or the Partnership Entities at locations other than One Williams Center in Tulsa, Oklahoma.

SECTION 4.17. NO SOLICITATION; TERMINATION OF DISCUSSIONS.

(a) From and after the date hereof, none of the Selling Parties nor their Affiliates (other than the Partnership Entities), officers, directors, employees, affiliates, stockholders, representatives, agents, nor anyone acting on behalf of them shall (and, subject to Section 4.17(b) hereof, the Selling Parties shall use their reasonable best efforts to cause the Partnership Entities not to), directly or indirectly, encourage, solicit, engage in discussions or negotiations with, or provide any information to, any Person (other than Buyer or its representatives) concerning any merger, sale of assets, purchase or sale of Securities or similar transaction involving the Partnership Entities unless this Agreement has been terminated pursuant to and in accordance with Article VII hereof.

(b) Notwithstanding the provision of Section 4.17(a) above, the board of directors of the New Company shall be entitled to take (and to cause any of the other Partnership Entities to take) any action otherwise prohibited by such Section 4.17(a) in response to any inquiry, contact or proposal received by New Company, its board of directors or any of the other Partnership Entities from a Person that is not an Affiliate of the Selling Parties or the Partnership Entities, if: (i) any discussions and exchanges of information between New Company (or the other Partnership Entities) and such third party are subject to a customary confidentiality agreement that will allow for the disclosure to Buyer provided in Section 4.17(c) below, (ii) such

inquiry, contact or proposal includes a proposal to acquire at least a majority of the outstanding Common Units held by Persons that are not Affiliates of the Selling Parties or a majority in value of the consolidated assets of the Partnership Entities, (iii) such inquiry, contact or proposal from any such non-Affiliated Person was not received in violation of Section 4.17(a) and (iv) the board of directors of the New Company shall have determined in its good faith judgment, after consultation with legal counsel, that any failure to take such action would be inconsistent with the fiduciary duties of the New Company, as the general partner of the Partnership, to the holders of Common Units under the Delaware LP Act. The Selling Parties agree that they will notify Buyer immediately if any such inquiry, contact or proposal is received by New Company, its board of directors or any of the other Partnership Entities or their respective representatives, and, to the extent known by the Selling Parties, thereafter shall keep Buyer informed, on a reasonably current basis, on the status of any such inquiry, contact or proposal and a resulting negotiations or discussions.

(c) In the event that the New Company enters into a definitive agreement for a transaction ("DEFINITIVE TRANSACTION AGREEMENT") referred to in clause (ii) of Section 4.17(b) above, Buyer will have a period of thirty (30) days from the date the Selling Parties notify Buyer of same (which notice (x) may be given orally, provided it is promptly confirmed in writing and
(y) shall include a description of the transaction and consideration to be paid by the acquiring Person) to evaluate such proposed transaction (and the dates set forth in Sections 7.1(f) and 7.1(g) hereof shall be extended as necessary to accommodate such 30-day period), and after the expiration of such 30-day period, Buyer may terminate this Agreement at any time while such Definitive Transaction Agreement remains in effect; provided, however, that if Buyer terminates this Agreement while such a Definitive Transaction Agreement is in effect, then the Selling Parties shall reimburse the Buyer and its Affiliates for their reasonable out-of-pocket expenses (supported by appropriate documentation therefore) incurred in connection with the transactions contemplated hereby, but in no event shall the amount payable by the Selling Parties pursuant to this proviso exceed $5,000,000.

(d) In the event that the Partnership calls a meeting of unitholders with a record date prior to the Closing Date (including a special meeting to consider the approval of a Definitive Transaction Agreement) and the Closing occurs prior to such meeting, the Selling Parties agree to grant to Buyer, effective at Closing, an irrevocable proxy to vote the WES Units, WNGL Units and the Class B Common Units with respect to any matter to be considered at such meeting.

SECTION 4.18. CONFIRMATION OF TERMINATION OF OLD OMNIBUS AGREEMENT.

Upon the receipt by Buyer from the Selling Parties or Parent of a written request after the Closing, Buyer shall use its best efforts to cause the applicable Partnership Entities to confirm the termination of the Old Omnibus Agreement as promptly as practicable following receipt of such request.

SECTION 4.19. NEW COMPANY INTERCOMPANY ACCOUNTS.

At Closing, all cash on hand at the New Company will be distributed to Williams. All intercompany accounts between the New Company, on the one hand, and Parent, Selling Parties

and their Affiliates (other than the Partnership Entities), on the other hand, shall be zeroed at Closing (irrespective of the terms of payment or balances of such intercompany accounts), with no obligation on the part of any party to make any payment with respect to any such intercompany accounts.

SECTION 4.20. CERTAIN COSTS AND EXPENSES OF BOARD OF DIRECTORS OF NEW COMPANY.

The Selling Parties and Parent shall promptly reimburse the Partnership for costs and expenses of third parties borne by the Board of Directors of New Company in consideration of the transactions contemplated by this Agreement and the Transaction Documents that exceed $200,000.

SECTION 4.21. NEW COMPANY AUDITED FINANCIAL STATEMENTS.

As soon as practicable after the date of this Agreement, the Selling Parties shall provide Buyer with audited balance sheets, as of December 31, 2002 and December 31, 2001, and audited income statements and statements of cash flows for the 12-month period ended December 31, 2002 and the period from February 10, 2001 through December 31, 2001, in each case of the New Company and its predecessor in interest.

ARTICLE V.
CONDITIONS TO OBLIGATIONS OF BUYER

The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by Buyer in its sole discretion; provided, that Buyer cannot waive, without the consent of the Selling Parties, the conditions specified in Section 5.4 relating to the receipt of consents required under the Parent Credit Facility and the Parent Credit Facility Security Documents and the receipt of a release under the Parent Credit Facility Liens:

SECTION 5.1. RECEIPT OF DOCUMENTS.

The Selling Parties shall have delivered, or be standing ready to deliver, to Buyer the items specified in Sections 1.2(a)(i), 1.2(a)(ii), 1.2(a)(iii) and 1.2(a)(iv), in each case duly executed and dated the Closing Date.

SECTION 5.2. REPRESENTATIONS AND WARRANTIES OF THE SELLING PARTIES.

All representations and warranties made by the Selling Parties in this Agreement that are not qualified by materiality or Material Adverse Effect shall be true and correct in all material respects on and as of the Closing Date as if again made by the Selling Parties on and as of such date, and all representations and warranties that are qualified by materiality or Material Adverse Effect shall be true and correct on the Closing Date as if made by the Selling Parties on and as of such date; and Buyer shall have received a certificate dated the Closing Date and signed by a senior executive officer of each of the Selling Parties to that effect. Any entitlement of the Partnership Entities to indemnity under the Additional Partnership Indemnity Agreements or any

other agreement shall in no way influence the determination as to whether all such representations and warranties are true and correct in all material respects (or true and correct) on and as of the Closing Date. Notwithstanding the foregoing, the representations and warranties made by the Selling Parties in
Section 2.25 shall be deemed to be true and correct in all material respects unless written notices from customers or shippers that they will discontinue their business relationship with any of the Partnership Entities (or, to the Knowledge of the Selling Parties, threats of any such action from material shippers or customers) have been received by the Parent, the Selling Parties or the Partnership Entities which represent, in the aggregate, more than $22.0 million in the Partnership's consolidated annual earnings before interest expenses, taxes, depreciation and amortization; provided, however, that Buyer shall be entitled to consider any such discontinued business, together with other adverse effects on the Partnership Entities, for purposes of Section 5.11.

SECTION 5.3. PERFORMANCE OF SELLING PARTIES' OBLIGATIONS.

The Selling Parties shall have performed in all material respects all obligations required under this Agreement to be performed by them on or before the Closing Date, and Buyer shall have received a certificate dated the Closing Date and signed by a senior executive officer of each of the Selling Parties to that effect.

SECTION 5.4. CONSENTS AND APPROVALS.

The Selling Parties and Parent shall have received all consents required under the Parent Credit Facility and the Parent Credit Facility Security Documents. The Selling Parties shall have received a full release of all Parent Credit Facility Liens and of each of the Partnership Entities that is party to any Parent Credit Facility Security Document from all liabilities, obligations and commitments of any Partnership Entity thereunder, in form and substance reasonably satisfactory to Buyer, and the Selling Parties and Parent shall have delivered all documents in connection therewith as the Buyer may reasonably request. All consents, waivers, authorizations and approvals set forth on Schedule 2.7 shall have been duly obtained and shall be in full force and effect on the Closing Date. The Selling Parties or Parent shall have received all consents required in connection with the last matter listed on Schedule 2.7 as of the date of this Agreement, or alternatively, Buyer shall have received an opinion of counsel dated as of the Closing Date, in form and substance reasonably satisfactory to Buyer, that no such consent is necessary.

SECTION 5.5. NO VIOLATION OF ORDERS.

No preliminary or permanent injunction or other order issued by any Governmental Authority that declares this Agreement or any of the Transaction Documents invalid or unenforceable in any respect or that prevents the consummation of the transactions contemplated hereby or thereby shall be in effect; and no action or proceeding before any Governmental Authority shall have been instituted by a Governmental Authority or threatened by any Government Authority that seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or any of the Transaction Documents or that challenges the validity or enforceability of this Agreement or any of the Transaction Documents.

SECTION 5.6. DIRECTOR RESIGNATIONS.

The Buyer shall have received the effective resignations of each of the directors of the New Company, other than those directors who are not a director, officer, employee or agent of Parent or its Affiliates, or as otherwise agreed to in writing by the Buyer, and all actions shall have been taken so that immediately upon the Closing designees or nominees of the Buyer shall constitute a majority of the members of the Board of Directors of the New Company (including designees or nominees that are independent directors within the meaning of the Partnership Agreement).

SECTION 5.7. EMPLOYMENT

Buyer shall have arranged acceptable employment arrangements with each of the Key Executives; provided, that no condition to Closing shall exist under this Section 5.7 unless Buyer has made an offer of employment to each such Key Executive on terms that in the aggregate are not materially less favorable than the employment terms that each such Key Executive currently enjoys with the Selling Parties or an Affiliate thereof.

SECTION 5.8. LEGAL OPINION.

Buyer shall have received an opinion(s) of Andrews & Kurth L.L.P., counsel to Parent and Selling Parties, and/or such other counsel reasonably acceptable to Buyer, dated the Closing Date, substantially in the form of Exhibit 5.8.

SECTION 5.9. DEBT FINANCING.

Buyer shall have obtained the funds necessary to pay the First Payment of the Purchase Price.

SECTION 5.10. ABSENCE OF SPECIFIED EVENTS.

None of the actions referred to in Section 4.1(a) through Section 4.1(o) shall have occurred and be continuing, except to the extent permitted under Section 4.1 hereof; provided, that if any such actions have occurred at any time after August 31, 2003, the date specified in Section 7.1(g) hereof shall, in Buyer's sole discretion, be extended to a date 30 days after the date the Buyer first receives notice of such occurrence.

SECTION 5.11. MATERIAL ADVERSE EFFECT.

No Material Adverse Effect shall have occurred since the date of this Agreement.

SECTION 5.12. FINANCIAL ADVISOR'S OPINION.

The Boards of Directors of the Selling Parties and Parent shall have received an opinion (a copy of which shall have been furnished to the Buyer) from a nationally recognized investment bank, dated as of the date of this Agreement, to the effect that the consideration (as defined therein) to be paid by Buyer to each of the Selling Parties pursuant to this Agreement constitutes reasonably equivalent value for the Securities sold by each such Selling Party.

SECTION 5.13. WAIVERS OF EXISTING DEBT AGREEMENTS.

The Selling Parties shall have received a written waiver from each of
(a) the noteholders under the Note Purchase Agreement, dated as of October 1, 2002, among Williams Pipe Line Company, LLC and the noteholders party thereto and (b) the lenders under the Credit Agreement, dated as of February 6, 2001, among Williams OLP, L.P., Bank of America, N.A., as administrative agent, Lehman Commercial Paper, Inc., as syndication agent, Suntrust Bank, as documentation agent, and the lenders party thereto, in each case in substantially the form set forth on Schedule 5.13 (or such other form as may reasonably be agreed to by Buyer) for the purpose, or in the manner, described on such schedule.

ARTICLE VI.
CONDITIONS TO OBLIGATIONS OF SELLING PARTIES

The obligations of the Selling Parties to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by the Selling Parties in their sole discretion:

SECTION 6.1. RECEIPT OF DOCUMENTS.

Buyer shall have delivered, or be standing ready to deliver, to the Selling Parties the items specified in Section 1.2(b), in each case duly executed and dated the Closing Date.

SECTION 6.2. REPRESENTATIONS AND WARRANTIES OF BUYER.

All representations and warranties made by Buyer in this Agreement that are not qualified by materiality or material adverse effect shall be true and correct in all material respects on and as of the Closing Date as if again made by Buyer on and as of such date, and all representations and warranties that are qualified by materiality or material adverse effect shall be true and correct on the Closing Date as if made by the Buyer on and as of such date; and the Selling Parties shall have received a certificate dated the Closing Date and signed by a senior executive officer of Buyer to that effect.

SECTION 6.3. PERFORMANCE OF BUYER'S OBLIGATIONS.

Buyer shall have performed in all material respects all obligations required under this Agreement to be performed by it on or before the Closing Date, and the Selling Parties shall have received a certificate dated the Closing Date and signed by a senior executive officer of Buyer to that effect.

SECTION 6.4. CONSENTS AND APPROVALS.

All consents, waivers, authorizations and approvals set forth on Schedule 3.4 shall have been duly obtained and shall be in full force and effect on the Closing Date.

SECTION 6.5. NO VIOLATION OF ORDERS.

No preliminary or permanent injunction or other order issued by any Governmental Authority that declares this Agreement or any of the Transaction Documents invalid or unenforceable in any respect or that prevents the consummation of the transactions contemplated hereby or thereby shall be in effect; and no action or proceeding before any Governmental Authority shall have been instituted by a Governmental Authority or threatened by any Governmental Authority that seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or any of the Transaction Documents or that challenges the validity or enforceability of this Agreement or any of the Transaction Documents.

SECTION 6.6. LEGAL OPINION.

The Selling Parties shall have received an opinion of Vinson & Elkins L.L.P., counsel to Buyer, dated the Closing Date substantially in the form of Exhibit 6.6.

SECTION 6.7. ASSUMPTION OF CONSENT DECREE

Buyer shall have agreed to be bound by the Consent Decree, only to the extent (i) the Consent Decree is applicable to the properties, assets or operations of the Partnership Entities and (ii) required by the Federal Trade Commission after consultation therewith. Nothing herein shall prevent Buyer from exercising any rights under the Consent Decree, including the right to petition to the Federal Trade Commission to modify or terminate the Consent Decree as it applies to Buyer or the Partnership Entities.

ARTICLE VII.
TERMINATION AND ABANDONMENT

SECTION 7.1. METHODS OF TERMINATION; UPSET DATE.

This Agreement may, or in the case of Section 7.1(g) will, be terminated and the transactions contemplated hereby may be abandoned at any time before the Closing:

(a) by the mutual written consent of the Selling Parties and Buyer;

(b) by the Selling Parties, if Buyer fails to comply with any of its covenants or agreements contained herein, or breaches their representations and warranties contained herein, which failure to comply or breach is not cured within 30 days after receipt by Buyer from the Selling Parties of written notice specifying particularly such failure to comply or breach, and such failure to comply or breach would result in a failure to satisfy the conditions to Closing set forth in Sections 6.2 and/or 6.3;

(c) by Buyer, if the Selling Parties fail to comply with any of their covenants or agreements contained herein, or breaches its representations and warranties contained herein, which failure to comply or breach is not cured within 30 days after receipt by the Selling Parties from Buyer of written notice specifying particularly such failure to comply or breach, and such failure to comply or breach would result in the failure to satisfy the conditions to Closing set forth in Sections 5.2 and/or 5.3;

(d) by Buyer in accordance with Section 4.17(c) hereof;

(e) by the Selling Parties or Buyer, if a Governmental Authority shall have issued an order, decree or ruling or taken any other action (which order, decree or ruling the parties hereto shall use their commercially reasonable efforts to lift), which permanently restrains, enjoins or otherwise prohibits the transactions contemplated by this Agreement and which order, decree, ruling or other action is not subject to appeal;

(f) by written notice of the Selling Parties by not later than 5:00 p.m. New York time on July 3, 2003 if (i) the Closing has not occurred on or before 11:59 p.m. New York time on June 30, 2003, (ii) the Selling Parties have satisfied, or are standing ready and able to satisfy, as of June 30, 2003, all of the conditions precedent under Article V (other than the condition set forth in Section 5.9, as to which the Selling Parties shall not be in breach of their covenant contained in the second sentence of Section 4.6), and (iii) none of the Selling Parties is in breach of any provision of this Agreement; or

(g) without any action required by the Selling Parties or Buyer, if the Closing has not occurred by 11:59 p.m. New York time on September 30, 2003.

SECTION 7.2. EFFECT OF TERMINATION.

In the event of termination of this Agreement pursuant to Section 7.1(a), (d), (e), (f) or (g) hereof, this Agreement shall forthwith become void and there shall be no liability on the part of Buyer or the Selling Parties (or their respective officers or directors), except based upon obligations set forth in Sections 4.17(c), 9.3 and 9.4 hereof, and except that Buyer shall thereupon promptly return or destroy (and cause its agents and representatives to return or destroy) to the Selling Parties all documents (and copies thereof) furnished to Buyer and the parties shall continue to adhere to the Confidentiality Agreement. Notwithstanding the foregoing or any other provision of this Agreement, termination of this Agreement pursuant to Section 7.1(b) or Section 7.1(c) shall not in any way limit or restrict the rights and remedies of any party hereto against any other party hereto that has violated or breached any of the representations, warranties, agreements or other provisions of this Agreement prior to termination hereof.

ARTICLE VIII.
SURVIVAL; INDEMNIFICATION

SECTION 8.1. SURVIVAL.

(a) The representations and warranties of the Selling Parties contained herein or in any certificates or other documents delivered pursuant to this Agreement on the Closing Date shall survive the Closing for a period of eighteen (18) months following the Closing Date; provided however, that (i) the representations and warranties set forth in Section 2.21 (Environmental; Health and Safety Matters) shall survive for a period of five
(5) years following the Closing Date, (ii) the representations and warranties set forth in Sections 2.2 and 2.3 (Capitalization; Title), Section 2.5 (Validity of Agreement; Authorization), Section 2.18 (Brokers) and Section 2.27 (Excluded Assets) shall survive indefinitely and (iii) the representations and warranties set forth in Section 2.10 (Taxes) shall survive for a period equal to thirty
(30) days after the expiration of the applicable statute of limitations
(including extensions)

for each Tax and taxable year. The covenants and agreements in this Article VIII shall survive the Closing and shall remain in full force and effect for such period as is necessary to resolve any claim made with respect to any representation, warranty, covenant or agreement contained herein during the survival period thereof, and the covenants and agreements of the Parties contained in Articles IV and IX of this Agreement shall survive the Closing for
(x) the time period(s) set forth in the respective Sections contained in such Articles, or (y) if no time period is so specified, without any contractual limitation on the period of survival.

(b) The representations and warranties of Buyer contained herein or in any certificates or documents delivered pursuant to this Agreement or the Closing shall survive the Closing for a period of eighteen (18) months following the Closing Date; provided, however, that the representations and warranties set forth in Section 3.2 (Validity of Agreement) and Section 3.7 (Brokers) shall survive indefinitely.

SECTION 8.2. INDEMNIFICATION COVERAGE.

(a) From and after the Closing, the Selling Parties shall indemnify and defend, save and hold Buyer, the Partnership Entities and their Affiliates and each of their officers, directors, employees and agents (collectively, the "BUYER INDEMNIFIED PARTIES") harmless if any such Buyer Indemnified Party shall suffer any damage, judgment, fine, penalty, demand, settlement, liability, loss, cost, Tax, expense (including reasonable attorneys', consultants' and experts' fees), claim or cause of action (each, a "LOSS," and collectively, "LOSSES") arising out of, relating to or resulting from: