Document:

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                                                                    EXHIBIT 10.6
                                                                [Execution Copy]

                               SECURITY AGREEMENT

         This SECURITY AGREEMENT (this "Security Agreement"), dated as of July
31, 2002, among THE WILLIAMS COMPANIES, INC., a Delaware corporation (the
"Company"), and each of the Subsidiaries which is a signatory hereto or which
subsequently becomes a party hereto in accordance with the terms hereof
(together, with the Company, the "Grantors"), in favor of CITIBANK, N.A., as
collateral trustee ("Collateral Trustee") for the benefit of the holders of the
Secured Obligations (as defined in Section 1.1 below).

                             PRELIMINARY STATEMENTS

         A. The Company and/or its Subsidiaries have entered into multiple
financing transactions with groups of lenders and financial institutions
(collectively, referred to herein as the "Financial Institutions"). Such
financing transactions are governed by the credit and security documents more
fully described in Schedule III hereto (such documents being collectively
referred to herein, as the same may be amended and modified from time to time,
as the "Credit Documents"). "Borrowers" as used herein shall mean the borrowers
under any one or more of the Credit Documents.

         B. The Company, several of its Subsidiaries and Citibank, N.A., as
collateral trustee have entered into a Collateral Trust Agreement dated as of
July 31, 2002 (the "Collateral Trust Agreement"), which provides for collateral
to be held by Citibank, N.A., as collateral trustee for the benefit of the
Financial Institutions.

         C. It is a condition to certain transactions under the Credit
Documents, that each of the Grantors shall have executed and delivered this
Security Agreement.

         D. The Company is the principal financing entity for all capital
requirements of its Subsidiaries, and from time to time the Company has made
capital contributions and advances to its Subsidiaries, including all Grantors
other than the Company. Other than the Company each of the Grantors is a wholly
owned Subsidiary of the Company and will derive substantial direct or indirect
benefit from the transactions contemplated by the Credit Documents.

                                    AGREEMENT

         Therefore, in order to induce the Financial Institutions to enter into
and/or continue certain financing transactions described in the Credit
Documents, each of the Grantors hereby agrees with Collateral Trustee for its
benefit and the ratable benefit of the Collateral Trustee and the other
Financial Institutions as follows:

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                                    ARTICLE I

                                   DEFINITIONS

         Section 1.1 Definitions. The following terms shall have the meanings
specified below, and capitalized terms used in this Security Agreement but not
defined herein shall have the meanings set forth for such terms in the Credit
Agreement dated as of July 31, 2002 (the "New Credit Agreement"), among Company
and the Financial Institutions named therein.

         "Account" or "Accounts" means "accounts" as that term is defined in the
UCC.

         "Applicable Law" or "Applicable Laws" means all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders and approvals
of each Governmental Authority having jurisdiction over the Grantors, the
Collateral Trustee, the Financial Institutions, the Collateral or the Credit
Documents, in each case, as amended, and any judicial or administrative
interpretation thereof, including any judicial order, consent, decree or
judgment applicable to the Grantors, the Collateral Trustee, the Financial
Institutions, the Collateral or the Credit Documents.

         "Chattel Paper" means "chattel paper" as that term is defined in the
UCC and any Electronic Chattel Paper and Tangible Chattel Paper owned by any one
or more of the Grantors.

         "Collateral" has the meaning set forth in Section 2.1 of this Security
Agreement.

         "Contract" or "Contracts" means all contracts to which any one or more
of the Grantors now is, or hereafter will be, bound, or a party, beneficiary or
assignee (other than rights evidenced by Chattel Paper, Documents or
Instruments), all Insurance Contracts, and all exhibits, schedules and other
attachments to such contracts, as the same may be amended, supplemented or
otherwise modified or replaced from time to time.

         "Contract Documents" means all Instruments, Chattel Paper, letters of
credit, bonds, guarantees or similar documents evidencing, representing, arising
from or existing in respect of, relating to, securing or otherwise supporting
the payment of, the Contract Rights.

         "Contract Rights" has the meaning set forth in Section 5.1 of this
Security Agreement.

         "Document" or "Documents" means any "document" as that term is defined
in the UCC, including, without limitation, a bill of lading, dock warrant, dock
receipt, warehouse receipt or order for the delivery of goods, and also any
other document which in the regular course of business or financing is treated
as adequately evidencing that the person in possession of it is entitled to
receive, hold and dispose of the document and the goods it covers.

         "Electronic Chattel Paper" means "electronic chattel paper" as that
term is defined in the UCC.

         "Equipment" means any equipment now or hereafter owned or leased by any
of the Grantors, or in which any Grantor holds or acquires any other right,
title or interest, constituting "equipment" under the UCC, including without
limitation all field lines and drilling equipment,

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purification equipment, liquefaction equipment, vaporizing equipment, and all
other machinery, tools, office equipment, furniture, furnishings, fixtures,
vehicles, motor vehicles, and any manuals, instructions, blueprints, computer
software (including software that is imbedded in and part of the equipment) and
similar items which relate to the above, and any and all additions,
substitutions and replacements of any of the foregoing, wherever located
together with all improvements thereon and all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.

         "Event of Default" means any default or event of default, however
denominated, under any Credit Document.

         "Fixture" or "Fixtures" means any fixture or fixtures now or hereafter
owned or leased by any of the Grantors, or in which any of the Grantors holds or
acquires any other right, title or interest, constituting "fixtures" under the
UCC, including without limitation all pipe which is part of a pipeline system
owned by any of the Grantors, and any and all additions, substitutions and
replacements of any of the foregoing, wherever located together with all
improvements thereon and all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.

         "General Intangible" or "General Intangibles" means all general
intangibles now or hereafter owned by any of the Grantors, or in which any of
the Grantors holds or acquires any other right, title or interest, constituting
"general intangibles" or "payment intangibles" under the UCC, including, but not
limited to, all trademarks, trademark applications, trademark registrations,
trade names, fictitious business names, business names, company names, business
identifiers, prints, labels, trade styles and service marks (whether or not
registered), trade dress, including logos and/or designs, copyrights, patents,
patent applications, goodwill of such entity's or its affiliate's business
symbolized by any of the foregoing, trade secrets, license rights, license
agreements, permits, franchises, and any rights to tax refunds to which any of
the Grantors is now or hereafter may be entitled.

         "Governmental Authority" shall mean any government, department,
ministry, commission, board, bureau, agency, regulatory authority,
instrumentality of any government (central, federal, state, municipal or local),
judicial, legislative or administrative body, domestic or foreign, having
jurisdiction over the matter or matters in question.

         "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.

         "Instrument" mean an "instrument" as that term is defined in the UCC,
including, without limitation, any Negotiable Instrument, or any other writing
which evidences a right to the payment of money and is not itself a security
agreement or lease and is of a type which is in the ordinary course of business
transferred by delivery with any necessary endorsement or assignment (other than
Instruments constituting Chattel Paper).

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         "Insurance Contracts" means all contracts and policies of insurance and
re-insurance maintained or required to be maintained by or on behalf of any of
the Grantors under the Credit Documents.

         "Inventory" shall mean all of the inventory of any of the Grantors, or
in which any of the Grantors holds or acquires any right, title or interest, of
every type or description, now owned or hereafter acquired and wherever located,
whether raw, in process or finished, and all materials usable in processing the
same and all documents of title covering any inventory, including, without
limitation, work in process, materials used or consumed in any of the Grantors'
business, now owned or hereafter acquired or manufactured by any of the Grantors
and held for sale in the ordinary course of its business, all present and future
substitutions therefore, parts and accessories thereof and all additions
thereto, all Proceeds thereof and products of such inventory in any form
whatsoever, and any other item constituting "inventory" under the UCC.

         "Inventory Records" shall mean all books, records and other property
and General Intangibles at any time relating to Inventory.

         "Investment Property" means "investment property" as that term is
defined in the UCC, including, without limitation, all securities (whether
certificated or uncertificated), security entitlements, securities accounts,
commodity contracts, and commodity accounts.

         "Lien" or "Liens" means any mortgage, deed of trust, pledge,
assessment, security interest, adverse claim, levy, charge, option, right of
first refusal, charge, debenture, indenture, easement, right-of-way,
restriction, encroachment, license, lease, security agreement, or other
encumbrance of any kind and other restrictions or limitations on the use or
ownership of personal property or irregularities in title thereto.

         "Negotiable Instrument" means a "negotiable instrument" as that term is
defined in the UCC.

         "Permitted Liens" means those certain Liens described on Schedule III
to the New Credit Agreement.

         "Proceeds" means "proceeds" as that term is defined in the UCC, and
includes, but is not limited to, all proceeds of any or all of the Collateral,
including without limitation (a) any and all proceeds of, and all claims for,
any insurance, indemnity, warranty or guaranty payable from time to time with
respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any person acting under
color of governmental authority), (c) all proceeds received or receivable when
any or all of the Collateral is sold, exchanged or otherwise disposed, whether
voluntarily, involuntarily, in foreclosure or otherwise, and (d) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral.

         "Receivables" means all Accounts and all of any of the Grantors' rights
to payment for goods sold or leased, services performed, or otherwise, whether
now in existence or arising from time to time hereafter, including, without
limitation, rights arising under any of the Contracts or

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evidenced by an account, note, contract, security agreement, Chattel Paper, or
other evidence of indebtedness or security, together with all of the right,
title and interest of any of the Grantors in and to (a) all security pledged,
assigned, hypothecated or granted to or held by any of the Grantors to secure
the foregoing, (b) all of any of the Grantors' right, title and interest in and
to any goods or services, the sale of which gave rise thereto, (c) all
guarantees, endorsements and indemnifications on, or of, any of the foregoing,
(d) all powers of attorney granted to any of the Grantors for the execution of
any evidence of indebtedness or security or other writing in connection
therewith, (e) all books, correspondence, credit files, records, ledger cards,
invoices, and other papers relating thereto, including without limitation all
similar information stored on a magnetic medium or other similar storage device
and other papers and documents in the possession or under the control of any of
the Grantors or any computer bureau from time to time acting for any of the
Grantors, (f) all evidences of the filing of financing statements and other
statements granted to any of the Grantors and the registration of other
instruments in connection therewith and amendments thereto, notices to other
creditors or secured parties, and certificates from filing or other registration
officers, (g) all credit information, reports and memoranda relating thereto,
and (h) all other writings related in any way to the foregoing.

         "Secured Obligations" shall mean the Guaranteed Obligations and Bonds
(as such term is defined in the Collateral Trust Agreement).

         "Secured Party" means, collectively, Collateral Trustee and the
Financial Institutions.

         "Security Agreement" shall mean this Security Agreement, as the same
may be modified, supplemented or amended from time to time in accordance with
its terms.

         "Tangible Chattel Paper" means "tangible chattel paper" as that term is
defined in the UCC.

         "Titled Vehicles" means vehicles in which a security interest can not
be perfected by filing a financing statement under the UCC.

         "UCC" shall mean the Uniform Commercial Code in effect in the State of
New York, as amended from time to time.

                                   ARTICLE II

                               SECURITY INTERESTS

         Section 2.1 Pledge, Assignment and Grant of Security Interests. As
collateral security for the prompt and complete payment and performance when due
of all Secured Obligations, each Grantor, severally, hereby assigns and pledges
to Collateral Trustee for the benefit of the Financial Institutions and hereby
grants to the Collateral Trustee for the benefit of the Financial Institutions a
lien on and continuing security interest in all of such Grantor's right, title
and interest in, to and under (all items described in this Section 2.1, whether
now owned or hereafter acquired by such Grantor and wherever located and whether
now existing or hereafter arising, collectively, the "Collateral"):

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         (a) all Contracts, all Contract Rights, all Contract Documents and each
             and every document granting security to any of the Grantors under
             any such Contract, and any Instrument related to or arising because
             of any such Contract;

         (b) all Receivables;

         (c) all Investment Property;

         (d) all General Intangibles;

         (e) all Chattel Paper;

         (f) all Documents;

         (g) all Equipment;

         (h) all Inventory;

         (i) all Fixtures;

         (j) all amounts from time to time held in any checking, savings,
             deposit or other account of any of the Grantors, all monies,
             proceeds or sums due or to become due therefrom or thereon and all
             documents (including, but not limited to passbooks, certificates
             and receipts) evidencing all funds and investments held in such
             accounts;

         (k) all Governmental Requirements now or hereafter held by any of the
             Grantors (except that any Governmental Requirement which would by
             its terms or under Applicable Law become void, voidable, terminable
             or revocable by being subjected to the Lien of this Security
             Agreement or in which a Lien is not permitted to be granted under
             Applicable Law, is hereby excluded from such Lien to the extent
             necessary so as to avoid such voidness, voidability, terminability
             or revocability);

         (l) all rights to receive a payment under any hedging agreement in
             connection with a termination thereof;

         (m) without limiting the generality of the foregoing, all other
             personal property, goods, Instruments, credits, claims, demands and
             assets of any of the Grantors whether now existing or hereafter
             acquired from time to time;

         (n) any and all additions, accessions and improvements to, all
             substitutions and replacements for and all products and Proceeds of
             or derived from all of the foregoing items described above in this
             Section 2.1; and

         (o) any and all Proceeds of any of the foregoing.

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         Section 2.2 After-Acquired Property. The security interest pledged,
assigned and granted to Collateral Trustee pursuant to this Security Agreement
is intended to extend to all Collateral of the kind that is the subject of this
Security Agreement which any of the Grantors may acquire at any time during the
continuation of this Security Agreement, irrespective of whether such Collateral
is in transit or in any of the Grantors' or Collateral Trustee's or any other
Person's constructive, actual, or exclusive occupancy or possession.

         Section 2.3 Obligations Independent. The obligations of each Grantor
under this Security Agreement are independent of the obligations of the
Borrowers, any other Grantor, or any other Person, and a separate action or
actions may be brought and prosecuted against any one or more of the Grantors to
enforce this Security Agreement, irrespective of whether any action is brought
against the Borrowers, any other Grantor, or any other Person or whether the
Borrowers, the Grantors, or any other Person is joined in any such action or
actions.

         Section 2.4 Obligations Absolute. Each Grantor agrees, severally, that
it will perform its obligations hereunder strictly in accordance with the terms
of this Security Agreement regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any of the Financial Institutions with respect thereto. The liability
of each of the Grantors under this Security Agreement shall be absolute and
unconditional irrespective of:

         (a) any lack of validity or enforceability of any Credit Document;

         (b) any change in the time, manner or place of payment of, or in any
             other term of, all or any of the Secured Obligations or any other
             liabilities, or any other amendment or waiver of or any consent to
             departure from any Credit Document, including, without limitation,
             any increase in the Secured Obligations or any other liabilities
             resulting from the extension of additional credit or otherwise;

         (c) any liquidation, dissolution or termination of existence of, or
             other change in, any Borrower or any other Person;

         (d) any bankruptcy, insolvency, receivership or other proceeding
             involving any Borrower, any one or more of the Grantors, or any
             other Person or any defense that may arise in connection with or as
             a result of any such bankruptcy, insolvency, receivership or other
             proceeding or otherwise;

         (e) any taking, exchange, release or non-perfection of any Collateral,
             or any taking, release or amendment or waiver of or consent to
             departure from any guaranty, for all or any of the Secured
             Obligations or any other liabilities;

         (f) any manner of application of Collateral, or proceeds thereof or of
             collections on account of any guaranty, to all or any of the
             Secured Obligations or any other liabilities, or any manner of sale
             or other disposition of any Collateral for all or any of the
             Secured Obligations or any other liabilities or of any other assets
             of any Borrower, any one or more of the Grantors, or any other
             Person; or

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         (g) any other circumstances which might otherwise constitute a defense
             available to, or a discharge of, any Borrower, any one or more of
             the Grantors, a surety or any other Person.

         Section 2.5 Security for Obligations. The security interests and other
rights granted pursuant to this Security Agreement secure, and the Collateral is
security for, the prompt performance and payment in full in cash when due,
whether at stated maturity, by acceleration or otherwise of the Secured
Obligations. Notwithstanding that the balance of the Secured Obligations may at
certain times be zero and that no Letters of Credit may at certain times be
outstanding, the Liens granted hereunder to the Collateral Trustee shall remain
in full force and effect at all times and with the same priority until the
payment in full in cash of the Secured Obligations, the termination of the
commitments, however described, under the Credit Documents, the repayment of all
obligations due with respect to the bonds and the expiration or termination of
all outstanding letters of credit provided under the Credit Documents (all such
commitments, repayment obligations and outstanding letters of credit are
referred to herein as the "Credit Document Commitments").

         Section 2.6 Grantors Remain Liable. Notwithstanding any other
provisions of this Security Agreement to the contrary, (a) each Grantor shall
remain severally liable to perform any and all obligations imposed on such
Grantor under the Credit Documents or with respect to the Collateral and to
perform any and all duties and obligations thereunder to the same extent as if
this Security Agreement had not been executed, (b) the exercise by Collateral
Trustee of any of its rights hereunder shall not release any of the Grantors
from any of its duties or obligations under the Credit Documents and (c) neither
Collateral Trustee nor any of the other Financial Institutions shall have any
obligation or liability under the Credit Documents by reason of this Security
Agreement, nor shall Collateral Trustee or any Financial Institution be
obligated to perform any of the obligations or duties of any of the Grantors
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.

         Section 2.7 Power of Attorney. Each Grantor hereby constitutes and
appoints Collateral Trustee as such Grantor's attorney-in-fact, at all of
Grantors' cost and expense, for which each Grantor shall be severally liable, to
exercise, in Collateral Trustee's discretion after the occurrence and during the
continuance of an Event of Default, all or any of the following powers, which,
being coupled with an interest, shall be irrevocable until all of the Secured
Obligations have been paid in full and all Credit Document Commitments have been
terminated:

         (a) to obtain and adjust insurance under insurance policies naming any
             of the Grantors as an insured party;

         (b) to receive, take, endorse, sign, assign, deliver and collect, all
             in Collateral Trustee's name or any Grantor's name, any and all
             checks, notes, drafts, and other documents or instruments relating
             to the Collateral;

         (c) to ask, demand, collect, sue for, recover, compromise, receive and
             give acquittance and receipts for moneys due and to become due
             under or in connection with the Collateral;

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         (d) to receive, open and dispose of all mail addressed to any of the
             Grantors with respect to the Collateral which comes into the
             possession of Collateral Trustee and to notify postal authorities
             to change the address for delivery thereof to such address as
             Collateral Trustee designates, with a copy of such notice to the
             affected Grantor;

         (e) to request from account debtors of any of the Grantors, in the
             affected Grantor's name or Collateral Trustee's name or that of
             Collateral Trustee's designee, information concerning the
             Receivables and the amounts owing thereon;

         (f) to transmit to account debtors indebted on Receivables notice of
             Collateral Trustee's interest therein;

         (g) to notify account debtors indebted on Receivables to make payment
             directly to Collateral Trustee; and

         (h) to take or bring, in any Grantor's name or Collateral Trustee's
             name, all steps, actions, suits or proceedings deemed by Collateral
             Trustee necessary or desirable to enforce or effect collection of
             any of the Collateral or otherwise to enforce compliance with the
             terms and conditions of any Contract or the rights of Collateral
             Trustee with respect to any of the Collateral.

         Section 2.8 Waiver. Each of the Grantors hereby waives promptness,
diligence, notice of acceptance and any other notice (except notices expressly
required to be given to the Grantors under this Security Agreement) with respect
to any of the Secured Obligations and this Security Agreement and any
requirement that Collateral Trustee or any Financial Institution protect,
secure, perfect or insure any security interest or other Lien or any property
subject thereto or exhaust any right to take any action against any one or more
of the Grantors or any other Person or any of the Collateral.

         Section 2.9 Subrogation and Other Rights to Repayment. Each of the
Grantors hereby irrevocably waives any and all rights to which it may be
entitled (by operation of law or otherwise) by performing its obligations under
this Security Agreement (i) to be subrogated to the rights of the Financial
Institutions against any Borrowers or any of the other Grantors or (ii) to
receive any payment, in the nature of contribution or for any other reason, from
any Borrower or from any of the Grantors. If any amount shall be paid to any of
the Grantors on account of such subrogation rights or any of the Grantors
receives any such payment referred to in clause (ii) above, such Grantor agrees
to hold such amount or such payment, as the case may be, in trust for the
benefit of the Secured Party, and such Grantor agrees to forthwith pay such
amount or such payment, as the case may be, to the Collateral Trustee to be
credited against and applied upon the Secured Obligations, whether matured or
unmatured, in such order as may be determined by the Collateral Trustee.

         Section 2.10 Limitation on Grant. Secured Party and each of the
Grantors other than Borrower hereby acknowledge that the security interests
granted pursuant to this agreements and the obligations more fully described
herein are subject in all cases to the limitations more fully set out in Section
2.2 of Collateral Trust Agreement.

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                                  ARTICLE III

                GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS

In addition to such representations, warranties and covenants as are made by the
Borrowers and any one or more of the Grantors under the Credit Documents, which
representations, warranties and covenants are hereby deemed made and
incorporated into this Security Agreement each as though set forth in its
entirety herein, each Grantor, represents, warrants and covenants, as of the
date hereof and as of the date of each extension of credit under any of the
Credit Documents, as follows:

         Section 3.1 Security Documents. This Security Agreement, together with
(a) the filing of financing statements in the offices set forth on Schedule II
to this Security Agreement and (b) the delivery to Collateral Trustee or a third
party custodian of any Collateral in which a security interest is perfected by
possession, (although no such Collateral exists as of the date of this Security
Agreement other than the securities being pledged pursuant to the terms of the
Pledge Agreement dated as of even date herewith), is sufficient to create in
favor of Collateral Trustee for the benefit of the Collateral Trustee and the
Financial Institutions, as security for the payment and performance of the
Secured Obligations, a valid and enforceable perfected security interest in and
on all of the Collateral, to the extent that a security interest can be created
under (i) the laws which govern the creation of security interests hereunder or
(ii) any other Applicable Law, in favor of Collateral Trustee, and except with
respect to Titled Vehicles, superior to and prior to all Liens other than
Permitted Liens, except as such enforceability may be limited by (x) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws from
time to time in effect that affect creditors' rights generally or (y) general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).

         Section 3.2 No Liens. Each grantor shall defend the Collateral against
all Liens, other than Permitted Liens, and demands of all Persons (other than
the Secured Party) at any time claiming the same or any interest therein.

         Section 3.3 Chief Executive Office; Name; Records. Each Grantor's
principal place of business and its chief executive office is located at the
address indicated in Schedule I to this Security Agreement. The originals of all
Contracts, Contract Documents and documents evidencing Receivables of any of the
Grantors, and the only original books of accounts and records concerning the
Collateral are, and will continue to be, kept at the affected Grantor's address
at set forth in Schedule I to this Security Agreement or at such new location
for such principal place of business and chief executive office as such Grantor
may establish in accordance with the last sentence of this Section 3.3. None of
the Grantors shall establish a new location for its principal place of business
or change its name or its state of organization or carry on any business under
any name other than its current name until it has given to Collateral Trustee
not less than 30 days' prior written notice of its intention to do so, clearly
describing such new location or specifying such new name, as the case may be,
and providing such other information in connection therewith as Collateral
Trustee may reasonably request. Each Grantor's state of organization and exact
legal name, as reflected in its Certificate of Incorporation or other original
organization document approved by the Governmental Authority

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charged with approving such documents and authorizing and authenticating the
existence of entities in the applicable jurisdiction, is set forth in Schedule I
to this Security Agreement.

         Section 3.4 Financing Statements and Registrations. Each Grantor agrees
to sign and deliver to Collateral Trustee such financing statements or
registrations, in form suitable to reflect the security interests granted
hereunder, as Collateral Trustee reasonably determines are necessary or
desirable to establish and maintain a valid, enforceable, perfected (except with
respect to Titled Vehicles) security interest in the Collateral all in
accordance with the laws which govern perfection of the security interests
hereunder. Each Grantor will pay any applicable filing fees and related
expenses. Each Grantor authorizes Collateral Trustee to file in such
jurisdictions as determined by Collateral Trustee any such financing or
continuation statements, and amendments thereto, relating to all or any part of
the Collateral without the signature of each Grantor where permitted by
Applicable Law. Upon the request of any of the Grantors, Collateral Trustee
shall promptly deliver, or cause to be delivered, to such Grantor, at Grantor's
expense, copies of any such statements or amendments.

         Section 3.5 Delivery and Pledge of Collateral. Each Grantor shall
deliver and pledge to Collateral Trustee any and all Investment Property,
Instruments, Documents, Contract Documents or other Collateral or documents
evidencing the Collateral (in each case to the extent a security interest
therein may be perfected by possession), indorsed and/or accompanied by such
instruments of assignment and transfer and consents as Collateral Trustee may
request, all in such form and substance as Collateral Trustee may request in
order to perfect the security interests granted by this Security Agreement in
any Collateral, at the expense of such Grantor.

         Section 3.6 Control of Investment Property. Each Grantor shall take any
and all actions reasonably requested by Collateral Trustee to ensure that
Collateral Trustee has a first priority security interest in and "control"
(within the meaning of Section 8-106 of the UCC) of Collateral constituting
Investment Property and deposit accounts (as defined in the UCC).

         Section 3.7 Taxes. Each Grantor will pay promptly when due all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including without limitation, claims for labor, materials and
supplies) against any of the Collateral including, without limitation, the
Equipment and Inventory, provided, however, that such Grantor shall not be
required to pay or discharge any such tax, assessment, charge or claim that is
being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien resulting
therefrom attaches to its property and becomes enforceable against its other
creditors.

         Section 3.8 Insurance. Grantors shall maintain or cause to be
maintained, at all times during the term of this Security Agreement, property
damage insurance covering the Collateral as required pursuant to the terms of
the Credit Documents.

         Section 3.9 No Encumbrances. Each Grantor agrees that it will not
create, assume, incur or suffer to exist, or permit any of its Subsidiaries to
create, assume, incur or suffer to exist, any Lien on or in respect of any of
its property, whether now owned or hereafter acquired, or assign or otherwise
convey, or permit any such Subsidiary to assign or otherwise convey, any right
to receive income, in each case to secure or provide for the payment of any
Debt, trade

                                      -11-
<PAGE>

payable or other obligation or liability of any Person; provided, however, that
notwithstanding the foregoing, the Grantors or any of their Subsidiaries may
create, incur, assume or suffer to exist the Permitted Liens.

         Section 3.10 Additional Indebtedness. Each Grantor agrees that it will
not create, assume, incur or suffer to exist, or permit any of its Subsidiaries
to create, assume, incur or suffer to exist, any Debt other than Debt permitted
under the Credit Documents.

                                   ARTICLE IV

              SPECIAL PROVISIONS CONCERNING RECEIVABLES, CONTRACTS,
                            INSTRUMENTS AND ACCOUNTS

         Section 4.1 Maintenance of Records. Each Grantor will keep and maintain
at its own cost and expense satisfactory and complete records of its
Receivables, including, but not limited to, records of all payments received and
all credits granted thereon, and each Grantor will make the same available to
Collateral Trustee, for inspection at any time as Collateral Trustee may
request. Each Grantor shall, at its own cost and expense, deliver all tangible
evidence of its Receivables (including, without limitation, all documents
evidencing the Receivables) and books and records that Collateral Trustee may
request to Collateral Trustee or to its representatives (copies of which
evidence and books and records may be retained by such Grantor) at such times as
Collateral Trustee may reasonably request. Upon Collateral Trustee's reasonable
request each Grantor shall legend in form and substance reasonably satisfactory
to Collateral Trustee, the Receivables and Contracts and Contract Documents, as
well as books, records and documents of such Grantor evidencing or pertaining to
the Receivables, with an appropriate reference to the fact that such items of
Collateral have been assigned to Collateral Trustee as security and that
Collateral Trustee has a security interest therein.

         Section 4.2 Payments Under Contracts and Receivables.

         (a) Notice to Grantors under Contracts. Each Grantor further agrees and
             confirms that, upon the request of Collateral Trustee, it will
             notify each party to any Contracts of the assignment thereof to
             Collateral Trustee, instruct each of them that all payments due or
             to become due and all amounts payable to such Grantor under such
             Contracts shall, until the Secured Obligations are paid in full and
             the Credit Document Commitments have been terminated, be made to
             Collateral Trustee, and, if requested by Collateral Trustee and
             reasonably feasible, obtain a written consent and acknowledgement
             from them in form and substance reasonably acceptable to Collateral
             Trustee. Unless notified to the contrary by Collateral Trustee,
             each Grantor shall, at its own cost and expense, enforce collection
             of any amounts payable under the Contracts.

         (b) Non-Payment to Collateral Trustee. Until the Secured Obligations
             are paid in full and all Credit Document Commitments have been
             terminated, if any of the Grantors shall receive directly from any
             party to the Contracts or from any account debtor or other obligor
             under any Receivable any payments under the Contracts or the
             Receivables, such Grantor shall receive (and hereby

                                      -12-
<PAGE>

             acknowledges that it is receiving) such payments in trust for the
             benefit of the Secured Party, shall segregate such payments from
             other funds of such Grantor, and shall forthwith transmit and
             deliver such payments to the Collateral Trustee in the same form as
             so received (with any necessary endorsement) for application to the
             Secured Obligations.

         Section 4.3 Direction to Account Parties, Contracting Parties, etc.
Each Grantor agrees that, upon the occurrence and during the continuation of an
Event of Default, such Grantor shall be bound by any collection, compromise,
forgiveness, extension or other action taken by Collateral Trustee with respect
to the Receivables and the Contracts. Upon the occurrence and during the
continuation of an Event of Default, without notice to or assent from any of the
Grantors, Collateral Trustee may apply any or all amounts then or thereafter
deposited with it to the Secured Obligations. The costs and expenses (including
reasonable attorneys' fees) of collection, whether incurred by any of the
Grantors or Collateral Trustee, shall be borne by the Grantors.

                                   ARTICLE V

                     SPECIAL PROVISIONS CONCERNING CONTRACTS

         Section 5.1 Security Interest in Contract Rights. Each Grantor's grant,
pursuant to Section 2.1 of this Security Agreement, to the Secured Party of a
security interest in and on all of the right, title and interest in and to each
and all of the Contracts, the Contract Documents and the contract rights
thereunder owned by such Grantor, includes, but is not limited to:

         (a) all (i) of such Grantor's rights to payment under any Contract or
             Contract Document and (ii) payments due and to become due to such
             Grantor under any Contract or Contract Document, in each case
             whether as contractual obligations, damages or otherwise;

         (b) all of such Grantor's claims, rights, powers, or privileges and
             remedies under any Contract or Contract Document; and

         (c) all of such Grantor's rights under any Contract or Contract
             Document to make determinations, to exercise any election
             (including, but not limited to, election of remedies) or option or
             to give or receive any notice, consent, waiver or approval together
             with full power and authority with respect to any Contract or
             Contract Document to demand, receive, enforce or collect any of the
             foregoing rights or any property which is the subject of any
             Contract or Contract Document, to enforce or execute any checks, or
             other instruments or orders, to file any claims and to take any
             action which, in the opinion of Collateral Trustee, may be
             necessary or advisable in connection with any of the foregoing (all
             of the foregoing in this Section 5.1, the "Contract Rights").

         Section 5.2 Contract Right Remedies. Upon the occurrence and during the
continuation of an Event of Default (but not prior to such time), Collateral
Trustee may enforce all remedies, rights, powers and privileges of any one or
more of the Grantors under any or all of

                                      -13-
<PAGE>

the Contracts and Contract Documents and/or substitute itself or any nominee or
trustee in lieu of such Grantor or Grantors as party to any of the Contracts and
Contract Documents and may notify the obligor of any Contract Right (each of the
Grantors hereby agreeing to immediately deliver any such notice at the request
of Collateral Trustee) that all payments and performance under the relevant
Contract or Contract Document shall be made or rendered to Collateral Trustee or
such other Person as Collateral Trustee may designate in writing, with a copy to
the affected Grantor and to the applicable Borrower.

                                   ARTICLE VI

                                    REMEDIES

         Section 6.1 Remedies; Obtaining the Collateral Upon Default. Upon the
occurrence and during the continuation of an Event of Default, Collateral
Trustee shall have all the rights and remedies of a secured party under the laws
which govern the creation, perfection or enforcement of security interests
hereunder to enforce this Security Agreement and the security interests
contained herein, and, in addition, Collateral Trustee may, upon the occurrence
and during the continuation of an Event of Default, in addition to its other
rights and remedies hereunder, including without limitation under Section 6.2
hereof, do any of the following to the extent permitted by Applicable Law:

         (a) personally, or by trustees or attorneys, immediately take
             possession of the Collateral or any part thereof, from any one or
             more of the Grantors or any other Person who then has possession of
             any part thereof with or without notice or process of any
             Applicable Law, and for that purpose may enter upon any one or more
             of the Grantors' premises where any of the Collateral is located
             and remove the same and use in connection with such removal any and
             all services, supplies, aids and other facilities of any one or
             more of the Grantors;

         (b) instruct the obligor or obligors on any agreement, instrument or
             other obligation constituting the Collateral to make any payment
             required by the terms of such instrument, agreement or obligation
             directly to Collateral Trustee;

         (c) take possession of the Collateral or any part thereof, by directing
             any one or more of the Grantors in writing to deliver the same to
             Collateral Trustee at any place or places designated by Collateral
             Trustee, in which event the applicable Grantor shall at its own
             expense:

             (i)   forthwith cause the same to be moved to the place or places
                   so designated by Collateral Trustee and there be delivered to
                   Collateral Trustee;

             (ii)  store and keep any Collateral so delivered to Collateral
                   Trustee at such place or places pending further action by
                   Collateral Trustee as provided in Section 6.2 of this
                   Security Agreement; and

             (iii) while the Collateral shall be so stored and kept, provide
                   such guards and maintenance services as shall be necessary to
                   protect the same and to preserve and maintain same in good
                   condition.

                                      -14-
<PAGE>

To the extent permitted by Applicable Law, each Grantor's obligation to deliver
the Collateral is of the essence of this Security Agreement and, accordingly,
upon application to a court of equity having jurisdiction, Collateral Trustee
shall be entitled to obtain a decree requiring specific performance by any one
or more of the Grantors of said obligations.

         Section 6.2 Disposition of the Collateral. Any Collateral of which
Collateral Trustee has taken possession under or pursuant to Section 6.1 of this
Security Agreement and any other Collateral, whether or not so possessed by
Collateral Trustee, may, upon the occurrence and during the continuation of an
Event of Default, to the extent permitted by Applicable Law (including, without
limitation, the rules and regulations of the FERC), be sold, leased or otherwise
disposed of under one or more contracts or as an entirety, and without the
necessity of gathering at the place of sale the property to be sold, and in
general in such manner, at such time or times, at such place or places and on
such terms as Collateral Trustee may, in compliance with any requirements of
Applicable Law, determine to be commercially reasonable. Any such disposition
shall be made upon not less than ten (10) days' written notice to the applicable
Grantor specifying the time such disposition is to be made and, if such
disposition shall be a public sale, specifying the place of such sale. Any such
sale may be adjourned by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by Collateral
Trustee or after any overhaul or repair which Collateral Trustee shall determine
to be commercially reasonable. To the extent permitted by Applicable Law,
Collateral Trustee or any Secured Party may itself bid for and become the
purchaser of the Collateral or any item thereof offered for sale at a public
auction without accountability to any of the Grantors (except to the extent of
any surplus money received as provided in the Credit Documents).

         Section 6.3 Waiver.

         (a) EXCEPT AS OTHERWISE PROVIDED IN THIS SECURITY AGREEMENT, EACH
             GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
             NOTICE OR JUDICIAL HEARING IN CONNECTION WITH COLLATERAL TRUSTEE'S
             TAKING POSSESSION OR COLLATERAL TRUSTEE'S DISPOSITION OF ANY OF THE
             COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE
             AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH
             RIGHT WHICH ANY OF THE GRANTORS WOULD OTHERWISE HAVE UNDER ANY
             APPLICABLE LAW, AND EACH GRANTOR, FOR ITSELF AND ALL WHO MAY CLAIM
             UNDER IT, HEREBY FURTHER WAIVES, TO THE FULLEST EXTENT PERMITTED BY
             APPLICABLE LAW:

             (i)   all damages occasioned by such taking of possession of any
                   Collateral;

             (ii)  all other requirements as to the time, place and terms of
                   sale or other requirements with respect to the enforcement of
                   Collateral Trustee's rights hereunder; and

             (iii) all rights of redemption, appraisement, valuation, stay,
                   extension or moratorium now or hereafter in force under any
                   Applicable Law in order

                                      -15-
<PAGE>

                   to prevent or delay the enforcement of this Security
                   Agreement or the absolute sale of the Collateral or any
                   portion thereof.

         (b) Without limiting the generality of the foregoing and to the extent
             permitted by Applicable Law, during the continuation of an Event of
             Default, each Grantor hereby: (i) authorizes Collateral Trustee, in
             its sole discretion and without notice to or demand upon any of the
             Grantors and without otherwise affecting the obligations applicable
             hereunder from time to time, to take and hold other collateral (in
             addition to the Collateral) for payment of any Secured Obligations,
             or any part thereof, and to exchange, enforce or release such other
             collateral or any part thereof, and to accept and hold any
             endorsement or guarantee of payment of the Secured Obligations or
             any part thereof, and to release or substitute any endorser or
             guarantor or any other Person granting security for or in any way
             obligated upon any Secured Obligations, or any part thereof; and
             (ii) waives and releases any and all right to require Collateral
             Trustee to collect any of the Secured Obligations from any specific
             item or items of Collateral or from any other party liable as
             guarantor or in any other manner in respect of any of the Secured
             Obligations or from any collateral (other than the Collateral) for
             any of the Secured Obligations.

         (c) To the extent permitted by Applicable Law, any sale of, or the
             grant of options to purchase, or any other realization upon, any
             Collateral shall operate to divest all right, title, interest,
             claim and demand, either at law or in equity, of any of the
             Grantors therein and thereto.

         Section 6.4 Application of Proceeds. The proceeds of any sale of, or
other realization upon, all or any part of the Collateral shall be applied by
Collateral Trustee to the Secured Obligations in the manner determined by
Collateral Trustee in its sole discretion.

         Section 6.5 Remedies Cumulative; No Waiver. Each and every right, power
and remedy hereby specifically given to Collateral Trustee shall be in addition
to every other right, power and remedy specifically given under this Security
Agreement, under any other Security Document or now or hereafter existing at law
or in equity, or by statute, and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time or simultaneously and as often and in such order as may be deemed expedient
by Collateral Trustee. All such rights, powers and remedies shall be cumulative,
and the exercise or the partial exercise of one shall not be deemed a waiver of
the right to exercise of any other. No delay or omission of Collateral Trustee
in the exercise of any of its rights, remedies, powers and privileges hereunder
or partial or single exercise thereof and no renewal or extension of any of the
Secured Obligations, shall impair any such right, remedy, power or privilege or
shall constitute a waiver thereof.

         Section 6.6 Discontinuance of Proceedings. In case Collateral Trustee
shall have instituted any proceeding to enforce any right, power or remedy under
this Security Agreement by foreclosure, sale, entry, or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason, or shall
have been determined adversely to Collateral Trustee, then, in every such case,
each of the Grantors, Collateral Trustee and each holder of any of the Secured

                                      -16-
<PAGE>

Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral, subject to the security interest created under
this Security Agreement, and all rights, remedies and powers of Collateral
Trustee shall continue as if no such proceeding had been instituted.

                                  ARTICLE VII

                          CONCERNING COLLATERAL TRUSTEE

         Section 7.1 Collateral Trustee's Rights. The provisions of Article 5 of
the Collateral Trust Agreement shall inure to the benefit of Collateral Trustee
in respect of this Security Agreement and shall be binding upon the parties
hereto.

         Section 7.2 Action by Nominees. Notwithstanding anything to the
contrary in this Security Agreement, any and all of the rights, powers and
remedies of Collateral Trustee under this Security Agreement may be exercised by
any nominee(s) of the Financial Institutions or any other agent, person, trustee
or nominee acting on behalf of the Secured Party, and Collateral Trustee may
assign or delegate all or any part of its rights and obligations under this
Security Agreement any one or more agent(s), person(s), trustee(s) or other
nominee(s).

         Section 7.3 Limitation on Duty of Collateral Trustee in Respect of
Collateral. Collateral Trustee shall have no duty as to any Collateral in its
possession or control other than for its gross negligence or willful misconduct
or in the possession or control of any agent or bailee or any income thereon or
as to the preservation of rights against prior parties or any other rights
pertaining thereto. Collateral Trustee shall not be liable or responsible for
any loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any warehouseman, carrier,
forwarding agency, consignee or other agent or bailee selected by Collateral
Trustee, unless Collateral Trustee was grossly negligent in the selection
thereof. Collateral Trustee may, without notice to any of the Grantors 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 or in any other deposit account.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         Section 8.1 Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications hereunder
shall be given in accordance with the terms of Section 6.4 of the Collateral
Trust Agreement.

         Section 8.2 Amendment. Any amendment or waiver to this Security
Agreement or any provision hereof shall only be effective to the extent such
amendment or waiver (a) complies with all requirements of an amendment to the
Collateral Trust Agreement including those requirements set forth in Section 6.2
of the Collateral Trust Agreement and (b) is executed by the Persons that would
be required to execute a like amendment of the Collateral Trust Agreement.
Furthermore, all amendments and waivers to this Security Agreement will be
subject to the

                                      -17-
<PAGE>

limitations and restrictions applicable to amendments and waivers of the
Collateral Trust Agreement.

         Section 8.3 Successors and Assigns. This Security Agreement shall be
binding upon and inure to the benefit of the Grantors, Collateral Trustee and
the Financial Institutions and their respective successors and assigns.

         Section 8.4 Survival. All agreements, statements, representations and
warranties made by the Grantors herein or in any certificate or other instrument
delivered by the Grantors or on the behalf of the Grantors under this Security
Agreement shall be considered to have been relied upon by Collateral Trustee and
the Financial Institutions and shall survive the execution and delivery of this
Security Agreement and the other Credit Documents regardless of any
investigation made by Collateral Trustee or any other Secured Party or on their
behalf.

         Section 8.5 Headings Descriptive. The headings of the various articles,
sections and paragraphs of this Security Agreement are for convenience of
reference only, do not constitute a part hereof and shall not affect the meaning
or construction of any provision hereof.

         Section 8.6 Severability. Any provision hereof 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 without affecting the validity or enforceability
of any provision in any other jurisdiction.

         Section 8.7 Governing Law. This Security Agreement shall be governed by
and construed in accordance with the laws of the State of New York.

         Section 8.8 Waiver of Jury Trial. THE GRANTORS, THE COLLATERAL TRUSTEE,
AND THE FINANCIAL INSTITUTIONS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

         Section 8.9 Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE COLLATERAL TRUSTEE, THE FINANCIAL
INSTITUTIONS OR THE GRANTORS IN CONNECTION HEREWITH MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE COLLATERAL TRUSTEE'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH GRANTOR IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR
NOTICES SPECIFIED IN SECTION 6.4 OF THE COLLATERAL TRUST AGREEMENT. EACH GRANTOR
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT ANY GRANTOR 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

                                      -18-
<PAGE>

TO ITSELF OR ITS PROPERTY, EACH GRANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
SECURITY AGREEMENT.

         Section 8.10 Collateral Trustee May Perform. If any one or more of the
Grantors fails to perform any agreement contained herein, Collateral Trustee may
itself perform, or cause the performance of, such agreement, and the expenses of
Collateral Trustee incurred in connection therewith shall be payable by such
Grantor.

         Section 8.11 Termination; Release. When all of the Secured Obligations
have been satisfied or irrevocably paid in full and all Credit Document
Commitments have expired or are terminated, this Security Agreement shall
terminate (except as provided in Section 8.12 of this Security Agreement), and
Collateral Trustee, at the expense of the Grantors, will promptly execute and
deliver to each of the Grantors the proper instruments acknowledging the
termination of this Security Agreement, and will duly assign, transfer and
deliver to any one or more of the Grantors (without recourse and without any
representation or warranty of any kind) such of the Collateral as may be in the
possession of Collateral Trustee and has not theretofore been sold or otherwise
applied or released pursuant to this Security Agreement, and shall take such
other action, at the Grantors' expense, as the Grantors may reasonably request
to effectuate the foregoing.

         Section 8.12 Reinstatement. This Security Agreement shall continue to
be effective or be reinstated, as the case may be, if at any time any amount
received by Collateral Trustee in respect of the Secured Obligations is
rescinded or must otherwise be restored or returned by any Secured Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Borrower or any one or more of the Grantors, or upon the appointment of any
intervenor or conservator of, or trustee or similar official for, any one or
more of the Grantors or any substantial part of its assets, or otherwise, all as
though such payments had not been made.

         Section 8.13 Counterparts. This Security Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which, when so executed, shall be deemed to be an
original, and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Security Agreement by telecopier shall be effective as delivery of an original
executed counterpart of this Security Agreement.

         Section 8.14 No Third Party Beneficiaries. The agreements of the
parties hereto are solely for the benefit of the Grantors, the Collateral
Trustee and the Secured Party, and no Person (other than the parties hereto and
the Secured Party) shall have any rights hereunder.

         Section 8.15 Information. Each Grantor will furnish to Collateral
Trustee from time to time statements and schedules further identifying and
describing the Collateral of such Grantor and such other reports in connection
with such Collateral as Collateral Trustee may request, all in reasonable
detail.

         Section 8.16 Incorporated Definitions. All defined terms that are
incorporated from other agreements into this Security Agreement by reference
shall have the meanings assigned to

                                      -19-
<PAGE>

such terms as of the date hereof, but shall not be modified by any subsequent
amendment or modification that takes place after the date hereof unless
consented to by the parties hereto.

         Section 8.17 Indemnity. Each Grantor shall pay on demand to Collateral
Trustee the amount of any and all reasonable expenses, including without
limitation the reasonable fees and expenses of its counsel and of any experts
and agents, that Collateral Trustee may incur in connection with (i) the
administration of this Security 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
Collateral Trustee or the other Financial Institutions hereunder or (iv) the
failure by any one or more of the Grantors to perform or observe any of the
provisions hereof.

Schedule I    State of Organization and Addresses of Grantors
Schedule II   Required Financing Statement Filings
Schedule III  Credit Documents

                                      -20-
<PAGE>

                              [SIGNATURE PAGES FOR
                               SECURITY AGREEMENT]

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

                                        CITIBANK, N.A., AS COLLATERAL TRUSTEE

                                        By:      /s/ J. Christopher Lyons
                                             ----------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:   Vice President
                                              ---------------------------------

<PAGE>

SECURITY AGREEMENT EXECUTED BY THE FOLLOWING WILLIAMS ENTITIES:

Black Marlin Pipeline Company
Gas Supply, L.L.C.
Juarez Pipeline Company
Mapco, Inc.
MAPL Investments, Inc.
Memphis Generation, L.L.C.
North Padre Island Spindown, Inc.
The Williams Companies, Inc.
WFS Enterprises, Inc.
WFS-Liquids Company
WFS-NGL Pipeline Company Inc.
WFS-Offshore Gathering Company
Williams Alaska Air Cargo Properties, L.L.C.
Williams Alaska Petroleum, Inc.
Williams Alaska Pipeline Company, L.L.C.
Williams Bio-Energy, L.L.C.
Williams Energy Services, L.L.C.
Williams Ethanol Services, Inc.
Williams Express, Inc. [AK]
Williams Express, Inc. [DE]
Williams Field Services Company
Williams Field Services Group, Inc.
Williams Field Services-Gulf Coast Company, L.P.
Williams Gas Processing-Wamsutter Company
Williams Gas Processing Company
Williams Generating Memphis, LLC
Williams Generation Company - Hazelton
Williams Memphis Terminal, Inc.
Williams Merchant Services Company, Inc.
Williams Mid-South Pipelines, LLC
Williams Midstream Natural Gas Liquids, Inc.
Williams Natural Gas Liquids, Inc.
Williams Olefins Feedstock Pipelines, L.L.C.
Williams Olefins, L.L.C.
Williams Petroleum Pipeline Systems, Inc.
Williams Refining & Marketing, L.L.C.
Worthington Generation, L.L.C.

<PAGE>

                                   SCHEDULE I
                                       TO
                               SECURITY AGREEMENT
                 STATE OF ORGANIZATION AND ADDRESSES OF GRANTORS

<Table>
<Caption>
                   Entity                                     Principle Address                  State of
                                                                                              Incorporation
--------------------------------------------- --------------------------------------------- -------------------
<S>                                           <C>                                                  <C>
(a)      Black Marlin Pipeline Company        One Williams Center, Tulsa, OK 74172                  TX
--------------------------------------------- --------------------------------------------- -------------------
(b)      Gas Supply, L.L.C.                   One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(c)      Juarez Pipeline Company              One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(d)      Mapco, Inc.                          One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(e)      MAPL Investments, Inc.               One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(f)      Memphis Generation, L.L.C.           One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(g)      North Padre Island Spindown, Inc.    One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(h)      The Williams Companies, Inc.         One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(i)      WFS Enterprises, Inc.                One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(j)      WFS-Liquids Company                  One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(k)      WFS-NGL Pipeline Company, Inc.       One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(l)      WFS-Offshore Gathering Company       One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(m)      Williams Alaska Air Cargo            One Williams Center, Tulsa, OK 74172                  AK
         Properties, L.L.C.
--------------------------------------------- --------------------------------------------- -------------------
(n)      Williams Alaska Petroleum, Inc.      One Williams Center, Tulsa, OK 74172                  AK
</Table>

                                      -1-
<PAGE>
<Table>
<Caption>
                   Entity                                     Principle Address                  State of
                                                                                              Incorporation
--------------------------------------------- --------------------------------------------- -------------------
<S>                                           <C>                                                  <C>
(o)      Williams Alaska Pipeline Company,    One Williams Center, Tulsa, OK 74172                  DE
         L.L.C.
--------------------------------------------- --------------------------------------------- -------------------
(p)      Williams Bio-Energy, L.L.C.          One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(q)      Williams Energy Services, L.L.C.     One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(r)      Williams Ethanol Services, Inc.      1300 South Second Street, Pekin, IL 61554             DE
--------------------------------------------- --------------------------------------------- -------------------
(s)      Williams Express, Inc. (AK)          One Williams Center, Tulsa, OK 74172                  AK
--------------------------------------------- --------------------------------------------- -------------------
(t)      Williams Express, Inc. (DE)          One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(u)      Williams Field Services Company      P.O. Box 3102, Tulsa, OK  74101                       DE
--------------------------------------------- --------------------------------------------- -------------------
(v)      Williams Field Services Group, Inc.  P.O. Box 3102, Tulsa, OK  74101                       DE
--------------------------------------------- --------------------------------------------- -------------------
(w)      Williams Field Services-Gulf Coast   2800 Post Oak Boulevard, Houston, TX  77056           DE
         Company, L.P.
--------------------------------------------- --------------------------------------------- -------------------
(x)      Williams Gas Processing Company      P.O. Box 3102 Tulsa, OK 74101                         DE
--------------------------------------------- --------------------------------------------- -------------------
(y)      Williams Gas Processing -Wamsutter   One Williams Center, Tulsa, OK 74172                  DE
         Company
--------------------------------------------- --------------------------------------------- -------------------
(z)      Williams Generating Memphis, LLC     One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(aa)     Williams Generation Company -        One Williams Center, Tulsa, OK 74172                  DE
         Hazelton
--------------------------------------------- --------------------------------------------- -------------------
(bb)     Williams Memphis Terminal, Inc.      One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
</Table>

                                      -2-
<PAGE>
<Table>
<Caption>
                   Entity                                     Principle Address                  State of
                                                                                              Incorporation
--------------------------------------------- --------------------------------------------- -------------------
<S>                                           <C>                                                  <C>
(cc)     Williams Merchant Services           One Williams Center, Tulsa, OK 74172                  DE
         Company, Inc
--------------------------------------------- --------------------------------------------- -------------------
(dd)     Williams Mid-South Pipelines, LLC    One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(ee)     Williams Midstream Natural Gas       One Williams Center, Tulsa, OK 74172                  DE
         Liquids, Inc.
--------------------------------------------- --------------------------------------------- -------------------
(ff)     Williams Natural Gas Liquids, Inc.   One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(gg)     Williams Olefins Feedstock           One Williams Center, Tulsa, OK 74172                  DE
         Pipelines, L.L.C.
--------------------------------------------- --------------------------------------------- -------------------
(hh)     Williams Olefins, L.L.C.             One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
(ii)     Williams Petroleum Pipeline          One Williams Center, Tulsa, OK 74172                  DE
         Systems, Inc.
--------------------------------------------- --------------------------------------------- -------------------
(jj)     Williams Refining & Marketing,       One Williams Center, Tulsa, OK 74172                  DE
         L.L.C.
--------------------------------------------- --------------------------------------------- -------------------
(kk)     Worthington Generation, L.L.C.       One Williams Center, Tulsa, OK 74172                  DE
--------------------------------------------- --------------------------------------------- -------------------
</Table>

                                      -3-
<PAGE>

                                   SCHEDULE II
                                       TO
                               SECURITY AGREEMENT

                      REQUIRED FINANCING STATEMENT FILINGS

<Table>
<Caption>
                       Entity                           UCC Central Filing Offices of the Secretary of
                                                                State for the Following States
------------------------------------------------------ --------------------------------------------------
<S>                                                                          <C>
(a)      Black Marlin Pipeline Company                                        TX
------------------------------------------------------ --------------------------------------------------
(b)      Gas Supply, L.L.C.                                                   DE
------------------------------------------------------ --------------------------------------------------
(c)      Juarez Pipeline Company                                              DE
------------------------------------------------------ --------------------------------------------------
(d)      Mapco, Inc.                                                          DE
------------------------------------------------------ --------------------------------------------------
(e)      MAPL Investments, Inc.                                               DE
------------------------------------------------------ --------------------------------------------------
(f)      Memphis Generation, L.L.C.                                           DE
------------------------------------------------------ --------------------------------------------------
(g)      North Padre Island Spindown, Inc.                                    DE
------------------------------------------------------ --------------------------------------------------
(h)      The Williams Companies, Inc.                                         DE
------------------------------------------------------ --------------------------------------------------
(i)      WFS Enterprises, Inc.                                                DE
------------------------------------------------------ --------------------------------------------------
(j)      WFS-Liquids Company                                                  DE
------------------------------------------------------ --------------------------------------------------
(k)      WFS-NGL Pipeline Company, Inc.                                       DE
------------------------------------------------------ --------------------------------------------------
(l)      WFS-Offshore Gathering Company                                       DE
------------------------------------------------------ --------------------------------------------------
(m)      Williams Alaska Air Cargo Properties, L.L.C.                         AK
------------------------------------------------------ --------------------------------------------------
(n)      Williams Alaska Petroleum, Inc.                                      AK
------------------------------------------------------ --------------------------------------------------
(o)      Williams Alaska Pipeline Company, L.L.C.                             DE
------------------------------------------------------ --------------------------------------------------
(p)      Williams Bio-Energy, L.L.C.                                          DE
------------------------------------------------------ --------------------------------------------------
</Table>

                                      -1-
<PAGE>

<Table>
<Caption>
                       Entity                           UCC Central Filing Offices of the Secretary of
                                                                State for the Following States
------------------------------------------------------ --------------------------------------------------
<S>                                                                          <C>
(q)      Williams Energy Services, L.L.C                                      DE
------------------------------------------------------ --------------------------------------------------
(r)      Williams Ethanol Services, Inc.                                      DE
------------------------------------------------------ --------------------------------------------------
(s)      Williams Express, Inc. (AK)                                          AK
------------------------------------------------------ --------------------------------------------------
(t)      Williams Express, Inc. (DE)                                          DE
------------------------------------------------------ --------------------------------------------------
(u)      Williams Field Services Company                                      DE
------------------------------------------------------ --------------------------------------------------
(v)      Williams Field Services Group, Inc.                                  DE
------------------------------------------------------ --------------------------------------------------
(w)      Williams Field Services-Gulf Coast Company,                          DE
           L.P.
------------------------------------------------------ --------------------------------------------------
(x)      Williams Gas Processing Company                                      DE
------------------------------------------------------ --------------------------------------------------
(y)      Williams Gas Processing -Wamsutter Company                           DE
------------------------------------------------------ --------------------------------------------------
(z)      Williams Generating Memphis, LLC                                     DE
------------------------------------------------------ --------------------------------------------------
(aa)     Williams Generation Company - Hazelton                               DE
------------------------------------------------------ --------------------------------------------------
(bb)     Williams Memphis Terminal, Inc.                                      DE
------------------------------------------------------ --------------------------------------------------
(cc)     Williams Merchant Services Company, Inc                              DE
------------------------------------------------------ --------------------------------------------------
(dd)     Williams Mid-South Pipelines, LLC                                    DE
------------------------------------------------------ --------------------------------------------------
(ee)     Williams Midstream Natural Gas Liquids, Inc.                         DE
------------------------------------------------------ --------------------------------------------------
</Table>

                                      -2-
<PAGE>
<Table>
<Caption>
                       Entity                           UCC Central Filing Offices of the Secretary of
                                                                State for the Following States
------------------------------------------------------ --------------------------------------------------
<S>                                                                          <C>
(ff)     Williams Natural Gas Liquids, Inc.                                   DE
------------------------------------------------------ --------------------------------------------------
(gg)     Williams Olefins Feedstock Pipelines, L.L.C.                         DE
------------------------------------------------------ --------------------------------------------------
(hh)     Williams Olefins, L.L.C.                                             DE
------------------------------------------------------ --------------------------------------------------
(ii)     Williams Petroleum Pipeline Systems, Inc.                            DE
------------------------------------------------------ --------------------------------------------------
(jj)     Williams Refining & Marketing, L.L.C.                                DE
------------------------------------------------------ --------------------------------------------------
(kk)      Worthington Generation, L.L.C.                                      DE
------------------------------------------------------ --------------------------------------------------
</Table>

                                      -3-
<PAGE>

                                  SCHEDULE III
                                       TO
                               SECURITY AGREEMENT

                                CREDIT DOCUMENTS

1. That Credit Agreement dated as of July 31, 2002 (as amended, modified,
supplemented or restated from time to time), by and among the Company together
with Citicorp USA, Inc., as agent and collateral agent, Bank of America N. A. as
syndication agent, Citibank, N.A. and Bank of America N.A. as issuing bank,
Salomon Smith Barney Inc. as L/C Arranger, and the banks named therein.

2. The Company; Northwest Pipeline Corporation, a Delaware corporation;
Transcontinental Gas Pipe Line Corporation, a Delaware corporation; and Texas
Gas Transmission Corporation, a Delaware corporation, as the borrowers, have
entered into a Credit Agreement dated July 25, 2000, as amended, together with
the banks named therein, and The Chase Manhattan Bank and Commerzbank AG as
co-syndication agents, and Credit Lyonnais New York Branch as documentation
agent and Citibank, N.A., as agent, and Salomon Smith Barney, as Arranger.

3 Indenture between MAPCO, Inc., as Issuer, and Bankers Trust Company, as
Trustee dated March 31, 1990.

4 Indenture between Transco Energy Company, as Issuer, and The Bank of New York,
as Trustee, dated May 1, 1990.

All documents, instruments, agreements, certificates and notices at any time
executed and/or delivered in connection with any of the foregoing Credit
Documents.

                                      -1-<PAGE>

                                                                    EXHIBIT 10.7
                                                                [Execution Copy]

                                PLEDGE AGREEMENT

         This PLEDGE AGREEMENT (this "Agreement"), dated as of July 31, 2002, is
made and entered into by THE WILLIAMS COMPANIES, INC., a Delaware corporation
(the "Company"), and each of the Subsidiaries which is a signatory hereto or
which subsequently becomes a party hereto in accordance with the terms hereof
(together, with the Company, the "Pledgors"), in favor of Citibank, N.A., as
collateral trustee ("Collateral Trustee") for the benefit of the holders of the
Secured Obligations (as defined in Section 2 below).

                             PRELIMINARY STATEMENTS

         A. The Company and/or its Subsidiaries have entered into multiple
financing transactions with groups of lenders and financial institutions
(collectively, referred to herein as the "Financial Institutions"). Such
financing transactions are governed by the credit and security documents more
fully described in Schedule V hereto (such documents being collectively referred
to herein, as the same may be amended and modified from time to time, as the
"Credit Documents"). "Borrowers" as used herein shall mean the borrowers under
any one or more of the Credit Documents, and "Obligors" shall mean collectively,
the Borrowers and all other Persons who guarantee or otherwise are liable for
any portion of the Secured Obligations.

         B. The Company, several of its Subsidiaries and Citibank, N.A., as
collateral trustee have entered into a Collateral Trust Agreement dated as of
July 31, 2002 (the "Collateral Trust Agreement"), which provides for collateral
to be held by Citibank, N.A., as collateral trustee for the benefit of the
Financial Institutions.

         C. It is a condition to certain transactions under the Credit
Documents, that each of the Pledgors shall have executed and delivered this
Agreement.

         D. The Company is the principal financing entity for all capital
requirements of its Subsidiaries, and from time to time the Company has made
capital contributions and advances to each of the Pledgors other than the
Company. Other than the Company each of the Pledgors is a wholly owned
Subsidiary of the Company and will derive substantial direct or indirect benefit
from the transactions contemplated by the Credit Documents.

                                    AGREEMENT

         Therefore, in order to induce the Financial Institutions to enter into
and/or continue certain financing transactions described in the Credit
Documents, each of the Pledgors hereby agrees with Collateral Trustee for the
benefit of the Collateral Trustee and the other Financial Institutions as
follows:

         1. Pledge. To secure the Secured Obligations (as defined in Section 2
below), each Pledgor hereby TRANSFERS, GRANTS, BARGAINS, SELLS, CONVEYS,
HYPOTHECATES, SETS OVER, DELIVERS AND PLEDGES to the Collateral Trustee for the

<PAGE>

benefit of the Financial Institutions, and GRANTS to the Collateral Trustee, for
the benefit of the Financial Institutions, a security interest in all of such
Pledgor's right, title and interest of every kind and character now owned or
hereafter acquired, created or arising in and to the following (the "Pledged
Collateral"):

                  (a) the Pledged Shares (as defined below);

                  (b) all shares of capital stock, general and limited
partnership interests, limited liability company interests, trust interests,
joint venture interests, ownership rights arising under the law of any
jurisdiction, and any evidence of the foregoing, together with any property and
rights derivative thereof, acquired, received or owned by any Pledgor, which, on
or after the date of this Agreement, is or becomes, as a result of any
occurrence, a Subsidiary of any Pledgor or of the Company;

                  (c) all certificates and similar evidence of ownership
representing the Pledged Collateral;

                  (d) all cash dividends, stock dividends, cash, instruments and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Collateral; and

                  (e) all additions to and substitutions for any of the
foregoing and all products and proceeds of any of the Pledged Collateral,
together with all renewals and replacements of any of the Pledged Collateral,
all accounts, accounts receivable, instruments, notes, chattel paper, documents
(including all documents of title), books, records, contract rights and general
intangibles arising in connection with any of the Pledged Collateral.

         "Pledged Shares" means, with respect to each Pledgor, all shares
described in Schedule I as being held by such Pledgor, as amended from time to
time, together with all rights, contingent or otherwise, of such Pledgor to
acquire shares in the entities or organizations represented by the shares
described in Schedule I (whether such shares are described as being held by such
Pledgor or not), as amended from time to time, and all rights to receive cash
dividends, stock dividends, distributions upon redemption or liquidation,
distributions as a result of split-ups, recapitalizations or rearrangements,
stock rights, rights to subscribe, voting rights, rights to receive securities,
options, warrants, calls, commitments, securities accounts, security
entitlements, and all new securities and other property which such Pledgor now
owns or may hereafter become entitled to receive on account of the foregoing or
with respect to any such entities or organizations;

         TO HAVE AND TO HOLD the Pledged Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Collateral Trustee, its successors and assigns, on behalf of
the Financial Institutions, forever; subject, however, to the terms, covenants
and conditions set forth in this Agreement and is subject in all cases to the
limitations more fully set out in Section 2.2 of Collateral Trust Agreement.

         2. Security for Obligations. The security interests and other rights
granted pursuant to Section 1 secure, and the Pledged Collateral is security
for, the prompt performance and payment in full in cash when due, whether at
stated maturity, by acceleration or otherwise of

                                       2
<PAGE>

the Secured Obligations. As used in this Agreement the "Secured Obligations"
shall mean the Guaranteed Obligations and Bonds (as such term is defined in the
Collateral Trust Agreement). Notwithstanding that the balance of the Secured
Obligations may at certain times be zero and that no letters of credit may at
certain times be outstanding under the Credit Documents, the Liens granted
hereunder to the Collateral Trustee shall remain in full force and effect at all
times and with the same priority until the payment in full in cash of the
Secured Obligations, the termination of the commitments, however described,
under the Credit Documents, the repayment of all obligations due with respect to
the bonds and the expiration or termination of all outstanding letters of credit
provided under the Credit Documents (all such commitments, repayment obligations
and outstanding letters of credit are referred to herein as the "Credit Document
Commitments").

         3. Delivery of Pledged Collateral. Subject only to the exception set
forth in Section 6(a)(ii), the Pledged Collateral and all certificates,
instruments and property representing or evidencing the Pledged Collateral
shall, on or before the date of this Agreement (with respect to all Pledged
Collateral owned by a Pledgor on the date of this Agreement) or within two
Business Days of a Pledgor's actual or constructive receipt of such Pledged
Collateral (with respect to Pledged Collateral received after the date of this
Agreement), be delivered to and held by or on behalf of the Collateral Trustee
pursuant to this Agreement and shall be in suitable form for transfer of
ownership and possession by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Trustee. The Collateral Trustee shall have the
right, at any time in its discretion and without notice to any Pledgor, to
transfer to or to register in its name or any of its nominees, any or all of the
Pledged Collateral, subject only to the revocable rights of such Pledgor
specified in Section 6(a) hereof. In addition, the Collateral Trustee shall have
the right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.

         4. Representations, Warranties and Covenants. Each Pledgor represents,
warrants and covenants, to the Collateral Trustee and the other Financial
Institutions, as follows:

                  (a) Such Pledgor (i) is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation; (ii) is duly qualified and in good standing in every jurisdiction in
which the nature of its business makes such qualification necessary and where
the failure to so qualify has a reasonable likelihood of having a material
adverse effect; (iii) has all requisite corporate power and authority and the
legal right to own, pledge, mortgage and operate its properties, and to conduct
its business as now or currently proposed to be conducted; (iv) is in compliance
with its certificate or articles of incorporation, by-laws and similar
organizational documents; (v) is not in default under any material agreement
such that there is a reasonable likelihood of such default having a material
adverse effect; (vi) is in compliance (except to the extent any noncompliance
has no reasonable likelihood of having a material adverse effect) with all legal
requirements; and (vii) together with the other Pledgors and the Company, forms
part of a group of companies that are closely related legally and economically,
each deriving benefits from the other, and the execution, delivery and
performance of this Agreement is conducive to the business interests of such
Pledgor and its pursuit of profits and continuity.

                                       3
<PAGE>

                  (b) Each Person listed on Schedule I hereto: (i) is an entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (ii) is duly qualified to do business and in
good standing in every jurisdiction in which the nature of the business it
conducts makes such qualification necessary or desirable; (iii) has all
requisite corporate power and authority and the legal right to own, pledge,
mortgage and operate its properties, and to conduct its business as now or
currently proposed to be conducted; (iv) is in compliance with its certificate
or articles of incorporation, by-laws and similar organizational documents; and
(v) is in compliance (except to the extent any noncompliance has no reasonable
likelihood of having a material adverse effect) with all legal requirements.

                  (c) The execution, delivery, and performance by such Pledgor
of this Agreement (i) are within such Pledgor's corporate power; (ii) have been
duly authorized by all necessary corporate action; (iii) do not contravene such
Pledgor's certificate or articles of incorporation or by-laws or other
organizational documents; (iv) do not result in or require the creation of any
Lien upon or with respect to any of its properties except for the Lien created
by this Agreement; and (v) do not conflict with or result in a breach of the
terms, conditions or provisions of, or cause a default under, any agreement,
instrument, franchise, license or concession to which such Pledgor is a party or
by which such Pledgor or any of its property is bound.

                  (d) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required for the due
execution, delivery and performance by any Pledgor of this Agreement or for the
validity or enforceability thereof.

                  (e) This Agreement is a legal, valid and binding obligation of
such Pledgor enforceable against such Pledgor in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy, insolvency or
similar laws relating to creditors' rights generally, as such laws would apply
in the event of bankruptcy insolvency or other similar occurrence with respect
to such Pledgor.

                  (f) There is no pending or, to the best knowledge of any
Pledgor, threatened action, suit or proceeding affecting any Pledgor before or
by any Governmental Authority which has any reasonable likelihood of calling
into question this Agreement, the security interest granted hereby,
enforceability of this Agreement, or the rights of any Pledgor to enter into
this Agreement.

                  (g) Such Pledgor is not a party to any contractual obligation
the performance of which either unconditionally or upon the happening of an
event, will result in the creation of a Lien on such Pledgor's property or
assets (other than in favor of the Financial Institutions).

                  (h) All statements made to the Financial Institutions by or on
behalf of such Pledgor or any Obligor which is a Subsidiary of such Pledgor
before, concurrently with or after the execution of this Agreement with respect
to the Pledged Collateral are and will be true, correct, complete, valid and
genuine in all material respects. No statement contained in any certificate,
schedule, list, financial statement or other papers furnished to any Financial
Institution by or on behalf of such Pledgor or any such Obligor contains (or
will contain) any

                                       4
<PAGE>

untrue statement of material fact or omits (or will omit) to state a material
fact necessary to make the statements contained herein or therein not
misleading.

                  (i) The shares described on Schedule I include all of the
authorized, issued and outstanding shares of capital stock of each of the
companies listed thereon and the rights to acquire shares in such companies.
Such Pledgor is the sole legal and equitable owner and holder of the Pledged
Shares shown to be owned by such Pledgor on Schedule I, which are free and clear
of all Liens, or rights or interests of any other Person, of every kind and
nature except for the Lien created by this Agreement. The shares of stock
described in the first sentence of this paragraph are duly authorized, validly
issued, fully paid, non-assessable, and free from any restriction on transfer,
and none of such shares has been issued or transferred in violation of the
securities registration, securities disclosure or similar laws of any
jurisdiction to which such issuance or transfer may be subject. There are no
options, warrants, financing statements, calls or commitments of any character
relating to the Pledged Shares, nor are there any rights of first refusal,
voting trusts, voting agreements or similar agreements relating to the Pledged
Shares. The pledge, assignment and delivery of the Pledged Collateral pursuant
to this Agreement will create a valid first priority lien on and a first
priority perfected security interest in the Pledged Collateral and the proceeds
thereof. Appropriate financing statements will be filed in favor of the
Collateral Trustee in the offices described on Schedule II hereto.

                  (j) When additional Pledged Collateral of such Pledgor is
delivered to the Collateral Trustee in accordance with Section 3, such Pledgor
will be the legal and equitable owner of such Pledged Collateral free and clear
of all Liens, or rights or interests of any other Person, of every kind and
nature including any state or federal tax liens, except for the Lien created by
this Agreement; each share of stock comprising such Pledged Collateral will have
been duly authorized and validly issued and will be fully paid and
non-assessable and free from any restriction on transfer; and such Pledgor will
have legal title to such Pledged Collateral and power to pledge, assign and
deliver such Pledged Collateral in the manner contemplated by this Agreement.

                  (k) Such Pledgor will (i) cause each issuer of shares of stock
comprising Pledged Collateral not to issue any stock or other securities in
addition to or in substitution for the shares of stock comprising the Pledged
Collateral issued by such issuer, except for stock and other securities issued
to such Pledgor or another Pledgor and subject to this Agreement, (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all additional shares of stock or other securities of each issuer of
Pledged Collateral, and (iii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all shares of stock or other equity
interest covered by Section 1(b) hereof.

                  (l) Each Pledgor agrees that it (i) shall not sell, assign,
transfer, pledge, mortgage, hypothecate, dispose of or encumber, or grant any
option or warrant or Lien or right with respect to, or permit any Liens to arise
with respect to, the Pledged Collateral, any of its rights in or to the Pledged
Collateral and any portion thereof, except for the pledge thereof provided for
in this Agreement, and (ii) shall not permit any issuer of shares of stock
comprising Pledged Collateral to terminate its corporate existence, to be a
party to any merger or consolidation, or to sell, lease or dispose of all or
substantially all of its assets and properties in a single transaction or series
of related transactions.

                                       5
<PAGE>

                  (m) Such Pledgor has and will defend the title to the Pledged
Collateral held by it and the Liens created by this Agreement against all claims
and demands of any Person at any time claiming the Pledged Collateral or any
interest therein and will maintain and preserve such Liens until the termination
of this Agreement.

         5. Further Assurances.

                  (a) Each Pledgor agrees that, at any time and from time to
time, at the expense of such Pledgor, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Collateral Trustee may reasonably request,
in order to create, maintain, perfect and protect any security interest, pledge,
or hypothecation granted or purported to be granted by this Agreement, to enable
the Collateral Trustee to exercise and enforce its rights and remedies under
this Agreement with respect to any Pledged Collateral, and to assure the
transferability by the Collateral Trustee and its successors of the Pledged
Collateral. Each Pledgor agrees that it shall notify the Collateral Trustee in
writing, at least two (2) weeks in advance of the date that it changes the
location of any office or place of business in the United States or establishes
any new office or place of business. Each Pledgor agrees that it shall not move
or establish its chief executive office in any place different from its current
location or change its state of incorporation or organization without the
Collateral Trustee's prior written consent.

                  (b) Subject only to the exception set forth in Section
6(a)(ii), each Pledgor shall, with respect to any investment property
constituting Pledged Collateral (i) cause the Collateral Trustee to have a first
priority security interest in and sole "control", as defined in the UCC, of such
investment property, together with all proceeds thereof, and (ii) at the
Collateral Trustee's request from time to time, each Pledgor shall instruct (and
hereby instructs) any third party holding such Pledged Collateral to obey only
the instructions and entitlement orders of the Collateral Trustee with respect
to such Pledged Collateral and any proceeds thereof. Except as the Collateral
Trustee may otherwise permit in writing, no Pledgor shall have any right to
cause the withdrawal, application or transfer of any financial assets or
security entitlements with respect to the Pledged Collateral, and no Pledgor
shall give any instructions or entitlement orders with respect to them.

                  (c) Without limiting the generality of the foregoing
provisions, each Pledgor agrees that upon obtaining any additional shares or
other equity interests of any issuer of the Pledged Collateral, shares or other
equity interests in the entities described in Section 1(b) or any other shares,
equity interests or other securities constituting Pledged Collateral, it shall
promptly (and in any event within two (2) Business Days) deliver to the
Collateral Trustee (i) such shares, equity interests or other securities, (ii) a
duly executed but blank stock power in the form of Schedule III, or otherwise
acceptable to Collateral Trustee, for each certificate representing such
additional Pledged Collateral, and (iii) a duly executed Pledge Agreement
Supplement in substantially the form of Schedule IV (a "Pledge Agreement
Supplement") or as may otherwise be required by the Collateral Trustee
identifying the additional shares which are pledged pursuant to this Agreement.
Each Pledgor authorizes the Collateral Trustee to attach each Pledge Agreement
Supplement to this Agreement and agrees that all shares, equity interests or
other securities listed on any Pledge Agreement Supplement delivered to the
Collateral Trustee shall for all purposes constitute Pledged Collateral.

                                       6
<PAGE>

                  (d) Each Pledgor will cause to be paid before delinquency all
taxes, charges, liens and assessments at any time levied or assessed against the
Pledged Collateral held by it, or any part thereof, or against any Financial
Institution for or on account of the Pledged Collateral or the interest created
by this Agreement, and will furnish the Collateral Trustee with receipts showing
payment of such taxes and assessments at least five (5) days before the
applicable default date therefor.

                  (e) If the validity or priority of this Agreement or of any
rights, titles, security interests or other interests created or evidenced by
this Agreement shall be attacked, endangered or questioned or if any legal
proceedings are instituted with respect thereto, each Pledgor agrees that it
will take all necessary and proper steps for the defense of such legal
proceedings. The Collateral Trustee is authorized and empowered to take such
additional steps as in its judgment and discretion may be necessary or proper
for the defense of any such legal proceedings or the protection of the validity
or priority of this Agreement and the rights, titles, security interests and
other interests created or evidenced by this Agreement, and the Secured
Obligations include all expenses so incurred of every kind and character.

                  (f) Regarding any proceedings relating to the Pledged
Collateral, or any portion thereof, the Collateral Trustee may participate
therein, and each Pledgor agrees that it shall from time to time deliver to the
Collateral Trustee all instruments reasonably requested by it to permit such
participation. Each Pledgor agrees that it shall, at its expense, diligently
prosecute any such proceedings and shall consult with the Collateral Trustee,
its attorneys and experts, and cooperate with them in the carrying on or defense
of any such proceedings.

         6. Voting Rights; Dividends; Etc.

                  (a) So long as no default or event of default, however
denominated, under any Credit Document (an "Event of Default") has occurred:

                           (i) A Pledgor shall be entitled to exercise any and
                  all voting and/or other consensual rights pertaining to its
                  respective Pledged Collateral or any part thereof for any
                  purpose consistent with the terms of this Agreement or the
                  Credit Documents; provided, however, that such Pledgor shall
                  not exercise or refrain from exercising any such right with
                  the intent of causing a material adverse effect.

                           (ii) A Pledgor shall be entitled to receive and
                  retain any and all dividends paid in respect of the Pledged
                  Collateral, other than any and all:

                                    (A) dividends paid or payable other than in
                           cash in respect of, and instruments and other
                           property received, receivable or otherwise
                           distributed in respect of, or in exchange for, any
                           Pledged Collateral,

                                    (B) dividends and other distributions paid
                           or payable in cash in respect of any Pledged
                           Collateral in 0 connection with a partial or total
                           liquidation or dissolution or in connection with a
                           return of capital, capital surplus or
                           paid-in-surplus, and

                                       7
<PAGE>

                                    (C) cash paid, payable or otherwise
                           distributed in redemption of, or in exchange for, any
                           Pledged Collateral,

                  and all of the foregoing described dividends, if any, received
                  by any Pledgor, (i) shall be received in trust for the benefit
                  of the Collateral Trustee and segregated from the other
                  property or funds of such Pledgor and (ii) shall be forthwith
                  delivered to the Collateral Trustee as Pledged Collateral in
                  the same form as so received (with any necessary endorsement).

                           (iii) The Collateral Trustee shall execute and
                  deliver (or cause to be executed and delivered) to a Pledgor
                  all such proxies and other instruments as such Pledgor may
                  reasonably request for the purpose of enabling such Pledgor to
                  exercise the voting and other rights which it is entitled to
                  exercise pursuant to clause (i) above.

         Regardless of a Pledgor's right described above to receive and retain
         certain rights and property, such rights and property nonetheless
         secure the repayment of the Secured Obligations and are a part of the
         Pledged Collateral.

                  (b) Upon the occurrence and during the continuation of an
Event of Default and notice thereof to the Company, all rights of a Pledgor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 6(a)(i), and to receive all dividends
which it may be entitled to receive under Section 6(b)(ii), and the obligations
of the Collateral Trustee under Section 6(a)(iii) shall cease, and all such
rights shall thereupon become vested in the Collateral Trustee who shall
thereupon have the sole right to exercise such voting and other rights.

                  (c) In order to permit the Collateral Trustee to exercise the
voting and other rights which it may be entitled to exercise pursuant to Section
6(b), each Pledgor agrees that it shall, from time to time execute and deliver
to the Collateral Trustee appropriate documents and instruments as the
Collateral Trustee may request. To this end, each Pledgor hereby irrevocably
constitutes and appoints the Collateral Trustee the proxy and attorney-in-fact
of each Pledgor, with full power of substitution, to vote, and to act with
respect to, any and all Pledged Collateral standing in the name of such Pledgor
or with respect to which such Pledgor is entitled to vote and act, subject to
the understanding that such proxy may not be exercised unless an Event of
Default has occurred and is continuing. The proxy herein granted is coupled with
an interest, is irrevocable, and shall continue until payment in full in cash of
the Secured Obligations, the termination of the Credit Document Commitments.

         7. Collateral Trustee's Rights and Appointed as Attorney-in-Fact. The
provisions of Article 5 of the Collateral Trust Agreement shall inure to the
benefit of Collateral Trustee in respect of this Agreement and shall be binding
upon the parties hereto. Each Pledgor hereby appoints the Collateral Trustee
such Pledgor's true and lawful attorney-in-fact, with full authority in the
place and stead of such Pledgor and in the name of such Pledgor or otherwise,
from time to time in the Collateral Trustee's discretion, subject to Section 6,
to take any action and to execute any document or instrument which the
Collateral Trustee may reasonably deem necessary or desirable to accomplish the
purposes of this Agreement, including, without

                                       8
<PAGE>

limitation, to receive, endorse and collect all instruments made payable to such
Pledgor representing any dividend, interest payment or other distribution in
respect of the Pledged Collateral or any part thereof and to give full discharge
for the same. The Collateral Trustee's liability, if any, otherwise arising
under applicable law shall be limited to amounts actually received as a result
of the exercise of the powers granted to it herein. No Collateral Trustee or
Financial Institution, and no officer, director, employee or collateral trustee
of the Collateral Trustee or any Financial Institution, shall be responsible to
any Pledgor for any act or failure to act hereunder, except that any such Person
shall be responsible for its own gross negligence or willful misconduct.

         8. Collateral Trustee May Perform. The Collateral Trustee is authorized
to perform, or cause performance of, any agreement contained herein in the event
that a Pledgor fails to timely perform the same, and the reasonable expenses of
the Collateral Trustee incurred in connection therewith shall be payable by such
Pledgor or by the Company. The Collateral Trustee is further authorized in its
discretion to take any other action, either on its own behalf or on behalf of a
Pledgor (and as regards actions taken on behalf of a Pledgor, this authorization
is irrevocable and is an agency coupled with an interest), as the Collateral
Trustee may elect, which the Collateral Trustee may deem necessary or
appropriate to protect and preserve the rights, titles and interests of the
Collateral Trustee hereunder. The powers conferred on the Collateral Trustee
pursuant to this Agreement are conferred solely to protect the Collateral
Trustee and Financial Institutions' interest in the Pledged Collateral and shall
not impose any duty or obligation on the Collateral Trustee or any Financial
Institution to perform any of the powers herein conferred. No exercise of any of
the rights provided for in this Agreement constitutes a retention of collateral
in satisfaction of indebtedness.

         9. No Responsibility for Certain Actions; Indemnity. Neither the
Collateral Trustee nor any other Financial Institution shall have responsibility
for (a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Collateral, whether or not the Collateral Trustee or any other Financial
Institution has or is deemed to have knowledge of such matters, (b) taking any
necessary steps to preserve any rights against any Person with respect to any
Pledged Collateral or (c) supervising, monitoring or controlling any aspect of
the character or condition of any of the Pledged Collateral or any operations
conducted in connection with it for the benefit of a Pledgor or any other
Person. Each Pledgor agrees to indemnify, defend and hold Collateral Trustee,
Financial Institutions, each of their respective shareholders, directors,
officers, agents, advisors and employees (collectively "Indemnified Parties")
harmless from and against any and all loss, liability, obligation, damage,
penalty, judgment, claim, deficiency, expense, action, suit, cost and
disbursement of any kind or nature whatsoever (including interest, penalties,
attorneys' fees and amounts paid in settlement), imposed on, incurred by or
asserted against the Indemnified Parties growing out of or resulting from this
Agreement or any transaction or event contemplated in it (except that such
indemnity shall not be paid to any Indemnified Party to the extent such loss,
etc. directly results from the gross negligence or willful misconduct of such
Indemnified Party).

         10. Remedies upon Default. If any Event of Default shall have occurred
and be continuing:

                                       9
<PAGE>

                  (a) The Collateral Trustee may exercise in respect of the
Pledged 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 in
default under the UCC, and, subject to applicable regulatory and legal
requirements, the Collateral Trustee may also, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at any of
the Collateral Trustee's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Trustee may deem
commercially reasonable. Upon consummation of any such sale, the Collateral
Trustee shall have the right to assign, transfer and deliver to the purchaser or
purchasers thereof the Pledged Collateral so sold. Each such purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of any Pledgor, and each Pledgor, for itself and for its successors,
receivers, trustees and assigns, and for any and all persons ever claiming any
interest in the Pledged Collateral, to the extent permitted by law, hereby
WAIVES all rights of extension, redemption, stay, valuation and appraisal, and
any similar right arising under the law of any country, which such Pledgor now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Pledgor agrees that, to the extent notice of
sale shall be required by law, at least 10 days' notice to such Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Collateral Trustee shall
not be obligated to make any sale of Pledged Collateral regardless of notice of
sale having been given. The Collateral Trustee may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned. Each Pledgor hereby WAIVES any claims against the Collateral
Trustee arising by reason of the fact that the price at which any Pledged
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if the Collateral Trustee
accepts the first offer received and does not offer such Pledged Collateral to
more than one offeree. At any public sale made pursuant to this Section 10, any
Financial Institution may bid for or purchase, free from any right of
redemption, stay or appraisal, and any similar right arising under the law of
any country, on the part of any Pledgor (all said rights being also hereby
WAIVED and released by each Pledgor), the Pledged Collateral or any part thereof
offered for sale and may make payment on account thereof by using any claim then
due and payable to it from any Obligor and/or any Pledgor as a credit against
the purchase price, and it may, upon compliance with the terms of sale, hold,
retain and dispose of such property without further accountability to any
Pledgor therefor. For purposes hereof, (i) a written agreement to purchase the
Pledged Collateral or any portion thereof shall be treated as a sale thereof,
(ii) the Collateral Trustee shall be free to carry out such sale pursuant to
such agreement and (iii) no Pledgor shall be entitled to the return of the
Pledged Collateral or any portion thereof subject thereto, notwithstanding the
fact that after the Collateral Trustee shall have entered into such an agreement
all Events of Default shall have been remedied and the Secured Obligations paid
in full. As an alternative to exercising the power of sale herein conferred upon
it, the Collateral Trustee may proceed by a suit or suits at law or in equity to
foreclose upon the Pledged Collateral and to sell the Pledged Collateral or any
portion thereof pursuant to a judgment or decree of a court or courts having
competent jurisdiction or pursuant to a proceeding by a court-appointed
receiver. Any sale pursuant to the provisions of this Section 10 shall be deemed
to conform to the commercially reasonable standards as provided in the UCC. Each
Pledgor covenants and agrees that it will execute and deliver such documents and

                                       10
<PAGE>

take such other action as the Collateral Trustee deems necessary or advisable in
order that any such sale may be made in compliance with applicable law.

                  (b) The Collateral Trustee shall have all the rights of a
secured party after default under the UCC and in conjunction with and in
addition to such rights and remedies:

                           (i) it shall not be necessary that the Pledged
                  Collateral or any part thereof be present at the location of
                  any sale pursuant to the provisions of this Section 10;

                           (ii) to the extent the sale of Pledged Collateral is
                  insufficient to satisfy the Secured Obligations, the Obligors
                  shall remain liable for any deficiency;

                           (iii) the sale by the Collateral Trustee of less than
                  the whole of the Pledged Collateral shall not exhaust the
                  rights of the Collateral Trustee hereunder, and the Collateral
                  Trustee is specifically empowered to make successive sale or
                  sales hereunder until the whole of the Pledged Collateral
                  shall be sold; and, if the proceeds of such sale of less than
                  the whole of the Pledged Collateral shall be less than the
                  aggregate of the Secured Obligations, this Agreement and the
                  security interest created hereby shall remain in full force
                  and effect as to the unsold portion of the Pledged Collateral
                  just as though no sale had been made;

                           (iv) in the event any sale hereunder is not completed
                  or is defective in the opinion of the Collateral Trustee, such
                  sale shall not exhaust the rights of the Collateral Trustee
                  hereunder and the Collateral Trustee shall have the right to
                  cause a subsequent sale or sales to be made hereunder; and

                           (v) demand of performance, advertisement and presence
                  of property at sale are hereby WAIVED and the Collateral
                  Trustee is hereby authorized to sell hereunder any financial
                  asset it may hold as security for the Secured Obligations. All
                  demands and presentments of any kind or nature are expressly,
                  WAIVED by each Pledgor. Each Pledgor hereby WAIVES the right
                  to require the Collateral Trustee to pursue any other remedy
                  for the benefit of such Pledgor and agrees that Collateral
                  Trustee may proceed against any Person for the amount of the
                  Secured Obligations owed to the Collateral Trustee without
                  taking any action against any other Person and without selling
                  or otherwise proceeding against or applying any of the Pledged
                  Collateral in the Collateral Trustee's possession.

                  (c) Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933 and applicable state
securities laws, the Collateral Trustee may be compelled, with respect to any
sale of all or any part of the Pledged Collateral, to limit purchasers to those
who will 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 Pledgor acknowledges and agrees that any such sale may result in
prices and other terms less favorable to the seller than if such sale were a
public sale without such restrictions and agrees that such circumstances shall
not be a factor in determining whether such sale has been made in a commercially
reasonable manner. The Collateral Trustee shall be under no obligation to delay

                                       11
<PAGE>

the sale of any of the Pledged Collateral for the period of time necessary to
permit any Pledgor to register such securities for public sale under the
Securities Act of 1933, or under applicable state securities laws, even if a
Pledgor would agree to do so.

                  (d) If the Collateral Trustee determines to exercise its right
to sell any or all of the Pledged Collateral, upon written request, each Pledgor
shall, and shall cause each of its Subsidiaries to, from time to time, furnish
to the Collateral Trustee all such information as the Collateral Trustee may
reasonably request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by the
Collateral Trustee as exempt transactions under the Securities Act of 1933 and
rules of the Securities and Exchange Commission thereunder, as the same are from
time to time in effect.

                  (e) Any cash held by the Collateral Trustee as Pledged
Collateral and all cash proceeds received by the Collateral Trustee in respect
of any sale of, collection from, or other realization upon all or any part of
the Pledged Collateral shall be at Collateral Trustee's discretion either held
as Pledged Collateral or applied by the Collateral Trustee to the Secured
Obligations in the manner determined by Collateral Trustee in its sole
discretion.

                  (f) All remedies herein expressly provided for are cumulative
of any and all other remedies existing at law or in equity and are cumulative of
any and all other remedies provided for in any other instrument securing the
payment of the Secured Obligations, or any part thereof, or otherwise benefiting
the Financial Institutions, and the resort to any remedy provided for hereunder
or under any such other instrument or provided for by law shall not prevent the
concurrent or subsequent employment of any other appropriate remedy or remedies.

                  (g) The Financial Institutions may resort to any security
given by this Agreement or to any other security now existing or hereafter given
to secure the payment of the Secured Obligations, in whole or in part, and in
such portions and in such order as may seem best to such Financial Institution
in its sole and uncontrolled discretion, and any such action shall not in
anywise be considered as a waiver of any of the rights, benefits or security
interests evidenced by this Agreement.

         11. Expenses. Each Pledgor agrees that it will upon demand pay to the
Collateral Trustee the amount of any and all reasonable costs, disbursements and
expenses of every character, including without limitation the reasonable fees
and expenses of its counsel (including the reasonable allocated cost of in house
counsel), and of any experts, incurred or expended by the Collateral Trustee
from time to time in connection with: (a) the preparation, negotiation,
documentation, closing, renewal, revision, modification, renegotiation or review
of this Agreement; (b) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Pledged Collateral, (c)
the exercise or enforcement of any of the rights of the Collateral Trustee or
any other Financial Institution hereunder, or (d) the failure by a Pledgor to
perform or observe any of the provisions hereof.

         12. Amendments, Etc. Any amendment or waiver to this Agreement or any
provision hereof shall only be effective to the extent such amendment or waiver
(a) complies with all requirements of an amendment to the Collateral Trust
Agreement including those requirements set forth in Section 6.2 of the
Collateral Trust Agreement and (b) is executed by the Persons that

                                       12
<PAGE>

would be required to execute a like amendment of the Collateral Trust Agreement.
Furthermore, all amendments and waivers to this Agreement will be subject to the
limitations and restrictions applicable to amendments and waivers of the
Collateral Trust Agreement. The waiver of any default may be made without
waiving any other prior or subsequent default, and the Collateral Trustee may
remedy any default, without waiving the default remedied. The failure by the
Collateral Trustee to exercise any right, power or remedy upon any default shall
not be construed as a waiver of such default or as a waiver of the right to
exercise any such right, power or remedy at a later date. No single or partial
exercise by the Collateral Trustee of any right, power or remedy hereunder shall
exhaust the same or shall preclude any other or further exercise thereof, and
every such right, power or remedy hereunder may be exercised at any time and
from time to time. No notice to nor demand on a Pledgor in any case shall of
itself entitle a Pledgor to any other or further notice or demand in similar or
other circumstances. Acceptance by the Collateral Trustee of any payment in an
amount less than the amount then due on the Secured Obligations shall be deemed
an acceptance on account only and shall not in any way affect the existence of a
default hereunder. No waiver, release, consent by Collateral Trustee pursuant to
this Agreement shall affect or impair the rights of a Financial Institution
against any third party, except to the extent specifically agreed to by such
Financial Institution in such writing.

         13. Address for Notices. Except as otherwise specified herein, all
notices, requests, demands, consents, instructions or other communications
hereunder shall be given in accordance with the terms of Section 6.4 of the
Collateral Trust Agreement; however, any notice to a Pledgor shall be effective
if delivered to the Company.

         14. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall (a) remain in
full force and effect until termination of the Credit Document Commitments and
payment in full in cash of the Secured Obligations; (b) continue to be effective
or be reinstated, as the case may be, if at any time payment and performance of
the Secured Obligations is rescinded or reduced in amount, or must otherwise be
restored by the Collateral Trustee or any other Financial Institution upon the
insolvency, bankruptcy, or reorganization of the Company or otherwise, all as
though such payment had not been made; (c) be binding upon each Pledgor, its
successors and assigns, and any trustee, receiver, or conservator of a Pledgor,
and any successors in interest of a Pledgor in and to all or any part of the
Pledged Collateral; and (d) inure, together with the rights and remedies of the
Collateral Trustee hereunder, to the benefit of the Collateral Trustee, the
other Financial Institutions and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (d), the
Collateral Trustee and/or any Financial Institution may assign or otherwise
transfer its rights and obligations under the Credit Documents to any other
Person or entity, and such other Person or entity shall thereupon become vested
with all the benefits in respect thereof granted to such Collateral Trustee
and/or Financial Institution herein or otherwise. Upon the completion of both
(i) the termination of the Credit Document Commitments and (ii) the payment in
full in cash of the Secured Obligations, the Company shall be entitled to the
return, upon its request and at its expense, of such of the Pledged Collateral
as shall not have been sold or otherwise applied pursuant to the terms hereof.

         15. Security Interest and Obligations Absolute. Each Pledgor agrees
that it will perform its obligations hereunder strictly in accordance with the
terms of this Agreement regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting

                                       13
<PAGE>

any of such terms or the rights of any of the Financial Institutions with
respect thereto. The obligations of each Pledgor under this Agreement are
independent of the obligations of the Company, any other Pledgor or any other
Person, and a separate action or actions may be brought and prosecuted against
any one or more Pledgors to enforce this Agreement, irrespective of whether any
action is brought against the Company, any other Pledgor or any other Person or
whether the Company, any other Pledgor or any other Person is joined in any such
action or actions. All rights and security interests of the Financial
Institutions hereunder, and all obligations of each Pledgor hereunder, shall be
absolute and unconditional irrespective of:

                  (a) any lack of validity or enforceability of any of the
Credit Documents or any other agreement or instrument relating thereto;

                  (b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any other
amendment, renewal or waiver of or any consent to any departure from any of the
Credit Documents, including, without limitation, any extension of the term and
any increase in the Secured Obligations or any other liabilities resulting from
the extension of additional credit or otherwise;

                  (c) any taking, exchange, release or non-perfection of any
other collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations or any
other liability;

                  (d) any manner of application of collateral, or proceeds
thereof or of collections on account of any guaranty, to all or any of the
Secured Obligations or any other liabilities, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or any
other liabilities or of any other assets of the Company or any other Person;

                  (e) any liquidation, dissolution or termination of existence
of, or other change in, the Company or any other Person;

                  (f) any bankruptcy, insolvency, receivership or other
proceeding involving the Company or any other Person or any defense that may
arise in connection with or as a result of any such bankruptcy, insolvency,
receivership or other proceeding or otherwise;

                  (g) any indulgence, moratorium or release granted by any
Financial Institution, including but not limited to (i) any renewal, extension
or modification which a Financial Institution may grant with respect to the
Secured Obligations, (ii) any surrender, compromise, release, renewal,
extension, exchange or substitution which a Financial Institution may grant in
respect of any item securing the Secured Obligations, or any part thereof or any
interest therein, or (iii) any release or indulgence granted to any endorser,
guarantor or surety of the Secured Obligations; or

                  (h) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Company, any Pledgor, a third party
pledgor or any other Person.

         16.      Right of Set-off.

                                       14
<PAGE>

                  (a) Upon the occurrence and during the continuation of any
Event of Default, each Financial Institution is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such
Financial Institution to or for the credit or the account of a Pledgor against
any and all of the Secured Obligations, irrespective of whether or not such
Financial Institution shall have made any demand under this Agreement and
although such Secured Obligations may be contingent and unmatured. Each
Financial Institution which sets-off pursuant to this Section 16(a) shall give
prompt notice to the Company following the occurrence thereof; provided that the
failure to give such notice shall not affect the validity of the set-off.

                  (b) Any payment obtained by any Financial Institution pursuant
to Section 16(a) (or in any other manner directly from a Pledgor) shall be
remitted to the Collateral Trustee and the Collateral Trustee shall, at the
Collateral Trustee's discretion, either hold such payment as Pledged Collateral
or apply it to the Secured Obligations in the manner determined by the
Collateral Trustee in its sole discretion.

         17. Severability. Any provision hereof 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 without affecting the validity or enforceability
of any provision in any other jurisdiction.

         18. Waiver of Jury Trial. THE PLEDGORS, THE COLLATERAL TRUSTEE, AND THE
FINANCIAL INSTITUTIONS HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY.

         19. Governing Law; Jurisdiction.

         (a) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. Unless otherwise defined herein or in
the in the Credit Agreement dated as of July 31, 2002, among the Company and the
Financial Institutions named therein, terms defined in Articles 8 and 9 of the
New York UCC are used herein as therein defined.

         (b) ANY LITIGATION BASED HEREON, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE COLLATERAL
TRUSTEE, THE FINANCIAL INSTITUTIONS OR THE PLEDGORS IN CONNECTION HEREWITH MAY
BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT THE COLLATERAL TRUSTEE'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH
PLEDGOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK
AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 6.4 OF THE COLLATERAL TRUST
AGREEMENT. EACH PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT

                                       15
<PAGE>

FORUM. TO THE EXTENT THAT ANY PLEDGOR 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, EACH PLEDGOR
HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT.

         (c) THIS AGREEMENT TOGETHER WITH THE OTHER CREDIT DOCUMENTS EMBODIES
THE ENTIRE AGREEMENT AND UNDERSTANDING AMONG THE PARTIES WITH RESPECT TO ITS
SUBJECT MATTER AND SUPERSEDES ALL PRIOR OR CONTEMPORANEOUS AGREEMENTS AND
UNDERSTANDINGS OF SUCH PERSONS, VERBAL OR WRITTEN, RELATING TO SUCH SUBJECT
MATTER.

         20. Counterpart. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original for all purposes;
but such counterparts shall be deemed to constitute but one and the same
instrument.

         21. Waiver. Each Pledgor hereby waives promptness, diligence, notice of
acceptance and any other notice (except notices expressly required to be given
to such Pledgor under this Agreement) with respect to any of the Secured
Obligations and this Agreement and any requirement that any of the Financial
Institutions protect, secure, perfect or insure any security interest or other
Lien or any property subject thereto or exhaust any right to take any action
against the Company or any other Person or any collateral.

         22. Subrogation and Other Rights to Repayment. Each Pledgor irrevocably
WAIVES any and all rights to which it may be entitled (by operation of law or
otherwise) by performing its obligations under this Agreement (i) to be
subrogated to the rights of any Financial Institution against the Company or
(ii) to receive any payment, in the nature of contribution or for any other
reason, from the Company. If any amount shall be paid to any Pledgor on account
of such subrogation rights or the Pledgor receives any such payment referred to
in clause (ii) above, such Pledgor agrees to hold such amount of such payment,
as the case may be, in trust for the benefit of the Financial Institutions, and
such Pledgor agrees to forthwith pay such amount or such payment, as the case
may be, to the Collateral Trustee to be credited against and applied upon the
Secured Obligations, whether matured or unmatured, in such order as may be
determined by the Collateral Trustee in its sole discretion.

         23. Subordination. Each Pledgor hereby expressly covenants and agrees
for the benefit of the Financial Institutions that all obligations and
liabilities of the Obligors or other Pledgors to such Pledgor of whatsoever
description (including, without limitation, all intercompany receivables of such
Pledgor from each of the Obligors or other Pledgors) shall be subordinated and
junior in right of payment to the Secured Obligations. Following the occurrence
of an Event of Default, all indebtedness of the Obligors or other Pledgors to
such Pledgor shall be collected and received by such Pledgor as trustee for the
Financial Institutions and paid over to the Financial Institutions, or any one
or more of them, as the case may be, on account of the Secured Obligations, but
without reducing or affecting in any manner the obligations of such Pledgor
under this Agreement.

         24. Incorporated Definitions. All defined terms that are incorporated
from other agreements into this Agreement by reference shall have the meanings
assigned to such terms as

                                       16
<PAGE>

of the date hereof but shall not be modified by any subsequent amendment or
modification that takes place after the date hereof unless consented to by the
parties hereto.

                                       17
<PAGE>

IN WITNESS WHEREOF, the Pledgors caused this Agreement to be duly executed and
delivered by their respective officers or representatives thereunto duly
authorized as of the date first above written.

                                            PLEDGORS:

                                            [SEE ATTACHED CHART.]

Agreed to:

CITIBANK, N.A., AS COLLATERAL TRUSTEE

By:      /s/ J. Christopher Lyons
     ---------------------------------------
Name:
       -------------------------------------
Title:   Vice President
        ------------------------------------

                      [SIGNATURE PAGE TO PLEDGE AGREEMENT]

<PAGE>

By signing below, each of the following Obligors (the equity interests or shares
of which constitute Pledged Shares hereunder) confirms that an executed copy of
this Agreement has been submitted to it and acknowledges the above pledge of the
Pledged Collateral.

                                    OBLIGORS:

                              [SEE ATTACHED CHART.]

                      [SIGNATURE PAGE TO PLEDGE AGREEMENT]

<PAGE>

                                   SCHEDULE I
                               TO PLEDGE AGREEMENT

                           SCHEDULE OF PLEDGED SHARES

<Table>
<Caption>
                                                                                                        PERCENT OF
                                        STATE OF                                                        TOTAL EQUITY
                                        ORGANIZATION               STOCK                                INTERESTS
                   PLEDGED              (PLEDGED       CLASS OF  CERTIFICATE   PAR       NUMBER OF      OWNED BY
PLEDGOR            SUBSIDIARY           SUBSIDIARY)    STOCK         NO.       VALUE      SHARES        PLEDGOR*
-------            ----------           ------------   --------  -----------   -----     ---------      -------------
<S>                <C>                  <C>            <C>        <C>          <C>        <C>           <C>
The Williams       Williams Energy         DE            N/A         N/A        N/A          N/A            100%
Companies, Inc.    Services, L.L.C.

                   Williams                DE          Common         1         100           10            100%
                   Natural Gas
                   Liquids, Inc.

                   Williams                DE          Common         2         1.00        1,000           100%
                   Midstream
                   Natural Gas
                   Liquids, Inc.

                   Williams                DE          Common         1         1.00        1,000           100%
                   Express, Inc.
                   (DE)

Williams Energy    Williams Field          DE          Common         5         1.00        1,000           100%
Services, L.L.C.   Services Group,
                   Inc.

                   Williams Alaska         DE            N/A         N/A        N/A          N/A            100%
                   Pipeline
                   Company, L.L.C.

                   Williams                DE            N/A         N/A        N/A          N/A            100%
                   Bio-Energy,
                   L.L.C.
</Table>

<PAGE>

<Table>
<S>                <C>                  <C>            <C>        <C>          <C>        <C>           <C>
                   Williams                DE          Common         3         1.00        1,000           100%
                   Merchant
                   Services
                   Company, Inc.

                   Mapco, Inc.             DE          Common         1        10.00         100            100%

                   Williams                DE            N/A         N/A        N/A          N/A            100%
                   Production
                   Company, L.L.C.

                   Williams GP, LLC        DE            N/A         N/A        N/A          N/A          [99.8]%

                   Williams Energy         DE            N/A         N/A        N/A          N/A          [19.3]%
                   Partners, L.P.

Williams Field     Black Marlin            TX          Common         16        0.10        44,800          100%
Services Group,    Pipeline Company
Inc.

                   WFS                     DE          Common         1         0.00         100            100%
                   Enterprises,
                   Inc.

                   WFS-Liquids             DE          Common         12        1.00         100            100%
                   Company

                   Williams Field          DE          Common         4         1.00        1,000           100%
                   Services Company

                   Williams Gas            DE          Common         2         1.00        1,000           100%
                   Processing
                   Company

                   Williams Gas            DE          Common         5         1.00        1,000           100%
                   Processing -
                   Wamsutter
                   Company

                   North Padre             DE          Common         1         1.00        1,000           100%
                   Island
                   Spindown, Inc.
</Table>

<PAGE>

<Table>
<S>                <C>                  <C>            <C>        <C>          <C>        <C>           <C>
Williams           Williams Energy         DE          Common         7         1.00        1,000           100%
Merchant           Marketing &
Services           Trading Company
Company, Inc.

Williams Energy    Worthington             DE            N/A         N/A        N/A          N/A            100%
Marketing &        Generation,
Trading Company    L.L.C.

                   Memphis                 DE            N/A         N/A        N/A          N/A            100%
                   Generation,
                   L.L.C.

Mapco, Inc.        Gas Supply,             DE            N/A         N/A        N/A          N/A            100%
                   L.L.C.

Williams Natural   Juarez Pipeline         DE          Common         2         1.00        1,000           100%
Gas Liquids, Inc.  Company

                   MAPL                    DE          Common         2         1.00        1,000           100%
                   Investments,
                   Inc.

                   WFS-NGL                 DE          Common         3         1.00        1,000           100%
                   Pipeline
                   Company, Inc.

                   Williams GP, LLC        DE            N/A         N/A        N/A          N/A           [0.2]%

                   Williams Energy         DE            N/A         N/A        N/A          N/A           [5.1%]
                   Partners, L.P.

WFS-NGL Pipeline   WILPRISE                DE            N/A         N/A        N/A          N/A           37.35%
Company, Inc.      Pipeline
                   Company,
                   L.L.C.**

</Table>

<PAGE>

<Table>
<S>                <C>                  <C>            <C>        <C>          <C>        <C>           <C>
                   Tri-States NGL          DE            N/A         N/A        N/A          N/A           16.67%
                   Pipeline,
                   L.L.C.**

Juarez Pipeline    Rio Grande              DE            N/A         N/A        N/A          N/A            45%
Company            Pipeline
                   Company**

Williams           Baton Rouge             DE            N/A         N/A        N/A          N/A           27.5%
Midstream          Fractionators,
Natural Gas        L.L.C.**
Liquids, Inc.

Williams           Williams                 AK         Common         1         1.00        1,000           100%
Express, Inc.      Express, Inc.
(DE)               (AK)

                   Williams                 DE           N/A         N/A        N/A          N/A            100%
                   Refining &
                   Marketing,
                   L.L.C.

                   Williams Alaska         AK          Common         1         1.00        1,000           100%
                   Petroleum, Inc.

Williams Alaska    Williams Alaska         AK            N/A         N/A        N/A          N/A            100%
Petroleum, Inc.    Air Cargo
                   Properties,
                   L.L.C.

Williams           Williams                DE            N/A         N/A        N/A          N/A            100%
Olefins, L.L.C.    Olefins
                   Feedstock
                   Pipelines,
                   L.L.C.

Williams           Williams                DE            N/A         N/A        N/A          N/A            100%
Refining &         Olefins, L.L.C.
Marketing, L.L.C.

                   Williams                DE            N/A         N/A        N/A          N/A            100%
                   Generating
                   Memphis, LLC
</Table>

<PAGE>

<Table>
<S>                <C>                  <C>            <C>        <C>          <C>        <C>           <C>
                   Williams                DE          Common         3         1.00        1,000           100%
                   Memphis
                   Terminal, Inc.

                   Williams                DE          Common         4         1.00        1,000           100%
                   Petroleum
                   Pipeline
                   Systems, Inc.

Williams           Williams                DE          Common         2         1.00        1,000           100%
Bio-Energy,        Ethanol
L.L.C.             Services, Inc.

                   Nebraska                KS            N/A         N/A        N/A          N/A           74.9%
                   Energy, L.L.C.**

WFS Enterprises,   Williams Field          DE            N/A         N/A        N/A          N/A            99%
Inc.               Services-Gulf
                   Coast Company,
                   L.P.

Williams Field     Williams Field          DE            N/A         N/A        N/A          N/A             1%
Services Company   Services-Gulf
                   Coast Company,
                   L.P.

WFS-Liquids        WFS-Offshore            DE          Common         5         0.00         100            100%
Company            Gathering
                   Company

Williams           Williams                DE            N/A         N/A        N/A          N/A            100%
Petroleum          Mid-South
Pipeline           Pipelines, LLC
Systems, Inc.
</Table>

* Each Pledgor is pledging all of the equity interests it owns or hereafter
acquires in each of its pledged Subsidiaries. This column indicates the percent
of total equity interests in the pledged Subsidiary owned by this Pledgor as of
the date of this Agreement.

** Pledgor's pledge of the equity interests in this Subsidiary shall not be
effective until Pledgor has obtained all necessary consents in connection with
such pledge, as more fully described on Schedule XII of the Credit Agreement.

<PAGE>

                                   SCHEDULE II
                               TO PLEDGE AGREEMENT

                               UCC FILING OFFICES

<Table>
<Caption>
                                                       UCC Central Filing Offices of the Secretary of
               Entity                                        State for the Following States
               ------                                  -----------------------------------------------
<S>      <C>                                             <C>
A.       Black Marlin Pipeline Company                                        TX
B.       Gas Supply, L.L.C.                                                   DE
C.       Juarez Pipeline Company                                              DE
D.       Mapco, Inc.                                                          DE
E.       MAPL Investments, Inc.                                               DE
F.       Memphis Generation, L.L.C.                                           DE
G.       North Padre Island Spindown, Inc.                                    DE
H.       The Williams Companies, Inc.                                         DE
I.       WFS - NGL Pipeline Company, Inc.                                     DE
J.       WFS Enterprises, Inc.                                                DE
K.       WFS Offshore Gathering Company                                       DE
L.       WFS-Liquids Company                                                  DE
M.       Williams Alaska Air Cargo Properties, L.L.C.                         AK
N.       Williams Alaska Petroleum, Inc.                                      AK
O.       Williams Alaska Pipeline Company, L.L.C.                             DE
</Table>

<PAGE>

<Table>
<Caption>
                                                       UCC Central Filing Offices of the Secretary of
               Entity                                        State for the Following States
               ------                                  -----------------------------------------------
<S>      <C>                                             <C>
P.       Williams Bio-Energy, L.L.C.                                          DE
Q.       Williams Energy Marketing & Trading Company                          DE
R.       Williams Energy Services, L.L.C                                      DE
S.       Williams Ethanol Services, Inc.                                      DE
T.       Williams Express, Inc. (AK)                                          AK
U.       Williams Express, Inc. (DE)                                          DE
V.       Williams Field Services Company                                      DE
W.       Williams Field Services Group, Inc.                                  DE
X.       Williams Field Services-Gulf Coast Company,                          DE
           L.P.
Y.       Williams Gas Processing Company                                      DE
Z.       Williams Gas Processing -Wamsutter Company                           DE
AA.      Williams Generating Memphis, LLC                                     DE
BB.      Williams GP, LLC                                                     DE
CC.      Williams Memphis Terminal, Inc.                                      DE
DD.      Williams Merchant Services Company, Inc                              DE
</Table>

<PAGE>

<Table>
<Caption>
                                                       UCC Central Filing Offices of the Secretary of
               Entity                                        State for the Following States
               ------                                  -----------------------------------------------
<S>      <C>                                             <C>
EE.      Williams Mid-South Pipelines, LLC                                    DE
FF.      Williams Midstream Natural Gas Liquids, Inc.                         DE
GG.      Williams Natural Gas Liquids, Inc.                                   DE
HH.      Williams Olefins Feedstock Pipelines, L.L.C.                         DE
II.      Williams Olefins, L.L.C.                                             DE
JJ.      Williams Petroleum Pipeline Systems, Inc.
KK.      Williams Production Company, L.L.C.                                  DE
LL.      Williams Refining & Marketing, L.L.C.                                DE
MM.      Worthington Generation, L.L.C.                                       DE
</Table>

<PAGE>

                                  SCHEDULE III
                               TO PLEDGE AGREEMENT

                   STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE

         For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, ____________________________________.
("Transferor") does hereby sell, assign and transfer to ___________________
___________ (_____) shares of the Common Stock, par value $______ per share of
__________________________________, ____ a _______________ ________________ (the
"Company"), represented by Certificate No. __ (the "Shares"). Transferor hereby
irrevocably constitutes and appoints the Company as Attorney-in-fact to transfer
the foregoing Shares on the books of the Company, with full power of
substitution in the premises, and ratifies and confirms all lawful actions taken
by said attorney-in-fact by virtue hereof.

         The Shares are owned beneficially and of record by the undersigned,
free and clear of all liens, security interests, claims, charges, encumbrances
and rights of others.

         Executed this ___ day of _______, 20__

                                          By:
                                              ---------------------------------
                                          Name:
                                                -------------------------------

<PAGE>

                                   SCHEDULE IV
                                       TO
                                PLEDGE AGREEMENT

                           PLEDGE AGREEMENT SUPPLEMENT

         This Pledge Agreement Supplement, dated as of _____________________,
_____, is delivered pursuant to either Section 3 or Section 5 of the Pledge
Agreement referred to below. The undersigned hereby agrees that this Pledge
Agreement Supplement may be attached to the Pledge Agreement dated as of July
31, 2002 (the "Pledge Agreement"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and between the
undersigned and Citibank, N.A., as collateral trustee, for the benefit of the
holders of the Secured Obligations. This instrument and each issue arising
hereunder shall be governed by, and construed in accordance with, the laws of
the State of New York (excluding its conflict of laws principles). This choice
of New York law has been made pursuant to Section 5-1401 of the General
Obligations Law of the State of New York.

         The undersigned agrees that the securities listed below shall for all
purposes constitute Pledged Collateral and shall be subject to the security
interest created by the Pledge Agreement.

         The undersigned hereby certifies that the representations and
warranties set forth in Section 4 of the Pledge Agreement are true and correct
as to the Pledged Collateral listed herein on and as of the date hereof.

                                        [PLEDGOR]

                                        By:
                                           ------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------

<Table>
<Caption>
                   State or           Class          Stock             Percentage
Name of            Country or         of             Certificate       of                  Par           Number
Subsidiary         Organization       Stock          No(s).            Ownership           Value         of Shares
----------         ------------       -----          ------            ---------           -----         ---------
<S>                 <C>               <C>            <C>                <C>               <C>            <C>

</Table>

<PAGE>

By signing below, _____________________________ confirms that an executed copy
of the Pledge Agreement dated as of July 31, 2002 among The Williams Companies,
Inc., and each of the Subsidiaries which is a signatory thereto or which
subsequently became a party thereto in accordance with the terms thereof, in
favor of Citibank, N.A., as collateral trustee, together with this Pledge
Agreement Supplement, has been submitted to it and acknowledges the above pledge
of the Pledged Collateral.

                                [NAME OF COMPANY IN WHICH
                                SHARES ARE PLEDGED]
                                     a [jurisdiction and form of organization]

                                By:
                                   --------------------------------------------
                                Name:
                                     ------------------------------------------
                                Title:
                                      -----------------------------------------

<PAGE>

                                   SCHEDULE V
                                       TO
                                PLEDGE AGREEMENT

                                CREDIT DOCUMENTS

1. That Credit Agreement dated as of July 31, 2002 (as amended, modified,
supplemented or restated from time to time), by and among the Company together
with Citicorp USA, Inc., as agent and collateral agent, Bank of America N. A. as
syndication agent, Citibank, N.A. and Bank of America N.A. as issuing bank,
Salomon Smith Barney Inc. as L/C Arranger, and the banks named therein.

2. The Company; Northwest Pipeline Corporation, a Delaware corporation;
Transcontinental Gas Pipe Line Corporation, a Delaware corporation; and Texas
Gas Transmission Corporation, a Delaware corporation, as the borrowers, have
entered into a Credit Agreement dated July 25, 2000, as amended, together with
the banks named therein, and The Chase Manhattan Bank and Commerzbank AG as
co-syndication agents, and Credit Lyonnais New York Branch as documentation
agent and Citibank, N.A., as agent, and Salomon Smith Barney, as Arranger.

3 Indenture between MAPCO, Inc., as Issuer, and Bankers Trust Company, as
Trustee dated March 31, 1990.

4 Indenture between Transco Energy Company, as Issuer, and The Bank of New York,
as Trustee, dated May 1, 1990.

         All documents, instruments, agreements, certificates and notices at any
time executed and/or delivered in connection with any of the foregoing Credit
Documents.

<PAGE>

PLEDGORS TO THE PLEDGE AGREEMENT:

Juarez Pipeline Company
Mapco, Inc.
The Williams Companies, Inc.
WFS Enterprises, Inc.
WFS-Liquids Company
WFS-NGL Pipeline Company Inc.
Williams Alaska Petroleum, Inc.
Williams Alaska Pipeline Company, L.L.C.
Williams Bio-Energy, L.L.C.
Williams Energy Marketing & Trading Company
Williams Energy Services, L.L.C.
Williams Express, Inc. [DE]
Williams Field Services Company
Williams Field Services Group, Inc.
Williams Merchant Services Company, Inc.
Williams Midstream Natural Gas Liquids, Inc.
Williams Natural Gas Liquids, Inc.
Williams Olefins, L.L.C.
Williams Petroleum Pipeline Systems, Inc.
Williams Refining & Marketing, L.L.C.

<PAGE>

PLEDGEES TO THE PLEDGE AGREEMENT:

Black Marlin Pipeline Company
Gas Supply, L.L.C.
Juarez Pipeline Company
Mapco, Inc.
MAPL Investments, Inc.
Memphis Generation, L.L.C.
North Padre Island Spindown, Inc.
WFS Enterprises, Inc.
WFS-Liquids Company
WFS-NGL Pipeline Company Inc.
WFS-Offshore Gathering Company
Williams Alaska Air Cargo Properties, L.L.C.
Williams Alaska Petroleum, Inc.
Williams Alaska Pipeline Company, L.L.C.
Williams Bio-Energy, L.L.C.
Williams Energy Marketing & Trading Company
Williams Energy Services, L.L.C.
Williams Ethanol Services, Inc.
Williams Express, Inc. [AK]
Williams Express, Inc. [DE]
Williams Field Services Company
Williams Field Services Group, Inc.
Williams Field Services-Gulf Coast Company, L.P.
Williams Gas Processing-Wamsutter Company
Williams Gas Processing Company
Williams Generating Memphis, LLC
Williams GP, LLC
Williams Memphis Terminal, Inc.
Williams Merchant Services Company, Inc.
Williams Mid-South Pipelines, LLC
Williams Midstream Natural Gas Liquids, Inc.
Williams Natural Gas Liquids, Inc.
Williams Olefins Feedstock Pipelines, L.L.C.
Williams Olefins, L.L.C.
Williams Production Company, L.L.C.
Williams Refining & Marketing, L.L.C.
Worthington Generation, L.L.C.

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