Document:

<PAGE>   1
                                                                    EXHIBIT 10.3

                    CONVEYANCE OF OVERRIDING ROYALTY INTEREST

                                      FROM

                       CALLON PETROLEUM OPERATING COMPANY

                                    "GRANTOR"

                                       TO

                           DUKE CAPITAL PARTNERS, LLC

                                    "GRANTEE"

                                      DATED

                                  JUNE 29, 2001

<PAGE>   2

                                TABLE OF CONTENTS

<Table>
<S>           <C>                                                              <C>
                                    ARTICLE 1
                                   CONVEYANCE

Section 1.1   Conveyance....................................................... 1
Section 1.2   Repurchase Option and Right of First Refusal..................... 1
Section 1.3   Non-Operating, Non-Expense Bearing Interest...................... 2
Section 1.4   Marketing of Overriding Royalty Hydrocarbons..................... 2
Section 1.5   Certain Limitations.............................................. 3
Section 1.6   Royalties; Taxes................................................. 3
Section 1.7   Title............................................................ 3
Section 1.8   Mortgage or Assignment by Grantor................................ 3
Section 1.9   Pooling or Unitization........................................... 3
Section 1.10  Operations....................................................... 4
Section 1.11  Scope of the Overriding Royalty Interest......................... 4
Section 1.12  Settlement....................................................... 4
Section 1.13  Prudent Standard................................................. 4
Section 1.14  Royalty Relief................................................... 4
Section 1.15  Restrictions on Subsequently Created Interests................... 5

                                    ARTICLE 2
                                   DEFINITIONS

                                    ARTICLE 3
                                  MISCELLANEOUS

Section 3.1   Governing Law.................................................... 7
Section 3.2   Successors and Assigns........................................... 8
Section 3.3   Multiple Originals............................................... 8
Section 3.4   Perpetuities..................................................... 8
Section 3.5   Partial Invalidity............................................... 8
Section 3.6   Notices.......................................................... 8

EXHIBIT A       Property Exhibits
EXHIBIT B       Permitted Encumbrances
</Table>

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<PAGE>   3

                                  CONVEYANCE OF
                           OVERRIDING ROYALTY INTEREST

         This Conveyance of Overriding Royalty Interest (this "Conveyance"),
made effective as of the Effective Time, is from Callon Petroleum Operating
Company, a Delaware corporation whose address is 200 North Canal Street,
Natchez, Mississippi 39121-1297, and whose Federal Tax I.D. Number is 94-0744280
("Grantor"), to Duke Capital Partners, LLC, a Delaware limited liability
company, whose mailing address is 128 South Tryon Street, Suite 1100, Charlotte,
North Carolina, 28202, and whose Federal Tax I.D. Number is 56-2186625
("Grantee").

         WHEREAS, Grantor is the owner of an interest in the oil and gas leases
described in Exhibit A hereto, and Grantor has agreed to convey to Grantee the
Overriding Royalty Interest as defined in Section 1.1 below, as a condition of
that certain Credit Agreement dated June 29, 2001, by and among Callon Petroleum
Company, as Borrower thereunder, the lenders signatory thereto and Grantee, as
Administrative Agent thereunder (the "Credit Agreement"), pursuant to that
certain letter agreement dated the date hereof between Callon Petroleum Company
and Grantee; and

         WHEREAS, capitalized terms as used herein shall have the meanings given
to them in Article II hereof unless otherwise defined herein.

         NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS:

                                   ARTICLE 1
                                   CONVEYANCE

         SECTION 1.1 CONVEYANCE. For and in consideration of $1,000.00 and other
good and valuable consideration to Grantor cash in hand paid by Grantee, the
receipt and sufficiency of which is hereby acknowledged, Grantor hereby GRANTS,
BARGAINS, SELLS, CONVEYS, ASSIGNS, SETS OVER, AND DELIVERS unto Grantee, its
successors and assigns, effective as of the Effective Time, an overriding
royalty interest in and to each of the Leases equal to the Overriding Royalty
Percentage of all Hydrocarbons produced and saved from each of the Leases,
together with all and singular the rights and appurtenances thereto in anywise
belonging (the "Overriding Royalty Interest").

         TO HAVE AND TO HOLD the Overriding Royalty Interest unto Grantee, its
successors and assigns forever, subject to the following terms, reservations,
rights of first refusal, provisions and conditions.

         SECTION 1.2 REPURCHASE OPTION AND RIGHT OF FIRST REFUSAL. (a) Grantor
hereby RETAINS and RESERVES unto itself, its successors and assigns, an option
("Repurchase Option") to repurchase this Overriding Royalty Interest in all or
any Property in the event that Grantor has a binding contract to sell its
interest in such Property to a bona-fide third party purchaser. The repurchase
price to be paid to Grantee by Grantor shall be proportional to such bona-fide
third party purchaser's purchase price attributable to such Property. Grantee
hereby accepts this Conveyance subject to and acknowledges that the Overriding
Royalty Interest is burdened by such Repurchase Option. In connection with a
sale of all or substantially all of Grantor's interest in any Property to a
bona-fide third party purchaser,

<PAGE>   4

Grantor may give Grantee written notice stating the terms and conditions of such
offer ("Grantor's Offer Notice") and Grantee shall agree to sell its Overriding
Royalty Interest to Grantor on or before the same day Grantor's interest is sold
at the price described above on an "as is-where is" basis without representation
or warranty or indemnity of any kind except as to title with respect to any
claims by, through and under Grantee.

(b) If Grantee desires to sell, assign, convey or transfer all or any portion of
its Overriding Royalty Interest in any Property (the "Interest"), Grantee shall
give written notice ("Grantee's Offer Notice") to Grantor stating that Grantee
desires to effect such transfer and setting forth the material terms thereof.
The giving of the Grantee's Offer Notice by Grantee to Grantor shall constitute
an offer by Grantee to sell the Interest to Grantor pursuant to the terms set
forth in the Grantee's Offer Notice. Grantor shall have 15 days after its
receipt of the Grantee's Offer Notice in which to accept such offer by giving
written notice of acceptance to Grantee prior to the expiration of such 15-day
period. If Grantor accepts such offer, Grantee and Grantor shall exercise their
commercially reasonable efforts to effectuate the transfer as between them as
soon as practicable. If Grantor rejects in writing the offer set forth in the
Grantee's Offer Notice, or fails to respond within 15 days after its receipt of
the Grantee's Offer Notice, Grantee may consummate the sale to any bona-fide
third party purchaser, but only on terms equal to or better than those set forth
in the Grantee's Offer Notice. If Grantee does not consummate the sale within 90
days after receipt of written refusal by Grantee or expiration of the 15-day
period, as applicable, Grantee's right to effectuate the sale shall lapse, and
Grantee shall be required to again provide Grantor with a Grantee's Offer
Notice, provided, however, no such conveyance shall be valid until Grantor has
received a certified copy of such conveyance. This Section 1.2 shall not apply
with regard to conveyances of Interests in connection with Grantee's initial
syndication of the Facility (as such term is defined in the Credit Agreement).

         SECTION 1.3 NON-OPERATING, NON-EXPENSE BEARING INTEREST. The Overriding
Royalty Interest conveyed hereby is a non-operating, non-expense-bearing
overriding royalty interest in the nature of an interest in real property, free
of all costs, risks and expenses, except to the extent (i) any such costs and
expenses are properly deductible in calculating the lessor's royalties payable
under the Leases to the United States Minerals Management Service ("MMS") and/or
(ii) any such costs and expenses are paid to unaffiliated third parties in
arms-length transactions (or affiliated entities at market rates) and directly
attributable to marketing, gathering, and delivering the Hydrocarbons to the
initial sales points, provided, however, that in no event shall such costs and
expenses be greater than proportionately equal to the costs and expenses that
are paid or payable by Grantor with respect to its interest in Hydrocarbons
produced from the Subject Interests ("Deductible Costs"). In no event shall
Grantee ever be liable or responsible in any way for the payment of any costs,
expenses, or liabilities attributable to the Subject Interests (or any part
thereof) or incurred in connection with the exploration, production, operations
or delivery of Overriding Royalty Hydrocarbons to the initial sales points
except as provided in the preceding sentence.

         SECTION 1.4 MARKETING OF OVERRIDING ROYALTY HYDROCARBONS. Grantor shall
market or cause to be marketed the Overriding Royalty Hydrocarbons in the same
manner as Grantor markets or causes to be marketed Hydrocarbons attributable to
its Net Revenue Interest, as a reasonable and prudent operator. Grantor shall
pay, or cause to be paid, to Grantee the amount due in respect of the Overriding
Royalty Hydrocarbons that are produced and sold in

                                      -2-
<PAGE>   5

any month no later than 26 days following the month in which the revenues
attributable to the sale of such Overriding Royalty Hydrocarbons are received by
Grantor.

         SECTION 1.5 CERTAIN LIMITATIONS. Grantee shall look solely to the
Overriding Royalty Hydrocarbons for satisfaction and discharge of the Overriding
Royalty Interest, and Grantor shall not be personally liable for the payment and
discharge thereof.

         SECTION 1.6 ROYALTIES; TAXES. The Overriding Royalty Hydrocarbons shall
be calculated as two percent (2%) of Grantor's Net Revenue Interests in the
Leases, with the result that the Overriding Royalty Hydrocarbons shall be
determined net of all Hydrocarbons allocable or otherwise attributable to all
royalties, overriding royalties (other than the Overriding Royalty Interest),
and other burdens on production allocable or otherwise attributable to the
Subject Interests that are reflected of record as of the Effective Time. Grantor
shall be responsible for the timely payment of all such royalties, overriding
royalties, and other burdens on production, and Grantor shall defend, indemnify,
and hold Grantee harmless from and against any loss or claim with respect to any
such royalties, overriding royalties, or other burdens on production or any
claim by the owners or holders of such royalties, overriding royalties, or other
burdens on production by, through or under Grantor, but not otherwise. Grantee
shall bear and pay all Taxes, income and franchise taxes attributable to the
Overriding Royalty Interest and the Overriding Royalty Hydrocarbons or
attributable to Grantee.

         SECTION 1.7 TITLE. Grantor warrants and represents that the Leases are
valid and subsisting oil and gas leases covering the lands or waterbottoms
described in Exhibit A; subject to the Leases and Permitted Encumbrances,
Grantor's ownership of the Subject Interests entitles Grantor to a share of all
Hydrocarbons produced from or attributable to each Lease, and of the proceeds of
such production, after giving effect to and/or deducting all applicable
royalties, overriding royalties, and other burdens or payments out of production
(except the Overriding Royalty Interest), which is not less than the Net Revenue
Interest applicable to the relevant Lease, as set forth in Exhibit A associated
therewith. Grantor hereby binds Grantor and Grantor's legal representatives,
successors, and assigns to warrant and forever defend all and singular title to
the Overriding Royalty Interest and the Overriding Royalty Hydrocarbons unto
Grantee, its successors and assigns, against every person whomsoever lawfully
claiming or to claim the same or any part thereof by, through or under Grantor,
but not otherwise; provided however, the foregoing warranty shall not be
breached in any manner by the existence of the Permitted Encumbrances.

         SECTION 1.8 MORTGAGE OR ASSIGNMENT BY GRANTOR. Except for Permitted
Encumbrances which do not create a lien to secure an obligation for borrowed
money, Grantor shall not mortgage, pledge, or hypothecate the Overriding Royalty
Interest or create or allow to remain thereon any lien or security interest on
any Overriding Royalty Hydrocarbons produced therefrom. Any purported mortgage,
pledge, hypothecation, lien, security interest, assignment, sale, conveyance, or
other transfer in contravention of the foregoing terms shall be null and void.

         SECTION 1.9 POOLING OR UNITIZATION. This Conveyance is subject to all
applicable valid pooling or unitization orders, declarations or agreements
affecting any of the Leases or any part thereof, currently or in the future.
Further, in the event that the owners of the Leases, or the applicable
regulatory authorities, shall hereafter at any time or times create, amend,
terminate or declare a pool or unit for the development or production of Oil
and/or Gas

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<PAGE>   6

that includes all or any part of any of the Leases, then in each such event such
pooling or unitization shall be binding upon and effective with regard to the
Overriding Royalty Interest insofar as it applies to the Leases included in such
pool or unit, without the necessity of Grantee's further consent to or approval
of such pool or unit.

         SECTION 1.10 OPERATIONS. Grantor is under no obligation or duty,
insofar as Grantee is concerned, to pay any delay rentals or minimum royalties
becoming due under any of the Leases or otherwise to maintain any of the Leases
in force or effect by extending same or by operations thereon or production of
Oil, Gas, or other minerals, in any quantity therefrom, and the payment of any
such delay rentals, minimum royalties, taking of extensions or conduct or
cessation of operations or production of Oil, Gas, or other minerals under the
Leases shall be, as between the parties, at the sole discretion of Grantor.
Furthermore, this Conveyance shall not give rise to or create any obligation for
Grantor to obtain Grantee's consent or joinder or comply with any demand of
Grantee, with respect to the maintenance, operation (e.g. the decision to drill,
complete, rework or abandon wells), or abandonment of any platform or other
exploration, production, handling or treating facility, or the Leases, and the
execution of contracts related thereto.

         SECTION 1.11 SCOPE OF THE OVERRIDING ROYALTY INTEREST. The Overriding
Royalty Interest shall not apply to Hydrocarbons lost, flared, vented or used in
support of producing, handling, transporting and processing Hydrocarbons derived
from or attributable to the Leases. The Overriding Royalty Interest shall not
apply to any Hydrocarbons attributable to Grantor's Net Revenue Interest that
are subject to a right of recoupment, forfeiture or relinquishment under the
applicable joint operating agreements; provided, however, the Overriding Royalty
Interest shall apply to any such Hydrocarbons if and when the Hydrocarbons are
no longer subject to such right of recoupment, forfeiture or relinquishment.

         SECTION 1.12 SETTLEMENT. Grantee shall participate proportionately in
any in-kind or cash settlements received by Grantor for underproduction of
Hydrocarbons attributable to the Overriding Royalty Interest. Likewise, Grantee
shall have the obligation to participate in or reimburse Grantor as to Grantee's
proportionate share of any in-kind or cash settlements made or paid by Grantor
for overproduction of Hydrocarbons attributable to the Overriding Royalty
Interest.

         SECTION 1.13 PRUDENT STANDARD. Grantor (subject to the terms and
provisions of any applicable operating agreements and subject to the other
provisions of this Conveyance and the Credit Agreement) shall take any and all
actions which a reasonably prudent non-operator would deem necessary or
advisable in the management, operation and control of the Subject Interests,
including, without limitation, the plugging and abandonment of any Hydrocarbon
well located on the Leases in accordance with good oil field practices without
regard to the existence of the Overriding Royalty Interest or any other royalty,
overriding royalty, or other interest created after the Effective Time.

         SECTION 1.14 ROYALTY RELIEF. To the extent any of the Leases are
entitled to royalty relief pursuant to the regulations of the MMS, Grantee as
the owner of the Overriding Royalty Interest shall be entitled to two percent
(2%) of such royalty relief that is attributable to Grantor's Net Revenue
Interest shown on Exhibit A.

                                      -4-
<PAGE>   7

         SECTION 1.15 RESTRICTIONS ON SUBSEQUENTLY CREATED INTERESTS. To the
extent required by the express terms and provisions of any of the Permitted
Encumbrances identified in Exhibit B to this Conveyance, Grantor and Grantee
acknowledge and agree that this Conveyance is inferior to and is made expressly
subject to such Permitted Encumbrances, and Grantor acknowledges and agrees that
it shall indemnify and hold all of the parties to such Permitted Encumbrances,
other than itself, harmless from any and all claims and demands for payment that
may be asserted by Grantee as the owner of the Overriding Royalty Interest.

                                   ARTICLE 2
                                   DEFINITIONS

         As used herein and in the exhibits hereto, the following terms shall
have the respective meanings ascribed to them below:

         "Central Time" means Central Standard Time or Central Daylight Savings
Time in effect on the date in question.

         "Business Day" shall mean any day other than a day on which commercial
banks are authorized or required to close in New York.

         "Conveyance" shall have the meaning given to such term in the preamble
hereof.

         "Credit Agreement" shall have the meaning given to such term in the
preamble hereof.

         "Deductible Costs" shall have the meaning given to such term in Section
1.3 hereof.

         "Effective Time" means 7:00 a.m., Central Time, on June 29, 2001.

         "Gas" means natural gas and other gaseous hydrocarbons.

         "Grantee" shall have the meaning given such term in the preamble
hereof.

         "Grantor" shall have the meaning given such term in the preamble
hereof.

         "Grantor's Offer Notice" and "Grantee's Offer Notice" shall have the
meaning given such terms in Section 1.2 hereof.

         "Gross Working Interest" means, for each Lease or group of Leases, the
interest identified as "Working Interest" on Exhibit A.

         "Hydrocarbons" means Oil and Gas.

         "Interest" shall have the meaning given such term in Section 1.2
hereof.

         "Lease" means each oil and gas lease described, referred to, or
identified in Exhibit A, insofar and only insofar as to the areas and/or depths
specified in Exhibit A, together with any renewal or extension of such lease (as
to all or any part or portion thereof), and any replacement lease taken upon or
in anticipation of expiration or termination of such lease (if executed and
delivered during the term of or within one year after expiration of the
predecessor lease), insofar

                                      -5-
<PAGE>   8

only as any such replacement lease covers areas and/or depths specified in
Exhibit A as to the original lease; and "Leases" means all such leases, insofar
only as such leases cover such areas and/or depths, and all such renewals and
extensions and replacement leases.

         "Legal Requirement" means any requirement imposed pursuant to any
statute, rule, regulation, order, permit or license of or Lease from any
applicable governmental body or by any applicable court order.

         "MMS" shall have the meaning given such term in Section 1.3 hereof.

         "Net Revenue Interest" means, for each Lease or group of Leases, the
interest identified as "Net Revenue Interest" on Exhibit A, as such interest may
be decreased pursuant to provisions of the applicable joint operating agreement.

         "Oil" means crude oil, condensate and other liquid hydrocarbons.

         "Overriding Royalty Hydrocarbons" shall mean the Hydrocarbons conveyed
to Grantee pursuant to Section 1.1 hereof.

         "Overriding Royalty Interest" shall have the meaning given such term in
Section 1.1 hereof.

         "Overriding Royalty Percentage" means, with respect to each Lease or
group of Leases, 2.00000% of the Net Revenue Interest.

         "Permitted Encumbrance" means the following:

         (a) the agreements, contracts and other documents described in Exhibit
B (to the extent the same are valid and enforceable and burden the Subject
Interests), and any instrument executed subsequent to the date of this
Conveyance pursuant to the express provisions of the applicable joint operating
agreements including, without limitation, the non-consent provisions and the
rights of recoupment, forfeiture or relinquishment provisions, as set forth in
the applicable joint operating agreements and the provisions thereof relative to
subsequently created interests which affect the Subject Interests;

         (b) division orders and sales contracts;

         (c) liens for taxes or assessments not yet delinquent;

         (d) materialman's, mechanic's, repairman's, employee's, contractor's,
operator's, and other similar liens or charges arising in the ordinary course of
business, to the extent the same secure amounts not yet due and payable or that
are being contested in good faith by appropriate proceedings diligently
conducted;

         (e) easements, rights-of-way, servitudes, permits, surface leases, and
other rights in respect of surface operations, to the extent the same do not
materially interfere with operations on, or the operation, value, or use of, any
Subject Interest; and

                                      -6-
<PAGE>   9

         (f) other valid and enforceable liens, charges, encumbrances,
contracts, agreements, obligations, defects, and irregularities affecting the
Subject Interests which, taken in the aggregate: (i) do not materially interfere
with operations on, or the operation, value, or use of, any Lease or any Subject
Interest; (ii) do not prevent Grantor from receiving any proceeds of production
from any Lease or Grantee from receiving proceeds of production attributable to
the Overriding Royalty Hydrocarbons from any Lease; and (iii) do not reduce
Grantor's net revenue interest in Hydrocarbons produced from any Lease to less
than the Net Revenue Interest applicable to the relevant Lease, other than as
the result of Grantor's election not to consent in proposed operations.

         "Property" means any Subject Interest or group of Subject Interests
identified on Exhibit A.

         "Repurchase Option" shall have the meaning given such term in Section
1.2 hereof.

         "Subject Interests" or "Subject Interest" means the respective Gross
Working Interests and Net Revenue Interests of Grantor in and to the Leases, and
all lands now or hereafter pooled, communitized, or unitized therewith, even
though Grantor's interest be incorrectly or incompletely described in Exhibit A,
all as the same shall be enlarged by the discharge of any burdens, by the
reversion of any interest, or by the removal of any charges or encumbrances to
which any of the same may be subject, and any and all renewals and extensions of
any of the same.

         "Taxes" means all ad valorem, property, occupation, gathering, pipeline
regulating, windfall profit, severance, gross production, Btu, energy, excise
and other taxes and governmental charges and assessments imposed on the Subject
Interests or the Overriding Royalty Interest, including the Overriding Royalty
Hydrocarbons, other than income taxes and franchise taxes.

                                   ARTICLE 3
                                  MISCELLANEOUS

         SECTION 3.1 GOVERNING LAW. THIS CONVEYANCE AS TO EACH LEASE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH
THE PROPERTY DESCRIBED IN THE LEASE IS SITUATED IN OR IN FEDERAL WATERS ADJACENT
THERETO, EXCLUDING ANY CONFLICTS OF LAW RULE OR PRINCIPLE THAT MIGHT REFER
CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF ANOTHER JURISDICTION, EXCEPT TO
THE EXTENT THE LAWS OF ANY OTHER JURISDICTION ARE MANDATORILY APPLICABLE AND
EXCEPT THE PARTIES HERETO HAVE ELECTED TO HAVE THIS CONVEYANCE FOR USURY LAW
PURPOSES GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. GRANTOR'S OBLIGATIONS
HEREUNDER WITH RESPECT TO THE OVERRIDING ROYALTY INTEREST ARE SUBJECT TO ALL
APPLICABLE LEGAL REQUIREMENTS.

                                      -7-
<PAGE>   10

         SECTION 3.2 SUCCESSORS AND ASSIGNS. The provisions and conditions
contained in this Conveyance shall run with the land and the respective
interests of Grantor and Grantee and shall be binding upon and inure to the
benefit of Grantor and Grantee and their respective successors and assigns. All
references herein to either Grantor or Grantee shall include their respective
successors and assigns.

         SECTION 3.3 MULTIPLE ORIGINALS. This Conveyance may be executed in
multiple originals all of which shall constitute one and the same Conveyance.

         SECTION 3.4 PERPETUITIES. It is not the intent of Grantor or Grantee
that any provision herein violate any applicable law regarding the rule against
perpetuities, the suspension of the absolute power of alienation, or other rules
regarding the vesting or duration of estates, and this Conveyance shall be
construed as not violating such rule to the extent the same can be so construed
consistent with the intent of the parties. In the event, however, that any
provision hereof is determined to violate any such rule, then such provision
shall nevertheless be effective for the maximum period (but not longer than the
maximum period) permitted by such rule that will result in no violation. To the
extent the maximum period is permitted to be determined by reference to "lives
in being," Grantor and Grantee agree that "lives in being" shall refer to
lifetime of the last to die of the living lineal descendants of the late Joseph
P. Kennedy (father of the late President of the United States of America).

         SECTION 3.5 PARTIAL INVALIDITY. Except as otherwise expressly stated
herein, in the event any provision contained in this Conveyance shall for any
reason be held invalid, illegal or unenforceable by a court or regulatory agency
of competent jurisdiction, such invalidity, illegality or unenforceability shall
not affect any of the remaining provisions of this Conveyance which shall remain
in full force and effect.

         SECTION 3.6 NOTICES. Notices required or otherwise given pursuant to or
in connection with this Conveyance shall be in writing and addressed to the
addresses set forth in the Credit Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                      -8-
<PAGE>   11

         EXECUTED and effective as of the Effective Time.

WITNESSES:                                 GRANTOR:

 /s/ Dianna J. Rosses                      CALLON PETROLEUM OPERATING
--------------------------------------     COMPANY
Printed Name:  Dianna J. Rosses
--------------------------------------

                                           By: /s/ John S. Weatherly
                                              ----------------------------------
 /s/ Brian R. Howard                          John S. Weatherly
--------------------------------------        Senior Vice President and
Printed Name: /s/ Brian R. Howard             Chief Financial Officer
              ------------------------

WITNESSES:                                 GRANTEE:

 /s/ Dianna J. Rosses                      DUKE CAPITAL PARTNERS, LLC
--------------------------------------
Printed Name:  Dianna J. Rosses
              ------------------------
                                           By: /s/ F. T. Webster
                                              ----------------------------------
 /s/ Brian R. Howard                          F.T. Webster
--------------------------------------        Executive Vice President
Printed Name: /s/ Brian R. Howard
              ------------------------

          [Signature Page to Conveyence of Overriding Royalty Interest]
                                       S-1

<PAGE>   12

THE STATE OF TEXAS      )
                        )
COUNTY  OF  HARRIS      )

                                      TEXAS

         THIS INSTRUMENT was acknowledged before me on this 29 day of June,
2001, by John S. Weatherly, Senior Vice President and Chief Financial Officer of
Callon Petroleum Operating Company, a Delaware corporation, who is duly
authorized to execute the foregoing on behalf of said corporation.

                                    LOUISIANA

         On this 29th day of June, 2001, before me appeared John S. Weatherly,
to me personally known, who, being by me duly sworn did say that he is the
Senior Vice President and Chief Financial Officer of Callon Petroleum Operating
Company, a Delaware corporation, and that the seal affixed to said instrument is
the corporate seal of said corporation by authority of its Board of Directors
and that he acknowledged the instrument to be the free act and deed of the
corporation.

                                          /s/ Valerie W. Vaclavik
                                         ---------------------------------
                                         Notary Public in and for the
                                         State of Texas

          [Signature Page to Conveyence of Overriding Royalty Interest]
                                       S-2

<PAGE>   13

THE STATE OF TEXAS        )
                          )
COUNTY  OF  HARRIS        )

                                      TEXAS

         THIS INSTRUMENT was acknowledged before me on this 29th day of June,
2001, by F.T. Webster, Executive Vice President of Duke Capital Partners, LLC, a
Delaware limited liability company, who is duly authorized to execute the
foregoing on behalf of the said limited liability company.

                                    LOUISIANA

         On this 29th day of June, 2001, before me appeared F.T. Webster, to me
personally known, who, being by me duly sworn did say that he is the Executive
Vice President of Duke Capital Partners, LLC, a Delaware limited liability
company, and that the seal affixed to said instrument is the corporate seal of
said limited liability company by authority of its Board of Directors and that
he acknowledged the instrument to be the free act and deed of the limited
liability company.

                                          /s/ Valerie W. Vaclavik
                                        ---------------------------------
                                        Notary Public in and for the
                                        State of Texas

          [Signature Page to Conveyence of Overriding Royalty Interest]
                                       S-3

<PAGE>   14

                                    EXHIBIT A
                                     TO THE
                    CONVEYANCE OF OVERRIDING ROYALTY INTEREST

                                PROPERTY EXHIBITS

MEDUSA PROJECT

OCS-G 16614

         Dated:                    June 1, 1996

         Lessor:                   United States of America

         Lessee:                   Callon Petroleum Operating Company, et al.

         Grantor's
         Working Interest:         15.00000%

         Grantor's
         Net Revenue Interest:     13.12500%

         Description: The above referenced oil and gas lease covering Block 538,
                  Mississippi Canyon, OCS Official Protraction Diagram, NH16-10,
                  INSOFAR AND ONLY INSOFAR: (i) as to those depths from the
                  surface to a depth limited to 100 feet below the stratigraphic
                  equivalent of the T4B productive interval located between
                  14,172'-14,250' MD (13,318'-13,382' TVD) in the Mississippi
                  Canyon 582 OCS-G 16623 #1 well on the Array Induction-Dipole
                  Sonic log dated 9/27/99, and (ii) as to the following portion
                  of said block: Starting at the Southeast corner of Mississippi
                  Canyon Block 538, proceed in a northerly direction along the
                  block boundary 11,200 feet; thence in a westerly direction
                  parallel to the north block boundary of Block 538 a distance
                  of 13,300 feet; thence in a southerly direction parallel with
                  the western boundary of Block 538 a distance of 5,100 feet;
                  thence turning 150.75 degrees East a distance of 7,000 feet to
                  the South boundary of Block 538, then easterly along the south
                  boundary of Block 538 a distance of 9,700 feet to the point of
                  beginning.

                                  Exhibit A-1
<PAGE>   15

                                    EXHIBIT A
                                     TO THE
                    CONVEYANCE OF OVERRIDING ROYALTY INTEREST

                                PROPERTY EXHIBITS

MEDUSA PROJECT

OCS-G 16623

         Dated:                  June 1, 1996

         Lessor:                 United States of America

         Lessee:                 Callon Petroleum Operating Company, et al.

         Grantor's
         Working Interest:       15.00000%

         Grantor's
         Net Revenue Interest:   13.12500%

         Description: The above referenced oil and gas lease covering Block 582,
                  Mississippi Canyon, OCS Official Protraction Diagram, NH16-10,
                  INSOFAR AND ONLY INSOFAR: (i) as to those depths from the
                  surface to a depth limited to 100 feet below the stratigraphic
                  equivalent of the T4B productive interval located between
                  14,172'-14,250' MD (13,318'-13,382' TVD) in the Mississippi
                  Canyon 582 OCS-G 16623 #1 well on the Array Induction-Dipole
                  Sonic log dated 9/27/99, and (ii) as to the following portion
                  of said block: Starting at the Northeast corner of Mississippi
                  Canyon Block 582, proceed in a westerly direction along the
                  north boundary of Block 582 a distance of 9,700 feet; thence
                  turning 60.75 degrees in a southerly direction a distance of
                  13,100 feet; thence in an easterly direction parallel to the
                  south boundary of Block 582 a distance of 3,500 feet to the
                  East boundary; thence in a northerly direction along the
                  eastern boundary of Block 582, 11,400 feet to the point of
                  beginning.

                                  Exhibit A-2
<PAGE>   16

                                    EXHIBIT A
                                     TO THE
                    CONVEYANCE OF OVERRIDING ROYALTY INTEREST

                                PROPERTY EXHIBITS

ENTRADA PROJECT

OCS-G 20797

         Dated:                     January 1, 1999
         Lessor:                    United States of America
         Lessee:                    Callon Petroleum Operating Company, et al.
         Grantor's
         Working Interest:          20.00000%
         Grantor's
         Net Revenue Interest:      17.50000%

         Description: The above referenced oil and gas lease covering Block 782,
                  Garden Banks, OCS Official Protraction Diagram, NG15-2,
                  INSOFAR AND ONLY INSOFAR: (i) as to those depths from the
                  surface to a depth limited to 100 feet below the stratigraphic
                  equivalent of the 5800 ms productive interval located between
                  19,875'-20,262' MD (19,864'-20,254' TVD) in the Garden Banks
                  782 OCS-G 20797 #2 ST1 well on the composite DGR-EWR logs, and
                  (ii) as to all of said Block 782, Garden Banks, LESS AND
                  EXCEPT the Northeast Quarter (NE/4).

OCS-G 22336

         Dated:                     October 1, 2000
         Lessor:                    United States of America
         Lessee:                    Callon Petroleum Operating Company, et al.
         Grantor's
         Working Interest:          20.00000%

         Grantor's
         Net Revenue Interest:      17.50000%

         Description: The above referenced oil and gas lease covering Block 738,
                  Garden Banks, OCS Official Protraction Diagram, NG15-02,
                  INSOFAR AND ONLY INSOFAR: (i) as to those depths from the
                  surface to a depth limited to 100 feet below the stratigraphic
                  equivalent of the 5800 ms productive interval located between
                  19,875'-20,262' MD (19,864'-20,254' TVD) in the Garden Banks
                  782 OCS-G 20797 #2 ST1 well on the composite DGR-EWR logs, and
                  (ii) as to the Southwest Quarter (SW/4) of said Block 738,
                  Garden Banks.

                                   Exhibit A-3
<PAGE>   17

                                    EXHIBIT A
                                     TO THE
                    CONVEYANCE OF OVERRIDING ROYALTY INTEREST

                                PROPERTY EXHIBITS

HABANERO PROJECT

OCS-G 15879

         Dated:                     February 1, 1996

         Lessor:                    United States of America

         Lessee:                    Callon Petroleum Operating Company, et al.

         Grantor's
         Working Interest:          11.25000%

         Grantor's
         Net Revenue Interest:      9.84375%

         Description: The above referenced oil and gas lease covering Block 341,
                  Garden Banks, OCS Official Protraction Diagram, NG15-02,
                  INSOFAR AND ONLY INSOFAR: (i) as to those depths from the
                  surface to a depth limited to 100 feet below the stratigraphic
                  equivalent of the Hab 55 productive interval located between
                  20,172'-20,248' MD (19,413'-19,475' TVD) in the Garden Banks
                  341 OCS-G 15879 #1 well on the Array Induction-Long Spaced
                  Sonic log dated 1/29/99, and (ii) as to the following portion
                  of said block: Starting from the Southeast corner of Garden
                  Banks Block 341, proceed in a northerly direction along the
                  east boundary of Block 341 a distance of 2,200 feet to the
                  point of beginning; thence in a westerly direction parallel to
                  the south boundary of Block 341 a distance of 7,300 feet;
                  thence in a northerly direction parallel to the east boundary
                  of Block 341 a distance of 8,300 feet; thence in an easterly
                  direction parallel to the southern boundary of Block 341 a
                  distance of 7,300 feet; thence in a southerly direction along
                  the east boundary of Block 341 a distance of 8,300 feet to the
                  point of beginning.

                                  Exhibit A-4
<PAGE>   18

                                    EXHIBIT A
                                     TO THE
                    CONVEYANCE OF OVERRIDING ROYALTY INTEREST

                                PROPERTY EXHIBITS

BOOMSLANG

OCS-G 18186

         Dated:                     August 1, 1997

         Lessor:                    United States of America

         Lessee:                    Callon Petroleum Operating Company, et al.

         Grantor's
         Working Interest:          55.00000%

         Grantor's
         Net Revenue Interest:      45.83330%

         Description: The above referenced oil and gas lease covering Block 994,
                  Ewing Bank, OCS Official Protraction Diagram, NH15-12, INSOFAR
                  AND ONLY INSOFAR: (i) as to those depths from the surface to a
                  depth limited to 100 feet below the stratigraphic equivalent
                  of the Bul 1 productive interval located between
                  12,472'-12,884' MD (11,435'-11,780' TVD) in Ewing Bank 994
                  OCS-G 18186 #1 well on the LWD logs, and (ii) as to the
                  following portion of said block: Starting at the Southeast
                  corner of Ewing Bank Block 994, proceed in a northerly
                  direction along the east boundary of Block 994 a distance of
                  12,500 feet; thence in a westerly direction parallel to the
                  north boundary of Block 994 a distance of 9,000 feet; thence
                  in a southerly direction parallel to the west boundary of
                  Block 994 a distance of 12,500 feet; thence in an easterly
                  direction along the south boundary of Block 994 a distance of
                  9,000 feet to the point of beginning.

                                  Exhibit A-5
<PAGE>   19

                                   EXHIBIT "B"
                                     TO THE
          CONVEYANCE OF OVERRIDING ROYALTY INTEREST DATED JUNE 29, 2001

                             PERMITTED ENCUMBRANCES

Corporate Mortgage:

                  Act of Amended, Restated and Consolidated Mortgage, Assignment
                  of Production, Security Agreement and Fixture Filing and
                  Financing Statement Dated effective as of October 30, 2000
                  from Callon Petroleum Operating Company, Mortgagor to First
                  Union National Bank, as Administrative Agent, Mortgagee filed
                  in Plaquemines Parish, La, MOB 309, Folio 1072; Terrebonne
                  Parish, La. #1083092, Mtg. Book 1323; Cameron Parish, La
                  #267356, Mtg. Book 255; Iberia Parish, La, MOB 816, Entry No.
                  00-1351; St. Mary Parish, La, #242,411, MOB 856, Folio 180;
                  Minerals Management Service, OCS-G No. 16614, 16623, 18186,
                  15879.

                  UCC Financing Statement relating to the security agreement
                  cited above, filed in Plaquemines Parish, La #38-00-1625 and
                  Delaware Secretary of State #0079363.

                  UCC-1 Financing Statement (Security Agreement) between Callon
                  Petroleum Operating Company, Debtor, and First Union National
                  Bank as Administrative Agent, Secured Party, filed in
                  Plaquemines Parish, La #38-00-1692 and Delaware Secretary of
                  State #0080096.

                  UCC-3 Financing Statement (Assignment) Callon Petroleum
                  Operating Company from the Chase Manhattan Bank to First Union
                  National Bank, as Administrative Agent filed in Plaquemines
                  Parish, La #38-00-1699 and #38-00-1698 and Terrebonne Parish,
                  La #55-1083750.

                  Act of Supplement and Amendment to Act of Amended, Restated
                  and Consolidated Mortgage, Assignment of Production, Security
                  Agreement, Fixture Filing and Financing Statement by Callon
                  Petroleum Operating Company to First Union National Bank
                  adding Garden Banks Area, Block 782 and 738 effective June 29,
                  2001 and filed in the following parishes and jurisdictions:
                  Cameron, Iberia, Plaqeumines, St. Mary and Terrebonne Parishes
                  La. And Minerals Management Service.

                  Non-Conforming UCC-3 Amendment between Callon Petroleum
                  Operating Company as Debtor and First Union National Bank, as
                  Administrative Agent, as Secured party, referring to Original
                  Financing Statement No. 38-00-1625, filed November 9, 2000, in
                  Plaquemines Parish, La, amended to add Garden Banks Area,
                  Block 782 and 738.

                                   Exhibit B-1
<PAGE>   20

                                   EXHIBIT "B"
                                     TO THE
          CONVEYANCE OF OVERRIDING ROYALTY INTEREST DATED JUNE 29, 2001

                             PERMITTED ENCUMBRANCES

                  Non-Conforming UCC-3 Partial Release between Callon Petroleum
                  Operating Company as Debtor and First Union National Bank, as
                  Administrative Agent, as Secured party, referring to Original
                  Financing Statement No. 38-00-1625, filed November 9, 2000, in
                  Plaquemines Parish, La, releasing from the Original Financing
                  Statement the following collateral: Garden Banks Area, Block
                  782 and 738.

MEDUSA

Leases:           OCS-G 16623 dated effective June 1, 1996 between the United
                  States of America as Lessor and Callon Petroleum Operating
                  Company et al as Lessees covering All of Block 582 Mississippi
                  Canyon, OCS Official Protraction Diagram, NH 16-10, containing
                  5,760 acres.

                  OCS-G 16614 dated effective June 1, 1996 between the United
                  States of America as Lessor and Callon Petroleum Operating
                  Company et al, as Lessees covering All of Block 538,
                  Mississippi Canyon, OCS Official Protraction Diagram, NH 16-
                  10, containing 5,760 acres.

Joint Operating Agreement:

                  Dated effective February 1, 1999, between Murphy Exploration &
                  Production Company as Operator, Callon Petroleum Operating
                  Company, and British-Borneo Petroleum, Inc., covering
                  Mississippi Canyon Blocks 538, 539, 581 and 582 and all
                  exhibits thereto.

Well Participation Agreement:

                  Dated June 21, 1999 between Murphy Exploration & Production
                  Company, British-Borneo Petroleum, Inc. and Callon Petroleum
                  Operating Company, covering Mississippi Canyon Blocks 538,
                  582, 581, and 539.

Assignment of Record Title:

                  Dated effective October 15, 1999 between Murphy Exploration &
                  Production Company and Callon Petroleum Operating Company, as
                  Assignors and British-Borneo Petroleum, Inc., as Assignee
                  covering Mississippi Canyon Blocks 538, 539, 581, and 582.

                                   Exhibit B-2
<PAGE>   21

                                   EXHIBIT "B"
                                     TO THE
          CONVEYANCE OF OVERRIDING ROYALTY INTEREST DATED JUNE 29, 2001

                             PERMITTED ENCUMBRANCES

HABANERO

Lease:            OCS-G 15879 dated effective February 1, 1996 between the
                  United States of America as Lessor and Shell Offshore, Inc.,
                  as Lessee, covering All of Block 341, Garden Banks, OCS
                  Official Protraction Diagram, NG 15-2, containing 5,760 acres.

Joint Operating Agreement:

                  Dated effective November 1, 1998, between Shell Deepwater
                  Development Inc., Murphy Exploration & Production Company, and
                  Callon Petroleum Operating Company, covering Garden Banks
                  Block 341 and all exhibits thereto.

Exchange of Interest Agreement:

                  Letter dated February 2, 1998 between Shell Deepwater
                  Development, Inc., Murphy Exploration & Production Company and
                  Callon Petroleum Operating Company covering Garden Banks
                  Blocks 341, 253, 297, and 298.

Assignment of Record Title Interest:

                  Dated effective February 1, 1998, Shell Deepwater Development
                  Inc., Assignor to Murphy Exploration & Production Company and
                  Callon Petroleum Operating Company as Assignees cover Garden
                  Banks Block 341.

Reserve Commitment Agreement:

                  Dated March 20, 1997 between Garden Banks Gas Pipeline, LLC
                  and Shell Offshore, Inc., covering Garden Banks Block 341.

Auger Production Handling Term Letter:

                  Dated November 12, 1998 between Shell Deepwater Production
                  Inc., Murphy Exploration & Production Company, and Callon
                  Petroleum Operating Company.

                                   Exhibit B-3
<PAGE>   22

                                   EXHIBIT "B"
                                     TO THE
          CONVEYANCE OF OVERRIDING ROYALTY INTEREST DATED JUNE 29, 2001

                             PERMITTED ENCUMBRANCES

ENTRADA

Leases:           OCS-G 20797 dated effective January 1, 1999 between The United
                  States of America as Lessor, and Vastar Resources Inc. as
                  Lessee, covering All of Block 782, Garden Banks, OCS Official
                  Protraction Diagram, NG 15-2, containing 5,760 acres.

                  OCS-G 22336 dated effective October 1, 2000 between The United
                  States of America as Lessor, and Callon Petroleum Operating
                  Company and Vastar Resources, Inc., as Lessees, covering All
                  of Block 738, Garden Banks, OCS Official Protraction Diagram,
                  NG 15-02.

Participation Agreement:

                  Dated effective December 6, 1999 between Vastar Resources,
                  Inc. and Callon Petroleum Operating Company, covering Garden
                  Banks, Blocks 782, 826, 827, 785 and all exhibits thereto
                  including the joint operating agreement.

Assignment of Record Title:

                  Dated March 23, 2000 between Vastar Resources, Inc as Assignor
                  and Callon Petroleum Operating Company as Assignee, covering
                  Garden Banks Block 782.

Letter Agreement:

                  Dated May 11, 2000 between Vastar Resources, Inc., and Callon
                  Petroleum Operating Company. Amendment to Participation
                  Agreement dated December 6, 1999 to add Garden Banks 738 to
                  Exhibits "E" and "F".

BOOMSLANG

Lease:            OCS-G 18186 dated effective August 1, 1997 between the United
                  States of America as Lessor, and Callon Petroleum Operating
                  Company, et al as Lessees, covering All of Block 994, Ewing
                  Bank, OCS Official Protraction Diagram, NH 15-12, containing
                  5,760 acres.

                                   Exhibit B-4
<PAGE>   23

                                   EXHIBIT "B"
                                     TO THE
          CONVEYANCE OF OVERRIDING ROYALTY INTEREST DATED JUNE 29, 2001

                             PERMITTED ENCUMBRANCES

Operating Agreement:

                  Dated effective August 1, 1997 between Murphy Exploration &
                  Production Company, as Operator and Callon Petroleum Operating
                  Company, covering Ewing Bank Block 994.

Well Participation Agreement:

                  Dated June 26, 1998 between Murphy Exploration & Production
                  Company, Callon Petroleum Operating Company, and Santos USA
                  Corp., covering Ewing Bank Block 994.

Assignment of Oil and Gas Lease:

                  Dated effective June 1, 1998 between Murphy Exploration &
                  Production Company as Assignor and Callon Petroleum Operating
                  Company, as Assignee, covering Ewing Bank Block 994, (OCS-G
                  18186).

Assignment of Oil and Gas Lease:

                  Dated effective October 1, 1999 between Santos USA Corporation
                  as Assignor and Callon Petroleum Operating Company as
                  Assignee, covering OCS-G 18186, Block 994 Ewing Bank.

Assignment, Bill of Sale and Conveyance:

                  Dated October 1, 1999 between Santos USA Corporation as
                  Assignor and Callon Petroleum Operating Company as Assignee,
                  covering OCS-G 18186 No. 1 Well, Block 994 Ewing Bank.

                                   Exhibit B-5<PAGE>   1
                                                                    EXHIBIT 10.1

                                     FORM OF
                       FIRST AMENDMENT TO CREDIT AGREEMENT
                               AND LIMITED WAIVER

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER (this
"AMENDMENT") is entered into as of July 31, 2001, among WILLIAMS OLP, L.P., a
Delaware limited partnership ("BORROWER"), the undersigned Guarantors
("GUARANTORS"), BANK OF AMERICA, N.A., as Administrative Agent (the
"ADMINISTRATIVE AGENT") for the Lenders under the Credit Agreement hereinafter
referenced, and the Lenders (as defined in the Credit Agreement) party hereto.

         Reference is made to the Credit Agreement dated as of February 6, 2001
(the "CREDIT AGREEMENT") among Borrower, Administrative Agent, Lehman Commercial
Paper, Inc., as Syndication Agent, SunTrust Bank as Documentation Agent, and the
Lenders party thereto. Unless otherwise defined in this Amendment, capitalized
terms used herein shall have the meaning set forth in the Credit Agreement; all
Section and Schedule references herein are to Sections and Schedules in the
Credit Agreement; and all Paragraph references herein are to Paragraphs in this
Amendment.

                                    RECITALS

         A. Borrower has advised the Administrative Agent and the Lenders that
as of March 31, 2001, the Interest Coverage Ratio was 2.3 to 1.0, which is lower
than the 3.0 Interest Coverage Ratio required by SECTION 7.14(a) of the Credit
Agreement. Borrower has advised that this is the result of including, in such
calculation, interest expense with respect to approximately $225,000,000 of
intercompany debt that was repaid with proceeds of the MLP Offering. Therefore,
Borrower has requested that the Administrative Agent and the Lenders agree to
waive such Interest Coverage Ratio default, and to amend the definition of
Interest Coverage Ratio. Borrower also has requested amendments to the Credit
Agreement to allocate a portion of the Revolver Commitment from the Working
Capital/Distribution Subfacility to the Acquisition Subfacility so that the
Acquisition Subfacility Commitment equals $48,000,000 and the Working
Capital/Distribution Subfacility Commitment equals $12,000,000. In addition to
this First Amendment, Borrower also has requested that the Administrative Agent
and the Lenders enter into a Second Amendment to Credit Agreement to increase
the Revolver Commitment from $60,000,000 to an amount up to $85,000,000 by
increasing the Acquisition Subfacility from $48,000,000 to an amount up to
$73,000,000.

         B. Subject to the terms and conditions of this Amendment, the
Administrative Agent and the undersigned Lenders are willing to agree to such
amendments.

         Accordingly, for adequate and sufficient consideration, the parties
hereto agree, as follows:

         PARAGRAPH 1. LIMITED WAIVER. The undersigned Administrative Agent and
Lenders hereby waive the Event of Default under SECTION 7.14(a) of the Credit
Agreement resulting from the Interest Coverage Ratio being less than 3.0 to 1.0
as of the fiscal quarter ending March 31, 2001. Nothing herein shall, or shall
be deemed to, waive the provisions of SECTION 7.14(a) or any other provisions of
the Credit Agreement, except as expressly set forth above with respect to the
Interest Coverage Ratio as of March 31, 2001.

                                             FIRST AMENDMENT TO CREDIT AGREEMENT
                                       1
<PAGE>   2

         PARAGRAPH 2. AMENDMENTS.

         2.1 DEFINITIONS.

         (a) The definition of "ACQUISITION SUBFACILITY COMMITMENT" is amended
in its entirety to read as follows:

                  "ACQUISITION SUBFACILITY COMMITMENT means an amount (subject
                  to reduction or cancellation as herein provided) equal to
                  $48,000,000.00."

         (b) The definition of "INTEREST COVERAGE RATIO" is amended in its
entirety to read as follows:

                  "INTEREST COVERAGE RATIO" means (1) as of June 30, 2001 and as
                  of September 30, 2001 (each, a "DETERMINATION DATE") the ratio
                  of (a) the sum of (i) Consolidated EBITDA for the period from
                  January 1, 2001 through such Determination Date and (ii)
                  Consolidated Lease and Rental Expense during such period to
                  (b) the sum of (i) Consolidated Interest Charges during such
                  period and (ii) Consolidated Lease and Rental Expense during
                  such period, and (2) as of the last day of the fiscal quarter
                  ending on December 31, 2001 and as of the last day of each
                  fiscal quarter thereafter the ratio of (a) the sum of (i)
                  Consolidated EBITDA for the period of the four prior fiscal
                  quarters ending on such date and (ii) Consolidated Lease and
                  Rental Expense during such period to (b) the sum of (i)
                  Consolidated Interest Charges during such period and (ii)
                  Consolidated Lease and Rental Expense during such period. For
                  purposes of calculating the Interest Coverage Ratio,
                  Consolidated Interest Charges for the fiscal quarter ending
                  March 31, 2001 shall be calculated on a pro forma basis based
                  on Consolidated Interest Charges for the period from February
                  6, 2001 through March 31, 2001."

         (c) The definition of "WORKING CAPITAL/DISTRIBUTION SUBFACILITY
COMMITMENT" is amended in its entirety to read as follows:

                  "WORKING CAPITAL/DISTRIBUTION SUBFACILITY COMMITMENT means an
                  amount (subject to reduction or cancellation as herein
                  provided) equal to $12,000,000.00."

         2.2 SCHEDULE 2.01. SCHEDULE 2.01 is hereby deleted in its entirety and
SCHEDULE 2.01 attached hereto is substituted in lieu thereof.

         2.3 EXHIBITS.

         (a) EXHIBIT A-1 is hereby deleted in its entirety and EXHIBIT A-1
attached hereto is substituted in lieu thereof.

         (b) EXHIBIT C-1 is hereby deleted in its entirety and EXHIBIT C-1
attached hereto is substituted in lieu thereof.

                                             FIRST AMENDMENT TO CREDIT AGREEMENT
                                       2
<PAGE>   3

         PARAGRAPH 3. EFFECTIVE DATE. Notwithstanding any contrary provision,
this Amendment is not effective until the date (the "EFFECTIVE DATE") the
Administrative Agent shall have received counterparts of this Amendment,
executed by Borrower, Guarantors and the Required Lenders.

         PARAGRAPH 4. ACKNOWLEDGMENT AND RATIFICATION. As a material inducement
to the Administrative Agent and the Lenders to execute and deliver this
Amendment, Borrower and each Guarantor (a) consent to the agreements in this
Amendment and (b) agree and acknowledge that the execution, delivery, and
performance of this Amendment shall in no way release, diminish, impair, reduce,
or otherwise affect the respective obligations of Borrower or any Guarantor
under the Loan Documents to which it is a party, which Loan Documents shall
remain in full force and effect, and all guaranties and Rights thereunder are
hereby ratified and confirmed.

         PARAGRAPH 5. REPRESENTATIONS. As a material inducement to the
Administrative Agent and the Lenders to execute and deliver this Amendment,
Borrower and each Guarantor represent and warrant to the Administrative Agent
and the Lenders that as of the Effective Date of this Amendment and as of the
date of execution of this Amendment, (a) all representations and warranties in
the Loan Documents are true and correct in all material respects as though made
on the date hereof, except to the extent that any of them speak to a different
specific date, and (b) after taking into account the waiver in Paragraph 1 of
this Amendment, no Default or Event of Default exists.

         PARAGRAPH 6. EXPENSES. Borrower shall pay all reasonable costs, fees,
and expenses paid or incurred by the Administrative Agent incident to this
Amendment, including, without limitation, the fees and expenses of the
Administrative Agent's counsel in connection with the negotiation, preparation,
delivery, and execution of this Amendment and any related documents.

         PARAGRAPH 7. MISCELLANEOUS. This Amendment is a "Loan Document"
referred to in the Credit Agreement. The provisions relating to Loan Documents
in ARTICLE 10 of the Credit Agreement are incorporated in this Amendment by
reference. Unless stated otherwise (a) the singular number includes the plural
and vice versa and words of any gender include each other gender, in each case,
as appropriate, (b) headings and captions may not be construed in interpreting
provisions, (c) this Amendment must be construed, and its performance enforced,
under New York law, (d) if any part of this Amendment is for any reason found to
be unenforceable, all other portions of it nevertheless remain enforceable, and
(e) this Amendment may be executed in any number of counterparts with the same
effect as if all signatories had signed the same document, and all of those
counterparts must be construed together to constitute the same document.

         PARAGRAPH 8. ENTIRE AGREEMENT. THIS AMENDMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THIS AMENDMENT AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

         PARAGRAPH 9. PARTIES. This Amendment binds and inures to the benefit of
Borrower, Guarantors, Administrative Agent, Lenders, and their respective
successors and assigns.

         PARAGRAPH 10. FURTHER ASSURANCES. The parties hereto each agree to
execute from time to time such further documents as may be necessary to
implement the terms of this Agreement.

                                             FIRST AMENDMENT TO CREDIT AGREEMENT
                                       3
<PAGE>   4

         The parties hereto have executed this Amendment in multiple
counterparts to be effective as of the Effective Date.

                     REMAINDER OF PAGE INTENTIONALLY BLANK.
                           SIGNATURE PAGES TO FOLLOW.

                                             FIRST AMENDMENT TO CREDIT AGREEMENT
                                       4
<PAGE>   5

                                       BORROWER:

                                       WILLIAMS OLP, L.P.

                                       By: WILLIAMS GP LLC, its
                                           General Partner

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   6

                                       GUARANTORS:

                                       WILLIAMS NGL, LLC

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

                                       WILLIAMS TERMINALS HOLDING L.P.

                                       By: WILLIAMS NGL, LLC, its
                                           General Partner

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

                                       WILLIAMS PIPELINES HOLDINGS L.P.

                                       By: WILLIAMS NGL, LLC, its
                                           General Partner

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

                                       WILLIAMS AMMONIA PIPELINE L.P.

                                       By: WILLIAMS NGL, LLC, its
                                           General Partner

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   7

                                       BANK OF AMERICA, n.a., as Administrative
                                       Agent and as a Lender

                                       By:
                                          --------------------------------------
                                          Claire M. Liu
                                          Managing Director

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   8

                                       LEHMAN COMMERCIAL PAPER, INC.

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   9

                                       SUNTRUST BANK

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   10

                                       ABN AMRO BANK, N.V.

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

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   11

                                       NATIONAL WESTMINSTER BANK PLC,
                                       NEW YORK BRANCH

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   12

                                       BANK ONE, NA

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   13

                                       BARCLAYS BANK PLC

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   14

                                       BAYERISCHE LANDESBANK GIROZENTRALE,
                                       CAYMAN ISLANDS BRANCH

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

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   15

                                       NATEXIS BANQUES POPULAIRES

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

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   16

                                       UBS AG, STAMFORD BRANCH

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

             [SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT]
<PAGE>   17

                                  SCHEDULE 2.01

                                   COMMITMENTS

<Table>
<Caption>
            LENDER                                      REVOLVING FACILITY                                  TERM LOAN FACILITY
                                                        ------------------                                  ------------------
                                                                         Working Capital/
                                    Acquisition Subfacility          Distribution Subfacility
                                    -----------------------          ------------------------
<S>                                 <C>                              <C>                                    <C>
Bank of America                          $4,800,000.00                     $1,200,000.00                      $ 9,000,000.00

Lehman Commercial Paper, Inc.            $4,800,000.00                     $1,200,000.00                      $ 9,000,000.00

SunTrust Bank                            $5,600,000.00                     $1,400,000.00                      $10,500,000.00

ABN AMRO Bank, N.V.                      $5,600,000.00                     $1,400,000.00                      $10,500,000.00

National Westminster Bank Plc            $5,600,000.00                     $1,400,000.00                      $10,500,000.00

Bank One, NA                             $4,800,000.00                     $1,200,000.00                      $ 9,000,000.00

Barclays Bank Plc                        $4,800,000.00                     $1,200,000.00                      $ 9,000,000.00

Bayerische Landesbank                    $4,800,000.00                     $1,200,000.00                      $ 9,000,000.00
Girozentrale

UBS AG, Stamford Branch                  $4,000,000.00                     $1,000,000.00                      $ 7,500,000.00

Natexis Banques Populaires               $3,200,000.00                     $  800,000.00                      $ 6,000,000.00

            Total:                       $  48,000,000                     $  12,000,000                      $   90,000,000
</Table>

                                                                   SCHEDULE 2.01
<PAGE>   18

                                                                     EXHIBIT A-1

                            FORM OF BORROWING NOTICE

                                                       Date:  ___________, _____

To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of February 6, 2001
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the "AGREEMENT;" the terms defined therein being used herein
as therein defined), among Williams OLP, L.P., a Delaware limited partnership
(the "BORROWER"), the Lenders from time to time party thereto, Bank of America,
N.A., as Administrative Agent, Lehman Commercial Paper, Inc., as Syndication
Agent, and SunTrust Bank, as Documentation Agent.

The undersigned hereby requests (select one):

I.       REVOLVER FACILITY

         A.       Acquisition Subfacility

                  1.       Status Information for the Acquisition Subfacility

                           (a)      Amount of the Acquisition Subfacility:
                                    $48,000,000

                           (b)      Acquisition Subfacility Principal Debt prior
                                    to the Borrowing requested herein:
                                    $____________

                           (c)      Principal amount of Loans under the
                                    Acquisition Subfacility available to be
                                    borrowed: $______________

                  2.       Amount of Borrowing: $___________

                  3.       Requested date of Borrowing: _________________, 200_.

                  4.       Requested Type of Loan and applicable Dollar amount:

                           (a)      Base Rate Loan for
                                    $________________________.

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)      one month for $_______________

                                    (ii)     two months for $_______________

                                    (iii)    three months for $_______________

                                    (iv)     six months for $_______________

                                  Exhibit A-1
                                     Page 1
                            Form of Borrowing Notice
<PAGE>   19

B.     Working Capital/Distribution Subfacility

                1.       Status Information for the Working
                         Capital/Distribution Subfacility

                         (a)      Amount of the Working Capital/Distribution
                                  Subfacility: $12,000,000

                         (b)      Working Capital/Distribution Subfacility
                                  Principal Debt prior to the Borrowing
                                  requested herein: $____________

                         (c)      Principal amount of Loans under the Working
                                  Capital/Distribution Subfacility available
                                  to be borrowed (prior to the following
                                  requested herein) (1(a) minus 1(b)):
                                  $______________

                2.       Amount of Borrowing: $____________

                3.       Requested date of Borrowing: ______________, 200_.

                4.       Requested Type of Loan and applicable Dollar amount:

                         (a)      Base Rate Loan for
                                  $________________________.

                         (b)      Eurodollar Rate Loan with Interest Period
                                  of:

                                  (i)      one month for $_______________

                                  (ii)     two months for $_______________

                                  (iii)    three months for $_______________

                                  (iv)     six months for $_______________

                5.       Purpose of Loan:

                         ___ Working Capital

                         ___ To fund Quarterly Distribution (Section 6.11(c)(ii)
                             of the Agreement)

                6.       If the Loan is for the purpose of funding Quarterly
                         Distribution: Amount remaining undrawn under the
                         Working Capital/Distribution Subfacility after giving
                         effect to the Borrowing herein requested is:
                         $___________ (must be not less than $9,000,000)

II.    Term Loan Facility

                1.       Amount of Borrowing: $___________

                2.       Requested date of Borrowing: _________________, 200_.

                3.       Requested Type of Loan and applicable Dollar amount:

                         (a)      Base Rate Loan for
                                  $________________________.

                                  Exhibit A-1
                                     Page 2
                            Form of Borrowing Notice
<PAGE>   20

                           (b)      Eurodollar Rate Loan with Interest Period
                                    of:

                                    (i)      one month for $_______________

                                    (ii)     two months for $_______________

                                    (iii)    three months for $_______________

                                    (iv)     six months for $_______________

The undersigned hereby certifies that the following statements will be true on
the date of the proposed Borrowing(s) after giving effect thereto and to the
application of the proceeds therefrom:

                  (a) the representations and warranties of the Borrower
contained in ARTICLE V of the Agreement are true and correct as though made on
and as of such date (except such representations and warranties which expressly
refer to an earlier date, which are true and correct as of such earlier date);
and

                  (b) no Default or Event of Default has occurred and is
continuing, or would result from such proposed Borrowing(s).

The Borrowing requested herein complies with SECTIONS 2.01, 2.02 and 2.03 of the
Agreement, as applicable.

                                       WILLIAMS OLP, L.P.

                                       By Williams GP LLC, its
                                          General Partner

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

                                  Exhibit A-1
                                     Page 3
                            Form of Borrowing Notice
<PAGE>   21

                                                                     EXHIBIT C-1

                         FORM OF COMPLIANCE CERTIFICATE
                   (Pursuant to SECTION 6.02 of the Agreement)

         Financial Statement Date:  ___________, ____

To:      Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Credit Agreement, dated as of February 6, 2001
(as amended, restated, extended, supplemented or otherwise modified in writing
from time to time, the "AGREEMENT;" the terms defined therein being used herein
as therein defined), among Williams OLP, L.P., a Delaware limited partnership
(the "BORROWER"), the Lenders from time to time party thereto, Bank of America,
N.A., as Administrative Agent, Lehman Commercial Paper, Inc., as Syndication
Agent, and SunTrust Bank, as Documentation Agent. Capitalized terms used herein
but not defined herein shall have the meaning set forth in the Agreement.

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the ________________________________________ of the Borrower, and
that, as such, he/she is authorized to execute and deliver this Certificate to
the Administrative Agent on the behalf of the Borrower, and that:

[Use following for fiscal year-end financial statements]

1. Attached hereto as SCHEDULE 1 are the year-end unaudited financial statements
required by SECTION 6.01(b) of the Agreement for the fiscal year of the Borrower
ended as of the above date. Such financial statements fairly present the
financial condition, results of operations and cash flows of the Borrower and
its Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

2. Attached hereto as SCHEDULE 2 are the year-end audited financial statements
required by SECTION 6.01(d) of the Agreement for the fiscal year of the MLP
ended as of the above date, together with the report and opinion of an
independent certified public accountant required by such section.

[Use following for fiscal quarter-end financial statements]

1. Attached hereto as SCHEDULE 1 are the unaudited financial statements required
by SECTION 6.01(c) of the Agreement for the fiscal quarter of the Borrower ended
as of the above date. Such financial statements fairly present the financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

2. Attached hereto as SCHEDULE 3 are the unaudited financial statements required
by SECTION 6.01(d) of the Agreement for the fiscal quarter of the MLP ended as
of the above date, together with a certificate of a Responsible Officer of the
MLP stating that such financial statements fairly present the financial
condition, results of operations and cash flows of the MLP and its Subsidiaries
in accordance with GAAP as at such date and for such period, subject only to
normal year-end audit adjustments and the absence of footnotes.

                                   Exhibit C-1
                                     Page 1
                         Form of Compliance Certificate
<PAGE>   22

[Use the following for both fiscal year-end and quarter-end financial
statements]

3. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of the
Borrower during the accounting period covered by the attached financial
statements.

4. A review of the activities of the Borrower during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such fiscal period the Borrower performed and observed all its
Obligations under the Loan Documents, and no Default or Event of Default has
occurred and is continuing except as follows (list of each such Default or Event
of Default and include the information required by SECTION 6.03 of the Credit
Agreement):

[                          ]

5. The covenant analyses and information set forth on SCHEDULE 2 attached hereto
are true and accurate on and as of the date of this Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________, ________.

                                       WILLIAMS OLP, L.P.

                                       By: Williams GP LLC, its
                                           General Partner

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

                                   Exhibit C-1
                                     Page 2
                         Form of Compliance Certificate
<PAGE>   23

                For the Quarter/Year ended ___________________("STATEMENT DATE")

                                   SCHEDULE 2
                          to the Compliance Certificate
                                  ($ in 000's)

<Table>
<S>      <C>                                                                     <C>                <C>
I.       SECTION 2.01(a) - Acquisition Subfacility ($48,000,000)

         A.       Acquisition Subfacility Principal Debt on the first day of
                  the most recently ended fiscal quarter (the "SUBJECT
                  Quarter"):                                                                        $__________

         B.       Borrowings under the Acquisition Subfacility during the
                  Subject Quarter (list each by the date and $ amount of the
                  Borrowing):                                                    Date               $Amount
                                                                                 ----                ------

         C.       Borrowings repaid under the Acquisition Subfacility during
                  the Subject Quarter (list each by the date and $ amount of
                  the repayment):                                                Date               $Amount
                                                                                 ----                ------

         D.       Acquisition Subfacility Principal Debt on the last day of
                  the Subject Quarter:                                                              $__________

         E.       On any day during the Subject Quarter, did the Acquisition
                  Subfacility Principal Debt exceed $48,000,000?
                                                                                                    YES/NO
II.      SECTION 2.01(b) - Working Capital/Distribution Subfacility
         ($12,000,000)

         A.       Working Capital/Distribution Subfacility Principal Debt on
                  the first day of the Subject Quarter:                                             $__________

         B.       Borrowings under the Working Capital/Distribution Subfacility
                  to fund working capital requirements of the Borrower and its
                  Subsidiaries (list each by the date and $ amount of the
                  Borrowing):                                                    Date               $Amount
                                                                                 ----                ------

         C.       Borrowings under the Working Capital/Distribution Subfacility
                  to fund Quarterly Distributions (list each by the date and
                  $ amount of the Borrowing):                                    Date               $Amount
                                                                                 ----                ------

         D.       Borrowings repaid under the Working Capital/Distribution
                  Subfacility (list each by the date and $ amount of the
                  repayment):                                                    Date               $Amount
                                                                                 ----                ------
</Table>

                                   Exhibit C-1
                                     Page 3
                         Form of Compliance Certificate
<PAGE>   24

<Table>
<S>      <C>                                                                     <C>                <C>
         E.       Working Capital/Distribution Subfacility Principal Debt on
                  the last day of the Subject Quarter:                                              $_________

         F.       On any day during the Subject Quarter, did the Working
                  Capital/Distribution Subfacility Principal Debt exceed
                  $12,000,000?                                                                      YES/NO

         G.       On the date of each Borrowing under the Working
                  Capital/Distribution Subfacility (after giving effect to
                  such Borrowing), was the undrawn amount of Working
                  Capital/Distribution Subfacility Commitment $9,000,000 or
                  more?  (SECTION 2.01(b))                                                          YES/NO

III.     SECTION 6.13 - Clean Down Period for Working Capital/Distribution
         Subfacility

         A.       One clean down period of fifteen (15) consecutive days
                  during the twelve (12) month period beginning on the Initial
                  Funding Date, and for a period of fifteen (15) consecutive
                  days each twelve (12) month period thereafter is required.
                  For the current twelve (12) month period, describe the clean
                  down period (period of consecutive days (and dates) during
                  the current twelve (12) month period that the Working
                  Capital/Distribution Subfacility Principal Debt = $0.00):
                                                                                 # of Days          Dates
                                                                                 ---------          -----
IV.      SECTION 7.03 - Indebtedness

         A.       Principal amount of purchase money indebtedness outstanding
                  (SECTION 7.03(c)):                                                                $__________

                  Maximum permitted $5,000,000

         B.       Principal amount of unsecured Indebtedness and Synthetic
                  Leases permitted pursuant to SECTION 7.03(d):

                  1.       Amount of unsecured Indebtedness:                                        $__________

                  2.       Amount of Synthetic Leases:                                              $__________

                  3.       Aggregate amount of unsecured Indebtedness and
                           Synthetic Leases under SECTION 7.03(d) (IV.B.1 +
                           IV.B.2):                                                                 $__________

                  Maximum permitted: $75,000,000.
</Table>

                                   Exhibit C-1
                                     Page 4
                         Form of Compliance Certificate
<PAGE>   25

<Table>
<S>      <C>                                                                                       <C>
         C.       Principal amount of Permitted Affiliated Subordinated Debt
                  outstanding (SECTION 7.03(e)):                                                    $__________

                  Maximum permitted:  $50,000,000

V.       SECTION 7.14(a) - Interest Coverage Ratio.

         A.       Consolidated EBITDA for the relevant period (as specified in
                  the definition of "Interest Coverage Ratio") ending on above
                  date ("SUBJECT PERIOD"):

                  1.       Consolidated Net Income for Subject Period:                              $__________

                  2.       Consolidated Interest Charges for Subject Period:                        $__________

                  3.       Provision for income taxes for Subject Period:                           $__________

                  4.       Depreciation expenses for Subject Period:                                $__________

                  5.       Amortization expenses for intangibles for Subject
                           Period:                                                                  $__________

                  6.       Consolidated EBITDA (prior to pro forma adjustments
                           for Asset Acquisitions pursuant to
                           SECTION 7.14(c)(i)) (Lines V.A.1 + 2 + 3 + 4 + 5):
                                                                                                    $__________
                  7.       Pro forma adjustments to EBITDA for Asset
                           Acquisitions during the Subject Period (SECTION
                           7.14(c)(i)), giving effect to such Asset Acquisitions
                           on a pro forma basis for the Subject Period as if
                           such Asset Acquisitions occurred on the first day of
                           the Subject Period:
                                                                                                    $__________
                  8.       Consolidated EBITDA, including pro forma
                           adjustments for Asset Acquisitions (Lines V.A.6 +
                           V.A.7):                                                                  $__________

         B.       Consolidated Interest Charges for Subject Period:

                  1.       Consolidated Interest Charges for the Subject
                           Period:
                                                                                                    $__________
                  2.       Pro forma adjustment for the Subject Period:
</Table>

                                   Exhibit C-1
                                     Page 5
                         Form of Compliance Certificate
<PAGE>   26

<Table>
<S>      <C>                                                                                       <C>
                                                                                                    $__________
                  3.       Consolidated Interest Charges, including pro forma
                           adjustments (Lines V.B.1 + V.B.2):                                       $__________

         C.       Consolidated Lease and Rental Expense for Subject Period:

                  1.       Consolidated Lease and Rental Expense for the
                           Subject Period:
                                                                                                    $__________
                  2.       Pro forma adjustment for Consolidated Lease and
                           Rental Expense during the Subject Period:

                                                                                                    $__________
                  3.       Consolidated Lease and Rental Expense, including
                           pro forma adjustments (Lines V.C.1 + V.C.2):                             $__________

         D.       Interest Coverage Ratio:

                  1.       Consolidated EBITDA adjusted for Asset Acquisitions
                           (Line V.A.8):                                                            $__________

                  2.       Consolidated Interest Charges adjusted for Asset
                           Acquisitions (Line V.B.3):                                               $__________

3.       Consolidated Lease and Rental Expense, including pro forma
                           adjustments
                           (Line V.C.3):                                                            $__________

                  4.       Interest Coverage Ratio (Line V.D.1 + Line V.D.3)
                           / (Line V.D.2 + Line V.D.3):                                            _____ to 1.0

                  Minimum required: 3.0:1.0

VI.      SECTION 7.14(b) - Leverage Ratio

         A.       Consolidated Total Debt:                                                          $__________

         B.       Permitted Affiliate Subordinated Debt:                                            $__________

         C.       Consolidated Total Debt excluding Permitted Affiliate
                  Subordinated Debt (Line VI.A minus Line VI.B):
                                                                                                    $__________

         D.       Consolidated EBITDA (including pro forma adjustments for
                  Asset Acquisitions) (Line V.A.8 above):
                                                                                                    $__________

         E.       Leverage Ratio (Line VI.C / Line VI.D):
                                                                                                    _____ to 1.0
                  Maximum permitted: 4.0:1.0
</Table>

                                   Exhibit C-1
                                     Page 6
                         Form of Compliance Certificate

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