Document:

<PAGE>   1
                                                                   EXHIBIT 10.73

                       AMENDMENT NO. 5 TO CREDIT AGREEMENT

         AMENDMENT dated as of April 25, 2001 to the Amended and Restated Credit
Agreement dated as of September 8, 1999 (as heretofore amended, the "EXISTING
AGREEMENT") among WILLIAMS COMMUNICATIONS, LLC (formerly known as Williams
Communications, Inc., the "BORROWER"), WILLIAMS COMMUNICATIONS GROUP, INC.
("HOLDINGS"), the LENDERS party thereto (the "LENDERS"), BANK OF AMERICA, N.A.,
as Administrative Agent (the "ADMINISTRATIVE AGENT"), THE CHASE MANHATTAN BANK,
as Syndication Agent ("SYNDICATION AGENT") and SALOMON SMITH BARNEY INC. and
LEHMAN BROTHERS, INC., as Joint Lead Arrangers with respect to the Incremental
Facility referred to in the Restated Agreement (as defined below).

                                   WITNESSETH:

         WHEREAS, the parties hereto desire to amend and restate the Existing
Agreement to include (x) the terms of the Incremental Facility (as defined in
the Restated Agreement) and (y) the Incremental Tranche A Lenders (as defined
below) as parties thereto;

         NOW, THEREFORE, the parties hereto agree as follows:

         SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Existing Agreement
has the meaning assigned to such term in the Existing Agreement. Each reference
to "hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Existing Agreement and each other Loan Document shall, from and
after the Amendment No. 5 Effective Date (as defined below), refer to the
Existing Agreement as amended and restated hereby.

         SECTION 2. Amendment. (a) On and as of the Amendment No. 5 Effective
Date, the Existing Agreement will be automatically amended and restated in its
entirety to read as set forth in Exhibit A hereto (the Existing Agreement as
amended and restated, the "RESTATED AGREEMENT").

         (b) On and after the Amendment No. 5 Effective Date, the Incremental
Tranche A Lenders listed on the signature pages hereto under the heading
"Incremental Lenders" (the "INCREMENTAL LENDERS") will automatically be party

<PAGE>   2

to the Restated Agreement as "Incremental Tranche A Lenders" and "Lenders"
thereunder, and shall have all of the rights, and be subject to all of the
obligations, of a Lender under the Credit Agreement and the other Loan
Documents.

         (c) On and after the Amendment No. 5 Effective Date, the rights and
obligations of the parties hereto shall be governed by the Restated Agreement;
provided the rights and obligations of the parties hereto (other than the
Incremental Lenders) with respect to the period prior to the Amendment No. 5
Effective Date shall continue to be governed by the provisions of the Existing
Agreement.

         (d) This Amendment shall be deemed to be a "Loan Document" under the
Restated Agreement and the transactions contemplated hereby shall constitute
"Transactions" thereunder.

         (e) The Administrative Agent shall promptly notify the Borrower,
Holdings and each Lender (as defined in the Restated Agreement) of the
occurrence of the Amendment No. 5 Effective Date, and such notice shall be
conclusive and binding on all parties hereto.

         SECTION 3. Representations of Borrower and Holdings. Each of the
Borrower and Holdings represents and warrants that (i) each of the
representations and warranties applicable to it as set forth in Article 3 of the
Restated Agreement will be true on and as of the Amendment No. 5 Effective Date
(except in the case of any such representation or warranty that, by its terms
expressly relates only to a specified earlier date, each of which
representations and warranties was true as of such specified earlier date) and
(ii) no Default will have occurred and be continuing on such date.

         SECTION 4. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.

         SECTION 5. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

         SECTION 6. Effectiveness. This Amendment shall become effective on and
as of the date when the following conditions are met (the "AMENDMENT NO. 5
EFFECTIVE DATE"):

                  (a) the Administrative Agent shall have received from each of
         Holdings, the Borrower, the Incremental Lenders and the Required
         Lenders (as defined in the Existing Agreement) a counterpart hereof

                                        2
<PAGE>   3

         signed by such party or facsimile or other written confirmation (in
         form satisfactory to the Administrative Agent) that such party has
         signed a counterpart hereof;

                  (b) the Administrative Agent shall have received from each
         Subsidiary Loan Party an acknowledgment in form and substance
         reasonably satisfactory to the Administrative Agent to the effect that
         the obligations of the Borrower and Holdings under the Restated
         Agreement constitute "Guaranteed Obligations" of such Subsidiary Loan
         Party under the Subsidiary Guarantee;

                  (c) the Administrative Agent shall have received such
         documents and certificates as the Administrative Agent or its counsel
         may reasonably request relating to the organization, existence and good
         standing of each Loan Party, the authorization of the transactions
         contemplated hereby and any other legal matters relating to the Loan
         Parties, the Loan Documents or the transactions contemplated hereby,
         all in form and substance satisfactory to the Administrative Agent and
         its counsel;

                  (d) the Administrative Agent shall have received a
         certificate, dated the Amendment No. 5 Effective Date and signed by the
         President, a Vice President or a Financial Officer of the Borrower,
         confirming compliance with the matters set forth in Section 3 of this
         Amendment;

                  (e) the Administrative Agent shall have received evidence
         satisfactory to it that the Intercreditor Agreement with respect to the
         ADP shall be in full force and effect on the terms in effect
         immediately prior to the effectiveness of this Amendment;

                  (f) the Incremental Lenders, the Administrative Agent and the
         Incremental Facility Arrangers (as defined in the Restated Agreement)
         shall have received all fees and other amounts due and payable on or
         prior to the Amendment No. 5 Effective Date, including, to the extent
         invoiced, reimbursement or payment of all out-of-pocket expenses
         required to be reimbursed or paid by any Loan Party hereunder or under
         any other Loan Document;

                  (g) all consents and approvals required to be obtained from
         any Governmental Authority or other Person necessary, or in the
         discretion of the Incremental Facility Arrangers advisable, in
         connection with the continuing operations of the Borrower and its
         Subsidiaries shall have been obtained and shall be in full force and
         effect;

                                        3
<PAGE>   4

                  (h) the Incremental Lenders shall have received, and shall be
         satisfied with, (i) audited consolidated financial statements of
         Holdings for the fiscal years ended December 31, 1999 and December 31,
         2000 and (ii) satisfactory unaudited interim consolidated financial
         statements of the Borrower and Holdings for each fiscal quarterly
         period ended subsequent to the date of the latest financial statements
         delivered pursuant to clause (i) of this paragraph as to which such
         financial statements are available;

                  (i) the Incremental Lenders shall have received, and shall be
         satisfied with, Holdings and the Borrower's projected annual pro forma
         balance sheets, statements of operations and cash flows for the fiscal
         years 2001 through 2007, in each of the foregoing cases (i) after
         giving effect to Borrowings under the Incremental Facility and the
         Structured Note Financing and (ii) after giving effect to the
         transactions described in clause (i) and, in addition, the sale of all
         of the capital stock or all or substantially all of the assets of
         Solutions;

                  (j) the Administrative Agent shall have received a favorable
         written opinion (addressed to the Agents, the Issuing Banks, the
         Swingline Lenders and the Lenders (as defined in the Restated
         Agreement) and dated the Amendment No. 5 Effective Date) of each of
         Crowe & Dunlevy, counsel for Holdings, the Borrower and each Subsidiary
         Loan Party, substantially in the form of Exhibit B-1 and the Special
         Counsel to Holdings, substantially in the form of Exhibit B-2 and, in
         the case of each such opinion required by this paragraph, covering such
         other matters relating to the Loan Parties, the Loan Documents or the
         transactions contemplated hereby as the Incremental Lenders shall
         reasonably request;

                  (k) there shall be no actions, suits or proceedings by or
         before any arbitrator or Governmental Authority pending against or, to
         the knowledge of Holdings or the Borrower, threatened against or
         affecting Holdings or any Subsidiary (x) as to which there is a
         reasonable possibility of an adverse determination and that, if
         adversely determined, could reasonably be expected, individually or in
         the aggregate, to result in a Material Adverse Effect (other than the
         Disclosed Matters) or (y) that involve any of the Loan Documents or the
         transactions contemplated by this Amendment;

                  (l) since December 31, 2000, there shall have been no Material
         Adverse Change;

                  (m) the Incremental Lenders shall have completed, and shall be
         satisfied with, their financial, legal, tax, environmental, business
         and

                                        4
<PAGE>   5

         accounting due diligence investigations and reviews relating to the
         Borrower;

                  (n) the Administrative Agent shall have received evidence
         reasonably satisfactory to it and the Incremental Facility Arrangers
         that the Borrower shall have received not less than $1,000,000,000 of
         cash Net Proceeds in connection with the consummation of the Structured
         Note Financing;

                  (o) the Administrative Agent shall have received evidence
         reasonably satisfactory to it that the Borrower shall have entered into
         appropriate hedging transactions with respect to the portfolio of
         equity securities investments referred to by the Borrower as the "Tech
         Farm investments" on terms and conditions reasonably satisfactory to
         the Incremental Facility Arrangers and the Administrative Agent; and

                  (p) the Administrative Agent shall have received a solvency
         certificate, in form and substance reasonably satisfactory to the
         Administrative Agent, from the Financial Officer of each of Holdings
         and the Borrower.

                                        5
<PAGE>   6

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.

                                       WILLIAMS COMMUNICATIONS, LLC

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

                                       WILLIAMS COMMUNICATIONS
                                       GROUP, INC.

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

                                       BANK OF AMERICA, N.A.

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

                                       THE CHASE MANHATTAN BANK

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

                                       BANK OF MONTREAL

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

                                        6
<PAGE>   7

                                       THE BANK OF NEW YORK

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

                                       SCOTIABANC INC.

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

                                       ABN AMRO BANK, N.V.

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

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

                                       FLEET NATIONAL BANK

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

                                       CIBC INC.

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

                                        7
<PAGE>   8

                                       CREDIT SUISSE FIRST BOSTON

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

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

                                       DEUTSCHE BANK AG
                                       NEW YORK BRANCH AND/OR
                                       CAYMAN ISLANDS BRANCH

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

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

                                       CREDIT LYONNAIS NEW YORK
                                          BRANCH

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

                                       BANK AUSTRIA CREDITANSTALT
                                       CORPORATE FINANCE, INC.

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

                                        8
<PAGE>   9

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

                                       FIRST UNION NATIONAL BANK

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

                                       IBM CREDIT CORPORATION

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

                                       THE INDUSTRIAL BANK OF JAPAN,
                                       LIMITED, NEW YORK BRANCH

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

                                        9
<PAGE>   10

                                       BANK OF OKLAHOMA N.A.

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

                                       BANK ONE, N.A.

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

                                       KBC BANK, N.V.

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

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

                                       THE FUJI BANK, LIMITED

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

                                       10
<PAGE>   11

                                       INCREMENTAL TRANCHE A LENDERS:

                                       BANK OF AMERICA, N.A.

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

                                       11
<PAGE>   12

                                       THE CHASE MANHATTAN BANK

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

                                       12
<PAGE>   13

                                       LEHMAN COMMERCIAL PAPER INC.

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

                                       13
<PAGE>   14

                                       CITICORP USA, INC.

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

                                       14
<PAGE>   15

                                       MERRILL LYNCH & CO., INC.

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

                                       15
<PAGE>   16
                                                                       EXHIBIT A
================================================================================
                                 $1,500,000,000

                     AMENDED AND RESTATED CREDIT AGREEMENT

                                   dated as of

                                SEPTEMBER 8, 1999

                                      among

                          WILLIAMS COMMUNICATIONS, LLC,
                                   as Borrower

                      WILLIAMS COMMUNICATIONS GROUP, INC.,
                                  as Guarantor

                            THE LENDERS PARTY HERETO,

                             BANK OF AMERICA, N.A.,
                            as Administrative Agent,
                                       and
                            THE CHASE MANHATTAN BANK,
                              as Syndication Agent

                                   ----------

                            SALOMON SMITH BARNEY INC.

                                       and

                             LEHMAN BROTHERS, INC.,
                  as Joint Lead Arrangers and Joint Bookrunners
           with respect to the Incremental Facility referred to herein

                           SALOMON SMITH BARNEY INC.,

                             LEHMAN BROTHERS, INC.,

                                       and

                            MERRILL LYNCH & CO., INC.

                           as Co-Documentation Agents
================================================================================
<PAGE>   17
                                    ARTICLE 1
                                   DEFINITIONS

<TABLE>
<S>                                                                             <C>
SECTION 1.01.  Defined Terms ................................................    1
SECTION 1.02.  Classification of Loans and Borrowings .......................   35
SECTION 1.03.  Terms Generally ..............................................   35
SECTION 1.04.  Accounting Terms; GAAP .......................................   36

                                    ARTICLE 2
                                   THE CREDITS

SECTION 2.01.  Commitments ..................................................   36
SECTION 2.02.  Loans and Borrowings .........................................   37
SECTION 2.03.  Requests for Borrowings ......................................   38
SECTION 2.04.  Swingline Loans ..............................................   39
SECTION 2.05.  Letters of Credit ............................................   40
SECTION 2.06.  Funding of Borrowings ........................................   44
SECTION 2.07.  Interest Elections ...........................................   45
SECTION 2.08.  Termination and Reduction of Commitments .....................   46
SECTION 2.09.  Repayment of Loans; Evidence of Debt .........................   49
SECTION 2.10.  Amortization of Term Loans and Incremental Term Loans ........   50
SECTION 2.11.  Prepayment of Loans ..........................................   53
SECTION 2.12.  Fees .........................................................   55
SECTION 2.13.  Interest .....................................................   56
SECTION 2.14.  Alternate Rate of Interest ...................................   57
SECTION 2.15.  Increased Costs ..............................................   58
SECTION 2.16.  Break Funding Payments .......................................   59
SECTION 2.17.  Taxes ........................................................   59
SECTION 2.18.  Payments Generally; Pro Rata Treatment; Sharing of Set-offs ..   61
SECTION 2.19.  Mitigation Obligations; Replacement of Lenders ...............   63
SECTION 2.20.  Additional Incremental Facilities and Commitments ............   63

                                    ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

SECTION 3.01.  Organization; Powers .........................................   65
SECTION 3.02.  Authorization; Enforceability ................................   65
SECTION 3.03.  Governmental Approvals; No Conflicts .........................   65
SECTION 3.04.  Financial Condition; No Material Adverse Change ..............   66
SECTION 3.05.  Properties ...................................................   67
SECTION 3.06.  Litigation and Environmental Matters .........................   67
SECTION 3.07.  Compliance with Laws and Agreements ..........................   67
SECTION 3.08.  Investment and Holding Company Status ........................   68
SECTION 3.09.  Taxes ........................................................   68
SECTION 3.10.  ERISA ........................................................   68
</TABLE>

                                        2

<PAGE>   18

<TABLE>
<S>                                                                             <C>
SECTION 3.11.  Disclosure .................................................     68
SECTION 3.12.  Subsidiaries ...............................................     68
SECTION 3.13.  Insurance ..................................................     69
SECTION 3.14.  Labor Matters ..............................................     69
SECTION 3.15.  Solvency ...................................................     69
SECTION 3.16.  No Burdensome Restrictions .................................     69
SECTION 3.17.  Representations in Loan Documents True and Correct .........     69

                               ARTICLE 4
                              CONDITIONS

SECTION 4.01.  Effective Date .............................................     70
SECTION 4.02.  Each Credit Event ..........................................     70
SECTION 4.03.  First Incremental Borrowing Date with Respect to
      the Incremental Facility ............................................     70

                               ARTICLE 5
                         AFFIRMATIVE COVENANTS

SECTION 5.01.  Financial Statements and Other Information .................     71
SECTION 5.02.  Notices of Material Events .................................     73
SECTION 5.03.  Existence; Conduct of Business .............................     74
SECTION 5.04.  Payment of Obligations .....................................     74
SECTION 5.05.  Maintenance of Properties ..................................     74
SECTION 5.06.  Insurance ..................................................     74
SECTION 5.07.  Casualty and Condemnation ..................................     74
SECTION 5.08.  Books and Records; Inspection and Audit Rights .............     75
SECTION 5.09.  Compliance with Laws .......................................     75
SECTION 5.10.  Use of Proceeds and Letters of Credit ......................     75
SECTION 5.12.  Information Regarding Collateral ...........................     78
SECTION 5.13.  Additional Subsidiaries ....................................     79
SECTION 5.14.  Further Assurances .........................................     80
SECTION 5.15.  Concentration Accounts .....................................     81
SECTION 5.16.  Dissolution of CNG .........................................     81
SECTION 5.17.  Sale of Solutions and ATL ..................................     81
SECTION 5.18.  Qualifying Issuances .......................................     81

                               ARTICLE 6
                          NEGATIVE COVENANTS

SECTION 6.01.  Indebtedness; Certain Equity Securities ....................     82
SECTION 6.02.  Liens ......................................................     84
SECTION 6.03.  Fundamental Changes ........................................     86
SECTION 6.04.  Investments, Loans, Advances, Guarantees and Acquisitions ..     86
SECTION 6.05.  Asset Sales ................................................     89
SECTION 6.06.  Sale and Leaseback Transactions ............................     90
</TABLE>

                                        3

<PAGE>   19

<TABLE>
<S>                                                                             <C>
SECTION 6.07.  Restricted Payments; Certain Payments of Indebtedness ......      91
SECTION 6.08.  Limitation on Capital Expenditures .........................      92
SECTION 6.09.  Transactions with Affiliates ...............................      92
SECTION 6.10.  Restrictive Agreements .....................................      93
SECTION 6.11.  Fiscal Year ................................................      93
SECTION 6.12.  Change in Business .........................................      93
SECTION 6.13.  Amendment of Material Documents ............................      93
SECTION 6.14.  Designation of Unrestricted Subsidiaries ...................      94
SECTION 6.15.  Total Net Debt to Contributed Capital Ratio ................      94
SECTION 6.16.  Minimum EBITDA .............................................      95
SECTION 6.17.  Total Leverage Ratio .......................................      95
SECTION 6.18.  Senior Leverage Ratio ......................................      95
SECTION 6.19.  Interest Coverage Ratio ....................................      95
SECTION 6.20.  Financial Covenant Non-Compliance Cure .....................      95

                                    ARTICLE 7
                                EVENTS OF DEFAULT

SECTION 7.01.  Events of Default ..........................................      96

                                    ARTICLE 8
                                   THE AGENTS

SECTION 8.01.  Appointment, Powers, Immunities ............................      99
SECTION 8.02.  Reliance by Agents .........................................     100
SECTION 8.03.  Delegation to Sub-Agents ...................................     100
SECTION 8.04.  Resignation of Agents ......................................     100
SECTION 8.05.  Non-reliance on Agents or other Lenders ....................     101
SECTION 8.06.  Syndication Agent, Incremental Facility Arrangers and Co-
      Documentation Agents ................................................     101

                                    ARTICLE 9
                               HOLDINGS GUARANTEE

SECTION 9.01.  The Guarantee ..............................................     101
SECTION 9.02.  Guarantee Unconditional ....................................     102
SECTION 9.03.  Discharge Only Upon Payment in Full; Reinstatement in
      Certain Circumstances ...............................................     102
SECTION 9.04.  Waiver .....................................................     103
SECTION 9.05.  Subrogation ................................................     103
SECTION 9.06.  Stay of Acceleration .......................................     103
SECTION 9.07.  Successors and Assigns .....................................     103
</TABLE>

                                        4

<PAGE>   20

<TABLE>
<CAPTION>
                                   ARTICLE 10
                                  MISCELLANEOUS
<S>                                                                             <C>
SECTION 10.01.  Notices .....................................................   103
SECTION 10.02.  Waivers; Amendments .........................................   104
SECTION 10.03.  Expenses; Indemnity; Damage Waiver ..........................   116
SECTION 10.04.  Successors and Assigns ......................................   117
SECTION 10.05.  Survival ....................................................   110
SECTION 10.06.  Counterparts; Integration; Effectiveness ....................   111
SECTION 10.07.  Severability ................................................   111
SECTION 10.08.  Right of Setoff .............................................   111
SECTION 10.09.  Governing Law; Jurisdiction; Consent to Service of Process ..   112
SECTION 10.10.  WAIVER OF JURY TRIAL ........................................   112
SECTION 10.11.  Headings ....................................................   113
SECTION 10.12.  Confidentiality .............................................   113
SECTION 10.13.  Interest Rate Limitation ....................................   113

SCHEDULE 2.01 - COMMITMENTS
SCHEDULE 3.05 - REAL PROPERTY
SCHEDULE 3.06 - DISCLOSED MATTERS
SCHEDULE 3.12 - SUBSIDIARIES
SCHEDULE 3.13 - INSURANCE
SCHEDULE 6.01 - EXISTING INDEBTEDNESS
SCHEDULE 6.02 - EXISTING LIENS
SCHEDULE 6.04 - EXISTING INVESTMENTS
SCHEDULE 6.09 - EXISTING AFFILIATE AGREEMENTS
SCHEDULE 6.10 - EXISTING RESTRICTIVE AGREEMENTS

EXHIBIT A     - FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT B     - FORM OF BORROWING REQUEST
EXHIBIT C-1   - FORM OF OPINION OF SPECIAL COUNSEL TO HOLDINGS, THE BORROWER
                AND THE SUBSIDIARY LOAN PARTIES
EXHIBIT C-2   - FORM OF OPINION OF THE GENERAL COUNSEL OF HOLDINGS
EXHIBIT D     - FORM OF SUBSIDIARY GUARANTEE
EXHIBIT E     - FORM OF REVOLVING NOTE
EXHIBIT F     - FORM OF TERM NOTE
EXHIBIT G     - FORM OF INTERCOMPANY NOTE
EXHIBIT H     - FORM OF INTERCREDITOR AGREEMENT
EXHIBIT I     - [INTENTIONALLY DELETED]
EXHIBIT J     - FORM OF PROMISSORY NOTE
EXHIBIT K     - FORM OF SECURITY AGREEMENT
EXHIBIT L     - FORM OF INCREMENTAL TERM NOTE
</TABLE>

                                        5

<PAGE>   21

     AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated as of
September 8, 1999 among Williams Communications, LLC, a Delaware limited
liability company, Williams Communications Group, Inc., a Delaware corporation,
the LENDERS party hereto, BANK OF AMERICA, N.A., as Administrative Agent, THE
CHASE MANHATTAN BANK, as Syndication Agent, and SALOMON SMITH BARNEY INC. and
LEHMAN BROTHERS, INC., as Joint Lead Arrangers with respect to the Incremental
Facility referred to herein.

     WHEREAS, Holdings, the Borrower, the lenders party thereto, Bank of
America, N.A., as Administrative Agent, The Chase Manhattan Bank, as Syndication
Agent and Salomon Smith Barney Inc. and Lehman Brothers, Inc., as Joint Lead
Arrangers with respect to the Incremental Facility referred to herein, have
entered into an Amendment No. 5 dated as of April 12, 2001 ("Amendment No. 5")
pursuant to which such parties have agreed to amend and restate the Existing
Agreement referred to therein as set forth herein;

     NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

     "ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.

     "Additional Capital" means the sum of:

          (a) $850 million;

          (b) the aggregate Net Proceeds received by the Borrower from the
     issuance or sale of any Qualifying Equity Interests of Holdings, subsequent
     to the Amendment No. 4 Effective Date; and

          (c) the aggregate Net Proceeds from the issuance or sale of Qualifying
     Holdings Debt subsequent to the Amendment No. 4 Effective Date convertible
     or exchangeable into Qualifying Equity Interests of Holdings, in each case
     upon conversion or exchange thereof into Qualifying Equity Interests of
     Holdings subsequent to the Amendment No. 4 Effective Date;

<PAGE>   22

     provided, however, that the Net Proceeds from the issuance or sale of
     Equity Interests or Debt described in clause (b) or (c) shall be excluded
     from any computation of Additional Capital to the extent (1) utilized to
     make a Restricted Payment or (2) such Equity Interests or Debt shall have
     been issued or sold to the Borrower, a Subsidiary of the Borrower or a
     Plan.

     "Additional Incremental Commitment" has the meaning assigned to such term
in Section 2.20.

     "Additional Incremental Facility" has the meaning assigned to such term in
Section 2.20.

     "Additional Incremental Facility Agreement" has the meaning assigned to
such term in Section 2.20.

     "Additional Incremental Lender" has the meaning assigned to such term in
Section 2.20.

     "Additional Incremental Loan" means an Additional Incremental Revolving
Loan or an Additional Incremental Term Loan.

     "Additional Incremental Revolving Commitment" has the meaning assigned to
such term in Section 2.20.

     "Additional Incremental Revolving Loan" has the meaning assigned to such
term in Section 2.20.

     "Additional Incremental Term Commitment" has the meaning assigned to such
term in Section 2.20.

     "Additional Incremental Term Loan" has the meaning assigned to such term in
Section 2.20.

     "Adjusted EBITDA" means, for any period of four consecutive fiscal
quarters:

          (i) if such period is a period ending on or after June 30, 1999 and on
     or before September 30, 2001,

               (A) an amount equal to (x)(1) EBITDA for the last fiscal quarter
               in such period plus (2) ADP Interest Expense for such fiscal
               quarter minus (3) gain for such fiscal quarter attributable to
               Dark Fiber and Capacity Dispositions multiplied by (y) four, plus

               (B) Dark Fiber and Capacity Proceeds for such period; and

          (ii) if such period is any other period,

                                        2

<PAGE>   23

               (A) EBITDA for such period plus (y) ADP Interest Expense for such
               period minus (z) gain for such period attributable to Dark Fiber
               and Capacity Dispositions plus

               (B) Dark Fiber and Capacity Proceeds for such period.

     "Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

     "Administrative Agent" means Bank of America, in its capacity as
administrative agent for the Lenders hereunder, and any successor in such
capacity.

     "Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.

     "ADP" means the program set forth in the Operative Documents.

     "ADP Event of Default" has the meaning assigned to such term in the
Intercreditor Agreement.

     "ADP Interest Expense" means, for any period, the amount that would be
accrued for such period in respect of the Borrower's obligations under the ADP
that would constitute "interest expense" for such period if such obligations
were treated as Capital Lease Obligations.

     "ADP Obligations" means all obligations of Holdings or any Subsidiary under
the ADP.

     "ADP Outstandings" means, at any time, the amount of the Borrower's
obligations at such time in respect of the ADP that would be considered
"principal" if such obligations were treated as Capital Lease Obligations.

     "ADP Property" has the meaning assigned to the term "Property" in the
Participation Agreement.

     "Affiliate" means, with respect to a specified Person, (i) another Person
that directly, or indirectly through one or more intermediaries, Controls (a
"controlling Person"), is Controlled by or is under common Control with the
specified Person, (ii) any Person that holds, directly or indirectly, 10% or
more of the Equity Interests of the specified Person and (iii) any Person 10% or
more of the Equity Interests of which are held directly or indirectly by the
specified Person or a controlling Person.

                                        3

<PAGE>   24

     "Agents" means, collectively, the Administrative Agent, the Syndication
Agent and each Co-Documentation Agent.

     "Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (b) the Prime Rate in effect on such day and (c) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.

     "Amendment No.4 Effective Date" means March 19, 2001.

     "Amendment No. 5" has the meaning set forth in the preamble.

     "Amendment No. 5 Effective Date" means the date of effectiveness of
Amendment No. 5.

     "Applicable Margin" means, for any day, (a) with respect to any Term Loan
or Revolving Loan, (i) the applicable rate per annum set forth below under the
caption "Eurodollar Spread" or "ABR Spread", as the case may be, based upon the
ratings by S&P and Moody's, respectively, applicable on such date to the
Facilities plus (ii) the applicable rate per annum set forth below under the
caption "Leverage Premium", unless the Total Leverage Ratio, as determined by
reference to the financial statements delivered to the Administrative Agent in
respect of the most recently ended fiscal quarter of the Borrower, is less than
6:00 to 1:00:

     (b) with respect to any Incremental Tranche A Loan, (i) the applicable rate
per annum set forth below under the caption "Eurodollar Spread" or "ABR Spread",
as the case may be, based upon the ratings by S&P and Moody's, respectively,
applicable on such date to the Facilities plus (ii) the applicable rate per
annum set forth below under the caption "Leverage Premium", unless the Total
Leverage Ratio, as determined by reference to the financial statements delivered
to the Administrative Agent in respect of the most recently ended fiscal quarter
of the Borrower, is less than 6:00 to 1:00:

<TABLE>
<CAPTION>
                     FACILITIES            EURODOLLAR        ABR         LEVERAGE
                       RATING                SPREAD        SPREAD        PREMIUM
                  -----------------        ----------      ------        -------
<S>               <C>                      <C>             <C>           <C>
LEVEL I            BBB- and Baa3 or           1.50%         0.50%         0.25%
                       higher

LEVEL II             BB+ and Ba1             1.875%        0.875%         0.25%

LEVEL III             BB and Ba2              2.25%         1.25%         0.25%

LEVEL IV             BB- and Ba3              2.50%         1.50%         0.25%

LEVEL V             Lower than BB-
                  or lower than Ba3           2.75%         1.75%         0.25%
</TABLE>

                                        4

<PAGE>   25
     and

     (c) with respect to any Additional Incremental Loan, the Applicable Margin
in respect thereof set forth in the applicable Additional Incremental Facility
Agreement.

     For purposes of the foregoing clauses (a) and (b), (i) if neither S&P nor
Moody's shall have in effect a rating for the Facilities (other than by reason
of the circumstances referred to in the last sentence of this definition), then
the Applicable Margin shall be the rate set forth in Level V, (ii) if either S&P
or Moody's, but not both S&P and Moody's, shall have in effect a rating for the
Facilities, then the Applicable Margin shall be based on such rating, (iii) if
the ratings established by S&P and Moody's for the Facilities shall fall within
different Levels, then the Applicable Margin shall be based on the lower of the
two ratings, (iv) if the ratings established by S&P and Moody's for the
Facilities shall fall within the same Level, then the Applicable Margin shall be
based on that Level and (v) if the ratings established by S&P and Moody's for
the Facilities shall be changed (other than as a result of a change in the
rating system of S&P or Moody's), such change shall be effective as of the date
on which it is first announced by the applicable rating agency. Each change in
the Applicable Margin shall apply (other than with respect to the Leverage
Premium or as described in the immediately succeeding sentence or the
immediately succeeding paragraph) during the period commencing on the effective
date of such change and ending on the date immediately preceding the effective
date of the next such change. If the rating system of S&P or Moody's shall
change, or if either such rating agency shall cease to be in the business of
rating corporate debt obligations, the Borrower and the Lenders shall negotiate
in good faith to amend this definition to reflect such changed rating system or
the unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Margin shall be determined
by reference to the rating most recently in effect prior to such change or
cessation. Any such amendment shall be subject to the provisions of Section
10.02(b).

     If the Borrower shall enter into any Additional Incremental Facility
Agreement, the Borrower, the Incremental Facility Arrangers and the
Administrative Agent, on behalf of the then current Lenders, shall evaluate in
good faith at such time whether to amend this definition of Applicable Margin
with respect to the Term Loans, the Revolving Loans and the Incremental Tranche
A Term Loans. Any such amendment shall be subject to the provisions of Section
10.02(b).

     "Applicable Percentage" means, with respect to any Revolving Lender, the
percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.

     "Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by

                                        5

<PAGE>   26

Section 10.04), and accepted by the Administrative Agent, in the form of Exhibit
A or any other form approved by the Administrative Agent.

     "ATL" means ATL-Algar Telecom Leste S.A., a Brazilian corporation.

     "Attributable Debt" means, on any date, in respect of any lease of Holdings
or any Restricted Subsidiary entered into as part of a Sale and Leaseback
Transaction subject to Section 6.06(ii), (i) if such lease is a Capital Lease
Obligation, the capitalized amount thereof that would appear on a balance sheet
of such Person prepared as of such date in accordance with GAAP, and (ii) if
such lease is not a Capital Lease Obligation, the capitalized amount of the
remaining lease payments under such lease that would appear on a balance sheet
of such Person prepared as of such date in accordance with GAAP if such lease
were accounted for as a Capital Lease Obligation.

     "Bank of America" means Bank of America, N.A.

     "Board" means the Board of Governors of the Federal Reserve System of the
United States of America.

     "Borrower" means Williams Communications, LLC, a Delaware limited liability
company.

     "Borrowing" means (a) Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect, or (b) a Swingline Loan.

     "Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

     "Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York, New York or Dallas, Texas are authorized or
required by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

     "Capital Expenditures" means, for any period, the additions to property,
plant and equipment and other capital expenditures of Holdings and the
Restricted Subsidiaries that are (or would be) set forth in a consolidated
statement of cash flows of Holdings and the Restricted Subsidiaries for such
period prepared in accordance with GAAP, other than any such capital
expenditures that constitute Investments permitted under Section 6.04 (other
than Section 6.04(i)); provided that any use during such period of the proceeds
of any such Investment made by the recipient thereof for additions to property,
plant and equipment and other capital expenditures, as described in this
definition, shall (unless such use shall, itself, constitute an Investment
permitted under Section 6.04 (other than Section 6.04(i)) constitute "Capital
Expenditures".

                                        6

<PAGE>   27

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

     "Cash Equivalent Investments" means:

          (1) Government Securities maturing, or subject to tender at the option
     of the holder thereof, within two years after the date of acquisition
     thereof;

          (2) time deposits and certificates of deposit of (a) any commercial
     bank organized in the United States having capital and surplus in excess of
     $500,000,000 or (b) any branch located in the United States of any
     commercial bank organized under the law of any other country that is a
     member of the Organization for Economic Cooperation and Development having
     total assets in excess of $500,000,000, or its foreign currency equivalent
     at the time, in either case with a maturity date not more than one year
     from the date of acquisition;

          (3) repurchase obligations with a term of not more than 30 days for
     underlying securities of the types described in clause (1) above entered
     into with (a) any bank meeting the qualifications specified in clause (2)
     above or (b) any primary government securities dealer reporting to the
     Market Reports Division of the Federal Reserve Bank of New York;

          (4) direct obligations issued by any state of the United States or any
     political subdivision of any such state or any public instrumentality
     thereof maturing, or subject to tender at the option of the holder of such
     obligation, within one year after the date of acquisition thereof; provided
     that, at the time of acquisition, the long-term debt of such state,
     political subdivision or public instrumentality has a rating of A, or
     higher, from S&P or A-2 or higher from Moody's or, if at any time neither
     S&P nor Moody's shaft be rating such obligations, then an equivalent rating
     from such other nationally recognized rating service as is acceptable to
     the Administrative Agent;

          (5) commercial paper issued by the parent corporation of (a) any
     commercial bank organized in the United States having capital and surplus
     in excess of $500,000,000 or (b) any branch located in the United States of
     any commercial bank organized under the laws of any other country that is a
     member of the Organization for Economic Cooperation and Development having
     total assets in excess of $500,000,000, or its foreign currency equivalent
     at the time, and money market instruments and commercial paper issued by
     others having one of the three highest ratings obtainable from either S&P
     or Moody's, or, if at any time neither S&P nor Moody's shall be rating such
     obligations, then from such

                                       7

<PAGE>   28

     other nationally recognized rating service as is acceptable to the
     Administrative Agent and in each case maturing within one year after the
     date of acquisition;

          (6) overnight bank deposits and bankers' acceptances at (a) any
     commercial bank organized in the United States having capital and surplus
     in excess of $500,000,000 or (b) any branch located in the United States of
     any commercial bank organized under the laws of any other country that is a
     member of the Organization for Economic Cooperation and Development having
     total assets in excess of $500,000,000 or its foreign currency equivalent
     at the time;

          (7) deposits available for withdrawal on demand with (a) a commercial
     bank organized in the United States having capital and surplus in excess of
     $500,000,000 or (b) any branch located in the United States of any
     commercial bank organized under the laws of any other country that is a
     member of the Organization for Economic Cooperation and Development having
     total assets in excess of $500,000,000 or its foreign currency equivalent
     at the time; and

          (8) investments in money market funds substantially all of whose
     assets comprise securities of the types described in clauses (1) through
     (7).

     "Change in Control" means:

     (a) the acquisition of ownership, directly or indirectly, beneficially or
of record, by any Person other than Holdings of any shares of capital stock of
the Borrower;

     (b) the acquisition of ownership, directly or indirectly, beneficially or
of record, by any Person or group (within the meaning of Section 13(d) or 14(d)
of the Exchange Act and the rules of the Commission thereunder as in effect on
the date hereof) other than the Parent and its subsidiaries, of shares
representing more than 35% of either (i) the aggregate ordinary voting power
represented by the issued and outstanding Voting Stock of Holdings or (ii) the
issued and outstanding capital stock of Holdings;

     (c) other than as a result of the consummation of the Spin-Off, the failure
of the Parent and its subsidiaries to own, directly or indirectly, (i) more than
75% (or, if (x) the Facilities are rated at least BBB- by S&P and Baa3 by
Moody's and (y) the Parent shall have been released from its obligations under
the Parent Guarantee, 35%) of the aggregate ordinary voting power represented by
the issued and outstanding Voting Stock of Holdings or (ii) more than 65% (or,
if (x) the Facilities are rated at least BBB- by S&P and Baa3 by Moody's and (y)
the Parent shall have been released from its obligations under the Parent
Guarantee, 35%) of the issued and outstanding capital stock of Holdings;

     (d) occupation of a majority of the seats (other than vacant seats) on the
board of directors of Holdings by Persons who were neither (i) nominated by the
board of directors of Holdings nor (ii) appointed by directors so nominated; or

                                       8

<PAGE>   29

     (e) the acquisition of direct or indirect Control of Holdings by any Person
or group (other than, prior to the consummation of the Spin-Off, the Parent).

     "Change in Law" means (a) the adoption of any law, rule or regulation after
the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by any Governmental Authority after
the date of this Agreement or (c) compliance by any Lender, any Swingline Lender
or any Issuing Bank (or, for purposes of Section 2.15(b), by any lending office
of such Lender, Swingline Lender or Issuing Bank or by such Lender's, Swingline
Lender's or Issuing Bank's holding company, if any) with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.

     "Chase" means The Chase Manhattan Bank.

     "Class" means, when used in reference to any Loan or Borrowing, to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Term
Loans, Swingline Loans, Incremental Term Loans or Additional Incremental Loans
and, when used in reference to any Commitment or Facility, refers to whether
such Commitment or Facility is a Revolving Commitment or Facility, a Term
Commitment or Facility, an Incremental Commitment or Facility or an Additional
Incremental Commitment or Facility. The Additional Incremental Loans, Borrowings
thereof and Additional Incremental Commitments under each Additional Incremental
Facility shall constitute a separate Class from the Additional Incremental
Loans, Borrowings thereof and Additional Incremental Commitments under each
other Additional Incremental Facility, and if an Additional Incremental Facility
includes Additional Incremental Revolving Commitments and Additional Incremental
Term Commitments, such Additional Incremental Revolving Commitments and
Additional Incremental Term Commitments and the Additional Incremental Revolving
Loans and Borrowings thereof and the Additional Incremental Term Loans and
Borrowings thereof, respectively, thereunder shall constitute separate Classes.

     "CNG" means CNG Computer Networking Group, Inc., a Delaware corporation,
and its successors and assigns.

     "Co-Documentation Agent" means each of Salomon Smith Barney Inc., Lehman
Brothers, Inc. and Merrill Lynch & Co., Inc., in each case in its capacity as a
co- documentation agent hereunder.

     "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

     "Collateral" means any and all "Collateral", as defined in any applicable
Collateral Document.

                                        9

<PAGE>   30

     "Collateral Documents" means the Security Agreement and all security
agreements, pledge agreements, mortgages and other security agreements or
instruments or documents executed and delivered pursuant to Section 5.11B, 5.13
or 5.14.

     "Collateral Establishment Date" has the meaning assigned to such term in
Section 5.11B.

     "Collateral Event" means the failure of the Facilities to be rated at least
(i) BB- by S&P and (ii) Ba3 by Moody's.

     "Collateral Notice has the meaning assigned to such term in Section 5.11B.

     "Collateral Release Event" means the occurrence, after the occurrence of a
Collateral Event, of the earlier to occur of (i) the termination of the
Commitments, the payment in full of all obligations under the Loan Documents and
the expiration or termination of all Letters of Credit and (ii) the rating of
the Facilities by S&P of BB+ or greater and by Moody's of Ba1 or greater, in
each case after giving effect to the release of all Collateral.

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

     "Commitment" means a Revolving Commitment, a Term Commitment, an
Incremental Commitment, an Additional Incremental Commitment or any combination
thereof (as the context requires).

     "Commitment Fee Rate" means, (a) with respect to the Revolving Commitments
and the Term Commitments, a rate per annum equal to (x) 1.00% for each day on
which Usage is less than 33.3%, (y) 0.75% for each day on which Usage is equal
to or greater than 33.3% but less than 66.6% and (z) 0.50% for each day on which
Usage is equal to or greater than 66.6% and (b) with respect to the Incremental
Tranche A Commitments, 0.75% for each day. For purposes of the foregoing,
"Usage" means, on any date, the percentage obtained by dividing (i) in the case
of Revolving Commitments, (a) the aggregate Revolving Exposure on such date less
the aggregate principal amount of all Swingline Loans outstanding on such date
by (b) the aggregate outstanding Revolving Commitments on such date and (ii) in
the case of Term Commitments, (a) the aggregate principal amount of all Term
Loans outstanding on such date by (b) the sum of the aggregate principal amount
of all Term Loans outstanding on such date and the aggregate unused Term
Commitments on such date.

     "Commitment Fees" has the meaning assigned to such term in Section 2.12.

     "Consolidated Net Income" means, for any period, the net income or loss of
Holdings and the Restricted Subsidiaries (exclusive of the portion of net income
allocable to Persons that are not Restricted Subsidiaries, except to the extent
such amounts are received in cash by the Borrower or a Restricted Subsidiary)
for such period.

                                       10

<PAGE>   31

     "Consolidated Assets" means, at any date, the consolidated assets of
Holdings and the Restricted Subsidiaries.

     "Contributed Capital" means, at any date, (i) Total Net Debt at such date
plus (ii) without duplication, all cash proceeds received by Holdings on or
prior to such date from contributions to the capital, or purchases of common
equity securities, of Holdings, including, without limitation, the proceeds of
the Equity Issuance, and all other capital contributions made by the Parent and
its subsidiaries (other than Holdings and its Subsidiaries) to Holdings, but
only to the extent that proceeds of any of the foregoing are contributed by
Holdings to the Borrower.

     "Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have correlative meanings.

     "Dark Fiber and Capacity Proceeds" means, for any period, cash proceeds
received by Holdings and the Restricted Subsidiaries in respect of Dark Fiber
and Capacity Dispositions during such period.

     "Dark Fiber and Capacity Disposition" means a lease, sale, conveyance or
other disposition of fiber optic cable or capacity for a period constituting all
or substantially all of the expected useful life of either the fiber optic cable
(in the case of Dark Fiber Disposition) or optronic equipment generating the
capacity (in the case of Capacity Disposition) thereof.

     "Deemed Subsidiary Investment" has the meaning assigned to such term in
Section 6.14.

     "Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.

     "Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.

     "Disqualified Stock" of any Person means any Equity Interest of such Person
which, by its terms, or by the terms of any security into which it is
convertible or for which it is exchangeable, or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in
part, on or prior to the first anniversary of the Term Maturity Date.

     "dollars" or "$" refers to lawful money of the United States of America.

     "EBITDA" means, for any period,

                                       11

<PAGE>   32

          (i) Consolidated Net Income for such period,

     plus,

          (ii) to the extent deducted in determining Consolidated Net Income,
     the sum, without duplication, of (w) interest expense, (x) income tax
     expense, (y) depreciation and amortization expense and (z) non-cash
     extraordinary or non- recurring charges (if any), in each case recognized
     in such period;

     minus,

          (iii) to the extent included in Consolidated Net Income for such
     period, extraordinary or non-recurring gains (if any), in each case
     recognized in such period.

     "Effective Date" means September 8, 1999.

     "Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material, the health
effects of Hazardous Materials or safety matters.

     "Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of Holdings or any Restricted Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

     "Equity Interests" means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person.

     "Equity Issuance" means the issuance and sale by Holdings of its common
stock (x) in an initial public offering or (y) to certain strategic investors
other than the Parent or any of its subsidiaries or Affiliates.

     "Equity Issuance Registration Statement" means Amendment No. 7 to the
Registration Statement on Form S-1 with respect to the Equity Issuance filed by
Holdings with the Commission on September 2, 1999.

                                       12

<PAGE>   33

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

     "ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.

     "ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

     "Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.

     "Event of Default" has the meaning assigned to such term in Article 7.

     "Excess Cash Flow" means, for any fiscal period, the sum (without
duplication) of:

          (a) the Consolidated Net Income (or loss) of Holdings and the
     Restricted Subsidiaries for such period, adjusted to exclude any gains or
     losses attributable to Prepayment Events; plus

          (b) depreciation, amortization, non-cash interest expense and other
     non-cash charges or losses deducted in determining Consolidated Net Income
     (or loss) for such period; plus

          (c) the sum of (i) the amount, if any, by which Net Working Capital
     decreased during such period plus (ii) the amount, if any, by which the
     consolidated deferred revenues of Holdings and the Restricted Subsidiaries

                                       13

<PAGE>   34

     increased during such period plus (iii) the aggregate principal amount of
     Capital Lease Obligations and other Indebtedness incurred during such
     period to finance Capital Expenditures, to the extent that mandatory
     principal payments in respect of such Indebtedness would not be excluded
     from clause (f) below when made; minus

          (d) the sum of (i) any non-cash gains included in determining
     Consolidated Net Income (or loss) for such period plus (ii) the amount, if
     any, by which Net Working Capital increased during such period plus (iii)
     the amount, if any, by which the consolidated deferred revenues of Holdings
     and the Restricted Subsidiaries decreased during such period; minus

          (e) Capital Expenditures for such period; minus

          (f) the aggregate principal amount of long-term Indebtedness
     (including pursuant to Capital Lease Obligations) repaid or prepaid by
     Holdings and the Restricted Subsidiaries during such period, excluding (i)
     Indebtedness in respect of Revolving Loans, Incremental Revolving Loans,
     Additional Incremental Revolving Loans and Letters of Credit, (ii) Term
     Loans, Incremental Term Loans and Additional Incremental Term Loans prepaid
     pursuant to Section 2.11(b) or (c), (iii) repayments or prepayments of
     Indebtedness financed by incurring other Indebtedness, to the extent that
     mandatory principal payments in respect of such other Indebtedness would
     not be excluded from when made and (iv) Indebtedness referred to in
     Sections 6.01(d), 6.01(f), 6.01(g), 6.01(i), 6.01(j), 6.01(k) and 6.01(o).

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is a
resident or is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.19(b)) or any Participant that would be a Foreign
Lender if it were a Lender, any withholding tax that (i) is imposed on or with
respect to amounts payable to such Foreign Lender or Participant at the time
such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or such Participant become a Participant, except to the extent
that such Foreign Lender (or its assignor, if any) or Participant was entitled,
at the time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17(a) or (ii) is attributable to such Foreign Lender or
Participant's failure to comply with Section 2.17(e).

                                       14

<PAGE>   35

     "Existing International Joint Ventures" means ATL, PowerTel Limited and
Telefonica Manquehue, S.A.

     "Facilities" means the Term Facility, the Revolving Facility, the
Incremental Facility and each Additional Incremental Facility.

     "Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

     "Financial Officer" means the chief financial officer, principal accounting
officer, treasurer or controller of Holdings or the Borrower, as the case may
be.

     "First Incremental Borrowing Date" means the date on which the first
Borrowing under the Incremental Facility is made in accordance with Section
4.03.

     "Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

     "Foreign Subsidiary" means any Subsidiary that is organized under the laws
of a jurisdiction other than the United States of America or any State thereof
or the District of Columbia, other than a Subsidiary that is (whether as a
matter of law, pursuant to an election by such Subsidiary or otherwise) treated
as a partnership in which any Subsidiary that is not a Foreign Subsidiary is a
partner or as a branch of any Subsidiary that is not a Foreign Subsidiary for
United States income tax purposes.

     "GAAP" means generally accepted accounting principles in the United States
of America.

     "Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.

     "Government Securities" means direct obligations of, or obligations fully
and unconditionally guaranteed or insured by, the United States of America or
any agency or instrumentality thereof for the payment of which obligations or
guarantee the full faith and credit of the United States is pledged and which
are not callable or redeemable at the

                                       15

<PAGE>   36

issuer's option; provided that, for purposes of the definition of "Cash
Equivalents Investments" only, such obligations shall not constitute Government
Securities if they are redeemable or callable at a price less than the purchase
price paid by the Borrower or the applicable other Restricted Subsidiary,
together with all accrued and unpaid interest, if any, on such Government
Securities.

     "Granting Lender" has the meaning set forth in Section 10.04(b)(2).

     "Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

     "Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law as hazardous, toxic, a pollutant or a contaminant.

     "Hedge Counterparty" means each Lender that is, and each affiliate of any
Lender that is, a counterparty under a Hedging Agreement entered into with the
Borrower or any other Restricted Subsidiary.

     "Hedging Agreement" means any interest rate protection agreement, commodity
price protection agreement or other interest or currency exchange rate or
commodity price hedging arrangement.

     "High Yield Notes" means the notes issued by Holdings (i) the terms of
which either (A) are substantially similar to the terms set forth in the Notes
Offering Registration Statement or (B) are otherwise approved by the
Administrative Agent and the Syndication Agent after consultation with the
Required Banks and (ii) no part of the principal of which is required to be paid
(upon maturity or by mandatory sinking fund, mandatory redemption, mandatory
prepayment or otherwise) prior to the date that is one year after the Term
Maturity Date.

                                       16

<PAGE>   37

     "Holdings" means Williams Communications Group, Inc., a Delaware
corporation.

     "Incremental Commitments" means the Incremental Tranche A Commitments.

     "Incremental Facility" means the Incremental Tranche A Facility.

     "Incremental Facility Arrangers" means Salomon Smith Barney Inc. and Lehman
Brothers, Inc., in their respective capacities as joint lead arrangers of the
Incremental Facility.

     "Incremental Lenders" means the Incremental Tranche A Lenders.

     "Incremental Term Loans" means the Incremental Tranche A Term Loans.

     "Incremental Tranche A Amortization Date" means December 31, 2002.

     "Incremental Tranche A Commitments" means with respect to each Incremental
Tranche A Lender, the commitment, if any, of such Lender to make Incremental
Tranche A Term Loans hereunder during the Incremental Tranche A Term Loan
Availability Period, expressed as an amount representing the maximum principal
amount of the Incremental Tranche A Term Loans to be made by such Lender
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 10.04. The initial amount
of each Lender's Incremental Tranche A Term Commitment is set forth on Schedule
2.01(b), or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Incremental Tranche A Term Commitment, as applicable. The
initial aggregate amount of the Incremental Tranche A Lenders' Incremental
Tranche A Term Commitments is $450,000,000.

     "Incremental Tranche A Commitment Termination Date" means the date that is
the earlier of (i) 180 days after the Amendment No. 5 Effective Date and (ii)
the date of termination of the Incremental Tranche A Commitments.

     "Incremental Tranche A Facility" means the Incremental Tranche A
Commitments and the Incremental Tranche A Term Loans hereunder.

     "Incremental Tranche A Lenders" means a Lender with an Incremental Tranche
A Commitment or an outstanding Incremental Tranche A Term Loan.

     "Incremental Tranche A Maturity Date" means September 8, 2006.

     "Incremental Tranche A Term Loan" means a Loan made pursuant to Section
2.01(b)(i).

                                       17

<PAGE>   38

     "Incremental Tranche A Term Loan Availability Period" means the period from
and including the First Incremental Borrowing Date to but excluding the earlier
of (i) the Incremental Tranche A Commitment Termination Date and (ii) the date
of termination of the Incremental Tranche A Commitments.

     "Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding (i) current accounts
payable incurred in the ordinary course of business and (ii) payment obligations
of such Person to the owner of assets used in a Telecommunications Business for
the use thereof pursuant to a lease or other similar arrangement with respect to
such assets or a portion thereof entered into in the ordinary course of
business), (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person
of Indebtedness of others, (g) all (x) Capital Lease Obligations of such Person
(provided that Capital Lease Obligations in respect of fiber optic cable
capacity arising in connection with exchanges of such capacity shall constitute
Indebtedness only to the extent of the amount of such Person's liability in
respect thereof net (but not less than zero) of such Person's right to receive
payments obtained in exchange therefor) and (y) ADP Outstandings, if any, of
such Person, (h) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty, (i) all
obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances, (j) any Disqualified Stock and (k) all obligations under any
Hedging Agreements or Permitted Specified Security Hedging Transactions. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Indebtedness of the Borrower and the other Subsidiaries shall exclude any
Indebtedness of Holdings that would otherwise constitute Indebtedness of the
Borrower or any such Subsidiary only under clause (e) above and solely by virtue
of a Lien created under the Loan Documents in accordance with Section 5.11B(d),
and Indebtedness of Holdings and the Subsidiaries shall exclude any Indebtedness
of the Parent that would otherwise constitute Indebtedness of Holdings or any
Subsidiary only under clause (e) above and solely by virtue of a Lien created
under the Loan Documents in accordance with Section 5.11B(d).

     "Indemnified Taxes" means Taxes other than Excluded Taxes.

     "Information Memorandum" means the Confidential Information Memorandum
dated August 1999 relating to the Parent, Holdings, the Borrower and the
Transactions.

                                       18

<PAGE>   39

     "Initial Collateral Date" means the first date on which the Parent ceases
to own at least a majority of the outstanding securities having ordinary voting
power of Holdings, whether as a result of the consummation of the Spin-Off or
otherwise.

     "Intercreditor Agreement" means the Intercreditor Agreement, substantially
in the form of Exhibit H hereto, among the Lenders, the Parent, Holdings and the
Borrower.

     "Interest Coverage Ratio" means, at any date, the ratio of (i) the amount
equal to (A) EBITDA plus (B) ADP Interest Expense minus (C) gains attributable
to Dark Fiber and Capacity Dispositions plus (D) Dark Fiber and Capacity
Proceeds to (ii) Interest Expense, in each case for the period of four
consecutive fiscal quarters most recently ended on or prior to such date.

     "Interest Election Request" means a request by the Borrower to convert or
continue a Revolving Borrowing or Term Borrowing in accordance with Section
2.07.

     "Interest Expense" means, for any period, the cash interest expense of
Holdings and the Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP plus ADP Interest Expense for such
period, net of interest income for such period.

     "Interest Payment Date" means (a) with respect to any ABR Loan (other than
a Swingline Loan), the last day of each March, June, September and December, (b)
with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.

     "Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three, or six months
(or if corresponding funding is available to each Lender of the applicable
Class, twelve months) thereafter, as the Borrower may elect; provided, that (i)
if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless
such next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business Day and
(ii) any Interest Period that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period. For purposes hereof, the
date of a Borrowing initially shall be the date on which such Borrowing is made
and thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

                                       19

<PAGE>   40

     "Issuing Bank" means each of Bank of America and Chase, each in its
capacity as an issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.05(i). Each Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by affiliates
of the Issuing Bank, in which case the term "Issuing Bank" shall include any
such affiliate with respect to Letters of Credit issued by such affiliate.

     "Investment" has the meaning assigned to such term in Section 6.04.

     "LC Disbursement" means a payment made by an Issuing Bank pursuant to a
Letter of Credit.

     "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Revolving Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.

     "Lenders" means the Persons listed on Schedule 2.01, any Additional
Incremental Lender that shall become a Lender pursuant to Section 2.20 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lenders and the Additional Incremental Lenders.

     "Leverage Target Date" means the first date on or after March 31, 2002 on
which the Total Leverage Ratio for the fiscal quarter (or fiscal year, as the
case may be) most recently ended and with respect to which Holdings and the
Borrower shall have delivered the financial statements required to be delivered
by them with respect to such fiscal quarter (or fiscal year, as the case may be)
pursuant to Section 5.01(a) or 5.01(b) does not exceed 3.5:1.0.

     "Letter of Credit" means any letter of credit issued pursuant to this
Agreement.

     "LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate (rounded
upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest

                                       20

<PAGE>   41

Period are offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.

     "Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.

     "Loan Documents" means this Agreement, the Parent Guarantee, the Subsidiary
Guarantee, the Intercreditor Agreement, any Additional Incremental Facility
Agreement and the Collateral Documents (if any).

     "Loan Parties" means Holdings, the Borrower and the Subsidiary Loan
Parties.

     "Loan Party Guarantees" means the Subsidiary Guarantee.

     "Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.

     "Mark-to-Market Valuation" means, at any date with respect to any Hedging
Agreement or Permitted Specified Security Hedging Transaction, all net
obligations under such Hedging Agreement or Permitted Specified Security Hedging
Transaction in an amount equal to (i) if such Hedging Agreement or Permitted
Specified Security Hedging Transaction has been closed out, the termination
value thereof or (ii) if such Hedging Agreement or Permitted Specified Security
Hedging Transaction has not been closed out, the mark-to-market value thereof
determined on the basis of readily available quotations provided by any
recognized dealer in Hedging Agreements or other transactions similar to such
Hedging Agreement or Permitted Specified Security Hedging Transaction."

     "Material Adverse Change" means any event, development or circumstance that
has had or could reasonably be expected to have a Material Adverse Effect.

     "Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
Holdings and its Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under any Loan Document or (c) the
rights of or benefits available to the Lenders under any Loan Document.

     "Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit) of any one or more of Holdings and the Restricted
Subsidiaries in an aggregate principal amount exceeding $25,000,000. For
purposes of determining Material

                                       21

<PAGE>   42

Indebtedness, the "principal amount" of the obligations of Holdings or any
Restricted Subsidiary in respect of any Hedging Agreement or Permitted Specified
Security Hedging Transaction at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that Holdings or such Restricted
Subsidiary would be required to pay if such Hedging Agreement or Permitted
Specified Security Hedging Transaction were terminated at such time.

     "Moody's" means Moody's Investors Service, Inc.

     "Mortgage" means a mortgage, deed of trust, assignment of leases and rents,
leasehold mortgage or other security document granting a Lien on any Mortgaged
Property to secure the Obligations.

     "Mortgage Establishment Date" has the meaning assigned to such term in
Section 5.11B(b).

     "Mortgaged Property" means each parcel of real property and the
improvements thereto owned by a Loan Party with respect to which a Mortgage is
granted pursuant to Section 5.11B(b).

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

     "Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by Holdings and the Restricted
Subsidiaries to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale or other disposition of an asset (including
pursuant to a casualty or condemnation), the amount of all payments required to
be made by Holdings and the Restricted Subsidiaries as a result of such event to
repay Indebtedness (other than Loans) secured by such asset or otherwise subject
to mandatory prepayment as a result of such event, and (iii) the amount of all
taxes paid (or reasonably estimated to be payable) by Holdings and the
Restricted Subsidiaries, and the amount of any reserves established by Holdings
and the Restricted Subsidiaries to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by the chief financial officer of
Holdings).

     "Net Working Capital" means, at any date, (a) the consolidated current
assets of Holdings and the Restricted Subsidiaries as of such date (excluding
cash and Cash Equivalent Investments) minus (b) the consolidated current
liabilities of Holdings and the Restricted Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness). Net Working Capital
at any date may be a positive or negative number.

                                       22

<PAGE>   43

Net Working Capital increases when it becomes more positive or less negative and
decreases when it becomes less positive or more negative.

     "Notes Offering" means the public offering and sale of the High Yield
Notes.

     "Notes Offering Registration Statement" means Amendment No. 6 to the
Registration Statement on Form S-1 with respect to the Notes Offering filed by
Holdings with the Commission on September 2, 1999.

     "Obligations" means (i) obligations under the Loan Documents, including (x)
all principal of and interest (including, without limitation, Post-Petition
Interest) on any Loan under, or any Note issued pursuant to, or any
reimbursement obligation under any Letter of Credit under, the Credit Agreement
and (y) all other amounts payable under the Loan Documents and (ii) obligations
of any Loan Party under any Hedging Agreement with any Lender or any affiliate
of any Lender, including, without limitation, a conditional obligation to make a
future payment under an outstanding Hedging Agreement.

     "Operative Documents" has the meaning set forth in the Participation
Agreement.

     "Other Financing Documents" means all agreements, instruments and other
documents entered into or related to the Equity Issuance and the Notes Offering.

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

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

     "Parent Indemnity" means the Indemnification Agreement dated as of
September 1, 1999 between the Parent and Holdings.

     "Participation Agreement" means the Amended and Restated Participation
Agreement dated as of September 2, 1998, as amended from time to time, among the
Borrower, State Street Bank and Trust Company of Connecticut, National
Association, as trustee, the Noteholders and Certificate Holders named therein,
State Street Bank and Trust Company, as collateral agent, and Citibank, N.A., as
agent, and the other agents, arrangers and managing agents party thereto.

     "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.

     "Permitted Encumbrances" means:

     (a)  Liens imposed by law for taxes that are not yet due or are being
          contested in compliance with Section 5.04;

                                       23

<PAGE>   44

     (b)  carriers', warehousemen's, mechanics', materialmen's, repairmen's and
          other like Liens imposed by law, arising in the ordinary course of
          business and securing obligations that are not overdue by more than 45
          days or are being contested in compliance with Section 5.04;

     (c)  pledges and deposits made in the ordinary course of business in
          compliance with workers' compensation, unemployment insurance and
          other social security laws or regulations;

     (d)  deposits to secure the performance of bids, trade contracts, leases,
          statutory obligations, surety and appeal bonds, performance bonds and
          other obligations of a like nature, in each case in the ordinary
          course of business;

     (e)  judgment liens in respect of judgments that do not constitute an Event
          of Default under clause (k) of Section 7.01; and

     (f)  easements, zoning restrictions, rights-of-way and similar encumbrances
          on real property imposed by law or arising in the ordinary course of
          business that do not secure any monetary obligations and do not
          materially detract from the value of the affected property or
          interfere with the ordinary conduct of business of Holdings or any
          Restricted Subsidiary;

provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.

     "Permitted Receivables Disposition" means any transfer (by way of sale,
pledge or otherwise) by the Borrower or any Restricted Subsidiary to any other
Person (including a Receivables Subsidiary) of accounts receivable and other
rights to payment (whether constituting accounts, chattel paper, instruments,
general intangibles or otherwise and including the right to payment of interest
or finance charges) and related contract and other rights and property
(including all general intangibles, collections and other proceeds relating
thereto, all security therefor (and the property subject thereto), all
guarantees and other agreements or arrangements of whatsoever character from
time to time supporting such right to payment, and all other rights, title and
interest in goods relating to a sale which gave rise to such right of payment)
in connection with a Permitted Receivables Financing.

     "Permitted Receivables Financing" means any receivables securitization
program or other type of accounts receivable financing transaction by the
Borrower or any of its Restricted Subsidiaries in an aggregate amount not to
exceed $250,000,000 on terms reasonably satisfactory to all the Incremental
Facility Arrangers (if any) and the Administrative Agent.

     "Permitted Specified Security Hedging Transactions" means options, collars,
forwards and other similar transactions (including, without limitation, prepaid
forward

                                       24

<PAGE>   45

transactions, collar/loan transactions and other similar transactions) with
respect to any Specified Security entered into by the Borrower or any of its
Subsidiaries to monetize the value of and/or hedge against changes in the market
price of such Specified Security."

     "Permitted Telecommunications Asset Disposition"means the transfer,
conveyance, sale, lease or other disposition of an interest in or capacity on
(1) optical fiber and/or conduit and any related equipment, technology or
software used in a Segment of the Borrower's and the Restricted Subsidiaries'
communications network, other than in the ordinary course of business; provided
that after giving effect to such disposition, the Borrower and the Restricted
Subsidiaries would retain the right to use at least the minimum retained
capacity set forth below:

     (i)  with respect to any Segment constructed by, for or on behalf of the
          Borrower or any Subsidiary or Affiliate, (x) 24 optical fibers per
          route mile on such Segment as deployed at the time of such Permitted
          Telecommunications Asset Disposition or (y) 12 optical fibers and one
          empty conduit per route mile on such Segment as deployed at the time
          of such Permitted Telecommunications Asset Disposition; and

     (ii) with respect to any Segment purchased or leased from third parties,
          the lesser of (x) 50% of the optical fibers per route mile originally
          purchased or leased on such Segment, (y) 24 optical fibers per route
          mile on such Segment as deployed at the time of such Permitted
          Telecommunications Asset Disposition or (z) 12 optical fibers and one
          empty conduit per route mile on such Segment as deployed at the time
          of such Permitted Telecommunications Asset Disposition; or

(2) single strand fiber used in a Segment of the Borrower's and the Restricted
Subsidiaries' communications network, other than in the ordinary course of
business; provided that after giving effect to such disposition, the Borrower
and the Restricted Subsidiaries would not eliminate all capacity between the
endpoint cities connected by any fiber of the Borrower or its Restricted
Subsidiaries.

     "Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

     "Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.

     "Post-Petition Interest" means any interest that accrues after the
commencement of any case, proceeding or action relating to the bankruptcy,
reorganization or insolvency of the Borrower (or would accrue but for the
operation of applicable bankruptcy,

                                       25

<PAGE>   46

reorganization or insolvency laws), whether or not such interest is allowed or
allowable as a claim in any such case, proceeding or other action.

     "Prepayment Event" means:

     (a)  any sale, transfer or other disposition (including pursuant to a Sale
          and Leaseback Transaction) of any property or asset of Holdings or any
          Restricted Subsidiary, other than Dark Fiber and Capacity Dispositions
          and dispositions permitted under clauses (a) through (d) and (f)
          through (i) of Section 6.05 and except as contemplated by Sections
          5.17 and 5.18; or

     (b)  any casualty or other insured damage to, or any taking under power of
          eminent domain or by condemnation or similar proceeding of, any
          property or asset of Holdings or any Subsidiary, but only to the
          extent that the Net Proceeds therefrom have not been applied to
          repair, restore or replace such property or asset or purchase similar
          property or assets within 360 days after such event; or

     (c)  the incurrence by Holdings, the Borrower or any Subsidiary of any
          Indebtedness, other than Indebtedness permitted under Section 6.01.

     "Prepayment Portion" means in respect of any prepayment to be made pursuant
to Section 2.11(b) or 2.11(c), a fraction, the numerator of which is the
aggregate principal amount of Term Loans, Additional Incremental Term Loans and
Incremental Term Loans of any Class subject to prepayment under such Section on
account of Excess Cash Flow or the applicable type of Prepayment Event, as the
case may be (whether or not such Loans are actually to be prepaid on account of
such Prepayment Event or Excess Cash Flow), and the denominator of which is the
sum of such aggregate principal amount and the aggregate Revolving Commitments
and Additional Incremental Revolving Commitments of any Class subject to
reduction pursuant to Section 2.08(f) or (g) on account of Excess Cash Flow or
the applicable type of Prepayment Event, as the case may be (whether or not such
Commitments are actually to be reduced on account of such Prepayment Event or
Excess Cash Flow).

     "Prime Rate" means the rate of interest per annum publicly announced from
time to time by the Administrative Agent as its prime rate in effect at its
principal office in Dallas, Texas; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.

     "Projections" has the meaning set forth in Section 3.04(d).

     "Qualifying Borrower Indebtedness" means, unsecured Indebtedness of the
Borrower to Holdings that (i) does not require the payment of any principal or
cash interest prior to the first anniversary of the Term Maturity Date, (ii) is
not redeemable by, or convertible or exchangeable for securities of the Borrower
or any of its Subsidiaries that are redeemable by, the holder thereof, and not
subject to any required sinking fund or

                                       26

<PAGE>   47

other similar payment, prior to the first anniversary of the Term Maturity Date,
(iii) is subordinated to the Obligations pursuant to subordination provisions at
least as favorable to the holders of the Obligations as the provisions set forth
in Exhibit J hereto and (iv) includes no covenants, events of default or
acceleration provisions other than a customary bankruptcy default and
acceleration provision.

     "Qualifying Equity Interest" means, with respect to Holdings or the
Borrower, Equity Interests of Holdings or the Borrower, as the case may be, that
(i) are not mandatorily redeemable or redeemable at the option of the holder
thereof, (ii) are not convertible into or exchangeable for debt securities of
Holdings or any Restricted Subsidiary, Equity Interests in any Restricted
Subsidiary or Equity Interests that are not Qualifying Equity Interests of
Holdings, (iii) are not required to be repurchased or redeemed by Holdings or
any Restricted Subsidiary and (iv) do not require the payment of cash dividends,
in each of the foregoing cases, prior to the date that is one year after the
Term Maturity Date.

     "Qualifying Holdings Debt" means unsecured debt of Holdings (other than the
High Yield Notes) (i) no part of the principal of which is required to be paid
(upon maturity or by mandatory sinking fund, mandatory redemption, mandatory
prepayment or otherwise) prior to the date that is one year after the Term
Maturity Date, (ii) the payment of the principal of and interest on which and
other payment obligations of Holdings in respect of which are subordinated to
the prior payment in full in cash of the principal of and interest (including
Post-Petition Interest) on the Loans and all other obligations under the Loan
Documents and (iii) the terms and conditions of which are reasonably
satisfactory to the Required Lenders.

     "Qualifying Issuances" means (i) any issuance of Qualifying Equity
Interests of Holdings, (ii) any issuance of unsecured Indebtedness described in
clauses (a) or (b) of the definition thereof of Holdings or the Borrower, and
(iii) any Sale and Leaseback Transaction by the Borrower or a Restricted
Subsidiary the subject property of which is the building under construction as
of the Amendment No. 4 Effective Date and adjacent to One Williams Center,
together with the parking garage adjacent thereto, or any one or more of three
corporate jets identified by the Borrower to the Lenders prior to the Amendment
No. 4 Effective Date, so long as the terms and conditions of any such
Indebtedness or Sale and Leaseback Transaction shall have been approved by all
the Incremental Facility Arrangers (if any) and the Administrative Agent prior
to the issuance thereof.

     "Receivables Subsidiary" means any wholly-owned Unrestricted Subsidiary
(regardless of the form thereof) of the Borrower formed solely for the purpose
of, and which engages in no other activities except those necessary for,
effecting Permitted Receivables Financings.

     "Reduction Portion" means, in respect of any reduction of Revolving
Commitments or Additional Incremental Revolving Commitments to be made pursuant
to Section 2.08(f) or (g), a fraction, the numerator of which is the aggregate
Revolving

                                       27

<PAGE>   48

Commitments and Additional Incremental Revolving Commitments of any Class
subject to reduction under such Section on account of Excess Cash Flow or the
applicable type of Prepayment Event, as the case may be (whether or not such
Commitments are actually to be reduced on account of such Prepayment Event or
Excess Cash Flow), and the denominator of which is the sum of such aggregate
Commitments and the aggregate principal amount of Term Loans, Additional
Incremental Term Loans and Incremental Term Loans of any Class subject to
prepayment under Section 2.11(b) or 2.11(c) on account of Excess Cash Flow or
the applicable type of Prepayment Event, as the case may be (whether or not such
Loans are actually to be prepaid on account of such Prepayment Event or Excess
Cash Flow).

     "Register" has the meaning set forth in Section 10.04.

     "Related Parties" means, with respect to any specified Person, such
Person's affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's affiliates.

     "Reorganization" means the contribution to the Borrower by the Parent and
its subsidiaries (other than Holdings and the Subsidiaries) of its material
subsidiaries that hold interests in international communications projects (other
than Algar Telecom S.A. (formerly known as Lightel S.A.) and by Holdings of all
of its material subsidiaries (other than the Borrower and its subsidiaries), in
each case not previously held, directly or indirectly, by the Borrower.

     "Required Lenders" means, at any time, Lenders having outstanding Revolving
Exposures, Additional Incremental Revolving Loans, Term Loans, Incremental Term
Loans, Additional Incremental Term Loans and unused Commitments representing
more than 50% of the sum of the total outstanding Revolving Exposures,
Additional Incremental Revolving Loans, Term Loans, Incremental Term Loans,
Additional Incremental Term Loans and unused Commitments at such time.

     "Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
capital stock of Holdings, the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such shares of capital stock of
Holdings, the Borrower or any Subsidiary or any option, warrant or other right
to acquire any such shares of capital stock of Holdings, the Borrower or any
Subsidiary.

     "Restricted Subsidiary" means the Borrower and each other Subsidiary (other
than any Foreign Subsidiary) of Holdings that has not been designated as an
Unrestricted Subsidiary pursuant to and in compliance with Section 6.14. On the
Effective Date, all Subsidiaries (other than (i) each Structured Note Trust and
(ii) any Foreign Subsidiary) of Holdings are Restricted Subsidiaries.

                                       28

<PAGE>   49

     "Revolving Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the Revolving Commitments.

     "Revolving Commitment" means, with respect to each Lender, the commitment,
if any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit and Swingline Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Revolving Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.08 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 10.04. The amount of each
Lender's Revolving Commitment as of the Amendment No. 5 Effective Date is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Revolving Commitment, as applicable. The
initial aggregate amount of the Lenders' Revolving Commitments is $525,000,000.

     "Revolving Commitment Reduction Date" means September 30, 2002.

     "Revolving Exposure" means, with respect to any Lender at any time, the sum
of the outstanding principal amount of such Lender's Revolving Loans and its LC
Exposure and Swingline Exposure at such time.

     "Revolving Facility" means the Revolving Commitments and the Revolving
Loans hereunder.

     "Revolving Lender" means a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.

     "Revolving Loan" means a Loan made pursuant to clause (b) of Section 2.01.

     "Revolving Maturity Date" means the sixth anniversary of the Effective
Date.

     "Sale and Leaseback Transaction" has the meaning set forth in Section 6.06.

     "S&P" means Standard & Poor's Ratings Services, a division of the McGraw
Hill Companies.

     "Security Agreement" means the security agreement substantially in the form
of Exhibit K hereto among the Borrower, each Restricted Subsidiary and the
Administrative Agent entered into as of the Initial Collateral Date, as amended
from time to time.

     "Segment" means (i) with respect to the Borrower's and the other Restricted
Subsidiaries' intercity network, the through-portion of such network between two
local networks and (ii) with respect to a local network of the Borrower and the
other Restricted Subsidiaries, the entire through-portion of such network,
excluding the spurs which branch off the through-portion.

                                       29

<PAGE>   50

     "Senior Debt" means, at any date, without duplication, all Indebtedness
(other than Qualifying Borrower Indebtedness permitted under Section 6.01(p)) of
the Borrower and the other Restricted Subsidiaries that are subsidiaries of the
Borrower, determined on a consolidated basis at such date and the ADP
Outstandings at such date; provided that, for purposes of this definition, (i)
Indebtedness in respect of Hedging Agreements shall be equal to (A) the
aggregate net Mark-to-Market Valuation of all Hedging Agreements of the Borrower
and the Restricted Subsidiaries that are subsidiaries of the Borrower then
outstanding, to the extent that such aggregate net Mark-to-Market Valuation
constitutes a net obligation of the Borrower and such Restricted Subsidiaries
and (B) zero, if such aggregate net Mark-to-Market Valuation does not constitute
such a net obligation and (ii) Indebtedness in respect of Permitted Specified
Security Hedging Transactions shall be equal to (A) an amount equal to the
Mark-to-Market Valuation of such Permitted Specified Security Hedging
Transaction less the fair market value of the Specified Securities and related
contract rights securing such Permitted Specified Security Hedging Transaction,
if such amount is greater than zero and (B) zero, if such amount is not greater
than zero."

     "Senior Leverage Ratio" means, at any date, the ratio of (i) Senior Net
Debt at such date, to (ii) Adjusted EBITDA, for the period of four fiscal
quarters most recently ended on or prior to such date.

     "Senior Net Debt" means, at any date, Senior Debt at such date minus the
aggregate amount of all cash and Cash Equivalent Investments of the Borrower and
the other Restricted Subsidiaries that are subsidiaries of the Borrower
(excluding any cash and Cash Equivalent Investments that are blocked or
restricted so that they may not be used for general corporate purposes at such
date) in excess of $10,000,000 at such date.

     "Solutions" means Williams Communications Solutions, LLC, a Delaware
corporation, and its successors and assigns.

     "SPC" has the meaning set forth in Section 10.04(b)(2).

     "Specified Hedging Agreement" has the meaning set forth in Section 9.01.

     "Specified Indebtedness" has the meaning set forth in Section 6.07(b).

     "Specified Security" means publicly traded equity securities of actual or
prospective customers or vendors of the Borrower and its subsidiaries acquired
by the Borrower and its subsidiaries in connection with (or pursuant to
warrants, options or rights acquired in connection with) actual or prospective
commercial agreements with such customers or vendors; provided that securities
of the Borrower or any of its subsidiaries or Affiliates shall not constitute
Specified Securities.

     "Spin-Off" means the distribution by Parent to its shareholders of all or
substantially all of the capital stock of Holdings held by Parent substantially
on the terms described by the Borrower to the Lenders prior to the Amendment No.
4 Effective Date.

                                       30

<PAGE>   51

     "Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

     "Structured Note Bridge Indebtedness" means the Indebtedness permitted to
be incurred by Holdings pursuant to Section 6.01(t).

     "Structured Note Financing" means the issuance by the Structured Note Trust
of notes for cash Net Proceeds of up to $1,500,000,000 substantially on the
terms and conditions described by the Borrower in the "Term Sheet for Structured
Note" included as an attachment to the Borrower's Amendment Request distributed
to the Lenders on or prior to March 7, 2001 or otherwise approved by all the
Incremental Facility Arrangers (if any) and the Administrative Agent prior to
the issuance thereof.

     "Structured Note Trust" means WCG Note Trust and WCG Note Corp., Inc., each
of which is an Unrestricted Subsidiary created for the purpose of consummating
the Structured Note Financing and conducting no activities other than the
consummation of the Structured Note Financing and activities incidental thereto.

     "subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

     "Subsidiary" means any subsidiary of Holdings. For purposes of the
representations and warranties made herein on the Effective Date, the term
"Subsidiary" includes each of the Borrower and the other Restricted
Subsidiaries.

     "Subsidiary Designation" has the meaning set forth in Section 6.14.

                                       31

<PAGE>   52

     "Subsidiary Guarantee" means the Subsidiary Guarantee, substantially in the
form of Exhibit D, made by the Subsidiary Loan Parties in favor of the
Administrative Agent for the benefit of the Lenders, and any Supplements
thereto.

     "Subsidiary Loan Party" means any Restricted Subsidiary (other than the
Borrower) that is not a Foreign Subsidiary; provided that no Receivables
Subsidiary shall be a Subsidiary Loan Party for any purpose under the Loan
Documents.

     "Swingline Exposure" means, at any time, the aggregate principal amount of
all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposure at such time.

     "Swingline Lenders" means Bank of America and Chase, each in its capacity
as lender of Swingline Loans hereunder.

     "Swingline Loan" means a Loan made pursuant to Section 2.04.

     "Syndication Agent" means Chase, in its capacity as syndication agent
hereunder.

     "Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

     "Telecommunications Assets" means:

     (a)  any property (other than cash or Cash Equivalent Investments) to be
          owned or used by the Borrower or any other Restricted Subsidiary and
          used in the Telecommunications Business; and

     (b)  Equity Interests of a Person that becomes a Restricted Subsidiary as a
          result of the acquisition of such Equity Interests by the Borrower or
          any other Restricted Subsidiary from any Person other than an
          Affiliate of Holdings or the Borrower; provided that such Person is
          primarily engaged in the Telecommunications Business.

     "Telecommunications Business" means the business of:

     (a)  transmitting, or providing services relating to the transmission of,
          voice, video or data through owned or leased transmission facilities
          or the right to use such facilities;

     (b)  constructing, acquiring, creating, developing, operating, managing or
          marketing communications networks, related network transmission
          equipment, software and other devices for use in a communications
          business;

                                       32

<PAGE>   53

     (c)  computer outsourcing, data center management, computer systems
          integration, reengineering of computer software for any purpose,
          including, without limitation, for the purposes of porting computer
          software from one operating environment or computer platform to
          another or to address issues commonly referred to as "Year 2000
          issues";

     (d)  constructing, managing or operating fiber optic telecommunications
          networks and leasing capacity on those networks to third parties;

     (e)  the sale, resale, installation or maintenance of communications
          systems or equipment; or

     (f)  evaluating, participating in or pursuing any other activity or
          opportunity that is primarily related to those identified in (a), (b),
          (c), (d) or (e) above;

provided that the determination of what constitutes a Telecommunications
Business shall be made in good faith by the Board of Directors of Holdings.

     "Term Amortization Date" means September 30, 2002.

     "Term Commitment" means, with respect to each Lender, the commitment, if
any, of such Lender to make Term Loans hereunder during the Term Loan
Availability Period, expressed as an amount representing the maximum principal
amount of the Term Loans to be made by such Lender hereunder, as such commitment
may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The amount of each Lender's Term Commitment as of the
Amendment No. 5 Effective Date is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Term Commitment, as applicable. The initial aggregate amount of the Lenders'
Term Commitments is $525,000,000.

     "Term Commitment Termination Date" means September 8, 2000.

     "Term Facility" means the Term Commitments and the Term Loans hereunder.

     "Term Lender" means a Lender with a Term Commitment or an outstanding Term
Loan.

     "Term Loan" means a Loan made pursuant to Section 2.01(a)(i).

     "Term Loan Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Term Commitment Termination
Date and the date of termination of the Term Commitments.

     "Term Maturity Date" means September 30, 2006.

                                       33

<PAGE>   54

     "Total Debt" means, at any date, without duplication, the sum of all
Indebtedness of Holdings and the Restricted Subsidiaries, determined on a
consolidated basis at such date, and the ADP Outstandings at such date, provided
that, for purposes of this definition, (i) Indebtedness in respect of Hedging
Agreements shall be equal to (A) the aggregate net Mark-to-Market Valuation of
all Hedging Agreements of Holdings and the Restricted Subsidiaries then
outstanding, to the extent that such aggregate net Mark-to- Market Valuation
constitutes a net obligation of the Borrower and such Restricted Subsidiaries
and (B) zero, if such aggregate net Mark-to-Market Valuation does not constitute
such a net obligation and (ii) Indebtedness in respect of Permitted Specified
Security Hedging Transactions shall be equal to (A) an amount equal to the
Market-to- Market Valuation of such Permitted Specified Security Hedging
Transaction less the fair market value of the Specified Securities and related
contract rights securing such Permitted Specified Security Hedging Transaction,
if such amount is greater than zero and (B) zero, if such amount is not greater
than zero.

     "Total Leverage Ratio" means, at any date, the ratio of (i) Total Net Debt
at such date to (ii) Adjusted EBITDA for the period of four fiscal quarters most
recently ended on or prior to such date.

     "Total Net Debt" means, at any date, Total Debt at such date, minus the
aggregate amount of all cash and Cash Equivalent Investments of Holdings and the
Restricted Subsidiaries (excluding any cash and Cash Equivalent Investments that
are blocked or restricted so that they may not be used for general corporate
purposes at such date) in excess of $10,000,000 at such date.

     "Total Net Debt to Contributed Capital Ratio" means, at any date, the ratio
of (i) Total Net Debt at such date to (ii) Contributed Capital at such date.

     "Trading Subsidiary" has the meaning assigned to such term in Section
6.03(c).

     "Transactions" means the execution, delivery and performance by each Loan
Party of the Loan Documents to which it is to be a party, the borrowing of
Loans, the use of the proceeds thereof and the issuance of Letters of Credit
hereunder.

     "Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to an Adjusted LIBO Rate or the Alternate Base Rate.

     "Unrestricted Subsidiary" means (i) any Subsidiary (other than the
Borrower) that is designated by the Board of Directors of Holdings as an
Unrestricted Subsidiary in accordance with Section 6.14, and (ii) each
Structured Note Trust.

     "Voting Stock" means, with respect to any Person, capital stock issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person,

                                       34

<PAGE>   55

whether or not the right so to vote has been suspended by the happening of such
a contingency.

     "Weighted Average Life to Maturity" means, on any date and with respect to
the Revolving Commitments, the Term Loans, any Additional Incremental Revolving
Commitments of any Class, any Incremental Term Loans, any Additional Incremental
Term Loans of any Class or any other Indebtedness or commitments to provide
financing, an amount equal to (i) the sum, for each scheduled repayment of Term
Loans, Additional Incremental Term Loans or Incremental Term Loans of such Class
or of such Indebtedness, as the case may be, to be made after such date, or each
scheduled reduction of Revolving Commitments or Additional Incremental Revolving
Commitments of such Class or other commitments to provide financing, as the case
may be, to be made after such date, of the amount of such scheduled repayment or
reduction multiplied by the number of days from such date to the date of such
scheduled prepayment or reduction divided by (ii) the aggregate principal amount
of such Term Loans, Additional Incremental Term Loans or Incremental Term Loans
or of such Indebtedness, as the case may be, or such Revolving Commitments or
Additional Incremental Revolving Commitments or other commitments to provide
financing, as the case may be.

     "Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

     SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g., a
"Eurodollar Revolving Loan"). Borrowings also may be classified and referred to
by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurodollar
Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving Borrowing").

     SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same

                                       35

<PAGE>   56

meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

     SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

                                    ARTICLE 2
                                   THE CREDITS

     SECTION 2.01. Commitments. Subject to the terms and conditions set forth
herein, (a) each Lender agrees (i) to make Term Loans to the Borrower from time
to time during the Term Loan Availability Period in a principal amount not
exceeding its Term Commitment, if any, (ii) to make Revolving Loans to the
Borrower from time to time during the Revolving Availability Period in an
aggregate principal amount that will not result in such Lender's Revolving
Exposure exceeding such Lender's Revolving Commitment, if any, (iii) to make
Additional Incremental Term Loans to the Borrower under any Additional
Incremental Facility during the period or on the date set forth in the
applicable Additional Incremental Facility Agreement in a principal amount not
exceeding its Additional Incremental Commitment in respect of such Additional
Incremental Facility, if any, and (iv) to make Additional Incremental Revolving
Loans to the Borrower under any Additional Incremental Facility during the
period set forth in the applicable Additional Incremental Facility Agreement in
a principal amount not exceeding at any time its Additional Incremental
Revolving Commitment in respect of such Additional Incremental Facility, if any,
(b) each Incremental Tranche A Lender agrees to make Incremental Tranche A Term
Loans to the Borrower from time to time during the Incremental Tranche A Term
Loan Availability Period in a principal amount not exceeding its Incremental
Tranche A Commitment, provided that the initial Borrowing under the Incremental
Tranche A Facility shall be in an aggregate amount not less than $225,000,000
and shall occur on the First Incremental Borrowing Date. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Revolving Loans and Additional Incremental
Revolving Loans. Amounts repaid in respect of Term Loans, Incremental Term Loans
or Additional Incremental Term Loans may not be reborrowed.

                                       36

<PAGE>   57

     SECTION 2.02. Loans and Borrowings. (a) Each Loan (other than a Swingline
Loan) shall be made as part of a Borrowing consisting of Loans of the same Class
and Type made by the Lenders ratably in accordance with their respective
Commitments of the applicable Class. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.

     (b) Subject to Section 2.14, each Revolving Borrowing, Term Borrowing,
Additional Incremental Revolving Borrowing, Additional Incremental Term
Borrowing and Incremental Term Borrowing shall be comprised entirely of ABR
Loans or Eurodollar Loans as the Borrower may request in accordance herewith.
Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.

     (c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing (w) if a Revolving Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $10,000,000,
(x) if a Term Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $50,000,000 (y) if an Incremental Term
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $10,000,000 or (z) if an Additional Incremental
Term Borrowing or an Additional Incremental Revolving Borrowing shall be in
aggregate amounts that are permitted under the applicable Incremental Facility
Agreement. At the time that each ABR Borrowing is made, such Borrowing (w) if a
Revolving Borrowing shall be in an aggregate amount that is an integral multiple
of $1,000,000 and not less than $5,000,000, (x) if a Term Borrowing shall be in
an aggregate amount that is an integral multiple of $1,000,000 and not less than
$50,000,000 (y) if an Incremental Term Borrowing shall be in an aggregate amount
that is an integral multiple of $1,000,000 and not less than $10,000,000 or (z)
if an Additional Incremental Term Borrowing or an Additional Incremental
Revolving Borrowing shall be in aggregate amounts that are permitted under the
applicable Incremental Facility Agreement; provided that (i) an ABR Revolving
Borrowing or ABR Additional Incremental Revolving Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the total
Revolving Commitments or Additional Incremental Revolving Commitments of the
applicable Class, as the case may be, (ii) an ABR Revolving Borrowing may be in
an aggregate amount that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e) and (iii) an ABR Term Borrowing,
ABR Incremental Term Borrowing or ABR Additional Incremental Term Borrowing may
be in an aggregate amount that is equal to the entire unused balance of the
total Term Commitments, Incremental Term Commitments, Additional Incremental
Term Commitments of the applicable Class, as the case may be. Each Swingline
Loan shall be in an amount that is an integral multiple of $1,000,000 and not
less than $5,000,000. Borrowings of more than one Type and Class may be

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<PAGE>   58

outstanding at the same time; provided that there shall not at any time be more
than a total of 10 Eurodollar Borrowings outstanding.

     (d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Maturity Date, the Term Maturity Date, the Incremental Tranche A
Maturity Date or the maturity date set forth in the applicable Additional
Incremental Facility Agreement, as applicable.

     SECTION 2.03. Requests for Borrowings. To request a Borrowing (other than a
Swingline Borrowing), the Borrower shall notify the Administrative Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., Dallas, Texas time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00
a.m., Dallas, Texas time, one Business Day before the date of the proposed
Borrowing; provided that any such notice of an ABR Revolving Borrowing to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.05(e) may be given not later than 10:00 a.m., Dallas, Texas time, on the date
of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request substantially in the form of
Exhibit B hereto and signed by the Borrower. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:

          (i) whether the requested Borrowing is to be a Revolving Borrowing,
     Term Borrowing, Incremental Tranche A Term Borrowing, Additional
     Incremental Revolving Borrowing or Additional Incremental Term Borrowing
     and, in the case of Additional Incremental Revolving Borrowings and
     Additional Incremental Term Borrowings, the Additional Incremental Facility
     under which such Borrowing is to be made;

          (ii) the aggregate amount of such Borrowing;

          (iii) the date of such Borrowing, which shall be a Business Day;

          (iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
     Borrowing;

          (v) in the case of a Eurodollar Borrowing, the initial Interest Period
     to be applicable thereto, which shall be a period contemplated by the
     definition of the term "Interest Period"; and

          (vi) the location and number of the Borrower's account to which funds
     are to be disbursed, which shall comply with the requirements of Section
     2.06.

     If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to

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<PAGE>   59

any requested Eurodollar Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. Promptly following receipt
of a Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.

     SECTION 2.04. Swingline Loans. (a) Subject to the terms and conditions set
forth herein, the Swingline Lenders each agree to make Swingline Loans to the
Borrower from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Swingline Loans of either
Swingline Lender exceeding $25,000,000 or (ii) the sum of the total Revolving
Exposures exceeding the total Revolving Commitments; provided that neither
Swingline Lender shall be required to make a Swingline Loan to refinance an
outstanding Swingline Loan. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, prepay and reborrow
Swingline Loans.

     (b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 12:00 noon, Dallas, Texas time, on the day of a proposed Swingline
Loan and shall advise the Administrative Agent as to which Swingline Lender the
Borrower desires to provide such Swingline Loan. Each such notice shall be
irrevocable and shall specify the requested date (which shall be a Business Day)
and amount of the requested Swingline Loan. The Administrative Agent will
promptly advise the Swingline Lender indicated by the Borrower in such notice of
any such notice received from the Borrower. The applicable Swingline Lender
shall make such Swingline Loan available to the Borrower by means of a credit to
the general deposit account of the Borrower with such Swingline Lender (or, in
the case of a Swingline Loan made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e), by remittance to the applicable
Issuing Bank) by 3:00 p.m., Dallas, Texas time, on the requested date of such
Swingline Loan.

     (c) The applicable Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., Dallas, Texas time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of its Swingline Loans outstanding. Such notice
shall specify the aggregate amount of Swingline Loans in which Revolving Lenders
will participate. Promptly upon receipt of such notice, the Administrative Agent
will give notice thereof to each Revolving Lender, specifying in such notice
such Lender's Applicable Percentage of such Swingline Loan or Loans. Each
Revolving Lender hereby absolutely and unconditionally agrees, upon receipt of
notice as provided above, to pay to the Administrative Agent, for the account of
the applicable Swingline Lender, such Lender's Applicable Percentage of such
Swingline Loan or Loans. Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations in Swingline Loans pursuant to this
paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement,

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<PAGE>   60

withholding or reduction whatsoever. Each Revolving Lender shall comply with its
obligation under this paragraph by wire transfer of immediately available funds,
in the same manner as provided in Section 2.06 with respect to Loans made by
such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the applicable Swingline Lender the amounts so received by it
from the Revolving Lenders. The Administrative Agent shall notify the Borrower
of any participations in any Swingline Loan acquired pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the applicable Swingline Lender. Any amounts
received by a Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan made by such Swingline Lender after
receipt by such Swingline Lender of the proceeds of a sale of participations
therein shall be promptly remitted to the Administrative Agent; any such amounts
received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Revolving Lenders that shall have made their
payments pursuant to this paragraph and to the applicable Swingline Lender, as
their interests may appear. The purchase of participations in a Swingline Loan
pursuant to this paragraph shall not relieve the Borrower of any default in the
payment thereof.

     SECTION 2.05. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the applicable Issuing Bank, at any time and from time
to time during the Revolving Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.

     (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank from whom the
Borrower is requesting such Letter of Credit and to the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with Section 2.05(c)), the amount of such Letter of Credit, the
name and address of the beneficiary thereof and such other information as shall
be necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by the applicable Issuing Bank, the Borrower also shall submit a
letter of credit application on such Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and

                                       40

<PAGE>   61

warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the LC Exposure shall not exceed $350,000,000 and (ii) the total
Revolving Exposures shall not exceed the total Revolving Commitments.

     (c) Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension), provided that a Letter of
Credit may include customary "evergreen" provisions and (ii) the date that is
five Business Days prior to the Revolving Maturity Date.

     (d) Participations. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the applicable Issuing Bank or the Lenders, the applicable
Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender
hereby acquires from such Issuing Bank, a participation in such Letter of Credit
equal to such Lender's Applicable Percentage of the aggregate amount available
to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Revolving Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of such Issuing Bank,
such Lender's Applicable Percentage of each LC Disbursement made by such Issuing
Bank and not reimbursed by the Borrower on the date due as provided in paragraph
Section 2.05(e), or of any reimbursement payment required to be refunded to the
Borrower for any reason. Each Lender acknowledges and agrees that its obligation
to acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.

     (e) Reimbursement. If an Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Administrative Agent an amount equal to such LC Disbursement
not later than 1:00 p.m., Dallas, Texas time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 9:30 a.m., Dallas, Texas time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 1:00 p.m., Dallas, Texas time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to 9:30
a.m., Dallas, Texas time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that,
if such LC Disbursement is not less than $5,000,000, the Borrower may, subject
to the conditions to borrowing set forth herein, request in accordance with
Section 2.03 or 2.04 that such payment be financed with an ABR Revolving
Borrowing or Swingline Loan in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan.

                                       41

<PAGE>   62

If the Borrower fails to make such payment when due, the Administrative Agent
shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Revolving Lender shall pay to the Administrative Agent its Applicable Percentage
of the payment then due from the Borrower, in the same manner as provided in
Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall
apply, mutatis mutandis, to the payment obligations of the Revolving Lenders),
and the Administrative Agent shall promptly pay to the applicable Issuing Bank
the amounts so received by it from the Revolving Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant to
this paragraph, the Administrative Agent shall distribute such payment to the
applicable Issuing Bank or, to the extent that Revolving Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Bank, then to such
Lenders and the applicable Issuing Bank as their interests may appear. Any
payment made by a Revolving Lender pursuant to this paragraph to reimburse the
applicable Issuing Bank for any LC Disbursement (other than the funding of ABR
Revolving Loans or a Swingline Loan as contemplated above) shall not constitute
a Loan and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.

     (f) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph Section 2.05(e) shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor either Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse an
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Issuing Bank's failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in

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<PAGE>   63

the absence of gross negligence or wilful misconduct on the part of an Issuing
Bank (as finally determined by a court of competent jurisdiction), each Issuing
Bank shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.

     (g) Disbursement Procedures. The applicable Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The applicable Issuing Bank shall
promptly notify the Administrative Agent and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether the Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse such Issuing Bank and the Revolving Lenders with respect
to any such LC Disbursement.

     (h) Interim Interest. If an Issuing Bank shall make any LC Disbursement,
then, unless the Borrower shall reimburse such LC Disbursement in full on the
date such LC Disbursement is made, the unpaid amount thereof shall bear
interest, for each day from and including the date such LC Disbursement is made
to but excluding the date that the Borrower reimburses such LC Disbursement, at
the rate per annum then applicable to ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to Section
2.05(e), then Section 2.13(c) shall apply. Interest accrued pursuant to this
paragraph shall be for the account of the applicable Issuing Bank, except that
interest accrued on and after the date of payment by any Revolving Lender
pursuant to Section 2.05(e) to reimburse the applicable Issuing Bank shall be
for the account of such Lender to the extent of such payment.

     (i) Replacement of the Issuing Bank. An Issuing Bank may be replaced at any
time by written agreement among the Borrower, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of an Issuing Bank. At the time
any such replacement shall become effective, the Borrower shall pay all unpaid
fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.12(b). From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of an Issuing
Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor, to any other Issuing Bank or to any previous Issuing
Bank, or to such successor, all other Issuing Banks and all previous Issuing
Banks, as the context shall require. After the replacement of an Issuing Bank
hereunder, the replaced Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations

                                       43

<PAGE>   64

of an Issuing Bank under this Agreement with respect to Letters of Credit issued
by it prior to such replacement, but shall not be required to issue additional
Letters of Credit.

     (j) Cash Collateralization. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to 105% of the LC Exposure as of
such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in Section 7.01(h) or 7.01(i). Each such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the applicable
Issuing Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of
Revolving Lenders with LC Exposure representing greater than 50% of the total LC
Exposure), be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.

     SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 1:00 p.m., Dallas, Texas time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders; provided that Swingline Loans shall be made as provided
in Section 2.04. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in Dallas,
Texas and designated by the Borrower in the applicable Borrowing Request;
provided that ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.05(e) shall be remitted by the
Administrative Agent to the applicable Issuing Bank.

                                       44

<PAGE>   65

     (b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.06(a) and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to ABR Loans. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender's Loan included in such
Borrowing.

     SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing, Additional
Incremental Revolving Borrowing, Term Borrowing, Incremental Term Borrowing and
Additional Incremental Term Borrowing initially shall be of the Type specified
in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower
may elect different options with respect to different portions of a Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.

     (b) To make an election pursuant to this Section, the Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.

     (c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02 and Section 2.07(f):

          (i) the Borrowing to which such Interest Election Request applies and,
     if different options are being elected with respect to different portions
     thereof, the portions thereof to be allocated to each resulting Borrowing
     (in which case the

                                       45

<PAGE>   66
     information to be specified pursuant to clauses (iii) and (iv) below shall
     be specified for each resulting Borrowing);

          (ii) the effective date of the election made pursuant to such Interest
     Election Request, which shall be a Business Day;

          (iii) whether the resulting Borrowing is to be an ABR Borrowing or a
     Eurodollar Borrowing; and

          (iv) if the resulting Borrowing is a Eurodollar Borrowing, the
     Interest Period to be applicable thereto after giving effect to such
     election, which shall be a period contemplated by the definition of the
     term "Interest Period".

     If any such Interest Election Request requests a Eurodollar Borrowing but
does not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.

     (d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each applicable Lender of the details thereof
and of such Lender's portion of each resulting Borrowing.

     (e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.

     (f) A Borrowing of any Class may not be converted to or continued as a
Eurodollar Borrowing if after giving effect thereto (i) the Interest Period
therefor would commence before and end after a date on which any principal of
the Loans of such Class is scheduled to be repaid and (ii) the sum of the
aggregate principal amount of outstanding Eurodollar Borrowings of such Class
with Interest Periods ending on or prior to such scheduled repayment date plus
the aggregate principal amount of outstanding ABR Borrowings of such Class would
be less than the aggregate principal amount of Loans of such Class required to
be repaid on such scheduled repayment date.

     SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
previously terminated, (i) the Term Commitments shall terminate on the Term
Commitment Termination Date, (ii) the Revolving Commitments shall terminate on
the Revolving Maturity Date, (iii) the Incremental Tranche A Commitments shall
terminate on the Incremental Tranche A Commitment Termination Date and (iv) the
Additional

                                       46

<PAGE>   67

Incremental Commitments of any Class shall terminate on the date set forth in
the applicable Additional Incremental Facility Agreement.

     (b) Subject to adjustment pursuant to Section 2.08(h), the Revolving
Commitments outstanding on the Revolving Commitment Reduction Date shall be
automatically and permanently reduced in 12 consecutive installments on the last
day of each fiscal quarter (except with respect to the final reduction, which
shall be on the Revolving Maturity Date) set forth below in the percentage
amounts (expressed as a percentage of the aggregate amount of Revolving
Commitments outstanding on the Revolving Commitment Reduction Date) set forth
opposite such quarterly scheduled reduction date (or the Revolving Maturity
Date) below; provided that the final installment shall reduce the remaining
outstanding Revolving Commitments to zero on the Revolving Maturity Date and the
payment made in respect thereof shall equal the sum of (x) the then aggregate
unpaid principal amount of all Revolving Loans plus (y) all other unpaid amounts
owing in respect of Revolving Loans, which payment shall be due and payable not
later than the Revolving Maturity Date:

<TABLE>
<CAPTION>
            Scheduled Reduction Date                Commitment Reduction
            ------------------------                --------------------
<S>                                                 <C>
                4th Quarter 2002                            5.00%
                1st Quarter 2003                            5.00%
                2nd Quarter 2003                            5.00%
                3rd Quarter 2003                            5.00%

                4th Quarter 2003                            7.50%
                1st Quarter 2004                            7.50%
                2nd Quarter 2004                            7.50%
                3rd Quarter 2004                            7.50%

                4th Quarter 2004                           12.50%
                1st Quarter 2005                           12.50%
                2nd Quarter 2005                           12.50%
            Revolving Maturity Date                        12.50%
</TABLE>

     (c) Subject to adjustment pursuant to Section 2.08(h), the Additional
Incremental Revolving Commitments of any Class shall be automatically and
permanently reduced on the scheduled dates, and in the scheduled amounts, if
any, set forth in the applicable Additional Incremental Facility Agreement.

     (d) The Borrower may at any time terminate, or from time to time reduce,
the Commitments of any Class; provided that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$1,000,000 and not less than $10,000,000, (ii) the Borrower shall not terminate
or reduce the Revolving Commitments if, after giving effect to any concurrent
prepayment of the Revolving Loans in accordance with Section 2.11, the sum of
the Revolving Exposures would exceed the total Revolving Commitments and (iii)
the Borrower shall not terminate or reduce the Additional

                                       47

<PAGE>   68

Incremental Revolving Commitments of any Class if, after giving effect to any
concurrent prepayment of Additional Incremental Revolving Loans of such Class in
accordance with Section 2.11, the aggregate principal amount of outstanding
Additional Incremental Revolving Loans of such Class would exceed the total
Additional Incremental Revolving Commitments of such Class.

     (e) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under Section 2.08(d) at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Revolving
Commitments or the Additional Incremental Revolving Commitments of any Class
delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments of any Class shall be permanent.
Each reduction of the Commitments of any Class shall be made ratably among the
Lenders in accordance with their respective Commitments of such Class.

     (f) In the event and on each occasion that any Net Proceeds in excess of
$5,000,000 are received by or on behalf of Holdings or any Subsidiary in respect
of any Prepayment Event, there shall be a pro rata reduction of Revolving
Commitments, Term Borrowings, Incremental Tranche A Borrowings and, if provided
for in the applicable Additional Incremental Facility Agreement, Additional
Incremental Revolving Commitments and Additional Incremental Term Borrowings as
provided in this Section 2.08(f) and in Section 2.11(b). In such event, the
Revolving Commitments and, if provided for in the applicable Additional
Incremental Facility Agreement, Additional Incremental Revolving Commitments
shall, on the third Business Day after such Net Proceeds are received, be
automatically and permanently reduced in an aggregate amount equal to the
product of 100% (or, in the case of any Prepayment Event referred to in clause
(c) of the definition of Prepayment Event, if, on the date on which any
reduction would otherwise be made in respect of such Prepayment Event either (i)
the Facilities shall be rated not lower than BBB- by S&P and Baa3 by Moody's or
(ii) the Total Leverage Ratio as of such date is less than 3.5 to 1.0, 50%) of
such Net Proceeds and the Reduction Portion in respect of such Prepayment Event;
provided that, in the case of any event described in clause (a) or (c) of the
definition of Prepayment Event, if the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer to the effect that the
Borrower intends to apply the Net Proceeds from such event (or a portion thereof
specified in such certificate) to invest in the Telecommunications Business of
the Borrower and the other Restricted Subsidiaries within 360 days of the
receipt thereof and certifying that no Default has occurred and is continuing,
then no reduction shall be required pursuant to this paragraph in respect of the
Net Proceeds in respect of such event (or the portion of such Net Proceeds
specified in such certificate, if applicable) except to the extent of any such
Net Proceeds therefrom that have not been so

                                      48

<PAGE>   69

applied by the end of such period, at which time a reduction shall be required
in accordance with this paragraph (f).

     (g) Following the end of each fiscal year of the Borrower, commencing with
the fiscal year ending December 31, 2002, the Revolving Commitments and, if
provided for in the applicable Additional Incremental Facility Agreement,
Additional Incremental Revolving Commitments shall be automatically and
permanently reduced in an aggregate amount equal to the product of 50% of Excess
Cash Flow for such fiscal year and the Reduction Portion in respect of such
Excess Cash Flow; provided that if, on the date on which any reduction would
otherwise be made pursuant to this Section 2.08(g), either (i) the Facilities
shall be rated not lower than BBB- by S&P and Baa3 by Moody's or (ii) the Total
Leverage Ratio as of such date is less than 3.5 to 1.0, no such reduction shall
be required pursuant to this Section 2.08(g). Each reduction pursuant to this
paragraph shall be made on the date on which financial statements are delivered
pursuant to Section 5.01 with respect to the fiscal year for which Excess Cash
Flow is being calculated (and in any event within 90 days after the end of such
fiscal year).

     (h) Any reduction of the Revolving Commitments, other than a reduction
pursuant to Section 2.08(a) or 2.08(b) above, shall be applied to reduce the
subsequent scheduled reductions of Revolving Commitments to be made pursuant to
Section 2.08(a) or 2.08(b) above in reverse chronological order. Any reduction
of the Additional Incremental Revolving Commitments of any Class, other than a
reduction pursuant to Section 2.08(a) or 2.08(c) above, shall be applied to
reduce the subsequent scheduled reductions of Additional Incremental Revolving
Commitments of such Class to be made pursuant to Section 2.08(a) or 2.08(c) as
set forth in the applicable Additional Incremental Facility Agreement.

     SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each applicable Lender the then unpaid principal amount of each Revolving
Loan of such Lender on the Revolving Maturity Date, (ii) to the Administrative
Agent for the account of each applicable Lender the then unpaid principal amount
of each Term Loan of such Lender as provided in Section 2.10, (iii) to the
Administrative Agent for the account of each applicable Incremental Lender the
then unpaid principal amount of each Incremental Tranche A Term Loan of such
Incremental Lender as set forth in Section 2.10, (iv) to the Administrative
Agent for the account of each applicable Lender the then unpaid principal amount
of each Additional Incremental Loan of any Class of such Lender as set forth in
the applicable Additional Incremental Facility Agreement and (v) to each
Swingline Lender the then unpaid principal amount of each Swingline Loan made by
it on the earlier of the Revolving Maturity Date and the first date after such
Swingline Loan is made that is the 15th or last day of a calendar month and is
at least two Business Days after such Swingline Loan is made.

     (b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from

                                       49

<PAGE>   70

each Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.

     (c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.

     (d) The entries made in the accounts maintained pursuant to Section 2.09(b)
and 2.09(c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

     (e) No promissory notes evidencing Loans hereunder will be issued unless a
Lender requests that a promissory note be issued to it to evidence its Loans of
any Class. In such event, the Borrower shall prepare, execute and deliver to
such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).

     SECTION 2.10. Amortization of Term Loans and Incremental Term Loans. (a)
Subject to adjustment pursuant to Section 2.10(e), the Borrower shall repay Term
Borrowings outstanding on the Term Amortization Date in 16 consecutive
installments of principal, each of which will be due and payable on the last day
of each fiscal quarter (except with respect to the final installment, which
shall be on the Term Maturity Date) set forth below in the percentage amounts
(expressed as a percentage of the aggregate amount of Term Loans outstanding on
the Term Commitment Termination Date) set forth opposite such quarterly
installment date (or the Term Maturity Date) below; provided that the final
installment shall equal the sum of (x) the then aggregate unpaid principal
amount of all Term Loans plus (y) all other unpaid amounts owing in respect of
Term Loans and shall be due and payable not later than the Term Maturity Date:

                                       50

<PAGE>   71

<TABLE>
<CAPTION>
                   Payment Date                              Amount
                   ------------                              ------
<S>                                                          <C>
                 4th Quarter 2002                             3.75%
                 1st Quarter 2003                             3.75%
                 2nd Quarter 2003                             3.75%
                 3rd Quarter 2003                             3.75%

                 4th Quarter 2003                             6.25%
                 1st Quarter 2004                             6.25%
                 2nd Quarter 2004                             6.25%
                 3rd Quarter 2004                             6.25%

                 4th Quarter 2004                             7.50%
                 1st Quarter 2005                             7.50%
                 2nd Quarter 2005                             7.50%
                 3rd Quarter 2005                             7.50%

                 4th Quarter 2005                             7.50%
                 1st Quarter 2006                             7.50%
                 2nd Quarter 2006                             7.50%
                Term Maturity Date                            7.50%
</TABLE>

     (b) Subject to adjustment pursuant to Section 2.10(e), the Borrower shall
repay Incremental Tranche A Borrowings outstanding on the Incremental Tranche A
Amortization Date in 16 consecutive installments of principal, each of which
will be due and payable on the last day of each fiscal quarter (except with
respect to the final installment, which shall be on the Incremental Tranche A
Maturity Date) set forth below in the percentage amounts (expressed as a
percentage of the aggregate amount of Incremental Tranche A Term Loans
outstanding on the Incremental Tranche A Commitment Termination Date) set forth
opposite such quarterly installment date (or the Incremental Tranche A Maturity
Date) below; provided that the final installment shall equal the sum of (x) the
then aggregate unpaid principal amount of all Incremental Tranche A Term Loans
plus (y) all other unpaid amounts owing in respect of the Incremental Tranche A
Term Loans, and shall be due and payable not later than the Incremental Tranche
A Maturity Date:

<TABLE>
<CAPTION>
                   Payment Date                              Amount
                   ------------                              ------
<S>                                                          <C>
                 4th Quarter 2002                             3.75%
                 1st Quarter 2003                             3.75%
                 2nd Quarter 2003                             3.75%
                 3rd Quarter 2003                             3.75%
</TABLE>

                                       51

<PAGE>   72
<TABLE>
<CAPTION>
                   Payment Date                              Amount
                   ------------                              ------
<S>                                                          <C>
                 4th Quarter 2003                             6.25%
                 1st Quarter 2004                             6.25%
                 2nd Quarter 2004                             6.25%
                 3rd Quarter 2004                             6.25%

                 4th Quarter 2004                             7.50%
                 1st Quarter 2005                             7.50%
                 2nd Quarter 2005                             7.50%
                 3rd Quarter 2005                             7.50%

                 4th Quarter 2005                             7.50%
                 1st Quarter 2006                             7.50%
                 2nd Quarter 2006                             7.50%
               Incremental Tranche
                 A Maturity Date                              7.50%
</TABLE>

     (c) Subject to adjustment pursuant to Section 2.10(e), the Borrower shall
repay Additional Incremental Term Borrowings of any Class on the scheduled
dates, and in the scheduled amounts, if any, set forth in the applicable
Additional Incremental Facility Agreement.

     (d) To the extent not previously paid, all Term Loans shall be due and
payable on the Term Maturity Date, all Revolving Loans shall be due and payable
on the Revolving Maturity Date, all Incremental Tranche A Term Loans shall be
due and payable on the Incremental Tranche A Maturity Date and all Additional
Incremental Loans of any Class shall be due and payable on the final maturity
date set forth in the applicable Additional Incremental Facility Agreement.

     (e) Any prepayment of a Term Borrowing or an Incremental Term Borrowing
shall be applied to reduce the subsequent scheduled repayments of Term
Borrowings or Incremental Term Borrowings, respectively to be made pursuant to
this Section in reverse chronological order. Any prepayment of an Additional
Incremental Term Borrowing of any Class shall be applied to reduce the
subsequent scheduled repayment of Additional Incremental Term Borrowings of such
Class to be made pursuant to this Section as set forth in the applicable
Additional Incremental Facility Agreement.

     (f) Prior to any repayment of any Term Borrowings or Incremental Term
Borrowings hereunder or any Additional Incremental Term Borrowings of any Class,
the Borrower shall select the Borrowing or Borrowings of such Class to be repaid
and shall notify the Administrative Agent by telephone (confirmed by telecopy)
of such selection not later than 11:00 a.m., Dallas, Texas time, three Business
Days before the scheduled date of such repayment; provided that each repayment
of Term Borrowings or Incremental Term Borrowings or any Additional Incremental
Term Borrowings of any Class shall be applied to repay any outstanding ABR Term
Borrowings or ABR

                                       52

<PAGE>   73

Incremental Term Borrowings or ABR Additional Incremental Term Borrowings of
such Class before any other Borrowings of such Class. Each repayment of a
Borrowing shall be applied ratably to the Loans included in the repaid
Borrowing. Repayments of Term Borrowings, Incremental Term Borrowings and
Additional Incremental Term Borrowings shall be accompanied by accrued interest
on the amount repaid.

     SECTION 2.11. Prepayment of Loans. (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to the requirements of this Section. All prepayments shall be made
without premium or penalty other than, to the extent applicable, amounts payable
under Section 2.16.

     (b) In the event and on each occasion that any Net Proceeds in excess of
$5,000,000 are received by or on behalf of Holdings or any Subsidiary in respect
of any Prepayment Event, there shall be a pro rata reduction of Revolving
Commitments, Term Borrowings, Incremental Tranche A Borrowings, and if provided
for in the applicable Additional Incremental Facility Agreement, Additional
Incremental Revolving Commitments and Additional Incremental Term Borrowings as
provided in this Section 2.11(b) and in Section 2.08(f). In such event, the
Borrower shall, within three Business Days after such Net Proceeds are received,
prepay Term Borrowings, Incremental Tranche A Borrowings and, if provided for in
the applicable Additional Incremental Facility Agreement, Additional Incremental
Term Borrowings in an aggregate amount equal to the product of 100% (or, in the
case of any Prepayment Event referred to in clause (c) of the definition of
Prepayment Event, if, on the date on which any prepayment would otherwise be
made in respect of such Prepayment Event either (i) the Facilities shall be
rated not lower than BBB- by S&P and Baa3 by Moody's or (ii) the Total Leverage
Ratio as of such date is less than 3.5 to 1.0, 50%) of such Net Proceeds and the
Prepayment Portion in respect of such Prepayment Event (such product, the
"Prepayment Amount"); provided that, in the case of any event described in
clause (a) or (c) of the definition of Prepayment Event, if the Borrower shall
deliver to the Administrative Agent a certificate of a Financial Officer to the
effect that the Borrower intends to apply the Net Proceeds from such event (or a
portion thereof specified in such certificate) to invest in the
Telecommunications Business of the Borrower and the other Restricted
Subsidiaries within 360 days of the receipt thereof and certifying that no
Default has occurred and is continuing, then no prepayment shall be required
pursuant to this paragraph in respect of the Net Proceeds in respect of such
event (or the portion of such Net Proceeds specified in such certificate, if
applicable) except to the extent of any such Net Proceeds therefrom that have
not been so applied by the end of such period, at which time a prepayment shall
be required in accordance with this paragraph (b).

     (c) Following the end of each fiscal year of the Borrower, commencing with
the fiscal year ending December 31, 2002, the Borrower shall prepay Term
Borrowings, Incremental Tranche A Borrowings and, if provided for in the
applicable Additional Incremental Facility Agreement, Additional Incremental
Term Borrowings in an aggregate amount equal to the product of (i) 50% of Excess
Cash Flow for such fiscal year and (ii) the Prepayment Portion in respect of
such Excess Cash Flow (such product, the "Excess Cash Flow Prepayment Amount");
provided that if, on the date on which any

                                       53

<PAGE>   74

prepayment would otherwise be made pursuant to this Section 2.11(c), either (i)
the Facilities shall be rated not lower than BBB- by S&P and Baa3 by Moody's or
(ii) the Total Leverage Ratio as of such date is less than 3.5 to 1.0, no such
prepayment shall be required pursuant to this Section 2.11(c). Each prepayment
pursuant to this paragraph shall be made on or before the date on which
financial statements are delivered pursuant to Section 5.01 with respect to the
fiscal year for which Excess Cash Flow is being calculated (and in any event
within 90 days after the end of such fiscal year).

     (d) If, on any date, the aggregate Revolving Exposures of all Lenders
exceeds the aggregate Revolving Commitments of all Lenders, or the aggregate
principal amount of the Additional Incremental Revolving Loans of any Class of
all Lenders exceeds the aggregate Additional Incremental Revolving Commitments
of such Class of all Lenders, the Borrower shall immediately prepay Revolving
Loans or Additional Incremental Revolving Loans of such Class, as the case may
be (and, to the extent that any such excess remains after all Revolving Loans
have been prepaid, deposit cash collateral with the Administrative Agent to
secure outstanding LC Exposure), in an amount equal to such excess.

     (e) Prior to any optional or mandatory prepayment of Borrowings hereunder,
the Borrower shall select the Borrowing or Borrowings to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to Section
2.11(f); provided that each prepayment of Borrowings of any Class shall be
applied to prepay ABR Borrowings of such Class before any other Borrowings of
such Class.

     (f) The Borrower shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the applicable Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., Dallas, Texas
time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., Dallas, Texas time,
one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, Dallas, Texas time,
on the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment; provided that, if a
notice of optional prepayment is given in connection with a conditional notice
of termination of the Revolving Commitments or any Additional Incremental
Revolving Commitments as contemplated by Section 2.08, then such notice of
prepayment may be revoked if such notice of termination is revoked in accordance
with Section 2.08. Promptly following receipt of any such notice (other than a
notice relating solely to Swingline Loans), the Administrative Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02, except as
necessary to apply fully the required amount of a mandatory prepayment. Each
prepayment of a Borrowing shall be applied ratably to the Loans

                                       54

<PAGE>   75

included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.13.

     SECTION 2.12. Fees. (a) The Borrower agrees to pay to the Administrative
Agent (i) in the case of Revolving Commitments and Term Commitments for the
account of each Lender fees for each day during the period from and including
the Effective Date to but excluding the date on which such Commitment terminates
at a rate equal to the applicable Commitment Fee Rate for such day, (ii) in the
case of Incremental Tranche A Commitments for the account of each Incremental
Tranche A Lender fees for each day during the period from and including the
Amendment No. 5 Effective Date but excluding the Incremental Tranche A
Commitment Termination Date at a rate equal to the applicable Commitment Fee
Rate for such day and (iii) in the case of any Additional Incremental Facility
Commitment, the rate set forth in the applicable Additional Incremental Facility
Agreement for such day, in each case on the unused amount of each Commitment of
such Lender on such day (collectively, the "COMMITMENT FEES"). Accrued
Commitment Fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the applicable
Commitments terminate, commencing on the first such date to occur after the date
hereof. All Commitment Fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). For purposes of computing commitment fees with
respect to Revolving Commitments, a Revolving Commitment of a Lender shall be
deemed to be used to the extent of the outstanding Revolving Loans and LC
Exposure of such Lender (and the Swingline Exposure of such Lender shall be
disregarded for such purpose).

     (b) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit for each day during the period from and
including the Effective Date to but excluding the later of the date on which
such Lender's Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, which fee shall accrue at a rate equal to the
Applicable Margin on Eurodollar Revolving Loans for such day on the amount of
such Lender's LC Exposure on such day (excluding any portion thereof
attributable to unreimbursed LC Disbursements) and (ii) to the applicable
Issuing Bank a fronting fee in respect of Letters of Credit issued by such
Issuing Bank for each day during the period from and including the Effective
Date to but excluding the later of the date of termination of the Revolving
Commitments and the date on which there ceases to be any LC Exposure in respect
of Letters of Credit issued by such Issuing Bank, which shall accrue at the rate
or rates per annum separately agreed upon between the Borrower and such Issuing
Bank on the amount of the LC Exposure on such day (excluding any portion thereof
attributable to unreimbursed LC Disbursements) in respect of Letters of Credit
issued by such Issuing Bank, as well as the Issuing Bank's standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the Effective Date;
provided that all such fees shall be

                                       55

<PAGE>   76

payable on the date on which the Revolving Commitments terminate and any such
fees accruing after the date on which the Revolving Commitments terminate shall
be payable on demand. Any other fees payable to an Issuing Bank pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).

     (c) The Borrower agrees to pay to the Administrative Agent, for its own
account, fees in the amounts and at the times separately agreed upon between the
Borrower and the Administrative Agent.

     (d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the applicable
Issuing Bank, in the case of fees payable to it) for distribution, in the case
of Commitment Fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.

     SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing shall
bear interest at the Alternate Base Rate plus (i) in the case of any ABR
Borrowing under the Revolving Facility, the Term Facility or the Incremental
Facility (including each Swingline Loan), the ABR Spread and, if applicable to
any loan (other than an Incremental Term Loan), the Leverage Premium (each as
set forth in "Applicable Margin") and (ii) in the case of any ABR Borrowing
under any Additional Incremental Facility, the Applicable Margin for ABR
Borrowings set forth in the applicable Additional Incremental Facility
Agreement.

     (b) The Loans comprising each Eurodollar Borrowing shall bear interest at
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
(i) in the case of any Eurodollar Borrowing under the Revolving Facility, the
Term Facility or the Incremental Facility, the Eurodollar Spread and, if
applicable to any loan (other than an Incremental Term Loan), the Leverage
Premium (each as set forth in "Applicable Margin") and (ii) in the case of any
Eurodollar Borrowing under any Additional Incremental Facility, the Applicable
Margin for Eurodollar Borrowings set forth in the applicable Additional
Incremental Facility Agreement.

     (c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any ABR Loan under
the Revolving Facility, the Term Facility or the Incremental Facility, 2% plus
the highest Applicable Margin for ABR Loans plus the ABR, (ii) in the case of
overdue principal of any Eurodollar Loan under the Revolving Facility, the Term
Facility or the Incremental Facility, the higher of (x) 2% plus the highest
Applicable Margin for Eurodollar Loans plus the Adjusted LIBO Rate applicable to
such Eurodollar Loan on the day before payment was due and (y) the sum of 2%
plus the highest Applicable Margin for ABR Loans plus the ABR, (iii) in the case
of overdue

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<PAGE>   77

principal of or overdue interest on any Additional Incremental Loan of any
Class, the rate set forth in the applicable Additional Incremental Facility
Agreement and (iv) in the case of any other amount, 2% plus the rate applicable
to ABR Revolving Loans as provided in Section 2.13(a).

     (d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments; provided that (i) interest accrued
pursuant to Section 2.13(c) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving
Loan prior to the end of the Revolving Availability Period), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

     (e) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate or Adjusted
LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

     SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:

     (a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or

     (b) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (or Lender) of making or maintaining their
Loans (or its Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.

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<PAGE>   78

     SECTION 2.15. Increased Costs.

     (a) If any Change in Law shall:

          (i) impose, modify or deem applicable any reserve, special deposit or
     similar requirement against assets of, deposits with or for the account of,
     or credit extended by, any Lender (except any such reserve requirement
     reflected in the Adjusted LIBO Rate), Swingline Lender or Issuing Bank; or

          (ii) impose on any Lender, Swingline Lender or Issuing Bank or the
     London interbank market any other condition affecting this Agreement or
     Eurodollar Loans made by such Lender or any Letter of Credit or
     participation therein;

and the result of any of the foregoing shall be to increase the cost (other than
Taxes) to such Lender of making or maintaining any Eurodollar Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender, Swingline Lender or Issuing Bank of participating in, issuing or
maintaining any Letter of Credit or to reduce the amount of any sum received or
receivable by such Lender, Swingline Lender or Issuing Bank hereunder (whether
of principal, interest or otherwise), then the Borrower will pay to such Lender,
Swingline Lender or Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender, Swingline Lender or Issuing Bank, as the
case may be, for such additional costs incurred or reduction suffered.

     (b) If any Lender, Swingline Lender or Issuing Bank determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's, Swingline Lender's or Issuing
Bank's capital or on the capital of such Lender's, Swingline Lender's or Issuing
Bank's holding company, if any, as a consequence of this Agreement or the Loans
made by, or participations in Letters of Credit held by, such Lender or
Swingline Lender, or the Letters of Credit issued by such Issuing Bank, to a
level below that which such Lender, Swingline Lender or Issuing Bank or such
Lender's, Swingline Lender's or Issuing Bank's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's,
Swingline Lender's or Issuing Bank's policies and the policies of such Lender's,
Swingline Lender's or Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender,
Swingline Lender or Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender, Swingline Lender or Issuing Bank or such
Lender's, Swingline Lender's or Issuing Bank's holding company for any such
reduction suffered.

     (c) A certificate of a Lender, Swingline Lender or Issuing Bank setting
forth the amount or amounts necessary to compensate such Lender, Swingline
Lender or Issuing Bank or its holding company, as the case may be, as specified
in Section 2.15(a) or 2.15(b) shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or such
Issuing Bank, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.

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<PAGE>   79

     (d) Failure or delay on the part of any Lender, Swingline Lender or Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's, Swingline Lender's or Issuing Bank's right to demand
such compensation; provided that the Borrower shall not be required to
compensate a Lender, Swingline Lender or Issuing Bank pursuant to this Section
for any increased costs or reductions incurred more than 120 days prior to the
date that such Lender, Swingline Lender or Issuing Bank, as the case may be,
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's, Swingline Lender's or Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 120-day period referred to above shall be extended to include the period of
retroactive effect thereof.

     SECTION 2.16. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice may be revoked under Section 2.11(f) and is
revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 2.19, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.

     SECTION 2.17. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Bank (as

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<PAGE>   80

the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.

     (b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

     (c) The Borrower shall indemnify the Administrative Agent, each Lender and
Issuing Bank, within 15 days after the date of receipt of a written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or such Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or Issuing Bank, or by the
Administrative Agent on its own behalf or on behalf of a Lender or Issuing Bank,
shall be conclusive absent manifest error.

     (d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

     (e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), on or prior to the first payment by the Borrower under
this Agreement to such Foreign Lender or Participant and from time to time
thereafter as prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Borrower as will permit such payments to be made without withholding or at a
reduced rate.

     (f) If any Lender determines, in its sole discretion, that it has received
a refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 2.17, it shall pay over such refund to the Borrower
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Borrower under this Section 2.17 with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the Lender
without interest (other than any interest paid by the relevant

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<PAGE>   81

Governmental Authority with respect to such refund); provided, however, that the
Borrower, upon request of such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Lender in the event such Lender is
required to repay such refund to such Governmental Authority. Nothing contained
in this Section 2.17(f) shall require any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.

     (g) Notwithstanding anything expressed or implied to the contrary in this
Agreement or any other Loan Document (including any schedule or exhibit to any
of the foregoing), this Section 2.17 (and Section 10.04 insofar as it relates to
this Section 2.17) shall constitute the complete and exclusive understanding of
the parties in respect of all matters relating to any Taxes (including interest
thereon, additions thereto and penalties in connection therewith).

     SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to 1:00 p.m., Dallas, Texas time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at Dallas, Texas,
except that payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03 shall be
made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment under any Loan Document shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day (unless, in the case of payments in respect of
Eurodollar Loans, such next succeeding Business Day would fall in the next
calendar month, in which case such payment shall be due on the next preceding
Business Day), and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments under
each Loan Document shall be made in dollars.

     (b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.

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     (c) If any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Loans (other than Swingline Loans) or participations in LC Disbursements
or Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Loans (other than Swingline Loans) and
participations in LC Disbursements and Swingline Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans (other than Swingline Loans) and participations in
LC Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans (other than Swingline Loans) and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement (including without limitation pursuant to Section 2.11) or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set- off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.

     (d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or an Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the applicable
Issuing Bank or Banks, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or Issuing
Banks, as the case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or Issuing Bank
with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the Administrative Agent in accordance with banking industry rules on
interbank compensation.

     (e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(c), 2.05(d) or 2.05(e), 2.06(b), 2.18(d) or 10.03(c),
then the Administrative Agent may, in its discretion (notwithstanding any
contrary provision

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hereof), apply any amounts thereafter received by the Administrative Agent for
the account of such Lender to satisfy such Lender's obligations under such
Sections until all such unsatisfied obligations are fully paid.

     SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.15, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

     (b) If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Commitment is being assigned, the Issuing Bank and Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such Lender
shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.15 or payments required to be made pursuant to Section 2.17, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, (i) as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply or (ii) such Lender elects to withdraw its request.

     SECTION 2.20. Additional Incremental Facilities and Commitments. (a) At any
time prior to December 31, 2002, and so long as no Default or Event of Default
shall have occurred and be continuing or would result therefrom, the Borrower
may request, on one or more occasions, by notice to the Administrative Agent and
the Incremental Facility Arrangers, that one or more Lenders (and/or one or more
other Persons which shall

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become Lenders as provided in Section 2.20(d) below) provide one or more
additional facilities (each, an "Additional Incremental Facility"), each of
which shall provide for commitments (the "Additional Incremental Commitments")
in an aggregate amount of not less than $100,000,000 and all of which Additional
Incremental Facilities shall provide for Additional Incremental Commitments in
an aggregate amount not in excess of $500,000,000; provided that no Lender shall
have any obligation to provide any Additional Incremental Commitment and any
Lender (or any other Person which becomes a Lender pursuant to Section 2.20(d)
below) may provide Additional Incremental Commitments without the consent of any
other Lender.

     (b) The maturity date, scheduled amortization and commitment reductions,
mandatory prepayments and commitment reductions, interest rate, minimum
borrowings and prepayments, commitment fees and other amounts payable in respect
of any Additional Incremental Facility, and certain agent determinations, shall
be as set forth in an agreement (an "Additional Incremental Facility Agreement")
among the Loan Parties, the Administrative Agent, each Incremental Facility
Arranger (but only if it is acting in the capacity of joint lead arranger with
respect to such Additional Incremental Facility) and the Lenders and other
Persons agreeing to provide Additional Incremental Commitments thereunder;
provided that any term Incremental Loans (the "Additional Incremental Term
Loans") shall have a Weighted Average Life to Maturity of no less than the
Weighted Average Life to Maturity of the Term Loans then outstanding and any
revolving Incremental Commitment (the "Additional Incremental Revolving
Commitments" and any loans made pursuant thereto, the "Additional Incremental
Revolving Loans") shall have a Weighted Average Life to Maturity of not less
than the Weighted Average Life to Maturity of the Revolving Commitments then
outstanding.

     (c) [Intentionally deleted]

     (d) The effectiveness of any Additional Incremental Facility to be created
under this Section 2.20, and the obligation of any Lender or other Person
providing any Additional Incremental Commitment thereunder to make any
Additional Incremental Loans pursuant thereto, is subject to, in addition to the
conditions set forth in Article 4, the satisfaction of each of the following
conditions: each Loan Party, the Administrative Agent, each Incremental Facility
Arranger (but only if it is acting in the capacity of joint lead arranger with
respect to such Additional Incremental Facility) and each Lender or other Person
providing Additional Incremental Commitments thereunder (each, an "Additional
Incremental Lender") shall have executed and delivered to the Administrative
Agent an Additional Incremental Facility Agreement with respect to such
Additional Incremental Facility, (x) the Administrative Agent shall have
received, and (y) the Administrative Agent shall have received for the
respective accounts of any other agents and the Additional Incremental Lenders,
all fees and other amounts payable by the Borrower in respect of such Additional
Incremental Facility on or prior to such date of effectiveness and the
Administrative Agent (or its counsel) shall have received such documents and
certificates, and such legal opinions, as the Administrative Agent and the
Incremental Facility Arrangers or their counsel shall reasonably request,
including documents, certificates and legal opinions relating to the
organization, existence and good

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<PAGE>   85

standing of each Loan Party, the authorization of such Additional Incremental
Facility and other legal matters relating to the Loan Parties or the Loan
Documents (including the applicable Additional Incremental Facility Agreement).
The Administrative Agent shall notify each Lender as to the effectiveness of
each Additional Incremental Facility hereunder.

                                    ARTICLE 3
                         REPRESENTATIONS AND WARRANTIES

     Each of Holdings and the Borrower represents and warrants to the Lenders
that:

     SECTION 3.01. Organization; Powers. Each of Holdings and the Restricted
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.

     SECTION 3.02. Authorization; Enforceability. The Transactions to be entered
into by each Loan Party are within such Loan Party's corporate powers and have
been duly authorized by all necessary corporate and, if required, stockholder
action. This Agreement has been duly executed and delivered by each of Holdings
and the Borrower and constitutes, and each other Loan Document to which any Loan
Party is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of Holdings, the Borrower or
such Loan Party (as the case may be), enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

     SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect and except filings necessary to perfect
Liens created under the Loan Documents (if any), (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of Holdings or any Restricted Subsidiary or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon Holdings or any Restricted
Subsidiary or any of their respective assets, or give rise to a right thereunder
to require any payment to be made by Holdings or any Restricted Subsidiary, and
(d) will not result in the creation or imposition of any Lien on any asset of
Holdings or any Restricted Subsidiary, except Liens created under the Loan
Documents (if any).

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<PAGE>   86

     SECTION 3.04. Financial Condition; No Material Adverse Change. (a) Holdings
has heretofore furnished to the Lenders Holdings' consolidated balance sheet and
statements of operations, stockholders equity and cash flows as of and for the
fiscal years ended December 31, 1998, December 31, 1999 and December 31, 2000,
reported on by Ernst & Young LLP, independent public accountants. Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of Holdings and the Subsidiaries as of such
dates and for such periods in accordance with GAAP.

     (b) Holdings has heretofore furnished to the Lenders its pro forma
consolidated balance sheet as of December 31, 2000 and projected pro forma
statements of operations and cash flows for the fiscal year ended December 31,
2001, prepared giving effect to (x) the Transactions under the Incremental
Facility and the Structured Note Financing and (y) the transactions described in
clause (x) and, in addition, the sale of its Williams Communications Solutions
business unit, as if such events had occurred on such date or on the first day
of such fiscal year, as the case may be. Such projected pro forma consolidated
balance sheets and statements of operations and cash flows (i) have been
prepared in good faith based on the same assumptions used to prepare the pro
forma financial statements included in the Information Memorandum (which
assumptions are believed by Holdings and the Borrower to be reasonable), (ii)
are based on the best information available to Holdings and the Borrower after
due inquiry, (iii) accurately reflect all adjustments necessary to give effect
to the Transactions under the Incremental Facility and the Structured Note
Financing and, in the case of one such set of financial statements, the sale of
its Williams Communications Solutions business unit, and (iv) present fairly, in
all material respects, the pro forma financial position of Holdings and the
Subsidiaries as of such date and for such periods as if the Transactions, the
Structured Note Financing and, in the case of one such set of financial
statements, the sale of its Williams Communications Solutions business unit had
occurred on such date or at the beginning of such period, as the case may be.

     (c) Except as disclosed in the financial statements referred to above or
the notes thereto or in the Information Memorandum and except for the Disclosed
Matters, after giving effect to the Transactions, none of Holdings or any
Restricted Subsidiary has, as of the Effective Date, any material contingent
liabilities, unusual material long-term commitments or unrealized material
losses.

     (d) The projections delivered to the Lenders on the Amendment No. 5
Effective Date (the "Projections") were based on assumptions believed by the
Borrower and Holdings in good faith to be reasonable when made and as of their
date represented the Borrower's and Holdings' good faith estimate of future
performance of Holdings and the Subsidiaries and of the Borrower and its
consolidated subsidiaries.

     (e) Since December 31, 2000, there has been no Material Adverse Change.

     SECTION 3.05. Properties. (a) Each of Holdings and the Restricted
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material

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to its business (including its Mortgaged Properties, if any), except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended
purposes. None of the properties and assets of Holdings or any Restricted
Subsidiary is subject to any Lien other than Permitted Encumbrances, Liens
created by the Collateral Documents (if any) and other Liens permitted under
Section 6.02.

     (b) Each of Holdings and the Subsidiaries owns, or is licensed to use, all
trademarks, trade names, copyrights, patents and other intellectual property
material to its business, and the use thereof by Holdings and the Subsidiaries
does not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

     (c) Schedule 3.05 sets forth the address of each real property that is
owned or leased by Holdings, the Borrower or any other Loan Party (other than
the Parent) as of the Effective Date after giving effect to the Transactions.

     SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of Holdings or the Borrower,
threatened against or affecting Holdings or any Subsidiary (i) as to which there
is a reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or (ii)
that involve any of the Loan Documents or the Transactions.

     (b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither Holdings nor any Subsidiary (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) has become subject to any Environmental Liability, (iii) has received
written notice of any claim with respect to any Environmental Liability or (iv)
knows of any basis for any violations of any Environmental Law or any release,
threatened release or exposure to any Hazardous Materials that is likely to form
the basis of any Environmental Liability.

     (c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.

     SECTION 3.07. Compliance with Laws and Agreements. Each of Holdings and the
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.

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     SECTION 3.08. Investment and Holding Company Status. Neither Holdings nor
any Restricted Subsidiary is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.

     SECTION 3.09. Taxes. Each of Holdings and the Subsidiaries has timely filed
or caused to be filed (or the Parent has filed or caused to be filed) all Tax
returns and reports required to have been filed and has paid or caused to be
paid (or the Parent has paid or caused to be paid) all Taxes required to have
been paid by or with respect to it, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which Holdings or such Subsidiary,
as applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.

     SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $25,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $25,000,000 the fair
market value of the assets of all such underfunded Plans.

     SECTION 3.11. Disclosure. Holdings and the Borrower have disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
Holdings or any Restricted Subsidiary is subject, and all other matters known to
any of them, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither the Information
Memorandum nor any of the other reports, financial statements, certificates or
other information furnished by or on behalf of any Loan Party to any Agent or
any Lender in connection with the negotiation of this Agreement or any other
Loan Document or delivered hereunder or thereunder (as modified or supplemented
by other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial information, Holdings and the
Borrower represent only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.

     SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name of, and the
direct or indirect ownership interest of Holdings or the Borrower in, each
Subsidiary and

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identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of
the Effective Date.

     SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of Holdings and the Restricted Subsidiaries
as of the Effective Date. As of the Effective Date, all premiums in respect of
such insurance have been paid.

     SECTION 3.14. Labor Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against Holdings or any Restricted Subsidiary
pending or, to the knowledge of Holdings or the Borrower, threatened. The hours
worked by and payments made to employees of Holdings and the Restricted
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such matters.
All payments due from Holdings or any Restricted Subsidiary, or for which any
claim may be made against Holdings or any Restricted Subsidiary, on account of
wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of Holdings or such Restricted
Subsidiary. The consummation of the Transactions and the Reorganization has not
and will not give rise to any right of termination or right of renegotiation on
the part of any union under any collective bargaining agreement by which
Holdings or any Restricted Subsidiary is bound.

     SECTION 3.15. Solvency. Immediately after the consummation of the
Transactions to occur on the Effective Date and immediately following the making
of each Loan made on the Effective Date and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
each Loan Party will exceed its debts and liabilities, subordinated, contingent
or otherwise; (b) the present fair saleable value of the property of each Loan
Party will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; (c)
each Loan Party will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Loan Party will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Effective Date.

     SECTION 3.16. No Burdensome Restrictions. No contract, lease, agreement or
other instrument to which Holdings or any Restricted Subsidiary is a party or by
which any of their property is bound or affected, no charge, corporate
restriction, judgment, decree or order and no provision of applicable law or
governmental regulation could reasonably be expected to have Material Adverse
Effect.

     SECTION 3.17. Representations in Loan Documents True and Correct. As of the
dates when made and as of the Effective Date, each representation and warranty
of Holdings or any Restricted Subsidiary party thereto contained in any Loan
Document is true and correct.

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                                    ARTICLE 4
                                   CONDITIONS

     SECTION 4.01. Effective Date. [Intentionally deleted]

     SECTION 4.02. Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of each Issuing Bank to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:

     (a) The representations and warranties of each Loan Party set forth in the
Loan Documents (excluding Section 3.04(b)) shall be true and correct on and as
of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.

     (b) At the time of and immediately after giving effect to such Borrowing or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.

     Each Borrowing and each issuance, amendment, renewal or extension of a
Letter of Credit shall be deemed to constitute a representation and warranty by
Holdings and the Borrower on the date thereof as to the matters specified in
Sections 4.02(a), 4.02(b) and 4.03.

     SECTION 4.03. First Incremental Borrowing Date with Respect to the
Incremental Facility. The obligation of each Incremental Lender to make a Loan
on the occasion of the First Incremental Borrowing Date is subject to the
satisfaction of the following conditions (in addition to the conditions set
forth in Section 4.02):

     (a) The Spin-Off shall have been consummated.

     (b) The Initial Collateral Date shall have occurred (or shall occur on the
date of such Borrowing) and, prior to the making of any Loan on the occasion of
such Borrowing, Holdings and the Borrower shall have complied with all of the
provisions of Section 5.11A.

     (c) The First Incremental Borrowing Date shall be no later than the date
that is 180 days after the date of Amendment No. 5 Effective Date.

     (d) The Administrative Agent shall have received a certificate, in form and
substance reasonably satisfactory to the Administrative Agent, from the
Financial Officer of each of Holdings and the Borrower, certifying as to
compliance of the matters specified in Sections 4.03(a) and 4.03(b).

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                                    ARTICLE 5
                              AFFIRMATIVE COVENANTS

     Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings and the Borrower
covenants and agrees with the Lenders that:

     SECTION 5.01. Financial Statements and Other Information. Holdings and the
Borrower will furnish to the Administrative Agent and each Lender:

     (a) (i) within 90 days after the end of each fiscal year of Holdings, its
audited consolidated balance sheets and related audited consolidated statements
of operations, stockholders' equity and cash flows as of the end of and for such
fiscal year (including segment reporting with respect to each of Holdings' and
the Subsidiaries' business segments consistent with that provided in the Notes
Offering Registration Statement), setting forth in each case in comparative form
the figures for the previous fiscal year, all reported on by Ernst & Young LLP
or other independent public accountants of recognized national standing (without
a "going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of Holdings and the
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, (ii) within 90 days after the end of each fiscal year of the Borrower,
its audited consolidated balance sheets and related audited consolidated
statements of operations, stockholders' equity and cash flows as of the end of
and for such fiscal year (including segment reporting with respect to each of
the Borrower's and its consolidated subsidiaries' business segments consistent
with that provided with respect to the Borrower's and its consolidated
subsidiaries' business segments in the Notes Offering Registration Statement),
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by Ernst & Young LLP or other independent public
accountants of recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as to the
scope of such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated subsidiaries on a consolidated
basis in accordance with GAAP consistently applied and (iii) within 90 days
after the end of each fiscal year of Holdings and the Borrower, (x) supplemental
unaudited balance sheets and related unaudited statements of operations,
stockholders' equity and cash flows as of the end of and for such fiscal year,
setting forth in tabular form in each case the figures for the previous year,
for the Borrower and Holdings and the consolidating adjustments with respect
thereto and (y) segment reporting of EBITDA and Adjusted EBITDA with respect to
each business segment of Holdings and the Subsidiaries and the Borrower and its
consolidated subsidiaries consistent with the business segments reported on in
the Notes Offering Registration Statement;

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     (b) (i) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of Holdings, unaudited consolidated and
consolidating balance sheets and related consolidated and consolidating
statements of operations, stockholders' equity and cash flows of Holdings and
the Subsidiaries as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of the previous fiscal
year (or in the case of the balance sheet, as of the end of the previous fiscal
year) (including segment reporting with respect to each of Holdings' and the
Subsidiaries' business segments consistent with that provided in the Notes
Offering Registration Statement and also including segment reporting of EBITDA
and Adjusted EBITDA), all certified by a Financial Officer of Holdings as
presenting fairly in all material respects the financial condition and results
of operations of Holdings and the Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes and (ii) within 45 days after the end
of each of the first three fiscal quarters of each fiscal year of the Borrower,
unaudited consolidated balance sheets and related statements of operations,
stockholders' equity and cash flows of the Borrower and its consolidated
subsidiaries as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of the previous fiscal year (or,
in the case of the balance sheet, as of the end of the previous fiscal year)
(including segment reporting with respect to each of the Borrower's and its
consolidated subsidiaries' business segments consistent with that provided with
respect to the Borrower's and its consolidated subsidiaries' business segments
in the Notes Offering Registration Statement and also including segment
reporting of EBITDA and Adjusted EBITDA), all certified by a Financial Officer
of the Borrower as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes;

     (c) concurrently with any delivery of financial statements under Section
5.01(a) or 5.01(b) above, a certificate of a Financial Officer of the Borrower
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth in reasonable detail calculations
demonstrating (x) compliance with Section 6.08 and Sections 6.15 through 6.19,
including, if applicable, calculations showing capital contributions made by the
Parent pursuant to Section 6.20 and the resulting effects on the Borrower's
compliance with Section 6.08 and Sections 6.15 through 6.19 and (y) Additional
Capital at such date, including detail as to the sources and uses of Additional
Capital since June 30, 1999 and (iii) stating whether any change in GAAP or in
the application thereof has occurred since the date of Holdings' audited
financial statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate;

     (d) concurrently with any delivery of financial statements under clause
5.01(a) above, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their

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examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);

     (e) as soon as practicable after approval by the Board of Directors of the
Parent and in any event not later than 120 days after the commencement of each
fiscal year of the Borrower, a consolidated and consolidating budget of Holdings
for such fiscal year and a consolidated budget of the Borrower for such fiscal
year (including projected consolidated (and, in the case of Holdings,
consolidating) balance sheets, related consolidated (and, in the case of
Holdings, consolidating) statements of projected operations and cash flow as of
the end of and for such fiscal year and segment information with respect to each
of Holdings' and the Subsidiaries' and the Borrower's and its consolidated
subsidiaries' business segments consistent with the categories of information
provided with respect to Holdings' and the Subsidiaries' business segments in
the Notes Offering Registration Statement, together with projected EBITDA and
Adjusted EBITDA for such segments) and, promptly when available, any significant
revisions of such budget;

     (f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Holdings or any Restricted Subsidiary with the Commission, or any Governmental
Authority succeeding to any or all of the functions of the Commission, or with
any national securities exchange, or distributed by Holdings to its shareholders
generally, as the case may be, except to the extent any such report, proxy
statement or other material is available electronically on a publicly-accessible
website; and

     (g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of Holdings
or any Restricted Subsidiary, or compliance with the terms of any Loan Document,
as the Administrative Agent or any Lender may reasonably request.

     SECTION 5.02. Notices of Material Events. Upon knowledge thereof, Holdings
or the Borrower will furnish to the Administrative Agent and each Lender prompt
written notice of the following:

     (a) the occurrence of any Default;

     (b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting Holdings,
the Borrower or any Affiliate thereof that could reasonably be expected to
result in a Material Adverse Effect;

     (c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect;

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     (d) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.

     Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.

     SECTION 5.03. Existence; Conduct of Business. Each of Holdings and the
Borrower will, and will cause each other Restricted Subsidiary to, (i) continue
to engage in business of the same general type as now conducted and (ii) do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges,
franchises, patents, copyrights, trademarks and trade names material to the
conduct of its business; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 6.03.

     SECTION 5.04. Payment of Obligations. Each of Holdings and the Borrower (i)
will, and will cause each other Restricted Subsidiary to, pay its Indebtedness
and other material obligations, including tax liabilities, before the same shall
become delinquent or in default, except where (a) the validity or amount thereof
is being contested in good faith by appropriate proceedings, (b) Holdings, the
Borrower or such other Restricted Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, (c) such contest
effectively suspends collection of the contested obligation and the enforcement
of any Lien securing such obligation and (d) the failure to make payment pending
such contest could not reasonably be expected to result in a Material Adverse
Effect and (ii) shall not breach, or permit any other Restricted Subsidiary to
breach, in any material respect, or permit to exist any material default under,
the terms of any material lease, commitment, contract, instrument or obligation
to which it is a party, or by which its properties or assets are bound, except
where the failure to do the foregoing would not in the aggregate have a Material
Adverse Effect.

     SECTION 5.05. Maintenance of Properties. Each of Holdings and the Borrower
will, and will cause each other Restricted Subsidiary to, keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.

     SECTION 5.06. Insurance. Holdings and the Borrower will, and will cause
each other Restricted Subsidiary to, maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.

     SECTION 5.07. Casualty and Condemnation. The Borrower will (a) furnish to
the Administrative Agent and the Lenders prompt written notice of any casualty
or other insured damage to any portion of any of Holdings' and the Restricted
Subsidiaries'

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<PAGE>   95

property or assets or the commencement of any action or proceeding for the
taking of any of Holdings' and the Restricted Subsidiaries' property or assets
or any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding (in each case with a value in excess of
$10,000,000) and (b) ensure that the Net Proceeds of any such event (whether in
the form of insurance proceeds, condemnation awards or otherwise) are applied,
to the extent such Net Proceeds have not been utilized to repair, restore or
replace such property or assets or to acquire other Telecommunications Assets
within 360 days after such event, to prepay Loans and reduce Commitments as
provided in Sections 2.11(b) and 2.08(f), respectively.

     SECTION 5.08. Books and Records; Inspection and Audit Rights. Each of
Holdings and the Borrower will, and will cause each other Restricted Subsidiary
to, keep proper books of record and account in which materially full, true and
correct entries are made of all dealings and transactions in relation to its
business and activities. Each of Holdings and the Borrower will, and will cause
each other Restricted Subsidiary to, permit any representatives designated by
the Administrative Agent or any Lender at the expense of the Administrative
Agent or Lender, as the case may be, or, if an Event of Default shall have
occurred and be continuing, at the expense of the Borrower, upon reasonable
prior notice, to visit and inspect its properties, to examine and make extracts
from its books and records, and to discuss its affairs, finances and condition
with its officers and independent accountants, all at such reasonable times and
as often as reasonably requested, subject to Section 10.12.

     SECTION 5.09. Compliance with Laws. Each of Holdings and the Borrower will,
and will cause each other Subsidiary to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder), except where the necessity of compliance
therewith is contested in good faith by appropriate action and such failure to
comply, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

     SECTION 5.10. Use of Proceeds and Letters of Credit. (a) The proceeds of
Loans will be used (i) for working capital requirements and general corporate
purposes of the Borrower and the other Restricted Subsidiaries and (ii) to pay
the fees and expenses associated with the Facilities.

     (b) No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations U and X.

     SECTION 5.11A. Initial Collateral Date. On the Initial Collateral Date,
Holdings and the Borrower hereby agree that they will, and will cause each other
Restricted Subsidiary to:

     (a) Deliver to the Administrative Agent duly executed counterparts of the
Security Agreement, together with the following:

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         (i) duly executed counterparts of each supplemental agreement required
         to be executed and delivered by the terms of the Security Agreement
         (including, without limitation, any Patent Security Agreement, and
         Trademark Security Agreement and any Control Agreement, in each case
         as defined in the Security Agreement);

         (ii) stock certificates representing any or all of the outstanding
         shares of capital stock or other Equity Interests of the Borrower and
         each Restricted Subsidiary and stock powers and instruments of
         transfer, endorsed in blank, with respect to such stock certificates;

         (iii) any or all documents and instruments, including Uniform
         Commercial Code financing statements, required by law or reasonably
         requested by the Administrative Agent to be filed, registered or
         recorded to create or perfect the Liens intended to be created under
         the Security Agreement; and

         (iv) a completed perfection certificate dated the Initial Collateral
         Date, in form and substance reasonably satisfactory to the
         Administrative Agent and the Incremental Facility Arrangers and signed
         by an executive officer or Financial Officer of Holdings, together
         with all attachments contemplated thereby, including the results of a
         search of the Uniform Commercial Code (or equivalent) filings made
         with respect to the Loan Parties in the jurisdictions contemplated by
         such perfection certificate and copies of the financing statements (or
         similar documents) disclosed by such search and evidence reasonably
         satisfactory to the Administrative Agent and the Incremental Facility
         Arrangers that the Liens indicated by such financing statements (or
         similar documents) are permitted by Section 6.02 or have been
         released.

     (b) Deliver to the Administrative Agent a favorable written opinion
(addressed to the Agents, the Issuing Banks, the Swingline Lenders and the
Lenders and dated the Initial Collateral Date) of each of (i) counsel for
Holdings, the Borrower and each Subsidiary Loan Party reasonably acceptable to
the Administrative Agent and the Incremental Facility Arrangers, (ii) the
general counsel of Holdings and (iii) local counsel in the jurisdictions where
the Borrower is incorporated and where its chief executive office is located
and, in the case of each such opinion required by this paragraph, covering such
matters relating to the Loan Parties, the Loan Documents, the Collateral and the
Transactions as the Administrative Agent (or its counsel), the Incremental
Facility Arrangers (or its counsel) or the Required Lenders shall reasonably
request.

     SECTION 5.11B. Collateral Event. If a Collateral Event shall have occurred
and be continuing, the Administrative Agent, the Incremental Facility Arrangers
or the Required Lenders may by written notice to the Borrower (a "Collateral
Notice"), request, and Holdings and the Borrower hereby agree that they will,
and will cause each other Restricted Subsidiary to, within 30 days of the
Borrowers' receipt of such Collateral Notice (such thirtieth day, a "Collateral
Establishment Date"):

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     (a) Subject to subsection (d) of this Section 5.11B, deliver to the
Administrative Agent duly executed counterparts of the Security Agreement (to
the extent not previously delivered pursuant to Section 5.11A) and each other
Collateral Document reasonably requested by the Administrative Agent, the
Incremental Facility Arrangers or the Required Lenders, in form and substance
satisfactory to the Administrative Agent, the Incremental Facility Arrangers or
the Required Lenders, signed on behalf of Holdings, the Borrower and each
Subsidiary Loan Party requested by the Administrative Agent, the Incremental
Facility Arrangers or the Required Lenders, together with (to the extent not
previously delivered pursuant to Section 5.11A) such of the following as shall
have been so requested:

         (i) stock certificates representing any or all of the outstanding
         shares of capital stock of the Borrower and each other Subsidiary of
         Holdings owned by or on behalf of any Loan Party as of such Collateral
         Establishment Date (except that stock certificates representing shares
         of common stock of a Foreign Subsidiary may be limited to 66% of the
         outstanding shares of common stock of such Foreign Subsidiary) and
         stock powers and instruments of transfer, endorsed in blank, with
         respect to such stock certificates;

         (ii) any or all documents and instruments, including Uniform
         Commercial Code financing statements, required by law or reasonably
         requested by the Administrative Agent to be filed, registered or
         recorded to create or perfect the Liens intended to be created under
         the Collateral Documents; and

         (iii) a completed perfection certificate dated such Collateral
         Establishment Date, in form and substance reasonably satisfactory to
         the Administrative Agent and the Incremental Facility Arrangers and
         signed by an executive officer or Financial Officer of Holdings,
         together with all attachments contemplated thereby, including the
         results of a search of the Uniform Commercial Code (or equivalent)
         filings made with respect to the Loan Parties in the jurisdictions
         contemplated by such perfection certificate and copies of the
         financing statements (or similar documents) disclosed by such search
         and evidence reasonably satisfactory to the Administrative Agent and
         the Incremental Facility Arrangers that the Liens indicated by such
         financing statements (or similar documents) are permitted by Section
         6.02 or have been released.

     (b) If requested by the Administrative Agent, the Incremental Facility
Arrangers or the Required Lenders, on or before the thirtieth day following any
Collateral Establishment Date or such later day as shall be acceptable to the
Administrative Agent, the Incremental Facility Arrangers or the Required Lenders
(a "Mortgage Establishment Date"), Holdings and the Borrower shall, and shall
cause each other Restricted Subsidiary to, deliver to the Administrative Agent
(i) counterparts of a Mortgage with respect to each Mortgaged Property as to
which such request is made, in each case signed on behalf of the record owner of
such Mortgaged Property, (ii) a policy or policies of title insurance

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<PAGE>   98

issued by a nationally recognized title insurance company, insuring the Lien of
each such Mortgage as a valid first Lien on the Mortgaged Property described
therein, free of any other Liens except as permitted by Section 6.02, together
with such endorsements, coinsurance and reinsurance as the Collateral Agent, the
Incremental Facility Arrangers or the Required Lenders may reasonably request,
and (iii) such surveys, abstracts and appraisals as may be required pursuant to
such Mortgages or as the Administrative Agent, the Incremental Facility
Arrangers or the Required Lenders may reasonably request.

     (c) On or before any Collateral Establishment Date or Mortgage
Establishment Date, Holdings and the Borrower shall deliver a favorable written
opinion (addressed to the Agents, the Incremental Facility Arrangers, the
Issuing Banks, the Swingline Lenders and the Lenders and dated on or prior to
such Collateral Establishment Date or Mortgage Establishment Date) of each of
(i) counsel for Holdings, the Borrower and each Subsidiary Loan Party reasonably
acceptable to the Administrative Agent, (ii) the general counsel of Holdings and
(iii) local counsel in each jurisdiction where any Collateral or Mortgaged
Property is located and, in the case of each such opinion required by this
paragraph, covering such matters relating to the Loan Parties, the Loan
Documents, the Collateral and the Transactions as the Administrative Agent (or
its counsel), the Incremental Facility Arrangers (or its counsel) or the
Required Lenders shall reasonably request.

     (d) Anything in this Agreement to the contrary notwithstanding, the Liens
created under any Collateral Document may also secure, to the extent, but only
to the extent, required under the indentures and other documents governing such
Indebtedness (without taking into account any general exceptions to any such
requirements contained in any such indentures and other documents), equally and
ratably with some or all of the Obligations, the obligations of the Parent and
Holdings under any public Indebtedness of either of them that, by its terms,
requires that such Indebtedness be equally and ratably secured by such Liens.

     (e) None of the Borrower, Holdings or any Restricted Subsidiary of Holdings
shall be required to grant to the Administrative Agent or any Lender, pursuant
to the provisions of this Section 5.11B, a Lien on any of the following assets:
(i) voting Equity Interests of any Foreign Subsidiary representing in excess of
66% of the outstanding voting Equity Interests of such Foreign Subsidiary, (ii)
any ADP Property to the extent such ADP Property secures any ADP Obligation and
(iii) any other asset subject to a security interest permitted by clauses (iv),
(v), (viii), or (ix) of Section 6.02 but only, in the case of any asset
described in clauses (ii) or (iii), to the extent the granting of such Lien is
prohibited by the terms of the agreement pursuant to which such security
interest has been granted.

     SECTION 5.12. Information Regarding Collateral. (a) (i) The Borrower will
furnish to the Administrative Agent prompt written notice of any change (A) in
any Loan Party's corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (B) in the
location of any Loan Party's chief executive office, its principal place of
business, any office in which it maintains books or

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records relating to Collateral owned by it or any office or facility at which
Collateral owned by it is located (including the establishment of any such new
office or facility), (C) in any Loan Party's identity or corporate structure or
(D) in any Loan Party's Federal Taxpayer Identification Number; (ii) Holdings
and the Borrower will not, and will not permit any other Restricted Subsidiary
to, effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Administrative Agent to continue at all times
following such change to have a valid, legal and perfected security interest in
all the Collateral; and (iii) Holdings and the Borrower will, and will cause
each other Restricted Subsidiary to, promptly notify the Administrative Agent if
any material portion of the Collateral owned by it is damaged or destroyed.

     (b) At the time of the delivery of annual financial statements with respect
to the preceding fiscal year pursuant to Section 5.01(a), the Borrower shall
also deliver to the Administrative Agent a certificate of a Financial Officer or
the chief legal officer of the Borrower (i) setting forth the information
required pursuant to the perfection certificate or confirming that there has
been no change in such information since the date of the perfection certificate
most recently delivered or the date of the most recent certificate delivered
pursuant to this Section and (ii) certifying that all Uniform Commercial Code
financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations, including all refilings,
rerecordings and reregistrations, containing a description of the Collateral
have been filed of record in each governmental, municipal or other appropriate
office in each jurisdiction identified pursuant to Section 5.12 to the extent
necessary to protect and perfect the security interests under the Collateral
Documents for a period of not less than 18 months after the date of such
certificate (except as noted therein with respect to any continuation statements
to be filed within such period).

     SECTION 5.13. Additional Subsidiaries. (a) If any additional Subsidiary is
formed or acquired, Holdings and the Borrower will notify the Administrative
Agent and the Lenders thereof and if such Subsidiary is a Subsidiary Loan Party,
(i) cause such Subsidiary, within ten Business Days after such Subsidiary Loan
Party is formed or acquired, to become a party to the Subsidiary Guarantee as an
additional guarantor thereunder and to the Security Agreement as a "Lien
Grantor" thereunder, (ii) deliver all stock certificates representing the
capital stock or other Equity Interests of such Subsidiary to the Administrative
Agent, together with stock powers and instruments of transfer, endorsed in
blank, with respect to such certificates and (iii) take all actions required
under the Security Agreement to perfect, register and/or record the Liens
granted by it thereunder and the Lien on such capital stock or other Equity
Interests or as may be reasonably requested by the Administrative Agent, the
Incremental Facility Arrangers or the Required Lenders.

     (b) If a Collateral Establishment Date has occurred and any Collateral
Event is then continuing, such Subsidiary is a Subsidiary Loan Party and the
Administrative Agent, the Incremental Facility Arrangers or the Required Lenders
so request in writing, Holdings and the Borrower shall (i) within 30 days after
such Subsidiary is formed or

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acquired, cause such Subsidiary to become a party to such Collateral Documents
(in addition to the Security Agreement) as the Administrative Agent, the
Incremental Facility Arrangers or the Required Lenders shall request and
promptly take such actions as the Administrative Agent, the Incremental Facility
Arrangers or the Required Lenders shall reasonably request to create and perfect
Liens on such of such Subsidiary's assets (in accordance with the standards set
forth in Section 5.11B(a)) as the Administrative Agent, the Incremental Facility
Arrangers or the Required Lenders shall so request to secure its obligations
under the Subsidiary Guarantee, and (ii) within 60 days after such Subsidiary is
formed or acquired, cause such Subsidiary to enter into such Mortgage or
Mortgages as the Administrative Agent, the Incremental Facility Arrangers or the
Required Lenders shall so request with respect to any or all material real
property owned by such Subsidiary to secure some or all of its obligations under
the Subsidiary Guarantee and to take such actions (including, without
limitation, actions of the type referred to in Section 5.11B(a)) with respect
thereto as the Administrative Agent, the Incremental Facility Arrangers or the
Required Lenders shall reasonably request.

     (c) None of the Borrower, Holdings or any Subsidiary Loan Party shall be
required to grant to the Administrative Agent or any Lender, pursuant to the
provisions of , a Lien on any of the following assets: (i) voting Equity
Interests of any Foreign Subsidiary representing in excess of 66% of the
outstanding voting Equity Interests of such Foreign Subsidiary, (ii) any ADP
Property to the extent such ADP Property secures any ADP Obligation and (iii)
any other asset subject to a security interest permitted by clauses (iv), (v),
(viii), or (ix) of Section 6.02 but only, in the case of any asset described in
clauses (ii) or (iii), to the extent the granting of such Lien is prohibited by
the terms of the agreement pursuant to which such security interest has been
granted.

     SECTION 5.14. Further Assurances. (a) On any date each of Holdings and the
Borrower will, and will cause each Subsidiary Loan Party to, execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or which the Administrative
Agent, the Incremental Facility Arrangers or the Required Lenders may reasonably
request, to effectuate the transactions contemplated by the Loan Documents or to
grant, preserve, protect or perfect the Liens created or intended to be created
by the Collateral Documents required to be in effect on such date or the
validity or priority of any such Lien, all at the expense of the Loan Parties.
Holdings and the Borrower also agree to provide to the Administrative Agent,
from time to time upon request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Collateral Documents required to be in effect on
such date.

     (b) If any material assets (including any real property or improvements
thereto or any interest therein) are acquired by Holdings, the Borrower or any
Subsidiary Loan Party (other than assets constituting Collateral under any
Collateral Document that become subject to the Lien of such Collateral Document
automatically upon the acquisition thereof), the Borrower will notify the
Administrative Agent and the Lenders

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thereof, and, if requested by the Administrative Agent, the Incremental Facility
Arrangers or the Required Lenders, Holdings and the Borrower will, or will cause
the applicable Restricted Subsidiary to, cause such assets to be subjected to a
Lien securing some or all of the Obligations, as requested by the Administrative
Agent, the Incremental Facility Arrangers or the Required Lenders, and will
take, and cause such Subsidiary Loan Parties to take, such actions as shall be
necessary or reasonably requested by the Administrative Agent, the Incremental
Facility Arrangers or the Required Lenders to grant and perfect such Liens,
including actions described in Section 5.11B, all at the expense of the Loan
Parties; provided that, none of the Borrower, Holdings or any Subsidiary Loan
Party shall be required to grant to the Administrative Agent or any Lender,
pursuant to the provisions of THIS SECTION 5.14, a Lien on any of the following
assets: (i) at any time prior to any Collateral Establishment Date, any assets
of a type other than a type constituting "Collateral" under the form of Security
Agreement set forth on Exhibit K hereto as in effect on the Amendment No. 4
Effective Date, (ii) voting Equity Interests of any Foreign Subsidiary
representing in excess of 66% of the outstanding voting Equity Interests of such
Foreign Subsidiary, (iii) any ADP Property to the extent such ADP Property
secures any ADP Obligation and (iv) any other asset subject to a security
interest permitted by clauses (iv), (v), (viii), or (ix) of Section 6.02 but
only, in the case of any asset described in clauses (iii) or (iv), to the extent
the granting of such Lien is prohibited by the terms of the agreement pursuant
to which such security interest has been granted.

     SECTION 5.15. Concentration Accounts. At all times after any Collateral
Establishment Date and before a Collateral Release Date, Holdings and the
Borrower will maintain Holdings' and each Restricted Subsidiary's principal
concentration account with one or more Lenders.

     SECTION 5.16. [Intentionally deleted]

     SECTION 5.17. Sale of Solutions and ATL(a) Not later than September 30,
2001, Holdings and the Borrower shall have sold, or caused to be sold, to one or
more Persons that are not Affiliates of Holdings or any of its Subsidiaries, in
one or more transactions (x) its Williams Communications Solutions business unit
in existence on the Amendment No. 4 Effective Date (except for the portion of
such unit described in clause (b) below) and (y) all of the capital stock of ATL
held by the Borrower, Holdings or any of its Subsidiaries for fair market value
and for Net Proceeds in cash in an aggregate amount of at least $700,000,000.

     (b) Not later than December 31, 2001, Holdings and the Borrower shall have
sold or otherwise disposed of, or caused to be sold or otherwise disposed of, to
one or more Persons that are not Affiliates of Holdings or any of its
Subsidiaries, in one or more transactions, substantially all of the Canadian
assets of its Williams Communications Solutions business unit in existence on
the Amendment No. 4 Effective Date.

     SECTION 5.18. Qualifying Issuances. Not later than December 31, 2001, the
Borrower and/or Holdings shall have consummated Qualifying Issuances for Net
Proceeds in cash in an aggregate amount of at least $500,000,000; provided that
Net Proceeds in cash in an aggregate amount of not more than $350,000,000 shall
have

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resulted from Qualifying Issuances described in clause (ii) or (iii) of the
definition thereof.

                                    ARTICLE 6
                               NEGATIVE COVENANTS

     Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, each of Holdings and the Borrower covenants and agrees
with the Lenders that:

     SECTION 6.01. Indebtedness; Certain Equity Securities. Holdings and the
Borrower will not, and will not permit any other Restricted Subsidiary to,
create, incur, assume or permit to exist any Indebtedness, except:

     (a) Indebtedness under the Loan Documents;

     (b) Indebtedness of Holdings under Qualifying Holdings Debt;

     (c) Indebtedness of Holdings under the High Yield Notes and refinancings
thereof, provided that any Indebtedness issued in any such refinancing shall be
on terms no less favorable to Holdings and its Restricted Subsidiaries than the
High Yield Notes, shall be in an aggregate principal amount no greater than the
High Yield Notes refinanced and shall not require any payment of principal
thereof (upon maturity or by mandatory sinking fund, mandatory redemption,
mandatory prepayment or otherwise) prior to the date that is one year after the
Term Maturity Date;

     (d) ADP Outstandings in an aggregate amount not to exceed $750,000,000 at
any time outstanding;

     (e) Indebtedness existing on the date hereof and set forth in Schedule 6.01
and extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof or result in an earlier
maturity date or decrease the Weighted Average Life to Maturity thereof;

     (f) Indebtedness of Holdings to any Subsidiary and of any Restricted
Subsidiary to any other Subsidiary; provided that Indebtedness of any Subsidiary
that is not a Loan Party to any Loan Party shall be subject to Section 6.04;

     (g) Guarantees by Holdings of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary; provided
that Guarantees by Holdings, the Borrower or any Subsidiary Loan Party of
Indebtedness of any Subsidiary that is not a Loan Party shall be subject to
Section 6.04;

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     (h) Indebtedness of any Person that becomes a Restricted Subsidiary or is
merged into a Restricted Subsidiary after the date hereof (provided that such
Indebtedness exists at the time such Person becomes a Restricted Subsidiary and
is not created in contemplation of or in connection with such Person becoming a
Restricted Subsidiary) and extensions, renewals or replacements of any such
Indebtedness that do not increase the principal amount thereof or result in an
earlier maturity date or decreased Weighted Average Life to Maturity thereof;

     (i) Indebtedness in respect of performance, surety or appeal bonds and
Guarantees incurred or provided in the ordinary course of business securing the
performance of contractual, franchise, lease, self-insurance or license
obligations and not in connection with an incurrence of Indebtedness;

     (j) Indebtedness in respect of customary agreements providing for
indemnification, purchase price adjustments after closing or similar obligations
in connection with the disposition of any assets (other than Guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such assets
for the purpose of financing such acquisition); provided that (i) any such
disposition is permitted by Section 6.05, (ii) the aggregate principal amount of
such Indebtedness does not exceed the gross proceeds actually received by
Holdings or any Restricted Subsidiary in connection with such disposition and
(iii) to the extent the gross proceeds thereof constitute Net Proceeds
hereunder, such Net Proceeds are applied in accordance with Sections 2.08(f) and
2.11(b);

     (k) Indebtedness of Holdings and the Restricted Subsidiaries pursuant to
Hedging Agreements entered into with Lenders or their affiliates in the ordinary
course of business and not for speculative purposes;

     (l) [Intentionally deleted];

     (m) [Intentionally deleted];

     (n) [Intentionally deleted];

     (o) other Indebtedness of Holdings or any Restricted Subsidiary in an
aggregate principal amount at any time outstanding, together with the aggregate
amount of Attributable Debt in respect of all Sale and Leaseback Transactions
then outstanding, not exceeding 15% of the consolidated net property, plant and
equipment of Holdings and the Restricted Subsidiaries at such time;

     (p) Indebtedness of the Borrower consisting of Qualifying Borrower
Indebtedness;

     (q) Permitted Specified Security Hedging Transactions;

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     (r) Indebtedness of Holdings or the Borrower incurred pursuant to a
Qualifying Issuance; provided that the aggregate Net Proceeds in cash received
by Holdings and/or the Borrower from the issuance of such Indebtedness, plus the
Net Proceeds in cash from any Sale and Leaseback Transaction constituting a
Qualifying Issuance shall not exceed $350,000,000;

     (s) Indebtedness with respect to industrial revenue bonds issued for the
benefit of the Borrower, Holdings or any Restricted Subsidiary in an aggregate
principal or face amount not to exceed $50,000,000;

     (t) unsecured Indebtedness of Holdings in an aggregate principal amount not
to exceed $100,000,000 incurred prior to the consummation of the Structured Note
Financing so long as (i) the proceeds of such Indebtedness are used solely to
make the capital contributions described in Section 6.04(u) and (ii) the terms
and conditions of any such Indebtedness shall have been approved by all the
Incremental Facility Arrangers (if any) and the Administrative Agent prior to
the issuance thereof;

     (u) unsecured Indebtedness of Holdings owed to the Structured Note Trust in
an aggregate principal amount up to $1,500,000,000 in connection with the
consummation of the Structured Note Financing, so long as the terms and
conditions of such Indebtedness shall have been approved by all the Incremental
Facility Arrangers (if any) and the Administrative Agent prior to the issuance
thereof; and

     (v) on any date on or after the Leverage Target Date, Indebtedness of the
Borrower owing to a Receivables Subsidiary under a Permitted Receivables
Financing;

provided that, notwithstanding anything in this Agreement to the contrary, the
Borrower and the other Restricted Subsidiaries may not Guarantee any
Indebtedness of Holdings under (i) the High Yield Notes or (ii) any Qualifying
Holdings Debt.

     SECTION 6.02. Liens. (a) Holdings and the Borrower will not, and will not
permit any other Restricted Subsidiary to, create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by it,
or assign or sell any income or revenues or rights in respect of any thereof,
except:

          (i) Liens created under the Loan Documents (including, without
     limitation, Liens securing Indebtedness of Holdings and the Parent created
     thereunder in accordance with Section 5.11B(d));

          (ii) Permitted Encumbrances;

          (iii) Liens on any ADP Property securing only ADP Obligations;

          (iv) any Lien on any property or asset of Holdings or any Restricted
     Subsidiary existing on the date hereof and set forth in Schedule 6.02;
     provided that (A) such Lien shall not apply to any other property or asset
     of Holdings or any Restricted Subsidiary and (B) such Lien shall secure
     only those obligations which

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     it secures on the date hereof and extensions, renewals and replacements
     thereof that do not increase the outstanding principal amount thereof or
     decrease the Weighted Average Life to Maturity thereof;

          (v) any Lien existing on any property or asset prior to the
     acquisition thereof by Holdings or any Restricted Subsidiary or existing on
     any property or asset of any Person that becomes a Restricted Subsidiary
     after the date hereof prior to the time such Person becomes a Subsidiary;
     provided that (A) such Lien is not created in contemplation of or in
     connection with such acquisition or such Person becoming a Restricted
     Subsidiary, as the case may be, (B) such Lien shall not apply to any other
     property or assets of Holdings or any Restricted Subsidiary and (C) such
     Lien shall secure only those obligations which it secures on the date of
     such acquisition or the date such Person becomes a Restricted Subsidiary,
     as the case may be, and extensions, renewals and replacements thereof that
     do not increase the outstanding principal amount thereof or decrease the
     Weighted Average Life to Maturity thereof;

          (vi) Liens in favor of the Borrower or any Subsidiary Loan Party;

          (vii) Liens on property of Holdings or any Restricted Subsidiary
     consisting of, or securing, licenses of such property;

          (viii) Liens of a Specified Security securing Permitted Specified
     Security Hedging Transactions with respect to such Specified Security;

          (ix) on any date on or after the Leverage Target Date, Liens created
     in connection with Permitted Receivables Financings, including, without
     limitation, Liens on proceeds in any form and bank accounts in which any
     such proceeds are deposited; provided that, except for the assets
     transferred pursuant to Permitted Receivables Dispositions made in
     connection with such Permitted Receivables Financings, no such Lien may
     extend to any assets of Borrower or any Subsidiary of the Borrower that is
     not a Receivables Subsidiary; and

          (x) other Liens securing Indebtedness at any time outstanding that,
     together with the aggregate amount of Attributable Debt in respect of all
     Sale and Leaseback Transactions then outstanding, does not exceed 5% of the
     consolidated net property, plant and equipment of Holdings and the
     Restricted Subsidiaries at such time.

     (b) Notwithstanding anything to the contrary contained herein, Holdings and
the Borrower will not, and will not permit any other Restricted Subsidiary to,
create, incur, assume or permit to exist any Lien on any of its assets to secure
(i) except in accordance with Section 5.11B(d), any obligations in respect of
the High Yield Notes or any refinancing thereof, permitted under Section
6.01(c), or (ii) except in accordance with Section 5.11B(d), any Qualifying
Holdings Debt.

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     SECTION 6.03. Fundamental Changes. (a) Neither Holdings nor the Borrower
will, nor will they permit any other Restricted Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Person may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any Person
may merge into any Restricted Subsidiary in a transaction in which the surviving
entity is a Restricted Subsidiary and (iii) any Restricted Subsidiary may
liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders; provided that any such merger
involving a Person that is not a wholly owned Restricted Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by Section
6.04.

     (b) The Borrower will not, and will not permit any other Restricted
Subsidiary to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto.

     (c) Holdings will not engage in any business or activity other than (i) the
ownership of all of the outstanding Equity Interests in the Borrower, (ii) the
issuance of the High Yield Notes, (iii) issuances of Qualifying Holdings Debt,
(iv) issuances of its Equity Interests, (v) the holding of 100% of the Equity
Interests of any Unrestricted Subsidiary which is engaged exclusively in the
buying, selling and trading of telecommunications services as a commodity on a
developing or an established market (a "Trading Subsidiary") and (vi) the
holding of Qualifying Borrower Indebtedness permitted under Section 6.01(q) and,
with respect to each of the foregoing, activities incidental thereto. Holdings
will not own or acquire any assets (other than Qualifying Equity Interests in
the Borrower, Qualifying Borrower Indebtedness, Equity Interests in any Trading
Subsidiary, cash and Cash Equivalent Investments) or incur any liabilities
(other than liabilities under the Loan Documents, liabilities in respect of the
High Yield Notes, liabilities in respect of Qualified Holdings Debt permitted
hereunder, liabilities in respect of the Structured Note Financing, liabilities
imposed by law, including tax liabilities, and other liabilities incidental to
its existence and permitted business and activities).

     SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.
Holdings will not, and will not permit any Restricted Subsidiary to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Restricted Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit (collectively, "Investments"),
except:

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     (a) Cash Equivalent Investments;

     (b) Investments existing on the date hereof and set forth on Schedule 6.04;

     (c) Investments by Holdings and the Restricted Subsidiaries in Equity
Interests in Subsidiaries; provided that, (i) the aggregate amount of
Investments by Loan Parties in, and Guarantees by Loan Parties of Indebtedness
of, Subsidiaries that are not Loan Parties (including, without limitation, any
Deemed Subsidiary Investment pursuant to Section 6.14) shall be subject to the
proviso to THIS SECTION 6.04 AND (ii) all Equity Interests acquired or held by
Holdings pursuant to THIS SECTION 6.04(c) SHALL be Qualifying Equity Interests
in the Borrower or Equity Interests in a Trading Subsidiary;

     (d) loans or advances made by Holdings to any Restricted Subsidiary and
made by any Restricted Subsidiary to any other Restricted Subsidiary; provided
that the amount of such loans and advances made by Loan Parties to Subsidiaries
that are not Loan Parties shall be subject to the proviso to THIS SECTION 6.04;

     (e) Guarantees constituting Indebtedness permitted by Section 6.01;
provided that (i) no Restricted Subsidiary shall Guarantee any High Yield Notes,
any Indebtedness of Holdings or the Borrower constituting a Qualifying Issuance
or Qualifying Holdings Debt and (ii) the aggregate principal amount of
Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any
Loan Party shall be subject to the proviso to THIS SECTION 6.04

     (f) INVESTMENTS received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;

     (g) acquisitions by the Borrower of ADP Property for consideration paid on
and prior to any date not exceeding Additional Capital as of such date; minus
(i) Investments permitted under clause (ii) of the proviso to THIS SECTION 6.04
made on or prior to such date and (iii) Capital Expenditures permitted under
Section 6.08(b) made on or prior to such date;

     (h) Hedging Agreements permitted under Section 6.01(k);

     (i) Capital Expenditures made in accordance with Section 6.08;

     (j) subject to the proviso to THIS SECTION 6.04, Investments in the
Telecommunications Business;

     (k) subject to the proviso to THIS SECTION 6.04, Investments in Existing
International Joint Ventures; provided that the acquisition by Holdings or any
Restricted Subsidiary of any equity interest in Algar Telecom S.A. (formerly
known as Lightel S.A.) owned by the Parent or its subsidiaries (other than
Holdings and the Subsidiaries) shall not be permitted under THIS CLAUSE (k) but
shall only be permitted under clause (p) of THIS SECTION 6.04;

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<PAGE>   108
     (l) exchanges and substitutions of ADP Property for like property which
take place prior to the occurrence of the Completion Date, the Expiration Date,
the Termination Date, or an ADP Event of Default, Environmental Trigger or
Unwind Event under the Operative Documents;

     (m) any Investment by a Restricted Subsidiary in any Person engaged in the
Telecommunication Business if such Investment is made in connection with an
agreement by such Person to utilize certain of the Borrower's or the Subsidiary
Loan Parties' Telecommunications Business, provided that, at any date, (i) the
aggregate amount of Investments made in all such Persons at any time outstanding
pursuant to THIS PARAGRAPH (m) (valued at the cost of acquisition thereof,
without regard to any increase or decrease in the value thereof based on
subsequent performance of such Person, but net of any distributions received by
the Borrower or any Subsidiary Loan Party in respect of such Investment) shall
not exceed 15% of Consolidated Assets at such time and (ii) the aggregate amount
of such Investments made in all such Persons with cash or Cash Equivalent
Investments that are at any time outstanding pursuant to THIS PARAGRAPH (m)
shall not exceed 5% of Consolidated Assets;

     (n) (i) loans to directors, officers and employees of Holdings or any
Restricted Subsidiary all of the proceeds of which are used (A) to pay
relocation expenses of any such director, officer or employee or (B) to purchase
Equity Interests in Holdings pursuant to and in accordance with stock option
plans or other benefit plans for directors, officers and employees of Holdings
and its Restricted Subsidiaries, provided that, in the case of any of the Loans
referred to in THIS SUBCLAUSE (B), any proceeds to Holdings of any such
purchases of Equity Interests shall be contributed to the Borrower and (ii)
other loans to directors, officers and employees of Holdings and its Restricted
Subsidiaries made in the ordinary course of business in an aggregate principal
amount not to exceed $5,000,000 at any time outstanding;

     (o) trade accounts receivable for goods sold or services provided arising
in the ordinary course of business and on customary payment terms (not to exceed
120 days after the date such receivables are accrued in accordance with GAAP);

     (p) Investments for which the consideration paid by Holdings and its
Restricted Subsidiaries consists exclusively of Qualifying Equity Interests in
Holdings;

     (q) Investments made in any Person (a "REINVESTMENT PERSON") in whom the
Borrower or any of its Subsidiaries has, or at any time after the Closing Date
had, an Investment permitted under clause (b), (f) or (p) above or this clause
(q) (an "ORIGINAL INVESTMENT"); provided that the aggregate amount of
Investments in any Reinvestment Person permitted under this clause (q) may not
exceed the aggregate amount of the cash proceeds received, within 270 days prior
to the making of such Investment, by the Borrower and its Subsidiaries from
sales or other dispositions of, or distributions with respect to Original
Investments in such Reinvestment Person;

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<PAGE>   109

     (r) Permitted Specified Security Hedging Transactions; and

     (s) Investments in Persons that become Subsidiary Loan Parties if such
Persons, prior to such Investments, were engaged principally in the transmission
of voice, video or data through or over owned or leased fiber optic cable and/or
the holding, developing or constructing of assets or technology used therein;

     (t) Letters of Credit to support obligations of a Trading Subsidiary
incurred in the ordinary course of business; and

     (u) capital contributions made by Holdings to the Borrower and by the
Borrower to the Structured Note Trust, in each case in an aggregate principal
amount not to exceed $100,000,000 and in order to consummate the Structured Note
Financing;

     (v) Investments in Receivables Subsidiaries made in connection with
Permitted Receivables Financings;

provided that the aggregate amount of all Investments (valued at the cost of
acquisition thereof, without regard to any increase or decrease in the value
thereof based on subsequent performance of the Person in which such Investment
is held), but net, in case of each such Investment (but not below zero), of any
distributions received by the Borrower or any Subsidiary Loan Party in respect
of such Investment and any proceeds received upon any disposition (other than a
disposition to Holdings or any of its Subsidiaries or the Parent or any of its
Subsidiaries) of such Investment, made pursuant to Sections 6.04(j) and 6.04(k)
on or prior to any date, or referred to in Section 6.04(c)(i), the proviso to
Section 6.04(d) and Section 6.04(e)(ii) and made on or prior to such date, shall
not exceed the sum of an amount (which amount, for purposes of this proviso
only, shall not be less than zero) equal to (x) the amount of Additional Capital
as of such date minus (y) (A) acquisitions of ADP Property permitted under
Section 6.04(g) made on or prior to such date and (B) Capital Expenditures
permitted under Section 6.08(b) made on or prior to such date.

     SECTION 6.05. Asset Sales. Holdings and the Borrower will not, and will not
permit any other Restricted Subsidiary to, sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interests owned by it, nor will
Holdings permit any of its Restricted Subsidiaries to issue any additional
Equity Interests, except:

     (a) sales, transfers, leases or other dispositions of fiber optic cable
capacity, sales of inventory, and sales of used or surplus equipment and Cash
Equivalent Investments, in each case in the ordinary course of business;

     (b) sales, transfers and dispositions to the Borrower or a Subsidiary;
provided that any such sales, transfers or dispositions involving a Subsidiary
that is not a Loan Party shall be made in compliance with Section 6.09;

     (c) issuances to the Borrower or any other Restricted Subsidiary of Equity
Interests in any Restricted Subsidiary other than the Borrower;

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<PAGE>   110

     (d) issuances to Holdings by the Borrower of Qualifying Equity Interests in
the Borrower;

     (e) Permitted Telecommunications Asset Dispositions;

     (f) sales, transfers and dispositions of assets to the extent constituting
Investments permitted under Section 6.04;

     (g) Restricted Payments permitted under Section 6.07(a) and payments of
principal and interest permitted under Section 6.07(b);

     (h) the sale, transfer or other dispositions required by Section 5.17 or
5.18;

     (i) any transfer of Receivables and Related Transferred Rights (each as
defined in the Security Agreement attached hereto as Exhibit K) in order to
consummate a Permitted Receivables Transaction or to transfer such assets
pursuant to a factoring arrangement; and

     (j) sales, transfers and dispositions of assets (other than
Telecommunications Assets) that are not permitted by any other clause of this
Section; provided that the aggregate fair market value of all assets sold,
transferred or otherwise disposed of in reliance upon THIS SECTION 6.05(j) shall
not exceed $25,000,000 during any fiscal year of the Borrower;

provided that all sales, transfers, leases and other dispositions permitted
under Sections 6.05(e) and 6.05(j) shall be made (x) for fair value and (y) only
if at least 75% of the consideration paid therefor is cash or Cash Equivalent
Investments (or, if less than 75%, the remainder of such consideration consists
of Telecommunications Assets).

     SECTION 6.06. Sale and Leaseback Transactions. Holdings and the Borrower
will not, and will not permit any other Restricted Subsidiary to, enter into any
arrangement, directly or indirectly, whereby it shall (a) sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or purposes as the
property sold or transferred or (b) lease any property, real or personal, from
any entity substantially all of whose activities consist of acquiring,
constructing or developing property to be leased to Holdings and the Restricted
Subsidiaries pursuant to leases intended to cover, and measured by the cost of
or the financing incurred by such entity to finance, such property (the
transactions referred to in clause (a) and (b) being collectively referred to as
"Sale and Leaseback Transactions"), except for (i) sales and leases of ADP
Property pursuant to the ADP in respect of ADP Outstandings not to exceed
$750,000,000 at any time outstanding and (ii) (x) any such sale referred to in
clause (a) above of any fixed or capital assets that is made for cash
consideration in an amount not less than the cost of such fixed or capital asset
and is consummated within 270 days after the Borrower or such other Restricted
Subsidiary acquires or completes the construction of such fixed or capital asset
and (y)

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<PAGE>   111

any such lease referred to in clause (b) above providing for rental payments
measured by the cost of the property leased or the financing incurred by the
lessor thereof to acquire, construct or develop the property so leased; provided
that the sum of the aggregate amount of Attributable Debt in respect of all such
Sale and Leaseback Transactions permitted under THIS CLAUSE (ii) at any time
outstanding (other than any such Attributable Debt with respect to any Sale and
Leaseback Transaction constituting a Qualifying Issuance) and the aggregate
amount of Indebtedness secured by Liens permitted by Section 6.02(a)(viii) at
such time outstanding shall not exceed 5% of consolidated net property, plant
and equipment of Holdings and the Restricted Subsidiaries at such time. For
purposes of determining compliance with the proviso set forth in the immediately
preceding sentence, Capital Lease Obligations shall not in any event be included
in the calculation of "Attributable Debt."

     SECTION 6.07. Restricted Payments; Certain Payments of Indebtedness. (a)
Neither Holdings nor the Borrower will, nor will they permit any other
Restricted Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, or enter into any transaction the economic
effect of which is substantially similar to any Restricted Payment, except (i)
Holdings and the Borrower may declare and pay dividends with respect to their
capital stock payable solely in additional shares of their respective common
stock, (ii) Restricted Subsidiaries (other than the Borrower) may declare and
pay dividends ratably with respect to their capital stock, (iii) Holdings may
make Restricted Payments, not exceeding $3,000,000 during any fiscal year,
pursuant to and in accordance with stock option plans or other benefit plans for
management or employees of Holdings and the Restricted Subsidiaries; (iv) so
long as no Default shall have occurred and be continuing or result from the
making of such payment, the Borrower may pay dividends to Holdings at such times
and in such amounts as shall be necessary to permit Holdings to discharge, to
the extent permitted hereunder, its permitted liabilities; (v) on and after the
Leverage Target Date, Holdings may declare and pay dividends in cash with
respect to its convertible preferred stock outstanding as of the Amendment No. 4
Effective Date in an amount not exceeding $40,000,000 in any fiscal year and the
Borrower may declare and pay dividends to Holdings to permit Holdings to declare
and pay such dividends and (vi) at any time after the consummation of the
Structured Note Financing, the Borrower may declare and pay a dividend to
Holdings so long as (x) the aggregate amount of such dividend shall not exceed
the principal amount of the Structured Note Bridge Indebtedness outstanding at
the time such dividend is paid plus accrued interest thereon, (y) no Default has
occurred and is continuing or would result therefrom and (z) immediately upon
receipt thereof, Holdings shall apply all of the proceeds of such dividend to
repay in full the Structured Note Bridge Indebtedness then outstanding.

     (b) Neither Holdings nor the Borrower will, nor will they permit any
Restricted Subsidiary to, make, directly or indirectly, any voluntary payment or
other distribution (whether in cash, securities or other property) of or in
respect of principal of or interest on any High Yield Notes, any Qualifying
Holdings Debt or any Qualifying Borrower Indebtedness (collectively "Specified
Indebtedness"), or any voluntary payment or other distribution (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition,

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<PAGE>   112

cancellation or termination of any Specified Indebtedness (or enter into any
transaction the economic effect of which is substantially similar to any of the
foregoing), except, provided no Default has occurred and is continuing or would
result therefrom, payments of regularly scheduled interest as and when due in
respect of any Specified Indebtedness other than Qualifying Borrower
Indebtedness.

     SECTION 6.08. Limitation on Capital Expenditures. (a) Capital Expenditures
(other than Capital Expenditures permitted under Section 6.08(b) below) for any
fiscal year set forth below shall not exceed the amount set forth below opposite
such fiscal year:

<TABLE>
<CAPTION>
          Fiscal Year                                   Amount
          -----------                                   ------
<S>                                                 <C>
          2001                                      $2,750,000,000
          2002                                      $2,500,000,000
          2003                                      $2,250,000,000
          2004                                      $2,250,000,000
          2005                                      $2,250,000,000
          2006 and each fiscal year thereafter      $2,800,000,000
</TABLE>

provided that if the aggregate amount of Capital Expenditures (other than
Capital Expenditures permitted under Section 6.08(b) below) actually made in any
such period or fiscal year shall be less than the limit with respect thereto set
forth above (before giving effect to any increase therein pursuant to this
proviso) (the "Base Amount"), then an amount equal to 50% of such shortfall may
be added to the amount of such Capital Expenditures permitted for the
immediately succeeding fiscal year (such amount to be added for any fiscal year,
the "Rollover Amount"); provided further that any Capital Expenditures (other
than Capital Expenditures permitted under Section 6.08(b) below) made during any
fiscal year for which any Rollover Amount shall have been so added shall be
applied, first, to the Rollover Amount added for such fiscal year and, second,
to the Base Amount for such fiscal year.

     (b) In addition to Capital Expenditures permitted under Section 6.08(a)
above, Holdings and the Restricted Subsidiaries may make (i) Capital
Expenditures consisting of acquisitions of ADP Property permitted under Section
6.04(g) or 6.04(l) and (ii) Capital Expenditures on any date after the Amendment
No. 4 Effective Date in an aggregate amount not to exceed Additional Capital as
of such date minus (A) Investments permitted under clause (ii) of the proviso to
Section 6.04 made on or prior to such date and (B) purchases of ADP Property
permitted under Section 6.04(g) made on or prior to such date.

     SECTION 6.09. Transactions with Affiliates. Neither Holdings nor the
Borrower will, nor will they permit any other Restricted Subsidiary to, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of their respective Affiliates, except (a) transactions
that are at prices and on terms and conditions not less favorable to Holdings,
the Borrower or such other Restricted Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) transactions between or
among the Borrower and the Subsidiary Loan Parties not involving any other
Affiliate, (c)

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<PAGE>   113

any Restricted Payment permitted by Section 6.07 and (d) transactions required
to be effected pursuant to, and on terms provided for in, existing agreements
(as in effect on the date hereof) listed in Schedule 6.09 hereto.

     SECTION 6.10. Restrictive Agreements. Neither Holdings nor the Borrower
will, nor will they permit any other Restricted Subsidiary to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of Holdings or any Restricted Subsidiary to create, incur or permit to
exist any Lien upon any of its property or assets, or (b) the ability of any
Restricted Subsidiary to pay dividends or other distributions with respect to
any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Restricted Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Restricted Subsidiary; provided that (i) the foregoing
shall not apply to restrictions and conditions imposed by law or by any Loan
Document, the High Yield Notes or, to the extent that any such restrictions
therein, taken as a whole, are no more restrictive than those contained in the
High Yield Notes, any Qualifying Holdings Debt, (ii) the foregoing shall not
apply to restrictions and conditions existing on the date hereof identified on
Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment
or modification expanding the scope of, any such restriction or condition),
(iii) the foregoing shall not apply to customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is
to be sold and such sale is permitted hereunder, (iv) Section 6.10(a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness and (v) Section 6.10(a) of the foregoing shall not apply to
customary provisions in leases and other contracts restricting the assignment
thereof.

     SECTION 6.11. Fiscal Year. Holdings and the Borrower will not, and will not
permit any other Restricted Subsidiary to, change its fiscal year from a fiscal
year ending December 31.

     SECTION 6.12. Change in Business. Holdings and the Borrower will not, and
will not permit any other Restricted Subsidiary to, engage in any material line
of business other than the Telecommunications Business.

     SECTION 6.13. Amendment of Material Documents. Holdings and the Borrower
will not, and will not permit any other Restricted Subsidiary to, without the
prior written consent of the Required Lenders, consent to any amendment,
modification or waiver of (a) its certificate of incorporation, by-laws or other
organizational documents (except for the filing of a Certificate of Designation
with the Secretary of State of Delaware relating to the issuance of preferred
securities that are Qualifying Equity Interests of such Person, to the extent
provided for in its certificate of incorporation, by-laws or other
organizational documents), (b) the Other Financing Documents, (c) any agreements
governing any Qualifying Holdings Debt, (d) the Parent Indemnity or (e) the
Operative Documents, in each of the foregoing cases if such amendment,
modification of waiver could reasonably be expected to have (i) an adverse
effect on the ability of any Loan Party

                                       93

<PAGE>   114

to perform any of its obligations under any Loan Document or the rights of, or
benefits available to, the Lenders under any Loan Document or (ii) a Material
Adverse Effect.

     SECTION 6.14. Designation of Unrestricted Subsidiaries. Holdings and the
Borrower will not designate any Restricted Subsidiary (other than a newly
created Subsidiary in which no Investment has previously been made) as an
Unrestricted Subsidiary (a "Subsidiary Designation") unless:

     (i)   no Default shall have occurred and be continuing at the time of or
           after giving effect to such Subsidiary Designation;

     (ii)  after giving effect to such Subsidiary Designation, Holdings would be
           in compliance with the covenants contained in Section 6.08 and
           Sections 6.15 through 6.19 on a pro forma basis as if such Subsidiary
           Designation had been made on the first day of the period of four
           fiscal quarters most recently ended in respect of which financial
           statements have been delivered by the Company pursuant to Section
           5.01(a) or 5.01(b);

     (iii) Holdings has delivered to the Administrative Agent (x) written notice
           of such Subsidiary Designation and (y) a certificate of a Financial
           Officer setting forth in reasonable detail calculations demonstrating
           pro forma compliance with the financial covenants contained in
           Section 6.08 and Sections 6.15 through 6.19, as required by clause
           (ii) above; and

     (iv)  on the date of such Subsidiary Designation, Holdings and the Borrower
           would not be prohibited by Section 6.04(c) and the proviso to Section
           6.04 from making an Investment (a "Deemed Subsidiary Investment") in
           an aggregate amount equal to the fair market value (valued at the
           date of such Subsidiary Designation) of (x) the net assets of such
           Restricted Subsidiary or (y) if less than 100% of the Equity
           Interests in such Restricted Subsidiary are held by Holdings and its
           Restricted Subsidiaries, in an aggregate amount equal to the
           percentage interest of Holdings and the Restricted Subsidiaries in
           such net assets.

     Holdings and the Borrower will not, and will not permit any other
Restricted Subsidiary to (x) Guarantee any Indebtedness of any Unrestricted
Subsidiary, (y) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary or (z) be directly or indirectly liable for any other
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon (or cause such Indebtedness or the
payment thereof to be accelerated, payable or subject to repurchase prior to its
final scheduled maturity) upon the occurrence of a default with respect to any
other Indebtedness that is Indebtedness of an Unrestricted Subsidiary, except in
the case of clause (x) or (y) to the extent permitted under Section 6.01 and
Section 6.04 hereof. In no event may the Borrower be designated as an
Unrestricted Subsidiary.

     SECTION 6.15. Total Net Debt to Contributed Capital Ratio. The Total Net
Debt to Contributed Capital Ratio shall at no time prior to January 1, 2002
exceed .65 to 1.00.

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<PAGE>   115

         SECTION 6.16. Minimum EBITDA. The amount equal to (i) EBITDA for the
period of four fiscal quarters ending during any period set forth below plus
(ii) ADP Interest Expense for such period minus (iii) gains for such period
attributable to Dark Fiber and Capacity Dispositions plus (iv) Dark Fiber and
Capacity Proceeds for such period shall not be less than the amount set forth
below opposite such period:

<TABLE>
<CAPTION>
                    PERIOD                                    AMOUNT
                    ------                                 ------------
<S>                                                        <C>
                    January 1, 2001-March 31, 2001         $200,000,000
                    April 1, 2001-June 30, 2001            $300,000,000
                    July 1, 2001-September 30, 2001        $350,000,000
                    October 1, 2001-December 31, 2001      $350,000,000
</TABLE>

         SECTION 6.17. Total Leverage Ratio. (a) The Total Leverage Ratio during
any period set forth below shall not exceed the ratio set forth below opposite
such period:

<TABLE>
<CAPTION>
                                                          TOTAL
                    PERIOD                                LEVERAGE RATIO
                    ------                                --------------
<S>                                                       <C>
                    March 31, 2002-December 30, 2002      12.50:1.00
                    December 31, 2002-December 30, 2003   9.50:1.00
                    December 31, 2003 and thereafter      4.00:1.00
</TABLE>

         SECTION 6.18. Senior Leverage Ratio. The Senior Leverage Ratio during
any period set forth below shall not exceed the ratio set forth below opposite
such period:

<TABLE>
<CAPTION>
                                                          SENIOR
                    PERIOD                                LEVERAGE RATIO
                    ------                                --------------
<S>                                                       <C>
                    March 31, 2002-December 30, 2002      5.25:1.00
                    December 31, 2002-December 30, 2003   3.25:1.00
                    December 31, 2003 and thereafter      2.50:1.00
</TABLE>

         SECTION 6.19. Interest Coverage Ratio. The Interest Coverage Ratio for
any period of four consecutive fiscal quarters ending during any period set
forth below shall not be less than the ratio set forth below opposite such
period:

<TABLE>
<CAPTION>
                                                          INTEREST
                    PERIOD                                COVERAGE RATIO
                    ------                                --------------
<S>                                                       <C>
                    June 30, 2002-June 29, 2003           1.00:1.00
                    June 30, 2003-December 30, 2003       1.50:1.00
                    December 31, 2003 and thereafter      2.00:1.00
</TABLE>

         SECTION 6.20. Financial Covenant Non-Compliance Cure. (a) At any time
prior to the consummation of the Spin-Off, in the event that Holdings and the
Restricted Subsidiaries fail to comply with any of Sections 6.15 through 6.19,
inclusive, for any period or on any date set forth therein, the Parent shall
have the right, but not the obligation, to make, within three Business Days of
the date upon which financial statements as of the last day of such period are
delivered or required to be delivered pursuant to Section 5.01(a) or (b), a cash
equity contribution to Holdings in exchange for

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<PAGE>   116

Qualifying Equity Interests of Holdings (which Holdings shall thereupon
contribute to the Borrower, in exchange for Qualifying Equity Interests of the
Borrower) to cure such failure.

         (b) If such contribution is made to cure a failure to comply with the
covenant contained in Section 6.16, such contribution shall be in an amount
sufficient, when added to EBITDA for the applicable period, to enable Holdings
and the Restricted Subsidiaries to comply with such covenant on a consolidated
basis. Upon the making of any such capital contribution to Holdings and to the
Borrower in the amount specified above, the amount so contributed (to the
extent, but only to the extent, of the shortfall in EBITDA for the applicable
period) shall thereafter be deemed to have been EBITDA in the last fiscal
quarter of such period for purposes of all calculations in respect of compliance
with Section 6.16 thereafter.

         (c) If such contribution is made to cure a failure to comply with a
covenant contained in Section 6.15, 6.17, 6.18 or 6.19, such contribution shall
be in an amount sufficient, when applied to repay or prepay Indebtedness of
Holdings and the Restricted Subsidiaries, to enable Holdings and the Restricted
Subsidiaries, on a pro forma basis after giving effect to such contribution and
application, to comply with such covenant on a consolidated basis.

         (d) The right to cure provided in THIS SECTION 6.20 may not be
exercised in respect of more than two consecutive quarters or more than three
times in the aggregate during the term of the Facilities.

                                    ARTICLE 7
                                EVENTS OF DEFAULT

         SECTION 7.01. Events of Default. If any of the following events
("Events of Default") shall occur:

         (a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

         (b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in Section 7.01(a))
payable under this Agreement or any other Loan Document, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three Business Days;

         (c) any representation or warranty made or deemed made by or on behalf
of the Parent or any Loan Party in or in connection with any Loan Document or
any amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial

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<PAGE>   117

statement or other document furnished pursuant to or in connection with any Loan
Document or any amendment or modification thereof or waiver thereunder, shall
prove to have been incorrect in any material respect when made or deemed made;

         (d) (i) Holdings or the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.03 (with respect
to the existence of Holdings or the Borrower), 5.10, 5.11A, 5.11B, 5.13, 5.17,
5.18 or in Article 6, or (i) such failure shall continue unremedied for a period
of 30 days after the earlier to occur of (x) knowledge thereof by any Loan Party
or (y) notice thereof from the Administrative Agent to the Borrower (which
notice will be given at the request of any Lender);

         (e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in Sections 7.01(a), 7.01(b) or 7.01(d)), and such failure shall
continue unremedied for a period of 30 days after the earlier to occur of (i)
knowledge thereof by any Loan Party or (ii) notice thereof from the
Administrative Agent to the Borrower (which notice will be given at the request
of any Lender);

         (f) Holdings or any Restricted Subsidiary shall fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness, when and as the same shall become due and payable
(subject to any applicable grace period);

         (g) any event or condition occurs that results in any Material
Indebtedness or Permitted Receivables Financing becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any Material
Indebtedness or Permitted Receivables Financing or any trustee or agent on its
or their behalf to cause any Material Indebtedness or Permitted Receivables
Financing to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity; provided that THIS SECTION
7.01(g) shall not apply to secured Indebtedness permitted hereunder that becomes
due as a result of the voluntary sale or transfer of the property or assets
securing such Indebtedness;

         (h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of Holdings or any Restricted Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for Holdings or any Restricted Subsidiary or for a substantial
part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;

         (i) Holdings or any Restricted Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or

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hereafter in effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in Section
7.01(h), (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Holdings or any
Restricted Subsidiary or for a substan- tial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors or
(vi) take any action for the purpose of effecting any of the foregoing;

         (j) Holdings or any Restricted Subsidiary shall become unable, admit in
writing its inability or fail generally, to pay its debts as they become due;

         (k) one or more judgments for the payment of money in an aggregate
amount in excess of $25,000,000 shall be rendered against Holdings, any
Restricted Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of Holdings or any Restricted
Subsidiary to enforce any such judgment;

         (l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of Holdings and
the Restricted Subsidiaries in an aggregate amount exceeding $25,000,000 for all
periods;

         (m) any Lien (if any) purported to be created under any Collateral
Document shall cease to be, or shall be asserted by any Loan Party not to be, a
valid and perfected Lien on any Collateral having a fair market value in excess
of $1,000,000, with the priority required by the applicable Collateral Document,
except (i) as a result of the sale or other disposition of the applicable
Collateral in a transaction permitted under the Loan Documents or (ii) pursuant
to a Collateral Release Event;

         (n) any Guarantee by Holdings or any Subsidiary Loan Party under any
Loan Document shall cease for any reason (other than the merger out of existence
of such Guarantor pursuant to a transaction permitted hereunder or pursuant to
the express terms of such Guarantee) to be in full force and effect, or Holdings
or any Subsidiary Loan Party shall so assert in writing;

         (o) a Change in Control shall occur; and

         (p) at any time prior to the consummation of the Spin-Off, the senior
unsecured long-term debt of the Parent shall be rated less than BBB- by S&P or
less than Baa3 by Moody's;

then, and in every such event (other than an event with respect to Holdings or
the Borrower described in Section 7.01(h) or 7.01(i)), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the

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Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by Holdings and the Borrower; and in the case of
any event with respect to Holdings or the Borrower described in Section 7.01(h)
or 7.01(i), the Commitments shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest thereon and all fees
and other obligations of the Borrower accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by Holdings and the Borrower.

                                    ARTICLE 8
                                   THE AGENTS

         SECTION 8.01. Appointment, Powers, Immunities. (a) Each Lender,
Swingline Lender and Issuing Bank hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto.

         (b) The institutions serving as Agents hereunder shall have the same
rights and powers in their capacities as Lenders, Swingline Lenders or Issuing
Banks, as the case may be, as any other Lenders, Swingline Lenders or Issuing
Banks and may exercise the same as though they were not Agents, and each such
institution and its affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Holdings or any Subsidiary or
other Affiliate thereof as if it were not an Agent hereunder.

         (c) The Agents shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (i) the Agents shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(ii) the Agents shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that an Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 10.02), and (iii) except as expressly set forth in the Loan Documents,
the Agents shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Holdings or any Subsidiary that
is communicated to or obtained by any institution serving as an Agent or any of
its affiliates in any capacity.

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         (d) No Agent shall be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 10.02) or in the absence of its own gross negligence or
wilful misconduct.

         (e) No Agent shall be deemed to have knowledge of any Default unless
and until written notice thereof is given to such Agent by Holdings, the
Borrower or a Lender, and no Agent shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth in any Loan Document, (iv) the validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article 4 or elsewhere in any Loan Document, other than, in the case of the
Administrative Agent, to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

         SECTION 8.02. Reliance by Agents. Each Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. Each
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. Each Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.

         SECTION 8.03. Delegation to Sub-Agents. Each Agent may perform any and
all of its duties and exercise any of its rights and powers by or through any
one or more sub- agents appointed by such Agent. The Agents and any such
sub-agents may perform any and all of their duties and exercise rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.

         SECTION 8.04. Resignation of Agents. Subject to the appointment and
acceptance of a successor Agent as provided in this paragraph, any Agent may
resign at any time by notifying the Lenders, the Issuing Banks and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders and the
Issuing Banks, appoint a successor Agent which shall be a bank organized under
the laws of the United States or any State thereof, having (x) an office in any
State of the United States and (y) capital, surplus and undivided profits
aggregating at least $200,000,000, or an

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affiliate of any such bank. Upon the acceptance of its appointment as Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the Borrower to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Agent's resignation hereunder, the provisions of this
Article and Section 10.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent.

         SECTION 8.05. Non-reliance on Agents or other Lenders. Each Lender
acknowledges that it has, independently and without reliance upon any Agent or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon any Agent, any Issuing Bank or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder.

         SECTION 8.06. Syndication Agent, Incremental Facility Arrangers and Co-
Documentation Agents. Notwithstanding anything in this Agreement or any Loan
Document to the contrary, the Syndication Agent, the Incremental Facility
Arrangers and the Co-Documentation Agents shall have no obligation or
responsibility as such hereunder other than, in the case of the Syndication
Agent or the Incremental Facility Arrangers, as expressly set forth herein.

                                    ARTICLE 9
                               HOLDINGS GUARANTEE

         SECTION 9.01. The Guarantee. Holdings unconditionally and irrevocably
guarantees the full and punctual payment of all present and future indebtedness
and other obligations of the Borrower evidenced by or arising under any Loan
Document and all present and future indebtedness and other obligations of the
Borrower or any other Restricted Subsidiary under any Hedging Agreement
permitted under Section 6.01 (a "Specified Hedging Agreement") as and when the
same shall become due and payable, whether at maturity or by declaration or
otherwise, according to the terms hereof and thereof (including, without
limitation, any Post-Petition Interest). If the Borrower or any other Restricted
Subsidiary fails punctually to pay any indebtedness or other obligation
guaranteed hereby which is due and payable, Holdings unconditionally agrees to
cause such payment to be made punctually as and when the same shall become due
and payable, whether at maturity or by declaration or otherwise, and as if such
payment were made by the Borrower or such other Restricted Subsidiary.

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         SECTION 9.02. Guarantee Unconditional. The obligations of Holdings
under THIS ARTICLE 9 shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:

                  (a) any extension, renewal, settlement, compromise, waiver or
         release in respect of any obligation of the Borrower or any other Loan
         Party under any Loan Document or Specified Hedging Agreement, by
         operation of law or otherwise;

                  (b) any modification, amendment or waiver of or supplement to
         any Loan Document or Specified Hedging Agreement;

                  (c) any release, impairment, non-perfection or invalidity of
         any direct or indirect security, or of any guarantee or other liability
         of any third party, for any obligation of the Borrower or any Loan
         Party under any Loan Document or Specified Hedging Agreement;

                  (d) any change in the corporate existence, structure or
         ownership of the Borrower or any other Loan Party or any insolvency,
         bankruptcy, reorganization or other similar proceeding affecting the
         Borrower or any other Loan Party or its assets, or any resulting
         release or discharge of any obligation of the Borrower or any other
         Loan Party contained in any Loan Document or Specified Hedging
         Agreement;

                  (e) the existence of any claim, set-off or other rights which
         Holdings may have at any time against the Borrower or any other Loan
         Party, any Agent, any Issuing Bank, any Lender or any other Person,
         whether or not arising in connection herewith or any unrelated
         transaction; provided that nothing herein shall prevent the assertion
         of any such claim by separate suit or compulsory counterclaim;

                  (f) any invalidity or unenforceability relating to or against
         the Borrower or any other Loan Party for any reason of any Loan
         Document or Specified Hedging Agreement, or any provision of applicable
         law or regulation purporting to prohibit the payment by any other Loan
         Party of any amount payable by it under any Loan Document or Specified
         Hedging Agreement; or

                  (g) any other act or omission to act or delay of any kind by
         any other Loan Party, any Lender or any other Person or any other
         circumstance that might, but for the provisions of this Section,
         constitute a legal or equitable discharge of Holdings' obligations
         under THIS ARTICLE 9.

         SECTION 9.03. Discharge Only Upon Payment in Full; Reinstatement in
Certain Circumstances. Holdings' obligations under THIS ARTICLE 9 constitute a
continuing guaranty and shall remain in full force and effect until the
Commitments shall have been terminated, all Letters of Credit shall have expired
or been terminated, all Specified Hedging Agreements shall have been terminated
and all amounts payable under the Loan Documents and the Specified Hedging
Agreements shall have been indefeasibly paid in

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full. If at any time any amount payable by the Borrower under any Loan Document
or by the Borrower or any other Restricted Subsidiary under any Specified
Hedging Agreement is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of any Loan Party or otherwise,
Holdings' obligations under THIS ARTICLE 9 WITH respect to such payment shall be
reinstated at such time as though such payment had become due but had not been
made at such time.

         SECTION 9.04. Waiver. Holdings irrevocably waives acceptance hereof,
presentment, demand, protest and any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against the
Borrower or any other Restricted Subsidiary or any other Person.

         SECTION 9.05. Subrogation. When Holdings makes any payment under THIS
ARTICLE 9 with respect to the obligations of the Borrower or any other
Restricted Subsidiary, Holdings shall be subrogated to the rights of the payee
against the Borrower or such other Restricted Subsidiary with respect to the
portion of such obligations paid by Holdings; provided that Holdings shall not
enforce any payment by way of subrogation or contribution against the Borrower
or any Subsidiary so long as any amount payable under any Loan Document or
Specified Hedging Agreement remains unpaid.

         SECTION 9.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by any Loan Party under any Loan Document or
Specified Hedging Agreement is stayed upon the insolvency, bankruptcy or
reorganization of such Loan Party, all such amounts otherwise subject to
acceleration under the terms of such Loan Document or Specified Hedging
Agreement shall nonetheless be payable by Holdings under THIS ARTICLE 9
FORTHWITH on demand by the Administrative Agent made, in the case of any Loans,
at the request of the requisite number of Lenders specified in Section 7.01
hereof or, in the case of obligations under a Specified Hedging Agreement, at
the request of the relevant Lender or Lenders or affiliate or affiliates of such
Lender or Lenders.

         SECTION 9.07. Successors and Assigns. This guarantee is for the benefit
of the Lenders, the Hedge Counterparties and their respective successors and
assigns. If any Loans, participations in Letters of Credit or Swingline Loans or
other amounts payable under the Loan Documents are assigned pursuant to Section
10.04 of the Credit Agreement, or any rights under any Specified Hedging
Agreement are assigned pursuant thereto, the rights under THIS ARTICLE 9, to the
extent applicable to the indebtedness so assigned, shall be transferred with
such indebtedness.

                                   ARTICLE 10
                                  MISCELLANEOUS

         SECTION 10.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications

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provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

         (a) if to Holdings or the Borrower, to it at Williams Communications
Group, Inc., One Williams Center, Suite 2600, Tulsa, Oklahoma 74172, Attention
of (other than administrative notices) Scott E. Schubert (Telecopy No.
918-573-6024) or (for administrative notices) Attention of Kerri Lyle (Telecopy
No. 918-573-6558);

         (b) if to the Administrative Agent, to it at Bank of America, N.A., 901
Main Street, Dallas, Texas 75202, Attention of (other than Borrowing Requests)
Pamela Kurtzman, 64th Floor (Telecopy No. (214) 209-9390) or (for Borrowing
Requests) Judy Schneidmiller, 14th Floor (Telecopy No. 214-209-2118);

         (c) if to Bank of America, as Issuing Bank, to it at 901 Main Street,
64th Floor, Main Street, Dallas, Texas 75202, Attention of Pamela Kurtzman
(Telecopy No. 214- 209-9390);

         (d) if to Chase, as Issuing Bank, to it at 270 Park Avenue, 37th Floor,
New York, New York 10017, Attention of Joe Brusco (Telecopy No. 212-270-4164);

         (e) if to Bank of America, as Swingline Lender, to it at 901 Main
Street, 64th Floor, Main Street, Dallas, Texas 75202, Attention of Pamela
Kurtzman (Telecopy No. 214-209-9390);

         (f) if to Chase, as Swingline Lender, to it at One Chase Manhattan
Plaza, 8th Floor, New York, New York 10081, Attention of Winslowe Ogbourne
(Telecopy No. 212-552-5700); and

         (g) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.

         Any party hereto may change its address or telecopy number for notices
and other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

         SECTION 10.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent, any Issuing Bank, any Swingline Lender or any Lender in
exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Issuing Banks, the Swingline Lenders and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by

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Section 10.02(b), and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Administrative Agent, any Lender, any Issuing Bank or any Swingline Lender
may have had notice or knowledge of such Default at the time.

         (b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by Holdings, the Borrower and the Required Lenders or, in the case
of any other Loan Document, pursuant to an agreement or agreements in writing
entered into by the Administrative Agent and the Loan Party or Loan Parties that
are parties thereto, in each case with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date of payment of the principal amount of
any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.18(b) or 2.18(c)
in a manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the provisions of
this Section or the definition of "Required Lenders" or any other provision of
any Loan Document specifying the number or percentage of Lenders (or Lenders of
any Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release
Holdings or substantially all of the Subsidiary Loan Parties from their
respective Guarantees hereunder under the Subsidiary Guarantee (except as
expressly provided herein or therein), or limit its liability in respect of such
Guarantee, without the written consent of each Lender, (vii) change any
condition set forth in Section 4.03 without the written consent of each
Incremental Lender, or (viii) change any provisions of any Loan Document in a
manner that by its terms adversely affects the rights in respect of payments due
to, or requirements to make loans by, Lenders holding Loans of any Class
differently than those holding Loans of any other Class, without the written
consent of Lenders holding a majority in interest of the outstanding Loans and
unused Commitments of each affected Class; provided further that (A) no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent, any Issuing Bank or any Swingline Lender without the prior
written consent of the Administrative Agent, the affected Issuing Bank or the
affected Swingline Lender, as the case may be, and (B) any waiver, amendment or
modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the Lenders with Commitments or Loans of any Class or
Classes (but not Lenders with Commitments or Loans of any other Class or
Classes) may be effected by an agreement or agreements in writing entered into
by Holdings, the Borrower and the requisite percentage in interest of the
Lenders with Commitments or Loans of the affected Class or Classes.

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         SECTION 10.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Syndication Agent and the Incremental Facility
Arrangers and their respective affiliates, including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent, the
Syndication Agent and the Incremental Facility Arrangers in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments, modifications or waivers
of the provisions thereof (whether or not the transactions contemplated hereby
or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by any Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by the Administrative Agent, the
Syndication Agent, the Incremental Facility Arrangers, any Issuing Bank, any
Swingline Lender or any Lender, including the fees, charges and disbursements of
any counsel for the Administrative Agent, the Incremental Facility Arrangers and
the Syndication Agent, any Issuing Bank, any Swingline Lender or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

         (b) The Borrower shall indemnify the Administrative Agent, the
Syndication Agent, the Incremental Facility Arrangers, the Issuing Banks, the
Swingline Lenders and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by any Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by Holdings or any
Subsidiary, or any Environmental Liability related in any way to Holdings or any
Subsidiary, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.

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         (c) To the extent that the Borrower fails to pay any amount required to
be paid by it to the Administrative Agent, the Incremental Facility Arrangers,
any Issuing Bank or any Swingline Lender under Sections 10.03(a) or 10.03(b),
each Lender severally agrees to pay to the Administrative Agent, the Syndication
Agent, the Incremental Facility Arrangers, any Issuing Bank or any Swingline
Lender, as the case may be, such Lender's pro rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent, the Syndication Agent, the
Incremental Facility Arrangers, any Issuing Bank or any Swingline Lender in its
capacity as such. For purposes hereof, a Lender's "pro rata share" shall be
determined based upon its share of the sum of the total Revolving Exposures,
outstanding Loans (other than Revolving Loans) and unused Commitments (other
than Revolving Commitments) at the time.

         (d) To the extent permitted by applicable law, Holdings and the
Borrower will not and will not permit any other Restricted Subsidiary to assert,
and each hereby waives for itself and on behalf of its subsidiaries, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or
Letter of Credit or the use of the proceeds thereof.

         (e) All amounts due under this Section shall be payable promptly after
written demand therefor.

         SECTION 10.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby (including any
affiliate of any Issuing Bank that issues any Letter of Credit), except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender, each Issuing Bank
and each Swingline Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any affiliate of any Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the Issuing Banks, the Swingline
Lenders and the Lenders) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

         (b) (1) Any Lender may assign to one or more assignees all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitments and the Loans at the time owing to it); provided that (i)
each of the Borrower (except in the case of an assignment to a Lender or an
affiliate of a Lender) and Administrative Agent (except in the case of an
assignment to an affiliate of a Lender) (and, in the case of an assignment of
all or a portion of a Revolving Commitment or any Lender's obligations in
respect of its LC Exposure or Swingline Exposure, the Issuing

                                       107

<PAGE>   128

Banks and the Swingline Lenders) must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or an affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Commitments
or Loans, after giving effect to such assignment, the amount of the Commitments
or Loans of each Class held by each of the assignor Lender and its affiliates
and the assignee Lender and its affiliates (determined in each case as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $1,000,000 unless each of
the Borrower and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that THIS
SECTION 10.04(b)(iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) the parties to each
assignment (excluding any assignment by a Lender to an affiliate of such Lender)
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500, (v) the
parties to each assignment by a Lender to an affiliate of such Lender shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $1,500, (vi) the assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire and (vii) the Incremental Facility Arrangers shall
be notified by the Administrative Agent of any assignment of the Incremental
Facility; and provided further that any consent of the Borrower otherwise
required under this paragraph shall not be required if an Event of Default has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to Section 10.04(d), from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
10.04(e). Each Lender that is an investment fund hereby agrees to notify the
Administrative Agent and the Incremental Facility Arrangers of any change of the
identity of the investment manager for such fund.

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

                                       108

<PAGE>   129

to provide all or any part of such Loan, the Granting Lender shall be obligated
to make such Loan pursuant to the terms hereof. The making of a Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior indebtedness of any SPC, it
will not institute against, or join any other person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof. In
addition, notwithstanding anything to the contrary contained in THIS SECTION
10.04, any SPC may (i) with notice to, but without the prior written consent of,
the Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions (consented to by the Borrower and
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This section may not
be amended without the written consent of each SPC that, at the time of such
proposed amendment, has an outstanding Loan or Loans to the Borrower. For
purposes of Section 10.02 of this Agreement and any other provision of any Loan
Document requiring the consent or approval of any Lender, the Granting Lender
shall, notwithstanding the funding of any Loans by any SPC, have the sole right
to consent to or approve any waiver or amendment of any provision of this
Agreement or any other Loan Document or to exercise any other right to consent
or to grant approval under any Loan Document.

         (c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in any State of the United
States, a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and Holdings, the Borrower, the
Administrative Agent, the Issuing Banks, the Swingline Lenders and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, any Issuing Bank, any Swingline Lender and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

         (d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in Section 10.04(b)
and any written consent to such assignment required by Section 10.04(b), the
Administrative Agent shall accept such

                                       109

<PAGE>   130

Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.

         (e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, any Issuing Bank or any Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) Holdings, the Borrower,
the Administrative Agent, the Issuing Banks, the Swingline Lenders and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
10.02(b) that affects such Participant. Subject to Section 10.04(f), the
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 10.04(b). To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 10.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(c) as though it were a Lender.

         (f) A Participant shall not be entitled to receive any greater payment
under Section 2.15 or 2.17 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.

         (g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

         SECTION 10.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any

                                       110

<PAGE>   131

other Loan Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, any Issuing Bank, any
Swingline Lender or any Lender may have had notice or knowledge of any Default
or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.15, 2.16, 2.17 and 10.03 and Article 8 shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of
this Agreement or any provision hereof.

         SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Administrative Agent or any Issuing Bank constitute the entire contract
among the parties relating to the subject matter hereof and supersede any and
all previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.

         SECTION 10.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

         SECTION 10.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender, Issuing Bank and Swingline Lender and
each of their respective affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other obligations at any time owing by such Lender, Issuing
Bank, Swingline Lender or affiliate to or for the credit or the account of the
Borrower or Holdings against any and all of the obligations of the Borrower or
Holdings, as the case may be, now or hereafter existing under this Agreement
held by such Lender, Issuing Bank or Swingline Lender, irrespective of

                                       111

<PAGE>   132

whether or not such Lender, Issuing Bank or Swingline Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender, Issuing Bank and Swingline Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender, Issuing Bank or Swingline Lender may have.

         SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of
Process. (a) This Agreement shall be construed in accordance with and governed
by the law of the State of New York.

         (b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, any Issuing Bank, any Swingline
Lender or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against Holdings, the
Borrower or their respective properties in the courts of any jurisdiction.

         (c) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in Section 10.09(b). Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

         (d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

         SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO

                                       112

<PAGE>   133

REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

         SECTION 10.11. Headings. Article and Section headings used herein and
the Table of Contents are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

         SECTION 10.12. Confidentiality. Each of the Administrative Agent, the
Issuing Banks, the Swingline Lenders and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its affiliates' (other than affiliates that are
direct competitors of any material business of Holdings and the Restricted
Subsidiaries) directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement (other than a direct competitor of any material business of Holdings
and the Restricted Subsidiaries), (g) with the consent of the Borrower or (h) to
the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to the
Administrative Agent, any Issuing Bank, any Swingline Lender or any Lender on a
nonconfidential basis from a source other than Holdings or the Borrower. For the
purposes of this Section, "Information" means all information received from
Holdings or the Borrower relating to Holdings or the Borrower or its business,
other than any such information that is available to the Administrative Agent,
any Issuing Bank, any Swingline Lender or any Lender on a nonconfidential basis
prior to disclosure by Holdings or the Borrower; provided that, in the case of
information received from Holdings or the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

         SECTION 10.13. Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees,

                                       113

<PAGE>   134

charges and other amounts which are treated as interest on such Loan under
applicable law (collectively the "Charges"), shall exceed the maximum lawful
rate (the "Maximum Rate") which may be contracted for, charged, taken, received
or reserved by the Lender holding such Loan in accordance with applicable law,
the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate
and, to the extent lawful, the interest and Charges that would have been payable
in respect of such Loan but were not payable as a result of the operation of
this Section shall be cumulated and the interest and Charges payable to such
Lender in respect of other Loans or periods shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.

                                       114

<PAGE>   135

         IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be duly executed as of the date first above
written.

                                           WILLIAMS COMMUNICATIONS, LLC

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

                                           WILLIAMS COMMUNICATIONS GROUP, INC.

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

                                           BANK OF AMERICA, N.A.

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

                                           THE CHASE MANHATTAN BANK

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

                                           BANK OF MONTREAL

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

                                      115
<PAGE>   136
                                           THE BANK OF NEW YORK

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

                                           SCOTIABANC INC.

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

                                           ABN AMRO BANK N.V.

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

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

                                           FLEET NATIONAL BANK

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

                                           CIBC INC.

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

                                      116

<PAGE>   137

                                           CREDIT SUISSE FIRST BOSTON

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

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

                                           DEUTSCHE BANK AG
                                           NEW YORK BRANCH AND/OR CAYMAN
                                           ISLAND BRANCH

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

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

                                           CREDIT LYONNAIS NEW YORK BRANCH

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

                                      117

<PAGE>   138

                                           BANK AUSTRIA CREDITANSTALT
                                           CORPORATE FINANCE, INC.

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

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

                                           FIRST UNION NATIONAL BANK

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

                                           IBM CREDIT CORPORATION

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

                                           THE INDUSTRIAL BANK OF JAPAN,
                                           LIMITED, NEW YORK BRANCH

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

                                      118
<PAGE>   139
                                           BANK OF OKLAHOMA N.A.

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

                                           BANK ONE, N.A.

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

                                           KBC BANK, N.V.

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

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

                                           THE FUJI BANK, LIMITED

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

                                      119
<PAGE>   140

Acknowledged and agreed:

CRITICAL CONNECTIONS, INC.
SBCI - PACIFIC NETWORKS, INC.
WCS COMMUNICATIONS SYSTEMS,
     INC.
WCS, INC.
WILLIAMS COMMUNICATIONS OF
     VIRGINIA, INC.
WILLIAMS COMMUNICATIONS
     PROCUREMENT, L.L.C.
WILLIAMS COMMUNICATIONS
     PROCUREMENT, L.P.
WILLIAMS GLOBAL COMMUNICATIONS
     HOLDINGS, INC.
WILLIAMS INTERNATIONAL
     VENTURES COMPANY
WILLIAMS LEARNING NETWORK,
     INC.
WILLIAMS LOCAL NETWORK, INC.
WILLIAMS WIRELESS, INC.
WILLIAMS TECHNOLOGY CENTER, LLC
WILLIAMS COMMUNICATIONS AIRCRAFT, LLC

All By:
       ------------------------------
Title:

                                      120<PAGE>   1
                                                                   EXHIBIT 10.74

                             PARTICIPATION AGREEMENT

                                      AMONG

                          THE WILLIAMS COMPANIES, INC.
                            (A DELAWARE CORPORATION)

                       WILLIAMS COMMUNICATIONS GROUP, INC.
                            (A DELAWARE CORPORATION)

                          WILLIAMS COMMUNICATIONS, LLC
                     (A DELAWARE LIMITED LIABILITY COMPANY)

                                 WCG NOTE TRUST
                           (A DELAWARE BUSINESS TRUST)

                              WCG NOTE CORP., INC.
                            (A DELAWARE CORPORATION)

                              WILLIAMS SHARE TRUST
                           (A DELAWARE BUSINESS TRUST)

                           UNITED STATES TRUST COMPANY
                                   OF NEW YORK

                                       AND

                            WILMINGTON TRUST COMPANY

                           DATED AS OF MARCH 22, 2001

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----

<S>                                                                                                            <C>
ARTICLE I DEFINITIONS AND CERTAIN UNDERSTANDINGS.................................................................1
         Section 1.1       Definitions...........................................................................1
         Section 1.2       Rules of Construction.................................................................1

ARTICLE II CLOSING; AGREEMENTS TO PURCHASE AND SELL..............................................................1
         Section 2.1       Time and Place of Closing.............................................................1
         Section 2.2       Agreements............................................................................2
         Section 2.3       Closing...............................................................................2

ARTICLE III CONDITIONS PRECEDENT.................................................................................4
         Section 3.1       Conditions to the Occurrence of the Closing Date......................................4

ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................7
         Section 4.1       Representations and Warranties of Williams............................................7
         Section 4.2       Representations and Warranties of WCG and WCL........................................10
         Section 4.3       Representations and Warranties of WCG with respect to the Issuer and the
                           Co-Issuer............................................................................13
         Section 4.4       Representations and Warranties of Williams with respect to the Share Trust...........17
         Section 4.5       Representations and Warranties of United States Trust Company of New York............19
         Section 4.6       Representations and Warranties of Wilmington Trust Company...........................20

ARTICLE V COVENANTS; ACKNOWLEDGEMENTS; RIGHTS...................................................................21
         Section 5.1       Covenants of Williams................................................................21
         Section 5.2       Covenants of WCG.....................................................................23

ARTICLE VI INDEMNIFICATION......................................................................................25

ARTICLE VII MISCELLANEOUS.......................................................................................26
         Section 7.1       Survival.............................................................................26
         Section 7.2       Notices..............................................................................26
         Section 7.3       Severability of Provisions...........................................................29
         Section 7.4       Governing Law; Consent to Jurisdiction...............................................29
         Section 7.5       Amendments, Waivers, Etc. ...........................................................31
         Section 7.6       Entire Agreement.....................................................................31
         Section 7.7       Benefit of Agreement.................................................................31
         Section 7.8       Expenses.............................................................................31
         Section 7.9       No Bankruptcy Petitions..............................................................33
         Section 7.10      Limitation of Liability..............................................................33
         Section 7.11      General Limitation of Liability......................................................33
         Section 7.12      Counterparts.........................................................................34
</TABLE>

                                       i
<PAGE>   3

EXHIBIT AND ANNEX

Exhibit A         WCG Information Certificate

Annex A           Definitions and Rules of Construction

                                       ii
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                  This PARTICIPATION AGREEMENT, dated as of March 22, 2001 (the
"Agreement"), is by and among (i) THE WILLIAMS COMPANIES, INC., a Delaware
corporation, (ii) WILLIAMS COMMUNICATIONS GROUP, INC., a Delaware corporation,
(iii) WILLIAMS COMMUNICATIONS, LLC, a Delaware limited liability company, (iv)
WCG NOTE TRUST, a Delaware business trust, (v) WCG NOTE CORP., INC., a Delaware
corporation, (vi) WILLIAMS SHARE TRUST, a Delaware business trust, (vii) United
States Trust Company of New York and (viii) Wilmington Trust Company (each a
"Party").

                  WHEREAS, each of the Parties hereto is willing to assume the
duties ascribed to it hereunder and under the other Transaction Documents on the
terms and conditions expressly set forth herein and therein;

                  NOW, THEREFORE, in consideration of the mutual agreements
herein contained and other good and valuable consideration, receipt and
sufficiency of which is acknowledged, the parties hereto agree as follows:

                                    ARTICLE I

                                 DEFINITIONS AND
                             CERTAIN UNDERSTANDINGS

                  Section 1.1 Definitions.

                  Each capitalized term used herein and not otherwise defined
herein shall have the definition assigned to that term in Section 1.01 of Annex
A ("Annex A").

                  Section 1.2 Rules of Construction.

                  This Agreement and the definitions referred to in Section 1.1
shall be governed by, and construed in accordance with, the rules of
construction set forth in Section 1.02 of Annex A.

                                   ARTICLE II

                    CLOSING; AGREEMENTS TO PURCHASE AND SELL

                  Section 2.1 Time and Place of Closing.

                  The closing of the transactions described in Section 2.3
hereof shall commence at 9:00 a.m., New York City time, on the Closing Date at
the offices of Milbank, Tweed, Hadley & McCloy LLP, 1 Chase Manhattan Plaza, New
York, New York 10005, or at such other time and at such other location as shall
be agreed by the Parties hereto.

                             Participation Agreement
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                  Section 2.2 Agreements.

                  Each Party acknowledges and consents to the transactions
described in Section 2.3 hereof, subject to the terms and conditions hereof and
on the basis of the representations and warranties set forth herein, in
consideration for the agreement of each other Party as set forth herein.

                  Section 2.3 Closing.

                  On or before the Closing Date, the following transactions
shall be consummated (if on the Closing Date, simultaneously, unless otherwise
specified herein or in the other Transaction Documents), subject to the terms
and conditions hereof and on the basis of the representations and warranties set
forth herein:

                  (a) Williams. (i) On or before the Closing Date, Williams
shall (x) contribute $28,000 to the Share Trust and (y) issue the Williams
Preferred Stock to the Share Trust (against payment therefor of $14,000 from the
Share Trust), in each case, as further consideration for the sole beneficial
interest in the Share Trust.

                  (ii) On or before the Closing Date, Williams shall contribute
to the Share Trust the Share Trust Reserve in the form of a Williams Demand
Loan.

                  (iii) On the Closing Date, Williams shall enter into the
Liquidity Agreement.

                  (iv) On the Closing Date, Williams shall enter into the Share
Trust Agreement, the Remarketing and Support Agreement, the WCG Note Reset
Remarketing Agreement, the Williams Payment Direction Letter and each other
Transaction Document to which it is a party and that has not previously been
entered into by it, and shall cause the Share Trust to enter into each
Transaction Document to which it is a party and that has not previously been
entered into by it.

                  (b) WCG. (i) On the Closing Date, WCG shall issue the WCG Note
to the Issuer against payment of the purchase price therefor of $1,500,000,000
by the Issuer to WCG.

                  (ii) On the Closing Date, WCG shall enter into the WCG Note
Indenture, the WCG Payment Direction Letter, the WCG Note Reset Remarketing
Agreement and each other Transaction Document to which it is a party and that
has not previously been entered into by it.

                  (c) WCL. (i) On the Closing Date, WCL shall purchase the WCL
Interest from the Issuer for the purchase price thereof of $100,000,000.

                  (ii) On the Closing Date, WCL shall enter into the Issuer
Trust Agreement and each other Transaction Document to which it is a party and
that has not previously been entered into by it.

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                  (d) The Issuer. (i) On or before the date hereof, the Issuer
shall enter into the Note Purchase Agreement. On the Closing Date, the Issuer
shall enter into the Indenture and co-issue the Senior Notes under the Indenture
to the Initial Purchasers pursuant to the terms of the Note Purchase Agreement
against payment of the purchase price therefor of $1,400,000,000 by the Initial
Purchasers to the Issuer.

                  (ii) On the Closing Date, the Issuer shall enter into the
Issuer Trust Agreement and offer and sell the WCL Interest to WCL under the
Issuer Trust Agreement against payment of the purchase price therefor of
$100,000,000.

                  (iii) On the Closing Date, the Issuer shall use the proceeds
from the sale of the Senior Notes and the WCL Interest to purchase the WCG Note
from WCG for consideration equal to its aggregate principal amount of
$1,500,000,000.

                  (iv) On the Closing Date, the Issuer shall enter into the
Liquidity Agreement, the Remarketing and Support Agreement, the WCG Payment
Direction Letter, the WCG Note Reset Remarketing Agreement and each other
Transaction Document to which it is a party and that has not previously been
entered into by it.

                  (f) Co-Issuer. (i) On or before the Closing Date, the
Co-Issuer shall issue its stock to the Issuer.

                  (ii) On or before the date hereof, the Co-Issuer shall enter
into the Note Purchase Agreement. On the Closing Date, the Co-Issuer shall enter
into the Indenture and co-issue the Senior Notes under the Indenture to the
Initial Purchasers pursuant to the terms of the Note Purchase Agreement against
payment of the purchase price therefor of $1,400,000,000 by the Initial
Purchasers to the Issuer.

                  (iii) On the Closing Date, the Co-Issuer shall enter into each
other Transaction Document to which it is a party and that has not previously
been entered into by it.

                  (g) Share Trust. (i) On or before the Closing Date, the Share
Trust shall issue a certificate of beneficial interest in the Share Trust to
Williams pursuant to the Share Trust Agreement evidencing Williams as the sole
beneficial owner of the Share Trust.

                  (ii) On or before the Closing Date, the Share Trust shall
receive (x) $28,000 in cash and (y) the Williams Preferred Stock from Williams
(in exchange for its payment to Williams of $14,000), in each case, as further
consideration for the issuance of the sole beneficial ownership interest in the
Share Trust to Williams.

                  (iii) On the Closing Date, the Share Trust shall enter into
the Share Trust Agreement, the Share Trust Security Agreement, the Williams
Payment Direction Letter, the Remarketing and Support Agreement and each other
Transaction Document to which it is a party and that has not previously been
entered into by it.

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                  (h) United States Trust Company of New York. On the Closing
Date, United States Trust Company of New York shall enter into the Indenture,
the Share Trust Security Agreement, the Remarketing and Support Agreement, the
WCG Note Indenture, the WCG Note Reset Remarketing Agreement and each other
Transaction Document to which it is a party, in its respective capacities as the
Indenture Trustee, securities intermediary under the Indenture and/or the WCG
Note Indenture Trustee, as the case may be, and that has not previously been
entered into by it.

                  (i) Wilmington Trust Company. On the Closing Date, Wilmington
Trust Company shall enter into the Issuer Trust Agreement, the Share Trust
Agreement and each other Transaction Document to which it is a party, in its
respective capacities as the Issuer Trustee, securities intermediary under the
Issuer Trust Agreement or the Share Trustee, as the case may be, and that has
not previously been entered into by it.

                                   ARTICLE III

                              CONDITIONS PRECEDENT

                  Section 3.1 Conditions to the Occurrence of the Closing Date.

                  The obligation of each Party to enter into the transactions
described in Section 2.3 hereof on or prior to the Closing Date shall be (i)
subject to the terms and conditions hereof, (ii) on the basis of the
representations and warranties set forth herein, and (iii) subject to the
satisfaction (or waiver by such Party) on or prior to the Closing Date of the
following conditions precedent:

                  (a) Transaction Documents. Each of the Transaction Documents
entered into or required to be entered into on or prior to the Closing Date
shall be reasonably satisfactory to such Party and shall, upon execution and
delivery thereof as contemplated in Section 3.1(b), be in full force and effect.

                  (b) Authorization, Execution and Delivery of Documents. Each
of the Transaction Documents entered into or required to be entered into on or
prior to the Closing Date shall have been duly authorized, executed and
available for delivery by each of the parties thereto (other than such Party).
Such Party shall have received a true and correct copy of each Transaction
Document (not furnished in original form) entered into or required to be entered
into on or prior to the Closing Date, including without limitation all
amendments and supplements to each such Transaction Document.

                  (c) Collateral. All actions necessary, in the reasonable
opinion of such Party (other than United States Trust Company of New York), in
order to effectively establish and create a first priority lien on and perfected
security interest in the Security for the Senior Notes in favor of the Indenture
Trustee, subject, in each case, only to Permitted Liens, shall have been duly
taken (or provisions therefor shall have been made), including without
limitation, the making of all conveyances, registrations and filings.

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                  (d) Ratings. Williams shall have received ratings letters
from S&P, Moody's and Fitch, confirming that the Senior Notes have been rated at
least "BB+" by S&P, "Baa3" by Moody's and "BBB-" by Fitch.

                  (e) Opinions. Opinions addressed to the Initial Purchasers,
the Parties and the Rating Agencies (except as otherwise specified below) dated
the Closing Date of the following counsel (or, if counsel is not identified, of
counsel reasonably satisfactory to such Persons) shall have been delivered to
the applicable addressees, each such opinion to be reasonably satisfactory to
the recipients and their counsel:

                           (i) Skadden, Arps, Slate, Meagher & Flom LLP, special
         counsel to Williams (addressed to the Initial Purchasers only, with
         reliance letters (except with respect to disclosure opinions) addressed
         to the Rating Agencies);

                           (ii) William G. von Glahn, internal counsel of
         Williams, WCG and WCL;

                           (iii) Crowe & Dunlevy, special counsel for WCG and
         WCL;

                           (iv) Jones, Day, Reavis & Pogue, special counsel for
         the Issuers, WCG and WCL;

                           (v) Richards, Layton & Finger, P.A., counsel to
         Wilmington Trust Company and special Delaware counsel;

                           (vi) Seward & Kissel LLP, counsel to United States
         Trust Company of New York;

                           (vii) Milbank, Tweed, Hadley & McCloy LLP, special
         counsel to the Initial Purchasers (addressed to the Initial Purchasers
         only), with separate opinions addressed to Williams as to the
         enforceability of the Remarketing and Support Agreement and addressed
         to Williams and WCG as to the enforceability of the WCG Note Reset
         Remarketing Agreement, in each case, against CSFB.

                  (f) Closing Certificates. (i) On the Closing Date, such Party
shall have received a certificate of each other Party dated the Closing Date, in
form and substance reasonably satisfactory to such Party, certifying (A) as to
the facts and circumstances applicable to the certifying Party set forth in
Section 3.1(h) hereof, (B) that the Transaction Documents to which such
certifying Party is a party have been duly authorized, executed and delivered by
such certifying Party and are in full force and effect and (C) that such
certifying Party has satisfied all conditions precedent (other than conditions
precedent that have been waived) contained in the Transaction Documents to which
it is a party required to be satisfied by it on or prior to the Closing Date.

                  (ii) On the Closing Date, such Party shall have received a
certificate of each other Party dated the Closing Date, in form and substance
reasonably satisfactory to such Person,

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attaching and certifying as of the Closing Date as to (A) the completeness of
the certifying Party's Organizational Documents, (B) the resolutions of the
certifying Party's board of directors or other governing body, if applicable,
duly authorizing the certifying Party's execution, delivery and performance of
each Transaction Document to which it is or is to be a party and each other
document required to be executed and delivered by it in accordance with the
provisions hereof or thereof and that such resolutions have not been rescinded,
amended or modified and (C) the incumbency and signatures of the Persons
authorized to execute and deliver, as may be required hereunder, documents on
its behalf in connection with the transactions contemplated hereby and by the
other Transaction Documents.

                  (g) Fees and Expenses. On the Closing Date, Williams and WCG
shall have paid or provided for payment of the Closing Costs.

                  (h) Certain Facts and Circumstances. (i) The representations
and warranties of each Party set forth in this Agreement and each other
Transaction Document to which such Party is a party shall be true and correct on
and as of the Closing Date (both immediately prior to the consummation of the
transactions intended to occur on the Closing Date and also after giving effect
thereto) in all material respects as if made on and as of such date (or, if
stated to have been made solely as of an earlier date, were true and correct in
all material respects as of such date).

                  (ii) No condition, event or act that with the giving of notice
and/or the lapse of time and/or any determination or certification would
constitute a Trigger Event, an Event of Default or a WCG Note Event of Default
shall have occurred and be continuing on the Closing Date.

                  (iii) No change in the financial or other condition of
Williams and WCG shall have occurred that would reasonably be expected to result
in a Williams Material Adverse Effect or a WCG Material Adverse Effect, as the
case may be, and no other act, event or circumstance shall have occurred that
has had or could reasonably be expected to result in a Williams Material Adverse
Effect or a WCG Material Adverse Effect, as the case may be.

                  (iv) There shall be no actions, suits, investigations or
proceedings at law or in equity by or before any Governmental Authority pending
or, to the actual knowledge of Williams or WCG, threatened, and there shall not
have been issued or, to the actual knowledge of Williams or WCG, proposed to be
issued any orders, judgments or decrees by any Governmental Authority to set
aside, restrain, enjoin or prevent the execution, delivery or performance of any
of the Transaction Documents or the consummation of the transactions
contemplated thereby.

                  (i) No Liability. The closing of the transactions contemplated
hereby and by each of the other Transaction Documents will not violate any
Applicable Law in effect as of the Closing Date, except to the extent such
violation could not reasonably be expected to result in a Williams Material
Adverse Effect or a WCG Material Adverse Effect, as the case may be, and will
not subject any Party (other than Williams or WCG) to any Tax (other than any
Documentary Tax for which such Party is indemnified under the Transaction
Documents and

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other than income taxes incurred after the Closing Date), penalty or liability
under or pursuant to any Applicable Law in effect as of the Closing Date.

                  (j) Financing Documents. Each of (x) the waiver to the
Williams Credit Agreement in connection with the Transaction Documents or the
transactions contemplated thereby, (y) an amendment of the WCL Credit Agreement
in connection with the Transaction Documents or the transactions contemplated
thereby and (z) any other waiver, consent, modification or amendment necessary
in connection with the representations and warranties given by Williams and WCG
herein shall have been executed and delivered, each in a form reasonably
satisfactory to the Structuring Advisor.

                  (k) Additional Documents and Certificates, Etc. The
Structuring Advisor, Williams and WCG shall have received such other documents,
certificates and opinions as any such Person or their respective counsel may
reasonably request.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                  Section 4.1 Representations and Warranties of Williams.

                  Williams makes the following representations and warranties to
the other Parties as of the date hereof and as of the Closing Date:

                  (a) Corporate Existence and Power. Williams is duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all corporate and all governmental licenses, authorizations,
certificates, consents and approvals required to carry on its business as now
conducted in all material respects and as contemplated by the Transaction
Documents, except for those licenses, authorizations, certificates, consents and
approvals the failure of which could not reasonably be expected to result in a
Williams Material Adverse Effect.

                  (b) Corporate Authorization; No Contravention. The execution,
delivery and performance by Williams of each Transaction Document delivered
hereunder and the consummation of the transactions contemplated by such
Transaction Documents are within its corporate powers, have been duly authorized
by all necessary corporate action, do not contravene (i) its Organizational
Documents or (ii) any law or contractual restriction binding on or affecting it
and will not result in or require the creation or imposition of any Lien
prohibited by the Williams Credit Agreement.

                  (c) Governmental Approvals. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and performance by
Williams of each Transaction Document to which it is a party, or the
consummation of the transactions contemplated by the Transaction Documents,
except (i) those that have been obtained or made and (ii) those that are
necessary to

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comply with laws, rules, regulations and orders required in the ordinary course
to comply with the ongoing obligations of Williams under Article V and under the
Transaction Documents to which it is a party, provided that all authorizations,
approvals, actions, notices and filings described in this clause (ii) that are
necessary or required to have been obtained or made on or prior to the Closing
Date for the consummation by Williams of the transactions contemplated by the
Transaction Documents have been obtained or made on or prior to the Closing Date
and are in full force and effect as of the date hereof.

                  (d) Binding Effect. Each Transaction Document to which
Williams is a party will be duly executed and delivered by Williams. Subject to
the due execution and delivery by Williams and the other parties thereto, each
Transaction Document to which Williams is a party is the legal, valid and
binding obligation of Williams, enforceable against Williams in accordance with
its terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general principles of equity (whether
enforcement is sought by proceedings in equity or at law) or, with respect to
the Remarketing and Support Agreement, the Note Purchase Agreement and the WCG
Note Reset Remarketing Agreement, any applicable public policy on the
enforceability of provisions relating to contribution and indemnification.

                  (e) Compliance with Laws. Williams is in compliance with all
laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property, except where the failure to so comply could not reasonably
be expected to result in a Williams Material Adverse Effect.

                  (f) Litigation. Except as set forth or incorporated by
reference in the Offering Memorandum, there is, as to Williams, no pending or,
to the knowledge of Williams, threatened action or proceeding affecting Williams
(or, until the consummation of the distribution of WCG by Williams, affecting
WCG) before any court, governmental agency or arbitrator, which could reasonably
be expected to materially and adversely affect the financial condition or
operations of Williams or which purports to affect the legality, validity,
binding effect or enforceability against Williams of any Transaction Document to
which it is a party.

                  (g) Taxes. As of the date hereof, the United States Federal
income tax returns of Williams have been examined through the fiscal year ended
December 31, 1995. Williams has filed all United States Federal income tax
returns and all other material domestic tax returns which are required to be
filed by it and has paid, or provided for the payment before the same become
delinquent of, all taxes due pursuant to such returns or pursuant to any
assessment received by Williams, other than those taxes contested in good faith
by appropriate proceedings. The charges, accruals and reserves on the books of
Williams in respect of taxes are adequate.

                  (h) ERISA. (i) No ERISA Termination Event has occurred or is
reasonably expected to occur with respect to any Plan that could reasonably be
expected to result in a Williams Material Adverse Effect.

                  (ii) Neither Williams nor any ERISA Affiliate of Williams has
received any notification that any Multiemployer Plan is in reorganization or
has been terminated, within the

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meaning of Title IV of ERISA, and Williams is not aware of any reason to expect
that any Multiemployer Plan is to be in reorganization or to be terminated,
within the meaning of Title IV of ERISA, that would result in a Williams
Material Adverse Effect or have any material adverse effect on any ERISA
Affiliate of Williams.

                  (iii) Neither Williams nor any ERISA Affiliate of Williams has
incurred, or is reasonably expected to incur, any Withdrawal Liability to any
Multiemployer Plan which, when aggregated with all other amounts required to be
paid to Multiemployer Plans in connection with Withdrawal Liability (as of the
date of determination), exceeds $75,000,000 in the aggregate or requires
payments exceeding $50,000,000 per annum.

                  (i) Financial Statements. The historical financial statements
of Williams and its Consolidated Subsidiaries included or incorporated by
reference in the Offering Memorandum and the related notes thereto present
fairly, in conformity with GAAP except as otherwise expressly noted therein, the
consolidated financial position of Williams and its Consolidated Subsidiaries at
the dates indicated and the statement of operations, stockholders' equity and
cash flows of Williams and its Consolidated Subsidiaries for the periods
specified, and such financial statements have been prepared in accordance with
GAAP consistently applied throughout the periods purported to be covered
thereby.

                  (j) Not an Investment Company. Williams is not an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act and will not become so required to register as a
result of the transactions contemplated by the Transaction Documents.

                  (k) No Trigger Event, WCG Note Event of Default or Williams
Event. On the Closing Date there will exist no condition, event or act that has
occurred and is continuing which with the giving of notice and/or the lapse of
time and/or any determination or certification would (i) constitute a Trigger
Event or a WCG Note Event of Default on the part of Williams or a Williams Event
under any of the Transaction Documents to which it is a party or (ii) constitute
a default or an event of default under the Williams Credit Agreement, including
but not limited to the execution of the Transaction Documents.

                  (l) Disclosure. Except as set forth or incorporated by
reference in the Offering Memorandum there is no fact known to Williams after
reasonable inquiry that has specific application to Williams (other than general
economic or industry conditions) and that, in the case of Williams, could
reasonably be expected to result in a Williams Material Adverse Effect.

                  (m) Shares. (i) The Initial Shares have been duly authorized
and as of the Closing Date will be validly issued, fully paid and non-assessable
and are not subject to any preemptive or similar rights; upon issuance to the
Share Trust, any and all Additional Shares will be duly authorized and validly
issued, fully paid, non-assessable and will not be subject to any preemptive or
similar rights; the Williams Common Stock into which such Initial Shares are
convertible on the Closing Date have been duly authorized and upon any
adjustment to the conversion rate, additional shares of Williams Common Stock
will be duly authorized in

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accordance with the terms of the Williams Preferred Stock and the Transaction
Documents, and when issued upon conversion of the Initial Shares, all such
shares of Williams Common Stock will be validly issued, fully paid and
non-assessable and will not be subject to any preemptive or similar rights; and
the Williams Common Stock into which such Additional Shares (that are shares of
Williams Preferred Stock) are convertible, if any, will be duly authorized upon
issuance of such Additional Shares to the Share Trust and when such Williams
Common Stock is issued upon conversion of such Additional Shares, such Williams
Common Stock will be validly issued, fully paid and non-assessable and will not
be subject to any preemptive or similar rights.

                  (ii) There are no outstanding subscriptions, rights, warrants,
options, calls, convertible securities, commitments of sale or Liens granted or
issued by Williams relating to or entitling any person to purchase or otherwise
to acquire any shares of the Williams Preferred Stock except as contemplated in
the Transaction Documents.

                  (iii) Upon contribution of the Initial Shares to the Share
Trust by Williams, the Share Trust will be the beneficial owner of the Initial
Shares, and upon issuance of the Additional Shares, if any, the Share Trust will
be the beneficial owner of the Additional Shares, in each case, free and clear
of any Lien or claims of any Person, except as otherwise provided in the
Transaction Documents.

                  (n) PUHCA. Williams is not a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", or a "public
utility" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

                  Section 4.2 Representations and Warranties of WCG and WCL.

                  WCG makes the following representations and warranties on its
own behalf, and on behalf of WCL, to the other Parties as of the date hereof and
as of the Closing Date:

                  (a) Corporate Existence and Power. Each of WCG and WCL is duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has all requisite power and authority to carry on its business as now
conducted and as contemplated by the Transaction Documents and, except where the
failure to do so could not reasonably be expected to result in a WCG Material
Adverse Effect or a WCL Material Adverse Effect, as the case may be, is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required.

                  (b) Corporate Authorization; No Contravention. The execution,
delivery and performance by each of WCG and WCL of each Transaction Document to
which it is a party are within its corporate or limited liability company
powers, as the case may be, have been duly authorized by all necessary corporate
and, if required, stockholder or member action on the part of WCG and WCL, as
the case may be, will not violate its Organizational Documents, will not violate
or result in a default under any indenture, agreement or other instrument
binding upon it, or give rise to a right thereunder to require any payment to be
made by it, and will not result in the creation or imposition of any Lien on any
of its assets, except Permitted Liens.

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                  (c) Governmental Approvals. The due execution, delivery and
performance by each of WCG and WCL of each Transaction Document to which it is a
party, (i) do not require any consent or approval of, registration or filing
with, or any other action by, any Governmental Authority, except (x) those that
have been obtained or made and (y) those that are necessary to comply with laws,
rules, regulations and orders required in the ordinary course to comply with the
ongoing obligations of WCG and WCL under Article V and under the Transaction
Documents to which it is a party, provided that all authorizations, approvals,
actions, notices and filings described in this clause (y) that are necessary to
have been obtained or made on or prior to the Closing Date for the consummation
by WCG and WCL, as the case may be, of the transactions contemplated by the
Transaction Documents or are required to have been obtained or made on or prior
to the Closing Date have been obtained or made on or prior to the Closing Date
and are in full force and effect as of the date hereof.

                  (d) Binding Effect. Each Transaction Document to which either
WCG and/or WCL is a party will be duly executed and delivered by WCG and/or WCL,
as the case may be, and, subject to the due execution and delivery by the other
parties thereto, will, upon such due execution and delivery constitute a legal,
valid and binding obligation of WCG and/or WCL, as the case may be, enforceable
against WCG and/or WCL, as the case may be (or, in the case of the WCG Note,
when duly issued, paid for and delivered in accordance with this Agreement and
the WCG Note Indenture, will be legally and validly issued and entitled to the
benefits afforded by the WCG Note Indenture), in each case in accordance with
its terms, except as may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors rights generally
or by general principles of equity (whether enforcement is sought by proceedings
in equity or at law) or, with respect to the Note Purchase Agreement and the WCG
Note Reset Remarketing Agreement, any applicable public policy on the
enforceability of provisions relating to contribution and indemnification.

                  (e) Compliance with Laws. Each of WCG and WCL is in compliance
with all Applicable Law applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a WCG Material Adverse Effect or a WCL Material Adverse
Effect, as the case may be.

                  (f) Litigation. There are no actions, suits or proceedings by
or before any arbitrator or Governmental Authority pending against or, to the
knowledge of WCG or WCL, as the case may be, threatened against or affecting WCG
or WCL, as the case may be, (x) as to which there is a reasonable possibility of
an adverse determination and that, if adversely determined, could reasonably be
expected to result in a WCG Material Adverse Effect or a WCL Material Adverse
Effect, as the case may be (except as set forth or incorporated by reference in
the Offering Memorandum), or (y) which purports to affect the legality,
validity, binding effect or enforceability against WCG or WCL, as the case may
be, of any Transaction Document to which WCG or WCL is a party, as the case may
be.

                  (g) Taxes. Each of WCG and WCL has timely filed or caused to
be filed all tax returns and reports required to have been filed (or WCG has
filed or caused to be filed) and

                             Participation Agreement
<PAGE>   15
                                       12

has paid (or WCG has paid or caused to be paid) all taxes required to be paid by
or with respect to it, except (x) taxes that are being contested in good faith
by appropriate proceedings and for which WCG or WCL, as applicable, has set
aside on its books adequate reserves or (y) to the extent that the failure to do
so could not reasonably be expected to result in a WCG Material Adverse Effect
or a WCL Material Adverse Effect, as the case may be.

                  (h) ERISA. (i) No ERISA Termination Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Termination Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a WCG Material Adverse Effect, or which,
when taken together with all other ERISA Termination Events that have occurred,
could reasonably be expected to result in liability of WCG in an aggregate
amount exceeding $25,000,000 for all periods.

                  (ii) The present value of all accumulated benefit obligations
under each Plan (based on assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$25,000,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $25,000,000 the fair market value
of the assets of all such underfunded Plans.

                  (i) Financial Statements. The historical financial statements
of WCG and its Consolidated Subsidiaries included or incorporated by reference
in the Offering Memorandum and the related notes thereto present fairly, in
conformity with GAAP except as otherwise expressly noted therein, the
consolidated financial position of WCG and its Consolidated Subsidiaries at the
dates indicated and the statement of operations, stockholders' equity and cash
flows of WCG and its Consolidated Subsidiaries for the periods specified, and
such financial statements have been prepared in accordance with GAAP
consistently applied throughout the periods purported to be covered thereby.

                  (j) Not an Investment Company. Neither WCG nor WCL is an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act, and will not become such as a result of the transactions
contemplated by the Transaction Documents.

                  (k) No Trigger Event, Event of Default or WCG Note Event of
Default. On the Closing Date there will exist no condition, event or act that
has occurred and is continuing which with the giving of notice and/or the lapse
of time and/or any determination or certification would (i) constitute a Trigger
Event, an Event of Default or a WCG Note Event of Default on the part of WCG or
WCL or any other event of default on the part of WCG or WCL under any of the
other Transaction Documents to which either WCG or WCL is a party or (ii)
constitute a default or an event of default under the WCL Credit Agreement or
the 1999 Indenture and the 2000 Indenture (each, as defined in the WCG Note
Indenture), including but not limited to the execution of the Transaction
Documents.

                             Participation Agreement
<PAGE>   16
                                       13

                  (l) Title to Property. Each of WCG and WCL has good title to,
or valid leasehold interests in, all its real and personal property material to
its business, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes. None of the properties and assets of WCG
or WCL is subject to any Lien other than Permitted Liens and Liens not
prohibited by the WCL Credit Agreement.

                  (m) Disclosure. Except as set forth or incorporated by
reference in the Offering Memorandum, there is no fact known to either of WCG or
WCL after reasonable inquiry that has specific application to WCG or WCL, as the
case may be (other than general economic or industry conditions), and that, in
the case of WCG or WCL, as the case may be, could reasonably be expected to
result in a WCG Material Adverse Effect or a WCL Material Adverse Effect, as the
case may be.

                  (n) WCG Note. The sale of the WCG Note by WCG to the Issuer in
the manner contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act by reason of Section 4(2) thereof.

                  (o) PUHCA. Neither WCG nor WCL is a "holding company" as
defined in, or subject to regulation under, the Public Utility Holding Company
Act of 1935.

                  Section 4.3 Representations and Warranties of WCG with respect
to the Issuer and the Co-Issuer.

                  WCG makes the following representations and warranties with
respect to the Issuer and the Co-Issuer to the other Parties as of the date
hereof and as of the Closing Date, except as otherwise specified:

                  (a) Existence and Power. The Issuer is a business trust duly
organized, validly existing and in good standing under the law of the State of
Delaware and has all requisite trust powers and all Permits required to carry on
its business as now conducted and as contemplated by the Transaction Documents.
The Co-Issuer is a corporation duly incorporated, validly existing and in good
standing under the law of the State of Delaware and has all requisite corporate
powers and all material Permits required to carry on its business as now
conducted and as contemplated by the Transaction Documents.

                  (b) Issuer and Co-Issuer Special Purpose Status. The Issuer
has not engaged in any activities since its organization (other than those
incidental to its organization and other appropriate steps in connection with
the transactions contemplated by the Transaction Documents, including (i)
arrangements for the payment of the fees of its trustee, (ii) the issuance and
sale of the Senior Notes in exchange for the consideration received therefor,
(iii) the issuance and sale of the WCL Interest in exchange for the
consideration received therefor, (iv) the purchase and receipt of the WCG Note,
(v) the preparation, execution and delivery of any applications with any
Governmental Authority, (vi) the execution of the Transaction Documents to which
it is a party executed on or prior to the date hereof and (vii) the other
activities referred to in or contemplated by such Transaction Documents) and has
not made any distributions since

                             Participation Agreement
<PAGE>   17
                                       14

its organization (other than those contemplated by the Transaction Documents).
The Co-Issuer has not engaged in any activities since its incorporation (other
than those incidental to its incorporation and other appropriate steps in
connection with the transactions contemplated by the Transaction Documents,
including the issuance of stock to the Issuer and arrangements for the payment
of fees to its directors, the authorization and the issuance of the Senior
Notes, the execution of the Transaction Documents to which it is a party
executed on or prior to the date hereof and the activities referred to in or
contemplated by such Transaction Documents) and has not paid any dividends or
made any distributions since its incorporation.

                  (c) Trust and Corporate Authorization; No Contravention. The
execution, delivery and performance by each of the Issuer and the Co-Issuer of
each of the Transaction Documents to which it is a party (i) are within the
Issuer's trust powers or the Co-Issuer's corporate powers, as the case may be,
(ii) have been duly authorized by all necessary trust or corporate action, as
the case may be, and (iii) do not contravene, or constitute a default under, any
provision of Applicable Law in effect on the Closing Date or of the Issuer's or
the Co-Issuer's Organizational Documents, as the case may be, or of any
agreement or other instrument binding upon the Issuer or the Co-Issuer, as the
case may be, or result in the creation or imposition of any Lien on any asset of
the Issuer or the Co-Issuer, except for Permitted Liens of the type described in
clause (iii) of the definition thereof.

                  (d) Binding Effect. Each of the Transaction Documents to which
the Issuer or the Co-Issuer is a party has been or on the Closing Date will be
duly executed and delivered by the Issuer and/or the Co-Issuer, as the case may
be, and, subject to the due execution and delivery by the other parties thereto,
each of the Transaction Documents to which the Issuer or the Co-Issuer is a
party constitutes or will constitute a legal, valid and binding obligation of
the Issuer or the Co-Issuer, as the case may be (or, in the case of the Senior
Notes, when duly authenticated, issued, paid for and delivered in accordance
with the Indenture and the Note Purchase Agreement, will be legally and validly
offered and sold and will be entitled to the benefits afforded by the
Indenture), enforceable against the Issuer or the Co-Issuer, as the case may be,
in accordance with its terms except as the enforceability thereof may be limited
by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles (whether enforcement is sought by proceedings in
equity or at law) and (ii) in the case of the Remarketing and Support Agreement,
the Note Purchase Agreement and the WCG Note Reset Remarketing Agreement, the
effect of applicable public policy or the enforceability of provisions relating
to contribution and indemnification.

                  (e) Security for the Senior Notes. The Grant (as defined in
the Indenture) of Security for the Senior Notes securing on an equal and ratable
basis the payment of the Secured Obligations (as defined in the Indenture) for
the benefit of (x) the Indenture Trustee and the Noteholders and (y) Williams
will constitute a valid, first priority, perfected security interest in the
Security for the Senior Notes, free and clear of any Lien or claims of any
Person (other than Permitted Liens set forth in clause (iii) of the definition
thereof), to the extent perfection can occur under Article 8 and/or Article 9 of
the New York UCC by possession, filing of a financing statement or control of a
securities account. Following such perfection, such security interest

                             Participation Agreement
<PAGE>   18
                                       15

will be enforceable as such against all creditors of the Issuer and any Persons
purporting to purchase any of the Security for the Senior Notes from the Issuer,
except in each case as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and general equitable principles (whether
enforcement is sought by proceedings in equity or at law) and other than as
permitted by the Transaction Documents. Neither the Issuer nor the Co-Issuer has
executed and/or filed any valid financing statement covering the Indenture
Trustee's interest in the Security for the Senior Notes that is on file in any
public office other than the financing statements, if any, filed pursuant to the
Transaction Documents.

                  (f) No Consents. (i) The execution, delivery and performance
by each of the Issuer and the Co-Issuer of each Transaction Document to which
the Issuer and/or the Co-Issuer, as the case may be, is a party do not require
the consent or the approval or authorization of, or any filing, registration or
qualification with, any Person or any Governmental Authority on the part of
either the Issuer or the Co-Issuer, as the case may be, as a condition to such
execution, delivery and performance by it as and when required that has not been
obtained, given or taken except (i) for filings of Uniform Commercial Code
financing statements to perfect the security interests contemplated by the
Transaction Documents and (ii) where the failure to obtain such consent,
approval or authorization or make such filing, registration or qualification
would not have an Issuer Material Adverse Effect.

                  (ii) The issuance of the Senior Notes by the Issuer and the
Co-Issuer does not require the consent or the approval or authorization of, or
any filing, registration or qualification with, any Person or any Governmental
Authority on the part of the Issuer or the Co-Issuer, as the case may be, as a
condition to such issuance by it as and when required that has not been
obtained, given or taken, except for filings of financing statements to perfect
the security interests contemplated by the Indenture. Neither the sale, issuance
or delivery of the Senior Notes to the Initial Purchasers nor the consummation
of any other of the transactions contemplated herein nor compliance with the
provisions of the Indenture will conflict with or result in the breach of any
material term or provision of any agreements to which the Issuer or the
Co-Issuer, as the case may be, is a party or constitute a violation of any
Applicable Law.

                  (g) Litigation. There is no Proceeding pending against, or, to
the actual knowledge of WCG, threatened against the Issuer or the Co-Issuer
before any Governmental Authority.

                  (h) Tax Claims. There is no Tax claim pending against, or to
the actual knowledge of WCG, threatened against the Issuer or the Co-Issuer.
Each of the Issuer and the Co-Issuer has paid all Taxes which it is required to
have paid prior to the date hereof and prior to the Closing Date.

                  (i) Not an Investment Company. Neither the Issuer nor the
Co-Issuer will be required to register as an "investment company" within the
meaning of the Investment Company Act, and neither the Issuer nor the Co-Issuer
will be so required as a result of the issuance and sale of the Senior Notes or
the other transactions contemplated by the Transaction Documents.

                             Participation Agreement
<PAGE>   19
                                       16

                  (j) Liens. (i) There are no Liens of any kind (other than
Permitted Liens described under clause (iii) of the definition thereof)
affecting title to any of the assets or rights of the Issuer or the Co-Issuer
under any Transaction Documents.

                  (k) Compliance. Neither the Issuer nor the Co-Issuer is in
breach or violation of or in default (nor, to the actual knowledge of WCG has an
event occurred that with notice or lapse of time or both would constitute a
default) under the terms of (i) its Organizational Documents, (ii) any of the
Transaction Documents, (iii) any other agreements to which the Issuer or the
Co-Issuer, as the case may be, is a party or (iv) any Applicable Law.

                  (l) Margin Compliance. No part of the proceeds of the sale of
the Senior Notes will be used, directly or indirectly, for the purpose of
purchasing or carrying Margin Stock in violation of Regulations U and X of the
Board of Governors of the Federal Reserve System.

                  (m) Indebtedness. Neither the Issuer nor the Co-Issuer has
created, assumed or incurred any indebtedness in violation of its Organizational
Documents or any other Transaction Document.

                  (n) Employees; Subsidiaries. The Issuer has no employees, and
other than the Co-Issuer, no Subsidiaries and no place of business outside of
the State of Delaware. The Co-Issuer has no employees, no Subsidiaries and no
place of business outside of the State of Delaware.

                  (o) Compliance with Environmental Laws. Each of the Issuer and
the Co-Issuer is in compliance with all, and is not subject to current liability
under any, applicable Environmental Law.

                  (p) PUHCA. Neither the Issuer nor the Co-Issuer is subject to
regulation as a "holding company" as such term is defined in the PUHCA.

                  (q) Securities Act. Assuming that the representations of the
Initial Purchasers relating to matters of securities law set forth in the Note
Purchase Agreement, and the representations of WCL relating to matters of
securities law set forth in the Issuer Trust Agreement and any certificate
required to be delivered thereunder are true and correct, and assuming
compliance by the holders of the Senior Notes with the restrictive legends
contained in the Senior Notes, the sale of (x) the Senior Notes by the Issuer
and the Co-Issuer, in the manner contemplated by the Note Purchase Agreement and
(y) the WCL Interest in the manner contemplated by this Agreement and the Issuer
Trust Agreement, respectively, will be exempt from the registration requirements
of the Securities Act by reason of Section 4(2) thereof.

                  (r) Title to Property. Immediately after giving effect to the
transactions occurring as of the Closing Date, each of the Issuer and Co-Issuer
will have good title to all of its properties and assets free and clear of all
Liens, except Permitted Liens as described in clause (iii) of the definition
thereof.

                             Participation Agreement
<PAGE>   20
                                       17

                  (s) No Trigger Event, Event of Default or WCG Note Event of
Default. No Trigger Event, Event of Default or WCG Note Event of Default has
occurred and is continuing and no condition, event or act has occurred and is
continuing that with the giving of notice and/or the lapse of time and/or any
determination or certification would constitute a Trigger Event, Event of
Default or WCG Note Event of Default, in each case, on the part of the Issuer or
the Co-Issuer.

                  (t) Indenture Representations. The representations and
warranties of each of the Issuer and Co-Issuer set forth in Section 6.01 of the
Indenture are true and correct.

                  Section 4.4 Representations and Warranties of Williams with
respect to the Share Trust.

                  Williams makes the following representations and warranties
with respect to the Share Trust to the other Parties as of the date hereof and
as of the Closing Date, except as otherwise specified:

                  (a) Existence and Power. The Share Trust is a business trust
duly organized, validly existing and in good standing under the law of the State
of Delaware and has all requisite trust powers and all Permits required to carry
on its business as now conducted and as contemplated by the Transaction
Documents.

                  (b) Share Trust Special Purpose Status. The Share Trust has
not engaged in any activities since its organization (other than those
incidental to its organization and other appropriate steps in connection with
the transactions contemplated by the Transaction Documents, including (i)
arrangements for the payment of fees to its trustee, (ii) the issuance of a
certificate of beneficial interest in the Share Trust to Williams pursuant to
the Share Trust Agreement, (iii) the execution of the Transaction Documents to
which it is a party executed on or prior to the date hereof and (iv) the other
activities referred to in or contemplated by the Share Trust Agreement, this
Agreement and the other Transaction Documents) and has not made any
distributions since its organization.

                  (c) Trust and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Share Trust of each of the
Transaction Documents to which it is a party (i) are within the Share Trust's
trust powers, (ii) have been duly authorized by all necessary trust action,
(iii) require, in respect of the Share Trust, no action by or in respect of, or
filing with, any Governmental Authority that has not been taken or made and (iv)
do not contravene, or constitute a default under, any provision of Applicable
Law in effect on the Closing Date or of the Share Trust's Organizational
Documents or any agreement or other instrument binding upon the Share Trust, or
result in creation or imposition of any Lien on any asset of the Share Trust,
except for Permitted Liens of the type described in clause (iii) of the
definition thereof.

                  (d) Binding Effect. Each of the Transaction Documents to which
the Share Trust is a party has been or on the Closing Date will be duly executed
and delivered by such

                             Participation Agreement
<PAGE>   21
                                       18

Party, and, subject to the due execution and delivery by the other parties
thereto, each of the Transaction Documents to which the Share Trust is a party
constitutes or will constitute a legal, valid and binding obligation of the
Share Trust enforceable against the Share Trust in accordance with its terms
except as the enforceability thereof may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles (whether enforcement is sought by proceedings in equity or at law) or
(ii) in the case of the Remarketing and Support Agreement, any applicable public
policy on the enforceability of provisions relating to contribution and
indemnification.

                  (e) No Consents. The execution, delivery and performance by
the Share Trust of each Transaction Document to which the Share Trust is a party
does not require the consent or the approval or authorization of, or any filing,
registration or qualification with, any Person or any Governmental Authority on
the part of such Party as a condition to such execution, delivery and
performance by it as and when required that has not been obtained.

                  (f) Litigation. There is no Proceeding pending against or, to
the actual knowledge of Williams, threatened against the Share Trust before any
Governmental Authority.

                  (g) Tax Claims. There is no Tax claim pending, or to the
actual knowledge of Williams, threatened against the Share Trust. The Share
Trust has paid all Taxes which it is required to have paid prior to the date
hereof and prior to the Closing Date.

                  (h) Not an Investment Company. The Share Trust will not be
required to register as an "investment company" within the meaning of the
Investment Company Act and will not become such as a result of the issuance and
sale of the Senior Notes or the other transactions contemplated by the
Transaction Documents.

                  (i) Liens. (i) There are no Liens of any kind (other than
Permitted Liens described under clause (iii) of the definition thereof)
affecting title to any of the assets or rights of the Share Trust under any
Transaction Documents.

                  (j) Compliance. The Share Trust is not in breach or violation
of or in default (nor, to the actual knowledge of Williams has an event occurred
that with notice or lapse of time or both would constitute a default) under the
terms of (i) its Organizational Documents, (ii) any of the Transaction
Documents, (iii) any other agreements to which the Share Trust is a party or
(iv) any Applicable Law.

                  (k) Indebtedness. The Share Trust has not created, assumed or
incurred any indebtedness in violation of its Organizational Documents or any
other Transaction Document.

                  (l) Employees; Subsidiaries. The Share Trust has no employees,
no Subsidiaries and no place of business outside of the State of Delaware.

                  (m) Compliance with Environmental Laws. The Share Trust is in
compliance with all, and is not subject to current liability under any,
applicable Environmental Law.

                             Participation Agreement
<PAGE>   22
                                       19

                  (n) PUHCA. The Share Trust is not subject to regulation as a
"holding company" as such term is defined in the PUHCA.

                  (o) No Trigger Event. No Trigger Event has occurred and is
continuing and no condition, event or act has occurred and is continuing that
with the giving of notice and/or the lapse of time and/or any determination or
certification would constitute a Trigger Event or Event of Default, in each
case, on the part of the Share Trust.

                  (p) Security for Collateral. The grant and pledge of
Collateral (as defined in the Share Trust Security Agreement) securing the
payment obligations of the Share Trust to the Issuer under the Share Trust
Security Agreement will constitute a valid, first priority, perfected security
interest in such Collateral, free and clear of any Lien or claims of any Person
(other than Permitted Liens set forth in clause (iii) of the definition
thereof), to the extent perfection can occur under Article 8 and/or Article 9 of
the New York UCC by possession, filing of a financing statement or control of a
securities account. Following such perfection, such security interest will be
enforceable as such against all creditors of the Share Trust and any Persons
purporting to purchase any of the Collateral from the Share Trust, except in
each case as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and general equitable principles (whether
enforcement is sought by proceedings in equity or at law) and other than as
permitted by the Transaction Documents. The Share Trust has not executed and/or
filed any valid financing statement covering its interest in the Collateral that
is on file in any public office other than the financing statements, if any,
filed pursuant to the Transaction Documents.

                  Section 4.5 Representations and Warranties of United States
Trust Company of New York.

                  United States Trust Company of New York, in its individual
capacity, makes the following representations and warranties on its own behalf
to the other Parties as of the date hereof and as of the Closing Date:

                  (a) Corporate Existence and Power. United States Trust Company
of New York is a banking corporation duly organized, validly existing and in
good standing under the laws of the State of New York and has all requisite
corporate powers and all material Permits required to carry on its business as
now conducted and as contemplated by the Transaction Documents.

                  (b) Corporate Authorization; No Contravention. The execution,
delivery and performance by United States Trust Company of New York, in its
individual or trustee capacity, as applicable, of each of the Transaction
Documents to which it is a party are within United States Trust Company of New
York's corporate powers, have been duly authorized by all necessary corporate
action and do not contravene, or constitute a default under, any provision of
the Organizational Documents of United States Trust Company of New York.

                  (c) Binding Effect. Each of the Transaction Documents to which
United States Trust Company of New York, in its individual or trustee capacity,
is a party has been duly

                            Participation Agreement

<PAGE>   23
                                       20

executed and delivered by United States Trust Company of New York, and each such
Transaction Document constitutes a legal, valid and binding agreement of United
States Trust Company of New York enforceable against United States Trust Company
of New York in accordance with its terms except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

                  Section 4.6 Representations and Warranties of Wilmington Trust
Company.

                  Wilmington Trust Company, in its individual capacity, hereby
represents and warrants on its own behalf to the other Parties as of the date
hereof and as of the Closing Date that:

                  (a) it is duly incorporated, validly existing and in good
standing under the laws of the State of Delaware;

                  (b) it has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement and each other
Transaction Document to which it is a party, and this Agreement and each other
Transaction Document to which it is a party have been duly authorized by it by
all necessary corporate action;

                  (c) no authorization, consent or approval of any Governmental
Authority regulatory body or other Person is required for the due authorization,
execution, delivery or performance by it of this Agreement or any other
Transaction Document to which it is a party;

                  (d) this Agreement and each other Transaction Document to
which it is a party have been duly executed and delivered by it and (subject to
the due execution and delivery by the other parties thereto) constitute its
legal and binding obligations, enforceable against it in accordance with their
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereinafter
in effect relating to the enforcement of creditors' rights in general and except
as such enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity); and

                  (e) it complies with all the requirements of the Trust Act
relating to the qualification of a trustee of a Delaware business trust.

                             Participation Agreement
<PAGE>   24
                                       21

                                    ARTICLE V

                       COVENANTS; ACKNOWLEDGEMENTS; RIGHTS

                  Section 5.1 Covenants of Williams.

                  Williams covenants and agrees for itself, and for the Share
Trust, from and after the Closing Date, for the benefit of the other Parties as
follows, so long as any of the Senior Notes shall remain outstanding:

                  (a) Maintenance of Existence. (i) Williams shall preserve and
maintain its corporate existence, rights, franchises and privileges under the
laws of the State of Delaware, and qualify and remain qualified, as a foreign
corporation in each jurisdiction in which qualification is necessary or
desirable in view of its business and operations or the ownership of its
properties; provided that this Section 5.1(a)(i) shall not apply to or prohibit
any merger or consolidation or other act of similar effect where Williams is the
survivor or the survivor assumes all of the obligations of Williams under the
Transaction Documents to which Williams is a party and no Trigger Event or event
that, with the giving of notice or lapse of time, or both, would become a
Trigger Event shall have occurred and be continuing immediately after giving
effect to such merger, consolidation or other act to similar effect.

                  (ii) Williams shall at all times cause the Share Trust to
preserve and maintain its legal existence, rights (charter, if applicable, and
statutory), franchises and privileges under the laws of the State of Delaware,
except as otherwise provided in the Share Trust Agreement.

                  (b) Maintenance of Government Approvals and Permits. Williams
shall cause the Share Trust to obtain and maintain, or cause to be obtained and
maintained, in full force and effect all necessary Governmental Approvals and
Permits required to be obtained in its name from time to time.

                  (c) Compliance with Laws. (i) Williams shall comply in all
material respects with all Applicable Law, except where the failure to comply
could not reasonably be expected to result in a Williams Material Adverse
Effect.

                  (ii) Williams shall cause the Share Trust to comply with all
Applicable Law and applicable Permits.

                  (d) Information. (i) Williams shall deliver to the Issuer, the
Indenture Trustee and the Rating Agencies by making available on "EDGAR" (or any
similar successor thereto) or Williams' home page on the "World Wide Web" at
www.williams.com or otherwise transmitting to the Issuer, the Indenture Trustee
and the Rating Agencies (1) promptly after the sending or filing thereof, a copy
of each of Williams' reports on Form 8-K (or any comparable form), which shall
also be sent pursuant to Section 7.2 hereof, (2) promptly after the filing or
sending thereof and in any event within 60 days after the end of each of the
first three fiscal quarters of each fiscal year of Williams, a copy of William's
report on Form 10-Q (or any comparable form) for such quarter, which report will
include Williams's quarterly unaudited consolidated financial

                             Participation Agreement
<PAGE>   25
                                       22

statements as of the end of and for such quarter, (3) promptly after the filing
or sending thereof and in any event within 105 days after the end of each fiscal
year of Williams, a copy of William's report on Form 10-K (or any comparable
form) for such year, and (4) promptly after the filing or sending thereof and in
any event within 120 days after the end of each fiscal year of Williams, a copy
of William's annual report which it sends to its public security holders, which
annual report will include William's annual audited consolidated financial
statements as of the end of and for such year;

                  (ii) Williams shall deliver to WCG, WCL, the Issuer, the
Indenture Trustee and the Rating Agencies, simultaneously with the furnishing of
each of the annual or quarterly reports referred to in clause (i) above, a
certificate of an Authorized Officer of Williams in a form reasonably acceptable
to the Indenture Trustee stating whether, to the knowledge of Williams, there
exists on the date of such certificate any Trigger Event, any Event of Default
or any WCG Note Event of Default, and, if so, setting forth the details thereof
and the action, if any, that Williams has taken and proposes to take with
respect thereto; and

                  (iii) Williams shall deliver to WCG, WCL, the Issuer, the
Indenture Trustee and the Rating Agencies (A) as soon as possible and in any
event within the five Business Days after Williams obtains knowledge thereof,
notice of the occurrence of any Trigger Event, any Event of Default or any WCG
Note Event of Default, or any event which, with the giving of notice or lapse of
time, or both, would constitute a Trigger Event, an Event of Default or a WCG
Note Event of Default, continuing on the date of such notice and a statement of
an Authorized Officer of Williams setting forth details of such Trigger Event,
Event of Default or WCG Note Event of Default, and the action which Williams has
taken and proposes to take with respect thereto; and (B) promptly and, in any
event, within five Business Days after Williams obtains knowledge thereof,
notice of a change in, or issuance of any rating of Williams' senior unsecured
long-term debt by S&P, Moody's or Fitch which causes a reduction in, the rating
level of such debt.

                  (e) Nature of Business. Williams shall not permit the Share
Trust to engage in any business other than as expressly permitted by the terms
of the Share Trust Agreement or the other Transaction Documents.

                  (f) Transactions with Affiliates. Williams shall not, and
shall cause its Affiliates not to, enter into transactions with the Share Trust
in violation of the Share Trust Agreement.

                  (g) Williams Demand Loans. Williams shall not amend any
outstanding Williams Demand Loans without the consent of the Indenture Trustee.

                  (h) Replacement of Shares in Share Trust. In the event
Williams consolidates or merges with or into any Person prior to the Reset Date,
prior to, or upon the consummation of, such consolidation or merger, Williams
shall, at its election, contribute to the Share Trust either (i) cash in an
amount equal to the aggregate liquidation preference of the Williams Preferred
Stock held by the Share Trust pursuant to the Share Trust Agreement or (ii) new
shares of such surviving Person shall be contributed to the extent such new
shares have an initial aggregate

                             Participation Agreement
<PAGE>   26
                                       23

liquidation preference equal to the aggregate liquidation preference of the
Williams Preferred Stock held by the Share Trust pursuant to the Share Trust
Agreement and have substantially the same rights and preferences as the Williams
Preferred Stock; provided that Williams will not be required to make such
contribution so long as Williams is the surviving entity and the Williams
Preferred Stock remains duly authorized and validly issued, fully paid,
non-assessable and not subject to any preemptive or similar right and
convertible into Williams Common Stock in accordance with its terms.

                  (i) Instructions. Williams shall instruct the Share Trustee to
perform the obligations of the Share Trust under the Transaction Documents.

                  Section 5.2 Covenants of WCG.

                  WCG covenants and agrees for itself, and for WCL, the Issuer
and the Co-Issuer, from and after the Closing Date, for the benefit of the other
Parties as follows, so long as any of the Senior Notes shall remain outstanding:

                  (a) Maintenance of Existence. (i) WCG shall, and shall cause
WCL to (x) continue to engage in businesses of the same general type as now
conducted or contemplated in its business plan and other businesses reasonably
related thereto and (y) do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges, franchises, patents, copyrights, trademarks and
trade names material to the conduct of its business; provided that this Section
5.1(a)(i) shall not apply to or prohibit any merger or consolidation or other
act of similar effect where WCG or WCL, as the case may be, is the survivor or
the survivor assumes all of the obligations of WCG under the Transaction
Documents to which WCG or WCL, as the case may be, is a party and no Trigger
Event, Event of Default or WCG Note Event of Default or event that, with the
giving of notice or lapse of time, or both, would become a Trigger Event, Event
of Default or WCG Note Event of Default shall have occurred and be continuing
immediately after giving effect to such merger, consolidation or other act to
similar effect.

                  (ii) WCG shall, through WCL, at all times cause each of the
Issuer and Co-Issuer to preserve and maintain its legal existence, rights
(charter, if applicable, and statutory), franchises and privileges under the law
of the State of Delaware, except as otherwise provided in the Issuer Trust
Agreement.

                  (b) Maintenance of Government Approvals and Permits. WCG shall
cause (through WCL) each of the Issuer and the Co-Issuer to obtain and maintain,
or cause to be obtained and maintained, in full force and effect all necessary
Governmental Approvals and Permits required to be obtained in its name from time
to time.

                  (c) Compliance with Laws. (i) WCG shall, and shall cause WCL
to, comply with all Applicable Law (including, without limitation, all
Environmental Laws and ERISA and the rules and regulations thereunder), except
where the necessity of compliance therewith is contested in good faith by
appropriate action and such failure to comply, individually or in the

                             Participation Agreement
<PAGE>   27
                                       24

aggregate, could not reasonably be expected to result in a WCG Material Adverse
Effect or a WCL Material Adverse Effect, as the case may be.

                  (ii) WCG shall, through WCL, cause each of the Issuer and the
Co-Issuer to comply with all Applicable Law and applicable Permits.

                  (d) Information. (i) WCG shall deliver to Williams, the
Issuer, the Indenture Trustee and the Rating Agencies by making available on
"EDGAR" (or any similar successor thereto) or WCG's home page on the "World Wide
Web" at www.wilcom.com or otherwise transmitting to, Williams, the Issuer, the
Indenture Trustee and the Rating Agencies (1) promptly after the sending or
filing thereof, a copy of each of WCG's reports on Form 8-K (or any comparable
form), which shall also be given pursuant to Section 7.2 hereof, (2) promptly
after the filing or sending thereof and in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of WCG, a
copy of WCG's report on Form 10-Q (or any comparable form) for such quarter,
which report will include WCG's quarterly unaudited consolidated financial
statements as of the end of and for such quarter, (3) promptly after the filing
or sending thereof and in any event within 90 days after the end of each fiscal
year of WCG, a copy of WCG's report on Form 10-K (or any comparable form) for
such year, and (4) promptly after the filing or sending thereof and in any event
within 120 days after the end of each fiscal year of WCG, a copy of WCG's annual
report which it sends to its public security holders, which annual report will
include WCG's annual audited consolidated financial statements as of the end of
and for such year;

                  (ii) WCG shall deliver to Williams, the Issuer, the Indenture
Trustee and the Rating Agencies, simultaneously with the furnishing of each of
the annual or quarterly reports referred to in clause (i) above, a certificate
of an Authorized Officer of WCG substantially in the form of Exhibit A hereto or
in such other form that is reasonably acceptable to the Indenture Trustee,
stating whether, to the knowledge of WCG, there exists on the date of such
certificate any Trigger Event, any Event of Default or any WCG Note Event of
Default, and, if so, setting forth the details thereof and the action that WCG
has taken and proposes to take with respect thereto;

                  (iii) WCG shall deliver to Williams, the Issuer, the Indenture
Trustee and the Rating Agencies as soon as possible and in any event within the
five Business Days after WCG obtains knowledge thereof, notice of the occurrence
of any Trigger Event, any Event of Default or any WCG Note Event of Default, or
any event which, with the giving of notice or lapse of time, or both, would
constitute a Trigger Event, an Event of Default or a WCG Note Event of Default,
continuing on the date of such notice and a statement of an Authorized Officer
of WCG setting forth details of such Trigger Event, Event of Default or WCG Note
Event of Default, and the action, if any, which WCG has taken and proposes to
take with respect thereto;

                  (v) WCG shall deliver or cause to be delivered to the Issuer,
the Indenture Trustee and the Rating Agencies the information required by Rule
144A(d)(4)(i) and (ii) with respect to the Issuer and the Co-Issuer to enable
the Issuer and the Co-Issuer to satisfy their obligations to furnish such
information pursuant to Section 7.01(u) of the Indenture.

                             Participation Agreement
<PAGE>   28
                                       25

                  (e) Nature of Business. WCG, through WCL, shall not permit
either the Issuer or the Co-Issuer to engage in any business other than as
expressly permitted by the terms of the Issuer Trust Agreement or the other
Transaction Documents.

                  (f) Transactions with Affiliates. WCG shall not, and shall
cause WCL and its other Affiliates not to, enter into transactions with either
the Issuer and/or the Co-Issuer in violation of the Issuer Trust Agreement or
the other Transaction Documents.

                  (g) Fees to Williams. WCG shall pay to Williams: (i) a fee
payable promptly after (x) any payment is made by or on behalf of Williams to
the Indenture Trustee with respect to the Share Trust Remedy or (y) Williams
exercises the Share Trust Release Option (but only if the Share Trust Amount at
such time exceeds zero), in each case, other than as a result of an Issuer Only
Payment Default, in the amount equal to the lesser of $110,000,000 or the
portion thereof bearing the same proportion as the aggregate payments made by or
on behalf of Williams pursuant to clause (x) or (y) bears to the initial
aggregate principal amount of the Senior Notes; and (ii) a fee, payable on each
semi-annual interest payment date for the WCG Note during the period commencing
on the occurrence of a Failed Reset Sale (as defined in the WCG Note Reset
Remarketing Agreement) or a Reset Sale of less than all of the WCG Note and
ending on the earlier of (x) the earliest date on which the Issuer no longer
holds all or any portion of the WCG Note and (y) the date on which the
Reimbursement Obligations shall have been paid in full, in an amount that shall
initially be equal to an annual rate of 0.25% (pro-rated, in the case of the
initial payment of the fee described in this clause (ii), for the period elapsed
since the date of such Failed Reset Sale (as defined in the WCG Note Reset
Remarketing Agreement) or Reset Sale) of the aggregate principal amount
outstanding on such semi-annual interest payment date of the unsold portion of
the WCG Note, and shall increase an additional 0.25% per annum on each
subsequent semi-annual interest payment date for the WCG Note (provided, that
the fee described in this clause (ii) shall not exceed an annual rate of 14.00%
minus the lower of (x) the Interest Rate Reset Cap (as defined in the WCG Note
Indenture) and (y) the Reset Rate (as defined in the WCG Note Indenture) for the
portion of the WCG Note sold pursuant to a Reset Sale).

                                   ARTICLE VI

                                 INDEMNIFICATION

                                   [Reserved]

                             Participation Agreement
<PAGE>   29
                                       26

                                   ARTICLE VII

                                  MISCELLANEOUS

                  Section 7.1 Survival.

                  All agreements, representations, warranties and indemnities
contained in this Agreement and in any agreement, document or certificate
delivered pursuant hereto, or in connection herewith, shall survive and continue
in effect following the execution and delivery of this Agreement and the Closing
Date. Upon the payment in full of the Secured Obligations, pursuant to Section
10.01 of the Indenture, this Agreement shall terminate except as to those
provisions, including, without limitation, Sections 7.8, 7.9, 7.10 and 7.11
hereof, expressly intended to survive such termination.

                  Section 7.2 Notices.

                  Except as otherwise expressly provided herein in any
particular case, all notices, approvals, consents, requests and other
communications hereunder shall be in writing and shall, if addressed as provided
in the following sentence, be deemed to have been given, (i) when delivered by
hand on a Business Day, (ii) one Business Day after being sent by a private
nationally or internationally recognized overnight courier service or (iii) when
sent on a Business Day by telecopy, if immediately after transmission the
sender's facsimile machine records in writing the correct answer back. Actual
receipt at the address of an addressee, regardless of whether in compliance with
the foregoing, is effective notice hereunder. Until otherwise so notified by the
respective parties, all notices, approvals, consents, requests and other
communications shall be addressed to the following addresses:

                  If to Williams:

                  The Williams Companies, Inc.
                  One Williams Center, MD 50-4
                  Tulsa, Oklahoma 74172
                  Attention: Treasurer
                  Telecopier No.: 918-573-2065
                  Telephone No.: 918-573-5551

                  with copies to:

                  The Williams Companies, Inc.
                  One Williams Center
                  Suite 4900
                  Tulsa, Oklahoma 74172
                  Attention: General Counsel
                  Telecopier No.: 918-573-5942
                  Telephone No.: 918-573-2480

                             Participation Agreement
<PAGE>   30
                                       27

                  and

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  (a) 1600 Smith Street, Suite 4460
                  Houston, Texas 77002-7348
                  Attention: Frank Bayouth
                  Telecopier No.: 713-655-5200
                  Telephone No.: 713-655-5100

                  (b) 4 Times Square
                  New York, New York 10036-6522
                  Attention: John Osborn
                  Telecopier No.: 212-735-2000
                  Telephone No.: 212-735-3000

                  If to WCG and WCL:

                  Williams Communications Group, Inc.
                  One Williams Center, MD 26-1
                  Tulsa, Oklahoma 74172
                  Attention: Chief Financial Officer
                  Telecopier No.: 918-573-6024
                  Telephone No.: 918-573-9001

                  with copies to:

                  Williams Communications Group, Inc.
                  One Williams Center, MD 41-3
                  Tulsa, Oklahoma 74172
                  Attention: General Counsel
                  Telecopier No.: 918-573-3005
                  Telephone No.: 918-573-5057

                  If to the Share Trust or the Share Trustee:

                  c/o Wilmington Trust Company
                  Rodney Square North
                  1100 North Market Street
                  Wilmington, Delaware 19890-0001
                  Attention: Corporate Trust Administration
                  Telecopier No.: 302-651-8882
                  Telephone No.: 302-651-1000

                             Participation Agreement
<PAGE>   31
                                       28

                  with copies to:

                  The Williams Companies, Inc.
                  One Williams Center, MD 50-4
                  Tulsa, Oklahoma 74172
                  Attention: Treasurer
                  Telecopier No.: 918-573-2065
                  Telephone No.: 918-573-5551

                  If to the Issuers or the Issuer Trustee:

                  c/o Wilmington Trust Company
                  Rodney Square North
                  1100 North Market Street
                  Wilmington, Delaware 19890-0001
                  Attention: Corporate Trust Administration
                  Telecopier No.: 302-651-8882
                  Telephone No.: 302-651-1000

                  and

                  Williams Communications Group, Inc.
                  One Williams Center, MD 26-1
                  Tulsa, Oklahoma 74172
                  Attention: Chief Financial Officer
                  Telecopier No.: 918-573-6024
                  Telephone No.: 918-573-9001

                  with copies to:

                  Williams Communications Group, Inc.
                  One Williams Center, MD 41-3
                  Tulsa, Oklahoma 74172
                  Attention: General Counsel
                  Telecopier No.: 918-573-3005
                  Telephone No.: 918-573-5057

                             Participation Agreement
<PAGE>   32
                                       29

                  If to the Indenture Trustee:

                  United States Trust Company of New York
                  114 West 47th Street, 25th Floor
                  New York, New York 10036-1532
                  Attention: Louis P. Young
                  Telecopier No.: 212-852-1626
                  Telephone No.: 212-852-1671

                  A duplicate copy of each notice, approval, consent, request or
other communication given hereunder by each of the Parties to any one of the
others or to the Indenture Trustee shall also be given to all of the others.
However, failure to give notice to any Party shall not affect the effectiveness
of notice to Parties as to whom notice has been given in accordance with the
first two sentences of this Section 7.2. Each of the Parties may, by notice
given hereunder, designate any further or different addresses to which
subsequent notices, approvals, consents, requests or other communications shall
be sent or persons to whose attention the same shall be directed.

                  Section 7.3 Severability of Provisions.

                  If any provision hereof shall be held invalid or unenforceable
by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any other provision hereof. To the extent permitted by
Applicable Law, the Parties hereto hereby agree that any provision hereof that
renders any other term or provision hereof invalid or unenforceable in any
respect shall be modified, but only to the extent necessary to avoid rendering
such other term or provision invalid or unenforceable, and such modification
shall be accomplished in the manner that most nearly preserves the benefit of
all Parties' bargain hereunder.

                  Section 7.4 Governing Law; Consent to Jurisdiction.

                  (a) THE RIGHTS AND OBLIGATIONS OF EACH OF THE PARTIES UNDER
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.

                  (b) EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING
ARISING OUT OF OR RELATING DIRECTLY OR INDIRECTLY TO ANY OF THIS AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HAVE BEEN INDUCED TO

                             Participation Agreement
<PAGE>   33
                                       30

ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS PARAGRAPH.

                  (c) ANY PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN
THE COUNTY OF NEW YORK IN THE COMMERCIAL DIVISION OF THE SUPREME COURT, CIVIL
BRANCH OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK OR THE
EASTERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF THE PARTIES HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS IN RESPECT OF, BUT ONLY IN RESPECT OF, PROCEEDINGS WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.

                  (d) EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID PROCEEDINGS ARISING OUT OF
OR IN CONNECTION WITH THIS OR ANY OTHER TRANSACTION DOCUMENT BROUGHT IN THE
COURTS REFERRED TO IN SECTION 7.4(c) HEREOF AND HEREBY FURTHER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

                  (e) EACH OF THE ISSUER, THE CO-ISSUER AND THE SHARE TRUST
HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS AND HEREBY CONFERS AN
IRREVOCABLE SPECIAL POWER, AMPLE AND SUFFICIENT, TO CT CORPORATION SYSTEM, WITH
OFFICES ON THE DATE HEREOF AT 111 EIGHTH AVENUE, NEW YORK, NY 10011 AS ITS
DESIGNEE, APPOINTEE AND AGENT WITH RESPECT TO ANY SUCH PROCEEDING IN NEW YORK TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH PROCEEDING AND AGREES THAT THE FAILURE OF SUCH
AGENT TO GIVE ANY ADVICE OF ANY SUCH SERVICE OF PROCESS TO THE ISSUER, THE
CO-ISSUER AND THE SHARE TRUST, AS THE CASE MAY BE, SHALL NOT IMPAIR OR AFFECT
THE VALIDITY OF SUCH SERVICE OR OF ANY CLAIM BASED THEREON. IF FOR ANY REASON
SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH,
EACH OF THE ISSUER, THE CO-ISSUER AND THE SHARE TRUST AGREES TO DESIGNATE A NEW
DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES
OF THIS PROVISION. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE
ISSUER, THE CO-ISSUER AND THE SHARE TRUST HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS WITH RESPECT TO ANY PROCEEDING (WHETHER OR NOT IN NEW

                             Participation Agreement
<PAGE>   34
                                       31

YORK), BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO SUCH PERSON, AT ITS RESPECTIVE ADDRESS SET FORTH IN SECTION 7.2
HEREOF, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.

                  Section 7.5 Amendments, Waivers, Etc.

                  This Agreement may not be amended, discharged or terminated
nor may any provision hereof be waived unless such amendment, discharge,
termination or waiver is in writing and signed by each Party.

                  Section 7.6 Entire Agreement.

                  (i) This Agreement (including, without limitation, the
appendices hereto) and the other Transaction Documents supersede all prior
agreements, written or oral, between or among any of the Parties relating to the
transactions contemplated hereby and thereby, and (ii) each of the Parties
represents and warrants to the others that this Agreement and the other
Transaction Documents constitute the entire agreement among the Parties relating
to the transactions contemplated hereby and thereby.

                  Section 7.7 Benefit of Agreement.

                  All agreements, representations, warranties and indemnities in
this Agreement and in any agreement, document or certificate delivered pursuant
hereto shall be binding upon the Person making the same and its successors and
assigns and shall inure to the benefit of and be enforceable by the Person for
whom made and its successors and assigns; provided, however, none of Williams,
WCG, WCL, the Issuer, the Co-Issuer or the Share Trust may assign or transfer
any of its rights or obligations hereunder except as provided in the Transaction
Documents without the prior written consent of, so long as any of the Senior
Notes are outstanding, the Indenture Trustee and except pursuant to any merger
permitted under (i) Section 5.1(a) hereof where Williams or such other entity is
the survivor or the survivor assumes all the obligations of such entity under
the Transaction Documents to which Williams is a party or (ii) Section 5.2(a)
hereof where WCG or WCL, as the case may be, or such other entity is the
survivor or the survivor assumes all the obligations of such entity under the
Transaction Documents to which WCG or WCL, as the case may be, is a party. This
Agreement is for the sole benefit of the Parties and their respective successors
and assigns and their respective successors and assigns and is not for the
benefit of any other Person.

                  Section 7.8 Expenses.

                  (a) Williams. All statements, reports, certificates, opinions
and other documents or information required to be furnished by any Party to the
Share Trust or the Share Trustee under this Agreement or any other Transaction
Document shall be supplied without cost to the Share Trust or the Share Trustee.
Williams shall pay, within 30 days after demand therefor, (a) any fees, expenses
(including extraordinary expenses) and/or indemnities incurred by the Share
Trust or due and payable to the Share Trustee in accordance with the Transaction

                             Participation Agreement
<PAGE>   35
                                       32

Documents to the extent such amounts are not paid pursuant to the Transaction
Documents and (b) all reasonable and documented out-of-pocket costs and expenses
of the Share Trust or the Share Trustee, incurred in connection with (i) the
negotiation, preparation, execution and delivery of the Transaction Documents or
any waiver or amendment of, or supplement or modification to, the Transaction
Documents and (ii) the review of any of the other agreements, instruments or
documents referred to in this Agreement or relating to the transactions
contemplated hereby. In addition, Williams shall pay, or cause to be paid,
within 30 days after demand therefor, all reasonable and documented
out-of-pocket costs and expenses of the Share Trust or the Share Trustee
(including the reasonable and documented fees and disbursements of counsel),
incurred in connection with the enforcement or protection of its rights under
the Transaction Documents, including in connection with any workout,
restructuring or negotiations in respect thereof and including the exercise of
the remedies of the Share Trust or the Share Trustee under the Transaction
Documents following the occurrence of any condition, event or act that with the
giving of notice and/or the lapse of time and/or any determination or
certification would constitute a Trigger Event, an Event of Default or a Reset
Event.

                  (b) WCG. All statements, reports, certificates, opinions and
other documents or information required to be furnished by any Party to (i) the
Indenture Trustee, the securities intermediary under the Indenture, the Issuer
Trustee, the securities intermediary under the Issuer Trust Agreement, the
Issuer or the WCG Note Indenture Trustee under this Agreement or any other
Transaction Document shall be supplied without cost to the Indenture Trustee,
the securities intermediary under the Indenture, the Issuer Trustee, the
securities intermediary under the Issuer Trust Agreement, the Issuer or the WCG
Note Indenture Trustee. WCG shall pay, within 30 days after demand therefor, (a)
any Administrative Expenses incurred by the Issuer, the Co-Issuer, the
securities intermediary under the Indenture, the Indenture Trustee, the Issuer
Trustee, the securities intermediary under the Issuer Trust Agreement, or, in
the case of the WCG Note Indenture Trustee, any fees, expenses (including
extraordinary expenses) and/or indemnities due and payable to the WCG Note
Indenture Trustee in accordance with the Transaction Documents, each to the
extent such amounts are not paid pursuant to the Transaction Documents, and (b)
all reasonable and documented out-of-pocket costs and expenses of the Issuer,
the Co-Issuer, the securities intermediary under the Indenture, the Indenture
Trustee, the Issuer Trustee, the securities intermediary under the Issuer Trust
Agreement, or the WCG Note Indenture Trustee incurred in connection with (i) the
negotiation, preparation, execution and delivery of the Transaction Documents or
any waiver or amendment of, or supplement or modification to, the Transaction
Documents and (ii) the review of any of the other agreements, instruments or
documents referred to in this Agreement or relating to the transactions
contemplated hereby. In addition, WCG shall pay, or cause to be paid, within 30
days after demand therefor, all reasonable and documented out-of-pocket costs
and expenses of the Issuer, the Co-Issuer, the securities intermediary under the
Indenture, the Indenture Trustee, the Issuer Trustee, the securities
intermediary under the Issuer Trust Agreement, or the WCG Note Indenture Trustee
(including the reasonable and documented fees and disbursements of counsel)
incurred in connection with the enforcement or protection of its rights under
the Transaction Documents, including in connection with any workout,
restructuring or negotiations in respect thereof and including the exercise of
the remedies of the Issuer, the Co-Issuer, the securities intermediary under the
Indenture, the Indenture Trustee, the Issuer Trustee, the securities

                             Participation Agreement
<PAGE>   36
                                       33

intermediary under the Issuer Trust Agreement, or the WCG Note Indenture Trustee
under the Transaction Documents following the occurrence of any condition, event
or act that with the giving of notice and/or the lapse of time and/or any
determination or certification would constitute a Trigger Event, an Event of
Default or a Reset Event.

                  Section 7.9 No Bankruptcy Petitions.

                  (a) Williams. Williams covenants and agrees that, prior to the
date that is a year and a day after the redemption or payment in full of the
outstanding Senior Notes, it will not institute against, or join any other
person in instituting against, the Issuer, the Co-Issuer or the Share Trust any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or similar proceeding under the laws of the United States or any state of the
United States.

                  (b) WCG. WCG covenants and agrees that, prior to the date that
is a year and a day after redemption or payment in full of the Senior Notes, it
will not institute against, or join any other person in instituting against the
Issuer, the Co-Issuer or the Share Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or similar proceeding under
the laws of the United States or any state of the United States.

                  Section 7.10 Limitation of Liability.

                  It is expressly understood and agreed by the parties hereto
that, except with respect to Section 4.6, (a) this Agreement is executed and
delivered by Wilmington Trust Company, not individually or personally, but
solely as the Issuer Trustee and the Share Trustee, in the exercise of the
powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer and the Share Trust is made and intended not as personal representations,
undertakings and agreements by Wilmington Trust Company but is made and intended
for the purpose of binding only the Issuer and the Share Trust, respectively,
and (c) under no circumstances shall Wilmington Trust Company be individually or
personally liable for the payment of any indebtedness or expenses of the Issuer
or the Share Trust or be liable for the breach of failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer or the
Share Trust under this Agreement or any other related documents; provided,
however, this Section 7.10 shall not limit any liability expressly assumed by
Wilmington Trust Company under this Agreement or any other Transaction Document.

                  Section 7.11 General Limitation of Liability.

                  No Party to any Transaction Document shall be liable for any
punitive, exemplary or treble damages, including without limitation for the
inaccuracy of any representation or warranty made by such Party.

                             Participation Agreement
<PAGE>   37
                                       34

                  Section 7.12 Counterparts.

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

                            [signature pages follow]

                             Participation Agreement
<PAGE>   38

                  IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed in its name and on its behalf as of the date first
above written.

                                        THE WILLIAMS COMPANIES, INC.

                                        By: /s/ JAMES G. IVEY            [STAMP]
                                           -------------------------------------
                                           Name:  James G. Ivey
                                           Title: Treasurer

                                        WILLIAMS COMMUNICATIONS GROUP, INC.

                                        By: /s/ HOWARD S. KALIKA
                                           -------------------------------------
                                           Name:  Howard S. Kalika
                                           Title: Vice President & Treasurer

                                        WILLIAMS COMMUNICATIONS, LLC

                                        By: /s/ HOWARD S. KALIKA
                                           -------------------------------------
                                           Name:  Howard S. Kalika
                                           Title: Vice President & Treasurer

                                        WCG NOTE TRUST

                                        By: WILMINGTON TRUST COMPANY,
                                            not in its individual capacity but
                                            solely in its capacity as Issuer
                                            Trustee

                                        By: /s/ JAMES P. LAWLER
                                           -------------------------------------
                                           Name:  JAMES P. LAWLER
                                           Title: Vice President

                                        WCG NOTE CORP., INC.

                                        By: /s/ HOWARD S. KALIKA
                                           -------------------------------------
                                           Name:  Howard S. Kalika
                                           Title: Vice President & Treasurer

                                        WILLIAMS SHARE TRUST

                                        By: WILMINGTON TRUST COMPANY,
                                            not in its individual capacity but
                                            solely in its capacity as Share
                                            Trustee

                                        By: /s/ JAMES P. LAWLER
                                           -------------------------------------
                                           Name:  JAMES P. LAWLER
                                           Title: Vice President

                                        UNITED STATES TRUST COMPANY OF NEW YORK

                                        By: /s/ LOUIS P. YOUNG
                                           -------------------------------------
                                           Name:  LOUIS P. YOUNG
                                           Title: VICE PRESIDENT

                                        WILMINGTON TRUST COMPANY

                                        By: /s/ JAMES P. LAWLER
                                           -------------------------------------
                                           Name:  JAMES P. LAWLER
                                           Title: Vice President

                             Participation Agreement

<PAGE>   39

                                                                         Annex A

         SECTION 1.01 Definitions. Capitalized terms used in this Annex A and,
except as otherwise expressly provided in any Transaction Document with respect
to specific capitalized or other terms used in such Transaction Document,
capitalized terms used in the Transaction Documents and all appendices,
schedules and exhibits thereto, shall in each case have the respective meanings
given to them in this Section 1.01. Not all of the terms defined in this Annex A
are used in any particular Transaction Document.

         "Acceleration Trigger" has the meaning assigned to such term in Section
1.01 of the Indenture.

         "Additional Shares" means shares of Williams Common Stock or, if
authorized by the Board of Directors of Williams or a committee thereof,
Williams Preferred Stock, in each case to be issued by Williams following a
Partial Remarketing pursuant to Section 8(f) of the Remarketing and Support
Agreement.

         "Administrative Expenses" means, without duplication: (a) any fees,
expenses (including extraordinary expenses) and/or indemnities due or payable as
of any Senior Note Payment Date to the Issuer Trustee or the Indenture Trustee,
in each case, in accordance with the Transaction Documents, including all
amounts set forth in the Administrative Expenses Certificate; (b) any fees and
expenses due or payable as of any Senior Note Payment Date or any date upon
which such fees and expenses are demanded from the holder of the WCL Interest to
(i) each of the accountants and agents of and counsel for the Issuer and the
Co-Issuer in connection with services rendered in accordance with the
Transaction Documents, and (ii) each Rating Agency in connection with any rating
or rating estimate of the Senior Notes as contemplated by the Transaction
Documents (including costs related to the maintenance of such ratings); (c) any
governmental fee, charge or tax, including Taxes, due or payable as of any
Senior Note Payment Date by each of the Issuer and the Co-Issuer; provided,
however, that Administrative Expenses shall not include any amounts due or
accrued with respect to any actions taken on or in connection with the Closing
Date which shall be paid on the Closing Date.

         "Administrative Expenses Certificate" means the certificate of the
Issuer dated as of the Closing Date and delivered to the Indenture Trustee
setting forth the annual Administrative Expenses, as such certificate may be
amended from time to time.

         "Affiliate" means with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such Person. The term "control"
(including the correlative term "controlled") means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership

<PAGE>   40
                                       2

of voting stock, by contract, or otherwise. "Affiliate of Williams" means any
Person that, directly or indirectly through one or more intermediaries,
controls, is controlled by or is under direct or indirect common control with
Williams; provided that Williams retains, directly or indirectly, economic
exposure to no less than 50% of the equity interest in such Person.

         "After-Tax Basis" means, with respect to any payment to be made on an
"After-Tax Basis", that such payment will be grossed-up by the payor to make the
payee whole for the net amount of additional Taxes payable as a result of the
receipt or accrual of such payment and such gross-up amount (taking into account
all available credits or deductions attributable to the payment or accrual of
such additional Taxes). In calculating the gross-up amount, the Tax rates used
shall be the highest marginal Tax rates in effect for (and payable by) the payee
(or in the case of a payee that is a pass-through entity for any Tax purposes,
any Person who is required to take into account any items of income, gain, loss,
deduction or credit with respect to such entity) on the date of such payment or
accrual.

         "Applicable Law" means, in respect of any Person, any law, statute,
treaty, constitution, regulation, rule, ordinance, order or Governmental
Approval, or other governmental restriction, requirement or determination, of or
by any Governmental Authority, in each case that is legally binding upon such
Person.

         "Asset Remedy" has the meaning assigned to such term in Section
9.04(a)(ii) of the Indenture.

         "Asset Remedy Standstill Period" has the meaning assigned to such term
in Section 9.04(b)(ii) of the Indenture.

         "Authorized Officer" means (a) in the case of Williams, WCG, WCL and
the Co-Issuer, any chairman, vice-chairman, president, vice president,
secretary, assistant secretary, treasurer, assistant treasurer, controller,
assistant controller or any other authorized officer or agent as may from time
to time be designated as such, and (b) in the case of the Indenture Trustee, the
Issuer or the Share Trust, a Responsible Officer or such other Persons as may
from time to time be designated as such.

         "Bankruptcy" means, with respect to any Person, a Voluntary Bankruptcy
or an Involuntary Bankruptcy.

         "Benefit Plan Investor" has the meaning assigned to such term in the
Plan Asset Regulations issued by the United States Department of Labor at 29
C.F.R. Section 2510.3-101.

         "Business Day" means any day of the year except Saturday, Sunday and
any day on which commercial banking institutions are authorized or obligated by
law, regulation or executive order to close in New York, New York, Wilmington,
Delaware or Tulsa, Oklahoma.

         "Business Entity" means a corporation (or, when used as an adjective,
corporate), limited liability company, partnership (whether general or limited),
business trust, joint

<PAGE>   41
                                       3

stock company, unincorporated association, joint venture or other applicable
business entity and any asset or group of assets that is or can be operated as
or as part of a business unit, whether or not having distinct legal existence.

         "Cash" means cash, amounts credited to deposit accounts and other
immediately available funds that are denominated in Dollars.

         "Cash Flow Event of Default" has the meaning assigned to such term in
Section 9.01 of the Indenture.

         "Certificate of Designation" means the Certificate of Designation
adopted by the Board of Directors of Williams establishing the terms of the
William Preferred Stock.

         "Closing Costs" means (i) all fees, costs and expenses payable pursuant
to the CSFB Fee Letter and, without duplication, the expenses and fees due and
payable through the Closing Date of the Structuring Advisor (in each case,
including, to the extent an invoice therefor has been delivered to Williams and
WCG at least one Business Day before the Closing Date, the reasonable fees and
expenses of counsel to the Structuring Advisor through the Closing Date and all
fees, costs and expenses in connection with post-closing matters), (ii) all
out-of-pocket costs and expenses of Williams, WCG and their respective
Affiliates incurred in connection with the transactions contemplated in the
Participation Agreement and the other Transaction Documents including Williams'
and WCG's counsel and accountants fees, (iii) all fees, costs and expenses of
the Issuer Trustee, the Share Trustee, the Indenture Trustee and the WCG Note
Indenture Trustee, including their respective counsel fees, due and payable
through the Closing Date and the trustee fees for the first year payable to (x)
Wilmington Trust Company as the Trustee under each of the Issuer Trust Agreement
and the Share Trust Agreement and (y) United States Trust Company of New York as
the Indenture Trustee under the Indenture and as the WCG Note Indenture Trustee
under the WCG Note Indenture and (iv) any other fees, costs and expenses with
respect to the sale of the Senior Notes or the sale of the WCG Note incurred in
connection with the transactions contemplated in the Participation Agreement and
the other Transaction Documents.

         "Closing Date" means March 28, 2001.

         "Closing Price" for any Trading Day, means, for a security, an amount
equal to the closing price for such security on such Trading Day as reported by
Bloomberg L.P., or if not so reported by Bloomberg L.P., as reported by another
recognized source selected by the Chief Executive Officer or Chief Financial
Officer of Williams, or by the Remarketing Agents, if the Chief Executive
Officer or Chief Financial Officer of Williams fails to make such selection
promptly upon request by the Indenture Trustee.

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

         "Co-Issuer" means WCG Note Corp., Inc., a corporation organized under
the law of the State of Delaware.

<PAGE>   42
                                       4

         "Collateral Instructions Party" has the meaning assigned to such term
in Section 9.04(h) of the Indenture.

         "Collections" has the meaning assigned to such term in Article II of
the Share Trust Agreement.

         "Consolidated" refers, with respect to any Person, to the consolidation
of accounts of such Person and its Subsidiaries in accordance with GAAP.

         "Contractual Obligation" means, as to any Person, any security issued
by, or Indebtedness of, such Person or any other agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound, or any provision of any of the foregoing.

         "CSFB" means Credit Suisse First Boston Corporation or any successor
entity.

         "CSFB Fee Letter" means the engagement letter dated as of March 14,
2001 from CSFB to Williams.

         "Delaware UCC" means the Uniform Commercial Code as in effect from time
to time in the State of Delaware.

         "Disposition" means, with respect to any property, any sale,
assignment, gift, exchange, lease, conversion, transfer, pledge or other
disposition or divestiture of such property, including any transfer by way of a
capital contribution and the creation of any, or material increase in any
existing, royalty, overriding royalty, reversionary interest, production payment
or similar burden. "Dispose", "Disposing" and "Disposed" shall have correlative
meanings.

         "Distribution Agreement" means an underwriting, purchase, distribution
or placement agency agreement to be entered into among Williams, the Share
Trust, the Remarketing Agents and any other Persons engaged by Williams, the
Share Trust or the Remarketing Agents to remarket or distribute the Shares
pursuant to the provisions of the Remarketing and Support Agreement (such
agreement to be in a form customary for Williams for a firm commitment
underwritten public offering (in the case of an underwriting agreement), a firm
commitment underwritten private offering (in the case of a purchase or
distribution agreement) or a best efforts private placement (in the case of a
placement agency agreement), including without limitation, representations and
warranties, covenants, conditions precedent, indemnification and other
provisions as are then customary for such agreements), and to be prepared,
executed and delivered by Williams and the Share Trust to the Remarketing Agents
on or prior to the Successful Repricing Date, as set forth in Section 12 of the
Remarketing and Support Agreement.

         "Documentary Taxes" means Taxes (other than income or franchise taxes)
payable by reason of or in connection with the execution, delivery, filing,
release, discharge, amendment or recording of any Transaction Document.

         "Dollars" and the sign "$" each mean the lawful currency of the United
States.

<PAGE>   43
                                       5

         "Early Redemption" has the meaning assigned to such term in Section
14.01(a) of the Indenture.

         "Early Redemption Date" has the meaning assigned to such term in
Section 14.01(a) of the Indenture.

         "Early Redemption Price" has the meaning assigned to such term in
Section 14.01(b) of the Indenture.

         "Environmental Law" means any Federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction,
decree or judicial or agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.

         "Equity Interests" means, with respect to any Person (a) shares of
capital stock of (or other ownership or profit interests, including partnership,
member or trust interests, in) such Person, (b) warrants, options or other
rights for the purchase or other acquisition from such Person of shares of
capital stock of (or such other equity ownership or equity profit interests in)
such Person, or (c) securities convertible into or exchangeable for shares of
capital stock of (or such other equity ownership or equity profit interests in)
such Person, or warrants, rights or options for the purchase or other
acquisition from such Person of such shares (or such other equity interests), in
each case, whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are authorized or otherwise
existing on any date of determination.

         "ERISA" means the United States Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued from time to time thereunder.

         "ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with Williams or WCG, as the case may be, is
treated as a single employer under Section 414(b) or (c) of the Code, or solely
for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as
a single employer under Section 414 of the Code.

         "ERISA Termination Event" means (a) a "reportable event", as such term
is described in Section 4043 of ERISA (other than a "reportable event" not
subject to the provision for 30-day notice to the PBGC) or (b) the withdrawal of
Williams or any ERISA Affiliate of Williams or WCG or any ERISA Affiliate of
WCG, as applicable, from a Multiple Employer Plan during a plan year in which it
was a "substantial employer," as such term is defined in Section 4001(a)(2) of
ERISA, or the incurrence of liability by Williams or any ERISA Affiliate of
Williams or WCG or any ERISA Affiliate of WCG, as applicable, under Section 4064
of ERISA upon the termination of a Plan or Multiple Employer Plan or (c) the
distribution of a notice of intent to terminate a Plan pursuant to Section
4041(a)(2) of ERISA or the treatment of a Plan amendment as a termination under
Section 4041 of ERISA or (d) the institution of proceedings to

<PAGE>   44
                                       6

terminate a Plan by the PBGC under Section 4042 of ERISA or (e) any other event
or condition which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.

         "Events of Default" has the meaning assigned to such term in Section
9.01 of the Indenture.

         "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.

         "Failed Remarketing" means the failure to sell the Shares required to
be remarketed under Section 8 of the Remarketing and Support Agreement because
of a Legal Impossibility.

         "Financial Investments" means:

                  (a) Cash; and

                  (b) Direct general obligations of, or obligations fully and
         unconditionally guaranteed as to the timely payment of principal and
         interest by, the United States or any agency or instrumentality thereof
         having maturities of not more than six months from the date of
         acquisition, but excluding any of such securities whose terms do not
         provide for payment of a fixed dollar amount upon maturity or call for
         redemption.

         "Fitch" means Fitch, Inc. or any successor by merger, consolidation or
otherwise to its business.

         "GAAP" means consistently applied United States generally accepted
accounting principles as in effect from time to time.

         "Governmental Approval" means, with respect to any Person, any consent,
license, approval, registration, permit, sanction or other authorization of any
nature which is required to be granted by any Governmental Authority under
Applicable Law (a) for the formation of such Person, (b) for the enforceability
of any Transaction Document against such Person and such Person's making of any
payments contemplated thereunder, and (c) for all such other matters as may be
necessary in connection with the performance of such Person's material
obligations under any Transaction Document.

         "Governmental Authority" means any federal, national, state,
provincial, municipal, local, territorial or other governmental department,
commission, board, bureau, agency, regulatory authority, instrumentality or
judicial or administrative body, whether domestic or foreign, having
jurisdiction over the matter or matters in question.

         "Hazardous Materials" means (a) petroleum or petroleum products and
by-products or breakdown products thereof, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and (b)
any other chemicals, materials

<PAGE>   45
                                       7

or substances designated, classified or regulated as hazardous or toxic or as a
pollutant or contaminant under any Environmental Law.

         "Indebtedness" of any Person means, without duplication, (a)
indebtedness of such Person for borrowed money, (b) obligations of such Person
evidenced by bonds, debentures or notes, (c) obligations of such Person to pay
the deferred purchase price of property or services (other than trade payables
not overdue by more than 60 days incurred in the ordinary course of business),
(d) monetary obligations of such Person as lessee under leases that are, in
accordance with generally accepted accounting principles, recorded as capital
leases, (e) obligations of such Person under guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (d) of
this definition and (f) indebtedness or obligations of others of the kinds
referred to in clauses (a) through (e) of this definition secured by any Lien on
or in respect of any property of such Person; provided, that (i) Indebtedness
shall not include (i) Liens consisting of interests in receivables in connection
with agreements for sales of receivables of any kind by Williams for cash or
(ii) any monetary obligations or guaranties of monetary obligations of Persons
as lessee under leases that are, in accordance with generally accepted
accounting principles, recorded as operating leases.

         "Indenture" means the Indenture dated as of March 28, 2001 among the
Issuer, the Co-Issuer and United States Trust Company of New York as Indenture
Trustee and securities intermediary.

         "Indenture Interest Account" has the meaning assigned to such term in
Section 5.01(a) of the Indenture.

         "Indenture Redemption Account" has the meaning assigned to such term in
Section 5.01(a) of the Indenture.

         "Indenture Trustee" means United States Trust Company of New York, a
New York banking corporation, in its capacity as trustee under the Indenture or
any successor thereto under the Indenture.

         "Independent Investment Banker" means CSFB or another independent
investment banking institution of national standing appointed by the Issuer.

         "Initial Purchasers" means CSFB, Lehman, Banc of America Securities
LLC, Credit Lyonnais Securities (USA) Inc., Chase Securities Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Salomon Smith Barney Inc.

         "Initial Remarketing Agent" means CSFB.

         "Initial Shares" has the meaning assigned to such term in the recitals
to the Remarketing and Support Agreement.

<PAGE>   46
                                       8

         "Interest Payment Date" has the meaning assigned to such term in
Section 1.01 of the Indenture.

         "Interest Period" means, for any Interest Payment Date, the period from
the immediately preceding Interest Payment Date to the day immediately preceding
such Interest Payment Date, provided, however, for the Interest Payment Date on
September 15, 2001, the Interest Period means the period from the Closing Date
to the day immediately preceding such Interest Payment Date.

         "Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.

         "Investment Certificate" means the investment certificate attached as
Exhibit B to the Issuer Trust Agreement.

         "Investment Company Act" means the United States Investment Company Act
of 1940, as amended.

         "Involuntary Bankruptcy" means, with respect to any Person, without the
consent or acquiescence of such Person, the entering of an order for relief or
approving a petition for relief or reorganization or any other petition seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or other similar relief under any present or future bankruptcy,
insolvency or similar Applicable Law, or the filing of any such petition against
such Person, that shall not be dismissed or stayed within 60 days, or, without
the consent or acquiescence of such Person, the entering of an order appointing
a trustee, custodian, receiver or liquidator of such Person or of all or any
substantial part of the property of such Person that shall not be dismissed or
stayed within 60 days.

         "Issuer" means the WCG Note Trust, a special purpose statutory business
trust created under the law of the State of Delaware.

         "Issuer Material Adverse Effect" means (i) a material adverse change in
the financial condition or operations of the Issuers, (ii) any event or
occurrence of whatever nature that could reasonably be expected to materially
and adversely affect the ability of the Issuers to perform their obligations
under the Transaction Documents or (iii) the invalidity or unenforceability, in
whole or in material part, of any Transaction Document to which any of WCG, WCL
or the Issuer is a party.

         "Issuer Only Payment Default" has the meaning assigned to such term in
Section 9.04(i)(iv) of the Indenture.

         "Issuer Trust Agreement" means the Amended and Restated Trust Agreement
of WCG Note Trust dated as of the Closing Date among WCL, the Issuer and the
Issuer Trustee.

         "Issuer Trustee" means Wilmington Trust Company, a Delaware banking
corporation, in its capacity as trustee under the Issuer Trust Agreement or any
successor thereto under the Issuer Trust Agreement.

<PAGE>   47
                                       9

         "Issuers" means the Issuer and the Co-Issuer.

         "Legal Impossibility" has the meaning assigned to such term in Section
1 of the Remarketing and Support Agreement.

         "Lehman" means Lehman Brothers Inc. or any successor entity.

         "Lien" means any mortgage, lien, pledge, charge, deed of trust,
security interest, encumbrance or other type of preferential arrangement to
secure or provide for the payment of any obligation of any Person, whether
arising by contract, operation of law or otherwise (including, without
limitation, the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement).

         "Liquidity Agreement" means the Liquidity and Reimbursement Agreement
dated as of March 28, 2001 among Williams and the Issuer.

         "Liquidity Option" has the meaning assigned to such term in Section 2
of the Liquidity Agreement.

         "Liquidity Reimbursement Obligations" has the meaning assigned to such
term in Section 3 of the Liquidity Agreement.

         "Mandatory Redemption" has the meaning assigned to such term in Section
15.01(d) of the Indenture.

         "Mandatory Redemption Date" has the meaning assigned to such term in
Section 15.01(d) of the Indenture.

         "Margin Stock" means "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.

         "Maturity Date" means March 15, 2004.

         "Maturity Trigger" has the meaning assigned to such term in Section
1.01 of the Indenture.

         "Moody's" means Moody's Investors Service, Inc. or any successor by
merger, consolidation or otherwise to its business.

         "Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which Williams or any ERISA Affiliate of Williams or WCG
or any ERISA Affiliate of WCG, as applicable, is making or accruing an
obligation to make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.

         "Multiple Employer Plan" means an employee benefit plan as defined in
Section 3(2) of ERISA, other than a Multiemployer Plan, subject to Title IV of
ERISA to which Williams or any ERISA Affiliate of Williams, and one or more
employers other than

<PAGE>   48
                                       10

Williams or an ERISA Affiliate of Williams, is making or accruing an obligation
to make contributions or, in the event that any such plan has been terminated,
to which Williams or any ERISA Affiliate of Williams made or accrued an
obligation to make contributions during any of the five plan years preceding the
date of termination of such plan.

         "New Series" means the shares of preferred stock or other equity
securities of Williams, in each case which contemplate the mandatory issuance of
shares of Williams Common Stock, or shares of Williams Common Stock, the
registration and sale of which are permitted pursuant to Section 7(a) of the
Remarketing and Support Agreement.

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

         "Note Purchase Agreement" means the Senior Note Purchase Agreement
dated March 22, 2001 among Williams, WCG, WCL, the Issuer, the Co-Issuer and
CSFB and Lehman on behalf of the Initial Purchasers.

         "Noteholders" has the meaning assigned to such term in Section 1.01 of
the Indenture.

         "Obligation" means, with respect to any Person, any obligation of such
Person of any kind, including, without limitation, any liability of such Person
on any claim, whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such claim is discharged, stayed or otherwise affected by any
proceeding.

         "Offering Memorandum" means the Offering Memorandum dated March 22,
2001 relating to the issuance and sale of the Senior Notes, including all of the
documents of Williams or WCG filed on or prior to the Closing Date with the SEC
and incorporated by reference therein.

         "Officer's Certificate" means a certificate of any Person signed by any
Authorized Officer of such Person.

         "Organizational Documents" means, with respect to any Person, any
certificate of incorporation, charter, by-laws, memorandum of association,
articles of association, partnership agreement, limited liability company
agreement, certificate of formation of a limited liability company, certificate
of limited partnership, certificate of trust, trust agreement or other agreement
or instrument under which such Person is formed or organized, and which
established the legal personality of such Person under Applicable Law, and any
amendment to any of the foregoing.

         "Partial Remarketing" has the meaning assigned to such term in Section
1 of the Remarketing and Support Agreement.

<PAGE>   49
                                       11

         "Participation Agreement" means the agreement dated as of March 22,
2001 among Williams, WCG, WCL, the Issuer, the Co-Issuer, the Share Trust,
United States Trust Company of New York and Wilmington Trust Company.

         "PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).

         "Permit" means any approval, certificate of occupancy, consent, waiver,
exemption, variance, franchise, order, permit, authorization, right or license
of or from any Governmental Authority.

         "Permitted Assets" means:

                  (i)      the WCG Note;

                  (ii)     Equity Interests in the Co-Issuer;

                  (iii)    Financial Investments; and

                  (iv)     any other assets which the Issuer may be required to
                           own pursuant to the Transaction Documents to which it
                           is a party.

         "Permitted Liens" with respect to any Person means the following:

                  (i) Liens for taxes not yet delinquent or Liens for taxes
         being contested in good faith and by appropriate proceedings for which
         adequate reserves (in the good faith judgment of the management of such
         Person) have been established;

                  (ii) Liens in respect of property or assets imposed by law
         which were incurred in the ordinary course of business, such as
         carriers', warehousemen's, materialmen's and mechanics' Liens and other
         similar Liens arising in the ordinary course of business, which do not
         in the aggregate materially detract from the value of such property or
         assets or materially impair the use thereof in the operation of the
         business of such Person or any Subsidiary of such Person;

                  (iii) Liens created under or contemplated by any Transaction
         Document;

                  (iv) Mechanic's Liens, carrier's Liens, and other Liens to
         secure the performance of tenders, statutory obligations, contract
         bids, government contracts, performance and return-of-money bonds and
         other similar obligations, incurred in the ordinary course of business
         (exclusive of obligations in respect of the payment for borrowed
         money), whether pursuant to statutory requirements, common law or
         consensual arrangements; and

                  (v) Liens in the nature of covenants, restrictions, rights,
         easements and minor irregularities in title that do not materially
         interfere with the business or operations of such Person as presently
         conducted.

<PAGE>   50
                                       12

         "Permitted Redemption Sources" means (a) payments in respect of the WCG
Note (including proceeds of a Reset Sale or a sale of the WCG Note under Section
9.04(i) of the Indenture); (b) amounts on deposit in the Pledged Share Trust
Reserve Account; (c) proceeds received pursuant to the Remarketing and Support
Agreement; and/or (d) Qualified Equity Proceeds as a result of the exercise by
Williams of the Share Trust Release Option.

         "Person" means any individual, trust, estate, association, Business
Entity or other entity, or a government or any political subdivision or agency
thereof.

         "Plan" means an employee pension benefit plan (other than a
Multiemployer Plan) as defined in Section 3(2) of ERISA currently maintained by,
or, in the event such plan has terminated, to which contributions have been
made, or an obligation to make contributions has accrued, during any of the five
plan years preceding the date of termination of such plan by, Williams or any
ERISA Affiliate of Williams or WCG or any ERISA Affiliate of WCG, as applicable,
for employees of Williams or any ERISA Affiliate of Williams or WCG or any ERISA
Affiliate of WCG, as applicable and covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code.

         "Plan Asset Regulation" means 29 C.F.R. Section 2510.3-101(f).

         "Pledged Share Trust Reserve Account" has the meaning assigned to such
term in Section 5.01 of the Indenture.

         "Preliminary Offering Memorandum" means the Preliminary Offering
Memorandum dated March 13, 2001 relating to the issuance and sale of the Senior
Notes.

         "Pricing" means, with respect to any security, the determination of the
price at which the underwriter(s) (in a firm commitment underwriting
arrangement) or the purchaser(s) are willing to purchase, and the holder of such
security (or issuer thereof, if such security is being newly issued) is willing
to sell, such security.

         "Principal Market" means the principal exchange on which the security
in question is traded or the principal market on which such security is quoted,
as determined by the board of directors of the issuer of such security from time
to time.

         "Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.

         "PUHCA" means the Public Utility Holding Company Act of 1935, as
amended.

         "Qualified Equity Proceeds" has the meaning assigned to such term in
Section 1.01 of the Indenture.

         "Qualified Institutional Buyers" means certain "qualified institutional
buyers" within the meaning of Rule 144A.

<PAGE>   51
                                       13

         "Rating Agencies" means Moody's, S&P and Fitch, and "Rating Agency"
means any of them.

         "Redemption Proceeds" means any Collections in respect of the payment
of the redemption price for the Williams Preferred Stock upon a Redemption Event
in accordance with the Certificate of Designation.

         "Regulation S" means Regulation S under the Securities Act.

         "Reimbursement Obligations" means the Liquidity Reimbursement
Obligations and the Share Trust Reimbursement Obligations.

         "Remarketing Agents" has the meaning assigned to such term in Section 1
of the Remarketing and Support Agreement.

         "Remarketing and Support Agreement" means the Williams Preferred Stock
Remarketing, Registration Rights and Support Agreement dated as of the Closing
Date among Williams, the Issuer, the Share Trust, the Indenture Trustee and the
Initial Remarketing Agent.

         "Required Holders" has the meaning assigned to such term in Section
1.01 of the Indenture.

         "Reset Date" has the meaning assigned to such term in Section 1 of the
Remarketing and Support Agreement.

         "Reset Event" has the meaning assigned to such term in Section 4.02 of
the WCG Note Indenture.

         "Reset Sale" has the meaning assigned to such term in Section 1.01 of
the WCG Note Indenture.

         "Responsible Officer" means (a) with respect to Williams, WCG and WCL,
any officer of Williams, WCG or WCL, as the case may be, with knowledge of the
financial matters of Williams, WCG or WCL, as the case may be, (b) with respect
to the Issuer, the Issuer Trustee, the Share Trust or the Share Trustee, any
officer of the Corporate Trust Administration group, or other officer who
customarily performs similar functions of the Issuer Trustee or the Share
Trustee, respectively, and who has direct responsibility for the administration
of the related trust and (c) with respect to the Indenture Trustee, any officer
assigned to the principal corporate trust office of the Indenture Trustee,
including any managing director, vice president, assistant vice president,
assistant treasurer, assistant secretary or any other officer of the Indenture
Trustee customarily performing functions similar to those performed by any of
the above designated officers and having direct responsibility for the
administration of the Indenture, and also, with respect to a particular matter,
any other officer, to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.

         "Rule 144A" means Rule 144A under the Securities Act.

<PAGE>   52
                                       14

         "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor by merger, consolidation or
otherwise to its business.

         "SEC" means the Securities and Exchange Commission.

         "Secured Obligations" has the meaning assigned to such term in Section
3.01 of the Indenture.

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

         "Security for the Senior Notes" has the meaning assigned to such term
in Section 3.01 of the Indenture.

         "Semi-Annual Cash Flow" has the meaning assigned to such term in
Section 5.02 of the Indenture.

         "Senior Note Interest Amount" has the meaning assigned to such term in
Section 1.01 of the Indenture.

         "Senior Note Payment Date" has the meaning assigned to such term in
Section 1.01 of the Indenture.

         "Senior Note Rate" has the meaning assigned to such term in Section
1.01 of the Indenture.

         "Senior Notes" has the meaning assigned to such term in the Indenture.

         "Share Trust" means the Williams Share Trust, a special purpose
statutory business trust created under the law of the State of Delaware for the
purpose of holding the Shares.

         "Share Trust Agreement" means the Amended and Restated Share Trust
Agreement dated as of the Closing Date among the Issuer, Williams, the Share
Trust and the Share Trustee.

         "Share Trust Amount" means, as of any date of determination, an amount
equal to the excess, if any, of (a) an amount sufficient to redeem the Senior
Notes on the applicable Mandatory Redemption Date (including any accrued and
unpaid interest and/or any make-whole premium payable in accordance with
Articles XIV and XV of the Indenture, as applicable) over (b) the sum of (i) any
funds or the proceeds of the sale of any investments then held in the Indenture
Interest Account and the Indenture Redemption Account and (ii) any funds then
held in the Pledged Share Trust Reserve Account and, in each case in clauses (i)
and (ii), available to the Indenture Trustee for the payment of the Senior
Notes.

         "Share Trust Contribution Account" has the meaning assigned to such
term in Section 4.05(a) of the Share Trust Agreement.

<PAGE>   53
                                       15

         "Share Trust Distribution Account" has the meaning assigned to such
term in Section 4.02(a) of the Share Trust Agreement.

         "Share Trust Reimbursement Obligations" has the meaning assigned to
such term in Section 27 of the Remarketing and Support Agreement.

         "Share Trust Release Option" has the meaning assigned to such term in
Section 7(d) of the Remarketing and Support Agreement.

         "Share Trust Remedy" has the meaning assigned to such term in Section
9.04(a)(i) of the Indenture.

         "Share Trust Remedy Standstill Period" has the meaning assigned to such
term in Section 9.04(b)(i) of the Indenture.

         "Share Trust Reserve" has the meaning assigned to such term in Article
II of the Share Trust Agreement.

         "Share Trust Security Agreement" means the Share Trust Security
Agreement dated as of March 28, 2001 between the Indenture Trustee and the Share
Trust.

         "Share Trustee" means Wilmington Trust Company, a Delaware banking
corporation, in its capacity as trustee under the Share Trust Agreement or any
successor thereto pursuant to the Share Trust Agreement.

         "Shares" means the Initial Shares and the Additional Shares, or the
portion thereof that is then required to be issued or available for remarketing,
as the context requires.

         "Special Default" has the meaning assigned to such term in Section 1.01
of the Indenture.

         "Spin-Off Notice" has the meaning assigned to such term in Section 1.01
of the Indenture.

         "Standstill Expiration Date" means the expiration date of any
Standstill Period.

         "Standstill Period" means an Asset Remedy Standstill Period or a Share
Trust Remedy Standstill Period.

         "Stock Price/Credit Downgrade Trigger" has the meaning assigned to such
term in Section 1.01 of the Indenture.

         "Structuring Advisor" means CSFB.

         "Subsidiary" means, as to any Person, any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital

<PAGE>   54
                                       16

stock of any other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency), (b) the right or power to
direct, in the case of any entity of which such Person or any of its
Subsidiaries is a general partner, or both the beneficial ownership of and the
right or power to direct, in any other case, such limited liability company,
partnership or joint venture, or (c) the beneficial interest in such trust or
estate, is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries; provided, however, that no such
corporation, partnership, joint venture or other entity shall (i) constitute a
Subsidiary of Williams, unless such entity is a Consolidated Subsidiary of
Williams, or (ii) constitute a Subsidiary of any other Person unless such entity
would appear as a consolidated subsidiary of such Person on a consolidated
balance sheet of such Person prepared in accordance with GAAP.

         "Successful Repricing Date" has the meaning assigned to such term in
Section 1 of the Remarketing and Support Agreement.

         "Tax" or "Taxes" means any and all taxes (including net income, gross
income, franchise, value added, ad valorem, gross receipts, leasing, excise,
fuel, excess profits, sales, use, property (personal or real, tangible or
intangible) and stamp taxes), levies, imposts, duties, charges, assessments or
withholdings of any nature whatsoever, general or special, ordinary or
extraordinary, now existing or hereafter created or adopted, together with any
and all interest, penalties, fines, additions to tax and interest thereon.

         "Trading Day" means a day on which the Principal Market with respect to
a security is regularly scheduled to be open for trading. For purposes of this
definition, a day on which any such Principal Market is scheduled to close (as
opposed to unexpectedly closing) prior to its regular closing time shall not
constitute a Trading Day.

         "Transaction Documents" means the Participation Agreement, the Issuer
Trust Agreement, the Indenture, the Senior Notes, the Share Trust Agreement, the
Remarketing and Support Agreement, the Share Trust Security Agreement, the
Certificate of Designation, the Williams Demand Loans, the Note Purchase
Agreement, the Liquidity Agreement, the WCG Note Indenture, the WCG Note, the
WCG Note Reset Remarketing Agreement and any other documents required to be
executed in order to satisfy, comply or evidence compliance with Section 2.3 of
the Participation Agreement.

         "Treasury Yield" has the meaning assigned to such term in Section 1.01
of the Indenture.

         "Trigger Event" means the occurrence of any of the following: (i) an
Acceleration Trigger, (ii) a Maturity Trigger and (iii) a Stock Price/Credit
Downgrade Trigger.

         "Trust Act" means the Delaware Business Trust Act, Chapter 38 of Title
12 of the Delaware Code, 12 Del. Code Section 3801 et seq., as in effect from
time to time.

         "Voluntary Bankruptcy" means, with respect to any Person: (a) (i) the
inability of such Person generally to pay its debts as such debts become due,
(ii) the failure of such

<PAGE>   55
                                       17

Person generally to pay its debts as such debts become due or (iii) an admission
in writing by such Person of its inability to pay its debts generally or a
general assignment by such Person for the benefit of creditors; (b) the filing
of any petition by such Person seeking to adjudicate it a bankrupt or insolvent,
or seeking for itself any liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of such Person or its debts under
any Applicable Law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking, consenting to, or acquiescing in the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for such Person or for any substantial part of its property or
the filing of an answer or other pleading admitting or failing to contest the
allegations of a petition filed against it in any proceeding of the foregoing
nature; or (c) action taken by such Person to authorize any of the actions set
forth above.

         "WCG" means Williams Communications Group, Inc., a corporation
organized under the law of the State of Delaware.

         "WCG Material Adverse Effect" means (i) a material adverse effect on
the business, property or financial condition of WCG and its consolidated
Subsidiaries taken as a whole or (ii) the invalidity or unenforceability, in
whole or in material part, of any Transaction Document to which WCG is a party.

         "WCG Note" means the note of WCG in an aggregate original principal
amount of $1,500,000,000 issued under the WCG Note Indenture and sold to the
Issuer on the Closing Date.

         "WCG Note Event of Default" means an "Event of Default" as such term is
defined in the WCG Note Indenture.

         "WCG Note Indenture" means the indenture dated as of the Closing Date
between WCG and United States Trust Company of New York.

         "WCG Note Indenture Trustee" means United States Trust Company of New
York, in its capacity as trustee under the WCG Note Indenture or any successor
thereto under the WCG Note Indenture.

         "WCG Note Interest" means a rate of 8.25% per annum initially, as reset
in accordance with the WCG Note Indenture.

         "WCG Note Reset Remarketing Agreement" means the WCG Note Remarketing
and Registration Rights Agreement dated as of March 28, 2001 among Williams,
WCG, WCL, the Issuer, United States Trust Company of New York, as Indenture
Trustee and WCG Note Indenture Trustee, and CSFB, as remarketing agent.

         "WCG Payment Direction Letter" means the letter agreement among WCG,
the Issuer and the Indenture Trustee dated as of the Closing Date directing WCG
to make payments in respect of the WCG Note directly to the Indenture Trustee.

<PAGE>   56
                                       18

         "WCL" means Williams Communications, LLC, a limited liability company
organized under the law of the State of Delaware.

         "WCL Credit Agreement" means the Credit Agreement dated as of September
8, 1999 among WCL, as Borrower, WCG, as Guarantor, the Lenders party thereto,
Bank of America, N.A., as Administrative Agent, The Chase Manhattan Bank, as
Syndication Agent, and Bank of Montreal and The Bank of New York, as
Co-Documentation Agents, as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time, including any agreement
extending the maturity of, refinancing, renewing, refunding, replacing or
otherwise restructuring (including, without limitation, increasing the amount of
available borrowings thereunder, and all obligations with respect thereto, in
each case, to the extent permitted therein or adding additional borrowers or
guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.

         "WCL Interest" has the meaning assigned to such term in Article II of
the Issuer Trust Agreement.

         "WCL Material Adverse Effect" means (i) a material adverse effect on
the business, property or financial condition of WCL and its consolidated
Subsidiaries taken as a whole or (ii) the invalidity or unenforceability, in
whole or in material part, of any Transaction Document to which WCL is a party.

         "Williams" means The Williams Companies, Inc., a corporation organized
under the law of the State of Delaware.

         "Williams Common Stock" means the common stock, par value $1.00 per
share, of Williams.

         "Williams Credit Agreement" means the Credit Agreement dated as of July
25, 2000 among Williams, Northwest Pipeline Corporation, a Delaware corporation,
Transcontinental Gas Pipe Line Corporation, a Delaware corporation, Texas Gas
Transmission Corporation, a Delaware corporation, the Banks party thereto, The
Chase Manhattan Bank and Commerzbank AG, as Co-Syndication Agents, Credit
Lyonnais New York Branch, as Documentation Agent, and Citibank, N.A., as Agent,
as the same may be amended, amended and restated, supplemented or otherwise
modified from time to time, including any agreement extending the maturity of,
refinancing, renewing, refunding, replacing or otherwise restructuring
(including, without limitation, increasing the amount of available borrowings
thereunder, and all obligations with respect thereto, in each case, to the
extent permitted therein or adding additional borrowers or guarantors
thereunder) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders.

         "Williams Demand Loans" means loans made from time to time by the Share
Trust to, and at all times the obligor under which is, Williams or an affiliate
of Williams

<PAGE>   57
                                       19

(provided that any loan to such affiliate is unconditionally guaranteed by
Williams); provided that (i) the obligations of Williams with respect to such
loan or such guarantee, as the case may be, rank at all times at least pari
passu in priority of payment with all other senior unsecured Indebtedness of
Williams, (ii) such loan is payable upon demand thereon but only to the extent
of the amount demanded, (iii) such loan is denominated in Dollars, (iv) such
loan is evidenced by a promissory note, the form of which is attached as Exhibit
B to the Share Trust Agreement, (v) such loan bears interest at the fixed rate
provided therein and (vi) each Williams Demand Loan shall provide that the
principal and accrued interest thereon becomes due and payable upon the
occurrence of any Trigger Event.

         "Williams Event" has the meaning assigned to such term in Section 1.01
of the Indenture.

         "Williams Material Adverse Effect" means (i) a material adverse effect
on the business, assets, condition or operations of Williams and its
consolidated Subsidiaries taken as a whole or (ii) the invalidity or
unenforceability, in whole or in material part, of any Transaction Document to
which Williams is a party.

         "Williams Payment Direction Letter" means the letter agreement among
the Share Trust, Williams and the Indenture Trustee dated as of the Closing Date
directing Williams to make payments (or to cause any other obligor under a
Williams Demand Loan to make payments) in respect of the Williams Demand Loan
representing the Share Trust Reserve directly to the Indenture Trustee.

         "Williams Preferred Stock" means the March 2001 Mandatorily Convertible
Single Reset Preferred Stock, par value $1.00 per share, issued by Williams and
having an initial liquidation preference, in the aggregate, of $1,400,000,000.

         "Withdrawal Liability" has the meaning assigned to such term under Part
1 of Subtitle E of Title IV of ERISA.

         SECTION 1.02 Rules of Construction. This Annex A and, except as
otherwise expressly provided in any Transaction Document with respect to
specific rules of construction for such Transaction Document, all Transaction
Documents and all appendices, schedules and exhibits to the Transaction
Documents shall be governed by, and construed in accordance with, the following
rules of construction:

                  (a) Computation of Time Periods. In the computation of periods
         of time from a specified date to a later specified date, the word or
         phrase "from" and "commencing on" mean "from and including" and the
         words or phrase "to" and "until" and "ending on" mean "to but
         excluding".

                  (b) Accounting Terms. All accounting terms shall be construed
         in accordance with GAAP applied consistently, except to the extent
         otherwise specified in the provisions of Section 1.01 or 1.02 hereof.

<PAGE>   58
                                       20

                  (c) No Presumption Against Any Party. Neither any Transaction
         Document nor any uncertainty or ambiguity therein shall be construed
         against any particular party, whether under any rule of construction or
         otherwise. On the contrary, each Transaction Document has been reviewed
         by each of the parties thereto and their respective counsel and shall
         be construed and interpreted according to the ordinary meaning of the
         words used so as to fairly accomplish the purposes and intentions of
         all parties thereto.

                  (d) Use of Certain Terms. Unless the context of any
         Transaction Document requires otherwise, the plural includes the
         singular, the singular includes the plural, and "including" has the
         inclusive meaning of "including without limitation". The words
         "hereof", "herein", "hereby", "hereunder", and other similar terms of
         any Transaction Document refer to such Transaction Document (including
         this Annex A to the extent incorporated or referred to therein (whether
         or not actually attached thereto) and all other annexes, schedules and
         exhibits attached thereto) as a whole and not exclusively to any
         particular provision of such Transaction Document. All pronouns and any
         variations thereof shall be deemed to refer to the masculine, feminine,
         or neuter, singular or plural, as the identity of the Person or Persons
         may require.

                  (e) Headings and References. Article, Section and other
         headings are for reference only, and are not intended to describe,
         interpret, define or limit the scope, extent or intent of any
         Transaction Document or any provision thereof. References in any
         Transaction Document to Articles, Sections, Annexes, Schedules and
         Exhibits refer to Articles, Sections, Annexes, Schedules, and Exhibits
         of or to such Transaction Document, and references in Sections of such
         Transaction Document to any clause refer to such clause of such
         Section. Whether or not specified in any Transaction Document or in
         this Annex A, references in such Transaction Document or in this Annex
         A to such Transaction Document, any other Transaction Document or any
         other agreement include, unless otherwise provided in such Transaction
         Document or in this Annex A, this Annex A, such Transaction Document,
         the other Transaction Documents and such other agreements, as the case
         may be, as the same may be amended, restated, supplemented or otherwise
         modified from time to time pursuant to the provisions thereof and of
         any other Transaction Documents applicable thereto. In the event that
         any term is defined by reference to a Transaction Document and such
         Transaction Document is terminated, such term has the meaning assigned
         to it in such Transaction Document immediately prior to the termination
         thereof. Whether or not specified in any Transaction Document or in
         this Annex A, a reference to any Applicable Law or law (as the case may
         be) as at any time shall mean that Applicable Law or law (as the case
         may be) as it may have been amended, restated, supplemented or
         otherwise modified from time to time, and any successor Applicable Law
         or law (as the case may be). A reference to a Person includes the
         successors and assigns of such Person, but such reference shall not
         increase, decrease or otherwise modify in any way the provisions in
         this Annex A or any Transaction Document governing the assignment of
         rights and

<PAGE>   59
                                       21

         obligations under, or the binding effect, of any provision of this
         Annex A or any Transaction Document.

                  (f) Revised Annex A. On and after the Closing Date, all
         references to this Annex A in this Agreement or any other Transaction
         Document shall, without any further act by any Person, be deemed to
         refer to such Annex A as so revised on or prior to the Closing Date and
         as amended, supplemented, amended and restated or otherwise modified
         from time to time after the Closing Date in accordance with the
         Transaction Documents.

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