Document:

<PAGE>   1
                                                                   EXHIBIT 10(a)

                             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>
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                                                                                                               ----

<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
<PAGE>   4

                  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
<PAGE>   5
                                       2

                  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.

                             Participation Agreement
<PAGE>   6
                                       3

                  (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.

                             Participation Agreement
<PAGE>   7
                                       4

                  (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.

                             Participation Agreement
<PAGE>   8
                                       5

                  (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,

                             Participation Agreement
<PAGE>   9
                                       6

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

                             Participation Agreement
<PAGE>   10
                                       7

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

                             Participation Agreement
<PAGE>   11
                                       8

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

                             Participation Agreement
<PAGE>   12
                                       9

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

                             Participation Agreement
<PAGE>   13
                                       10

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.

                             Participation Agreement
<PAGE>   14
                                       11

                  (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
                                                                       Exhibit A

               CERTIFICATE OF WILLIAMS COMMUNICATIONS GROUP, INC.

                  This Certificate is being delivered by an Authorized Officer
of Williams Communications Group, Inc. ("WCG") pursuant to Section 5.2(d)(ii)
of the Participation Agreement dated as of March 22, 2001 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Participation Agreement"), among Williams, WCG, WCL, the Issuer, the
Co-Issuer, the Share Trust, United States Trust Company of New York and
Wilmington Trust Company. Capitalized terms used herein and not otherwise
defined herein have the meanings assigned to such terms in Annex A to the
Particpation Agreement.

                  WCG hereby certifies that, to the knowledge of WCG, there
does not exist on the date of this Certificate any Trigger Event, any Event of
Default or any WCG Note Event of Default [except for the following:
____________________________ [if any Trigger Event, Event of Default or WCG
Note Event of Default exists, describe the details thereof and the action that
WCG has taken and proposes to take with respect thereto.]].

         IN WITNESS WHEREOF, this certificate is executed and delivered this
____ day of ______, 200_.

                                            WILLIAMS COMMUNICATIONS GROUP, INC.

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

<PAGE>   40

                                                                         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>   41
                                       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>   42
                                       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>   43
                                       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>   44
                                       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>   45
                                       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>   46
                                       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>   47
                                       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>   48
                                       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>   49
                                       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>   50
                                       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>   51
                                       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>   52
                                       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>   53
                                       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>   54
                                       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>   55
                                       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>   56
                                       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>   57
                                       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>   58
                                       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>   59
                                       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>   60
                                       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.<PAGE>   1
                                                                 EXHIBIT 10(b)

                                                                  EXECUTION COPY

                          THE WILLIAMS COMPANIES, INC.
                            (a Delaware Corporation)

                              WILLIAMS SHARE TRUST
                               (a Delaware Trust)

                                 WCG NOTE TRUST
                               (a Delaware Trust)

                    UNITED STATES TRUST COMPANY OF NEW YORK,
                              as Indenture Trustee

                                       and

                     CREDIT SUISSE FIRST BOSTON CORPORATION

                                       as
                            Initial Remarketing Agent

                            WILLIAMS PREFERRED STOCK
                            REMARKETING, REGISTRATION
                          RIGHTS AND SUPPORT AGREEMENT

                           Dated as of March 28, 2001

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page
<S>                  <C>                                                                                      <C>
         SECTION 1.  Definitions..................................................................................2
         SECTION 2.  Appointment of Remarketing Agents............................................................6
         SECTION 3.  Agreement to Register Shares.................................................................7
         SECTION 4.  Additional Covenants of Williams............................................................10
         SECTION 5.  Representations, Warranties and Agreements of the Offerors..................................12
         SECTION 6.  Registration Procedures.....................................................................15
         SECTION 7.  New Series; Remarketing Events; Share Trust Release Option..................................19
         SECTION 8.  Remarketing Procedures; Additional Shares...................................................22
         SECTION 9.  Fees and Expenses...........................................................................24
         SECTION 10.  Resignation and Removal of the Remarketing Agents; Additional Agents.......................24
         SECTION 11.  Dealing in Williams Securities.............................................................26
         SECTION 12.  Conditions to Remarketing Agents' Obligations..............................................27
         SECTION 13.  Indemnification............................................................................29
         SECTION 14.  Termination of Obligations of Remarketing Agents...........................................33
         SECTION 15.  Remarketing Agents' Performance; Duty of Care; Liability...................................33
         SECTION 16.  GOVERNING LAW..............................................................................34
         SECTION 17.  Term of Agreement..........................................................................34
         SECTION 18.  Successors and Assigns.....................................................................34
         SECTION 19.  Headings...................................................................................35
         SECTION 20.  Severability...............................................................................35
         SECTION 21.  Remarketing Agents Not Acting as Underwriter...............................................35
         SECTION 22.  Amendments.................................................................................35
         SECTION 23.  Notices....................................................................................36
         SECTION 24.  Counterparts...............................................................................36
         SECTION 25.  Regarding the Indenture Trustee............................................................36
         SECTION 26.  Limitation of Liability of Wilmington Trust Company........................................36
         SECTION 27.  Issuer's Reimbursement Obligation..........................................................37
         SECTION 28. Cash Flow Default...........................................................................38
</TABLE>

Schedule I    -        Certain transactions described in Section 3(e)
Schedule II   -        Registration rights described in Section 5(l)
Schedule III  -        List of Eligible Remarketing Agents

                                       i

<PAGE>   3

                  WILLIAMS PREFERRED STOCK REMARKETING, REGISTRATION RIGHTS AND
SUPPORT AGREEMENT, dated as of March 28, 2001 (this "Agreement"), among (i) The
Williams Companies, Inc., a Delaware corporation; (ii) Williams Share Trust, a
statutory business trust formed under the Trust Act; (iii) WCG Note Trust, a
statutory business trust formed under the Trust Act; (iv) United States Trust
Company of New York, as Indenture Trustee; and (v) Credit Suisse First Boston
Corporation. Capitalized terms used herein without definition have the meanings
assigned to such terms in Section 1.

                  WHEREAS, Williams has issued 14,000 shares of Williams
Preferred Stock with an aggregate liquidation preference of $1,400,000,000 to
the Share Trust (the "Initial Shares");

                  WHEREAS, Williams has issued the shares of Williams Preferred
Stock referenced in the preceding Whereas clause to the Share Trust in exchange
for certificates of beneficial ownership interest and cash pursuant to the Share
Trust Agreement and has reserved for issuance 110,000,000 shares of Williams
Common Stock into which such Initial Shares of Williams Preferred Stock will be
convertible;

                  WHEREAS, each share of Williams Preferred Stock has been
issued with a liquidation preference of $100,000 plus accrued and unpaid
dividends thereon with mandatory and optional conversion provisions as provided
in the Certificate of Designation, which conversion provisions adjust upon the
Reset Date;

                  WHEREAS, Williams and the Share Trust have requested CSFB to
act as Remarketing Agent with respect to the Shares under this Agreement for the
purpose of (i) using its commercially reasonable efforts upon a Trigger Event to
recommend to Williams the terms and quantity of shares of Williams equity
securities which, if sold by Williams, would generate net proceeds at least
equal to the Share Trust Amount and (ii) using its commercially reasonable
efforts following a Remarketing Event to remarket a sufficient amount of the
Shares held by the Share Trust to generate net proceeds at least equal to the
Share Trust Amount, including paying (or causing payment of) the purchase price
for the Shares subject to such remarketing to the Indenture Trustee in
accordance with this Agreement, each in collaboration with the other Remarketing
Agent(s), if any;

                  WHEREAS, the parties hereto agree that it is advisable, in
connection with the remarketing activities to be undertaken by the Remarketing
Agents, for the resale of the Shares held by the Share Trust to be registered
with the SEC under the Securities Act;

                  WHEREAS, the Issuer has issued the Senior Notes as of the date
hereof, and the Indenture Trustee's rights hereunder will support the Issuer's
repayment obligations with respect to the Senior Notes;

                  WHEREAS, each of the parties herein is willing to assume the
duties ascribed to it hereunder on the terms and conditions expressly set forth
herein; and

                  WHEREAS, this Agreement is being entered into pursuant to the
terms of the Participation Agreement;

<PAGE>   4

                  NOW, THEREFORE, for and in consideration of the covenants made
herein and in the Participation Agreement and subject to the conditions herein
set forth, the parties hereto agree as follows:

                  SECTION 1. Definitions. Capitalized terms used and not defined
in this Agreement shall have the meanings assigned to them in Annex A to the
Participation Agreement dated as of March 22, 2001 among Williams, the Issuer,
the Co-Issuer, WCG, WCL, the Share Trust, United States Trust Company of New
York and Wilmington Trust Company (each as defined therein). In addition, as
used herein:

                  "Additional Registration Statement" has the meaning set forth
in Section 3(a)(ii).

                  "Cash Flow Default" means the occurrence of a Cash Flow Event
of Default.

                  "Conditions Precedent" has the meaning set forth in Section
12.

                  "Effectiveness Period" means, with respect to any Registration
Statement, the period that begins on the date of effectiveness of such
Registration Statement and extends to the earlier of (i) the date on which all
Shares registered thereunder have been remarketed under such Registration
Statement, (ii) the date on which all of the Senior Notes cease to be
outstanding and (iii) the date on which the obligations of Williams hereunder
are deemed satisfied in whole pursuant to Section 7(d).

                  "Eligible Remarketing Agent" means any nationally or
internationally recognized investment banking firm listed on Schedule III
hereto; provided that Schedule III hereto may be amended by Williams at any time
and from time to time to add any investment banking firm that is ranked among
the top ten placement agents or underwriters for all domestic equity-related
securities offerings (by either aggregate dollar value of such offerings or by
number of issues credited to the lead manager) according to the rankings most
recently published by Investment Dealers' Digest or any equivalent publication
or to subtract any investment banking firm that does not make a market in
Williams Common Stock at such time.

                  "Failed Registration" means a failure by Williams to (i) file
a Registration Statement no later than 21 days following a Trigger Event or, if
a Shelf Registration Statement is then not legally permitted, provide no later
than 21 days following a Trigger Event to the Remarketing Agents written
assurance, reasonably acceptable to the Remarketing Agents, that the
Registration Statement will be declared, or will otherwise become, effective
promptly after a Pricing of the Shares, or otherwise have an effective
Registration Statement available in accordance with Section 3(a); (ii) use its
reasonable best efforts to diligently pursue the registration of the Shares (and
the underlying Williams Common Stock, to the extent applicable) when so required
by this Agreement; (iii) use its reasonable best efforts to cause the
Registration Statement to be declared effective no later than 90 days following
a Trigger Event; or (iv) satisfy the applicable Conditions Precedent specified
in Section 12 within the time periods set forth therein.

                  "Failed Repricing" means a failure to establish a Remarketed
Price on any Repricing Date, including due to the failure to satisfy the
applicable Conditions Precedent specified in Section 12 within the time periods
set forth therein.

                                      -2-

<PAGE>   5

                  "Failed Repricing Date" means any Repricing Date on which a
Failed Repricing occurs.

                  "Filed Documents" means all documents filed by Williams with
the SEC under the Securities Act or the Exchange Act that are, or are required
to be, incorporated by reference into the Registration Statement or Prospectus
or any applicable private placement memorandum.

                  "Final Sale Date" means the date on which the Share Trust
shall have sold Shares generating aggregate net proceeds at least equal to the
Share Trust Amount.

                  "Initial Remarketing Agent" means CSFB in its capacity as a
remarketing agent hereunder.

                  "Initial Repricing Date" means, (a) with respect to a public
offering of the Shares, the later of (i) the date on which the Registration
Statement is declared effective or, if a Shelf Registration Statement is then
not legally permitted, the first date on which Williams provides the Remarketing
Agents written assurance, reasonably acceptable to the Remarketing Agents, that
the Registration Statement will be declared, or will otherwise become, effective
promptly after a Pricing of the Shares in accordance with applicable securities
laws and (ii) the tenth Trading Day following the Remarketing Notification Date
and (b) if a Failed Registration has occurred, the earliest date upon which
Milbank, Tweed, Hadley & McCloy LLP or other national or international
securities counsel selected by the Remarketing Agents and approved by Williams
advises, in writing, that a private placement of the Shares may be commenced in
compliance with applicable securities laws.

                  "Inspectors" has the meaning set forth in Section 6(h).

                  "Legal Impossibility" means (i) with respect to the
remarketing of the Initial Shares (A) on or at any time after the Initial
Repricing Date it is legally impossible to remarket the Initial Shares,
including, without limitation, due to the failure of Williams to have a
sufficient number of additional shares of authorized but unissued Williams
Common Stock for conversion of the Initial Shares that have not been reserved
for other purposes as of any date on which any Initial Shares are sold or (B) on
or after a Trigger Event a material breach by Williams of its obligations
hereunder has occurred, including, without limitation, due to the failure of
Williams to satisfy the Conditions Precedent specified in Sections 12(b) and
12(c) (but excluding Section 12(d)) within the time periods set forth therein
except for any breach by Williams which pursuant to the terms hereof would
result in a Failed Registration and (ii) with respect to the remarketing of
Additional Shares (A) on or at any time after the Reset Date it is legally
impossible to remarket the Additional Shares, including, without limitation, due
to the failure of Williams to have a sufficient number of additional shares of
authorized but unissued Williams Common Stock for conversion of the Additional
Shares that have not been reserved for other purposes as of any date on which
any Additional Shares are sold or (B) the Remarketing Agents are unable to sell
sufficient Additional Shares as contemplated by Section 8(f) within 180 days
from the earlier of (1) a Partial Remarketing of the Initial Shares or (2) 120
days following any Trigger Event.

                  "Marketing Materials" has the meaning set forth in Section
13(a).

                                      -3-
<PAGE>   6

                  "NASD" means the National Association of Securities Dealers,
Inc.

                  "Nasdaq" has the meaning assigned to such term in Section
6(k).

                  "New Series Distribution Agreement" means an underwriting,
purchase, distribution or placement agency agreement to be entered into among
Williams, the Remarketing Agents and any other Persons engaged by Williams
(including the lead underwriters if Williams elects not to have one or more of
the Remarketing Agents as the lead underwriters) or the Remarketing Agents (with
the approval of Williams, such approval not to be unreasonably withheld or
delayed) to market and sell the New Series as contemplated herein (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 to the Remarketing Agents on or prior to the
Pricing of the New Series.

                  "Offerors" means Williams and the Share Trust.

                  "Partial Remarketing" means a remarketing of all of the Shares
then available as to which, although a Failed Remarketing has not occurred, net
proceeds at least equal to the Share Trust Amount are not generated and paid to
the Indenture Trustee.

                  "Prospectus" means any preliminary or final prospectus or
prospectus supplement or other offering document to be used by the Remarketing
Agents in connection with a public offering of the Shares.

                  "Records" has the meaning set forth in Section 6(h).

                  "Registration Expenses" means any and all expenses incident to
the performance of or compliance by Williams and the Share Trust with this
Agreement, including, without limitation: (i) all SEC, stock exchange or NASD
registration and filing fees, (ii) all necessary fees and expenses reasonably
incurred in connection with compliance with state securities or "blue sky" laws
(including reasonable fees and disbursements of counsel for the Remarketing
Agents in connection with blue sky qualification of any of the Shares or the New
Series (and the Williams Common Stock into which such Shares or the New Series
are convertible, to the extent applicable)) and compliance with the rules of the
NASD, (iii) all expenses authorized by Williams or the Share Trust of any
Persons in preparing or assisting in preparing, word processing, printing and
distributing any Remarketing Documents and any amendments or supplements thereto
and in preparing or assisting in preparing, printing and distributing the
Distribution Agreement and any other agreements or documents relating to the
performance and compliance by the Remarketing Agents with this Agreement, (iv)
all rating agency fees incurred in connection with the remarketing process, (v)
the fees and disbursements of counsel for Williams and the Share Trust and of
the independent certified public accountants of Williams, including the expenses
of any "comfort letters" required by or incident to such performance and
compliance, (vi) the fees and expenses of the Share Trustee and any transfer
agent or custodian

                                      -4-
<PAGE>   7

for the Shares (and the Williams Common Stock into which such Shares are
convertible, to the extent applicable), (vii) all fees and expenses incurred in
connection with the listing, if any, of any of the Shares or the New Series (and
the Williams Common Stock into which such Shares or New Series are convertible,
to the extent applicable) on any securities exchange or quotation system and
(viii) the reasonable fees and expenses of any special experts retained by
Williams in connection with any Shelf Registration Statement, including
reasonable fees of counsel to the Remarketing Agents.

                  "Registration Statement" means any registration statement of
Williams for the registration of the Shares then available for sale (and the
underlying Williams Common Stock, to the extent applicable) with the SEC
pursuant to the provisions of this Agreement and all amendments and supplements
to any such Registration Statement, including post-effective amendments and in
each case including the Prospectus contained therein (if any), all exhibits
thereto and all information incorporated by reference therein, and, if no
Prospectus is required to be delivered at the time of such registration, any
term sheet or other document prescribed by the SEC to describe the securities to
be sold thereunder.

                  "Remarketed Price" means the price at which the Remarketing
Agents, using commercially reasonable efforts, can sell the fewest number of
Shares then available that will generate net proceeds that are at least equal to
the Share Trust Amount or, if the Remarketing Agents cannot generate net
proceeds that are at least equal to the Share Trust Amount through the sale of
all of the Shares then available, then the highest price at which the
Remarketing Agents, using commercially reasonable efforts, can sell all of the
Shares then available.

                  "Remarketing Agent" means the Initial Remarketing Agent and/or
any Eligible Remarketing Agent that, in each case, is appointed and agrees to
act as a remarketing agent pursuant to the terms of this Agreement.

                  "Remarketing Conditions" has the meaning set forth in Section
8(c)(i).

                  "Remarketing Documents" means any documents prepared by or at
the direction of or in conjunction with Williams and/or the Share Trust that are
intended to be used by the Remarketing Agents in the remarketing of the Shares,
including, without limitation (i) in the case of a public offering, the
Registration Statement and all exhibits thereto and any Prospectus, (ii) any
private placement memoranda and (iii) any Filed Document incorporated by
reference with respect to any of the foregoing.

                  "Remarketing Event" has the meaning set forth in Section 7(b).

                  "Remarketing Notification Date" means the date on which the
Remarketing Agents receive notice pursuant to Section 8(a) from the Share
Trustee or the Indenture Trustee of their obligation to commence the remarketing
of the Initial Shares.

                  "Remarketing Period" means the period beginning on and
including the Remarketing Notification Date and continuing until and including
the Reset Date.

                  "Repricing Date" means the Initial Repricing Date and each
Trading Day thereafter until the Reset Date.

                                      -5-
<PAGE>   8

                  "Reset Date" means the earlier of (i) the date of the
consummation of the remarketing (including a Partial Remarketing) of the Shares
then being remarketed (which is expected to be on or about the third Trading Day
following the Successful Repricing Date) or (ii) the date a Failed Remarketing
is declared.

                  "Restriction Termination Date" has the meaning set forth in
Section 3(e).

                  "Share Trust Release Option" has the meaning set forth in
Section 7(d).

                  "Shelf Registration Statement" means one or more "shelf"
Registration Statements of Williams pursuant to the provisions of Section 3
which registers the continuous offer and sale by the Share Trust and, to the
extent required, Williams of the Shares (and the underlying Williams Common
Stock, to the extent applicable) on an appropriate form under Rule 415 under the
Securities Act or any similar or successor rule that may be adopted by the SEC
and all amendments and supplements to such registration statement(s), including
post-effective amendments, in each case including the Prospectus contained
therein (if any), all exhibits thereto and all information incorporated by
reference therein. Unless the context otherwise requires, the term "Shelf
Registration Statement" includes any Shelf Registration Statement and/or
Additional Registration Statement filed pursuant to Section 3(a) and any
Subsequent Shelf Registration Statement filed pursuant to Section 3(c).

                  "Subsequent Shelf Registration Statement" has the meaning set
forth in Section 3(c).

                  "Successful Repricing Date" means the Repricing Date on which
the Pricing by the Remarketing Agents of the Shares at the Remarketed Price
occurs.

                  "Williams Group" has the meaning set forth in Section 3(e).

                  The rules of construction set forth in Annex A to the
Participation Agreement shall apply to this Agreement as if set forth herein.

                  SECTION 2. Appointment of Remarketing Agents.

                  (a) Williams hereby appoints CSFB, and CSFB hereby accepts
such appointment, as Remarketing Agent (subject to Section 10), for the purpose
of, acting together with any other Remarketing Agent(s), (i) using its
commercially reasonable efforts upon a Trigger Event to recommend to Williams
the terms and quantity of the New Series that would generate net proceeds in an
amount reasonably expected to be at least equal to the Share Trust Amount and,
subject to Section 7, to market and sell such New Series pursuant to the New
Series Distribution Agreement and/or (ii) using its commercially reasonable
efforts following a Remarketing Event to remarket and sell a sufficient amount
of the Shares then held by the Share Trust to generate net proceeds at least
equal to the Share Trust Amount (to the extent not discharged following the
offering of the New Series), in each case subject to the terms and conditions
herein, including paying (or, in the case of a purchase by Persons other than
the Remarketing Agent(s), causing payment of) the purchase price (up to the
Share Trust Amount) for the New Series or the Shares subject to such remarketing
to the Indenture Trustee.

                                      -6-
<PAGE>   9

                  (b) Each Remarketing Agent agrees, in consultation with the
other Remarketing Agent(s):

                  (i) to use its commercially reasonable efforts to recommend
         the applicable terms of the New Series and the Pricing thereof in order
         to generate net proceeds in an amount reasonably expected to be at
         least equal to the Share Trust Amount and to market such New Series in
         accordance with the New Series Distribution Agreement;

                  (ii) to use its commercially reasonable efforts to remarket
         the Shares during the Remarketing Period to the extent necessary;

                  (iii) to use its commercially reasonable efforts to establish
         the Remarketed Price on each Repricing Date until (and including) the
         Successful Repricing Date;

                  (iv) to notify Williams, the Share Trustee, the Indenture
         Trustee and the Issuer promptly of the Remarketed Price and of the
         occurrence of a Successful Repricing Date or of a Failed Remarketing;
         and

                  (v) to accept Shares for remarketing and to pay (or to cause
         payment of) the purchase price for remarketed Shares to the Indenture
         Trustee.

                  SECTION 3. Agreement to Register Shares.

                  (a) Unless an effective Registration Statement of Williams
would permit the remarketing and resale of Shares as contemplated by this
Agreement,

                  (i) Williams shall prepare and file with the SEC, as soon as
         practicable following a Trigger Event (taking into account the legal
         requirements for registration at such time) but in any event no later
         than 21 days following such Trigger Event, a Shelf Registration
         Statement for an offering to be made by the Share Trust on a continuous
         basis covering the Initial Shares and the Williams Common Stock into
         which any such Initial Shares are convertible, and

                  (ii) if Williams is required to issue Additional Shares
         pursuant to Section 8(f), Williams shall prepare and file with the SEC,
         as soon as practicable (taking into account the legal requirements for
         registration at such time) but in any event no later than five days
         (or, if such fifth day is not a Business Day, by the next succeeding
         Business Day) following the Partial Remarketing of the Initial Shares
         and the determination of such amount and terms of the Additional
         Shares, an additional registration statement (the "Additional
         Registration Statement") for an offering to be made by the Share Trust
         on a continuous basis covering the Additional Shares and to the extent
         applicable any Williams Common Stock into which such Additional Shares
         are convertible.

                  Any Shelf Registration Statement shall be filed on Form S-3 or
another appropriate form permitting registration of the offer and sale of such
Shares by the Share Trust for remarketing in the manner designated herein
(unless a Shelf Registration Statement is then not legally permitted, in which
case Williams shall provide no later than 21 days following a Trigger Event to
the Remarketing Agents written assurance, reasonably acceptable to the

                                      -7-
<PAGE>   10

Remarketing Agents, that an appropriate Registration Statement will be declared,
or will otherwise become, effective promptly after a Pricing of the Initial
Shares and, if applicable, the Additional Shares). Williams and the Share Trust
shall undertake no offer or sale of Shares under any such outstanding Shelf
Registration Statement such that the Remarketing Agents can no longer rely on
such outstanding Shelf Registration Statement to remarket and resell the Initial
Shares and, if applicable, the Additional Shares.

                  (b) Williams shall use its reasonable best efforts to cause
any Shelf Registration Statement to be declared effective under the Securities
Act as soon as practicable (taking into account the legal requirements for
registration at such time) but in any event no later than 90 days following a
Trigger Event and to keep any such Shelf Registration Statement continuously
effective under the Securities Act during its Effectiveness Period.

                  (c) If any Shelf Registration Statement ceases to be effective
for any reason at any time during the Effectiveness Period, Williams shall use
its reasonable best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof and in any event shall within 30 days of
such cessation of effectiveness (or such longer period as is reasonably
necessary to comply with the requirements of this sentence, provided that
Williams is diligently pursuing the earliest possible compliance therewith)
amend such Registration Statement in a manner reasonably expected to obtain the
withdrawal of the order suspending the effectiveness thereof or file an
additional Shelf Registration Statement (a "Subsequent Shelf Registration
Statement"). If a Subsequent Shelf Registration Statement is filed, Williams
shall use its reasonable best efforts to cause its effectiveness as soon as
practicable after such filing and to keep the Subsequent Shelf Registration
Statement continuously effective under the Securities Act during its
Effectiveness Period.

                  (d) A Shelf Registration Statement pursuant to this Section 3
will be deemed effective when declared effective by the SEC; provided that, if,
after it has been declared effective, the offering of Shares pursuant to a Shelf
Registration Statement is subject to any stop order, injunction or other order
or requirement of the SEC or any other governmental agency or court, such Shelf
Registration Statement will be deemed not to have been effective during the
period of such interference until the offering of Shares pursuant to such Shelf
Registration Statement may legally resume. Williams will be deemed not to have
used its reasonable best efforts to cause the Shelf Registration Statement to
become or to remain effective during the requisite period if Williams
voluntarily takes any action knowing that it would result in any such Shelf
Registration Statement not being declared effective or in the Remarketing Agents
not being able to remarket such Shares during the applicable period unless (i)
such action is required by Applicable Law or (ii) such failure of the Shelf
Registration Statement to be declared or remain effective or to provide for the
continuous marketing of the Shares is the result of the occurrence of a merger,
acquisition or similar event requiring disclosure of financial or other
information with respect to such transaction; provided that Williams is
diligently pursuing the earliest possible provision thereof.

                  (e) Williams and the Share Trust agree not to issue, sell or
offer for sale (or permit the offer or sale in any manner that would require the
consent or participation of Williams), or engage in marketing efforts in respect
of, any securities that are exchangeable for or convertible into equity
securities of Williams (whether as a term of, or pursuant to an

                                      -8-
<PAGE>   11

agreement or commitment in respect of, any such security or by means of a unit
or combination of any one or more securities or financial instruments) or permit
the issue, offer or sale of, or marketing efforts in respect of, any security of
any trust in which Williams or any Subsidiary of Williams (collectively, the
"Williams Group") has an interest if such security is guaranteed by any member
of the Williams Group and is exchangeable for or convertible into equity
securities of Williams, from the date of any Trigger Event to a date (the
"Restriction Termination Date") which is the earlier of (x) 10 days after the
Reset Date and (y) the date on which an amount equal to the Share Trust Amount
has been deposited with the Indenture Trustee, without the prior written consent
of the Indenture Trustee (given solely at the written direction of the Required
Holders); provided, however, that the foregoing shall not restrict any of the
following: (i) the issue, offer, sale or marketing efforts in respect of the New
Series, the Initial Shares or the Additional Shares in accordance with this
Agreement, (ii) the issue, offer, sale or marketing efforts in respect of
securities of any member of the Williams Group that are not exchangeable for or
convertible into equity securities of Williams (whether as a term of, or
pursuant to an agreement or commitment in respect of, any such security or by
means of a unit or combination of any one or more securities or financial
instruments), (iii) any member of the Williams Group from complying with any of
its obligations pursuant to arrangements entered into before the Closing Date
described on Schedule I hereto, (iv) any member of the Williams Group or any
third party from consummating a sale or issuance (or any related offer or
marketing efforts) of any such securities if the Pricing of such securities has
occurred prior to the date of any Trigger Event, (v) the offer, issuance or sale
of a security, including any related marketing efforts, consisting of the
conversion, exercise or exchange of another security in accordance with its
terms, which original security has been issued either in a registered public
offering or as consideration for an acquisition or merger, (vi) the filing of a
registration statement and any sale, offer, issuance or marketing effort in
connection with any employee benefit plan or other compensatory plan of any
member of the Williams Group or any direct stock purchase or dividend
reinvestment plan of any member of the Williams Group, (vii) any filing or
processing of any registration statement in respect of any security with the SEC
or any state securities regulator that does not involve the issuance, sale or
marketing efforts by any member of the Williams Group of (or in respect of) any
equity security prior to the Restriction Termination Date or (viii) any
issuance, sale or offer in connection with a shareholder rights plan, as such
term is commonly used. Williams further agrees that it shall not enter into any
agreement that would require it or permit any third party to contravene the
provisions of this Section 3(e).

                  (f) In the event that, at any time a Shelf Registration
Statement is required to be effective hereunder, the shelf registration
procedures set forth in Rule 415 or any successor rule are not available to
Williams and the Share Trust, Williams shall use its reasonable best efforts to
cause another appropriate Registration Statement with regard to the Shares (and
the Williams Common Stock into which such Shares are convertible, to the extent
applicable) and the remarketing of the Shares hereunder to be effective on each
subsequent Repricing Date.

                  (g) Williams shall, to the extent required by the remarketing
of the Shares hereunder and by any listing or quotation of the Shares (and the
Williams Common Stock into which such Shares are convertible, to the extent
applicable) reasonably requested by the Remarketing Agents, file a registration
statement with the SEC under the Exchange Act.

                                      -9-
<PAGE>   12

                  (h) Williams shall, to the extent permitted by Applicable Law
(i) and subject to further approval by the Board of Directors of Williams and to
the rules of any exchange on which the Williams Common Stock may then be listed
or quoted, authorize and issue such amount of the New Series as shall be
necessary to generate aggregate net proceeds in an amount reasonably expected to
be at least equal to the Share Trust Amount, in accordance with Section 7(a),
and (ii) upon a Partial Remarketing and upon such further approval by the Board
of Directors of Williams as may be required, issue to the Share Trust such
amount of Additional Shares as shall be necessary to generate aggregate net
proceeds reasonably expected to be at least equal to the Share Trust Amount, in
accordance with Section 8(f); provided that Williams' obligation to issue
Additional Shares shall be limited based upon the number of the then authorized
but unissued shares of Williams Common Stock that have not been reserved for
other purposes. Williams shall maintain the reservation of 110,000,000 shares of
Williams Common Stock into which the Williams Preferred Stock may be
convertible, as such number of shares may be adjusted from time to time in
accordance with adjustments to the "Optional Conversion Rate" as defined in the
Certificate of Designation and subject to the limitations set forth in Section
6(7) of the Certificate of Designation, until the Reset Date, at which time
Williams shall increase or decrease such reservation so as to at least equal the
number of shares of Williams Common Stock into which the Williams Preferred
Stock is then convertible; provided that the reservation of shares of Williams
Common Stock issuable upon conversion of the Williams Preferred Stock may be
revoked by the Board of Directors of Williams effective one year and one day
following the consummation of the sale of the New Series and the application of
the proceeds thereof, if such proceeds are at least equal to the Share Trust
Amount. Williams shall also reserve for issuance a sufficient number of shares
of Williams Common Stock issuable upon conversion or exercise of the New Series
and the Additional Shares (other than any such Shares consisting of Williams
Common Stock) in connection with the issuance of, and at the time of issuance
of, such New Series or Additional Shares (in the case of the Additional Shares,
such number of shares to be reserved based on the same methodology applicable to
the Williams Preferred Stock set forth above).

                  (i) Williams shall provide a copy of each Registration
Statement filed pursuant to this Agreement, any amendment thereto, any
Prospectus included therein and any supplement to any such Prospectus to the
Indenture Trustee and the Issuer promptly following the filing or use thereof.

                  SECTION 4. Additional Covenants of Williams. Williams
covenants with the Remarketing Agents as follows:

                  (a) Williams will provide prompt notice to the Remarketing
Agents of any notification by a Rating Agency to Williams of any change
downwards, or the placing on credit watch with negative implications (or
comparable status), with respect to the ratings of Williams' senior unsecured
long-term debt.

                  (b) Williams will, as promptly as reasonably possible after a
Trigger Event, furnish to the Remarketing Agents:

                  (i) after the same have been prepared by Williams, the
         Remarketing Documents (including in each case any amendment or
         supplement thereto and each document

                                      -10-
<PAGE>   13

         incorporated therein by reference); provided, however, that, with
         respect to any Filed Documents that are included in such Remarketing
         Documents, Williams shall not be obligated to furnish such Filed
         Documents prior to the time they are filed with the SEC and such
         delivery requirements shall be deemed to be satisfied by making any
         such Filed Documents available either through the SEC's EDGAR
         electronic filing system (or any successor electronic filing system
         which makes such Filed Documents generally available to the public
         electronically) or on Williams' home page on the "World Wide Web" at
         www.williams.com;

                  (ii) each Filed Document filed after the date of this
         Agreement; provided, however, that such delivery requirements shall be
         deemed to be satisfied by making any such Filed Documents available
         either through the SEC's EDGAR electronic filing system (or any
         successor electronic filing system which makes such Filed Documents
         generally available to the public electronically) or on Williams' home
         page on the "World Wide Web" at www.williams.com;

                  (iii) notice of the occurrence of any events that would
         reasonably be expected to cause the conditions precedent set forth
         herein or in the Distribution Agreement not to be fulfilled within the
         time period specified herein or therein or, if no time period is
         specified, then within a reasonable period of time; and

                  (iv) in connection with the remarketing of Shares, such other
         information as each of the Remarketing Agents may reasonably request
         from time to time.

Williams agrees to provide each of the Remarketing Agents with as many copies of
the foregoing written materials referred to in (i) and other information as the
Remarketing Agents may reasonably request for use in connection with the
remarketing of Shares and consents to the use thereof for such purpose.

                  (c) If, at any time after a Trigger Event during which the
Remarketing Agents would be obligated to take any action under this Agreement,
any event or condition known to Williams relating to or affecting Williams, any
Subsidiary thereof or the Shares (and the Williams Common Stock into which such
Shares are convertible, to the extent applicable) shall occur that would
reasonably be expected to affect the accuracy or completeness of any statement
of a material fact contained in the Remarketing Documents, Williams shall
promptly notify the Remarketing Agents in writing of the circumstances and
details of such event or condition.

                  (d) If, at any time when the Prospectus is required by the
Securities Act to be delivered in connection with the remarketing of the Shares
contemplated by this Agreement, any event relating to or affecting Williams or
the Share Trust or of which Williams shall be advised in writing by the
Remarketing Agents shall occur that in the reasonable view of counsel for the
Remarketing Agents or counsel for Williams should be set forth in a supplement
to, or an amendment of, the Prospectus in order to make the Prospectus not
misleading in the light of the circumstances when it is delivered to a
purchaser, Williams will, at its expense, amend or supplement the Prospectus by
either (i) preparing and furnishing to the Remarketing Agents at Williams'
expense a reasonable number of copies of a supplement or supplements or an
amendment or amendments to the Prospectus or (ii) making an appropriate filing
pursuant to

                                      -11-
<PAGE>   14

Section 13 of the Exchange Act, which will supplement or amend the Prospectus so
that, as supplemented or amended, it will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading.

                  (e) Williams will notify the Remarketing Agents of its
intention to file or prepare any amendment or supplement to any Remarketing
Document (including any post-effective amendment and any revised prospectus
which Williams proposes for use by the Remarketing Agents in connection with the
remarketing of the Shares which differs from the prospectus on file at the SEC
at the time the Registration Statement becomes effective, whether or not such
revised prospectus is required to be filed pursuant to Rule 424(b) under the
Securities Act) other than Filed Documents and will not file or use any such
amendment or supplement or other documents other than Filed Documents in a form
to which the Remarketing Agents or counsel to the Remarketing Agents shall
reasonably object.

                  (f) Williams, during the period when the Prospectus is
required to be delivered under the Securities Act, will file promptly all
documents required to be filed by Williams with the SEC pursuant to Section 13
or 14 of the Exchange Act.

                  (g) Williams will provide to the Share Trustee and the Issuer
copies of all notices and reports and all other information received by it from
the Remarketing Agents in connection with the remarketing process under this
Agreement.

                  (h) Williams will not grant on or after the date hereof
registration rights to any Person under which such Person could request
registration of its securities on any Registration Statement used to register
any of the Shares (and the Williams Common Stock into which such Shares are
convertible, to the extent applicable).

                  SECTION 5. Representations, Warranties and Agreements of the
Offerors. Williams represents and warrants, with respect to itself, the Issuer
and the Share Trust, to, and agrees with, the Remarketing Agents as of the date
hereof, as follows:

                  (a) Any Filed Documents will, when they are filed, conform in
all material respects with the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations thereunder; and no
such document, when it is filed, will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that this representation and
warranty does not apply to statements or omissions in the Registration Statement
or Prospectus or private placement memorandum (or in amendments or supplements
thereto) based upon information relating to the Remarketing Agents furnished to
Williams in writing by the Remarketing Agents or the representatives of the
Remarketing Agents expressly for use therein.

                  (b) The Initial Shares have been duly authorized and validly
issued and are fully paid and non-assessable and not subject to any preemptive
or similar rights and conform in all material respects as to legal matters to
the description thereof contained in the Offering Memorandum and any amendment
or supplement thereto; upon issuance to the Share Trust and

                                      -12-
<PAGE>   15

payment by the Share Trust of cash in an amount at least equal to the aggregate
par value of Additional Shares, any and all Additional Shares will be duly
authorized and validly issued, fully paid and non-assessable and not subject to
any preemptive or similar rights and will conform in all material respects as to
legal matters to the description thereof contained in the Offering Memorandum
and any amendment or supplement thereto; the Williams Common Stock into which
such Initial Shares are convertible on the date hereof have been duly authorized
and upon any adjustment to the conversion rate, additional shares of Williams
Common Stock will be duly authorized in accordance with Section 3(h), 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 Common Stock will be validly issued,
fully paid and non-assessable and will not be subject to any preemptive or
similar rights. 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 otherwise
disclosed in the Offering Memorandum or contemplated in the Transaction
Documents and except for such subscriptions, rights, warrants, options, calls,
convertible securities, commitments of sale or Liens granted or issued by
Williams that are not required to be disclosed in the Filed Documents.

                  (c) Each of the Share Trust Agreement and this Agreement has
been duly authorized by all necessary corporate or trust action, as applicable,
by each of Williams and the Share Trust, other than the issuance of the New
Series and any Additional Shares (and, to the extent applicable, Williams Common
Stock into which such New Series or Additional Shares are convertible) which may
require future approval by the Board of Directors or shareholders of Williams,
and has been duly executed and delivered by each of Williams and the Share
Trust, and, subject to the due execution and delivery by the other parties to
such document, such document constitutes the legal, valid and binding
obligations of Williams and the Share Trust, enforceable against Williams and
the Share Trust in accordance with its terms, except as the enforceability
thereof may be limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or other 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 this Agreement, any applicable public
policy on the enforceability of provisions relating to contribution and
indemnification.

                  (d) The Share Trust has been duly organized and is validly
existing and in good standing as a business trust under the Trust Act with all
requisite trust powers and all material Permits required to carry on its
business as now conducted and as contemplated by the Transaction Documents; the
Share Trust is not a party to any agreement other than the Transaction Documents
to which it is a party and has not engaged in any activities since its
organization (other than those incidental to its organization and other
appropriate steps including arrangement for the payment of fees to its trustees,
the authorization and issuance of certificates of beneficial interest, 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 made any distributions since its
organization; and the Share

                                      -13-
<PAGE>   16

Trust is not and will not be subject to United States Federal, state or local
income or franchise taxes.

                  (e) Williams is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and
possesses all corporate powers and other authorizations and licenses necessary
to engage in its business and operations as now conducted and as contemplated by
the Offering Memorandum, except for those authorizations and licenses the
failure to obtain or maintain which could not reasonably be expected to have a
Williams Material Adverse Effect. Williams is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or the ownership or leasing of property
requires such qualification, except where the failure to be so qualified would
not reasonably be expected to result in a Williams Material Adverse Effect.

                  (f) (i) Williams is (x) 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, individually or in the
aggregate, would not, in the reasonable judgment of Williams, be expected to
result in a Williams Material Adverse Effect, (y) not in violation of its
charter or bylaws, and (z) not in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan agreement,
mortgage, lease or other agreement or instrument that is material to Williams
and its subsidiaries taken as a whole, to which Williams is a party or by which
Williams or any of its properties is bound, except to the extent a default would
not reasonably be expected to result in a Williams Material Adverse Effect; and
(ii) the Share Trust is not in breach or violation of or in default (nor, after
reasonable inquiry, to the actual knowledge of any Responsible Officer of
Williams, has an event occurred that with notice or lapse of time or both would
constitute a default) under the terms of (A) its Organizational Documents, (B)
any of the Transaction Documents or any other agreements to which the Share
Trust is a party, or (C) any Applicable Law.

                  (g) None of the due execution, delivery or performance by each
of Williams and the Share Trust of each Transaction Document to which it is a
party (i) requires any authorization or approval or other action by, or any
notice or filing with, any Governmental Authority except (A) those that have
been made, (B) those that may be required under Federal or state securities or
blue sky laws in connection with the sale of the Shares or the New Series or
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, in
connection with a private placement of any shares in connection herewith and (C)
in the case of Williams, those that are necessary to comply with laws, rules,
regulations and orders required in the ordinary course to comply with its
ongoing obligations under the Transaction Documents; provided that all
authorizations, approvals, actions, notices and filings described in this clause
(C) that are necessary to have been obtained or made on or prior to the Closing
Date for the consummation by Williams of the transactions contemplated by this
Agreement and the other 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, (ii) contravenes, or constitutes a default under,
its Organizational Documents or any Applicable Law in effect on the Closing Date
or any material contractual restriction or, in the case of the Share Trust, any
agreement or instrument binding on or affecting it, (iii) results in the
imposition or creation of any Lien on any of its assets except Permitted Liens
(in the case of the Share Trust, of the type described in clause (iii) of the
definition thereof) or (iv) results in the termination, suspension or revocation
of any

                                      -14-
<PAGE>   17

material permit, license, covenant, exemption, franchise, authorization or other
approval (each, an "Authorization") of Williams or the Share Trust or results in
any other material impairment of the rights of the holder of any such
Authorization.

                  (h) None of Williams, the Issuer and the Share Trust is, and
after giving effect to the issuance of the Shares to the Share Trust none of
Williams, the Issuer and the Share Trust will be, required to register as an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended.

                  (i) Williams is not a "holding company" or a "subsidiary
company" of a "holding company" within the meaning of PUHCA. Neither the Issuer
nor the Share Trust is subject to regulation as a "holding company" or a
"subsidiary company" or an "affiliate" of a "holding company," in each case as
such terms are defined in the PUHCA.

                  (j) The Share Trust is the beneficial owner of the Initial
Shares and, upon issuance of the Additional Shares, if any, will be the
beneficial owner of such Additional Shares, free and clear of any Lien or claims
of any Person, except as otherwise provided in the Transaction Documents.

                  (k) Except as disclosed in Williams' Form 10-K for the year
ended December 31, 2000, (i) there is no Proceeding pending or, to the knowledge
of any Responsible Officer of Williams, threatened against or involving Williams
or any Subsidiary of Williams in any court or before any arbitrator of any kind
or before or by any governmental body, which, in the reasonable judgment of
Williams (taking into account the exhaustion of all appeals), would reasonably
be expected to have a Williams Material Adverse Effect or which, despite any
such disclosure, purports to affect the legality, validity, binding effect or
enforceability against Williams of any Transaction Document to which it is a
party, and (ii) there is no Proceeding pending against or, after reasonable
inquiry, to the actual knowledge of any Responsible Officer of Williams,
threatened against the Share Trust before any Governmental Authority.

                  (l) Other than as disclosed in Schedule II hereto, there are
no contracts, agreements or understandings (other than this Agreement) between
Williams and any Person granting such Person the right to register any
securities of Williams pursuant to any Registration Statement used to register
the Shares (and, to the extent applicable, the Williams Common Stock into which
such Shares are convertible).

                  (m) Other than as disclosed in Schedule I hereto, there are no
contracts, agreements or understandings between Williams and any Person which
would require Williams to issue securities that are exchangeable for or
convertible into equity securities of Williams that, if entered into after the
date of this Agreement, would cause Williams or a third party to contravene the
provisions of Section 3(e).

                  SECTION 6. Registration Procedures. In connection with the
obligations of Williams with respect to any Shelf Registration Statement
pursuant to Sections 3(a) and 3(c) or a Registration Statement pursuant to
Section 3(f), Williams shall after any Trigger Event:

                  (a) as far in advance as practical before filing any
Registration Statement or any amendment thereto, provide the Remarketing Agents
and their counsel with reasonably complete

                                      -15-
<PAGE>   18

drafts of all such documents proposed to be filed (including exhibits), and the
Remarketing Agents shall have the opportunity to object to any information
pertaining to the Remarketing Agents that is contained therein and to make
comments and suggestions as to the presentation of the information therein, and
Williams will make the corrections and other changes reasonably requested by the
Remarketing Agents with respect to such information prior to filing any such
Registration Statement (including any amendment thereto) unless it has a
reasonable basis not to do so;

                  (b) prepare and file with the SEC as soon as reasonably
practicable such amendments and supplements to each Registration Statement as
may be necessary to keep such Registration Statement continuously effective for
its Effectiveness Period and to any Prospectus used in connection therewith as
may be necessary to maintain the effectiveness of such Registration Statement or
the accurateness or completeness of the information contained therein and to
comply with the provisions of the Securities Act with respect to the disposition
of all Shares covered by such Registration Statement in accordance with the
remarketing procedures set forth herein, until the end of the Effectiveness
Period;

                  (c) promptly notify the Remarketing Agents and their counsel:

                  (i) when any Registration Statement or any Prospectus to be
         used hereunder, or any amendment or supplement thereto, has been filed
         and, with respect to such Registration Statement or any post-effective
         amendment thereto, when the same has become effective;

                  (ii) of any written comments from the SEC with respect to any
         filing referred to in clause (i) and of any written request by the SEC
         for amendments or supplements to such Registration Statement or
         Prospectus;

                  (iii) of the notification to Williams by the SEC of (x) its
         initiation of any proceeding with respect to the issuance by the SEC or
         (y) the issuance by the SEC of any stop order suspending the
         effectiveness of such Registration Statement;

                  (iv) of the receipt by Williams of any notification with
         respect to the suspension of the qualification of the Shares for sale
         under the applicable securities or blue sky laws of any jurisdiction;

                  (v) of the happening of any event that makes any statement of
         a material fact made in such Registration Statement or related
         Prospectus or any document incorporated or deemed to be incorporated
         therein by reference untrue or that requires the making of any changes
         in such Registration Statement, Prospectus or related documents so
         that, in the case of the Registration Statement, it will not contain
         any untrue statement of a material fact or omit to state any material
         fact required to be stated therein or necessary to make the statements
         therein not misleading and, in the case of the Prospectus, it will not
         contain any untrue statement of a material fact or omit to state any
         material fact required to be stated therein or necessary to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading; and

                                      -16-
<PAGE>   19

                  (vi) of the reasonable determination by Williams that a
         post-effective amendment to such Registration Statement would be
         appropriate;

                  (d) furnish such proper information as may be lawfully
required and otherwise cooperate in qualifying and registering the Shares (and
the Williams Common Stock into which such Shares are convertible, to the extent
applicable) for offer and sale under the blue-sky laws of such jurisdictions in
the United States as the Remarketing Agents may designate and such other
governmental agencies or authorities within the United States as may be
necessary to enable the Remarketing Agents to remarket the Shares in accordance
with the remarketing procedures set forth herein, provided that neither Williams
nor the Share Trust shall be required to qualify as a foreign corporation, trust
or other entity or dealer in securities, to file any consents to service of
process under the laws of any jurisdiction or to meet any other requirements
deemed by Williams to be unduly burdensome;

                  (e) use its reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement and to obtain
the withdrawal of any order suspending the effectiveness of a Registration
Statement as soon as practicable;

                  (f) cooperate with the Share Trustee to facilitate the timely
delivery of certificates representing Shares to be remarketed that do not bear
any restrictive legends (to the extent appropriate) and cause such Shares to be
issued in such denominations and registered in such names as the Remarketing
Agents may reasonably request within two Trading Days following the applicable
Successful Repricing Date or such later time as agreed between Williams and the
Remarketing Agents;

                  (g) upon the occurrence of any circumstance contemplated by
Sections 3(c), 4(d), 6(c)(iii) (if such circumstance can be remedied as provided
in this Section 6(g)), 6(c)(v) or 6(c)(vi), use its reasonable best efforts to
amend or supplement the Registration Statement or the Prospectus by either (i)
preparing and furnishing to the Remarketing Agents at Williams' expense a
reasonable number of copies of a supplement or supplements or an amendment or
amendments to the Prospectus or (ii) making an appropriate filing pursuant to
Section 13 of the Exchange Act, which will supplement or amend the Prospectus so
that, as supplemented or amended, it will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading; and Williams agrees to notify the
Remarketing Agents as promptly as practicable after the occurrence of such an
event; and each Remarketing Agent agrees that, following such notice, it will
suspend use of the Prospectus until Williams has amended or supplemented the
Prospectus to correct such misstatement or omission;

                  (h) make available for inspection by the Remarketing Agents
and any attorney, accountant or other agent retained by the Remarketing Agents
(collectively, the "Inspectors"), during reasonable business hours during the
Remarketing Period, all financial and other records, pertinent corporate
documents and properties of the Offerors (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise any applicable due diligence
responsibilities or prepare for any potential due diligence defense and cause
the officers, directors and employees of the Offerors to supply all information
in each case reasonably requested by any such Inspector in connection with the
Shelf Registration Statement; provided,

                                      -17-
<PAGE>   20

however, that Records which Williams determines, in good faith, to be
confidential and any Records which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors; provided that the Inspectors may
disclose any information in such Records (A) as has become generally available
to the public through no fault of the Inspectors or the Remarketing Agents, (B)
in the opinion of Inspectors' counsel, as may be required under compulsion of
legal process (in which case such Records shall be disclosed to the extent and
for the limited purpose so required), (C) in the opinion of the Inspectors'
counsel, in order to comply with any Applicable Law applicable to the Inspectors
or the Remarketing Agents and (D) as may be necessary for the Remarketing Agents
to comply with the Transaction Documents; and each Remarketing Agent will be
required to agree further that it will, if such confidential Records are
disclosed to the Inspectors, cause the Inspectors to keep such Records
confidential except in the circumstances described in this paragraph and, upon
learning that disclosure of such Records is, in the opinion of the Inspectors'
counsel, required pursuant to clauses (B) or (C) above, unless otherwise
prohibited by such legal process or Applicable Law, cause the Inspectors to give
prompt written notice of such requirement to disclose to Williams as soon as
reasonably practicable and, unless otherwise prohibited by such legal process or
Applicable Law, cause the Inspectors to refrain from disclosing such information
until Williams shall have a reasonable opportunity, at its expense, to undertake
appropriate action to prevent disclosure of the Records determined or notified
by Williams to be confidential;

                  (i) following any public offering of remarketed Shares, make
generally available to its securityholders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or
any similar rule promulgated under the Securities Act) no later than 45 days
after the end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) commencing at the end of the fiscal
quarter in which the Reset Date occurs;

                  (j) cooperate with the Remarketing Agents and any other
Person, if any, participating in the remarketing and/or the disposition of the
Shares and their respective counsel in connection with filings, if any, required
to be made with the NASD;

                  (k) if so requested by the Remarketing Agents, use its
reasonable best efforts to cause the Initial Shares and, if required to be
issued, any Additional Shares (and the Williams Common Stock into which such
Shares are convertible, to the extent applicable) to be listed or quoted on the
New York Stock Exchange ("NYSE"), the National Association of Securities Dealers
Automated Quotation ("Nasdaq") National Market System or any other exchange or
quotation system (with the choice of such exchange or market to be at the
election of Williams) on or before the Initial Repricing Date with respect to
the Initial Shares or the Successful Repricing Date for such Additional Shares,
subject to official notice of issuance; and

                  (l) use its reasonable best efforts to take all other steps
necessary to effect the registration of the Shares (and the Williams Common
Stock into which such Shares are convertible, to the extent applicable) in
connection with the remarketing thereof as contemplated herein.

                  Each Remarketing Agent hereby agrees that, upon receipt of any
notice from Williams or the Share Trust of the happening of any event of the
kind described in Section

                                      -18-
<PAGE>   21

6(c)(iii), 6(c)(v) or 6(c)(vi), such Remarketing Agent will forthwith
discontinue its remarketing of Shares pursuant to the Registration Statement
relating thereto until such Remarketing Agent shall have received copies of the
supplemented or amended Prospectus contemplated by Section 6(g) and, if so
directed by Williams, will deliver to Williams (at the expense of Williams) all
copies, other than permanent file copies, then in its possession of the
Prospectus relating to the Shares at the time of receipt of such notice.

                  SECTION 7. New Series; Remarketing Events; Share Trust Release
Option.

                  (a) If a Trigger Event shall have occurred,

                  (i) (A) Subject to further approval by the Board of Directors
         of Williams in accordance with Section 3(h), if required, Williams
         shall have the right to offer and sell as soon as practicable such
         number of shares of the New Series in accordance with the New Series
         Distribution Agreement in order to generate net proceeds in an amount
         reasonably expected to be at least equal to the Share Trust Amount and
         (B) to the extent permitted under Applicable Law, the Offerors shall
         comply with the provisions of this Agreement with respect to the
         registration of the Initial Shares (and the Williams Common Stock into
         which such Initial Shares are convertible).

                  (ii) The Remarketing Agents shall use their commercially
         reasonable efforts to recommend to Williams the terms and quantity of
         shares of the New Series that would generate net proceeds in an amount
         reasonably expected to be at least equal to the Share Trust Amount. If
         any Remarketing Agent advises Williams that in its opinion the shares
         of the New Series authorized for sale by Williams cannot be marketed to
         receive net proceeds in an amount reasonably expected to be at least
         equal to the Share Trust Amount, such Remarketing Agent will have no
         obligation to market the New Series or to enter into the New Series
         Distribution Agreement. In the event one or more Remarketing Agents so
         advises Williams, Williams shall have the right (in addition to its
         rights under Section 10(f)) to appoint one or more Eligible Remarketing
         Agents to join with the remaining Remarketing Agents to market the New
         Series on its behalf, and each such replacement Eligible Remarketing
         Agent shall enter into the New Series Distribution Agreement or a
         similar distribution agreement with respect to the offering and sale of
         the New Series but shall not become a Remarketing Agent for any other
         purpose under this Agreement. In any event, Williams shall have the
         right to designate which Remarketing Agents shall act as lead managers,
         bookrunners or, if applicable, global coordinators with respect to the
         New Series.

                  (iii) Upon the sale of the New Series, Williams shall cause
         all of the net proceeds thereof (if less than or equal to the Share
         Trust Amount) or a portion of the net proceeds thereof equal to the
         Share Trust Amount (if such proceeds are greater than the Share Trust
         Amount) to be deposited into the Share Trust Proceeds Account. The
         Indenture Trustee hereby agrees to apply such net proceeds to the
         redemption of the Senior Notes in accordance with the Indenture.

                  (iv) If the amount of net proceeds of the marketing of the New
         Series to be deposited with the Indenture Trustee pursuant to clause
         (iii) above is at least equal to the

                                      -19-
<PAGE>   22

         Share Trust Amount, the Share Trustee shall be authorized to release
         and, if requested by Williams, shall release all or a portion of the
         Initial Shares (A) first, to the Remarketing Agents to permit the sale
         of such amount of the New Series to be settled by delivery of such
         amount of Initial Shares, but only if the New Series Distribution
         Agreement with respect to the offering of the New Series requires a
         firm commitment underwriting and provides that net proceeds equal to
         the Share Trust Amount shall be paid directly to the Indenture Trustee
         on behalf of Williams and the Share Trust for deposit and application
         in accordance with clause (iii) above and (B) second, to Williams, upon
         consummation of the sale of the New Series, all or such portion of the
         Initial Shares not released pursuant to clause (A) above.

                  (b) If Williams fails to consummate a sale of the New Series
in accordance with Section 7(a) that has resulted in net proceeds therefrom in
an amount at least equal to the Share Trust Amount being deposited into the
Share Trust Proceeds Account within 60 days following a Trigger Event, (i) the
Share Trustee hereby agrees for the benefit of the Indenture Trustee to
undertake to offer and sell all or a portion of the Initial Shares held by the
Share Trust through the remarketing procedures set forth herein (a "Remarketing
Event"); (ii) the Remarketing Agents shall notify the Indenture Trustee and the
Issuer of such Remarketing Event; (iii) the Indenture Trustee shall exercise its
rights under this Agreement to cause the Share Trust to sell all or a portion of
the Initial Shares held by the Share Trust through the remarketing procedures
set forth herein; (iv) upon any such remarketing, the Share Trust hereby agrees
to distribute or cause to be distributed the net proceeds thereof up to an
amount equal to the Share Trust Amount to the Indenture Trustee; and (v) the
Indenture Trustee hereby agrees to deposit such net proceeds immediately upon
receipt in the Share Trust Proceeds Account and to apply such net proceeds
received by it to the redemption of the Senior Notes in accordance with the
Indenture (which redemption may be on the Maturity Date unless the relevant
Transaction Documents require or permit otherwise).

                  (c) Prior to the occurrence of a Trigger Event, Williams shall
have the right to appoint any one or more Eligible Remarketing Agents to offer
and sell all or a portion of the Initial Shares. The Share Trustee shall be
authorized to release and, if requested by Williams, shall release such amount
of Initial Shares being sold to such Eligible Remarketing Agents against payment
therefor to permit the settlement of such sale by delivery of such amount of
Initial Shares, but only if the underwriting, purchase or similar distribution
agreement with respect to the offering of such Initial Shares requires a firm
commitment underwriting and provides that net proceeds equal to the Share Trust
Amount shall be paid directly to the Indenture Trustee on behalf of the Share
Trust; and the Indenture Trustee hereby agrees to deposit such net proceeds
immediately upon receipt in the Share Trust Proceeds Account and to apply such
net proceeds to the repayment or redemption of the Senior Notes in accordance
with the Indenture (which repayment or redemption may be on the Maturity Date
unless the relevant Transaction Documents require or permit otherwise).

                  (d) Williams shall have the right, during the periods
described below, to satisfy its obligations, in whole or in part, with respect
to the registration and sale of the New Series or the Shares pursuant to this
Agreement in connection with the Indenture Trustee's right to exercise the Share
Trust Remedy (the "Share Trust Release Option") by delivering cash from
Permitted Redemption Sources which, together with any amounts on deposit with
the Indenture Trustee, is sufficient to repay or redeem the Senior Notes, in
whole or in part (as specified further below) on the applicable Mandatory
Redemption Date to the Indenture

                                      -20-
<PAGE>   23

Trustee together with a certificate of Williams certifying that the amount of
such funds constitutes Permitted Redemption Sources or that the Share Trust
Amount (not including such funds) is equal to zero.

                  (i) If (x) no Trigger Event has occurred, Williams may
         exercise the Share Trust Release Option no earlier than 150 days prior
         to the Maturity Date, or (y) a Trigger Event has occurred, Williams may
         exercise the Share Trust Release Option at any time following the
         occurrence of such Trigger Event until the Standstill Expiration Date
         with respect to the Share Trust Remedy following such Trigger Event.

                  (ii) In the event that Williams exercises the Share Trust
         Release Option prior to the occurrence of the Maturity Trigger when no
         Trigger Event shall have occurred, then (A) the amount of cash
         delivered by Williams must be equal to the Share Trust Amount assuming
         a Mandatory Redemption in connection with a Maturity Trigger on the
         Maturity Date, (B) the Indenture Trustee shall (x) deposit such funds
         in the Share Trust Proceeds Account, (y) invest such funds in Financial
         Investments maturing no later than the Maturity Date and (z) withdraw
         such funds on the Maturity Date to repay the Senior Notes in accordance
         with Section 5.05(c) of the Indenture, and (C) Williams must provide to
         the Indenture Trustee an unconditional undertaking to deposit
         additional funds with the Indenture Trustee if the total amount
         invested in such eligible Financial Investments is insufficient to
         cover the required payments on the Senior Notes at any time (including
         upon a Mandatory Redemption if a Trigger Event should subsequently
         occur). Following an exercise of the Share Trust Release Option in
         accordance with this Section 7(d)(ii), the obligations of Williams with
         respect to the registration and sale of the New Series or the Shares
         hereunder shall be deemed satisfied so long as the Share Trust Amount
         remains zero.

                  (iii) In the event that Williams exercises the Share Trust
         Release Option following the occurrence of a Trigger Event, then (A)
         the Indenture Trustee shall (x) deposit such funds in the Share Trust
         Proceeds Account and (y) apply such funds to a Mandatory Redemption of
         all or such portion of the Senior Notes as may be redeemed at the
         applicable Mandatory Redemption Price (as defined in the Indenture) in
         accordance with Section 15.01(d) of the Indenture, and (B) if the Share
         Trust Release Option is exercised otherwise than as result of the
         occurrence of the Acceleration Trigger or the Stock Price/Credit
         Downgrade Trigger, Williams must provide to the Indenture Trustee an
         unconditional undertaking to deposit additional funds with the
         Indenture Trustee if the total amount invested in eligible Financial
         Investments in accordance with the Indenture is insufficient to cover
         the required payments on the Senior Notes at any time (including upon a
         Mandatory Redemption (as defined in the Indenture) if another Trigger
         Event should subsequently occur). Following an exercise of the Share
         Trust Release Option in accordance with this Section 7(d)(iii) and the
         partial or full redemption of the Senior Notes in accordance with the
         Indenture, the obligations of Williams with respect to the registration
         and sale of the New Series or the Shares hereunder shall be reduced in
         proportion to, and deemed satisfied to the extent of, the principal
         amount of Senior Notes that have been so redeemed.

                                      -21-
<PAGE>   24

                  SECTION 8. Remarketing Procedures; Additional Shares.

                  (a) Upon a Remarketing Event, the Share Trustee or the
Indenture Trustee, as the case may be, shall deliver to the Offerors and each of
the Remarketing Agents a written notice to commence the process of remarketing
the Initial Shares (and, to the extent required pursuant to Section 8(f), the
Additional Shares). The following remarketing procedures shall apply in each
case to the Shares then available for marketing and shall be subject to the
right of the Remarketing Agents under Section 12 to declare in good faith a
Failed Remarketing, with the consequences set forth in said Section 12 and
Section 8(g).

                  (b) If the Conditions Precedent to a public offering of the
Shares have been met pursuant to Section 12, the Remarketing Agents shall be
obligated to commence such public offering in accordance with the following
remarketing procedures. If a Failed Registration has occurred, then any actions
undertaken with respect to a public offering of the Shares shall cease, and the
Remarketing Agents shall be obligated to commence a private placement of the
Shares in accordance with the following remarketing procedures; provided that
(x) no actions shall be undertaken by the Remarketing Agents with respect to
such private placement until the earliest date upon which Milbank, Tweed, Hadley
& McCloy LLP or other national or international securities counsel selected by
the Remarketing Agents and approved by Williams advises, in writing, that a
private placement of the Shares may be commenced in compliance with applicable
securities law and (y) the Share Trustee and the Remarketing Agents shall cause
such private placement to be consummated as and upon the terms directed by the
Indenture Trustee.

                  (c) In determining the Remarketed Price for the Shares, the
Remarketing Agents will, after taking into account market conditions as
reflected in the prevailing yields on mandatorily convertible preferred stock
and/or common stock of other comparable issuers:

                  (i) consider, among other things, (A) short-term and long-term
         market rates and indices of such short-term and long-term rates, (B)
         market supply and demand for short-term and long-term securities, (C)
         yield curves for short-term and long-term securities comparable to the
         Shares (considering the terms applicable thereto on and after the Reset
         Date), (D) industry and financial conditions that may affect the
         Shares, including without limitation the condition (financial or
         otherwise), results of operations, business affairs, management and
         prospects of Williams as described in the Remarketing Documents
         (including any Filed Documents incorporated by reference therein), as
         applicable, relating to the offering of Shares, (E) the number of
         Shares to be remarketed, (F) the number of potential purchasers, (G)
         the current ratings by nationally recognized statistical rating
         organizations of long-term subordinated debt and preferred securities
         of Williams, (H) the market price of the Williams Common Stock, (I) the
         discount appropriate for a private placement of the Shares, if
         applicable, and (J) the terms and Pricing of the New Series and the
         market reactions to the marketing of the New Series, if applicable
         (collectively, the "Remarketing Conditions"); and

                  (ii) contact, by telephone or otherwise, prospective
         purchasers and ascertain the prices at which they would be willing to
         hold or purchase such Shares.

                                      -22-
<PAGE>   25

                  (d) On or prior to the Initial Repricing Date, the Indenture
Trustee, upon the written request of the Remarketing Agents, shall deliver to
the Remarketing Agents and Williams an Officer's Certificate setting forth the
amounts available in the Share Trust Proceeds Account, the Indenture Interest
Account and, to the extent applicable, the Pledged Share Trust Reserve Account,
to be used in determining the Share Trust Amount, and shall undertake to notify
the Remarketing Agents and Williams if any such amount should change prior to
the Reset Date.

                  (e) By approximately 1:00 p.m., New York City time, on the
Initial Repricing Date, the Remarketing Agents will notify Williams, the Share
Trustee, the Issuer and the Indenture Trustee by telephone, confirmed in
writing, of (i) whether the Remarketing Agents were able to establish a
Remarketed Price and (ii) if so, the Remarketed Price, the Reset Date and the
number of Shares to be remarketed. If, on such Initial Repricing Date or any
succeeding Repricing Date, a Failed Repricing has occurred but there has not
occurred a Failed Remarketing, then the Remarketing Agents will continue to seek
to establish a Remarketed Price on the next succeeding Repricing Date (subject
to Section 12). Williams, the Share Trust and the Remarketing Agents shall enter
into the Distribution Agreement upon a Successful Repricing Date.

                  (f) Upon a Partial Remarketing of the Initial Shares, Williams
shall issue to the Share Trust Additional Shares in accordance with Section 3(h)
(subject to payment by the Share Trust of cash in an amount at least equal to
the aggregate par value thereof as provided in the Share Trust Agreement) in an
amount which, when remarketed by the Remarketing Agents pursuant to this
Agreement, shall be sufficient to generate net proceeds that, together with the
net proceeds of such Partial Remarketing, are in an amount reasonably expected
to be at least equal to the Share Trust Amount. The Remarketing Agents shall use
their commercially reasonable efforts to remarket Additional Shares (in
accordance with the remarketing procedures set forth herein) as soon as
practicable upon such terms as will result in the generation of such net
proceeds or the largest portion thereof as shall be practicable (including, at
Williams' discretion, by inclusion in any Shelf Registration Statement any
number of Additional Shares that the Remarketing Agents believe in their good
faith judgment and in light of then prevailing market conditions after
consultation with Williams (and that are permitted to be included pursuant to
the rules of the SEC) may be necessary to assure that a sufficient number of
Shares is available to cause the proceeds of the sale of such Shares pursuant to
such Shelf Registration Statement to at least equal the Share Trust Amount).

                  (g) In the event of a Failed Remarketing, the Remarketing
Agents shall promptly notify Williams, the Share Trustee, the Issuer and the
Indenture Trustee of such Failed Remarketing. The Remarketing Agents may consult
with counsel in making such determination and may conclusively rely on the
advice or opinion of any such counsel with respect thereto. In the event of a
Failed Remarketing, (i) Williams shall immediately pay to the Indenture Trustee
for deposit in the Share Trust Proceeds Account an amount equal to the Share
Trust Amount (without duplication of the net proceeds of any sale of the New
Series or remarketing of Shares used to pay any portion of the Senior Notes and
any other amounts due and owing to the Noteholders under the Indenture) and (ii)
until Williams has complied with clause (i) above, the Remarketing Agents shall,
upon the direction of the Indenture Trustee, continue to seek a Pricing of the
Shares at the Remarketed Price and consummate the sale of such Shares as soon as

                                      -23-
<PAGE>   26

practicable in accordance with such direction. In addition, upon a Failed
Remarketing, the obligation of Williams to make payment as provided above is
absolute and unconditional, irrespective of whether the Remarketing Agents shall
continue to seek a Pricing of the Shares at the Remarketed Price. Any amount
that Williams is obligated to pay under this Section 8(g) shall be paid without
set-off, deduction or counterclaim.

                  (h) On the date of the consummation of any sale of Shares, the
Remarketing Agents will make payment (or arrange for payment to be made in
accordance with the Distribution Agreement) of the purchase price for such
Shares that have been sold in the remarketing to the Indenture Trustee, on
behalf of the Share Trust, by the close of business on such date, against
delivery through DTC or otherwise of such Shares. The Indenture Trustee hereby
agrees to deposit such purchase price immediately upon receipt in the Share
Trust Proceeds Account and to apply such purchase price to the redemption of the
Senior Notes in accordance with the Indenture.

                  (i) In the event of a private placement of the Shares, the
offer and sale of the Shares shall be done in a manner that will not require
approval by the shareholders of Williams pursuant to the provisions of Rule 312
of the rules published in the New York Stock Exchange Listed Company Manual or
any successor rule or other requirement of the New York Stock Exchange, if
applicable at the time of such private placement.

                  SECTION 9. Fees and Expenses.

                  (a) For their services in performing their duties set forth
hereunder with respect to remarketing the Shares, on the Reset Date, the
Remarketing Agents will receive from Williams a commission of 3.0% of the gross
sales proceeds of Shares actually remarketed and sold, payable by wire transfer
in same day funds.

                  (b) In addition to its obligation under Section 9(a) and in
addition to its obligations under Section 13, Williams shall, from time to time
upon the request of the Remarketing Agents, pay the reasonable fees and expenses
of counsel incurred by the Remarketing Agents after a Trigger Event in
connection with the performance of their duties hereunder. The obligations of
Williams to make the payments required by this Section 9 shall survive the
termination of this Agreement or the termination of the obligations of the
Remarketing Agents hereunder and remain in full force and effect until all such
payments shall have been made in full.

                  (c) Without limiting the effect of the foregoing, Williams
shall pay all Registration Expenses in connection with the registration pursuant
to Section 3 and will reimburse the Remarketing Agents for the reasonable fees
and disbursements of its counsel incurred in connection with a Shelf
Registration Statement hereunder.

                  SECTION 10. Resignation and Removal of the Remarketing Agents;
Additional Agents.

                  (a) Each Remarketing Agent may resign and be discharged from
its duties and obligations hereunder at any time, such resignation to be
effective 30 days after delivery of notice to Williams, the Share Trustee, the
Issuer and the Indenture Trustee of such resignation,

                                      -24-
<PAGE>   27

subject to the provisions of this Section 10 (and, with respect to the New
Series, subject to Section 7(a)(ii)). Williams may remove any Remarketing Agent
for cause at any time, such removal to be effective 30 days after delivery of
notice of such removal to the Share Trustee, the Issuer, the Indenture Trustee
and the Remarketing Agents, subject to the provisions of this Section 10 (and,
with respect to the New Series, subject to Section 7(a)(ii)). In each such case
(other than a discharge with respect to the New Series pursuant to Section
7(a)(ii)), Williams will use its reasonable best efforts to appoint a successor
Remarketing Agent from among the Eligible Remarketing Agents and to cause such
successor Remarketing Agent to enter into this Agreement by executing a
supplement hereto as soon as reasonably practicable. It shall be the sole
obligation of Williams to appoint a successor Remarketing Agent, but the
resigning or removed Remarketing Agent will reasonably cooperate in handing over
the responsibilities of Remarketing Agent to such successor. For purposes of
this Section 10(a), "cause" means that a voluntary or involuntary proceeding
under any bankruptcy or insolvency law seeking liquidation, reorganization or
other relief with respect to such Remarketing Agent has been commenced and such
proceeding has not been terminated within 60 days after commencement.

                  (b) The Indenture Trustee may replace any Remarketing Agent
for cause upon the written direction of the Required Holders, with the successor
Remarketing Agent to be an Eligible Remarketing Agent. For purposes of this
Section 10(b), "cause" means the failure of such Remarketing Agent to comply
with its obligations under clauses (ii) and (iii) of Section 2(b) following the
Remarketing Notification Date.

                  (c) Following any notice of removal or resignation of any
Remarketing Agent, Williams or the Indenture Trustee, as the case may be, shall
endeavor to cause an Eligible Remarketing Agent to be appointed as a replacement
by executing a supplement hereto within 60 days of the delivery of such notice
and shall notify the existing Remarketing Agent(s) of such appointment as
promptly as practicable.

                  (d) No resignation or removal of any Remarketing Agent
pursuant to this Section 10 shall become effective until Williams or the
Indenture Trustee, as the case may be, shall have appointed an Eligible
Remarketing Agent as successor Remarketing Agent and such successor Remarketing
Agent shall have become a party to this Agreement or entered into a new
remarketing agreement substantially in the form of this Agreement in which it
has agreed to conduct the remarketing in accordance with the terms and
conditions described herein.

                  (e) Williams shall have the right to designate which
Remarketing Agents shall act as co-managers, together with the Initial
Remarketing Agent, with respect to the Shares. The Remarketing Agents may, at
their discretion and expense, make arrangements to be assisted by any
co-marketing agent or any broker-dealer or underwriting firm in connection with
the remarketing of the Shares (and, if appropriate, to have such Persons become
parties to the Distribution Agreement), in each case with the consent of
Williams, which consent shall not be unreasonably withheld or delayed, with such
compensation therefor, if any, as may be agreed between the Remarketing Agents
and such Person, after consultation with Williams (which compensation shall be
included within, and not in addition to, the commission referred to Section
9(a)). In addition, if so requested by Williams or the Indenture Trustee, one or
more additional Remarketing Agents may be appointed hereunder and may be made
parties to the Distribution Agreement with each Remarketing Agent to be given
responsibility for remarketing a specified

                                      -25-
<PAGE>   28

amount of Shares as such Remarketing Agents may decide in consultation with
Williams and the Indenture Trustee (or failing agreement between such
Remarketing Agents, by Williams or the Indenture Trustee), in which case all
references herein shall be deemed to apply, mutatis mutandis, to all Remarketing
Agents severally but not jointly, and in such case the compensation to be paid
by Williams to the Remarketing Agents hereunder shall be split among all such
Remarketing Agents in the manner agreed to by such Remarketing Agents, with the
consent of Williams (such consent not to be unreasonably withheld or delayed).

                  (f) If so requested by Williams, one or more Eligible
Remarketing Agents (including the lead underwriters if Williams elects not to
have one or more of the Remarketing Agents as the lead underwriters) may be
appointed hereunder solely for the purpose of recommending the terms of and
marketing the New Series in conjunction with the Remarketing Agents originally
appointed hereunder and shall be made parties to the New Series Distribution
Agreement, with each Remarketing Agent to be given responsibility for marketing
a specified amount of the New Series as the Remarketing Agents may decide in
consultation with Williams (or, failing agreement between such Remarketing
Agents, by Williams), in which case all references herein shall be deemed to
apply, mutatis mutandis, to all Remarketing Agents severally but not jointly (to
the extent applicable).

                  (g) Notwithstanding the foregoing provisions of this Section
10, if, prior to the occurrence of a Trigger Event, Williams has appointed any
Eligible Remarketing Agent (other than the Initial Remarketing Agent or any
successor Remarketing Agents appointed pursuant to Section 10(d)) to sell any
Williams equity securities (including pursuant to Sections 7(a)(ii) and 7(c))
and subsequently a Trigger Event occurs before the consummation or abandonment
of such sale, (i) Williams shall cause each such Eligible Remarketing Agent to
become a Remarketing Agent with respect to the Initial Shares and the Additional
Shares pursuant to the terms of this Agreement by executing a supplement hereto
within ten Business Days following the occurrence of such Trigger Event and to
enter into the Distribution Agreement required pursuant hereto, upon which the
Initial Remarketing Agent may resign and be discharged in accordance with the
provisions of Section 10(d), and (ii) if Williams fails (although it is not
responsible for the failure of such Eligible Remarketing Agent to comply with
the preceding clause (i)) to comply with the preceding clause (i), such failure
shall result in a Legal Impossibility.

                  SECTION 11. Dealing in Williams Securities. Each Remarketing
Agent, when acting as a Remarketing Agent or in its individual or any other
capacity, may, to the extent permitted by Applicable Law, buy, sell, hold and
deal in any of the New Series, the Williams Preferred Stock or the Williams
Common Stock. Notwithstanding the foregoing, each Remarketing Agent is not
obligated to purchase any Shares that would otherwise remain unsold in a
remarketing unless required pursuant to a Distribution Agreement or New Series
Distribution Agreement. To the extent permitted by Applicable Law, each
Remarketing Agent, as a holder of any of the New Series, the Williams Preferred
Stock or the Williams Common Stock, may exercise any vote or join as a holder in
any action which any holder of such securities may be entitled to exercise or
take pursuant to the terms thereof with like effect as if it did not act in any
capacity hereunder. To the extent permitted by Applicable Law, each Remarketing
Agent, in its capacity either as principal or agent, may also engage in or have
an interest in any financial or other transaction with Williams as freely as if
it did not act in any capacity hereunder to the extent permitted by Applicable
Law.

                                      -26-
<PAGE>   29

                  SECTION 12. Conditions to Remarketing Agents' Obligations. The
obligations of the Remarketing Agents under this Agreement have been undertaken
in reliance on, and shall be subject to, compliance with the conditions
precedent set forth in the following paragraphs (a) through (d) (the "Conditions
Precedent") on or prior to the indicated dates (with respect to the Shares then
available for marketing).

                  (a) On the Initial Repricing Date and upon each successive
Repricing Date:

                  (i) Williams and the Share Trust shall have complied in all
         material respects with their respective obligations and agreements as
         set forth in this Agreement; and

                  (ii) with respect to a public offering of the Shares, Williams
         and the Share Trust shall have filed a Registration Statement covering
         the Shares (and, to the extent applicable, the Williams Common Stock
         into which such Shares represented thereby are convertible) and the
         remarketing thereof, which Registration Statement shall have been
         declared effective by the SEC, and no stop order suspending the
         effectiveness thereof shall have been issued and not withdrawn or
         revoked under the Securities Act and no proceedings therefor shall have
         been initiated or threatened by the SEC.

If the Remarketing Agents shall reasonably determine in their sole discretion
that the Conditions Precedent set forth in this paragraph (a) are not fulfilled,
the Remarketing Agents shall declare a Failed Repricing with regard to such
Repricing Date and shall not be obligated to remarket the Shares until the next
succeeding Repricing Date in accordance with the provisions of Section 8(e);
provided that, if such a Failed Repricing has occurred and continues for a
period of five Trading Days thereafter, then the Remarketing Agents shall
declare a Failed Registration with regard to such Repricing Date and shall not
be obligated to remarket the Shares until such time as either the Conditions
Precedent are satisfied or a private placement of such shares may be commenced
in accordance with the provisions of Section 8(b).

                  (b) On any Repricing Date on which the Remarketing Agents have
established a Remarketed Price:

                  (i) Williams and the Share Trust shall enter into the
         Distribution Agreement;

                  (ii) Williams and the Share Trust shall have complied in all
         material respects with their respective obligations and agreements set
         forth herein and in the Distribution Agreement; and

                  (iii) Williams and the Share Trust shall make the
         representations and warranties contained in Section 5 hereof, and such
         representations and warranties and the representations and warranties
         in the Distribution Agreement shall be true, complete and correct in
         all material respects as if made on such date except as otherwise
         disclosed in the Remarketing Documents.

If the Remarketing Agents shall reasonably determine in their sole discretion
that the Conditions Precedent set forth in this paragraph (b) are not fulfilled,
then the Remarketing Agents shall declare a Failed Repricing with regard to such
Repricing Date and shall not be obligated to remarket the Shares until the next
succeeding Repricing Date in accordance with the provisions

                                      -27-
<PAGE>   30

of Section 8(e); provided that, if such a Failed Repricing has occurred and
continues for a period of five Trading Days thereafter or if Williams
intentionally fails to comply with the Conditions Precedent set forth in this
paragraph (b), then the Remarketing Agents shall declare a Failed Remarketing,
with the consequences set forth in Section 8(g); provided that no such Failed
Remarketing may be declared prior to the time a Remarketing Event could occur
under Section 7(b).

                  (c) Following the execution of any Distribution Agreement, in
addition to the Conditions Precedent set forth in paragraph (b) above, the
conditions precedent set forth in the Distribution Agreement shall have been
fulfilled and the sale of the Shares thereunder shall have been consummated on
the closing date set forth in the Distribution Agreement. If the Remarketing
Agents shall reasonably determine in their sole discretion that the Conditions
Precedent set forth in this paragraph (c) are not fulfilled, then the
Remarketing Agents shall declare a Failed Remarketing, with the consequences set
forth in Section 8(g).

                  (d) (i) Promptly upon request following a Trigger Event,
Williams and the Share Trust shall deliver to the Remarketing Agents such
current or updated Remarketing Documents and other current information and other
materials as the Remarketing Agents shall reasonably request and (ii) at all
times during the Remarketing Period (subject to the last sentence of this
Section 12(d)) and prior to the Successful Repricing Date, none of the following
events shall have occurred:

                           (x)(1) trading in securities generally on the New
                  York Stock Exchange or the American Stock Exchange, or trading
                  in any securities of Williams on any exchange located in the
                  United States or Europe, shall have been suspended or minimum
                  prices shall have been established on any such exchange by the
                  SEC, by such exchange or by any other regulatory body or
                  governmental authority having jurisdiction, (2) a general
                  banking moratorium in New York shall have been declared by
                  Federal or New York state authorities, (3) the United States
                  shall have become engaged in hostilities, there shall have
                  been an escalation in hostilities involving the United States
                  or there shall have been a declaration of a national emergency
                  or war by the United States or (4) there shall have occurred a
                  change in general economic, political or financial conditions
                  (or the effect of international conditions on the financial
                  markets in the United States shall be such) that in the
                  judgment of the Remarketing Agents is material and adverse;
                  and

                           (y) in the case of any of the events specified in
                  clauses (x)(1) through (x)(4) above, such event, singly or
                  together with any other such event, makes it, in the judgment
                  of the Remarketing Agents, impracticable or inadvisable to
                  proceed with the offering or delivery of the Shares being
                  delivered on the applicable Reset Date on the terms and in the
                  manner contemplated in the Remarketing Documents.

If on any Repricing Date the Remarketing Agents shall reasonably determine in
their sole discretion that the Conditions Precedent set forth in this paragraph
(d) are not fulfilled, then the Remarketing Agents shall declare a Failed
Repricing with regard to such Repricing Date and shall not be obligated to
remarket the Shares until the next succeeding Repricing Date in accordance with
the provisions of Section 8(e); provided that, if all Conditions Precedent other

                                      -28-
<PAGE>   31

than those set forth in this paragraph (d) are met by the fifth Repricing Date
after the Initial Repricing Date, the Conditions Precedent set forth in this
paragraph (d) shall no longer be applicable and shall not prevent the
establishment of a Remarketed Price.

                  (e) The Remarketing Agents may consult with counsel in making
any determination which may be made by them pursuant to this Section 12 and may
conclusively rely on the advice or opinion of any such counsel with respect
thereto.

                  SECTION 13. Indemnification.

                  (a) Each of the Share Trust and Williams jointly and severally
shall indemnify and hold harmless each Remarketing Agent, its officers and
employees and each person, if any, who controls any Remarketing Agent within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which that
Remarketing Agent, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) all remarketing
activity undertaken by the Remarketing Agents or any of their respective
officers, employees and agents in respect of the Shares, and any other action
taken by the Remarketing Agents or any of their respective officers, employees
and agents in furtherance of this Agreement, (ii) any untrue statement or
alleged untrue statement of a material fact contained in (A) any Remarketing
Document or in any Filed Document or in any amendment or supplement thereto or
(B) in any materials or information provided to investors by, or with the
approval of, the Offerors in connection with the marketing of the offering of
the Shares ("Marketing Materials"), including any roadshow or investor
presentations made to investors by the Offerors (whether in person or
electronically) or (iii) the omission or alleged omission to state in any
Remarketing Document or in any Filed Document, or in any amendment or supplement
thereto, or in any Marketing Materials, any material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse each Remarketing Agent and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by that Remarketing Agent, officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Offerors shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, (x) the gross negligence or willful misconduct of such Remarketing
Agent in connection with clause (i) above or (y) any untrue statement or alleged
untrue statement or omission or alleged omission made in any Remarketing
Document or in any Filed Document, or in any such amendment or supplement, in
reliance upon and in conformity with written information concerning such
Remarketing Agent furnished to the Offerors by or on behalf of any Remarketing
Agent specifically for inclusion therein; and, provided further, that the
Offerors will not be liable to any Remarketing Agent with respect to any
preliminary Remarketing Document to the extent the Offerors shall sustain the
burden of proving that any such loss, claim, damage or liability resulted from
the fact that such Remarketing Agent, in contravention of a requirement of
applicable law, remarketed Shares to a person to whom such Remarketing Agent
failed to send or give, at or prior to the settlement date for such sale of
Shares, a copy of a final Remarketing Document, as then amended or supplemented,
if: (i) the Offerors have previously furnished copies thereof (in sufficient
quantity and sufficiently in advance of such settlement date to allow

                                      -29-
<PAGE>   32

for distribution by such settlement date) to such Remarketing Agent and the
loss, claim, damage or liability of such Remarketing Agent resulted from an
untrue statement or omission of a material fact contained in or omitted from the
preliminary Remarketing Document which was corrected in a final Remarketing
Document as, if applicable, amended or supplemented prior to such settlement
date and such final Remarketing Document was required by law to be delivered at
or prior to the written confirmation of sale to such person and (ii) such
failure to give or send such final Remarketing Document by such settlement date
to the party or parties asserting such loss, claim, damage or liability would
have constituted the sole defense to the claim asserted by such person. The
foregoing indemnity agreement is in addition to any liability which the Offerors
may otherwise have to any Remarketing Agent or to any officer, employee or
controlling person of that Remarketing Agent.

                  (b) Each Remarketing Agent, severally and not jointly, shall
indemnify and hold harmless the Share Trust, the Share Trustee, Williams, its
officers and employees, each of its directors, and each person, if any, who
controls Williams within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Share Trust, the Share Trustee, Williams or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Remarketing Document or in any
Filed Document or in any amendment or supplement thereto, or (ii) the omission
or alleged omission to state in any Remarketing Document or in any Filed
Document, or in any amendment or supplement thereto, any material fact required
to be stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Remarketing Agent furnished
to the Offerors by or on behalf of that Remarketing Agent specifically for
inclusion therein, and shall reimburse the Share Trust, the Share Trustee,
Williams and any such director, officer or controlling person for any legal or
other expenses reasonably incurred by the Share Trust, the Share Trustee,
Williams or any such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Remarketing Agent
may otherwise have to the Share Trust, the Share Trustee, Williams or any such
director, officer, employee or controlling person.

                  (c) Promptly after receipt by an indemnified party under this
Section 13 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 13, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 13 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 13.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying

                                      -30-
<PAGE>   33

party, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 13 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that the Remarketing Agents or any
controlling Person shall have the right to employ counsel to represent jointly
the Remarketing Agents and their respective officers, employees and controlling
Persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Remarketing Agents against Williams or the
Share Trust under this Section 13 if (i) the employment of such counsel has been
expressly authorized in writing by Williams; (ii) Williams has not assumed the
defense of and employed counsel reasonably satisfactory to the indemnified party
within a reasonable time after notice of the commencement of such action or
(iii) the named parties to any such action or proceeding (including impleaded
parties) include both the Remarketing Agents or such controlling Person and the
Share Trust or Williams and the Remarketing Agents or such controlling party
shall have been advised in writing by counsel that there may be one or more
legal defenses available to such indemnified party, which are different from or
additional to those available to the Share Trust or Williams, and such counsel's
representation of the Remarketing Agents or such controlling Person and the
Share Trust or Williams in such action or proceeding would give rise to a
conflict of interest which would make it improper for such counsel to represent
both the Remarketing Agents or such controlling Person and the Share Trust or
Williams (in which case Williams shall not have the right to assume the defense
of such action or proceeding on behalf of such indemnified party). Williams
shall not, in connection with any one such action or proceeding, or separate but
substantially similar or related actions or proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm for the Remarketing
Agents and controlling Persons (in addition to any local counsel), which firm
will be designated by Credit Suisse First Boston Corporation, and Williams shall
reimburse all such reasonable fees and expenses as they are billed. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if there
be a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.

                  (d) If the indemnification provided for in this Section 13
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 13(a) or 13(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss,

                                      -31-
<PAGE>   34

claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Share
Trust and Williams on the one hand and the Remarketing Agents on the other from
the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Share Trust and Williams on the one hand and the
Remarketing Agents on the other with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Share Trust and Williams on the one hand and the
Remarketing Agents on the other from the offering of the Shares (if a
remarketing of the Shares hereunder has occurred) shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Shares
(before deducting expenses) received by the Share Trust, on the one hand, and
the total compensation received by the Remarketing Agents under Section 9(a)
hereof. The relative fault shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Offerors or the Remarketing Agents, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Share Trust, Williams and the Remarketing Agents
agree that it would not be just and equitable if contributions pursuant to this
Section 13 were to be determined by pro rata allocation (even if the Remarketing
Agents were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section shall be deemed to include, for purposes of
this Section 13(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 13(d), no Remarketing
Agent shall be required to contribute any amount in excess of the amount by
which the total sales proceeds of the Shares remarketed by it exceeds the amount
of any damages which such Remarketing Agent has otherwise paid or become liable
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11 (f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Remarketing Agents' obligations to contribute as provided
in this Section 13(d) are several in proportion to the respective number of
Shares remarketed by each Remarketing Agent and not joint.

                  (e) The indemnity and contribution agreements contained in
this Section 13 and the representations and warranties of the Share Trust and
Williams set forth in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of the
Remarketing Agents or any Person controlling the Remarketing Agents, the Share
Trust, the Share Trustee, Williams, its directors or officers, or any Person
controlling Williams, (ii) acceptance of any Shares and payment therefor
hereunder and (iii) any termination of this Agreement. A successor to any
Remarketing Agent or any Person controlling the Remarketing Agents, or to the
Share Trust, the Share Trustee, Williams, its directors or officers, or any
Person controlling Williams, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreement contains in this Section 13.

                                      -32-
<PAGE>   35

                  (f) The remedies provided for in this Section 13 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.

                  SECTION 14. Termination of Obligations of Remarketing Agents.
The obligations of each Remarketing Agent shall terminate upon the removal or
resignation of such Remarketing Agent and the appointment of a successor
Remarketing Agent in accordance with the provisions of Sections 10 and 7(a)(ii);
provided that, in any such case, the rights of such Remarketing Agent under
Sections 9 and 13 with regard to remarketing activity already carried out in
accordance with the terms of this Agreement shall continue and remain in full
force and effect.

                  SECTION 15. Remarketing Agents' Performance; Duty of Care;
Liability.

                  (a) The duties and obligations of each Remarketing Agent shall
be determined solely by the express provisions of this Agreement. No implied
covenants or obligations of or against the Remarketing Agents shall be read into
this Agreement. In the absence of bad faith on the part of the Remarketing
Agents, the Remarketing Agents may conclusively rely upon any document furnished
to them, which purports to conform to the requirements of this Agreement, as to
the truth of the statements expressed in any of such documents. The Remarketing
Agents shall be protected in acting upon any document or communication
reasonably believed by it to have been signed, presented or made by the proper
party or parties. Each Remarketing Agent shall incur no liability to any of
Williams, the Share Trust, the Issuer, the Indenture Trustee or the purchasers
of Shares in its individual capacity or as Remarketing Agent for any action or
failure to act in connection with a remarketing or otherwise, except as a result
of gross negligence, willful misconduct or willful breach of this Agreement on
its part.

                  (b) Each Remarketing Agent may consult with counsel,
accountants and other skilled Persons to be selected and employed by it, and it
shall not be liable for anything done, suffered or omitted in good faith by it
in accordance with the advice or opinion of any such counsel, accountants or
other skilled Persons. Each Remarketing Agent shall not be required to take any
action under this Agreement if such Remarketing Agent shall reasonably determine
or shall have been advised by counsel that such action is contrary to the terms
of this Agreement or is otherwise contrary to Applicable Law. Each Remarketing
Agent shall incur no liability if, by reason of any provision of any future
Applicable Law, such Remarketing Agent shall be prevented or forbidden from
doing or performing any act or thing which the terms of this Agreement provide
shall or may be done or performed by it.

                  (c) Except as otherwise provided in Section 13, each
Remarketing Agent shall be under no obligation to appear in, prosecute or defend
any action or take, suffer or omit from taking any action under this Agreement
which in its opinion may require it to incur any out-of-pocket expense or any
liability, unless it shall be furnished with security and indemnity reasonably
satisfactory to it against such expense or liability as it may require, and any
reasonable out-of-pocket cost of such Remarketing Agent as a result of such
actions shall be paid by Williams.

                                      -33-
<PAGE>   36

                  (d) The parties hereto acknowledge that any sale of the Shares
pursuant to this Agreement and the Distribution Agreement may be at prices and
on terms less favorable to Williams than those obtainable in a public or private
offering by Williams under different circumstances. Subject to Sections 2(b)(ii)
and 2(b)(iii), the Remarketing Agents shall incur no liability as a result of
the sale of the Shares, including any Partial Remarketing, made in accordance
with this Agreement and the Distribution Agreement. Williams, the Share Trust,
the Issuer and the Indenture Trustee each hereby waives any claims against the
Remarketing Agents arising by reason of the fact that the price at which any
Shares may have been sold was less than the price that might have been obtained
at a sale thereof by Williams, the Share Trust, the Issuer, the Indenture
Trustee or any third party in different circumstances or was less than the Share
Trust Amount, even if the Remarketing Agents accept the first offer received and
do not offer the Shares to more than one offeree.

                  SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                  SECTION 17. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof, this Agreement shall remain in full force
and effect until one year and one day after the earliest to occur of the
following events: (i) the Shares shall have been successfully remarketed on the
Reset Date, provided that a Partial Remarketing has not occurred, (ii) Williams
shall have delivered an amount equal to the Share Trust Amount to the Indenture
Trustee in accordance with Section 8(g) or (iii) the Share Trust Amount shall be
zero; provided, that the obligations of the parties hereto shall continue to be
effective or shall be automatically reinstated, as the case may be, if and to
the extent that any payment by or on behalf of the Issuers in respect of the
Senior Notes is rescinded or must be otherwise restored by any Noteholder, not
later than one year and one day after the payment in full of the Senior Notes,
as a result of any proceedings in bankruptcy or reorganization relating to the
Issuers, WCL or WCG. Regardless of any termination of this Agreement pursuant to
any of the provisions hereof, (x) the obligations of Williams pursuant to
Sections 9 and 13 with regard to remarketing activity already carried out in
accordance with the terms of this Agreement shall continue and remain in full
force and effect and (y) the obligations of the Issuer pursuant to Section 27
shall continue and remain in full force and effect until the Reimbursement
Obligations shall have been paid in full. After the payment or redemption in
full of the Senior Notes, any proceeds with respect to the sale of the Shares
received by the Remarketing Agents (net of any amounts due and payable by
Williams pursuant to Sections 9 and 13) shall be paid promptly to Williams.

                  SECTION 18. Successors and Assigns. The rights and obligations
of Williams hereunder may not be assigned or delegated to any other Person
without the prior written consent of the Remarketing Agents. The rights and
obligations of the Remarketing Agents hereunder may not be assigned or delegated
to any other Person without the prior written consent of Williams, the Share
Trustee and the Indenture Trustee. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns and will not confer any benefit upon any other Person other
than Persons, if any, which are entitled to indemnity or contribution to the
extent provided in Section 13. The terms "successors" and "assigns" shall not
include any purchaser of any Shares merely because of such purchase.

                                      -34-
<PAGE>   37

                  SECTION 19. Headings. Section headings have been inserted in
this Agreement as a matter of convenience of reference only, and it is agreed
that such section headings are not a part of this Agreement and will not be used
in the interpretation of any provisions of this Agreement.

                  SECTION 20. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provision of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstance or jurisdiction or of rendering
any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatsoever.

                  SECTION 21. Remarketing Agents Not Acting as Underwriter.

                  (a) It is expressly understood and agreed by all parties
hereto that each Remarketing Agent's only obligations hereunder are as set forth
in Sections 2(b), 6(h), 6 (last paragraph), 7(a)(ii), 7(b)(ii), 8, 10, 12, 13
and 15 of this Agreement. When engaged in remarketing any Shares, each
Remarketing Agent shall act only as agent for and on behalf of the Share Trust.
Each Remarketing Agent shall not act as underwriter for the Shares (except if
and to the extent otherwise agreed in the Distribution Agreement or the New
Series Distribution Agreement) and shall in no way be obligated to advance or
use its own funds to purchase any Shares (except for those Shares it shall, in
its sole discretion, elect to purchase in its individual capacity in accordance
with Section 11 or to the extent otherwise agreed in the Distribution Agreement
or the New Series Distribution Agreement) or to otherwise expend or risk its own
funds or incur or become exposed to financial liability in the performance of
its duties hereunder.

                  (b) It is expressly understood and agreed by all parties
hereto that the obligation of the Remarketing Agents with respect to the New
Series are limited to those set forth in Sections 2(b)(i) and 7(a) and those
expressly set forth in the New Series Distribution Agreement. Each Remarketing
Agent shall not act as underwriter for the New Series (except if and to the
extent otherwise agreed in the New Series Distribution Agreement) and shall in
no way be obligated to advance or use its own funds to purchase any shares of
the New Series (except for those Shares it shall, in its sole discretion, elect
to purchase in its individual capacity in accordance with Section 11 or to the
extent otherwise agreed in the Distribution Agreement or the New Series
Distribution Agreement) or to otherwise expend or risk its own funds or incur or
become exposed to financial liability in the performance of its duties
hereunder.

                  (c) It is expressly understood and agreed by all parties
hereto that the obligation of the Remarketing Agents to remarket the Shares or
market the New Series is undertaken on a "best-efforts" basis only (except if
and to the extent otherwise agreed in the Distribution Agreement or the New
Series Distribution Agreement, respectively), and the Remarketing Agents shall
incur no liability to any Person in connection with a failure to remarket the
Shares or market the New Series in accordance with the provisions of this
Agreement.

                  SECTION 22. Amendments. This Agreement may be amended by any
instrument in writing signed by all of the parties hereto so long as this
Agreement as amended is

                                      -35-
<PAGE>   38

not inconsistent with the Share Trust Agreement or the Participation Agreement
or Section 7.01(s) and Article XII of the Indenture in effect as of the date of
any such amendment.

                  SECTION 23. 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, (ii) one Business Day after being sent by a private
nationally or internationally recognized overnight courier service or (iii) when
sent 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 Issuer, the Share Trust (or the Share
                  Trustee) or the Indenture Trustee:

                  To the respective addresses set forth for each such Person in
                  Section 7.2 of the Participation Agreement.

                  If to the Initial Remarketing Agent:

                  Credit Suisse First Boston Corporation
                  Eleven Madison Avenue
                  New York, NY 10010
                  Attention:  James Fields
                  Telecopier No.:  (212) 538-0885
                  Telephone No.:  (212) 538-2263

                  A duplicate copy of each notice, approval, consent, request or
other communication given hereunder by each of the parties hereto to any one of
the others shall also be given to all of the others. However, failure to give
notice to any party hereto shall not affect effectiveness of notice to parties
as to whom notice has been given in accordance with the first two sentences of
this Section 23. Each of the parties hereto 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 24. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be regarded as an original, and all of
which shall constitute one and the same document.

                  SECTION 25. Regarding the Indenture Trustee. The Indenture
Trustee shall be afforded all of the rights, powers, immunities and indemnities
set forth in the Indenture as if such rights, powers, immunities and indemnities
were specifically set forth herein.

                  SECTION 26. Limitation of Liability of Wilmington Trust
Company. It is expressly understood and agreed by the parties hereto with
respect to the Issuer and the Share

                                      -36-
<PAGE>   39

Trust (a) this Agreement is executed and delivered by Wilmington Trust Company,
not individually or personally but solely as trustee of the Issuer and the Share
Trust, in the exercise of the powers and authority conferred and vested in it
under the Issuer Trust Agreement and the Share Trust Agreement, (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,
undertaking and agreements by Wilmington Trust Company but is made and intended
for the purpose of binding only the Issuer and the Share Trust and (c) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Issuer and the Share Trust or be
liable for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Issuer or the Share Trust under this
Agreement or the other related documents; provided, however, this Section shall
not limit the liability expressly assumed by Wilmington Trust Company under this
Agreement, the Issuer Trust Agreement or the Share Trust Agreement,
respectively.

                  SECTION 27. Issuer's Reimbursement Obligation.

                  (a) In the event that (i) Williams exercises the Share Trust
Release Option at a time when the Share Trust Amount exceeds zero, (ii) all or
any portion of the Share Trust Amount is paid to the Indenture Trustee as a
result of (x) the sale of the New Series and/or the Shares or (y) a payment by
Williams following a Failed Remarketing or (iii) the Indenture Trustee draws
upon the Share Trust Reserve to make payments in respect of the Senior Notes at
any time in accordance with the Indenture, the Issuer shall reimburse Williams
for the amounts received by the Indenture Trustee pursuant to any of clauses (i)
through (iii) above, together with the reasonable costs and expenses incurred by
Williams in connection with such events (the "Share Trust Reimbursement
Obligations"). The Issuer hereby agrees that such Share Trust Reimbursement
Obligations shall be secured under the Indenture as provided therein. Williams
and the Issuer hereby agree that payment of such Share Trust Reimbursement
Obligations shall be made only after the payment in full of the Senior Notes,
and shall be made by the Indenture Trustee on behalf of the Issuer to Williams
in accordance with the priority set forth in Sections 5.05(c), (d) and (e) of
the Indenture. Williams hereby agrees that upon its receipt of payment in full
of the Reimbursement Obligations, it shall give notice to the Issuer and the
Indenture Trustee that the Reimbursement Obligations have been paid in full and
satisfied.

                  (b) Notwithstanding any other term of this Agreement, any
other Transaction Document or otherwise, the obligations of the Issuer under
this Agreement are senior secured limited recourse obligations of the Issuer,
payable solely from the Security for the Senior Notes, and, following
realization on the Security for the Senior Notes and application of the proceeds
thereof in accordance with the terms of the Indenture, neither Williams nor any
of the other parties to the Transaction Documents shall be entitled to take any
further action to recover any sums due but remaining unpaid hereunder or
thereunder, all claims in respect of which shall be extinguished. In particular,
neither Williams nor any other party to a Transaction Document shall be entitled
to petition or take any other action for the winding up or bankruptcy of either
the Issuer or the Co-Issuer or shall have any claim in respect of any assets of
either of the Issuers other than the Security for the Senior Notes. No recourse
shall be had for the payment of any amount owing in respect of the Share Trust
Reimbursement Obligations or any other obligations of the Issuer hereunder
against any trustee, trust officer, limited partner, general partner, holder of
a beneficial interest, officer, director, employee, shareholder or incorporator
of the Issuer, the Co-Issuer, the Noteholders, the Indenture Trustee, the
Initial Purchasers, their respective

                                      -37-
<PAGE>   40

Affiliates or any of their respective successors or assigns It is understood
that the foregoing provisions of this paragraph (b) shall not (i) prevent
recourse to the Security for the Senior Notes for the sums due or to become due
under any security, instrument or agreement which is part of the Security for
the Senior Notes or (ii) except as specifically provided therein, constitute a
waiver, release or discharge of any indebtedness or obligation secured by the
Indenture. It is further understood that the foregoing provisions of this
paragraph (b) shall not limit the right of any Person to name the Issuers as
party defendants in any Proceeding or in the exercise of any other remedy under
this Agreement or the Indenture, so long as no judgment in the nature of a
deficiency judgment or seeking personal liability shall be asked for or (if
obtained) enforced against any such Person.

                  SECTION 28. Cash Flow Default. Upon the occurrence of a Cash
Flow Default, Williams shall be obligated to cause the Williams Demand Loan held
in the Pledged Share Trust Reserve Account to be immediately paid in full to the
Indenture Trustee.

                            [signature pages follow]

                                      -38-
<PAGE>   41

                  IN WITNESS WHEREOF, each of Williams, the Share Trust, the
Issuer, the Indenture Trustee and the Initial Remarketing Agent has caused this
Agreement to be executed in its name and on its behalf by one of its duly
authorized officers as of the date first above written.

                                   THE WILLIAMS COMPANIES, INC.

                                   By  /s/  DEBORAH S. FLEMING
                                     ---------------------------------
                                     Name:  Deborah S. Fleming
                                     Title: Assistant 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

                                   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

                                   UNITED STATES TRUST COMPANY OF NEW
                                   YORK, not in its individual
                                   capacity, but solely as Indenture
                                   Trustee

                                   By   /s/  LOUIS P. YOUNG
                                     ---------------------------------
                                     Name:   Louis P. Young
                                     Title:  Vice President

                                   CREDIT SUISSE FIRST BOSTON CORPORATION

                                   By   /s/  JAMES FIELDS
                                     ---------------------------------
                                     Name:   James Fields
                                     Title:  Managing Director

                                      -39-
<PAGE>   42

                                                                      Schedule I

                        Certain transactions described in
                                  Section 3(e)

Securities issued pursuant to the certificate of designation for the December
2000 Cumulative Convertible Preferred Stock ($1.00 par value) of The Williams
Companies, Inc., dated December 28, 2000.

<PAGE>   43

                                                                   Schedule II

                        Registration Rights described in
                                  Section 5(l)

None.

<PAGE>   44

                                                                    Schedule III

                       List of Eligible Remarketing Agents

Banc of America Securities LLC
Chase Securities Inc.
Credit Lyonnais Securities (USA) Inc.
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
Salomon Smith Barney Inc.
UBS Warburg LLC

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