Exhibit 3.2***Execution Copy*****GENERAL PARTNERSHIP AGREEMENT****OF****NORTHWEST PIPELINE GP****BY AND BETWEEN****WGPC HOLDINGS LLC****and****WILLIAMS PIPELINE PARTNERS HOLDINGS LLC****EFFECTIVE AS OF OCTOBER 1, 2007**
 

 
**TABLE OF CONTENTS**         **1**. CONVERSION TO GENERAL PARTNERSHIP  1           1.1  Conversion  1  1.2  Conversion Filings  1          **2**. ORGANIZATIONAL MATTERS  1           2.1  Name  1  2.2  Principal Office  1  2.3  Registered Office and Agent  1  2.4  General Filings  1  2.5  Purposes  1  2.6  Term  2  2.7  Definitions  2  2.8  Locations of Other Definitions  7  2.9  MLP Partnership Agreement  8          **3**. CAPITAL AND CONTRIBUTIONS  8           3.1  Initial Percentage Interests  8  3.2  Capital Contributions  8  3.3  Remedies for Non-Payment of Required Additional Capital Contributions  9  3.4  Interest; Returns of Capital  10  3.5  Loans From Partners  10          **4**. PROFITS, LOSSES AND DISTRIBUTIONS  11           4.1  Allocation of Profits and Losses  11  4.2  Special Allocations  11  4.3  Curative Allocations  12  4.4  Allocation of Recapture Items  12  4.5  Other Allocation Rules  12  4.6  Income Tax Allocations  13  4.7  Non-Liquidating Distributions  14  4.8  Distributions In-Kind  14  4.9  Liquidating Distributions  15          **5**. MANAGEMENT OF PARTNERSHIP AND ITS ASSETS  15           5.1  Creation of Management Committee  15  5.2  Powers of the Management Committee  16  5.3  Meetings of the Management Committee  16  5.4  Quorum  17 
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          5.5  Voting  17  5.6  Partnership Budget  18  5.7  Partnership Expenses  19  5.8  Partnership Officers  19  5.9  Actions By Partners  19          **6**. OTHER ACTIVITIES; CONFLICTS OF INTEREST  20           6.1  Other Activities of Partners  20  6.2  Conflicts of Interest  21          **7**. FINANCIAL, ACCOUNTING AND TAX MATTERS  21           7.1  Fiscal Year  21  7.2  Capital Accounts  21  7.3  Accounting Method; Books and Records  23  7.4  Reports; Financial Statements; Audits  23  7.5  General Tax Matters  24  7.6  Tax Matters Partner  25  7.7  Banking  25  7.8  Property  26          **8**. TRANSFERS OF PARTNERSHIP INTERESTS  26           8.1  Restrictions on Transfer  26  8.2  Permitted Transfers  26  8.3  Right of First Offer  26  8.4  Conditions to Transfer  28  8.5  Specific Enforcement  28          **9**. ADDITIONAL PARTNERS  28          **10**. DISSOLUTION AND TERMINATION  28           10.1  Unilateral Acts Prohibited  28  10.2  Events of Dissolution  29  10.3  Winding Up, Liquidation and Distribution of Assets  29  10.4  Purchase Procedures  31          **11**. OPERATION OF THE PARTNERSHIP  31           11.1  Operator  31  11.2  Expenses  32          **12**. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTNERS  32 
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         **13**. NOTICES  33          **14**. INDEMNIFICATION  34           14.1  Indemnification by the Partnership  34  14.2  Indemnification by the Partners  34  14.3  Right of Partnership Indemnitee to Advances for Expenses  35  14.4  Defense of Action  35          **15**. MISCELLANEOUS  36           15.1  Amendments  36  15.2  Binding and Entire Agreement  36  15.3  Governing Law  36  15.4  Effect of Inconsistencies with the Act  36  15.5  Severability  36  15.6  Waivers  37  15.7  Rights and Remedies Cumulative  37  15.7  Rights and Remedies Cumulative  37  15.8  Counterparts  38  15.9  Construction  38  15.9  Construction  38  15.10  Brokers  38  15.11  Further Assurances  38  15.12  Waiver of Certain Damages  38  15.13  Certificates of Interest  38  15.14  No Third-Party Beneficiaries  39 **EXHIBITS**   Exhibit 3.1 Percentage Interests   Exhibit 5.6 2007 Partnership Budget   Exhibit 13 Partner Addresses
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**GENERAL PARTNERSHIP AGREEMENT**     THIS GENERAL PARTNERSHIP AGREEMENT is entered into effective as of the Effective Date by andbetween WGPC Holdings LLC, a Delaware limited liability company (the “Williams Partner”),and Williams Pipeline Partners Holdings LLC, a Delaware limited liability company (the “MLPPartner”). The Williams Partner and the MLP Partner, together with any other persons whobecome parties to this Agreement in the manner provided herein, are hereinafter collectivelyreferred to as the “Partners” and each, individually, as a “Partner.”**1.****CONVERSION TO GENERAL PARTNERSHIP****.**     1.1 Conversion. The Partners hereby convert Northwest Pipeline Corporation (the“Corporation”) to a general partnership (the “Partnership”) as of the EffectiveDate pursuant to the Delaware Revised Uniform Partnership Act, as the same may be amended from timeto time (the “Act”), and the Delaware General Corporation Law.     1.2 Conversion Filings. Effective as of October 1, 2007, the Partners shall havefiled (a) a Certificate of Conversion to Partnership with respect to the Corporation; and (b) aStatement of Partnership Existence with respect to the Partnership.**2.****ORGANIZATIONAL MATTERS****.**     2.1 Name. The name of the Partnership shall be Northwest Pipeline GP.     2.2 Principal Office. The principal office of the Partnership shall be located at 295Chipeta Way, Salt Lake City, Utah 84108, or at such other place as may be determined by theManagement Committee from time to time.     2.3 Registered Office and Agent. The registered office of the Partnership, and theoffice required to be maintained by the Partnership in the State of Delaware pursuant to the Act,shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801, inthe County of New Castle. The registered agent for the Partnership at such address shall be TheCorporation Trust Company. The Management Committee may designate a different registered office oragent for the Partnership.     2.4 General Filings. The Partners shall file such additional instruments, andamendments thereto, as may from time to time be necessary or appropriate to carry out thisAgreement and enable the Partnership to conduct its business in compliance with applicable laws.     2.5 Purposes. The purposes of the Partnership shall be to own, operate, maintain,develop, improve, manage, finance, expand, sell, exchange, lease and otherwise use or deal with ordispose of the Pipeline System and related facilities, to engage in any and all business activitiesnecessary or incidental thereto, and to engage
 

 
in such other business activities as the Management Committee from time to time may determine; *provided*, *however*, that the Management Committee alsodetermines that as of the date of commencement of such other business activity, such activity (a)generates “qualifying income” (as such term is defined pursuant to Section 7704 of the Code) or (b)enhances the operations of an activity of the Partnership that generates qualifying income.     2.6 Term. The Partnership commenced as of the Effective Date and shall continue untilthe Partnership is dissolved in accordance with Section 10.2.     2.7 Definitions. For all purposes of this Agreement:          (a) “Affiliate” of any Person means (i) any other Person which, directly orindirectly, Controls, is Controlled by, or is under common Control with, such Person, (ii) anygeneral partner of such Person, or (iii) any Person which, directly or indirectly, Controls, isControlled by, or is under common Control with, a Person described in clause (ii) of this sentence.          (b) “Available Cash” means, for any Quarter (i) the sum of (A) all cash and cashequivalents of the Partnership and its subsidiaries on hand at the end of a particular Quarter,plus (B) and if the Management Committee so determines all or any part of any additionalcash and cash equivalents of the Partnership and its subsidiaries on hand on the date ofdetermination resulting from working capital borrowings made after the end of such Quarter;minus (ii) the amount of cash reserves established to (A) provide for the proper conduct ofthe business of the Partnership and its subsidiaries (including reserves for future capitalexpenditures and for future credit needs of the Partnership and its subsidiaries) after suchQuarter; and (B) comply with applicable law or any debt instrument or other agreement or obligationto which the Partnership or any of its subsidiaries is a party or its assets are subject; *provided*,*however*, that disbursements made by the Partnership or any of its subsidiaries or cash reservesestablished, increased or reduced after the end of such Quarter but on or before the date ofdetermination of Available Cash for such Quarter shall be deemed to have been made, established,increased or reduced, for purposes of determining Available Cash, within such Quarter if theManagement Committee so determines.          (c) “Capital Account” means the account maintained for each Partner and adjustedpursuant to Section 7.2.          (d) “Capital Contribution” means the cash, cash equivalents, or fair market value ofproperty that a Partner contributes to the Partnership (as agreed by all of the Partners), net ofany liabilities that the Partnership is considered to have assumed or taken subject to pursuant toSection 752 of the Code.          (e) “CHC Project” means the Colorado Hub Connection project (as described in theRegistration Statement).
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          (f) “Code” means the United States Internal Revenue Code of 1986, as amended from timeto time.          (g) “Contract” means any written contract, mortgage, deed of trust, bond, indenture,lease, license, note, franchise, certificate, option, warrant, right or other instrument, document,obligation or agreement, and any oral obligation, right or agreement.          (h) “Control” means the possession, directly or indirectly, of the power to direct orcause the direction of the management and policies of a Person, whether through the ownership ofvoting securities, by contract or otherwise, or the ownership of 50% or more of the voting, equityor profits interests in such Person.          (i) “Effective Date” means October 1, 2007.          (j) “Event of Withdrawal” means:               (i) in the case of a Partner that is a corporation, its dissolution or the revocation of itscharter or certificate of incorporation unless reinstated within 60 days thereafter;               (ii) in the case of a Partner that is a separate partnership, limited liability company, jointventure or similar unincorporated association, the dissolution and commencement of winding up ofthe Partner; or               (iii) the filing by a Partner of any petition in bankruptcy or for reorganization, liquidationor similar relief under any statute, law or regulation governing the rights and relief of debtors;or the entry of an order for relief against a Partner pursuant to an involuntary bankruptcypetition filed against such Partner; or the adjudication of a Partner as bankrupt or insolvent; orthe application by a Partner for or such Partner’s consent to or acquiescence in the appointment ofa trustee, receiver or liquidator for all or any substantial part of such Partner’s assets; or themaking by a Partner of an assignment for the benefit of creditors; or any substantially similaraction on the part of a Partner.          (k) “FERC” means the U.S. Federal Energy Regulatory Commission.          (l) “Governmental Authority” means the United States of America, any state,commonwealth, territory or possession thereof and any political subdivision or quasi-governmentalauthority of any of the same, including courts, tribunals, departments, commissions, boards,bureaus, agencies, counties, municipalities, provinces, parishes and other instrumentalities.          (m) “Group Members” means the Partnership and any of its Subsidiaries.
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          (n) “Indebtedness” means (i) debt for money borrowed and similar monetary obligationsevidenced by bonds (excluding surety and performance bonds), notes, debentures, or other similarinstruments, other than trade accounts payable in the ordinary course of business, (ii) obligationswith respect to letters of credit, and (iii) guaranties, endorsements, and other contingentobligations whether direct or indirect in respect of liabilities of others of any of the typesdescribed in clauses (i) and (ii) above (other than endorsements for collection or deposit in theordinary course of business).          (o) “Interest” means the entire ownership interest of a Partner in the Partnership atany particular time, including the rights of such Partner to Partnership capital, Profits, Losses,distributions and any other benefits to which such Partner may be entitled hereunder, and theobligations of such Partner to comply with the applicable terms and provisions of this Agreement.          (p) “IPO Closing Date” means the date of the closing of the initial public offering ofunits representing limited partner interests in the MLP to which the Registration Statementrelates.          (q) “Judgment” means any judgment, writ, order, injunction, award or decree of anycourt, judge, justice or magistrate, including any bankruptcy court or judge, and any order of orby any Governmental Authority.          (r) “Legal Requirements” means applicable common law and any applicable statute,ordinance, code or other law, rule, regulation, order, technical or other written standard,requirement, or procedure enacted, adopted, promulgated, applied or followed by any GovernmentalAuthority, including Judgments.          (s) “Lien” means any mortgage, pledge, lien, security interest, or other similarencumbrance.          (t) “Majority Vote” means the affirmative vote of one or more Representativesrepresenting Partners holding more than 50% of the total Percentage Interests.          (u) “MLP” means Williams Pipeline Partners L.P.          (v) “MLP Partner” means Williams Pipeline Partners Holdings LLC.          (w) “MLP Partnership Agreement” means the Agreement of Limited Partnership of the MLP,as it may be amended from time to time.          (x) “Parachute Lateral” means the assets constituting the Parachute Lateral (asdescribed in the Registration Statement).          (y) “Percentage Interest” means, with respect to a Partner, the percentage set forthopposite such Partner’s name on Exhibit 3.l, subject to adjustment
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pursuant to a transfer of an Interest by a Partner or the issuance of new Interests by the Partnership, in either case, incompliance with the terms of this Agreement.          (z) “Person” means any individual, partnership, limited liability company,corporation, association or other unincorporated entity of any kind.          (aa) “Pipeline System” means any natural gas pipeline system owned and operated by thePartnership, including mainline and lateral transmission pipeline, transmission compressorstations, and storage facilities.          (bb) “Prime Rate” means the prime commercial lending rate in effect from time to timeat the Partnership’s principal bank, as determined by the Management Committee.          (cc) “Pro Rata” with respect to the Partners, or any of them, means in proportion totheir respective Percentage Interests.          (dd) “Profits” and “Losses” of the Partnership shall mean for each taxableyear of the Partnership an amount equal to the Partnership’s taxable income or loss for such yearas determined for federal income tax purposes in accordance with the accounting method and rulesused by the Partnership and in accordance with Code Section 703(a) (for such purpose, all items ofincome, gain, loss or deduction required to be separately stated pursuant to Code Section 703(a)(1)shall be included in taxable income or loss), subject to the following modifications:               (i) All fees and other expenses incurred by the Partnership to promote the sale of (or tosell) any interest that can neither be deducted nor amortized under Section 709 of the Code, ifany, shall, for purposes of Capital Account maintenance, be treated as an item of deduction at thetime such fees and other expenses are required;               (ii) Except as otherwise provided in Section 1.704-1(b)(2)(iv)(m) of the Treasury Regulations,the computation of all items of income, gain, loss and deduction shall be made without regard toany election under Section 754 of the Code which may be made by the Partnership;               (iii) any income of the Partnership that is exempt from federal income tax and not otherwisetaken into account in computing Profits and Losses shall be added to such taxable income or loss;               (iv) any expenditures of the Partnership described in Section 705(a)(2)(B) of the Code ortreated as Code Section 705(a)(2)(B) expenditures pursuant to Section 1.704-1(b)(2)(iv)(i) of theTreasury Regulations, and not otherwise taken into account, shall be subtracted from such taxableincome or loss;               (v) with respect to Partnership property which, in conformity with Treasury Regulations, has abook value greater than or less than its adjusted tax
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basis, “Profits” and “Losses” of the Partnership shall be determined by reference to the depreciation and amortization deduction, ifany, allowable with respect to such property as computed for book purposes (and not for taxpurposes), as determined pursuant to Section 1.704-1(b)(2)(iv)(g) of the Treasury Regulations, and by the gain or loss attributableto such property as computed for book purposes (and not for tax purposes), by reference to suchproperty’s adjusted book value; and               (vi) notwithstanding any other provision of this Section 2.7(cc), any items which arespecially allocated to the Partners pursuant to Sections 4.2, 4.3 or 4.4 hereof shall not be takeninto account in computing Profits or Losses.          (ee) “Quarter” means any fiscal quarter of the Partnership.          (ff) “Registration Statement” means the Form S-1 (SEC File No. 333-146015) and theprospectus filed therewith, with all amendments, of the MLP.          (gg) “Subsidiary” means, with respect to any Person, (a) a corporation of which morethan 50% of the voting power of shares entitled (without regard to the occurrence of anycontingency) to vote in the election of directors or other governing body of such corporation isowned, directly or indirectly, at the date of determination, by such Person, by one or moreSubsidiaries of such Person or a combination thereof, (b) a partnership (whether general orlimited) in which such Person or a Subsidiary of such Person is, at the date of determination, ageneral or limited partner of such partnership, but only if more than 50% of the partnershipinterests of such partnership (considering all of the partnership interests of the partnership as asingle class) is owned, directly or indirectly, at the date of determination, by such Person, byone or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (otherthan a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person,or a combination thereof, directly or indirectly, at the date of determination, has (i) at least amajority ownership interest or (ii) the power to elect or direct the election of a majority of thedirectors or other governing body of such Person.          (hh) “Transaction Documents” means this Agreement, the Contribution, Conveyance andAssumption Agreement, the Interest Purchase Agreement and all of the other documents, instrumentsand agreements contemplated hereunder or thereunder.          (ii) “Transfer” means to sell, assign, transfer, exchange or otherwise dispose orconvey.          (jj) “Treasury Regulations” means the income tax regulations promulgated under theCode.          (kk) “Unanimous Vote” means the affirmative vote of Representatives representingPartners holding 100% of the total Percentage Interests.
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     2.8 Locations of Other Definitions. The terms set forth below shall have the meaningsascribed in the Sections indicated:   Terms Section of Location   704(c) Property 4.6(b)Act 1.1Additional Agreement 12(b)Adjusted Property 4.6(c)Book-Tax Disparity 4.6(c)Budget 5.6(d)Certificates 15.15CHC Capital Contribution 3.2(b)Corporation 1.1Default Rate 3.3Defaulting Partner 3.3Event of Dissolution 10.2GAAP 7.3Indemnified Losses 14.1Indemnified Party 14.4Indemnifying Party 14.4Liquidating Partner 10.3(a)Losses 2.7(dd)Management Committee 5.1(a)Negotiation Period 8.3(c)Non-Defaulting Partner 3.3Non-Selling Partners 8.3(a)Notice of Dispute 15.8(b)Offered Interest 8.3(a)Operating Loans 3.5(a)Operator 11.1Parachute Capital Contributions 3.2(c)Partner, Partners PreamblePartner Indemnitee 14.2Partnership 1.1Partnership Accountants 7.4(c)Partnership Budget 5.6(a)Partnership Indemnitee 14.1Prior Partnership Budget 5.6(c)Purchase Notice 8.3(b)Reestimated Partnership Budget 5.6(d)Remedial Method 4.6(b)Representatives 5.1(a)Sale Offer 8.3(a)Selling Partner 8.3(a)Tax Information Notice 7.5(b)
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   Terms Section of Location   Third Party Action 14.4TMP 7.6(a)Williams Partner Preamble     2.9 MLP Partnership Agreement. Notwithstanding any other provision of this Agreement,to the extent any provision of this Agreement contradicts with or is in conflict with any provisionof the MLP Partnership Agreement, the provisions of the MLP Partnership Agreement shall control.**3.****CAPITAL AND CONTRIBUTIONS****.**     3.1 Initial Percentage Interests. The Percentage Interests of the Partners as of theEffective Date shall be as set forth on Exhibit 3.1 hereto. Upon the transfer by a Partnerof all or a portion of such Partner’s Interest pursuant to Article 8 or the issuance of newInterests by the Partnership in compliance with this Agreement, Exhibit 3.1 shall beupdated to reflect the Percentage Interests of the Partners immediately following such transfer.     3.2 Capital Contributions.          (a) Subject to Section 3.2(b) and 3.2(c) below, the Management Committee may from time to timeassess the Partners Pro Rata for Capital Contributions to the Partnership in such amounts as theManagement Committee may determine to be reasonably necessary to fund the operations and capitalrequirements (whether working maintenance or expansion capital) of the Partnership and to providefor timely payment of Partnership obligations. The notice of assessment shall state the aggregateamount of Capital Contributions called for, each Partner’s Pro Rata share thereof, and the purposefor which the assessment is made. Each Partner’s share of any Capital Contribution assessedhereunder shall be due and payable within 30 days after notice of assessment is given. Except asotherwise determined by the Management Committee, all capital contributions shall be made by wiretransfer of immediately available funds.          (b) To the extent that the Management Committee determines that Capital Contributions arenecessary or desirable in connection with the construction of the CHC Project (“CHC CapitalContributions”), such CHC Capital Contributions shall be assessed against and contributed onlyby the holder of the Interest held, as of the Effective Date, by the Williams Partner. The noticeof assessment for any CHC Capital Contributions shall state the aggregate amount of such CHCCapital Contributions called for, and the purpose for which the assessment is made. The holder ofsuch Interest shall contribute such assessed amounts to the Partnership by wire transfer ofimmediately available funds within 30 days after the date of the assessment notice. At the time aCHC Capital Contribution is made by the holder of such Interest, an adjustment in the amount of theCHC Capital Contribution shall be made to the initial book value (as maintained for Capital Accountpurposes) of the properties of the
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Partnership that were initially contributed by the holder ofsuch Interest and to the Capital Account of the holder of such Interest as a purchase priceadjustment.          (c) To the extent that the Management Committee determines that Capital Contributions arenecessary or desirable in connection with the Parachute Lateral (“Parachute CapitalContributions”), such Parachute Capital Contributions shall be assessed against and contributed only by the holder of the Interest held, as of the EffectiveDate, by the Williams Partner. The notice of assessment for any Parachute Capital Contributionsshall state the aggregate amount of such Parachute Capital Contributions called for, and thepurpose for which the assessment is made. The holder of such Interest shall contribute suchassessed amounts to the Partnership by wire transfer of immediately available funds within 30 daysafter the date of the assessment notice.          (d) Notwithstanding Sections 3.2(a), 3.2(b) and 3.2(c) above, and Section 5.5(c) below, ifthere occurs (i) a material default under a material agreement of the Partnership, or (ii) adefault on or failure to make payment of an obligation of the Partnership or a failure to takeother action that is likely to result in the imposition of a Lien upon or a seizure or othercollection actions against a material asset or assets of the Partnership, or (iii) a failure tocomply with an order of a Governmental Authority having jurisdiction over the Partnership, which,in each case, would be reasonably likely to have a material adverse effect on the business,operations or financial condition of the Partnership, then any Partner may require all of thePartners to make a Capital Contribution to the Partnership by wire transfer of immediatelyavailable funds in order to cure such default, pay such obligation, comply with such order or takeother action in connection therewith, by delivering written notice to the other Partners of itsintent to require such Capital Contribution pursuant to this Section 3.2(d); *provided, however,*that the aggregate amount of such required Capital Contribution shall not exceed the minimum amountnecessary to prevent such default, seizure or noncompliance of the type described in the precedingclauses (i), (ii) and (iii) of this Section 3.2(d).          (e) Except as otherwise required by law or this Agreement, no Partner shall be obligated tomake any Capital Contributions to the Partnership, unless otherwise expressly agreed in writing bysuch Partner. No Partner shall make any voluntary Capital Contributions to the Partnership exceptas expressly permitted by this Agreement.     3.3 Remedies for Non-Payment of Required Additional Capital Contributions. Failure ofany Partner to make full and timely payment to the Partnership of any Capital Contribution requiredunder Section 3.2 shall constitute a breach of this Agreement. The unpaid amount shall bearinterest at a floating rate (the “Default Rate”) equal to the greater of (i) the Prime Rateplus 5 percentage points, and (ii) the then current interest rate on the Partnership’s senior debtplus 5 percentage points, from the date due until paid by such Partner (the “DefaultingPartner”) or contributed by the other Partner (the “Non-Defaulting Partner”). Uponsuch a default, the Non-Defaulting Partner may, in
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addition to any other available remedies, pursue any of the following courses of action, or such combination thereof as may be necessary orappropriate to obtain full satisfaction of the Defaulting Partner’s obligation hereunder:          (a) The Partnership may retain any funds which would otherwise be distributed hereunder to theDefaulting Partner, until such time as the Partnership has recovered the full amount in default,together with accrued interest thereon. The amounts retained shall be credited first to interestand then to contributions payable.          (b) The Non-Defaulting Partner may advance all or any portion of the amount in default to thePartnership. If the Non-Defaulting Partner elects to advance to the Partnership all or a portionof the amount in default, such advance shall be treated as a loan to the Defaulting Partner,followed by a contribution of the borrowed funds to the Partnership by the Defaulting Partnercuring the default in whole or in part. Such a loan shall be payable on demand and bear interestat the Default Rate. Until the Defaulting Partner’s debt to the Non-Defaulting Partner, togetherwith interest thereon, is paid in full, any funds or property which otherwise would bedistributable to the Defaulting Partner from time to time hereunder shall be paid to theNon-Defaulting Partner. Any such payments shall be deemed to be distributions to the DefaultingPartner by the Partnership followed by appropriate payments by the Defaulting Partner to theNon-Defaulting Partner. Payments shall be credited first to accrued interest.     3.4 Interest; Returns of Capital. The Partners shall not receive interest on or withrespect to their Capital Contributions or the amount of their Capital Accounts. Returns of capitalshall be made only as provided herein.     3.5 Loans From Partners.          (a) If the Partnership does not have sufficient funds, or access to such funds pursuant to thePartnership’s credit facilities, to fulfill its contractual obligations to lenders (other thanPartners) or other third parties, to pay for any of its uninsured losses, or otherwise to providefor the timely payment of its obligations in the ordinary course of its business, and the Partnersare unable or unwilling to make the necessary Capital Contributions to the Partnership to providefor such obligations or losses, then any Partner, in its discretion may, but shall not be requiredto, loan to the Partnership amounts sufficient to provide for such losses or obligations (the“Operating Loans”). Operating Loans shall be made to the Partnership upon commerciallyreasonable terms at an interest rate equal to the greater of (i) the Prime Rate, plus 3 percentagepoints, and (ii) the then current interest rate on the Partnership’s senior debt, plus 3 percentagepoints. In addition to Operating Loans, the Partnership may borrow money from the Partners at suchother times and upon such other terms as the Management Committee deems appropriate.          (b) Unless otherwise determined by the Management Committee, whenever the Partnership proposesto borrow money from a Partner, including but not limited to the Operating Loans provided for inSection 3.5(a) above, (i) all Partners shall be afforded an opportunity to participate Pro Rata inlending such money, (ii) such
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loan shall be secured only by the assets of the Partnership and shall be non-recourse as tothe Partners, and (iii) such loans shall be subordinated to the Partnership’s senior bank debt andsenior notes and debentures. Payments by the Partnership to the Partners in repayment of OperatingLoans or other loans by the Partners to the Partnership shall be made in proportion to therespective then outstanding balances of principal plus accrued interest owed by the Partnership toeach Partner. Any then outstanding Operating Loans or other loans by the Partners to thePartnership shall be due and payable in full upon dissolution of the Partnership.**4.****PROFITS, LOSSES AND DISTRIBUTIONS****.**     4.1 Allocation of Profits and Losses.          (a) Subject to the special allocations set forth in Sections 4.1(b), 4.2, 4.3, 4.4 and 4.5below, the Profits and Losses of the Partnership shall be allocated to the Partners Pro Rata.          (b) During any period that the Partnership or a subsidiary of the Partnership owns, leases andoperates, the Parachute Lateral, all Profits and Losses attributable to the Parachute Lateral withrespect to such period shall be allocated 100% to the holder of the Interest held, as of theEffective Date, by the Williams Partner.     4.2 Special Allocations. Notwithstanding Section 4.1 of this Agreement:          (a) If, during a taxable year of the Partnership, there is a net decrease in the Partnership’sminimum gain as defined in Treasury Regulations Section 1.704-2(d), then each Partner shall beallocated items of income (including gross income) and gain for such year (and if necessary forsubsequent years) in an amount equal to such Partner’s share of the net decrease in Partnershipminimum gain. This Section 4.2(a) is intended to comply with the minimum gain chargebackrequirement of Section 1.704-2(f) of the Treasury Regulations and shall be interpreted consistentlytherewith. For any taxable year that the Partnership has a net decrease in minimum gain, if theminimum gain chargeback requirement would cause a distortion in the economic arrangement of thePartners and it is not expected that the Partnership will have sufficient other income to correctthat distortion, the Management Committee may seek to have the Internal Revenue Service waive theminimum gain chargeback requirement in accordance with Section 1.704-2(f)(4) of the TreasuryRegulations.          (b) If, during a taxable year of the Partnership, there is a net decrease in partnernonrecourse debt minimum gain as defined in Treasury Regulations Section 1.704-2(i)(3), then eachPartner with a share of that partner nonrecourse debt minimum gain shall be allocated items of income (including gross income) and gain for such year (andif necessary for subsequent years) in an amount equal to such Partner’s share of the net decreasein partner nonrecourse debt minimum gain. This Section 4.2(b) is intended to comply with theminimum gain chargeback requirement of Section 1.704-2(i)(4) of the Treasury Regulations and shallbe interpreted consistently therewith.
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          (c) Items of Partnership loss, deduction and Code Section 705(a)(2)(B) expenditures which areattributable to any nonrecourse debt of the Partnership and are characterized as partnernonrecourse deductions under Sections 1.704-2(i)(1) or (2) of the Treasury Regulations shall bespecially allocated to the Partner who bears the economic risk of loss with respect to suchnonrecourse debt in accordance with Section 1.704-2(i)(1) of the Treasury Regulations.          (d) Nonrecourse deductions (as defined in Section 1.704-2(b)(1) of the Treasury Regulations)shall be allocated to the Partners Pro Rata.          (e) To the extent that an adjustment to the adjusted tax basis of any Partnership assetpursuant to Section 734(b) or 743(b) of the Code is required pursuant to Section1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4) of the Treasury Regulations, to be taken intoaccount in determining Capital Accounts as the result of a Distribution to a Partner in completeliquidation of its Interest, the amount of such adjustment to Capital Accounts shall be treated asan item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustmentdecreases such basis), and such gain or loss shall be specially allocated to the Partners inaccordance with their interests in the Partnership in the event Section 1.704-1(b)(2)(iv)(m)(2) ofthe Treasury Regulations applies, or to the Partner to whom such Distribution was made in the eventSection 1.704-1(b)(2)(iv)(m)(4) of the Treasury Regulations applies.     4.3 Curative Allocations. Any allocations made or expected to be made to the Partnerspursuant to Section 4.2 hereof shall be taken into account in computing allocations of PartnershipProfits and Losses pursuant to Section 4.1 and any other allocations pursuant to Section 4.2, sothat after all allocations to the Partners pursuant to Sections 4.1 and 4.2 have been made, eachPartner’s Capital Account balance is, to the extent possible, equal to the Capital Account balancesuch Partner would have had if the special allocations required by Section 4.2 hereof had not beenrequired, and all Partnership items were allocated pursuant to Section 4.1 hereof. The applicationof this Section 4.3 and the making of curative allocations pursuant hereto shall be made in anyreasonable manner by the Management Committee after consultation with the Partnership’s independentaccountants.     4.4 Allocation of Recapture Items. All recapture of income tax deductions resultingfrom the sale or disposition of Partnership property shall be allocated to the Partner or Partnersto whom the deduction that gave rise to such recapture was allocated hereunder to the extent thatsuch Partner is allocated any gain from the sale or other disposition of such property.     4.5 Other Allocation Rules.          (a) If any fees or other payments deducted for federal income tax purposes by the Partnershipare recharacterized by a final determination of the Internal Revenue Service as nondeductibledistributions to any Partner then, notwithstanding all other allocation provisions (other thanallocations pursuant to Section 4.3 above), gross
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income shall be allocated to such Partner (for the year(s) of adjustment) in an amount equal to the fees or payments recharacterized.          (b) Any income or deduction imputed to the Partnership for federal income tax purposes withrespect to a transaction between a Partner and the Partnership shall be allocated to such Partner;*provided*, *however*, that no such allocation shall materially alter the economic agreement among thePartners (without regard to tax consequences) that would have been obtained had such income ordeduction not been so imputed to the Partnership.     4.6 Income Tax Allocations.          (a) Subject to Sections 4.6(b) and (c) below, each item of income, gain, loss or deduction ofthe Partnership for federal income tax purposes shall be allocated to and shared by the Partners inthe same manner as the corresponding “book” items are allocated pursuant to Section 4.1. Creditsshall be allocated to and shared by the Partners Pro Rata.          (b) In accordance with Code Section 704(c)(1)(A) and Section 1.704-1(b)(2)(iv) of the TreasuryRegulations, if a Partner contributes property to the Partnership with a fair market value thatdiffers from its adjusted basis at the time of contribution (a “704(c) Property”), thenincome, gain, loss and deductions with respect to such 704(c) Property shall, solely for income taxpurposes, be allocated among the Partners so as to take account of any variation between theadjusted basis of such property to the Partnership and its fair market value at such time ofcontribution using the remedial method of allocations as described in Section 1.704-3(d) of theTreasury Regulations (the “Remedial Method”).          (c) If, under Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations, Partnership propertythat has been revalued is properly reflected in the Capital Accounts and on the books of thePartnership at a book value that differs from the adjusted tax basis of such property (a“Book-Tax Disparity”), then depreciation, depletion, amortization, and gain or loss withrespect to such property (the “Adjusted Property”) shall be shared among the Partners in amanner that takes account of the variation between the adjusted tax basis of such Adjusted Propertyand its book value, using the Remedial Method.          (d) The Partnership may determine to depreciate the portion of an adjustment under section743(b) of the Code attributable to unrealized appreciation in any Adjusted Property (to the extentof the unamortized Book-Tax Disparity) using a predetermined rate derived from the depreciationmethod and useful life applied to the Partnership’s common basis of such property, despite the inconsistency of such method withSection 1.167(c)-1(a)(6) of the Treasury Regulations, or any successor provisions. If thePartnership determines that such reporting position cannot reasonably be taken, the Partnership mayadopt any reasonable depreciation convention that would not have a material adverse effect on thePartners.
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          (e) Allocations under this Section 4.6 are solely for purposes of federal, state and localincome taxes and will not affect, or in any way be taken into account in computing, any Partner’sCapital Account or share of Profits, Losses or other items or distributions under this Agreement.     4.7 Non-Liquidating Distributions.          (a) Subject to Sections 4.7(b) and 4.7(c) below, on or before the last day of the calendarmonth following the end of each Quarter, the Management Committee shall determine the amount of thePartnership’s Available Cash as of the last day of such preceding Quarter and shall distribute anamount equal to 100% of Available Cash to the Partners Pro Rata; *provided, however,*the Partnershipshall not be required to make any distributions of Available Cash pursuant to this Section 4.7(a)until after the IPO Closing Date and may instead make cash distributions of Available Cash at anytime, and in any amount it determines to be appropriate before the IPO Closing Date; and *provided,further,*that the amount of Available Cash required to be distributed for the Quarter in which theIPO Closing Date occurs, shall be pro rated based upon a fraction, of which the numerator is thenumber of days in the period that commences on the IPO Closing Date and ends on last day of suchQuarter and of which the denominator is the number of days in such Quarter.          (b) During any period that the Partnership or a subsidiary of the Partnership owns, or leasesand operates, the Parachute Lateral, all Available Cash attributable to the Parachute Lateral withrespect to such period shall be distributed 100% to the holder of the Interest held, as of theEffective Date, by the Williams Partner at such times as the Management Committee shall determine.At such time as the Management Committee shall determine, any subsidiary holding primarily theParachute Lateral shall be distributed 100% to the holder of the Interest held, as of the EffectiveDate, by the Williams Partner.          (c) Subject to any restrictions imposed by the Partnership’s agreements with its third partylenders, the Partnership shall make other distributions to the Partners Pro Rata, at such times andin such amounts as the Management Committee shall determine by Unanimous Vote.          (d) All amounts withheld pursuant to the Code or any provision of any state or local tax lawwith respect to any Partner shall be treated for all purposes of this Agreement as amountsdistributed by the Partnership to such Partner and shall reduce the distribution to such Partner tobe made pursuant to this Section 4.7.     4.8 Distributions In-Kind. If any assets of the Partnership are to be distributedin-kind at any time including pursuant to Section 10.3 of this Agreement, then the gross fairmarket value of such assets as of the date of such distribution shall be determined in accordancewith this Agreement or as otherwise agreed by the Management Committee, and the Partners’ CapitalAccounts shall be adjusted in the same manner and proportions as if the assets had been sold forsuch fair market value and any Profit or Loss had been allocated to the Partners in accordance withthis Article
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4. Any in-kind distribution of assets of the Partnership, including pursuant toSection 10.3, shall be reflected in the books kept according to U.S. generally accepted accountingprincipals (“GAAP”) or the books kept for FERC purposes of the Partnership in accordance with GAAPor the accounting principals required by the FERC, respectively.     4.9 Liquidating Distributions. Notwithstanding anything to the contrary in thisAgreement, proceeds resulting from any Transfer of any property of the Partnership incident to theliquidation and winding up of the Partnership, as well as any other property distributed inliquidation of the Partnership, shall only be distributed to the Partners in accordance with theprovisions of Section 10.3.**5.****MANAGEMENT OF PARTNERSHIP AND ITS ASSETS****.**     5.1 Creation of Management Committee.          (a) A committee (the “Management Committee”) is hereby established to oversee, manageand supervise all aspects of the Partnership and its business. The Management Committee shallconsist of two individuals (“Representatives”), one designated by the Williams Partner andone designated by the MLP Partner. Initially, the names, addresses and facsimile numbers of thePartners’ Representatives on the Management Committee shall be as follows:   Williams Partner: Donald R. Chappel  One Williams Center  Tulsa, OK  74172-0172  Facsimile (918) 573-0871   MLP Partner: Phillip D. Wright  2800 Post Oak Blvd.  Houston, TX  77056  Facsimile (713) 215-4269Any Partner may from time to time, by notice to the other Partners, remove its Representative anddesignate a new Representative, or appoint an alternate Representative to serve in place of aregular Representative at any meeting. Any notice appointing a new Representative shall set forththe address of the Representative and a telephone number for facsimile transmissions to theRepresentative.          (b) Each Representative shall have full authority to act on behalf of the Partner thatdesignated such Representative and the vote or actions of a Representative at a meeting of theManagement Committee (or through written consent) shall represent and bind the Partner thatdesignated such Representative with respect to any matter. Each Representative is an agent of thePartner designating such Representative and does not owe any duty (fiduciary or otherwise) to thePartnership, any other Partner or any other Representative.
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     5.2 Powers of the Management Committee.          (a) The Management Committee shall be responsible for management of the business and affairsof the Partnership subject to the delegation of powers and duties to officers of the Partnershipand other Persons as provided below. All powers of the Partnership, except those specificallyreserved or granted to the Partners by statute or this Agreement, are hereby granted to and vestedin the Management Committee, and the Management Committee shall have full authority, discretion andpower with respect to all Partnership actions and the execution of all instruments or otherdocuments necessary or appropriate in connection therewith. The Management Committee shall havethe power to delegate authority in writing to such officers, employees, agents and representativesof the Partnership as it from time to time may deem appropriate, but subject to such exceptions andconditions as the Management Committee may determine for the purposes of limiting the scope of anysuch delegation of authority, and subject to revocation of such delegated authority by furtheraction of the Management Committee at any time. Any delegation of authority to take any actionmust be approved in the same manner as would be required for the Management Committee to directlyapprove such action.          (b) Any Partner shall have the right to receive materials made available to the ManagementCommittee, and shall have the right to consult with the Management Committee regarding all aspectsof the Partnership and its business.          (c) Each Representative shall be an agent of and shall represent, and owe duties to, only thePartner that designated such Representative (the nature and extent of such duties being an internalaffair of the partner), and, to the fullest extent permitted by law, shall not owe any duty(fiduciary or otherwise) to the Partnership, any other partner or representative or any officer oremployee of the Partnership. The provisions of this Section 5.2(c) shall also inure to the benefitof each Partner’s Representative.     5.3 Meetings of the Management Committee.          (a) The Management Committee shall meet no less frequently than quarterly. In addition,special meetings of the Management Committee shall be held at such times as are required by thisAgreement and upon the call of any Partner or Representative who gives at least 10 days priorwritten notice to the other Partners specifying the agenda for such meeting. Unless otherwise agreed by the Management Committee,Management Committee meetings shall be held at the Partnership’s principal office as set forth inSection 2.2.          (b) Each Representative may bring to any Management Committee meeting any number of otherindividuals, including consultants, advisors, legal counsel, and technical or other experts, exceptthat if any Representative shall request that any part or all of a Management Committee meeting beheld in executive session, then only the Representatives accompanied by no more than two of theirrespective advisors may attend the executive session. Management Committee meetings may beconducted in
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whole or in part by the means of conference telephone or similar communicationsequipment whereby all persons participating in the meeting may hear and speak to one another.          (c) Minutes of each meeting of the Management Committee shall be prepared and circulated toManagement Committee members. Upon their adoption by the Management Committee, minutes shall befiled at the principal office of the Partnership.          (d) Any action required or permitted to be taken at a regular or special meeting of theManagement Committee may be taken without a meeting, without prior notice, and without a vote if aconsent or consents in writing, setting forth the action so taken, is signed either by all of theRepresentatives or by all of the Partners.     5.4 Quorum. Representatives of (a) one or more Partners holding a Majority Votepresent in person, by conference telephone or by written proxy and entitled to vote, shallconstitute a quorum for the transaction of business for purposes of considering matters thatrequire a Majority Vote under this Agreement, and (b) all of the Partners present in person, byconference telephone or by written proxy and entitled to vote, shall constitute a quorum for thetransaction of business for purposes of considering matters that require a Unanimous Vote underthis Agreement.     5.5 Voting.          (a) Each Representative shall have a vote with respect to all Management Committee mattersthat is equal to the Percentage Interest of the Partner appointing such Representative.          (b) All decisions and actions of the Management Committee with respect to the Partnership andits business shall be made and taken by Majority Vote, except as otherwise provided in Section5.5(c) below.          (c) Notwithstanding any other provision of this Agreement to the contrary, none of thePartnership, the Management Committee nor any Partner shall cause or commit the Partnership to takeany of the following actions without a Unanimous Vote of the Management Committee:               (i) Any bankruptcy filing or any liquidation, dissolution or winding up of the Partnership;               (ii) The issuance, incurrence, assumption or guarantee of any Indebtedness or the pledge of orgrant of any security interest in any Partnership assets;               (iii) The commencement or resolution of any Section 4 general rate case under the NGA, or anyother proceeding or controversy at the Federal Energy Regulatory Commission or an appeal of anorder thereof, the outcome of which would cause (A) the Partnership’s revenues to be reduced by, orthe Partnership to pay
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penalties, refunds or interest in excess of, $50 million or (B) thePartnership to agree to any criminal penalty;               (iv) Any amendment to this Agreement in accordance with Section 15.1;               (v) Any distributions to the Partners other than distributions pursuant to Section 4.7(a) orSection 4.7(b) above;               (vi) The (A) admission of a new Partner (other than pursuant to Section 8.2) or the issuanceof any Interests or other equity (or convertible) interests in the Partnership, (B) the redemption,repurchase or other acquisition of Interests in the Partnership or (C) any withdrawal by anyPartner from the Partnership;               (vii) The Transfer or lease of (A) all or substantially all of the assets of the Partnershipor (B) any portion of such assets with a value in excess of US$20 million;               (viii) Any merger or consolidation of the Partnership with another Person or any conversion orreorganization of the Partnership that would change the form of the Partnership from a generalpartnership to a limited liability company, corporation, limited partnership or other form ofbusiness entity;               (ix) Acquiring, commencing or conducting any activity or business that may generate income forfederal income tax purposes that may not be “qualifying income” (as such term is defined pursuantto Section 7704 of the Code);               (x) Approval of the Partnership Budget as provided in Section 5.6;               (xi) Approval of a Transfer of an interest pursuant to Section 8.4(b); or               (xii) Removal of the Operator or designation of a successor Operator.          (d) With respect to any vote, consent or approval at any meeting of the Management Committeeor otherwise under this agreement, each Partner or its Representative may grant or withhold its vote, consent or approval in its sole discretion,free from any duty, fiduciary or otherwise, to the Partnership or any Partner, other than the dutyto act in good faith. The provisions of this Section 5.5(d) shall apply notwithstanding thenegligence, gross negligence, willful misconduct, strict liability or other fault or responsibilityof a Partner or its Representative.     5.6 Partnership Budget.          (a) The Management Committee shall approve a Partnership budget (the “PartnershipBudget”) for each fiscal year of the Partnership. The approved
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Partnership Budget for the period from the Effective Date through December 31, 2007 is attached as Exhibit 5.6 to thisAgreement.          (b) Prior to the beginning of each fiscal year of the Partnership, the Management Committeeshall cause a proposed Partnership Budget for the following fiscal year to be prepared andsubmitted to the Management Committee for approval.          (c) If the Management Committee fails to adopt a Partnership Budget on or before December 1 ofany year, then the Management Committee shall be deemed to have approved as the Partnership Budgetfor the next calendar year the last Partnership Budget that was approved by the ManagementCommittee (the “Prior Partnership Budget”); *provided*, *however*, that (i) all operatingexpense items (other than capital expenditures) shall be increased by 5% from the Prior PartnershipBudget, and (ii) the capital expenditure budget shall be set at 12/11ths of the amount actuallyspent in the first eleven months of the year covered by the Prior Partnership Budget; and *furtherprovided*, that if a Partnership Budget subsequently is approved by the Management Committee suchsubsequently approved Partnership Budget shall be effective for the remainder of the applicablefiscal year.          (d) After a final Partnership Budget have been approved by the Management Committee (orotherwise deemed approved as provided above), the Partnership shall implement the PartnershipBudget and shall be authorized to make the expenditures and incur the obligations provided fortherein. With the prior approval of the Management Committee, the Partnership Budget may bereestimated at any time during a fiscal year (a “Reestimated Partnership Budget”). AllReestimated Partnership Budgets also shall be subject to the approval of the Management Committee.The term “Budget” as used in this Agreement shall be deemed to include both PartnershipBudgets and Reestimated Partnership Budgets.     5.7 Partnership Expenses. Except as determined in advance by the Management Committeeor as expressly provided in this Agreement or any agreement approved by the Management Committee,no Partner or member of the Management Committee shall be entitled to reimbursement of expenses orto compensation from the Partnership for services rendered to the Partnership as such.     5.8 Partnership Officers. The Management Committee may appoint employees of anyPartner or their Affiliates to serve as officers of the Partnership, and such officers may include a chief executive officer,a president, a senior vice president, one or more vice presidents, a treasurer, a secretary, one ormore assistant secretaries, one or more assistant treasurers, a general counsel, a controller andan assistant general counsel. Any such officers so appointed shall serve at the pleasure of theManagement Committee and shall have such duties as the Management Committee shall determine.     5.9 Actions By Partners.          (a) No Partner shall have any authority to act for, or to assume any obligation orresponsibility on behalf of, another Partner or the Partnership, except as
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expressly set forth in this Agreement or approved by the Management Committee in accordance with the terms of thisAgreement. Each Partner agrees to indemnify and hold each other Partner harmless from and againstany claim, demand, loss, damage, liability or expense of any kind or nature whatsoever, includingreasonable attorneys’ fees, incurred by or against such other Partner and arising out of orresulting from any action taken by the indemnifying Partner in violation of this Section 5.9(a).          (b) Any Partner asserting a right to indemnification under Section 5.9(a) shall so notify theother Partner in writing. The indemnifying Partner shall have the right to defend against anyclaims or actions by third parties giving rise to such claim for indemnification to the fullestextent permitted by law. If the indemnifying Partner assumes such defense, such indemnifyingPartner shall not settle or permit the settlement of any such third party claim or action withoutthe prior written consent of the indemnified Partner, which consent shall not be unreasonablywithheld. If the indemnifying Partner fails to assume the defense of any such claim or action,then the indemnified Partner may defend or settle such claim or action without the consent of theindemnifying Partner.**6.****OTHER ACTIVITIES; CONFLICTS OF INTEREST****.**     6.1 Other Activities of Partners.          (a) Each Partner agrees that, for so long as it is a Partner of the Partnership, (i) its solebusiness will be to act as a general partner or managing member of the Partnership and any otherpartnership or limited liability company of which the Partnership is, directly or indirectly, apartner or member and to undertake activities that are ancillary or related thereto and (ii) shallnot engage in any business or activity or incur any debts or liabilities except in connection withor incidental to (A) its performance as general partner, manager or member of one or more GroupMembers or (B) the acquiring, owning or disposing of debt or equity securities in any Group Member.          (b) Notwithstanding the terms of Section 6.1(a), any Affiliate or Affiliates of a Partner(except any wholly-owned Subsidiary of a Partner) shall have the right to engage in businesses ofevery type and description and other activities for profit and to engage in and possess an interestin other business ventures of any and every type or description, whether in businesses engaged inor anticipated to be engaged in by any Group Member, independently or with others, including business interests and activities indirect competition with the business and activities of any Group Member, and none of the same shallconstitute a breach of this Agreement or any duty otherwise existing at law, in equity or otherwiseto any Group Member or any Partner. None of any Group Member or any other Person shall have anyrights by virtue of this Agreement or the partnership relationship established hereby in anybusiness ventures of any Affiliates of a Partner.          (c) Subject to the terms of Section 6.1(a) and Section 6.1(b), but otherwise notwithstandinganything to the contrary in this Agreement, (i) the engaging
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in competitive activities by any Person (other than any Partner or a wholly owned Subsidiary of aPartner) that is an Affiliate of a Partner in accordance with the provisions of this Section 6.1 ishereby approved by the Partnership and all Partners, (ii) it shall be deemed not to be a breach ofany Partner’s or any other Person’s duties or any other obligation of any type whatsoever of aPartner or any other Person for any such Person that is an Affiliate of a Partner (other than suchPartner or its wholly owned Subsidiary) to engage in such business interests and activities inpreference to or to the exclusion of any Group Member, (iii) none of the Partners or any otherPerson shall have any obligation hereunder or as a result of any duty otherwise existing at law, inequity or otherwise to present business opportunities to any Group Member and (iv) the doctrine of“corporate opportunity” or other analogous doctrine shall not apply to any Partner, any Affiliateof a Partner or any other Person.          (d) To the extent permitted by Law, the provisions of this Section 6.1 constitute an agreementto modify or eliminate fiduciary duties pursuant to the provisions of Section 15-404(b) and (c) ofDelaware Revised Uniform Partnership Act.     6.2 Conflicts of Interest. The Partnership shall not be prohibited from or otherwiselimited in employing, contracting with (including contracts for the sale, exchange, or lease of thePartnership’s property otherwise permitted under this Agreement), or otherwise dealing with, anyPerson, by reason of the fact that such Person is a Partner or is an Affiliate of a Partner, or isan entity in which any Partner has an economic interest, whether such relationship, affiliation, orinterest is direct or indirect.**7.****FINANCIAL, ACCOUNTING AND TAX MATTERS****.**     7.1 Fiscal Year. The fiscal year of the Partnership shall be the calendar year,unless such fiscal year is not the required taxable year of the Partnership pursuant to the Code,in which case the fiscal year of the Partnership shall be the required taxable year.     7.2 Capital Accounts.          (a) A separate Capital Account shall be established and maintained for each Partner inaccordance with Section 1.704-1(b)(2)(iv) of the Treasury Regulations. The holder of the Interestheld, as of the Effective Date, by the Williams Partner shall have an additional separate CapitalAccount with respect to the contribution and any distribution of the Parachute Lateral and anyitems of income, gain, loss, deduction or credit attributable to the Parachute Lateral, whichseparate Capital Account may be combined with any Capital Account such Partner may have withrespect to the other assets of the Partnership, if such combination is required by the TreasuryRegulations. Except as otherwise provided therein:               (i) Such Capital Accounts shall be INCREASED by (x) the amount of any Capital Contributions tothe Partnership by the Partner, and (y) allocations to the Partner of Partnership Profits and anyincome or gain specially allocated to the Partner pursuant to Sections 4.2, 4.3, 4.4, or 4.5.
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               (ii) Such Capital Accounts shall be DECREASED by (x) the amount of money distributed to thePartner by the Partnership, (y) the fair market value of any property distributed to the Partner bythe Partnership, net of any encumbrances upon such distributed property that such Partner isconsidered to assume or take subject to under Section 752 of the Code, and (z) allocations to thePartner of Partnership Losses and any losses or items of Partnership expense and deductionspecially allocated to the Partner pursuant to Sections 4.2, 4.3, 4.4 or 4.5.          (b) If all or any part of any Partner’s Interest is Transferred in accordance with thisAgreement, the Capital Account of the transferor Partner attributable to the transferred Interestshall carry over to the transferee Partner, in accordance with Section 1.704-1(b)(2)(iv)(l) of theTreasury Regulations. However, if any such Transfer causes a termination of the Partnership underSection 708(b)(1)(B) of the Code, thus causing a liquidation of the Partnership (i) the Partnershipassets shall not be sold, liquidated or otherwise distributed (and no Partner shall have the rightto demand a sale, liquidation or distribution by reason of such liquidation), but instead theassets of the Partnership shall be deemed to have undergone the transaction described in Section1.708-1(b)(4) of the Treasury Regulations, and (ii) the Capital Account that carries over to thetransferee will be adjusted in accordance with Section 1.704-1(b)(2)(iv) of the TreasuryRegulations. The Capital Accounts of the Partners of the reconstituted Partnership shall bemaintained in accordance with the principles of this Section 7.2.          (c) Each item of Partnership income, gain, loss, deduction and credit attributable to aTransferred Interest, or other change in a Partner’s Interest to which Code Section 706(d) isapplicable, shall, for income tax purposes, be determined on a daily, monthly or other basis, asdetermined by the Management Committee using any permissible method under Code Section 706 and theTreasury Regulations thereunder; *provided*, *however*, that if such Transfer is effected on or priorto the 15th day of a calendar month, then such Transfer shall be deemed to have occurred on thelast day of the calendar month immediately prior to the calendar month in which such Transferoccurs, and if such Transfer is effected after the 15th day of a calendar month, such Transfershall be deemed to have occurred on the last day of the calendar month in which such Transferoccurs. The Management Committee may revise, alter or otherwise modify such methods ofdetermination as it may deem necessary, to the extent permitted or required by Code Section 706 andthe Treasury Regulations thereunder.          (d) If (i) a new or existing Partner contributes money or other property (other than ademinimis amount) to the Partnership as consideration for the receipt of aninterest in the Partnership greater than the interest owned by such Partner prior to suchcontribution, or (ii) there is a distribution of money or other property (other than a deminimis amount) by the Partnership to a retiring or continuing Partner as considerationfor the relinquishment of some or all of such Partner’s Interest, or (iii) upon theliquidation of the Partnership (under Section 708(b)(1)(B) of the Code or otherwise), then thevalue of the Partnership’s properties on its books shall be adjusted to reflect their fair marketvalue, as of the date of the distribution, contribution or
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liquidation of the Partnership, as the case may be (as determined by the Management Committee taking into consideration Code Section7701(g)), and the Capital Accounts of the Partners shall be adjusted to reflect the amount ofunrealized income, gain, loss or deduction inherent in the Partnership’s properties (to the extentnot previously reflected in the Partners’ Capital Accounts) which would be allocated among all thePartners under the terms of this Agreement, assuming that there were a taxable disposition of suchproperties immediately preceding such contribution of money or other property to the Partnership,or immediately preceding such distribution of money or other property by the Partnership, or uponthe liquidation of the Partnership, as the case may be, for such property’s fair market value as ofsuch time.          (e) The foregoing provisions, and any other provisions of this Agreement relating to themaintenance of Capital Accounts and the allocations of income, gain, loss, deductions and credits,are intended to comply with Section 1.704-1(b) of the Treasury Regulations, and shall beinterpreted and applied in a manner consistent with such regulations.     7.3 Accounting Method; Books and Records. The Management Committee or its designeeshall cause complete and correct books of account and records, reflecting all Partnershipoperations, to be prepared and maintained in accordance with GAAP consistently applied and aseparate set of books of account and records to be prepared and maintained in accordance with theprinciples established by FERC. Such books and records shall be kept at the principal office ofthe Partnership, or at such other place as the Management Committee may determine; *provided*,*however*, that all Partners shall be given notice of any change in the location of such books andrecords. Any Partner and any Representative shall have the right, at the Partner’s (or thedesignating Partner’s) expense, to examine, audit and make copies of the Partnership’s books andrecords, in person or by duly authorized agent or attorney, during normal business hours.     7.4 Reports; Financial Statements; Audits.          (a) The Management Committee or its designee shall cause the preparation and distribution toeach Partner of the following reports on the activities and financial position of the Partnership,which reports shall be prepared in accordance with GAAP:               (i) Within 45 days after the end of each month, (A) a balance sheet as of the end of the monthjust ended; (B) a detailed statement of Partnership income and expense for the month just ended,and (C) a statement of Partnership cash flow for the month just ended.               (ii) Within 45 days after the end of each of the first 3 calendar Quarters, (A) a balancesheet as of the end of such period, (B) a detailed statement of income or loss for the quarterlyperiod just ended, (C) a statement of Partnership cash flow for the quarterly period just ended,(D) a comparison of the quarterly period income or loss with the Budget for that period, (E) acomparison of the year-to-date
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results for that portion of the year just ended with (1) the resultsof the same period during the prior year, and (2) the Budget, and (F) a statement of each Partner’sCapital Account as at the end of such Quarter.               (iii) Within 60 days after the end of each fiscal year of the Partnership, (A) a balance sheetas of the end of such fiscal year, (B) a detailed statement of income or loss for such fiscal year,(C) a statement of Partnership cash flow for such fiscal year, (D) a comparison of actual tobudgeted income or loss, (E) a comparison of the fiscal year just ended with (1) the precedingfiscal year, and (2) the Budget, and (F) a statement of each Partner’s Capital Account as at theend of such year.          (b) Upon the request of any Partner, the Management Committee shall cause to be prepared anddelivered to such Partner or its Affiliates all of such additional financial statements, notesthereto and additional financial information not prepared pursuant to Section 7.4(a) above as maybe required in order for such Partner or Affiliate to comply with its reporting requirements under(i) the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder,(ii) the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgatedthereunder and (iii) any national securities exchange or automated quotation system, in each case,on a timely basis. All of such financial statements shall be prepared in accordance with GAAP.          (c) Unless otherwise agreed by the Management Committee, the Management Committee or itsdesignee shall cause an audit to be made of the Partnership’s year-end financial statements by anationally recognized independent accounting firm (the “Partnership Accountants”), andshall promptly furnish each Partner with copies of the auditor’s report and opinion thereon.     7.5 General Tax Matters.          (a) The Management Committee or its designee shall cause the Partnership Accountants toprepare on a timely basis all returns necessary for U.S. federal, state and local income taxpurposes pursuant to the Code, and all other tax returns and reports deemed necessary and requiredin the jurisdictions in which the Partnership does business, or to review such returns if they areprepared by the Partnership, and to prepare or review for the Partners on a timely basis theinformation necessary to determine estimated tax payments. Each Partner shall provide, as promptlyas feasible, such information as the Partnership Accountants may request in preparing such returns.The preparation or review of Partnership income tax returns or estimated tax information by thePartnership Accountants shall be undertaken at the Partnership’s expense. Drafts of federal andstate income tax returns shall be submitted to each Partner for review at least 30 days prior to their respective due dates (or 90 days prior totheir respective due dates if the Partnership has requested one or more extensions).          (b) As soon as possible after the close of each fiscal year of the Partnership, and in anyevent no later than May 1 of the next fiscal year, the
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Management Committee or its designee shall provide each Partner with a notice (the “Tax Information Notice”) containing suchinformation with respect to the Partnership’s operations during the preceding fiscal year as shallbe necessary for the preparation and filing of such Partner’s federal, state and local income taxreturns. Each Tax Information Notice shall set forth the material tax accounting principles andelections under the Code to be used or made by the Partnership with respect to such precedingfiscal year. Unless otherwise approved by the Management Committee, after the date of the TaxInformation Notice, no changes shall be made to the tax accounting principles and elections underthe Code set forth therein. The Partnership shall utilize the accrual method of accounting forfederal income tax purposes and shall make the election pursuant to Section 754 of the Code. ThePartnership shall make any other elections required or permitted to be made under the Code in suchmanner as the Management Committee shall determine. For the proper administration of thePartnership, the Partnership shall (i) adopt such conventions as it deems appropriate indetermining the amount of depreciation, amortization and cost recovery deductions; and (ii) amendthe provisions of this Agreement as appropriate to reflect the promulgation of Treasury Regulationsunder Section 704(b) or Section 704(c) of the Code. The Partnership may adopt such conventions,make such allocations and make such amendments to this Agreement as provided in the precedingsentence only if such conventions, allocations or amendments are consistent with the principles ofSection 704 of the Code. No Partner shall elect to be excluded from the application of theprovisions of Subchapter K of Chapter 1 of Subtitle A of the Code. No Partner, without the consentof the other Partner, shall take any action (including accepting contributions) which would byitself result in a change in the allocation of the Partnership’s liabilities for tax purposes.     7.6 Tax Matters Partner.          (a) The Williams Partner shall be the Tax Matters Partner (“TMP”) as defined inSection 6231(a)(7) of the Code. The TMP and the other Partner shall use their best efforts tocomply with the responsibilities outlined in Sections 6221 through 6233 of the Code (including anyTreasury Regulations promulgated thereunder) and in doing so shall incur no liability to any otherPartner.          (b) Subject to the requirements of Section 5.5 above, the TMP may settle any audit, extend anystatute of limitation, or file any protest, petition or pleading without the prior approval of theManagement Committee or any other Partner; *provided*, *however*, that any settlement that adverselyaffects the rights or obligations of any Partner or otherwise places any affirmative obligations onsuch Partner shall be subject to the advance written approval of such affected Partner.          (c) Any Partner may engage legal counsel, certified public accountants, or others on its ownbehalf at its sole cost and expense.     7.7 Use of Cash. The available funds of the Partnership may be deposited in suchchecking, savings, certificate of deposit, money market or similar accounts as may be designated bythe Management Committee with such signatories as the Management Committee may designate.Partnership cash may also be lent to the Williams Partner or
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an Affiliate of the Williams Partner as part of the The Williams Companies Inc. cash management program.     7.8 Property. Except as otherwise determined by the Management Committee, all assetsand property, whether real, personal, or mixed, tangible or intangible, including contractualrights, owned or possessed by the Partnership shall be held or possessed in the name of thePartnership or in the name of an appropriate nominee, and such assets, property, and rights shallbe deemed to be owned or possessed by the Partnership as an entity. No Partner, individually,shall have any separate ownership interest in such assets, property, or rights or any right torequest or require partition of the Partnership’s property. Each Partner’s Interest in thePartnership is personal property for all purposes.**8.****TRANSFERS OF PARTNERSHIP INTERESTS****.**     8.1 Restrictions on Transfer.          (a) No Partner shall, directly or indirectly, Transfer, mortgage, hypothecate or pledge all orany portion of such Partner’s Interest, other than in accordance with the provisions of thisAgreement or with the express prior written consent of the other Partner. Any Transfer of anInterest purported to be made in violation of this Agreement shall be void as against thePartnership and the other Partner.          (b) Notwithstanding anything to the contrary contained in this Agreement, in the event of (i)the enactment (or imminent enactment) of any legislation, (ii) the publication of any temporary orfinal Treasury Regulation, (iii) any ruling by the Internal Revenue Service or (iv) any judicialdecision that in any such case, in the opinion of counsel, would result in the taxation of thePartnership for federal income tax purposes as a corporation or would otherwise subject thePartnership to being taxed as an entity for federal income tax purposes, this Agreement shall bedeemed to impose such restrictions on the transfer of a Partner’s Interest as may be required, inthe opinion of counsel to the Partnership, to prevent the Partnership from being taxed as acorporation or otherwise being taxed as an entity for federal income tax purposes, and the Partnersthereafter shall amend this Agreement as necessary or appropriate to impose such restrictions.     8.2 Permitted Transfers . A Partner may, at any time, without obtaining the writtenconsent of any other Partner, Transfer all or any portion of such Partner’s Interest to anyAffiliate. Subject to the provisions of Section 8.4 below, such transferee shall become asubstitute Partner of the Partnership, to the extent of the Interest transferred.     8.3 Right of First Offer.          (a) If a Partner (the “Selling Partner”) desires to Transfer all or any portion of theSelling Partner’s Interest (the “Offered Interest”) to any Person other than
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an Affiliateof the Selling Partner, the Selling Partner shall deliver to each of the other Partners (the“Non-Selling Partners”) a good faith offer (a “Sale Offer”) which shall include aform of acquisition agreement that specifies the form and amount of consideration to be receivedand the other material terms on which the Selling Partner proposes to Transfer the OfferedInterest.          (b) Any Non-Selling Partner interested in purchasing all of the Offered Interest shall sonotify the Selling Partner by written notice (a “Purchase Notice”) delivered to the SellingPartner within 20 days after such Partner’s receipt of the Sale Offer.          (c) For a period of 60 days (the “Negotiation Period”) from the date of the SellingPartner’s receipt of the last Purchase Notice, the Selling Partner and any Non-Selling Partner thattimely delivered a Purchase Notice to the Selling Partner shall negotiate in good faith regardingthe purchase of the Offered Interest by such Non-Selling Partner.          (d) If the Selling Partner and such Non-Selling Partner enter into a definitive agreementwithin the Negotiation Period for the Transfer of the Offered Interest, then the Non-SellingPartner shall acquire the Offered Interest pursuant to the terms of such definitive agreement andthe closing of such purchase and sale shall take place within 90 days after the expiration of theNegotiation Period. The Offered Interest shall be sold by the Selling Partner and acquired by thepurchasing Partner free and clear of any and all Liens, claims, encumbrances or other rights ofthird parties. If more than one Non-Selling Partner delivers a Purchase Notice to the SellingPartner, each such Non-Selling Partner shall be entitled to acquire a pro rata portion of theOffered Interest determined by dividing such Non-Selling Partner’s Percentage Interest by theaggregate Percentage Interests of all of the Non-Selling Partners that timely delivered a PurchaseNotice.          (e) If (a) the Selling Partner and such Non-Selling Partner do not reach an agreement duringthe Negotiation Period regarding the Transfer of the Offered Interest to such Non-Selling Partner,(b) no Non-Selling Partner timely delivers a Purchase Notice to the Selling Partner, or (c) adefinitive agreement is timely entered into but is subsequently terminated prior to closing, thenthe Selling Partner shall have 120 days to consummate the Transfer of the Offered Interest to afinancially responsible third party; *provided, however*, the Selling Partner may not consummate anysuch Transfer to a third party unless (i) the acquisition consideration to be paid by such thirdparty is at least equal in value to the consideration set forth in the Sale Offer and (ii) theother terms and provisions of such sale are not materially more favorable to such third party thanthe terms and provisions contained in the Sale Offer. If the Selling Partner is unable toconsummate the Transfer of the Offered Interest to a third party within such 120 day period, thenthe terms of this Section 8.3 shall once again apply.
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     8.4 Conditions to Transfer.          (a) No Transfer of an Interest pursuant to Section 8.2 or 8.3 shall be effective as againstthe Partnership or any other Partner, and no such transferee shall become a substitute Partner,unless and until such assignee (i) executes and delivers to the Partnership and each other Partnera written consent to be bound by all of the provisions of this Agreement and to become a Partnerwith respect to the Interest acquired, together with such other instruments as the ManagementCommittee shall consider necessary or appropriate to effect the transferee’s admission to thePartnership; and (ii) pays to the Partnership all reasonable expenses, including reasonableattorneys’ fees, incurred by the Partnership in connection with such admission.          (b) Notwithstanding any other provision of this Agreement, no Transfer of an Interest may bemade without the approval of the Management Committee if such Transfer would (i) cause atermination of the Partnership under Code Section 708(b)(1)(B); (ii) result in a violation of theAct; or (iii) constitute a default under the Partnership’s agreements with its third party lenders,unless such lenders have consented in writing to such Transfer (so that it will not constitute adefault) or otherwise waived such default in writing in which cases no such Management Committeeapproval shall be required.     8.5 Specific Enforcement. Because of the unique relationship of the Partners in thePartnership and the unique value of their interests therein, in addition to any other remedies forbreach hereof, the provisions of this Agreement concerning Transfer of Interests shall bespecifically enforceable.**9.****ADDITIONAL PARTNERS****.**     Except as otherwise expressly provided herein, additional Partners may be admitted to thePartnership only with the approval of the Management Committee by Unanimous Vote.**10.****DISSOLUTION AND TERMINATION****.**     10.1 Unilateral Acts Prohibited. No Partner shall have the right to, and each Partneragrees not to (a) bring any action for partition with respect to any property of the Partnership,or (b) take any action the direct or indirect result of which is an Event of Withdrawal orotherwise to dissolve, withdraw from, terminate or liquidate the Partnership, except as expresslypermitted by this Agreement. If any Partner shall cause a dissolution and liquidation (for statelaw purposes) or a termination (under the Code) of the Partnership in breach of this Agreement(including by reason of an Event of Withdrawal or by decree of court based upon the misconduct of,or other breach of this Agreement by, such Partner) then, at the option of the non-defaultingPartner, either (i) the Partnership or the other Partner or its designee shall have an option topurchase the Interest of such defaulting Partner for a purchase price equal to 75% of the balancein such defaulting Partner’s Capital Account, in accordance with the procedures set forth inSection 10.4, or (ii) such defaulting Partner shall indemnify the other Partner in
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accordance with Section 14.2 below for any liability, loss, damage or expense, including without limitation adverse tax consequences, incurredby the non-defaulting Partner (or its partners) as a result of such breach.     10.2 Events of Dissolution. The Partnership shall dissolve upon the occurrence of theearliest of the following events (each, an “Event of Dissolution”):          (a) the sale of all or substantially all of the assets of the Partnership;          (b) the Unanimous Vote of the Management Committee to dissolve the Partnership;          (c) the entry of a final order by a court of competent jurisdiction decreeing a dissolution ofthe Partnership;          (d) the occurrence of an event which makes it unlawful for the business of the Partnership tobe carried on or for the Partners to carry it on in partnership; or          (e) the occurrence of an Event of Withdrawal, and the election by the remaining Partner not tocontinue the business of the Partnership.Notwithstanding anything to the contrary contained in this Agreement, a non-withdrawing Partner(upon or immediately prior to the effectiveness of an Event of Dissolution) may, in its discretion,instead of receiving a distribution of Partnership assets in accordance with its positive CapitalAccount take such actions as it deems necessary or advisable (including the admission of one ormore additional Partners at or immediately prior to the time that the Partnership is dissolved orthe other Partner’s Interest is purchased or liquidated), in order to avoid a termination of thePartnership as the result of such dissolution or the purchase or liquidation of any other Partner’sInterest.     10.3 Winding Up, Liquidation and Distribution of Assets.          (a) Liquidating Partner. Upon the occurrence of any Event of Dissolution described inSection 10.2, the Management Committee or its designee shall act as the “LiquidatingPartner” and shall immediately proceed to wind up the affairs of the Partnership and liquidateit in the manner prescribed by this Section.          (b) Winding Up and Liquidation. Except as otherwise provided herein, if thePartnership is dissolved and its affairs are to be wound-up, the Liquidating Partner shall:               (i) sell or otherwise liquidate all of the Partnership’s capital assets as promptly aspracticable (except to the extent the Liquidating Partner may determine to distribute any assets tothe Partners in kind);               (ii) allocate any Profit or Loss resulting from such sales to the Partners in accordance withthis Agreement;
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               (iii) discharge liabilities of the Partnership in the order of priority provided by law(including all costs relating to the dissolution, winding up, liquidation and distribution ofassets);               (iv) establish, in accordance with Section 1.704-1(b)(2)(ii)(b) of the Treasury Regulations,such reserves as may be reasonably necessary to provide for contingent liabilities or otherremaining liabilities of the Partnership; and               (v) distribute the remaining assets, subject to the provisions of Section 10.3(d) below, tothe Partners in accordance with and to the extent of the positive balance of each Partner’s capitalaccount as determined after the adjustments provided for in Section 10.3(c) below. Any suchdistributions to the Partners in respect of their capital accounts shall be made in accordance withthe time requirements set forth in Section 1.704-1(b)(2)(ii)(b)(2) of the Treasury Regulations. Inall events contemplated by this section, the Parachute Lateral, to the extent that such asset maystill be owned by the Partnership upon any event of winding up, liquidation, or distribution, shallbe distributed to the holder of the Interest held, as of the Effective Date, by the WilliamsPartner.          (c) In-Kind Distributions. If any assets of the Partnership are to be distributed inkind, the fair market value of such assets as of the date of dissolution shall be determined by theManagement Committee, and the Partners’ capital accounts shall be adjusted in the same manner andproportions as if the assets had been sold for such fair market value and the net proceeds of thesale had been distributed to the Partners in accordance with Article 4.          (d) Deficit Capital Accounts. Notwithstanding anything to the contrary in thisAgreement, upon a liquidation within the meaning of Section 1.704-1(b)(2)(ii)(g) of the TreasuryRegulations, if any Partner has a deficit Capital Account (after giving effect to allcontributions, distributions, allocations and other capital account adjustments for all taxableyears, including the year during which such liquidation occurs), such Partner shall be obligated tomake a contribution to the capital of the Partnership to restore the negative balance of suchPartner’s capital account within the time set forth in Section 1.704-1(b)(2)(ii)(b)(3) of theTreasury Regulations.          (e) Complete Return of Capital. The distribution of cash or property to the Partnersin accordance with the provisions of this Section 10.3 shall constitute a complete return to thePartners of their Capital Contributions and a complete distribution to the Partners of theirrespective Interests in the Partnership.          (f) Date of Termination. Upon completion of the winding up, liquidation anddistribution of the assets, the Liquidating Partner shall file or cause to be filed a Certificateof Cancellation of the Partnership’s Statement of Partnership Existence, and the Partnership shallbe deemed terminated.
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     10.4 Purchase Procedures.          (a) Whenever the Partnership or a Partner has an option pursuant to Section 10.1 to purchasethe Interest of a Partner that withdraws from the Partnership in breach of this Agreement, suchoption shall be exercisable in the following manner. For a period of 45 days after the Partnershipreceives notice of the withdrawal, the Partnership shall have the option to purchase all or anyportion of the Interest. The Partnership may exercise this option at the discretion of thenon-withdrawing Partner by written notice to the withdrawn Partner within such 45-day period. Ifthe Partnership does not exercise its right to purchase the entire Interest, then thenon-withdrawing Partner shall have the option to purchase all, but not less than all, of theInterest not purchased by the Partnership. The non-withdrawing Partner may exercise this option bywritten notice to the Partnership and the withdrawn Partner within 45 days after the expiration ofthe Partnership’s option period. No sale of a withdrawn Partner’s Interest shall be requiredhereunder unless the Partnership or the non-withdrawing Partner collectively elect within theirrespective option periods to purchase the entire Interest.          (b) The closing of any purchase and sale of an Interest pursuant to this Section 10.4 shalltake place within 90 days after the date the Partnership or the non-withdrawing Partner, as thecase may be, elect to exercise their option to purchase the entire Interest of the withdrawingPartner. Upon any election to purchase a withdrawing Partner’s Interest hereunder, the totalpurchase price of the Interest shall be payable at closing in cash or immediately available funds.The purchased Interest shall be sold by the withdrawing Partner and acquired by the purchasers freeand clear of any and all Liens, claims, encumbrances or other rights of third parties.**11.****OPERATION OF THE PARTNERSHIP****.**     11.1 Operator.          (a) Subject to this Article 11, the Williams Partner is hereby appointed as the operator ofthe Partnership (the “Operator”), and Williams Partner accepts such appointment and agreesto act in such capacity. The Operator shall be responsible for the day-to-day operation,maintenance and repair of the assets of the Partnership and the managerial and administrativeduties relating thereto. The Operator, in its sole discretion, may subcontract with anotherPerson, including an Affiliate, to perform the activities required to comply with itsresponsibilities as Operator hereunder; *provided*, any such subcontract shall not relieve theOperator of such responsibilities.          (b) In performing the services described in Section 11.1(a), the Operator shall perform same,or cause same to be performed, in a good faith manner, with such degree of care, diligence andskill as a reasonably prudent operator would exercise in comparable circumstances and involvingassets similar to the assets of the Partnership, and in compliance with applicable laws,regulations, contracts, leases, orders and other agreements to which the Partnership is a Party orby which the Partnership or its assets are bound.
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          (c) Notwithstanding any other term or condition of this Article 11 or any other provision ofthis Agreement, the Person serving as the Operator (including any successor Operator) may beremoved as Operator at any time upon the requisite approval of the Management Committee, suchremoval to be effective at such time as the Management Committee may specify. In addition, thePerson serving as the Operator may resign as Operator at any time, such resignation to be effective90 days after the receipt by the Management Committee of written notice from the Operator of suchresignation or at such other time as may be mutually agreed by the Operator and ManagementCommittee. Upon the determination by the Management Committee to remove a Person serving asOperator or the receipt of notice of termination from an Operator, the Management Committee shalldesignate a Person to serve as successor Operator, such succession to be effective concurrentlywith the effective time of the removal or resignation of the prior Operator of, if later, at thetime such Person is designated as successor Operator. If a Person serving as Operator is removedor resigns and as of the effective time of such removal or resignation a Person has not beenidentified to serve as the successor Operator commencing as of such effective time, the Person(s)designated by the Management Committee shall serve as interim Operator until a successor Operatoris identified and commences to serve as Operator.     11.2 Expenses. The Operator shall be reimbursed on a monthly basis, or such otherbasis as the Operator may determine, for (a) all direct and indirect expenses it incurs or paymentsit makes on behalf of the Partnership (including , but not limited to, severance salary, bonus,incentive compensation, employee benefits, and other amounts paid or payable to any Personincluding Affiliates of the Operator to perform services for the Partnership or for the Operator inthe discharge of its duties in such capacity), and (b) all other expenses allocable to thePartnership or otherwise incurred by the Operator in connection with operating the Partnership’sbusiness (including the Partnership’s allocable share of general and administrative costs andexpenses borne by the Operator and its Affiliates, as well as the Partnership’s liabilitiesattributable to the Corporation, including employee benefit and other liabilitieis of theCorporation, to any retiree, former employee or other Person). The Operator shall maintain orcause to be maintained accurate records of such costs and expenses, and upon written request theOperator shall permit a Partner or a Representative to inspect, or shall provide such requestingPartner or such requesting Representative with a copies of, such records. The Operator shalldetermine the expenses that are allocable to the Partnership. Reimbursements pursuant to thisSection 11.2 shall be in addition to any reimbursement to the Operator as a result ofindemnification pursuant to Section 14.1. The Operator shall make such determination in goodfaith.**12.****REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTNERS****.**     As of the Effective Date of this Agreement and until the dissolution of this Partnership, eachPartner hereby represents and warrants to the other Partners as follows:
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          (a) Organization and Qualification. It is a partnership, limited liability company orcorporation, as applicable, duly organized, validly existing, and in good standing under the lawsof the state of its formation or incorporation, and it has all requisite power and authority to ownits Interest and conduct its activities as such activities are currently conducted. It is dulyqualified to do business as a foreign partnership, limited liability company or corporation, asapplicable, and is in good standing in all jurisdictions in which the ownership of its Interest orthe nature of its activities makes such qualification necessary.          (b) Authority. It has all requisite partnership, limited liability company orcorporate, as applicable, power and authority to execute, deliver, and perform this Agreement, theTransaction Documents to which it is a party and any other agreement with the Partnership to whichit is or may hereafter become a party or be bound (an “Additional Agreement”), and toconsummate the transactions contemplated hereby and thereby. The execution, delivery, andperformance of this Agreement, the Transaction Documents to which it is a party and the AdditionalAgreements, and the consummation of the transactions contemplated hereby and thereby on its parthave been duly and validly authorized by all necessary partnership, limited liability company orcorporate action. This Agreement, the Transaction Documents to which it is a party and theAdditional Agreements have been duly and validly executed and delivered by it, and are its validand binding obligation, enforceable against it in accordance with their terms, except as may belimited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generallyor the availability of equitable remedies.          (c) No Conflict. The execution, delivery and performance by the Partner of thisAgreement, the Transaction Documents to which it is a party and the Additional Agreements do notand will not conflict with, result in a breach of or constitute a default under any contract(including, without limitation, any loan or lender agreement) to which the Partner or itsAffiliates is a party or by which the Party, its Affiliates or assets are bound.**13.****NOTICES****.**     All notices, elections, demands or other communications required or permitted to be made orgiven pursuant to this Agreement shall be in writing and shall be deemed given or made if deliveredby messenger or overnight courier, or mailed, certified first class mail, postage prepaid, returnreceipt requested, and addressed or sent to the Partners at their respective addresses as set forthon Exhibit 13. Such notice shall be effective, (i) if delivered by messenger or byovernight courier, upon actual receipt, or (ii) if mailed, upon the earlier of 3 days after depositin the mail and the date of delivery as shown by the return receipt therefor. Any Partner maychange its address by giving notice in writing to the Partnership and the other Partner of its newaddress. Any notice to a Partner shall also be sent to its Representative.
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**14.****INDEMNIFICATION****.**     14.1 Indemnification by the Partnership. The Partnership shall indemnify and holdharmless each Partner (including, if applicable, in its capacity as Operator), the Representativesand alternate Representatives of each Partner and the officers and other agents of the Partnership(each individually, a “Partnership Indemnitee”) from and against any and all losses,claims, demands, costs, damages, liabilities, expenses of any nature (including reasonableattorneys’ fees and disbursements), judgments, fines, settlements, and other amounts (collectively,“Indemnified Losses”) actually and reasonably incurred by such Partnership Indemnitee andarising from any threatened, pending or completed claims, demands, actions, suits or proceedings,whether civil, criminal, administrative or investigative or other, including any appeals, to whicha Partnership Indemnitee was or is a party or is threatened to be made a party, arising out of orincidental to the business of the Partnership or such Partnership Indemnitee’s status as a Partner,Representative or alternate Representative of a Partner or an officer or other agent of thePartnership; provided, however, that the Partnership shall not indemnify and hold harmless anyPartnership Indemnitee for any Indemnified Losses which are due to actual fraud or willfulmisconduct of such Partnership Indemnitee. The termination of any action, suit or proceeding byjudgment, order, settlement, conviction, or upon a plea of nolo contendere or itsequivalent shall not of itself create a presumption that indemnification is not available underthis Section 14.1. The obligation of the Partnership to indemnify any Partnership Indemnitee shallbe satisfied out of Partnership assets only, and if the assets of the Partnership are insufficientto satisfy its obligation to indemnify any Partnership Indemnitee, such Partnership Indemniteeshall not be entitled to contribution from any Partner. The indemnification provided by thisSection 14.1 shall inure solely to the benefit of the Partnership Indemnitee and his heirs,successors, assigns and administrators and shall not be deemed to create any rights for the benefitof any other Persons.     14.2 Indemnification by the Partners. Each Partner shall indemnify and hold harmlessthe Partnership, the other Partners (including, if applicable, in their capacity as Operator) andtheir respective Representatives and alternate Representatives and the officers and other agents ofthe Partnership (each individually, a “Partner Indemnitee”) for any and all IndemnifiedLosses actually and reasonably incurred by such Partner Indemnitee solely as a result of the actualfraud or willful misconduct of such Partner, its Representatives and alternate Representatives orany officer or other agent of the Partnership employed by such Partner or its Affiliates.Notwithstanding any other provision of this Agreement, no Partner and no Representative oralternate Representative of a Partner and no officer or other agent of the Partnership shall beliable to any other Partner or the Partnership with respect to any act performed or neglected to beperformed in a manner which such Person reasonably believed to be necessary or appropriate inconnection with the ordinary and proper conduct of the Partnership’s business or the preservationof its business and property, and consistent with the provisions of this Agreement.Notwithstanding anything herein to the contrary, the holder of the Interest held, as of the Effective Time, by the Williams Partner shall
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indemnify and hold harmless the Partnership from, or with respect to, any Indemnified Losses with respect to the Parachute Lateral.     14.3 Right of Partnership Indemnitee to Advances for Expenses. Reasonable expensesincurred by a Partnership Indemnitee in defending any claim, demand, action, suit or proceeding forwhich indemnification is provided pursuant to Section 14.1 shall, from time to time, be advanced bythe Partnership prior to the final disposition of such claim, demand, action, suit or proceedingupon receipt by the Partnership of an undertaking by or on behalf of such Partnership Indemnitee torepay such amounts if it is ultimately determined that such Partnership Indemnitee is not entitledto be indemnified as authorized in Section 14.1.     14.4 Defense of Action. Promptly after receipt by a Partnership Indemnitee or aPartner Indemnitee (either, an “Indemnified Party”) of notice of any pending or threatenedclaim, demand, action, suit, proceeding or investigation made or instituted by a Person other thananother Indemnified Party (a “Third Party Action”), such Indemnified Party shall, if aclaim in respect thereof is to be made by such Indemnified Party against a Person providingindemnification pursuant to Sections 14.1 or 14.2 (“Indemnifying Party”), give noticethereof to the Indemnifying Party. The Indemnifying Party, at its own expense, may elect to assumethe defense of any such Third Party Action through its own counsel on behalf of the IndemnifiedParty (with full right of subrogation to the Indemnified Party’s rights and defenses). TheIndemnified Party may employ separate counsel in any such Third Party Action and participate in thedefense thereof; but the fees and expenses of such counsel shall be at the expense of theIndemnified Party unless the Indemnified Party shall have been advised by its counsel that theremay be one or more legal defenses available to it which are different from or additional to thoseavailable to the Indemnifying Party (in which case the Indemnifying Party shall not have the rightto assume the defense of such Third Party Action on behalf of the Indemnified Party); provided,however, that the Indemnifying Party shall not, in connection with any one action or separate butsubstantially similar or related actions in the same jurisdiction arising out of the same generalallegations or circumstances, be liable for the reasonable fees and expenses of more than oneseparate firm of attorneys (in addition to any local counsel) for the Indemnified Parties, and suchfees shall be designated in writing by the Indemnified Parties. All fees and expenses for any suchseparate counsel shall be paid periodically as incurred. The Indemnifying Party shall not be liablefor any settlement of any such Third Party Action effected without its consent unless theIndemnifying Party shall elect in writing not to assume the defense thereof or fails to prosecutediligently such defense and fails after written notice from the Indemnified Party to promptlyremedy the same, in which case, the Indemnified Party without waiving any rights to indemnificationhereunder may defend such Third Party Action and enter into any good faith settlement thereofwithout the prior written consent from the Indemnifying Party. The Indemnifying Party shall not,without the prior written consent of the Indemnified Party, effect any settlement of any such ThirdParty Action unless such settlement includes an unconditional release of the Indemnified Party from all Indemnified Losses that are thesubject of such Third Party Action. The Partners shall cooperate in any defense or settlement ofany such Third
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Party Action and give each other reasonable access to all information relevant thereto. The Partners will similarly cooperate in the prosecution of any claim or lawsuit againstany third party. If, after the Indemnifying Party elects to assume the defense of a Third PartyAction, it is determined pursuant to the Dispute Resolution procedures described in Section 15.8that the Indemnified Party is not entitled to indemnification with respect thereto, theIndemnifying Party shall discontinue the defense thereof, and if any fees or expenses for separatecounsel to represent the Indemnified Party were paid by the Indemnifying Party, the IndemnifiedParty shall promptly reimburse the Indemnifying Party for the full amount thereof.**15.****MISCELLANEOUS****.**     15.1 Amendments. This Agreement may be amended only in writing by the ManagementCommittee by Unanimous Vote.     15.2 Binding and Entire Agreement. Subject to the restrictions on Transfers set forthherein, this Agreement shall inure to the benefit of, and be binding upon, the undersigned Partnersand their respective legal representatives, successors and assigns. This Agreement, the otherdocuments and agreements expressly contemplated herein and the Exhibits attached hereto constitutethe entire agreement of the Partners with respect to the subject matter hereof, and supersede allprior agreements or negotiations, whether written or oral.     15.3 Governing Law. This Agreement shall be interpreted and enforced in accordancewith the internal laws of the State of Delaware without reference to the conflicts of lawsprinciples thereof.     15.4 Effect of Inconsistencies with the Act. It is the express intention of thePartners and the Partnership that this Agreement shall be the sole source of agreement among them,and, except to the extent that a provision of this Agreement expressly incorporates federal incometax rules by reference to sections of the Code or Treasury Regulations or is expressly prohibitedor ineffective under the Act, this Agreement shall govern, even when inconsistent with, ordifferent than, the provisions of the Act or any other law or rule. In the event that the Act issubsequently amended or interpreted in such a way to make valid any provision of this Agreementthat was formerly invalid, such provision shall be considered to be valid from the effective dateof such interpretation or amendment. The duties and obligations imposed on the Partners as suchshall be those set forth in this Agreement, which is intended to govern the relationship among thePartnership and the Partners, notwithstanding any provision of the Act or common law to thecontrary.     15.5 Severability. If any provision of this Agreement, or the application thereof toany person, shall be invalid or unenforceable to any extent, the remainder of this Agreement, andthe application thereof to other persons or circumstances, shall not be impaired, and shall be enforced to the fullest extent permittedby law.
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     15.6 Waivers. The failure of any Partner or the Partnership to seek redress forviolation of or to insist upon the strict performance of any covenant or condition of thisAgreement shall not prevent a subsequent act, which would have originally constituted a violation,from having the effect of an original violation.     15.7 Rights and Remedies Cumulative. The rights and remedies provided by thisAgreement are cumulative and the use of any one right or remedy by any Partner or the Partnershipshall not preclude or waive the right to use any or all other remedies. Said rights and remediesare given in addition to any other rights the parties may have by law, statute, ordinance, orotherwise.     15.8 Dispute Resolution.          (a) Scope. Any dispute arising out of or relating to this Agreement shall be resolvedin accordance with the procedures specified in this Section 15.8, which shall be the sole andexclusive procedures for the resolution of any such disputes.          (b) Senior Party Negotiation. The Partners shall attempt in good faith to resolve anydispute arising out of or relating to this Agreement promptly by negotiation between managementrepresentatives who have authority to settle the controversy and who are at least one level abovethe individuals with direct responsibility for administration of this Agreement and who have beenunsuccessfully involved with the dispute up to this point. Any Partner may give the other Partnerwritten notice of any dispute not resolved in the normal course of business (“Notice ofDispute”). Within 20 days after delivery of the Notice of Dispute, the receiving Partner shallsubmit to the other a written response. The notice and the response shall include (a) a statementof each Partner’s position and a summary of arguments supporting that position, and (b) the nameand title of the officer or executive officer who will represent that Partner and of any otherindividual who will accompany such officer or executive officer. Within 20 days after delivery ofthe disputing Partner’s Notice of Dispute, the representatives of both Partner shall meet at amutually acceptable time and place, and thereafter as often as they reasonably deem necessary, toattempt to resolve the dispute. All negotiations pursuant to this Section 15.8(b) are confidentialand shall be treated as compromise and settlement negotiations for purposes of applicable rules ofevidence.          (c) Litigation. If the dispute has not been resolved by non-binding means as providedin Section 15.8(b) within 20 days of the initial meeting of the Partners’ representatives, eitherPartner may initiate litigation; provided, however, that if one Partner has requested the other toparticipate in a non-binding procedure and the other has failed to participate, the requestingPartner may initiate litigation before expiration of the above period.          (d) Sole Procedures. The procedures specified in this Section 15.8 shall be the soleand exclusive procedures for the resolution of disputes between the parties arising out of orrelating to this Agreement. Each party is required to continue to perform its obligations underthis Agreement pending final resolution of any dispute
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arising out of or relating to this Agreement, unless to do so would be impossible or impracticable under the circumstances.     15.9 Counterparts. This Agreement may be executed in one instrument, signed by allparties, or in counterparts, in which case all such counterparts shall constitute one and the sameinstrument.     15.10 Section Headings. The section headings in this Agreement are for convenience ofreference only and shall not be deemed to alter or affect the interpretation of any provisionhereof.     15.11 Construction. Whenever the singular number is used in this Agreement and whenrequired by the context, the same shall include the plural and *vice versa*, and the masculine gendershall include the feminine and neuter genders and *vice versa*. An accounting term not otherwisedefined in this Agreement has the meaning assigned to it in accordance with GAAP. The word“including” means “including without limitation” and “or” means “and/or”, unless (in either case)the context clearly requires otherwise.     15.12 Brokers. Each Partner represents and warrants to the others that there are noclaims for commissions or finder’s or similar fees as of the date hereof in connection with thetransactions covered by this Agreement insofar as such claims shall be based on arrangements oragreements made by or on such Partner’s behalf, and each Partner hereby agrees to indemnify andhold harmless the Partnership and the other Partners from and against all liabilities, costs,damages and expenses from any such claims.     15.13 Further Assurances. The Partners shall provide to each other such informationwith respect to the transactions contemplated hereby as may be reasonably requested and shallexecute and deliver to each other such further documents and take such further action as may bereasonably requested by any Partner to document, complete or give full effect to the terms andprovisions of this Agreement and the transactions contemplated herein.     15.14 Waiver of Certain Damages. Each of the Partners (individually, and on behalf ofthe Partnership) hereby waives any right to recover any damages, including consequential orpunitive damages, in excess of actual damages from any other Partner or from the Partnership inconnection with a default under this Agreement.     15.15 Certificates of Interest. The Interests of the Partners in the Partnership maybe represented by Certificates (“Certificates”), which certify the Percentage Interest heldby such Partner. Subject to the laws of Delaware and the terms of this Agreement, the Interests in the Partnership shallbe transferable only upon the books of the Partnership by the holders thereof, upon surrender andcancellation of Certificates for such Interest transferred, with a duly executed assignment andpower of transfer endorsed thereon or attached thereto, and with such proof of the authenticity ofthe signature to such assignment and power of transfer as the Partnership or its agents reasonablymay require. All transfers and assignments shall be subject to the provisions of Article 8 aboveand to all other provisions of this Agreement. The Partnership may
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issue a new or replacement Certificate in place of any Certificate previously issued by it and satisfactorily alleged to havebeen lost, stolen or destroyed.     15.16 No Third-Party Beneficiaries. Except as otherwise expressly provided herein,the Partners intend and agree that no Person shall be a third party beneficiary of this Agreement.Any agreement to make any contribution or to otherwise pay any amount and any assumption ofliability, express or implied, contained in this Agreement, shall be only for the benefit of thePartners and their respective permitted successors and assigns, and such agreements and assumptionsshall not inure to the benefit of the obligees under any Partnership Indebtedness or to any otherPerson.
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     EXECUTED effective as of the Effective Date.     **WILLIAMS PARTNER**:  WGPC HOLDINGS LLC