Document:

exv10w7

Exhibit 10.7

Pursuant to Rule 406 of the Securities Act of 1933, as amended, confidential information
(indicated as [***]) has been omitted and has been filed separately with the Securities and
Exchange Commission pursuant to a Confidential Treatment Application filed with the Commission.

 

AMENDED AND RESTATED

GAS GATHERING, PROCESSING, DEHYDRATING

AND TREATING AGREEMENT

Dated As Of

August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

 

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	SECTION	 	TITLE	 	PAGE	 
	1.	 	DEDICATIONS, SERVICES AND FEES
	 	 	1	 
	 
	2.	 	SERVICE OPTIONS
	 	 	16	 
	 
	3.	 	INSTALLATION OF CUSTODY TRANSFER METERS AND ELECTRONIC FLOW MEASUREMENT
	 	 	18	 
	 
	4.	 	STATEMENTS AND PAYMENT
	 	 	19	 
	 
	5.	 	TERM
	 	 	21	 
	 
	6.	 	EXHIBITS
	 	 	21	 
	 
	7.	 	FACILITIES
	 	 	21	 
	 
	8.	 	ENTIRE AGREEMENT
	 	 	23	 
	 	 	 
	 	 	 	 
	EXHIBITS:
	 	 	 
	 	 	 	 
	EXHIBIT A	 	STANDARD TERMS AND CONDITIONS
	 	 	 	 
	 
	EXHIBIT B	 	AREA OF INTEREST
	 	 	 	 
	 
	EXHIBIT C	 	RECEIPT POINTS
	 	 	 	 
	 
	EXHIBIT D	 	DELIVERY POINTS
	 	 	 	 
	 
	EXHIBIT E	 	FEES AND FUEL
	 	 	 	 
	 
	EXHIBIT F	 	CALCULATION OF SHIPPER’S GROSS BASIC PROCESSING PLANT PRODUCTS
	 	 	 	 
	 
	EXHIBIT G	 	CALCULATION OF SHIPPER’S GROSS CRYOGENIC PROCESSING PLANT PRODUCTS
	 	 	 	 
	 
	EXHIBIT H	 	PLANTS MDQs AND CRYOGENIC PROCESSING MDQs
	 	 	 	 
	 
	EXHIBIT I	 	AGREEMENTS WITH RMT FIRM CUSTOMERS
	 	 	 	 
	 
	EXHIBIT J	 	CO2 LIMITS
	 	 	 	 
	 
	EXHIBIT K	 	FIELD GATHERING AREA MDQs AND MONTHLY AVERAGE RECEIPT POINT PRESSURE LIMITS
	 	 	 	 
	 
	EXHIBIT L	 	EXCEPTED GAS
	 	 	 	 
	 
	EXHIBIT M	 	SAMPLE CALCULATIONS OF FEE ADJUSTMENT
	 	 	 	 

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

PAGE 1

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

     THIS AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT
(“Agreement”) is made and entered into by and between Williams Field Services Company, LLC,
(“Williams”), Williams Production RMT Company LLC (“RMT”), Williams Production Ryan Gulch LLC
(“WPRG”) (WPRG and RMT collectively are “Shipper”), and WPX Energy Marketing, LLC (“WPX”) (each or
all of Williams, Shipper, and WPX may be referred to herein as “Party” or “Parties”) effective as
of the 1st day of August, 2011 (the “Effective Date”) to amend and restate that Gas Gathering,
Processing, Dehydrating and Treating Agreement between Williams and Shipper (“Original Agreement”)
dated November 1, 2010 (“Original Effective Date”). The Standard Terms and Conditions set forth on
Exhibit A are incorporated into this Agreement as if set forth at length herein.

RECITALS

	A.	 	Shipper and Williams entered into the Original Agreement and now desire to add provisions
regarding the Cryogenic Processing of Shipper’s Gas to the Original Agreement.

	B.	 	Under this Agreement, when Williams provides Cryogenic Processing services to Shipper’s Gas
at the Echo Springs Plant, Shipper may have transferred title to such Gas to WPX at the CIG
receipt point upstream of the Echo Springs Plant.

	C.	 	Because, under the aforesaid circumstances, WPX will hold title to Shipper’s Gas, WPX,
Williams and Shipper desire that WPX enter into this Agreement.
	 
	 	 	NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the
Parties agree as follows:

	1.	 	DEDICATIONS, SERVICES AND FEES.

	 	1.1	 	Dedications. The dedications and commitments made by Shipper and Shipper’s Affiliates
under this Agreement are a covenant running with the land. To give the public notice of
the existence of this Agreement and the dedications hereunder, Shipper shall execute,
acknowledge and deliver to Williams, at Williams’ request, a fully recordable memorandum of
this Agreement.

	 	(a)	 	Shipper’s Dedication for Gathering, Dehydrating, Treating, Basic
Processing. Shipper dedicates to Williams all of Shipper’s Gas for the life of
Shipper’s leases from which Shipper’s Gas is produced (plus the Gas subject to the
agreements between Shipper and RMT Firm Customers that are listed on Exhibit I, but
only for the respective term(s) of those agreements) for Williams to provide
Gathering, Dehydrating, Treating, Basic Processing, and all other services
encompassed by the Fee-Types on a Guaranteed Capacity basis. Shipper warrants that
it has the authority to make such dedications and that, excluding the Excepted Gas,
Williams will be the exclusive provider to Shipper of Gathering, Dehydrating,
Treating and Basic Processing services within the Area of Interest.
	 
	 	(b)	 	Shipper’s Dedication for Cryogenic Processing. Shipper dedicates to
Williams all of Shipper’s Gas for the life of Shipper’s leases from which Shipper’s
Gas is produced for Williams to provide Cryogenic Processing service and Shipper will
provide the first 450,000 Mcf/Day of Shipper’s Gas to Williams for Cryogenic
Processing. Although the Parties anticipate that WPX will take title to such
Shipper’s Gas as is Cryogenically Processed at the Echo Springs Plant, Shipper and
WPX each hereby represent and warrant that such Gas will remain dedicated to Williams
hereunder for Cryogenic Processing service. Shipper warrants that it has the
authority to make 

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

PAGE 2

	 	 	 	such dedication and that, excluding the Excepted Gas, Williams will
be the exclusive provider to Shipper of Cryogenic Processing services for Shipper’s
Gas.

	 
	 	(c)	 	Excepted Gas. Shipper’s Gas that is subject to existing dedications to
third parties pursuant to the agreements listed in Exhibit L (“Excepted Gas”) is
excepted from the dedications in (a) above, and with respect to (b) above is
excepted after Shipper has provided the first 450,000 Mcf/Day of Shipper’s Gas to
Williams for Cryogenic Processing, provided that, as to both (a) and (b), Shipper:
(i) shall not expand the geographic or geologic area of any such existing
dedication, and (ii) shall not increase any volume commitment(s) beyond increases
that were required as of each such agreement’s respective effective date. Provided
further that any services not provided for the Excepted Gas under such existing
dedications will be subject to the dedications herein and such services will be
provided by Williams. Provided further that as to the Excepted Gas subject to the
Xcel Agreements referred to on Exhibit L, if WPX (i) delivers volumes greater than
the firm commitments in the Xcel Agreement(s) as of the effective date(s) (“Excess
Xcel Volumes”), or (ii) following termination of the Xcel Agreement(s), renews any
of the Xcel Agreement(s) or the arrangements under those Agreements (all volumes
delivered under the renewal and/or new agreement(s) are the “New Xcel Volumes”),
then Shipper shall pay the Basic Processing and Treating fee on the Excess Xcel
Volumes and New Xcel Volumes, as applicable. Provided further that when any of
such existing dedications expire, terminate, or become subject to an opportunity to
terminate, Shipper shall give Williams thirty-six (36) months written notice prior
to such expiration or termination and Williams shall then have the option to provide
Gathering, Dehydrating, Treating and Basic Processing or Cryogenic Processing
services for the Excepted Gas under this Agreement, which it may exercise by
providing Shipper written notice thereof within ninety (90) Days after Williams
receives such written notice from Shipper.
	 
	 	(d)	 	Dedication Exclusions Relating to Third Party Operated Wells. The Parties
recognize that from time-to-time Shipper or Shipper’s Affiliates may own working
interests in wells operated by third parties, which wells are subject to leases that
are dedicated to Williams for services under this Agreement. Where a third party
operator has dedicated its Gas to a party other than Williams for the services
provided under this Agreement, Shipper or Shipper’s Affiliates shall have the right
to flow Shipper’s Gas to such third party service provider notwithstanding the
dedications Shipper has made to Williams under this Agreement. However, on no less
than a semi-annual basis the Parties shall jointly review all such instances and
determine the advisability of split connecting such wells. Should the Parties agree
in good faith that a split connection is warranted, Shipper shall work with such
third party operator(s) to effect the split connection of such well(s).
	 
	 	 	 	Further, for third party operated wells in which Shipper or Shipper’s Affiliates own
working interests, if Williams releases a third party operator from its dedication
to Williams for those services that Williams also provides Shipper or Shipper’s
Affiliates under this Agreement, then upon such release to a third party the Parties
shall jointly review and determine the advisability of Williams likewise providing
Shipper or Shipper’s Affiliates an equivalent release from its dedication to
Williams hereunder, provided that until such review Shipper or Shipper’s Affiliate
will have the right to flow Shipper’s Gas to the service provider for such third
party operator.
	 
	 	 	 	It is not the Parties’ intent that this section 1.1(d) result in a substantial
release of Shipper’s Gas from the dedications under this Agreement.

	 	1.2	 	Williams’ Services. Williams will provide, with respect to all of Shipper’s
Gas, up to the applicable MDQ, Gathering, Dehydrating, Treating, Basic Processing,
Cryogenic Processing, and all other services encompassed by the Fee-Types shown on Exhibit
E on a Guaranteed Capacity basis. Such services do not include those services third
parties are obligated to provide to Shipper for Excepted Gas pursuant to the agreements
listed in Exhibit L.

	 	1.3	 	Williams’ Gathering Services. Williams shall Gather on a Guaranteed Capacity
basis that quantity of Shipper’s Gas, subject to the provisions set forth herein, which is
necessary to fulfill Shipper’s

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

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	 	 	 	Confirmed Nominations and Shipper’s commitment to provide
Gathering Fuel, Basic Processing Plant Fuel, Cryogenic Processing Plant Fuel, and Shrink,
up to the applicable MDQ.
	 
	 	1.4	 	Williams’ Dehydrating Service. Williams shall Dehydrate Shipper’s Gas to
reduce its water vapor content to the most restrictive quality specification for water
vapor content at the Delivery Point(s) as of the Original Effective Date, it being
understood that Shipper’s Gas at the Receipt Point(s) may have a water vapor content that
exceeds the most restrictive quality specification for water vapor content required from
time to time by the Interconnecting Pipeline(s). The fee for such Dehydrating is
incorporated into the applicable Fee-Type shown on Exhibit E. If the most restrictive
quality specification for water vapor content of the Interconnecting Pipeline(s) should
ever be reduced and Williams’ existing facilities cannot meet such specification, Williams
may refuse to accept Shipper’s Gas until such time as Expansion facilities are installed,
pursuant to Section 1.16, to meet the reduced specification, provided that Williams will
make commercially reasonable efforts to Dehydrate as much of Shipper’s Gas as feasible
while continuing to meet the Interconnecting Pipeline(s)’ quality specifications.
	 
	 	1.5	 	Williams’ Treating Service. Williams shall Treat Shipper’s Gas to reduce its
CO2 content to no more than two percent (2%) by volume at the Delivery Point(s),
provided the CO2 content of Shipper’s Gas does not exceed the limits set out in
Exhibit J, it being understood that Shipper’s Gas at the Receipt Point(s) may have a
CO2 content that exceeds the most restrictive quality specification for
CO2 content required from time to time by the Interconnecting Pipeline(s). The
fee for all Treating is incorporated into the Basic Processing and Treating Fee-Type shown
on Exhibit E and such fees shall include all Treating whether performed to meet the
requirements in this Section 1.5 or performed to prepare Shipper’s Gas for Cryogenic
Processing. In no event, however, is Williams obligated to accept deliveries of Shipper’s
Gas at a given Receipt Point upstream of the inlet of a particular Williams Treater if the
CO2 content of that Gas causes the applicable weighted average CO2
content limit set forth in Exhibit J to be exceeded. If the most restrictive quality
specification for CO2 content of the Interconnecting Pipeline(s) should ever be
reduced and Williams’ existing facilities cannot meet such specification, then Williams may
refuse to accept Shipper’s Gas until such time as Expansion facilities are installed,
pursuant to Section 1.16, to meet the reduced specifications, provided that Williams will
make commercially reasonable efforts to Treat as much of Shipper’s Gas as feasible while
continuing to meet the Interconnecting Pipeline(s)’ quality specifications.
	 
	 	1.6	 	Williams’ Basic Processing Service. Williams shall provide Basic Processing of
Shipper’s Gas. Shipper shall be entitled to 100% of the gross Plant Products recovered
from Shipper’s Gas and shall be responsible for 100% of the Shrink, Basic Processing Plant
Fuel and Plant Power attributable to the gross Plant Products recovered from Shipper’s Gas.
Shipper’s gross Plant Products shall be determined in accordance with Exhibit F.
Williams, or its designee, shall deliver Shipper’s Plant Products recovered through Basic
Processing to one or more of the Basic Processing Plant Product Delivery Points listed on
Exhibit D. If Shipper does not arrange for removal of Shipper’s Plant Products from the
Basic Processing Plant Product Delivery Points listed on Exhibit D within a reasonable
amount of time, then Williams may dispose of Shipper’s Plant Products, at its sole
discretion, for the account of Shipper minus Williams’ actual disposal costs and Williams
shall not be liable to Shipper for any interruption in service(s) that may result from
Shipper’s non-removal of Shipper’s Plant Products.
	 
	 	1.7	 	Temporary Release of Shipper’s Gas. Any time Williams is unable to provide
Gathering, Dehydrating, Treating, or Basic Processing for a volume of Shipper’s Gas for
reasons of Force Majeure or maintenance and such curtailment is for a period of less than
twelve (12) Months, the volume of Shipper’s Gas that is curtailed shall be temporarily
released from Shipper’s dedication for Gathering, Dehydrating, Treating, or Basic
Processing, but not from Shipper’s dedications for other services Williams can provide,
until the later of: (a) the date provided by Williams as the date on which Williams expects
to be able to provide Gathering, Dehydrating, Treating, or Basic Processing for Shipper’s
curtailed Gas, or (b) the fifth (5th) business day following the date Williams
notifies Shipper that it is able to provide Gathering, Dehydrating, Treating, or Basic
Processing for Shipper’s curtailed Gas.

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

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	 	1.8	 	Williams’ Cryogenic Processing Service. Williams shall Cryogenically Process
Shipper’s Gas for volumes up to the Cryogenic Processing MDQ (as shown on Exhibit H) on a
Guaranteed Capacity basis and for volumes that Shipper delivers over the Cryogenic
Processing MDQ on a Non-Guaranteed
Capacity basis. Shipper shall deliver, and Williams shall receive, Shipper’s Gas for
Cryogenic Processing in the following priority: first from the Ryan Gulch Custody Meter
and second from the Starkey Gulch Custody Meter. Williams shall use commercially
reasonable efforts to upgrade the existing inlet meter at the Willow Creek Plant to be in
accordance with the methods and standards that have been approved by the American
Petroleum Institute (“API”) for custody transfer measurement standards within ten (10)
Months of executing a contract to Cryogenically Process third party Gas at the Willow
Creek Plant on a Guaranteed Capacity basis. Until Williams upgrades such meter, Shipper’s
Gas will be deemed to be the last Gas bypassed of all the Gas entering the Willow Creek
Plant.

	 	(a)	 	Cryogenic Processing Service Before January 1, 2013.
	 
	 	 	 	(i) At the Willow Creek Plant. For Cryogenic Processing Service at the Willow
Creek Plant through December 31, 2012, Williams, or its designee, shall deliver
Shipper’s Cryogenic Processing Plant Products recovered from Shipper’s Gas to one or
more of the Willow Creek Cryogenic Processing Plant Product Delivery Points listed
on Exhibit D. If Shipper does not arrange for removal of Shipper’s Cryogenic
Processing Plant Products within a reasonable amount of time, then Williams may
dispose of Shipper’s Cryogenic Processing Plant Products, at its sole discretion,
for the account of Shipper minus Williams’ actual disposal costs and Williams shall
not be liable to Shipper for any interruption in service(s) that may result. In
addition, the following shall apply:

(A) Fees. Shipper shall pay Williams a Cryogenic Processing Fee set forth on
Exhibit E on the volume of Shipper’s Gas measured at the Ryan Gulch Custody
Meter and the Starkey Gulch Custody Meter, less Bypassed Shipper’s Gas.

(B) Plant Product Sharing. Shipper and Williams shall share Cryogenic
Processing Plant Products as set forth on Exhibit E.

(C) Recoveries. Shipper’s Cryogenic Processing Plant Product recoveries shall be
based on the actual recoveries at the Willow Creek Plant.

(D) Determination of Gas Composition. Shipper’s gross Cryogenic Processing
Plant Products shall be determined in accordance with Exhibit G using the
composition of Shipper’s Gas as determined by the component analysis at the Ryan
Gulch Custody Meter or the Starkey Gulch Custody Meter, as applicable.

(E) Plant Fuel and Shrink. In addition to paying its pro rata share of any Plant
Power used in the Cryogenic Processing of Shipper’s Gas, Shipper shall
physically provide, and Williams shall physically deduct from Shipper’s Gas,
100% of the Shrink, Cryogenic Processing Plant Fuel attributable to the gross
Cryogenic Processing Plant Products extracted from Shipper’s Gas at the Willow
Creek Plant.

	 	 	 	(ii) At the Echo Springs Plant. Williams may, at Williams’ option, provide
Cryogenic Processing service for up to [***] Mcf per Day of Shipper’s Gas at the
Echo Springs Plant. For Cryogenic Processing Service at the Echo Springs Plant
through December 31, 2012 the following shall apply:
	 
	 	 	 	For volumes of Shipper’s Gas over Shipper’s Cryogenic Processing MDQ, the Echo
Springs Plant capacity will be Non-Guaranteed Capacity and Shipper’s Gas will be
second in priority for Cryogenic Processing capacity after any third parties who
have agreements for Guaranteed Capacity at the Echo Springs Plant. Anytime that
Williams Cryogenically Processes Shipper’s

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

PAGE 5

	 	 	 	Gas at the Echo Springs Plant the Parties
anticipate that WPX will hold title to the Gas from the CIG receipt point through
the Cryogenic Processing at the Echo Springs Plant.
	 
	 	 	 	Each time that Williams Cryogenically Processes Shipper’s Gas at the Echo Springs
Plant: (a) WPX shall be responsible for obtaining and paying for transportation on
CIG that enables WPX to transport Gas from the CIG Roan Cliffs receipt point to the
inlet of the Echo Springs Plant; and (b) WPX shall make commercially reasonable
efforts to Minimize Dilution.
	 
	 	 	 	Williams, or its designee, shall deliver WPX’s Cryogenic Processing Plant Products
recovered from Shipper’s Gas at the outlet of the Echo Springs Plant to the Echo
Springs Plant Cryogenic Processing Plant Product Delivery Points listed on Exhibit
D. If WPX does not arrange for removal of WPX’s Cryogenic Processing Plant Products
within a reasonable amount of time, then Williams may dispose of WPX’s Cryogenic
Processing Plant Products, at its sole discretion, for the account of WPX minus
Williams’ actual disposal costs and Williams shall not be liable to WPX or to
Shipper for any interruption in service(s) that may result.
	 
	 	 	 	In addition, the following shall apply:

	 	(A)	 	Displaced Volumes. For Displaced Volumes the following shall apply:

(1) Fees. WPX shall pay Williams the Cryogenic Processing Fee set forth on
Exhibit E per Mcf of Displaced Volumes measured at the inlet of the Echo
Springs Plant.

(2) Plant Product Sharing. WPX and Williams shall share Cryogenic Processing
Plant Products as set forth on Exhibit E.

(3) Recoveries. WPX’s Cryogenic Processing Plant Product recoveries shall
be based on the actual recovery factors at the Willow Creek Plant as if
Shipper’s Gas were Cryogenically Processed at the Willow Creek Plant.

(4) Determination of Gas Composition. WPX’s gross Cryogenic Processing
Plant Products shall be determined on a Daily basis in accordance with
Exhibit G and the Daily composition of Shipper’s Gas shall be determined by
the component analysis at (i) CIG’s Roan Cliff receipt point during Days
when WPX Minimizes Dilution or (ii) at the inlet of the Echo Springs Plant
during other Days.

(5) Plant Fuel and Shrink. In addition to paying its pro rata share of any
Plant Power used in the Cryogenic Processing of Shipper’s Gas, WPX shall
physically provide, and Williams shall physically deduct from Shipper’s Gas,
100% of the Shrink, Cryogenic Processing Plant Fuel attributable to the
gross Cryogenic Processing Plant Products extracted from Shipper’s Gas as if
Shipper’s Gas were Cryogenically Processed at the Willow Creek Plant.

	 	(B)	 	Non-Displaced Volumes. For non-Displaced Volumes the following shall
apply:

(1) Fees. WPX shall pay the Cryogenic Processing fee set forth on Exhibit
Eper MMBtu measured at the inlet to the Echo Springs Plant for Gas that is
produced as Shipper’s Gas, sold by Shipper to WPX for transport on CIG to
the Echo Springs Plant, and is not Displaced Volume.

(2) Cryogenic Processing Plant Products. Cryogenic Processing Plant
Products shall be allocated as set forth on Exhibit E.

(3) Recoveries. WPX’s Cryogenic Processing Plant Product recoveries shall
be based on the actual recoveries at the Echo Springs Plant.

 

 

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PAGE 6

(4) Determination of Gas Composition. WPX’s gross Cryogenic Processing
Plant Products shall be determined on a Daily basis in accordance with
Exhibit G and the Daily composition of Shipper’s Gas shall be determined by
the component analysis at (i) CIG’s
Roan Cliff receipt point during Days when WPX Minimizes Dilution or (ii) at
the inlet of the Echo Springs Plant during other Days.

(5) Plant Fuel and Shrink. In addition to paying its pro rata share of any
Plant Power used in the Cryogenic Processing of Shipper’s Gas, WPX shall
physically provide, and Williams shall physically deduct from Shipper’s Gas,
100% of the Shrink, Cryogenic Processing Plant Fuel attributable to the
gross Cryogenic Processing Plant Products extracted from Shipper’s Gas at
the Echo Springs Plant.

	 	(b)	 	Cryogenic Processing Service January 1, 2013 and Thereafter. For Cryogenic
Processing Service January 1, 2013 and thereafter, the following shall apply:
	 
	 	 	 	(i) At the Willow Creek Plant. Williams, or its designee, shall deliver Shipper’s
Cryogenic Processing Plant Products recovered from Shipper’s Gas to one or more of
the Cryogenic Processing Plant Product Delivery Points listed on Exhibit D. If
Shipper does not arrange for removal of Shipper’s Cryogenic Processing Plant
Products within a reasonable amount of time, then Williams may dispose of Shipper’s
Cryogenic Processing Plant Products, at its sole discretion, for the account of
Shipper minus Williams’ actual disposal costs and Williams shall not be liable to
Shipper for any interruption in service(s) that may result.
	 
	 	 	 	In addition for Cryogenic Processing at the Willow Creek Plant the following shall
apply:

(A) Fees. Shipper shall pay Williams the Cryogenic Processing Fee set forth on
Exhibit E on the volume of Shipper’s Gas measured at the inlet of the Starkey
Gulch Custody Meter and the Ryan Gulch Custody Meter, less Bypassed Shipper’s
Gas. The Cryogenic Processing fee shall be adjusted annually according to
Section 1.12 beginning July 2014.

(B) Net Liquid Margin Sharing. Shipper shall pay Williams the percentages of
the Net Liquid Margin set forth on Exhibit E. If Williams estimates in good
faith that even after rejecting ethane the Net Liquid Margin is expected to be
negative for any Month, Williams shall operate the Willow Creek Plant to
minimize Plant Product extraction as much as feasible without generating Gas
that does not meet the specifications of the Interconnecting Pipeline(s).

(C) Recoveries. Shipper’s Cryogenic Processing Plant Product recoveries shall
be based on the actual recoveries at the Willow Creek Plant.

(D) Determination of Gas Composition. Shipper’s gross Cryogenic Processing
Plant Products shall be determined in accordance with Exhibit G and the
composition of Shipper’s Gas shall be determined by component analysis located
at the Starkey Gulch Custody Meter and the Ryan Gulch Custody Meter, as
applicable.

(E) Plant Fuel and Shrink. In addition to paying its pro rata share of any Plant
Power used in the Cryogenic Processing of Shipper’s Gas, Shipper shall
physically provide, and Williams shall physically deduct from Shipper’s Gas,
100% of the Shrink, Cryogenic Processing Plant Fuel attributable to the gross
Cryogenic Processing Plant Products extracted from Shipper’s Gas at the Willow
Creek Plant.

	 	 	 	(ii) At the Echo Springs Plant. Williams may, at Williams’ option, provide Cryogenic
Processing service for up to [***] Mcf per Day of Shipper’s Gas at the Echo Springs
Plant. For Cryogenic Processing Service January 1, 2013 and thereafter at the Echo
Springs Plant, the following shall apply:

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

PAGE 7

For volumes of Shipper’s Gas over Shipper’s Cryogenic Processing MDQ, the Echo
Springs Plant capacity will be Non-Guaranteed Capacity and Shipper’s Gas will be
second in priority after any
third parties who have agreements for Guaranteed Capacity at the Echo Springs Plant.
Anytime that Williams Cryogenically Processes Shipper’s Gas at the Echo Springs
Plant the Parties anticipate that WPX will hold title to the Gas from the CIG Roan
Cliff receipt point through the Cryogenic Processing at the Echo Springs Plant.

Each time that Williams Cryogenically Processes Shipper’s Gas at the Echo Springs
Plant: (a) WPX shall be responsible for obtaining and paying for transportation on
CIG that enables WPX to transport Gas from the CIG Roan Cliffs receipt point to the
inlet of the Echo Springs Plant; and (b) WPX shall make commercially reasonable
efforts to Minimize Dilution.

Williams, WPX, and Shipper understand that WPX’s contractual rights to
transportation capacity on CIG’s transportation pipeline between CIG’s Roan Cliffs
receipt point and CIG’s Sand Springs delivery point will terminate on December 31,
2013. WPX agrees not enter into any release of that transportation capacity that
would prevent WPX from fulfilling its obligation to Minimize Dilution. Not later
than October 1, 2012 WPX will meet with Williams to discuss the term and volume of
any contract for capacity that enables WPX to transport Gas on CIG to the Echo
Springs Plant from and after January 1, 2014. If all of (i) through (iv) below
occurs:

	 	(i)	 	WPX retains and/or obtains transportation rights on CIG after
December 31, 2013,
	 
	 	(ii)	 	Williams does not have Cryogenic Processing capacity available
for Displaced Volume at the Echo Springs Plant,
	 
	 	(iii)	 	the Echo Springs Plant capacity unavailability is not due to
Force Majeure, and
	 
	 	(iv)	 	during such time that the Echo Springs Plant capacity is
unavailable, WPX or Shipper do not release or otherwise use the capacity on
CIG,

	 	 	 	then Williams will reimburse WPX for any firm demand or reservation charges actually
paid by WPX during the period of time when Williams did not have the capacity to
process Shipper’s Gas at the Echo Springs Plant for the lesser of: (a) the term and
volume agreed to between WPX and Williams, or (b) twice the volume of Shipper’s Gas
that Williams was unable to Cryogenically Process at the Echo Springs Plant. Should
WPX contract for any term or volume of such capacity that is in excess of that
agreed to by Williams, Williams will have no liability for such excess.
	 
	 	 	 	Williams, or its designee, shall deliver WPX’s Cryogenic Processing Plant Products
recovered from Shipper’s Gas at the Echo Springs Plant to the Echo Springs Plant
Cryogenic Processing Plant Product Delivery Points listed on Exhibit D. If WPX does
not arrange for removal of WPX’s Cryogenic Processing Plant Products within a
reasonable amount of time, then Williams may dispose of WPX’s Cryogenic Processing
Plant Products, at its sole discretion, for the account of WPX minus Williams’
actual disposal costs and Williams shall not be liable to WPX or to Shipper for any
interruption in service(s) that may result.

	 	(A)	 	Displaced Volumes. For Displaced Volumes the following shall apply:
	 
	 	 	 	(1) Fees. WPX shall pay Williams the Cryogenic Processing Fee set forth on
Exhibit E on the volume of Shipper’s Gas measured at the inlet of the Echo
Springs Plant. The Cryogenic Processing fee shall be adjusted annually
according to Section 1.12 beginning July 2014.
	 
	 	 	 	(2) Net Liquid Margin Sharing. WPX shall pay Williams the percentages of
the Net Liquid Margin set forth on Exhibit E. If Williams estimates in
good faith that even after rejecting ethane the Net Liquid Margin, is
expected to be negative for any Month,

 

 

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PAGE 8

	 	 	 	Williams shall operate the Echo
Springs Plant to minimize WPX’s Cryogenic Processing
Plant Product extraction as much as feasible without generating Gas that
does not meet the specifications of the Interconnecting Pipeline(s).
	 
	 	 	 	(3) Recoveries. WPX’s Cryogenic Processing Plant Product recoveries shall be
based on the actual recovery factors at the Willow Creek Plant as if
Shipper’s Gas were Cryogenically Processed at the Willow Creek Plant.
	 
	 	 	 	(4) Determination of Gas Composition. WPX’s gross Cryogenic Processing
Plant Products shall be determined on a Daily basis in accordance with
Exhibit G and the Daily composition of Shipper’s Gas shall be determined by
the component analysis at (i) CIG’s Roan Cliff receipt point during Days
when WPX Minimizes Dilution or (ii) at the inlet of the Echo Springs Plant
during other Days.
	 
	 	 	 	(5) Plant Fuel and Shrink. In addition to paying its pro rata share of any
Plant Power used in the Cryogenic Processing of Shipper’s Gas, WPX shall
physically provide, and Williams shall physically deduct from Shipper’s Gas,
100% of the Shrink, Cryogenic Processing Plant Fuel attributable to the
gross Cryogenic Processing Plant Products extracted from Shipper’s Gas as if
Shipper’s Gas were Cryogenically Processed at the Willow Creek Plant.
	 
	 	(B)	 	Non-Displaced Volumes. For non-Displaced Volumes the following shall apply:
	 
	 	 	 	(1) Fees. WPX shall pay Williams the Cryogenic Processing Fee set forth on
Exhibit E on the volume of Shipper’s Gas measured at the inlet of the Echo
Springs Plant. The Cryogenic Processing fee shall be adjusted annually
according to Section 1.12 beginning July 2014.
	 
	 	 	 	(2) Net Liquid Margin Sharing. WPX shall pay Williams the percentages of
the Net Liquid Margin set forth on Exhibit E. If Williams estimates in good
faith that even after rejecting ethane the Net Liquid Margin, is expected to
be negative for any Month, Williams shall operate the Echo Springs Plant to
minimize WPX’s Cryogenic Processing Plant Product extraction as much as
feasible without generating Gas that does not meet the specifications of the
Interconnecting Pipeline(s).
	 
	 	 	 	(3) Recoveries.WPX’s Cryogenic Processing Plant Product recoveries shall be
based on the actual recoveries at the Echo Springs Plant.
	 
	 	 	 	(4) Determination of Gas Composition. WPX’s gross Cryogenic Processing Plant
Products shall be determined on a Daily basis in accordance with Exhibit G
and the Daily composition of Shipper’s Gas shall be determined by the
component analysis at (i) CIG’s Roan Cliff receipt point during Days when
WPX Minimizes Dilution or (ii) at the inlet of the Echo Springs Plant during
other Days.
	 
	 	 	 	(5) Plant Fuel and Shrink. In addition to paying its pro rata share of any
Plant Power used in the Cryogenic Processing of Shipper’s Gas, WPX shall
physically provide, and Williams shall physically deduct from Shipper’s Gas,
100% of the Shrink, Cryogenic Processing Plant Fuel attributable to the
gross Cryogenic Processing Plant Products extracted from Shipper’s Gas at
the Echo Springs Plant.

	 	(c)	 	Cryogenic Processing Capacity Increases. Williams may increase its
Cryogenic Processing capacity at any time and for any reason. Shipper may propose an
increase in the Cryogenic Processing capacity above the sum of: (a) Shipper’s
Cryogenic Processing MDQ, plus (b) the capacity at the Echo Springs Plant that is not
otherwise dedicated to Guaranteed Capacity Cryogenic Processing for third party
customers. Shipper’s proposal must meet the following conditions:

 

 

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	 	 	 	(a) Shipper’s
proposal must be for at least one hundred thousand (100,000) Mcf per
Day additional Cryogenic Processing MDQ, (b) at the time of Shipper’s proposal
Shipper must be producing at least sixty percent (60%) of the amount of the proposed
Cryogenic Processing MDQ increase without Williams having Cryogenic Processing
capacity available for such sixty percent, and (c) Shipper’s projections must show
that within five (5) years after the proposal, Shipper will continue to produce its
Cryogenic Processing MDQ plus at least one hundred percent (100%) of Shipper’s
proposed Cryogenic Processing MDQ increase. If Williams, in its sole discretion,
agrees to the Shipper-proposed Cryogenic Processing MDQ increase or otherwise
increases its Cryogenic Processing capacity, the current Cryogenic Processing Fee
and Net Liquid Margin sharing shall be applicable and the new Cryogenic Processing
MDQ shall become effective after Williams has constructed and placed in service all
facilities necessary to provide the additional Cryogenic Processing capacity. If
Williams declines Shipper’s proposed Cryogenic Processing MDQ increase, Williams may
make a counter proposal, using the fee structure designated by Shipper, (for
example, keepwhole, fee-only, percent of liquids, or margin sharing) and Shipper, in
its sole discretion, may accept or reject Williams’ counter proposal. If either
(a) Williams declines Shipper’s proposed Cryogenic Processing MDQ increase without
making a counter proposal, provided that Shipper has provided the designated fee
structure, or (b) Williams makes a counter proposal and Shipper is able to obtain
the Cryogenic Processing service, for the proposed capacity, from a third party at
terms and fee structure that are comparable to, and economically more favorable than
Williams’ counter proposal, then only after Shipper delivers to Williams its
Cryogenic Processing MDQ, the volume of Shipper’s Gas above Shipper’s Cryogenic
Processing MDQ that is equal to the Shipper-proposed Cryogenic Processing MDQ
increase, and only that volume, shall be permanently released from Shipper’s
dedication for Cryogenic Processing, but not from Shipper’s dedications for other
services, herein. Provided that if Shipper refuses Williams’ counter proposal and
Shipper is not able to obtain the proposed amount of Cryogenic Processing capacity
from a third party at terms and fee structure comparable to Williams’ counter
proposal and economically more favorable than Williams’ counter proposal, then
Shipper will not be required to accept Williams’ counter proposal, but Shipper’s Gas
will not be released from the dedication to Cryogenic Processing herein.
	 
	 	(d)	 	Shipper’s Sole Remedy for Williams’ Failure to Provide Guaranteed Capacity
for Cryogenic Processing. Shipper’s sole remedy and liquidated damages for
Williams’ failure to provide Guaranteed Capacity for Shipper’s Gas made available by
Shipper for Cryogenic Processing, up to the applicable Cryogenic Processing MDQ, when
such failure is: (a) not due to Force Majeure, (b) not due to maintenance, and (c)
not due to Shipper’s breach, shall be a payment by Williams equal to Shipper’s share
of the Net Liquid Margin that Shipper would have received had Williams Cryogenically
Processed the volume of Shipper’s Gas made available, but not Cryogenically
Processed, using the average actual Plant Product recoveries of the previous twelve
(12) Months averaged among all of the Cryogenic Processing Plants providing
Guaranteed Capacity for Shipper’s Gas over the same previous twelve (12) Months.
	 
	 	(e)	 	Temporary Release of Shipper’s Gas Above Shipper’s Cryogenic Processing
MDQ. Anytime that Shipper has available for Cryogenic Processing a volume of Gas
above the Cryogenic Processing MDQ and Williams is not able to Cryogenically Process
such Gas, at any Cryogenic Processing Plant, for reasons other than for Shipper’s
breach, then only after Shipper has delivered to Williams the Cryogenic Processing
MDQ, the volume of Shipper’s Gas above Shipper’s Cryogenic Processing MDQ that
Williams is unable to Cryogenically Process shall be temporarily released from the
dedication herein for Cryogenic Processing only, not from Shipper’s dedications for
other services, and Shipper may enter into agreement(s) with third party(ies) to
receive Cryogenic Processing services for that volume of Shipper’s Gas for a term
ending two (2) years from the effective date of such third party agreement, unless
Williams has provided Shipper notice of an earlier date upon which Williams expects
additional Cryogenic Processing Capacity to be available, in which case the term of
such third party agreement will end by such earlier date.

 

 

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	 	(f)	 	Temporary Release of Shipper’s Gas for Force Majeure. If Williams is
unable to Cryogenically Process a volume of Shipper’s Gas made available by Shipper
for Cryogenic Processing, up to the applicable Cryogenic Processing MDQ, due to Force
Majeure or maintenance the volume of Shipper’s Gas that is curtailed shall thereupon
be temporarily released from Shipper’s dedication for Cryogenic Processing, but not
from Shipper’s dedications for other services, until the later of: (a) the date
provided by Williams as the date on which Williams notifies Shipper that Williams
expects to be able to resume Cryogenically Processing Shipper’s curtailed Gas, or (b)
the fifth (5th) business day following the date Williams notifies
Shipper that it is able to Cryogenically Process Shipper’s curtailed Gas.
	 
	 	(g)	 	Permanent Release of Shipper’s Gas From Cryogenic Processing Dedication Due
to Force Majeure. If Williams is unable to Cryogenically Process a volume of
Shipper’s Gas made available by Shipper for Cryogenic Processing, up to the
applicable Cryogenic Processing MDQ, due to Force Majeure, and such inability is
reasonably expected by Williams to exceed [***] months, then Williams shall promptly
send Shipper written notification thereof within 30 Days of the notice required
pursuant to Section B.3. Within 90 Days of the notice required pursuant to Section
B.3, Williams shall provide Shipper with a plan to resolve the curtailment, including
an estimated time to achieve such resolution, and monthly updates thereafter. If
Williams does not resolve the curtailment within the estimated time to achieve such
resolution or a commercially reasonable period of time thereafter, then that volume
of Shipper’s Gas that has been curtailed, and only that volume, may at Shipper’s sole
election be permanently released from Shipper’s dedication for Cryogenic Processing,
but not from Shipper’s dedications for other services.
	 
	 	(h)	 	Permanent Release of Shipper’s Gas From Cryogenic Processing
Dedication. If Williams has not provided Shipper notice of Force Majeure and
Williams is unable to Cryogenically Process Shipper’s Gas made available by Shipper
for Cryogenic Processing, up to the applicable Cryogenic Processing MDQ, and such
inability exceeds [***] months, then Shipper shall have the option to have that
volume of Shipper’s Gas that has been curtailed, and only that volume, permanently
released from Shipper’s dedication for Cryogenic Processing, but not from Shipper’s
dedications for other services, herein.

	 	1.9	 	Williams’ Condensate and Other By-Product Recovery. Williams shall provide to
Shipper the Condensate and other by-products originating from Shipper’s Gas and Shipper
will retain the ownership of, or shall be entitled to the actual value received for 100% of
Shipper’s Condensate, water, CO2, and any other by-products extracted from
Shipper’s Gas. Williams will make such Condensate and CO2 available for
Shipper to remove at the applicable Delivery Points listed on Exhibit D. Disposal of
CO2 is provided for in Section C.4 of Exhibit A. Williams will make water and
other by-products available for Shipper to remove at such reasonable locations as
designated by Williams from time to time. If Shipper does not arrange for removal of
Shipper’s Condensate and/or other by-products recovered from Shipper’s Gas within a
reasonable amount of time, then Williams may dispose of such Condensate and/or by-products,
at its sole discretion, for the account of Shipper minus Williams’ actual disposal costs
and Williams shall not be liable to Shipper for any interruption in service(s) that may
result from Shipper’s non-removal of Shipper’s Condensate and/or by-products.

	 	1.10	 	Williams’ Ancillary Services. In addition to the other services provided for
herein, Williams will provide the following ancillary services for which no additional fee
will be assessed:

	 	(a)	 	Subject to the process described in Section 1.16 herein (except for the
associated Fee Adjustment) and as requested by Shipper, design and construction of
water gathering pipelines located adjacent to new Gathering facilities, which
pipelines Shipper shall own and operate; provided that Shipper will pay the actual
cost for such construction and facilities, as well as the design cost if Williams
reasonably uses outside service providers for such design.

 

 

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	 	(b)	 	Hydraulic modeling from wellhead, including for Shipper-owned and operated
facilities, at no less than semi-annual reviews (using the Fekete Piper hydraulic
modeling system or other modeling system mutually agreed to). Williams shall
maintain a separate hydraulic model for only Shippers Gas.

	 	(c)	 	Williams’ Provision of Cost of Service Data to Shipper. Williams shall
continue to provide Shipper cost of service calculations on an annual basis or
otherwise as reasonably requested by Shipper in order for Shipper to comply with
current and future regulations of the Office of Natural Resources Revenue (“ONRR”), a
part of the United States Department of the Interior and formerly known as the
Minerals Management Service, concerning the payment of royalties on oil and Gas
produced from federal leases. Although the Parties recognize that Williams does not
account for its business on a cost of service basis, Williams shall provide such
information in such form and detail as reasonably requested by Shipper, shall
exercise reasonable care and diligence with regard to its preparation, shall provide
such information for as long as Shipper is required to use such information in the
calculation of royalty payments made by Shipper to ONRR and shall retain such
information for seven (7) years after the time of Gathering, Treating and/or
Processing, as applicable (or for a longer period to the extent that Shipper has
notified Williams that Shipper has received notice from ONNR of an audit or
investigation requiring that the records be maintained for such longer period).
Williams does not warrant the accuracy of any of the information to be provided.

	 	1.11	 	Fees. Shipper or WPX, as appropriate, shall pay Williams all fees in this
Agreement, including, but not limited to, the Fixed Fees plus the Variable Fees, plus the
Cryogenic Processing Fee set out in Exhibit E. All volumes of Shipper’s Gas that receive
services from any of Williams’ facilities shall be subject to the Gathering Fee-Type(s) and
Basic Processing and Treating Fee-Type(s) except: (a) Shipper’s Gas gathered by Williams
and delivered to Encana Oil and Gas (USA) Inc. pursuant to that agreement first listed on
Exhibit L and the Xcel Agreements last listed on Exhibit L shall only be subject to the
Gathering Fee-Type(s), and (b) until Williams invests in installing incremental Treating
for purposes of accommodating the higher CO2 content of Shipper’s Gas produced
from the Ryan Gulch area, Shipper’s Gas delivered to the Willow Creek Plant and produced
from the Ryan Gulch area, will not be subject to the Basic Processing Treating Fee Type.
In addition to the annual adjustments in Section 1.12, Williams will make a one-time
adjustment to the Variable Fees, based on Williams’ actual costs for the first two Contract
Years, within sixty (60) Days following October 31, 2012. For purposes of the one-time
adjustment of the Variable Fees, Williams will take into consideration Shipper’s pro rata
share of Williams’ operating and maintenance expense; in no event, however, shall such
adjustment be greater than a ten percent (10%) increase or decrease, as the case may be, in
the Variable Fees in effect at the time the adjustment is made. The one-time adjustment
will apply prospectively only.
	 
	 	1.12	 	Annual Adjustment of Variable Fees and Cryogenic Processing Fee. Effective
every July 1, all Variable Fees provided for herein shall be adjusted by the percentage
change, if any, in the Consumer Price Index — All Urban Consumers which is published
quarterly by the Bureau of Labor Statistics (“CPI-U”). In addition, beginning on July 1,
2014, every July 1, the Cryogenic Processing Fee shall be adjusted by the percentage
change, if any, in the CPI-U. This percentage change shall be calculated based upon the
most recent quarterly publication of the CPI-U and shall be compared to the quarterly
publication of the CPI-U for the same quarter of the prior calendar year. Provided, the
adjustment shall never result in the Variable Fee being less than the more recent of: i)
the Variable Fee as of the Original Effective Date or ii) the Variable Fee as pursuant to
the one-time adjustment in Section 1.11. Provided further, the adjustment shall never
result in the Cryogenic Processing Fee being less than $[***]. If the CPI-U ceases to be
published, then it shall be replaced with the Implicit Price Deflator Index (“IPD Index”).
If both the CPI-U and the IPD Index cease to be published, then the Parties shall within
thirty (30) Days of written notice thereof from Williams negotiate a replacement index. If
the Parties cannot negotiate a replacement index, the alternate dispute resolution
procedures in Section L shall apply.

 

 

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12

	 	1.13	 	Gathering Fuel and Basic Processing Plant Fuel. Shipper shall provide to
Williams Shipper’s pro-rata share of Gathering Fuel and Basic Processing Plant Fuel up to
the maximum fuel percentages set out in Exhibit E. Williams shall deduct Shipper’s pro
rata share of actual fuel consumed and metered or calculated (as applicable) from Shipper’s
Receipt Point volumes and shall report such deducted volumes monthly to Shipper pursuant to
Section 4.2. In the event Williams utilizes electric power in lieu of Gas fuel for
operation of any of the Williams facilities, Shipper’s Fuel for such facility shall then be
Shipper’s pro rata share of such power required, and shall be billed in addition to other
fuel requirements or fees hereunder.
	 
	 	1.14	 	Cryogenic Processing Plant Fuel and Power. Shipper (which for purposes of this
Section 1.14 shall include WPX as applicable) shall provide to Williams Shipper’s pro-rata
share of Cryogenic Processing Plant Fuel. Williams shall deduct Shipper’s pro rata share
of actual fuel consumed and calculated from Shipper’s Receipt Point volumes and shall
report such deducted volumes monthly to Shipper pursuant to Section 4.2. In the event
Williams utilizes electric power in lieu of Gas fuel for operation of any of the Cryogenic
Processing Plant(s), Shipper’s Cryogenic Processing Plant Fuel for such facility shall then
be Shipper’s pro rata share of such power required, and shall be billed in addition to
other fuel requirements or fees hereunder.
	 
	 	1.15	 	Monthly Average Pressure Limits. Williams will maintain pressures on the
Gathering facilities such that the Monthly average pressures as measured at the inlet
suction point of each Field compressor station will maintain reasonably efficient
production levels using Williams’ facilities as Shipper may request from time to time;
however, in no event will such Monthly average pressures exceed the limits set out in
Exhibit K. In the event of Williams’ failure to meet the Monthly average pressure
requirements set forth at Exhibit K, the gathering fee applicable to the volume impacted
will be reduced by thirty-three percent (33%) during the period of such failure, which will
constitute liquidated damages. Provided, such fee reduction shall not apply during periods
of i) Flowbacks which have caused Monthly average pressures to exceed the limits set forth
at Exhibit K, ii) scheduled maintenance, iii) Force Majeure, iv) when volumes exceed MDQs,
or v) if a Shipper’s request affects the applicable facilities (each i-v limited to the
volumes impacted).
	 
	 	1.16	 	Planning, Expansions and MDQ and Fee Adjustments — Excluding Cryogenic Processing
Services. Notwithstanding anything else herein, this Section 1.16 does not apply to
Cryogenic Processing. Plants MDQs as of the Original Effective Date are set forth on
Exhibit H and Gathering MDQs as of the Original Effective Date are set forth on Exhibit K.
In conjunction with Shipper’s internal budget approval process but not less frequently than
semi-annually, Shipper shall provide Williams updated forecasts of expected production of
Shipper’s Gas for the subsequent 60 Months on a Month-by-Month basis and for the subsequent
fifteen years on a year-by-year basis. Such forecasts shall at a minimum include drilling
plans, well locations, well production type curves, estimated ultimate recovery, Gas
compositions and any other information that Williams reasonably deems necessary. Such
forecasts shall conform to Shipper’s exploration and production budget to the extent that
Shipper has such budget(s) for such years. Williams will analyze such production
forecasts and submit to Shipper, within ninety (90) Days of its receipt thereof, a “Project
Plan,” containing: i) recommendations for necessary facility construction, alteration,
installation, or enhancement to accommodate the forecasted production, including, if deemed
necessary, recommendations for the provision of services reasonably related to those
provided pursuant to this Agreement but not then provided for under this Agreement
(“Expansion”); ii) the fee adjustment, if any, that the construction and operation of such
Expansion will require as set forth below; iii) an adjusted MDQ Schedule that reflects the
expected effect on MDQ of such Expansion(s); and iv) whether Williams declines the
Expansion(s) pursuant to Section 1.16(a) below.

	 	(a)	 	Williams Declined Expansion. If, as estimated by the Project Plan(s), any
one of the five following events would occur, Williams may decline an Expansion(s)
(“Declined Expansion”):

	 	i)	 	The Expansion would involve the provision of services by Williams
not then provided for under this Agreement;

 

 

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	 	ii)	 	The cost of any single Expansion is greater than one hundred
million dollars ($100,000,000).
	 
	 	iii)	 	The cost of any single Expansion would result in greater than two
hundred million dollars ($200,000,000) total accumulated Expansion cost
commitment for any single year.
	 
	 	iv)	 	The cost of any single Expansion would result in Williams having an
aggregate unpaid Expansion cost commitment greater than three hundred million
dollars ($300,000,000).
	 
	 	v)	 	The cost of any single Expansion would result in Williams having an
aggregate unpaid Expansion cost commitment greater than two times the gross
revenue earned by Williams over the previous twelve Month period under this
Agreement.

	 	 	 	If Williams Declines an Expansion within the Core Area, Shipper may construct the
Declined Expansion at Shipper’s sole cost and the Declined Expansion may be connected
to and operationally integrated with Williams’ facilities that are otherwise used to
provide services under this Agreement (with, if Williams elects, Williams serving as
operator of such Declined Expansion in accordance with a cost-plus operating agreement
to be negotiated in good faith between the Parties), all in accordance with the
Project Plan. If Shipper connects a Declined Expansion to and so operationally
integrates it with Williams-owned facilities, the services on the Williams-owned
facilities will be provided to Shipper pursuant to this Agreement and subject to the
applicable fees.
	 
	 	 	 	If Williams Declines an Expansion outside of the Core Area, Shipper may construct the
Declined Expansion, at Shipper’s sole cost, and Shipper’s Gas being served by the
Declined Expansion shall automatically be released from the dedications under this
Agreement; provided such release shall be only to the extent of the services provided
by the Declined Expansion.
	 
	 	(b)	 	Williams Accepted Expansions: If Williams does not decline an Expansion
pursuant to Section 1.16(a) above, Shipper shall have ninety (90) Days from receipt
of Williams’ Project Plan to approve or reject Williams’ Project Plan. Thereafter the
Parties shall proceed as follows:

	 	i)	 	Upon receiving Shipper’s approval to proceed with the construction
of the Williams- recommended Expansion, Williams shall, within twenty-four months
for Gathering or compression Expansions and thirty-six months for Processing or
Treating Expansions, construct and place in service such Expansion, provided that
the Parties may agree to revise these in-service requirements in the future if
changes in market or regulatory circumstances merit such revisions. Provided
further that Williams will use commercially reasonable efforts to construct or
install Shipper-requested Expansions in less time than the aforesaid in-service
requirements if Shipper specifically so requests in writing. The corresponding
fee(s) shall be adjusted as hereafter described and the MDQs shall be adjusted
according to the Project Plan.
	 
	 	ii)	 	Should Shipper reject the Expansion as proposed in the Project
Plan, the Parties shall in good faith jointly consider other alternatives for the
provision of services hereunder.
	 
	 	iii)	 	Notwithstanding the foregoing, should the Parties fail to agree
upon the Expansion or the Project Plan, Williams shall, at Shipper’s written
direction, proceed to design, permit, construct and operate such facilities as
designated by Shipper (which, for clarity, shall be included within the meaning
of “Expansion,” as defined in the first paragraph of Section 1.16 above),
provided that Williams will have the right to decline a Shipper-directed
Expansion pursuant to Section 1.16(a) above. In no event will Williams be
obligated to design, construct or operate a Shipper-directed Expansion that does
not meet Williams’ policies and standards or regulatory requirements. Williams
shall have the same construction and in-service deadlines as described at
1.16(b)(i) and the corresponding fees shall be adjusted as hereafter described
and the MDQs shall be adjusted to reflect the expected effect on MDQs of such
Expansion.

 

 

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	 	iv)	 	If Williams constructs or installs an Expansion, Shipper will be
obligated to pay adjusted fees (“Adjusted Fees”) and if appropriate, the fuel
limits in Exhibit E will be adjusted. For each of the Gathering Fee-Type and the
Basic Processing and Treating Fee-Type, in no event will the Fixed Fee portion of
the Adjusted Fee be less than the Fixed Fee as of the Original Effective Date.
In no event will the variable portion of the Adjusted Fee for all Fee-Types be
less than the more recent of: i) the Variable Fee as of the Original Effective
Date or ii) the Variable Fee as pursuant to the one-time adjustment in Section
1.11. The Adjusted Fee will be calculated as follows:

	 	a)	 	The Incremental Fee will be a stand-alone fee calculated to
enable Williams to recover, for each Expansion, a pre-tax internal rate of
return equal to the greater of X or Y, where
	 
	 	 	 	X is [***]%, and
	 
	 	 	 	Y is the 90 day moving average yield to maturity for the Barclays Capital U.S.
Long Credit Baa Index as determined on the first business day of each month as
quoted by Barclays Capital Inc., plus [***] percent ([***]%), provided
however, if the Barclays Capital U.S. Long Credit Baa Index is no longer
published and there is no surviving index, an index comprised of bonds with
all of the following characteristics: (i) U.S. dollar-denominated fixed-rate
taxable bonds that are SEC-registered or Rule 144A with registration rights,
(ii) minimum principal amount of $250 million, (iii) remaining time to
maturity in excess of 10 years and (iv) rated Baa1, Baa2, Baa3, BBB-, BBB or
BBB+ by the middle rating of Moody’s, S&P and Fitch, would be substituted for
the Barclays Capital U.S. Long Credit Baa Index.
	 
	 	 	 	If there is a change in governmental regulations or laws that causes Williams
Partners L.P. to become a tax paying entity for US federal income tax
purposes, X and Y shall be adjusted by 1) a reduction therein to reflect the
after tax cost of debt capital, at an assumed rate of X or Y, as applicable,
less [***] percent ([***]%), that would be attributable to an assumed fifty
percent (50%) debt portion of the total capital required for the Expansion and
2) an increase therein attributable to the taxation of income from the
Expansion.
	 
	 	 	 	The Incremental Fee will include:

	 	1.	 	Actual capital costs for the Expansion, consisting
of i) the approved amount in the Williams capital work order, plus ii)
any subsequent mutually-agreed-to change orders; provided that amounts
in excess of i) plus ii) will be divided equally between Williams and
Shipper,
	 
	 	2.	 	Operating and maintenance costs, and
	 
	 	3.	 	Maintenance capital required for Expansions.

	 	b)	 	The Adjusted Fee for Expansions that do not involve an MDQ
increase will be calculated by adding the Incremental Fee to the last
applicable fee.
	 
	 	c)	 	The Adjusted Fee (Fa) for Expansions that do involve an MDQ
increase will be determined by applying the weighted average of the Current
Fee (Fc) and Incremental Fee (Fi) using the formulae below, which are
intended to maintain the forecast net present value of the original
investment (as it stands at the time of this fee adjustment) and add the net
present value of the incremental investment to result in the Adjusted Fee (A
sample calculation is in Exhibit M):

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

PAGE 15

Adjusted Fee = Fa = FcWc + FiWi

Fixed portion of Adjusted Fee = Faf = Fa – Fv

Where:

Fc is the Current Fee

Fi is the Incremental Fee

Fv is the Variable portion of the Fee

Weighting Factors;

Where:

y is the year (from 1 to 20)

Vyc is the average production deliverability for year y predicted by the

hydraulic model using the Expansion facilities included in the last

Adjusted Fee.

Vyp is the average production deliverability for year y predicted by the

hydraulic model using the Expansion facilities included in the current

Incremental Fee.

IRR is the rate of return as determined

by Section 1.16(b)(iv)(a) above.

	 	v)	 	If a fee adjustment is required then such fee(s) shall be adjusted
annually, effective on each July 1, for minor Expansions (an Expansion that is
fifty million dollars or less) placed in service in the prior twelve (12) Months
ending June 30, using the formula above for all of the cumulative minor
Expansions; or for significant Expansions (an Expansion that is greater than
fifty million dollars) whenever a significant Expansion is placed in service and
Shipper shall become subject to such Adjusted Fees and Exhibit E and Exhibit K
(Gathering MDQs) or Exhibit H (Basic Processing MDQs), as appropriate, will be
automatically deemed amended accordingly.

	 	a)	 	In the event Williams incurs costs for an Expansion that
has been approved by Shipper and Shipper elects to cancel such Expansion
prior to it being placed in service, all costs incurred prior to such
cancellation will be included in the next fee adjustment following such
cancellation.
	 
	 	b)	 	To the extent facilities are placed in-service for the
benefit of third parties and later become an Expansion, the fee adjustments
related to such Expansion will be implemented in the year that the facilities
become an Expansion.

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

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	 	vi)	 	Fee adjustments (which, in accordance with the formulae under
Section 1.16(b)(iv)(c)above, are based upon the volume forecasts referred to in
the first paragraph of this Section 1.16) shall be limited by the capacity of the
facilities associated with the Expansion and will not be based upon any part of
capacity or service improvements intended to benefit third parties.
	 
	 	vii)	 	Upon request, Shipper will provide to Williams an update of its
drilling plans and other reasonable information necessary to confirm Shipper’s
progress with the production-related activities that support an Expansion.
Before such an Expansion is placed into service, if Williams reasonably believes
that Shipper is not proceeding sufficiently with such production-related
activities, then Williams may require that Shipper provide reasonably
satisfactory evidence that Shipper is so proceeding. If Shipper fails to provide
such evidence, Williams shall have the right to terminate the Expansion and all
related expenditures and the costs incurred prior to such termination shall be
included in the next Fee Adjustment.

	 	c)	 	Minor Expansions. The Parties will work together in good
faith to mutually agree upon expedited minor Expansions using the general
process parameters and applying the fee adjustments in this Section 1.16.

	2.	 	SERVICE-RELATED PROVISIONS

	 	2.1	 	MDQ Decrease and Cryogenic Processing MDQ Decrease. Williams may decrease
Shipper’s MDQ any time after this Agreement has been in effect for one hundred eighty (180)
Days if the average of Shipper’s Confirmed Nominations on a Daily basis over the
immediately preceding one hundred eighty (180) Days fails to equal at least eighty percent
(80%) of the MDQ. Williams shall provide written
notice of the new MDQ to Shipper at least ten (10) business Days before effecting the
decrease, which notice by Williams shall automatically amend this Agreement on the first
Day of the Month following the Month of delivery. In no event shall the new MDQ be lower
than one hundred and ten percent (110%) of the average of Shipper’s Confirmed Nominations
on a Daily basis over the one hundred eighty (180) Days immediately preceding. Williams
may decrease Shipper’s Cryogenic Processing MDQ any time after December 31, 2012, if the
average of Shipper’s Gas available for Cryogenic Processing on a Daily basis over the
immediately preceding one hundred eighty (180) Days fails to equal at least eighty percent
(80%) of the Cryogenic Processing MDQ. Williams shall provide written notice of the new
Cryogenic Processing MDQ to Shipper at least ten (10) business Days before effecting the
decrease, which notice by Williams shall automatically amend this Agreement on the first
Day of the Month following the Month of delivery. In no event shall the new Cryogenic
Processing MDQ be lower than one hundred and ten percent (110%) of the average volume of
Shipper’s Gas that Shipper has made available for Cryogenic Processing on a Daily basis
over the one hundred eighty (180) Days immediately preceding.
	 
	 	2.2	 	Notice of New Wellhead Gathering Receipt Points. If, at any time during the
effectiveness of this Agreement, Shipper’s Gas that is to be produced from any future well,
Shipper shall, at least thirty (30) Days prior to drilling the well, in an area where
Williams provides wellhead gathering service, give Williams written notice identifying:
Shipper’s right, title or interest in such Gas; the name of the well; the location of the
well; and a reasonable estimate of the well’s production. It is understood by the Parties
that this notice requirement can be fulfilled by Shipper’s updated forecasts of expected
production of Shipper’s Gas required by Section 1.16 if such forecast includes the subject
well.
	 
	 	2.3	 	Notice of Subsequently Acquired Interest in Gas from Existing and Future Wells in
the Area of Interest. If after the Original Effective Date Shipper acquires any right,
title or interest in Gas that is being produced, or is to be produced, from any existing or
future well in the Area of Interest, Shipper shall, give Williams written notice
identifying: Shipper’s right, title or interest in such Gas (“Subsequently Acquired Gas”);
the name of the well; the location of the well; the well’s historical production or
estimated future production; whether the well will require connection to the Gathering
System in order for Williams to receive the Subsequently Acquired Gas; and whether the
Subsequently Acquired Gas was acquired by Shipper subject to prior dedication (and, if so,
provide Williams a copy of

 

 

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PAGE 17

	 	 	 	the agreement, subject to Williams maintaining its
confidentiality and with the fees redacted, or if the agreement is subject to
confidentiality restrictions, identifying the person or entity to whom the Subsequently
Acquired Gas is dedicated and the remaining primary term of such prior dedication and the
recorded memorandum). If the Subsequently Acquired Gas is to be produced from an existing
well, then Shipper shall give Williams such written notice at least thirty (30) Days after
Shipper begins operating the existing well. If the Subsequently Acquired Gas is to be
produced from a future well, in an area where Williams provides wellhead gathering service,
then Shipper shall give Williams such written notice at least thirty (30) Days before the
well is to be drilled. Williams shall provide Gathering, Basic Processing, Dehydrating,
and Treating services for the Subsequently Acquired Gas that is not subject to a prior
dedication, and any facility additions or modifications and related rate adjustments shall
be pursuant to Section 1.16. Williams shall provide Cryogenic Processing services for the
Subsequently Acquired Gas that is not subject to a prior dedication, up to the Cryogenic
Processing MDQ. If the Subsequently Acquired Gas is subject to prior dedication, Shipper
shall give Williams an additional thirty-six (36) months, or such amount as the remaining
term of the dedication if less than thirty-six (36) months written notice preceding the
expiration or termination of the primary term of the prior dedication. Williams shall then
have the option to receive the Subsequently Acquired Gas under this Agreement, which it may
exercise by providing Shipper written notice thereof within ninety (90) Days after Williams
receives the required additional written notice from Shipper, or at any time after the
expiration or termination of the primary term of the prior dedication if Shipper does not
give Williams such additional written notice. If Williams exercises the applicable option,
then any facility additions or modifications and related rate adjustments shall be pursuant
to Section 1.16 herein and this Agreement shall be automatically amended to include the
Receipt Point(s) at which the Subsequently Acquired Gas will be received by Williams, which
amendment shall be effective the later of the date Williams exercises this option or the
date the
well is connected to the Gathering System. Only if Williams declines to exercise the
applicable option after receiving the required written notice(s) from Shipper shall the
Subsequently Acquired Gas be released from dedication to Williams under this Agreement.
	 
	 	2.4	 	Shipper’s Liability for Failure to Give the Required Notice(s). Shipper shall
be liable to Williams for any and all damages resulting from Shipper’s failure to give, or
timely give, the written notice(s) required by such Sections 2.2 and 2.3.
	 
	 	2.5	 	Abandonment. If all of Williams’ facilities, used to provide Gathering, Basic
Processing, Dehydrating, Treating, or other services encompassed by the Fee-Types, in the
Area of Interest, or any segment thereof, is not utilized for 365 consecutive Days or
becomes uneconomic to maintain and/or operate (the “Unutilized Asset”), then
Williams may propose to permanently abandon the Unutilized Asset by providing written
notification to Shipper at least sixty (60) Days in advance of the commencement thereof,
whereupon Shipper will have the right, for a period of sixty (60) Days following receipt of
such notice to elect upon written notice to Williams to take title to the Unutilized Asset.
Shipper’s failure to timely so elect shall be deemed Shipper’s election not to take title
to the Unutilized Asset. If Shipper elects to take title to the Unutilized Asset, then
Williams will transfer all of its interest in the Unutilized Asset to Shipper at no cost to
Shipper and Williams will be relieved of any obligations to provide any services previously
provided to Shipper on the transferred assets. If Shipper does not elect to take title to
the Unutilized Asset, Williams may, after the expiration of the 60 Day notice, commence
abandonment of the Unutilized Asset, after which Williams will no longer have any
obligations related to providing services on the Unutilized Asset. Provided, if Williams
does not own such facilities then Williams shall have the right to re-deploy or relocate
facilities or terminate service arrangements for such facilities without providing title to
Shipper. This Section 2.5 does not apply to Williams’ facilities used to provide Cryogenic
Processing services. It shall be in Williams’ sole discretion whether to abandon any
facilities used to provide Cryogenic Processing services, provided that, this shall not be
construed as relieving Williams of its obligations under this Agreement.
	 
	 	2.6	 	Williams’ Election to Exclude Certain Third Party Owned Gas from Shipper’s Gas.
Shipper has informed Williams and shall keep Williams updated with respect to all Gas that
is produced from third party owned leases in the Area of Interest and purchased by Shipper
plus all third party owned Gas

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

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	 	 	 	produced from Shipper’s leases that Shipper has the right to
market. Notwithstanding anything else in this Agreement, other than with respect to Gas
that is owned by third party royalty owners in Shipper’s leases and Gas that Shipper is
presently committed to purchase from the RMT Firm Customers, Williams may upon giving sixty
(60) Days advance notice to Shipper elect to exclude any of such purchased and/or third
party owned Gas from Shipper’s Gas.
	 
	 	2.7	 	Purchases of Third Party Gas and Non-Compete. Notwithstanding anything else
herein, neither Shipper nor WPX will use the services provided by Williams pursuant to this
Agreement to serve Gas purchased by Shipper or WPX from third parties other than the RMT
Firm Customers, provided that services for such RMT Firm Customers’ Gas shall be subject to
the MDQ that is in effect as of the Original Effective Date. Except i) Williams Declined
Expansions outside of the Core Area and ii) Shipper and WPX acquisitions of facilities that
are an integral part of an acquisition of production or lease(s), neither Shipper nor WPX
shall engage in activities within the Area of Interest that are in competition with the
services provided by Williams under this Agreement.

	3.	 	INSTALLATION OF CUSTODY TRANSFER METERS AND ELECTRONIC FLOW MEASUREMENT

	 	3.1	 	Not later than October 31, 2012, Williams shall install custody transfer quality
measurement equipment at all of the Central Delivery Point Gathering Receipt Points listed
on Exhibit C. Such measurement equipment will meet all industry standards for custody
transfer measurement and shall, in accordance with Shipper’s timely written directions,
include such equipment as chromatographs and hygrometers. To the extent that Williams
expends more or less than $6,300,000 to install such measurement
equipment, such excess or underage will be paid by Shipper to Williams or credited by
Williams to Shipper, respectively.
	 
	 	3.2	 	EFM Equipment and Installation Specifications. All EFM installed by a Party
shall remain the property of that Party. The EFM so installed shall comply with the
specifications at the time of installation and set forth in API MPMS Chapter 21.1, all
applicable API codes and regulations and all applicable regulatory requirements.
	 
	 	3.3	 	Operational Data Access. Each Party shall have access to the other Party’s
operational EFM data from EFM sites via a file transfer for Gas that is subject to this
Agreement. The Party providing such data shall update the operational EFM data
approximately hourly, or as allowed by network limitations, but no less than once a Day.
Such operational data from the EFM device, which, if available, shall include meter
identification, date, time, Gas temperature, static pressure, differential pressure, total
Mcf for the current Month, average Mcf per Day for the current Month, instantaneous Mcf per
Day and cumulative flows for the previous twenty four (24) hour period. The Parties hereto
recognize and accept that such operational EFM data may differ from the actual data used
for custody transfer purposes.
	 
	 	3.4	 	Use of Radio Facilities. Williams and Shipper recognize that certain radio
transmission limitations may exist in the area where many EFM Sites are located and that
the use of existing radio towers may not access all EFM Sites. To provide the EFM service
contemplated herein, where not prohibited by law or regulation and upon providing written
notice each Party will allow the other Party (“Utilizing Party”) to utilize the Party’s
radio facilities, excluding the use of the actual radio frequencies, for the sole purpose
of receiving and/or transmitting EFM data. The radios of the Utilizing Party must be
installed in manner that does not interfere with the other Party’s equipment or
communication. If at any time a Utilizing Party’s radio interferes with the other Party’s
equipment or communication the Utilizing Party will immediately disable or remove the
Utilizing Party’s radio until said problem is resolved. Each Party using such radio
facilities shall secure all local, state and federal permits required for the operation of
their radio systems.
	 
	 	3.5	 	Exclusion of Certain Damages Related to EFM. Neither Party shall be liable to
the other Party for any special, incidental, exemplary, punitive or consequential damages
arising from, or as a result of, any

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

PAGE 19

	 	 	 	delay, omission or error in the transmission or
receipt of any information pursuant to this Section 3 even if either Party has been advised
of the possibility of such damages, and regardless of fault.

	4.	 	STATEMENTS AND PAYMENT

	 	4.1	 	Report and Statement by Shipper. Where CTM is not being performed by Williams,
Shipper’s Operator shall report to Williams the Day(s) of production, the Month and year in
which such production is to be recognized, Mcf pressure base, Btu pressure base, Daily Mcf,
Daily Btu, Daily MMBtu and quality of Shipper’s Gas. Such report shall consist of the best
data available to Shipper by the third (3rdh) business Day of the Month and
shall be transmitted to Williams electronically or via facsimile on or before the third
(3rd) business Day of each Month for Shipper’s Gas delivered to Williams during the
preceding Month. Shipper’s Operator shall also send to Williams via mail, including
electronic mail or facsimile, on or before the tenth (10th) business Day of each Month a
written statement confirming such report. Any adjustments to such report shall be sent as
a net adjustment identified by the Day of production. Williams may request an additional
Monthly electronic audit file with all of the hourly, daily, configuration and event/alarm
data.
	 
	 	4.2	 	Statement by Williams. On or before the fifteenth (15th) Day of
each Month, Williams shall make available to Shipper and/or WPX, as appropriate, a
statement setting forth the following:

	 	(a)	 	The number of MMBtus and Mcfs of Shipper’s Gas received by Williams at the
Receipt Point(s) during the preceding Month;
	 
	 	(b)	 	The number of MMBtus and Mcfs delivered by Williams for Shipper’s or WPX’s,
as appropriate, account to the Delivery Point(s) during the preceding Month;
	 
	 	(c)	 	The number of MMBtus and Mcfs of Shipper’s Gas retained by Williams as
Gathering Fuel, Basic Processing Plant Fuel, and Cryogenic Processing Plant Fuel
during the preceding Month;
	 
	 	(d)	 	The Imbalance in MMBtus and Mcfs for the preceding Month and cumulative
Imbalance in MMBtus and Mcfs for all preceding Months;
	 
	 	(e)	 	The fees and any other amounts due and payable by Shipper or WPX, as
appropriate, for services rendered or electric fuel during the preceding Month(s);
	 
	 	(f)	 	Any interest due and payable;
	 
	 	(g)	 	The number of MMBtus and Mcfs of Shrink, Theoretical Receipt Point Gallons,
Plant Recovery Factor, and revenues due Shipper or WPX, as appropriate, if Williams
disposes of Shipper’s or WPX’s, as appropriate, Plant Products, Cryogenic Processing
Plant Products, or Condensate pursuant to Sections 1.6 and 1.8; and
	 
	 	(h)	 	The applicable Fixed and Variable Fees.
	 
	 	(i)	 	The previous Month’s average pressures as measured at the inlet suction
point of each Field compressor station.

	 	4.3	 	Payment by Shipper and WPX. Williams shall provide Shipper and WPX with the
necessary information and authorization to allow electronic payment to Williams’ designated
account. On the twenty-fifth (25th) Day of each Month, Shipper and WPX, as appropriate
shall remit payment electronically for all amounts due Williams as set forth on the
statement described in Section 4.2. If the twenty-fifth (25th) Day of the Month is a
Saturday, Sunday or legal holiday, then payment shall be made before the twenty-fifth
(25th) Day of the Month on a Day which is not a Saturday, Sunday or legal holiday.

 

 

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	 	4.4	 	Payment by Williams. Shipper shall provide Williams with the necessary
information and authorization to allow electronic payment to Shipper’s designated account.
On the twenty-fifth (25th) Day of each Month, Williams shall remit payment electronically
for all amounts due Shipper as set forth on the statement described in Section 4.2. If the
twenty-fifth (25th) Day of the Month is a Saturday, Sunday or legal holiday, then payment
shall be made before the twenty-fifth (25th) Day of the Month on a Day which is not a
Saturday, Sunday or legal holiday.
	 
	 	4.5	 	Williams’ Right to Offset. Williams shall have the right to offset the stated
amounts due Williams and Shipper and due Williams and WPX under this Agreement. Any such
offset, including the balance remaining after such offset, shall be reflected in Williams’
statement described in Section 4.2. The remaining balance shall be paid in accordance with
either Section 4.3 or Section 4.4 whichever applies.
	 
	 	4.6	 	Notice. Any notice called for in the Agreement shall be in writing and shall
be considered as having been given if delivered personally, by mail, by fax, or by express
courier, postage prepaid, by either Party to the other at the addresses given below or by
electronic means. Routine communications, including Monthly statements, shall be
considered as duly delivered when mailed by ordinary mail or by electronic means. Unless
changed upon written notice by either Party, the addresses are as follows

To: Williams Field Services Company, LLC

	 	 	 	 	 

	P.O. Box 645
	 	 	 	 
	One Williams Center, WRC3-7
	 	 	 	 
	Tulsa, OK 74101
	 	 	 	 
	Fax: (918) 573-9755
	 	 	 	 
	Statements:

	 	Attention:
	 	Accounting Services
	Contractual Notices:

	 	Attention:
	 	Marketing
	Volume Statements from Shipper:

	 	Attention:
	 	Measurement
	Liquids Elections

	 	Attention:
	 	Gas Management

 
To: Williams Production RMT Company LLC

Williams Production RMT Company LLC

Attn: Manager, Gas Management; 12th Floor

1001 17th Street; Suite 1200

Denver, CO 80202

303.606.4268

For Measurement:

Williams Production RMT Company LLC

Attn: Manager, Measurement; 9th Floor

1001 17th Street; Suite 1200

Denver, CO 80202

303.629.8467

Fax: 303.629.8249

To: Williams Production Ryan Gulch LLC

Williams Production Ryan Gulch LLC

Attn: Manager, Gas Management; 12th Floor

1001 17th Street; Suite 1200

Denver, CO 80202

303.606.4268

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

PAGE 21

For Measurement:

Williams Production Ryan Gulch LLC

Attn: Manager, Measurement; 9th Floor

1001 17th Street; Suite 1200

Denver, CO 80202

303.629.8467

Fax: 303.629.8249

To: WPX Energy Marketing LLC

WPX Energy Marketing LLC

Attn: Director Trading, Physical Trading

One Williams Center; 720 Level

Tulsa, OK 74172

918.573.1471

	5.	 	TERM
	 
	 	 	This Agreement shall become effective as of the Effective Date and continue for the life of any
lease dedicated or hereafter dedicated under this Agreement.

	 	5.1	 	Superseded Agreements. The following agreement(s) between the Parties is/are
hereby terminated and superseded by this Agreement as of the Effective Date: The Letter
Agreement dated July 13, 2009 between Williams Production RMT Company and Williams Field
Services Company, LLC.

	6.	 	EXHIBITS
	 
	 	 	This Agreement incorporates and is subject to the following Exhibits. If any term or condition
in the Exhibits conflicts with any specific term or condition in this Agreement, this Agreement
shall govern.

	 	 	 

	Exhibit A:

	 	Standard Terms and Conditions
	Exhibit B:

	 	Area of Interest
	Exhibit C:

	 	Receipt Points
	Exhibit D:

	 	Delivery Points
	Exhibit E:

	 	Fees and Fuel
	Exhibit F:

	 	Calculation of Shipper’s Gross Basic Processing Plant Products
	Exhibit G:

	 	Calculation of Shipper’s Gross Cryogenic Processing Plant Products
	Exhibit H:

	 	Plants MDQs and Cryogenic Processing MDQs
	Exhibit I:

	 	Agreements with RMT Firm Customers
	Exhibit J:

	 	CO2 Limits
	Exhibit K:

	 	Field Gathering Area MDQs and Monthly Average Receipt Point Pressure Limits
	Exhibit L:

	 	Excepted Gas
	Exhibit M:

	 	Sample Calculations of Fee Adjustment

	7.	 	FACILITIES.

	 	7.1	 	Williams Use of Shipper’s Facilities. Williams and Shipper will enter into a
commercially reasonable agreement granting Williams the right to use any facilities owned
by Shipper (whether existing now or constructed in the future), for the purpose of
providing Gas Gathering, Dehydrating, Treating or Processing, within the Area of Interest,
to permit Williams to cause expansion(s), if required, of such

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

PAGE 22

	 	 	 	facilities (provided
Williams funds such expansions) and to manage Williams’ firm capacity needs on such
facilities.
	 
	 	7.2	 	Access to Roads. To the extent a Party has the right to grant such access,
each Party shall grant the other, free of charge, access to roads within and around the
Area of Interest (whether existing now or constructed in the future); provided that,
between Shipper and Williams, the Party who grants such access shall bear all maintenance
costs related to such roads.
	 
	 	7.3	 	Williams Right of First Refusal. If at any time, Shipper decides to transfer
or sell any assets or facilities related to the provision of Gathering (including
compression), Treating, Dehydration, or Processing services in the Area of Interest,
Shipper will first permit Williams to match, in all material aspects, any bona fide offer
to purchase such assets or facilities, providing Williams sixty (60) Days notice to
evaluate the offer. Further, should Williams so acquire any such assets or facilities and
thereafter decide to re-transfer any of them, Williams will first permit Shipper to match,
in all material aspects, any bona fide offer to purchase such assets or facilities,
providing Shipper sixty (60) Days notice to evaluate the offer.
	 
	 	7.4	 	Third Party Conversions. RMT has entered into certain gas purchase agreements
with certain third parties (the “RMT Firm Customers”), which agreements are set out in
Exhibit I. To the extent shortfall or deficiency fees are collected from an RMT Firm
Customer Williams shall be entitled to the gathering and processing component(s) and RMT
shall be entitled to the transportation component(s) of such fees.
Williams understands that each RMT Firm Customer has a contractual right to convert its
gas purchase agreement to a gathering and processing agreement (an “RMT Firm Customer
G&PA”). RMT and Williams take the position that each such gas purchase agreement provides
that, upon its conversion to an RMT Firm Customer G&PA, the relevant RMT Firm Customer
would receive Basic Processing with Btu replacement, and would have no right to the Basic
Plant Products or to receive Cryogenic Processing services. The Parties hereto agree that
if an RMT Firm Customer exercises such conversion right, then Williams shall, acting on
behalf of RMT as its irrevocable agent with the power to bind RMT to an RMT Firm Customer
G&PA, prepare and, once approved by RMT, present to such RMT Firm Customer a proposed
form of RMT Firm Customer G&PA as is required by the relevant gas purchase agreement,
negotiate such proposed form to the extent necessary and except as to matters in which
Williams’ economic interest is expected to be exceeded by RMT’s economic interest, and
otherwise honor the other commercial terms of the applicable gas purchase agreement with
respect to conversion of such gas purchase agreement to an RMT Firm Customer G&PA, all as
those commercial terms did exist as of the Original Effective Date. Thereafter Williams
will provide Guaranteed Capacity for Gathering and Basic Processing services pursuant to
such Firm Customer G&PA (the “Firm Customer G&PA Obligations”), retaining for itself all
fees and any other consideration, including Net Liquid Margins pursuant to the allocation
in Exhibit E to this Agreement, associated with Gathering and Basic Processing and
returning to RMT the recovered Basic Plant Products attributable to such RMT Firm
Customer’s Gas. Provided however, if an RMT Firm Customer that exercises such conversion
right [***] Williams shall not be obligated to provide such Basic or Cryogenic Plant
Products to RMT. To the extent that RMT remains legally liable to an RMT Firm Customer
for the performance of Firm Customer G&PA Obligations, Williams will indemnify and hold
RMT harmless against such liability.
	 
	 	7.5	 	Third Party Deliveries. Except to the extent that any of the RMT Firm
Customers exercise their contractual right to require Williams Production RMT Company LLC
to provide to them Gathering and Processing services as set forth in their respective
agreements, as referenced in Section 7.4, Williams shall not commit Guaranteed Capacity for
third party Gas at the following Delivery Points or connecting pipelines:

	 	(a)	 	Colorado Interstate Gas Roan Cliff
	 
	 	(b)	 	Colorado Interstate Gas Daisy Ditch
	 
	 	(c)	 	Barrett sixteen-inch

 

 

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PAGE 23

	 	(d)	 	DeBeque Lateral

	8.	 	ENTIRE AGREEMENT
	 
	 	 	This Agreement, together with its Exhibits, contains the entire agreement of the Parties with
respect to the matters addressed herein and supersedes all prior and contemporaneous agreements,
representations and understandings of the Parties with respect to such matters. The Parties
represent and acknowledge that in executing this Agreement they do not rely on and have not
relied on any representation or statement, oral or written, which is not set forth in this
Agreement.

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

     IN WITNESS WHEREOF, the Parties hereto have executed quadruplicate original copies of this Agreement.

	 	 	 	 	 	 	 	 	 

	WILLIAMS FIELD SERVICES 

COMPANY, LLC	 	 	 	WILLIAMS PRODUCTION RMT

COMPANY LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Rory L. Miller
	 	 	 	By:
	 	/s/ Neal Buck
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Rory L. Miller
	 	 	 	 	 	Name: Neal Buck
	 

	 	Title: Senior Vice President
	 	 	 	 	 	Title: Vice President
	 
	 	 	 	 	 	 	 	 
	WPX ENERGY MARKETING, LLC	 	 	 	WILLIAMS PRODUCTION RYAN GULCH LLC
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Michael R. Fiser
	 	 	 	By:
	 	/s/ Neal Buck
	 

	 	 
	 	 	 	 	 	 
	 

	 	Name: Michael R. Fiser
	 	 	 	 	 	Name: Neal Buck
	 

	 	Title: Vice President
	 	 	 	 	 	Title: Vice President

Signature Page to the Amended and Restated Gas Gathering, Processing, Dehydrating and Treating Agreement

 

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “A”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

STANDARD TERMS AND CONDITIONS

References in this Exhibit A to Sections 1 through 9 refer to sections of the Agreement of
which this Exhibit is a part.

	A.	 	DEFINITIONS

	 	A.1	 	Adjusted Available Supplies shall have that meaning set out in E.1
	 
	 	A.2	 	Adjusted Fee shall have the meaning set out in Section 1.16.
	 
	 	A.3	 	Affiliate shall mean any person controlled, controlling or under common control with
the relevant person. For purposes of this definition, the term “control” (including
derivative terms) means the direct or indirect ability to direct the management and policy
of the relevant person, whether by ownership, or control of voting interests, contract or
otherwise.
	 
	 	A.4	 	Area of Interest shall mean that area described on Exhibit B.
	 
	 	A.5	 	Available Supplies shall have that meaning set out in E.1
	 
	 	A.6	 	Basic Processing shall mean the non-cryogenic liquefaction and removal of hydrocarbons
other than Condensate from Gas.
	 
	 	A.7	 	Basic Processing Plant shall mean those facilities used by Williams to provide services
covered by the Basic Processing and Treating Fee-Type set out Exhibit E regardless of
whether located in the Field.
	 
	 	A.8	 	Basic Processing Plant Fuel shall mean the number of MMBtus of Gas or other
hydrocarbons used or consumed in the operation of the Basic Processing Plant, including,
but not limited to, fuel, flared and vented Gas and such Gas as may be lost and unaccounted
for despite the prudent operation of the Basic Processing Plant.
	 
	 	A.9	 	British Thermal Unit or “Btu” shall mean the measurement unit for the amount of heat
required to raise the temperature of one (1) pound of water one (1) degree Fahrenheit at 60
degrees Fahrenheit.
	 
	 	A.10	 	Bypassed Shipper’s Gas shall mean the sum of Shipper’s Gas measured at (a) the Ryan
Gulch Custody Meter, and (b) the Starkey Gulch Custody Meter, less that volume of Gas
measured at the Willow Creek Plant inlet that is allocated to Shipper.
	 
	 	A.11	 	Carbon Fee shall mean any taxes, fees, allowances, credits, charges and other costs
imposed by any governmental or regulatory authority having proper jurisdiction thereof as
it relates to the control, monitoring or reporting of Greenhouse Gases incurred by Williams
which is attributable to any of the services provided herein for Shipper’s Gas.

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	A.12	 	CDP shall mean those Receipt Points that are central delivery point(s) for receipt of
Gas as set out in Exhibit C, as may be amended from time to time.
	 
	 	A.13	 	CIG shall mean Colorado Interstate Gas Company.
	 
	 	A.14	 	Condensate shall mean the liquid hydrocarbons that are generated from the Gas upstream
of either a Basic Processing Plant or a Cryogenic Processing Plant, except that it includes
those liquid hydrocarbons collected in Basic Processing Plant-inlet slugcatchers or
Cryogenic Processing Plant-inlet slugcatchers.
	 
	 	A.15	 	Contract Year shall mean each consecutive twelve Month period beginning the Original
Effective Date.
	 
	 	A.16	 	Core Area shall mean that subset of acreage within the Area of Interest that is set out
in Exhibit B within which Shipper owns an interest in Gas production as of the Original
Effective Date.
	 
	 	A.17	 	Cryogenic Processing shall mean the liquefaction and removal of hydrocarbons from Gas
through the use of a turbo-expander, lean oil or other high ethane recovery process.
	 
	 	A.18	 	Cryogenic Processing Plant shall mean those facilities used by Williams to provide
Cryogenic Processing services.
	 
	 	A.19	 	Cryogenic Processing Plant Fuel shall mean the number of MMBtus of Gas or other
hydrocarbons used or consumed in the operation of a Cryogenic Processing Plant, including,
but not limited to, fuel, flared and vented Gas and such Gas as may be lost and unaccounted
for despite the prudent operation of the Cryogenic Processing Plant.
	 
	 	A.20	 	Cryogenic Processing Plant Products shall mean those liquid hydrocarbon components
obtained by Cryogenic Processing, including, ethane, propane, iso-butane, normal butane,
and natural gasoline (pentanes and heavier hydrocarbons).
	 
	 	A.21	 	CTM shall mean custody transfer measurement.
	 
	 	A.22	 	Cubic Foot shall mean the volume of Gas occupying one cubic foot of space when such Gas
is at a base temperature of sixty degrees Fahrenheit (60° F) and a base pressure of 14.73
Psia and shall be calculated in accordance with ANSI/API 2530 where the factors for
Fpwl and Fhgt shall each be equal to one (1).
	 
	 	A.23	 	Current Fee shall mean the last applicable Adjusted Fee.
	 
	 	A.24	 	Day or Daily shall mean twenty-four (24) consecutive hours beginning at 9:00 am CST or
as designated by Williams.
	 
	 	A.25	 	Dehydrate, Dehydration or Dehydrating shall mean the removal of water vapor from Gas
other than by means of Field Dehydration..
	 
	 	A.26	 	Delivery Point(s) shall mean those point(s) described on Exhibit “D” where Shipper’s
Gas may be delivered.
	 
	 	A.27	 	Displaced Volume shall mean that volume of Shipper’s Gas that is within Shipper’s
Cryogenic Processing MDQ and that Williams elects to Cryogenically Process at the Echo
Springs Plant instead of at the Willow Creek Plant.
	 
	 	A.28	 	Dollar or “$” shall mean United States dollars.
	 
	 	A.29	 	Echo Springs Plant shall mean the Cryogenic Processing facility located in Carbon
County, Wyoming, and owned by Williams’ Affiliate, Wamsutter LLC.
	 
	 	A.30	 	Effective Date shall have the meaning set out in the first paragraph of this Agreement.
	 
	 	A.31	 	Excepted Gas shall have the meaning set forth at Section 1.1(c).

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	A.32	 	Fee-Type shall mean those categories of fees that apply to specific groups of services
and are set out in Exhibit E.
	 
	 	A.33	 	Field shall mean any point on the Gathering System upstream of either a Basic
Processing Plant or a Cryogenic Processing Plant.
	 
	 	A.34	 	Field Dehydration shall mean the removal of water vapor from Gas performed in the Field.
	 
	 	A.35	 	Fixed Fee shall have the meaning set out in Exhibit E.
	 
	 	A.36	 	Flowback shall mean the event of Gas flow that occurs during well completion operations.
	 
	 	A.37	 	Force Majeure shall have the meaning set out in Section B.3
	 
	 	A.38	 	Gas shall mean any mixture of gaseous hydrocarbons or of hydrocarbons and other gases,
in a gaseous state, consisting primarily of methane.
	 
	 	A.39	 	Gather, Gathered or Gathering shall mean the receipt of Gas by Williams for delivery to
Delivery Point(s), including compression and Field Dehydration where applicable.
	 
	 	A.40	 	Gathering Fuel shall mean the number of MMBtus of Gas used or consumed in the operation
of the Gathering System including, but not limited to, fuel, flared and vented Gas and such
Gas as may be lost and/or gained and unaccounted for despite the prudent operation of the
Gathering System.
	 
	 	A.41	 	Gathering System shall mean those facilities used by Williams to Gather Shipper’s Gas.
	 
	 	A.42	 	GPA shall mean Gas Processors Association.
	 
	 	A.43	 	Greenhouse Gas shall mean carbon dioxide, hydrocarbon, methane, nitrous oxide, sulfur
hexafluoride, any perfluorocarbon, hydroflurocarbon and any and every other substance
designated as a greenhouse gas or the emission or release of which is restricted, limited
or controlled by any regulatory body or governmental authority at any time or from time to
time.
	 
	 	A.44	 	Gross Heating Value shall mean the total Btu content for a standard cubic foot of Gas
on a dry basis as determined by calculation from a compositional analysis using physical
properties of gases at 14.73 psia and sixty degrees Fahrenheit (60oF), as
prescribed by industry standards.
	 
	 	A.45	 	Guaranteed Capacity shall mean the capacity that Williams’ guarantees to have available
to provide the Gathering and Processing identified in Section 1 except during times of
capacity allocation pursuant to Section B.4.
	 
	 	A.46	 	Imbalance shall mean when the number of MMBtus of Shipper’s Gas received by Williams at
the Receipt Point(s), after subtracting Gathering Fuel and Basic Processing Plant Fuel,
Cryogenic Processing Plant Fuel, and Shrink, does not equal Shipper’s Confirmed
Nomination(s).
	 
	 	A.47	 	Interconnecting Pipeline(s) shall mean any pipeline connected immediately downstream of
the Delivery Point(s).
	 
	 	A.48	 	Mcf shall mean one thousand (1,000) Cubic Feet of Gas and shall be the unit of volume
typically utilized under this Agreement.
	 
	 	A.49	 	MDQ shall mean the maximum daily quantity of Gas expressed in Mcf/Day for which
Williams is obligated to provide to Shipper the services that are covered by (i) the Basic
Processing and Treating Fee-Type, as shown on Exhibit H, (ii) the Gathering Fee-Type, as
shown on Exhibit K, or (iii) Cryogenic Processing as shown on Exhibit H, as appropriate
based on the context.
	 
	 	A.50	 	MDQ Schedule shall mean the projected MDQ for ten (10) years at the points designated
in Exhibits H and K, shown in Monthly increments.

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	A.51	 	Minimize Dilution shall mean WPX’s obligation to make commercially reasonable efforts
to minimize potential dilution of the BTU content of the Gas entering the Echo Springs
Plant by submitting a cycle 1 nomination for transportation on CIG from the CIG Roan Cliffs
receipt point to the CIG Sand Springs delivery point by either primary path, or secondary
path through the Echo Springs Plant, a volume of Gas equal to or greater than the lesser of
(i) the capacity of WPX on CIG between the CIG Roan Cliffs receipt point and the CIG Sand
Springs delivery point, or (ii) WPX’s good faith estimate of the volume of Gas that will be
nominated by third parties from west of Sand Springs to the CIG mainline.
	 
	 	A.52	 	MMBtu shall mean one million (1,000,000) Btus.
	 
	 	A.53	 	MMcf shall mean one million (1,000,000) Cubic Feet of Gas.
	 
	 	A.54	 	Month or Monthly shall mean a calendar month commencing on the first Day of that
calendar month and ending on the last Day of that calendar month.
	 
	 	A.55	 	Net Liquid Margin shall mean the remainder obtained by subtracting “X” from “Y” where
“X” equals the sum of (i) Shipper’s pro-rata share of actual Cryogenic Processing Plant
Fuel or

Basic Processing Plant Fuel, as applicable, multiplied by the applicable [***] index
price as published in Gas Daily or an applicable [***] index price should such an index be
published (the “Index Price”), plus (ii) Shipper’s pro-rata share of actual Shrink
multiplied by the Index Price, plus (iii) Shipper’s pro-rata share of actual Plant Power,
plus (iv) T&F; and “Y” equals the actual price received by Shipper or WPX for Shipper’s
Plant Products or Shipper’s Cryogenic Processing Plant Products, whichever is applicable.
	 
	 	A.56	 	Non-Guaranteed Capacity shall mean that Williams does not at any time guarantee to have
the capacity available to provide the Gathering and Processing identified in Section 1;
however, should Williams have such capacity so available, Williams shall be obligated to
provide it to Shipper or WPX, as applicable, pro rata with all other holders of
Non-Guaranteed Capacity.
	 
	 	A.57	 	Parachute Complex shall mean Williams’ facilities located in Township 6 South, Range 96
West, North 1/2 of North East 1/4 of Section 33 and South 1/2 of South East 1/4 of Section 28 of
Garfield County Colorado.
	 
	 	A.58	 	Plant Power shall mean the cost of purchased electricity used or consumed in the
operation of a Basic Processing Plant or in the operation of a Cryogenic Processing Plant.
	 
	 	A.59	 	Plant Products shall mean those liquid hydrocarbon components obtained by Basic
Processing including, ethane, propane, iso-butane, normal butane, and natural gasoline
(pentanes and heavier hydrocarbons).
	 
	 	A.60	 	Process, Processed or Processing shall mean the liquefaction and removal of Plant
Products or Cryogenic Processing Plant Products from Gas through Basic Processing or
through Cryogenic Processing, as applicable.
	 
	 	A.61	 	Receipt Point(s) shall mean the upstream flange(s) of the Gathering System to which an
individual well or a central delivery point is connected where
Shipper has a right, title
and/or interest in Gas. Exhibit “C” is a list of all Receipt Points as of the Original
Effective Date.
	 
	 	A.62	 	RMT Firm Customers shall mean those companies who are parties to the agreements with
Williams Production RMT Company LLC that are listed on Exhibit I.
	 
	 	A.63	 	Royalties shall mean the actual amounts paid by Shipper to the royalty holders
attributable to the Shipper’s Gas.
	 
	 	A.64	 	Ryan Gulch Custody Meter shall mean that custody-quality meter, Williams ID#20402-01,
located between the outlet of the Ryan Gulch compressor station and the inlet of the Willow
Creek Plant.
	 
	 	A.65	 	Shipper’s Confirmed Nominations shall have the meaning set out in Section E.3

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	A.66	 	Shipper’s Gas shall mean all Gas produced from the Area of Interest in which Shipper or
any Affiliate of Shipper, including, but not limited to, WPX, has a present or future
right, title, or interest, whether such right, title or interest is now owned or hereafter
acquired, including Gas that is produced from third party owned leases in the Area of
Interest and purchased by Shipper or any Affiliate of Shipper, plus all third party owned
Gas produced from Shipper or Shipper’s Affiliate-operated wells, as the case may be, that
Shipper or Shipper’s Affiliate, as applicable, has the right to market, other than such
purchased Gas and/or such third party owned Gas that Williams elects pursuant to Section
2.7 to exclude from Shipper’s Gas.
	 
	 	A.67	 	Shipper’s Operator shall mean the operator of the facilities upstream of a given
Receipt Point. Shipper’s Operator, however, may also operate CTM equipment located
downstream of a given Receipt Point as provided in Section D.5. Shipper’s Operator may be
either Shipper, Shipper’s Affiliate, or a third party acting on Shipper’s behalf. When
Shipper’s Operator is a third party acting on Shipper’s behalf, it shall be Shipper’s
responsibility to cause such third party to comply with those terms of this Agreement which
refer to Shipper’s Operator.
	 
	 	A.68	 	Shrink shall mean the Btu reduction of Gas attributable to Processing.
	 
	 	A.69	 	Starkey Gulch Custody Meter shall mean that custody-quality meter, Williams ID# 20400,
located between the tailgate of the Parachute Complex and the inlet of Williams’ 30-inch
Parachute Lateral pipeline that extends to the inlet of the Willow Creek Plant.
	 
	 	A.70	 	T&F shall mean the actual pipeline transportation and fractionation expense charged to
Shipper, or WPX as applicable, for Shipper’s Plant Products or Cryogenic Processing Plant
Products sold at the tailgate of Basic Processing Plants or Cryogenic Processing Plant to
Williams or Williams’ Affiliates.
	 
	 	A.71	 	Telemetering Facilities shall mean electronic monitoring facilities, including but not
limited to electronic flow measurement facilities, remote terminal units and all other end
devices and transmitters used to calculate pressure, temperature, differential pressure,
flow and valve position.
	 
	 	A.72	 	Treat, Treating, Treater, or Treatment shall mean the removal, reduction or dilution of CO2 in Gas.
	 
	 	A.73	 	Variable Fee shall have the meaning set out in Exhibit E.
	 
	 	A.74	 	Williams’ Nomination System shall mean Williams’ nomination and scheduling system,
including any modification or replacement thereof which Williams may require. Williams
shall provide 30 Days written notice to Shipper prior to making any such modifications or
replacements.
	 
	 	A.75	 	Williams Partners L.P. shall mean the master limited partnership that is a parent
company of Williams or a successor thereof.
	 
	 	A.76	 	Willow Creek Agreement shall mean the letter agreement between Shipper and Williams for
the gathering, processing and treating at Williams Willow Creek Processing Plant dated July
13, 2009.
	 
	 	A.77	 	Willow Creek Plant shall mean the Cryogenic Processing and Basic Processing and
Treating facility located near Greasewood, Colorado and owned by Williams.

	B.	 	OPERATING PROVISIONS

	 	B.1	 	Operational Control. Williams shall be entitled to complete operational control of its
facilities and shall operate its facilities in a manner that, in Williams’ sole opinion, is
consistent with its obligations under this Agreement. However, this Section B.1 shall not
be interpreted to relieve Williams of its obligations under this Agreement.
	 
	 	B.2	 	Maintenance. Williams shall, without liability to Shipper, be entitled to perform such
maintenance, testing, alteration, modification, repair or replacement of the Gathering
System and/or Basic Processing Plant and/or Cryogenic Processing Plant, or any part
thereof, as would be done by a prudent operator (“Maintenance”), even if it requires the
allocation of capacity pursuant to Section B.4. Williams will

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	provide notice to Shipper of scheduled maintenance that is expected to temporarily reduce
Williams’ ability to provide the services in this Agreement at least thirty (30) Days
prior to the commencement of such maintenance.
	 
	 	B.3	 	Force Majeure. Neither Williams nor Shipper shall be liable in damages to the other
for inability to perform under this Agreement due to an event of Force Majeure. As used
herein, the term “Force Majeure” shall mean any act, omission, or circumstances occasioned
by or in consequence of any Acts of God, blockades, insurrections, riots, epidemics, flood,
washouts, landslides, mudslides, earthquakes, storms, threat of hurricanes and tropical
storms, extreme hot, cold, or freezing weather, lightning, fire, restraint of rulers and
peoples, civil disturbances, war, explosions, mechanical failure, structural failure,
unavailability or shortages of third party provided electric power, breakage of or accident
to machinery, line of pipe, platform or wells, the inability or failure of downstream or
upstream pipelines to deliver or receive, the order of any court or governmental authority
having jurisdiction, any change in any applicable regulation materially affecting the
operation of the facilities or any other cause of a similar nature, whether of the kind
herein enumerated or otherwise, not reasonably within the control of the Party claiming
suspension and which by the exercise of due diligence such Party is unable to prevent or
overcome. Failure to prevent or settle any strike or strikes shall not be considered a
matter within the control of the Party claiming suspension. With regard to the
installation of new facilities or modifications to existing facilities, delay or inability
to obtain any necessary permits, licenses, notices to proceed, or rights-of-way from a
regulatory agency or landowner after an application or request by Williams shall be deemed
to be a Force Majeure event, provided Williams has given reasonable notice of any planned
suspension of service to Shipper. Force Majeure shall not relieve either Party of liability
in the event of its concurring negligence and shall only relieve the non-performing Party
from liability for failure to perform under this Agreement for so long as such Party is
making reasonable efforts to remedy the situation. Force Majeure shall not relieve either
Party of its obligation to pay money due under this Agreement. Williams shall provide to
Shipper a notice of each event of Force Majeure, to include reasonable information
concerning the event, as soon as practicable following the occurrence thereof.
	 
	 	B.4	 	Allocation of Capacity. Notwithstanding any other term of this Agreement, if for any
Day Williams determines that the capacity of its Gathering facilities and/or Basic
Processing Plant(s) and/or Cryogenic Processing Plant(s) is constrained, Williams shall,
without liability to Shipper, allocate the available capacity as follows:

	 	(a)	 	Capacity shall first be allocated pro rata to all shippers with Guaranteed
Capacity based upon the lower of their respective (i) maximum daily quantities or
MDQs as applicable, (ii) Available Supplies or (iii) Adjusted Available Supplies; and
	 
	 	(b)	 	Any remaining capacity shall be allocated pro rata to all shippers with
Non-Guaranteed Capacity based upon the lower of their respective (i) maximum daily
quantities or MDQs, as applicable, (ii) Available Supplies or (iii) Adjusted
Available Supplies.

	 	 	 	However, if Williams can identify the location of the constraint, then Williams shall,
without liability to Shipper, endeavor to allocate the capacity available at the
constraint location only among those shippers whose Gas is affected by the constraint.
	 
	 	B.5	 	Access, Easements and Rights-of-Way. Each Party shall provide the other Party with
access to its facilities as is necessary and convenient for the other Party to perform its
obligations under this Agreement. Each Party grants to the other Party the use of all
easements and rights-of-way held by each Party that are necessary and convenient for each
Party to perform its obligations under this Agreement. Such use shall include, but not be
limited to, those rights under a Party’s oil and Gas lease(s) or other rights to construct,
operate, and maintain pipelines and appurtenant facilities for the purpose of Gathering
Gas. Each Party shall abide by the rules, regulations and restrictions as may be imposed
on it by access, easements, rights-of-way or other relevant agreements. Each Party shall be
responsible for maintaining such access, easements, rights-of-way and other relevant
agreements at its sole cost and expense.
	 
	 	B.6	 	Shipper’s Delivery Pressure. Shipper shall deliver Shipper’s Gas to the Receipt
Point(s) at pressure(s) sufficient to cause it to enter Williams’ facilities; however, such
pressure(s) shall not exceed the

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	maximum allowable operating pressure of Williams’ facilities (“Williams’ MAOP”).
Williams’ MAOP for a given facility may be revised from time to time by Williams in its
sole discretion. Williams shall provide Shipper timely notice of any such MAOP revisions.
Unless otherwise expressly provided in Section 1, Williams is not obligated to modify the
pressure(s) in its facilities in order to cause the entry of Shipper’s Gas into its
facilities. Shipper shall equip its compression equipment, if any, with:

	 	(a)	 	over pressurization protection devices in accordance with ANSI B31.8 to
prevent delivery pressure in excess of Williams’ MAOP;
	 
	 	(b)	 	Gas cooling to prevent delivery temperatures in excess of 120° F into
Williams’ facilities; and
	 
	 	(c)	 	pulsation dampening equipment, as necessary, to minimize pulsation induced
measurement errors to less than two percent (2%) peak-to-peak square root error.

	 	B.7	 	Williams’ Delivery Pressure. Williams shall deliver Gas to the Delivery Point(s) at
whatever pressure(s) exist(s) in Williams’ facilities. Williams is not obligated to modify
the pressure(s) in its facilities in order to cause the entry of Gas into the Delivery
Point(s).
	 
	 	B.8	 	Noise Regulation. If any regulatory body having jurisdiction over the Basic Processing
Plant, Cryogenic Processing Plant, or Gathering System imposes stricter noise standards on
equipment used to Gather or Process Shipper’s Gas than exist as of the date of this
Agreement, the Parties shall share the costs to construct or modify existing facilities to
meet the newly imposed standards in the following manner: 1) the first one million dollars
($1,000,000) shall be paid by Williams; 2) the second one million dollars ($1,000,000)
shall be allocated amongst shippers based on receipt volumes at the applicable facilities
and Shipper shall pay its pro rata share thereof; and 3) any remaining amount shall be
allocated half to Williams and half shall be allocated amongst shippers based on receipt
volumes at the applicable facilities and Shipper shall pay its pro rata share thereof.
	 
	 	B.9	 	Greenhouse Gas and Other Environmental Regulation. If following the Effective Date,
any regulatory body or governmental authority having jurisdiction imposes emissions or
other standards related to Greenhouse Gases or other environmental performance standards or
regulation, including without limitation, a Carbon Fee, affecting the facilities or
equipment used to provide services for Shipper’s Gas, Shipper shall be responsible for its
pro rata share of Williams’ Carbon Fees and costs to construct new or modify existing
facilities to meet such standards or regulation.
	 
	 	B.10	 	Communications between the Parties. The Parties shall each communicate with the other
regarding operational issues, providing reasonable notice of significant volume and
capacity changes, including without limitation, MAOP, maintenance, shut-in of wells,
completions, downstream curtailments and Flowbacks.

	C.	 	GAS QUALITY

	 	C.1	 	Gas Quality at Receipt Point(s). Shipper’s Gas at the Receipt Point(s) shall be free
of oxygen, hydrocarbons in their liquid state, and water in its liquid state and, unless
otherwise expressly provided in Section 1, shall conform to the most restrictive quality
specifications required from time to time by the Interconnecting Pipeline(s). If at any
time Shipper’s Gas at the Receipt Point(s) fails to conform to such quality specifications,
the Party discovering such deficiency shall give the other Party written or verbal notice
of the deficiency and Shipper shall install, at its expense, facilities upstream of the
Receipt Point(s) designed to remove such non-conforming substances. If Shipper fails to
timely remedy the deficiency, Williams may refuse to accept further deliveries of
non-conforming Shipper’s Gas. Should Shipper introduce non-conforming substances into
Williams’ pipelines, compressor stations, plants, or other facilities, except in conformity
with the following sentence, then Shipper shall be liable for all costs incurred by
Williams as a result of the introduction of non-conforming substances, including costs
incurred by Williams to remediate downstream facilities (but excluding the cost of normal
maintenance, such as normal pigging activities). Should Williams choose to continue to
receive Shipper’s non-conforming substances into Williams’ pipelines, compressor stations,
plants, or other facilities, after receiving notice or otherwise becoming aware of the
non-conformity, then Shipper shall not be liable for

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	any costs incurred by Williams as a result of the introduction of the non-conforming
substance, including costs incurred by Williams to remediate downstream facilities.
	 
	 	C.2	 	Removal of Liquifiable Hydrocarbons in the Field. Shipper’s Gas shall not be processed
for removal of liquifiable hydrocarbons prior to its receipt by Williams at the Receipt
Point(s) other than by the use of conventional mechanical liquid-Gas separators operated at
or above ambient temperatures. Shipper shall own and be responsible for any liquid
hydrocarbons removed by this method from Shipper’s Gas.
	 
	 	C.3	 	Water Disposal. To the extent that Williams Dehydrates Shipper’s Gas, Williams shall
dispose of Shipper’s water by evaporation. If evaporating Shipper’s water is ever
disallowed for any reason or is deemed to be uneconomical by Williams, Shipper shall make
alternate arrangements to dispose of Shipper’s water at Shipper’s sole cost and expense and
Shipper shall reimburse Williams for any costs incurred by Williams in disposing of or
delivering Shipper’s water. Shipper shall release, indemnify and defend Williams from and
against any and all damages, claims, actions, expenses, penalties and liabilities,
including attorney’s fees, arising from personal injury, death, property damage,
environmental damage, pollution, or contamination relating to the disposal of Shipper’s
water by either evaporation or the alternate arrangement(s) selected by Shipper. This
Section C.3 by itself does not obligate Williams to Dehydrate Shipper’s Gas.
	 
	 	C.4	 	CO2 Disposal. Shipper will retain ownership of all CO2
associated with Shipper’s Gas. To the extent that Williams removes CO2 from
Shipper’s Gas, Williams shall dispose of Shipper’s CO2 by venting, except for
such CO2 as is transported to CO2 Delivery Points as provided for by
Section 1.9 of this Agreement. If venting Shipper’s CO2 is ever disallowed for
any reason or is deemed to be uneconomic by Williams, Shipper shall make alternate
arrangements to dispose of Shipper’s CO2 at Shipper’s sole cost and expense and
shall reimburse Williams for any costs incurred by Williams in delivering Shipper’s
CO2. Shipper shall release, indemnify and defend Williams from and against any
and all damages, claims, actions, expenses, penalties and liabilities, including attorney’s
fees, arising from personal injury, death, property damage, environmental damage,
pollution, or contamination relating to the disposal of Shipper’s CO2 by either
venting or the alternate arrangement(s) selected by Shipper.
	 
	 	C.5	 	Gas Quality at Delivery Point(s). Subject to Section 1 and Shipper’s performance under
Section C.1, Gas delivered by Williams at the Delivery Point(s) for the account of Shipper
shall conform to the most restrictive quality specifications required from time to time by
the Interconnecting Pipeline(s).
	 
	 	C.6	 	Gross Heating Value and Component Analysis. If an on-line chromatograph exists at a
Receipt Point, the component analysis of the Gas shall be performed by Gas chromatography
in accordance with GPA 2261 or any pertinent revision(s) thereto or replacement(s) thereof.
If the component percentages fall outside the limits of GPA 2261, then the Party operating
the CTM equipment shall make a reasonable judgment as to the accuracy of the component
analysis. If an on-line chromatograph does not exist at a Receipt Point, the component
analysis and Gross Heating Value of the Gas shall be determined and calculated at least
once each year at the wellhead and Monthly by composite sampler at the CDPs by whomever is
operating the CTM equipment, as determined in Section D.5. The component analysis and
Gross Heating Value of the Gas shall be based on spot samples or continuous samples at the
choice of the Party operating the CTM equipment. If the component percentages fall outside
the limits of GPA 2261, then the Party operating the CTM equipment shall make a reasonable
judgment as to the accuracy of the component analysis. If neither Party objects in writing
to the results within sixty (60) Days after their delivery, such results shall become
conclusive. If either Party objects in writing to the results within sixty (60) Days after
their delivery, then: in the case of spot samples, a re-sampling, redetermination and
recalculation shall be performed by a third party acceptable to both Parties and such third
party’s results shall be used; and in the case of continuous samples or on-line analysis,
the analyzer shall be tested for accuracy according to GPA 2261 and, if warranted, a
recalculation of the components shall be made by a means acceptable to the Parties. The
cost of any re-sampling, retesting, redetermination and/or recalculation shall be borne by
the objecting Party.
	 
	 	C.7	 	Correction for Water Vapor. If a hygrometer exists at a Receipt Point, the Mcf or
Gross Heating Value of the Gas shall be determined by hygrometry. If a hygrometer does not
exist at a Receipt Point, the Mcf or Gross Heating Value, as determined by the Party
responsible for the CTM, of the Gas shall be

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	corrected for water vapor content in accordance with GPA 2172. Gas having a water vapor content
of greater than seven (7) pounds per MMcf at CTM shall be considered fully saturated. Gas
having a water vapor content of less than or equal to seven (7) pounds per MMcf at CTM
shall be considered dry.
	 
	 	C.8	 	Oxygen Requirements. Shipper shall notify Williams thirty (30) Days before beginning
vacuum operation upstream of a Receipt Point or before beginning any operation which has
the potential to introduce oxygen into the Gas stream upstream of the Receipt Point(s), and
upon commencement of any such operation, the Receipt Point(s) will also be considered an
“OP Receipt Point”. Shipper shall prevent the introduction of oxygen into the Gathering
System and shall maintain an oxygen monitoring program whereby the Gas stream immediately
upstream of each OP Receipt Point is checked no less than once per week using appropriate
oxygen sensing equipment. Such monitoring shall be conducted in accordance with industry
standards and all test results shall be made available for Williams’ review upon Williams’
reasonable request.
	 
	 	 	 	Williams will monitor for oxygen in the Gathering Systems using both online and portable
oxygen analyzers. When Williams detects more than 6 ppm of oxygen originating from a
Receipt Point, Williams shall inform Shipper of such finding. If Williams determines that
the oxygen content poses an immediate integrity or safety concern Williams, at its sole
discretion, may blow down gathering lines and/or shut in the Receipt Point(s). If the
gathering line is blown down, the amount of Gas available from the Receipt Point(s) will
be reduced to account for the Gas lost as a result of the blow-down. Shipper shall, upon
notice from Williams that oxygen is detected, take immediate corrective action to prevent
future introduction of oxygen, and shall confirm such action in writing to Williams.
	 
	 	 	 	If the Receipt Point(s) is shut-in because of excessive oxygen, Williams shall resume flow
only upon confirmation from Shipper that corrective action has been taken to prevent
future introduction of oxygen.
	 
	 	 	 	Williams shall test the Receipt Point(s) within 24 hours after flow is resumed, or if the
flow was not interrupted, 24 hours after confirmation from the Shipper that the oxygen
sources have been eliminated by corrective action. In the event more than 6 ppm of oxygen
is still present, Shipper shall take additional corrective action to ensure oxygen is
eliminated from the Gas. At any time, Williams may, in Williams’ sole discretion, refuse
to accept further deliveries of Gas from any Receipt Point where in Williams’ opinion the
oxygen content poses an immediate integrity or safety concern.
	 
	 	 	 	If a Receipt Point introduces more than 6 ppm of oxygen into the Gathering System more
than once during the Term of the Agreement, Williams may require that Shipper, at
Shipper’s sole expense, install and maintain necessary equipment to monitor oxygen content
and to prevent the introduction of Gas containing more than 6 ppm of oxygen into the
Gathering System. In addition, Williams may require such Shipper to pay for the injection
of oxygen removing chemicals, and Shipper shall be liable for any and all damages arising
out of the existence of oxygen in Shipper’s Gas, including without limitation all repairs
to any of the Gathering Systems, Basic Processing Plants, Cryogenic Processing Plant(s) or
related facilities.

	D.	 	VOLUME

	 	D.1	 	Computation Factors. The specific gravity of the Gas shall be calculated by the Party
operating the CTM equipment and shall be adjusted for the difference between the specific
gravity in the ideal state and in the real state in accordance with industry standards.
The deviation of the Gas from Boyle’s law shall also be calculated by the operator of the
CTM equipment and shall be determined in accordance with industry standards, AGA
Transmission Measurement Committee Report No. 8 or its replacement. Both the specific
gravity of the Gas and the deviation of the Gas from Boyles’ law shall be based on the
component analysis obtained pursuant to Section C.6.
	 
	 	D.2	 	Determination of Temperature for Volume Calculation. The temperature of the Gas shall
be determined by an electronic temperature recording device installed by the operator of
the CTM equipment in accordance with other industry standards.

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	D.3	 	Correction of Volume due to Calculation Error. An error in volume calculation for a
given Receipt Point shall be corrected by the Party making such error for such period as
the error is determined to have existed, not to exceed two (2) years. In no event,
however, shall Williams be obligated to correct an error in volume calculation for a given
Receipt Point unless it resulted in an error of greater than one percent (1%) and 100
MMBtus per Month at the Receipt Point(s) during the correction period. Such correction
shall only be processed by Williams prospectively with the current Month’s business based
upon Shipper’s current allocation of the Available Supply at that Receipt Point as provided
by Shipper’s Operator.
	 
	 	D.4	 	Correction of Volume due to Reallocation by Shipper’s Operator. Shipper’s Operator
shall make prospectively any correction of volume due to a reallocation of the Available
Supply at a given Receipt Point.
	 
	 	D.5	 	Custody Transfer Measurement or “CTM”. CTM for any Receipt Point or Delivery Point in
existence as of the Original Effective Date shall be performed by whomever is providing CTM
at that Receipt Point or Delivery Point as of the Original Effective Date. However, if
Williams installs CTM equipment at any Receipt Point or Delivery Point after the Original
Effective Date, then CTM at that Receipt Point or Delivery Point shall be performed by
Williams. Except as otherwise provided in this Section D, all CTM and CTM equipment shall
comply with current industry standards. Williams may install and operate electronic flow
measurement equipment to perform CTM, in which case it shall be installed and operated in
accordance with the applicable methods and standards that have been approved by the
American Petroleum Institute (“API”).
	 
	 	D.6	 	Notice of CTM Equipment Tests. Tests of the CTM equipment shall be performed by the
operator of the CTM equipment at least monthly. Where Williams is operating the CTM
equipment, Williams shall give Shipper’s Operator forty-eight (48) hours notice of the time
and location of any tests of the CTM equipment so that Shipper’s Operator may be present.
Where Shipper’s Operator is operating the CTM equipment, Shipper’s Operator shall give
Williams forty-eight (48) hours prior notice of the time and location of any tests of the
CTM equipment so that Williams may be present. If the Party not operating the CTM
equipment is unsatisfied with the test, it shall notify the operator of the CTM equipment
to perform a retest. The cost of retesting shall be paid by the Party requesting the
retest unless the retest shows a difference between the registration of the CTM equipment
and test instrument of greater than one percent (1%) and 100 MMBtus, in which case the cost
of retesting shall be paid by the Party who did not request the retest. Any CTM equipment
found to be measuring inaccurately shall be promptly restored to accuracy by the operator
of the CTM equipment.
	 
	 	D.7	 	Check Meter. Either Party may install and operate a check meter at its own expense to
check the CTM equipment. Except as provided in Section D.8, the readings of the CTM
equipment shall govern. The check meter shall be installed so as not to interfere with the
operation of the CTM equipment. Pulsation filters may be required if unacceptable square
root error or gauge line error shift occurs as a result of the check meter. If a
disagreement arises regarding the source of pulsation, a third party consultant shall be
selected by the Parties to determine the source of the pulsation. The Party responsible
for the source of the pulsation shall pay all the consulting fees and costs associated with
identifying and eliminating the source of the pulsation. Shipper will use the alternate
taps on the meter run for check measurement. If alternate taps do not provide a viable
option, Shipper will seek variances from the appropriate regulatory entities and Williams
to use Williams’ meter taps.
	 
	 	D.8	 	Correction of CTM Equipment Inaccuracies. If any test conducted pursuant to Section
D.6 reveals an inaccuracy of greater than one percent (1%) and 100 MMBtus in the
registration of the CTM equipment, the volume of Gas measured by such CTM equipment shall
be corrected for such period as the inaccuracy is confirmed to have existed, not to exceed
one (1) year, or, if not confirmable, then for such period as the Parties agree upon, not
to exceed one (1) year. If the correction period is not confirmable and is not agreed
upon, then the correction period shall extend back one-half (1/2) of the time elapsed since
the CTM equipment was last calibrated, not to exceed one (1) year. The volume of Gas
actually received per Day through the CTM equipment shall be determined on the basis of the
best data available using the first of the following methods which is feasible:

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	(a)	 	by using the registration of the other Party’s check meter if registering
accurately; or
	 
	 	(b)	 	by calibration, test, or mathematical calculation if the percentage of
inaccuracy is ascertainable with reasonable certainty; or
	 
	 	(c)	 	by estimating the volume of Gas received by comparison to receipts during
prior Months under similar conditions when the CTM equipment was registering
accurately.

	 	 	 	In no event, however, shall Williams be obligated to correct any volume measurement
inaccuracy for given CTM equipment unless it resulted in an inaccuracy of greater than one
percent (1%) and 100 MMBtus per Month at the affected Receipt Point during the correction
period. Such correction shall only be processed by Williams prospectively with the
current Month’s business based upon Shipper’s current allocation of the Available Supply
at the affected Receipt Point as provided by Shipper’s Operator.
	 
	 	D.9	 	Measurement During Periods of CTM Equipment Failure. In the event of any Force Majeure
event causing the failure of any CTM equipment employed in the performance of this
Agreement which prevents Williams from obtaining or recovering actual measurement data from
the CTM equipment, Williams shall have the right to estimate the volume of Gas received by
one of the following methods and in the following order: (i) where operating check meters
are in place, measurement from such check meters shall be employed until such time as the
failed CTM equipment service is restored; (ii) aggregation of measurement data upstream or
downstream of the CTM equipment failure which reasonably represents that volume of Gas
flowing thought the failed CTM equipment until such time as the failed CTM equipment
service is restored; and (iii) comparison to receipts during the prior Months under similar
conditions until such time as Williams is again able to obtain accurate data from the CTM
equipment, but in no event for a period longer than fourteen (14) Days. Any estimated
volumes relied upon under such circumstances shall be considered actual volumes for such
period of time.

	E.	 	NOMINATIONS AND SCHEDULING

	 	E.1	 	Available Supply. Two (2) Days prior to the beginning of each Month, Shipper’s
Operator shall submit via Williams’ Nomination System the number of MMBtus of Gas that
Shipper’s Operator will make available at each Receipt Point for the account of Shipper
(“Available Supply(ies)”). For each Day, Shipper shall submit via Williams’ Nomination
System a numerical ranking of Shipper’s Available Supplies to indicate the priority in
which Shipper desires its Available Supplies to be scheduled for delivery by Williams (the
lower the number the higher the priority). Failure by Shipper to timely submit such
ranking shall result in the receipt of deliveries from the Available Supplies on a pro rata
basis. Williams may adjust Available Supply when historical production or current data
from Williams’ Telemetering Facilities evidences that the Available Supply is inaccurate
(“Adjusted Available Supply”).
	 
	 	E.2	 	Daily Nomination Procedure. For each, Day Shipper shall submit nomination(s) via
Williams’ Nomination System of the number of MMBtus of Shipper’s Gas that Shipper desires
Williams to deliver at the Delivery Point(s). The total of such nomination(s) when
combined with Gathering Fuel, Basic Processing Plant Fuel, Cryogenic Processing Plant Fuel,
and Shrink shall not exceed the applicable MDQ unless Williams otherwise consents.
Multiple nominations shall be numerically ranked by Shipper to indicate the priority in
which Shipper’s nominations are to be scheduled for delivery by Williams (the lower the
number the higher the priority). Failure by Shipper to rank its nominations shall result
in the scheduling of Shipper’s nominations on a pro rata basis. Each nomination shall have
sufficient detail to meet the nomination requirements of the Interconnecting Pipeline(s) to
which it is nominated. Any nomination, or any part thereof, which fails to satisfy all of
the foregoing requirements or such additional or alternate reasonable requirements as
Williams may hereafter present to Shipper shall be deemed invalid.
	 
	 	E.3	 	Scheduling Nominations. Shipper’s valid nomination(s) shall be scheduled for delivery
by Williams to the extent that:

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	i.	 	Available Supply(ies) or Adjusted Available Supply(ies) is/are sufficient
to support the nomination(s) plus Gathering Fuel, Basic Processing Plant Fuel,
Cryogenic Processing Plant Fuel, and Shrink;
	 
	 	ii.	 	Williams has received confirmation request(s) from the appropriate
Interconnecting Pipeline(s); and
	 
	 	iii.	 	Williams has the capacity to provide the level of service specified in
Section 1.2.

	 	 	 	Upon being scheduled for delivery by Williams, such nominations shall be referred to
herein as “Shipper’s Confirmed Nomination(s)”. Shipper may view Shipper’s Confirmed
Nomination(s) through Williams’ Nomination System.
	 
	 	E.4	 	Reducing Previously Confirmed Nominations. Whenever an Interconnecting Pipeline(s)
requires Williams to reduce confirmed nominations, Williams shall, without liability,
effect such reduction by reducing pro rata all confirmed nominations to that
Interconnecting Pipeline(s). However, if Williams identifies the shipper(s) responsible
for the reduction being required by the Interconnecting Pipeline(s), Williams shall,
without liability to Shipper, endeavor to reduce only the confirmed nominations of the
responsible shipper(s).

	F.	 	BALANCING

	 	F.1	 	Imbalance and Balancing. If the number of MMBtus of Shipper’s Gas received by Williams
at the Receipt Point(s), after subtracting Gathering Fuel, Basic Processing Plant Fuel,
Cryogenic Processing Plant Fuel, and Shrink, do not equal Shipper’s Confirmed
Nomination(s), an “Imbalance” exists. If the number of MMBtus of Shipper’s Gas received by
Williams at the Receipt Point(s), after subtracting Gathering Fuel, Basic Processing Plant
Fuel, Cryogenic Processing Plant Fuel, and Shrink, are less than Shipper’s Confirmed
Nomination(s), a “Positive Imbalance” exists. If the number of MMBtus of Shipper’s Gas
received by Williams at the Receipt Point(s), after subtracting Gathering Fuel, Basic
Processing Plant Fuel, Cryogenic Processing Plant Fuel, and Shrink, are greater than
Shipper’s Confirmed Nomination(s), a “Negative Imbalance” exists. The term “Balance” or
“Balancing” refers to equalizing the number of MMBtus of Shipper’s Gas received by Williams
at the Receipt Point(s) with the number of MMBtus constituting Shipper’s Confirmed
Nomination(s) plus Gathering Fuel, Basic Processing Plant Fuel, Cryogenic Processing Plant
Fuel, and Shrink.
	 
	 	F.2	 	Daily Balancing. Each Day Shipper shall cause the number of MMBtus of Shipper’s Gas
being delivered at the Receipt Point(s) to equal as closely as practicable Shipper’s
Confirmed Nomination(s) plus Gathering Fuel, Basic Processing Plant Fuel, Cryogenic
Processing Plant Fuel, and Shrink. Whenever the number of MMBtus of Shipper’s Gas being
delivered at the Receipt Point(s) is insufficient to support Shipper’s Confirmed
Nomination(s) plus Gathering Fuel, Basic Processing Plant Fuel, Cryogenic Processing Plant
Fuel, and Shrink, Shipper shall promptly increase its Daily delivery such that the number
of MMBtus of Shipper’s Gas being delivered at the Receipt Point(s) equals as closely as
practicable Shipper’s Confirmed Nomination(s) plus Gathering Fuel, Basic Processing Plant
Fuel, Cryogenic Processing Plant Fuel, and Shrink. Whenever the number of MMBtus of
Shipper’s Gas being delivered at the Receipt Point(s) exceeds Shipper’s Confirmed
Nomination(s) plus Gathering Fuel, Basic Processing Plant Fuel, Cryogenic Processing Plant
Fuel, and Shrink, Shipper shall promptly reduce its Daily delivery such that the number of
MMBtus of Shipper’s Gas being delivered at the Receipt Point(s) equals as closely as
practicable Shipper’s Confirmed Nomination(s) plus Gathering Fuel, Basic Processing Plant
Fuel, Cryogenic Processing Plant Fuel, and Shrink. If Shipper does not promptly reduce its
Daily delivery, Williams may cause such reduction in Shipper’s Daily delivery at whichever
Receipt Point(s) Williams deems appropriate. Notwithstanding the foregoing, Shipper may
request in writing the right to create a Daily Imbalance when necessary to counteract a
prior Daily Imbalance. Whether such request will be granted is within the sole discretion
of Williams.
	 
	 	F.3	 	Monthly In-Kind Balancing. If the cumulative Imbalance reflected on the Monthly
statement submitted to Shipper pursuant to Section 4.2 is greater than Shipper’s Confirmed
Nomination(s) during the statement period, then Shipper shall Balance with Williams by
reducing the Imbalance Gas as closely as practicable to zero (0) during the Month following
the delivery of such statement (“Balancing Period”)

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	in the manner described in (i.) or (ii.) below. Williams shall advise Shipper of the
number of MMBtus of Gas which must be nominated or nominated and produced by Shipper for
each Day during the Balancing Period in order to Balance (“Daily Balance Gas”). Shipper
shall not submit Daily nominations during the Balancing Period whose total exceeds the
applicable MDQ plus the Cryogenic Processing MDQ unless Williams otherwise consents in
writing. Shipper’s nomination of Daily Balance Gas shall receive the highest priority of
Shipper’s nominations.

	 	i.	 	When a Positive Imbalance exists, Shipper shall include in its Daily
nominations and Williams shall confirm during the Balancing Period a nomination of
Daily Balance Gas, specifically designated as such, and Shipper shall deliver
sufficient Gas to fulfill its Daily nominations.
	 
	 	ii.	 	When a Negative Imbalance exists, Shipper shall include in its Daily
nominations and Williams shall confirm during the Balancing Period a nomination of
Daily Balance Gas, specifically designated as such, but Shipper shall only deliver
sufficient Gas to fulfill its Daily nominations less the Daily Balance Gas
nomination.

	 	 	 	Both Parties recognize that Williams’ ability to schedule Daily Balance Gas according
to (i.) and (ii.) above is dependent upon the cooperation of third parties. If on any
given Day during the Balancing Period the cooperation of third parties is not
forthcoming, the Balancing Period shall be extended one Day to account for the lost
Day. Notwithstanding the foregoing, prior to the initiation of any Balancing Period
Williams may, at its discretion, postpone Shipper’s obligation to Balance.
	 
	 	F.4	 	Monthly Cashout Balancing. As an alternative to in-kind balancing as described in
Section F.3, Williams may at its sole discretion choose to balance with Shipper by means of
a cashout. Such cashout shall be calculated by multiplying Shipper’s cumulative Imbalance
in MMBtus by the price Shipper received in that Month for the sale of its Gas at the
Delivery Point(s) (“Cumulative Imbalance Value”). If Shipper’s cumulative Imbalance is a
Negative Imbalance, Williams shall at its sole discretion make a cash payment to Shipper
for the Cumulative Imbalance Value or credit Shipper’s invoice for service under this
Agreement for the Cumulative Imbalance Value, such credit may not be spread over more than
two (2) billing periods. If Shipper’s cumulative Imbalance is a Positive Imbalance,
Williams shall include the Cumulative Imbalance Value on Shipper’s next billing statement
and Shipper shall make payment to Williams in accordance with Section 4.3 of the Agreement.
	 
	 	F.5	 	Balancing With Interconnecting Pipeline(s). Whenever an Interconnecting Pipeline
requires Williams to balance, Williams may require Shipper to Balance according to Section
F.3 and the period in which to Balance shall be whatever balancing period is being imposed
upon Williams by the Interconnecting Pipeline.
	 
	 	F.6	 	Interim and Final Balancing. If a cumulative Imbalance exists at a point in time when
Shipper’s scheduled volumes are less than 25% of the applicable MDQ or less than 25% of the
Shipper’s prior six (6) Months average scheduled volume, Williams, at its option, may elect
to settle the Imbalance with a cash payment. Williams will either purchase from or sell to
the Shipper the Imbalance volume.
	 
	 	 	 	Williams will calculate the value of the cash payment by multiplying the cumulative
Imbalance volume by the price as published in the Inside FERC Gas Market report for the
Interconnecting Pipeline market location relevant to the Delivery Point(s) for the Month
the Imbalance was created.
	 
	 	 	 	If an Imbalance exists at the termination of this Agreement, the cumulative Imbalance will
be eliminated by cash settlement in the same manner as described above within sixty (60)
Days after receipt by Shipper of Williams’ final regular Monthly statement.
	 
	 	F.7	 	Enforcement. If Shipper should fail or refuse to Balance according to this Section F,
then Williams may control the receipt, delivery and scheduling of Shipper’s Gas in order to
Balance.

	G.	 	GAS TRANSFERS

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	G.1	 	Defined Terms. The term “Transfer” shall mean the transfer of Gas from a “Delivering
Agreement” to a “Receiving Agreement.” The “Delivering Shipper” is the shipper offering
and responsible for delivering the Gas to the Receipt Point(s) in a Transfer. The
Delivering Shipper must have a Gathering agreement in effect with Williams permitting
Transfers (“Delivering Agreement”). The “Receiving Shipper” is the shipper accepting the
Gas at the Receipt Point(s) and responsible for nominating it to the Delivery Point(s) in a
Transfer. The Receiving Shipper must have either a Gathering agreement or a Gas Transfer
receiving agreement in effect with Williams permitting Transfers (“Receiving Agreement”).
	 
	 	G.2	 	Daily Nomination Procedure.

	 	i.	 	Delivering Shipper’s Nomination(s). For each Day the Delivering Shipper
may submit nomination(s) via Williams’ Nomination System of the number of MMBtus of
Gas up to its “Shipper’s Processing MDQ” under the Delivering Agreement that it
desires to deliver to Williams for the account of the Receiving Shipper (“Delivering
Shipper’s Nomination(s)”). The Delivering Shipper’s Nomination(s) must satisfy all
of the nomination requirements of the Delivering Agreement in order to be available
for acceptance by the Receiving Shipper.
	 
	 	ii.	 	Accepted Transfer(s). For each Day the Receiving Shipper may submit via
Williams’ Nomination System its acceptance of all or part of the Delivering Shipper’s
Nomination(s). The Delivering Shipper’s Nomination(s) that are accepted by the
Receiving Shipper shall be referred to as “Accepted Transfer(s)”. Accepted
Transfer(s) shall be numerically ranked by the Receiving Shipper along with its other
“Available Supplies” under the Receiving Agreement to indicate the priority in which
the Receiving Shipper desires all of its Available Supplies to be scheduled for
delivery by Williams (the lower the number the higher the priority). Failure by
Shipper to timely submit such ranking shall result in the receipt of deliveries from
the Available Supplies on a pro rata basis.
	 
	 	iii.	 	Receiving Shipper’s Nomination(s). Each Day the Receiving Shipper shall
submit nomination(s) via Williams’ Nomination System equal to the number of MMBtus of
Accepted Transfer(s) that Williams is to deliver to the Interconnecting Pipeline(s)
at the Delivery Point(s) (“Receiving Shipper’s Nominations”). Williams shall
designate in writing the Day and time by which such nomination(s) must be submitted.
Multiple nominations shall be numerically ranked by the Receiving Shipper to indicate
the priority in which the Receiving Shipper’s Nominations are to be scheduled for
delivery by Williams (the lower the number the higher the priority). Failure by the
Receiving Shipper to rank its nominations shall result in the scheduling of Receiving
Shipper’s Nominations on a pro rata basis. Each nomination must have sufficient
detail to meet the nomination requirements of the Interconnecting Pipeline to which
it is nominated. Any nomination, or any part thereof, which fails to satisfy all of
the foregoing requirements, or such additional or alternate requirements as Williams
may hereafter present to Receiving Shipper shall be deemed invalid.

	 	G.3	 	Scheduling Receiving Shipper’s Nomination(s). Subject to the Receiving Shipper’s
obligation to balance under the Receiving Agreement, the Receiving Shipper’s Nomination(s)
shall be scheduled for delivery by Williams to the extent that:

	 	i.	 	each of the requirements of Section G.2 is satisfied;

	 	ii.	 	Williams has received confirmation request(s) for the Receiving Shipper’s
Nomination(s) from the appropriate Interconnecting Pipeline(s); and

	 	iii.	 	Williams has the capacity to provide the level of service specified in the
Delivering Agreement.

	 	 	 	The Receiving Shipper’s Nomination(s) shall be referred to as the “Receiving Shipper’s
Confirmed Nomination(s)” once scheduled for delivery by Williams. The Receiving Shipper
may view the Receiving Shipper’s Confirmed Nomination(s) through Williams’ Nomination
System.
	 
	 	G.4	 	Reducing Previously Confirmed Nominations. Whenever an Interconnecting Pipeline
requires Williams to reduce previously scheduled nominations, Williams shall, without
liability to Shipper, effect

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	such reduction by reducing pro rata all previously scheduled nominations to that
Interconnecting Pipeline. However, if Williams identifies the shipper(s) responsible for
the reduction being required by the Interconnecting Pipeline, Williams shall, without
liability to Shipper, endeavor to reduce only the previously scheduled nominations of the
responsible shipper(s) in accordance with such shipper’s numerical ranking of its
nominations, if available.
	 
	 	G.5	 	Balancing. If the number of MMBtus of Gas received by Williams from the Delivering
Shipper at the Receipt Point(s) for the account of the Receiving Shipper, after subtracting
applicable Basic Processing Plant Fuel, Cryogenic Processing Plant Fuel, and Shrink, do not
equal the number of MMBtus of Accepted Transfer(s), the difference shall be treated as an
imbalance arising under the Delivering Agreement. If the number of MMBtus of Accepted
Transfer(s) does not equal the Receiving Shipper’s Confirmed Nomination(s), the difference
shall be considered an imbalance arising under the Delivering Agreement.
	 
	 	G.6	 	Limitation. Only one Transfer of the same Gas is permitted.
	 
	 	G.7	 	Termination of Section. Williams may terminate or modify this Section G at any time by
providing Shipper with thirty (30) Days prior Notice.

	H.	 	DISPUTED OR UNPAID STATEMENTS

	 	H.1	 	Statement(s) Disputed by Shipper. In the event that Shipper disputes any statement,
then Williams shall nonetheless invoice Shipper, and Shipper shall pay the undisputed
amount subject to payment of the disputed amount with interest calculated in accordance
with Section H.2 after resolution of the dispute in Williams’ favor. Any statement must be
disputed by Shipper, if at all, by providing Notice of the dispute to Williams within two
(2) years from the date of such statement; otherwise such statement shall be conclusively
deemed to be correct. This two (2) year period for disputing statements does not extend
the dispute period for any matter whose dispute period is less than two (2) years, as
expressly provided in this Agreement, even if it otherwise impacts Shipper’s statement.
Within sixty (60) Days after timely disputing a statement, Shipper shall assemble all
available documentation demonstrating the basis for the dispute and furnish it to Williams.
	 
	 	H.2	 	Unpaid Statement(s). Should Shipper fail to pay the amount of any statement when the
same becomes due, Shipper shall pay interest on the unpaid portion, which shall accrue from
the date due until the date of payment at a rate equal to the lower of (i) the
then-effective prime rate of interest published under “Money Rates” by the Wall Street
Journal, plus two percent (2%) per annum; or (ii) the maximum applicable lawful interest
rate. If such amount plus interest remains unpaid for thirty (30) Days after the due date,
Williams shall have the right to (i) suspend, in whole or in part, its obligations to
Shipper under this Agreement until such amount plus interest is paid and/or (ii) offset, in
whole or in part, the same against any amount due or owing by Williams to Shipper under
this Agreement.
	 
	 	H.3	 	Shipper’s Credit. Shipper (which for purposes of this Section H.3 shall include WPX)
shall maintain credit satisfactory to Williams. When reasonable grounds for insecurity of
payment by Shipper arise (including but not limited to late payment to Williams or others,
or the occurrence of a material change in the creditworthiness of the Shipper), Williams
shall have the right to require adequate assurance of performance from Shipper. Upon a
Notice of demand for adequate assurance of performance, and in the absence of such
assurance from Shipper within five (5) business Days, Williams shall have the right to
immediately suspend further performance without any additional notice and in the absence of
such assurance from that Shipper, Williams may within twenty (20) business Days of original
adequate assurance request termination of the Agreement. Adequate assurance of performance
will be in an amount equal to the sum of the highest three (3) Months calculated payments
due to Williams from Shipper during the last twelve months prior to the Notice date of
Williams’ request. If fewer than twelve (12) Months of payments have been owed by Shipper
prior to the notice date, the amount of adequate assurance shall be three (3) times the
amount of the highest payment due from Shipper to Williams during all Months preceding the
notice. Adequate assurance shall include but not be limited to, a standby irrevocable
letter of credit, a prepayment, a security interest in an asset acceptable to Williams or a
performance bond or guarantee by a creditworthy entity with each being in a format
reasonably

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AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	acceptable to Williams. All costs of providing adequate assurance shall be borne by the
Shipper. In the event Shipper(s) shall (i) make an assignment or any general arrangement
for the benefit of creditors; (ii) file a petition or otherwise commence, authorize, or
acquiesce in the commencement of a proceeding or cause under any bankruptcy or similar Law
for the protection of creditors or have such petition filed or proceeding commenced against
it; (iii) otherwise become bankrupt or insolvent (however evidenced); or (iv) be unable to
pay its debts as they fall due; then Williams shall have the right to either withhold
and/or suspend deliveries or payment, net and/or set off all transactions outstanding
between the Parties, use all rights, counterclaims and other defenses which it is or may be
entitled to at Law or arising from the Agreement, and/or immediately terminate the
Agreement without prior notice.
	 
	 	H.4	 	Williams’ Credit. Williams shall maintain credit satisfactory to Shipper. When
reasonable grounds for insecurity of payment by Williams arise (including but not limited
to late payment to Shipper, or the occurrence of a material change in the creditworthiness
of Williams), Shipper shall have the right to require adequate assurance of performance
from Williams. Upon a written notice of demand for adequate assurance of performance, and
in the absence of such assurance from Williams within five (5) business Days, Shipper shall
have the right to immediately suspend further performance without any additional notice and
in the absence of such assurance from Williams, Shipper may within twenty (20) business
Days of original adequate assurance request termination of the Agreement. Adequate
assurance of performance will be in an amount equal to the sum of the highest three (3)
Months calculated payments due to Shipper from Williams during the last twelve (12) Months
prior to the Notice date of Shipper’s request. If fewer than twelve (12) Months of
payments have been owed by Williams prior to the notice date, the amount of adequate
assurance shall be three (3) times the amount of the highest payment due from Williams to
Shipper during all Months preceding the notice. Adequate assurance shall include but not
be limited to, a standby irrevocable letter of credit, a prepayment, a security interest in
an asset acceptable to Shipper or a performance bond or guarantee by a creditworthy entity
with each being in a format reasonably acceptable to Shipper. All costs of providing
adequate assurance shall be borne by Williams. In the event Williams shall (i) make an
assignment or any general arrangement for the benefit of creditors; (ii) file a petition or
otherwise commence, authorize, or acquiesce in the commencement of a proceeding or cause
under any bankruptcy or similar Law for the protection of creditors or have such petition
filed or proceeding commenced against it; (iii) otherwise become bankrupt or insolvent
(however evidenced); or (iv) be unable to pay its debts as they fall due; then Shipper
shall have the right to either withhold and/or suspend deliveries or payment, net and/or
set off all transactions outstanding between the Parties, pursuant to this Agreement use
all rights, counterclaims and other defenses which it is or may be entitled to at Law or
arising from the Agreement, and/or immediately terminate the Agreement without prior
notice.

	I.	 	LIABILITY, INDEMNIFICATION AND WARRANTY

	 	I.1	 	Shipper’s Liability and Indemnification. Shipper shall be in control and possession of
Shipper’s Gas until delivered to Williams at the Receipt Point(s) and following its
delivery by Williams at the Delivery Point(s), and shall be fully responsible and liable
for any and all damages, claims, actions, expenses, penalties and liabilities, including
attorney’s fees, arising from personal injury, death, property damage, environmental
damage, pollution, or contamination relating to Shipper’s Gas while in Shipper’s control
and possession, and Shipper agrees to release, indemnify and defend Williams with respect
thereto. Shipper further agrees to release, indemnify and defend Williams from and against
any and all damages, claims, actions, expenses, penalties and liabilities, including
attorney’s fees, arising from personal injury, death, property damage, environmental
damage, pollution, or contamination relating to Shipper’s ownership and/or operation of the
facilities delivering Gas to the Receipt Point(s) and/or Shipper’s performance or
nonperformance of its obligations under this Agreement.
	 
	 	I.2	 	Williams’ Liability and Indemnification. Williams shall be in control and possession
of Shipper’s Gas from the time delivered to Williams at the Receipt Point(s) until it is
delivered by Williams at the Delivery Point(s), and shall be fully responsible and liable
for any and all damages, claims, actions, expenses, penalties and liabilities, including
attorneys fees, arising from personal injury, death, property damage, environmental damage,
pollution or contamination relating to Shipper’s Gas while in Williams’ control and
possession, and Williams agrees to release, indemnify and defend Shipper with respect

A-16

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	thereto. Williams further agrees to release, indemnify and defend Shipper from and against any
and all damages, claims, actions, expenses, penalties and liabilities, including attorney’s
fees, arising from personal injury, death, property damage, environmental damage, pollution
or contamination relating to Williams’ ownership and/or operation of the Gathering System,
Basic Processing Plant, Cryogenic Processing Plant, and/or Williams’ performance or
nonperformance of its obligations under this Agreement.

	 	I.3	 	Warranty of Title. Shipper warrants that at the time of delivery of Gas for its
account at the Receipt Point(s), it will have title to such Gas free and clear of all
liens, encumbrances, and claims whatsoever, or that it will at the time of such delivery
have the right to so deliver such Gas. Shipper shall release, indemnify and defend
Williams against any and all damages, claims, actions, expenses, penalties and liabilities,
including attorney’s fees, arising from Shipper’s breach of the foregoing warranty.
Subject to Shipper’s warranty of title, Williams warrants that at the time of delivery of
such Gas at the Delivery Point(s), it will deliver such Gas free and clear of all liens,
encumbrances, and claims placed on the Gas by Williams. Williams shall release, indemnify
and defend Shipper against any and all damages, claims, actions, expenses, penalties and
liabilities, including attorney’s fees, arising from Williams’ breach of the foregoing
warranty.
	 
	 	I.4	 	Limitations. Notwithstanding any language in this Agreement to the contrary, neither
Party shall be released, indemnified or defended with respect to its own negligence or
willful misconduct. Nor is any language in this Agreement intended to provide
indemnification greater than that which is permitted by applicable Law. If any limitations
upon indemnification are imposed by applicable Law, then such limitations are hereby
incorporated by reference and made a part of this Agreement. Except as necessary to
provide the indemnifications contemplated in this Agreement against third party claim(s),
neither Party shall be liable to the other for any incidental, consequential or punitive
damages.

	J.	 	ROYALTIES, TAXES, FEES AND OTHER CHARGES

	 	J.1	 	Royalties. Shipper shall be responsible and liable for the payment of all royalties
relating to Shipper’s Gas. Williams shall have no responsibility or liability for such
royalties and Shipper shall release, indemnify and defend Williams against any and all
damages, claims, actions, expenses, penalties and liabilities, including attorney’s fees,
relating to such royalties.
	 
	 	J.2	 	Taxes, Fees and Other Charges. Shipper shall be responsible and liable for the payment
of all taxes, fees and other charges (including penalties and interest thereon) now or
hereafter levied or assessed by any municipal, county, state, federal or tribal government
relating to Shipper’s Gas or Williams’ services under this Agreement. If Williams is
required to pay any such taxes, fees or other charges (or penalties or interest thereon),
Shipper shall reimburse Williams in accordance with Section 4.3 of the Agreement. Williams
shall be responsible and liable for the payment of all taxes, fees and other charges
(including penalties and interest thereon) now or hereafter levied or assessed by any
municipal, county, state, federal or tribal government relating to Williams’ physical
facilities providing services under this Agreement. If Shipper is required to pay any such
taxes, fees or other charges (or penalties or interest thereon), Williams shall reimburse
Shipper in accordance with Section 4.3 of the Agreement. Nothing in this agreement
requires either Party to pay the income taxes of the other.
	 
	 	J.3	 	Limitation on Tax Responsibility. Neither Party shall be responsible or liable for the
taxes now or hereafter levied or assessed upon the income or facilities of the other.

	K.	 	DEFAULT

	 	K.1	 	Event of Default. Failure by a Party (“Defaulting Party”) to perform one or more of
the following shall constitute an “Event of Default” under this Agreement:

	 	(a)	 	any obligation imposed upon it under this Agreement; or

	 	(b)	 	any obligation imposed upon it by any agreement by which the Parties (in
their respective capacities as Parties under this Agreement) may be bound;

A-17

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	and provided the Defaulting Party either fails to cure such failure, or to begin to cure
and diligently pursue such cure of such failure, in either case within a reasonable time.
	 
	 	K.2	 	Remedies for Default. Except as expressly limited herein to the contrary, if any Event
of Default shall occur, the other Party (the “Non-Defaulting Party”) shall have available
to them in addition to express rights and remedies provided herein, all remedies otherwise
available at Law or in equity against the Defaulting Party. The default in the payment of
money by any Party shall constitute a debt to the Non-Defaulting Party due immediately and
may be collected through the institution of appropriate legal proceedings initiated by any
Non-Defaulting Party.
	 
	 	K.3	 	No Waiver. Except as otherwise expressly provided in this Agreement, the failure to
exercise any one of the rights and remedies herein provided shall not constitute a waiver
thereof, nor prevent the subsequent or concurrent utilization of any other right or remedy.

	L.	 	ALTERNATIVE DISPUTE RESOLUTION
	 
	 	 	Any dispute arising out of or relating to this Agreement shall be resolved in accordance with
the procedures specified in this Section L, which shall be the sole and exclusive procedures for
the resolution of any such disputes. The Parties shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by negotiation between executives
who have authority to settle the controversy and who are at a higher level of management than
the persons with direct responsibility for administration of this Agreement. Any Party may give
the other Party written Notice of any dispute not resolved in the normal course of business.
Within fifteen (15) Days after delivery of the Notice, the receiving Party shall submit to the
other a written response. The Notice and the response shall include (a) a statement of each
Party’s position and a summary of arguments supporting that position, and (b) the name and title
of the executive who will represent that Party and of any other person who will accompany the
executive. Within thirty (30) Days after delivery of the disputing Party’s Notice, the
executives of both Parties shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to attempt to resolve the dispute. All reasonable
requests for information made by one Party to the other will be honored. All negotiations
pursuant to this clause are confidential and shall be treated as compromise and settlement
negotiations for purposes of applicable rules of evidence. If the matter has not been resolved
by these persons within forty-five (45) Days of the disputing Party’s notice, the dispute shall
be referred to more senior executives of both Parties who have authority to settle the dispute
and who shall likewise meet to attempt to resolve the dispute.
	 
	 	 	If the dispute has not been resolved by negotiation within sixty (60) Days of the disputing
Party’s Notice, either Party may initiate litigation; provided, however, that if one Party has
requested the other to participate in the above non-binding procedures and the other has failed
to participate, the requesting Party may initiate litigation before expiration of the above
period.
	 
	M.	 	MISCELLANEOUS

	 	M.1	 	Governing Law. This Agreement shall be interpreted, construed, and governed by the
Laws of the State of Colorado, without regard to choice of Law principles thereof.
	 
	 	M.2	 	Severability. Should any part of this Agreement be found to be unenforceable or be
required to be modified by a court or governmental authority, then only that part of this
Agreement shall be affected. The remainder of this Agreement shall remain in force and
unmodified. If the absence or modification of the affected part of this Agreement
substantially deprives either Party of the economic benefit of this Agreement, the Parties
shall negotiate reasonable and enforceable provisions to restore the economic benefit to
the Party so deprived consistent with the intent originally reflected in this Agreement.
If the Parties are unable to do so, then either Party may terminate this Agreement by
giving the other Party Notice of termination no later than sixty (60) Days after the
effective date of the Law, regulation, rule or order affecting this Agreement.
	 
	 	M.3	 	Waiver. A waiver by either Party of any one or more defaults by the other Party shall
not operate as a waiver of any future default(s), whether of a like or different character.

A-18

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	M.4	 	Audit. The Parties shall each preserve all records relating to the performance of this
Agreement for a period of at least two (2) years, or such longer periods as shall be
required by Law, regulation, rule or order. During such period, each Party, or its
designated representative, shall have access to such records of the other Party upon
reasonable notice during regular business hours.
	 
	 	M.5	 	Confidentiality. Each Party shall keep the terms of the Agreement confidential and
shall not, without the other Party’s prior written consent, disclose such terms to any
third party, firm, corporation or entity, except for permitted disclosures to those
officers, directors, employees, agents and other representatives (including attorneys,
accountants, technical advisors, financial advisors and other consultants and advisors) of
the Party or of its Affiliates (defined below), which, in each case, have a reasonable need
to know such terms (collectively, a Party’s “Representatives”). The Parties agree to be
responsible for any breach of this Agreement by their respective Representatives or other
persons to whom disclosure of the terms of the Agreement is permitted, as set forth below.
An Affiliate of a Party is a person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with, such Party,
where the term “control” (including the terms “controlling,” “controlled by” and “under
common control with”) means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a person, whether through the
ownership of voting shares, by contract, or otherwise. In the event that either Party is
required or requested by any judicial, regulatory, legislative or other government entity
with jurisdiction over it, whether by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigation, demand or similar process to
disclose the terms of the Agreement, then such Party may disclose such terms to the extent,
and only to the extent, so required or requested without liability hereunder; provided,
however, the Party so required or requested shall to the extent legally permissible notify
the other Party thereof as soon as practicable in order to enable the other Party to obtain
a protective order or other reliable assurance that confidential treatment will be accorded
the terms to the Agreement.
	 
	 	 	 	In addition to the foregoing, either Party may disclose the terms of the Agreement to the
following persons or entities in the following circumstances:

	 	i.	 	Any purchaser, or potential purchaser, of all or any portion of Shipper’s
interest in the wells, leaseholds, estates or other rights upstream of the Receipt
Point(s) and any such purchaser’s or its lender’s Representatives; provided, however,
all such parties or persons shall first have agreed in writing to maintain
confidential the terms of the Agreement.
	 
	 	ii.	 	Any royalty and overriding royalty interest owners or other owners of
production due payments from Shipper on the Gas delivered to Williams hereunder;
provided, however, all such parties or persons shall first have agreed in writing to
maintain confidential the terms of the Agreement.

	 	M.6	 	Transfer. Any transfer of Shipper’s right, title, or interest in the Gas dedicated to
Williams under this Agreement shall not impair its dedication to Williams. Shipper shall
notify in writing (including by disclosure in a dataroom) any proposed transferee that such
Gas remains dedicated to Williams pursuant to this Agreement and such transferee (prior to
or concurrently with any transfer of Shipper’s right, title or interest in such Gas) shall
agree in writing to adopt, ratify and be bound by the terms of this Agreement. Shipper
shall notify Williams of any such transfer and shall provide a copy of transferee’s written
agreement to be bound by the terms of this Agreement within ten (10) business Days of the
effective date thereof. Failure of Shipper to so notify Williams shall not impair
Williams’ rights under this Agreement. Any attempted transfer or assignment made without
compliance with the provisions set forth in this Section M.6 or Section M.7 shall be null
and void ab initio.
	 
	 	M.7	 	Assignment. Either Party to this Agreement may assign in whole or in part its right,
title and interest under this Agreement to a non-Affiliate after first receiving the
written consent of the other Party to this Agreement, which consent shall not be
unreasonably withheld or delayed. Either Party may assign in whole or in part its right,
title and interest under this Agreement to an Affiliate upon providing Notice to the other
Party hereto.
	 
	 	M.8	 	No Third Party Beneficiaries. It is the intent of the Parties that no person or entity
besides Williams, Shipper and their respective successors and permitted assigns shall be
entitled to enforce any provision of

A-19

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	this Agreement and that the covenants and obligations set forth in this Agreement are solely
for the benefit of Williams, Shipper and their respective successors and permitted assigns.
	 
	 	M.9	 	Amendment. Except as expressly provided otherwise in this Agreement, no amendment of
this Agreement shall be binding unless in writing and signed by the Parties.
	 
	 	M.10	 	Counterparts. This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, and such counterparts together
shall constitute one instrument.
	 
	 	M.11	 	Price Applied to Units of Gas. Whenever a price is applied to a unit of Gas herein the
units shall be consistent with each other for such application.

A-20

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “B”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

AREA OF INTEREST

Rio Blanco County, Colorado

Garfield County, Colorado

Mesa County, Colorado

CORE AREA (all within Colorado):

	 	 	 	 	 	 
	 
	 	Township	 	 	Range	 
	 	1N
	 	 	99W	 
	 	1S
	 	 	99W	 
	 	2S
	 	 	99W	 
	 	3S
	 	 	99W	 
	 	4S
	 	 	99W	 
	 	1N
	 	 	98W	 
	 	1S
	 	 	98W	 
	 	2S
	 	 	98W	 
	 	3S
	 	 	98W	 
	 	4S
	 	 	98W	 
	 	5S
	 	 	98W	 
	 	6S
	 	 	98W	 
	 	7S
	 	 	98W	 
	 	1S
	 	 	97W	 
	 	2S
	 	 	97W	 
	 	3S
	 	 	97W	 
	 	4S
	 	 	97W	 
	 	5S
	 	 	97W	 
	 	6S
	 	 	97W	 
	 	7S
	 	 	97W	 
	 	8S
	 	 	97W	 
	 	9S
	 	 	97W	 
	 	1S
	 	 	96W	 
	 	2S
	 	 	96W	 
	 	3S
	 	 	96W	 
	 	4S
	 	 	96W	 
	 

	 	 	 	 	 	 
	 
	 	Township	 	 	Range	 
	 	5S
	 	 	96W	 
	 	6S
	 	 	96W	 
	 	7S
	 	 	96W	 
	 	8S
	 	 	96W	 
	 	5S
	 	 	95W	 
	 	6S
	 	 	95W	 
	 	7S
	 	 	95W	 
	 	8S
	 	 	95W	 
	 	5S
	 	 	94W	 
	 	6S
	 	 	94W	 
	 	7S
	 	 	94W	 
	 	8S
	 	 	94W	 
	 	5S
	 	 	93W	 
	 	6S
	 	 	93W	 
	 	7S
	 	 	93W	 
	 	8S
	 	 	93W	 
	 	5S
	 	 	92W	 
	 	6S
	 	 	92W	 
	 	7S
	 	 	92W	 
	 	8S
	 	 	92W	 
	 	6S
	 	 	91W	 
	 	7S
	 	 	91W	 
	 	8S
	 	 	91W	 
	 	6S
	 	 	90W	 
	 	7S
	 	 	90W	 
	 

B-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “C”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

Between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

RECEIPT POINTS

	 	 	 
	 	 	Wellhead Gathering Receipt Points:
	Meter Number	 	Meter/Location Name
	62079653

	 	FEDERAL RGU 23-7-297 / RTU-01721
	62079654

	 	FEDERAL RG 22-28-298 / RTU-01753
	62079655

	 	FEDERAL RGU 23-33-198 / RTU-01718
	62082687

	 	FEDERAL RG 31-8-398 / RTU 1999
	62082688

	 	FEDERAL RG 32-17-298 / RTU-01891
	62082690

	 	FEDERAL RG 43-15-298 / RTU 1938
	62082691

	 	FEDERAL RGU 22-6-298 / RTU-01842
	62082692

	 	FEDERAL RGU 31-2-298 / RTU-01912
	62085043

	 	FEDERAL RG 13-1-398 / RTU 2005
	62085083

	 	FEDERAL RG 31-20-298
	62085423

	 	FEDERAL RGU 34-19-198 / RTU-1888
	62085424

	 	FEDERAL RG 24-13-398 / RTU 2063
	62085425

	 	FEDERAL RG 24-20-398 / RTU 2044
	62085426

	 	FEDERAL RGU 44-1-298 / RTU 2016
	62085427

	 	FEDERAL RGU 33-7-298 / RTU 2017
	62085430

	 	FEDERAL RGU 12-10-298D / RTU 2119
	62085431

	 	FEDERAL RGU 31-32-198 / RTU 2053
	62085432

	 	FEDERAL RGU 14-28-198 / RTU-2123
	62085433

	 	FEDERAL RGU 24-29-198 / RTU 2054
	62085434

	 	FEDERAL RGU 33-32-198 / RTU 2143
	62085436

	 	FEDERAL RGU 23-6-297D
	62085437

	 	FEDERAL RGU 32-5-298 / RTU 2067
	62085439

	 	FEDERAL RGU 41-8-298 / RTU 2026
	62085440

	 	FEDERAL RG 22-16-298 / RTU 2089
	62085442

	 	FEDERAL RGU 31-30-198 / RTU 2006
	62085443

	 	FEDERAL RGU 22-20-198 / RTU-2265
	62085445

	 	FEDERAL RGU 23-17-198 / RTU 2087
	62085446

	 	FEDERAL RGU 14-16-198 / RTU 2266
	62085447

	 	FEDERAL RGU 13-36-198 / RTU 2179
	62085449

	 	FEDERAL RG 12-4-398 / RTU 2191
	62085456

	 	FEDERAL RG 11-7-397 / RTU-2363
	62085687

	 	AP 24-14-696 / RTU-01889
	62085696

	 	AP 34-14-696 / RTU-01890
	62085697

	 	AP 41-11-696 / RTU-01879

C-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 
	 	 	Wellhead Gathering Receipt Points:
	Meter Number	 	Meter/Location Name
	62085701

	 	AP 24-17-695 / RTU-03001
	62086097

	 	AP 22-9-695 / RTU-2049
	62086247

	 	AP 33-9-695 / RTU-01868
	62086248

	 	AP 41-14-695 / RTU-01880
	62163765

	 	AP 21-23-696 / RTU 2078
	62163770

	 	AP 31-23-696 / RTU 2077
	62165929

	 	AP 34-8-695 / RTU 2062
	62166223

	 	FEDERAL RGU 32-4-298 / RTU-2060
	62166828

	 	AP 321-23-696 / RTU-2452
	62166830

	 	AP 331-23-696 / RTU-2463
	62166835

	 	AP 334-14-696 / RTU 2074
	62166839

	 	AP 434-14-696 / RTU 2075
	62166841

	 	AP 524-14-696 / RTU-2451
	62166843

	 	AP 534-14-696 / RTU 2076
	62177987

	 	AP 21-20-695 / RTU 3167
	62178024

	 	AP 22-20-695 / RTU-3168
	62181376

	 	FEDERAL RG 41-18-297D / RTU-2139
	62181693

	 	FEDERAL RGU 23-35-198
	62181751

	 	FEDERAL RGU 42-3-298 / RTU 2219
	62181753

	 	FEDERAL RGU 31-34-198 / RTU 2180
	62181757

	 	FEDERAL RGU 14-25-198 / RTU-2269
	62181765

	 	FEDERAL RGU 11-11-298 / RTU 2188
	62181971

	 	FEDERAL RGU 12-1-298 / RTU-2268
	62182342

	 	AP 541-23-696 / RTU-2462
	62182344

	 	AP 441-23-696 / RTU-2461
	62182346

	 	AP 341-23-696 / RTU-2460
	62182348

	 	AP 41-23-696 / RTU-2459
	62182351

	 	AP 544-14-696 / RTU-2458
	62182356

	 	AP 444-14-696 / RTU-2457
	62182360

	 	AP 344-14-696 / RTU-2456
	62182362

	 	AP 44-14-696 / RTU-2455
	62182364

	 	AP 543-14-696 / RTU-2454
	62182366

	 	AP 443-14-696 / RTU- 2453
	62183082

	 	FEDERAL RGU 33-24-198
	62185914

	 	AP 22-24-696 / RTU-2291
	62186782

	 	FEDERAL RGU 32-1-298 / RTU-2263
	62186809

	 	FEDERAL RGU 43-1-298 / RTU-2262
	62193406

	 	AP 21-16-695 / RTU-
	62196021

	 	FEDERAL NRG 41-9-198 / RTU- 2254
	62182231

	 	Federal BCU 23-22-198
	62182233

	 	Federal BCU 34-8-198
	62182235

	 	Federal BCU 42-31-198
	62182746

	 	Federal BCU 33-18-198
	62196025

	 	FEDERAL RGU 343-1-298 / RTU-2261
	62196142

	 	RG 11-31-297 / RTU 2252
	62196146

	 	RG 24-30-297 / RTU 2253
	62196600

	 	AP 522-8-695 / RTU 2158
	62196606

	 	AP 23-9-695 / RTU-2150
	62196608

	 	AP 333-9-695 / RTU 2153
	62196610

	 	AP 422-9-695 / RTU-2149
	62196614

	 	AP 522-9-695 / RTU-2151

C-2

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 
	 	 	Wellhead Gathering Receipt Points:
	Meter Number	 	Meter/Location Name
	62196616

	 	AP 532-9-695 / RTU 2152
	62196620

	 	AP 422-10-695 / RTU-2154
	62196624

	 	AP 522-10-695 / RTU 2155
	62196626

	 	AP 44-15-695 / RTU 2157
	62196628

	 	AP 543-15-695 / RTU 2156
	62196630

	 	AP 421-18-695 / RTU-2148
	62196632

	 	AP 521-18-695 / RTU-2147
	62199387

	 	AP 23-24-696 / RTU-2296
	62199392

	 	AP 332-24-696 / RTU-2293
	62199394

	 	AP 422-24-696 / RTU-2295
	62199396

	 	AP 531-24-696 / RTU-2292
	62199398

	 	AP 532-24-696 / RTU-2294
	62199407

	 	FEDERAL RGU 11-25-198
	62200608

	 	FEDERAL RGU 22-1-298 / RTU-2267
	62209298

	 	AP 342-11-696 / RTU-2230
	62211754

	 	FEDERAL RG 32-14-298 / RTU-2467
	62211760

	 	FEDERAL RG 24-14-298 / RTU-2416
	62219967

	 	FEDERAL RGU 44-35-198 / RTU-2366
	62219969

	 	FEDERAL RGU 344-35-198 / RTU-2365
	62219971

	 	FEDERAL RGU 343-35-198 / RTU-2367
	62219973

	 	FEDERAL RGU 43-35-198 / RTU-2364
	62219982

	 	FEDERAL RG 14-14-298 / RTU-2414
	62219984

	 	FEDERAL RG 34-14-298 / RTU-2415
	62219990

	 	FEDERAL RG 21-14-298 / RTU-2465
	62219992

	 	FEDERAL RG 31-14-298 / RTU-2466
	62220197

	 	FEDERAL RGU 522-6-297
	62220199

	 	FEDERAL RGU 432-6-297 / RTU-2289
	62220203

	 	FEDERAL RGU 33-6-297 /RTU
	62220205

	 	FEDERAL RGU 433-6-297
	62223709

	 	FEDERAL RGU 323-33-198 / RTU-2388
	62223711

	 	FEDERAL RGU 523-33-198 / RTU-2389
	62223713

	 	FEDERAL RGU 324-33-198 / RTU-2387
	62223715

	 	FEDERAL RGU 514-33-198 / RTU-2386
	62223717

	 	FEDERAL RGU 341-2-298 / RTU-2403
	62223719

	 	FEDERAL RGU 441-2-298 / RTU-2404
	62223721

	 	FEDERAL RGU 42-2-298 / RTU-2405
	62226377

	 	AP 43-1-696 / RTU-2270
	62226448

	 	AP 443-1-696 / RTU-2271
	62226450

	 	AP 44-1-696 / RTU-2272
	62229881

	 	AP 644-8-695 / RTU-2300
	62229883

	 	AP 331-17-695 / RTU-2299
	62229885

	 	AP 321-17-695 / RTU-2298
	62229887

	 	AP 614-8-695 / RTU-2297
	62241395

	 	FEDERAL RGU 432-27-198
	62241399

	 	FEDERAL RGU 33-27-198
	62241402

	 	FEDERAL RGU 32-27-198
	62241704

	 	BOISE 398-22-1
	62241706

	 	FEDERAL 298-18-1 / RTU 2285
	62241708

	 	FEDERAL 298-25-1
	62241710

	 	FEDERAL 298-27-5
	62241712

	 	FEDERAL 298-34-1

C-3

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 
	 	 	Wellhead Gathering Receipt Points:
	Meter Number	 	Meter/Location Name
	62241714

	 	FEDERAL 299-23-1
	62241716

	 	FEDERAL 299-23-2
	62241718

	 	FEDERAL 299-26-1 / RTU 2284
	62241720

	 	FEDERAL 299-26-2
	62241722

	 	FEDERAL 299-27-2 / RTU 2286
	62241736

	 	FEDERAL 299-34-1 / RTU 2283
	62241738

	 	FEDERAL SULPHUR CREEK 1
	62241740

	 	GOVERNMENT 29-3
	62241742

	 	FEDERAL 398-7-2 / RTU 2277
	62241744

	 	FEDERAL 398-7-3 / RTU 2276
	62241746

	 	FEDERAL 399-1-1 / RTU 2278
	62241748

	 	FEDERAL 399-1-2 / RTU 2281
	62241750

	 	FEDERAL 399-1-5 / RTU 2280
	62241752

	 	FEDERAL 399-2-1 / RTU 2282
	62241754

	 	GOVERNMENT 298-22-2
	62241756

	 	GOVERNMENT 298-27-3
	62241758

	 	GOVERNMENT 298-32-1
	62241760

	 	GOVERNMENT 298-33-1
	62241762

	 	GOVERNMENT 298-33-2
	62241764

	 	GOVERNMENT 397-5-1
	62241766

	 	GOVERNMENT 397-8-4
	62241768

	 	GOVERNMENT 398-10-1
	62241770

	 	GOVERNMENT 398-17-4
	62241772

	 	GOVERNMENT 398-33-4
	62241774

	 	GOVERNMENT 498-4-1
	62241776

	 	GOVERNMENT EQUITY 26-1
	62241778

	 	GOVT EQUITY 298-26-2
	62241780

	 	GOVERNMENT FED 298-13-1
	62241782

	 	GOVERNMENT FED MHF-3
	62241784

	 	GOVT SULPHUR CREEK 7 / RTU-2450
	62241786

	 	GOVERNMENT 23-1 / RTU 2464
	62241814

	 	Federal P-36-299 Left Fork / RTU 2279
	62241884

	 	FEDERAL 299-27-5
	62241886

	 	FEDERAL 498-4-2G
	62241888

	 	FEDERAL 299-22-1
	62241890

	 	FEDERAL 299-27-3
	62241892

	 	FEDERAL 299-27-6
	62241894

	 	FEDERAL 299-34-2
	62243690

	 	FEDERAL 298-26-3
	62243918

	 	FEDERAL 399-23-1
	62246478

	 	FEDERAL RGU 31-3-298 / RTU-2474
	62246480

	 	FEDERAL RGU 431-3-298 / RTU-2475
	62246482

	 	FEDERAL RGU 32-3-298 / RTU-2476
	62246484

	 	FEDERAL RGU 341-3-298 / RTU-2477
	62246486

	 	FEDERAL RGU 442-3-298 / RTU-2478
	62246490

	 	FEDERAL RGU 511-2-298 / RTU-2473
	62246492

	 	FEDERAL RGU 311-2-298 / RTU-2472
	62246871

	 	SOUTH SULPHUR — FEDERAL 1-A / RTU-
	62252731

	 	AP 321-18-695 / RTU-2380
	62252733

	 	AP 322-18-695 / RTU-2384
	62252735

	 	AP 331-18-695 / RTU-2381

C-4

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 
	 	 	Wellhead Gathering Receipt Points:
	Meter Number	 	Meter/Location Name
	62252737

	 	AP 332-18-695 / RTU-2383
	62252739

	 	AP 522-18-695 / RTU-2385
	62252741

	 	AP 531-18-695 / RTU-2382
	62264220

	 	FEDERAL RGU 544-23-198
	62264226

	 	FEDERAL RGU 414-24-198
	62264232

	 	FEDERAL RGU 312-25-198
	62264234

	 	FEDERAL RGU 411-25-198
	62264236

	 	FEDERAL RGU 341-26-198
	62264240

	 	FEDERAL RGU 342-26-19
	62264242

	 	FEDERAL RGU 541-26-198
	62264658

	 	FEDERAL RGU 34-24-198
	62264666

	 	FEDERAL RGU 433-24-198
	62264673

	 	FEDERAL RGU 532-24-198
	62267851

	 	FEDERAL RGU 322-35-198
	62267853

	 	FEDERAL RGU 412-35-198
	62267855

	 	FEDERAL RGU 522-35-198
	62267857

	 	FEDERAL RGU 532-35-198
	62274676

	 	FEDERAL NRG 434-13-198
	62274678

	 	FEDERAL RGU 531-24-198
	62280326

	 	FEDERAL RGU 541-24-198
	62280330

	 	FEDERAL RGU 341-24-198
	62294230

	 	RGU 41-26-198
	62294237

	 	RGU 511-25-198
	62296310

	 	FEDERAL RGU 23-24-198
	62296314

	 	RGU 24-24-198
	62296322

	 	FEDERAL RGU 422-24-198
	62296328

	 	RGU 423-24-198
	74265344

	 	RIATA 19-2-97 MM / RTU 2051
	74265353

	 	Retamco Interconnect / RTU 2338
	74265350

	 	Noble Inlet Meter #1
	74265351

	 	Noble Inlet Meter #2

               Central Delivery Point (“CDP”) Gathering Receipt Points:

	 	 	 	 	 	 	 
	Receipt Point(s)	 	Location	 	County	 	State
	Jangles Compressor Station

	 	Sec. 20-T6S-R96W
	 	Garfield
	 	CO
	Starkey Compressor Station

	 	Sec. 29-T6S-R96W
	 	Garfield
	 	CO
	Wheeler Gulch Compressor Station

	 	Sec. 27-T6S-R96W
	 	Garfield
	 	CO
	Riley Gulch Compressor Station

	 	Sec. 34-T6S-R96W
	 	Garfield
	 	CO
	Callahan Compressor Station

	 	Sec. 4-T7S-R96W
	 	Garfield
	 	CO
	Hayes Gulch Compressor Station

	 	Sec. 1-T7S-R96W
	 	Garfield
	 	CO
	Wasatch Compressor Station

	 	Sec. 33-T6S-R95W
	 	Garfield
	 	CO
	Cottonwood Compressor Station

	 	Sec. 34-T6S-R95W
	 	Garfield
	 	CO
	Heath Hill Compressor Station

	 	Sec. 28-T6S-R94W
	 	Garfield
	 	CO
	Rulison Compressor Station

	 	Sec. 29-T6S-R94W
	 	Garfield
	 	CO
	Anvil Point Compressor Station

	 	Sec. 19-T6S-R94W
	 	Garfield
	 	CO
	Clough Compressor Station

	 	Sec. 16-T6S-R94W
	 	Garfield
	 	CO
	Rabbit Brush Compressor Station

	 	Sec. 32-T6S-R95W
	 	Garfield
	 	CO
	Webster Hill Compressor Station

	 	Sec. 14-T6S-R94W
	 	Garfield
	 	CO
	Sharrard Park Compressor Station

	 	Sec. 21-T6S-R94W
	 	Garfield
	 	CO
	Crawford Trail Compressor Station

	 	Sec. 28-T6S-R97W
	 	Garfield
	 	CO
	Una Compressor Station

	 	Sec. 34-T7S-R96W
	 	Garfield
	 	CO

C-5

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	 	 	 	 
	Receipt Point(s)	 	Location	 	County	 	State
	Hyrup Compressor Station

	 	Sec. 1-T8S-R96W
	 	Garfield
	 	CO
	Roan Cliff Compressor Station

	 	Sec. 2-T7S-R96W
	 	Garfield
	 	CO
	Hay Barn Compressor Station

	 	Sec. 2-T7S-R96W
	 	Garfield
	 	CO
	PDC Garden Gulch

	 	Sec. 8-T6S-R96W
	 	Garfield
	 	CO

C-6

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “D”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

DELIVERY POINTS

Gas Delivery Points:

	 	 	 	 	 	 	 
	Interconnecting Pipeline	 	Point	 	 	ID #
	White River Hub

	 	Magnolia
	 	 	20502	 
	Northwest Pipeline Company

	 	Collins Gulch
	 	 	20503	 
	Whiting Oil and Gas Corporation

	 	Ryan Gulch
	 	 	20881	 
	Public Service Company of Colorado

	 	West Rifle Point (Bargath)
	 	 	9041	 
	Colorado Interstate Gas Company

	 	Parachute Point (Bargath)
	 	 	J91843	 
	Colorado Interstate Gas Company

	 	Roan Cliffs Point (Bargath)
	 	 	J91935	 
	Colorado Interstate Gas Company

	 	Daisy Ditch
	 	 	20876	 
	Colorado Interstate Gas Company

	 	Grand Valley	 	 	 	 
	Colorado Interstate Gas Company

	 	Cathedral (Ryan Gulch)
	 	 	J92221	 
	Colorado Interstate Gas Company

	 	Gardenhire
	 	 	20500	 
	Wyoming Interstate Company

	 	Rio Blanco
	 	 	20501	 
	Wyoming Interstate Company

	 	Collins Gulch Point (Bargath)
	 	 	J96078	 
	TransColorado Gas Transmission Company, LLC

	 	Raccoon Hollow (Bargath)
	 	 	40412	 
	TransColorado Gas Transmission Company, LLC

	 	Greasewood(Bargath)
	 	 	36101	 
	Questar Pipeline Company

	 	Ryan’s Point (Ryan Gulch)
	 	 	2942	 
	Enterprise Gas Processing, LLC

	 	Parachute Point
	 	 	PC0009
	Parachute Complex to Solvay

	 	Solvay Fuel Gas
	 	 	20877	 
	BOPCO, L.P.

	 	Barcus Creek CDP
	 	 	1620	 

BASIC PROCESSING PLANT PRODUCT AND CONDENSATE DELIVERY POINTS

Basic Processing Plant Product Delivery Points:

	 	 	 	 	 
	Delivery to Pipeline	 	Point	 	Williams Meter #
	Parachute to Greasewood Express (PGX)

	 	Parachute Plant
	 	N/A
	Willow Creek to Overland Pass Pipeline Company
	 	 	 	 

Delivery to Truck

Plant Truck Load out (Pick up) points:

Parachute I Plant

Parachute II Plant

Grand Valley Plant

Roan Cliff Plant

Sagebrush Plant

D-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

Condensate Delivery Points:

Delivery to Truck

	 	 	 	 	 	 	 
	Delivery Point(s)	 	Location	 	County	 	State
	Jangles Compressor Station

	 	Sec. 20-T6S-R96W
	 	Garfield
	 	CO
	Starkey Compressor Station

	 	Sec. 29-T6S-R96W
	 	Garfield
	 	CO
	Wheeler Gulch Compressor Station

	 	Sec. 27-T6S-R96W
	 	Garfield
	 	CO
	Riley Gulch Compressor Station

	 	Sec. 34-T6S-R96W
	 	Garfield
	 	CO
	Callahan Compressor Station

	 	Sec. 4-T7S-R96W
	 	Garfield
	 	CO
	Hayes Gulch Compressor Station

	 	Sec. 1-T7S-R96W
	 	Garfield
	 	CO
	Wasatch Compressor Station

	 	Sec. 33-T6S-R95W
	 	Garfield
	 	CO
	Cottonwood Compressor Station

	 	Sec. 34-T6S-R95W
	 	Garfield
	 	CO
	Heath Hill Compressor Station

	 	Sec. 28-T6S-R94W
	 	Garfield
	 	CO
	Rulison Compressor Station

	 	Sec. 29-T6S-R94W
	 	Garfield
	 	CO
	Anvil Point Compressor Station

	 	Sec. 19-T6S-R94W
	 	Garfield
	 	CO
	Clough Compressor Station

	 	Sec. 16-T6S-R94W
	 	Garfield
	 	CO
	PDC Garden Gulch Meter

	 	Sec. 5-T6S-R96W
	 	Garfield
	 	CO
	Rabbit Brush Compressor Station

	 	Sec. 32-T6S-R95W
	 	Garfield
	 	CO
	Webster Hill Compressor Station

	 	Sec. 14-T6S-R94W
	 	Garfield
	 	CO
	Sharrard Park Compressor Station

	 	Sec. 21-T6S-R94W
	 	Garfield
	 	CO
	Crawford Trail Compressor Station

	 	Sec. 28-T6S-R97W
	 	Garfield
	 	CO
	Una Compressor Station

	 	Sec. 35-T7S-R96W
	 	Garfield
	 	CO
	Parachute Plant

	 	Sec. 33-T6S-R96W
	 	Garfield
	 	CO
	Willow Creek Plant

	 	Sec. 35-T2S-R97W
	 	Rio Blanco
	 	CO
	Hyrup Compressor Station

	 	Sec. 1-T8S-R96W
	 	Garfield
	 	CO
	Sagebrush Gas Plant

	 	Sec. 27-T2S-R99W
	 	Rio Blanco
	 	CO

CO2 Delivery Points:

Parachute Complex to Solvay

CRYOGENIC PROCESSING PLANT PRODUCT DELIVERY POINTS:

	 	 	 
	Willow Creek Plant:	 	 
	Delivery to Pipeline Point	 	Meter #
	Willow Creek Plant to Overland Pass Pipeline Company
	 	 
	Willow Creek Plant to Greasewood Express (PGX)
	 	 

	 	 	 
	Echo Springs Plant:	 	 
	Delivery to Pipeline	 	Meter #
	Echo Springs Plant to Overland Pass Pipeline
	 	 
	Echo Springs Plant to Mid-America Pipeline Company
	 	 

D-2

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “E”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

FEES AND FUEL

	1.	 	Fee Types
	 
	 	 	Gathering (inclusive of Field Dehydration)

	 	 	 

	Fixed Fee

	 	$[***] per Mcf
	Variable Fee

	 	$[***]1 per Mcf  

	 	 	Additionally, through December 31, 2012, for the greater of: (a) 450,000 MMBtu, or (b) all
MMBtus of Shipper’s Gas measured at the Starkey Gulch Custody Meter, Shipper shall pay a
Gathering fee of $[***], which fee shall not be subject to the fee adjustment in Section 1.
	 
	 	 	Basic Processing and Treating

	 	 	 

	Fixed Fee

	 	$[***] per Mcf
	Variable Fee

	 	$[***]1 per Mcf
	Allocation of Net Liquid Margins

	 	[***] percent ([***]%)

	 	 	For purposes of establishing the applicable Fee-Type for Expansions pursuant to Section
1.16, the foregoing Basic Processing and Treating fees apply to Basic Processing,
Treating, Dehydration and other services not otherwise included in other Fee-Types,
including associated blending, final delivery compression, interconnecting pipeline
deliveries, and CO2 delivery to third party receipt points.
	 
	2.	 	Fuel (Not “Fee-Types”):
	 
	 	 	BASIC PROCESSING, TREATING AND GATHERING FUEL: a) the fuel applicable to Williams’ Ryan
Gulch Gathering System and the associated Basic Processing and Treating shall initially be
[***]% of applicable Receipt Point volumes, provided that it shall not exceed [***]%; and b)
the fuel applicable to Williams’ Allen Point Gathering System, Grand Valley Gathering System,
Trail Ridge Gathering System, and the associated Basic Processing and Treating combined, shall
initially be [***]% of applicable Receipt Point volumes, provided that it shall not exceed
[***]%. Provided, for any Day when Shipper’s Gas contains CO2 greater than the
CO2 limits set forth on Exhibit J, the said fuel limits shall not apply.
Furthermore, upon the completion of six months continuous delivery of Shipper’s Gas to Williams’
Willow Creek Processing Plant, the Parties shall review the actual Fuel usage of Williams’ Ryan
Gulch Gathering System and reset the [***]% fuel limit to such other value as is mutually
agreed.
	 
	3.	 	Cryogenic Processing Fee applicable before January 1, 2013 at the Willow Creek Plant
(Not a “Fee-Type”): Shipper shall pay Williams $[***] per Mcf. Shipper
shall be entitled to [***]% of the Cryogenic Processing Plant Products extracted
from Shipper’s Gas at the Willow Creek Plant and Williams

E-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	shall be entitled to [***]% of such Cryogenic Processing Plant Products extracted from Shipper’s
Gas at the Willow Creek Plant.
	 
	4.	 	Cryogenic Processing Fee applicable before January 1, 2013 at the Echo Springs Plant
(Not a “Fee-Type”): 

	 	a.	 	Displaced Volumes: WPX shall pay Williams a Cryogenic
Processing Fee of $[***] per Mcf of Displaced Volumes WPX shall be entitled
to [***]% of the Cryogenic Processing Plant Products extracted from
Displaced Volumes at the Echo Springs Plant and Williams shall be entitled to
[***]% of such Cryogenic Processing Plant Products
	 
	 	b.	 	Non-Displaced Volumes: WPX shall pay a Cryogenic Processing fee of
$[***] per MMBtu of non-Displaced Volumes. WPX shall be entitled to one
hundred percent (100%) of the Cryogenic Processing Plant Products recovered through
Cryogenic Processing at the Echo Springs Plant from Shipper’s Gas.

	5.	 	Cryogenic Processing Fee applicable after December 31, 2012 (Not a “Fee-Type”):
Shipper or WPX, as applicable, shall pay Williams $[***]1
per Mcf plus [***] percent ([***]%) of the Net Liquid Margin attributable
to Shipper’s or WPX’s, as applicable, Cryogenic Processing Plant Products Cryogenically
Processed from Shipper’s Gas when the Net Liquid Margin equals $0 to $[***] per
gallon, plus Shipper or WPX, as applicable, shall pay Williams [***] percent
([***]%) of the Net Liquid Margin that is greater than $[***]per gallon.
For avoidance of doubt, such Net Liquid Margin payments are additive. The Net Liquid Margin
shall be deemed to be [***]when it is a negative amount.

 

			
	1	 	As adjusted pursuant to Section 1.12.

E-2

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “F”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

CALCULATION OF SHIPPER’S GROSS BASIC PROCESSING PLANT PRODUCTS

Williams shall use the most current Gas component analysis from the Receipt Point(s) to
calculate the number of gallons of each Plant Product per Mcf of Gas at each Receipt Point (“GPM
Factor”).

Each Month the actual measured volume of Gas in Mcf from each Receipt Point shall be multiplied by
the GPM Factor for each Plant Product to determine the theoretical gallons of each Plant Product
received from each Receipt Point (“Theoretical Receipt Point Gallons”).

Such procedure shall be applied to all points from which Gas is received for Processing, with the
results summed to determine the total theoretical gallons of each Plant Product received from all
such points (“Theoretical Plant Gallons”).

Each Month Williams shall determine, by direct measurement, the total gallons of each Plant Product
actually recovered at the Plant. The actual gallons of each Plant Product recovered shall be
divided by the Theoretical Plant Gallons of that Plant Product to establish the “Allocation Factor”
for each Plant Product.

The Allocation Factor for each Plant Product shall then be multiplied by the Theoretical Receipt
Point Gallons of that Plant Product and by Shipper’s percentage interest in that Receipt Point, as
allocated by Shipper’s Operator at that Receipt Point, to establish Shipper’s gross quantity of
that Plant Product from that Receipt Point for the Month.

Appropriate adjustments shall be made to account for any Gas delivered or used upstream of the
Plant prior to Processing.

F-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “G”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

CALCULATION OF SHIPPER’S GROSS CRYOGENIC PROCESSING PLANT PRODUCTS

Williams shall use the most current Gas component analysis from the applicable point(s)
specified in Section 1.8 under the heading of “Determination of Gas Composition” (“Cryogenic
Composition Point(s)”) to calculate the number of gallons of each Cryogenic Processing Plant
Product per Mcf of Gas at each Cryogenic Composition Point(s) (“GPM Factor”).

Each Month the actual measured volume of Gas in Mcf from each Cryogenic Composition Points shall be
multiplied by the GPM Factor for each Cryogenic Processing Plant Product to determine the
theoretical gallons of each Cryogenic Processing Plant Product received from each Cryogenic
Composition Points “Theoretical Cryogenic Composition Point Gallons”).

Such procedure shall be applied to all points from which Gas is received for Cryogenic Processing,
with the results summed to determine the total theoretical gallons of each Cryogenic Processing
Plant Product received from all such points (“Theoretical Cryogenic Processing Plant Gallons”).

Each Month Williams shall determine, by direct measurement, the total gallons of each Cryogenic
Processing Plant Product actually recovered at the Cryogenic Processing Plant. The actual gallons
of each Cryogenic Processing Plant Product recovered shall be divided by the Theoretical Cryogenic
Processing Plant Gallons of that Cryogenic Processing Plant Product to establish the “Allocation
Factor” for each Cryogenic Processing Plant Product.

The Allocation Factor for each Cryogenic Processing Plant Product shall then be multiplied by the
Theoretical Cryogenic Composition Point Gallons of that Cryogenic Processing Plant Product and by
Shipper’s percentage interest in that Cryogenic Composition Point(s), as allocated by Shipper’s
Operator at that Cryogenic Composition Point(s), to establish Shipper’s gross quantity of that
Cryogenic Processing Plant Product from that Cryogenic Composition Point(s) for the Month.

Appropriate adjustments shall be made to account for any Gas delivered or used upstream of the
Plant prior to Cryogenic Processing.

G-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “H”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

BASIC PROCESSING MDQs

	 	 	 	 	 
	MDQs Associated with the Basic Processing and Treating Fee-Type:	 	MDQs (Mcf/Day):
	Valley Plants (includes the Grand Valley Plant, the Parachute Plants,
	 	 	900,000	 
	the Haybarn Plant, and the Roan Cliff Plant)
	 	 	 	 
	 
	Sagebrush Plant
	 	 	40,000	 

CRYOGENIC PROCESSING MDQs

	 	 	 	 	 
	MDQs Associated with the Cryogenic Processing (Not a Fee-Type):	 	MDQs	 (Mcf/Day):
	All Williams Cryogenic Processing Plants
	 	450,000

H-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “I”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

AGREEMENTS WITH RMT FIRM CUSTOMERS

Gas Purchase Agreement by and between Williams Production RMT Company and Riley Natural Gas
Company and Petroleum Development Corporation, dated June 1, 2006

Gas Purchase Agreement by and between Williams Production RMT Company and Nonsuch Natural Gas,
Inc., dated June 1, 2006

Gas Purchase Agreement by and between Williams Production RMT Company and Noble Energy, Inc., dated
January 1, 2007

Gas Purchase Agreement by and between Williams Production RMT Company and Hunter Dos Tres
Corporation, dated November 1, 2006

I-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “J”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

CO2 LIMITS

	1.	 	[***] percent ([***]%) by volume calculated as a volume weighted average percentage of all
the Receipt Point(s) upstream of the inlet of the Ryan Gulch/Sagebrush CO2 Treater.
	 
	2.	 	[***] percent ([***]%) by volume calculated as a volume weighted average percentage of all
the Receipt Point(s) upstream of the inlet of the Parachute CO2 Treater.
	 
	3.	 	[***] percent ([***]%) by volume calculated as a volume weighted average percentage of all
the Receipt Point(s) upstream of the inlet of the Willow Creek Plant CO2 Treater.

J-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “K”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

FIELD GATHERING AREA MDQs AND MONTHLY AVERAGE 

RECEIPT POINT PRESSURE LIMITS

Field Gathering Area

	 	 	 	 	 
	Grand Valley Compressors (MMcfd) MDQ	 	200
	Receipt Point	 	MAP (psig)
	Starkey

	 	 	250	 
	Riley Gulch

	 	 	250	 
	Jangles Ditch

	 	 	250	 
	Callahan

	 	 	250	 
	Wheeler

	 	 	250	 
	Una Compressor

	 	 	250	 
	 	 	 

	 	 	 	 	 
	Parachute Compressors (MMcfd) MDQ	 	245
	Receipt Point	 	MAP (psig)
	Wasatch

	 	 	250	 
	Rabbit Brush

	 	 	250	 
	Roan Cliffs

	 	 	250	 
	Haybarn

	 	 	250	 
	Hayes Gulch

	 	 	250	 
	Cottonwood

	 	 	250	 
	 	 	 

	 	 	 	 	 
	Rulison Compressors (MMcfd) MDQ	 	330
	Receipt Point	 	MAP (psig)
	Sharrard Park

	 	 	250	 
	Rulison

	 	 	250	 
	Webster

	 	 	250	 
	Heathhill

	 	 	250	 
	Clough

	 	 	250	 
	Anvil Point

	 	 	250	 
	 	 	 

	 	 	 	 	 
	Ryan Gulch Compressors RMT only (MMcfd) MDQ	 	30
	Receipt Point	 	MAP (psig)
	Sagebrush LP

	 	 	250	 
	Ryan Gulch

	 	 	250	 
	 	 	 

K-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

	 	 	 	 	 
	Trail Ridge Compressors (MMcfd) MDQ	 	90
	Receipt Point	 	MAP (psig)
	Crawford Trail

	 	250
	 	 	 

	 	 	 	 	 
	Hyrup (MMcfd) MDQ	 	50
	Receipt Point	 	MAP (psig)
	Hyrup

	 	50
	 	 	 

K-2

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “L”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

EXCEPTED GAS

	1.	 	Second Amended and Restated Gas Gathering Agreement by and between Williams Production RMT
Company LLC as successor to Orion Energy Partners L.P. and EnCana Oil & Gas (USA) Inc. dated
November 1, 2010.
	 
	2.	 	Gas Gathering Agreement by and between Williams Production RMT Company as successor to
Laramie Energy, LLC and ETC Canyon Pipeline, LLC as successor to Canyon Resources, L.L.C.
dated September 1, 2005.
	 
	3.	 	Gas Gathering Agreement between ETC Canyon Pipeline, LLC and Williams Production RMT Company
dated August 1, 2004
	 
	4.	 	Services Agreement by and between Williams Production RMT Company LLC and Enterprise Gas
Processing, LLC dated November, 1, 2010.
	 
	5.	 	Two transaction confirmations dated September 15, 2009 and September 15, 2009, each issued
pursuant to a Base Contract for Sale and Purchase of Natural Gas between WPX and Public
Service Company of Colorado dated January 1, 2004, and one transaction confirmation dated
October 23, 2009, issued pursuant to a Base Contract for Sale and Purchase of Natural Gas
between WPX and Rocky Mountain Natural Gas LLC dated July 1, 2006, collectively referred to as
the “Xcel Agreements”.

L-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

EXHIBIT “M”

TO THE AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

DATED AS OF August 1, 2011

between

Williams Field Services Company, LLC

and

Williams Production RMT Company LLC

and

Williams Production Ryan Gulch LLC

and

WPX Energy Marketing, LLC

SAMPLE CALCULATIONS OF FEE ADJUSTMENT

For an IRR = 12%

The table below contains all inputs, intermediate and final results for the formula above;

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	1

	 	 	 	V1c=
	 	 	100	 	 	 	 	(1+0.12)-1 =
	 	 	0.893	 	 	V1c(1+IRR)-1=100(0.893)=
	 	 	89.29	 
	 	 	2

	 	 	 	V2c=
	 	 	101	 	 	 	 	(1+0.12)-2 =
	 	 	0.797	 	 	V2c(1+IRR)-2=101(0.797)=
	 	 	80.52	 
	 	 	3

	 	 	 	V3c=
	 	 	102	 	 	 	 	(1+0.12)-3 =
	 	 	0.712	 	 	V3c(1+IRR)-3=102(0.712)=
	 	 	72.60	 
	 	 	4

	 	 	 	V4c=
	 	 	103	 	 	 	 	(1+0.12)-4 =
	 	 	0.636	 	 	V4c(1+IRR)-4=103(0.636)=
	 	 	65.46	 
	 	 	5

	 	 	 	V5c=
	 	 	104	 	 	 	 	(1+0.12)-5 =
	 	 	0.567	 	 	V5c(1+IRR)-5=104(0.567)=
	 	 	59.01	 
	 	 	6

	 	 	 	V6c=
	 	 	105	 	 	 	 	(1+0.12)-6 =
	 	 	0.507	 	 	V6c(1+IRR)-6=105(0.507)=
	 	 	53.20	 
	 	 	7

	 	 	 	V7c=
	 	 	106	 	 	 	 	(1+0.12)-7 =
	 	 	0.452	 	 	V7c(1+IRR)-7=106(0.452)=
	 	 	47.95	 
	 	 	8

	 	 	 	V8c=
	 	 	107	 	 	 	 	(1+0.12)-8 =
	 	 	0.404	 	 	V8c(1+IRR)-8=107(0.404)=
	 	 	43.22	 
	 	 	9

	 	 	 	V9c=
	 	 	108	 	 	 	 	(1+0.12)-9 =
	 	 	0.361	 	 	V9c(1+IRR)-9=108(0.361)=
	 	 	38.95	 
	  y=
	 	10

	 	  Vyc=
	 	V10c=
	 	 	109	 	 	(1+IRR)-y=
	 	(1+0.12)-10 =
	 	 	0.322	 	 	V10c(1+IRR)-10=109(0.322)=
	 	 	35.10	 
	 	11

	 	 	V11c=
	 	 	110	 	 	 	(1+0.12)-11 =
	 	 	0.287	 	 	V11c(1+IRR)-11=110(0.287)=
	 	 	31.62	 
	 	 	12

	 	 	 	V12c=
	 	 	111	 	 	 	 	(1+0.12)-12 =
	 	 	0.257	 	 	V12c(1+IRR)-12=111(0.257)=
	 	 	28.49	 
	 	 	13

	 	 	 	V13c=
	 	 	112	 	 	 	 	(1+0.12)-13 =
	 	 	0.229	 	 	V13c(1+IRR)-13=112(0.229)=
	 	 	25.67	 
	 	 	14

	 	 	 	V14c=
	 	 	113	 	 	 	 	(1+0.12)-14 =
	 	 	0.205	 	 	V14c(1+IRR)-14=113(0.205)=
	 	 	23.12	 
	 	 	15

	 	 	 	V15c=
	 	 	114	 	 	 	 	(1+0.12)-15 =
	 	 	0.183	 	 	V15c(1+IRR)-15=114(0.183)=
	 	 	20.83	 
	 	 	16

	 	 	 	V16c=
	 	 	115	 	 	 	 	(1+0.12)-16 =
	 	 	0.163	 	 	V16c(1+IRR)-16=115(0.163)=
	 	 	18.76	 
	 	 	17

	 	 	 	V17c=
	 	 	116	 	 	 	 	(1+0.12)-17 =
	 	 	0.146	 	 	V17c(1+IRR)-17=116(0.146)=
	 	 	16.89	 
	 	 	18

	 	 	 	V18c=
	 	 	117	 	 	 	 	(1+0.12)-18 =
	 	 	0.130	 	 	V18c(1+IRR)-18=117(0.130)=
	 	 	15.21	 
	 	 	19

	 	 	 	V19c=
	 	 	118	 	 	 	 	(1+0.12)-19 =
	 	 	0.116	 	 	V19c(1+IRR)-19=118(0.116)=
	 	 	13.70	 
	 	 	20

	 	 	 	V20c=
	 	 	119	 	 	 	 	(1+0.12)-20 =
	 	 	0.104	 	 	V20c(1+IRR)-20=119(0.104)=
	 	 	12.34	 
	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Sum (time adjusted current volume)=
	 	 	791.9	 

M-1

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

The table below contains all inputs, intermediate and final results for the formula above;

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	1

	 	 	 	V1p=
	 	 	110	 	 	 	 	(1+0.12)-1=
	 	 	0.893	 	 	(V1p -V1c)(1+IRR)-1
=(110-100)(0.893)=
	 	 	8.93	 
	 	 	2

	 	 	 	V2p=
	 	 	112	 	 	 	 	(1+0.12)-2=
	 	 	0.797	 	 	(V2p-V2c)(1+IRR)-2=(112-101)(0.797)=
	 	 	8.77	 
	 	 	3

	 	 	 	V3p=
	 	 	114	 	 	 	 	(1+0.12)-3=
	 	 	0.712	 	 	(V3p-V3c)(1+IRR)-3=(114-102)(0.712)=
	 	 	8.54	 
	 	 	4

	 	 	 	V4p=
	 	 	116	 	 	 	 	(1+0.12)-4=
	 	 	0.636	 	 	(V4p-V4c)(1+IRR)-4=(116-103)(0.636)=
	 	 	8.26	 
	 	 	5

	 	 	 	V5p=
	 	 	118	 	 	 	 	(1+0.12)-5=
	 	 	0.567	 	 	(V5p-V5c)(1+IRR)-5=(118-104)(0.567)=
	 	 	7.94	 
	 	 	6

	 	 	 	V6p=
	 	 	120	 	 	 	 	(1+0.12)-6=
	 	 	0.507	 	 	(V6p-V6c)(1+IRR)-6=(120-105)(0.507)=
	 	 	7.60	 
	 	 	7

	 	 	 	V7p=
	 	 	122	 	 	 	 	(1+0.12)-7=
	 	 	0.452	 	 	(V7p-V7c)(1+IRR)-7=(122-106)(0.452)=
	 	 	7.24	 
	 	 	8

	 	 	 	V8p=
	 	 	124	 	 	 	 	(1+0.12)-8=
	 	 	0.404	 	 	(V8p-V8c)(1+IRR)-8=(124-107)(0.404)=
	 	 	6.87	 
	 	 	9

	 	 	 	V9p=
	 	 	126	 	 	 	 	(1+0.12)-9=
	 	 	0.361	 	 	(V9p-V9c)(1+IRR)-9=(126-108)(0.361)=
	 	 	6.49	 
	  y=
	 	10

	 	  Vyp=
	 	V10p=
	 	 	128	 	 	(1+IRR)-y=
	 	(1+0.12)-10=
	 	 	0.322	 	 	(V10p-V10c)(1+IRR)-10=(128-109)(0.322)=
	 	 	6.12	 
	 	11

	 	 	V11p=
	 	 	130	 	 	 	(1+0.12)-11=
	 	 	0.287	 	 	(V11p-V11c)(1+IRR)-11=(130-110)(0.287)=
	 	 	5.75	 
	 	 	12

	 	 	 	V12p=
	 	 	132	 	 	 	 	(1+0.12)-12=
	 	 	0.257	 	 	(V12p-V12c)(1+IRR)-12=(132-111)(0.257)=
	 	 	5.39	 
	 	 	13

	 	 	 	V13p=
	 	 	134	 	 	 	 	(1+0.12)-13=
	 	 	0.229	 	 	(V13p-V13c)(1+IRR)-13=(134-112)(0.229)=
	 	 	5.04	 
	 	 	14

	 	 	 	V14p=
	 	 	136	 	 	 	 	(1+0.12)-14=
	 	 	0.205	 	 	(V14p-V14c)(1+IRR)-14=(136-113)(0.205)=
	 	 	4.71	 
	 	 	15

	 	 	 	V15p=
	 	 	138	 	 	 	 	(1+0.12)-15=
	 	 	0.183	 	 	(V15c-V15c)(1+IRR)-15=(138-114)(0.183)=
	 	 	4.39	 
	 	 	16

	 	 	 	V16p=
	 	 	140	 	 	 	 	(1+0.12)-16=
	 	 	0.163	 	 	(V16c-V16c)(1+IRR)-16=(140-115)(0.163)=
	 	 	4.08	 
	 	 	17

	 	 	 	V17p=
	 	 	142	 	 	 	 	(1+0.12)-17=
	 	 	0.146	 	 	(V17c-V17c)(1+IRR)-17=(142-116)(0.146)=
	 	 	3.79	 
	 	 	18

	 	 	 	V18p=
	 	 	144	 	 	 	 	(1+0.12)-18=
	 	 	0.130	 	 	(V18c-V18c)(1+IRR)-18=(144-117)(0.130)=
	 	 	3.51	 
	 	 	19

	 	 	 	V19p=
	 	 	146	 	 	 	 	(1+0.12)-19=
	 	 	0.116	 	 	(V19c-V19c)(1+IRR)-19=(146-118)(0.116)=
	 	 	3.25	 
	 	 	20

	 	 	 	V20p=
	 	 	148	 	 	 	 	(1+0.12)-20=
	 	 	0.104	 	 	(V20c-V20c)(1+IRR)-20=(148-119)(0.104)=
	 	 	3.01	 
	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Sum (time adjusted incremental volume)=
	 	 	119.7	 

Where;

			
		 	Fc is the Current Fee

Fv is the Variable portion of the Fee

M-2

 

AMENDED AND RESTATED GAS GATHERING, PROCESSING, DEHYDRATING AND TREATING AGREEMENT

			
	 	 	Fi is the Incremental Fee

y is the year (from 1 to 20)

	 	 	Vyc is the average expected production deliverability for year y predicted by the
hydraulic model using the Expansion facilities included in the last Adjusted Fee

	 	 	Vyp is the average production deliverability for year y predicted by the
hydraulic model using the Expansion facilities included in the current Incremental Fee.

	 	 	IRR is the target pretax internal rate of return

M-3exv10w8

Exhibit 10.8

Form of

WPX Energy, Inc.

2011 Incentive Plan

Effective as of ___

 

 

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	Article 1. Effective Date, History, Objectives, and Duration
	 	 	1	 
	1.1 Effective Date
	 	 	1	 
	1.2 Objectives of the Plan
	 	 	1	 
	1.3 Duration of the Plan
	 	 	1	 
	 
	 	 	 	 
	Article 2. Definitions
	 	 	2	 
	2.1 Acquired Entity Award
	 	 	2	 
	2.2 Affiliate
	 	 	2	 
	2.3 Annual Meeting of Company Stockholders
	 	 	2	 
	2.4 Award
	 	 	2	 
	2.5 Award Agreement
	 	 	2	 
	2.6 Base Amount
	 	 	2	 
	2.7 Board
	 	 	2	 
	2.8 CEO
	 	 	2	 
	2.9 Code
	 	 	2	 
	2.10 Committee and Management Committee
	 	 	2	 
	2.11 Common Stock
	 	 	2	 
	2.12 Controlled Affiliate
	 	 	2	 
	2.13 Covered Employee
	 	 	2	 
	2.14 Designated 162(m) Group
	 	 	3	 
	2.15 Director Annual Grant
	 	 	3	 
	2.16 Director Fees
	 	 	3	 
	2.17 Disability
	 	 	3	 
	2.18 Dividend Equivalent
	 	 	3	 
	2.19 Eligible Person
	 	 	3	 
	2.20 Exchange Act
	 	 	3	 
	2.21 Equity Election
	 	 	3	 
	2.22 Fair Market Value
	 	 	3	 
	2.23 Grant Date
	 	 	3	 
	2.24 Grantee
	 	 	4	 
	2.25 Incentive Stock Option
	 	 	4	 
	2.26 including or includes
	 	 	4	 
	2.27 Non-Equity Incentive Award
	 	 	4	 
	2.28 Non-Management Director
	 	 	4	 
	2.29 Non-Qualified Stock Option
	 	 	4	 
	2.30 Option
	 	 	4	 
	2.31 Option Price
	 	 	4	 
	2.32 Option Term
	 	 	4	 
	2.33 Other Stock-Based Award
	 	 	4	 
	2.34 Performance-Based Exception
	 	 	4	 
	2.35 Performance Measures
	 	 	4	 
	2.36 Performance Period
	 	 	4	 

 

 

	 	 	 	 	 
	 	 	Page	 
	2.37 Performance Share and Performance Unit
	 	 	4	 
	2.38 Period of Restriction
	 	 	4	 
	2.39 Person
	 	 	4	 
	2.40 Restricted Stock Unit
	 	 	5	 
	2.41 Rule 16b-3
	 	 	5	 
	2.42 SEC
	 	 	5	 
	2.43 Section 16 Non-Management Director
	 	 	5	 
	2.44 Section 16 Person
	 	 	5	 
	2.45 Share
	 	 	5	 
	2.46 Shares of Restricted Stock or Restricted Stock
	 	 	5	 
	2.47 Spin-Off Awards
	 	 	5	 
	2.48 Stock Appreciation Right or SAR
	 	 	5	 
	2.49 Termination of Affiliation
	 	 	5	 
	 
	 	 	 	 
	Article 3. — Administration
	 	 	6	 
	3.1 Committee
	 	 	6	 
	3.2 Powers of Committee
	 	 	7	 
	 
	 	 	 	 
	Article 4. — Shares Subject to the Plan, Maximum Awards, and 162(m) Compliance
	 	 	10	 
	4.1 Number of Shares Available for Grants
	 	 	10	 
	4.2 Adjustments in Authorized Shares and Awards
	 	 	10	 
	4.3 Compliance with Section 162(m) of the Code
	 	 	11	 
	(a) Section 162(m) Compliance
	 	 	11	 
	(b) Annual Individual Limitations
	 	 	11	 
	 
	4.4 Performance-Based Exception Under Section 162(m)
	 	 	11	 
	 
	 	 	 	 
	Article 5. — Eligibility and General Conditions of Awards
	 	 	15	 
	5.1 Eligibility
	 	 	15	 
	5.2 Award Agreement
	 	 	15	 
	5.3 General Terms and Termination of Affiliation
	 	 	15	 
	5.4 Nontransferability of Awards
	 	 	15	 
	5.5 Cancellation and Rescission of Awards
	 	 	16	 
	5.6 Stand-Alone, Tandem and Substitute Awards
	 	 	16	 
	5.7 Compliance with Rule 16b-3
	 	 	17	 
	(a) Reformation to Comply with Exchange Act Rules
	 	 	17	 
	(b) Rule 16b-3 Administration
	 	 	17	 
	 
	5.8 Deferral of Award Payouts
	 	 	17	 
	 
	 	 	 	 
	Article 6. — Stock Options
	 	 	19	 
	6.1 Grant of Options
	 	 	19	 
	6.2 Award Agreement
	 	 	19	 
	6.3 Option Price; No Repricing
	 	 	19	 
	6.4 Grant of Incentive Stock Options
	 	 	19	 
	6.5 Payment
	 	 	20	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	Article 7. — Shares of Restricted Stock
	 	 	22	 
	7.1 Grant of Shares of Restricted Stock
	 	 	22	 
	7.2 Award Agreement
	 	 	22	 
	7.3 Consideration for Shares of Restricted Stock
	 	 	22	 
	7.4 Effect of Forfeiture
	 	 	22	 
	7.5 Escrow; Legends
	 	 	22	 
	7.6 Voting Rights; Dividends and Distributions
	 	 	23	 
	 
	 	 	 	 
	Article 8. — Restricted Stock Units
	 	 	24	 
	8.1 Grant of Restricted Stock Units
	 	 	24	 
	8.2 Delivery and Limitations
	 	 	24	 
	8.3 Forfeiture
	 	 	24	 
	 
	 	 	 	 
	Article 9. — Performance Units and Performance Shares
	 	 	25	 
	9.1 Grant of Performance Units and Performance Shares
	 	 	25	 
	9.2 Value/Performance Goals
	 	 	25	 
	(a) Performance Unit
	 	 	25	 
	(b) Performance Share
	 	 	25	 
	 
	9.3 Earning of Performance Units and Performance Shares
	 	 	25	 
	9.4 Forfeiture
	 	 	26	 
	 
	 	 	 	 
	Article 10. — Stock Appreciation Rights
	 	 	27	 
	10.1 Grant of SARs
	 	 	27	 
	10.2 Award Agreement
	 	 	27	 
	10.3 Payments of SAR Amount
	 	 	27	 
	10.4 Forfeiture
	 	 	27	 
	10.5 No Repricing
	 	 	27	 
	 
	 	 	 	 
	Article 11. — Other Stock-Based Awards
	 	 	28	 
	 
	 	 	 	 
	Article 12. — Non-Equity Incentive Awards
	 	 	29	 
	 
	 	 	 	 
	Article 13. — Change in Control
	 	 	30	 
	13.1 Acceleration of Exercisability and Lapse of Restrictions
	 	 	30	 
	13.2 Definitions
	 	 	30	 
	(a) Cause
	 	 	30	 
	(b) Change Date
	 	 	31	 
	(c) Change in Control
	 	 	31	 
	(d) Good Reason
	 	 	32	 
	(e) Incumbent Directors
	 	 	33	 
	(f) Retirement
	 	 	33	 
	(g) Surviving Enterprise
	 	 	33	 
	(h) Voting Securities
	 	 	33	 
	 
	13.3 Flexibility to Amend
	 	 	33	 
	 
	 	 	 	 
	Article 14. — Non-Management Director Awards
	 	 	34	 
	14.1 Director Annual Grant
	 	 	34	 

iii

 

	 	 	 	 	 
	 	 	Page	 
	(a) Automatic Grant of Director Annual Grant
	 	 	34	 
	(b) Prorated Director Annual Grant
	 	 	34	 
	(c) Non-Management Director Status
	 	 	35	 
	(d) Vesting and Payment
	 	 	35	 
	 
	 	 	 	 
	14.2 Election to Receive Director Fees in Shares or Restricted Stock Units in Lieu of Cash
	 	 	35	 
	(a) Payment of Director Fees in Shares
	 	 	35	 
	(b) Payment of Director Fees in Restricted Stock Units
	 	 	36	 
	 
	 	 	 	 
	14.3 Deferral Elections
	 	 	36	 
	(a) Timing of Deferral Elections
	 	 	36	 
	(b) Content of Deferral Elections
	 	 	36	 
	(c) Deferral Account
	 	 	36	 
	(d) Settlement of Deferral Accounts
	 	 	37	 
	 
	 	 	 	 
	14.4. Insufficient Number of Shares
	 	 	37	 
	14.5 Non-Forfeitability
	 	 	37	 
	 
	 	 	 	 
	Article 15. — Amendment, Modification, and Termination
	 	 	38	 
	15.1 Amendment, Modification, and Termination
	 	 	38	 
	15.2 Awards Previously Granted
	 	 	38	 
	 
	 	 	 	 
	Article 16. — Withholding
	 	 	39	 
	16.1 Mandatory Tax Withholding
	 	 	39	 
	16.2 Notification under Code Section 83(b)
	 	 	39	 
	 
	 	 	 	 
	Article 17. — Additional Provisions
	 	 	40	 
	17.1 Successors
	 	 	40	 
	17.2 Severability
	 	 	40	 
	17.3 Requirements of Law
	 	 	40	 
	17.4 Securities Law Compliance
	 	 	40	 
	17.5 No Rights as a Stockholder
	 	 	41	 
	17.6 Nature of Payments
	 	 	41	 
	17.7 Non-Exclusivity of Plan
	 	 	41	 
	17.8 Governing Law
	 	 	41	 
	17.9 Share Certificates
	 	 	41	 
	17.10 Unfunded Status of Awards; Creation of Trusts
	 	 	42	 
	17.11 Employment
	 	 	42	 
	17.12 Participation
	 	 	42	 
	17.13 Military Service
	 	 	42	 
	17.14 Construction; Gender and Number
	 	 	42	 
	17.15 Headings
	 	 	42	 
	17.16 Obligations
	 	 	42	 
	17.17 No Right to Continue as Director
	 	 	42	 
	17.18 Code Section 409A Compliance
	 	 	42	 

iv

 

WPX ENERGY, INC.

2011 INCENTIVE PLAN

(Effective as of ___________)

Article 1. — Effective Date, History, Objectives, and Duration

1.1 Effective Date. WPX Energy, Inc., a Delaware corporation (the “Company”), established
an incentive compensation plan known as the WPX Energy, Inc. 2011 Incentive Plan (the “Plan”)
effective __________, 2011 (the “Effective Date”) upon approval of the Plan by The Williams
Companies, Inc. as the Company’s sole stockholder.

1.2 Objectives of the Plan. The Plan is intended (a) to allow selected employees and
officers of the Company and its Affiliates to acquire or increase equity ownership in the Company,
thereby strengthening their commitment to the success of the Company and stimulating their efforts
on behalf of the Company, and to assist the Company and its Affiliates in attracting new employees
and officers and retaining existing employees and officers, (b) to provide Non-Equity Incentive
Award (as defined below) opportunities to employees in the Designated 162(m) Group (as defined
below), (c) to optimize the profitability and growth of the Company and its Affiliates through
incentives which are consistent with the Company’s goals, and (d) to attract and retain highly
qualified persons to serve as Non-Management Directors and to promote ownership by such
Non-Management Directors of a greater proprietary interest in the Company, thereby aligning such
Non-Management Directors’ interests more closely with the interests of the Company’s stockholders.

1.3 Duration of the Plan. The Plan shall commence on the Effective Date and shall remain
in effect, subject to the right of the Board of Directors of the Company (the “Board”) to amend or
terminate the Plan at any time pursuant to Article 15 hereof, until all Shares subject to it shall
have been purchased or acquired according to the Plan’s provisions, or, if earlier, __________,
2021, the tenth (10th) anniversary of the Effective Date. Termination of the Plan will not affect
the rights and obligations of the Grantees and the Company arising under Awards theretofore granted
and then in effect.

1

 

Article 2. — Definitions

     Whenever used in the Plan, the following terms shall have the meanings set forth below:

2.1 “Acquired Entity Award” has the meaning set forth in Section 5.6.

2.2 “Affiliate” means any Person that directly or indirectly, through one or more
intermediaries, controls, or is controlled by or is under common control with the Company.

2.3 “Annual Meeting of Company Stockholders” has the meaning set forth in Section 14.1.

2.4 “Award” means Options (including Non-Qualified Stock Options and Incentive Stock
Options), Shares of Restricted Stock, Restricted Stock Units, Performance Units (which may be paid
in cash), Performance Shares, Stock Appreciation Rights, Other Stock-Based Awards, Non-Equity
Incentive Awards or Director Annual Grants granted under the Plan.

2.5 “Award Agreement” means the written agreement or other instrument as may be approved
from time to time by the Committee or Management Committee (as applicable) by which an Award shall
be evidenced. An Award Agreement may be in the form of either (a) an agreement to be either
executed by both the Grantee and the Company (or an authorized representative of the Company) or
delivered and acknowledged electronically as the Committee shall determine or (b) certificates,
notices or similar instruments as approved by the Committee or Management Committee (as
applicable).

2.6 “Base Amount” means with respect to a Stock Appreciation Right, the amount with
respect to which the appreciation in the value of a Share shall be measured over the period
beginning with the Grant Date and ending on the date of exercise of such Stock Appreciation Right.

2.7 “Board” has the meaning set forth in Section 1.3.

2.8 “CEO” means the Chief Executive Officer of the Company.

2.9 “Code” means the Internal Revenue Code of 1986, as amended from time to time.
References to a particular section of the Code include references to regulations and rulings
thereunder and to successor provisions.

2.10 “Committee” and “Management Committee” have the respective meanings set forth
in Article 3.

2.11 “Common Stock” means the common stock, $1.00 par value, of the Company.

2.12 “Controlled Affiliate” means any Person that directly or indirectly, through one or
more intermediaries, is controlled by the Company.

2.13 “Covered Employee” means a Grantee who, as of the date that the value of an Award is
recognizable as income, is one of the group of “covered employees,” within the meaning of Section
162(m) of the Code, with respect to the Company.

2

 

2.14 “Designated 162(m) Group” means that group of persons whom the Committee believes may
be Covered Employees with respect to a current or future fiscal year of the Company.

2.15 “Director Annual Grant” means an Award made to a Non-Management Director under Section
14.1.

2.16 “Director Fees” has the meaning set forth in Section 14.2.

2.17 “Disability” means, unless otherwise defined in an Award Agreement, or as otherwise
determined under procedures established by the Committee for purposes of the Plan, for purposes of
the exercise of an Incentive Stock Option, a disability within the meaning of Section 22(e)(3) of
the Code, and for all other purposes, disability as defined in the Company’s long-term disability
plan in which the Grantee participates or is eligible to participate, as determined by the
Committee.

2.18 “Dividend Equivalent” means a right to receive or accrue, to the extent provided under
the respective Award Agreement, payments equal to dividends or distributions of property on a
specified number of Shares.

2.19 “Eligible Person” means any employee (including any officer) of the Company or an
Affiliate that is a Controlled Affiliate or a parent (as defined in Rule 405 promulgated under the
Securities Act), except that only employees in the Designated 162(m) Group shall be Eligible
Persons with respect to Non-Equity Incentive Awards.

2.20 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time. References to a particular section of the Exchange Act include references to successor
provisions.

2.21 “Equity Election” has the meaning set forth in Section 14.2.

2.22 “Fair Market Value” means (a) with respect to any property other than Shares, the fair
market value of such property determined by such methods or procedures as shall be established from
time to time by the Committee, and (b) with respect to Shares, unless otherwise determined in the
good faith discretion of the Committee, as of any date: (i) the closing price on the date of
determination reported in The Wall Street Journal (or an equivalent alternate or successor) (or, if
no sale of Shares was reported for such date, on the most recent trading day prior to such date on
which a sale of Shares was reported); (ii) if the Shares are not listed on the New York Stock
Exchange, the closing price of the Shares on such other national exchange on which the Shares are
principally traded or as reported by the Nasdaq Global Select or Global Market System, or similar
securities market, or if no such quotations are available, the average of the high bid and low
asked quotations in the over-the-counter market as reported by the Nasdaq Capital Market or similar
securities market; or (iii) in the event that there shall be no public market for the Shares, the
fair market value of the Shares as determined (which determination shall be conclusive) in good
faith by the Committee.

2.23 “Grant Date” means the date on which an Award is granted or, in the case of a grant to
an Eligible Person, such later date as specified in advance by the Committee.

3

 

2.24 “Grantee” means an Eligible Person who has been granted an Award.

2.25 “Incentive Stock Option” means an Option that is intended to meet the requirements of
Section 422 of the Code.

2.26 “including” or “includes” means “including, without limitation,” or “includes,
without limitation,” respectively.

2.27 “Non-Equity Incentive Award” means an Award granted to a person in the Designated
162(m) Group that is not granted, valued by reference to, or payable in Shares.

2.28 “Non-Management Director” means a member of the Board who is not an employee of the
Company or any Affiliate.

2.29 “Non-Qualified Stock Option” means an Option that is not an Incentive Stock Option.

2.30 “Option” means an option granted under Article 6 of the Plan.

2.31 “Option Price” means the price at which a Share may be purchased by a Grantee pursuant
to the exercise of an Option.

2.32 “Option Term” means the period beginning on the Grant Date of an Option and ending on
the date such Option expires, terminates or is cancelled.

2.33 “Other Stock-Based Award” means a right, granted under Article 11 of the Plan, that
relates to or is valued by reference to Shares or other Awards relating to Shares.

2.34 “Performance-Based Exception” means the performance-based exception from the tax
deductibility limitations of Section 162(m) of the Code contained in Section 162(m)(4)(C) of the
Code (including the special provisions for options thereunder).

2.35 “Performance Measures” has the meaning set forth in Section 4.4.

2.36 “Performance Period” means the time period over which performance goals shall be
determined.

2.37 “Performance Share” and “Performance Unit” have the respective meanings set
forth in Article 9.

2.38 “Period of Restriction” means the period during which Shares of Restricted Stock or
Restricted Stock Units are subject to forfeiture if the conditions specified in the Award Agreement
are not satisfied.

2.39 “Person” means any individual, sole proprietorship, partnership, joint venture,
limited liability company, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government instrumentality, division, agency,
body or department.

4

 

2.40 “Restricted Stock Unit” means a right, granted in accordance with Article 8 hereof, to
receive a Share or cash payment equal to the value thereof, subject to such Period of Restriction
as the Committee shall determine.

2.41 “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange Act, as
amended from time to time, together with any successor rule.

2.42 “SEC” means the United States Securities and Exchange Commission, or any successor
thereto.

2.43 “Section 16 Non-Management Director” means a Non-Management Director who satisfies the
requirements to qualify as a “non-employee director” under Rule 16b-3.

2.44 “Section 16 Person” means a person who is subject to potential liability under Section
16(b) of the Exchange Act with respect to transactions involving equity securities of the Company.

2.45 “Securities Act” means the Securities Act of 1933, as amended from time to time. References
to a particular section of the Securities Act include references to successor provisions.

2.46 “Share” means a share of Common Stock, and such other securities of the Company as may
be substituted or resubstituted for Shares pursuant to Section 4.2 hereof.

2.47 “Shares of Restricted Stock” or “Restricted Stock” means Shares that are
subject to forfeiture if the Grantee does not satisfy the conditions specified in the Award
Agreement applicable to such Shares.

2.48 “Spin-Off Awards” mean Awards granted under this Plan upon the assumption by the
Company of equity-based compensation awards previously granted by The Williams Companies, Inc. in
connection with the spin-off of the Company from The Williams Companies, Inc. (“Spin-Off”). Such
assumed Awards shall be referred to herein as (“Assumed Williams Awards”). Nothing in this Plan
shall require the Company to grant any Assumed Williams Awards under this Plan.

2.49 “Stock Appreciation Right” or “SAR” has the meaning set forth in Section 10.1
hereof.

2.50 “Termination of Affiliation” occurs on the first day on which an individual is for any
reason no longer providing services to the Company or any Affiliate in the capacity of an employee
or officer, or with respect to an individual who is solely an employee or officer of an Affiliate,
the first day on which such entity ceases to be an Affiliate of the Company. Notwithstanding the
foregoing, except as otherwise provided in the Award Agreement with respect to such Award, with
respect to an Award subject to Section 409A of the Code, “Termination of Affiliation” means a
“separation from service” as defined in Section 409A of the Code and regulations and other
administrative guidance promulgated thereunder.

5

 

Article 3. — Administration

3.1 Committee.

     (a) Subject to Articles 14 and 15, and to Section 3.2, the Plan shall be administered by a
committee (the “Committee”). Except to the extent the Board reserves administrative powers to
itself or appoints a different committee to administer the Plan, the Committee shall be (i) the
Board, with respect to all Non-Management Directors, (ii) the Compensation Committee of the Board,
with respect to all executive officers of the Company (which term shall have the same meaning as
the term “officer” as defined in Rule 16a-1(f) promulgated under the Exchange Act and shall in any
event include all of the members of the Company’s Executive Officer Team (“EOT”)) and any other
Eligible Person with respect to whom it elects to act as the Committee, and (iii) except as the
Committee may provide, if the CEO is a member of the Board, a committee consisting of the CEO, with
respect to any Eligible Person other than an executive officer of the Company. In addition, to the
extent the Board considers it desirable to comply with Rule 16b-3 or meet the Performance-Based
Exception, the Committee shall consist of two or more directors of the Company, all of whom qualify
both as “outside directors” within the meaning of Section 162(m) of the Code and as Section 16
Non-Management Directors (the “Independent Committee”). The number of members of the Committee
shall from time to time be increased or decreased, and shall be subject to such conditions, in each
case as the Board deems appropriate to permit transactions in Shares pursuant to the Plan to
satisfy such conditions of Rule 16b-3 and the Performance-Based Exception as then in effect.

     (b) The Board or the Compensation Committee may, by resolution, appoint and delegate to
another committee of one or more officers of the Company (including the CEO) (a “Management
Committee”) any or all of the authority of the Board or the Committee, as applicable, with respect
to Awards to Grantees other than Grantees who are executive officers of the Company, Non-Management
Directors, or are persons in the Designated 162(m) Group for whom the Board or the Compensation
Committee desires to have the Performance-Based Exception apply and/or are Section 16 Persons at
the time any such delegated authority is exercised; provided, however, that the resolution so
authorizing such Management Committee shall specify the total number of Shares that may be subject
to Awards (if any) such Management Committee may award pursuant to such delegated authority, and
any such Award shall be subject to the form(s) of Award Agreement theretofore approved by the
Compensation Committee. Any delegation of authority pursuant to this Section 3.1(b) shall comply
with the requirements of applicable law, including Section 157(c) of the General Corporation Law of
the State of Delaware to the extent applicable.

     (c) Unless the context requires otherwise, any references herein to “Committee” include
references to the Board, the Compensation Committee of the Board, the Management Committee, the
Independent Committee (if distinct from any of the foregoing) or the CEO, as applicable. For
avoidance of doubt, notwithstanding any provision of the Plan to the contrary, any action taken by
the Compensation Committee of the Board shall be treated as a valid action of the Committee, except
as limited by the terms of the Board’s delegation of authority to the Compensation Committee of the
Board or in the event that such action would violate applicable law.

6

 

3.2 Powers of Committee. Subject to and consistent with the provisions of the Plan
(including Article 14 and any limitations in scope of authority established in accordance with
Section 3.1 above), the Committee has full and final authority and sole discretion as follows:

     (a) to determine when, to whom and in what types and amounts Awards should be granted;

     (b) to grant Awards in any number and amount to Eligible Persons, and to determine the terms
and conditions applicable to each Award (including the number of Shares or the amount of cash or
other property to which an Award will relate, any exercise price, grant price, Base Amount or
purchase price, any limitation or restriction, any schedule for or performance conditions relating
to the earning of the Award or the lapse of limitations, forfeiture restrictions, restrictions on
exercisability or transferability, any performance goals including those relating to the Company
and/or an Affiliate and/or any division thereof and/or an individual, and/or vesting based on the
passage of time, based in each case on such considerations as the Committee shall determine);

     (c) to determine the benefit payable under any Performance Unit, Performance Share, Other
Stock-Based Award or Non-Equity Incentive Award and to determine whether any performance or vesting
conditions have been satisfied;

     (d) to determine whether or not specific Awards shall be granted in connection with other
specific Awards, and if so, whether they shall be exercisable cumulatively with, or alternatively
to, such other specific Awards and all other matters to be determined in connection with an Award;

     (e) to determine the Option Term;

     (f) to determine the amount, if any, that a Grantee shall pay for Shares of Restricted Stock,
when Shares of Restricted Stock shall be forfeited and whether such Shares shall be held in escrow;

     (g) to determine whether, to what extent and under what circumstances an Award may be settled
in, or the exercise price of an Award may be paid in, cash, Shares, other Awards or other property,
or an Award may be accelerated, vested, canceled, forfeited or surrendered or any terms of the
Award may be waived, and to accelerate the exercisability of, and to accelerate or waive any or all
of the terms and conditions applicable to, any Award or any group of Awards for any reason and at
any time;

     (h) to determine with respect to Awards whether, to what extent and under what circumstances
cash, Shares, other Awards, other property and other amounts payable with respect to an Award will
be deferred either automatically (whether to limit loss of deductions pursuant to Section 162(m) of
the Code or otherwise), at the election of the Committee or at the election of the Grantee;

     (i) to offer to exchange or buy out any previously granted Award for a payment in cash, Shares
or one or more other Awards, subject to Section 6.3 and Section 10.5;

7

 

     (j) to construe and interpret the Plan and to make all determinations, including factual
determinations, necessary or advisable for the administration of the Plan;

     (k) to make, amend, suspend, waive and rescind rules and regulations relating to the Plan;

     (l) to appoint such agents as the Committee may deem necessary or advisable to administer the
Plan;

     (m) to determine the terms and conditions of all Award Agreements applicable to Eligible
Persons (which need not be identical) and, with the consent of the Grantee, to amend any such Award
Agreement at any time, among other things, to permit transfers of such Awards to the extent
permitted by the Plan; provided that the consent of the Grantee shall not be required for any
amendment (i) which does not materially adversely affect the rights of the Grantee, or (ii) which
is necessary or advisable (as determined by the Committee) to carry out the purpose of the Award as
a result of any new applicable law or change in an existing applicable law, or (iii) to the extent
the Award Agreement specifically permits amendment without consent, or (iv) provided for or
specifically contemplated in the Plan (such as Section 6.4 or Article 13);

     (n) to cancel, with the consent of the Grantee, outstanding Awards and to grant new Awards in
substitution therefor, subject to Section 6.3 and Section 10.5;

     (o) to make such adjustments or modifications to Awards or to adopt such sub-plans for
Grantees working outside the United States as are advisable to fulfill the purposes of the Plan
(including to comply with local law);

     (p) to impose such additional terms and conditions upon the grant, exercise or retention of
Awards as the Committee may, before or concurrently with the grant thereof, deem appropriate,
including, as applicable, limiting the percentage of Awards which may from time to time be
exercised by a Grantee;

     (q) to make adjustments in the terms and conditions of, and the criteria in, Awards in
recognition of unusual or nonrecurring events (including events described in Section 4.2) affecting
the Company or an Affiliate or the financial statements of the Company or an Affiliate, or in
response to changes in applicable laws, regulations or accounting principles; provided that in no
event shall such adjustment increase the value of an Award for a person included in the Designated
162(m) Group for whom the Committee desires to have the Performance-Based Exception apply so as to
cause the Performance-Based Exception to be unavailable;

     (r) to correct any defect or supply any omission or reconcile any inconsistency, and to
construe and interpret the Plan, the rules and regulations, and Award Agreement or any other
instrument entered into or relating to an Award under the Plan; and

     (s) to take any other action with respect to any matters relating to the Plan for which it is
responsible and to make all other decisions and determinations as may be required under the terms
of the Plan or as the Committee may deem necessary or advisable for the administration of the Plan.

8

 

     Any action of the Committee with respect to the Plan shall be final, conclusive and binding on
all persons, including the Company, its Affiliates, any Grantee, any person claiming any rights
under the Plan from or through any Grantee, and stockholders, except to the extent the Committee
may subsequently modify, or take further action not consistent with, its prior action. If not
specified in the Plan, the time at which the Committee must or may make any determination shall be
determined by the Committee, and any such determination may thereafter be modified by the
Committee. The express grant of any specific power to the Committee, and the taking of any action
by the Committee, shall not be construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of the Company or any Affiliate the authority,
subject to such terms as the Committee shall determine, to perform specified functions under the
Plan (subject to Sections 3.1(b), 4.3, 4.4 and 5.7(b)).

9

 

Article 4. — Shares Subject to the Plan, Maximum Awards, and 162(m) Compliance

4.1 Number of Shares Available for Grants. Subject to adjustment as provided in Section
4.2, the number of Shares hereby reserved for delivery under the Plan shall be ____________ Shares.
The number of Shares available for delivery pursuant to Incentive Stock Options shall be the
number set forth in the first sentence of this Section 4.1.

     If any Shares subject to an Award granted hereunder are forfeited or such Award is settled in
cash or otherwise terminates without the delivery of such Shares, the Shares subject to such Award,
to the extent of any such forfeiture, settlement or termination, shall again be available for grant
under the Plan. Notwithstanding the foregoing, Shares subject to an Award under the Plan may not
again be made available for issuance under the Plan if such Shares are: (a) Shares used to pay the
exercise price of an Option, (b) Shares delivered to or withheld by the Company to pay the
withholding taxes related to an Award, or (c) Shares repurchased by the Company on the open market
with the proceeds of an Award paid to the Company by or on behalf of the Grantee. Shares delivered
pursuant to the Plan may be, in whole or in part, authorized and unissued Shares, or treasury
Shares, including Shares repurchased by the Company for purposes of the Plan.

     Notwithstanding the foregoing, an unlimited number of Shares may be issued under the Plan
pursuant to Acquired Entity Awards granted in assumption of, or in substitution for, an outstanding
award previously granted by an Acquired Entity, so long as the terms of the acquisition of such
awards previously granted by an Acquired Entity do not expressly provide for the issuance of Shares
authorized under this Section 4.1.

4.2 Adjustments in Authorized Shares and Awards. In the event of any dividend or other
distribution (whether in the form of cash, Shares, or other property, but excluding regular,
quarterly cash dividends), recapitalization, forward or reverse stock split, subdivision,
consolidation or reduction of capital, reorganization, merger, consolidation, scheme of
arrangement, split-up, spin-off or combination involving the Company or repurchase or exchange of
Shares or other securities of the Company or other rights to purchase Shares or other securities of
the Company, or other similar corporate transaction or event that affects the Shares, provided that
any such transaction or event referred to heretofore does not involve the receipt of consideration
by the Company, then the Committee shall, in such manner as it deems equitable in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be made available under
the Plan, adjust (a) the number and type of Shares (or other securities or property) with respect
to which Awards may be granted, (b) the number and type of Shares (or other securities or property)
subject to outstanding Awards, (c) the grant or exercise price or Base Amount with respect to any
applicable Award or, if deemed appropriate, make provision for a cash payment to the holder of an
outstanding Award, (d) the number and kind of outstanding Shares of Restricted Stock or relating to
any other outstanding Award in connection with which Shares are issued or otherwise subject, (e)
the number of Shares with respect to which Awards may be granted to a Grantee, as set forth in
Section 4.3, (f) the number and type of Shares (or other securities or property) as to which Awards
may be settled, and (g) the number of Shares subject to outstanding Restricted Stock or Restricted
Stock Units granted under Article 14; provided, in each case, that with respect to Awards of
Incentive Stock Options intended as of their Grant Date to qualify as Incentive Stock Options, no
such adjustment shall be authorized to

10

 

the extent that such adjustment would cause the Plan to violate Section 422(b)(1) of the Code; and
provided further that the number of Shares subject to any Award denominated in Shares shall always
be a whole number. By way of example and not limitation, neither the conversion of any convertible
securities of the Company nor any open market purchase of Shares by the Company shall be treated as
a transaction that “does not involve the receipt of consideration” by the Company.

4.3 Compliance with Section 162(m) of the Code. To the extent the Committee determines
that compliance with the Performance-Based Exception is desirable, the following shall apply:

     (a) Section 162(m) Compliance. All Awards granted to persons included in the
Designated 162(m) Group shall comply with the requirements of the Performance-Based Exception;
provided that to the extent Section 162(m) of the Code requires periodic shareholder approval of
performance measures, such approval shall not be required for the continuation of the Plan or as a
condition to grant any Award hereunder after such approval is required. In addition, in the event
that changes are made to Section 162(m) of the Code to permit flexibility with respect to the Award
or Awards available under the Plan, the Committee may, subject to this Section 4.3, make any
adjustments to such Awards as it deems appropriate.

     (b) Annual Individual Limitations. During any calendar year, no Grantee may be
granted Awards (other than Awards that cannot be satisfied in Shares) with respect to more than
______________ Shares, subject to adjustment as provided in Section 4.2. The maximum potential
value of Awards to be settled in cash or property (other than Shares) that may be granted with
respect to any calendar year (or the Company’s fiscal year, if the Company’s fiscal year is not the
calendar year) to any Grantee included in the Designated 162(m) Group (regardless of when such
Award is settled) shall not exceed _____________. (Thus, Awards to be settled in cash or property
(other than Shares) with a Performance Period (or other period of time explicitly or implicitly
utilized to determine the value to be provided to the Grantee) over more than one calendar year (or
fiscal year) may exceed the one-year grant limit in the prior sentence at the time of payment or
settlement so long as the total maximum potential value does not exceed the one-year limit
multiplied by the number of calendar years (or fiscal years) or portions thereof over which the
value of such Award is determined.)

4.4 Performance-Based Exception Under Section 162(m). Unless and until the Committee
proposes for stockholder vote and stockholders approve a change in the general performance measures
set forth in this Section 4.4, for Awards (other than Options or SARs) designed to qualify for the
Performance-Based Exception, the objective Performance Measure(s) shall be chosen from among the
following:

     (a) Earnings (either in the aggregate or on a per-share basis);

     (b) Net income;

     (c) Operating income;

     (d) Operating profit;

     (e) Cash flow;

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     (f) Stockholder returns (including return on assets, investments, equity, or gross sales)
(including income applicable to common stockholders or other class of stockholders);

     (g) Return measures (including return on assets, equity, sales, or capital expenditures);

     (h) Earnings before or after either, or any combination of, interest, taxes, depreciation or
amortization (EBITDA);

     (i) Gross revenues;

     (j) Share price (including growth measures and total stockholder return or attainment by the
Shares of a specified value for a specified period of time);

     (k) Reductions in expense levels in each case, where applicable, determined either on a
Company-wide basis or in respect of any one or more business units;

     (l) Net economic value;

     (m) Market share;

     (n) Annual net income to common stock;

     (o) Earnings per share;

     (p) Annual cash flow provided by operations;

     (q) Changes in annual revenues;

     (r) Strategic business criteria, consisting of one or more objectives based on meeting
specified revenue, market penetration, geographic business expansion goals, objectively identified
project milestones, production volume levels, cost targets, and goals relating to acquisitions or
divestitures;

     (s) Reserve growth (reserve replacement) or reserves per share;

     (t) Reserve replacement efficiency ratio;

     (u) Productions growth or production per share;

     (v) Drilling results;

     (w) Development costs;

     (x) Economic value added;

     (y) Sales;

     (z) Costs;

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     (aa) Results of customer satisfaction surveys;

     (bb) Aggregate product price and other product price measures;

     (cc) Safety record;

     (dd) Service reliability;

     (ee) Operating and maintenance cost management;

     (ff) Energy production availability performance measures;

     (gg) Debt rating;

and/or

     (hh) Achievement of objective business or operational goals such as market share and/or
business development;

provided that subsections (a) through (g) may be measured on a pre- or post-tax basis; and provided
further that the Committee may, on the Grant Date of an Award intended to comply with the
Performance-Based Exception, and in the case of other grants, at any time, provide that the formula
for such Award may include or exclude items to measure specific objectives, such as losses from
discontinued operations, extraordinary gains or losses, the cumulative effect of accounting
changes, acquisitions or divestitures, foreign exchange impacts and any unusual, nonrecurring gain
or loss. For Awards intended to comply with the Performance-Based Exception, the Committee shall
set the Performance Measures within the time period prescribed by Section 162(m) of the Code. The
levels of performance required with respect to Performance Measures may be expressed in absolute or
relative levels and may be based upon a set increase, set positive result, maintenance of the
status quo, set decrease or set negative result, and may be measured annually, cumulatively over a
period of years or over such other period determined by the Committee. Performance Measures may
differ for Awards to different Grantees. The Committee shall specify the weighting (which may be
the same or different for multiple objectives) to be given to each Performance Measure for purposes
of determining the final amount payable with respect to any such Award. Any one or more of the
Performance Measures may apply to the Grantee, to a department, unit, division or function within
the Company or any one or more Affiliates; or to the Company and/or any one or more Affiliates; and
may apply either alone or relative to the performance of other businesses or individuals (including
industry or general market indices).

     The Committee shall have the discretion to adjust the determinations of the degree of
attainment of the pre-established performance goals; provided that Awards which are designed to
qualify for the Performance-Based Exception may not be adjusted upward (the Committee shall retain
the discretion to adjust such Awards downward) so as to cause the Performance-Based Exception to be
unavailable. The Committee may not delegate any responsibility with respect to Awards intended to
qualify for the Performance-Based Exception. All determinations by the Committee as to the
achievement of the Performance Measure(s) shall be in writing prior to payment of the Award.

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     In the event that applicable laws change to permit Committee discretion to alter the governing
performance measures without obtaining stockholder approval of such changes, and still qualify for
the Performance-Based Exception, the Committee shall have sole discretion to make such changes
without obtaining stockholder approval.

     For purposes of Section 4.3 and this Section 4.4 (and any other provisions of the Plan for
which compliance with Section 162(m) of the Code is intended), references to “Committee” means the
Compensation Committee of the Board or, if a separate body, the Independent Committee.

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Article 5. — Eligibility and General Conditions of Awards

5.1 Eligibility. Awards may be granted to any Eligible Person or Non-Management Director,
whether or not he or she has previously received an Award; provided that only persons included in
the Designated 162(m) Group shall be Eligible Persons with respect to Non-Equity Incentive Awards
made under the Plan and Non-Management Directors may only receive Awards granted under Article 14
of the Plan. A prospective employee of the Company or an Affiliate may be granted an Award so long
as the Grant Date does not occur prior to the date that such Person commences employment or the
performance of services for the Company or an Affiliate.

5.2 Award Agreement. To the extent not set forth in the Plan, the terms and conditions of
each Award shall be set forth in an Award Agreement.

5.3 General Terms and Termination of Affiliation. The Committee may impose on any Award or
the exercise or settlement thereof, at the Grant Date or, subject to the provisions of Section
15.2, thereafter, such additional terms and conditions not inconsistent with the provisions of the
Plan as the Committee shall determine, including terms requiring forfeiture, acceleration or
pro-rata acceleration of Awards in the event of a Termination of Affiliation by the Grantee.
Except as may be required under the Delaware General Corporation Law, Awards may be granted for no
consideration other than prior and future services. Except as otherwise determined by the
Committee pursuant to this Section 5.3, all Awards that have not been exercised and that are
subject to (a) a risk of forfeiture, (b) deferral by the Committee (and not voluntary deferral by
the Grantee), (c) vesting or (d) unexpired Performance Periods at the time of a Termination of
Affiliation, shall be forfeited to the Company.

5.4 Nontransferability of Awards.

     (a) Each Award and each right under any Award shall be exercisable only by the Grantee during
the Grantee’s lifetime, or, if permissible under applicable law, by the Grantee’s guardian or legal
representative or by a transferee receiving such Award pursuant to a domestic relations order
(“DRO”).

     (b) No Award (prior to the time, if applicable, Shares are delivered in respect of such
Award), and no right under any Award, may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Grantee otherwise than by will or by the laws of descent
and distribution (or in the case of Shares of Restricted Stock, to the Company) or pursuant to a
DRO, and any such purported assignment, alienation, pledge, attachment, sale, transfer or
encumbrance shall be void and unenforceable against the Company and any Affiliate; provided that
the designation of a beneficiary shall not constitute an assignment, alienation, pledge,
attachment, sale, transfer or encumbrance.

     (c) Notwithstanding subsections (a) and (b) above, to the extent provided in the Award
Agreement, Director Annual Grants, Restricted Stock Units, Stock Appreciation Rights and Awards
other than Incentive Stock Options and Non-Equity Incentive Awards, may be transferred to one or
more trusts or persons during the lifetime of the Grantee in connection with the Grantee’s estate
planning or wealth transfer planning, and may be exercised by such transferee in accordance with
the terms of such Award. If so determined by the Committee, a

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Grantee may, in the manner established by the Committee, designate a beneficiary or
beneficiaries to exercise the rights of the Grantee, and to receive any distribution with respect
to any Award upon the death of the Grantee. A transferee, beneficiary, guardian, legal
representative or other person claiming any rights under the Plan from or through any Grantee shall
be subject to and consistent with the provisions of the Plan and any applicable Award Agreement,
except to the extent the Plan and Award Agreement otherwise provide with respect to such persons,
and to any additional restrictions or limitations deemed necessary or appropriate by the Committee.

     (d) Nothing herein shall be construed as requiring the Committee to honor a DRO except as
required under the respective Award Agreement or to the extent required under applicable law.

5.5 Cancellation and Rescission of Awards. Unless the Award Agreement specifies otherwise,
the Committee may cancel, rescind, suspend, withhold, or otherwise limit or restrict any
unexercised Award at any time if the Grantee is not in compliance with all applicable provisions of
the Award Agreement and the Plan or if the Grantee has a Termination of Affiliation.

5.6 Stand-Alone, Tandem and Substitute Awards.

     (a) Awards granted under the Plan may, in the discretion of the Committee, be granted either
alone or in addition to, in tandem with, or in substitution for, any other Award granted under the
Plan or any other plan of the Company or any Affiliate; provided that if the stand-alone, tandem or
substitute Award is intended to qualify for the Performance-Based Exception, it must separately
satisfy the requirements of the Performance-Based Exception. In connection with the Company’s
acquisition, however effected, of another corporation or entity (the “Acquired Entity”) or the
assets thereof, the Committee may, at its discretion, grant Awards (“Substitute Awards”) associated
with the stock or other equity interest in such Acquired Entity (“Acquired Entity Award”) held by a
Grantee immediately prior to such Acquisition in order to preserve for Grantee the economic value
of all or a portion of such Acquired Entity Award on such terms as the Committee determines
necessary to achieve preservation of economic value. For the avoidance of doubt, to the extent
that the Spin-Off Awards are granted under the Plan, they shall be considered Acquired Entity
Awards for purposes of the Plan. If an Award is granted in substitution for another Award or any
non-Plan award or benefit, the Committee shall require the surrender of such other Award or
non-Plan award or benefit in consideration for the grant of the new Award. Awards granted in
addition to or in tandem with other Awards or non-Plan awards or benefits may be granted either at
the same time as or at a different time from the grant of such other Awards or non-Plan awards or
benefits. The Option Price of any Option or the purchase price of any other Award conferring a
right to purchase Shares:

     (i) If granted in substitution for an outstanding Award or non-Plan award or benefit,
shall be either not less than the Fair Market Value of Shares at the date such substitute
Award is granted or not less than such Fair Market Value at that date reduced to reflect the
Fair Market Value of the Award or award required to be surrendered by the Grantee as a
condition to receipt of a substitute Award; or

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     (ii) If granted in tandem with an already outstanding Award or an award granted under
another plan, shall be either not less than the Fair Market Value of Shares at the date of
grant of the later Award or the Fair Market Value of Shares at the date of grant of the
earlier Award or award granted under such other plan.

     (b) The Committee may, in its discretion and on such terms and conditions as the Committee
considers appropriate in the circumstances, grant Awards under the Plan in substitution for stock
and stock-based Awards held by employees of another corporation who become employees of the Company
or an Affiliate as the result of a merger or consolidation or other combination of the employing
corporation with the Company or an Affiliate or the acquisition by the Company or an Affiliate of
property or stock of the employing corporation.

5.7 Compliance with Rule 16b-3.

     (a) Reformation to Comply with Exchange Act Rules. To the extent the Committee
determines that a grant or other transaction by a Section 16 Person should comply with applicable
provisions of Rule 16b-3 (except for transactions exempted under alternative Exchange Act rules),
the Committee shall take such actions as necessary to make such grant or other transaction so
comply, and if any provision of this Plan or any Award Agreement relating to a given Award does not
comply with the requirements of Rule 16b-3 as then applicable to any such grant or transaction,
such provision will be construed or deemed amended, if the Committee so determines, to the extent
necessary to conform to the then applicable requirements of Rule 16b-3 without the consent of or
notice to the affected Section 16 Person.

     (b) Rule 16b-3 Administration. Any function relating to a Section 16 Person shall be
performed solely by the Committee or the Board if necessary to ensure compliance with applicable
requirements of Rule 16b-3, to the extent the Committee determines that such compliance is desired.
Each member of the Committee or person acting on behalf of the Committee shall be entitled to, in
good faith, rely or act upon any report or other information furnished to him by any officer,
manager or other employee of the Company or any Affiliate, the Company’s independent certified
public accountants or any executive compensation consultant or attorney or other professional
retained by the Company to assist in the administration of the Plan. For purposes of Section
5.7(a) and this Section 5.7(b), references to “Committee” means the Compensation Committee of the
Board or, if a separate body, the Independent Committee.

5.8 Deferral of Award Payouts. The Committee may permit or require a Grantee to defer
receipt of the payment of cash or the delivery of Shares that would otherwise be due by virtue of
the lapse or waiver of restrictions with respect to Shares of Restricted Stock, the satisfaction of
any requirements or goals with respect to Performance Units or Performance Shares, the lapse or
waiver of the Period of Restriction for Restricted Stock Units, or the lapse or waiver of
restrictions with respect to Other Stock-Based Awards. The Committee may also require such a
deferral of receipt in order to avoid non-deductibility of any amounts associated with such Award
or to comply with the requirements of applicable law. If any such deferral is required or
permitted, the Committee shall, in its sole discretion, establish rules and procedures for such
payment deferrals. Except as otherwise provided in an Award Agreement or this Section 5.8, any
payment of any Shares that are subject to such deferral shall be made or delivered to the Grantee
upon the Grantee’s Termination of Affiliation. Notwithstanding anything herein to the

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contrary, in no event will any deferral or payment of a deferred number of Shares or any other
payment with respect to any Award be allowed if the Committee determines, in its sole discretion,
that the deferral would result in the imposition of the additional tax under Section 409A(a)(1)(B)
of the Code.

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Article 6. — Stock Options

6.1 Grant of Options. Subject to and consistent with the provisions of the Plan, Options
may be granted to any Eligible Person in such number, and upon such terms, and at any time and from
time to time as shall be determined by the Committee.

6.2 Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall
specify the Option Price, the Option Term (which shall be for a period of not more than ten (10)
years from its Grant Date), the number of Shares to which the Option pertains, the time or times at
which such Option shall be exercisable, and such other provisions as the Committee shall determine.

6.3 Option Price; No Repricing. The Option Price of an Option under this Plan shall be
determined in the sole discretion of the Committee, and, except with respect to an Option granted
as an Acquired Entity Award, shall be at least equal to 100% of the Fair Market Value of a Share on
the Grant Date. Subject to the adjustment under Section 4.2, neither the Committee nor the Board
shall have the authority or discretion to reduce, directly or indirectly, the Option Price of any
outstanding Option without stockholder approval, including, without limitation, by (a) canceling
previously awarded Options and regranting them with a lower Option Price or (b) exchanging or
buying out any previously granted Option for a payment in cash, Shares or other Award,
notwithstanding any authority otherwise granted the Committee or the Board under the Plan.

6.4 Grant of Incentive Stock Options. At the time of the grant of any Option, the
Committee may in its discretion designate that such Option (or portion thereof) shall be made
subject to additional restrictions to permit it to qualify as an Incentive Stock Option. Any
Option (or portion thereof) designated as an Incentive Stock Option:

     (a) shall be granted only to an employee of the Company or a parent or Subsidiary Corporation
(as defined below);

     (b) shall have an Option Price of not less than 100% of the Fair Market Value of a Share on
the Grant Date, and, if granted to a person who owns capital stock (including stock treated as
owned under Section 424(d) of the Code) possessing more than 10% of the total combined voting power
of all classes of capital stock of the Company or any Subsidiary Corporation (a “10% Owner”), have
an Option Price not less than 110% of the Fair Market Value of a Share on its Grant Date;

     (c) shall be for a period of not more than 10 years (five years if the Grantee is a 10% Owner)
from its Grant Date, and shall be subject to earlier termination as provided herein or in the
applicable Award Agreement;

     (d) shall not have an aggregate Fair Market Value (as of the Grant Date) of the Shares with
respect to which Incentive Stock Options (whether granted under the Plan or any other stock option
plan of the Grantee’s employer or any parent or Subsidiary Corporation (“Other Plans”)) are
exercisable for the first time by such Grantee during any calendar year (“Current Grant”),
determined in accordance with the provisions of Section 422 of the Code, which exceeds $100,000
(the “$100,000 Limit”);

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     (e) shall require the Grantee to notify the Committee of any disposition of any Shares
delivered pursuant to the exercise of the Incentive Stock Option under the circumstances described
in Section 421(b) of the Code (relating to holding periods and certain disqualifying dispositions)
(a “Disqualifying Disposition”), within 10 days of such a Disqualifying Disposition; and

     (f) shall by its terms not be assignable or transferable other than by will or the laws of
descent and distribution and may be exercised, during the Grantee’s lifetime, only by the Grantee;
provided that the Grantee may, to the extent provided in the Plan in any manner specified by the
Committee, designate in writing a beneficiary to exercise his or her Incentive Stock Option after
the Grantee’s death.

     For purposes of this Section 6.4, “Subsidiary Corporation” means a corporation other than the
Company in an unbroken chain of corporations beginning with the Company if, at the time of granting
the Option, each of the corporations other than the last corporation in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain. For purposes of this Section 6.4, references to “parent”
shall mean a parent corporation within the meaning of Section 424(e) of the Code. Notwithstanding
the foregoing and Section 3.2, the Committee may, without the consent of the Grantee, at any time
before the exercise of an Option (whether or not an Incentive Stock Option), take any action
necessary to prevent such Option from being treated as an Incentive Stock Option.

     Notwithstanding anything in this Section 6.4 to the contrary, Options designated as Incentive
Stock Options shall not be eligible for treatment under the Code as Incentive Stock Options (and
will be deemed to be Non-Qualified Stock Options) to the extent that either (a) the aggregate Fair
Market Value of the Shares (determined on the Grant Date) with respect to the Current Grant and all
Incentive Stock Options previously granted under the Plan and any Other Plans which are exercisable
for the first time during a calendar year would exceed the $100,000 Limit, or (b) such Options
otherwise remain exercisable but are not exercised within three (3) months of Termination of
Affiliation (or such other period of time provided in Section 422 of the Code).

6.5 Payment. Except as otherwise provided by the Committee in an Award Agreement or
otherwise, Options shall be exercised by the delivery of a written notice of exercise to the
Company or its designee, setting forth the number of Shares with respect to which the Option is to
be exercised, accompanied by full payment for the Shares made by any one or more of the following
means, subject to the approval of the Committee:

     (a) cash, personal check or wire transfer;

     (b) Shares, valued at their Fair Market Value on the date of exercise;

     (c) withholding of Shares otherwise deliverable upon exercise valued at their Fair Market
Value on the date of exercise; or

     (d) subject to applicable law, pursuant to procedures previously approved by the Company, in
cash through the sale of the Shares acquired on exercise of the Option through a

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broker-dealer to whom the Grantee has submitted an irrevocable notice of exercise and
irrevocable instructions to deliver promptly to the Company the amount of sale or loan proceeds
sufficient to pay for such Shares, together with, if requested by the Company, the mandatory amount
of federal, state, local and foreign withholding taxes payable by Grantee by reason of such
exercise.

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Article 7. — Shares of Restricted Stock

7.1 Grant of Shares of Restricted Stock. Subject to and consistent with the provisions of
the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock to
any Eligible Person in such amounts as the Committee shall determine.

7.2 Award Agreement. Each grant of Shares of Restricted Stock shall be evidenced by an
Award Agreement that shall specify the Period(s) of Restriction, the number of Shares of Restricted
Stock granted, and such other provisions as the Committee shall determine. The Committee may
impose such conditions and/or restrictions on any Shares of Restricted Stock granted pursuant to
the Plan as it may deem advisable, including restrictions based upon the achievement of specific
performance goals, time-based restrictions on vesting following the attainment of the performance
goals, and/or restrictions under applicable securities laws; provided that such conditions and/or
restrictions may lapse, if so determined by the Committee, in the event of the Grantee’s
Termination of Affiliation due to death, Disability, normal or approved early retirement, or
involuntary termination by the Company or an Affiliate without “cause.” Except as otherwise
determined by the Committee, upon Termination of Affiliation during the applicable Period of
Restriction, Shares of Restricted Stock that are at that time subject to forfeiture shall be
forfeited and automatically reacquired by the Company.

7.3 Consideration for Shares of Restricted Stock. The Committee shall determine the
amount, if any, that a Grantee shall pay for Shares of Restricted Stock, subject to the following
sentence. Except with respect to Shares of Restricted Stock that are treasury shares, for which no
payment need be required, the Committee shall require the Grantee to pay at least the par value of
a Share for each Share of Restricted Stock. Such payment shall be made in full in cash and/or
other consideration permissible by applicable law (including prior and/or future services, which
shall be considered a “benefit to the corporation” within the meaning of Section 152 of the
Delaware General Corporation Law) by the Grantee before the delivery of the Shares under terms
determined by the Committee.

7.4 Effect of Forfeiture. If Shares of Restricted Stock are forfeited, and if the Grantee
was required to pay for such Shares with cash or property, the Grantee shall be deemed to have
resold such Shares to the Company at a price equal to the lesser of (a) the amount paid in cash or
property by the Grantee for such Shares, or (b) the Fair Market Value of such Shares at the close
of business on the date of such forfeiture. The Company shall pay to the Grantee the deemed sale
price as soon as is administratively practical. Such Shares shall cease to be outstanding, and
shall no longer confer on the Grantee thereof any rights as a stockholder of the Company, from and
after the date of the event causing the forfeiture, whether or not the Grantee accepts the
Company’s tender of payment for such Shares.

7.5 Escrow; Legends. The Committee may provide that any certificates for any Shares of
Restricted Stock (a) shall be held (together with one or more stock powers executed in blank by the
Grantee) in escrow by the Secretary of the Company until such Shares become nonforfeitable or are
forfeited and/or (b) shall bear an appropriate legend restricting the transfer of such Shares. If
any Shares of Restricted Stock become nonforfeitable, the Company shall cause certificates for such
Shares to be delivered without such legend, except as may be required under applicable law.

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7.6 Voting Rights; Dividends and Distributions. Unless otherwise determined by the
Committee in accordance with applicable law, individuals holding Shares of Restricted Stock granted
hereunder may exercise full voting rights with respect to those shares during the Period of
Restriction. Individuals in whose name Shares of Restricted Stock are granted shall be entitled to
receive all dividends and other distributions paid with respect to those Shares once the Period of
Restriction has ended.

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Article 8. — Restricted Stock Units

8.1 Grant of Restricted Stock Units. Subject to and consistent with the provisions of the
Plan, the Committee, at any time and from time to time, may grant Restricted Stock Units to any
Eligible Person, in such amount and upon such terms as the Committee shall determine.

8.2 Delivery and Limitations. Delivery of Shares will occur upon expiration of the Period
of Restriction specified for the Award of Restricted Stock Units by the Committee. In addition, an
Award of Restricted Stock Units shall be subject to such limitations as the Committee may impose,
which limitations may lapse at the end of the Period of Restriction of such Restricted Stock Units
or at other specified times, separately or in combination, in installments or otherwise, as the
Committee shall determine at the time of grant or thereafter. A Grantee awarded Restricted Stock
Units will have no voting rights and will have no rights to receive dividends or Dividend
Equivalents in respect of Restricted Stock Units.

8.3 Forfeiture. Except as otherwise determined by the Committee, upon Termination of
Affiliation during the applicable Period of Restriction, Restricted Stock Units that are at that
time subject to forfeiture shall be forfeited.

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Article 9. — Performance Units and Performance Shares

9.1 Grant of Performance Units and Performance Shares. Subject to and consistent with the
provisions of the Plan, Performance Units or Performance Shares may be granted to any Eligible
Person in such amounts and upon such terms, and at any time and from time to time, as shall be
determined by the Committee.

9.2 Value/Performance Goals. The Committee shall set performance goals in its discretion
which, depending on the extent to which they are met, will determine the number or value of
Performance Units or Performance Shares that will be paid to the Grantee. With respect to Covered
Employees and to the extent the Committee deems it appropriate to comply with Section 162(m) of the
Code, all performance goals shall be objective Performance Measures as set forth in Section 4.4
satisfying the requirements for the Performance-Based Exception, and shall be set by the Committee
within the time period prescribed by Section 162(m) of the Code and related regulations.

     (a) Performance Unit. Each Performance Unit shall have an initial value that is
established by the Committee at the time of grant.

     (b) Performance Share. Each Performance Share shall have an initial value equal to
the Fair Market Value of a Share at the close of business on the Grant Date.

9.3 Earning of Performance Units and Performance Shares. After the applicable Performance
Period has ended, the holder of Performance Units or Performance Shares shall be entitled to
payment based on the level of achievement of performance goals set by the Committee. If a
Performance Unit or Performance Share Award is intended to comply with the
Performance-Based Exception, the Committee shall certify the level of achievement of the
performance goals in writing before the Award is settled.

     At the discretion of the Committee, the settlement of Performance Units or Performance Shares
may be in cash, Shares of equivalent value, or in some combination thereof, as set forth in the
Award Agreement or otherwise determined by the Committee.

     Except with respect to Awards with respect to which the Committee intends that the
Performance-Based Exception shall apply, if a Grantee is promoted, demoted or transferred to a
different business unit of the Company during a Performance Period, then, to the extent the
Committee determines the performance goals or Performance Period are no longer appropriate, the
Committee may adjust, change, eliminate or cancel the performance goals or the applicable
Performance Period as it deems appropriate in order to make them appropriate and comparable to the
initial performance goals or Performance Period.

     A Grantee shall not be entitled to payment or accrual of Dividend Equivalents with respect to
Shares deliverable in connection with grants of Performance Units or Performance Shares, whether
unearned, earned but not yet delivered to the Grantee or otherwise. In addition, a Grantee shall
be entitled to exercise his or her voting rights with respect to such Shares to the extent such
Shares have been issued to the Grantee.

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9.4 Forfeiture. Except as otherwise determined by the Committee, upon Termination of
Affiliation any unvested and/or unearned Performance Units and Performance Shares shall be
forfeited.

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Article 10. — Stock Appreciation Rights

10.1 Grant of SARs. Subject to and consistent with the provisions of the Plan, stock
appreciation rights (“Stock Appreciation Rights” or “SARs”) may be granted to any Eligible Persons
in such numbers and upon such terms, and at any time and from time to time, as shall be determined
by the Committee. Each SAR shall represent the right of the Grantee to receive upon exercise of
the SAR an amount equal to the amount described in Section 10.3, subject to such terms and
conditions as the Committee shall determine.

10.2 Award Agreement. Each grant of SARs shall be evidenced by an Award Agreement that
shall specify, as the Committee shall determine, the number of Shares as to which the SAR relates,
the Base Amount, the term and such other terms and conditions as the Committee shall determine,
including without limitation vesting and forfeiture, provided that as to each SAR:

     (a) except with respect to a SAR granted as an Acquired Entity Award, the Base Amount shall
never be less than the Fair Market Value of a Share on the Grant Date; and

     (b) the term shall not exceed ten years from the Grant Date.

10.3 Payment of SAR Amount. Upon exercise of a SAR, the Grantee shall be entitled to
receive payment of an amount determined by multiplying (a) the difference between the Base Amount
of the SAR and the Fair Market Value of a Share at the close of business on the date the SAR is
exercised by (b) the number of Shares with respect to which the SAR is exercised. In the
discretion of the Committee, payment of the SAR amount by the Company may be in cash, Shares or a
combination of cash and Shares.

10.4 Forfeiture. Except as otherwise determined by the Committee, upon Termination of
Affiliation any unvested SARs shall be forfeited.

10.5 No Repricing. Subject to the adjustment under Section 4.2, neither the Committee nor
the Board shall have the authority or discretion to reduce, directly or indirectly, the Base Amount
of any outstanding SAR without stockholder approval, including, without limitation, by (a)
canceling previously awarded SARs and regranting them with a lower Base Amount or (b) exchanging or
buying out any previously granted SARs for a payment in cash, Shares or other Award,
notwithstanding any authority otherwise granted the Committee under the Plan.

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Article 11. — Other Stock-Based Awards

     The Committee is authorized, subject to limitations under applicable law, to grant to any
Eligible Persons such other Awards that are denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, Shares or other securities, as deemed by the
Committee to be consistent with the purposes of the Plan, including Shares awarded which are not
subject to any restrictions or conditions, convertible or exchangeable debt securities or other
rights convertible or exchangeable into Shares, Awards valued by reference to the value of
securities of or the performance of specified Affiliates, and Awards payable in securities of
Affiliates. Subject to and consistent with the provisions of the Plan, the Committee shall
determine the terms and conditions of such Awards. Except as provided by the Committee, Shares or
other securities delivered pursuant to a purchase right granted under this Article 11 shall be
purchased for such consideration, paid for by such methods and in such forms, including cash,
Shares, outstanding Awards or other property or other consideration permitted by applicable law, as
the Committee shall determine.

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Article 12. — Non-Equity Incentive Awards

     The Committee is authorized to grant Non-Equity Incentive Awards alone or in conjunction with
other Awards to individuals who are at the time of the grant of such Non-Equity Incentive Award,
included in the Designated 162(m) Group. All terms, conditions and limitations applicable to any
Non-Equity Incentive Award shall be determined by the Committee, subject to and consistent with the
provisions of the Plan (including the applicable annual individual limitation under Section 4.3(b)
and the use of one or more of the Performance Measures set forth in Section 4.4) and Section 162(m)
of the Code.

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Article 13. — Change in Control

13.1 Acceleration of Exercisability and Lapse of Restrictions. If, upon or within two (2)
years following a Change in Control, a Grantee has a Termination of Affiliation with the Company
and the Company’s Affiliates (excluding any transfer to the Company or its Affiliates) voluntarily
for Good Reason, or involuntarily (other than due to Cause, death, Disability, or Retirement) the
following acceleration provisions shall apply to Awards other than Awards granted under Article 14:

     (a) All outstanding Awards pursuant to which the Grantee may have rights, the exercise of
which is restricted or limited, shall become fully exercisable; unless the right to lapse
restrictions or limitations is waived or deferred by a Grantee prior to such lapse, all
restrictions or limitations (including risks of forfeiture) on outstanding Awards subject to
restrictions or limitations under the Plan shall lapse; and all performance criteria and other
conditions to payment of Awards under which payments of cash, Shares or other property are subject
to conditions shall be deemed to be achieved or fulfilled (at the target level, to the extent
applicable) and shall be waived by the Company; and

     (b) Notwithstanding any other provision of the Plan or any outstanding Award Agreement, Awards
in the form of Non-Qualified Stock Options which are accelerated under this Section 13.1 shall be
exercisable after a Grantee’s Termination of Affiliation for a period equal to the lesser of (i)
the remaining term of each nonqualified option; or (ii) eighteen (18) months.

13.2 Definitions. For purposes of this Article 13, the following terms shall have the
meanings set forth below:

      (a) “Cause” means, from and after the occurrence of a Change in Control,
unless otherwise defined in an Award Agreement or individual employment, change in control, or
other severance agreement, the occurrence of any one or more of the following, as determined in the
good faith and reasonable judgment of the Committee or person to whom the Committee may delegate
its authority under the Plan:

     (i) willful failure by a Grantee to substantially perform his or her duties (as they
existed immediately prior to a Change in Control), other than any such failure resulting
from a Disability; or

     (ii) Grantee’s conviction of or plea of nolo contendere to a crime involving fraud,
dishonesty or any other act constituting a felony involving moral turpitude or causing
material harm, financial or otherwise, to the Company or an Affiliate; or

     (iii) Grantee’s willful or reckless material misconduct in the performance of his
duties which results in an adverse effect on the Company, the Subsidiary or an Affiliate; or

     (iv) Grantee’s willful or reckless violation or disregard of the code of business
conduct or other published policy of the Company or an Affiliate; or

     (v) Grantee’s habitual or gross neglect of duties.

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     (b) “Change Date” means, with respect to an Award, the date on which a Change in
Control first occurs while the Award is outstanding.

     (c) “Change in Control” means, unless otherwise defined in an Award Agreement or
individual Change in Control severance agreement, the occurrence of any one or more of the
following:

     (i) any person (as such term is used in Rule 13d-5 of the SEC under the Exchange Act)
or group (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act),
other than The Williams Companies, Inc. (from the Effective Date until immediately after the
completion of the Spin-Off), a Controlled Affiliate or any employee benefit plan (or any
related trust) sponsored or maintained by the Company or any of its Controlled Affiliates (a
“Related Party”), becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of 20% or more of the common stock of the Company or of Voting Securities representing
20% or more of the combined voting power of all Voting Securities of the Company, except
that no Change in Control shall be deemed to have occurred solely by reason of such
beneficial ownership by a Person with respect to which both more than 75% of the common
stock of such Person and Voting Securities representing more than 75% of the combined voting
power of the Voting Securities of such Person are then owned, directly or indirectly, by the
persons who were the direct or indirect owners of the common stock and Voting Securities of
the Company immediately before such acquisition, in substantially the same proportions as
their ownership, immediately before such acquisition, of the common stock and Voting
Securities of the Company, as the case may be; or

     (ii) the Company’s Incumbent Directors (determined using the date of the Award as the
baseline date) cease for any reason to constitute at least a majority of the directors of
the Company then serving; or

     (iii) consummation of a merger, reorganization, recapitalization, consolidation, or
similar transaction (any of the foregoing, a “Reorganization Transaction”), other than a
Reorganization Transaction that results in the Persons who were the direct or indirect
owners of the outstanding common stock and Voting Securities of the Company immediately
before such Reorganization Transaction becoming, immediately after the consummation of such
Reorganization Transaction, the direct or indirect owners, of both at least 65% of the
then-outstanding equity securities of the Surviving Enterprise and Voting Securities
representing at least 65% of the combined voting power of the then-outstanding Voting
Securities of the Surviving Enterprise, in substantially the same respective proportions as
such Persons’ ownership of the common stock and Voting Securities of the Company immediately
before such Reorganization Transaction; or

     (iv) consummation of a plan or agreement for the sale or other disposition of all or
substantially all of the consolidated assets of the Company or a plan of complete
liquidation of the Company, other than any such transaction that would result in (A) a
Related Party owning or acquiring more than 50% of the assets owned by the Company
immediately prior to the transaction or (B) the Persons who were the direct or indirect
owners of the outstanding common stock and Voting Securities of the Company

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immediately before such transaction becoming, immediately after the consummation of
such transaction, the direct or indirect owners, of more than 50% of the assets owned by the
Company immediately prior to the transaction.

Notwithstanding the occurrence of any of the foregoing events and subject to Section 17.18, a
Change in Control shall not occur with respect to a Grantee if, in advance of such event, the
Grantee agrees in writing that such event shall not constitute a Change in Control.

Notwithstanding anything in this Plan to the contrary, none of (1) the initial public offering of
the Common Stock, (2) the spin-off of the Company from The Williams Companies, Inc., or (3) any
changes to the capital structure of the Company or the ownership of the Voting Securities of the
Company made prior to the time of the consummation of either the initial public offering of the
Common Stock or the distribution of the Company’s securities to the stockholders of The Williams
Companies, Inc. in connection with the spin-off, will be considered a Change in Control for
purposes of this Plan.

     (d) “Good Reason” means, unless otherwise defined in an Award Agreement or individual
employment, change in control or other severance agreement, the occurrence, upon or within two
years following a Change in Control and without a Grantee’s prior written consent, of any one or
more of the following:

     (i) a material adverse reduction in the nature or scope of the Grantee’s duties from
the most significant of those assigned at any time in the 90-day period prior to a Change in
Control; or

     (ii) a significant reduction in the authority and responsibility assigned to the
Grantee; or

     (iii) any failure to pay Grantee’s base salary; or

     (iv) a material reduction of Grantee’s aggregate compensation and/or aggregate benefits
from the amounts and/or levels in effect on the Change Date, unless such reduction is part
of a policy applicable to peer employees of the Employer and of any successor entity; or

     (v) a requirement by the Company or an Affiliate that the Grantee’s principal duties be
performed at a location more than fifty (50) miles from the location where the Grantee was
employed immediately preceding the Change in Control, without the Grantee’s consent (except
for travel reasonably required in the performance of the Grantee’s duties); provided such
new location is farther from Grantee’s residence than the prior location; or

     (vi) the failure of the Surviving Enterprise following a Reorganization Transaction to
assume all Awards previously made under the Plan or to provide equivalent awards of
substantially the same value.

Notwithstanding anything in this Article 13 to the contrary, no act or omission shall constitute
grounds for “Good Reason”:

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     (i) Unless, at least 30 days prior to his termination, Grantee gives a written notice
to the Company or the Affiliate that employs Grantee of his intent to terminate his
employment for Good Reason which describes the alleged act or omission giving rise to Good
Reason;

     (ii) Unless such notice is given within 90 days of Grantee’s first actual knowledge of
such act or omission; and

     (iii) Unless the Company or the Affiliate that employs Grantee fails to cure such act
or omission within the 30 day period after receiving such notice.

Further, no act or omission shall be “Good Reason” if Grantee has consented in writing to such act
or omission.

     (e) “Incumbent Directors” means, determined as of any date by reference to any
baseline date:

     (i) the members of the Board on the date of such determination who have been members of
the Board since such baseline date; and

     (ii) the members of the Board on the date of such determination who were appointed or
elected after such baseline date and whose election, or nomination for election by
stockholders of the Company or the owners of the Surviving Enterprise, as applicable, was
approved by a vote or written consent of two-thirds of the directors comprising the
Company’s Incumbent Directors on the date of such vote or written consent, but excluding
each such member whose initial assumption of office was in connection with (A) an actual or
threatened election contest, including a consent solicitation, relating to the election or
removal of one or more members of the Board or (B) a “tender offer” (as such term is used in
Section 14(d) of the Exchange Act).

     (f) “Retirement” shall have the meaning ascribed to such term in the Company’s
governing tax-qualified retirement plan applicable to the Grantee, or if no such plan is applicable
to the Grantee, in the good faith determination of the Committee.

     (g) “Surviving Enterprise” means the entity resulting from a Reorganization
Transaction or, if securities representing at least 50% of the aggregate voting power of all Voting
Securities of such resulting entity are directly or indirectly owned by another entity, such other
entity.

     (h) “Voting Securities” of an entity means equity securities of such entity that are
entitled to vote generally in the election of the members of the board of directors or other
governing body of such entity.

13.3 Flexibility to Amend. The provisions of this Article 13 and any similar or related
provisions of any Award Agreement may be modified at any time prior to a Change in Control, without
the consent of the Grantee or the Company’s stockholders.

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Article 14. — Non-Management Director Awards

14.1 Director Annual Grant.

     (a) Automatic Grant of Director Annual Grant. Subject to adjustment as provided in
Section 4.2, annually or at such other time or times as the Board may, in its sole discretion,
determine, each Non-Management Director shall be granted an Award payable, as determined by the
Board, in the form of one or a combination of Restricted Stock or Restricted Stock Units
(determined by rounding up to the next higher whole number of Shares any fractional portion of a
Share equal to or in excess of one-half Share, and otherwise rounding down to the next lower whole
number of Shares) having a Fair Market Value at the close of business on the Grant Date of up to
____________ (“Director Annual Grant”). If no Annual Meeting of Company Stockholders is held prior
to June 1 of any calendar year, the Grant Date for the Director Annual Grant shall be May 31.
Notwithstanding the foregoing, the Board may, in its discretion exercised at any time prior to the
date a Director Annual Grant is granted for a year, provide that the Director Annual Grant for such
year shall be granted in installments, so that only a portion (which portion shall be the same for
each Non-Management Director) of the Director Annual Grant shall be granted on the date of the
Annual Meeting of Company Stockholders (or May 31, as applicable) of such year, and the remaining
portion or portions shall be granted at such time or times in such year as the Board may specify at
the time it determines to grant the Director Annual Grant in installments. A person who first
becomes a Non-Management Director after the conclusion of the Annual Meeting of Company
Stockholders and prior to August 1 of any year shall be granted the full Director Annual Grant for
such year as of December 15.

     (b) Prorated Director Annual Grant.

     (i) Subject to adjustment as provided in Section 4.2, a person who first becomes a
Non-Management Director on or after August 1 of any year from and after 2012 and prior to
the first Annual Meeting of Company Stockholders following the date the person becomes a
Non-Management Director shall be granted a prorated Director Annual Grant for such first
year with a Grant Date following the date such person becomes a Non-Management Director
determined as follows:

     (A) The Grant Date shall be December 15 if the person first becomes a
Non-Management Director on or before December 15 of the year.

     (B) The Grant Date shall be the date of the next Annual Meeting of Company
Stockholders if the person first becomes a Non-Management Director on or after
December 16 of the year. If no Annual Meeting of Company Stockholders is held prior
to the next following June 1, the Grant Date shall be May 31 of the year following
the date the person becomes a Non-Management Director.

     (ii) The prorated portion of the Director Annual Grant shall be determined by
multiplying the value of such Director Annual Grant by a fraction, the numerator of which is
the number of full and fractional calendar months elapsing between the date such person
first becomes a Non-Management Director and the date of the first Annual Meeting of Company
Stockholders following the date the person becomes a Non-

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Management Director and the denominator of which is twelve; provided that with respect
to any component of a Director Annual Grant denominated in Shares, including but not limited
to Shares of Restricted Stock or Restricted Stock Units, only whole numbers of Shares shall
be granted, determined by rounding up to the next higher whole number of Shares any
fractional portion of a Share equal to or in excess of one-half Share, and otherwise
rounding down to the next lower whole number of Shares. If no Annual Meeting of Company
Stockholders is scheduled as of a December 15 Grant Date or held as of a May 31 Grant Date,
such prorated Director Annual Grant shall be determined by multiplying each component of
such Director Annual Grant by a fraction, the numerator of which is the number of full and
fractional calendar months elapsing between the date such person first becomes a
Non-Management Director and May 31 of the year following the date such person becomes a
Non-Management Director and the denominator of which is twelve. As to any component
denominated in Shares, including without limitation Shares of Restricted Stock or Restricted
Stock Units, only whole numbers of Shares shall be granted, determined by rounding up to the
next higher whole number of Shares any fractional portion of a Share equal to or in excess
of one-half Share, and otherwise rounding down to the next lower whole number of Shares.

     (iii) In the event the Board has determined that the Director Annual Grant for a year
shall be granted in installments, the Board shall make appropriate provisions for prorating
installments with respect to Non-Management Directors entitled to a prorated Director Annual
Grant, consistent with the preceding provisions of this Section 14.1(b).

     (c) Non-Management Director Status. A person must be a Non-Management Director on the
Grant Date of a Director Annual Grant (or any installment thereof) in order to be granted such
Director Annual Grant (or installment thereof). For a Director Annual Grant granted on the date of
the Annual Meeting of Company Stockholders, other than a prorated Director Annual Grant, the person
must be a Non-Management Director at the conclusion of the Annual Meeting of Company Stockholders.

     (d) Vesting and Payment. Each Director Annual Grant shall vest and be paid out in
Shares as determined by the Committee.

14.2 Election to Receive Director Fees in Shares or Restricted Stock Units in Lieu of Cash.

     (a) Payment of Director Fees in Shares. To the extent permitted by the Committee from
time to time, a Non-Management Director may elect (“Equity Election”) to be paid all or a portion
of cash fees, if any, earned in his or her capacity as a Non-Management Director (including any
retainer fees, fees for service as chairman of a Board committee and any other cash fees paid to
directors (“Director Fees”)), in the form of Shares in lieu of cash. An Equity Election may be
made at any time prior to the date Director Fees would otherwise have been paid in cash, subject to
such restrictions and advance filing requirements as the Company may impose, including, but not
limited to, restrictions designed to comply with the requirements of Section 409A of the Code.
Each Equity Election shall be irrevocable, shall specify the portion of the Director Fees to be
paid in the form of Shares and shall remain in effect with respect to future Director Fees until
the Non-Management Director revokes or changes such Equity Election. Any such revocation or change
shall have prospective application only. Shares delivered

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pursuant to an Equity Election shall be that whole number of Shares (determined by rounding up to
the next higher whole number of Shares any fractional portion of a Share equal to or in excess of
one-half Share, and otherwise rounding down to the next lower whole number of Shares), determined
by dividing the amount of Director Fees to be paid in Shares by the Fair Market Value of a Share at
the close of business on the date such Director Fees would otherwise be paid.

     (b) Payment of Director Fees in Restricted Stock Units. A Non-Management Director who
makes a Deferral Election in accordance with Section 14.3 shall receive all or part (as he or she
elects) of his or her Director Fees in the form of a number of Restricted Stock Units equal to the
quotient of the amount of Director Fees to be paid in the form of Restricted Stock Units divided by
the Fair Market Value of a Share at the close of business on the date such Director Fees would
otherwise be paid in cash.

14.3 Deferral Elections. To the extent permitted by the Committee from time to time, each
member of the Board who is a Non-Management Director may make an election (“Deferral Election”) to
be paid any or all of the following (“Deferrable Amounts”) in the form of Restricted Stock Units in
lieu of cash or Shares, as applicable: (a) Director Annual Grants as provided in Section 14.1; or
(b) Director Fees as provided in 14.2(a).

     (a) Timing of Deferral Elections. An initial Deferral Election must be filed with the
Human Resources Department of the Company no later than December 31 of the year preceding the
calendar year in which the Deferrable Amounts to which the Deferral Election applies would
otherwise be paid or delivered, subject to such restrictions and advance filing requirements as the
Company may impose; provided that any newly elected or appointed Non-Management Director may file a
Deferral Election not later than 30 days after the date such person first becomes a Non-Management
Director. A Deferral Election shall be irrevocable as of the filing deadline and shall only apply
with respect to Deferrable Amounts otherwise payable after the filing of such election. Any such
revocation or change shall have prospective application only and shall in no event apply with
respect to compensation earned in the calendar year in which the revocation or change is made.

     (b) Content of Deferral Elections. A Deferral Election must specify the following:

     (i) (A) The number of shares (including shares subject to Restricted Stock Units
granted under Section 14.1(a) or Section 14.1(b)) subject to the Director Annual Grant to be
deferred and paid in Restricted Stock Units under this Section 14.3 and/or (B) the dollar
amount of Director Fees to be deferred and paid in Restricted Stock Units under this Section
14.3, as applicable; and

     (ii) the date such Restricted Stock Units shall be paid (subject to such Period of
Restriction and other limitations as may be specified by counsel to the Company).

     (c) Deferral Account. The Company shall establish an account (“Deferral Account”) on
its books for each Non-Management Director who makes a Deferral Election. A number of Restricted
Stock Units (determined in the case of a Deferrable Amount otherwise payable in cash by dividing
the amount of cash to be deferred by the Fair Market Value of a Share at the close of business on
the date such cash would otherwise be paid) shall be credited to the Non-

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Management Director’s Deferral Account as of each date a Deferrable Amount subject to a Deferral
Election would otherwise be paid. Deferral Accounts shall be maintained for recordkeeping purposes
only and the Company shall not be obligated to segregate or set aside assets representing
securities or other amounts credited to Deferral Accounts. The obligation to make distributions of
securities or other amounts credited to Deferral Accounts shall be an unfunded unsecured obligation
of the Company.

     (d) Settlement of Deferral Accounts. The Company shall settle a Non-Management
Director’s Deferral Account by delivering to the holder thereof (which may be the Non-Management
Director or his or her beneficiary) a number of Shares equal to the number of Restricted Stock
Units then credited to such Deferral Account (or a specified portion in the event of any partial
settlement); provided that if less than the value of a whole Share remains in the Deferral Account
at the time of any such distribution, the number of Shares distributed shall be rounded up to the
next higher whole number of Shares if the fractional portion of a Share remaining is equal to or in
excess of one-half Share, and otherwise shall be rounded down to the next lower whole number of
Shares. Such settlement shall be made at the time or times specified in the applicable Deferral
Election.

14.4 Insufficient Number of Shares. If at any date insufficient Shares are available under
the Plan for the automatic grant of Director Annual Grants, or the delivery of Shares in lieu of
cash payment of Director Fees, or crediting Restricted Stock Units pursuant to a Deferral Election,
(a) Director Annual Grants under Section 14.1 automatically shall be granted proportionately to
each Non-Management Director eligible for such a grant to the extent Shares are then available
(provided that no Director Annual Grant shall be granted with respect to a fractional number of
Shares), and (b) then, if any Shares remain available, Director Fees elected to be received in
Shares shall be paid in the form of Shares or Restricted Stock Units proportionately among
Non-Management Directors then eligible to participate to the extent Shares are then available and
otherwise in the form of cash.

14.5 Non-Forfeitability. The interest of each Non-Management Director in Director Annual
Grants granted or delivered under the Plan at all times shall be non-forfeitable, except to the
extent the Board provides otherwise.

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Article 15. — Amendment, Modification, and Termination

15.1 Amendment, Modification, and Termination. Subject to Section 15.2, the Board may, at
any time and from time to time, alter, amend, suspend, discontinue or terminate the Plan in whole
or in part without the approval of the Company’s stockholders, except that (a) any amendment or
alteration shall be subject to the approval of the Company’s stockholders if such stockholder
approval is required by any federal or state law or regulation or the rules of any securities
exchange or other form of securities market on which the Shares may then be listed or quoted, (b)
the Board may otherwise, in its discretion, determine to submit other such amendments or
alterations to stockholders for approval and (c) no amendment or alteration of Section 6.3 or
Section 10.5 (except to correct a scrivener’s error) shall be made without the approval of the
Company’s stockholders.

15.2 Awards Previously Granted. Except as otherwise specifically permitted in the Plan or
an Award Agreement, no termination, amendment, or modification of the Plan shall adversely affect
in any material way any Award previously granted under the Plan, without the written consent of the
Grantee of such Award; provided that Article 13 may be removed, amended or modified at any time
prior to a Change in Control without the consent of any Grantee.

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Article 16. — Withholding

16.1 Mandatory Tax Withholding

     (a) Whenever, under the Plan, (i) Shares are to be delivered upon payment of an Award, (ii)
Shares of Restricted Stock become nonforfeitable, (iii) a cash payment is made for any Award, or
(iv) any other payment event occurs with respect to rights and benefits hereunder, the Company or
any Affiliate shall be entitled to require (A) that the Grantee remit an amount in cash, or in the
Company’s discretion, in Shares, valued at their Fair Market Value on the date the withholding
obligation arises, sufficient to satisfy all of the employer’s federal, state, and local tax
withholding requirements related thereto but no more than the minimum amount necessary to satisfy
such amounts (“Required Withholding”), (B) the withholding of such Required Withholding from
compensation otherwise due to the Grantee or from any Shares valued at their Fair Market Value at
the date the withholding obligation arises, or from any other payment due to the Grantee under the
Plan or otherwise or (C) any combination of the foregoing.

     (b) If any Grantee makes an election under Section 83(b) of the Code, the Company or any
Affiliate shall be entitled to require (i) that the Grantee remit an amount in cash, or in the
Company’s discretion, in Shares, valued at their Fair Market Value on the date the withholding
obligation arises, sufficient to satisfy the resulting Required Withholding, (ii) the withholding
of such Required Withholding from compensation otherwise due to the Grantee or from any Shares or
other payment due to the Grantee under the Plan or otherwise or (iii) any combination of the
foregoing.

16.2 Notification under Code Section 83(b). If any Grantee makes the election permitted
under Section 83(b) of the Code to include in such Grantee’s gross income in the year of transfer
the amounts specified in Section 83(b) of the Code, then such Grantee shall notify the Company of
such election within ten (10) days of filing the notice of the election with the Internal Revenue
Service, in addition to any filing and notification required pursuant to regulations issued under
Section 83(b) of the Code. The Committee may, in connection with the grant of an Award or at any
time thereafter, prohibit a Grantee from making the election described above.

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Article 17. — Additional Provisions

17.1 Successors. All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise of
all or substantially all of the business and/or assets of the Company.

17.2 Severability. If any part of the Plan is declared by any court or governmental
authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any other
part of the Plan. Any Section or part of a Section so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of such Section or part of a
Section to the fullest extent possible while remaining lawful and valid.

17.3 Requirements of Law. The granting of Awards and the delivery of Shares under the Plan
shall be subject to all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or securities exchanges as may be required. Notwithstanding any provision of
the Plan or any Award, Grantees shall not be entitled to exercise, or receive benefits under, any
Award, and the Company (and any Affiliate) shall not be obligated to deliver any Shares or deliver
benefits to a Grantee, if such exercise or delivery would constitute a violation by the Grantee or
the Company of any applicable law or regulation.

17.4 Securities Law Compliance.

     (a) If the Committee deems it necessary to comply with any applicable securities law, or the
requirements of any securities exchange or other form of securities market upon which Shares may be
listed, the Committee may impose any restriction on Shares acquired pursuant to Awards under the
Plan as it may deem advisable. All certificates for Shares delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations and other
requirements of the SEC, any securities exchange or other form of securities market upon which
Shares are then listed, any applicable securities law, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such restrictions. If
so requested by the Company, the Grantee shall make a written representation to the Company that he
or she will not sell or offer to sell any Shares unless a registration statement shall be in effect
with respect to such Shares under the Securities Act of 1933, as amended, and any applicable state
or foreign securities law or unless he or she shall have furnished an opinion to the Company, in
form and substance satisfactory to the Company, that such registration is not required.

     (b) If the Committee determines that the exercise, nonforfeitability of, or delivery of
benefits pursuant to, any Award would violate any applicable provision of securities laws or the
listing requirements of any securities exchange or other form of securities market on which are
listed any of the Company’s equity securities, then the Committee may postpone any such exercise,
nonforfeitability or delivery, as applicable, but the Company shall use all reasonable efforts to
cause such exercise, nonforfeitability or delivery to comply with all such provisions at the
earliest practicable date.

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17.5 No Rights as a Stockholder. No Grantee shall have any rights as a stockholder of the
Company with respect to the Shares (other than Shares of Restricted Stock) which may be deliverable
upon exercise or payment of such Award until such Shares have been delivered to him or her. Shares
of Restricted Stock, whether held by a Grantee or in escrow by the Secretary of the Company, shall
confer on the Grantee all rights of a stockholder of the Company, except as otherwise provided in
the Plan or Award Agreement in compliance with applicable law. At the time of a grant of Shares of
Restricted Stock, the Committee may require the payment of cash dividends thereon to be deferred
and, if the Committee so determines, reinvested in additional Shares of Restricted Stock. Stock
dividends and deferred cash dividends issued with respect to Shares of Restricted Stock shall be
subject to the same restrictions and other terms as apply to the Shares of Restricted Stock with
respect to which such dividends are issued. The Committee may in its discretion provide for
payment or crediting of interest on deferred cash dividends.

17.6 Nature of Payments. Unless specified in the Award Agreement or otherwise determined
by the Company, Awards shall be special incentive payments to the Grantee and shall not be taken
into account in computing the amount of salary or compensation of the Grantee for purposes of
determining any pension, retirement, death or other benefit under (a) any pension, retirement,
profit-sharing, bonus, insurance or other employee benefit plan of the Company or any Affiliate,
except as such plan shall otherwise expressly provide, or (b) any agreement between (i) the Company
or any Affiliate and (ii) the Grantee, except as such agreement shall otherwise expressly provide.

17.7 Non-Exclusivity of Plan. Neither the adoption of the Plan by the Board nor its
submission to the stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board to adopt such other compensatory arrangements for employees
or Non-Management Directors as it may deem desirable.

17.8 Governing Law. The Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Delaware, other than its laws respecting
choice of law.

17.9 Share Certificates. Any certificates for Shares delivered under the terms of the Plan
shall be subject to such stop-transfer orders and other restrictions as the Committee may deem
advisable under federal or state securities laws, rules and regulations thereunder, and the rules
of any foreign securities laws, rules and regulations thereunder, and the rules of any national
securities exchange or other form of securities market on which Shares are listed or quoted. The
Committee may cause a legend or legends to be placed on any such certificates to make appropriate
reference to such restrictions or any other restrictions or limitations that may be applicable to
Shares. In addition, during any period in which Awards or Shares are subject to restrictions or
limitations under the terms of the Plan or any Award Agreement, or during any period during which
delivery or receipt of an Award or Shares has been deferred by the Committee or a Grantee, the
Committee may require any Grantee to enter into an agreement providing that certificates
representing Shares deliverable or delivered pursuant to an Award shall remain in the physical
custody of the Company or such other person as the Committee may designate.

41

 

17.10 Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an
“unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made
to a Grantee pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give
any such Grantee any rights that are greater than those of a general creditor of the Company;
provided that the Committee may authorize the creation of trusts or make other arrangements to meet
the Company’s obligations under the Plan to deliver cash, Shares or other property pursuant to any
Award which trusts or other arrangements shall be consistent with the “unfunded” status of the Plan
unless the Committee otherwise determines.

17.11 Employment. Nothing in the Plan or an Award Agreement shall interfere with or limit
in any way the right of the Company or any Affiliate to terminate any Grantee’s employment at any
time, for any reason or no reason, or shall confer upon any Grantee the right to continue in the
employ or as an officer of the Company or any Affiliate.

17.12 Participation. No employee or officer shall have the right to be selected to receive
an Award under this Plan or, having been so selected, to be selected to receive a future Award.

17.13 Military Service. Awards shall be administered in accordance with Section 414(u) of
the Code and the Uniformed Services Employment and Reemployment Rights Act of 1994 to the extent
required by law or as determined by the Committee.

17.14 Construction; Gender and Number. The following rules of construction will apply to
the Plan: (a) the word “or” is disjunctive but not necessarily exclusive, and (b) words in the
singular include the plural, words in the plural include the singular, and words in the neuter
gender include the masculine and feminine genders and words in the masculine or feminine gender
include the other neuter genders.

17.15 Headings. The headings of articles and sections are included solely for convenience
of reference, and if there is any conflict between such headings and the text of this Plan, the
text shall control.

17.16 Obligations. Unless otherwise specified in an Award Agreement, the obligation to
deliver, pay or transfer any amount of money or other property pursuant to Awards under this Plan
shall be the sole obligation of a Grantee’s employer; provided that the obligation to deliver or
transfer any Shares pursuant to Awards under this Plan shall be the sole obligation of the Company.

17.17 No Right to Continue as Director. Nothing in the Plan or any Award Agreement shall
confer upon any Non-Management Director the right to continue to serve as a director of the
Company.

17.18 Code Section 409A Compliance. The Board intends that, except as may be otherwise
determined by the Committee, any Awards under the Plan satisfy the requirements of Section 409A of
the Code and related regulations and Treasury pronouncements (“Section 409A”) to avoid the
imposition of any taxes, including additional income taxes, thereunder. If the Committee determines
that an Award, Award Agreement, payment, distribution, deferral election, transaction or any other
action or arrangement contemplated by the provisions of the Plan would, if undertaken, cause a
Grantee to become subject to additional taxes pursuant to

42

 

Section 409A, unless the Committee expressly determines otherwise, such grant of Award, payment,
distribution, deferral election, transaction or other action or arrangement shall not be undertaken
and the related provisions of the Plan and/or Award Agreement will be amended or deemed modified in
as close a manner as possible to give effect to the original terms of the Award, or, only if
necessary because a modification or deemed modification would not be reasonably effective in
avoiding the additional income tax under Section 409A(a)(1)(B) of the Code, rescinded in order to
comply with the requirements of Section 409A to the extent determined by the Committee without the
consent of or notice to the Grantee. Notwithstanding the foregoing, with respect to any Award
intended by the Committee to be exempt from the requirements of Section 409A which is to be paid
out when vested, such payment shall be made as soon as administratively feasible after the Award
becomes vested, but in no event shall such payment be made later than 2-1/2 months after the end of
the calendar year in which the Award became vested unless (a) deferred pursuant to Section 5.8 or
14.3 or (b) otherwise permitted under the exemption provisions of Section 409A.

END OF DOCUMENT

43

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