Document:

exv10w2

 

Exhibit 10.2

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF WILLIAMS FOUR CORNERS LLC

DATED JUNE 20, 2006

BETWEEN

WILLIAMS FIELD SERVICES COMPANY, LLC

AND

WILLIAMS PARTNERS OPERATING LLC

 

 

Table of Contents

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 SUBJECT MATTER. DEFINITIONS AND RULES OF CONSTRUCTION
	 	 	1	 
	1.1 Subject Matter
	 	 	1	 
	1.2 Definitions
	 	 	1	 
	1.3 Rules of Construction
	 	 	8	 
	(a) General
	 	 	8	 
	(b) Articles and Sections
	 	 	8	 
	1.4 MLP Partnership Agreement
	 	 	9	 
	 
	 	 	 	 
	ARTICLE 2 ORGANIZATION AND CONDUCT OF BUSINESS
	 	 	9	 
	2.1 Company
	 	 	9	 
	2.2 Continuation of Company
	 	 	9	 
	2.3 Purpose
	 	 	9	 
	2.4 Place of Business
	 	 	9	 
	2.5 Term
	 	 	9	 
	2.6 Business Opportunities; No Implied Duty
	 	 	9	 
	 
	 	 	 	 
	ARTICLE 3 CAPITAL STRUCTURE
	 	 	10	 
	3.1 Percentage Interests
	 	 	10	 
	3.2 Capital Contributions
	 	 	10	 
	3.3 No Voluntary Contributions; Interest
	 	 	10	 
	3.4 Capital Accounts
	 	 	10	 
	(a) Increases and Decreases
	 	 	10	 
	(b) Computation of Amounts
	 	 	11	 
	(c) Transferees
	 	 	11	 
	(d) Contributed Unrealized Gains and Losses
	 	 	11	 
	(e) Distributed Unrealized Gains and Losses
	 	 	12	 
	(f) Code Compliance
	 	 	12	 
	3.5 Return of Capital
	 	 	12	 
	3.6 Loans by Members
	 	 	12	 
	 
	 	 	 	 
	ARTICLE 4 ALLOCATIONS AND DISTRIBUTIONS
	 	 	13	 
	4.1 Allocations for Capital Account Purposes
	 	 	13	 
	(a) Net Income
	 	 	13	 
	(b) Net Losses
	 	 	13	 
	(c) Nonrecourse Liabilities
	 	 	13	 
	(d) Company Minimum Gain Chargeback
	 	 	13	 
	(e) Chargeback of Minimum Gain Attributable to Member Nonrecourse Debt
	 	 	13	 
	(f) Qualified Income Offset
	 	 	14	 
	(g) Gross Income Allocations
	 	 	14	 
	(h) Nonrecourse Deductions
	 	 	14	 
	(i) Member Nonrecourse Deductions
	 	 	14	 
	(j) Code Section 754 Adjustments
	 	 	14	 
	4.2 Allocations for Tax Purposes
	 	 	15	 
	(a) Allocations of Gain, Loss, etc
	 	 	15	 
	(b) Book-Tax Disparities
	 	 	15	 
	(c) Conventions / Allocations
	 	 	15	 
	(d) Section 743(b)
	 	 	15	 
	(e) Recapture Income
	 	 	16	 
	(f )Section 754
	 	 	16	 
	4.3 Distributions
	 	 	16	 

-i-

 

	 	 	 	 	 
	 	 	Page	 
	ARTICLE 5 MANAGEMENT
	 	 	16	 
	5.1 The Management Committee
	 	 	16	 
	5.2 Composition; Removal and Replacement of Representative
	 	 	16	 
	5.3 Officers
	 	 	17	 
	5.4 Voting
	 	 	17	 
	5.5 Meetings of Management Committee
	 	 	17	 
	(a) Scheduling
	 	 	17	 
	(b) Conduct of Business
	 	 	18	 
	(c) Quorum
	 	 	18	 
	5.6 Remuneration
	 	 	18	 
	5.7 Individual Action by Members
	 	 	18	 
	 
	 	 	 	 
	ARTICLE 6 INDEMNIFICATION; LIMITATIONS ON LIABILITY
	 	 	18	 
	6.1 Indemnification by the Company
	 	 	18	 
	(a) Rights of Company Indemnitee
	 	 	19	 
	6.2 Indemnification by the Members
	 	 	19	 
	6.3 Defense of Action
	 	 	19	 
	6.4 Limited Liability of Members
	 	 	20	 
	 
	 	 	 	 
	ARTICLE 7 OPERATION OF COMPANY
	 	 	20	 
	7.1 Operator
	 	 	20	 
	7.2 Expenses
	 	 	20	 
	7.3 Accounts
	 	 	21	 
	 
	 	 	 	 
	ARTICLE 8 TRANSFER OF INTERESTS
	 	 	21	 
	8.1 Restrictions on Transfer
	 	 	21	 
	(a) Consent
	 	 	21	 
	(b) Certain Prohibited Transfers
	 	 	21	 
	(c) Defaulting_Members
	 	 	21	 
	(d) Effect of Prohibited Transfers
	 	 	21	 
	8.2 Possible Additional Restrictions on Transfer
	 	 	21	 
	8.3 Right of First Offer
	 	 	22	 
	(a) Initial Offer to Members
	 	 	22	 
	(b) Negotiation with Third Party
	 	 	22	 
	(c) Applicability of Transfer Restrictions
	 	 	22	 
	8.4 Substituted Members
	 	 	23	 
	8.5 Documentation; Validity of Transfer
	 	 	23	 
	8.6 Covenant Not to Withdraw or Dissolve
	 	 	23	 
	 
	 	 	 	 
	ARTICLE 9 DEFAULT
	 	 	24	 
	9.1 Events of Default
	 	 	24	 
	9.2 Consequences of Default
	 	 	25	 
	(a) Suspension of Distributions in the case of Monetary Default
	 	 	25	 
	(b) Options of Nondefaulting Members
	 	 	25	 
	 
	 	 	 	 
	ARTICLE 10 DISSOLUTION AND LIQUIDATION
	 	 	25	 
	10.1 Dissolution
	 	 	25	 
	10.2 Liquidation
	 	 	26	 
	(a) Procedures
	 	 	26	 
	(b) Distributions
	 	 	26	 
	(c) Capital Account Deficits; Termination
	 	 	27	 
	 
	 	 	 	 
	ARTICLE 11 FINANCIAL MATTERS
	 	 	27	 
	11.1 Books and Records
	 	 	27	 
	11.2 Financial Reports; Budget
	 	 	27	 
	11.3 Accounts
	 	 	28	 

-ii-

 

	 	 	 	 	 
	 	 	Page	 
	11.4 Tax Matters
	 	 	28	 
	(a) Tax Matters Partner
	 	 	28	 
	(b) Tax Information
	 	 	28	 
	(c) Tax Elections
	 	 	29	 
	(d) Notices
	 	 	29	 
	(e) Filing of Returns
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 12 MISCELLANEOUS
	 	 	29	 
	12.1 Notices
	 	 	29	 
	12.2 Amendment
	 	 	30	 
	12.3 Governing Law
	 	 	30	 
	12.4 Binding Effect
	 	 	30	 
	12.5 No Third Party Rights
	 	 	30	 
	12.6 Counterparts
	 	 	30	 
	12.7 Invalidity
	 	 	30	 
	12.8 Entire Agreement
	 	 	31	 
	12.9 Expenses
	 	 	31	 
	12.10 Waiver
	 	 	31	 
	12.11 Dispute Resolution
	 	 	31	 
	(a) Scope
	 	 	31	 
	(b) Senior Party Negotiation
	 	 	31	 
	(c) Litigation
	 	 	32	 
	(d) Sole Procedures
	 	 	32	 
	12.12 Disclosure
	 	 	32	 
	12.13 Brokers and Finder
	 	 	32	 
	12.14 Further Assurances
	 	 	32	 
	12.15 Section Headings
	 	 	32	 
	12.16 Waiver of Certain Damages
	 	 	32	 
	12.17 Certificates of Interest
	 	 	32	 

-iii-

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF WILLIAMS FOUR CORNERS LLC

     This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (the “Agreement”), dated
as of June 20, 2006, by and between WILLIAMS FIELD SERVICES COMPANY, LLC (the “Williams
Member”), a Delaware limited liability company, and WILLIAMS PARTNERS OPERATING LLC (the
“MLP Member”), a Delaware limited liability company.

ARTICLE 1

SUBJECT MATTER. DEFINITIONS AND RULES OF CONSTRUCTION

     1.1 Subject Matter. This Agreement amends and restates the Operating Agreement of
Williams Four Corners LLC, a Delaware limited liability company (the “Company”), dated as
of February 1, 2006 (the “Initial Agreement”), by the Williams Member, as the sole member.

     1.2 Definitions. For purposes of this Agreement, including the Schedules and Exhibits
hereto, the terms defined in this Section 1.2 shall have the meanings herein assigned to
them and the capitalized terms defined elsewhere in this Agreement, by inclusion in quotation marks
and parentheses, shall have the meanings so ascribed to them.

     “Adjusted Capital Account” means the Capital Account maintained for each Member as of
the end of each taxable year of the Company, (a) increased by any amounts that such Member is
obligated to restore under the standards set by Treasury Regulation section 1.704-1(b)(2)(ii)(c)
(or is deemed obligated to restore pursuant to the penultimate sentences of Treasury Regulation
sections 1.704-2(g)(1) and 1.704-2(i)(5)), and (b) decreased by (i) the amount of all losses and
deductions that, as of the end of such taxable year, are reasonably expected to be allocated to
such Member in subsequent years under sections 704(e)(2) and 706(d) of the Code and Treasury
Regulation section 1.751-l(b)(2)(ii), and (ii) the amount of all distributions that, as of the end
of such taxable year, are reasonably expected to be made to such Member in subsequent years in
accordance with the terms of this Agreement or otherwise to the extent they exceed offsetting
increases to such Member’s Capital Account that are reasonably expected to occur during (or prior
to) the year in which such distributions are reasonably expected to be made (other than increases
as a result of a minimum chargeback pursuant to Section 4.1(d) or 4.1(e)). The
foregoing definition of Adjusted Capital Account is intended to comply with the provisions of
Treasury Regulation section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     “Adjusted Property” means any property of the Company, the Carrying Value of which has
been adjusted pursuant to Section 3.4(d).

     “Affiliate” means with respect to any specified Person, any other Person directly or.
indirectly controlling or controlled by or under direct or indirect common control with such
specified Person or, in the case of a Person that is a limited partnership, an “Affiliate” shall
include any other Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the general partner of such limited partnership. For the purposes of
this definition, “control” means the ownership, directly or indirectly, of more than 50% of the

 

 

Voting Stock, of such Person; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

     “Agreed Value” of any Contributed Property or Adjusted Property means the fair market
value of such property or other consideration at the time of contribution as determined by the
Company (but only in the absence of a negotiated determination of fair market value among Members,
in which case such negotiated value shall be accepted as the Agreed Value) using such reasonable
method of valuation as it may adopt. In the absence of a negotiated allocation among the Members
(if such negotiated allocation exists, the negotiated allocation will be conclusive), the Company
shall, in its sole discretion, use such method as it deems reasonable and appropriate to allocate
the aggregate Agreed Value of Contributed Properties or Adjusted Property in a single or integrated
transaction among such properties on a basis proportional to their fair market value.

     “Agreement” has the meaning ascribed to such term in the preamble.

     “Asset Contribution Agreement” means the Contribution, Conveyance and Assumption
Agreement, dated June 20, 2006, by and among the Williams Member and the Company.

     “Available Cash” means, with respect to any Distribution Period ending prior to the
dissolution or liquidation of the Company, and without duplication:

     (a) the sum of (i) all cash and cash equivalents of the Company on hand at the end of such
Distribution Period and, in the sole discretion of the Management Committee, (ii) all additional
cash and cash equivalents of the Company on hand on the date of determination of Available Cash
with respect to such Distribution Period, less

     (b) the amount of any cash reserves that is necessary or appropriate in the reasonable
discretion of the Management Committee to (i) provide for the proper conduct of the business of the
Company (including reserves for future capital expenditures and for anticipated future credit needs
of the Company) subsequent to such Distribution Period or (ii) comply with applicable Law or any
loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to
which the Company is a party or by which it is bound or its assets are subject; provided, however,
that distributions made by the Company or cash reserves established, increased or reduced after the
end of such Distribution Period but on or before the date of determination of Available Cash with
respect to such Distribution Period shall be deemed to have been made, established, increased or
reduced, for purposes of determining Available Cash, within such Distribution Period if the
Management Committee so determines.

     Notwithstanding the foregoing, “Available Cash” with respect to the Distribution Period in
which a liquidation or dissolution of the Company occurs and any subsequent Distribution Period
shall equal zero.

     “Bankruptcy” means (i) the filing of any petition or the commencement of any suit or
proceeding by an individual or entity pursuant to Bankruptcy Law seeking an order for relief,
liquidation, reorganization or protection from creditors, (ii) the entry of an order for relief
against an individual or entity pursuant to Bankruptcy Law, or (iii) the appointment of a receiver,
trustee or custodian for a substantial portion of the individual’s or entity’s assets or property,
provided

-2-

 

such order for relief, liquidation, reorganization or protection from creditors is not
dismissed within sixty (60) days after such appointment of a receiver, trustee or custodian.

     “Bankruptcy Law” means Title 11, U.S. Code or any similar Federal or state Law for the
relief of debtors.

     “Book-Tax Disparity” means with respect to any item of Contributed Property or
Adjusted Property, as of the date of any determination, the difference between the Carrying Value
of such Contributed Property or Adjusted Property and the adjusted basis thereof for federal income
tax purposes as of such date. A Member’s share of the Company’s Book Tax Disparities in all
Contributed Property and Adjusted Property will be reflected by the difference between such
Member’s Capital Account balance as maintained pursuant to Section 3.4 and the hypothetical
balance of such Member’s Capital Account computed as if it had been maintained strictly in
accordance with federal income tax accounting principles. The determination of Book Tax Disparity
and a Member’s share thereof shall be determined consistently with Section 1.704-3(d) of the
Treasury Regulations.

     “Business Day” means any day other than a Saturday, Sunday or other day on which banks
in the State of Oklahoma are permitted or required to close.

     “Capital Account” means the capital account maintained for each Member for purposes of
Section 704(b) of the Code as described in Section 3.4.

     “Capital Contribution” means, with respect to any Member, the amount of capital
contributed by such Member to the Company in accordance with Article 3 of this Agreement.

     “Carrying Value” means (a) with respect to Contributed Property, the Agreed Value of
such property reduced (but not below zero) by all depreciation, amortization and cost recovery
deductions relating to such property charged to the Members’ Capital Accounts, and (b) with respect
to any other Company property, the adjusted basis of such property for federal income tax purposes,
all as of the time of determination. The Carrying Value of any property shall be adjusted from
time to time in accordance with Section 3.4(d) and to reflect changes, additions or other
adjustments to the Carrying Value for dispositions and acquisitions of Company properties, as
deemed appropriate by the Company.

     “Certificates” shall have the meaning ascribed to such term in Section 12.17.

     “Certificate of Formation” means the certificate of formation of the Company, as
amended or restated from time to time, filed in the Office of the Secretary of State of the State
of Delaware in accordance with the Delaware Act.

     “Change of Ownership” means, with respect to any Person, a change directly or
indirectly in the Equity of such Person or in the ownership of all or substantially all of its
assets.

     “Code” means the Internal Revenue Code of 1986, as amended.

     “Company” shall have the meaning ascribed to such term in Section 1.1.

-3-

 

     “Company Assets” means the assets and properties owned, leased or used by the Company
in its business, including, without limitation, (i) the Ignacio, Kutz and Lybrook processing
plants, (ii) the Milagro and Esperanza treating facilities and (iii) approximately 3,500 miles of
associated gathering systems, in each case, as more specifically described in Schedule 2.1 of the
Asset Contribution Agreement.

     “Company Indemnitee” shall have the meaning ascribed to such term in Section
6.1.

     “Company Minimum Gain” means the amount determined pursuant to Treasury Regulation
section 1.704-2(d).

     “Contributed Property” means each property or other asset, in such form as may be
permitted by the Delaware Act, but excluding cash or cash equivalents, contributed to the Company
by a Member. Once the Carrying Value of a Contributed Property is adjusted pursuant to Section
3.4(d), such property shall no longer constitute a Contributed Property for purposes of
Section 4.2, but shall be deemed an Adjusted Property for such purposes.

     “Default” shall have the meaning ascribed to such term in Section 9.1.

     “Defaulting Member” shall have the meaning ascribed to such term in Section
9.1.

     “Default Rate,” with respect to period, means the interest rate that would apply to
borrowings under the Loan Agreement, or any amendment or restatement thereof or any successor
agreement thereto, over such period.

     “Delaware Act” means the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101,
et seq., as amended from time to time.

     “Distribution Period” means a period equal to a fiscal quarter of the Company or such
shorter portion thereof, as determined from time to time by majority vote of the Management
Committee.

     “Economic Risk of Loss” has the meaning set forth in Treasury Regulation section
1.752-2(a).

     “Equity” means common stock in the case of a corporation, membership interest in the
case of a limited liability company, a partnership interest in the case of a partnership or other
similar interest in the case of another Person.

     “Event of Default” shall have the meaning ascribed to such term in Section
9.1.

     “Fiscal Year” means (i) the period of time commencing on the effective date of the
Initial Agreement and ending on December 31, 2006, in the case of the first Fiscal Year of the
Company or (ii) in the case of subsequent Fiscal Years of the Company, any subsequent twelve (12)
month period commencing on January 1 and ending on December 31.

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

-4-

 

     “GAAP Capital Account” means the capital account maintained in accordance with GAAP
for purposes of the annual financial statements referred to in Section 11.2.

     “Governmental Body” means a government organization, subdivision, court, agency or
authority thereof, whether foreign or domestic.

     “Indemnified Party” shall have the meaning ascribed to such term in Section
6.3.

     “Indemnifying Party” shall have the meaning ascribed to such term in Section
6.3.

     “Initial Agreement” shall have the meaning ascribed to such term in Section
1.1.

     “Interest” means the ownership interest of a Member in the Company (which shall be
considered intangible personal property for all purposes) consisting of (i) such Member’s right to
receive its Percentage Interest of the Company’s profits, losses, allocations and distributions,
(ii) such Member’s sight to vote or grant or withhold consents with respect to matters related to
the Company as provided herein or in the Delaware Act, and (iii) such Member’s other rights and
privileges as herein provided.

     “Internal Transfer” shall have the meaning ascribed to such term in Section
8.1.

     “Internal Transferee” shall have the meaning ascribed to such term in Section
8.1.

     “Laws” means all applicable statutes, law, rules, regulations, orders, ordinances,
judgments and decrees of any Governmental Body, including the common or civil law of any
Governmental Body.

     “Liabilities” shall have the meaning ascribed to such term in Section 6.1.

     “Loan Agreement” has the meaning ascribed to such term in Section 3.6.

     “Majority” means one or more Members having among them more than 50% of the Interests
of all Members entitled to vote.

     “Management Committee” means the committee comprised of the individuals designated by
the Members pursuant to Section 5.2 hereof and all other individuals who may from time to
time be duly appointed by the Members to serve as representatives on such committee in accordance
with the provisions hereof, in each case so long as such individual shall continue in such capacity
in accordance with the terms hereof. References herein to the Management Committee shall refer to
such individuals collectively in their capacity as representatives on such committee.

     “Marketed Interest” shall have the meaning ascribed to such term in Section
8.3.

     “Member Indemnitee” shall have the meaning ascribed to such term in Section
6.2.

-5-

 

     “Members” means the Williams Member, the MLP Member and any other Persons who are
admitted as Members in the Company pursuant to this Agreement, but does not include any Person who
has ceased to be a Member in the Company.

     “Minimum Gain Attributable to Member Nonrecourse Debt” means that amount determined in
accordance with the principles of Regulation section 1.704-2(i)(3).

     “MLP” means Williams Partners L.P., a Delaware limited partnership.

     “MLP Member” has the meaning ascribed to such term in the preamble.

     “MLP Partnership Agreement” means the Amended and Restated Agreement of Limited
Partnership of the MLP, dated August 23, 2005, as it may be amended and restated from time to time.

     “Monetary Default” shall have the meaning ascribed to such term in Section
9.1.

     “Negotiation Period” shall have the meaning ascribed to such term in Section
8.3.

     “Net Agreed Value” means (i) in the case of any Contributed Property, the fair market
value of such property reduced by any liabilities either assumed by the Company upon such
contribution or to which such property is subject when contributed, and (ii) in the case of any
property distributed to a Member by the Company, the Company’s Carrying Value of such property at
the time such property is distributed, reduced by any indebtedness either assumed by such Member
upon such distribution or to which such property is subject at the time of distribution as
determined under section 752 of the Code.

     “Net Income” means, for any taxable period, the excess, if any, of the Company’s items
of income and gain for such taxable period over the Company’s items of loss and deduction for such
taxable period. The items included in the calculation of Net Income shall be determined in
accordance with Section 3.4(b) and shall not include any items specifically allocated under
Sections 4.1(d) through 4.1(j). For purposes of Sections 4.1(a) and
(b), in determining whether Net Income has been allocated to any Member for any previous
taxable period, any Unrealized Gain or Unrealized Loss allocated pursuant to Section 3.4(d)
shall be treated as an item of gain or loss to be allocated pursuant to Section 4.1.

     “Net Loss” means, for any taxable period, the excess, if any, of the Company’s items
of loss and deduction for such taxable period over the Company’s items of income and gain for such
taxable period. The items included in the calculation of Net Loss shall be determined in
accordance with Section 3.4(b) and shall not include any items specifically allocated under
Sections 4.1(d) through 4.1(j). For purposes of Sections 4.1(a) and
(b), in determining whether Net Loss has been allocated to any Member for any previous
taxable period, any Unrealized Gain or Unrealized Loss allocated pursuant to Section 3.4(d)
shall be treated as an item of gain or loss to be allocated pursuant to Section 4.1.

     “Nonrecourse Built-in Gain” means with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or negative pledge securing a Nonrecourse
Liability, the amount of any taxable gain that would be allocated to the Members pursuant to

-6-

 

Section 4.2(b)(i)(A) or 4.2(b)(ii)(A) if such properties were disposed of in a
taxable transaction in full satisfaction of such liabilities and for no other consideration.

     “Nonrecourse Debt” has the meaning set forth in Regulations section 1.704-2(b)(4).

     “Nonrecourse Deductions” means any and all items of loss, deduction, or expenditure
(described in section 705(a)(2)(B) of the Code) that, in accordance with the principles of
Regulation section 1.704-2(b)(i) are attributable to a Nonrecourse Liability.

     “Nonrecourse Liability” has the meaning assigned to such term in Regulation section
1.704-2(b)(3).

     “Nondefaulting Member” shall have the meaning ascribed to such term in Section
9.1.

     “Non-Selling Member” shall have the meaning ascribed to such term in Section
8.3.

     “Notice of Dispute” shall have the meaning ascribed to such term in Section
12.11.

     “Notice Period” shall have the meaning ascribed to such term in Section 8.3.

     “Operator” shall have the meaning ascribed to such term in Section 7.1.

     “Parent” means (a) with respect to the Williams Member, The Williams Companies, Inc.,
a Delaware corporation, (b) with respect to the MLP Member, the MLP.

     “Percentage Interest” means, with respect to a Member, the percentage set forth
opposite such Member’s name on Schedule 3.1, subject to adjustment pursuant to a transfer
of an Interest by a Member or the issuance of new Interests by the Company, in either case, in
compliance with the terms of this Agreement.

     “Person” means any individual, corporation, partnership, joint venture, association,
joint stock company, limited liability company, trust, estate, unincorporated organization or
Governmental Body.

     “Purchase Notice” shall have the meaning ascribed to such term in Section 8.3.

     “Recapture Income” means any gain recognized by. the Company (computed without regard
to any adjustment required by section 734 or 743 of the Code) upon the disposition of any property
or asset of the Company, which gain is characterized as ordinary income because it represents the
recapture of deductions previously taken with respect to such property or asset.

     “Record Date” means the date established by the Members from time to time for
determining the identity of Members entitled to receive any distribution pursuant to Section
4.3.

     “Regulations” means the U.S. Treasury Regulations promulgated under the Code, as in
effect from time to time.

     “Residual Gain” or “Residual Loss” means any item of gain or loss, as the case
may be, of the Company recognized for federal income tax purposes resulting from a sale, exchange
or

-7-

 

other disposition of a Contributed Property or Adjusted Property, to the extent such item of
gain or loss is not allocated pursuant to Section 4.2(b)(i)(A) or 4.2(b)(ii)(A), to eliminate Book
Tax Disparities.

     “Sale Offer” shall have the meaning ascribed to such term in Section 8.3.

     “Selling Member” shall have the meaning ascribed to such term in Section 8.3.

     “Tax Matters Partner” shall have the meaning ascribed to such term in Section
11.4.

     “Third Party Action” shall have the meaning ascribed to such term in Section
6.3.

     “Unrealized Gain” attributable to any item of Company property means, as of any date
of determination, the excess, if any, of (a) the fair market value of such property as of such date
over (b) the Carrying Value of such property as of such date (prior to any adjustment to be made
pursuant to Section 3.4(d) or 3.4(e) as of such date). In determining such
Unrealized Gain, the aggregate cash amount and fair market value of a Company asset (including cash
or cash equivalents) shall be determined by the Company and agreed to by the Members using such
reasonable method of valuation as it may adopt.

     “Unrealized Loss” attributable to any item of Company property means, as of any date
of determination, the excess, if any, of (a) the Carrying Value of such property as of such date
(prior to any adjustment to be made pursuant to Section 3.4(d) or 3.4(e) as of such
date) over (b) the fair market value of such property as of such date. In determining such
Unrealized Loss, the aggregate cash amount and fair market value of a Company asset (including cash
or cash equivalents) shall be determined by the Company and agreed to by the Members using such
reasonable method of valuation as it may adopt.

     “Voting Stock” means the securities or other ownership interest in any Person which
have ordinary voting power under ordinary circumstances for the election of directors (or the
equivalent) of such Person.

     “Williams Member” has the meaning ascribed to such term in the preamble.

     1.3 Rules of Construction. For purposes of this Agreement, including the Exhibits and
Schedules hereto:

     (a) General. Unless the context otherwise requires, (i) “or” is not exclusive; (ii) an
accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (iii)
words in the singular include the plural and words in the plural include the singular; (iv) words
in the masculine include the feminine and words in the feminine include the masculine; (v) any date
specified for any action that is not a Business Day shall be deemed to mean the first Business Day
after such date; (vi) a reference to a Member includes its successors and permitted assigns and
(vii) any reference to $ or dollars shall be a reference to U.S. dollars.

     (b) Articles and Sections. Reference to Articles and Sections are, unless otherwise
specified, to Articles and Sections of this Agreement.

-8-

 

     1.4 MLP Partnership Agreement. Notwithstanding any other provision of this Agreement, the
Members agree that to the extent any provision of this Agreement contradicts with or is in conflict
with any provision of the MLP Partnership Agreement, the provisions of the MLP Partnership
Agreement shall control.

ARTICLE 2

ORGANIZATION AND CONDUCT OF BUSINESS

     2.1 Company. Subject to the terms and conditions of this Agreement, the Members hereby
agree to operate and manage the Company, a limited liability company organized pursuant to the
Delaware Act, which shall engage in the business described herein.

     2.2 Continuation of Company. The parties hereto hereby continue the limited liability
company formed on November 21, 2005 upon the filing of a Certificate of Formation in the Office of
the Secretary of State of the State of Delaware in accordance with the requirements of the Delaware
Act. From time to time, the Company shall file such further certificates of formation,
qualifications to do business, fictitious name certificates or like filings in such jurisdictions
as may be necessary or appropriate in connection with the conduct of the Company’s business or to
provide notification of the limitation of liability of the Members under applicable Law.

     2.3 Purpose. The business and purposes of the Company shall be (i) to own and operate the
Company Assets and (ii) to engage in such other business activities that may be undertaken by a
limited liability company under the Delaware Act as the Members may from time to time determine;
provided, however, that the Members determine, as of the date of the acquisition or commencement of
such other business activity, that such activity (a) generates “qualifying income” (as such term is
defined pursuant to Section 7704 of the Code) or (b) enhances the operations of an activity of the
Company that generates qualifying income.

     2.4 Place of Business. The principal place of business of the Company shall be One
Williams Center, Tulsa Oklahoma 74172 or such other place as the Members may from time to time
determine. The registered office of the Company in the State of Delaware shall be 1209 Orange
Street, Wilmington, New Castle County, Delaware 19801, and the registered agent for service of
process on the Company shall be The Corporation Trust Company whose business address is the same as
the Company’s registered office (or such other registered office and registered agent as the
Members may from time to time select).

     2.5 Term. The Company shall continue indefinitely unless dissolved in accordance with
Section 10.1.

     2.6 Business Opportunities; No Implied Duty. Except as may be provided in the MLP
Partnership Agreement, the Members and their respective Affiliates may engage, directly or
indirectly, without the consent of the other Members or the Company, in other business
opportunities, transactions, ventures or other arrangements of any nature or description,
independently or with others, including without limitation, business of a nature which may be
competitive with or the same as or similar to the business of the Company, regardless of the

-9-

 

geographic location of such business, and without any duty or obligation to account to the
other Members or the Company in connection therewith.

ARTICLE 3

CAPITAL STRUCTURE

     3.1 Percentage Interests. The Percentage Interests of the Members on the date hereof are
set forth on Schedule 3.1 hereto. Upon the transfer by a Member of all or a portion of
such Member’s Interest pursuant to Article 8 or the issuance of new Interests by the
Company in compliance with this Agreement, Schedule 3.1 shall be updated to reflect the
Percentage Interests of the Members immediately following such transfer.

     3.2 Capital Contributions. The Members shall make Capital Contributions of cash, property
or services as they determine and approve pursuant to Section 5.4. In the event that the
Members determine and approve pursuant to Section 5.4 that cash Capital Contributions
should be made for any purpose, the Members shall make such cash Capital Contributions in
proportion to their respective Percentage Interests in such amounts and on such dates as the
Members may determine. The Management Committee shall issue a written request to each Member for
payment of such cash Capital Contributions on such due dates and in such amounts as the Members
shall have determined; provided, that the due date for any such cash Capital Contribution shall be
no less than five (5) days after the date such written request is issued to the Members. All
Capital Contributions received by the Company after the due date specified in such written request
shall be accompanied by interest on such overdue amounts, which interest shall be payable to the
Company and shall accrue from and after such specified due dates until paid at the Default Rate.

     3.3 No Voluntary Contributions; Interest. No Member shall make any Capital Contributions
to the Company except pursuant to this Article 3. No Member shall be entitled to interest
on its Capital Contributions.

     3.4 Capital Accounts. A separate Capital Account shall be established and maintained for
each Member in accordance with the rules of Regulation section 1.704-1(b)(2)(iv), Section 4.1 and
the following terms and conditions:

     (a) Increases and Decreases. Each Member’s Capital Account shall be (i) increased by (A)
the amount of cash or cash equivalent Capital Contributions made by such Member, (B) the Net Agreed
Value of non-cash assets contributed as Capital Contributions by such Member, and (C) allocations
to such Member of Company income and gain (or items thereof), including, without limitation, income
and gain exempt from tax and income and gain described in Regulation section 1.704-1(b)(2)(iv)(g),
but excluding income and gain described in Regulation section 1.704-1(b)(4)(i); and (ii) shall be
decreased by (A) the amount of cash or cash equivalents distributed to such Member by the Company,
(B) the Net Agreed Value of any non-cash assets or other property distributed to such Member by the
Company, and (C) allocations to such Member of Company losses and deductions (or items thereof),
including losses and deductions described in Regulation section 1.704-1(b)(2)(iv)(g) (but excluding
losses or deductions described in Regulation section 1.704-1(b)(4)(i) or (iii)).

-10-

 

     (b) Computation of Amounts. For purposes of computing the amount of any item of income,
gain, loss or deduction to be reflected in the Members’ Capital Accounts, the determination,
recognition and classification of any such item shall be the same as its determination, recognition
and classification for federal income tax purposes (including, without limitation, any method of
depreciation, cost recovery or amortization used for that purpose), provided that:

     (i) All fees and other expenses incurred by the Company to promote the sale of (or to
sell) any interest that can neither be deducted nor amortized under section 709 of the Code,
if any, shall, for purposes of Capital Account maintenance, but treated as an item of
deduction at the time such fees and other expenses are required and shall be allocated among
the Members pursuant to Sections 4.1 and 4.2.

     (ii) Except as otherwise provided in Regulation section 1.704-1(b)(2)(iv)(m), the
computation of all items of income, gain, loss and deduction shall be made without regard to
any election under section 754 of the Code which may be made by the Company and, as to those
items described in section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to the
fact that such items are not includable in gross income or are neither currently deductible
nor capitalized for federal income tax purposes.

     (iii) Any income, gain or loss attributable to the taxable disposition of any Company
property shall be determined as if the adjusted basis of such property as of such date of
disposition were equal in amount to the Company’s Carrying Value with respect to such
property as of such date.

     (iv) In accordance with the requirements of section 704(b) of the Code, any deductions
for depreciation, cost recovery or amortization attributable to any Contributed Property
shall be determined as if the adjusted basis of such property on the date it was acquired by
the Company was equal to the Agreed Value of such property on the date it was acquired by
the Company. Upon an adjustment pursuant to Section 3.4(d) or 3.4(e) to the
Carrying Value of any Company property subject to depreciation, cost recovery or
amortization, any further deductions for such depreciation, cost recovery or amortization
attributable to such property shall be determined (A) as if the adjusted basis of such
property were equal to the Carrying Value of such property immediately following such
adjustment and (B) using a rate of depreciation, cost recovery or amortization derived from
the same method and useful life (or, if applicable, the remaining useful life) as is applied
for federal income tax purposes; provided, however, that if the asset has a zero adjusted
basis for federal income tax purposes, depreciation, cost recovery or amortization
deductions shall be determined using any reasonable method that the Company may adopt.

     (c) Transferees. A transferee of all or a part of a Member’s Interest shall succeed to
all or the transferred part of the Capital Account of the transferring Member.

     (d) Contributed Unrealized Gains and Losses. Consistent with the provisions of Regulation
section 1.704-1(b)(2)(iv)(f), on an issuance of additional Interests for cash or Contributed
Property, the Capital Accounts of all Members and the Carrying Value of each

-11-

 

Company property
immediately prior to such issuance shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Company property, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property
immediately prior to such issuance and had been allocated to the Members at such time pursuant to
Section 4.1.

     (e) Distributed Unrealized Gains and Losses. In accordance with Regulation section
1.704-1(b)(2)(iv)(f), immediately prior to any distribution to a Member of any Company property
(other than a distribution of cash or cash equivalents that are not in redemption or retirement of
a Member’s Interest), the Capital Accounts of all Members and the Carrying Value of each Company
property shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Company property, as if such Unrealized Gain or Unrealized Loss had been
recognized in a sale of such property immediately prior to such distribution for an amount equal to
its fair market value (which shall be determined by the Company using any valuation method it deems
reasonable under the circumstances), and had been allocated to the Members at such time, pursuant
to Section 4.1.

     (f) Code Compliance. Notwithstanding any provision in this Agreement to the contrary,
each Member’s Capital Account shall be maintained and adjusted in accordance with the Code and the
Regulations thereunder, including without limitation (i) the adjustments permitted or required by
Code Section 704(b) and, to the extent applicable, the principles expressed in Code Section 704(c)
and (ii) the adjustments required to maintain capital accounts in accordance with the “substantial
economic effect test” set forth in the Regulations under Code Section 704(b).

     3.5 Return of Capital. No Member shall have the right to demand a return of such Member’s
Capital Contributions (or the balance of such Member’s Capital Account). Further, no Member has
the right (i) to demand and receive any distribution from the Company in any form other than cash
or (ii) to bring an action of partition against the Company or its property. Neither the Members
nor the Management Committee shall have any personal liability for the repayment of the Capital
Contributions from Members. No Member is required to contribute or to lend any cash or property to
the Company to enable the Company to return any other Member’s Capital Contributions.

     3.6 Loans by Members. On or after the date of this Agreement, the Company may enter into a
credit agreement with The Williams Companies, Inc., the Parent of the Williams Member, as lender,
and the Company, as borrower, with a borrowing capacity of up to $20 million and substantially in
the form attached as Exhibit A hereto (the “Loan Agreement”). In addition, with
the consent of the other Members, any Member may lend funds to the Company for such purposes as are
specified in writing to, and approved by, the other Members, including for purposes of funding
capital expenditures or working capital; provided, however, that no Member may make such a loan as
an alternative to any capital contribution required under Section 3.2. A loan account
shall be established and maintained for such Member separate from such Member’s Capital Account and
any loan made to the Company shall be credited to such loan account. Interest on all loans shall
accrue at the Default Rate or at such other rate as may be approved by the Members and all advances
to the Company from such loan account shall be repaid prior to any distributions to the Members
pursuant to Section 4.3. A credit balance in

-12-

 

such loan account shall constitute a
liability of the Company; it shall not constitute a part of any Member’s Capital Account.

ARTICLE 4

ALLOCATIONS AND DISTRIBUTIONS

     4.1 Allocations for Capital Account Purposes. For purposes of maintaining the Capital
Accounts and in determining the rights of the Members among themselves, the Company’s items of
income, gain, loss and deduction (computed in accordance with Section 3.4(b)) shall be
allocated among the Members in each taxable year or portion thereof (an “allocation period”) as
provided herein below.

     (a) Net Income. All items of income, gain, loss and deduction taken into account in
computing Net Income for such allocation period shall be allocated to each of the Members in
accordance with its respective Percentage Interest.

     (b) Net Losses. All items of income, gain, loss and deduction taken into account in
computing Net Losses for such allocation period shall be allocated to each Member in accordance
with its respective Percentage Interest; provided, however, that Net Losses shall not be allocated
pursuant to this Section 4.1(b) to the extent that such allocation would cause a Member to
have a deficit balance in its Adjusted Capital Account at the end of such taxable year (or increase
any existing deficit balance in its Adjusted Capital Account).

     (c) Nonrecourse Liabilities. For purposes of Regulation section 1.752-3(a)(3), the
Members agree that Nonrecourse Liabilities of the Company in excess of the sum of (A) the amount of
Company Minimum Gain and (B) the total amount of Nonrecourse Built-in Gain shall be allocated among
the Members in accordance with their respective Percentage Interests.

     (d) Company Minimum Gain Chargeback. Notwithstanding the other provisions of this
Section 4.1, except as provided in Regulation section 1.704-2(f)(2) through (5), if there
is a net decrease in Company Minimum Gain during any Company taxable year, each Member shall be
allocated items of Company income and gain for such period (and, if necessary, subsequent periods)
in the manner and amounts provided in Regulation sections 1.704-2(f)(6) and (g)(2) and section
1.704-2(j)(2)(i), or any successor provisions. For purposes of this Section 4.1(d), each
Member’s Adjusted Capital Account balance shall be determined, and the allocation of income or gain
required hereunder shall be effected, prior to the application of any other allocations pursuant to
this Section 4.1 with respect to such taxable year (other than an allocation pursuant to
Section 4.1(h) or (i)).

     (e) Chargeback of Minimum Gain Attributable to Member Nonrecourse Debt. Notwithstanding
the other provisions of this Section 4.1 (other than Section 4.1(d), except as provided in
Regulation section 1.704-2(i)(4)), if there is a net decrease in Minimum Gain Attributable to
Member Nonrecourse Debt during any Company taxable period, any Member with a share of Minimum Gain
Attributable to Member Nonrecourse Debt at the beginning of such taxable period shall be allocated
items of Company income and gain for such period (and, if necessary, subsequent periods) in the
manner and amounts provided in Regulation sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any
successor provisions. For purposes of this Section 4.1,

-13-

 

each Member’s Adjusted Capital
Account balance shall be determined and the allocation of income or gain required hereunder shall
be effected, prior to the application of any other
allocations pursuant to this Section 4.1, other than Sections 4.1(d),
(h) and (i), with respect to such taxable period.

     (f) Qualified Income Offset. In the event any Member unexpectedly receives adjustments,
allocations or distributions described in Regulation section 1.704-1(b)(2)(ii)(d)(4) through (6)
(or any successor provisions), items of Company income and gain shall be specifically allocated to
such Member in an amount and manner sufficient to eliminate, to the extent required by the
Regulations promulgated under section 704(b) of the Code, the deficit balance, if any, in its
Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as
possible unless such deficit balance is otherwise eliminated pursuant to Section 4.1(d) or
4.1(e).

     (g) Gross Income Allocations. In the event any Member has a deficit balance in its
Adjusted Capital Account at the end of any Company taxable period which is in excess of the sum of
(i) the amount such Member is obligated to restore pursuant to any provisions of this Agreement and
(ii) the amount such Member is deemed obligated to restore pursuant to the penultimate sentences of
Regulations sections 1.704-2(g)(1) and 1.704-2(i)(5), such Member shall be specifically allocated
items of Company gross income and gain in the amount of such excess as quickly as possible;
provided that an allocation pursuant to this Section 4.1(g) shall be made only if and to
the extent that such Member would have a deficit balance in its Adjusted Capital Account after all
other allocations provided in this Section 4.1 have been tentatively made as if this
Section 4.1(g) was not in the Agreement.

     (h) Nonrecourse Deductions. Nonrecourse Deductions for any taxable year shall be
allocated to the Members in accordance with their respective Percentage Interests. If the Company
determines in its good faith discretion that the Company’s Nonrecourse Deductions must be allocated
in a different ratio to satisfy the safe harbor requirements of the Regulations promulgated under
section 704(b) of the Code, the Company is authorized, upon notice to the Members, to revise the
prescribed ratio to the numerically closest ratio which does satisfy such requirements.

     (i) Member Nonrecourse Deductions. Member Nonrecourse Deductions for any taxable year
shall be allocated 100% to the Member that bears the Economic Risk of Loss for such Member
Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with
Regulation section 1.704-2(i) (or any successor provision). If more than one Member bears the
Economic Risk of Loss with respect to a Member Nonrecourse Debt, such Member Nonrecourse Deductions
attributable thereto shall be allocated between or among such Members ratably in proportion to
their respective shares of such Economic Risk of Loss.

     (j) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis
of any Company asset pursuant to section 734(b) or 743(b) of the Code is required, pursuant to
Regulation section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and
such item of gain or loss shall be specially allocated to the Members

-14-

 

in a manner consistent with
the manner in which their Capital Accounts are required to be adjusted pursuant to such section of
the Regulations.

     4.2 Allocations for Tax Purposes. The Members agree as follows:

     (a) Allocations of Gain, Loss, etc. Except as otherwise provided herein, for federal
income tax purposes, each item of income, gain, loss and deduction which is recognized by the
Company for federal income tax purposes shall be allocated among the Members in the same manner as
its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Section
4.1 hereof.

     (b) Book-Tax Disparities. In an attempt to eliminate Book-Tax Disparities attributable to
a Contributed Property or Adjusted Property, items of income, gain, loss, depreciation,
amortization and cost recovery deductions shall be allocated for federal income tax purposes among
the Members as follows:

     (i) In the case of a Contributed Property, (A) such items of income, gain, loss,
depreciation, amortization and cost recovery deductions attributable thereto shall be
allocated among the Members in the manner provided under section 704(c) of the Code and
section 1.704-3(d) of the Regulations (i.e. the “remedial method”) that takes into account
the variation between the Agreed Value of such property and its adjusted basis at the time
of contribution; and (B) any item of Residual Gain or Residual Loss attributable thereto
shall be allocated among the Members in the same manner as is correlative item of “book”
gain or loss is allocated pursuant to Section 4.1.

     (ii) In the case of an Adjusted Property, (A) such items shall be allocated among the
Members in a manner consistent with the principles of section 704(c) of the Code and section
1.704-3(d) of the Regulations (i.e. the “ remedial method”) to take into account the
Unrealized Gain or Unrealized Loss attributable to such property and the allocations thereof
pursuant to Section 3.4(d) or (e), unless such property was originally a
Contributed Property, in which case such items shall be allocated among the Members in a
manner consistent with Section 4.2(b)(i); and (B) any item of Residual Gain or
Residual Loss attributable to an Adjusted Property shall be allocated among the Members in
the same manner as its correlative item of “book” gain or loss is allocated pursuant to
Section 4.1.

     (c) Conventions / Allocations. For the proper administration of the Company, the Company
shall (i) adopt such conventions as it deems appropriate in determining the amount of depreciation,
amortization and cost recovery deductions; and (ii) amend the provisions of this Agreement as
appropriate to reflect the proposal or promulgation of Regulations under section 704(b) or section
704(c) of the Code. The Company may adopt such conventions, make such allocations and make such
amendments to this Agreement as provided in this Section 4.2(c) only if such conventions,
allocations or amendments are consistent with the principles of section 704 of the Code.

     (d) Section 743(b). The Company may determine to depreciate the portion of an adjustment
under section 743(b) of the Code attributable to unrealized appreciation in any

-15-

 

Adjusted Property
(to the extent of the unamortized Book-Tax Disparity) using a predetermined rate derived from the
depreciation method and useful life applied to the Company’s common basis of such property, despite
the inconsistency of such method with Regulation section 1.167(c)-1(a)(6), or
any successor provisions. If the Company determines that such reporting position cannot
reasonably be taken, the Company may adopt any reasonable depreciation convention that would not
have a material adverse effect on the Members.

     (e) Recapture Income. Any gain allocated to the Members upon the sale or other taxable
disposition of any Company asset shall, to the extent possible, after taking into account other
required allocations of gain pursuant to this Section 4.2 be characterized as Recapture
Income in the same proportions and the same extent as such Members (or their predecessors in
interest) have been allocated any deductions directly or indirectly giving rise to the treatment of
such gains as Recapture Income.

     (f) Section 754. All items of income, gain, loss, deduction and credit recognized by the
Company for federal income tax purposes and allocated to the Members in accordance with the
provisions hereof shall be determined without regard to any election under section 754 of the Code
which may be made by the Company; provided, however, that such allocations, once made, shall be
adjusted as necessary or appropriate to take into account those adjustments permitted or required
by sections 734 and 743 of the Code.

     4.3 Distributions. Within thirty (30) days following the end of each Distribution Period,
an amount equal to 100% of Available Cash with respect to such Distribution Period shall, subject
to Section 18-607 of the Delaware Act, be distributed in accordance with this Article 4 by
the Company to the Members in accordance with their respective Percentage Interests.

ARTICLE 5

MANAGEMENT

     5.1 The Management Committee. The business and affairs of the Company shall be managed by
or under the direction of the Members acting through the Management Committee, subject to the
delegation of powers and duties to officers of the Company and other Persons as provided for by
resolution of the Management Committee.

     5.2 Composition; Removal and Replacement of Representative. The Management Committee
shall be comprised of one representative designated by each Member. Each Member shall designate by
written notice to the other Members a representative to serve on the Management Committee and one
alternate to serve in such representative’s absence. Each representative and alternate shall serve
at the pleasure of such Member and shall represent and bind such Member with respect to any matter.
Alternates may attend all Management Committee meetings but shall have no vote at such meetings
except in the absence of the representative for whom he is the alternate. Upon the death,
resignation or removal for any reason of any representative or alternate of a Member, the
appointing Member shall promptly appoint a successor.

-16-

 

     5.3 Officers. The Management Committee may appoint employees of Members or their
Affiliates to serve as officers of the Company, and such officers may include but not be limited to
president, one or more vice presidents, a treasurer and a secretary.

     5.4 Voting. All decisions, approvals and other actions of any Member under this Agreement
shall be effected by vote of its representative on the Management Committee. The Management
Committee representative of each Member shall have one vote equal to the Percentage Interest
of the Member appointing such representative and shall exercise such vote on behalf of such
appointing Member in connection with all matters under this Agreement.

     (a) All decisions and actions with respect to the Company and its business shall be made and
taken by the affirmative vote of the Members holding a Majority acting through their representative
on the Management Committee, except as provided in clauses (b) and (c) of this
Section 5.4.

     (b) In the case of those matters set forth on Schedule 5.4, any decision or action
with respect to such matters shall be made and taken by unanimous affirmative vote of Members
acting through their representatives on the Management Committee; provided, that the approval of
any such matter set forth on Schedule 5.4 by the MLP Member shall not require, and shall
not be inferred to require, that such matter be referred to, considered or approved by the
conflicts committee of the board of directors of the general partner of the MLP Member, it being
understood that conflicts of interest, if any, shall be addressed in the manner provided in the MLP
Partnership Agreement.

     (c) Notwithstanding clauses (a) and (b) of this Section 5.4, if (i) a material
default under a material agreement of the Company, (ii) a default on or failure to make payment of
an obligation of the Company or a failure to take other action is likely to result in the
imposition of a lien upon or a seizure or other collection action against a material asset or
assets of the Company or (iii) a failure to comply with an order of a Governmental Body having
jurisdiction directed to the Company, in each case, would be reasonably likely to have a material
adverse effect on the business, operations or financial condition of the Company, any Member may
require all of the Members to make a Capital Contribution pursuant to Section 3.2 hereof to
cure such default, pay such obligation, comply with such order or take other action in connection
therewith by delivering written notice to the other Members of its intent to require a Capital
Contribution pursuant to this Section 5.4(c); provided, the aggregate amount of such
required Capital Contribution may be no more than the minimum amount necessary to prevent a
default, seizure or noncompliance of the type described in clauses (i), (ii) and (iii) of this
paragraph.

     5.5 Meetings of Management Committee. The Members agree as follows:

     (a) Scheduling. Meetings of the Management Committee shall occur when called by any
member of the Management Committee. The member calling the meeting shall provide notice of and an
agenda for the Management Committee meeting to all representatives at least ten (10) Business Days
prior to the date of such meetings, provided that the business matters to be acted upon at any such
a meeting shall not be limited to the matters included on such agenda.

-17-

 

     (b) Conduct of Business. The Management Committee shall conduct its meetings in
accordance with such rules as it may from time to time establish and the secretary shall keep
minutes of its meetings and issue resolutions evidencing the actions taken by it. Upon the request
of any Member, the secretary shall provide such Member with copies of such minutes and resolutions.
Management Committee representatives may attend meetings and vote either in person or through duly
authorized written proxies. Unless otherwise agreed, all meetings of the Management Committee
shall be held at the principal office of the Company or by conference
telephone or similar means of communication by which all representatives can participate in
the meeting. Any action of the Management Committee may be taken without a meeting by unanimous
written consent of the representatives.

     (c) Quorum. At meetings of the Management Committee, representatives of (i) Members
holding a Majority present in person, by conference telephone or by written proxy and entitled to
vote, shall constitute a quorum for the transaction of business for purposes of considering matters
under Section 5.4(a) and (ii) all of the Members present in person, by conference telephone
or by written proxy and entitled to vote, shall constitute a quorum for the transaction of business
for purposes of considering matters under Section 5.4(b).

     5.6 Remuneration. The Management Committee representative and alternate employed by each
Member shall receive no compensation from the Company for performing services in such capacity.
Each Member shall be responsible for the payment of the salaries, benefits, retirement allowances
and travel and lodging expenses for its Management Committee representatives and alternates.

     5.7 Individual Action by Members. No individual Member, solely by reason of its status as
such, has any right to transact any business for the Company or any authority or power to sign for
or bind the Company unless such power or authority has been expressly delegated to such Member in
accordance with this Agreement; provided, however, that with respect to the enforcement of the
Company’s rights under any contract between the Company and a Member or an Affiliate of a Member,
any and all actions necessary to enforce the Company’s rights thereunder shall be taken exclusively
by the Members who are not, or whose Affiliate is not, party to such contract. Further, each
individual Member shall have the right to participate in audits by the Company of the Affiliates of
another Member which audits are made pursuant to contracts between the Company and such Affiliates.

ARTICLE 6

INDEMNIFICATION; LIMITATIONS ON LIABILITY

     6.1 Indemnification by the Company. The Company shall indemnify and hold harmless each
Member, the Management Committee representatives and alternates of each Member and the officers of
the Company (each individually, a “Company Indemnitee”) from and against any and all
losses, claims, demands, costs, damages, liabilities, expenses of any nature (including reasonable
attorneys’ fees and disbursements), judgments, fines, settlements, and other amounts actually and
reasonably incurred by such Company Indemnitee and arising from any threatened, pending or
completed claims, demands, actions, suits or proceedings, whether civil, criminal, administrative
or investigative or other, including any appeals, to which a Company Indemnitee was or is a party
or is threatened to be made a party (collectively,

-18-

 

“Liabilities”), arising out of or
incidental to the business of the Company or such Company Indemnitee’s status as a Member,
Management Committee representative or alternate of a Member or an officer of the Company;
provided, however, that the Company shall not indemnify and hold harmless any Company Indemnitee
for any Liabilities which are due to actual fraud or willful misconduct of such Company Indemnitee.

     (a) Rights of Company Indemnitee. Reasonable expenses incurred by a Company Indemnitee in
defending any claim, demand, action, suit or proceeding subject to this Section 6.1 shall,
from time to time, be advanced by the Company prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of such
Company Indemnitee to repay such amounts if it is ultimately determined that such Company
Indemnitee is not entitled to be indemnified as authorized in this Section 6.1. The
indemnification provided by this Section 6.1 shall inure solely to the benefit of the
Company Indemnitee and his heirs, successors, assigns and administrators and shall not be deemed to
create any rights for the benefit of any other Persons.

     6.2 Indemnification by the Members. Each Member shall indemnify and hold harmless the
Company, the other Members and their respective Management Committee representatives and alternates
and the officers of the Company (each individually, a “Member Indemnitee”) for any and all
Liabilities actually and reasonably incurred by such Member Indemnitee solely as a result of the
actual fraud or willful misconduct of such Member, its Management Committee representatives and
alternates or any officer of the Company employed by such Member or its Affiliates.

     6.3 Defense of Action. Promptly after receipt by a Company Indemnitee or a Member
Indemnitee (either, an “Indemnified Party”) of notice of any pending or threatened claim,
demand, action, suit, proceeding or investigation made or instituted by a Person other than another
Indemnified Party (a “Third Party Action”), such Indemnified Party shall, if a claim in
respect thereof is to be made by such Indemnified Party against a Person providing indemnification
pursuant to Sections 6.1 or 6.2 (“Indemnifying Party”), give notice thereof
to the Indemnifying Party. The Indemnifying party, at its own expense, may elect to assume the
defense of any such Third Party Action through its own counsel on behalf of the Indemnified Party
(with full right of subrogation to the Indemnified Party’s rights and defenses). The Indemnified
Party may employ separate counsel in any such Third Party Action and participate in the defense
thereof; but the fees and expenses of such counsel shall be at the expense of the Indemnified Party
unless the Indemnified Party shall have been advised by its counsel that there may be one or more
legal defenses available to it which are different from or additional to those available to the
Indemnifying Party (in which case the Indemnifying Party shall not have the right to assume the
defense of such Third Party Action on behalf of the Indemnified Party), it being understood,
however, that the Indemnifying Party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for the Indemnified Parties, and such
fees shall be designated in writing by the Indemnified Parties. All fees and expenses for any such
separate counsel shall be paid periodically as incurred. The Indemnifying Party shall not be
liable for any settlement of any such Third Party Action effected without its consent unless the
Indemnifying Party shall elect in writing not to assume the defense thereof or

-19-

 

fails to prosecute
diligently such defense and fails after written notice from the Indemnified Party to promptly
remedy the same, in which case, the Indemnified Party without waiving any rights to indemnification
hereunder may defend such Third Party Action and enter into any good faith settlement thereof
without the prior written consent from the Indemnifying Party. The Indemnifying Party shall not,
without the prior written consent of the Indemnified Party, effect any settlement of any such Third
Party Action unless such settlement includes an unconditional
release of the Indemnified Party from all Liabilities that are the subject of such Third Party
Action. The Members agree to cooperate in any defense or settlement of any such Third Party Action
and to give each other reasonable access to all information relevant thereto. The Members will
similarly cooperate in the prosecution of any claim or lawsuit against any third party. If, after
the Indemnifying Party elects to assume the defense of a Third Party Action, it is determined
pursuant to the Dispute Resolution procedures described in Section 12.11 that the
Indemnified Party is not entitled to indemnification with respect thereto, the Indemnifying Party
shall discontinue the defense thereof, and if any fees or expenses for separate counsel to
represent the Indemnified Party were paid by the Indemnifying Party, the Indemnified Party shall
promptly reimburse the Indemnifying Party for the full amount thereof.

     6.4 Limited Liability of Members. No Member shall be personally liable for any debts,
liabilities or obligations of the Company; provided that each Member shall be responsible (i) for
the making of any Capital Contribution required to be made to the Company by such Member pursuant
to the terms hereof and (ii) for the amount of any distribution made to such Member that must be
returned to the Company pursuant to the Delaware Act.

ARTICLE 7

OPERATION OF COMPANY

     7.1 Operator. Subject to this Article 7, the Members agree to appoint the
Williams Member as the operator of the Company (the “Operator”), and Williams Member
accepts such appointment and agrees to act in such capacity. The Operator shall be responsible for
the day-to-day operation, maintenance and repair of the Company Assets and the managerial and
administrative duties relating thereto. The Operator, in its sole discretion, may subcontract with
another Person, including an Affiliate, to perform the activities required to comply with its
responsibilities as Operator hereunder; provided, any such subcontract shall not relieve the
Operator of such responsibilities.

     7.2 Expenses. The Operator shall be reimbursed on a monthly basis, or such other basis as
the Operator may determine, for (a) all direct and indirect expenses it incurs or payments it makes
on behalf of the Company (including salary, bonus, incentive compensation and other amounts paid to
any Person including Affiliates of the Operator to perform services for the Company or for the
Operator in the discharge of its duties in such capacity), and (b) all other expenses allocable to
the Company or otherwise incurred by the Operator in connection with operating the Company’s
business (including the Company’s allocable share of general and administrative costs and expenses
borne by the Operator and its Affiliates). The Operator shall maintain or cause to be maintained
accurate records of such costs and expenses, and upon written request the Operator shall permit a
Member to inspect, or shall provide such requesting Member with a copies of, such records. The
Operator shall determine the expenses that are allocable to the Company. Reimbursements pursuant
to this Section 7.2 shall be in addition to any

-20-

 

reimbursement to the Operator as a result
of indemnification pursuant to Section 6.1. The Operator shall make such determination in
good faith.

     7.3 Accounts.

     The Management Committee shall establish and maintain one or more separate bank and investment
accounts and arrangements for Company funds in the Company’s name with such financial institutions
and firms it may determine. The Company may not commingle the Company’s funds with the funds of any
other Person. All such accounts shall be and remain the property of the Company and all funds shall
be received, held and disbursed for the purposes specified in this Agreement.

ARTICLE 8

TRANSFER OF INTERESTS

     8.1 Restrictions on Transfer. The Members agree as follows:

     (a) Consent. Subject to Sections 8.1(b) and 8.1(c) and except as provided
in Section 8.3(c), no Member may at any time sell, assign, transfer, convey, merge,
consolidate, reorganize or otherwise dispose of all or any part of such Member’s interest without
the express written consent of the other Members, which consent may be granted or withheld by any
such other Members in its absolute discretion; provided, however, that subject to Sections
8.1(b) and 8.1(c), and upon notice to the other Members, any Member may transfer its
respective Interest to one or more Persons (an “Internal Transferee”) wholly owned directly
or indirectly by the ultimate parent of such Member (an “Internal Transfer”) without the
consent of the other Members, and such Internal Transferee shall be admitted as a Member.

     (b) Certain Prohibited Transfers. No Member shall transfer all or any part of its
Interest if such transfer (i) (either considered alone or in the aggregate with prior transfers by
the same Member or any other Members) would result in the termination of the Company for federal
income tax purposes; (ii) would result in violation of the Delaware Act or any other applicable
Laws; or (iii) would result in a Default under or termination of an existing financial agreement to
which the Company is a party or acceleration of debt thereunder.

     (c) Defaulting_Members. No Defaulting Member may transfer its Interest except (i) as
expressly provided under Article 8, and (ii) with the consent of the Nondefaulting Members.

     (d) Effect of Prohibited Transfers. Any offer or purported transfer of a Member’s
Interest in violation of the terms of this Agreement shall be void.

     8.2 Possible Additional Restrictions on Transfer. Notwithstanding anything to the
contrary contained in this Agreement, in the event of (i) the enactment (or imminent enactment) of
any legislation, (ii) the publication of any temporary or final Regulation, (iii) any ruling by the
Internal Revenue Service or (iv) any judicial decision that in any such case, in the opinion of
counsel, would result in the taxation of the Company for federal income tax purposes as a
corporation or would otherwise subject the Company to being taxed as an entity for federal income
tax purposes, this Agreement shall be deemed to impose such restrictions on the transfer of a
Member’s Interest as may be required, in the opinion of counsel to the Company, to prevent

-21-

 

the Company from being taxed as a corporation or otherwise being taxed as an entity for federal income
tax purposes, and the Members thereafter shall amend this Agreement as necessary or appropriate to
impose such restrictions.

     8.3 Right of First Offer. The Members agree as follows:

     (a) Initial Offer to Members. In the event that a Member (the “Selling Member”)
desires to sell or otherwise transfer all or a portion of its Interest (the “Marketed
Interest”) other than pursuant to an Internal Transfer, such Selling Member shall submit to
each of the other Members (the “Non-Selling Members”) a good faith offer (a “Sale
Offer”), which Sale Offer shall include a form of acquisition agreement that specifies the form
and amount of consideration to be received and the other material terms on which the Selling Member
proposes to sell the Marketed Interest. Upon receipt of a Sale Offer, a Non-Selling Member
interested in purchasing all of such Marketed Interest shall deliver written notice (a
“Purchase Notice”) to the Selling Member within 20 days of receipt of such Sale Offer (the
“Notice Period”). Upon the expiration of such Notice Period, the Selling Member and any
Non-Selling Members that timely delivered a Purchase Notice to the Selling Member shall have 45
days (the “Negotiation Period”) to negotiate and enter into a definitive agreement pursuant
to which such Non-Selling Member(s) will acquire the Marketed Interest. If the parties enter into
a definitive agreement within such Negotiation Period, the Non-Selling Member shall acquire the
Marketed Interest pursuant to the terms of such definitive agreement. The closing under any such
definitive agreement may occur after the expiration of such Negotiation Period. If more the one
Non-Selling Member delivers a Purchase Notice to the Selling Member, each such Non-Selling Member
shall be entitled to acquire a pro rata portion of the Marketed Interest determined by dividing
such Non-Selling Member’s Percentage Interest by the aggregate Percentage Interests of all of the
Non-Selling Members that delivered a Purchase Notice.

     (b) Negotiation with Third Party. If (i) no Non-Selling Member delivers a Purchase Notice
to the Selling Member prior to the expiration of the Notice Period, (ii) the Non-Selling Member(s)
and the Selling Member are unable to enter into a definitive agreement prior to the expiration of
the Negotiation Period, or (iii) a definitive agreement is timely entered into but is subsequently
terminated prior to closing, then the Selling Member shall have 120-days to market, offer,
negotiate and consummate the sale the Marketed Interest to a third party; provided, however, the
Selling Member may not consummate any such sale to a third party unless (i) the acquisition
consideration to be paid by such third party is at least equal in value to the consideration set
forth in the Sale Offer and (ii) the other terms and provisions of such sale are not materially
more favorable to such third party than the terms and provisions contained in the Sale Offer. If
the Selling Member is unable to consummate the sale of the Marketed Interest to a third party
within the 120-day period referred to in the immediately preceding sentence, such Selling Member
must make another Sale Offer to each of the Non-Selling Members, as provided in Section
8.3(a), and otherwise comply with the provisions of this Section 8.3 in order to sell
such Marketed Interest.

     (c) Applicability of Transfer Restrictions. All transfers pursuant to this Section
8.3 must comply with the restrictions on transfers set forth in Sections 8.1 and
8.2, except that a transfer to a third party after compliance with this Section 8.3
shall not require the consent of the Non-Selling Members and the restriction in Section
8.1(b)(i) shall not apply.

-22-

 

     8.4 Substituted Members. As of the effectiveness of any transfer of an Interest permitted
under this Agreement, (i) any transferee acquiring the Interest of a Member shall be deemed
admitted as a substituted Member with respect to the Interest transferred, and (ii) such
substituted Member shall be entitled to the rights and powers and subject to the restrictions and
liabilities of the transferring Member with respect to the Interest so acquired. No purported
transfer of an Interest in violation of the terms of this Agreement (including any transfer
occurring by operation of Law) shall vest the purported transferee with any rights, powers or
privileges hereunder, and no such purported transferee shall be deemed a Member hereunder for any
purposes or have any right to vote or consent with respect to Company matters, to inspect Company
records, to maintain derivative proceedings, to maintain any action for an accounting or to
exercise any other rights of a Member hereunder or under the Delaware Act.

     8.5 Documentation; Validity of Transfer. No purported transfer of a Member’s Interest
shall be effective as to the Company or the other Members unless and until the applicable
provisions of Sections 8.1, 8.2 and 8.3 have been satisfied and such other
Members have received a document in a form acceptable to such other Members executed by both the
transferring Member (or its legal representative) and the transferee. Such document shall include:
(i) the notice address of the transferee and such transferee’s express agreement to be bound by all
of the terms and conditions of this Agreement with respect to the Interest being transferred; (ii)
the Interests of the transferring Member and the transferee after the transfer; and (iii)
representations and warranties from both the transferring Member and the transferee that the
transfer was made in accordance with all applicable Laws (including state and federal securities
Laws) and the terms and conditions of this Agreement. Each transfer shall be effective against the
Company and the other Members as of the first Business Day of the calendar month immediately
succeeding the Company’s receipt of the document required by this Section 8.5, and the
applicable requirements of Sections 8.1, 8.2 and 8.3 have been met.

     8.6 Covenant Not to Withdraw or Dissolve. Notwithstanding any provision of the Delaware
Act, each Member hereby agrees that it has entered into this Agreement based on the expectation
that all Members will continue as Members and carry out the duties and obligations undertaken by
them hereunder. Except as otherwise expressly required or permitted hereby, each Member hereunder
covenants and agrees not to (i) take any action to file a certificate of dissolution or its
equivalent with respect to itself, (ii) take any action that would cause a Bankruptcy of such
Member, (iii) cause or permit an interest in itself to be transferred such that, after the
transfer, the Company would be considered to have terminated within the meaning of section 708 of
the Code (provided that, each Member may transfer all or part of its Interest to a publicly traded
partnership (or its subsidiaries) or an entity that may become a publicly traded partnership, even
if such transfer, either considered alone or in the aggregate with prior transfers by the same
Member or any other Members, would result in the termination of the Company for federal income tax
purposes), (iv) withdraw or attempt to withdraw from the Company, except as otherwise expressly
permitted by this Agreement or the Delaware Act, (v) exercise any power under the Delaware Act to
dissolve the Company, (vi) transfer all or any portion of its Interest, except as expressly
provided herein, or (vii) demand a return of such Member’s contributions or profits (or a bond or
other security for the return of such contributions or profits), in each case without the consent
of the other Members.

-23-

 

ARTICLE 9

DEFAULT

     9.1 Events of Default. If any of the following events occurs (each an “Event of
Default”):

     (a) the Bankruptcy, insolvency, dissolution, liquidation, death, retirement, resignation,
termination, expulsion of a Member or the occurrence of any other event under the Delaware Act
which terminates the continued membership of a Member in the Company;

     (b) all or any part of the Interest of a Member is seized by a creditor of such Member, and
the same is not released from seizure or bonded out within 30 days from the date of notice of
seizure;

     (c) a Member (i) fails to provide any Capital Contribution requested by a Member pursuant to
Section 5.4(c) or as otherwise required by Article 3, (ii) fails to indemnify or
reimburse the other Members for the liabilities and obligations as set forth in this Agreement or
(iii) fails to perform or fulfill when due any other material financial or monetary obligation
imposed on such Member in this Agreement and, in each case, such failure continues for 15 days or
such shorter period as may be specified for a Default under such agreement relating to borrowed
money (each of the foregoing, a “Monetary Default”);

     (d) a member Defaults or otherwise fails to perform or fulfill any material covenant,
provision or obligation (other than financial or monetary obligations, with are covered in
Section 9.1(c)) under this Agreement or any agreement relating to borrowed money to which
the Company is a party and such failure continues for 30 days or such shorter period as may be
specified for a Default under such agreement relating to borrowed money;

     (e) a Member transfers or attempts to transfer all or any portion of its Interest in the
Company other than in accordance with the terms of this Agreement;

     (f) a Change of Ownership occurs with respect to the Williams Member; provided, however, that,
notwithstanding the foregoing or any other provision of this Agreement to the contrary, none of the
following events shall be deemed to constitute Changes of Ownership:

     (i) a Change of Ownership of the Parent of the Williams Member;

     (ii) a change of ownership of all or substantially all of the midstream assets of the
Parent of the Williams Member (including all of the Williams Member’s Interest);

then a “Default” hereunder shall be deemed to have occurred and the Member with respect to
which one or more Events of Default has occurred shall be referred to as the “Defaulting
Member”, and the other Members shall be referred to as “Nondefaulting Members.”

-24-

 

     9.2 Consequences of Default. The Members agree as follows:

     (a) Suspension of Distributions in the case of Monetary Default. Notwithstanding anything
in this Agreement to the contrary, no distribution shall be made to any Defaulting Member who is in
Monetary Default pursuant to Section 9.1(c). So long as any Monetary Default is
continuing, the Defaulting Member assigns to the Nondefaulting Members (in proportion to the
Nondefaulting Members’ Percentage Interests) its right to receive any and all distributions under
this Agreement and such distributions shall be paid to the Nondefaulting Members. The Defaulting
Member shall also compensate the Nondefaulting Members for losses, damages, costs and expenses
resulting directly or indirectly from such Monetary Default. If the Defaulting Member shall
dispute whether an Event of Default has occurred, or the amount of the loss, damage, cost or
expense incurred by the Nondefaulting Members as a consequence of a Monetary Default, the matter
shall be submitted promptly to the dispute resolution procedure provided for in Section
12.11 hereof.

     (b) Options of Nondefaulting Members. In the event of the occurrence of certain Events of
Default as specified below, the Nondefaulting Members may take one or more of the following
actions:

     (i) cure the Default and cause the cost of such cure to be charged against a special
loan account established for the Defaulting Member until the entire amount of such cost plus
interest on the unpaid balance in accordance with Section 3.2 shall have been paid
or reimbursed to the Nondefaulting Members from any subsequent distributions made pursuant
to this Agreement to which the Defaulting Member would otherwise have been entitled, which
amounts shall be paid first as interest and then principal, until the cost is paid in full;
and

     (ii) exercise any other rights and remedies available at law or in equity, subject to
Section 12.11.

ARTICLE 10

DISSOLUTION AND LIQUIDATION

     10.1 Dissolution. The Company shall be dissolved upon the earliest to occur of the
following:

     (a) all or substantially all of the Company’s assets and properties have been sold and reduced
to cash;

     (b) the written consent of each Member; or

     (c) entry of a decree of judicial dissolution of the Company under Section 18-802 of the
Delaware Act.

The Members expressly recognize the right of the Company to continue in existence upon the
occurrence of an Event of Default specified in Section 9.1(a) unless the Nondefaulting
Members elect to dissolve the Company pursuant to this Section 10.1.

-25-

 

     10.2 Liquidation. The Members agree as follows:

     (a) Procedures. Upon dissolution of the Company, the Management Committee, or if there
are no remaining Management Committee representatives, such Person as is designated by the Members
(the remaining Management Committee or such Person being herein referred to as the
“Liquidator”) shall proceed to wind up the business and affairs of the Company in
accordance with the terms hereof and the requirements of the Delaware Act. A reasonable amount of
time shall be allowed for the period of winding up in light of prevailing market conditions and so
as to avoid undue loss in connection with any sale of Company assets. This Agreement shall remain
in full force and effect during the period of winding up.

     (b) Distributions. In connection with the winding up of the Company, the Company Assets
or proceeds thereof shall be distributed as follows:

     (i) To creditors, including Members who are creditors, to the extent otherwise
permitted by Law, in satisfaction of liabilities of the Company (whether by payment or the
making of reasonable provision for payment thereof) other than liabilities for which
reasonable provision for payment has been made and liabilities to Members and former Members
under Sections 18-601 and 18-604 of the Delaware Act;

     (ii) To Members and former Members in satisfaction of liabilities for distributions
under Sections 18-601 and 18-604 of the Delaware Act; and

     (iii) all remaining Company Assets shall be distributed to the Members as follows:

     (A) the Liquidator may sell any or all Company Assets, including to one or more
of the Members (other than any Member in Default at the time of dissolution), and
any resulting gain or loss from each sale shall be computed and allocated to the
Capital Accounts of the Members in accordance with Article 4;

     (B) with respect to all Company Assets that have not been sold, the fair market
value of such Company Assets (as determined by the Liquidator using any method of
valuation as it, using its best judgment, deems reasonable) shall be determined and
the Capital Accounts of the Members shall be adjusted in accordance with Article
4 to reflect the manner in which the unrealized income, gain, loss, and
deduction inherent in such Company Assets that have not been reflected in the
Capital Accounts previously would be allocated among the Members if there were a
taxable disposition of such Company Assets for their fair market value on the date
of distribution;

     (C) Company Assets shall be distributed among the Members ratably in proportion
to each Member’s positive Capital Account balances, as determined after taking into
account all Capital Account adjustments for the taxable year of the Company during
which the liquidation of the Company occurs (other than those made by reason of this
clause (C)); and in each case, those distributions shall be made by the end of the
taxable year of the Company during which the

-26-

 

liquidation of the Company occurs (or,
if later, 90 days after the date of the liquidation); and

     (D) All distributions in kind to the Members shall be made subject to the
liability of each distributee for costs, expenses, and liabilities theretofore
incurred or for which the Company has committed prior to the date of termination and
those costs, expenses, and liabilities shall be allocated to the distributee
pursuant to this Section 10.2(b)(iii). The distribution of Company Assets
to a Member in accordance with the provisions of this Section 10.2(b)(iii)
constitutes a complete return to the Member of its Capital Contributions and a
complete distribution to the Member of its Interest and all the Company Assets.

     (c) Capital Account Deficits; Termination. To the extent that any Member has a deficit in
its Capital Account, upon dissolution of the Company such deficit shall not be an asset of the
Company and such Members shall not be obligated to contribute any amounts to the Company to bring
the balance of such Member’s Capital Account to zero. Following the completion of the winding up
of the affairs of the Company and the distribution of Company Assets, the Company shall be deemed
terminated and the Liquidator shall file a certificate of cancellation in the Office of the
Secretary of State of the State of Delaware as required by the Delaware Act.

ARTICLE 11

FINANCIAL MATTERS

     11.1 Books and Records. The Company shall maintain or cause to be maintained accurate and
complete books and records, on the accrual basis, in accordance with GAAP (which, having been
adopted, shall not be changed without the prior written consent of the Members), showing all costs,
expenditures, sales, receipts, assets and liabilities and profits and losses and all other records
necessary, convenient or incidental to recording the Company’s business and affairs; provided,
however, that the Members’ Capital Accounts shall be maintained in accordance with Section
3. All of such books and records of the Company shall be open to inspection by each Member or
its designated representative at the inspecting Member’s expense at any reasonable time during
business hours and shall be audited every year by a joint audit team consisting of representatives
from each Member. Each Member shall be responsible for all costs incurred by or associated with
its respective representatives on such joint audit team.

     11.2 Financial Reports; Budget.

     (a) No later than 25 days following the last day of each calendar quarter, the Company shall
cause each Member to be furnished with a balance sheet, an income statement and a statement of cash
flows for, or as of the end of such calendar quarter. The Management Committee shall cause each
Member to be furnished with audited financial statements no later than 60 days following the last
day of each fiscal year, including a balance sheet, an income statement, a statement of cash flows,
and a statement of changes in each Member’s GAAP Capital Account as of the end of the immediately
preceding Fiscal Year. The Management Committee also may cause to be prepared or delivered such
other reports as it may deem in its

-27-

 

sole judgment, appropriate. The Company shall bear the costs
of the preparation of the reports and financial statements referred to in this Section
11.2(a).

     (b) Upon request of a Member, the Company will prepare and deliver to any such Member or its
Parent all of such additional financial statements, notes thereto and additional
financial information not prepared pursuant to Section 11.2(a) above as may be
required in order for such Member or Parent to comply with its reporting requirements under (i) the
Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, (ii) the
Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder
and (iii) any national securities exchange or automated quotation system, in each case, on a timely
basis. All of such financial statements must be prepared in accordance with GAAP.

     (c) Prior to the beginning of each fiscal year, the Company shall prepare and submit to the
Management Committee for approval by unanimous vote a business plan for the upcoming fiscal year,
including capital and operating expense budgets and operating income projections; provided, that
the unanimous vote of the Management Committee shall not be required for the Company with respect
to items not covered by such business plan unless otherwise required by Schedule 5.4.

     11.3 Accounts. The Company shall establish and maintain one or more separate bank and
investment accounts and arrangements for Company funds in the Company’s name with such financial
institutions and firms as the Management Committee may determine. The Company may not commingle
the Company’s funds with the funds of any other Person. All such accounts shall be and remain the
property of the Company and all funds shall be received, held and disbursed for the purposes
specified in this Agreement.

     11.4 Tax Matters. The Members agree as follows:

     (a) Tax Matters Partner. The Williams Member shall be designated as the “Tax Matters
Partner” pursuant to Code Section 6231(a)(7) and the Regulations promulgated thereunder. The
Tax Matters Partner shall be responsible for all tax compliance and audit functions related to
federal, state, and local tax returns of the Company. The Tax Matters Partner is specifically
directed and authorized to take whatever steps such Member, in its discretion, deems necessary or
desirable to perfect such designation, including filing any forms or documents with the Internal
Revenue Service and taking such other action as may be from time to time required. The Tax Matters
Partner shall not be liable to the Company or the Members for any act or omission taken or suffered
by it in its capacity as Tax Matters Partner in good faith in the belief that such act or omission
is in accordance with the directions of the Management Committee; provided that such act or
omission is not in willful violation of this Agreement and does not constitute fraud or a willful
violation of law.

     (b) Tax Information. Upon written request of the Tax Matters Partner, the Company and
each Member shall furnish to the Tax Matters Partner, all pertinent information in its possession
relating to the Company operations that is necessary to enable the Tax Matters Partner to file all
federal, state, and local tax returns of the Company.

-28-

 

     (c) Tax Elections. The Company shall make the following elections on the appropriate tax
returns:

     (i) to adopt the accrual method of accounting;

     (ii) an election pursuant to section 754 of the Code; and

     (iii) any other election that a Majority may deem appropriate.

It is the expressed intention of the Members hereunder to be treated as a partnership for federal
and state tax purposes. Neither the Company nor any Member may make an election for the Company to
be excluded from the application of the provisions of subchapter K of chapter 1 of subtitle A of
the Code or any similar provisions of applicable state law, and no provision of this Agreement
shall be construed to sanction or approve such an election.

     (d) Notices. The Tax Matters Partner shall take such action as may be necessary to cause
each Member to become a “notice partner” within the meaning of section 6223 of the Code and shall
inform each Member of all significant matters that may come to its attention in its capacity as Tax
Matters Partner by giving notice thereof on or before the tenth Business Day after becoming aware
thereof and, within that time, shall forward to each other Member copies of all significant written
communications it may receive in that capacity. The Tax Matters Partner may not take any action
contemplated by sections 6222 through 6232 of the Code without the consent of a Majority.

     (e) Filing of Returns. The Tax Matters Partner shall file all tax returns in a timely
manner, provide all Members, upon request, access to accounting and tax information and schedules
as shall be necessary for the preparation of such Member of its income tax returns and such
Member’s tax information reporting requirements, provide all Members with a draft of the return for
their review and comment no later than February 1st of the year following, and provide all Members
with a final return for the preparation of their federal and state returns no later than September
1st of the year following.

ARTICLE 12

MISCELLANEOUS

     12.1 Notices. All notices, consents, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given or delivered on the date of receipt
if (a) delivered personally; (b) telecopied or telexed with transmission confirmed; (c) mailed by
registered or certified mail return receipt requested; or (d) delivered by a recognized commercial
courier to the Member as follows (or to such other address as any Member shall have last designated
by written notice to the other Members):

If to the Company:

Williams Four Corners LLC

One Williams Center

Tulsa, Oklahoma 74172

Attention: Senior Vice President

-29-

 

Fax: 918-573-9375

Phone: 918-573-2000

If to the Williams Member:

Williams Field Services Company, LLC

One Williams Center

Tulsa, Oklahoma 74121

Attention: Senior Vice President

Fax: 918-573-9375

Phone: 918-573-2000

If to the MLP Member:

Williams Partners Operating LLC

One Williams Center

Tulsa, Oklahoma 74121

Attention: Chief Financial Officer of Williams Partners GP LLC

Fax: 918-573-9375

Phone: 918-573-2000

     12.2 Amendment. This Agreement, including this Section 12.2 and the Schedules and
Exhibits hereto, shall not be amended or modified except by an instrument in writing signed by or
on behalf of all of the Members.

     12.3 Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the Laws of the State of Delaware as applied to contracts made and performed within
the State of Delaware, without regard to principles of conflict of Laws.

     12.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the
Members and their respective permitted successors and assigns.

     12.5 No Third Party Rights. Nothing in this Agreement shall create or be deemed to create
any third party beneficiary rights in any Person or entity not party to this Agreement, except (i)
the Company Indemnitees and Member Indemnitees are third party beneficiaries to Article 6 of this
Agreement and their rights are subject to the terms of such Article 6 and (ii) as provided
in Section 11.2(b).

     12.6 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument.

     12.7 Invalidity. If any of the provisions of this Agreement, including the Schedules, is
held invalid or unenforceable, such invalidity or unenforceability shall not affect in any way the
validity or enforceability of any other provision of this Agreement. In the event any provision is
held invalid or unenforceable, the Members shall attempt to agree on a valid or enforceable
provision which shall be a reasonable substitute for such invalid or unenforceable provision in

-30-

 

light of the tenor of this Agreement and, on so agreeing, shall incorporate such substitute
provision in this Agreement.

     12.8 Entire Agreement. This Agreement, including the Schedules, contains the entire
agreement among the Members hereto with respect to the subject matter hereof and all prior or
contemporaneous understandings and agreements shall merge herein. There are no additional
terms, whether consistent or inconsistent, oral or written, which are intended to be part of
the Members’ understandings which have not been incorporated into this Agreement or the Schedules.

     12.9 Expenses. Except as the Members may otherwise agree or as otherwise provided herein,
each Member shall bear its respective fees, costs and expenses in connection with this Agreement
and the transactions contemplated hereby.

     12.10 Waiver. No waiver by any Member, whether express or implied, of any right under any
provision of this Agreement shall constitute a waiver of such Member’s right at any other time or a
waiver of such Member’s rights under any other provision of this Agreement unless it is made in
writing and signed by the President or a Vice President of the Member waiving the condition. No
failure by any Member hereto to take any action with respect to any breach of this Agreement or
Default by another Member shall constitute a waiver of the former Member’s right to enforce any
provision of this Agreement or to take action with respect to such breach or Default or any
subsequent breach or Default by such later Member.

     12.11 Dispute Resolution.

     (a) Scope. Any dispute arising out of or relating to this Agreement shall be resolved in
accordance with the procedures specified in this Section 12.11, which shall be the sole and
exclusive procedures for the resolution of any such disputes.

     (b) Senior Party Negotiation. The Members shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by negotiation between management
representatives who have authority to settle the controversy and who are at least one level above
the persons with direct responsibility for administration of this Agreement and who have been
unsuccessfully involved with the dispute up to this point. Any Member may give the other Member
written notice of any dispute not resolved in the normal course of business (“Notice of
Dispute”). Within 20 days after delivery of the Notice of Dispute, the receiving Member shall
submit to the other a written response. The notice and the response shall include (a) a statement
of each Member’s position and a summary of arguments supporting that position, and (b) the name and
title of the officer or executive who will represent that Member and of any other person who will
accompany such officer or executive. Within 20 days after delivery of the disputing Member’s
Notice of Dispute, the representatives of both Member 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 negotiations pursuant to this clause are confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of evidence.

-31-

 

     (c) Litigation. If the dispute has not been resolved by non-binding means as provided
herein within 20 days of the initiation of such procedure, either Member may initiate litigation;
provided, however, that if one Member has requested the other to participate in a non-binding
procedure and the other has failed to participate, the requesting Member may initiate litigation
before expiration of the above period.

     (d) Sole Procedures. The procedures specified in this Section 12.11 shall be the
sole and exclusive procedures for the resolution of disputes between the parties arising out of or
relating to this Agreement. Each party is required to continue to perform its obligations under
this Agreement pending final resolution of any dispute arising out of or relating to this
Agreement, unless to do so would be impossible or impracticable under the circumstances. The
requirements of this Section 12.11 shall not be deemed a waiver of any right of termination
under this Agreement.

     12.12 Disclosure. Each Member is acquiring its Interest in the Company based upon its own
independent investigation, and the exercise by such Member of its rights and the performance of its
obligations under this Agreement are based upon its own investigation, analysis and expertise.
Each Member’s acquisition of its Interest in the Company is being made for its own account for
investment, and not with a view to the sale or distribution thereof.

     12.13 Brokers and Finder. All negotiations relating to this Agreement and the transactions
contemplated hereby have been carried on without the intervention of any Person acting on behalf of
any Member in such manner as to give rise to any valid claim against any Member for any brokerage
or finder’s commission, fee or similar compensation.

     12.14 Further Assurances. The Members shall provide to each other such information with
respect to the transactions contemplated hereby as may be reasonably requested and shall execute
and deliver to each other such further documents and take such further action as may be reasonably
requested by any Member to document, complete or give full effect to the terms and provisions of
this Agreement and the transactions contemplated herein.

     12.15 Section Headings. The section headings in this Agreement are for convenience of
reference only and shall not be deemed to alter or affect the interpretation of any provision
hereof.

     12.16 Waiver of Certain Damages. Each of the Members (individually, and on behalf of the
Company) waives any right to recover any damages, including consequential or punitive damages, in
excess of actual damages from any other Member or the Company in connection with a default under
this Agreement.

     12.17 Certificates of Interest. The Interests of the Members in the Company shall be
represented by Certificates (“Certificates”), which shall certify the Percentage Interest
held by such Member. Subject to the laws of Delaware and the terms of this Agreement, Interests in
the Company shall be transferable only upon the books of the Company by the holders thereof, upon
surrender and cancellation of certificates for such Interest transferred, with a duly executed
assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the
authenticity of the signature to such assignment and power of transfer as the Company or its

-32-

 

agents may reasonably require. All transfers and assignments shall be subject to the provisions of
Article 8 and the other provisions of this Agreement. The Company may issue a new
certificate in place of any certificate previously issued by it and alleged to have been lost,
stolen or destroyed.

* * * * *

-33-

 

     IN WITNESS WHEREOF, the Members hereto have executed this Agreement as of June 20, 2006, to be
effective as of the Effective Date.

	 	 	 	 	 
	 	 	WILLIAMS FIELD SERVICES COMPANY, LLC
	 
	 	 	 	 
	 

	 	By:	 	/s/ Alan S. Armstrong 
	 

	 	 	 	 
	 

	 	Name:
	 	Alan S. Armstrong
	 

	 	Title:
	 	Senior Vice President
	 
	 	 	 	 
	 	 	WILLIAMS PARTNERS OPERATING LLC
	 
	 	 	 	 
	 

	 	By:
	 	Williams Partners L.P., its managing member
	 
	 	 	 	 
	 

	 	By:
	 	Williams Partners GP LLC, its general partner
	 
	 	 	 	 
	 

	 	By:	 	/s/ Donald R. Chappel 
	 

	 	 	 	 
	 

	 	Name:
	 	Donald R. Chappel
	 

	 	Title:
	 	Chief Financial Officer

Amended and Restated Limited Liability Company Agreement

of Williams Four Corners LLC

 

 

SCHEDULE 3.1

	 	 	 
	Member	 	Percentage Interest
	Williams Partners Operating LLC
	 	25.1%
	 
	 	 
	Williams Field Services Company, LLC
	 	74.9%

SCHEDULE 3.1 — Page 1

 

 

SCHEDULE 5.4

     Pursuant to Section 5.4(b), the following is a list of matters requiring a unanimous
vote of the Management Committee for approval:

	1.	 	The sale, assignment, transfer, lease or other disposition of all or any portion of the
Company Assets for consideration in excess of $20,000,000 in the aggregate.
	 
	2.	 	The purchase or other acquisition of any asset or business of, any equity interest in, or any
investment in, any Person for consideration in excess of $20,000,000 in the aggregate.
	 
	3.	 	The Company canceling, compromising, waiving, releasing or settling of any right, claim or
lawsuit for an amount in excess of $20,000,000.
	 
	4.	 	The filing by the Company of any material lawsuit.
	 
	5.	 	The undertaking by the Company of any capital project in excess of $20,000,000, other than
(a) reasonable capital expenditures in connection with any emergency or force majeure events
or (b) as contemplated by the capital budget prepared and approved in accordance with the
provisions of Section 11.2.
	 
	6.	 	The issuance, incurrence, guarantee or assumption of any indebtedness by the Company (except
amounts borrowed under the Loan Agreement).
	 
	7.	 	The issuance or sale of any equity interests of the Company or any option, warrant or other
security convertible into or exercisable for any equity interests of the Company.
	 
	8.	 	The redemption, repurchase or other acquisition of any equity interests of the Company.
	 
	9.	 	The Company making any distributions (whether in cash or otherwise) with respect to the
Membership Interests (except as provided in Section 4.3).
	 
	10.	 	The Company entering into, amending, terminating, canceling or renewing any material
contracts outside the ordinary course of business.
	 
	11.	 	The Company engaging in any transaction with an Affiliate of the Company; provided, that the
foregoing shall not apply to transactions or contracts in effect on the date of this Agreement
or, in the ordinary course of business, transactions on commercially reasonable terms for the
provision of natural gas gathering, processing, treating or marketing services or for the
purchase of power or natural gas for fuel or system requirements..
	 
	12.	 	The Company merging or consolidating with another Person.
	 
	13.	 	The Company making any loan to any Person (other than extensions of credit to customers in
the ordinary course of business and intercompany loans under The Williams Companies, Inc. cash
management system)

SCHEDULE 5.4 — Page 1

 

 

	14.	 	A call for capital contributions by the Members, except as provided in Section 5.4(c)
the Agreement.
	 
	15.	 	Any amendment to this Agreement or the Certificate of Formation of the Company.
	 
	16.	 	Any liquidation, dissolution, recapitalization or other winding up of the Company.
	 
	17.	 	The Company making any material change in any method of accounting or accounting principles,
practices or policies, other than those required by GAAP or applicable law.
	 
	18.	 	The Company making, amending or revoking any material election with respect to taxes.
	 
	19.	 	Acquiring, commencing or conducting any activity or business that may generate income for
federal income tax purposes that may not be “qualifying income” (as such term is defined
pursuant to Section 7704 of the Code).

  2exv10w3

 

Exhibit 10.3

LOAN AGREEMENT

     This AGREEMENT is made June 20, 2006 (the “Effective Date”) between The Williams
Companies, Inc., a Delaware corporation, with principal offices at One Williams Center, Tulsa,
Oklahoma 74172 (“Lender”) and Williams Four Corners LLC, a Delaware limited liability
company, with principal offices at One Williams Center, Tulsa, Oklahoma 74172 (“Borrower”)
(this “Agreement”).

     1. Loan. Lender shall make revolving loans to Borrower during the term of this Agreement in an
aggregate amount outstanding of up to, but not exceeding, $20,000,000 at any time.

     2. Term. Borrower may borrow sums from Lender up to the total loan commitment of $20,000,000
at any time from the Effective Date to June 20, 2009 (the
“Maturity Date”). Borrower hereby promises to pay to Lender interest when due hereunder and all outstanding
principal, interest and other payments owing under this Agreement in full on the Maturity Date.

     3. Early Termination. Notwithstanding anything contained in this Agreement to the contrary, in
the event of a Change of Control (hereinafter defined) of the General Partner (hereinafter
defined), the Maturity Date shall be deemed to have immediately occurred as of the date of such
Change of Control. As used herein, the following terms shall have the following meanings:
“General Partner” means Williams Partners GP LLC, a Delaware limited liability company and
the general partner of Williams Partners L.P., a Delaware limited partnership (“Williams
Partners”), and any permitted successors and assigns under the agreement of limited partnership
of Williams Partners. “Change of Control” means any of the following events: (i) any sale,
lease, exchange or other transfer (in one transaction or a series of related transactions) of all
or substantially all of the General Partner’s assets to any other Person, unless immediately
following such sale, lease, exchange or other transfer such Person or assets are owned, directly or
indirectly, by the General Partner; (ii) the dissolution or liquidation of the General Partner;
(iii) the consolidation or merger of the General Partner with or into another Person pursuant to a
transaction in which the outstanding membership interests of the General Partner are changed into
or exchanged for cash, securities or other property, other than any such transaction where (a) the
outstanding membership interests of the General Partner are changed into or exchanged for Voting
Securities of the surviving corporation or its parent and (b) the Lender continues to own, directly
or indirectly, not less than a majority of the outstanding Voting Securities of the surviving
corporation or its parent immediately after such transaction; and (iv) other than Lender and its
affiliates, a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange
Act) being or becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of more than 50% of all of the then outstanding membership interests of the General
Partner, except in a merger or consolidation which would not constitute a Change of Control under
clause (iii) above. “Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Person” means a corporation, partnership, joint venture, trust, limited liability company,
unincorporated organization or any other entity. “Voting Securities” means securities of
any class of Person entitling the holders thereof to vote in the election of members of the board
of directors or other similar governing body of the Person, or in

 

 

the case of a limited partnership, a majority of the general partner interests in such limited
partnership.

     4. Procedure for Borrowing. Borrower may borrow in amounts of not less than $50,000.00, and in
additional multiples of not less than $5,000.00, by giving written notice to Lender. Each borrowing
shall be requested with a same-day notice by 10:00 a.m. the day of the proposed borrowing.

     5. Revolving Nature and Availability. Subject to the terms and conditions hereof, the Borrower
may increase or decrease loans under this Agreement by making drawdowns, repayments and further
drawdowns.

     6. Conditions of Loans. The obligation of Lender to make the loans described herein is subject
to the following conditions:

     (a) a Default (hereinafter defined) has not occurred and is continuing;

     (b) the proceeds of the proposed loan disbursement are, at the date of the relevant request,
used by the Borrower for such purpose(s) as are reasonably determined by Borrower.

     7. Interest. The Borrower promises to pay interest on the unpaid principal amount on the last
day of each quarter or each time a borrowing is repaid. The interest rate on all borrowings will be
the one-month LIBOR rate determined the date of the borrowing. The borrowings may be repaid prior
to the end of the one-month LIBOR rate period. If the borrowing is not repaid within one month,
the interest rate will be adjusted to the one-month LIBOR rate 30 days after the most recent
borrowing. All payments of principal and interest shall be payable in lawful currency of the United
States of America at the office of the Lender as provided above or such other address as the holder
hereof shall have designated to the Borrower, in immediately available funds. For purposes hereof,
the “one-month LIBOR rate” as of any date, shall mean the rate per month (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Dow Jones Markets Page 3750 (or any successor
page) as the London interbank offered rate for deposits in U.S. dollars at approximately 11:00 a.m.
(London time).

     8. Prepayment. Borrower may prepay all or part of any amounts outstanding hereunder at any
time without payment of penalty. Any partial prepayment, however, shall be applied against unpaid
installments outstanding hereunder in the inverse order of maturity beginning with the shortest
maturity and shall not be made in amounts of less than $5,000.

     9. Default. Borrower shall be in default (“Default”) if any of the following events
occur and continue:

     (a) It becomes insolvent or admits in writing its inability to pay its debts as they mature;
applies for, consents to, or acquiesces in the appointment of a trustee or receiver for any of its
property; in the absence of an application, consent, or acquiescence a trustee or receiver is
appointed for it or a substantial part of its property and is not discharged within 60 days; it
otherwise commits an act of bankruptcy; or any bankruptcy, reorganization, debt arrangement, or

 

 

other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation
proceeding, is instituted by or against it and if instituted is consented to or acquiesced in by it
or remains for 60 days undismissed;

     (b) It defaults in the performance of the terms and conditions of this Agreement and such
default continues for 30 days after notice thereof from Lender; or

     (c) Any government, board, agency, department, or commission takes possession or control of a
substantial part of Borrower’s property and such possession or control continues for 30 days.

     10. Acceleration at Option of Lender. If any of the events listed in paragraph 9(a), (b), or
(c) occur and continue, Lender may declare the amounts outstanding under this Agreement immediately
due and payable, at which time all unpaid installments shall immediately become due and payable.
Lender shall promptly advise Borrower in writing of any acceleration under this paragraph, but the
failure to do so shall not impair the effect of a subsequent declaration.

     11. Cross-References to Williams Companies Credit Agreement. Notwithstanding anything
contained in this Agreement to the contrary, in the event (i) there is a default under the Credit
Agreement, dated May 1, 2006, among Lender, Williams Partners, Northwest Pipeline Corporation,
Transcontinental Gas Pipe Line Corporation, and the Banks named therein, Citibank, N.A., as
administrative agent, and the other parties thereto (the “Williams Companies Credit
Agreement”), and/or (ii) the Williams Companies Credit Agreement or the commitments of the
lenders to make loans thereunder are terminated for any reason, Lender and Borrower agree that any
provision in this Agreement that relies on cross-references to the Williams Companies Credit
Agreement shall be interpreted as if the Williams Companies Credit Agreement was not in default and
was in full force and effect, the intention of the parties to this Agreement being that Borrower
shall, following such default and/or termination, have the right to continue to make revolving
borrowings under this Agreement at the interest rates and upon the other terms and conditions so
cross-referenced as if such default and/or termination had not occurred with respect to the
Williams Companies Credit Agreement. The parties hereto agree and acknowledge that the reduction
in, or termination of, the commitments under the Williams Companies Credit Agreement or the failure
or refusal of the lenders under the Williams Companies Credit Agreement to make loans thereunder
for any reason, including, without limitation, due to a default thereunder and/or the termination
thereof, shall not affect Lender’s obligations to make loans under this Agreement.

     12. Binding Effect. This Agreement shall be binding on the respective successors and assigns
of Lender and Borrower and shall inure to the benefit of Lender’s successors and assigns.

     13. Loan Expenses. Except as expressly set forth herein, Borrower shall not be required to pay
any fees or other expenses of Lender in connection with this Agreement or the Loans made hereunder.

     14. Commitment Fee. The Borrower shall pay to the Lender a commitment fee on the daily average
unused amount of the revolving loans for the period from and including the

 

 

Effective Date up to, but excluding, the Maturity Date at a rate of 0.30% per annum. Accrued
commitment fees shall be payable quarterly in arrears on the last day of each fiscal quarter of
Borrower and on the Maturity Date. All commitment fees shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).

     15. Non-Waiver. No delay or failure by Lender to exercise any right under this Agreement, and
no partial or single exercise of that right, shall constitute a waiver of that or any other right,
unless otherwise expressly provided herein.

     16. Governing Law. This Agreement shall be construed in accordance with and governed by the
laws of the State of New York.

     17. Headings. Headings in this Agreement are for convenience only and shall not be used to
interpret or construe its provisions.

     18. Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same instrument.

     19. Time of Essence. Time is expressly declared to be the essence of this Agreement.

     20. Entire Agreement; Modification. This instrument and any other loan documents executed in
connection herewith constitute the entire Agreement between Lender and Borrower and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no oral agreements between the parties. This Agreement may not be modified except in a
writing signed by both parties.

     21. Notices. All notices under this Agreement shall be in writing and delivered to the
respective parties at their principal offices stated at the beginning hereof.

     22. No Third Party Beneficiaries. The agreement of the Lender to make the loan to the Borrower
for the account of the Borrower on the terms and conditions set forth in this Agreement, is solely
for the benefit of the Borrower and no other person has any rights hereunder against the Lender or
with respect to the extension of credit contemplated hereby.

     23. Special Exculpation. No claim may be made by the Borrower or any other person against the
Lender, directors, officers, employees, attorneys or agents of any of them for any special,
indirect, consequential or punitive damages in respect of any claim for breach of contract or any
other theory of liability arising out of or relating to this Agreement or any other financing
document or the transactions contemplated hereby or thereby, or any act, omission or event
occurring in connection therewith and the Borrower hereby waives, releases and agrees not to sue
upon any claim for any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor.

 

 

     24. Waiver of Jury Trial. Each of the Borrower and the Lender hereby irrevocably waives, to
the fullest extent permitted by law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement or the transactions contemplated hereby.

     25. Indemnification. Borrower agrees to pay on demand all reasonable costs and expenses
incurred by Lender in connection with enforcement of this Agreement. Borrower agrees to the fullest
extent permitted by law, to indemnify and hold harmless the Lender and each of its directors,
officers, employees and agents (each an “Indemnified Party”) from and against any and all
claims, damages, liabilities and expenses (including without limitation fees and disbursements of
counsel) arising out of or in connection with any investigation, litigation or proceeding (whether
or not any Indemnified Party is a party) arising out of, related to or in connection with this
Agreement, the loans made hereunder or any transaction in which any proceeds of all or any part of
the loans made hereunder are applied.

     26. Severability. If any term or provision of this Agreement shall be determined to be illegal
or unenforceable, all other terms and provisions of this Agreement shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by applicable law.

     27. Further Assurances. The parties agree (a) to furnish upon request to each other such
further information, (b) to execute and deliver to each other such other documents, and (c) to do
such other acts and things, all as the other party may reasonably request for the purpose of
carrying out the intent of this Agreement.

     28. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any amounts outstanding hereunder, together with all fees, charges
and other amounts which are treated as interest on such amounts under applicable law (collectively
the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may
be contracted for, charged, taken, received or reserved by Lender in accordance with applicable
law, the rate of interest payable in respect of such amounts outstanding hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such amounts
outstanding but were not payable as a result of the operation of this Section 28 shall be cumulated
and the interest and Charges payable to Lender in respect of other amounts outstanding hereunder or
periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall
have been received by such Lender. “Federal Funds Effective Rate” as used herein means, for
any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates
on overnight Federal funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding business day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a business day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by Lender from three Federal funds brokers of recognized standing selected by
it.

* * * * *

 

 

     In witness whereof the parties have caused this Agreement to be executed by their proper
officers on the day and year first above written.

	 	 	 	 	 
	 	 	THE WILLIAMS COMPANIES, INC.
	 
	 	 	 	 
	 

	 	By:	 	/s/ Donald R. Chappel 
	 

	 	 	 	 
	 

	 	Name:
	 	Donald R. Chappel
	 

	 	Title:
	 	Senior Vice President and
Chief Financial Officer
	 
	 	 	 	 
	 	 	WILLIAMS FOUR CORNERS LLC
	 
	 	 	 	 
	 

	 	By:	 	/s/ Alan S. Armstrong 
	 

	 	 	 	 
	 

	 	Name:
	 	Alan S. Armstrong
	 

	 	Title:
	 	Senior Vice President

Signature Page to Loan Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00105-of-00352.parquet"}]]