Document:

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                                                                 EXHIBIT 10.8(e)

                     SECOND AMENDED AND RESTATED GUARANTY OF
                           ATMOS ENERGY MARKETING, LLC

This Second Amended and Restated Guaranty (this "Guaranty"), entered into
effective as of December 22, 2000, is made by ATMOS ENERGY MARKETING, LLC, a
Delaware limited liability company ("Guarantor"), in favor of BANK OF AMERICA,
N.A. ("Agent") as agent for the ratable benefit of the Banks (as hereinafter
defined) in amendment and restatement in its entirety of that certain GUARANTY
OF ATMOS ENERGY MARKETING, LLC dated as of August 9, 2000, as amended by that
certain FIRST AMENDMENT TO CREDIT AGREEMENT AND GUARANTY OF ATMOS ENERGY
MARKETING, LLC entered into effective as of September 29, 2000, among WOODWARD
MARKETING, L.L.C., BANK OF AMERICA, N. A., as a Bank, as an Issuing Bank, and as
Agent for the Banks, and WOODWARD MARKETING, INC., ATMOS ENERGY MARKETING LLC,
J. D. WOODWARD AND JAMES KIFER and that certain Amended and Restated Guaranty of
ATMOS ENERGY MARKETING, LLC entered into effective as of November 3, 2000.

     WHEREAS, pursuant to that certain Credit Agreement, dated to be effective
as of August 9, 2000, between WOODWARD MARKETING, L.L.C., a Delaware limited
liability company (the "Borrower"), and Agent (Agent, in its capacity as a Bank,
along with any other bank which may become a Bank pursuant to the terms of the
Credit Agreement referred to collectively as the "Banks"), the Banks have agreed
that, upon the conditions and in accordance with the provisions thereof, Banks
will extend to the Borrower an uncommitted discretionary and demand line of
credit facility in an amount outstanding at any one time of up to an aggregate
of $100,000,000.00, which Credit Agreement , as amended by that certain First
Amendment to Credit Agreement and Guaranty of Atmos Energy Marketing, LLC dated
as of September 29, 2000, that certain Second Amendment to Credit Agreement
dated as of November 3, 2000, which Second Amendment to Credit Agreement
increased the uncommitted discretionary and demand line of credit facility to an
amount outstanding at any one time of up to an aggregate of $115,000,000.00,
that certain Third Amendment to Credit Agreement dated as of December 5, 2000
and that certain Fourth Amendment to Credit Agreement dated as of even date
herewith which Fourth Amendment to Credit Agreement increased the uncommitted
discretionary and demand line of credit facility to an amount outstanding at any
one time of up to an aggregate of $140,000,000.00 (as amended and as further
amended from time to time, the "Credit Agreement"); and

     WHEREAS, Agent, in its capacity as a Bank has further agreed that, upon the
conditions and in accordance with the provisions of the Credit Agreement, Agent
will extend to the Borrower an uncommitted, discretionary demand line for
overdraft advances; and

     WHEREAS, Agent, in its capacity as a Bank has further agreed that, upon the
conditions and in accordance with the provisions of the Credit Agreement, Agent
in its capacity as a Bank may enter into Swap Contracts with the Borrower; and

SECOND AMENDED AND RESTATED GUARANTY - Page 1
(ATMOS ENERGY MARKETING, LLC)

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     WHEREAS, it is a condition precedent to the availability of such extensions
of credit that the Guarantor shall have executed and delivered this Guaranty.

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Guarantor hereby agrees as follows:

     The Guarantor unconditionally guarantees the prompt payment to Banks, their
affiliates and their successors and assigns, of all Obligations (as defined in
the Credit Agreement). Nothing to the contrary contained herein or in any other
Loan Document, Guarantor's liability under this Guaranty is limited to payment
of the Guaranteed Payment Amount (as defined below).

     "Guaranteed Payment Amount" as used in this Guaranty shall mean the sum of
the following:

          (1)  an amount equal to forty-five percent (45%) of the Obligations,
               plus

          (2)  interest (including interest that accrues during any bankruptcy
               proceeding of Borrower), which (A) shall accrue on any unpaid
               portion of the amount described in clause (1) of this definition
               from the date demand is made therefor by Agent (the "Demand
               Date") until such amount is paid, (B) shall be calculated at the
               interest rate presently in effect pursuant to the terms of the
               Credit Agreement, plus

          (3)  all reasonable attorney's fees and other collection costs
               incurred by Agent and Banks in connection with the enforcement of
               and/or collection under this Guaranty, including any bankruptcy
               proceeding affecting Guarantor.

     Notwithstanding anything to the contrary contained herein or in any other
Loan Document, except for payments of the Guaranteed Payment Amount made by
Guarantor from Guarantor's own funds and clearly identified as such in a written
notice to Agent at the time such payment is made, the Guaranteed Payment Amount
shall not be reduced by any payments made under the Note or any reductions in
the Obligations which occur after the Demand Date, including, without
limitation, any such payments or reductions by reason of (a) payments made by
Borrower or with the Borrower's assets, (b) payments made by any other guarantor
or with such guarantor's assets, (c) any offset by Banks, or (d) any foreclosure
of, or other realization on (including without limitation collection of
insurance proceeds) or in respect of, any of the liens, collateral assignments,
security interests, letters of credit or other security devices now or hereafter
securing payment of the Obligations (including without limitation payments or
reductions resulting from the application of the proceeds of the foreclosure of
or other realization on collateral pledged by Borrower or Guarantor to secure
payment of the Obligations). Guarantor acknowledges and agrees that Agent has no
duty to foreclose upon any collateral securing any of the Obligations, but, if
Agent elects to foreclose, Agent may pursue collection under this Guaranty prior
to, contemporaneously with, or after any foreclosure on such collateral.

     Further notwithstanding anything to the contrary contained herein or in any
other Loan Document, upon the closing of any transaction or transactions which
results in Guarantor owning

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(ATMOS ENERGY MARKETING, LLC)

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100% of the membership interests of Borrower (the "Acquisition"), the percentage
set forth in subpart (1) of the definition of Guaranteed Payment Amount above,
shall automatically increase from forty-five percent (45%) to one hundred
percent (100%), without notice to Guarantor or any other Person and without
further action by Agent or the Banks.

     At the time Guarantor pays any sum which may become due the Banks under the
terms of this Guaranty, written notice of such payment shall be delivered to the
Banks by Guarantor, and in the absence of such notice, any sum received by the
Banks on account of any of the Obligations shall be conclusively deemed paid by
the Borrower. All sums paid the Banks by Guarantor may be applied by the Banks
at their discretion upon any of the Obligations.

     1. The obligations of the Guarantor hereunder shall be payable and
performable at Agent's Payment Office at Bank of America Plaza, 8th Floor, 901
Main St., Dallas, Texas 75202-3714, or any other office designated by the Agent.

     2. This Guaranty is an absolute, complete and continuing one, and no notice
of the Obligations or any rearrangement, modification or waiver thereof needs to
be given to the Guarantor and in any such event the Guarantor will remain fully
bound hereunder. The Guarantor hereby expressly waives presentment, demand,
protest, and notice of protest and dishonor with respect to the Obligations, and
also notice of acceptance of this Guaranty, acceptance on the part of Agent
being conclusively presumed by its request for this Guaranty and delivery of
same to it.

     3. The Guarantor authorizes Agent, without notice or demand and without
affecting its liability hereunder, to take and hold security from third Persons
for the payment of the Obligations, and exchange, enforce, waive and release any
such security; and to apply such security and direct the order or manner of sale
thereof as the Banks in their discretion may determine; and to obtain a guaranty
of the Obligations from any one or more other Persons whomsoever and at any time
or times to enforce, waive, rearrange, modify, limit or release such other
Persons from their obligations under such guaranties.

     4. The Guarantor waives any right to require Agent to (a) proceed against
the Borrower, (b) proceed against or exhaust any security held from the
Borrower, or (c) pursue any other remedy in Agent's power whatsoever, including,
without limitation, any right of Agent to pursue any remedy against any other
guarantor. The Guarantor waives any defense of the Borrower or any other
guarantor of the Obligations or any portion thereof, and shall remain liable
hereon regardless of whether the Borrower or any other guarantor be found not
liable thereon for any reason including, without limitation, bankruptcy,
insolvency, or corporate dissolution and even though the Obligations, or any
part thereof, may be rendered void or unenforceable or uncollectible as against
the Borrower or any other guarantor. This Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time payment of any
portion of the Obligations by the Borrower is rescinded or must otherwise be
returned by Agent upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, all as though such payment had not been made, and the
Guarantor will, thereupon, guarantee payment of such amount as to which refund
or restitution has been made, together with interest accruing thereon subsequent
to the date of refund or restitution at the applicable rate under the Credit
Agreement and reasonable collection costs and fees (including, without
limitation, reasonable attorney's fees)

SECOND AMENDED AND RESTATED GUARANTY - Page 3
(ATMOS ENERGY MARKETING, LLC)

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applicable thereon. The Guarantor shall (i) not exercise any right of
subrogation and (ii) waives any right to exercise any remedy which Agent now has
or may hereafter have against the Borrower and any right to participate in any
security now or hereafter held by Agent.

     5. The Guarantor agrees that if the maturity of the Obligations is
accelerated for any reason, including, without limitation, by bankruptcy or
otherwise, such maturity shall also be deemed accelerated for the purpose of
this Guaranty without demand or notice to the Guarantor.

     6. It is expressly agreed that the liability of the Guarantor for payment
of the Obligations shall be primary and not secondary.

     7. To induce the Banks and Agent to enter into the Credit Agreement with
the Borrower, the Guarantor represents and warrants to Banks and Agent (which
representations and warranties will survive the delivery of this Guaranty) that:

         (a) The execution and delivery by the Guarantor of this Guaranty and
the performance of obligations hereunder are within its power and do not (i)
contravene or conflict with any provision of law, (ii) contravene or conflict
with any indenture, instrument or other agreement to which the Guarantor is a
party or by which its property may be presently bound or encumbered, or (iii)
result in or require the creation or imposition of any Lien in, upon or against
any of the respective property of the Guarantor under any such indenture,
instrument or other agreement.

         (b) This Guaranty when duly executed and delivered, will be the legal,
valid and binding obligation of the Guarantor enforceable in accordance with its
terms (subject to any applicable debtor relief laws and general principles of
equity).

         (c) No authorization, consent, approval, exemption, franchise, permit
or license of, or filing with, any governmental or public authority or any third
party is required to authorize, or is otherwise required in connection with the
valid execution and delivery by the Guarantor of this Guaranty which has not
been obtained.

         (d) The Guarantor has duly and properly filed all United States Income
Tax returns and all other tax returns (or permissible extensions thereof) which
are required to be filed, and has paid all taxes prior to delinquency pursuant
to all returns or pursuant to any assessment received, except such taxes, if
any, as are being contested in good faith and as to which adequate provisions
and disclosures to Agent have been made.

         (e) Except as previously disclosed to Agent in writing, to the
knowledge of the Guarantor, there is no litigation or other action pending
before any court, governmental instrumentality, regulatory authority or arbitral
body or threatened against or affecting the Guarantor which might reasonably be
expected to result in a material adverse change in the financial condition of
the Guarantor.

     8. So long as any of the Obligations shall remain unpaid or unsatisfied, or
any Letter of Credit (as defined in the Credit Agreement) shall remain
outstanding, Guarantor covenants and agrees as follows:

SECOND AMENDED AND RESTATED GUARANTY - Page 4
(ATMOS ENERGY MARKETING, LLC)

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         (a) as soon as available, but not later than 120 days after the end of
each fiscal year, a copy of the audited financial statements to include a
balance sheet as at the end of such year for the Guarantor, with schedules and
the related statements of income or operations, members' capital and cash flows
for such year for the Guarantor, setting forth in each case in comparative form
the figures for the previous fiscal year, and accompanied by the opinion of a
nationally-recognized independent public accounting firm ("Independent Auditor")
which report shall state that such financial statements present fairly the
financial position for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years. Such opinion shall not be qualified or
limited because of a restricted or limited examination by the Independent
Auditor of any material portion of the Guarantor's or any subsidiary's records;
and

         (b) as soon as available, but not later than 45 days after the end of
each month, the Guarantor prepared financial statements for the Guarantor in
form acceptable to Banks.

     9. In all instances herein, the singular shall be construed to include the
plural and the masculine to include the feminine. In the event more than one
party executes this Guaranty as a guarantor, then each party agrees to be
jointly and severally liable for the Obligations.

     10. This Guaranty is and shall be in every particular available to the
successors and assigns of Banks and is and shall always be fully binding upon
the successors and assigns of the Guarantor.

     11. The Guarantor consents to the execution and delivery by the Borrower of
the Credit Agreement and each of the other Loan Documents and the performance by
the Borrower of their obligations thereunder.

     12. No failure to exercise nor any delay in exercising on the part of Agent
of any right, power or privilege hereunder or at law or in equity shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies provided by
law or in equity.

     13. THIS GUARANTY SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS (WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS) OF THE STATE OF
CALIFORNIA.

     14. ANY SUIT TO ENFORCE ANY RIGHT HEREUNDER OR TO OBTAIN A DECLARATION OF
ANY RIGHT OR OBLIGATION HEREUNDER, MAY, AT THE SOLE OPTION OF THE BANKS, BE
BROUGHT (I) IN THE COURTS OF THE STATE OF CALIFORNIA OR OF THE UNITED STATES FOR
THE CENTRAL DISTRICT OF CALIFORNIA, OR (II) IN ANY COURT OF COMPETENT
JURISDICTION WHERE JURISDICTION MAY BE HAD OVER GUARANTOR. THE GUARANTOR HEREBY
EXPRESSLY CONSENTS TO THE JURISDICTION OF THE COURTS OF CALIFORNIA FOR SUCH
PURPOSES.

SECOND AMENDED AND RESTATED GUARANTY - Page 5
(ATMOS ENERGY MARKETING, LLC)

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     15. If any clause or portion of this Guaranty shall be declared
unenforceable, invalid, or illegal, the remaining clauses and portions shall not
be affected thereby.

     16. The Guarantor warrants, represents and acknowledges that it is not
relying on any representations or statements of Agent or any Bank, or any other
party concerning the financial condition of the Borrower, the likelihood that
the Guarantor will be required to pay or perform the Obligations or any other
representations or statements other than as expressly set forth herein, and all
other representations or agreements, if any, are merged into this Guaranty.

     17. All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and may be personally served or sent by
telex, telecopier, mail or the express mail service of the United States Postal
Service, Federal Express or other equivalent overnight or expedited delivery
service and shall be deemed to have been given upon receipt. For purposes
hereof, the address of the Guarantor shall be the address written under
Guarantor's name on the signature page hereof, the address of Agent shall be as
follows:

                        Bank of America, N.A.
                        333 Clay Street, Suite 4550
                        Houston, Texas 77002
                        Attention: Leonard L. Russo
                        Telephone: (713) 651-4804
                        Facsimile: (713) 651-4801

and the addresses of the Banks shall be as follows:

                        Bank of America, N.A.
                        333 Clay Street, Suite 4550
                        Houston, Texas 77002
                        Attention: Irene C. Rummel
                        Telephone: (713) 651-4921
                        Facsimile: (713) 651-4801

                        BNP Paribas
                        787 Seventh Avenue
                        New York, New York 10019
                        Attention: Ed Chin
                        Telephone: (212) 841 2020
                        Facsimile: (212) 841 2537.

Any party may, by proper written notice hereunder to the other parties, change
the address to which notices shall thereafter be sent to it.

     18. Unless otherwise defined, all capitalized terms used herein have the
meanings assigned to such terms in the Credit Agreement.

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(ATMOS ENERGY MARKETING, LLC)

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     19. Guarantor hereby agrees that, immediately upon closing of the
Acquisition, Guarantor will execute and deliver to Agent a Consent and
Ratification in the form attached hereto as Exhibit A.

     20. THIS WRITTEN AGREEMENT AND THE OTHER WRITTEN AGREEMENTS ENTERED INTO
AMONG THE PARTIES REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

SECOND AMENDED AND RESTATED GUARANTY - Page 7
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     Executed as of the date first written above.

                                       GUARANTOR:

                                       ATMOS ENERGY MARKETING, LLC

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

Address:

1800 Three Lincoln Centre
5430 LBJ Freeway
Dallas, Texas 75240

EXECUTION PAGE TO SECOND AMENDED AND RESTATED GUARANTY
(ATMOS ENERGY MARKETING, LLC)

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                                    EXHIBIT A

                        FORM OF CONSENT AND RATIFICATION

     The undersigned, ATMOS ENERGY MARKETING, LLC, has executed that certain
Second Amended and Restated Guaranty, dated as of December 22, 2000 (the
"Guaranty"), in favor of BANK OF AMERICA, N.A. ("Agent"), as Agent for the
ratable benefit of the Banks. The undersigned hereby (i) consents and agrees to
the release by Agent of those certain Guaranty agreements executed by J.D.
Woodward, James Kifer and Woodward Marketing, Inc., each dated the same date as
the Guaranty (the "Released Guaranties"), and (ii) agrees that the Guaranty
shall remain in full force and effect and shall continue to be the legal, valid
and binding obligation of the undersigned enforceable against it in accordance
with its terms. Furthermore, the undersigned hereby agrees and acknowledges that
(a) the Acquisition has occurred, (b) as a result of the Acquisition, the
undersigned owns 100% of the membership interests in Borrower, (c) pursuant to
the terms of the Guaranty, as of the date of the Acquisition, the percentage set
forth in subpart (1) of the definition of Guaranteed Payment Amount in the
Guaranty, automatically increased from forty-five percent (45%) to one hundred
percent (100%) (i.e. Guarantor has guaranteed one hundred percent (100%) of the
Obligations), and (d) the Guaranty is not subject to any claims, defenses or
offsets, (e) the release by the Agent of the Released Guaranties shall in no way
reduce, impair or discharge any obligations of the undersigned as guarantor
pursuant to the Guaranty and shall not constitute a waiver by Agent of any of
Agent's rights against the undersigned. Unless otherwise defined herein, all
capitalized terms used herein have the meanings assigned to such terms in the
Guaranty.

     Executed as of the ___ day of ______, 2000.

                                       ATMOS ENERGY MARKETING, LLC

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

EXHIBIT A<PAGE>
                                                                 EXHIBIT 10.8(f)

                      SECOND AMENDMENT TO CREDIT AGREEMENT

         This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
into effective as of November 3 2000, among WOODWARD MARKETING, L.L.C., a
Delaware limited liability company (the "Borrower"), BANK OF AMERICA, N. A.
("Bank of America"), as a Bank, as an Issuing Bank, and as Agent for the Banks,
and Woodward Marketing, Inc., Atmos Energy Marketing LLC, J. D. Woodward and
James Kifer (collectively the "Guarantors").

         WHEREAS, Borrower and Banks entered into that certain Credit Agreement,
dated to be effective as of August 9, 2000, as amended by that certain First
Amendment to Credit Agreement and Guaranty of Atmos Energy Marketing, LLC dated
as of September 29, 2000, (as amended the "Credit Agreement"); and

         WHEREAS, the Obligations (as defined in the Credit Agreement) were
guaranteed by the Guarantors pursuant to a Guaranty Agreement executed by each
of the Guarantors, in favor of the Banks (the "Guaranty Agreements"), dated as
of August 9, 2000; and

         WHEREAS, the Obligations are secured by security interests in the
Collateral (as defined in the Credit Agreement) granted to Bank pursuant to the
Security Agreements (as defined in the Credit Agreement) and pursuant to the
Nations Funds Security Agreement (as defined in the Credit Agreement), each
executed by Borrower (collectively, the "Security Agreements"); and

         WHEREAS, the parties hereto desire to amend the Credit Agreement as set
forth herein.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, Borrower, Bank of America and the Guarantors agree as follows:

         1. A definition "Collateralized L/C Line" is added to Section 1.01 of
the Credit Agreement, Certain Defined Terms, to read as follows:

                  "Collateralized L/C Line" means that certain uncommitted line
         of credit in an amount of up to $15,000,000.00 for the purpose of
         providing Cash Collateralized Letters of Credit with tenors not exceed
         90 days.

         2. The definition of "Line" set forth in Section 1.01 of the Credit
Agreement, Certain Defined Terms, is deleted in its entirety and replaced with
the following:

                  "Line" means any of the Borrowing Base Line, the
         Collateralized Line or the Overdraft Line.

         3. The definition of "Net Working Capital" set forth in Section 1.01 of
the Credit Agreement, Certain Defined Terms, is deleted in its entirety and
replaced with the following:

<PAGE>

                  "Net Working Capital" means the excess of Current Assets
         (minus all amounts due from employees, owners, Subsidiaries and
         Affiliates other than Accounts of Atmos Energy Corporation and its
         Subsidiaries and Affiliates permitted to be included as Eligible
         Accounts in the calculation of the Borrowing Base Advance Cap and minus
         the amount of any Cash Collateral pledged by the Borrower to secure a
         Letter of Credit under the Collateralized L/C Line) over Current
         Liabilities (excluding the current portion of Subordinated Debt), less
         investments in Capital Stock. In calculating Net Working Capital, the
         amount of Subordinated Debt excluded from liabilities in such
         calculation shall not exceed an amount equal to (i) 50% of the
         resultant Net Working Capital, plus (ii) the amount of the portion of
         Subordinated Debt the proceeds of which at such time are being used as
         Cash Collateral pledged by the Borrower to secure a Letter of Credit
         under the Collateralized L/C Line.

         4. The definition of "Tangible Net Worth" set forth in Section 1.01 of
the Credit Agreement, Certain Defined Terms, is deleted in its entirety and
replaced with the following:

                  "Tangible Net Worth" means (a) the sum of the Borrower's
         assets, as determined in accordance with GAAP, less (b) the sum of the
         Borrower's liabilities excluding Subordinated Debt, as determined in
         accordance with GAAP, less (c) all amounts due from employees, owners,
         Subsidiaries and Affiliates other than Accounts permitted to be
         included as Eligible Accounts in the calculation of the Borrowing Base
         Advance Cap, less (d) investments in Capital Stock, less (e) the
         intangible assets of the Borrower, as determined in accordance with
         GAAP, less (f) the amount of any Cash Collateral pledged by the
         Borrower to secure a Letter of Credit under the Collateralized L/C
         Line. In calculating Tangible Net Worth, the amount of Subordinated
         Debt excluded from liabilities in such calculation shall not exceed an
         amount equal to (i) 50% of the resultant Tangible Net Worth plus (ii)
         the amount of the portion of Subordinated Debt the proceeds of which at
         such time are being used as Cash Collateral pledged by the Borrower to
         secure a Letter of Credit under the Collateralized L/C Line.

         5. Section 3.01 (a) of Section 3.01 of the Credit Agreement, The Letter
of Credit Lines, is hereby deleted in its entirety and replaced with the
following:

                  3.01 The Letter of Credit Lines.

                           (a) On an uncommitted basis and on the terms and
         conditions set forth herein and if the Issuance of such Letter of
         Credit has been consented to by the Banks in their sole discretion (i)
         Issuing Bank agrees, (A) from time to time on any Business Day during
         the period from the Closing Date to the Expiration Date, to consider
         the Issuance of Letters of Credit for the account of the Borrower under
         the Borrowing Base Line or the Collateralized L/C Line and to consider
         whether to amend or renew Letters of Credit previously Issued by it, in
         accordance with Subsections 3.02(c) and 3.02(d), and (B) to honor
         drafts under the Letters of Credit; and (ii) the Banks shall
         participate in Letters of Credit Issued for the account of the
         Borrower; provided, however, the Declining Bank shall not have any
         obligation to and shall not be deemed to have participated in any

SECOND AMENDMENT TO CREDIT AGREEMENT - PAGE 2
<PAGE>

         Letters of Credit which are Issued on or after the Conversion to Single
         Funding Bank Date. Within the foregoing limits, and subject to the
         other terms and conditions hereof including, without limitation, the
         approval of the Banks in their sole discretion, the Borrower's ability
         to request that Issuing Bank Issue Letters of Credit shall be fully
         revolving, and, accordingly, the Borrower may, during the foregoing
         period, request that Issuing Bank Issue Letters of Credit to replace
         Letters of Credit which have expired or which have been drawn upon and
         reimbursed. The Existing L/Cs shall be deemed to be Letters of Credit
         Issued under this Agreement and shall be entitled to the benefits of
         this Agreement.

         6. Subsection 3.01 (b)(viii) of Section 3.01 of the Credit Agreement,
The Letter of Credit Lines, is hereby deleted in its entirety and replaced with
the following:

                  (viii) the amount of such requested Letter of Credit exceeds
         the Borrowing Base Advance Cap or Collateralized L/C Line limit.

         7. Section 3.07 of the Credit Agreement, Cash Collateral Pledge, is
hereby deleted in its entirety and replaced with the following:

         3.07     Cash Collateral Pledge. Upon the request of the Agent, (i) if
                  Issuing Bank has honored any full or partial drawing request
                  on any Letter of Credit and such drawing has resulted in an
                  L/C Borrowing hereunder, or (ii) if, as of the Expiration
                  Date, any Letters of Credit may for any reason remain
                  outstanding and partially or wholly undrawn, the Borrower
                  shall immediately Cash Collateralize the L/C Obligations in an
                  amount equal to such L/C Obligations. Upon the occurrence of
                  the circumstances described in Section 2.06 requiring the
                  Borrower to Cash Collateralize Letters of Credit, then, the
                  Borrower shall immediately Cash Collateralize the L/C
                  Obligations in an amount equal to the applicable excess. In
                  addition, the Borrower shall Cash Collateralize any Letter of
                  Credit to be Issued under the Collateralized L/C Line on or
                  before such Letter of Credit is actually Issued in an amount
                  equal to such Letter of Credit.

         8. Schedule 2.01 of the Credit Agreement is deleted in its entirety and
replaced with the Schedule 2.01 attached hereto.

         9. The Form of Notice of Borrowing (Letters Of Credit) attached to the
Credit Agreement is deleted in its entirety and replaced with Exhibit A, which
is attached hereto.

         10. Renewal; Continued Effect. Except as set forth above, the Credit
Agreement shall continue in full force and effect.

         11. Representations. To induce the Banks to enter into this Amendment,
Borrower ratifies and confirms each representation and warranty set forth in the
Credit Agreement as if such representations and warranties were made on even
date herewith, and further represents and warrants (a) that no material adverse
change has occurred in the financial condition or business prospects of Borrower
since the date of the last financial statements delivered to the Banks, (b)

SECOND AMENDMENT TO CREDIT AGREEMENT - PAGE 3
<PAGE>

that no Event of Default exists and no event or condition exists or has occurred
which with passage of time, or notice, or both, would become an Event of Default
(a "Default"), and (c) that Borrower is fully authorized to enter into this
Amendment. BORROWER ACKNOWLEDGES THAT THE CREDIT AGREEMENT PROVIDES FOR A CREDIT
FACILITY THAT IS COMPLETELY OPTIONAL ON THE PART OF THE BANK AND THAT THE BANK
HAS ABSOLUTELY NO DUTY OR OBLIGATION TO ADVANCE ANY REVOLVING LOAN OR TO ISSUE
ANY LETTER OF CREDIT. BORROWER REPRESENTS AND WARRANTS TO BANK THAT BORROWER IS
AWARE OF THE RISKS ASSOCIATED WITH CONDUCTING BUSINESS UTILIZING AN UNCOMMITTED
FACILITY.

         12. Conditions Precedent. As a condition to Bank of America entering
into this Amendment, no Default or Event of Default shall exist on the date
hereof, and Bank of America must have received executed originals of each of the
following documents and instruments, in form and substance satisfactory to Bank
of America:

                  (a) this Amendment, duly executed by Borrower;

                  (b) a Renewal Promissory Note in the amount of
         $115,000,000.00, duly executed by Borrower;

                  (c) an Amended and Restated Guaranty of each of the
         Guarantors; and

                  (d) such other documents or certificates as Bank of America
         may reasonably request.

         13. Ratification of Security Agreements. Borrower ratifies and confirms
the Security Agreements, and acknowledges and agrees that references to the
Credit Agreement in such Security Agreements are hereby amended to refer to the
Credit Agreement as amended by this Amendment and that in all other respects
such Security Agreements shall continue in full force and effect, and that
pursuant to such Security Agreements Borrower has granted and hereby confirms
and grants to Bank a continuing first and prior security interest in the
Collateral to secure payment and performance of all Obligations.

         14. Miscellaneous.

                  (a) Severability. In case any of the provisions of this
Amendment shall for any reason be held to be invalid, illegal, or unenforceable,
such invalidity, illegality, or unenforceability shall not affect any other
provision hereof, and this Amendment shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.

                  (b) Capitalized Terms. Except as otherwise defined herein,
capitalized terms shall have the meanings specified in the Credit Agreement.

SECOND AMENDMENT TO CREDIT AGREEMENT - PAGE 4
<PAGE>

                  (c) Execution in Counterparts. This Amendment may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument, and any party hereto may execute this Amendment by
signing one or more counterparts.

                  (d) Governing Law. This Amendment shall be construed in
accordance with and governed by the laws of the State of California (without
reference to principles of conflicts of laws), provided, however, that Bank
shall retain all rights under federal law.

                  (e) Rights of Third Parties. All provisions herein are imposed
solely and exclusively for the benefit of Borrower and Bank, and their permitted
successors and assigns, and no other Person shall be a direct or indirect legal
beneficiary of, or have any direct or indirect cause of action or claim in
connection with this Amendment or any of the other Loan Documents.

                  (f) COMPLETE AGREEMENT. THIS WRITTEN AMENDMENT AND THE OTHER
WRITTEN AGREEMENTS ENTERED INTO AMONG THE PARTIES REPRESENT THE FINAL AGREEMENT
AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

SECOND AMENDMENT TO CREDIT AGREEMENT - PAGE 5
<PAGE>

               Executed as of the day and year first above written

                                            BORROWER:

                                            WOODWARD MARKETING, L.L.C.,
                                            a Delaware limited liability company

                                            By:      /s/ HENRY O. DRILLING
                                                   -----------------------------
                                            Name:    Henry O. Drilling
                                                   -----------------------------
                                            Title:   Sr. Vice President
                                                   -----------------------------

                                            BANKS:

                                            BANK OF AMERICA, N. A.,
                                            as Agent

                                            By:      /s/ IRENE C. RUMMEL
                                                   -----------------------------
                                            Name:    Irene C. Rummel
                                                   -----------------------------
                                            Title:   Vice President
                                                   -----------------------------

                                            BANK OF AMERICA, N. A.,
                                            as a Bank and Issuing Bank

                                            By:      /s/ IRENE C. RUMMEL
                                                   -----------------------------
                                            Name:    Irene C. Rummel
                                                   -----------------------------
                                            Title:   Vice President
                                                   -----------------------------

SIGNATURE PAGE - SECOND AMENDMENT TO CREDIT AGREEMENT
<PAGE>
                                           GUARANTORS:

                                           WOODWARD MARKETING, INC.

                                           By:      /s/ HENRY O. DRILLING
                                                  ------------------------------
                                           Name:    Henry O. Drilling
                                                  ------------------------------
                                           Title:   Sr. Vice President
                                                  ------------------------------

                                           ATMOS ENERGY MARKETING, LLC

                                           By:     /s/ LAURIE M. SHERWOOD
                                                  -----------------------------
                                           Name:   Laurie M. Sherwood
                                                  -----------------------------
                                           Title:  Vice President and Treasurer
                                                  -----------------------------

                                                   /s/ J. D. WOODWARD
                                           ------------------------------------
                                                   J. D. WOODWARD

                                                   /s/ JAMES KIFER
                                           ------------------------------------
                                                   JAMES KIFER

SIGNATURE PAGE - SECOND AMENDMENT TO CREDIT AGREEMENT
<PAGE>

                                  SCHEDULE 2.01

                              UNCOMMITTED LINE AND
                            UNCOMMITTED LINE PORTION
                         (EXCLUDING OVERDRAFT LINES AND
                                 SWAP CONTRACTS)

<Table>
<Caption>

                                                                                           Pro Rata
Line:                          Bank                             Dollar Amount               Share
-----                          ----                             -------------              --------
<S>                          <C>                                <C>                         <C>
Borrowing Base               Bank of America                    $100,000,000.00               100%
Line

Collateralized               Bank of America                    $ 15,000,000.00               100%
L/C Line
</Table>

SCHEDULE

<PAGE>
                                    EXHIBIT A

                           FORM OF NOTICE OF BORROWING
                               (LETTERS OF CREDIT)

                                     [DATE]

Bank of America, N. A.
333 Clay Street, Suite 4550
Houston, Texas 77002
Attention: Irene C. Rummel
Telephone: (713) 651-4921
Facsimile: (713) 651-4801

         Re:      Credit Agreement, dated to be effective as of August 9, 2000
                  (as amended or supplemented from time to time, the
                  "Agreement"), by and among Woodward Marketing, L.L.C. (the
                  "Borrower"), the banks that from time to time are parties
                  thereto, and Bank of America, N. A., as Agent

Ladies and Gentlemen:

         Reference is made to the Agreement (capitalized terms used herein that
are not defined shall have the respective meanings ascribed thereto in the
Agreement). The Borrower hereby gives notice of its intention to request the
[ISSUANCE, AMENDMENT, OR RENEWAL] of Letters of Credit as is further described
on the Letter of Credit Application attached hereto.

         The Borrower represents and warrants, as of the date hereof and as of
the date any Letter of Credit is Issued, amended or renewed, that (i) no Default
or Event of Default has occurred and is continuing on the date hereof, nor will
any thereof occur after giving effect to the Letters of Credit requested above;
and (ii) that neither the Borrowing Base Advance Cap nor the limit under the
Collateralized L/C Line will be exceeded after giving effect to the Letters of
Credit requested above.

                                           Very truly yours,

                                           WOODWARD MARKETING, L.L.C.,

                                           By:     /s/ HENRY O. DRILLING
                                              ----------------------------------
                                           Name:   Henry O. Drilling
                                                --------------------------------
                                           Title:  Responsible Officer

EXHIBIT A

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