Document:

<PAGE>

                                                                    EXHIBIT 10.7

November 13, 2003

Tim Tight
590 Menlo Oaks Drive
Menlo Park, CA  94025

RE: Employment with Immersion Corporation

Dear Tim:

      Immersion Corporation (the "Company" or "Immersion") is pleased to present
this offer for the position of Vice President and General Manager, Industrial
Business Group, on the terms set forth in this agreement, effective upon your
acceptance by execution of a counterpart copy of this letter where indicated
below.

      Reporting Duties and Responsibilities. In this position, you will report
to the CEO and will be responsible for developing the markets, customers and
alliances needed to build a large and profitable revenue stream in our
Industrial Business Group. This segment will include our Automotive, 3D and
Industrial businesses. You may also be tasked with other responsibilities as
identified by the CEO.

      Salary and Benefits. Your initial base salary will be $180,000 annually,
payable in accordance with the Company's customary payroll practice, which is
bi-weekly. This offer is for a full time, salaried, exempt position, located at
the San Jose offices of the Company, except as travel to other locations that
may be necessary to fulfill your responsibilities. Your performance will be
reviewed in January 2004 during our company's focal review process, and annually
thereafter, that will be based on an achievement of a number of revenue and
profit margin targets. You will be eligible to participate in our variable
compensation program. The details of your 2004 variable compensation are
detailed in the attached Addendum A. You will also receive the Company's
standard employee benefits package. A copy of our current benefits package is
enclosed but may be subject to change at any time.

      Stock Options. Effective upon board approval, the Company will grant you
an option to purchase 300,000 shares of the Company's Common Stock pursuant to
the Company's stock option plan and standard stock option agreement. All options
will have an exercise price that will be equal to the fair market value of the
Company's Common Stock at the date of grant. The options will become exercisable
over a four-year exercise schedule with 25% of the shares vesting at the end of
your first twelve months of service, and with an additional 2.083% vesting per
month thereafter, at the close of each month during which you remain employed
with the Company.

      Confidential Information. As an employee of the Company, you will have
access to certain Company confidential information and you may during the course
of your employment, develop certain information or inventions that will be the
property of the Company. To protect the interest of the Company, you will need
to sign the Company's standard "Employee Inventions and Confidentiality
Agreement" as a condition of your employment. A copy of the agreement is
attached for your review. We wish to impress upon you that we do not wish you to
bring with you any confidential or proprietary material of any former employer
or to violate any other obligation to your former employers.

      At-Will Employment. While we look forward to a long and rewarding
relationship, should you decide to accept our offer, you will be an at-will
employee of the Company, which means the employment relationship can be
terminated by either of us
<PAGE>
for any reason at any time. Any statements or representations to the contrary
(and indeed, any statements contradicting any provision in this letter) should
be regarded by you as ineffective. The provisions of this offer letter may only
be modified by a document signed by you and the CEO of the company. Further,
your participation in any stock option or benefit program is not to be regarded
as assuring you of continuing employment for any particular period of time.

      Benefits Upon Resignation or Termination Due to Death or Permanent
Disability. In the event of your voluntary resignation from employment with the
Company, or in the event that your employment terminates as a result of death or
Permanent Disability, you shall be entitled to no compensation or benefits from
the Company other than those earned through the date of your termination or in
the case of any Options, vested through the date of your termination. In the
event of your voluntary resignation from employment, you agree to provide the
Company with 20-business days notice, in writing. The Company may accept all or
part of your notice and agrees to provide you with pay in lieu of notice as
appropriate.

For purposes of this letter, "Permanent Disability" means that you (i) have been
incapacitated by bodily injury or disease so as to be prevented thereby from
engaging in the performance of your duties following reasonable accommodation on
behalf of the Company; (ii) such total incapacity shall have continued for a
period of sixty (60) days; and (iii) such incapacity will, in the opinion of a
qualified physician, be permanent and continuous during the remainder of your
life.

      Benefits Upon Other Termination: You agree that the Company may terminate
your employment at any time, with or without cause. In the event of the
termination of your employment by the Company for the reasons set forth below,
you shall be entitled to the following:

      Termination for Cause: If the Company terminates your employment for
Cause, as defined below, you shall be entitled to no compensation or benefits
from the Company other than those earned, or in the case of any Options, vested
through the date of you termination. For purposes of this letter agreement, a
termination "for Cause" occurs if the Company for any of the following reasons
terminates your employment: theft, dishonesty, or falsification of any
employment or Company records; your conviction of a felony or of any criminal
act which impairs your ability to perform your duties with the Company; your
consistent poor performance, as determined by the CEO in his sole discretion;
your improper use or disclosure of the Company's confidential or proprietary
information; any intentional act by you that has a material detrimental effect
on the Company's reputation or business; or any material breach of the terms of
this letter agreement by you, which breach, if curable, is not cured within
thirty (30) days following written notice of such breach from the Company.

      Termination Without Cause: The termination of your employment by the
Company at any time for any reason other than (i) for Cause, or (ii) for your
death or Permanent Disability, shall constitute a "Termination Without Cause."
In the event of a Termination Without Cause, you shall be entitled to the
following separation benefits provided that you execute a general release of all
known and unknown claims against the Company in a form acceptable to the
Company:

      continued payment of your salary at your final Base Salary rate, less
applicable withholding, for six (6) months following your termination;

      as of your termination of employment, you will be entitled to elect to
purchase group health insurance coverage in accordance with federal law (COBRA).
If you timely elect COBRA coverage, the Company shall pay the premiums for your
COBRA coverage for a six (6) month period. Thereafter, you may elect to purchase
COBRA coverage at your own expense.
<PAGE>
      Authorization to Work. The Immigration Reform and Control Act of 1986
requires you, within three business days of hire, to present documentation
demonstrating that you have authorization to work in the United States.
Acceptable documentation is shown on the enclosed form titled Employment
Eligibility Verification (Form I-9). Please bring this form to work along with
the appropriate documentation to the new employee orientation on your first day
of employment. If you have questions about this requirement, which applies to
U.S. citizens and non-U.S. citizens alike, please contact our Human Resources
department.

      Arbitration Provision. In the event of any dispute or claim relating to or
arising out of this letter agreement, the employment relationship, or the
termination of that relationship for any reason (including, but not limited to,
any claims of breach of contract, wrongful termination, fraud, retaliation,
discrimination or harassment), the parties agree that all such disputes shall be
fully, finally and exclusively resolved by binding arbitration conducted by the
American Arbitration Association in Santa Clara County, California. The parties
hereby waive their respective rights to have any such disputes or claims tried
to a judge or jury. Provided, however, that this arbitration provision shall not
apply to any claims for injunctive relief by you or the Company and shall not
apply to any disputes or claims relating to or arising out of the misuse or
misappropriation of trade secrets or proprietary information.

      Term of Offer. This offer will remain open until close of business on
Friday, November 14, 2003. If you decide to accept our offer, and we hope that
you will, please sign the enclosed copy of this letter in the space indicated
and return it to me. This letter agreement and the Inventions and
Confidentiality Agreement and Stock Option Agreement referred to above
constitute the entire agreement between you and the Company regarding the terms
and conditions of your employment, and they supersede all prior negotiations,
representations or agreements between you and the Company. California law will
govern this letter agreement.

      Start Date. This offer is made with the understanding that you will start
employment with Immersion on or about November 17, 2003. For purposes of this
Agreement, the term "start date" shall mean the day on which you commence
employment with the Company.

      Tim, we are excited and pleased to have you join the Immersion team in
this exciting role and we look forward to a mutually beneficial working
relationship.

Sincerely,

/s/ Victor Viegas                      /s/ Rose Ramos
---------------------------            ---------------------------
Victor Viegas                          Rose Ramos
President and CEO                      Human Resources

Agreed and Accepted By:

/s/ Tim Tight                                  11/14/03
---------------------------            ---------------------------
Tim Tight                              Date
<PAGE>
                                   Addendum A

This Addendum A to the Employment with Immersion Corporation offer letter
identifies your 2004 variable compensation program details. Please see the
Immersion FY2004 Commission Plan for a more complete description of the
Immersion plan including objectives, eligibility, administration, plan design
and example calculations.

QUARTERLY QUOTA ACHIEVED

<70%              QPF = 0
70% to < 90%      QPF = 50%
90% and above     QPF = 100%

YTD REVENUE

$0 to $9M         Commission rate = 1.0%
>$9M              Commission rate = 2.0%

Commission paid for the quarter is the QPF multiplied by the YTD revenue
commission rate times the quarterly revenue of your Business Group.<PAGE>
                                                                    EXHIBIT 10.1

                     SEVENTH AMENDMENT AND JOINDER AGREEMENT

                  SEVENTH AMENDMENT AND JOINDER AGREEMENT, dated as of December
19, 2003 (this "Amendment"), in respect of the Uncommitted Amended and Restated
Credit Agreement, dated as of July 1, 2002 (as amended, supplemented or
otherwise modified prior to the date hereof, the "Existing Credit Agreement"; as
amended hereby and as further amended, restated, supplemented or otherwise
modified and in effect from time to time, the "Credit Agreement") among ATMOS
ENERGY MARKETING, LLC (formerly known as Woodward Marketing, L.L.C.), a Delaware
limited liability company (the "the Borrower"), the financial institutions from
time to time parties thereto (the "Banks"), FORTIS CAPITAL CORP., a Connecticut
corporation ("Fortis"), as a Bank, an Issuing Bank, Collateral Agent and
Administrative Agent for the Banks, and BNP PARIBAS, a bank organized under the
laws of France ("BNP Paribas"), as a Bank, an Issuing Bank and Documentation
Agent.

                  WHEREAS, the parties hereto desire to amend the Existing
Credit Agreement to make UFJ Bank Limited, New York Branch a "Bank" under the
Credit Agreement having an Uncommitted Line Portion equal to $10,000,000.

                  NOW, THEREFORE, in consideration of premises, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

                  1. Defined Terms. Unless otherwise defined herein, terms
defined in the Existing Credit Agreement are used herein as therein defined.

                  2. Amendments. The Existing Credit Agreement is hereby amended
as follows:

                  (a) The definition of "Banks" set forth in Section 1.01,
Certain Defined Terms, is hereby deleted in its entirety and the following new
definition is inserted in lieu thereof:

                           "Banks" shall initially mean Fortis, BNP Paribas,
         Societe Generale, Natexis Banques Populaires, New York Branch, and RZB
         Finance, LLC. From and after the Seventh Amendment Effective Date, the
         term "Banks" shall mean Fortis, BNP Paribas, Societe Generale, Natexis
         Banques Populaires, New York Branch, RZB Finance, LLC, UFJ Bank
         Limited, New York Branch, and each additional lending institution added
         to this Agreement, either through an amendment to this Agreement or
         through an Assignment and Acceptance in accordance with Subsection
         11.08(a) hereof. References to the "Banks" shall include Fortis and BNP
         Paribas, including each in its capacity as an Issuing Bank;

<PAGE>

         for purposes of clarification only, to the extent that Fortis or BNP
         Paribas may have any rights or obligations in addition to those of the
         Banks due to their status as an Issuing Bank and as Agents, Fortis' and
         BNP Paribas' status as such will be specifically referenced.

                  (b) Section 1.01 of the Existing Credit Agreement is hereby
amended by inserting in proper alphabetical order the following new defined
term:

                           "Seventh Amendment Effective Date" the "Effective
         Date", as defined in that certain Seventh Amendment and Joinder
         Agreement, dated as of December 19, 2003.

                  (c) Schedule 2.01 of the Existing Credit Agreement is hereby
deleted in its entirety and the schedule attached to this Amendment as Exhibit A
is inserted in lieu thereof.

                  3. Joinder Agreement. As of the Effective Date (defined
below), UFJ Bank Limited, New York Branch ("UFJ") shall become a party to the
Credit Agreement as a Bank, shall acquire all of the rights, powers and
obligations of a Bank under the Credit Agreement, and shall have an Uncommitted
Line Portion equal to $10,000,000. From and after the Effective Date, all
references to "Banks" in the Credit Agreement and the other Loan Documents shall
be deemed to include, in any event, UFJ.

                  4. Representations. To induce the Administrative Agent and the
Banks, including, without limitation, UFJ, to enter into this Amendment, the
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 that (a) no material adverse
change has occurred in the financial condition or business prospects of the
Borrower since the date of the last financial statements delivered to the
Administrative Agent and the Banks, (b) no Default or Event of Default has
occurred and is continuing, and (c) the Borrower is fully authorized to enter
into this Amendment. THE BORROWER ACKNOWLEDGES THAT THE CREDIT AGREEMENT
PROVIDES FOR A CREDIT FACILITY THAT IS COMPLETELY OPTIONAL ON THE PART OF THE
BANKS AND THAT THE BANKS HAVE ABSOLUTELY NO DUTY OR OBLIGATION TO ADVANCE ANY
REVOLVING LOAN OR TO ISSUE ANY LETTER OF CREDIT. BORROWER REPRESENTS AND
WARRANTS TO THE BANKS THAT BORROWER IS AWARE OF THE RISKS ASSOCIATED WITH
CONDUCTING BUSINESS UTILIZING AN UNCOMMITTED FACILITY.

                  5. Conditions Precedent. This Amendment shall become effective
on the first date (the "Effective Date") on which each of the following
conditions precedent shall have been satisfied:

                                      -2-

<PAGE>

                  (a) Delivered Documents. On the Effective Date, the
Administrative Agent shall have received executed originals of:

                  (i) this Amendment, executed by a duly authorized officer of
         each of the Borrower and the Required Banks, and the Administrative
         Agent shall have received such other documents or certificates as the
         Administrative Agent or counsel to the Administrative Agent may
         reasonably request; and

                  (ii) a Note, substantially in the form of Exhibit B hereto,
         executed by a duly authorized officer of the Borrower and payable to
         UFJ in a maximum principal amount equal to UFJ's Uncommitted Line
         Portion.

                  (b) No Default. On the Effective Date, the Borrower shall be
in compliance in all material respects with all of the terms and provisions set
forth in the Credit Agreement and the other Loan Documents on its part to be
observed and no Event of Default shall have occurred and be continuing.

                  6. Miscellaneous.

                  (a) Limited Effect. Except as expressly consented to hereby,
the Credit Agreement and the other Loan Documents shall remain in full force and
effect in accordance with their respective terms, without any consent,
amendment, waiver or modification of any provision thereof; provided, however,
that upon the Effective Date, all references herein and therein to the "Loan
Documents" shall be deemed to include, in any event, the Existing Credit
Agreement, the First Amendment, dated as of December 23. 2002, the Second
Amendment, dated as of February 7, 2003, the Third Amendment, dated as of
February 28, 2003, the Fourth Amendment, dated as of March 31, 2003, the Fifth
Amendment and Waiver, dated as of April 28, 2003, the sixth Amendment to Credit
Agreement, Global Amendment to Loan Documents and Waiver, dated as of October 1,
2003, the Amendment to Guaranty, dated as of October 1, 2003, this Amendment,
the Notes, the Guaranty, the Security Agreement, the L/C-Related Documents, the
Swap Contracts, the Three Party Agreement, the Atmos Support Agreement, and all
other documents delivered to the Administrative Agent or any Bank in connection
therewith. Each reference to the Credit Agreement in any of the Loan Documents
shall be deemed to be a reference to the Credit Agreement as amended hereby.

                  (b) 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.

                  (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

                                      -3-

<PAGE>

counterparts. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile or telecopier shall be effective as delivery of an
originally executed counterpart of this Amendment.

                  (d) Governing Law. This Amendment shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York;
provided, however, that the Administrative Agent, the Banks and all
Agent-Related Persons shall retain all rights under federal law.

                  (e) Rights of Third Parties. All provisions herein are imposed
solely and exclusively for the benefit of the Borrower, Administrative Agent,
the Banks, Agent-Related Persons, 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.

                               [SIGNATURES FOLLOW]

                                      -4-

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

                                BORROWER

                                ATMOS ENERGY MARKETING, LLC (formerly known as
                                Woodward Marketing, L.L.C.), a Delaware limited
                                liability company

                                By: /s/ JD Woodward III
                                   --------------------------------------------
                                Name:  JD Woodward III
                                Title: President

                                the Borrower's Address:
                                11251 Northwest Freeway, Suite 400
                                Houston, Texas  77092
                                Attention: Ronald W. Bahr
                                Telephone: (713) 688-7771
                                Facsimile: (713) 688-5124

                                GUARANTOR

                                ATMOS ENERGY HOLDINGS, INC.

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

                                1800 Three Lincoln Centre
                                5430 LBJ Freeway
                                Dallas, TX 75240

<PAGE>

                                FORTIS CAPITAL CORP.,
                                a Connecticut corporation, as Administrative
                                Agent, Collateral Agent, Issuing Bank, and a
                                Bank

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

                                By: /s/ Chad Clark
                                   --------------------------------------------
                                   Name: Chad Clark
                                   Title: Vice President

                                   15455 N. Dallas Parkway
                                   Suite 1400
                                   Addison, TX  75001
                                   Telephone: (214) 953-9313
                                   Facsimile: (214) 969-9332

<PAGE>

                                   BNP PARIBAS,
                                   a bank organized under the laws of France,
                                   as a Bank, Issuing Bank, and Documentation
                                   Agent

                                   By: /s/ Edward K. Chin
                                      -----------------------------------------
                                   Name:  Edward K. Chin
                                   Title: Director

                                   By: /s/ Zali Win
                                      -----------------------------------------
                                   Name: Zali Win
                                   Title: Director

                                   787 Seventh Avenue
                                   New York, New York  10019
                                   Attention: Ed Chin
                                   Telephone: (212) 841-2020
                                   Facsimile: (212) 841-2536

<PAGE>

                                   SOCIETE GENERALE, as a Bank

                                   By: /s/ Barbara Paulsen
                                      -----------------------------------------
                                   Name:  Barbara Paulsen
                                   Title: Vice President

                                   By: /s/ Emmanuel Chesneau
                                      ----------------------------------------
                                   Name:  Emmanuel Chesneau
                                   Title: Director

                                   1221 Avenue of the Americas
                                   New York, New York  10020
                                   Attention: Barbara Paulsen
                                   Telephone: (212) 278-6496
                                   Facsimile: (212) 278-7417

<PAGE>

                                    NATEXIS BANQUES POPULAIRES, NEW YORK BRANCH,
                                    as a Bank

                                    By: /s/ David Pershad
                                       ----------------------------------------
                                    Name: David Pershad
                                    Title: Vice President

                                    By: /s/ Guillaume de Parscau
                                       ----------------------------------------
                                    Name: Guillaume de Parscau
                                    Title: First Vice President & Manager

                                    1251 Avenue of the Americas, 34th Floor
                                    New York, New York  10020
                                    Attention: David Pershad
                                    Telephone: (212) 872-5015
                                    Facsimile: (212) 354-9095

<PAGE>

                                    RZB FINANCE LLC, as a Bank

                                    By:  /s/ Hermine Kirolos
                                       ----------------------------------------
                                    Name: Hermine Kirolos
                                    Title: Group Vice President

                                    By: /s/ Frank J. Yautz
                                       ----------------------------------------
                                    Name: Frank J. Yautz
                                    Title: First Vice President

                                    1133 Avenue of the Americas
                                    New York, New York  10036
                                    Attention: Hermine Kirolos
                                    Telephone: (212) 845-4114
                                    Facsimile: (212) 944-6389

<PAGE>

                                    UFJ BANK LIMITED, NEW YORK BRANCH, as a
                                    Bank

                                    By: /s/ L.J. Perenyi
                                       ----------------------------------------
                                    Name: L.J. Perenyi
                                    Title: Vice President

                                    -------------------------------------------

                                    -------------------------------------------
                                    Attention:
                                    Telephone:
                                    Facsimile:

<PAGE>

                                                                       Exhibit A

                                  SCHEDULE 2.01

                              UNCOMMITTED LINE AND
                            UNCOMMITTED LINE PORTION
                           (EXCLUDING SWAP CONTRACTS)

   I.       UNCOMMITTED LINE:

            A.       Maximum Line:                           $250,000,000.00

            B.       Total Line Amount Subscribed:           $220,000,000.00

            C.       Subscribed Percentage:                              88%

   II.      UNCOMMITTED LINE PORTIONS, SUBSCRIBED AMOUNTS:

<Table>
<Caption>
     Line:                  Bank                                        Dollar Amount                Share
     ----                   ----                                        -------------                -----
<S>                  <C>                                               <C>                         <C>
 Borrowing Base
      Line           Fortis Capital Corp.                              $75,000,000.00              34.09091%

                     BNP Paribas                                       $75,000,000.00              34.09091%

                     Societe Generale                                  $35,000,000.00              15.90909%

                     Natexis Banques Populaires,
                     New York Branch                                   $15,000,000.00               6.81818%

                     RZB Finance LLC                                   $10,000,000.00               4.54545%

                     UFJ Bank Limited,
                     New York Branch                                   $10,000,000.00               4.54545%

                     TOTAL SUBSCRIBED
                     BORROWING BASE LINE PORTIONS                     $220,000,000.00                 100%
</Table>

<PAGE>

                                                                       Exhibit B

                             FORM OF PROMISSORY NOTE

                                 (See Attached)

<PAGE>

                                 PROMISSORY NOTE

$10,000,000.00                                                December 19, 2003

--------------------------------------------------------------------------------

         1. FOR VALUE RECEIVED, ATMOS ENERGY MARKETING, LLC (formerly known as
Woodward Marketing, L.L.C.), a Delaware limited liability company (the
"Borrower") promises to pay to the order of UFJ BANK LIMITED, NEW YORK BRANCH
(the "the Lender"), at the office of Administrative Agent (as defined in the
Uncommitted Amended and Restated Credit Agreement (hereinafter defined)) located
at Administrative Agent's Payment Office, or at such other place as the Lender
from time to time may designate, the principal sum of Ten Million and no/100
Dollars ($10,000,000.00) (the "Maximum Loan Amount"), or so much of that sum as
may be advanced under this promissory note ("Note"), plus interest as specified
in this Note. This Note evidences a loan ("Loan") from the Lender to the
Borrower.

         2. This Note is issued pursuant to that one certain Uncommitted Amended
and Restated Credit Agreement, dated as of July 1, 2002 (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the "Credit
Agreement"), among the Borrower, the financial institutions from time to time
parties thereto (the "Banks"), Fortis Capital Corp., as a Bank, an Issuing Bank,
Collateral Agent and Administrative Agent for the Banks, and BNP Paribas, as a
Bank, an Issuing Bank and Documentation Agent. Some or all of the Loan Documents
(as defined in the Credit Agreement), including the Credit Agreement, contain
provisions for the acceleration of the maturity of this Note.

         3. This Note shall bear interest as is provided for in the Credit
Agreement.

         4. Principal and accrued interest hereunder shall be due and payable on
demand made in writing, or if no written demand is made, then as is provided for
in the Credit Agreement.

         5. The Borrower may prepay the principal under this Note only in
accordance with the Credit Agreement.

         6. If any Event of Default (as defined in the Credit Agreement) occurs,
at the holder's option, exercisable in its sole discretion, all sums of
principal and interest under this Note shall become immediately due and payable
without notice of acceleration or intent to accelerate, notice of default,
presentment or demand for payment, protest or notice of nonpayment or dishonor,
or other notices or demands of any kind or character, provided, however, that
upon the occurrence of any event specified in subsection (e) or (f) of Section
9.01 of the Credit Agreement, the obligation of the Lender to make Loans

<PAGE>

and any obligations of the Lender to issue Letters of Credit (as defined in the
Credit Agreement) shall automatically terminate and Cash Collateral in an amount
equal to the maximum aggregate amount that is or at any time thereafter may
become available for drawing by the beneficiary under any outstanding Letters of
Credit (whether or not any beneficiary shall have presented, or shall be
entitled at such time to present, the drafts or other documents required to draw
under such Letters of Credit) together with the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Lender.

         7. All amounts payable under this Note are payable in lawful money of
the United States during normal business hours of the Administrative Agent at
the Administrative Agent's Payment Office. Checks constitute payment only when
collected.

         8. If any lawsuit, reference or arbitration is commenced which arises
out of or relates to this Note, the Loan Documents or the Loan, the prevailing
party shall be entitled to recover from each other party such sums as the court,
referee or arbitrator may adjudge to be reasonable attorneys' fees in the
action, reference or arbitration, in addition to costs and expenses otherwise
allowed by law. In all other situations, including any matter arising out of or
relating to any Insolvency Proceeding (as defined in the Credit Agreement), the
Borrower agrees to pay all of the Lender's reasonable costs and expenses,
including attorneys' fees, which may be incurred in enforcing or protecting the
Lender's rights or interests. From the time(s) incurred until paid to the
Lender, all such sums shall bear interest at the Default Rate (as defined in the
Credit Agreement).

         9. Whenever the Borrower is obligated to pay or reimburse the Lender
for any attorneys' fees, those fees shall include the reasonably allocated costs
for services of in-house counsel.

         10. THIS NOTE IS GOVERNED BY, AND SHALL BE CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         11. The Borrower agrees that the holder of this Note may accept
additional or substitute security for this Note, or release any security or any
party liable for this Note, and without affecting the liability of any the
Borrower.

         12. If the Lender delays in exercising or fails to exercise any of its
rights under this Note, that delay or failure shall not constitute a waiver of
any of the Lender's rights, or of any breach, default or failure of condition of
or under this Note. No waiver by the Lender of any of its rights, or of any such
breach, default or failure of condition shall be effective, unless the waiver is
expressly stated in writing signed by the Lender. All of the Lender's remedies
in connection with this Note or under applicable law shall be cumulative, and
the Lender's exercise of any one or more of those remedies shall not constitute
an election of remedies.

<PAGE>

         13. Regardless of any provision contained in this Note or in any of the
other Loan Documents, the Lender shall never be deemed to have contracted for or
be entitled to receive, collect or apply as interest on the Loan, pursuant to
this Note or any other Loan Document, or otherwise, any amount in excess of the
maximum rate of interest permitted to be charged by applicable law, and, in the
event that the Lender ever receives, collects or applies as interest any such
excess, such amount which would be excessive interest shall be applied to the
reduction of the unpaid principal balance of the Loan, and, if the principal
balance of the Loan is paid in full, any remaining excess shall forthwith be
paid to the Borrower. In determining whether or not the interest paid or payable
under any specific contingency exceeds the highest lawful rate, the Borrower and
the Lender shall, to the maximum extent permitted under applicable law, (a)
characterize any non-principal payment as an expense, fee, or premium, rather
than as interest, (b) exclude voluntary prepayments and the effect thereof, and
(c) spread the total amount of interest throughout the entire contemplated term
of the Loan so that the interest rate is uniform throughout such term; provided,
that if the Loan is paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual term
thereof exceeds the maximum lawful rate, the Lender shall refund to the Borrower
the amount of such excess, or credit the amount of such excess against the
aggregate unpaid principal balance of the Loan at the time in question.

         14. This Note inures to and binds the successors and assigns of the
Borrower and the Lender; provided, however, that the Borrower may not assign
this Note or any Loan funds, or assign or delegate any of its rights or
obligations, without the prior written consent of the Lender in each instance.

         15. As used in this Note, the terms "the Lender", "holder" and "holder
of this Note" are interchangeable. As used in this Note, the word "include(s)"
means "include(s), without limitation," and the word "including" means
"including, but not limited to."

         16. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN 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 BETWEEN THE PARTIES.

                            [SIGNATURE PAGE FOLLOWS]

<PAGE>

                              BORROWER

                              ATMOS ENERGY MARKETING, LLC (formerly known as
                                Woodward Marketing, L.L.C.), a Delaware limited
                                liability company

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

                                 Address:

                                 11251 Northwest Freeway, Suite 400
                                 Houston, Texas  77092
                                 Attention: Ronald W. Bahr
                                 Telephone: (713) 688-7771
                                 Facsimile: (713) 688-5124

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