Document:

exv4wa

 

Exhibit 4-A

SECOND AMENDMENT TO CREDIT AGREEMENT

     THIS SECOND AMENDMENT, dated as of April 29, 2003, amends and modifies a
certain Credit Agreement, dated as of April 30, 2002, as amended by an
amendment dated as of September 19, 2002 (as so amended, the “Credit
Agreement”), among OTTER TAIL CORPORATION, a Minnesota corporation (the
“Borrower”), U.S. BANK NATIONAL ASSOCIATION, as Agent (in such capacity, the
“Agent”), and the Banks, as defined therein. Terms not otherwise expressly
defined herein shall have the meanings set forth in the Credit Agreement.

     FOR VALUE RECEIVED, the Borrower, the Agent and the Banks agree that the
Credit Agreement is amended as follows.

ARTICLE I — AMENDMENT TO THE CREDIT AGREEMENT

     1.1 Termination Date. The definition of “Termination Date” in Section
1.1 is amended by deleting “April 29, 2003” and inserting “April 28, 2004” in
place thereof.

     1.2 Purpose. Section 2.9 is amended to read as follows:

		
	 	     Section 2.9 Purpose of the Loans. The Loans shall be used for
purposes of funding working capital, capital expenditures, and other
corporate purposes of the Borrower, provided, that Loans shall be used
only to support non-electrical operations of the Borrower and its
Subsidiaries.

     1.3 Correction. References to “Commitment Fees” in Sections 4.3, 4.4,
5.1(a) and 12.3(d) are changed to “Utilization Fees and Facility Fees”.

     1.4 Construction. All references in the Credit Agreement to “this
Agreement”, “herein” and similar references shall be deemed to refer to the
Credit Agreement as amended by this Amendment.

ARTICLE II — REPRESENTATIONS AND WARRANTIES

     To induce the Agent and the Banks to enter into this Amendment and to make
and maintain the Loans under the Credit Agreement as amended hereby, the
Borrower hereby warrants and represents to the Agent and the Banks that it is
duly authorized to execute and deliver this Amendment, and to perform its
obligations under the Credit Agreement as amended hereby, and that this
Amendment constitutes the legal, valid and binding agreement of the Borrower,
enforceable in accordance with its terms.

 

 

ARTICLE III — CONDITIONS PRECEDENT

     This Amendment shall become effective on the date first set forth above,
provided, however, that the effectiveness of this Amendment is subject to the
satisfaction of each of the following conditions precedent:

     3.1 Warranties. Before and after giving effect to this Amendment, the
representations and warranties in Article VII of the Credit Agreement shall be
true and correct as though made on the date hereof, except for changes that are
permitted by the terms of the Credit Agreement. The execution by the Borrower
of this Amendment shall be deemed a representation that the Borrower has
complied with the foregoing condition.

     3.2 Defaults. Before and after giving effect to this Amendment, no
Default and no Event of Default shall have occurred and be continuing under the
Credit Agreement. The execution by the Borrower of this Amendment shall be
deemed a representation that the Borrower has complied with the foregoing
condition.

     3.3 Documents and Fee. The following shall have been executed and
delivered to the Agent and the Borrower shall have paid to the Agent the
following fee:

	 	 	 
	 	 	
(a) This Amendment, executed by the Borrower, the Agent and the Banks;
	 	 	 
	 	 	
(b) The Acknowledgment in the form attached hereto, executed by the
Guarantor; and
	 	 	 
	 	 	
(c) A non-refundable fee of $25,000 in consideration of the extension of
the Commitments hereunder, which fee shall be divided and paid by the
Agent to the Banks in proportion to their respective Percentages.

ARTICLE IV — GENERAL

     4.1 Expenses. The Borrower agrees to reimburse the Agent upon demand for
all reasonable expenses (including reasonable attorneys’ fees and legal
expenses) incurred by this Agent in the preparation, negotiation and execution
of this Amendment and any other document required to be furnished herewith.

     4.2 Counterparts. This Amendment may be executed in as many counterparts
as may be deemed necessary or convenient, and by the different parties hereto
on separate counterparts, each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
instrument.

     4.3 Severability. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.

2

 

     4.4 Law. This Amendment shall be a contract made under the laws of the
State of Minnesota, which laws shall govern all the rights and duties
hereunder.

     4.5 Successors; Enforceability. This Amendment shall be binding upon the
Borrower, and Agent and the Banks and their respective successors and assigns,
and shall inure to the benefit of the Borrower, the Agent and the Banks and the
successors and assigns of the Agent and the Banks. Except as hereby amended,
the Credit Agreement shall remain in full force and effect and is hereby
ratified and confirmed in all respects.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed at Minneapolis, Minnesota by their respective officers thereunto duly
authorized as of the date first written above.

	 	 	 
	 	OTTER TAIL CORPORATION

	 	 	 
	 	By:	
/s/ Kevin G. Moug

	 
	 	Title:	
C.F.O. & Treasurer

	 	 	 
	 	U.S. BANK NATIONAL ASSOCIATION,

             as Agent and a Bank

	 	 	 
	 	By:	
/s/ Randy Salzwedel

      Randy A. Salzwedel

      Vice President

	 	 	 
	 	BANK ONE, N.A., as a Bank
	 
	 	By:	
/s/ Sharon K. Webb

	 
	 	Title:	
Associate Director

	 	 	 
	 	BANK HAPOALIM B.M., as a Bank
	 
	 	By:	
/s/ Laura Raffa

	 
	 	Title:	
Senior Vice President

	 
	 	and	 
	 
	 	By:	
/s/ James Surless

	 
	 	Title:	
Vice President

3

 

ACKNOWLEDGMENT AND JOINER

     Reference is made to the Guaranty, dated as of April 30, 2002 (the
“Guaranty”) pursuant to which the undersigned, as Guarantor (the “Guarantor”)
has guaranteed payment and performance of obligations of Otter Tail Corporation
(the “Borrower”) to U.S. Bank National Association, as Agent, and the Banks
(the “Creditors”) under the Credit Agreement among the Borrower and the
Creditors dated as of April 30, 2002 (as thereafter amended, the “Credit
Agreement”) and under each Note and Loan Document, as defined in the Credit
Agreement. The Guarantor acknowledges that it has received a copy of the
proposed Second Amendment to the Credit Agreement, to be dated on or about
April 29, 2003 (the “Amendment”). The Guarantor agrees and acknowledges that
the Amendment shall in no way impair or limit the right of the Creditors under
the Guaranty, and confirm that by the Guaranty, the Guarantor continues to
guaranty payment and performance of the obligations of the Borrower to the Bank
under the Credit Agreement as amended pursuant to the Amendment. The Guarantor
hereby confirms that the Guaranty remains in full force and effect, enforceable
against the Guarantor in accordance with its terms.

Dated as of April 29, 2003.

	 	 	 
	 	VARISTAR CORPORATION
	 
	 	By:	
/s/ Kevin G. Moug

	 
	 	Title:	
C.F.O. & Treasurer<PAGE>
                                                                     EXHIBIT 4.1

                          REGISTRATION RIGHTS AGREEMENT

      This Registration Rights Agreement, dated as of June 30, 2003 (this
"Agreement"), is entered into by and between Atmos Energy Corporation, a Texas
and Virginia corporation ("Issuer"), and Gary A. Morris, as Asset Manager (the
"Asset Manager").

                                    RECITALS

      A. WHEREAS, in connection with its funding of the Atmos Energy Corporation
Pension Account Plan (the "Plan"), on or about the date hereof, Issuer will
issue to the Atmos Energy Corporation Master Retirement Trust (the "Trust") for
the benefit of the Plan, shares of common stock, no par value, of Issuer (the
"Common Stock"); and

      B. WHEREAS, the Asset Manager is an investment adviser satisfying the
requirements of Section 3(38) of the Employee Retirement Income Security Act of
1974, as amended, duly appointed pursuant to the Trust Agreement, dated as of
January 2, 1998, for the Plan (the "Trust Agreement") to act as Asset Manager
(as defined in the Trust Agreement) with respect to such shares of Common Stock,
which will be held in a segregated investment fund account in the Trust for the
benefit of the Plan (the "Directed Fund"); and

      C. WHEREAS, in connection with such issuance of the Common Stock, Issuer
has agreed to grant to the Asset Manager certain registration rights, as set
forth herein, with respect to Registrable Securities held in the Directed Fund.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants, and agreements hereinafter set forth,
the parties hereto agree as follows:

      1. Definitions.

            (a) "Registrable Securities" means (i) all of the Common Stock
issued in connection with the funding of the Plan on or about the date hereof,
plus (ii) all other securities of Issuer issued in respect of such Common Stock,
by way of a stock split, stock dividend, recapitalization, merger or
consolidation, or otherwise, but exclusive of (iii) any securities described in
clause (i) or (ii) above (x) that are sold by the Asset Manager in a public
offering registered under the Securities Act or any private transaction exempt
from registration under the Securities Act or (y) that can be sold pursuant to
Rule 144(k) (or any successor provision thereto) promulgated under the
Securities Act.

            (b) "Registration Expenses" means all expenses incident to Issuer's
performance of or compliance with this Agreement, including all registration,
filing, listing and NASD fees, all fees and expenses of complying with
securities or blue sky laws, all word

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processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and expenses of counsel for Issuer and of its independent public
accountants, including the expenses of any audits or "comfort" letters required
by or incident to such performance and compliance and any fees and disbursements
of underwriters customarily paid by issuers of securities, but excluding
underwriting discounts and commissions, transfer taxes, if any, and the fees and
expenses of any counsel retained by the Asset Manager.

      2. Demand Registration Rights.

            (a) Demand. At any time prior to June 30, 2005, the Asset Manager
may make a request in writing (a "Demand Request") that Issuer register all or
part of the Registrable Securities under the Securities Act for the purpose of
effecting an underwritten offering thereof (a "Demand Offering"); provided,
however, that the Registrable Securities proposed to be sold by the Asset
Manager in such Demand Offering have an aggregate offering price of at least $10
million (unless all remaining Registrable Securities are to be sold, in which
case such request may relate to Registrable Securities having an aggregate
offering price of less than $10 million). Each Demand Request shall specify the
number of Registrable Securities proposed to be sold. Subject to the terms and
provisions of this Agreement, Issuer shall prepare and file, within 60 days
after receiving a Demand Request, a registration statement under the Securities
Act required to permit the offering of such Registrable Securities (provided,
that Issuer shall in no event be required to file any such registration
statement prior to September 30, 2003 and may delay the filing as provided in
the last sentence of this Section 2(a)) and shall use all commercially
reasonable efforts to cause any such registration statement to be declared
effective by the SEC as promptly as practicable after any such filing; provided,
that Issuer need register only three Demand Offerings and Issuer need not file
more than one such registration statement in any 12-month period. If at the time
of a Demand Request Issuer has initiated bona fide discussions with an
underwriter regarding the sale by Issuer of securities in a registered public
offering and, in the opinion of such underwriter, the filing of a registration
statement under this Section 2(a) would adversely affect such offering, Issuer
may delay such filing for up to 90 days from the date of such offering, but not
more than 120 days after the receipt of the Demand Request; provided, that only
one such delay shall be permitted in any 12-month period.

            (b) Underwriting Requirements in Demand Registration; Selection of
Underwriters. The offering of Registrable Securities pursuant to a Demand
Offering shall be in the form of a "firm commitment" underwritten offering.
Issuer shall select the investment banking firm or firms to manage the
underwritten offering, subject to the reasonable approval of the Asset Manager.

            (c) Underwriting Agreement. If the Asset Manager proposes to
distribute Registrable Securities pursuant to a Demand Offering, the Asset
Manager shall, together with Issuer, enter into an underwriting agreement in
customary form with the investment banking firm or firms selected by Issuer to
manage the underwritten offering.

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<PAGE>
            (d) Priority in Demand Offerings. All securities to be sold for the
account of the Trust, any other Person that Issuer is obligated to include
therein, and Issuer shall be included in a Demand Offering unless the managing
underwriter or underwriters shall advise Issuer in writing that the inclusion of
all such securities is reasonably likely to materially and adversely affect the
price or success of the offering (a "Material Adverse Effect"), in which case
the securities of such other Persons and Issuer shall be excluded to the extent
required to avoid the reasonable likelihood of a Material Adverse Effect.

      3. "Piggy-Back" Registration Rights.

            (a) Right to Include Registrable Securities. If, at any time prior
to June 30 2005, Issuer proposes to register any shares of Common Stock under
the Securities Act in connection with an underwritten public offering of such
shares of Common Stock solely for cash (other than a registration (i) on Form
S-8 or any form which does not include substantially the same information as
would be required to be included in a registration statement covering the sale
of the Registrable Securities, (ii) with respect to an employee benefit plan,
(iii) solely in connection with a Rule 145 transaction under the Securities Act,
or (iv) of convertible debt), whether or not for sale for its own account (a
"Proposed Registration"), Issuer will give prompt written notice (which shall be
at least 20 days prior to filing) to the Asset Manager of its intention to do
so, and the Asset Manager's rights under this Section 3. Upon the written
request of the Asset Manager made within ten days after the receipt of any such
notice, Issuer will use reasonable efforts to include in such registration the
Registrable Securities then held by the Trust that the Asset Manager so
requests; provided, however, that Issuer shall not be obligated to register such
Registrable Securities if or to the extent, at any time after receiving written
notice of a Proposed Registration and prior to the effective date of the
registration statement filed in connection with such Proposed Registration,
Issuer shall determine for any reason not to register Common Stock or to delay
the Proposed Registration.

            Notwithstanding anything in this Section 3(a) to the contrary,
Issuer shall be under no obligation to provide written notice to the Asset
Manager with respect to, and the Asset Manager will have no rights to register
the Registrable Securities under this Section 3(a) as a result of, any
registration statement filed prior to the date hereof (including any supplement
or amendment filed with respect thereto).

            (b) Delayed Offerings. If a Proposed Registration contemplates
future delayed offerings of shares of Common Stock for cash by the Company
pursuant to Rule 415 under the Securities Act (a "Rule 415 Registration"), the
Asset Manager shall not be entitled to participate in any such delayed offering
unless the Asset Manager has duly requested, pursuant to Section 3(a), and has,
named the Trust as a selling shareholder in a registration statement filed in
connection with such Rule 415 Registration prior to its effectiveness, and then
only in respect of the number of Registrable Securities included therein. The
Trust being named as a selling shareholder in a registration statement filed in
connection with a Rule 415 Registration shall not entitle the Asset Manager to
sell any Registrable Securities under such registration statement, except in
connection with an underwritten public offering of shares of Common Stock for
cash

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<PAGE>
by the Company. The participation in any delayed offering of Common Stock by the
Company shall be conditioned upon the requirements of this Section 3(b), and the
notices, possible cutbacks and other terms and conditions applicable to Proposed
Registrations set forth in this Agreement shall apply thereto.

            (c) Underwriting Requirements in Piggy-back Registration; Selection
of Underwriters. The right of the Asset Manager to include Registrable
Securities in a Proposed Registration shall be conditioned upon the Asset
Manager's participation in the related underwriting and the inclusion of
Registrable Securities in such underwriting to the extent provided herein. The
selection of the underwriter or underwriters for the public offering to be made
pursuant to a registration statement filed in connection with a Proposed
Registration shall be made by Issuer, in its sole discretion.

            (d) Underwriting Agreement. The Asset Manager shall become a party
to the underwriting agreement between Issuer and the underwriter or underwriters
selected by Issuer.

            (e) Priority. If, in connection with a Proposed Registration, the
managing underwriter advises Issuer in writing that, in its opinion, the number
of Registrable Securities requested by the Asset Manager to be included pursuant
to Section 3(a) exceeds the number which can be sold without the reasonable
likelihood of a Material Adverse Effect, then the number of Registrable
Securities to be registered shall be limited by withdrawing from registration
the shares of: first, the Trust and any other Persons then holding piggy-back
registration rights with respect to such registration pro rata; then, Issuer;
and then, any Person then holding demand registration rights with respect to
such registration.

      4. Registration Procedures. If and whenever Issuer is required to use
reasonable efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Section 2 or Section 3, Issuer will,
subject to the terms and conditions of this Agreement:

            (a) prepare and file with the SEC a registration statement to effect
such registration and use reasonable efforts to cause such registration
statement to become effective;

            (b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to comply
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until the earlier of such time
as all of such Registrable Securities have been disposed of in accordance with
the intended methods of disposition or the expiration of 90 days after such
registration statement becomes effective;

            (c) furnish to the Asset Manager such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents as the Asset Manager may reasonably request;

                                       4
<PAGE>
            (d) use reasonable efforts to register or qualify, prior to the
effective date of such registration, all Registrable Securities covered by such
registration statement under such securities or blue sky laws of such
jurisdictions as the Asset Manager shall reasonably request, to keep such
registration or qualification in effect for so long as such registration
statement remains in effect;

            (e) furnish, at the request of the Asset Manager, on the date that
such Registrable Securities are delivered to the underwriters for sale, (i) a
copy of any opinion of counsel to Issuer addressed to the underwriters or Issuer
and (ii) a copy of any letters from the independent accountants of Issuer,
addressed to the underwriters or Issuer;

            (f) (i) immediately notify the Asset Manager, at any time when a
      prospectus relating thereto is required to be delivered under the
      Securities Act, of the happening of any event or the existence of any
      condition as a result of which the prospectus included in such
      registration statement, as then in effect, includes an untrue statement of
      a material fact or omits to state any material fact required to be stated
      therein or necessary to make the statements therein not misleading in the
      light of the circumstances under which they were made, or, if in the
      opinion of counsel for Issuer, it is necessary to supplement or amend such
      prospectus to comply with law and, after such notice,

                (ii) at the request of the Asset Manager, promptly prepare and
      furnish to the Asset Manager and his counsel a reasonable number of copies
      of a supplement to or an amendment of such prospectus as may be necessary
      so that, as thereafter delivered to the purchasers of such securities,
      such prospectus shall not include an untrue statement of a material fact
      or omit to state a material fact required to be stated therein or
      necessary to make the statements therein not misleading in light of the
      circumstances under which they were made or such prospectus, as
      supplemented or amended, shall comply with law;

            (g) use reasonable efforts to list or admit all Registrable
Securities covered by such registration statement on any securities exchange on
which any of the Registrable Securities are then listed or any other trading
market on which any of the Registrable Securities are then admitted for trading;

            (h) promptly notify the Asset Manager and the underwriter or
underwriters, if any, of the notification to the Company by the SEC of its
initiation of any proceeding with respect to the issuance by the SEC of, or of
the issuance by the SEC of, any stop order suspending the effectiveness of such
registration statement; and

            (i) pay all Registration Expenses relating to any such registration.

      5. Asset Manager Obligations.

            (a) Issuer may require the Asset Manager, in connection with any
registration is being effected pursuant to Section 2 or Section 3, to furnish
Issuer with such information and undertakings regarding the distribution of such
securities as Issuer may from time to time reasonably request in writing.

                                       5
<PAGE>
            (b) The Asset Manager agrees:

                  (i) that upon receipt of any notice from Issuer of the
      happening of any event of the kind described in Section 4(f), the Asset
      Manager will forthwith discontinue the disposition of Registrable
      Securities pursuant to the registration statement relating to such
      Registrable Securities until the Asset Manager's receipt of the copies of
      the supplemented or amended prospectus contemplated by Section 4(f) and,
      if so directed by Issuer, will deliver to Issuer all copies, other than
      permanent file copies, then in the Asset Manager's possession of the
      prospectus relating to such Registrable Securities current at the time of
      receipt of such notice, and

                  (ii) that the Asset Manager will immediately notify Issuer, at
      any time when a prospectus relating to the registration of such
      Registrable Securities is required to be delivered under the Securities
      Act, of the happening of any event as a result of which information
      previously furnished by the Asset Manager to Issuer in writing for
      inclusion in such prospectus contains an untrue statement of a material
      fact or omits to state any material fact required to be stated therein or
      necessary to make the statements therein not misleading in the light of
      the circumstances under which they were made.

In the event Issuer or the Asset Manager shall give any such notice, the period
referred to in Section 4(b) shall be extended by a number of days equal to the
number of days during the period from and including the giving of notice
pursuant to Section 4(f) to and including the date when the Asset Manager shall
have received the copies of the supplemented or amended prospectus contemplated
by Section 4(f).

      6. Holdback Agreement.

            The Asset Manager agrees, if reasonably required by a managing
underwriter of any offering referred to in Section 2 or Section 3, not to offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly,
any Registrable Securities pursuant to Section 2 or Section 3, enter into any
transaction which would have the same effect, or enter into any swap, hedge or
other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of such securities, however any such transaction is to
be settled, or publicly disclose any intention to do so, during the seven days
prior to and for up to 90 days after the date of such offering, except as part
of such offering (to the extent the Asset Manager may participate therein as
provided herein), whether or not the Asset Manager participates or is permitted
to participate in the registration for such offering.

      7. Certain Rights of Asset Manager. Issuer will not file any registration
statement under the Securities Act which refers to the Asset Manager by name or
the Trust otherwise as a selling shareholder without the prior written approval
of the Asset Manager, which may not be unreasonably withheld or delayed. Issuer
will furnish drafts of any such registration statement to the Asset Manager and
his counsel as soon as reasonably practicable prior to the anticipated filing
date in order to provide the Asset Manager and his counsel a reasonably adequate
period for review.

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<PAGE>
      8. Indemnification.

            In the event of any registration of any Registrable Securities under
the Securities Act, Issuer will, and hereby does, to the full extent permitted
by law indemnify and hold harmless the Asset Manager and each other Person, if
any, who controls the Asset Manager within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any
losses, claims, damages or liabilities, joint or several (or actions or
proceedings, whether commenced or threatened, in respect thereof, whether or not
the Asset Manager is a party thereto, and including reasonable costs of
investigation and legal expenses) (collectively, "Claims"), to which the Asset
Manager may become subject under the Securities Act or otherwise, insofar as
such Claims arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto (if used during the period
Issuer is required to keep the registration statement current) or any documents
incorporated therein (collectively, "Registration Documents"), or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading (in the case
of a prospectus or preliminary prospectus, in light of the circumstances in
which they were made), or any violation by Issuer of the Securities Act or any
state securities law, or any rule or regulation promulgated under the Securities
Act or any state securities law, or any other law applicable to Issuer relating
to any such registration, and Issuer will reimburse the Asset Manager for any
legal or any other expenses reasonably incurred by the Asset Manager in
connection with investigating or defending any such Claim; provided, however,
that Issuer shall not be liable in any such case to the extent that any such
Claim or expense arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any such Registration
Document in reliance upon and in conformity with written information furnished
to Issuer through an instrument duly executed by the Asset Manager stating that
it is for use in the preparation thereof. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Asset Manager and shall survive the transfer of such securities by the Asset
Manager.

      9. Representations, Warranties and Covenants.

            (a) Investment Purposes. The Asset Manager understands that the
shares of Common Stock to be issued to the Trust on or about the date hereof
(the "Shares") will be issued without registration under the Securities Act, in
reliance upon an exemption from registration under the Securities Act. The Asset
Manager hereby represents and warrants that the Shares will be acquired for the
account of the Trust for investment purposes only and not with a view to resale
or other distribution thereof, in whole or in part, except as contemplated by
this Agreement; provided, however, that, subject to the terms hereof, the
disposition of the property in the Directed Fund shall at all times be within
the control of the Asset Manager. The Asset Manager will not assign, sell,
hypothecate or otherwise transfer the Shares unless (i)(a) a registration
statement is in effect under the Securities Act with respect to such shares or
(b) a written opinion of counsel acceptable to Issuer is obtained to the effect
that no such registration is required, and (ii) the Asset Manager has complied
with all applicable holding periods imposed by the Securities Act (and the
regulations thereunder). The Asset Manager acknowledges that a restrictive
legend to such effect will be placed on the certificates representing the Shares
and a

                                       7
<PAGE>
notation will be made in the appropriate records of Issuer indicating that the
Shares are subject to such restrictions on transfer.

            (b) Future Agreements. For so long as the Trust owns any Registrable
Securities, Issuer shall not hereafter agree with any purchaser of any
securities to be issued by Issuer to register such securities under the
Securities Act unless the rights so granted, if exercised, would not conflict
with, be inconsistent with or violate any provision of this Agreement, including
the provisions of Section 2(d) and 3(e). The grant of demand registration rights
shall be deemed not to be inconsistent with the provisions of this Agreement.

      10. Notices. All notices, requests and other communications hereunder must
be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to the parties at the following addresses or facsimile numbers:

               If to Atmos, to:

               Atmos Energy Corporation
               1800 Three Lincoln Centre
               5430 LBJ Freeway
               Dallas, TX  75240
               Attn:  General Counsel
               Facsimile No.:  (972) 855-3080

               If to the Asset Manager, to:

               Gary A. Morris
               Registered Investment Adviser
               5310 Harvest Hill Road, Suite 192
               Dallas, Texas  75230
               Facsimile No.:  (972) 991-5055

      All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 10, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 10, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section 10, be deemed given upon receipt. Any party from time to time may
change its or his address, facsimile number or other information for the purpose
of notices to that party by giving notice specifying such change to the other
party hereto.

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<PAGE>
      11. Amendments; Waivers. Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by all parties hereto, or in the case of a waiver, by
the party against whom the waiver is to be effective.

      12. Assignment; Binding Effect. No party hereto may assign either this
Agreement or any of its or his rights, interests or obligations hereunder
without the prior written approval of each other party. This Agreement is
binding upon, inures to the benefit of and is enforceable by the parties hereto
and their respective successors and permitted assigns.

      13. Governing Law. This Agreement shall be construed in accordance with
and governed by the internal laws (without reference to choice or conflict of
laws that would apply any other law) of the State of Texas.

      14. Counterparts. This Agreement may be signed in any number of
counterparts and the signatures delivered by telecopy, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.

      15. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, understandings and negotiations, both written and oral,
between the parties with respect to the subject matter of this Agreement.

      16. Severability. If any provision of this Agreement, or the application
thereof to any Person, place or circumstance, shall be held by a court of
competent jurisdiction to be invalid, unenforceable or void, the remainder of
this Agreement and such provisions as applied to other Persons, places and
circumstances shall remain in full force and effect only if, after excluding the
portion deemed to be unenforceable, the remaining terms shall provide for the
consummation of the transactions contemplated hereby in substantially the same
manner as originally set forth at the later of the date this Agreement was
executed or last amended.

      17. Third Party Beneficiaries. The terms and provisions of this Agreement
are intended solely for the benefit of each party hereto and their respective
successors or permitted assigns, and it is not the intention of the parties to
confer third-party beneficiary rights upon any other Person; provided that the
Asset Manager may enforce the provisions of Section 8 for the benefit of each
other Person, if any, who is entitled to indemnification under Section 8.

                    [SIGNATURES BEGINNING ON FOLLOWING PAGE]

                                       9
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.

                                    ATMOS ENERGY CORPORATION

                                    By:  /s/ JOHN P. REDDY
                                         -------------------------------
                                         Name:  John P. Reddy
                                         Title: Senior Vice President,
                                                and Chief Financial Officer

                                    /s/ GARY A. MORRIS
                                    ------------------------------------
                                    Gary A. Morris, as Asset Manager

                                       10

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