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ATMOS energy The City of Paris, Texas P.O. Box 9037 Paris, Texas 75461-9037 January 16, 2006 Re: Agreement on Damage to Distribution Facilities Attached, please find two versions of letters of agreement regarding damages to facilities. As stated in the attached agreements, The City of Paris, Texas (CitylTown) and Atmos Energy Corporation, Mid-Tex Division (Mid-Tex) both operate facilities within the public rights-of-way of CitylTown. On occasion, our respective employees damage those facilities during excavation activity. In order to avoid future misunderstandings concerning the responsibility for the cost of repairing facilities damaged during excavation activities, Mid-Tex desires to execute an agreement with CitylTown concerning property damage claims. Mid-Tex values the relationship that we have developed with CitylTown and desires to continue to foster a positive working relationship. Therefore, it is the preference of Mid-Tex to execute a reciprocal agreement whereby each entity would, at its own expense, repair damages caused by the other. However, an alternative agreement is also enclosed under which each entity would repair damages caused by the other and invoice the other for the cost of those repairs. Whichever agreement is executed, that agreement will remain in full force and effect until one party gives written notice to the other party of termination at least 30 days prior to the proposed termination date. Any such termination will not affect either party's obligation to pay for any damage that occurs prior to the termination date. Please review both of the enclosed documents and determine which is acceptable to CitylTown. Then have the selected agreement executed by the appropriate CitylTown official and return one fully-executed copy to me. Please contact me with any comments or questions about this matter. Atmos Energy Corporation Mid-Tex Division 7909 Traders Circle Greenville, Texas 75402