Issuing & Paying Agency Agreement

ISSUING AND PAYING AGENCY AGREEMENT


The Bank of New York 10161 Centurion Parkway Jacksonville, Florida 32256


Attn: Corporate Trust Department, Derek Kettel


Re: AGL Capital Corporation Commercial Paper Program


Ladies and Gentlemen:


This letter sets forth the understanding between you and AGL Capital Corporation (the "Company"), whereby you have agreed to act (a) as depositary for the safekeeping of certain notes of the Company which may be issued and sold in the United States commercial paper market (the "CP Notes"; such Commercial Paper Notes when issued in book-entry form being hereinafter referred to as "Book-Entry CP Notes" and when issued in the form of certificated promissory notes being hereinafter referred to as the "Certificated CP Notes"), (b) as issuing agent on behalf of the Company in connection with the issuance of the CP Notes, (c) as paying agent to undertake certain obligations to make payments in respect of the CP Notes, and (d) as depositary to receive certain funds on behalf of the Company, as set forth herein. You have executed or will promptly hereafter execute a Letter of Representations (the "Letter of Representations", which term shall include the procedures referred to therein) with the Company and The Depository Trust Company ("DTC") and a Certificate Agreement (the "Certificate Agreement") with DTC which establish or will establish, among other things, the procedures to be followed by you in connection with the issuance and custody of Book-Entry CP Notes.


This letter (the "Agreement") will govern your rights, powers and duties as such depositary, issuing agent and paying agent for the CP Notes and no implied covenants and obligations shall be read into this Agreement or any other agreement against you.


1. Appointment of Agent. The Company hereby appoints you and you
-------------------- hereby agree to act, on the terms and conditions specified herein and in the Letter of Representations and Certificate Agreement, as depositary, issuing and paying agent for the CP Notes. The CP Notes will be sold through such commercial paper dealers and/or placement agents as the Company shall have notified you in writing from time to time (collectively, the "Dealers"). The Dealers currently are Merrill Lynch Money Markets Inc., SunTrust Equitable Securities, Inc. and Wachovia Securities, Inc.


2. Supply of CP Notes.


(a) The Company will from time to time to the extent it determines to issue Certificated CP Notes, furnish to you an adequate supply of CP Notes. Certificated CP Notes, if any, shall be in substantially the form agreed upon by the Company and you and shall be serially numbered and shall have been executed by manual or facsimile signature of an Authorized Representative (as hereafter defined), but shall otherwise be uncompleted. Book-Entry CP Notes


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shall be substantially in the form attached to the Letter of Representations attached hereto as Exhibit A and shall be represented by one or more master
--------- notes ("Master Note" or "Master Notes") which shall be executed by manual or facsimile signature by an Authorized Representative in accordance with the Letter of Representations. Pending receipt of instructions pursuant to this Agreement, you will hold the Certificated CP Notes and Master Note(s) in safekeeping for the account of the Company or DTC, as the case may be, in accordance with your customary practice and the requirements of the Certificate Agreement.


(b) Each Certificated CP Note or Master Note delivered to you shall be accompanied by a letter from the Company, as the case may be, identifying the Certificated CP Note or Master Note(s) transmitted therewith, and you shall acknowledge receipt of such Certificated CP Note(s) or Master Note(s) on the copy of such letter or pursuant to some other form of written receipt deemed appropriate by you at the time of delivery to you of such Certificated CP Note(s) or Master Note(s). Pending the issuance of Certificated CP Notes as provided in Section 4 hereof, all Certificated CP Notes and Master Note(s) delivered to you shall be held by you for the account of the Company or DTC, as the case may be, for safekeeping in accordance with your customary practice and the requirements of the Certificate Agreement.


3. Authorized Representatives.


(a) With the delivery of this Agreement, the Company is furnishing to you, and from time to time thereafter may furnish to you, and shall furnish to you upon your request, certificates ("Incumbency Certificates") of a responsible officer of the Company certifying the incumbency and specimen signatures of officers or agents of the Company authorized to execute CP Notes on behalf of the Company by manual or facsimile signature and/or to take other action hereunder on behalf of the Company (each an "Authorized Representative"); such certificate shall also authorize you to deal with representatives of Merrill Lynch Money Markets, Inc., SunTrust Equitable Securities, Inc. and Wachovia Securities, Inc. (each a "Dealer Representative"). Until you receive a subsequent incumbency certificate of the Company, you are entitled to conclusively rely on the last such certificate delivered to you for purposes of determining the Authorized Representatives. You shall not have any responsibility to the Company to determine by whom or by what means a facsimile signature may have been affixed on the CP Notes, or to determine whether any facsimile or manual signature resembles the specimen signature(s) filed with you by a duly authorized officer of the Company. Any CP Note bearing the manual or facsimile signature of a person who is an Authorized Representative on the date such signature is affixed shall be binding on the Company after the authentication thereof by you notwithstanding that such person shall have died or shall have otherwise ceased to hold his office on the date such CP Note is countersigned or delivered to you.


(b) Upon your receipt of this Agreement, and from time to time thereafter as you choose or upon request by the Company, you shall deliver a certificate (a "Certificate of Designation") certifying the incumbency and specimen signatures of your designated signers ("Designated Officers") who are authorized to receipt for and authenticate CP Notes, and deliver CP Notes. Until the Company shall receive a subsequent Certificate of Designation, or unless an Authorized Representative shall have received written notice of the lack of authority of any individual, the Company may rely on the last such Certificate of Designation delivered to it.


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4. Completion, Authentication and Delivery of CP Notes.


(a) From time to time during the term of this Agreement and subject to the terms and conditions hereof, and upon your timely receipt of written or telecopy instructions, notice transmitted directly to your computers or in such manner as you then employ as your normal business practice (collectively, "Instructions"), not later than 1:00 p.m., New York City time, on a day on which you are open for business (a "Business Day"), from an Authorized Representative or a Dealer Representative, on the date of issuance of any Certificated CP Notes (in the case of instructions from an Authorized Representative, a copy of such instructions shall be sent to the Dealer Representative by said Authorized Representative) you shall withdraw the respective Certificated CP Notes from safekeeping and in accordance with the Instructions so received, take the following actions with respect to each such Certificated CP Note:


(i) date each such Certificated CP Note the date of issuance
thereof (which shall be a Business Day) and insert the maturity date
thereof (provided that the Authorized Representative or Dealer
Representative shall ensure that such date is a Business Day and that
it shall not be more than 270 days from the date of issue and that the
aggregate principal amount of Commercial Paper Notes outstanding shall
not exceed $900,000,000) and the face amount (provided that the
Authorized Representative or the Dealer Representative shall ensure
that such face amount is not less than $250,000) thereof in figures;


(ii) authenticate (by countersigning) each such Certificated CP
Note in the appropriate space provided thereon; and


(iii) deliver in the Borough of Manhattan south of Chambers
Street each such Certificated CP Note to the Dealer, or the consignee,
if any, designated by such Authorized Representative or Dealer
Representative for the account of the Dealer against Payment in
immediately available funds of the principal amount of CP Notes.


(b) In the case of Book-Entry CP Notes, from time to time during the term of this Agreement and subject to the terms and conditions hereof, and upon your timely receipt of written or telecopy instructions, notice transmitted directly to your computers or in such a manner as you then employ as your normal business practices, not later than 1:00 p.m., New York City time, in the case of Book-Entry CP Notes, on a Business Day, from an Authorized Representative or a Dealer Representative, on the date of issuance of any Book-Entry CP Notes (in the case of instructions from an Authorized Representative, a copy of such instructions shall be sent to the Dealer Representative by said Authorized Representative) you shall give issuance instructions for the issuance of Book- Entry CP Notes to DTC in a manner set forth in, and take other actions as are required by, the Letter of Representations and the Certificate Agreement. Instructions for the issuance of Book-Entry CP Notes shall include the following information with respect to each Book-Entry CP Note:


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(i) the date of issuance of each such Book-Entry CP Note (which
shall be a Business Day);


(ii) the maturity date of each such Book-Entry CP Note (provided
that the Authorized Representative or Dealer Representative shall ensure
that such date is a Business Day and that it shall not be more than 270
days from the date of issue); and


(iii) the face amount (provided that the Authorized Representative or
the Dealer Representative shall ensure that such face amount is not less
than $250,000) in figures.


(c) You shall send a report (by telecopy or other means permitted hereunder) to the Company on a monthly basis of your issuance of CP Notes under this Section 4, including the maturity date and face amounts of each CP Note issued.


(d) Instructi ...