Exhibit 10-3

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SECOND AMENDMENT
TO CREDIT AGREEMENT
 
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of
August 11, 2011 and is entered into by and among AGL CAPITAL CORPORATION, a
Nevada corporation (the “Borrower’’), AGL RESOURCES INC., a Georgia corporation
(“Holdings”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative
Agent (“Administrative Agent”), acting with the consent of the Required Lenders,
and is made with reference to that certain CREDIT AGREEMENT dated as of
September 15, 2010 by and among the Borrower, Holdings, as Guarantor, the
Lenders party thereto, the Administrative Agent and the other Agents named
therein, as amended by the First Amendment to Credit Agreement dated as of
December 21, 2010 by and among the Borrower, Holdings, as Guarantor, the
Administrative Agent and the Required Lenders party thereto (the “Credit
Agreement”).  Capitalized terms used herein without definition shall have the
same meanings herein as set forth in the Credit Agreement after giving effect to
this Amendment.
 
 
RECITALS
 
WHEREAS, the Loan Parties have requested that the Required Lenders agree to
amend certain provisions of the Credit Agreement as provided for herein; and
 
WHEREAS, subject to certain conditions, the Required Lenders are willing to
agree to such amendments relating to the Credit Agreement.
 
NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:
 
SECTION I.  
AMENDMENTS TO CREDIT AGREEMENT

 
1.1  
Amendments to Section 1: Definitions.

 
Section 1.1 of the Credit Agreement is hereby amended by adding the following
definitions in proper alphabetical sequence:
 
“Note Purchase Agreement”: that certain Note Purchase Agreement, anticipated to
be entered into on or about August 2011, among the Borrower, Holdings and the
respective purchasers named therein pursuant to which the Borrower will issue
the Private Placement Notes.
 
“Private Placement Notes”: the senior notes to be issued pursuant to, and
governed by, the Note Purchase Agreement.
 
1.2  
Amendments to Section 6.9.

 
Section 6.9 of the Credit Agreement is hereby amended by replacing the phrase
“and Virginia Natural Gas, Inc.” with the following phrase “, Virginia Natural
Gas, Inc. and after the Nicor Merger, Northern Illinois Gas Company.”
 
1.3  
Amendments to Schedule 7.8.

 
Schedule 7.8 of the Credit Agreement is hereby amended by inserting the
following language after item number 18 thereof:
 
 
 “19.
Note Purchase Agreement, anticipated to be entered into on or about August 2011,
among the Borrower, Holdings and the respective purchasers named therein
pursuant to which the Borrower will issue the Private Placement Notes.”

 
SECTION II.  
CONDITIONS TO EFFECTIVENESS

 
This Amendment shall become effective as of the date hereof only upon the
satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the “Second
Amendment Effective Date”):
 
A. Execution. The Administrative Agent shall have received (i) a counterpart
signature page of this Amendment duly executed by each of the Loan Parties and
(ii) consent and authorization from the Required Lenders to execute this
Amendment on their behalf.
 
B. Other Fees.  The Administrative Agent shall have received all other fees and
other amounts due and payable on or prior to the Second Amendment Effective Date
to the extent invoiced in reasonable detail, including, without limitation,
reimbursement or other payment of reasonable out-of-pocket expenses required to
be reimbursed or paid by the Borrower hereunder or any other Loan Document.
 
C. Necessary Consents. Each Loan Party shall have obtained all material consents
necessary in connection with the transactions contemplated by this Amendment.
 
D. Other Documents.  The Administrative Agent and the Lenders shall have
received such other documents, information or agreements regarding the Loan
Parties as the Administrative Agent may reasonably request.
 
SECTION III.  
REPRESENTATIONS AND WARRANTIES

 
In order to induce the Lenders to enter into this Amendment and to amend the
Credit Agreement in the manner provided herein, each Loan Party which is a party
hereto represents and warrants to each Lender that the following statements are
true and correct in all material respects:
 
A. Existence.  Each Loan Party is organized, validly existing and in good
standing under the laws of the jurisdiction of its organization.
 
B. Power; Execution; Enforceable Obligations.
 
(a) Each Loan Party has the corporate power and authority, and the legal right,
to make, deliver and perform its obligations under this Amendment, the Credit
Agreement (as amended by and/or consented to under this Amendment, the “Amended
Agreement”) and the other Loan Documents to which it is a party and, in the case
of the Borrower, to obtain extensions of credit under the Amended
Agreement.  Each Loan Party has taken all necessary organizational action to
authorize the execution, delivery and performance of this Amendment, the Amended
Agreement and the other Loan Documents to which it is a party and, in the case
of the Borrower, to authorize the extensions of credit on the terms and
conditions of the Amended Agreement.
 
(b) This Amendment has been duly executed and delivered on behalf of each Loan
Party party thereto.
 
(c) Each of this Amendment, the Amended Agreement and each other Loan Document
constitutes, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
 
C. No Conflict.  The execution and delivery by each Loan Party of this Amendment
and the performance by each Loan Party of the Amended Agreement and the other
Loan Documents do not and will not (i) violate (A) any provision of any law,
statute, rule or regulation, or of the certificate or articles of incorporation
or partnership agreement, other constitutive documents or by-laws of Holdings or
the Borrower or (B) any applicable order of any court or any rule, regulation or
order of any Governmental Authority, (ii) be in conflict with, result in a
breach of or constitute (alone or with notice or lapse of time or both) a
default under any Contractual Obligation of the applicable Loan Party, where any
such conflict, violation, breach or default referred to in clause (i) or (ii) of
this Section III.C., individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, (iii) except as permitted under the
Amended Agreement, result in or require the creation or imposition of any Lien
upon any of the properties or assets of each Loan Party (other than any Liens
created under any of the Loan Documents in favor of Administrative Agent on
behalf of Lenders), or (iv) require any approval of stockholders or partners or
any approval or consent of any Person under any Contractual Obligation of each
Loan Party, except for such approvals or consents which will be obtained on or
before the Second Amendment Effective Date and except for any such approvals or
consents the failure of which to obtain will not have a Material Adverse Effect.
 
D. Governmental Consents.  No action, consent or approval of, registration or
filing with or any other action by any Governmental Authority is or will be
required in connection with the execution and delivery by each Loan Party of
this Amendment and the performance by the Borrower and Holdings of the Amended
Agreement and the other Loan Documents, except for such actions, consents and
approvals the failure to obtain or make which could not reasonably be expected
to result in a Material Adverse Effect or which have been obtained and are in
full force and effect.
 
E. Incorporation of Representations and Warranties from Credit Agreement. The
representations and warranties contained in Section 4 of the Amended Agreement
are and will be true and correct in all material respects on and as of the
Second Amendment Effective Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true and correct in all
material respects on and as of such earlier date.
 
F. Absence of Default.  No event has occurred and is continuing or will result
from the consummation of the transactions contemplated by this Amendment that
would constitute an Event of Default or a Default.
 
G. Release of Claims.  No Loan Party has any knowledge of any claims,
counterclaims, offsets or defenses to or with respect to its obligations under
the Loan Documents, or if such Loan Party has any such claims, counterclaims,
offsets or defenses to the Loan Documents or any transaction related to the Loan
Documents, the same are hereby waived, relinquished and released in
consideration of the execution of this Amendment.
 
SECTION IV.  
ACKNOWLEDGMENT AND CONSENT

 
Holdings hereby acknowledges that it has reviewed the terms and provisions of
the Credit Agreement and this Amendment and consents to the amendment of the
Credit Agreement effected pursuant to this Amendment.  Holdings hereby confirms
that each Loan Document to which it is a party or otherwise bound will continue
to guarantee to the fullest extent possible in accordance with the Loan
Documents the payment and performance of all “Obligations” under each of the
Loan Documents to which it is a party (in each case as such terms are defined in
the applicable Loan Document).
 
Holdings acknowledges and agrees that any of the Loan Documents to which it is a
party or otherwise bound shall continue in full force and effect and that all of
its obligations thereunder shall be valid and enforceable and shall not be
im­paired or limited by the execution or effectiveness of this
Amendment.  Holdings represents and warrants that all representations and
warranties contained in the Amended Agreement and the Loan Documents to which it
is a party or otherwise bound are true and correct in all material respects on
and as of the Second Amendment Effective Date to the same extent as though made
on and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and correct
in all material respects on and as of such earlier date.
 
Holdings acknowledges and agrees that (i) notwithstanding the conditions to
effectiveness set forth in this Amendment, the consent of Holdings is not
required by the terms of the Credit Agreement or any other Loan Document in
order to effect the amendments to the Credit Agreement effected pursuant to this
Amendment and (ii) nothing in the Credit Agreement, this Amendment or any other
Loan Document shall be deemed to require the consent of Holdings to any future
amendments to the Credit Agreement.
 
SECTION V.  
MISCELLANEOUS

 
A. Reference to and Effect on the Credit Agreement and the Other Loan Documents.
 
(i) On and after the Second Amendment Effective Date, each reference in the
Credit Agreement to “this Amendment”, “hereunder”, “hereof”, “herein” or words
of like import referring to the Credit Agreement, and each reference in the
other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words
of like import referring to the Credit Agreement shall mean and be a reference
to the Credit Agreement as amended by this Amendment.
 
(ii) Except as specifically amended by this Amendment, the Credit Agreement and
the other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
 
(iii) The execution, delivery and performance of this Amendment shall not
constitute a waiver of any provision of, or operate as a waiver of any right,
power or remedy of any Agent or Lender under, the Credit Agreement or any of the
other Loan Documents.
 
B. Headings.  Section and Subsection headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose or be given any substantive effect.
 
C. Applicable Law.  THIS AMENDMENT AND THE RIGHTS AND OB­LIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THEREOF.
 
D. Counterparts.  This Amendment may be executed in any number of counter­parts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
 

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

BORROWER:
AGL CAPITAL CORPORATION

By:  /s/Paul R. Shlanta
Name: Paul R. Shlanta
Title:   President

 

 
 

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HOLDINGS:
AGL RESOURCES INC.

By:  /s/Andrew W. Evans
        Name: Andrew W. Evans
        Title:   Executive Vice President and Chief Financial Officer

 
 

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WELLS FARGO BANK, NATIONAL ASSOCIATION as Administrative Agent

      By: /s/Allison Newman
           Name: Allison Newman
           Title:   Director
 

 
 

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Bank of America, N.A., as a Lender

      By: /s/Mike Mason
           Name: Mike Mason
           Title:   Director

 
 

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SunTrust Bank, as a Lender

      By: /s/Andrew Johnson
           Name: Andrew Johnson
           Title:   Director

 
 

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The Bank of Tokyo-Mitsubishi UFJ, Ltd., as a Lender

      By: /s/Alan Reiter
           Name: Alan Reiter
           Title:   Vice President

 
 

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JPMorgan Chase Bank, N.A., as a Lender

      By: /s/Helen D. Davis
           Name: Helen D. Davis
           Title:   Authorized Officer

 
 

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Morgan Stanley Bank, N.A., as a Lender

      By: /s/Scott Taylor
           Name: Scott Taylor
           Title:   Authorized Signatory

 
 

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The Royal Bank of Scotland plc, as a Lender

      By: /s/Brian D. Williams
           Name: Brian D. Williams
           Title:   Authorised Signatory

 
 

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Goldman Sachs Bank USA, as a Lender

      By: /s/Rick Canonico
           Name: Rick Canonico
           Title:   Authorised Signatory

 
 

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Deutsche Bank AG New York Branch, as a Lender

 
      By: /s/John S. McGill
           Name: John S. McGill
           Title:   Director

      By: /s/Ming K. Chu
           Name: Ming K. Chu
           Title:   Vice President

 
 

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The Bank of Nova Scotia, as a Lender

      By: /s/Thane Rattew
           Name: Thane Rattew
           Title:   Managing Director

 
 

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U.S. Bank National Association, as a Lender

      By: /s/Michael T. Sagges
           Name: Michael T. Sagges
           Title:   Vice President

 
 

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Credit Agricole Corporate  and Investment Bank, as a Lender

 

 
      By: /s/Darrell Stanley
           Name: Darrell Stanley
           Title:   Managing Director
 

      By: /s/Michael Willis
           Name: Michael Willis
           Title:   Managing Director

 
 

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The Bank of New York Mellon, as a Lender

      By: /s/John N. Watt
           Name: John N. Watt
           Title:   Vice President

 
 

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The Northern Trust, as a Lender

      By: /s/Kathryn Reuther
           Name: Kathryn Reuther
           Title:   Vice President