exhibit4_2.htm


    Exhibit
      4.2


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    GUARANTEE

    


    


    This
      GUARANTEE of AGL Resources Inc., a Georgia corporation (the
“Guarantor”), is dated as of December 14, 2007.

    


    The
      Guarantor, for value received, hereby unconditionally guarantees to each Holder
      of a 6.375% Senior Note due 2016 (a “Note”) of AGL Capital Corporation, a Nevada
      corporation (the “Company”), authenticated and delivered by the Trustee pursuant
      to the terms of an Indenture by and among the Company, the Trustee and the
      Guarantor dated as of February 20, 2001 (the “Indenture”), and to the Trustee on
      behalf of each such Holder, the due and punctual payment of the principal of
      (and premium, if any) and interest, on each such Note, each as provided for
      pursuant to the terms of such Note when and as the same shall become due and
      payable, in accordance with the terms of such Note and of the Indenture under
      which it was issued. In case of the failure of the Company to make any such
      payment of principal (or premium, if any) or interest, the Guarantor hereby
      agrees to cause any such payment to be made when and as the same shall become
      due and payable by acceleration, call for redemption or otherwise, as if such
      payment were made by the Company.

    


    The
      Guarantor hereby agrees that its obligations hereunder shall be unconditional,
      irrespective of the validity, regularity or enforceability of such Note or
      the
      Indenture, the absence of any action to enforce the same, any waiver or consent
      by the Holder of such Note or by the Trustee with respect to any provisions
      thereof or of the Indenture, the obtaining of any judgment against the Company
      or any action to enforce the same or any other circumstances which might
      otherwise constitute a legal or equitable discharge or defense of a guarantor.
      The Guarantor hereby waives the benefits of division and discussion, diligence,
      presentment, demand of payment, filing of claims with a court in the event
      of
      insolvency or bankruptcy of the Company, any right to require a proceeding
      first
      against the Company, protest or notice with respect to such Note or the
      indebtedness evidenced thereby and all demands whatsoever, and covenants that
      this Guarantee will not be discharged except by complete performance of the
      obligations contained in the Note and in the Guarantees. The Guarantees are
      guarantees of payment and not of collection. If the Trustee or the Holder of
      any
      Note is required by any court or otherwise to return to the Company or the
      Guarantor, or any custodian, receiver, liquidator, trustee, sequestrator or
      other similar official acting in relation to the Company or the Guarantor,
      any
      amount paid to the Trustee or such Holder in respect of a Note, this Guarantee,
      to the extent theretofore discharged, shall be reinstated in full force and
      effect.

    


    The
      Guarantor shall be subrogated to all rights of the Holders of a Note in respect
      of any amounts paid by the Guarantor on account of such Note pursuant to the
      provisions of this Guarantee or the Indenture; provided, however, that the
      Guarantor shall not be entitled to enforce or to receive any payments arising
      out of, or based upon, such right of subrogation until the principal of (and
      premium, if any) and interest, on the Note shall have been paid in
      full.

    


    Capitalized
      terms used herein have the same meanings given in the Indenture unless otherwise
      indicated. This Guarantee shall be governed by and construed in accordance
      with
      the law of the State of New York.

    


    


    


    


    


    [Signatures
      to Follow]

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    This
      Guarantee is executed as of the day and year first above written.

    


    AGL
      RESOURCES INC.

    


    


    


    By:   
      /s/ Andrew W. Evans

    Name:     Andrew
      W. Evans

    
      	
               

            	
                             
                Title:

            	
              Executive
                Vice President and Chief Financial
                Officer