Document:

<PAGE>
                                                                    EXHIBIT 10.1

                                ESCROW AGREEMENT
<PAGE>

                                ESCROW AGREEMENT

         ESCROW AGREEMENT, made and entered into as of the day of December,
2002, by and between Grafton State Bank, a Wisconsin banking corporation
("Escrow Agent"), and Harp & Eagle, Ltd., a Wisconsin corporation ("Company").

                                   WITNESSETH:

         WHEREAS, the Company is currently offering, offering for sale and
selling to the public up to 1,000,000 shares of its common stock, par value
$0.0001 per share ("Common Stock"), at an initial offering price of $6.00 per
share ("Offering");

         WHEREAS, a registration statement on Form SB-2 (File No. 333-55088)
with respect to the Common Stock, including a form of prospectus, has been filed
by the Company with the Securities and Exchange Commission ("Commission") under
the Securities Act of 1933, as amended ("Securities Act"). A final form of
prospectus was filed with the Commission upon the initial effectiveness of such
registration statement (ie., December 11, 2001), four amendments to such
registration statement having been filed with the Commission prior to such
effectiveness. Such registration statement (including all exhibits thereto), as
amended at the time it initially became effective and at the time each
post-effective amendment thereto becomes effective, and the final prospectus
filed upon the effectiveness of such registration statement or post-effective
amendment (including any supplements to such final prospectus filed following
such effectiveness) are referred to herein, respectively, as the "Registration
Statement" and the "Prospectus";

         WHEREAS, the Registration Statement and the Prospectus provide that
amounts tendered by investors in payment of the subscription price for Common
Stock, including checks, cash and cash equivalents ("Subscription Proceeds"),
shall be deposited and held in escrow in a segregated account until such
Subscription Proceeds are disbursed by the Escrow Agent pursuant to this
Agreement and the provisions with respect to such disbursement which are
contained in the Registration Statement and described in the Prospectus; and

         WHEREAS, unless subscriptions for not less than 60,000 shares of Common
Stock had been accepted by the Company and fully paid for on or before the
Termination Date, the Offering would have terminated, and no Common Stock would
have been sold, "Termination Date" being defined for purposes hereof as the date
which is 120 days after the date upon which the Registration Statement first
became effective under the Securities Act (which effective date shall also be
the initial date of the Prospectus); and

         WHEREAS, inasmuch as subscriptions for at least 60,000 shares of Common
Stock were accepted by the Company and fully paid for on or before the
Termination Date, the initial disbursement of Subscription Proceeds took place
on April 11, 2002 ("Initial Closing"); as of the date of this Agreement, one
additional closing ("Additional Closing") has taken place on June 11, 2002.

         NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:

         1. Escrow. From the date hereof through and including (i) the date of
the final disbursement of funds pursuant to this Agreement or (ii) the
termination of the Offering by the Company, whichever later occurs, the Escrow
Agent shall act as escrow agent and shall receive and disburse all Subscription
Proceeds and earnings, if any, thereon in accordance with the terms of this
Agreement. The Escrow Agent hereby represents to the Company that it is, and at
all times during the term of this Agreement shall remain, a "bank" as such term
is defined by Section 3(a)(6) of the Securities Exchange Act of 1934, as amended
("Exchange Act").

<PAGE>
         2. Deposit Procedure.

         (a) The Escrow Agent shall maintain an appropriate segregated account
("Escrow Account") designated as the "Harp & Eagle, Ltd. Escrow Account," or
with such other appropriate designation as shall be assigned by the Escrow Agent
and communicated to the Company. The Escrow Agent shall cause all Subscription
Proceeds transmitted to it to be held in the Escrow Account. All checks received
by the Escrow Agent are to be held uncashed until required to be submitted for
collection pursuant to paragraph 2(b) of this Agreement.

         (b) All Subscription Proceeds shall be delivered to the Escrow Agent,
at 101 Falls Road, Grafton, Wisconsin 53024, by 12:00, noon, on the business day
following receipt thereof by the Company, together with a schedule of such
payments and the subscriptions represented thereby. Provided that the Escrow
Agent shall have received with respect to each subscription for Common Stock (i)
Facsimile Notice (as defined herein) from the Company that a subscription has
been received by the Company and (ii) Subscription Proceeds in the amount
required to pay in full for such subscription, delivered as aforesaid, the
Escrow Agent shall immediately commence the collection process (as applicable)
with respect to such Subscription Proceeds. Any payment item which is returned
to the Escrow Agent on its initial presentation for payment need not again be
presented for collection. The Facsimile Notice provided for in this paragraph
shall be given by the Company not more than five (5) days following receipt by
the Escrow Agent of such Subscription Proceeds and not less than two (2)
business days prior to any disbursement of Subscription Proceeds by the Escrow
Agent pursuant to this Agreement.

         (c) If a subscription is not accepted by the Company, the Company
shall, within five (5) days following its receipt of such subscription, provide
the Escrow Agent with Facsimile Notice (as defined herein) of the name of the
rejected subscriber, the address of the rejected subscriber, and the amount of
Subscription Proceeds received from such rejected subscriber and delivered to
the Escrow Agent.

         (d) If the Escrow Agent is holding collected funds with respect to a
rejected subscription, the Escrow Agent shall promptly remit the full amount of
Subscription Proceeds delivered to it, without interest thereon or deduction
therefrom, to the rejected subscriber at the address provided by the Company. If
the Escrow Agent has presented the Subscription Proceeds of a rejected
subscriber for collection but has not yet collected funds, the Escrow Agent
shall, promptly upon collection of such funds, remit the full amount of
Subscription Proceeds delivered to it, without interest thereon or deduction
therefrom, to the rejected subscriber at the address provided by the Company. If
the Escrow Agent has not yet presented the Subscription Proceeds of a rejected
subscriber for collection, the Escrow Agent shall promptly return in full the
Subscription Proceeds delivered to it, in the form so delivered, without
interest thereon or deduction therefrom, to the rejected subscriber at the
address provided by the Company.

         3. Investment of Escrow Funds. The Escrow Agent shall invest all funds
held in the Escrow Account (including earnings, if any, thereon) in United
States government securities or securities guaranteed by the United States,
certificates of deposit of banks located in the United States or any other
investment, provided, in each case, that such investment is permitted by Rule
15c2-4, promulgated by the Securities and Exchange Commission under the Exchange
Act ("Rule 15c2-4"). Such investments shall be made in a manner consistent with
the requirement that the Subscription Proceeds be available for delivery by the
Escrow Agent at the times described herein. The parties hereto recognize that
there may be a forfeiture of interest in the event of early withdrawal from an
interest-bearing account of investment.

         4. Additional Closings.

         (a) Subsequent to the Initial Closing, the collected funds then held in
the Escrow Account shall be disbursed by the Escrow Agent from time to time, as
agreed between the Company and the Escrow Agent, at one or more Additional
Closings; each such further disbursement of subscription proceeds is referred to
herein as an "Additional Closing," and the date thereof as an "Additional
Closing Date." The Initial Closing and Additional Closings are sometimes
referred to herein as a "Closing" or "Closings"; and the Initial Closing Date
and Additional Closing Dates are sometimes referred to herein as a "Closing
Date" or "Closing Dates."

                                       2
<PAGE>
         (b) Prior to the disbursement of collected funds held in the Escrow
Account at any Additional Closing, the Escrow Agent shall have received
Facsimile Notice (as defined herein) from the Company that all conditions
precedent to such disbursement by the Escrow Agent have been fully satisfied as
required under the terms set forth in the Registration Statement and the
provisions of Rule 15c2-4. The Facsimile Notice from the Company provided for in
this paragraph 5(b) must be received by the Escrow Agent not less than two (2)
business days prior to such Additional Closing Date; Confirmation (as defined
herein) of such Facsimile Notice shall be delivered to the Escrow Agent by the
Company on or before such Additional Closing Date, dated as of such Additional
Closing Date.

         (c) Provided that the Facsimile Notice (as defined herein) required
under paragraph 5(b) hereof shall have been received by Escrow Agent not less
than two (2) business days prior to, and confirmed in writing on or before, each
Additional Closing Date, the Escrow Agent shall, on such Additional Closing
Date, disburse the collected funds then held in the Escrow Account as follows:
First, to the Escrow Agent in the amount of any fees then due and payable to
such Agent (which shall not exceed on any Additional Closing Date the aggregate
earnings, if any, on funds held in the Escrow Account, determined as of the
business day immediately preceding such Closing Date); and Second, to the
Company in the amount of any balance then remaining in the Escrow Account.

         5. Books and Records. The Escrow Agent shall maintain accurate records
of all transactions hereunder. Promptly upon the termination of escrow, or as
may reasonably be requested by the Company prior thereto, the Escrow Agent shall
provide the Company with a complete copy of such records, certified by the
Escrow Agent to be a complete and accurate account of all such transactions. The
authorized representatives of the Company shall also have access to such books
and records at all reasonable times during normal business hours upon reasonable
notice to the Escrow Agent.

         6. Escrow Agent Fees. As compensation for services performed by it
pursuant to this Agreement, the Escrow Agent shall be entitled to receive from
the Company the fees set forth on Schedule A hereto; such fees shall be deducted
from Escrow Income (as defined in such Schedule A), and the Company shall pay to
the Escrow Agent on demand any portion of such fees which remains unpaid
following the final Closing.

         7. Termination. This Agreement shall terminate on the final disposition
of the moneys and property held in escrow under and pursuant to the terms
hereof, provided that the rights of the Escrow Agent and the obligations of the
Company under paragraphs 6 and 8 shall survive the termination hereof.

         8.   General Provisions.

         (a) This Agreement expressly sets forth all the duties of the Escrow
Agent with respect to any and all matters pertinent hereto.

         (b) The Escrow Agent shall not be liable, except for its own negligence
or willful misconduct and, except with respect to claims based upon such
negligence or willful misconduct that are successfully asserted against the
Escrow Agent. The Company shall indemnify and hold harmless the Escrow Agent
(and any successor Escrow Agent) from and against any and all losses,
liabilities, claims, actions, damages and expenses, including reasonable
attorneys' fees and disbursements, arising out of and in connection with this
Agreement.

         (c) The Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. The Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that any person purporting
to give notice or advice, or to accept and acknowledge receipt, or to make any
statement or execute any documents in connection with the provisions of this
Agreement has been duly authorized to do so.

         (d) In the event that the Escrow Agent (i) shall be uncertain as to its
duties arising under this Agreement or (ii) shall receive instructions from the
Company or the Managing Placement Agent as to the funds held in the Escrow
Account which, in its opinion, are inconsistent with each other or are in any
conflict with any of the provisions of this Agreement, the Escrow Agent shall be
authorized to hold any and all Subscription Proceeds

                                       3
<PAGE>
received by it, together with any other amounts which shall accrue to or be
deposited in the Escrow Account, pending the settlement of any such controversy
by final adjudication of a court of competent jurisdiction, or the Escrow Agent
may, at its option, deposit such funds with the clerk of a court of competent
jurisdiction, in an appropriate proceeding to which all parties in interest are
duly joined.

         (e) The Escrow Agent (and any successor escrow agent) may at any time
resign as such by delivering all amounts held in the Escrow Account to any
successor escrow agent designated by the Company in writing, or to any court of
competent jurisdiction, whereupon the Escrow Agent shall be discharged of and
from any and all further obligations arising in connection with this Agreement.
The resignation of the Escrow Agent will take effect (i) upon the appointment of
a successor (including a court of competent jurisdiction) or (ii) thirty (30)
days after the date of delivery of its written notice of resignation to the
Company, whichever first occurs. If at such time the Escrow Agent has not
received a written designation of a successor escrow agent, the Escrow Agent's
sole responsibility thereafter shall be to safekeep the funds held in the Escrow
Account until receipt by the Escrow Agent of a written designation by the
Company of a successor escrow agent or a final order of a court of competent
jurisdiction.

         (f) The parties hereto hereby irrevocably submit to the jurisdiction of
any Wisconsin state court or federal court sitting in Wisconsin in any action or
proceeding arising out of or relating to this Agreement, and the parties hereby
irrevocably agree that all claims in respect of such action or proceeding shall
be heard and determined in such state or federal court. The parties to this
Agreement hereby consent to and grant to any such court jurisdiction over the
persons of such parties and over the subject matter of any such dispute and
agree that delivery or mailing of any process, instrument or other paper in
connection with any such action or proceeding in the manner provided in this
Agreement, or in such other manner as may be permitted by law, shall be valid
and sufficient service of such process, instrument or other paper.

         (g) This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors and assigns, and
shall not be enforceable by or inure to the benefit of any third party. Except
as provided herein with respect to a resignation by the Escrow Agent, no party
hereto may assign any of its rights or obligations under this Agreement without
the prior written consent of the other parties hereto.

         (h) This Agreement may only be modified by a written instrument signed
by the parties hereto, and no waiver hereunder shall be effective unless in
writing signed by the party to be charged.

         (i) The Escrow Agent makes no representation as to the validity, value,
genuineness or the collectibility of any security or other document or
instrument held by or delivered to such Escrow Agent pursuant to the terms of
this Agreement.

         (j) For purposes hereof, "Facsimile Notice" shall mean the delivery by
telephone facsimile (FAX) of a notice, request, demand or other communication
provided for herein, and "Confirmation" shall mean the delivery by hand (via
commercial courier service or otherwise) or by first class mail, if and to the
extent required hereunder, of a manually-signed (if applicable) counterpart of
any such notice, demand or other communication. All Facsimile Notices and
Confirmations shall be deemed given when received and shall be telecopied and
delivered by hand, respectively, to the parties at the facsimile (FAX) telephone
numbers and addresses listed below, or to such other persons or facsimile
telephone numbers/addresses as the relevant party shall designate from time to
time in writing delivered by hand as aforesaid:

<TABLE>
<S>                                        <C>
     If to the Company:                    Harp & Eagle, Ltd.
                                           Attention:  Cary James O'Dwanny
                                           Facsimile Notice (FAX) Telephone Number:  (414) 290-6300
                                           Confirmation Address:  1234 North Astor Street
                                                                  Milwaukee, Wisconsin 53202
</TABLE>

                                       4
<PAGE>

<TABLE>
<S>                                              <C>
     If to the Escrow Agent:                     Grafton State Bank
                                                 Escrow Department
                                                 Attention:  Pat Liedtke
                                                 Facsimile Notice (FAX) Telephone Number:  (414) 377-6328
                                                 Confirmation Address:  101 Falls Road
                                                                        Grafton, Wisconsin  53024
</TABLE>

         (k) This Agreement shall be construed in accordance with and governed
by the internal law of the State of Wisconsin.

         (l) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.

         (m) This Agreement (i) shall become effective as of the effective date
of the first post-effective amendment to the Registration Statement and (ii)
supersedes and fully replaces all prior agreements with respect to the escrow
and disbursement of Subscription Proceeds received in payment for Common Stock
sold in the Offering, including without limitation that agreement, dated
December 11, 2001, by and among the Company, the Escrow Agent and J.E. Liss &
Company, Inc., the initial managing placement agent for the Offering; provided,
however, that the segregated escrow account established pursuant to Section 2(a)
of such prior agreement may be continued and maintained as the Escrow Account
described in Section 2(a) of this Agreement.

         IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the day and year first above written.

                                                Harp & Eagle, Ltd.

                               By:
                                   --------------------------------------------
                                          Cary James O'Dwanny, President

                                                Grafton State Bank

                               By:
                                   --------------------------------------------
                                           Jefford R. Larson, President

         Termination of the escrow agreement, dated December 11, 2001, as
described in Section 9(m) of this Agreement, as of the effective date of this
Agreement, is hereby confirmed, accepted and acknowledged as of the day and year
first above written.

                                           J.E. Liss & Company, Inc.

                               By:
                                   --------------------------------------------
                                           Jerome E. Liss, President

                                       5
<PAGE>
                                ESCROW AGREEMENT

                                   Schedule A

                  This Schedule A to the Escrow Agreement, dated as of December
, 2002, by and between Grafton State Bank ("Escrow Agent"), and Harp & Eagle,
Ltd. ("Company"), sets forth the compensation arrangements referred to in
paragraph 6 of such Agreement, as follows:

                  For services performed by it pursuant to the Escrow Agreement,
the Escrow Agent shall be entitled to receive from the Company fees in the
amounts of $250 per Closing and $10 per subscriber (whether accepted or
rejected); provided, however, that the Escrow Agent shall receive, in the
aggregate, not less than $500 in consideration of its services rendered pursuant
to the terms of the Escrow Agreement. Such fees shall be (a) due and payable on
each Additional Closing Date until paid in full and (b) payable, through the
final Closing, only from and to the extent of available Escrow Income; provided
that, if payments made from available Escrow Income, made at one or more
Additional Closings are not, in the aggregate, sufficient to pay such fees in
full, the Company shall pay on demand any such fees which remain unpaid
following the final Closing. "Escrow Income" is the amount of interest and/or
dividends, if any, which shall have been (x) paid on or in respect of the Escrow
Account (representing earnings on funds held therein) and (y) deposited in such
Account as collected funds on or prior to the business day immediately preceding
such Initial Closing Date or Additional Closing Date, as the case may be. If and
to the extent that Escrow Income exceeds the aggregate fees payable to the
Escrow Agent hereunder, such excess shall be paid to the Company at the
Additional Closing(s), as the case may be. The foregoing notwithstanding, if the
Offering is terminated pursuant to the provisions of the Managing Placement
Agent Agreement or otherwise, the Escrow Agent shall be entitled to receive fees
in the aggregate amount of $500, and no more, payable by the Company on demand.
All terms used herein shall have the same meanings ascribed to them in the
Escrow Agreement of which this Schedule is a part.<PAGE>

                                                             EXHIBIT NO. 4(a)-19
                                                                  Execution Copy

                         MOBILE GAS SERVICE CORPORATION

                                       to

                                  REGIONS BANK,

                                                Trustee.

                        EIGHTEENTH SUPPLEMENTAL INDENTURE

                           Dated as of August 1, 2002

                                  SUPPLEMENTAL

                                       to

                              INDENTURE OF MORTGAGE

                          Dated as of December 1, 1941

          THIS IS A MORTGAGE OF PERSONAL PROPERTY AS WELL AS A MORTGAGE
                      UPON REAL ESTATE AND OTHER PROPERTY.

  This instrument was prepared by R. Preston Bolt, Jr., Hand Arendall, L.L.C.,
               3000 AmSouth Bank Building, Mobile, Alabama 36602.

<PAGE>

          THIS EIGHTEENTH SUPPLEMENTAL INDENTURE, dated for convenience and to
be effective as of August 1, 2002, although executed and delivered at a later
date, between MOBILE GAS SERVICE CORPORATION, a corporation duly organized and
existing under the laws of the State of Alabama (hereinafter sometimes called
the "Company"), having its principal place of business at 2828 Dauphin Street,
Mobile, Alabama 36606, party of the first part, and REGIONS BANK, an Alabama
banking corporation duly organized and existing under the laws of the State of
Alabama, and having a principal corporate trust office at 106 St. Francis
Street, Mobile, Alabama 36602, as Trustee (hereinafter sometimes called the
"Trustee"), party of the second part.

          WHEREAS, the Company heretofore made and executed its Indenture of
Mortgage dated as of December 1, 1941 (hereinafter sometimes called the
"Original Indenture") to said The First National Bank of Mobile, as Trustee,
which by reference is hereby made a part hereof, and in and by the Original
Indenture the Company conveyed and mortgaged to said Trustee certain property
therein described to secure the payment of its bonds, to be known generally as
its "First Mortgage Bonds" (hereinafter sometimes called the "Bonds") and to be
issued under the Original Indenture in one or more series, as therein provided;
and

          WHEREAS, the Company has executed and delivered to the Trustee
seventeen indentures supplemental to the Original Indenture (collectively, the
"Supplemental Indentures"), as follows: a First Supplemental Indenture dated as
of October 1, 1944 supplementing and modifying the Original Indenture
(hereinafter sometimes called the "First Supplemental Indenture"), a Second
Supplemental Indenture dated as of July 1, 1952 supplementing the Original
Indenture (hereinafter sometimes called the "Second Supplemental Indenture"), a
Third Supplemental Indenture dated as of June 1, 1954 supplementing the Original
Indenture (hereinafter sometimes called the "Third Supplemental Indenture"), a
Fourth Supplemental Indenture dated as of April 1, 1957 supplementing the
Original Indenture (hereinafter sometimes called the "Fourth Supplemental
Indenture"), a Fifth Supplemental Indenture dated as of July 1, 1961
supplementing the Original Indenture (hereinafter sometimes called the "Fifth
Supplemental Indenture"), a Sixth Supplemental Indenture dated as of June 1,
1963 supplementing the Original Indenture (hereinafter sometimes called the
"Sixth Supplemental Indenture"), a Seventh Supplemental Indenture dated as of
October 1, 1964 supplementing the Original Indenture (hereinafter sometimes
called the "Seventh Supplemental Indenture"), an Eighth Supplemental Indenture
dated as of July 1, 1972 supplementing the Original Indenture (hereinafter
sometimes called the "Eighth Supplemental Indenture"), a Ninth Supplemental
Indenture dated as of August 1, 1975 supplementing and modifying the Original
Indenture (hereinafter sometimes called the "Ninth Supplemental Indenture"), a
Tenth Supplemental Indenture dated as of July 1, 1979 supplementing and
modifying the Original Indenture (hereinafter sometimes called the "Tenth
Supplemental Indenture"), an Eleventh Supplemental Indenture dated as of July 1,
1982 supplementing the Original Indenture (hereinafter sometimes called the
"Eleventh Supplemental Indenture"), a Twelfth Supplemental Indenture dated as of
July 1, 1986 (hereinafter sometimes called the "Twelfth Supplemental
Indenture"), a Thirteenth Supplemental Indenture dated as of October 1, 1988
supplementing the Original Indenture (hereinafter sometimes called the
"Thirteenth Supplemental Indenture"), a Fourteenth Supplemental Indenture dated
as of July 1, 1992 supplementing the Original Indenture

                                       2
<PAGE>

(hereinafter sometimes called the "Fourteenth Supplemental Indenture"), a
Fifteenth Supplemental Indenture dated as of July 1, 1993 supplementing the
Original Indenture (hereinafter sometimes called the "Fifteenth Supplemental
Indenture"), a Sixteenth Supplemental Indenture dated as of December 3, 1993
supplementing and modifying the Original Indenture (hereinafter sometimes called
the "Sixteenth Supplemental Indenture"), and a Seventeenth Supplemental
Indenture dated as of November 1, 1996 supplementing the Original Indenture
(hereinafter sometimes called the "Seventeenth Supplemental Indenture"), each of
which Supplemental Indentures, with the exception of the Tenth Supplemental
Indenture and the Sixteenth Supplemental Indenture, among other things, provided
for the creation of a new series of Bonds; and

          WHEREAS, pursuant to the Original Indenture, as so supplemented and
modified, there have been executed, authenticated, delivered and issued and
there are outstanding at the actual date of execution of this Eighteenth
Supplemental Indenture Bonds of series and in principal amounts as follows:

<Table>
<Caption>
        Title                 Issued       Outstanding
        -----                 ------       -----------
<S>                         <C>            <C>
7.27% Series due 2006       12,000,000     $  8,550,000
8.75% Series due 2022       12,000,000       12,000,000
7.48% Series due 2023       12,000,000       12,000,000
</Table>

and

          WHEREAS, original counterparts of the Original Indenture and the
First, Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth,
Eleventh, Twelfth, Thirteenth, Fourteenth, Fifteenth, Sixteenth and Seventeenth
Supplemental Indentures are duly filed and recorded in Alabama in the Offices of
the Probate Judges of Mobile County and of Baldwin County, Alabama; and

          WHEREAS, the Board of Directors of the Company has established under
the Original Indenture, as supplemented and modified, a new series of Bonds to
be designated First Mortgage Bonds, 6.90% Series due 2017 (hereinafter sometimes
referred to as "Bonds of the 2017 Series") in the principal amount of Twelve
Million Dollars ($12,000,000) and has authorized the issue of the Bonds of the
2017 Series pursuant to the provisions of Article 3 of the Original Indenture to
obtain funds for its corporate purposes; and

          WHEREAS, it is provided in the Original Indenture that in the event of
the establishment of any new series of Bonds there shall be executed by the
Company and delivered to the Trustee a supplemental indenture prescribing the
form or forms of Bonds of the new series and other provisions made in respect
thereof; and

          WHEREAS, Section 16.01 of the Original Indenture provides, among other
things, that the Company may execute and file with the Trustee and the Trustee
at the request of the Company shall join in indentures supplemental to the
Original Indenture and which thereafter shall form a part thereof, for the
purposes, among others, of subjecting to the lien of the Original Indenture, or

                                       3
<PAGE>

perfecting the lien thereof upon, any additional properties of any character;
and

          WHEREAS, the Company desires to execute this Eighteenth Supplemental
Indenture and hereby requests the Trustee to join in this Eighteenth
Supplemental Indenture for the purpose of prescribing the forms of the Bonds of
the 2017 Series and confirming the lien and security interest of the Original
Indenture, as supplemented and modified (the Original Indenture, as supplemented
and modified by the First, Ninth, Tenth and Sixteenth Supplemental Indentures,
and as supplemented by the Second, Third, Fourth, Fifth, Sixth, Seventh, Eighth,
Eleventh, Twelfth, Thirteenth, Fourteenth, Fifteenth, Seventeenth and this
Eighteenth Supplemental Indenture, being herein sometimes called the
"Indenture"); and

          WHEREAS, all acts and proceedings required by law and by the charter
and bylaws of the Company necessary to make the Bonds of the 2017 Series, when
executed by the Company, authenticated and delivered by the Trustee and duly
issued, the valid, binding and legal obligations of the Company, and to
constitute the Indenture a valid and binding mortgage and security interest for
the security of the Bonds, in accordance with the terms of the Indenture and the
terms of the Bonds, have been done and performed; and the execution and delivery
of this Eighteenth Supplemental Indenture and the issue of the Bonds of the 2017
Series have been in all respects duly authorized;

          NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of and interest on all Bonds at any time issued and
outstanding under the Indenture, according to their tenor, purport and effect,
and to secure the performance and observance of all the covenants and conditions
in said Bonds and in the Indenture contained and for and in consideration of the
premises and of the mutual covenants in the Indenture contained and of the
purchase and acceptance of the Bonds of the 2017 Series by the holders or
registered owners thereof, and of the sum of One Dollar ($1.00) lawful money of
the United States of America duly paid to the Company by the Trustee at or
before the ensealing and delivery hereof, and for other valuable consideration,
the receipt whereof is hereby acknowledged, MOBILE GAS SERVICE CORPORATION has
executed and delivered this Eighteenth Supplemental Indenture and does hereby
confirm the granting of a security interest to the Trustee and its successors
and assigns in all properties, rights and privileges hereafter in Parts I, II
and III hereof described, together with all property of the nature set forth in
Clauses II through VII of the granting clauses of the Original Indenture,
heretofore or hereafter acquired or constructed in which a security interest can
be created under the Alabama Uniform Commercial Code, subject to the exceptions
and reservations hereafter provided, and has granted, bargained, sold, aliened,
remised, released, conveyed, assigned, transferred, mortgaged, pledged, granted
a security interest in, set over and confirmed, and by these presents does
grant, bargain, sell, alien, remise, release, convey, assign, transfer,
mortgage, pledge, grant a security interest in, set over and confirm unto
Regions Bank, as Trustee, and to its successors in the trust, and to its assigns
forever:

                                       4
<PAGE>

                                        I

          Those certain parcels of real estate described as follows:

          (a) The real property located in Mobile County, Alabama conveyed to
the Company by Ourania Gounares Ream by deed recorded in Book 4913, page 1241 of
the records of the office of the Judge of Probate of Mobile County, Alabama.

          (b) The real property located in Baldwin County, Alabama conveyed to
the Company by Stimpson Forest Products, L.L.C. by deed recorded as Instrument
Number 579801 of the records in the office of the Judge of Probate of Baldwin
County, Alabama.

                                       II

          All general intangibles, accounts, chattel paper, commercial tort
claims, deposit accounts, documents, goods, instruments, investment property,
letter-of-credit rights, letters of credit, money, and oil, gas or other
minerals before extraction, and all interests therein, now owned or hereafter
acquired by or belonging to the Company or to which it now is, or may at any
time hereafter be, in any manner entitled at law or in equity.

                                       III

          All the property, real, personal and mixed, described or referred to
in the Original Indenture, the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture, the Fourth
Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental
Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental
Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture,
the Eleventh Supplemental Indenture, the Twelfth Supplemental Indenture, the
Thirteenth Supplemental Indenture, the Fourteenth Supplemental Indenture, the
Fifteenth Supplemental Indenture, the Sixteenth Supplemental Indenture and the
Seventeenth Supplemental Indenture and thereby conveyed or mortgaged or intended
so to be, including all such property acquired, made or constructed by the
Company or to which the Company in any manner has become entitled in law or in
equity, since the execution and delivery of said Original Indenture which by the
terms of said Original Indenture, the First Supplemental Indenture, the Second
Supplemental Indenture, the Third Supplemental Indenture, the Fourth
Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental
Indenture, the Seventh Supplemental Indenture, the Eighth Supplemental
Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture,
the Eleventh Supplemental Indenture, the Twelfth Supplemental Indenture, the
Thirteenth Supplemental Indenture, the Fourteenth Supplemental Indenture, the
Fifteenth Supplemental Indenture, the Sixteenth Supplemental Indenture, the
Seventeenth Supplemental Indenture and this Eighteenth Supplemental Indenture is
subjected, or is intended to be subjected, to the lien and security interest of
the Indenture.

                                       5
<PAGE>

                                       IV

          Together with all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid properties
or any part thereof, with the reversion and reversions, remainder and
remainders, tolls, rents, revenues, issues, income, product and profits thereof,
and all the estate, right, title, interest and claim whatsoever, at law as well
as in equity, which the Company has acquired in and to the aforesaid properties
and every part and parcel thereof.

                                        V

          EXPRESSLY EXCEPTING AND EXCLUDING, HOWEVER, from this Eighteenth
Supplemental Indenture and from the lien, security interest and operation of the
Indenture:

                   (A) All property excepted or excluded from the lien of the
          Original Indenture under Part VIII of the granting clauses thereof and
          all property excepted in the descriptions contained in the granting
          clauses of the Supplemental Indentures.

                   (B) All property released or otherwise disposed of pursuant
          to the provisions of Article 6 of the Indenture.

          TO HAVE AND TO HOLD all said properties, real, personal and mixed,
mortgaged, pledged or conveyed, or in which a security interest is granted, by
the Company as aforesaid, or intended so to be, unto the Trustee, and its
successors in the trust and its assigns forever.

          SUBJECT, HOWEVER, to (a) the specific liens and encumbrances,
reservations, restrictions, conditions, limitations, covenants, interests and
exceptions, if any, set forth or referred to in the descriptions contained in
Part I of the granting clauses of the Original Indenture or any Supplemental
Indenture; (b) any permitted liens as defined in Section 1.05(a) of the Original
Indenture; and (c) liens existing on any property hereafter acquired by the
Company at the time of such acquisition or permitted by Section 5.04 of said
Original Indenture.

          IN TRUST, NEVERTHELESS, upon the terms and trusts in the Indenture set
forth, for the equal and proportionate benefit and security of all present and
future holders of the Bonds and coupons issued and to be issued under the
Indenture, without preference or priority of any of said Bonds or coupons over
any others thereof, or of the Bonds and coupons of any particular series over
the Bonds and coupons of any other series, by reason of priority in the time of
issue, sale or negotiation thereof or by reason of the purpose of issue or
otherwise howsoever, except as otherwise provided in Section 9.29 of the
Original Indenture.

          AND THIS INDENTURE FURTHER WITNESSETH, that the Company for itself and
its successors, does hereby covenant and agree to and with the Trustee and its
successors in said trust, for the benefit of those who shall hold the Bonds, as
follows:

                                       6
<PAGE>

                                   ARTICLE 1.

                            BONDS OF THE 2017 SERIES

          SECTION 1.01. ESTABLISHMENT OF BONDS OF THE 2017 SERIES. There shall
be, and is hereby established and created, a new series of Bonds, known as and
entitled "First Mortgage Bonds, 6.90% Series due 2017" (hereinabove defined as
"Bonds of the 2017 Series") and the form thereof shall be substantially as
hereinafter set forth.

          The Bonds of the 2017 Series shall be limited to Twelve Million
Dollars ($12,000,000) aggregate principal amount.

          SECTION 1.02. TERMS OF BONDS OF THE 2017 SERIES. The Bonds of the 2017
Series shall be issued as a single registered bond, without coupons, numbered
RO-1, and dated the date of its initial authentication and delivery.

          The Bonds of the 2017 Series shall mature August 20, 2017, and shall
bear interest at the rate of six and nine-tenths percent (6.90%) per annum until
payment of the principal thereof, and shall include interest from the date of
authentication upon original issue. The principal of and interest on the Bonds
of the 2017 Series shall mature and be payable in equal monthly payments in the
amount of $107,189.62, commencing September 20, 2002, and on the 20th day of
each month thereafter to and including August 20, 2017; provided, that the
payment due on August 20, 2017 shall in any event be in an amount sufficient to
pay the entire principal balance remaining unpaid plus interest thereon to the
date of payment. If any interest payment date falls on a date other than a
Business Day, the payment date shall be deemed to be the next Business Day. As
used herein the term "Business Day" shall mean any day other than a Saturday or
a Sunday or a day on which commercial banks are required or authorized by law to
close in the city from where the payment is to be made on the Bonds of the 2017
Series. There shall be attached to the Bond of the 2017 Series, upon its
delivery, an amortization schedule showing the principal and interest portions
of each such payment.

          The principal of, premium, if any, and interest on, the Bonds of the
2017 Series shall be paid in lawful money of the United States of America, at
the office of Regions Bank, in the City of Mobile, Alabama, or of its successor
in trust; provided, however, that (i) interest on the Bonds of the 2017 Series
may be paid by check payable to the order of the holder entitled thereto and
mailed by the Trustee by first class mail, postage prepaid, to such holder at
its registered addresses as shown on the Bond register for the Bonds of the 2017
Series, and (ii) the foregoing provisions of this paragraph may be modified
pursuant to an agreement of the type described in Section 2.01 of this
Eighteenth Supplemental Indenture.

          The person in whose name the single Bond of the 2017 Series is
registered at the close of business on any record date (as hereinafter defined)
with respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date notwithstanding the cancellation
of such Bond of the 2017 Series upon any transfer subsequent to the record date
and prior to such interest payment date, except that, if and to the extent that
the Company shall default in the payment of the interest due on such interest
payment date, then the registered

                                       7
<PAGE>

holder of the Bonds of the 2017 Series on such record date shall have no further
right to or claim in respect of such defaulted interest as such registered
holder on such record date, and the person entitled to receive payment of any
defaulted interest thereafter payable or paid on the Bonds of the 2017 Series
shall be the registered holder of the Bonds of the 2017 Series on the record
date for payment of such defaulted interest. The term "record date" as used in
this Section 1.02, and in the form of the Bonds of the 2017 Series, with respect
to any interest payment date applicable to the Bonds of the 2017 Series, shall
mean the Business Day next preceding a payment date, or such record date
established for defaulted interest as hereinafter provided.

          In case of failure by the Company to pay any interest when due, the
claim for such interest shall be deemed to have been transferred by transfer of
any Bonds of the 2017 Series registered on the Bond register for the Bonds of
the 2017 Series and the Company, by not less than ten (10) days written notice
to bondholders, may fix a subsequent record date, not more than fifteen (15)
days prior to the date fixed for the payment of such interest, for determination
of holders entitled to payment of such interest. Such provision for
establishment of a subsequent record date, however, shall in no way affect the
rights of bondholders or of the Trustee consequent on any default.

          Any notice affecting or relating to the Bonds of the 2017 Series
required or permitted to be given under the Indenture may be given by first
class mail, postage prepaid, to the holders of record at their respective
addresses as shown on the Bond register for the Bonds of the 2017 Series at the
date of mailing. The certificate of the Trustee that such mailing has been
effected shall be conclusive evidence of compliance with the requirements of
this Section 1.02 and of Section 4.02 and Section 16.07 of the Original
Indenture, whether or not any holder receives such notice.

          As permitted by the provisions of Section 2.06 of the Original
Indenture and upon payment at the option of the Company of a sum sufficient to
reimburse it for any tax or other governmental charge required to be paid by the
Company or the Trustee as provided therein, Bonds of the 2017 Series may be
exchanged for other Bonds of the 2017 Series of different authorized
denominations of like aggregate principal amount. Notwithstanding the provisions
of said Section 2.06, no further sum, other than a sum sufficient to reimburse
the Company for such taxes or other governmental charges, shall be required to
be paid upon any exchange of Bonds of the 2017 Series or upon any transfer
thereof.

          Neither the Company nor the Trustee shall be required to make
transfers of Bonds of the 2017 Series for a period of ten (10) days next
preceding any payment date for Bonds of the 2017 Series.

          The Trustee hereunder shall, by virtue of its office as such Trustee,
be the Registrar and Transfer Agent of the Company for the purpose of
registering and transferring Bonds of the 2017 Series.

          SECTION 1.03. REDEMPTION PROVISIONS FOR BONDS OF THE 2017 SERIES. The
Bonds of the 2017 Series shall be subject to redemption prior to maturity, as a
whole at any time, or in part from time to time in amounts of $500,000 and
$10,000 increments in excess thereof, at the option of the Company, upon payment
of 100% of the principal amount of the Bonds being

                                       8
<PAGE>

redeemed, plus the Yield Maintenance Adjustment (as defined below), if any, with
respect to such Bonds, together, in the case of a redemption in whole of the
Bonds of the 2017 Series, with interest accrued thereon to the date of
redemption, upon prior notice given by first class mail, postage prepaid, to the
registered holder of such Bonds not less than thirty (30) days nor more than
ninety (90) days prior to the redemption date, and otherwise as provided in
Section 1.02 hereof, notwithstanding the provisions of Section 4.02 and Section
16.07 of the Original Indenture; provided, however, that any such notice may be
given or waived as provided in Article 4 and Section 16.07 of the Original
Indenture. In addition, the registered holder shall give written notice to the
Company and the Trustee (by telecopy or other same-day written communication
confirmed by the recipient thereof on a date at least two (2) Business Days
prior to the date fixed for redemption of such Bonds) of the amounts and
calculation of the Yield Maintenance Adjustment.

          "Yield Maintenance Adjustment" shall mean, in connection with any
redemption pursuant to this Section 1.03(a)(i), the amount, if any, that the
holder reasonably determines in good faith to be its total losses and costs in
connection with the prepayment of the Bonds of the 2017 Series, including any
loss of bargain, cost of funding, or at the election of the holder but without
duplication, loss or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading position. No amount
will be due from either the Company or the holder if the holder determines that
its total losses and costs as so determined is an amount less than or equal to
zero. The holder shall determine the amount of the Yield Maintenance Adjustment
in accordance with the procedures set out in the letter from Regions Bank to the
Company dated August 20, 2002.

          The amount of any partial redemption shall be applied to the reduction
of the principal of the Bonds of the 2017 Series and shall not reduce the amount
of the required monthly payment. As soon as practicable after any partial
redemption, the holder shall furnish to the Company and the Trustee a revised
amortization schedule showing the principal and interest portions of the
remaining payments, whereupon such amortization schedule shall be deemed to
replace the then existing schedule and shall be a part of the Bonds of the 2017
Series.

          SECTION 1.04. FORM OF BONDS OF THE 2017 SERIES. The Bonds of the 2017
Series and the Trustee's authentication certificate on the Bonds of said series
are to be substantially in the forms following, respectively:

                                       9
<PAGE>

                        [FORM OF BOND OF THE 2017 SERIES]
No. RO-______                                                        $__________

                         MOBILE GAS SERVICE CORPORATION
               INCORPORATED UNDER THE LAWS OF THE STATE OF ALABAMA
                               FIRST MORTGAGE BOND
                        6.90% SERIES DUE AUGUST 20, 2017

         MOBILE GAS SERVICE CORPORATION, an Alabama corporation (hereinafter
sometimes called the "Company", which term shall include any successor
corporation as defined in the Indenture hereinafter mentioned), for value
received, hereby promises to pay to _________________________ or registered
assigns, ________________ Dollars ($_____) and to pay to the registered owner
hereof interest on the unpaid portion of the principal hereof from the date of
authentication upon original issue hereof, or from the interest payment date
next preceding the date of this bond to which interest has been paid, or from
the date of this bond if it be an interest payment date to which interest has
been paid, whichever interest payment date is the later, at the rate of six and
nine-tenths percent (6.90%) per annum (computed on the basis of a 360-day year
consisting of twelve 30-day months). The principal hereof and the interest
hereon shall mature and be payable in equal monthly installments, each in the
amount of $___________, commencing September 20, 2002 and on the 20th day of
each month thereafter to and including August 20, 2017; provided, that the
payment due August 20, 2017 shall in any event be in an amount sufficient to pay
the entire unpaid principal hereof and the interest hereon to the date of
payment.

          The principal of, premium, if any, and interest on, this bond will be
paid in lawful money of the United States of America at the office of Regions
Bank in the City of Mobile, Alabama, or of its successor in trust (hereinafter
sometimes called the "Trustee"); provided, however, that (i) interest on this
bond may be paid by check payable to the order of the registered holder entitled
thereto and mailed by the Trustee by first class mail, postage prepaid, to such
holder at his address as shown on the bond register for the bonds of this
series, and (ii) the method of payment may be modified by agreement as permitted
by the within-mentioned Indenture.

          This bond is one of the bonds, of a series designated as 6.90% Series
due 2017, of an authorized issue of bonds of the Company, known as First
Mortgage Bonds, all issued or issuable in one or more series (which several
series may be of different denominations, dates and tenor) under and equally
secured (except insofar as any sinking fund, improvement fund or other fund
established in accordance with the provisions of said Indenture may afford
additional security for the bonds of any specific series) by an Indenture of
Mortgage dated as of December 1, 1941, duly executed and delivered by the
Company to The First National Bank of Mobile, as Trustee, as supplemented and
modified by the First Supplemental Indenture dated as of October 1, 1 944, and
all other indentures supplemental thereto, including an Eighteenth Supplemental
Indenture dated as of August 1, 2002, executed by the Company and delivered to
Regions Bank, as successor trustee to said Trustee (said Indenture of Mortgage
as so supplemented and modified being herein sometimes called "said Indenture"),
reference to which Indenture and

                                       10
<PAGE>

indentures supplemental thereto is hereby made for a description of the property
mortgaged and pledged as security for said bonds, the rights and remedies of the
registered owner of this bond in regard thereto, the terms and conditions upon
which said bonds are secured thereby, the terms and conditions upon which said
bonds may be issued thereunder and the rights, immunities and obligations of the
Trustee under said Indenture.

          This bond is subject to redemption prior to maturity as a whole at any
time or in part from time to time, in amounts of $500,000 and $10,000 increments
in excess thereof, at the option of the Company, upon payment of 100% of the
principal amount of the bond being redeemed, together with the Yield Maintenance
Adjustment (as defined in the Eighteenth Supplemental Indenture), if any, with
respect to such bond, together, in the case of a redemption in whole hereof,
with interest accrued hereon to the date of redemption; upon prior notice
(unless waived as provided in said Indenture) given by first class mail, postage
prepaid, to the respective registered holder of such bond not less than thirty
(30) days nor more than ninety (90) days prior to the redemption date, and
otherwise as more fully provided in said Indenture. If this bond or any portion
thereof is called for redemption and payment duly provided for as specified in
said Indenture, this bond or such portion thereof shall cease to be entitled to
the lien and security interest of said Indenture from and after the date payment
is so provided and shall cease to bear interest from and after the date fixed
for redemption.

          The amount of any partial redemption shall be applied to the reduction
of the principal hereof and shall not reduce the amount of the required monthly
payment set forth above. As soon as practical after any partial redemption, the
holder shall furnish to the Company and the Trustee a revised amortization
schedule showing the principal and interest portions of the remaining payments,
whereupon such amortization schedule shall be deemed to replace the then
existing schedule and shall be a part hereof.

          Any assignee or transferee of this bond shall take subject to any such
partial redemption, whether or not noted on the face hereof.

          To the extent permitted and as provided in said Indenture,
modifications or alterations of said Indenture, or of any indenture supplemental
thereto, and of the bonds issued thereunder, and of the rights and obligations
of the Company and the rights of the bearers or registered owners of the bonds
and coupons, may be made with the consent of the Company and with the written
approvals or consents of the bearers or registered owners of not less than
seventy-five percent (75%) in principal amount of all bonds outstanding,
including, if more than one series of bonds shall be at the time outstanding, no
less than sixty percent (60%) in principal amount of each series, provided,
however, that no such modification or alteration shall, without the written
approval or consent of the registered owner of any bond affected thereby, (a)
impair or affect the right of such bearer or registered owner to receive payment
of the principal of and interest on any bond, on or after the respective due
dates expressed in any bond, or to institute suit for the enforcement of any
such payment on or after such respective dates, (b) permit the creation of any
lien prior to or on a parity with the lien of said Indenture, or (c) reduce the
percentage of the principal amount of the bonds upon the approval or consent of
the bearers or registered owners of which modifications or alterations may be
effected as aforesaid.

                                       11
<PAGE>

          This bond is transferable by the registered owner hereof in person or
by his duly authorized attorney, at said office of the Trustee, upon payment of
any tax or other governmental charge payable in connection with such transfer.
No transfers of bonds of this series shall be required to be made during the ten
(10) days next preceding each scheduled payment date for bonds of this series.

          In case a default as defined in said Indenture shall occur, the
principal of this bond may become or be declared due and payable before maturity
in the manner and with the effect provided in said Indenture. The holders,
however, of certain specified percentages of the bonds at the time outstanding,
including in certain cases specified percentages of bonds of particular series,
may in the cases, to the extent and under the conditions provided in said
Indenture, waive defaults thereunder and the consequences of such defaults.

          It is part of the contract herein contained that each registered owner
hereof by the acceptance hereof waives all right of recourse to any personal
liability of any incorporator, stockholder, officer or director, past, present
or future, of the Company, as such, or of any predecessor or successor
corporation, howsoever arising, for the collection of any indebtedness
hereunder; and as part of the consideration for the issue hereof releases from
all such liability each such incorporator, stockholder, officer or director, all
as provided in said Indenture.

          This bond shall not become or be valid or obligatory for any purpose
until the authentication certificate hereon shall have been signed by the
Trustee.

          IN WITNESS WHEREOF, MOBILE GAS SERVICE CORPORATION has caused these
presents to be executed in its corporate name and behalf by its President or a
Vice President and its corporate seal to be hereunto affixed and attested by its
Secretary or an Assistant Secretary, all as of ____________________.

                                       MOBILE GAS SERVICE CORPORATION

                                       By:
                                          --------------------------------------
 Attest:                                                 President

-----------------------------
         Secretary

                                       12
<PAGE>

                [FORM OF AUTHENTICATION CERTIFICATE FOR ALL BONDS
                                 OF 2017 SERIES]

          This bond is one of the bonds of the series designated therein,
referred to in the within-mentioned Indenture.

                                       REGIONS BANK, TRUSTEE,

                                       By:
                                          --------------------------------------
                                                    AUTHORIZED OFFICER

                                       13
<PAGE>

                                   ARTICLE 2.

                                SUNDRY PROVISIONS

          SECTION 2.01. The Company may enter into an agreement with the holder
of any registered Bond, without coupons, of any series providing for the payment
to such holder of the principal of and the premium, if any, and interest on such
Bond or any part thereof at a place other than the offices or agencies specified
in the Indenture and such Bond, including by wire transfer, without presentation
of such Bond, and for the making of notation of any such payment by such holder
or by an agent of the Company or of the Trustee. The Trustee is authorized to
approve any such agreement, and shall not be liable for any act or omission to
act on the part of the Company, any such holder or any agent of the Company in
connection with any such agreement.

          SECTION 2.02. This Eighteenth Supplemental Indenture is executed and
shall be construed as an indenture supplemental to the Original Indenture, as
heretofore supplemented and modified, and shall form a part thereof, and the
Original Indenture, as heretofore supplemented and modified, is hereby ratified,
approved and confirmed.

          SECTION 2.03. The recitals contained in this Eighteenth Supplemental
Indenture are made by the Company and not by the Trustee; and all of the
provisions contained in the Original Indenture, as heretofore supplemented and
modified, in respect of the rights, privileges, immunities, powers and duties of
the Trustee shall be applicable in respect hereof as fully and with like effect
as if set forth herein in full.

          SECTION 2.04. Nothing in this Eighteenth Supplemental Indenture
expressed or implied is intended or shall be construed to give to any person
other than the Company, the Trustee, and the holders of the Bonds issued
hereunder, any legal or equitable right, remedy or claim under or in respect of
the Original Indenture or any indenture supplemental thereto or any covenant,
condition or provision therein or herein or in the Bonds contained; and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the Company, the Trustee and the holders of the Bonds
issued hereunder.

          SECTION 2.05. The titles of Articles, section headings and any wording
on the cover of this Eighteenth Supplemental Indenture are inserted for
convenience only and are not a part hereof.

          SECTION 2.06. All the covenants, stipulations, promises and agreements
in this Eighteenth Supplemental Indenture contained made by or on behalf of the
Company or of the Trustee shall inure to and bind their respective successors
and assigns.

          SECTION 2.07. Although this Eighteenth Supplemental Indenture is dated
for convenience and for the purpose of reference as of August 1, 2001, the
actual date or dates of execution by the Company and by the Trustee are as
indicated by their respective acknowledgments hereto annexed.

                                       14
<PAGE>

          SECTION 2.08. In order to facilitate the recording or filing of this
Eighteenth Supplemental Indenture, the same may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and such
counterparts shall together constitute but one and the same instrument.

          IN WITNESS WHEREOF, MOBILE GAS SERVICE CORPORATION has caused this
Eighteenth Supplemental Indenture to be signed in its corporate name and behalf
by its President or one of its Vice Presidents and its corporate seal to be
hereunto affixed and attested by its Secretary or one of its Assistant
Secretaries; and REGIONS BANK has caused this Eighteenth Supplemental Indenture
to be signed in its corporate name and behalf by one of its Vice Presidents and
its corporate seal to be hereunto affixed and attested by one of its Trust
Officers; all as of the day and year first above written.

          Executed on the 20th day of August, 2002.

                                       MOBILE GAS SERVICE CORPORATION
(CORPORATE SEAL)

                                       By: /s/ John S. Davis
                                           ------------------
Attest:                                    President

/s/ G. Edgar Downing, Jr.
-------------------------
        Secretary

                                       REGIONS BANK, as Trustee

(CORPORATE SEAL)

                                       By: /s/ Barbara M. Hory
                                           -------------------
Attest:                                    Vice President and Corporate Trust
                                           Officer

/s/ Frank W. Browning, Jr.
--------------------------
Title: Senior Vice President
       & Trust Officer

                                       15
<PAGE>

STATE OF ALABAMA,)
                           ss.:
COUNTY OF MOBILE,)

         I, Angela C. Merren, a Notary Public in and for said county in said
state, hereby certify that John S. Davis, and G. Edgar Downing, Jr., whose names
as President and Secretary, respectively, of MOBILE GAS SERVICE CORPORATION, a
corporation, are signed to the foregoing indenture, and who are known to me,
acknowledged before me on this day that, being informed of the contents of said
indenture, they, as such officers and with full authority, executed the same
voluntarily for and as the act of said Corporation.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal this
20th day of August, 2002.

                                       /s/ Angela C. Merren
                                       --------------------
                                       Notary Public
                                       Mobile County, AL
                                       My Commission Expires: 06-04-06
                                                              --------

                                                                 (NOTARIAL SEAL)

STATE OF ALABAMA,)
                           ss.:
COUNTY OF MOBILE,)

         I, /s/ Susan Cummingham, a Notary Public in and for said county in said
state, hereby certify that Barbara M. Hory and Frank W. Browning, Jr., whose
names as Vice President Corporate Trust Officer and Senior Vice President &
Trust Officer, respectively, of REGIONS BANK, an Alabama banking corporation, as
trustee, are signed to the foregoing indenture, and who are known to me,
acknowledged before me on this day that, being informed of the contents of said
indenture, they, as such officers and with full authority, executed the same
voluntarily for and as the act of said REGIONS BANK, acting in its capacity as
trustee as aforesaid.

         IN WITNESS WHEREOF, I have hereunto set my hand and official seal this
20th day of August, 2002.

                                       /s/ Susan Cunningham
                                       --------------------
                                       Notary Public
                                       Mobile County, AL
                                       My Commission Expires: 02-20-05
                                                              --------

                                                                 (NOTARIAL SEAL)

                                       16
<PAGE>

Grantor's Address:

Mobile Gas Service Corporation
Post Office Box 2248
Mobile, Alabama 36652

Grantee's Address:

Regions Bank, as Trustee
Trust Department
106 St. Francis Street
Mobile, AL 36602

This instrument is recorded in Mobile and Baldwin Counties, Alabama, as follows:

Mobile County, Alabama

Baldwin County, Alabama

                                       17

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