-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D6sb7ZBFNmDANq1+0htWHRwNqSUEW+Ha2i+DoIYXdJTOM55gLPaxYRmpE5WYBynr zOyzihHPPhjmonyPuXBzWg== 0000931763-01-501512.txt : 20010817 0000931763-01-501512.hdr.sgml : 20010817 ACCESSION NUMBER: 0000931763-01-501512 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20010816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALABAMA GAS CORP CENTRAL INDEX KEY: 0000003146 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 630022000 STATE OF INCORPORATION: AL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-67672 FILM NUMBER: 1716715 BUSINESS ADDRESS: STREET 1: 2101 SIXTH AVE NORTH CITY: BIRMINGHAM STATE: AL ZIP: 35203 BUSINESS PHONE: 2053262742 MAIL ADDRESS: STREET 1: 2101 SIXTH AVE NORTH CITY: BIRMINGHAM STATE: AL ZIP: 35203 S-3 1 ds3.txt PRELIMINARY FILING OF THE FORM S-3 As filed with the Securities and Exchange Commission on August 16, 2001 Registration No. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 _________________________ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 _________________________ ALABAMA GAS CORPORATION (Exact name of registrant as specified in its charter) Alabama 63-0022000 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 605 Richard Arrington Jr. Blvd. North, Birmingham, Alabama 35203-2707 (205) 326-8100 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) _________________________ J. DAVID WOODRUFF, JR. Vice President - Legal and Assistant Secretary Alabama Gas Corporation 605 Richard Arrington Jr. Blvd. North Birmingham, Alabama 35203-2707 (205) 326-8100 (Name, address, including zip code, and telephone number, including area code, of agent for service) with copies to: JOHN K. MOLEN, ESQ. JEFFREY J. DELANEY, ESQ. Bradley Arant Rose & White LLP Pillsbury Winthrop LLP 2001 Park Place, Suite 1400 One Battery Park Plaza Birmingham, Alabama 35203 New York, New York 10004-1490 (205) 521-8000 (212) 858-1000 _________________________ Approximate date of commencement of the proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [ ] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] _________________ If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] __________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE
=============================================================================================================================== Title of each class of Amount to Proposed maximum aggregate Proposed maximum Amount of securities to be registered be registered offering price per share/(1)/ aggregate offering price/(1)/ registration fee - ------------------------------------------------------------------------------------------------------------------------------- Notes $75,000,000 100% $75,000,000 $18,750 ===============================================================================================================================
/(1)/ Estimated solely for purposes of calculating the registration fee. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED AUGUST 16, 2001 PROSPECTUS Alabama Gas Corporation [ALABAMA GAS LOGO] $40,000,000 % Notes due September 1, 2016 $35,000,000 % Notes due September 1, 2031 _____________________ The 15-year notes will mature on September 1, 2016 and bear interest at a rate of % per year. However, we can redeem the 15-year notes at our option on or after September 1, 2004 in whole or in part at 100% of the principal amount being redeemed plus any accrued interest to the redemption date. The 30-year notes will mature on September 1, 2031 and bear interest at a rate of % per year. However, we can redeem the 30-year notes at our option on or after September 1, 2006 in whole or in part at 100% of the principal amount being redeemed plus any accrued interest to the redemption date. Interest on the 15-year notes and the 30-year notes, which we refer to collectively as the "notes," is payable monthly on the first calendar day of each month, beginning on October 1, 2001, and at maturity or earlier redemption. We will be required to redeem the notes, subject to individual and aggregate annual principal amount limitations, at the option of the representative of any deceased beneficial owner of the notes at 100% of the principal amount being redeemed plus any accrued interest to the payment date. Our timely payment of the regularly scheduled payments of the principal of, and interest on, the notes when due, and of payments in connection with the mandatory redemption of the notes at the option of the representatives of deceased beneficial owners, will be insured by a financial guaranty insurance policy to be issued by Ambac Assurance Corporation simultaneously with the delivery of the notes. [AMBAC LOGO] __________________________ Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense. ------------------------ Public offering Underwriting discount(2) Proceeds to us(3) price(1) Per 15-year note.. % % % Total........... $ $ $ Per 30-year note.. % % % Total........... $ $ $ - ------------ /(1)/ Plus accrued interest, if any, from the date of original issue. /(2)/ We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933. /(3)/ Before deducting expenses, including payment of the insurance premium, payable by us estimated at $2,019,250. ------------------------ We expect that the notes will be ready for delivery in book-entry form only through The Depository Trust Company on or about August , 2001. ------------------------ A.G. Edwards & Sons, Inc. Edward D. Jones & Co., L.P. The date of this prospectus is August , 2001. PROSPECTUS SUMMARY The following summary is qualified in its entirety by reference to the detailed information appearing elsewhere, or incorporated by reference, in this prospectus. You should carefully read the entire prospectus, including the documents incorporated by reference into it. Alabama Gas Corporation We are the largest natural gas distribution utility in the State of Alabama. We purchase natural gas through interstate and intrastate marketers and suppliers and distribute the purchased gas through our distribution facilities for sale to residential, commercial and industrial customers and other end-users of natural gas. We also provide transportation services to industrial and commercial customers located on our distribution system. These transportation customers, using us as their agent or acting on their own, purchase gas directly from producers, marketers or suppliers and arrange for the delivery of the gas into our distribution system. We charge a fee to transport this customer-owned gas through our distribution system to our customers' facilities. Our business is highly seasonal since a material portion of our total sales and delivery volumes is to customers whose usage varies depending upon temperature. Our present rate structure, however, includes a temperature adjustment to customers' monthly bills which is designed to mitigate the effect of departures from normal temperature on our earnings. Our service territory is located in central and parts of north Alabama and includes approximately 185 cities and communities in 27 counties. The aggregate population of the counties we serve is estimated to be 2.3 million people. The cities we serve include Birmingham, the center of the largest metropolitan area in Alabama, and Montgomery, the state capital. We are subject to the jurisdiction of the Alabama Public Service Commission. During fiscal year 2000 (which ended on September 30, 2000), we served an average of 429,368 residential customers and 35,526 commercial, industrial and transportation customers. Our distribution system includes approximately 9,370 miles of main and more than 10,980 miles of service lines, odorization and regulation facilities, and customer meters. We were formed in 1948 by the merger of the Alabama Gas Company into Birmingham Gas Company, the predecessors of which had been in existence since the late 1800s. We became publicly held in 1953. Through a corporate reorganization in 1979, we became a subsidiary of Energen Corporation, a New York Stock Exchange-listed company (ticker symbol: EGN). Energen is not guaranteeing or otherwise obligated to make any payments in respect of the notes. Both Alabama Gas and Energen are incorporated under the laws of Alabama, and our executive offices are located at 605 Richard Arrington Jr. Blvd. North, Birmingham, Alabama 35203 and our telephone number is (205) 326-8100. The Offering Notes Offered....................... We are offering $75,000,000 aggregate principal amount of notes. We are offering $40,000,000 of 15-year notes bearing interest at a rate of % per year and $35,000,000 of 30-year notes bearing interest at a rate of % per year. Interest Payment Dates.............. We will pay interest on the notes of each series monthly in arrears on the first calendar day of each month beginning on October 1, 2001. Record Dates........................ We will make interest payments to the holders of notes of each series who hold those notes as of the close of business on the fifteenth calendar day of the month preceding the month in which the applicable interest payment date falls as well as upon presentation and surrender at maturity or earlier redemption. 1 Date of Maturity.................... The 15-year notes will mature on September 1, 2016 and the 30-year notes will mature on September 1, 2031 unless, in each case, redeemed or otherwise repaid prior to that date. Optional Redemption by Us........... We will have the option to redeem the 15- year notes, in whole or in part, from time to time, on or after September 1, 2004. We will also have the option to redeem the 30- year notes, in whole or in part, from time to time, on or after September 1, 2006. The optional redemption price for the notes of each series will be 100% of the principal amount being redeemed plus unpaid interest accrued to the redemption date. We have the right to redeem the notes of one series in whole or in part without redeeming the other series. Redemption Option of a Deceased Beneficial Owner's Representative... We will be required to redeem either series of notes at the option of the representative of any deceased beneficial owner of notes at 100% of the principal amount being redeemed plus unpaid interest accrued to the payment date; provided, however, that the maximum principal amount we will be required to redeem during the initial period from the date of original issuance of the notes through and including August 31, 2002, and during each twelve- month period thereafter, is (1) $25,000 principal amount of 15-year notes per deceased beneficial owner and an aggregate of $800,000 for all deceased beneficial owners of 15-year notes; and (2) $25,000 principal amount of 30-year notes per deceased beneficial owner and an aggregate of $700,000 for all deceased beneficial owners of 30-year notes. Insurance........................... The timely payments of the regularly scheduled principal of and interest on each series of notes and, subject to certain individual and aggregate annual principal amount limitations referred to above, any payments in connection with the mandatory redemption of notes at the option of representatives of deceased beneficial owners thereof will be insured by a financial guaranty insurance policy issued by Ambac Assurance, which will be issued at the same time the notes are delivered. Ranking............................. The notes will constitute our direct, unsecured obligations and will rank equally with all of our other unsecured and unsubordinated indebtedness. Ratings............................. We expect that S&P and Moody's will assign the notes of each series triple-A ratings. 2 Summary Financial Information (Dollars in thousands) The following summary financial information for the years ended September 30, 1998, 1999 and 2000 has been derived from our audited financial statements, which are incorporated in this prospectus by reference to our annual report on Form 10-K for the fiscal year ended September 30, 2000. The summary financial information for the nine months ended June 30, 2000 and 2001, and as of June 30, 2001, has been derived from our unaudited quarterly financial statements (which include all adjustments consisting only of normal recurring items) which are incorporated by reference in this prospectus by reference to our quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2001. You should read the summary financial information in conjunction with, and it is qualified in its entirety by reference to, the financial statements from which it has been derived and the accompanying notes and management's discussion and analysis thereto incorporated by reference in this prospectus.
Nine months ended Years ended September 30, June 30, --------------------------------- ------------------- 2000 1999 1998 2001 2000 -------- -------- -------- -------- -------- Statement of Income Data: Operating revenues................ $366,161 $325,554 $369,940 $493,191 $313,085 Operating income.................. $ 49,063 $ 46,565 $ 41,663 $ 56,822 $ 55,849 Net income........................ $ 26,322 $ 23,297 $ 20,587 $ 31,951 $ 31,791 As of June 30, 2001 --------------------------------------------- Percentage Amount As adjusted(1) as adjusted(1) ---------- -------------- -------------- Balance Sheet Data: Long-term debt: Medium-Term Notes, Series A...... $ 115,000 $115,000 % Notes due September 1, 2016... -- 40,000 % Notes due September 1, 2031... -- 35,000 --------- -------- Total long-term debt............. 115,000 190,000 46.3% Common shareholder's equity....... 220,749 220,749 53.7% ---------- -------- ----- Total capitalization............. $ 335,749 $410,749 100% ========== ======== ===== Cash and cash equivalents......... $ 685 $ 26,776 Short-term debt................... $ 45,000 $ 0
- -------------- (1) Adjusted to reflect the issuance and sale of the notes offered by this prospectus and the application of the net proceeds of the notes as described under "Use of Proceeds," as if they had occurred at June 30, 2001. Ratio of Earnings to Fixed Charges The following table shows our ratio of earnings to fixed charges for the periods indicated: Years ended September 30, ------------------------------------------ Twelve months ended 2000 1999 1998 1997 1996 June 30, 2001 ---- ---- ---- ---- ---- ------------------- 4.80 4.25 3.65 3.42 3.50 4.21 3 For purposes of computing the ratio, "earnings" consist of net income applicable to common stock, plus applicable income taxes, interest, net of amount capitalized, and the appropriate portion of rent expense. Fixed charges consist of interest expense, capitalized interest and amortization of debt discount and expense, and the appropriate portion of rent expense. Fixed charges have not been reduced by any allowance for funds used during construction. 4 WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549 and at regional SEC offices in Chicago, Illinois and New York, New York. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. We "incorporate by reference" into this prospectus the information we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Some information contained in this prospectus updates the information incorporated by reference, and information that we file subsequently with the SEC will automatically update this prospectus. In other words, in the case of a conflict or inconsistency between information set forth in this prospectus and information incorporated by reference into this prospectus, you should rely on the information contained in the document that was filed later. We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until we sell all the notes offered by this prospectus: . Annual Report on Form 10-K for the fiscal year ended September 30, 2000; . Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2000; . Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2001; and . Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2001. You may request a copy of these filings, other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing, at no cost, by writing to or telephoning us at the following address: J. David Woodruff, Jr. Alabama Gas Corporation 605 Richard Arrington Jr. Blvd. North Birmingham, Alabama 35203-2707 Phone: (205) 326-8100 FORWARD-LOOKING STATEMENTS Certain statements contained in or incorporated by reference into this prospectus express expectations of future plans, objectives and performance with respect to us and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements involve certain risks and uncertainties that may cause future results to differ materially from those contemplated, projected, estimated or budgeted in these forward-looking statements. Except for our obligations under the federal securities laws, we undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise. Factors that may impact forward-looking statements include, but are not limited to, economic and competitive conditions, inflation rates, legislative and regulatory changes, financial market conditions, future business decisions and other uncertainties, all of which are difficult to predict. USE OF PROCEEDS We estimate that the net proceeds from the sale of the notes will be approximately $71 million. We intend to use the net proceeds from the sale of the notes (1) to repay approximately $67 million of short-term debt bearing interest at an annual average interest rate of 4.06% with maturities varying between 1 and 13 days, as of August 16, 2001, and (2) for general corporate purposes. During the past year, we have used the proceeds of short-term debt to make capital expenditures in the ordinary course of business and to repay $10 million of medium-term notes. 5 DESCRIPTION OF THE NOTES General The 15-year notes and the 30-year notes offered by this prospectus will constitute our direct, unsecured obligations and will rank equally with all of our other unsecured and unsubordinated debt. We will issue the 15-year notes and the 30-year notes as two separate series of debt securities under the indenture, dated as of November 1, 1993, between us and The Bank of New York (as successor to NationsBank of Georgia, National Association), as trustee, in denominations of $1,000 and integral multiples of $1,000. The indenture does not limit the aggregate principal amount of unsecured debt securities that we can issue under it, and provides that we may issue debt securities from time to time in one or more series pursuant to the terms of one or more supplemental indentures, board resolutions or officers' certificates creating the series. As of the date of this prospectus, we have $115 million of securities outstanding under the indenture, consisting solely of our Medium-Term Notes, Series A, which have been issued in different tranches and, therefore, have varying interest rates and maturities. We have summarized below various provisions of the indenture and the notes. Because this discussion is only a summary, it does not necessarily contain all of the information you should consider. The indenture is an exhibit to the registration statement of which this prospectus is a part, and we incorporate the indenture by reference into this prospectus. 15-Year Notes Maturity. The 15-year notes will be limited in principal amount to $40,000,000. The entire principal amount of the 15-year notes, unless previously redeemed or otherwise repaid, will mature and become due and payable, together with any unpaid interest accrued to the maturity date, on September 1, 2016. In the event that the maturity date or any redemption date is not a business day, then payment of principal and any interest will be made on the next business day (and without any interest or other payment in respect of any such delay). Interest. Each 15-year note will bear interest at % per year from the date of original issuance, payable monthly in arrears on the first calendar day of each month to the person in whose name that 15-year note is registered as of the close of business on the fifteenth calendar day of the month preceding the month in which the applicable interest payment date falls and at maturity or earlier redemption, as the case may be. The initial interest payment date is October 1, 2001. The amount of interest payable will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any interest payment date is not a business day, then payment of interest will be made on the next business day (and without any interest or other payment in respect of any such delay). In addition, if there has been a default in the payment of interest on any 15-year note, this defaulted interest may be payable to the holder of that note as of the close of business on a date selected by the trustee not more than 15 days and not less than 10 days prior to the date proposed by us for payment of this defaulted interest. Optional redemption. We will have the option to redeem the 15-year notes, in whole or in part, without premium, from time to time, on or after September 1, 2004 upon not less than 30 nor more than 60 days prior written notice, at a redemption price equal to 100% of the principal amount being redeemed plus any unpaid interest accrued to the redemption date. Our right to redeem the 15-year notes is independent of our right to redeem the 30-year notes described below. Accordingly, we have the right to redeem either the 15-year notes or the 30-year notes in whole or in part without redeeming the other series. 30-Year Notes Maturity. The 30-year notes will be limited in principal amount to $35,000,000. The entire principal amount of the 30-year notes, unless previously redeemed or otherwise repaid, will mature and become due and 6 payable, together with any unpaid interest accrued to the maturity date, on September 1, 2031. In the event that the maturity date or any redemption date is not a business day, then payment of principal and any interest will be made on the next business day (and without any interest or other payment in respect of any such delay). Interest. Each 30-year note will bear interest at % per year from the date of original issuance, payable monthly in arrears on the first calendar day of each month to the person in whose name that 30-year note is registered as of the close of business on the fifteenth calendar day of the month preceding the month in which the applicable interest payment date falls and at maturity or earlier redemption, as the case may be. The initial interest payment date is October 1, 2001. The amount of interest payable will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any interest payment date is not a business day, then payment of interest will be made on the next business day (and without any interest or other payment in respect of any such delay). In addition, if there has been a default in the payment of interest on any 30-year note, this defaulted interest may be payable to the holder of that note as of the close of business on a date selected by the trustee not more than 15 days and not less than 10 days prior to the date proposed by us for payment of this defaulted interest. Optional redemption. We will have the option to redeem the 30-year notes, in whole or in part, without premium, from time to time, on or after September 1, 2006 upon not less than 30 nor more than 60 days prior written notice, at a redemption price equal to 100% of the principal amount being redeemed plus any unpaid interest accrued to the redemption date. Our right to redeem the 30-year notes is independent of our right to redeem the 15-year notes described above. Accordingly, we have the right to redeem either the 30-year notes or the 15-year notes in whole or in part without redeeming the other series. Redemption by Us Upon Death of a Beneficial Owner Unless the notes have been declared due and payable prior to their maturity by reason of an event of default under the indenture, or the notes of either series have been previously redeemed or otherwise repaid, the personal representative or other person authorized to represent the deceased beneficial owner (that is, one who has the right to sell, transfer or otherwise dispose of an interest in a note and the right to receive the proceeds therefrom, as well as the interest and principal payable to the holder of that note) has the right to request redemption prior to stated maturity of all or part of his interest in the notes, and we will be obligated to redeem the same; however, during the period from the original issue date through and including August 31, 2002 (the "Initial Period"), and during any twelve-month period which ends on and includes each August 31 thereafter (each such twelve-month period being hereinafter referred to as a "Subsequent Period"), we will not be obligated to redeem: (i) with respect to the 15-year notes, (1) on behalf of a deceased beneficial owner, any interest in the 15-year notes that exceeds $25,000 principal amount, or (2) ownership interests in the 15-year notes exceeding $800,000 in aggregate principal amount for all representatives so requesting redemption; or (ii) with respect to the 30-year notes, (1) on behalf of a deceased beneficial owner, any interest in the 30-year notes that exceeds $25,000 principal amount, or (2) ownership interests in the 30-year notes exceeding $700,000 in aggregate principal amount for all representatives so requesting redemption. A representative of a deceased beneficial owner may initiate a request for redemption at any time and in any principal amount, provided that such principal amount is in integral multiples of $1,000. We may, at our option, redeem interests of any deceased beneficial owner in the notes in the Initial Period or any Subsequent Period in excess of the $25,000 limitation. Any such redemption, to the extent that it exceeds the $25,000 limitation for any deceased beneficial owner, shall not be included in the computation of the $800,000 aggregate limitation for the 15-year notes or the $700,000 aggregate limitation for the 30-year notes for 7 such Initial Period or such Subsequent Period, as the case may be, or for any succeeding Subsequent Period. We may, at our option, redeem interests of deceased beneficial owners in the notes in the Initial Period or any Subsequent Period in an aggregate principal amount exceeding the applicable aggregate limitation. Any such redemption, to the extent it exceeds the applicable aggregate limitation, shall not reduce the applicable aggregate limitation for any Subsequent Period. On any determination by us to redeem notes in excess of the $25,000 limitation or the applicable aggregate limitation, notes so redeemed shall be redeemed in the order of the receipt of redemption requests by the trustee. The representative of a deceased beneficial owner may initiate the request for redemption of an interest in the notes. The representative shall deliver a request to the participant (that is, an institution that has an account with the depository for the notes) through whom the deceased beneficial owner owned such interest, in form satisfactory to the participant, together with evidence of the death of the beneficial owner, evidence of the authority of the representative satisfactory to the participant, such waivers, notices or certificates as may be required under applicable state or federal law and such other evidence of the right to such redemption as the participant shall require. The request shall specify the principal amount of the interest in the notes to be redeemed, provided that this principal amount shall be in integral multiples of $1,000. The participant shall thereupon deliver to the depositary, who in this case initially will be DTC, a request for redemption substantially in the form attached as Appendix A hereto. The depositary will, on receipt of a redemption request, forward the same to the trustee. The trustee shall maintain records with respect to redemption requests received by it including date of receipt, the name of the participant filing the redemption request and the status of each such redemption request with respect to the $25,000 limitation and the applicable aggregate limitation. The trustee will immediately file each redemption request it receives, together with the information regarding the eligibility thereof with respect to the $25,000 limitation and the applicable aggregate limitation, with us. We, the depositary and the trustee may conclusively assume, without independent investigation, that the statements contained in each redemption request are true and correct and shall have no responsibility for reviewing any documents submitted to the participant by the representative or for determining whether the applicable decedent is in fact the beneficial owner of the interest in the notes to be redeemed or is in fact deceased and whether the representative is duly authorized to request redemption on behalf of the applicable beneficial owner. Subject to the $25,000 limitation and the applicable aggregate limitation, we will, after the death of any beneficial owner, redeem the interest of such beneficial owner in the notes within 60 days following receipt by us of a redemption request from the trustee. If redemption requests exceed the aggregate principal amount of interests in notes required to be redeemed during the Initial Period or during any Subsequent Period, then such excess redemption requests will be applied in the order received by the trustee to successive Subsequent Periods, regardless of the number of Subsequent Periods required to redeem such interests. We may at any time notify the trustee that we will redeem, on a date not less than 30 nor more than 60 days thereafter, all or any such lesser amount of notes for which redemption requests have been received but which are not then eligible for redemption by reason of the $25,000 limitation or the applicable aggregate limitation. Any notes so redeemed shall be redeemed in the order of receipt of redemption requests by the trustee. The price we will pay for the notes we redeem pursuant to a redemption request of a representative of a deceased beneficial owner will be 100% of the principal amount thereof plus accrued but unpaid interest to the date of payment. Subject to arrangements with the depositary, payment for interests in the notes that are to be redeemed shall be made to the depositary upon presentation of notes to the trustee for redemption in the aggregate principal amount specified in the redemption requests submitted to the trustee by the depositary that are to be fulfilled in connection with such payment. The principal amount of any notes acquired or redeemed by us other than by redemption at the option of any representative of a deceased beneficial owner pursuant to this section shall not be included in the computation of either the $25,000 limitation or the applicable aggregate limitation for the Initial Period or for any Subsequent Period. For purposes of this section, an interest in a note held in tenancy by the entirety, joint tenancy or by tenants in common will be deemed to be held by a single beneficial owner and the death of a tenant by the entirety, joint tenant or tenant in common will be deemed the death of a beneficial owner. The death of a person who, during his lifetime, was entitled to substantially all of the rights of a beneficial owner of an interest in the notes will be deemed the death of the beneficial owner, regardless of the recordation of such interest on the 8 records of the participant, if such rights can be established to the satisfaction of the participant. Such interests shall be deemed to exist in typical cases of nominee ownership, ownership under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, community property or other similar joint ownership arrangements, including individual retirement accounts or Keogh [H.R. 10] plans maintained solely by or for the decedent or by or for the decedent and any spouse, and trust and certain other arrangements where one person has substantially all of the rights of a beneficial owner during such person's lifetime. Any redemption request may be withdrawn by the person(s) presenting the same upon delivery of a written request for such withdrawal given by the participant on behalf of such person to the depositary and by the depositary to the trustee not less than 30 days prior to payment thereof by us. We may, at our option, purchase any notes for which redemption requests have been received in lieu of redeeming such notes. Any notes we purchase shall either be reoffered for sale and sold within 180 days after the date of purchase or presented to the trustee for redemption and cancellation. During such time or times as the notes are not represented by a global security and are issued in definitive form, all references in this section to participants and the depositary, including the depositary's governing rules, regulations and procedures shall be deemed deleted, all determinations which under this section the participants are required to make shall be made by us (including, without limitation, determining whether the applicable decedent is in fact the beneficial owner of the interest in the notes to be redeemed or is in fact deceased and whether the representative is duly authorized to request redemption on behalf of the applicable beneficial owner), all redemption requests, to be effective, shall be delivered by the representative to the trustee, with a copy to us, and shall be in the form of a redemption request (with appropriate changes to reflect the fact that such redemption request is being executed by a representative) and, in addition to all documents that are otherwise required to accompany a redemption request, shall be accompanied by the note that is the subject of such request. Payment, Transfer and Exchange As long as each series of notes is registered in the name of DTC or its nominee, we will pay any principal and interest due on the notes to DTC, either directly or through the trustee or other paying agent. DTC will then make payment to its participants for disbursement to the beneficial owners of the notes as described under "--Book-Entry-Only Issuance - The Depository Trust Company." The transfer of the notes may be registered, and the notes may be exchanged for other debt securities of authorized denominations and of like tenor and aggregate principal amount at the office of the trustee designated for such purpose or at any paying agency we maintain for such purpose. We may appoint one or more additional security registrars or transfer agents and may remove any security registrar or transfer agent, all in our discretion. No service charge will be made for any registration of transfer or exchange of the notes, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer or exchange. We will not be required (a) to issue, register the transfer of or exchange notes during the period of 15 days prior to giving any notice of redemption or (b) to issue, register the transfer of or exchange any note selected for redemption in whole or in part, except the unredeemed portion of any note being redeemed in part. All payments made by us to the trustee or any paying agent for the payment of principal of, and premium, if any, and any interest on any notes that remain unclaimed at the end of two years after such principal, premium or interest shall become due and payable will be repaid, subject to applicable laws of escheat, to us, and the holder of those notes will thereafter look only to us for payment of such funds. Partial Redemption and Notice of Redemption If less than all of the notes of either series are to be redeemed, the particular notes to be redeemed will be selected by the trustee or other security registrar by such method as it deems fair and appropriate. Any notice of optional redemption may state that such redemption shall be conditional upon the receipt by the trustee, on or 9 prior to the date fixed for such redemption, of money sufficient to pay the principal of and premium and interest, if any, on the notes to be redeemed and that if such money has not been so received, such notice will be of no force or effect and we will not be required to redeem those notes. Events of Default The following constitute events of default with respect to the notes of either series: . default in the payment of any interest on any note of that series when due and continuing for 30 days; . default in the payment of principal of (or premium, if any, on) any note of that series when due and continuing for three business days; . default in the performance or breach of any of our covenants or warranties in the indenture relating to the notes of that series continuing for 90 days after written notice by the trustee to us or by the holders of at least 25% in principal amount of all outstanding notes of that series to us and the trustee as provided in the indenture; . default in the observance of certain operating covenants under our insurance agreement with Ambac Assurance; . certain events involving our bankruptcy, insolvency, conservatorship, receivership or reorganization, whether voluntary or involuntary; or . default in the payment of principal of, or premium, if any, or interest on (after any applicable period of grace), or acceleration of, indebtedness evidenced by any other series of debt securities issued under the indenture, including the other series of notes, or any other mortgage, indenture or instrument, or other evidence of indebtedness of Alabama Gas for borrowed money, in an aggregate amount exceeding $10,000,000, which default is not rescinded, or indebtedness not discharged, within ten (10) days after written notice to us as provided in the indenture. Except as described above, an event of default with respect to the debt securities of one series issued under the indenture, including either series of notes, does not necessarily constitute an event of default with respect to the debt securities of any other series issued under the indenture. If any event of default with respect to either series of notes occurs and is continuing, either the trustee or the holders of at least 33% in aggregate principal amount of all the outstanding notes of that series may declare the principal amount of all outstanding notes of that series to be due and payable immediately; provided, however, that if an event of default occurs and is continuing with respect to more than one series of debt securities issued under the indenture, including either series of notes, the trustee or the holders of not less than 33% in aggregate principal amount of the outstanding debt securities of all those series, considered as one class, may declare acceleration and not the holders of debt securities of any one series. The holders of a majority in aggregate principal amount of the outstanding notes of each series may, on behalf of all holders of the notes of that series, waive any past default and its consequences under the indenture with respect to the notes of that series, except a default in the payment of principal or premium or interest, if any, or in respect of a covenant or provision of the indenture that cannot be amended or modified without the consent of the holder of each outstanding note of the series affected. Remedies At any time after the declaration of acceleration with respect to the notes of either series, but before a judgment or decree based on acceleration has been obtained, the following acts or events shall waive the event or 10 events of default giving rise to a declaration of acceleration and rescind and annul the declaration and its consequences: . we have paid or deposited with the trustee a sum sufficient to pay: . all overdue interest on all notes of that series; . the principal of and premium, if any, on any notes of that series that have become due other than due to the declaration of acceleration and interest thereon at the rate or rates provided for in such notes; . to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates provided for in such notes; and . all amounts due to the trustee under the indenture; and . any other events of default with respect to the notes of that series, other than the failure to pay the principal of the notes of that series that has become due solely by such declaration of acceleration, have been cured or waived as provided in the indenture. The indenture provides that, subject to the duty of the trustee during the continuance of an event of default to act with the required standard of care, the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders, unless such holders shall have offered to the trustee reasonable security or indemnity. Subject to such provisions for the indemnification of the trustee and subject to certain other limitations, the holders of a majority in aggregate principal amount of the outstanding notes of either series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the notes of that series; provided, however, that if an event of default occurs and is continuing with respect to more than one series of debt securities, including either series of notes, the holders of a majority in aggregate principal amount of the outstanding debt securities of all those series, considered as one class, will have the right to make such direction, and not the holders of the debt securities of any one series. Any direction provided by the holders shall not be in conflict with any rule of law or with the indenture and will not involve the trustee in personal liability in circumstances where reasonable indemnity would not, in the trustee's sole discretion, be adequate and the trustee may take any other action it deems proper that is not inconsistent with such direction. The right of a holder of any note of either series to institute a proceeding with respect to the indenture is subject to meeting certain prior conditions, but each holder has an absolute right to receive payment of principal and premium and interest, if any, when due and to institute suit for the enforcement of payment. The indenture provides that the trustee, within 90 days after the occurrence of any default thereunder with respect to the notes of either series, is required to give the holders of notes of that series notice of any known default, unless the default is cured or waived; provided, however, that, except in the case of a default in the payment of principal of, or premium or interest, if any, on, any notes of that series, the trustee may withhold such notice if the trustee determines that it is in the interest of such holders to do so; and, provided, further, that in the case of default in the performance or breach of any of our covenants or warranties in the indenture, no such notice shall be given to such holders until at least 75 days after the occurrence of the default or breach. We are required to furnish to the trustee annually a statement regarding our performance of certain of our obligations under the indenture and as to any default in such performance. We are also required to notify the trustee of any event of default within 10 days after certain of our officers obtain actual knowledge of such default. Modification, Amendment and Waiver The indenture may be modified and amended by us and the trustee without the consent of the holders of 11 the notes of either series under certain circumstances, which include modifications and amendments: . evidencing the assumption by any successor to us of our obligations under the indenture or with respect to the debt securities under the indenture; . adding to our covenants or surrendering any of our rights under the indenture; . adding any events of default, in addition to those specified in the indenture, with respect to all or any series of outstanding debt securities under the indenture; . changing or eliminating any provision of the indenture or adding any new provision to the indenture; provided, however, that if such change, elimination or addition will adversely affect the interests of holders of debt securities of any series under the indenture in any material respect, such change, elimination or addition will become effective with respect to that series only when there is no debt security of that series remaining outstanding under the indenture; . providing collateral security for the debt securities under the indenture; . establishing the form or terms of debt securities of any series under the indenture; . evidencing the appointment of a successor trustee and adding to or changing any of the provisions of the indenture as necessary to provide for or to facilitate the administration of the trusts under the indenture by more than one trustee; . providing for the procedures required to permit the utilization of a noncertificated system of registration for all or any series of debt securities under the indenture; . subject to certain conditions, changing the place where debt securities under the indenture may be transferred, exchanged or paid; or . curing any ambiguity or inconsistency or making any other provisions with respect to matters and questions arising under the indenture, provided such provisions do not adversely affect the interests of the holders of debt securities of any series under the indenture in any material respect. Without limiting the generality of the foregoing, if the Trust Indenture Act of 1939 is amended to require changes to the indenture or the incorporation of additional provisions or permit changes to, or the elimination of, provisions that are required by the Trust Indenture Act to be contained in the indenture, we and the trustee may, without the consent of any holders of the notes, enter into one or more supplemental indentures to effect or reflect any such change, incorporation or elimination. We and the trustee may make modifications and amendments to the indenture with the consent of the holders of not less than a majority in principal amount of the outstanding notes of each series affected by such modification or amendment voting separately; provided, however, that no such modification or amendment may, without the consent of the holder of each outstanding note affected thereby: . change the maturity of the principal of, or any installment of principal or interest on, any note; . reduce the principal amount of any note or the rate of interest or any premium payable upon redemption of any note; . change the place of payment or the coin or currency in which any note or any premium or interest thereon is payable; 12 . impair the right to institute suit for the enforcement of payments on any note; . reduce the percentage in principal amount of outstanding notes of either series, the consent of whose holders is required for modification or amendment of the indenture or for waiver of compliance with certain provisions of the indenture or for waiver of certain defaults; . reduce the requirements for quorum or voting; or . modify the provisions of the indenture relating to the modification of the indenture, or the circumstances under which the holders of the notes may waive our past defaults and certain of our covenants. The holders of a majority in aggregate principal amount of the outstanding notes of either series may, on behalf of all holders of notes of that series, waive our compliance with certain covenants of the indenture relating to that series. Consolidation, Merger and Sale of Assets We may not consolidate with or merge into any other corporation or convey, transfer or lease our properties and assets substantially as an entirety to any person without the consent of the holders of any outstanding debt securities under the indenture, including either series of notes, unless: (i) the continuing or successor corporation is organized under the laws of the United States, any state thereof or the District of Columbia, and expressly assumes by means of a supplemental indenture the due and punctual payment of the principal (and premium, if any) and interest on all the outstanding debt securities issued under the indenture and the performance of all of our covenants under the indenture; (ii) upon the occurrence of such a transaction, treating any indebtedness for borrowed money which becomes our obligation as a result of such transaction as having been incurred by us at the time of such transaction, no event of default under the indenture, and no event which, after notice or lapse of time, or both, would become an event of default, shall happen or be continuing; and (iii) we or any continuing or successor corporation delivers to the trustee an officers' certificate and an opinion of counsel stating that the consolidation, merger, conveyance, transfer or lease and the supplemental indenture complies with the indenture and all conditions in the indenture required to be satisfied prior to such transaction have been complied with. Limitations on Liens We will not create, assume, incur or suffer to exist any mortgage, lien, pledge, charge or encumbrance of any kind, other than Permitted Liens (as defined below), upon our property (other than property we use in the ordinary course of our business, including but not limited to current assets, vehicles, certain inventories and equipment) to secure indebtedness without effectively providing that the notes shall be secured equally and ratably with the indebtedness secured by such mortgage, lien, pledge, charge or encumbrance. However, these restrictions on liens shall not apply to: . the pledge of any of our assets as security for payment of taxes or other similar charges in connection with our good faith contest as to our liability for such payment; . the pledge of any of our assets to secure a stay or discharge in connection with a legal proceeding in which we are a party; . making deposits or providing security in connection with tenders, redemptions, contracts or leases to which we are a party or deposits for the purpose of terminating obligations under an indenture; . pledging of assets in connection with the incurrence of indebtedness in aggregate principal amount not exceeding 5% of our net tangible assets; 13 . liens, pledges, security interests or other encumbrances on property, stock or indebtedness of any corporation existing at the time such corporation becomes our subsidiary or is merged into us, or existing at the time of our acquisition of such property or stock, whether directly or through a subsidiary; . incurring liens, licenses, pledges, security interests or other encumbrances to secure payment of all or a part of the price of acquisition, construction or improvement of property or stock acquired by us or our subsidiary or to secure any indebtedness we incur prior to, at the time of, or within 180 days after the later of the acquisition or completion of construction where the secured debt is incurred for the purpose of financing all or any part of the purchase price of such property or construction or improvements thereon; . liens, pledges, security interests or other encumbrances on our property or the property of any subsidiary created in favor of a government or any political subdivision or instrumentality thereof, to secure partial progress, installment, advance or other payments pursuant to any contract or statute or to secure any indebtedness or other obligation incurred for the purpose of financing all or any part of the purchase price or the cost of construction of property subject to the encumbrance; or . any extension, renewal or replacement of any lien or encumbrance referred to above, provided that the principal amount of the indebtedness secured thereby is not increased and the lien or security interest securing the indebtedness is not extended to cover additional property. Permitted Liens shall include the following: . liens for taxes, assessments or governmental charges not delinquent; . liens securing indebtedness existing in or relating to real estate acquired for right-of-way purposes; . easements or reservations in our property by statute or ordinance; . liens or charges incidental to current construction activities; . obligations or duties created or imposed by municipalities or other public authority affecting our property; . rights reserved to or vested in any municipality or public authority to control or regulate us or the use of our property; . irregularities or deficiencies of title with respect to rights- of-way; and . leases made or existing in the ordinary course of our business. Other than the restrictions on the issuance of secured debt described above, there are no provisions of the indenture that afford holders of the notes protection in the event of a highly leveraged or similar transaction involving us. Satisfaction and Discharge We may terminate certain of our obligations under the indenture with respect to the notes of either series on the terms and subject to the conditions contained in the indenture (including an opinion of tax counsel that, based upon a change in federal income tax law after the date of issuance of the notes or a ruling of the Internal 14 Revenue Service, (i) the discharge of our obligations with respect to the notes of that series will not result in the recognition of income, gain or loss for federal income tax purposes and (ii) the holders of the notes of that series will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case but for the discharge), by depositing in trust with the trustee cash or certain other forms of payment as described further in the indenture (or a combination thereof) sufficient to pay the principal of and premium and interest, if any, due and to become due on the notes of that series on or prior to their maturity or redemption date in accordance with the terms of the indenture and those notes. The indenture, with respect to any and all series of debt securities (except for certain specified surviving obligations), including both series of notes, will be discharged and canceled upon the satisfaction of certain conditions, including: (a) that all debt securities issued under the indenture shall have been canceled by the trustee or, to the extent not so canceled, deemed to have been paid under the indenture; (b) our payment of all other sums required under the indenture; and (c) our delivery of a certificate to the trustee stating that we have complied with all conditions precedent relating to the satisfaction and discharge of the indenture. Special Insurance Provisions Notwithstanding any other provision of the indenture, so long as Ambac Assurance is not in default under the insurance policy, Ambac Assurance shall be entitled to control and direct the enforcement of all rights and remedies with respect to the related series of notes, except for the rights provided under "Redemption by Us Upon Death of a Beneficial Owner". No provision of the indenture expressly recognizing or granting rights in or to Ambac Assurance may be amended in any manner that materially affects the rights of Ambac Assurance without the prior written consent of Ambac Assurance. In addition, in any instance in which the consent of all or a certain percentage of the holders of a series of notes is required under the indenture, Ambac Assurance's consent will be required in addition to any such required holders' consent, so long as Ambac Assurance is not in default under the insurance policy. Book-Entry-Only Issuance - The Depository Trust Company DTC will act as the initial securities depositary for the notes. Each series of notes will be issued only as fully registered securities registered in the name of Cede & Co., DTC's nominee. One fully registered global note will be issued for each series, representing in the aggregate the total principal amount of notes of such series, and will be deposited with DTC or its custodian. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its direct participants deposit with DTC. DTC also facilitates the settlement among direct participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in direct participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is owned by a number of its direct participants and by The New York Stock Exchange, the American Stock Exchange and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to indirect participants such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. The rules applicable to DTC and its direct and indirect participants are on file with the SEC. Purchases of notes within the DTC system must be made by or through direct participants, which will receive a credit for the notes on DTC's records. The ownership interest of each actual purchaser of notes, or beneficial owner, is in turn to be recorded on the direct and indirect participants' records. Beneficial owners will not receive written confirmation from DTC of their purchases, but beneficial owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the direct or indirect participants through which the beneficial owners purchased notes. Transfers of ownership interests in the notes are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in notes, 15 except in the event that use of the book-entry system for the notes is discontinued or we determine that beneficial owners may exchange their ownership interests for such certificates. DTC will have no knowledge of the actual beneficial owners of the notes. DTC's records reflect only the identity of the direct participants to whose accounts such notes are credited, which may or may not be the beneficial owners. The participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants and by direct participants and indirect participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices will be sent to DTC. If less than all of either series of notes are being redeemed, DTC will reduce the amount of the interest of each direct participant in such series of notes in accordance with its procedures. Although voting with respect to the notes is limited, in those cases where a vote is required, neither DTC nor Cede & Co. will itself consent or vote with respect to notes. Under its usual procedures, DTC would mail an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those direct participants to whose accounts the notes are credited on the record date (identified in a listing attached to the omnibus proxy). Payments on the notes will be made to DTC. DTC's practice is to credit direct participants' accounts on the relevant payment date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payments on such payment date. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the account of customers registered in "street name", and will be the responsibility of such participant and not of DTC or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment to DTC is our responsibility, disbursements of such payments to direct participants is the responsibility of DTC and disbursements of such payments to the beneficial owners is the responsibility of direct participants and indirect participants. Except as provided herein, a beneficial owner of an interest in a global note will not be entitled to receive physical delivery of notes. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the notes. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of securities in definitive form. Such laws may impair the ability to transfer beneficial interests in a global note. DTC may discontinue providing its services as security depositary with respect to the notes at any time by giving reasonable notice to us. Under such circumstances, in the event that a successor securities depositary is not obtained, note certificates will be printed and delivered to the holders of record. Additionally, we may decide to discontinue use of the system of book- entry transfers through DTC (or a successor depositary) with respect to the notes. In that event, certificates for the notes will be printed and delivered to the holders of record. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that we believe to be reliable, but neither we, the underwriters nor the trustee take any responsibility for the accuracy thereof. We have no responsibility for the performance by DTC or its participants of their respective obligations as described herein or under the rules and procedures governing their respective operations. THE INSURANCE POLICY AND THE INSURER The information set forth in this section has been provided by Ambac Assurance Corporation. Neither we nor the underwriters make any representation as to the accuracy or completeness of any such information. 16 The Insurance Policy We will enter into an insurance agreement with Ambac Assurance, pursuant to which Ambac Assurance will issue a financial guaranty insurance policy relating to the 15-year notes and the 30-year notes, the form of which policy is attached to this prospectus as Appendix B. The following summary of the terms of the insurance policy does not purport to be complete and is qualified in its entirety by reference to the insurance policy. Ambac Assurance has made a commitment to issue the insurance policy effective as of the date of issuance of the notes. Under the terms of the insurance policy, Ambac Assurance will pay to The Bank of New York in New York, New York, or any successor thereto, as insurance trustee, that portion of the principal of and interest on the applicable series of notes which shall become Due for Payment but shall be unpaid by reason of Nonpayment (as such terms are defined in the insurance policy) by us. Ambac Assurance will make such payments to The Bank of New York on the later of the date on which such principal and interest becomes Due for Payment or within one business day following the date on which Ambac Assurance shall have received notice of Nonpayment from the trustee for the notes. Under the insurance policy, the definition of "Due for Payment" will include the redemption date in connection with the mandatory redemption of notes at the option of the representative of a deceased beneficial owner of notes upon the death of that owner, subject to certain individual and aggregate annual principal amount limitations referred to under "Description of the Notes -- Redemption By Us Upon Death of a Beneficial Owner". The insurance policy will extend for the term of each series of notes and, once issued, cannot be canceled by Ambac Assurance. The insurance policy will insure payment only on the stated maturity date or on a redemption date in connection with the mandatory redemption of notes at the option of the representative of a deceased beneficial owner of notes upon the death of that owner, in the case of principal, and on interest payment dates relating to the notes in the case of interest. If the applicable series of notes becomes subject to mandatory redemption (other than redemption in connection with the death of a beneficial owner of notes) and insufficient funds are available for redemption of all outstanding notes in that series, Ambac Assurance will remain obligated to pay principal of and interest on outstanding notes on the originally scheduled interest and principal payment dates. In the event of any acceleration of the principal of the notes, the insured payments will be made at such times and in such amounts as would have been made had there not been an acceleration. In the event the trustee for the notes has notice that any payment of principal of or interest on a note which has become Due for Payment and which is made to a holder by or on our behalf has been deemed a preferential transfer and theretofore recovered from its holder pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court of competent jurisdiction, that holder will be entitled to payment from Ambac Assurance to the extent of such recovery if sufficient funds are not otherwise available from us. The insurance policy does not insure any risk other than Nonpayment, as defined in the insurance policy. Specifically, the insurance policy does not cover: 1. payment on acceleration of the notes, as a result of a call for redemption (other than redemption in connection with the death of a beneficial owner of notes) or as a result of any other advancement of maturity, 2. payment of any redemption or prepayment of the notes (other than redemption in connection with the death of a beneficial owner of notes), and 3. nonpayment of principal of or interest on the notes caused by the insolvency or negligence of the trustee for the notes. If it becomes necessary to call upon the insurance policy, payment of principal requires surrender of the related notes to The Bank of New York together with an appropriate instrument of assignment so as to permit ownership of those notes to be registered in the name of Ambac Assurance to the extent of the payment under the insurance policy. Payment of interest pursuant to the insurance policy requires proof of holder entitlement to 17 interest payments and an appropriate assignment of the holder's right to Ambac Assurance. Upon payment of the insurance benefits in respect of any notes and to the extent Ambac Assurance makes payments of principal of or interest on the notes, Ambac Assurance will become the owner of the related notes or the right to payment of principal of or interest on such notes and will be fully subrogated to each surrendering holder's rights to payment. Ambac Assurance Corporation Ambac Assurance is a Wisconsin-domiciled stock insurance corporation regulated by the Office of the Commissioner of Insurance of the State of Wisconsin and licensed to do business in 50 states, the District of Columbia, the Territory of Guam and the Commonwealth of Puerto Rico, with admitted assets of approximately $4,830,000,000 (unaudited) and statutory capital of approximately $2,870,000,000 (unaudited) as of June 30, 2001. Statutory capital consists of Ambac Assurance policyholders' surplus and statutory contingency reserve. Standard & Poor's Credit & Market Services, a Division of The McGraw- Hill Companies, Moody's Investors Service, Inc. and Fitch IBCA have each assigned a triple-A financial strength rating to Ambac Assurance. Ambac Assurance has obtained a ruling from the Internal Revenue Service to the effect that the insuring of an obligation by Ambac Assurance will not affect the treatment for federal income tax purposes of interest on such obligation and that insurance proceeds representing maturing interest paid by Ambac Assurance under policy provisions substantially identical to those contained in the insurance policy shall be treated for federal income tax purposes in the same manner as if we made such payments on the notes. Ambac Assurance makes no representation regarding the notes or the advisability of investing in the notes and makes no representation regarding, nor has it participated in the preparation of, this prospectus other than the information supplied by Ambac Assurance and presented under the heading "The Insurance Policy and the Insurer" and in the financial statements incorporated in this prospectus by reference. Available Information. The parent company of Ambac Assurance, Ambac Financial Group, Inc., is subject to the informational requirements of the Securities Exchange Act of 1934 and in accordance therewith files reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information may be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 and at regional SEC offices at 7 World Trade Center, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be obtained from the public reference section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the aforementioned material may also be inspected at the offices of The New York Stock Exchange, Inc. at 20 Broad Street, New York, New York 10005. Ambac Financial's common stock is listed on The New York Stock Exchange. Copies of Ambac Assurance's financial statements prepared in accordance with accounting practices prescribed or permitted by the Insurance Department of the State of Wisconsin are available from Ambac Assurance. The address of Ambac Assurance's administrative offices and its telephone number are One State Street Plaza, 15th Floor, New York, New York 10004 and (212) 668-0340. Incorporation of Certain Documents by Reference. The following documents filed by Ambac Financial with the SEC (File No. 001-10777) are incorporated by reference in this prospectus: . Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2001 (to the extent containing Ambac Assurance's consolidated unaudited financial statements as of June 30, 2001 and for the periods ended June 30, 2001 and 2000); . Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2001 (to the extent containing Ambac Assurance's consolidated unaudited financial statements as of March 31, 2001 and for the periods ended March 31, 2001 and 2000); and 18 . Annual Report on Form 10-K filed on March 28, 2001 (to the extent containing Ambac Assurance's consolidated financial statements as of December 31, 2000 and 1999 and for the three years ended December 31, 2000). All documents subsequently filed by Ambac Financial pursuant to the requirements of the 1934 Act after the date of this prospectus will be available for inspection in the same manner as described in "--Available Information" above. RATINGS We expect that S&P and Moody's will assign each series of notes triple-A ratings conditioned upon the issuance and delivery by Ambac Assurance at the time of delivery of the notes of the insurance policy, insuring the timely payment of the principal of and interest on the notes. The ratings reflect only the views of those rating agencies, and an explanation of the significance of the ratings may be obtained only from the rating agencies at the following addresses: Standard & Poor's, 55 Water Street, New York, New York 10041 and Moody's Investors Service, 99 Church Street, New York, New York 10007. We cannot assure you that the ratings will, in fact, be assigned or remain in effect for any period of time or that they will not be revised downward or withdrawn entirely by the rating agencies if, in their judgment, circumstances warrant. Neither we nor the underwriters have undertaken any responsibility to oppose any proposed downward revision or withdrawal of a rating on the notes. Any such downward revision or withdrawal of such ratings would likely have an adverse effect on any trading market for and the market price of the notes. At present, each of the rating agencies maintains four categories of investment grade ratings. For S&P, these categories are AAA, AA, A and BBB, and for Moody's, these categories are Aaa, Aa, A and Baa. S&P defines "AAA" as the highest rating assigned to a debt obligation. Moody's defines "Aaa" as representing the best quality debt obligation carrying the smallest degree of investment risk. UNDERWRITING Under the terms and conditions set forth in the underwriting agreement dated the date of this prospectus, we have agreed to sell to each of the underwriters named below, and each of the underwriters has severally agreed to purchase, the principal amount of the notes set forth opposite its name below:
Principal amount Principal amount Underwriter of 15-year notes of 30-year notes ----------- ---------------- ---------------- A.G. Edwards & Sons, Inc.... $ $ Edward D. Jones & Co., L.P.. ----------- ----------- Total.................. $40,000,000 $35,000,000 =========== ===========
Under the terms and conditions of the underwriting agreement, the underwriters have agreed to take and pay for all the notes, if any notes are taken. The underwriters have advised us that they propose to offer the notes to the public initially at the applicable public offering prices set forth on the cover of this prospectus and to certain dealers at those prices, less a concession of % of the principal amount of the 15-year notes, in the case of the 15-year notes, and % of the principal amount of the 30-year notes, in the case of the 30-year notes. The underwriters may allow, and such dealers may reallow to certain brokers and dealers, a concession not to exceed % of the principal amount of the 15-year notes, in the case of the 15-year notes, and a concession not to exceed % of the principal amount of the 30-year notes, in the case of the 30-year notes. After the initial public offering of the particular series of notes, the public offering prices and concessions may be changed. 19 Prior to this offering, there has been no public market for either series of notes. The underwriters have advised us that they intend to make a market in the notes. The underwriters will have no obligation to make a market in the notes, however, and may cease market-making activities, if commenced, at any time. The notes will not be listed on any securities exchange. We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect thereof. In connection with the offering, the underwriters are permitted to engage in certain transactions that stabilize the prices of the 15-year notes or the 30-year notes, as applicable. Such transactions consist of bids or purchases for the purpose of pegging, fixing or maintaining the prices of the 15-year notes or the 30-year notes, as applicable. If the underwriters create a short position in the 15-year notes or the 30-year notes, as applicable, in connection with the offering, i.e., if they sell a greater aggregate principal amount of those notes than is set forth on the cover of this prospectus, the underwriters may reduce that short position by purchasing notes of the same series in the open market. In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security to be higher than it might be in the absence of such purchases. Neither we nor the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the prices of the notes. In addition, neither we nor any underwriter makes any representation that the underwriters will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice. We estimate that we will incur offering expenses of approximately $2,019,250, which includes the premium for the insurance policy. Each underwriter has engaged, and in the future may engage, in investment banking transactions with, and the provision of services to, us and our affiliates in the ordinary course of business. LEGAL MATTERS The validity of the notes will be passed upon for us by Bradley Arant Rose & White LLP, Birmingham, Alabama, and for the underwriters by Pillsbury Winthrop LLP, New York, New York. As of August 1, 2001, the partners and associates of Bradley Arant Rose & White LLP beneficially own approximately 5,000 shares of the outstanding common stock of Energen, our parent company. EXPERTS The financial statements of Alabama Gas Corporation incorporated in this prospectus by reference to the Annual Report on Form 10-K for the year ended September 30, 2000 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. The consolidated financial statements of Ambac Assurance Corporation and subsidiaries as of December 31, 2000 and 1999 and for each of the years in the three-year period ending December 31, 2000 are incorporated by reference in this prospectus in reliance on the report of KPMG LLP, independent certified public accountants, incorporated by reference in this prospectus, and upon the authority of that firm as experts in accounting and auditing. 20 Appendix A -- Form of Redemption Request ALABAMA GAS CORPORATION [ / %] Notes due [September 1, 2016/September 1, 2031] (the "Notes") CUSIP NO. [_____/_____] The undersigned, ____________________ (the "Participant"), does hereby certify, pursuant to the provisions of that certain Indenture dated as of November 1, 1993 (the "Indenture") between Alabama Gas Corporation (the "Issuer") and The Bank of New York, as trustee (the "Trustee"), to The Depository Trust Company (the "Depositary"), to the Issuer and the Trustee that: 1. [Name of deceased Beneficial Owner] is deceased. 2. [Name of deceased Beneficial Owner] had a $__________ interest in the above referenced Notes. 3. [Name of Representative] is [Beneficial Owner's personal representative/other person authorized to represent the estate of the Beneficial Owner/surviving joint tenant/surviving tenant by the entirety/trustee of a trust] of [Name of deceased Beneficial Owner] and has delivered to the undersigned a request for redemption in form satisfactory to the undersigned, requesting that $__________ principal amount of said Notes be redeemed pursuant to said Indenture. The documents accompanying such request, all of which are in proper form, are in all respects satisfactory to the undersigned and the [Name of Representative] is entitled to have the Notes to which this redemption request relates redeemed. 4. The Participant holds the interest in the Notes with respect to which this redemption request is being made on behalf of [Name of deceased Beneficial Owner]. 5. The Participant hereby certifies that it will indemnify and hold harmless the Depositary, the Trustee and the Issuer (including their respective officers, directors, agents, attorneys and employees), against all damages, loss, cost, expense (including reasonable attorneys' and accountants' fees), obligations, claims or liability incurred by the indemnified party or parties as a result of or in connection with the redemption of Notes to which this redemption request relates. The Participant will, at the request of the Issuer, forward to the Issuer a copy of the documents submitted by [Name of Representative] in support of the request for redemption. IN WITNESS WHEREOF, the undersigned has executed this redemption request as of ____________, _____. [PARTICIPANT NAME] By: ---------------------------------------- Name: -------------------------------------- Title: ------------------------------------- A-1
Appendix B -- Specimen Insurance Policy [LETTERHEAD OF AMBAC] Financial Guaranty Insurance Policy Obligor: Policy Number: Obligations: Premium: [SPECIMEN] Ambac Assurance Corporation (Ambac), a Wisconsin stock insurance corporation, in consideration of the payment of the premium and subject to the terms of this Policy, hereby agrees to pay to The Bank of New York, as trustee, or its successor (the "Insurance Trustee"), for the benefit of the Holders, that portion of the principal of and interest on the above-described obligations (the "Obligations") which shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Obligor. Ambac will make such payments to the Insurance Trustee within one (1) business day following written notification to Ambac of Nonpayment. Upon a Holder's presentation and surrender to the Insurance Trustee of such unpaid Obligations or related coupons, uncanceled and in bearer form and free of any adverse claim, the Insurance Trustee will disburse to the Holder the amount of principal and interest which is then Due for Payment but is unpaid. Upon such disbursement, Ambac shall become the owner of the surrendered Obligations and/or coupons and shall be fully subrogated to all of the Holder's rights to payment thereon. In cases where the Obligations are issued in registered form, the Insurance Trustee shall disburse principal to a Holder only upon presentation and surrender to the Insurance Trustee of the unpaid Obligation, uncanceled and free of any adverse claim, together with an instrument of assignment, in form satisfactory to Ambac and the Insurance Trustee duly executed by the Holder or such Holder's duly authorized representative, so as to permit ownership of such Obligation to be registered in the name of Ambac or its nominee. The Insurance Trustee shall disburse interest to a Holder of a registered Obligation only upon presentation to the Insurance Trustee of proof that the claimant is the person entitled to the payment of interest on the Obligation and delivery to the Insurance Trustee of an instrument of assignment, in form satisfactory to Ambac and the Insurance Trustee, duly executed by the Holder or such Holder's duly authorized representative, transferring to Ambac all rights under such Obligation to receive the interest in respect of which the insurance disbursement was made. Ambac shall be subrogated to all of the Holders' rights to payment on registered Obligations to the extent of any insurance disbursements so made. In the event that a trustee or paying agent for the Obligations has notice that any payment of principal of or interest on an Obligation which has become Due for Payment and which is made to a Holder by or on behalf of the Obligor has been deemed a preferential transfer and theretofore recovered from the Holder pursuant to the United States Bankruptcy Code in accordance with a final, nonappealable order of a court of competent jurisdiction, such Holder will be entitled to payment from Ambac to the extent of such recovery if sufficient funds are not otherwise available. As used herein, the term "Holder" means any person other than (i) the Obligor or (ii) any person whose obligations constitute the underlying security or source of payment for the Obligations who, at the time of Nonpayment, is the owner of an Obligation or of a coupon relating to an Obligation. As used herein, "Due for Payment", when referring to the principal of Obligations, is when the scheduled maturity date or mandatory redemption date for the application of a required sinking fund installment has been reached and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by application of required sinking fund installments), acceleration or other advancement of maturity; and, when referring to interest on the Obligations, is when the scheduled date for payment of interest has been reached. As used herein, "Nonpayment" means the failure of the Obligor to have provided sufficient funds to the trustee or paying agent for payment in full of all principal of and interest on the Obligations which are Due for Payment. This Policy is noncancelable. The premium on this Policy is not refundable for any reason, including payment of the Obligations prior to maturity. This Policy does not insure against loss of any prepayment or other acceleration payment which at any time may become due in respect of any Obligation, other than at the sole option of Ambac, nor against any risk other than Nonpayment. In witness whereof, Ambac has caused this Policy to be affixed with a facsimile of its corporate seal and to be signed by its duly authorized officers in facsimile to become effective as its original seal and signatures and binding upon Ambac by virtue of the countersignature of its duly authorized representative. /s/ Robert J. Genader /s/ Anne G. Gill - -------------------------------- --------------------------------- President [Seal] Secretary Effective Date: Authorized Representative THE BANK OF NEW YORK acknowledges that it has agreed /s/ Noraida Lauro to perform the duties of Insurance Trustee under this Policy. --------------------------------- Form No.: 2B-0012 (1/01) Authorized Officer of Insurance Trustee B-1
[SPECIMEN] Ambac Ambac Assurance Corporation c/o CT Corporation Systems 44 East Mifflin Street, Madison, Wisconsin 53703 Administrative Office: Endorsement: One State Street Plaza, New York, New York 10004 Telephone: (212) 668-0340 Policy for: Attached to and forming part of Policy No.: Effective Date of Endorsement: Notwithstanding the terms and provisions contained in this Policy, it is further understood that the term "Due for Payment" shall also mean, when referring to the principal of and interest on an Obligation, any date on which the Obligations shall be subject to mandatory redemption pursuant to Section of the Officers' Certificate dated , 2001 relating to the Indenture dated as of November 1, 1993 relating to the Obligations. Nothing herein contained shall be held to vary, alter, waive or extend any of the terms, conditions, provisions, agreements or limitations of the above mentioned Policy other than as above stated. In Witness Whereof, Ambac has caused this Endorsement to be affixed with a facsimile of its corporate seal and to be signed by its duly authorized officers in facsimile to become effective as its original seal and signatures and binding upon Ambac by virtue of the countersignature of its duly authorized representative. Ambac Assurance Corporation /s/ Robert J. Genader [SEAL] /s/ Anne G. Gill President Secretary Authorized Representative Form No.: 2B-0027 (4/94) B-2 ================================================================================ You should rely only on the information contained or incorporated by reference in this prospectus. No one has been authorized to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell the notes in any jurisdiction where the offer to sell the notes is not permitted. You should assume that the information appearing in this prospectus, as well as information we previously filed with the Securities and Exchange Commission that is incorporated in this prospectus by reference, is accurate only as of the date of those documents. Our business, financial condition, results of operations and prospects may have changed since those dates. -------------------- TABLE OF CONTENTS Page ---- Prospectus Summary......................... 1 Where You Can Find More Information........ 5 Forward-Looking Statements................. 5 Use of Proceeds............................ 5 Description of the Notes................... 6 The Insurance Policy and the Insurer....... 16 Ratings.................................... 19 Underwriting............................... 19 Legal Matters.............................. 20 Experts.................................... 20 Appendix A -- Form of Redemption Request... A-1 Appendix B -- Specimen Insurance Policy.... B-1 ================================================================================ ================================================================================ ALABAMA GAS CORPORATION $40,000,000 % Notes due September 1, 2016 $35,000,000 % Notes due September 1, 2031 ----------------- [INSERT ALABAMA GAS LOGO] A.G. Edwards & Sons, Inc. Edward D. Jones & Co., L.P. ================================================================================ PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. Filing fee - Securities and Exchange Commission.......... $ 18,750 * Fees of trustee, including counsel and authentication fee 7,500 * Legal fees and expenses.................................. 100,000 * Accounting fees and expenses............................. 7,500 * Blue sky fees and expenses............................... 7,500 * Rating agency's fees..................................... 60,000 Insurance policy premium................................. 1,773,000 * Printing and engraving expenses.......................... 15,000 * Miscellaneous............................................ 30,000 ---------- * Total.................................................. $2,019,250 ========== - ------------ * Estimated. Item 15. Indemnification of Directors and Officers. (a) Sections 6 and 7 of Article II of the Bylaws of the registrant provide as follows: Each Director and officer, whether or not then in office, shall be indemnified by the Corporation against all costs and expenses reasonably incurred by or imposed upon him after February 28, 1949, in connection with or resulting from any action, suit or proceeding to which he may be made a party by reason of his being or having been a Director or officer of the Corporation, except in relation to matters as to which a recovery shall be had against him by reason of his having been finally adjudged in such action, suit or proceeding to have been derelict in the performance of his duties as such Director or officer. The foregoing right to indemnity shall include reimbursement of the amounts and expenses paid in settling any such action, suit or proceeding, when settling appears to be in the interest of the Corporation, and shall not be exclusive of other rights to which such Director or officer may be entitled as a matter of law. (b) In addition to the foregoing provisions of the Bylaws of the registrant, directors and officers may be indemnified by the registrant pursuant to the provisions of Sections 10-2B-8.50 et seq. of the Code of Alabama (1975), which indemnity may be broader than that provided by the registrant's Bylaws and to the extent that the person being indemnified is an officer or director of the registrant's parent, Energen Corporation, and is serving at the request of Energen Corporation as a director, officer or agent of the registrant such person may also be indemnified pursuant to the provisions of Section 2.06 of the Bylaws of Energen Corporation. Item 16. List of Exhibits. 1 Form of Underwriting Agreement. *4 Indenture, dated as of November 1, 1993, between Alabama Gas Corporation and The Bank of New York (as successor to NationsBank of Georgia, National Association), Trustee, which was filed as Exhibit 4(k) to the registrant's registration statement on Form S-3 (Registration No. 33-70466). 5 Opinion of Bradley Arant Rose & White LLP. 12 Computation of ratio of earnings to fixed charges. 23(a) Consent of PricewaterhouseCoopers LLP. 23(b) Consent of KPMG LLP. II-1 23(c) The consent of Bradley Arant Rose & White LLP is contained in their opinion filed as Exhibit 5 to this registration statement. 24 Powers of Attorney. 25 Statement of Eligibility and Qualification of The Bank of New York on Form T-1. - ------------ * Incorporated by reference. Item 17. Undertakings. A. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. B. Insofar as indemnification for liabilities under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. C. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Birmingham, State of Alabama, on the 16th day of August, 2001. ALABAMA GAS CORPORATION By: /s/ Geoffrey C. Ketcham ----------------------- Geoffrey C. Ketcham Executive Vice President, Treasurer and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- * Chairman and Chief August 16, 2001 - ----------------------------- Executive Officer Wm. Michael Warren, Jr. (Principal Executive Officer) /s/ Geoffrey C. Ketcham Executive Vice President, August 16, 2001 - ----------------------------- Treasurer and Chief Geoffrey C. Ketcham Financial Officer (Principal Financial Officer) * Vice President-Finance August 16, 2001 - ----------------------------- (Principal Accounting Officer) Paula H. Rushing * Director August 16, 2001 - ----------------------------- J. Mason Davis, Jr. * Director August 16, 2001 - ----------------------------- Stephen D. Ban * Director August 16, 2001 - ----------------------------- Julian W. Banton * Director August 16, 2001 - ----------------------------- James S. M. French II-3 * Director August 16, 2001 - ----------------------------- Rex J. Lysinger * Director August 16, 2001 - ----------------------------- Judy M. Merritt * Director August 16, 2001 - ----------------------------- Drayton Nabers, Jr. * Director August 16, 2001 - ----------------------------- T. Michael Goodrich * Director August 16, 2001 - ----------------------------- Wallace L. Luthy * Director August 16, 2001 - ----------------------------- Stephen A. Snider * By /s/ Geoffrey C. Ketcham ----------------------- Geoffrey C. Ketcham, Attorney-in-fact II-4 INDEX TO EXHIBITS
Sequentially Exhibit Numbered Number Description Page - --------- ------------------------------------------------------------------------------------ ------------ 1 Form of Underwriting Agreement. *4 Indenture, dated as of November 1, 1993, between Alabama Gas Corporation and The Bank of New York (as successor to NationsBank of Georgia, National Association), Trustee, which was filed as Exhibit 4(k) to Alabama Gas' registration statement on Form S-3 (Registration No. 33-70466). 5 Opinion of Bradley Arant Rose & White LLP. 12 Computation of ratio of earnings to fixed charges. 23(a) Consent of PricewaterhouseCoopers LLP. 23(b) Consent of KPMG LLP. 23(c) The consent of Bradley Arant Rose & White LLP is contained in their opinion filed as Exhibit 5 to this registration statement. 24 Powers of Attorney. 25 Statement of Eligibility and Qualification of The Bank of New York on Form T-1.
- ------------ * Incorporated by reference. EX-1 3 dex1.txt FORM OF UNDERWRITING AGREEMENT EXHIBIT 1 Alabama Gas Corporation $40,000,000 [ ]% Notes due September 1, 2016 $35,000,000 [ ]% Notes due September 1, 2031 Underwriting Agreement ---------------------- August [ ], 2001 A.G. Edwards & Sons, Inc. One North Jefferson Avenue St. Louis, Missouri 63103 Edward D. Jones & Co., L.P. 12555 Manchester Road St. Louis, Missouri 63131 Ladies and Gentlemen: Alabama Gas Corporation, an Alabama corporation (the Company), hereby confirms its agreement with the several Underwriters (as defined below) as follows: 1. Purchase and Sale. Upon the basis of the representations and ----------------- warranties herein contained, and subject to the terms and conditions herein set forth, the Company agrees to sell to each of the several firms or corporations named in Schedule I hereto and any firm or corporation substituted as provided in Section 3(c) hereof as if such firm or corporation had originally been a party to this Agreement (each, an Underwriter), and each Underwriter agrees, at the time and place herein specified, severally and not jointly, to purchase from the Company the respective principal amounts of the Company's [ ]% Notes due September 1, 2016 and [ ]% Notes due September 1, 2031 (collectively, the Securities), at the respective purchase prices of [ ]% and [ ]% of the principal amount thereof set forth opposite such Underwriter's name on Schedule I hereto and having the terms set forth in the Prospectus (as defined in Section 2(b) hereof). The Securities will be issued pursuant to an Indenture dated as of November 1, 1993 (as amended and supplemented, the Indenture) between the Company and The Bank of New York, as successor to NationsBank of Georgia, National Association (the Trustee). Payment of principal of and interest on the Securities when due will be guaranteed by a financial guaranty insurance policy in substantially the form of Appendix A to the Prospectus (the Financial Guaranty Insurance Policy) to be issued by Ambac Assurance Corporation (the Insurer) simultaneously with the delivery of the Securities. 2. Representations and Warranties of Company. The Company represents and ----------------------------------------- warrants to, and covenants and agrees with, the several Underwriters that: (a) Filing of Registration Statement and any Preliminary Prospectus --------------------------------------------------------------- with SEC. The Company meets the requirements for use of Form S-3 under the - -------- Securities Act of 1933, as amended (the 1933 Act), and has filed with the Securities and Exchange Commission (the SEC) the Registration Statement (as defined below) and each Preliminary Prospectus (as defined below) relating to the Securities, if any, required to be filed pursuant to Rule 424 under the 1933 Act; the Registration Statement has been declared effective by the SEC under the 1933 Act and complies in all material respects with Rule 430A under the 1933 Act; and no stop order suspending the effectiveness of the Registration Statement or any part thereof has been issued under the 1933 Act and no proceedings for that purpose have been instituted or threatened by the SEC, and any request on the part of the SEC for additional information has been complied with by the Company. For the purposes of this Agreement, the following terms used herein shall have the following meanings: (i) Registration Statement shall mean the registration statement on Form S-3 (No. 333-[ ]) filed by the Company with the SEC for the registration of the Securities under the 1933 Act, as amended to the date of this Agreement and including the exhibits thereto, and shall be deemed to include the Incorporated Documents (as defined below) and the information deemed to be included therein pursuant to Rule 430A under the 1933 Act; (ii) Incorporated Documents shall mean the documents filed by the Company with the SEC under the Securities Exchange Act of 1934, as amended (the 1934 Act), that are, or are deemed to be, incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3 under the 1933 Act; (iii) Preliminary Prospectus shall mean any prospectus used in connection with the offering and sale of the Securities prior to the initial Effective Date (as defined below) and any prospectus that omitted information in reliance on Rule 430A under the 1933 Act that was used in connection with the offering and sale of the Securities after such Effective Date and prior to the execution and delivery of this Agreement, and shall in each case be deemed to include the Incorporated Documents; and (iv) Effective Date shall mean the date or time that the Registration Statement or any post-effective amendment thereto was declared effective by the SEC under the 1933 Act. For purposes of this Agreement, the words "amend," "amendment" or "amended" with respect to the Registration Statement or the Prospectus shall mean (i) amendments to the Registration Statement or the Prospectus and (ii) Incorporated Documents, in each case filed with the SEC or sent to prospective purchasers of the Securities after the date of this Agreement and prior to the completion of the distribution of the Securities. (b) Registration Statement; Prospectus; Incorporated Documents. (i) ---------------------------------------------------------- The Registration Statement, at its Effective Date, any Preliminary Prospectus, when delivered to the Underwriters for their use in marketing the Securities (whether or not filed with the SEC pursuant to Rule 424 under the 1933 Act), and the Prospectus, at the time it is filed with the SEC pursuant to Rule 424(b) under the 1933 Act and when delivered to the Underwriters for their use in making confirmations of sales of the Securities, complied and will comply, as the case may be, in all material respects with the applicable requirements of the 1933 Act, the Trust Indenture Act of 1939, as amended (the 1939 Act), and, in each case, the rules and regulations of the SEC 2 thereunder; (ii) the Registration Statement, at its Effective Date, did not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (iii) the Prospectus, at the time it is filed with the SEC pursuant to Rule 424(b) under the 1933 Act and when delivered to the Underwriters for their use in making confirmations of sales of the Securities, will not, and any Preliminary Prospectus, when delivered to the Underwriters for their use in marketing the Securities (whether or not filed with the SEC pursuant to Rule 424 under the 1933 Act), did not, include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (iv) each Incorporated Document, at the time it was or is filed with the SEC pursuant to the 1934 Act, complied and will comply, as the case may be, in all material respects with the applicable requirements of the 1934 Act and the rules and regulations of the SEC thereunder and, at such times, did not contain and will not contain, as the case may be, an untrue statement of a material fact and did not omit and will not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that, in the case of clauses (i), (ii) and (iii) above, the Company makes no representation or warranty as to (x) information furnished in writing to the Company by any Underwriter expressly for use in the Prospectus, which for purposes of this Agreement shall be deemed to consist solely of (1) the statements with respect to the delivery of the Securities in the last paragraph on the cover page of the Prospectus, and (2) the statements in paragraphs three, four, six and seven under the caption "Underwriting" in the Prospectus (collectively, the Underwriter Information) or (y) that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification of the Trustee on Form T-1 under the 1939 Act. For purposes of this Agreement, Prospectus shall mean the prospectus included in the Registration Statement at the initial Effective Date, as such prospectus may at any time be amended by the addition of (i) the information omitted in reliance on Rule 430A under the 1933 Act and contained in the prospectus as first filed with the SEC pursuant to Rule 424(b) under the 1933 Act and (ii) except for purposes of Section 5(e) hereof, any Incorporated Documents filed with the SEC after the Effective Date. (c) Indenture. The Indenture has been duly qualified under the 1939 --------- Act, has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery of the Indenture by the Trustee, will constitute a valid and binding instrument of the Company enforceable against the Company in accordance with its terms, except as may be limited by (i) bankruptcy, insolvency, fraudulent conveyance, reorganization and other similar laws relating to or affecting creditors' rights generally, (ii) general equitable principles (whether considered in a proceeding in equity or at law) and (iii) requirements of reasonableness, good faith and fair dealing (such exceptions, collectively, the Exceptions); and the Indenture will conform to the description thereof contained in the Prospectus. (d) Securities. The Securities have been duly authorized and, at the ---------- Closing Date, will have been duly executed by the Company, and, when authenticated in the manner provided for in the Indenture, issued and delivered against payment therefor by the Company as described in the Prospectus, will constitute valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as may be limited by the 3 Exceptions, and will be entitled to the benefits of the Indenture; and the Securities will conform to the description thereof contained in the Prospectus. (e) Agreement. This Agreement has been duly authorized, executed --------- and delivered by the Company. (f) Due Incorporation. The Company has been duly incorporated and is ----------------- validly existing as a corporation in good standing under the laws of the State of Alabama, with corporate power and authority to own its properties and conduct its business as described in the Prospectus and to execute and deliver, and perform its obligations under, this Agreement, the Indenture and the Securities; the Company is not required by the nature of its business to be licensed or qualified as a foreign corporation in any other state or jurisdiction, except where the failure to be so qualified would not have a material adverse effect on the Company; and the Company has only one subsidiary, Midtown NGV, Inc., which is a wholly-owned subsidiary with assets not in excess of $75,000. (g) Material Changes. The Company has not sustained, since the date ---------------- of the most recent financial statements included or incorporated by reference in the Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Prospectus; and, since the respective dates as of which information is given in the Prospectus, there has not been any change in the capital stock, long-term debt or net assets of the Company or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, stockholder's equity or results of operations of the Company, otherwise than as set forth in the Prospectus. (h) No Conflicts; Alabama Commission Order in Full Force and Effect; ---------------------------------------------------------------- No Consents Required. The offering and sale of the Securities and the - -------------------- compliance by the Company with all of the provisions of the Securities, the Indenture and this Agreement, and the consummation of the transactions herein and therein contemplated, will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in any violation of the provisions of the Company's articles of incorporation or bylaws, each as amended (the Organizational Documents), or any statute, rule, regulation or other law, or any order or judgment, of any court or governmental agency or body having jurisdiction over the Company or any of its properties; the Alabama Public Service Commission has issued its final order (the Alabama Commission Order) authorizing the issue and sale of the Securities by the Company and such Alabama Commission Order is in full force and effect and not the subject of any appeal or other proceeding and is sufficient to authorize the transactions contemplated by this Agreement; and no other consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body having jurisdiction over the Company or any of its properties is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement and the Indenture, except such as have been 4 obtained under the 1933 Act and the 1939 Act, and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or blue sky laws in connection with the purchase and distribution of the Securities by the Underwriters. (i) Exemption from Public Utility Holding Company Act. Energen ------------------------------------------------- Corporation is the sole owner of all of the issued and outstanding common stock of the Company and has filed an annual exemption statement on Form U-3A-2 pursuant to Rule 2 under the Public Utility Holding Company Act of 1935, as amended (the 1935 Act), and Energen Corporation and each of its subsidiaries are exempt from all of the provisions of the 1935 Act except Section 9(a)(2) thereof and have received no notice, request or inquiry from the SEC terminating or threatening to terminate or questioning such exemption. (j) No Defaults. The Company is not in violation of the ----------- Organizational Documents or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject. (k) Litigation. Other than as set forth in the Prospectus, there are ---------- no legal or governmental proceedings pending to which the Company is a party or of which any property of the Company is the subject that, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on the current or future financial position, stockholder's equity or results of operations of the Company, and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated. 3. Offering; Delivery of Securities. -------------------------------- (a) Offering. The Underwriters have advised the Company that they -------- propose to make a public offering of their respective portions of the Securities as soon after the effectiveness of this Agreement as in their judgment is advisable. The Underwriters have further advised the Company that they will offer the Securities to the public at the initial public offering prices specified in the Prospectus plus accrued interest thereon, if any, from the Closing Date to the date of delivery of the Securities. (b) Delivery of Securities. Delivery of the Securities to the ---------------------- Underwriters, against payment of the purchase price therefor in immediately available funds by wire transfer, shall be made prior to 1:00 P.M., New York City time, on August [ ], 2001 in book-entry form through the facilities of The Depository Trust Company, New York, New York (DTC), or at such other time and date as may be agreed upon in writing by the Company and the Underwriters. Delivery of the documents required by Section 5 hereof with respect to the Securities shall be made at such time and date at the offices of Pillsbury Winthrop LLP (Underwriters' Counsel), or at such other location as may be agreed upon in writing by the Company and the Underwriters. For purposes of this Agreement, Closing Date shall mean the hour and date of such delivery and payment. 5 The Securities shall be issued in the form of a global certificate registered in the name of "Cede & Co.," as nominee of DTC. For the purpose of expediting the Underwriters' checking of the Securities, the Company agrees to make the Securities available to the Underwriters for such purpose at the offices of DTC (or a custodian thereof) in New York, New York, not later than 1:00 P.M., New York City time, on the business day preceding the Closing Date or at such other time and place as may be agreed upon by the Company and the Underwriters. (c) Defaulting Underwriters. If an Underwriter shall default in its ----------------------- obligation to purchase the Securities that it has agreed to purchase under this Agreement, the non-defaulting Underwriter may in its discretion arrange for itself or another firm or corporation or firms or corporations to purchase such Securities on the terms contained herein. If, within thirty-six hours after such default by an Underwriter, the non-defaulting Underwriter does not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another firm or corporation or firms or corporations to purchase such Securities on such terms. In the event that, within the respective prescribed period, the non-defaulting Underwriter shall notify the Company that it has so arranged for the purchase of such Securities, or the Company notifies the non-defaulting Underwriter that it has so arranged for the purchase of such Securities, the non-defaulting Underwriter or the Company shall have the right to postpone the Closing Date for such Securities for a period of not more than seven days in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus that in the opinion of the non-defaulting Underwriter may thereby be made necessary. If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Underwriter by the non-defaulting Underwriter and the Company, the aggregate principal amount of such Securities that remains unpurchased does not exceed one-eleventh of the aggregate principal amount of the Securities, then the Company shall have the right to require the non-defaulting Underwriter to purchase the principal amount of the Securities that the non-defaulting Underwriter agreed to purchase under this Agreement and, in addition, to require the non-defaulting Underwriter to purchase the Securities of the defaulting Underwriter for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. If, after giving effect to any arrangements for the purchase of the Securities of the defaulting Underwriter by the non-defaulting Underwriter and the Company, the aggregate principal amount of the Securities that remains unpurchased exceeds one-eleventh of the aggregate principal amount of the Securities, or if the Company shall not exercise the right to require the non-defaulting Underwriter to purchase the Securities of the defaulting Underwriter, then this Agreement shall thereupon terminate, without liability on the part of the non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 4(j) hereof and the indemnity and contribution agreements in Section 6 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 4. Covenants of Company. The Company covenants and agrees with the -------------------- several Underwriters that: 6 (a) Filing of Prospectus. The Company will promptly transmit copies -------------------- of the Prospectus, and any amendments or supplements thereto, to the SEC for filing pursuant to Rule 424(b) under the 1933 Act. (b) Copies of Registration Statement and Prospectus; Notice of Stop --------------------------------------------------------------- Orders. The Company will deliver to each Underwriter and to Underwriters' - ------ Counsel (i) one conformed copy of the Registration Statement as originally filed, including copies of exhibits thereto (other than any exhibits incorporated by reference therein), (ii) conformed copies of any amendments to the Registration Statement, including conformed copies of the Incorporated Documents (other than exhibits thereto), and (iii) a conformed copy of each consent and certificate included or incorporated by reference in, or filed as an exhibit to, the Registration Statement as so amended; the Company will deliver to the Underwriters as soon as practicable after the date of this Agreement as many copies of the Prospectus as the Underwriters may reasonably request for the purposes contemplated by the 1933 Act; the Company will promptly advise the Underwriters of the issuance of any stop order under the 1933 Act with respect to the Registration Statement (as amended) or the institution of any proceedings therefor, or the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, of which the Company shall have received notice or otherwise have knowledge prior to the completion of the distribution of the Securities; and the Company will use its best efforts to prevent the issuance of any such stop order and, if issued, to secure the prompt removal thereof. (c) Filing of Amendments or Supplements. During the period when a ----------------------------------- prospectus relating to any of the Securities is required to be delivered under the 1933 Act by the Underwriters or any dealer, the Company will not file any amendment or supplement to the Registration Statement, the Prospectus or any Incorporated Document to which the Underwriters or Underwriters' Counsel shall reasonably object. (d) Compliance with 1933 Act. During the period when a prospectus ------------------------ relating to any of the Securities is required to be delivered under the 1933 Act by any Underwriter or any dealer, the Company will comply, at its own expense, with all requirements imposed by the 1933 Act, as now and hereafter amended, and by the rules and regulations of the SEC thereunder, as from time to time in force, so far as necessary to permit the continuance of sales of or dealing in the Securities during such period in accordance with the provisions hereof and as contemplated by the Prospectus. (e) Certain Events and Amendments or Supplements. If, during the -------------------------------------------- period when a prospectus relating to any of the Securities is required to be delivered under the 1933 Act by any Underwriter or any dealer, (i) any event relating to or affecting the Company or of which the Underwriters shall advise the Company in writing shall occur as a result of which, in the opinion of the Company or the Underwriters, the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) it shall be necessary to amend or supplement the Registration Statement or the Prospectus to comply with the 1933 Act, the 1934 Act or the 1939 Act or the rules and regulations of the SEC thereunder, the Company will forthwith at its expense prepare 7 and furnish to the Underwriters a reasonable number of copies of such amendment or supplement that will correct such statement or omission or effect such compliance. (f) Blue Sky Qualifications. During the period when a prospectus ----------------------- relating to any of the Securities is required to be delivered under the 1933 Act by any Underwriter or dealer, the Company will furnish such proper information as may be lawfully required and otherwise cooperate in qualifying the Securities for offer and sale under the securities or blue sky laws of such jurisdictions as the Underwriters may reasonably designate and will file and make in each year such statements or reports as are or may be reasonably required by the laws of such jurisdictions; provided, however, that the Company shall not be required to qualify as a foreign corporation, qualify as a dealer in securities or file a general consent to service of process under the laws of any jurisdiction. (g) Earning Statement. In accordance with Rule 158 under the 1933 ----------------- Act, the Company will make generally available to its security holders and to holders of the Securities, as soon as practicable, an earning statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 under the 1933 Act. (h) Exchange Act Documents; Ratings Notification. During the period -------------------------------------------- when a prospectus relating to any of the Securities is required to be delivered under the 1933 Act by any Underwriter or dealer, the Company will file promptly all documents required to be filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act; and the Company will promptly notify the Underwriters of any written notice given to the Company by any "nationally recognized statistical rating organization" within the meaning of Rule 436(g)(2) under the 1933 Act (a Rating Agency) of any intended decrease in any rating of any securities of the Company or of any intended change in any such rating that does not indicate the direction of the possible change of any such rating, in each case by any such Rating Agency. (i) No Issuance Period. During the period beginning from the date of ------------------ this Agreement and continuing to and including the earlier of (i) the termination of trading restrictions on the Securities, as determined by the Underwriters, and (ii) 15 days after the Closing Date, the Company will not, without the Underwriters' prior written consent, offer for sale, sell or enter into any agreement to sell, or otherwise dispose of, any debt securities of the Company, except for the Securities. (j) Payment of Expenses. Whether or not any sale of the Securities is ------------------- consummated, the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of Bradley Arant Rose & White LLP, counsel for the Company, and the Accountants in connection with the registration of the Securities under the 1933 Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments or supplements thereto and the mailing and delivering of copies thereof to the Underwriters and any dealers; (ii) the cost of printing or producing this Agreement, the Indenture, any blue sky memorandum, closing documents (including any compilations thereof) and other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in 8 Section 4(f) hereof, including the fees and disbursements of Underwriters' Counsel in connection with such qualification and in connection with any such blue sky memorandum; (iv) any fees charged by a Rating Agency for rating the Securities; (v) any filing fees incident to, and the fees and disbursements of Underwriters' Counsel in connection with, any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost of preparing the Securities; (vii) the fees and disbursements of the Trustee and any agent of the Trustee and the fees and disbursements of their counsel in connection with the Indenture and the Securities; (viii) the premium with respect to, and any other fees and expenses in connection with, the Financial Guaranty Insurance Policy; and (ix) all other costs and expenses incident to the performance of the Company's obligations hereunder that are not otherwise specifically provided for in this Section 4(j); provided, however, that if this Agreement shall be terminated pursuant to Section 3(c) hereof and could not have been terminated pursuant to Section 5 hereof, the Company shall then not be under any liability to any Underwriter with respect to the Securities except as provided in this Section 4(j) and Section 6 hereof; but, if for any other reason the Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriters for all of their out-of-pocket expenses, including fees and disbursements of Underwriters' Counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Securities, but the Company shall then be under no further liability to any Underwriter with respect to the Securities except as provided in this Section 4(j) and Section 6 hereof. It is understood that, except as provided in this Section 4(j) and Section 6 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of Underwriters' Counsel and any advertising expenses in connection with any offers they may make. 5. Conditions to Underwriters' Obligations. The obligations of the --------------------------------------- several Underwriters under this Agreement shall be subject to the condition that all representations and warranties of the Company contained in this Agreement are, at and as of the Closing Date, true and correct, the condition that the Company shall have performed all of its obligations hereunder on or prior to the Closing Date and the following additional conditions: (a) Filing of Prospectus with SEC; No Stop Order; Alabama Commission ---------------------------------------------------------------- Order in Full Force and Effect. The Prospectus, and any supplements thereto, - ------------------------------ shall have been filed with the SEC within the time period prescribed for such filing by Rule 424(b) under the 1933 Act and in accordance with Section 4(a) hereof; all requests for additional information on the part of the SEC shall have been complied with to the Underwriters' reasonable satisfaction; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the SEC; and the Alabama Commission Order shall be in full force and effect and such order shall not have been amended or modified to include conditions or restrictions which the Underwriters in good faith determine to be unduly burdensome. (b) Opinion of Underwriters' Counsel. At the Closing Date, -------------------------------- Underwriters' Counsel shall have furnished to the Underwriters an opinion, dated the Closing Date, with respect to the validity of the Securities, the Prospectus and the Registration Statement and such other related matters as the Underwriters may reasonably request, and Underwriters' Counsel 9 shall have received such documents and information as it may reasonably request to enable it to pass upon such matters. (c) Opinion of Company Counsel. At the Closing Date, counsel for the -------------------------- Company shall have furnished to the Underwriters an opinion, dated the Closing Date, in form and substance satisfactory to the Underwriters, to the effect that: (i) the Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Alabama, with corporate power and authority to own its properties and conduct its business as described in the Prospectus and to execute and deliver, and perform its obligations under, this Agreement, the Indenture and the Securities; and the Company is not required by the nature of its business to be licensed or qualified as a foreign corporation in any other state or jurisdiction, except where the failure to be so qualified would not have a material adverse effect on the Company; (ii) to the best of such counsel's knowledge and other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company is a party or of which any property of the Company is the subject that, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on the current or future financial position, stockholder's equity or results of operations of the Company and, to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (iii) this Agreement has been duly authorized, executed and delivered by the Company; (iv) the Securities have been duly authorized, executed, authenticated, issued and delivered by the Company and constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms, except as may be limited by the Exceptions, and are entitled to the benefits of the Indenture; and the Securities conform to the description thereof in the Prospectus; (v) the Indenture has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding instrument of the Company enforceable against the Company in accordance with its terms, except as may be limited by the Exceptions; the Indenture conforms to the description thereof in the Prospectus; and the Indenture has been duly qualified under the 1939 Act; (vi) the issue and sale of the Securities and the compliance by the Company with all of the provisions of the Securities, the Indenture and this Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the 10 Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, nor will such actions result in any violation of the provisions of the Organizational Documents or any statute, rule, regulation or other law, or any order or judgment known to such counsel, of any court or governmental agency or body having jurisdiction over the Company or any of its properties; (vii) the Alabama Commission Order is in full force and effect and is sufficient to permit the Company to enter into and perform the transactions contemplated by this Agreement, the Securities and the Indenture, and no other consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body having jurisdiction over the Company or any of its properties is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement and the Indenture, except such as have been obtained under the 1933 Act and the 1939 Act and such consents, approvals, authorizations, orders, registrations or qualifications as may be required under state securities or blue sky laws in connection with the Underwriters' purchase and distribution of the Securities; (viii) Energen Corporation is the sole owner of all of the issued and outstanding common stock of the Company and has filed an annual exemption statement on Form U-3A-2 pursuant to Rule 2 under the 1935 Act, and Energen Corporation and each of its subsidiaries are exempt from all of the provisions of the 1935 Act except Section 9(a)(2) thereof; (ix) the Registration Statement, at the Effective Date, and the Prospectus, at the time it was filed with the SEC pursuant to Rule 424(b) under the 1933 Act (except in each case as to financial statements and other financial and statistical data contained or incorporated by reference therein, upon which such counsel need not pass), complied as to form in all material respects with the requirements of the 1933 Act and the 1939 Act and the respective rules and regulations of the SEC thereunder; each Incorporated Document as originally filed pursuant to the 1934 Act (except as to financial statements and other financial and statistical data contained or incorporated by reference therein, upon which such counsel need not pass) complied as to form when so filed in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC thereunder; the Registration Statement has become, and on the Closing Date is, effective under the 1933 Act and, to the best of such counsel's knowledge, no proceedings for a stop order with respect thereto are threatened or pending under Section 8 of the 1933 Act; and nothing has come to the attention of such counsel that has caused it to believe that the Registration Statement (except as to financial statements and other financial and statistical data contained or incorporated by reference therein, upon which such counsel need not pass), at the Effective Date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus (except as to financial statements and other financial and statistical data contained or incorporated by reference therein, upon which such counsel need not pass), at the time it was filed with the SEC pursuant to Rule 424(b) under the 1933 Act or on the Closing Date, included or includes any untrue 11 statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (x) Such counsel does not know of any franchise, contract or other document required to be described in, or filed as an exhibit to, the Registration Statement or incorporated by reference in the Prospectus that are not so described or filed or incorporated by reference as required; and the statements included or incorporated by reference in the Prospectus describing material contracts or agreements relating to the Company fairly summarize such matters. In rendering such opinion, such counsel (A) may rely as to matters involving the application of laws of any jurisdiction other than the State of Alabama or the United States, to the extent deemed proper and specified in such opinion, upon the opinion of other counsel of good standing believed to be reliable and who are satisfactory to Underwriters' Counsel, (B) may rely as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public officials and (C) need not pass upon any information contained or incorporated by reference in the Registration Statement or the Prospectus relating to the Insurer, the Financial Guaranty Insurance Policy or DTC. (d) Letter of Accountants. On the date of this Agreement, at a time --------------------- prior to the execution of this Agreement, and at the Closing Date, the Accountants shall have furnished to the Underwriters letters, dated the date of this Agreement and the Closing Date, respectively, in form and substance satisfactory to the Underwriters, confirming that they are independent accountants within the meaning of the 1933 Act and the rules and regulations of the SEC thereunder with respect to the Company and stating in effect that: (i) in the opinion of the Accountants, the financial statements and schedules included or incorporated by reference in the Prospectus and audited by them comply as to form in all material respects with the applicable accounting requirements of the 1933 Act and the 1934 Act and the respective rules and regulations of the SEC thereunder; and (ii) on the basis of a reading of the unaudited financial statements included or incorporated by reference in the Prospectus and the latest available interim unaudited financial statements of the Company, the performance of the procedures specified by the American Institute of Certified Public Accountants for a review of any such financial statements as described in Statement on Auditing Standards No. 71, inquiries of officials of the Company responsible for financial and accounting matters and a reading of the minutes of meetings of the stockholder, the Board of Directors of the Company and the Audit and Finance Committees of Energen Corporation through a specified date not more than five days prior to the date of the applicable letter, nothing came to the attention of the Accountants that caused them to believe that: (A) any material modification should be made to the unaudited financial statements included or incorporated by reference in the Prospectus for them to be in conformity with generally accepted accounting principles or any such financial statements do not comply as to form in all material respects with the applicable accounting requirements of the 1933 Act or the 1934 Act and the respective 12 rules and regulations of the SEC thereunder; (B) for the twelve months ended as of the date of the most recent available financial statements of the Company, there were any decreases in operating revenues, operating income, other income or net income as compared with the comparable period of the preceding year; or (C) at the date of the most recent available financial statements of the Company and at a subsequent date not more than five days prior to the date of such letter, there was any change in the capital stock or long-term debt of the Company or any decrease in its net assets as compared with the amounts shown in the most recent balance sheet included or incorporated by reference in the Prospectus, except in all instances for changes or decreases that the Prospectus discloses have occurred or may occur, or for changes or decreases that are described in such letter that are reasonably satisfactory to the Underwriters. Such letter shall also cover such other matters as the Underwriters shall reasonably request, including but not limited to the Company's "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in the Company's financial statements included or incorporated by reference in the Prospectus and any other information of an accounting, financial or statistical nature included therein. (e) No Material Changes. (i) The Company shall not have sustained, ------------------- since the date of the most recent financial statements included or incorporated by reference in the Prospectus, any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Prospectus, and (ii) since the respective dates as of which information is given in the Prospectus, there shall not have been any change in the capital stock, long-term debt or net assets of the Company or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholder's equity or results of operations of the Company, otherwise than as set forth in the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the Underwriters' judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus. (f) Ratings; No Downgrading of Ratings or Credit Review. Moody's --------------------------------------------------- Investors Service and Standard & Poor's shall have publicly assigned to the Securities ratings of Aaa and AAA, respectively, which ratings shall be in full force and effect at the Closing Date; and, on or after the date of this Agreement, (i) no downgrading shall have occurred in the rating accorded any of the Company's securities by any Rating Agency and (ii) no Rating Agency shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's securities. (g) Nonoccurrence of Certain Events. On or after the date of this ------------------------------- Agreement, there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally by the SEC, any national securities exchange or The Nasdaq Stock Market; (ii) a suspension or material limitation in trading in the Company's securities by the SEC, any national securities exchange or The Nasdaq Stock Market; (iii) a general moratorium on commercial banking activities declared by Federal or New York State authorities; or (iv) the 13 outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this clause (iv), in the Underwriters' judgment, makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Securities on the terms and in the manner contemplated in the Prospectus. (h) Officers' Certificate. At the Closing Date, the Company shall --------------------- have furnished or caused to be furnished to the Underwriters a certificate of the Chairman of the Board or the President of the Company and the principal financial or accounting officer of the Company satisfactory to the Underwriters as to the accuracy of the representations and warranties of the Company herein on and as of the Closing Date, as to the performance by the Company of all of its obligations hereunder to be performed on or prior to the Closing Date, as to the matters set forth in Sections 5(a) and 5(e) hereof and as to such other matters as the Underwriters may reasonably request. (i) Effectiveness of Financial Guaranty Insurance Policy; Opinion of ---------------------------------------------------------------- Insurer's Counsel. At the Closing Date, the Financial Guaranty Insurance Policy - ----------------- shall have been duly authorized, executed and delivered by the Insurer to the insurance trustee named therein and shall be in full force and effect and the Underwriters shall have received an opinion of counsel for the Insurer, dated the Closing Date, covering such matters as the Underwriters may reasonably request in form and substance reasonably satisfactory to the Underwriters. In case any of the conditions specified above in this Section 5 shall not have been fulfilled, this Agreement may be terminated by the Underwriters upon mailing or otherwise delivering written notice thereof to the Company. Any such termination shall be without liability of either party to the other party except as otherwise provided in Section 4(j) hereof and except for any liability under Section 6 hereof. 6. Indemnification and Contribution -------------------------------- (a) Indemnification by Company. The Company will indemnify and hold -------------------------- harmless each Underwriter for and against any losses, damages or liabilities, joint or several, to which such Underwriter may become subject, under the 1933 Act or otherwise, insofar as such losses, damages or liabilities (or actions or claims in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred (including such losses, damages, liabilities or expenses to the extent of the aggregate amount paid in settlement of any such action or claim, provided that (subject to Section 6(c) hereof) any such settlement is effected with the written consent of the Company); provided, however, that the Company shall not be liable in any such case to the extent that any such loss, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, the Registration 14 Statement, the Prospectus or any such amendment or supplement thereto in reliance upon and in conformity with the Underwriter Information. (b) Indemnification by the Underwriters. Each Underwriter will ----------------------------------- indemnify and hold harmless the Company for and against any losses, damages or liabilities to which the Company may become subject, under the 1933 Act or otherwise, insofar as such losses, damages or liabilities (or actions or claims in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement, the Prospectus or any amendment or supplement thereto, or arise out of are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement, the Prospectus or any such amendment or supplement, in reliance upon and in conformity with the Underwriter Information in respect of such Underwriter, and will reimburse the Company for any legal or other expenses incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred (including such losses, damages, liabilities or expenses to the extent of the aggregate amount paid in settlement of any such action or claim, provided that (subject to Section 6(c) hereof) any such settlement is effected with the written consent of the Underwriters). (c) General. Promptly after receipt by an indemnified party under ------- Section 6(a) or 6(b) hereof of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under Section 6(a) or 6(b) hereof, notify such indemnifying party in writing of the commencement thereof, but the failure so to notify such indemnifying party shall not relieve such indemnifying party from any liability except to the extent that it has been prejudiced in any material respect by such failure or from any liability that it may have to any such indemnified party otherwise than under Section 6(a) or 6(b) hereof. In case any such action shall be brought against any such indemnified party and it shall notify such indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party under Section 6(a) or (b) hereof similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of such indemnified party, be counsel to such indemnifying party), and, after notice from such indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party under Section 6(a) or 6(b) hereof for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. If at any time such indemnified party shall have requested such indemnifying party under Section 6(a) or 6(b) hereof to reimburse such indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a) or (b) hereof effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of such request for reimbursement, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party 15 in accordance with such request for reimbursement prior to the date of such settlement. No such indemnifying party shall, without the written consent of such indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not such indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (A) includes an unconditional release of such indemnified party from all liability arising out of such action or claim and (B) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any such indemnified party. In no event shall such indemnifying parties be liable for the fees and expenses of more than one counsel, including any local counsel, for all such indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. (d) Contribution. If the indemnification provided for in this Section ------------ 6 is unavailable to or insufficient to indemnify or hold harmless an indemnified party under Section 6(a) or 6(b) hereof in respect of any losses, damages or liabilities (or actions or claims in respect thereof) referred to therein, then each indemnifying party under Section 6(a) or 6(b) hereof shall contribute to the amount paid or payable by such indemnified party as a result of such losses, damages or liabilities (or actions or claims in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if such indemnified party failed to give the notice required under Section 6(c) hereof and such indemnifying party was prejudiced in a material respect by such failure, then each such indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, damages or liabilities (or actions or claims in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to above in this Section 6(d). The amount paid or payable by such an indemnified party as a result of the losses, damages or liabilities (or actions or claims in respect thereof) referred to above in this Section 6(d) shall be deemed to include any legal or other expenses incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6(d), no Underwriter shall be required to contribute any amount in excess of the amount 16 by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters in this Section 6(d) to contribute are several in proportion to their respective underwriting obligations with respect to the Securities and not joint. (e) Scope of Obligations. The obligations of the Company under this -------------------- Section 6 shall be in addition to any liability that the Company may otherwise have and shall extend, upon the same terms and conditions, to each officer, director, employee, agent or other representative and to each person, if any, who controls any Underwriter within the meaning of the 1933 Act; and the obligations of the Underwriters under this Section 6 shall be in addition to any liability that the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company who signed the Registration Statement and to each person, if any, who controls the Company within the meaning of the 1933 Act. 7. Representations, Warranties and Agreements to Survive Delivery. The -------------------------------------------------------------- respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of the Company or them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter, any officer, director, employee, agent or other representative of the Underwriters or any controlling person of any Underwriter, or the Company, any officer or director of the Company who signed the Registration Statement or any controlling person of the Company, and shall survive delivery of and payment for the Securities. 8. Notices. All notices and other communications hereunder shall be in ------- writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to A.G. Edwards & Sons, Inc. at the address set forth on the first page of this Agreement, attention of Lester H. Krone, Managing Director and to Edward D. Jones & Co., L.P. at the address set forth on the first page of this Agreement, attention of James A. Krekeler, Partner; and notices to the Company shall be directed to Alabama Gas Corporation, 605 Richard Arrington, Jr. Boulevard North, Birmingham, Alabama 35203-2707, attention of Geoffrey C. Ketcham, Executive Vice President and Chief Financial Officer. 9. Miscellaneous. The rights and duties of the parties to this Agreement ------------- shall, pursuant to New York General Obligations Law Section 5-1401, be governed by the law of the State of New York. This Agreement shall be binding upon, and inure solely to the benefit of, the Company and the Underwriters except to the extent provided in Section 6(e) hereof, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No person who purchases any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of 17 such purchase. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. The word "or" shall not be exclusive, and all references in this Agreement to the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section or subdivision hereof, and the captions to such Sections and subdivisions are for convenience only and shall not affect the construction hereof. 18 If the foregoing is in accordance with your understanding, please sign and return to the Company the enclosed duplicate hereof, whereupon this Agreement will become a binding agreement between the Company and the several Underwriters in accordance with its terms. Very truly yours, Alabama Gas Corporation By: --------------------------- Name: Title: Accepted as of the date hereof: A.G. Edwards & Sons, Inc. By: ---------------------------- Name: Title: Edward D. Jones & Co., L.P. By: ---------------------------- Name: Title: 19 SCHEDULE I
Principal Principal Amount of Amount of [ ]% Notes due [ ]% Notes due September 1, 2016 September 1, 2031 To Be To Be Underwriter Purchased Purchased - ------------------------------------ ----------------- ----------------- A.G. Edwards & Sons, Inc............ $ $ Edward D. Jones, & Co., L.P......... ----------- ----------- Total........................ $40,000,000 $35,000,000 ----------- -----------
EX-5 4 dex5.txt OPINION OF BRADLEY ARANT ROSE & WHITE LLP EXHIBIT 5 August 16, 2001 Board of Directors Alabama Gas Corporation 605 Richard Arrington Jr. Blvd. North Birmingham, Alabama 35203-2707 Ladies and Gentlemen: In our capacity as counsel for Alabama Gas Corporation, an Alabama corporation (the "Company"), we have examined the Registration Statement on Form S-3 (the "Registration Statement"), in form as proposed to be filed by the Company with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, relating to the registration by the Company of $75,000,000.00 in aggregate principal amount of debt securities (the "Debt Securities"), to be issued under an indenture between the Company and The Bank of New York (as successor to NationsBank of Georgia, National Association), as Trustee (the "Indenture"). In this connection, we have examined such records, documents and proceedings as we have deemed relevant and necessary as a basis for the opinions expressed herein. Based upon the foregoing, we are of the opinion that the Debt Securities to be sold by the Company, to the extent actually issued pursuant to the Indenture and the prospectus related to the offering, will have been duly authorized and issued and will constitute legal, valid and binding obligations of the Company in accordance with their terms and the terms of the Indenture. We hereby consent to the filing of this opinion with the Securities and Exchange Commission as an Exhibit to the above-referenced Registration Statement. In addition, we hereby consent to the inclusion of the statements made in reference to this firm under the heading "Legal Matters" in the prospectus, which is a part of the Registration Statement. Very truly yours, /s/ BRADLEY ARANT ROSE & WHITE LLP EX-12 5 dex12.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EXHIBIT 12 Alabama Gas Corporation Computation of ratio of earnings to fixed charges (In thousands, except for ratios)
Years ended September 30, Twelve months ----------------------------------------------- ended 2000 1999 1998 1997 1996 June 30, 2001 ------- ------- ------- ------- ------- ------------- Earnings, as defined: Income from continuing operations before provision for income taxes $40,646 $36,460 $31,987 $28,688 $26,008 $40,027 Add: Interest, net of amounts capitalized (1) 9,550 10,218 10,052 10,619 9,296 11,066 Appropriate portion of rent expense (1/3) 736 693 705 760 715 730 Dividends on preferred stock of subsidiary 0 0 0 0 0 0 ------- ------- ------- ------- ------- ------- Total earnings, as defined $50,932 $47,371 $42,744 $40,067 $36,019 $51,823 ======= ======= ======= ======= ======= ======= Fixed charges, as defined: Interest(1) $ 9,870 $10,441 $10,994 $10,969 $ 9,585 $11,565 Appropriate portion of rent expense(1/3) 736 693 705 760 715 730 Dividends on preferred stock of subsidiary 0 0 0 0 0 0 ------- ------- ------- ------- ------- ------- Total fixed charges, as defined: $10,606 $11,134 $11,699 $11,729 $10,300 $12,295 ======= ======= ======= ======= ======= ======= Ratio of earnings to fixed charges 4.80 4.25 3.65 3.42 3.50 4.21 ======= ======= ======= ======= ======= =======
- ------------ (1) Includes amortization of debt discount and expense. EX-23.(A) 6 dex23a.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP EXHIBIT 23(a) Consent of Independent Accountants We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated October 25, 2000 relating to the financial statements and financial statement schedule of Alabama Gas Corporation, which appears in Alabama Gas Corporation's Annual Report on Form 10-K for the year ended September 30, 2000. We also consent to the reference to us under the heading "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP Birmingham, Alabama August 14, 2001 EX-23.(B) 7 dex23b.txt CONSENT OF KPMG LLP EXHIBIT 23(b) INDEPENDENT AUDITORS' CONSENT The Board of Directors Ambac Assurance Corporation: We consent to the incorporation by reference in the Registration Statement on Form S-3 of Alabama Gas Corporation (the "Registrant") of our report dated January 22, 2001 on the consolidated financial statements of Ambac Assurance Corporation and subsidiaries as of December 31, 2000 and 1999, and for each of the years in the three-year period ended December 31, 2000, which report appears in the Annual Report on Form 10-K of Ambac Financial Group, Inc. which was filed with the Securities and Exchange Commission on March 28, 2001 and to the reference to our firm under the heading "Experts" in the Registration Statement. /s/ KPMG LLP New York, New York August 16, 2001 EX-24 8 dex24.txt POWER OF ATTORNEY EXHIBIT 24 POWER OF ATTORNEY (Alagasco Debt Registration) KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned Officers and/or Directors of Alabama Gas Corporation, whose signatures appear below, hereby constitutes and appoints Wm. Michael Warren, Jr. and Geoffrey C. Ketcham, and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign a registration statement of Alabama Gas Corporation on Form S-3 relating to the registration of up to $100,000,000 in debt securities of Alabama Gas Corporation, including all amendments and post-effective amendments to such registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission and with any state securities commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as she or he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Dated as of the 23rd day of June, 2001. /s/ Stephan D. Ban /s/ Julian W. Banton - ---------------------------------- ----------------------------------------- STEPHEN D. BAN - Director JULIAN W. BANTON - Director /s/ J. Mason Davis, Jr. /s/ James S. M. French - ---------------------------------- ----------------------------------------- J. MASON DAVIS, JR. - Director JAMES S.M. FRENCH - Director /s/ T. Michael Goodrich /s/ Wallace L. Luthy - ---------------------------------- ----------------------------------------- T. MICHAEL GOODRICH - Director WALLACE L. LUTHY - Director /s/ Rex J. Lysinger /s/ Judy M. Merritt - ---------------------------------- ----------------------------------------- REX J. LYSINGER - Director JUDY M. MERRITT - Director /s/ Drayton Nabers, Jr. /s/ Stephen A. Snider - ---------------------------------- ----------------------------------------- DRAYTON NABERS, JR. - Director STEPHEN A. SNIDER - Director /s/ Wm. Michael Warren, Jr. /s/ G. C. Ketcham - ---------------------------------- ----------------------------------------- WM. MICHAEL WARREN, JR. - G. C. KETCHAM - Executive Vice Director, Chairman and CEO President, CFO and Treasurer /s/ Paula H. Rushing - ---------------------------------- PAULA H. RUSHING - Vice President Finance EX-25 9 dex25.txt STATEMENT OF ELIGIBILITY AND QUALIFICATION EXHIBIT 25 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------ FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------ CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ------------------ THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) NEW YORK (State of incorporation if not a U.S. national bank) 13-5160382 (I.R.S. employer identification no.) One Wall Street, New York, New York 10286 (Address of principal executive offices) (Zip Code) ------------------ The Bank of New York 10161 Centurion Parkway Jacksonville, Florida 32256 Attn: Mr. Derek Kettel (904) 998-4716 (Name, address and telephone number of agent for service) ------------------ Alabama Gas Corporation (Exact name of obligor as specified in its charter) ALABAMA 63-0022000 (State or other jurisdiction of (IRS employer incorporation or organization) identification no.) 605 RICHARD ARRINGTON JR. BLVD NORTH BIRMINGHAM, ALABAMA 35203-2707 (205) 326-8100 (Address, zip code and telephone number of principal executive offices) ------------------ NOTES (Title of the indenture securities) 1. General Information. ------------------- Furnish the following information as to the trustee-- (a) Name and address of each examining or supervising authority to which it is subject. Superintendent of Banks of the State of New York 2 Rector Street New York, N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, N.Y. 10005 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. ------------------------- If the obligor is an affiliate of the trustee, describe each such affiliation. None. 3-15 Not Applicable 16. List of Exhibits. ---------------- Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a- 29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). (1) A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) (4) A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) (6) The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration No. 33-44051.) (7) A copy of the latest report of condition of the Trustee published pursuant to law or the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Jacksonville and the State of Florida, on the 15th day of August, 2001. THE BANK OF NEW YORK By: /s/ Derek Kettel --------------------------- Derek Kettel, Agent EXHIBIT 6 TO FORM T-1 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, in connection with the proposed issuance of Alabama Gas Corporation Notes, The Bank of New York hereby consents that reports of examinations by Federal, State, Territorial or District Authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. THE BANK OF NEW YORK By: /s/ Derek Kettel --------------------------- Derek Kettel, Agent EXHIBIT 7 TO FORM T-1 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2001, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts ASSETS in Thousands - ------ -------------- Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin..................... $ 3,946,551 Interest-bearing balances.................. 5,454,795 Securities: Held-to-maturity securities................ 127,189 Available-for-sale securities.............. 8,367,798 Federal funds sold and securities purchased under agreements to resell....... 2,578,045 Loans and lease financing receivables: Loans and leases held for sale............. 15,750 Loans and leases, net of unearned income.................... 37,240,401 LESS: Allowance for loan and lease losses.............................. 604,286 Loans and leases, net of unearned income and allowance and reserve.......... 36,636,115 Assets held in trading accounts................. 9,717,521 Premises and fixed assets (including capitalized leases)........................ 777,125 Other real estate owned......................... 1,190 Investments in unconsolidated subsidiaries and associated companies.................................. 197,938 Customers' liability to this bank on acceptances outstanding................. 684,954 Intangible assets............................... 1,635,728 Other assets.................................... 3,987,019 ----------- Total assets.................................... $74,127,718 =========== LIABILITIES - ----------- Deposits: In domestic offices........................ $27,176,888 Noninterest-bearing........................ 11,540,657
Interest-bearing........................... 15,636,231 In foreign offices, Edge and Agreement subsidiaries, and IBFs.......... 26,457,350 Noninterest-bearing........................ 462,578 Interest-bearing........................... 25,994,772 Federal funds purchased and securities sold under agreements to repurchase........ 2,574,844 Trading liabilities............................. 1,732,397 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases).................................... 1,755,445 Bank's liability on acceptances executed and outstanding.................. 689,067 Subordinated notes and debentures............... 1,646,000 Other liabilities............................... 5,441,990 ----------- Total liabilities............................... 67,473,981 =========== Minority interest in consolidated subsidiaries.. 652 EQUITY CAPITAL - -------------- Perpetual preferred stock and related surplus... 0 Common stock.................................... 1,135,284 Surplus......................................... 1,050,729 Retained earnings............................... 4,480,524 Accumulated other comprehensive income..................................... (13,452) Other equity capital components................. 0 ----------- Total equity capital............................ 6,653,085 ----------- Total liabilities and equity capital............ $74,127,718 =========== I, Thomas J. Mastro, Senior Vice President and Comptroller of the above- named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Thomas J. Mastro We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi ) Gerald L. Hassell ) Directors Alan R. Griffith ) -----END PRIVACY-ENHANCED MESSAGE-----