vc_8k0311ex47.htm


    Exhibit
4.7

     

    VECTREN
CORPORATION

    One
Vectren Square

    Evansville,
Indiana  47708

     

    VECTREN
CAPITAL, CORP.

    One
Vectren Square

    Evansville,
Indiana  47708

     

    SECOND
AMENDMENT TO NOTE PURCHASE AGREEMENT

     

    Dated as
of

    March 11,
2009

     

    RE:           Note Purchase Agreement
dated as of April 25, 1997

    $35,000,000
7.43% Senior Notes due 2012

     

     

    TO THE
HOLDERS LISTED

    IN THE
ATTACHED SCHEDULE A:

     

    Ladies
and Gentlemen:

     

    Reference
is made to the Note Purchase Agreement, dated as of April 25, 1997 between you
and Vectren Capital, Corp., an Indiana corporation (the “Company”) and Vectren
Corporation, an Indiana corporation (“Vectren” and, together with the Company,
the “Obligors”)  as amended by that certain First Amendment to Note
Purchase Agreement dated as of October 11, 2005 (the “1997 Note Purchase
Agreement”).  Unless otherwise herein defined or the context hereof
otherwise requires, the capitalized terms in this Second Amendment (this “Second
Amendment”) shall have the respective meanings specified in the 1997 Note
Purchase Agreement.  You and the other holders named in the attached
Schedule A are hereinafter collectively referred to as “Holders” and
individually referred to as a “Holder”.  The term “Second Amendment
Closing Date” as used herein shall mean March 11, 2009.

     

    SECTION
I.   AMENDMENTS TO THE 1997 NOTE PURCHASE AGREEMENT.

     

    Section
1.1.    Amendments to Section 7.1 of the
1997 Note Purchase Agreement.    Section
7.1 of the 1997 Note Purchase Agreement shall be, and the same hereby is,
amended by:

     

    (a)  deleting
the phrase “Sections 10.6 and 10.7” in Section 7.1(c) and replacing it with the
phrase “Sections 10.6, 10.7, 10.8 and 10.9”;

     

    (b)  deleting
the phrase “subject to the last sentence of Section 7.3," at the beginning of
Section 7.1(h); and

     

    (c)
deleting the period at the end of Section 7.1(h), replacing said period with a
semicolon followed by the word “and”, and adding the following new Section
7.1(i) immediately thereafter:

     

    (i)           Unrestricted
Subsidiaries — In
the event that one or more Unrestricted Subsidiaries shall (i) own more than 10%
of the total consolidated assets of Vectren and its Subsidiaries determined as
of the end of each fiscal quarter in accordance with GAAP, and (ii) account for
more than 10% of the consolidated


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


     

    total
revenues of Vectren and its Subsidiaries determined as of the end of each fiscal
quarter for the four (4) consecutive fiscal periods then ended in accordance
with GAAP, then, within the respective periods provided in Section 7.1(a) and
(b) above, Vectren shall deliver to each holder of Notes that is an
Institutional Investor, unaudited financial statements of the character and for
the dates and periods as in said Sections 7.1(a) and (b) covering such group of
Unrestricted Subsidiaries (on a consolidated basis), together with a
consolidating statement reflecting eliminations or adjustments required to
reconcile the financial statements of such group of Unrestricted Subsidiaries to
the financial statements delivered pursuant to Sections 7.1(a) and (b).

     

    Section 1.2.  Amendment to
Section 8.2 of the 1997 Note Purchase Agreement.Section 8.2 of the 1997
Note Purchase Agreement shall be, and the same hereby is, amended by adding the
phrase “(or such lesser amount as shall be required to effect a partial
prepayment resulting from an offer of prepayment pursuant to Section
10.6)”  immediately following the phrase “not less than 5% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment” in the first sentence of Section 8.2.

     

    Section 1.3.  Amendment to
Section 8.4 of the 1997 Note Purchase Agreement.Section 8.4 of the 1997
Note Purchase Agreement shall be, and the same hereby is, amended by amending
and restating such Section 8.4 to read as follows:

     

    8.4   
[Intentionally Omitted.]

     

    Section 1.4.  Amendment to
Section 8.6 of the 1997 Note Purchase Agreement.Section 8.6 of the 1997
Note Purchase Agreement shall be, and the same hereby is, amended by deleting
the phrase “, and, in the case of any prepayment pursuant to Section 8.4,
the premium specified therein” at the end of the first sentence of such Section
8.6.

     

    Section 1.5   Amendment to Section 8 of the 1997
Note Purchase Agreement.     Section
8 of the 1997 Note Purchase Agreement shall be, and the same hereby is, amended
by adding a new Section 8.9 immediately following Section 8.8 to read as
follows:

     

    8.9   CHANGE IN
CONTROL.   

     

    (a)           Notice of Change in Control or
Control Event.  The Company will, within 15 Business Days
after any Responsible Officer has knowledge of the occurrence of any Change in
Control or Control Event, give written notice of such Change in Control or
Control Event to each holder of Notes unless notice in respect of such Change in
Control (or the Change in Control contemplated by such Control Event) shall have
been given pursuant to subparagraph (b) of this Section 8.9.  If
a Change in Control has occurred, such notice shall contain and constitute an
offer to prepay Notes as described in subparagraph (c) of this Section 8.9
and shall be accompanied by the certificate described in subparagraph (g) of
this Section 8.9.

     

    (b)           Condition to Company
Action.  The Company will not take any action that consummates
or finalizes a Change in Control unless (i) at least 15 Business Days
prior to such action it shall have given to each holder of Notes written notice
containing and constituting an offer to prepay Notes as described in
subparagraph (c) of this Section 8.9,


    
      
         


      

      
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    accompanied
by the certificate described in subparagraph (g) of this Section 8.9, and
(ii) contemporaneously with such action, it prepays all Notes required to
be prepaid in accordance with this Section 8.9.

     

    (c)           Offer to Prepay
Notes.  The offer to prepay Notes contemplated by subparagraphs
(a) and (b) of this Section 8.9 shall be an offer to prepay, in accordance
with and subject to this Section 8.9, all, but not less than all, the Notes
held by each holder (in this case only, “holder” in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the “Proposed
Prepayment Date”).  If such Proposed Prepayment Date is in connection
with an offer contemplated by subparagraph (a) of this Section 8.9,
such date shall be not less than 20 days and not more than 30 days
after the date of such offer (if the Proposed Prepayment Date shall not be
specified in such offer, the Proposed Prepayment Date shall be the 20th day
after the date of such offer).

     

    (d)           Acceptance;
Rejection.  A holder of Notes may accept or reject the offer to
prepay made pursuant to this Section 8.9 by causing a notice of such
acceptance or rejection to be delivered to the Company at least 5 Business Days
prior to the Proposed Prepayment Date.  A failure by a holder of Notes to
respond to an offer to prepay made pursuant to this Section 8.9 shall be
deemed to constitute a rejection of such offer by such holder.

     

    (e)           Prepayment.  Prepayment
of the Notes to be prepaid pursuant to this Section 8.9 shall be at 100% of
the principal amount of such Notes, but without
the payment of the Make-Whole Amount, together with interest on such
Notes accrued to the date of prepayment.  The prepayment shall be made
on the Proposed Prepayment Date except as provided in subparagraph (f) of this
Section 8.9.

     

    (f)           Deferral Pending Change in
Control.  The obligation of the Company to prepay Notes
pursuant to the offers required by subparagraph (b) and accepted in
accordance with subparagraph (d) of this Section 8.9 is subject to the
occurrence of the Change in Control in respect of which such offers and
acceptances shall have been made.  In the event that such Change in
Control does not occur on the Proposed Prepayment Date in respect thereof, the
prepayment shall be deferred until and shall be made on the date on which such
Change in Control occurs.  The Company shall keep each holder of Notes
reasonably and timely informed of (i) any such deferral of the date of
prepayment, (ii) the date on which such Change in Control and the
prepayment are expected to occur, and (iii) any determination by the
Company that efforts to effect such Change in Control have ceased or been
abandoned (in which case the offers and acceptances made pursuant to this
Section 8.9 in respect of such Change in Control shall be deemed
rescinded).

     

    (g)           Officer’s
Certificate.  Each offer to prepay the Notes pursuant to this
Section 8.9 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made
pursuant to this Section 8.9; (iii) the principal amount of each Note
offered to be prepaid; (iv) the interest that would be due on each Note
offered to be prepaid, accrued to the Proposed Prepayment Date; (v) that
the conditions of this Section 8.9 have been fulfilled; and (vi) in
reasonable detail, the nature and date or proposed date of the Change in
Control.


    
      
         


      

      
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    (h)           “Change in Control”
Defined.  “Change in
Control” means (i) the acquisition by any Person, or two or more Persons
acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Exchange Act) of 30% or more of
the outstanding shares of voting stock of Vectren, (ii) the occurrence during
any period of twelve (12) consecutive months, commencing before or after the
date of this Agreement, pursuant to which individuals who on the first day of
such period were directors of Vectren (together with any replacement or
additional directors who were nominated or elected by a majority of directors
then in office) cease to constitute a majority of the Board of Directors of
Vectren or (iii) Vectren shall cease to own, free and clear of any Lien, 100% of
the issued and outstanding capital stock of the Company.

     

    (i)           “Control Event”
Defined.  “Control
Event” means:

     

    (i)           the
execution of any written agreement which, when fully performed by the parties
thereto, would result in a Change in Control, or

     

    (ii)           the
making of any written offer by any Person, or two or more Persons acting in
concert, to the holders of the common stock of Vectren, which offer, if accepted
by the requisite number of holders, would result in a Change in
Control.

     

    Section 1.6.  
Amendment to Section 9.2 of
the 1997 Note Purchase Agreement.     Section
9.2 of the 1997 Note Purchase Agreement shall be, and the same hereby is,
amended by deleting the word “Subsidiaries” in such Section and replacing it
with the phrase “Restricted Subsidiaries”.


     

    Section 1.7.  
Amendment to Section 9.3 of
the 1997 Note Purchase Agreement.     Section
9.3 of the 1997 Note Purchase Agreement shall be, and the same hereby is,
amended by deleting the word “Subsidiaries” in the first line of such Section
and replacing it with the phrase “Restricted Subsidiaries” and by deleting the
word “Subsidiary” in the fifth line of such Section and replacing it with the
phrase “Restricted Subsidiary”.

     

    Section 1.8.  
Amendment to Section 9.4 of
the 2005 Note Purchase Agreement.   Section 9.4 of the
2005 Note Purchase Agreement shall be, and the same hereby is, amended and
restated in its entirety to read as follows:

     

    9.4   Payment of Taxes and
Claims

     

    The Obligors will, and Vectren will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and, assessments, charges and levies have become due
and payable and before they have become delinquent and all claims for which sums
have become due and payable that have or might become a Lien on properties or
assets of the Company, Vectren or any Subsidiary, provided that neither of the
Obligors nor any such Subsidiary need pay any such tax or, assessment, charge,
levy or claim if (i)  the


    
      
         


      

      
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    amount,
applicability or validity thereof is contested by such Obligor or such
Subsidiary on a timely basis in good faith and in appropriate proceedings, and
such Obligor or such Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of such Obligor or such Subsidiary or (ii)
 the nonpayment of all such taxes, assessments, charges, levies and claims
in the aggregate would not have a Material Adverse Effect.

     

    Section 1.9   Amendment to Section 9.5 of the 1997
Note Purchase Agreement.     Section 9.5 of the
1997 Note Purchase Agreement shall be, and the same hereby is, amended and
restated in its entirety to read as follows:


     

     

    9.5  
Entity Existence, Etc.  

     

    Subject to Section 10.2, the
Obligors will at all times preserve and keep in full force and effect their
existences as a corporation, partnership or limited liability company, and
Vectren will at all times preserve and keep in full force and effect the
existence of each of its Restricted Subsidiaries as a corporation, partnership
or limited liability company (unless merged into Vectren or a Wholly Owned
Subsidiary) and all rights and franchises of the Obligors and such Restricted
Subsidiaries unless, in the good faith judgment of Vectren, the termination of
or failure to preserve and keep in full force and effect the existence of any
such Restricted Subsidiary (other than the Company), or any such right or
franchise would not, individually or in the aggregate, have a Material Adverse
Effect.

     

    Section 1.10.  
Amendment to Section 9.6 of
the 1997 Note Purchase Agreement.     Section
9.6 of the 1997 Note Purchase Agreement shall be, and the same hereby is,
amended and restated in its entirety to read as follows:

     

    


     

    9.6  
[Intentionally Omitted.]

     

    Section 1.11.   Amendment
to Section 9.7 of the 1997 Note Purchase
Agreement.    Section 9.7 of the 1997 Note Purchase
Agreement shall be, and the same hereby is, amended and restated in its entirety
to read as follows:

     

    


     

    9.7  
Line of Business. 

     

    Vectren will not and will not permit
any Restricted Subsidiary to engage in any business if, as a result, the general
nature of the business in which Vectren and its Restricted Subsidiaries, taken
as a whole, would then be engaged would be substantially changed from the
general nature of the business in which Vectren and its Restricted Subsidiaries,
taken as a whole, are engaged on the Second Amendment Effective
Date.

     

    Section 1.12.  
Amendment to Section 9.8 of
the 1997 Note Purchase Agreement.  Section 9.8 of the 1997 Note
Purchase Agreement shall be, and hereby is, amended by adding the phrase “the
obligations under the Bank Credit Agreements and with” immediately following the
phrase


    
      
         


      

      
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    “will
rank in right of payment either pari passu with or senior to” in the first
sentence in such Section 9.8.

     

    Section 1.13.  
Amendment to Section 9 of the
1997 Note Purchase Agreement.     Section 9 of
the 1997 Note Purchase Agreement shall be, and the same hereby is, amended by
adding a new Section 9.10, Section 9.11 and Section 9.12 immediately following
Section 9.9 to read as follows:

     

    


     

    9.10  
Designation of Subsidiaries.

     

    Vectren may from time to time cause any
Subsidiary (other than any Permanent Restricted Subsidiary) to be designated as
an Unrestricted Subsidiary or any Unrestricted Subsidiary to be designated a
Restricted Subsidiary; provided, however, that at the time of such designation
and immediately after giving effect thereto, (a) no Default or Event of Default
would exist under the terms of this Agreement, (b) Vectren could incur $1.00 of
additional Indebtedness under the limitations in Section 10.7 hereof, and (c)
Vectren and its Restricted Subsidiaries would be in compliance with all of the
covenants set forth in this Section 9 and Section 10 if tested on the date of
such action and provided, further, that once a Subsidiary has been designated an
Unrestricted Subsidiary, it shall not thereafter be redesignated as a Restricted
Subsidiary on more than one occasion and once a Subsidiary has been designated a
Restricted Subsidiary, it shall not thereafter be redesignated as an
Unrestricted Subsidiary on more than one occasion.  Within ten (10)
days following any designation described above, Vectren will deliver to you a
notice of such designation accompanied by a certificate signed by a Senior
Financial Officer of Vectren certifying compliance with all requirements of this
Section 9.10 and setting forth all information required in order to establish
such compliance.

     

    9.11  
Subsidiary Guarantors.

     

    (a)    The Company will
cause any Subsidiary which becomes obligated for, or otherwise guarantees,
Indebtedness in respect of the Bank Credit Agreements, to deliver to each of the
holders of the Notes (concurrently with the incurrence of any such obligation)
the following items:

     

    (i)           a
duly executed guaranty agreement (the “Subsidiary Guaranty”) in scope, form and
substance reasonably satisfactory to the Required Holders;

     

    (ii)           an
amendment to this Agreement, duly executed by an authorized officer of the
Company, that is satisfactory in scope, form and substance to the Required
Holders, incorporating customary events of default for the Subsidiary Guarantors
and the Subsidiary Guaranty;

     

    (iii)           a
certificate signed by an authorized Responsible Officer of the Company making
representations and warranties to the effect of those contained in
Sections 5.2, 5.4(c) and (d), 5.6 and 5.7, with respect to such Subsidiary
and the Subsidiary Guaranty, as applicable; and


    
      
         


      

      
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    (iv)           an
opinion of counsel (who may be in-house counsel for the Company) addressed to
each of the holders of the Notes satisfactory to the Required Holders, to the
effect that the Subsidiary Guaranty by such Person has been duly authorized,
executed and delivered and that the Subsidiary Guaranty constitutes the legal,
valid and binding contract and agreement of such Person enforceable in
accordance with its terms, except as an enforcement of such terms may be limited
by bankruptcy, insolvency, fraudulent conveyance and similar laws affecting the
enforcement of creditors’ rights generally and by general equitable
principles.

     

    (b)           The
holders of the Notes agree to discharge and release any Subsidiary Guarantor
from the Subsidiary Guaranty upon the written request of the Company, provided
that (i) such Subsidiary Guarantor has been released and discharged (or
will be released and discharged concurrently with the release of such Subsidiary
Guarantor under the Subsidiary Guaranty) as an obligor and guarantor under and
in respect of the Bank Credit Agreements and the Company so certifies to the
holders of the Notes in a certificate of a Responsible Officer, (ii) at the
time of such release and discharge, the Company shall deliver a certificate of a
Responsible Officer to the holders of the Notes stating that no Default or Event
of Default exists, and (iii) if any fee or other form of consideration is
given to any holder of Indebtedness of the Company for the purpose of such
release, holders of the Notes shall receive equivalent
consideration.

     

    9.12  
Books and Records.  

     

    Vectren will, and will cause each of
its Subsidiaries to, maintain proper books of record and account in conformity
with GAAP and all applicable requirements of any Governmental Authority having
legal or regulatory jurisdiction over Vectren or such Subsidiary, as the case
may be.

     

    Section 1.14  
Amendment to Section
10.1 of the 1997 Note Purchase Agreement.    Section
10.1 of the 1997 Note Purchase Agreement shall be, and the same hereby is,
amended and restated in its entirety to read as follows:

     

    


     

    10.1   Transactions with
Affiliates

     

    Vectren and the Company will not enter
into directly or indirectly any transaction or group of related transactions
(including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate,
except in the ordinary course and pursuant to the reasonable requirements of
such Obligor’s business and upon fair and reasonable terms no less favorable to
such Obligor than would be obtainable in a comparable arm’s length transaction
with a Person not an Affiliate; provided that nothing in this Section 10.1 shall
limit (i) the making of capital contributions by Vectren or any Subsidiary or
Affiliate of Vectren to any other Affiliate or Subsidiary of Vectren, (ii) the
payment of dividends or distributions by any Subsidiary or Affiliate of Vectren
to Vectren or any other Affiliate or Subsidiary of Vectren, or (iii) the Company
in the ordinary course of its business advancing funds to other Subsidiaries of
Vectren.


    
      
         


      

      
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    Section 1.15.  
Amendment to Section
10.2 of the 1997 Note Purchase Agreement.    Section
10.2 of the 1997 Note Purchase Agreement shall be, and the same hereby is,
amended and restated in its entirety to read as follows:

     

    10.2  
Merger, Consolidation, Etc.  

     

    Neither Obligor shall, nor, except as
otherwise permitted under Section 10.8, shall any Obligor permit any
Restricted Subsidiary of Vectren to, consolidate with or merge with any other
Person or convey, transfer, or lease all or substantially all of its assets in a
single transaction or series of transactions to any Person unless:

     

    (a)           the
successor formed by such consolidation or the survivor of such merger, or the
Person that acquires by conveyance, transfer or lease all or substantially all
of such assets as an entirety, as the case may be (the “Successor Corporation”),
shall be a solvent business entity organized and existing under the laws of the
United States or any State thereof (including the District of Columbia), and, if
such Obligor is a party to such transaction and is not the Successor
Corporation, such Successor Corporation shall have executed and delivered to
each holder of any Notes its assumption of the due and punctual performance and
observance of each covenant and condition of this Agreement, an opinion of
nationally recognized independent counsel, to the effect that all agreements or
instruments effecting such assumption are enforceable in accordance with their
terms, the Guarantee and the Notes, as applicable; and

     

    (b)           prior
to and immediately after giving effect to such transaction, no Default or Event
of Default shall have occurred and be continuing;

     

    provided, however, that, notwithstanding the
provisions of this Section 10.2, a Restricted Subsidiary may merge with and
into Vectren or another Restricted Subsidiary of Vectren.

     

    No such
conveyance, transfer or lease of all or substantially all of the assets of any
Obligor shall have the effect of releasing such Obligor or any Successor
Corporation that shall theretofore have become such in the manner prescribed in
this Section 10.2 from its liability under this Agreement or the
Guarantee.

     

    This
provisions of this Section 10.2 shall not limit the rights of the holders of
Notes under Section 8.9. 

     

    Section 1.16.  
Amendment to Section 10.3 of
the 1997 Note Purchase Agreement.    Section 10.3 of
the 1997 Note Purchase Agreement shall be, and the same hereby is, amended and
restated in its entirety to read as follows:

     

    10.3  
[Intentionally Omitted.]


    
      
         


      

      
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    Section 1.17.  
Amendment to Section 10.4 of
the 1997 Note Purchase Agreement.    Section 10.4 of the
1997 Note Purchase Agreement shall be, and the same hereby is, amended and
restated in its entirety to read as follows:

     

    10.4  
Liens.  

     

    Neither Obligor will, or permit any
Restricted Subsidiary to, create, assume, incur or suffer to exist any Lien upon
or with respect to any Property of the Company, Vectren or any Restricted
Subsidiaries except:

     

    (a)           Liens
for taxes, assessments or governmental charges or levies on its Property if the
same shall not at the time be delinquent or thereafter can be paid without
penalty, or are being contested in good faith and by appropriate proceedings and
for which adequate reserves in accordance with GAAP shall have been set aside on
its books;

     

    (b)           Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and other
similar liens arising in the ordinary course of business which secure payment of
obligations not more than 60 days past due, and such other carriers’,
warehousemen’s, mechanics’ or other similar liens that are being contested in
good faith and by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;

     

    (c)           Liens
arising out of pledges or deposits under worker’s compensation laws,
unemployment insurance, old age pensions, or other social security or retirement
benefits, or similar legislation or to secure bid, performance, surety or
similar bonds utilized in the ordinary course of business;

     

    (d)           utility
easements, building restrictions and such other encumbrances or charges against
real property as are of a nature generally existing with respect to properties
of a similar character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in the business of
Vectren or its Subsidiaries;

     

    (e)           existing
Liens (including Liens securing Indebtedness of a Person existing on the date
the Person becomes a Restricted Subsidiary of Vectren (other than any Restricted
Subsidiary that was designated pursuant to Section 9.10 that was previously an
Unrestricted Subsidiary) or Liens on assets securing Indebtedness assumed by
Vectren or a Restricted Subsidiary of Vectren when such assets are acquired by
Vectren or a Restricted Subsidiary of Vectren), including extensions, renewals
or replacements of any such Liens in connection with the extension, renewal or
replacement of any related existing Indebtedness (without any increase in the
amount thereof, but including the full amount of any existing commitments to
provide credit that were undrawn at such time of such extension, renewal or
replacement); provided that in connection with the refinancing of any such
existing Indebtedness such Liens shall extend only to the property covered by
such Liens immediately prior to such extension, renewal or
replacement;


    
      
         


      

      
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    (f)           Liens
under the Mortgage Indenture on the property of Southern Indiana Gas and
Electric Company that is subject to the Mortgage Indenture (without giving
effect to any amendments thereto after the date hereof that would expand the
description of the collateral subject to the lien thereof);

     

    (g)           Liens
in favor of Vectren, the Company or a Restricted Subsidiary securing
intercompany Indebtedness or other obligations owed to Vectren, the Company or a
Restricted Subsidiary by a Restricted Subsidiary;

     

    (h)           Liens
incurred after the Closing Date given to secure the payment of the purchase
price incurred in connection with the acquisition, construction or improvement
of property (other than accounts receivable or inventory) useful and intended to
be used in carrying on the business of Vectren or a Restricted Subsidiary,
including Liens existing on such property at the time of acquisition or
construction thereof or Liens incurred within 360 days of such acquisition or
completion of such construction or improvement, provided that (i) the Lien
shall attach solely to the property acquired, purchased, constructed or
improved; (ii) at the time of acquisition, construction or improvement of
such property (or, in the case of any Lien incurred within three hundred sixty
(360) days of such acquisition or completion of such construction or
improvement, at the time of the incurrence of the Indebtedness secured by such
Lien), the aggregate amount remaining unpaid on all Indebtedness secured by
Liens on such property, whether or not assumed by Vectren or a Restricted
Subsidiary, shall not exceed the lesser of (y) the cost of such
acquisition, construction or improvement or (z) the Fair Market Value of
such property (as determined in good faith by one or more officers of Vectren to
whom authority to enter into the transaction has been delegated by the board of
directors of Vectren); and (iii) at the time of such incurrence and after
giving effect thereto, no Default or Event of Default would exist;
and

     

    (i)           in
addition to Liens covered by (a)–(h) above, Liens securing Indebtedness not
exceeding 15% of Consolidated Net Worth in the aggregate outstanding at any
time; provided that no such Liens may secure Indebtedness under the Bank Credit
Agreements unless the Indebtedness is secured on an equal and ratable basis with
the Notes pursuant to a written agreement that is in scope, form and substance
satisfactory to the Required Holders.

     

    Section 1.18.  
Amendment to Section 10.6 of
the 1997 Note Purchase Agreement.    Section 10.6 of
the 1997 Note Purchase Agreement shall be, and the same hereby is, amended and
restated in its  ntirety to read as follows:

     

    


     

    10.6  
Indebtedness.

     

    Vectren
will not permit, determined as of the end of each of its fiscal quarters, the
ratio of Total Debt to Total Capitalization to exceed the Maximum
Ratio.

     

    Section 1.19.  
Amendment to Section 10 of the
1997 Note Purchase Agreement.    Section 10 of the
1997 Note Purchase Agreement shall be, and the same hereby is, amended by adding
a


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


     

    new
Section 10.8, Section 10.9 and Section 10.10  immediately following
Section 10.8 to read as follows:

     

    


     

    10.8  
Sales of Assets.

     

    Other
than in connection with a conveyance, transfer or lease of all or substantially
all of the assets of Vectren or the Company made in compliance with the
provisions of Section 10.2, Vectren
will not, and will not permit any Restricted Subsidiary to, sell, lease or
otherwise dispose of any substantial part (as defined below) of the assets of
Vectren and its Restricted Subsidiaries; provided, however, that Vectren or any
Restricted Subsidiary may sell, lease or otherwise dispose of assets
constituting a substantial part of the assets of Vectren and its Restricted
Subsidiaries if such assets are sold in an arms length transaction and, at such
time and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing, and an amount equal to the Net Proceeds received
from such sale, lease or other disposition (but only with respect to that
portion of such assets that exceeds the definition of “substantial part” set
forth below) shall be used within 18 months of such sale, lease or disposition,
in any combination:

     

    (1)                 to
acquire productive assets used or useful in carrying on the business of Vectren
and its Restricted Subsidiaries and having a value at least equal to the value
of such assets sold, leased or otherwise disposed of; and/or

     

    (2)                 to
prepay or retire Senior Indebtedness of Vectren and/or its Restricted
Subsidiaries, provided that (i) Vectren shall offer to prepay each
outstanding Note in a principal amount which equals the Ratable Portion for such
Note, and (ii) any such prepayment of the Notes shall be made at 100% of
the principal amount thereof, together with accrued interest thereon to the date
of such prepayment, but without the payment of the Make-Whole
Amount.  Any offer of prepayment of the Notes pursuant to this
Section 10.6 shall be given to each holder of the Notes by written notice
that shall be delivered not less than fifteen (15) days and not more than sixty
(60) days prior to the proposed prepayment date.  Each such notice
shall state that it is given pursuant to this Section and that the offer set
forth in such notice must be accepted by such holder in writing and shall also
set forth (i) the prepayment date, (ii) a description of the
circumstances which give rise to the proposed prepayment and (iii) a
calculation of the Ratable Portion for such holder’s Notes.  Each
holder of the Notes which desires to have its Notes prepaid shall notify Vectren
in writing delivered not less than five (5) Business Days prior to the proposed
prepayment date of its acceptance of such offer of
prepayment.  Prepayment of Notes pursuant to this Section 10.8
shall be made in accordance with Section 8.2 (but without payment of the
Make-Whole Amount).

     

    As used
in this Section 10.8, a sale, lease or other disposition of assets shall be
deemed to be a “substantial
part” of the assets of Vectren and its Restricted Subsidiaries if the
book value of such assets, when added to the book value of all other assets
sold, leased or otherwise disposed of by Vectren and its Restricted Subsidiaries
during the period of 12 consecutive months ending on the date of such sale,
lease or other disposition, exceeds 15% of the book value of consolidated total
assets of Vectren and its Restricted Subsidiaries, determined as of the end of
the fiscal quarter immediately


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


     

    preceding
such sale, lease or other disposition; provided that there shall be excluded
from any determination of a “substantial part” any (i) sale or disposition
of assets in the ordinary course of business of Vectren and its Restricted
Subsidiaries, (ii) any transfer of assets from Vectren to any Restricted
Subsidiary or from any Restricted Subsidiary to Vectren or a Restricted
Subsidiary, and (iii) any sale or transfer of property acquired by Vectren or
any Restricted Subsidiary after the date of this Agreement to any Person within
365 days following the acquisition or construction of such property by Vectren
or any Restricted Subsidiary if Vectren or a Restricted Subsidiary shall
concurrently with such sale or transfer, lease such property, as
lessee.

     

    10.9  
Restricted Subsidiary Group.

     

    Vectren will require that either
(i) the consolidated total assets of Vectren and its Restricted
Subsidiaries as of the end of each fiscal quarter equal at least 80% of the
consolidated total assets of Vectren and its Subsidiaries, determined in
accordance with GAAP, or (ii) the consolidated total revenues of Vectren
and its Restricted Subsidiaries, determined as of the end of each fiscal quarter
for the four (4) consecutive fiscal quarters then ended, equal at least 80% of
the consolidated total revenues of Vectren and its Subsidiaries during such
period, in each case determined in accordance with GAAP.

     

    10.10  
Terrorism Sanctions Regulations.  

     

    Vectren will not and will not permit
any Subsidiary to (a) become a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign
Assets Control or in Section 1 of the Anti-Terrorism Order or
(b) engage in any dealings or transactions with any such
Person.

     

    Section 1.20.  
Amendment to Section 11
of the 1997 Note Purchase Agreement.  Sections 11(c), 11(f),
11(g), 11(h) and 11(i) of the 1997 Note Purchase Agreement shall be, and the
same hereby are, amended and restated in their entirety to read as
follows:

     

    (c)           default
shall be made by either Obligor in the performance of or compliance with any
term contained in Section 7.1(e) or Section 10.2 through 10.9, inclusive, or by
Vectren in the performance of the Vectren Guarantee; or

     

    (f)           failure
of Vectren or any of its Restricted Subsidiaries to pay when due (whether at
stated maturity, on the date fixed for prepayment, by acceleration or otherwise)
any Indebtedness (other than Non-Recourse Indebtedness) aggregating in excess of
$75,000,000 (“Material
Indebtedness”); or the default by Vectren or any of its Restricted
Subsidiaries in the performance (beyond the applicable grace period with respect
thereto, if any) of any term, provision or condition contained in any agreement
under which any such Material Indebtedness (other than Non-Recourse
Indebtedness) was created or is governed, or any other event shall occur or
condition exist, the effect of which default or event is to cause, or to permit
the holder or holders of such Material Indebtedness (other than Non-Recourse
Indebtedness) to cause, such Material Indebtedness to become due prior to its
stated maturity (other than pursuant to
customary


    
      
         


      

      
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    “due-on-sale” or
similar clauses, or as a result of the occurrence of a change in control
similar to Section 8.9 hereof); or any Material Indebtedness (other than
Non-Recourse Indebtedness) of Vectren or any of its Restricted Subsidiaries
shall be declared to be due and payable or required to be prepaid or repurchased
(other than by a regularly scheduled payment or pursuant to customary
“due-on-sale” or similar clauses, or as a result of the occurrence of a change
in control similar to Section 8.9 hereof), prior to the stated maturity thereof;
or Vectren or any of its Restricted Subsidiaries shall not pay, or admit in
writing its inability to pay, its debts generally as they become due;
or

     

    (g)           Vectren
or any of its Restricted Subsidiaries shall (i) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it or
substantially all of its assets, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it,
(v) take any corporate or other organizational action to authorize or
effect any of the foregoing actions set forth in this subsection (g) or
(vi) fail to contest in good faith any appointment or proceeding described in
subsection (h) below; or

     

    (h)           without
the application, approval or consent of Vectren or any of its Restricted
Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for Vectren or any of its Restricted Subsidiaries or
substantially all of its assets, or a proceeding described in
subsection (g)(iv) above shall be instituted against Vectren or any of its
Restricted Subsidiaries and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 60 consecutive
days; or

     

    (i)           a
final judgment or judgments for the payment of money aggregating in excess of
$75,000,000 are rendered against one or more of Vectren and its Restricted
Subsidiaries and which judgments are not, within 60 days after entry thereof,
bonded, discharged or stayed pending appeal, or are not discharged within 60
days after the expiration of such stay; or

     

    Section 1.21.  
Amendment to Section 17.2 of
the 1997 Note Purchase Agreement.  Section 17.2 of the 1997
Note Purchase Agreement shall be, and hereby is, amended by adding the following
new Section 17.2(c) at the end of Section 17.2:

     

    (c)           Consent in Contemplation of
Transfer.  Any consent made pursuant to this
Section 18 by the holder of any Note that has transferred or has
agreed to transfer such Note to either
Obligor, any Subsidiary or any Affiliate of either Obligor and has provided or
has agreed to provide such written consent as a condition to such transfer shall
be void and of no force or effect except solely as to such holder, and any
amendments effected or waivers granted or to be effected or granted that would
not have been or would not be so effected or granted but for such
consent


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


     

    (and the consents of all other holders of Notes that
were acquired under the same or similar
conditions) shall be void and of no force or effect except solely as to such
transferring holder.

     

    Section 1.22.  
Amendment to Section 22 of the
1997 Note Purchase Agreement.  Section 22 of the 1997 Note
Purchase Agreement shall be, and hereby is, amended by adding the following new
Section 22.7 immediately following Section 22.6:

     

    22.7  
Waiver of Jury Trial.

     

    The
parties hereto hereby waive trial by jury in any action brought on or with
respect to this Agreement, the Notes or any other document executed in
connection herewith or therewith.

     

    Section 1.23.  Amendments to Schedule B to the 1997
Note Purchase Agreement.

     

    (a)           The
following definitions are hereby inserted in alphabetical order in Schedule B to
the 1997 Note Purchase Agreement:

     

    “Bank Credit Agreements” means
(i) that certain Credit Agreement dated as of November 10, 2005 among the
Company, Vectren, the Lenders signatory thereto, Fifth Third Bank, U.S. Bank
National Association and Wachovia Bank, N.A., as Co-Documentation Agents,
JPMorgan Chase Bank, N.A., as Syndication Agent, LaSalle Bank National
Association, as Administrative Agent and LC Issuer, and J.P. Morgan Securities,
Inc. and LaSalle Bank National Association, as Joint Lead Arrangers and
Bookrunners, and (ii) that certain Credit Agreement dated as of September
11, 2008 among the Company, Vectren, the Lenders signatory thereto, JPMorgan
Chase Bank, N.A. and Union Bank of California, N.A., as Co-Syndication Agents,
Bank of America, N.A., as Administrative Agent and LC Issuer and Banc of America
Securities LLC, as Lead Arranger and Book Runner, in each case, as such
agreement may be hereafter amended, modified, restated, supplemented,
refinanced, increased or reduced from time to time, and any successor credit
agreement or similar facilities.

     

    “Change in Control” is defined
in Section 8.9(h).

     

    “Control Event” is defined in
Section 8.9(i).

     

    “Fair Market Value” means, at
any time and with respect to any property, the sale value of such property that
would be realized in an arm’s-length sale at such time between an informed and
willing buyer and an informed and willing seller (neither being under a
compulsion to buy or sell), as reasonably determined in the good faith opinion
of Vectren’s board of directors.

     

    “Maximum Ratio” means 65%,
provided that if the maximum ratio of Vectren’s (a) Consolidated
Indebtedness (as defined in the Bank Credit Agreements), to (b) the sum
Vectren’s Consolidated Indebtedness plus Consolidated Net Worth (as such terms
are defined in the Bank Credit Agreements) permitted to exist under the Bank
Credit Agreements (currently §6.17 of the Bank Credit Agreements) shall be
changed to a percentage higher or lower than 65%, then the


    
      
         


      

      
        14

        
          

        

      

      
         


      

    


     

    Maximum
Ratio shall be so changed to the same percentage automatically without any
consent required by the holders of Notes, provided further that the Maximum
Ratio shall not exceed a ratio higher than 70%.

     

    “Net Proceeds” means the
aggregate cash proceeds received by Vectren or any of the Restricted
Subsidiaries, as the case may be, in respect of any sale, lease or disposition
of assets, net of the direct costs relating to such sale, lease or disposition
(including, without limitation, out of pocket legal, accounting and investment
banking fees, and sales commissions), and taxes paid or payable as a result
thereof (after taking into account any available tax credits or
deductions).

     

    “Permanent Restricted
Subsidiaries” means each of the Company, Vectren Utility Holdings, and
each Subsidiary of Vectren Utility Holdings.

     

    “Proposed Prepayment Date” is
defined in Section 8.9(c).

     

    “Ratable Portion” means, with
respect to any Note, an amount equal to the product of (x) the amount equal to
the Net Proceeds being so applied to the prepayment of Senior Indebtedness in
accordance with Section 10.6(2), multiplied by (y) a fraction the numerator
of which is the outstanding principal amount of such Note and the denominator of
which is the aggregate principal amount of Senior Indebtedness of the Company
and its Restricted Subsidiaries being prepaid pursuant to
Section 10.6(2).

     

    “Restricted Subsidiary” means
any Subsidiary of Vectren or a Restricted Subsidiary which Vectren has not
designated an Unrestricted Subsidiary by notice in writing given to the holders
of the Notes in accordance with Section 9.10.  Each of the Permanent
Restricted Subsidiaries shall at all times remain a Restricted
Subsidiary.

     

    “Second Amendment Effective
Date” means March 11, 2009.

     

    “Senior Indebtedness” means,
as of the date of any determination thereof, all Total Debt, other than
Subordinated Indebtedness.

     

    “Subordinated Indebtedness”
means all unsecured Indebtedness of Vectren or its Restricted Subsidiaries which
shall contain or have applicable thereto subordination provisions providing for
the subordination thereof to other Indebtedness of Vectren and its Restricted
Subsidiaries (including, without limitation, subordination to the obligations of
Vectren and the Company under this Agreement or the Notes).

     

    “Subsidiary Guarantor” means
each Subsidiary which is party to the Subsidiary Guaranty.

     

    “Subsidiary Guaranty” is
defined in Section 9.11.

     

    “Successor Corporation” is
defined in Section 10.2(a).


    
      
         


      

      
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    “Unrestricted Subsidiary”
means any Subsidiary (other than the Permanent Restricted Subsidiaries) of
Vectren so designated by Vectren in accordance with Section 9.10.

     

    (b)           The
definitions of Affiliate, Company, Consolidated Net Worth, Environmental Laws,
Guaranty, Material Adverse Effect, Non-Recourse Indebtedness, PUHCA, and Total
Debt in Schedule B to the 1997 Note Purchase Agreement are hereby amended and
restated in their entirety to read as follows:

     

    “Affiliate” means, at any
time, and with respect to any Person, (a) any other Person that at such
time directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first Person, and
(b) any Person beneficially owning or holding, directly or indirectly, 10%
or more of any class of voting or equity interests of either Obligor or any
Subsidiary or any Person of which Vectren and its Subsidiaries beneficially own
or hold, in the aggregate, directly or indirectly, 10% or more of any class of
voting or equity interests.  As used in this definition, “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.  Unless the
context otherwise clearly requires, any reference to an “Affiliate” is a
reference to an Affiliate of Vectren.

     

    “Company” means Vectren
Capital, Corp., an Indiana corporation, or any successor thereto that shall have
become such in the manner prescribed in Section 10.2.

     

    “Consolidated Net Worth” means
at any time the consolidated stockholders’ equity of Vectren and its Restricted
Subsidiaries calculated on a consolidated basis as of such time in accordance
with GAAP.

     

    “Environmental Laws” means any
and all Federal, state, local, and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to
pollution and the protection of the environment or the release of any materials
into the environment, including but not limited to those related to Hazardous
Materials.

     

    “Guaranty” means, with respect
to any Person, any obligation (except the endorsement in the ordinary course of
business of negotiable instruments for deposit or collection and obligations
which are not Indebtedness) of such Person guaranteeing or in effect
guaranteeing any Indebtedness or dividend of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such
Person:

     

    (a)           to
purchase such Indebtedness or obligation or any property constituting security
therefor;


    
      
         


      

      
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    (b)           to
advance or supply funds (i) for the purchase or payment of such
Indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any other
Person or otherwise to advance or make available funds for the purchase or
payment of such Indebtedness or obligation;

     

    (c)           to
lease properties or to purchase properties or services primarily for the purpose
of assuring the owner of such Indebtedness or obligation of the ability of any
other Person to make payment of the Indebtedness or obligation; or

     

    (d)           otherwise
to assure the owner of such Indebtedness or obligation against loss in respect
thereof.

     

    In any
computation of the Indebtedness or other liabilities of the obligor under any
Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.

     

    “Material Adverse Effect”
means a material adverse effect on (a) the business, operations, affairs,
financial condition, assets or properties of Vectren and its Restricted
Subsidiaries taken as a whole, or (b) the ability of the Company or Vectren
to perform its respective obligations under this Agreement, the Notes or the
Vectren Guarantee, or (c) the validity or enforceability of this Agreement,
the Notes or the Vectren Guarantee.

     

    “Non-Recourse Indebtedness”
means, except as expressly provided to the contrary herein,
(i) Indebtedness of any Person that in accordance with GAAP would not be
included as a liability on a balance sheet of such Person and
(ii) Indebtedness of any Subsidiary of a Person which in accordance with
GAAP would not be included as a liability on the consolidated balance sheet of
such Person.

     

    “PUHCA” means the Public
Utility Holding Company Act of 2005, as amended.

     

    “Total Debt” at any time means
all Indebtedness of Vectren and its Restricted Subsidiaries at such time
determined on a consolidated basis in accordance with GAAP.

     

    (c)           The
definitions of Material Subsidiary, Proposed Transaction SIGECO Successor, and
Tangible Net Worth are hereby deleted from Schedule B to the 1997 Note Purchase
Agreement:

     

    SECTION
II.   REPRESENTATIONS.

     

    Section
2.1   Representations and Warranties.

     

     Each
of the Company and Vectren represents and warrants to each Holder as follows as
of the date hereof:

     

    (a)           Each
of the Company and Vectren is a corporation duly organized and validly existing
under the laws of its jurisdiction of incorporation, and is duly qualified
as


    
      
         


      

      
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    a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.  Each of the Company and Vectren has the corporate power and
authority to own or hold under lease the properties it purports to own or hold
under lease, to transact the business it transacts and proposes to transact, to
execute and deliver this Second Amendment, and to perform the provisions hereof
and thereof.

     

    (b)           This
Second Amendment has been duly authorized by all necessary corporate action on
the part of the Company, and this Second Amendment and the 1997 Note Purchase
Agreement as amended by this Second Amendment constitute legal, valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms, and this Second Amendment has been duly authorized by all
necessary corporate action on the part of Vectren and this Second Amendment and
the 1997 Note Purchase Agreement as amended by this Second Amendment constitute
legal, valid and binding obligations of Vectren enforceable against Vectren in
accordance with their terms, except, in each case, as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors’ rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

     

    (c)           The
execution, delivery and performance by the Company and Vectren of this Second
Amendment, and the performance by the Company and Vectren of the 1997 Note
Purchase Agreement, as amended by this Second Amendment,  will not (i)
contravene, result in any breach of, or constitute a default under, or result in
the creation of any Lien in respect of any property of the Company or Vectren,
as the case may be, or any Subsidiary, under any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or by-laws,
or any other agreement or instrument to which the Company, Vectren or any
Subsidiary is bound or by which the Company, Vectren or any Subsidiary or any of
their respective properties may be bound or affected, (ii) conflict with or
result in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Company, Vectren or any Subsidiary or (iii) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company, Vectren or any Subsidiary (including,
without limitation, PUHCA or the Federal Power Act, as amended).

     

    (d)           No
consent, approval or authorization of, or registration, filing or declaration
with, any Governmental Authority is required in connection with the execution,
delivery or performance by the Company or Vectren of this Second Amendment
(including, without limitation, any thereof under PUHCA or the Federal Power
Act, as amended).

     

    (e)           After
giving effect to this Second Amendment, no Default or Event of Default under the
1997 Note Purchase Agreement will have occurred and be continuing as of the
effective date of this Second Amendment, and the Company and Vectren will be in
compliance with all of the terms and conditions of the 1997 Note Purchase
Agreement, as amended.


    
      
         


      

      
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    (f)           The
total assets of SIGECO account for more than 15% of the consolidated total
assets of Vectren and its Restricted Subsidiaries.

     

    SECTION
III.   CONDITIONS TO EFFECTIVENESS.

     

    The
effectiveness of this Second Amendment shall be subject to the fulfillment prior
to or on the Second Amendment Closing Date of the following
conditions:

     

    Section
3.1.   Opinion of Counsel.

     

     The
Holders shall have received an opinion in form and substance satisfactory to the
Holders, dated the Second Amendment Closing Date, from Barnes & Thornburg
LLP, Indiana counsel for the Obligors, covering the matters set forth in Exhibit
A.

     

    Section
3.2.   Proceedings and Documents.

     

     All
corporate and other proceedings in connection with the transactions contemplated
by this Second Amendment and all documents and instruments incident to such
transactions shall be satisfactory to the Holders, and the Holders shall have
received all such counterpart originals or certified or other copies of such
documents as such Holder may reasonably request.

     

    Section 3.3.   Related
Matters.

     

     As
of the Second Amendment Closing Date, each of the Holders and the Obligors shall
have executed and delivered this Second Amendment.

     

    Section
3.4.   Payment of Special Counsel Fees.  The
Company shall have paid on or before the Second Amendment Closing Date the fees,
charges and disbursements of Chapman and Cutler LLP, the Holders’ special
counsel.

     

    SECTION
IV.   MISCELLANEOUS.

     

    Section
4.1.   Reference to 1997 Note Purchase Agreement and
Notes.

     

     Any
and all notices, requests, certificates and other instruments may refer to the
1997 Note Purchase Agreement without making specific reference to this Second
Amendment, but nevertheless all such references shall be deemed to include this
Second Amendment unless the context shall otherwise require.

     

    Section
4.2.   Ratification of the 1997 Note Purchase
Agreement.

     

     This
Second Amendment shall be construed in connection with and as a part of the 1997
Note Purchase Agreement, and all terms, conditions and covenants contained in
the 1997 Note Purchase Agreement, except as herein modified, shall be and remain
in full force and effect and the terms and provisions thereof are hereby
ratified and approved.  References in the 1997 Note Purchase Agreement
to “this Agreement” and to words such as “herein”, “hereinafter”, “hereof”,
“hereunder” and any words of similar import shall refer to the 1997 Note
Purchase Agreement as amended by this Second Amendment.

     

    Section
4.3.   Counterparts.

     

     This
Second Amendment may be executed in any number of counterparts, each of which
shall be an original but all of which together shall constitute one
instrument.  Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

     

    Section
4.4.   Governing Law.

     

     This
Second Amendment shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of
New


    
      
         


      

      
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    York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such
State.

     

    [Signature
pages immediately follow.]


    
      
         


      

      
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    Upon
acceptance of this Second Amendment by each of the Holders and the satisfaction
of the conditions set forth herein, this Second Amendment shall become effective
and the 1997 Note Purchase Agreement shall be amended as herein set forth, such
amendment to be effective as of the Second Amendment Closing Date.

     

    


    
      	 
      	
              VECTREN
      CAPITAL, CORP.

            
	 
      	 
      
	 
      	
              By:

            	
              /s/
      Robert L. Goocher

            
	 
      	
              Name:  Robert
      L. Goocher

            
	 
      	
              Title:  V.P.,
      Treasurer and Asst. Secretary

            
	 
      	 
      	 
      
	 
      	 
      
	 
      	
              VECTREN
      CORPORATION

            
	 
      	 
      
	 
      	
              By:

            	
              /s/
      Robert L. Goocher

            
	 
      	
              Name:  Robert
      L. Goocher

            
	 
      	
              Title:  V.P.
      and Treasurer

            


    

    



    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    


     

    The
foregoing is hereby agreed to as of the date hereof.

    


     

    
      	 
      	
              METROPOLITAN
      LIFE INSURANCE COMPANY

            
	 
      	 
      
	 
      	
              By:

            	
              /s/
      Evan C. Thorne

            
	 
      	
              Name:  Evan
      C. Thorne

            
	 
      	
              Title:  Managing
      Director