Document:

vc_8k0311ex45.htm

    
      
        

      

    

    
      

    

    

     

    

    Vectren
Capital, Corp.

    

    $30,000,000
6.37% Guaranteed Senior Notes, Series A due March 11, 2014

    $60,000,000
6.92% Guaranteed Senior Notes, Series B due March 11, 2016

    $60,000,000
7.30% Guaranteed Senior Notes, Series C due March 11, 2019

     

     

    Unconditionally
Guaranteed by

     

    Vectren
Corporation

     

    Note
Purchase Agreement

     

    Dated as
of: March 11, 2009

    

    

    
       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    Table
of Contents

     

    

      
        
          	
                  SECTION

                	 
      	 
      	
                  PAGE

                
	 
      	 
      	 
      	 
      
	
                  SECTION
      1.

                	
                  AUTHORIZATION
      OF NOTES

                	
                  1

                
	 
      	 
      	 
      	 
      
	
                  SECTION
      2.

                	
                  SALE
      AND PURCHASE OF NOTES

                	
                  1

                
	 
      	 
      	 
      	 
      
	
                  SECTION
      3.

                	
                  CLOSING

                	
                  2

                
	 
      	 
      	 
      	 
      
	
                  SECTION
      4.

                	
                  CONDITIONS
      TO CLOSING

                	
                  2

                
	 
      	 
      	 
      	 
      
	
                  Section
      4.1.

                	 
      	
                  Representations
      and Warranties

                	
                  2

                
	
                  Section
      4.2.

                	 
      	
                  Performance;
      No Default

                	
                  2

                
	
                  Section
      4.3.

                	 
      	
                  Compliance
      Certificates

                	
                  3

                
	
                  Section
      4.4.

                	 
      	
                  Opinions
      of Counsel

                	
                  3

                
	
                  Section
      4.5.

                	 
      	
                  Purchase
      Permitted By Applicable Law, Etc

                	
                  3

                
	
                  Section
      4.6.

                	 
      	
                  Sale
      of Other Notes

                	
                  3

                
	
                  Section
      4.7.

                	 
      	
                  Payment
      of Special Counsel Fees

                	
                  3

                
	
                  Section
      4.8.

                	 
      	
                  Private
      Placement Numbers

                	
                  4

                
	
                  Section
      4.9.

                	 
      	
                  Changes
      in Corporate Structure

                	
                  4

                
	
                  Section
      4.10.

                	 
      	
                  Funding
      Instructions.

                	
                  4

                
	
                  Section
      4.11.

                	 
      	
                  Proceedings
      and Documents

                	
                  4

                
	 
      	 
      	 
      	 
      
	
                  SECTION
      5.

                	
                  REPRESENTATIONS
      AND WARRANTIES OF THE OBLIGORS

                	
                  4

                
	 
      	 
      	 
      	 
      
	
                  Section
      5.1.

                	 
      	
                  Organization;
      Power and Authority

                	
                  4

                
	
                  Section
      5.2.

                	 
      	
                  Authorization,
      Etc

                	
                  4

                
	
                  Section
      5.3.

                	 
      	
                  Disclosure

                	
                  5

                
	
                  Section
      5.4.

                	 
      	
                  Organization
      and Ownership of Shares of Subsidiaries; Affiliates

                	
                  5

                
	
                  Section
      5.5.

                	 
      	
                  Financial
      Statements

                	
                  6

                
	
                  Section
      5.6.

                	 
      	
                  Compliance
      with Laws, Other Instruments, Etc

                	
                  6

                
	
                  Section
      5.7.

                	 
      	
                  Governmental
      Authorizations, Etc

                	
                  6

                
	
                  Section
      5.8.

                	 
      	
                  Litigation;
      Observance of Agreements, Statutes and Orders

                	
                  6

                
	
                  Section
      5.9.

                	 
      	
                  Taxes

                	
                  7

                
	
                  Section
      5.10.

                	 
      	
                  Title
      to Property; Lease

                	
                  7

                
	
                  Section
      5.11.

                	 
      	
                  Licenses,
      Permits, Etc

                	
                  7

                
	
                  Section
      5.12.

                	 
      	
                  Compliance
      with ERISA

                	
                  8

                
	
                  Section
      5.13.

                	 
      	
                  Private
      Offering by the Company

                	
                  9

                
	
                  Section
      5.14.

                	 
      	
                  Use
      of Proceeds; Margin Regulations

                	
                  9

                
	
                  Section
      5.15.

                	 
      	
                  Existing
      Indebtedness; Future Liens

                	
                  9

                
	
                  Section
      5.16.

                	 
      	
                  Foreign
      Assets Control Regulations and Foreign or Enemy Status

                	
                  10

                
	
                  Section
      5.17.

                	 
      	
                  Status
      under Certain Statutes

                	
                  10

                
	
                  Section
      5.18.

                	 
      	
                  Environmental
      Matters

                	
                  10

                
	
                  Section
      5.19.

                	 
      	
                  Ranking

                	
                  11

                

        

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    SECTION
      6.

                                  	
                                    REPRESENTATIONS
      OF THE PURCHASER

                                  	
                                    11

                                  
	 	 	 	 
	
                                    Section
      6.1.

                                  	 
      	
                                    Purchase
      for Investment

                                  	
                                    11

                                  
	
                                    Section
      6.2.

                                  	 
      	
                                    Source
      of Funds

                                  	
                                    11

                                  
	 
      	 
      	 
      	 
      
	
                                    SECTION
      7.

                                  	
                                    INFORMATION

                                  	
                                    13

                                  
	 	 	 
	
                                    Section
      7.1.

                                  	 
      	
                                    Financial
      and Business Information

                                  	
                                    13

                                  
	
                                    Section
      7.2.

                                  	 
      	
                                    Officer’s
      Certificate

                                  	
                                    15

                                  
	
                                    Section
      7.3.

                                  	 
      	
                                    Inspection

                                  	
                                    16

                                  
	
                                    Section
      7.4.

                                  	 
      	
                                    Information
      Required by Rule 144A

                                  	
                                    16

                                  
	 
      	 
      	 
      	 
      
	
                                    SECTION
      8.

                                  	
                                    PREPAYMENT
      OF THE NOTES

                                  	
                                    16

                                  
	 	 	 
	
                                    Section
      8.1.

                                  	 
      	
                                    Maturity

                                  	
                                    16

                                  
	
                                    Section
      8.2.

                                  	 
      	
                                    Optional
      Prepayments with Make Whole Amount

                                  	
                                    16

                                  
	
                                    Section
      8.3.

                                  	 
      	
                                    Allocation
      of Certain Partial Prepayments

                                  	
                                    17

                                  
	
                                    Section
      8.4.

                                  	 
      	
                                    Maturity;
      Surrender, Etc

                                  	
                                    17

                                  
	
                                    Section
      8.5.

                                  	 
      	
                                    Purchase
      of Notes

                                  	
                                    17

                                  
	
                                    Section
      8.6.

                                  	 
      	
                                    Make
      Whole Amount

                                  	
                                    17

                                  
	
                                    Section
      8.7.

                                  	 
      	
                                    Change
      in Control

                                  	
                                    19

                                  
	 
      	 
      	 
      	 
      
	
                                    SECTION
      9.

                                  	
                                    AFFIRMATIVE
      COVENANTS

                                  	
                                    21

                                  
	 	 	 
	
                                    Section
      9.1.

                                  	 
      	
                                    Compliance
      with Law

                                  	
                                    21

                                  
	
                                    Section
      9.2.

                                  	 
      	
                                    Insurance

                                  	
                                    21

                                  
	
                                    Section
      9.3.

                                  	 
      	
                                    Maintenance
      of Properties

                                  	
                                    21

                                  
	
                                    Section
      9.4.

                                  	 
      	
                                    Payment
      of Taxes and Claims

                                  	
                                    21

                                  
	
                                    Section
      9.5.

                                  	 
      	
                                    Entity
      Existence, Etc

                                  	
                                    22

                                  
	
                                    Section
      9.6.

                                  	 
      	
                                    Books
      and Records

                                  	
                                    22

                                  
	
                                    Section
      9.7.

                                  	 
      	
                                    Ranking

                                  	
                                    22

                                  
	
                                    Section
      9.8.

                                  	 
      	
                                    Designation
      of Subsidiaries

                                  	
                                    22

                                  
	
                                    Section
      9.9.

                                  	 
      	
                                    Subsidiary
      Guarantors

                                  	
                                    22

                                  
	 
      	 
      	 
      	 
      
	
                                    SECTION
      10.

                                  	
                                    NEGATIVE
      COVENANTS

                                  	
                                    23

                                  
	 	 	 
	
                                    Section
      10.1.

                                  	 
      	
                                    Transactions
      with Affiliates

                                  	
                                    23

                                  
	
                                    Section
      10.2

                                  	 
      	
                                    Merger,
      Consolidation, Etc

                                  	
                                    24

                                  
	
                                    Section
      10.3.

                                  	 
      	
                                    Line
      of Business

                                  	
                                    24

                                  
	
                                    Section
      10.4.

                                  	 
      	
                                    Terrorism
      Sanctions Regulations

                                  	
                                    25

                                  
	
                                    Section
      10.5.

                                  	 
      	
                                    Liens

                                  	
                                    25

                                  
	
                                    Section
      10.6.

                                  	 
      	
                                    Sales
      of Asset

                                  	
                                    26

                                  
	
                                    Section
      10.7.

                                  	 
      	
                                    Indebtedness

                                  	
                                    27

                                  
	
                                    Section
      10.8.

                                  	 
      	
                                    Restricted
      Subsidiary Group

                                  	
                                    27

                                  
	 
      	 
      	 
      	 
      
	
                                    SECTION
      11.

                                  	
                                    GUARANTEE

                                  	
                                    28

                                  
	 	 	 
	
                                    Section
      11.1.

                                  	 
      	
                                    Guarantee

                                  	
                                    28

                                  
	
                                    Section
      11.2.

                                  	 
      	
                                    Successors
      and Assigns

                                  	
                                    29

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            
              
                
                  
                    	
                            Section
      11.3.

                          	 
      	
                            No
      Waiver

                          	
                            30

                          
	
                            Section
      11.4.

                          	 
      	
                            Modification

                          	
                            30

                          
	
                            Section
      11.5.

                          	 
      	
                            Non
      Impairment

                          	
                            30

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      12.

                          	
                            EVENTS
      OF DEFAULT

                          	
                            30

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      13.

                          	
                            REMEDIES
      ON DEFAULT, ETC

                          	
                            32

                          
	 	 	 
	
                            Section
      13.1.

                          	 
      	
                            Acceleration

                          	
                            32

                          
	
                            Section
      13.2.

                          	 
      	
                            Other
      Remedies

                          	
                            33

                          
	
                            Section
      13.3.

                          	 
      	
                            Rescission

                          	
                            33

                          
	
                            Section
      13.4.

                          	 
      	
                            No
      Waivers or Election of Remedies, Expenses, Etc

                          	
                            33

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      14.

                          	
                            REGISTRATION;
      EXCHANGE; SUBSTITUTION OF NOTES

                          	
                            34

                          
	 	 	 
	
                            Section
      14.1.

                          	 
      	
                            Registration
      of Notes

                          	
                            34

                          
	
                            Section
      14.2.

                          	 
      	
                            Transfer
      and Exchange of Notes

                          	
                            34

                          
	
                            Section
      14.3.

                          	 
      	
                            Replacement
      of Notes

                          	
                            34

                          
	
                            Section
      14.4.

                          	 
      	
                            Legend

                          	
                            35

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      15.

                          	
                            PAYMENTS
      ON NOTES

                          	
                            35

                          
	 	 	 
	
                            Section
      15.1.

                          	 
      	
                            Place
      of Payment

                          	
                            35

                          
	
                            Section
      15.2.

                          	 
      	
                            Home
      Office Payment

                          	
                            35

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      16.

                          	
                            EXPENSES,
      ETC

                          	
                            36

                          
	 	 	 
	
                            Section
      16.1.

                          	 
      	
                            Transaction
      Expenses

                          	
                            36

                          
	
                            Section
      16.2.

                          	 
      	
                            Survival

                          	
                            36

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      17.

                          	
                            SURVIVAL
      OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT

                          	
                            36

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      18.

                          	
                            AMENDMENT
      AND WAIVER

                          	
                            37

                          
	 	 	 
	
                            Section
      18.1.

                          	 
      	
                            Requirements

                          	
                            37

                          
	
                            Section
      18.2.

                          	 
      	
                            Solicitation
      of Holders of Notes

                          	
                            37

                          
	
                            Section
      18.3.

                          	 
      	
                            Binding
      Effect, Etc

                          	
                            37

                          
	
                            Section
      18.4.

                          	 
      	
                            Notes
      held by Obligor, Etc

                          	
                            38

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      19.

                          	
                            NOTICES

                          	
                            38

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      20.

                          	
                            REPRODUCTION
      OF DOCUMENTS

                          	
                            38

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      21.

                          	
                            CONFIDENTIAL
      INFORMATION

                          	
                            39

                          
	 
      	 
      	 
      	 
      
	
                            SECTION
      22.

                          	
                            SUBSTITUTION
      OF PURCHASER

                          	
                            40

                          

                  

                

              

            

          

        

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        
          
            
              	
                      SECTION
      23.

                    	 
      MISCELLANEOUS	
                      40

                    
	 	 	 
	
                      Section
      23.1.

                    	 
      	
                      Successors
      and Assigns

                    	
                      40

                    
	
                      Section
      23.2.

                    	 
      	
                      Payments
      Due on Non Business Days

                    	
                      40

                    
	
                      Section
      23.3.

                    	 
      	
                      Accounting
      Terms

                    	
                      40

                    
	
                      Section
      23.4.

                    	 
      	
                      Severability

                    	
                      41

                    
	
                      Section
      23.5.

                    	 
      	
                      Construction

                    	
                      41

                    
	
                      Section
      23.6.

                    	 
      	
                      Counterparts

                    	
                      41

                    
	
                      Section
      23.7.

                    	 
      	
                      Governing
      Law

                    	
                      41

                    
	
                      Section
      22.8.

                    	 
      	
                      Waiver
      of Jury Trial

                    	
                      41

                    
	 
      	 
      	 
      	 
      

            

          

        

      

    

     

    
      
        	
                SCHEDULE
      A

              	
                —

              	
                Information
      Relating to Purchasers

              
	
                SCHEDULE
      B

              	
                —

              	
                Defined
      Terms

              
	
                SCHEDULE
      5.4

              	
                —

              	
                Organization
      and Ownership of Shares of Subsidiaries; Affiliates

              
	
                SCHEDULE
      5.11

              	
                —

              	
                Licenses,
      Permits, Etc.

              
	
                SCHEDULE
      5.15

              	
                —

              	
                Existing
      Indebtedness; Future Liens

              
	
                EXHIBIT
      1 A

              	
                —

              	
                Form
      of 6.37% Guaranteed Senior Notes, Series A due March 11,
    2014

              
	
                EXHIBIT
      1 B

              	
                —

              	
                Form
      of 6.92% Guaranteed Senior Notes, Series B due March 11,
    2016

              
	
                EXHIBIT
      1 C

              	
                —

              	
                Form
      of 7.30% Guaranteed Senior Notes, Series C due March 11,
    2019

              
	
                EXHIBIT
      4.4(a)(i)

              	
                —

              	
                Form
      of Opinion of Indiana Counsel for the Company and the
      Guarantor

              
	
                EXHIBIT
      4.4(a)(ii)

              	
                —

              	
                Form
      of Opinion of Ohio Counsel for the Company

              
	
                EXHIBIT
      4.4(b)

              	
                —

              	
                Form
      of Opinion of Special Counsel for the
Purchasers

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Vectren
Capital, Corp.

    

    One
Vectren Square

    Evansville,
Indiana 47708

    

    $30,000,000
6.37% Guaranteed Senior Notes, Series A due March 11, 2014

    $60,000,000
6.92% Guaranteed Senior Notes, Series B due March 11, 2016

    $60,000,000
7.30% Guaranteed Senior Notes, Series C due March 11, 2019

     

    Unconditionally
Guaranteed by

     

    Vectren
Corporation

    

    As of
March 11, 2009

    To
Each of the Purchasers Listed in

    the Attached Schedule A:

     

    Ladies
and Gentlemen:

     

    Vectren
Capital, Corp., an Indiana corporation (the “Company”), and Vectren
Corporation, an Indiana corporation (“Vectren” and, together with
the Company, the “Obligors”), agree with each
of the purchasers whose names appear at the end hereof (each, a “Purchaser” and,
collectively, the “Purchasers”) as
follows:

     

    
      	
              Section 1.

            	
              Authorization
      of Notes.

            

    

     

    The
Company will authorize the issue and sale, in three series, of $150,000,000
aggregate principal amount of its senior notes, of which $30,000,000 aggregate
principal amount shall be its 6.37% Guaranteed Senior Notes, Series A due
March 11, 2014 (the “Series A Notes”),
$60,000,000 aggregate principal amount shall be its 6.92% Guaranteed Senior
Notes, Series B due March 11, 2016 (the “Series B Notes”) and
$60,000,000 aggregate principal amount shall be its 7.30% Guaranteed Senior
Notes, Series C due March 11, 2019 (the “Series C Notes”, and
together with the Series A Notes and the Series B Notes, the “Notes”, such term to include
any such notes issued in substitution therefor pursuant to
Section 14).  The Series A Notes, the Series B Notes
and the Series C Notes shall be substantially in the forms set out in
Exhibits 1-A, 1-B and 1-C, respectively.  Due and punctual payment of
the Guaranteed Obligations (as defined herein) will be unconditionally
guaranteed by Vectren (the “Guarantee”) as set forth in
this Agreement.  Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a “Schedule” or an “Exhibit” are, unless
otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.

     

    
      	
              Section 2. 
      

            	
              Sale
      and Purchase of Notes.

            

    

     

    Subject
to the terms and conditions of this Agreement, the Company will issue and sell
to each Purchaser, and each Purchaser will purchase from the Company, at the
Closing provided for 

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

       

      in
Section 3, Notes of the respective series and in the principal amount
specified opposite such Purchaser’s name in Schedule A at the purchase price of
100% of the principal amount thereof.  The Purchasers’ obligations
hereunder are several and not joint obligations, and no Purchaser shall have any
liability to any Person for the performance or non-performance of any obligation
by any other Purchaser hereunder.

    

     

    
      	
              Section 3. 
      

            	
              Closing.

            

    

     

    The sale
and purchase of the Notes to be purchased by each Purchaser shall occur at the
offices of Chapman and Cutler LLP, 111 W. Monroe Street, Chicago, Illinois 60603
at 10:00 a.m., Chicago time, at a closing (the “Closing”) on March 11, 2009
or on such other Business Day thereafter as may be agreed upon by the Company
and the Purchasers.  At the Closing the Company will deliver to each
Purchaser the Notes to be purchased by such Purchaser in the form of a single
Note for each series to be purchased by such Purchaser (or such greater number
of Notes in denominations of at least $1,000,000, or any amount in excess
thereof which is an integral multiple of $250,000, as such Purchaser may
request) dated the date of the Closing and registered in such Purchaser’s name
(or in the name of its nominee), against delivery by such Purchaser to the
Company or its order of immediately available funds in the amount of the
purchase price therefor by wire transfer of immediately available funds for the
account of the Company to account number 5800169103 at Bank of America, N.A.,
New York, New York, ABA No. 026009593. If
at the Closing the Company shall fail to tender such Notes to any Purchaser as
provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to such Purchaser’s satisfaction,
such Purchaser shall, at its election, be relieved of all further obligations
under this Agreement, without thereby waiving any rights such Purchaser may have
by reason of such failure or such nonfulfillment.

     

    
      	
              Section 4.

            	
              Conditions
      to Closing.

            

    

     

    Each
Purchaser’s obligation to purchase and pay for the Notes to be sold to such
Purchaser at the Closing is subject to the fulfillment to such Purchaser’s
satisfaction, prior to or at the Closing, of the following
conditions:

     

    Section 4.1.  Representations and
Warranties.  The representations and warranties of the Obligors
in this Agreement shall be correct when made and at the time of the Closing,
except for failures to be so correct which individually or in the aggregate
could not reasonably be expected to result in a Material Adverse Effect; provided, however, that
representations and warranties containing a Material Adverse Effect or other
materiality qualifier shall be correct in all respects.

     

    Section 4.2.  Performance; No
Default.  Each Obligor shall have performed and complied with
all agreements and conditions contained in this Agreement required to be
performed or complied with by it prior to or at the Closing and after giving
effect to the issue and sale of the Notes (and the application of the proceeds
thereof as contemplated by Section 5.14) no Default or Event of Default
shall have occurred and be continuing.  Neither the Company nor
Vectren (as applicable) shall have entered into any transaction since the date
of the Memorandum (as defined herein) that would have been prohibited by
Section 10.1, 10.2, 10.5, 10.6, 10.7 or 10.8 hereof had such Sections
applied since such date.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    Section 4.3.Compliance
Certificates.

     

    (a) 
Officer’s
Certificate.  Each Obligor shall have delivered to such
Purchaser an Officer’s Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.

     

    (b) 
Secretary’s
Certificate.  Each Obligor shall have delivered to such
Purchaser a certificate of its Secretary or Assistant Secretary, dated the date
of the Closing, certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
this Agreement and the Notes (in the case of the Company) and of this Agreement
and the Guarantee (in the case of Vectren).

     

    Section 4.4.  Opinions of
Counsel.  Such Purchaser shall have received opinions in form
and substance satisfactory to such Purchaser, dated the date of the Closing
(a) from (i) Barnes & Thornburg LLP, Indiana counsel for the
Obligors and (ii) Kegler, Brown, Hill and Ritter, Ohio counsel for the
Obligors, or other law firm reasonably acceptable to Purchasers, covering the
matters set forth in Exhibits 4.4(a)(i), and (ii), respectively, and covering
such other matters incident to the transactions contemplated hereby as such
Purchaser or its counsel may reasonably request (and the Obligors hereby
instruct their counsel to deliver such opinions to the Purchasers) and
(b) from Chapman and Cutler LLP, the Purchasers’ special counsel in
connection with such transactions, substantially in the form set forth in
Exhibit 4.4(b) and covering such other matters incident to such transactions as
such Purchaser may reasonably request.

     

    Section 4.5.  Purchase Permitted By Applicable
Law, Etc.  On the date of the Closing such Purchaser’s purchase
of Notes shall (i) be permitted by the laws and regulations of each
jurisdiction to which such Purchaser is subject, without recourse to provisions
(such as section 1405(a)(8) of the New York Insurance Law) permitting limited
investments by insurance companies without restriction as to the character of
the particular investment, (ii) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (iii) not subject such
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date
hereof.  If requested by such Purchaser, such Purchaser shall have
received an Officer’s Certificate from Vectren certifying as to such matters of
fact as such Purchaser may reasonably specify to enable such Purchaser to
determine whether such purchase is so permitted.

     

    Section 4.6.  Sale of Other
Notes.  Contemporaneously with the Closing the Company shall
sell to each other Purchaser and each other Purchaser shall purchase the Notes
to be purchased by it at the Closing as specified in Schedule A.

     

    Section 4.7.  Payment of Special Counsel
Fees.  Without limiting the provisions of Section 16.1,
the Company shall have paid on or before the Closing the fees, charges and
disbursements of the Purchasers’ special counsel referred to in Section 4.4
to the extent reflected in a statement of such counsel rendered to the Company
at least one Business Day prior to the Closing.

     

    
      
        
        

      

      
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    Section 4.8.  Private Placement
Numbers.  A Private Placement Number issued by Standard &
Poor’s CUSIP Service Bureau (in cooperation with the Securities Valuation Office
of the National Association of Insurance Commissioners) shall have been obtained
for each series of Notes.

     

    Section 4.9.  Changes in Corporate
Structure.  Neither Obligor shall have changed its jurisdiction
of incorporation or been a party to any merger or consolidation or succeeded to
all or any substantial part of the liabilities of any other entity, at any time
following the date hereof.

     

    Section 4.10. 
Funding
Instructions..  At least three
Business Days prior to the date of the Closing, each Purchaser shall have
received written instructions signed by a Responsible Officer on letterhead of
the Company confirming the information specified in Section 3 including
(i) the name and address of the transferee bank, (ii) such transferee
bank’s ABA number and (iii) the account name and number into which the
purchase price for the Notes is to be deposited.

     

    Section 4.11. 
Proceedings and
Documents.  All corporate and other proceedings in connection
with the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be reasonably satisfactory to
such Purchaser and its special counsel, and such Purchaser and its special
counsel shall have received all such counterpart originals or certified or other
copies of such documents as such Purchaser or such special counsel may
reasonably request.

     

    
      	
              Section 5. 
      

            	
              Representations
      and Warranties of the Obligors.

            

    

     

    Each of
the Company and Vectren represents and warrants to each Purchaser (only to the
extent applicable to itself and, if specified, its Subsidiaries) as follows as
of the date hereof or, if the representation or warranty speaks as of a
different date, as of such date:

     

    Section 5.1.  Organization; Power and
Authority.  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 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 Agreement and
the Notes (in the case of the Company) and this Agreement and the Guarantee (in
the case of Vectren), and to perform the provisions hereof and
thereof.

     

    Section 5.2.  Authorization,
Etc.  This Agreement and the Notes have been duly authorized by
all necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, and this Agreement and the Guarantee have
been duly authorized by all necessary corporate action on the part of Vectren
and constitute legal, valid and binding obligations of 

     

    
      
        
        

      

      
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      Vectren
enforceable against Vectren in accordance with their respective 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).

    

     

    Section 5.3.  Disclosure.  The
Company and Vectren, through their agent, Banc of America Securities LLC, have
delivered to each Purchaser a copy of a Private Placement Memorandum, dated
February 2009 (including the SEC Reports incorporated by reference therein, the
“Memorandum”), relating
to the transactions contemplated hereby.  The Memorandum fairly
describes, in all material respects, the general nature of the business and
principal properties of the Company, Vectren and the Restricted
Subsidiaries.  This Agreement, the Memorandum (including the financial
statements contained in the SEC Reports) and the documents, certificates or
other writings delivered to the Purchasers by or on behalf of the Company or
Vectren, as applicable, in connection with the transactions contemplated hereby
(this Agreement, the Memorandum and such documents, certificates or other
writings delivered to each Purchaser being referred to, collectively, as the
“Disclosure
Documents”), taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made.  Except as disclosed in the Disclosure Documents delivered
to the Purchasers on or prior to the date of this Agreement, since December 31,
2008, there has been no change in the financial condition, operations, business,
properties or prospects of the Company, Vectren or any Restricted Subsidiary
except changes that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.  There is no fact known to
the Company or Vectren that would reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Disclosure
Documents.

     

    Section 5.4.  Organization and Ownership of Shares
of Subsidiaries; Affiliates.  (a) Schedule 5.4 contains
(except as noted therein) complete and correct lists of (i) Vectren’s
Subsidiaries, showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each class of
its capital stock or similar equity interests outstanding owned by Vectren and
each other Subsidiary and whether such Subsidiary is a Restricted Subsidiary or
an Unrestricted Subsidiary, (ii) Vectren’s Affiliates, other than
Subsidiaries, and (iii) Vectren’s directors and senior
officers.

     

    (b) 
All of the outstanding shares of capital stock or similar equity interests of
each Subsidiary shown in Schedule 5.4 as being owned by Vectren and its
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by Vectren or another Subsidiary free and clear of any Lien (except as
otherwise disclosed in Schedule 5.4).

     

    (c) 
Each Subsidiary identified in Schedule 5.4 is a corporation or other legal
entity duly organized, validly existing and in good standing (to the extent
applicable) under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity 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 

     

    
      
        
        

      

      
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    such
Subsidiary has the corporate or other power and authority to own or hold under
lease the properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.

     

    (d) 
No Subsidiary is a party to, or otherwise subject to any legal, regulatory,
contractual, or other restriction (other than the agreements listed on Schedule
5.4 and customary limitations imposed by corporate law and fraudulent conveyance
statutes or similar statutes and applicable restrictions contained in section
305(a) of the Federal Power Act, as amended), restricting the ability of such
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to Vectren or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such
Subsidiary.

     

    Section 5.5.  Financial
Statements.  Vectren has delivered to each Purchaser copies of
the audited financial statements of Vectren for the years ended December 31,
2004 through December 31, 2008, inclusive.  All of said financial
statements and all of the financial statements included in the SEC Reports
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of Vectren and its
Subsidiaries as of the respective dates specified in such financial statements
and the consolidated results of their operations and cash flows for the
respective periods so specified and have been prepared in accordance with U.S.
GAAP consistently applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).  Vectren and its Subsidiaries do not
have any Material liabilities that are not disclosed on such financial
statements or otherwise disclosed in the Disclosure Documents.

     

    Section 5.6.  Compliance with Laws, Other
Instruments, Etc.  The execution, delivery and performance by
the Company of this Agreement and the Notes and by Vectren of this Agreement and
the Guarantee 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).

     

    Section 5.7.  Governmental Authorizations,
Etc.  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 of this
Agreement or the Notes or by Vectren of this Agreement or the Guarantee
(including, without limitation, any thereof under PUHCA, the Natural Gas Act or
the Federal Power Act, each as amended).

     

    Section 5.8.  Litigation; Observance of
Agreements, Statutes and Orders.  (a) There are no
actions, suits, investigations or proceedings pending or, to the knowledge of
the Company or 

     

    
      
        
        

      

      
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      Vectren,
threatened against or affecting the Company, Vectren or any Restricted
Subsidiary or any property of the Company, Vectren or any Restricted Subsidiary
in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.

    

     

    (b) 
None of the Company, Vectren or any Restricted Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws or the USA
Patriot Act) of any Governmental Authority, which default or violation,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

     

    Section 5.9.  Taxes.  Vectren and
each Subsidiary have filed all tax returns that are required to have been filed
in any jurisdiction, and have paid all taxes shown to be due and payable on such
returns and all other taxes and assessments levied upon them or their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent,
except for any taxes and assessments (i) the amount of which is not
individually or in the aggregate Material or (ii) the amount, applicability
or validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which Vectren or a Subsidiary, as the case may
be, has established adequate reserves in accordance with U.S.
GAAP.  Vectren does not know of any basis for any other tax or
assessment that would have a Material Adverse Effect.  The charges,
accruals and reserves on the books of Vectren and its Subsidiaries in respect of
taxes for all fiscal periods are adequate.  The Federal income tax
liabilities of Vectren and its Subsidiaries have been finally determined
(whether by reason of completed audits or the statute of limitations having run)
for all fiscal years up to and including the fiscal year ended December 31,
2005.

     

    Section 5.10. 
Title to Property;
Leases.  Vectren and
each Restricted Subsidiary have good and sufficient title to their respective
properties that individually or in the aggregate are Material, including all
such properties reflected in the most recent audited balance sheets referred to
in Section 5.5 or purported to have been acquired by Vectren or any
Restricted Subsidiary after said date (except as sold or otherwise disposed of
in the ordinary course of business), in each case free and clear of Liens
prohibited by this Agreement.  All leases that Vectren or any
Restricted Subsidiary is party to as lessee and that individually or in the
aggregate are Material are valid and subsisting and are in full force and effect
in all material respects.

     

    Section 5.11. 
Licenses, Permits,
Etc.  Except as disclosed in Schedule 5.11, (a) Vectren
and each Restricted Subsidiary own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, proprietary software, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of
others;

     

    (b) 
to the best knowledge of Vectren, no product or service of Vectren or any
Restricted Subsidiary infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, proprietary software, service mark,
trademark, trade name or other right owned by any other Person; and

     

    
      
        
        

      

      
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    (c) 
to the best knowledge of Vectren, there is no Material violation by any Person
of any right of Vectren or any Restricted Subsidiary with respect to any patent,
copyright, proprietary software, service mark, trademark, trade name or other
right owned or used by Vectren or any Restricted Subsidiary.

     

    Section 5.12. 
Compliance with
ERISA.  (a) Vectren and each ERISA Affiliate have operated
and administered each Plan in compliance with all applicable laws except for
such instances of noncompliance as have not resulted in and could not reasonably
be expected to result in a Material Adverse Effect.  Neither Vectren
nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to employee
benefit plans (as defined in section 3 of ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be expected to result in
the incurrence of any such liability by Vectren or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights, properties or assets of Vectren
or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to
such penalty or excise tax provisions or to section 436 or 430 of the Code or
section 4068 of ERISA, other than such liabilities or Liens as would not be
individually or in the aggregate Material.

     

    (b) 
The present value of the aggregate benefit liabilities under each of the Plans
(other than Multiemployer Plans), determined as of the end of such Plan’s most
recently ended plan year on the basis of the assumptions used in preparing the
audited financial statements included in Vectren’s Form 10-K for the fiscal year
ending December 31, 2008, did not exceed the aggregate current value of the
assets of such Plan allocable to such benefit liabilities by more than
$100,000,000.  The term “benefit liabilities” has the meaning
specified in section 4001 of ERISA and the terms “current value” and “present
value” have the meaning specified in section 3 of ERISA.

     

    (c) 
Vectren and its ERISA Affiliates have not incurred withdrawal liabilities (and
are not subject to contingent withdrawal liabilities) under section 4201 or 4204
of ERISA in respect of Multiemployer Plans that individually or in the aggregate
are Material.

     

    (d) 
The expected postretirement benefit obligation (determined as of the last day of
Vectren’s most recently ended fiscal year in accordance with Financial
Accounting Standards Board Statement No. 106, without regard to liabilities
attributable to continuation coverage mandated by section 4980B of the Code) of
Vectren and its Subsidiaries is not in an amount which could reasonably be
expected to result in a Material Adverse Effect.

     

    (e) 
The execution and delivery of this Agreement and the issuance and sale of the
Notes hereunder will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.  The
representation by Vectren to each Purchaser in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of
such Purchaser’s representation in Section 6.2 as to the sources of the
funds used to pay the purchase price of the Notes to be purchased by such
Purchaser.

     

    
      
        
        

      

      
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    Section 5.13. 
Private Offering by the
Company.  Neither the Company nor anyone acting on its behalf
has offered the Notes or any similar securities for sale to, or solicited any
offer to buy any of the same from, or otherwise approached or negotiated in
respect thereof with, any Person other than the Purchasers and not more than 50
other Institutional Investors, each of which has been offered the Notes at a
private sale for investment.  Neither the Company nor anyone acting on
its behalf has taken, or will take, any action that would subject the issuance
or sale of the Notes to the registration requirements of section 5 of the
Securities Act or to the registration requirements of any securities or blue sky
laws of any applicable jurisdiction.

     

    Section 5.14. 
Use of Proceeds; Margin
Regulations.  The Company will apply the proceeds of the sale
of the Notes to repay certain existing indebtedness of the Company and for
general corporate purposes.  No part of the proceeds from the sale of
the Notes hereunder will be used, directly or indirectly, for the purpose of
buying or carrying any margin stock within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System (12 CFR 221), or for the
purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220).  Margin stock does not
constitute more than 10% of the value of the consolidated assets of Vectren and
its Subsidiaries and Vectren does not have any present intention that margin
stock will constitute more than 10% of the value of such assets.  As
used in this Section, the terms “margin stock” and “purpose of buying or
carrying” shall have the meanings assigned to them in said Regulation
U.

     

    Section 5.15. 
Existing Indebtedness;
Future Liens.  (a) Vectren’s annual report on Form 10-K
for the year ended December 31, 2008 sets forth a complete and correct list of
all outstanding Indebtedness of Vectren and its Restricted Subsidiaries as of
its date (including a description of the obligors and obligees, principal amount
outstanding and collateral therefor, if any, and Guaranty thereof, if
any).  Since December 31, 2008 there has been no Material change in
the amounts, interest rates, sinking funds, installment payments or maturities
of the Indebtedness of Vectren or its Restricted Subsidiaries, except as
disclosed in Schedule 5.15.  None of the Company, Vectren or any
Restricted Subsidiary is in default, and no waiver of default is currently in
effect, in the payment of any principal or interest on any Indebtedness of the
Company, Vectren or such Restricted Subsidiary and no event or condition exists
with respect to any Indebtedness of the Company, Vectren or any Restricted
Subsidiary that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness to become due and
payable before its stated maturity or before its regularly scheduled dates of
payment.

     

    (b) 
Except as disclosed in Schedule 5.15, none of the Company, Vectren or any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 10.5.

     

    (c) 
Neither the Company, Vectren nor any Subsidiary is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Indebtedness of
the Company, Vectren or such Subsidiary, as applicable, any agreement relating
thereto or any other agreement 

     

    
      
        
        

      

      
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    (including,
but not limited to, its charter or other organizational document) which limits
the amount of, or otherwise imposes restrictions on the incurring of,
Indebtedness of the Company or Vectren, as applicable, except as specifically
indicated in Schedule 5.15.

     

    Section 5.16. 
Foreign Assets Control
Regulations and Foreign or Enemy Status.  (a) Neither the
sale of the Notes by the Company hereunder nor the Company’s use of the proceeds
thereof nor the issuance by Vectren of the Guarantee will violate the Trading
with the Enemy Act, as amended, or any of the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) or any enabling legislation or executive order relating
thereto.  

     

    (b) 
None of the Company, Vectren or any Subsidiary (i) is 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 (ii) engages in any dealings or transactions with any such
Person.  The Company, Vectren and its Subsidiaries are in compliance,
in all material respects, with the USA Patriot Act.

     

    (c) No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases
that such Act applies to the Company and Vectren and its
Subsidiaries.

     

    Section 5.17. 
Status under Certain
Statutes.  Neither Vectren nor any Restricted Subsidiary is an
“investment company” registered or required to be registered under the
Investment Company Act of 1940, as amended, or is subject to regulation under
PUHCA, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as
amended, other than Southern Indiana Gas & Electric Company, which is
subject to regulation under the Federal Power Act.

     

    Section 5.18.  Environmental
Matters.  (a) Neither Vectren nor any Restricted
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against Vectren or any
Restricted Subsidiary or any of their respective real properties now or formerly
owned, leased or operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except, in each case,
such as could not reasonably be expected to result in a Material Adverse
Effect.  

     

    (b) 
Neither Vectren nor any Restricted Subsidiary has knowledge of any facts which
would give rise to any claim, public or private, of violation of Environmental
Laws or damage to the environment emanating from, occurring on or in any way
related to real properties now or formerly owned, leased or operated by any of
them or to other assets or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect;

     

    (c) 
Neither Vectren nor any Restricted Subsidiary has stored any Hazardous Materials
on real properties now or formerly owned, leased or operated by any of them and
has not 

     

    
      
        
        

      

      
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      disposed
of any Hazardous Materials in a manner contrary to any Environmental Laws in
each case in any manner that could reasonably be expected to result in a
Material Adverse Effect; and

    

     

    (d) 
All buildings on all real properties now owned, leased or operated by Vectren or
any Subsidiary are in compliance with applicable Environmental Laws, except
where failure to comply could not reasonably be expected to result in a Material
Adverse Effect.

     

    Section 5.19. 
Ranking.  All
liabilities of the Company under the Notes constitute direct, unconditional and
general obligations of the Company and rank in right of payment either pari passu with or senior to all
other unsecured Indebtedness of the Company.  All liabilities of
Vectren under the Guarantee constitute direct, unconditional and general
obligations of Vectren and rank in right of payment either pari passu with or senior to all
other unsecured Indebtedness of Vectren.

     

    
      	
              Section 6. 
      

            	
              Representations
      of the Purchaser.

            

    

     

    Section 6.1.  Purchase for
Investment.  Each Purchaser severally represents that it is
purchasing the Notes for its own account or for one or more separate accounts
maintained by such Purchaser or for the account of one or more pension or trust
funds and not with a view to the distribution thereof, provided that the disposition
of such Purchaser’s or their property shall at all times be within such
Purchaser’s or their control.  Each Purchaser understands that the
Notes have not been registered under the Securities Act and may be resold only
if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that
neither Obligor is required to register the Notes.

     

    Section 6.2.  Source of
Funds.  Each Purchaser severally represents that at least one
of the following statements is an accurate representation as to each source of
funds (a “Source”) to be used by such Purchaser to pay the purchase price of the
Notes to be purchased by such Purchaser hereunder:

     

    (a) 
the Source is an “insurance company general account” (as the term is defined in
the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60 (issued July 12,
1995)) in respect of which the reserves and liabilities (as defined by the
annual statement for life insurance companies approved by the National
Association of Insurance Commissioners (the “NAIC Annual Statement”)) for
the general account contract(s) held by or on behalf of any employee benefit
plan together with the amount of the reserves and liabilities for the general
account contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-60)
or by the same employee organization in the general account do not exceed 10% of
the total reserves and liabilities of the general account (exclusive of separate
account liabilities) plus surplus as set forth in the NAIC Annual Statement
filed with such Purchaser’s state of domicile; or

     

    (b) 
the Source is a separate account that is maintained solely in connection with
such Purchaser’s fixed contractual obligations under which the amounts payable,
or 

     

    
      
        
        

      

      
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    credited,
to any employee benefit plan (or its related trust) that has any interest in
such separate account (or to any participant or beneficiary of such plan
(including any annuitant)) are not affected in any manner by the investment
performance of the separate account; or

     

    (c) 
the Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 or (ii) a bank collective investment fund,
within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser
to the Company in writing pursuant to this clause (c), no employee benefit plan
or group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or

     

    (d) 
the Source constitutes assets of an “investment fund” (within the meaning of
Part V of PTE 84-14 (the “QPAM
Exemption”)) managed by a “qualified professional asset manager” or
“QPAM” (within the meaning of Part V of the QPAM Exemption), no employee benefit
plan’s assets that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of section V(c)(1) of the
QPAM Exemption) of such employer or by the same employee organization and
managed by such QPAM, exceed 20% of the total client assets managed by such
QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
as of the last day
of its most recent calendar quarter, the QPAM does not own a
10% or more interest in the Company and no person controlling or controlled by
the QPAM (applying the definition of ÒcontrolÓ in section V(e) of the QPAM
Exemption) owns a 20% or more interest in the Company (or less than 20% but
greater than 10%, if such person exercises control over the management or
policies of the Company by reason of its ownership interest) and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed to the
Company in writing pursuant to this clause (d); or

     

    (e) 
the Source constitutes assets of a “plan(s)” (within the meaning of
section IV of PTE 96-23 (the “INHAM Exemption”)) managed
by an “in-house asset manager” or “INHAM” (within the meaning of Part IV of the
INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM
Exemption are satisfied, neither the INHAM nor a person controlling or
controlled by the INHAM (applying the definition of “control” in
section IV(d) of the INHAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such INHAM and (ii) the name(s) of the
employee benefit plan(s) whose assets constitute the Source have been disclosed
to the Company in writing pursuant to this clause (e); or

     

    (f)  the Source is a governmental
plan; or

     

    (g) 
the Source is one or more employee benefit plans, or a separate account or trust
fund comprised of one or more employee benefit plans, each of which has been
identified to the Company in writing pursuant to this clause (g);
or

     

    
      
        
        

      

      
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    (h) 
the Source does not include assets of any employee benefit plan, other than a
plan exempt from the coverage of ERISA.

     

    As used
in this Section 6.2, the terms “employee benefit plan”, “governmental
plan”, “party in interest” and “separate account” shall have the respective
meanings assigned to such terms in section 3 of ERISA.

     

    
      	
              Section 7.

            	
              Information.

            

    

     

    Section 7.1.  Financial and Business
Information.  Each of the Company and Vectren, as applicable,
shall deliver to each Holder of Notes:

     

    (a) 
Quarterly Statements —
within 60 days after the end of each quarterly fiscal period in each fiscal year
of Vectren and its Subsidiaries (other than the last quarterly fiscal period of
each such fiscal year), as the case may be, duplicate copies of,

     

    (i)  a consolidated unaudited
balance sheet of Vectren and its Subsidiaries (if any) as at the end of such
quarter, and

     

    (ii) 
consolidated statements of income, retained earnings and cash flows (and, in the
case of Vectren, common shareholders’ equity) of Vectren and its Subsidiaries
(if any), for such quarter and (in the case of the second and third quarters)
for the portion of the fiscal year ending with such quarter,

     

    setting
forth in each case in comparative form the figures for the corresponding periods
in the previous fiscal year, all in reasonable detail, prepared in accordance
with U.S. GAAP applicable to quarterly financial statements generally, and
certified by Vectren’s  Chief Financial Officer or Treasurer as fairly
presenting, in all material respects, the financial position of the companies
being reported on and their results of operations and cash flows (and, in the
case of Vectren, common shareholders’ equity), subject to changes resulting from
year-end adjustments, provided that delivery within
the time period specified above of copies of Vectren’s Quarterly Report on Form
10-Q prepared in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the requirements
of this Section 7.1(a).  The documents required pursuant to this
Section 7.1(a) may be delivered electronically and, if so delivered, shall
be deemed to have been delivered on the date on which Vectren posts such
documents, or provides a link thereto, on EDGAR or a similar service or on its
Website at http://www.vectren.com; provided that (x) upon
request of any Holder, Vectren shall deliver paper copies of such documents to
the Holder (until a written request to cease delivering paper copies is given by
the Holder) and (y) Vectren shall notify (which may be by facsimile or
electronic mail) each Holder of the posting of any documents;

     

    (b)  Annual Statements — within
120 days after the end of each fiscal year of Vectren, duplicate copies
of,

     

    
      
        
        

      

      
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    (i)   a consolidated balance
sheet of Vectren and its Subsidiaries (if any), as at the end of such year,
and

     

    (ii) 
consolidated statements of income, retained earnings and cash flows (and, in the
case of Vectren, common shareholders’ equity) of Vectren and its Subsidiaries
(if any), for such year,

     

    setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail, prepared in accordance with U.S. GAAP, and accompanied
by an opinion thereon of independent registered public accountants of recognized
national standing, which opinion shall state that such financial statements
present fairly, in all material respects, the financial position of the
companies being reported upon and their results of operations and cash flows
(and, in the case of Vectren, common shareholders’ equity) and have been
prepared in conformity with U.S. GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances. The delivery
within the time period specified above of Vectren’s Annual Report on Form 10-K
for such fiscal year (together with Vectren’s annual report to shareholders, if
any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
Section 7.1(b).  The documents required pursuant to this
Section 7.1(b) may be delivered electronically and, if so delivered, shall
be deemed to have been delivered on the date on which Vectren posts such
documents, or provides a link thereto, on EDGAR or a similar service or on its
Website at http://www.vectren.com; provided that (x) upon
request of any Holder, Vectren shall deliver paper copies of such documents to
the Holder (until a written request to cease delivering paper copies is given by
the Holder) and (y) Vectren shall notify (which may be by facsimile or
electronic mail) each Holder of the posting of any documents;

     

    (c) 
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
U.S. 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 U.S.
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);

     

    (d) 
Compliance Certificate
— together with the financial statements required under Sections 7.1(a) and (b),
a compliance certificate, signed by its Chief Financial 

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

     

    Officer
or Treasurer, showing the calculations necessary to determine compliance with
Sections 10.5, 10.6, 10.7 and 10.8 of this Agreement;

     

    (e) 
SEC and Other Reports —
promptly upon the filing thereof, one copy of (i) each financial statement,
report, notice or proxy statement sent by Vectren or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly requested by
such Holder), except for registration statements relating to employee benefit
plans or dividend reinvestment plans, and each prospectus and all amendments
thereto filed by Vectren or any Subsidiary with the Securities and Exchange
Commission.  The documents required pursuant to this Section 7.1(e)
may be delivered electronically and, if so delivered, shall be deemed to have
been delivered on the date on which Vectren posts such documents, or provides a
link thereto, on EDGAR or a similar service or on its Website at
http://www.vectren.com; provided that (x) upon
request of any Holder, Vectren shall deliver paper copies of such documents to
the Holder (until a written request to cease delivering paper copies is given by
the Holder) and (y) Vectren shall notify (which may be by facsimile or
electronic mail) each Holder of the posting of any documents;

     

    (f) 
Notice of Default or Event of
Default -- promptly, and in any event within ten Business Days after a
Responsible Officer becoming aware of the existence of any Default or Event of
Default which could reasonably be expected to have a Material Adverse Effect,
written notice specifying the nature and period of existence
thereof;

     

    (g) 
ERISA Matters —
promptly, and in any event within ten Business Days after a Responsible Officer
becoming aware that a Reportable Event has occurred with respect to any Plan, a
written notice, signed by the Chief Financial Officer or Treasurer of Vectren,
setting forth the nature thereof and the action, if any, that Vectren proposes
to take with respect thereto;

     

    (h) 
Notices from Governmental
Authority — promptly, and in any event within 30 Business Days of receipt
thereof, copies of (a) any notice or claim to the effect that Vectren or
any of its Subsidiaries is or may be liable to any Person as a result of the
release by Vectren, any of its Subsidiaries, or any other Person of any
Hazardous Material into the environment, and (b) any notice alleging any
violation of any Environmental Law by Vectren or any of its Subsidiaries, which,
in either case, could reasonably be expected to have a Material Adverse Effect;
and

     

    (i) 
Requested Information —
with reasonable promptness, such other data and information relating to the
business, operations, affairs, financial condition, assets or properties of the
Company, Vectren or any Subsidiary or relating to the ability of the Obligors to
perform their respective obligations hereunder and under the Notes and the
Guarantee as from time to time may be reasonably requested by any such Holder of
Notes.

     

    Section 7.2.  Officer’s
Certificate.  Each set of financial statements delivered to a
Holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof
shall be accompanied by a certificate 

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

     

    of the
Chief Financial Officer or Treasurer of Vectren setting forth a statement that
such officer has reviewed the relevant terms hereof and has made, or caused to
be made, under his or her supervision, a review of the transactions and
conditions of the Company or of Vectren and its Subsidiaries, as the case may
be, from the beginning of the quarterly or annual period covered by the
statements then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without limitation, any
such event or condition resulting from the failure of the Company, Vectren or
any Subsidiary to comply with any Environmental Law), specifying the nature and
period of existence thereof.

     

    Section 7.3.  Inspection.  The
Company and Vectren shall permit the representatives of each Holder of Notes
that is an Institutional Investor:

     

    (a) 
No Default — if no
Default or Event of Default then exists, at the expense of such Holder and upon
reasonable prior notice to Vectren to visit the principal executive office of
Vectren, to discuss the affairs, finances and accounts of Vectren and the
Company and their Subsidiaries with Vectren’s officers, and (with the consent of
Vectren or the Company, as the case may be, which consent will not be
unreasonably withheld) to visit the other offices and properties of Vectren and
its Subsidiaries, all at such reasonable times and as often as may be reasonably
requested in writing; and

     

    (b) 
Default — if a Default
or Event of Default then exists, at the expense of Vectren, to visit and inspect
any of the offices or properties of Vectren, the Company or any of their
respective Subsidiaries, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers, all at such times and as often as may be requested.

     

    Section 7.4.  Information Required by Rule
144A.  The Company will, upon the request of the Holder of any
Note, provide such Holder, and any qualified institutional buyer designated by
such Holder, such financial and other information as such Holder may reasonably
determine to be necessary in order to permit compliance with the information
requirements of Rule 144A under the Securities Act in connection with the resale
of Notes, except at such times as the Company is subject to the reporting
requirements of sections 13 or 15(d) of the Exchange Act.  For the
purpose of this Section 7.4, the term “qualified institutional buyer” shall
have the meaning specified in Rule 144A under the Securities Act.

     

    
      	
              Section 8. 
      

            	
              Prepayment
      of the Notes.

            

    

     

    Section 8.1.  Maturity.  As
provided therein, the entire unpaid principal amount of the Series A Notes,
the Series B Notes and the Series C Notes shall be due and payable on
March 11, 2014, March 11, 2016, and March 11, 2019, respectively.

     

    Section 8.2.  Optional Prepayments with Make-Whole
Amount.  The Company may, at its option, upon notice as
provided below, prepay at any time all, or from time to time any part of,

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

     

    any
series of the Notes, in an amount not less than 5% of the aggregate principal
amount of the Notes then outstanding in the case of a partial prepayment (or
such lesser amount as shall be required to effect a partial prepayment resulting
from an offer of prepayment pursuant to Section 10.6), at 100% of the
principal amount so prepaid, and the Make-Whole Amount determined for the
prepayment date with respect to such principal amount.  The Company
will give each Holder of Notes written notice of each optional prepayment under
this Section 8.2 not less than 30 days and not more than 60 days prior to
the date fixed for such prepayment.  Each such notice shall specify
such date (which shall be a Business Day), the aggregate principal amount of the
Notes of such series to be prepaid on such date, the principal amount of each
Note held by such Holder to be prepaid (determined in accordance with
Section 8.3), and the interest to be paid on the prepayment date with
respect to such principal amount being prepaid, and shall be accompanied by a
certificate of a Senior Financial Officer as to the estimated applicable
Make-Whole Amounts due in connection with such prepayment (calculated as if the
date of such notice were the date of the prepayment), setting forth the details
of such computation.  Two Business Days prior to such prepayment, the
Company shall deliver to each Holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amounts as of
the specified prepayment date.

     

    Section 8.3.  Allocation of Certain Partial
Prepayments.  In the case of each partial prepayment of any
series of the Notes pursuant to Section 8.2, the principal amount of the
Notes to be prepaid shall be allocated among all of the Notes (of such series)
at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment.

     

    Section 8.4.  Maturity; Surrender,
Etc.  In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid shall mature and
become due and payable on the date fixed for such prepayment (which shall be a
Business Day), together with interest on such principal amount accrued to such
date and the applicable Make-Whole Amount, if any.  From and after
such date, unless the Company shall fail to pay such principal amount when so
due and payable, together with the interest and Make-Whole Amount, if any, as
aforesaid, interest on such principal amount shall cease to
accrue.  Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

     

    Section 8.5.  Purchase of
Notes.  Neither Obligor will nor will either Obligor permit any
Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the
Notes.  The Company will promptly cancel all Notes acquired by either
Obligor or any such Affiliate pursuant to any payment or prepayment of Notes
pursuant to any provision of this Agreement and no Notes may be issued in
substitution or exchange for any such Notes.

     

    Section 8.6.  Make-Whole
Amount.  The term “Make-Whole Amount” means,
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that the Make-Whole
Amount may in no event be less 

     

    
      
        
        

      

      
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    than
zero.  For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:

     

    “Called Principal” means,
with respect to any Note, the principal of such Note that is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately due
and payable pursuant to Section 13.1, as the context requires.

     

    “Discounted Value” means,
with respect to the Called Principal of any Note, the amount obtained by
discounting all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the Settlement Date with
respect to such Called Principal, in accordance with accepted financial practice
and at a discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with respect
to such Called Principal.

     

    “Reinvestment Yield” means,
0.50% plus the yield to maturity calculated by using (i) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business
Day preceding the Settlement Date on screen “PX-1” on the Bloomberg Financial
Market Service (or such other display as may replace Page PX1) on Bloomberg for
the most recently issued actively traded on the run U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or (ii) if such yields are not reported as of
such time or the yields reported as of such time are not ascertainable
(including by way of interpolation), the Treasury Constant Maturity Series
Yields reported, for the latest day for which such yields have been so reported
as of the second Business Day preceding the Settlement Date, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such Settlement
Date.

     

    In the
case of each determination under clause (i) or clause (ii), as the case may
be, of the preceding paragraph, such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and
(b) interpolating linearly between (1) the applicable U.S. Treasury
security with the maturity closest to and greater than such Remaining Average
Life and (2) the applicable U.S. Treasury security with the maturity
closest to and less than such Remaining Average Life.  The
Reinvestment Yield shall be rounded to the number of decimal places as appears
in the interest rate of the applicable Note.

     

    “Remaining Average Life”
means, with respect to any Called Principal, the number of years (calculated to
the nearest one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by multiplying
(a) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (b) the number of years (calculated to
the nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.

     

    
      
        
        

      

      
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    “Remaining Scheduled
Payments” means, with respect to the Called Principal of any Note, all
payments of such Called Principal and interest thereon that would be due after
the Settlement Date with respect to such Called Principal if no payment of such
Called Principal were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be made
under the terms of the Notes, then the amount of the next succeeding scheduled
interest payment will be reduced by the amount of interest accrued to such
Settlement Date and required to be paid on such Settlement Date pursuant to
Section 8.2 or 13.1.

     

    “Settlement Date” means, with
respect to the Called Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 13.1, as the
context requires.

     

    Section 8.7.  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 8.7.  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 8.7 and shall be accompanied by the
certificate described in subparagraph (g) of this Section 8.7.

     

    (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 8.7, accompanied by the certificate
described in subparagraph (g) of this Section 8.7, and
(ii) contemporaneously with such action, it prepays all Notes required to
be prepaid in accordance with this Section 8.7.

     

    (c) 
Offer to Prepay
Notes.  The offer to prepay Notes contemplated by subparagraphs
(a) and (b) of this Section 8.7 shall be an offer to prepay, in accordance
with and subject to this Section 8.7, 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 8.7, 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 8.7 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 8.7 shall be
deemed to constitute a rejection of such offer by such Holder.

     

    
      
        
        

      

      
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    (e) 
Prepayment.  Prepayment
of the Notes to be prepaid pursuant to this Section 8.7 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 8.7.

     

    (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 8.7 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 8.7 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 8.7 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 8.7; (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 8.7 have been fulfilled; and (vi) in reasonable
detail, the nature and date or proposed date of the Change in
Control.

     

    (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.

     

    
      
        
        

      

      
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              Section 9.

            	
              Affirmative
      Covenants.

            

    

     

    Each of
the Company and Vectren covenants (only to the extent applicable to itself and,
if specified, its Subsidiaries) that from and after the Closing and for so long
as any of the Notes are outstanding:

     

    Section 9.1.  Compliance with
Law.  The Obligors will, and Vectren will cause each of its
Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
ERISA, the USA Patriot Act, Environmental Laws, and will obtain and maintain in
effect all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.

     

    Section 9.2.  Insurance.  The
Obligors will, and Vectren will cause each of its Restricted Subsidiaries to,
maintain, with financially sound and reputable insurers, insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.

     

    Section 9.3.  Maintenance of
Properties.  The Obligors will, and Vectren will cause each of
its Restricted Subsidiaries to, maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, provided that this Section
shall not prevent either Obligor or any such Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and Vectren has
concluded that such discontinuance would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect.

     

    Section 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, 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,
assessment, charge, levy or claim if (i) the 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 

     

    
      
        
        

      

      
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    therefor
in accordance with U.S. 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 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 9.6.  Books and
Records.  Vectren will, and will cause each of its Subsidiaries
to, maintain proper books of record and account in conformity with U.S. 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 9.7.  Ranking.  The
Company will ensure that, at all times, all liabilities of the Company under the
Notes will rank in right of payment either pari passu with or senior to
the obligations under the Bank Credit Agreements and with all other unsecured
Indebtedness of the Company.  Vectren will ensure that, at all times,
all liabilities of Vectren under the Guarantee will rank in right of payment
either pari passu with
or senior to all other unsecured Indebtedness of Vectren.

     

    Section 9.8.  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 each Holder 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 9.8 and setting forth all
information required in order to establish such compliance.

     

    Section 9.9.  Subsidiary Guarantors.  (a) The Company will
cause any Subsidiary which becomes obligated for, or otherwise guarantees,
Indebtedness in respect of the Bank Credit 

     

    
      
        
        

      

      
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    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

     

    (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. 

     

    Section 10.    Negative
Covenants.

     

    Each of
the Company and Vectren covenants (only to the extent applicable to itself and,
if specified, its Subsidiaries) that from and after the Closing and for so long
as any of the Notes are outstanding:

     

    Section 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 

     

    
      
        
        

      

      
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    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.

     

    Section 10.2  Merger, Consolidation,
Etc.  Neither Obligor shall, nor, except as otherwise permitted
under Section 10.6, 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.

     

    The
provisions of this Section 10.2 shall not limit the rights of the Holders of
Notes under Section 8.7.

     

    Section 10.3. 
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 date of this Agreement as described as of the date hereof in
the Memorandum.

     

    
      
        
        

      

      
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    Section 10.4. 
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 10.5. 
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 U.S. 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 U.S. 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 9.8 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;

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

     

    (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;
or

     

    (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 10.6. 
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

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    “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 10.6
shall be made in accordance with Section 8.2 (but without payment of the
Make-Whole Amount).  

     

    As used
in this Section 10.6, 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 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.

     

    Section 10.7. 
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 10.8.  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 

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

     

    quarter
equal at least 80% of the consolidated total assets of Vectren and its
Subsidiaries, determined in accordance with U.S. 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 U.S. GAAP.

     

    
      	
              Section 11. 
      

            	
              Guarantee.

            

    

     

    Section 11.1. 
Guarantee.
(a) Vectren irrevocably guarantees, as primary obligor and not merely as
surety, (i) the full and punctual payment when due, whether at stated
maturity, by acceleration, or otherwise, of all obligations of the Company under
this Agreement and the Notes, whether for payment of principal of or interest on
the Notes and all other monetary obligations of the Company under this Agreement
and the Notes (including any Make-Whole Amount) and (ii) the full and
punctual performance within applicable grace periods of all other obligations of
the Company whether for fees, expenses, indemnification or otherwise under this
Agreement and the Notes (all the foregoing being hereinafter collectively called
the “Guaranteed
Obligations”). 

     

    (b) 
Vectren waives presentation to, demand of payment from and protest to the
Company of any of the Guaranteed Obligations and also waives notice of protest
for nonpayment.  Vectren waives notice of any default under the Notes
or the Guaranteed Obligations.  The obligations of Vectren hereunder
shall not be affected by (i) the failure of any Holder to assert any claim
or demand or to enforce any right or remedy against the Company under this
Agreement or the Notes or otherwise; (ii) any extension or renewal of any
thereof; or (iii) any rescission, waiver, amendment or modification of any
of the terms or provisions of this Agreement or the Notes.

     

    (c) 
Vectren hereby waives any right to which it may be entitled to have the assets
of the Company first be used and depleted as payment of the Company’s
obligations hereunder prior to any amounts being claimed from or paid by Vectren
hereunder.  Vectren hereby waives any right to which it may be
entitled to require that the Company be sued prior to an action being initiated
against Vectren.

     

    (d) 
Vectren further agrees that its Guarantee herein constitutes a guarantee of
payment when due (and not a guarantee of collection) and waives any right to
require that any resort be had by any Holder for payment of the Guaranteed
Obligations against the Company.

     

    (e) 
Vectren agrees that its Guarantee shall remain in full force and effect until
payment in full of the Guaranteed Obligations. The obligations of Vectren
hereunder shall not be subject to any reduction, limitation, impairment or
termination for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Guaranteed Obligations or
otherwise.  Without limiting the generality of the foregoing, the
obligations of Vectren herein shall not be discharged or impaired or otherwise
affected by the failure of any Holder of Notes to assert any claim or demand or
to 

     

    
      
        
        

      

      
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    enforce
any remedy under this Agreement, the Notes or any other agreement, by any waiver
or modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of Vectren or would otherwise operate as a
discharge of Vectren as a matter of law or equity.

     

    (f) 
Vectren agrees that its Guarantee herein shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest on any Guaranteed Obligation is rescinded or must
otherwise be restored by any Holder upon the bankruptcy or reorganization of the
Company or otherwise.

     

    (g) 
In furtherance of the foregoing and not in limitation of any other right which
any Holder has at law or in equity against Vectren by virtue hereof, upon the
failure of the Company to pay the principal of or interest on any Guaranteed
Obligation (or any Make-Whole Amount) when and as the same shall become due,
whether at maturity, by acceleration, by redemption or otherwise, or to perform
or comply with any other Guaranteed Obligation, Vectren hereby promises to and
shall forthwith pay, or cause to be paid, in cash, to the Holders of Notes an
amount equal to the sum of (i) the unpaid principal amount of the Notes,
(ii) accrued and unpaid interest on the Notes and (iii) all other
monetary obligations of the Company to the Holders of Notes, including any other
unpaid principal amount of such Guaranteed Obligations, any Make-Whole Amount,
accrued and unpaid interest on such Guaranteed Obligations (but only to the
extent not prohibited by law) and any interest on overdue interest at the
Default Rate.

     

    (h) 
Vectren agrees that it shall not be entitled to any right of subrogation in
relation to the Holders of Notes in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed
Obligations.  Vectren further agrees that, as between it, on the one
hand, and the Holders of Notes, on the other hand, (i) to the extent
permitted by applicable law, the maturity of the Guaranteed Obligations
guaranteed hereby may be accelerated as provided in Section 13.1 for the
purposes of the Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Guaranteed
Obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Section 13.1, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become
due and payable by Vectren for the purposes of this Section 11.

     

    (i) 
Vectren also agrees to pay any and all reasonable costs and expenses (including
reasonable attorneys’ fees and expenses) incurred by any Holder of Notes in
enforcing any rights under this Section 11.

     

    Section 11.2. 
Successors and
Assigns.  This Section 11 shall be binding upon Vectren and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Holders of Notes and, in the event of any transfer or assignment
of rights by any Holder of Notes, the rights and privileges conferred upon that
party in this Agreement and in the Notes shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
of this Agreement.

     

    
      
        
        

      

      
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    Section 11.3. 
No
Waiver.  Neither a failure nor a delay on the part of any
Holders of Notes in exercising any right, power or privilege under this Section
11 shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or
privilege.  The rights, remedies and benefits of the Holders of Notes
herein expressly specified are cumulative and not exclusive of any other rights,
remedies or benefits which the Holders of Notes may have under this Section 11
at law, in equity, by statute or otherwise.

     

    Section 11.4. 
Modification.  No
modification, amendment or waiver of any provision of this Section 11, nor the
consent to any departure by Vectren therefrom, shall in any event be effective
unless the same shall be in writing and signed by each Holder of Notes affected
by such modification, amendment or waiver, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which
given.  No notice to or demand on Vectren in any case shall entitle
Vectren to any other or further notice or demand in the same, similar or other
circumstances.

     

    Section 11.5. 
Non-Impairment.  The
failure to endorse a Guarantee on any Note shall not affect or impair the
validity thereof.

     

    
      	
              Section 12.

            	
              Events
      of Default.

            

    

     

    An “Event
of Default” shall exist if any of the following conditions or events shall occur
and be continuing:

     

    (a) 
the Company, or Vectren under the Guarantee, defaults in the payment of any
principal or Make-Whole Amount, if any, on any Note when the same becomes due
and payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or

     

    (b) 
the Company, or Vectren under the Guarantee, defaults in the payment of any
interest on any Note for more than five Business Days after the same becomes due
and payable; or

     

    (c) 
default shall be made by either Obligor in the performance of or compliance with
any term contained in Sections 10.2, 10.5, 10.6, 10.7 or 10.8 or by Vectren in
the performance of the Guarantee; or

     

    (d) 
default shall be made by either Obligor in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 12) and such
default is not remedied within 30 days after the earlier of (i) a
Responsible Officer obtaining actual knowledge of such default and
(ii) Vectren receiving written notice of such default from any Holder of a
Note (any such written notice to be identified as a “notice of default” and to
refer specifically to this paragraph (d) of Section 12); or

     

    
      
        
        

      

      
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    (e) 
any representation or warranty made in writing by or on behalf of either Obligor
or by any officer of either Obligor in this Agreement or in any writing
furnished in connection with the transactions contemplated hereby proves to have
been false or incorrect in any material respect on the date as of which made;
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 “due-on-sale”
or similar clauses, or as a result of the occurrence of a change in control
similar to Section 8.7 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 8.7 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 

     

    
      
        
        

      

      
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    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

     

    (j) 
the Unfunded Liabilities of all Single Employer Plans shall have a Material
Adverse Effect or be reasonably likely to have a Material Adverse Effect or any
Reportable Event shall occur in connection with any Plan; Vectren or any other
member of the Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred withdrawal liability to such
Multiemployer Plan in an amount which, when aggregated with all other amounts
required to be paid to Multiemployer Plans by Vectren or any other member of the
Controlled Group as withdrawal liability (determined as of the date of such
notification), shall have a Material Adverse Effect or be reasonably likely to
have a Material Adverse Effect;  Vectren or any other member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, if such reorganization or termination shall
have a Material Adverse Effect or be reasonably likely to have a Material
Adverse Effect; or

     

    (k) 
the obligations of Vectren under the Guarantee shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any such obligations or Vectren shall deny it
has any further liability under the Guarantee or give notice to that
effect.

     

    
      	
              Section 13. 
      

            	
              Remedies
      on Default, Etc.

            

    

     

    Section 13.1. 
Acceleration.  (a) If
an Event of Default with respect to an Obligor described in paragraph (g)
or (h) of Section 12 has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.

     

    (b) 
If any other Event of Default has occurred and is continuing, the Required
Holders may at any time at their option, by notice or notices to the Company,
declare all the Notes then outstanding to be immediately due and
payable.

     

    (c) 
If any Event of Default described in paragraph (a) or (b) of Section 12 has
occurred and is continuing, any Holder or Holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held by it or
them to be immediately due and payable.

     

    Upon any
Notes becoming due and payable under this Section 13.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid
interest thereon (including, but not limited 

     

    
      
        
        

      

      
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    to,
interest accrued thereon at the Default Rate from the date such principal
becomes due and payable) and (y) the Make-Whole Amount determined in
respect of such principal amount (to the full extent permitted by applicable
law), shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby
waived.  The Company acknowledges, and the parties hereto agree, that
each Holder of a Note has the right to maintain its investment in the Notes free
from repayment by the Company (except as herein specifically provided for) and
that the provision for payment of a Make-Whole Amount by the Company in the
event that the Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of such right
under such circumstances.

     

    Section 13.2. 
Other
Remedies.  If any Default or Event of Default has occurred and
is continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 13.1, the Holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
Holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note or in the Guarantee, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.

     

    Section 13.3. 
Rescission.  At any
time after any Notes have been declared due and payable pursuant to clause (b)
or (c) of Section 13.1, the Required Holders, by written notice to the Company,
may rescind and annul any such declaration and its consequences if (a) the
Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) neither the Company nor Vectren nor any other Person shall have
paid any amounts which have become due solely by reason of such declaration,
(c) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 18, and (d) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes or to the Guarantee.  No rescission and annulment under this
Section 13.3 will extend to or affect any subsequent Event of Default or Default
or impair any right consequent thereon.

     

    Section 13.4. 
No Waivers or Election
of Remedies, Expenses, Etc.  No course of dealing and no delay
on the part of any Holder of any Note in exercising any right, power or remedy
shall operate as a waiver thereof or otherwise prejudice such Holder’s rights,
powers or remedies.  No right, power or remedy conferred by this
Agreement or by any Note upon any Holder thereof shall be exclusive of any other
right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise.  Without
limiting the obligations of the Company under Section 16, the Company will pay
to the Holder of each Note on demand such further amount as shall be sufficient
to cover all costs and expenses of such Holder incurred in any enforcement or
collection under this Section 13, including, without limitation, reasonable
attorneys’ fees, expenses and disbursements.

     

    
      
        
        

      

      
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              Section 14. 
      

            	
              Registration;
      Exchange; Substitution of Notes.

            

    

     

    Section 14.1. 
Registration of
Notes.  The Company shall keep at its principal executive
office a register for the registration and registration of transfers of
Notes.  The name and address of each Holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register.  Prior to due presentment
for registration of transfer, the Person in whose name any Note shall be
registered shall be deemed and treated as the owner and Holder thereof for all
purposes hereof, and the Company shall not be affected by any notice or
knowledge to the contrary.  The Company shall give to any Holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered Holders
of Notes.  In the event that the beneficial owner of any Note is a
different Person than the Person in whose name such Note is registered pursuant
to this Section 14.1, the registered Holder or such beneficial owner shall
promptly provide notice to the Company of the name and address of such
beneficial owner.

     

    Section 14.2. 
Transfer and Exchange
of Notes.  Upon surrender of any Note to the Company at the
address and to the attention of the designated officer (all as specified in
Section 19(iii)) for registration of transfer or exchange (and in the case
of a surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered Holder of such
Note or such Holder’s attorney duly authorized in writing and accompanied by the
relevant name, address and other information for notices of each transferee of
such Note or part thereof), within ten Business Days thereafter the Company
shall execute and deliver, at the Company’s expense (except as provided below),
one or more new Notes of the same series (as requested by the Holder thereof) in
exchange therefor, in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Note.  Each such new Note shall be
payable to such Person as such Holder may request and shall be substantially in
the form of Exhibit 1-A, Exhibit  1-B or Exhibit 1-C, as
applicable.  Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid
thereon.  The Company may require payment of a sum sufficient to cover
any stamp tax or governmental charge imposed in respect of any such transfer of
Notes.  Notes shall not be transferred in denominations of less than
$1,000,000 or in any amount in excess thereof which is not an integral multiple
of $250,000, provided
that if necessary to enable the registration of transfer by a Holder of its
entire holding of Notes of a series, one Note of such series may be in a
denomination of less than $1,000,000 and in an amount which is not an integral
multiple of $250,000.  Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representations set forth in Sections 6.1 and 6.2.

     

    Section 14.3. 
Replacement of
Notes.  Upon receipt by the Company at the address and to the
attention of the designated officer (all as specified in Section 19(iii))
of evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any Note (which evidence shall be, in the
case of an Institutional Investor, notice from such Institutional Investor of
such ownership and such loss, theft, destruction or mutilation),
and

     

    (a) 
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to it (provided that if
the Holder of such Note is, or is a nominee for, an original Purchaser or
another 

     

    
      
        
        

      

      
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    Holder of
a Note with a minimum net worth of at least $50,000,000 in excess of the
outstanding principal amount of such Note or a Qualified Institutional Buyer,
such Person’s own unsecured agreement of indemnity shall be deemed to be
satisfactory), or

     

    (b) 
in the case of mutilation, upon surrender and cancellation thereof,

     

    within
ten Business Days thereafter, the Company at its own expense shall execute and
deliver, in lieu thereof, a new Note of the same series, dated and bearing
interest from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid
thereon.

     

    Section 14.4. 
Legend.  Each Note
issued on the date of the Closing and each Note issued pursuant to this Section
14 shall bear a legend substantially as follows (until such time as the Company
shall reasonably agree that such legend is no longer necessary or
advisable):

     

    “This
Note has not been registered under the United States Securities Act of 1933, as
amended, or any other applicable securities laws and, accordingly, may not be
sold or otherwise transferred unless registered or exempt from registration
under said act or such other laws.”

     

    
      	
              Section 15. 
      

            	
              Payments
      on Notes.

            

    

     

    Section 15.1.  Place of
Payment.  Subject to Section 15.2, payments of principal,
Make-Whole Amount, if any, and interest becoming due and payable on the Notes
shall be made in New York, New York at the principal office of Bank of America,
N.A. in New York City.  The Company may at any time, by notice to each
Holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.

     

    Section 15.2. 
Home Office
Payment.  So long as any Purchaser or its nominee shall be the
Holder of any Note, and notwithstanding anything contained in Section 15.1
or in such Note to the contrary, the Company will pay all sums becoming due on
such Note for principal, Make-Whole Amount, if any, and interest by the method
and at the address specified for such purpose below such Purchaser’s name in
Schedule A, or by such other method or at such other address as such Purchaser
shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, such Purchaser shall surrender such Note for cancellation, reasonably
promptly after any such request, to the Company at its principal executive
office or at the place of payment most recently designated by the Company
pursuant to Section 15.1.  Prior to any sale or other disposition of
any Note held by a Purchaser or its nominee, such Purchaser will, at its
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section
14.2.  The Company will afford the benefits of this Section 15.2 to
any Institutional Investor that is the direct or indirect 

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

     

    transferee
of any Note purchased by a Purchaser under this Agreement and that has made the
same agreement relating to such Note as the Purchasers have made in this Section
15.2.

     

    
      	
              Section 16. 
      

            	
              Expenses,
      Etc. 

            

    

     

    Section 16.1. 
Transaction
Expenses.  Whether or not the transactions contemplated hereby
are consummated, Vectren and the Company will pay all costs and expenses
(including reasonable attorneys’ fees of a special counsel) incurred by the
Purchasers and each other Holder of a Note in connection with such transactions
and in connection with any amendments, waivers or consents under or in respect
of this Agreement or the Notes (whether or not such amendment, waiver or consent
becomes effective), including, without limitation: (a) the costs and
expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement or the Notes or in responding
to any subpoena or other legal process or informal investigative demand issued
in connection with this Agreement or the Notes, or by reason of being a Holder
of any Note, (b) the costs and expenses, including financial advisors’
fees, incurred in connection with the insolvency or bankruptcy of Vectren, the
Company or any Subsidiary or in connection with any work-out or restructuring of
the transactions contemplated hereby and by the Notes and (c) the costs and
expenses incurred in connection with the initial filing of this Agreement and
all related documents and financial information with the SVO provided, that such costs and
expenses shall not exceed $5,000 for the Series A Notes, $5,000 for the
Series B Notes and $5,000 for the Series C Notes.  The
Company will pay, and will save each Purchaser and each other Holder of a Note
harmless from, all claims in respect of any fees, costs or expenses, if any, of
brokers and finders (other than those, if any, retained by a Purchaser or other
Holder in connection with its purchase of the Notes).

     

    Section 16.2. 
Survival.  The
obligations of Vectren and the Company under this Section 16 will survive
the payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this
Agreement.

     

    
      	
              Section 17. 
      

            	
              Survival
      of Representations and Warranties; Entire
  Agreement.

            

    

     

    All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the Notes, the purchase or transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any subsequent Holder of a Note, regardless
of any investigation made at any time by or on behalf of such Purchaser or any
other Holder of a Note.  All statements contained in any certificate
or other instrument delivered by or on behalf of either Obligor pursuant to this
Agreement  shall be deemed representations and warranties of such
Obligor under this Agreement.  Subject to the preceding sentence, this
Agreement and the Notes embody the entire agreement and understanding between
each Purchaser and the Obligors and supersede all prior agreements and
understandings relating to the subject matter hereof.

     

    
      
        
        

      

      
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              Section 18. 
      

            	
              Amendment
      and Waiver.

            

    

     

    Section 18.1. 
Requirements.  This
Agreement and the Notes may be amended, and the observance of any term hereof or
of the Notes may be waived (either retroactively or prospectively), with (and
only with) the written consent of the Obligors and the Required Holders, except
that no such amendment or waiver may, without the written consent of the Holder
of each Note at the time outstanding affected thereby, (i) subject to the
provisions of Section 13 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amount on, the Notes, (ii) change the percentage of the
principal amount of the Notes the Holders of which are required to consent to
any such amendment or waiver or (iii) amend or waive any part of Section
11.

     

    Section 18.2. 
Solicitation of Holders
of Notes.

     

    (a) 
Solicitation.  The
Obligors will provide each Holder of the Notes (irrespective of the amount of
Notes then owned by it) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable such Holder to make an informed
and considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the
Notes.  The Obligors will deliver executed or true and correct copies
of each amendment, waiver or consent effected pursuant to the provisions of this
Section 18 to each Holder of outstanding Notes promptly following the date
on which it is executed and delivered by, or receives the consent or approval
of, the requisite Holders of Notes.

     

    (b) 
Payment.  Neither
Obligor will directly or indirectly pay or cause to be paid any remuneration,
whether by way of supplemental or additional interest, fee or otherwise, or
grant any security or provide other credit support, to any Holder of Notes as
consideration for or as an inducement to the entering into by any Holder of
Notes of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted or other credit support is concurrently provided, on the same terms,
ratably to each Holder of Notes then outstanding even if such Holder did not
consent to such waiver or amendment.

     

    (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 (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 18.3. 
Binding Effect,
Etc.  Any amendment or waiver consented to as provided in this
Section 18 applies equally to all Holders of Notes and is binding upon them and
upon each future Holder of any Note and upon the Obligors without regard to
whether such Note has been 

     

    
      
        
        

      

      
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    marked to
indicate such amendment or waiver.  No such amendment or waiver will
extend to or affect any obligation, covenant, agreement, Default or Event of
Default not expressly amended or waived or impair any right consequent
thereon.  No course of dealing between either Obligor and the Holder
of any Note nor any delay in exercising any rights hereunder or under any Note
shall operate as a waiver of any rights of any Holder of such
Note.  As used herein, the term “this Agreement” and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented and includes the Guarantee.

     

    Section 18.4. 
Notes held by Obligor,
Etc.  Solely for the purpose of determining whether the Holders
of the requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Notes, or have directed the taking of any
action provided herein or in the Notes to be taken upon the direction of the
Holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by either Obligor or any
Affiliate of either Obligor shall be deemed not to be outstanding.

     

    
      	
              Section 19. 
      

            	
              Notices.

            

    

     

    All
notices and communications provided for hereunder shall be in writing and sent
(a) by telecopy if the sender on the same day sends a confirming copy of
such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
prepaid), or (c) by a recognized overnight delivery service (with charges
prepaid).  Any such notice must be sent:

     

    (i) 
if to any Purchaser or its nominee, to such Purchaser or nominee at the address
specified for such communications in Schedule A, or at such other address as
such Purchaser or nominee shall have specified to the Company in
writing,

     

    (ii) 
if to any other Holder of any Note, to such Holder at such address as such other
Holder shall have specified to the Company in writing, or

     

    (iii) 
if to the Company, to the Company at its address set forth at the beginning
hereof to the attention of the Vice President and Treasurer, or at such other
address as the Company shall have specified to the Holder of each Note in
writing, or

     

    (iv) 
if to Vectren, to Vectren at the address of the Company set forth at the
beginning hereof to the attention of the Vice President and Treasurer, or at
such other address as Vectren shall have specified to the Holder of each Note in
writing.

     

    Notices
under this Section 19 will be deemed given only when actually
received.

     

    
      	
              Section 20. 
      

            	
              Reproduction
      of Documents.

            

    

     

    This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications that may hereafter be executed,
(b) documents received by any Purchaser at the Closing (except the Notes
themselves), and (c) financial statements, 

     

    
      
        
        

      

      
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    certificates
and other information previously or hereafter furnished to such Purchaser, may
be reproduced by such Purchaser by any photographic, photostatic, electronic,
digital or other similar process and such Purchaser may destroy any original
document so reproduced.  The Obligors agree and stipulate that, to the
extent permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.  This Section 20 shall not
prohibit an Obligor or any other Holder of Notes from contesting any such
reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such
reproduction.

     

    
      	
              Section 21. 
      

            	
              Confidential
      Information.

            

    

     

    For the
purposes of this Section 21, “Confidential Information” means information
delivered to such Purchaser by or on behalf of either Obligor or any Subsidiary
in connection with the transactions contemplated by or otherwise pursuant to
this Agreement that is proprietary in nature and that was clearly marked or
labeled or otherwise adequately identified when received by such Purchaser as
being confidential information of such Obligor or such Subsidiary, provided that such term does
not include information that (a) was publicly known or otherwise known to
such Purchaser prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by such Purchaser or any
person acting on such Purchaser’s behalf, (c) otherwise becomes known to
such Purchaser other than through disclosure by an Obligor or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser under
Section 7.1 that are otherwise publicly available.  Each Purchaser
will maintain the confidentiality of such Confidential Information in accordance
with procedures adopted by such Purchaser in good faith to protect confidential
information of third parties delivered to such Purchaser, provided that such Purchaser
may deliver or disclose Confidential Information to (i) its directors,
trustees, officers, employees, agents, attorneys and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by its Notes), (ii) its financial advisors and other
professional advisors who agree in writing to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 21,
(iii) any other Holder of any Note, (iv) any Institutional Investor to
which it sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
21), (v) any Person from which it offers to purchase any security of an
Obligor (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 21),
(vi) any federal or state regulatory authority having jurisdiction over
such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar
organization, or any nationally recognized rating agency that requires access to
information about such Purchaser’s investment portfolio or (viii) any other
Person to which such delivery or disclosure may be necessary or appropriate
(w) to effect compliance with any law, rule, regulation or order applicable
to such Purchaser, (x) in response to any subpoena or other legal process,
(y) in connection with any litigation to which such Purchaser is a party or
(z) if an Event of Default has occurred and is continuing, to the extent
such Purchaser may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for 

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

     

    the
protection of the rights and remedies under such Purchaser’s Notes or this
Agreement.  Each Holder of a Note, by its acceptance of a Note, will
be deemed to have agreed to be bound by and to be entitled to the benefits of
this Section 21 as though it were a party to this Agreement.  On
reasonable request by an Obligor in connection with the delivery to any Holder
of a Note of information required to be delivered to such Holder under this
Agreement or requested by such Holder (other than a Holder that is a party to
this Agreement or its nominee), such Holder will enter into an agreement with
the Obligors embodying the provisions of this Section 21.

     

    
      	
              Section 22. 
      

            	
              Substitution
      of Purchaser.

            

    

     

    Each
Purchaser shall have the right to substitute any one of its Affiliates as the
purchaser of the Notes that it has agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both such Purchaser and
such Affiliate, shall contain such Affiliate’s agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section
6.  Upon receipt of such notice, any reference to such Purchaser in
this Agreement (other than in this Section 22), shall be deemed to refer to such
Affiliate in lieu of such original Purchaser.  In the event that such
Affiliate is so substituted as a Purchaser hereunder and such Affiliate
thereafter transfers to such original Purchaser all of the Notes then held by
such Affiliate, upon receipt by the Company of notice of such transfer, any
reference to such Affiliate as a “Purchaser” in this Agreement (other than in
this Section 22), shall no longer be deemed to refer to such Affiliate, but
shall refer to such original Purchaser, and such original Purchaser shall again
have all the rights of an original Holder of the Notes under this
Agreement.

     

    
      	
              Section 23. 
      

            	
               Miscellaneous.

            

    

     

    Section 23.1. 
Successors and
Assigns.  All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to the
benefit of their respective successors and assigns (including, without
limitation, any subsequent Holder of a Note) whether so expressed or
not.

     

    Section 23.2. 
Payments Due on
Non-Business Days.  Anything in this Agreement or the Notes to
the contrary notwithstanding (but without limiting the requirement in
Section 8.2 that the notice of any optional prepayment specify a Business
Day as the date fixed for such prepayment), any payment of principal of or
Make-Whole Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day without including
the additional days elapsed in the computation of the interest payable on such
next succeeding Business Day; provided that if the maturity
date of any Note is a date other than a Business Day, the payment otherwise due
on such maturity date shall be made on the next succeeding Business Day and
shall include the additional days elapsed in the computation of interest payable
on such next succeeding Business Day.

     

    Section 23.3.  Accounting
Terms.  All accounting terms used herein which are not
expressly defined in this Agreement have the meanings respectively given to them
in accordance with U.S. GAAP.  Except as otherwise specifically
provided herein, (i) all computations made 

     

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        

      

    

     

    pursuant
to this Agreement shall be made in accordance with U.S. GAAP, and (ii) all
financial statements shall be prepared in accordance with U.S.
GAAP.

     

    Section 23.4. 
Severability.  Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.

     

    Section 23.5. 
Construction.  Each
covenant contained herein shall be construed (absent express provision to the
contrary) as being independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with any other
covenant.  Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person.

     

    For the
avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall
be deemed to be a part hereof.

     

    Section 23.6. 
Counterparts.  This
Agreement 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 23.7. 
Governing
Law.  This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of Indiana 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.

     

    Section 23.8. 
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.

     

    

    
      
         

      

      
        -41-

        
          

        

      

      
         

      

    

     

    If you
are in agreement with the foregoing, please sign the form of agreement on a
counterpart of this Agreement and return it to the Company, whereupon this
Agreement shall become a binding agreement between you and the Company and
Vectren.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	 
      	
                                                Very
      truly yours,

                                              
	 
      	 
      
	 
      	
                                                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
	 	 	 

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    

    
      
         

      

      
        -42-

        
          

        

      

      
         

      

    

     

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

    

    
      	 
      	
              Metropolitan
      Life Insurance Company

            
	 
      	 
      	 
      
	 
      	
              MetLife
      Insurance Company of Connecticut

            
	 
      	
              By:

            	
              Metropolitan
      Life Insurance Company, its investment manager

            
	 
      	 
      	 
      
	 
      	
              MetLife
      Reinsurance Company of Vermont

            
	 
      	
              By:

            	
              Metropolitan
      Life Insurance Company, its investment manage

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By

            	/s/ Evan C.
      Thorne  
	 
      	 
      	
              Name: 
      Evan C.
      Thorne

            
	 
      	 
      	
              Title:  
      Managing
      Director

            
	 
      	 
      	 
      
	 
      	
              Teachers
      Insurance and Annuity Association of America

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By

            	/s/ Ho Young
      Lee  
	 
      	 
      	
              Name: 
      Ho Young
      Lee

            
	 
      	 
      	
              Title:   
      Director

            
	 
      	 
      	 
      
	 
      	
              American
      Investors Life Insurance Company

            
	 
      	
              Aviva
      Life and Annuity Company

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              Aviva
      Investors North America, Inc., its authorized
    attorney-in-fact

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By

            	/s/ Roger D.
      Fors  
	 
      	 
      	
              Name:  Roger
      D. Fors

            
	 
      	 
      	
              Title:  VP-Private
      Placements

            

    

     

    
      
        
        

      

      
        -43-

        
          

        

      

      
        
        

      

    

     

    
 

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	
                                  The
      Guardian Life Insurance Company of America

                                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                                  By

                                	/s/ Barry
      Scheinholtz  
	 
      	 
      	
                                  Name:  
      Barry
      Scheinholtz

                                
	 
      	 
      	
                                  Title:    
      Senior
      Director, Private Placements

                                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                                  Berkshire
      Life Insurance Company of America

                                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                                  By

                                	/s/ Barry
      Scheinholtz  
	 
      	 
      	
                                  Name:   Barry
      Scheinholtz

                                
	 
      	 
      	
                                  Title:    
      Senior
      Director, Private Placements

                                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                                  The
      Northwestern Mutual Life Insurance Company

                                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                                  By

                                	/s/
      David A. Barras
	 
      	 
      	
                                  Its
      Authorized Representative

                                
	 
      	 
      	 
      
	 	 	 
	 	 The
      Northwestern Mutual Life Insurance Company for its Group Annuity
      Separate Account
	 	 	 
	 	 	 
	 	 	 
	 	By 	/s/
      David A. Barras
	 	 	

                                  Its
      Authorized Representative 

                                
	 	 	 
	 
      	 
      	 
      
	 
      	
                                  Protective
      Life Insurance Company

                                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                                  By

                                	/s/ Philip E.
      Passafiume 
	 
      	 
      	
                                  Name:  
      Philip E.
      Passafiume

                                
	 
      	 
      	
                                  Title:    
      Director,
      Fixed
Income

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    

    
      
         

      

      
        -44-

        
          

        

      

      
         

      

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of Series A
      Notes

              to
      be Purchased

            	
              Principal
      Amount of Series B
      Notes

              to
      be Purchased

            
	
              Metropolitan
      Life Insurance Company

              1095
      Avenue of the America

              New
      York, New York  10036

            	
              $15,000,000

            	
              $22,000,000

            

    

     

    Payments

    All
scheduled payments of principal and interest by wire transfer of immediately
available funds to:

    
      	 
      	
              Bank
      Name:

            	
              JP
      Morgan Chase Bank

            
	 
      	
              ABA
      Routing #:

            	
              021-000-021

            
	 
      	
              Account
      No.:

            	
              002-2-410591

            
	 
      	
              Account
      Name:

            	
              Metropolitan
      Life Insurance Company

            
	 
      	
              Reference:

            	
              Vectren
      Capital Corp. 6.37% Senior Notes PPN #92240@ AG0 due

            
	 
      	 
      	
              March
      11, 2014

            
	 
      	 
      	
              Vectren
      Capital Corp. 6.92% Senior Notes PPN #92240@ AH8 due

            
	 
      	 
      	
              March
      11, 2016

            

    

     

    With
sufficient information to identify the source and application of such funds,
including issuer, PPN#, interest rate, maturity and whether payment is of
principal, interest, make whole amount or otherwise.  For all payments
other than scheduled payments of principal and interest, the Company shall seek
instructions from the holder, and in the absence of instructions to the
contrary, will make such payments to the account and in the manner set forth
above.

     

    Notices

    All
notices and communications:

    

    Metropolitan
Life Insurance Company

    Investments,
Private Placements

    P. O. Box
1902

    10 Park
Avenue

    Morristown,
New Jersey 07962-1902

    Attention:
Director

    Fax
Number: (973) 355-4250

     

    With a
copy (OTHER than with respect to deliveries of financial statements)
to:

    

    Metropolitan
Life Insurance Company

    P. O. Box
1902

    10 Park
Avenue

    Morristown,
New Jersey  07962-1902

    Attention:  Chief
Counsel - Securities Investments (PRIV)

    Fax
Number:  (973) 355-4338

    

    Name of
Nominee in which Notes are to be issued:  None

    Taxpayer
I.D. Number:  13-5581829

    
      
         

      

      
        
          Schedule
A

          (to Note
Purchse Agreement)

        

        
          

        

      

      
         

      

    

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of

              Series A
      Notes

              to
      be Purchased

            
	
              MetLife
      Insurance Company of Connecticut

              c/o
      Metropolitan Life Insurance Company

              1095
      Avenue of the America

              New
      York, New York  10036

            	
              $10,000,000

            

    

     

    Payments

    All
scheduled payments of principal and interest by wire transfer of immediately
available funds to:

    
      	 
      	
              Bank
      Name:

            	
              State
      Street Bank

            
	 
      	
              ABA
      Routing #:

            	
              011000028

            
	 
      	
              Account
      No.:

            	
              0008-7155

            
	 
      	
              Account
      Name:

            	
              MetLife
      Insurance Company of Connecticut- MICC-SA MGA (TIC-MGA)

            
	 
      	
              Reference:

            	
              Vectren
      Capital Corp. 6.37% Senior Notes PPN #92240@ AG0 due March 11,
      2014

            

    

     

    With
sufficient information to identify the source and application of such funds,
including issuer, PPN#, interest rate, maturity and whether payment is of
principal, interest, make whole amount or otherwise.  For all payments
other than scheduled payments of principal and interest, the Company shall seek
instructions from the holder, and in the absence of instructions to the
contrary, will make such payments to the account and in the manner set forth
above.

     

    Notices

    All
notices and communications:

    

    MetLife
Insurance Company of Connecticut

    c/o
Metropolitan Life Insurance Company

    Investments,
Private Placements

    P. O. Box
1902, 10 Park Avenue

    Morristown,
New Jersey 07962-1902

    Attention:
Director

    Fax
Number: (973) 355-4250

     

    With a
copy (OTHER than with respect to deliveries of financial statements)
to:

    

    MetLife
Insurance Company of Connecticut

    c/o
Metropolitan Life Insurance Company

    P. O. Box
1902, 10 Park Avenue

    Morristown,
New Jersey  07962-1902

    Attention:  Chief
Counsel - Securities Investments (PRIV)

    Fax
Number:  (973) 355-4338

    

    Name of
Nominee in which Notes are to be issued:  None

    Taxpayer
I.D. Number:  06-0566090

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of

              Series B
      Notes

              to
      be Purchased

            
	
              MetLife
      Reinsurance Company of Vermont

              c/o
      Metropolitan Life Insurance Company

              1095
      Avenue of the America

              New
      York, New York  10036

            	
              $3,000,000

            

    

     

    Payments

    All
scheduled payments of principal and interest by wire transfer of immediately
available funds to:

    
      	 
      	
              Bank
      Name:

            	
              JP
      Morgan Chase Bank

            
	 
      	
              ABA
      Routing #:

            	
              021-000-021

            
	 
      	
              Account
      No.:

            	
              304-698687

            
	 
      	
              Account
      Name:

            	
              MetLife
      Reinsurance Company of Vermont- (MRV-Cell 2 Operations)

            
	 
      	
              Reference:

            	
              Vectren
      Capital Corp. 6.92% Senior Notes PPN #92240@ AH8 due March 11,
      2016

            

    

     

    With
sufficient information to identify the source and application of such funds,
including issuer, PPN#, interest rate, maturity and whether payment is of
principal, interest, make whole amount or otherwise.  For all payments
other than scheduled payments of principal and interest, the Company shall seek
instructions from the holder, and in the absence of instructions to the
contrary, will make such payments to the account and in the manner set forth
above.

     

    Notices

    All
notices and communications:

    

    MetLife
Reinsurance Company of Vermont

    c/o
Metropolitan Life Insurance Company

    Investments,
Private Placements

    P. O. Box
1902

    10 Park
Avenue

    Morristown,
New Jersey 07962-1902

    Attention:
Director

    Fax
Number: (973) 355-4250

     

    With a
copy (OTHER than with respect to deliveries of financial statements)
to:

    

    MetLife
Reinsurance Company of Vermont

    c/o
Metropolitan Life Insurance Company

    P. O. Box
1902

    10 Park
Avenue

    Morristown,
New Jersey  07962-1902

    Attention:  Chief
Counsel - Securities Investments (PRIV)

    Email:  sec_invest_law@metlife.com

     

    Name of
Nominee in which Notes are to be issued:  None

    Taxpayer
I.D. Number:  26-1511401

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of Series B
      Notes

              to
      be Purchased

            	
              Principal
      Amount of Series C
      Notes

              to
      be Purchased

            
	
              Teachers
      Insurance and Annuity

                 Association
      of America

              730
      Third Avenue

              New
      York, New York  10017

              Attention:  Global
      Private Markets

              Phone:(212)
      916-6547 (Lisa M. Ferraro)

              (212) 916-4000 (General
      Number)

              Email:lferraro@tiaa-cref.org

            	
              $22,000,000

            	
              $14,000,000

            

    

     

    Payments

    All
payments on or in respect of the Series B Notes and Series C Notes shall be made
in immediately available funds on the due date by electronic funds transfer,
through the Automated Clearing House System, to:

     

    JPMorgan
Chase Bank, N.A.

    ABA
#021-000-021

    Account
Number 900-9-000200

    Account
Name:  TIAA (Teachers Insurance and Annuity Association of
America)

    For
Further Credit to the Account Number:  G07040

    
      Reference:  Series B
Notes: PPN #92240@ AH8/Vectren Capital, Corp./Maturity Date: March 11,
2016/Interest Rate: 6.92%/P&I Breakdown

    

    
      Series C
Notes: PPN #92240@ AJ4/Vectren Capital, Corp./Maturity Date: March 11,
2019/Interest Rate: 7.30%/P&I Breakdown

    

     

    Notices

    All
notices with respect to payments and prepayments of the Notes shall be sent
(with a copy as first provided above) to:

    

    Teachers
Insurance and Annuity Association of America

    730 Third
Avenue

    New York,
New York 10017

    Attention:
Securities Accounting Division

    Phone:
(212) 916-4109

    Facsimile:
(212) 916-6955

    

    With a
copy to:

    JPMorgan
Chase Bank, N.A.

    P.O. Box
35308

    Newark,
New Jersey 07101

    

    Contemporaneous
written confirmation of any electronic funds transfer shall be sent to the above
addresses setting forth (1) the full name, private placement number, interest
rate and maturity date of the Notes, (2) allocation of payment between
principal, interest, Make-Whole Amount, 

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

    other
premium or any special payment and (3) the name and address of the bank from
which such electronic funds transfer was sent.

    

    All other
notices and communications shall be delivered or mailed as first provided
above.

     

    Name of
Nominee in which Notes are to be issued:  None

    Taxpayer
I.D. Number:  13-1624203

    
      
         

      

      
        A-5

        
          

        

      

      
         

      

    

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of Series A
      Notes

              to
      be Purchased

            	
              Principal
      Amount of Series B
      Notes

              to
      be Purchased

            
	
              American
      Investors Life Insurance Company

              c/o
      Aviva Investors North America, Inc.

              Attention:  Private
      Placements

              699
      Walnut Street, Suite 1800

              Des
      Moines, Iowa  50309

              Facsimile:  (515)
      283-3439

              Preferred
      Remittance:  privateplacements@avivausa.com

            	
              $4,000,000

            	
              $10,500,000

            

    

     

    Payments

     

    All
payments on or in respect of the Notes to be by bank wire transfer of Federal or
other immediately available funds to:

    

    
      	 
      	
              The
      Bank of New York

            
	 
      	
              ABA#
      021000018

            
	 
      	
              Credit
      A/C # GLA111566

            
	 
      	
              A/C
      Name:  Institutional Custody Insurance
  Division

            
	 
      	
              Custody
      Account Name:  American Investors Life Insurance
      Company

            
	 
      	
              Custody
      Account Number:  010048

            
	 
      	
              Reference:

            	
              Vectren
      Capital Corp. 6.37% Senior Notes PPN #92240@ AG0 due

            
	 
      	 
      	
              March
      11, 2014

            
	 
      	 
      	
              Vectren
      Capital Corp. 6.92% Senior Notes PPN #92240@ AH8 due

            
	 
      	 
      	
              March
      11, 2016

            

    

     

    All
notices and communications with respect to payments and written confirmation of
each such payment, to be addressed:

    

    American
Investors Life Insurance Company

    c/o Aviva
Investors North America, Inc.

    ATTN:  Cash
Management

    699
Walnut Street, Suite 1700

    Des
Moines, Iowa  50309

    Preferred
Remittance:  cash@avivainvestors.com

     

    All other
notices and communications to be addressed as first provided above.

     

    Name of
Nominee in which Notes are to be issued:  HARE & CO.

     

    Taxpayer
I.D. Number for HARE & CO.:  13-6062916

    Taxpayer
I.D. Number for American Investors Life Insurance
Company:  48-0696320

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of Series A
      Notes

              to
      be Purchased

            	
              Principal
      Amount of Series B
      Notes

              to
      be Purchased

            
	
              Aviva
      Life and Annuity Company

              c/o
      Aviva Investors North America, Inc.

              Attention:  Private
      Placements

              699
      Walnut Street, Suite 1800

              Des
      Moines, Iowa  50309

              Facsimile:  (515)
      283-3439

              Preferred
      Remittance:  privateplacements@avivausa.com

            	
              $1,000,000

            	
              $2,500,000

            

    

     

    Payments

     

    All
payments on or in respect of the Notes to be by bank wire transfer of Federal or
other immediately available funds to:

    

    
      	 
      	
              The
      Bank of New York

            
	 
      	
              ABA#
      021000018

            
	 
      	
              Credit
      A/C # GLA111566

            
	 
      	
              A/C
      Name:  Institutional Custody Insurance
  Division

            
	 
      	
              Custody
      Account Name: ALA Custody

            
	 
      	
              Custody
      Account Number:  010040

            
	 
      	
              Reference:

            	
              Vectren
      Capital Corp. 6.37% Senior Notes PPN #92240@ AG0 due

            
	 
      	 
      	
              March
      11, 2014

            
	 
      	 
      	
              Vectren
      Capital Corp. 6.92% Senior Notes PPN #92240@ AH8 due

            
	 
      	 
      	
              March
      11, 2016

            
	 
      	
              and
      application (as among principal, Make-Whole Amount and interest) of the
      payment being made.

            

    

     

    All
notices and communications with respect to payments and written confirmation of
each such payment, to be addressed:

    

    American
Investors Life Insurance Company

    c/o Aviva
Investors North America, Inc.

    ATTN:  Cash
Management

    699
Walnut Street, Suite 1700

    Des
Moines, Iowa  50309

    Preferred
Remittance:  cash@avivainvestors.com

     

    All other
notices and communications to be addressed as first provided above.

     

    Name of
Nominee in which Notes are to be issued:  HARE & CO.

    Taxpayer
I.D. Number for HARE & CO.:  13-6062916

    Taxpayer
I.D. Number for Aviva Life and Annuity
Company:  42-0175020

    
      
         

      

      
        A-7

        
          

        

      

      
         

      

    

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of

              Series C
      Notes

              to
      be Purchased

            
	
              The
      Guardian Life Insurance Company of America

              7
      Hanover Square

              New
      York, New York  10004-2616

              Attention:  Barry
      Scheinholtz

              Investment
      Dept. 20-D

              Fax
      Number:  (212) 919-2658/2656

            	
              $13,000,000

            

    

     

    Payments

     

    All
payments on or in respect of the Notes to be by bank wire transfer of Federal or
other immediately available funds (identifying each payment as: “Vectren Capital
Corp., 7.30% Senior Notes due 2019, PPN 92240@ AJ4, principal, premium or
interest”) to:

    

    JP Morgan
Chase

    FED ABA
#021000021

    CHASE/NYC/CTR/BNF

    A/C
900-9-000200

    Reference
A/C #G05978, Guardian Life, PPN #92240@ AJ4, Vectren Capital Corp.

     

    All
notices and communications with respect to payments and written confirmation of
each such payment, to be addressed:

    

    The
Guardian Life Insurance Company of America

    7 Hanover
Square

    New York,
New York 10004-2616

    ATTN:  Barry
Scheinholtz

    Investment
Department 20-D

    Fax #
(212) 919-2658/2656

     

    All other
notices and communications to be addressed as first provided above.

     

    Name of
Nominee in which Notes are to be issued:  None

    Taxpayer
I.D. Number:  13-5123390

    
      
         

      

      
        A-8

        
          

        

      

      
         

      

    

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of

              Series C
      Notes

              to
      be Purchased

            
	
              Berkshire
      Life Insurance Company of America

              c/o
      The Guardian Life Insurance Company of America

              7
      Hanover Square

              New
      York, New York  10004-2616

              Attention:  Barry
      Scheinholtz

              Investment
      Department, 20-D

              Telefacsimile:  (212)
      919-2658/2656

            	
              $5,000,000

            

    

     

    Payments

     

    All
payments on or in respect of the Notes to be by bank wire transfer of Federal or
other immediately available funds (identifying each payment as: “Vectren Capital
Corp., 7.30% Senior Notes due 2019, PPN 92240@ AJ4, principal, premium or
interest”) to:

    

    JPMorgan
Chase Bank

    ABA
#021000021

    Chase/NYC/CTR/BNF

    A/C
#900-9-000200

    Reference
A/C #G07064, Berkshire Life Insurance, PPN 92240@ AJ4

    

    With
sufficient information (including issuer, PPN number, interest rate, maturity
and whether payment is of principal, premium or interest) to identify the source
and application of funds.

     

    All
notices and communications with respect to payments and written confirmation of
each such payment, to be addressed:

    

    Berkshire
Life Insurance Company of America

    c/o The
Guardian Life Insurance Company of America

    7 Hanover
Square

    New York,
New York 10004-2616

    ATTN:  Barry
Scheinholtz

    Investment
Department 20-D

    Fax #
(212) 919-2658/2656

     

    All other
notices and communications to be addressed as first provided above.

     

    Name of
Nominee in which Notes are to be issued:  None

    Taxpayer
I.D. Number:  75-1277524

    
      
         

      

      
        A-9

        
          

        

      

      
         

      

    

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of

              Series C
      Notes

              to
      be Purchased

            
	
              The
      Northwestern Mutual Life

                Insurance
      Company

              720
      East Wisconsin Avenue

              Milwaukee,
      Wisconsin  53202

              Attention:  Securities
      Department

              Fax
      Number:  (414) 665-7124

            	
              $17,000,000

            

    

     

    Payments

     

    All
payments on or in respect of the Notes to be by bank wire transfer of Federal or
other immediately available funds (identifying each payment as: “Vectren Capital
Corp., 7.30% Senior Notes due 2019, PPN 92240@ AJ4, principal, premium or
interest”) to:

    

    US
Bank

    777 East
Wisconsin Avenue

    Milwaukee,
Wisconsin  53202

    ABA#
075000022

    

    For the
account of: Northwestern Mutual Life

    Account
No. 182380324521

     

    Notices

     

    All
notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
to be addressed, Attention:  Investment Operations Department, Fax
Number:  (414) 625-6998.

     

    Name of
Nominee in which Notes are to be issued:  None

     

    Taxpayer
I.D. Number:  39-0509570

     

    
      
        
        

      

      
        A-10

        
          

        

      

      
        
        

      

    

     

     

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of

              Series C
      Notes

              to
      be Purchased

            
	
              The
      Northwestern Mutual Life

                Insurance
      Company

              for
      its Group Annuity Separate Account

              720
      East Wisconsin Avenue

              Milwaukee,
      Wisconsin  53202

              Attention:  Securities
      Department

              Fax
      Number:  (414) 665-7124

            	
              $1,000,000

            

    

     

    Payments

     

    All
payments on or in respect of the Notes to be by bank wire transfer of Federal or
other immediately available funds (identifying each payment as: “Vectren Capital
Corp., 7.30% Senior Notes due 2019, PPN 92240@ AJ4, principal, premium or
interest”) to:

    

    US
Bank

    777 East
Wisconsin Avenue

    Milwaukee,
Wisconsin  53202

    ABA#
075000022

    

    For the
account of: Northwestern Mutual Life

    Account
No. 182380324018

     

    Notices

     

    All
notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
to be addressed, Attention:  Investment Operations Department, Fax
Number:  (414) 625-6998.

     

    Name of
Nominee in which Notes are to be issued:  None

     

    Taxpayer
I.D. Number:  39-0509570

    
      
         

      

      
        A-11

        
          

        

      

      
         

      

    

    

    
      	
              Name
      of and Address

              of
      Purchaser

            	
              Principal
      Amount of

              Series C
      Notes

              to
      be Purchased

            
	
              Protective
      Life Insurance Company (PLI)

              Attn:  Investment
      Department - Kim Wilkerson

              2801
      Hwy. 280 South

              Birmingham,
      Alabama  35223

            	
              $10,000,000

            

    

     

    Payments

     

    All
payments on or in respect of the Notes to be by bank wire transfer of Federal or
other immediately available funds (identifying each payment as: “Vectren Capital
Corp., 7.30% Senior Notes due 2019, PPN 92240@ AJ4, principal, premium or
interest”) to:

    

    The Bank
of New York

    ABA #:
021 000 018

    BNF:
IOC566

    Attn:  PP
P & I Department

    FFC
Custody #:  0000294412

    Cust.
Name: Protective Life Ins., Co.

    REF:
Protective Life Ins., Co.

    PPN
92240@ AJ4

     

    All
notices and communications with respect to payments and written confirmation of
each such payment, to be addressed:

    Back.office@protective.com

    Protective
Life Insurane Co. (PLI)

    Attn:
Investment Department - Kim Wilkerson

    2801 Hwy.
280 South

    Birmingham,
AL  35223

     

    All other
notices and communications to be addressed as first provided above.

     

    Name of
Nominee in which Notes are to be issued:  HARE & CO.

     

    Taxpayer
I.D. Number:  63-0169720

    
      
         

      

      
        A-12

        
          

        

      

      
         

      

    

    Defined
Terms

     

    As used
herein, the following terms have the respective meanings set forth below or set
forth in the Section hereof following such term:

     

    “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.

     

    “Anti-Terrorism Order” means
Executive Order No. 13,224 of September 24, 2001, Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.

     

    “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.

     

    “Business Day” means
(a) for the purposes of Section 8.6 only, any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are required or
authorized to be closed, and (b) for the purposes of any other provision of
this Agreement, any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City or Evansville, Indiana are required or
authorized to be closed.

     

    “Capitalized Lease” means, at
any time, a lease with respect to which the lessee is required concurrently to
recognize the acquisition of an asset and the incurrence of a liability in
accordance with U.S. GAAP.

     

    
      
        
        

      

      
        
          Schedule
B

          (to Note Purchase Agreement)

        

        
          

        

      

      
        
        

      

    

     

    “Capital Lease Obligation” of
a Person means the amount of the obligations of such Person under Capitalized
Leases which would be shown as a liability on a balance sheet of such Person
prepared in accordance with U.S. GAAP.

     

    “Change in Control” is
defined in Section 8.7(h).

     

    “Closing” is defined in
Section 3.

     

    “Code” means the Internal
Revenue Code of 1986, as amended, reformed or modified from time to time, and
the rules and regulations promulgated thereunder from time to time.

     

    “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.

     

    “Confidential Information” is
defined in Section 21.

     

    “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 U.S. GAAP.

     

    “Control Event” is defined in
Section 8.7(i).

     

    “Controlled Group” means all
members of a controlled group of corporations or other business entities and all
trades or businesses (whether or not incorporated) under common control which,
together with Vectren or any of its Subsidiaries, are treated as a single
employer under section 414 of the Code.

     

    “Default” means an event or
condition the occurrence or existence of which would, with the lapse of time or
the giving of notice or both, become an Event of Default.

     

    “Default Rate” means, with
respect to any Note of a series, that rate of interest per annum that is the
greater of (i) 2% above the rate of interest stated in clause (a) of the
first paragraph of the Note of such series or (ii) 2% over the rate of
interest publicly announced by Bank of America, N.A. in New York (and its
successors) as its “base” or “prime” rate.

     

    “Disclosure Documents” is
defined in Section 5.3.

     

    “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.

     

    “ERISA” means the Employee
Retirement Income  Security Act of 1974, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect. 

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

     

    “ERISA Affiliate” means any
trade or business  (whether or not incorporated) that is treated as a
single employer together with the Company under section 414 of the
Code.

     

    “Event of Default” is defined
in Section 12.

     

    “Exchange Act” means the
Securities Exchange Act of 1934, as amended.

     

    “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.

     

    “Financial Contract
Obligations” of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, (ii) any agreements, devices or
arrangements providing for payments related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, interest rate
exchange agreements, forward currency exchange agreements, interest rate caps or
collar protection agreements, forward rate currency or interest rate options or
(iii) to the extent not otherwise included in the foregoing, any Rate
Hedging Agreement.

     

    “Governmental Authority”
means

     

    (a)the
government of

     

    (i)the
United States of America or any State or other political subdivision thereof,
or

     

    (ii)any
other jurisdiction in which either Obligor or any Subsidiary conducts all or any
part of its business, or which asserts jurisdiction over any properties of
either Obligor or any Subsidiary, or

     

    (b)any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of, or pertaining to, any such government.

     

    “Guarantee” is defined in
Section 1.

     

    “Guaranteed Obligations” is defined in Section
11.1(a).

     

    “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:

     

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

     

     

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

     

     

    (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.

     

    “Hazardous Material” means
any and all pollutants, toxic or hazardous wastes or other substances that might
pose a hazard to health and safety, the removal of which may be required or the
generation, manufacture, refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal, release, discharge, spillage,
seepage or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law including, but not limited to, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum
products, lead based paint, radon gas or similar restricted, prohibited or
penalized substances.

     

    “Holder” means, with respect
to any Note, the Person in whose name such Note is registered in the register
maintained by the Company pursuant to Section 14.1.

     

    “Indebtedness” with respect
to any Person means, at any time, without duplication,

     

    (a) 
its liabilities for borrowed money;

     

    (b) 
its liabilities for the deferred purchase price of property acquired by such
Person (excluding accounts payable arising in the ordinary course of business
but including all liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such property);

     

    (c) 
all liabilities appearing on its balance sheet in accordance with U.S. GAAP in
respect of Capital Lease Obligations and (ii) all liabilities which would
appear on its balance sheet in accordance with U.S. GAAP in respect of Synthetic
Leases assuming such Synthetic Leases were accounted for as Capitalized
Leases;

     

    
      
        
        

      

      
        B-4

        
          

        

      

      
        
        

      

    

     

    (d) 
all liabilities for borrowed money secured by any Lien with respect to any
property owned by such Person (whether or not it has assumed or otherwise become
liable for such liabilities);

     

    (e) 
Financial Contract Obligations of such Person;

     

    (f) 
all liabilities of such Person with respect to vendor-take-back financing
arrangements; and

     

    (g) 
any Guaranty of such Person with respect to liabilities of a type described in
any of clauses (a) through (f) hereof.

     

    Indebtedness
of any Person shall include all obligations of such Person of the character
described in clauses (a) through (g) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under U.S. GAAP.

     

    “INHAM Exemption” is defined
in Section 6.2(e).

     

    “Institutional Investor”
means (a) any Purchaser of a Note, (b) any Holder of a Note holding
(together with one or more of its affiliates) more than 3.0% of the aggregate
principal amount of the Notes then outstanding, (c) any bank, trust
company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form, and (d) any Related Fund of any Holder of any
Note.

     

    “Lien” means, with respect to
the property or assets of any Person, a mortgage, pledge, hypothecation,
encumbrance, lien (statutory or other), charge or other security interest of any
kind in or with respect to such property or assets (including, without
limitation, any conditional sale or other title retention agreement, and any
financing lease under which such Person is lessee having substantially the same
economic effect as any of the foregoing).

     

    “Make-Whole Amount” is
defined in Section 8.6.

     

    “Material” means material in
relation to the business, operations, affairs, financial condition, assets or
properties of Vectren and its Subsidiaries taken as a whole.

     

    “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
Guarantee, or (c) the validity or enforceability of this Agreement, the
Notes or the Guarantee.

     

    “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

     

    
      
        
        

      

      
        B-5

        
          

        

      

      
        
        

      

    

     

    §6.17 of
the Bank Credit Agreements) shall be changed to a percentage higher or lower
than 65%, then the 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%.  

     

    “Memorandum” is defined in
Section 5.3.

     

    “Mortgage Indenture” means
the Mortgage and Deed of Trust, dated as of April 1, 1932, between Southern
Indiana Gas and Electric Company and Bankers Trust Company (as supplemented from
time to time before or after the date hereof by various supplemental indentures
thereto).

     

    “Multiemployer Plan” means a
Plan maintained pursuant to a collective bargaining agreement or any other
arrangement to which Vectren or any member of the Controlled Group is a party to
which more than one employer is obligated to make contributions.

     

    “NAIC”
means the National Association of Insurance Commissioners or any successor
thereto.

     

    “NAIC Annual Statement” is
defined in Section 6.2(a).

     

    “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).

     

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

     

    “Notes” is defined in Section
1.

     

    “Obligors” is defined in the
first paragraph of this Agreement.

     

    “Officer’s Certificate” means
a certificate of a Senior Financial Officer or of any other officer of the
Company whose responsibilities extend to the subject matter of such
certificate.

     

    “PBGC” means the Pension
Benefit Guaranty Corporation referred to and defined in ERISA or any successor
thereto.

     

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

     

    
      
        
        

      

      
        B-6

        
          

        

      

      
        
        

      

    

     

    “Person” means an individual,
partnership, corporation, limited liability company, association, trust,
unincorporated organization, business entity or Governmental
Authority.

     

    “Plan” means an employee
pension benefit plan which is covered by Title IV of ERISA or subject to the
minimum funding standards under section 412 of the Code as to which Vectren or
any member of the Controlled Group may have any liability.

     

    “Property” of a Person means
any and all property, whether real, personal, tangible, intangible, or mixed, of
such Person, or other assets owned, leased or operated by such
Person.

     

    “Proposed Prepayment Date” is
defined in Section 8.7(c).

     

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

     

    “Purchaser” is defined in the
first paragraph of this Agreement.

     

    “QPAM Exemption” means
Prohibited Transaction Class Exemption 84-14 issued by the United States
Department of Labor.

     

    “Qualified Institutional
Buyer” means any Person who is a “qualified institutional buyer” within
the meaning of such term as set forth in Rule 144A(a)(1) under the Securities
Act.

     

    “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).

     

    “Rate Hedging Agreement”
means an agreement, device or arrangement providing for payments which are
related to fluctuations of interest rates, exchange rates or forward rates,
including, but not limited to, dollar-denominated or cross-currency interest
rate exchange agreements, forward currency exchange agreements, interest rate
caps or collar protection agreements, forward rate currency or interest rate
options, puts and warrants.

     

    “Related Fund” means, with
respect to any Holder of any Note, any fund or entity that (i) invests in
Securities or bank loans, and (ii) is advised or managed by such Holder,
the same investment advisor as such Holder or by an Affiliate of such Holder or
such investment advisor.

     

    “Required Holders” means, at
any time, the Holders of more than 50% in principal amount of the Notes at the
time outstanding (exclusive of Notes then owned by either Obligor or any of
their respective Affiliates).

     

    “Reportable Event” means a
reportable event as defined in section 4043 of ERISA and the regulations issued
under such section, with respect to a Plan, excluding, however, such events as
to which the PBGC has by regulation waived the requirement of section 4043(a) of
ERISA 

     

    
      
        
        

      

      
        B-7

        
          

        

      

      
        
        

      

    

     

    that it
be notified within 30 days of the occurrence of such event, provided, however, that a
failure to meet the minimum funding standard of section 412 of the Code or of
section 302 of ERISA shall be a Reportable Event regardless of the issuance of
any such waiver of the notice requirement in accordance with either section
4043(a) of ERISA or section 412(d) of the Code.

     

    “Responsible Officer” means
any Senior Financial Officer and any other officer of the Company or Vectren
with responsibility for the administration of the relevant portion of this
Agreement.

     

    “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 9.8.  Each of the
Permanent Restricted Subsidiaries shall at all times remain a Restricted
Subsidiary.

     

    “Securities” or “Security” shall have the
meaning specified in section 2(1) of the Securities Act. 

     

    “Securities Act” means the
Securities Act of 1933, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.

     

    “SEC Reports” means,
collectively, Vectren’s Annual Report on Form 10-K for the year ended
December 31, 2008, Vectren’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2008, and any future filings made by Vectren with the
Securities and Exchange Commission under section 13(a), 13(c), 14 or 15(d) of
the Exchange Act during the period after the date of the Memorandum and on or
prior to the Closing.

     

    “Senior Financial Officer”
means the Chief Financial Officer, Treasurer or Assistant Treasurer of the
Company or of Vectren, as the context may require.

     

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

     

    “Series A Notes” is
defined in Section 1.

     

    “Series B Notes” is
defined in Section 1

     

    “Series C Notes” is
defined in Section 1.

     

    “Single Employer Plan” means
a Plan maintained by Vectren or any member of the Controlled Group for employees
of Vectren or any member of the Controlled Group.

     

    “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).

     

    
      
        
        

      

      
        B-8

        
          

        

      

      
        
        

      

    

     

    “Subsidiary” means, as to any
Person, any corporation, association or other business entity in which such
Person or one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable it or them (as
a group) ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such
entity.  Unless the context otherwise clearly requires, any reference
to a “Subsidiary” is a reference to a Subsidiary of Vectren.

     

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

     

    “Subsidiary Guaranty” is
defined in Section 9.9 of this Agreement.

     

    “Successor Corporation” is
defined in Section 10.2 of this Agreement.

     

    “SVO” means the Securities
Valuation Office of the NAIC or any successor to such Office.

     

    “Synthetic Lease” means, at
any time, any lease (including leases that may be terminated by the lessee at
any time) of any property (a) that is accounted for as an operating lease
under U.S. GAAP and (b) in respect of which the lessee retains or obtains
ownership of the property so leased for U.S. federal income tax purposes, other
than any such lease under which such Person is the lessor.

     

    “Total Capitalization” means
the sum of Total Debt and Consolidated Net Worth. 

     

    “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 U.S.
GAAP.  

     

    “Unfunded Liabilities” means
the amount (if any) by which the present value of all vested and unvested
accrued benefits under all Single Employer Plans exceeds the fair market value
of all such Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plans using PBGC actuarial assumptions
for single employer plan terminations.

     

    “Unrestricted Subsidiary”
means any Subsidiary (other than the Permanent Restricted Subsidiaries) of
Vectren so designated by Vectren in accordance with
Section 9.8.

     

    “USA Patriot Act” means
United States Public Law 107-56, Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act)
Act of 2001, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time in effect.

     

    “U.S. GAAP” means generally
accepted accounting principles as in effect from time to time in the United
States of America.

     

    “Vectren Utility Holdings”
means Vectren Utility Holdings, Inc.

     

    
      
        
        

      

      
        B-9

        
          

        

      

      
        
        

      

    

     

    “Wholly-Owned
Subsidiary” of a Person means (i) any Subsidiary all of the outstanding
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or by such Person and one or more Wholly-Owned Subsidiaries of such
Person, or (ii) any partnership, limited liability company, association, joint
venture or similar business organization 100% of the ownership interests having
ordinary voting power of which shall at the time be so owned or
controlled.

     

    
      
        
        

      

      
        B-10

        
          

        

      

      
        
        

      

    

     

    Organization and Ownership of Shares
of Subsidiaries1; Affiliates

     

    

    Wholly Owned
Subsidiaries:

    
      
        	
                Name
      of entity

              	
                State
      of Incorporation/Jurisdiction

              
	
                Cypress
      Creek Mine, Inc.

              	
                Indiana

              
	
                Cypress
      Creek Mine, LLC

              	
                Indiana

              
	
                Energy
      Realty, Inc.

              	
                Indiana

              
	
                Energy
      Systems Group, Inc.

              	
                Indiana

              
	
                Energy
      Systems Group, LLC

              	
                Indiana

              
	
                Energy
      Systems Group, SE, Inc.

              	
                Indiana

              
	
                ESG
      Biofuels (Blackfoot), LLC

              	
                Indiana

              
	
                ESG
      Biofuels (JC), LLC

              	
                Indiana

              
	
                ESG
      Biofuels (Live Oak), LLC

              	
                Indiana

              
	
                ESG
      Carolina Holdings, LLC

              	
                North
      Carolina

              
	
                ESG
      Clean Fuels, LLC

              	
                Indiana

              
	
                ESG
      Engineering Corp

              	
                North
      Carolina

              
	
                ESG
      Pipeline (JC), LLC

              	
                Indiana

              
	
                IEI
      Capital Corp. (dormant)

              	
                Indiana

              
	
                Indiana
      Energy Services, Inc. (dormant)

              	
                Indiana

              
	
                Indiana
      Gas Company, Inc.

              	
                Indiana,
      Ohio

              
	
                Joint
      Ventures Affiliated II, Inc.

              	
                Indiana

              
	
                MCN
      747 22nd
      Street, LLC

              	
                Delaware

              
	
                MCN
      Equities, Inc.

              	
                Delaware

              
	
                Miller
      Pipeline Corporation

              	
                Indiana

              
	
                Mountain
      Home Energy Center, LLC

              	
                Indiana

              
	
                MP
      Acquisition Corp.Inc.

              	
                Indiana

              
	
                Oaktown
      Fuels Mine No.1, LLC

              	
                Indiana

              
	
                Oaktown
      Fuels Mine No.2, LLC

              	
                Indiana

              
	
                Prosperity
      Mine, LLC

              	
                Indiana

              
	
                SIP-GT
      I, Inc.

              	
                Indiana

              
	
                SIRO
      Partners, LLP (to be dissolved)

              	
                Indiana

              
	
                Southern
      Indiana Gas and Electric Company, Inc.

              	
                Indiana

              
	
                Southern
      Indiana Joint Ventures, Inc.

              	
                Indiana

              
	
                Southern
      Indiana Properties, Inc.

              	
                Indiana

              
	
                Southwest
      Lease Capital, Inc.

              	
                Indiana

              
	
                Utility
      Debt Collectors, Inc. (dormant)

              	
                Indiana

              
	
                Vectren
      Aero, LLC

              	
                Indiana

              
	
                Vectren
      Broadband, Inc.

              	
                Indiana

              
	
                Vectren
      Capital Corp.

              	
                Indiana

              
	
                Vectren
      Communications Services, Inc.

              	
                Indiana

              
	
                Vectren
      Communications, Inc.

              	
                Indiana

              
	
                Vectren
      Energy Delivery of Ohio, Inc.

              	
                Ohio

              
	
                Vectren
      Energy Marketing and Services, Inc.

              	
                Indiana

              

      

    

     

    
      
        

      

      
        	
                 1

              	
                 All
      of the Subsidiaries are Restricted
Subsidiaries.

              

      

    

    
 

    
      
        
           

        

        
          
            Schedule
5.4

            (to Note Purchase
Agreement)  

          

          
            

          

        

        
           

        

      

    

    

    
      
        	
                Vectren
      Energy Retail, Inc.

              	
                Indiana

              
	
                Vectren
      Energy Services, Inc.

              	
                Indiana

              
	
                Vectren
      Enterprises, Inc.

              	
                Indiana

              
	
                Vectren
      Environmental Services, Inc.

              	
                Indiana

              
	
                Vectren
      Financial Group, Inc.

              	
                Indiana

              
	
                Vectren
      Fuels, Inc.

              	
                Indiana

              
	
                Vectren
      Generation Services, Inc.

              	
                Indiana

              
	
                Vectren
      Power Marketing, Inc.

              	
                Indiana

              
	
                Vectren
      Products and Services, LLC

              	
                Indiana

              
	
                Vectren
      Retail, LLC

              	
                Indiana,
      Ohio

              
	
                Vectren
      Synfuels, Inc.

              	
                Indiana

              
	
                Vectren
      Utility Holdings, Inc.

              	
                Indiana

              
	
                Vectren
      Utility Services, Inc.

              	
                Indiana

              
	
                Vectren
      Ventures, Inc.

              	
                Indiana

              

      

    

    

      Less than Wholly Owned
Entities in which Vectren has an interest:2

      
        
          	
                  Name
      of Entity

                	
                  State
      of Incorporation/Jurisdiction

                	
                  Percentages
      of Capital Stock/Share of Profit/Loss Owned by Vectren Corporation and its
      Subsidiaries

                
	
                  C.H.
      Barnett, LLC

                	
                  Indiana

                	
                  45%

                   

                
	
                  Crawfordsville
      Community Housing, LP

                	
                  Indiana

                	
                  49.5%

                   

                
	
                  Deerfield
      Commons I, LP

                	
                  Indiana

                	
                  99%2

                   

                
	
                  Haddington
      Energy Partners II, LP

                	
                  Delaware

                	
                  29.7%

                   

                
	
                  Haddington
      Energy Partners, LP

                	
                  Delaware

                	
                  42.1%

                   

                
	
                  Heartland
      Gas Pipeline, LLC

                	
                  Indiana

                	
                  30.5%

                   

                
	
                  House
      Investments Martz TCF I, LP

                	
                  Indiana

                	
                  99%3

                   

                
	
                  House
      Investments Martz TCF II, LP

                	
                  Indiana

                	
                  82%3

                   

                
	
                  Housing
      Investments Bradford Run, LP

                	
                  Indiana

                	
                  83.33%3

                   

                
	
                  Lebanon
      Housing Partnership, LP

                	
                  Indiana

                	
                  37.1%3

                   

                

        

      

      

        
          

        

      

      
        
          	
                  2  
      

                	
                  Since
      Vectren’s governance and voting rights in each of these entities are at
      50% or less, Vectren disclaims that these entities are Subsidiaries of
      Vectren or that Vectren controls these
entities.

                

        

         

      

      
        3     Limited
partnership interests.

         

        
          
            
            

          

          
            5.4-2

            
              

            

          

          
            
            

          

        

      

    

    
 

    
      
        
          
            	
                    Lee
      8 Storage Partnership

                  	
                    Michigan

                  	
                    31.11%

                     

                  
	
                    Liberty
      Gas Storage, LLC

                  	
                    Delaware

                  	
                    15.25%

                     

                  
	
                    Martin
      Lamplighter Investments, LP

                  	
                    Indiana

                  	
                    99%3

                     

                  
	
                    Multi
      Housing Partners I, II, III, IV, LP

                  	
                    Indiana

                  	
                    50%3

                     

                  
	
                    Northern
      Storage, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  
	
                    Ohio
      Valley Hub, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  
	
                    Pedcor
      Investments 1996-XXV, LP

                  	
                    Indiana

                  	
                    49.5%

                     

                  
	
                    Proliance
      Capital, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  
	
                    ProLiance
      Energy, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  
	
                    Proliance
      Holdings, LLC

                  	
                    Indiana

                  	
                    61%4

                     

                  
	
                    Proliance
      Transportation and Storage, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  
	
                    Proliance
      Transportation and Storage-Heartland, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  
	
                    Proliance
      Transportation and Storage-Liberty, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  
	
                    Reliant
      Services, LLC

                  	
                    Indiana

                  	
                    50%4

                     

                  
	
                    Relius
      Energy, LLC

                  	
                    Indiana

                  	
                    60.39%

                     

                  
	
                    SFI
      Coal Sales, LLC

                  	
                    Indiana

                  	
                    99%

                     

                  
	
                    Sigcorp
      Energy Services, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  
	
                    Sigcorp
      Gas Marketing, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  
	
                    Signature
      Energy Management, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  
	
                    White
      River Storage, LLC

                  	
                    Indiana

                  	
                    61%

                     

                  

          

        

      

       

      

        Directors and Executive
Officers of Vectren Corporation:

        
          
            
              
                
                  	
                          Directors

                        	
                                      Executive
      Officers

                        
	 
      	 
      	 
      
	
                          John
      D. Engelbrecht

                          William
      G. Mays

                        	 
      	
                          Niel
      C. Ellerbrook

                        	
                          Chairman
      of the Board, and Chief Executive Officer

                        
	
                          J.
      Timothy McGinley

                          Richard
      P. Rechter

                        	 
      	
                          Jerome
      A. Benkert, Jr.

                        	
                          Executive
      Vice President and Chief Financial Officer

                        
	
                          R.
      Daniel Sadlier

                          Richard
      W. Shymanski

                        	 
      	
                          Carl
      L. Chapman

                        	
                          President
      and Chief Operating
Officer

                        

                

              

            

          

        

      
        
          

        

        4   
 Since governance and voting rights are at 50% for each member, Vectren
accounts for this investment using the equity method of
accounting.

      

      
        
           

        

        
          5.4-3

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Jean
      L. Wojtowicz

                                John
      M. Dunn

                                Niel
      C. Ellerbrook

                              	 
      	
                                Ronald
      E. Christian

                              	
                                Executive
      Vice President, Chief Administrative Officer, General Counsel and
      Corporate Secretary

                              
	
                                Anton
      H. George

                                Robert
      L. Koch II

                              	 
      	
                                William
      S. Doty

                              	
                                Executive
      Vice President of Utility Operations

                              
	
                                Martin
      C. Jischke

                                Michael
      L. Smith

                              	 
      	 
      	 
      

                      

                    

                  

                

              

            

          

        

      

    

    

    Certain
Restrictions

    
      	
              1.

            	
              The
      payment of cash dividends on common stock of Southern Indiana Gas and
      Electric Company (“SIGECO”) to Vectren Utility
      Holdings, Inc. (“VUHI”) is, in effect,
      restricted by SIGECO’s First Mortgage Indenture (the
      “Mortgage”).  The Mortgage restricts dividends to accumulated
      surplus available for distribution to common stock earned subsequent to
      December 31, 1947 if amounts deducted from earnings for current repairs
      and maintenance and provisions for renewals, replacements and depreciation
      of all the property of SIGECO are less than amounts specified in the
      Mortgage.  (Section 1.02 of the Supplemental Indenture dated as
      of July 1, 1948, as supplemented.)  No amount was restricted
      against cash dividends on common stock as of December 31, 2008 under this
      restriction.

            

    

    

    
 

    
      
        
        

      

      
        5.4-4

        
          

        

      

      
        
        

      

    

      

    Licenses,
Permits, Etc.

    

    

    None.

    

    
      
         

      

      
        
          Schedule
5.11

          (to Note Purchase
Agreement)  

        

        
          

        

      

      
         

      

    

    Existing
Indebtedness

    

    (a)    None

    (b)    None

    (c)(i)       
Section 6.11 of the Credit Agreement, dated September 11, 2008, among Vectren
Capital, Corp., Vectren Corporation and Various Financial Institutions imposes,
subject to certain exceptions, limits on the incurring of indebtedness by
Vectren Corporation, Vectren Capital, Corp. and Subsidiaries of Vectren
Corporation (other than Vectren Utility Holdings, Inc. and its Subsidiaries).
There is an exception for Indebtedness existing on September 11, 2008 and a
$300,000,000 basket for additional Indebtedness. Section 6.17 of the Credit
Agreement provides that Vectren will not permit the ratio of its Consolidated
Indebtedness to Consolidated Indebtedness plus Consolidated Net Worth to be
greater than .65 to 1.0.

    (c)(ii)      
Section 6.11 of the Credit Agreement, dated November 10, 2005, among Vectren
Capital, Corp., Vectren Corporation and Various Financial Institutions imposes,
subject to certain exceptions, limits on the incurring of indebtedness by
Vectren Corporation, Vectren Capital, Corp. and Subsidiaries of Vectren
Corporation (other than Vectren Utility Holdings, Inc. and its Subsidiaries).
There is an exception for Indebtedness existing on November 10, 2005 and a
$300,000,000 basket for additional Indebtedness. Section 6.17 of the Credit
Agreement provides that Vectren will not permit the ratio of its Consolidated
Indebtedness to Consolidated Indebtedness plus Consolidated Net Worth to be
greater than .65 to 1.0. Section 6.15 of the Credit Agreement dated as of
November 10, 2005 among Vectren Utility Holdings, Inc., Indiana Gas Company,
Inc., Southern Indiana Gas and Electric Company and Vectren Energy Delivery of
Ohio, Inc. and Various Financial Institutions also provides that VUHI will not
permit the ratio of its Consolidated Indebtedness to Consolidated Indebtedness
plus Consolidated Net Worth to be greater than .65 to 1.0.

    (c)(iii)     
Section 10.7 of the Note Purchase Agreement, dated as of October 11, 2005 (the
“2005 NPA”), among Vectren Corporation, Vectren Capital Corp. and the
noteholders party thereto, contains a restriction on the incurrence of
Indebtedness to the effect that Indebtedness will not be incurred if the ratio
of Total Debt to Total Capitalization would exceed 75%.

    (c)(iv)    
Section 10.7 of the Note Purchase Agreement, dated as of December 21, 2000, as
amended by the First Amendment to Note Purchase Agreement, dated as of October
11, 2005, among Vectren Corporation, Vectren Capital Corp. and the noteholders
party thereto, contains a restriction on the incurrence of Indebtedness
identical to that contained in Section 10.7 of the 2005 NPA.

    (c)(v)    
Section 10.6 of the Note Purchase Agreement, dated as of April 25, 1997, as
amended by the First Amendment to Note Purchase Agreement, dated as of October
11, 2005, among Vectren Corporation (successor to Sigcorp, Inc.), Vectren
Capital Corp. (f/k/a Sigcorp Capital, Inc.) and the noteholders party thereto,
contains a restriction on the incurrence of Indebtedness identical to that
contained in Section 10.7 of the 2005 NPA.

    (c)(vi)   
The Mortgage described in Schedule 5.4 hereto is incorporated by this
reference.

    

     

    

    
      
         

      

      
        
          Schedule
5.15

          (to Note Purchase
Agreement)  

        

        
          

        

      

      
         

      

    

    Form
of Series A Note

     

    [Add
legend from Section 14.4 of the Note Purchase Agreement if
required]

     

    Vectren
Capital, Corp.

     

    6.37%
Guaranteed Senior Notes, Series A due March 11, 2014

    
      	
              No.
      [_____]

            	
              _______,
      20___

            
	
              $[_______]

            	
              PPN:
      92240@ AG0

            

    

     

    For value
received, the undersigned, Vectren Capital, Corp. (herein called the “Company”), a corporation
organized and existing under the laws of the State of Indiana, hereby promises
to pay to [____________], or registered assigns, the principal sum of
[____________] Dollars (or so much thereof as shall not have been prepaid) on
March 11, 2014, with interest (computed on the basis of a 360-day year of twelve
30-day months) (a) on the unpaid balance hereof at the rate of 6.37% per
annum from the date hereof, payable semiannually, on the 11th day of March and
September in each year, commencing with the March 11 or September 11 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law, on any overdue payment of
interest and, during the continuance of an Event of Default, on such unpaid
balance and on any overdue payment of any Make-Whole Amount, at a rate per annum
from time to time equal to the greater of (i) 2% per annum above the rate of
interest stated in clause (a) or (ii) 2% over the rate of interest publicly
announced by Bank of America, N.A. in New York as its “base” or “prime” rate
(or, at the option of the registered Holder hereof, on demand).

     

    Payments
of principal of, interest on and any Make-Whole Amount with respect to this Note
are to be made in lawful money of the United States of America at the principal
office of Bank of America, N.A. in New York City or at such other place as the
Company shall have designated by written notice to the Holder of this Note as
provided in the Note Purchase Agreement referred to below.

     

    This Note
is one of a series of Guaranteed Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of March 11, 2009 (as from time to time
amended, the “Note Purchase
Agreement”), between the Company, Vectren Corporation (“Vectren”) and the respective
Purchasers named therein and is entitled to the benefits
thereof.  Each Holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in
Section 21 of the Note Purchase Agreement and (ii) made the
representation set forth in Section 6.1 and 6.2 of the Note Purchase
Agreement.  Unless otherwise indicated, capitalized terms used in this
Note shall have the respective meanings ascribed to such terms in the Note
Purchase Agreement.

     

    This Note
is entitled to the benefits of the Guarantee.  Reference is hereby
made to Section 11 of the Note Purchase Agreement for a statement of the rights,
duties, and obligations of Vectren with respect to the Guarantee.

     

    
      
        
        

      

      
        
          Exhibit
1-A

          (to Note
Purchase Agreement)

        

        
          

        

      

      
        
        

      

    

     

    The
Company and the Guarantor waive all relief from valuation and appraisement
laws.

     

    This Note
is a registered Note and, as provided in the Note Purchase Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
Holder hereof or such Holder’s attorney duly authorized in writing, a new Note
of this Series for a like principal amount will be issued to, and registered in
the name of, the transferee.  Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

     

    This Note
is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not
otherwise.

     

    If an
Event of Default occurs and is continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement.

    
      
         

      

      
        E-1-A-2

        
          

        

      

      
         

      

    

     

    This Note
shall be construed and enforced in accordance with, and the rights of the
Company, Vectren and the Holder of this Note shall be governed by, the law of
the State of Indiana 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.

    

    
      	 
      	
              Vectren
      Capital, Corp.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Vectren
      Corporation

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title

            

    

    

    

    
      
         

      

      
        E-1-A-3

        
          

        

      

      
         

      

    

    Form
of Series B Note

     

    [Add
legend from Section 14.4 of the Note Purchase Agreement if
required]

     

    Vectren
Capital, Corp.

     

    6.92%
Guaranteed Senior Notes, Series B due March 11, 2016

    
      	
              No.
      [_____]

            	
              _______,
      20___

            
	
              $[_______]

            	
              PPN:
      92240@ AH8

            

    

    

     

    For value
received, the undersigned, Vectren Capital, Corp. (herein called the “Company”), a corporation
organized and existing under the laws of the State of Indiana, hereby promises
to pay to [____________], or registered assigns, the principal sum of
[____________] Dollars (or so much thereof as shall not have been prepaid) on
March 11, 2016, with interest (computed on the basis of a 360-day year of twelve
30-day months) (a) on the unpaid balance hereof at the rate of 6.92% per
annum from the date hereof, payable semiannually, on the 11th day of March and
September in each year, commencing with the March 11 or September 11 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law, on any overdue payment of
interest and, during the continuance of an Event of Default, on such unpaid
balance and on any overdue payment of any Make-Whole Amount, at a rate per annum
from time to time equal to the greater of (i) 2% per annum above the rate of
interest stated in clause (a) or (ii) 2% over the rate of interest publicly
announced by Bank of America, N.A. in New York as its “base” or “prime” rate
(or, at the option of the registered Holder hereof, on demand).

     

    Payments
of principal of, interest on and any Make-Whole Amount with respect to this Note
are to be made in lawful money of the United States of America at the principal
office of Bank of America, N.A. in New York City or at such other place as the
Company shall have designated by written notice to the Holder of this Note as
provided in the Note Purchase Agreement referred to below.

     

    This Note
is one of a series of Guaranteed Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of March 11, 2009 (as from time to time
amended, the “Note Purchase
Agreement”), between the Company, Vectren Corporation (“Vectren”) and the respective
Purchasers named therein and is entitled to the benefits
thereof.  Each Holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in
Section 21 of the Note Purchase Agreement and (ii) made the
representation set forth in Sections 6.1 and 6.2 of the Note Purchase
Agreement.  Unless otherwise indicated, capitalized terms used in this
Note shall have the respective meanings ascribed to such terms in the Note
Purchase Agreement.

     

    
      
        
        

      

      
        
          Exhibit
1-B

          (to Note
Purchase Agreement)

        

        
          

        

      

      
        
        

      

    

     

    This Note
is entitled to the benefits of the Guarantee.  Reference is hereby
made to Section 11 of the Note Purchase Agreement for a statement of the rights,
duties, and obligations of Vectren with respect to the Guarantee.

     

    The
Company and the Guarantor waive all relief from valuation and appraisement
laws.

     

    This Note
is a registered Note and, as provided in the Note Purchase Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
Holder hereof or such Holder’s attorney duly authorized in writing, a new Note
of this Series for a like principal amount will be issued to, and registered in
the name of, the transferee.  Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

     

    This Note
is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not
otherwise.

     

    If an
Event of Default occurs and is continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement.

     

    
 

    
      
        
           

        

        
          E-1-B-2

          
            

          

        

        
           

        

      

    

    

     

    This Note
shall be construed and enforced in accordance with, and the rights of the
Company, Vectren and the Holder of this Note shall be governed by, the law of
the State of Indiana 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.

    

    
      	 
      	
              Vectren
      Capital, Corp.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Vectren
      Corporation

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title

            

    

    

    
      
         

      

      
        E-1-B-3

        
          

        

      

      
         

      

    

    Form
of Series C Note

     

    [Add
legend from Section 14.4 of the Note Purchase Agreement if
required]

     

    Vectren
Capital, Corp.

     

    7.30%
Guaranteed Senior Notes, Series C due March 11, 2019

     

    
      	
              No.
      [_____]

            	
              _______,
      20___

            
	
              $[_______]

            	
              PPN:
      92240@ AJ4

            

    

    

     

    For value
received, the undersigned, Vectren Capital, Corp. (herein called the “Company”), a corporation
organized and existing under the laws of the State of Indiana, hereby promises
to pay to [____________], or registered assigns, the principal sum of
[____________] Dollars (or so much thereof as shall not have been prepaid) on
March 11, 2019, with interest (computed on the basis of a 360-day year of twelve
30-day months) (a) on the unpaid balance hereof at the rate of 7.30% per
annum from the date hereof, payable semiannually, on the 11th day of March and
September in each year, commencing with the March 11 or September 11 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law, on any overdue payment of
interest and, during the continuance of an Event of Default, on such unpaid
balance and on any overdue payment of any Make-Whole Amount, at a rate per annum
from time to time equal to the greater of (i) 2% per annum above the rate of
interest stated in clause (a) or (ii) 2% over the rate of interest publicly
announced by Bank of America, N.A. in New York as its “base” or “prime” rate
(or, at the option of the registered Holder hereof, on demand).

     

    Payments
of principal of, interest on and any Make-Whole Amount with respect to this Note
are to be made in lawful money of the United States of America at the principal
office of Bank of America, N.A. in New York City or at such other place as the
Company shall have designated by written notice to the Holder of this Note as
provided in the Note Purchase Agreement referred to below.

     

    This Note
is one of a series of Guaranteed Senior Notes (herein called the “Notes”) issued pursuant to
the Note Purchase Agreement, dated as of March 11, 2009 (as from time to time
amended, the “Note Purchase
Agreement”), between the Company, Vectren Corporation (“Vectren”) and the respective
Purchasers named therein and is entitled to the benefits
thereof.  Each Holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in
Section 21 of the Note Purchase Agreement and (ii) made the
representation set forth in Sections 6.1 and  6.2 of the Note Purchase
Agreement.  Unless otherwise indicated, capitalized terms used in this
Note shall have the respective meanings ascribed to such terms in the Note
Purchase Agreement.

     

    
      
        
        

      

      
        
          Exhibit
1-C

          (to Note
Purchase Agreement)

        

        
          

        

      

      
        
        

      

    

     

    This Note
is entitled to the benefits of the Guarantee.  Reference is hereby
made to Section 11 of the Note Purchase Agreement for a statement of the rights,
duties, and obligations of Vectren with respect to the Guarantee.

     

    The
Company and the Guarantor waive all relief from valuation and appraisement
laws.

     

    This Note
is a registered Note and, as provided in the Note Purchase Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
Holder hereof or such Holder’s attorney duly authorized in writing, a new Note
of this Series for a like principal amount will be issued to, and registered in
the name of, the transferee.  Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

     

    This Note
is subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not
otherwise.

     

    If an
Event of Default occurs and is continuing, the principal of this Note may be
declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement.

    
      
         

      

      
        E-1-C-2

        
          

        

      

      
         

      

    

     

    This Note
shall be construed and enforced in accordance with, and the rights of the
Company, Vectren and the Holder of this Note shall be governed by, the law of
the State of Indiana 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.

    

    
      	 
      	
              Vectren
      Capital, Corp.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Vectren
      Corporation

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Title

            

    

    

    
      
         

      

      
        E-1-C-3

        
          

        

      

      
         

      

    

    Form
of Opinion of Counsel to the Company and the Guarantor

    

     

    1.  
Each Obligor and each of the Restricted Subsidiaries listed in Annex I
hereto is duly organized and validly existing under the laws of the State of
Indiana.  The Company has the corporate power and authority to issue
and sell the Notes and to execute, deliver, and perform its obligations under
the Note Purchase Agreement and the Notes.  Vectren has the corporate
power and authority to execute, deliver, and perform its obligations under the
Note Purchase Agreement including, without limitation, the
Guarantee.

     

    2. 
Based solely on our review of certificates issued by the Secretaries of State of
each applicable jurisdiction, each Obligor and each Restricted Subsidiary listed
in Annex I hereto is duly qualified and (where applicable) is in good
standing as a foreign corporation 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.

     

    3. 
The Note Purchase Agreement and the Notes have been duly authorized by all
necessary corporate action on the part of each Obligor and have been duly
executed and delivered by each Obligor.

     

    4. 
The execution, delivery, and performance of the Note Purchase Agreement, the
Notes and the Guarantee and the consummation of the transactions contemplated
thereby do not and (absent change in any applicable law, rule, regulation,
agreement, or other instrument binding upon the Obligors or court order) will
not violate or constitute a default under, (i) any laws, rules, or regulations
within the scope of this opinion, (ii) the Articles of Incorporation or By-Laws
of the Company or Vectren, as applicable, or (iii) any Other Agreement that is
binding upon either Obligor or any court order known to us that is binding
upon any Obligor.

     

    5. 
All consents or authorizations of any governmental authority of the United
States or the State of Indiana required on the part of either Obligor to issue
and sell the Notes and execute, deliver and perform the Note Purchase Agreement
have been obtained.

     

    6. 
To the best of our knowledge, no litigation, investigation, or proceeding of or
before any arbitrator or governmental authority is pending or threatened by or
against the Obligors with respect to the validity of the Note Purchase
Agreement, the Notes or the Guarantee.

     

    7. 
The Note Purchase Agreement and the Notes constitute legal, valid, and binding
agreements of the Company and Vectren, enforceable against the Company and
Vectren in accordance with its respective terms, except as the same may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting the enforcement of creditors’ rights generally, (ii)
general principles of equity (regardless of whether enforceability is considered
in proceedings at law or in equity); and (iii) the qualification that the
availability of the remedy of specific performance or injunctive relief or of
other equitable relief is subject to the discretion of the court before which
any proceeding therefor may be brought.

     

    
      
        
        

      

      
        Exhibit
4.4(a)(i)-1

        
          

        

      

      
        
        

      

    

     

    8. 
Based upon the representations and warranties of the Obligors set forth in
Section 5.13 of the Note Purchase Agreement and your representations set forth
in Section 6.1 of the Note Purchase Agreement, it is not necessary in connection
with the offering, sale and delivery of the Notes, under the circumstances
contemplated by the Note Purchase Agreement to register the Notes or the
Guarantee under the Securities Act of 1933, as amended, or to qualify an
indenture in respect of the Notes or the Guarantee under the Trust
Indenture Act of 1939, as amended.

     

    9. 
Neither the execution and delivery by the Company and Vectren of the Note
Purchase Agreement and the execution and delivery by the Company of the Notes,
nor the execution and delivery by Vectren of the Guarantee, nor the performance
by the Obligors of their respective obligations thereunder (including the use of
the proceeds from the sale of the Notes in accordance with the Note Purchase
Agreement) will violate any provision of Regulations T, U and X of the
Board of Governors of the Federal Reserve System.

     

    10. 
Neither Obligor is an “investment company” or entity “controlled” by an
“investment company” as such terms are defined in the Investment Company of
1940, as amended.

     

    The term
“Other Agreement” as used in this opinion letter shall include only those
contracts and agreements to which an Obligor is a party or by which any of the
Obligors is bound, the breach or default of which would result in a Material
Adverse Effect, in each case as determined by officers of the Obligors and
identified to us in a Certificate to Counsel.

    
      
         

      

      
        E-4.4(a)(i)-2 

        
          

        

      

      
         

      

    

    Restricted
Subsidiaries

     

    Vectren
Corporation, an Indiana corporation

     

    Vectren
Capital, Corp., an Indiana corporation

     

    Indiana
Gas Company, Inc., an Indiana and Ohio corporation5

     

    Southern
Indiana Gas and Electric Co., Inc., an Indiana corporation

     

     

     

     

     

     

     

    

      
        

      

    

    
      1Indiana
Gas Company, Inc. (“IGC”) is incorporated under the laws of both the State of
Indiana and the State of Ohio.  Barnes & Thornburg LLP expressly
disclaims any opinion in respect of IGC’s corporate organization and/or
existence in the State of Ohio. 

    

    
      
         

      

      
        
          
            Annex
1

            (to Note Purchase
Agreement)    

          

        

        
          

        

      

      
         

      

    

    Form
of Opinion of Ohio Counsel to the Company

     

    1. 
Indiana Gas Company, Inc. is a corporation duly incorporated, validly existing,
and in good standing under the laws of the State of Ohio.

     

    2. 
Vectren Energy Delivery of Ohio, Inc. (“VEDO”) is a corporation duly
incorporated, validly existing, and in good standing under the laws of the State
of Ohio.

     

    3. 
Based solely upon an officer’s certificate, VEDO is qualified to do business and
is in good standing as a foreign corporation in each jurisdiction where the
character of its properties or the nature of its activities make such
qualification necessary or desirable.

    
      
         

      

      
        
          
            Exhibit
4.4(a)(ii)

            (to Note Purchase
Agreement)    

          

        

        
          

        

      

      
         

      

    

    Form
of Opinion of Special Counsel to the Purchasers

     

    1. 
The Agreement constitutes a legal, valid and binding agreement of the Company
and Vectren, enforceable against the Company and Vectren in accordance with its
terms.6

     

    2. 
The Guarantee constitutes a legal, valid and binding agreement of Vectren,
enforceable against Vectren in accordance with its terms.

     

    3. 
The Notes being purchased by you today constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms.

     

    4. 
It is not necessary in connection with the valid offer, sale and delivery of
said Notes, under the circumstances contemplated by the Agreement, to register
said Notes or the Guarantee under the Securities Act or to qualify an indenture
in respect of the Notes or the Guarantee under the Trust Indenture Act of 1939,
as amended.

     

    5. 
No consent, approval or authorization of, or registration, filing or declaration
with, any New York State Governmental Authority is required for the validity of
the execution and delivery of or for the performance by the Obligors of the
Agreement or the Notes or by Vectren of the Guarantee.

     

    6. 
Each of the opinions of (i) Barnes & Thornburg LLP, Indiana counsel for the
Obligors and (ii) Kegler, Brown, Hill and Ritter, Ohio counsel for the Obligors,
in each case dated today and delivered to you pursuant to Section 4.4(a) of the
Agreement, is satisfactory to us in form and together are satisfactory to us in
scope with respect to the matters specified therein.

    

    
 

      
      
        

      

    

    
      
        	
                6
      

              	
                 

                Enforceability
      opinions given by Special Counsel to the Purchasers will be given in
      reliance on the opinion of Barnes & Thornburg LLP, Indiana counsel for
      the Obligors.

              

      

       

       

      
        Exhibit
4.4(b)

        (to Note Purchase
Agreement)vc_8k0311ex46.htm

    
       

      Exhibit 4.6

       

      

       

      VECTREN
CORPORATION

      One
Vectren Square

      Evansville,
Indiana  47708

       

      VECTREN
CAPITAL, CORP.

      One
Vectren Square

      Evansville,
Indiana  47708

       

      FIRST
AMENDMENT TO NOTE PURCHASE AGREEMENT

       

      Dated as
of

      March 11,
2009

       

      

      
        
          	 
      	
                  RE:

                	
                  Note Purchase Agreement dated as of October 11,
      2005

                
	 
      	 
      	
                  $25,000,000
      4.99% Senior Notes due 2010

                
	 
      	 
      	
                  $25,000,000
      5.13% Senior Notes due 2012

                
	 
      	 
      	
                  $75,000,000
      5.31% Senior Notes due 2015

                

        

      

       

      

       

      TO THE
HOLDERS LISTED

      IN THE
ATTACHED SCHEDULE A:

       

      Ladies
and Gentlemen:

       

      Reference
is made to the Note Purchase Agreement, dated as of October 11, 2005 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”) (the “2005 Note Purchase Agreement”).  Unless
otherwise herein defined or the context hereof otherwise requires, the
capitalized terms in this First Amendment (this “First Amendment”) shall have
the respective meanings specified in the 2005 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 “First Amendment Closing Date” as used
herein shall mean March 11, 2009.

       

      SECTION I.  AMENDMENTS TO
THE 2005 NOTE PURCHASE AGREEMENT.

       

      Section 1.1.  Amendments
to Section 7.1 of the 2005 Note Purchase Agreement. Section 7.1 of the 2005
Note Purchase Agreement shall be, and the same hereby is, amended
by:

       

      (a)  deleting
the phrase “Sections 10.5 and 10.7” in Section 7.1(c) and replacing it with the
phrase “Sections 10.5, 10.6, 10.7 and 10.8”;

       

      (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

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      Vectren
and its Subsidiaries determined as of the end of each fiscal quarter in
accordance with U.S. 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 U.S. 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 2005 Note Purchase Agreement.  Section 8.2
of the 2005 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 of the 2005 Note Purchase Agreement.  Section 8 of
the 2005 Note Purchase Agreement shall be, and the same hereby is, amended by
adding a new Section 8.7 immediately following Section 8.6 to read as
follows:

       

      8.7  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 8.7.  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 8.7
and shall be accompanied by the certificate described in subparagraph (g) of
this Section 8.7.

       

      (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 8.7, accompanied by the certificate
described in subparagraph (g) of this Section 8.7, and
(ii) contemporaneously with such action, it prepays all Notes required to
be prepaid in accordance with this Section 8.7.

       

      (c)  Offer to Prepay
Notes.  The offer to prepay Notes contemplated by subparagraphs
(a) and (b) of this Section 8.7 shall be an offer to prepay, in accordance
with and subject to this Section 8.7, 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

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      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 8.7, 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 8.7 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 8.7 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 8.7 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 8.7.

       

      (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 8.7 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 8.7 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 8.7 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 8.7; (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 8.7 have been fulfilled; and (vi) in
reasonable detail, the nature and date or proposed date of the Change in
Control.

       

      (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

      
        
           

        

        
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      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 1.4.  Amendment to
Section 9.2 of the 2005 Note Purchase Agreement.  Section 9.2
of the 2005 Note Purchase Agreement shall be, and the same hereby is, amended by
deleting the word “Subsidiaries” in such Section 9.2 and replacing it with the
phrase “Restricted Subsidiaries”.

       

      Section 1.5.  Amendment to
Section 9.3 of the 2005 Note Purchase Agreement.  Section 9.3
of the 2005 Note Purchase Agreement shall be, and the same hereby is, amended by
deleting the word “Subsidiaries” in each place where it appears in such Section
9.3 and replacing it with the phrase “Restricted Subsidiaries”.

       

      Section
1.6.  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 Clams

       

      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, 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, assessment, charge, levy or claim if (i) the 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 U.S. 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.

      
        
           

        

        
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      Section 1.7.  Amendment to
Section 9.5 of the 2005 Note Purchase
Agreement.    Section 9.5 of the 2005 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 1.8.  Amendment to
Section 9.7 of the 2005 Note Purchase Agreement.  Section 9.7
of the 2005 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 “will rank in right of payment either pari
passu with or senior to” in the first sentence in such Section 9.7.

       

      Section 1.9.  Amendment to
Section 9 of the 2005 Note Purchase
Agreement.    Section 9 of the 2005 Note Purchase
Agreement shall be, and the same hereby is, amended by adding a new Section 9.8
and Section 9.9 immediately following Section 9.7 to read as
follows:

       

      9.8  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 each holder 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 9.8 and setting forth all
information required in order to establish such compliance.

      
        
           

        

        
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      9.9  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

       

      (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.

       

      Section 1.10.  Amendment
to Section 10 of the 2005 Note Purchase
Agreement.    Section 10 of the 2005 Note Purchase
Agreement shall be, and the same hereby is, amended and restated in its entirety
to read as follows:

       

      

       

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      10.  NEGATIVE
COVENANTS.

       

      Each of
the Company and Vectren covenants (only to the extent applicable to itself and,
if specified, its Subsidiaries) that from and after the Closing and for so long
as any of the Notes are outstanding:

       

      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.

       

      10.2  Merger,
Consolidation, Etc.

       

      Neither
Obligor shall, nor, except as otherwise permitted under Section 10.6, 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.

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      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.

       

      The
provisions of this Section 10.2 shall not limit the rights of the Holders of
Notes under Section 8.7.

       

      10.3  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 date of
this Agreement as described as of the date hereof in the
Memorandum.

       

      10.4  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.

       

      10.5  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 U.S. 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 U.S. 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;

      
        
           

        

        
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      (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 9.8 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;

       

      (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

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      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.

       

      10.6  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.

      
        
           

        

        
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      Prepayment
of Notes pursuant to this Section 10.6 shall be made in accordance with
Section 8.2 (but without payment of the Make-Whole Amount).

       

      As used
in this Section 10.6, 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 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.

       

      10.7  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.

       

      10.8  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 U.S. 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 U.S. GAAP.

       

      Section 1.11.  Amendment
to Section 12 of the 2005 Note Purchase Agreement.  Sections
12(c), 12(f), 12(g), 12(h) and 12(i) of the 2005 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 Sections 10.2, 10.5, 10.6, 10.7 or 10.8 or by Vectren in the
performance of the 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

      
        
           

        

        
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      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 “due-on-sale” or similar
clauses, or as a result of the occurrence of a change in control similar to
Section 8.7 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 8.7 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 1.12.  Amendment
to Section 18.2 of the 2005 Note Purchase Agreement.  Section
18.2 of the 2005 Note Purchase Agreement shall be, and hereby is, amended by
adding the following new Section 18.2(c) at the end of Section
18.2:

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      (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 (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 1.13.  Amendment
to Section 23 of the 2005 Note Purchase Agreement.  Section 23
of the 2005 Note Purchase Agreement shall be, and hereby is, amended by adding
the following new Section 23.8 immediately following Section 23.7:

       

      23.8  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
1.14.  Amendments to Schedule B to the 2005 Note Purchase
Agreement.

       

      (a)  The
following definitions are hereby inserted in alphabetical order in Schedule B to
the 2005 Note Purchase Agreement:

       

      “Bank Credit Agreements” means
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 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, 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 8.7(h).

       

      “Control Event” is defined in
Section 8.7(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

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

       

      (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 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 8.7(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 9.8.  Each of the Permanent
Restricted Subsidiaries shall at all times remain a Restricted
Subsidiary.

       

      “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

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

       

      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 9.9.

       

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

       

      “Unrestricted Subsidiary”
means any Subsidiary (other than the Permanent Restricted Subsidiaries) of
Vectren so designated by Vectren in accordance with Section 9.8.

       

      (b)  The
definitions of Affiliate, Consolidated Net Worth, Environmental Laws, Guaranty,
Material Adverse Effect, Non-Recourse Indebtedness, PUHCA and Total Debt in
Schedule B to the 2005 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.

       

      “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 U.S. 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)

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

       

      obligations
incurred through an agreement, contingent or otherwise, by such
Person:

       

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

       

      (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
Guarantee, or (c) the validity or enforceability of this Agreement, the
Notes or the Guarantee.

       

      “Non-Recourse Indebtedness”
means, except as expressly provided to the contrary herein,
(i) Indebtedness of any Person that in accordance with U.S. 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
U.S. 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 U.S. GAAP.

       

      (c)  The
definitions of Material Subsidiary, Significant Utility Subsidiary, and
Significant Utility Subsidiary Successor are hereby deleted from Schedule B to
the 2005 Note Purchase Agreement:

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

       

      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 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 First Amendment, and to perform the provisions hereof
and thereof.

       

      (b)  This
First Amendment has been duly authorized by all necessary corporate action on
the part of the Company, and this First Amendment and the 2005 Note Purchase
Agreement as amended by this First Amendment constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, and this First Amendment has been duly authorized by all necessary
corporate action on the part of Vectren and this First Amendment and the 2005
Note Purchase Agreement as amended by this First 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 First
Amendment, and the performance by the Company and Vectren of the 2005 Note
Purchase Agreement, as amended by this First 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 First
Amendment

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

       

      (including,
without limitation, any thereof under PUHCA or the Federal Power Act, each as
amended).

       

      (e)  After
giving effect to this First Amendment, no Default or Event of Default under the
2005 Note Purchase Agreement will have occurred and be continuing as of the
effective date of this First Amendment, and the Company and Vectren will be in
compliance with all of the terms and conditions of the 2005 Note Purchase
Agreement, as amended.

       

      SECTION
III.  CONDITIONS TO EFFECTIVENESS.

       

      The
effectiveness of this First Amendment shall be subject to the fulfillment prior
to or on the First 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 First 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 First 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 First Amendment Closing Date, each of the
Holders and the Obligors shall have executed and delivered this First
Amendment.

       

      Section 3.4.  Payment of
Special Counsel Fees.  The Company shall have paid on or before
the First 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
2005 Note Purchase Agreement and Notes.  Any and all notices,
requests, certificates and other instruments may refer to the 2005 Note Purchase
Agreement without making specific reference to this First Amendment, but
nevertheless all such references shall be deemed to include this First Amendment
unless the context shall otherwise require.

       

      Section 4.2.  Ratification
of the 2005 Note Purchase Agreement.  This First Amendment
shall be construed in connection with and as a part of the 2005 Note Purchase
Agreement, and all terms, conditions and covenants contained in the 2005 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 2005 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 2005 Note Purchase Agreement
as amended by this First Amendment.

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

       

      Section
4.3.  Counterparts.  This First 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 First 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 Indiana 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.]

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

       

      Upon
acceptance of this First Amendment by each of the Holders and the satisfaction
of the conditions set forth herein, this First Amendment shall become effective
and the 2005 Note Purchase Agreement shall be amended as herein set forth, such
amendment to be effective as of the First 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.

       

      

      
        
          
            
              
                	 
      	
                        TRANSAMERICA
      LIFE INSURANCE COMPANY, SUCCESSOR BY MERGER TO TRANSAMERICA OCCIDENTAL
      LIFE INSURANCE COMPANY

                      
	 
      	 
      	 
      
	 
      	
                        By:

                      	/s/
      Frederick B. Howard
	 
      	
                        Name:

                      	Frederick
      B. Howard
	 
      	
                        Title:

                      	Vice
      President

              

            

          

        

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      

         

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

         

        

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 	
                                      AMERICAN
      INTERNATIONAL LIFE ASSURANCE COMPANY OF NEW YORK

                                    
	 	
                                      AIG
      ANNUITY INSURANCE COMPANY

                                    
	 	
                                      THE
      VARIABLE ANNUITY LIFE INSURANCE COMPANY

                                    
	 	 
	 
      	By:	
                                      AIG
      Global Investment Corp., investment adviser

                                    
	 	 	 
	 
      	 
      	 
      
	 
      	
                                      By:

                                    	/s/
      Victoria Y. Chin
	 
      	
                                      Name:

                                    	Victoria
      Y. Chin
	 
      	
                                      Title:

                                    	Vice
      President

                            

                          

                        

                      

                    

                  

                

              

            

          

        

         

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

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

         

        

        
          
            
              
                
                  	 
      	
                          COUNTRY
      LIFE INSURANCE COMPANY

                        
	 
      	 
      	 
      
	 
      	
                          By:

                        	/s/
      John Jacobs  
	 
      	
                          Name:

                        	John
      Jacobs  
	 
      	
                          Title:

                        	Director
      Fixed Income

                

              

            

          

        

         

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

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

         

        

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	 	
                                            THE
      LINCOLN NATIONAL LIFE INSURANCE COMPANY,

                                          
	 	 
	 	
                                            Successor
      by merger to Jefferson-Pilot Life
    Insurance Company 

                                          
	 
      	
                                             

                                          
	 	
                                            By: 
      Delaware Investment Advisers, a series of Delaware Management Business
      Trust, Attorney-in-Fact

                                          
	 	 	 
	 	 	 
	 
      	
                                            By:

                                          	/s/
      Nicole W. Tullo
	 
      	
                                            Name:

                                          	Nicole
      W. Tullo 
	 
      	
                                            Title:

                                          	Vice
      President

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

         

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

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

         

        

        
          
            
              
                
                  	 
      	
                          AMERICAN
      UNITED LIFE INSURANCE COMPANY

                        
	 
      	 
      	 
      
	 
      	
                          By:

                        	/s/
      Michael I. Bullock
	 
      	
                          Name:

                        	Michael
      I. Bullock  
	 
      	
                          Title:

                        	V.P.
      Private
Placements

                

              

            

          

        

         

        
          

          
            
              
                
                  
                    
                      
                        
                          	 
      	
                                  THE
      STATE LIFE INSURANCE COMPANY

                                
	 	 
	 	By: 
      American United Life Insurance Company, Its Agent
	 	 
	 
      	 
      	 
      
	 
      	
                                  By:

                                	/s/
      Michael I. Bullock
	 
      	
                                  Name:

                                	Michael
      I. Bullock  
	 
      	
                                  Title:

                                	V.P.
      Private
Placements

                        

                      

                    

                  

                

              

            

          

           

           

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

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

         

        

        
          
            
              
                	 
      	
                        THE
      NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY for its Goup Annuity Separate
      Account

                      
	 
      	 
      	 
      
	 
      	
                        By:

                      	/s/
      David A. Barras
	 
      	 
      	Its
      Authorized
Representative

              

            

          

        

         

        
           

          

          
            
              
                
                  	 
      	
                          THE
      NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

                        
	 
      	 
      	 
      
	 
      	
                          By:

                        	/s/
      David A. Barras
	 
      	 
      	Its
      Authorized
Representative

                

              

            

          

           

          

        

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

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

         

        

        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	 
      	
                                        PACIFIC
      LIFE INSURANCE COMPANY

                                      
	 
      	 
      	 
      
	 
      	
                                        By:

                                      	/s/
      Diane W. Dales
	 
      	
                                        Name:

                                      	Diane
      W. Dales
	 
      	
                                        Title:

                                      	Assistant
      Vice President
	 	 	 
	 	 	 
	 	By:	/s/
      Cathy L. Schwartz 
	 	Name:	Cathy
      L. Schwartz
	 	Title:	Assistant
      Secretary
	 	 	 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

         

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

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

         

        

        
          
            
              
                
                  	 
      	
                          TEACHERS
      INSURANCE AND ANNUITY ASSOCIATION OF AMERICA

                        
	 
      	 
      	 
      
	 
      	
                          By:

                        	/s/
      Ho Young Lee
	 
      	
                          Name:

                        	Ho
      Young Lee
	 
      	
                          Title:

                        	Director

                

              

            

          

        

         

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

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

         

        

        
          
            
              
                
                  
                    
                      	 
      	
                              UNUM
      LIFE INSURANCE COMPANY OF AMERICA

                            
	 	 
	 	
                              By:
      Provident Investment Management, LLC, its agent

                            
	 
      	 
      	 
      
	 
      	
                              By:

                            	/s/
      Ben Vance
	 
      	
                              Name:

                            	Ben
      Vance
	 
      	
                              Title:

                            	Managing
      Director

                    

                  

                

              

            

          

        

         

        

        

        
          
            
              
                
                  
                    
                      	 
      	
                              COLONIAL
      LIFE & ACCIDENT INSURANCE COMPANY

                            
	 	 
	 	
                              By:
      Provident Investment Management, LLC, its agent

                            
	 
      	 
      	 
      
	 
      	
                              By:

                            	/s/
      Ben Vance
	 
      	
                              Name:

                            	Ben
      Vance
	 
      	
                              Title:

                            	Managing
      Director

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