Document:

Exhibit 4

Exhibit 4.4

FIRST AMENDMENT TO SHAREHOLDERS RIGHTS AGREEMENT

REFERENCE IS MADE to that certain Shareholders Rights Agreement dated as of September 22, 2005 (the “Rights Plan”), between Idaho General Mines, Inc., an Idaho corporation (the “Corporation”), and Columbia Stock Transfer Company.   

WHEREAS, the Board of Directors has approved the terms of a private placement (the “Private Placement”) of units (the “Units”), comprised of shares (the “Offered Shares”) of the Corporation’s common stock (“Common Shares”) and warrants to purchase Common Shares (the “Warrants” and, collectively with the Units, Offered Shares, and the Common Shares that may be issued upon exercise of the Warrants, the “Securities”), pursuant to a Private Placement Memorandum dated February 9, 2006 (the “Private Placement Memorandum”); and

WHEREAS, the Company wishes to except the purchasers of the Units (the “Purchasers”) from the definition of Acquiring Person under the Rights Plan and believes such exception is desirable and consistent with the objectives of the Board of Directors in adopting the Rights Plan.   

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, the undersigned agree as follows:

1. Pursuant to Section 27 thereof, Section 1(a) of the Rights Plan is hereby amended to add a new second paragraph to the definition of “Acquiring Person” as follows:

“Any Purchaser will not be deemed to be an Acquiring Person solely by virtue of their purchase of Securities in the Private Placement or by virtue of the exercise or conversion of the Warrants into Common Shares pursuant to their terms; provided, however, that if any Purchaser is or becomes the Beneficial Owner of 20% or more of the Common Shares then outstanding at any time as a result of the acquisition of Beneficial Ownership of Common Shares subsequent to the closing of the Private Placement, except for the acquisition of Beneficial Ownership caused by conversion of the Warrants pursuant to their terms, then as of the date of such acquisition such Purchaser shall become an Acquiring Person for purposes of the Rights Plan unless the Company’s board of directors otherwise determines or as otherwise set forth in the Rights Plan.”  

2.  Except as expressly amended hereby, the Rights Plan shall remain in full force and effect as by its terms set forth.  Capitalized terms used but not defined herein have the meanings assigned to them in the Rights Plan.  

[signature page follows]

DATED as of this 14th day of February, 2006.

IDAHO GENERAL MINES, INC.

COLUMBIA STOCK TRANSFER COMPANY

By:

 /s/ Robert L. Russell _________

By:

__/s/ Michelle King _______ 

___Robert L. Russell _________ 

____Michelle King  _______ 

Its:

___President & CEO _________ 

Its:

____President  ___________Exhibit 4.4

    Ex.
      4.4

     

     

    

     

    VECTREN
      CAPITAL, CORP.

     

    $25,000,000
      4.99% Guaranteed Senior Notes, Series A due 2010

     

    $25,000,000
      5.13% Guaranteed Senior Notes, Series B due 2012

     

    $75,000,000
      5.31% Guaranteed Senior Notes, Series C due 2015

     

    Unconditionally
      Guaranteed by

     

    VECTREN
      CORPORATION

     

    

     

    NOTE
      PURCHASE AGREEMENT

     

    Dated
      as
      of: October
      11, 2005

     

    

     

    

     

    

     

    

     

    

     

    
      
        
          300184989v14

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

          

           

          

           

          

           

          

           

          

           

        

      

    

    TABLE
      OF
      CONTENTS

     

    SectionPage

     

     

    
      	
              1.

            	
              AUTHORIZATION
                OF NOTES.

            	 

    

     

     

    
      	
              2.

            	
              SALE
                AND PURCHASE OF NOTES.

            	 

    

     

     

    
      	
              3.

            	
              CLOSING.

            	 

    

     

     

    
      	
              4.

            	
              CONDITIONS
                TO CLOSING.

            	 

    

     

    4.1 Representations
      and Warranties.

    4.2 Performance;
      No Default.

    4.3 Compliance
      Certificates.

    4.4 Opinions
      of Counsel.

    4.5 Purchase
      Permitted By Applicable Law, etc.

    4.6 Sale
      of
      Other Notes.

    4.7 Payment
      of Special Counsel Fees.

    4.8 Private
      Placement Numbers.

    4.9 Changes
      in Corporate Structure.

    4.10 Funding
      Instructions.

    4.11 Proceedings
      and Documents.

     

    
      	
              5.

            	
              REPRESENTATIONS
                AND WARRANTIES OF THE OBLIGORS.

            	 

    

     

    5.1 Organization;
      Power and Authority.

    5.2 Authorization,
      etc.

    5.3 Disclosure.

    5.4 Organization
      and Ownership of Shares of Subsidiaries; Affiliates.

    5.5 Financial
      Statements.

    5.6 Compliance
      with Laws, Other Instruments, etc.

    5.7 Governmental
      Authorizations, etc.

    5.8 Litigation;
      Observance of Agreements, Statutes and Orders.

    5.9 Taxes.

    5.10 Title
      to
      Property; Leases.

    5.11 Licenses,
      Permits, etc.

    5.12 Compliance
      with ERISA.

    5.13 Private
      Offering by the Company.

    5.14 Use
      of
      Proceeds; Margin Regulations.

    5.15 Existing
      Indebtedness; Future Liens.

    5.16 Foreign
      Assets Control Regulations and Foreign or Enemy Status.

    5.17 Status
      under Certain Statutes.

    5.18 Environmental
      Matters.

    5.19 Ranking.

     

    
      	
              6.

            	
              REPRESENTATIONS
                OF THE PURCHASER.

            	 

    

     

    6.1 Purchase
      for Investment.

    6.2 Source
      of
      Funds.

     

    
      	
              7.

            	
              INFORMATION.

            	 

    

     

    7.1 Financial
      and Business Information.

    7.2 Officer’s
      Certificate.

    7.3 Inspection.

    7.4 Information
      Required by Rule 144A.

     

    
      	
              8.

            	
              PREPAYMENT
                OF THE NOTES.

            	 

    

     

    8.1 Maturity

    8.2 Optional
      Prepayments with Make-Whole Amount.

    8.3 Allocation
      of Certain Partial Prepayments.

    8.4 Maturity;
      Surrender, etc.

    8.5 Purchase
      of Notes.

    8.6 Make-Whole
      Amount.

     

    
      	
              9.

            	
              AFFIRMATIVE
                COVENANTS.

            	 

    

     

    9.1 Compliance
      with Law.

    9.2 Insurance.

    9.3 Maintenance
      of Properties.

    9.4 Payment
      of Taxes and Claims.

    9.5 Corporate
      Existence, etc.

    9.6 Books
      and
      Records.

    9.7 Ranking

     

    
      	
              10.

            	
              NEGATIVE
                COVENANTS.

            	 

    

     

    10.1 Transactions
      with Affiliates.

    10.2 Merger,
      Consolidation, etc.

    10.3 Line
      of
      Business.

    10.4 Terrorism
      Sanctions Regulations.

    10.5 Liens.

    10.6 Sale
      of
      Assets.

    10.7 Indebtedness.

     

    
      	
              11.

            	
              GUARANTEE.

            	 

    

     

    11.1 Guarantee.

    11.2 Successors
      and Assigns.

    11.3 No
      Waiver.

    11.4 Modification.

    11.5 Non-Impairment.

     

    
      	
              12.

            	
              EVENTS
                OF DEFAULT.

            	 

    

     

     

    
      	
              13.

            	
              REMEDIES
                ON DEFAULT, ETC.

            	 

    

     

    13.1 Acceleration.

    13.2 Other
      Remedies.

    13.3 Rescission.

    13.4 No
      Waivers or Election of Remedies, Expenses, etc.

     

    
      	
              14.

            	
              REGISTRATION;
                EXCHANGE; SUBSTITUTION OF NOTES.

            	 

    

     

    14.1 Registration
      of Notes.

    14.2 Transfer
      and Exchange of Notes.

    14.3 Replacement
      of Notes.

    14.4 Legend.

     

    
      	
              15.

            	
              PAYMENTS
                ON NOTES.

            	 

    

     

    15.1 Place
      of
      Payment.

    15.2 Home
      Office Payment.

     

    
      	
              16.

            	
              EXPENSES,
                ETC.

            	 

    

     

    16.1 Transaction
      Expenses.

    16.2 Survival.

     

    
      	
              17.

            	
              SURVIVAL
                OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

            	 

    

     

     

    
      	
              18.

            	
              AMENDMENT
                AND WAIVER.

            	 

    

     

    18.1 Requirements.

    18.2 Solicitation
      of Holders of Notes.

    18.3 Binding
      Effect, etc.

    18.4 Notes
      held by Obligor, etc.

     

    
      	
              19.

            	
              NOTICES.

            	 

    

     

     

    
      	
              20.

            	
              REPRODUCTION
                OF DOCUMENTS.

            	 

    

     

     

    
      	
              21.

            	
              CONFIDENTIAL
                INFORMATION.

            	 

    

     

     

    
      	
              22.

            	
              SUBSTITUTION
                OF PURCHASER.

            	 

    

     

     

    
      	
              23.

            	
              MISCELLANEOUS.

            	 

    

     

    23.1 Successors
      and Assigns.

    23.2 Payments
      Due on Non-Business Days.

    23.3 Accounting
      Terms.

    23.4 Severability.

    23.5 Construction.

    23.6 Counterparts.

    23.7 Governing
      Law.

    

     

    SCHEDULE
      A -- Information
      Relating to Purchasers

    SCHEDULE
      B -- Defined
      Terms

    SCHEDULE
      5.4 -- Organization
      and Ownership of Shares of Subsidiaries; Affiliates

    SCHEDULE
      5.11 -- Patents,
      etc.

    SCHEDULE
      5.15 -- Existing
      Indebtedness

    EXHIBIT
      1-A  -- Form
      of
      4.99% Guaranteed Senior Notes, Series A due 2010

    EXHIBIT
      1-B  -- Form
      of
      5.13% Guaranteed Senior Notes, Series B due 2012

    EXHIBIT
      1-C  -- Form
      of
      5.31% Guaranteed Senior Notes, Series C due 2015

    EXHIBIT
      4.4(a)(i) -- Form
      of
      Opinion of Counsel for the Company and the Guarantor

    EXHIBIT
      4.4(a)(ii) -- Form
      of
      Opinion of Special Counsel for the Company

    EXHIBIT
      4.4(a)(iii) -- Form
      of
      Opinion of Ohio Counsel for the Company

    EXHIBIT
      4.4(b) -- Form
      of
      Opinion of Special Counsel for the Purchasers

    

     

    
      
        
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          300184989v14

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

           

        

      

    

    VECTREN
      CAPITAL, CORP.

    One
      Vectren Square

     

    Evansville,
      Indiana 47708

     

    $25,000,000
      4.99% Guaranteed Senior Notes, Series A due 2010

     

    $25,000,000
      5.13% Guaranteed Senior Notes, Series B due 2012

     

    $75,000,000
      5.31% Guaranteed Senior Notes, Series C due 2015

     

    Unconditionally
      Guaranteed by

     

    VECTREN
      CORPORATION

     

    As
      of
October
      11, 2005

     

    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:

     

    
      	1.  	
              AUTHORIZATION
                OF NOTES.

            

    

     

    The
      Company will authorize the issue and sale, in three series, of $125,000,000
      aggregate principal amount of its senior notes, of which $25,000,000 aggregate
      principal amount shall be its 4.99% Guaranteed
      Senior
      Notes, Series A due 2010 (the “Series
      A Notes”),
      $25,000,000 aggregate principal amount shall be its 5.13% Guaranteed
      Senior
      Notes, Series B due 2012 (the “Series
      B Notes”)
      and
      $75,000,000 aggregate principal amount shall be its 5.31% Guaranteed
      Senior
      Notes, Series C due 2015 (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, Exhibits 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.

     

    
      	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 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.

     

    
      	3.  	
              CLOSING.

            

    

     

    The
      sale
      and purchase of the Notes to be purchased by each Purchaser shall occur at
      the
      offices of Pillsbury Winthrop Shaw Pittman LLP, 1540 Broadway, New York, New
      York 10036, at 10:00 a.m., New York City time, at a closing (the “Closing”)
      on
      December 15, 2005 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 0101481317 at Fifth Third Bank,
      Evansville, Indiana, ABA No. 042000314. 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.

     

    
      	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:

     

    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.

     

    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 or 10.6 hereof had such Sections
      applied since such date.

     

    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).

     

    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, Indiana counsel for the Obligors, (ii) Baker &
Botts, LLP, special counsel for the Obligors and (iii) Kegler, Brown, Hill
      and
      Ritter, Ohio counsel for the Obligors, covering the matters set forth in
      Exhibits 4.4(a)(i), (ii) and (iii), 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
      Pillsbury Winthrop Shaw Pittman LLP, the Purchasers’ special New York 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.

     

    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.

     

    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.

     

    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 New York 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.

     

    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.

     

    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.

     

    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.

     

    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 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.

     

    
      	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:

     

    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.

     

    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 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).

     

    5.3  Disclosure.

     

    The
      Company and Vectren, through their agents, J.P. Morgan Securities Inc. and
      Wachovia Securities, Inc., have delivered to each Purchaser a copy of a Private
      Placement Memorandum, dated July 2005 (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 its 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, 2004,
      there
      has been no change in the financial condition, operations, business, properties
      or prospects of the Company, Vectren or any 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.

     

    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, (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 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 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.

     

    5.5  Financial
      Statements.

     

    Vectren
      has delivered to each Purchaser copies of (i) the audited financial statements
      of Vectren and Vectren Utility Holdings for the years ended December 31, 2002,
      2003 and 2004 and (ii) the unaudited financial statements of Vectren and Vectren
      Utility Holdings for the three-month periods ended March 31, 2005 and 2004.
      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, or will fairly present, in all material respects the consolidated
      financial position of Vectren and its Subsidiaries and Vectren Utility Holdings
      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 or will be 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.

     

    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).

     

    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).

     

    5.8  Litigation;
      Observance of Agreements, Statutes and Orders.

     

    (a)  Except
      as
      disclosed as of the date hereof in the Memorandum, there are no actions, suits,
      investigations or proceedings pending or, to the knowledge of the Company or
      Vectren, threatened against or affecting the Company, Vectren or any Subsidiary
      or any property of the Company, Vectren or any 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 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.

     

    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 Indiana
      Energy, Inc. and its Subsidiaries, a predecessor of Vectren, and SIGCORP, Inc
      and its Subsidiaries, a predecessor of Vectren, 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 March 31, 2000
      and December 31, 1999, respectively.

     

    5.10  Title
      to Property; Leases.

     

    Vectren
      and each 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 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
      (in the case of the Company) or that individually or in the aggregate are
      Material (in the case of Vectren and any other Subsidiary). All leases that
      Vectren or any 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.

     

    5.11  Licenses,
      Permits, etc.

     

    Except
      as
      disclosed in Schedule 5.11, 

     

    (a)  Vectren
      and each 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 of Vectren or any 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

     

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

     

    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 401(a)(29) or 412 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 actuarial assumptions specified
      for
      funding purposes in such Plan’s most recent actuarial valuation report, did not
      exceed the aggregate current value of the assets of such Plan allocable to
      such
      benefit liabilities by more than $85,000,000. 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.

     

    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 30 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.

     

    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 G 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.

     

    5.15  Existing
      Indebtedness; Future Liens.

     

    (a)  Vectren’s
      annual report on Form 10-K for the year ended December 31, 2004 sets forth
      a
      complete and correct list of all outstanding Indebtedness of Vectren and its
      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, 2004 there has been no Material
      change in the amounts, interest rates, sinking funds, installment payments
      or
      maturities of the Indebtedness of Vectren or its Subsidiaries, except as
      disclosed in Schedule 5.15. None of the Company, Vectren or any 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
      Subsidiary and no event or condition exists with respect to any Indebtedness
      of
      the Company, Vectren or any 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 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 (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.

     

    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.

     

    5.17  Status
      under Certain Statutes.

     

    None
      of
      the Company, Vectren or any Subsidiary is subject to regulation under the
      Investment Company Act of 1940, as amended or the ICC Termination Act of 1995,
      as amended. Each of Vectren and Vectren Utility Holdings is a “Holding Company”
as defined in PUHCA. Pursuant to §3(a)(1) and §3(c) of PUHCA, Vectren and its
      Subsidiaries are exempt from registration under PUHCA. Vectren and its
      Subsidiaries are exempt from regulation by the Federal Energy Regulatory
      Commission under Sections 1(b) and 1(c) of the Natural Gas Act, as amended.
      Except as disclosed in the Memorandum as of the date hereof, no change in
      circumstances has occurred subsequent to the effectiveness of Release No.
      35-27239; 70 9703 dated October 4, 2000 of the United States Securities and
      Exchange Commission that would cause Vectren or any of its Subsidiaries to
      cease
      to qualify for exemption from registration pursuant to §3(a)(1) and §3(c) of
      PUHCA or cause the gas distribution operations of Vectren and its Subsidiaries
      to cease to qualify for exemption from regulation under Sections 1(b) and 1(c)
      of the Natural Gas Act, as amended.

     

    5.18  Environmental
      Matters.

     

    (a)  Neither
      Vectren nor any 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 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 has been disclosed in the Memorandum as of the date hereof
      or
      such as could not reasonably be expected to result in a Material Adverse Effect.
      

     

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

     

    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 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 Indebtedness of Vectren.

     

    
      	6.  	
              REPRESENTATIONS
                OF THE PURCHASER.

            

    

     

    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.

     

    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 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
      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, neither the QPAM nor a person
      controlling or controlled by the QPAM (applying the definition of “control” in
      Section V(e) of the QPAM Exemption) owns a 5% or more interest in the Company
      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

     

    (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.

     

    
      	7.  	
              INFORMATION.

            

    

     

    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,

     

    (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)  Compliance
      Certificate
      --
      together with the financial statements required under Sections 7.1(a) and (b),
      a
      compliance certificate, signed by its Chief Financial Officer or Treasurer,
      showing the calculations necessary to determine compliance with Sections 10.5
      and 10.7 of this Agreement;

     

    (d)  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(d) 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;

     

    (e)  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;

     

    (f)  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;

     

    (g)  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

     

    (h)  Requested
      Information
      --
      subject to the last sentence of Section 7.3, 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.

     

    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 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.

     

    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.

     

    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.

     

    
      	8.  	
              PREPAYMENT
                OF THE NOTES.

            

    

     

    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 December
      15,
      2010, 2012 and 2015, respectively.

     

    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, 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, 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.

     

    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.

     

    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.

     

    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.

     

    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 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,
      with respect to the Called Principal of any Note, 0.50% over the yield to
      maturity implied by (i) the yields reported as of 10:00 a.m. (New York City
      time) on the second Business Day preceding the Settlement Date with respect
      to
      such Called Principal, on the display designated as “Page PX1” (or such other
      display as may replace Page PX1 on Bloomberg Financial Markets (“Bloomberg”) or,
      if Page PX1 (or its successor screen on Bloomberg) is unavailable, the Telerate
      Access Service screen which corresponds most closely to Page PX1 for the most
      recently issued actively traded 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 with respect to such Called Principal, 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.
      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
      actively traded U.S. Treasury security with the maturity closest to and greater
      than such Remaining Average Life and (2) the actively traded 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.

     

    “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.

     

    
      	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:

     

    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,
      individually or in the aggregate, have a Material Adverse Effect.

     

    9.2  Insurance.

     

    The
      Obligors will, and Vectren will cause each of its 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.

     

    9.3  Maintenance
      of Properties.

     

    The
      Obligors will, and Vectren will cause each of its 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 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, individually or in the aggregate,
      have a Material Adverse Effect.

     

    9.4  Payment
      of Taxes and Claims.

     

    The
      Obligors will, and Vectren will cause each of its Subsidiaries to, file all
      tax
      returns required to be filed in any jurisdiction and to pay and discharge all
      taxes shown to be due and payable on such returns and all other taxes,
      assessments, governmental charges, or levies imposed on them or any of their
      properties, assets, income or franchises, to the extent such taxes and
      assessments have become due and payable and before they have become delinquent
      and all claims for which sums have become due and payable that have or might
      become a Lien on properties or assets of the Company, Vectren or any Subsidiary,
      provided
      that
      neither of the Obligors nor any such Subsidiary need pay any such tax or
      assessment 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 and claims in the aggregate would
      not
      have a Material Adverse Effect.

     

    9.5  Corporate
      Existence, etc.

     

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

     

    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.

     

    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 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.

     

    
      	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
      Vectren permit any Material Subsidiary to, consolidate with or merge with any
      other Person unless:

     

    (a)  the
      successor formed by such consolidation or the survivor of such merger shall
      be a
      solvent corporation organized and existing under the laws of the United States
      or any State thereof (including the District of Columbia), and, if the Company
      or Vectren is a party to such transaction and is not the successor, such
      successor 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, 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 Material
      Subsidiary may merge with and into Vectren or another Wholly-Owned Subsidiary
      of
      Vectren.

     

    No
      such
      conveyance, transfer or lease of substantially all of the assets of Vectren
      shall have the effect of releasing Vectren 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.

     

    10.3  Line
      of
      Business.

     

    Vectren
      will not and will not permit any Subsidiary to engage in any business if, as
      a
      result, the general nature of the business in which Vectren and its
      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
      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 Subsidiary to, create, assume, incur or suffer
      to
      exist any Lien upon or with respect to any Property of the Company, Vectren
      or
      any of their 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 and mechanics’ 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.

     

    (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 Subsidiary of Vectren or Liens on assets securing
      Indebtedness assumed by Vectren or a Subsidiary of Vectren when such assets
      are
      acquired by Vectren or a 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); 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 or the Company securing intercompany Indebtedness owed to
      Vectren or the Company by a Subsidiary of Vectren or the Company.

     

    (h)  In
      addition to Liens covered by (a) - (g) above, Liens securing Indebtedness not
      exceeding 10% of Consolidated Net Worth in the aggregate outstanding at any
      time.

     

    10.6  Sale
      of Assets.

     

    Vectren
      will not, and will not permit any Subsidiary to, directly or indirectly, sell,
      lease, transfer or otherwise dispose of any of its properties or assets if
      such
      lease, sale or other disposition of Property, together with all other Property
      of Vectren and its Subsidiaries previously leased, sold or disposed of during
      the twelve month period ending with the month in which any such lease, sale
      or
      other disposition occurs, would constitute substantially all of the assets
      of
      Vectren and its Subsidiaries taken as a whole.

     

    10.7  Indebtedness.

     

    Vectren
      will not, and will not permit any Subsidiary, to create, issue, assume,
      guarantee or otherwise incur or in any manner become liable in respect of any
      Indebtedness, if at the time of issuance thereof and after giving effect thereto
      and to the application of proceeds thereof, the ratio of Total Debt to Total
      Capitalization would exceed 75%.

     

    
      	11.  	
              GUARANTEE.

            

    

     

    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 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 Article
      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 Article 11.

     

    11.2  Successors
      and Assigns.

     

    This
      Article 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.

     

    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 Article 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 Article 11 at law, in equity, by statute or
      otherwise.

     

    11.4  Modification.

     

    No
      modification, amendment or waiver of any provision of this Article 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.

     

    11.5  Non-Impairment.

     

    The
      failure to endorse a Guarantee on any Note shall not affect or impair the
      validity thereof.

     

    
      	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 or 10.6 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

     

    (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 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
      $50,000,000 (“Material Indebtedness”); or the default by Vectren or any of its
      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; or any Material Indebtedness (other than Non-Recourse
      Indebtedness) of Vectren or any of its Subsidiaries shall be declared to be
      due
      and payable or required to be prepaid or repurchased (other than by a regularly
      scheduled payment), prior to the stated maturity thereof; or Vectren or any
      of
      its Material 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 Material 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 Material
      Subsidiaries, a receiver, trustee, examiner, liquidator or similar official
      shall be appointed for Vectren or any of its Material 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
      Material 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
      $50,000,000 are rendered against one or more of Vectren and its Material
      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.

     

    
      	13.  	
              REMEDIES
                ON DEFAULT, ETC.

            

    

     

    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 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.

     

    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.

     

    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.

     

    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.

     

    
      	14.  	
              REGISTRATION;
                EXCHANGE; SUBSTITUTION OF
                NOTES.

            

    

     

    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.

     

    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, one Note may be in a denomination of less than $1,000,000
      and
      in an amount which is not an integral multiple of $250,0.00. 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.

     

    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 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.

     

    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.”

     

    
      	15.  	
              PAYMENTS
                ON NOTES.

            

    

     

    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 Citibank, 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.

     

    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
      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.

     

    
      	16.  	
              EXPENSES,
                ETC. 

            

    

     

    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
        and, if reasonably required by the Required Holders, one
        other
local
        or
        other
        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).

     

    16.2  Survival.

     

    The
      obligations of 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.

     

    
      	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.

     

    
      	18.  	
              AMENDMENT
                AND WAIVER.

            

    

     

    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 Article 11.

     

    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.

     

    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
      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.

     

    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.

     

    
      	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 its address 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.

     

    
      	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, 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.

     

    
      	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 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.

     

    
      	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.

     

    
      	23.  	
              MISCELLANEOUS.

            

    

     

    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.

     

    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 8.4 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.

     

    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
      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.

     

    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.

     

    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.

     

    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.

     

    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.

     

    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:   
      Vice President and Treasurer 

                                
      Assistant
      Secretary

     

    VECTREN
      CORPORATION

     

    By:/s/
      Robert L
      Goocher                                     

    Name: 
      Robert L. Goocher

    Title:   
      Vice President and Treasurer

     

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

     

     

    TRANSAMERICA
      OCCIDENTAL LIFE INSURANCE COMPANY

     

    By:/s/ Fredrick
      B
      Howard                                               
 

    Name: 
      Fredrick B Howard

    Title:   
      Vice President

     

     

    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 

    

    

     

    COUNTRY
      LIFE INSURANCE COMPANY

     

        By:/s/ John
      Jacobs                                                  

        Name: 
      John Jacobs

        Title:   
      Senior Investment Officer

    

     

    JEFFERSON-PILOT
      LIFE INSURANCE COMPANY

     

        By:/s/ James
      E. McDonald,
      Jr.                              

        Name: 
      James E. McDonald, Jr.

        Title:    Vice
      President

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

     

    THE
      NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

    For
      its Group Annuity Separate Account

     

        By:/s/ Richard
      A.
      Strait                                         

        Name: 
      Richard A. Strait

        Title:   
      Its Authorized Representative

     

     

    THE
      NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY

     

        By:/s/ Richard
      A.
      Strait                                         

            Name: 
Ricard
      A.
      Strait

        Title:   
      Its Authroized Representative

    

    

     

    AMERICAN
      UNITED LIFE INSURANCE COMPANY

     

        By:/s/
      Kent R.
      Adams                                           

        Name: 
      Kent R. Adams

        Title:   
      V. P. Fixed Income Securities

     

     

    THE
      STATE
      LIFE INSURANCE COMPANY

    
       

          By:/s/
        Kent R.
        Adams                                           

          Name: 
        Kent R. Adams

          Title:   
        V. P. Fixed Income Securities

       

    

     

    PACIFIC
      LIFE INSURANCE COMPANY

    (NOMINEE:
      MAC & CO)

     

        By:
/s/
      Lori A.
      Johnstone                                      

        Name: 
      Lori A. Johnstone

        Title:   
      Assistant Vice President

    

     

    PACIFIC
      LIFE INSURANCE COMPANY

    (NOMINEE:
      MAC & CO)

     

        By:/s/
      David C.
      Patch                                           

        Name: 
      David C. Patch

        Title:   
      Assistant Secretary

    

     

    TEACHERS
      INSURANCE AND 

    ANNUITY
      ASSOCIATION OF AMERICA

     

        By:
      /s/
      William Stuart
      Sheptin                         
 

        Name:  
      Williams Stuart Sheptin

        Title:    
      Managing Director

    

     

    UNUM
      LIFE
      INSURANCE COMPANY OF AMERICA

    By:
      Provident Investment Management, LLC

    Its:
      Agent

     

        By:
      /s/
      Ben
      Vance                                               
 

        Name: 
      Ben Vance

        Title:   
      Vice President

     

     

    COLONIAL
      LIFE & ACCIDENT INSURANCE COMPANY

    By:
      Provident Investment Management, LLC

    Its:
      Agent

    
       

          By:
        /s/
        Ben
        Vance                                               
 

          Name: 
        Ben Vance

          Title:   
        Vice President

       

       

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    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 corporation 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.

     

    “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.

     

    “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.

     

    “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 Subsidiaries
      calculated on a consolidated basis as of such time in accordance with U.S.
      GAAP.

     

    “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, that rate of interest that is the greater of (i)
      2% per
      annum above the rate of interest stated in clause (a) of the first paragraph
      of
      such Note or (ii)
      2% over
      the rate of interest publicly announced by The Chase Manhattan Bank in New
      York
      City 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
      substances or wastes, air emissions and discharges to waste or public
      systems.

     

    “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. 

     

    “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.

     

    “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)
      of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend
      or other obligation of any other Person in any manner, whether directly or
      indirectly, including (without limitation) obligations incurred through an
      agreement, contingent or otherwise, by such Person:

     

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

     

    (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;

     

    (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.

     

    “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 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.

     

    “Material
      Subsidiary” means
      each Significant Utility Subsidiary and any other Subsidiary that constitutes
      a
“significant subsidiary” of Vectren (as such term is defined in Regulation S-X
      of the Securities and Exchange Commission as in effect on the date of
      Closing).

     

    "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.

     

    “Non-Recourse
      Indebtedness”
      means
      (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.

     

    “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.

     

    “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.

     

    “PUHCA”
      means
      the Public Utility Holding Company Act of 1935, 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.

     

    “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 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.

     

    “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, 2004, Vectren’s Quarterly Report on Form 10-Q for the quarter ended March
      31, 2005, 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.

     

    “Series
      A Notes”
      is
      defined in Section 1.

     

    “Series
      B Notes”
      is
      defined in Section 1

     

    “Series
      C Notes”
      is
      defined in Section 1.

     

    “Significant
      Utility Subsidiary”
      means
      (i) Southern Indiana Gas and Electric Company, Indiana Gas Company, Inc. and
      Vectren Energy Delivery of Ohio, Inc. and (ii) any Significant Utility
      Subsidiary Successor.

     

    “Significant
      Utility Subsidiary Successor” means
      (i)
      any successor formed by any consolidation or merger involving any Significant
      Utility Subsidiary identified in clause (i) of the definition of “Significant
      Utility Subsidiary” or (ii) any single transferee of all or substantially all of
      the assets of such Significant Utility Subsidiary, or in the event that all
      or
      substantially all of the assets of such Significant Utility Subsidiary are
      transferred to more than one transferee, such of those transferees (as
      reasonably designated by such Significant Utility Subsidiary) as shall,
      subsequent to such transfer, own all or substantially all of the assets formerly
      owned by such Significant Utility Subsidiary.

     

    “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.

     

    “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.

     

    “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 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.

     

    “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.

     

    “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.

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