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

Ladies and Gentlemen:

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

SECTION I.   AMENDMENTS TO THE 1997 NOTE PURCHASE AGREEMENT.

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

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

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

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

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

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

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

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

8.4    [Intentionally Omitted.]

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

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

8.9   CHANGE IN CONTROL.   

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

9.4   Payment of Taxes and Claims

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

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

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

9.5   Entity Existence, Etc.  

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

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

9.6   [Intentionally Omitted.]

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

9.7   Line of Business.

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

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

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

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

9.10   Designation of Subsidiaries.

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

9.11   Subsidiary Guarantors.

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

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

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

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

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

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

9.12   Books and Records.  

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

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

10.1   Transactions with Affiliates

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

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

10.2   Merger, Consolidation, Etc.  

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

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

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

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

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

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

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

10.3   [Intentionally Omitted.]