[BANK ONE LOGO OMITTED]

January 29, 2001


Mr. Timothy Burke
Vectren Corporation
P.O. Box 209
Evansville, IN  47702-0209

Dear Tim,

As you have  requested  in your letter dated  January 12, 2001,  the Majority of
Lenders of the bank group have  agreed to waive the  covenant  compliance  under
Section  6.13 for the $155  Million  Indian Gas Back-Up  Credit  Facility  which
required a  debt/capitalization  ratio of .60 to 1.0 for the period December 31,
2000 and March 31, 2001.  It is our  understanding  that once IGC receives  IURC
approval to complete the equity injection, that you will convert $125 Million of
the inter-company loan to paid-in equity capital and that this will occur before
June 30, 2001. If there is some reason that the paid-in  equity capital does not
take place, then the inter-company  debt of $218 Million will be subordinated to
the bank credit facility and the debt/capitalization ratio will return to .60 to
1 on June 30th, 2001.

Please indicate your  concurrence  with regard to this waiver to the Indiana Gas
credit agreement dated March 8, 1999 and  subsequently  amended on March 7, 2000
and October 31, 2001.


Sincerely,

/s/ Randall K. Stephens
Randall K. Stephens




                                        Indiana Gas Company, Inc.

                                        By: /s/ Timothy Burke
                                           -------------------------------

                                        Title: Treasurer
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