NISOURCE FINANCE CORP.



                              7 1/2% NOTES DUE 2003



                              7 5/8% NOTES DUE 2005



                              7 7/8% NOTES DUE 2010



                          REGISTRATION RIGHTS AGREEMENT





                                                                November 9, 2000



Credit Suisse First Boston Corporation

Barclays Capital Inc.

Banc One Capital Markets, Inc.

BMO Nesbitt Burns Corp.

BNP Paribas Securities Corp.

Scotia Capital (USA) Inc.

TD Securities (USA) Inc.

Tokyo-Mitsubishi International plc

   c/o Credit Suisse First Boston Corporation,

      Eleven Madison Avenue

      New York, New York 10010-3629



Dear Sirs:



         NiSource Finance Corp., an Indiana corporation (the "COMPANY"),

proposes to issue and sell to Credit Suisse First Boston Corporation and the

several initial purchasers named in Schedule A hereto (collectively, the

"INITIAL PURCHASERS"), upon the terms set forth in a purchase agreement of even

date herewith (the "PURCHASE AGREEMENT"), $750,000,000 aggregate principal

amount of its 7 1/2% Notes due 2003, $750,000,000 aggregate principal amount of

its 7 5/8% Notes due 2005 and $1,000,000,000 aggregate principal amount of its 7

7/8% Notes due 2010 (collectively, the "INITIAL SECURITIES") to be fully and

unconditionally guaranteed (the "GUARANTEES") by NiSource, Inc., a Delaware

corporation (the "GUARANTOR" and, collectively with the Company, the "ISSUERS").

The Initial Securities will be issued pursuant to an indenture and a

supplemental indenture, each dated as of November 14, 2000 (collectively, the

"INDENTURE"), among the Company, the Guarantor and The Chase Manhattan Bank, as

trustee (the "TRUSTEE"). As an inducement to the Initial Purchasers to enter

into the Purchase Agreement, the Issuers agree with the Initial Purchasers, for

the benefit of the Initial Purchasers and the holders of the Securities (as

defined below) (collectively, the "HOLDERS"), as follows:



<PAGE>   2



         1. Registered Exchange Offer. Unless not permitted by applicable law

(after the Issuers have complied with the ultimate paragraph of this Section 1),

the Issuers shall prepare and, not later than 90 days (such 90th day being a

"FILING DEADLINE") after the date on which the Initial Purchasers purchase the

Initial Securities pursuant to the Purchase Agreement (the "CLOSING DATE"), file

with the Securities and Exchange Commission (the "COMMISSION") a registration

statement (the "EXCHANGE OFFER REGISTRATION STATEMENT") on an appropriate form

under the Securities Act of 1933, as amended (the "SECURITIES ACT"), with

respect to a proposed offer (the "REGISTERED EXCHANGE OFFER") to the Holders of

Transfer Restricted Securities (as defined in Section 6 hereof), who are not

prohibited by any law or policy of the Commission from participating in the

Registered Exchange Offer, to issue and deliver to such Holders, in exchange for

the Initial Securities, a like aggregate principal amount of debt securities of

the Issuers issued under the Indenture, identical in all material respects to

the Initial Securities and registered under the Securities Act (the "EXCHANGE

SECURITIES"). The Issuers shall use their best efforts to (i) cause such

Exchange Offer Registration Statement to become effective under the Securities

Act within 180 days after the Closing Date (such 180th day being an

"EFFECTIVENESS DEADLINE") and (ii) keep the Exchange Offer Registration

Statement effective for not less than 30 days (or longer, if required by

applicable law) after the date notice of the Registered Exchange Offer is mailed

to the Holders (such period being called the "EXCHANGE OFFER REGISTRATION

PERIOD").



         If the Issuers commence the Registered Exchange Offer, the Issuers (i)

will be entitled to consummate the Registered Exchange Offer 30 days after such

commencement (provided that the Issuers have accepted all the Initial Securities

theretofore validly tendered in accordance with the terms of the Registered

Exchange Offer) and (ii) will be required to consummate the Registered Exchange

Offer no later than 40 days after the date on which the Exchange Offer

Registration Statement is declared effective (such 40th day being the

"CONSUMMATION DEADLINE").



         Following the declaration of the effectiveness of the Exchange Offer

Registration Statement, the Issuers shall promptly commence the Registered

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