We demonstrate energy exchange between two orthogonally polarized optical waves as a consequence of a two-color multistep parametric interaction. The energy exchange results from cascading of two quasi-phase-matched (QPM) second-harmonic parametric processes, and it is intrinsically instantaneous. The effect is observed when both the type-I (ooe) second-harmonic generation process and higher QPM order type-0 (eee) second-harmonic generation processes are phase-matched simultaneously in a congruent periodically-poled lithium niobate crystal. The two second-harmonic generation processes share a common second-harmonic wave which couple the two cross-polarized fundamental components and facilitate an energy flow between them. We demonstrate a good agreement between the experimental data and the results of numerical simulations.