Exhibit 4.2
                                                                     -----------


                                                                 EXECUTION COPY
                                                                 --------------




                          FIRST SUPPLEMENTAL INDENTURE

                                      among

                    VECTREN UTILITY HOLDINGS, INC., AS ISSUER

                     INDIANA GAS COMPANY, INC., AS GUARANTOR

             SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, AS GUARANTOR

               VECTREN ENERGY DELIVERY OF OHIO, INC., AS GUARANTOR

                                       AND

                U.S. BANK TRUST NATIONAL ASSOCIATION, AS TRUSTEE






                             Dated October 19, 2001



<PAGE>
                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
ARTICLE I    DEFINITIONS......................................................1

 SECTION 1.1.  Definition of Terms............................................1

ARTICLE II   GENERAL TERMS AND CONDITIONS OF THE NOTES........................2

 SECTION 2.1.  Designation and Principal Amount; Guarantees...................2
 SECTION 2.2.  Maturity.......................................................3
 SECTION 2.3.  Form and Payment...............................................3
 SECTION 2.4.  Global Note....................................................3
 SECTION 2.5.  Payment of Principal and Interest..............................4

ARTICLE III  REDEMPTION OF THE NOTES AND DEFEASANCE...........................5

 SECTION 3.1.  Redemption at the Company's Option.............................5
 SECTION 3.2.  No Sinking Fund................................................6
 SECTION 3.3.  Defeasance.....................................................6

ARTICLE IV   MISCELLANEOUS....................................................6

 SECTION 4.1.  Ratification of Indenture......................................6
 SECTION 4.2.  Trustee Not Responsible for Recitals...........................6
 SECTION 4.3.  Governing Law..................................................6
 SECTION 4.4.  Separability...................................................6
 SECTION 4.5.  Counterparts...................................................7
 SECTION 4.6.  Amendments.....................................................7



<PAGE>


          FIRST SUPPLEMENTAL INDENTURE, dated as of October 19, 2001 (the "First
Supplemental  Indenture"),  among  Vectren  Utility  Holdings,  Inc., an Indiana
corporation (the "Company"),  Indiana Gas Company,  Inc., an Indiana corporation
and an Ohio  corporation  ("Indiana  Gas"),  Southern  Indiana Gas and  Electric
Company, an Indiana corporation  ("SIGECO") and Vectren Energy Delivery of Ohio,
Inc., an Ohio corporation  ("VEDO"),  (Indiana Gas, SIGECO and VEDO are referred
to  herein  collectively  as the  "Guarantors")  and U.S.  Bank  Trust  National
Association ("Trustee").

          WHEREAS,  the Company executed and delivered the Indenture dated as of
October  19,  2001 (the "Base  Indenture")  to the  Trustee  to provide  for the
Company's  unsecured notes,  debentures or other evidence of indebtedness of the
Company (collectively,  the "Securities"),  and the Guarantees to be issued from
time to time in one or  more  series  (as  hereinafter  defined),  as  might  be
determined by the Company under the Base Indenture;

          WHEREAS,  pursuant  to the terms of the Base  Indenture,  the  Company
desires to provide for the establishment of a new series of its Securities to be
known as its 7-1/4%  Senior  Notes due October 15,  2031 (the  "Notes")  and the
unconditional  guarantees  by the  Guarantors of the payment of the amounts owed
with respect to the Notes (the  "Guarantees"),  the form and terms of such Notes
and the terms,  provisions  and conditions of the Notes and the Guarantees to be
set  forth  as  provided  in the Base  Indenture  and  this  First  Supplemental
Indenture (together, the "Indenture");

          WHEREAS,  the  Company  has  requested  that the  Trustee  execute and
deliver this First Supplemental Indenture and all requirements necessary to make
this First Supplemental Indenture a valid, binding and enforceable instrument in
accordance with its terms, and to make the Notes,  when executed,  authenticated
and  delivered  by the  Company  and with the  Guarantees  endorsed  thereon and
executed by the Guarantors,  the valid,  binding and enforceable  obligations of
the Company and the Guarantor, as applicable:

          NOW THEREFORE,  in consideration of the purchase and acceptance of the
Notes by the Holders thereof,  and for the purpose of setting forth, as provided
in the Base Indenture,  the form and terms of the Notes, each of the Company and
the Guarantors, as applicable, covenants and agrees with the Trustee as follows:

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.1.  Definition of Terms.

          Unless the context otherwise requires:

          (a) a term  defined in the Base  Indenture  has the same  meaning when
used in this First Supplemental Indenture;

          (b) a term defined anywhere in this First  Supplemental  Indenture has
the same meaning throughout;



<PAGE>

          (c) the singular includes the plural and vice versa;

          (d) headings are for  convenience  of reference only and do not affect
interpretation;

          (e) the  following  terms  have  the  meanings  given  to them in this
Section 1.1(e):

               "Notes" shall have the meaning specified in Section 2.1.

               "Global Note" shall have the meaning set forth in Section 2.4.

               "Interest  Payment  Date" means January 15, April 15, July 15 and
October 15 of each year, beginning January 15, 2002.

               "Maturity Date" shall have the meaning specified in Section 2.2.

               "Original Issue Date" means October 19, 2001.

               "Regular Record Date" means, with respect to any Interest Payment
Date for the Notes, the close of business on the first day of the month in which
such Interest Payment Date falls.

               The terms "First  Supplemental  Indenture"  and "Base  Indenture"
shall  have the  respective  meanings  set forth in the  recitals  to this First
Supplemental Indenture.

                                   ARTICLE II

                    GENERAL TERMS AND CONDITIONS OF THE NOTES

SECTION 2.1.  Designation and Principal Amount; Guarantees.

          There is hereby  authorized  a series  of  Securities  designated  the
7-1/4%  Senior  Notes due  October  15, 2031 (the  "Notes")  limited  (except as
otherwise provided in Article 2 of the Indenture) in aggregate  principal amount
to $100,000,000. The Notes may be issued from time to time upon written order of
the Company for the  authentication  and  delivery of Notes  pursuant to Section
2.03 of the Base Indenture.  Each of Indiana Gas, SIGECO and VEDO (together with
each other subsidiary of the Company that pursuant to the terms of the Indenture
guarantees  the Company's  obligations  under the Notes and the  Indenture,  the
"Guarantors")  unconditionally  and  jointly  and  severally  guarantees  to the
Holders of the Notes upon which the Guarantee is endorsed,  upon  authentication
and delivery by the Trustee,  the due and punctual  payment of the principal of,
and interest on, and any Redemption Price with respect to the Notes, when and as
the same  shall  become  due and  payable,  whether  at  Stated  Maturity,  upon
acceleration  or redemption or  otherwise,  in accordance  with the terms of the
Notes and of the Indenture.

SECTION 2.2.  Maturity.

          The date upon which the  principal  on the Notes shall  become due and
payable at final  maturity  is October 15, 2031 (the  "Maturity  Date"),  if not
redeemed in full previously in accordance with Article III of this  Supplemental
Indenture.

SECTION 2.3.  Form and Payment.

          Except as provided in Section  2.4, the Notes shall be issued in fully
registered certificated form without interest coupons,  bearing identical terms.
Principal  of and  interest on the Notes will be payable,  the  transfer of such
Notes will be registrable and such Notes will be exchangeable  for Notes bearing
identical terms and provisions at the office or agency of the Company maintained
for such purpose as described below.

          The Company hereby  designates  the Borough of Manhattan,  The City of
New York as a place of payment  ("Place  of  Payment")  for the  Notes,  and the
office or agency  maintained  by the  Company in such  Place of Payment  for the
purposes contemplated by this Section 2.3 shall initially be the Corporate Trust
Office of the Trustee at 100 Wall Street,  Suite 2000, New York, New York 10005,
Attention: Richard Prokosch.

          The Notes  shall be  issuable  in  denominations  of $25 and  integral
multiples of $25 in excess thereof.

          The Notes may be issued, in whole or in part, in permanent global form
and, if issued in permanent  global form, the Depository shall be The Depository
Trust  Company or such other  depositary  as any officer of the Company may from
time to time designate.

          The  Registrar,  the Paying Agent and the transfer agent for the Notes
shall initially be the Trustee.

          The Notes  shall be in  substantially  the form set forth in Exhibit A
hereto.

SECTION 2.4.  Global Note.

          (a)  Unless  and until it is  exchanged  for the  Notes in  registered
certificated  form,  a global Note in principal  amount  equal to the  aggregate
principal amount of all outstanding Notes ("Global Note") may be transferred, in
whole but not in part, only to the Depository or a nominee of the Depository, or
to a successor Depository or to a nominee of such successor Depository.



<PAGE>


          (b) If at any (i) time the Depository  notifies the Company that it is
unwilling  or unable to continue  as a  Depository  for the Global  Notes and no
successor  Depository  shall  have  been  appointed  within 90 days  after  such
notification,  (ii) the  Depository  at any time ceases to be a clearing  agency
registered  under the  Securities  Exchange Act of 1934 or any other  applicable
rule or regulation and no successor  Depository shall have been appointed within
90 days after the Company  becoming aware of the  Depository's  ceasing to be so
registered,  (iii) the  Company,  in its sole  discretion,  determines  that the
Global Notes shall be so  exchangeable  or (iv) there shall have occurred and be
continuing  an Event of  Default,  the Company  will  execute,  and,  subject to
Article II of the Base  Indenture,  the Trustee,  upon  written  notice from the
Company,  will authenticate and deliver the Notes, with the Guarantees  endorsed
thereon and executed by the Guarantors,  in registered certificated form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the  principal  amount of the Global Note in exchange  for such Global  Note.
Upon the exchange of the Global Note for such Notes in  registered  certificated
form without  coupons,  in  authorized  denominations,  the Global Note shall be
cancelled by the Trustee.  Such Notes in registered  certificated form issued in
exchange  for the  Global  Note  shall be  registered  in such names and in such
authorized  denominations as the Depository,  pursuant to instructions  from its
direct or indirect  participants or otherwise,  shall instruct the Trustee.  The
Trustee shall deliver such Notes to the  Depository  for delivery to the Persons
in whose names such Notes are so registered.

SECTION 2.5.  Payment of Principal and Interest.

          The Notes  shall bear  interest  at the per annum rate of 7-1/4%.  The
following terms apply to the Notes:

          Interest shall be paid  quarterly in arrears on each Interest  Payment
Date commencing on the Interest  Payment Date next succeeding the Original Issue
Date and, if applicable,  on the Maturity Date or date of earlier redemption, as
the case may be. Payments of interest on the Notes will include interest accrued
from, and including,  the immediately  preceding  Interest Payment Date to which
interest  has been  paid or duly  provided  for (or  from,  and  including,  the
Original  Issue Date if no interest has been paid or duly  provided for) to, but
excluding,  the applicable Interest Payment Date or the Maturity Date or date of
earlier redemption, as the case may be. Interest payments for the Notes shall be
computed and paid on the basis of a 360-day  year  consisting  of twelve  30-day
months.

          The interest so payable and  punctually  paid or duly  provided for on
any Interest  Payment Date will be paid to the  Holder(s) of the Notes as of the
Regular  Record Date for such Interest  Payment Date.  Any such interest that is
not so punctually  paid or duly  provided for on any Interest  Payment Date will
forthwith  cease to be payable to the Holders of the particular  series of Notes
as of the close of business on such  Regular  Record Date and may either be paid
to the Person or Persons in whose name such Notes are registered at the close of
business on a Special Record Date for the payment of such defaulted  interest to
be fixed by the  Trustee,  notice  whereof  shall  be  given to  Holders  of the
particular  series of Notes by the Trustee not less than fifteen (15) days prior
to such Special  Record Date, or be paid at any time in any other lawful manner,
all as more fully provided in the Base Indenture.



<PAGE>


          Payment of the  principal  of and any interest on the Notes due on the
Maturity Date or date of earlier  redemption,  as the case may be, shall be made
in immediately available funds, in such coin or currency of the United States of
America  as at the time of payment  is legal  tender  for  payment of public and
private debts,  upon  presentation  and surrender of the applicable Notes at the
office or agency  maintained  by the Company for that  purpose in the Borough of
Manhattan,  The City of New York, currently the office of the Trustee located at
100 Wall Street,  Suite 2000, New York, New York 10005,  or at such other paying
agency in the  Borough of  Manhattan,  The City of New York,  as the Company may
determine.  Payment of interest due on any Interest  Payment Date other than the
Maturity  Date or date of earlier  redemption  will be made by wire  transfer of
immediately  available  funds at such  place  and to such  account  at a banking
institution  in the  United  States  as  may  be  designated  in  wire  transfer
instructions received in writing by the Trustee at least sixteen (16) days prior
to such Interest Payment Date. Any such wire transfer  instructions  received by
the Trustee shall remain in effect until revoked by such Holder.

          In the event that any Interest  Payment  Date or the Maturity  Date or
date of  earlier  redemption  falls on a day  that is not a  Business  Day,  the
required payment of principal and/or interest payable on such date shall be made
on the next succeeding  Business Day except that, if such Business Day is in the
next  succeeding  calendar  year,  payment  shall  be  made  on the  immediately
preceding  Business  Day, in each case with the same force and effect as if made
on the date such payment was due,  and no interest  shall accrue with respect to
such  payment for the period from and after such  Interest  Payment  Date or the
Maturity Date or date of earlier redemption,  as the case may be, to the date of
such payment on the next succeeding Business Day.

                                   ARTICLE III

                       REDEMPTION OF THE NOTES; DEFEASANCE

SECTION 3.1.  Redemption at the Company's Option.

          The Notes shall be subject to redemption at the option of the Company,
in whole or in part,  without  premium or  penalty,  at any time or from time to
time on or after  October  19, 2006 at a  Redemption  Price equal to 100% of the
principal  amount  to be  redeemed  plus  any  unpaid  interest  accrued  to the
Redemption Date.

          In the event of  redemption  of a series of Notes in part only,  a new
Note or Notes of such series for the  unredeemed  portion  will be issued in the
name or  names  of the  Holders  thereof  upon the  presentation  and  surrender
thereof, as set forth in Section 3A.08 of the Base Indenture.

          Notice of  redemption  shall be given as provided in Section  3A.05 of
the Base Indenture.

          Any  redemption  of less  than all of a series  of Notes  shall,  with
respect to the principal thereof, be divisible by $1,000.


SECTION 3.2.  No Sinking Fund.

          The Notes are not  subject  to, or  entitled  to the  benefit  of, any
sinking fund.

SECTION 3.3.  Defeasance.

          Defeasance and Covenant Defeasance shall apply to the Notes.



<PAGE>


                                   ARTICLE IV

                                  MISCELLANEOUS

SECTION 4.1.  Ratification of Indenture.

          The  Base  Indenture  as  supplemented  by  this  First   Supplemental
Indenture,   is  in  all  respects  ratified  and  confirmed,   and  this  First
Supplemental  Indenture  shall be deemed part of the Indenture in the manner and
to the extent herein and therein provided.

SECTION 4.2.  Trustee Not Responsible for Recitals.

          The recitals  herein  contained are made by the Company and not by the
Trustee,  and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no  representation  as to the validity or  sufficiency of this
First Supplemental Indenture.

SECTION 4.3.  Governing Law.

          This First Supplemental Indenture and each Note issued hereunder shall
be deemed to be a contract  made under the internal laws of the State of Indiana
and for all purposes  shall be governed by and construed in accordance  with the
laws of said State without regard to principles of conflicts of law.

SECTION 4.4.  Separability.

          In case  any one or more of the  provisions  contained  in this  First
Supplemental  Indenture  or in the  Notes  shall  for any  reason  be held to be
invalid,  illegal or unenforceable in any respect, then, to the extent permitted
by law, such  invalidity,  illegality or  unenforceability  shall not affect any
other provisions of this First Supplemental  Indenture or of the Notes, but this
First Supplemental Indenture and the Notes shall be construed as if such invalid
or  illegal  or  unenforceable  provision  had never  been  contained  herein or
therein.

SECTION 4.5.  Counterparts.

          This First  Supplemental  Indenture may be simultaneously  executed in
any number of counterparts, each of which when so executed shall be an original,
and all  such  counterparts  shall  together  constitute  but  one and the  same
instrument.

SECTION 4.6.  Amendments.

          Notwithstanding any other provision hereof, all amendments to the Base
Indenture made hereby shall have effect only with respect to the Notes,  and not
with respect to the  Securities  of any other series  created  subsequent to the
date hereof.



<PAGE>


          IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  First
Supplemental  Indenture  to  be  duly  executed  by  their  respective  officers
thereunto duly authorized, on the date or dates indicated in the acknowledgments
and as of the day and year first above written.

                                           VECTREN UTILITY HOLDINGS, INC.
                                           as Issuer

                                           By: /s/ Jerome A. Benkert, Jr.
                                               ---------------------------------
                                           Name:  Jerome A. Benkert, Jr.
                                                 -------------------------------
                                           Title: Executive Vice President
                                                  ------------------------------

Attest:

By: /s/ Ronald E. Christian
    ---------------------------------------
Name: Ronald E. Christian
      -------------------------------------
Title: Secretary
       ------------------------------------


                                           INDIANA GAS COMPANY, INC.
                                           as Guarantor

                                           By: /s/ M. Susan Hardwick
                                               ---------------------------------
                                           Name:  M. Susan Hardwick
                                                 -------------------------------
                                           Title: Vice President and Controller
                                                  ------------------------------
Attest:

By: /s/ Ronald E. Christian
    ---------------------------------------
Name: Ronald E. Christian
      -------------------------------------
Title: Secretary
       ------------------------------------


                                           SOUTHERN INDIANA GAS AND ELECTRIC
                                             COMPANY
                                           as Guarantor

                                           By: /s/ M. Susan Hardwick
                                               ---------------------------------
                                           Name: M. Susan Hardwick
                                                 -------------------------------
                                           Title: Vice President and Controller
                                                  ------------------------------
Attest:

By: /s/ Ronald E. Christian
    ---------------------------------------
Name: Ronald E. Christian
      -------------------------------------
Title: Secretary
       ------------------------------------


                                           VECTREN ENERGY DELIVERY OF OHIO, INC.
                                           as Guarantor


                                           By: /s/ M. Susan Hardwick
                                               ---------------------------------
                                           Name: M. Susan Hardwick
                                                 -------------------------------
                                           Title: Vice President and Controller
                                                  ------------------------------
Attest:

By: /s/ Ronald E. Christian
    ---------------------------------------
Name: Ronald E. Christian
      -------------------------------------
Title: Secretary
       ------------------------------------


                                           U.S. BANK TRUST NATIONAL ASSOCIATION
                                           as Trustee


                                           By: /s/ Julie Eddington
                                               ---------------------------------
                                           Name:  Julie Eddington
                                                 -------------------------------
                                           Title: Assistant Vice President
                                                  ------------------------------
Attest:

By: /s/ Lori-Anne Rosenberg
    ---------------------------------------
Name:  Lori-Anne Rosenberg
      -------------------------------------
Title: Assistant Vice President
       ------------------------------------



<PAGE>


                             [Form of Face of Note]


          UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED  REPRESENTATIVE  OF
THE DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,  EXCHANGE OR PAYMENT, AND SUCH
SECURITY  ISSUED IS  REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED  REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR  OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL,  SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          UNLESS  IT  IS  EXCHANGED  IN  WHOLE  OR IN  PART  FOR  SECURITIES  IN
DEFINITIVE  REGISTERED  FORM,  THIS SECURITY MAY NOT BE TRANSFERRED  EXCEPT AS A
WHOLE  BY DTC TO A  NOMINEE  OF DTC  OR BY A  NOMINEE  OF DTC TO DTC OR  ANOTHER
NOMINEE OF DTC OR BY DTC OR ANY SUCH  NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE
OF SUCH SUCCESSOR.

                         Vectren Utility Holdings, Inc.
                    7 1/4 % Senior Note due October 15, 2031


RATE OF INTEREST             STATED MATURITY DATE         ORIGINAL ISSUE DATE
----------------             --------------------         -------------------
    7 1/4%                     October 15, 2031             October 19, 2001

Registered No. 1                                          CUSIP No.  92239M 20 0

          Vectren  Utility  Holdings,  Inc., a  corporation  duly  organized and
existing under the laws of the State of Indiana  (herein called the  "Company"),
for value  received,  hereby  promises to pay,  without relief from valuation or
appraisement  laws,  to Cede & Co. or registered  assigns,  the principal sum of
$100,000,000  on the Stated  Maturity  Date shown above or any  earlier  date of
redemption in accordance  with the  provisions on the reverse  hereof (each such
date shall be  referred  to herein as the  "Maturity  Date" with  respect to the
principal  payable  on  such  date),  and to  pay  interest  on the  outstanding
principal of this Note , at the annual Rate of Interest  shown  above,  from the
Original  Issue Date shown above or from the most recent  Interest  Payment Date
(as  hereinafter  defined) to which interest has been paid or duly provided for,
payable  quarterly on January 15, April 15, July 15 and October 15 of each year,
commencing on January 15, 2002 (an "Interest Payment Date"), and on the Maturity
Date.

          The interest so payable and  punctually  paid or duly  provided for on
any  Interest  Payment  Date  will be paid to the  Holder of this Note as of the
Regular  Record Date for such Interest  Payment Date.  Any such interest that is
not so punctually  paid or duly  provided for on any Interest  Payment Date will
forthwith  cease to be  payable  to the  Holders of this Note as of the close of
business  on such  Regular  Record  Date and may either be paid to the Person or
Persons  in whose name this Note is  registered  at the close of  business  on a
Special  Record Date for the payment of such  defaulted  interest to be fixed by
the Trustee referred to on the reverse hereof,  notice whereof shall be given to
Holders of the Notes by the Trustee not less than  fifteen  (15)  calendar  days
prior to such Special  Record  Date,  or be paid at any time in any other lawful
manner,  all as more fully provided in the Indenture  referred to on the reverse
hereof.

          Interest  payable on this Note on any Interest Payment Date and on the
Maturity Date, as the case may be, will be the amount of interest accrued during
the applicable Interest Period (as defined below).

          An "Interest Period" is each period from and including the immediately
preceding  Interest Payment Date (or from and including  October 19, 2001 in the
case of the initial  Interest  Period) to but excluding the applicable  Interest
Payment Date or the Maturity  Date, as the case may be. If any Interest  Payment
Date or Maturity Date falls on a day that is not a Business  Day,  principal and
interest  payable on such date will be paid on the succeeding  Business Day with
the same force and effect as if it were paid on the date such  payment  was due,
and no  interest  will  accrue on the amount so payable  for the period from and
after such date to such succeeding  Business Day.  "Business Day" means any day,
other than a Saturday or a Sunday,  on which banking  institutions  in New York,
New York are not required to be open.

          Payment of the  principal of, and any interest on this Note due on the
Maturity  Date shall be made in  immediately  available  funds,  in such coin or
currency  of the  United  States of  America  as at the time of payment is legal
tender for payment of public and private debts,  upon presentation and surrender
of this Note at the office or agency  maintained by the Company for that purpose
in the Borough of Manhattan,  The City of New York,  currently the office of the
Trustee located at 100 Wall Street,  Suite 2000, New York, New York 10005, or at
such other paying agency in the Borough of  Manhattan,  The City of New York, as
the Company may determine.  Payment of interest due on this Note on any Interest
Payment  Date  other than the  Maturity  Date will be made by wire  transfer  of
immediately  available  funds at such  place  and to such  account  at a banking
institution  in the  United  States  as  may  be  designated  in  wire  transfer
instructions received in writing by the Trustee at least sixteen (16) days prior
to such Interest Payment Date. Any such wire transfer  instructions  received by
the Trustee shall remain in effect until revoked by such Holder.

          Reference  is hereby made to the further  provisions  of this Note set
forth on the reverse  hereof,  which further  provisions  shall for all purposes
have the same effect as if set forth at this place.

          Unless the certificate of  authentication  hereon has been executed by
the Trustee by manual signature,  this Note shall not be entitled to any benefit
under the Indenture or the Guarantees  (as defined on the reverse  hereof) or be
valid or obligatory for any purpose.


<PAGE>



          In Witness  Whereof,  Vectren Utility  Holdings,  Inc. has caused this
Note to be executed by two of its duly authorized officers.

                                           Vectren Utility Holdings, Inc.


                                           By:
                                                --------------------------------
                                           Title:
                                                  ------------------------------



                                           By:
                                                --------------------------------
                                           Title:
                                                  ------------------------------



DATED:  October 19, 2001


TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Notes referred to in the within-mentioned Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION,
As Trustee

By:
   -------------------------------------
         Authorized Signatory



<PAGE>



                            [Form of Reverse of Note]

                         Vectren Utility Holdings, Inc.
                    7 1/4 % Senior Notes due OCTOBER 15, 2031

          This  Note is one of a duly  authorized  series of  Securities  of the
Company  (which term  includes any successor  corporation  under the Indenture )
designated  as its "7 1/4 % Senior  Notes due October 15,  2031" (the  "Notes"),
issued or to be issued  pursuant to an Indenture,  dated as of October 10, 2001,
as amended by the First  Supplemental  Indenture  dated  October  19,  2001 (the
"Indenture"),  delivered by the Company and Indiana Gas Company,  Inc., Southern
Indiana Gas and Electric Company, and Vectren Energy Delivery of Ohio, Inc. (the
"Initial  Guarantors"  and,  together with each other  subsidiary of the Company
that pursuant to the terms of the Indenture guarantees the Company's obligations
under the Indenture, the "Guarantors"), to U.S. Bank Trust National Association,
as Trustee (the "Trustee,"  which term includes any successor  trustee under the
Indenture).  The terms of this Note include  those stated in the  Indenture  and
those made part of the  Indenture  by reference  to the Trust  Indenture  Act of
1939, as in effect on the date of the Indenture. Reference is hereby made to the
Indenture and all further supplemental indentures thereto for a statement of the
respective rights, limitation of rights, duties and immunities thereunder of the
Company, the Guarantors, the Trustee and the Holders and of the terms upon which
the Notes are, and are to be, authenticated and delivered. All capitalized terms
not defined herein shall have the meanings given to them in the Indenture.

          Payments  of  principal  and  interest in respect of the Notes will be
fully  and  unconditionally   and  jointly  and  severally   guaranteed  by  the
Guarantors,  subject  to the  termination  of  any  Guarantee  of any  Guarantor
pursuant to the terms of Article Ten of the Indenture.

          The Notes are a series  of debt  securities  issued or to be issued by
the  Company  under the  Indenture,  and this  Series is  limited  in  aggregate
principal  amount to  $100,000,000,  subject to the reopening  provisions of the
Indenture.  The  Indenture  provides  that the debt  securities  of the  Company
issuable or issued thereunder ("Securities"), including the Notes, may be issued
in one or more series,  which  different  series may be issued in such aggregate
principal  amounts  and on such terms  (including,  but not  limited  to,  terms
relating to interest rate or rates,  provisions  for  determining  such interest
rate or rates  and  adjustments  thereto,  maturity,  redemption  (optional  and
mandatory), sinking fund, covenants and Events of Default) as may be provided in
or pursuant to the Authorizing  Resolutions  and/or  supplemental  indenture (if
any) relating to the Series.

          This Note is are subject to redemption  upon not less than 30 nor more
than 60 days'  written  notice  to the  Holder  hereof,  at any time on or after
October  19,  2006,  without  premium or  penalty,  in whole or in part,  at the
election of the  Company at a  Redemption  Price equal to 100% of the  principal
amount hereof, together with any unpaid interest accrued to the Redemption Date.

          In the event of  redemption  of this Note in part only,  a new Note or
Notes  for the  unredeemed  portion  hereof  shall be  issued in the name of the
Holder hereof upon the surrender hereof.

          If an Event of Default,  as defined in the Indenture,  shall occur and
be  continuing,  the principal of all the Notes may be (and,  in certain  cases,
shall be) declared due and payable in the manner and with the effect provided in
the Indenture.

          The Indenture  permits,  with certain  exceptions as therein provided,
the amendment  thereof and the modification of the rights and obligations of the
Company and, if applicable, the Guarantors, and the rights of the Holders of the
Notes at any time by the Company, the Guarantors, if applicable, and the Trustee
with the consent of the Holders of a majority in aggregate  principal  amount of
the Securities affected thereby, voting as a single class (which may include the
Notes),  at  the  time  outstanding.  The  Indenture  also  contains  provisions
permitting the Holders of a majority in aggregate  principal  amount of the then
outstanding  Securities  affected  thereby,  voting as a single class (which may
include the Notes) to waive compliance by the Company with certain provisions of
the  Indenture  and  certain  past  defaults   under  the  Indenture  and  their
consequences.  Any such  consent  or waiver by the  Holder of this Note shall be
conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note issued upon the  registration  of transfer hereof or in exchange
herefor in lieu  hereof,  whether or not  notation of such  consent or waiver is
made upon this Note.

          The Indenture  provides that no Holder may pursue any remedy under the
Indenture  unless the Trustee  shall have failed to act after notice of an Event
of Default and written request by Holders of at least 25% in aggregate principal
amount of the Notes and the offer to the Trustee of  indemnity  satisfactory  to
it;  provided  however,  such provision does not affect the right of a Holder to
sue for enforcement of any overdue payment on this Note.

          No reference  herein to the Indenture and no provision of this Note or
of the Indenture  shall alter or impair the obligation of the Company,  which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, places and rates, and in the coin or currency, herein prescribed.

          As provided in the Indenture and subject to certain limitations herein
and therein set forth,  the transfer of this Note is registrable in the Security
Register upon surrender of this Note for  registration of transfer at the agency
of the Company  provided for that purpose duly endorsed by, or  accompanied by a
written  instrument of transfer in substantially the form accompanying this Note
duly executed by, the Holder hereof or his attorney duly  authorized in writing,
and thereupon one or more new Notes,  of  authorized  denominations  and for the
same aggregate principal amount, will be issued to the designated  transferee or
transferees.

          The Notes are issuable  only in  registered  form  without  coupons in
denominations  of $25 and any  integral  multiple  thereof.  As  provided in the
Indenture and subject to certain  limitations  herein and therein set forth, the
Notes  are  exchangeable  for a like  aggregate  principal  amount of Notes of a
different authorized denominations,  as requested by the Holder surrendering the
same.

          No service charge shall be made for any such  registration of transfer
or exchange,  but the Company may require  payment of a sum  sufficient to cover
any transfer tax or similar  governmental charge payable in connection therewith
(other than any such transfer taxes or similar  governmental charge payable upon
exchanges  pursuant to Section 2.11,  3A.08 or 9.05, in which case such transfer
taxes or similar governmental charges shall be paid by the Company).

          Prior to due  presentment of this Note for  registration  of transfer,
the  Company,  the  Guarantors,  the Trustee and any agent of the  Company,  the
Guarantors  or the Trustee may treat the Holder of this Note as the owner hereof
for all purposes,  whether or not this Note be overdue, and none of the Company,
the Guarantors, the Trustee or any such agent shall be affected by notice to the
contrary.

          This  Note  shall  be  governed  by the laws of the  State of  Indiana
without regard to principles of conflicts of law.



<PAGE>


                                 ASSIGNMENT FORM

If you the Holder want to assign this Note, fill in the form below and have your
signature guaranteed:

I or we assign and transfer this Note to:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
(PRINT OR TYPE NAME,  ADDRESS AND ZIP CODE AND SOCIAL  SECURITY OR TAX ID NUMBER
OF ASSIGNEES)

and irrevocably appoint,  __________________  agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.

Dated:                                     Signed:
      ----------------------------                ------------------------------

      ----------------------------                ------------------------------

                                                  (SIGN EXACTLY AS NAME
                                                  APPEARS ON THE OTHER SIDE
                                                  OF THIS NOTE.)

SIGNATURE GUARANTEE:

---------------------------------------------------------

Notice:  Signature(s)  must be guaranteed by a member firm of the New York Stock
Exchange or a commercial bank or trust company.


<PAGE>


                           [Form of Guarantee of Note]

          For good  and  valuable  consideration  receipt  of  which  is  hereby
acknowledged,  and  intending to be legally  bound  hereby,  each of Indiana Gas
Company,  Inc.,  Southern Indiana Gas and Electric  Company,  and Vectren Energy
Delivery of Ohio, Inc.  (together with each other subsidiary of the Company that
pursuant to the terms of the  Indenture  guarantees  the  Company's  obligations
under the Notes and the Indenture,  the "Guarantors") hereby unconditionally and
jointly  and  severally  guarantees  to the  Holder  of the note  (the  "Note"),
authenticated  and  delivered by the  Trustee,  upon which this  guarantee  (the
"Guarantee") is endorsed,  the due and punctual  payment of the principal of and
interest on, and any Redemption  Price with respect to the Note, when and as the
same shall become due and payable, whether at Stated Maturity, upon acceleration
or redemption or otherwise, in accordance with the terms of this Note and of the
Indenture.

          The Guarantors agree to determine,  at least one Business Day prior to
the date upon which a payment of principal of and/or  interest on the Note,  and
any Redemption  Price with respect to the Note, is due and payable,  whether the
Company has  available  the funds to make such  payment as the same shall become
due and  payable.  In case of the failure of the Company to  punctually  pay any
such principal of or interest on, or any  Redemption  Price with respect to, the
Note,  the  Guarantors  hereby  agree  to  cause  any  such  payment  to be made
punctually when and as the same shall become due and payable,  whether at Stated
Maturity, upon acceleration or redemption,  or otherwise, and as if such payment
were made by the Company.

          The Guarantors hereby agree that their obligations  hereunder shall be
as principal and not merely as surety, and shall be unconditional,  irrevocable,
and  absolute,  irrespective  of, and shall be  unaffected  by, any  invalidity,
irregularity,  or unenforceability of the Note or such Indenture, any failure to
enforce  the  provisions  of  the  Note  or  the   Indenture,   or  any  waiver,
modification,  consent or indulgence granted to the Company with respect thereto
(unless the same shall also be provided to the  Guarantors) by the Holder of the
Note or the Trustee with respect to any provisions thereof,  the recovery of any
judgment  against the  Company or any action to enforce  the same,  or any other
circumstance which might otherwise  constitute a legal or equitable discharge or
defense of a surety or of a guarantor.  The Guarantors  hereby waive  diligence,
presentment,  demand of  payment,  filing of claims with a court in the event of
merger,  insolvency  or  bankruptcy  of the  Company,  any  right to  require  a
proceeding first against the Company,  protest or notice with respect to any the
Note or the  indebtedness  evidenced  thereby,  and all demands  whatsoever  and
covenants that this  Guarantee will not be discharged  except by payment in full
of the principal of and interest on, and any  Redemption  Price with respect to,
the Note and the complete performance of the obligations  contained in the Note,
this Guarantee and the Indenture.

The  Guarantors  shall be  subrogated  to all  rights of the  Holder of the Note
against  the  Company  in  respect  of all  amounts  paid to such  Holder by the
Guarantors pursuant to the provisions of this Guarantee; provided, however, that
the  Guarantors  shall not,  without  the  consent of the  Holders of all of the
outstanding  Notes (the  "Notes") of the series of which the Note is a part,  be
entitled to enforce or to receive any payments arising out of or based upon such
right of subrogation  until the principal of and interest on, and any Redemption
Price with respect to all Notes shall have been paid in full or payment  thereof
shall have been  provided for and all other  obligations  contained in the Notes
and the Indenture shall have been performed.  If any amount shall be paid to any
Guarantor  in  violation of the  preceding  sentence and all amounts  payable in
respect of the Securities shall not have been paid in full, such amount shall be
deemed to have been paid to such Guarantor for the benefit of, and held in trust
for the benefit of, the Holders,  and shall forthwith be paid to the Trustee for
the benefit of the Holders to be credited  and applied upon such  amounts.  Each
Guarantor  acknowledges  that it will receive direct and indirect  benefits from
the issuance of the Notes pursuant to this Indenture.

          Notwithstanding   anything  to  the  contrary   contained  herein,  if
following  any  payment of the  principal  Redemption  Price or  interest by the
Company in respect of the Notes to the Holders of the Notes it is  determined by
a final decision of a court of competent jurisdiction that such payment shall be
avoided by a trustee in bankruptcy  (including  any  debtor-in-possession)  as a
preference  under 11 U.S.C.  Section  547 and such  payment is  returned by such
Holder to such trustee in  bankruptcy,  then the  obligations  of the Guarantors
hereunder shall remain in full force and effect to the extent of such repayment.

Notwithstanding  anything to the contrary contained herein, this Guarantee shall
be, and hereby is,  limited to the maximum  amount that may be guaranteed by the
applicable  Guarantor  without  rendering this Guarantee,  as it relates to such
Guarantor,  voidable under any applicable law relating to fraudulent conveyance,
fraudulent transfer or similar laws affecting the rights of creditors generally.

          This  Guarantee is intended for the benefit of the Trustee and each of
the  Holders  of the Notes and shall be  enforceable  by such  Trustee  and such
Holders.

          This  Guarantee  is  subject to  termination  in  accordance  with the
provisions of Article 10 of the Indenture.

          This  Guarantee  shall be governed by the laws of the State of Indiana
without regard to principles of conflicts of law.


<PAGE>


          IN  WITNESS  WHEREOF,  Indiana  Gas  Company,  Inc.  has  caused  this
Guarantee to be executed by two of its duly authorized officers.



                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:



                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:



<PAGE>


          IN WITNESS  WHEREOF,  Southern  Indiana Gas and  Electric  Company has
caused this Guarantee to be executed by two of its duly authorized officers.



                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:



                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:


<PAGE>


          IN WITNESS  WHEREOF,  Vectren Energy Delivery of Ohio, Inc. has caused
this Guarantee to be executed by two of its duly authorized officers.



                                        By:
                                           -------------------------------------
                                             Name:
                                             Title:



                                        By:
                                           -------------------------------------
                                             Name:
                                             Title: