Document:

Exhibit 4.2

 

 

AGREEMENT CONCERNING

ALLOCATION OF THE STOCK ACQUISITION RIGHTS 

OF SONY CORPORATION

FOR THE FISCAL YEAR 2005

 

SONY CORPORATION (hereinafter referred to as the “Corporation”) and ___________________ (hereinafter referred to as the “Qualified Person”) enter into this Agreement as follows in connection with the allocation of the stock acquisition rights (hereinafter referred to as the “Options”) to be issued by the Corporation pursuant to the provisions of the terms and conditions of the Options (hereinafter referred to as the “Terms and Conditions”) set forth in Exhibit 1 attached hereto and pursuant to the special resolution adopted at the 88th Ordinary General Meeting of Shareholders held on June 22, 2005 and the resolution adopted at the meeting of the Board of Directors held on October 26, 2005:

 

	
            Article 1
 	
            (Purpose and Administration)
 

The primary purpose of allocating the Options to the Qualified Person is to enhance the willingness of the Qualified Person to contribute towards the advancement of the Sony Group’s business performance and thereby advance such business performance by making the economic interest, which the Qualified Person will receive, correspond to the business performance of the Corporation.  This Agreement and the Terms and Conditions shall be administered by the Corporation, and such representative corporate executive officers or other persons as the Corporation may designate from time to time who represent the Corporation in respect of this Agreement, the Terms and Conditions and the Options.

 

	
            Article 2
 	
            (Restrictions under the Terms and Conditions and this Agreement)
 

The Options shall be subject to (1) the Terms and Conditions, which are attached to this Agreement as Exhibit 1 and form an integral part of this Agreement, and (2) the conditions and restrictions provided for in this Agreement.  The Qualified Person agrees to be bound by the conditions and restrictions set forth in the Terms and Conditions and this Agreement.  Notwithstanding the provisions of the Terms and Conditions, the exercise of the Options is further subject to such additional conditions as set forth herein.  In particular, the exercise of the Options is subject to the restrictions under Articles 5 and 7.

 

	
            Article 3
 	
            (Allocation of the Options)
 

Pursuant to this Agreement, the Corporation allocates the following Options to the Qualified Person in accordance with the following terms on the execution date of this Agreement.

	
             
 	
            (1)
 	
            Number of the Options allocated to the Qualified Person:
 
	 	 	________ (________ shares may be issued or transferred upon the exercise by the Qualified Person of all Options allocated to the Qualified Person pursuant to this Agreement.)

 

 

 

	
             
 	
             
 	
             
 

 

 

 

 

	
             
 	
            (2)
 	
            Class and number of shares to be issued or transferred upon exercise of each Option:

            

      100 shares of common stock of the Corporation      
 

	
             
 	
            (3)
 	
      Amount to be paid per share to be issued or transferred upon exercise of the Options (hereinafter referred to as the “Exercise Price”) is initially
      :

      

      US$34.14
 

	
             
 	
            (4)
 	
      Period during which the Options may be exercised:

        

      From and including November 18, 2005, to and including November 17, 2015 (the “Term”), however, exercise of the Options is subject to the restrictions provided for in Article 5.
 

 

The number of shares to be issued or transferred upon exercise of each Option and the Exercise Price may be adjusted pursuant to the provisions of the Terms and Conditions.

 

	
            Article 4 
 	
            (Information on Corporation and its Shares)
 

Basic information on the Corporation and its shares is as set forth in Exhibit 2 attached hereto.

 

	
            Article 5
 	
            (Vesting, Conditions for Exercise of the Options and Prohibition of Disposition)
 

	
             
 	
            (1)
 	
            Vesting and exercise of the Options are further subject to the restrictions as set forth in Exhibit 3 attached hereto.
 

	
             
 	
            (2)
 	
            Except as provided in Article 7, the Options, whether vested or unvested, are nontransferable by the Qualified Person.
 

	
             
 	
            (3)
 	
            Exercise of the Options are further subject to any restriction on trading set forth under Sony Corporation of America’s Policy Regarding Securities Trading, as in effect from time to time.
 

 

	
            Article 6
 	
            (Procedures for Exercising the Options)
 

Procedures for exercising the Options shall be provided for in the Terms and Conditions, and in addition, detailed matters concerning such procedures shall be provided for in a “Guide to the Sony Stock Option Program” separately provided and delivered by the Corporation or one of its subsidiaries to the Qualified Person no later than the date on which the Options held by the Qualified Person first become exercisable pursuant to Article 5.

 

	
            Article 7
 	
            (Inheritance of the Options)
 

Upon the death of the Qualified Person, outstanding Options that are vested and exercisable and granted to such Qualified Person may be exercised only by the executors or administrators of the Qualified Person’s estate or by any person or persons who shall have acquired such right to exercise by will or by the laws of descent and distribution, provided that 

 

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no transfer by will or the laws of descent and distribution of any Option, or the right to exercise any Option, shall be effective to bind the Corporation unless the Corporation shall have been furnished with (a) a written notice thereof and a copy of the will and/or such evidence as the Corporation may deem necessary to establish the validity of the transfer and (b) an agreement by the transferee to comply with all the terms and conditions of the Options that are or would have been applicable to the Qualified Person (other than any terms and conditions relating to employment with the Corporation or one of its subsidiaries) and to be bound by the acknowledgements made by the Qualified Person in connection with the grant of the Options.  Options that are not vested and exercisable at the death of the Qualified Person will terminate.

 

	
            Article 8
 	
            (Issue of Certificate for the Options) 
 

The Qualified Person shall not request the Corporation to issue certificates for the Options.

 

	
            Article 9
 	
            (Issuance of ADRs)
 

The Corporation currently maintains an American Depositary Receipt program in the United States pursuant to which American Depositary Receipts or “ADRs” represent shares of common stock of the Corporation.  During the time the Corporation maintains an American Depositary Receipt program in the United States, the Qualified Persons who exercise the Options will generally receive ADRs in lieu of shares of common stock of the Corporation as follows.  Upon exercise of an Option, certificates for shares of common stock of the Corporation acquired upon the exercise of such Option shall be issued in the name of the depositary under the Sony American Depositary Receipt Program for the benefit of the Qualified Person.  Upon receipt of shares of common stock of the Corporation upon the exercise of an Option, the depositary under the Sony American Depositary Receipt Program shall
immediately and automatically issue ADRs representing such shares of common stock of the Corporation in the name of the applicable Qualified Person and shall deliver such ADRs to such Qualified Person (or to an account held for the benefit of such Qualified Person) as soon as practicable following the effective date on which such issuance occurs.  For simplicity, all references in this Agreement and the Terms and Conditions to shares of common stock of the Corporation will be deemed to also refer to ADRs.

 

	
            Article 10
 	
            (Treatment in Events of Merger and Consolidation)
 

1.          In the event of (a) any consolidation or amalgamation of the Corporation with, or merger of the Corporation into, any other corporation (other than a consolidation, amalgamation or merger in which the Corporation is the continuing corporation) or (b) any other corporate transaction (excluding any transaction described in (a) above, a share exchange or a share transfer) involving the Corporation, including a dissolution or liquidation of the Corporation, a sale of all or substantially all of the Corporation’s assets, a corporate split, or any other similar transaction, the Corporation may (x) cause the entity resulting from such transaction to execute an agreement providing that a holder of the Options shall have the right during the Term to exercise the Options and upon such exercise of the Options to receive 

 

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the class and amount of shares and other securities and property receivable upon such transaction by a holder of the number of shares in respect of which the Options could have been exercised immediately prior to such transaction or (y) prevent from being exercised, effective immediately upon the occurrence of such transaction, each Option outstanding immediately prior to such transaction (whether or not then exercisable). 

2.          In the event that the Corporation enters into a definitive agreement or makes a decision by board resolution or approval of shareholders’ meeting to effectuate one or more of the transactions or events described in (a) or (b) in the immediately preceding paragraph (in this paragraph 2, including a share exchange and a share transfer), the Corporation may provide not less than twenty days advance notice to the Qualified Person from the consummation of such transaction or event and give the Qualified Person the opportunity to exercise their Options (whether or not such Options are then vested or exercisable), immediately prior to, and subject to, the consummation of such transaction or event.

 

	
            Article 11
 	
            (Withholding by the Corporation)
 

In connection with Condition 14(2), the Corporation or its designee is authorized to withhold from any payment relating to an Option or from any payroll or other payment to the Qualified Person, amounts of withholding and other taxes or fees due in connection with the Option, and to take any other action as the Corporation may deem advisable to enable the Corporation and the Qualified Person to satisfy obligations for the payment of withholding taxes, other tax obligations and other costs and fees relating to the Options.  This authority shall include, either on a mandatory or elective basis in the discretion of the Corporation, authority (a) to withhold or receive shares of common stock of the Corporation or other property and (b) to make cash payments in respect thereof in satisfaction of the Qualified Person’s tax obligations and other costs and fees relating to the Options.

 

	
            Article 12
 	
            (Compliance with the Applicable Securities Law, Etc.)
 

The Qualified Person shall, in selling the shares of common stock of the Corporation acquired upon exercise of the Options, confirm in advance with the Corporation that such proposed sale is permissible under any and all applicable policies, programs, arrangements or other provisions relating to insider trading maintained by the Corporation or any of its subsidiaries and shall comply with any and all applicable laws and regulations, including but not limited to U.S. and Japanese laws.

 

	
            Article 13
 	
            (Amendment to this Agreement and Treatment of Matters Not Provided for in this Agreement)
 

1.          This Agreement (including any Exhibit to this Agreement) cannot be modified or amended in any manner except by a further agreement expressly stating the intention to modify this Agreement and which is signed by both parties to this Agreement.

2.          Notwithstanding the immediately preceding paragraph, if it is found out that this Agreement is not in compliance with the Commercial Code, the Securities and Exchange Law, the Income Tax Law, the Corporation Tax Law or any other related laws or regulations of 

 

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Japan or any applicable laws of any other jurisdiction, or if this Agreement becomes not in compliance therewith as a result of amendments thereto which become effective after the conclusion of this Agreement, the Corporation may, without the consent of the Qualified Person, with notice to the Qualified Person, adequately establish, amend or eliminate the subject provisions.

3.          With respect to matters not provided for in this Agreement or the “Guide to the Sony Stock Option Program”, such matters shall be determined by consultation in good faith between the Corporation and the Qualified Person.  In the event that the Qualified Person rejects such consultation, or in the event that such consultation fails to bring an agreement, such matters shall be decided by the Corporation and such representative corporate executive officers or other persons as the Corporation may designate from time to time to represent the Corporation in respect of the Terms and Conditions, the Options and this Agreement.  Decisions of the Corporation or such representative corporate executive officers or other persons as the Corporation may designate from time to time to represent the Corporation in
respect of the Terms and Conditions, the Options and this Agreement shall be final and binding on all parties.  None of the Corporation or such representative corporate executive officers or other persons as the Corporation may designate from time to time to represent the Corporation in respect of the Terms and Conditions, the Options or this Agreement shall be liable to any Qualified Person for any action, omission or determination relating to the Terms and Conditions, the Options or this Agreement.

 

	
            Article 14
 	
            (Manner of Notice)
 

Notices by the Corporation to the Qualified Person under the Terms and Conditions and this Agreement shall be made in any of the following manners: 

	
             
 	
            (1)
 	
            delivering (including mailing) a written notice to the address of the Qualified Person set forth in the register of the Options;
 

	
             
 	
            (2)
 	
            sending documents to the Qualified Person at his/her department in the Corporation (including any Sony Group Company) or sending electronic data to the e-mail address of the Qualified Person at the Corporation (including any Sony Group Company); or
 

	
             
 	
            (3)
 	
            giving notice on the web site of the Corporation (including any Sony Group Company).
 

 

	
            Article 15
 	
            (Construction)
 

Nothing herein shall be construed to give the Qualified Person any right or entitlement to receive options to purchase common stock of the Corporation in the future from the Corporation or any of its subsidiaries.  Nothing contained herein shall confer upon the Qualified Person any right to continue in the employment of the Corporation or any of its subsidiaries or constitute any contract or agreement of employment or interfere in any way with the right of the Corporation or its subsidiaries to reduce or modify a Qualified Person’s compensation in existence at the time of the granting of any Option or otherwise, or to terminate a Qualified Person’s employment or change the Qualified Person’s position or the 

 

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terms of employment with or without cause.  Nothing contained herein shall prevent the Corporation from, and the Corporation expressly reserves the right to, modify the terms and conditions of options to purchase common stock of the Corporation, if any, that are or may be granted in the future.

 

	
            Article 16
 	
            (Governing Law and Jurisdiction)
 

This Agreement shall be governed by and construed in accordance with the laws of Japan.  The Tokyo District Court shall have the exclusive jurisdiction for settling any and all disputes that arises under or in connection with this Agreement.

 

 

IN WITNESS WHEREOF, this Agreement and the grant of the Options provided for herein shall be effective as of the date that two (2) originals of this Agreement have been prepared and executed by seal impressions or signatures by the Corporation and the Qualified Person, each party retaining one (1) original.

 

 

SONY CORPORATION

                7-35, Kitashinagawa 6-chome, Shinagawa-ku, Tokyo

 

 

	
             
 	
            By:
 	
/s/ Howard Stringer                                                                                      
 

Howard Stringer

Chairman and Chief Executive Officer, 

Representative Corporate Executive Officer 

Date:  November 17, 2005

 

QUALIFIED PERSON

  

	
       
	
      By:
	
                                                                                                                        

	
             
 	
      Address

        

      :Date: November 17, 2005
 

 

 

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Exhibit 1

TERMS AND CONDITIONS OF THE ELEVENTH SERIES OF

STOCK ACQUISITION RIGHTS

FOR SHARES OF COMMON STOCK OF SONY CORPORATION

These terms and conditions of the stock acquisition rights shall apply to the Eleventh Series of Stock Acquisition Rights for Shares of Common Stock (hereinafter referred to as the “Options”) of Sony Corporation (hereinafter referred to as the “Corporation”) issued on November 17, 2005 by the Corporation in accordance with the special resolution adopted at the 88th Ordinary General Meeting of Shareholders held on June 22, 2005 and the resolution adopted at the meeting of the Board of Directors held on October 26, 2005:

	
            1.
 	
      Aggregate Number of Options

        

      11,241
 

	
            2.
 	
      Class and Number of Shares to be Issued or Transferred upon Exercise of Each Option

        

      100 shares of common stock of the Corporation (hereinafter referred to as “Common Stock”)
 

	
            3.
 	
            Adjustment of Number of Shares to be Issued or Transferred upon Exercise of Each Option
 

	
             
 	
            (1)
 	
            In the case that the Corporation splits or consolidates Common Stock, the number of shares to be issued or transferred upon exercise of each Option (hereinafter referred to as the “Number of Granted Shares per Option”) shall be adjusted in accordance with the following formula:
 

 

	
            Number of Granted Shares per Option after adjustment
 	
            =
 	
            Number of Granted Shares per Option before adjustment
 	
            x
 	
Ratio of split or consolidation
 

 

	
             
 	
            (2)
 	
            An adjustment to the Number of Granted Shares per Option under the immediately preceding item shall be made only with respect to the Number of Granted Shares per Option for the Options which have not been exercised at the time of the adjustment.  Any fraction less than one (1) share resulting from the adjustment shall be disregarded.
 

	
             
 	
            (3)
 	
            The effective date of the Number of Granted Shares per Option after adjustment shall be the same day as the date on which the Exercise Price after adjustment becomes effective as provided for in item (2) of Condition 7 with regard to the adjustment of the Exercise Price pursuant to Condition 7 for the same reason as the adjustment of the Number of Granted Shares per Option.
 

	
             
 	
            (4)
 	
            When the Number of Granted Shares per Option is adjusted, the Corporation shall give notice of necessary matters to each holder of the Options registered in the register of Options, no later than the day immediately preceding the effective date of the Number of Granted Shares per Option after adjustment; provided, however, that if the Corporation is unable to give such notice no later than the day immediately 
 

 

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preceding such effective date, the Corporation shall promptly give such notice on or after such effective date.

	
            4.
 	
      Issue Price of Options

        

      The Options are issued without the payment to the Corporation of any consideration.
 

	
            5.
 	
      Issue Date of Options

        

      November 17, 2005
 

	
            6.
 	
      Exercise Price of Options

        

      The amount to be paid in per share to be issued or transferred upon exercise of the Options (the “Exercise Price”) is initially US$34.14.
 

	
            7.
 	
            Adjustment of Exercise Price
 

	
             
 	
            (1)
 	
            In the case that the Corporation splits or consolidates Common Stock after the issue date of the Options, the Exercise Price shall be adjusted in accordance with the following formula, and any fraction less than one (1) cent resulting from the adjustment shall be rounded up to the nearest one (1) cent:
 

 

	
            Exercise Price after adjustment
 	
            =
 	
            Exercise Price before adjustment
 	
            x
 	
                             1                       

                      Ratio of split or consolidation
      

 

	
             
 	
            (2)
 	
            In the case that the Exercise Price is adjusted pursuant to the immediately preceding item, the effective date of the Exercise Price after adjustment shall be as set forth below:
 

The Exercise Price after adjustment shall become effective, in the case of a stock split, on and after the day immediately following the allocation date for such stock split, and in the case of a stock consolidation, on and after the day immediately following the expiration date of the period provided for in paragraph 1 of Article 215 of the Commercial Code of Japan; provided, however, that in the case that the Corporation splits Common Stock on condition that an agenda on transferring profits available for dividends to stated capital is approved by an Ordinary General Meeting of Shareholders of the Corporation and the allocation date for such stock split falls on any day prior to the conclusion date of such General Meeting of Shareholders, the Exercise Price after adjustment shall, on the date immediately after the conclusion date of such General Meeting of Shareholders, become
effective retroactively from the date immediately after the allocation date.

In the case provided for in the proviso above, Common Stock in such number as calculated in accordance with the following formula shall be issued or transferred to the holders of the Options who exercise the Options from the day immediately following the allocation date for the stock split up to the conclusion date of the relevant General Meeting of Shareholders.  (The number of shares to be initially issued or transferred upon such exercise of the Options shall be hereinafter referred to 

 

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as the “Number of Initial Shares before Approval”.)  In this case, any fraction less than one (1) share resulting from such calculation shall be disregarded.

 

	
             

Number of shares 
 to be additionally 
 issues or transferred
 	
            =
 	
             
 	
            Exercise Price before adjustment
 	
            —
 	
            Exercise Price after adjustment
 	
             
 	
            x
 	
            Number of Initial Shares before Approval
 
	
Exercise Price after adjustment
 

 

	
             
 	
            (3)
 	
            In addition to the cases in item (1) of this Condition where the Exercise Price is required to be adjusted, the Exercise Price shall be adjusted in a manner deemed to be appropriate by the Corporation in the following cases.
 

	
             
 	
            (i)
 	
            When the Exercise Price is required to be adjusted due to a merger, capital reduction, or corporate split (split by new incorporation or by absorption) of the Corporation.
 

	
             
 	
            (ii)
 	
            In addition to item (i) above, when the Exercise Price is required to be adjusted due to the occurrence of an event that cause or may cause a change in the total number of the issued Common Stock.
 

	
             
 	
            (4)
 	
            When the Exercise Price is adjusted, the Corporation shall give notice of necessary matters to each holder of the Options registered in the register of Options, no later than the day immediately preceding the effective date of the Exercise Price after adjustment; provided, however, that if the Corporation is unable to give such notice no later than the day immediately preceding such effective date, the Corporation shall promptly give such notice on or after such effective date.
 

	
            8.
 	
            Period during which Options May be Exercised
 

From and including November 18, 2005, up to and including November 17, 2015.  If the last day of such period falls on a holiday of the Corporation, the immediately preceding business day shall be the last day of such period.

	
            9.
 	
            Conditions for Exercise of Options
 

	
             
 	
            (1)
 	
            No Option may be exercised in part.
 

	
             
 	
            (2)
 	
            If a share exchange or share transfer by which the Corporation becomes a wholly-owned subsidiary of another company is approved at the General Meeting of Shareholders of the Corporation, the holders of the Options may not exercise the Options on and after the effective date of such share exchange or share transfer.
 

	
            10.
 	
            Restrictions under the U.S. Securities Act and Other Matters
 

The Corporation shall not be obligated to effect the registration pursuant to the U.S. Securities Act of 1933, as amended, of any Common Stock to be issued or transferred upon exercise of the Options or to effect similar compliance under any state laws.  Notwithstanding anything herein to the contrary, the Corporation shall not be obligated to issue or cause to be issued or delivered any certificates evidencing or representing 

 

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Common Stock pursuant to these terms and conditions unless and until the Corporation is advised by its legal counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and the requirements of any securities exchange on which Common Stock is traded.  The Corporation may require, as a condition to the issuance and transfer of Common Stock pursuant to these terms and conditions, that the recipient of such Common Stock make such covenants, agreements and representations, and that such certificates bear such legends, as the Corporation deems necessary or desirable.

The exercise of any Option granted hereunder shall only become effective at such time as counsel to the Corporation shall have determined that the issuance and transfer of Common Stock pursuant to such exercise is in compliance with all applicable laws, regulations of governmental authorities and the requirements of any securities exchange on which Common Stock is traded.  The Corporation may, in its sole discretion, defer the effectiveness of the exercise of an Option granted hereunder to allow the issuance and transfer of Common Stock upon such exercise to be made pursuant to registration or an exemption from registration or other methods for compliance available under federal or state securities laws.  The Corporation shall inform the holder of such Option in writing of the decision to defer the effectiveness of the exercise of such Option granted hereunder.  During the period that
the effectiveness of the exercise of an Option has been deferred, the holder of such Option may, by a written notice, withdraw such exercise and obtain the refund of any amounts paid in connection with such exercise.

	
            11.
 	
            Mandatory Cancellation of Options
 

Not applicable.

	
            12.
 	
            Purchase and Cancellation of Options
 

The Corporation may acquire the Options from a holder of the Options without any payment therefor when the holder agrees to return the Options to the Corporation and the Corporation may cancel them.

	
            13.
 	
            Restrictions on Transfer of Options
 

The Options are non-transferable (other than any transfer of Options that are vested and exercisable upon the death of a holder of the Options to such holder’s estate or beneficiaries), unless such transfer is expressly approved by the Board of Directors of the Corporation.

	
            14.
 	
            Application for Exercise of Options and Manner of Payment
 

	
             
 	
            (1)
 	
            In the case of exercise of the Options, the holder of the Options shall fill in necessary matters on the “Application Form for Exercise of the Options” in the form designated by the Corporation, and shall submit such application form (including application for exercise of the Options in an electromagnetic manner) to the place where applications for exercise of the Options are made as provided for in Condition 15, after affixing his or her name and seal or signature (including electronic signature) thereon.  If certificates for the Options to be exercised are issued, the certificates shall be submitted together with the Application Form for 
 

 

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Exercise of the Options.  The Application Form for Exercise of the Options shall be accepted at the place where applications for exercise of the Options are made only on a business day at such place.

	
             
 	
            (2)
 	
            The entire amount of the Exercise Price to be paid in upon exercise of the Options, including any applicable taxes and all other costs or fees associated with the exercise (hereinafter referred to as the “Amount of Payment”) shall be paid in cash to an account designated by the Corporation (hereinafter referred to as the “Designated Account”) at the payment handling place provided for in Condition 16 at or before the date and time designated by the Corporation.  The entitlement of a holder of the Options to the receipt of Common Stock upon exercise of an Option is subject to the payment in full of any federal, state, local and foreign taxes of any kind required to be withheld with respect to the exercise of such Option, as well as the payment in full of any costs or fees (such as brokerage fees) associated
with the exercise of such Option.
 

	
             
 	
            (3)
 	
            Except as provided for in Condition 10, any holder of the Options who has submitted the documents required for exercise of the Options to the place where applications for exercise of the Options are made, may not cancel such exercise thereafter.
 

	
            15.
 	
            Place where Applications for Exercise of Options are Made
 

Sony Corporation of America, Human Resources, or its duly authorized designee

	
            16.
 	
            Payment Handling Place on Exercise of Options
 

Sumitomo Mitsui Banking Corporation, Head Office (or any successor bank of such bank from time to time and/or any successor office of such office)

	
            17.
 	
            Effective Date and Time of Exercise of Options
 

	
             
 	
            (1)
 	
            Except as provided for in Condition 10, the exercise of the Options shall become effective when an Application Form for Exercise of the Options referred to in item (1) of Condition 14 and the certificates for the Options to be exercised (if issued) that are accepted at the place where applications for exercise of the Options are made are delivered to the payment handling place provided for in Condition 16 and the Amount of Payment provided for in Condition 14 is duly paid to the Designated Account.
 

	
             
 	
            (2)
 	
            The Corporation shall deliver the share certificates without delay after the procedure for exercise of the Options is completed; provided, however, that the Corporation shall not deliver share certificates for shares constituting less than one (1) full unit of shares.
 

	
            18.
 	
            Calculation of Dividend on Shares
 

	
             
 	
            (1)
 	
            With respect to the initial payment of annual dividends or cash distribution as provided for in Article 293-5 of the Commercial Code of Japan (interim dividends) on Common Stock issued or transferred upon exercise of the Options, such shares shall be deemed to have been issued or transferred, in the case that the Options are 
 

 

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exercised during the period from April 1 to September 30 in any year, on April 1 of that year, and in the case that the Options are exercised during the period from October 1 in any year to March 31 of the following year, on October 1 of that year.

	
             
 	
            (2)
 	
            Notwithstanding the provisions in item (1) above, shares of common stock of the Corporation issued or transferred upon exercise of the Options shall be treated, in relation to any distribution of dividends under the new corporation law enacted on June 29, 2005 and which will come into effect within one year and six months after its promulgation (hereinafter referred to as the “New Corporation Law”) (including interim dividends being cash distributions pursuant to Article 454, Paragraph 5 of the New Corporation Law) which will take the form of distribution of surplus, the same as shares of common stock of the Corporation outstanding on the record date for the determination of shareholders entitled to receive such dividends on and after the relevant effective date of exercise of the Options.
 

	
            19.
 	
            Portion of Issue Price of a Share which Will not be Accounted for as Stated Capital in Case a Share is Issued upon Exercise of Options
 

The portion of the issue price of a share which will not be accounted for as stated capital shall be the amount obtained by reducing the amount which will be accounted for as stated capital from the Exercise Price (if the Exercise Price is adjusted under Condition 7, the Exercise Price after adjustment).  The amount to be accounted for as stated capital shall be the amount obtained by multiplying the Exercise Price (if the Exercise Price is adjusted under Condition 7, the Exercise Price after adjustment) by 0.5, and any fraction less than one (1) cent resulting from such calculation shall be rounded up to the nearest one (1) cent.

	
            20.
 	
            Issue of Certificates for Options
 

Certificates for the Options shall be issued only when a holder of the Options requests the Corporation to issue such certificates of Options.

	
            21.
 	
            Loss of Certificates for Options
 

	
             
 	
            (1)
 	
            In the case that any holder of the Options that has lost a certificate for any Options notifies the Corporation of its certificate number and the reason for such loss and other matters and requests the issue and delivery of a replacement certificate for such Options together with a certified copy of the final judgment of nullification of the subject lost certificate, the Corporation may issue and deliver a replacement certificate for such Options.
 

 

	
             
 	
            (2)
 	
            In the case of destruction or defacement of a certificate for any Options, the holder of such destroyed or defaced certificate for such Option shall request the issue and delivery of a replacement certificate for such Options by submitting such destroyed or defaced certificate to the Corporation.  In such case, the Corporation shall issue and deliver a replacement certificate for such Options in exchange for such destroyed or defaced certificate for such Options; provided, however, that the provision above for loss of a certificate for such Options shall apply mutatis mutandis when it is difficult to determine whether such destroyed or defaced certificate for such Option is genuine or not.
 

 

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            22.
 	
            Expenses of Delivery of Replacement Certificates for Options
 

In the case of the issue and delivery of a replacement certificate for an Option, the Corporation shall collect the actual expenses required therefor from the person who so requested, unless such expenses are paid for by another entity, which may include the Corporation or its subsidiaries or affiliates.

	
            23.
 	
            Handling of Matters Relating to Abolition of Unit Share System
 

In the case that the Corporation abolishes the unit share system after the issue date of the Options, the Corporation may take necessary measures for handling the related matters thereto in a manner deemed as appropriate by the Corporation in accordance with the provisions of the Commercial Code of Japan and consistent with these terms and conditions.

	
            24.
 	
            Handling of Matters Relating to Amendments to Laws and Regulations
 

In the case that provisions of the Commercial Code of Japan and/or other Japanese laws and regulations relating to the issuance of share certificates or other certificates or stock acquisition rights are amended after the issue date of the Options, the Corporation may take necessary measures for handling the matters relating thereto in a manner deemed as appropriate by the Corporation in accordance with the provisions of the Commercial Code of Japan and/or other Japanese laws and regulations then in effect and consistent with these terms and conditions.

 

 

 

- 13 -VUHI Fourth Supplemental Indenture

    

      Exhibit
        4.1

      

      FOURTH
        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
        NATIONAL ASSOCIATION, AS TRUSTEE

      

      

      

      

      

      

      Dated
        November 21, 2005

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      TABLE
        OF CONTENTS

      

      
        	 	 	 	
                Page

              
	
                ARTICLE
                  1

              	
                DEFINITIONS

              	
                1

              
	 	
                SECTION
                  1.1

              	
                Definition
                  of Terms

              	
                1

              
	
                ARTICLE
                  II

              	
                GENERAL
                  TERMS AND CONDITIONS OF THE NOTES

              	
                3

              
	 	
                SECTION
                  2.1

              	
                Designation
                  and Principal Amount; Guarantees

              	
                3

              
	 	
                SECTION
                  2.2

              	
                Maturity

              	
                3

              
	 	
                SECTION
                  2.3

              	
                Form
                  and Payment

              	
                3

              
	 	
                SECTION
                  2.4

              	
                Global
                  Note

              	
                4

              
	 	
                SECTION
                  2.5

              	
                Payment
                  of Principal and Interest

              	
                5

              
	
                ARTICLE
                  III

              	
                REDEMPTION
                  OF THE NOTES

              	
                6

              
	 	
                SECTION
                  3.1

              	
                Redemption
                  at the Company’s Option; Defeasance

              	
                6

              
	 	
                SECTION
                  3.2

              	
                No
                  Sinking Fund

              	
                7

              
	 	
                SECTION
                  3.3

              	
                Defeasance

              	
                7

              
	
                ARTICLE
                  IV

              	
                MISCELLANEOUS

              	
                7

              
	 	
                SECTION
                  4.1

              	
                Ratification
                  of Indenture

              	
                8

              
	 	
                SECTION
                  4.2

              	
                Trustee
                  Not Responsible for Recitals

              	
                8

              
	 	
                SECTION
                  4.3

              	
                Governing
                  Law

              	
                8

              
	 	
                SECTION
                  4.4

              	
                Separability

              	
                8

              
	 	
                SECTION
                  4.5

              	
                Counterparts

              	
                8

              
	 	
                SECTION
                  4.6

              	
                Amendments

              	
                8

              
	 	 	 	 
	
                EXHIBITS
                  A-1 thru A-2

              	
                Forms
                  of Note

              	 
	 	 	 	 

      

      

      

      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

      FOURTH
        SUPPLEMENTAL INDENTURE, dated as of November 21, 2005 (the “Fourth 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”, and together with Indiana Gas and SIGECO, the “Initial
        Guarantors”) and U.S. Bank National Association (the “Trustee”).

      

      WHEREAS,
        the Company and the Initial Guarantors 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 (as
        hereinafter defined), to be issued from time to time in one or more series,
        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 two new series of Securities to be known as its 5.45%
        Senior Notes due December 1, 2015 (the “2015 Notes”) and its 6.10% Senior Notes
        due December 1, 2035 (the “2035 Notes”, and together, the “Notes”) and the
        unconditional guarantees by the Guarantors (as defined herein) 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
        Fourth
        Supplemental Indenture (together, the “Indenture”);

      

      WHEREAS,
        the Company and the Initial Guarantors requested that the Trustee execute
        and
        deliver this Fourth Supplemental Indenture and all requirements necessary
        to
        make this Fourth 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 Guarantors, as applicable, have been
        made:

      

      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 Initial
        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 Fourth
        Supplemental Indenture;

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

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

      

      (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.

      

      “Guarantors”
        shall have the meaning specified in Section 2.1.

      

      “Interest
        Payment Date” means June 1 and December 1 of each year, beginning June 1,
        2006.

      

      “Maturity
        Date” shall have the meaning specified in Section 2.2.

      

      “Original
        Issue Date” means November 21, 2005.

      

      “Redemption
        Price” shall have the meaning specified in Section 3.1.

      

      “Regular
        Record Date” means, with respect to any Interest Payment Date for the Notes, the
        close of business on the fifteenth day of the month immediately preceding
        the
        month in which such Interest Payment Date falls.

      

      The
        following terms shall have the respective meanings set forth in the recitals
        to
        this Fourth Supplemental Indenture:

      

      “Base
        Indenture”

      “Company”

      “Guarantees”

      “Indenture”

      “Indiana
        Gas”

      “Initial
        Guarantors”

      “Fourth
        Supplemental Indenture”

      “Securities”

      “SIGECO”

      “Trustee”

      “VEDO”

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      ARTICLE
        II

      

      GENERAL
        TERMS AND CONDITIONS OF THE NOTES

      

      SECTION
        2.1. Designation
        and Principal Amount; Guarantees.

      

      There
        is
        hereby authorized two series of Securities designated the 5.45% Senior Notes
        due
        December 1, 2015 limited (except as otherwise provided in Article 2 of the
        Base
        Indenture) in aggregate principal amount to $75,000,000, and the 6.10% Senior
        Notes due December 1, 2035 limited (except as otherwise provided in Article
        2 of
        the Base Indenture) in aggregate principal amount to $75,000,000. 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 the Initial Guarantors (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 Guarantees are 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 2015 Notes shall become due and payable at
        final
        maturity is December 1, 2015 (the “2015 Maturity Date”) if not redeemed in full
        previously in accordance with Article III of this Fourth Supplemental Indenture.
        The date upon which the principal on the 2035 Notes shall become due and
        payable
        at final maturity is December 1, 2035 (the “2035 Maturity Date”, and the 2015
        Maturity Date and the 2035 Maturity Date may sometimes hereinafter be referred
        to in the alternative as the “Maturity Date”) if not redeemed in full previously
        in accordance with Article III of this Fourth Supplemental
        Indenture.

      

      SECTION
        2.3. Form
        and Payment.

      

      The
        Notes
        shall be issued in fully registered certificated form without interest coupons,
        bearing identical terms (except as otherwise provided in Article 2 of the
        Base
        Indenture). Principal of, and interest on, and any Redemption Price with
        respect
        to, the Notes will be payable, the transfer of such Notes will be registrable
        and such Notes will be exchangeable for Notes bearing identical terms 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 

        
          
             

          

          
            3

            
              

            

          

          
             

          

        

        Corporate
          Trust Office of the Trustee at 100 Wall Street, Suite 2000, New York, New
          York
          10005, Attention: Richard Prokosch.

         

      

      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 $1,000 and integral multiples of $1,000
        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 Exhibits
        A-1
        and
A-2
        hereto.

      

      SECTION
        2.4. Global
        Note.

      

      (a) Unless
        and until it is exchanged for Notes of the same series in registered
        certificated form, a global Note in principal amount equal to the aggregate
        principal amount of the 2015 Notes and a global Note in principal amount
        equal
        to the aggregate principal amount of the 2035 Notes (each a “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.

      

      (b) If
        at any
        time (i) 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
        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 2 of the Base Indenture, the Trustee,
        upon
        written notice from the Company, will authenticate and deliver Notes of the
        same
        series, 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.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      SECTION
        2.5. Payment
        of Principal and Interest.

      

      The
        2015
        Notes shall bear interest at the per annum rate of 5.45%. The 2035 Notes
        shall
        bear interest at the per annum rate of 6.10%.
        The
        following terms apply to the Notes:

      

      Interest
        shall be paid semi-annually in arrears on each Interest Payment Date commencing
        on June 1, 2006. 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 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 particular series of 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.

      

      Payment
        of the principal of, and any premium or interest on, the Notes due on the
        applicable Maturity Date or date of earlier redemption, as the case may be,
        shall be made in immediately available funds, 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. Notwithstanding the foregoing, payment
        of
        interest due on any Interest Payment 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.

      

      Any
        payments on the Notes will be made 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.

      

      In
        the
        event that any Interest Payment Date or the applicable Maturity Date or date
        of
        earlier redemption falls on a day that is not a Business Day, the required
        payment of principal, premium and/or interest payable on such date shall
        be made
        on the next succeeding Business Day with the 

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      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 applicable 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.

      

      Each
        series of Notes shall be subject to redemption at the option of the Company,
        in
        whole or in part, without premium or penalty, at any time, at a redemption
        price
        (the “Redemption Price”) equal to the greater of (1) 100% of the principal
        amount of the Notes to be redeemed and (2) the sum of the present values
        of the
        remaining scheduled payments of principal and interest (excluding interest
        accrued to the date of redemption) on the Notes to be redeemed discounted
        to the
        redemption date semi-annually (assuming a 360-day year consisting of twelve
        30-day months) at the Treasury Rate (as defined below) plus 20 basis points
        for
        the 2015 Notes and 25 basis points for the 2035 Notes, plus, in either case,
        any
        unpaid interest accrued on such Notes to the date of redemption.

       

      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.

       

      For
        purposes of this Section:

      

      “Treasury
        Rate” means, with respect to any redemption date applicable to a Note, the rate
        per annum equal to the semi-annual equivalent yield to maturity of the
        Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
        (expressed as a percentage of its principal amount) equal to the Comparable
        Treasury Price for such redemption date.

      

      “Comparable
        Treasury Issue” means the United States Treasury security selected by an
        Independent Investment Banker as having a maturity comparable to the remaining
        term of the Notes to be redeemed that would be used, at the time of selection
        and in accordance with customary financial practice, in pricing new issues
        of
        corporate debt securities of comparable maturity to the remaining term of
        the
        Notes to be redeemed.

      

      “Independent
        Investment Banker” means one of the Reference Treasury Dealers appointed by the
        Trustee after consultation with the Company and the Guarantors.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      “Comparable
        Treasury Price” means, with respect to any redemption date applicable to a Note,
        (1) if the Trustee obtains at least five Reference Treasury Dealer Quotations,
        the average of the three remaining Reference Treasury Dealer Quotations after
        excluding the highest and lowest Reference Treasury Dealer Quotations obtained,
        or (2) if the Trustee obtains fewer than five such Reference Treasury Dealer
        Quotations, the average of all Reference Treasury Dealer Quotations
        obtained.

      

      “Reference
        Treasury Dealer Quotations” means, with respect to each Reference Treasury
        Dealer and any redemption date applicable to a Note, the average, as determined
        by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
        (expressed in each case as a percentage of its principal amount) quoted in
        writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New
        York
        City time, on the third Business Day preceding such redemption
        date.

      

      “Reference
        Treasury Dealer” means each of LaSalle Financial Services, Inc., Wachovia
        Capital Markets, LLC, Fifth Third Securities, Inc. Wedbush Morgan Securities
        Inc., Banc of America Securities LLC, BNY Capital Markets, Inc., Morgan Keegan
        & Company, Inc., NatCity Investments, Inc., Piper Jaffray & Co., and
        their respective successors; provided, however, that if any of the foregoing
        shall cease to be a primary U.S. Government securities dealer in New York
        City
        (a “Primary Treasury Dealer”), such former dealer shall be replaced with another
        Primary Treasury Dealer.

      

      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.

      

      Article
        8
        of the Base Indenture describing Defeasance and Covenant Defeasance shall
        apply
        to the Notes.

      

      ARTICLE
        IV

      

      MISCELLANEOUS

      

      SECTION
        4.1. Ratification
        of Indenture.

      

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

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      

      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 Fourth
        Supplemental Indenture.

      

      SECTION
        4.3. Governing
        Law.

      

      This
        Fourth Supplemental Indenture and each Note issued hereunder shall be deemed
        to
        be contracts 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 Fourth 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 Fourth Supplemental Indenture or of the Notes, but this Fourth
        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
        Fourth 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 prior to or subsequent to the date
        hereof.

      

      [signature
        page follows]

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the parties hereto have caused this Fourth 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:

              	 
	 	 	
                Name:

              	
                Jerome
                  A. Benkert, Jr.

              
	 	 	
                Title:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	 	 	 	 
	
                Attest:

              	 	 
	 	 	 	 
	
                By:

              	 	 	 
	
                Name:

              	
                Ronald
                  E. Christian

              	 	 
	
                Title:

              	
                Executive
                  Vice President and Secretary

              	 	 
	 	 	 	 
	 	 	
                INDIANA
                  GAS COMPANY, INC.

              
	 	 	
                as
                  Initial Guarantor

              
	 	 	 	 
	 	 	
                By:

              	 
	 	 	
                Name:

              	
                Jerome
                  A. Benkert, Jr.

              
	 	 	
                Title:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	
                Attest:

              	 	 
	 	 	 	 
	
                By:

              	 	 	 
	
                Name:

              	
                Ronald
                  E. Christian

              	 	 
	
                Title:

              	
                Executive
                  Vice President and Secretary

              	 	 
	 	 	 	 
	 	 	
                SOUTHERN
                  INDIANA GAS AND ELECTRIC COMPANY

              
	 	 	
                as
                  Initial Guarantor

              
	 	 	 	 
	 	 	
                By:

              	 
	 	 	
                Name:

              	
                Jerome
                  A. Benkert, Jr.

              
	 	 	
                Title:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	 	 	 	 
	
                Attest:

              	 	 	 
	 	 	 	 
	
                By:

              	 	 	 
	
                Name:

              	
                Ronald
                  E. Christian

              	 	 
	
                Title:

              	
                Executive
                  Vice President and Secretary

              	 	 

      

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

      
        	 	 	
                VECTREN
                  ENERGY DELIVERY OF OHIO, INC.,

              
	 	 	
                as
                  Initial Guarantor

              
	 	 	 	 
	 	 	
                By:

              	 
	 	 	
                Name:

              	
                Jerome
                  A. Benkert, Jr.

              
	 	 	
                Title:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	
                Attest:

              	 	 	 
	 	 	 	 
	
                By:

              	 	 	 
	
                Name:

              	
                Ronald
                  E. Christian

              	 	 
	
                Title:

              	
                Executive
                  Vice President and Secretary

              	 	 
	 	 	 	 
	 	 	
                U.S.
                  BANK NATIONAL ASSOCIATION,

              
	 	 	
                as
                  Trustee

              
	 	 	 	 
	 	 	
                By:

              	 
	 	 	
                Name:

              	 
	 	 	
                Title:

              	 
	
                Attest:

              	 	 	 
	 	 	 	 
	
                By:

              	 	 	 
	
                Name:

              	 	 	 
	
                Title:

              	 	 	 

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      Exhibit
        A-1

      

      [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.

      5.45%
        SENIOR NOTE DUE DECEMBER 1, 2015

      

      
        	
                RATE
                  OF INTEREST

              	
                STATED
                  MATURITY DATE

              	
                ORIGINAL
                  ISSUE DATE

              
	
                5.45%

              	
                December
                  1, 2015

              	
                November
                  21, 2005

              

      

      

      
        	
                Registered
                  No. 1............................................................

              	
                CUSIP
                  No. 92239M AF 8

              

      

      

      

      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 $75,000,000 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 semi-annually in arrears
        on
        June 1 and December 1 of each year, commencing on June 1, 2006 (an “Interest
        Payment Date”), and on any earlier date of redemption, as the case may
        be.

      

      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
        

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      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 any earlier date
        of
        redemption, as the case may be, will be the amount of interest accrued during
        the applicable Interest Period (as defined below) computed on the basis of
        a
        360-day year of twelve 30-day months.

      

      An
        “Interest Period” is each period 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 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, premium and/or 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, a
        Sunday, or other day on which commercial banks are authorized or required
        by
        law, regulation or executive order to close in The City of New
        York.

      

      Payment
        of the principal of, and any premium or interest on, this Note due on the
        Maturity Date shall be made in immediately available funds, 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. Notwithstanding the foregoing, payment
        of interest due on this Note on any Interest Payment 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.

      

      Any
        payments on this Note will be made 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.

      

      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.

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

      

      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:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	
                Title:

              	
                Executive
                  Vice President and Secretary

              
	 	 	 

      

      

      

      

      

      
        	
                DATED:
                  November 21, 2005

              	 
	 	 
	
                TRUSTEE’S
                  CERTIFICATE OF AUTHENTICATION

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

              	 
	 	 
	
                U.S.
                  BANK NATIONAL ASSOCIATION,

              	 
	
                As
                  Trustee

              	 
	
                By:
                  

              	 	 
	 	
                Authorized
                  Signatory

              	 

      

      

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      [Form
        of
        Reverse of Note]

       

      VECTREN
        UTILITY HOLDINGS, INC.

      5.45%
        SENIOR NOTE DUE DECEMBER 1, 2015

       

      This
        Note
        is one of a duly authorized series of Securities (as defined below) of the
        Company (which term includes any successor corporation under the Indenture
        )
        designated as its “5.45%
        Senior
        Notes due December 1,
        2015”
(the
        “Notes”), issued or to be issued pursuant to an Indenture, dated as of October
        19, 2001, as amended by the Fourth Supplemental Indenture dated November
        21,
        2005 (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 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, premium, if any, 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 that is limited in aggregate principal amount to $75,000,000, subject
        to the reopening provisions of the Indenture. The Indenture provides that
        the
        debt securities of the Company issuable or issued thereunder (the “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 such series.

      

      This
        Note
        is subject to redemption upon not less than 30 nor more than 60 days’ prior
        written notice to the Holder hereof, at any time, in whole or in part, at
        the
        election of the Company at a redemption price (the “Redemption Price”) equal to
        the greater of (1) 100% of the principal amount hereof to be redeemed, and
        (2)
        the sum of the present values of the remaining scheduled payments of principal
        and interest (excluding interest accrued to the date of redemption) on this
        Note
        discounted to the redemption date semi-annually (assuming a 360-day year
        consisting of twelve 30-day months) at the Treasury Rate (as defined below)
        plus
        20 basis points, plus any unpaid interest accrued to the date of
        redemption.

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      “Treasury
        Rate” means, with respect to any redemption date, the rate per annum equal to
        the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
        assuming a price for the Comparable Treasury Issue (expressed as a percentage
        of
        its principal amount) equal to the Comparable Treasury Price for such redemption
        date.

      

      “Comparable
        Treasury Issue” means the United States Treasury security selected by an
        Independent Investment Banker as having a maturity comparable to the remaining
        term of this Note that would be used, at the time of selection and in accordance
        with customary financial practice, in pricing new issues of corporate debt
        securities of comparable maturity to the remaining term of this
        Note.

      

      “Independent
        Investment Banker” means one of the Reference Treasury Dealers appointed by the
        Trustee after consultation with the Company and the Guarantors.

      

      “Comparable
        Treasury Price” means, with respect to any redemption date applicable to a Note,
        (1) if the Trustee obtains at least five Reference Treasury Dealer Quotations,
        the average of the three remaining Reference Treasury Dealer Quotations after
        excluding the highest and lowest Reference Treasury Dealer Quotations obtained,
        or (2) if the Trustee obtains fewer than five such Reference Treasury Dealer
        Quotations, the average of all Reference Treasury Dealer Quotations
        obtained.

      

      “Reference
        Treasury Dealer Quotations” means, with respect to each Reference Treasury
        Dealer and any redemption date, the average, as determined by the Trustee,
        of
        the bid and asked prices for the Comparable Treasury Issue (expressed in
        each
        case as a percentage of its principal amount) quoted in writing to the Trustee
        by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the
        third
        Business Day preceding such redemption date.

      

      “Reference
        Treasury Dealer” means each of LaSalle Financial Services, Inc., Wachovia
        Capital Markets, LLC, Fifth Third Securities, Inc. Wedbush Morgan Securities
        Inc., Banc of America Securities LLC, BNY Capital Markets, Inc., Morgan Keegan
        & Company, Inc., NatCity Investments, Inc., Piper Jaffray & Co., and
        their respective successors; provided, however, that if any of the foregoing,
        shall cease to be a primary U.S. Government securities dealer in New York
        City
        (a “Primary Treasury Dealer”), such former dealer shall be replaced with another
        Primary Treasury Dealer.

      

      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 

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      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 premium, if any, 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
        $1,000
        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.

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

      

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

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      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 of a commercial bank or trust company.
                  

              

      

      

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      [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 (as
        defined below) 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, 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, and any Redemption Price with respect to, the Note, each Guarantor
        hereby agrees 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 

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

      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, the related Guarantees
        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 Notes 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.

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

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

      

      

      
        	 	 	 
	 	
                By:

              	 
	 	
                Name:

              	
                Jerome
                  A. Benkert, Jr.

              
	 	
                Title:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	
                Name:

              	
                Ronald
                  E. Christian

              
	 	
                Title:

              	
                Executive
                  Vice President and Secretary

              
	 	 	 
	 	 	 
	
                DATED:
                  November 21, 2005

              	 	 

      

      

      

      

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      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:

              	
                Jerome
                  A. Benkert, Jr.

              
	 	
                Title:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	
                Name:

              	
                Ronald
                  E. Christian

              
	 	
                Title:

              	
                Executive
                  Vice President and Secretary

              
	 	 	 
	 	 	 
	
                DATED:
                  November 21, 2005

              	 	 

      

      

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

      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:

              	
                Jerome
                  A. Benkert, Jr.

              
	 	
                Title:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	
                Name:

              	
                Ronald
                  E. Christian

              
	 	
                Title:

              	
                Executive
                  Vice President and Secretary

              
	 	 	 
	 	 	 
	
                DATED:
                  November 21, 2005

              	 	 

      

      

      

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

      

      Exhibit
        A-2

      

      [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.

      6.10%
        SENIOR NOTE DUE DECEMBER 1, 2035

      

      
        	
                RATE
                  OF INTEREST

              	
                STATED
                  MATURITY DATE

              	
                ORIGINAL
                  ISSUE DATE

              
	
                6.10%

              	
                December
                  1, 2035

              	
                November
                  21, 2005

              

      

      

      
        	
                Registered
                  No. 1

              	
                CUSIP
                  No. 92239M AG 6

              

      

      

      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 $75,000,000 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 semi-annually in arrears
        on
        June 1 and December 1 of each year, commencing on June 1, 2006 (an “Interest
        Payment Date”), and on any earlier date of redemption, as the case may
        be.

      

      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
        

      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

      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 any earlier date
        of
        redemption, as the case may be, will be the amount of interest accrued during
        the applicable Interest Period (as defined below) computed on the basis of
        a
        360-day year of twelve 30-day months. 

      

      An
        “Interest Period” is each period 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 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, premium and/or 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, a
        Sunday, or other day on which commercial banks are authorized or required
        by
        law, regulation or executive order to close in The City of New
        York.

      

      Payment
        of the principal of, and any premium or interest on, this Note due on the
        Maturity Date shall be made in immediately available funds, 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. Notwithstanding the foregoing, 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.

      

      Any
        payments on this Note will be made 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.

      

      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.

      
        
          
          

        

        
          25

          
            

          

        

        
          
          

        

      

      

      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:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	
                Title:

              	
                Executive
                  Vice President and Secretary

              
	 	 	 

      

      

      

      

      

      
        	
                DATED:
                  November 21, 2005

              	 
	 	 
	
                TRUSTEE’S
                  CERTIFICATE OF AUTHENTICATION

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

              	 
	 	 
	
                U.S.
                  BANK NATIONAL ASSOCIATION,

              	 
	
                As
                  Trustee

              	 
	
                By:
                  

              	 	 
	 	
                Authorized
                  Signatory

              	 

      

       

      
        
          
          

        

        
          26

          
            

          

        

        
          
          

        

      

      

      [Form
        of
        Reverse of Note]

       

      VECTREN
        UTILITY HOLDINGS, INC.

      6.10%
        SENIOR NOTE DUE DECEMBER 1, 2035

       

      This
        Note
        is one of a duly authorized series of Securities (as defined below) of the
        Company (which term includes any successor corporation under the Indenture
        )
        designated as its “6.10%
        Senior
        Notes due December 1, 2035”
(the
        “Notes”), issued or to be issued pursuant to an Indenture, dated as of October
        19, 2001, as amended by the Fourth Supplemental Indenture dated November
        21,
        2005 (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 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, premium, if any, 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 that is limited in aggregate principal amount to $75,000,000,
        subject
        to the reopening provisions of the Indenture. The Indenture provides that
        the
        debt securities of the Company issuable or issued thereunder (the “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 such series.

      

      This
        Note
        is subject to redemption upon not less than 30 nor more than 60 days’ prior
        written notice to the Holder hereof, at any time, in whole or in part, at
        the
        election of the Company at a redemption price (the “Redemption Price”) equal to
        the greater of (1) 100% of the principal amount hereof to be redeemed, and
        (2)
        the sum of the present values of the remaining scheduled payments of principal
        and interest (excluding interest accrued to the date of redemption) on this
        Note
        discounted to the redemption date semi-annually (assuming a 360-day year
        consisting of twelve 30-day months) at the Treasury Rate (as defined below)
        plus
        25 basis points, plus any unpaid interest accrued to the date of
        redemption.

      
        
          
          

        

        
          27

          
            

          

        

        
          
          

        

      

      “Treasury
        Rate” means, with respect to any redemption date, the rate per annum equal to
        the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
        assuming a price for the Comparable Treasury Issue (expressed as a percentage
        of
        its principal amount) equal to the Comparable Treasury Price for such redemption
        date.

      

      “Comparable
        Treasury Issue” means the United States Treasury security selected by an
        Independent Investment Banker as having a maturity comparable to the remaining
        term of this Note that would be used, at the time of selection and in accordance
        with customary financial practice, in pricing new issues of corporate debt
        securities of comparable maturity to the remaining term of this
        Note.

      

      “Independent
        Investment Banker” means one of the Reference Treasury Dealers appointed by the
        Trustee after consultation with the Company and the Guarantors.

      

      “Comparable
        Treasury Price” means, with respect to any redemption date applicable to a Note,
        (1) if the Trustee obtains at least five Reference Treasury Dealer Quotations,
        the average of the three remaining Reference Treasury Dealer Quotations after
        excluding the highest and lowest Reference Treasury Dealer Quotations obtained,
        or (2) if the Trustee obtains fewer than five such Reference Treasury Dealer
        Quotations, the average of all Reference Treasury Dealer Quotations
        obtained.

      

      “Reference
        Treasury Dealer Quotations” means, with respect to each Reference Treasury
        Dealer and any redemption date, the average, as determined by the Trustee,
        of
        the bid and asked prices for the Comparable Treasury Issue (expressed in
        each
        case as a percentage of its principal amount) quoted in writing to the Trustee
        by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the
        third
        Business Day preceding such redemption date.

      

      “Reference
        Treasury Dealer” means each of LaSalle Financial Services, Inc., Wachovia
        Capital Markets, LLC, Fifth Third Securities, Inc. Wedbush Morgan Securities
        Inc., Banc of America Securities LLC, BNY Capital Markets, Inc., Morgan Keegan
        & Company, Inc., NatCity Investments, Inc., Piper Jaffray & Co., and
        their respective successors; provided, however, that if any of the foregoing,
        shall cease to be a primary U.S. Government securities dealer in New York
        City
        (a “Primary Treasury Dealer”), such former dealer shall be replaced with another
        Primary Treasury Dealer.

      

      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 

      
        
          
          

        

        
          28

          
            

          

        

        
          
          

        

      

      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 premium, if any, 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
        $1,000
        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.

      
        
          
          

        

        
          29

          
            

          

        

        
          
          

        

      

      

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

      
        
          
          

        

        
          30

          
            

          

        

        
          
          

        

      

      ASSIGNMENT
        FORM

      

      
        	
                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 of a commercial bank or trust company.
                  

              

      

      

      
        
          
          

        

        
          31

          
            

          

        

        
          
          

        

      

      [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 (as
        defined below) 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, 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, and any Redemption Price with respect to, the Note, each Guarantor
        hereby agrees 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 

      
        
          
          

        

        
          32

          
            

          

        

        
          
          

        

      

      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, the related Guarantees
        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 Notes 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.

      
        
          
          

        

        
          33

          
            

          

        

        
          
          

        

      

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

      

      

      
        	 	 	 
	 	
                By:

              	 
	 	
                Name:

              	
                Jerome
                  A. Benkert, Jr.

              
	 	
                Title:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	
                Name:

              	
                Ronald
                  E. Christian

              
	 	
                Title:

              	
                Executive
                  Vice President and Secretary

              
	 	 	 
	 	 	 
	
                DATED:
                  November 21, 2005

              	 	 

      

      

      
        
          
          

        

        
          34

          
            

          

        

        
          
          

        

      

      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:

              	
                Jerome
                  A. Benkert, Jr.

              
	 	
                Title:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	
                Name:

              	
                Ronald
                  E. Christian

              
	 	
                Title:

              	
                Executive
                  Vice President and Secretary

              
	 	 	 
	 	 	 
	
                DATED:
                  November 21, 2005

              	 	 

      

      

      
        
          
          

        

        
          35

          
            

          

        

        
          
          

        

      

      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:

              	
                Jerome
                  A. Benkert, Jr.

              
	 	
                Title:

              	
                Executive
                  Vice President and Chief Financial Officer

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	
                Name:

              	
                Ronald
                  E. Christian

              
	 	
                Title:

              	
                Executive
                  Vice President and Secretary

              
	 	 	 
	 	 	 
	
                DATED:
                  November 21, 2005

              	 	 

      

       

       

      36

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