INDIANA GAS CO INC (Form: 8-K, Received: 12/27/2000 16:26:40)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 21, 2000

INDIANA GAS COMPANY, INC.

(Exact Name of Registrant as Specified in Its Charter)

INDIANA

(State or Other Jurisdiction of Incorporation)

1-6494 35-0793669
(Commission File Number) (IRS Employer Identification No.)

20 N.W. Fourth Street
Evansville, Indiana 47741
(Address of Principal Executive Offices)(Zip Code)

Registrant's Telephone Number, Including Area Code: (812) 465-5300

Item 5. Other Events.

Indiana Gas Company, Inc. hereby files a Purchase Agreement, dated December 21, 2000, and a form of Fifth Supplemental Indenture to the Indenture dated as of February 1, 1991, attached hereto as Exhibits 1 and 4 and incorporated herein by reference, in connection with the Indiana Gas Company, Inc. issuance of $20,000,000 aggregate principal amount of 7.15% Insured Quarterly Notes (the "15-Year IQ Notes") and $50,000,000 aggregate principal amount of 7.45% Insured Quarterly Notes (the "30-Year IQ Notes").

Item 7. Financial Statements and Exhibits.

The following exhibits are filed as part of this report:

Exhibit 1 - Purchase Agreement, dated December 21, 2000, between Indiana Gas Company, Inc. and Edward D. Jones & Co., L.P.

Exhibit 4 - Form of Fifth Supplemental Indenture to the Indenture dated as of February 1, 1991, between Indiana Gas Company, Inc. and U.S. Bank Trust National Association with respect to the issuance of the 15-Year IQ Notes and the 30-Year IQ Notes.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

INDIANA GAS COMPANY, INC.
(Registrant)

Dated: December 27, 2000                 By:/s/ M. Susan Hardwick
                                            ----------------------------------
                                            M. Susan Hardwick
                                            Vice President and Controller

INDIANA GAS COMPANY, INC.

$ 70,000,000

7.15% Senior Insured Quarterly Notes due December 15, 2015 (the "2015 Notes")

7.45% Senior Insured Quarterly Notes due December 16, 2030 (the "2030 Notes")

PURCHASE AGREEMENT

December 21, 2000

EDWARD D. JONES & CO., L.P.
12555 Manchester Road
St. Louis, Missouri 63131

Ladies and Gentlemen:

Indiana Gas Company, Inc., a corporation incorporated in Indiana and Ohio (the "Company"), confirms its agreement with Edward D. Jones & Co., L.P. (the "Underwriter"), with respect to the issue and sale by the Company and the purchase by the Underwriter of $20,000,000 aggregate principal amount of the 2015 Notes and $50,000,000 aggregate principal amount of the 2030 Notes (collectively, the "Securities"). The Securities are to be issued pursuant to an indenture, dated as of February 1, 1991, between the Company and U.S. Bank Trust National Association (formerly known as First Trust National Association, which was formerly known as Bank of America Illinois, which was formerly known as Continental Bank, National Association), as Trustee (the "Trustee"), as amended by the second and the fifth supplemental indentures thereto (collectively, the "Indenture").

The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (No. 333-82111) for the registration of the offer and sale of certain debt securities, including the Securities, under the Securities Act of 1933, as amended (the "1933 Act"), from time to time in accordance with Rule 415 of the rules and regulations of the Commission under the 1933 Act (the "1933 Act Regulations"), and the Company has filed such post-effective amendments thereto as may be required prior to the date hereof. Such registration statement (as amended, if applicable) has been declared effective by the Commission, and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus supplement reflecting the terms of the Securities, the terms of the offering thereof and the other matters set forth therein, pursuant to Rule 424(b) under the 1933 Act Regulations. The final prospectus and the final prospectus supplement relating to the Securities, in the forms first furnished to the Underwriter by the Company for use in connection with the Securities, are collectively referred to herein as the "Prospectus", and such registration statement, in the form in which it became effective, is herein called the "Registration Statement"; provided, however, that all references to the "Registration Statement" and the "Prospectus" shall also be deemed to include documents incorporated therein by reference pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), prior to the date of this Agreement. A "preliminary prospectus" shall be deemed to refer to any prospectus that omitted information to be included upon pricing in a form of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations and that was used after such effectiveness and prior to the initial delivery of the Prospectus to the Underwriter by the Company.

All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" (or other references of like import) in the Registration Statement, Prospectus or preliminary prospectus shall include all such financial statements and schedules and other information which is incorporated by reference in the Registration Statement, Prospectus or preliminary prospectus, as the case may be, prior to the date of this Agreement; and all references in this Agreement to amendments or supplements to the Registration Statement, Prospectus or preliminary prospectus shall include the filing of any document under the 1934 Act which is incorporated by reference in the Registration Statement, Prospectus or preliminary prospectus, as the case may be, after the date of this Agreement.

SECTION 1. Representations and Warranties.

(a) Representations and Warranties by the Company. The Company represents and warrants to the Underwriter as of the date hereof and as of the Closing Time (as defined in Section 2(b)), and agrees with the Underwriter, as follows:

(i) Compliance with Registration Requirements. The requirements for use of Form S-3 under the 1933 Act have been satisfied. The Registration Statement has become effective under the 1933 Act and no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or threatened by the Commission.

(ii) Registration Statement and Prospectus. At the respective times the Registration Statement and any post-effective amendments thereto (including the filing of the Company's most recent Annual Report on Form 10-K with the Commission) became effective, at the date hereof and at the Closing Time, the Registration Statement and any amendments thereto complied, comply and will comply in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and regulations of the Commission under the 1939 Act and did not, do not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. At the date of the Prospectus and at the Closing Time, neither the Prospectus nor any amendment or supplement thereto included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, the representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by the Underwriter expressly for use in the Prospectus.

Each preliminary prospectus and prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all material respects with the 1933 Act Regulations and each preliminary prospectus and the Prospectus delivered to the Underwriter for use in connection with the offering of Securities will, at the time of such delivery, be identical to any electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(iii) Incorporated Documents. The documents incorporated by reference in the Registration Statement or the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement or the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of the Commission thereunder and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(iv) Financial Statements. The financial statements included in the Registration Statement and the Prospectus, together with the related schedules and notes, present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and the statement of operations, stockholders' equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in the Registration Statement present fairly in accordance with GAAP the information required to be stated therein. The selected financial data and the summary financial information included in the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement.

(v) No Material Adverse Changes. Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any change in the capital stock or long-term debt of the Company (other than any changes in long-term debt resulting from the issuance of Securities pursuant to this Agreement) or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries considered as one enterprise, otherwise than as set forth or contemplated in the Prospectus.

(vi) Due Incorporation and Good Standing. The Company has been duly incorporated and is validly existing as a corporation under the laws of the jurisdictions of its incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus and to enter into and consummate the transactions contemplated under this Agreement and the Indenture.

(vii) Capitalization. The Company has an authorized capitalization as set forth in the Prospectus. The shares of issued and outstanding capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. None of the outstanding shares of capital stock of the Company were issued in violation of the preemptive or other similar rights of any securityholder of the Company.

(viii) Authorization and Validity of Securities. The Securities have been duly authorized, and, when issued and delivered pursuant to this Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles and will be entitled to the benefits provided by the Indenture. The Indenture has been duly authorized, executed and delivered by the Company and duly qualified under the 1939 Act and constitutes a valid and legally binding agreement of the Company, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. The Indenture and the Securities conform in all material respects to the descriptions thereof contained in the Prospectus.

(ix) Authorization of Agreement. This Agreement has been duly authorized, executed and delivered by the Company.

(x) Accuracy of Descriptions. The statements set forth in the Prospectus under the captions "Description of the Debt Securities" and "Description of the IQ Notes", insofar as they purport to constitute a summary of the terms of the Securities, and under the captions "Plan of Distribution" and "Underwriting", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair.

(xi) Absence of Defaults. Neither the Company nor any of its subsidiaries is in violation of its Articles of Incorporation, as amended, or By-Laws or in default in the performance or observance of any material obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan or credit agreement, lease or other agreement or instrument to which it is a party or by which it or any of its property or assets may be bound.

(xii) Non-Contravention. The issue and sale of the Securities by the Company and the compliance by the Company with all of the provisions of the Securities, the Indenture and this Agreement and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any contract, indenture, mortgage, deed of trust, loan or credit agreement, note or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, nor will such action result in any violation of the provisions of the Articles of Incorporation, as amended, or By-Laws of the Company or any of its subsidiaries or any of the provisions of any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of the property or assets of the Company or any of its subsidiaries. No consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement or the Indenture, except such as have been already obtained or as may be required under the 1933 Act or the 1939 Act or state securities laws.

(xiii) Absence of Proceedings. Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any of the property or assets of the Company or any of its subsidiaries is subject, which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a material adverse effect on the current or future consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries considered as one enterprise, and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others.

(xiv) Investment Company Act. The Company is not, and after giving effect to the issue and sale of the Securities will not be, an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act of 1940, as amended (the "1940 Act").

(xv) Compliance with Registration Amount. The aggregate amount of Securities issued and sold by the Company hereunder and any other debt securities of the Company issued and sold pursuant to the Registration Statement will not exceed the amount of debt securities registered under the Registration Statement.

(xvi) Independent Accountants. Arthur Andersen LLP, who have certified certain consolidated financial statements of the Company and its subsidiaries, are independent public accountants as required by the 1933 Act and the 1933 Act Regulations.

(xvii) Indiana Commission Order. The order of the Indiana Utility Regulatory Commission (the "Indiana Commission"), dated December 29, 1998, authorizing the Company, among other things, to issue up to $100,000,000 of debt securities, including the Securities (the "Indiana Commission Order"), is in full force and effect and is not the subject of any appeal or other proceeding.

(xviii) Ohio Commission Order. The order of the Public Utilities Commission of Ohio (the "Ohio Commission"), dated November 21, 2000, authorizing the Company, among other things, to issue up to $70,000,000 of debt securities, including the Securities (the "Ohio Commission Order"), is in full force and effect and is not the subject of any appeal or other proceeding.

(xix) Insurance Policy. The Company has duly authorized all necessary action to be taken by it for the procurement of an irrevocable financial guarantee insurance policy for the Securities (the "Insurance Policy") issued by Ambac Assurance Corporation (the "Insurer"), insuring the payment of principal of and interest on the Securities, when due, and mandatory redemption payments for interests in the Securities at the option of representatives of deceased owners thereof.

(b) Officer's Certificates. Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Underwriter or to counsel for the Underwriter shall be deemed a representation and warranty by the Company to the Underwriter as to the matters covered thereby.

SECTION 2. Sale and Delivery to Underwriter; Closing.

(a) Securities. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees to purchase from the Company, $20,000,000 aggregate principal amount of the 2015 Notes at 97.60% of the principal amount thereof and $50,000,000 aggregate principal amount of the 2030 Notes at 96.85% of the principal amount thereof. Each series of Securities will have the terms specified in Schedule A hereto.

(b) Payment. Payment of the purchase price for, and delivery of certificates for, the Securities shall be made at the offices of Brown & Wood LLP, One World Trade Center, New York, New York, 10048-0557, or at such other place as shall be agreed upon by the Underwriter and the Company, at 9:00 A.M. (Eastern time) on December 28, 2000, or such other time not later than ten business days after such date as shall be agreed upon by the Underwriter and the Company (such time and date of payment and delivery being herein called the "Closing Time").

Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company, against delivery to the Underwriter for its account of global certificates for the Securities being purchased by the Underwriter.

(c) Denominations; Registration. Global certificates for the Securities shall be in such denominations ($1,000 or integral multiples thereof) and registered in such names as the Underwriter may request in writing at least one full business day before the Closing Time. The Securities will be made available for examination and, if applicable, packaging by the Underwriter in The City of New York not later than 10:00 A.M. (Eastern time) on the business day prior to the Closing Time.

SECTION 3. Covenants of the Company. The Company covenants with the Underwriter as follows:

(a) Filing and Delivery of Prospectus Supplement. Immediately following the execution of this Agreement, the Company will prepare a prospectus supplement, in form approved by the Underwriter, setting forth the principal amount of Securities and their terms not otherwise specified in the base prospectus, the Underwriter's name, the price at which the Securities are to be purchased by the Underwriter from the Company, the initial public offering price, the selling concession and reallowance, if any, and such other information as the Underwriter and the Company deem appropriate in connection with the offering of the Securities. The Company will promptly transmit copies of the prospectus supplement to the Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations and will furnish to the Underwriter as many copies of the Prospectus as the Underwriter shall reasonably request.

(b) Compliance with Securities Regulations and Commission Requests. The Company, subject to Section 3(c), will notify the Underwriter immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective, or any amendment or supplement to the Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, and (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes. The Company will promptly effect the filings necessary pursuant to Rule 424(b) and will take such steps as it deems necessary to ascertain promptly whether the Prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file the Prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order and, if any stop order is issued, to obtain the lifting thereof at the earliest possible moment.

(c) Notice and Filing of Amendments. The Company will give the Underwriter notice of its intention to file or prepare any amendment to the Registration Statement or any amendment, supplement or revision to either the prospectus included in the Registration Statement at the time it became effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the Underwriter with copies of any such documents a reasonable amount of time prior to such proposed filing or use, as the case may be, and will not file or use any such document to which the Underwriter or counsel for the Underwriter shall object.

(d) Delivery of Registration Statements. The Company has furnished or will deliver to the Underwriter and counsel for the Underwriter, without charge, signed copies of the Registration Statement as originally filed and of each amendment thereto (including exhibits filed therewith or incorporated by reference therein and documents incorporated or deemed to be incorporated by reference therein) and signed copies of all consents and certificates of experts, and will also deliver to the Underwriter, without charge, a conformed copy of the Registration Statement as originally filed and of each amendment thereto (without exhibits) as the Underwriter may reasonably request. The copies of the Registration Statement and each amendment thereto furnished to the Underwriter will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(e) Delivery of Prospectuses. The Company will deliver to the Underwriter, without charge, as many copies of each preliminary prospectus as the Underwriter may reasonably request, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to the Underwriter, without charge, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such number of copies of the Prospectus (as amended or supplemented, if applicable) as the Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriter will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(f) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and the 1934 Act and the rules and regulations of the Commission thereunder so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriter or for the Company, to amend the Registration Statement in order that the Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or amend or supplement the Prospectus in order that the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in the opinion of such counsel, at any such time to amend the Registration Statement or amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file with the Commission, subject to Section 3(c), such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement or the Prospectus comply with such requirements, and the Company will furnish to the Underwriter, without charge, such number of copies of such amendment or supplement as the Underwriter may reasonably request.

(g) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the Underwriter, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions as the Underwriter may designate and to maintain such qualifications in effect for as long as may be required for the distribution of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Securities have been so qualified, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for a period of not less than one year from the effective date of the Registration Statement. The Company will also supply the Underwriter with such information as is necessary for the determination of the legality of the Securities for investment under the laws of such jurisdictions as the Underwriter may request.

(h) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

(i) Use of Proceeds. The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectus under "Use of Proceeds".

(j) Restriction on Sale of Securities. During a period of 15 days from the date of the Prospectus, the Company will not, without the prior written consent of the Underwriter, directly or indirectly, issue, sell, offer or contract to sell, grant any option for the sale of, or otherwise transfer or dispose of, any debt securities, or any securities convertible into or exchangeable or exercisable for any debt securities, of the Company.

(k) Reporting Requirements. The Company, during the period when the Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the rules and regulations of the Commission thereunder.

SECTION 4. Payment of Expenses.

(a) Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and of each amendment thereto, (ii) the preparation, printing and delivery to the Underwriter of this Agreement, the Indenture and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Securities, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriter, (iv) the fees and disbursements of the Company's counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(g) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriter in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to the Underwriter of copies of each preliminary prospectus and of the Prospectus and any amendments or supplements thereto, (vii) the fees and expenses payable to the Insurer in connection with the issuance of the Insurance Policy, (viii) the fees and expenses of the Trustee, including the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities, and (ix) any fees payable in connection with the rating of the Securities or the acceptance of the Securities for clearance and settlement through the facilities of The Depository Trust Company.

(b) Termination of Agreement. If this Agreement is terminated by the Underwriter in accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse the Underwriter for all of its out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriter.

SECTION 5. Conditions of Underwriter's Obligations. The obligations of the Underwriter hereunder are subject to the accuracy of the representations and warranties of the Company contained in Section 1 hereof or in certificates of any officer of the Company delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions:

(a) Effectiveness of Registration Statement. The Registration Statement has become effective under the 1933 Act and at Closing Time no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings therefor shall have been initiated or be pending or threatened by the Commission, and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of counsel to the Underwriter. The Prospectus containing the information relating to the description of the Securities, including the specific method of distribution and similar matters, shall have been filed with the Commission in accordance with Rule 424(b).

(b) Opinion of Counsel for Company. At Closing Time, the Underwriter shall have received the favorable opinions, dated as of Closing Time, of (i) Barnes & Thornburg, Indiana counsel for the Company, or such other counsel as is satisfactory to counsel for the Underwriter, in form and substance satisfactory to counsel for the Underwriter, to the effect set forth in Exhibit A hereto and to such further effect as counsel to the Underwriter may reasonably request and
(ii) Kegler, Brown, Hill & Ritter and/or McNees, Wallace & Nurick, Ohio counsel for the Company, in form and substance satisfactory to counsel for the Underwriter, to the effect set forth in Exhibit B hereto and to such further effect as counsel to the Underwriter may reasonably request. Any of such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials.

(c) Opinion of Counsel for Underwriter. At Closing Time, the Underwriter shall have received the favorable opinion, dated as of Closing Time, of Brown & Wood LLP, counsel for the Underwriter, with respect to the matters set forth in the first clause of paragraph (i), and in paragraphs (iv), (v), (vi), (ix) and
(xiii), of Exhibit A hereto. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York and the federal law of the United States, upon the opinions of counsel satisfactory to the Underwriter. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials.

(d) Opinion of Counsel for Insurer. At Closing Time, the Underwriter shall have received the favorable opinion, dated as of Closing Time, of Kevin Doyle, General Counsel for the Insurer, to the effect set forth in Exhibit C hereto and to such further effect as counsel to the Underwriter may reasonably request.

(e) Officers' Certificate. At Closing Time, neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus, and there shall not have been, since the date hereof or since the respective dates as of which information is given in the Prospectus, any material change in the capital stock or long-term debt of the Company (other than any changes in long-term debt resulting from the issuance of Securities pursuant to this Agreement) or any of its subsidiaries, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Underwriter shall have received a certificate of officers of the Company, dated as of Closing Time, to the effect that (i) there has been no such material adverse change or development, (ii) the representations and warranties in Section 1(a) hereof are true and correct with the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has performed or complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to Closing Time, and (iv) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been initiated or are pending or threatened by the Commission.

(f) Accountant's Comfort Letter. At the time of the execution of this Agreement, the Underwriter shall have received from Arthur Andersen LLP a letter dated such date, in form and substance satisfactory to the Underwriter, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus.

(g) Bring-down Comfort Letter. At Closing Time, the Underwriter shall have received from Arthur Andersen LLP a letter, dated as of Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (f) of this Section, except that the specified date referred to shall be a date not more than three business days prior to Closing Time.

(h) Maintenance of Rating. At Closing Time, the Securities shall be rated at least Aaa by Moody's Investors Service Inc. and AAA by Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc., and the Company shall have delivered to the Underwriter a letter dated the Closing Time, from each such rating agency, or other evidence satisfactory to the Underwriter, confirming that the Securities have such ratings; and since the date of this Agreement, there shall not have occurred a downgrading in, or withdrawal of, the rating assigned to the Securities or any of the Company's other securities by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes of Rule 436(g)(2) under the 1933 Act, and no such organization shall have publicly announced that it has under surveillance or review its rating of the Securities or any of the Company's other securities.

(i) Evidence of Insurance Policy. At Closing Time, the Underwriter shall have received evidence that the Insurance Policy has been issued by the Insurer with terms theretofore agreed upon by the Company, the Insurer and the Underwriter.

(j) Additional Documents. At Closing Time, counsel for the Underwriter shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Underwriter and counsel for the Underwriter.

(k) Termination of Agreement. If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the Underwriter by notice to the Company at any time at or prior to Closing Time, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 4, 6, 7, 8 and 12 shall survive any such termination and remain in full force and effect.

SECTION 6. Indemnification.

(a) Indemnification of Underwriter. The Company agrees to indemnify and hold harmless the Underwriter and each person, if any, who controls the Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:

(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such settlement is effected with the written consent of the Company; and

(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the Underwriter), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;

provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by the Underwriter expressly for use in the Registration Statement (or any amendment thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto).

(b) Indemnification of Company, Directors and Officers. The Underwriter agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by the Underwriter expressly for use in the Registration Statement (or any amendment thereto) or such preliminary prospectus or the Prospectus (or any amendment or supplement thereto).

(c) Actions against Parties; Notification. Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by the Underwriter, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriter on the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and of the Underwriter on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.

The relative benefits received by the Company on the one hand and the Underwriter on the other hand in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company and the total underwriting discount received by the Underwriter, in each case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering price of the Securities as set forth on such cover.

The relative fault of the Company on the one hand and the Underwriter on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriter and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

The Company and the Underwriter agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Section 7, the Underwriter shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which the Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue statement or omission or alleged omission.

No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 7, each person, if any, who controls the Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company.

SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriter or controlling person, or by or on behalf of the Company, and shall survive delivery of the Securities to the Underwriter.

SECTION 9. Termination of Agreement.

(a) Termination; General. The Underwriter may terminate this Agreement, by notice to the Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution of this Agreement or since the respective dates as of which information is given in the Prospectus, any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Underwriter, impracticable to market the Securities or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or a national securities exchange, or if trading generally on the American Stock Exchange or the New York Stock Exchange or in the Nasdaq National Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the Commission, the National Association of Securities Dealers, Inc. or any other governmental authority, or (iv) if a banking moratorium has been declared by either Federal or New York authorities, or (v) if the rating assigned by any nationally recognized statistical rating organization to any securities (including the Securities) of the Company as of the date of this Agreement has been lowered or withdrawn since that date or if any such rating agency shall have publicly announced since that date that it has under surveillance or review its rating of the Securities or other securities of the Company.

(b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 4, 6, 7, 8 and 12 shall survive such termination and remain in full force and effect.

SECTION 10. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriter shall be directed to Edward D. Jones & Co., L.P., 12555 Manchester Road, St. Louis, Missouri 63131, Attention: T. William Hizar, Jr.; and notices to the Company shall be directed to it at Indiana Gas Company, Inc., 20 N.W. Fourth Street, Evansville, Indiana 47702-0209, Attention: Vice President and Treasurer.

SECTION 11. Parties. This Agreement shall inure to the benefit of and be binding upon the Underwriter and the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriter and the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriter and the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from the Underwriter shall be deemed to be a successor by reason merely of such purchase.

SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

SECTION 13. Effect of Headings. The Section and paragraph headings herein are for convenience only and shall not affect the construction hereof.

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriter and the Company in accordance with its terms.

Very truly yours,

INDIANA GAS COMPANY, INC.

By /s/
------------------------------
   Title:

CONFIRMED AND ACCEPTED,
as of the date first above written:

EDWARD D. JONES & CO., L.P.

By  /s/
  -------------------------------------
       Authorized Signatory

SCHEDULE A

INDIANA GAS COMPANY, INC.

7.15% Senior Insured Quarterly Notes due 2015

1. The initial public offering price of the 2015 Notes shall be 100% of the principal amount thereof, plus accrued interest, if any, from December 28, 2000.

2. The interest rate on the 2015 Notes shall be 7.15% per annum, payable quarterly on March 15, June 15, September 15 and December 15.

3. The stated maturity date of the 2015 Notes shall be December 15, 2015.

4. The 2015 Notes will be subject to redemption at the option of the Company on or after December 15, 2004 and at the option of representatives of deceased owners of beneficial interests in the 2015 Notes, in each case at 100% of the principal amount thereof plus any accrued interest.

INDIANA GAS COMPANY, INC.

7.45% Senior Insured Quarterly Notes due 2030

1. The initial public offering price of the 2030 Notes shall be 100% of the principal amount thereof, plus accrued interest, if any, from December 28, 2000.

2. The interest rate on the 2030 Notes shall be 7.45% per annum, payable quarterly on March 15, June 15, September 15 and December 15.

3. The stated maturity date of the 2030 Notes shall be December 16, 2030.

4. The 2030 Notes will be subject to redemption at the option of the Company on or after December 15, 2005 and at the option of representatives of deceased owners of beneficial interests in the 2030 Notes, in each case at 100% of the principal amount thereof plus any accrued interest.

EXHIBIT A

FORM OF OPINION OF INDIANA COUNSEL TO COMPANY

The opinion of Indiana counsel to the Company pursuant to Section 5(b)(i) of the Purchase Agreement shall be to the effect that:

(a) The Company has been duly incorporated and is validly existing as a corporation under the laws of Indiana, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus;

(b) The Company has an authorized capitalization as set forth in the Prospectus and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable;

(c) To the best of such counsel's knowledge and other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or to which any property of the Company or any of its subsidiaries is subject which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a material adverse effect on the current or future consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries; and to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others;

(d) The Purchase Agreement has been duly authorized, executed and delivered by the Company;

(e) The Securities have been duly authorized and, when duly executed, authenticated, issued and delivered by the Company, will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture; and the Indenture and the Securities conform to the descriptions thereof in the Prospectus;

(f) The Indenture, including the fifth supplemental indenture thereto, has been duly authorized, executed and delivered by the parties thereto and constitutes a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to (i) the United States Bankruptcy Code, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors' rights or remedies generally and (ii) general equitable principles (regardless of whether such enforcement is considered in a proceeding at law or in equity) and to judicial discretion. The Indenture has been duly qualified under the Trust Indenture Act. All taxes and fees required to be paid with respect to the execution of the Indenture and the issuance of the Securities have been paid;

(g) The issue and sale of the Securities, the compliance by the Company with all of the provisions of the Securities, the Indenture and the Purchase Agreement and the consummation of the transactions therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject, nor will such action result in any violation of the provisions of the Articles of Incorporation, as amended, of the Company or the By-laws of the Company or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company or any of its properties;

(h) The Company, its sole shareholder Vectren Utility Holding Company and its parent Vectren Corporation, are presently exempt from the provisions of the Public Utility Holding Company Act of 1935, as amended (except Section 9 thereof), which would otherwise require them to register thereunder; and the Company's gas distribution activities are exempt from or do not require compliance with the provisions of the Natural Gas Act;

(i) The statements set forth in the Prospectus under the captions "Description of the Debt Securities" and "Description of the Notes", insofar as they purport to constitute a summary of the terms of the Securities, and under the two captions "Plan of Distribution", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and complete in all material respects;

(j) The Company is not and, after giving effect to the offering and sale of the Securities, will not be an "investment company" or an entity "controlled" by an "investment company", as such terms are defined in the Investment Company Act;

(k) The documents incorporated by reference in the Prospectus (other than the financial statements and related schedules, financial data or statistical information therein, as to which such counsel need express no opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder; and although they are not passing upon and do not assume any responsibility for the accuracy and completeness of the statements contained in such documents, such counsel advises the Underwriter that on the basis of the discussions and inquiries concerning various legal and related subjects and reviews of and reports on certain corporate records, documents and proceedings and conferences with representatives of the Company at which certain portions of such documents were discussed (relying as to certain facts relevant to a determination of materiality upon the representations of the Company), no facts have come to such counsel's attention which would lead them to believe that any of such documents, when they became effective or were so filed, as the case may be, contained, in the case of a registration statement which became effective under the Act, an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and, in the case of other documents which were filed under the Act or the Exchange Act with the Commission, an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such documents were so filed, not misleading;

(l) The Indiana Commission Order is in full force and effect and is sufficient to permit the Company to enter into and perform the transactions contemplated by the Purchase Agreement; and no other consent, approval, authorization, order, registration or qualification of any court or governmental agency or body is required for solicitation of offers to purchase Securities, the issue and sale of the Securities or the consummation by the Company of the other transactions contemplated by the Purchase Agreement or the Indenture, except such as have been obtained under the Act and the Trust Indenture Act and such as may be required under the blue sky laws of any jurisdiction in connection with the sale of the Securities as contemplated by the Purchase Agreement; and

(m) The Registration Statement and the Prospectus (other than the financial statements and related schedules, financial data or statistical information therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Act and the Trust Indenture Act and the applicable rules and regulations thereunder; further, although they are not passing upon and do not assume any responsibility for the accuracy and completeness of the statements contained in the Registration Statement and the Prospectus, such counsel advises the Underwriter on the basis of the discussions and inquiries concerning various legal and related subjects and reviews of and reports on certain corporate records, documents and proceedings and conferences with representatives of the Company at which certain portions of the Registration Statement and the Prospectus were discussed (relying as to certain facts relevant to a determination of materiality upon the representations of the Company), no facts have come to such counsel's attention which would lead them to believe that (A) as of the later of the date of effectiveness of the Registration Statement or any amendment thereto or the date of filing of an annual report of the Company on Form 10-K or any amendment thereto, the Registration Statement and any amendment thereto (other than the financial statements and related schedules, financial data or statistical information therein, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (B) as of its date, the Prospectus (other than the financial statements and related schedules therein, financial data or statistical information, as to which such counsel need express no opinion) contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading or (C) as of the date hereof either the Registration Statement or the Prospectus (other than the financial statements and related schedules, financial data or statistical information therein, as to which such counsel need express no opinion) contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and they do not know of any amendment to the Registration Statement required to be filed or any contracts or other documents of a character required to be filed as an exhibit to the Registration Statement or required to be incorporated by reference into the Prospectus as amended or supplemented or required to be described in the Registration Statement or the Prospectus as amended or supplemented which are not filed or incorporated by reference or described as required.

Terms capitalized but not otherwise defined herein shall have the meanings assigned to them in the Purchase Agreement. In rendering such opinion, such counsel may rely as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company and certificates or other written statements of public officials.

EXHIBIT B

FORM OF OPINION OF OHIO COUNSEL TO COMPANY

The opinion of Ohio counsel to the Company pursuant to Section 5(b)(ii) of the Purchase Agreement shall be to the effect that:

(a) The Company has been duly incorporated and is validly existing as a corporation under the laws of Ohio, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus;

(b) The Purchase Agreement has been duly authorized, executed and delivered by the Company;

(d) The Indenture, including the fifth supplemental indenture thereto, has been duly authorized, executed and delivered by the parties thereto;

(e) The issue and sale of the Securities, the compliance by the Company with all of the provisions of the Securities, the Indenture and the Purchase Agreement and the consummation of the transactions therein contemplated will not result in any violation of the provisions of the Articles of Incorporation, as amended, of the Company or the By-laws of the Company or any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over the Company or any of its properties; and

(f) The Ohio Commission Order is in full force and effect and is sufficient to permit the Company to enter into and perform the transactions contemplated by the Purchase Agreement; and the period has expired during which any proceeding to review, suspend, limit, modify, restrict or revoke the Ohio Commission Order may be instituted as of right by any Person other than the Ohio Commission; and no other consent, approval, authorization, order, registration or qualification of any court or governmental agency or body is required for solicitation of offers to purchase Securities, the issue and sale of the Securities or the consummation by the Company of the other transactions contemplated by the Purchase Agreement or the Indenture, except such as have been obtained under the Act and the Trust Indenture Act and such as may be required under the blue sky laws of any jurisdiction in connection with the sale of the Securities as contemplated by the Purchase Agreement.

EXHIBIT C

FORM OF OPINION OF COUNSEL TO THE INSURER

The opinion of counsel for the insurer pursuant to Section 5(d) of the Purchase Agreement shall be to the effect that:

(i) Ambac Assurance is a stock insurance company duly organized and validly existing under the laws of the State of Wisconsin and duly qualified to conduct an insurance business in the States of Indiana and Ohio.

(ii) Ambac Assurance has full corporate power and authority to execute and deliver the Policy and the Policy has been duly authorized, executed and delivered by Ambac Assurance and constitutes a legal, valid and binding obligation of Ambac Assurance enforceable in accordance with its terms except to the extent that the enforceability (but not the validity) of such obligation may be limited by any applicable bankruptcy, insolvency, liquidation, rehabilitation or other similar law or enactment now or hereafter enacted affecting the enforcement of creditors' rights.

(iii)The execution and delivery by Ambac Assurance of the Policy will not, and the consummation of the transactions contemplated thereby and the satisfaction of the terms thereof will not, conflict with or result in a breach of any of the terms, conditions or provisions of the Certificate of Authority, Articles of Incorporation or By-Laws of Ambac Assurance, or any restriction contained in any contract, agreement or instrument to which Ambac Assurance is a party or by which it is bound or constitute a default under any of the foregoing.

(iv) Proceedings legally required for the issuance of the Policy have been taken by Ambac Assurance and licenses, orders, consents or other authorizations or approvals of any governmental boards or bodies legally required for the enforceability of the Policy have been obtained; any proceedings not taken and any licenses, authorizations or approvals not obtained are not material to the enforceability of the Policy.

(v) The statements contained in the Prospectus under the heading "The Policy and the Insurer," insofar as such statements constitute summaries of the matters referred to therein, accurately reflect and fairly present the information purported to be shown and, insofar as such statements describe Ambac Assurance, fairly and accurately describe Ambac Assurance.

(vi) The form of Policy set forth as Exhibit B to the Prospectus is a true and complete copy of the form of Policy.

FIFTH SUPPLEMENTAL INDENTURE

INDENTURE DATED AS OF FEBRUARY 1, 1991

INDIANA GAS COMPANY, INC.,
Issuer

U.S. BANK TRUST NATIONAL ASSOCIATION,
Trustee

Dated as of December 28, 2000

7.15% INSURED QUARTERLY NOTES DUE 2015

7.45% INSURED QUARTERLY NOTES DUE 2030

                                Table of Contents

                                                                            Page
                                                                            ----
                                    ARTICLE 1
           Form and Terms of Insured Quarterly Notes Due 2015 and 2030

 SECTION 101.  Definitions....................................................2
 SECTION 102.  Establishment..................................................3
 SECTION 103.  Payment of Principal and Interest..............................4
 SECTION 104.  Denominations..................................................5
 SECTION 105.  Global Securities..............................................5
 SECTION 106.  Transfer and Exchange..........................................6
 SECTION 107.  Redemption at the Company's Option.............................6
 SECTION 108.  Special Redemption at the Holders' Option......................6

                                    ARTICLE 2
                          Special Insurance Provisions

 SECTION 201.  Consent of Insurer............................................10
 SECTION 202.  Events of Default and Remedies................................10
 SECTION 203.  Notices/Information to be Given to Insurer....................10
 SECTION 204.  Insurance Policy Payment Procedures...........................11
 SECTION 205.  Special Rules Regarding Trustee...............................13
 SECTION 206.  Application of Term "Outstanding" to IQ Notes.................14
 SECTION 207.  Insurer as Third Party Beneficiary............................14
 SECTION 208.  Concerning the Special Insurance Provisions...................14

                                    ARTICLE 3
                            Miscellaneous Provisions

 SECTION 301.  Ratification and Incorporation of Original Indenture..........14
 SECTION 302.  Acceptance of Trust...........................................14
 SECTION 303.  Recitals by Company...........................................14
 SECTION 304.  Amendments....................................................14
 SECTION 305.  Executed in Counterparts......................................15


EXHIBIT A - Form of 15-Year IQ Note
EXHIBIT B - Form of 30-Year IQ Note
EXHIBIT C - Form of Redemption Request

THIS FIFTH SUPPLEMENTAL INDENTURE, dated as of December 28, 2000, by and between INDIANA GAS COMPANY, INC., a corporation incorporated in Indiana and Ohio, 1630 North Meridian Street, Indianapolis, Indiana 46202-1496 (the "Company"), and U.S. BANK TRUST NATIONAL ASSOCIATION (formerly known as First Trust National Association, which was formerly known as Bank of America Illinois, which was formerly known as Continental Bank, National Association), a national banking corporation duly organized and existing under the laws of the United States of America, having its principal corporate trust office at 111 East Wacker Drive, Suite 300, Chicago, Illinois 60601 (the "Trustee").

W I T N E S S E T H:

WHEREAS, the Company has entered into an Indenture, dated as of February 1, 1991 (as amended prior to the date hereof, the "Original Indenture", and together with this Fifth Supplemental Indenture, the "Indenture"), with the Trustee to provide for the issuance from time to time of the Company's unsecured debentures, notes or other evidences of indebtedness (the "Securities"), to be issued in one or more series;

WHEREAS, Section 901 of the Original Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of establishing the form or terms of the Securities of any series as permitted in Sections 201 and 301 of the Original Indenture;

WHEREAS, the Company by corporate action duly taken has authorized the issuance of two series of Securities, the 15-Year IQ Notes and the 30-Year IQ Notes (as defined below), to contain such provisions as have been determined by the Board of Directors of the Company (or a duly authorized committee thereof), including certain provisions required in connection with the issuance of a financial guaranty insurance policy with respect to both series, and as are set forth in this Fifth Supplemental Indenture;

WHEREAS, all conditions have been complied with, all actions have been taken and all things have been done which are necessary to make the 15-Year IQ Notes and the 30-Year IQ Notes, when executed by the Company and authenticated by or on behalf of the Trustee, and when delivered as herein and in the Original Indenture provided, the valid obligations of the Company and to make this Fifth Supplemental Indenture a valid and binding supplemental indenture to the Original Indenture;

NOW, THEREFORE, for and in consideration of the agreements and obligations set forth herein and the purchase of the 15-Year IQ Notes and 30-Year IQ Notes by the Holders (as defined in the Original Indenture), it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the 15-Year IQ Notes and the 30-Year IQ Notes, as follows:

ARTICLE 1

Form and Terms of Insured Quarterly
Notes Due 2015 and 2030

SECTION 101. Definitions. For all purposes of this Fifth Supplemental Indenture, except as otherwise herein expressly provided or unless the context otherwise requires:

(i) except as otherwise expressly provided or unless the context otherwise requires, "Fifth Supplemental Indenture" means this instrument as originally executed or, if amended or supplemented pursuant to the applicable provisions of the Indenture, as so amended or supplemented;

(ii) terms used herein in capitalized form and defined in the Original Indenture, as supplemented to the date hereof, shall have the meanings specified in the Original Indenture;

(iii) the words "herein", "hereof" and "hereto" and other words of similar import used in this Fifth Supplemental Indenture refer to this Fifth Supplemental Indenture as a whole and not to any particular section or other subdivision of this Fifth Supplemental Indenture; and

(iv) the provisions of this Fifth Supplemental Indenture shall be read in conjunction with the provisions of the Original Indenture only with respect to the 15-Year IQ Notes and the 30-Year IQ Notes and the provisions of the Original Indenture shall not be modified by this Fifth Supplemental Indenture with respect to any other series of Securities Outstanding or to be Outstanding under the Original Indenture.

The following defined terms used herein shall have the meanings specified below:

"15-Year IQ Notes" shall have the meaning specified in Section 102 hereof.

"30-Year IQ Notes" shall have the meanings specified in Section 102 hereof.

"Beneficial Owner" shall have the meaning specified in Section 108 hereof.

"Business Day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close in The City of New York.

"Estate Redemption Date" shall have the meaning specified in Section 204(a) hereof.

"IQ Notes" shall have the meaning specified in Section 102 hereof.

"Indenture" shall have the meaning specified in the Recitals hereof.

"Initial Period" shall have the meaning specified in Section 108 hereof.

"Insurance Trustee" means the United States Trust Company of New York, in New York, New York, or any successor thereto, as the Insurance Trustee under the Policy.

"Insurer" means Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance corporation.

"Interest Payment Dates" means March 15, June 15, September 15 and December 15 of each year, beginning on March 15, 2001.

"Maturity Date" shall mean the date on which the principal of an IQ Note or an installment of principal becomes due and payable as herein or therein provided, whether at Stated Maturity or by declaration of acceleration, call for redemption by the Company, notice of exercise of the redemption option referred to in Section 108 hereof, or otherwise.

"Original Indenture" shall have the meaning specified in the Recitals hereof.

"Original Issue Date" means December 28, 2000 with respect to both the 15-Year IQ Notes and the 30-Year IQ Notes.

"Participant" shall have the meaning specified in Section 108 hereof.

"Policy" means the financial guaranty insurance policy issued by the Insurer with respect to scheduled payments due for principal of and interest on, and mandatory redemption payments pursuant to Section 108 hereof on, the 15-Year IQ Notes and the 30-Year IQ Notes, as provided in such policy.

"Redemption Request" shall have the meaning specified in Section 108 hereof.

"Regular Record Date" means, with respect to each Interest Payment Date, the close of business on the 1st calendar day of the month in which such Interest Payment Date falls.

"Representative" shall have the meaning specified in Section 108 hereof.

"Stated Maturity" means December 15, 2015, in the case of the 15-Year IQ Notes, and December 16, 2030, in the case of the 30-Year IQ Notes.

"Subsequent Period" shall have the meaning specified in Section 108 hereof.

SECTION 102. Establishment. There are hereby established two series of Securities to be issued under the Indenture, designated as the "Indiana Gas Company, Inc. 7.15% Insured Quarterly Notes due December 15, 2015" (the "15-Year IQ Notes") and the "Indiana Gas Company, Inc. 7.45% Insured Quarterly Notes due December 16, 2030" (the "30-Year IQ Notes") (each referred to herein as a series of IQ Notes, and collectively as the "IQ Notes").

There are to be authenticated and delivered $20,000,000 aggregate principal amount of 15-Year IQ Notes and $50,000,000 aggregate principal amount of 30-Year IQ Notes, and no further 15-Year IQ Notes or 30-Year IQ Notes shall be authenticated and delivered except as otherwise provided in the Original Indenture.

Each series of IQ Notes shall be issued as a Global Security registered in the name of The Depository Trust Company (the "Depositary") or its nominee and which shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all Outstanding IQ Notes of such series, except as otherwise provided in Section 105 hereof. The 15-Year IQ Notes shall be in substantially the form set forth in Exhibit A hereto, and the 30-Year IQ Notes shall be in substantially the form set forth in Exhibit B hereto.

Each series of IQ Notes shall be dated the date of authentication thereof and shall bear interest from the Original Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as more fully set forth below.

SECTION 103. Payment of Principal and Interest. The unpaid principal amount of each series of IQ Notes shall bear interest at the per annum rate of 7.15% with respect to the 15-Year IQ Notes, and 7.45% with respect to the 30-Year IQ Notes, until paid or duly provided for. The following terms apply to each series of IQ Notes, respectively:

Interest shall be paid quarterly in arrears on each Interest Payment Date commencing on the Interest Payment Date next succeeding the Original Issue Date and, if applicable, on the Maturity Date. Payments of interest on the IQ Notes will include interest accrued from, and including, the immediately preceding Interest Payment Date to which interest has been paid or duly provided for (or from, and including, the Original Issue Date if no interest has been paid or duly provided for) to, but excluding, the applicable Interest Payment Date or the Maturity Date, as the case may be. Interest payments for the IQ 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) thereof 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 IQ 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 IQ 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 IQ Notes by the Trustee not less than ten (10) 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 Original Indenture.

Payment of the principal of and any interest on the IQ Notes due on the Maturity Date shall be made in immediately available funds, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, upon presentation and surrender of the applicable IQ 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; provided, however, that if the Maturity Date falls on or after an Interest Payment Date then Holders presenting and surrendering IQ Notes on the Maturity Date will only be entitled to interest accruing on or after such Interest Payment Date. Payment of interest due on any Interest Payment Date other than the Maturity Date will be made at the aforementioned office or agency maintained by the Company or, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register maintained by the Trustee or (ii) by wire transfer of immediately available funds at such place and to such account at a banking institution in the United States as may be designated in wire transfer instructions received in writing by the Trustee at least sixteen (16) days prior to such Interest Payment Date. Any such wire transfer instructions received by the Trustee shall remain in effect until revoked by such Holder.

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

SECTION 104. Denominations. Each series of IQ Notes may be issued in minimum denominations of $1,000 and any integral multiples thereof.

SECTION 105. Global Securities. Each series of IQ Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary or its nominee. Beneficial Owners of interests in such Global Securities will not be considered the Holders thereof for any purpose under the Indenture. Except under the limited circumstances described below, no Global Security representing an IQ Note shall be exchangeable except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or a successor Depositary or its nominee, and interests in the IQ Notes represented by the Global Security will not be exchangeable for, and will not otherwise be issuable as, IQ Notes in certificated form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or its nominee. The rights of Holders of a Global Security shall be exercised only through the Depositary.

A Global Security shall be exchangeable for individual IQ Notes of the same series and of like tenor and terms in certificated form and in an aggregate principal amount equal to the principal amount of such Global Security, registered in the names of Persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is at any time unwilling or unable to continue as Depositary for such Global Security, or if at any time the Depositary shall no longer be eligible or in good standing under the Securities Exchange Act of 1934, as amended, or other applicable statute or regulation, and, in either case, no successor Depositary shall have been appointed by the Company within ninety (90) days after the Company receives such notice or becomes aware of such ineligibility, (ii) if the Company in its sole discretion determines at any time that such Global Security shall be so exchangeable and delivers to the Trustee a Company Order to the effect thereto, or (iii) there shall have occurred and be continuing a default by the Insurer under the Policy. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for individual certificated IQ Notes of the applicable series registered in such names as the Depositary shall direct.

SECTION 106. Transfer and Exchange. No service charge will be made for any transfer or exchange of IQ Notes, provided, however, that the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange.

The Company shall not be required (a) to issue, register the transfer of or exchange any IQ Notes of a series during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice identifying the serial numbers of the IQ Notes of such series selected for redemption under the Indenture and ending at the close of business on the day of the mailing, or (b) to register the transfer of or exchange any IQ Notes so selected for redemption in whole or in part, except the unredeemed portion of any IQ Note being redeemed in part.

SECTION 107. Redemption at the Company's Option. Each series of IQ Notes shall be subject to redemption at the option of the Company, in whole or in part, without premium or penalty, at any time or from time to time on or after December 15, 2004, in the case of the 15-Year IQ Notes, and December 15, 2005, in the case of the 30-Year IQ Notes, in each case at a Redemption Price equal to 100% of the principal amount to be redeemed plus any unpaid interest accrued to the Redemption Date.

In the event of redemption of a series of IQ Notes in part only, a new IQ 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 1103 of the Original Indenture.

The IQ Notes will not have a sinking fund.

Notice of redemption shall be given as provided in Section 1104 of the Original Indenture.

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

SECTION 108. Special Redemption at the Holders' Option. With regard to IQ Notes of any series, a "Beneficial Owner" means the Person who has the right to sell, transfer or otherwise dispose of an interest in an IQ Note and the right to receive the proceeds therefrom as well as the interest and principal payable to the Holder thereof. In general, a determination of beneficial ownership in the IQ Notes will be subject to the rules, regulations and procedures governing the Depositary and institutions that have accounts with the Depositary or a nominee thereof ("Participants").

Unless the applicable series of IQ Notes has been declared due and payable prior to their Stated Maturity following an Event of Default with respect to such series, the Representative of a deceased Beneficial Owner of IQ Notes of such series has the right to require the Company to redeem all or part of such Beneficial Owner's interest in such series of IQ Notes, expressed in integral multiples of $1,000 principal amount, prior to Stated Maturity at 100% of the principal amount to be redeemed plus any unpaid interest accrued to the date of payment, and the Company will redeem the same subject to the limitations that the Company will not be obligated to redeem, during the period from the Original Issue Date through and including December 15, 2001 (the "Initial Period"), and during any twelve-month period which ends on and includes each December 15 thereafter (each such twelve-month period being hereinafter referred to as a "Subsequent Period"), as follows:

(i) with respect to the 15-Year IQ Notes: (1) on behalf of an individual deceased Beneficial Owner, any ownership interest in the 15-Year IQ Notes which exceeds a total principal amount of $25,000, or
(2) ownership interests in the 15-Year IQ Notes of all Representatives of deceased Beneficial Owners so requesting redemption in an aggregate principal amount exceeding $600,000; and

(ii) with respect to the 30-Year IQ Notes: (1) on behalf of an individual deceased Beneficial Owner, any ownership interest in the 30-Year IQ Notes which exceeds a total principal amount of $25,000, or
(2) ownership interests in the 30-Year IQ Notes for all Representatives of deceased Beneficial Owners so requesting redemption in an aggregate principal amount exceeding $1,500,000.

The Company may, at its option, redeem an interest of any deceased Beneficial Owner of IQ Notes in the Initial Period or any Subsequent Period in excess of the $25,000 individual limitation applicable to each series. Any such redemption, to the extent that it exceeds the $25,000 per series individual limitation for any deceased Beneficial Owner, shall not be included in the computation of the $600,000 aggregate limitation, in the case of the 15-Year IQ Notes, or the $1,500,000 aggregate limitation, in the case of the 30-Year IQ Notes for such Initial Period or such Subsequent Period, as the case may be, or for any succeeding Subsequent Period. The Company also may, at its option, redeem interests of deceased Beneficial Owners of IQ Notes, in the Initial Period or any Subsequent Period, in an aggregate principal amount exceeding $600,000, in the case of the 15-Year IQ Notes, or $1,500,00, in the case of the 30-Year IQ Notes. Any such redemption, to the extent it exceeds such aggregate limitation for the applicable series of IQ Notes, shall not reduce the aggregate limitation for such series for any Subsequent Period.

With respect to each series of IQ Notes, subject to the $25,000 individual limitation and the aggregate principal amount limitation applicable to such series for the Initial Period and each Subsequent Period, the Company will redeem the interest of such Beneficial Owner in the IQ Notes within 60 days following receipt by the Company of a Redemption Request from the Trustee. If Redemption Requests with respect to a series of IQ Notes exceed the aggregate principal amount of interests required to be redeemed during the Initial Period or any Subsequent Period, then such excess Redemption Requests will be applied in the order received by the Trustee to successive Subsequent Periods, regardless of the number of Subsequent Periods required to redeem such interests. With respect to each series of IQ Notes, the Company may at any time notify the Trustee that it will redeem, on a date not less than 30 nor more than 60 days thereafter, all or any such principal amount of IQ Notes of such series for which Redemption Requests have been received but which are not then eligible for redemption by reason of the $25,000 individual limitation or the applicable aggregate limitation. Any IQ Notes so redeemed shall be redeemed in the order of receipt of Redemption Requests by the Trustee.

A request for redemption of an interest in the IQ Notes may be initiated at any time and in any principal amount in integral multiples of $1,000 by the personal representative or other Person authorized to represent the estate of the deceased Beneficial Owner or from a surviving joint tenant(s) or tenant(s) by the entirety of, or the trustee of a trust for, the deceased Beneficial Owner (each, a "Representative"). The Representative shall deliver a request to the Participant through whom the deceased Beneficial Owner owned such interest, in form satisfactory to the Participant, together with evidence of the death of the Beneficial Owner, evidence of the authority of the Representative satisfactory to the Participant, such waivers, notices or certificates as may be required under applicable state or federal law and such other evidence of the right to such redemption as the Participant shall require. The request shall specify the series and principal of the interest in the IQ Notes to be redeemed. The Participant shall thereupon deliver to the Depositary a request for redemption substantially in the form attached as Exhibit C hereto (each such request, a "Redemption Request").

The Depositary will, on receipt of a Redemption Request, forward the same to the Trustee. The Trustee shall maintain records with respect to Redemption Requests received by it, including date of receipt, the name of the Participant filing the Redemption Request and the status of each such Redemption Request with respect to the $25,000 individual limitation and the applicable aggregate limitation applicable to the series of IQ Notes to be redeemed for the applicable Initial Period or Subsequent Period. The Trustee will immediately file with the Company each Redemption Request it receives, together with the information regarding the eligibility thereof with respect to the $25,000 individual limitation and the applicable aggregate limitation. The Depositary, the Company and the Trustee may conclusively assume, without independent investigation, that the statements contained in each Redemption Request are true and correct and shall have no responsibility for reviewing any documents submitted to the Participant by the Representative or for determining whether the applicable decedent is in fact the Beneficial Owner of the interest in the IQ Notes to be redeemed or is in fact deceased and whether the Representative is duly authorized to request redemption on behalf of the applicable Beneficial Owner.

The price to be paid by the Company for the IQ Notes to be redeemed pursuant to a Redemption Request is 100% of the principal amount thereof plus any unpaid interest accrued to the date of payment. Subject to arrangements with the Depositary, payment for interests in the IQ Notes which are to be redeemed shall be made to the Depositary upon presentation of IQ Notes to the Trustee for redemption in the aggregate principal amount specified in the Redemption Requests submitted to the Trustee by the Depositary which are to be fulfilled in connection with such payment.

The principal amount of any IQ Notes of a series acquired or redeemed by the Company other than by redemption at the option of any Representative of a deceased Beneficial Owner pursuant to this Section 108 shall not be included in the computation of either the $25,000 individual limitation or the applicable aggregate principal amount limitation for such series for the Initial Period or for any Subsequent Period.

For purposes of this Section 108, an interest in an IQ Note held in tenancy by the entirety, joint tenancy or by tenants in common will be deemed to be held by a single Beneficial Owner and the death of a tenant by the entirety, joint tenant or tenant in common will be deemed the death of a Beneficial Owner. The death of a person who, during such person's lifetime, was entitled to substantially all of the rights of a Beneficial Owner of an interest in IQ Notes will be deemed the death of such Beneficial Owner, regardless of the recordation of such interest on the records of the relevant Participant, if such rights can be established to the satisfaction of such Participant. Such interest shall be deemed to exist in typical cases of nominee ownership, ownership under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, community property or other similar joint ownership arrangements, including individual retirement accounts or Keogh [H.R. 10] plans maintained solely by or for the decedent or by or for the decedent and any spouse, and trust and certain other arrangements under which one person has substantially all of the rights of a Beneficial Owner during such person's lifetime.

Any Redemption Request may be withdrawn by the Representative(s) presenting the same upon delivery of a written request for such withdrawal given by the Participant on behalf of such Representative to the Depositary and by the Depositary to the Trustee not less than 60 days prior to payment thereof by the Company.

The Company may, at its option, purchase any IQ Notes for which Redemption Requests have been received in lieu of redeeming such IQ Notes. Any IQ Notes so purchased by the Company shall either be reoffered for sale and sold within 180 days after the date of purchase or presented to the Trustee for redemption and cancellation. Any such acquisition of IQ Notes by the Company will not be included in the computation of the $25,000 individual limitation or the aggregate limitation applicable to the relevant series for the Initial Period or any Subsequent Period.

With respect to each series of IQ Notes, during such time or times as such IQ Notes are not represented by a Global Security and are issued in certificated form, all references in this Section 108 to Participants and the Depositary, including the Depositary's governing rules, regulations and procedures shall be deemed deleted, all determinations which under this section the Participants are required to make shall be made by the Company (including, without limitation, determining whether the applicable decedent is in fact the Beneficial Owner of the interest in the IQ Notes to be redeemed or is in fact deceased and whether the Representative is duly authorized to request redemption on behalf of the applicable Beneficial Owner), all requests for redemption, to be effective, shall be delivered by the Representative to the Trustee, with a copy to the Company, and shall be in the form of a Redemption Request (with appropriate changes to reflect the fact that such Redemption Request is being executed by a Representative) and, in addition to all documents that are otherwise required to accompany a Redemption Request, shall be accompanied by the certificated IQ Note that is the subject of such request.

ARTICLE 2

Special Insurance Provisions

SECTION 201. Consent of Insurer.

(a) Any provision of the Indenture expressly recognizing or granting rights in or to the Insurer may not be amended in any manner which materially affects the rights of the Insurer hereunder without the prior written consent of the Insurer.

(b) In any instance in which the consent of all or a certain percentage of the Holders of a series of IQ Notes is required under the Indenture, the Insurer's consent shall be required in addition to any such required Holders' consent, so long as the Insurer is not in default under the Policy.

SECTION 202. Events of Default and Remedies. Anything in the Indenture to the contrary notwithstanding, if an Event of Default with respect to a series of IQ Notes occurs and is continuing:

(a) Consent of the Insurer upon Default. The Insurer shall be entitled to control and direct the enforcement of all rights and remedies granted to the Holders of such series or to the Trustee for the benefit of such Holders under the Indenture, including, without limitation, (i) the right to accelerate the principal of such series as provided in Section 202(b) below, and (ii) the right to rescind and annul any such declaration of acceleration; and the Insurer shall also be entitled to approve any waiver of a past default as provided under
Section 513 of the Original Indenture. Notwithstanding the foregoing, the Insurer's rights referred to in this Section 202(a) shall not apply to the Representatives' rights under Section 108 hereof.

(b) Acceleration Rights. Upon the occurrence and continuance of an Event of Default with respect to a particular series of IQ Notes the Trustee may, with the consent of the Insurer, and shall, at the direction of the Insurer or not less than 33% of the Holders of such series of IQ Notes with the consent of the Insurer, by written notice to the Company and the Insurer, declare the principal of such series of IQ Notes to be immediately due and payable, whereupon that portion of the principal of the IQ Notes of such series thereby coming due and the interest thereon accrued to the date of payment shall, without further action, become and be immediately due and payable; provided, however, that if an Event of Default has occurred and is continuing with respect to more than one series of Securities under the Indenture, the Trustee or the Holders of not less than 33% in aggregate principal amount of the Outstanding Securities of all such series, considered as one class, may make such declaration of acceleration, and not the Holders of the Securities of any one of such series.

SECTION 203. Notices/Information to be Given to Insurer. With respect to each of the 15-Year IQ Notes and the 30-Year IQ Notes, so long as the Policy shall be in full force and effect, the Company and the Trustee agree to comply with the provisions set forth below in this Section 203.

(a) Information to be provided by Company. The Company shall furnish to the surveillance department of the Insurer:

(i) as soon as practicable after the filing thereof with the Securities and Exchange Commission, a copy of any financial statements of the Company and a copy of any audit and annual report of the Company filed therewith;

(ii) such additional information as the Insurer may reasonably request; and

(iii) a copy of any notice to be given to the Holders of such series of IQ Notes, including, without limitation, notice of any redemption of or defeasance of any such IQ Notes.

(b) Information to be provided by Trustee. The Trustee or paying agent, as applicable, shall notify the office of the general counsel of the Insurer as follows:

(i) of any failure of the Company to provide relevant notices, certificates or other documents required to be provided under the Indenture to the Trustee with respect to such series of IQ Notes;

(ii) if at any time there are insufficient moneys to make any payments of principal and/or interest as required with respect to such series of IQ Notes; and

(iii) promptly upon the occurrence of any Event of Default under the Indenture.

(c) Other Information Rights. The Company will permit the Insurer to discuss the affairs, finances and accounts of the Company with appropriate officers of the Company. In addition, the Trustee will permit the Insurer to have access to and to make copies of all books and records relating to such series of IQ Notes at any reasonable time. The Insurer will keep all such information confidential and will use such information solely for purposes of monitoring its responsibilities with respect to such series of IQ Notes.

SECTION 204. Insurance Policy Payment Procedures. With respect to each of the 15-Year IQ Notes and the 30-Year IQ Notes, so long as the Policy shall be in full force and effect, the Company and the Trustee agree to comply with the provisions set forth below in this Section 204. In the event that the Company appoints a paying agent or new Security Registrar with respect to either such series of IQ Notes, all references to the Trustee in paragraphs (a) through (f) of this Section 204 shall be deemed instead to refer to such paying agent or Security Registrar, as applicable. References to the IQ Notes in paragraphs (a) through (f) of this Section 204 shall be deemed to refer to each of the 15-Year IQ Notes and the 30-Year IQ Notes, respectively.

(a) At least one (1) Business Day prior to each Interest Payment Date, Stated Maturity or Estate Redemption Date, the Trustee will determine whether it holds sufficient funds for the payment of the principal of and/or interest on the IQ Notes due on such Interest Payment Date, Stated Maturity or Estate Redemption Date. If the Trustee determines that there will be insufficient funds available, the Trustee shall so notify the Insurer. Such notice shall specify the amount of the anticipated deficiency, the IQ Notes to which such deficiency is applicable (including, in the case of an interest in IQ Notes specified in a Redemption Request, the principal amount thereof and any unpaid interest accrued thereon that is subject to mandatory redemption on an Estate Redemption Date), and whether such deficiency will be as to principal or interest, or both. If the Trustee has so notified the Insurer at least one (1) Business Day prior to the relevant Interest Payment Date, Stated Maturity or Estate Redemption Date, the Insurer will make payments of principal and/or interest due on the relevant IQ Notes on or before the first (1st) Business Day next following the date on which the Insurer shall have received such notice of nonpayment from the Trustee. As used in this Section 204, an "Estate Redemption Date" shall be, with respect to each Redemption Request submitted to the Company by the Trustee, the sixtieth
(60th) day following the date of receipt by the Company of such Redemption Request from the Trustee, as described in Section 108 hereof. Interests in IQ Notes which are subject to mandatory redemption on any Estate Redemption Date consist of all or such portion of the principal amount of the IQ Notes specified in the relevant Redemption Request(s), together with any unpaid interest accrued thereon, which does not exceed the $25,000 individual limitation or the aggregate principal amount limitation applicable to the IQ Notes for the Initial Period or Subsequent Period in which such Estate Redemption Date falls.

(b) With respect to notices of nonpayment of interest and/or principal applicable to all of the IQ Notes of the series, the Trustee shall, after giving notice to the Insurer as provided in Section 204(a) above, make available to the Insurer and, at the Insurer's direction, to the Insurance Trustee, the Security Register of the Company maintained by the Trustee and all records relating to the IQ Notes maintained under the Indenture.

(c) The Trustee shall provide the Insurer and the Insurance Trustee with a list of Holders of the IQ Notes entitled to receive principal and/or interest payments from the Insurer under the terms of the Policy, including mandatory redemption payments for interests in IQ Notes specified in a Redemption Request, and shall make arrangements with the Insurance Trustee (i) to mail checks or drafts to the Holders of IQ Notes entitled to receive full or partial interest payments from the Insurer and (ii) to pay principal upon IQ Notes surrendered to the Insurance Trustee by the Holders of IQ Notes entitled to receive full or partial principal payments from the Insurer.

(d) The Trustee shall, at the time it provides notice to the Insurer pursuant to Section 204(a) above, notify the Holders of IQ Notes entitled to receive the payment of principal and/or interest thereon from the Insurer (i) as to the fact of such entitlement, (ii) that the Insurer will remit to them all or a part of the interest payments due for payment upon proof of Holder entitlement such interest payments and delivery to the Insurance Trustee, in form reasonably satisfactory to the Insurance Trustee, of an appropriate assignment of the Holder's right to such payments, (iii) that in order to receive full payment of scheduled principal from the Insurer, they must surrender their IQ Notes (along with an appropriate instrument of assignment in form reasonably satisfactory to the Insurance Trustee to permit ownership of such IQ Notes to be registered in the name of the Insurer) for payment to the Insurance Trustee, and not the Trustee, and (iv) that in order to receive partial payment of scheduled principal from the Insurer, they must surrender their IQ Notes for payment thereon first to the Trustee, who shall note on such IQ Notes the portion of the principal paid by the Trustee and then, along with an appropriate instrument of assignment in form reasonably satisfactory to the Insurance Trustee, to the Insurance Trustee, which will then pay the unpaid portion of principal.

(e) In the event that the Trustee has notice that any payment of principal of or interest on an IQ Note which has become Due for Payment (as defined in the Policy) and which is made to a Holder by or on behalf of the Company has been deemed a preferential transfer and theretofore recovered from its Holder pursuant to the United States Bankruptcy Code by a trustee in bankruptcy or other appropriate person in accordance with the final, nonappealable order of a court having competent jurisdiction, the Trustee shall notify all Holders of IQ Notes of such series that in the event that any Holder's payment is so recovered, such Holder will be entitled to payment from the Insurer to the extent of such recovery if sufficient funds are not otherwise available from the Company, and the Trustee shall furnish to the Insurer its records evidencing the payments of principal of and interest on the IQ Notes which have been made by the Trustee and subsequently recovered from Holders and the dates on which such payments were made.

(f) In addition to those rights granted the Insurer under the Indenture, the Insurer shall, to the extent it makes payments of principal of and/or interest on IQ Notes, become subrogated to the rights of the recipients of such payments in accordance with the terms of the Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past due interest, the Trustee shall note the Insurer's rights as subrogee on the Security Register of the Company maintained by the Trustee, upon receipt from the Insurer of proof of the payment of interest thereon to the Holders of such IQ Notes, and (ii) in the case of subrogation as to claims for past due principal, the Trustee shall note the Insurer's rights as subrogee on the Security Register of the Company maintained by the Trustee upon surrender of such IQ Notes by the Holders thereof, together with proof of the payment of principal thereof.

SECTION 205. Special Rules Regarding Trustee

(a) The Trustee or paying agent, if any, may be removed pursuant to
Section 608 of the Original Indenture only with the consent of the Insurer, which consent shall not be unreasonably withheld.

(b) The Insurer shall receive prior written notice from the Company of the resignation of any Trustee or paying agent.

(c) Every successor Trustee appointed pursuant to Section 608 of the Original Indenture shall be a trust company or bank in good standing having a reported capital and surplus of not less than $75,000,000, and otherwise meeting the eligibility requirements set forth in Section 310 of the Trust Indenture Act of 1939, as amended. Any such successor Trustee shall be reasonably acceptable to the Insurer. Any successor paying agent, if applicable, shall not be appointed unless the Insurer approves such successor in writing, such approval not to be unreasonably withheld. Notwithstanding any other provision of the Indenture, if a successor Trustee with respect to a series of IQ Notes has not been accepted by the Insurer within 30 days after a written notice of removal or resignation has been delivered to the Company, the Trustee may petition a court of competent jurisdiction at the expense of the Company to appoint a successor trustee with respect to such series of IQ Notes.

(d) Notwithstanding any other provision of the Indenture, in determining whether the rights of the Holders of a series of IQ Notes will be adversely affected by any action taken pursuant to the terms and provisions of the Indenture, the Trustee (or paying agent) shall consider the effect on such Holders as if there were no Policy with respect to such series.

SECTION 206. Application of Term "Outstanding" to IQ Notes. In the event that the principal and/or interest due on a series of IQ Notes shall be paid by the Insurer pursuant to the Policy, such series of IQ Notes shall remain Outstanding for all purposes under the Indenture, not be considered defeased or otherwise satisfied and not be considered paid by the Company, and all covenants, agreements and other obligations of the Company to the Holders of such series under the Indenture shall continue to exist and shall run to the benefit of the Insurer, and the Insurer shall be subrogated to the rights of such Holders to the extent of each such payment.

SECTION 207. Insurer as Third Party Beneficiary. To the extent that this Fifth Supplemental Indenture confers upon or gives or grants to the Insurer any right, remedy or claim under or by reason of the Indenture, the Insurer is hereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder.

SECTION 208. Concerning the Special Insurance Provisions. The provisions of this Article 2 shall apply to each series of IQ Notes notwithstanding anything in the Indenture to the contrary, but only so long as the Policy with respect to such series of IQ Notes shall be in full force and effect and the Insurer is not in default thereunder.

ARTICLE 3

Miscellaneous Provisions

SECTION 301. Ratification and Incorporation of Original Indenture. From and after the date hereof, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture, as supplemented by this Fifth Supplemental Indenture, shall be read, taken and construed as one and the same instrument with respect to the 15-Year IQ Notes and the 30-Year IQ Notes.

SECTION 302. Acceptance of Trust. The Trustee accepts the trusts created by the Original Indenture, as supplemented by this Fifth Supplemental Indenture, and agrees to perform the same upon the terms and conditions in the Original Indenture, as supplemented by this Fifth Supplemental Indenture.

SECTION 303. Recitals by Company. The recitals contained in the Indenture and the 15-Year IQ Notes and the 30-Year IQ Notes, except the Trustee's certificate of authentication, are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the 15-Year IQ Notes and the 30-Year IQ Notes and of this Fifth Supplemental Indenture as fully and with like effect as if set forth herein in full.

SECTION 304. Amendments. Notwithstanding any other provision hereof, all amendments to the Original Indenture made hereby shall have effect only with respect to the 15-Year IQ Notes and the 30-Year IQ Notes, and not with respect to the Securities of any other series created subsequent to the date hereof.

SECTION 305. Executed in Counterparts. This Fifth Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, each party hereto has caused this Fifth Supplemental Indenture to be signed in its name and on its behalf by its duly authorized officers, all as of the date first above written.

ATTEST:                                   INDIANA GAS COMPANY, INC.


By:                                       By:
   -----------------------------             -----------------------------------


ATTEST:                                   U.S. BANK TRUST NATIONAL
                                          ASSOCIATION, as Trustee


By:                                       By:
   -----------------------------             -----------------------------------

EXHIBIT A

FORM OF 15-YEAR IQ NOTE

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT IS MADE TO CEDE & CO., 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 AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

REGISTERED
NO. CUSIP NO. 454758AL7

INDIANA GAS COMPANY, INC.

7.15% INSURED QUARTERLY NOTE
DUE DECEMBER 15, 2015

Principal Amount:                 $________________

Regular Record Date:              1st calendar day  of the month in which each
                                  Interest Payment Date falls

Original Issue Date:              December 28, 2000

Stated Maturity:                  December 15, 2015

Interest Payment Dates:           March 15, June 15, September 15 and December
                                  15, commencing March 15, 2001

Interest Rate:                    7.15% per annum

Authorized Denomination:          $1,000

Initial Redemption Date:          December 15, 2004

Indiana Gas Company, Inc., a corporation incorporated in Indiana and Ohio (the "Company"), which term includes any successor corporation under the Indenture referred to on the reverse hereof, for value received, hereby promises to pay, without relief from valuation and appraisement laws, to ____________., or its registered assigns, the principal sum of _________________ DOLLARS ($____________) on the Stated Maturity shown above (or any Redemption Date, as defined on the reverse hereof, or any earlier date of acceleration of maturity) (each such date being hereinafter referred to as the "Maturity Date" with respect to the principal repayable on such date), and to pay interest thereon (and on any overdue principal or interest to the extent legally enforceable) at the Interest Rate specified above, until the principal hereof is paid or made available for payment. The Company will pay interest from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on each Interest Payment Date as specified above, commencing on the Interest Payment Date next succeeding the Original Issue Date shown above and, if applicable, on the Maturity Date. Payments of interest on this Note will include interest accrued from, and including, the immediately preceding Interest Payment Date to which interest has been paid or duly provided for (or from, and including, the Original Issue Date if no interest has been paid or duly provided for) to, but excluding, the applicable Interest Payment Date or the Maturity Date, as the case may be. Interest payments for this Note 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, as provided in such Indenture, be paid to the Person (the "Holder") in whose name this Note (the "Note") is registered at the close of business on the Regular Record Date specified above next preceding such Interest Payment Date. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for on any Interest Payment Date ("Defaulted Interest") will forthwith cease to be payable to the Holder at the close of business on the applicable Regular Record Date and may either be paid to the Person 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, notice whereof shall be given to the Holder of this Note by the Trustee not less than 10 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.

Payment of the principal of and any interest in respect of this Note due on the Maturity Date will be made in immediately available funds, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, upon presentation and surrender of this Note at the office or agency maintained by the Company for that purpose in the Borough of Manhattan, The City of New York, currently the office of the Trustee located at 100 Wall Street, Suite 2000, New York, New York 10005, or at such other paying agency in the Borough of Manhattan, The City of New York, as the Company may determine; provided, however, that if the Maturity Date falls on or after an Interest Payment Date then Holders presenting and surrendering IQ Notes on the Maturity Date will only be entitled to interest accruing on or after such Interest Payment Date. Payment of interest due on any Interest Payment Date other than the Maturity Date will be made at the aforementioned office or agency maintained by the Company or, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register maintained by the Trustee or (ii) 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 writing by the Holder to the Trustee at least 16 days prior to such Interest Payment Date. Any such wire instructions received by the Trustee shall remain in effect until revoked by the Holder.

In the event that any Interest Payment Date or the Maturity Date falls on a day that is not a Business Day, then the required payment of principal and/or interest payable on such date will be made on the next succeeding Business Day, except that, if such Business Day is in the next succeeding calendar year, payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date such payment was due, and no interest shall accrue with respect to such payment for the period from and after such Interest Payment Date or the Maturity Date, as the case may be, to the date of such payment on the next succeeding Business Day. A "Business Day" shall mean any day, other than a Saturday or a Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close in The City of New York.

Financial Guaranty Insurance Policy No. _________ (the "Policy") with respect to payments due for principal of and interest on this Note and, subject to certain annual principal amount limitations set forth in the Indenture and described on the reverse hereof, any payments in connection with the mandatory redemption of interests in this Note at the option of representatives of deceased Beneficial Owners thereof, has been issued by Ambac Assurance Corporation ("Ambac Assurance"). The Policy has been delivered to the United States Trust Company of New York as the Insurance Trustee under said Policy and will be held by such Insurance Trustee or any successor insurance trustee. The Policy is on file and available for inspection at the principal office of the Insurance Trustee, currently located at ____________________________________________________________, and a copy thereof may be secured from Ambac Assurance or the Insurance Trustee. All payments required to be made under the Policy shall be made in accordance with the provisions thereof. The Holder of this Note acknowledges and consents to the subrogation rights of Ambac Assurance as more fully set forth in the Policy.

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 ON THE FACE HEREOF.

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 be valid or obligatory for any purpose.

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

INDIANA GAS COMPANY, INC.

By:

Title:

Dated:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of
the series designated therein referred to in the within-mentioned Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee

By:

Authorized Signatory

[REVERSE OF NOTE]

INDIANA GAS COMPANY, INC.

7.15% INSURED QUARTERLY NOTE DUE DECEMBER 15, 2015

This Note is one of a duly authorized series of Securities of the Company issued and to be issued under an Indenture, dated as of February 1, 1991 (as amended by the Second Supplemental Indenture thereto dated as of September 15, 1991, and by the Fifth Supplemental Indenture dated as of December 28, 2000, herein referred to as the "Indenture"), between the Company and U.S. Bank Trust National Association (formerly known as First Trust National Association, which was formerly known as Bank of America Illinois, which was formerly known as Continental Bank, National Association), as trustee (the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof as "7.15% Insured Quarterly Notes due December 15, 2015" (the "15-Year IQ Notes") in the aggregate principal amount of $_________, subject to the provisions of the Indenture. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture or on the face hereof, as the case may be.

The Company shall have the right, subject to the terms and conditions of the Indenture, to redeem this Note at any time on or after December 15, 2004, at the option of the Company, without premium or penalty, in whole or in part, at a Redemption Price equal to 100% of the principal amount to be redeemed plus any unpaid interest accrued to the date fixed for redemption (the "Redemption Date"), on written notice given to the Holder hereof (in accordance with the provisions of the Indenture) not more than 60 nor less than 30 days prior to the Redemption Date.

In the event of redemption of this Note in part only, a new 15-Year IQ Note or Notes for the unredeemed portion hereof will be issued by the Company in the name of the Holder hereof upon the presentation and surrender hereof. The 15-Year IQ Notes will not have a sinking fund.

Unless this Note has been declared due and payable prior to Stated Maturity following an Event of Default, the Representative of a deceased Beneficial Owner of an interest in this Note may require the Company to redeem all or a part of such deceased Beneficial Owner's interest in this Note prior to Stated Maturity, in whole or in part in increments of $1,000, at 100% of the principal amount to be redeemed, plus any unpaid interest accrued to the date of payment, subject to certain limitations set forth in the Indenture. Subject to certain individual and aggregate limitations, and all as set forth more fully in the Fifth Supplemental Indenture, for interests in this Note to be redeemed pursuant to this special redemption option, the Trustee must receive from the Depositary a Redemption Request substantially in the form set forth as Exhibit C to the Fifth Supplemental Indenture and shall forward the same to the Company, whereupon the Company shall redeem the interests set forth in the Redemption Request within 60 days following its receipt of such Redemption Request from the Trustee. As used herein, "Representative" means the personal representative or other Person authorized to represent the estate of a deceased Beneficial Owner of an interest in this Note or a surviving joint tenant(s) or tenant(s) by the entirety of, or the trustee of a trust for, a Beneficial Owner of an interest in this Note.

If an Event of Default with respect to the 15-Year IQ Notes shall occur and be continuing, the principal of this Note may, and in certain cases shall, be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. So long as Ambac Assurance is not in default under the Policy, Ambac Assurance shall be entitled to control and direct all rights and remedies with respect to the 15-Year IQ Notes other than the rights of the Representatives referred to in the preceding paragraph.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of any series of the Securities at any time by the Company and the Trustee with the consent of the Holders of not less than a majority of the aggregate principal amount of all Securities at the time Outstanding of each series affected thereby. The Indenture also contains provisions permitting the Holders of a majority of the aggregate principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, 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 or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

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

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register of the Company upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal hereof or interest hereon are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by the Holder hereof or by such Holder's attorney duly authorized in writing, and thereupon one or more new 15-Year IQ Notes, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued by the Company to the designated transferee or transferees. 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 tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary, except as required by law.

This Note is 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 therein and herein set forth, this Note is exchangeable for a like aggregate principal amount of 15-Year IQ Notes of different authorized denominations but otherwise having the same terms and provisions, as requested by the Holder hereof surrendering the same.

THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF INDIANA WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM - as tenants in common            UNIF GIFT
TEN ENT - as tenants by the entireties    MIN ACT    - _______ Custodian _______
JT TEN  - as joint tenants with right of               (Cust)            (Minor)
          survivorship and not as tenants              Under Uniform Gifts
          in common                                          to Minors Act
                                                       _________________________
                                                                 (State)

Additional abbreviations may also be used though not in the above list.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and

transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
          OTHER
IDENTIFYING NUMBER OF ASSIGNEE
---------------------- ----------------------

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

(Please print or typewrite name and address including postal zip code of assignee)

this Note and all rights thereunder hereby irrevocably constituting and appointing

Attorney to transfer this Note on the books of the Trustee, with full power of substitution in the premises.

Dated:

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

            --------------     -------------------------------------------------
                                        Notice:   The   signature(s)   on   this
                                        Assignment   must  correspond  with  the
                                        name(s) as written upon the face of this
                                        Note  in   every   particular,   without
                                        alteration or  enlargement or any change
                                        whatsoever.

EXHIBIT B

FORM OF 30-YEAR IQ NOTE

REGISTERED
NO. CUSIP NO. 454758AM5

INDIANA GAS COMPANY, INC.

7.45% INSURED QUARTERLY NOTE
DUE DECEMBER 16, 2030

Principal Amount:                       $________________

Regular Record Date:                    1st   calendar  day  of  the  month in
                                        which each Interest Payment Date falls

Original Issue Date:                    December 28, 2000

Stated Maturity:                        December 16, 2030

Interest Payment Dates:                 March 15,  June 15,  September 15  and
                                        December 15, commencing March 15, 2001

Interest Rate:                          7.45% per annum

Authorized Denomination:                $1,000

Initial Redemption Date:                December 15, 2005

Indiana Gas Company, Inc., a corporation incorporated in Indiana and Ohio corporation (the "Company"), which term includes any successor corporation under the Indenture referred to on the reverse hereof, for value received, hereby promises to pay, without relief from valuation and appraisement laws, to _____________, or its registered assigns, the principal sum of _________________ DOLLARS ($____________) on the Stated Maturity shown above (or any Redemption Date, as defined on the reverse hereof, or any earlier date of acceleration of maturity) (each such date being hereinafter referred to as the "Maturity Date" with respect to the principal repayable on such date), and to pay interest thereon (and on any overdue principal or interest to the extent legally enforceable) at the Interest Rate specified above, until the principal hereof is paid or made available for payment. The Company will pay interest from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on each Interest Payment Date as specified above, commencing on the Interest Payment Date next succeeding the Original Issue Date shown above and, if applicable, on the Maturity Date. Payments of interest on this Note will include interest accrued from, and including, the immediately preceding Interest Payment Date to which interest has been paid or duly provided for (or from, and including, the Original Issue Date if no interest has been paid or duly provided for) to, but excluding, the applicable Interest Payment Date or the Maturity Date, as the case may be. Interest payments for this Note shall be computed and paid on the basis of a 360-day year consisting of twelve 30-day months.

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

INDIANA GAS COMPANY, INC.

By:

Title:

Dated:

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of
the series designated therein referred
to in the within-mentioned Indenture.

U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee

Authorized Signatory

[REVERSE OF NOTE]

INDIANA GAS COMPANY, INC.

7.45% INSURED QUARTERLY NOTE DUE DECEMBER 16, 2030

This Note is one of a duly authorized series of Securities of the Company issued and to be issued under an Indenture, dated as of February 1, 1991 (as amended by the Second Supplemental Indenture thereto dated as of September 15, 1991, and by the Fifth Supplemental Indenture dated as of December 28, 2000, herein referred to as the "Indenture"), between the Company and U.S. Bank Trust National Association (formerly known as First Trust National Association, which was formerly known as Bank of America Illinois, which was formerly known as Continental Bank, National Association), as trustee (the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities, and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof as "7.45% Insured Quarterly Notes due December 16, 2030" (the "30-Year IQ Notes") in the aggregate principal amount of $_________, subject to the provisions of the Indenture. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture or on the face hereof, as the case may be.

The Company shall have the right, subject to the terms and conditions of the Indenture, to redeem this Note at any time on or after December 15, 2005, at the option of the Company, without premium or penalty, in whole or in part, at a Redemption Price equal to 100% of the principal amount to be redeemed plus any unpaid interest accrued to the date fixed for redemption (the "Redemption Date"), on written notice given to the Holder hereof (in accordance with the provisions of the Indenture) not more than 60 nor less than 30 days prior to the Redemption Date.

In the event of redemption of this Note in part only, a new 30-Year IQ Note or Notes for the unredeemed portion hereof will be issued by the Company in the name of the Holder hereof upon the presentation and surrender hereof. The 30-Year IQ Notes will not have a sinking fund.

If an Event of Default with respect to the 30-Year IQ Notes shall occur and be continuing, the principal of this Note may, and in certain cases shall, be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture. So long as Ambac Assurance is not in default under the Policy, Ambac Assurance shall be entitled to control and direct all rights and remedies with respect to the 30-Year IQ Notes, other than the rights of the Representatives referred to in the preceding paragraph.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register of the Company upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal hereof or interest hereon are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by the Holder hereof or by such Holder's attorney duly authorized in writing, and thereupon one or more new 30-Year IQ Notes, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued by the Company to the designated transferee or transferees. 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 tax or other governmental charge payable in connection therewith.

This Note is 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 therein and herein set forth, this Note is exchangeable for a like aggregate principal amount of 30-Year IQ Notes of different authorized denominations but otherwise having the same terms and provisions, as requested by the Holder hereof surrendering the same.

THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF INDIANA WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM   - as tenants in common              UNIF GIFT
TEN ENT   - as tenants by the entireties      MIN ACT   - _____ Custodian ______
JT TEN    - as joint tenants with right of                (Cust)         (Minor)
            survivorship and not as tenants             Under Uniform Gifts to
            in common                                   Minors Act
                                                        ________________________
                                                            (State)

Additional abbreviations may also be used though not in the above list.

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and

transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR
          OTHER
IDENTIFYING NUMBER OF ASSIGNEE
---------------------- ----------------------

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

(Please print or typewrite name and address including postal zip code of assignee)

this Note and all rights thereunder hereby irrevocably constituting and appointing

Attorney to transfer this Note on the books of the Trustee, with full power of substitution in the premises.

Dated:

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

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

                            Notice:   The   signature(s)   on   this
                            Assignment   must  correspond  with  the
                            name(s) as written upon the face of this
                            Note  in   every   particular,   without
                            alteration or  enlargement or any change
                            whatsoever.

EXHIBIT C

FORM OF REDEMPTION REQUEST

INDIANA GAS COMPANY, INC.

[7.15/7.45]% INSURED QUARTERLY NOTES
due [December 15, 2015/December 16, 2030]
(the "IQ Notes")

CUSIP NO. [454758AL7/454758AM5]

The undersigned, ___________________ (the "Participant"), pursuant to the provisions of that certain Indenture dated as of February 1, 1991, as supplemented, including the Fifth Supplemental Indenture dated as of December ___, 2000 (the "Indenture"), made by Indiana Gas Company, Inc. (the "Company") and U.S. Bank Trust National Association, as Trustee (the "Trustee"), does hereby certify to The Depository Trust Company (the "Depositary"), the Company and the Trustee that:

1. _______________ [Name of deceased Beneficial Owner] is deceased.

2. _______________ [Name of deceased Beneficial Owner] had a $______ interest in the above referenced IQ Notes.

3. _______________[Name of Representative] is _______________
[Beneficial Owner's personal representative/other person authorized to represent the estate of the Beneficial Owner/surviving joint tenant/surviving tenant by the entirety] of _______________ [Name of deceased Beneficial Owner] and has delivered to the undersigned a request for redemption in form satisfactory to the undersigned, requesting that $_______ principal amount of said IQ Notes be redeemed pursuant to said Indenture. The documents accompanying such request, all of which are in proper form, are in all respects satisfactory to the undersigned and the _______________ [Name of Representative] is entitled to have the IQ Notes to which this Request relates redeemed.

4. The Participant holds the interest in the IQ Notes with respect to which this Request for Redemption is being made on behalf of _______________
[Name of deceased Beneficial Owner].

5. The Participant hereby certifies that it will indemnify and hold harmless the Depositary, the Trustee, any paying agent and the Company (including their respective officers, directors, agents, attorneys and employees), against all damages, loss, cost, expense (including reasonable attorneys' and accountants' fees), obligations, claims or liability incurred by the indemnified party or parties as a result of or in connection with the redemption of IQ Notes to which this Redemption Request relates. The Participant will, at the request of the Company, forward to the Company a copy of the documents submitted by _______________ [Name of Representative] in support of the request for redemption.

IN WITNESS WHEREOF, the undersigned has executed this Redemption Request as of _________, _____.

[PARTICIPANT NAME]

By:

Name:
Title: