Exhibit 10.21

                         CONFIDENTIAL PORTIONS OMITTED

                                   AGREEMENT
                             FOR THE SUPPLY OF COAL
                                     BETWEEN
                SOUTHERN INDIANA GAS AND ELECTRIC COMPANY (Buyer)
                                       AND
                          SIGCORP FUELS, INC. (Seller)

                               December 17, 1997


<PAGE>



                                TABLE OF CONTENTS

SECTIONS          HEADINGS                                              PAGE NO.
SECTION 1.        TERM                                                        1
SECTION 2.        QUANTITY, ANNUAL PRICE REVISION, DELIVERIES                 2
SECTION 3.        SOURCE AND DELIVERY                                         3
SECTION 4.        QUALITY                                                     5
SECTION 5.        WEIGHING, SAMPLING AND ANALYSIS                            10
SECTION 6.        PRICE                                                      12
SECTION 7.        INVOICES, BILLING AND PAYMENT                              15
SECTION 8.        FORCE MAJEURE                                              16
SECTION 9.        AUDIT AND INSPECTION                                       20
SECTION 10.       NOTICES                                                    20
SECTION 11.       RIGHT TO USE AND RESELL                                    21
SECTION 12.       LIABILITY                                                  21
SECTION 13.       STATUS AND RELIANCE OF BUYER                               22
SECTION 14.       TERMINATION FOR DEFAULT                                    23
SECTION 15.       CONSTRUCTION OF AGREEMENT                                  23
SECTION 16.       INDEPENDENT CONTRACTOR                                     25
SECTION 17.       PERMITS AND LICENSES                                       26
SECTION 18.       CONFIDENTIALITY                                            26


<PAGE>



     THIS COAL  SUPPLY  AGREEMENT  ("Agreement")  entered  into this 17th day of
December,  1997 by and between  SOUTHERN  INDIANA GAS AND  ELECTRIC  COMPANY,  a
public utility  organized and existing  under the laws of Indiana  ("Buyer") and
SIGCORP FUELS, INC., an Indiana corporation ("Seller").

                              W I T N E S S E T H :

     WHEREAS, Buyer is an electric utility which desires to purchase a supply of
coal of the quality  hereafter  described for use in its  F.B.Culley  Generating
Station at Yankeetown, Warrick County, Indiana, and;

     WHEREAS,  Seller  desires to sell coal  produced by its Cypress Creek Mine,
Warrick County, Indiana, to Buyer and Buyer desires to buy such coal from Seller
for the purposes of and in accordance with the provisions of this Agreement;

     NOW THEREFORE,  in consideration of the mutual covenants  contained herein,
Seller  agrees to sell and  deliver  and Buyer  agrees to  purchase  and  accept
delivery  of coal of the  quality  and  quantity  hereinafter  described  and in
accordance with the terms and conditions set forth herein as follows:

SECTION 1. TERM

     Section 1.1 Term. This Agreement shall commence on January 1, 1998, or upon
Contract filing with the Indiana Utility Regulatory  Commission ("IURC") and the
Federal Energy  Regulatory  Commission  ("FERC") and inaction or approval by the
IURC and FERC,  whichever  occurs  earlier,  and  unless  sooner  terminated  as
provided herein, shall continue until and including December 31, 2002. Buyer and
Seller  acknowledge that the source of coal to be furnished under this Agreement
is a new mine  operation to be  developed  subsequent  to the  execution of this
document.  It is anticipated  that deliveries  will begin  hereunder  during the
fourth  quarter of 1997.  Accordingly,  the initial term of this  Agreement will
include  calendar  years 1998 through 2002 and any portion of 1997 in which coal
is produced by Seller from the Cyprus Creek Mine and  delivered to Buyer.  Buyer
shall have the right,  but not the  obligation,  to renew this  Agreement for an
additional five (5) year period, such right to be exercised by notice in writing
to Seller no later than six (6) months  prior to the  expiration  of the initial
term of this Agreement.

SECTION 2. QUANTITY, ANNUAL PRICE REVISION, DELIVERIES

     Section 2.1 Quantity.

     [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
     EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]

     Section 2.2 Rate of Shipment.

     [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
     EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]

     Section 2.3 Notification.

          (a)  Quarterly  Delivery  Schedule - By November 1 of each year, Buyer
               shall specify by written notice to Seller the monthly  quantities
               to be delivered  in the  following  calendar  year subject to the
               limitation  contained in subparagraph  (b).  Quantities  shall be
               specified on  quarterly  schedules.  Revisions  to any  quarterly
               schedule  shall be made by  Buyer  no  later  than the 1st of the
               month  preceding the start of that quarter.  (Eg, March 1 for the
               second quarter, etc.)

          (b)  Modification  of  Quantity - On or before  November  1, Buyer may
               change the Quantity to be delivered in the following  year within
               a range of +/- 10% of the Quantity specified in Section2.1 above.

SECTION 3. SOURCE AND DELIVERY.

     Section 3.1 Source -

     [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
     EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]

     Section 3.2  Warranties of Operation and Reserves.  Seller  represents  and
warrants that The Mine contains  economically  recoverable coal of a quality and
in quantities  which will be sufficient to satisfy all the  requirements of this
Agreement.  Seller  agrees and warrants  that it is the legal owner of The Mine,
and that it will have or cause to have at The Mine adequate machinery, equipment
and other facilities to produce, prepare and deliver coal in the quantity and of
the quality  required by this  Agreement.  Seller  further agrees to operate and
maintain such machinery, equipment and facilities in accordance with good mining
practices so as to efficiently  and  economically  produce,  prepare and deliver
such coal,  or to contract  therefor.  Seller agrees that Buyer is not providing
any capital for the purchase of such machinery,  equipment and/or facilities and
that Seller  shall  operate and  maintain  same at its sole  expense,  including
Seller's  acquisition  of all  required  permits and  licenses  or Seller  shall
contract  therefor.  Seller  hereby  dedicates to this  Agreement  from The Mine
sufficient  reserves of coal  meeting the  quarterly  delivery  requirement  and
quality specifications provided for herein.

     Section 3.3  Non-Diversion of Coal. Seller agrees and warrants that it will
not, without Buyer's express prior written consent,  use, mine or sell coal from
The Mine in a way that will reduce the economically  recoverable balance of coal
in The Mine to an  amount  less  than  that  required  to be  supplied  to Buyer
hereunder.

     Section 3.4 Truck Delivery,  Title,  Risk of Loss.  Buyer and Seller hereby
select  truck  transportation  as the method of shipment for all coal under this
Agreement.  Coal will be delivered FOB Buyer's F. B. Culley Generating  Station,
and  title  to and  risk of loss of coal  will  pass to  Buyer  when the coal is
unloaded at the Culley Plant and placed on its stockpile (the "Delivery Point").
Seller  will  contract  and pay for  transportation  from  The Mine to the F. B.
Culley Generating Station and unloading from trucks onto Buyer's stockpile.

     Section 3.5 Alternative  Delivery Mode.  Buyer shall be entitled,  upon one
hundred  twenty days (120) days prior notice to Seller,  to change the specified
mode of  delivery  at its option for all or a portion  of the  Quantity.  In the
event any such change will result in an adjustment to Seller's  costs  (increase
or decrease), Seller shall give Buyer prompt written notice thereof, such notice
to include a detailed  statement and  itemization  of such costs,  and Buyer and
Seller shall jointly make an adjustment to the Base Price of coal sold hereunder
if Buyer  agrees to the  adjustment,  otherwise  the mode of delivery  shall not
change.

SECTION 4. QUALITY

     Section   4.1  The  coal   delivered   hereunder   shall   conform  to  the
specifications in Exhibit A attached hereto. The specifications in Exhibit A are
hereby made a part of, are a fundamental basis of this Agreement,  and create an
express  warranty by Seller that the coal shall  conform in every respect to all
specifications.  The  coal  shall  have a top  size of not  larger  than two (2)
inches.  Intermediate sizes shall not be removed. Not more than 35% by weight of
each delivery  shall be less than 1/4 inch in size. The fine content of the coal
shall be that  resulting  from the normal mining and  preparation  sizing of the
coal,  and no fine  screenings  or  slurry  shall be  added.  The coal  shall be
substantially  uniform  in quality  and  physical  appearance  and shall be free
flowing and substantially free from excess water and impurities such as, but not
limited to, rock, bone, wood, slate, earth, or metal.

     Section  4.2  Change  in  Specification.   Seller  may,  with  the  written
permission  of Buyer,  deliver  coal  which does not  conform  to the  foregoing
Section 4.1 and the  specifications in Exhibit A, provided that Buyer shall have
the right to take such reasonable measures and precautions as it deems necessary
to assure itself that any divergence in specifications does not adversely impact
the costs or operation of Buyer's F.B. Culley Generating Station.

     Section 4.3 Rejection.

          (a)  A ("Shipment") is defined as the entire quantity of coal prepared
               for delivery for which  sampling and analysis has been  performed
               pursuant to Section  5.2. A shipment  shall not include more than
               5,000 tons.

          (b)  Seller  shall  notify  Buyer  prior  to  Buyer's  receipt  of any
               shipment if such shipment fails to conform to the  specifications
               in  Exhibit  A.  Buyer  shall  then have the  option to accept or
               reject such  shipment  (a  "Nonconforming  Shipment").  If Seller
               fails to notify Buyer of a Nonconforming Shipment, then Buyer may
               request service at any time or, if the Nonconforming  Shipment of
               coal is burnt,  then Seller  shall pay Buyer all costs,  expenses
               and   damages   therefor,   including,   but  not   limited   to,
               environmental costs, damages and expenses.

          (c)  In the event Buyer  rejects  any  Nonconforming  Shipment,  Buyer
               shall return the coal to Seller or, at Seller's  request,  divert
               such coal to Seller's  designee,  all at Seller's cost. Buyer may
               request  replacement  of the rejected  coal by Seller within five
               (5) working  days with coal at least equal to the  specifications
               in  Section4.1  and  Exhibit A. If Seller  fails to  replace  the
               rejected  coal within five (5)  working  days or the  replacement
               coal is  rejected,  Buyer may  purchase an  equivalent  amount of
               conforming  specification  coal from  another  source in order to
               replace the rejected  coal and Seller shall  reimburse  Buyer for
               any  amount by which the  total  delivered  cost to Buyer of such
               conforming  coal  purchased  from another source exceeds the then
               current delivered cost of coal under this Agreement. Seller shall
               reimburse  Buyer  for  any  and  all  freight  or  transportation
               expenses that it incurs for rejected coal.

          (d)  After  receipt  of  notice  from  Seller of a  shipment,  or upon
               Buyer's own discovery of a Nonconforming Shipment,  Buyer may, by
               notice to  Seller,  voluntarily  elect to accept a  Nonconforming
               Shipment.  If Buyer accepts a Nonconforming  Shipment,  the price
               therefor  shall be reduced by an amount  mutually  agreed upon by
               Buyer and Seller, and the quantity Buyer is obligated to purchase
               from Seller, shall be reduced in each calendar year by the amount
               of any Nonconforming Shipment voluntarily accepted by Buyer.

          (e)  Failure  to Give  Notice - Failure  on the part of Seller to give
               Buyer advance notice of any nonconforming shipment as required in
               (a) above  shall  constitute  a default  within  the  meaning  of
               Section 14 of this Agreement.

     Section 4.4 Suspension and Termination.

          (a)  Buyer may, upon notice in writing,  suspend  future  shipments if
               sampling and analysis  pursuant to Section 5.2 of this  Agreement
               indicates  that a  shipment  of coal  fails  to  meet  any of the
               specifications  in Section  4.1 and in Exhibit A.  Seller  shall,
               within 15 days,  provide Buyer with  reasonable  assurances  that
               subsequent   deliveries   of  coal  shall  meet  or  exceed  such
               specifications. If Seller fails to provide such assurances within
               said 15 day  period,  or  provides  such  assurance  but does not
               correct the  violation(s)  prior to the next  scheduled  shipment
               after  giving  such  assurance,  Buyer  may  on 15  days  notice,
               terminate this Agreement without any cost or penalty to Buyer. If
               Seller   provides   such   assurances   to   Buyer's   reasonable
               satisfaction,  shipments  hereunder  shall resume and any tonnage
               deficiencies  resulting from suspension may be made up by Seller,
               with  Buyer's  approval,  in  accordance  with a mutually  agreed
               schedule. Buyer shall not unreasonably withhold its acceptance of
               Seller's assurances, or delay the resumption of shipments.

          (b)  Notwithstanding  any other  provisions of this Agreement,  if the
               coal  specifications  set forth in Exhibit A are  adjusted at any
               time due to new or revised applicable laws, rules or regulations,
               Seller and Buyer agree to enter into  negotiations  in good faith
               to arrive at a mutually  agreeable price  adjustment  under which
               Seller can  continue to supply coal that  conforms  with such new
               laws, rules or regulations and meets the adjusted specifications.
               The parties shall also negotiate an agreement as to any necessary
               lead time to permit the receipt and  delivery of coal  conforming
               to the new specifications.  If mutually agreeable terms cannot be
               negotiated,  either  party may on not less than thirty (30) days'
               notice, terminate this Agreement.

     Section 4.5 Remedies. Seller shall be responsible for all costs incurred by
Buyer resulting from Seller's  failure to comply with this Agreement.  Buyer, at
its option,  may allow  Seller to supply  replacement  coal at the Base Price as
adjusted  pursuant to Section 6; however,  Buyer may procure coal to replace all
or any part of the  quantity  of coal which  Seller has failed to  deliver.  The
Seller  shall be liable to Buyer for the excess  delivered  cost  occasioned  by
Buyer's  purchase  of  replacement  coal and any other  loss or damage  directly
caused by the Seller's breach of this Agreement.  Buyer may also recover damages
for all losses  sustained as a result of Seller's breach of Agreement based upon
any applicable legal theory, including, but not limited to, environmental costs,
expenses, penalties, losses and damages. Buyer may deduct the excess cost, loss,
or damage from any amount due Seller under this Agreement and, if such amount is
insufficient,  Buyer shall recover the balance due from Seller directly  through
appropriate legal action.

     Remedies  provided under this Agreement shall be cumulative and in addition
to other remedies provided by law or in equity.

SECTION 5. WEIGHING, SAMPLING AND ANALYSIS

     Section 5.1 Weights.  The weight of the coal delivered  hereunder  shall be
determined on a per shipment basis by Buyer on the basis of scale weights at the
generating station unless another method is mutually agreed upon by the parties.
Such  scales  shall be duly  certified  by an  appropriate  testing  agency  and
maintained in an accurate  condition.  Seller shall have the right,  at Seller's
expense and upon reasonable  notice,  to have the scales checked for accuracy at
any reasonable time or frequency. If the scales are found to be inaccurate, over
or under a  tolerance  range of 0.5%,  either  party  shall pay to the other any
amounts owed due to such  inaccuracy for a period not to exceed thirty (30) days
before the time any inaccuracy of scales is determined.

     Section 5.2  Sampling and  Analysis.  The sampling and analysis of the coal
delivered  hereunder  shall be performed  at Seller's  expense at the Mine by an
independent commercial testing laboratory  ("Independent Lab") mutually selected
by Buyer and Seller.  The  results  thereof  shall be accepted  and used for the
quality and  characteristics  of the coal delivered  under this  Agreement.  All
analyses shall be made in accordance with American Society of Testing  Materials
("A.S.T.M.")  or other mutually agreed to  specifications.  Samples for analysis
shall be taken in accordance  with A.S.T.M.  standards,  may be composited,  and
shall be taken with a frequency and  regularity  sufficient to provide  accurate
representative samples of the deliveries made hereunder.

     Each sample shall be divided into 3 parts and put into airtight containers,
properly  labeled  and  sealed.  One  part  shall be used  for  analysis  by the
Independent Lab, one part shall be made available to Buyer as a check sample, if
Buyer in its sole judgment  determines it is necessary,  and one part  ("Referee
Sample") shall be retained for a period of 30 days.  Buyer shall be given timely
and routine copies of all analyses made by the Independent  Lab. Seller will fax
results and relevant  coal quality  information  to Buyer's  designee and to its
Plant Manager, 24 hours prior to shipment. Buyer, on reasonable notice to Seller
shall have the right to have a  representative  present to observe the  sampling
and analysis.  Unless Buyer requests a Referee Sample analysis,  the Independent
Lab  analysis  shall be used to  determine  the  quality  of the coal  delivered
hereunder.

     If any dispute  arises within 30 days of the date of sampling,  the Referee
Sample shall be submitted for analysis to another independent commercial testing
laboratory  ("Second  Lab")  selected by Buyer.  The  analysis of the Second Lab
shall control to the extent provided in this Section.  A dispute shall be deemed
not to exist and the  Independent  Lab analysis  shall  prevail if such analysis
differs  from the  analysis of the Second Lab by an amount equal to or less than
any of the following ("as received"):

     [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
     EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]


SECTION 6. PRICE

     Section 6.1 Price.

     [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
     EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]

     Section 6.2 Revised Renewal Period Price.

     [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
     EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]

     Section 6.3 Diesel Fuel Price Adjustment.

     [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
     EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]

     Section 6.4 Government Impositions.

     [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
     EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]

SECTION 7.        INVOICES, BILLING AND PAYMENT

     Section 7.1 Invoice  Procedures  for Coal  Shipments.  Seller shall invoice
Buyer  twice each month at the current  Base Price for all coal  unloaded in the
previous calendar half-month.

     Section  7.2  Payment  Procedures  for  Coal  Shipments.  Payment  for coal
unloaded  shall be mailed  within 15 days  after  receipt of invoice in form and
detail  satisfactory to Buyer. Buyer shall mail all payments to Seller's account
as directed by Seller.

     Section  7.3  Withholding.  Buyer  shall  have the right to  withhold  from
payment of any billing or  billings  the amount of any sums which it is not able
in good faith to verify or which it otherwise in good faith disputes, such right
to withhold to continue  for the duration of the dispute or inability to verify.
Buyer shall  notify  Seller  promptly in writing of any such issue,  stating the
basis of its claim and the amount it intends to withhold,  and the parties agree
to review the matter in detail  within ten (10) days after  Seller's  receipt of
such  notice.  In the event and to the extent that any  dispute or  verification
issue is resolved in Seller's  favor,  Seller shall add the unpaid amount to the
next invoice,  plus interest at the prime rate of borrowed funds as published in
the most recently  published  edition of the Wall Street  Journal for the period
between  the date on which the  amount  would  normally  be paid and the  actual
payment  date,  and Buyer  shall pay such extra  amount in  accordance  with the
procedures  hereof.  In  the  event  and to  the  extent  that  any  dispute  or
verification  issue is resolved in Buyer's favor,  Seller shall promptly issue a
credit memorandum covering the amount in question.

     Payment by Buyer, whether knowing or inadvertent,  of any amount in dispute
shall not be deemed a waiver of any  claims or rights by Buyer  with  respect to
any disputed amounts or payments made.

SECTION 8. FORCE MAJEURE

     Section 8.1 Events of Force  Majeure.  Performance  of the  obligations  of
either party hereto except as to any  obligation by either party to make payment
to the other  shall be  excused  to the  extent  prevented  by an event of Force
Majeure.  As used herein,  an event of Force  Majeure  shall mean an act of God;
strike,  lockout or other labor dispute;  sabotage;  fire;  flood;  war; riot or
insurrection;  explosion;  accident;  embargo;  blockade;  inability  to  secure
supplies,  fuel,  power,  governmental  authorization or permit;  unscheduled or
forced outages at the generating  station (see Section 8.5 below);  breakdown of
or damage to  machinery,  plants  or  equipment;  interruption  or  shortage  of
transportation arrangements or equipment;  regulation,  rule, law, order, act or
restraint of any civil or military authority; or any other event, whether of the
kind herein enumerated or otherwise, which is beyond the control and without the
fault or negligence of the party affected  thereby and which wholly or partially
prevents,  interrupts or delays  performance  hereunder.  An event is beyond the
control of a party if it cannot be  prevented or  eliminated  by the exercise of
due diligence or its prevention or elimination  would be accomplished only at an
excessive or unreasonable cost.

     The party  claiming  excuse  hereunder  shall give the other  party  prompt
notice of such event. As used herein,  the term "Seller" shall include any party
mining, preparing, hauling, loading or transporting coal to Seller for resale to
Buyer under this Agreement.  The party  experiencing the Force Majeure shall use
its best efforts to remedy the Force Majeure as soon as practicable.

     Section 8.2 Notice and Suspension. If because of Force Majeure either Buyer
or Seller is unable to carry out its  obligations  under  this  Agreement,  such
party shall  promptly give the other party written  notice of the Force Majeure,
whereupon the  obligations  and  liabilities of the party giving such notice and
the  corresponding  obligations  of the other  party shall be  suspended  to the
extent made necessary by and during the continuance of such Force Majeure.

     Subject  to the  provisions  of this  Section if (a) a  condition  of Force
Majeure  occurs,  (b) mutual  obligations  are suspended as  contemplated by the
paragraph  next  hereinabove,  (c) such  condition  (alone or  extended by other
conditions of Force  Majeure)  continues so that the mutual  obligations  remain
suspended  for a period of six months,  and (d) at the end of said six months or
at any time  thereafter  either party,  in the exercise of reasonable  judgment,
concludes  that  there  is no  likelihood  of  ending  the  condition(s)  in the
immediate  future,  then  either  party may  terminate  this  Agreement  without
liability  to the other party by giving to the other 90 days'  notice in writing
of its intention to terminate.

     Section 8.3 Deficiencies in Shipments. In the event Seller is prevented, in
whole or in part, from  producing,  processing or shipping coal hereunder due to
Force Majeure, deficiencies in shipments so resulting may be added to subsequent
shipments of like coal,  but only if Seller is requested to do so by Buyer,  and
then pursuant to a reasonable schedule provided to Seller by Buyer.

     Section 8.4 Environmental Force Majeure. The parties recognize that, during
the  continuance  of this  Agreement,  legislative  or regulatory  bodies or the
courts may adopt laws, regulations, policies and/or restrictions relating to air
pollution  or other  environmental  matters  which  will make it  impossible  or
commercially  impracticable  for Buyer to utilize  this or like kind and quality
coal  which  thereafter  would be  delivered  hereunder.  If as a result  of the
adoption of such laws, regulations,  policies, or restrictions, or change in the
interpretation or enforcement thereof,  Buyer decides that it will be impossible
or  commercially  impracticable  (uneconomical)  for Buyer to utilize such coal,
Buyer shall so notify  Seller,  and  thereupon  Buyer and Seller shall  promptly
consider whether  corrective  actions can be taken in the mining and preparation
of the coal at Seller's mine and/or in the handling and  utilization of the coal
at Buyer's generating station; and if in Buyer's judgment such actions will not,
without  unreasonable  expense  to  Buyer,  make it  possible  and  commercially
practicable  for Buyer to so utilize  coal which  thereafter  would be delivered
hereunder  without  violating any applicable law,  regulation,  policy or order,
Buyer shall have the right,  upon the later of 60 days'  notice to Seller or the
effective date of such restriction,  to terminate this Agreement without further
obligation  hereunder on the part of either party.  Any expense  contemplated by
this  Section  shall  be  deemed   unreasonable   and  the   alternative   under
consideration shall thereby be deemed impossible or commercially  impracticable,
if it would result in a total cost to Buyer (including the cost of any equipment
amortized over its useful life),  in using Seller's coal, in excess of the total
cost of  using  competitive  fuels  including,  without  limitation,  coal  from
alternative  sources which are then reasonably  available to Buyer and which can
be utilized in conformity with all such restrictions  (including the cost of any
addition or modification to Buyer's  generating  station necessary to permit the
delivery and  utilization  of such fuel).  The cost of using such fuels over the
remainder of the term of this Agreement,  including anticipated increases in the
price of such  other  fuel and of any  required  modifications,  adjustments  or
additions to Buyer's  generating  station,  shall be considered  for purposes of
this  Section.  Buyer's  decisions and opinions with respect to this Section 8.4
shall be final and not subject to question or dispute by Seller.

     Section 8.5  Redirection of Coal.  Notwithstanding  any other  provision of
this section, Buyer will have the absolute right and discretion, but in no event
any  obligation,  during any period of Force Majeure,  to redirect  shipments of
coal delivered under this Agreement to any of its generating stations,  provided
that Buyer  agrees to  reimburse  Seller for any  additional  transportation  or
handling costs that are incurred by Seller to effect such redirected deliveries.

SECTION 9. AUDIT AND INSPECTION

     Buyer  shall have the right to inspect,  review,  and audit (or to have its
representatives  inspect, review, and audit) at any time during regular business
hours,  and upon  reasonable  notice so as not to disrupt  any part of  Seller's
operations,   including,   without  limitation  the  source  of  Seller's  coal,
management, and/or processes by which coal is mined, handled, processed, hauled,
sampled, analyzed and loaded hereunder.

     Buyer shall maintain,  and cause its representatives to maintain,  all data
and information  discovered pursuant to this Section in confidence except to the
extent that disclosure thereof may be required by law.

SECTION 10. NOTICES

     Section  10.1 Form and Place of Notice.  Any official  notice,  request for
approval or other document required to be given under this Agreement shall be in
writing,  unless  otherwise  provided  herein,  and shall be deemed to have been
sufficiently given if delivered in person,  transmitted by telegraph,  telex, or
telecopier,  or  dispatched  in the United  States mail,  postage  prepaid,  for
mailing by first class,  certified, or registered mail, return receipt requested
and addressed as follows:

         If to Seller:
                  President
                  SIGCORP Fuels, Inc.
                  20 N.W. Fourth Street
                  Evansville, IN  47741

         If to Buyer:
                  President
                  Southern Indiana Gas and Electric Company
                  20 N. W. Fourth Street
                  Evansville, Indiana 47741


     Section  10.2  Change of Person or  Address.  Either  party may  change the
person or address  specified above upon giving notice to the other party of such
change.

SECTION 11. RIGHTS TO USE AND RESELL

     Buyer  shall  have the  unqualified  right to resell all or any of the coal
purchased under this  Agreement,  and to use any and all such coal in any of its
generating  stations  including the transfer  from one plant to another,  all in
it's absolute discretion, provided that Buyer agrees to reimburse Seller for any
additional  transportation  or handling  costs incurred by Seller to effect such
deliveries.

SECTION 12. LIABILITY

     Section  12.1  Indemnity - Seller  agrees to  indemnify  and save  harmless
Buyer,  its  officers,   directors,   employees  and  representatives  from  any
responsibility and liability for any and all claims,  demands, losses (including
reasonable  attorney's fees) arising out of or resulting from any failure of the
coal  sold  hereunder  to  comply  with any  laws,  regulations  or  ordinances,
including,  without limitation,  any laws, regulations or ordinances relating to
air quality or emissions standards,  or which otherwise arise out of the acts or
omissions of Seller in the performance of this Agreement.  Seller further agrees
to indemnify,  defend and hold Buyer and its agents and employees  harmless from
any claims, demands or liability of any kind or nature for injuries or damage to
any person or property  arising out of or resulting from the  performance of the
Agreement.

     Section  12.2  Consequential  Damages - In no event shall  either  party be
liable  to the  other  or to any  third  party  for  any  indirect,  special  or
consequential  damages  including,  without  limitation,  those based on loss of
revenue,  profit or  business  opportunity,  whether or not either  party had or
should have had any knowledge,  actual or constructive,  that such damages might
be incurred.

SECTION 13. STATUS AND RELIANCE OF BUYER

     Seller  recognizes  that Buyer is a public  utility  which has power  sales
contracts  with other  utilities  and provides  electrical  service to customers
within the State of Indiana.  Throughout this Agreement Buyer, its customers and
such  other  utilities  will  be  relying  on  the  continued  operation  of the
generating  station as a source of electricity  for their various needs.  Seller
further  acknowledges  that  an  adequate  and  continuous  fuel  supply  to the
generating station, at prices reasonably in conformity to then prevailing market
prices for coal comparable in quality to that sold  hereunder,  are essential to
Buyer's  ability to provide  electricity  and services at affordable  rates.  By
signing  this  Agreement  Buyer is  placing  reliance  upon  Seller to furnish a
significant portion of its fuel supply at competitive prices.  Seller agrees, in
meeting its obligations  hereunder,  to give due consideration to the status and
reliance of Buyer and Buyer's customers.

SECTION 14. TERMINATION FOR DEFAULT

     In the event of the  failure of either  party to comply  with any  material
obligation  of this  Agreement,  either  party shall have the right to terminate
this Agreement at any time by giving to the other 120 days' notice in writing of
its intention to do so, specifying the default  complained of. At the expiration
of said 120 days, unless the party in default shall have made good such default,
the party not in default shall have the right at its election to terminate  this
Agreement forthwith.

     This right shall be in addition to the rights  provided to either  party in
other portions of this Agreement and by law, or in equity.

SECTION 15. CONSTRUCTION OF AGREEMENT

     Section 15.1  Applicable Law. This Agreement shall be deemed to be executed
in the State of Indiana and shall be interpreted  and enforced  according to the
laws of the State of Indiana.

     Only the courts in the State of Indiana shall have  jurisdiction  over this
Agreement and any controversies arising out of the Agreement.  Any controversies
arising out of this Agreement shall be submitted only to the courts of the State
of Indiana.

     Seller  hereby  submits to the  jurisdiction  of the courts in the State of
Indiana for the purposes of interpretation and enforcement of this Agreement.

     Section 15.2 Headings.  The paragraph  headings appearing in this Agreement
are for convenience only and shall not affect the meaning or  interpretation  of
the Agreement.

     Section  15.3  Waiver.  The  failure  of  either  party to insist on strict
performance  of any  provision of this  Agreement,  or to take  advantage of any
rights hereunder, shall not be construed as a waiver of such provision or right.

     Section 15.4 Remedies  Cumulative.  Remedies  provided under this Agreement
shall be cumulative and in addition to other remedies provided by law.

     Section 15.5  Severability.  If any  provision  of this  Agreement is found
contrary to law or unenforceable  by any court of law, the remaining  provisions
shall be severable and enforceable in accordance  with their terms,  unless such
unlawful or unenforceable provision is material to the transactions contemplated
hereby,  in which case the parties  shall  negotiate  in good faith a substitute
provision.

     Section 15.6 Binding  Effect.  This  Agreement  shall bind and inure to the
benefit of the parties and their successors and assigns.

     Section 15.7  Assignment.  Neither  party may assign this  Agreement or any
rights or obligations  hereunder  without the prior written consent of the other
party,  which consent shall not be  unreasonably  withheld or denied;  provided,
however,  that Buyer shall have the right,  without consent of Seller, to assign
all or any part of this Agreement to any company, controlling, controlled by, or
under common control with Buyer.

     Section  15.8  Entire  Agreement.   This  instrument  contains  the  entire
Agreement  between  the  parties  as to coal  produced  and  sold  from the Coal
Property, and there are no representations,  understandings or agreements,  oral
or written, which are not included herein.

     Section  15.9  Amendments.   Except  as  otherwise  provided  herein,  this
Agreement  may not be amended,  supplemented  or  otherwise  modified  except by
written instrument signed by parties hereto.

SECTION 16. INDEPENDENT CONTRACTOR

     Seller shall be an  independent  contractor  with respect to the work to be
performed hereunder. Neither Seller nor its subcontractors, nor the employees of
either, shall be deemed to be the servants, employees or agents of Buyer.

SECTION 17. PERMITS AND LICENSES

     Both parties shall, at their own expense,  obtain any necessary permits and
licenses in connection  with the  performance  of their work,  unless  otherwise
specified in this Agreement, and shall be responsible for conducting the work in
accordance with the provisions of such permits and licenses.

SECTION 18. CONFIDENTIALITY

     Subject to Buyer's  obligations  of disclosure to AMAX Coal Company under a
pre-existing  agreement,  Seller and Buyer  agree to retain in  confidence  this
Agreement  and  any  information   obtained  as  a  result  of  negotiation  and
performance  of this  Agreement  which either party  identifies  to the other as
being  proprietary in nature.  It is agreed and understood,  however,  that such
information may be disclosed when requested by a court or government  agency, to
consultants  or  subcontractors  of either of the  parties  subject  to the same
conditions of  confidentiality  as provided herein, or as otherwise  provided by
law, regulation, or administrative requirement.
<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed as of the date first above written.

                                   SOUTHERN INDIANA GAS AND ELECTRIC
                                   COMPANY

                                   By: /s/ Ronald Jochum
                                       -----------------------------------------
                                       Ronald Jochum

                                   Its: Vice President, Power Supply for SIGECO

ATTEST:

/s/ Susan Fester
-------------------
Susan Fester

                                   SIGCORP FUELS, INC.

                                   By: /s/ Kent Stump
                                       -----------------------------------------
                                       Kent Stump

                                   Its: President

ATTEST:

/s/ Kimberly Snow
-------------------
Kimberly Snow
<PAGE>


                                    EXHIBIT A

                               SIGCORP FUELS, INC.



                               COAL SPECIFICATIONS



   [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
     EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.]