Exhibit 4.1

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                    SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                                      WITH

                      DEUTSCHE BANK TRUST COMPANY AMERICAS,

                                   as Trustee


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

                             SUPPLEMENTAL INDENTURE


                                 Relating to the

                              FIRST MORTGAGE BONDS


                             Series B 1993 due 2023


                           Dated as of August 1, 2004



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<PAGE>


         SUPPLEMENTAL INDENTURE, dated as of August 1, 2004, between SOUTHERN
INDIANA GAS AND ELECTRIC COMPANY, a corporation organized and existing under the
laws of the State of Indiana (hereinafter called the "Company"), party of the
first part, and DEUTSCHE BANK TRUST COMPANY AMERICAS, a corporation organized
and existing under the laws of the State of New York, formerly known as BANKERS
TRUST COMPANY, as Trustee under the Mortgage hereinafter referred to, party of
the second part.

         WHEREAS, the Company heretofore executed and delivered to Deutsche Bank
Trust Company Americas, formerly known as Bankers Trust Company, as Trustee
(hereinafter called the "Trustee"), a certain Indenture of Mortgage and Deed of
Trust dated as of April 1, 1932, to secure an issue of bonds of the Company,
issued and to be issued in series, from time to time, in the manner and subject
to the conditions set forth in the said Indenture, and the said Indenture has
been amended and supplemented by Supplemental Indentures dated as of August 31,
1936, October 1, 1937, March 22, 1939, July 1, 1948, June 1, 1949, October 1,
1949, January 1, 1951, April 1, 1954, March 1, 1957, October 1, 1965, September
1, 1966, August 1, 1968, May 1, 1970, August 1, 1971, April 1, 1972, October 1,
1973, April 1, 1975, January 15, 1977, April 1, 1978, June 4, 1981, January 20,
1983, November 1, 1983, March 1, 1984, June 1, 1984, November 1, 1984, July 1,
1985, November 1, 1985, June 1, 1986, November 15, 1986, January 15, 1987,
December 15, 1987, December 13, 1990, April 1, 1993, May 1, 1993, June 1, 1993,
July 1, 1999 and March 1, 2000, which Indenture as so amended and supplemented
is hereinafter referred to as the "Mortgage" and as further supplemented by this
Supplemental Indenture is hereinafter referred to as the "Indenture"; and

         WHEREAS, the Mortgage provides that the Company and the Trustee may,
from time to time, enter into such indentures supplemental to the Mortgage as
shall be deemed by them necessary or desirable, to amend the Mortgage or any
supplemental indenture in accordance with Section 108 of the Mortgage; and

         WHEREAS, the Company entered into a Loan Agreement dated as of May 1,
1993, as amended by the First Amendment to Loan Agreement dated as of April 1,
1999 (the "Original Loan Agreement") with Warrick County, Indiana (the "County")
pursuant to which the County issued $22,800,000 aggregate principal amount of
its Adjustable Rate Environmental Improvement Bonds (Southern Indiana Gas and
Electric Company Project) 1993 Series B of which $22,550,000 principal amount is
currently outstanding (the "County Bonds") pursuant to the Indenture of Trust
dated as of May 1, 1993 (the "Original County Indenture"), between the County
and The Bank of New York Trust Company, N.A., as successor to The Citizens
National Bank of Evansville as trustee (the "County Trustee") in order to
provide funds to loan to the Company for the purpose of financing a portion of
the costs of acquiring, constructing and equipping certain solid waste disposal
facilities, and pursuant to such Original Loan Agreement the Company agreed to
issue a series of its bonds under the Original County Indenture in order to
evidence and secure certain of its indebtedness under the Original Loan
Agreement; and

         WHEREAS, the Company and the Trustee entered into the Supplemental
Indenture dated as of May 1, 1993 (the "May 1993 Supplemental Indenture") for
such purposes; and

         WHEREAS, the Company by appropriate corporate action in conformity with
the terms of the Mortgage and pursuant to the May 1993 Supplemental Indenture
created a series of bonds which were issued under the Mortgage in an original
aggregate principal amount of $22,800,000 (of which $22,550,000 principal amount
is currently outstanding) and designated as "First Mortgage Bonds, Series B 1993
due 2023" (hereinafter sometimes referred to as "Bonds of the Thirty-sixth
Series"), which bear interest at the rate per annum set forth in, are subject to
certain optional and mandatory redemption rights and obligations set forth in,
and are otherwise in the form and have the terms and provisions provided for in
the May 1993 Supplemental Indenture and set forth in the form of such bonds in
the May 1993 Supplemental Indenture; and

         WHEREAS, the Company has determined that it would be in its best
interests to (i) add additional methods of determining the interest rate on the
County Bonds, (ii) secure the County Bonds with a financial guaranty insurance
policy (the "Bond Insurance Policy") issued by Ambac Assurance Corporation and
(iii) amend certain provisions of the May 1993 Supplemental Indenture and the
Bonds of the Thirty-sixth Series to allow for the release of such bonds in
certain circumstances; and

         WHEREAS, in connection with the foregoing, it is necessary for the
County to amend the Original County Indenture and the Original Loan Agreement
and for the Company to amend the May 1993 Supplemental Indenture and the Bonds
of the Thirty-sixth Series in order to (i) conform to the changes made to the
interest rate provisions of the Original County Indenture and (ii) permit the
Bonds of the Thirty-sixth Series to cease to secure the Company's obligation
under the Loan Agreement (as hereinafter defined) when substantially all of the
Company's first mortgage bonds are no longer outstanding, except for the Bonds
of the Thirty-sixth Series and any other first mortgage bonds subject to
substantially similar release provisions; and

         WHEREAS, the Company and the Trustee deem it necessary or desirable to
enter into this Supplemental Indenture for such purposes; and

         WHEREAS, the execution and delivery of this Supplemental Indenture are
authorized by Section 108 of the Mortgage and have been consented to by the
registered owner of all of the Bonds of the Thirty-sixth Series;

         NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That Southern
Indiana Gas and Electric Company, in consideration of the premises and of one
dollar to it duly paid by the Trustee at or before the ensealing and delivery of
these presents, the receipt whereof is hereby acknowledged, and of the purchase
and acceptance of the bonds issued or to be issued hereunder by the holders or
registered owners thereof, and in order to secure the payment of the principal,
premium, if any, and interest of all bonds at any time issued and outstanding
under the Indenture, according to their tenor and effect, and the performance of
all of the provisions hereof and of said bonds, hath granted, bargained, sold,
released, conveyed, assigned, transferred, pledged, set over and confirmed and
by these presents doth grant, bargain, sell, release, convey, assign, transfer,
pledge, set over and confirm unto Deutsche Bank Trust Company Americas, formerly
known as Bankers Trust Company, as Trustee, and to its successor or successors
in said trust, and to its and their assigns forever, all the properties of the
Company located in the State of Indiana described in Schedule A (which is
identified by the signature of an officer of each party hereto at the end
thereof) hereto annexed and hereby made a part hereof and does hereby confirm
that the Company will not cause or consent to a partition, either voluntary or
through legal proceedings, of property, whether herein described or heretofore
or hereafter acquired, in which its ownership shall be as a tenant in common,
except as permitted by and in conformity with the provisions of the Indenture
and particularly of Article X thereof.

         And all other property, real, personal and mixed, tangible and
intangible of the character described in the granting clauses of the aforesaid
Indenture of Mortgage and Deed of Trust dated as of April 1, 1933 or in any
indenture supplemental thereto acquired by the Company on or after the date of
the execution and delivery of said Indenture of Mortgage and Deed of Trust
(except any in said Indenture of Mortgage and Deed of Trust or in any indenture
supplemental thereto expressly excepted).

         TOGETHER WITH all and singular the tenements, hereditaments and
appurtenances belonging or in any wise appertaining to the aforesaid property or
any part thereof, with the reversion and reversions, remainder and remainders
and (subject to the provisions of Article X of the Indenture), the tolls, rents,
revenues, issues, earnings, income, product and profits thereof, and all the
estate, right, title, interest and claim whatsoever, at law as well as in
equity, which the Company now has or may hereafter acquire in and to the
aforesaid property and franchises and every part and parcel thereof.

         TO HAVE AND TO HOLD all such properties, real, personal and mixed,
mortgaged, pledged or conveyed by the Company as aforesaid, or intended so to
be, unto the Trustee and its successors and assigns forever.

         IN TRUST, NEVERTHELESS, upon the terms and trusts of the Indenture, for
those who shall hold the bonds and coupons issued and to be issued thereunder,
or any of them, without preference, priority or distinction as to lien of any of
said bonds and coupons over any others thereof by reason of priority in the time
of the issue or negotiation thereof, or otherwise howsoever, subject, however,
to the provisions in reference to extended, transferred or pledged coupons and
claims for interest set forth in the Indenture (and subject to any sinking funds
that may be created for the benefit of any particular series).

         PROVIDED, HOWEVER, and these presents are upon the condition that, if
the Company, its successors or assigns, shall pay or cause to be paid, the
principal of, premium, if any, and interest on said bonds, at the times and in
the manner stipulated therein and herein, and shall keep, perform and observe
all and singular the covenants and promises in said bonds and in the Indenture
expressed to be kept, performed and observed by or on the part of the Company,
then this Supplemental Indenture and the estate and rights hereby granted shall
cease, determine and be void, otherwise to be and remain in full force and
effect.

         IT IS HEREBY COVENANTED, DECLARED AND AGREED, by the Company, that all
such bonds and coupons are to be issued, authenticated and delivered, and that
all property subject or to become subject hereto is to be held, subject to the
further covenants, conditions, uses and trusts in the Indenture set forth, and
the Company, for itself and its successors and assigns, does hereby covenant and
agree to and with the Trustee and its successor or successors in such trust, for
the benefit of those who shall hold said bonds and interest coupons, or any of
them, as follows:


                                     PART I

                                   DEFINITIONS

         All words and terms defined in Part I of the Supplemental Indenture
dated as of May 1, 1993 shall have the same meanings in this Supplemental
Indenture, except that the definitions of "County Indenture" and "Loan
Agreement" are amended in their entirety to read as follows. In addition,
certain words and terms are defined in the preamble of this Supplemental
Indenture.

                  COUNTY INDENTURE:

                  The term "County Indenture," when used in connection with the
                  Bonds of the Thirty-sixth Series, shall mean the Amended and
                  Restated Indenture of Trust, dated as of August 1, 2004, by
                  and between Warrick County, Indiana and The Bank of New York
                  Trust Company, N.A., as successor to The Citizens National
                  Bank of Evansville, as Trustee, and any indenture supplemental
                  thereto or amendatory thereof, pursuant to which the
                  Adjustable Rate Environmental Improvement Revenue Bonds
                  (Southern Indiana Gas and Electric Company Project) 1993
                  Series B are issued and secured.

                  LOAN AGREEMENT:

                  The term "Loan Agreement," when used in connection with the
                  Bonds of the Thirty-sixth Series, shall mean the Loan
                  Agreement dated as of May 1, 1993, as supplemented and amended
                  by the First Amendment to Loan Agreement, dated as of April 1,
                  1999, and the Second Amendment to Loan Agreement dated as of
                  August 1, 2004 between Warrick County, Indiana, and the
                  Company, relating to the Adjustable Rate Environmental
                  Improvement Revenue Bonds (Southern Indiana Gas and Electric
                  Company Project) 1993 Series B, and any and all modifications,
                  amendments and supplements thereof.


                                     PART II

         The form of the definitive registered bonds without coupons of the
Bonds of the Thirty-sixth Series and the Trustee's certificate of authentication
to be borne by such bonds included in the preamble to the May 1993 Supplemental
Indenture are hereby amended in their entirety such that the form of the
definitive registered bonds without coupons of the Bonds of the Thirty-sixth
Series and the Trustee's certificate of authentication to be borne by such bonds
are to be substantially in the following forms, respectively:



           "[FORM OF FULLY REGISTERED BOND OF THE THIRTY-SIXTH SERIES]

                             [FORM OF FACE OF BOND]


                    SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                   FIRST MORTGAGE BOND, SERIES B 1993 DUE 2023

                  No. _________                                 $____________

                  Southern Indiana Gas and Electric Company, a corporation of
                  the State of Indiana (hereinafter called the "Company"), for
                  value received, hereby promises to pay to___________________
                  ______________________________________________________ or
                  registered assigns ____________________________________
                  dollars, on May 1, 2023, subject to prior redemption, at the
                  office or agency of the Company in the Borough of Manhattan,
                  The City of New York, N.Y., in any coin or currency of the
                  United States of America which at the time of payment is legal
                  tender for the payment of public and private debts, and to pay
                  to the registered owner hereof interest thereon at the same
                  rate or rates of interest as the Adjustable Rate Environmental
                  Improvement Revenue Bonds (Southern Indiana Gas and Electric
                  Company Project) 1993 Series B (the "Warrick County Bonds")
                  issued by Warrick County, Indiana (the "County") under the
                  Indenture of Trust, dated as of May 1, 1993, as amended and
                  restated by the Amended and Restated Indenture of Trust dated
                  as of August 1, 2004, and any indenture supplemental thereto
                  or amendatory thereof (the "County Indenture"), between the
                  County and The Bank of New York Trust Company, N.A., as
                  successor to The Citizens National Bank of Evansville, as
                  trustee (the "County Trustee") (as determined in accordance
                  with the County Indenture); provided, however, that in no
                  event shall the rate of interest borne by the bonds of this
                  series exceed 10% per annum. Such interest, in like coin or
                  currency, payable at said office or agency on the same dates
                  as interest on the Warrick County Bonds, or if this bond shall
                  be duly called for redemption, until the redemption date, or
                  if the Company shall default in the payment of the principal
                  hereof, until the Company's obligation to pay principal shall
                  be discharged as provided in the Indenture, is paid until the
                  principal sum is paid in full discharge under the Indenture.

                  The Company has agreed to pay the principal of and interest on
                  the Warrick County Bonds pursuant to a Loan Agreement dated as
                  May 1, 1993, as supplemented and amended by the First
                  Amendment to Loan Agreement dated as of April 1, 1999 and the
                  Second Amendment to Loan Agreement dated as of August 1, 2004
                  (as so amended and as hereinafter supplemented and amended,
                  the "Agreement") between the Company and the County. Pursuant
                  to the Granting Clause of the County Indenture, this bond is
                  issued to the County Trustee to secure any and all obligations
                  of the Company under the Agreement with respect to payment of
                  the County Bonds. Payment of principal of, or interest on, the
                  County Bonds shall constitute payments on this bond as further
                  provided herein and in the Supplemental Indenture dated May 1,
                  1993, as supplemented and amended by the Supplemental
                  Indenture dated as of August 1, 2004 pursuant to which this
                  amended bond has been issued (the "Supplemental Indenture").

                  Upon any payment of the principal of, and interest on, all or
                  any portion of the Warrick County Bonds, whether at maturity
                  or otherwise or upon provision for the payment thereof having
                  been made in accordance with Section 8.01 of the County
                  Indenture, a principal amount of this bond equal to the
                  principal amount of such Warrick County Bonds shall, to the
                  extent of such payment of principal and interest, be deemed
                  paid and the obligation of the Company thereunder to make such
                  payment shall be discharged to such extent and, in the case of
                  the payment of principal, such bonds shall be surrendered to
                  the Company for cancellation as provided in Section 8.02 of
                  the County Indenture. The Trustee (as hereinafter defined) may
                  at any time and all times conclusively assume that the
                  obligation of the Company to make payments under the Agreement
                  with respect to the principal of, and interest on, the Warrick
                  County Bonds, so far as such payments at the time have become
                  due, has been fully satisfied and discharged pursuant to the
                  foregoing sentence unless and until the Trustee shall have
                  received a written notice from the County Trustee signed by
                  one of its officers stating (i) that timely payment of
                  principal of, or interest on, the Warrick County Bonds has not
                  been made, (ii) that the Company is in arrears as to the
                  payments required to be made by it to the County Trustee
                  pursuant to the Agreement, and (iii) the amount of the
                  arrearage.

                  The provisions of this bond are continued on the reverse
                  hereof and such continued provisions shall for all purposes
                  have the same effect as though fully set forth at this place.

                  This bond shall not become obligatory until Deutsche Bank
                  Trust Company Americas, the Trustee under the Mortgage, or its
                  successor thereunder, shall have signed the form of
                  certificate endorsed hereon.

                  IN WITNESS WHEREOF, Southern Indiana Gas and Electric Company
                  has caused this bond to be signed in its name by its President
                  or a Vice President, by his signature or a facsimile thereof,
                  and a facsimile of its corporate seal to be imprinted hereon,
                  attested by its Secretary or an Assistant Secretary, by his
                  signature or a facsimile thereof.

                  Dated:  ______________

                                     SOUTHERN INDIANA GAS AND ELECTRIC COMPANY


                                     By:
                                        --------------------------------------
                                        --------------------------------------
                  Attest:


                  ----------------------------------
                             Secretary

                         [FORM OF TRUSTEE'S CERTIFICATE]

                  This bond is one of the bonds of the series designated
                  therein, described in the within-mentioned Mortgage.

                                       DEUTSCHE BANK TRUST
                                          COMPANY AMERICAS, as
                                          Trustee


                                       By:
                                          ------------------------------------
                                                Authorized Officer
<PAGE>


                                  [FORM OF REVERSE OF BOND]


                          SOUTHERN INDIANA GAS AND ELECTRIC COMPANY

                         FIRST MORTGAGE BOND, SERIES B 1993 DUE 2023

                  This bond is one of an issue of First Mortgage Bonds of the
                  Company, issuable in series, and is one of the series
                  designated in the title hereof, all issued and to be issued
                  under and equally secured (except as to any sinking fund
                  established in accordance with the provisions of the Mortgage
                  hereinafter mentioned for the bonds of any particular series)
                  by an Indenture of Mortgage and Deed of Trust, dated as of
                  April 1, 1932, executed by the Company to Deutsche Bank Trust
                  Company Americas, formerly known as Bankers Trust Company, as
                  Trustee (the "Trustee"), as amended and supplemented by
                  indentures supplemental thereto, including without limitation
                  a Supplemental Indenture dated as of May 1, 1993, as
                  particularly supplemented and amended by a Supplemental
                  Indenture dated as of August 1, 2004, to which Indenture as
                  amended and supplemented (herein referred to as the
                  "Mortgage") reference is made for a description of the
                  property mortgaged and pledged, the nature and extent of the
                  security, the rights of the holders of the bonds in respect
                  thereof and the terms and conditions upon which the bonds are
                  secured.

                  The bonds of this series are issued and to be issued in order
                  to evidence and secure a loan made by the County to the
                  Company pursuant to a Loan Agreement dated as of May 1, 1993,
                  as supplemented and amended. In order to provide moneys to
                  fund such loan, the County has issued the Warrick County Bonds
                  under and pursuant to the County Indenture. Payments made by
                  the Company of principal and interest on the bonds of this
                  series are intended to be sufficient to permit payments of
                  principal and interest to be made on the Warrick County Bonds.
                  Upon certain terms and conditions, moneys held under and
                  pursuant to the County Indenture, including moneys so held
                  from the proceeds of the sale of the Warrick County Bonds or
                  earnings on the investment of such proceeds, or redemption of
                  the Warrick County Bonds shall be credited to or used for the
                  payment of the bonds of this series and to the extent so
                  credited or used shall satisfy a like amount otherwise due
                  hereunder.

                  The bonds of this series are subject to optional and mandatory
                  redemption, in whole or in part, as the case may be, on each
                  date that Warrick County Bonds are to be redeemed. The
                  principal amount of the bonds of this series to be redeemed on
                  any such date shall be equal to the principal amount of
                  Warrick County Bonds called for redemption on that date. All
                  redemptions of bonds of this series shall be at 100% of the
                  principal amount thereof, plus accrued interest to the
                  redemption date.

                  If and whenever the Trustee or the Company is notified that an
                  event of default has occurred and is continuing under Section
                  9.01(e) of the County Indenture, and provided that the
                  principal of all Warrick County Bonds then outstanding and the
                  interest thereon shall have been declared immediately due and
                  payable, then not later than two business days following the
                  occurrence of the foregoing events, the Company shall, upon
                  not less than 30 days' and not more than 45 days' prior
                  written notice given in the manner provided in the Mortgage,
                  call for redemption on a redemption date selected by it not
                  later than 45 days following the date of such notice, all of
                  the Bonds of this series then outstanding, and shall on such
                  redemption date redeem the same at a price equal to 100% of
                  the principal amount thereof, together with accrued interest
                  thereon to the redemption date, except that such requirement
                  or redemption shall be deemed to be waived if, prior to the
                  date fixed for such redemption of the bonds of this series,
                  such event of default is waived or cured.

                  In case a completed default, as defined in the Mortgage, shall
                  occur, the principal of this bond and all other bonds of the
                  Company at any such time outstanding under the Mortgage may be
                  declared or may become due and payable, upon the conditions
                  and in the manner and with the effect provided in the
                  Mortgage. The Mortgage provides that such declaration may in
                  certain events be waived by the holders of a majority in
                  principal amount of the bonds entitled to vote then
                  outstanding.

                  This bond, subject to the limitations with regard thereto
                  contained in the County Indenture, is transferable as
                  prescribed in the Mortgage by the registered owner hereof in
                  person, or by his duly authorized attorney, at the office or
                  agency of the Company in the Borough of Manhattan, The City of
                  New York, N.Y., upon surrender and cancellation of this bond,
                  and thereupon, a new fully registered bond of the same series
                  for a like principal amount will be issued to the transferee
                  in exchange thereof as provided in the Mortgage, and upon
                  payment, if the Company shall require it, of the charges
                  therein prescribed. The Company and the Trustee may deem and
                  treat the person in whose name this bond is registered as the
                  absolute owner for the purpose of receiving payment of or on
                  account of the principal and interest due hereon and for all
                  other purposes.

                  As provided in Section 8.02 of the County Indenture, from and
                  after the Release Date (as defined in the County Indenture),
                  the obligations of the Company with respect to this bond shall
                  be deemed to be satisfied and discharged, this bond shall
                  cease to secure in any manner the Company's obligations under
                  the Agreement with respect to the payment of any County Bonds
                  outstanding under the County Indenture, and, pursuant to
                  Section 8.02 of the County Indenture, the County Trustee shall
                  forthwith deliver this Bond to the Company for cancellation.

                  The Bonds of this series are issuable as registered bonds
                  without coupons in denominations of $1,000 and authorized
                  multiples thereof. In the manner and upon payment of the
                  charges prescribed in the Mortgage, registered bonds without
                  coupons of this series may be exchanged for a like aggregate
                  principal amount of fully registered bonds without coupons of
                  other authorized denominations of the same series, upon
                  presentation and surrender thereof, for cancellation, to the
                  Trustee at its principal corporate trust office in the Borough
                  of Manhattan, The City of New York, N.Y.

                  No recourse shall be had for the payment of the principal of
                  or interest on this bond against any incorporator or any past,
                  present or future subscriber to the capital stock,
                  stockholder, officer or director of the Company or of any
                  predecessor or successor corporation, either directly or
                  through the Company or any predecessor or successor
                  corporation, under any rule of law, statute or constitution or
                  by the enforcement of any assessment or otherwise, all such
                  liability of incorporators, subscribers, stockholders,
                  officers and directors being released by the holder or owner
                  hereof by the acceptance of this bond and being likewise
                  waived and released by the terms of the Mortgage.

                  Pursuant to the Mortgage, the holder or owner of this bond by
                  his acceptance hereof is deemed to have agreed to amendments
                  to the Mortgage which will eventually permit certain
                  amendments to the Mortgage with the consent of the holders of
                  66-2/3% of the principal amount of the outstanding bonds of
                  all series issued under the Mortgage and which redefine,
                  effective at such time as all bonds of each series of bonds
                  issued under the Mortgage prior to January 1, 1977 are no
                  longer outstanding, the amounts required to be spent by the
                  Company under the Mortgage for the repair, maintenance,
                  renewal and replacement of its property.


                                    [END OF FORM OF BOND]"




<PAGE>




                                    PART III

         Part III of the Supplemental Indenture dated as of May 1, 1993 is
hereby amended in its entirety to read as follows:


                                        "PART III

                        DESCRIPTION OF BONDS OF THE THIRTY-SIXTH SERIES

                           Section 1. Bonds of the Thirty-sixth Series shall
                  mature on the date set forth in the form of bond relating
                  hereto hereinbefore set forth, shall bear interest at the rate
                  from time to time borne by the Warrick County Bonds; provided,
                  however, that in no event shall the rate of interest borne by
                  the Bonds of the Thirty-sixth Series exceed 10%. Such
                  interest, payable on the same dates as interest on the Warrick
                  County Bonds, and all bonds of said series shall be designated
                  as hereinbefore in the fifth WHEREAS clause set forth. Both
                  principal of and interest on said bonds shall be payable, to
                  the extent specified in the form of bond hereinabove set
                  forth, in any coin or currency of the United States of America
                  which at the time of payment is legal tender for the payment
                  of public and private debts, at the office or agency of the
                  Company in the Borough of Manhattan, The City of New York,
                  N.Y. Definitive bonds of said series may be issued, originally
                  or otherwise, only as registered bonds without coupons; and
                  they and the Trustee's certificate of authentication shall be
                  substantially in the forms hereinbefore recited, respectively.
                  Definitive registered Bonds of the Thirty-sixth Series may be
                  issued in the denomination of $1,000 and in such other
                  denominations (in multiples of $1,000) as the Board of
                  Directors of the Company shall approve, and execution and
                  delivery to the Trustee for authentication shall be conclusive
                  evidence of such approval. In the manner and upon payment of
                  the charges prescribed in the Indenture, registered bonds
                  without coupons of said series may be exchanged for a like
                  aggregate principal amount of fully registered bonds without
                  coupons of other authorized denominations of the same series,
                  upon presentation and surrender thereof for cancellation to
                  the Trustee at its principal corporate trust office in the
                  Borough of Manhattan, The City of New York, N.Y. However,
                  notwithstanding the provisions of Section 12 of the Indenture,
                  no charge shall be made upon any transfer or exchange of bonds
                  of said series other than for any tax or taxes or other
                  governmental charge required to be paid by the Company. The
                  form of the temporary bonds of said series shall be in
                  substantially the form of the form of registered bond
                  hereinbefore recited with such appropriate changes therein as
                  are required on account of the temporary nature thereof. Said
                  temporary bonds of said series shall be in registered form
                  without coupons, registrable as to principal, and shall be
                  exchangeable for definitive bonds of said series when
                  prepared.

                  The person in whose name any registered bond without coupons
                  of the Thirty-sixth Series is registered at the close of
                  business on any record date (as hereinbelow defined) with
                  respect to any interest payment date shall be entitled to
                  receive the interest payable on such interest payment date
                  notwithstanding the cancellation of such registered bond upon
                  any transfer or exchange thereof subsequent to the record date
                  and prior to such interest payment date, except if and to the
                  extent the Company shall default in the payment of the
                  interest due on such interest payment date, in which case such
                  defaulted interest shall be paid to the person in whose name
                  such bond is registered either at the close of business on the
                  day preceding the date of payment of such defaulted interest
                  or on a subsequent record date for such payment if one shall
                  have been established as hereinafter provided. A subsequent
                  record date may be established by or on behalf of the Company
                  by notice mailed to the holders of bonds not less than ten
                  days preceding such record date, which record date shall be
                  not more than thirty days prior to the subsequent interest
                  payment date. The term "record date" as used in this Section
                  with respect to any regular interest payment date shall mean
                  the Interest Payment Date (as defined in the County
                  Indenture).

                  Except as provided in this Section, every registered bond
                  without coupons of the Thirty-sixth Series shall be dated and
                  shall bear interest as provided in Section 10 of the
                  Indenture; provided, however, that so long as there is no
                  existing default in the payment of interest on the bonds, the
                  holder of any bond authenticated by the Trustee between the
                  record date for any interest payment date and such interest
                  payment date shall not be entitled to the payment of the
                  interest due on such interest payment date and shall have no
                  claim against the Company with respect thereto; and provided,
                  further, that, if and to the extent the Company shall default
                  in the payment of the interest due on such interest payment
                  date, then any such bond shall bear interest from the interest
                  payment date to which interest has been paid.

                  Upon any payment of the principal of and interest on, all or
                  any portion of the Warrick County Bonds, whether at maturity
                  or otherwise or upon provision for the payment thereof having
                  been made in accordance with Section 8.01 of the County
                  Indenture, the Bonds of the Thirty-sixth Series in a principal
                  amount equal to the principal amount of such Warrick County
                  Bonds shall, to the extent of such payment of principal and
                  interest, be deemed paid and the obligation of the Company
                  thereunder to make such payment shall be discharged to such
                  extent and, in the case of the payment of principal, such
                  Bonds of the Thirty-sixth Series shall be surrendered to the
                  Company for cancellation as provided in and subject to the
                  terms of Section 8.02 of the County Indenture. The Trustee may
                  at any time and all times conclusively assume that the
                  obligation of the Company under the Agreement to make payments
                  with respect to the principal of and interest on the County
                  Bonds, so far as such payments at the time have become due,
                  has been fully satisfied and discharged pursuant to the
                  foregoing sentence unless and until the Trustee shall have
                  received a written notice from the County Trustee signed by
                  one of its officers stating (i) the timely payment of
                  principal or interest on the Warrick County Bonds has not been
                  made, (ii) that the Company is in arrears as to the payments
                  required to be made by it to the County Trustee pursuant to
                  the Agreement, and (iii) the amount of the arrearage."


                                     PART IV

         Part IV of the Supplemental Indenture dated as of May 1, 1993 is hereby
amended in its entirety to read as follows:


                                    "PART IV

                              REDEMPTION PROVISIONS

                           Section 1. The Bonds of the Thirty-sixth Series shall
                  be subject to redemption by the Company prior to maturity, in
                  the events and in the manner and at the redemption prices set
                  forth in the form of Bond of such series."


                                     PART V

                                  MISCELLANEOUS

           Section 1. The Company covenants that the provisions of Section 36A
of the Indenture and of Section 1.02 of the Supplemental Indenture dated as of
July 1, 1948, which are to remain in effect so long as any bonds of the series
referred to in said Section shall be outstanding under the Indenture, shall
remain in full force and effect so long as any Bonds of the Thirty-sixth Series
shall be outstanding under the Indenture.

           Section 2. Except as herein otherwise expressly provided, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Supplemental Indenture, other than as
set forth in the Mortgage. The Trustee shall not be responsible for the recitals
herein or in the bonds (except the Trustee's certificate of authentication), all
of which are made by the Company solely.

           Section 3. As supplemented and amended by this Supplemental
Indenture, the Mortgage is in all respects ratified and confirmed, and the
Mortgage and this Supplemental Indenture shall be read, taken and construed as
one and the same instrument.

           Section 4. This Supplemental Indenture may be executed in several
counterparts and all such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.



<PAGE>



         IN WITNESS WHEREOF, SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, party of
the first part hereto, and DEUTSCHE BANK TRUST COMPANY AMERICAS, party of the
second part hereto, have caused these presents to be executed in their
respective names by their respective Presidents or one of their Vice Presidents
or Assistant Vice Presidents and their respective seals to be hereunto affixed
and attested by their respective Secretaries or one of their Assistant
Secretaries or Associates, all as of the day and year first above written.

(SEAL)
                                      SOUTHERN INDIANA GAS AND ELECTRIC COMPANY


                                      By       /s/ Robert L. Goocher
                                       ------------------------------------
                                                   ROBERT L. GOOCHER
                                             Vice President and Treasurer
Attest:


         /s/ Robert Heidorn
-------------------------------------
            ROBERT HEIDORN
  Vice President, General Counsel and
         Assistant Secretary


(SEAL)
                                      DEUTSCHE BANK TRUST COMPANY AMERICAS


                                      By      /s/ Susan Johnson
                                      --------------------------------------
                                                 SUSAN JOHNSON
                                                 Vice President
Attest:


        /s/ Irina Golovashchuk
 ------------------------------------
           IRINA GOLOVASHCHUK
               Associate



<PAGE>



STATE OF INDIANA        )
                        ) SS
COUNTY OF VANDERBURGH   )


         On this 27th day of August, 2004, before me, the undersigned, a notary
public in and for the county and state aforesaid, personally came Robert L.
Goocher, to me known, who being by me duly sworn, did depose and say that he
resides at 67755 River Ridge Drive, Newburgh, Indiana 47630; that he is Vice
President and Treasurer of SOUTHERN INDIANA GAS AND ELECTRIC COMPANY, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of the said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by order of the Board of
Directors of said corporation and that he signed his name thereto by like order;
and the said Robert L. Goocher acknowledged the execution of the foregoing
instrument on behalf of the said corporation as the voluntary act and deed of
the said corporation for the uses and purposes therein set forth.

         IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and
year first above written.



                                                   /s/ Lewana Doyle
                                          ------------------------------------
                                                     Notary Public
(SEAL)

My Commission Expires:     February 12, 2012

My County of Residence is:      Posey
                          -------------------------
                          ----------------------------



<PAGE>



STATE OF NEW YORK     )
                      ) SS
COUNTY OF NEW YORK    )


         On this 27th day of August, 2004, before me, the undersigned, a notary
public in and for the county and state aforesaid, personally came Susan Johnson,
to me known, who being by me duly sworn, did depose and say that she resides at
154 E. 46th Street, Brooklyn, New York 11203; that she is Vice President of
DEUTSCHE BANK TRUST COMPANY AMERICAS, one of the corporations described in and
which executed the foregoing instrument; that she knows the seal of the said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation
and that she signed her name thereto by like order; and the said Susan Johnson
acknowledged the execution of the foregoing instrument on behalf of the said
corporation as the voluntary act and deed of the said corporation for the uses
and purposes therein set forth.

         IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and
year first above written.



                                               /s/ Annie Jaghatspanyan
                                        ---------------------------------------
                                                     Notary Public
(SEAL)


My Commission Expires:          July 30, 2005
                        -----------------------------

My County of Residence is:        Bergen, New Jersey
                           -------------------------------
                             Qualified in New York County


<PAGE>



                                   SCHEDULE A

                  Detailed Description of Additional Properties

                   Real Estate in Vanderburgh County, Indiana

         Part of Lot 10 and part of the land lying with the public right of way
adjoining sand part of Lot 10, all in Vanderburgh Industrial Park, as per plat
thereof, recorded in Plat Book Q, page 79 in the office of the Recorder of
Vanderburgh County, Indiana, and being a subdivision of part of the West Half of
Section 1, Township 5 South, Range 10 West of the Second Principal Meridian,
Scott Township, Vanderburgh County, Indiana.

                       Real Estate in Knox County, Indiana

         The Southeast Half of the Southeast Half of the Northeast Half of
Donation Number Thirteen (13), Township Two (2) North, Range Nine (9) West,
containing 50.5 acres, more or less, EXCEPTING however, 20 acres to be taken in
a strip of equal width off of the Northeast side thereof, leaving after said
exception 30.5 acres, more or less.

         Part of Donation 36 Township 2 North, Ranges 8 and 9 West, Harrison
Township, Knox County, Indiana, and containing 50.52 acres, more or less.






                                             Signed for identification



                                                   /s/ Robert L. Goocher
                                             ----------------------------------
                                             ROBERT L. GOOCHER, Vice President
                                               and Treasurer
                                             SOUTHERN INDIANA GAS AND ELECTRIC
                                               COMPANY





                                                     /s/ Susan Johnson
                                             ----------------------------------
                                             SUSAN JOHNSON, Vice President
                                             DEUTSCHE BANK TRUST COMPANY
                                               AMERICAS



<PAGE>


                         CONSENT OF THE REGISTERED OWNER

         Pursuant to Section 1302 of the Indenture of Trust (the "Indenture")
between Warrick County, Indiana and The Bank of New York Trust Company, N.A.,
successor to The Citizens National Bank of Evansville, as Trustee, dated as of
May 1, 1993, the undersigned as the registered owner of 100% of the First
Mortgage Bonds (as defined in the Indenture) hereby consents to the execution
and delivery of the Supplemental Indenture dated as of August 1, 2004 (the
"Supplemental Indenture") between Southern Indiana Gas and Electric Company and
Deutsche Bank Trust Company Americas, as mortgage trustee and the amendment of
the First Mortgage Bonds as set forth in said Supplemental Indenture.

                                          THE BANK OF NEW YORK TRUST COMPANY,
                                            N.A.



                                          By        /s/ Mark A. Hudson
                                            -----------------------------------
                                               Its      Vice President
                                                  -----------------------------
Date:  September 2, 2004