Exhibit 10.11


                                                                       EXECUTION

                              REMARKETING AGREEMENT

     This REMARKETING  AGREEMENT dated as of June 15, 2001 between  INDIANAPOLIS
POWER & LIGHT  COMPANY (the  "Company")  and J.P.  MORGAN  SECURITIES  INC. (the
"Remarketing Agent"),

                                   WITNESSETH:

     WHEREAS,  pursuant to an  Indenture  of Trust dated as of September 1, 1999
(the  "Indenture")  between  the  Indiana  Development  Finance  Authority  (the
"Issuer") and National  City Bank of Indiana,  as trustee (the  "Trustee"),  the
Issuer has issued its Exempt  Facilities  Revenue  Refunding Bonds,  Series 1999
(Indianapolis  Power & Light  Company  Project)  (the  "Bonds") in the aggregate
principal   amount  of  $23,500,000,   of  which  amount   $17,350,000   remains
outstanding; and

     WHEREAS,  the  Indenture  provides that the owners of the Bonds (other than
Auction  Rate Bonds) will be entitled to have their Bonds  purchased as provided
therein; and

     WHEREAS,  the Company believes that it is in its best interest to provide a
mechanism  for the  remarketing  of any  Bonds  tendered  for  purchase  and for
determining  each Daily Rate,  Weekly Rate,  Commercial Paper Rate and Long-Term
Interest Rate and each Commercial Paper Period as provided in the Indenture; and

     WHEREAS,  the  Remarketing  Agent is  willing  to use its best  efforts  to
remarket  any Bonds so  tendered  upon the terms and  subject to the  conditions
contained  herein and in the Indenture and to determine each Daily Rate,  Weekly
Rate,  Commercial  Paper Rate and Long-Term  Interest  Rate and each  Commercial
Paper Period as provided herein and in the Indenture;

     WHEREAS,  the Company  originally  designated A.G.  Edwards & Sons, Inc. to
serve as Remarketing  Agent and the Company now wishes to designate J.P.  Morgan
Securities  Inc.  as  Remarketing  Agent,  effective  as of  the  date  of  this
Remarketing Agreement.

     NOW,  THEREFORE,  in consideration of the premises and the mutual covenants
hereinafter contained the parties hereto hereby agree as follows:

     1.  Definitions.  All  capitalized  terms used  herein that are not defined
herein shall have the meanings given to them in the Indenture unless the context
clearly indicates otherwise and, in addition, the following terms shall have the
meanings set forth below:

     "Execution  Date"  shall  mean the date of  execution  of this  Remarketing
Agreement by the parties.

     "1933 Act" shall mean the Securities Act of 1933, as amended.

     "1934 Act" shall mean the Securities Exchange Act of 1934, as amended.

     "1939 Act" shall mean the Trust Indenture Act of 1939, as amended.

     "Official  Statement" shall mean the Official  Statement dated September 9,
1999,  with  respect  to the Bonds,  as the same may be amended or  supplemented
pursuant to Section 8 hereof.

     "Performance Date" shall have the meaning set forth in Section 6 hereof.

     "Purchase  Date" shall mean any date on which Bonds are subject to purchase
pursuant to the Indenture.

     "Remarketing Agreement" shall mean this Remarketing Agreement,  dated as of
June 15, 2001, between the Company and the Remarketing Agent.

     2.  Representations  of the Company.  The Company hereby  represents to the
Remarketing Agent that:

          (a) The  Company has all  requisite  power and  authority  to execute,
     deliver and perform all of its obligations under this Remarketing Agreement
     and to consummate the transactions contemplated hereby.


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          (b) The  execution,  delivery and  performance  by the Company of this
     Remarketing  Agreement has been duly authorized by all necessary action and
     do not and will not (i) violate any provision of any law, rule, regulation,
     order, writ, judgment, injunction, decree, determination or award currently
     in effect having  applicability to the Company,  (ii) result in a breach of
     or constitute a default under any indenture or loan or credit  agreement or
     any other agreement, lease or instrument to which the Company is a party or
     by which its assets or properties  may be bound or affected or (iii) result
     in or require  the  creation  or  imposition  of any lien,  charge or other
     encumbrance  upon or with  respect to any of the assets or  properties  now
     owned or hereafter acquired by the Company.

          (c) No consent,  approval or other action by or any registration with,
     notice to or filing  with any  person  or any  court or  administrative  or
     governmental body is or will be necessary for the valid execution, delivery
     or performance  by the Company of this  Remarketing  Agreement,  other than
     such consents and approvals that have  heretofore  been obtained,  provided
     that  no  representation  is made  with  respect  to  compliance  with  the
     securities or blue sky laws of the various states of the United States.

          (d) This  Remarketing  Agreement  constitutes  the  legal,  valid  and
     binding  obligation  of the  Company  enforceable  against  the  Company in
     accordance  with  its  terms,   subject  to  the  qualifications  that  (i)
     enforceability of this Remarketing  Agreement may be limited by bankruptcy,
     insolvency, reorganization,  moratorium or similar laws now or hereafter in
     effect generally affecting creditors' rights and (ii) enforceability of the
     indemnification provisions contained in Section 11(a) hereof may be limited
     by  principles of public  policy  inherent in federal and state  securities
     laws.

          (e)  Nothing  herein or in any  certificate,  notice or other  written
     information  furnished or to be furnished by the Company in connection with
     this Remarketing Agreement contains or will contain any untrue statement of
     a material  fact, or omits or will omit to state a material fact  necessary
     to make the statements  therein,  in the light of the  circumstances  under
     which they were made, not misleading.

     3.  Representations  of the Remarketing Agent. The Remarketing Agent hereby
represents to the Company that the Remarketing Agent is qualified and authorized
to perform all of the duties imposed on it hereunder and under the Indenture and
agrees to abide by all of the provisions of the Indenture  insofar as it governs
its activities as Remarketing Agent for the Bonds.

     4. Covenants of the Company. The Company covenants to the Remarketing Agent
that:

          (a) The Company shall  cooperate  fully in providing  the  Remarketing
     Agent, and any prospective purchaser of any Bond or Bonds designated by the
     Remarketing Agent, with such information as may be reasonably  requested by
     the Remarketing Agent and/or such prospective  purchaser in connection with
     the remarketing of any Bond or Bonds hereunder.

          (b) The Company shall give the Remarketing Agent written notice of (i)
     each  rating  or change  in the  status  of any  rating of the Bonds by any
     national rating agency,  (ii) each mandatory  tender or call for redemption
     of one or more of the Bonds,  and (iii)  each  amendment,  modification  or
     supplement  to the  Indenture,  the  Loan  Agreement  or the  Reimbursement
     Agreement, if any.

          (c) Upon the request of the Remarketing  Agent, which may be made from
     time to time,  the Company shall  cooperate with the  Remarketing  Agent to
     cause the Bonds to qualify for offer and sale under the blue sky laws or to
     qualify  for  investment  under  the  laws  of  such  jurisdictions  as the
     Remarketing  Agent may  designate  and the Company  will  promptly  pay, or
     reimburse  if  paid by the  Remarketing  Agent,  all  reasonable  fees  and
     disbursements  of counsel for the Remarketing  Agent and all other expenses
     and  filing  fees in  connection  therewith;  provided,  however,  that the
     Company  shall not be required  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  they  are not so  qualified  or to  subject
     themselves to taxation in any  jurisdiction in which they are not otherwise
     subject to taxation.

     5.  Duties of the  Remarketing  Agent.  (a) The  Remarketing  Agent  hereby


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accepts  and agrees to perform  the duties and  obligations  imposed  upon it as
Remarketing  Agent under the  Indenture  and  hereunder  and agrees to keep such
books and records  relating thereto as shall be consistent with prudent industry
practice  and to make such books and records  available  for  inspection  by the
Issuer, the Trustee and the Company upon request.  Each Daily Rate, Weekly Rate,
Commercial  Paper Rate and  Long-Term  Interest Rate and each  Commercial  Paper
Period  shall  be  determined  by  the  Remarketing  Agent  as  provided  in the
Indenture.

          (b) Upon  receipt of written  notice  from the  Trustee of an Event of
Default under the Indenture, the Remarketing Agent shall not remarket or use any
efforts to remarket any Bonds.

          (c) The  Remarketing  Agent  shall  hold all  moneys  delivered  to it
hereunder or under the  Indenture  for the purchase of Bonds as agent and bailee
of, and in escrow for the exclusive benefit of, the Bondholder who shall have so
delivered such monies until the Bonds purchased with such monies shall have been
delivered to or for the account of such Bondholder.

          (d) During an Auction Rate Period, the Remarketing Agent shall approve
(which   approval   shall  not  be   unreasonably   withheld)   any   additional
Broker-Dealers selected by the Company.

     6. Conditions  Precedent to the Obligations of the Remarketing  Agent.  The
obligations  of the  Remarketing  Agent  to  offer  for sale and to use its best
efforts to sell any Bond or Bonds hereunder shall be subject (i) to the accuracy
in all material  respects of the  representations  and warranties of the Company
contained  herein as of the date  hereof  and as of each and every date on which
the  Remarketing  Agent shall offer for sale or use its best efforts to sell any
Bond or Bonds hereunder (each such date being a "Performance Date"), (ii) to the
performance  by the  Company  of its  obligations  hereunder  and  (iii)  to the
following conditions:

          (a)  At  each  Performance  Date,  this  Remarketing  Agreement,   the
     Indenture  and the Loan  Agreement  shall be in full force and effect,  and
     shall not have been amended,  modified or supplemented  since the Execution
     Date  except  for  any  amendment,   modification  or  supplement  made  in
     accordance with their terms and of which the Remarketing Agent has received
     written notice prior to such Performance Date.

          (b) Interest on the Bonds shall not be  includable in the gross income
     of the owners  thereof for federal  income tax  purposes;  no  registration
     under the 1933 Act shall be required in connection  with the remarketing of
     the Bonds in accordance  with the terms hereof;  and the Indenture shall be
     exempt from qualification pursuant to the 1939 Act.

          (c) No Event of  Default  under the  Indenture  or event  which,  with
     notice or lapse of time,  or both,  would  constitute  an Event of Default,
     shall have occurred and be continuing.

          (d) The  Bonds  that have  been  tendered  for  purchase  pursuant  to
     optional or mandatory  tender and would otherwise be subject to remarketing
     shall not have been called for redemption pursuant to the Indenture.

          (e)  None  of  the  following   events  shall  have  occurred  and  be
     continuing:

               (i) the United  States shall have become  engaged in  hostilities
          which have resulted in a declaration of war or a national emergency or
          there shall have  occurred any other  outbreak,  calamity or crisis on
          the  financial  markets  of the  United  States  being such as, in the
          reasonable  opinion of the  Remarketing  Agent,  would  materially and
          adversely  affect the ability of the  Remarketing  Agent to market the
          Bonds; or

               (ii) there shall have occurred a general suspension of trading on
          the New York Stock Exchange or the  declaration  of a general  banking
          moratorium by the United States, the State of New York or the State of
          Indiana.

          (f) Prior to each  Purchase Date the  Remarketing  Agent shall receive
     such further information, certificates and documents as it shall reasonably
     request.

          (g)  There  shall  have  been no  adverse  change  in the  properties,


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     business,  condition  (financial  or otherwise) or results of operations of
     the Company  since the date of the  Official  Statement  or the most recent
     amendment  or  supplement  thereto  that is  material  to the  transactions
     contemplated by the Official Statement and this Remarketing Agreement.

     7. Fees of the Remarketing Agent. (a) Except during an Auction Rate Period,
in consideration of the services to be performed by the Remarketing  Agent under
this Remarketing  Agreement,  the Company agrees to pay to the Remarketing Agent
such  amounts as are required to reimburse  for or pay the  reasonable  expenses
incurred (including,  without limitation,  the reasonable fees and disbursements
of its  counsel,  and the  expenses  and  costs  of the  preparation,  printing,
photocopying,  execution and delivery of an amendment or supplement,  if any, to
the Official  Statement),  advances made  (including,  without  limitation,  the
advancement  of immediately  available  funds even though  remarketing  proceeds
received by the Remarketing  Agent may be next day funds) and  compensation  for
services  rendered  pursuant to the Indenture or this  Remarketing  Agreement as
described below.

          (b) The  Remarketing  Agent shall  receive no  compensation  during an
Auction Rate Period.  While the Bonds bear interest at a Daily Rate, Weekly Rate
or  Commercial  Paper Rate,  the Company  shall pay the  Remarketing  Agent,  as
compensation for its services  hereunder,  (i) an annual amount as may be agreed
upon  from  time to time by the  Company  and  the  Remarketing  Agent,  payable
quarterly  in arrears on January 1, April 1, July 1 and  October 1 of each year,
and (ii) a pro rata portion of such annual fee in respect of any period prior to
the date on which  the  interest  rate on the  Bonds  shall  be  converted  to a
Long-Term Interest Rate or the date on which this Remarketing Agreement shall be
terminated  pursuant  to the  provisions  of  Section  12 hereof  (whichever  is
earlier),  payable on the effective date of such  conversion or the date of such
termination.  In connection with (a) each  establishment of a Long-Term Interest
Rate and during a Long-Term  Interest Rate Period and (b) each conversion of the
Bonds from a Long-Term  Interest Rate to a Daily Rate, Weekly Rate or Commercial
Paper Rate, the Company shall pay the  Remarketing  Agent for services  rendered
hereunder such amounts, payable at such times, as may be mutually agreed upon by
the  Company  and the  Remarketing  Agent  no  later  than 30 days  prior to the
effective date of such  Long-Term Rate Period or conversion and shall  reimburse
the Remarketing Agent for its costs of document preparation, its costs of funds,
its reasonable counsel fees and other out-of-pocket  expenses in connection with
such  services.  The  Remarketing  Agent will not be  entitled  to  compensation
hereunder for any period after a conversion of the interest rate on the Bonds to
a Long-Term Rate or after this Remarketing  Agreement shall be terminated except
for a pro rata portion of the fee referred to in clause (ii) above.  Neither the
Issuer,  the Trustee nor the owners of the Bonds shall have any  responsibility,
obligation or liability with respect to any payments hereunder.

     8. Furnishing of Offering Materials.  (a) The Company agrees to furnish the
Remarketing  Agent with as many copies as the  Remarketing  Agent may reasonably
request of the Official  Statement and any  amendment or  supplement  thereto (a
"Supplement")  and the Company agrees to furnish the Remarketing Agent with such
other information with respect to the Company,  the Project and the Bonds as the
Remarketing Agent shall reasonably request from time to time. The Company agrees
not to request the amendment or supplementation of the Official Statement or any
Supplement  prior to notifying the Remarketing  Agent in writing of the proposed
amendment  or  supplementation.  If,  at  any  time  during  the  term  of  this
Remarketing  Agreement,  any event known to the Company relating to or affecting
the Company,  the Project or the Bonds shall occur which materially  affects the
accuracy or  completeness  of any statement of a material fact  contained in any
Official  Statement or any  Supplement,  the Company shall  promptly  notify the
Remarketing  Agent of the circumstances and details of such event, and if in the
opinion of the  Remarketing  Agent  such  event  requires  the  preparation  and
publication of a Supplement,  the Company agrees, at the expense of the Company,
to prepare a Supplement  in a form and in a manner  approved by the  Remarketing
Agent. The Company shall provide such  certificates and opinions of counsel with
respect to the accuracy and  completeness  of any Supplement as may be requested
by the Remarketing Agent.

          (b) The  Company  and  the  Remarketing  Agent  acknowledge  that  the
Remarketing Agent may be obligated to comply with applicable  provisions of Rule
15c2-12 under the 1934 Act in connection with certain remarketings of the Bonds,
including a remarketing upon a conversion of the interest rate on the Bonds from
a Daily, Weekly or Commercial Paper Rate to a Long-Term Rate or an Auction Rate.
The  Company  agrees to  cooperate  with the  Remarketing  Agent to  enable  the
Remarketing  Agent  to  comply  with  applicable  provisions  of  Rule  15c2-12,


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including  the  preparation  of  a  disclosure  document   satisfactory  to  the
Remarketing Agent and its counsel,  "deeming final" such disclosure  document as
provided  in Rule  15c2-12,  providing  sufficient  copies  of  such  disclosure
document  within  the  time  required  by  Rule  15c2-12   (together  with  such
certificates   and  opinions  of  counsel  with  respect  to  the  accuracy  and
completeness of such disclosure  document as may be requested by the Remarketing
Agent)  entering  into an  undertaking  to  provide  continuing  information  as
required by Rule  15c2-12,  and taking all such other action as may be requested
by the Remarketing  Agent so as to enable the  Remarketing  Agent to comply with
applicable provisions of Rule 15c2-12.

     9.  No  Agency;  Remarketing  Agent  Not  Acting  As  Underwriter.  (a)  In
connection with the Auction Rate Bonds,  the Remarketing  Agent is acting solely
as agent of the Company and does not assume any  obligation or  relationship  of
agency or trust of or with any of the beneficial  owners or registered owners of
Auction Rate Bonds.

          (b) When the Bonds bear interest at a Daily, Weekly,  Commercial Paper
or  Long-Term  Interest  Rate,  in  carrying  out  its  duties  hereunder,   the
Remarketing  Agent shall act solely as the agent of the owners from time to time
of the Bonds, and the Remarketing  Agent's  responsibility is limited to the use
of its best efforts to solicit offers to purchase the Bonds.

          (c) The Remarketing Agent is not obligated to buy or take any position
in the Bonds for its own account, but may from time to time purchase, hold, sell
and deal in the Bonds for its own  account  or as broker or agent for others and
may do  anything  any  other  Bondholder  may do to the  same  extent  as if the
Remarketing Agent were not serving as such.

     10. Limitation on Liability of Remarketing Agent. (a) The Remarketing Agent
and its  officers or  employees  shall incur no  liability to the Company or any
person  with  respect  to the  validity  of the  Bonds  or for  its  actions  as
Remarketing  Agent pursuant to the terms of this  Remarketing  Agreement and the
Indenture except for its willful misconduct or negligence.

          (b) The Remarketing  Agent shall incur no liability for, or in respect
of, any action taken or omitted to be taken,  or suffered by it in reliance upon
the Indenture,  any Bonds,  written  instruction,  notice,  request,  direction,
certificate,  consent, report, affidavit,  statement, order or other instrument,
paper document or  communication  reasonably  believed by it in good faith to be
genuine and on which it reasonably  believes it is entitled to rely.  Any order,
certificate,  affidavit,  instruction,  notice, request, direction, statement or
other comment from the Company or given by it and sent, delivered or directed to
the Remarketing  Agent under,  pursuant to, or as permitted by, any provision of
this  Agreement  shall be  sufficient  for  purposes of this  Agreement  if such
comment is in writing and signed by any officer of the  Company.  No party shall
be liable for any default resulting from force majeure, which shall be deemed to
include any circumstances  beyond the reasonable  control of the party affected.
No action,  regardless  of form arising out of or  pertaining to the role of the
Remarketing  Agent  hereunder may be brought by any party hereto or  beneficiary
hereby beyond the period stated in the applicable statute of limitations.

          (c) The Remarketing Agent may consult with counsel  satisfactory to it
(selected  with due  care),  and the  advice of such  counsel  shall be full and
complete  authorization and protection in respect of any action taken or omitted
to be taken or suffered by it hereunder in good faith and in accordance with the
advice of such counsel.

     11.  Indemnification and Contribution.  (a) The Company agrees to indemnify
and hold  harmless  the  Remarketing  Agent and any  officer or  employee of the
Remarketing  Agent and each person,  if any, who controls the Remarketing  Agent
within  the  meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
against any losses, claims,  damages or liabilities,  joint or several, to which
any of them may become  subject,  under the 1933 Act, the 1934 Act or otherwise,
insofar as such losses,  claims,  damages or liabilities  (or actions in respect
thereof)  arise out of or are based upon any untrue  statement or alleged untrue
statement  of any  material  fact  contained  in the  Official  Statement or any
Supplement  (including any documents  incorporated by reference therein), or the
Official  Statement or any Supplement as it may be amended or  supplemented,  or
arise out of or are based upon the omission or alleged omission to state therein
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements therein not misleading, and will reimburse each of them for any legal
or other expenses  reasonably  incurred by them in connection with investigating
or defending any such action or claim; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss,  claim,  damage
or  liability  arises  out of or is based  upon an untrue  statement  or alleged
untrue statement or omission or alleged omission made in the Official  Statement


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and any  Supplement,  or the Official  Statement and any Supplement as it may be
amended  or  supplemented,  in  reliance  upon and in  conformity  with  written
information  furnished to the Company by the  Remarketing  Agent for use therein
describing  its role as  Remarketing  Agent,  and  provided  further  that  this
indemnity  shall not inure to the  benefit of the  Remarketing  Agent (or of any
person  controlling  the  Remarketing  Agent) on account of any losses,  claims,
damages  or  liabilities  arising  from a sale of  Bonds  to any  person  if the
Remarketing  Agent  failed to deliver a copy of the Official  Statement  and any
Supplement,  as the same may then be supplemented or amended, to such person and
the delivery  thereof  would have been a valid  defense to the action from which
such loss, claim,  damage or liability arose. For purposes of the second proviso
to the  immediately  preceding  sentence,  the term  Official  Statement and any
Supplement  shall not be deemed to include the documents  incorporated or deemed
incorporated  therein  by  reference,  and the  Remarketing  Agent  shall not be
obligated  to  send  or  give  any  supplement  or  amendment  to  any  document
incorporated or deemed  incorporated by reference in the Official  Statement and
any Supplement to any person other than a person to whom the  Remarketing  Agent
has  delivered  such  incorporated  documents  in response to a written  request
therefor.  The indemnity  agreement in this subdivision (a) shall be in addition
to any liability  which the Company may otherwise have and shall extend upon the
same terms and conditions to each person,  if any, who controls the  Remarketing
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act.

          (b) The  Remarketing  Agent agrees to indemnify  and hold harmless the
Company and any officer or employee of the Company  against any losses,  claims,
damages or  liabilities  to which the  Company or any officer or employee of the
Company  may  become  subject,  under the 1933 Act,  the 1934 Act or  otherwise,
insofar as such losses,  claims,  damages or liabilities  (or actions in respect
thereof)  arise out of or are based upon any untrue  statement or alleged untrue
statement of any material  fact  contained  in the  Official  Statement  and any
Supplement, or the Official Statement and any Supplement as it may be amended or
supplemented,  or arise out of or are based  upon the  omission  or the  alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary to make the  statements  therein not  misleading,  in each case to the
extent,  but only to the extent,  that such untrue  statement or alleged  untrue
statement or omission or alleged omission was made in the Official Statement and
any  Supplement,  or the  Official  Statement  and any  Supplement  as it may be
amended  or  supplemented,  in  reliance  upon and in  conformity  with  written
information furnished to the Company by the Remarketing Agent for use therein to
describe its role as Remarketing  Agent,  and will reimburse the Company for any
legal or other expenses  reasonably  incurred by the Company in connection  with
investigating  or defending any such action or claim.  The  indemnity  agreement
contained in this  subdivision  (b) shall be in addition to any liability  which
the Remarketing  Agent may otherwise have and shall extend,  upon the same terms
and conditions,  to each officer and director of the Company and to 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.

          (c) Promptly after receipt by an indemnified  party under  subdivision
(a)  or (b)  above  of  the  notice  of the  commencement  of any  action,  such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying  party under such  subdivision,  notify the  indemnifying  party in
writing  of  the  commencement  thereof;  but  the  omission  so to  notify  the
indemnifying  party shall not relieve it from any liability which it may have to
any indemnified  party otherwise than under such  subdivision.  In case any such
action shall be brought against any indemnified  party,  and it shall notify the
indemnifying party of the commencement  thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish,  jointly with
any other indemnifying party, similarly notified, to assume the defense thereof,
with counsel selected by the indemnifying party, but reasonably  satisfactory to
such indemnified party; provided,  however, if the defendants in any such action
include  both  the  indemnified  party  and  the  indemnifying   party  and  the
indemnified  party  shall  have  reasonably  concluded  that  there may be legal
defenses  available to it and/or other  indemnified  parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate  counsel to assume such
legal  defenses  and to otherwise  participate  in the defense of such action on
behalf of such  indemnified  party or parties.  Upon  receipt of notice from the
indemnifying  party to such  indemnified  party of its election so to assume the
defense of such action and  approval by the  indemnified  party of counsel,  the
indemnifying  party  will not be liable to such  indemnified  party  under  this
Section  11 for any  legal  or  other  expenses  subsequently  incurred  by such
indemnified  party  in  connection  with  the  defense  thereof  unless  (i) the
indemnified  party  shall have  employed  such  counsel in  connection  with the
assumption of legal defenses in accordance  with the proviso to the  immediately
preceding  sentence (it being understood,  however,  that the indemnifying party
shall  not be  liable  for  the  expenses  of more  than  one  separate  counsel
representing the indemnified  parties under  subdivision (a) or (b), as the case
may be, who are parties to such action),  (ii) the indemnifying  party shall not
have employed  counsel  satisfactory to the  indemnified  party to represent the
indemnified  party within a reasonable  time after notice of commencement of the
action or (iii) the indemnifying  party has authorized the employment of counsel
for  the  indemnified  party  at the  expense  of the  indemnifying  party.  The
indemnifying  party  shall not be liable for any  settlement  of any  proceeding
effected  without its written  consent,  but if settled  with such consent or if
there is a final  judgment for the  plaintiff  not appealed by the  indemnifying
party,  the  indemnifying  party  agrees  to  indemnify  and hold  harmless  the
indemnified  party  from  and  against  loss  or  liability  by  reason  of such
settlement or judgment to the extent required hereby.

          (d) If the  indemnification  provided for in paragraphs  (a) or (b) of
this Section 11 is held by a court to be unavailable to an indemnified  party in
respect of any losses,  claims, damages or liabilities referred to therein, then
each  indemnifying  party in lieu of indemnifying  such indemnified  party shall
contribute to the amount paid or payable by such  indemnified  party as a result
of  such  losses,  claims,  damages  or  liabilities  in such  proportion  as is
appropriate  to reflect the relative fault of the Company on the one hand and of
the  Remarketing  Agent  on the  other in  connection  with  the  statements  or
omissions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations,  including relative benefit. The
relative  fault of the Company on the one hand and of the  Remarketing  Agent on
the other shall be determined  by reference to, among other things,  whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the  Remarketing  Agent  and,  with  respect to the party  supplying  such
information,   that  party's  intent,  knowledge,   access  to  information  and
opportunity to correct or prevent such statement or omission.

     The Company and the  Remarketing  Agent agree that it would not be just and
equitable if  contribution  pursuant to this Section 11 were  determined  by pro
rata allocation or by any other method of allocation which does not take account
of  the  equitable  considerations  referred  to in  the  immediately  preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in the immediately preceding
paragraph  shall be deemed to  include,  subject  to the  limitations  set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in  connection  with  investigating  or  defending  any such  action  or  claim.
Notwithstanding  the provisions of this Section 11, the Remarketing  Agent shall
not be  required to  contribute  any amount in excess of the amount by which the
total  price  at  which  the  Bonds  remarketed  by the  Remarketing  Agent  and
distributed  to the public were offered to the public  exceeds the amount of any
damages which the Remarketing Agent has otherwise been required to pay by reason
of 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.

     12. Term. This Remarketing Agreement will terminate upon the earlier of (a)
the effective date of a Long-Term  Interest Rate Period which extends to the day
before the stated maturity of the Bonds,  (b) the date on which the Bonds are no
longer  Outstanding  under the  Indenture  and are not  subject  to  tender  for
purchase by the owners thereof prior to the stated maturity thereof,  or (c) the
effective  date of any  resignation  or  removal  of the  Remarketing  Agent  in
accordance with the Indenture.  The Remarketing  Agent will resign, if requested
by the  Company  in  writing,  and may  resign  at any time as  provided  in the
Indenture.  Following  termination,  the  provisions  of  Sections 7 and 11 will
continue in effect as to transactions prior to the date of termination, and each
party will pay the other any amounts owing at the time of termination.

     13.  Notice.  (a) Except for  communications  authorized to be by telephone
under the Indenture,  all notices,  requests or other communications to be given
under this Remarketing Agreement shall be given in writing, delivered by hand or
by first class mail,  and if by mail,  by being  deposited in the United  States
mail,  addressed  to the  party to which  such  notice  is to be  given.  Unless
otherwise provided, the respective addresses for the Company and the Remarketing
Agent for  notices  which are or may be required  to be given  hereunder  are as
follows:

         If to the Remarketing Agent:


<PAGE>


                  J.P. Morgan Securities Inc.
                  60 Wall Street, 33rd Floor
                  New York, New York 10260
                  Attention:  Short-Term Desk
                  Telecopy:  (212) 648-5916

         If to the Issuer:

                  Indiana Development Finance Authority
                  One North Capitol, Suite 320
                  Indianapolis, IN  46204
                  Attention: Secretary Manager
                  Telephone: (317) 233-4332
                  Telecopy: (317) 232-6786

         If to the Company:

                  Indianapolis Power & Light Company
                  One Monument Circle
                  PO Box 1595
                  Indianapolis, Indiana 46206-1595
                  Attention: Director, Financial Services
                  Telephone: (317) 261-8670
                  Telecopy: (317) 630-0609

         If to the  Auction  Agent,  Registrar  or Tender Agent (while the Bonds
         are Auction Rate Bonds):

                  Bankers Trust
                  Four Albany Street
                  New York, New York 10006
                  Attention:  Corporate Trust & Agency Services
                  Telephone:  (212) 250-6850
                  Telecopy: (212) 250-6688

         If to the  Trustee,  Registrar or Tender Agent (while the Bonds are not
         Auction Rate Bonds):

                  National City Bank of Indiana
                  101 West Washington Street, Suite 655 S
                  Indianapolis, Indiana 46355
                  Attention:  Corporate Trust Department
                  Telephone: (317) 267-8872
                  Telecopy: (317) 267-7658

Each entity listed above may change the address for service of notice upon it by
a notice in writing to the other entities named above. Each such notice, request
or  communication  shall be effective  when  delivered at the address  specified
herein.

          (b) The  Remarketing  Agent may rely upon, and is authorized to honor,
any  telephonic  requests or  directions  or requests or  directions by telecopy
which the Remarketing Agent reasonably believes in good faith to emanate from an
authorized representative of the Company. Any telephonic request or direction to
the Remarketing Agent shall promptly be confirmed in writing, provided, however,
that  failure to receive any such notice  shall not affect the  authority of the
Remarketing Agent to rely and act upon such request or direction.

     14. Amendment,  Modification and Waiver. The provisions of this Remarketing
Agreement  may  not be  amended,  modified  or  waived  unless  such  amendment,
modification  or waiver is in  writing  and  signed by the party  against  which
enforcement is sought.

     15. Acceptance Under Indenture. This Remarketing Agreement shall constitute
the acceptance of the Remarketing  Agent of its duties and obligations under the
Indenture.  The Remarketing  Agent hereby designates its address as set forth in
Section 13 of this Remarketing Agreement as that of its principal office.

     16. Governing Law. This Remarketing Agreement shall be governed by the laws
of the State of Indiana  without giving effect to the principles of conflicts of
law thereof.

     17.   Counterparts.   This   Remarketing   Agreement  may  be  executed  in
counterparts,  each of  which  shall  be  deemed  to be an  original,  and  such
counterparts shall constitute one and the same instrument.



<PAGE>


     IN WITNESS  WHEREOF,  the parties hereto have signed their names as of this
15th day of June, 2001.


                                             INDIANAPOLIS POWER & LIGHT COMPANY


                                             By:  /s/ William H. Henley
                                                  ------------------------------
                                                  Title:  President


                                             J.P. MORGAN SECURITIES INC.


                                             By:  /s/ Diana L. Hoadley
                                                  ------------------------------
                                                  Title:  Vice President