Exhibit 10.5

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                         RECEIVABLES PURCHASE AGREEMENT



                          dated as of December 20, 1996



                                      Among



                       INDIANAPOLIS POWER & LIGHT COMPANY



                                       And



                             IPL FUNDING CORPORATION







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                                TABLE OF CONTENTS

SECTION                                  HEADING                            PAGE

ARTICLE I         PURCHASE AND SETTLEMENTS.....................................1

  Section 1.1.      Sale.......................................................1
  Section 1.2.      Purchase Price.............................................1
  Section 1.3.      Administration of Receivables..............................2
  Section 1.4.      The Company's Rights.......................................3
  Section 1.5.      Protection of Ownership Interest of the Company............3
  Section 1.6.      Contractual Payment Obligations............................4
  Section 1.7.      Servicing Agent............................................4

ARTICLE II        REPRESENTATIONS AND WARRANTIES...............................5

  Section 2.1.      Representations and Warranties of the Originator...........5
  Section 2.2.      Representations and Warranties of the Company..............7

ARTICLE III       CONDITIONS PRECEDENT.........................................7

  Section 3.1.      Conditions to Closing......................................7
  Section 3.2.      Other Transaction Documents................................8

ARTICLE IV        COVENANTS....................................................8

  Section 4.1.      Affirmative Covenants of the Originator....................8

ARTICLE VI        MISCELLANEOUS................................................9

  Section 5.1.      Term of Agreement..........................................9
  Section 5.2.      Assignment of Receivables Purchase Agreement...............9
  Section 5.3.      No Waiver; Remedies.......................................10
  Section 5.4.      Amendments, etc...........................................10
  Section 5.5.      Notices...................................................10
  Section 5.6.      Governing Law; Submission to Jurisdiction; Integration....10
  Section 5.7.      Severability; Counterparts................................10
  Section 5.8.      Assignment................................................11
  Section 5.9.      Headings..................................................11
  Section 5.10.     Costs and Expenses........................................11
  Section 5.11.     No Partnership or Joint Venture...........................11

EXHIBITS

Exhibit A         Credit and Collection Policy
Exhibit B         Form of Subordinated Note
Exhibit C         Location of Records
Exhibit D         Corporate Names; Trade Names; Assumed Names


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                         RECEIVABLES PURCHASE AGREEMENT

     RECEIVABLES PURCHASE AGREEMENT (this "Agreement"), dated as of December 20,
1996,  among  Indianapolis  Power & Light  Company  (the  "Originator")  and IPL
Funding Corporation, an Indiana corporation (the "Company"). Certain capitalized
terms used herein are defined in Schedule I hereto.

     The parties hereto agree as follows:

                                    ARTICLE I
                            PURCHASE AND SETTLEMENTS

     Section  1.1.  Sale.  (a)  Subject  to the  terms  and  conditions  hereof,
commencing on the Initial  Purchase  Date,  the  Originator  hereby sells to the
Company,  and the  Company  hereby  acquires  from  the  Originator,  all of the
Originator's  right,  title and interest in the  Purchased  Receivables  and all
Collections  thereon.  The Originator intends such sale to be a true sale of all
rights and interests of the  Originator in the  Receivables  in existence on the
Initial  Purchase  Date and of each  Receivable  thereafter  generated  as it is
created until the Originator Termination Date for the Originator.

     Section 1.2.  Purchase  Price.  (a) On the Initial  Purchase  Date and each
Workday thereafter until the Originator Termination Date for the Originator, the
Company  shall  pay to the  Originator  a  purchase  price  for  each  Purchased
Receivable  (other  than an  Excluded  Receivable)  of the  Originator  (and not
previously sold to the Company  hereunder)  equal to the outstanding  balance of
such  Purchased  Receivable  in  existence  on the  Determination  Date for such
Receivable.  Such purchase price shall be paid through two methods.  First,  the
Company  may  pay  to the  Originator  a  portion  of  such  purchase  price  by
transferring  to the Originator  monies then held by the Company,  solely to the
extent such monies do not constitute  Collections  required to be distributed to
the Agent under the Receivables Sale Agreement or necessary as part of a reserve
for liabilities of the Company  established by the Company in its sole judgment.
Second,  the Company shall pay the remaining  purchase price by crediting to the
Subordinated  Note such  remaining  amount of the purchase  price payable to the
Originator.  On the Initial  Purchase Date, at least  $5,000,000 of the purchase
price  payable  to the  Originator  on the  Initial  Purchase  Date  shall so be
credited to the  Subordinated  Note. On each Monthly  Settlement  Date occurring
after the Initial  Purchase Date, the difference  between (x) the total purchase
price payable for all Purchased  Receivables  originated  during the  Settlement
Period ending on such Monthly  Settlement Date that were not in existence on the
Initial  Purchase  Date and (y) the amount of such  purchase  price paid in cash
during that Settlement  Period shall be credited to the  Subordinated  Note. For
any  Settlement  Period that the amount of such cash payments to the  Originator
exceeds the aggregate  purchase price payable for Purchased  Receivables  during
the Settlement  Period,  such excess shall be applied on the Monthly  Settlement
Date  for  such  Settlement  Period  to  reduce  the  principal  amount  of  the
Subordinated Note.

     (b) The  Originator  and the  Company  shall  each  independently  take all
necessary action to record properly the sales  contemplated by this Agreement to
reflect the Company's ownership of all Purchased Receivables.  To the extent the
sale of any Purchased Receivable or Collection under this Agreement is deemed to
be a financing for any applicable legal purpose, the Originator hereby grants to
the  Company  a  security  interest  in all of the  Originator's  rights  in the
Purchased  Receivables it originated and their  Collections to secure the claims
of the Company to such Purchased  Receivables  and all of their  Collections and
other proceeds.

     (c) None of the  Company,  the  Agent,  nor any  Purchaser  shall  have any
obligation  or  liability  to any  Obligor  or other  customer  or client of the
Originator  to perform any of the  obligations  of the  Originator in connection
with any Receivable or otherwise.

     Section  1.3.  Administration  of  Receivables.  (a)  Consistent  with  the
Company's  ownership of the  Purchased  Receivables,  the Company shall have all
rights to and shall be  solely  responsible  for  servicing,  administering  and
collecting the Purchased Receivables.  The Company may appoint any Person as its
agent to perform such services.

     (b) The  Originator  shall,  on the date  hereof and as each new  Purchased
Receivable is originated by it,  deliver to the Company (or the Company's  agent
appointed  pursuant to Section  1.7) all Records and evidence of the creation of
each Purchased Receivable.

     (c) Upon the occurrence of a Lock-Box  Event,  the Originator  shall direct
all Obligors to make all  payments on all  Purchased  Receivables  to a Lock-Box
Account. Upon the occurrence of a Lock-Box Event, if the Originator nevertheless
receives any such payments it shall hold all cash,  checks and other instruments
received by it in trust and promptly  (but in any event within two Business Days
after receipt) remit all such  Collections,  duly endorsed or with duly executed
instruments  of  transfer  in the  case of  checks  or other  instruments,  to a
Lock-Box Account.

     (d) The Originator hereby authorizes the Company (or the Company's agent or
assignee) to notify the Obligors on the Purchased  Receivables,  or any of them,
of the Company's  ownership of the Purchased  Receivables.  The Originator  also
hereby  authorizes  the Company (or the  Company's  agent or assignee) to notify
such Obligors,  or any of them, of the Company's  assignment of interests in the
Purchased  Receivables  to the  Agent,  for the  benefit of the  Purchasers,  in
accordance with the terms of Article III of the Receivables Sale Agreement.

     (e) The  Originator  hereby  agrees that the Company has the  absolute  and
unlimited  right,  itself or through its agent, to commence and settle any legal
action to enforce collection of any Purchased Receivable or to foreclose upon or
repossess any portion thereof.

     (f) The  Originator  hereby grants to the Company an  irrevocable  power of
attorney, with full power of substitution,  coupled with an interest, to take in
the  name of the  Originator  all  steps  necessary  or  advisable  to  endorse,
negotiate  or  otherwise  realize  on  any  item  constituting  proceeds  of any
Purchased  Receivable.  Without  limiting the generality of the  foregoing,  the
Originator  hereby  authorizes the Company to take any and all steps in the name
of the Originator and on behalf of the Originator necessary or desirable, in the
determination of the Company, to collect any and all amounts or portions thereof
due under any and all Purchased Receivables, including endorsing the name of the
Originator  on  checks  and  other  instruments   representing  Collections  and
enforcing any Purchased Receivable.

     (g)  Unless an  Obligor  otherwise  specifies  or  another  application  is
required by contract or law,  any  payment  received by the  Originator  from an
Obligor  shall be applied  as a  Collection  of  Purchased  Receivables  of such
Obligor  (starting  with  the  oldest  such  Receivable)  and  remitted  to  the
Collection Agent as such.

     (h) In connection with the creation, servicing,  administering, and (to the
extent the Originator is appointed to perform  collection  functions pursuant to
Section 1.7)  collecting  of the Purchased  Receivables,  the  Originator  shall
exercise  the same care and  diligence  it would  exercise in  handling  similar
matters for its own  account  and will  comply at all times and in all  material
respects  with  the  terms  of the  Transaction  Documents  and the  Credit  and
Collection Policy.

     Section 1.4. The Company's  Rights.  (a) The Company (or its  successors or
assigns) shall retain,  and use for its own benefit,  the  Collections and other
proceeds of all Purchased  Receivables,  and the  Originator  shall not have any
interest of any kind in or to any such Collections or other proceeds.

     (b) The Company shall have no obligation to account for, to replace,  or to
return  all or any  portion  of the  Purchased  Receivables  to the  Originator,
without regard to whether the Collections  and other proceeds  derived from such
Purchased  Receivables  are in  excess  of the  purchase  price  paid  for  such
Purchased Receivables.

     (c) The  Company  shall  have the  unrestricted  right to  further  assign,
transfer,  deliver,  hypothecate,  subdivide or  otherwise  deal with all or any
portion of the Purchased Receivables.

     (d) The Company (or its successors or assigns) shall have the sole right to
retain any gains or profits  created  by buying,  selling or holding  all or any
portion of the Purchased Receivables.

     Section  1.5.  Protection  of  Ownership  Interest  of  the  Company.   The
Originator  will, at its expense,  promptly  execute and deliver all instruments
and documents and take all action  necessary or that the Company may  reasonably
request  to  perfect  or  protect  the  Company's  ownership  of  the  Purchased
Receivables  and their  Collections  or to enable the  Company to  exercise  and
enforce  any  of its  rights  hereunder.  At the  request  of the  Company,  the
Originator shall also execute and file financing statements, amendments thereto,
and  continuation  or  assignments  thereof  and  deliver to the  Company or its
designee all contracts and Records (including all multiple originals of any such
contract)   relating  to  the  Purchased   Receivables,   with  any  appropriate
endorsement  or  assignment  requested  by the  Company.  To the fullest  extent
permitted by  applicable  law,  the Company  shall be permitted to sign and file
continuation   statements  relating  to  the  Purchased  Receivables  and  their
Collections  and  amendments   thereto  and  assignments   thereof  without  the
Originator's  signature.  A  reproduction  of this Agreement or of any financing
statement shall be sufficient as a financing statement. The Originator shall not
change its name,  identity or corporate structure (within the meaning of Section
9-402(7) of any applicable  UCC) or relocate its chief  executive  office or any
office or location  where  Records are kept unless it shall have:  (i) given the
Company and the Agent at least 20 days' advance notice and (ii) delivered to the
Company and the Agent all financing statements,  instruments and other documents
requested  by the  Company  or the  Agent in  connection  with  such  change  or
relocation.  The  Originator  shall at all times  maintain  its chief  executive
offices  within a  jurisdiction  in the USA (other  than the states of  Florida,
Maryland  and  Tennessee)  in which  Article 9 of the UCC is in  effect.  If the
Originator  moves its chief  executive  office to a location that imposes Taxes,
fees or other  charges to perfect the  interests of the Company in the Purchased
Receivables,  the  Originator  shall pay all such amounts and any other costs or
expenses  incurred to maintain  the  enforceability  of this  Agreement  and the
ownership of the Company of the Purchased Receivables.

     Section 1.6. Contractual Payment Obligations.  The Originator hereby agrees
as follows:

          (a) If on any day the outstanding balance of a Purchased Receivable is
     reduced or  canceled  as a result of any  defective  or  rejected  goods or
     services,  any cash  discount or  adjustment  (including as a result of the
     application   of  any   special   refund   or   other   discounts   or  any
     reconciliation),  any setoff or credit (whether such claim or credit arises
     out of the same, a related,  or an unrelated  transaction) or other similar
     reason not  arising  from the  financial  inability  of the  Obligor to pay
     undisputed  indebtedness,  the Originator  shall pay to the Company on such
     day the amount of such reduction or cancellation in the outstanding balance
     of such Purchased Receivable.

          (b) If on any day any  representation,  warranty,  covenant  or  other
     agreement of the Originator is not true (as of the date such representation
     or  warranty  is made or  deemed  made)  or (in the case of a  covenant  or
     agreement)  is not  satisfied for a Purchased  Receivable,  the  Originator
     shall  pay to the  Company  on such  day the  outstanding  balance  of such
     Purchased Receivable in full.

     The Company  shall have no recourse to the  Originator  with respect to any
Purchased Receivable otherwise than pursuant to this Section 1.6.

     Section 1.7.  Servicing Agent. (a) Until the Company (or the Agent pursuant
to the Receivables  Sale Agreement)  gives contrary  notice,  the Company hereby
appoints  the  Originator  as its agent (and as  sub-collection  agent under the
terms of the Receivables  Sale Agreement) for the servicing,  administering  and
collecting of the Purchased  Receivables,  and the Orignator hereby accepts such
appointment  and agrees to perform such duties in accordance with the applicable
terms and conditions of the Receivables  Sale Agreement.  The Originator  hereby
further agrees not to voluntarily  resign as agent for the Company in connection
with such servicing,  administering  and collecting  functions.  The Company may
replace the Originator as its agent (and  sub-collection  agent) at any time for
any reason.

     (b) As  servicing  agent for the  Company,  the  Originator  shall take all
actions  necessary or advisable to collect each Purchased  Receivable  with care
and diligence and shall perform all other servicing  activities  related to such
Receivables as are required by the Collection  Agent pursuant to the Receivables
Sale Agreement, including providing reports and other information concerning the
Purchased  Receivables required to be furnished by the Collection Agent pursuant
to the Receivables Sale Agreement.

     (c) In consideration  for the Originator  services pursuant to this Section
1.7, for so long as the Originator  performs such duties,  the Company shall pay
to the  Originator  a cash fee of  $50,000  per  month  payable  on the  Monthly
Settlement Date for the immediately  preceding  month.  The parties hereto agree
such  servicing  fee is a fair  market  value  fee for the  servicing  functions
required hereby.

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

     Section  2.1.  Representations  and  Warranties  of  the  Originator.   The
Originator  represents  and  warrants,  on the date  hereof and on the date each
Receivable is created,  that each  representation and warranty  concerning it or
the Receivables  that is contained in the Receivables Sale Agreement is true and
correct and that:

          (a) Perfection of Ownership Interest.  Immediately  preceding its sale
     of each  Purchased  Receivable  hereunder,  the Originator was the owner of
     such  Purchased  Receivable  purported  to be sold,  free and  clear of any
     Adverse  Claims,  and each the sale  hereunder  constitutes  a valid  sale,
     transfer  and  assignment  of all  of the  Originator's  right,  title  and
     interest in, to and under the Purchased Receivables,  free and clear of any
     Adverse  Claims.  On or before the date hereof and before the generation by
     the Originator of any new  Receivable,  all financing  statements and other
     documents  required to be recorded or filed in order to perfect and protect
     the  Company's  ownership  interest  in the  Purchased  Receivables  of the
     Originator against all creditors of and purchasers from the Originator will
     have been duly filed in each filing office necessary for such purpose,  and
     all filing fees and taxes, if any,  payable in connection with such filings
     shall have been paid in full.

          (b) Creation of Receivables. The Originator has exercised at least the
     same  degree  of  care  and  diligence  in the  creation  of the  Purchased
     Receivables  as it  has  exercised  in  connection  with  the  creation  of
     receivables originated by it and not sold hereunder.

          (c) Credit and Collection  Policy.  The Originator has complied in all
     material  respects with its Credit and Collection  Policy in regard to each
     Purchased  Receivable,  except for  instances  of  non-compliance  with the
     Credit and Collection  Policy that would not have a material adverse effect
     on the collectability of any material amount of the Receivables.

          (d) Enforceability of Contracts. Each Purchased Receivable is a legal,
     valid and binding  obligation of the related Obligor to pay the outstanding
     balance of the Purchased Receivable created thereunder, enforceable against
     the  Obligor  in  accordance  with  its  terms,   (subject  to  bankruptcy,
     insolvency,  fraudulent transfer, reorganization and moratorium and similar
     laws of general applicability relating to or affecting auditors' rights and
     to  general  equity  principles)  without  being  subject  to any  defense,
     deduction,  offset or  counterclaim  and the Originator has fully performed
     its obligations under such contract.

          (e)  Compliance  with Laws. No Purchased  Receivable  contravenes  any
     laws, rules or regulations applicable thereto or to the Originator.

          (f)  Chief  Executive  Office  and  Location  of  Records.  The  chief
     executive  office of the  Originator  is located at the  address  set forth
     beneath its signature hereto,  and such offices have been so located for at
     least six months before the date hereof.  The offices where the  Originator
     keeps all Records are located at the  addresses  described  on Exhibit C or
     such  other  locations  of which  the  Company  has been  given  notice  in
     accordance  with Section 1.5 and where all actions  required by Section 1.5
     have been completed.

          (g) Good Title.  Upon the creation of each new  Receivable  and on the
     Initial Purchase Date for then existing Receivables, the Company shall have
     a valid and perfected first priority  ownership  interest in each Purchased
     Receivable at the time of such creation or purchase,  free and clear of any
     Adverse Claim.

          (h) Names.  Except as described in Exhibit D, the  Originator  has not
     used any corporate names,  trade names or assumed names other than its name
     set forth on the signature pages of this Agreement.

          (i)  Assignability  and   Confidentiality.   No  Purchased  Receivable
     requires the Obligor thereon to consent to the transfer, sale or assignment
     of the rights to payment of the  Originator  under such  Receivable  nor is
     subject to a  confidentiality  provision  that  purports  to  restrict  the
     ability  of the  Company to  exercise  its  rights  under  this  Agreement,
     including its right to review the contract.

          (j) Bulk Sales, No Fraudulent Conveyance.  No transaction contemplated
     hereby  requires  compliance with or will become subject to avoidance under
     any bulk sales act or similar  law. No  purchase  hereunder  constitutes  a
     fraudulent  transfer  or  conveyance  under any  United  States  federal or
     applicable  state  bankruptcy  or insolvency  laws or is otherwise  void or
     voidable under such or similar laws or principles or for any other reason.

     Section 2.2.  Representations  and  Warranties of the Company.  The Company
represents and warrants that:

          (a) Corporate  Existence and Power.  The Company is a corporation duly
     organized,  validly  existing  and in good  standing  under the laws of its
     state of incorporation and has the corporate power required to carry on its
     business  as now  conducted  and  is  qualified  to do  business  in  every
     jurisdiction where such qualification is necessary, except where failure to
     so qualify  would not have an adverse  effect on its ability to perform its
     obligations hereunder.

          (b) Corporate and Governmental  Authorization;  No Contravention.  The
     execution,  delivery and  performance  by the Company of this Agreement are
     within its  corporate  powers,  have been duly  authorized by all necessary
     corporate  action,  require no action by or in respect of, or filing  with,
     any  governmental  body,  agency or  official  (except as  contemplated  by
     Section 1.5) and do not  contravene,  or  constitute a default  under,  any
     provision  of  applicable  law,  rule  or  regulation  or of the  Company's
     certificate  or articles of  incorporation  or by-laws or of any agreement,
     judgment,  injunction,  order,  decree or other instrument binding upon the
     Company  or  result  in the  creation  or  imposition  of any lien or other
     Adverse Claim on any assets of the Company.

          (c) Binding Effect.  This Agreement  constitutes the legal,  valid and
     binding  obligation  of the  Company,  enforceable  against  the Company in
     accordance with its terms,  subject to bankruptcy,  insolvency,  fraudulent
     transfer,  reorganization  and  moratorium  and  similar  laws  of  general
     applicability  relating to or  affecting  creditors'  rights and to general
     equity principles.

                                   ARTICLE III
                              CONDITIONS PRECEDENT

     Section  3.1.  Conditions  to Closing.  On or before the date of  execution
hereof, each of the following documents and instruments shall be delivered,  all
of which  shall be in form  and  substance  acceptable  to the  Company  and the
Originator:

          (a) A copy of the resolutions of the board of directors of the Company
     and the  Originator,  certified by its  secretary  or assistant  secretary,
     approving  this  Agreement  and the other  documents  to be delivered by it
     hereunder.

          (b) The  certificate or articles of  incorporation  of the Company and
     the Originator that it is a corporation certified by the Secretary of State
     of its state of incorporation.

          (c) Good  standing  certificates  for the Company  and the  Originator
     issued by the Secretaries of State of the states of  incorporation  of each
     such  Person  and the states in which each such  Person's  chief  executive
     office is located.

          (d) A  certificate  of the  secretary  or  assistant  secretary of the
     Company and the  Originator  certifying (i) the names and signatures of the
     officers  authorized on its behalf to execute this  Agreement and any other
     documents to be delivered by it hereunder (on which  certificate  the other
     parties may  conclusively  rely until such time as the other  parties shall
     receive  from it a revised  certificate  meeting the  requirements  of this
     subsection   (d))  and  (ii)  a  copy  of  its  by-laws  and   articles  of
     incorporation.

          (e)  Originals  of  proper  UCC-1  financing   statements  naming  the
     Originator  as  "seller",  the  Company  as  "purchaser",  and the Agent as
     "assignee" for filing in all appropriate jurisdictions.

          (f) UCC search  reports  from the office of the  Secretary of State of
     Indiana covering the Originator.

          (g) Such other  approvals,  opinions  or  documents  as the Company or
     Agent may reasonably request.

     Section 3.2. Other Transaction  Documents.  All conditions precedent to the
execution,  delivery and effectiveness of the other  Transaction  Documents have
been fulfilled.

                                   ARTICLE IV
                                    COVENANTS

     Section 4.1. Affirmative Covenants of the Originator. The Originator hereby
covenants  and agrees with the Company and each  Purchaser  that at all times on
and after the date hereof, unless compliance is waived pursuant to Section 5.4:

          (a) General  Information.  The Originator shall furnish to the Company
     and to each Purchaser such  information as the Company or any Purchaser may
     from time to time reasonably request.

          (b)  Furnishing  of  Information   and  Inspection  of  Records.   The
     Originator  will furnish to the Company from time to time such  information
     concerning the Receivables as the Company shall request, including listings
     identifying  the Obligor and the outstanding  balance for each  Receivable.
     The  Originator  will  permit,  at any time and  from  time to time  during
     regular business hours upon reasonable  notice,  the Company and (under the
     conditions in Section 5.1(e) of the  Receivables  Sale Agreement) the Agent
     and any Purchaser or agents or representatives of any of the foregoing, (i)
     to  examine  and make  copies  of and  abstracts  from all  Records  in its
     possession  as agent for the  Company  pursuant  to Section 1.7 and (ii) to
     visit the  offices  and  properties  of the  Originator  for the purpose of
     examining such Records,  and to discuss matters  relating to Receivables or
     the  Originator's  performance  hereunder  with  any  of  the  officers  or
     employees of the Originator having knowledge of such matters.

          (c)  Keeping  of  Records  and  Books.  The  Originator  will have and
     maintain (A) administrative and operating procedures  (including an ability
     to recreate Records if originals are destroyed),  (B) adequate  facilities,
     personnel  and  equipment  and  (C)  all  Records  and  other   information
     reasonably  necessary  for  collection  the  Receivables  originated by the
     Originator  (including Records adequate to permit the daily  identification
     of each new such  Receivable and all  Collections  of, and  adjustments to,
     each existing such  Receivable).  The Originator  will give the Company and
     the Agent prior notice of any change in such  administrative  and operating
     procedures.

          (d) Performance and Compliance with  Receivables.  The Originator will
     at its expense  timely and fully  perform  and comply with all  obligations
     required to be observed by it in connection with the Receivables.

          (e) Credit and Collection  Policy. The Originator will comply with its
     Credit and  Collection  Policy in all  material  respects in regard to each
     Receivable originated by it.

          (f) Receivables Sale Agreement. The Originator will perform and comply
     with each covenant and other  undertaking in the Receivables Sale Agreement
     that the Company undertakes to cause the Originator to perform,  subject to
     any grace periods for such performance provided for in the Receivables Sale
     Agreement.

                                    ARTICLE V
                                  MISCELLANEOUS

     Section 5.1. Term of Agreement.  This  Agreement  shall  terminate upon the
later to occur of (i) the termination of the Receivables  Sale Agreement or (ii)
the  indefeasible  payment in full of all obligations owed by the Originator and
the Company to the other hereunder.

     Section 5.2. Assignment of Receivables  Purchase Agreement.  The Originator
hereby  acknowledges that on the date hereof the Company has assigned all of its
right,  title and interest in, to and under this  Agreement to the Agent for the
benefit of the Purchasers  pursuant to the  Receivables  Sale Agreement and that
the  Agent  and  the  Purchasers  are  third  party  beneficiaries  hereof.  The
Originator  hereby  further  acknowledges  that all provisions of this Agreement
shall inure to the  benefit of the Agent and the  Purchasers,  including  in the
enforcement of any provision  hereof to the extent set forth in the  Receivables
Sale  Agreement,  but that  neither the Agent nor any  Purchaser  shall have any
obligations  or duties  under this  Agreement.  The  Originator  hereby  further
acknowledges that the execution and performance of this Agreement are conditions
precedent for the Agent and the  Purchasers to enter into the  Receivables  Sale
Agreement and that the  agreement of the Agent and the  Purchasers to enter into
the  Receivables  Sale  Agreement  will  directly  or  indirectly   benefit  the
Originator and constitutes  good and valuable  consideration  for the rights and
remedies of the Agent and each Purchaser with respect hereto.

     Section  5.3. No Waiver;  Remedies.  No failure or delay on the part of any
party in  exercising  any  power,  right or remedy  under this  Agreement  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
such power,  right or remedy preclude any other further  exercise thereof or the
exercise of any other power,  right or remedy.  The rights and remedies provided
in this  Agreement are  cumulative  and  nonexclusive  of any rights or remedies
provided by law. Any waiver of this  Agreement  shall be  effective  only in the
specific instance and for the specific purpose for which given.

     Section 5.4.  Amendments,  etc. No amendment,  supplement,  modification or
waiver of any  provision of this  Agreement  nor consent to any departure by any
party  therefrom  shall in any event be  effective  unless  the same shall be in
writing and signed by the  Originator  and the Company and  consented  to by the
Agent and the Instructing Group.

     Section 5.5.  Notices.  Unless otherwise  specified,  all notices and other
communications  hereunder shall be in writing  (including by telecopier or other
facsimile  communication),  given to the  appropriate  Person at its  address or
telecopy number set forth on the signature pages hereof or at such other address
or telecopy  number as such Person may specify,  and effective  when received at
the address specified by such Person.  The number of days for any advance notice
required  hereunder may be waived (orally or in writing) by the Person receiving
such notice and, in the case of notices to the Agent, the consent of each Person
to which the Agent is required to forward such notice.

     Section 5.6. Governing Law;  Integration.  This Agreement shall be governed
by and  construed  in  accordance  with the  internal  laws  (and not the law of
conflicts)  of the  State of  Indiana.  This  Agreement  contains  the final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof,  superseding all prior
oral or written conflicting understandings.

     Section 5.7. Severability;  Counterparts. This Agreement may be executed in
any  number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts,  each of which when so executed  shall be deemed to be an original
and all of  which  when  taken  together  shall  constitute  one  and  the  same
agreement.   Any   provisions  of  this   Agreement   which  are  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

     Section  5.8.  Assignment.  This  Agreement  shall (i) be binding  upon the
Company and the Originator and their respective  successors and assigns and (ii)
inure to the benefit of and be  enforceable  by the Agent for the benefit of the
Purchasers to the extent set forth in the  Receivables  Sale Agreement and their
respective  successors,  transferees and assigns;  provided,  however,  that the
obligations of the Originator hereunder may not be assigned or delegated without
the prior written consent of the Agent and the Instructing  Group,  and any such
purported assignment or delegation absent such consent shall be void.

     Section 5.9.  Headings.  Article and Section  headings  used herein are for
convenience  and reference  only,  are not part of this Agreement and are not to
affect the construction  of, or to be taken into  consideration in interpreting,
this Agreement.

     Section 5.10.  Costs and Expenses.  The Originator  shall pay its costs and
expenses hereunder.

     Section 5.11. No Partnership or Joint  Venture.  Nothing  contained in this
Agreement  shall be deemed or  construed  by the parties  hereto or by any third
person to create the relationship of principal and agent or of partnership or of
joint venture.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed and  delivered by their duly  authorized  officers as of the date first
above written.


                                       IPL FUNDING CORPORATION


                                       By: /s/ Steven L. Meyer
                                          --------------------------------------
                                       Title:  Treasurer
                                             --------------

                                       Address:      One Monument Circle
                                                     Suite 747
                                                     Indianapolis, Indiana 46204
                                       Telephone:      (317) 261-5134
                                       Telecopy:       (317) 261-8288


                                       INDIANAPOLIS POWER & LIGHT COMPANY


                                       By: /s/ John R. Brehm
                                          --------------------------------------
                                       Title: SVP, Finance and Information
                                                 Services
                                             --------------

                                       Address:      One Monument Circle
                                                     Indianapolis, Indiana 46204
                                       Telephone:      (317) 261-8995
                                       Telecopy:       (317) 630-5763



<PAGE>
                                   SCHEDULE I
                                   DEFINITIONS

     Capitalized  terms used  herein that are  defined in the  Receivables  Sale
Agreement have the same meaning herein as in the Receivables Sale Agreement.  In
addition,  the  following  terms have the  meanings  set forth,  or referred to,
below:

     "Agreement" is defined in the first paragraph hereof.

     "Determination  Date" means,  with respect to any Receivable,  the later to
occur of (i) the date hereof and (ii) the date such Receivable is created.

     "Excluded Receivable" means any Receivable that is a Charge-Off.

     "Initial Purchase Date" means December 30, 1996.

     "Monthly Settlement Date" means the fifteenth (15th) day of each month (or,
if such day is not a Business Day, the following Business Day).

     "Subordinated  Note" means the revolving  promissory note in  substantially
the form of Exhibit B issued by the Company to the Originator.

     "Originator  Termination Date" means, the earliest to occur of (i) the date
of the occurrence of a Bankruptcy  Event affecting the Originator,  and (ii) the
Business  Day  designated  by the Company or the  Originator  as the  Originator
Termination  Date upon at least thirty days'  notice to the  Originator  and the
Agent.

     "Purchased  Receivables" means each and every Receivable  originated by the
Originator now existing or hereafter  arising before the Originator  Termination
Date.

     "Purchaser" means each "Purchaser" under the Receivables Sale Agreement.

     "Receivables Sale Agreement" means the Receivables Sale Agreement, dated as
of the date  hereof,  among the  Company,  ABN AMRO  Bank  N.V.,  as Agent,  the
Liquidity Providers party thereto, ABN AMRO Bank N.V. as Enhancer,  and Windmill
Funding Corporation.

     "Settlement Period" means, for any Monthly Settlement Date, the immediately
preceding calendar month.

     "Workday"  means a day in which  the  Originator  and the  Company  conduct
business.

     The foregoing  definitions shall be equally applicable to both the singular
and plural forms of the defined terms.  Unless otherwise  inconsistent  with the
terms of this Agreement,  all accounting terms used herein shall be interpreted,
and all accounting  determinations  hereunder  shall be made, in accordance with
GAAP. Amounts to be calculated  hereunder shall be continuously  recalculated at
the time any information relevant to such calculation changes.

     For purposes of this Agreement,  all terms used in Article 9 of the UCC and
not specifically defined in this Agreement shall be defined herein as such terms
are defined in the UCC as in effect in the State of Indiana.

<PAGE>

                                    EXHIBIT A
                          CREDIT AND COLLECTION POLICY

                 To Be Inserted by Indiana Power & Light Company


<PAGE>
                                    EXHIBIT B
                            FORM OF SUBORDINATED NOTE




<PAGE>
                                    EXHIBIT C
                               LOCATION OF RECORDS

         One Monument Circle
         Indianapolis, Indiana 46204






<PAGE>
                                    EXHIBIT D
                   CORPORATE NAMES; TRADE NAMES; ASSUMED NAMES



         IPL