Document:

Exhibit 4.3

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                       INDIANAPOLIS POWER & LIGHT COMPANY

                                       TO

                        AMERICAN NATIONAL BANK AND TRUST
                               COMPANY OF CHICAGO
                                                      Trustee

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

                           MORTGAGE AND DEED OF TRUST

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

                             Dated as of May 1, 1940

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                                TABLE OF CONTENTS*

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                                                                            PAGE
Parties........................................................................1
Recitals.......................................................................1
  Description of bond issue....................................................1
  General form of coupon bond..................................................1
  General form of coupon.......................................................1
  General form of fully registered bond........................................5
  Form of Trustee's Certificate................................................8
  Compliance with legal requirements...........................................8

Granting clauses...............................................................8

Description of property........................................................8

  PART I.      REAL PROPERTY IN THE COUNTY OF MARION, STATE OF INDIANA.

    GROUP ONE-MAIN GENERATING STATIONS

      A.   Harding Street Station..............................................9
      B.   C.C. Perry Plant, Section K........................................19
      C.   C.C. Perry Plant, Section W........................................24
      D.   Mill Street Station................................................26

    GROUP TWO-SUBSTATIONS
      Transmission Substations:
        Northeast Substation..................................................33
        Southeast Substation..................................................34
        Southwest Substation..................................................35
        Northwest Substation..................................................35
      Distribution Substations:
        13th Street Substation................................................36
        Martindale Substation.................................................36
        Broadripple Substation................................................36
        61st Street Substation................................................37
        Brightwood Substation.................................................37
        10th and Emerson Substation...........................................37
        English Avenue Substation.............................................37
        Beech Grove Substation................................................38
        Virginia Avenue Substation............................................38
        West Indianapolis Substation..........................................38
        East Ohio Street Substation...........................................39
        Main Street (Speedway City) Substation................................39
        Tibbs Avenue Substation...............................................40
        B. C. A. Substation...................................................40
        49th Street Substation................................................40
      Industrial Substations..................................................41
      A. C. to D. C. Conversion Substations...................................42
    GROUP THREE-TRANSMISSION LINE SITES.......................................43
    GROUP FOUR-MISCELLANEOUS PROPERTY.........................................46

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     *The Table of Contents  was not a part of the Mortgage and Deed of Trust as
      executed.

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                                                                            PAGE
  PART II.     COAL PROPERTY IN THE COUNTY OF SULLIVAN, STATE OF
                 INDIANA......................................................49
  PART III.    COAL PROPERTY IN THE COUNTY OF PIKE, STATE OF INDIANA..........50
  PART IV.     LEASEHOLDS.....................................................55
  PART V.      ELECTRIC DISTRIBUTION SYSTEMS..................................58
  PART VI.     STEAM AND HOT WATER DISTRIBUTING SYSTEMS.......................59
  PART VII.    INDETERMINATE PERMITS AND FRANCHISES...........................59
General and after-acquired property clauses...................................60
Appurtenances, etc............................................................61
Agreement as after-acquired property..........................................61
Properties excepted from lien of Indenture....................................61
Habendum......................................................................62
Exceptions, reservations, etc.................................................62
Grant in trust................................................................62
Defeasance clause.............................................................63
Covenant clause...............................................................63

                                    ARTICLE I

                                   DEFINITIONS

SEC.   1-Explanatory statement................................................63
SEC.   2-"the Company",  "the Trustee",  "this Indenture",  "the lien
           hereof", "the lien of this Indenture", "the mortgaged and pledged
           property", "outstanding", bonds owned by the Company and
           certain others not to be counted for purposes of certain
           sections,  "daily newspaper".......................................64
SEC.   3-"resolution", "engineer", "independent engineer", "Treasurers
           certificate", "engineer's certificate", "independent engineers
           certificate", "opinion of counsel", "independent", "control",
           "person", "affiliate"..............................................65
SEC.   4-I  "property additions"..............................................67
        II  Deductions from and additions to property additions...............69
       III  Retirement of property............................................71
SEC.   5-"funded property",  "funded cash"....................................71
SEC.   6-"excepted encumbrances", "prior lien", "prior lien bonds",
            "outstanding" with respect to prior lien bonds....................73
SEC.   7-"net earnings certificate............................................75

                                   ARTICLE II

               FORM, EXECUTION, REGISTRATION AND EXCHANGE OF BONDS

SEC.   8-Series and form of bonds.............................................77
         Form of each series must specify the descriptive title of the bonds,
           designation of series, date of coupon bonds, rate of interest,
           date of maturity, dates of interest and place of payment of
           principal and interest and for registration and transfer of bonds..77

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                                                                            PAGE
         Optional provisions:
           (a) Additional places for payments, registration or transfer.......78
           (b) Payment of taxes, creation of sinking fund, conversion of
                 bonds into stock.............................................78
           (c) Exchange of bonds..............................................78
           (d) Redemption.....................................................79
           (e) Other terms and conditions.....................................79
SEC.   9-Kinds and denominations of bonds on original issuance................79
SEC.  10-Dates of registered bonds............................................79
         Date of coupon bonds.................................................79
SEC.  11-Legends on bonds.....................................................79
SEC.  12-Procedure for exchanges of bonds.....................................79
         Charges..............................................................80
SEC.  13-Registration and transfer of bonds...................................80
SEC.  14-Execution of bonds...................................................81
         Execution by former officers.........................................81
         Matured coupons to be detached.......................................81
SEC.  15-Temporary bonds......................................................81
SEC.  16-Bonds in lieu of lost, destroyed or mutilated bonds..................82
SEC.  17-Trustee's certificate................................................83
SEC.  18-Payment of bonds in foreign countries................................83
SEC.  19-Bonds of the 3%% Series due 1970.....................................83
         Limited to $32,000,000...............................................83
         Maturity date........................................................83
         Denominations........................................................83
         Interest rate........................................................84
         Paying Agent.........................................................84
         Date of issue........................................................84
         Redemption...........................................................84
         Premiums.............................................................84
         Premiums on redemption pursuant to Section 69(B).....................85
         Premiums on redemption pursuant to Section 20........................85
         Exchangeability......................................................85
         Registration.........................................................86
SEC.  20-Annual delivery to Trustee, beginning December 1, 1949, of cash
           and/or 1970 Series Bonds...........................................86
         Application of deposited cash........................................87

                                   ARTICLE III

               GENERAL PROVISIONS AS TO CERTIFICATES AND OPINIONS

SEC.  21-Required statements..................................................87
         Accompanying opinion of counsel and certificate of officers..........88
         Basis of certificate or opinion......................................88

                                   ARTICLE IV

                             INITIAL ISSUE OF BONDS

SEC.  22-$32,000,000 of 1970 Series Bonds to be issued forthwith..............89
SEC.  23-Right to have additional $500,000 bonds authenticated................89

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                                    ARTICLE V

                     GENERAL PROVISIONS AS TO ISSUE OF BONDS

SEC.  24-Amount of bonds which may be secured hereby..........................90
         Board of Directors may fix terms of issue of bonds...................90

                                   ARTICLE VI

             ISSUANCE OF BONDS UPON THE BASIS OF PROPERTY ADDITIONS

SEC.  25-Bonds issuable upon basis of property additions......................90
SEC.  26-No bonds issuable upon basis of funded property......................91
SEC.  27-70% of cost or fair value of property additions basis of issuing
           bonds..............................................................91
         Method of determining cost...........................................91
SEC.  28-Conditions of issuing bonds, etc., upon basis of property additions
           subject to prior liens.............................................92
SEC.  29-Net earnings requirements............................................92
SEC.  30-Requirements for issuance by Trustee of bonds upon basis of prop-
           erty additions.....................................................92
           (1)  Resolution....................................................92
           (2)  Treasurer's certificate.......................................93
           (3)  Engineer's certificate........................................93
           (4)  Independent engineer's certificate in certain cases...........94
           (5)  Written appraisal in certain cases............................95
           (6)  Net earnings certificate......................................96
           (7)  Opinion of counsel............................................96
           (8)  Instruments of conveyance, other documents....................98
           (9)  Deposit of prior lien bonds and/or cash.......................98
          (10) Supplemental indenture.........................................98

                                   ARTICLE VII

                   ISSUANCE OF BONDS UPON RETIREMENT OF BONDS
                        PREVIOUSLY OUTSTANDING HEREUNDER

SEC.  31-Requirements.........................................................98
           (1)  Resolution....................................................99
           (2)  Treasurer's certificate.......................................99
           (3)  Opinion of counsel............................................99
           (4)  Certificates or documents specified by counsel...............100
           (5)  Supplemental indenture.......................................100
                 Net earnings certificate required in certain cases..........100

                                  ARTICLE VIII

               ISSUANCE OF BONDS UPON DEPOSIT OF CASH WITH TRUSTEE

SEC.  32-Requirements........................................................101
           (1)  Resolution   ................................................101
           (2)  Treasurer's certificate......................................101

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           (3)  Net earnings certificate.....................................101
           (4)  Opinion of counsel...........................................101
           (5)  Certificates and documents specified by counsel..............101
           (6)  Supplemental indenture.......................................102
SEC.  33-Withdrawal of cash in lieu of issuance of bonds.....................102
SEC.  34-Application of deposited cash to the purchase or redemption of
           bonds.............................................................102

                                   ARTICLE IX

                       PARTICULAR COVENANTS OF THE COMPANY

SEC.  35-Lawful possession; Maintenance of lien; Right to mortgage...........103
SEC.  36-Payment of principal and interest...................................104
SEC.  37-Maintenance of office or agency for payments, etc...................104
SEC.  38-Duties of paying agent other than Trustee...........................104
SEC.  39-Payment of taxes and assessments....................................105
         Discharge of liens..................................................105
SEC.  40-Insurance on property...............................................106
         Application of insurance proceeds received by Company...............107
         Application of insurance proceeds received by Trustee...............107
SEC.  41-I   Covenants as to maintenance.....................................107
             Annual payments to Maintenance and Improvement Fund.............108
             Credits.........................................................108
             Annual Treasurer's certificate; contents thereof................109
             Application of cash in Maintenance and Improvement Fund.........111
             Opinion of counsel for credit under subdivision (b).............111
             Requirements for credit under subdivision (c)...................111
        II   Inspection of mortgaged and pledged property by independent
               engineer......................................................112
             Maintenance report of independent engineer......................112
             Company to remedy any deficiency shown by maintenance
               report........................................................113
             Failure to remedy such deficiency a default.....................113
             Retirement of property, on books................................113
       III   "Gross Operating Revenues of the Company" for Sections 41
               and 47........................................................114
SEC.  42-Maintenance of corporate existence and franchises...................114
SEC.  43-Advances by Trustee.................................................114
SEC.  44-Recording, filing of this Indenture.................................115
           (1) Initial opinion of counsel....................................115
           (2) Annual opinion of counsel.....................................115
SEC.  45-Instruments of further assurance....................................116
SEC.  46-Books and records; inspection thereof...............................116
SEC.  47-Limitations on dividends and distributions and purchase and re-
           demption of stock.................................................117
         Determination of net income.........................................117
         Exceptions to above limitations.....................................118

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         Financial statements to disclose amounts available for dividends,
           etc...............................................................118
         Trustee to be notified of dividend payments, etc....................118
SEC.  48-Observance of covenants.............................................118
SEC.  49-I   Limitations on withdrawal of cash deposited with trustee under
                a prior lien.................................................119
        II   Requirements on discharge of any prior lien.....................120
       III   Limitations on increase of prior lien bonds.....................120

                                    ARTICLE X

          BONDHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

SEC.  50-Company to furnish bondholders' lists to Trustee....................120
SEC.  51-Preservation of information by Trustee..............................121
         Destruction of information by Trustee; conditions thereof...........121
         Access of bondholders to list; conditions thereof...................121
         Alternatives of Trustee to granting access to bondholders' list.....122
SEC.  52-Company to file with Trustee copies of reports filed with Securi-
           ties and Exchange Commission......................................128
         Filing of additional reports, etc., may be required.................128
         Summaries of reports, etc., to be sent to bondholders...............128
         Company to file with Trustee financial statements in certain cases..124
SEC.  58-Annual information to be furnished to bondholders by Trustee........124
           (1)  Eligibility of Trustee.......................................124
           (2)  Advances made by Trustee.....................................124
           (3)  Particulars of indebtedness of the Company to Trustee
                   individually..............................................124
           (4)  Property in possession of Trustee as such....................125
           (5)  Releases of property.........................................125
           (6)  Additional issues of bonds...................................125
           (7)  Performance of Trustee's duties..............................125
         Additional reports..................................................125
           (1)  Releases of property.........................................125
           (2)  Advances made by Trustee.....................................126
         Bondholders entitled to reports.....................................126
         Reports to be filed with Securities and Exchange Commission and
           Stock Exchanges...................................................126

                                   ARTICLE XI

               CONCERNING PRIOR LIEN BONDS DEPOSITED WITH TRUSTEE

SEC.  54-Requirements for deposit of prior lien bonds........................127
SEC.  55-Deposited prior lien bonds to be held as part of pledged property...127
SEC.  56-Right of Trustee to cancel prior lien bonds.........................128
SEC.  57-Rights of Trustee to enforce prior lien bonds.......................128

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                                   ARTICLE XII

                         REDEMPTION OR PURCHASE OX BONDS

SEC.  58-What bonds redeemable...............................................129
SEC.  59-Redemption of part of series........................................129
         Selection by lot....................................................129
         Notice..............................................................129
SEC.  60-Deposit of redemption price with Trustee............................130
SEC.  61-Redemption moneys held in trust.....................................130
         Payment to bondholders..............................................130
         Bonds cease to bear interest........................................131
         Partial redemption of a registered bond.............................131
SEC.  62-Purchase of bonds by Trustee........................................131
         Price...............................................................131
       Procedure.............................................................132
       Interest paid by Company..............................................133
SEC.63-Redeemed and purchased bonds to be canceled...........................133

                                  ARTICLE XIII

          POSSESSION, USE AND RELEASE OF MORTGAGED AND PLEDGED PROPERTY

SEC.  64-Right of Company to possess and enjoy mortgaged and pledged
           property..........................................................133
SEC.  65-What Company may do without release by or consent of Trustee........133
           (1)  Sale of obsolete, etc., property.............................134
           (2)  Cancellation, alteration of contracts........................134
           (3)  Surrender or modification of franchises; conditions thereof..134
SEC.  66-A. Release of property by Trustee...................................134
            Requirements.....................................................135
             (1)  Resolution.................................................135
             (2)  Treasurer's certificate....................................135
             (3)  Engineer's or independent engineer's certificate...........135
             (4)  Consideration; computation thereof.........................135
             (5)  Opinion of counsel in certain cases........................137
            Additional requirements in certain eases.........................137
            Disposition of prior lien bonds, cash, etc., deposited with
              Trustee........................................................139
         B. Release by Trustee of coal mining properties in Sullivan and
              Pike Counties, Indiana, and West Tenth Street property.........139
            Requirements.....................................................139
                (i)  Resolution..............................................139
               (ii) Treasurer's certificate..................................139
              (iii) Consideration............................................139
SEC.  67-Release of certain unimproved real estate...........................140
         Resolution..........................................................140
         Engineer's or independent engineer's certificate....................140
       Deposit of consideration..............................................140
SEC.68-I.  Withdrawal, use, or application of money received by Trustee
             for release of property.........................................141
           Requirements......................................................142

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        II.  Disposition of money not so withdrawn, used or applied within
               three years...................................................143
             Purchase money mortgages on released property...................143
             Substituted property subjected to the lien hereof...............144
             Disposition of deposited bonds and prior lien bonds.............144
SEC.  69-A.  Release of property taken by eminent domain or purchased
               by governmental body..........................................144
             Opinion of counsel..............................................144
             Application of proceeds.........................................144
         B.  Redemption of bonds where substantially all mortgaged prop-
               erty taken by exercise of eminent domain or sold to govern-
               mental body...................................................145
             Deposit of redemption moneys with Trustee.......................145
SEC.  70-Rights of receiver or trustee in possession to releases.............146
         Release by Trustee after default....................................146
SEC.  71-Purchaser in good faith of released property protected..............146

                                   ARTICLE XIV

                REMEDIES OF TRUSTEE AND BONDHOLDERS UPON DEFAULT

SEC.  72-What constitutes "completed default"................................147
         Declaration of principal and interest due upon completed default....148
         Holders of majority in amount of bonds may annul declaration........148
SEC.  73-Trustee to notify bondholders of known defaults; exceptions.........148
SEC.  74-Trustee may take possession.........................................149
         Application of income...............................................149
         When Trustee shall surrender possession to Company..................149
SEC.  75-Power to sell mortgaged and pledged property........................150
         Notice of sale......................................................150
SEC.  76-Judicial proceedings................................................150
         General Remedies....................................................150
         When action by Trustee obligatory...................................150
         Remedies cumulative.................................................151
         Delay, etc., no waiver of rights....................................151
         Waiver of default not to extend to subsequent default...............151
         Expenses of action by trustee to become additional indebtedness
           hereunder.........................................................151
SEC.  77-Holders of a majority in amount of bonds may direct time, method
           and place of proceedings..........................................151
SEC.  78-Appointment of a receiver...........................................152
SEC.  79-All bonds to become due and payable on sale of property.............152
SEC.  80-Property may be purchased by bondholders............................152
SEC.  81-Receipt of Trustee or sale officer as discharge of purchaser........153
SEC.  82-Sale to bar company forever.........................................153
SEC.  83-Disposition of proceeds of sale.....................................153
           (1)  Taxes, costs of sale, compensation of Trustee................153
           (2)  Principal and interest on bonds secured hereby...............154
           (3)  Surplus to Company...........................................154

<PAGE>

SEC.  84-Waiver of advantage of any appraisement, valuation, stay, exten-
           sion or redemption laws, and right to marshal assets..............155
SEC.  85-Right of Trustee to sue for principal and interest as trustee of
           an express trust..................................................155
         Right of Trustee to recover judgment regardless of other
           proceedings.......................................................155
         Lien of Indenture not affected by such judgment or levy of exe-
           cution thereon....................................................156
         Application of moneys so collected..................................156
         Powers of Trustee in reorganization, bankruptcy, etc., proceedings..156
         Trustee irrevocably appointed attorney in fact of bondholders.......157
         Exception...........................................................157
SEC.  86-Possession of bonds unnecessary to action by Trustee................157
SEC.  87-Limitations on rights of bondholders to avail of remedies pro-
           vided by Indenture................................................158
         Right to enforce payment of principal and interest absolute.........158
SEC.  88-Court may require undertaking for costs in certain cases............159
SEC.  89-Waiver of periods of grace..........................................159
         Effect of abandonment, etc., of proceedings hereunder...............159

                                   ARTICLE XV

            EVIDENCE OF RIGHTS OF BONDHOLDERS AND OWNERSHIP OF BONDS

SEC.  90-Execution of instruments by bondholders.............................159
         Proof of execution thereof..........................................160
           (a)  Notary's certificate.........................................160
           (b)  Certificate of Bank, etc.....................................160
         Request, consent, etc., binding future bondholders..................160
SEC.  91-Ownership of temporary or coupon bonds..............................160
         Ownership of registered bonds.......................................161
         Submission of bonds for inspection..................................161

                                   ARTICLE XVI

          IMMUNITY OF INCORPORATORS, SUBSCRIBERS TO THE CAPITAL STOCK,
                      STOCKHOLDERS, OFFICERS AND DIRECTORS

SEC.  92-No recourse clause..................................................161

                                  ARTICLE XVII

                      EFFECT OF MERGER, CONSOLIDATION, ETC.

SEC.  93-Right of Company to merge, consolidate, sell or lease all assets....162
         No impairment of lien...............................................162
         Lease subject to termination........................................168
         Assumption of obligation............................................163
SEC.  94-Rights of successor corporation.....................................163
         Execution of Indenture..............................................163

<PAGE>
         Rights of successor corporation to issue bonds and take other
           action on basis of property additions.............................164
         Conditions precedent................................................164
         Opinion of counsel..................................................165
SEC.  95-Extent of lien in case of consolidation, etc........................165

                                  ARTICLE XVIII

                             CONCERNING THE TRUSTEE

SEC.  96-Eligibility requirements............................................166
         Office of Trustee not to be vacant..................................167
SEC.  97-Acceptance of trust.................................................167
         Degree of care to be exercised by Trustee...........................167
SEC.  98-Limitations on liability of Trustee.................................167
SEC.  99-Recitals are by Company.............................................168
SEC. 100-Limitation on personal liability of Trustee after entry.............168
SEC. 101-Notice by Trustee to Company........................................168
SEC. 102-When Trustee protected in relying on statements of others...........169
SEC. 103-Trustee not responsible for selection of experts; exceptions........169
SEC. 104-Trustee may own bonds as individual.................................169
SEC. 105-Moneys received by Trustee hereunder to be held in trust............169
SEC. 106-Compensation of Trustee.............................................170
         Indemnity of Trustee................................................170
SEC. 107-Proof of matters by certificate.....................................170
SEC. 108-Incidental powers of Trustee........................................171
SEC. 109-Trustee may not have a conflicting interest.........................171
         When Trustee deemed to have a conflicting interest..................172
         Definition of terms used in Section 109(d)..........................174
         "Security"..........................................................174
         "Securities"........................................................174
         "Voting security"...................................................175
         "Director"..........................................................175
         "Executive officer".................................................175
         "Underwriter".......................................................175
         "Company"...........................................................176
         Computation of percentages under subsection (d).....................176
         Application of this section to separate or co-trustee...............177
SEC. 110-Obligation of Trustee as creditor of Company to account.............177
         Exceptions to obligation to account.................................178
         Disposition of special account......................................179
         This section binding on Trustee who has resigned; exceptions........180
         "Default" defined for this section..................................181
         Creditor relationships excluded from this section in certain cases..181
         Definition of terms in this section.................................182
         "Cash transaction"..................................................182
         "Self-liquidating paper"............................................182
         "Trustee"...........................................................183
         "Company"...........................................................183
SEC. 111-Trustee may resign; procedure.......................................183

<PAGE>

SEC. 112-Trustee may be removed; procedure...................................183
SEC. 118-Appointment of successor Trustee; procedure.........................184
         Lien of Trustee after resignation or removal........................185
SEC. 114-Appointment of separate or co-trustee...............................185
         Conditions subject to which separate or co-trustee is to be
           appointed.........................................................185
           (1)  Rights, etc., to be exercised jointly........................186
           (2)  Authentication, etc., of bonds...............................186
           (3)  Removal or resignation of separate or co-trustee; appoint-
                  ment of successor..........................................186
           (4)  No personal liability for acts of other trustees.............186
         Notices to trustees.................................................187
         Contents, filing, etc., of instrument appointing trustee............187
         Separate or co-trustee may appoint Trustee as agent.................187
         Effect of resignation, incapacity, etc., of separate or co-trustee..187
SEC. 115-Instruments to be executed by successor trustee.....................187
         Requirements of predecessor on retiring.............................188
SEC. 116-Effect of merger or consolidation of Trustee........................188

                                   ARTICLE XIX

                              DISCHARGE OF MORTGAGE

SEC. 117-Discharge of mortgage by Trustee....................................189
         When bonds deemed paid..............................................189

                                   ARTICLE XX

                             MEETINGS OF BONDHOLDERS

SEC. 118-Modification of Indenture...........................................190
SEC. 119-Call of meeting by Trustee..........................................190
         Call of meeting by bondholders......................................190
         Place, when called by Trustee.......................................190
         Written notice......................................................190
         Published notice....................................................191
         Place, when called by Company or bondholders; notice................191
         When notice not required............................................191
SEC. 120-Attendance at meetings..............................................191
         Certificate in lieu of production of unregistered bonds.............191
SEC. 121-Persons entitled to vote at meetings................................192
         Further conditions of voting........................................192
         Proxies.............................................................192
SEC. 122-Temporary chairman and secretary....................................192
         Permanent chairman and secretary....................................193
         Inspectors of votes.................................................193
SEC. 123-Quorum..............................................................193
         Notice of adjournment...............................................193
SEC. 124-Vote required for modification, alteration, etc., of Indenture
           and/or rights thereunder; limitations thereon.....................194
         Opinion of counsel..................................................195

<PAGE>

SEC. 125-Record of meetings..................................................195
         Conclusiveness of record............................................195
         Copy of resolutions to be mailed to bondholders.....................196
         Necessity of approval of resolutions by Company.....................196
         When Company, Trustee and bondholders bound.........................196
         Proviso.............................................................196
SEC. 126-Notation on bonds of action taken...................................196
         New bonds may be issued.............................................197
         Supplemental indentures may be executed; compliance with
         Trust Indenture Act.................................................197
SEC. 127-Company may stipulate that provisions of this article shall be of
           no effect in certain cases........................................197

                                   ARTICLE XXI

                                  MISCELLANEOUS

SEC. 128-Limitation of rights hereunder......................................197
SEC. 129-Investment of cash by Trustee in certain securities.................198
         Investments part of pledged property................................198
SEC. 130-Deposit with Trustee of funds to pay overdue bonds and coupons......199
         When Trustee to pay over to Company amount unclaimed................199
SEC. 131-Rights hereunder may be waived by Company...........................199
         Company may make further covenants..................................199
         Correction of ambiguities, etc......................................200
         Supplemental instruments............................................200
SEC. 132-Successors and assigns..............................................200
SEC. 133-Trust Indenture Act requirements control............................200
SEC. 134-"Trust Indenture Act" defined.......................................200
SEC. 135-Titles of articles not a part hereof................................200
SEC. 136-Execution in counterparts...........................................201

Testimonium..................................................................201
Signatures and seals.........................................................201
Acknowledgments..............................................................202

<PAGE>

     Indenture, made as of the first day of May, 1940 between INDIANAPOLIS POWER
& LIGHT COMPANY,  a corporation of the State of Indiana,  hereinafter  sometimes
called the  Company,  party of the first part,  and AMERICAN  NATIONAL  BANK AND
TRUST COMPANY OF CHICAGO, a national banking association,  hereinafter sometimes
called the Trustee, party of the second part;

     WHEREAS, the Company desires to borrow money for its corporate purposes and
to issue its bonds  therefor  from  time to time in one or more  series,  and to
mortgage and pledge its property hereinafter  described or mentioned,  to secure
the payment of the same,  such bonds to be coupon bonds and/or fully  registered
bonds,  authenticated  by the certificate of the Trustee and issuable as in this
Indenture  hereinafter provided,  such coupon bonds,  coupons,  fully registered
bonds and Trustee's  certificate  to be  substantially  in the forms  following,
respectively,  with such  insertions,  omissions and  variations as the Board of
Directors of the Company may determine in accordance with the provisions of this
Indenture:

                         [GENERAL FORM OF COUPON BOND]

                       INDIANAPOLIS POWER & LIGHT COMPANY

                               First Mortgage Bond

$______________     ________________Series________________   No.________________

     INDIANAPOLIS  POWER & LIGHT COMPANY,  a corporation of the State of Indiana
(hereinafter called the Company), for value received,  hereby promises to pay to
the bearer,  or, if this bond be registered,  to the registered owner hereof, on
__________________,  __________,  at the  office  or agency  of the  Company  in
_______________, _______________________________  Dollars in lawful money of the
United  States of America,  and to pay interest  thereon from the date hereof at
the rate of  _____________  per centum per annum in like lawful  money,  at said
office or agency on ____________________ and  ___________________  in each year,
until the  Company's  obligation  with respect to the payment of such  principal
shall have been  discharged,  but only, in the case of interest due on or before
maturity,  according  to the tenor and upon  presentation  and  surrender of the
respective coupons therefor hereto attached, as they severally mature.

     This bond is one of an issue of bonds of the  Company,  issuable in series,
and is one of a series known as its First Mortgage Bonds, ______________  Series
____________,  all bonds of all series issued and to be issued under and equally
secured  (except  in so  far  as any  sinking  or  other  fund,  established  in
accordance with the provisions of the Mortgage hereinafter mentioned, may afford
additional  security for the bonds of any  particular  series) by a Mortgage and
Deed of Trust (herein called the Mortgage), dated as of May 1, 1940, executed by
the Company to American National Bank and Trust Company of Chicago,  as Trustee,
to which  reference  is made for a  description  of the property  mortgaged  and
pledged,  the nature and extent of the  security,  the rights of the  bearers or
registered owners of the bonds in respect thereof,  the duties and immunities of
the Trustee and the terms and conditions upon which the bonds are secured.  With
the consent of the Company and to the extent permitted by and as provided in the
Mortgage, the rights and obligations of the Company and/or of the holders of the
bonds and/or coupons  and/or the terms and provisions of the Mortgage  and/or of
any instruments  supplemental  thereto may be modified or altered by affirmative
vote of the holders of at least sixty-six and two-thirds per centum (66 2/3%) in
principal amount of the bonds affected by such modification or alteration,  then
outstanding  under the Mortgage  (excluding  bonds  disqualified  from voting by
reason of the Company's interest therein as provided in the Mortgage);  provided
that no such  modification  or  alteration  shall  permit the  extension  of the
maturity of the  principal of this bond or the reduction in the rate of interest
hereon or any other  modification  in the terms of payment of such  principal or
interest without the consent of the holder hereof.

     The principal  hereof may be declared or may become due on the  conditions,
in the manner and at the time set forth in the Mortgage,  upon the occurrence of
a completed default as in the Mortgage provided.

     This bond shall pass by delivery  unless  registered as to principal in the
owner's name at the office or agency of the Company in  _______________________,
and such registration noted hereon,  after which no valid transfer hereof can be
made,  except at such  office or agency,  until  after  registered  transfer  to
bearer,  but after such  registered  transfer to bearer this bond shall be again
transferable  by  delivery.  Such  registration,  however,  shall not affect the
negotiability  of the coupons,  which shall always remain  payable to bearer and
transferable  by  delivery.  The  Company and the Trustee may deem and treat the
bearer of this bond if it be not registered as to principal, or, if this bond is
registered  as  herein  authorized,  the  person  in  whose  name  the  same  is
registered,  and the bearer of any coupon hereto  appertaining,  as the absolute
owner for the purpose of receiving payment and for all other purposes.

     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,  as such,  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, as such, being released by the owner hereof by the acceptance of this
bond and being likewise waived and released by the terms of the Mortgage.

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

     IN WITNESS WHEREOF, Indianapolis Power & Light Company has caused this bond
to be signed in its name by its President or one of its  Vice-Presidents and its
corporate  seal to be affixed hereto and attested by its Secretary or one of its
Assistant  Secretaries,  and interest coupons bearing the facsimile signature of
its Treasurer to be attached hereto.

Dated,

                                     INDIANAPOLIS POWER & LIGHT COMPANY,

                                       By
                                         ---------------------------------------
                                                                      President.

Attest:

-------------------------------------
                     Secretary.

                            [GENERAL FORM OF COUPON]

$______________     ________________Series________________   No.________________

     On __________________,  ______, INDIANAPOLIS POWER & LIGHT COMPANY will pay
to    bearer    at   its    office    or    agency    in    ___________________,
___________________________  Dollars  in lawful  money of the  United  States of
America,  as specified in its First Mortgage  Bond, ______  Series  ______,  No.
_______, being six months' interest then due on said bond.

     This coupon will not be payable if said bond shall have  previously  become
payable or been called for previous redemption and payment duly provided for.

                                        ----------------------------------------
                                                                 Treasurer.

<PAGE>

                     [GENERAL FORM OF FULLY REGISTERED BOND]

                       INDIANAPOLIS POWER & LIGHT COMPANY

                               FIRST MORTGAGE BOND

$______________     ________________Series________________   No.________________

     INDIANAPOLIS  POWER & LIGHT COMPANY,  a corporation of the State of Indiana
(hereinafter called the Company), for value received,  hereby promises to pay to
_____________________________________________    or   registered   assigns,   on
______________,   ________,   at  the  office  or  agency  of  the   Company  in
___________________________________, ________________________________ Dollars in
lawful money of the United States of America, and to pay to the registered owner
hereof interest thereon from the _____________ or _______________ next preceding
the date of this bond,  at the rate of _____ per centum per annum in like lawful
money, at said office or agency on _________________ and  ___________________ in
each year,  until the Company's  obligation  with respect to the payment of such
principal shall have been discharged.

     This bond is one of an issue of bonds of the  Company,  issuable in series,
and is one of a series  known  as its  First  Mortgage  Bonds,  ________  Series
________,  all bonds of all  series  issued and to be issued  under and  equally
secured  (except  in so  far  as any  sinking  or  other  fund,  established  in
accordance with the provisions of the Mortgage hereinafter mentioned, may afford
additional  security for the bonds of any  particular  series) by a Mortgage and
Deed of Trust (herein called the Mortgage), dated as of May 1, 1940, executed by
the Company to American National Bank and Trust Company of Chicago,  as Trustee,
to which  reference  is made for a  description  of the property  mortgaged  and
pledged,  the nature and extent of the  security,  the rights of the  bearers or
registered owners of the bonds in respect thereof,  the duties and immunities of
the Trustee and the terms and conditions upon which the bonds are secured.  With
the consent of the Company and to the extent permitted by and as provided in the
Mortgage, the rights and obligations of the Company and/or of the holders of the
bonds and/or coupons  and/or the terms and provisions of the Mortgage  and/or of
any instruments  supplemental  thereto may be modified or altered by affirmative
vote of the holders of at least sixty-six and two-thirds per centum (66 2/3%) in
principal amount of the bonds affected by such modification or alteration,  then
outstanding  under the Mortgage  (excluding  bonds  disqualified  from voting by
reason of the Company's interest therein as provided in the Mortgage);  provided
that no such  modification  or  alteration  shall  permit the  extension  of the
maturity of the  principal of this bond or the reduction in the rate of interest
hereon or any other  modification  in the terms of payment of such  principal or
interest without the consent of the holder hereof.

     The principal  hereof may be declared or may become due on the  conditions,
in the manner and at the time set forth in the Mortgage,  upon the occurrence of
a completed default as in the Mortgage provided.

<PAGE>

     This bond 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  ____________________________,  upon  surrender  and
cancellation  of this  bond and upon  presentation  of a written  instrument  of
transfer,  duly executed,  and upon payment, if the Company shall require it, of
the transfer charges  prescribed in the Mortgage,  and,  thereupon,  a new fully
registered bond of the same series for a like principal amount will be issued to
the transferee in exchange herefor as provided in the Mortgage.  The Company and
the Trustee may deem and treat the person in whose name this bond is  registered
as the absolute  owner  hereof for the purpose of receiving  payment and for all
other purposes.

     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,  as such,  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, as such, being released by the owner hereof by the acceptance of this
bond and being likewise waived and released by the terms of the Mortgage.

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

     IN WITNESS WHEREOF, INDIANAPOLIS POWER & LIGHT COMPANY has caused this bond
to be signed in its name by its President or one of its  Vice-Presidents and its
corporate  seal to be affixed hereto and attested by its Secretary or one of its
Assistant Secretaries.
Dated,

                                  INDIANAPOLIS POWER & LIGHT COMPANY,

                                    By
                                      ------------------------------------------
                                                                     President.

Attest:

---------------------------------------
                      Secretary.

<PAGE>

                  [FORM OF TRUSTEE'S CERTIFICATE ON ALL BONDS]

     This bond is one of the bonds,  of the series herein  designated,  provided
for in the within- mentioned Mortgage.

                                   AMERICAN NATIONAL BANK AND TRUST COMPANY
                                                  OF CHICAGO,

                                                                   Trustee

                                      By
                                        ----------------------------------------
                                                            Authorized Officer.

and

     WHEREAS, all things necessary to make said bonds when duly authenticated by
the Trustee and issued by the Company,  valid,  binding and legal obligations of
the Company,  and to make this Indenture a valid,  binding and legal  instrument
for the security thereof, have been performed, and the issue of said bonds as in
this Indenture provided has been in all respects duly authorized;

     Now, THEREFORE, THIS INDENTURE WITNESSETH:  That Indianapolis Power & Light
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 in order to secure the payment both
of the principal of and interest and premium,  if any, on the bonds from time to
time issued  hereunder,  according to their tenor and effect and the performance
of all the provisions hereof (including any instrument  supplemental  hereto and
any  modification or alteration made as in this Indenture  provided) and of said
bonds, hath granted, bargained, sold, released, conveyed, assigned, transferred,
mortgaged,  pledged,  set over and confirmed,  and by these presents doth grant,
bargain, sell, release, convey, assign, transfer, mortgage, pledge, set over and
confirm unto American  National  Bank and Trust Company of Chicago,  as Trustee,
and to its  successor  or  successors  in said  trust and its and their  assigns
forever, all the following described properties of the Company, that is to say:

<PAGE>

                                     PART I.

                     REAL PROPERTY IN THE COUNTY OF MARION,
                                STATE OF INDIANA.

     All the right,  title,  and interest of the Company in and to the following
described and numbered parcels or tracts of land situate in the County of Marion
in the State of Indiana,  together with all building  structures,  improvements,
machinery,  and equipment of every  description now or hereafter affixed thereto
or stationed thereon or appertaining thereto, to wit:

                       GROUP ONE--MAIN GENERATING STATIONS

                           A. HARDING STREET STATION.

     Harding  Street  electric  generating  plant  has  two  35,000  KW  turbine
generators with two direct-connected  house generators of 1750 KW capacity each.
Steam for the turbines is supplied by eight  boilers each capable of  delivering
160,000  pounds  of  steam  per  hour at 400  pounds  pressure  and  700(degree)
temperature  Fahrenheit.  The boilers are  equipped  with  automatic  combustion
control,  forced and induced draft,  complete  water,  steam,  and coal metering
equipment, economizers,  preheater superheaters, a Hydrojet ash sluicing system,
and a complete water  softening  system.  The condensing  water system  includes
screen-house pumps, ducts, dams, and chlorination system. A complete transformer
substation  at this plant  contains  six 14,583 KVA 13,800 volt to 132,000  volt
transformers,  delivering output to the 132,000 volt transmission belt line that
encircles  the City of  Indianapolis.  A 2,500 KVA 132,000  volt to 2,400 volt 3
phase  transformer  provides  emergency  service  back into the power  plant for
station  auxiliary  operation.  A single circuit  132,000 volt line owned by the
Company  connects this substation to lines of Public Service Company of Indiana,
located   approximately  one  mile  south  of  this  plant,  for  emergency  and
interchange of power. Coal handling and storage facilities at this plant include
62,000 ton storage  capacity in a concrete  pit served by Gantry  crane and belt
convey  system,  and  2,600 ton  capacity  in boiler  house  bunkers,  served by
conveyor belt system.  Complete trackage and switching  facilities  connect this
plant with a railroad approximately one mile east.

     Harding  Street  Station is located on lands  described in Parcels 1 to 16,
both inclusive, as follows:

     1. A part of the southeast  quarter of Section  Twenty-Seven  (27) Township
Fifteen (15) North, Range Three (3) East,  described as follows:  Beginning at a
point  on  the  west  line  of  said  quarter  section  located  eleven  hundred
ninety-eight and thirty-three  hundredths (1198.33) feet south of the north line
of  said  quarter  section;   thence  east  thirteen  hundred   fifty-eight  and
four-tenths  (1358.4)  feet;  thence  north one  hundred  eight and  sixty-seven
hundredths   (108.67)  feet;  thence  west  thirteen  hundred   fifty-seven  and
nine-tenths  (1357.9)  feet;  thence  south one  hundred  eight and  sixty-seven
hundredths  (108.67)  feet,  to the  point of  beginning,  containing  three and
thirty-eight hundredths (3.38) acres, more or less.

<PAGE>

     2. A part of the southeast quarter of Section  Twenty-Seven (27),  Township
Fifteen (15) North, Range Three (3) East,  described as follows:  Beginning at a
point on the west line of said quarter  section located  thirteen  hundred seven
(1307) feet south of the north line of quarter  section;  thence  east  thirteen
hundred  fifty-eight  and  nine-tenths  (1358.9) feet;  thence north one hundred
eight and  sixty-six  hundreds  (108.66)  feet;  thence  west  thirteen  hundred
fifty-eight  and four-tenths  (1358.4) feet;  thence south one hundred eight and
sixty-six hundredths (108.66) feet, to the point of beginning;  containing three
and thirty-eight hundredths (3.38) acres, more or less.

     3. A part of the southeast quarter of Section  Twenty-Seven (27),  Township
Fifteen (15) North, Range Three (3) East,  described as follows:  Beginning at a
point on the west line of said quarter section  located ten hundred  eighty-nine
and  sixty-seven  hundredths  (1089.67)  feet  south of the  north  line of said
quarter  section;  thence east  thirteen  hundred  fifty-seven  and  nine-tenths
(1357.9)  feet;  thence  north  one  hundred  eight and  sixty-seven  hundredths
(108.67) feet; thence west thirteen hundred fifty-seven and four-tenths (1357.4)
feet; thence south one hundred eight and sixty-seven hundredths (108.67) feet to
the point of beginning;  containing  three and  thirty-eight  hundredths  (3.38)
acres, more or less.

     4. A part of the southwest quarter of Section Twenty-Seven (27) in Township
Fifteen (15) North, Range Three (3) East, described as follows: Beginning on the
east line of said quarter  section at a point  distant seven hundred sixty (760)
feet,  six (6) inches,  south of the northeast  corner of said quarter  section;
running  thence  south  along  and with the east  line of said  quarter  section
eighty-eight  (88) feet to a point;  thence  west  parallel to the north line of
said quarter  section four  hundred  ninety- five (495) feet to a point;  thence
north parallel to the east line of said quarter section  eighty-eight  (88) feet
to a point;  thence east parallel to the north line of said quarter section four
hundred  ninety- five (495) feet to the place of beginning;  containing  one (1)
acre, more less.

     5. A part of the southwest quarter of Section  Twenty-Seven (27),  Township
Fifteen (15) North, Range Three (3) East, described as follows: Beginning on the
east line of said quarter  section at a point distant eight hundred  forty-eight
(848)  feet,  six (6)  inches,  south of the  northeast  corner of said  quarter
section;   running  thence  south  along  and  with  the  east  line  aforesaid,
eighty-eight  (88)  feet,  more or less,  to a point on said east  line  distant
seventeen  hundred  forty-five (1745) feet six (6) inches north of the southeast
corner of said quarter section;  thence west, parallel to the north line of said
quarter section,  four hundred  ninety-five (495) feet to a point; thence north,
parallel to the east line of said quarter section  eighty-eight  (88) feet, more
or less;  thence east  parallel to the north line of said  quarter  section four
hundred  ninety-five  (495) feet, to the place of beginning;  containing one (1)
more or less.

     6. A part of the southwest quarter of Section  Twenty-Seven (27),  Township
Fifteen (15) North, Range Three (3) East, described as follows: Beginning on the
east line of said quarter section at a point distant sixteen hundred fifty-seven
(1657)  feet  six (6)  inches  north of the  southeast  corner  of said  quarter
section;  and running  thence south along and with the east line of said quarter
section two hundred  sixty-four  (264) feet to a point;  thence west parallel to
the north line of said quarter section four hundred  ninety-four (494) feet to a
point;  thence  north  parallel  to the east line of said  quarter  section  two
hundred sixty-four (264) feet to a point; thence east parallel to the north line
of said  quarter  section four  hundred  ninety-four  (494) feet to the place of
beginning; containing three (3) acres of land, more or less.

     7. A part of the east half of the southeast quarter of Section Twenty-Seven
(27),  Township Fifteen (15) North, Range Three (3) East,  described as follows:
Beginning  at a point  fifty  (50) feet  west of the east line of the  southeast
quarter of said section,  six hundred seventy (670) feet south of the north line
of said quarter section;  running thence south parallel to the east line of said
quarter  section seven hundred  forty and  nine-tenths  (740.9) feet to a point;
running thence west three hundred five and sixty-five  hundredths  (305.65) feet
to a point;  thence north and parallel to the east line of said quarter  section
seven hundred forty and eighty-five  hundredths  (740.85) feet to a point, which
point is six hundred  seventy and sixty-five  hundredths  (670.65) feet south of
the north line of said  quarter  section;  thence east and parallel to the north
line of said quarter  section  three hundred  three and  twenty-five  hundredths
(303.25) feet to the place of beginning.

     8. A part of the east half of the southeast quarter of Section Twenty-Seven
(27),  Township Fifteen (15) North, Range Three (3) East,  described as follows:
Beginning at a point six hundred seventy and  seven-tenth  (670.7) feet south of
the north line and six hundred  seventy-six and five-tenths (676.5) feet west of
the east line of said quarter section;  running thence south seven hundred forty
and  eight-tenths  (740.8)  feet;  thence  east  three  hundred  twenty-six  and
sixty-five  hundredths  (326.65)  feet;  thence  north seven  hundred  forty and
seventy-five  hundredths  (740.75) feet; thence west three hundred  twenty-three
and twenty-five  hundredths (323.25) feet to the place of beginning;  containing
five and fifty-one hundredths (5.51) acres, more or less.

     9. A part of the southeast quarter of Section  Twenty-Seven (27),  Township
Fifteen (15) North, Range Three (3) East,  described as follows:  Beginning at a
point fourteen  hundred eleven and five-tenths  (1411.5) feet south of the north
line of said quarter  section and thirteen  hundred  forty- seven and six-tenths
(1347.6)  feet west of the east line of said  quarter  section;  thence east six
hundred  sixty-six and  three-tenths  (666.3)  feet;  thence north three hundred
seventy-seven and nine- tenths (377.9) feet; thence west six hundred sixty-three
and  nine-tenths  (663.9)  feet;  thence south three hundred  seventy-seven  and
eighty-five hundredths (377.85) feet to the place of beginning;  containing five
and seventy-six hundredths (5.76) acres, more or less.

     10. A part of the southwest  quarter of Section  Twenty-Seven  (27) and the
southeast  quarter of Section  Twenty-Eight  (28), all in Township  Fifteen (15)
North of Range Three (3) East, described as follows: Beginning at a point in the
middle line of the old bed of White River at its intersection with the west line
of said Section Twenty-Seven (27) at a point distant six hundred five (605) feet
north of the  southwest  corner of said  Section  Twenty-Seven  (27) and running
thence along and with the said middle line of the old bed of White River,  south
sixty-two  (62) degrees west three hundred (300) feet;  thence south  eighty-six
(86)  degrees  west  two  hundred  (200)  feet;   thence  north  eighty-two  and
three-fourths  (82 3/4)  degrees  west three  hundred  (300) feet;  thence north
forty-four (44) degrees west four hundred (400) feet;  thence north  thirty-nine
and one-half (39 1/2) degrees west seven hundred  thirty-five  (735) feet to the
new  channel  of White  River;  thence  along  and with the east side of the new
channel of White River north  twenty-one (21) degrees west ninety-two (92) feet;
thence north thirty-two and one-fourth (32 1/4) degrees east two hundred seventy
feet;  thence north fifty and one-half (50 1/2) degrees east  eighty-three  (83)
feet; thence north  seventy-three and one-half (73 1/2) degrees east one hundred
twenty (120) feet;  thence south  eighty-one and  three-fourth  (81 3/4) degrees
east three hundred and eight (308) feet; thence north seventy-eight (78) degrees
east two hundred  fifty-eight  (258) feet;  thence north forty-four and one-half
(44 1/2) degrees east two hundred  eighty-eight  (288) feet; thence north twenty
and one-half  (20 1/2)  degrees  east two hundred four (204) feet;  thence north
thirty (30) degrees  west two hundred  eighty five (285) feet to the middle line
of the old bed of said White River; thence along with the middle line of the old
bed of White River south  eighty-nine  and  one-half (89 1/2) degrees east three
hundred (300) feet thence south  eighty-seven and three-fourths (87 3/4) degrees
east one  thousand  one  hundred  (1100)  feet;  thence  south  sixty-eight  and
one-fourth  (68 1/4)  degrees  east  three  hundred  (300)  feet;  thence  south
thirty-five  and  three-fourths  (35 3/4) degrees east three  hundred  fifty-one
(351) feet;  thence south four (4) degrees west two hundred  (200) feet;  thence
south  thirty-seven  (37) degrees west three  hundred  (300) feet;  thence south
forty-five  (45) degrees west four hundred (400) feet;  thence south  sixty-five
(65)  degrees  west  four  hundred  (400)  feet;  thence  south  fifty-five  and
one-fourth (55 1/4) degrees west two hundred (200) feet; thence south fifty (50)
degrees  west  five  hundred  twenty  (520)  feet  to the  place  of  beginning;
containing  seventy-eight and sixty-four  hundredths (78.64) acres of land, more
or less, of which thirty-nine (39) are in said Section Twenty-Seven (27).

     11. A part of the southwest quarter of Section  Twenty-Seven (27), Township
Fifteen (15) North, Range Three (3) East, described as follows: Beginning in the
north  line of the  said  southwest  quarter  at a point  distant  four  hundred
ninety-five (495) feet west of the northeast corner of said quarter section; and
running  thence  south,  parallel to the east line of said  quarter  section one
thousand twenty-four (1024) feet six (6) inches to a point; thence east parallel
to the north line of said quarter section, one (1) foot to a point; thence south
parallel  to the east line of said  quarter  section  sixty-four  (64) feet to a
point;  thence west  parallel  to the north line of said  quarter  section,  one
hundred (100) feet to a point;  thence north  sixty-eight  and one-half (68 1/2)
degrees  west  two  hundred  forty-six  (246)  feet  to a  point;  thence  north
seventy-seven  (77) degrees  west four  hundred  thirty (430) feet to the middle
line of the old bed of White River; thence with the said middle line of said old
bed of White River,  north four (4) degrees east, one hundred  sixty-four  (164)
feet to a point;  thence north  thirty-five and  three-fourths  (35 3/4) degrees
west  one  hundred  sixty-six  (166)  feet to a point  in the  west  line of the
northeast quarter of said southwest quarter section; thence north along and with
the said west line of said quarter  quarter  section six hundred  thirteen (613)
feet more or less to the north line of said quarter  section;  thence east along
and with said north line eight hundred  thirty-three  (833) feet more or less to
the place of beginning;  containing  eighteen and forty- one hundredths  (18.41)
acres;  more or less.  Also all that  portion  of the  northwest  quarter of the
southwest  quarter of Section  Twenty-Seven  (27),  Township Fifteen (15) North,
Range  Three (3) East,  which lies  north of the  middle  line of the old bed of
White River; containing fourteen (14) acres.

     12. A part of the southwest quarter of Section  Twenty-Seven (27), Township
Fifteen (15) North, Range Three (3) East, described as follows: Beginning in the
east line of said quarter  section at a point  distant  nine hundred  thirty-six
(936) feet six (6) inches more or less,  south of the  northeast  corner of said
quarter section; and running thence south along and with the east line aforesaid
eighty-  eight (88) feet to a point in said east line  distant  sixteen  hundred
fifty-seven  (1657) feet six (6) inches  north of the  southeast  corner of said
quarter section;  thence west parallel to the north line of said quarter section
four hundred  ninety-five  (495) feet to a point;  thence north  parallel to the
east line of said quarter section eighty-eight (88) feet to a point; thence east
parallel to the north line of said  quarter  section  four  hundred  ninety-five
(495) feet to the place of beginning;  containing one (1) acre of land,  more or
less.

     13. The north 1/2 of the  northwest  1/4 of Section 34,  Township 15 North,
Range 3 East,  in Marion  County,  Indiana,  also part of the  southwest  1/4 of
Section  27,  Township  15  North,  Range 3 East,  in  Marion  County,  Indiana,
described as follows:

     Beginning at the  southeast  corner of said quarter and running  north with
the east line thereof 1,393 1/2 feet;  thence west parallel to the north line of
said 1/4,  494 feet,  thence  north  parallel to the east line of said 1/4,  200
feet; thence west parallel to the north line of said 1/4, 100 feet; thence north
68 1/2  degrees  west 246 feet;  thence  north 77  degrees  west 430 feet to the
center  of the old bed of White  River;  thence  south 4  degrees  west 36 feet;
thence  south 37 degrees  west 300 feet;  thence south 45 degrees west 400 feet;
thence  south 65 degrees  west 400 feet;  thence  south 55 1/4 degrees  west 200
feet;  thence  south 50 degrees  west 520 feet to the west line of said  quarter
section;  thence south 605 feet to the southwest corner of said quarter;  thence
east 2,655 feet to the beginning.

     Also the south 1/2 of the northwest  1/4 of Section 34,  Township 15 North,
Range 3 East, in Marion County,  Indiana,  except,  however,  15 acres,  more or
less, off of the entire south side of said  northwest 1/4 section,  described as
follows, to-wit:

     Beginning at the southeast corner of said northwest quarter of said Section
34;  thence north 247.5 feet;  thence  westerly  parallel with the south line of
said  northwest  quarter to the west line of said Section 34; thence south 247.5
feet to the southwest corner of said northwest quarter; thence east to the point
of beginning.

     Also except the following described tract:

     Part of the northwest 1/4 of Section 34,  Township 15 North,  Range 3 East,
more particularly described as follows, to-wit:

     Beginning at a point on the east line of the  northwest  1/4 of Section 34,
Township 15 North,  Range 3 East,  247.5 feet north of the  southeast  corner of
said  northwest  1/4,  running thence west 2676.87 feet to the west line of said
Section 34,  thence north 757.75 feet to a point in said west line,  thence east
2667.7  feet to a point in the east line of said  northwest  1/4,  thence  south
along  said  east  line of said  northwest  1/4,  757.75  feet to the  point  of
beginning, containing 46.46 acres, more or less.

<PAGE>

     14. Part of the  southeast  Fractional  Quarter of Section 28,  Township 15
North, Range 3 East of the Second Principal Meridian, in Marion County, Indiana,
more particularly described as follows, to-wit:

     Beginning  at the  northeast  corner  of said  southeast  quarter  section,
running  thence south 88 degrees  24-18/29  minutes west along the north line of
said  quarter  section  735.00 feet to a point on the present east bank of White
River,  thence south 31 degrees  31-29/40  minutes west 1215.36 feet to a point,
thence  north 50  degrees 30 minutes  east 83 feet,  thence  north 73 degrees 30
minutes  east,  120 feet,  thence south 81 degrees  10-7/29  minutes east 357.93
feet,  thence north 78 degrees east 258 feet, thence north 44 degrees 30 minutes
east 288 feet, thence north 20 degrees 30 minutes east 204 feet, thence north 30
degrees west 285 feet,  thence south 89 degrees 30 minutes east 300 feet, thence
south 87 degrees 45 minutes east 158.60 feet to a point on the east line of said
southeast  quarter  section,  thence north 0 degrees 42-11/29 minutes west along
said east line  336.34 feet to the  northeast  corner of said  quarter  section,
being the place of beginning.

     Also,  part of the  southeast  fractional  quarter of Section 28 aforesaid,
more particularly described as follows, to-wit:

     For a  point  of  beginning,  begin  at a  point  on the  east  line of the
southeast 1/4 of Section 28, Township 15 North,  Range 3 East, which is 605 feet
distant from and north 0 degrees 42-11/29 minutes west from the southeast corner
of said quarter section,  thence south 62 degrees west 300 feet, thence south 86
degrees west 200 feet;  thence north 82 degrees 45 minutes west 300 feet, thence
north 44 degrees west 400 feet, thence north 39 degrees 30 minutes west 567 feet
to a point on the west bank of White River which is the point of beginning. From
said point of beginning,  continuing  in a straight  line in the last  mentioned
course 168 feet to a point;  thence  north 21  degrees  west 92 feet to a point;
thence  north 32 degrees 15 minutes  east 270 feet to a point;  thence  north 50
degrees 30 minutes  east 83 feet to a point;  thence north 73 degrees 30 minutes
east 120 feet to a point;  thence south 81 degrees  10-7/29 minutes east 10 feet
more or less to a point in the west bank of White River, thence down stream with
said White River to the point of beginning.

     Also part of the southeast fractional quarter of Section 28 aforesaid, more
particularly described as follows, to-wit:

     For a point  of  beginning,  begin  at a  point  on the  east  line of said
southeast  quarter  section  which is 605 feet  distant from the north 0 degrees
42-11/29  minutes west from the southeast  corner of said  southeast one quarter
section,  thence  south 62  degrees 0 minutes  west 300  feet,  thence  south 86
degrees 0 minutes  west 200 feet,  thence  north 82 degrees 45 minutes  west 300
feet;  thence  north 44 degrees  west 400 feet to a point of  beginning,  thence
north 82 degrees  22-2/3  minutes  West 63.94 feet,  thence  north 38 degrees 45
minutes  west  149.60  feet,  thence  north 31 degrees 0 minutes  west 183 feet,
thence north 83 degrees west 166.89 feet, thence north 77 degrees 0 minutes east
22.56 feet, thence north 31 degrees west 306.47 feet, thence north 32 degrees 15
minutes  east  98.02  feet to a point on the west line of the land  conveyed  to
Indianapolis  Power & Light  Company by  Indianapolis  Light and Heat Company by
deed recorded in Town Lot Record 784, page 11 in the office the Recorder of said
Marion  County,  thence  with the  southwest  line  said land  conveyed  to said
Indianapolis  Power & Light Company by said Indianapolis  Light and Heat Company
south 21 degrees east 92.00 feet,  thence with the  southwest  line of said land
conveyed to said Indianapolis  Power & Light Company by said Indianapolis  Light
and Heat  Company  south 39 degrees 30 minutes  east 735.00 feet to the place of
beginning, containing 1.1018 acres, more or less.

     Also,  part of the  southeast  fractional  quarter of Section 28 aforesaid,
more particularly described as follows, to-wit:

     Beginning  at a point which is 21.65 chains or 1428.90 feet due west of the
east line of said southeast  quarter section,  and 17.43 chains 1150.38 feet due
north of the south  line of said  southeast  quarter  section,  thence  south 77
degrees 0 minutes  west 204.20  feet,  thence  north 39 degrees 30 minutes  west
136.80 feet,  thence north 32 degrees 15 minutes east 240.12 feet,  thence south
31 degrees 0 minutes  east  306.47  feet to the place of  beginning,  containing
1.0412 acres, more or less.

     Also, part of the southeast  fractional  quarter of Section 28,  aforesaid,
more particularly described as follows, to-wit:

     For a  point  of  beginning,  being  at a  point  on the  east  line of the
southeast  one-quarter  of said  Section 28,  which is 605 feet distant from the
north 0 degrees 42-11/29 minutes west from the southeast corner said one-quarter
section,  thence  south 54  degrees  west 145 feet,  thence  south 72 degrees 45
minutes west 200 feet,  thence  south 80 degrees west 100 feet,  thence due west
200 feet,  thence  north 69 degrees 15 minutes  west 160 feet,  thence  north 55
degrees 15 minutes  west 200 feet,  thence  north 49 degrees 0 minutes  west 200
feet,  thence  north  38  degrees  45  minutes  west  50.40  feet to a point  of
beginning;  thence  continuing  north 38 degrees 45 minutes  west  149.60  feet,
thence  north 31 degrees 0 minutes  west 183 feet,  thence north 83 degrees west
166.89 feet,  thence south 77 degrees west 181.64 feet,  thence south 39 degrees
30 minutes east 265.17 feet,  thence south 82 degrees 22-2/3 minutes east 365.08
feet to the place of beginning, containing 1.953 acres more or less.

     15. Part of the north east quarter and a part of the  southeast  quarter of
Section 28, Township 15 North, Range 3 East, described as follows:  Beginning at
a point on the east line of  Section  28,  Township  15 North,  Range 3 East,  a
distance  of 1517.9  feet  south of the  northeast  corner of said  Section  and
running thence south 0 degrees 42 minutes east 125 feet; thence north 84 degrees
14 minutes  west 209.90  feet;  thence south 55 degrees 3 minutes west 162 feet;
thence south 47 degrees 15 minutes west 188.75 feet;  thence south 40 degrees 55
minutes  west 200 feet;  thence  south 41 degrees 25 minutes  west 211.85  feet;
thence  south 23 degrees 40 minutes  west 695 feet;  thence  south 10 degrees 39
minutes west 136 feet;  thence south 10 degrees 39 minutes west 362 feet; thence
south 12 degrees 18 minutes west 34.56 feet;  thence south 31 degrees 31 minutes
44 seconds west 397.51 feet; thence north 6 degrees 50 minutes east 477.07 feet;
thence  north 9 degrees 20  minutes  east 500 feet;  thence  north 27 degrees 38
minutes east 500 feet; thence north 38 degrees 49 minutes 58 seconds east 300.97
feet;  thence north 41 degrees 55 minutes east 640 feet; thence north 87 degrees
56 minutes 26 seconds east 348.95 feet;  to the place of  beginning;  containing
9.18  acres more or less of which  approximately  2.5 acres on the east side now
lies in the present bed of White River.

     16. A portion of Fractional  Section 28 in Township 15 North, Range 3 East,
described as follows:  Beginning at the southeast corner of said Section 28, and
running thence north with the east line of said Section, 605 feet, to the center
of the old bed of White River;  thence with the center of said old bed of  White
River,  south 54  degrees  west 145 feet,  to a point;  thence  south 72 and 3/4
degrees  west 200 feet to a point;  thence  south 80 degrees  west 100 feet to a
point; thence west 200 feet to a point; thence north 69 and 1/4 degrees west 160
feet to a  point;  thence  north  55 and 1/4  degrees  west 200 feet to a point;
thence  north 49  degrees  west 200  feet to a  point;  thence  north 38 and 3/4
degrees  west 200 feet to a point;  thence north 31 degrees west 183 feet to low
water in new channel of said White  River,  thence with low water in new channel
of said White River north 83 degrees  west 370 feet to a point;  thence south 63
and 3/4 degrees west 290 feet to a point;  thence south 76 degrees west 161 feet
to a point;  thence  south 69 and 3/4 degrees  west 100 feet to a point;  thence
south 55 and 1/4 degrees west 393 feet to a point;  thence south 31 degrees west
478 feet to a point;  thence  south 37 and 1/4 degrees west 100 feet to a point;
thence  south 54 and 3/4 degrees  west 400 feet to a point;  thence south 67 and
1/2 degrees  west 160 feet to a point;  thence south 76 degrees west 246 feet to
the south  line of said  Section  28;  thence  east with said south line of said
section, 3476 feet to the place of beginning, containing 45 acres, more or less,
except the parcels of land heretofore conveyed on the 16th day of August,  1930,
by those certain deed recorded on the 6th day of September, 1930, in Deed Record
87 at page 467 and 470.  Also,  part of the  northeast  quarter of  Section  33,
Township 15 North, Range 3 East, in Marion County, Indiana, described a follows:
Beginning at the northeast corner of said Section 33, Township 15 North, Range 3
East,  and running  thence south with the east line of said Section 33, south no
degrees 14 minutes east, 324 feet to a point; thence north 75 degrees 36 minutes
west 623  feet to a point;  thence  north 64  degrees  west 276 feet to a point;
thence north 8.47 feet to a point in the north line of said  Section 33;  thence
in an eastwardly  direction with said north line of said Section 33, Township 15
North, Range East, 851.11 feet to the place of beginning, containing 3.58 acres,
more or less.

                       B.   C.C. PERRY PLANT, SECTION K.

     C.C.  Perry  Plant,  Section  K, a steam and  electric  generating  station
contains two 15,000 KW 250 pound steam pressure turbine  generators,  one 12,500
KW 600 pound  topping  turbine,  and one 5,000 KW 600 pound house  turbine.  Its
boiler equipment  includes ten 250 pound boilers  aggregating  7,950 horse power
nominal rating,  five 150 pound boilers with a combined  nominal rating of 3,060
boiler horsepower,  and two 650 pound boilers each capable of delivering 300,000
pounds of steam per hour continuously. The equipment includes facilities for ash
handling,  coal  handling,  and  coal  storage;   condensing  water  intake  and
discharge;  and boiler feed water conditioning.  The plant also includes an A.C.
to D.C. conversion substation.  Transmission and distribution facilities include
three  transformers of 25,000 KVA total capacity,  and a three phase transformer
of 25,000 KVA capacity;  through which  transformers  this plant is connected to
the 33,000 volt  transmission  loop of the Company.  From this plant  energy is
also  distributed  to the 4,000 volt network of the Company.  Both high pressure
and low  pressure  steam is  delivered  from  this  plant  through  a system  of
underground mains to industrial and commercial  customers.  A 20 inch to 16 inch
250 pound  steam tie line  connects  C.C.  Perry  Plant,  Section W, and permits
operation of both as a single unit as respects steam generating facilities.

     C.C. Perry Plant, Section K, is located on lands described in Parcels 17 to
28, both inclusive, as follows:

     17. Lots 1, 2, and 3 in Anton Wiegand's  Subdivision of Lots 1, 2, 3, 4, 5,
and 6 in Square 92 of the Donation Lands of the Town, now City, of Indianapolis,
the plat of which  Subdivision  is  recorded  in Plat Book 7,  page 107,  in the
office of the Recorder of Marion County, Indiana.

     18. Lot 4 in Anton  Wiegand's  Subdivision  of Lots 1, 2, 3, 4, 5, and 6 in
Square 92 of the Donation Lands of the Town, now City, of Indianapolis, the plat
of which  Subdivision is recorded in Plat Book 7, page 107, in the office of the
Recorder of Marion County, Indiana.

     19. Lot Seven (7) in Anton Wiegand's  Subdivision of Lots One (1), Two (2),
Three (3), Four (4), Five (5), and Six (6) in Square  Ninety-Two (92), being the
southeast  one-half of Square Ninety-Two (92) of the Donation Lands of the Town,
now City,  of  Indianapolis,  Marion  County,  Indiana,  the plat of which is of
record  in Plat  Book 7 at page 107 in the  office  of the  Recorder  of  Marion
County, Indiana.

     20. Lot Eight (8) in Anton Wiegand's  Subdivision of Lots One (1), Two (2),
Three (3), Four (4), Five (5), and Six (6) in Square  Ninety-Two (92), being the
southeast  one-half of Square Ninety-Two (92) of the Donation Lands of the Town,
now City,  of  Indianapolis,  Marion  County,  Indiana,  the plat of which is of
record  in Plat  Book 7 at page 107 in the  office  of the  Recorder  of  Marion
County, Indiana.

     21. All of Lot Nine (9) and a strip of ground of the uniform width measured
from east to west of three (3) feet taken by a line drawn parallel with the east
line of said lot off of the east  side of Lot Ten (10),  all in Anton  Wiegand's
Subdivision of Lots One (1), Two (2), Three (3), Four (4), Five (5), and Six (6)
in Square  Ninety-Two (92), being the southeast  one-half of the Square numbered
Ninety-Two  (92) of the Donation Lands of the Town,  now City, of  Indianapolis,
Marion  County,  Indiana,  the plat of which is of record in Plat Book 7 at page
107 in the office of the Recorder of Marion County, Indiana.

     22. Lot Twelve (12) in Anton  Wiegand's  Subdivision of Lots 1, 2, 3, 4, 5,
and 6 in Square 92 in the City of Indianapolis,  as per plat of said Subdivision
recorded  in Plat Book 7,  page 107,  in the  office of the  Recorder  of Marion
County, Indiana.

     23. Lots 13 and 14 in Anton Wiegand's  Subdivision of the southeast half of
Square 92 of the Donation Lands of the Town, now City, of Indianapolis, the plat
of which  Subdivision is recorded in Plat Book 7, page 107, in the office of the
Recorder of Marion County, Indiana.

<PAGE>

     24. Lot 15 in Anton  Wiegand's  Subdivision of Lots 1, 2, 3, 4, 5, and 6 in
Square  92 of the  Donation  Lands  of the  City of  Indianapolis,  as per  plat
thereof,  recorded  in Plat Book 7, page 107 in the  office of the  Recorder  of
Marion County, Indiana.

     25. Lots 18, 19, 20 and 21 in Anton Wiegand's  Subdivision of Lots 1, 2, 3,
4, 5, and 6 in Square 92 of the Donation Lands of the City of  Indianapolis,  as
per  plat  thereof,  recorded  in Plat  Book 7,  page 107 in the  office  of the
Recorder of Marion County, Indiana.

     26. Lot 22 in Anton  Wiegand's  Subdivision of Lots 1, 2, 3, 4, 5, and 6 in
Square  92 of the  Donation  Lands  of the  City of  Indianapolis,  as per  plat
thereof,  recorded  in Plat Book 7, Page 107 in the  office of the  Recorder  of
Marion County, Indiana.

     27. The northwest half of Square  Ninety-Two  (92) of the Donation Lands of
the Town,  now City,  of  Indianapolis;  also all that part of Louisiana  Street
added  to said  northwest  half of said  Square  92 by  virtue  of the  vacation
proceedings  had by the Board of  Public  Works of the City of  Indianapolis,  a
transcript  of which was recorded on April 24,  1906,  in Town Lot Record 400 at
page 210,  and which part of Louisiana  Street so added  thereto is described as
follows, to wit: Beginning at the point of intersection of the east line of West
Street with the south line of Louisiana Street;  thence north with the east line
of West Street twenty-six and five-tenths (26.5) feet to a point thence east and
parallel with the south line of Louisiana  Street three hundred  eighty-two  and
eighty-six  (382.86) feet to the northwest line of Kentucky Avenue;  thence in a
southwesterly direction along the northwest line of Kentucky Avenue thirty-seven
and forty-eight  hundredths  (37.48) feet to the south line of Louisiana Street;
thence west with the south line of Louisiana Street three hundred  fifty-six and
thirty-six  hundredths  (356.36) feet to its intersection  with the east line of
West Street and the place of beginning.  Also, all that part of Louisiana Street
added to said Northwest half of said Square  Ninety-Two  (92) and to the vacated
portion of Louisiana Street immediately hereinbefore described by virtue of the
vacation  proceedings  had  by  the  Board  of  Public  Works  of  the  City  of
Indianapolis,  a transcript of which was recorded on September 27, 1916, in Town
Lot  Record  567 at page 85 and which  part so added  thereto  is  described  as
follows:  Beginning  at a point in the  intersection  of the  east  line of West
Street with the south line of Louisiana Street,  said point being twenty-six and
one-half  (26 1/2) feet north of the original  south line of  Louisiana  Street;
thence  running east along said present south line one hundred  fifty-three  and
thirty  hundredths  (153.30) feet to a point;  thence running in a northwesterly
direction  thirty-six (36) feet to a point,  said point being  thirty-three  and
forty  hundredths  (33.40)  feet north of the  original  south line of Louisiana
Street  measured at right angles thereto;  thence  continuing in a northwesterly
direction  fifty-four  (54) feet to a point,  said point  being  forty-four  and
eighty  hundredths  (44.80) feet north of said  original  south line measured at
right angles thereto; thence continuing in a northwesterly direction sixty-eight
and  sixty-five  hundredths  (68.65)  feet to a point in the  east  line of West
Street,  said point being thirty- four and  forty-five  hundredths  (34.45) feet
north of the present south line of Louisiana Street;  thence running south along
the said east line  thirty-four  and forty-five  hundredths  (34.45) feet to the
place of beginning.  Also a strip of ground of uniform width of twelve and three
hundredths  (12.03)  feet  measured  from east to west  immediately  west of and
adjoining  the  northwest  half of said square  Ninety-two  (92) and the vacated
portions of Louisiana Street immediately hereinbefore described, the description
of which  strip of ground  twelve  and  three  hundredths  (12.03)  feet wide is
determined by a vacation  proceeding and opening  proceeding had by the Board of
Public Works of the City of  Indianapolis,  and which  vacation  proceeding  was
recorded January 15, 1917, in Town Lot Record 570 at page 309, and described the
following tract of ground,  to wit:  Beginning at a point in the intersection of
the south line of  Louisiana  Street with the east line of West  Street;  thence
running  south  with the east line to the  northwest  line of  Kentucky  Avenue;
thence running  southwest with the northwest line of Kentucky Avenue extended to
a point, said point being fourteen and fifty-three  hundredths (14.53) feet west
of the first  described  line measured at right angles  thereto;  thence running
north parallel with and fourteen and fifty-three hundredths (14.53) feet distant
from the first  described  line to the south line of Louisiana  Street  extended
west at right  angles to the  first  described  line  measured  at right  angles
thereto;  thence  running east with said extended line fourteen and fifty- three
hundredths  (14.53) feet to the place of  beginning;  from which last  described
real  estate so vacated  and added to the real  estate  hereinbefore  described,
there has since been taken for the  opening  and  widening  of West  Street from
Kentucky  Avenue to Louisiana  Street,  the transcript of which  proceedings for
opening and widening  were recorded  August 28, 1917, in Mortgage  Record 719 at
page 236, the following  described real estate whereby the ground just described
is limited to a width of twelve and three hundredths  (12.03) feet; which ground
so opened and widened is described as follows,  to wit:  Beginning at a point on
the south line of Louisiana Street with the east line of West Street (said point
being  seventy-five and forty-seven  hundredths  (75.47) lineal feet east of the
west line of West Street and twenty-nine and five hundredths  (29.05) feet south
of the north line of  Louisiana  Street);  thence  running east along said south
line of  Louisiana  Street  two and one-  half (2 1/2)  feet to a point;  thence
running  south  parallel with and two and one-half (2 1/2) feet distant from the
east line of West  Street,  to the  northwest  line of Kentucky  Avenue;  thence
running  southwest  along said  northwest  line to the east line of West Street;
thence  running north along said east line to the place of  beginning;  making a
street seventy-seven and ninety-seven hundredths (77.97) feet wide.

     28. Part of Out Lot One Hundred  Thirty-Five (135) of the Donation Lands of
the City of  Indianapolis,  being a twenty  (20) foot strip of land  between the
Condemnation  Line and Line  "G" as  described  in  Declaratory  Resolution  No.
11,614,  adopted  March 14,  1924,  by the Board of Public  Works of the City of
Indianapolis, and between the north property line of a tract of land transferred
to Mortimer  Schussler by the  Crescent  Packing  Company,  recorded in Town Lot
Record 731, page 175, in the office of the Recorder of Marion  County,  Indiana,
and a line fifty feet south of and  parallel  to the center line of the old main
track, St. Louis Division, P.C.C. & St. L. Railroad, more particularly described
as follows: Measure westwardly along the south line of said Out Lot 135, a total
of 773.53 feet from the  southeast  corner of Out Lot 135;  thence  northwardly,
deflecting  97 degrees  and 34 minutes to the right  303.89 feet to the point of
beginning; thence northwardly along the last described line produced northwardly
8.36 feet;  thence  northwardly  along a curve to the left,  said curve having a
radius of 3,601.10 feet a distance of 343.34 feet to a point in the line 50 feet
south of and parallel to the center  line  of the old main track of the P.0.C. &
St. L. Railroad; thence westwardly parallel to and 50 feet distant from the said
center  line of the old main  track  20.01 feet to a point;  thence  southwardly
along a curve to the left, said curve having a radius of 3,581.10 feet and lying
west of and 20 feet distant from the first described curve, a distance of 340.87
feet to a point;  thence  continuing  southwardly along the tangent to the curve
11.02 feet to a point; thence eastwardly deflecting 97 degrees and 34 minutes to
the left,  20.18 feet to the place of beginning,  containing  0.16 acre, more or
less.

                       C.   C.C. PERRY PLANT, SECTION W.

     C.C. Perry Plant, Section W, is a steam and electric plant which is tied in
with the 33,000 volt loop of the Company, distributes energy through circuits to
the 4,000 volt A.C.  network,  and delivers  intermediate  (175 pound)  pressure
steam to  industrial  customers  and low pressure  steam to the  district  steam
heating  mains of the  Company.  It contains  four  turbine  generators  with an
aggregate rating of 18,200 KW and sixteen boilers with a combined nominal rating
of 9,200 boiler  horsepower.  The  operation is chiefly  non-condensing  exhaust
steam being delivered to low pressure steam heating mains.  The plant has boiler
house  bunker  capacity  of 1,000  tons;  and 14,000  yard and pit coal  storage
facilities  connected  with it. A transformer  substation  located at this plant
contains  four  5,000  KVA   transformers   connecting   with  the  33,000  volt
transmission  loop of the  Company.  A steam  tie  line  from 20 inch to 16 inch
connects with C.C. Perry Plant, Section K.

     C.C. Perry Plant, Section W, is located on lands described in Parcels 29 to
31, both inclusive, as follows:

     29. Part of Lot Seventeen  (17) in Blake and Ray's  Subdivision  of part of
out lot 148 and of the Steam Mill lot,  as per plat  thereof in Deed Record "T",
at  page  639,  in  the  Recorder's  Office  of  Marion  County,  Indiana,  more
particularly described as follows: Beginning at a point in the northerly line of
Washington  Avenue  formerly  called  the  Cumberland  Road and  afterwards  the
National Road,  said point being  sixty-seven and sixty-two  hundredths  (67.62)
feet measured  eastwardly along said northerly line of Washington  Avenue from a
stone set in the ground at the intersection of said northerly line of Washington
Avenue with the east line of Geisendorff Street, running thence eastwardly along
said northerly line of Washington Avenue  thirty-four and ninety- two hundredths
(34.92) feet more or less to a point of intersection of said northerly line with
the west line of Lot Eighteen (18) in said Subdivision; thence northwardly along
said  west  line  of  said  Lot  Eighteen  (18)  two  hundred  twenty-seven  and
thirty-four  hundredths  (227.34) feet more or less to the point of intersection
of said west line of Lot Eighteen (18) with the southerly line of Market Street,
thence west along said  southerly  line of Market  Street  twenty-six  and fifty
hundredths  (26.50) feet more or less to a point  seventy-five  and thirty-eight
hundredths (75.38) feet measured  eastwardly along said southerly line of Market
Street from a stone set in the ground at the intersection of said southerly line
of Market Street with the east line of Geisendorff Street, thence southwardly at
right angles to said  southerly  line of Market Street two hundred  twenty-three
and thirty hundredths (223.30) feet more or less to the point of beginning. Also
vacated alley lying between Lots Twenty (20) and  Twenty-One  (21) in said Blake
and Ray's Subdivision.

<PAGE>

     30. Lots  Eighteen  (18),  Nineteen (19) and Twenty (20) in Blake and Ray's
Subdivision  of  part of out lot 148 and of the  Steam  Mill  Lot,  as per  plat
thereof  in Deed  Record  "T" at page 639 in the  Recorder's  Office  of  Marion
County, Indiana.

     31. Part of Lot Twenty-One  (21) in Blake and Ray's  Subdivision of part of
out lot 148 and of the Steam Mill Lot, as per plat thereof in Deed Record "T" at
page 639, in the Recorder's Office of Marion County,  Indiana, more particularly
described as follows:  Beginning at the northwest  corner of said Lot Twenty-One
(21) and running thence  southwardly  along the west line of said Lot Twenty-One
(21), two hundred fifty and sixty-six  hundredths  (250.66) feet more or less to
the northerly line of Washington Avenue, formerly called the Cumberland Road and
afterwards the National  Road,  thence  eastwardly  along said northerly line of
Washington Avenue forty-one and twenty-five hundredths (41.25) feet more or less
to a point five and thirty-four hundredths (5.34) feet measured westwardly along
the northerly  line of Washington  Avenue from the southeast  corner of said Lot
Twenty-One (21) as the same appears on the plat aforesaid, thence northwardly at
right  angles  to  said  northerly  line of  Washington  Avenue  thirty-two  and
seventy-five hundredths (32.75) feet more or less to a point on the east line of
Lot Twenty-One  (21),  running thence north along said east line of said lot two
hundred twenty-four and thirty-four hundredths (224.34) feet more or less to the
south line of Market Street,  thence west along said south line of Market Street
forty-six (46) feet more or less to the place of beginning.

                            D.   MILL STREET STATION.

     Mill Street steam and electric  generating station contains three 235 pound
steam turbine  generators  with an aggregate  capacity of 45,000 KW and fourteen
boilers  with an  aggregate  nominal  rating of 11,715  boiler  horsepower.  Low
pressure live steam from this station is fed to the steam heating  system of the
Company  serving the north side  residential  and  apartment  house area and the
downtown business district of the City of Indianapolis.  Its equipment  includes
switch house,  control room, coal and ash handling,  storage  facilities,  water
softening  plant,  condensing  water  system with screen  houses and duct lines,
railroad switching  facilities and transformer  substation.  The latter contains
two  transformer   banks:  three  transformers  of  8,333  KVA  each,  and  four
transformers  of 3,333  KVA  each;  through  which  this  station  ties into the
Company's 33,000 volt transmission loop.

     Mill Street Station is located on lands described in Parcels 32 to 47, both
inclusive, as follows:

     32. Lot One (1) in Schurmann's  First Addition to the City of Indianapolis,
as the plat  thereof is recorded in Town Lot Record 71 at page 247 in the office
of the Recorder of Marion  County,  Indiana.  Also a strip west of and adjoining
said lot, being part of Northwestern Avenue vacated.  Also all that part of Mill
Street vacated, which is described as follows: Beginning at the southeast corner
of said Lot One (1) and running  thence east along the south line  extended east
of said Lot One (1) a distance  of twenty  (20)  feet;  thence  north  along the
center  line of Mill  Street  vacated a distance  of fifty (50) feet to a point;
thence west along the north line extended east of said Lot One (1) a distance of
twenty (20) feet to the northeast corner of said Lot One (1), thence south along
the east line of said Lot One (1) a distance  of fifty (50) feet to the place of
beginning.

     33. Lot Two (2) in Schurmann's  First Addition to the City of  Indianapolis
as the plat  thereof is recorded in Town Lot Record 71 at page 247 in the office
of the Recorder of Marion  County,  Indiana.  Also a strip west of and adjoining
said lot, being part of Northwestern Avenue vacated.  Also all that part of Mill
Street vacated which is described as follows:  Beginning at the northeast corner
of said Lot Two (2),  running  thence  south along the east line of said Lot Two
(2) which is the west line of Mill Street vacated, a distance of fifty (50) feet
to the  southeast  corner of said Lot Two (2),  thence  east  along and with the
south line  extended  east of said Lot Two (2) a distance of twenty (20) feet to
the center line of Mill Street  vacated;  thence  north along the center line of
Mill  Street  vacated  and  parallel  to the east  line of said  Lot Two (2),  a
distance  of  fifty  (50)  feet to a point  in the  center  line of Mill  Street
vacated,  which point intersects the north line,  extended east, of said Lot Two
(2); thence west along the north line, extended east, of said Lot Two (2) to the
point of beginning.

     34. Lots Three and Four (3 and 4) in Schurmann's First Addition to the City
of Indianapolis,  as the plat thereof is recorded in Town Lot Record 71, at page
247, in the Office of the Recorder of Marion County,  Indiana. Also a strip west
of and adjoining said Lots,  being a part of Northwestern  Avenue vacated.  Also
all that part of said Lot Three (3) at one time opened as Nineteenth  Street and
since  vacated by  proceedings  which are of record in Town Lot Record 659, page
151.  Also all that  part of Mill  Street  which has been  vacated  and which is
described as follows, to wit: Beginning at the northeast corner of said Lot Four
(4) in  Schurmann's  First  Addition and running thence south along and with the
east lines of Lots Four (4) and Three (3) a distance  of ninety (90) feet to the
southeast  corner of said Lot Three (3) in  Schurmann's First  Addition;  thence
east along the south  line  extended  east of said Lot Three (3) a  distance  of
twenty (20) feet to the center line of Mill Street  vacated;  thence north along
the center  line of said Mill Street  vacated  and  parallel to the east line of
said Lots Three (3) and Four (4), a distance  of ninety  (90) feet to a point in
the north line  extended  east of said Lot Four (4) where the north line of said
Lot Four (4) extended east  intersects  the center line of Mill Street  vacated;
thence west along the north line extended east of said Lot Four (4) to the place
of beginning.

     35. Lot Five (5) in Schurmann's First Addition to the City of Indianapolis,
as the plat  thereof is recorded in Town Lot Record 71 at page 247 in the Office
of the Recorder of Marion  County,  Indiana.  Also a strip west of and adjoining
said lot, being a part of Northwestern  Avenue vacated.  Also, that part of Mill
Street vacated which is described as follows:  Beginning at the northeast corner
of said Lot Five (5) and running thence south along the east line of said lot, a
distance of forty (40) feet to the southeast corner of said Lot Five (5); thence
east along the south line extended east of said Lot Five (5) twenty (20) feet to
the center line of Mill Street  vacated;  thence north along and with the center
line of Mill Street vacated,  a distance of forty (40) feet to a point where the
center line of Mill Street  vacated  intersects  at right  angles the north line
extended  east of said Lot Five (5);  thence west along the north line  extended
east of said Lot Five (5) to the place of  beginning.  Also Lot  Eleven  (11) in
Albert Crane's  Subdivision of the southwest corner of the northeast  quarter of
Section  Thirty-five (35), Township Sixteen (16) North, Range Three (3) East, as
the plat thereof is recorded in Plat Book 2 at page 6 in the  Recorder's  Office
of Marion County,  Indiana,  said addition  sometimes being called Crane's North
Addition  to the City of  Indianapolis.  Also a strip of ground  of the  uniform
width of eight and one-half (8 1/2) feet north of and  adjoining Lot Eleven (11)
herein, being part of the first alley north of Eighteenth Street, vacated.

     36. Lot Six (6) in Schurmann's  First Addition to the City of Indianapolis,
as the plat  thereof is recorded in Town Lot Record 71 at page 247 in the office
of the Recorder of Marion  County,  Indiana.  Also a strip west of and adjoining
said Lot Six (6), being a part of Northwestern Avenue vacated. Also that part of
Mill  Street  vacated,  east of and  adjoining  said  Lot Six (6)  described  as
follows:  Beginning at the northeast  corner of said Lot Six (6) in  Schurmann's
First  Addition,  being  also a point in the west line of Mill  Street  vacated;
thence  running  south  along and with the east line of said Lot Six (6) and the
west line of Mill Street vacated a distance of forty (40) feet, to the southeast
corner of said Lot Six (6);  thence east along and with the south line  extended
east of said Lot Six (6) a  distance  twenty  (20) feet to a point in the center
line of Mill Street vacated; thence north along and with the center line of Mill
Street  vacated  to a point  where  said  center  line of  Mill  Street  vacated
intersects  the north line extended east of said Lot Six (6);  thence west along
the north line extended east of said Lot Six (6) to the place of beginning.

     37. The south half of Lot Seven (7) in  Schurmann's  First  Addition to the
City of  Indianapolis,  as the plat  thereof is  recorded in Town Lot Record 71,
page 247, in the office of the Recorder of Marion County, Indiana. Also all that
part of Northwestern  Avenue which has been vacated.  Also all that part of Mill
Street, vacated, described as follows, to wit: Beginning at the southeast corner
of said Lot Seven (7) and running thence east along the south line extended east
of said Lot Seven (7) a distance  of twenty (20) feet to the center line of Mill
Street  vacated;  thence  north  along and with the center  line of Mill  Street
vacated to a point where said center line of Mill Street  intersects  the center
line extended east of said Lot Seven (7); thence west a distance of twenty (20)
feet to a point  at the  center  of the  east  line of  said  Lot  Seven  (7) in
Schurmann's  First Addition;  thence south along the east line of said Lot Seven
(7) to the point of beginning.

     38. The north half of Lot Seven (7) in  Schurmann's  First  Addition to the
City of  Indianapolis,  as the plat thereof is recorded in Town Lot Record 71 at
page 247 in the office of the Recorder of Marion County,  Indiana. Also a strip,
west of and adjoining said Lot, being part of vacated  Northwestern Avenue. Also
the south half of vacated  Nineteenth  Street from  Northwestern  Avenue to Mill
Street,  being  seventeen  and  one-half  (17 1/2) feet from the north to south,
adjoining the above described Lot Seven (7) in Schurmann's First Addition on the
north as such vacation  proceedings  are recorded in Town Lot Record 524 at page
184.  Also all that part of Mill  Street  added to said Lot Seven (7) and to the
south half of said Nineteenth Street vacated described as follows:  Beginning at
a point  seventeen and one-half (17 1/2) feet north of the  northeast  corner of
said Lot Seven (7);  thence  running  south along the east line of said  vacated
Nineteenth  Street and the east line of said Lot Seven (7) to a point  where the
center line of said Lot Seven (7) intersects the east line thereof;  thence east
a distance of twenty (20) feet to the center line of Mill Street vacated; thence
north along the center  line of Mill Street  vacated to a point where the center
line of Mill Street  vacated  intersects  the center line of  Nineteenth  Street
vacated; thence west a distance of twenty (20) feet to the place of beginning.

     39. Lot Eight (8),  Nine (9),  Ten (10),  Eleven  (11),  and Twelve (12) in
Schurmann's  First Addition to the City of Indianapolis,  as the plat thereof is
recorded  in Town Lot  Record 71 at page 247 in the  office of the  Recorder  of
Marion County, Indiana. Also a strip west of and adjoining said lots, being part
of Northwestern  Avenue  vacated.  Also a strip adjoining said lots on the east,
being part of Mill Street vacated, described as follows: Beginning on the center
line of Nineteenth  Street  vacated  where it  intersects  the west line of Mill
Street  vacated  and running  east to the center  line of Mill  Street  vacated;
thence north along and with the center line of Mill Street  vacated to the point
where said center line of Mill Street  vacated  intersects the southwest line of
the  right of way of the  Cleveland,  Cincinnati,  Chicago & St.  Louis  Railway
Company;  thence northwesterly along said southwest line of said Railway Company
to the point where said southwest line  intersects the east line of said Lot Ten
(10) in Schurmann's  First Addition  aforesaid;  thence south along and with the
east lines of Lots Ten (10),  Nine (9),  and Eight  (8),  in  Schurmann's  First
Addition aforesaid,  and the east line of Nineteenth Street vacated to the point
of beginning.  Also a strip of ground  seventeen and one-half (17 1/2) feet wide
from north to south, being the north half of Nineteenth Street vacated adjoining
said Lot Eight (8) on the south thereof as such vacation  proceedings  are shown
in Town Lot Record 524 at page 184 in the  records in the  Recorder's  Office of
Marion County, Indiana.

     40.  Lots  Thirteen  (13),  Fourteen  (14),  Fifteen  (15),  Sixteen  (16),
Seventeen  (17),  Eighteen  (18),  Nineteen (19) and Twenty (20) in  Schurmann's
First Addition to the City of  Indianapolis,  as the plat thereof is recorded in
Town Lot Record 71 at page 247 in the office of the  Recorder of Marion  County,
Indiana. Also a strip west of and adjoining said lots, being part of Mill Street
vacated,  described as follows:  Beginning at the southwest corner of Lot Twenty
(20) in Schurmann's  First Addition, thence running west along and with the said
south line  extended  west, a distance of twenty (20) feet to the center line of
Mill Street vacated;  thence north along said center line of Mill Street vacated
to the point  where said  center  line of Mill  Street  vacated  intersects  the
southwest right of way line of the Cleveland,  Cincinnati, Chicago and St. Louis
Railway  Company;  thence  southeast  along  said right of way line to the point
where said right of way line intersects  the west line of Lot  Thirteen  (13) in
Schurmann's  First Addition;  thence south along and with the west lines of Lots
13, 14, 15 16, 17, 18, 19 and 20 in Schurmann's  First  Addition,  a distance of
four hundred  thirty-one  (431) feet to the southwest corner of said Lot 2 being
the point of beginning.

     41. Lots Four (4), Five (5), and Six (6) in Albert  Crane's  Subdivision of
the  Southwest  corner of the  northeast  quarter of Section  Thirty-Five  (35),
Township  Sixteen  (16)  North,  Range  Three  (3) East as the plat  thereof  is
recorded in Plat Book 2 at page 6 in the office the  Recorder of Marion  County,
Indiana, said addition sometimes being called Crane's North Addition to the City
of  Indianapolis;  also a strip of  ground  of the  uniform  width of eight  and
one-half  (8 1/2) feet north of and  adjoining  said lots by virtue of  vacation
proceedings in Town Lot Record 767, page 210.

     42. Lot Seven (7) in Albert Crane's  Subdivision of the southwest corner of
the northeast quarter of Section  Thirty-Five (35), Township Sixteen (16) North,
Range Three (3) East,  as the plat thereof  recorded in Plat Book 2 at page 6 in
the office of the Recorder of Marion County, Indiana,  said  addition  sometimes
being called Crane's North Addition to the City of Indianapolis; also a strip of
ground of the  uniform  width of eight and  one-half  (8 1/2) feet  north of and
adjoining said Lot by virtue of vacation proceedings in Town Lot Record 767 page
21

     43. Lot Eight (8) in Albert Crane's  Subdivision of the southwest corner of
the northeast quarter of Section  Thirty-Five (35), Township Sixteen (16) North,
Range Three (3) East,  as the plat  thereof is recorded in Plat Book 2 at page 6
thereof in the office of the Recorder  Marion  County,  Indiana,  said  addition
sometimes being called Crane's North Addition to the City of Indianapolis;  also
a strip of ground of the uniform  width of eight and one-half (8 1/2) feet north
of and adjoining  said Lot by virtue of vacation  proceedings in Town Lot Record
7( page 210.

     44. Lots Nine (9) and Ten (10) in Albert Crane's  Subdivision the southwest
corner of the northeast quarter of Section  Thirty-Five  (35),  Township Sixteen
(16) North, Range 3 East, as the plat thereof is recorded in Plat Book 2 at page
6 in the  office  of the  Recorder  of Marion  County,  Indiana,  said  addition
sometimes being called Crane's North Addition to the City of Indianapolis.  Also
a strip of ground of the uniform  width of eight and one-half (8 1/2) feet north
of and  adjoining  Lots 9 and 10,  being part of the alley  north of 18th street
vacated.  Also a strip of ground of the uniform width of  twenty-five  (25) feet
east of and  adjoining  Lot 9 and the eight and  one-half  (8 1/2) foot  vacated
strip north of and adjoining said Lot 9, being part of Mill Street vacated.

     45. A strip of ground  twenty-five  (25)  feet in width  off of the  entire
south side of Lot Five (5) in  Commissioners'  Subdivision,  in partition of the
Estate  of  Andrew  Burkhart,  of  part  of the  northwest  quarter  of  Section
Thirty-Five (35), Township Sixteen (16) North, Range Three (3) East, except that
part of said Lot Five (5) lying west of the Indiana  Central Canal together with
all that part of Northwestern  Avenue adjoining the same, since vacated,  as the
plat of said  sub-division  is recorded  in Land Record 3, pages  345-354 in the
office of the Recorder of Marion County, Indiana.

     46.  Lots  numbered  twelve  (12)  and  thirteen  (13)  in  Albert  Crane's
Subdivision  in the  City  of  Indianapolis,  of the  Southwest  Quarter  of the
Northeast  Quarter of Section  35,  Township 16 North,  Range 3 East,  in Marion
County,  Indiana, as the plat thereof is recorded in Plat Book 2, page 6, in the
Recorder's  Office of Marion  County,  Indiana,  which  subdivision  is commonly
called and known as "Crane's North Addition" to the City of Indianapolis, Marion
County, Indiana;

     Also a strip of  ground  8.6 feet  wide  from  north to south  north of and
adjoining  said lots 12 and 13,  being all of the  vacated  alley  north of 18th
Street from the west  property  line of Mill Street to the east property line of
the  first  alley  east of  Northwestern  Avenue  as the  same  was  vacated  by
proceedings  of record in Town Lot  Record  821 at page 538,  in the  Recorder's
Office of Marion County, Indiana;

     Also a strip of ground  7.5 feet wide from east to west  lying  west of and
adjoining  said  lot  13,  being  the  east  half  of the  first  alley  east of
Northwestern  Avenue  vacated from the north property line of the alley north of
18th Street to a point 39.5 feet south thereof,  which vacation  proceedings are
of record in Town Lot Record 821,  page 553 in the  Recorder's  Office of Marion
County, Indiana.

     47. Lots Fourteen (14) and Sixteen (16) in Albert  Crane's  Subdivision  of
the Southwest Quarter of the Northeast Quarter of Section 35, Township 16 North,
Range 3 East, in the City of Indianapolis,  the plat of which  Subdivision is of
record  in Plat  Book 2, page 6, in the  Recorder's  Office  of  Marion  County,
Indiana,  and which said  Subdivision  is some  times  known and  designated  as
"Crane's Subdivision to the City of Indianapolis, Marion County, Indiana."

     Also a strip of ground 10 feet in width  west of and  adjoining  the entire
west ends of each of said lots  which was a part of  Northwestern  Avenue as the
same has been  vacated and is shown by  proceedings  recorded in Town Lot Record
332, page 478 of the Records in the Recorder's Office of Marion County.

     Also a strip of ground 7.5 feet in width from east to west east of said Lot
14,  being the  vacated  part of the  alley  adjoining  such lot which  vacation
proceedings  affected  all that part of the  first  alley  east of  Northwestern
Avenue from the north property line of the alley north of 18th Street to a point
39.5 feet south thereof.

                             GROUP TWO--SUBSTATIONS

     The substations of the Company,  other than those hereinbefore mentioned as
located at Harding Street Station,  C.C. Perry Plant Section K, C.C. Perry Plant
Section W, and Mill Street Station, are as follows:

                            TRANSMISSION SUBSTATIONS

     Northeast  Substation.   Four  10,000  KVA  132,000  volt  to  33,000  volt
transformers, located on land described in Parcels 48 and 49, as follows:

     48. Part of the Southeast 1/4 of Section 5, Township 16 North, Range 4 East
of the Second Principal  Meridian in Marion County,  Indiana,  more particularly
described as follows, to- wit:

     Beginning  at a point  on the  south  line of the  said  Southeast  Quarter
Section 70.5 feet more or less,  east of the southwest  corner  thereof,  thence
northeast  along and with the east  property  line of the Lake Erie and  Western
Railroad  Depot  Grounds a  distance  of 464 feet more or less to a point,  said
point being the  northeast  corner of the Lake Erie and Western  Railroad  Depot
Grounds;  thence  south a distance of 348.23 feet more or less to a point in the
south line of said 1/4 section; thence rest along and with the said south line a
distance of 306.65 feet more or less to the place of beginning.

<PAGE>

     49. A parcel of land lying and being in the southeast quarter of section 5,
Township 16 North, Range 4 East, more particularly described as follows:

     Beginning  at a point on the  south  line of the  said.  Southeast  Quarter
section 377.15 feet more or less, east of the southwest  corner thereof; thence
north  348.23 feet,  more or less,  to a point,  said point being the  northeast
corner of the Lake Erie and Western  Railroad  Depot Grounds;  thence  northwest
along the north line of said Depot Grounds a distance of 75 feet,  more or less,
to the southeast right of way property line of said Railroad;  thence  northeast
along and with said right of way line to a distance  of 236.57 feet more or less
to a point;  thence  south,  a distance  of 125.32 feet more or less to a point;
thence east from said point  parallel to the south line of the said  A section a
distance  of 400 feet more or less to a point;  thence  south a distance  of 450
feet,  more or less,  to a point in the south line of said 1/4  section;  thence
west along and with the said  south line a distance  of 500 feet more or less to
the place of beginning.

     Southeast  Substation.   Four  10,000  KVA  132,000  volt  to  33,000  volt
transformers, located on land described in Parcel 50, as follows:

     50. Part of the east 1/2 of the  southeast  1/4 of Section 23,  Township 15
North, Range 4 East of the Second Principal Meridian in Marion County,  Indiana,
more particularly described as follows, to-wit:

     Beginning at a point in the west line of the east 1/2 of the  southeast 1/4
of said Section 23,  Township 15 North,  Range 4 East,  170.83 feet north of the
intersection of said west line with the center line of the Michigan Road; thence
running  north  along  and  with  the  said  west  line of said  east 1/2 of the
southeast 1/4 of Section 23, Township 15 North,  Range 4 East, a distance of 400
feet to a point;  thence east  parallel with the north line of said half quarter
section a distance of 370 feet; thence south parallel with the west line of said
half quarter section a distance of 678 feet to a point;  thence continuing at an
angle of 37  degrees,  43 minutes to the right a  distance  of 134.45  feet to a
point in said center line of the Michigan Road; thence north west along and with
said  center  line of the  Michigan  Road,  a distance  of 67.5 feet to a point;
thence  northwardly  a distance  of 340.35 feet to a point 233 feet east of said
west  line of said  east  half of said  Quarter  Section;  thence  westwardly  a
distance of 233 feet to the point of beginning,  containing 4.47 acres,  more or
less.

     Southwest  Substation.   Four  10,000  KVA  132,000  volt  to  33,000  volt
transformers, located on land described in Parcels 51 and 52, as follows:

     51. Part of Lot 3 in Garden Park Addition to the City of  Indianapolis,  as
per plat  thereof  recorded  in Plat  Book 13,  page 91,  in the  office  of the
Recorder of Marion  County,  Indiana,  more  particularly  described as follows:
Beginning in the  northwest  corner of said Lot 3 and running  thence east along
and with the north line a distance of 200 feet, more or less to a point;  thence
south  parallel  with the west line a  distance  of 400 feet,  more or less to a
point; thence west and parallel with the north line 200 feet, more or less, to a
point in the  west  line of said  Lot 3,  thence  north  along  the west  line a
distance of 400 feet more or less to the place of beginning.

<PAGE>

     52.  Lot  numbered  Four (4) in  Garden  Park  Addition,  the plat of which
appears of record in Plat Book 13, page 91 thereof in the Office of the Recorder
of Marion County, Indiana.

     Northwest  Substation.   Four  10,000  KVA  132,000  volt  to  33,000  volt
transformers, located on land described in Parcel 53, as follows:

     53. Part of the southeast Quarter of Section 20, Township 16 North, Range 3
East, described as follows:

     Beginning at the  southwest  corner of said quarter and running  north with
the west line thereof 664 feet,  thence east  parallel to the south line of said
Quarter 645 feet to the center of Little Eagle Creek,  thence with the center of
said Creek with the  meanderings  thereof south 3 degrees west 269 feet;  thence
south 26 1/2 degrees  east 117 feet,  thence  south 3/4  degrees  east 174 feet,
thence south 43 degrees west 161 feet to the south line of said Quarter Section,
thence  west  582  feet  to the  beginning,  containing  10  acres,  except  the
following part thereof:

     Beginning on the south line of said Quarter  Section at a point 304.15 feet
east of the south west corner thereof,  and running east along the south line of
said Quarter Section 100 feet to a point; thence north parallel to the west line
of said Quarter  Section 261 feet to a point;  thence west parallel to the south
line of said  Quarter  Section 100 feet;  thence  south 261 feet to the place of
beginning, containing 60/100 of an acre, more or less.

                            DISTRIBUTION SUBSTATIONS

     13th  Street  Substation.  One 2,000 KVA  33,000  volt to 4,000  volt phase
transformer, located on land described in Parcel 54, as follows:

     54. Part of Lots 55 and 56 in E.T.  Fletcher's  Subdivision  of Lots to 23,
both  inclusive,   of  E.T.  and  S.K.   Fletcher's  Addition  to  the  City  of
Indianapolis,  the plat of which  Subdivision  is  recorded in Plat Book 3, page
123, in the office of the Recorder of Marion County, Indiana; which part of said
lots is described as follows:  Beginning at the southwest corner of said Lot 55;
thence east along the north line of 13th Street 68 feet to a point; thence north
parallel to the west line of Columbia  Avenue 60 feet to a point in said Lot 56;
thence west parallel with the north line of 13th Street 68 feet to the west line
of Lot 56; thence south  parallel to the west line of Columbia  Avenue along the
west line of Lots 56 and 55, sixty feet to the place of beginning.

     Martindale   Substation.   Four  2,500  KVA  33,000   volt  to  4,000  volt
transformers, located on land described in Parcels 55 and 56, as follows:

     55.  Lot No.  15 in  Block  No. 4 in Bruce  Baker  Addition  to the City of
Indianapolis,  the plat of which is  recorded in Plat Book 6 at page 122, in the
office of the Recorder of Marion County, Indiana.

<PAGE>

     56.  Lot No.  16 in  Block  No. 4 in Bruce  Baker  Addition  to the City of
Indianapolis,  the plat of which is  recorded  in Plat Book 6 at page  122,  the
office of the Recorder of Marion County, Indiana.

     Broadripple   Substation.   Four  1667  KVA  33,000   volt  to  4,000  volt
transformers, located on land described in Parcel 57, as follows:

     57. Lots  Ninety-Seven  (97),  Ninety-Eight  (98) and  Ninety-Nine  (99) in
Bellaire,  an Addition to the City of Indianapolis,  Marion County,  Indiana, as
the plat of said  addition is recorded in Plat Book 17 at page 141 in the office
of the Recorder of Marion County, Indiana.

     61st  Street   Substation.   One  2,000  KVA  33,000  volt  to  4,000  volt
transformer, located on land described in Parcel 58, as follows:

     58. Part of the northwest quarter of Section 6, Township 16 North,  Range 4
East,  described  as follows:  Beginning at a point which is 530.86 feet east of
the west line and 1180.13 feet north of the south line of said quarter  section,
said point being also the  southeast  corner of 61st Street and Marion Street in
the City of  Indianapolis;  thence  south on and  along  the east line of Marion
Street 58.21 feet to a point;  thence east  parallel with the south line of 61st
Street, 148 feet to a point,  thence north parallel with the east line of Marion
Street  58.21 feet to a point in the south line of 61st  Street;  thence west on
and along the south line of 61st Street, 148 feet to the place of beginning.

     Brightwood   Substation.   Four  2,500  KVA  33,000   volt  to  4,000  volt
transformers, located on land described in Parcel 59, as follows:

     59.  Lots  Seven  (7),  Eight  (8),  Nine  (9),  and  Ten  (10)  all in the
Subdivision  made by John Campbell and Sadie E. Campbell of Lot or Block Sixteen
(16) in Hutchings and Darnell's  Brookside Addition to the City of Indianapolis;
the plat of said Campbell's Subdivision appearing of record in the office of the
Recorder of Marion County, Indiana, in Plat Book 7 at page 49 thereof.

     10th and  Emerson  Substation.  One 3,125  KVA  33,000  volt to 4,000  volt
transformers, located on land described in Parcel 60, as follows:

     60. The North Half of Lot Three (3) in Emerson  Highlands,  Second Section,
an Addition to the City of  Indianapolis,  as per plat thereof  recorded in Plat
Book 21 page 104 in the office of the Recorder of Marion County, Indiana.

     English  Avenue  Substation.  Four  2,500  KVA  33,000  volt to 4,000  volt
transformers located on land described in Parcel 61, as follows:

     61.  Part of the south west 1/4 of Section 8,  Township  15 North,  Range 4
East,  being a part of Block 1 of Canby  Park,  the plat of which is recorded in
Plat Book 14, page 190, in the office of the Recorder of Marion County, Indiana,
being more particularly described as follows:

<PAGE>

     Beginning  on the north line of said 1/4  section,  at a point  406.70 feet
west of the north east corner thereof;  thence west along the north line of said
Quarter  Section 110.00 feet;  thence south at right angles to the north line of
said  Quarter  Section,  145.00 feet to the north line of  Southeastern  Avenue;
thence  south east  along the north line of  Southeastern  Avenue  114.98  feet;
thence north on a line at right angles to the north line of said Quarter Section
177.88 feet to the place of beginning.

     Beech  Grove  Substation.   Pour  1,000  KVA  33,000  volt  to  4,000  volt
transformers, located on land described in Parcel 62, as follows:

     62. Part .of the Northeast quarter of Section  Twenty-Nine  (29),  Township
Fifteen (15) North, Range Four (4) East, described as follows, to wit: Beginning
at a point three hundred forty-six and  eighty-hundredths  (346.80) feet east of
the  northwest  corner of said quarter  section;  running  thence east along the
north line of said quarter  section one hundred and fifty (150) feet to a point;
thence south and parallel to the east line of said quarter section three hundred
thirty-five  and eighty-  hundredths  (335.80) feet to a point;  thence west and
parallel  to the north line of said  quarter  section one hundred and fifty feet
(150) to a point; said point being three hundred  forty-seven and six hundredths
(347.06)  feet east of the west line of said quarter  section;  thence north and
parallel to the east line of said quarter  section three hundred thirty-five and
eighty  hundredths  (335.80) feet to the place of beginning,  containing one and
sixteen hundredths (1.16) acres more or less.

     Virginia  Avenue  Substation.  Six  2,000  KVA  33,000  volt to 4,000  volt
transformers, located on land described in Parcel 63, as follows:

     63. Part of Lot 5 in O'Neal and Wingate's  Subdivision of Square 101 of the
Donation  Lands  of the  Town,  now  City,  of  Indianapolis,  the plat of which
subdivision  is recorded in Plat Book 2, page 14, in the office of the  Recorder
of Marion  County,  Indiana,  described as follows:  Beginning at the  northwest
corner of said Lot 5 on Virginia Avenue; running thence east 45 degrees north 48
feet, thence eastwardly to East Street to a point 18 feet north of the southeast
corner of Lot 5;  thence 18 feet  south to the  southeast  corner of said Lot 5;
thence along the south line of said Lot 5 according to said  recorded  plat,  to
Virginia Avenue; thence north 45 degrees west 26 feet to the place of beginning.

     West  Indianapolis  Substation.  Four 1,667 EVA  33,000  volt to 4,000 volt
transformers, located on land described in Parcel 64, as follows:

     64. Lots One (1),  Two (2) and Three (3) and part of a vacated  alley lying
immediately south of Lot Three (3) in Moudy's West Indianapolis  Addition to the
City of  Indianapolis,  Indiana,  reference  being  made to the plat  thereof as
recorded  in Plat Book 11,  page 77, in the  office  of the  Recorder  of Marion
County, Indiana;  excepting a strip of ground two (2) feet of equal width off of
the entire  west side of said Lot Three (3),  and said two (2) foot strip  shall
extend across that portion of said vacated alley lying immediately south of said
Lot Three (3) to its intersection with the north line of the right of way of the
Indianapolis and Vincennes Railroad;  more particularly described as follows, to
wit:  Beginning at the northeast corner of said Lot One (1), running thence west
upon and along the north line of said Lots One (1),  Two (2) and Three (3),  one
hundred eighteen (118) feet to a point two (2) feet east of the northwest corner
of said Lot Three (3);  thence south upon and along a line  parallel to the west
line of said Lot Three (3) and  extended  through  a vacated  alley one  hundred
seventy-eight  and forty-six  hundredths  (178.46) feet to the north line of the
right  of way of  said  Indianapolis  and  Vincennes  Railroad  Company;  thence
northeastwardly  upon and along the north line of said right of way one  hundred
seventy-six and six-tenths  (176.6) feet to the southeast corner of said Lot One
(1); thence north upon and along the east line of said Lot One (1) fifty-one and
seven-tenths (51.7) feet to the place of beginning.

     East Ohio  Street  Substation.  Seven  1667 KVA  33,000  volt to 4,000 volt
transformers, located on land described in Parcel 65, as follows:

     65. The east half of lot numbered Six (6) in Hervey Bates'  Subdivision  of
Out Lot Fifty- Nine (59) of the Donation Lands to the City of Indianapolis,  the
plat of which is  recorded  in Land  Record  5,  page 63,  in the  office of the
Recorder of Marion County,  Indiana,  except that part of said east half of said
Lot 6 taken for the opening and widening of Wabash Alley (now Wabash  Street) by
proceedings as shown in Land Record "S", page 64.

     Main Street (Speedway City)  Substation.  One 3900 KVA 33,000 to 4,000 volt
transformer, located on land described in Parcel 66, as follows:

     66. Lots  numbered 79 and 80 in Speedway  City,  an addition to the City of
Indianapolis,  now in the Town of Speedway,  Marion County, Indiana, as per plat
thereof,  recorded  in Plat Book 17,  page 2 in the  office of the  Recorder  of
Marion County, Indiana.

     Tibbs  Avenue  Substation.   Four  1667  KVA  33,000  volt  to  4,000  volt
transformers, located on land described in Parcel 67, as follows:

     67. Lots Six (6) and Seven (7) in Andorra  Park, an Addition to the City of
Indianapolis, Marion County, Indiana, and a subdivision of part of the southeast
quarter of Section Thirty-two (32), Township Sixteen (16) North, Range Three (3)
East, the plat of which is of record Ln the Recorder's  Office of Marion County,
Indiana, in Plat Book Eighteen (18) at page 126.

     R.C.A. Substation. One 3,900 KVA 33,000 to 4,000 volt transformer and three
200 KVA 33,000 to 4,000 volt  transformers,  located on Land described in Parcel
68, as follows:

     68. 9 feet  off of the  entire  West  side of Lot 68 and 26 feet off of the
entire East side of Lot 69,  except that part of said lots taken for the opening
and widening of Michigan Street, all in John W. Hollands Subdivision of Lots 21,
22, 23 in Robson and Voorhees addition to the City of Indianapolis,  as per plat
thereof,  recorded  in Plat Book 6, page 46 in the  office  of the  Recorder  of
Marion County, Indiana.

<PAGE>

     49th  Street  Substation.  One 3,900 KVA 33,000 to 4,000 volt  transformer,
located on land described in Parcel 69, as follows:

     69. Part of Lot 26 in Arthur V. Brown's East Meridian Heights,  an addition
to the City of Indianapolis, as per plat thereof, recorded in Plat Book 13, page
103 in the office of the Recorder of Marion County,  Indiana,  more particularly
described as follows, to-wit:

     Beginning on the East line of said Lot 26 at a point 24.9 feet South of the
Northeast  corner of said lot; running South on and along said East line of said
Lot 26, a distance of 45 feet to a point; thence West parallel to the North line
of said quarter quarter section 20 feet to a point; thence North parallel to the
East line of said Lot 26, 45 feet to a point;  thence East parallel to the North
line of said quarter quarter  section 20 feet to the place of beginning,  on the
East line of said Lot 26,  together with perpetual  easements and  rights-of-way
appertaining thereto.

                             INDUSTRIAL SUBSTATIONS.

     Fairmount  Glass Co.  Substation.  Three 500 KVA 33,000  volt to 4,000 volt
transformers. Substation equipment owned by the Company.

     Chapman-Price  Steel Co.  Substation.  Three 1,000 KVA 33,000 volt to 4,000
volt transformers. Substation equipment owned by the Company.

     American Aggregates Co. Substation. Three 667 KVA 33,000 volt to 4,000 volt
transformers. Substation equipment owned by the Company.

     Link-Belt, Dodge Plant Substation.  Three 667 KVA 33,000 volt to 4,000 volt
transformers. Substation equipment owned by the Company.

     Link-Belt,  Belmont Plant  Substation.  Four 1,000 KVA 33,000 volt to 4,000
volt transformers.  Substation  equipment and land owned by the Company, on land
described in Parcel 70, as follows:

     70. Part of Lots Twenty-five (25), Twenty-six (26) and Twenty-seven (27) in
Dietz's Haughville  Subdivision now a part of the City of Indianapolis,  being a
subdivision of the south part of Block 15 and Lots 23, 24, 25, 26, 27, and 28 in
Germania  Building and Loan  Association  No. 2 Subdivision of Block 7 in Holmes
West End Addition,  the plat of Dietz's  Haughville  Subdivision  is recorded in
Plat Book 10,  page 112 in the office of the  Recorder  of Marion  County,  more
particularly described as follows:

     Beginning  at a point on the north  line of said Lot 25,  64.1 feet east of
the northwest  corner of said lot;  running  thence south 105 feet to a point in
the south line of said lot 27, 66.32 feet east of the  southwest  corner of said
lot 27;  running  thence  east on the  south  line of said lot 27,  37 feet to a
point;  thence  running  north 105 feet to a point in the north line of said lot
25, 101.1 feet east of the  northwest  corner of said lot 25; thence west on the
north line of said lot 25, 37 feet to the place of beginning.

     Electric Steel Company Substation.  Three 500 KVA 33,000 volt to 4,000 volt
transformers. Substation equipment owned by the Company.

                      A.C. to D.C. CONVERSION SUBSTATIONS.

     Substation  No. 1. Three motor  generators  with an  aggregate  capacity of
3,850 KW. Also a 36,000 ampere hour storage battery. Located on land hereinafter
described as leased Parcel C.

     Substation No. 2. Two motor generators with an aggregate  capacity of 2,250
KW. Located on land described in Parcel 71, as follows:

     71. A part of Lot Four (4) in square thirty-five (35) of the Donation Lands
of the Town, now City, of Indianapolis,  described as follows:  Beginning on the
east line of said Lot at a point thirty (30) feet south of the northeast  corner
thereof;  thence south along the said east line thirty-two (32) feet and six (6)
inches to a point;  thence  west  parallel  with the north  line of said lot one
hundred  and  ninety-five  (195) feet more or less,  to an alley;  thence  north
thirty-two  (32) feet six (6) inches to a point;  thence east  parallel with the
north  line of said  lot one  hundred  ninety-five  (195)  feet to the  place of
beginning.

     Substation No. 3. Two motor generators with an aggregate  capacity of 2,000
KW. Also a 27,600  ampere hour  storage  battery.  Located on land  described in
Parcel 72, as follows:

     72. Lot five (5) in Hervey Bates' Subdivision of Out Lot fifty-nine (59) in
the City of Indianapolis,  according to the plat of said subdivision recorded in
Deed  Record  "S" at page 64 in the  office of the  Recorder  of Marion  County,
Indiana.

     Substation No. 4. Two motor  generators with an aggregate capacity of 2,000
KW. Also a 36,000  ampere hour  storage  battery.  Located on land  described in
Parcel 73.

     73. Lot 8 in Blake's  Subdivision of Square 96 in the City of Indianapolis,
as per plat  thereof,  recorded in Plat Book 1, pages 89 and 90 in the office of
the Recorder of Marion County, Indiana.

     Substation No. 5. Contains two motor generators with an aggregate  capacity
of 2,400 KW. Located within C.C.  Perry Plant,  Section K, on land  hereinbefore
described in Parcel 27.

     Substation No. 6. Contains two motor generators with an aggregate  capacity
of 2,200 KW. Located on land hereinafter described as leased Parcel A.

<PAGE>

                      GROUP THREE--TRANSMISSION LINE SITES.

     The Company owns sites for use in connection with its  transmission  lines,
which sites are located on lands  described in Parcels 74 to 87 both  inclusive,
as follows:

     74. A parcel of ground in the  South 1/2 of the  Northwest  1/4 of  Section
numbered  5 in  Township  15  North,  of  Range 3 East of the  Second  Principal
Meridian, same being a portion of Lot numbered 8 in the Subdivision of said half
quarter  Section  aforesaid  made  by  Commissioners  of the  estate  of  Zadock
Tomlinson,  deceased,  the plat of which  appears of record in Land Record ZZ at
page 147 thereof, in the office of the Recorder of Marion County,  Indiana, such
portion of said Lot  numbered  Eight (8) being more  particularly  described  as
follows:

     Beginning in the center line of Michigan  Street at a point distant  736.32
feet  north of the south  line of said Lot 8, and  235.88  feet west of the east
line of said Lot 8,  thence  east  along and with the  center  line of  Michigan
Street,  117.94 feet to a point;  thence  south  367.88 feet to a point  distant
118.39 feet, west of the east line of said Lot 8; thence west, 118.39 feet, to a
point  distant  368.16 feet north of the south line of said Lot 8; thence  north
368.18 feet to the place of beginning, containing one acre, more or less.

     75. Lot Four (4) in  Emblegarde,  being a Subdivision  of the south half of
the Northeast Quarter of Section 14, Township 17 North,  Range 3 East, in Marion
County,  State of Indiana,  as per plat thereof,  recorded in Plat Book 15, page
176, in the Office of the Recorder of Marion County, Indiana.

     76. Part of the northeast1/4of Section 23, Township 16 North, Range 4 East,
described as follows:

     Beginning at a point in the north line of said  quarter  section 1200 links
west of the northeast corner thereof,  running thence west along said north line
228 links to the center of the  Indianapolis  and  Lanesville  Free  Gravel Road
known as the  Pendleton  Pike;  thence west 31 1/2 degrees south with the center
line of said Pike 109 links;  thence south  parallel  with the east line of said
section 948 links to a point which is the  southeast  corner of the 4-acre tract
of land heretofore conveyed by Hiram J. Glass to Harvey N. Gilbert;  thence east
parallel  with the north line of said section 309 links;  thence north  parallel
with  the east  line of said  section  1000  links  to the  place of  beginning,
containing 3 1/2 acres, more or less.

     77. Part of the east half of the  southeast  1/4 of Section 2,  Township 15
North, Range 4 East, further described as follows, to-wit:

     Beginning  in the center of the  National  Road at a point 194.1 feet east,
measured  in said  center  line  from  the  west  line of said  east  1/2 of the
southeast 1/4 of Section 2, and running thence south parallel with the west line
of said half  quarter  section  1000.65 feet to a point on the north line of the
right  of  way of the  Pittsburgh,  Cincinnati,  Chicago  & St.  Louis  Railway,
formerly the Indiana Central Railroad; thence east along said north line of said
right of way 156.9 feet;  thence north on a line  parallel with the west line of
said half  quarter  section  1000.50 feet to a point in said center line of said
National  Road;  thence west along said center line of said  National Road 156.9
feet to the place of beginning, containing 3.61 acres, more or less.

     78. Lot 40 in Exeter Park,  being a  subdivision  of part of the  northeast
quarter  of Section  36,  Township  17 North,  Range 3 East,  in Marion  County,
Indiana, as per plat thereof, recorded in Plat Book 14, page 21 in the office of
the Recorder of Marion County, Indiana.

     79. Lot 7 in DeVor's  North  Meridian  Street  Addition  in Marion  County,
Indiana, as per plat thereof,  recorded in Plat Book 16, page 125, in the office
of the Recorder of Marion County, Indiana.

     80. Lot 20 in DeVor's  North  Meridian  Street  Addition in Marion  County,
Indiana, as per plat thereof,  recorded in Plat Book 16, page 125, in the Office
of the Recorder of Marion County, Indiana.

     81.  Lot 7 in  Emblegarde,  being a  Subdivision  of the south  half of the
northeast  quarter of Section  14,  Township 17 North,  Range 3 East,  in Marion
County, Indiana, as per plat thereof, recorded in Plat Book 15, page 176, in the
Office of the Recorder of Marion County, Indiana.

     82. Lot 41 in Exeter Park,  being a  Subdivision  of part of the North East
Quarter of Section 36, Township 17 North, Range 3 East, as per plat thereof,  in
Plat Book 14, page 21.

     83. Lot One (1) in Exeter Park,  the plat of which appears of record in the
Office of the Recorder of Marion County, Indiana, Plat Book 14, page 21.

     84. Part of the north 1/2 of the  northwest  1/4 of Section 8,  Township 16
North, Range 3 East, of the Second Principal Meridian in Marion County, Indiana,
described  as follows:  Beginning  at a point on the north line of said  Section
2795.2 feet west of the north east corner of said  Section,  thence  south along
the west line of the right of way of the C.C.C. and St. L. Railway 590.8 feet to
a point,  thence  south 89 degrees  47' west 100 feet to a point,  thence  north
parallel with the west line of the C.C.C.  & St. L. Railway to the North line of
said  Section,  thence east along the north line of said Section 100 feet to the
place of beginning.

     85. Lots number One (1), Two (2), Three (3), Four (4) and Five (5) in Block
lettered Z, in Augusta Heights,  First Section, the plat of which is recorded in
Plat Book 20, page 5, in the office of the Recorder of Marion County, Indiana.

     86.  Lots  Numbered  Thirteen  (13) and  Fourteen  (14) in Block AA and Lot
Numbered Thirteen (13) in Block CC, in Augusta Park, Third Section,  an Addition
to the City of Indianapolis, the plat of which is recorded in Plat Book 24, page
132, in the office of the Recorder of Marion County, Indiana.

<PAGE>

     87. A part of the Northeast Quarter of Section 8, Township 15 North,  Range
3 East, more particularly described as follows,  to-wit: Beginning at a stone at
the Northwest  corner of the Northeast  Quarter of Section 8, Township 15 North,
Range 3 East;  thence  East along the North line of said  Section  271.26  feet;
thence  South  parallel  with the West  line of the  Northeast  Quarter  of said
Section  8,  1346.4   feet  to  the  center  of  the   National   Road;   thence
Northeastwardly  along  said  center  line  Seventeen  hundred  thirty-nine  and
seventy-six  hundredths feet; thence North 52 degrees 30' West 47.69 feet to the
North line of said National Road, the initial point of beginning; running thence
North 52 degrees 30' West along the East line of said land 760 feet to the South
right-of-way  line of the Indianapolis & Western Railway  (Danville  Division of
the  T.H.I.& E.  Traction  Company);  thence   westwardly   along   said   South
right-of-way  line,  28.3 feet;  thence  South 52 degrees  30' East 245.2  feet;
thence South 36 degrees East 352.8 feet;  thence South 7 degrees 48' East 2 feet
to the North line of the Rockville Road;  thence  Southeasterly  along the North
line of said  road 220  feet to the  North  line of the  National  Road;  thence
Northeasterly  along  the  North  line  of  said  road 9 feet  to the  place  of
beginning, containing .80 acres more or less.

                       GROUP FOUR--MISCELLANEOUS PROPERTY

     The  Company  owns  buildings  providing  facilities  for  garage,  general
storeroom,   maintenance  shops,  engineering,   service,  meter  and  operating
departments,  and a central heating plant, together with pole storage yard and a
Company filling station, all located on land described in Parcel 88, as follows:

     88. A part of the  southeast  quarter of  Section  Ten (10) and part of the
southwest  quarter of Section Eleven (11),  all in Township  Fifteen (15) North;
Range  Three (3) East,  described  as  follows:  Beginning  on the north line of
Morris Street at a point  twenty-seven and three-tenths  (27.3) feet east of the
southeast  corner of Lot "K" in McCarty's  5th West Side  Addition,  and running
east with the north line of Morris Street four hundred ninety-four (494) feet to
the west line of the right of way of the  Indianapolis  and  Vincennes  Railroad
Company (such right of way was conveyed to said  railroad by two certain  deeds,
the one executed by Nicholas  McCarty et al. by deed dated  September  14, 1876,
and recorded in the  Recorder's  Office of Marion  County in Land Record 4, page
233, and the other by Henry Day, Guardian,  by deed dated December 23, 1876, and
recorded in the same volume at page 231); thence northeastwardly with said right
of way line sixteen hundred and sixty-seven (1667) feet to the south line of Ray
Street  (formerly  Woodburn  Avenue);  thence  west with the south line of said
street four hundred ninety-four (494) feet; thence  southwestwardly  parallel to
said  railroad  sixteen  hundred  sixty-seven  (1,667)  feet  to  the  place  of
beginning;  containing thirteen and eighty-five  hundreds (13.85) acres, one and
one-third (11/3) acres of which are in said Section Eleven (11).

     A warehouse used for storing steam heat service supplies is located on land
described in Parcel 89, as follows:

     89.  Sixty-five  (65)  feet off the  entire  north  end of Lot Eight (8) in
Square Sixty-Six (66) in the City of Indianapolis,  ten (10) feet off the entire
south end of said  described  portion  of said Lot Eight (8) to be used with ten
(10) feet off the north end of the  balance of said lot for the purpose of light
for  both  properties  in  accordance  with the  provisions  made in the deed of
September  26,  1899,  from  Julius A.  Hanson and wife to William J.  Richards,
recorded  in Town Lot Record  319,  page 465,  in the office of the  Recorder of
Marion County, Indiana.

     The Company  leases to various  tenants  floor space in  buildings  on land
described in Parcels 90 and 91, as follows:

     90.  Lots One (1),  Two (2),  Three  (3),  Four (4) and Five (5) and also a
strip of ground ten (10) feet wide,  being  vacated alley north of and adjoining
said Lot Five (5)  (except  that part  conveyed to the  Pittsburgh,  Cincinnati,
Chicago,  and St. Louis Railroad  Company,  by deed dated February 16, 1926, and
recorded July 20, 1926, in Town Lot Record 769, page 419,  Instrument No. 28532)
all in Wilson's  Addition,  being a subdivision of Lots Twenty-Nine (29), Thirty
(30), and Thirty-One (31) in Allen, Johnson and Wilson's Addition to the City of
Indianapolis,  as per plat  thereof  recorded  in Plat Book 10, page 147, in the
office of the Recorder of Marion County, Indiana.

     91. Lots Thirty-Two (32),  Thirty-Three (33), Thirty-Four (34), Thirty-Five
(35), Thirty- Six (36),  Thirty-Seven (37), Thirty-Eight (38), Thirty-Nine (39),
and Forty (40),  (except  fifteen  (15) feet off of the south ends of said lots,
also except that part conveyed to P.C.C.  & St. L.R. Co. by deed dated  February
16,  1926,  and  recorded  July 20,  1926,  in Town Lot  Record  769,  page 419,
Instrument  No.  28532) in Allen,  Johnson &  Wilson's  subdivision  of out lots
Seventy-Five  (75) and  Seventy-Six  (76) of the  Donation  Lands of the City of
Indianapolis,  as per plat  thereof  recorded  in Plat Book 4, page 238,  in the
office of the Recorder of Marion County, Indiana.

     A recreation center for use of the Company's  employees is provided on land
described in Parcel 92, as follows:

     92. Lots  Sixteen  (16) and  Seventeen  (17) and  Eighteen  (18) in John W.
Murphy's and Elizabeth Tinker's corrected  sub-division of the north part of the
east half of the  southwest  quarter of Section 36,  Township 16 North,  Range 3
East,  as per plat  thereof  recorded in Plat Book 3, page 126, in the office of
the Recorder of Marion County, Indiana.

     Property  formerly used but not now in use is land  described in Parcels 93
and 94, as follows:

     93. Lot Numbered Twenty(20) in Block Ten (10) in North Side Addition to the
City of Indianapolis,  the plat of which is recorded in Plat Book 5, page 25, in
the office of the Recorder of Marion County, Indiana.

     94. Lots 696 to 706, both inclusive,  788 to 800 both inclusive, 813 to 831
both inclusive,  841 to 850 both inclusive and that portion of Lots 840, 851 and
852,  which  was  conveyed  by The  Beveridge  Paper  Company  to  Terre  Haute,
Indianapolis  and  Eastern  Traction  Company by deed  dated  July 13,  1910 and
recorded  July 18,  1910 in Town Lot  Record  464 page 20,  all in Stouts  Tenth
Street Addition, now in the City of Indianapolis,  as per plat thereof, recorded
in Plat  Book 12,  page 52,  in the  office of the  Recorder  of Marion  County,
Indiana.

     Also,  the 12 foot alley  heretofore  vacated and lying between Lots 696 to
705 and Lots 788, 823 and 849; also a strip of ground of the uniform width of 25
feet lying north of and  adjacent to the north side of Lot 800,  being the south
half of 11th Street heretofore vacated;

     Also all that part of Cable Street,  heretofore  vacated lying between Lots
703, 788 to 799 inclusive and Lots 702 and 813 to 823 inclusive;

     Also a strip of ground of the  uniform  width of 25 feet  lying east of and
adjacent  to the  east  end of Lot 800  being a part of the  west  half of Cable
Street,  heretofore vacated; all of Torbet Street,  heretofore vacated; also all
the 12 foot alley  heretofore  vacated lying between Lots 813 to 823  inclusive,
and Lots 849, 824 to 831 both inclusive;  also all of Minkner Street  heretofore
vacated lying  between Lots 824 to 831 inclusive and Lots 841 to 848  inclusive;
also,  all the 12 foot alley  heretofore  vacated  lying between Lots 841 to 848
inclusive and Lot 850; also a strip of ground of the uniform width of 7 1/2 feet
lying north of and  adjacent to the north sides of Lots 813,  831,  841 and 850,
being the south half of an alley heretofore  vacated;  Also, a part of the north
half of the last above described  vacated alley being 7 1/2 feet, lying south of
all of Lot 851 and that portion of Lot 840 conveyed to Terre Haute, Indianapolis
and Eastern Traction Company in Town Lot Record 464 page 20 as set out above.

<PAGE>
                                    PART II.

           COAL PROPERTY IN THE COUNTY OF SULLIVAN, STATE OF INDIANA.

     All the right,  title and  interest  of the  Company in and to the coal and
other minerals in and underlying  the following  described  parcels or tracts of
land  situate in the County of Sullivan in the State of Indiana,  together  with
all  buildings,  structures,  improvements,  machinery,  and  equipment of every
description  now  or  hereafter   affixed   thereto  or  stationed   thereon  or
appertaining thereto, to wit:

     All the coal and other minerals in and  underlying the following  described
pieces,  parcels or tracts of land  lying and being in the  County of  Sullivan,
State of Indiana, to-wit:

     The northwest  quarter of the  northwest  quarter of Section Eight (8); the
northeast  quarter of the northwest quarter of Section Eight (8); the south half
of the northwest  quarter of Section Eight (8); the northeast quarter of Section
Eight (8); the north half of the  southeast  quarter of Section  Eight (8); also
beginning at the northeast corner of the southwest  quarter of Section Eight (8)
and running thence west  thirty-nine (39) chains  ninety-two (92) links;  thence
south nine (9) chains  fifty (50)  links;  thence east  thirty-nine  (39) chains
ninety-two (92) links;  thence north nine (9) chains and fifty (50) links to the
place of beginning;  all in Township Eight (8) North, Range Eight (8) West. Also
the  southeast  quarter of the  southwest  quarter of Section  Five (5) also the
southwest  quarter of the southeast quarter of Section Five (5); all in Township
Eight (8) North,  Range Eight (8) West.  Also the  northeast  quarter of Section
Seven (7); the northwest  quarter of the southeast quarter of Section Seven (7);
the southeast quarter of the northwest quarter of Section Seven (7); twelve (12)
acres  off of the east  side of the east half of the  southwest  quarter  of the
northwest  quarter of Section Seven (7); the northeast  quarter of the northwest
quarter of Section  Seven (7),  except a tract in the northwest  corner  thereof
forty (40) rods east and west and forty-eight  (48) rods north and south; all in
Township Eight (8) North, Range Eight (8) West; together with the rights to mine
and remove said coal and minerals,  and the coal and minerals of adjacent lands,
and the  right of  ingress  and  egress  through  and over  said  lands for that
purpose,  and the right or option to purchase certain portions of the surface of
said lands as may be necessary for the construction, location and maintenance of
coal mines,  tipple,  tracks, and buildings  necessary for the operation of coal
mines,  and for such  railroad  and switches as may be necessary to connect said
mines with the main line or main switch of any  railroad;  all as described  and
expressed  in a  certain  deed  bearing  date the 19th date of  February,  1903,
executed by the Powell Coal Company to Daniel W. Marmon and Charles C. Perry and
recorded  in the office of the  Recorder of Sullivan  County,  Indiana,  in Deed
Record 83, on page 390.

                                    PART III.

             COAL PROPERTY IN THE COUNTY OF PIKE, STATE OF INDIANA.

     All the right,  title and  interest  of the  Company in and to the coal and
other minerals in and underlying  the following  described  parcels or tracts of
land  situate in the County of Pike in the State of Indiana,  together  with all
buildings,   structures,   improvements,   machinery,  and  equipment  of  every
description  now  or  hereafter   affixed   thereto  or  stationed   thereon  or
appertaining thereto, to wit:

     All the  coal  situated,  lying  and  being in and  constituting  a part of
following described real estate in Pike County, in the State of Indiana, to wit:

     The southeast  quarter of the southwest quarter of the southwest quarter of
Section Three (3), Township One (1) South, Range Nine (9) West, and also two (2)
acres in the southeast  quarter of the  southwest  quarter of said Section Three
(3) bounded as  follows:  Commencing  at the  southwest  corner of said  quarter
quarter section and running thence north forty (40) rods,  thence east eight (8)
rods,  thence south forty (40) rods,  thence west eight (8) rods to the place of
beginning.

     Also, the southwest  quarter and the west half of the southeast  quarter of
Section  Ten  (10),  Township  One  (1)  South,  Range  Nine  (9)  West,  except
three-quarters  (3/4)  acre in the  southeast  corner  of the  west  half of the
southeast quarter of said Section Ten (10);

     Also,  the west half of the southwest  quarter of the northwest  quarter of
said Section Ten (10);  the west half of the northeast  quarter of the northwest
quarter of said Section Ten (10); the northeast quarter of the northeast quarter
of the northwest  quarter of said Section Ten (10);  and a part of the northwest
quarter of the northeast quarter of said Section Ten (10), described as follows:
Commencing  at the northwest  corner of said quarter  quarter  section,  running
thence south forty (40) rods;  thence east thirty (30) rods,  thence north forty
(40) rods, thence west thirty (30) rods to the place of beginning;  also, a part
of the  northwest  quarter of the  northwest  quarter of said  Section Ten (10),
described as follows:  Beginning at the southeast corner of said quarter quarter
section, running thence north eighty (80) rods, thence west six (6) rods, thence
south forty (40) rods,  thence west  thirty-eight  (38) rods, thence south forty
(40) rods;  thence east forty-four  (44) rods to the place of beginning,  all in
Township One (1) South, Range Nine (9) West;

     Also,  thirty-five  (35) acres in the  northwest  quarter of the  southwest
quarter of Section Fourteen (14),  Township One (1) South,  Range Nine (9) West,
described as follows: Commencing at the northwest corner of said quarter quarter
section,  running thence east seventy (70) rods,  thence south eighty (80) rods,
thence west  seventy  (70) rods,  thence  north eighty (80) rods to the place of
beginning;

     Also, all of Section Fifteen (15),  Township One (1) South,  Range Nine (9)
West, excepting the north half of the northeast quarter of the northeast quarter
thereof;  and  excepting  also one and  one-half (1 1/2) acres in the  southwest
corner of the northwest quarter of the northeast quarter of said Section Fifteen
(15),  described as follows:  Beginning at the southwest corner of the northwest
quarter of the northeast  quarter of said Section  Fifteen (15),  running thence
east sixteen (16) rods, thence north fifteen (15) rods, thence west sixteen (16)
rods,  thence south fifteen (15) rods to the place of beginning;  and excepting,
also a part of the southwest  quarter of the  southwest  quarter of said Section
Fifteen  (15)  described  as  follows:  Commencing  forty  (40) rods east of the
southwest  corner of said quarter  quarter  section,  running thence north forty
(40) rods, thence east eight (8) rods, thence south forty (40) rods, thence west
eight (8) rods to the place of  beginning,  said  exception  containing  two (2)
acres, more or less;

     Also, all of Section  Twenty-two (22),  Township One (1) South,  Range Nine
(9) West,  excepting sixteen (16) acres in the southwest corner thereof occupied
by the Village of Oatsville,  and excepting two (2) acres,  more or less, in the
southwest  corner of the  southeast  quarter  of the  northeast  quarter of said
Section  Twenty-two  (22),  described as follows:  Commencing  at the  southwest
corner  of  the  southeast  quarter  of the  northeast quarter  of  said Section
Twenty-two (22),  thence north  twenty-five (25) rods, five and one-half (5 1/2)
feet,  thence east  thirteen  (13) rods,  thirteen  and  one-half (13 1/2) feet;
thence south twelve (12) rods, three and one-half (3 1/2) feet, thence west to a
point ten (10) rods,  fourteen and one-half (14 1/2) feet, more or less, east of
the west line of the southeast  quarter of the northeast quarter of said section
twenty-two (22), thence south thirteen (13) rods, two (2) feet, more or less, to
the south line of the northeast quarter of said section twenty- two (22), thence
west ten (10) rods,  fourteen and one-half (14 1/2) feet,  more or less,  to the
place of beginning;

     Also, a part of the northwest  quarter of the northwest  quarter of Section
Twenty-Three  (23),  Township One (1) South,  Range Nine (9) West,  described as
follows:  Beginning at the  northwest  corner of said quarter  quarter  section,
running thence east forty-eight (48) rods, thence south eighty (80) rods, thence
west  forty-eight  (48)  rods,  thence  north  eighty  (80) rods to the place of
beginning, containing twenty-four (24) acres, more or less.

<PAGE>

     Also, the north half of the northwest quarter of Section Twenty-Seven (27),
Township One (1) South,  Range Nine (9) West,  excepting the tract  described as
follows:  Beginning six (6) rods east of the northwest  corner of the said north
half of the northwest quarter of said Section  Twenty-Seven (27), running thence
east to the  southeast  corner of Lot Four (4) in  Oatsville,  thence  south one
hundred  fifty-five (155) feet,  thence west to a point six (6) rods east of the
west line of said quarter  section,  thence north one hundred  fifty-five  (155)
feet to the place of beginning,  and  excepting  also,  the following  described
tract,  to-wit:  Beginning at a point two hundred sixty-seven (267) feet east of
the northwest corner of said quarter  section,  running thence south one hundred
forty (140) feet;  thence east one hundred (100) feet,  thence north one hundred
forty (140) feet,  thence west one hundred (100) feet to the place of beginning,
and excepting also, the following  described tract, to- wit:  Beginning thirteen
(13) rods,  nine and one-half (9 1/2) feet east of the northwest  corner of said
quarter  section,  thence south one hundred fifty (150) feet,  thence east fifty
(50) feet,  thence  north one hundred  fifty (150) feet,  thence west fifty (50)
feet to the place of beginning.

     Together  with the right to mine and remove the same and for the purpose of
determining the presence and value of such coal, the right in said  Indianapolis
Power & Light Company,  its successors and assigns,  to enter upon said premises
with such  machinery  and  appliances  as may be  necessary  for the  purpose of
exploring and testing same by drilling or otherwise;

     Also the following rights,  privileges,  franchises and easements,  to-wit:
The right to enter  upon such  lands and sink such  shafts  for  hoisting  coal,
supply of air,  discharge  of water or escape as may be  necessary  for the best
operation of a coal mine; also the right to the use of so much of the surface of
said land as may be required for the location  and  construction  of tipples and
appurtenant buildings and the deposit and storage of refuse and other materials;
also the right to locate,  construct  and  operate a railroad  switch,  track or
tracks, over or across such premises,  together with a right of way and easement
for same;

     Also the right of way and easement  for a practical  wagon road and the use
of the same to and from such mine and its  appurtenances;  also the easement and
right to convey away,  over and across said premises,  in the natural courses of
drainage,  any water that may be produced by the process of mining and  removing
the underlying coal;

     Also the  right  and  easement  that the  said  Indianapolis  Power & Light
Company,  its successors and assigns,  are, under no  circumstances,  to be held
responsible  for any  damage  that may  accrue to the  surface of said land from
subsidence,  or  otherwise,  by reason of the  mining and  removing  of the coal
underlying the same;

     Also, all the right,  title and interest of Pike County Coal Corporation in
and to the real  estate  hereinabove  described,  and all the title,  interests,
rights, easements,  privileges, rights of way and franchises of said Pike County
Coal  Corporation  in, upon,  under and  appurtenant  to said real  estate,  and
including all the rights,  privileges,  easements,  rights of way,  licenses and
franchises of said Pike County Coal Corporation in, and upon the surface of said
real estate.

<PAGE>

     Also, a perpetual right of way and easement for a railroad switch, track or
tracks,  from the lands hereinabove  described  eastwardly towards the lines and
tracks of the New York Central  Railroad  Company,  sometimes known as the lines
and tracks of the Evansville, Indianapolis and Terre Haute Railroad Company, for
the proper and  convenient  operation  of a coal mine or mines in or on the real
estate  hereinbefore described,  upon, over and across the following  described
real estate in said Pike County, to-wit:

     The south half (1/2) of the northwest quarter (1/4); the west half (1/2) of
the  northeast  quarter  (1/4);  the  northeast  quarter  (1/4) of the northeast
quarter (1/4); the west half (1/2) of the southeast quarter (1/4);

     A part of the  northeast  quarter  (1/4) of the  southeast  quarter  (1/4),
described as follows:  Commencing at the southeast  corner of said quarter (1/4)
quarter (1/4)  section,  running west eighty (80) rods;  thence north sixty (60)
rods; thence east eighty (80) rods; thence south sixty (60) rods to the place of
beginning;

     A part of the  northeast  quarter  (1/4) of the  southwest  quarter  (1/4),
described  as follows:  Commencing  at the center of said  Section  Twenty-Seven
(27), running thence west eighty (80) rods; thence south sixty (60) rods; thence
east eighty (80) rods; thence north sixty (60) rods to the place of beginning;

     Also,  eighteen  (18)  acres in the form of a  parallelogram  taken off the
north side of the northwest quarter (1/4) of the southwest quarter (1/4), all in
Section Twenty-Seven (27), Township One (1) South, Range Nine (9) West, together
with the right,  privilege  and  authority in and to said  Indianapolis  Power &
Light Company, its grantees, successors and assigns, to construct,  reconstruct,
repair,  operate,  maintain and remove such railway switch track or tracks,  and
all  necessary  culverts,  bridges,  grades,  fills  and cuts and all  necessary
abutments,  piers, structures,  towers, poles, signals, wires, cables, telephone
and/or telegraph or other communication systems, plants, devices,  equipment and
appliances,  and all other  appliances or fixtures for the proper  operation and
maintenance of such railway switch track or tracks;

     Also,  the right and easement to connect with and use any railroad track or
switch  that may be  constructed  or  acquired by any  subsequent  purchaser  or
purchasers  from said Receiver of any remaining  part or parts of the coal lands
of said Pike  County Coal  Corporation  not  conveyed  by said  Receiver to said
Indianapolis  Power & Light  Company  from,  upon  and  across  any part of said
Section 27, outward to the main line of any railroad common carrier,  subject to
and conditioned  upon an agreement for an equitable  distribution of the cost of
maintenance  and  operation  of such  switch or track,  including  an  equitable
allocation of the capital cost.

<PAGE>

                                    PART IV.

                                   LEASEHOLDS.

     The  following  described  leases with respect to the  following  described
parcels  or  tracts  of land  situate  in the  County  of Marion in the State of
Indiana,  together with all the right,  title, and interest of the Company,  now
owned or hereafter acquired, in and to any and all of said parcels and tracts of
land and all the buildings, structures, improvements, machinery and equipment of
every description now or hereafter stationed thereon, affixed thereto, or in any
way appertaining thereto, to-wit:

                                LEASED PARCEL A.

                                Substation No. 6.

     That certain lease dated August 29, 1919, between Thomas A. Wynne (his wife
Minnie W. Wynne  joining) as lessor and  Indianapolis  Light and Heat Company as
lessee,  recorded September 5, 1919, in Miscellaneous  Record 107 at page 375 in
the Recorder's Office of Marion County,  Indiana,  whereby the lessor demised to
the lessee, its successors and assigns,  for a period of ninety- nine years from
August 29, 1919, the following described property:

          A part of the  Northeast  Half of Square One  Hundred and One (101) in
     the City of Indianapolis, described as follows:

          Beginning  on the east  line of said  Square at a point 205 feet 2 1/2
     inches south of the  northeast  corner  thereof and running  north with the
     east line of said Square and the west line of East  Street 32 feet;  thence
     west 108.7 feet;  thence  south 45 degrees west at right angles to Virginia
     Avenue 53.9 feet to Virginia  Avenue;  thence  south 45 degrees  east along
     Virginia  Avenue 36.1 feet;  thence north 45 degrees  east 48 feet;  thence
     eastwardly 87 feet 8 inches to the place of beginning.

                                LEASED PARCEL C.

                  Former Office Building and Substation No. 1.

     That certain lease dated  September 30, 1922,  between Charles C. Perry and
wife and  Elizabeth  C.  Marmon,  as lessors,  and  Indianapolis  Light and Heat
Company,  as lessee,  recorded October 25, 1924, in Miscellaneous  Record 153 at
page 270 in the Recorder's office of Marion County, Indiana, whereby the lessors
demised to the lessee,  its successors and assigns,  for a period of ninety-nine
years from October 1, 1922, the following described property:

          The northwest one-half (1/2) of Lot Thirteen (13) in Square Fifty-Five
     (55) in the City of  Indianapolis,  said  premises  being  known as numbers
     forty-six (46) and forty-eight (48) on Monument Circle.

                                LEASED PARCEL D.

                   Coal Storage--C.C. Perry Plant, Section W.

     That certain lease dated May 6, 1936,  between  Indianapolis Water Company,
lessor, and Indianapolis Power & Light Company, lessee, for a term of five years
beginning May 1, 1936, covering the two certain tracts of land in Marion County,
Indiana, particularly described as follows, viz:

                                   TRACT NO. 1

          Beginning  on  the  south  line  of  Market  Street  in  the  City  of
     Indianapolis,  at its intersection with the east line of Geisendorf Street,
     thence  southwardly  with said east line of  Geisendorf  Street,  making an
     interior  angle of 87 degrees 46' with said south line of Market Street Two
     Hundred Fourteen and Forty-five  Hundredths (214.45) feet to the north line
     of  Washington  Avenue,  thence  eastwardly  with  the said  north  line of
     Washington Avenue,  making an interior angle of 100 degrees 04' Sixty-seven
     and  Sixty-two  Hundredths  (67.62) feet to the west  property  line of the
     Merchants  Heat and Light  Company,  thence north with said property  line,
     making  an  interior  angle of 82  degrees  10'  with  said  north  line of
     Washington Avenue, Two Hundred  Twenty-three and Thirty Hundredths (223.30)
     feet to the south line of Market  Street,  thence  west at right  angles to
     said property line, 75.38 feet to the place of beginning, containing 15,555
     square feet.

                                   TRACT NO. 2

          Beginning at the northeast corner of Market and Geisendorf  Streets in
     the City of Indianapolis,  Marion County,  Indiana; thence south 85 degrees
     35' east,  two hundred  thirty-two  and two  hundredths  (232.02) feet to a
     point seven (7) feet west of the center line of the Cleveland,  Cincinnati,
     Chicago and St.  Louis  Railway  Company's  switch  track lying west of the
     forebay;  thence  north 2 degrees  02' 30" west,  ninety and  seventy-seven
     hundredths  (90.77)  feet to a point seven (7) feet west of the center line
     of said  switch;  thence  north 3  degrees  53'  west  fifty  and  thirteen
     hundredths  (50.13)  feet to a point seven (7) feet west of the center line
     of said  switch;  thence  north 10 degrees  08' west,  fifty (50) feet to a
     point seven (7) feet west of the center line of said  switch;  thence north
     19 degrees 15' west forty-four and fifty hundredths (44.50) feet to a point
     seven (7) feet west of the  center  line of said  switch;  thence  north 88
     degrees 56' west one hundred ninety-one and ten hundredths (191.10) feet to
     the east line of  Geisendorf  Street;  thence  south 2 degrees 32 1/2' west
     with the said east line of Geisendorf Street to the place of beginning.

          Also  that  tract of land  lying  north of and  adjacent  to the above
     described tract of land,  bounded on the north and east by a line seven (7)
     feet  southwestwardly  from and parallel  with the center line of the above
     mentioned  switch  track,  and the  center  line of the "Horn  Switch",  so
     called,  to a point in the east line of Geisendorf  Street,  bounded on the
     west by the east line of Geisendorf  Street,  and on the south by the north
     line of the first described tract.

                                LEASED PARCEL E.

                               Coal Supply Switch.

     That certain lease dated May 1, 1936,  between  Indianapolis Water Company,
lessor, and Indianapolis Power & Light Company, lessee, for a term of five years
beginning May 1, 1936,  covering  railroad track or switch serving lessee's C.C.
Perry Plant, Section W.

                                LEASED PARCEL F.

                            Present Office Building.

     That certain  sublease  dated  February 19, 1936,  from  Electric  Building
Company, Inc. to Indianapolis Power & Light Company, recorded February 29, 1936,
in  Miscellaneous  Record  268,  page 310,  in the  Recorder's  office of Marion
County,  Indiana,  whereby said Electric Building Company,  Inc., sublet to said
Indianapolis Power & Light Company, for a term of twenty years from September 1,
1935, portions of the building known as the Electric Building, being situated on
the  southeast  corner of Meridian  Street and  Monument  Place,  being 17 North
Meridian street, on the following described property:

          Lot Fourteen (14) in Square  Fifty-six  (56) of the Donation  Lands of
     the Town, now City, of Indianapolis.

<PAGE>

                                     PART V.

                         Electric Distributing Systems.

     All of the  electric  distributing  systems  now owned by the  Company  and
located in the City of Indianapolis and elsewhere in the County of Marion, State
of Indiana, and also in the Counties of Boone, Hamilton, Hancock, Hendricks, and
Johnson,  State of  Indiana;  and also any and all other  electric  distributing
systems  now owned or which may  hereafter  be  constructed  or  acquired by the
Company,  wheresoever  situated,  and any additions to or extensions of any such
present or future plants and systems,  together with the  buildings,  erections,
structures,  transmission lines, power stations, sub-stations, engines, boilers,
condensers, pumps, turbines,  machinery, tools, conduits, manholes,  insulators,
dynamos,  motors,  lamps,  cables,  wires,  poles,  towers,  cross-arms,  piers,
abutments,  switchboard equipment, meters, appliances,  instruments,  apparatus,
appurtenances, maps, records, ledgers, easements, contracts, permits, facilities
and other property or equipment used or provided for use in connection  with the
construction, maintenance, repair and operation thereof, both that now owned and
that which may  hereafter be acquired by the Company;  together also with all of
the rights, privileges, rights-of-way,  franchises, licenses, grants, liberties,
immunities,  ordinances, permits, and easements of the Company in respect of the
construction,  maintenance,  repair and operation of said plants and systems now
owned or hereafter constructed or acquired; and including, without limitation of
the foregoing,  the 132,000 volt electric  transmission line  approximately 46.9
tower miles or 55.9  circuit  miles,  on steel  towers,  forming a loop  circuit
completely  surrounding  the City of  Indianapolis;  also four 33,000 volt power
loops,  one  in  each  quadrant  of  the  City  of   Indianapolis,   aggregating
approximately  94 wood pole miles or 98.2 circuit  miles;  also the entire 4,000
volt and lower distribution  system consisting of approximately  1,967 wood pole
miles or 2,844 circuit miles of overhead lines;  also the entire street lighting
equipment and underground A.C. and D.C. system.

                                    PART VI.

                    STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

     All the steam and hot water  distributing  systems now owned by the Company
and located in the City of Indianapolis,  Marion County,  Indiana,  and also any
and all other steam or hot water distributing  systems hereafter  constructed or
acquired  by  the  Company,  wheresoever  situated,  and  any  additions  to  or
extensions  of such  present  or future  systems;  together  with the  building,
erections,  structures,  boilers,  heaters,  engines,  tanks, pipe lines, mains,
connections, service pipes, meters, tools, instruments,  appliances,  apparatus,
facilities,  machinery and other property and equipment used or provided for use
in the construction,  maintenance,  repair and operation thereof,  both that now
owned and that which may hereafter be acquired by the Company; and together also
with all of the rights, privileges, rights-of-way, franchises, licenses, grants,
liberties,  immunities,  ordinances,  permits  and  easements  of the Company in
respect of the  construction,  maintenance,  repair and operation of said plants
and systems now owned or hereafter conferred or acquired;  and including without
limitation of the foregoing the certain hot water heating  system  acquired from
Merchants Heat and Light Company,  the certain steam heating distribution system
acquired from Merchants  Heat and Light  Company,  and the certain steam heating
distribution  system  acquired from  Indianapolis  Light and Heat  Company,  all
located in the City of Indianapolis, Marion County, Indiana.

                                    PART VII.

                      INDETERMINATE PERMITS AND FRANCHISES.

     All indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations by or from any state, county, municipality, or other governmental
authority,  now owned or  possessed  by the  Company or  hereafter  granted  to,
conferred upon, or acquired by it, including  particularly,  but not limited to,
its indeterminate permit under the Public Service Commission Act of the State of
Indiana, and all Acts amendatory thereof and supplemental thereto.

     Whenever any reference is hereinabove made to any deed or deeds, conveyance
or  conveyances,  or  other  documents,  such  reference  shall  in no way be in
limitation of the properties  granted or mortgaged herein but shall be deemed to
have been  inserted to aid in  identifying  the premises  therein  mentioned and
described.

     All other property, whether real, personal or mixed (except any hereinafter
expressly excepted),  and whether now owned or hereafter acquired by the Company
and wheresoever situated, including (without in anywise limiting or impairing by
the  enumeration  of the same the scope and  intent of the  foregoing  or of any
general  description  contained in this  Indenture) all lands,  flowage  rights,
water rights,  flumes,  raceways,  dams, rights of way and roads; all plants for
the generation of electricity by water,  steam and/or other power, power houses,
telephone systems, water systems, steam heat and power plants, hot water plants,
substations,  transmission lines,  distribution systems,  bridges,  culverts and
tracks; all offices,  buildings and structures,  and the equipment thereof;  all
machinery,   engines,   boilers,   dynamos,   machines,    regulators,   meters,
transformers,  generators and motors; all appliances whether electrical,  gas or
mechanical,  conduits, cables and lines; all pipes whether for water, steam heat
and power,  or other  purposes;  all mains and pipes,  service pipes,  fittings,
valves and connections,  poles, wires, tools, implements,  apparatus,  furniture
and  chattels;  all  municipal  franchises,  indeterminate  permits,  and  other
permits;  all lines for the transportation,  transmission and/or distribution of
electric  current,  steam  heat and  power or water for any  purpose,  including
towers,  poles,  wires,  cables,  pipes,  conduits and all  apparatus for use in
connection therewith; all real estate, lands, leases, leaseholds; all contracts,
whether heat, light, power, water or street lighting  contracts;  all easements,
servitudes, licenses, permits, rights, powers, franchises, privileges, rights of
way and other rights in or relating to real estate or the  occupancy of the same
and (except as hereinafter expressly excepted) all the right, title and interest
of the Company in and to all other  property of any kind or nature  appertaining
to and/or used and/or  occupied  and/or enjoyed in connection  with any property
hereinbefore described or referred to;

<PAGE>

     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 Section 64 hereof, hereinafter contained), the
tolls, rents, revenues,  issues, earnings,  income, product and profits thereof,
and all the estate,  right,  title and 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,  indeterminate permits and franchises and every part and
parcel thereof;

     IT IS  HEREBY  AGREED  by  the  Company  that  all  the  property,  rights,
indeterminate  permits and  franchises  acquired  by the Company  after the date
hereof (except any hereinbefore or hereinafter  expressly  excepted) shall be as
fully embraced within the lien hereof as if such property, rights, indeterminate
permits  and  franchises  were now owned by the  Company  and were  specifically
described herein and conveyed hereby;

     Provided  that  the  following  are not and are not  intended  to be now or
hereafter granted, bargained, sold, released, conveyed,  assigned,  transferred,
mortgaged,  pledged,  set over or confirmed  hereunder and are hereby  expressly
excepted from the lien and operation of this Indenture,  viz.: (1) cash,  shares
of stock and  obligations  (including  bonds,  notes and other  securities)  not
hereafter  specifically  pledged,  paid,  deposited  or  delivered  hereunder or
hereinafter covenanted so to be; and (2) the land and buildings located at 32-36
South New Jersey Street,  Indianapolis,  Indiana;  also a tract of land (and the
buildings  thereon),  containing  28.04 acres more or less,  being a part of the
west half of the  northwest  quarter of Section 2,  Township  16 North,  Range 4
East, and used as a site for radio station  W.F.B.M.  and (3) any goods,  wares,
merchandise,  equipment,  materials or supplies acquired for the purpose of sale
or resale in the usual course of business or for consumption in the operation of
any  properties of the Company;  construction  equipment  acquired for temporary
use;   vehicles  and   automobiles;   and  (4)  all   judgments,   accounts  and
choses-in-action,  the  proceeds  of  which  the  Company  is not  obligated  as
hereinafter provided to deposit with the Trustee hereunder;  provided,  however,
that the property and rights  expressly  excepted from the lien and operation of
this  Indenture in the foregoing  subdivisions  (3) and (4) shall (to the extent
permitted  by law) cease to be so  excepted  in the event that the  Trustee or a
receiver or trustee  shall enter upon and take  possession  of the mortgaged and
pledged  property by reason of the occurrence of a completed  default as defined
in said Article XIV;

     TO HAVE AND TO HOLD all such properties,  real, personal and mixed granted,
bargained, sold, released, conveyed, assigned, transferred,  mortgaged, pledged,
set over or  confirmed by the Company as  aforesaid,  or intended so to be, unto
the Trustee and its successors and assigns forever;

     Subject,  however,  as to  all  property  embraced  herein  to  all  of the
restrictions,  exceptions  and  reservations  of  easements,  rights  of  way or
otherwise,  contained  in any and all deeds and/or  other  conveyances  under or
through which the Company acquired or shall acquire and/or claims or shall claim
title thereto, and to the restrictions,  exceptions, reservations and provisions
herein specifically set forth; and

<PAGE>

     Subject further to excepted  encumbrances,  as defined in Section 6 hereof,
and as to any  property  hereafter  acquired by the Company to any  mortgages or
other liens which may exist  thereon at the date of  acquisition,  including any
purchase money mortgage or lien upon such property created by the Company at the
time of acquisition of such property;

     IN TRUST NEVERTHELESS,  upon the terms and trusts herein set forth, for the
benefit and security of those who shall hold the bonds and coupons issued and to
be  issued  hereunder,  or any of them,  in  accordance  with the  terms of this
Indenture 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  or in the date of  maturity  thereof,  or  otherwise
howsoever,  subject,  however,  to the  provisions  in  reference  to  extended,
transferred or pledged coupons and claims for interest hereinafter set forth; it
being  intended  that the lien and  security of all of said bonds and coupons of
all series issued or to be issued hereunder shall take effect from the execution
and delivery of this Indenture, and that the lien and security of this Indenture
shall take effect from the date of execution  and delivery  hereof as though all
of the said bonds of all series were  actually  authenticated  and delivered and
issued upon such date;

     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 and interest on the bonds, together with the premium, if any, payable on such
of said bonds as may have been called for redemption prior to maturity, or shall
provide,  as permitted  hereby,  for the payment  thereof by depositing with the
Trustee the entire amount due or to become due thereon for  principal,  interest
and premium,  if any, and if the Company  shall also pay or cause to be paid all
other sums  payable  hereunder  by it,  then this  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 and  between the parties
hereto,  that all such bonds and coupons are to be authenticated,  delivered and
issued and that all property  subject or to become  subject hereto is to be held
subject to the further  covenants,  conditions,  uses and trusts hereinafter 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:

                                   ARTICLE I.

                                  DEFINITIONS.

     SECTION 1. The terms specified in the next succeeding six Sections  hereof,
numbered from 2 to 7, both inclusive, shall, for all purposes of this Indenture,
and of any  indenture  supplemental  hereto,  have the meanings in such Sections
specified.

<PAGE>

     SECTION  2. The term "the  Company"  shall mean the party of the first part
hereto,  INDIANAPOLIS  POWER & LIGHT  COMPANY,  and subject to the provisions of
Article XVII hereof, shall also include its successors and assigns.

     The term "the  Trustee"  shall  mean the party of the second  part  hereto,
American  National  Bank and Trust  Company  of  Chicago,  and,  subject  to the
provisions  of Article  XVIII  hereof,  shall also  include its  successors  and
assigns.

     The term "this  Indenture"  shall mean this instrument of mortgage and deed
of trust,  either as originally executed or as the same may from time to time be
supplemented, modified, altered or amended by any supplemental indenture entered
into pursuant to the provisions hereof.

     The terms "the lien hereof" and the "the lien of this Indenture" shall mean
the lien  created  by these  presents  (including  the  after-acquired  property
clauses hereof) and the lien created by any subsequent conveyance or delivery to
or pledge with the Trustee  hereunder  (whether made by the Company or any other
corporation or any individual or  copartnership)  effectively  constituting  any
property a part of the  security  held by the Trustee  upon the terms and trusts
and subject to the covenants, conditions and uses specified in this Indenture.

     The  term  "the  mortgaged  and  pledged  property"  shall  mean  as of any
particular  time the  property  which at said time is covered or  intended to be
covered  by the lien of this  Indenture  whether  such lien be  created by these
presents (including the after-acquired property clauses hereof) or by subsequent
conveyance  or delivery to or pledge with the Trustee  hereunder  or  otherwise;
property of the character described in clauses (3) and (4) of the proviso in the
granting clauses of this Indenture which expressly excepts certain property from
the lien and operation of this  Indenture  shall not be deemed to be included in
the term  "mortgaged  and pledged  property,"  unless and until and then only so
long as such  excepted  property  shall  cease to be so excepted as set forth in
said proviso.

     The term  "outstanding",  subject to the provisions of the next  succeeding
paragraph  hereof,  shall mean as of any  particular  time with respect to bonds
issued or issuable under this Indenture all bonds which  theretofore  shall have
been authenticated and delivered by the Trustee under this Indenture, except (a)
bonds theretofore paid,  retired,  redeemed or canceled and/or for the purchase,
payment  and/or  redemption of which moneys in the  necessary  amount shall have
been  deposited  with or  shall  then be held by the  Trustee  with  irrevocable
direction so to apply the same,  (b) bonds  deposited  with or held in pledge by
the  Trustee  under  any of the  provisions  of this  Indenture,  and (c)  bonds
authenticated and delivered hereunder,  upon transfer of which or in exchange or
substitution for and/or in lieu of which other bonds have been authenticated and
delivered under any of the provisions of this Indenture.

     For the purposes of Sections 46, 72, 76, 77, 87, 98, 112,  113,  115,  119,
and 124 hereof, in determining whether the holders of the required percentage of
the principal amount of bonds have concurred in any direction,  request, consent
or other action,  or in  determining a quorum under Section 123,  bonds owned by
the Company or by any other obligor on the bonds,  or by any person  directly or
indirectly  controlling  or  controlled  by or under  direct or indirect  common
control with the Company or such obligor, shall be disregarded,  except that for
the purpose of determining  whether the Trustee shall be protected in relying on
any such  direction,  request,  consent or other  action,  only bonds  which the
Trustee knows are so owned,  shall be so disregarded.  Bonds so owned which have
been  pledged in good faith may be regarded as  outstanding  for the purposes of
this  paragraph,  if the pledgee  shall  establish  to the  satisfaction  of the
Trustee  the  pledgee's  right to vote such bonds and that the  pledgee is not a
person  directly or indirectly  controlling  or controlled by or under direct or
indirect  common control with the Company or any other obligor on the bonds.  In
case of a dispute as to such right,  any decision by the Trustee  taken upon the
advice of counsel shall be full protection to the Trustee.

     The term "daily newspaper" shall mean a newspaper  customarily published at
least six days a week.

     SECTION 3. The term  "resolution"  shall mean a resolution  certified under
the corporate seal of the Company by the Secretary or an Assistant  Secretary of
the Company to have been duly adopted by the Board of Directors of the Company.

     The term "engineer" shall mean an individual (who may be an employee of the
Company)  or a  co-partnership  or a  corporation,  engaged  in  an  engineering
business,  appointed by the Board of  Directors  or  Executive  Committee of the
Company and satisfactory to the Trustee.

     The  term  "independent  engineer"  shall  mean  an  engineer,  who  is not
regularly in the employ of the Company or of an affiliate  thereof,  selected by
the Trustee in the  exercise  of  reasonable  care and  approved by the Board of
Directors or Executive Committee of the Company.

     The term  "Treasurer's  certificate"  shall mean a  certificate  signed and
verified by the President or a Vice-President  and the Treasurer or an Assistant
Treasurer of the Company.  Each such  certificate  shall include the  statements
required by Section 21 hereof.

     The term  "engineer's  certificate"  shall  mean a  certificate  signed and
verified by the  President or a  Vice-President  or the Treasurer of the Company
and by an engineer.  Each such certificate shall include the statements required
by Section 21 hereof.

     The term  "independent  engineer's  certificate"  shall mean a  certificate
signed and verified by an  independent  engineer.  Each such  certificate  shall
include the statements required by Section 21 hereof.

     The term  "opinion of counsel"  shall mean an opinion in writing  signed by
counsel  (who  may be of  counsel  to the  Company)  appointed  by the  Board of
Directors or Executive Committee of the Company and satisfactory to the Trustee.
Each such opinion shall include the statements required by Section 21 hereof.

<PAGE>

     The term "independent", when applied to any accountant, engineer, appraiser
or other expert,  shall mean such a person who (a) is in fact  independent;  (b)
does not have any substantial interest, direct or indirect, in the Company or in
any other obligor upon the bonds issued  hereunder or in any person  directly or
indirectly  controlling,  or controlled  by, or under direct or indirect  common
control with,  the Company or any such other  obligor;  and (c) is not connected
with the Company or any other  obligor  upon the bonds  issued  hereunder or any
person directly or indirectly controlling,  or controlled by, or under direct or
indirect  common  control  with,  the Company or any such other  obligor,  as an
officer,  employee,  trustee,  partner,  director,  or person performing similar
functions.

     The term  "control"  shall  mean the power to  direct  the  management  and
policies of a person,  directly or through one or more  intermediaries,  whether
through the ownership of voting securities,  by contract, or otherwise,  and the
terms  "controlling"  and  "controlled"  shall have meanings  correlative to the
foregoing.

     The term  "person"  shall  have the  meaning  assigned  to such term in the
Securities Act of 1933, as approved May 27, 1933 and amended June 6, 1934.

     The term  "affiliate"  shall mean a person  controlling,  controlled by, or
under common control with, another person.

     The acceptance by the Trustee of a certificate,  opinion or appraisal shall
be sufficient  evidence of its appointment,  selection or approval of the signer
or signers within the meaning of this Indenture.

     SECTION 4. (I) The term  "property  additions"  shall mean  plants,  lines,
pipes, mains, cables,  machinery,  transmission lines, pipe lines,  distribution
systems,  service systems and supply systems,  property,  real or personal,  and
improvements,  extensions or additions,  located within the State of Indiana, or
located in any other State if such  property is  physically  connected  with any
property of the Company  located in Indiana by or through other  property of the
Company, acquired by purchase,  consolidation,  merger, donation or in any other
way whatsoever,  subsequent to April 30, 1940, or made or constructed subsequent
to April 30, 1940,  or in the process of  construction  or erection in so far as
actually constructed or erected subsequent to April 30, 1940, and used or useful
or to be  used  in the  business  of  generating,  manufacturing,  transporting,
transmitting,  distributing or supplying  electricity for light,  heat, power or
other purposes,  or steam for power,  heat or other purposes.  Without enlarging
the definition of property  additions  above set forth or the purposes for which
such property shall be used or useful, the term "property  additions" shall not,
however,  include (1) any shares of stock or obligations (including bonds, notes
and other securities),  or (2) any radio broadcasting  property or facilities or
any mining properties or any leasehold  estates or any improvements,  extensions
or additions upon any property of the character described in this clause (2), or
(3) except as herein otherwise  specifically  provided,  going value, good will,
franchises or  governmental  permits  granted to or acquired by the Company,  as
such,  separate  and  distinct  from  the  property  operated  thereunder  or in
connection therewith or incident thereto, or (4) any goods, wares,  merchandise,
equipment,  materials or supplies  acquired for the purpose of sale or resale in
the  usual  course  of  business  or for  consumption  in the  operation  of any
properties of the Company, or construction equipment acquired for temporary use,
or vehicles or automobiles, or judgments,  accounts or choses-in-action,  or (5)
any property the cost of acquiring,  making or constructing  which is chargeable
under  accepted  principles  of  accounting  to operating  expenses,  or (6) any
property now or hereafter  owned by any  corporation of which the Company on May
1, 1940 owned more than fifty per centum (50%) of its outstanding stock.

     Any property (other than property of the character described in clauses (1)
to (4) inclusive of the proviso in the granting  clauses of this Indenture which
expressly excepts certain property from the lien and operation of this Indenture
and other than any property the cost of acquiring,  making or constructing which
is chargeable  under  accepted  principles of accounting to operating  expenses)
acquired by the Company  subsequent  to April 30, 1940,  or made or  constructed
subsequent to April 30, 1940, or in the process of  construction  or erection in
so far as actually  constructed  or erected  subsequent to April 30, 1940,  may,
however,  be deemed to be and treated as property  additions  for the  following
limited purposes:

          (i) as a basis for the release from the lien of this  Indenture of (x)
     any  property  owned by the  Company  on April  30,  1940  which is of such
     character  as would  not  have  been  included  within  the term  "property
     additions"  (as  hereinabove  defined in the  preceding  paragraph  of this
     Section 4) if it had been  acquired or made or  constructed  subsequent  to
     April  30,  1940,  or (y) any  property  acquired  or  made or  constructed
     subsequent  to  April  30,  1940  which is of such  character  as not to be
     included within the term "property  additions" (as  hereinabove  defined in
     the  preceding  paragraph  of this  Section 4);  property of the  character
     described in subdivisions (x) and (y) of this clause (i) being  hereinafter
     in this paragraph referred to as "unfundable property";

          (ii) as a basis for the  withdrawal  of the proceeds of insurance  on,
     the  consideration  for the release of or the  proceeds of the disposal of,
     any unfundable property;

          (iii) as the basis of a credit  under  subdivision  (b) of  Section 41
     hereof against retirements of unfundable property; and

          (iv) for inclusion in the additions under the provisions of clause (B)
     of subdivision (II) of this Section 4 to such extent as may be necessary to
     equal the deductions under clause (A) of subdivision (II) of this Section 4
     with respect to such unfundable property retired.

     (II) When any  property  additions  are  certified  to the  Trustee  in any
certificate under any of the provisions of this Indenture as the basis either of
the right to the  authentication  and delivery of bonds which are being  applied
for or of the right to the  authentication  and delivery of bonds which is being
waived pursuant to the provisions of this Indenture, (A) there shall be deducted
from the cost or fair value thereof,  as the case may be, an amount equal to the
cost (or as to property  additions  the fair value of which at the time the same
became  funded  property was less than the cost as  determined  pursuant to this
Section, then such fair value in lieu of cost) of all funded property previously
retired  (other  than  the  funded  property,  if any,  in  connection  with the
application  for the  release  of  which  such  certificate  is  filed)  and not
theretofore  deducted  from  the  cost  or  fair  value  of  property  additions
theretofore  certified  to the Trustee and (B) there shall be added to such cost
or fair value of property additions as the case may be, the sum of

          (a) the principal amount of all obligations  secured by purchase money
     mortgage  and  all  cash  (other  than  proceeds  of  such  purchase  money
     obligations) received by the Trustee or the trustee or other holders of any
     prior lien, in either case  representing  the proceeds of insurance on, the
     consideration  for the release of or the  proceeds of the disposal of, such
     funded property retired;

          (b) the principal  amount of any bond or fraction of a bond, the right
     to the authentication and delivery of which under the provisions of Section
     31 hereof shall have been waived as the basis of the release of such funded
     property retired;

          (c) one hundred  forty-two and  six-sevenths  per centum (142 6/7%) of
     the principal  amount of each bond or fraction of a bond,  the right to the
     authentication  and  delivery of which under the  provisions  of Section 23
     hereof  shall have been  waived as the basis of the  release of such funded
     property retired;

          (d) one hundred  forty-two and  six-sevenths  per centum (142 6/7%) of
     the principal  amount of each bond or fraction of a bond,  the right to the
     authentication  and delivery of which upon the basis of property  additions
     shall have been waived as the basis of the release of such funded  property
     retired; and

          (e) the amount of the  proceeds of  insurance on or of the disposal of
     such funded  property  retired which shall have been applied by the Company
     to the acquisition or construction of property in substitution  therefor or
     replacement thereof in the exercise by the Company of any right so to apply
     such proceeds without  depositing such proceeds with the Trustee  hereunder
     or with the trustee or other holder of a prior lien as hereinafter defined;

provided,  however,  that the  aggregate  of the amounts  added under clause (B)
above shall in no event exceed the amounts  deducted under clause (A) above. For
the purposes of the deductions  required by this  subdivision (II) of Section 4,
the cost and/or the fair value of funded property retired shall be determined as
follows:  (1) in the case of property  which was owned by  Indianapolis  Power &
Light  Company  on April 30,  1940,  the cost  shall be the cost as shown on the
books of the Company on April 30,  1940,  or, if such cost shall  subsequent  to
April 30, 1940 be  adjusted  on the books of the Company  pursuant to any order,
rule,  regulation  or  recommendation  of any  governmental  commission or other
public authority having or assuming jurisdiction over the Company or over any of
its property or business,  then such adjusted cost; provided,  however,  that if
the cost or adjusted  cost, as the case may be, is not  separately  shown on the
books of the Company, the cost shall be such proportion of such cost or adjusted
cost,  as the case may be, as shall be  allocated on the books of the Company to
such  property  retired,  such  allocation  to be  evidenced  by  an  engineer's
certificate  subsequently  delivered  to the  Trustee;  and  (2) in the  case of
property additions retired,  the cost and the fair value thereof,  respectively,
shall be the cost and the fair value thereof  respectively,  to the Company,  as
shown by the  engineer's  certificate  or  independent  engineer's   certificate
furnished  to the  Trustee at the time such  property  additions  became  funded
property,  or, if not so  separately  shown,  shall be such  portion of the cost
and/or  the fair  value  to the  Company  of  property  additions  shown in such
certificate  as shall be allocated  to such  property  additions  retired in any
engineer's  certificate  subsequently delivered to the Trustee, and in case such
property additions shall not have been included in any engineer's certificate or
independent  engineer's  certificate  theretofore  furnished to the Trustee, the
cost and fair value thereof  shall be as shown,  as of the time when they became
funded property, in an engineer's certificate then delivered to the Trustee.

     III. The Company  covenants  that it will promptly  retire on its books (1)
such of the mortgaged and pledged  property (other than the properties  referred
to in paragraph B of Section 66 hereof)  which at or  subsequent  to the date it
became  mortgaged  and  pledged  property  was or  became  used or useful in the
Company's  business and thereafter  ceased to be used or useful in the Company's
business;  (2) all mortgaged and pledged property that has been sold or disposed
of by the  Company;  and (3)  all  property  which  any  independent  engineer's
certificate,  filed with the Trustee  pursuant to paragraph  (II) of Section 41,
states should be retired.

     SECTION 5. The term "funded property" shall mean:

          (1) All property owned by Indianapolis  Power & Light Company on April
     30, 1940 (other than property of the character  described in clauses (1) to
     (4) inclusive of the proviso in the granting clauses hereof which expressly
     excepts certain property from the lien and operation of this Indenture);

          (2) All property additions to the extent that the same shall have been
     made the basis of the  authentication  and  delivery  of bonds  under  this
     Indenture;

          (3) All property additions to the extent that the same shall have been
     made the basis of the  release  from the lien of this  Indenture  of funded
     property;

          (4)  All  property  to the  extent  that  the  same  shall  have  been
     substituted for or shall have replaced funded property,  as defined in this
     Section,  in the exercise by the Company of any right to apply the proceeds
     of  insurance  on, or of the  disposal  of,  such  funded  property  to the
     acquisition  or  construction  of such  substituted  or  replaced  property
     without  depositing  such proceeds  with the Trustee  hereunder or with the
     trustee or other holder of a prior lien as hereinafter defined;

          (5) All property additions to the extent that the same shall have been
     made the basis of the withdrawal of any funded cash, as hereinafter defined
     in this Section,  held by the Trustee  hereunder or by the trustee or other
     holder of a prior lien as hereinafter defined;

<PAGE>

          (6) All property additions to the extent that the same shall have been
     made the  basis of a credit  under the  provisions  of  subdivision  (c) of
     Section 41 hereof;

          (7) All property  which may  hereafter be acquired by the Company from
     any  corporation  of which the Company on May 1, 1940 owned more than fifty
     per centum (50%) of its outstanding stock.

     If  any  funded  property  shall  be  released  from  the  lien  hereof  as
hereinafter in Article XIII provided,  the property so released shall  thereupon
cease to be funded property but may at any time  thereafter  again become funded
property.

     The term "funded cash" shall mean:

          (a) cash (held by the  Trustee  hereunder  or by the  trustee or other
     holder of a prior lien as  hereinafter  defined in Section 6 hereof) to the
     extent that it represents the proceeds of insurance on or the release of or
     the taking by eminent domain of funded property;

          (b) cash held at any time in any sinking fund or other like device for
     the  retirement of bonds of one or more series issued  hereunder;  but when
     all bonds of such one or more series  shall have  ceased to be  outstanding
     hereunder, such cash shall no longer be deemed to be or to have been funded
     cash; and

          (c) any cash  deposited  with the Trustee under Sections 20, 32 and/or
     41 hereof.

     SECTION 6. The term "excepted encumbrances" shall mean as of any particular
time any of the following:

          (a) liens for taxes,  assessments  or  governmental  charges  not then
     delinquent;

          (b) any liens or other encumbrances  existing upon easements or rights
     of way used for transmission line,  distribution line or other right of way
     purposes or upon the lands over which said  easements  or rights of way are
     held securing  indebtedness which has neither been assumed or guaranteed by
     the Company nor on which the Company customarily pays interest charges;

          (c)  rights  reserved  to or  vested  in any  municipality  or  public
     authority by the terms of any franchise,  grant, license, permit, or by any
     provision of law to terminate such franchise,  grant,  license or permit or
     to purchase or recapture or to designate a purchaser of any of the property
     of the Company;

          (d) rights reserved to or vested in others to take or receive any part
     of the power developed or generated by any property of the Company;

<PAGE>

          (e) easements or  reservations  in any property of the Company created
     at or before the  acquisition  thereof by the  Company  for the  purpose of
     roads, pipe lines,  transmission lines and other like purposes and which do
     not impair the use of such property in the operation of the business of the
     Company;

          (f)  rights  reserved  to or  vested  in any  municipality  or  public
     authority  to use or control or regulate  any property of the Company or to
     erect structures thereon; or

          (g) any obligations or duties affecting the property of the Company to
     any municipality or public authority with respect to any franchise,  grant,
     license or permit.

     The term  "prior  lien" shall mean  mortgage  or other lien (not  including
excepted  encumbrances  as  defined in this  Section)  prior to the lien of this
Indenture,  existing at any particular time upon any property additions (so long
as  such  property  additions  remain  subject  to the  lien  hereof),  then  or
theretofore made the basis under any of the provisions of this Indenture for the
authentication and delivery of bonds or the withdrawal of cash or the release of
property or the basis of a credit under the  provisions  of  subdivision  (c) of
Section 41 hereof.

     The term "prior lien bonds"  shall mean  bonds,  obligations  or  principal
indebtedness secured by prior liens.

     The term  "outstanding"  with  respect to prior lien bonds shall mean as of
any particular time all prior lien bonds theretofore authenticated and delivered
by the trustee or other holder of the prior lien  securing  the same and/or,  if
there be no such trustee or other holder,  all prior lien bonds theretofore made
and  delivered  by the maker (or his  successor)  of such prior lien and secured
thereby and all other prior lien bonds otherwise secured,  except (a) prior lien
bonds theretofore paid,  retired,  redeemed,  discharged or canceled,  (b) prior
lien bonds  held in pledge  hereunder,  (c) prior  lien bonds for the  purchase,
payment or redemption  of which moneys in the  necessary  amount shall have been
deposited  with or be held,  with  irrevocable  direction  so to  apply,  by the
Trustee  hereunder or by the trustee or other holder of such prior lien, and (d)
prior lien bonds upon  transfer  of which or in  exchange  or  substitution  for
and/or in lieu of which  other  prior  lien bonds  have been  authenticated  and
delivered or made and  delivered  under any of the  provisions of the prior lien
securing such prior lien bonds.

     SECTION 7. The term "net  earnings  certificate"  shall mean a  certificate
signed and verified by the President or a Vice-President and the Treasurer or an
Assistant  Treasurer of the  Company,  (which  Treasurer or Assistant  Treasurer
shall be an accountant) stating (A) the net earnings of the Company for a period
of any twelve (12) consecutive  calendar months within the fifteen (15) calendar
months immediately preceding the first day of the month in which the application
for the  authentication  and delivery under this Indenture of bonds then applied
for is  made,  showing  how the  same  have  been  calculated,  and to that  end
specifying  the total  operating  revenues of the  Company,  with the  principal
divisions  thereof,  and  the  net  non-operating  income  of the  Company,  and
deducting from the total thereof the total of the operating expenses  (including
(a) taxes--other  than income taxes,  profits taxes and other taxes measured by,
or  dependent  on, net income  after  deduction  of  interest,  (b)  rentals and
insurance,  and (c)  expenses  for  current  repairs  and  maintenance,  but not
including any expenses or provisions for renewals,  replacements or depreciation
or interest on any of the  indebtedness  of the Company or the  amortization  of
debt  discount  and expense or for any sinking fund or other like device for the
retirement of indebtedness), and further deducting from such balance of earnings
the amount by which the  aggregate of (1) net  non-operating  income and (2) net
income  which  in the  opinion  of the  signers  is  directly  derived  from the
operation of property  not subject to the lien of this  Indenture at the date of
such certificate,  exceeds ten per centum (10%) of such balance of earnings; the
amount so arrived at being for all purposes of this  Indenture  the net earnings
of the Company for such period;  and (B) the annual interest  requirements upon,
and the principal amount of, (1) all bonds outstanding  hereunder at the date of
such  certificate,  except any which are then being made the basis,  pursuant to
the provisions of Article VII, for the authentication and delivery of bonds, (2)
those  then  applied  for in the  application  in  connection  with  which  such
certificate is made and those applied for in any other pending application,  and
(3) all other  indebtedness  (except  indebtedness for the purchase,  payment or
redemption  of which moneys in the  necessary  amount shall have been  deposited
with or be held by the  Trustee or the  trustee or other  holder of a lien prior
hereto with irrevocable direction so to apply the same) outstanding in the hands
of the public on the date of such  certificate  and secured by lien prior to the
lien of this Indenture upon property of the Company  subject to the lien of this
Indenture,  if said  indebtedness  has been  assumed  by the  Company  or if the
Company customarily pays the interest upon the principal thereof. In determining
net non-operating  income there shall not be included profits realized or losses
sustained from the sale or other  disposition  of capital  assets or profits or
losses on retirements of bonds secured hereby.

     If any of the property of the Company owned by it at the time of the making
of any net earnings  certificate  shall have been  acquired  during or after any
period for which net  earnings  are to be  computed,  the net  earnings  of such
property  (computed in the manner  specified in this Section for the computation
of the net  earnings  of the  Company)  during  such period or such part of such
period as shall have preceded the  acquisition  thereof,  to the extent that the
same have not otherwise been included,  and unless such property shall have been
acquired in exchange or  substitution  for  property  the earnings of which have
been  included,  shall be  included  in the net  earnings of the Company for all
purposes of this Indenture unless in the opinion of the Company,  evidenced by a
Treasurer's  certificate  delivered  to  the  Trustee,  it is  impracticable  to
determine  such net earnings  without  unreasonable  effort or expense;  in like
manner,  the net  earnings of any  property to be acquired  through the issue of
bonds applied for in the  application in connection with which such net earnings
certificate  is made shall be included in the net earnings of the Company unless
it is impracticable to determine such net earnings as aforesaid.

     In any application for the authentication and delivery of bonds where a net
earnings  certificate  is required,  if (1) the twelve months' period covered by
the net  earnings  certificate  is covered by the annual  reports of the Company
which the  Company has filed or is at the date of the net  earnings  certificate
required to file with the  Trustee  pursuant  to  subdivision  (1) of Section 52
hereof,  and (2) the aggregate  principal  amount of bonds then applied for plus
the aggregate  principal amount of bonds  authenticated  and delivered since the
commencement of the then current calendar year (other than those with respect to
which a net earnings  certificate is not required or with respect to which a net
earnings certificate signed by an independent public accountant appointed by the
Company and  approved by the Trustee in the  exercise of  reasonable  care,  has
previously  been  furnished)  is ten per centum  (10%) or more of the  aggregate
amount  of the  bonds at the  time out  standing  hereunder,  such net  earnings
certificate  shall  be made  and  signed  by an  independent  public  accountant
appointed  by the  Company  and  approved  by the  Trustee  in the  exercise  of
reasonable  care,  in addition to being signed and verified by such  officers of
the Company.

     Each such certificate  shall include the statements  required by Section 21
hereof.

                                   ARTICLE II.

              FORM, EXECUTION, REGISTRATION AND EXCHANGE OF BONDS.

     SECTION 8. At the option of the Company,  the bonds issued hereunder may be
issued in one or more  series,  the bonds of each series  (other than the 3 1/4%
Series due 1970,  hereinafter in Section 19 described)  maturing on such date or
dates and bearing  interest at such rate or rates as the Board of  Directors  of
the Company prior to the authentication thereof may determine.  Except as to the
3 1/4% Series due 1970, the form of each series of bonds issued hereunder and of
the  coupons  to be  attached  to the  coupon  bonds  of such  series  shall  be
established by an indenture  supplemental hereto authorized by resolution of the
Board of  Directors  of the  Company.  The bonds and  coupons of any one or more
series may be expressed in one or more foreign  languages,  if also expressed in
the English language. The English text shall govern the construction thereof and
both or all texts shall constitute but a single obligation.  The English text of
the coupon bonds, coupons,  fully registered bonds and the Trustee's certificate
shall be  respectively  substantially  of the tenor and purport  above  recited,
provided,  however, that the form of each series, as established by the Board of
Directors, shall specify the descriptive title of the bonds (which shall contain
the words "First Mortgage Bond"), the designation of the series, the date of the
coupon  bonds of that  series,  the rate or rates of interest to be borne by the
bonds of that series,  the date or dates of maturity,  the dates for the payment
of interest,  and a place for the payment of principal  and interest and for the
registration and transfer of the bonds.  Subject to the provisions of Section 19
hereof with respect to the 3 1/4% Series due 1970,  any series of bonds may also
contain such provisions as the Board of Directors may, in its discretion,  cause
to be inserted therein:

          (a) specifying any  additional  place or places,  either in the United
     States of  America  or,  subject  to the  provisions  of Section 18 hereof,
     elsewhere,  for the payment of  principal  and/or  interest  and/or for the
     registration and/or the transfer of bonds;

          (b)  expressing  any  obligation of the Company for the payment of the
     principal  of the bonds of that series or the  interest  thereon,  or both,
     without  deduction for taxes and/or for the  reimbursement of taxes in case
     of payment by the  bondholders,  which  obligation  may be limited to taxes
     imposed by any taxing authorities of a specified class and may exclude from
     its  operation or be limited to any  specified  tax or taxes or any portion
     thereof;  and/or  expressing any obligation of the Company for the creation
     of a sinking fund or other  similar  device for the  retirement of bonds of
     that series,  and/or expressing any obligation of the Company to permit the
     conversion  of bonds of that series into  capital A stock of the Company of
     any designated class or classes;

          (c)  permitting  the  bondholders  to make,  at a  specified  place or
     places, any or all of the. following  exchanges,  viz., exchanges of coupon
     bonds for fully registered  bonds;  exchanges of fully registered bonds for
     coupon  bonds;  exchanges  of  coupon  bonds  for  coupon  bonds  of  other
     denominations;  exchanges of fully  registered  bonds for fully  registered
     bonds of other  denominations;  and  exchanges  of bonds of one  series for
     bonds of another series;  and such privilege of exchange may in any case be
     made subject to such  conditions,  limitations or restrictions as the Board
     of Directors may determine and the privilege of exchange may in any case be
     conferred  upon  the  holders  of bonds  of one or more  denominations  and
     withheld  from the  holders  of bonds  of other  denominations  of the same
     series and may in any case be conferred on the holders of fully  registered
     bonds and withheld from the holders of coupon bonds or vice versa;

          (d)  reserving  to the  Company the right to redeem all or any part of
     the  bonds of that  series  before  maturity  at a time or  times  and at a
     redemption price or prices to be specified in the form of bond; and/or

          (e) in any other  respect  expressing  or  referring  to the terms and
     conditions upon which such bonds are to be issued and/or secured under this
     Indenture or any indenture supplemental hereto.

     SECTION 9. Any series of bonds may be executed, authenticated and delivered
originally  as  coupon  bonds  and/or  as  fully   registered   bonds,  of  such
denomination or  denominations as the Board of Directors of the Company may from
time to time authorize.

     SECTION 10. Every fully  registered bond of any series shall be dated as of
the date of  authentication  (except  that if any fully  registered  bond of any
series shall be authenticated upon any interest payment date for that series, it
shall  be  dated as of the day  following)  and  shall  bear  interest  from the
beginning of the current  interest  period for that series,  provided,  however,
that if any fully  registered bond shall be  authenticated  and delivered upon a
transfer  of or in  exchange  for any bond or bonds  upon which  interest  is in
default,  it shall be dated  so that no gain or loss of  interest  shall  result
therefrom.  The coupon bonds of each series of bonds issued  hereunder  shall be
dated as of such  date as may be  determined  by the Board of  Directors  of the
Company and designated in the form established for such series.

     SECTION 11. Any bond may have  imprinted  thereon or  included  therein any
legend or legends  required in order to comply with any law or with any rules or
regulations  made pursuant thereto or with the rules or regulations of any stock
exchange or to conform to usage,  and the Board of  Directors  of the Company by
resolution  may at any time amend any legend on bonds then  outstanding so as to
comply with any such law, rule or regulation, or so as to conform to usage.

     SECTION 12. In all cases in which the privilege of exchanging  bonds exists
and is exercised,  the bonds to be exchanged  shall be surrendered at such place
or places as shall be  designated  by the Board of  Directors of the Company for
the purpose,  with all unmatured  coupons  appertaining  thereto (in the case of
coupon bonds) and the Company  shall execute and the Trustee shall  authenticate
and deliver in exchange  therefor the bond or bonds which the bondholder  making
the exchange shall be entitled to receive. All bonds so surrendered for exchange
shall be in bearer form or if registered, accompanied by a written instrument or
instruments  of transfer in form  approved by the Company  duly  executed by the
registered holder or by his duly authorized  attorney.  All Bonds so surrendered
for exchange and the unmatured coupons appertaining thereto shall be canceled by
the  Trustee  and upon the request of the Company may be cremated by the Trustee
and a certificate  evidencing  the cremation  thereof  delivered to the Company.
Upon every transfer of bonds as permitted by the next  succeeding  Section,  and
upon every exchange of bonds, the Company may  make a charge therefor sufficient
to reimburse it for any tax or taxes or other governmental charge required to be
paid by the Company and in addition may charge a sum not  exceeding  two dollars
($2) for each bond issued upon any such transfer or exchange which shall be paid
by the party  requesting  such transfer or exchange as a condition  precedent to
the exercise of the privilege of making such  transfer or exchange.  The Company
shall not be required to make  transfers or exchanges of bonds of any series for
a period of ten (10) days  next  preceding  any  interest  payment  date of said
series.

     SECTION  13.  The  Company  shall  keep at such place or places as shall be
designated  for the purpose,  books for the  registration  and transfer of bonds
issued hereunder,  which, at all reasonable times,  shall be open for inspection
by the Trustee;  and upon the presentation for such purpose at any such place or
places, the Company will register or cause to be registered therein,  and permit
to  be  transferred  thereon,  under  such  reasonable  regulations  as  it  may
prescribe, any bonds issued under this Indenture and entitled to registration or
transfer  at  such  office.  Upon  the  registration  of any  coupon  bond as to
principal,  the fact of such registration  shall be noted on such bond. Upon the
transfer of any fully registered bond the Company shall issue in the name of the
transferee or transferees a new fully  registered  bond or new fully  registered
bonds of the same  series  for a like  principal  amount and the  Trustee  shall
authenticate  and deliver the same to him or them. All fully registered bonds so
surrendered  for transfer  shall be canceled by the Trustee and upon the request
of the Company may be cremated by the Trustee and a certificate  evidencing  the
cremation thereof delivered to the Company.

     SECTION  14.  All bonds  issued  hereunder  shall,  from  time to time,  be
executed on behalf of the Company by its President or one of its Vice Presidents
and its corporate seal shall be thereunto  affixed and attested by its Secretary
or one of its' Assistant Secretaries. The coupons to be attached to coupon bonds
shall bear the facsimile signature of the present or any future Treasurer of the
Company. In case any of the officers who shall have signed any bonds or attested
the seal thereon or whose  facsimile  signature  appears on any  coupons,  shall
cease to be such  officers  of the  Company  before  the bonds so signed  and/or
sealed shall have been  actually  authenticated  and delivered by the Trustee or
issue by the Company,  such bonds  nevertheless may be authenticated,  delivered
and/or issued with the same force and effect as though the person or persons who
signed  such bonds or attested  the seal  thereon or whose  facsimile  signature
appears on any  coupons  had not ceased to be such  officer or  officers  of the
Company.  Before  authenticating  any coupon  bonds the  Trustee  shall cut off,
cancel and cremate all matured  coupon  thereto  attached  (except as  otherwise
provided  in  Sections  12 and 16  hereof),  and shall  deliver to the Company a
certificate evidencing the cremation thereof.

     SECTION 15. There may be  authenticated  and delivered and issued from time
to time in lieu of any definitive bond or bonds under this Indenture one or more
temporary typewritten,  printed, lithographed or engraved bonds substantially of
the tenor of the  bonds  hereinbefore  described,  with or  without  one or more
coupons, and with or without the privilege of registration as to principal only,
or as to both principal and interest, and such temporary bond or bonds may be in
such  denomination or denominations as the officers of the Company executing the
same may determine.  Until a definitive  bond or bonds secured hereby are issued
in exchange therefor, each such temporary bond or bonds shall be entitled to the
lien  and  benefit  of this  Indenture.  Upon the  exchange  by the  Company  of
definitive  coupon bonds or  definitive  fully  registered  bonds for  temporary
bonds' (which  exchange the Company shall make on request of, and without charge
to, the holder,  when  definitive  bonds are ready for delivery)  such temporary
bond or bonds and any unmatured coupons  appertaining  thereto shall be canceled
by the  Trustee  and upon the  request of the  Company  may be  cremated  by the
Trustee and a certificate  evidencing  such cremation  delivered to the Company.
When and as  interest  is paid  upon any  unregistered  temporary  bond  without
coupons, the fact of such payment shall be noted thereon and interest due on any
temporary  bond  which is  represented  by a  coupon  shall  be paid  only  upon
presentation  and  surrender of such coupon for  cancellation.  Temporary  bonds
without  coupons of any series  shall bear  interest  from the  beginning of the
current  interest  period for bonds of such series in which such temporary bonds
without  coupons  shall be  authenticated.  The holder of one or more  temporary
bonds may  exchange  the same on the  surrender  thereof  in bearer  form or, if
registered,  accompanied  by a written  instrument or instruments of transfer in
form approved by the Company,  duly executed by the registered  holder or by his
duly  authorized  attorney,  with all unmatured  coupons,  if any,  appertaining
thereto,  to the  Trustee for  cancellation,  and shall be entitled to receive a
temporary bond or bonds' of the same series of like aggregate  principal  amount
of such other denominations as the Company may determine to issue in exchange.

     SECTION  16.  Upon  receipt by the  Company  and the  Trustee  of  evidence
satisfactory  to  them,  of the  loss,  destruction  or  mutilation  of any bond
outstanding  hereunder and the coupons  appertaining  thereto,  and of indemnity
satisfactory  to them,  and upon payment,  if the Company shall require it, of a
reasonable  charge and upon  reimbursement to the Company and the Trustee of all
reasonable expense incident thereto, and upon surrender and cancellation of such
bond, if mutilated,  and the coupons  appertaining  thereto, if any, the Company
may execute,  and the Trustee may authenticate  and deliver,  a new bond of like
tenor and of the same series with corresponding coupons in the appropriate case,
in lieu of such lost, destroyed or mutilated bond and coupons, if any.

<PAGE>

     Any duplicate  bonds and/or coupons  issued  pursuant to this Section shall
constitute  original  additional  contractual  obligations  on the  part  of the
Company, whether or not the lost, destroyed or mutilated bonds or coupons, be at
any time found by anyone, and shall be equally secured and entitled to equal and
proportionate  benefits with all other bonds and coupons issued hereunder in any
moneys  or  property  at any time held by the  Trustee  for the  benefit  of the
bondholders.

     SECTION 17. No bond shall be secured  hereby unless there shall be endorsed
thereon the certificate of the Trustee,  substantially  in the form  hereinabove
recited,  that  it is one of the  bonds  (or  temporary  bonds),  of the  series
designated  therein,  herein provided for; and such certificate on any such bond
shall be  conclusive  evidence  that such bond has been duly  authenticated  and
delivered and when issued will be secured hereby.

     SECTION 18. The Company may provide for effecting  payment of the principal
of or  interest  on  bonds  of any  series  at one or  more  places  in  foreign
countries,  provided  that such payment  shall be only the stated amount of such
principal  and/or  interest in lawful money of the United States of America,  or
the equivalent  thereof in the appropriate  local foreign currency at the buying
rate at the time of such payment at such place or places for sight drafts on New
York.

     SECTION 19.  Notwithstanding  any of the  provisions  hereinbefore  in this
Article II contained to the contrary,  which said contrary  provisions shall not
be applicable to the bonds in this Section described, there shall be a series of
bonds designated "3 1/4% Series due 1970" (herein  sometimes  referred to as the
"1970  Series"),  each of which  shall  also bear the  descriptive  title  First
Mortgage Bond, and the form thereof and of the appurtenant coupons,  which shall
be  established  by resolution  of the Board of Directors of the Company,  shall
contain  suitable  provisions  with respect to the matters  hereinafter  in this
Section specified.  Bonds of the 1970 Series shall be limited to the Thirty- two
million dollars ($32,000,000) thereof provided to be issued in Section 22 hereof
(subject to the  provisions of Section 16 hereof),  shall mature on May 1, 1970,
and shall be issued as coupon bonds in the denomination of One thousand dollars,
registerable as to principal,  and as fully registered bonds in denominations of
One  thousand  dollars  and Five  thousand  dollars  and,  at the  option of the
Company, in any multiple or multiples of Five thousand dollars;  they shall bear
interest  at the rate of three and  one-quarter  per  centum (3 1/4%) per annum,
payable semi-annually on May 1 and November 1 of each year; and the principal of
and  interest  on each said bond shall be payable in lawful  money of the United
States  of  America  at the  office or  agency  of the  Company,  in the City of
Chicago, Illinois. American National Bank and Trust Company of Chicago is hereby
designated and appointed the office and agency of the Company for the payment of
the  principal of and interest on the bonds of the 1970  Series;  all  reference
herein to the office or agency of the Company  for the payment of the  principal
of or  interest on the bonds of the 1970  Series  being a reference  to American
National Bank and Trust Company of Chicago.  In the event of the  resignation or
inability to act of American National Bank and Trust Company of Chicago,  then a
successor paying agent or agents in the City of Chicago,  Illinois, with respect
to the  principal  of and  interest  on the bonds of the 1970  Series,  shall be
appointed by the Board of Directors of the Company.

<PAGE>

     Coupon bonds of the 1970 Series shall be dated as of May 1, 1940, and fully
registered  bonds of the 1970  Series  shall be dated as in  Section  10  hereof
provided.

     Bonds of the 1970 Series shall be  redeemable  at the option of the Company
in whole or in part at any time,  prior to  maturity,  upon at least thirty (30)
days'  published  notice (such  publication  to be made at least once in each of
four (4)  successive  calendar  weeks upon any secular day of each such calendar
week  which  need  not be the same day in each  week)  at the  principal  amount
thereof  and  accrued  interest to such date of  redemption,  together  with the
following premiums of the principal amount of the Bonds of the 1970 Series to be
redeemed: 7 1/2% to and including April 30, 1941; 7% thereafter to and including
April  30,  1942;  6 1/2 %  thereafter  to and  including  April  30,  1943;  6%
thereafter to and including  April 30, 1944; 5 1/2%  thereafter to and including
April  30,  1945;  5%  thereafter  to and  including  April  30,  1946;  4 1/2 %
thereafter to and including April 30, 1947; 4% thereafter to and including April
30,  1948;  and  thereafter  with the same  premiums as would be payable if such
redemption  were being made pursuant to the provisions of paragraph B of Section
69 hereof;

or, in case of redemption  pursuant to the  provisions of paragraph B of Section
69 hereof,  at the principal amount thereof and accrued interest to such date of
redemption,  together with the following premiums of the principal amount of the
Bonds of the 1970 Series to be redeemed:  4.50% to and including April 30, 1941;
4.41%  thereafter  to and  including  April 30, 1942;  4.31%  thereafter  to and
including  April 30, 1943;  4.21%  thereafter to and  including  April 30, 1944;
4.11% thereafter to and including April 30, 1945; 4% thereafter to and including
April  30,  1946;  3.90%  thereafter  to and  including  April 30,  1947;  3.78%
thereafter to and including  April 30, 1948;  3.67%  thereafter to and including
April  30,  1949;  3.55%  thereafter  to and  including  April 30,  1950;  3.43%
thereafter to and including  April 30, 1951;  3.30%  thereafter to and including
April  30,  1952;  3.17%  thereafter  to and  including  April 30,  1953;  3.03%
thereafter to and including  April 30, 1954;  2.89%  thereafter to and including
April  30,  1955;  2.75%  thereafter  to and  including  April 30,  1956;  2.60%
thereafter to and including  April 30, 1957;  2.45%  thereafter to and including
April  30,  1958;  2.30%  thereafter  to and  including  April 30,  1959;  2.13%
thereafter to and including  April 30, 1960;  1.97%  thereafter to and including
April  30,  1961;  1.80%  thereafter  to and  including  April 30,  1962;  1.62%
thereafter to and including  April 30, 1963;  1.44%  thereafter to and including
April  30,  1964;  1.25%  thereafter  to and  including  April 30,  1965;  1.06%
thereafter to and including  April 30, 1966;  0.86%  thereafter to and including
April  30,  1967;  0.66%  thereafter  to and  including  April 30,  1968;  0.45%
thereafter to and including  April 30, 1969;  0.23%  thereafter to and including
April 30, 1970;

or, in case of redemption by the  application of cash deposited with the Trustee
pursuant  to Section 20 hereof,  at the  principal  amount  thereof  and accrued
interest to such date of redemption, together with the same premiums as would be
applicable  if such  redemption  were being made  pursuant to the  provisions of
paragraph B of Section 69 hereof.

     At the option of the  holder,  any coupon  bonds of the 1970  Series,  upon
surrender thereof with all unmatured coupons  appertaining thereto at the office
or agency of the Company in the City of Chicago, Illinois, shall be exchangeable
for a like  aggregate  principal  amount of fully  registered  bonds of the same
series of authorized denominations.

<PAGE>

At the option of the registered  holder,  any fully registered bonds of the 1970
Series,  upon surrender thereof at said office or agency of the Company together
with a written  instrument  of  transfer in form  approved  by the Company  duly
executed by the registered holder or by his duly authorized  attorney,  shall be
exchangeable  for a like aggregate  principal amount of coupon bonds of the same
series,  with all unmatured coupons attached,  or for a like aggregate principal
amount  of  fully  registered  bonds  of the same  series  of  other  authorized
denominations.

     The holder of any  coupon  bond of the 1970  Series may have the  ownership
thereof  registered as to principal on the books of the Company at the office or
agency of the Company in the City of Chicago,  Illinois,  and such  registration
noted on such bond.  After such  registration  no transfer of such bond shall be
valid unless made at said office or agency by the registered holder in person or
by his duly  authorized  attorney and similarly noted on such bond; but the same
may be  discharged  from  registration  by being in like manner  transferred  to
bearer and thereupon  transferability  by delivery  shall be restored;  but such
bond may  again  from time to time be  registered  or  transferred  to bearer in
accordance  with the above  procedure.  Such  registration,  however,  shall not
affect the  negotiability  of the coupons  appertaining to such bonds, but every
such coupon  shall  continue  to be  transferable  by delivery  merely and shall
remain payable to bearer.  Fully  registered bonds of the 1970 Series shall also
be  transferable  on the books of the  Company  at said  office or agency of the
Company by the registered  holder  thereof,  in person or by his duly authorized
attorney, upon surrender for cancellation thereof.

     SECTION 20. The Company  covenants that, so long as any of the bonds of the
1970 Series issued under this Indenture shall remain outstanding, it will, on or
before  the first day of  December  of each year  beginning  with the year 1949,
deliver to the Trustee for the benefit of the holders or the  registered  owners
of bonds of the 1970 Series:

     An  amount in cash  and/or  principal  amount  of bonds of the 1970  Series
equivalent to one per centum (1%) of the greatest  principal  amount of bonds of
the 1970 Series theretofore at any one time outstanding.

     Such  cash  together  with any bonds  delivered  to the  Trustee  under the
provisions of this Section shall be dealt with a's provided for by this Section.

     All  cash  deposited  by the  Company  with  the  Trustee  pursuant  to the
provisions of this Section shall be applied by the Trustee from time to time and
as rapidly as may be  practicable  to the  purchase  of bonds of the 1970 Series
then  outstanding,  at public or private sale at the lowest prices at which such
bonds can be obtained, not exceeding, however, the then redemption price, or, if
the Company  shall so request,  the Trustee shall apply any cash then held by it
under this Section to the  redemption of bonds of the 1970 Series as soon as may
be  practicable  after such request.  In case the balance of such cash remaining
with the Trustee on the  twentieth day of March of any year  beginning  with the
year 1950 shall  aggregate  $25,000 or more, the Trustee shall apply the same to
the redemption of bonds of the 1970 Series on the next  succeeding  first day of
May,  such  redemption to be in the manner  provided in Article XII hereof.  The
Company  shall have the right to tender  bonds of the 1970 Series for sale by it
to the Trustee under the provisions of this Section.

     The Company shall pay to the Trustee,  on demand, the amount of accrued and
unpaid interest, and premiums paid, if any, upon all bonds purchased or redeemed
pursuant to this Section.

     Any bonds  deposited,  purchased or redeemed  pursuant to the provisions of
this Section,  shall forthwith be canceled by the Trustee,  and upon the request
of the  Company,  the  Trustee may cremate the same and deliver to the Company a
certificate of such cremation.

                                  ARTICLE III.

               GENERAL PROVISIONS AS TO CERTIFICATES AND OPINIONS.

     SECTION 21. Each  certificate or opinion with respect to compliance  with a
condition  or  covenant  provided  for in this  Indenture  shall  include  (a) a
statement  that the person  making  such  certificate  or opinion  has read such
covenant or condition,  (b) a brief  statement as to the nature and scope of the
examination or investigation  upon which the statements or opinions contained in
such  certificate or opinion are based,  (c) a statement that, in the opinion of
such person,  he has made such  examination or  investigation as is necessary to
enable him to express an informed  opinion as to whether or not such covenant or
condition  has been complied  with,  and (d) a statement as to whether or not in
the opinion of such person such condition or covenant has been complied with.

     In  addition to such other  certificates  or opinions as may be required by
other provisions of this Indenture or any indenture  supplemental  hereto, every
request  or  application  by the  Company  for  action by the  Trustee  shall be
accompanied  by an opinion of counsel and a  certificate  of the  President or a
Vice-President or the Treasurer or an Assistant Treasurer of the Company, or any
two of them, each such opinion of counsel and  certificate  stating that, in the
signers' opinion, the  conditions precedent, if any, to such action provided for
in this Indenture (including any covenants,  compliance with which constitutes a
condition  precedent)  will,  on the  delivery to the Trustee of such opinion of
counsel, resolutions, certificates and other documents, if any, annexed thereto,
have been complied with.

     Any  certificate  or opinion of an officer or officers of the Company or of
an  engineer  may be based,  in so far as it  relates to legal  matters,  upon a
certificate or opinion of, or representations by, counsel,  and, in so far as it
relates to  compliance  by the Company  with the net  earnings  requirements  of
Sections  7  and  29  or  with  the  provisions  of  Sections  41  and  47 or to
computations  of costs,  upon the books and  records  of the  Company  or upon a
certificate or opinion of, or  representations  by, an accountant or accountants
or the Treasurer or an Assistant  Treasurer or the  Comptroller  or an Assistant
Comptroller  of the Company,  unless such officer or officers or engineer  knows
that the books and  records  of the  Company  or the  certificate  or opinion or
representations  with  respect  to the  matters  upon which his  certificate  or
opinion  may be  based  as  aforesaid  are  erroneous  or,  in the  exercise  of
reasonable  care,  should  have  known  that the same were  erroneous.  Any such
certificate  or  opinion  of  counsel  may be based,  in so far as it relates to
factual  matters,  information with respect to which is in the possession of the
Company,  upon a certificate or opinion of, or representations by, an officer or
officers  of the  Company,  and,  in so far as it relates to  compliance  by the
Company  with said net  earnings  requirements  or with the  provisions  of said
Sections 41 and 47 or to  computations  of costs,  upon a certificate or opinion
of, or  representations  by, an accountant or accountants or the Treasurer or an
Assistant  Treasurer  or the  Comptroller  or an  Assistant  Comptroller  of the
Company,   unless  such  counsel  knows  that  the  certificate  or  opinion  or
representations  with  respect  to the  matters  upon which his  certificate  or
opinion  may be  based  as  aforesaid  are  erroneous  or,  in the  exercise  of
reasonable care, should have known that the same were erroneous.

                                   ARTICLE IV.

                             INITIAL ISSUE OF BONDS.

     SECTION 22. Bonds of the 1970 Series for the aggregate  principal amount of
Thirty-two  million  Dollars  ($32,000,000)  shall  forthwith be executed by the
Company and delivered to the Trustee and shall be  authenticated  by the Trustee
and delivered (whether before or after the filing or recording hereof) from time
to time, in accordance  with the order or orders of the Company,  evidenced by a
writing or writings  signed by the Company by its  President or one of its Vice-
Presidents and its Treasurer or one of its Assistant Treasurers.

     SECTION 23. Additional bonds of any one or more series, other than the 1970
Series, for an aggregate principal amount of not exceeding Five hundred thousand
Dollars  ($500,000)  may be  executed  from  time  to time  by the  Company  and
delivered to the Trustee and shall be authenticated by the Trustee and delivered
(whether before or after the filing or recording  hereof) from time to time upon
receipt by the Trustee of a resolution  such as is described in subdivision  (1)
of Section 30 hereof,  accompanied  by a Treasurer's  certificate,  net earnings
certificate, opinion of counsel and supplemental indenture such as are described
in  subdivisions  (2),  (3),  (4) and (6),  respectively,  of Section 32 hereof,
together with the officially  authenticated  certificates or other documents, if
any,  specified in such opinion of counsel;  such Treasurer's  certificate shall
also state that the right to the  authentication  and delivery of the bonds then
applied for under this Section has not previously been waived as the basis under
any of the provisions of this Indenture for the  authentication  and delivery of
bonds or the  withdrawal  of cash or the  release of  property or the basis of a
credit under the provisions of subdivision (e) of Section 41 hereof.

                                   ARTICLE V.

                    GENERAL PROVISIONS AS TO ISSUE OF BONDS.

     SECTION 24. The aggregate principal amount of bonds which may be secured by
this Indenture shall be such aggregate  principal amount as may now or hereafter
from time to time be authenticated and delivered under the provisions hereof.

     Nothing in this Indenture  contained  shall limit the power of the Board of
Directors of the Company to fix the price at which the bonds  authenticated  and
delivered  under  any  of the  provisions  of  this  Indenture  may  be  issued,
exchanged,  sold or disposed  of, but in so far as permitted by law (and subject
to the valid regulation of any public authority) any or all of said bonds may be
issued,   exchanged,   sold  or  disposed  of  upon  such  terms  and  for  such
considerations as the Board of Directors of the Company may deem fit.

                                   ARTICLE VI.

             ISSUANCE OF BONDS UPON THE BASIS OF PROPERTY ADDITIONS.

     SECTION 25.  Bonds in addition to those  provided  for in Article IV hereof
and of any one or more series, other than the 1970 Series, may from time to time
be  executed  by  the  Company  and  delivered  to the  Trustee,  and  shall  be
authenticated  by the Trustee and delivered from time to time in accordance with
the order or orders of the Company, evidenced by a writing or writings signed by
the Company by its President or one of its  Vice-Presidents and its Treasurer or
one of its  Assistant Treasurers, upon the basis of property additions, but only
in accordance with and subject to the conditions, provisions and limitations set
forth in the next succeeding  five Sections of this Indenture,  numbered from 26
to 30, both inclusive.

     SECTION 26. No bonds shall be authenticated and delivered at any time under
the provisions of this Article VI upon the basis of funded property.

     SECTION 27.  Bonds of any one or more  series,  other than the 1970 Series,
shall be  authenticated  and delivered  under the  provisions of this Article VI
upon the basis of  property  additions  for a  principal  amount  not  exceeding
seventy per centum (70%) of the balance of the cost or of the fair value thereof
to the Company (whichever is less) after making any deductions and any additions
required by subdivision (II) of Section 4 hereof.  The cost of any such property
additions (except as otherwise  provided in the next succeeding  sentence) shall
be deemed to be the sum of (1) any cash forming a part of such cost,  which, for
all purposes of this Indenture, shall include amounts payable in cash, liability
for which has actually been incurred by the Company, (2) an amount equivalent to
the fair market  value in cash (as of the date of  delivery)  of any  securities
delivered  in  payment  therefor  or for  the  acquisition  thereof  and (3) the
principal  amount of any outstanding  prior lien bonds secured by lien upon such
property  additions  at the  time of their  acquisition  unless  the  engineer's
certificate  hereinafter  in subdivision  (3) of Section 30 hereof  provided for
shall state that the principal  amount of such prior lien bonds has  theretofore
been included in cost when other  property  additions  subject to the same prior
liens  shall  have  been  made the basis  under  any of the  provisions  of this
Indenture for the authentication and delivery of bonds or the withdrawal of cash
or the release of property or a credit under the provisions of  subdivision  (c)
of Section 41 hereof.  The cost of any such property additions received or to be
received by the Company,  in whole or in part, as  consideration in exchange for
property  released or to be released shall be determined in the manner  provided
in  paragraph  A of Section 66  hereof.  The amount of the cost of any  property
additions  and the then fair value  thereof to the  Company  and the fair market
value in cash of any securities so delivered in payment  therefor and the amount
of any deductions and any additions  required to be made by subdivision  (II) of
Section 4 hereof shall be determined  for the purposes of this Article VI by the
appropriate certificates provided for in Section 30 hereof.

<PAGE>

     SECTION  28.  No bonds  shall be  authenticated  and  delivered  under  the
provisions  of this  Article VI nor funded cash  withdrawn  nor funded  property
released  under any of the provisions of this Indenture nor a credit taken under
the  provisions of subdivision  (c) of Section 41 hereof,  upon the basis of any
property additions subject to any prior lien unless, previous to or concurrently
with the making of the application for the authentication and delivery of bonds,
the withdrawal of funded cash, the release of funded property, or a credit under
the provisions of subdivision  (c) of Section 41 hereof,  cash and/or prior lien
bonds have been or are  deposited  with the trustee or other holder of the prior
lien securing such prior lien bonds and/or with the Trustee, in such manner that
immediately  after such deposit and the granting of such  application  all prior
lien bonds  secured by such prior  lien  outstanding  immediately  prior to such
deposit and the granting of such application will cease to be outstanding  under
the provisions of Section 6 hereof. Prior lien bonds so delivered to the trustee
or other  holder of the prior lien  securing the same shall be  surrendered  for
cancellation,  and prior lien bonds so deposited  with the Trustee shall be held
under the provisions of Article XI hereof.

     SECTION 29. No bonds shall be authenticated and delivered upon the basis of
property  additions  unless,  as shown by a net  earnings  certificate,  the net
earnings  of the Company for the period  referred to in such  certificate  shall
have been in the  aggregate at least  equivalent  to two and one-half  times the
annual interest requirements as shown by such net earnings certificate.

     SECTION  30.  No  application  by  the  Company  to  the  Trustee  for  the
authentication  and  delivery  of bonds  hereunder  upon the  basis of  property
additions  shall be  granted  by the  Trustee,  until  the  Trustee  shall  have
received:

          (1) a resolution  requesting the Trustee to  authenticate  and deliver
     bonds,  (a) specifying the principal amount of bonds called for, the series
     thereof  (other than the 1970  Series) and any other  matters  with respect
     thereto  required  by this  Indenture,  and (b)  specifying  the officer or
     officers of the Company to whom,  or upon whose written  order,  such bonds
     shall be delivered;

          (2) a  Treasurer's  certificate  made and dated as of the date of such
     application stating that the Company is not to the knowledge of the signers
     in default under any of the provisions of this Indenture;

          (3) an engineer's certificate made and dated not more than ninety (90)
     days  prior  to the  date  of such  application,  describing  the  property
     additions made the basis of the application in reasonable  detail;  stating
     that they are property additions as defined in Section 4 hereof,  that such
     property  additions  are  desirable  for use in the  proper  conduct of the
     Company's business, and that such property additions,  to the extent of the
     cost or fair value  thereof  to the  Company  (whichever  is less) made the
     basis of the  application,  do not  consist  of funded  property;  stating,
     except  as to  property  additions  acquired,  made or  constructed  wholly
     through the delivery of securities,  that the amount of cash forming all or
     part of the cost  thereof  was equal to or more than an amount to be stated
     therein;   briefly  describing  with  respect  to  any  property  additions
     acquired,  made or  constructed in whole or in part through the delivery of
     securities,  the  securities  so  delivered  and  stating  the date of such
     delivery;  stating,  as to property additions received or to be received by
     the Company, in whole or in part, as consideration in exchange for property
     released  or to be  released,  the  cost  as  determined  pursuant  to  the
     provisions  of  paragraph A of Section 66;  stating,  except as to property
     additions  in respect to the fair value to the Company of which a statement
     is to be made in an independent  engineer's  certificate as provided for in
     subdivision (4) of this Section, that the fair value to the Company of such
     property  additions at the date of such engineer's  certificate is equal to
     or more than an amount therein to be stated;  stating the amounts  required
     to be  deducted  and added  under the  provisions  of  subdivision  (II) of
     Section 4 hereof;  specifying the nature and extent of any prior liens (and
     the principal  amount of all outstanding  prior lien bonds secured thereby)
     existing  upon any of such  property  additions  and  whether  or not other
     property  additions  subject to the same prior liens have  theretofore been
     made the  basis  under  any of the  provisions  of this  Indenture  for the
     authentication  and  delivery  of  bonds or the  withdrawal  of cash or the
     release  of  property  or the  basis of a credit  under the  provisions  of
     subdivision  (c) of Section 41 hereof,  specifying the principal  amount of
     such prior lien bonds and/or cash deposited or to be deposited concurrently
     with the  Trustee  or with the  trustee  or other  holder of any prior lien
     securing  such prior lien bonds in compliance  with Section 28 hereof;  and
     also stating (a) what part,  if any, of such  property  additions  includes
     property which has been used or operated in the public utility  business by
     others  than  the  Company  within  six  months  prior  to the  date of the
     acquisition  thereof by the Company and (b) the fair value of the  property
     referred to in the foregoing  clause (a) if, and only if, in the opinion of
     the signers  such fair value is less than the greater of the two  following
     amounts:  (i) Twenty-five  thousand Dollars ($25,000);  (ii) one per centum
     (1%) of the  aggregate  principal  amount of bonds at the time  outstanding
     hereunder. If any such property additions have been used or operated in the
     public  utility  business  by others than the  Company,  the amount of cash
     stated to be all or any part of the cost  thereof may include the amount of
     cash  forming  all or any part of the  cost of any  rights  and  intangible
     property  simultaneously  acquired  with the same for which no  separate or
     distinct  consideration  shall have been paid or  apportioned,  and in such
     case the term property  additions as defined herein may include such rights
     and intangible  property;  provided,  however,  in the determination of the
     fair value of any such  property  additions,  consideration  shall be given
     only to the value to the Company of such  property  additions  exclusive of
     the value of any such rights and intangible property;

          (4) in  case  any  property  additions  are  shown  by the  engineer's
     certificate provided for in subdivision (3) above to include property which
     has been used or operated in the public utility business by others than the
     Company within six months prior to the date of the  acquisition  thereof by
     the Company and such engineer's certificate does not show the fair value of
     such  property  to the  Company  to be less  than  the  greater  of the two
     following amounts: (i) Twenty-five thousand Dollars ($25,000); (ii) one per
     centum  (1%) of the  aggregate  principal  amount  of the bonds at the time
     outstanding  hereunder,  a further and independent  engineer's  certificate
     stating as to such property  additions  which have been so used or operated
     and (at the  option  of the  Company)  as to any other  property  additions
     included in the engineer's  certificate  provided for in subdivision (3) of
     this Section,  that the aggregate  fair value thereof to the Company at the
     date of the engineer's  certificate  provided for in subdivision (3) above,
     in the opinion of the signer,  is an amount to be stated therein,  together
     with the signer's  report thereon which shall contain a brief  statement of
     the conditions governing the signer's  determination of such fair value and
     a brief  statement of the  condition,  serviceability  and location of such
     property additions; in case the independent engineer's certificate provided
     for  by  this   subdivision   (4)  is  delivered  in  connection  with  the
     authentication and delivery of bonds hereunder, such independent engineer's
     certificate shall also state the fair value (which may be the fair value as
     of the date that the property was  previously  certified to the Trustee) to
     the  Company of any  property  which (a) has been used or  operated  in the
     public utility  business by others than the Company within six months prior
     to the date of the  acquisition  thereof by the  Company,  and (b) has been
     subjected to the lien of this Indenture since the  commencement of the then
     current calendar year as the basis for the  authentication  and delivery of
     bonds,  the  withdrawal of cash or the release of property  pursuant to the
     provisions of this  Indenture and (c) as to which a certificate  or opinion
     of an  independent  engineer  has  not  previously  been  furnished  to the
     Trustee.

          (5) in  case  any  property  additions  are  shown  by the  engineer's
     certificate  provided for in  subdivision  (3) above to have been acquired,
     made or constructed in whole or in part through the delivery of securities,
     a written  appraisal  of an appraiser or other  competent  person,  firm or
     corporation  to he selected  by the  Trustee  and  approved by the Board of
     Directors  of the  Company,  stating in the  opinion of the signer the fair
     market value in cash of such securities at the time of delivery  thereof in
     payment for or for the acquisition of such property additions.  If any such
     property  additions are shown by such  engineer's  certificate  to  include
     property which has been used or operated in the public utility  business by
     others than the Company,  the appraised  value of the securities  stated to
     have been delivered in payment therefor or for the acquisition  thereof may
     include the value of any portion of the securities delivered for any rights
     and intangible property simultaneously acquired with the same, for which no
     separate or distinct consideration shall have been paid or apportioned, and
     in such case the term property additions as defined herein may include such
     rights and intangible property;

          (6) a net earnings certificate showing the net earnings of the Company
     to be as required by Section 29 hereof;

          (7) An opinion of counsel  stating the signer's  opinion to the effect
     (a)  that  the  Company  has,  or  upon  delivery  of  the  instruments  of
     conveyance, transfer or assignment, if any, specified in such opinion, will
     have  good  title  to  the  property  additions  made  the  basis  of  such
     application, free and clear of any lien or encumbrance prior to the lien of
     this  Indenture,  except prior liens  securing  prior lien bonds which have
     ceased to be  outstanding  under the  provisions  of  Section 6 hereof  and
     excepted  encumbrances;  and/or  (b) if  such  property  additions  include
     easements  or rights of way over  private  property  used for  transmission
     line,  distribution  line or other right of way purposes,  that the Company
     has good title to such  rights of way or  easements,  free and clear of any
     lien or encumbrance prior to the lien of this Indenture, except prior liens
     securing  prior lien bonds  which have ceased to be  outstanding  under the
     provisions  of Section 6 hereof  and  excepted  encumbrances,  and that the
     Company has power under eminent  domain or similar  statutes to protect its
     uninterrupted  enjoyment  of such  easements  or rights of way  against any
     claim held or asserted  under any lien or other  encumbrance  upon the real
     estate with  respect to which such  easements  or rights of way are held by
     the Company;  and/or (c) if such  property  additions  include any property
     additions  located,  under  the  terms  of a law or a permit  or  franchise
     granted by a governmental body, on property not owned by the Company,  that
     such  law,  permit or  franchise  is  adequate  for the  operation  of such
     property  additions  by the  Company  for the  period,  if  any,  specified
     therein,  and that the terms of such law or of such permit or  franchise or
     the law under  which such  permit or  franchise  is held do not contain any
     provisions  giving  to any  party  authority  or  right to take  over  such
     property additions without the payment of fair consideration  therefor; and
     (d) that this  Indenture  is, or upon the  delivery of the  instruments  of
     conveyance, transfer or assignment, if any, specified in such opinion, will
     be a lien upon all the right,  title and  interest of the Company in and to
     all property  additions made the basis of such application,  free and clear
     of any lien or  encumbrance  prior to the  lien of this  Indenture,  except
     prior liens  securing  prior lien bonds which have ceased to be outstanding
     under the  provisions  of Section 6 hereof and excepted  encumbrances;  (e)
     that  since the date of this  Indenture  no lien  prior to the lien of this
     Indenture has attached to and remains unsatisfied upon any of the mortgaged
     and pledged property except excepted encumbrances and except liens existing
     upon any of the  mortgaged  and  pledged  property  at the  date it  became
     mortgaged and pledged property;  (f) that in the signer's opinion the issue
     of the bonds,  the  authentication  and delivery of which are being applied
     for has been duly authorized by the Company and by any and all governmental
     authorities  the consent of which is  requisite  to the legal issue of such
     bonds,  specifying  any  officially  authenticated  certificates  or  other
     documents, by which such consent is or may be evidenced, or that no consent
     of any governmental  authorities is requisite; (g) that the general nature,
     extent  and amount of prior  liens,  and the  principal  amount of the then
     outstanding  prior lien bonds  secured  thereby,  if any,  mentioned in the
     accompanying  engineer's  certificate,  are correctly stated;  (h) that the
     Company  has  corporate   authority  and  all  necessary   permission  from
     governmental  authorities  to own and operate  the  property  additions  in
     respect of which such  application is made;  and (i) that the  supplemental
     indenture  specified in subdivision  (10) below is in proper form to comply
     with the requirements of said subdivision (10);

          (8) the  instruments of conveyance,  assignment and transfer,  if any,
     and the officially  authenticated  certificates or other documents, if any,
     specified in the opinion of counsel provided for in subdivision (7) above;

          (9) the prior lien bonds and/or the cash, if any, to he deposited with
     the Trustee in  accordance  with the  provisions  of Section 28 hereof,  as
     specified in the engineer's  certificate  provided for in  subdivision  (3)
     above; and

<PAGE>

          (10) an indenture supplemental hereto, with evidence that counterparts
     thereof  have been filed and  spread of record in each  county in which the
     mortgaged and pledged property, or any part thereof, is situated (including
     property  additions  shown by the  engineer's  certificate  provided for in
     subdivision  (3)  above),  which  supplemental  indenture  shall  contain a
     statement of the principal amount, the date, the maturity and a description
     of the series of the bonds (other than the 1970 Series) to be authenticated
     and delivered hereunder upon said application.

                                  ARTICLE VII.

              ISSUANCE OF BONDS UPON RETIREMENT OF BONDS PREVIOUSLY
                             OUTSTANDING HEREUNDER.

     SECTION  31. The  Trustee  shall from time to time upon the  request of the
Company  authenticate  and deliver bonds hereunder (other than bonds of the 1970
Series)  of a  principal  amount  equal to the  principal  amount  of any  bonds
theretofore  authenticated  and delivered  under this  Indenture that shall have
been paid,  retired,  redeemed  or canceled  or  surrendered  to the Trustee for
cancellation  or for the purchase,  payment or redemption of which moneys in the
necessary  amount  shall have been  deposited  with or shall then be held by the
Trustee,  with  irrevocable  direction so to apply the same,  but only after the
Trustee shall have received:

          (1) a resolution such as is described in subdivision (1) of Section 30
     hereof;

          (2) a Treasurer's  certificate  stating (a) that the Company is not to
     the knowledge of the signers in default under any of the provisions of this
     Indenture; and (b) that bonds theretofore authenticated and delivered under
     this  Indenture of a specified  principal  amount and series (not less than
     the principal amount of bonds for which such request for authentication and
     delivery is made under this Section) have been paid,  retired,  redeemed or
     canceled or concurrently with the  authentication and delivery of the bonds
     requested will be surrendered  to the Trustee for  cancellation  (otherwise
     than upon  exchanges  or  transfers  of bonds)  and/or  that  moneys in the
     necessary  amount  for the  purchase,  retirement,  payment  or  redemption
     thereof are then held by or will be deposited (with  irrevocable  direction
     so to apply the same) with the Trustee  prior to or  concurrently  with the
     authentication and delivery of the bonds so requested,  and further stating
     that no part of such principal  amount of bonds has been  theretofore  made
     the basis under any provision of this Indenture for the  authentication and
     delivery  of bonds  or the  basis of the  right to the  authentication  and
     delivery  of bonds  which  right  has been  waived or the basis of a credit
     under  subdivision  (d) of Section 41 or deposited  under the provisions of
     Section 20 hereof  and that none of such  bonds has been  paid,  purchased,
     redeemed  or  otherwise  retired  by the use of funded  cash,  and  further
     stating the aggregate principal amount of all such bonds cancelled or so to
     be surrendered for  cancellation  that have not theretofore  been issued by
     the Company and the interest rate borne by each thereof not so issued;

<PAGE>

          (3) an opinion of counsel  stating the signer's  opinion to the effect
     (a) that since the date of this Indenture no lien prior to the lien of this
     Indenture has attached to and remains unsatisfied upon any of the mortgaged
     and pledged property except excepted encumbrances and except liens existing
     upon any of the  mortgaged  and  pledged  property  at the  date it  became
     mortgaged  and  pledged  property;  (b) that the  issue of the  bonds,  the
     authentication  and  delivery  of which  are  requested  in the  resolution
     provided  for  under  subdivision  (1)  of  this  Section,  has  been  duly
     authorized by the Company and by any and all governmental authorities,  the
     consent of which is requisite to the legal issue of such bonds,  specifying
     any officially authenticated  certificates or other documents by which such
     consent is or may be  evidenced,  or that no  consent  of any  governmental
     authorities is requisite; and (c) that the supplemental indenture specified
     in subdivision (5) below is in proper form to comply with the  requirements
     of subdivision (10) of Section 30 hereof;

          (4) the officially authenticated certificates,  or other documents, if
     any, specified in the opinion of counsel provided for in subdivision (3) of
     this Section; and

          (5) an  indenture  supplemental  hereto,  together  with  evidence  of
     recordation, such as is described in subdivision (10) of Section 30 hereof.

     In case a net earnings certificate, subsequent to such payment, retirement,
redemption,  cancellation  or surrender for  cancellation  of such bonds or such
deposit of money,  shall have been  delivered  to the  Trustee  pursuant to  any
provision of this Indenture,  in which the annual interest  requirements on such
bonds shall not have been  included,  or in case the interest  rate borne by any
bonds  theretofore  authenticated  by the  Trustee but not issued by the Company
(which are being so canceled or surrendered  for  cancellation)  shall have been
shown by the Treasurer's  certificate  provided for in  subdivision  (2) of this
Section  to be  less  than  the  interest  rate to be  borne  by the  bonds  the
authentication  and delivery of which are applied  for,  the Trustee  shall also
receive a net earnings  certificate,  showing the net earnings of the Company to
be as required by Section 29 hereof.  Bonds issued merely by way of pledge shall
not be deemed to have been issued for the purposes of this Section.

     Any and all coupon bonds delivered to the Trustee  pursuant to this Article
shall have attached thereto all unmatured coupons appertaining thereto.

                                  ARTICLE VIII.

              ISSUANCE OF BONDS UPON DEPOSIT OF CASH WITH TRUSTEE.

     SECTION  32. The  Trustee  shall from time to time upon the  request of the
Company  authenticate  and deliver  bonds  (other than bonds of the 1970 Series)
upon  deposit  with the  Trustee by the  Company of cash equal to the  aggregate
principal amount of the bonds so requested to be authenticated and delivered but
only after the Trustee shall have received:

          (1) a resolution such as is described in subdivision (1) of Section 30
     hereof;

<PAGE>

          (2) a Treasurer's  certificate  stating that the Company is not to the
     knowledge  of the signers in default  under any of the  provisions  of this
     Indenture;

          (3) a net earnings certificate showing the net earnings of the Company
     to be as required by Section 29 hereof;

          (4) an  opinion  of  counsel  to the effect (a) that since the date of
     this  Indenture no lien prior to the lien of this Indenture has attached to
     and remains  unsatisfied  upon any of the  mortgaged  and pledged  property
     except  excepted  encumbrances  and except liens  existing  upon any of the
     mortgaged and pledged  property at the date it became mortgaged and pledged
     property;  (b) that the issue of the bonds, the authentication and delivery
     of which are requested in such resolution,  has been duly authorized by the
     Company and by any and all governmental authorities the consent of which is
     requisite  to the legal  issue of such  bonds,  specifying  any  officially
     authenticated  certificates or other documents, by which such consent is or
     may be evidenced,  or that no consent of any  governmental  authorities  is
     requisite and (c) that the supplemental  indenture specified in subdivision
     (6) below is in proper form to comply with the  requirements of subdivision
     (10) of Section 30 hereof;

          (5) the officially authenticated certificates,  or other documents, if
     any, specified in the opinion of counsel provided for in subdivision (4) of
     this Section; and

          (6) an  indenture  supplemental  hereto,  together  with  evidence  of
     recordation, such as is described in subdivision (10) of Section 30 hereof.

     SECTION 33. All cash deposited with the Trustee under the provisions of the
next  preceding  Section  hereof  shall be held by the  Trustee as a part of the
mortgaged and pledged  property,  but whenever,  within three (3) years from the
date of deposit of such cash with the Trustee, the Company shall become entitled
to the  authentication and delivery of bonds under any of the provisions of this
Indenture  (other  than  those  contained  in the next  preceding  Section)  the
Trustee, upon the application of the Company, evidenced by a resolution and upon
compliance by the Company with all the provisions of this  Indenture  (except as
hereinafter  in this  Section  provided),  with which it would have to comply to
obtain such  authentication and delivery,  shall pay over to the Company or upon
its order, in lieu of each bond or fraction  thereof to the  authentication  and
delivery of which the Company shall then be so entitled,  a sum in cash equal to
the principal amount of each such bond or fraction thereof;  provided,  however,
that for the purpose of  withdrawing  cash  pursuant to the  provisions  of this
Section,  it shall in no case be  necessary  for the  Company  to deliver to the
Trustee any  resolution or document such as are described in  subdivisions  (1),
(6) and (10) of Section 30 hereof, or such parts of the opinion as are described
in clause (e) of subdivision (7) of said Section 30 or such parts of the opinion
described  in  subdivision  (7) of  said  Section  30 as  relate  solely  to the
authorization  of the issuance of bonds by  governmental  authorities and by the
Company  or to the  supplemental  indenture  described  in  subdivision  (10) of
Section 30, or to comply with the provisions of Section 29 hereof.

<PAGE>

     SECTION 34. If, at any time within three (3) years from the date of deposit
thereof with the Trustee,  the Company shall so direct,  any cash deposited with
the Trustee under the  provisions of Section 32 hereof may be used or applied to
the purchase or redemption of bonds in the manner and subject to the  conditions
provided in subdivisions (2) and (3) of Section 68 hereof.

     Any cash  deposited  with the Trustee  under the  provisions  of Section 32
hereof, which shall not have been paid out pursuant to Section 33 hereof or used
or applied pursuant to the foregoing  provisions of this Section 34 within three
(3) years from the date of deposit  thereof with the  Trustee,  shall be used or
applied by the  Trustee  (unless  the  Company  is in default in the  payment of
interest on any bonds then outstanding hereunder or one or more of the completed
defaults  specified in Section 72 hereof shall have occurred and be continuing),
as promptly as the Trustee shall deem  reasonable or desirable,  to the purchase
or redemption  of bonds in the manner  provided in  subdivisions  (2) and (3) of
Section 68 hereof,  except that (a) the Trustee,  in its sole discretion,  shall
determine  whether  and at what  time or  times  bonds  shall  be  purchased  or
redeemed,  (b) the request by the Company  referred to in said  subdivisions (2)
and (3) shall not be  required,  and (c) if more than one series of bonds issued
hereunder shall at the time be outstanding, the Trustee, in its sole discretion,
shall  determine  the  amount  of such cash  which  shall be so  applied  to the
purchase or  redemption  of the bonds of each such  series.  The Company  hereby
authorizes  the Trustee on its behalf to give notice of  intention to redeem any
bonds which are to be  redeemed  pursuant to the  foregoing  provisions,  in the
manner provided by Section 59 hereof.

     The Company shall pay to the Trustee,  on demand, the amount of accrued and
unpaid interest, and premiums paid, if any, upon all bonds purchased or redeemed
pursuant to this Section.

                                   ARTICLE IX.

                      PARTICULAR COVENANTS OF THE COMPANY.

     The Company hereby covenants as follows:

     SECTION 35. That it is lawfully  possessed of all the  aforesaid  mortgaged
and  pledged  property;  that it will  maintain  and  preserve  the lien of this
Indenture so long as any of the bonds issued hereunder are outstanding; and that
it has good right and lawful  authority to mortgage and pledge the mortgaged and
pledged  property,  as provided in and by this  Indenture and that the mortgaged
and  pledged  property is free and clear of any deed of trust,  mortgage,  lien,
charge  or  encumbrance  thereon or  affecting  the title  thereto prior to this
Indenture other than as set forth in the granting  clauses hereof and other than
excepted encumbrances.

     SECTION  36.  That it will duly and  punctually  pay the  principal  of and
interest, and premium, if any, on all the bonds outstanding hereunder, according
to the terms thereof.  As the coupons  appertaining  to said bonds are paid they
shall be canceled.

     SECTION 37.  That it will keep an office or agency,  while any of the bonds
issued hereunder are  outstanding,  at any and all places at which the principal
of  or  interest  on  any  of  said  bonds  shall  be  payable,  where  notices,
presentations  and  demands  to or upon the  Company in respect of such bonds or
coupons as may be payable at such places or in respect of this  Indenture may be
given or  made,  and for the  payment  of the  principal  thereof  and  interest
thereon.  The Company will from time to time give the Trustee  written notice of
the  location of such office or offices or agency or  agencies,  and in case the
Company  shall fail to maintain  such office or offices or agency or agencies or
to give the Trustee  written  notice of the location  thereof,  any such notice,
presentation  or demand in respect of said bonds or coupons or of this Indenture
may be given or made,  unless other  provision is expressly  made herein,  to or
upon the Trustee at its principal office in the City of Chicago,  Illinois,  and
the Company hereby  authorizes  such  presentation  and demand to be made to and
such  notice to be  served on the  Trustee  in  either  of such  events  and the
principal  of and  interest on said bonds shall in such event be payable at said
office of the Trustee.

     SECTION 38. (a) That,  if the Company  shall  appoint a paying  agent other
than the Trustee,  it will cause such paying agent to execute and deliver to the
Trustee an  instrument  in which such paying agent shall agree with the Trustee,
subject to the provisions of this Section, (1) that such paying agent shall hold
in trust for the benefit of the bondholders or the Trustee all sums held by such
paying  agent for the payment of the  principal  of or interest on the bonds and
premium, if any; and (2) that such paying agent shall give the Trustee notice of
any default by the Company in the making of any deposit  with it for the payment
of the  principal  of or interest on the bonds and  premium,  if any, and of any
default by the  Company in the making of any such  payment.  Such  paying  agent
shall not be obligated  to  segregate  such sums from other funds of such paying
agent except to the extent required by law.

     (b) That if the Company acts as its own paying agent it will,  on or before
each due date of each instalment of principal or interest on the bonds set aside
and  segregate  and hold in trust  for the  benefit  of the  bondholders  or the
Trustee a sum  sufficient  to pay such  principal or interest so becoming due on
the bonds and premium,  if any, and will notify the Trustee of such action or of
any failure to take such action.

     (c) Anything in this Section to the contrary  notwithstanding,  the Company
may at any time, for the purpose of obtaining a release or  satisfaction of this
Indenture,  or for any other reason,  pay or cause to be paid to the Trustee all
sums held in trust by it or any paying agent as required by this  Section,  such
sums to be held by the Trustee upon the trusts herein contained.

     (d) Anything in this Section to the contrary notwithstanding, the agreement
to hold sums in trust, as provided in this Section, is subject to the provisions
of Section 130 hereof.

     SECTION 39. That it will pay all taxes and  assessments  lawfully levied or
assessed upon the mortgaged  and pledged  property,  or upon any part thereof or
upon any income  therefrom or upon the interest of the Trustee in the  mortgaged
and pledged  property  before the same shall  become  delinquent,  and will duly
observe  and conform to all valid  requirements  of any  governmental  authority
relative to any of the mortgaged and pledged property, and all covenants,  terms
and conditions upon or under which any of the mortgaged and pledged  property is
held;  that it will  not  suffer  any  lien to be  hereafter  created  upon  the
mortgaged and pledged  property,  or any part thereof,  or the income therefrom,
prior to the lien of these presents,  other than excepted encumbrances,  and, in
the  case  of  property  hereafter  acquired,  vendors'  liens,  purchase  money
mortgages and any lien thereon at the time of the acquisition  thereof, and that
within four months after the accruing of any lawful claims or demands for labor,
materials,  supplies  or other  objects,  which if unpaid  might by law be given
precedence  over the lien of this  Indenture as a lien or charge upon any of the
mortgaged and pledged property or the income thereof, it will pay or cause to be
discharged  or make  adequate  provision  to  satisfy  and  discharge  the same;
provided,  however,  that nothing in this Section  contained  shall  require the
Company to observe or conform to any requirement of governmental authority or to
cause to be paid or  discharged,  or to make  provision  for,  any such  lien or
charge, or to pay any such tax, assessment or governmental charge so long as the
validity  thereof  shall be contested  in good  faith and by  appropriate  legal
proceedings;  and  provided  that such  security  for the  payment of such lien,
charge or tax  shall be given as the  Trustee  may  require;  and that,  save as
aforesaid,  it will not suffer any matter or thing whereby the lien hereof might
or could be impaired.

     SECTION  40.  That it will  keep all the  mortgaged  and  pledged  property
insured against fire to the extent that property of similar character is usually
so insured by companies  similarly situated and operating like properties,  to a
reasonable  amount,  by reputable  insurance  companies,  any loss, except as to
materials  and  supplies and except any  particular  loss less than Ten thousand
dollars ($10,000), to be made payable to the Trustee as its interest may appear,
or to the trustee or other holder of any mortgage or other lien  constituting  a
prior lien or a lien prior hereto,  if the terms thereof require losses so to be
made payable; and if so requested in writing by the Trustee, it will, subject to
the  requirements  of any  mortgage  constituting  a prior  lien or a lien prior
hereto,  once in each year cause policies for the fire  insurance  carried to be
delivered to the Trustee for examination or inspection,  which policies shall be
returnable  to the Company  within sixty (60) days from the date of the delivery
to the  Trustee,  unless the Company  shall then be in default in the payment of
interest or one or more of the completed defaults specified in Section 72 hereof
shall have occurred and be continuing. There shall be deposited with the Trustee
annually a detailed statement signed by the Treasurer or an Assistant  Treasurer
of the Company of any fire insurance policies then outstanding and in force upon
the  aforesaid  property,  or any  part  thereof,  including  the  names  of the
insurance  companies  which have issued the  policies,  and the  maturities  and
amounts thereof.

     Any insurance  moneys paid in respect of any  particular  loss of less than
$10,000 or for any other  reason  received by the Company and not by the Trustee
shall, subject to the requirements of any mortgage  constituting a prior lien or
a lien prior hereto, be applied by the Company to the rebuilding or restoring of
the  property  destroyed  or damaged  or to the  acquisition  of other  property
subject  to the lien  hereof.  Any such  moneys not so used at the end of twelve
months from the receipt thereof. shall be paid over to the Trustee.

     All moneys  paid to the  Trustee by the  Company  in  accordance  with this
Section or received by the Trustee as proceeds of any insurance  against loss or
damage by fire shall, subject to the requirements of any mortgage constituting a
prior  lien or a lien  prior  hereto,  be held by the  Trustee  and,  subject as
aforesaid,  shall be paid by it to the Company to  reimburse  the Company for an
equal amount spent in the  rebuilding or restoring of the property  destroyed or
damaged,   upon  receipt  by  the  Trustee  of  a  resolution   requesting  such
reimbursement and a Treasurer's  certificate  stating the amount so expended and
the nature of such restoring or rebuilding.

     Any such  moneys not so  applied  within  eighteen  (18)  months  after its
receipt by the Trustee, or in respect of which notice in writing of intention to
apply the same to the work of  rebuilding  or  restoring  then in  progress  and
uncompleted  shall not have been given to the Trustee by the Company within such
eighteen (18) months,  or which the Company shall at any time notify the Trustee
is not to be so applied,  shall thereafter be withdrawn,  used or applied in the
manner,  to the  extent  and for the  purposes  and  subject  to the  conditions
provided in Section 68 hereof.

     SECTION  41.  (I) That it will at all  times  make or cause to be made such
expenditures by means of repairs and maintenance and substitutions, renewals and
replacements  of property or  otherwise  as shall be  necessary  to maintain the
mortgaged and pledged property as an operating system or systems in good repair,
working order and condition.

     In furtherance but not in limitation  thereof,  the Company  covenants that
while any bonds of the 1970  Series  are  outstanding  it will,  for the  period
beginning May 1, 1940 and ending December 31, 1940 (such period for the purposes
of this Section  being  referred to as a calendar  year),  and for each calendar
year  thereafter,  pay to the  Trustee  on or  before  the first day of May next
succeeding  the  end of  such  calendar  year,  as  and  for a  Maintenance  and
Improvement  Fund, a sum in cash equal to the sum of ten per centum (10%) of the
gross steam  operating  revenues of the Company and fifteen per centum  (15%) of
the gross  operating  revenues  (other  than steam  operating  revenues)  of the
Company for such  calendar  year less,  however,  to the extent that the Company
desires to include the same, the following credits against such Fund:

          (a) All  expenditures  of the Company  during such  calendar  year for
     ordinary  maintenance  and repairs of the  mortgaged  and pledged  property
     which  have not  theretofore  been  made the basis of a credit  under  this
     Section;

          (b) Such amounts (which have not theretofore  been made the basis of a
     credit  under this  subdivision  (b)) of all  expenditures  of the  Company
     subsequent  to April 30,  1940 for  property of the  character  of property
     additions   which  has  not   theretofore   been  made  the  basis  of  the
     authentication and delivery of bonds hereunder; provided, however, that any
     such  expenditures,  set forth as the basis of a credit in the  Treasurer's
     certificate provided for in this Section, shall have been made with respect
     to  property  additions  constituting  part of the  mortgaged  and  pledged
     property at the date of such Treasurer's certificate; and provided further,
     that the aggregate of all amounts then and theretofore  made the basis of a
     credit  under this  subdivision  (b) shall not exceed the  aggregate of the
     costs of all mortgaged and pledged property retired subsequent to April 30,
     1940.  Such  costs  shall be  determined,  both with  respect to funded and
     unfunded property, in the manner provided for the determination of costs in
     connection  with the deductions  required by subdivision  (II) of Section 4
     hereof;

<PAGE>

          (c) An amount  equal to one hundred  forty-two  and  six-sevenths  per
     centum  (142 6/7%) of the  principal  amount of each bond or  fraction of a
     bond to the  authentication and delivery of which the Company would then be
     entitled on the basis of property  additions by virtue of  compliance  with
     all applicable  provisions of this Indenture (except as hereinafter in this
     Section provided)  relating to such  authentication  and delivery but which
     have not been authenticated and delivered; and

          (d) The principal amount of any outstanding  bonds, with all unmatured
     coupons,  secured hereby, then surrendered to the Trustee,  which bonds and
     coupons  shall  forthwith be cancelled by the Trustee and,  upon request of
     the Company,  the Trustee may cremate the same and deliver to the Company a
     certificate of such cremation; and

          (e) An amount equal to one hundred and forty-two and  six-sevenths per
     centum (142 6/7%) of such principal  amount of bonds, the issue of which is
     provided for in Section 23 hereof, as to which the Treasurer's certificate,
     hereinafter  in this Section  provided for, shall state (i) that such bonds
     have not been authenticated and delivered hereunder, (ii) that the right to
     the  authentication  and  delivery  of such  bonds has not been  previously
     waived,  and (iii) that the Company elects to make such principal amount of
     bonds the basis of a credit under this  Section 41. Any such  election of a
     credit  shall  operate  as a  waiver  by the  Company  of its  tight to the
     authentication and delivery of such bonds under Section 23 hereof, and such
     bonds may not thereafter be authenticated and delivered hereunder.

     On or  before  the first  day of May next  succeeding  the end of each such
calendar year, the Company shall file with the Trustee a Treasurer's certificate
which shall state:

          (1) The amount which is 10% of the gross steam  operating  revenues of
     the Company during such year;

          (2) The amount  which is 15% of the gross  operating  revenues  (other
     than steam operating revenues) of the Company during such year;

          (3) The sum of the  amounts  stated in the  foregoing  clauses (1) and
     (2);

          (4) If  credit  is  desired  under  subdivision  (a),  the  amount  of
     expenditures of the character described in subdivision (a) for which credit
     is desired and that such amount has not theretofore  been made the basis of
     a credit under this Section;

          (5) If credit is desired under  subdivision  (b), a statement  showing
     the amount of such credit and how the same has been  calculated and stating
     that such amount has not theretofore  been made the basis of a credit under
     subdivision  (b) of this  Section  and  that the  property  for  which  the
     expenditures  were  made has not  theretofore  been  made the  basis of the
     authentication and delivery of bonds hereunder;

<PAGE>

          (6) If credit is desired under  subdivision  (c), a statement  showing
     the amount of such credit together with the  certificates,  instruments and
     opinions required to be delivered by this Section in connection with such a
     credit;

          (7) If credit is desired under  subdivision  (d), the principal amount
     of bonds being surrendered as the basis of such credit;

          (8) If credit is desired  under  subdivision  (e),  the amount of such
     credit and the statements required under said subdivision (e);

          (9) The amount,  if any,  set forth  pursuant to clause (11) hereof in
     the next previous  Treasurer's  certificate  which shall have been filed by
     the Company pursuant to the provisions of this Section except to the extent
     that any  credits  included  in such  excess  amount may have been made the
     basis of the withdrawal of cash deposited under this Section 41;

          (10) The  aggregate  of the  amounts  set  forth  in such  Treasurer's
     certificate pursuant to the foregoing clauses (4) to (9), inclusive;

          (11)  The  amount,  if any,  by which  the  amount  set  forth in such
     Treasurer's  certificate  pursuant to the foregoing clause (10) shall be in
     excess of the amount stated in such Treasurer's certificate pursuant to the
     foregoing clause (3);

          (12)  The  amount,  if any,  by which  the  amount  set  forth in such
     Treasurer's certificate pursuant to the foregoing clause (10) shall be less
     than the amount  stated in such  Treasurer's  certificate  pursuant  to the
     foregoing clause (3);

     The  Company  shall pay to the  Trustee in cash on or before the said first
day of May the amount set forth in such Treasurer's  certificate pursuant to the
foregoing  clause (12).  Any cash so deposited  may be withdrawn on the basis of
credits of the  character  set forth in the  foregoing  subdivisions  (a) to (e)
inclusive,  to the  extent  that the same would be  available  as the basis of a
credit against the Company's  obligation to deposit cash under this Section, and
shall be certified to the Trustee in the same manner as though such credits were
being made the basis of a credit  against the  Company's  obligation  to deposit
cash under this  Section.  Any  credit so made the basis of  withdrawal  of cash
under this Section may not  thereafter be made the basis of a credit of any kind
under this  Section.  Any cash so deposited  may, in lieu of being  withdrawn as
aforesaid,  be  applied to the  purchase  or  redemption  of bonds in the manner
provided for in subdivisions  (2) and (3) of Section 68 hereof.  Any cash not so
withdrawn or applied within three years from the date of receipt  thereof by the
Trustee  shall be applied by the Trustee to the purchase or  redemption of bonds
outstanding  hereunder in the manner  provided by  paragraph  (II) of Section 68
hereof.

     In case the Company shall, pursuant to the provisions of subdivision (b) of
this Section,  elect to make expenditures with respect to any property additions
the basis of a credit,  the Company  shall  deliver to the Trustee an opinion of
counsel to the effect that the  property  additions,  with  respect to which the
expenditures so certified were made,  constituted at the date of the Treasurer's
certificate part of the mortgaged and pledged property.

     In case the Company shall, pursuant to the provisions of subdivision (c) of
this  Section,  elect  to  avail  of a  credit  based  upon  the  right  to  the
authentication  and  delivery of bonds on the basis of property  additions,  the
Company shall comply with all applicable  provisions of this Indenture  relating
to such  authentication and delivery;  provided,  however,  that in no such case
shall the  Company be  required  to deliver to the  Trustee  any  resolution  or
document such as is described in subdivisions  (1), (2), (6) and (10) of Section
30  hereof  or such  parts of the  opinion  as are  required  by  clause  (e) of
subdivision  (7) of said Section 30, or such parts of the opinions  described in
subdivision (7) of said Section 30 as relate solely to the  authorization of the
issuance of bonds of the Company by  governmental  authorities or by the Company
or to the supplemental  indenture described in subdivision (10) of Section 30 or
to comply with the  provisions  of Section 29 hereof;  and such  election  shall
operate as a waiver by the Company of the right thereafter to make such property
additions the basis for the authentication and delivery of bonds hereunder,  and
such property additions shall have the status of funded property.

     (II) The Company  further  covenants  that it will,  whenever  requested in
writing by the Trustee,  or by the holders of at least  fifteen per centum (15%)
in principal  amount of bonds then outstanding  hereunder,  but in no event more
often than once in every five (5) years,  cause an  inspection  of the mortgaged
and pledged property to be made by an independent engineer.

     Such independent engineer, within a reasonable time from the date of his or
their appointment, shall report to the Company and to the Trustee whether or not
the mortgaged and pledged property,  as an operating system or systems, has been
maintained in good repair, working order and condition, and whether or not there
is any mortgaged and pledged  property which should be classified as retired and
which has not been  retired  on the books of the  Company.  If such  independent
engineer shall report that the mortgaged and pledged  property,  as an operating
system or systems, has not been so maintained, he or they shall state clearly in
such  report the  character  and extent and  estimated  cost of making good such
deficiency and, if longer than one year, the time  reasonably  necessary to make
good such deficiency and, if he or they shall report that there is mortgaged and
pledged  property  which should be  classified as retired and which has not been
retired on the books of the Company,  such report shall  briefly  describe  such
property  and shall state the amount of such  retirement.  Such amount  shall be
determined,  both with  respect to funded and unfunded  property,  in the manner
provided for the determination of the deductions required by subdivision (II) of
Section 4 hereof; provided, however, that with respect to any property additions
which shall not have been included in any engineer's  certificate or independent
engineer's certificate  theretofore furnished to the Trustee, the amount of such
retirement shall be the cost or fair value thereof  (whichever shall be less) as
of the date of such  report in the case of  property  additions  which  were not
funded  property,  and in the  case of  property  additions  which  were  funded
property  as of the  date  they  became  funded  property,  in  either  case  as
determined by the signers of such report. Said report shall be placed on file by
the Trustee and shall be open to inspection by any  bondholder at any reasonable
time.

<PAGE>

     The Company shall,  with all reasonable  speed, do such maintenance work as
may be necessary to make good any such maintenance deficiency as shall have been
determined  to exist as  hereinabove  provided at the time of the report of such
independent  engineer,  whereupon such  independent engineer (or, in case of his
or their refusal or inability to act, some other  independent  engineer),  shall
report in writing to the Trustee whether such deficiency has been made good.

     Unless the  Trustee  shall be so  advised  in  writing by such  independent
engineer  within  one  year  from  the date of the  report  of such  independent
engineer,  or such longer period as may be reported by such independent engineer
to be reasonably  necessary for the purpose,  that such deficiency has been made
good, the Company shall be deemed to be in default in the  performance of one of
its covenants  under this  Indenture.  In any proceeding  based on such default,
said  report  or  reports  of such  independent  engineer  shall be prima  facie
evidence of the existence of the facts and conditions therein set forth.

     The  Company  covenants  that it will  promptly  retire on its books at the
amounts  stated in said report,  all property which said report states should be
retired.

     All  expenses  incurred  pursuant  to this  Section  shall  be borne by the
Company.

     (III) For the  purposes  of this  Section  41 and of  Section  47, the term
"Gross Operating Revenues of the Company" as applied to steam operating revenues
and other  operating  revenues of the Company is hereby  defined as the revenues
received  by the  Company  from the sale of  electric,  steam and  other  public
utility service and the amounts received as rentals or fixed charges for the use
by others (or the use by the Company  for the  account of others) of  generating
and  transmission  facilities  owned by the Company (with all  interdepartmental
items  eliminated),  and  after  deducting  an  amount  equal to the cost to the
Company  of  electricity,  steam  or  other  public  utility  service  products,
purchased  for  exchange or resale,  and after  deducting an amount equal to the
revenues  from the  operation of (or, at the option of the Company,  the cost of
rentals paid by the Company for) electric, steam or other producing, generating,
transporting,  transmitting or distributing  properties leased from others,  and
after  deducting an amount equal to charges to the Company for  transmission  by
others of electricity  and/or  transportation by others of steam or other public
utility service products;  provided,  however, that any operating revenue of the
Company which is in  controversy as a result of any litigation or which has been
impounded,  shall be included in the Gross Operating Revenues of the Company for
the purpose of this  computation,  but only after, and in the year in which, any
such  operating  revenue in  controversy  or impounded  is recovered  or, at the
option  of the  Company,  after,  and in the year in which,  it shall  have been
finally determined that such operating revenues belong to the Company.

     SECTION 42. That it will, subject to the provisions of Article XVII hereof,
at all times  maintain its  corporate  existence and right to carry on business,
and,  subject to the provisions  hereof,  will use its best efforts to maintain,
preserve and renew all the rights,  powers,  privileges and franchises  owned by
it.

<PAGE>

     SECTION  43. That if it shall fail to perform any  covenants  contained  in
Sections 39, 40, 41, 42, or 44 hereof,  the Trustee may make advances to perform
the same in its behalf and shall make such advances if requested so to do by the
holders  of not less than a  majority  in  principal  amount  of the bonds  then
outstanding hereunder and furnished with funds adequate for the purpose and also
adequate to pay any expense  incurred in connection with such  performance;  the
Company shall at once repay to the Trustee all sums so advanced with interest at
the rate of five per centum (5%) per annum until paid,  and all sums so advanced
with the interest  thereon  shall be secured  hereby,  having the benefit of the
lien hereby created in priority to the  indebtedness  evidenced by the bonds and
coupons  issued  hereunder,  but no such advance  shall be deemed to relieve the
Company  from any default  hereunder  except  that,  to the extent that any such
advances by the Trustee shall be repaid by the Company,  such advances  shall be
deemed to have been payments of the Company as of the date of such repayment.

     SECTION 44. That it will cause this  Indenture to be promptly  recorded and
filed in such  manner and in such  places as may be  required by law in order to
fully preserve and protect the security of the bondholders and all rights of the
Trustee and will furnish to the Trustee:

          (1) Promptly after the execution and delivery of this Indenture and of
     each supplemental  indenture,  an opinion of counsel (who may be of counsel
     for the  Company)  either  stating that in the opinion of such counsel this
     Indenture  and  all  indentures  supplemental  hereto  have  been  properly
     recorded and filed so as to make  effective the lien intended to be created
     thereby and  reciting  the  details of such  action or stating  that in the
     opinion  of such  counsel  no such  action is  necessary  to make such lien
     effective, and

          (2) At  least  annually  after  the  execution  and  delivery  of this
     Indenture  it will furnish to the Trustee an opinion of counsel (who may be
     of counsel  for the  Company)  either  stating  that in the opinion of such
     counsel such action has been taken with respect to the  recording,  filing,
     re-recording and refiling of this Indenture and all indentures supplemental
     hereto as is  necessary  to maintain  the lien  thereof,  and  reciting the
     details of such  action,  or stating that in the opinion of such counsel no
     such action is  necessary to maintain  such lieu.  As used in clause (2) of
     this  Section,  the term  "annually"  shall be  deemed to mean once in each
     calendar year following the calendar year 1940.

     It shall be a  compliance  with  clauses (1) and (2) of this Section if (a)
the opinion of counsel  therein  required to be delivered  to the Trustee  shall
state  (i) that the  indentures  which  may be the  subject  matter  of any such
opinion have been received for  recordation or filing or rerecording or refiling
in  each  jurisdiction  in  which  in the  opinion  of  such  counsel  they  are
respectively  required to be recorded or filed or rerecorded or refiled and (ii)
that,  in the opinion of such  counsel,  no further  action is necessary to make
effective  the lien  intended  to be  created by such  indentures,  and (b) such
opinion is delivered to the Trustee within such time,  following the date of the
execution  and delivery of the  respective  indentures  which may be the subject
matter of such opinion, as shall be practicable, having due regard to the number
and distance of the  jurisdictions in which the same are required to be recorded
or filed or rerecorded or refiled.

<PAGE>

     SECTION 45. That it will execute and deliver such further  instruments  and
do such further acts as may be necessary or proper to carry out more effectually
the  purposes  of this  Indenture,  and to make  subject to the lien  hereof any
property  hereafter  acquired and intended to be subject to the lien hereof, and
to transfer to any new trustee or trustees  or  co-trustee  or  co-trustees  the
estate, powers, instruments or funds held in trust hereunder.

     SECTION 46. That books of record and account  will be kept,  in which full,
true and correct entries will be made, of all dealings or transactions of, or in
relation to, the plants,  properties,  business and affairs of the Company,  and
that all books,  documents  and  vouchers  relating to the  plants,  properties,
business and affairs of the Company shall at all reasonable times be open to the
inspection of such reputable accountant or other agent of recognized standing as
the Trustee may from time to time designate,  and that the Company will bear all
expenses of any such inspection.  Except as may be required pursuant to Sections
97 and 98 hereof,  the Trustee  shall be under no  obligation  to cause any such
inspection to be made unless requested so to do in writing by the holders of not
less than a majority in principal amount of the bonds then outstanding hereunder
and furnished with funds sufficient to pay all costs and expenses incurred or to
be incurred by it in or in connection with such inspection.

     SECTION 47. That  subsequent  to December 31, 1939 and so long as any bonds
of the 1970  Series are  outstanding,  (except as  hereinafter  in this  Section
otherwise  provided) it will not have (a) declared or paid any  dividends on its
capital  stock of any  class  (other  than  dividends  payable  in shares of its
capital stock of any class), or (b) made any other distribution on any shares of
its capital  stock of any class,  or (c) purchased or redeemed any shares of its
capital stock of any class, in an amount which would exceed in the aggregate the
amount of its net income after December 31, 1939  available for  dividends.  The
amount of such net income shall be determined in accordance with good accounting
practice after all proper  deductions,  including (i) deduction for amortization
of debt  discount  and  expense  and of  premiums  paid in  connection  with the
redemption of funded debt, and (ii)  expenditures and accruals for depreciation,
maintenance,  repairs, renewals, replacements and substitutions of the Company's
property in the amounts shown by the Company's  books, but in no event shall the
total  deduction  pursuant  to this  clause (ii) be less than the sum of ten per
centum  (10%) of the gross steam  operating  revenues of the Company and fifteen
per centum (15%) of the gross  operating  revenues  (other than steam  operating
revenues) of the Company from December 31, 1939 to the date of  determination of
such net income.  In  determining  the amount of such net  income,  no charge or
credit to surplus of the following nature shall be included:

          1. Surplus  adjustments  applicable  to the period prior to January 1,
     1940;

          2.  Charges  directly  to  earned  surplus  to  write-off  unamortized
     discount  and  expense  applicable  to  any  funded  debt  of  the  Company
     outstanding at any time prior to May 1,1940,  or unamortized  premiums paid
     in connection with the redemption of such funded debt;

<PAGE>

          3.  Charges  directly  to  earned  surplus  to write  off  unamortized
     discount and expense  applicable  to any class of the capital  stock of the
     Company  heretofore or hereafter  outstanding  or  unamortized  premiums in
     connection  with the  redemption  of any class of the capital  stock of the
     Company now or hereafter outstanding and subject to redemption;

          4. Charges to earned  surplus for the  write-down  or write-off of any
     properties or investments of the Company which may be required by any rule,
     regulation or order of any public  authority having  jurisdiction  over the
     accounts of the Company.

     The restrictions and computations  under the foregoing  covenant,  however,
shall not apply (i) to the  declaration  or payment of dividends upon any shares
of its capital stock of any class to an amount in the aggregate not in excess of
$1,107,155  or (ii) to the  application  to the  purchase or  redemption  of any
shares  of its  capital  stock of any  class of  amounts  not to  exceed  in the
aggregate  the net proceeds  received by the Company from the sale of any shares
of its capital stock of any class subsequent to December 31, 1939.

     The Company  covenants that, so long as any of the bonds of the 1970 Series
are outstanding,  each financial  statement  required by Section 52 hereof to be
filed with the Trustee  will  disclose,  by footnote  or  otherwise,  the amount
available at the date of such financial statement for dividends,  distributions,
purchases and  redemptions,  pursuant to the  provisions of this Section 47, and
the  dividends,  distributions,  purchases,  and  redemptions,  if  any,  of the
character  referred to in this Section,  paid or made during the year covered by
such financial statement.

     The Company  covenants  that within fifteen (15) days after the date of the
declaration of any dividend, the making of any distribution on its capital stock
or the purchase or  redemption of any of its capital  stock,  it will notify the
Trustee of such action and will deliver to the Trustee a Treasurer's certificate
to the effect that such action was not in  violation of the  provisions  of this
Section.

     SECTION  48.  That it will not  issue,  or permit to be  issued,  any bonds
hereunder in any manner other than in  accordance  with the  provisions  of this
Indenture and that it will  faithfully  observe and perform all the  conditions,
covenants and requirements of this Indenture and of all indentures  supplemental
hereto and of the bonds issued hereunder.

     SECTION 49. I. That it will not  withdraw or permit the  withdrawal  of any
cash or purchase money obligations  representing the proceeds of insurance on or
the release of or the taking by eminent  domain of property  subject to the lien
of this  Indenture  which shall have been  deposited with the trustee of a prior
lien unless

          (a) such cash is deposited with the Trustee hereunder to be withdrawn,
     used or applied in the manner and  subject to the  conditions  provided  in
     Section 68  hereof,  except  that any such cash  representing  proceeds  of
     insurance  shall be applied in accordance with the provisions of Section 40
     hereof; or

<PAGE>

          (b) the  consent  of the  Trustee  hereunder  has  been  given to such
     withdrawal, which consent shall be given by the Trustee (1) with respect to
     any such cash  representing  proceeds of insurance upon compliance with the
     provisions of Section 40 hereof, or (2) with respect to any other cash upon
     compliance with the provisions of Section 68 hereof.  Any cash with respect
     to the  withdrawal  of which the Trustee  shall have given its'  consent in
     accordance  with the  provisions  of this  subdivision  (b)  shall  for all
     purposes  of this  Indenture  be deemed to have been  originally  deposited
     hereunder and to have been withdrawn,  used or applied under the provisions
     of Section 40 or Section 68 hereof as the case may be; or,

          (c) such cash is  deposited  with the  trustee of another  prior lien,
     such cash to be subject to the  restrictions  as to withdrawal  hereinabove
     set forth; or

          (d) such purchase money  obligations are withdrawn for payment and the
     cash  received  thereon is  deposited  with the trustee of such prior lien,
     such cash to be subject to the  restrictions  as to withdrawal  hereinabove
     set forth.

     II. That, upon the cancellation and discharge of any prior lien, it will

          (a) cause the balance of any cash and purchase  money  obligations  of
     the  character  described in  paragraph I of this Section  which shall have
     been  deposited  with  the  trustee  of  such  prior  lien  and  shall  not
     theretofore  have been withdrawn or permitted to be withdrawn in accordance
     with the provisions of said paragraph I to be deposited either (1) with the
     Trustee to be held and  applied in the same  manner as though such cash and
     purchase money  obligations  had originally been deposited with the Trustee
     hereunder,  or (2) With the trustee of another  prior  lien,  such cash and
     purchase  money  obligations  to  be  subject  to  the  restrictions  as to
     withdrawal hereinabove set forth; and

          (b) cause any prior lien bonds then held by the  trustee of such prior
     lien to be cancelled.

     III.  That,  so long as any prior lien  continues  to be a prior lien,  the
Company  will not  permit  prior  lien  bonds  secured  by such prior lien to be
increased  unless the prior  lien  bonds  representing  such  increase  shall be
deposited with the Trustee to be held under the provisions of Article XI hereof.

                                   ARTICLE X.

         BONDHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE.

     SECTION 50. The Company  covenants and agrees that it will furnish or cause
to be furnished to the Trustee between June 15 and June 30 and between  December
15 and December 31 in each year beginning  with the period  between  December 15
and  December  31 in the year 1940,  and at such other  times as the Trustee may
request in writing,  a list in such form as the Trustee may  reasonably  require
containing all the information in the possession or control of the Company or of
its  paying  agents,  as to the  names and  addresses  of the  holders  of bonds
obtained  since  the  date as of which  the  next  previous  list,  if any,  was
furnished.  Any such list may be dated as of a date not more than  fifteen  days
prior to the time such  information is furnished or caused to be furnished,  and
need not include information received after such date.

     SECTION  51.  (a) The  Trustee  shall  preserve  in as current a form as is
reasonably  practicable  all  information  as to the names and  addresses of the
holders of the bonds  outstanding under this Indenture (1) contained in the most
recent list furnished to it, as provided in Section 50 hereof (2) received by it
in the capacity of paying agent with respect to the principal of and interest on
the bonds outstanding  under this Indenture,  and (3) filed with it within the 2
preceding  years pursuant to the provisions of paragraph (2) of subdivision  (c)
of Section 53 hereof.

     The Trustee may (1) destroy any information or portion thereof furnished to
it as provided in said Section 50 upon receipt of new  information  so furnished
to it in substitution  therefor;  (2) destroy any information  received by it as
paying  agent upon  delivering  to itself as Trustee,  not earlier  than 45 days
after an interest  payment date of the bonds,  a list  containing  the names and
addresses  of the  holders of bonds  obtained  from such  information  since the
delivery of the next previous  list,  if any; (3) destroy any list  delivered to
itself as Trustee which was compiled from  information  received by it as paying
agent upon receipt of a new list so delivered;  and (4) destroy any in formation
received by it pursuant to the  provisions of paragraph (2) of subsection (c) of
said Section 53 but not until 2 years after such information has been filed with
it.

     (b) In case three or more holders of such bonds (hereinafter referred to as
"applicants")  apply in  writing  to the  Trustee  and  furnish  to the  Trustee
reasonable  proof that each such  applicant has owned a bond  outstanding  under
this  Indenture  for a period  of at least 6 months  preceding  the date of such
application,   and  such  application  states  that  the  applicants  desire  to
communicate  with other holders of bonds with respect to their rights under this
Indenture or under the bonds,  and is accompanied by a copy of the form of proxy
or other  communication  which such  applicants  propose to  transmit,  then the
Trustee shall within 5 business days after the receipt of such  application,  at
its election, either

          (1) afford to such applicants  access to the information  preserved at
     the time by the Trustee in accordance  with the  provisions of  subdivision
     (a) of this Section; or

          (2) inform such applicants as to the approximate  number of holders of
     bonds whose names and addresses appear in the information  preserved at the
     time by the Trustee,  in accordance  with the provisions of subdivision (a)
     of  this  Section,  and  as to the  approximate  cost  of  mailing  to such
     bondholders the form of proxy or other communication,  if any, specified in
     such application.

     If the Trustee  shall elect not to afford  such  applicants  access to such
information,  the Trustee shall,  upon the written  request of such  applicants,
mail to each  bondholder  whose  name and  address  appears  in the  information
preserved at the time by the  Trustee,  in  accordance  with the  provisions  of
subdivision  (a) of  this  Section,  a copy  of  the  form  of  proxy  or  other
communication  which is specified in such request,  with  reasonable  promptness
after a tender to the Trustee of the  material  to be mailed and of payment,  or
provision for the payment of, the  reasonable  expenses of such mailing,  unless
within 5 days after such tender,  the Trustee shall mail to such  applicants and
file with the  Securities and Exchange  Commission,  together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the holders
of bonds or would be in  violation of  applicable  law.  Such written  statement
shall specify the basis of such opinion.  If said Commission,  after opportunity
for a hearing upon objections specified in the written statement so filed, shall
enter an order  refusing to sustain  any of such  objections,  or if,  after the
entry of an order  sustaining one or more of such  objections,  said  Commission
shall find, after notice and opportunity for a hearing,  that all the objections
so sustained  have been met and shall enter an order so  declaring,  the Trustee
shall mail  copies of such  material  to all such  bondholders  with  reasonable
promptness  after  the  entry of such  order  and the  renewal  of such  tender;
otherwise,  the  Trustee  shall be relieved  of any  obligation  or duty to such
applicants respecting their application.

     (c) The Trustee shall not be held  accountable  by reason of the mailing of
any material pursuant to any request made under subdivision (b) of this Section.

     SECTION 52. The Company covenants and agrees

          (1) To file with the  Trustee,  within 15 days  after the  Company  is
     required  to file the same with the  Securities  and  Exchange  Commission,
     copies of the annual reports,  and of the information,  documents and other
     reports  (or  copies  of  such  portions  of any of the  foregoing  as such
     Commission may from time to time by rules and regulations  prescribe) which
     the  Company  may be  required  to file with such  Commission  pursuant  to
     Section 13 or Section 15(d) of the Securities  Exchange Act of 1934; or, if
     the Company is not  required  to file  information,  documents  or reports,
     pursuant to either of such Sections,  then to file with the Trustee and the
     Securities  and  Exchange   Commission,   in  accordance   with  rules  and
     regulations  prescribed from time to time by said  Commission,  such of the
     supplementary and periodic information,  documents and reports which may be
     required  pursuant to Section 13 of the Securities  Exchange Act of 1934 in
     respect  of a  security  listed and  registered  on a  national  securities
     exchange  as may be  prescribed  from  time  to  time  in  such  rules  and
     regulations;

          (2)  To  file  with  the  Trustee  and  the  Securities  and  Exchange
     Commission,  in accordance with the rules and  regulations  prescribed from
     time to time by said Commission, such additional information, documents and
     reports with respect to compliance by the Company with the  conditions  and
     covenants  provided for in this  Indenture as may be required  from time to
     time by such rules and regulations;

          (3) To  transmit  to the  holders  of  bonds  outstanding  under  this
     Indenture,  within 30 days after the filing thereof with the Trustee (or at
     such  other  time  as  shall  be  fixed  by  the  Securities  and  Exchange
     Commission) and in the manner and to the extent provided in subdivision (c)
     of Section 53 hereof with respect to reports pursuant to subdivision (a) of
     said  Section,  such  summaries of any  information,  documents and reports
     required to be filed by the Company,  pursuant to subdivisions  (1) and (2)
     of this Section, as may be required by the rules and regulations prescribed
     from time to time by the Securities and Exchange Commission; and

          (4) If at any time hereafter the Company shall not be required to file
     copies of its annual report with the Securities and Exchange Commission, to
     file with the Trustee  within one hundred twenty (120) days after the close
     of each fiscal year a statement  signed by the Treasurer of the Company and
     an  independent  certified  or  public  accountant  showing  its  financial
     condition and giving reasonably  detailed  information as to its assets and
     liabilities and its earnings and operating expenses.

     SECTION 53. (a) The Trustee shall transmit,  within 60 days after May 15 in
each year,  beginning  with the year 1941, to the  bondholders as hereinafter in
this Section provided a brief report dated as of such May 15 with respect to

          (1) Its eligibility and its  qualifications  under Sections 96 and 109
     hereof,  or in  lieu  thereof,  if to  the  best  of its  knowledge  it has
     continued  to be eligible  and  qualified  under such  Sections,  a written
     statement to such effect;

          (2) The  character  and amount of any  advances  (and,  if the Trustee
     elects so to state, the circumstances  surrounding the making thereof) made
     by the Trustee, as such, which remain unpaid on the date of such report and
     for the  reimbursement  of which it  claims  or may  claim a lien or charge
     prior to that of the bonds upon the mortgaged and pledged property, or upon
     property or funds held or collected by it as Trustee,  if such  advances so
     remaining  unpaid aggregate more than one-half of one percentum (1/2 of 1%)
     of the aggregate principal amount of bonds outstanding under this Indenture
     on the date of such report;

          (3)  The  amount,  interest  rate  and  maturity  date  of  all  other
     indebtedness  owing by the  Company,  or any  other  obligor  on the  bonds
     secured  hereby,  to the Trustee in its individual  capacity on the date of
     such report,  with a brief  description  of any property held as collateral
     security   therefor,   except  an   indebtedness   based  upon  a  creditor
     relationship  arising in any manner described in paragraphs 2, 3, 4 or 6 of
     subdivision (b) of Section 110 hereof;

          (4)  The  property  and  funds  physically  in the  possession  of the
     Trustee,  as such Trustee,  or of a depositary  for it, on the date of such
     report;

          (5) Any release,  or release and substitution,  of property subject to
     the lien of this Indenture (and  the consideration  therefor, if any) which
     it has not previously reported;  provided, however, that to the extent that
     the  aggregate  value as shown by the release  papers of any or all of such
     released  properties does not exceed an amount equal to 1% of the principal
     amount of bonds then outstanding,  the report need only indicate the number
     of such  releases,  the total  value of  property  released as shown by the
     release  papers,  the  aggregate  amount of cash received and the aggregate
     value of property received in substitution therefor as shown by the release
     papers;

          (6) Any additional issue of bonds issued under this Indenture which it
     has not previously reported; and

          (7) Any action taken by the Trustee in the  performance  of its duties
     under this Indenture which it has not previously reported and which, in its
     opinion,  materially affects the bonds outstanding under this Indenture, or
     materially  affects the  mortgaged and pledged  property,  except action in
     respect of a default,  notice of which has been or is to be withheld by it,
     in accordance with the provisions of Section 73.

     (b) The Trustee shall transmit to the bondholders as hereinafter provided a
brief report with respect to--

          (1) the release,  or release and substitution,  of property subject to
     the lien of this Indenture (and the consideration  therefor, if any) unless
     the fair value of such property, as set forth in the certificate or opinion
     required by  Sections 66 or 68 is less than 10 per centum of the  principal
     amount of bonds  outstanding  at the time of such release,  or such release
     and  substitution,  such report to be so  transmitted  within 90 days after
     such time; and

          (2) the  character  and  amount of any  advances  (and if the  Trustee
     elects so to state, the circumstances  surrounding the making thereof) made
     by the  Trustee  as such  since  the  date of the last  report  transmitted
     pursuant to the  provisions of subsection  (a) of this Section 53 (or if no
     such report has yet been so  transmitted,  since the date of  execution  of
     this  Indenture),  for the  reimbursement of which it claims or may claim a
     lien or charge  prior to that of the  bonds on the  mortgaged  and  pledged
     property or on property or funds held or  collected  by it as Trustee,  and
     which it has not previously  reported  pursuant to  this paragraph, if such
     advances  remaining unpaid at any time aggregate more than 10 per centum of
     the principal  amount of bonds  outstanding at such time, such report to be
     transmitted within 90 days after such time.

     (c) Reports, pursuant to this Section, shall be transmitted by mail

          (1)  to  all  registered  holders  of  bonds  outstanding  under  this
     Indenture  as the names  and  addresses  of such  holders  appear  upon the
     registration books of the Company;

          (2) to such holders of bonds outstanding under this Indenture as have,
     within the two (2) years preceding such transmission, filed their names and
     addresses with the Trustee for that purpose; and

<PAGE>

          (3) except in the case of reports  pursuant to subsection  (b) of this
     Section, to each bondholder whose name and address is preserved at the time
     by the Trustee, as provided in subdivision (a) of Section 51 hereof.

     (d) A copy of each such report shall,  at the time of such  transmission to
the bondholders, be filed by the Trustee with each Stock Exchange upon which any
of the bonds are listed, and also with the Securities and Exchange Commission.

                                  ARTICLE. XI.

               CONCERNING PRIOR LIEN BONDS DEPOSITED WITH TRUSTEE.

     SECTION 54. Each prior lien bond in coupon form  deposited with the Trustee
shall  have  all  unmatured  coupons  attached  when so  deposited,  or shall be
accompanied by evidence  satisfactory to the Trustee (which may be a certificate
of the  mortgagee  or trustee  under the prior lien  securing the same) that the
discharge  of the  mortgage or other lien  securing  such prior lien bond may be
obtained  without the  production  of any coupon or coupons that may be missing;
and each prior lien bond so deposited shall be uncanceled.  Each prior lien bond
deposited  hereunder  shall be in  bearer  form or  accompanied  by  appropriate
instruments of transfer;  and the Trustee may cause any or all registered  prior
lien bonds to be registered in its name as Trustee, or otherwise, or in the name
or names of its nominee or nominees.

     SECTION 55. All prior lien bonds  received by the Trustee for the  purposes
of this Article XI shall be held by the Trustee,  as part of the  mortgaged  and
pledged property and without impairment of the lien thereof,  for the protection
and  further  security  of  the  bonds  issued  hereunder.   Except  during  the
continuance of a completed default specified in Section 72 of this Indenture, no
payment by way of interest or  otherwise  on any of the prior lien bonds held by
the Trustee shall be made or demanded and the coupons  thereto  appertaining  as
they mature  shall be canceled by the Trustee and  delivered  so canceled to the
Company,  unless the Company shall,  by an instrument in writing,  signed by its
President or a Vice-President  or its Treasurer or an Assistant  Treasurer,  and
delivered to the Trustee,  elect,  with respect to any of such prior lien bonds,
to have such  payments  made and  demanded.  In any  event,  except  during  the
continuance  of a completed  default as  aforesaid,  all moneys  received by the
Trustee on account of the principal of or interest or premium on said prior lien
bonds (to the extent that a  Treasurer's  certificate  delivered  to the Trustee
shall state that such moneys do not  represent  the proceeds of insurance on, or
of the release of, or of the taking by eminent domain of,  mortgaged and pledged
property,  including the proceeds of and substitutes for any thereof),  shall be
paid  over  by the  Trustee  to or upon  the  order  of the  Company  signed  as
aforesaid;  provided that if and to the extent that such Treasurer's certificate
shall not state that such moneys do not  represent the proceeds of insurance on,
or of the  release  of, or of the taking by eminent  domain  of,  mortgaged  and
pledged property, including the proceeds of and substitutes for any thereof, the
same shall be  retained by the  Trustee  and held as part of the  mortgaged  and
pledged  property,  to be  withdrawn,  used or applied,  in the  manner,  to the
extent, and for the purposes,  and subject to the conditions provided in Section
68 hereof.

<PAGE>

     SECTION 56. Except during the continuance of a completed  default specified
in Section 72 hereof,  the Trustee,  if so directed by an  instrument in writing
signed by the  President or a Vice-  President or the  Treasurer or an Assistant
Treasurer  of the  Company,  shall  cause any prior  lien bonds held by it to be
canceled,  and the obligation  thereby evidenced to be satisfied and discharged,
provided that it shall have received  notice from the trustee or other holder of
the prior lien securing the same that such trustee or other  holder,  on receipt
of the prior  lien bonds  held by the  Trustee,  will cause the prior lien to be
satisfied  and  discharged  of record  and, in such  event,  the  Trustee  shall
surrender  any prior lien  bonds  held by it  subject to this  Article XI to the
trustee or other holder of the prior lien  securing  the same for  cancellation;
provided that if all of the property  subject to the prior lien  securing  prior
lien bonds deposited with the Trustee, shall have been released from the lien of
this Indenture,  such prior lien bonds as shall thereupon cease to be prior lien
bonds shall be  surrendered  forthwith  by the  Trustee to the Company  upon the
written  order of its  President  or a  Vice-President  or its  Treasurer  or an
Assistant Treasurer.

     SECTION 57. Upon the  occurrence  of any  completed  default  specified  in
Section 72 hereof,  the Trustee may  exercise any and all rights of a bondholder
with  respect  to the  prior  lien  bonds  then held by it or may take any other
action  which shall in its  judgment be  desirable  or necessary to avail of the
security created for such prior lien bonds by the prior liens securing the same.
The Trustee  shall be  reimbursed  from the trust  estate for all expenses by it
properly  incurred by reason of any such action taken without  negligence or bad
faith,  with interest upon all such  expenditures at the rate of five per centum
(5%) per annum;  and the  amount of such  expenses  and  interest  shall,  until
repaid,  constitute a lien upon the mortgaged and pledged  property prior to the
lien of the bonds and coupons issued hereunder.

                                  ARTICLE XII.

                        REDEMPTION OR PURCHASE OF BONDS.

     SECTION 58.  Such of the bonds of any series  issued  hereunder  as are, by
their  terms,  redeemable  before  maturity  may,  at the option of the  Company
evidenced  by a  resolution,  be redeemed at such times,  in such amounts and at
such prices as may he specified therein and in accordance with the provisions of
the three next succeeding Sections numbered from 59 to 61, both inclusive.

     SECTION  59. In case of a  redemption  of a part only of any series of said
bonds,  the  particular  serial  numbers of the coupon bonds  (including  serial
numbers of coupon bonds reserved for fully  registered  bonds of such series) so
to be redeemed shall be selected by the Trustee by lot, according to such method
as it shall  deem  proper  in its  discretion.  Notice  of  intention  to redeem
(including in case a part only of the bonds of any  particular  series are to be
redeemed,  the numbers of the bonds to be redeemed in whole or in part) shall be
given,  by or on behalf of the Company,  by publication  in one daily  newspaper
printed in the English language and published and of general  circulation in the
Borough of Manhattan,  The City of New York, and in one daily newspaper  printed
in the English  language and published and of general  circulation in each other
city (if any) where the  interest on or principal of the bonds to be redeemed is
payable,  for such  period of time  before the date fixed for  redemption  as is
specified  in  Section  19 hereof as to bonds of the 1970  Series  and as to the
bonds of any other series for such periods as may be fixed for the bonds of such
other series by the supplemental indenture establishing such series of bonds, or
if no such  period be fixed,  then at least once in each of four (4)  successive
calendar  weeks (on any secular day of such  calendar week which need not be the
same day in each week)  immediately  preceding the date fixed for redemption.  A
copy of such  notice  shall also be mailed by or on behalf of the  Company,  not
less than twenty (20) days before the date fixed for redemption,  to each holder
of any fully  registered  bond or of any coupon bond  registered as to principal
which  is to be  redeemed,  at his  last  address,  if any,  appearing  upon the
registry  books,  but such  mailing  shall not be a condition  precedent to such
redemption  and failure so to mail any such notice shall not affect the validity
of the proceedings for the redemption of such bonds.

     SECTION  60. In the event that the  Company  shall  complete  the giving of
notice by publication  of its intention to redeem any bonds so  redeemable,  the
Company shall, and it hereby covenants that it will, on or before the redemption
date  specified  in  such  notice,  deposit  with  the  Trustee  a sum of  money
sufficient  to redeem  all such  bonds so to be  redeemed  on such  date  and/or
irrevocably  direct the Trustee to apply from money held by it  available  to be
used for the  redemption  of bonds,  a sum of money  sufficient  to redeem  such
bonds.  If the Company shall fail so to deposit or direct the application of the
money for the  redemption  of said bonds and such failure  shall  continue for a
period of ten days after the redemption date, such failure, so continued,  shall
constitute a completed default under this Indenture and the said bonds so called
for  redemption  shall  thereupon  immediately  become due and payable,  and the
holders of said bonds shall be  entitled  to receive  and the  Company  shall be
obligated to pay the  redemption  price of said bonds and  thereupon and without
the lapse of any period of time all the  remedies  provided  for in Article  XIV
hereof  with  respect  to a  default  in  the  payment  of  principal  of  bonds
outstanding hereunder shall be available to and enforceable by the Trustee.

     SECTION 61. All moneys  deposited by the Company with the Trustee under the
provisions of this Article XII for the  redemption of bonds or which the Company
directs  shall be  applied  by the  Trustee to the  redemption  of bonds  shall,
subject to the provisions of Section 130 hereof, be held by the Trustee in trust
for account of the holders of the bonds so to be redeemed,  and shall be paid to
them respectively,  upon presentation and surrender of said bonds in bearer form
or if  registered,  accompanied  by a written  instrument  of  transfer  in form
approved by the Company duly  executed by the  registered  holder or by his duly
authorized attorney,  with all unmatured coupons, if any,  appertaining thereto.
Coupons  maturing on or prior to the  redemption  date shall  remain  payable in
accordance with their terms.  On and after such  redemption  date, if the moneys
for the  redemption  of the bonds to be redeemed  shall have been  deposited  or
directed to be applied as aforesaid, such bonds shall cease to bear interest and
the coupons for interest,  if any,  maturing  subsequent to the redemption  date
shall be void.

     If any serial  number shall be drawn by the Trustee at any selection by lot
as in Section 59 hereof provided for, which is reserved for any fully registered
bond of a denomination  larger than One thousand  dollars  ($1,000),  such fully
registered  bond shall be presented  properly  endorsed for transfer at or after
the date fixed for the redemption of said bonds so drawn for redemption, and the
payment with  respect to said bond shall be made upon  surrender of said bond so
endorsed;  and coupon bonds or fully registered bonds for the unpaid balance, if
any, of the  principal  amount of the fully  registered  bond so  presented  and
surrendered  shall be executed by the Company and authenticated and delivered by
the  Trustee  without  charge  therefor.  On and after  the date  fixed for such
redemption,  interest  shall  be  payable  only on the  portion  of  said  fully
registered  bond not so  called  for  redemption  and only  such  portion  shall
continue to be entitled to the benefit of the lien of this Indenture.

     SECTION 62. At any time,  upon the  request of the  Company,  expressed  by
resolution,  the Trustee shall,  to the extent that such bonds are available for
such purchase,  apply all or any part of the cash held by it under any provision
of this  Indenture  (except cash  deposited  under the  provisions of Section 20
hereof or under any like devices for the  retirement  of bonds and except moneys
deposited for the payment or redemption of a particular  series of bonds) or any
cash deposited with it by the Company for the purpose,  to the purchase of bonds
then  outstanding  hereunder of such series as the Company may  designate.  Such
purchase  shall be at public or private sale, as the Trustee may  determine,  at
the lowest prices at which such bonds can be obtained, not exceeding the current
redemption  price of such  bonds as shall be by their  terms  redeemable  before
maturity,  or at not more than one  hundred  and five per  centum  (105%) of the
principal of bonds not so redeemable,  plus accrued interest.  The Company shall
have  the  right  to  tender  bonds  for  sale by it to the  Trustee  under  the
provisions of this Section. Before making any such purchase the Trustee may, and
upon request of the Company,  shall, by notice published once in each of two (2)
successive  calendar weeks (on any secular day in the week which need not be the
same day in each week) in one daily  newspaper,  printed in the English language
and published and of general  circulation in the Borough of Manhattan,  The City
of New York,  advertise for written proposals (to be received by it on or before
a specified  date) to sell to it on or before a subsequent  specified date bonds
of the series  designated  by the Company then  outstanding  hereunder;  and the
Trustee,  to the  extent,  as nearly as is  possible,  of such funds then in its
hands and requested by the Company to be so applied, shall purchase the bonds so
offered at the price or prices most  favorable  to the Company,  and  reasonable
notice  shall be mailed by the  Trustee  to the  holder or  holders of the bonds
whose  proposals may be accepted.  Should there be two or more  proposals at the
same price  aggregating more than the amount which the Trustee has available for
investment,  after having  accepted all proposals at lower  prices,  the Trustee
shall  invest the amount so  available,  by  acceptance  of  proposals  so as to
acquire the  requisite  amount of bonds at the lowest cost  possible,  provided,
however,  that to the extent  consistent  with the acquisition of such amount of
bonds at the lowest cost possible the Trustee shall (a) in accepting  proposals,
give  preference  to such  proposals as are subject to  acceptance  of a portion
thereof as against  proposals  not  subject to such  acceptance,  (b) as between
proposals subject to acceptance of a portion thereof,  accept the same pro rata,
and (c) as between  proposals  not  subject to such  acceptance,  select by lot,
according to such method as the Trustee shall deem proper in its discretion, the
proposals  to be  accepted.  The  Trustee may also in its  discretion,  and upon
request of the Company so to do, shall invite  offers of bonds for sale to it in
any other usual manner.  The Trustee may reject any or all proposals in whole or
in part if it can at the time of opening said  proposals  purchase the requisite
amount of such bonds or any part  thereof  from the Company or others at a lower
price than it could by accepting said proposals.  All offers by holders shall be
subject to acceptance of a portion  thereof  unless  otherwise  expressed in the
offers and all advertisements for written proposals shall so state.

     The Company shall pay to the Trustee,  on demand, the amount of accrued and
unpaid interest upon all bonds purchased pursuant to this Section or redeemed in
the manner and as provided in this Article XII.

     SECTION 63. All bonds issued hereunder paid,  retired or redeemed under any
of the  provisions of this  Indenture or purchased by the Trustee as provided in
Section  62 hereof and all  appurtenant  coupons,  if any,  shall  forthwith  be
canceled  by the  Trustee,  and at the  request of the  Company  the Trustee may
cremate the same and deliver to the Company a certificate of such cremation.

                                  ARTICLE XIII.

         POSSESSION, USE AND RELEASE OF MORTGAGED AND PLEDGED PROPERTY.

     SECTION 64. Unless the Company is in default in the payment of the interest
on any of the bonds then  outstanding  hereunder or one or more of the completed
defaults  specified in  Section 72 hereof shall have occurred and be continuing,
the  Company  shall be suffered  and  permitted  to  possess,  use and enjoy the
mortgaged and pledged property (except such cash as is expressly  required to be
deposited  with the  Trustee  and  except,  to the extent  not herein  otherwise
provided,  such  securities as are expressly  required to be deposited  with the
Trustee), and to receive, use and dispose of the tolls, rents, revenues, issues,
earnings, income, product and profits thereof, with power in the ordinary course
of business freely and without let or hindrance on the part of the Trustee or of
the  bondholders,  to use,  consume  and dispose of  supplies  acquired  for the
purpose and except as herein otherwise expressly provided,  to the contrary,  to
exercise any and all rights under choses in action,  contracts,  franchises  and
claims.

     SECTION 65. Unless the Company is in default in the payment of the interest
on any of the bonds then  outstanding  hereunder or one or more of the completed
defaults  specified in Section 72 hereof shall have occurred and be  continuing,
the  Company  may at any time and from  time to time,  without  any  release  or
consent by the Trustee, or accountability thereto for any consideration received
by the Company:

          (1) sell or otherwise dispose of, free from the lien of this Indenture
     any machinery,  equipment, tools, implements or other property, which shall
     have become old, inadequate,  obsolete,  worn out or unfit or unadapted for
     use in the  operations  of the  Company,  upon  replacing  the  same  by or
     substituting  for the same other  property (not then within the term funded
     property) of at least equal value to that of the property sold or otherwise
     disposed of and subject to no liens prior hereto  except liens to which the
     property sold or otherwise disposed of was subject;

<PAGE>

          (2) cancel or make changes or alterations in or  substitutions  of any
     and all contracts, leases and/or right of way grants;

          (3)  surrender  or assent to the  modification  of any  right,  power,
     franchise,  license,  governmental  consent or permit under which it may be
     operating,  provided that such surrender or modification is, in the opinion
     of the Board of  Directors of the Company  (such  opinion to be stated in a
     resolution to be filed with the  Trustee),  desirable in the conduct of the
     business  of the  Company  and does not  impair the  security  of the bonds
     outstanding hereunder.

     SECTION  66. A.  Unless the  Company  is in  default in the  payment of the
interest on any bonds then outstanding hereunder or one or more of the completed
defaults  specified in Section 72 hereof shall have occurred and be  continuing,
the Company may obtain the release of any of the mortgaged and pledged property,
except cash then held by the Trustee (provided,  however,  that prior lien bonds
deposited  with the Trustee shall not be released  except as provided in Article
XI hereof, and that, at the option of the Company, the mining properties and the
land and  buildings  located at West Tenth  Street  and White  River  Boulevard,
Indianapolis,  Indiana,  owned by the Company at the date hereof may be released
as provided  hereafter in paragraph B of this Section 66), and the Trustee shall
release the same from the lien hereof  upon the  application  of the Company and
receipt by the Trustee of

          (1) a resolution  describing in  reasonable  detail the property to be
     released  and  requesting  such  release and  stating  that the Company has
     disposed of,  exchanged or dedicated,  or agreed to dispose of, exchange or
     dedicate the same;

          (2) a  Treasurer's  certificate  stating  that the  Company  is not in
     default  in the  payment  of the  interest  on any bonds  then  outstanding
     hereunder and that none of the completed  defaults  specified in Section 72
     hereof has occurred and is continuing;

          (3) if the fair value of the property to be released,  as set forth in
     the certificate  required by this subdivision (3), is equal to or more than
     the greater of (i) Twenty-five  thousand Dollars  ($25,000) or (ii) one per
     centum (1%) of the aggregate principal amount of the bonds outstanding, and
     if the fair value of the property to be released and of all other  property
     released since the  commencement of the current calendar year, as set forth
     in the certificates  required by this subdivision (3), is ten per centum or
     more of the aggregate  principal  amount of bonds at the time  outstanding,
     then  an  independent  engineer's  certificate;   otherwise  an  engineer's
     certificate;   such  engineer's   certificate  or  independent   engineer's
     certificate,  as the case may be,  shall be made and  dated  not more  than
     ninety (90) days prior to the date of such application and shall state: (a)
     the fair  value,  in the  opinion of the  signers,  of the  property  to be
     released;  (b) what  portion,  if any,  of the  property  to be released is
     funded  property;  (c) that such  release is in the  opinion of the signers
     desirable in the conduct of the business of the Company;  and (d) that such
     release will not impair the security under this Indenture in  contravention
     of the provisions hereof;

<PAGE>

          (4) an  amount  in  cash,  to be  held by the  Trustee  as part of the
     mortgaged and pledged property,  equivalent to the amount, if any, by which
     the then fair value of the  property to be released,  as'  specified in the
     engineer's  certificate or in the independent engineer's  certificate,  as
     the case  may be,  provided  for in  subdivision  (3)  above,  exceeds  the
     aggregate (subject to the limitations  hereinafter  contained in clause (c)
     of this subdivision  with respect to obligations  secured by purchase money
     mortgages upon the property released) of the following items:

               (a) the principal  amount of any obligations  secured by purchase
          money mortgage upon the property released delivered to the Trustee, to
          be held as part of the mortgaged and pledged property; and

               (b) one hundred and  forty-two and  six-sevenths  per centum (142
          6/7%) of the  principal  amount  of each bond or fraction of a bond to
          the authentication and delivery of which the Company shall be entitled
          under  any of the  provisions  of this  Indenture  (other  than  those
          contained  in  Section  32  hereof  and  except  that  against   bonds
          authenticable under Section 31 hereof,  credit may be taken under this
          subdivision  in an amount equal only to one hundred per centum  (100%)
          of the principal  amount of such bonds) by virtue of  compliance  with
          all  applicable  provisions  of this  Indenture  (except any  earnings
          requirements   or  net   earnings   certificates)   relating  to  such
          authentication  and delivery but which have not been authenticated and
          delivered; provided, however, that any application for such release of
          property  shall,  to the  extent,  and to the  extent  only,  that the
          property so to be released is (i) funded  property,  or (ii)  property
          the  expenditures for which have been made the basis of a credit under
          Section 41 hereof,  operate as a waiver by the Company of the right to
          the  authentication and delivery of each such bond or fraction thereof
          on the basis of which  right such  property is  released;  and to such
          extent  no  such  bond  or   fraction   thereof  may   thereafter   be
          authenticated  and  delivered  hereunder  and,  to  such  extent,  any
          property  additions  which  were  the  basis  of  such  right  to  the
          authentication  and  delivery of bonds so waived shall have the status
          of funded property; and

               (c) the principal  amount of any obligations  secured by purchase
          money  mortgage upon the property to be released  and/or any amount in
          cash, that is evidenced to the Trustee by a certificate of the trustee
          or other  holder of a prior lien or a lien prior  hereto,  as the case
          may be,  stating  that such  trustee or other  holder has received and
          holds the same in accordance with the provisions of such prior lien or
          lien prior hereto in consideration for the release of such property or
          any part thereof from such prior lien or lien prior hereto;

     provided,   however,   that  for  the  purposes  of  this  subdivision  (4)
     obligations  secured by purchase  money  mortgages  upon the property to be
     released shall be included in determining such aggregate only to the extent
     of a sum which shall not exceed  seventy per centum (70%) of the fair value
     of the property  released and only if the principal  amount of the purchase
     money  obligations  so included plus the  principal  amount of all purchase
     money  obligations  then held by the  Trustee  or by the  trustee  or other
     holder of a prior lien or lien prior  hereto under the  provisions  of this
     subdivision (4) and theretofore  included in making the computation  herein
     provided for shall not exceed five per centum (5%) of the principal  amount
     of all bonds then outstanding under this Indenture;

          (5) in case any  obligations  secured by purchase  money mortgage upon
     the  property to be released  are  included in the  consideration  for such
     release and are  delivered to the Trustee or to the trustee or other holder
     of a prior lien or a lien prior  hereto in  connection  with any release of
     such  property,  an opinion  of counsel to the effect  that in his or their
     opinion,  such  obligations  are valid  obligations,  and that any purchase
     money  mortgage  securing the same is sufficient to afford a valid purchase
     money  lien upon the  property  to be  released,  subject  to no lien prior
     thereto except such liens, if any, as shall have existed thereon just prior
     to such release as liens prior to the lien of this Indenture.

     In case the  release  of  property  is in whole or in part,  based upon the
right to the authentication and delivery of bonds (as permitted under clause (4)
(b) of this Section) the Company,  except as otherwise in this Section provided,
shall comply with all applicable  provisions of this Indenture  relating to such
authentication and delivery;  provided,  however, that in no such case shall the
Company be required to deliver to the Trustee any resolution or document such as
is described in subdivisions (1), (2), (6) and (10) of Section 30 hereof or such
parts of the opinion as are described in clause (e) of  subdivision  (7) of said
Section 30 or such parts of the opinions  described in  subdivision  (7) of said
Section 30 as relate solely to the authorization of the issuance of bonds of the
Company by  governmental  authorities  or by the Company or to the  supplemental
indenture  described  in  subdivision  (10) of Section 30, or to comply with the
provisions of Section 29 hereof;  and provided further,  that if the property to
be released  is not funded  property  (i) the  Company  shall not be required to
comply with the  provisions  of Section 28 hereof,  and (ii) that portion of the
opinion of counsel required by, clause (d) of subdivision (7) of said Section 30
may state that the  property  additions  made the basis of the  application  for
release are subject to prior liens which  secure prior lien bonds which have not
ceased to be outstanding under the provisions of Section 6 hereof;  and provided
further,  that if any such  application  for  release  on the basis of  property
additions  shall  not  operate  as a waiver by the  Company  of the right to the
authentication  and delivery of bonds on the basis of such  property  additions,
then none of the  computations set forth in subdivision (II) of Section 4 hereof
need be made  and  provided  further  that the  cost of any  property  additions
received or to be received by the Company in whole or in part, as  consideration
in  exchange  for the  property to be  released  shall for all  purposes of this
Indenture be deemed to be the amount stated in the engineer's  certificate or in
the  independent  engineer's  certificate,  as the case may be,  provided for in
subdivision  (3) of this  Section  to be the fair  value of the  property  to be
released  (a)  plus the  amount  of any  cash or the  fair  value  of any  other
consideration  to be  stated  in  such  engineer's  certificate  or  independent
engineer's certificate,  as the case may be, paid and/or delivered or to be paid
and/or  delivered by the Company in connection  with such exchange as additional
consideration for such property  additions or (b) less the amount of any cash or
the fair value of any other  consideration,  which  shall also be stated in such
engineer's  certificate or independent engineer's  certificate,  as the case may
be,  received or to be received by the Company in connection  with such exchange
in addition to such property additions.

     Any prior lien bonds deposited with the Trustee  pursuant to the provisions
of this  Section  shall be held by the  Trustee  subject  to the  provisions  of
Article XI hereof and any moneys and/or purchase money obligations  and/or other
property and/or the proceeds of any thereof and/or substitutes therefor received
by the Trustee  under this Section  shall be held as part of the  mortgaged  and
pledged property and such moneys and/or purchase money obligations shall be paid
over, with drawn,  used or applied,  in the manner,  to the extent,  and for the
purposes and subject to the conditions provided in Section 68 hereof.

     B. Unless the  Company is in default in the payment of the  interest on any
bonds  then  outstanding  hereunder  or one or  more of the  completed  defaults
specified  in  Section 72 hereof  shall have  occurred  and be  continuing,  the
Company  may obtain  the  release,  as a whole,  of the coal  mining  properties
located in Sullivan County, Indiana described in Part II of the granting clauses
hereof  and/or of the coal mining  properties  located in Pike  County,  Indiana
described  in Part  III of the  granting  clauses  hereof,  and/or  the land and
buildings located at West Tenth Street and White River Boulevard,  Indianapolis,
Indiana,  and the Trustee  shall  release the same from the lien hereof upon the
application of the Company and receipt by the Trustee of

          (i) a resolution  describing in  reasonable  detail the property to be
     released  and  requesting  such  release and  stating  that the Company has
     disposed of or exchanged, or agreed to dispose of or exchange the same;

          (ii) a  Treasurer's  certificate  as  described  in clause (2) of this
     Section; and

          (iii)  cash in the  amount of  $543,430.65  with  respect  to the coal
     mining  properties  located in  Sullivan  County,  Indiana,  or cash in the
     amount of $38,018.05 for the coal mining properties located in Pike County,
     Indiana,  or cash in the  amount of  $17,500  with  respect to the land and
     buildings   located  at  West  Tenth  Street  and  White  River  Boulevard,
     Indianapolis,  Indiana,  to be held by the Trustee as part of the mortgaged
     and pledged property and to be paid over,  withdrawn,  used or applied,  in
     the  manner,  to the  extent,  and  for the  purposes  and  subject  to the
     conditions provided in Section 68 hereof.

     SECTION 67. Unless the Company is in default in the payment of the interest
on any bonds then outstanding hereunder or one or more of the completed defaults
specified  in  Section 72 hereof  shall have  occurred  and be  continuing,  the
Trustee shall  whenever from time to time requested by the Company (such request
to be evidenced by a resolution)  and without  requiring  compliance with any of
the  provisions  of Section 66 hereof,  release from the lien hereof real estate
unimproved  for use in the  conduct  of the  business  of the  Company,  and the
retention  of which is, in the opinion of the Board of Directors of the Company,
no longer desirable in the conduct of the business of the Company,  provided the
aggregate  value of such real estate so released  without such compliance in any
period of twelve (12)  consecutive  calendar  months shall not exceed the sum of
Fifty  thousand  dollars  ($50,000).  Prior to the granting of any such release,
there  shall be  delivered  to the  Trustee  an  engineer's  certificate  (or an
independent  engineer's  certificate if an  independent  engineer's  certificate
would be required under  subdivision (3) of Section 66, if the release was being
applied  for under  Section  66)  which  shall  state (a) the fair  value in the
opinion of the signers of the property to be released, (b) what portion, if any,
of the property to be released is funded property,  (c) that the release thereof
will not impair  the  security  under this  Indenture  in  contravention  of the
provisions  hereof, and (d) such other facts required to be known by the Trustee
as a  condition  precedent  to  action by it under  this  Section.  The  Company
covenants that it will deposit with the Trustee,  to be dealt with in the manner
provided in Section 68 hereof,  the  consideration,  if any, received by it upon
the sale or other disposition of any such real estate so released (to the extent
that the same  shall not have been paid or  delivered  to the  trustee  or other
holder  of  a  mortgage  or  other  instrument  constituting  a  prior  lien  or
constituting a lien prior to the lien of this  Indenture in accordance  with the
provisions thereof and a Treasurer's  certificate to that effect shall have been
furnished to the Trustee).

     SECTION 68. (I) Any money received in  consideration  of any release by the
Trustee under this Article XIII,  including  payment on account of the principal
of any obligations secured by purchase money mortgage so received, shall be paid
to and held by the Trustee; and, unless the Company is in default in the payment
of the  interest on any bonds then  outstanding  hereunder or one or more of the
completed  defaults  specified in Section 72 hereof  shall have  occurred and be
continuing, such money and any other money which by the provisions hereof are to
be applied as in this Section provide4 (subject to the provisions of paragraph B
of Section 69 hereof),

          (1) may be  withdrawn  from time to time by the  Company  in an amount
     equal to one hundred and forty-two and six-sevenths  per centum  (142-6/7%)
     of the  principal  amount  of  each  bond  or  fraction  of a  bond  to the
     authentication  and delivery of which the Company  shall be entitled  under
     any of the  provisions  of this  Indenture  (other than those  contained in
     Section 32 hereof and except that against bonds authenticable under Section
     31 hereof, money may be withdrawn under this subdivision in an amount equal
     only to one  hundred  per  centum  (100%) of the  principal  amount of such
     bonds) by virtue  of  compliance  with all  applicable  provisions  of this
     Indenture (except any earnings  requirements or net earnings  certificates)
     relating  to such  authentication  and  delivery  but  which  have not been
     authenticated and delivered;  provided,  however, that any request for such
     withdrawal of money shall, to the extent,  and to the extent only, that the
     money to be so withdrawn is funded cash, operate as a waiver by the Company
     of the  right to the  authentication  and  delivery  of each  such  bond or
     fraction thereof on the basis of which right such funded cash is withdrawn;
     and to such  extent no such bond or  fraction  thereof  may  thereafter  be
     authenticated  and delivered  hereunder  and, to such extent,  any property
     additions  which  were the basis of such  right to the  authentication  and
     delivery of bonds so waived shall have the status of funded property; or

<PAGE>

          (2) may,  upon the request of the  Company,  evidenced by a resolution
     delivered to the Trustee,  be used by the Trustee for the purchase of bonds
     issued hereunder in accordance with the provisions of Section 62 hereof; or

          (3) may,  upon the request of the Company,  evidenced by a resolution
     delivered to the Trustee,  be applied by the Trustee to the  redemption  of
     any  bonds  issued  hereunder  as  are by  their  terms  redeemable  before
     maturity,  of  such  series  as may be  designated  by  the  Company,  such
     redemption to be in the manner and as provided in Article XII hereof.

     Such moneys shall, from time to time, be paid out or used or applied by the
Trustee,  as  aforesaid,  upon  the  request  of  the  Company  evidenced  by  a
resolution, and upon receipt by the Trustee of a Treasurer's certificate stating
that the Company is not in default in the  payment of the  interest on any bonds
then outstanding  hereunder and that none of the completed defaults specified in
Section 72 hereof has occurred and is continuing. In case the withdrawal of cash
is, in whole or in part, based upon the right to the authentication and delivery
of bonds (as  permitted  under  subdivision  (1) of this  Section)  the Company,
except as otherwise in this Section  provided,  shall comply with all applicable
provisions  of this  Indenture  relating to such  authentication  and  delivery;
provided, however, that in no such case shall the Company be required to deliver
to the Trustee any  resolution or document such as is described in  subdivisions
(1),  (2), (6) and (10) of Section 30 hereof or such parts of the opinion as are
described in clause (e) of  subdivision  (7) of said Section 30 or such parts of
the opinion  described in subdivision (7) of said Section 30 as relate solely to
the  authorization  of the  issuance  of bonds of the  Company  by  governmental
authorities  or by the Company or to the  supplemental  indenture  described  in
subdivision (10) of Section 30, or to comply with any earnings  requirements and
provided  further,  that if the cash to be  withdrawn is not funded cash (i) the
Company  shall not be  required  to comply  with the  provisions  of  Section 28
hereof,  and (ii) that portion of the opinion of counsel  required by clause (d)
of subdivision (7) of said Section 30 may state that the property additions made
the basis of the application for the withdrawal are subject to prior liens which
secure  prior lien  bonds  which  have not  ceased to be  outstanding  under the
provisions  of  Section  6  hereof;  and  provided  further,  that  if any  such
application for withdrawal of cash on the basis of property  additions shall not
operate  as a waiver  by the  Company  of the  right to the  authentication  and
delivery  of bonds on the  basis of such  property  additions,  then none of the
computations set forth in subdivision (H) of Section 4 hereof need be made.

     (II) Any such money  which shall not have been  withdrawn,  used or applied
pursuant to the foregoing provisions of this Section within three (3) years from
the date of  receipt  thereof  by the  Trustee,  shall be used or applied by the
Trustee  (unless  the  Company is in default in the  payment of  interest on any
bonds  then  outstanding  hereunder  or one or  more of the  completed  defaults
specified  in  Section 72 hereof  shall have  occurred  and be  continuing),  as
promptly as the Trustee shall deem  reasonable or desirable,  to the purchase or
redemption  of bonds  in the  manner  provided  in  subdivisions  (2) and (3) of
Section 68 hereof,  except that (a) the Trustee,  in its sole discretion,  shall
determine  whether  and at what  time or  times  bonds  shall  be  purchased  or
redeemed,  (b) the request by the Company  referred to in said  subdivisions (2)
and (3) shall not be  required,  and (c) if more than one series of bonds issued
hereunder shall at the time be outstanding, the Trustee, in its sole discretion,
shall  determine  the  amount  of such cash  which  shall be so  applied  to the
purchase or  redemption  of the bonds of each such  series.  The Company  hereby
authorizes  the Trustee on its behalf to give notice of  intention to redeem any
bonds which are to be  redeemed  pursuant to the  foregoing  provisions,  in the
manner provided by Section 59 hereof.

     Any purchase money mortgage received or to be received by the Trustee under
any of the provisions of this Indenture in  consideration  of the release of any
property by the Trustee  and/or the  obligations  secured by such purchase money
mortgage,  may be  released  upon  payment by the  Company to the Trustee of the
principal of such purchase money  mortgage or any unpaid portion  thereof and/or
of the obligations thereby secured. The Trustee shall be entitled to collect the
principal of and interest on any such  purchase  money  mortgage,  and/or of the
obligations  thereby secured,  as and when the same shall become payable and the
Trustee may take any action  which in its judgment may be desirable or necessary
to avail of the security of such purchase money mortgage.  Unless the Company is
in default in the payment of the  interest on any of the bonds then  outstanding
hereunder  or one or more of the  completed  defaults  specified  in  Section 72
hereof shall have  occurred  and be  continuing,  the  interest  received by the
Trustee  on any such  purchase  money  mortgage  or on the  obligations  thereby
secured shall be paid over to the Company.

     Any  property  acquired  by the  Company to take the place of any  property
released under any  provisions of this Article XIII shall  forthwith and without
further  conveyance  become  subject  to the  lien  of and be  covered  by  this
Indenture  as a part of the  mortgaged  and  pledged  property;  but the Company
shall,  if requested by the  Trustee,  convey the same,  or cause the same to be
conveyed,  to the Trustee as may be so requested by  appropriate  instruments of
conveyance upon the trusts and for the purposes of this Indenture.

     Any bonds issued under this Indenture  deposited with the Trustee  pursuant
to the provisions of this Section shall forthwith be canceled by the Trustee and
at the  request of the  Company  the  Trustee may cremate the same and deliver a
certificate of such cremation to the Company, and any prior lien bonds deposited
with the Trustee pursuant to the provisions of this Section shall be held by the
Trustee subject to the provisions of Article XI hereof.

     SECTION 69. A. Should any of the mortgaged and pledged property be taken by
exercise  of the power of  eminent  domain or should  any  governmental  body or
agency,  at any  time,  exercise  any  right  which it may have to  purchase  or
designate a purchaser of any part of the  mortgaged  and pledged  property,  the
Trustee may release the  property so taken or  purchased,  upon being  furnished
with an opinion of counsel to the effect  that such  property  has been taken by
exercise of the power of eminent domain, or purchased in the exercise of a right
which a  governmental  body or agent had to purchase or designate a purchaser of
the same. The proceeds of all property so taken or purchased  shall be paid over
to the Trustee (unless the same shall have been paid or delivered to the trustee
or other  holder of a mortgage or other lien  constituting  a prior lien or lien
prior  hereto  in  accordance  with the  provisions  thereof  and a  Treasurer's
certificate  to that effect shall have been  furnished to the Trustee),  and, if
paid over to the Trustee hereunder, (a) shall be applied in the manner set forth
in paragraph B of this Section if the  provisions  of said  paragraph B shall be
applicable,  or  (b)  if  the  provisions  of  said  paragraph  B  shall  not be
applicable, shall thereafter be withdrawn, used or applied in the manner, to the
extent and for the purposes and subject to the conditions provided in Section 68
hereof.

     B.  Notwithstanding the provisions set forth in Sections 66 or 68 hereof or
in paragraph A of this Section relating to the withdrawal, use or application of
moneys or other  proceeds paid over to the Trustee,  which  provisions  shall be
inapplicable in the events hereinafter  stated,  should all or substantially all
of the mortgaged and pledged property, or all or substantially all such property
used in the business of generating, manufacturing,  transporting,  transmitting,
distributing  or  supplying  electricity,  be taken by  exercise of the power of
eminent  domain,  or should any  governmental  body or agency exercise any right
which it may have to purchase or  designate a purchaser  of the same,  or should
such property be sold to any  governmental  body or agency,  then, and in any of
such events,  the Company shall have the right to redeem and shall promptly take
all steps as shall be  necessary  to redeem  all bonds  outstanding  under  this
Indenture at the principal  amounts thereof and accrued  interest to the date of
redemption  together  with the  premiums  specified  in Section  19 hereof  with
respect to the bonds of the 1970 Series, and with such premiums,  if any, as may
be provided,  in the  supplemental  indenture  establishing  any other series of
bonds  secured  hereby,  for  the  redemption  of  such  bonds  pursuant  to the
provisions of this paragraph B. The Company covenants that in any of such events
it will deposit with the Trustee such an amount in cash,  if any, as, when added
to any moneys  then held by the Trustee  hereunder,  shall be required to redeem
all bonds outstanding under this Indenture, and the Trustee shall forthwith take
such steps as may be necessary to effect such redemption and shall apply and use
for such  redemption  the moneys so deposited with or held by it. If the Company
fails to take any steps necessary to effect the prompt redemption of said bonds,
the Trustee shall have the power in the name of the Company,  or  otherwise,  to
take such steps.  If in any of the events  described  in this  paragraph B there
shall be deposited  with the Trustee any moneys or other  proceeds which are not
required for the redemption of the bonds outstanding hereunder,  such cash shall
(subject  to  the  Trustee's   lien  thereon  for  its  charges,   expenses  and
disbursements) be forthwith paid over by the Trustee to the Company.

     SECTION 70. In case the mortgaged  property shall be in the possession of a
receiver or trustee,  lawfully appointed, the powers hereinbefore conferred upon
the Company with respect to the sale or other  disposition  of the mortgaged and
pledged  property may be  exercised,  with the approval of the Trustee,  by such
receiver  or  trustee,  notwithstanding  the  Company  may be in default and any
request,  certificate or appointment  made or signed by such receiver or trustee
for such  purposes  shall be as effective as if made by the Company or its Board
of Directors or any of its officers or appointees in the manner herein provided;
and if the Trustee shall be in possession of the mortgaged and pledged  property
under any provision of this Indenture,  then such powers may be exercised by the
Trustee  in its  discretion  notwithstanding  the  Company  may  be in  default.
Notwithstanding  the  existence  of a default in the  payment of interest on any
bonds  then  outstanding  hereunder  or the  existence  of a  completed  default
specified in Section 72 hereof, the Trustee may release from the lien hereof any
part of the mortgaged and pledged  property upon  compliance with the conditions
specified in this Article in respect  thereof,  if the Trustee in its discretion
shall deem such release for the best interests of the bondholders.

<PAGE>

     SECTION 71. No purchaser in good faith of property  purporting to have been
released  hereunder  shall be bound to ascertain the authority of the Trustee to
execute the release,  or to inquire as to any facts  required by the  provisions
hereof for the exercise of this authority; nor shall any purchaser or grantee of
any property or rights permitted by this Article to be sold, granted,  exchanged
or otherwise  disposed of, be under  obligation to ascertain or inquire into the
authority  of the  Company  to make  any such  sale,  grant,  exchange  or other
disposition.

                                  ARTICLE XIV.

                REMEDIES OF TRUSTEE AND BONDHOLDERS UPON DEFAULT.

     SECTION 72. Upon the occurrence of any one or more of the following  events
(herein called "completed defaults"), viz.:

          (a) Default in the payment of the principal of any bond hereby secured
     when the same shall have  become due and  payable,  whether at  maturity as
     therein expressed or by declaration, or otherwise; or

          (b)  Default  continued  for  sixty  (60) days in the  payment  of any
     interest upon any bond hereby secured; or

          (c) Default in the payment of any interest upon or principal  (whether
     at maturity as therein  expressed or by  declaration,  or otherwise) of any
     outstanding  prior lien bonds continued beyond the period of grace, if any,
     specified in the prior lien securing the same if the Company shall not have
     complied  with the  provisions of Section 49 hereof to the extent that such
     provisions may be applicable thereto; or

          (d) By decree of a court of competent  jurisdiction  the Company shall
     be  adjudicated a bankrupt,  or an order shall be made approving a petition
     filed  by  any   creditors   or   stockholders   of  the  Company   seeking
     reorganization or readjustment of the Company under the federal  bankruptcy
     laws or other law or statute  of the United  States of America or any State
     thereof, or, by order of a court of competent jurisdiction,  a trustee or a
     receiver or receivers shall be appointed of all or substantially all of the
     property  of the  Company  or of all or any  part  of the  property  of the
     Company subject to the lieu of this Indenture, and any such decree or order
     shall have  continued  unstayed on appeal or otherwise  and in effect for a
     period of sixty (60) days; or

          (e) The Company  shall admit in writing its inability to pay its debts
     generally as they mature or shall file a petition in  voluntary  bankruptcy
     or shall make any general  assignment for the benefit of creditors or shall
     consent to the  appointment  of a receiver or trustee of all or any part of
     its  property,  or shall  file in any court of  competent  jurisdiction,  a
     petition or answer seeking reorganization or readjustment under the federal
     bankruptcy  laws or other law or statute of the United States of America or
     any State  thereof,  or shall  file a  petition  to take  advantage  of any
     debtors' act; or

<PAGE>

          (f) Default  continued for sixty (60) days after notice to the Company
     from the Trustee in the  performance  of any other  covenant,  agreement or
     condition  contained herein or in any indenture  supplemental  hereto or in
     any bond secured hereby;

the  Trustee  may,  and upon  written  request of the  holders of a majority  in
principal  amount of the bonds then outstanding  hereunder,  shall, by notice in
writing  delivered  to the  Company,  declare the  principal of all bonds hereby
secured then  outstanding and the interest  accrued thereon  immediately due and
payable,  and  such  principal  and  interest  shall  thereupon  become  and  be
immediately due and payable; subject, however, to the right of the holders of at
least a majority in principal amount of a1l outstanding bonds, by written notice
to the  Company  and to the  Trustee to annul such  declaration  and destroy its
effect  at any time  before  any sale  hereunder,  if  before  any such sale all
agreements  with  respect to which  default  shall have been made shall be fully
performed or made good,  and all arrears of interest upon all bonds  outstanding
hereunder and the reasonable expenses and charges of the Trustee, its agents and
attorneys,  and all other indebtedness  secured hereby,  except the principal of
any bonds not then due by their terms and  interest  accrued on such bonds since
the last interest  payment date,  shall be paid, or the amount  thereof shall be
paid to the Trustee for the benefit of those entitled thereto.

     SECTION 73. The Trustee shall, within 90 days after the occurrence thereof,
give to the bondholders,  in the manner and to the extent provided in subsection
(c) of Section 53 hereof,  notice of all defaults  known to the Trustee,  unless
such  defaults  shall have been cured before the giving of such notice (the term
"defaults"  for the  purposes of this  Section  being  hereby  defined to be the
events  specified in subdivisions  (a), (b), (c), (d), (e) and (f) of Section 72
hereof not including any periods of grace provided for in said  subdivisions and
irrespective  of whether the  Trustee  has given the notice  referred to in said
subdivision  (f));  and  provided  that,  except in the case of  default  in the
payment of the  principal of or interest on any of the bonds,  or in the payment
of any sinking or purchase  fund  instalment,  the Trustee shall be protected in
withholding such notice if and so long as the board of directors,  the executive
committee,  or a trust committee of directors and/or responsible officers of the
Trustee in good faith  determine  that the  withholding of such notice is in the
interests of the bondholders.

     SECTION 74. Upon the  occurrence  of one or more  completed  defaults,  the
Company,  upon demand of the Trustee,  shall forthwith  surrender to the Trustee
the  actual  possession  of,  and it shall be lawful  for the  Trustee,  by such
officer or agent as it may appoint,  to take possession of all the mortgaged and
pledged  property (with the books,  papers and accounts of the Company),  and to
hold,  operate  and manage the same,  and from time to time to make all  needful
repairs and such extensions,  additions and improvements as to the Trustee shall
seem wise; and to receive the tolls, rents, revenues,  issues, earnings, income,
products  and profits  thereof,  and out of the same to pay all proper costs and
expenses  of so taking,  holding and  managing  the same,  including  reasonable
compensation  to the  Trustee,  its agents and  counsel,  and any charges of the
Trustee hereunder,  and any taxes and assessments and other charges prior to the
lien of this  Indenture  which  the  Trustee  may  deem it wise to pay,  and all
expenses of such repairs, extensions,  additions and improvements,  and to apply
the  remainder  of the  moneys  so  received  by  the  Trustee,  subject  to the
provisions of Section 83 hereof with respect to extended, transferred or pledged
coupons or claims for  interest,  first to the  payment  of the  instalments  of
interest which are due and unpaid, in the order of their maturity,  and next, if
the  principal of any of said bonds is due, to the payment of the  principal and
accrued  interest thereon at the same rate as is expressed in the bonds pro rata
without any preference or priority whatever, except as' aforesaid.  Whenever all
that is due upon such bonds and  instalments  of  interest  and under any of the
terms of this  Indenture  shall have been paid and all defaults  made good,  the
Trustee shall  surrender  possession to the Company,  its successors or assigns;
the same right of entry, however, to exist upon any subsequent default.

     SECTION 75. Upon the occurrence of one or more completed  defaults it shall
be lawful for the Trustee,  by such officer or agent as it may appoint,  with or
without entry, to sell all the mortgaged and pledged property as an entirety, or
in such  parcels as the holders of a majority in  principal  amount of the bonds
outstanding  hereunder  shall in  writing  request,  or in the  absence  of such
request,  as the Trustee may determine,  at public  auction,  at some convenient
place in Indianapolis, Indiana, or such other place or places as may be required
by law,  having first given notice of such sale by  publication  in at least one
daily newspaper of general circulation,  published in Indianapolis,  Indiana (if
there be such a daily  newspaper),  at least once in each of four (4) successive
calendar  weeks (on any secular day of each such calendar  week) next  preceding
such sale, and by like publication in at least one daily newspaper published and
of general  circulation  in the Borough of Manhattan,  The City of New York, and
any other  notice which may be required by law, and from time to time to adjourn
such sale in its discretion by announcement at the time and place fixed for such
sale  without  further  notice,  and upon such sale to make and  deliver  to the
purchaser or purchasers a good and sufficient deed or deeds for the same,  which
sale shall be a perpetual  bar,  both at law and in equity,  against the Company
and all persons,  firms and corporations  lawfully claiming or who may claim by,
through or under it.

     SECTION 76. In case of the breach of any of the  covenants or conditions of
this Indenture,  the Trustee shall have the right and power to take  appropriate
judicial  proceedings  for the  enforcement  of its rights and the rights of the
bondholders hereunder. In case of a completed default hereunder, the Trustee may
either  after  entry,  or without  entry,  proceed by suit or suits at law or in
equity  to  enforce  payment  of the bonds  then  outstanding  hereunder  and to
foreclose  this  Indenture and to sell the mortgaged and pledged  property under
the  judgment or decree of a court of  competent  jurisdiction;  and it shall be
obligatory upon the Trustee to take action either by such  proceedings or by the
exercise of its powers with respect to entry or sale upon being  requested so to
do by  the  holders  of a  majority  in  principal  amount  of  the  bonds  then
outstanding hereunder and upon being indemnified, except to the extent that such
indemnity is precluded under the provisions of Sections 97 and 98.

     No remedy by the terms of this Indenture  conferred upon or reserved to the
Trustee is intended to be exclusive of any other remedy, but each and every such
remedy  shall be  cumulative  and shall be in addition to any other remedy given
hereunder or now or hereafter existing at law or in equity or by statute.

<PAGE>

     No delay or  omission  to  exercise  any right or power  accruing  upon any
default  shall  impair  any such  right or power or shall be  construed  to be a
waiver of any such  default or  acquiescence  therein;  and every such right and
power  may be  exercised  from  time  to  time  and as  often  as may be  deemed
expedient.

     No  waiver of any  default  hereunder,  whether  by the  Trustee  or by the
bondholders,  shall  extend to or shall affect any  subsequent  default or shall
impair any rights or remedies consequent thereon.

     In all  proceedings  for  the  foreclosure  of this  Indenture,  reasonable
compensation for the services of the Trustee in case it shall act, and all costs
and expenses incurred without negligence or bad faith, including all expenses of
preparing for trial and trial,  reasonable attorneys' fees,  stenographer's fees
or  reporter's  fees or charges  for taking or  transcribing  any  statement  of
witnesses or testimony or evidence given or heard therein, expenses of procuring
testimony  and  evidence,   the  cost  of  procuring   abstracts  of  title  and
continuations thereof,  opinion of title or a title guarantee policy or policies
and documentary  evidence, if any, and printing bills incurred by the Trustee in
any proceeding,  or in the preparation therefor, shall become so much additional
indebtedness secured by this Indenture,  prior and superior to the bonds secured
hereby  and  until  the same are  paid,  such  legal  proceedings  shall  not be
dismissed.

     SECTION 77. Anything in this Indenture to the contrary notwithstanding, the
holders  of a  majority  in  principal  amount  of the  bonds  then  outstanding
hereunder  shall  have the  right,  at any time,  by an  instrument  in  writing
executed and delivered to the Trustee,  to direct the time,  method and place of
conducting all proceedings to be taken for any sale of the mortgaged and pledged
property, or for the foreclosure of this Indenture,  or for the appointment of a
receiver or any other  proceedings  hereunder  for any remedy  available  to the
Trustee,  or for exercising any trust or power  conferred upon the Trustee under
this  Indenture;  provided that such  direction  shall not be otherwise  than in
accordance with the provisions of law and of this Indenture.

     SECTION 78. In case of a completed default  hereunder,  and upon the filing
of a bill in equity,  or other  commencement of judicial  proceedings to enforce
the rights of the  Trustee  and of the  bondholders  under this  Indenture,  the
Trustee  shall be  entitled,  as a matter  of  right,  to the  appointment  of a
receiver or receivers of the mortgaged and pledged  property,  and of the tolls,
rents, revenues, issues, earnings, income, products and profits thereof, pending
and/or  during  such  proceedings,  with such  powers as the court  making  such
appointment shall confer.

     SECTION 79. Upon any sale being made either  under the power of sale hereby
given  or  under  judgment  or  decree  in  any  judicial  proceedings  for  the
foreclosure or otherwise for the enforcement of this Indenture, the principal of
all bonds then secured  hereby,  if not previously due, shall at once become and
be immediately due and payable.

     SECTION 80. Upon any sale made either  under the power of sale hereby given
or under  judgment or decree in any  judicial  proceedings  for  foreclosure  or
otherwise for the enforcement of this  Indenture,  any bondholder or bondholders
may bid for and purchase the mortgaged and pledged  property or any part thereof
and upon  compliance  with the terms of sale may hold,  retain and  possess  and
dispose of such property in his, their or its own absolute right without further
accountability,  and any purchasers at any such sale may, in paying the purchase
money,  turn in any of the bonds and coupons or claims for interest  outstanding
hereunder in lieu of cash to the amount which shall,  upon  distribution  of the
net  proceeds  of such  sale,  be  payable  thereon,  subject,  however,  to the
provisions in respect to extended,  pledged and  transferred  coupons and claims
for interest contained in Section 83 hereof. Said bonds and coupons, in case the
amounts so payable  thereon shall be less than the amount due thereon,  shall be
returned  to the  holders  thereof  after  being  appropriately  stamped to show
partial payment.

     SECTION 81. Upon any sale made either  under the power of sale hereby given
or under judgment or decree in any judicial  proceedings  for the foreclosure or
otherwise for the enforcement of this  Indenture,  the receipt of the Trustee or
of the officer making such sale shall be a sufficient discharge to the purchaser
or purchasers at any sale for his or their  purchase money and such purchaser or
purchasers,  his or their assigns or personal representatives,  shall not, after
paying such purchase  money and receiving such receipt of the Trustee or of such
officer  therefor,  be obliged to see to the application of such purchase money,
or be in any wise  answerable for any loss,  misapplication  or  non-application
thereof.

     SECTION  82. Any sale made either  under the power of sale hereby  given or
under  judgment  or  decree  in any  judicial  proceedings  for  foreclosure  or
otherwise for the  enforcement  of this  Indenture,  shall operate to divest all
right, title, interest, claim and demand whatsoever, either at law or in equity,
of the Company, of, in and to the property so sold, and shall be a perpetual bar
both at law and in equity  against the Company,  its  successors and assigns and
against any and all persons, firms or corporations claiming or who may claim the
property  sold or any part  thereof,  from,  through or under the  Company,  its
successors or assigns.

     SECTION 83. The  proceeds  of any sale made either  under the power of sale
hereby given,  or under judgment or decree in any judicial  proceedings  for the
foreclosure or otherwise for the  enforcement of this  Indenture,  together with
any other  amounts of cash which may then be held by the  Trustee as part of the
mortgaged and pledged property, shall be applied, as follows:

          First--To the payment of all taxes, assessments,  governmental charges
     or liens prior to the lien of this Indenture, except those subject to which
     such sale shall have been made,  and of all the costs and  expenses of such
     foreclosure and sale, including reasonable compensation to the Trustee, its
     agents  and  attorneys,  and of  all  other  sums  payable  to the  Trustee
     hereunder as  compensation  for all other services  and/or by reason of any
     expenses or  liabilities  incurred or advances made in connection  with the
     management or administration of the trusts hereby created;

          Second--To  the payment in full of the amounts then due and unpaid for
     principal and interest upon the bonds then secured hereby; and in case such
     proceeds  shall  be  insufficient  to pay in full  the  amounts  so due and
     unpaid,  then to the payment thereof ratably,  with interest on the overdue
     principal  at the rates  expressed  in the  bonds,  without  preference  or
     priority of principal over interest,  or of interest over principal,  or of
     any instalment of interest over any other instalment of interest; provided,
     however,  that if the time  for the  payment  of any  coupon  or claim  for
     interest  upon any of the bonds  secured  hereby  shall have been  extended
     (except  pursuant to action  taken under  Article XX hereof) by or with the
     consent of the Company,  or if any thereof at or after  maturity shall have
     been  transferred  or pledged  separate from the bond to which they relate,
     such  coupons  or claims  for  interest  shall not be  entitled  in case of
     default hereunder to the benefit or security of this Indenture except after
     the prior  payment in full of the  principal of all bonds issued  hereunder
     and then secured  hereby and of all coupons and claims for interest on such
     bonds the payment of which has not been so extended,  or not so transferred
     or pledged; but the foregoing proviso shall not be applicable to any coupon
     or claim for  interest,  the time for the payment of. which shall have been
     extended,  if such  extension be pursuant to a plan proposed by the Company
     to all  holders  of any one or more  series of bonds then  outstanding  and
     accepted  by or  binding  upon the  holder  of such  coupon  or  claim  for
     interest;

          Third--Any surplus thereof remaining to the Company, its successors or
     assigns or to whosoever may be lawfully entitled to receive the same.

     SECTION  84. In case of a default on its part,  as  aforesaid,  neither the
Company nor any one claiming through or under it shall or will set up, claim, or
seek to  take  advantage  of any  appraisement,  valuation  stay,  extension  or
redemption  laws now or  hereafter  in force in any  locality  where  any of the
mortgaged  and pledged  property may be situated,  in order to prevent or hinder
the  enforcement or foreclosure of this  Indenture,  or the absolute sale of the
mortgaged  and  pledged  property,  or  the  final  and  absolute  putting  into
possession thereof,  immediately after such sale, of the purchaser or purchasers
thereat,  but the Company, for itself and all who may claim through or under it,
hereby  waives  the  benefit  of all such laws and  hereby  waives  all right of
appraisement  and  redemption to which it may be entitled  under the laws of the
State of Indiana or of any other  state where any of the  mortgaged  and pledged
property  may be  situated.  And the  Company,  for itself and all who may claim
through or under it,  waives any and all right to have the estates  comprised in
the security intended to be created hereby marshaled upon any foreclosure of the
lien hereof,  and agrees that any court having  jurisdiction  to foreclose  such
lien may sell the mortgaged and pledged property as an entirety.

     SECTION  85. The  Company  covenants  that if default  shall be made in the
payment of the principal of any bonds hereby  secured when the same shall become
payable, whether by the maturity of said bonds or otherwise, then upon demand of
the Trustee, the Company will pay to the Trustee, for the benefit of the holders
of the bonds and coupons then secured hereby the whole amount due and payable on
all such bonds and coupons for principal  and  interest,  with interest upon the
overdue principal at the same rate borne by the bonds which are overdue;  and in
case the Company  shall fail to pay the same  forthwith  upon such  demand,  the
Trustee in its own name and as trustee of an express  trust shall be entitled to
sue for and to recover judgment for the whole amount so due and unpaid.

     The Trustee,  to the extent  permitted by law, shall be entitled to sue and
recover  judgment  either  before  or  after  or  during  the  pendency  of  any
proceedings for the enforcement of the lien of this Indenture upon the mortgaged
and pledged property,  and in case of a sale of any of the mortgaged and pledged
property  and of the  application  of the proceeds of sale to the payment of the
debt  hereby  secured,  the Trustee in its own name and as trustee of an express
trust shall be entitled  to enforce  payment of and to receive all amounts  then
remaining  due and  unpaid  upon  any  and all of the  bonds  and  coupons  then
outstanding  hereunder,  for the benefit of the holders thereof, and the Trustee
shall be entitled  to recover  judgment  for any  portion of the debt  remaining
unpaid,  with  interest.  No recovery of any such judgment by the Trustee and no
levy of any  execution  upon any such  judgment  upon any of the  mortgaged  and
pledged property or upon any other property shall in any manner or to any extent
affect the lien of this Indenture upon the mortgaged and pledged property or any
part thereof, or any rights, powers or remedies of the Trustee hereunder, or any
lien,  rights,  powers or remedies  of the  holders of the said bonds,  but such
lien,  rights,  powers and remedies of the Trustee and of the bondholders  shall
continue unimpaired as before.

     Any moneys thus  collected  or received by the Trustee  under this  Section
shall be applied by it first, to the payment of its expenses,  disbursements and
compensation and the expenses,  disbursements and compensation of its agents and
attorneys,  and, second,  toward payment of the amounts then due and unpaid upon
such  bonds  and  coupons  in  respect  of which  such  moneys  shall  have been
collected,  ratably and without  preference  or priority of any kind (subject to
the  provisions  of Section 83 hereof with respect to extended,  transferred  or
pledged  coupons  and claims for  interest)  according  to the  amounts  due and
payable  upon such  bonds and  coupons,  respectively,  at the date fixed by the
Trustee for the  distribution of such moneys,  upon  presentation of the several
bonds and coupons and upon stamping such payment thereon, if partially paid, and
upon surrender thereof, if fully paid.

     In case  of any  reorganization,  receivership,  insolvency  or  bankruptcy
proceedings  affecting  the Company or its property the Trustee shall have power
to intervene and take any action  therein that may be permitted by the Court and
shall be  entitled  to file and  prove a claim  for the  entire  amount  due and
payable by the Company under this  Indenture at the date of the  institution  of
such proceedings and for any additional  amount which may become due and payable
by the Company hereunder after such date, without regard to or deduction for any
amount which may have been or which may  thereafter  be  received,  collected or
realized by the Trustee from or out of the mortgaged and pledged property or any
part thereof or from or out of the proceeds thereof or any part thereof.

     The Trustee is hereby irrevocably  appointed (and the successive respective
holders of bonds and coupons issued  hereunder,  by taking and holding the same,
shall be  conclusively  deemed to have so  appointed  the  Trustee) the true and
lawful  attorney-in-fact  of the  respective  holders  of the bonds and  coupons
issued  hereunder,  with authority to make or file,  irrespective of whether the
bonds or any of them are in default as to payment of principal  or interest,  in
the respective  names of the holders of the bonds or coupons or in behalf of all
holders  of the bonds or  coupons as a class,  any proof of debt,  amendment  to
proof of debt,  petition  or other  document,  and to do and perform any and all
acts and  things  for and in behalf of the  respective  holders  of the bonds or
coupons as a class,  as may be  necessary  or  advisable,  in the opinion of the
Trustee,  in order to have the respective  claims of the holders of the bonds or
coupons  against the  Company  allowed in any equity  receivership,  insolvency,
liquidation,  bankruptcy,  reorganization or other similar  proceedings to which
the  Company  shall be a party and to  receive  payment of or on account of such
claims; and any receiver, assignee or trustee in bankruptcy is hereby authorized
by each of the  bondholders  to make such  payments to the  Trustee,  and in the
event that the Trustee shall consent to the making of such payments  directly to
the  bondholders,  to pay to the Trustee any amount due it for  compensation and
expenses,  including  counsel  fees,  incurred  by it up to  the  date  of  such
distribution.  Nothing  herein  contained  shall be construed  to authorize  the
Trustee  to  accept  any  composition  or plan of  reorganization  on  behalf of
bondholders or to surrender any rights of bondholders.

     SECTION  86.  All  rights of action  (including  the right to file proof of
claim)  under  this  Indenture  or under  any of the  bonds or  coupons,  may be
enforced by the Trustee without the possession of any of the bonds or coupons or
the production thereof on any trial or other proceeding relative thereto and any
such suit or  proceeding  instituted by the Trustee shall be brought in its name
as Trustee and any  recovery of judgment  shall be for the equal  benefit of the
holders of the  outstanding  bonds and  coupons,  subject to the  provisions  of
Section 83 hereof with respect to extended,  transferred or pledged  coupons and
claims for interest.

     SECTION  87.  No  holders  of any bond or  coupon  shall  have any right to
institute any suit, action or proceeding in equity or at law for the foreclosure
of  this  Indenture  or  for  the  execution  of any  trust  hereof  or for  the
appointment  of a receiver  or any other  remedy  hereunder,  unless such holder
shall  have  previously  given to the  Trustee  written  notice  of a  completed
default,  nor  unless  also the  holders  of  twenty-five  per  centum  (25%) in
principal amount of the bonds then outstanding hereunder shall have made written
request to the Trustee and shall have offered it reasonable  opportunity  either
to proceed to exercise  the powers  hereinbefore  granted or to  institute  such
action,  suit or  proceeding  in its own name,  nor unless  also they shall have
offered to the  Trustee  adequate  security  and  indemnity  against  the costs,
expenses and liabilities to be incurred therein or thereby;  it being understood
and intended  that no one or more holders of the bonds or coupons shall have any
right in any manner whatsoever to affect,  disturb or prejudice the lien of this
Indenture by his or their action or to enforce any right hereunder except in the
manner herein  provided,  and that all  proceedings at law or in equity shall be
instituted,  had and maintained in the manner herein  provided and for the equal
benefit of all holders of outstanding bonds and coupons.

     Notwithstanding the provisions of Section 88 or any other provision of this
Indenture or any indenture  supplemental hereto, nothing in this Indenture or in
any such  supplemental  indenture  contained shall affect or impair the right of
any bondholder,  which is absolute and unconditional,  to enforce the payment of
the principal of and interest on his bonds at and after the maturity  thereof as
therein  expressed or the obligation of the Company,  which is also absolute and
unconditional,  to pay the principal of and interest on each of the bonds issued
hereunder to the respective  holders thereof at the time and place in said bonds
and the appurtenant coupons expressed.

     SECTION 88. Notwithstanding any other provision of this Indenture,  all the
parties  hereto  agree,  and each holder or owner of any bond by his  acceptance
thereof after the date of the  execution  hereof shall be deemed to have agreed,
that any Court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee,  the filing by any party  litigant
in such suit of an under  taking to pay the  costs of such  suit,  and that such
Court  may in its  discretion  assess  reasonable  costs,  including  reasonable
attorneys' fees,  against any party litigant in such suit,  having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee,  to any suit  instituted  by any  bondholder  or group of  bondholders,
holding in the aggregate  more than ten per centum (10%) in principal  amount of
the bonds  outstanding,  or to any suit  instituted  by any  bondholder  for the
enforcement  of the payment of the  principal of or interest on any bond,  on or
after the respective due dates expressed in such bond.

     SECTION 89. The Company may waive any period of grace  provided for in this
Article.

     In case the Trustee  shall have  proceeded  to enforce any right under this
Indenture by foreclosure,  entry or otherwise,  and such proceedings  shall have
been  discontinued  or abandoned for any reason,  or shall have been  determined
adversely  to the  Trustee,  then and in every  such  case the  Company  and the
Trustee shall be restored to their former  positions and rights  hereunder  with
respect to the  mortgaged  and pledged  property,  and all rights,  remedies and
powers of the Trustee shall continue as if no such proceedings had been taken.

                                   ARTICLE XV.

            EVIDENCE OF RIGHTS OF BONDHOLDERS AND OWNERSHIP OF BONDS.

     SECTION  90.  Any  request,  declaration  or other  instrument,  which this
Indenture  may require or permit to be signed and  executed by the  bondholders,
may be in any number of concurrent  instruments of similar  tenor,  and shall be
signed or executed by such  bondholders  in person or by attorney  appointed  in
writing. Proof of the execution of any such request or other instrument, or of a
writing  appointing  any such  attorney,  or of the holding by any person of the
bonds or coupons appertaining thereto, may be made in the following manner:

          (a) The fact and date of the  execution  by any person of such request
     or other  instrument  or writing  may be proved by the  certificate  of any
     notary public, or other officer authorized to take acknowledgments of deeds
     to be recorded  in the state in which he  purports to act,  that the person
     signing such request or other instrument  acknowledged to him the execution
     thereof, or by an affidavit of a witness of such execution;

<PAGE>

          (b) The amount of bonds  transferable  by delivery  held by any person
     executing such request or other instrument as a bondholder,  and the series
     and  serial  numbers  thereof,  held by such  person,  and the  date of his
     holding  the same,  may be proved by a  certificate  executed  by any trust
     company,  bank,  banker  or other  depositary  wherever  situated,  if such
     certificate shall be deemed by the Trustee to be satisfactory, showing that
     at the  date  therein  mentioned  such  person  had on  deposit  with  such
     depositary,  the bonds  described  in such  certificate.  The  Trustee  may
     nevertheless  in its  discretion  require  further  proof in cases where it
     deems further proof  desirable.  The ownership of registered bonds shall be
     proved by the registry books.

     Any request, consent or vote of the owner of any bond shall bind all future
owners of the same in respect of anything done or suffered by the Company or the
Trustee in pursuance thereof.

     SECTION  91. The  Company  and the Trustee may deem and treat the bearer of
any temporary or coupon bond outstanding hereunder,  which shall not at the time
be registered as to principal as hereinbefore authorized,  and the bearer of any
coupon for interest on any such bond,  whether such bond shall be  registered or
not, as the absolute  owner of such bond or coupon,  as the case may be, for the
purpose of  receiving  payment  thereof or on account  thereof and for all other
purposes,  and neither  the  Company  nor the  Trustee  shall be affected by any
notice to the contrary.

     The Company and the Trustee may deem and treat the person in whose name any
fully registered bond  outstanding  hereunder shall be registered upon the books
of the Company as herein authorized,  as the absolute owner of such bond for the
purpose of receiving  payment of or on account of the  principal of and interest
on such bond and for all other purposes,  and they may deem and treat the person
in whose name any coupon  bond shall be so  registered  as to  principal  as the
absolute owner thereof for the purpose of receiving  payment of or on account of
the principal  thereof and for all other purposes,  except to receive payment of
interest  represented by outstanding  coupons;  and all such payments so made to
any such  registered  holder or upon his order,  shall be valid and effectual to
satisfy and discharge  the liability  upon such bond to the extent of the sum or
sums so paid,  and neither the Company nor the Trustee  shall be affected by any
notice to the contrary.

     Neither the Company nor the Trustee  shall be bound to recognize any person
as the holder of a bond  outstanding  under this Indenture  unless and until his
bond is  submitted  for  inspection,  if  required,  except as may  otherwise be
provided by  regulations  made under  Section 120 hereof,  and his title thereto
satisfactorily established, if disputed.

                                  ARTICLE XVI.

          IMMUNITY OF INCORPORATORS, SUBSCRIBERS TO THE CAPITAL STOCK,
                      STOCKHOLDERS, OFFICERS AND DIRECTORS.

     SECTION 92. No recourse under or upon any obligation, covenant or agreement
contained in this Indenture or in any indenture  supplemental  hereto, or in any
bond or coupon hereby  secured,  or because of the creation of any  indebtedness
hereby secured,  shall be had 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, as such, 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
by any legal or equitable proceeding or otherwise; it being expressly agreed and
understood  that this  Indenture,  any  indenture  supplemental  hereto  and the
obligations hereby and thereby secured,  are solely corporate  obligations,  and
that no personal  liability  whatever  shall  attach to, or be incurred by, such
incorporators,  subscribers  to the  capital  stock,  stockholders,  officers or
directors of the Company or of any predecessor or successor corporation,  or any
of  them,  as  such,  because  of  the  incurring  of  the  indebtedness  hereby
authorized,  or under  or by  reason  of any of the  obligations,  covenants  or
agreements  contained in this Indenture or in any indenture  supplemental hereto
or in any of the bonds or coupons hereby secured, or implied therefrom, and that
any and all such  personal  liability  of any name and  nature,  and any and all
rights and claims  against  every such  incorporator,  subscriber to the capital
stock, stockholder,  officer or director, as such, whether arising at common law
or in equity, or created by rule of law, statute, constitution or otherwise, are
expressly   released  and  waived  as  a  condition  of,  and  as  part  of  the
consideration  for, the  execution of this  Indenture and the issue of the bonds
and  interest  obligations  secured  hereby;  provided,  however,  that  nothing
contained in this Indenture or in the bonds is intended or shall be construed to
constitute a waiver of compliance  with any provision of the  Securities  Act of
1933, as amended, or of the rules and regulations thereunder.

                                  ARTICLE XVII.

                      EFFECT OF MERGER, CONSOLIDATION, ETC.

     SECTION 93. Nothing in this Indenture  shall prevent any  consolidation  of
the  Company  with,  or merger  of the  Company  into,  any  corporation  having
corporate authority to carry on any of the businesses  mentioned in Section 4 of
this  Indenture,  or any conveyance,  transfer or lease,  subject to the lien of
this Indenture,  of all or substantially  all the mortgaged and pledged property
as an  entirety  to any  corporation  lawfully  entitled to acquire or lease and
operate the same; provided, how ever, and the Company covenants and agrees, that
such  consolidation,  merger,  conveyance,  transfer or lease shall be upon such
terms as fully to  preserve  and in no respect to impair the lien or security of
this Indenture, or any of the rights or powers of the Trustee or the bondholders
hereunder;  and provided,  further, that any :such lease shall be made expressly
subject to  immediate  termination  by the Company or by the Trustee at any time
during  the  continuance  of a  completed  default  hereunder,  and  also by the
purchaser of the property so leased at any sale thereof hereunder,  whether such
sale be made  under  the  power  of sale  hereby  conferred  or  under  judicial
proceedings;  and provided  further that, upon any such  consolidation,  merger,
conveyance or transfer,  or upon any such lease the term of which extends beyond
the date of maturity of any of the bonds  secured  hereby,  the due and punctual
payment of the principal and interest of all said bonds according to their tenor
and the due and punctual  performance  and  observance  of all the covenants and
conditions  of this  Indenture to be kept or  performed by the Company  shall be
expressly  assumed by an  indenture  with the Trustee  executed and caused to be
recorded  by the  corporation  formed by such  consolidation  or into which such
merger shall have been made, or acquiring all or substantially all the mortgaged
and pledged  property as an entirety,  as aforesaid,  or by the lessee under any
such lease the term of which  extends  beyond the date of maturity of any of the
bonds secured hereby.

     SECTION 94. In case the Company,  as permitted by Section 93 hereof,  shall
be consolidated  with or merged into any other  corporation,  or shall convey or
transfer,  subject to the lien of this Indenture,  all or substantially  all the
mortgaged and pledged property as an entirety,  the successor corporation formed
by such  consolidation,  or into which the Company  shall have been  merged,  or
which shall have received a conveyance or transfer as aforesaid--upon  executing
and causing to be recorded an indenture  with the Trustee,  satisfactory  to the
Trustee whereby such successor  corporation  shall assume and agree to pay, duly
and  punctually,  the  principal  and interest of the bonds issued  hereunder in
accordance with the provisions of said bonds and coupons and this Indenture, and
shall  agree to perform and fulfill all the  covenants  and  conditions  of this
Indenture  to be kept or  performed  by the  Company--  shall  succeed to and be
substituted  for the  Company,  with the  same  effect  as if it had been  named
herein, and shall have and may exercise under this Indenture the same powers and
rights as the  Company,  and  (without in anywise  limiting or  impairing by the
enumeration of the same the scope and intent of the foregoing general powers and
rights)  such  successor   corporation  thereupon  may  cause  to  be  executed,
authenticated  and  delivered,  either  in  its  own  name  or in  the  name  of
Indianapolis Power & Light Company,  as its name shall then exist, in respect of
property of the  character  defined in Section 4 hereof as  property  additions,
such bonds as could or might have been  executed,  issued and  delivered  by the
Company had it acquired such property of such  character by purchase on the date
of  such   consolidation,   merger,   conveyance   or  transfer   and  had  such
consolidation,  merger,  conveyance or transfer not occurred, and upon the order
of such  successor  corporation  in lieu of the Company,  and subject to all the
terms, conditions and restrictions in this Indenture prescribed,  concerning the
authentication and delivery of bonds, the Trustee shall authenticate and deliver
any bonds which shall have been previously  signed and delivered by the officers
of the  Company  to the  Trustee  for  authentication,  and  such  bonds  as the
successor  corporation  shall  thereafter,  in accordance with the provisions of
this  Indenture,  cause to be  executed  and  delivered  to the Trustee for such
purpose,  and such  successor  corporation  shall also have and may  exercise in
respect  of the  property  of such  character,  and  subject  to all the  terms,
conditions and  restrictions in this Indenture  prescribed  applicable  thereto,
whether as to  withdrawal of cash,  release of property or  otherwise,  the same
powers and rights which the Company might or could  exercise had it acquired the
property  of such  character  by  purchase  on the  date of such  consolidation,
merger, conveyance or transfer and had such consolidation, merger, conveyance or
transfer not  occurred.  All the bonds so issued shall in all respects  have the
same legal right and security as the bonds theretofore issued in accordance with
the terms of this  Indenture as though all of said bonds had been  authenticated
and delivered at the date of the execution hereof.  As a condition  precedent to
the execution by such successor  corporation and the authentication and delivery
by the Trustee of any such  additional  bonds or the  withdrawal  of cash or the
release of property  under any of the  provisions of this  Indenture or a credit
under the  provisions  of  Section 41 hereof,  on the basis of  property  of the
character defined in Section 4 hereof as property  additions  acquired,  made or
constructed by the successor  corporation,  or by any corporation with which the
Company or any successor  corporation  may be so  consolidated or into which the
Company or any successor corporation may be so merged or to which the Company or
any successor  corporation may make any such conveyance,  the indenture with the
Trustee to be executed and caused to be recorded by the successor corporation as
in this  Article  XVII  provided  or a  subsequent  indenture  shall  contain  a
conveyance or transfer and mortgage in terms sufficient to subject such property
to the lien hereof;  and provided  further that the lieu created thereby and the
lien thereof shall have similar  force,  effect and standing as the lien of this
Indenture  would have if the Company should not be  consolidated  with or merged
into such other  corporation  or should not convey or transfer,  subject to this
Indenture,  all or  substantially  all the mortgaged and pledged  property as an
entirety, as aforesaid, to such successor corporation,  and should itself on the
date of such consolidation, merger, conveyance or transfer, acquire or construct
such  property,  and request  the  authentication  and  delivery of bonds or the
withdrawal  of cash or the  release of  property  under the  provisions  of this
Indenture  in respect  thereof or a credit  under the  provisions  of Section 41
hereof.

     To the extent  permitted  by Sections 97 and 98, the Trustee may receive an
opinion of counsel as conclusive  evidence that any such assumption and any such
lien and any such indenture comply with the foregoing  conditions and provisions
of this Section.

     SECTION  95.  In case the  Company,  as  permitted  by  Section  93 of this
Indenture,  shall be consolidated with or merged into any other corporation,  or
shall convey or transfer,  subject to this Indenture,  all or substantially  all
the  mortgaged and pledged  property as an entirety as  aforesaid,  neither this
Indenture  nor the  indenture  with the Trustee to be executed  and caused to be
recorded by the successor  corporation as in this Article XVII hereof  provided,
shall,  unless such indenture shall otherwise provide,  become or be a lien upon
any of the property or franchises of the successor  corp9ration except (a) those
acquired by it from the Company and  appurtenant  thereto and property which the
successor  corporation shall thereafter acquire or construct which shall form an
integral part of, and be essential or convenient to the use or operation of, any
property  then or thereafter  subject to the lien hereof,  (b) the property made
and used by the successor  corporation  as the basis under any of the provisions
of this Indenture for the authentication and delivery of additional bonds or the
withdrawal  of cash or the release of property or a credit under the  provisions
of Section 41 hereof and (c) such franchises, repairs and additional property as
may be  acquired,  made  or  constructed  by the  successor  corporation  (1) to
maintain,  renew and preserve  the  franchises  covered by this  Indenture or to
maintain the mortgaged and pledged property as an operating system or systems in
good repair,  working order and condition,  or (2) in pursuance of some covenant
or agreement hereof to be kept or performed by the Company. Unless and until the
successor  corporation  shall  subject  all  the  properties  of  the  successor
corporation  to the lien of this  Indenture,  it  shall  in case of any  merger,
consolidation or transfer keep the accounts of the successor corporation so that
the  earnings  of the  mortgaged  and  pledged  property  may  be at  all  times
distinguished,  and all covenants herein  contained  affecting the mortgaged and
pledged property be fully performed.

                                 ARTICLE XVIII.

                             CONCERNING THE TRUSTEE.

     SECTION  96.  The  Trustee  shall at all  times be a bank or trust  company
having its principal office and place of business in the City of Chicago,  State
of Illinois,  or in the Borough of  Manhattan,  The City of New York if there be
such a bank  or  trust  company  willing  and  able to  accept  the  trust  upon
reasonable or customary  terms,  and which shall at all times be a bank or trust
company  organized as a  corporation  and doing  business  under the laws of the
United  States or of the State of Illinois  or of the State of New York,  with a
capital and surplus of at least  $2,500,000  and  authorized  under such laws to
exercise  corporate  trust powers and subject to  supervision  or examination by
federal or state  authority.  If the Trustee  publishes  reports of condition at
least  annually,  pursuant to law or to the  requirements  of any supervising or
examining  authority referred to in this Section,  then for the purposes of this
Section the  combined  capital and surplus of the Trustee  shall be deemed to be
its  combined  capital  and  surplus as set forth in its most  recent  report of
condition so published.

     The Company covenants that whenever necessary to avoid or fill a vacancy in
the office of Trustee,  it will,  in the manner  provided in Section 113 hereof,
appoint a Trustee so that there shall at all times be a Trustee  eligible  under
this Section.

     SECTION  97. The  Trustee  hereby  accepts the trust  hereby  created.  The
Trustee  undertakes,  prior to a completed default,  and after the curing of all
completed defaults which may have occurred, to perform such duties and only such
duties  as are  specifically  set  forth  in  this  Indenture,  and in case of a
completed  default (which has not been cured) to exercise such of the rights and
powers  vested in it by this  Indenture,  and to use the same degree of care and
skill in their  exercise,  as a  prudent  man  would  exercise  or use under the
circumstances in the conduct of his own affairs.

     The Trustee,  upon  receipt of evidence  furnished to it by or on behalf of
the Company  pursuant to any provision of this Indenture,  will examine the same
to determine  whether or not such evidence  conforms to the requirements of this
Indenture.

     SECTION 98. No  provision of this  Indenture  shall be construed to relieve
the Trustee from  liability  for its own  negligent  action,  its own  negligent
failure to act, or its own willful misconduct, except that

     (a) prior to  completed  default  hereunder  and  after  the  curing of all
completed  defaults  which may have  occurred,  the Trustee  shall not be liable
except for the performance of such duties as are  specifically set forth in this
Indenture,  and no  implied  covenants  or  obligations  shall be read into this
Indenture  against the Trustee but the duties and  obligations  of the  Trustee,
prior to completed default and after the curing of all completed  defaults which
may have occurred,  shall be determined solely by the express provisions of this
Indenture; and

     (b) prior to  completed  default  hereunder  and  after  the  curing of all
completed  defaults which may have occurred,  and in the absence of bad faith on
the part of the Trustee,  the Trustee may  conclusively  rely as to the truth of
the  statements  and  the  correctness  of  opinions  expressed  therein,   upon
certificates or opinions conforming to the requirements of this Indenture; and

<PAGE>

     (c) the Trustee  shall not be  personally  liable for any error of judgment
made in good faith by a responsible officer or officers of the Trustee unless it
shall be proved that the Trustee was  negligent in  ascertaining  the  pertinent
facts; and

     (d) the Trustee shall not be  personally  liable with respect to any action
taken  or  omitted  to be  taken  by it in good  faith  in  accordance  with the
direction of the holders of not less than a majority in principal  amount of the
bonds at the time  outstanding  (determined  as  provided  in  Section 2 hereof)
relating to the time,  method,  and place of conducting  any  proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture.

     SECTION 99. The recitals of fact contained herein and in the bonds shall be
taken as the statements of the Company and the Trustee assumes no responsibility
for the correctness of the same. The Trustee makes no  representations as to the
value of the  mortgaged and pledged  property or any part thereof,  or as to the
title of the Company thereto,  or as to the validity or adequacy of the security
afforded  thereby and hereby,  or as to the validity of this Indenture or of the
bonds or coupons issued hereunder.

     SECTION 100.  Subject to the  provisions of Sections 97 and 98, the Trustee
shall not be  personally  liable in case of entry by it upon the  mortgaged  and
pledged  property for debts  contracted or liability or damages  incurred in the
management or operation of said property.

     SECTION 101. Any notice or demand which by any provision of this  Indenture
is  required  or  permitted  to be given or served by the Trustee on the Company
shall be deemed to have been sufficiently given or served, for all purposes,  by
being  deposited  postage prepaid in a post-office  letter box addressed  (until
another  address is filed by the Company  with the  Trustee for the  purposes of
this Section),  as follows:  Indianapolis  Power & Light Company,  Indianapolis,
Indiana.

     SECTION 102. To the extent permitted by Sections 97 and 98:

          (1) The  Trustee  may rely and shall be  protected  in acting upon any
     resolution,   certificate,   opinion,  notice,  request,   consent,  order,
     appraisal,  report,  bond, or other paper or document  believed by it to be
     genuine  and to have  been  signed  or  presented  by the  proper  party or
     parties; and

          (2) The  Trustee  may  consult  with  counsel  selected  by it and the
     opinion  of such  counsel  shall be full  and  complete  authorization  and
     protection  in respect of any action  taken or suffered by it  hereunder in
     good faith and in accordance with the opinion of such counsel.

     SECTION  103.  The Trustee  shall not be under any  responsibility  for the
approval or selection  of any expert for any of the  purposes  expressed in this
Indenture,  except that  nothing in this  Section  contained  shall  relieve the
Trustee  of its  obligation  to  exercise  reasonable  care with  respect to the
approval  or  selection  of  independent  experts  who may  furnish  opinions or
certificates to the Trustee pursuant to any provision of this Indenture.

<PAGE>

     Any  resolution of the Board of Directors or Executive  Committee  shall be
evidenced  to the Trustee by a copy  thereof  certified  by the  Secretary or an
Assistant Secretary of the Company to have been duly adopted.

     Nothing  contained in this Section shall be deemed to modify the obligation
of the  Trustee to  exercise  after a  completed  default  the rights and powers
vested in it by this  Indenture  with the degree of care and skill  specified in
Section 97.

     SECTION 104. The Trustee,  in its  individual  or any other  capacity,  may
become the owner or pledgee of bonds or  coupons  secured  hereby  with the same
rights it would have if it were not Trustee.

     SECTION 105.  Subject to the  provisions of Section 130 hereof,  all moneys
received by the Trustee whether as Trustee or paying agent shall,  until used or
applied as herein  provided,  be held in trust for the  purposes  for which they
were paid,  but need not be  segregated  from other  funds  except to the extent
required by law. The Trustee may allow and credit to the Company interest on any
moneys received by it hereunder at such rate, if any, as may be agreed upon with
the Company from time to time and as may be permitted by law.

     SECTION  106. The Company  covenants  and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable  compensation for
all services rendered by it in the execution of the trusts hereby created and in
the exercise and  performance  of any of the powers and duties  hereunder of the
Trustee,  which  compensation  shall not be limited by any  provision  of law in
regard to the  compensation  of a trustee of an express  trust,  and the Company
will reimburse the Trustee with interest for all advances made by the Trustee in
accordance  with any of the  provisions  of this  Indenture  and will pay to the
Trustee  from  time  to time  its  expenses  and  disbursements  (including  the
reasonable compensation and the expenses and disbursements of its counsel and of
all  persons  not  regularly  in its  employ).  The Company  also  covenants  to
indemnify the Trustee for, and to hold it harmless against,  any loss, liability
or expense incurred without  negligence or bad faith on the part of the Trustee,
arising out of or in connection  with the acceptance or  administration  of this
trust,  including  the costs and  expenses  of  defending  against  any claim of
liability in the premises.  The  obligations of the Company to the Trustee under
this Section shall  constitute  additional  indebtedness  secured  hereby.  Such
additional  indebtedness  shall be  secured by a lien prior to that of the bonds
upon the trust estate,  including all property or funds held or collected by the
Trustee as such.

     SECTION  107.  Whenever  in  the  administration  of  the  trusts  of  this
Indenture,  prior to a completed  default  hereunder,  the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering any action  hereunder,  such matter  (unless other evidence in respect
thereof  be herein  specifically  prescribed)  may be deemed to be  conclusively
proved  and  established  by  a  certificate   signed  by  the  President  or  a
Vice-President  and the  Treasurer or an Assistant  Treasurer of the Company and
delivered  to the  Trustee,  and such  certificate  shall be full warrant to the
Trustee  for any action  taken or suffered  by it under the  provisions  of this
Indenture upon the faith thereof.

     SECTION  108.  Whenever it is provided in this  Indenture  that the Trustee
shall  take any  action  upon the  happening  of a  specified  event or upon the
fulfillment  of  any  condition  or  upon  the  request  of  the  Company  or of
bondholders,  the Trustee  taking such action  shall have full power to give any
and all notices and to do any and all acts and things incidental to such action.

     SECTION 109. (a) If the Trustee has or acquires any  conflicting  interest,
as defined by subsection  (d) of this Section,  the Trustee shall within 90 days
after ascertaining that it has such conflicting interest,  either eliminate such
conflicting interest or resign by giving written notice to the Company, but such
resignation  shall not become  effective  until the  appointment  of a successor
trustee  and  such  successor's  acceptance  of such  appointment.  The  Company
covenants  to take  prompt  steps to have a  successor  appointed  in the manner
hereinafter provided in Section 113. Upon giving such notice of resignation, the
resigning Trustee shall publish notice thereof in one daily newspaper printed in
the English  language of general  circulation  in the City of Chicago,  State of
Illinois,  once in each of three successive  calendar weeks, in each case on any
business  day of the week,  which need not be the same day in each week.  If the
resigning  Trustee  fails to publish  such notice  within ten days after  giving
written notice of its resignation to the Company, the Company shall publish such
notice.

     (b) In the event that the Trustee shall fail to comply with the  provisions
of the preceding  subsection  (a) of this  Section,  the Trustee shall within 10
days after the expiration of such 90 day period  transmit notice of such failure
to the  bondholders,  in the manner and to the extent provided in subsection (c)
of Section 53 hereof  with  respect to reports  pursuant  to  subsection  (a) of
Section 53 hereof.

     (c) Subject to the  provisions of Section 88 hereof any  bondholder who has
been a bona  fide  holder of a bond or bonds for at least  six  months  may,  on
behalf of  himself  and all others  similarly  situated,  petition  any court of
competent  jurisdiction  for the removal of the Trustee and the appointment of a
successor if the Trustee fails,  after written request  therefor by such holder,
to comply with the provisions of subsection (a) of this Section.

     (d) The Trustee shall be deemed to have a conflicting interest if--

          (1) the Trustee is trustee  under  another  indenture  under which any
     other securities, or certificates of interest or participation in any other
     securities, of the Company are outstanding, except as otherwise provided in
     Paragraph (1) of subsection  (b) of Section 310 of the Trust  Indenture Act
     of 1939;

          (2) the Trustee or any of its  directors or  executive  officers is an
     obligor upon the bonds or an underwriter for the Company;

<PAGE>

          (3) the  Trustee  directly  or  indirectly  controls or is directly or
     indirectly controlled by or is under direct or indirect common control with
     the Company or an underwriter for the Company;

          (4) the Trustee or any of its  directors  or  executive  officers is a
     director,  officer, partner,  employee,  appointee or representative of the
     Company,  or of an  underwriter  (other  than the  Trustee  itself) for the
     Company who is currently  engaged in the business of  underwriting,  except
     that (A) one  individual may be a director  and/or an executive  officer of
     the Trustee and a director and/or an executive officer of the Company,  but
     may not be at the same time an  executive  officer of both the  Trustee and
     the  Company;  (B) if and so long as the number of directors of the Trustee
     in office is more than nine,  one  additional  individual may be a director
     and/or an  executive  officer of the Trustee and a director of the Company;
     and (C) the Trustee may be designated by the Company or by any  underwriter
     for the  Company  to act in the  capacity  of  transfer  agent,  registrar,
     custodian, paying agent, fiscal agent, escrow agent or depositary or in any
     other similar  capacity or,  subject to the  provisions of paragraph (1) of
     this subsection, to act as trustee whether under an indenture or otherwise;

          (5) 10 per centum or more of the voting  securities  of the Trustee is
     beneficially  owned  either by the Company or by any  director,  partner or
     executive  officer  thereof,  or 20 per  centum  or  more  of  such  voting
     securities is beneficially owned, collectively,  by any two or more of such
     persons;  or 10 per centum or more of the voting  securities of the Trustee
     is  beneficially  owned either by an underwriter  for the Company or by any
     director,  partner or executive officer thereof,  or is beneficially owned,
     collectively, by any two or more such persons;

          (6) the  Trustee  is the  beneficial  owner of or holds as  collateral
     security for an obligation which is in default, (A) 5 per centum or more of
     the  voting  securities  or 10 per  centum  or more of any  other  class of
     security  of the  Company,  not  including  the  bonds  issued  under  this
     Indenture and securities  issued under any other  indenture under which the
     Trustee  is also  trustee,  or (B) 10 per  centum  or more of any  class of
     security of an underwriter for the Company;

          (7) the  Trustee is the  beneficial  owner of, or holds as  collateral
     security for an obligation which is in default, 5 per centum or more of the
     voting securities of any person who, to the knowledge of the Trustee,  owns
     ten per centum or more of the voting securities of, or controls directly or
     indirectly or is under direct or indirect common control with, the Company;

          (8) the  Trustee  is the  beneficial  owner of or holds as  collateral
     security for an  obligation  which is in default,  10 per centum or more of
     any class of security of any person who, to the  knowledge  of the Trustee,
     owns 50 per centum or more of the voting securities of the Company; or

<PAGE>

          (9) the Trustee owns on May 15th in any calendar  year in the capacity
     of executor, administrator,  testamentary or inter vivos trustee, guardian,
     committee or conservator, or in any other similar capacity, an aggregate of
     25 per centum or more of the voting securities or of any class of security,
     of any person, the beneficial  ownership of a specified percentage of which
     would have constituted a conflicting  interest under paragraph (6), (7), or
     (8) of this  subsection.  As to any such  securities  of which the  Trustee
     acquired ownership through becoming executor, administrator or testamentary
     trustee of an estate which  included  them, the provisions of the preceding
     sentence  shall not  apply for a period of two years  from the date of such
     acquisition,  to the extent that such securities included in such estate do
     not exceed 25 per centum of such voting  securities or 25 per centum of any
     such class of security. Promptly after May 15th, in each calendar year, the
     Trustee shall make a check of its holdings of such securities in any of the
     above-mentioned  capacities  as of May 15th.  If the Company  fails to make
     payment in full of  principal  or  interest  upon the bonds when and as the
     same become due and  payable,  and such failure  continues  for thirty days
     thereafter,  the Trustee  shall make a prompt check of its holdings of such
     securities in any of the above- mentioned  capacities as of the date of the
     expiration of such thirty-day  period and after such date,  notwithstanding
     the foregoing provisions of this paragraph,  all such securities so held by
     the Trustee with sole or joint control over such  securities  vested in it,
     shall,  but only so long as such failure shall  continue,  be considered as
     though  beneficially  owned by the Trustee for the  purposes of  paragraphs
     (6), (7), and (8) of this subsection (d).

     The specifications of percentages in paragraphs (5) to (9),  inclusive,  of
this subsection  shall not be construed as indicating that the ownership of such
percentages  of the  securities of a person is or is not necessary or sufficient
to  constitute  direct or indirect  control for the purposes of paragraph (3) or
(7) of this subsection.

     For the purposes of paragraphs (6), (7), (8) and (9) of this subsection (d)
only,  (A) the  terms  "security"  and  "securities"  shall  include  only  such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of  indebtedness  issued to evidence an obligation to
repay moneys lent to a person by one or more banks,  trust  companies or banking
firms or any  certificate  of  interest  or  participation  in any such  note or
evidence of  indebtedness;  (B) an  obligation  shall be deemed to be in default
when a default in payment of principal  shall have  continued for thirty days or
more and shall not have been cured;  and (C) the Trustee  shall not be deemed to
be the owner or holder of (i) any security which it holds as collateral security
(as trustee or  otherwise)  for an  obligation  which is not in default as above
defined,  or (ii) any security which it holds as collateral  security under this
Indenture, irrespective of any default hereunder, or (iii) any security which it
holds as agent for collection,  or as custodian,  escrow agent or depositary, or
in any similar representative capacity.

     For the purposes of this  subsection (d) only,  the term "voting  security"
shall mean any security presently  entitling the owner or holder thereof to vote
in the  direction  or  management  of the affairs of a person,  or any  security
issued  under or  pursuant  to any trust,  agreement  or  arrangement  whereby a
trustee or trustees or agent or agents for the owner or holder of such  security
are presently  entitled to vote in the direction or management of the affairs of
a person.

     For the purposes of this  subsection  (d) only, the term  "director"  shall
mean  any  director  of a  corporation  or  any  individual  performing  similar
functions   with  respect  to  any   organization,   whether   incorporated   or
unincorporated.

     For the purposes of this subsection (d) only, the term "executive  officer"
shall  mean the  President,  every  Vice-President,  every  Trust  Officer,  the
Cashier,  the Secretary and the Treasurer of a  corporation,  and any individual
customarily  performing  similar  functions  with  respect to any  organization,
whether  incorporated or  unincorporated,  but shall not include the Chairman of
the Board of Directors.

     For the purposes of this subsection (d) only, the term  "underwriter"  when
used with  reference  to the Company  means every  person who,  within three (3)
years prior to the time as of which the  determination  is made,  has  purchased
from the Company with a view to, or has sold for the Company in connection with,
the distribution of any security of the Company,  or has participated or has had
a direct or indirect participation in any such undertaking,  or has participated
or has had a  participation  in the direct or indirect  underwriting of any such
undertaking, but such term shall not include a person whose interest was limited
to a  commission  from an  underwriter  or dealer not in excess of the usual and
customary distributors' or sellers' commission.

     For the purposes of this  subsection  (d) only,  the term  "Company"  shall
include any obligor on bonds secured hereby.

     (e) The percentages of voting securities and other securities  specified in
subsection  (d) of this  Section  shall be  calculated  in  accordance  with the
following provisions:

          (i) A specified  percentage  of the voting  securities of the Trustee,
     the Company or any other person  referred to in this Section  (each of whom
     is referred to as a "person" in this  subsection  (e)) means such amount of
     the outstanding  voting securities of such person as entitles the holder or
     holders  thereof to cast such specified  percentage of the aggregate  votes
     which the holders of all the outstanding  voting  securities of such person
     are entitled to cast in the  direction or management of the affairs of such
     person.

          (ii) A specified percentage of a class of securities of a person means
     such  percentage  of the  aggregate  amount  of  securities  of  the  class
     outstanding.

          (iii) The term "amount", when used in regard to securities,  means the
     principal  amount if relating to evidences of  indebtedness,  the number of
     shares if relating to capital  shares,  and the number of units if relating
     to any other kind of security.

<PAGE>

          (iv) The term  "outstanding"  means  issued and not held by or for the
     account  of the  issuer.  The  following  securities  shall  not be  deemed
     outstanding within the meaning of this definition:

               (1)  Securities  of an issuer held in a sinking fund  relating to
          securities of the issuer of the same class;

               (2)  Securities  of an issuer held in a sinking fund  relating to
          another class of securities of the issuer, if the obligation evidenced
          by such other class of securities is not in default as to principal or
          interest or otherwise;

               (3)  Securities  pledged by the issuer thereof as security for an
          obligation of the issuer not in default as to principal or interest or
          otherwise:

               (4)  Securities  held in escrow if placed in escrow by the issuer
          thereof;

     provided,  however, that any voting securities of an issuer shall be deemed
     outstanding if any person other than the issuer is entitled to exercise the
     voting rights thereof.

          (v) A  security  shall be  deemed to be of the same  class as  another
     security  if both  securities  confer  upon the holder or  holders  thereof
     substantially the same rights and privileges,  provided,  however, that, in
     the case of  secured  evidences  of  indebtedness,  all of which are issued
     under a single  indenture,  differences  in the interest  rates or maturity
     dates  of  various  series  thereof  shall  not  be  deemed  sufficient  to
     constitute such series different classes, and provided,  further,  that, in
     the  case  of  unsecured  evidences  of  indebtedness,  differences  in the
     interest rates or maturity dates thereof shall not be deemed  sufficient to
     constitute  them securities of different  classes,  whether or not they are
     issued under a single indenture.

     (f) If a separate or co-trustee  is appointed  pursuant to Section 114, the
provisions of this Section which have been made  specifically  applicable to the
Trustee,  shall also apply to any separate or cotrustee,  except that in case of
the resignation of a separate or cotrustee such  resignation and the appointment
of a  successor  shall  (subject to the  provisions  of  subsection  (c) of this
Section) be governed by the provisions of paragraph (3) of Section 114.

     SECTION  110.  (a)  Subject to the  provisions  of  subsection  (b) of this
Section,  if the  Trustee  shall be or  shall  become a  creditor,  directly  or
indirectly,  secured or unsecured,  of the Company within four months prior to a
default (as defined in the last paragraph of this subsection),  or subsequent to
such a default,  then, unless and until such default shall be cured, the Trustee
shall set apart and hold in a special  account  for the  benefit of the  Trustee
individually,  the  holders of the  bonds,  and the  holders of other  indenture
securities (as defined in the last paragraph of this subsection)

<PAGE>

          (1) an amount  equal to any and all  reductions  in the amount due and
     owing upon any claim as such  creditor in respect of  principal or interest
     effected  after the  beginning  of such four  months'  period  and valid as
     against  the  Company and its other  creditors,  except any such  reduction
     resulting  from the receipt or  disposition  of any  property  described in
     paragraph  (2) of this  subsection  or from the  exercise  of any  right of
     set-off which the Trustee could have  exercised if a petition in bankruptcy
     had been filed by or against the Company upon the date of such default; and

          (2) all  property  received in respect of any claim as such  creditor,
     either as security therefor,  or in satisfaction or composition thereof, or
     otherwise  after the  beginning of such four months'  period,  or an amount
     equal to the  proceeds  of any such  property,  if  disposed  of,  subject,
     however,  to the rights,  if any, of the Company and its other creditors in
     such property or such proceeds.

     Nothing herein contained, however, shall affect the right of the Trustee

          (A) to retain for its own account (i) payments  made on account of any
     such claim by any person  (other than the Company)  who is liable  thereon,
     and  (ii)  the  proceeds  of the bona  fide  sale of any such  claim by the
     Trustee  to  a  third  person,  and  (iii)   distributions  made  in  cash,
     securities,  or other  property  in respect  of claims  filed  against  the
     Company in bankruptcy or receivership or in proceedings for  reorganization
     pursuant to the Bankruptcy Act or applicable State law;

          (B) to realize,  for its own account,  upon any property held by it as
     security  for any such  claim,  if such  property  was so held prior to the
     beginning of such four months' period;

          (C) to  realize,  for its own  account,  but only to the extent of the
     claim hereinafter  mentioned,  upon any property held by it as security for
     any such claim,  if such claim was created after the beginning of such four
     months'  period  and  such  property  was  received  as  security  therefor
     simultaneously with the creation thereof,  and if the Trustee shall sustain
     the burden of proving  that at the time such  property  was so received the
     Trustee had no reasonable cause to believe that a default as defined in the
     last paragraph of this subsection would occur within four months; or

          (D) to receive  payment on any claim  referred to in paragraph  (B) or
     (C), against the release of any property held as security for such claim as
     provided in paragraph  (B) or (C), as the case may be, to the extent of the
     fair value of such property.

For the purposes of paragraphs (B), (C), and (D), property substituted after the
beginning of such four months'  period for property held as security at the time
of such  substitution  shall,  to the extent of the fair  value of the  property
released, have the same status as the property released, and, to the extent that
any claim  referred to in any of such  paragraphs is created in renewal of or in
substitution  for or for the purpose of repaying or refunding  any  pre-existing
claim of the Trustee as such creditor,  such claim shall have the same status as
such pre-existing claim.

     If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds  thereof shall be apportioned  between the
Trustee, the bondholders,  and the holders of other indenture securities in such
manner that the Trustee,  the  bondholders,  and the holders of other  indenture
securities  realize,  as a result of  payments  from such  special  account  and
payments of  dividends  on claims  filed  against the Company in  bankruptcy  or
receivership or in proceedings for reorganization pursuant to the Bankruptcy Act
or applicable State law, the same percentage of their respective claims, figured
before  crediting to the claim of the Trustee anything on account of the receipt
by it from the  Company of the funds and  property in such  special  account and
before crediting to the respective claims of the Trustee,  the bondholders,  and
the holders of other indenture  securities dividends on claims filed against the
Company in bankruptcy  or  receivership  or in  proceedings  for  reorganization
pursuant to the  Bankruptcy  Act or  applicable  State law, but after  crediting
thereon receipts on account of the indebtedness  represented by their respective
claims from all sources  other than from such  dividends  and from the funds and
property  so held in  such  special  account.  As used in this  paragraph,  with
respect to any claim, the term "dividends"  shall include any distribution  with
respect to such claim,  in  bankruptcy or  receivership  or in  proceedings  for
reorganization  pursuant to the Bankruptcy Act or applicable  State law, whether
such distribution is made in cash, securities,  or other property, but shall not
include any such  distribution  with respect to the secured portion,  if any, of
such claim. The court in which such bankruptcy,  receivership, or proceeding for
reorganization  is pending shall have  jurisdiction (i) to apportion between the
Trustee,  the  bondholders,  and the holders of other indenture  securities,  in
accordance with the provisions of this paragraph, the funds and property held in
such  special  account  and  the  proceeds  thereof,  or  (ii)  in  lieu of such
apportionment,  in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee,  the  bondholders,  and the holders of other indenture  securities,
with  respect  to  their  respective  claims,  in which  event  it shall  not be
necessary  to  liquidate  or to appraise  the value of any  securities  or other
property held in such special  account or as security for any such claim,  or to
make a specific  allocation  of such  distributions  as between  the secured and
unsecured  portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula. To the extent that the claim of the Trustee
has been  reduced in amount or  satisfied  by the  receipt of moneys or property
which later have been  apportioned to the  Bondholders  and the holders of other
indenture securities on an accounting,  as hereinabove  provided,  such claim of
the Trustee shall be reinstated in amount.

     Any Trustee who has  resigned or been removed  after the  beginning of such
four months'  period shall be subject to the  provisions  of this  subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such four months' period,  it shall be
subject  to the  provisions  of this  subsection  if and  only if the  following
conditions exist--

<PAGE>

          (i) the  receipt of property  or  reduction  of claim which would have
     given rise to the  obligation to account,  if such Trustee had continued as
     trustee, occurred after the beginning of such four months' period; and

          (ii) such receipt of property or reduction  of claim  occurred  within
     four months after such resignation or removal.

     As used in this  Section,  the term  "default"  means any  failure  to make
payment in full of the principal of or interest upon the bonds or upon the other
indenture  securities  when and as such  principal  or interest  becomes due and
payable;  and the term "other indenture  securities" means securities upon which
the  Company  is an obligor  (as  defined  in the Trust  Indenture  Act of 1939)
outstanding  under  any other  indenture  (a) under  which the  Trustee  is also
trustee, (b) which contains provisions  substantially  similar to the provisions
of this  subsection,  and (c) under  which a  default  exists at the time of the
apportionment of the funds and property held in said special account.

     (b) There shall be excluded from the  operation of  subsection  (a) of this
Section a creditor relationship arising from--

          (1) the  ownership  or  acquisition  of  securities  issued  under any
     indenture,  or any security or securities  having a maturity of one year or
     more at the time of  acquisition  by the  Trustee;  and for the purposes of
     this paragraph the term "security"  shall mean any note,  bond,  debenture,
     evidence of  indebtedness,  certificate of interest or participation in any
     profit-sharing  agreement,  collateral-trust  certificate,  preorganization
     certificate,  certificate  of deposit for a security,  or, in general,  any
     interest or instrument commonly known as a "security" or any certificate of
     interest or participation in, temporary or interim certificate for, receipt
     for,  guaranty of, or warrant or right to subscribe to or purchase,  any of
     the fore going;

          (2) advances  authorized  by a  receivership  or  bankruptcy  court of
     competent  jurisdiction  or by this Indenture for the purpose of preserving
     the property  subject to the lien of this Indenture or of  discharging  tax
     liens or other liens or encumbrances,  prior to the lien of this Indenture,
     on the trust  estate,  if notice of such  advance and of the  circumstances
     surrounding  the making thereof is given to the  bondholders as provided in
     subsections  (a), (b) and (c) of Section 53 hereof with respect to advances
     by the Trustee as such;

          (3)  disbursements  made in the  ordinary  course of  business  in the
     capacity  of  trustee  under  an  indenture,   transfer  agent,  registrar,
     custodian,  paying  agent,  fiscal agent or  depositary,  or other  similar
     capacity;

          (4) an  indebtedness  created  as a result  of  services  rendered  or
     premises  rented;  or an  indebtedness  created  as a  result  of  goods or
     securities  sold in a cash  transaction as defined in the last paragraph of
     this subsection;

<PAGE>

          (5) the  ownership of stock or of other  securities  of a  corporation
     organized  under the  provisions  of Section 25 (a) of the Federal  Reserve
     Act, as amended, which is directly or indirectly a creditor of the Company;
     or

          (6) the  acquisition,  ownership,  acceptance  or  negotiation  of any
     drafts, bills of exchange, acceptances or obligations which fall within the
     classification of  self-liquidating  paper as defined in the last paragraph
     of this subsection.

     As used in this  Section,  the  term  "cash  transaction"  shall  mean  any
transaction  in which full payment for goods or  securities  sold is made within
seven days after delivery of the goods or securities in currency or in checks or
other  orders  drawn upon banks or bankers and  payable  upon  demand;  the term
"self-liquidating  paper" shall mean any draft, bill of exchange,  acceptance or
obligation which is made,  drawn,  negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacture, shipment, storage or
sale of goods, wares or merchandise and which is secured by documents evidencing
title to, possession of, or a lien upon, the goods,  wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or merchandise
previously  constituting the security,  provided the security is received by the
Trustee  simultaneously with the creation of the creditor  relationship with the
obligor arising from the making, drawing, negotiating or incurring of the draft,
bill of exchange, acceptance or obligation; and the term "Trustee" shall include
any separate or co-trustee appointed pursuant to Section 114.

     As used in this Section,  the term  "Company"  shall include any obligor on
bonds secured hereby.

     SECTION  111. The Trustee may at any time resign and be  discharged  of the
trusts hereby created by giving written notice to the Company specifying the day
upon which such resignation  shall take effect and thereafter  publishing notice
thereof,  in one daily newspaper  printed in the English language and of general
circulation  in the City of Chicago,  State of  Illinois,  once in each of three
successive  calendar weeks, in each case on any business day of the week,  which
need not be the same day in each week,  and such  resignation  shall take effect
upon the day  specified in such notice  unless  previously  a successor  trustee
shall  have been  appointed  by the  bondholders  or the  Company  in the manner
hereinafter  provided in Section 113, and in such event such  resignation  shall
take effect  immediately  on the  appointment of such  successor  trustee.  This
Section shall not be applicable to resignations pursuant to Section 109.

     SECTION  112.  The Trustee may be removed at any time by an  instrument  or
concurrent  instruments  in  writing  filed  with the  Trustee  and  signed  and
acknowledged by the holders of a majority in principal  amount of the bonds then
outstanding  (determined as provided in Section 2 hereof) or by their  attorneys
in fact duly authorized.

     In case at any time the Trustee  shall  cease to be eligible in  accordance
with the provisions of Section 96, then the Trustee shall resign  immediately in
the manner and with the effect  specified in Section 111, and, in the event that
the Trustee  does not resign  immediately  in such case,  then it may be removed
forthwith by an instrument or concurrent  instruments  in writing filed with the
Trustee  and either  (a)  signed by the  President  or a  Vice-President  of the
Company  with  its  corporate  seal  attested  by a  Secretary  or an  Assistant
Secretary  of the  Company or (b) signed and  acknowledged  by the  holders of a
majority in principal amount of the bonds then outstanding or by their attorneys
in fact duly authorized.

     SECTION  113.  In case at any time the  Trustee  shall  resign  or shall be
removed  (unless the Trustee shall be removed as provided in  subsection  (c) of
Section  109 in which  event the  vacancy  shall be filled as  provided  in said
subsection) or shall become incapable of acting, or shall be adjudged a bankrupt
or  insolvent,  or if a  receiver  of the  Trustee or of its  property  shall be
appointed,  or if any public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,  a vacancy shall be deemed to exist in the office of Trustee, and a
successor  or  successors  may be  appointed  by the  holders of a  majority  in
principal amount of the bonds then outstanding hereunder (determined as provided
in Section 2 hereof),  by an  instrument or  concurrent  instruments  in writing
signed and  acknowledged by such  bondholders or by their attorneys in fact duly
authorized, and delivered to such new trustee,  notification thereof being given
to the Company and the retiring trustee;  provided,  nevertheless,  that until a
new trustee shall be appointed by the bondholders as aforesaid,  the Company, by
instrument  executed by order of its Board of Directors  or Executive  Committee
and duly  acknowledged  by its  President  or a  Vice-President,  may  appoint a
trustee to fill such  vacancy  until a new  trustee  shall be  appointed  by the
bondholders as herein  authorized.  The Company shall publish notice of any such
appointment  made by it in the manner  provided in Section  111. Any new trustee
appointed  by the  Company  shall,  immediately  and  without  further  act,  be
superseded by a trustee appointed by the bondholders as above provided,  if such
appointment by the bondholders be made prior to the expiration of one year after
the first  publication  of notice of the  appointment  of the new trustee by the
Company.

     If in a proper case no  appointment  of a successor  trustee  shall be made
pursuant to the  foregoing  provisions  of this Section  within 6 months after a
vacancy  shall have  occurred in the office of  trustee,  the holder of any bond
outstanding  hereunder  or any  retiring  trustee  may  apply  to any  court  of
competent  jurisdiction to appoint a successor trustee. Said court may thereupon
after such notice, if any, as such court may deem proper and prescribe,  appoint
a successor trustee.

     If the  Trustee  resigns  because of a conflict  of interest as provided in
subsection  (a) of Section 109 and a  successor  has not been  appointed  by the
Company or the  bondholders  or, if appointed,  has not accepted the appointment
within 30 days after the date of such  resignation,  the  resigning  Trustee may
apply to any court of competent  jurisdiction for the appointment of a successor
trustee.

     Any trustee appointed under the provisions of this Section in succession to
the  Trustee  shall be a bank or trust  company  eligible  under  Section 96 and
qualified under Section 109.

     Any trustee  which has resigned or been removed shall  nevertheless  retain
the lien upon the mortgaged or pledged property, including all property or funds
held or  collected  by the  trustee as such,  to secure the  amounts  due to the
trustee as compensation,  reimbursement,  expenses and indemnity, afforded to it
by Section 106.

     SECTION  114. At any time or times,  for the purpose of  conforming  to any
legal  requirements,  restrictions or conditions in any State or jurisdiction in
which any part of the  mortgaged  and  pledged  property  then  subject  to this
Indenture  may be  located,  the  Company  and the  Trustee  shall have power to
appoint, and, upon the request of the Trustee the Company shall for such purpose
join with the  Trustee  in the  execution,  delivery  and  performance  of,  all
instruments and agreements necessary or proper to appoint another corporation or
one or more persons  approved by the Trustee,  either to act as separate trustee
or trustees,  or co-trustee or co-trustees  jointly with the Trustee,  of all or
any of the property  subject to the lien  hereof.  In the event that the Company
shall not have joined in such appointment within 15 days after the receipt by it
of a  request  so to do,  the  Trustee  alone  shall  have  power  to make  such
appointment.

     Every separate trustee, every co-trustee and every successor trustee, other
than any trustee  which may be appointed as successor to American  National Bank
and Trust Company of Chicago shall, to the extent  permitted by law, but to such
extent only, be appointed  subject to the following  provisions and  conditions,
namely:

          (1) The rights,  powers,  duties and obligations  conferred or imposed
     upon  trustees  hereunder or any of them shall be conferred or imposed upon
     and  exercised  or performed  by the Trustee and such  separate  trustee or
     separate  trustees  or  co-trustee  or  co-trustees  jointly,  as  shall be
     provided in the supplemental  indenture appointing such separate trustee or
     separate  trustees or cotrustee or co- trustees,  except to the extent that
     under any law of any  jurisdiction  in which any particular act or acts are
     to be performed the Trustee shall be  incompetent or unqualified to perform
     such  act  or  acts,  in  which  event  such  rights,  powers,  duties  and
     obligations  shall be exercised and  performed by such separate  trustee or
     separate trustees or co-trustee or co-trustees;

          (2) The bonds secured hereby shall be authenticated and delivered, and
     all powers, duties,  obligations and rights,  conferred upon the Trustee in
     respect of the  custody of all bonds and other  securities  and of all cash
     pledged or  deposited  hereunder,  shall be  exercised  solely by  American
     National  Bank and Trust  Company of Chicago or its  successor in the trust
     hereunder;

          (3) The  Company  and the  Trustee,  at any time by an  instrument  in
     writing  executed by them jointly,  may accept the resignation of or remove
     any  separate  trustee  or  co-trustee  appointed  under  this  Section  or
     otherwise,  and, upon the request of the Trustee,  the Company  shall,  for
     such  purpose,  join  with  the  Trustee  in the  execution,  delivery  and
     performance of all instruments  and agreements  necessary or proper to make
     effective such resignation or removal.  In the event that the Company shall
     not have joined in such action  within 15 days after the receipt by it of a
     request  so to do,  the  Trustee  alone  shall  have  power to accept  such
     resignation  or to  remove  any such  separate  trustee  or  co-trustee.  A
     successor to a separate trustee or co-trustee so resigned or removed may be
     appointed in the manner provided in this Section;

<PAGE>

          (4) No trustee  hereunder shall be personally  liable by reason of any
     act or omission of any other trustee hereunder;

          Any notice,  request or other writing,  by or on behalf of the holders
     of the bonds  delivered  to  American  National  Bank and Trust  Company of
     Chicago,  or its successor in the trust hereunder,  shall be deemed to have
     been  delivered to all of the then trustees or co- trustees as  effectually
     as if delivered to each of them. Every instrument appointing any trustee or
     trustees other than a successor to American National Bank and Trust Company
     of Chicago shall refer to this Indenture and the conditions in this Article
     expressed,  and upon the  acceptance in writing by such trustee or trustees
     or  co-trustee  or  co-trustees,  he,  they or it shall be vested  with the
     estates or property  specified  in such  instrument,  either  jointly  with
     American  National Bank and Trust Company of Chicago or its  successor,  or
     separately,  as  may be  provided  therein,  subject  to  all  the  trusts,
     conditions  and  provisions of this  Indenture;  and every such  instrument
     shall be filed with American  National Bank and Trust Company of Chicago or
     its successor in the trust hereunder.  Any separate trustee or trustees, or
     any co- trustee or co-trustees, may at any time by an instrument in writing
     constitute  American  National  Bank and Trust  Company  of  Chicago or its
     successor   in  the   trust   hereunder   his,   their  or  its   agent  or
     attorney-in-fact, with full power and authority, to the extent which may be
     permitted  by law, to do all acts and things and  exercise  all  discretion
     authorized  or permitted by him, them or it, for and in behalf of him, them
     or it,  and in his,  their or its name.  In case any  separate  trustee  or
     trustees or co-trustee or co-trustees, or a successor to any of them, shall
     die,  become  incapable of acting,  resign or be removed,  all the estates,
     property,  rights,  powers, trusts, duties and obligations of said separate
     trustee or  co-trustee,  so far as permitted by law, shall be vested in and
     be exercised by American  National Bank and Trust Company of Chicago or its
     successor in the trust hereunder,  without the appointment of a new trustee
     as successor to such separate trustee or co-trustee.

     SECTION 115. Any  successor  trustee  appointed  hereunder  shall  execute,
acknowledge  and  deliver  to his or its  predecessor  trustee,  and also to the
Company, an instrument accepting such appointment hereunder,  and thereupon such
successor  trustee,  without any further act, deed or  conveyance,  shall become
fully vested with all the estates,  properties,  rights,  powers, trusts, duties
and obligations of his or its predecessor in trust  hereunder,  with like effect
as if originally  named as trustee herein;  but the trustee ceasing to act shall
nevertheless,  on the  written  request  of  the  Company,  or of the  successor
trustee, or of the holders of 10 percentum in principal amount of the bonds then
outstanding  hereunder,  execute,  acknowledge  and deliver such  instruments of
conveyance  and further  assurance and do such other things as may reasonably be
required for more fully and certainly  vesting and  confirming in such successor
trustee  all the  right,  title and  interest  of the  trustee to which he or it
succeeds, in and to the mortgaged and pledged property and such rights,  powers,
trusts, duties and obligations,  and the trustee ceasing to act shall also, upon
like request, pay over, assign and deliver to the successor trustee any money or
other  property  subject to the lien of this  Indenture,  including  any pledged
securities,  which  may  then  be in his or its  possession.  Should  any  deed,
conveyance  or  instrument  in writing  from the  Company be required by the new
trustee  for more  fully and  certainly  vesting in and  confirming  to such new
trustee such estates, properties, rights, powers, trusts and duties, any and all
such deeds,  conveyances  and  instruments  in writing  shall,  on  request,  be
executed, acknowledged and delivered by the Company.

     SECTION 116. Any  corporation  into which the Trustee may be merged or with
which it may be  consolidated  or any  corporation  resulting from any merger or
consolidation  to which the Trustee shall be a party or any corporation to which
substantially  all the  business  and assets of the Trustee may be  transferred,
provided such  corporation  shall be eligible under the provisions of Section 96
and  qualified  under  Section  109 shall be the  successor  trustee  under this
Indenture,  without the execution or filing of any paper or the  performance  of
any further act on the part of any other parties hereto,  anything herein to the
contrary  notwithstanding.  In case any of the bonds  contemplated  to be issued
hereunder shall have been authenticated but not delivered, any such successor to
the  Trustee  may,  subject  to the same  terms and  conditions  as though  such
successor  had  itself  authenticated  such  bonds,  adopt  the  certificate  of
authentication  of the  original  Trustee or of any  successor  to it as trustee
hereunder, and deliver the said bonds so authenticated;  and in case any of said
bonds  shall not have been  authenticated,  any  successor  to the  Trustee  may
authenticate  such bonds either in the name of any  predecessor  hereunder or in
the name of the successor trustee, and in all such cases such certificates shall
have the full force  which it is  anywhere  in said  bonds or in this  Indenture
provided that the certificate of the Trustee shall have; provided, however, that
the right to  authenticate  bonds in the name of the Trustee shall apply only to
its successor or successors by merger or consolidation or sale as aforesaid.

                                  ARTICLE XIX.

                             DISCHARGE OF MORTGAGE.

     SECTION  117.  The Trustee  (and any trustee or trustees or  co-trustee  or
co-trustees appointed pursuant to Article XVIII hereof) may, and upon request of
the Company  shall,  cancel and discharge the lien of these  presents and of all
indentures  supplemental  hereto,  and execute  and deliver to the Company  such
deeds and  instruments  as shall be  requisite to satisfy the lien hereof and of
all indentures supplemental hereto, and reconvey and transfer to the Company the
mortgaged and pledged property,  whenever all indebtedness  secured hereby shall
have been paid, including all proper charges of the Trustee hereunder.

     Bonds and interest  obligations  for the payment of which and bonds for the
redemption  of which moneys  shall have been set apart by or deposited  with the
Trustee  with  irrevocable  direction  so to  apply  the  same,  subject  to the
provisions of Section 130 hereof (with or without any additional  right given to
the holders to surrender their bonds and obtain therefrom payment therefor prior
to the redemption  date) shall for all purposes of this Article XIX be deemed to
have been paid;  provided that in case of redemption the notice requisite to the
validity of such  redemption  shall have been given or  arrangements  shall have
been made  insuring to the  satisfaction  of the  Trustee  that the same will be
given.

                                   ARTICLE XX.

                            MEETINGS OF BONDHOLDERS.

     SECTION 118.  Modifications and alterations of this Indenture and/or of any
indenture  supplemental  hereto  and/or of the  rights  and  obligations  of the
Company and/or of the holders of outstanding  bonds and coupons issued hereunder
may be made as provided in the nine next succeeding Sections hereof numbered 119
to 127, both inclusive.

     SECTION 119. The Trustee may at any time call a meeting of the  bondholders
affected by the business to be submitted to the meeting and it shall call such a
meeting on the written request of the Company, given pursuant to a resolution of
its Board of  Directors.  The  holders  of fifteen  per centum  (15%) or more in
principal  amount of the bonds  affected by the  business to be submitted to the
meeting  outstanding  hereunder  at the time of such  request  may  request  the
Trustee to call such a meeting.  In the event of the  Trustee's  failing for ten
(10) days to call a meeting  after being  thereunto  requested by the Company or
the bondholders as above set forth, holders of outstanding bonds affected by the
business to be submitted  to the meeting to the amount  above  specified in this
Section or the Company,  pursuant to resolution  of its Board of Directors,  may
call such  meeting.  Every such  meeting  called by and at the  instance  of the
Trustee  shall  be held at the  principal  office  of the  Trustee,  or,  at the
election of the Trustee, at such place in the Borough of Manhattan,  The City of
New York,  as shall be selected by the Trustee or, with the written  approval of
the  Company,  at any other place in the United  States of America,  and written
notice  thereof,  stating the place and time  thereof  and in general  terms the
business  to be  submitted,  shall be mailed by the Trustee not less than thirty
(30) days before such meeting (a) to each registered holder of bonds affected by
the business to be submitted to the meeting then outstanding hereunder addressed
to him at his address appearing on the registry books, (b) to each holder of any
such bond payable to bearer who shall have filed with the Trustee an address for
notices to be  addressed to him,  (c) to all other  bondholders  whose names and
addresses are preserved at the time by the Trustee,  as provided in  subdivision
(a)  of  Section  51  hereof,  and  (d)  to  the  Company  addressed  to  it  at
Indianapolis,  Indiana  (or at such other  address as may be  designated  by the
Company from time to time) and shall be published by the Trustee at least once a
week for four (4) successive calendar weeks immediately preceding the meeting in
a daily newspaper  printed in the English  language and published and of general
circulation  in the  Borough  of  Manhattan,  The  City of New  York;  provided,
however,  that the  mailing of such  notice to any  bondholders  affected by the
business  submitted to the meeting shall in no case be a condition  precedent to
the validity of any action taken at such  meeting.  If such meeting is called by
or at the  instance  either of the  Company or the  bondholders  affected by the
business submitted to the meeting,  it shall be held at such place in the United
States of America as may be  specified  in the notice  calling  such meeting and
notice thereof shall be sufficient for all purposes hereof if given by newspaper
publication  as  aforesaid  stating  the  place and time of the  meeting  and in
general terms the business to be transacted. Any meeting of bondholders shall be
valid  without  notice if the  holders  of all bonds  affected  by the  business
submitted to the meeting then outstanding  hereunder are present in person or by
proxy  and if the  Company  and the  Trustee  are  present  by  duly  authorized
representatives,  or if notice is waived in writing  before or after the meeting
by the Company,  the holders of all bonds affected by the business  submitted to
the meeting outstanding  hereunder or by such as are not present in person or by
proxy and by the Trustee.

<PAGE>

     SECTION  120.  Officers  and nominees of the Trustee and of the Company may
attend and be heard at such  meeting,  but as such shall not be entitled to vote
thereat.  Attendance by bondholders  may be in person or by proxy. In order that
the  holders of bonds  payable to bearer and their  proxies  may attend and vote
without  producing  their bonds,  the Trustee,  with respect to any such meeting
called by the Trustee,  may make and from time to time vary such  regulations as
it shall  think  fit for  deposit  of bonds  with any  banks,  bankers  or trust
companies,  and for the issue to the persons depositing the same of certificates
by such depositaries entitling the holders thereof to be present and vote at any
such meeting and to appoint  proxies to represent  them and vote for them at any
such  meeting in the same way as if the persons so present  and  voting,  either
personally or by proxy, were the actual bearers of the bonds in respect of which
such certificates  shall have been issued,  and any regulations so made shall be
binding and effective. If any such meeting shall have been called by bondholders
affected by the business submitted to the meeting or by the Company as aforesaid
upon  failure of the Trustee to call the same after  having been so requested to
do under the  provisions of Section 119 hereof,  regulations  to like effect for
such deposit of bonds with an issue of certificates by any bank or trust company
organized  under  the laws of the  United  States  of  America  or of any  state
thereof,  having  a  capital  of not  less  than One  hundred  thousand  dollars
($100,000),  shall be similarly binding and effective for all purposes hereof if
adopted or approved by the  bondholders  calling such meeting or by the Board of
Directors of the Company, if such meeting shall have been called by the Company,
provided that in either such case copies of such regulations shall be filed with
the Trustee.

     SECTION 121. Subject to the  restrictions  specified in Section 120 hereof,
any  registered  holder of bonds affected by the business to be submitted at the
meeting  outstanding  hereunder and any holder of a certificate  provided for in
Section 120  hereof,  shall be entitled in person or by proxy to attend and vote
at such  meeting as holder of the bonds  registered  or certified in the name of
such holder without  producing such bonds.  All others seeking to attend or vote
at such  meeting  in person or by proxy  must,  if  required  by any  authorized
representative of the Trustee or the Company or by any other bondholder affected
by the business to be submitted at the meeting,  produce the bonds claimed to be
owned or  represented  at such meeting,  and every one seeking to attend or vote
shall, if required as aforesaid, produce such further proof of bond ownership or
personal  identity as shall be satisfactory to the authorized  representative of
the Trustee,  or if none be present then to the Inspectors of Votes  hereinafter
provided for.  Proxies shall be acknowledged as required for an instrument to be
recorded in the State of Illinois, and all proxies and certificates presented at
any meeting  shall be delivered to said  Inspectors  of Votes and filed with the
Trustee.

     SECTION 122.  Persons  named by the Trustee if  represented  at the meeting
shall act as temporary Chairman and Secretary, respectively, of the meeting, but
if the Trustee shall not be  represented  or shall fail to nominate such persons
or if any person so nominated shall not be present,  the bondholders and proxies
present  and  entitled  to vote shall by a majority  vote,  irrespective  of the
amount of their  holdings,  elect other  persons from those present to fill such
vacancy or  vacancies.  A permanent  Chairman and a permanent  Secretary of such
meeting  shall be elected  from those  present by the  bondholders  and  proxies
present and entitled to vote by a majority  vote  irrespective  of the amount of
their holdings.  The Trustee,  if represented at the meeting,  shall appoint two
Inspectors of Votes who shall count all votes cast at such meeting, except votes
on the election of a Chairman and Secretary,  both  temporary and permanent,  as
aforesaid,  and who shall  make and file  with the  permanent  Secretary  of the
meeting their verified  written report in duplicate of all such votes so cast at
said meeting.  If the Trustee shall not be  represented  at the meeting or shall
fail to nominate such Inspectors of Votes or if either  Inspector of Votes fails
to  attend  the  meeting  the  vacancy  shall be filled  by  appointment  by the
permanent Chairman of the meeting.

     SECTION 123.  Subject to the  provisions of this Section and of Section 127
hereof,  the holders of not less than  sixty-six and  two-thirds  per centum (66
2/3%) in  principal  amount  of the bonds  outstanding  hereunder  (computed  as
provided in Section 2 hereof)  when such meeting is held must be present at such
meeting  in  person  or by  proxy  in  order  to  constitute  a  quorum  for the
transaction of business,  less than a quorum,  however, having power to adjourn;
provided,  however,  that in case  more  than  one  series  of  bonds  shall  be
outstanding  under this  Indenture,  and any  business to be  submitted  to such
meeting  shall  affect the rights of holders of the bonds of one or more  series
and shall not  affect  the  rights of holders of the bonds of one or more of the
other series,  then only holders of the bonds of the series to be affected shall
have the right to notice of or to attend or vote at any such meeting or shall be
counted for the purpose of a quorum. The determination of the Trustee as to what
series  of bonds the  rights  of the  holders  of which  are  affected  shall be
conclusive.  If such  meeting is  adjourned  by less than a quorum for more than
fourteen (14) days,  notice thereof shall  forthwith be mailed by the Trustee if
such meeting shall have been called by the Trustee (a) to the Company  addressed
to it at Indianapolis, Indiana (or at such other address as may be designated by
the  Company in writing  from time to time),  (b) to each  registered  holder of
bonds  entitled to notice then  outstanding  hereunder  addressed  to him at his
address appearing on the registry books, and (c) to each holder of any such bond
payable to bearer who shall have filed with the Trustee an address for  notices,
and (d) to every other  bondholder  whose name and address is  preserved  at the
time by the Trustee,  as provided in  subdivision  (a) of Section 51 hereof,  in
each case addressed to him at such address, and shall be published at least once
in each  fourteen  (14) day  period  of such  adjournment  in a daily  newspaper
printed in the English language and published and of general  circulation in the
Borough of Manhattan,  The City of New York.  Failure to mail such notice to any
such  bondholder as aforesaid shall in no case affect the validity of any action
taken at any meeting held  pursuant to such  adjournment.  If such meeting shall
have been  called by  bondholders  or by the  Company  after the  failure of the
Trustee to call the same after being  requested so to do in accordance  with the
provisions of Section 119 hereof,  notice of such adjournment  shall be given by
the permanent Chairman and permanent  Secretary of the meeting in the newspapers
and for the  number  of times  above  specified  in this  Section  and  shall be
sufficient if so given.

     SECTION  124.  Subject to the  provisions  of Section  123 and  Section 127
hereof, any modification or alteration of this Indenture and/or of any indenture
supplemental  hereto and/or of the rights and  obligations of the Company and/or
of the holders of bonds and coupons  issued here under in any  particular may be
made at a meeting of bondholders  duly convened and held in accordance  with the
provisions  of  this  Article,  but  only  by  resolution  duly  adopted  by the
affirmative vote of the holders of sixty-six and two-thirds per centum (66%%) or
more in  principal  amount  of the  bonds  entitled  to  vote  at  such  meeting
outstanding  hereunder  (computed  as  provided  in Section 2 hereof)  when such
meeting is held,  and  approved by  resolution  of the Board of Directors of the
Company as hereinafter specified;  provided,  however, that no such modification
or  alteration  shall,  without  the  consent of the  holder of any bond  issued
hereunder  affected  thereby,  permit (1) the  extension  of the maturity of the
principal of such bond, or (2) the reduction in the rate of interest  thereon or
any other  modification in the terms of payment of such principal or interest or
(3) the creation of any lien  ranking  prior to, or on a parity with the lien of
this  Indenture  with  respect  to any  of the  property  mortgaged  or  pledged
hereunder or (4) the deprivation of any non-assenting  bondholder of a lien upon
the mortgaged and pledged  property for the security of his bonds  (subject only
to the lien of  taxes,  assessments  or  governmental  charges  not then due and
delinquent  and to any mortgage or other liens existing upon said property which
are prior hereto at the date of the calling of any such bondholders' meeting) or
(5) the reduction of the  percentage  required by the provisions of this Section
for the  taking of any  action  under  this  Section  with  respect  to any bond
outstanding hereunder. For all purposes of this Article, the Trustee, subject to
the  provisions of Sections 97 and 98, shall be entitled to rely upon an opinion
of counsel with  respect to the extent,  if any, as to which any action taken at
such  meeting  affects the rights under this  Indenture  or under any  indenture
supplemental hereto of any holders of bonds then outstanding hereunder.

     SECTION 125. A record in duplicate  of the  proceedings  of each meeting of
bondholders  shall be prepared  by the  permanent  Secretary  of the meeting and
shall have attached thereto the original reports of the Inspectors of Votes, and
affidavits by one or more persons  having  knowledge of the facts showing a copy
of the notice of the meeting and a copy of the notice of adjournment thereof, if
required  under the  provisions  of Section  123 hereof,  and showing  that said
notices  were mailed and  published  as provided in Section 119 hereof and, in a
proper case, as provided in Section 123 hereof.  Such record shall be signed and
verified by the affidavits of the permanent Chairman and the permanent Secretary
of the meeting,  and one duplicate thereof shall be delivered to the Company and
the other to the Trustee for  preservation by the Trustee.  Any record so signed
and verified shall be proof of the matters  therein stated until the contrary is
proved, and if such record shall also be signed and verified by the affidavit of
a duly authorized  representative  of the Trustee,  such meeting shall be deemed
conclusively  to have  been  duly  convened  and held and such  record  shall be
conclusive,  and any resolution or proceeding stated in such record to have been
adopted or taken shall be deemed conclusively to have been duly adopted or taken
by such meeting.  A true copy of any resolution adopted by such meeting shall be
mailed by the  Trustee to each  registered  holder of bonds  entitled to vote at
such meeting outstanding  hereunder addressed to him at his address appearing on
the  registry  books and to each  holder of any such bond  payable to bearer who
shall have filed with the  Trustee an address  for  notices,  and to every other
bondholder  whose name and address is preserved  at the time by the Trustee,  as
provided in subdivision (a) of Section 51 hereof,  in each case addressed to him
at such  address,  and proof of such  mailing by the  affidavit  of some  person
having  knowledge  of the fact shall be filed with the  Trustee,  but failure to
mail  copies of such  resolution  as  aforesaid  shall not affect  the  validity
thereof. No such resolution shall be binding until and unless such resolution is
approved by resolution of the Board of Directors of the Company, a copy of which
resolution  of  approval,  if any,  shall be  certified  by the  Secretary or an
Assistant  Secretary  of the Company and filed by the Company  with the Trustee,
but if such resolution of the Board of Directors of the Company is adopted and a
certified  copy thereof is filed with the  Trustee,  the  resolution  so adopted
shall be deemed conclusively to be binding upon the Company, the Trustee and the
holders of all bonds and coupons  issued  hereunder,  at the expiration of sixty
(60) days after such filing, except in the event of a final decree of a court of
competent  jurisdiction  setting aside such resolution,  or annulling the action
taken  thereby  in a legal  action or  equitable  proceeding  for such  purposes
commenced  within such sixty (60) day period,  provided,  however,  that no such
resolution  of the  bondholders,  or of the  Company,  shall in any manner be so
construed as to change or modify any of the rights, immunities or obligations of
the Trustee without its written assent thereto.

     SECTION  126.  Bonds  authenticated  and  delivered  after  the date of any
bondholders'  meeting may bear a notation in form  approved by the Trustee as to
the action taken at meetings of bondholders theretofore held, and upon demand of
the holder of any bond  outstanding at the date of any such meeting and affected
thereby  and upon  presentation  of his bond for the  purpose  at the  principal
office of the Trustee,  the Company shall cause suitable  notation to be made on
such bond by  endorsement  or otherwise as to any action taken at any meeting of
bondholders  theretofore  held. If the Company or the Trustee shall so determine
new  bonds  so  modified  as in the  opinion  of the  Trustee  and the  Board of
Directors  of the Company to conform to such  bondholders'  resolution  shall be
prepared, authenticated and delivered, and upon demand of the holder of any bond
then  outstanding and affected  thereby shall be exchanged  without cost to such
bondholder  for bonds then  outstanding  hereunder  upon surrender of such bonds
with all unmatured coupons appertaining  thereto. The Company or the Trustee may
require bonds  outstanding to be presented for notation or exchange as aforesaid
if either shall see fit to do so.  Instruments  supplemental  to this  Indenture
embodying any  modification  or alteration of this Indenture or of any indenture
supplemental hereto made at any bondholders'  meeting and approved by resolution
of the Board of Directors of the Company,  as aforesaid,  may be executed by the
Trustee and the Company and upon demand of the Trustee or if so specified in any
resolution  adopted by any such bondholders'  meeting,  shall be executed by the
Company and the Trustee.

     Any  supplemental  indenture  executed  pursuant to the  provisions of this
Article shall comply with all applicable  provisions of the Trust  Indenture Act
of 1939 as then in force.

     SECTION 127.  Notwithstanding  anything in this Article XX  contained,  the
Company may at any time,  or from time to time,  by  resolution  of the Board of
Directors filed with the Trustee,  stipulate that from and after the date of the
filing  of such  resolution  with the  Trustee  none of the  provisions  of this
Article XX shall be of any force and effect  whatever either as respects (1) all
bonds theretofore  authenticated and delivered by the Trustee hereunder and then
outstanding and/or (2) a to any bonds and/or all bonds thereafter  authenticated
and  delivered by the Trustee  hereunder,  and in any such event a  supplemental
indenture  setting out in detail the  stipulations  contained in such resolution
shall be made.

                                  ARTICLE XXI.

                                 MISCELLANEOUS.

     SECTION 128. Nothing in this Indenture,  expressed or implied,  is intended
or shall be  construed,  to  confer  upon,  or to give to,  any  person  firm or
corporation,  other than the  parties  hereto  and the  holders of the bonds and
coupons outstanding hereunder, any right, remedy, or claim under or by reason of
this  Indenture or any covenant,  condition,  stipulation,  promise or agreement
hereof, and all the covenants, conditions, stipulations, promises and agreements
in this  Indenture  contained  by and on behalf of the Company  shall be for the
sole and  exclusive  benefit of the  parties  hereto,  and of the holders of the
bonds and of the coupons outstanding hereunder.

     SECTION 129.  Any money which has been  deposited  with the Trustee  (other
than  money  which  has been  deposited  with the  Trustee  for the  purpose  of
effecting  payment or  redemption  of or payment of interest on any bonds issued
hereunder  or which  the  Trustee  has been  directed  to hold and apply for the
purpose of such  payment or  redemption)  shall,  at the  request of the Company
evidenced by a resolution, be invested or reinvested by the Trustee in any bonds
or other  obligations of the United States of America  designated by the Company
maturing not more than two years from the date of their purchase by the Trustee,
and until a completed default specified in Section 72 hereof shall have occurred
and be  continuing,  any  interest  on such bonds and  obligations  which may be
received by the Trustee shall be forthwith  paid to the Company.  Such bonds and
obligations  shall be held by the Trustee as a part of the mortgaged and pledged
property and subject to the same provisions  hereof as the cash used to purchase
the same, but upon a like request of the Company,  the Trustee shall sell all or
any  designated  part of the same and the proceeds of such sale shall be held by
the  Trustee  subject  to the same  provisions  hereof as the cash used by it to
purchase the bonds and  obligations so sold. If such sale (or any payment on the
maturity of any such obligations so held by the Trustee) shall produce a net sum
less  than the  cost of the  bonds or other  obligations  so sold,  the  Company
covenants  that it will pay  promptly to the Trustee such amount of cash as with
the net proceeds from such sale or such payment will equal the cost of the bonds
or other  obligations  so sold or paid,  and if such sale (or any payment on the
maturity of any such obligations so held by the Trustee) shall produce a net sum
greater than the cost of the bonds or  obligations  so sold or paid, the Trustee
shall promptly pay to the Company an amount in cash equal to such excess.

     SECTION  130.  In the event  that any bond  issued  hereunder  shall not be
presented for payment when the principal thereof becomes due, either at maturity
or otherwise,  or at the date fixed for the redemption  thereof, or in the event
that any coupon shall not be presented for payment at the due date thereof,  the
Company,  having  deposited  with the  Trustee,  or with a  paying  agent of the
Company appointed herein or as permitted  hereunder,  for the purpose, or having
left with it if previously so deposited,  moneys sufficient to pay the principal
of such bond (and  premium,  if any),  together with all interest due thereon to
the date of the  maturity  of such bond or to the date fixed for the  redemption
thereof,  or to pay such coupon,  as the case may be, for the use and benefit of
the holder thereof, the Trustee or paying agent with which such deposit was made
shall hold the money so deposited  for the benefit of the holder of such bond or
overdue  coupon,  as the case may be.  In case the  holder  of any such  bond or
coupon shall not,  within ten (10) years after such redemption or maturity date,
claim the amount deposited as above stated, for the payment thereof, the Trustee
and such paying agent shall, upon receipt by each of them of such indemnity,  if
any,  as they may  severally  require,  on demand pay over to the  Company  such
amount so deposited, if the Company is not at the time in default hereunder; and
the  Trustee  and  such  paying  agent  shall  thereupon  be  relieved  from all
responsibility  to the holder  thereof,  and in the event of such payment to the
Company the holder of any such bond or coupon shall be deemed to be an unsecured
creditor of the  Company for an amount  equivalent  to the amount  deposited  as
above stated for the payment thereof and so paid over to the Company.

     SECTION 131. Any power,  privilege or right expressly or impliedly reserved
to or in any way conferred upon the Company by any provision of this  Indenture,
whether  such  power,  privilege  or  right  is  in  any  way  restricted  or is
unrestricted,  may be in whole or in part waived or  surrendered or subjected to
any  restriction  if at the time  unrestricted  or to additional  restriction if
already  restricted,  and the  Company  may enter  into any  further  covenants,
limitations or  restrictions  for the benefit of any one or more series of bonds
issued  hereunder  and provide that a breach  thereof  shall be  equivalent to a
default under this Indenture or the Company may cure any ambiguity or correct or
supplement any defective or inconsistent  provisions  contained herein or in any
supplemental indenture, by an instrument in writing executed and acknowledged by
the Company in such manner as would be necessary to entitle a conveyance of real
estate to record in all of the states in which any  property at the time subject
to the lien hereof shall be situated.  The Trustee is hereby  authorized to join
with the Company in the execution of any such  instrument or  instruments.  Such
instrument,  executed and  acknowledged as aforesaid,  shall be delivered to the
Trustee and thereupon if such  instrument  shall have been signed by the Trustee
any  modification  of the  provisions  of  these  presents  therein  set  forth,
authorized  by this  Section,  shall be binding upon the parties  hereto,  their
successors and assigns, and the holders of the bonds and coupons hereby secured.
Anything  herein to the  contrary  notwithstanding,  this  Section  shall not be
construed  to  permit  any  act,  waiver,  surrender  or  restriction  adversely
affecting any bonds then outstanding hereunder.

     SECTION 132. Subject to the provisions of Article XVII hereof,  whenever in
this  Indenture  either of the parties hereto is named or referred to (except in
subdivision  (1) of  Section 5  hereof),  this  shall be deemed to  include  the
successors or assigns of such party,  and all the  covenants  and  agreements in
this  Indenture  contained  by or on behalf of the Company or by or on behalf of
the Trustee shall bind and inure to the benefit of the respective successors and
assigns of such parties whether so expressed or not.

     SECTION  133. If any  provision  of this  Indenture  limits,  qualifies  or
conflicts  with another  provision  of this  Indenture  which has been  included
pursuant to any  requirements  of Sections 310 to 317,  inclusive,  of the Trust
Indenture Act of 1939, such required provisions shall control.

     SECTION  134.  Whenever  reference  is made in this  Indenture to the Trust
Indenture Act of 1939, reference is made to such Act as approved August 3, 1939.

     SECTION 135. The titles of the several Articles of this Indenture shall not
be deemed to be any part thereof.

<PAGE>

     SECTION 136. This  Indenture  shall be  simultaneously  executed in several
counterparts,  and all such  counterparts  executed  and  delivered,  each as an
original, shall constitute but one and the same instrument.

     IN WITNESS WHEREOF, INDIANAPOLIS POWER & LIGHT COMPANY, party hereto of the
first  part,  has caused its  corporate  name to be hereunto  affixed,  and this
instrument to be signed and sealed by its President or a Vice-President, and its
corporate seal to be attested by its Secretary or an Assistant Secretary for and
in its behalf,  and American  National Bank and Trust Company of Chicago,  party
hereto of the  second  part,  in token of its  acceptance  of the  trust  hereby
created,  has  caused  its  corporate  name to be  hereunto  affixed,  and  this
instrument to be signed and sealed by a Vice-President and its corporate seal to
be attested by its Assistant Secretary.

                                       INDIANAPOLIS POWER & LIGHT COMPANY,

                                                By HARRY T. PRITCHARD,
                                                                President.

Attest:
                                                                (CORPORATE SEAL)
        ELMER E. SCOTT,
                      Secretary.

                                       AMERICAN NATIONAL BANK AND TRUST COMPANY
                                                   OF CHICAGO,

                                                By J. C. WRIGHT,
                                                           Vice-President.

          (CORPORATE SEAL)

Attest:

        E. L. ANDREWS,
             Assistant Secretary.

<PAGE>

STATE OF NEW YORK       )
                        ) ss.:
COUNTY OF NEW YORK      )

     On this 11th day of July,  in the year 1940,  before me, a Notary Public in
and for the  County and State  aforesaid,  personally  came Harry T.  Pritchard,
President,  and Elmer E. Scott, Secretary of Indianapolis Power & Light Company,
one of the corporations described in and which executed the foregoing Indenture,
to me  personally  known and known to me  personally  to be such  President  and
Secretary,  respectively. Said Harry T. Pritchard and Elmer E. Scott being by me
severally duly sworn did depose and say that the said Harry T. Pritchard resides
in the City of Indianapolis,  Marion County, Indiana, and that the said Elmer E.
Scott resides in the City of  Indianapolis,  Marion County,  Indiana;  that said
Harry T.  Pritchard  is  President  and said Elmer E. Scott is Secretary of said
Indianapolis  Power & Light Company;  that each of them knows the corporate seal
of said  corporation;  that the seal affixed to said  Indenture  and bearing the
name of said corporation is such corporate seal; that is was so affixed by order
of the Board of Directors and stockholders of said corporation; and that each of
them signed his name thereto by like order;  and each of them  acknowledged  the
execution  of said  Indenture on behalf of said  corporation  to be his free and
voluntary  act and  deed  and  the  free  and  voluntary  act  and  deed of said
corporation, for the uses and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 11th day of July, 1940.

                                                   NIEL A. WEATHERS, JR.
                                                      Notary Public

My Commission Expires

Notary Public, New York County
N.Y. Co. Clk's No. 415 Reg. 1W540
Commission Expires March 30, 1941
                                                                (NOTARIAL SEAL)

<PAGE>

                                                                     No. 26747

STATE OF NEW YORK       )
                        ) ss.:
COUNTY OF NEW YORK      )

     I, ARCHIBALD R. WATSON,  County Clerk,  and Clerk of the Supreme Court, New
York County,  the same being a Court of Record  having by law a seal,  Do HEREBY
CERTIFY, That NIEL A. WEATHERS,  JR., whose name is subscribed to the deposition
or certificate of the proof or  acknowledgment  of the annexed  instrument,  and
thereon  written,  was,  at the time of  taking  such  deposition,  or proof and
acknowledgment,  a Notary Public in and for such County,  duly  commissioned and
sworn,  and  authorized by the laws of said State,  to take  depositions  and to
administer oaths to be used in any Court of said State and for general purposes;
and also to take  acknowledgments  and proofs of deeds, of conveyances for land,
tenements or  hereditaments  in said State of New York.  And further,  that I am
well acquainted with the handwriting of such Notary Public, or have compared the
signature of such  officer with that  deposited in my office by him, and believe
that the signature to said deposition or certificate of proof or  acknowledgment
is genuine.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
said Court and County this 11th day of July, 1940.

                                           ARCHIBALD R. WATSON
                                County Clerk and Clerk of the Supreme Court,
                                             New York County

<PAGE>

STATE OF ILLINOIS       )
                        ) ss.:
COUNTY OF COOK          )

     On this 12th day of July,  in the year 1940,  before me, a Notary Public in
and for the County  and State  aforesaid,  personally  came J. C.  WRIGHT,  Vice
President, and E. L. ANDREWS,  Assistant Secretary of American National Bank and
Trust  Company  of  Chicago,  one of the  corporations  described  in and  which
executed  the  foregoing  Indenture,  to me  personally  known  and  known to me
personally to be such Vice President and Assistant Secretary, respectively. Said
J. C. WRIGHT and E. L. ANDREWS,  being by me severally duly sworn did depose and
say  that the  said J. C.  WRIGHT  resides  in the  City of  Evanston,  State of
Illinois and that the said E. L. ANDREWS  resides in the City of Highland  Park,
State of  Illinois;  that  said J. C.  WRIGHT is Vice  President  and said E. L.
ANDREWS is Assistant  Secretary of said American National Bank and Trust Company
of Chicago; that each of them knows the corporate seal of said corporation; that
the seal affixed to said  Indenture and bearing the name of said  corporation is
such  corporate  seal;  that it was so  affixed  by  authority  of the  Board of
Directors of said corporation;  and that each of them signed his name thereto by
like authority; and each of them acknowledged the execution of said Indenture on
behalf of said  corporation  to be his free and  voluntary  act and deed and the
free and voluntary act and deed of said  corporation,  for the uses and purposes
therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 12th day of July, 1940.

                                                   LILLIAN DAU
                                                           Notary Public

My Commission Expires
September 24, 1942
                                                                (Notarial Seal)

<PAGE>

STATE OF ILLINOIS       )
                        )  ss.:
COUNTY OF COOK          )

     I, MICHAEL J. FLYNN,  County Clerk of the County of Cook, Do HEREBY CERTIFY
that I am the lawful custodian of the official records of Notaries Pubic of said
County,  and as such  officer  am  duly  authorized  to  issue  certificates  of
magistracy,  that  LILLIAN  DAU,  whose  name  is  subscribed  to the  proof  of
acknowledgment of the annexed instrument in writing,  was, at the time of taking
such  proof of  acknowledgment,  a Notary  Public in and for Cook  County,  duly
commissioned,  sworn and acting as such and  authorized to take  acknowledgments
and proofs of deeds or conveyances of lands, tenements or hereditaments, in said
State of  Illinois,  and to  administer  oaths;  all of which  appears  from the
records and files in my office;  that I am well  acquainted with the handwriting
of said  Notary  and  verily  believe  that the  signature  to the said proof of
acknowledgment is genuine.

     IN TESTIMONY  WHEREOF,  I have hereunto set my hand and affixed the seal of
the County of Cook at my office in the City of Chicago, in the said County, this
12th day of July, 1940.

                                            MICHAEL J. FLYNN, County Clerk.

<PAGE>

                                 RECORDING DATA

                                                                      Instrument
 County          Instrument             Record                 Page       No.
 ------          ----------             ------                 ----   ----------

Boone       Real Estate Mortgage  Mortgage Record 101           119      4402

Boone       Chattel Mortgage      Chattel Minute Record 5       244      4403

Hamilton    Real Estate Mortgage  Mortgage Record 94             21      3769

Hamilton    Chattel Mortgage      Chattel Minute Record 2        59      3770

Hancock     Real Estate Mortgage  Mortgage Record 75            203     10299

Hancock     Chattel Mortgage      Chattel Minute Record 4        --     10300

Hendricks   Real Estate Mortgage  Mortgage Record 106           238       172

Hendricks   Chattel Mortgage      Chattel Minute Record 4        10       173

Johnson     Real Estate Mortgage  Mortgage Record 80            228      6879

Johnson     Chattel Mortgage      Chattel Minute Record 3       144      6880

Marion      Real Estate Mortgage  Mortgage Record 1230           81     29062

Marion      Chattel Mortgage      Chattel Minute Record 33      149     29063

Pike        Real Estate Mortgage  Mortgage Record 21             --      1927

Pike        Chattel Mortgage      Chattel Minute Record 2       141      1928

Sullivan    Real Estate Mortgage  Mortgage Record 104           534     26187

Sullivan    Chattel Mortgage      Chattel Minute Record 4         7     26188Exhibit 4.4.1

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                       TO

                        AMERICAN NATIONAL BANK AND TRUST
                               COMPANY OF CHICAGO

                                     TRUSTEE

                          THIRD SUPPLEMENTAL INDENTURE

                            Dated as of April 1, 1949

                       Establishing First Mortgage Bonds,
                               3% Series, Due 1974

<PAGE>

                                  TABLE OF CONTENTS*

                                          OF

                             THIRD SUPPLEMENTAL INDENTURE

                                          OF

                          INDIANAPOLIS POWER & LIGHT COMPANY

         PAGE

         Parties...............................................................1
         Recitals..............................................................1
                  Description of bond issue....................................1

Sec. 1  Granting clauses.......................................................3
                  Part I     Real Property in the County of Marion,
                                State of Indiana...............................4
                  Part II    Electric Distributing Systems.....................7
                  Part III   Steam and Hot Water Distributing Systems..........7
                  Part IV    Indeterminate Permits and Franchises..............8
                  Part V     Other Property....................................8
         General and after-acquired property...................................9

Sec. 2  Designation of fourth series of bonds as "3% Series,
             Due 1974" and kinds and denominations thereof.....................9

        Designation of American National Bank and Trust Company
            of Chicago as paying agent........................................10
        General Redemption Prices of bonds of 3% Series,
            Due 1974..........................................................10
        Special Redemption Prices of bonds of 3% Series,
            Due 1974..........................................................11
        Procedure for exchanges of bonds......................................12
        Registration and transfer of bonds....................................13
        Bonds of 3% Series, Due 1974, limited to $8,000,000...................13

Sec. 3  Form of coupon bonds..................................................13

        Form of October coupon................................................18

        Form of April coupon..................................................18

        Form of fully registered bond.........................................19

        Form of Trustee's certificate on all bonds............................24

Sec. 4  Temporary bonds.......................................................24

Sec. 5  Sinking Fund provided for Bonds of 3% Series, Due 1974................24

Sec. 6  Annual payments for Maintenance and Improvement Fund..................26

Sec. 7  Compliance with Section 47 of Original Mortgage with
             Respect to dividend restrictions.................................26

Sec. 8  Amendment to Section 1 of Original Mortgage...........................26

Sec. 9  Amendment to Section 2 of Original Mortgage...........................26

Sec. 10 Amendments to Section 30 of Original Mortgage.........................27

Sec. 11 Amendment to Section 53 of Original Mortgage..........................27

Sec. 12 Amendment to Section 38 of Original Mortgage..........................27

Sec. 13 Amendment to Section 65 of Original Mortgage..........................28

Sec. 14 Amendment to Section 85 of Original Mortgage..........................28

Sec. 15 Amendment to Sections 97 and 98 of Original Mortgage..................28

Sec. 16 Amendment to Section 124 of Original Mortgage.........................28

Sec. 17 Acceptance of trusts by Trustee and conditions of acceptance..........29

Sec. 18 Successors and assigns................................................29

Sec. 19 Limitation of rights hereunder........................................29

Sec. 20 Terms, provisions and conditions of Original Mortgage
              applicable to bonds of 3% Series, Due 1974......................29

Sec. 21 Execution in counterparts.............................................30
                  Testimonium.................................................30
                  Signatures and seals........................................30
                  Acknowledgements............................................31

*    Table of  Contents  is not part of the  Third  Supplemental  Indenture  and
     should not be  considered  as such.  It is  included  only for  purposes of
     convenient reference.
<PAGE>

     THIS  THIRD  SUPPLEMENTAL  INDENTURE,  dated as of April 1,  1949,  between
INDIANAPOLIS  POWER & LIGHT  COMPANY,  a  corporation  of the State of  Indiana,
hereinafter  sometimes  called  the  "Company",  party of the  first  part,  and
AMERICAN  NATIONAL  BANK AND  TRUST  COMPANY  OF  CHICAGO,  a  national  banking
association,  hereinafter  sometimes  called the "Trustee",  party of the second
part;

     WHEREAS, the Company by a Mortgage and Deed of Trust (hereinafter sometimes
called  the  "Original  Mortgage"  when  referred  to as  existing  prior to any
supplement  thereto,  and the  "Mortgage"  when referred to as now or heretofore
supplemented)  dated as of May 1, 1940, made to said American  National Bank and
Trust Company of Chicago,  as Trustee, to secure the payment of the bonds issued
from time to time under the  Mortgage  for the  purposes  of and  subject to the
limitations  specified in the  Mortgage,  and to secure the  performance  of the
covenants  therein  contained,  conveyed to the Trustee  thereunder upon certain
trusts,  terms and  conditions,  and with and  subject to certain  provisos  and
covenants  therein  contained,  all  and  singular  the  property,   rights  and
franchises which the Company then owned or should thereafter acquire,  excepting
the property  expressly  excepted by the terms of the  Original  Mortgage or any
indenture  supplemental  thereto, to which Original Mortgage reference is hereby
made for greater certainty; and

     WHEREAS,  the company has  heretofore  executed and delivered and there are
now issued and  outstanding  under the Mortgage,  bonds of a series entitled and
designated  "First  Mortgage  Bonds, 3 1/4% Series,  due 1970", in the aggregate
principal amount of $32,000,000; and

     WHEREAS,  Section 8 of the Original  Mortgage  provides  that the form each
series of bonds  (other  than the  aforesaid  3 1/4%  Series  due  1970)  issued
thereunder and of the coupons to be attached to the coupon bonds of such series,
shall  be  established  by  an  indenture  supplemental  thereto  authorized  by
resolution  of the Board of Directors of the Company,  and that the form of each
series, as established by the Board of Directors,  shall specify the descriptive
title of the bonds and various  other terms  thereof,  and may also contain such
other  provisions as the Board of Directors may, in its discretion,  cause to be
inserted therein  expressing or referring to the terms and conditions upon which
such bonds are to be issued  and  secured  under the  Original  Mortgage  or any
indenture supplemental thereto; and

     WHEREAS, the Company has heretofore executed and delivered to the Trustee a
First  Supplemental  Indenture,  dated  as of May 1,  1942,  providing  for  the
creation, establishment,  execution, authentication,  delivery and issuance of a
second  series of First  Mortgage  Bonds,  unlimited as to amount,  to be issued
under and  secured  by the  Mortgage,  and  entitled  and  designated  as "First
Mortgage  Bonds, 3% Series,  due 1970," and the Company has heretofore  executed
and  delivered  and there  are now  issued  and  outstanding  thereunder,  First
Mortgage  Bonds, 3% Series,  due 1970,  dated May 1, 1942 and maturing on May 1,
1970, in the aggregate principal amount of $2,000,000; and

     WHEREAS, the Company has heretofore executed and delivered to the Trustee a
Second Supplemental  Indenture,  dated as of February 1, 1948, providing for the
creation, establishment,  execution, authentication,  delivery and issuance of a
third series of First Mortgage Bonds, unlimited as to amount, to be issued under
and secured by the  Mortgage,  and entitled and  designated  as "First  Mortgage
Bonds,  3 1/8% Series,  Due 1973," and the Company has  heretofore  executed and
delivered and there are now issued and  outstanding  thereunder,  First Mortgage
Bonds, 3 1/8% Series,  Due 1973, dated February 1, 1948 and maturing on February
1, 1973, in the aggregate principal amount of $8,000,000; and

     WHEREAS,   the  Company   now   desires  to  provide   for  the   creation,
establishment,  execution,  authentication,  delivery  and  issuance  under  the
Mortgage  of bonds of a fourth  series  to be  entitled  and  designated  "First
Mortgage Bonds, 3% Series, Due 1974" (the bonds of said series being hereinafter
sometimes  referred to as "1974  Bonds") of the  aggregate  principal  amount of
$8,000,000; and

     WHEREAS, all things necessary to make the 1974 Bonds hereinafter described,
when duly executed and issued by the Company and  authenticated  by the Trustee,
valid,  binding and legal  obligations  of the  Company,  and to make this Third
Supplemental  Indenture  a  valid  and  binding  agreement  supplemental  to the
Original Mortgage, have been done and performed; and

     WHEREAS,   the  execution  and  delivery  by  the  Company  of  this  Third
Supplemental  Indenture,  and the  terms  of the  1974  Bonds,  have  been  duly
authorized by the Board of Directors of the Company by  appropriate  resolutions
of said Board; and

     WHEREAS,  it is provided in and by the Original  Mortgage  that the Company
will execute and deliver such  further  instruments  and do such further acts as
may be  necessary  or proper to carry out more  effectually  the purposes of the
Mortgage,  and to make  subject  to the lien  thereof  any  property  thereafter
acquired and intended to be subject to the lien thereof; and

     WHEREAS,  the Company has,  since the date of execution and delivery of the
Original  Mortgage,   purchased  and  acquired  the  properties  and  franchises
hereinafter  described  and  desires by this  Third  Supplemental  Indenture  to
specifically  convey to the Trustee such property and  franchises for the better
protection  and security of the bonds issued and to be issued under the Original
Mortgage, or any indenture supplemental thereto;

     NOW,  THEREFORE,  THIS INDENTURE  WITNESSETH  that, in consideration of the
premises and of the  acceptance  or purchase of the 1974 Bonds by the holders or
registered  owners  thereof,  and of the sum of one dollar,  lawful money of the
United  States of America,  to the Company duly paid by the Trustee at or before
the execution  and delivery of this Third  Supplemental  Indenture,  the receipt
whereof is hereby acknowledged, the Company and the Trustee, respectively,  have
entered into, executed and delivered this Third Supplemental Indenture,  for the
uses and purposes hereinafter expressed, that is to say:

     SECTION 1. The Company has granted,  bargained,  sold, released,  conveyed,
assigned, transferred,  mortgaged, pledged, set over and confirmed, and by these
presents does grant, bargain, sell, release, convey, assign, transfer, mortgage,
pledge,  set over and confirm (subject,  however,  to permitted  encumbrances as
defined in the Original  Mortgage),  unto said American  National Bank and Trust
Company of Chicago,  as Trustee,  as herein provided,  and its successors in the
trusts declared in the Original Mortgage and herein, all of the property,  real,
personal  and mixed,  tangible  and  intangible,  of every kind,  character  and
description  which the Company has acquired  since the execution and delivery of
the  Original  Mortgage and now owns  (except  property,  rights and assets of a
character  similar to the property  that is excluded from the lien and operation
of the  Mortgage  by  the  Granting  Clauses  of the  Original  Mortgage,  which
property,  rights and assets are  excluded  from the lien and  operation  of the
Mortgage only to the extent provided  therein),  including but without otherwise
limiting the generality of the foregoing, the following described properties all
located within the State of Indiana;

                                     PART I.

                     REAL PROPERTY IN THE COUNTY OF MARION,
                                STATE OF INDIANA.

     All the right,  title and  interest of the Company in and to the  following
described and number parcels or tracts of land acquired by the Company after May
1, 1940, the date of the Original Mortgage,  and situate in the County of Marion
in the State of Indiana, together will all buildings, structures,  improvements,
machinery,  and equipment of every  description now or hereafter affixed thereto
or stationed thereon or appertaining thereto, to-wit:

                                 PARCEL NO. 128.

     A strip of ground of the uniform width of 80.3 feet, measured from North to
South taken by parallel lines off the north end of Lot Numbered  Sixty-four (64)
in Arlington Heights,  Third Section,  and Addition to the City of Indianapolis,
the plat of which is  recorded  in Plat  Book 19 page 20,  in the  office of the
Recorder of Marion County, Indiana.
     Subject,  however,  to the  rights  of the  State  of  Indiana  granted  by
instrument recorded in Deed Record 1088 page 43 in the office of the Recorder of
Marion County, Indiana.

                                 PARCEL NO. 129.

     Lot 26 and  part  of Lot 27 in  Edith  Francis'  Addition  to the  City  of
Indianapolis, as per plat thereof, recorded in Plat Book 6 page 33 in the Office
of the  Recorder  of Marion  County,  Indiana,  said  part of Lot 27 being  more
particularly described as follows, to-wit: Beginning at the south east corner of
Lot 26, running thence west 130 feet,  thence south 22 1/2 feet, thence east 130
feet, thence north 22 1/2 feet to the place of beginning.

                                 PARCEL NO. 130.

     Part of the  southeast  quarter of the  northeast  quarter  of Section  28,
Township 15 north,  Range 3 east  described as follows:  Beginning at a point in
the south line of, and 260 feet west of the southeast  corner of, said southeast
quarter,  said point being immediately west of the levee in the southeast corner
of said southeast  quarter,  thence  northeasterly  and parallel with said levee
848.82 feet to a point in the east line of said  southeast  quarter,  said point
being 804 feet north of the southeast corner of said southeast  quarter measured
along the east line of said southeast quarter,  thence north along the east line
of said  southeast  quarter  to the  center  line of White  River,  thence  in a
southwesterly  direction  along the center line of White River to the south line
of said  southeast  quarter,  thence east along the south line of said southeast
quarter to the place of beginning.

                                 PARCEL NO. 131.

     A tract of land located in Section 2,  Township 15 North,  Range 3 East, in
the City of Indianapolis, Marion County, Indiana, more particularly described as
follows:
     Beginning  at the  intersection  of the east  property  line of  Geisendorf
Street  and the  south  property  line of  Market  Street,  as now  located,  in
Indianapolis,  and running thence in a southeasterly direction, on and along the
south property line of Market Street, as now located,  a distance of 75.38 feet,
more or less,  to a point on the south  property line of Market Street and which
point is the  northwest  corner of Lot 17 in  Chandler  and Taylor  Subdivision;
thence,  in a  southerly  direction  on a line  making an  interior  angle of 90
degrees with the south line of Market Street, a distance of 223.30 feet, more or
less,  to a point  on the  north  property  line of  Washington  Avenue,  as now
located;  thence,  in a  northwesterly  direction  and on and  along  the  north
property line of Washington Avenue, as now located, which line makes an interior
angle of 82 degrees 10 minutes  with the last  described  course,  a distance of
67.62 feet,  more or less,  to the  intersection  of the north  property line of
Washington  Avenue  and the east  property  line of  Geisendorf  Street,  as now
located; thence, in a northerly direction on and along the east property line of
Geisendorf  Street, as now located,  which line makes an interior angle with the
last  described  course of 100 degrees 04 minutes,  a distance of 214.45 feet to
the point of beginning. Said tract contains 15,555 square feet, more or less.
     Also,  a tract of land  located in Section 2,  Township  15 North,  Range 3
East, in the City of Indianapolis,  Marion County,  Indiana,  more  particularly
described as follows:
     Beginning at the  intersection  of the north property line of Market Street
and the east property line of Geisendorf Street, as now located,  in the City of
Indianapolis,  and running thence north, 2 degrees 48 minutes east, on and along
the east  property  line of  Geisendorf  Street,  as now located,  a distance of
402.70 feet,  more or less,  to a point  established  by a stone set on the east
property line of Geisendorf Street;  thence south, 80 degrees 26 minutes east, a
distance of 127.70 feet, more or less, to a point  established by a stone set on
the west property line of Bright Street, as now located; thence south, 2 degrees
38  minutes  west,  on and along the west  property  line of  Bright  Street,  a
distance of 52.93 feet,  more or less, to a point  established by a stone set on
the west property  line of Bright  Street;  thence south,  83 degrees 44 minutes
east,  a distance of 89.94 feet to a point;  thence  south,  1 degree 31 minutes
east, a distance of 338.20 feet,  more or less, to a point on the north property
line of Market Street, as now located; thence north, 85 degrees 19 minutes west,
on and  along the  north  property  line of Market  Street,  as now  located,  a
distance of 242.32 feet,  more or less,  to the place of  beginning.  Said tract
contains 85,000 square feet, more or less.
     Subject  to certain  easements  reserved  by  grantor,  Indianapolis  Water
Company,  in Deed  recorded  in Deed  Record  1324 Page 333 in the office of the
Recorder  of  Marion   County,   Indiana,   and  subject   further  to  railroad
rights-of-way.

                                 PARCEL NO. 132.

     A part of the South  Half of the South  Half of the  Southwest  Quarter  of
Section 15,  Township 15 North,  Range 3 East in Marion  County,  Indiana,  more
particularly described as follows, to-wit:
     Beginning at the point of  intersection  of the North line of the aforesaid
Half Half  Quarter  Section and the East  property  line of Belmont  Avenue said
point being 69.20 feet East of the  Northwest  corner of said Half Half  Quarter
Section;  thence run East along and with the aforesaid North line 181.65 feet to
the point of  intersection of said North line and the  Northwestwardly  right of
way line of the  Indianapolis  Division of the P.C.C. & St. L. Railroad;  thence
Southwestwardly along and with the said Northwestwardly right of way line 240.83
feet to the  point  of  intersection  of said  right  of way  line  and the East
property line of Belmont Avenue; thence northwardly along and with the said East
line of Belmont Avenue 174.20 feet to the place of beginning,  containing  0.362
acres more or less.

                                    PART II.

                         ELECTRIC DISTRIBUTING SYSTEMS.

     All electric  distributing  systems of the Company acquired by it after May
1, 1940,  the date of the  Original  Mortgage,  and  located in the  Counties of
Marion,  Boone,  Hamilton,  Hancock,  Hendricks,  Morgan, and Johnson,  State of
Indiana;  and any  additions  to or  extensions  of any such plants and systems,
together with the buildings,  erections,  structures,  transmission lines, power
stations,   sub-stations,   engines,  boilers,   condensers,   pumps,  turbines,
machinery,  tools,  conduits,  manholes,  insulators,  dynamos,  motors,  lamps,
cables,  wires,  poles,  towers,  cross-arms,   piers,  abutments,   switchboard
equipment,  meters, appliances,  instruments,  apparatus,  appurtenances,  maps,
records, ledgers, easements,  contracts,  permits, facilities and other property
or  equipment  used or provided  for use in  connection  with the  construction,
maintenance, repair and operation thereof; together also with all of the rights,
privileges, rights-of-way, franchises, licenses, grants,  liberties, immunities,
ordinances,   permits,  and   easements  of  the   Company  in  respect  of  the
construction, maintenance, repair and operation of said plants and systems.

                                    PART III.

                    STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

     All the steam and hot water  distributing  systems  acquired by the Company
after May 1, 1940, the date of the Original Mortgage, and located in the City of
Indianapolis,  Marion County, Indiana, and any additions to or extensions of any
such plants and systems;  together with the  buildings,  erections,  structures,
boilers, heaters, engines, tanks, pipe lines, mains, connections, service pipes,
meters, tools, instruments,  appliances,  apparatus,  facilities,  machinery and
other  property  and  equipment  used or provided  for use in the  construction,
maintenance,  repair and  operation  thereof;  and together also with all of the
rights,  privileges,  rights-of-way,  franchises,  licenses,  grants, liberties,
immunities,  ordinances,  permits and easements of the Company in respect of the
construction, maintenance, repair and operation of said plants and systems.

                                    PART IV.

                      INDETERMINATE PERMITS AND FRANCHISES.

     All indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations by or from any state, county, municipality, or other governmental
authority,  acquired by the Company after May 1, 1940,  the date of the Original
Mortgage, including particularly,  but not limited to, any indeterminate permits
under the Public Service  Commission  Act of the State of Indiana,  and all Acts
amendatory thereof and supplemental  thereto,  and all right, title and interest
therein now owned by the Company, and all renewals, extensions and modifications
of said  indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations,  and  of  the  indeterminate  permits,  franchises,  ordinances,
licenses,  and  other  authorizations  referred  to in Part VII of the  Granting
Clauses of the Original Mortgage.

                                     PART V.

                                 OTHER PROPERTY.

     All other  property,  whether  real,  personal or mixed  (except any in the
Mortgage expressly excepted), now owned by the Company and wheresoever situated,
including  (without in anywise  limiting or impairing by the  enumeration of the
same the  scope  and  intent  of the  foregoing  or of any  general  description
contained in the Original  Mortgage or this Third  Supplemental  Indenture)  all
lands, flowage rights, water rights, flumes,  raceways,  dams, rights of way and
roads; all plants for the generation of electricity by water, steam and/or other
power,  power houses,  telephone  systems,  water systems,  steam heat and power
plants,  hot  water  plants,  sub-stations,   transmission  lines,  distribution
systems,  bridges,  culverts and tracks; all offices,  buildings and structures,
and the equipment thereof; all machinery,  engines, boilers, dynamos,  machines,
regulators, meters, transformers,  generators and motors; all appliances whether
electrical, gas or mechanical, conduits, cables and lines; all pipes whether for
water,  steam heat and power,  or other purposes;  all mains and pipes,  service
pipes,  fittings,  valves and  connections,  poles,  wires,  tools,  implements,
apparatus,  furniture and  chattels;  all  municipal  franchises,  indeterminate
permits,  and other  permits;  all lines  for the  transportation,  transmission
and/or  distribution of electric current,  steam heat and power or water for any
purpose,  including  towers,  poles,  wires,  cables,  pipes,  conduits  and all
apparatus  for use in  connection  therewith;  all real estate,  lands,  leases,
leaseholds; all contracts,  whether heat, light, power, water or street lighting
contracts;  all  easements,   servitudes,  licenses,  permits,  rights,  powers,
franchises,  privileges,  rights of way and other  rights in or relating to real
estate  or the  occupancy  of the  same and  (except  as  hereinafter  or in the
Original Mortgage  expressly  excepted) all the right, title and interest of the
Company  in and to all  other  property  of any kind or nature  appertaining  to
and/or used and/or  occupied  and/or  enjoyed in  connection  with any  property
hereinbefore described or referred to;

     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 Section 64 of the Original  Mortgage),  the
tolls, rents, revenues,  issues, earnings,  income, product and profits thereof,
and all the estate,  right,  title and 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,  indeterminate permits and franchises and every part and
parcel thereof.

     SECTION 2. There shall be and is hereby  created and  established  a fourth
series of bonds,  limited in aggregate  principal  amount to  $8,000,000,  to be
issued  under and secured by the  Mortgage,  to be  designated  "3% Series,  Due
1974",  each of which  shall also bear the  descriptive  title  "First  Mortgage
Bond";  said bonds shall mature on April 1, 1974,  and shall be issued as coupon
bonds in the denomination of One thousand dollars, registerable as to principal,
and as fully  registered bonds in denominations of One thousand dollars and Five
thousand  dollars  and,  at the  options  of the  Company,  in any  multiple  or
multiples of Five thousand dollars; they shall bear interest from April 1, 1949,
in the case of coupon  bonds,  and from the  beginning  of the current  interest
period  during  which each fully  registered  bond is dated in the case of fully
registered  bonds,  at the rate of three  per  centum  (3%) per  annum,  payable
semi-annually,  on April 1 and  October 1 of each year;  and the  principal  of,
premium, if any, and interest on each said bond shall be payable in lawful money
of the United  States of  America at the office or agency of the  Company in the
City of Chicago, Illinois.
     American  National Bank and Trust  Company of Chicago is hereby  designated
and  appointed  the  office  and agency of the  Company  for the  payment of the
principal  of,  premium,  if any, and interest on the 1974 Bonds;  all reference
herein to the office or agency of the Company  for the payment of the  principal
of,  premium,  if any,  and  interest  on the 1974 Bonds  being a  reference  to
American  National  Bank and  Trust  Company  of  Chicago.  In the  event of the
resignation  or  inability  to act of American  National  Bank Trust  Company of
Chicago,  then a  successor  paying  agent or  agents  in the  City of  Chicago,
Illinois, with respect to the principal of and interest on the 1974 Bonds, shall
be appointed by the Board of Directors of the Company.
     1974 Bonds in coupon  form shall be dated April 1, 1949.  Fully  registered
bonds of said series shall be dated as of the date of authentication,  except as
otherwise provided in Section 10 of the Original Mortgage.

     Upon the  notice and in the  manner  and with the  effect  provided  in the
Mortgage  and below in this  Section 2, 1974 Bonds  shall be  redeemable  by the
Company prior to the maturity  thereof  (otherwise than through the operation of
the Sinking  Fund created for the benefit of the 1974 Bonds by Section 5 of this
Indenture,  and otherwise than by the  application of moneys  deposited with the
Trustee representing the proceeds of mortgaged and pledged property taken by the
exercise of the power of eminent  domain or otherwise as provided in paragraph B
of Section 69 of the Mortgage),  as a whole at any time, or in part from time to
time, at the option of the Company,  at the following general  redemption prices
(expressed as percentages of their principal amount) respectively, to wit:

         104.500% if redeemed on or before March 31, 1950,
         104.375% if redeemed thereafter to and including March 31, 1951,
         104.250% if redeemed thereafter to and including March 31, 1952,
         104.125% if redeemed thereafter to and including March 31, 1953,
         104.000% if redeemed thereafter to and including March 31, 1954,
         103.875% if redeemed thereafter to and including March 31, 1955,
         103.750% if redeemed thereafter to and including March 31, 1956,
         103.625% if redeemed thereafter to and including March 31, 1957,
         102.750% if redeemed thereafter to and including March 31, 1958,
         102.625% if redeemed thereafter to and including March 31, 1959,
         102.500% if redeemed thereafter to and including March 31, 1960,
         102.375% if redeemed thereafter to and including March 31, 1961,
         102.250% if redeemed thereafter to and including March 31, 1962,
         102.125% if redeemed thereafter to and including March 31, 1963,
         102.000% if redeemed thereafter to and including March 31, 1964,
         101.750% if redeemed thereafter to and including March 31, 1965,
         101.250% if redeemed thereafter to and including March 31, 1966,
         101.125% if redeemed thereafter to and including March 31, 1967,
         101.000% if redeemed thereafter to and including March 31, 1968,
         100.875% if redeemed thereafter to and including March 31, 1969,
         100.750% if redeemed thereafter to and including March 31, 1970,
         100.625% if redeemed thereafter to and including March 31, 1971,
         100.500% if redeemed thereafter to and including March 31, 1972,
         100.375% if redeemed thereafter to and including March 31, 1973,
         100   % if redeemed thereafter,

together, in each case, with accrued interest to the redemption date.

     Upon the  notice and in the  manner  and with the  effect  provided  in the
Mortgage  and below in this  Section 2, 1974 Bonds  shall be  redeemable  by the
Company prior to the maturity  thereof through the operation of the Sinking Fund
created for the benefit of the 1974 Bonds by Section 5 of this Indenture, or out
of moneys deposited with the Trustee  representing the proceeds of mortgaged and
pledged  property  taken by exercise of the power of eminent domain or otherwise
as  provided  in  paragraph B of Section 69 of the  Mortgage,  at the  following
special  redemption  prices (expressed as percentages of their principal amount)
respectively, to wit:

         101.875% if redeemed on or before March 31, 1950,
         101.750% if redeemed thereafter to and including March 31, 1951,
         101.750% if redeemed thereafter to and including March 31, 1952,
         101.625% if redeemed thereafter to and including March 31, 1953,
         101.625% if redeemed thereafter to and including March 31, 1954,
         101.625% if redeemed thereafter to and including March 31, 1955,
         101.500% if redeemed thereafter to and including March 31, 1956,
         101.500% if redeemed thereafter to and including March 31, 1957,
         101.375% if redeemed thereafter to and including March 31, 1958,
         101.375% if redeemed thereafter to and including March 31, 1959,
         101.250% if redeemed thereafter to and including March 31, 1960,
         101.250% if redeemed thereafter to and including March 31, 1961,
         101.125% if redeemed thereafter to and including March 31, 1962,
         101.125% if redeemed thereafter to and including March 31, 1963,
         101.000% if redeemed thereafter to and including March 31, 1964,
         100.875% if redeemed thereafter to and including March 31, 1965,
         100.875% if redeemed thereafter to and including March 31, 1966,
         100.750% if redeemed thereafter to and including March 31, 1967,
         100.750% if redeemed thereafter to and including March 31, 1968,
         100.625% if redeemed thereafter to and including March 31, 1969,
         100.500% if redeemed thereafter to and including March 31, 1970,
         100.500% if redeemed thereafter to and including March 31, 1971,
         100.375% if redeemed thereafter to and including March 31, 1972,
         100.250% if redeemed thereafter to and including March 31, 1973,
         100   % if redeemed thereafter,

together, in each case, with accrued interest to the redemption date.

     The notice  required for the  redemption of the 1974 Bonds shall include at
least thirty (30) days' published  notice (such  publication to be made at least
once in each of four (4) successive  calendar weeks upon any secular day of each
such week, which need not be the same day in each week).

     At the option of the holder,  any 1974 Bonds in coupon form, upon surrender
thereof  with  all  unmatured   coupons  and  any  matured  coupons  in  default
appertaining  thereto  at the  office or agency  of the  Company  in the City of
Chicago,  Illinois,  shall be exchangeable for a like aggregate principal amount
of fully registered bonds of the same series of authorized denominations. At the
option of the registered  holder, any fully registered 1974 Bond, upon surrender
thereof  at said  office  or  agency  of the  Company  together  with a  written
instrument  of transfer in form  approved  by the Company  duly  executed by the
registered holder or by his duly authorized attorney,  shall be exchangeable for
a like aggregate  principal amount of coupon bonds of the same series,  with all
unmatured  coupons and any matured  coupons in default  attached,  or for a like
aggregate principal amount of fully registered bonds of the same series of other
authorized denominations.
     The holder of any 1974 Bond in coupon form may have the  ownership  thereof
registered  as to  principal on the books of the Company at the office or agency
of the Company in the City of Chicago,  Illinois, and such registration noted on
such  bond.  After such  registration  no  transfer  of such bond shall be valid
unless  made at said office or agency by the  registered  holder in person or by
his duly authorized  attorney and similarly noted on such bond; but the same may
be discharged from  registration  by being in like manner  transferred to bearer
and thereupon  transferability by delivery shall be restored;  but such bond may
again from time to time be  registered  or  transferred  to bearer in accordance
with the above  procedure.  Such  registration,  however,  shall not  affect the
negotiability  of the coupons  appertaining to such bonds, but every such coupon
shall continue to be transferable by delivery merely and shall remain payable to
bearer.  Fully  registered 1974 Bonds shall also be transferable on the books of
the  Company at said office or agency of the  Company by the  registered  holder
thereof,  in person  or by his duly  authorized  attorney,  upon  surrender  for
cancellation thereof.
     The issue of 1974 Bonds shall be limited to an aggregate  principal  amount
of Eight Million Dollars ($8,000,000) and shall be made on the basis of property
additions under the provisions of Article VI of the Original Mortgage.

     SECTION 3. Such coupon 1974 Bonds, coupons and fully registered 1974 Bonds,
and  the  Trustee's  certificate  thereon,  shall  be in  the  following  forms,
respectively:

                              (Form of Coupon Bond)

                       INDIANAPOLIS POWER & LIGHT COMPANY

                    First Mortgage Bond, 3% Series, Due 1974
                                   Due April 1, 1974

$1,000.00
      No._______________

     INDIANAPOLIS  POWER & LIGHT COMPANY,  a corporation of the State of Indiana
(hereinafter called the Company), for value received,  hereby promises to pay to
the bearer,  or, if this bond be registered,  to the registered owner hereof, on
April 1, 1974,  at the office or agency of the  Company in the City of  Chicago,
Illinois,  One Thousand Dollars in lawful money of the United States of America,
and to pay interest thereon from the date hereof at the rate of three per centum
per annum in like lawful money, at said office or agency on April 1, and October
1 in each year,  until the Company's  obligation  with respect to the payment of
such principal shall have been discharged, but only, in the case of interest due
on or  before  maturity,  according  to the  tenor  and  upon  presentation  and
surrender of the respective coupons therefor hereto attached,  as they severally
mature.  This  bond is one of an  issue of bonds  of the  Company,  issuable  in
series, and is one of a series known as its First Mortgage Bonds, 3% Series, Due
1974,  limited in aggregate  principal amount to $8,000,000 and established by a
Third Supplemental  Indenture dated as of April 1, 1949, all bonds of all series
issued  and to be issued  under and  equally  secured  (except  in so far as any
sinking or other fund,  established  in  accordance  with the  provisions of the
Mortgage hereinafter mentioned,  may afford additional security for the bonds of
any particular series) by a Mortgage and Deed of Trust, dated as of May 1, 1940,
executed by the Company to American  National Bank and Trust Company of Chicago,
as Trustee (which Mortgage and Deed of Trust as supplemented by all supplemental
indentures is  hereinafter  referred to as the  "Mortgage"),  to which  Mortgage
reference is made for a description of the property  mortgaged and pledged,  the
nature  and extent of the  security,  the  rights of the  bearers or  registered
owners of the bonds in respect of such  security,  the duties and  immunities of
the Trustee and the terms and conditions upon which the bonds are secured.
     With the  consent  of the  Company  and to the extent  permitted  by and as
provided in the Mortgage,  the rights and  obligations  of the Company and/or of
the holders of the bonds and/or  coupons  and/or the terms and provisions of the
Mortgage  and/or of any  instruments  supplemental  thereto  may be  modified or
altered by affirmative  vote of the holders of at least sixty-six and two-thirds
per  centum  (66  2/3%)  in  principal  amount  of the  bonds  affected  by such
modification or alteration, then outstanding under the Mortgage (excluding bonds
disqualified from voting by reason of the Company's interest therein as provided
in the Mortgage);  provided that no such modification or alteration shall permit
the  extension of the maturity of the principal of this bond or the reduction in
the rate of interest hereon or any other modification in the terms of payment of
such  principal  or  interest  without  the  consent of the holder  hereof.  The
principal  hereof may be  declared  or may become due and  payable  prior to the
stated date of maturity hereof, on the conditions, in the manner and at the time
set forth in the Mortgage,  upon the occurrence of a completed default as in the
Mortgage provided.
     This bond shall pass by delivery  unless  registered as to principal in the
owner's  name at the  office or agency of the  Company  in the City of  Chicago,
Illinois,  and such  registration  noted hereon,  after which no valid  transfer
hereof can be made,  except at such  office or agency,  until  after  registered
transfer to bearer, but after such registered transfer to bearer this bond shall
be again transferable by delivery. Such registration,  however, shall not affect
the  negotiability  of the coupons,  which shall always remain payable to bearer
and transferable by delivery. The Company and the Trustee may deem and treat the
bearer of this bond if it be not registered as to principal, or, if this bond is
registered  as  herein  authorized,  the  person  in  whose  name  the  same  is
registered,  and the bearer of any coupon hereto  appertaining,  as the absolute
owner for the purpose of receiving payment and for all other purposes.
     The 1974 Bonds are  subject to  redemption  prior to the  maturity  thereof
(otherwise  than  through  the  operation  of the Sinking  Fund  created for the
benefit of the 1974 Bonds by Section 5 of said Third Supplemental Indenture, and
otherwise  than  by  the  application  of  moneys  deposited  with  the  Trustee
representing  the  proceeds  of  mortgaged  and  pledged  property  taken by the
exercise of the power of eminent  domain or otherwise as provided in paragraph B
of Section 69 of the Mortgage),  as a whole at any time, or in part from time to
time, at the option of the Company,  at the following general  redemption prices
(expressed as percentages of their principal amount) respectively, to wit:

         104.500% if redeemed on or before March 31, 1950,
         104.375% if redeemed thereafter to and including March 31, 1951,
         104.250% if redeemed thereafter to and including March 31, 1952,
         104.125% if redeemed thereafter to and including March 31, 1953,
         104.000% if redeemed thereafter to and including March 31, 1954,
         103.875% if redeemed thereafter to and including March 31, 1955,
         103.750% if redeemed thereafter to and including March 31, 1956,
         103.625% if redeemed thereafter to and including March 31, 1957,
         102.750% if redeemed thereafter to and including March 31, 1958,
         102.625% if redeemed thereafter to and including March 31, 1959,
         102.500% if redeemed thereafter to and including March 31, 1960,
         102.375% if redeemed thereafter to and including March 31, 1961,
         102.250% if redeemed thereafter to and including March 31, 1962,
         102.125% if redeemed thereafter to and including March 31, 1963,
         102.000% if redeemed thereafter to and including March 31, 1964,
         101.750% if redeemed thereafter to and including March 31, 1965,
         101.250% if redeemed thereafter to and including March 31, 1966,
         101.125% if redeemed thereafter to and including March 31, 1967,
         101.000% if redeemed thereafter to and including March 31, 1968,
         100.875% if redeemed thereafter to and including March 31, 1969,
         100.750% if redeemed thereafter to and including March 31, 1970,
         100.625% if redeemed thereafter to and including March 31, 1971,
         100.500% if redeemed thereafter to and including March 31, 1972,
         100.375% if redeemed thereafter to and including March 31, 1973,
         100   % if redeemed thereafter,

together, in each case, with accrued interest to the redemption date.

     The 1974 Bonds are subject to redemption  prior to maturity thereof through
the  operation  of the Sinking Fund created for the benefit of the 1974 Bonds by
Section 5 of said Third Supplemental  Indenture, or out of moneys deposited with
the Trustee representing the proceeds of mortgaged and pledged property taken by
exercise of the power of eminent  domain or otherwise as provided in paragraph B
of  Section 69 of the  Mortgage,  at the  following  special  redemption  prices
(expressed as percentages of their principal amount) respectively, to wit:

         101.875% if redeemed on or before March 31, 1950,
         101.750% if redeemed thereafter to and including March 31, 1951,
         101.750% if redeemed thereafter to and including March 31, 1952,
         101.625% if redeemed thereafter to and including March 31, 1953,
         101.625% if redeemed thereafter to and including March 31, 1954,
         101.625% if redeemed thereafter to and including March 31, 1955,
         101.500% if redeemed thereafter to and including March 31, 1956,
         101.500% if redeemed thereafter to and including March 31, 1957,
         101.375% if redeemed thereafter to and including March 31, 1958,
         101.375% if redeemed thereafter to and including March 31, 1959,
         101.250% if redeemed thereafter to and including March 31, 1960,
         101.250% if redeemed thereafter to and including March 31, 1961,
         101.125% if redeemed thereafter to and including March 31, 1962,
         101.125% if redeemed thereafter to and including March 31, 1963,
         101.000% if redeemed thereafter to and including March 31, 1964,
         100.875% if redeemed thereafter to and including March 31, 1965,
         100.875% if redeemed thereafter to and including March 31, 1966,
         100.750% if redeemed thereafter to and including March 31, 1967,
         100.750% if redeemed thereafter to and including March 31, 1968,
         100.625% if redeemed thereafter to and including March 31, 1969,
         100.500% if redeemed thereafter to and including March 31, 1970,
         100.500% if redeemed thereafter to and including March 31, 1971,
         100.375% if redeemed thereafter to and including March 31, 1972,
         100.250% if redeemed thereafter to and including March 31, 1973,
         100   % if redeemed thereafter,

         together, in each case, with accrued interest to the redemption date

     In the manner and upon payment of the charges  prescribed  in the Mortgage,
coupon  bonds of the 3%  Series,  Due  1974,  upon  surrender  thereof  with all
unmatured coupons and any matured coupons in default appertaining thereto at the
office  or  agency  of the  Company  in  the  City  of  Chicago,  Illinois,  are
exchangeable for a like aggregate  principal amount of fully registered bonds of
the same  series  of  authorized  denominations,  and in like  manner  any fully
registered  bonds of the 3% Series,  Due 1974,  upon  surrender  thereof at said
office or agency of the Company,  from time to time with a written instrument of
transfer in form approved by the Company duly executed by the registered  holder
or by his  duly  authorized  attorney,  are  exchangeable  for a like  aggregate
principal amount of coupon bonds of the same series,  with all unmatured coupons
and any matured coupons in default attached,  or for a like aggregate  principal
amount  of  fully  registered  bonds  of the same  series  of  other  authorized
denominations.
     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,  as such,  either directly or through the
Company  or any  predecessor  or  successor  corporation  under any rule of law,
statue or constitution or by the enforcement of any assessment or otherwise, all
such  liability  of  incorporators,   subscribers,  stockholders,  officers  and
directors, as such, being waived and released by the terms of the Mortgage.
     This bond shall not become  obligatory  until  American  National  Bank and
Trust  Company of Chicago,  the Trustee  under the  Mortgage,  or its  successor
thereunder, shall have signed the form of certificate endorsed hereon.

     IN WITNESS WHEREOF, Indianapolis Power & Light Company has caused this bond
to be signed in its name by its President or one of its  Vice-Presidents and its
corporate  seal to be affixed hereto and attested by its Secretary or one of its
Assistant  Secretaries,  and interest coupons bearing the facsimile signature of
its Treasurer to be attached hereto.

     Dated, April 1, 1949.

                                            INDIANAPOLIS POWER & LIGHT COMPANY,

                                            By:
                                               ---------------------------------
                                                                President

Attest:

______________________________,
                Secretary.

                            [Form of October Coupon]

                    First Mortgage Bond, 3% Series, Due 1974

$15.00
    No._________

     On October 1, ______, INDIANAPOLIS POWER & LIGHT COMPANY will pay to bearer
at its office or agency in the City of  Chicago,  Illinois,  Fifteen  Dollars in
lawful money of the United States of America, as specified in its First Mortgage
Bond, 3% Series, Due 1974, No.  __________,  being six months' interest then due
on said bond.

     This coupon will not be payable if said bond shall have  previously  become
payable or been called for previous redemption and payment duly provided for.

                                               ---------------------------------
                                                                Treasurer

                             [Form of April Coupon]

                    First Mortgage Bond, 3% Series, Due 1974

$15.00
    No._________

     On April 1, _____, INDIANAPOLIS POWER & LIGHT COMPANY will pay to bearer at
its office or agency in the City of Chicago, Illinois, Fifteen Dollars in lawful
money of the United States of America,  as specified in its First Mortgage Bond,
3% Series,  Due 1974, No.  ___________,  being six months' interest then due, on
said bond.

     This coupon will not be payable if said bond shall have  previously  become
payable or been called for previous redemption and payment duly provided for.

                                                --------------------------------
                                                                     Treasurer

                         (Form of Fully Registered Bond)

                       INDIANAPOLIS POWER & LIGHT COMPANY
                    First Mortgage Bond, 3% Series, Due 1974

                                Due April 1, 1974

$__________
        No._______________

     INDIANAPOLIS  POWER & LIGHT COMPANY,  a corporation of the State of Indiana
(hereinafter  called the Company),  for value  received,  hereby promises to pay
_________________________________________  or registered assigns, April 1, 1974,
at the  office  or  agency  of the  Company  in the City of  Chicago,  Illinois,
_________________________  Dollars  in  lawful  money of the  United  States  of
America,  and to pay to the registered  owner hereof  interest  thereon from the
first day of April next  preceding  the date of this bond, or from the first day
of October next  preceding  the date of this bond if this bond be dated  between
October 1 and April 2 of any year,  at the rate of Three per centum per annum in
like  lawful  money,  at said  office or agency on April 1 and October 1 in each
year,  until the  Company's  obligation  with  respect  to the  payment  of such
principal shall have been  discharged.  This bond is one of an issue of bonds of
the  Company,  issuable  in  series,  and is one of a series  known as its First
Mortgage Bonds, 3% Series,  Due 1974,  limited in aggregate  principal amount to
$8,000,000 and established by a Third  Supplemental  Indenture dated as of April
1, 1949,  all bonds of all  series  issued  and to be issued  under and  equally
secured  (except  in so  far  as any  sinking  or  other  fund,  established  in
accordance with the provisions of the Mortgage hereinafter mentioned, may afford
additional  security for the bonds of any  particular  series) by a Mortgage and
Deed of Trust,  dated as of May 1, 1940,  executed  by the  Company to  American
National Bank and Trust Company of Chicago, as Trustee, (which Mortgage and Deed
of Trust as supplemented by all supplemental  indentures is hereinafter referred
to as the  "Mortgage") to which Mortgage  reference is made for a description of
the property mortgaged and pledged,  the nature and extent of the security,  the
rights of the  bearers  or  registered  owners of the bonds in  respect  of such
security,  the duties and immunities of the Trustee and the terms and conditions
upon which the bonds are secured.

     With the  consent  of the  Company  and to the extent  permitted  by and as
provided in the Mortgage,  the rights and  obligations  of the Company and/or of
the holders of the bonds and/or  coupons  and/or the terms and provisions of the
Mortgage  and/or of any  instruments  supplemental  thereto  may be  modified or
altered by affirmative  vote of the holders of at least sixty-six and two-thirds
per  centum  (66  2/3%)  in  principal  amount  of the  bonds  affected  by such
modification or alteration, then outstanding under the Mortgage (excluding bonds
disqualified from voting by reason of the Company's interest therein as provided
in the Mortgage);  provided that no such modification or alteration shall permit
the  extension of the maturity of the principal of this bond or the reduction in
the rate of interest hereon or any other modification in the terms of payment of
such  principal  or  interest  without  the  consent of the holder  hereof.  The
principal  hereof may be  declared  or may become due and  payable  prior to the
stated date of maturity hereof, on the conditions, in the manner and at the time
set forth in the Mortgage,  upon the occurrence of a completed default as in the
Mortgage provided.

     This bond 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 City of  Chicago,  Illinois,  upon  surrender  and
cancellation  of this  bond and upon  presentation  of a written  instrument  of
transfer,  duly executed,  and upon payment, if the Company shall require it, of
the transfer charges  prescribed in the Mortgage,  and,  thereupon,  a new fully
registered bond of the same series for a like principal amount will be issued to
the transferee in exchange herefor as provided in the Mortgage.  The Company and
the Trustee may deem and treat the person in whose name this bond is  registered
as the absolute  owner  hereof for the purpose of receiving  payment and for all
other purposes.

     The 1974 Bonds are  subject to  redemption  prior to the  maturity  thereof
(otherwise  than  through  the  operation  of the Sinking  Fund  created for the
benefit of the 1974 Bonds by Section 5 of said Third Supplemental Indenture, and
otherwise  than  by  the  application  of  moneys  deposited  with  the  Trustee
representing  the  proceeds  of  mortgaged  and  pledged  property  taken by the
exercise of the power of eminent  domain or otherwise as provided in paragraph B
of Section 69 of the Mortgage),  as a whole at any time, or in part from time to
time, at the option of the Company,  at the following general  redemption prices
(expressed as percentages of their principal amount) respectively, to wit:

         104.500% if redeemed on or before March 31, 1950,
         104.375% if redeemed thereafter to and including March 31, 1951,
         104.250% if redeemed thereafter to and including March 31, 1952,
         104.125% if redeemed thereafter to and including March 31, 1953,
         104.000% if redeemed thereafter to and including March 31, 1954,
         103.875% if redeemed thereafter to and including March 31, 1955,
         103.750% if redeemed thereafter to and including March 31, 1956,
         103.625% if redeemed thereafter to and including March 31, 1957,
         102.750% if redeemed thereafter to and including March 31, 1958,
         102.625% if redeemed thereafter to and including March 31, 1959,
         102.500% if redeemed thereafter to and including March 31, 1960,
         102.375% if redeemed thereafter to and including March 31, 1961,
         102.250% if redeemed thereafter to and including March 31, 1962,
         102.125% if redeemed thereafter to and including March 31, 1963,
         102.000% if redeemed thereafter to and including March 31, 1964,
         101.750% if redeemed thereafter to and including March 31, 1965,
         101.250% if redeemed thereafter to and including March 31, 1966,
         101.125% if redeemed thereafter to and including March 31, 1967,
         101.000% if redeemed thereafter to and including March 31, 1968,
         100.875% if redeemed thereafter to and including March 31, 1969,
         100.750% if redeemed thereafter to and including March 31, 1970,
         100.625% if redeemed thereafter to and including March 31, 1971,
         100.500% if redeemed thereafter to and including March 31, 1972,
         100.375% if redeemed thereafter to and including March 31, 1973,
         100   % if redeemed thereafter,

together, in each case, with accrued interest to the redemption date.

     The 1974 Bonds are subject to redemption  prior to maturity thereof through
the  operation  of the Sinking Fund created for the benefit of the 1974 Bonds by
Section 5 of said Third Supplemental  Indenture, or out of moneys deposited with
the Trustee representing the proceeds of mortgaged and pledged property taken by
exercise of the power of eminent  domain or otherwise as provided in paragraph B
of  Section 69 of the  Mortgage,  at the  following  special  redemption  prices
(expressed as percentages of their principal amount) respectively, to wit:

         101.875% if redeemed on or before March 31, 1950,
         101.750% if redeemed thereafter to and including March 31, 1951,
         101.750% if redeemed thereafter to and including March 31, 1952,
         101.625% if redeemed thereafter to and including March 31, 1953,
         101.625% if redeemed thereafter to and including March 31, 1954,
         101.625% if redeemed thereafter to and including March 31, 1955,
         101.500% if redeemed thereafter to and including March 31, 1956,
         101.500% if redeemed thereafter to and including March 31, 1957,
         101.375% if redeemed thereafter to and including March 31, 1958,
         101.375% if redeemed thereafter to and including March 31, 1959,
         101.250% if redeemed thereafter to and including March 31, 1960,
         101.250% if redeemed thereafter to and including March 31, 1961,
         101.125% if redeemed thereafter to and including March 31, 1962,
         101.125% if redeemed thereafter to and including March 31, 1963,
         101.000% if redeemed thereafter to and including March 31, 1964,
         100.875% if redeemed thereafter to and including March 31, 1965,
         100.875% if redeemed thereafter to and including March 31, 1966,
         100.750% if redeemed thereafter to and including March 31, 1967,
         100.750% if redeemed thereafter to and including March 31, 1968,
         100.625% if redeemed thereafter to and including March 31, 1969,
         100.500% if redeemed thereafter to and including March 31, 1970,
         100.500% if redeemed thereafter to and including March 31, 1971,
         100.375% if redeemed thereafter to and including March 31, 1972,
         100.250% if redeemed thereafter to and including March 31, 1973,
         100   % if redeemed thereafter,

         together, in each case, with accrued interest to the redemption date

     In the manner and upon payment of the charges  prescribed  in the Mortgage,
coupon  bonds of the 3%  Series,  Due  1974,  upon  surrender  thereof  with all
unmatured coupons and any matured coupons in default appertaining thereto at the
office  or  agency  of the  Company  in  the  City  of  Chicago,  Illinois,  are
exchangeable for a like aggregate  principal amount of fully registered bonds of
the same  series  of  authorized  denominations,  and in like  manner  any fully
registered  bonds of the 3% Series,  Due 1974,  upon  surrender  thereof at said
office or agency of the Company,  from time to time with a written instrument of
transfer in form approved by the Company duly executed by the registered  holder
or by his  duly  authorized  attorney,  are  exchangeable  for a like  aggregate
principal amount of coupon bonds of the same series,  with all unmatured coupons
and any matured coupons in default attached,  or for a like aggregate  principal
amount  of  fully  registered  bonds  of the same  series  of  other  authorized
denominations.

     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,  as such,  either directly or through the
Company  or any  predecessor  or  successor  corporation  under any rule of law,
statue or constitution or by the enforcement of any assessment or otherwise, all
such  liability  of  incorporators,   subscribers,  stockholders,  officers  and
directors, as such, being waived and released by the terms of the Mortgage.

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

     IN WITNESS WHEREOF, Indianapolis Power & Light Company has caused this bond
to be signed in its name by its President or one of its  Vice-Presidents and its
corporate  seal to be affixed hereto and attested by its Secretary or one of its
Assistant Secretaries.

     Dated, _______________________.

                                             INDIANAPOLIS POWER & LIGHT COMPANY,

                                             By:
                                                --------------------------------
                                                                President

Attest:

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

                  [Form of Trustee's Certificate on all Bonds]

                              Trustee's Certificate

     This bond is one of the bonds,  of the series herein  designated,  provided
for in the within-mentioned Mortgage and Third Supplemental Indenture.

                                                AMERICAN NATIONAL BANK AND TRUST
                                                COMPANY OF CHICAGO, Trustee,

                                                By:
                                                   -----------------------------
                                                            Authorized Officer

     SECTION 4. Until the 1974 Bonds in definitive  form are ready for delivery,
the Company  may  execute,  and upon its  request in writing  the Trustee  shall
authenticate  and deliver,  in lieu  thereof,  1974 Bonds in temporary  form, as
provided  in  Section  15 of  the  Original  Mortgage,  with  the  privilege  of
registration  as to principal only, and with Coupons No. 1 and No. 2 maturing on
October 1, 1949 and April 1, 1950, respectively.  Such bonds may, in lieu of the
statement of the  specific  redemption  prices  required to be set forth in such
Bonds in  definitive  form,  included a  reference  to this  Third  Supplemental
Indenture for a statement of such redemption prices.

     SECTION 5. The  Company  covenants  that,  so long as any of the 1974 Bonds
issued under this Third  Supplemental  Indenture  shall remain  outstanding,  it
will, on or before the first day of April of each year  beginning  with the year
1954,  deliver to the Trustee,  as and for a Sinking Fund for the benefit of the
holders  or the  registered  owners of 1974  Bonds,  an  amount  in cash  and/or
principal amount of 1974 Bonds equivalent to one per centum (1%) of the greatest
principal amount of 1974 Bonds theretofore at any one time outstanding.

     Such  cash  together  with any bonds  delivered  to the  Trustee  under the
provisions of this Section shall be dealt with as provided for by this Section.

     All  cash  deposited  by the  Company  with  the  Trustee  pursuant  to the
provisions of this Section shall be applied by the Trustee from time to time and
as rapidly as may be practicable to the purchase of 1974 Bonds then outstanding,
at public or  private  sale at the  lowest  prices  at which  such  bonds can be
obtained, not exceeding,  however, the then special redemption price and accrued
interest  thereon to the date of purchase,  or, if the Company shall so request,
the  Trustee  shall  apply any cash then held by it under  this  Section  to the
redemption of 1974 Bonds as soon as may be  practicable  after such request.  In
case the balance of such cash remaining with the Trustee on the twentieth day of
August of any year beginning with the year 1954 shall aggregate $25,000 or more,
the  Trustee  shall apply the same to the  redemption  of 1974 Bonds on the next
succeeding first day of October,  in which case the Trustee shall give notice of
such  redemption in the name of the Company in the manner and in accordance with
the applicable  provisions of Article XII of the Original Mortgage and Section 2
of this Third  Supplemental  Indenture;  and the Trustee is hereby appointed the
agent of the Company for such purpose.  The Company  covenants that whenever any
redemption of 1974 Bonds shall be required under the provisions of this Section,
it will at the request of the Trustee take all action  necessary,  and authorize
the Trustee to take all action necessary, to redeem such bonds.

     The 1974 Bonds shall be subject to redemption through the operation of such
Sinking Fund by the payment of an amount equal to the  applicable  percentage of
principal  amount set forth in Section 2 of this Third  Supplemental  Indenture,
plus accrued and unpaid interest to the date fixed for  redemption.  The Company
shall have the right to tender  1974 Bonds for sale by it to the  Trustee  under
the provisions of this Section.

     The Company shall pay to the Trustee,  on demand, the amount of accrued and
unpaid interest upon all bonds purchased or redeemed pursuant to this Section.

     Any bonds  deposited,  purchased or redeemed  pursuant to the provisions of
this Section,  shall forthwith be canceled by the Trustee,  and upon the request
of the  Company,  the  Trustee may cremate the same and deliver to the Company a
certificate of such cremation.

     The  Company  covenants  that it will not use any bonds  heretofore  issued
under the  Mortgage  (including  any of the 1974  Bonds)  which  may be  retired
pursuant to the respective  sinking funds provided for the bonds now outstanding
or the 1974 bonds,  as the basis for the  authentication  and  delivery of bonds
pursuant to Article VII of the  Mortgage,  or as a credit  pursuant to any other
provision of the Mortgage.

     SECTION 6. The  Company  covenants  that,  so long as any of the 1974 Bonds
shall  remain  outstanding,  it will  continue to make to the Trustee the annual
payments for a Maintenance  and  Improvement  Fund required by Section 41 of the
Original Mortgage and will comply with the provisions of said Section 41.

     SECTION 7. The  Company  covenants  that,  so long as any of the 1974 Bonds
shall remain  outstanding,  it will comply with all of the provisions of Section
47  of  the  Original  Mortgage,   including  the  provisions  with  respect  to
limitations  on dividends and  distributions  and the purchase and redemption of
stock.

     SECTION 8. Section 1 of the Original  Mortgage is hereby  supplemented  and
amended by adding the following new sentence to said Section 1, as follows:

                  "Any term defined in Section 303 of the Trust
                  Indenture Act of 1939 and not defined in this
                  Indenture shall have the meaning assigned to such
                  term in such Section 303."

     SECTION 9. The first  sentence of the next to the last paragraph of Section
2 of the Original Mortgage is hereby amended so that said sentence,  as amended,
shall read as follows:

                  "For the purposes of Sections 46, 72, 76, 77, 87,
                  98, 112, 113, 115, 119, and 124 hereof, in
                  determining whether the holders of the required
                  percentage of the principal amount of bonds have
                  concurred in any direction, request, consent, or
                  in determining a quorum under Section 123, bonds
                  owned by the Company or by any other obligor on
                  the bonds, or by any person directly or
                  indirectly controlling or controlled by or under
                  direct or indirect common control with the
                  Company or such obligor, shall be disregarded,
                  except that for the purpose of determining
                  whether the Trustee shall be protected in relying
                  on any such direction, request or consent only
                  bonds which the Trustee knows are so owned, shall
                  be so disregarded."

     SECTION  10.  Section  30 of the  Original  Mortgage  is hereby  amended by
striking  out the words "or more than" in the two places where such words appear
in subdivision (3) of said Section 30.

     Section 30 of the Original Mortgage is hereby further amended by adding the
following new sentence at the end of subdivision (10) thereof:

                  "Any such supplemental indenture shall comply
                  with all applicable provisions of the Trust
                  Indenture Act of 1939 as then in force."

     SECTION 11. Section 53 of the Original Mortgage is hereby  supplemented and
amended by adding  immediately  after  subsection  (d) thereof the following new
subsection (e) as follows:

                  "(e)  The provisions of this Section 53, which
                  have been made specifically applicable to the
                  Trustee shall apply to the Trustee and, if a
                  separate or co-trustee is appointed pursuant to
                  the provisions of Section 114 hereof, to any
                  separate or co-trustee."

     SECTION  12.  Section  38 of the  Original  Mortgage  is hereby  amended by
amending  subsection (a) thereof so that said subsection (a), as amended,  shall
read as follows:

                  "(a)  That, if the Company shall appoint a paying
                  agent other than the Trustee, it will cause such
                  paying agent to execute and deliver to the
                  Trustee an instrument in which such paying agent
                  shall agree with the Trustee, subject to the
                  provisions of this Section, (1) that such paying
                  agent shall hold in trust for the benefit of the
                  bondholders or the Trustee all sums held by such
                  paying agent for the payment of the principal of
                  or interest on the bonds and premium, if any; and
                  (2) that such paying agent shall give the Trustee
                  notice of any default by the Company or any other
                  obligor on the bonds in the making of any deposit
                  with it for the payment of the principal of or
                  interest on the bonds and premium, if any, and of
                  any default by the Company or any other obligor
                  on the bonds in the making of any such payment.
                  Such paying agent shall not be obligated to
                  segregate such sums from other funds of such
                  paying agent except to the extent required by
                  law."

     SECTION  13.  Section  65 of the  Original  Mortgage  is hereby  amended by
amending subdivision (1) thereof so that said subdivision (1), as amended, shall
read as follows:

                  "(1)  sell or otherwise dispose of, free from the
                  lien of this Indenture any machinery, equipment,
                  tools, implements or other similar property,
                  which shall have become old, inadequate,
                  obsolete, worn out or unfit or unadapted for use
                  in the operations of the Company, upon replacing
                  the same by or substituting for the same other
                  property (not then within the term funded
                  property) of at least equal value to that of the
                  property sold or otherwise disposed of and
                  subject to no liens prior hereto except liens to
                  which the property sold or otherwise disposed of
                  was subject;"

     SECTION 14. Section 85 of the Original Mortgage is hereby  supplemented and
amended by adding at the end thereof a new paragraph, as follows:

                  "For the purposes of this Section 85 the term
                  "Company" shall include any other obligor on the
                  bonds."

     SECTION 15.  Section 97 and Section 98 of the Original  Mortgage are hereby
supplemented  and  amended  by  adding  at the end of each  such  Section  a new
paragraph, as follows:

                  "The provisions of this Section, which have been
                  made specifically applicable to the Trustee,
                  shall apply to the Trustee and, if a separate or
                  co-trustee is appointed pursuant to Section 114
                  hereof, to any separate or co-trustee."

     SECTION 16. Section 124 of the Original Mortgage is hereby supplemented and
amended  by adding  at the end of the first  sentence  of said  Section  124 the
following proviso:

                  "; and provided, further, that no such
                  modification or alteration shall permit the
                  waiver of any completed default, as defined in
                  Section 72 hereof, and its consequences without
                  the approval of at least a majority in principal
                  amount of all bonds then outstanding hereunder."

     SECTION  17.  The  Trustee  hereby  accepts  the trusts  herein  described,
provided  and  created  and  agrees  to  perform  the same  upon the  terms  and
conditions  herein and in the Original Mortgage set forth and upon the following
terms and conditions:

     The  recitals  contained  herein  and in the  bonds  shall  be taken as the
statements  of the  Company and the Trustee  assumes no  responsibility  for the
correctness of the same. The Trustee makes no  representations as to validity or
adequacy of the security  afforded  hereby,  or as to the validity of this Third
Supplemental Indenture or of the bonds or coupons issued hereunder.

     SECTION 18.  Whenever in this Third  Supplemental  Indenture  either of the
parties hereto is named or referred to, this shall, subject to the provisions of
Article XVII of the Original  Mortgage,  be deemed to include the  successors or
assigns  of such  party,  and all the  covenants  and  agreements  in this Third
Supplemental  Indenture  contained by or on behalf of the  Company,  or by or on
behalf  of the  Trustee,  shall,  subject  as  aforesaid,  bind and inure to the
benefit of the  respective  successors  and assigns of such parties,  whether so
expressed or not.

     SECTION 19.  Nothing in this Third  Supplemental  Indenture,  expressed  or
implied,  is intended or shall be construed  to confer upon,  or to give to, any
person,  co-partnership  or  corporation,  other than the parties hereto and the
holders of the bonds and  coupons  outstanding  under the  Mortgage,  any right,
remedy, or claim under or by reason of this Third Supplemental  Indenture or any
covenant, condition or stipulation hereof; and all the covenants,  stipulations,
promises and agreements in this Third Supplemental  Indenture contained by or on
behalf of the Company shall be for the sole and exclusive benefit of the parties
hereto and of the holders of the bonds and of the coupons  outstanding under the
Mortgage.

     SECTION 20. The Company  covenants  that all of the terms,  provisions  and
conditions of the Original Mortgage shall be applicable to the 1974 Bonds issued
hereunder,  except as herein otherwise provided and except in so far as the same
may be inconsistent with the provisions of this Third Supplemental Indenture.

     SECTION 21. This Third Supplemental Indenture is dated as of April 1, 1949,
although executed and delivered on the date of the acknowledgement hereof by the
Trustee; and shall be simultaneously  executed in several counterparts,  and all
such counterparts executed and delivered,  each as an original, shall constitute
but one and the same instrument.

     IN WITNESS WHEREOF,  INDIANAPOLIS POWER & LIGHT COMPANY, party of the first
part, has caused its corporate name to be hereunto  affixed and this  instrument
to be signed and  acknowledged  by its  President or a  Vice-President,  and its
corporate  seal  to be  hereto  affixed  and  attested  by its  Secretary  or an
Assistant Secretary, for and in its behalf, and AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO,  party of the second part,  has caused its corporate name to
be hereunto  affixed and this instrument to be signed and acknowledged by one of
its Vice-Presidents, and its corporate seal to be hereto affixed and attested by
its Assistant Secretary, all as of the day, month and year first above written.

                                            INDIANAPOLIS POWER & LIGHT COMPANY,

                                            By: /s/D. C. Hess,
                                                        Vice-President

Attest:

         /s/Ralph W. Husted,
                Assistant Secretary

(CORPORATE SEAL)

                                            AMERICAN NATIONAL BANK AND TRUST
                                            COMPANY OF CHICAGO,

                                            By: /s/L. W. Fischer,
                                                        Vice-President

Attest:

         /s/E. C. Dovale,
                Assistant Secretary.

(CORPORATE SEAL)

<PAGE>

STATE OF INDIANA  )
                  )  SS.:
COUNTY OF MARION  )

     On this 11h day of May, in the year 1949, before me, a Notary Public in and
for the County and State aforesaid,  personally came D. C. Hess, Vice-President,
and Ralph W. Husted, Assistant Secretary, of Indianapolis Power & Light Company,
one  of  the  corporations   described  in  and  which  executed  the  foregoing
instrument,  to me  personally  known  and  known  to me  personally  to be such
Vice-President and Assistant Secretary,  respectively. Said D. C. Hess and Ralph
W. Husted being by me  severally  duly sworn did depose and say that the said D.
C. Hess resides in the City of Indianapolis,  Marion County,  Indiana,  and that
the said Ralph W. Husted  resides in the City of  Indianapolis,  Marion  County,
Indiana;  that said D. C. Hess is  Vice-President  and said  Ralph W.  Husted is
Assistant  Secretary of said  Indianapolis  Power & Light Company;  that each of
them knows the corporate seal of said corporation; that the seal affixed to said
instrument and bearing the name of said corporation is such corporate seal; that
it was so affixed by order of the Board of  Directors of said  corporation;  and
that  each of them  signed  his name  thereto  by like  order;  and each of them
acknowledged  the execution of said instrument on behalf of said  corporation to
be his free and  voluntary  act and deed and the free and voluntary act and deed
of said corporation, for the uses and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 11th day of May, 1949.

                                                Harold B. Johnson,
                                                        Notary Public

My Commission Expires:
   Sept. 17, 1959.                                               (NOTARIAL SEAL)

<PAGE>

STATE OF ILLINOIS )
                  ) SS.:
COUNTY OF COOK    )

     On this 11th day of May,  in the year 1949,  before me, a Notary  Public in
and for  the  County  and  State  aforesaid,  personally  came  L.  W.  Fischer,
Vice-President,  and A. H. Morstadt,  Assistant Secretary,  of American National
Bank and Trust  Company of Chicago,  one of the  corporations  described  in and
which executed the foregoing instrument,  to me personally known and known to me
personally to be such Vice-President and Assistant Secretary, respectively. Said
L. W. Fischer and A. H. Morstadt being by me severally duly sworn did depose and
say  that the  said L. W.  Fischer  resides  in the  City of  Chicago,  State of
Illinois,  and that the said A. H. Morstadt  resides in the Village of Elmhurst,
State of  Illinois;  that said L. W.  Fischer is  Vice-President  and said A. H.
Morstadt is Assistant Secretary of said American National Bank and Trust Company
of Chicago; that each of them knows the corporate seal of said corporation; that
the seal affixed to said instrument and bearing the name of said  corporation is
such  corporate  seal;  that it was so  affixed  by  authority  of the  Board of
Directors of said corporation;  and that each of them signed his name thereto by
like authority;  and each of them  acknowledged the execution of said instrument
on behalf of said  corporation to be his free and voluntary act and deed and the
free and voluntary act and deed of said  corporation,  for the uses and purposes
therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 11th day of May, 1949.

                                                        Ruth V. Baumgartner,
                                                                Notary Public

My Commission Expires:
         December 21, 1949.

(NOTARIAL SEAL)
<PAGE>
<TABLE>
<CAPTION>

                                    RECORDING DATA

                             Third Supplemental Indenture
                               dated as of April 1, 1949

------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
County              Instrument                   Record                             Page          Instrument     Recording Date
                                                                                                  No.
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
<S>                 <C>                          <C>                                <C>           <C>            <C>
Marion              Real Estate Mortgage         Mortgage Record 1505               66            26946          5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
                    Chattel Mortgage             Chattel Minute Record 99           146           26947          5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
Hendricks           Real Estate Mortgage         Mortgage Record 122                154           5544           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
                    Chattel Mortgage             Chattel Minute Record 8            138           5545           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
Morgan              Real Estate Mortgage         Mortgage Record 92                 255           2043           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
                    Chattel Mortgage             Chattel Minute Record 36           306           2044           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
Johnson             Real Estate Mortgage         Mortgage Record 95                 427           13231          5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
                    Chattel Mortgage             Chattel Minute Record 8            214           13230          5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
Hamilton            Real Estate Mortgage         Mortgage Record 103                311           0846           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
                    Chattel Mortgage             Chattel Minute Record 3            284           0847           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
Boone               Real Estate Mortgage         Mortgage Record 115                73            2868           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
                    Chattel Mortgage             Chattel Minute Record 12           18            2869           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
Hancock             Real Estate Mortgage         Mortgage Record 84                 279           11387          5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
                    Chattel Mortgage             Chattel Minute Record 9            ----          11388          5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
Pike                Real Estate Mortgage         Mortgage Record 27                 52            1443           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
                    Chattel Mortgage             Chattel Minute Record 4            244           1444           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
Sullivan            Real Estate Mortgage         Mortgage Record 119                ----          81739          5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
                    Chattel Mortgage             Chattel Minute Record 8            220           81740          5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
Gibson              Real Estate Mortgage         Mortgage Record 153                28            8373           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------
                    Chattel Mortgage             Chattel Minute Record 8            10            8374           5-12-49
------------------- ---------------------------- ---------------------------------- ------------- -------------- ---------------

</TABLE>
<PAGE>

                                                                   Exhibit 4.4.2

================================================================================

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                       TO

                        AMERICAN NATIONAL BANK AND TRUST
                               COMPANY OF CHICAGO
                                                        TRUSTEE

                                  _____________

                          Tenth Supplemental Indenture

                                  _____________

                           Dated as of October 1, 1960

                       ESTABLISHING FIRST MORTGAGE BONDS,
                             4 5/8% SERIES, DUE 1990

================================================================================

<PAGE>
                               TABLE OF CONTENTS*
                                       of
                          TENTH SUPPLEMENTAL INDENTURE
                                       of
                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                            Page

PARTIES.....................................................................  1

RECITALS....................................................................  1

SEC. 1   Granting clauses...................................................  3

            Part I  Real property in the County of Marion...................  3

            Part II  Electric Distributing Systems..........................  7

            Part III  Steam and Hot Water Distributing Systems..............  8

            Part IV  Indeterminate Permits and Franchises...................  8

            Part V  Other Property..........................................  8

         General and after-acquired property................................  9

SEC. 2   Designation of tenth series of bonds and kinds and
            denominations thereof........................................... 10

         Designation of American National Bank and
            Trust Company of Chicago as paying agent........................ 10

         Procedure for exchanges of bonds................................... 11

         Registration and transfer of bonds................................. 12

         Series limited to $12,000,000...................................... 12

SEC. 3   Form of coupon bonds............................................... 12

         Form of April coupon............................................... 18

         Form of October coupon............................................. 18

         Form of fully registered bond...................................... 19

         Form of Trustee's certificate on all bonds......................... 24

SEC. 4   Temporary bonds.................................................... 24

SEC. 5   Sinking Fund provided for this Series.............................. 24

SEC. 6   Annual payments for Maintenance and Improvement Fund............... 26

SEC. 7   Compliance with Section 47 of Original Mortgage with respect to
            dividend restrictions........................................... 26

SEC. 8   Condition of redemption prior to October 1, 1965................... 26

SEC. 9   Use of facsimile signatures........................................ 26

SEC. 10  Acceptance of trusts by Trustee and conditions of acceptance....... 27

SEC. 11  Successors and assigns............................................. 27

SEC. 12  Limitation of rights hereunder..................................... 27

SEC. 13  Compliance with terms, provisions and conditions of Mortgage....... 28

SEC. 14  Execution in counterparts.......................................... 28

TESTIMONIUM................................................................. 28

SIGNATURES AND SEALS........................................................ 28

ACKNOWLEDGMENTS............................................................. 29
--------
*    Table of  Contents  is not part of the  Tenth  Supplemental  Indenture  and
     should not be considered  as such. it is included  herein only for purposes
     of convenient reference.
<PAGE>

        THIS TENTH SUPPLEMENTAL INDENTURE,  dated as of October 1, 1960, between
INDIANAPOLIS  POWER & LIGHT  COMPANY,  a  corporation  of the State of  Indiana,
hereinafter  sometimes  called  the  "Company",  party of the  first  part,  and
AMERICAN  NATIONAL  BANK AND  TRUST  COMPANY  OF  CHICAGO,  a  national  banking
association,  hereinafter  sometimes  called the "Trustee",  party of the second
part;

        WHEREAS,  the  Company  by a  Mortgage  and Deed of  Trust  (hereinafter
sometimes  called the "Original  Mortgage" when referred to as existing prior to
any supplement thereto, and the "Mortgage" when referred to as now or heretofore
supplemented)  dated as of May 1, 1940, made to said American  National Bank and
Trust Company of Chicago,  as Trustee, to secure the payment of the bonds issued
from time to time under the  Mortgage  for the  purposes  of and  subject to the
limitations  specified in the  Mortgage,  and to secure the  performance  of the
covenants  therein  contained,  conveyed to the Trustee  thereunder upon certain
trusts,  terms and  conditions,  and with and  subject to certain  provisos  and
covenants  therein  contained,  all  and  singular  the  property,   rights  and
franchises which the Company then owned or should thereafter acquire,  excepting
the property  expressly  excepted by the terms of the  Original  Mortgage or any
indenture  supplemental  thereto, to which Mortgage reference is hereby made for
greater certainty; and

        WHEREAS,  the Original  Mortgage has been  supplemented  by supplemental
indentures dated as of May 1, 1942, as of February 1, 1948, as of April 1, 1949,
as of October 1, 1949,  as of February 1, 1951,  as of March 1, 1953, as of June
1, 1956 and as of March 1, 1958; and

        WHEREAS,  Section 8 of the Original  Mortgage  provides that the form of
each series of bonds (other than the 3 1/4% Series,  due 1970) issued thereunder
and of the coupons to be attached to the coupon bonds of such  series,  shall be
established by an indenture supplemental thereto authorized by resolution of the
Board  of  Directors  of the  Company,  and that  the  form of each  series,  as
established by the Board of Directors,  shall specify the  descriptive  title of
the bonds and  various  other terms  thereof,  and may also  contain  such other
provisions  as the  Board  of  Directors  may,  in its  discretion,  cause to be
inserted therein  expressing or referring to the terms and conditions upon which
such bonds are to be issued  and  secured  under the  Original  Mortgage  or any
indenture supplemental thereto; and

        WHEREAS,   the  Company  now  desires  to  provide  for  the   creation,
establishment,  execution,  authentication,  delivery  and  issuance  under  the
Mortgage  of bonds of a series to be entitled  and  designated  "First  Mortgage
Bonds,  4 5/8% Series,  due 1990" (the bonds of said  series  being  hereinafter
sometimes  referred  to as "1990  Bonds"),  limited to the  aggregate  principal
amount of $12,000,000; and

        WHEREAS,  all  things  necessary  to make  the  1990  Bonds  hereinafter
described, when duly executed and issued by the Company and authenticated by the
Trustee,  valid,  binding and legal obligations of the Company, and to make this
Tenth Supplemental  Indenture a valid and binding agreement  supplemental to the
Original Mortgage, have been done and performed; and

        WHEREAS,  the  execution  and  delivery  by the  Company  of this  Tenth
Supplemental  Indenture,  and the  terms  of the  1990  Bonds,  have  been  duly
authorized by the Board of Directors of the Company by  appropriate  resolutions
of said Board; and

        WHEREAS, it is provided in and by the Original Mortgage that the Company
will execute and deliver such  further  instruments  and do such further acts as
may be  necessary  or proper to carry out more  effectually  the purposes of the
Mortgage,  and to make  subject  to the lien  thereof  any  property  thereafter
acquired and intended to be subject to the lien thereof; and

        WHEREAS,  the Company has,  since the date of execution  and delivery of
the Original  Mortgage,  purchased and acquired the  properties  and  franchises
hereinafter  described  and  desires by this  Tenth  Supplemental  Indenture  to
specifically  convey to the Trustee such property and  franchises for the better
protection  and security of the bonds issued and to be issued under the Original
Mortgage, or any indenture supplemental thereto;

        NOW, THEREFORE,  THIS INDENTURE WITNESSETH that, in consideration of the
premises and of the  acceptance  or purchase of the 1990 Bonds by the holders or
registered  owners  thereof,  and of the sum of one dollar,  lawful money of the
United  States of America,  to the Company duly paid by the Trustee at or before
the execution  and delivery of this Tenth  Supplemental  Indenture,  the receipt
whereof is hereby acknowledged, the Company and the Trustee, respectively,  have
entered into, executed and delivered this Tenth Supplemental Indenture,  for the
uses and purposes hereinafter expressed, that is to say:

        SECTION 1. The Company has granted, bargained, sold, released, conveyed,
assigned, transferred,  mortgaged, pledged, set over and confirmed, and by these
presents does grant, bargain, sell, release, convey, assign, transfer, mortgage,
pledge,  set over and confirm (subject,  however,  to permitted  encumbrances as
defined in the Original  Mortgage),  unto said American  National Bank and Trust
Company of Chicago,  as Trustee,  as herein provided,  and its successors in the
trusts declared in the Original Mortgage and herein, all of the property,  real,
personal  and mixed,  tangible  and  intangible,  of every kind,  character  and
description  which the Company has acquired  since the execution and delivery of
the  Original  Mortgage and now owns  (except  property,  rights and assets of a
character  similar to the property  that is excluded from the lien and operation
of the  Mortgage  by  the  Granting  Clauses  of the  Original  Mortgage,  which
property,  rights and assets are  excluded  from the lien and  operation  of the
Mortgage only to the extent provided  therein),  including but without otherwise
limiting the generality of the foregoing, the following described properties all
located within the State of Indiana:

                                     PART I.

                     REAL PROPERTY IN THE COUNTY OF MARION.

        All the right, title and interest of the Company in and to the following
described  and numbered  parcels or tracts of land acquired by the Company after
May 1, 1940, the date of the Original Mortgage,  situate in the County of Marion
in the State of Indiana, and not described in any prior supplemental  indenture,
together with all buildings, structures, improvements,  machinery, and equipment
of every  description now or hereafter  affixed thereto or stationed  thereon or
appertaining thereto, to wit:

                                   PARCEL #212

        Lot numbered  twenty (20) in Murphy and Tinker's  Corrected  Addition to
the City of  Indianapolis,  the plat of which is  recorded  in Flat Book 3, page
126, in the office of the Recorder of Marion County, Indiana.

                                   PARCEL #213

        Lot Number Twenty-one (21) in Murphy and Tinker's  Corrected Addition to
the City of  Indianapolis,  the plat of which is  recorded  in Flat Book 8, page
126, in the office of the Recorder of Marion County, Indiana.

                                   PARCEL #214

        Lots 10, 11 and 12 in Temple C. Harrisons Subdivision of Lots 92, 93, 94
and 95 of  Albert  E.  and  Ingram  Fletchers  Oak  Hill  Suburb  to the City of
Indianapolis,  as  recorded  in Plat  Book 4,  page  146,  in the  office of the
Recorder of Marion County, Indiana.

                                   PARCEL #215

        Part of the  West  Half of the East  Half of the  Northwest  Quarter  of
Section 34, Township 16 North, Range 2 East, of the Second Principal Meridian in
Marion County, Indiana, more particularly described as follows, to wit:

        Beginning  in the North line of said  Quarter  Section,  at a point 81.6
feet East of the  Northwest  corner of said Half Half Quarter  Section;  running
thence East upon and along the North line of said Quarter Section,  81.6 feet to
a point;  thence South and parallel with the West line of said Half Half Quarter
Section,  890.98 feet to a point; thence West 81.6 feet to a point; thence North
and parallel  with said Half Half Quarter  Section,  390.49 feet to the place of
beginning, containing 0.73 acres, more or less.

                                   PARCEL #216

        Part of the southeast  quarter of Section 5, Township 16 north,  Range 3
east,  commencing at the southwest  corner of said quarter  section (said corner
being in the east line of the right of way of the C.C.C. & St. L. Railroad,  now
the New York Central Railroad), thence north along the west line of said quarter
1400 feet;  thence east  parallel  with the south line of said quarter 500 feet;
thence south  parallel with the west line of said quarter 1400 feet to the south
line of said quarter; thence west along said south line 500 feet to the place of
beginning, containing 16.1 acres, more or less.

                                   PARCEL #217

        Part of the southwest quarter of Section 13, Township 17 North,  Range 3
East,  commencing  at the  southwest  corner  of the  northeast  quarter  of the
northeast  quarter of said quarter section,  thence south parallel with the east
line of said  quarter  section  710.82 feet;  thence east and parallel  with the
north line of said  quarter  section  666 feet to the east line of said  quarter
section; thence north along the east line of said quarter section 710.82 feet to
the southeast corner of the northeast  quarter of the northeast  quarter of said
quarter  section;  thence  west  parallel  with the north  line of said  quarter
section 666 feet to the place of  beginning,  excepting  therefrom  the railroad
right  of way  along  the  entire  east  side  and  containing,  excluding  said
exception, 10.328 acres.

                                   PARCEL #218

        The northeast  quarter of the northeast quarter of the southwest quarter
of Section 13, Township 17 North,  Range 3 East of the Second Principal Meridian
in Marion County, Indiana,  containing 10 acres more or less. Subject,  however,
to any highways, railroad rights of way or any other legal rights of way.

                                   PARCEL #219

        Part of the east hail of the northwest quarter,  Section 34, Township 16
North, Range 2 East,  beginning at the northwest corner of said east half of the
northwest  quarter;  thence  south on the  west  line of said  east  half of the
northwest  quarter 390 feet; thence east 81.6 feet; thence north parallel to the
west line of said east half of the northwest  quarter  390.49 feet;  thence west
81.6 feet to the point of beginning.

                                   PARCEL #220

        80 feet by parallel lines off the east end of Lot 53 and 80 feet off the
east end of the south 10 feet of Lot 54,  all in Ruddel and  Vintons  Park Place
Addition to the City of  Indianapolis,  as recorded in Plat Book 4, page 190, in
the office of the Recorder of Marion County, Indiana.

                                  PARCEL #221

        80 feet by  parallel  lines  off the east end of Lot 104 in  Ruddel  and
Vintons  Park Place  Addition to the City of  Indianapolis,  as recorded in Plat
Book 4, page 190, in the office of the Recorder of Marion County, Indiana.

                                   PARCEL #222

        A part of the Southeast Quarter of Section 13, Township 17 North,  Range
3 East, Marion County, Indiana, more particularly described as follows, to-wit:

        Beginning  at a point on the North  line of the said  Southeast  Quarter
Section,  said  point  being  33.0 feet East of the  Northwest  corner  thereof;
running  thence East on and along the North line of the said  Southeast  Quarter
Section a distance of 363.45 feet to a point;  thence  deflecting  90 degrees 05
minutes to the right in a  southward  direction  a distance  of 375.73 feet to a
point, said point being in the center of a 100.0 foot electric easement;  thence
deflecting 89 degrees 21 minutes to the right in a westward direction and on the
center of said electric  easement and also the center of said easement  produced
westward a distance of 359.42  feet to a point;  said point being 33.0 feet East
of the West line of the said Southeast Quarter Section, said point also being on
the East right of way line of the Monon Railroad  Company;  running thence North
on and along  the East  right of way line of said  Monon  Railroad  Company  and
parallel to the West line of the said  Southeast  Quarter  Section a distance of
379.31 feet to the point or place of  beginning.  Containing in all 3.132 acres,
more or less.

        Also  beginning  at a point,  said point being  375.73 feet South of the
North line and  392.42  feet East of the West line of the  Southeast  Quarter of
said Section,  said point being in the center of a 100.0 feet electric easement;
running  thence West on and along the center of said  electric  easement and the
center of said easement  produced  westward a distance of 359.42 feet to a point
in the East  right of way line of the Monon  Railroad  Company,  said point also
being  33.0 feet East of the West line of the said  Southeast  Quarter  Section;
running thence South and parallel to the West line of the said Southeast Quarter
Section  and on the East  right of way line of said  Monon  Railroad  Company  a
distance of 50.0 feet to a point;  running  thence East on the South line of the
aforesaid  electric  easement  produced  westward  and on the South line of said
electric  easement a distance of 358.86 feet to a point;  thence  deflecting  89
degrees 21 minutes to the left in a northward  direction a distance of 50.0 feet
to the point or place of beginning. Containing in all 0.412 acres, more or less.

        Both of said tracts being  subject to the  restriction  that no electric
substation shall be erected thereon.

                                    PART II.

                         ELECTRIC DISTRIBUTING SYSTEMS.

        All electric  distributing  systems of the Company  acquired by it after
May 1, 1940, the date of the Original  Mortgage,  and located in the Counties of
Marion, Boone, Hamilton, Hancock, Hendricks,  Morgan, Shelby, and Johnson, State
of Indiana;  and any  additions to or extensions of any such plants and systems,
together with the buildings,  erections,  structures,  transmission lines, power
stations,   sub-stations,   engines,  boilers,   condensers,   pumps,  turbines,
machinery,  tools,  conduits,  manholes,  insulators,  dynamos,  motors,  lamps,
cables,  wires,  poles,  towers,  cross-arms,   piers,  abutments,   switchboard
equipment,  meters, appliances,  instruments,  apparatus,  appurtenances,  maps,
records, ledgers, contracts,  facilities and other property or equipment used or
provided for use in connection with the  construction,  maintenance,  repair and
operation   thereof;   together  also  with  all  of  the  rights,   privileges,
rights-of-way,  franchises, licenses, grants, liberties, immunities, ordinances,
permits  and   easements  of  the  Company  in  respect  of  the   construction,
maintenance, repair and operation of said plants and systems.

                                    PART III.

                    STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

        All the steam and hot water distributing systems acquired by the Company
after May 1, 1940, the date of the Original Mortgage, and located in the City of
Indianapolis,  Marion County, Indiana, and any additions to or extensions of any
such plants and systems;  together with the  buildings,  erections,  structures,
boilers, heaters, engines, tanks, pipe lines, mains, connections, service pipes,
meters, tools, instruments,  appliances,  apparatus,  facilities,  machinery and
other  property  and  equipment  used or provided  for use in the  construction,
maintenance,  repair and  operation  thereof;  and together also with all of the
rights,  privileges,  rights-of-way,  franchises,  licenses,  grants, liberties,
immunities,  ordinances,  permits and easements of the Company in respect of the
construction, maintenance, repair and operation of said plants and systems.

                                    PART IV.

                      INDETERMINATE PERMITS AND FRANCHISES.

        All indeterminate permits, franchises,  ordinances,  licenses, and other
authorizations by or from any state, county, municipality, or other governmental
authority,  acquired by the Company after May 1, 1940,  the date of the Original
Mortgage, including particularly,  but not limited to, any indeterminate permits
under the Public Service  Commission  Act of the State of Indiana,  and all Acts
amendatory thereof and supplemental  thereto,  and all right, title and interest
therein now owned by the Company, and all renewals, extensions and modifications
of said  indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations,  and  of  the  indeterminate  permits,  franchises,  ordinances,
licenses,  and  other  authorizations  referred  to in Part VII of the  Granting
Clauses of the Original Mortgage.

                                     PART V.

                                 OTHER PROPERTY.

        All other property,  whether real,  personal or mixed (except any in the
Mortgage expressly excepted), now owned by the Company and wheresoever situated,
including  (without in anywise  limiting or impairing by the  enumeration of the
same the  scope  and  intent  of the  foregoing  or of any  general  description
contained in the  Mortgage) all lands,  flowage  rights,  water rights,  flumes,
raceways,  dams,  rights-of-way  and roads;  all plants  for the  generation  of
electricity by water, steam and/or other power, power houses, telephone systems,
water  systems,  steam heat and power plants,  hot water  plants,  sub-stations,
transmission  lines,  distribution  systems,  bridges,  culverts and tracks; all
offices,  buildings and structures,  and the equipment  thereof;  all machinery,
engines,  boilers,  dynamos,   machines,   regulators,   meters,   transformers,
generators and motors;  all appliances  whether  electrical,  gas or mechanical,
conduits,  cables and lines; all pipes whether for water,  steam heat and power,
or other  purposes;  all mains and pipes,  service pipes,  fittings,  valves and
connections, poles, wires, tools, implements, apparatus, furniture and chattels;
all municipal  franchises,  indeterminate  permits, and other permits; all lines
for the  transportation,  transmission  and/or distribution of electric current,
steam heat and power or water for any purpose,  including towers,  poles, wires,
cables, pipes,  conduits and all apparatus for use in connection therewith;  all
real estate,  lands,  leases,  leaseholds;  all contracts,  whether heat, light,
power, water or street lighting contracts; all easements,  servitudes, licenses,
permits, rights, powers, franchises, privileges,  rights-of-way and other rights
in or  relating  to real  estate or the  occupancy  of the same and  (except  as
hereinafter  or in the Mortgage  expressly  excepted)  all the right,  title and
interest  of the  Company  in and to all  other  property  of any kind or nature
appertaining  to and/or used and/or  occupied  and/or enjoyed in connection with
any property hereinbefore described or referred to;

        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 Section 64 of the Original  Mortgage),  the
tolls, rents, revenues,  issues, earnings, income, products and profits thereof,
and all the estate,  right,  title and 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,  indeterminate permits and franchises and every part and
parcel thereof.

        SECTION 2. There shall be and is hereby created and established a series
of bonds,  limited in aggregate  principal  amount to $12,000,000,  to be issued
under and secured by the Mortgage, to be designated  "4 5/8% Series,  due 1990",
each of which shall also bear the descriptive  title "First Mortgage Bond"; said
bonds shall  mature on October 1, 1990,  and shall be issued as coupon  bonds in
the denomination of One thousand  dollars,  registrable as to principal,  and as
fully  registered bonds in denominations of One thousand dollars or any multiple
thereof;  they shall bear  interest  from October 1, 1960, in the case of coupon
bonds,  and from the beginning of the current  interest period during which each
fully  registered  bond is dated in the case of fully  registered  bonds, at the
rate per annum designated in the title thereof, payable semi-annually,  on April
1, and  October 1 of each year;  and the  principal  of,  premium,  if any,  and
interest on each said bond shall be payable in lawful money of the United States
of  America  at the  office  or agency of the  Company  in the City of  Chicago,
Illinois.

        American National Bank and Trust Company of Chicago is hereby designated
and  appointed  the  office  and agency of the  Company  for the  payment of the
principal  of,  premium,  if any, and interest on the 1990 Bonds;  all reference
herein to the office or agency of the Company  for the payment of the  principal
of,  premium,  if any,  and  interest  on the 1990 Bonds  being a  reference  to
American National Bank and Trust Company of Chicago. In event of the resignation
or inability to act of American National Bank and Trust Company of Chicago, then
a  successor  paying  agent or agents  in the City of  Chicago,  Illinois,  with
respect to the  principal of,  premium,  if any, and interest on the 1990 Bonds,
shall be appointed by the Board of Directors of the Company.

        1990  Bonds in  coupon  form  shall  be dated  October  1,  1960.  Fully
registered bonds of said series shall be dated as of the date of authentication,
except as otherwise provided in Section 10 of the Original Mortgage.

        Upon the notice and in the  manner and with the effect  provided  in the
Mortgage and in this Section 2, the 1990 Bonds shall be redeemable  prior to the
maturity  thereof,  as a whole at any time or in part from time to time,  at the
option of the Company,  at the principal  amount thereof and accrued interest to
the date of  redemption,  together  with a premium  equal to a percentage of the
principal  amount  thereof  set forth  under  the  heading  "Regular  Redemption
Premium" in the form of 1990 Bonds hereinafter  recited,  if redeemed  otherwise
than  through the  operation  of the Sinking Fund created for the benefit of the
1990 Bonds by Section 5 of this Tenth Supplemental  Indenture, or otherwise than
by the  application  of  monies  deposited  with the  Trustee  representing  the
proceeds of mortgaged and pledged property taken by the exercise of the power of
eminent  domain or  otherwise  as provided  in  paragraph B of Section 69 of the
Mortgage,  provided,  however,  that prior to October 1, 1965,  none of the 1990
Bonds may be  redeemed,  directly  or  indirectly,  from the  proceeds  of or in
anticipation  of any refunding  operation  involving the incurring of debt which
has an  interest  rate or cost  to the  Company,  computed  in  accordance  with
generally accepted financial  practice,  of less than the interest rate borne by
the 1990 Bonds.

        Upon the notice and in the  manner and with the effect  provided  in the
Mortgage  and in this  Section  2, the 1990  Bonds  shall be  redeemable  by the
Company  prior to the maturity  thereof,  as a whole at any time or in part from
time to time,  through the operation of the Sinking Fund created for the benefit
of the 1990 Bonds by Section 5 of this Tenth Supplemental  Indenture,  or out of
monies  deposited  with the Trustee  representing  the proceeds of mortgaged and
pledged  property  taken by the  exercise  of the  power of  eminent  domain  or
otherwise  as provided  in  paragraph  B of Section 69 of the  Mortgage,  at the
principal  amount of the 1990 Bonds so to be redeemed,  together  with a premium
equal to the  percentage  of such  principal  amount set forth under the heading
"Special Redemption Premium" in the form of 1990 Bonds hereinafter recited.

        The notice  required for the  redemption of the 1990 Bonds shall include
at least  thirty (80) days'  published  notice (such  publication  to be made at
least once in each of four (4) successive calendar weeks upon any secular day of
each such week, which need not be the same day in each week).

        At the  option  of the  holder,  any 1990  Bonds in  coupon  form,  upon
surrender  thereof with all unmatured coupons and any matured coupons in default
appertaining  thereto  at the  office or agency  of the  Company  in the City of
Chicago,  Illinois,  shall be exchangeable for a like aggregate principal amount
of fully registered bonds of the same series of authorized denominations. At the
option of the registered  holder, any fully registered 1990 Bond, upon surrender
thereof  at said  office  or  agency  of the  Company  together  with a  written
instrument  of transfer in form  approved  by the Company  duly  executed by the
registered holder or by his duly authorized attorney,  shall be exchangeable for
a like aggregate  principal amount of coupon bonds of the same series,  with all
unmatured  coupons and any matured  coupons in default  attached,  or for a like
aggregate principal amount of fully registered bonds of the same series of other
authorized denominations.

        The  holder  of any 1990  Bond in  coupon  form  nay have the  ownership
thereof  registered as to principal on the books of the Company at the office or
agency of the Company in the City of Chicago,  Illinois,  and such  registration
noted on such bond.  After such  registration  no transfer of such bond shall be
valid unless made at said office or agency by `the  registered  holder in person
or by his duly  authorized  attorney and similarly  noted on such bond;  but the
same may be discharged from registration by being in like manner  transferred to
bearer and thereupon  transferability  by delivery  shall be restored;  but such
bond may  again  from time to time be  registered  or  transferred  to bearer in
accordance  with the above  procedure.  Such  registration,  however,  shall not
affect the  negotiability  of the coupons  appertaining to such bonds, but every
such coupon  shall  continue  to be  transferable  by delivery  merely and shall
remain payable to bearer. Fully registered 1990 Bonds shall also be transferable
on the books of the  Company  at said  office or  agency of the  Company  by the
registered holder thereof,  in person or by his duly authorized  attorney,  upon
surrender for cancellation thereof.

        The issue of 1990  Bonds  shall be  limited  to an  aggregate  principal
amount of Twelve Million Dollars ($12,000,000) and shall be made on the basis of
property additions under the provisions of Article VI of the Original Mortgage.

        SECTION 3. Such  coupon 1990 Bonds,  coupons and fully  registered  1990
Bonds, and the Trustee's  certificate thereon,  shall be in the following forms,
respectively:
<PAGE>

                              [FORM OF COUPON BOND]

                       INDIANAPOLIS POWER & LIGHT COMPANY

                   First Mortgage Bond, 4 5/8% Series, due 1990

                               Due October 1, 1990
$1,000                                                            No. _________

        INDIANAPOLIS  POWER & LIGHT  COMPANY,  a  corporation  of the  State  of
Indiana (hereinafter called the Company), for value received, hereby promises to
pay to the  bearer,  or, if this bond be  registered,  to the  registered  owner
hereof,  One Thousand Dollars on October 1, 1990, at the office or agency of the
Company in the City of Chicago,  Illinois,  in lawful money of the United States
of America, and to pay interest thereon from the date hereof at the rate of Four
and  Five-Eighths  per centum per annum in like lawful money,  at said office or
agency on April 1 and  October 1 in each year,  until the  Company's  obligation
with respect to the payment of such principal  shall have been  discharged,  but
only, in the case of interest due on or before maturity,  according to the tenor
and upon  presentation  and surrender of the respective  coupons therefor hereto
attached, as they severally mature. This bond is one of an issue of bonds of the
Company,  issuable in series, and is one of a series known as its First Mortgage
Bonds of the series  designated  in its title,  limited in  aggregate  principal
amount to $12,000,000 and established by a Tenth Supplemental Indenture dated as
of October 1, 1960,  all bonds of all series  issued and to be issued  under and
equally  secured  (except  insofar as any sinking or other fund,  established in
accordance with the provisions of the Mortgage hereinafter mentioned, may afford
additional  security for the bonds of any  particular  series) by a Mortgage and
Deed of Trust,  dated as of May 1, 1940,  executed  by the  Company to  American
National Bank and Trust Company of Chicago,  as Trustee (which Mortgage and Deed
of Trust as supplemented by all supplemental  indentures is hereinafter referred
to as the "Mortgage"),  to which Mortgage reference is made for a description of
the property mortgaged and pledged,  the nature and extent of the security,  the
rights of the  bearers  or  registered  owners of the bonds in  respect  of such
security,  the duties and immunities of the Trustee and the terms and conditions
upon which the bonds are secured.

        With the consent of the Company  and to the extent  permitted  by and as
provided in the Mortgage,  the rights and  obligations  of the Company and/or of
the holders of the bonds and/or  coupons  and/or the terms and provisions of the
Mortgage  and/or of any  instruments  supplemental  thereto  may be  modified or
altered by affirmative  vote of the holders of at least sixty-six and two-thirds
per  centum  (66 2/3%) in  principal  amount  of the  bonds  affected,  by  such
modification or alteration then outstanding under the Mortgage  (excluding bonds
disqualified from voting by reason of the Company's interest therein as provided
in the Mortgage);  provided that no such modification or alteration shall permit
the  extension of the maturity of the principal of this bond or the reduction in
the rate of interest hereon or any other modification in the terms of payment of
such  principal  or  interest  without  the  consent of the holder  hereof.  The
principal  hereof may be  declared  or may become due and  payable  prior to the
stated date of maturity hereof, on the conditions, in the manner and at the time
set forth in the Mortgage,  upon the occurrence of a completed default as in the
Mortgage provided.

        This bond shall pass by delivery  unless  registered  as to principal in
the owner's  name at the office or agency of the Company in the City of Chicago,
Illinois,  and such  registration  noted hereon,  after which no valid  transfer
hereof can be made,  except at such  office or agency,  until  after  registered
transfer to bearer, but after such registered transfer to bearer this bond shall
be again transferable by delivery. Such registration,  however, shall not affect
the  negotiability  of the coupons,  which shall always remain payable to bearer
and transferable by delivery. The Company and the Trustee may deem and treat the
bearer of this bond if it be not registered as to principal, or, if this bond is
registered  as  herein  authorized,  the  person  in  whose  name  the  same  is
registered,  and the bearer of any coupon hereto  appertaining,  as the absolute
owner for the purpose' of receiving payment and for all other purposes.

        The 1990 Bonds are subject to redemption prior to the maturity  thereof,
as a whole  at any  time or in part  from  time to time,  at the  option  of the
Company,  at the  principal  amount of the 1990 Bonds to be redeemed and accrued
interest  to the  date  of  redemption,  together  with  a  premium  equal  to a
percentage  of the  principal  amount  thereof set forth below under the heading
"Regular Redemption Premium" if redeemed otherwise than through the operation of
the Sinking  Fund created for the benefit of the 1990 Bonds by Section 5 of said
Tenth  Supplemental  Indenture,  or otherwise than by the  application of monies
deposited  with the Trustee  representing  the proceeds of mortgaged and pledged
property  taken by the  exercise of the power of eminent  domain or otherwise as
provided in paragraph B of Section 69 of the Mortgage,  provided,  however, that
prior to October  1,1965,  none of the 1990 Bonds may be  redeemed,  directly or
indirectly,  from the proceeds of or in anticipation of any refunding  operation
involving  the  incurring  of debt  which  has an  interest  rate or cost to the
Company,  computed in accordance with generally accepted financial practice,  of
less than the interest rate borne by the 1990 Bonds.

        The 1990 Bonds are subject to redemption prior to the maturity  thereof,
as a whole at any time or in part from time to time,  through the  operation  of
the Sinking  Fund created for the benefit of the 1990 Bonds by Section 5 of said
Tenth  Supplemental  Indenture,  or out of  monies  deposited  with the  Trustee
representing  the  proceeds  of  mortgaged  and  pledged  property  taken by the
exercise of the power of eminent  domain or otherwise as provided in paragraph B
of Section 69 of the Mortgage,  at the principal  amount of the 1990 Bonds so to
be redeemed  and accrued  interest to the date of  redemption,  together  with a
premium equal to the percentage of such  principal  amount set forth below under
the heading "Special Redemption Premium":

             If Redeemed During the                    Regular         Special
              Twelve Months' Period                  Redemption      Redemption
            Ending With the Last Day                   Premium         Premium
               of September of the
                   Year Stated

    1961..........................................      5.85%           1.23%
    1962..........................................      5.65%           1.21%
    1963..........................................      5.45%           1.19%
    1964..........................................      5.25%           1.16%
    1965..........................................      5.04%           1.14%
    1966..........................................      4.84%           1.12%
    1967..........................................      4.64%           1.09%
    1968..........................................      4.44%           1.07%
    1969..........................................      4.24%           1.04%
    1970..........................................      4.04%           1.01%
    1971..........................................      3.83%           0.98%
    1972..........................................      3.63%           0.95%
    1973..........................................      3.43%           0.92%
    1974..........................................      3.23%           0.89%
    1975..........................................      3.03%           0.85%
    1976..........................................      2.83%           0.81%
    1977..........................................      2.63%           0.78%
    1978..........................................      2.42%           0.73%
    1979..........................................      2.22%           0.69%
    1980..........................................      2.02%           0.65%
    1981..........................................      1.82%           0.60%
    1982..........................................      1.62%           0.55%
    1983..........................................      1.42%           0.50%
    1984..........................................      1.21%           0.45%
    1985..........................................      1.01%           0.39%
    1986..........................................      0.81%           0.34%
    1987..........................................      0.61%           0.28%
    1988..........................................      0.41%           0.21%
    1989..........................................      0.21%           0.15%

and without premium in either case if redeemed after September 30, 1989.

        In the  manner  and  upon  payment  of  the  charges  prescribed  in the
Mortgage,  the 1990  Bonds in coupon  form,  upon,  surrender  thereof  with all
unmatured coupons and any matured coupons in default appertaining thereto at the
office  or  agency  of the  Company  in  the  City  of  Chicago,  Illinois,  are
exchangeable for a like aggregate  principal amount of fully registered bonds of
the same  series  of  authorized  denominations,  and in like  manner  any fully
registered  1990 Bonds,  upon surrender  thereof at said office or agency of the
Company,  together with a written instrument of transfer in form approved by the
Company  duly  executed  by the  registered  holder  or by his  duly  authorized
attorney, are exchangeable for a like aggregate principal amount of coupon bonds
of the same  series,  with all  unmatured  coupons  and any  matured  coupons in
default attached,  or for a like aggregate  principal amount of fully registered
bonds of the same series of other authorized denominations.

        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,  as such,  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, as such, being waived and released by the terms of the Mortgage.

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

        IN WITNESS WHEREOF,  Indianapolis  Power & Light Company has caused this
bond to be signed in its name by its President or one of its Vice-Presidents, by
his signature or a facsimile  thereof,  and a facsimile of its corporate seal to
be  imprinted  hereon,  attested  by its  Secretary  or  one  of  its  Assistant
Secretaries,  by his  signature or a facsimile  thereof,  and  interest  coupons
`bearing the facsimile signature of its Treasurer to be attached hereto.

     Dated, October 1, 1960.

                                            INDIANAPOLIS POWER & LIGHT COMPANY,

                                            By
                                              --------------------------------
                                                                     President

Attest:

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

                             [FORM OF APRIL COUPON]
$23.13                                                            No. _________

     This coupon  will not be payable if the bond  hereinafter  mentioned  shall
have  previously  become  payable or been  called for  previous  redemption  and
payment duly provided for.

     On April  1,  _________,  INDIANAPOLIS  POWER & LIGHT  COMPANY  will pay to
bearer  upon  surrender  of this  coupon at its  office or agency in the City of
Chicago, Illinois, the amount shown hereon, in lawful money of the United States
of America, being six months' interest then due on its

                        FIRST MORTGAGE BOND, 4 5/8% SERIES
                              DUE OCTOBER 1, 1990.

                                                -------------------------------
                                                                       Treasurer

                            [FORM OF OCTOBER COUPON]
$23.12                                                             No. _________

     This coupon  will not be payable if the bond  hereinafter  mentioned  shall
have  previously  become  payable or been  called for  previous  redemption  and
payment duly provided for.

     On October 1, ______, INDIANAPOLIS POWER & LIGHT COMPANY will pay to bearer
upon  surrender  of this  coupon at its office or agency in the City of Chicago,
Illinois,  the amount  shown  hereon,  in lawful  money of the United  States of
America, being six months' interest then due on its

                        FIRST MORTGAGE BOND, 4 5/8% SERIES
                              DUE OCTOBER 1, 1990.

                                                --------------------------------
                                                                       Treasurer

                         [FORM OF FULLY REGISTERED BOND]

                       INDIANAPOLIS POWER & LIGHT COMPANY

                   First Mortgage Bond, 4 5/8% Series, due 1990

                               Due October 1, 1990

$_________                                                         No. _________

     INDIANAPOLIS  POWER & LIGHT COMPANY,  a corporation of the State of Indiana
(hereinafter called the Company), for value received,  hereby promises to pay to
__________________________  or  registered  assigns,  on October 1, 1990, at the
office  or   agency  of  the   Company   in  the  City  of   Chicago,   Illinois
____________________  Dollars in lawful  money of the United  States of America,
and to pay to the registered owner hereof interest thereon from the first day of
April or the first day of October next  preceding  the date of this bond, at the
rate of Four and Five-Eighths per centum per annum in like lawful money, at said
office or agency on April 1 and  October  1 in each  year,  until the  Company's
obligation  with  respect  to the  payment  of such  principal  shall  have been
discharged.  This bond is one of an issue of bonds of the  Company,  issuable in
series,  and is one of a series known as its First  Mortgage Bonds of the series
designated in its title,  limited in aggregate  principal  amount to $12,000,000
and established by a Tenth  Supplemental  Indenture dated as of October 1, 1960,
all bonds of all  series  issued  and to be issued  under  and  equally  secured
(except insofar as any sinking or other fund, established in accordance with the
provisions of the Mortgage hereinafter mentioned, may afford additional security
for the bonds of any particular  series) by a Mortgage and Deed of Trust,  dated
as of May 1, 1940,  executed by the Company to American  National Bank and Trust
Company of Chicago, as Trustee (which Mortgage and Deed of Trust as supplemented
by all supplemental indentures is hereinafter referred to as the "Mortgage"), to
which Mortgage reference is made for a description of the property mortgaged and
pledged,  the nature and extent of the  security,  the rights of the  bearers or
registered  owners of the bonds in  respect  of such  security,  the  duties and
immunities of the Trustee and the terms and conditions  upon which the bonds are
secured.

     With the  consent  of the  Company  and to the extent  permitted  by and as
provided in the Mortgage,  the rights and  obligations  of the Company and/or of
the holders of the bonds and/or  coupons  and/or the terms and provisions of the
Mortgage  and/or of any  instruments  supplemental  thereto  may be  modified or
altered by affirmative  vote of the holders of at least sixty-six and two-thirds
per  centum  (66 2/3%) in  principal  amount  of  the  bonds  affected  by  such
modification or alteration then outstanding under the Mortgage  (excluding bonds
dis-qualified  from  voting  by  reason of the  Company's  interest  therein  as
provided in the  Mortgage);  provided  that no such  modification  or alteration
shall permit the  extension of the maturity of the principal of this bond or the
reduction in the rate of interest hereon or any other  modification in the terms
of payment of such  principal  or  interest  without  the  consent of the holder
hereof. The principal hereof may be declared or may become due and payable prior
to the stated date of maturity hereof,  on the conditions,  in the manner and at
the time set forth in the Mortgage,  upon the occurrence of a completed  default
as in the Mortgage provided.

     This bond 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 City of  Chicago,  Illinois,  upon  surrender  and
cancellation  of this  bond and upon  presentation  of a written  instrument  of
transfer,  duly executed,  and upon payment, if the Company shall require it, of
the transfer charges  prescribed in the Mortgage,  and,  thereupon,  a new fully
registered bond of the same series for a like principal amount will be issued to
the transferee in exchange herefor as provided in the Mortgage.  The Company and
the Trustee may deem and treat the person in whose name this bond is  registered
as the absolute  owner  hereof for the purpose of receiving  payment and for all
other purposes.

     The 1990 Bonds are subject to redemption prior to the maturity thereof,  as
a whole at any time or in part from time to time,  at the option of the Company,
at the principal amount of the 1990 Bonds to be redeemed and accrued interest to
the date of  redemption,  together  with a premium  equal to a percentage of the
principal amount thereof set forth below under the heading  "Regular  Redemption
Premium" if redeemed  otherwise  than through the  operation of the Sinking Fund
created  for  the  benefit  of  the  1990  Bonds  by  Section  5 of  said  Tenth
Supplemental Indenture, or otherwise than by the application of monies deposited
with the Trustee  representing  the proceeds of mortgaged  and pledged  property
taken by the exercise of the power of eminent domain or otherwise as provided in
paragraph  B of Section 69 of the  Mortgage,  provided,  however,  that prior to
October 1, 1965, none of the 1990 Bonds may be redeemed, directly or indirectly,
from the proceeds of or in anticipation of any refunding operation involving the
incurring of debt which has an interest rate or cost to the Company, computed in
accordance with generally accepted financial practice, of less than the interest
rate borne by the 1990 Bonds.

     The 1990 Bonds are subject to redemption prior to the maturity thereof,  as
a whole at any time or in part from time to time,  through the  operation of the
Sinking  Fund  created  for the  benefit  of the 1990 Bonds by Section 5 of said
Tenth  Supplemental  Indenture,  or out of  monies  deposited  with the  Trustee
representing  the  proceeds  of  mortgaged  and  pledged  property  taken by the
exercise of the power of eminent  domain or otherwise as provided in paragraph B
of Section 69 of the Mortgage,  at the principal  amount of the 1990 Bonds so to
be redeemed  and accrued  interest to the date of  redemption,  together  with a
premium equal to the percentage of such  principal  amount set forth below under
the heading "Special Redemption Premium":

             If Redeemed During the                    Regular         Special
              Twelve Months' Period                  Redemption      Redemption
            Ending With the Last Day                   Premium         Premium
               of September of the
                   Year Stated
    1961.........................................       5.85%           1.23%
    1962.........................................       5.65%           1.21%
    1963.........................................       5.45%           1.19%
    1964.........................................       5.25%           1.16%
    1965.........................................       5.04%           1.14%
    1966.........................................       4.84%           1.12%
    1967.........................................       4.64%           1.09%
    1968.........................................       4.44%           1.07%
    1969.........................................       4.24%           1.04%
    1970.........................................       4.04%           1.01%
    1971.........................................       3.83%           0.98%
    1972 ........................................       3.63%           0.95%
    1973.........................................       3.43%           0.92%
    1974.........................................       3.23%           0.89%
    1975.........................................       3.03%           0.85%
    1976.........................................       2.83%           0.81%
    1977.........................................       2.63%           0.78%
    1978.........................................       2.42%           0.73%
    1979.........................................       2.22%           0.69%
    1980.........................................       2.02%           0.65%
    1981.........................................       1.82%           0.60%
    1982.........................................       1.62%           0.55%
    1983.........................................       1.42%           0.50%
    1984.........................................       1.21%           0.45%
    1985.........................................       1.01%           0.39%
    1986.........................................       0.81%           0.34%
    1987.........................................       0.61%           0.28%
    1988.........................................       0.41%           0.21%
    1989.........................................       0.21%           0.15%

and without premium in either case if redeemed after September 30, 1989.

     In the manner and upon payment of the charges  prescribed  in the Mortgage,
the 1990 Bonds in coupon form, upon surrender thereof with all unmatured coupons
and any matured coupons in default  appertaining thereto at the office or agency
of the Company in the City of Chicago,  Illinois,  are  exchangeable  for a like
aggregate  principal  amount  of fully  registered  bonds of the same  series of
authorized  denominations,  and in like manner any fully  registered 1990 Bonds,
upon surrender thereof at said office or agency of the Company,  together with a
written  instrument of transfer in form approved by the Company duly executed by
the registered holder or by his duly authorized attorney, are exchangeable for a
like  aggregate  principal  amount of coupon bonds of the same series,  with all
unmatured  coupons and any matured  coupons in default  attached,  or for a like
aggregate principal amount of fully registered bonds of the same series of other
authorized denominations.

     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,  as such,  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, as such, being waived and released by the terms of the Mortgage.

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

     IN WITNESS WHEREOF, Indianapolis Power & Light Company has caused this bond
to be signed in its name by its President or one of its Vice-Presidents,  by his
signature or a facsimile  thereof,  and a facsimile of its corporate  seal to be
imprinted hereon, attested by its Secretary or one of its Assistant Secretaries,
by his signature or a facsimile thereof.

     Dated, ___________________

                                             INDIANAPOLIS POWER & LIGHT COMPANY,

                                             By
                                               ---------------------------------
                                                                       President

Attest:

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

                  [FORM OF TRUSTEE'S CERTIFICATE ON ALL BONDS]

                              Trustee's Certificate

     This bond is one of the bonds,  of the series herein  designated,  provided
for in the within-mentioned Mortgage and Tenth Supplemental Indenture.

                                            AMERICAN NATIONAL BANK AND TRUST
                                              COMPANY OF CHICAGO,
                                                                       Trustee,

                                            By
                                              ----------------------------------
                                                              Authorized Officer

     SECTION 4. Until the 1990 Bonds in definitive  form are ready for delivery,
the Company  may  execute,  and upon its  request in writing  the Trustee  shall
authenticate  and deliver,  in lieu  thereof,  1990 Bonds in temporary  form, as
provided  in  Section  15 of  the  Original  Mortgage,  with  the  privilege  of
registration  as to principal only, and with coupons No. 1 and No. 2 maturing on
April 1, 1961, and October 1, 1961, respectively. Such bonds may, in lieu of the
statement of the  specific  redemption  prices  required to be set forth in such
Bonds in  definitive  form,  include  a  reference  to this  Tenth  Supplemental
Indenture for a statement of such redemption prices.

     SECTION 5. The  Company  covenants  that,  so long as any of the 1990 Bonds
shall remain outstanding, it will, on or before the first day of October of each
year beginning with the year 1965, deliver to the Trustee,  as and for a Sinking
Fund for the benefit of the holders or the registered  owners of 1990 Bonds,  an
amount in cash  and/or  principal  amount of 1990  Bonds  equivalent  to one per
centum (1%) of the greatest  principal  amount of 1990 Bonds  theretofore at any
one time outstanding.

     All  cash  deposited  by the  Company  with  the  Trustee  pursuant  to the
provisions of this Section shall be applied by the Trustee from time to time and
as rapidly as may be practicable to the purchase of 1990 Bonds then outstanding,
at public or  private  sale at the  lowest  prices  at which  such  bonds can be
obtained,  not exceeding,  however,  the principal amount thereof,  plus accrued
interest thereon to the date of purchase,  together with the special  redemption
premium  set forth in the form of 1990 Bonds  recited in Section 3 of this Tenth
Supplemental  Indenture,  or, if the Company shall so request, the Trustee shall
apply any cash then held by it under  this  Section  to the  redemption  of 1990
Bonds as soon as may be practicable  after such request.  In case the balance of
such cash  remaining  with the Trustee on the  twentieth  day of February of any
year beginning with the year 1966 shall  aggregate  $25,000 or more, the Trustee
shall  apply the same to the  redemption  of 1990  Bonds on the next  succeeding
first  day of  April,  in which  case the  Trustee  shall  give  notice  of such
redemption in the name of the Company in the manner and in  accordance  with the
applicable  provisions of Article XII of the Original  Mortgage and Section 2 of
this Tenth Supplemental Indenture; and the Trustee is hereby appointed the agent
of the Company  for such  purpose.  The  Company  covenants  that  whenever  any
redemption of 1990 Bonds shall be required under the provisions of this Section,
it will at the request of the Trustee take all action  necessary,  and authorize
the Trustee to take all action necessary, to redeem such bonds.

     The 1990 Bonds shall be subject to redemption through the operation of such
Sinking Fund at the  principal  amount  thereof,  plus  accrued  interest to the
redemption date,  together with the aforesaid special  redemption  premium.  The
Company  shall have the right to tender 1990 Bonds for sale by it to the Trustee
under the provisions of this Section.

     The Company shall pay to the Trustee,  on demand, the amount of accrued and
unpaid interest upon all bonds purchased or redeemed pursuant to this Section.

     Any bonds  deposited,  purchased or redeemed  pursuant to the provisions of
this Section,  shall forthwith be cancelled by the Trustee, and upon the request
of the  Company,  the  Trustee may cremate the same and deliver to the Company a
certificate of such cremation.

     The  Company  covenants  that it will not use any bonds  heretofore  issued
under the  Mortgage  (including  any of the 1990  Bonds)  which  may be  retired
pursuant to the respective  sinking funds provided for the bonds now outstanding
or the 1990 Bonds,  as the basis for the  authentication  and  delivery of bonds
pursuant  to Article  VII of the  Mortgage,  or as credit  pursuant to any other
provision of the Mortgage.

     SECTION 6. The  Company  covenants  that,  so long as any of the 1990 Bonds
shall  remain  outstanding,  it will  continue to make to the Trustee the annual
payments for a Maintenance  and  Improvement  Fund required by Section 41 of the
Original Mortgage and will comply with the provisions of said Section 41.

     SECTION 7. The  Company  covenants  that,  so long as any of the 1990 Bonds
shall remain  outstanding,  it will comply with all of the provisions of Section
47  of  the  Original  Mortgage,   including  the  provisions  with  respect  to
limitations  on dividends and  distributions  and the purchase and redemption of
stock.

     SECTION 8. In the event the Company  elects to redeem any of the 1990 Bonds
prior to October 1, 1965,  the  Company  shall,  prior  thereto,  furnish to the
Trustee a  Treasurer's  Certificate  stating that such  redemption  is not being
made,  directly or indirectly,  from the proceeds of or in  anticipation  of any
refunding  operation  involving the incurring of debt which has an interest rate
or cost to the Company, computed in accordance with generally accepted financial
practice,  of less than the interest  rate borne by the 1990 Bonds and that said
refunding  operation  is in full  compliance  with the terms and  conditions  of
Section 2 of this Tenth Supplemental Indenture.

     SECTION  9.  Section  14 of the  Original  Mortgage  is hereby  amended  by
amending the first sentence thereof to read as follows:

          All bonds issued  hereunder  shall,  from time to time, be executed on
     behalf of the Company by its President or one of its Vice-Presidents, whose
     signature, except on bonds of the 3% Series, due 1970, 3% Series, due 1974,
     277/8% Series,  due 1979, 277/8% Series,  due 1981, 35/8% Series, due 1983,
     35/8% Series,  due 1986 and 41/8% Series,  due 1988, may be a facsimile and
     its  corporate  seal shall be thereunto  affixed or  imprinted  thereon and
     attested  by its  Secretary  or one of  its  Assistant  Secretaries,  whose
     attestation,  except  on bonds of the  series  enumerated  above,  may be a
     facsimile.

and by amending the next to the last sentence thereof to read as follows:

          In case  any of the  officers  who  shall  have  signed  any  bonds or
     attested the seal thereon or whose facsimile signature appears on any bonds
     or coupons shall cease to be such officers of the Company  before the bonds
     so  signed  and/or  sealed  shall  have  been  actually  authenticated  and
     delivered by the Trustee or issued by the Company,  such bonds nevertheless
     may be  authenticated,  delivered  and/or  issued  with the same  force and
     effect as though the person or persons  who signed  such bonds or  attested
     the seal  thereon  or whose  facsimile  signature  appears  on any bonds or
     coupons had not ceased to be such officer or officers of the Company.

     SECTION 10. The Trustee hereby accepts the trusts herein declared, provided
and created and agrees to perform the same upon the terms and conditions  herein
and in the Mortgage set forth and upon the following terms and  conditions:

     The  recitals  contained  herein  and in the  bonds  shall  be taken as the
statements  of the  Company and the Trustee  assumes no  responsibility  for the
correctness of the same. The Trustee makes no  representations as to validity or
adequacy of the security  afforded  hereby,  or as to the validity of this Tenth
Supplemental Indenture or of the bonds or coupons issued hereunder.

     SECTION 11.  Whenever in this Tenth  Supplemental  Indenture  either of the
parties hereto is named or referred to, this shall, subject to the provisions of
Article XVII of the Original  Mortgage,  be deemed to include the  successors or
assigns  of such  party,  and all the  covenants  and  agreements  in this Tenth
Supplemental  Indenture  contained by or on behalf of the  Company,  or by or on
behalf  of the  Trustee,  shall,  subject  as  aforesaid,  bind and inure to the
benefit of the  respective  successors  and assigns of such parties,  whether so
expressed or not.

     SECTION 12.  Nothing in this Tenth  Supplemental  Indenture,  expressed  or
implied,  is  intended or shall be  construed  to confer upon or to give to, any
person,  co-partnership  or  corporation,  other than the parties hereto and the
holders of the bonds and  coupons  outstanding  under the  Mortgage,  any right,
remedy, or claim under or by reason of this Tenth Supplemental  Indenture or any
covenant, condition or stipulation hereof; and all the covenants,  stipulations,
promises and agreements in this Tenth Supplemental  Indenture contained by or on
behalf of the Company shall be for the sole and exclusive benefit of the parties
hereto and of the holders of the bonds and of the coupons  outstanding under the
Mortgage.

     SECTION 13. The Company  covenants  that all of the terms,  provisions  and
conditions  of the  Mortgage  shall  be  applicable  to the  1990  Bonds  issued
hereunder,  except as herein  otherwise  provided and except insofar as the same
may be inconsistent with the provisions of this Tenth Supplemental Indenture.

     SECTION 14.  This Tenth  Supplemental  Indenture  is dated as of October 1,
1960,  although executed and delivered on the date of the acknowledgment  hereof
by the Trustee;  and shall be simultaneously  executed in several  counterparts,
and all such  counterparts  executed and delivered,  each as an original,  shall
constitute but one and the same instrument.

     IN WITNESS WHEREOF,  INDIANAPOLIS POWER & LIGHT COMPANY, party of the first
part, has caused its corporate name to be hereunto  affixed and this  instrument
to be signed and  acknowledged  by its  President or a  Vice-President,  and its
corporate  seal  to be  hereto  affixed  and  attested  by its  Secretary  or an
Assistant Secretary, for and in its behalf, and AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO,  party of the second part,  has caused its corporate name to
be hereunto  affixed and this instrument to be signed and acknowledged by one of
its Vice-Presidents, and its corporate seal to be hereto affixed and attested by
its Assistant Secretary, all as of the day, month and year first above written.

                                 INDIANAPOLIS POWER & LIGHT COMPANY,

[SEAL]

Attest:
                                              By  /s/O.T. Fitzwater
                                            O.T. Fitzwater, President
    Ralph W. Husted, Secretary

                                              AMERICAN NATIONAL BANK AND TRUST
                                                  COMPANY OF CHICAGO,

[SEAL]

Attest:
                                              By  /s/E. L. Andrews
                                            E. L. Andrews, Vice-President

        /s/A. H. Morstadt
A. H. Morstadt, Assistant Secretary

<PAGE>

STATE OF INDIANA  )
                  )  SS.:
COUNTY OF MARION  )

     On this 28th day of September, in the year 1960, before me, a Notary Public
in and for the  County and State  aforesaid,  personally  came O. T.  Fitzwater,
President,  and  Ralph  W.  Husted,  Secretary,  of  Indianapolis  Power & Light
Company,  one of the corporations  described in and which executed the foregoing
instrument,  to me  personally  known  and  known  to me  personally  to be such
President and Secretary,  respectively. Said O. T. Fitzwater and Ralph W. Husted
being  by me  severally  duly  sworn  did  depose  and say  that  the said O. T.
Fitzwater resides in the City of Indianapolis,  Marion County, Indiana, and that
the said Ralph W. Husted  resides in the City of  Indianapolis,  Marion  County,
Indiana;  that said O. T.  Fitzwater  is  President  and said Ralph W. Husted is
Secretary of said  Indianapolis  Power & Light Company;  that each of them knows
the corporate seal of said corporation; that the seal affixed to said instrument
and bearing the name of said  corporation is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation; and that each of
them signed his name thereto by like order;  and each of them  acknowledged  the
execution of said  instrument on behalf of said  corporation  to be his free and
voluntary  act and  deed  and  the  free  and  voluntary  act  and  deed of said
corporation, for the uses and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 28th day of September, 1960.

                                                  /s/Margaret M. Miller
                                              Margaret M. Miller, Notary Public
                                                      (Notarial Seal)

My Commission Expires
   July 29, 1961

<PAGE>

STATE OF ILLINOIS )
                  ) SS.:
COUNTY OF COOK    )

     On this  28th day of  September,  in the  year  1960,  before  me, a Notary
Public.  in and  for the  County  and  State  aforesaid,  personally  came E. L.
Andrews,  Vice-President,  and A. H. Morstadt,  Assistant Secretary, of American
National Bank and Trust Company of Chicago, one of the corporations described in
and which executed the foregoing instrument, to me personally known and known to
me personally to be such Vice-President and Assistant  Secretary,  respectively.
Said E. L.  Andrews and A. H.  Morstadt,  being by me  severally  duly sworn did
depose and say that the said E. L. Andrews  resides in Highland  Park,  State of
Illinois,  and  that the  said A. H.  Morstadt  resides  in  Elmhurst,  State of
Illinois;  that said E. L. Andrews is Vice-President  and said A. H. Morstadt is
Assistant Secretary of said American National Bank and Trust Company of Chicago;
that each of them knows the corporate  seal of said  corporation;  that the seal
affixed to said  instrument  and  bearing the name of said  corporation  is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said  corporation;  and  that  each of them  signed  his  name  thereto  by like
authority;  and each of them  acknowledged  the execution of said  instrument on
behalf of said  corporation  to be his free and  voluntary  act and deed and the
free and voluntary act and deed of said  corporation,  for the uses and purposes
therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 28th day of September, 1960.

                                                 /s/Ruth J. Baumgartner
                                              Ruth J. Baumgartner, Notary Public
                                                         (Notarial Seal)
My Commission Expires:
  December 5, 1961

                          This instrument was prepared
                               by Ralph W. Husted

<PAGE>
<TABLE>
<CAPTION>

                                                            RECORDING DATA

                                       TENTH SUPPLEMENTAL INDENTURE DATED AS OF OCTOBER 1, 1960

                County                Instrument                     Record              Page     Instru-          Recording
                                                                                                  ment No.           Date
<S>                            <C>                       <C>                      <C>       <C>       <C>     <C>
         Marion                Real Estate Mortgage      Mortgage Record          2059      378       71894   September 28, 1960
                               Chattel Mortgage          Chattel Minute Record     236      149       71895   September 28, 1960
         Boone                 Real Estate Mortgage      Mortgage Record           136      487        4544   September 29, 1960
                               Chattel Mortgage          Chattel Minute Record      24      194        4545   September 29, 1960
         Gibson                Real Estate Mortgage      Mortgage Record           185       94        8035   September 29, 1960
                               Chattel Mortgage          Chattel Minute Record      17      196        8036   September 29, 1960
         Hamilton              Real Estate Mortgage      Mortgage Record           146      205        1359   September 29, 1960
                               Chattel Mortgage          Chattel Minute Record      M9      234        1360   September 29, 1960
         Hancock               Real Estate Mortgage      Mortgage Record           104      513        4191   September 29, 1960
                               Chattel Mortgage          Chattel Minute Record      19      197        4192   September 29, 1960
         Hendricks             Real Estate Mortgage      Mortgage Record           153      438        7680   September 29, 1960
                               Chattel Mortgage          Chattel Minute Record      16      193        7681   September 29, 1960
         Johnson               Real Estate Mortgage      Mortgage Record           147      441       08206   September 29, 1960
                               Chattel Mortgage          Chattel Minute Record      23       37       08207   September 29, 1960
         Morgan                Real Estate Mortgage      Mortgage Record           142       75       24360   September 29, 1960
                               Chattel Mortgage          Chattel Minute Record      42       94       24359   September 29, 1960
         Pike                  Real Estate Mortgage      Mortgage Record            37      313        2482   September 29, 1960
                               Chattel Mortgage          Chattel Minute Record       7      130        2483   September 29, 1960
         Shelby                Real Estate Mortgage      Mortgage Record           179       13        3941   September 29, 1960
                               Chattel Mortgage          Chattel Minute Record      18      162        3942   September 29, 1960
         Sullivan              Real Estate Mortgage      Mortgage Record           161      407       33685   September 29, 1960
                               Chattel Mortgage          Chattel Minute Record      17       66       33686   September 29, 1960
</TABLE>

<PAGE>

                                                                   Exhibit 4.4.3

                                                                [CONFORMED COPY]
================================================================================

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                       to

                        AMERICAN NATIONAL BANK AND TRUST
                               COMPANY OF CHICAGO

                                                 TRUSTEE

                              ____________________

                        Eighteenth Supplemental Indenture

                              ____________________

                          Dated as of February 15, 1974

                              ____________________

                   MODIFICATIONS OF MORTGAGE AND DEED OF TRUST
                    DATED AS OF MAY 1, 1940, AS SUPPLEMENTED

================================================================================
<PAGE>
                               TABLE OF CONTENTS*
                                       of
                        EIGHTEENTH SUPPLEMENTAL INDENTURE
                                       of
                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                            Page

PARTIES.....................................................................  1

RECITALS....................................................................  1

SEC. 1   Modification of Section 4(I) of Original Mortgage..................  3

SEC. 2   Modification of Section 6 of Original Mortgage.....................  3

SEC. 3   Modification of Section 80(7) (h) of Original Mortgage.............  3

SEC. 4   Modification of Section 39 of Original Mortgage....................  4

SEC. 5   Eighteenth Supplemental Indenture executed to embody
            modifications of Mortgage and Deed of Trust
            dated as of May 1, 1940.........................................  5

SEC. 6   Trustee assent under Section 125 of Original Mortgage..............  5

SEC. 7   Successors and assigns.............................................  5

SEC. 8   Limitation of rights hereunder.....................................  5

SEC. 9   Execution in counterparts..........................................  6

TESTIMONIUM.................................................................  6

SIGNATURES AND SEALS........................................................  6

ACKNOWLEDGMENTS.............................................................  8

-----------------------
*    Table of Contents is not part of the Eighteenth  Supplemental Indenture and
     should not be considered  as such. It is included  herein only for purposes
     of convenient reference.
<PAGE>

     THIS  EIGHTEENTH  SUPPLEMENTAL  INDENTURE,  dated as of February  15, 1974,
between  INDIANAPOLIS  POWER & LIGHT  COMPANY,  a  corporation  of the  State of
Indiana, hereinafter sometimes called the "Company", party of the first part and
AMERICAN  NATIONAL  BANK AND  TRUST  COMPANY  OF  CHICAGO,  a  national  banking
association,  as Trustee,  hereinafter sometimes called the "Trustee",  party of
the second part;

     WHEREAS, the Company by a Mortgage and Deed of Trust (hereinafter sometimes
called the  "Original  Mortgage"  when  referred  to as  existing  prior to any
supplement  thereto,  and the "Mortgage" when referred to as now or heretofore
supplemented)  dated as of May 1, 1940, made to said American  National Bank and
Trust Company of Chicago,  as Trustee, to secure the payment of the bonds issued
from time to time under the  Mortgage  for the  purposes  of and  subject to the
limitations  specified in the  Mortgage,  and to secure the  performance  of the
covenants  therein  contained,  conveyed to the Trustee  thereunder upon certain
trusts,  terms and  conditions,  and with and  subject to certain  provisos  and
covenants  therein  contained,  all  and  singular  the  property,   rights  and
franchises which the Company then owned or should thereafter acquire,  excepting
the property  expressly  excepted by the terms of the  Original  Mortgage or any
indenture  supplemental  thereto, to which Mortgage reference is hereby made for
greater certainty; and

     WHEREAS,  the  Original  Mortgage  has been  supplemented  by  supplemental
indentures dated as of May 1, 1942, as of February 1, 1948, as of April 1, 1949,
as of October 1, 1949,  as of February 1, 1951,  as of March 1, 1953, as of June
1, 1956, as of March 1, 1958, as of October 1, 1960, as of August 1, 1964, as of
April 1, 1966,  as of May 1, 1967,  as of May 1, 1968, as of October 1, 1970, as
of March 1, 1972, and as of March 15, 1973; and

     WHEREAS,  modifications  of the Original  Mortgage as hereinafter set forth
were made at an  adjourned  meeting of  bondholders  duly  convened  and held on
November  30,  1973,  in  accordance  with the  provisions  of Article XX of the
Original  Mortgage,  by resolutions duly adopted by the affirmative votes of the
holders of more than sixty-six and two-thirds per centum  (66-2/3%) in principal
amount of the bonds entitled to vote at such meeting then outstanding  under the
Mortgage,  and approved by  resolutions of the Board of Directors of the Company
duly adopted at a meeting thereof duly convened and held on December 14, 1973, a
copy of  which  resolutions  of  approval,  certified  by the  Secretary  of the
Company,  was filed by the Company with the Trustee on December  17,  1973,  and
became binding upon. the Company,  the Trustee, and the holders of all bonds and
coupons issued under the Mortgage, on February 15, 1974; and

     WHEREAS, Section 126 of Article XX of the Original Mortgage provides, among
other things,  that instruments  supplemental to the Original Mortgage embodying
any modification of the Original  Mortgage made at any bondholders'  meeting and
approved by resolution of the Board of Directors of the Company, may be executed
by the Trustee and the Company; and

     WHEREAS,  all things  necessary to make the  modifications  of the Original
Mortgage  hereinafter  set forth  binding upon the Company,  the Trustee and the
holders of all bonds and coupons  issued  under the  Mortgage,  and to make this
Eighteenth  Supplemental Indenture a valid mid binding agreement supplemental to
the Original  Mortgage,  have been done and  performed,  and the  execution  and
delivery  hereof,  in the form and terms hereof,  have been in all respects duly
authorized;

     NOW, THEREFORE,  THIS EIGHTEENTH SUPPLEMENTAL INDENTURE WITNESSETH that, in
consideration  of the premises and of the sum of one dollar  lawful money of the
United  States of America to the  Company  duly paid by the Trustee at or before
the  execution  and  delivery of this  Eighteenth  Supplemental  Indenture,  the
receipt   whereof  is  hereby   acknowledged,   the  Company  and  the  Trustee,
respectively,   have  entered  into,  executed  and  delivered  this  Eighteenth
Supplemental Indenture for the uses and purposes hereinafter expressed,  that is
to say:

     SECTION 1. Section 4(I) of the Original  Mortgage has been modified so that
the first sentence thereof now reads as follows:

          "SECTION  4. (I) The term  `property  additions'  shall  mean  plants,
          lines,  pipes,  mains,  cables,  machinery,  transmission  lines, pipe
          lines,  distribution  systems,  service  systems  and supply  systems,
          property, real or personal, and improvements, extensions or additions,
          located within the State of Indiana,  or located in any other State if
          such property is physically connected with any property of the Company
          located  in  Indiana  by or through  other  property  of the  Company,
          acquired by purchase, consolidation,  merger, donation or in any other
          way  whatsoever,  subsequent to April 30, 1940, or made or constructed
          subsequent  to April 30, 1940,  or in the process of  construction  or
          erection in so far as actually  constructed  or erected  subsequent to
          April 30,  1940,  and used or useful or to be used in the  business of
          generating, manufacturing, transporting, transmitting, distributing or
          supplying  electricity for light,  heat,  power or other purposes,  or
          steam  for  power,   heat  or  other  purposes,   including,   without
          limitation, nuclear fuel assemblies,  components and materials used in
          the generation of electricity."

     SECTION 2. Section 6 of the Original Mortgage has been modified by striking
out the word "or" at the end of subdivision  (f);  by  substituting a semi-colon
for the period at the end of subdivision (g), and adding the word "or" after the
semi-colon,  and by adding  immediately  after subdivision (g) the following new
subdivision (h) as follows:

          "(h) waivers of the right to partition property held by the Company as
     a tenant in common with another or others."

     SECTION  3.  Section  30 of the  Original  Mortgage  has been  modified  by
amending  clause (h) of subdivision (7) thereof so that said clause now reads as
follows:

          "(h)  that the  Company  has  corporate  authority  and all  necessary
     permission from governmental  authorities to own the property  additions in
     respect of which such application is made;"

     SECTION 4.  Section 39 of the Original  Mortgage has been  modified so that
said Section now reads as follows:

          "SECTION  39.  That it will pay all  taxes  and  assessments  lawfully
          levied or assessed upon the mortgaged  and pledged  property,  or upon
          any part thereof or upon any income  therefrom or upon the interest of
          the Trustee in the mortgaged  and.  pledged  property  before the same
          shall  become  delinquent,  and will duly  observe  and conform to all
          valid  requirements of any governmental  authority  relative to any of
          the  mortgaged  and pledged  property,  and all  covenants,  terms and
          conditions  upon or  under  which  any of the  mortgaged  and  pledged
          property  is held;  that it will not suffer  any lien to be  hereafter
          created upon the mortgaged and pledged property,  or any part thereof,
          or the income  therefrom,  prior to the lien of these presents,  other
          than  excepted  encumbrances,  and, in the case of property  hereafter
          acquired,  vendors'  liens,  purchase  money  mortgages  and any  lien
          thereon at the time of the acquisition  thereof,  and that within four
          months after the  accruing of any lawful  claims or demands for labor,
          materials,  supplies or other objects, which if unpaid might by law be
          given  precedence  over the lien of this Indenture as a lien or charge
          upon any of the mortgaged and pledged  property or the income thereof,
          it will pay or cause to be discharged  or make  adequate  provision to
          satisfy and discharge  the same;  provided,  however,  that nothing in
          this Section contained shall require the Company to observe or conform
          (1) to any  requirement  of  governmental  authority or to cause to be
          paid or discharged, or to make provision for, any such lien or charge,
          or to pay any such tax,  assessment or governmental  charge so long as
          the  validity  thereof  shall  be  contested  in  good  faith  and  by
          appropriate  legal  proceedings,  or (2) to  observe or conform to any
          requirement of governmental authority arising under any federal, state
          or local  environmental  law or  regulation  if the Company is in good
          faith doing all things  technologically and economically  feasible and
          prudent on its part to observe or conform to such requirement,  and if
          the  Company  shall  have  filed an  engineer's  certificate  with the
          Trustee to such effect  specifying such requirement and the good faith
          efforts  it is making  to comply  therewith;  and  provided  that such
          security for the payment of such lien, charge or tax shall be given as
          the Trustee may  require;  and that,  save as  aforesaid,  it will not
          suffer any matter or thing  whereby the lien hereof  might or could be
          impaired."

     SECTION 5. This Eighteenth Supplemental Indenture is executed and delivered
by the Company and the Trustee for the purpose of embodying the modifications of
the Original  Mortgage  set forth in Sections 1, 2, 8 and 4 hereof,  made at the
adjourned meeting of bondholders  referred to in the recitals  contained herein,
and approved by resolutions of the Board of Directors of the Company, as therein
stated, which modifications became binding upon the Company, the Trustee and the
holders of all bonds and coupons  issued  under the  Mortgage,  on February  15,
1974.

     SECTION  6. To the  extent  required  by  Section  125 of Article XX of the
Original Mortgage, the Trustee, by its execution of this Eighteenth Supplemental
Indenture,  evidences its written  assent to the  modifications  of the Original
Mortgage set forth in Sections 1, 2, 8 and 4 hereof.

     SECTION 7. Whenever in this Eighteenth Supplemental Indenture either of the
parties hereto is named or referred to, this shall, subject to the provisions of
Article XVII of the Original  Mortgage,  be deemed to include the  successors or
assigns of such party,  and all the covenants and agreements in this  Eighteenth
Supplemental  Indenture contained by or on behalf of the Company shall,  subject
as aforesaid,  bind and inure to the benefit of the  respective  successors  and
assigns of such parties, whether so expressed or not.

     SECTION 8. Nothing in this Eighteenth Supplemental Indenture,  expressed or
implied,  is intended or shall be construed  to confer upon,  or to give to, any
person,  co-partnership  or  corporation,  other than the parties hereto and the
holders of the bonds and coupons issued under the Mortgage,  any right,  remedy,
or claim under or by reason of this  Eighteenth  Supplemental  Indenture  or any
covenant,  condition or stipulation  hereof; and all the covenants,  conditions,
stipulations,  promises and agreements in this Eighteenth Supplemental Indenture
contained  by or on behalf of the  Company  shall be for the sole and  exclusive
benefit of the parties hereto and of the holders of the bonds and of the coupons
issued under the Mortgage.

     SECTION 9. This Eighteenth  Supplemental  Indenture is dated as of February
15,  1974,  although  executed and  delivered on the date of the  acknowledgment
hereof by the Trustee;  and shall be  simultaneously  executed and  delivered in
several counterparts,  and all such counterparts executed and delivered, each as
an original, shall constitute but one and the same instrument.

     IN WITNESS WHEREOF,  INDIANAPOLIS POWER & LIGHT COMPANY, party of the first
part has caused its corporate name to be hereunto affixed and this instrument to
be  signed  and  acknowledged  by its  President  or a Vice  President,  and its
corporate  seal  to be  hereto  affixed  and  attested  by its  Secretary  or an
Assistant Secretary, for and in its behalf, and AMERICAN NATIONAL BANK AND TRUST
COMPANY  OF  CHICAGO,  party of the  second  part,  as  Trustee,  has caused its
corporate  name to be  hereunto  affixed  and this  instrument  to be signed and
acknowledged by one of its Vice Presidents,  and its corporate seal to be hereto
affixed and  attested by one of its  Assistant  Secretaries,  all as of the day,
month and year first above written.

                                   INDIANAPOLIS POWER & LIGHT COMPANY

                                            By  /s/E. L. CASSADY
                                                   E.L. CASSADY, President

Attest:

        /s/M.E. Woods
        M.E. Woods, Secretary

                                            AMERICAN NATIONAL BANK AND TRUST
                                              COMPANY OF CHICAGO

                                            By /s/P. G. CALLAS
                                               PERRY G. CALLAS, Vice President

Attest:

    /s/RICHARD Y. GUTHRIE
    RICHARD Y. GUTHRIE, Assistant Secretary

<PAGE>

STATE OF INDIANA  )
COUNTY OF MARION  ) SS:

     On this 15th day of February,  in the year 1974, before me, a Notary Public
in and for the  County  and  State  aforesaid,  personally  came E. L.  CASSADY,
President,  and M. E. WOODS,  Secretary,  of Indianapolis Power & Light Company,
one  of  the  corporations   described  in  and  which  executed  the  foregoing
instrument,  to me  personally  known  and  known  to me  personally  to be such
President and Secretary, respectively. Said E. L. Cassady and M. E. Woods, being
by me severally duly sworn did depose and say that said E. L. Cassady resides in
Marion County,  Indiana,  and that said M. E. Woods resides in Hendricks County,
Indiana;  that said E. L. Cassady is President and said M. E. Woods is Secretary
of said  Indianapolis  Power &  Light  Company;  that  each  of them  knows  the
corporate seal of said corporation; that the seal affixed to said instrument and
bearing the name of said  corporation  is such  corporate  seal;  that it was so
affixed by order of the Board of Directors of said corporation; and that each of
them signed his name thereto by like order;  and each of them  acknowledged  the
execution of said  instrument on behalf of said  corporation  to be his free and
voluntary  act and  deed  and  the  free  and  voluntary  act  and  deed of said
corporation, for the uses and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 15th day of February, 1974.

                                              /s/L. ANGELA CRAWFORD
                                              L. ANGELA CRAWFORD, Notary Public

My Commission Expires:
May 2, 1977

(Notarial Seal)
<PAGE>

STATE OF ILLINOIS )
COUNTY OF COOK    ) SS:

     On this 15th day of February,  in the year 1974, before me, a Notary Public
in and for the County and State aforesaid, personally came PERRY G. CALLAS, Vice
President,  and RICHARD Y. GUTHRIE,  Assistant  Secretary,  of American National
Bank and Trust  Company of Chicago,  one of the  corporations  described  in and
which executed the foregoing instrument,  to me personally known and known to me
personally to be such Vice President and Assistant Secretary, respectively. Said
PERRY G. CALLAS,  AND RICHARD Y. GUTHRIE,  being by me severally  duly sworn did
depose and say that said PERRY G. CALLAS resides in Chicago,  State of Illinois,
and that said RICHARD Y. GUTHRIE  resides in Evanston,  State of Illinois;  that
said PERRY G. CALLAS,  Vice  President  and said RICHARD Y. GUTHRIE is Assistant
Secretary of said American National Bank and Trust Company of Chicago; that each
of them knows the corporate seal of said  corporation;  that the seal affixed to
said instrument and bearing the name of said corporation is such corporate seal;
that  it was so  affixed  by  authority  of  the  Board  of  Directors  of  said
corporation;  and that each of them signed his name  thereto by like  authority;
and each of them acknowledged the execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and the free and voluntary
act and deed of said corporation, for the uses and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 15th day of February, 1974.

                                              /s/SANDRA GURGONE
                                              SANDRA GURGONE, Notary Public

My Commission Expires:
January 15, 1978

                                                                 (Notarial Seal)

                          This instrument was prepared
                                 by M. E. Woods

<PAGE>
<TABLE>
<CAPTION>

                                 RECORDING DATA
         Eighteenth Supplemental Indenture Dates As Of February 15, 1974

                                                                      Recording
   County             Record            Page           Instr. No.        Date
   ------             ------            ----           ----------     ---------
<S>                <C>                   <C>              <C>         <C>
Boone ........     Mtg. Rec. 169         85               610         2/19/74

Daviess ......     Mtg. Rec. 181        743             10439         2/19/74

Gibson .......     Drawer No. 2         ---             37234         2/19/74
                   Card No. 5259

Greene .......     Mtg. Rec. H-7         65               862         2/19/74

Hamilton .....     Mtg. Rec. 294        429              1261         2/19/74

Hancock ......         ---              ---           74-0714         2/19/74

Hendricks ....     Mtg. Rec. 214      241-6             11721         2/19/74

Johnson ......     Mtg. Rec. 221        765            011890         2/19/74

Knox .........     Mtg. Rec. 240        365               593         2/19/74

Madison ......     Mtg. Rec. 600        407              9299         2/19/74

Marion .......         ---              ---            74-8625        2/19/74

Monroe .......     Mtg. Rec. A227       451             56636         2/19/74

Morgan .......     Mtg. Rec. 227         33               778         2/19/74

Owen .........     Mtg. Rec. AAV        397             32784         2/19/74

Pike .........     Mtg. Rec. 54         163               338         2/19/74

Putnam .......     Mtg. Rec. 139        443             13542         2/19/74

Shelby .......     Mtg. Rec. 220        671               705         2/19/74

Sullivan .....     Mtg. Rec. 202        484             16908         2/19/74

</TABLE>
<PAGE>

                                                                   Exhibit 4.4.4

                     INDIANAPOLIS POWER & LIGHT COMPANY

                                      TO

                       AMERICAN NATIONAL BANK AND TRUST
                              COMPANY OF CHICAGO
                                              TRUSTEE

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

                      THIRTY-FOURTH SUPPLEMENTAL INDENTURE

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

                         DATED AS OF OCTOBER 15, 1991

                      ESTABLISHING FIRST MORTGAGE BONDS,

                            8% SERIES, DUE 2006

                               TABLE OF CONTENTS*

                                       of

                      THIRTY-FOURTH SUPPLEMENTAL INDENTURE

                                       of

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                 PAGE
                                                                 ----
Parties..................................................          1
Recitals.................................................          1
Section 1   Granting clauses..............................         3
               Part I Electric Distributing Systems.......         3
               Part II Steam and Hot Water Distributing
                         Systems..........................         4
               Part III Indeterminate Permits and
                         Franchises.......................         4
               Part IV Other Property.....................         5
            General and after-acquired title..............         6
Section 2   Designation of Thirty-Second series of bonds
              and kind and denominations thereof..........         6
            Record date for payment of interest...........         6
            Designation of American National Bank and Trust
              Company of Chicago as paying agent..........         7
            Exchange of bonds.............................         7
            Transfer of bonds.............................         8
            Series limited to $58,800,000.................         8
Section 3   Form of fully registered bond.................         8
            Form of Trustee's certificate on bonds........        10
Section 4   Temporary bonds...............................        13
Section 5   Annual Payments for Maintenance and
              Improvement Fund............................        13
Section 6   Compliance with Section 47 of Original
              Mortgage with respect to dividend
              restrictions................................        14
Section 7   Acceptance of trusts by Trustee and
              conditions of acceptance....................        14
Section 8   Successors and assigns........................        14
Section 9   Limitation of rights hereunder................        14
_________________________
*Table of Contents is not part of the Thirty-Fourth
Supplemental Indenture and should not be considered such.
It is included herein only for purposes of convenient
reference.

                                                                PAGE
                                                                ----
Section 10  Compliance with terms, provisions and
              conditions of Mortgage......................        15
Section 11  Execution in counterparts.....................        15
Testimonium...............................................        16
Signatures and Seals......................................        16
Acknowledgements..........................................        17

                                       ii

THIS THIRTY-FOURTH SUPPLEMENTAL INDENTURE, dated as of
October 15, 1991, between INDIANAPOLIS POWER & LIGHT
COMPANY, a corporation of the State of Indiana,
hereinafter sometimes called the "Company," party of the
first part, and AMERICAN NATIONAL BANK AND TRUST COMPANY
OF CHICAGO, a national banking association, as Trustee,
hereinafter sometimes called the "Trustee," party of the
second part;

WHEREAS, the Company by a Mortgage and Deed of Trust
(hereinafter sometimes called the "Original Mortgage"
when referred to as existing prior to any supplement
thereto or modification thereof, and the "Mortgage" when
referred to as now or heretofore supplemented and
modified) dated as of May 1, 1940, made to said American
National Bank and Trust Company of Chicago, as Trustee,
to secure the payment of the bonds issued from time to
time under the Mortgage for the purposes of and subject
to the limitations specified in the Mortgage, and to
secure the performance of the covenants therein
contained, conveyed to the Trustee thereunder upon
certain trusts, terms and conditions, and with and
subject to certain provisos and covenants therein
contained, all and singular the property, rights and
franchises which the Company then owned or should
thereafter acquire, excepting the property expressly
excepted by the terms of the Original Mortgage or any
indenture supplemental thereto, to which Mortgage
reference is hereby made for greater certainty; and

WHEREAS, the Original Mortgage has been supplemented and
modified by supplemental indentures dated as of May 1,
1942, as of February 1, 1948, as of April 1, 1949, as of
October 1, 1949, as of February 1, 1951, as of March 1,
1953, as of June 1, 1956, as of March 1, 1958, as of
October 1, 1960, as of August 1, 1964, as of April 1,
1966, as of May 1, 1967, as of May 1, 1968, as of October
1, 1970, as of March 1, 1972, as of March 15, 1973, as of
February 15, 1974, as of August 15, 1974, as of September
15, 1975, as of June 1, 1976, as of July 1, 1976, as of
August 1, 1977, as of September 1, 1978, as of August 1,
1981, as of November 1, 1983, as of November 1, 1984, as
of December 1, 1984, as of September 1, 1985, as of
October 1, 1986, as of June 1, 1989, and as of August 1,
1989; and

WHEREAS, Section 8 of the Original Mortgage provides,
among other things, that the form of each series of bonds
(other than the initial issue of bonds) issued thereunder
shall be established by an indenture supplemental thereto
authorized by resolution of the Board of Directors of the
Company, and that the form of each series, as established
by the Board of Directors, shall specify the descriptive
title of the bonds and various other terms thereof, and
may also contain other provisions as the Board of
Directors may, in its discretion, cause to be inserted
therein expressing or referring to the terms and
conditions upon which such bonds are to be issued and
secured under the Original Mortgage or any indenture
supplemental thereto or in modification thereof; and

WHEREAS, the Company now desires to provide for the
establishment, execution, authentication and delivery
under the Mortgage of bonds of a series to be known as
its "First Mortgage Bonds, 8% Series, due 2006" (the
bonds of said series being hereinafter sometimes referred
to as the "2006 Bonds"), limited to the aggregate
principal amount of Fifty-Eight Million Eight Hundred
Thousand Dollars ($58,800,000); and

WHEREAS, all things necessary to make the 2006 Bonds
hereinafter described, when duly executed by the Company
and authenticated and delivered by the Trustee, valid,
binding and legal obligations of the Company, and to make
this Thirty-Fourth Supplemental Indenture a valid and
binding agreement supplemental to the Original Mortgage,
have been done and performed; and

WHEREAS, the execution and delivery by the Company of
this Thirty-Fourth Supplemental Indenture, and the terms
of the 2006 Bonds, have been duly authorized by the Board
of Directors of the Company by appropriate resolutions of
said Board; and

WHEREAS, it is provided in and by the Original Mortgage
that the Company will execute and deliver such further
instruments and do such further acts as may be necessary
or proper to carry out more effectually the purposes of
the Mortgage, and to make subject to the lien thereof any
property thereafter acquired and intended to be subject
to the lien thereof; and

WHEREAS, the Company has, since the date of execution and
delivery of the Original Mortgage, purchased and acquired
property and desires by this Thirty-Fourth Supplemental
Indenture specifically to convey to the Trustee such
property for the better protection and security of the
bonds issued and to be issued under the Original
Mortgage, or any indenture supplemental thereto;

NOW, THEREFORE, THIS INDENTURE WITNESSETH that, in
consideration of the premises and of the acceptance or
purchase of the 2006 Bonds by the registered owners
thereof, and of the sum of one dollar, lawful money of
the United States of America, to the Company duly paid by
the Trustee at or before the execution and delivery of
this Thirty-Fourth Supplemental Indenture, the receipt
whereof is hereby acknowledged, the Company and the
Trustee, respectively, have entered into, executed and
delivered this Thirty-Fourth Supplemental Indenture, for
the uses and purposes hereinafter expressed, that is to
say:

Section 1. The Company has granted, bargained, sold,
released, conveyed, assigned, transferred, mortgaged,
pledged, set over and confirmed, and by these presents
does grant, bargain, sell, release, convey, assign,
transfer, mortgage, pledge, set over and confirm
(subject, however, to permitted encumbrances as defined
in the Original Mortgage), unto said American National
Bank and Trust Company of Chicago, as Trustee, as herein
provided, and its successors in the trusts declared in
the Original Mortgage and herein, all of the property,
real, personal and mixed, tangible and intangible, of
every kind, character and description which the Company
has acquired since the execution and delivery of the
Original Mortgage and now owns (except property, rights
and assets of a character similar to that excluded from
the lien and operation of the Mortgage by the Granting
Clauses of the Original Mortgage, which property, rights
and assets are excluded from the lien and operation of
the Mortgage only to the extent provided therein),
including, but without otherwise limiting the generality
of the foregoing, the following described property
situated within the State of Indiana:

                        PART I.

              ELECTRIC DISTRIBUTING SYSTEMS.

All electric distributing systems of the Company acquired
by it after May 1, 1940, the date of the Original
Mortgage, and located in the Counties of Bartholomew,
Boone, Daviess, Greene, Hamilton, Hancock, Hendricks,
Johnson, Knox, Madison, Marion, Monroe, Morgan, Owen,
Pike, Putnam, Shelby and Sullivan, State of Indiana; and
any additions to or extensions of any such systems,
together with the buildings, erections, structures,
transmission lines, power stations, sub-stations,
engines, boilers, condensers, pumps, turbines, machinery,
tools, conduits, manholes, insulators, dynamos, motors,
lamps, cables, wires, poles, towers, cross-arms, piers,
abutments, switchboard equipment, meters, appliances,
instruments, apparatus, appurtenances, maps, records,
ledgers, contracts, facilities and other property or
equipment used or provided for use in connection with the
construction, maintenance, repair and operation thereof;
together also with all of the rights, privileges, rights-
of-way, franchises, licenses, grants, liberties,
immunities, ordinances, permits and easements of the
Company in respect of the construction, maintenance,
repair and operation of said systems.

                      PART II.

      STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

All the steam and hot water distributing systems acquired
by the Company after May 1, 1940, the date of the
Original Mortgage, and located in the City of
Indianapolis, Marion County, Indiana, and any additions
to or extensions of any such systems; together with the
buildings, erections, structures, boilers, heaters,
engines, tanks, pipe lines, mains, connections, service
pipes, meters, tools, instruments, appliances, apparatus,
facilities, machinery and other property and equipment
used or provided for use in the construction,
maintenance, repair and operation thereof; and together
also with all of the rights, privileges, rights-of-way,
franchises, licenses, grants, liberties, immunities,
ordinances, permits and easements of the Company in
respect of the construction, maintenance, repair and
operation of said systems.

                    PART III.

    INDETERMINATE PERMITS AND FRANCHISES.

All indeterminate permits, franchises, ordinances,
licenses, and other authorizations by or from any state,
county, municipality, or other governmental authority,
acquired by the Company after May 1, 1940, the date of
the Original Mortgage, including particularly, but not
limited to, any indeterminate permits
under the Public Service Commission Act of the State of
Indiana, and all Acts amendatory thereof and supplemental
thereto, and all right, title and interest therein now
owned by the Company, and all renewals, extensions and
modifications of said indeterminate permits, franchises,
ordinances, licenses, and other authorizations, and of
the indeterminate permits, franchises, ordinances,
licenses, and other authorizations referred to in Part
VII of the Granting Clauses of the Original Mortgage.

                    PART IV.

                OTHER PROPERTY.

All other property, whether real, personal or mixed
(except any in the Mortgage expressly excepted), now
owned by the Company and wheresoever situated, including
(without in anywise limiting or impairing by the
enumeration of the same the scope and intent of the
foregoing or of any general description contained in the
Mortgages) all lands, flowage rights, water rights,
flumes, raceways, dams, rights-of-way and roads; all
plants for the generation of electricity by water, steam
and/or other power, power houses, telephone systems,
water systems, steam heat and power plants, hot water
plants, sub-stations, transmission lines, distribution
systems, bridges, culverts and tracks; all offices,
buildings and structures and the equipment thereof; all
machinery, engines, boilers, dynamos, machines,
regulators, meters, transformers, generators and motors;
all appliances whether electrical, gas or mechanical,
conduits, cables and lines; all pipes whether for water,
steam heat and power, or other purposes; all mains and
pipes, service pipes, fittings, valves and connections,
poles, wires, tools, implements, apparatus, furniture and
chattels; all municipal franchises, indeterminate
permits, and other permits; all lines for the
transportation, transmission and/or distribution of
electric current, steam heat and power or water for any
purpose, including towers, poles, wires, cables, pipes,
conduits and all apparatus for use in connection
therewith; all real estate, lands, leases, leaseholds;
all contracts, whether heat, light, power, water or
street lighting contracts; all easements, servitudes,
licenses, permits, rights, powers, franchises,
privileges, rights-of-way and other rights in or relating
to real estate or the occupancy of the same and (except
as hereinafter or in the Mortgage expressly excepted) all
the right, title and interest of the Company in and to
all other property of any kind or nature appertaining to
and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore described or referred to;

Together with all and singular the tenements,
hereditaments and appurtenances belonging or in anywise
appertaining to the aforesaid property or any part
thereof, with the reversion and reversions, remainder and
remainders and (subject to the provisions of Section 64
of the Original Mortgage), the tools, rent, revenues,
issues, earnings, income, product and profits thereof,
and all the estate, right, title and 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, indeterminate permits, franchises,
ordinances, licenses
and other authorizations and every part and parcel
thereof.

Section 2. There shall be and is hereby established a
series of bonds, limited in aggregate principal amount to
Fifty-Eight Million Eight Hundred Thousand Dollars
($58,800,000) to be issued under and secured by the
Mortgage, to be designated "8% Series, due 2006", each of
which shall also bear the descriptive title "First
Mortgage Bonds"; said bonds shall mature on October 15,
2006, and shall be issued only as fully registered bonds
without coupons in the denomination of one thousand
dollars and any larger denomination which is a multiple
of one thousand dollars; they shall bear interest from
the beginning of the current interest period during which
each bond is dated, at the rate per annum designated in
the title thereof, payable semi-annually, on October 15
and April 15 of each year; and the principal of, premium,
if any, and interest on each said bond shall be payable
in lawful money of the United States of America at the
office or agency of the Company in the City of Chicago,
Illinois.  The person in whose name any such bond is
registered at the close of business on any record date
(as hereinafter defined) with respect to any interest
payment date shall be entitled to receive the interest
payable on 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 on 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 with respect to payment of interest in default may
be established by or in behalf of the Company by notice
mailed to the holders of the 2006 Bonds not less than ten
(10) days preceding such record date, which record date
shall not be more than thirty (30) 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 tenth day next
preceding such interest payment date, or, if such tenth
day shall be a legal holiday or a day on which banking
institutions in the City of Chicago, Illinois, are
authorized by law to close, the day next succeeding such
tenth day which shall not be a legal holiday or a day on
which such institutions are authorized to close.

American National Bank and Trust Company of Chicago is
hereby designated and appointed the office and agency of
the Company for the payment of the principal of, premium,
if any, and interest on the 2006 Bonds and for the
registration, transfer and exchange of such bonds as
hereinafter provided; all reference herein to the office
or agency of the Company for the payment of the principal
of, premium, if any, and interest on the 2006 Bonds, or
the registration, transfer or exchange thereof, being to
American National Bank and Trust Company of Chicago.  In
the event of the resignation or inability to act of
American National Bank and Trust Company of Chicago, then
a successor agent for all such purposes in the City of
Chicago, Illinois, shall be appointed by the Board of
Directors of the Company.

The 2006 Bonds shall be dated as of the date of
authentication thereof, except as otherwise provided in
Section 10 of the Original Mortgage.

The 2006 Bonds shall not be subject to redemption by the
Company prior to the maturity thereof except out of
monies deposited with the Trustee representing the
proceeds of mortgaged and pledged property taken by the
exercise of the power of eminent domain or otherwise as
provided in paragraph B of Section 69 of the Mortgage, in
which event the redemption price of the 2006 Bonds so to
be redeemed shall be the principal amount of such bonds
plus accrued interest thereon to the date of redemption.

At the option of the holder, any 2006 Bonds, upon
surrender thereof at said office or agency of the Company
together with a written instrument of transfer in form
approved by the Company duly executed by the holder or by
his duly authorized attorney, shall be exchangeable for a
like aggregate principal amount of fully registered bonds
of the same series of other authorized denominations.

The 2006 Bonds shall be transferable on the books of the
Company at said office or agency of the Company in the
City of Chicago, Illinois, by the registered holder
thereof, in person or by his duly authorized attorney,
upon surrender thereof for cancellation.

The Company shall not be required to make transfers or
exchanges of any of the 2006 Bonds for a period of ten
(10) days next preceding any interest payment date of
said bonds.

No charge shall be made upon any transfer or exchange of
any of the 2006 Bonds other than for any tax or taxes or
other governmental charge required to be paid by the
Company.

The 2006 Bonds shall be limited to an aggregate principal
amount of Fifty-Eight Million Eight Hundred Thousand
Dollars ($58,800,000) and shall be issued under the
provisions of Article VI and Article VII of the Original
Mortgage.

Section 3.  The 2006 Bonds, and the Trustee's Certificate
to be endorsed thereon, shall be in the following forms,
respectively:

[Form of Face of Bond]

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 8% Series, Due 2006
     Due October 15, 2006

No.                                       $

INDIANAPOLIS POWER & LIGHT COMPANY, a corporation of the
State of Indiana (hereinafter called the Company), for
value received, hereby promises to pay to
                                    or registered
assigns, on October 15, 2006, at the office or agency of
the Company in the City of Chicago, Illinois,
                             Dollars in lawful money of
the United States of America, and to pay to the
registered owner hereof interest thereon from the
fifteenth day of October or the fifteenth day of April
next preceding the date of this bond, at the rate of 8
per centum per annum in like lawful money, at said office
or agency on October 15 and April 15 in each year, until
the Company's obligation with respect to the payment of
such principal shall have been discharged.  The interest
payable hereunder on October 15 or April 15 will, subject
to the exception provided in Section 2 of the Thirty-
Fourth Supplemental Indenture hereinafter mentioned, be
paid to the person in whose name this bond is registered
at the close of business on the record date, which shall
be the tenth day next preceding such interest payment
date or, if such tenth day shall be a legal holiday or a
day on which banking institutions in the City of Chicago,
Illinois, are authorized by law to close, the day next
succeeding such tenth day which shall not be a legal
holiday or a day on which such institutions are
authorized to close.

REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH ON THE REVERSE HEREOF.  SUCH FURTHER PROVISIONS
SHALL, FOR ALL PURPOSES, HAVE THE SAME EFFECT AS THOUGH
FULLY SET FORTH IN THIS PLACE.

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

IN WITNESS WHEREOF, Indianapolis Power & Light Company
has caused this Bond to be signed in its name by its
President or one of its Vice-Presidents, by his signature
or a facsimile thereof, and a facsimile of its corporate
seal to be imprinted hereon, attested by its Secretary or
one of its Assistant Secretaries, by his signature or a
facsimile thereof.

                     INDIANAPOLIS POWER & LIGHT COMPANY

Dated:               By_______________________________________
                                   President

Attest:

By_____________________________
           Secretary

[Form of Trustee's Certificate on Bonds]

     Trustee's Certificate

This Bond is one of the bonds, of the series herein
designated, provided for in the within-mentioned Mortgage
and Thirty-Fourth Supplemental Indenture.

                                   AMERICAN NATIONAL BANK AND
                                     TRUST COMPANY OF CHICAGO
                                                  Trustee

By______________________________________

Authorized Signature

[Form of Reverse Side of Bond]

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 8% Series, due 2006
     Due October 15, 2006

This Bond is one of an issue of bonds of the Company,
issuable in series, and is one of a series known as its
First Mortgage Bonds, 8% Series, due 2006 (herein
sometimes called the "2006 Bonds") limited in aggregate
principal amount to Fifty-Eight Million Eight Hundred
Thousand Dollars ($58,800,000) and established by a
Thirty-Fourth Supplemental Indenture, dated as of October
15, 1991, all bonds of all series issued and to be issued
under and equally secured (except insofar as any sinking
or other fund, established in accordance with the
provisions of the Mortgage hereinafter mentioned, may
afford additional security for the bonds of any
particular series) by a Mortgage and Deed of Trust, dated
as of May 1, 1940, executed by the Company to American
National Bank and Trust Company of Chicago, as Trustee
(which Mortgage and Deed of Trust as supplemented and
modified by all supplemental indentures thereto is
hereinafter referred to as the "Mortgage"), to which
Mortgage reference is made for a description of the
property mortgaged and pledged, the nature and extent of
the security, the rights of the bearers or registered
owners of the bonds in respect of such security, the
duties and immunities of the Trustee and terms and
conditions upon which the bonds are secured.

With the consent of the Company and to the extent
permitted by and as provided in the Mortgage, the rights
and obligations of the Company and/or of the holders of
the bonds and/or coupons and/or the terms and provisions
of the Mortgage and/or any instruments supplemental
thereto may be modified or altered by affirmative vote of
the holders of at least sixty-six and two-thirds per
centum (66-2/3%) in principal amount of the bonds
affected by such modification or alteration then
outstanding under the Mortgage (excluding bonds
disqualified from voting by reason of the Company's
interest therein as provided in the Mortgage); provided
that no such modification or alteration shall permit the
extension of the maturity of the principal of this bond
or the reduction in the rate of interest hereon or any
other modification in the terms of payment of such
principal or interest without the consent of the holder
hereof.  The principal hereof may be declared or may
become due and payable prior to the stated date of
maturity hereof, on the conditions, in the manner and at
the time set forth in the Mortgage, upon the occurrence
of a completed default as in the Mortgage provided.

The 2006 Bonds are issued only in fully registered form
without coupons in the denomination of one thousand
dollars and any larger denomination which is a multiple
of one thousand dollars.  In the manner and upon payment
of the charges hereinafter mentioned, the 2006 Bonds,
upon surrender thereof at the office or agency of the
Company in the City of Chicago, Illinois, together with a
written instrument of transfer in form approved by the
Company duly executed by the registered holder or by his
duly authorized attorney, are exchangeable for a like
aggregate principal amount of fully registered bonds of
the same series of other authorized denominations.

This bond 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 City of Chicago, Illinois, upon surrender
and cancellation of this bond and upon presentation of a
written instrument of transfer, duly executed and upon
payment of the charges hereinafter mentioned, and,
thereupon, a new fully registered bond of the same series
for a like principal amount will be issued to the
transferee in exchange hereof as provided in the
Mortgage.  The Company and the Trustee may deem and treat
the person in whose name this bond is registered as the
absolute owner hereof for the purpose of receiving
payment and for all other purposes.

No charge shall be made upon any transfer or exchange of
any of the 2006 Bonds other than for any tax or taxes or
other governmental charge required to be paid by the
Company.

The Company shall not be required to make transfers or
exchanges of any of the 2006 Bonds for a period of ten
(10) days next preceding any interest payment date of
said bonds.

The 2006 Bonds are not subject to redemption by the
Company prior to the maturity thereof except out of
monies deposited with the Trustee representing the
proceeds of mortgaged and pledged property taken by the
exercise of the power of eminent domain or otherwise as
provided in paragraph B of Section 69 of the Mortgage, in
which event the redemption price of the 2006 Bonds so to
be redeemed shall be the principal amount of such bonds
plus accrued interest thereon to the date of redemption.

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, as such,
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, as
such, being waived and released by the terms of the
Mortgage.

Section 4. Until the 2006 Bonds in definitive form are
ready for delivery, the Company may execute, and upon its
request in writing the Trustee shall authenticate and
deliver, in lieu thereof, fully registered 2006 Bonds in
temporary form, as provided in Section 15 of the Original
Mortgage. Such bonds may, in lieu of the statement of the
specific redemption prices required to be set forth in
such bonds in definitive form, include a reference to
this Thirty-Fourth Supplemental Indenture for a statement
of such redemption prices.

Section 5. The covenant of the Company to make annual
payments to the Trustee for a Maintenance and Improvement
Fund as contained in Section 41 of the Original Mortgage
and in the first twenty-four Supplemental Indentures to
the Original Mortgage creating the several series of
First Mortgage Bonds presently outstanding under such
Supplemental Indentures shall not apply to, or be for the
benefit of the 2006 Bonds, and the Company reserves the
right, without any consent of, or other action by, the
holders of the 2006 Bonds, to amend, modify or delete the
provisions of the Mortgage relating to such Maintenance
and Improvement Fund, and by acceptance of the 2006
Bonds, the holders thereof waive any right or privilege
so to consent or take any other action with respect
thereto.

Section 6. The Company covenants that, so long as any of
the 2006 Bonds shall remain outstanding, it will comply
with all of the provisions of Section 47 of the Original
Mortgage, including the provisions with respect to
limitations on dividends and distributions and the
purchase and redemption of stock.

Section 7. The Trustee hereby accepts the trusts herein
declared, provided and created and agrees to perform the
same upon the terms and conditions herein and in the
Mortgage set forth and upon the following terms and
conditions:

The recitals contained herein and in the bonds shall be
taken as the statements of the Company and the Trustee
assumes no responsibility for the correctness of the
same. The Trustee makes no representations as to the
validity or adequacy of the security afforded hereby, or
as to the validity of this Thirty-Fourth Supplemental
Indenture or of the bonds issued hereunder.

Section 8. Whenever in this Thirty-Fourth Supplemental
Indenture either of the parties hereto is named or
referred to, this shall, subject to the provisions of
Article XVII of the Original Mortgage, be deemed to
include the successors or assigns of such party, and all
the covenants and agreements in this Thirty-Fourth
Supplemental Indenture contained by or on behalf of the
Company, or by or on behalf of the Trustee, shall,
subject as aforesaid, bind and inure to the benefit of
the respective successors and assigns of such parties,
whether so expressed or not.

Section 9. Nothing in this Thirty-Fourth Supplemental
Indenture, expressed or implied, is intended or shall be
construed to confer upon, or to give to, any person, co-
partnership or corporation, other than the parties hereto
and the holders of the bonds and coupons outstanding
under the Mortgage, any right, remedy, or claim under or
by reason of this Thirty-Fourth Supplemental Indenture or
any covenant, condition or stipulation hereof; and all
the covenants, conditions, stipulations, promises and
agreements in this Thirty-Fourth Supplemental Indenture
contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto and of
the holders of the bonds and of the coupons outstanding
under the Mortgage.

Section 10. The Company covenants that all of the terms,
provisions and conditions of the Mortgage shall be
applicable to the 2006 Bonds issued hereunder, except as
herein otherwise provided and except insofar as the same
may be inconsistent with the provisions of this Thirty-
Fourth Supplemental Indenture.

Section 11. This Thirty-Fourth Supplemental Indenture is
dated as of October 15, 1991, although executed and
delivered on the date of the acknowledgment hereof by the
Trustee; and shall be simultaneously executed and
delivered in several counterparts, and all such
counterparts executed and delivered, each as an original,
shall constitute but one and the same instrument.

In Witness Whereof, Indianapolis Power & Light Company,
party of the first part, has caused its corporate name to
be hereunto affixed and this instrument to be signed and
acknowledged by its President or a Vice-President, and
its corporate seal to be hereto affixed and attested by
its Secretary or an Assistant Secretary, for and in its
behalf, and American National Bank and Trust Company of
Chicago, party of the second part, as Trustee, has caused
its corporate name to be hereunto affixed and this
instrument to be signed and acknowledged by one of its
Vice-Presidents, and its corporate seal to be hereto
affixed and attested by one of its Assistant Secretaries,
all as of the day, month and year first above written.

                       Indianapolis Power & Light Company

(SEAL)

                       By    /s/ Marcus E. Woods
                             Marcus E. Woods, Vice-President.

Attest:

/s/ Clark L. Snyder,
Clark L. Snyder, Assistant Secretary.

                        American National Bank and Trust
                          Company of Chicago,
(SEAL)

                        By  /s/ Ronald B. Bremen
                            Ronald B. Bremen, Vice-President.

Attest:

/s/ Robert M. Selangowski
Robert M. Selangowski,
Assistant Secretary.

State of Indiana     )
                     )  ss.:
County of Marion     )

On this 16th day of October, in the year 1991, before me,
a Notary Public in and for the County and State
aforesaid, personally came Marcus E. Woods, Vice-
President, and Clark L. Snyder, Assistant Secretary, of
Indianapolis Power & Light Company, one of the
corporations described in and which executed the
foregoing instrument, to me personally known and known to
me personally to be such Vice-President, and Assistant
Secretary, respectively. Said Marcus E. Woods, and Clark
L. Snyder being by me severally duly sworn did depose and
say that the said Marcus E. Woods resides in Hendricks
County, Indiana and the said Clark L. Snyder resides in
Marion County, Indiana; that said Marcus E. Woods is Vice-
President and said Clark L. Snyder is Assistant Secretary
of said Indianapolis Power & Light Company; that each of
them knows the corporate seal of said corporation; that
the seal affixed to said instrument and bearing the name
of said corporation is such corporate seal; that it was
so affixed by order of the Board of Directors of said
corporation; and that each of them signed his name
thereto by like order; and each of them acknowledged the
execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and
the free and voluntary act and deed of said corporation,
for the uses and purposes therein set forth.

In Witness Whereof, I have hereunto set my hand and
affixed my official seal this 16th day of October, 1991.

                          /s/ Gloria K. Bryant
                          Gloria K. Bryant, Notary Public.

My Commission Expires:
  June 11, 1995

My County of Residence is:
  Marion

(Notarial Seal)

State of Illinois    )
                     )  ss.:
County of Cook       )

On this 16th day of October, in the year 1991, before me,
a Notary Public in and for the County and State
aforesaid, personally came Ronald B. Bremen, Vice-
President, and Robert M. Selangowski, Assistant
Secretary, of American National Bank and Trust Company of
Chicago, one of the corporations described in and which
executed the foregoing instrument, to me personally known
and known to me personally to be such Vice-President and
Assistant Secretary, respectively. Said Ronald B. Bremen
and Robert M. Selangowski, being by me severally sworn
did depose and say that the said Ronald B. Bremen resides
in Glencoe, Illinois, and that the said Robert M.
Selangowski resides in Lansing, Illinois; that said
Ronald B. Bremen is Vice-President and said Robert M.
Selangowski is Assistant Secretary of said American
National Bank and Trust Company of Chicago; that each of
them knows the corporate seal of said corporation; that
the seal affixed to said instrument and bearing the name
of said corporation is such corporate seal; that it was
so affixed by authority of the Board of Directors of said
corporation; that each of them signed his name thereto by
like authority; and each of them acknowledged the
execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and
the free and voluntary act and deed of said corporation,
for the uses and purposes therein set forth.

In Witness Whereof, I have hereunto set my hand and
affixed my official seal this 16th day of October, 1991.

                          /s/ Bernadette G. Janairo
                              Bernadette G. Janairo,
                              Notary Public.
(Notarial Seal)

My Commission Expires: May 22, 1994

My County of Residence is:
  Cook

                    This instrument was prepared by
                                Marcus E. Woods,
                                Attorney at Law
<PAGE>

                                                                   Exhibit 4.4.5

                     INDIANAPOLIS POWER & LIGHT COMPANY

                                      TO

                       AMERICAN NATIONAL BANK AND TRUST
                              COMPANY OF CHICAGO
                                                TRUSTEE

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

                      THIRTY-FIFTH SUPPLEMENTAL INDENTURE

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

                         DATED AS OF AUGUST 1, 1992

                      ESTABLISHING FIRST MORTGAGE BONDS,

                            7-3/8% SERIES, DUE 2007

                               TABLE OF CONTENTS*

                                       of

                      THIRTY-FIFTH SUPPLEMENTAL INDENTURE

                                       of

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                PAGE
                                                                ----
Parties.....................................................      1
Recitals....................................................      1
Section 1    Granting clauses...............................      3
               Part I Electric Distributing Systems.........      3
               Part II Steam and Hot Water Distributing
                         Systems............................      4
               Part III Indeterminate Permits and Franchises      4
               Part IV Other Property.......................      5
             General and after-acquired title...............      6
Section 2    Designation of Thirty-Third series of bonds and
               kind and denominations thereof...............      6
             Record date for payment of interest............      7
             Designation of American National Bank and Trust
               Company of Chicago as paying agent...........      7
             Exchange of bonds..............................      7
             Transfer of bonds..............................      8
             Series limited to $80,000,000..................      8
Section 3    Form of fully registered bond..................      8
             Form of Trustee's certificate on bonds.........      8
Section 4    Temporary bonds................................     13
Section 5    Annual Payments for Maintenance and Improvement
               Fund.........................................     13
Section 6    Compliance with Section 47 of Original Mortgage
               with respect to dividend restrictions........     14
Section 7    Acceptance of trusts by Trustee and conditions
              of acceptance.................................     14
Section 8    Successors and assigns.........................     14
Section 9    Limitation of rights hereunder.................     14
_________________________
*Table of Contents is not part of the Thirty-Fifth
Supplemental Indenture and should not be considered such.
It is included herein only for purposes of convenient
reference.

PAGE

- ----
Section 10   Compliance with terms, provisions and
               conditions of Mortgage.......................     15
Section 11   Execution in counterparts......................     15
Testimonium.................................................     16
Signatures and Seals........................................     16
Acknowledgements............................................     17

                                       ii

THIS THIRTY-FIFTH SUPPLEMENTAL INDENTURE, dated as of
August 1, 1992, between INDIANAPOLIS POWER & LIGHT
COMPANY, a corporation of the State of Indiana,
hereinafter sometimes called the "Company," party of the
first part, and AMERICAN NATIONAL BANK AND TRUST COMPANY
OF CHICAGO, a national banking association, as Trustee,
hereinafter sometimes called the "Trustee," party of the
second part;

WHEREAS, the Company by a Mortgage and Deed of Trust
(hereinafter sometimes called the "Original Mortgage"
when referred to as existing prior to any supplement
thereto or modification thereof, and the "Mortgage" when
referred to as now or heretofore supplemented and
modified) dated as of May 1, 1940, made to said American
National Bank and Trust Company of Chicago, as Trustee,
to secure the payment of the bonds issued from time to
time under the Mortgage for the purposes of and subject
to the limitations specified in the Mortgage, and to
secure the performance of the covenants therein
contained, conveyed to the Trustee thereunder upon
certain trusts, terms and conditions, and with and
subject to certain provisos and covenants therein
contained, all and singular the property, rights and
franchises which the Company then owned or should
thereafter acquire, excepting the property expressly
excepted by the terms of the Original Mortgage or any
indenture supplemental thereto, to which Mortgage
reference is hereby made for greater certainty; and

WHEREAS, the Original Mortgage has been supplemented and
modified by supplemental indentures dated as of May 1,
1942, as of February 1, 1948, as of April 1, 1949, as of
October 1, 1949, as of February 1, 1951, as of March 1,
1953, as of June 1, 1956, as of March 1, 1958, as of
October 1, 1960, as of August 1, 1964, as of April 1,
1966, as of May 1, 1967, as of May 1, 1968, as of October
1, 1970, as of March 1, 1972, as of March 15, 1973, as of
February 15, 1974, as of August 15, 1974, as of September
15, 1975, as of June 1, 1976, as of July 1, 1976, as of
August 1, 1977, as of September 1, 1978, as of August 1,
1981, as of November 1, 1983, as of November 1, 1984, as
of December 1, 1984, as of September 1, 1985, as of
October 1, 1986, as of June 1, 1989, as of August 1,
1989, and as of October 15, 1991;

WHEREAS, Section 8 of the Original Mortgage provides,
among other things, that the form of each series of bonds
(other than the initial issue of bonds) issued thereunder
shall be established by an indenture supplemental thereto
authorized by resolution of the Board of Directors of the
Company, and that the form of each series, as established
by the Board of Directors, shall specify the descriptive
title of the bonds and various other terms thereof, and
may also contain such other provisions as the Board of
Directors may, in its discretion, cause to be inserted
therein expressing or referring to the terms and
conditions upon which such bonds are to be issued and
secured under the Original Mortgage or any indenture
supplemental thereto or in modification thereof; and

WHEREAS, the Company now desires to provide for the
establishment, execution, authentication and delivery
under the Mortgage of bonds of a series to be known as
its "First Mortgage Bonds, 7-3/8% Series, due 2007" (the
bonds of said series being hereinafter sometimes referred
to as the "2007 Bonds"), limited to the aggregate
principal amount of Eighty Million Dollars ($80,000,000);
and

WHEREAS, all things necessary to make the 2007 Bonds
hereinafter described, when duly executed by the Company
and authenticated and delivered by the Trustee, valid,
binding and legal obligations of the Company, and to make
this Thirty-Fifth Supplemental Indenture a valid and
binding agreement supplemental to the Original Mortgage,
have been done and performed; and

WHEREAS, the execution and delivery by the Company of
this Thirty-Fifth Supplemental Indenture, and the terms
of the 2007 Bonds, have been duly authorized by the Board
of Directors of the Company by appropriate resolutions of
said Board; and

WHEREAS, it is provided in and by the Original Mortgage
that the Company will execute and deliver such further
instruments and do such further acts as may be necessary
or proper to carry out more effectually the purposes of
the Mortgage, and to make subject to the lien thereof any
property thereafter acquired and intended to be subject
to the lien thereof; and

WHEREAS, the Company has, since the date of execution and
delivery of the Original Mortgage, purchased and acquired
property and desires by this Thirty-Fifth Supplemental
Indenture specifically to convey to the Trustee such
property for the better protection and security of the
bonds issued and to be issued under the Original
Mortgage, or any indenture supplemental thereto;

NOW, THEREFORE, THIS INDENTURE WITNESSETH that, in
consideration of the premises and of the acceptance or
purchase of the 2007 Bonds by the registered owners
thereof, and of the sum of one dollar, lawful money of
the United States of America, to the Company duly paid by
the Trustee at or before the execution and delivery of
this Thirty-Fifth Supplemental Indenture, the receipt
whereof is hereby acknowledged, the Company and the
Trustee, respectively, have entered into, executed and
delivered this Thirty-Fifth Supplemental Indenture, for
the uses and purposes hereinafter expressed, that is to
say:

Section 1. The Company has granted, bargained, sold,
released, conveyed, assigned, transferred, mortgaged,
pledged, set over and confirmed, and by these presents
does grant, bargain, sell, release, convey, assign,
transfer, mortgage, pledge, set over and confirm
(subject, however, to permitted encumbrances as defined
in the Original Mortgage), unto said American National
Bank and Trust Company of Chicago, as Trustee, as herein
provided, and its successors in the trusts declared in
the Original Mortgage and herein, all of the property,
real, personal and mixed, tangible and intangible, of
every kind, character and description which the Company
has acquired since the execution and delivery of the
Original Mortgage and now owns (except property, rights
and assets of a character similar to that excluded from
the lien and operation of the Mortgage by the Granting
Clauses of the Original Mortgage, which property, rights
and assets are excluded from the lien and operation of
the Mortgage only to the extent provided therein),
including, but without otherwise limiting the generality
of the foregoing, the following described property
situated within the State of Indiana:

                      PART I.

          ELECTRIC DISTRIBUTING SYSTEMS.

All electric distributing systems of the Company acquired
by it after May 1, 1940, the date of the Original
Mortgage, and located in the Counties of Bartholomew,
Boone, Daviess, Greene, Hamilton, Hancock, Hendricks,
Johnson, Knox, Madison, Marion, Monroe, Morgan, Owen,
Pike, Putnam, Shelby and Sullivan, State of Indiana; and
any additions to or extensions of any such systems,
together with the buildings, erections, structures,
transmission lines, power stations, sub-stations,
engines, boilers, condensers, pumps, turbines, machinery,
tools, conduits, manholes, insulators, dynamos, motors,
lamps, cables, wires, poles, towers, cross-arms, piers,
abutments, switchboard equipment, meters, appliances,
instruments, apparatus, appurtenances, maps, records,
ledgers, contracts, facilities and other property or
equipment used or provided for use in connection with the
construction, maintenance, repair and operation thereof;
together also with all of the rights, privileges, rights-
of-way, franchises, licenses, grants, liberties,
immunities, ordinances, permits and easements of the
Company in respect of the construction, maintenance,
repair and operation of said systems.

                       PART II.

    STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

All the steam and hot water distributing systems acquired
by the Company after May 1, 1940, the date of the
Original Mortgage, and located in the City of
Indianapolis, Marion County, Indiana, and any additions
to or extensions of any such systems; together with the
buildings, erections, structures, boilers, heaters,
engines, tanks, pipe lines, mains, connections, service
pipes, meters, tools, instruments, appliances, apparatus,
facilities, machinery and other property and equipment
used or provided for use in the construction,
maintenance, repair and operation thereof; and together
also with all of the rights, privileges, rights-of-way,
franchises, licenses, grants, liberties, immunities,
ordinances, permits and easements of the Company in
respect of the construction, maintenance, repair and
operation of said systems.

                     PART III.

      INDETERMINATE PERMITS AND FRANCHISES.

All indeterminate permits, franchises, ordinances,
licenses, and other authorizations by or from any state,
county, municipality, or other governmental authority,
acquired by the Company after May 1, 1940, the date of
the Original Mortgage, including particularly, but not
limited to, any indeterminate permits
under the Public Service Commission Act of the State of
Indiana, and all Acts amendatory thereof and supplemental
thereto, and all right, title and interest therein now
owned by the Company, and all renewals, extensions and
modifications of said indeterminate permits, franchises,
ordinances, licenses, and other authorizations, and of
the indeterminate permits, franchises, ordinances,
licenses, and other authorizations referred to in Part
VII of the Granting Clauses of the Original Mortgage.

                   PART IV.

               OTHER PROPERTY.

All other property, whether real, personal or mixed
(except any in the Mortgage expressly excepted), now
owned by the Company and wheresoever situated, including
(without in anywise limiting or impairing by the
enumeration of the same the scope and intent of the
foregoing or of any general description contained in the
Mortgages) all lands, flowage rights, water rights,
flumes, raceways, dams, rights-of-way and roads; all
plants for the generation of electricity by water, steam
and/or other power, power houses, telephone systems,
water systems, steam heat and power plants, hot water
plants, sub-stations, transmission lines, distribution
systems, bridges, culverts and tracks; all offices,
buildings and structures and the equipment thereof; all
machinery, engines, boilers, dynamos, machines,
regulators, meters, transformers, generators and motors;
all appliances whether electrical, gas or mechanical,
conduits, cables and lines; all pipes whether for water,
steam heat and power, or other purposes; all mains and
pipes, service pipes, fittings, valves and connections,
poles, wires, tools, implements, apparatus, furniture and
chattels; all municipal franchises, indeterminate
permits, and other permits; all lines for the
transportation, transmission and/or distribution of
electric current, steam heat and power or water for any
purpose, including towers, poles, wires, cables, pipes,
conduits and all apparatus for use in connection
therewith; all real estate, lands, leases, leaseholds;
all contracts, whether heat, light, power, water or
street lighting contracts; all easements, servitudes,
licenses, permits, rights, powers, franchises,
privileges, rights-of-way and other rights in or relating
to real estate or the occupancy of the same and (except
as hereinafter or in the Mortgage expressly excepted) all
the right, title and interest of the Company in and to
all other property of any kind or nature appertaining to
and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore described or referred to;

Together with all and singular the tenements,
hereditaments and appurtenances belonging or in anywise
appertaining to the aforesaid property or any part
thereof, with the reversion and reversions, remainder and
remainders and (subject to the provisions of Section 64
of the Original Mortgage), the tools, rents, revenues,
issues, earnings, income, product and profits thereof,
and all the estate, right, title and 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, indeterminate permits, franchises,
ordinances, licenses
and other authorizations and every part and parcel
thereof.

Section 2. There shall be and is hereby established a
series of bonds, limited in aggregate principal amount to
Eighty Million Dollars ($80,000,000) to be issued under
and secured by the Mortgage, to be designated "7-3/8%
Series, due 2007", each of which shall also bear the
descriptive title "First Mortgage Bonds"; said bonds
shall mature on August 1, 2007, and shall be issued only
as fully registered bonds without coupons in the
denomination of one thousand dollars and any larger
denomination which is a whole multiple of one thousand
dollars; they shall bear interest from the beginning of
the current interest period during which each bond is
dated, at the rate per annum designated in the title
thereof, payable semi-annually, on August 1 and February
1 of each year; and the principal of, premium, if any,
and interest on each said bond shall be payable in lawful
money of the United States of America at the office or
agency of the Company in the City of Chicago, Illinois.
The person in whose name any such bond is registered at
the close of business on any record date (as hereinafter
defined) with respect to any interest payment date shall
be entitled to receive the interest payable on 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 on 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 with
respect to payment of interest in default may be
established by or in behalf of the Company by notice
mailed to the holders of the 2007 Bonds not less than ten
(10) days preceding such record date, which record date
shall not be more than thirty (30) 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 tenth day next
preceding such interest payment date, or, if such tenth
day shall be a legal holiday or a day on which banking
institutions in the City of Chicago, Illinois, are
authorized by law to close, the day next succeeding such
tenth day which shall not be a legal holiday or a day on
which such institutions are authorized to close.

American National Bank and Trust Company of Chicago is
hereby designated and appointed the office and agency of
the Company for the payment of the principal of, premium,
if any, and interest on the 2007 Bonds and for the
registration, transfer and exchange of such bonds as
hereinafter provided; all reference herein to the office
or agency of the Company for the payment of the principal
of, premium, if any, and interest on the 2007 Bonds, or
the registration, transfer or exchange thereof, being to
American National Bank and Trust Company of Chicago.  In
the event of the resignation or inability to act of
American National Bank and Trust Company of Chicago, then
a successor agent for all such purposes in the City of
Chicago, Illinois, shall be appointed by the Board of
Directors of the Company.

The 2007 Bonds shall be dated as of the date of
authentication thereof, except as otherwise provided in
Section 10 of the Original Mortgage.

The 2007 Bonds shall not be subject to redemption by the
Company prior to the maturity thereof except out of
monies deposited with the Trustee representing the
proceeds of mortgaged and pledged property taken by the
exercise of the power of eminent domain or otherwise as
provided in paragraph B of Section 69 of the Mortgage, in
which event the redemption price of the 2007 Bonds so to
be redeemed shall be the principal amount of such bonds
plus accrued interest thereon to the date of redemption.

At the option of the holder, any 2007 Bond, upon
surrender thereof at said office or agency of the Company
together with a written instrument of transfer in form
approved by the Company duly executed by the holder or by
his duly authorized attorney, shall be exchangeable for a
like aggregate principal amount of fully registered bonds
of the same series of other authorized denominations.

The 2007 Bonds shall be transferable on the books of the
Company at said office or agency of the Company in the
City of Chicago, Illinois, by the registered holder
thereof, in person or by his duly authorized attorney,
upon surrender thereof for cancellation.

The Company shall not be required to make transfers or
exchanges of any of the 2007 Bonds for a period of ten
(10) days next preceding any interest payment date of
said bonds.

No charge shall be made upon any transfer or exchange of
any of the 2007 Bonds other than for any tax or taxes or
other governmental charge required to be paid by the
Company.

The 2007 Bonds shall be limited to an aggregate principal
amount of Eighty Million Dollars ($80,000,000) and shall
be issued under the provisions of Article VII of the
Original Mortgage.

Section 3.  The 2007 Bonds and the Trustee's Certificate
to be endorsed thereon, shall be in the following forms,
respectively:

[Form of Face of Bond]

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 7-3/8% Series, Due 2007
     Due August 1, 2007

No.                                          $

INDIANAPOLIS POWER & LIGHT COMPANY, a corporation of the
State of Indiana (hereinafter called the "Company"), for
value received, hereby promises to pay to
or registered assigns, on August 1, 2007, at the office
or agency of the Company in the City of Chicago,
Illinois,
                             Dollars in lawful money of
the United States of America, and to pay to the
registered owner hereof interest thereon from the first
day of August or the first day of February next preceding
the date of this bond, at the rate of 7-3/8 per centum
per annum in like lawful money, at said office or agency
on August 1 and February 1 in each year, until the
Company's obligation with respect to the payment of such
principal shall have been discharged.  The interest
payable hereunder on August 1 or February 1 will, subject
to the exception provided in Section 2 of the Thirty-
Fifth Supplemental Indenture hereinafter mentioned, be
paid to the person in whose name this bond is registered
at the close of business on the record date, which shall
be the tenth day next preceding such interest payment
date or, if such tenth day shall be a legal holiday or a
day on which banking institutions in the City of Chicago,
Illinois, are authorized by law to close, the day next
succeeding such tenth day which shall not be a legal
holiday or a day on which such institutions are
authorized to close.

REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND
SET FORTH ON THE REVERSE HEREOF.  SUCH FURTHER PROVISIONS
SHALL, FOR ALL PURPOSES, HAVE THE SAME EFFECT AS THOUGH
FULLY SET FORTH IN THIS PLACE.

IN WITNESS WHEREOF, Indianapolis Power & Light Company
has caused this Bond to be signed in its name by its
President or one of its Vice-Presidents, by his signature
or a facsimile thereof, and a facsimile of its corporate
seal to be imprinted hereon, attested by its Secretary or
one of its Assistant Secretaries, by his signature or a
facsimile thereof.

                      INDIANAPOLIS POWER & LIGHT COMPANY

Dated:                By_______________________________________
                                      President

Attest:

By_____________________________
           Secretary

[Form of Trustee's Certificate on Bonds]

     Trustee's Certificate

This Bond is one of the bonds, of the series herein
designated, provided for in the within-mentioned Mortgage
and Thirty-Fifth Supplemental Indenture.

                        AMERICAN NATIONAL BANK AND
                          TRUST COMPANY OF CHICAGO
                                             Trustee

By______________________________________

Authorized Signature

[Form of Reverse Side of Bond]

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 7-3/8% Series, due 2007
     Due August 1, 2007

This Bond is one of an issue of bonds of the Company,
issuable in series, and is one of a series known as its
First Mortgage Bonds, 7-3/8% Series, due 2007 (herein
sometimes called the "2007 Bonds") limited in aggregate
principal amount to Eighty Million Dollars ($80,000,000)
and established by a Thirty-Fifth Supplemental Indenture,
dated as of August 1, 1992, all bonds of all series
issued and to be issued under and equally secured (except
insofar as any sinking or other fund, established in
accordance with the provisions of the Mortgage
hereinafter mentioned, may afford additional security for
the bonds of any particular series) by a Mortgage and
Deed of Trust, dated as of May 1, 1940, executed by the
Company to American National Bank and Trust Company of
Chicago, as Trustee (which Mortgage and Deed of Trust as
supplemented and modified by all supplemental indentures
thereto is hereinafter referred to as the "Mortgage"), to
which Mortgage reference is made for a description of the
property mortgaged and pledged, the nature and extent of
the security, the rights of the bearers or registered
owners of the bonds in respect of such security, the
duties and immunities of the Trustee and terms and
conditions upon which the bonds are secured.

With the consent of the Company and to the extent
permitted by and as provided in the Mortgage, the rights
and obligations of the Company and/or of the holders of
the bonds and/or coupons and/or the terms and provisions
of the Mortgage and/or any instruments supplemental
thereto may be modified or altered by affirmative vote of
the holders of at least sixty-six and two-thirds per
centum (66-2/3%) in principal amount of the bonds
affected by such modification or alteration then
outstanding under the Mortgage (excluding bonds
disqualified from voting by reason of the Company's
interest therein as provided in the Mortgage); provided
that no such modification or alteration shall permit the
extension of the maturity of the principal of this bond
or the reduction in the rate of interest hereon or any
other modification in the terms of payment of such
principal or interest without the consent of the holder
hereof.  The principal hereof may be declared or may
become due and payable prior to the stated date of
maturity hereof, on the conditions, in the manner and at
the time set forth in the Mortgage, upon the occurrence
of a completed default as in the Mortgage provided.

The 2007 Bonds are issuable only in fully registered form
without coupons in the denomination of one thousand
dollars and any larger denomination which is a multiple
of one thousand dollars.  In the manner and upon payment
of the charges hereinafter mentioned, the 2007 Bonds,
upon surrender thereof at the office or agency of the
Company in the City of Chicago, Illinois, together with a
written instrument of transfer in form approved by the
Company duly executed by the registered holder or by his
duly authorized attorney, are exchangeable for a like
aggregate principal amount of fully registered bonds of
the same series of other authorized denominations.

This bond 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 City of Chicago, Illinois, upon surrender
and cancellation of this bond and upon presentation of a
written instrument of transfer, duly executed and upon
payment of the charges hereinafter mentioned, and,
thereupon, a new fully registered bond of the same series
for a like principal amount will be issued to the
transferee in exchange hereof as provided in the
Mortgage.  The Company and the Trustee may deem and treat
the person in whose name this bond is registered as the
absolute owner hereof for the purpose of receiving
payment and for all other purposes.

No charge shall be made upon any transfer or exchange of
any of the 2007 Bonds other than for any tax or taxes or
other governmental charge required to be paid by the
Company.

The Company shall not be require to make transfers or
exchanges of any of the 2007 Bonds for a period of ten
(10) days next preceding any interest payment date of
said bonds.

The 2007 Bonds are not subject to redemption by the
Company prior to the maturity thereof except out of
monies deposited with the Trustee representing the
proceeds of mortgaged and pledged property taken by the
exercise of the power of eminent domain or otherwise as
provided in paragraph B of Section 69 of the Mortgage, in
which event the redemption price of the 2007 Bonds so to
be redeemed shall be the principal amount of such bonds
plus accrued interest thereon to the date of redemption.

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, as such,
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, as
such, being waived and released by the terms of the
Mortgage.

Section 4. Until the 2007 Bonds in definitive form are
ready for delivery, the Company may execute, and upon its
request in writing the Trustee shall authenticate and
deliver, in lieu thereof, fully registered 2007 Bonds in
temporary form, as provided in Section 15 of the Original
Mortgage. Such bonds may, in lieu of the statement of the
specific redemption prices required to be set forth in
such bonds in definitive form, include a reference to
this Thirty-Fifth Supplemental Indenture for a statement
of such redemption prices.

Section 5. The covenant of the Company to make annual
payments to the Trustee for a Maintenance and Improvement
Fund as contained in Section 41 of the Original Mortgage
and in the first twenty-four Supplemental Indentures to
the Original Mortgage creating the several series of
First Mortgage Bonds presently outstanding under such
Supplemental Indentures shall not apply to, or be for the
benefit of the 2007 Bonds, and the Company reserves the
right, without any consent of, or other action by, the
holders of the 2007 Bonds, to amend, modify or delete the
provisions of the Mortgage relating to such Maintenance
and Improvement Fund, and by acceptance of the 2007
Bonds, the holders thereof waive any right or privilege
so to consent or take any other action with respect
thereto.

Section 6. The Company covenants that, so long as any of
the 2007 Bonds shall remain outstanding, it will comply
with all of the provisions of Section 47 of the Original
Mortgage, including the provisions with respect to
limitations on dividends and distributions and the
purchase and redemption of stock.

Section 7. The Trustee hereby accepts the trusts herein
declared, provided and created and agrees to perform the
same upon the terms and conditions herein and in the
Mortgage set forth and upon the following terms and
conditions:

The recitals contained herein and in the bonds shall be
taken as the statements of the Company and the Trustee
assumes no responsibility for the correctness of the
same. The Trustee makes no representations as to the
validity or adequacy of the security afforded hereby, or
as to the validity of this Thirty-Fifth Supplemental
Indenture or of the bonds issued hereunder.

Section 8. Whenever in this Thirty-Fifth Supplemental
Indenture either of the parties hereto is named or
referred to, this shall, subject to the provisions of
Article XVII of the Original Mortgage, be deemed to
include the successors or assigns of such party, and all
the covenants and agreements in this Thirty-Fifth
Supplemental Indenture contained by or on behalf of the
Company, or by or on behalf of the Trustee, shall,
subject as aforesaid, bind and inure to the benefit of
the respective successors and assigns of such parties,
whether so expressed or not.

Section 9. Nothing in this Thirty-Fifth Supplemental
Indenture, expressed or implied, is intended or shall be
construed to confer upon, or to give to, any person, co-
partnership or corporation, other than the parties hereto
and the holders of the bonds and coupons outstanding
under the Mortgage, any right, remedy, or claim under or
by reason of this Thirty-Fifth Supplemental Indenture or
any covenant, condition or stipulation hereof; and all
the covenants, conditions, stipulations, promises and
agreements in this Thirty-Fifth Supplemental Indenture
contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto and of
the holders of the bonds and of the coupons outstanding
under the Mortgage.

Section 10. The Company covenants that all of the terms,
provisions and conditions of the Mortgage shall be
applicable to the 2007 Bonds issued hereunder, except as
herein otherwise provided and except insofar as the same
may be inconsistent with the provisions of this Thirty-
Fifth Supplemental Indenture.

Section 11. This Thirty-Fifth Supplemental Indenture is
dated as of August 1, 1992, although executed and
delivered on the date of the acknowledgment hereof by the
Trustee; and shall be simultaneously executed and
delivered in several counterparts, and all such
counterparts executed and delivered, each as an original,
shall constitute but one and the same instrument.

In Witness Whereof, Indianapolis Power & Light Company,
party of the first part, has caused its corporate name to
be hereunto affixed and this instrument to be signed and
acknowledged by its President or a Vice-President, and
its corporate seal to be hereto affixed and attested by
its Secretary or an Assistant Secretary, for and in its
behalf, and American National Bank and Trust Company of
Chicago, party of the second part, as Trustee, has caused
its corporate name to be hereunto affixed and this
instrument to be signed and acknowledged by one of its
Vice-Presidents, and its corporate seal to be hereto
affixed and attested by one of its Assistant Secretaries,
all as of the day, month and year first above written.

                           Indianapolis Power & Light Company

(SEAL)

Attest:                    By    /s/ Marcus E. Woods
                                 Marcus E. Woods,
                                 Vice-President
/s/ Clark L. Snyder,
Clark L. Snyder,
Assistant Secretary

                            American National Bank and Trust
                              Company of Chicago,
(SEAL)

Attest:                     By  /s/ Ronald B. Bremen
                                Ronald B. Bremen,
                                Vice-President

/s/ Robert M. Selangowski
Robert M. Selangowski,
Assistant Secretary.

State of Indiana     )
                     )  ss.:
County of Marion     )

On this 31st day of July, in the year 1992, before me, a
Notary Public in and for the County and State aforesaid,
personally came Marcus E. Woods, Vice-President, and
Clark L. Snyder, Assistant Secretary, of Indianapolis
Power & Light Company, one of the corporations described
in and which executed the foregoing instrument, to me
personally known and known to me personally to be such
Vice-President, and Assistant Secretary, respectively.
Said Marcus E. Woods, and Clark L. Snyder being by me
severally duly sworn did depose and say that the said
Marcus E. Woods resides in Hendricks County, Indiana and
the said Clark L. Snyder resides in Marion County,
Indiana; that said Marcus E. Woods is Vice-President and
said Clark L. Snyder is Assistant Secretary of said
Indianapolis Power & Light Company; that each of them
knows the corporate seal of said corporation; that the
seal affixed to said instrument and bearing the name of
said corporation is such corporate seal; that it was so
affixed by order of the Board of Directors of said
corporation; and that each of them signed his name
thereto by like order; and each of them acknowledged the
execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and
the free and voluntary act and deed of said corporation,
for the uses and purposes therein set forth.

In Witness Whereof, I have hereunto set my hand and
affixed my official seal this 31st day of July, 1992.

                           /s/ Gloria K. Bryant
                           Gloria K. Bryant
                           Notary Public

My Commission Expires:
  June 11, 1995

My County of Residence is:
  Marion

(Notarial Seal)

State of Illinois    )
                     )  ss.:
County of Cook       )

On this 31st day of July, in the year 1992, before me, a
Notary Public in and for the County and State aforesaid,
personally came Ronald B. Bremen, Vice-President, and
Robert M. Selangowski, Assistant Secretary, of American
National Bank and Trust Company of Chicago, one of the
corporations described in and which executed the
foregoing instrument, to me personally known and known to
me personally to be such Vice-President and Assistant
Secretary, respectively. Said Ronald B. Bremen and Robert
M. Selangowski, being by me severally sworn did depose
and say that the said Ronald B. Bremen resides in
Glencoe, Illinois, and that the said Robert M.
Selangowski resides in Lansing, Illinois; that said
Ronald B. Bremen is Vice-President and said Robert M.
Selangowski is Assistant Secretary of said American
National Bank and Trust Company of Chicago; that each of
them knows the corporate seal of said corporation; that
the seal affixed to said instrument and bearing the name
of said corporation is such corporate seal; that it was
so affixed by authority of the Board of Directors of said
corporation; that each of them signed his name thereto by
like authority; and each of them acknowledged the
execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and
the free and voluntary act and deed of said corporation,
for the uses and purposes therein set forth.

In Witness Whereof, I have hereunto set my hand and
affixed my official seal this 31st day of July, 1992.

                            /s/ Bernadette G. Janairo
                            Bernadette G. Janairo,
                            Notary Public
(Notarial Seal)

My Commission Expires: May 22, 1994

My County of Residence is:
  Cook

                         This instrument was prepared by
                                Marcus E. Woods,
                                 Attorney at Law

<PAGE>

                                                                   Exhibit 4.4.6

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                      TO

                       AMERICAN NATIONAL BANK AND TRUST
                              COMPANY OF CHICAGO
                                                 TRUSTEE

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

                      THIRTY-SIXTH SUPPLEMENTAL INDENTURE

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

                         DATED AS OF APRIL 1, 1993

                      ESTABLISHING FIRST MORTGAGE BONDS,

                            6.10% SERIES, DUE 2016

                               TABLE OF CONTENTS*

                                       of

                      THIRTY-SIXTH SUPPLEMENTAL INDENTURE

                                       of

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                PAGE
                                                                ----
Parties..................................................         1
Recitals.................................................         1
Section 1   Granting clauses.............................         3
              Part I Electric Distributing Systems.......         4
              Part II Steam and Hot Water Distributing
                        Systems..........................         4
              Part III Indeterminate Permits and
                        Franchises.......................         5
              Part IV Other Property.....................         5
            General and after-acquired title.............         6
Section 2   Designation of Thirty-Fourth series of bonds
              and kind and denominations thereof.........         6
            Designation of Company or American National
              Bank and Trust Company of Chicago as paying
              agent......................................         7
            Purpose of bonds.............................         7
            Redemption of bonds..........................         8
            Exchange of bonds............................        12
            Transfer of bonds............................        13
            Series limited to $41,850,000................        13
Section 3   Form of fully registered bond................        13
            Form of Trustee's certificate on bonds.......        16
Section 4   Temporary bonds..............................        19
Section 5   Payment of principal and interest; credits...        19
Section 6   Annual Payments for Maintenance and Improvement
              Fund.......................................        20
Section 7   Compliance with Section 47 of Original Mortgage
              with respect to dividend restrictions......        20
Section 8   Acceptance of trusts by Trustee and conditions
              of acceptance..............................        20
_________________________
*Table of Contents is not part of the Thirty-Sixth
Supplemental Indenture and should not be considered such.
It is included herein only for purposes of convenient
reference.

                                                                PAGE
                                                                ----
Section 9   Successors and assigns.......................        20
Section 10  Limitation of rights hereunder...............        21
Section 11  Compliance with terms, provisions and
              conditions of Mortgage.....................        21
Section 12  Execution in counterparts....................        21
Testimonium..............................................        22
Signatures and Seals.....................................        22
Acknowledgements.........................................        23

                                       ii

THIS THIRTY-SIXTH SUPPLEMENTAL INDENTURE, dated as of
April 1, 1993, between INDIANAPOLIS POWER & LIGHT
COMPANY, a corporation of the State of Indiana,
hereinafter sometimes called the "Company," party of the
first part, and AMERICAN NATIONAL BANK AND TRUST COMPANY
OF CHICAGO, a national banking association, as Trustee,
hereinafter sometimes called the "Trustee," party of the
second part;

WHEREAS, the Company by a Mortgage and Deed of Trust
(hereinafter sometimes called the "Original Mortgage"
when referred to as existing prior to any supplement
thereto or modification thereof, and the "Mortgage" when
referred to as now or heretofore supplemented and
modified) dated as of May 1, 1940, made to said American
National Bank and Trust Company of Chicago, as Trustee,
to secure the payment of the bonds issued from time to
time under the Mortgage for the purposes of and subject
to the limitations specified in the Mortgage, and to
secure the performance of the covenants therein
contained, conveyed to the Trustee thereunder upon
certain trusts, terms and conditions, and with and
subject to certain provisos and covenants therein
contained, all and singular the property, rights and
franchises which the Company then owned or should
thereafter acquire, excepting the property expressly
excepted by the terms of the Original Mortgage or any
indenture supplemental thereto, to which Mortgage
reference is hereby made for greater certainty; and

WHEREAS, the Original Mortgage has been supplemented and
modified by supplemental indentures dated as of May 1,
1942, as of February 1, 1948, as of April 1, 1949, as of
October 1, 1949, as of February 1, 1951, as of March 1,
1953, as of June 1, 1956, as of March 1, 1958, as of
October 1, 1960, as of August 1, 1964, as of April 1,
1966, as of May 1, 1967, as of May 1, 1968, as of October
1, 1970, as of March 1, 1972, as of March 15, 1973, as of
February 15, 1974, as of August 15, 1974, as of September
15, 1975, as of June 1, 1976, as of July 1, 1976, as of
August 1, 1977, as of September 1, 1978, as of August 1,
1981, as of November 1, 1983, as of November 1, 1984, as
of December 1, 1984, as of September 1, 1985, as of
October 1, 1986, as of June 1, 1989, as of August 1,
1989, as of October 15, 1991 and as of August 1, 1992;

WHEREAS, Section 8 of the Original Mortgage provides,
among other things, that the form of each series of bonds
(other than the initial issue of bonds) issued thereunder
shall be established by an indenture supplemental thereto
authorized by resolution of the Board of Directors of the
Company, and that the form of each series, as established
by the Board of Directors, shall specify the descriptive
title of the bonds and various other terms thereof, and
may also contain such other provisions as the Board of
Directors may, in its discretion, cause to be inserted
therein expressing or referring to the terms and
conditions upon which such bonds are to be issued and
secured under the Original Mortgage or any indenture
supplemental thereto or in modification thereof; and

WHEREAS, the Company has entered into a Loan Agreement,
dated as of April 1, 1993 (hereinafter called the "Loan
Agreement") with the City of Petersburg, Indiana (the
"City"), in order to obtain funds for the refunding of
the aggregate principal amount of Forty One Million Eight
Hundred Fifty Thousand Dollars ($41,850,000) of the
City's Pollution Control Revenue Bonds, Series 1976 and
Series 1978 (Indianapolis Power & Light Company Project)
issued by the City pursuant to a related loan agreements
to pay a portion of the cost of acquisition,
construction, installation and equipping by the Company
of certain pollution control facilities (the
"Facilities"), and pursuant to the Loan Agreement the
Company has agreed to issue a series of its bonds under
the Mortgage and this Thirty-Sixth Supplemental Indenture
in order to evidence and secure its indebtedness under
the Loan Agreement; and

WHEREAS, the Company now desires to provide for the
establishment, execution, authentication and delivery
under the Mortgage of bonds of a series to be known as
its "First Mortgage Bonds, 6.10% Series, due 2016" (the
bonds of said series being hereinafter sometimes referred
to as the "2016 PC Bond"), limited to the aggregate
principal amount of Forty One Million Eight Hundred Fifty
Thousnd Dollars ($41,850,000); and

WHEREAS, all things necessary to make the 2016 PC Bond
hereinafter described, when duly executed by the Company
and authenticated and delivered by the Trustee, a valid,
binding and legal obligation of the Company, and to make
this Thirty-Sixth Supplemental Indenture a valid and
binding agreement supplemental to the Original Mortgage,
have been done and performed; and

WHEREAS, the execution and delivery by the Company of
this Thirty-Sixth Supplemental Indenture, and the terms
of the 2016 PC Bond, have been duly authorized by the
Board of Directors of the Company by appropriate
resolutions of said Board; and

WHEREAS, it is provided in and by the Original Mortgage
that the Company will execute and deliver such further
instruments and do such further acts as may be necessary
or proper to carry out more effectually the purposes of
the Mortgage, and to make subject to the lien thereof any
property thereafter acquired and intended to be subject
to the lien thereof; and

WHEREAS, the Company has, since the date of execution and
delivery of the Original Mortgage, purchased and acquired
property and desires by this Thirty-Sixth Supplemental
Indenture specifically to convey to the Trustee such
property for the better protection and security of the
bonds issued and to be issued under the Original
Mortgage, or any indenture supplemental thereto;

NOW, THEREFORE, THIS INDENTURE WITNESSETH that, in
consideration of the premises and of the acceptance or
purchase of the 2016 PC Bond by the registered owners
thereof, and of the sum of one dollar, lawful money of
the United States of America, to the Company duly paid by
the Trustee at or before the execution and delivery of
this Thirty-Sixth Supplemental Indenture, the receipt
whereof is hereby acknowledged, the Company and the
Trustee, respectively, have entered into, executed and
delivered this Thirty-Sixth Supplemental Indenture, for
the uses and purposes hereinafter expressed, that is to
say:

Section 1. The Company has granted, bargained, sold,
released, conveyed, assigned, transferred, mortgaged,
pledged, set over and confirmed, and by these presents
does grant, bargain, sell, release, convey, assign,
transfer, mortgage, pledge, set over and confirm
(subject, however, to permitted encumbrances as defined
in the Original Mortgage), unto said American National
Bank and Trust Company of Chicago, as Trustee, as herein
provided, and its successors in the trusts declared in
the Original Mortgage and herein, all of the property,
real, personal and mixed, tangible and intangible, of
every kind, character and description which the Company
has acquired since the execution and delivery of the
Original Mortgage and now owns (except property, rights
and assets of a character similar to that excluded from
the lien and operation of the Mortgage by the Granting
Clauses of the Original Mortgage, which property, rights
and assets are excluded from the lien and operation of
the Mortgage only to the extent provided therein),
including, but without otherwise limiting the generality
of the foregoing, the following described property
situated within the State of Indiana:

                       PART I.

            ELECTRIC DISTRIBUTING SYSTEMS.

All electric distributing systems of the Company acquired
by it after May 1, 1940, the date of the Original
Mortgage, and located in the Counties of Bartholomew,
Boone, Daviess, Greene, Hamilton, Hancock, Hendricks,
Johnson, Knox, Madison, Marion, Monroe, Morgan, Owen,
Pike, Putnam, Shelby and Sullivan, State of Indiana; and
any additions to or extensions of any such systems,
together with the buildings, erections, structures,
transmission lines, power stations, sub-stations,
engines, boilers, condensers, pumps, turbines, machinery,
tools, conduits, manholes, insulators, dynamos, motors,
lamps, cables, wires, poles, towers, cross-arms, piers,
abutments, switchboard equipment, meters, appliances,
instruments, apparatus, appurtenances, maps, records,
ledgers, contracts, facilities and other property or
equipment used or provided for use in connection with the
construction, maintenance, repair and operation thereof;
together also with all of the rights, privileges, rights-
of-way, franchises, licenses, grants, liberties,
immunities, ordinances, permits and easements of the
Company in respect of the construction, maintenance,
repair and operation of said systems.

                         PART II.

          STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

All the steam and hot water distributing systems acquired
by the Company after May 1, 1940, the date of the
Original Mortgage, and located in the City of
Indianapolis, Marion County, Indiana, and any additions
to or extensions of any such systems; together with the
buildings, erections, structures, boilers, heaters,
engines, tanks, pipe lines, mains, connections, service
pipes, meters, tools, instruments, appliances, apparatus,
facilities, machinery and other property and equipment
used or provided for use in the construction,
maintenance, repair and operation thereof; and together
also with all of the rights, privileges, rights-of-way,
franchises, licenses, grants, liberties, immunities,
ordinances, permits and easements of the Company in
respect of the construction, maintenance, repair and
operation of said systems.

                         PART III.

        INDETERMINATE PERMITS AND FRANCHISES.

All indeterminate permits, franchises, ordinances,
licenses, and other authorizations by or from any state,
county, municipality, or other governmental authority,
acquired by the Company after May 1, 1940, the date of
the Original Mortgage, including particularly, but not
limited to, any indeterminate permits
under the Public Service Commission Act of the State of
Indiana, and all Acts amendatory thereof and supplemental
thereto, and all right, title and interest therein now
owned by the Company, and all renewals, extensions and
modifications of said indeterminate permits, franchises,
ordinances, licenses, and other authorizations, and of
the indeterminate permits, franchises, ordinances,
licenses, and other authorizations referred to in Part
VII of the Granting Clauses of the Original Mortgage.

                      PART IV.

                  OTHER PROPERTY.

All other property, whether real, personal or mixed
(except any in the Mortgage expressly excepted), now
owned by the Company and wheresoever situated, including
(without in anywise limiting or impairing by the
enumeration of the same the scope and intent of the
foregoing or of any general description contained in the
Mortgage) all lands, flowage rights, water rights,
flumes, raceways, dams, rights-of-way and roads; all
plants for the generation of electricity by water, steam
and/or other power, power houses, telephone systems,
water systems, steam heat and power plants, hot water
plants, sub-stations, transmission lines, distribution
systems, bridges, culverts and tracts; all offices,
buildings and structures and the equipment thereof; all
machinery, engines, boilers, dynamos, machines,
regulators, meters, transformers, generators and motors;
all appliances whether electrical, gas or mechanical,
conduits, cables and lines; all pipes whether for water,
steam heat and power, or other purposes; all mains and
pipes, service pipes, fittings, valves and connections,
poles, wires, tools, implements, apparatus, furniture and
chattels; all municipal franchises, indeterminate
permits, and other permits; all lines for the
transportation, transmission and/or distribution of
electric current, steam heat and power or water for any
purpose, including towers, poles, wires, cables, pipes,
conduits and all apparatus for use in connection
therewith; all real estate, lands, leases, leaseholds;
all contracts, whether heat, light, power, water or
street lighting contracts; all easements, servitudes,
licenses, permits, rights, powers, franchises,
privileges, rights-of-way and other rights in or relating
to real estate or the occupancy of the same and (except
as hereinafter or in the Mortgage expressly excepted) all
the right, title and interest of the Company in and to
all other property of any kind or nature appertaining to
and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore described or referred to;

Together with all and singular the tenements,
hereditaments and appurtenances belonging or in anywise
appertaining to the aforesaid property or any part
thereof, with the reversion and reversions, remainder and
remainders and (subject to the provisions of Section 64
of the Original Mortgage), the tolls, rents, revenues,
issues, earnings, income, product and profits thereof,
and all the estate, right, title and 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, indeterminate permits, franchises,
ordinances, licenses and other authorizations and every
part and parcel thereof.

Section 2. There shall be and is hereby established a
series of bonds, limited in aggregate principal amount to
Forty One Million Eight Hundred Fifty Thousand Dollars
($41,850,000) to be issued under and secured by the
Mortgage, to be designated "6.10% Series, due 2016", each
of which shall also bear the descriptive title "First
Mortgage Bonds"; said bonds shall mature on January 1,
2016, and shall be issued only as fully registered bonds
without coupons in the denomination of five thousand
dollars and any larger denomination which is a whole
multiple of five thousand dollars; they shall bear
interest from the beginning of the current interest
period during which each bond is dated, at the rate per
annum designated in the title thereof, payable semi-
annually, on January 1 and July 1 of each year (except
that the first interest payment thereon shall be made
July 1, 1993 for the three-month period from April 1,
1993 through June 30, 1993); and the principal of,
premium, if any, and interest on said bond shall be
payable in lawful money of the United States of America
at the office of the Company in the City of Indianapolis,
Indiana, or, if no such office is maintained, at American
National Bank and Trust Company of Chicago, which is
hereby designated and appointed the office and agency of
the Company in the City of Chicago, Illinois, for the
payment of the principal of, premium, if any, and
interest on the 2016 PC Bond, if necessary,  and for the
registration, transfer and exchange of such bond as
hereinafter provided; all reference herein to the office
or agency of the Company in the City of Chicago,
Illinois, for the payment of the principal of, premium,
if any, and interest on the 2016 PC Bond, or the
registration, transfer or exchange thereof, being to
American National Bank and Trust Company of Chicago. In
event of the resignation or inability to act of American
National Bank and Trust Company of Chicago, then a
successor agent for all such purposes in the City of
Chicago, Illinois, shall be appointed by the Board of
Directors of the Company.

The 2016 PC Bond shall be dated as of the date of
authentication thereof, except as otherwise provided in
Section 10 of the Original Mortgage.

The 2016 PC Bond will be issued to evidence and secure a
loan to the Company by the City pursuant to the Loan
Agreement of certain funds to be acquired by the City
through the issuance of City of Petersburg, Indiana,
Pollution Control Refunding Revenue Bonds, Series 1993A
(Indianapolis Power & Light Company Project)(the "Series
1993A Bonds"), authenticated and delivered under and
pursuant to an Indenture of Trust dated as of April 1,
1993 (hereinafter called the "City Indenture"), by and
between the City and National City Bank, Indiana, as
Trustee (the "City Trustee").  Pursuant to the City's
pledge and assignment of the Loan Agreement, as set forth
in the City Indenture, the 2016 PC Bond shall be issued
to the City and assigned to the City Trustee.  All of the
proceeds of the Series 1993A Bonds will be used for the
refunding of the aggregate principal amount of Forty One
Million Eight Hundred Fifty Thousand Dollars
($41,850,000) of the City's Pollution Control Revenue
Bonds, Series 1976 and Series 1978 (Indianapolis Power &
Light Company Project) issued by the City pursuant to
applicable loan agreements.

Upon the notice and in the manner and with the effect
provided in this Section 2, the 2016 PC Bond shall be
redeemable prior to the maturity thereof under any one or
more of the following circumstances:

(a)  In whole, at the option of the Company, if the
Facilities or Unit 3 of the Petersburg Generating Station
serviced by the Facilities shall have been damaged or
destroyed (i) to such extent that they cannot be
reasonably expected, in the opinion of the Company, to be
restored within a period of six (6) months to the
condition thereof immediately preceding such damage or
destruction, or (ii) to such extent that the Company, in
its reasonable opinion, is thereby prevented from
carrying on its normal operations for a period of six (6)
months or more, or (iii) to such extent that the
restoration thereof would not be, taking into
consideration the net proceeds of any insurance payable
as a result of such damage or destruction, economic in
the reasonable opinion of the Company.

(b)  In whole, at the option of the Company, if title to,
or the temporary use of, all or substantially all of the
Facilities or Unit 3 of the Petersburg Generation Station
serviced by the Facilities, shall have been taken, under
the exercise of the power of eminent domain, or should
any governmental body or agency exercise any right which
it may have to purchase or designate a purchaser of the
same, or should such property be sold to any governmental
body or agency so that the result of such taking or
takings is that (i) the Company, in its reasonable
opinion, is thereby prevented from carrying on its normal
operations of either the Facilities or such Unit 3 for a
period of six (6) months or more, (ii) the restoration
required as a result of the taking cannot be reasonably
expected, in the opinion of the Company, to be completed
in a period of six (6) months, or (iii) the restoration
thereof, taking into consideration the net proceeds from
such eminent domain award, would not be economic in the
reasonable opinion of the Company.

(c)  In whole, at the option of the Company, if, as a
result of any changes in the Constitution or law of the
State of Indiana or the Constitution or law of the United
States of America or of legislative or administrative
action (whether state or federal) or by final decree,
judgment or order of any court or administrative body
(whether state or federal) entered after the contest
thereof by the Company in good faith or the decision of
the Company not to contest the same, the Loan Agreement
shall, in the reasonable opinion of counsel for the
Company, have become void or unenforceable or impossible
of performance in accordance with the intent and purpose
of the parties as expressed in the Loan Agreement; or
unreasonable burdens or excessive liabilities shall, in
the reasonable opinion of the Company, have been imposed
upon the City or the Company, with respect to the
Facilities or operation thereof, including without
limitation federal, state or other ad valorem, property,
income or other taxes not being imposed on the date of
the Loan Agreement other than ad valorem taxes presently
levied upon privately owned property used for the same
general purpose as the Facilities.

(d)  In whole, at the option of the Company, if changes
in the economic availability of raw materials, operating
supplies or facilities necessary for the operation of the
Facilities or the operation of Unit 3 of the Petersburg
Generating Station serviced by the Facilities shall have
occurred or technological or other changes shall have
occurred which render the Facilities or said Unit 3
uneconomic for use in the reasonable opinion of the
Company.

(e)  In part, at the option of the Company, to the extent
of net proceeds received from any condemnation award,
taking or sale as stated herein, if title to, or the
temporary use of any portion of the Facilities shall have
been taken under the exercise of the power of eminent
domain, or should any governmental body or agency
exercise any right it may have to purchase or designate a
purchaser of the same, or should such property be sold to
any governmental body or agency; provided the Company
shall furnish to the City and the City Trustee a
certificate of an Independent Engineer (as defined in the
Loan Agreement) selected by the Company stating (i) that
the property forming the part of the Facilities that was
taken by such condemnation, taking or sale is not
essential to the character or significance of the
Facilities, or (ii) that the Facilities have been
restored to a condition substantially equivalent to their
condition prior to the taking by such condemnation,
taking or sale proceedings, or (iii) that improvements
have been acquired which are suitable for the operation
of the Facilities.

(f)  In whole, at any time on or after January 1, 2003,
or in part on any interest payment date on or after
January 1, 2003, at the option of the Company at a price
equal to the principal amount of the 2016 PC Bond so to
be redeemed and accrued interest to the date of
redemption, together with a premium equal to a percentage
of the principal amount thereof set forth under the
heading "Redemption Premium" in the form of the 2016 PC
Bond hereinafter recited, so long as the Company is not
in default under the Loan Agreement or the 2016 PC Bond.

(g)  the event all or substantially all of the mortgaged
and pledged property under the Mortgage, or all or
substantially all such property used in the business of
generating, manufacturing, transporting, transmitting,
distributing or supplying electricity, should be taken by
exercise of the power of eminent domain, or should any
governmental body or agency exercise any right which it
may have to purchase or designate a purchaser of the
same, or should such property be sold to any governmental
body or agency, the Company shall be obligated to redeem
the 2016 PC Bond outstanding as promptly as possible in
accordance with paragraph B of Section 69 of the Original
Mortgage.

(h)  In the event that the Company is notified by the
City Trustee that (i) an event of default under the City
Indenture has occurred and is continuing, and (ii) the
City Trustee has declared the principal of all the Series
1993A Bonds then outstanding immediately due and payable
pursuant to the City Indenture, the Company shall call
for redemption, on a redemption date selected by it not
later than thirty (30) days following the date on which
such notice is mailed, the 2016 PC Bond outstanding, and
shall on such redemption date redeem the same; provided,
however, that such requirement of redemption shall be
deemed waived, if prior to the date fixed for such
redemption of the 2016 PC Bond (x) such event of default
is waived or cured as set forth in the City Indenture, or
(y) there shall have occurred any completed default (as
defined in the Mortgage) which affects any bond of any
series outstanding under the Mortgage and which completed
default has not been cured and made good prior to such
redemption date, it being the intent of this proviso
that, in lieu of such right to redemption, the holder of
the 2016 PC Bond shall be entitled only to such rights as
are available to the holders of bonds of any other series
outstanding under the Mortgage in the event of such
completed default; and in case of any subsequent
occurrence or continuance of the events described in (i)
and (ii) of this Section 2(h), the Company shall have the
same obligation (subject to the same proviso) to redeem
the 2016 PC Bond.

(i) In the event the City Trustee notifies the Company
and the City that the interest payable on the Series
1993A Bonds held by persons other than a "substantial
user" or a "related person" as those terms are used in
Section 147(a)(2) of the Internal Revenue code of 1986,
as amended, has been determined by a court of competent
jurisdiction or a formal ruling of the Internal Revenue
Service to be subject to federal income taxation by
reason of a breach by the Company of any covenant,
agreement or representation in the Loan Agreement, the
Company shall call the 2016 PC Bond then outstanding to
be redeemed on the next succeeding interest payment date
within one hundred eighty (180) days after the date of
such notice; provided, however, that such requirement of
redemption, whether in whole or in part shall be deemed
waived if, prior to the date fixed for redemption of the
2016 PC Bond pursuant to this Section 2(i), there shall
have occurred any completed default (as defined in the
Mortgage) which affects any bond of any series
outstanding under the Mortgage and which completed
default has not been cured and made good prior to such
redemption date, it being the intent of this proviso
that, in lieu of such right to redemption, the holder of
the 2016 PC Bond shall be entitled only to such rights as
are available to the holders of bonds of any other series
outstanding under the Mortgage in the event of such
completed default; but when any such completed default
shall have been cured and made good, if interest on the
Series 1993A Bonds shall still be taxable as described
above, the Company shall have the same obligation
(subject to the same proviso) to redeem the 2016 PC Bond
on the next succeeding interest payment date within one
hundred eighty (180) days after the curing and making
good of such completed default; provided further, that
the Company may call for redemption such portion of the
2016 PC Bond, which in the written opinion of an attorney
or firm of attorneys of nationally recognized standing on
the subject of municipal bonds, would allow the City
Trustee to redeem the Series 1993A Bonds in part, which
redemption would have the result that the interest
payable on the Series 1993A Bonds remaining outstanding
after such redemption in part would not be subject to
federal income taxation in the hands of persons other
than a "substantial user" or a "related person" as those
terms are used in Section 147(a)(2) of the Internal
Revenue Code of 1986, as amended.

In case of redemption of 2016 PC Bond in whole for the
purpose of prepayment under the Loan Agreement pursuant
to subsections (a), (b), (c), (d), (f), (g), (h) or (i)
above, the amounts payable upon redemption of 2016 PC
Bond shall be a sum sufficient, together with other funds
deposited with the City Trustee and available for such
purpose, to pay the principal of (and premium, in the
case of redemption pursuant to (f) above), and interest
on the 2016 PC Bond then outstanding and to pay all
reasonable and necessary fees and expenses of the City
Trustee accrued and to accrue through final payment of
the 2016 PC Bond.

In case of redemption in part pursuant to (e), (f) or (i)
above, the amount payable by the Company under this
Thirty-Sixth Supplemental Indenture, the Loan Agreement
and the 2016 PC Bond shall be a sum sufficient, together
with other funds deposited with the Trustee and available
for such purpose, to pay the principal of (and premium in
the case of prepayment pursuant to (f) above) and
interest on the 2016 PC Bond so to be redeemed, which sum
together with other funds deposited with the City Trustee
and available for such purpose shall be sufficient to pay
the principal of, premium, if any, and interest on the
Series 1993A Bonds and to pay all reasonable and
necessary fees and expenses of the City Trustee accrued
and to accrue through such partial prepayment.

The 2016 PC Bond and the Series 1993A Bonds shall be
redeemable at any time within one hundred eighty (180)
days following the event or events described as giving
rise to an option of the Company to redeem them in
subsections (a), (b), (c), (d) or (e) above.

To exercise any of the options granted to redeem the 2016
PC Bond in whole or in part or to comply with any
obligations to redeem the 2016 PC Bond in whole or in
part imposed in this Section 2, the Company shall give
written notice of the date of redemption to the City
Trustee, which date shall be not less than thirty (30)
days nor more than ninety (90) days from the date the
notice is mailed.  No further notice, by publication or
otherwise, shall be required for redemption of the 2016
PC Bond, and the requirements of Section 59 of the
Mortgage for notice by newspaper publication shall not
apply to the 2016 PC Bond.

At the option of the holder, the 2016 PC Bond, upon
surrender thereof at the office or agency of the Company
in Chicago, Illinois, together with a written instrument
of transfer in form approved by the Company duly executed
by the holder or by his duly authorized attorney, shall
be exchangeable for a like aggregate principal amount of
fully registered bonds of the same series of other
authorized denominations.

The 2016 PC Bond will be nontransferable except to the
City Trustee and successors thereto, if any, and to the
Company.  To the extent that it is transferable, it is
transferable by the registered holder thereof, in person
or by attorney duly authorized in writing, on the books
of the Company at the office or agency of the Company in
the City of Chicago, Illinois, upon surrender thereof for
cancellation at said office and upon presentation of a
written instrument of transfer duly executed.  Thereupon,
the Company shall issue in the name of the transferee,
and the Trustee shall authenticate and deliver, a new
registered 2016 PC Bond or Bonds, in authorized
denominations, of equal aggregate principal amount.  Any
such transfer shall be subject to the terms and
conditions specified in the Mortgage and in this Thirty-
Sixth Supplemental Indenture.

The Company shall not be required to transfer or exchange
the 2016 PC Bond for a period of ten (10) days next
preceding any interest payment date of such bond.

Except as set forth herein, no charge shall be made upon
any transfer or exchange of any of the 2016 PC Bond other
than for any tax or taxes or other governmental charge
required to be paid by the Company.

The 2016 PC Bond shall be limited to an aggregate
principal amount of Forty One Million Eight Hundred Fifty
Thousand Dollars ($41,850,000) and shall be issued under
the provisions of Article VII of the Original Mortgage.

Section 3.  The 2016 PC Bond, and the Trustee's
Certificate to be endorsed thereon, shall be in the
following forms, respectively:

[form of face of 2016 PC Bond]

This First Mortgage Bond, 6.10% Series, due 2016
(hereinafter called the "2016 PC Bond") is not
transferable except to a successor trustee under the
Indenture of Trust dated as of April 1, 1993, between the
City of Petersburg, Indiana and National City Bank,
Indiana, as the Trustee, or to Indianapolis Power & Light
Company.

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 6.10% Series, Due 2016
     Due January 1, 2016

No.                                              $

INDIANAPOLIS POWER & LIGHT COMPANY, a corporation of the
State of Indiana (hereinafter called the "Company"), for
value received, hereby promises to pay to National City
Bank, Indiana, as the Trustee (hereinafter called the
"City Trustee") under the Indenture of Trust between the
City of Petersburg, Indiana (the "City") and the City
Trustee, dated as of April 1, 1993, (the "City
Indenture") or registered assigns, on January 1, 2016, at
the office of the Company, in the City of Indianapolis,
State of Indiana, or if no such office is maintained at
the time by the Company, then at the office or agency of
the Company for such purpose in the City of Chicago,
State of Illinois, Forty One Million Eight Hundred Fifty
Thousand Dollars ($41,850,000) in lawful money of the
United States of America, and to pay to the registered
owner hereof interest thereon from the first day of
January or the first day of July next preceding the date
of this 2016 PC Bond (except that the first interest
payment hereunder shall be made July 1, 1993 for the
three-month period from April 1, 1993 through June 30,
1993), at the rate of six and one-tenth per centum
(6.10%) per annum in like lawful money at said office or
agency, on January 1 and July 1 in each year, until the
Company's obligation with respect to the payment of such
principal shall have been discharged.  The interest
payable hereunder on January 1 or July 1 will be paid to
the registered owner of this 2016 PC Bond at or before
the close of business on such dates, or if such date
shall be a Saturday, Sunday, holiday or a day on which
banking institutions in the City of Indianapolis or the
city of any paying agents are authorized by law to close,
on or before the close of business on the next succeeding
business day on which such banking institutions are open
for business.

REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS 2016
PC BOND SET FORTH ON THE REVERSE HEREOF.  SUCH FURTHER
PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE SAME EFFECT
AS THOUGH FULLY SET FORTH IN THIS PLACE.

No recourse shall be had for the payment of the principal
of or interest on this 2016 PC 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, as such, 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, as such, being waived and
released by the terms of the Mortgage, as herein defined.

This 2016 PC Bond shall not become obligatory until
American National Bank and Trust Company of Chicago, the
Trustee under the Mortgage, as herein defined, or its
successor thereunder, shall have signed the form of
certificate endorsed hereon.

IN WITNESS WHEREOF, Indianapolis Power & Light Company
has caused this 2016 PC Bond to be signed in its name by
its President or one of its Vice-Presidents, by his
signature or a facsimile thereof, and its corporate seal
to be affixed hereon, attested by its Secretary or one of
its Assistant Secretaries, by his signature or a
facsimile thereof.

                      INDIANAPOLIS POWER & LIGHT COMPANY

Dated:                By_______________________________________
                           Treasurer

Attest:

By_____________________________
           Secretary

[Form of Trustee's Certificate on 2016 PC Bond]

     Trustee's Certificate

This 2016 PC Bond is one of the bonds, of the series
herein designated, provided for in the within-mentioned
Mortgage and Thirty-Sixth Supplemental Indenture thereto.

                        AMERICAN NATIONAL BANK AND
                          TRUST COMPANY OF CHICAGO
                                                  Trustee

                        By______________________________________
                                Authorized Signature

[Form of Reverse Side of 2016 PC Bond]

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 6.10% Series, due 2016
     Due January 1, 2016

This 2016 PC Bond is one of an issue of bonds of the
Company, issuable in series, and is one of a series known
as its First Mortgage Bonds, 6.10% Series, due 2016
(herein called the "2016 PC Bond") limited in aggregate
principal amount to Forty One Million Eight Hundred Fifty
Thousand Dollars ($41,850,000) and established by a
Thirty-Sixth Supplemental Indenture dated as of April 1,
1993, all bonds of all series issued and to be issued
under and equally secured (except insofar as any sinking
or other fund, established in accordance with the
provisions of the Mortgage hereinafter mentioned, may
afford additional security for the bonds of any
particular series) by a Mortgage and Deed of Trust, dated
as of May 1, 1940, executed by the Company to American
National Bank and Trust Company of Chicago, as the
Trustee (which Mortgage and Deed of Trust as supplemented
and modified by all supplemental indentures thereto is
hereinafter referred to as the "Mortgage"), to which
Mortgage reference is made for a description of the
property mortgaged and pledged, the nature and extent of
the security, the rights of the bearers or registered
owners of the bonds in respect of such security, the
duties and immunities of the Trustee and terms and
conditions upon which the bonds are secured.

This 2016 PC Bond evidences and secures a loan made by
the City to the Company, pursuant to a Loan Agreement,
dated as of April 1, 1993, between the City and the
Company (the "Loan Agreement").  In order to obtain funds
for such loan, the City, contemporaneously with the issue
of this 2016 PC Bond, will issue Forty One Million Eight
Hundred Fifty Thousand Dollars ($41,850,000) principal
amount of its Pollution Control Refunding Revenue Bonds,
Series 1993A (Indianapolis Power & Light Company Project)
(the "City Bonds") under and pursuant to the City
Indenture.  The City Bonds are payable from payments made
by the Company of principal of, premium, if any, and
interest on this 2016 PC Bond and from moneys in the Bond
Fund created under the City Indenture.  The obligation of
the Company to pay the principal of, premium, if any, and
interest on this 2016 PC Bond shall be discharged to the
extent that any moneys in said Bond Fund are available
for payments on the City Bonds and are directed by the
Company to be applied thereto, all as provided in the
Thirty-Sixth Supplemental Indenture.

This 2016 PC Bond is not subject to redemption prior to
January 1, 2003, except as provided in Section 2 of the
Thirty-Sixth Supplemental Indenture, to which reference
is made for full description of redemption provisions.

This 2016 PC Bond is subject to redemption in whole at
any time on or after January 1, 2003, or in part on any
interest payment date on or after January 1, 2003, at the
option of the Company, upon at least thirty (30) days
prior notice, all as provided in the Thirty-Sixth
Supplemental Indenture, at a price equal to the principal
amount of the 2016 PC Bond so to be redeemed and accrued
interest to the date of redemption, together with a
premium equal to a percentage of the principal amount
thereof set forth below under the heading "Redemption
Premium":

If Redeemed During the Twelve Months
Ending With the Thirty-First Day                Redemption
of December of the Year Stated                  Premium

      2003...................                    2.0%
      2004...................                    1.0%

and without premium if redeemed after December 31, 2004.

With the consent of the Company and to the extent
permitted by and as provided in the Mortgage, the rights
and obligations of the Company and/or of the holders of
the bonds and/or coupons and/or the terms and provisions
of the Mortgage and/or any instruments supplemental
thereto may be modified or altered by affirmative vote of
the holders of at least sixty-six and two-thirds per
centum (66-2/3%) in principal amount of the bonds
affected by such modification or alteration then
outstanding under the Mortgage (excluding bonds
disqualified from voting by reason of the Company's
interest therein as provided in the Mortgage); provided
that no such modification or alteration shall permit the
extension of the maturity of the principal of this 2016
PC Bond or the reduction in the rate of interest hereon
or any other modification in the terms of payment of such
principal or interest without the consent of the holder
hereof.  The principal hereof may be declared or may
become due and payable prior to the stated date of
maturity hereof, on the conditions, in the manner and at
the time set forth in the Mortgage, upon the occurrence
of a completed default as in the Mortgage provided.

No reference herein to the Mortgage, and no provision of
this 2016 PC Bond or of the Mortgage, shall alter or
impair the obligation of the Company, which is absolute
and unconditional, to pay, subject to the provisions of
the Thirty-Sixth Supplemental Indenture, the principal
of, and premium, if any, and interest on this 2016 PC
Bond at the place, at the respective times and at the
rate and the manner herein prescribed.

This 2016 PC Bond is issuable only in full registered
form without coupons in denominations of Five Thousand
Dollars and any larger denomination which is a whole
multiple of Five Thousand Dollars.

This 2016 PC Bond will be nontransferable except to the
City Trustee and successors thereto, if any, and to the
Company.  To the extent that it is transferable, it is
transferable by the registered holder thereof, in person
or by attorney duly authorized in writing, on the books
of the Company at the office or agency of the Company in
the City of Chicago, Illinois, upon surrender thereof for
cancellation at said office and upon presentation of a
written instrument of transfer duly executed.  Thereupon,
the Company shall issue in the name of the transferee,
and the Trustee shall authenticate and deliver, a new
registered 2016 PC Bond or Bonds, in authorized
denominations, of equal aggregate principal amount.  Any
such transfer shall be subject to the terms and
conditions specified in the Mortgage and in the Thirty-
Sixth Supplemental Indenture.

[End of 2016 PC Bond Form]

Section 4. Until the 2016 PC Bond in definitive form is
ready for delivery, the Company may execute, and upon its
request in writing the Trustee shall authenticate and
deliver, in lieu thereof, a fully registered 2016 PC Bond
in temporary form, as provided in Section 15 of the
Original Mortgage. Such bond may, in lieu of the
statement of the specific redemption prices required to
be set forth in such bond in definitive form, include a
reference to this Thirty-Sixth Supplemental Indenture for
a statement of such redemption prices.

Section 5. The Company covenants and agrees that it will
duly and punctually pay to the holder of the 2016 PC Bond
the principal thereof, premium, if any, and interest on
said bond at the dates and place and in the manner
mentioned therein; provided, however, that:

     (a)  The obligation of the Company to pay the
principal of, and premium, if any, and interest on the
2016 PC Bond shall be discharged to the extent that any
moneys in the Series 1993A Bond Account within the Bond
Fund created under and pursuant to the City Indenture are
available for the payment of the principal of, or
premium, if any, or interest on the Series 1993A Bonds
and are directed by the Company to be applied to the
payment thereof in the manner provided in the City
Indenture on or prior to the dates on which the Company
is required to pay the principal of, or premium, if any,
or interest on the 2016 PC Bond.

     (b)  Except as otherwise provided in this Section 5,
the principal amount of any Series 1993A Bond acquired by
the Company and delivered to the City Trustee, or
acquired by the City Trustee and cancelled, shall be
credited against the obligation of the Company to pay the
principal of the 2016 PC Bond.

As the principal of, premium, if any, and interest on the
2016 PC Bond is paid or deemed paid in full, and upon its
receipt by the Company, such bond shall be delivered to
the Trustee for cancellation.  The Company shall promptly
inform the Trustee of all payments made and credits
availed of with respect to its obligations on the 2016 PC
Bond.  The Trustee shall not be required to recognize any
payment made or credit availed of with respect to any
2016 PC Bond unless it has received (a) the bond for
cancellation by it, or (b) a certificate signed by a duly
authorized officer of the City Trustee specifying the
amount of such payment or credit and the principal amount
of the 2016 PC Bond with respect to which the payment or
credit was applied.  In the absence of receipt by the
Trustee of any 2016 PC Bond, any such certificate shall
be controlling and conclusive.

Section 6. The covenant of the Company to make annual
payments to the Trustee for a Maintenance and Improvement
Fund as contained in Section 41 of the Original Mortgage
and in the first twenty-four Supplemental Indentures to
the Original Mortgage creating the several series of
First Mortgage Bonds presently outstanding under such
Supplemental Indentures shall not apply to nor be for the
benefit of the 2016 PC Bond, and the Company reserves the
right, without any consent of, or other action by, the
holder of the 2016 PC Bond, to amend, modify or delete
the provisions of the Mortgage relating to such
Maintenance and Improvement Fund and by acceptance of the
2016 PC Bond the holder thereof waives any right or
privilege so to consent or take any other action with
respect thereto.

Section 7. The Company covenants that, so long as the
2016 PC Bond shall remain outstanding, it will comply
with all of the provisions of Section 47 of the Original
Mortgage, including the provisions with respect to
limitations on dividends and distributions and the
purchase and redemption of stock.

Section 8. The Trustee hereby accepts the trusts herein
declared, provided and created and agrees to perform the
same upon the terms and conditions herein and in the
Mortgage set forth and upon the following terms and
conditions:

The recitals contained herein and in the bonds shall be
taken as the statements of the Company and the Trustee
assumes no responsibility for the correctness of the
same. The Trustee makes no representations as to the
validity or adequacy of the security afforded hereby, or
as to the validity of this Thirty-Sixth Supplemental
Indenture or of the 2016 PC Bond issued hereunder.

Section 9. Whenever in this Thirty-Sixth Supplemental
Indenture either of the parties hereto is named or
referred to, this shall, subject to the provisions of
Article XVII of the Original Mortgage, be deemed to
include the successors or assigns of such party, and all
the covenants and agreements in this Thirty-Sixth
Supplemental Indenture contained by or on behalf of the
Company, or by or on behalf of the Trustee, shall,
subject as aforesaid, bind and inure to the benefit of
the respective successors and assigns of such parties,
whether so expressed or not.

Section 10. Nothing in this Thirty-Sixth Supplemental
Indenture expressed or implied, is intended or shall be
construed to confer upon, or to give to, any person, co-
partnership or corporation, other than the parties hereto
and the holders of the bonds and coupons outstanding
under the Mortgage, any right, remedy, or claim under or
by reason of this Thirty-Sixth Supplemental Indenture or
any covenant, condition or stipulation hereof; and all
the covenants, conditions, stipulations, promises and
agreements in this Thirty-Sixth Supplemental Indenture
contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto and of
the holders of the bonds and of the coupons outstanding
under the Mortgage.

Section 11. The Company covenants that all of the terms,
provisions and conditions of the Mortgage shall be
applicable to the 2016 PC Bond issued hereunder, except
as herein otherwise provided and except insofar as the
same may be inconsistent with the provisions of this
Thirty-Sixth Supplemental Indenture.

Section 12. This Thirty-Sixth Supplemental Indenture is
dated as of April 1, 1993, although executed and
delivered on the date of the acknowledgment hereof by the
Trustee; and shall be simultaneously executed and
delivered in several counterparts, and all such
counterparts executed and delivered, each as an original,
shall constitute but one and the same instrument.

In Witness Whereof, Indianapolis Power & Light Company,
party of the first part, has caused its corporate name to
be hereunto affixed and this instrument to be signed and
acknowledged by its President or a Vice-President, and
its corporate seal to be hereto affixed and attested by
its Secretary or an Assistant Secretary, for and in its
behalf, and American National Bank and Trust Company of
Chicago, party of the second part, as Trustee, has caused
its corporate name to be hereunto affixed and this
instrument to be signed and acknowledged by one of its
Vice-Presidents, and its corporate seal to be hereto
affixed and attested by one of its Assistant Secretaries,
all as of the day, month and year first above written.

                      Indianapolis Power & Light Company

Attest:               By    /s/ Marcus E. Woods
                            Marcus E. Woods,
                            Vice-President

/s/ Clark L. Snyder
Clark L. Snyder,
Assistant Secretary

(Seal)

                      American National Bank and Trust
                        Company of Chicago

Attest:               By  /s/ Richard Y. Guthrie
                          Richard Y. Guthrie,
                          Senior Vice-President

/s/ Robert M. Selangowski
Robert M. Selangowski,
Assistant Secretary

(Seal)

State of Indiana     )
                     )  ss.:
County of Marion     )

On this 5th day of April, in the year 1993, before me, a
Notary Public in and for the County and State aforesaid,
personally came Marcus E. Woods, Vice-President, and
Clark L. Snyder, Assistant Secretary, of Indianapolis
Power & Light Company, one of the corporations described
in and which executed the foregoing instrument, to me
personally known and known to me personally to be such
Vice-President, and Assistant Secretary, respectively.
Said Marcus E. Woods and Clark L. Snyder being by me
severally duly sworn did depose and say that the said
Marcus E. Woods resides in Hendricks County, Indiana and
the said Clark L. Snyder resides in Marion County,
Indiana; that said Marcus E. Woods is Vice-President and
said Clark L. Snyder is Assistant Secretary of said
Indianapolis Power & Light Company; that each of them
knows the corporate seal of said corporation; that the
seal affixed to said instrument and bearing the name of
said corporation is such corporate seal; that is was so
affixed by order of the Board of Directors of said
corporation; and that each of them signed his name
thereto by like order; and each of them acknowledged the
execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and
the free and voluntary act and deed of said corporation,
for the uses and purposes therein set forth.

In Witness Whereof, I have hereunto set my hand and
affixed my official seal this 5th day of April, 1993.

                              /s/ Gloria K. Bryant
                              Gloria K. Bryant,
                              Notary Public

My Commission Expires:
  June 11, 1995

My County of Residence is:
  Marion

(Notarial Seal)

State of Illinois    )
                     )  ss.:
County of Cook       )

On this 2nd day of April, in the year 1993, before me, a
Notary Public in and for the County and State aforesaid,
personally came Richard Y. Guthrie, Senior Vice-
President, and Robert M. Selangowski, Assistant
Secretary, of American National Bank and Trust Company of
Chicago, one of the corporations described in and which
executed the foregoing instrument, to me personally known
and known to me personally to be such Senior Vice-
President and Assistant Secretary, respectively. Said
Richard Y. Guthrie and Robert M. Selangowski, being by me
severally sworn did depose and say that the said Richard
Y. Guthrie resides in Evanston, Illinois, and that the
said Robert M. Selangowski resides in Lansing, Illinois;
that said Richard Y. Guthrie is Senior Vice-President and
said Robert M. Selangowski is Assistant Secretary of said
American National Bank and Trust Company of Chicago; that
each of them knows the corporate seal of said
corporation; that the seal affixed to said instrument and
bearing the name of said corporation is such corporate
seal; that it was so affixed by authority of the Board of
Directors of said corporation; that each of them signed
his name thereto by like authority; and each of them
acknowledged the execution of said instrument on behalf
of said corporation to be his free and voluntary act and
deed and the free and voluntary act and deed of said
corporation, for the uses and purposes therein set forth.

In Witness Whereof, I have hereunto set my hand and
affixed my official seal this 2nd day of April, 1993.

                           /s/ Bernadette G. Janairo
                           Bernadette G. Janairo,
                           Notary Public

My Commission Expires: May 22, 1994

My County of Residence is:
  Cook

(Notarial Seal)

                        This instrument was prepared by
                                Marcus E. Woods,
                                Attorney at Law

<PAGE>

                                                                   Exhibit 4.4.7

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                      TO

                       AMERICAN NATIONAL BANK AND TRUST
                              COMPANY OF CHICAGO
                                                  TRUSTEE

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

                      THIRTY-SEVENTH SUPPLEMENTAL INDENTURE

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

                         DATED AS OF OCTOBER 1, 1993

                      ESTABLISHING FIRST MORTGAGE BONDS,

                            5.40% SERIES, DUE 2017

                               TABLE OF CONTENTS*

                                       of

                      THIRTY-SEVENTH SUPPLEMENTAL INDENTURE

                                       of

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                PAGE
                                                                ----
Parties..................................................         1
Recitals.................................................         1
Section 1   Granting clauses.............................         3
              Part I   Electric Distributing Systems.....         4
              Part II  Steam and Hot Water Distributing
                         Systems.........................         5
              Part III Indeterminate Permits and
                         Franchises......................         5
              Part IV  Other Property....................         5
            General and after-acquired title.............         6
Section 2   Designation of Thirty-Fifth series of bonds
              and kind and denominations thereof.........         7
            Designation of Company or American National
              Bank and Trust Company of Chicago as paying
              agent......................................         7
            Purpose of bonds.............................         7
            Redemption of bonds..........................         8
            Exchange of bonds............................        12
            Transfer of bonds............................        13
            Series limited to $24,650,000................        13
Section 3   Form of fully registered bond................        13
            Form of Trustee's certificate on bonds.......        16
Section 4   Temporary bonds..............................        19
Section 5   Payment of principal and interest; credits...        19
Section 6   Annual Payments for Maintenance and Improvement
              Fund.......................................        20
Section 7   Compliance with Section 47 of Original Mortgage
              with respect to dividend restrictions......        20
Section 8   Acceptance of trusts by Trustee and conditions
              of acceptance..............................        20
_________________________
*Table of Contents is not part of the Thirty-Seventh
Supplemental Indenture and should not be considered such.
It is included herein only for purposes of convenient
reference.

                                                                PAGE
                                                                ----
Section 9   Successors and assigns.......................        20
Section 10  Limitation of rights hereunder...............        21
Section 11  Compliance with terms, provisions and
              conditions of Mortgage.....................        21
Section 12  Execution in counterparts....................        21
Testimonium..............................................        22
Signatures and Seals.....................................        22
Acknowledgements.........................................        23

                                       ii

THIS THIRTY-SEVENTH SUPPLEMENTAL INDENTURE, dated as of
October 1, 1993, between INDIANAPOLIS POWER & LIGHT
COMPANY, a corporation of the State of Indiana,
hereinafter sometimes called the "Company," party of the
first part, and AMERICAN NATIONAL BANK AND TRUST COMPANY
OF CHICAGO, a national banking association, as Trustee,
hereinafter sometimes called the "Trustee," party of the
second part;

WHEREAS, the Company by a Mortgage and Deed of Trust
(hereinafter sometimes called the "Original Mortgage"
when referred to as existing prior to any supplement
thereto or modification thereof, and the "Mortgage" when
referred to as now or heretofore supplemented and
modified) dated as of May 1, 1940, made to said American
National Bank and Trust Company of Chicago, as Trustee,
to secure the payment of the bonds issued from time to
time under the Mortgage for the purposes of and subject
to the limitations specified in the Mortgage, and to
secure the performance of the covenants therein
contained, conveyed to the Trustee thereunder upon
certain trusts, terms and conditions, and with and
subject to certain provisos and covenants therein
contained, all and singular the property, rights and
franchises which the Company then owned or should
thereafter acquire, excepting the property expressly
excepted by the terms of the Original Mortgage or any
indenture supplemental thereto, to which Mortgage
reference is hereby made for greater certainty; and

WHEREAS, the Original Mortgage has been supplemented and
modified by supplemental indentures dated as of May 1,
1942, as of February 1, 1948, as of April 1, 1949, as of
October 1, 1949, as of February 1, 1951, as of March 1,
1953, as of June 1, 1956, as of March 1, 1958, as of
October 1, 1960, as of August 1, 1964, as of April 1,
1966, as of May 1, 1967, as of May 1, 1968, as of October
1, 1970, as of March 1, 1972, as of March 15, 1973, as of
February 15, 1974, as of August 15, 1974, as of September
15, 1975, as of June 1, 1976, as of July 1, 1976, as of
August 1, 1977, as of September 1, 1978, as of August 1,
1981, as of November 1, 1983, as of November 1, 1984, as
of December 1, 1984, as of September 1, 1985, as of
October 1, 1986, as of June 1, 1989, as of August 1,
1989, as of October 15, 1991, as of August 1, 1992 and
as of April 1, 1993;

WHEREAS, Section 8 of the Original Mortgage provides,
among other things, that the form of each series of bonds
(other than the initial issue of bonds) issued thereunder
shall be established by an indenture supplemental thereto
authorized by resolution of the Board of Directors of the
Company, and that the form of each series, as established
by the Board of Directors, shall specify the descriptive
title of the bonds and various other terms thereof,
and may also contain such other provisions as the Board
of Directors may, in its discretion, cause to be inserted
therein expressing or referring to the terms and conditions
upon which such bonds are to be issued and secured under the
Original Mortgage or any indenture supplemental thereto
or in modification thereof; and

WHEREAS, the Company has entered into a Loan Agreement,
dated as of October 1, 1993 (hereinafter called the "Loan
Agreement") with the City of Petersburg, Indiana (the
"City"), in order to obtain funds for the refunding of
the aggregate principal amount of Twenty Four Million Six
Hundred Fifty Thousand Dollars ($24,650,000) of the
City's Pollution Control Revenue Bonds, Series 1977
(Indianapolis Power & Light Company Project) issued by
the City pursuant to a related loan agreement to pay a
portion of the cost of acquisition, construction,
installation and equipping by the Company of certain
pollution control facilities (the "Facilities"), and
pursuant to the Loan Agreement the Company has agreed to
issue a series of its bonds under the Mortgage and this
Thirty-Seventh Supplemental Indenture in order to
evidence and secure its indebtedness under the Loan
Agreement; and

WHEREAS, the Company now desires to provide for the
establishment, execution, authentication and delivery
under the Mortgage of bonds of a series to be known as
its "First Mortgage Bonds, 5.40% Series, due 2017" (the
bonds of said series being hereinafter sometimes referred
to as the "2017 PC Bond"), limited to the aggregate
principal amount of Twenty Four Million Six Hundred Fifty
Thousnd Dollars ($24,650,000); and

WHEREAS, all things necessary to make the 2017 PC Bond
hereinafter described, when duly executed by the Company
and authenticated and delivered by the Trustee, a valid,
binding and legal obligation of the Company, and to make
this Thirty-Seventh Supplemental Indenture a valid and
binding agreement supplemental to the Original Mortgage,
have been done and performed; and

WHEREAS, the execution and delivery by the Company of
this Thirty-Seventh Supplemental Indenture, and the terms
of the 2017 PC Bond, have been duly authorized by the
Board of Directors of the Company by appropriate
resolutions of said Board; and

WHEREAS, it is provided in and by the Original Mortgage
that the Company will execute and deliver such further
instruments and do such further acts as may be necessary
or proper to carry out more effectually the purposes of
the Mortgage, and to make subject to the lien thereof any
property thereafter acquired and intended to be subject
to the lien thereof; and

WHEREAS, the Company has, since the date of execution and
delivery of the Original Mortgage, purchased and acquired
property and desires by this Thirty-Seventh Supplemental
Indenture specifically to convey to the Trustee such
property for the better protection and security of the
bonds issued and to be issued under the Original
Mortgage, or any indenture supplemental thereto;

NOW, THEREFORE, THIS INDENTURE WITNESSETH that, in
consideration of the premises and of the acceptance or
purchase of the 2017 PC Bond by the registered owners
thereof, and of the sum of one dollar, lawful money of
the United States of America, to the Company duly paid by
the Trustee at or before the execution and delivery of
this Thirty-Seventh Supplemental Indenture, the receipt
whereof is hereby acknowledged, the Company and the
Trustee, respectively, have entered into, executed and
delivered this Thirty-Seventh Supplemental Indenture, for
the uses and purposes hereinafter expressed, that is to
say:

Section 1. The Company has granted, bargained, sold,
released, conveyed, assigned, transferred, mortgaged,
pledged, set over and confirmed, and by these presents
does grant, bargain, sell, release, convey, assign,
transfer, mortgage, pledge, set over and confirm
(subject, however, to permitted encumbrances as defined
in the Original Mortgage), unto said American National
Bank and Trust Company of Chicago, as Trustee, as herein
provided, and its successors in the trusts declared in
the Original Mortgage and herein, all of the property,
real, personal and mixed, tangible and intangible, of
every kind, character and description which the Company
has acquired since the execution and delivery of the
Original Mortgage and now owns (except property, rights
and assets of a character similar to that excluded from
the lien and operation of the Mortgage by the Granting
Clauses of the Original Mortgage, which property, rights
and assets are excluded from the lien and operation of
the Mortgage only to the extent provided therein),
including, but without otherwise limiting the generality
of the foregoing, the following described property
situated within the State of Indiana:

                        PART I.

            ELECTRIC DISTRIBUTING SYSTEMS.

All electric distributing systems of the Company acquired
by it after May 1, 1940, the date of the Original
Mortgage, and located in the Counties of Bartholomew,
Boone, Daviess, Greene, Hamilton, Hancock, Hendricks,
Johnson, Knox, Madison, Marion, Monroe, Morgan, Owen,
Pike, Putnam, Shelby and Sullivan, State of Indiana; and
any additions to or extensions of any such systems,
together with the buildings, erections, structures,
transmission lines, power stations, sub-stations,
engines, boilers, condensers, pumps, turbines, machinery,
tools, conduits, manholes, insulators, dynamos, motors,
lamps, cables, wires, poles, towers, cross-arms, piers,
abutments, switchboard equipment, meters, appliances,
instruments, apparatus, appurtenances, maps, records,
ledgers, contracts, facilities and other property or
equipment used or provided for use in connection with the
construction, maintenance, repair and operation thereof;
together also with all of the rights, privileges, rights-
of-way, franchises, licenses, grants, liberties,
immunities, ordinances, permits and easements of the
Company in respect of the construction, maintenance,
repair and operation of said systems.

                    PART II.

      STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

All the steam and hot water distributing systems acquired
by the Company after May 1, 1940, the date of the
Original Mortgage, and located in the City of
Indianapolis, Marion County, Indiana, and any additions
to or extensions of any such systems; together with the
buildings, erections, structures, boilers, heaters,
engines, tanks, pipe lines, mains, connections, service
pipes, meters, tools, instruments, appliances, apparatus,
facilities, machinery and other property and equipment
used or provided for use in the construction,
maintenance, repair and operation thereof; and together
also with all of the rights, privileges, rights-of-way,
franchises, licenses, grants, liberties, immunities,
ordinances, permits and easements of the Company in
respect of the construction, maintenance, repair and
operation of said systems.

                       PART III.

         INDETERMINATE PERMITS AND FRANCHISES.

All indeterminate permits, franchises, ordinances,
licenses, and other authorizations by or from any state,
county, municipality, or other governmental authority,
acquired by the Company after May 1, 1940, the date of
the Original Mortgage, including particularly, but not
limited to, any indeterminate permits
under the Public Service Commission Act of the State of
Indiana, and all Acts amendatory thereof and supplemental
thereto, and all right, title and interest therein now
owned by the Company, and all renewals, extensions and
modifications of said indeterminate permits, franchises,
ordinances, licenses, and other authorizations, and of
the indeterminate permits, franchises, ordinances,
licenses, and other authorizations referred to in Part
VII of the Granting Clauses of the Original Mortgage.

                       PART IV.

                   OTHER PROPERTY.

All other property, whether real, personal or mixed
(except any in the Mortgage expressly excepted), now
owned by the Company and wheresoever situated, including
(without in anywise limiting or impairing by the
enumeration of the same the scope and intent of the
foregoing or of any general description contained in the
Mortgages) all lands, flowage rights, water rights,
flumes, raceways, dams, rights-of-way and roads; all
plants for the generation of electricity by water, steam
and/or other power, power houses, telephone systems,
water systems, steam heat and power plants, hot water
plants, sub-stations, transmission lines, distribution
systems, bridges, culverts and tracts; all offices,
buildings and structures and the equipment thereof; all
machinery, engines, boilers, dynamos, machines,
regulators, meters, transformers, generators and motors;
all appliances whether electrical, gas or mechanical,
conduits, cables and lines; all pipes whether for water,
steam heat and power, or other purposes; all mains and
pipes, service pipes, fittings, valves and connections,
poles, wires, tools, implements, apparatus, furniture and
chattels; all municipal franchises, indeterminate
permits, and other permits; all lines for the
transportation, transmission and/or distribution of
electric current, steam heat and power or water for any
purpose, including towers, poles, wires, cables, pipes,
conduits and all apparatus for use in connection
therewith; all real estate, lands, leases, leaseholds;
all contracts, whether heat, light, power, water or
street lighting contracts; all easements, servitudes,
licenses, permits, rights, powers, franchises,
privileges, rights-of-way and other rights in or relating
to real estate or the occupancy of the same and (except
as hereinafter or in the Mortgage expressly excepted) all
the right, title and interest of the Company in and to
all other property of any kind or nature appertaining to
and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore described or referred to;

Together with all and singular the tenements,
hereditaments and appurtenances belonging or in anywise
appertaining to the aforesaid property or any part
thereof, with the reversion and reversions, remainder and
remainders and (subject to the provisions of Section 64
of the Original Mortgage), the tolls, rents, revenues,
issues, earnings, income, product and profits thereof,
and all the estate, right, title and 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, indeterminate permits, franchises,
ordinances, licenses and other authorizations and every
part and parcel thereof.

Section 2. There shall be and is hereby established a
series of bonds, limited in aggregate principal amount to
Twenty Four Million Six Hundred Fifty Thousand Dollars
($24,650,000) to be issued under and secured by the
Mortgage, to be designated "5.40% Series, due 2017", each
of which shall also bear the descriptive title "First
Mortgage Bonds"; said bonds shall mature on August 1,
2017, and shall be issued only as fully registered bonds
without coupons in the denomination of five thousand
dollars and any larger denomination which is a whole
multiple of five thousand dollars; they shall bear
interest from the beginning of the current interest
period during which each bond is dated, at the rate per
annum designated in the title thereof, payable semi-
annually, on February 1 and August 1 of each year (except
that the first interest payment thereon shall be made
February 1, 1994 for the four-month period from October
1, 1993 through January 31, 1994); and the principal of,
premium, if any, and interest on said bond shall be
payable in lawful money of the United States of America
at the office of the Company in the City of Indianapolis,
Indiana, or, if no such office is maintained, at American
National Bank and Trust Company of Chicago, which is
hereby designated and appointed the office and agency of
the Company in the City of Chicago, Illinois, for the
payment of the principal of, premium, if any, and
interest on the 2017 PC Bond, if necessary, and for the
registration, transfer and exchange of such bond as
hereinafter provided; all reference herein to the office
or agency of the Company in the City of Chicago,
Illinois, for the payment of the principal of, premium,
if any, and interest on the 2017 PC Bond, or the
registration, transfer or exchange thereof, being to
American National Bank and Trust Company of Chicago. In
event of the resignation or inability to act of American
National Bank and Trust Company of Chicago, then a
successor agent for all such purposes in the City of
Chicago, Illinois, shall be appointed by the Board of
Directors of the Company.

The 2017 PC Bond shall be dated as of the date of
authentication thereof, except as otherwise provided in
Section 10 of the Original Mortgage.

The 2017 PC Bond will be issued to evidence and secure a
loan to the Company by the City pursuant to the Loan
Agreement of certain funds to be acquired by the City
through the issuance of City of Petersburg, Indiana,
Pollution Control Refunding Revenue Bonds, Series 1993B
(Indianapolis Power & Light Company Project)(the "Series
1993B Bonds"), authenticated and delivered under and
pursuant to an Indenture of Trust dated as of October 1,
1993 (hereinafter called the "City Indenture"), by and
between the City and National City Bank, Indiana, as
Trustee (the "City Trustee").  Pursuant to the City's
pledge and assignment of the Loan Agreement, as set forth
in the City Indenture, the 2017 PC Bond shall be issued
to the City and assigned to the City Trustee.  All of the
proceeds of the Series 1993B Bonds will be used for the
refunding of the aggregate principal amount of Twenty
Four Million Six Hundred Fifty Thousand Dollars
($24,650,000) of the City's Pollution Control Revenue
Bonds, Series 1977 (Indianapolis Power & Light Company
Project) issued by the City pursuant to applicable loan
agreement.

Upon the notice and in the manner and with the effect
provided in this Section 2, the 2017 PC Bond shall be
redeemable prior to the maturity thereof under any one or
more of the following circumstances:

(a)  In whole, at the option of the Company, if the
Facilities or Unit 3 of the Petersburg Generating Station
serviced by the Facilities shall have been damaged or
destroyed (i) to such extent that they cannot be
reasonably expected, in the opinion of the Company, to be
restored within a period of six (6) months to the
condition thereof immediately preceding such damage or
destruction, or (ii) to such extent that the Company, in
its reasonable opinion, is thereby prevented from
carrying on its normal operations for a period of six (6)
months or more, or (iii) to such extent that the
restoration thereof would not be, taking into
consideration the net proceeds of any insurance payable
as a result of such damage or destruction, economic in
the reasonable opinion of the Company.

(b)  In whole, at the option of the Company, if title to,
or the temporary use of, all or substantially all of the
Facilities or Unit 3 of the Petersburg Generation Station
serviced by the Facilities, shall have been taken, under
the exercise of the power of eminent domain, or should
any governmental body or agency exercise any right which
it may have to purchase or designate a purchaser of the
same, or should such property be sold to any governmental
body or agency so that the result of such taking or
takings is that (i) the Company, in its reasonable
opinion, is thereby prevented from carrying on its normal
operations of either the Facilities or such Unit 3 for a
period of six (6) months or more, (ii) the restoration
required as a result of the taking cannot be reasonably
expected, in the opinion of the Company, to be completed
in a period of six (6) months, or (iii) the restoration
thereof, taking into consideration the net proceeds from
such eminent domain award, would not be economic in the
reasonable opinion of the Company.

(c)  In whole, at the option of the Company, if, as a
result of any changes in the Constitution or law of the
State of Indiana or the Constitution or law of the United
States of America or of legislative or administrative
action (whether state or federal) or by final decree,
judgment or order of any court or administrative body
(whether state or federal) entered after the contest
thereof by the Company in good faith or the decision of
the Company not to contest the same, the Loan Agreement
shall, in the reasonable opinion of counsel for the
Company, have become void or unenforceable or impossible
of performance in accordance with the intent and purpose
of the parties as expressed in the Loan Agreement; or
unreasonable burdens or excessive liabilities shall, in
the reasonable opinion of the Company, have been imposed
upon the City or the Company, with respect to the
Facilities or operation thereof, including without
limitation federal, state or other ad valorem, property,
income or other taxes not being imposed on the date of
the Loan Agreement other than ad valorem taxes presently
levied upon privately owned property used for the same
general purpose as the Facilities.

(d)  In whole, at the option of the Company, if changes
in the economic availability of raw materials, operating
supplies or facilities necessary for the operation of the
Facilities or the operation of Unit 3 of the Petersburg
Generating Station serviced by the Facilities shall have
occurred or technological or other changes shall have
occurred which render the Facilities or said Unit 3
uneconomic for use in the reasonable opinion of the
Company.

(e)  In part, at the option of the Company, to the extent
of net proceeds received from any condemnation award,
taking or sale as stated herein, if title to, or the
temporary use of any portion of the Facilities shall have
been taken under the exercise of the power of eminent
domain, or should any governmental body or agency
exercise any right it may have to purchase or designate a
purchaser of the same, or should such property be sold to
any governmental body or agency; provided the Company
shall furnish to the City and the City Trustee a
certificate of an Independent Engineer (as defined in the
Loan Agreement) selected by the Company stating (i) that
the property forming the part of the Facilities that was
taken by such condemnation, taking or sale is not
essential to the character or significance of the
Facilities, or (ii) that the Facilities have been
restored to a condition substantially equivalent to their
condition prior to the taking by such condemnation,
taking or sale proceedings, or (iii) that improvements
have been acquired which are suitable for the operation
of the Facilities.

(f)  In the event all or substantially all of the
mortgaged and pledged property under the Mortgage, or all
or substantially all such property used in the business
of generating, manufacturing, transporting, transmitting,
distributing or supplying electricity, should be taken by
exercise of the power of eminent domain, or should any
governmental body or agency exercise any right which it
may have to purchase or designate a purchaser of the
same, or should such property be sold to any governmental
body or agency, the Company shall be obligated to redeem
the 2017 PC Bond outstanding as promptly as possible in
accordance with paragraph B of Section 69 of the Original
Mortgage.

(g)  In the event that the Company is notified by the
City Trustee that (i) an event of default under the City
Indenture has occurred and is continuing, and (ii) the
City Trustee has declared the principal of all the Series
1993B Bonds then outstanding immediately due and payable
pursuant to the City Indenture, the Company shall call
for redemption, on a redemption date selected by it not
later than thirty (30) days following the date on which
such notice is mailed, the 2017 PC Bond outstanding, and
shall on such redemption date redeem the same; provided,
however, that such requirement of redemption shall be
deemed waived, if prior to the date fixed for such
redemption of the 2017 PC Bond (x) such event of default
is waived or cured as set forth in the City Indenture, or
(y) there shall have occurred any completed default (as
defined in the Mortgage) which affects any bond of any
series outstanding under the Mortgage and which completed
default has not been cured and made good prior to such
redemption date, it being the intent of this proviso
that, in lieu of such right to redemption, the holder of
the 2017 PC Bond shall be entitled only to such rights as
are available to the holders of bonds of any other series
outstanding under the Mortgage in the event of such
completed default; and in case of any subsequent
occurrence or continuance of the events described in (i)
and (ii) of this Section 2(g), the Company shall have the
same obligation (subject to the same proviso) to redeem
the 2017 PC Bond.

(h) In the event the City Trustee notifies the Company
and the City that the interest payable on the Series
1993B Bonds held by persons other than a "substantial
user" or a "related person" as those terms are used in
Section 147(a)(2) of the Internal Revenue code of 1986,
as amended, has been determined by a court of competent
jurisdiction or a formal ruling of the Internal Revenue
Service to be subject to federal income taxation by
reason of a breach by the Company of any covenant,
agreement or representation in the Loan Agreement, the
Company shall call the 2017 PC Bond then outstanding to
be redeemed on the next succeeding interest payment date
within one hundred eighty (180) days after the date of
such notice; provided, however, that such requirement of
redemption, whether in whole or in part shall be deemed
waived if, prior to the date fixed for redemption of the
2017 PC Bond pursuant to this Section 2(h), there shall
have occurred any completed default (as defined in the
Mortgage) which affects any bond of any series
outstanding under the Mortgage and which completed
default has not been cured and made good prior to such
redemption date, it being the intent of this proviso
that, in lieu of such right to redemption, the holder of
the 2017 PC Bond shall be entitled only to such rights as
are available to the holders of bonds of any other series
outstanding under the Mortgage in the event of such
completed default; but when any such completed default
shall have been cured and made good, if interest on the
Series 1993B Bonds shall still be taxable as described
above, the Company shall have the same obligation
(subject to the same proviso) to redeem the 2017 PC Bond
on the next succeeding interest payment date within one
hundred eighty (180) days after the curing and making
good of such completed default; provided further, that
the Company may call for redemption such portion of the
2017 PC Bond, which in the written opinion of an attorney
or firm of attorneys of nationally recognized standing on
the subject of municipal bonds, would allow the City
Trustee to redeem the Series 1993B Bonds in part, which
redemption would have the result that the interest
payable on the Series 1993B Bonds remaining outstanding
after such redemption in part would not be subject to
federal income taxation in the hands of persons other
than a "substantial user" or a "related person" as those
terms are used in Section 147(a)(2) of the Internal
Revenue Code of 1986, as amended.

In case of redemption of 2017 PC Bond in whole for the
purpose of prepayment under the Loan Agreement pursuant
to subsections (a), (b), (c), (d), (f), (g), or (h)
above, the amounts payable upon redemption of 2017 PC
Bond shall be a sum sufficient, together with other funds
deposited with the City Trustee and available for such
purpose, to pay the principal of and interest on the 2017
PC Bond then outstanding and to pay all reasonable and
necessary fees and expenses of the City Trustee accrued
and to accrue through final payment of the 2017 PC Bond.

In case of redemption in part pursuant to (e) or (h)
above, the amount payable by the Company under this
Thirty-Seventh Supplemental Indenture, the Loan Agreement
and the 2017 PC Bond shall be a sum sufficient, together
with other funds deposited with the Trustee and available
for such purpose, to pay the principal of and interest on
the 2017 PC Bond so to be redeemed, which sum together
with other funds deposited with the City Trustee and
available for such purpose shall be sufficient to pay the
principal of, premium, if any, and interest on the Series
1993B Bonds and to pay all reasonable and necessary fees
and expenses of the City Trustee accrued and to accrue
through such partial prepayment.

The 2017 PC Bond and the Series 1993B Bonds shall be
redeemable at any time within one hundred eighty (180)
days following the event or events described as giving
rise to an option of the Company to redeem them in
subsections (a), (b), (c), (d) or (e) above.

To exercise any of the options granted to redeem the 2017
PC Bond in whole or in part or to comply with any
obligations to redeem the 2017 PC Bond in whole or in
part imposed in this Section 2, the Company shall give
written notice of the date of redemption to the City
Trustee, which date shall be not less than thirty (30)
days nor more than ninety (90) days from the date the
notice is mailed.  No further notice, by publication or
otherwise, shall be required for redemption of the 2017
PC Bond, and the requirements of Section 59 of the
Mortgage for notice by newspaper publication shall not
apply to the 2017 PC Bond.

At the option of the holder, the 2017 PC Bond, upon
surrender thereof at the office or agency of the Company
in Chicago, Illinois, together with a written instrument
of transfer in form approved by the Company duly executed
by the holder or by his duly authorized attorney, shall
be exchangeable for a like aggregate principal amount of
fully registered bonds of the same series of other
authorized denominations.

The 2017 PC Bond will be nontransferable except to the
City Trustee and successors thereto, if any, and to the
Company.  To the extent that it is transferable, it is
transferable by the registered holder thereof, in person
or by attorney duly authorized in writing, on the books
of the Company at the office or agency of the Company in
the City of Chicago, Illinois, upon surrender thereof for
cancellation at said office and upon presentation of a
written instrument of transfer duly executed.  Thereupon,
the Company shall issue in the name of the transferee,
and the Trustee shall authenticate and deliver, a new
registered 2017 PC Bond or Bonds, in authorized
denominations, of equal aggregate principal amount.  Any
such transfer shall be subject to the terms and
conditions specified in the Mortgage and in this Thirty-
Seventh Supplemental Indenture.

The Company shall not be required to transfer or exchange
the 2017 PC Bond for a period of ten (10) days next
preceding any interest payment date of such bond.

Except as set forth herein, no charge shall be made upon
any transfer or exchange of any of the 2017 PC Bond other
than for any tax or taxes or other governmental charge
required to be paid by the Company.

The 2017 PC Bond shall be limited to an aggregate
principal amount of Twenty Four Million Six Hundred Fifty
Thousand Dollars ($24,650,000) and shall be issued under
the provisions of Article VII of the Original Mortgage.

Section 3.  The 2017 PC Bond, and the Trustee's
Certificate to be endorsed thereon, shall be in the
following forms, respectively:

[form of face of 2017 PC Bond]

This First Mortgage Bond, 5.40% Series, due 2017
(hereinafter called the "2017 PC Bond") is not
transferable except to a successor trustee under the
Indenture of Trust dated as of October 1, 1993, between
the City of Petersburg, Indiana and National City Bank,
Indiana, as the Trustee, or to Indianapolis Power & Light
Company.

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 5.40% Series, Due 2017
     Due August 1, 2017

No.                                              $

INDIANAPOLIS POWER & LIGHT COMPANY, a corporation of the
State of Indiana (hereinafter called the "Company"), for
value received, hereby promises to pay to National City
Bank, Indiana, as the Trustee (hereinafter called the
"City Trustee") under the Indenture of Trust between the
City of Petersburg, Indiana (the "City") and the City
Trustee, dated as of October 1, 1993, (the "City
Indenture") or registered assigns, on August 1, 2017, at
the office of the Company, in the City of Indianapolis,
State of Indiana, or if no such office is maintained at
the time by the Company, then at the office or agency of
the Company for such purpose in the City of Chicago,
State of Illinois, Twenty Four Million Six Hundred Fifty
Thousand Dollars ($24,650,000) in lawful money of the
United States of America, and to pay to the registered
owner hereof interest thereon from the first day of
February or the first day of August next preceding the
date of this 2017 PC Bond (except that the first interest
payment hereunder shall be made February 1, 1994 for the
four-month period from October 1, 1993 through January
31, 1994), at the rate of five and forty hundredths per
centum (5.40%) per annum in like lawful money at said
office or agency, on February 1 and August 1 in each
year, until the Company's obligation with respect to the
payment of such principal shall have been discharged.
The interest payable hereunder on February 1 or August 1
will be paid to the registered owner of this 2017 PC Bond
at or before the close of business on such dates, or if
such date shall be a Saturday, Sunday, holiday or a day
on which banking institutions in the City of Indianapolis
or the city of any paying agents are authorized by law to
close, on or before the close of business on the next
succeeding business day on which such banking
institutions are open for business.

REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS 2017
PC BOND SET FORTH ON THE REVERSE HEREOF.  SUCH FURTHER
PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE SAME EFFECT
AS THOUGH FULLY SET FORTH IN THIS PLACE.

No recourse shall be had for the payment of the principal
of or interest on this 2017 PC 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, as such, 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, as such, being waived and
released by the terms of the Mortgage, as herein defined.

This 2017 PC Bond shall not become obligatory until
American National Bank and Trust Company of Chicago, the
Trustee under the Mortgage, as herein defined, or its
successor thereunder, shall have signed the form of
certificate endorsed hereon.

IN WITNESS WHEREOF, Indianapolis Power & Light Company
has caused this 2017 PC Bond to be signed in its name by
its President or one of its Vice-Presidents, by his
signature or a facsimile thereof, and its corporate seal
to be affixed hereon, attested by its Secretary or one of
its Assistant Secretaries, by his signature or a
facsimile thereof.

                     INDIANAPOLIS POWER & LIGHT COMPANY

Dated:               By_______________________________________
                              Vice-President

Attest:

By_____________________________
           Secretary

[Form of Trustee's Certificate on 2017 PC Bond]

     Trustee's Certificate

This 2017 PC Bond is one of the bonds, of the series
herein designated, provided for in the within-mentioned
Mortgage and Thirty-Seventh Supplemental Indenture
thereto.

                    AMERICAN NATIONAL BANK AND
                      TRUST COMPANY OF CHICAGO
                                            Trustee

                    By______________________________________
                             Authorized Signature

[Form of Reverse Side of 2017 PC Bond]

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 5.40% Series, due 2017
     Due August 1, 2017

This 2017 PC Bond is one of an issue of bonds of the
Company, issuable in series, and is one of a series known
as its First Mortgage Bonds, 5.40% Series, due 2017
(herein called the "2017 PC Bond") limited in aggregate
principal amount to Twenty Four Million Six Hundred Fifty
Thousand Dollars ($24,650,000) and established by a
Thirty-Seventh Supplemental Indenture dated as of October
1, 1993, all bonds of all series issued and to be issued
under and equally secured (except insofar as any sinking
or other fund, established in accordance with the
provisions of the Mortgage hereinafter mentioned, may
afford additional security for the bonds of any
particular series) by a Mortgage and Deed of Trust, dated
as of May 1, 1940, executed by the Company to American
National Bank and Trust Company of Chicago, as the
Trustee (which Mortgage and Deed of Trust as supplemented
and modified by all supplemental indentures thereto is
hereinafter referred to as the "Mortgage"), to which
Mortgage reference is made for a description of the
property mortgaged and pledged, the nature and extent of
the security, the rights of the bearers or registered
owners of the bonds in respect of such security, the
duties and immunities of the Trustee and terms and
conditions upon which the bonds are secured.

This 2017 PC Bond evidences and secures a loan made by
the City to the Company, pursuant to a Loan Agreement,
dated as of October 1, 1993, between the City and the
Company (the "Loan Agreement").  In order to obtain funds
for such loan, the City, contemporaneously with the issue
of this 2017 PC Bond, will issue Twenty Four Million Six
Hundred Fifty Thousand Dollars ($24,650,000) principal
amount of its Pollution Control Refunding Revenue Bonds,
Series 1993B (Indianapolis Power & Light Company Project)
(the "City Bonds") under and pursuant to the City
Indenture.  The City Bonds are payable from payments made
by the Company of principal of, premium, if any, and
interest on this 2017 PC Bond and from moneys in the Bond
Fund created under the City Indenture.  The obligation of
the Company to pay the principal of, premium, if any, and
interest on this 2017 PC Bond shall be discharged to the
extent that any moneys in said Bond Fund are available
for payments on the City Bonds and are directed by the
Company to be applied thereto, all as provided in the
Thirty-Seventh Supplemental Indenture.

This 2017 PC Bond is not subject to redemption except as
provided in Section 2 of the Thirty-Seventh Supplemental
Indenture, to which reference is made for full
description of redemption provisions.

With the consent of the Company and to the extent
permitted by and as provided in the Mortgage, the rights
and obligations of the Company and/or of the holders of
the bonds and/or coupons and/or the terms and provisions
of the Mortgage and/or any instruments supplemental
thereto may be modified or altered by affirmative vote of
the holders of at least sixty-six and two-thirds per
centum (66-2/3%) in principal amount of the bonds
affected by such modification or alteration then
outstanding under the Mortgage (excluding bonds
disqualified from voting by reason of the Company's
interest therein as provided in the Mortgage); provided
that no such modification or alteration shall permit the
extension of the maturity of the principal of this 2017
PC Bond or the reduction in the rate of interest hereon
or any other modification in the terms of payment of such
principal or interest without the consent of the holder
hereof.  The principal hereof may be declared or may
become due and payable prior to the stated date of
maturity hereof, on the conditions, in the manner and at
the time set forth in the Mortgage, upon the occurrence
of a completed default as in the Mortgage provided.

No reference herein to the Mortgage, and no provision of
this 2017 PC Bond or of the Mortgage, shall alter or
impair the obligation of the Company, which is absolute
and unconditional, to pay, subject to the provisions of
the Thirty-Seventh Supplemental Indenture, the principal
of, and premium, if any, and interest on this 2017 PC
Bond at the place, at the respective times and at the
rate and the manner herein prescribed.

This 2017 PC Bond is issuable only in full registered
form without coupons in denominations of Five Thousand
Dollars and any larger denomination which is a whole
multiple of Five Thousand Dollars.

This 2017 PC Bond will be nontransferable except to the
City Trustee and successors thereto, if any, and to the
Company.  To the extent that it is transferable, it is
transferable by the registered holder thereof, in person
or by attorney duly authorized in writing, on the books
of the Company at the office or agency of the Company in
the City of Chicago, Illinois, upon surrender thereof for
cancellation at said office and upon presentation of a
written instrument of transfer duly executed.  Thereupon,
the Company shall issue in the name of the transferee,
and the Trustee shall authenticate and deliver, a new
registered 2017 PC Bond or Bonds, in authorized
denominations, of equal aggregate principal amount.  Any
such transfer shall be subject to the terms and
conditions specified in the Mortgage and in the Thirty-
Seventh Supplemental Indenture.

[End of 2017 PC Bond Form]

Section 4. Until the 2017 PC Bond in definitive form is
ready for delivery, the Company may execute, and upon its
request in writing the Trustee shall authenticate and
deliver, in lieu thereof, fully registered 2017 PC Bond
in temporary form, as provided in Section 15 of the
Original Mortgage. Such bond may, in lieu of the
statement of the specific redemption prices required to
be set forth in such bond in definitive form, include a
reference to this Thirty-Seventh Supplemental Indenture
for a statement of such redemption prices.

Section 5. The Company covenants and agrees that it will
duly and punctually pay to the holder of the 2017 PC Bond
the principal thereof, premium, if any, and interest on
said bond at the dates and place and in the manner
mentioned therein; provided, however, that:

     (a)  The obligation of the Company to pay the
principal of, and premium, if any, and interest on the
2017 PC Bond shall be discharged to the extent that any
moneys in the Series 1993B Bond Account within the Bond
Fund created under and pursuant to the City Indenture are
available for the payment of the principal of, or
premium, if any, or interest on the Series 1993B Bonds
and are directed by the Company to be applied to the
payment thereof in the manner provided in the City
Indenture on or prior to the dates on which the Company
is required to pay the principal of, or premium, if any,
or interest on the 2017 PC Bond.

     (b)  Except as otherwise provided in this Section 5,
the principal amount of any Series 1993B Bond acquired by
the Company and delivered to the City Trustee, or
acquired by the City Trustee and cancelled, shall be
credited against the obligation of the Company to pay the
principal of the 2017 PC Bond.

As the principal of, premium, if any, and interest on the
2017 PC Bond is paid or deemed paid in full, and upon its
receipt by the Company, such bond shall be delivered to
the Trustee for cancellation.  The Company shall promptly
inform the Trustee of all payments made and credits
availed of with respect to its obligations on the 2017 PC
Bond.  The Trustee shall not be required to recognize any
payment made or credit availed of with respect to any
2017 PC Bond unless it has received (a) the bond for
cancellation by it, or (b) a certificate signed by a duly
authorized officer of the City Trustee specifying the
amount of such payment or credit and the principal amount
of the 2017 PC Bond with respect to which the payment or
credit was applied.  In the absence of receipt by the
Trustee of any 2017 PC Bond, any such certificate shall
be controlling and conclusive.

Section 6. The covenant of the Company to make annual
payments to the Trustee for a Maintenance and Improvement
Fund as contained in Section 41 of the Original Mortgage
and in the first twenty-four Supplemental Indentures to
the Original Mortgage creating the several series of
First Mortgage Bonds presently outstanding under such
Supplemental Indentures shall not apply to nor be for the
benefit of the 2017 PC Bond, and the Company reserves the
right, without any consent of, or other action by, the
holder of the 2017 PC Bond, to amend, modify or delete
the provisions of the Mortgage relating to such
Maintenance and Improvement Fund and by acceptance of the
2017 PC Bond the holder thereof waives any right or
privilege so to consent or take any other action with
respect thereto.

Section 7. The Company covenants that, so long as the
2017 PC Bond shall remain outstanding, it will comply
with all of the provisions of Section 47 of the Original
Mortgage, including the provisions with respect to
limitations on dividends and distributions and the
purchase and redemption of stock.

Section 8. The Trustee hereby accepts the trusts herein
declared, provided and created and agrees to perform the
same upon the terms and conditions herein and in the
Mortgage set forth and upon the following terms and
conditions:

The recitals contained herein and in the bonds shall be
taken as the statements of the Company and the Trustee
assumes no responsibility for the correctness of the
same. The Trustee makes no representations as to the
validity or adequacy of the security afforded hereby, or
as to the validity of this Thirty-Seventh Supplemental
Indenture or of the 2017 PC Bond issued hereunder.

Section 9. Whenever in this Thirty-Seventh Supplemental
Indenture either of the parties hereto is named or
referred to, this shall, subject to the provisions of
Article XVII of the Original Mortgage, be deemed to
include the successors or assigns of such party, and all
the covenants and agreements in this Thirty-Seventh
Supplemental Indenture contained by or on behalf of the
Company, or by or on behalf of the Trustee, shall,
subject as aforesaid, bind and inure to the benefit of
the respective successors and assigns of such parties,
whether so expressed or not.

Section 10. Nothing in this Thirty-Seventh Supplemental
Indenture expressed or implied, is intended or shall be
construed to confer upon, or to give to, any person, co-
partnership or corporation, other than the parties hereto
and the holders of the bonds and coupons outstanding
under the Mortgage, any right, remedy, or claim under or
by reason of this Thirty-Seventh Supplemental Indenture
or any covenant, condition or stipulation hereof; and all
the covenants, conditions, stipulations, promises and
agreements in this Thirty-Seventh Supplemental Indenture
contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto and of
the holders of the bonds and of the coupons outstanding
under the Mortgage.

Section 11. The Company covenants that all of the terms,
provisions and conditions of the Mortgage shall be
applicable to the 2017 PC Bond issued hereunder, except
as herein otherwise provided and except insofar as the
same may be inconsistent with the provisions of this
Thirty-Seventh Supplemental Indenture.

Section 12. This Thirty-Seventh Supplemental Indenture is
dated as of October 1, 1993, although executed and
delivered on the date of the acknowledgment hereof by the
Trustee; and shall be simultaneously executed and
delivered in several counterparts, and all such
counterparts executed and delivered, each as an original,
shall constitute but one and the same instrument.

In Witness Whereof, Indianapolis Power & Light Company,
party of the first part, has caused its corporate name to
be hereunto affixed and this instrument to be signed and
acknowledged by its President or a Vice-President, and
its corporate seal to be hereto affixed and attested by
its Secretary or an Assistant Secretary, for and in its
behalf, and American National Bank and Trust Company of
Chicago, party of the second part, as Trustee, has caused
its corporate name to be hereunto affixed and this
instrument to be signed and acknowledged by one of its
Vice-Presidents, and its corporate seal to be hereto
affixed and attested by one of its Assistant Secretaries,
all as of the day, month and year first above written.

                        Indianapolis Power & Light Company

Attest:                 By    /s/ Marcus E. Woods
                              Marcus E. Woods,
                              Vice-President
/s/ Clark L. Snyder
Clark L. Snyder,
Assistant Secretary

(Seal)

                         American National Bank and Trust
                           Company of Chicago

Attest:                  By  /s/ Ronald B. Bremen
                             Ronald B. Bremen,
                             Vice-President
/s/ Robert M. Selangowski
Robert M. Selangowski,
Assistant Secretary

(Seal)

State of Indiana     )
                     )  ss.:
County of Marion     )

On this 5th day of October, in the year 1993, before me,
a Notary Public in and for the County and State aforesaid,
personally came Marcus E. Woods, Vice-President, and
Clark L. Snyder, Assistant Secretary, of Indianapolis Power &
Light Company, one of the corporations described in and
which executed the foregoing instrument, to me personally
known and known to me personally to be such Vice-President,
and Assistant Secretary, respectively. Said Marcus E.
Woods and Clark L. Snyder being by me severally duly
sworn did depose and say that the said Marcus E. Woods
resides in Hendricks County, Indiana and the said
Clark L. Snyder resides in Marion County, Indiana; that
said Marcus E. Woods is Vice-President and said Clark L.
Snyder is Assistant Secretary of said Indianapolis Power
& Light Company; that each of them knows the corporate seal of
said corporation; that the seal affixed to said instrument
and bearing the name of said corporation is such corporate
seal; that is was so affixed by order of the Board of
Directors of said corporation; and that each of them signed his
name thereto by like order; and each of them acknowledged
the execution of said instrument on behalf of said corporation
to be his free and voluntary act and deed and the free and
voluntary act and deed of said corporation, for the uses
and purposes therein set forth.

In Witness Whereof, I have hereunto set my hand and
affixed my official seal this 5th day of October, 1993.

                                /s/ Dinah L. Kirkham
                                Dinah L. Kirkham,
                                Notary Public

My Commission Expires:
  June 23, 1996

My County of Residence is:
  Johnson

(Notarial Seal)

State of Illinois    )
                     )  ss.:
County of Cook       )

On this 4th day of October, in the year 1993, before me,
a Notary Public in and for the County and State
aforesaid, personally came Ronald B. Bremen, Vice-
President, and Robert M. Selangowski, Assistant
Secretary, of American National Bank and Trust Company of
Chicago, one of the corporations described in and which
executed the foregoing instrument, to me personally known
and known to me personally to be such Vice-President and
Assistant Secretary, respectively. Said Ronald B. Bremen
and Robert M. Selangowski, being by me severally sworn
did depose and say that the said Ronald B. Bremen resides
in Glencoe, Illinois, and that the said Robert M.
Selangowski resides in Lansing,Illinois; that said Ronald
B. Bremen is Vice-President and said Robert M.
Selangowski is Assistant Secretary of said American
National Bank and Trust Company of Chicago; that each of
them knows the corporate seal of said corporation; that
the seal affixed to said instrument and bearing the name
of said corporation is such corporate seal; that it was
so affixed by authority of the Board of Directors of said
corporation; that each of them signed his name thereto by
like authority; and each of them acknowledged the
execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and
the free and voluntary act and deed of said corporation,
for the uses and purposes therein set forth.

In Witness Whereof, I have hereunto set my hand and
affixed my official seal this 4th day of October, 1993.

                                /s/ Bernadette G. Janairo
                                Bernadette G. Janairo,
                                Notary Public

My Commission Expires: May 22, 1994

My County of Residence is:
  Cook

(Notarial Seal)

                        This instrument was prepared by
                                Marcus E. Woods,
                                Attorney at Law

<PAGE>

                                                                   Exhibit 4.4.8

                      INDIANAPOLIS POWER & LIGHT COMPANY

                                      TO

                       AMERICAN NATIONAL BANK AND TRUST
                              COMPANY OF CHICAGO
                                                TRUSTEE

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

                      THIRTY-EIGHTH SUPPLEMENTAL INDENTURE

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

                         DATED AS OF OCTOBER 1, 1993

                      ESTABLISHING FIRST MORTGAGE BONDS,

                            5.50% SERIES, DUE 2023

                               TABLE OF CONTENTS*

                                       of

                      THIRTY-EIGHTH SUPPLEMENTAL INDENTURE

                                       of

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                PAGE
                                                                ----
Parties..................................................         1
Recitals.................................................         1
Section 1   Granting clauses.............................         3
               Part I   Electric Distributing Systems....         4
               Part II  Steam and Hot Water Distributing
                          Systems........................         4
               Part III Indeterminate Permits and
                          Franchises.....................         5
               Part IV  Other Property...................         5
            General and after-acquired title.............         6
Section 2   Designation of Thirty-Sixth series of bonds
              and kind and denominations thereof.........         6
            Designation of Company or American National
              Bank and Trust Company of Chicago as paying
              agent......................................         7
            Purpose of bonds.............................         7
            Redemption of bonds..........................         8
            Exchange of bonds............................        12
            Transfer of bonds............................        13
            Series limited to $30,000,000................        13
Section 3   Form of fully registered bond................        13
            Form of Trustee's certificate on bonds.......        16
Section 4   Temporary bonds..............................        19
Section 5   Payment of principal and interest; credits...        19
Section 6   Annual Payments for Maintenance and Improvement
              Fund.......................................        20
Section 7   Compliance with Section 47 of Original Mortgage
              with respect to dividend restrictions......        20
Section 8   Acceptance of trusts by Trustee and conditions
              of acceptance..............................        20
Section 9   Successors and assigns.......................        21
Section 10  Limitation of rights hereunder...............        21
_________________________
*Table of Contents is not part of the Thirty-Eighth
Supplemental Indenture and should not be considered such.
It is included herein only for purposes of convenient
reference.

                                                                PAGE
                                                                ----
Section 11  Compliance with terms, provisions and
              conditions of Mortgage.....................        21
Section 12  Execution in counterparts....................        21
Testimonium..............................................        22
Signatures and Seals.....................................        22
Acknowledgements.........................................        23

                                       ii

THIS THIRTY-EIGHTH SUPPLEMENTAL INDENTURE, dated as of
October 1, 1993, between INDIANAPOLIS POWER & LIGHT
COMPANY, a corporation of the State of Indiana,
hereinafter sometimes called the "Company," party of the
first part, and AMERICAN NATIONAL BANK AND TRUST COMPANY
OF CHICAGO, a national banking association, as Trustee,
hereinafter sometimes called the "Trustee," party of the
second part;

WHEREAS, the Company by a Mortgage and Deed of Trust
(hereinafter sometimes called the "Original Mortgage"
when referred to as existing prior to any supplement
thereto or modification thereof, and the "Mortgage" when
referred to as now or heretofore supplemented and
modified) dated as of May 1, 1940, made to said American
National Bank and Trust Company of Chicago, as Trustee,
to secure the payment of the bonds issued from time to
time under the Mortgage for the purposes of and subject
to the limitations specified in the Mortgage, and to
secure the performance of the covenants therein
contained, conveyed to the Trustee thereunder upon
certain trusts, terms and conditions, and with and
subject to certain provisos and covenants therein
contained, all and singular the property, rights and
franchises which the Company then owned or should
thereafter acquire, excepting the property expressly
excepted by the terms of the Original Mortgage or any
indenture supplemental thereto, to which Mortgage
reference is hereby made for greater certainty; and

WHEREAS, the Original Mortgage has been supplemented and
modified by supplemental indentures dated as of May 1,
1942, as of February 1, 1948, as of April 1, 1949, as of
October 1, 1949, as of February 1, 1951, as of March 1,
1953, as of June 1, 1956, as of March 1, 1958, as of
October 1, 1960, as of August 1, 1964, as of April 1,
1966, as of May 1, 1967, as of May 1, 1968, as of October
1, 1970, as of March 1, 1972, as of March 15, 1973, as of
February 15, 1974, as of August 15, 1974, as of September
15, 1975, as of June 1, 1976, as of July 1, 1976, as of
August 1, 1977, as of September 1, 1978, as of August 1,
1981, as of November 1, 1983, as of November 1, 1984, as
of December 1, 1984, as of September 1, 1985, as of
October 1, 1986, as of June 1, 1989, as of August 1,
1989, as of October 15, 1991, as of August 1, 1992, as of
April 1, 1993 and as of October 1, 1993;

WHEREAS, Section 8 of the Original Mortgage provides,
among other things, that the form of each series of bonds
(other than the initial issue of bonds) issued thereunder
shall be established by an indenture supplemental thereto
authorized by resolution of the Board of Directors of the
Company, and that the form of each series, as established
by the Board of Directors, shall specify the descriptive
title of the bonds and various other terms thereof,
and may also contain such other provisions as the Board
of Directors may, in its discretion, cause to be inserted
therein expressing or referring to the terms and conditions
upon which such bonds are to be issued and secured under the
Original Mortgage or any indenture supplemental thereto
or in modification thereof; and

WHEREAS, the Company has entered into a Loan Agreement,
dated as of October 1, 1993 (hereinafter called the "Loan
Agreement") with the City of Petersburg, Indiana (the
"City"), in order to obtain funds for the refunding of
the aggregate principal amount of Thirty Million Dollars
($30,000,000) of the City's Pollution Control Revenue
Bonds, Series 1983 (Indianapolis Power & Light Company
Project) issued by the City pursuant to a related loan
agreement to pay a portion of the cost of acquisition,
construction, installation and equipping by the Company
of certain pollution control facilities (the
"Facilities"), and pursuant to the Loan Agreement the
Company has agreed to issue a series of its bonds under
the Mortgage and this Thirty-Eighth Supplemental
Indenture in order to evidence and secure its
indebtedness under the Loan Agreement; and

WHEREAS, the Company now desires to provide for the
establishment, execution, authentication and delivery
under the Mortgage of bonds of a series to be known as
its "First Mortgage Bonds, 5.50% Series, due 2023" (the
bonds of said series being hereinafter sometimes referred
to as the "2023 PC Bond"), limited to the aggregate
principal amount of Thirty Million Dollars ($30,000,000);
and

WHEREAS, all things necessary to make the 2023 PC Bond
hereinafter described, when duly executed by the Company
and authenticated and delivered by the Trustee, a valid,
binding and legal obligation of the Company, and to make
this Thirty-Eighth Supplemental Indenture a valid and
binding agreement supplemental to the Original Mortgage,
have been done and performed; and

WHEREAS, the execution and delivery by the Company of
this Thirty-Eighth Supplemental Indenture, and the terms
of the 2023 PC Bond, have been duly authorized by the
Board of Directors of the Company by appropriate
resolutions of said Board; and

WHEREAS, it is provided in and by the Original Mortgage
that the Company will execute and deliver such further
instruments and do such further acts as may be necessary
or proper to carry out more effectually the purposes of
the Mortgage, and to make subject to the lien thereof any
property thereafter acquired and intended to be subject
to the lien thereof; and

WHEREAS, the Company has, since the date of execution and
delivery of the Original Mortgage, purchased and acquired
property and desires by this Thirty-Eighth Supplemental
Indenture specifically to convey to the Trustee such
property for the better protection and security of the
bonds issued and to be issued under the Original
Mortgage, or any indenture supplemental thereto;

NOW, THEREFORE, THIS INDENTURE WITNESSETH that, in
consideration of the premises and of the acceptance or
purchase of the 2023 PC Bond by the registered owners
thereof, and of the sum of one dollar, lawful money of
the United States of America, to the Company duly paid by
the Trustee at or before the execution and delivery of
this Thirty-Eighth Supplemental Indenture, the receipt
whereof is hereby acknowledged, the Company and the
Trustee, respectively, have entered into, executed and
delivered this Thirty-Eighth Supplemental Indenture, for
the uses and purposes hereinafter expressed, that is to
say:

Section 1. The Company has granted, bargained, sold,
released, conveyed, assigned, transferred, mortgaged,
pledged, set over and confirmed, and by these presents
does grant, bargain, sell, release, convey, assign,
transfer, mortgage, pledge, set over and confirm
(subject, however, to permitted encumbrances as defined
in the Original Mortgage), unto said American National
Bank and Trust Company of Chicago, as Trustee, as herein
provided, and its successors in the trusts declared in
the Original Mortgage and herein, all of the property,
real, personal and mixed, tangible and intangible, of
every kind, character and description which the Company
has acquired since the execution and delivery of the
Original Mortgage and now owns (except property, rights
and assets of a character similar to that excluded from
the lien and operation of the Mortgage by the Granting
Clauses of the Original Mortgage, which property, rights
and assets are excluded from the lien and operation of
the Mortgage only to the extent provided therein),
including, but without otherwise limiting the generality
of the foregoing, the following described property
situated within the state of Indiana:

                      PART I.

          ELECTRIC DISTRIBUTING SYSTEMS.

All electric distributing systems of the Company acquired
by it after May 1, 1940, the date of the Original
Mortgage, and located in the Counties of Bartholomew,
Boone, Daviess, Greene, Hamilton, Hancock, Hendricks,
Johnson, Knox, Madison, Marion, Monroe, Morgan, Owen,
Pike, Putnam, Shelby and Sullivan, State of Indiana; and
any additions to or extensions of any such systems,
together with the buildings, erections, structures,
transmission lines, power stations, sub-stations,
engines, boilers, condensers, pumps, turbines, machinery,
tools, conduits, manholes, insulators, dynamos, motors,
lamps, cables, wires, poles, towers, cross-arms, piers,
abutments, switchboard equipment, meters, appliances,
instruments, apparatus, appurtenances, maps, records,
ledgers, contracts, facilities and other property or
equipment used or provided for use in connection with the
construction, maintenance, repair and operation thereof;
together also with all of the rights, privileges, rights-
of-way, franchises, licenses, grants, liberties,
immunities, ordinances, permits and easements of the
Company in respect of the construction, maintenance,
repair and operation of said systems.

                        PART II.

        STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

All the steam and hot water distributing systems acquired
by the Company after May 1, 1940, the date of the
Original Mortgage, and located in the City of
Indianapolis, Marion County, Indiana, and any additions
to or extensions of any such systems; together with the
buildings, erections, structures, boilers, heaters,
engines, tanks, pipe lines, mains, connections, service
pipes, meters, tools, instruments, appliances, apparatus,
facilities, machinery and other property and equipment
used or provided for use in the construction,
maintenance, repair and operation thereof; and together
also with all of the rights, privileges, rights-of-way,
franchises, licenses, grants, liberties, immunities,
ordinances, permits and easements of the Company in
respect of the construction, maintenance, repair and
operation of said systems.

                     PART III.

         INDETERMINATE PERMITS AND FRANCHISES.

All indeterminate permits, franchises, ordinances,
licenses, and other authorizations by or from any state,
county, municipality, or other governmental authority,
acquired by the Company after May 1, 1940, the date of
the Original Mortgage, including particularly, but not
limited to, any indeterminate permits
under the Public Service Commission Act of the State of
Indiana, and all Acts amendatory thereof and supplemental
thereto, and all right, title and interest therein now
owned by the Company, and all renewals, extensions and
modifications of said indeterminate permits, franchises,
ordinances, licenses, and other authorizations, and of
the indeterminate permits, franchises, ordinances,
licenses, and other authorizations referred to in Part
VII of the Granting Clauses of the Original Mortgage.

                     PART IV.

                 OTHER PROPERTY.

All other property, whether real, personal or mixed
(except any in the Mortgage expressly excepted), now
owned by the Company and wheresoever situated, including
(without in anywise limiting or impairing by the
enumeration of the same the scope and intent of the
foregoing or of any general description contained in the
Mortgages) all lands, flowage rights, water rights,
flumes, raceways, dams, rights-of-way and roads; all
plants for the generation of electricity by water, steam
and/or other power, power houses, telephone systems,
water systems, steam heat and power plants, hot water
plants, sub-stations, transmission lines, distribution
systems, bridges, culverts and tracts; all offices,
buildings and structures and the equipment thereof; all
machinery, engines, boilers, dynamos, machines,
regulators, meters, transformers, generators and motors;
all appliances whether electrical, gas or mechanical,
conduits, cables and lines; all pipes whether for water,
steam heat and power, or other purposes; all mains and
pipes, service pipes, fittings, valves and connections,
poles, wires, tools, implements, apparatus, furniture and
chattels; all municipal franchises, indeterminate
permits, and other permits; all lines for the
transportation, transmission and/or distribution of
electric current, steam heat and power or water for any
purpose, including towers, poles, wires, cables, pipes,
conduits and all apparatus for use in connection
therewith; all real estate, lands, leases, leaseholds;
all contracts, whether heat, light, power, water or
street lighting contracts; all easements, servitudes,
licenses, permits, rights, powers, franchises,
privileges, rights-of-way and other rights in or relating
to real estate or the occupancy of the same and (except
as hereinafter or in the Mortgage expressly excepted) all
the right, title and interest of the Company in and to
all other property of any kind or nature appertaining to
and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore described or referred to;

Together with all and singular the tenements,
hereditaments and appurtenances belonging or in anywise
appertaining to the aforesaid property or any part
thereof, with the reversion and reversions, remainder and
remainders and (subject to the provisions of Section 64
of the Original Mortgage), the tolls, rents, revenues,
issues, earnings, income, product and profits thereof,
and all the estate, right, title and 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, indeterminate permits, franchises,
ordinances, licenses
and other authorizations and every part and parcel
thereof.

Section 2. There shall be and is hereby established a
series of bonds, limited in aggregate principal amount to
Thirty Million Dollars ($30,000,000) to be issued under
and secured by the Mortgage, to be designated "5.50%
Series, due 2023", each of which shall also bear the
descriptive title "First Mortgage Bonds"; said bonds
shall mature on October 1, 2023, and shall be issued only
as fully registered bonds without coupons in the
denomination of five thousand dollars and any larger
denomination which is a multiple of five thousand
dollars; they shall bear interest from the beginning of
the current interest period during which each bond is
dated, at the rate per annum designated in the title
thereof, payable semi-annually, on April 1 and October 1
of each year; and the principal of, premium, if any, and
interest on said bond shall be payable in lawful money of
the United States of America at the office of the Company
in the City of Indianapolis, Indiana, or, if no such
office is maintained, at American National Bank and Trust
Company of Chicago, which is hereby designated and
appointed the office and agency of the Company in the
City of Chicago, Illinois, for the payment of the
principal of, premium, if any, and interest on the 2023
PC Bond, if necessary,  and for the registration,
transfer and exchange of such bonds as hereinafter
provided; all reference herein to the office or agency of
the Company in the City of Chicago, Illinois, for the
payment of the principal of, premium, if any, and
interest on the 2023 PC Bond, or the registration,
transfer or exchange thereof, being to American National
Bank and Trust Company of Chicago. In the event of the
resignation or inability to act of American National Bank
and Trust Company of Chicago, then a successor agent for
all such purposes in the City of Chicago, Illinois, shall
be appointed by the Board of Directors of the Company.

The 2023 PC Bond shall be dated as of the date of
authentication thereof, except as otherwise provided in
Section 10 of the Original Mortgage.

The 2023 PC Bond will be issued to evidence and secure a
loan to the Company by the City pursuant to the Loan
Agreement of certain funds to be acquired by the City
through the issuance of City of Petersburg, Indiana,
Pollution Control Refunding Revenue Bonds, Series 1993C
(Indianapolis Power & Light Company Project)(the "Series
1993C Bonds"), authenticated and delivered under and
pursuant to an Indenture of Trust dated as of October 1,
1993 (hereinafter called the "City Indenture"), by and
between the City and Bank One, Indianapolis, NA, as
Trustee (the "City Trustee").  Pursuant to the City's
pledge and assignment of the Loan Agreement, as set forth
in the City Indenture, the 2023 PC Bond shall be issued
to the City and assigned to the City Trustee.  All of the
proceeds of the Series 1993C Bonds will be used for the
refunding of the aggregate principal amount of Thirty
Million Dollars ($30,000,000) of the City's Pollution
Control Revenue Bonds, Series 1983 (Indianapolis Power &
Light Company Project) issued by the City pursuant to
applicable loan agreements.

Upon the notice and in the manner and with the effect
provided in this Section 2, the 2023 PC Bond shall be
redeemable prior to the maturity thereof under any one or
more of the following circumstances:

(a)  In whole, at the option of the Company, if the
Facilities or Unit 4 of the Petersburg Generating Station
serviced by the Facilities shall have been damaged or
destroyed (i) to such extent that they cannot be
reasonably expected, in the opinion of the Company, to be
restored within a period of six (6) months to the
condition thereof immediately preceding such damage or
destruction, or (ii) to such extent that the Company, in
its reasonable opinion, is thereby prevented from
carrying on its normal operations for a period of six (6)
months or more, or (iii) to such extent that the
restoration thereof would not be, taking into
consideration the net proceeds of any insurance payable
as a result of such damage or destruction, economic in
the reasonable opinion of the Company.

(b)  In whole, at the option of the Company, if title to,
or the temporary use of, all or substantially all of the
Facilities or Unit 4 of the Petersburg Generation Station
serviced by the Facilities, shall have been taken, under
the exercise of the power of eminent domain, or should
any governmental body or agency exercise any right which
it may have to purchase or designate a purchaser of the
same, or should such property be sold to any governmental
body or agency so that the result of such taking or
takings is that (i) the Company, in its reasonable
opinion, is thereby prevented from carrying on its normal
operations of either the Facilities or such Unit 4 for a
period of six (6) months or more, (ii) the restoration
required as a result of the taking cannot be reasonably
expected, in the opinion of the Company, to be completed
in a period of six (6) months, or (iii) the restoration
thereof, taking into consideration the net proceeds from
such eminent domain award, would not be economic in the
reasonable opinion of the Company.

(c)  In whole, at the option of the Company, if, as a
result of any changes in the Constitution or law of the
State of Indiana or the Constitution or law of the United
States of America or of legislative or administrative
action (whether state or federal) or by final decree,
judgment or order of any court or administrative body
(whether state or federal) entered after the contest
thereof by the Company in good faith or the decision of
the Company not to contest the same, the Loan Agreement
shall, in the reasonable opinion of counsel for the
Company, have become void or unenforceable or impossible
of performance in accordance with the intent and purpose
of the parties as expressed in the Loan Agreement; or
unreasonable burdens or excessive liabilities shall, in
the reasonable opinion of the Company, have been imposed
upon the City or the company, with respect to the
Facilities or operation thereof, including without
limitation federal, state or other ad valorem, property,
income or other taxes not being imposed on the date of
the Loan Agreement other than ad valorem taxes presently
levied upon privately owned property used for the same
general purpose as the Facilities.

(d)  In whole, at the option of the Company, if changes
in the economic availability of raw materials, operating
supplies or facilities necessary for the operation of the
Facilities or the operation of Unit 4 of the Petersburg
Generating Station serviced by the Facilities shall have
occurred or technological or other changes shall have
occurred which render the Facilities or said Unit 4
uneconomic for use in the reasonable opinion of the
company.

(e)  In part, at the option of the Company, to the extent
of net proceeds received from any condemnation award,
taking or sale as stated herein, if title to, or the
temporary use of any portion of the Facilities shall have
been taken under the exercise of the power of eminent
domain, or should any governmental body or agency
exercise any right it may have to pruchase or designate a
purchaser of the same, or should such property be sold to
any governmental body or agency; provided the Company
shall furnish to the City and the City Trustee a
certificate of an Independent Engineer (as defined in the
Loan Agreement) selected by the Company stating (i) that
the property forming the part of the Facilities that was
taken by such condemnation, taking or sale is not
essential to the character or significance of the
Facilities, or (ii) that the Facilities have been
restored to a condition substantially equivalent to their
condition prior to the taking by such condemnation,
taking or sale proceedings, or (iii) that improvements
have been acquired which are suitable for the operation
of the Facilities.

(f)  In whole, at any time on or after October 1, 2003,
or in part on any interest payment date on or after
October 1, 2003, at the option of the Company at a price
equal to the principal amount of the 2023 PC Bond so to
be redeemed and accrued interest to the date of
redemption, together with a premium equal to a percentage
of the principal amount thereof set forth under the
heading "Redemption Premium" in the form of the 2023 PC
Bond hereinafter recited, so long as the Company is not
in default under the Loan Agreement or the 2023 PC Bond.

(g)  In the event all or substantially all of the
mortgaged and pledged property under the Mortgage, or all
or substantially all such property used in the business
of generating, manufacturing, transporting, transmitting,
distributing or supplying electricity, should be taken by
exercise of the power of eminent domain, or should any
governmental body or agency exercise any right which it
may have to purchase or designate a purchaser of the
same, or should such property be sold to any governmental
body or agency, the Company shall be obligated to redeem
the 2023 PC Bond outstanding as promptly as possible in
accordance with paragraph B of Section 69 of the Original
Mortgage.

(h)  In the event that the Company is notified by the
City Trustee that (i) an event of default under the City
Indenture has occurred and is continuing, and (ii) the
City Trustee has declared the principal of all the Series
1993C Bonds then outstanding immediately due and payable
pursuant to the City Indenture, the Company shall call
for redemption, on a redemption date selected by it not
later than thirty (30) days following the date on which
such notice is mailed, the 2023 PC Bond outstanding, and
shall on such redemption date redeem the same; provided,
however, that such requirement of redemption shall be
deemed waived, if prior to the date fixed for such
redemption of the 2023 PC Bond (x) such event of default
is waived or cured as set forth in the City Indenture, or
(y) there shall have occurred any completed default (as
defined in the Mortgage) which affects any bond of any
series outstanding under the Mortgage and which completed
default has not been cured and made good prior to such
redemption date, it being the intent of this proviso
that, in lieu of such right to redemption, the holder of
the 2023 PC Bond shall be entitled only to such rights as
are available to the holders of bonds of any other series
outstanding under the Mortgage in the event of such
completed default; and in case of any subsequent
occurrence or continuance of the events described in (i)
and (ii) of this Section 2(h), the Company shall have the
same obligation (subject to the same proviso) to redeem
the 2023 PC Bond.

(i) In the event the City Trustee notifies the Company
and the City that the interest payable on the Series
1993C Bonds held by persons other than a "substantial
user" or a "related person" as those terms are used in
Section 147(a)(2) of the Internal Revenue code of 1986,
as amended, has been determined by a court of competent
jurisdiction or a formal ruling of the Internal Revenue
Service to be subject to federal income taxation by
reason of a breach by the Company of any covenant,
agreement or representation in the Loan Agreement, the
Company shall call the 2023 PC Bond then outstanding to
be redeemed on the next succeeding interest payment date
within one hundred eighty (180) days after the date of
such notice; provided, however, that such requirement of
redemption, whether in whole or in part shall be deemed
waived if, prior to the date fixed for redemption of the
2023 PC Bond pursuant to this Section 2(i), there shall
have occurred any completed default (as defined in the
Mortgage) which affects any bond of any series
outstanding under the Mortgage and which completed
default has not been cured and made good prior to such
redemption date, it being the intent of this proviso
that, in lieu of such right to redemption, the holder of
the 2023 PC Bond shall be entitled only to such rights as
are available to the holders of bonds of any other series
outstanding under the Mortgage in the event of such
completed default; but when any such completed default
shall have been cured and made good, if interest on the
Series 1993C Bonds shall still be taxable as described
above, the Company shall have the same obligation
(subject to the same proviso) to redeem the 2023 PC Bond
on the next succeeding interest payment date within one
hundred eighty (180) days after the curing and making
good of such completed default; provided further, that
the Company may call for redemption such portion of the
2023 PC Bond, which in the written opinion of an attorney
or firm of attorneys of nationally recognized standing on
the subject of municipal bonds, would allow the City
Trustee to redeem the Series 1993C Bonds in part, which
redemption would have the result that the interest
payable on the Series 1993C Bonds remaining outstanding
after such redemption in part would not be subject to
federal income taxation in the hands of persons other
than a "substantial user" or a "related person" as those
terms are used in Section 147(a)(2) of the Internal
Revenue Code of 1986, as amended.

In case of redemption of 2023 PC Bond in whole for the
purpose of repayment under the Loan Agreement pursuant to
subsection (a), (b), (c), (d), (f), (g), (h) or (i)
above, the amounts payable upon redemption of 2023 PC
Bond shall be a sum sufficient, together with other funds
deposited with the City Trustee and available for such
purpose, to pay the principal of (and premium, in the
case of redemption pursuant to (f) above, and interest on
the 2023 PC Bond then outstanding and to pay all
reasonable and necessary fees and expenses of the City
Trustee accrued and to accrue through final payment of
the 203 PC Bond.

In case of redemption in part pursuant to (e), (f) or (i)
above, the amount payable by the Company under this
Thirty-Eighth Supplemental Indenture, the Loan Agreement
and the 2023 PC Bond shall be a sum sufficient, together
with other funds deposited with the Trustee and available
for such purpose, to pay the principal of (and premium in
the case of prepayment pursuant to (f) above) and
interest on the 2023 PC Bond so to be redeemed, which sum
together with other funds deposited with the City Trustee
and available for such purpose shall be sufficient to pay
the principal of, premium, if any, and interest on the
Series 1993C Bonds and to pay all reasonable and
necessary fees and expenses of the City Trustee accrued
and to accrue through such partial prepayment.

The 2023 PC Bond and the Series 1993C Bonds shall be
redeemable at any time within one hundred eighty (180)
days following the event or events described as giving
rise to an option of the Company to redeem them in
subsections (a), (b), (c), (d) or (e) above.

To exercise any of the options granted to redeem the 2023
PC Bond in whole or in part or to comply with any
obligations to redeem the 2023 PC Bond in whole or in
part imposed in this Section 2, the Company shall give
written notice of the date of redemption to the City
Trustee, which date shall be not less than thirty (30)
days nor more than ninety (90) days from the date the
notice is mailed.  NO further notice, by publication or
otherwise, shall be required for redemption of the 2023
PC Bond, and the requirements of Section 59 of the
Mortgage for notice by newspaper publication shall not
apply to the 2023 PC Bond.

At the option of the holder, the 2023 PC Bond, upon
surrender thereof at the office or agency of the company
in Chicago, Illinois, together with a written instrument
of transfer in form approved by the Company duly executed
by the holder or by his duly authorized attorney, shall
be exchangeable for a like aggregate principal amount of
fully registered bonds of the same series of other
authorized denominations.

The 2023 PC Bond will be nontransferable except to the
City Trustee and successors thereto, if any, and to the
Company.  To the extent that it is transferable, it is
tranferable by the registered holder thereof, in person
or by attorney duly authorized in writing, on the books
of the Company at the office or agency of the Company in
the City of Chicago, Illinois, upon surrender thereof for
cancellation at said office and upon presentation of a
written instrument of transfer duly executed.  Thereupon,
the Company shall issue in the name of the transferee,
and the Trustee shall authenticate and deliver, a new
registered 2023 PC Bond or Bonds, in authorized
denominations, of equal aggregate principal amount.  Any
such transfer shall be subject to the terms and
conditions specified in the Mortgage and in this Thirty-
Eighth Supplemental Indenture.

The Company shall not be required to transfer or exchange
the 2023 PC Bond for a period of ten (10) days next
preceding any interest payment date of said bond.

Except as set forth herein, no charge shall be made upon
any transfer or exchange of any of the 2023 PC Bond other
than for any tax or taxes or other governmental charge
required to be paid by the Company.

The 2023 PC Bond shall be limited to an aggregate
principal amount of Thirty Million Dollars ($30,000,000)
and shall be issued under the provisions of Article VII
of the Original Mortgage.

Section 3.  The 2023 PC Bond, and the Trustee's
Certificate to be endorsed thereon, shall be in the
following forms, respectively:

[form of face of 2023 PC Bond]

This First Mortgage Bond, 5.50% Series, due 2023
(hereinafter called the "2023 PC Bond") is not
transferable except to a successor trustee under the
Indenture of Trust dated as of October 1, 1993, between
the City of Petersburg, Indiana and Bank One,
Indianapolis, NA, as the Trustee, or to Indianapolis
Power & Light Company.

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 5.50% Series, Due 2023
     Due October 1, 2023

No.                                     $

INDIANAPOLIS POWER & LIGHT COMPANY, a corporation of the
State of Indiana (hereinafter called the "Company"), for
value received, hereby promises to pay to Bank One,
Indianapolis, NA, as the Trustee (hereinafter called the
"City Trustee") under the Indenture of Trust between the
City of Petersburg, Indiana (the "City") and the City
Trustee, dated as of October 1, 1993, (the "City
Indenture") or registered assigns, on October 1, 2023, at
the office of the Company, in the City of Indianapolis,
State of Indiana, or if no such office is maintained at
the time by the Company, then at the office or agency of
the Company for such purpose in the City of Chicago,
State of Illinois, Thirty Million Dollars ($30,000,000)
in lawful money of the United States of America, and to
pay to the registered owner hereof interest thereon from
the first day of October or the first day of April next
preceding the date of this 2023 PC Bond, at the rate of
five and fifty hundredths per centum (5.50%) per annum in
like lawful money at said office or agency, on October 1
and April 1 in each year, until the Company's obligation
with respect to the payment of such principal shall have
been discharged.  The interest payable hereunder on
October 1 or April 1 will be paid to the registered owner
of this 2023 PC Bond at or before the close of business
on such dates, or if such date shall be a Saturday,
Sunday, holiday or a day on which banking institutions in
the City of Indianapolis or the city of any paying agents
are authorized by law to close, on or before the close of
business on the next succeeding business day on which
such banking institutions are open for business.

REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS 2023
PC BOND SET FORTH ON THE REVERSE HEREOF.  SUCH FURTHER
PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE SAME EFFECT
AS THOUGH FULLY SET FORTH IN THIS PLACE.

No recourse shall be had for the payment of the principal
of or interest on this 2023 PC 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, as such, 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, as such, being waived and
released by the terms of the Mortgage, as herein defined.

This 2023 PC Bond shall not become obligatory until
American National Bank and Trust Company of Chicago, the
Trustee under the Mortgage, as herein defined, or its
successor thereunder, shall have signed the form of
certificate endorsed hereon.

IN WITNESS WHEREOF, Indianapolis Power & Light Company
has caused this 2023 PC Bond to be signed in its name by
its President or one of its Vice-Presidents, by his
signature or a facsimile thereof, and its corporate seal
to be affixed hereon, attested by its Secretary or one of
its Assistant Secretaries, by his signature or a
facsimile thereof.

                   INDIANAPOLIS POWER & LIGHT COMPANY

Dated:             By_______________________________________
                           Vice-President

Attest:

By_____________________________
           Secretary

[Form of Trustee's Certificate on 2023 PC Bond]

     Trustee's Certificate

This 2023 PC Bond is one of the bonds, of the series
herein designated, provided for in the within-mentioned
Mortgage and Thirty-Eighth Supplemental Indenture
thereto.

                       AMERICAN NATIONAL BANK AND
                         TRUST COMPANY OF CHICAGO
                                               Trustee

                       By______________________________________
                                   Authorized Signature

[Form of Reverse Side of 2023 PC Bond]

     INDIANAPOLIS POWER & LIGHT COMPANY
     First Mortgage Bond, 5.50% Series, due 2023
     Due October 1, 2023

This 2023 PC Bond is one of an issue of bonds of the
Company, issuable in series, and is one of a series known
as its First Mortgage Bonds, 5.50% Series, due 2023
(herein called the "2023 PC Bond") limited in aggregate
principal amount to Thirty Million Dollars ($30,000,000)
and established by a Thirty-Eighth Supplemental Indenture
dated as of October 1, 1993, all bonds of all series
issued and to be issued under and equally secured (except
insofar as any sinking or other fund, established in
accordance with the provisions of the Mortgage
hereinafter mentioned, may afford additional security for
the bonds of any particular series) by a Mortgage and
Deed of Trust, dated as of May 1, 1940, executed by the
Company to American National Bank and Trust Company of
Chicago, as the Trustee (which Mortgage and Deed of Trust
as supplemented and modified by all supplemental
indentures thereto is hereinafter referred to as the
"Mortgage"), to which Mortgage reference is made for a
description of the property mortgaged and pledged, the
nature and extent of the security, the rights of the
bearers or registered owners of the bonds in respect of
such security, the duties and immunities of the Trustee
and terms and conditions upon which the bonds are
secured.

This 2023 PC Bond evidences and secures a loan made by
the City to the Company, pursuant to a Loan Agreement,
dated as of October 1, 1993, between the City and the
Company (the "Loan Agreement").  In order to obtain funds
for such loan, the City, contemporaneously with the issue
of this 2023 PC Bond, will issue Thirty Million Dollars
($30,000,000) principal amount of its Pollution Control
Refunding Revenue Bonds, Series 1993C (Indianapolis Power
& Light Company Project) (the "City Bonds") under and
pursuant to the City Indenture.  The City Bonds are
payable from payments made by the Company of principal
of, premium, if any, and interest on this 2023 PC Bond
and from moneys in the Bond Fund created under the City
Indenture.  The obligation of the Company to pay the
principal of, premium, if any, and interest on this 2023
PC Bond shall be discharged to the extent that any moneys
in said Bond Fund are available for payments on the City
Bonds and are directed by the Company to be applied
thereto, all as provided in the Thirty-Eighth
Supplemental Indenture.

This 2023 PC Bond is not subject to redemption prior to
October 1, 2003, except as provided in Section 2 of the
Thirty-Eighth Supplemental Indenture, to which reference
is made for full description of redemption provisions.

This 2023 PC Bond is subject to redemption in whole at
any time on or after October 1, 2003, or in part on any
interest payment date on or after October 1, 2003, at the
option of the Company, upon at least thirty (30) days
prior notice, all as provided in the Thirty-Eighth
Supplemental Indenture, at a price equal to the principal
amount of the 2023 PC Bond so to be redeemed and accrued
interest to the date of redemption, together with a
premium equal to a percentage of the principal amount
thereof set forth below under the heading "Redemption
Premium":

If Redeemed During the Twelve Months
Ending With the Thirtieth Day               Redemption
of September of the Year Stated             Premium

     2004................................      2.0%
     2005................................      1.0%

and without premium if redeemed after September 30, 2005.

With the consent of the Company and to the extent
permitted by and as provided in the Mortgage, the rights
and obligations of the Company and/or of the holders of
the bonds and/or coupons and/or the terms and provisions
of the Mortgage and/or any instruments supplemental
thereto may be modified or altered by affirmative vote of
the holders of at least sixty-six and two-thirds per
centum (66-2/3%) in principal amount of the bonds
affected by such modification or alteration then
outstanding under the Mortgage (excluding bonds
disqualified from voting by reason of the Company's
interest therein as provided in the Mortgage); provided
that no such modification or alteration shall permit the
extension of the maturity of the principal of this 2023
PC Bond or the reduction in the rate of interest hereon
or any other modification in the terms of payment of such
principal or interest without the consent of the holder
hereof.  The principal hereof may be declared or may
become due and payable prior to the stated date of
maturity hereof, on the conditions, in the manner and at
the time set forth in the Mortgage, upon the occurrence
of a completed default as in the Mortgage provided.

No reference herein to the Mortgage, and no provision of
this 2023 PC Bond or of the Mortgage, shall alter or
impair the obligation of the Company, which is absolute
and unconditional, to pay, subject to the provisions of
the Thirty-Eighth Supplemental Indenture, the principal
of, and premium, if any, and interest on this 2023 PC
Bond at the place, at the respective times and at the
rate and the manner herein prescribed.

This 2023 PC Bond is issuable only in full registered
form without coupons in denominations of Five Thousand
Dollars and any larger denomination which is a whole
multiple of Five Thousand Dollars.

This 2023 PC Bond will be nontransferable except to the
City Trustee and successor thereto, if any, and to the
Company.  To the extent that it is transferable, it is
transferable by the registered holder thereof, in person
or by attorney duly authorized in writing, on the books
of the Company at the office or agency of the Company in
the City of Chicago, Illinois, upon surrender thereof for
cancellation at said office and upon presentation of a
written instrument of transfer duly executed.  Thereupon,
the Company shall issue in the name of the transferee,
and the Trustee shall authenticate and deliver, a new
registered 2023 PC Bond or Bonds, in authorized
denominations, of equal aggregate principal amount.  Any
such transfer shall be subject to the terms and
conditions specified in the Mortgage and in the Thirty-
Eighth Supplemental Indenture.

[End of 2023 PC Bond Form]

Section 4. Until the 2023 PC Bond in definitive form is
ready for delivery, the Company may execute, and upon its
request in writing the Trustee shall authenticate and
deliver, in lieu thereof, fully registered 2023 PC Bond
in temporary form, as provided in Section 15 of the
Original Mortgage. Such bond may, in lieu of the
statement of the specific redemption prices required to
be set forth in such bond in definitive form, include a
reference to this Thirty-Eighth Supplemental Indenture
for a statement of such redemption prices.

Section 5. The Company covenants and agrees that it will
duly and punctually pay to the holder of the 2023 PC Bond
the principal thereof, premium, if any, and interest on
said bond at the dates and place and in the manner
mentioned therein; provided, however, that:

     (a)  The obligation of the Company to pay the
principal of, and premium, if any, and interest on the
2023 PC Bond shall be discharged to the extent that any
moneys in the Series 1993C Bond Account within the Bond
Fund created under and pursuant to the City Indenture are
available for the payment of the principal of, or
premium, if any, of interest on the Series 1993C Bonds
and are directed by the Company to be applied to the
payment thereof in the manner provided in the City
Indenture on or prior to the dates on which the Company
is required to pay the principal of, or premium, if any,
or interest on the 2023 PC Bond.

     (b)  Except as otherwise provided in this Section 5,
the principal amount of any Series 1993C Bond acquired by
the Company and delivered to the City Trustee, or
acquired by the City Trustee and cancelled, shall be
credited against the obligation of the Company to pay the
principal of the 2023 PC Bond.

As the principal of, premium, if any, and interest on the
2023 PC Bond is paid or deemed paid in full, and upon its
receipt by the Company, such bond shall be delivered to
the Trustee for cancellation.  The Company shall promptly
inform the Trustee of all payments made and credits
availed of with respect to its obligations on the 2023 PC
Bond.  The Trustee shall not be required to recognize any
payment made or credit availed of with respect to any
2023 PC Bond unless it has received (a) the bond for
cancellation by it, or (b) a certificate signed by a duly
authorized officer of the City Trustee specifying the
amount of such payment or credit and the principal amount
of the 2023 PC Bond with respect to which the payment or
credit was applied.  In the absence of receipt by the
Trustee of any 2023 PC Bond, any such certificate shall
be controlling and conclusive.

Section 6. The covenant of the Company to make annual
payments to the Trustee for a Maintenance and Improvement
Fund as contained in Section 41 of the Original Mortgage
and in the first twenty-four Supplemental Indentures in
the Original Mortgage creating the several series of
First Mortgage Bonds presently outstanding under such
Supplemental Indentures shall not apply to nor be for the
benefit of the 2023 PC Bond, and the Company reserves the
right, without any consent of, or other action by, the
holder of the 2023 PC Bond, to amend, modify or delete
the provisions of the Mortgage relating to such
Maintenance and Improvement Fund and by acceptance of the
2023 PC Bond the holder thereof waives any right or
privilege so to consent or take any other action with
repsect thereto.

Section 7. The Company covenants that, so long as the
2023 PC Bond shall remain outstanding, it will comply
with all of the provisions of Section 47 of the Original
Mortgage, including the provisions with respect to
limitations on dividends and distributions and the
purchase and redemption of stock.

Section 8. The Trustee hereby accepts the trusts herein
declared, provided and created and agrees to perform the
same upon the terms and conditions herein and in the
Mortgage set forth and upon the following terms and
conditions:

The recitals contained herein and in the bonds shall be
taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the
same. The Trustee makes no representations as to the
validity or adequacy of the security afforded hereby, or
as to the validity of this Thirty-Eighth Supplemental
Indenture or of the 2023 PC Bond issued hereunder.

Section 9. Whenever in this Thirty-Eighth Supplemental
Indenture either of the parties hereto is named or
referred to, this shall, subject to the provisions of
Article XVII of the Original Mortgage, be deemed to
include the successors or assigns of such party, and all
the covenants and agreements in this Thirty-Eighth
Supplemental Indenture contained by or on behalf of the
Company, or by or on behalf of the Trustee, shall,
subject as aforesaid, bind and inure to the benefit of
the respective successors and assigns of such parties,
whether so expressed or not.

Section 10. Nothing in this Thirty-Eighth Supplemental
Indenture expressed or implied, is intended or shall be
construed to confer upon, or to give to, any person, co-
partnership or corporation, other than the parties hereto
and the holders of the bonds and coupons outstanding
under the Mortgage, any right, remedy, or claim under or
by reason of this Thirty-Eighth Supplemental Indenture or
any covenant, condition or stipulation hereof; and all
the covenants, conditions, stipulations, promises and
agreements in this Thirty-Eighth Supplemental Indenture
contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto and of
the holders of the bonds and of the coupons outstanding
under the Mortgage.

Section 11. The Company covenants that all of the terms,
provisions and conditions of the Mortgage shall be
applicable to the 2023 PC Bond issued hereunder, except
as herein otherwise provided and except insofar as the
same may be inconsistent with the provisions of this
Thirty-Eighth Supplemental Indenture.

Section 12. This Thirty-Eighth Supplemental Indenture is
dated as of October 1, 1993, although executed and
delivered on the date of the acknowledgment hereof by the
Trustee; and shall be simultaneously executed and
delivered in several counterparts, and all such
counterparts executed and delivered, each as an original,
shall constitute but one and the same instrument.

IN WITNESS WHEREOF, INDIANAPOLIS POWER & LIGHT COMPANY,
party of the first part, has caused its corporate name to
be hereunto affixed and this instrument to be signed and
acknowledged by its President or a Vice-President, and
its corporate seal to be hereto affixed and attested by
one of its Secretary or an Assistant Secretary, for and
in its behalf, and American National Bank and Trust
Company of Chicago, party of the second part, as Trustee,
has caused its corporate name to be hereunto affixed and
this instrument to be signed and acknowledged by one of
its Vice-Presidents, and its corporate seal to be hereto
affixed and attested by one of its Assistant Secretaries,
all as of the day, month and year first above written.

                      Indianapolis Power & Light Company

Attest:               By  /s/ Marcus E. Woods
                          Marcus E. Woods,
                          Vice-President
/s/ Clark L. Snyder
Clark L. Snyder,
Assistant Secretary

(Seal)

                       American National Bank and Trust
                          Company of Chicago,

Attest:                By  /s/ Ronald B. Bremen
                           Ronald B. Bremen,
                           Vice-President
/s/ Robert M. Selangowski
Robert M. Selangowski,
Assistant Secretary

(Seal)

State of Indiana     )
                     )  ss.:
County of Marion     )

On this 5th day of October, in the year 1993, before me,
a Notary Public in and for the County and State aforesaid,
personally came Marcus E. Woods, Vice-President, and
Clark L. Snyder, Assistant Secretary, of Indianapolis Power &
Light Company, one of the corporations described in and
which executed the foregoing instrument, to me personally
known and known to me personally to be such Vice-President,
and Assistant Secretary, respectively. Said Marcus E.
Woods and Clark L. Snyder being by me severally duly
sworn did depose and say that the said Marcus E. Woods
resides in Hendricks County, Indiana and the said
Clark L. Snyder resides in Marion County, Indiana; that
said Marcus E. Woods is Vice-President and said Clark L.
Snyder is Assistant Secretary of said Indianapolis Power
& Light Company; that each of them knows the corporate seal of
said corporation; that the seal affixed to said instrument
and bearing the name of said corporation is such corporate seal;
that is was so affixed by order of the Board of Directors of
said corporation; and that each of them signed his
name thereto by like order; and each of them acknowledged
the execution of said instrument on behalf of said corporation
to be his free and voluntary act and deed and the free and
voluntary act and deed of said corporation, for the uses
and purposes therein set forth.

In Witness Whereof, I have hereunto set my hand and
affixed my official seal this 5th day of October, 1993.

                         /s/ Dinah L. Kirkham
                         Dinah L. Kirkham,
                         Notary Public

My Commission Expires:
  June 23, 1996

My County of Residence is:
  Johnson

(Notarial Seal)

State of Illinois    )
                     )  ss.:
County of Cook       )

  On this 4th day of October, in the year 1993, before
me, a Notary Public in and for the County and State
aforesaid, personally came Ronald B. Bremen, Vice-
President, and Robert M. Selangowski, Assistant
Secretary, of American National Bank and Trust
Company of Chicago, one of the corporations described
in and which executed the foregoing instrument,
to me personally known and known to me personally to
be such Vice-President and Assistant Secretary,
respectively. Said Ronald B. Bremen and Robert M.
Selangowski, being by me severally sworn did depose
and say that the said Ronald B. Bremen resides in
Glencoe, Illinois, and that the said Robert M.
Selangowski resides in Lansing, Illinois; that said
Ronald B. Bremen is Vice-President and said Robert M.
Selangowski is Assistant Secretary of said American
National Bank and Trust Company of Chicago; that
each of them knows the corporate seal of said corpora-
tion; that the seal affixed to said instrument and
bearing the name of said corporation is such corporate
seal; that it was so affixed by authority of the
Board of Directors of said corporation; that each of them
signed his name thereto by like authority; and each of
them acknowledged the execution of said instrument on
behalf of said corporation to be his free and voluntary
act and deed and the free and voluntary act and deed
of said corporation, for the uses and purposes therein
set forth.

In Witness Whereof, I have hereunto set my hand and
affixed my official seal this 4th day of October, 1993.

                                /s/ Bernadette G. Janairo
                                Bernadette G. Janairo,
                                Notary Public

My Commission Expires: May 22, 1994

My County of Residence is:
  Cook

(Notarial Seal)

                        This instrument was prepared by
                                Marcus E. Woods,
                                Attorney at Law

<PAGE>
                                                                   Exhibit 4.4.9

                    INDIANAPOLIS POWER & LIGHT COMPANY

                                      TO

                       AMERICAN NATIONAL BANK AND TRUST
                              COMPANY OF CHICAGO
                                                TRUSTEE

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

                      THIRTY-NINTH SUPPLEMENTAL INDENTURE

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

                         DATED AS OF FEBRUARY 1, 1994

                      ESTABLISHING FIRST MORTGAGE BONDS,

                            6.05% SERIES, DUE 2004

                               TABLE OF CONTENTS*

                                       OF

                      THIRTY-NINTH SUPPLEMENTAL INDENTURE

                                       OF

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                PAGE
                                                                ----

Parties..................................................         1
Recitals.................................................         1
Section 1  Granting clauses..............................         3
             Part I   Electric Distributing Systems......         3
             Part II  Steam and Hot Water Distributing
                        Systems..........................         4
             Part III Indeterminate Permits and
                        Franchises.......................         4
             Part IV   Other Property....................         5
           General and after-acquired title..............         6
Section 2  Designation of thirty-seventh series of bonds
             and kind and denominations thereof..........         6
           Record date for payment of interest...........         7
           Designation of American National Bank and
             Trust Company of Chicago as paying agent....         7
           Bonds issued in book-entry form...............         7
           Exchange of bonds.............................         9
           Transfer of bonds.............................         9
           Series limited to $80,000,000.................        10
Section 3  Form of fully registered bond.................        10
           Form of Trustee's certificate on bonds........        12
Section 4  Temporary bonds...............................        14
Section 5  Annual Payments for Maintenance and Improvement
             Fund........................................        14
Section 6  Compliance with Section 47 of Original Mortgage
             with respect to dividend restrictions.......        15
Section 7  Acceptance of trusts by Trustee and conditions
             of acceptance...............................        15
Section 8  Successors and assigns........................        15
Section 9  Limitation of rights hereunder................        15

- ---------
  *Table of Contents is not part of the Thirty-Ninth
Supplemental Indenture and should not be considered such.
It is included herein only for purposes of convenient reference.

                                                                PAGE
                                                                ----
Section 10  Compliance with terms, provisions and
              conditions of Mortgage.....................        16
Section 11  Execution in counterparts....................        16
Testimonium..............................................        17
Signatures and Seals.....................................        17
Acknowledgements.........................................        18

                                       ii

  THIS THIRTY-NINTH SUPPLEMENTAL INDENTURE, dated as of
February 1, 1994, between Indianapolis Power & Light Company,
a corporation of the State of Indiana, hereinafter sometimes
called the "Company," party of the first part, and American
National Bank and Trust Company of Chicago, a national banking
association, as Trustee, hereinafter sometimes called the
"Trustee," party of the second part;

  Whereas, the Company by a Mortgage and Deed of Trust
(hereinafter sometimes called the "Original Mortgage" when
referred to as existing prior to any supplement thereto or
modification thereof, and the "Mortgage" when referred to
as now or heretofore supplemented and modified) dated as
of May 1, 1940, made to said American National Bank and
Trust Company of Chicago, as Trustee, to secure the payment
of the bonds issued from time to time under the Mortgage
for the purposes of and subject to the limitations
specified in the Mortgage, and to secure the performance
of the covenants therein contained, conveyed to
the Trustee thereunder upon certain trusts, terms and
conditions, and with and subject to certain provisos and
covenants therein contained, all and singular the property,
rights and franchises which the Company then owned or should
thereafter acquire, excepting the property expressly excepted
by the terms of the Original Mortgage or any indenture supplemental
thereto, to which Mortgage reference is hereby made for greater
certainty; and

  Whereas, the Original Mortgage has been supplemented
and modified by supplemental indentures dated as of
May 1, 1942, as of February 1, 1948, as of April
1, 1949, two as of October 1, 1949, as of February 1,
1951, as of March 1, 1953, as of June 1, 1956, as of
March 1, 1958, as of October 1, 1960, as of August 1, 1964,
as of April 1, 1966, as of May 1, 1967, as of May 1, 1968, as
of October 1, 1970, as of March 1, 1972, as of March 15,
1973, as of February 15, 1974, as of August 15, 1974,
as of September 15, 1975, as of June 1, 1976, as of July 1,
1976, as of August 1, 1977, as of September 1, 1978, two as of
August 1, 1981, as of November 1, 1983, as of November 1,
1984, as of December 1, 1984, as of September 1, 1985,
as of October 1, 1986, as of June 1, 1989, as of August 1,
1989, as of October 15, 1991, as of August 1, 1992, as of
April 1, 1993 and two as of October 1, 1993;

  Whereas, Section 8 of the Original Mortgage provides,
among other things, that the form of each series of bonds
(other than the initial issue of bonds) issued thereunder
shall be established by an indenture supplemental thereto
authorized by resolution of the Board of Directors of the
Company, and that the form of each series, as established
by the Board of Directors, shall specify the descriptive
title of the bonds and various other terms thereof, and
may also contain other provisions as the Board of Directors
may, in its discretion, cause to be inserted therein expressing
or referring to the terms and conditions upon which such bonds
are to be issued and secured under the Original Mortgage or
any indenture supplemental thereto or in modification
thereof; and

  Whereas, the Company now desires to provide for the
establishment, execution, authentication and delivery
under the Mortgage of bonds of a series to be known
as its "First Mortgage Bonds, 6.05% Series, due
2004" (the bonds of said series being hereinafter
sometimes referred to as the "2004 Bonds"), limited to
the aggregate principal amount of Eighty Million
Dollars ($80,000,000); and

  Whereas, all things necessary to make the 2004 Bonds
hereinafter described, when duly executed by the Company
and authenticated and delivered by the Trustee, valid,
binding and legal obligations of the Company, and to make
this Thirty-Ninth Supplemental Indenture a valid and binding
agreement supplemental to the Original Mortgage, have been
done and performed; and

  Whereas, the execution and delivery by the Company of
this Thirty-Ninth Supplemental Indenture, and the terms
of the 2004 Bonds, have been duly authorized by the Board
of Directors of the Company by appropriate resolutions of
said Board; and

  Whereas, it is provided in and by the Original Mortgage
that the Company will execute and deliver such further
instruments and do such further acts as may be necessary
or proper to carry out more effectually the purposes of the
Mortgage, and to make subject to the lien thereof any
property thereafter acquired and intended to be subject
to the lien thereof; and

  Whereas, the Company has, since the date of execution
and delivery of the Original Mortgage, purchased and
acquired property and desires by this Thirty-Ninth
Supplemental Indenture specifically to convey to
the Trustee such property for the better protection
and security of the bonds issued and to be issued under
the Original Mortgage, or any indenture supplemental thereto;

  Now, Therefore, This Indenture Witnesseth that, in
consideration of the premises and of the acceptance or
purchase of the 2004 Bonds by the registered owners thereof,
and of the sum of one dollar, lawful money of the United
States of America, to the Company duly paid by the Trustee
at or before the execution and delivery of this Thirty-Ninth
Supplemental Indenture, the receipt whereof is hereby
acknowledged, the Company and the Trustee, respectively,
have entered into, executed and delivered this Thirty-Ninth
Supplemental Indenture, for the uses and purposes hereinafter
expressed, that is to say:

  Section 1. The Company has granted, bargained, sold,
released, conveyed, assigned, transferred, mortgaged, pledged,
set over and confirmed, and by these presents does grant,
bargain, sell, release, convey, assign, transfer, mortgage,
pledge, set over and confirm (subject, however, to permitted
encumbrances as defined in the Original Mortgage), unto said
American National Bank and Trust Company of Chicago, as Trustee,
as herein provided, and its successors in the trusts declared
in the Original Mortgage and herein, all of the property, real,
personal and mixed, tangible and intangible, of every kind,
character and description which the Company has acquired
since the execution and delivery of the Original Mortgage and
now owns (except property, rights and assets of a character
similar to that excluded from the lien and operation of the
Mortgage by the Granting Clauses of the Original Mortgage, which
property, rights and assets are excluded from the lien and
operation of the Mortgage only to the extent provided therein),
including, but without otherwise limiting the generality of the
foregoing, the following described property situated within the
state of Indiana:

                           PART I.

              ELECTRIC DISTRIBUTING SYSTEMS.

  All electric distributing systems of the Company acquired by
it after May 1, 1940, the date of the Original Mortgage, and located in
the Counties of Bartholomew, Boone, Daviess, Greene, Hamilton, Hancock,
Hendricks, Johnson, Knox, Madison, Marion, Monroe, Morgan, Owen, Pike,
Putnam, Shelby and Sullivan, State of Indiana; and any additions to or
extensions of any such systems, together with the buildings, erections,
structures, transmission lines, power stations, sub-stations, engines,
boilers, condensers, pumps, turbines, machinery, tools, conduits,
manholes, insulators, dynamos, motors, lamps, cables, wires, poles,
towers, cross-arms, piers, abutments, switchboard equipment, meters,
appliances, instruments, apparatus, appurtenances, maps, records,
ledgers, contracts, facilities and other property or equipment used
or provided for use in connection with the construction, maintenance,
repair and operation thereof; together also with all of the
rights, privileges, rights-of-way, franchises, licenses, grants,
liberties, immunities, ordinances, permits and easements of the Company
in respect of the construction, maintenance, repair and operation of
said systems.

                           PART II.

        STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

  All the steam and hot water distributing systems acquired by the
Company after May 1, 1940, the date of the Original Mortgage, and
located in the City of Indianapolis, Marion County, Indiana, and any
additions to or extensions of any such systems; together with the
buildings, erections, structures, boilers, heaters, engines, tanks,
pipe lines, mains, connections, service pipes, meters, tools, instruments,
appliances, apparatus, facilities, machinery and other property and
equipment used or provided for use in the construction, maintenance,
repair and operation thereof; and together also with all of the rights,
privileges, rights-of-way, franchises, licenses, grants, liberties,
immunities, ordinances, permits and easements of the Company in respect
of the construction, maintenance, repair and operation of said systems.

                           PART III.

          INDETERMINATE PERMITS AND FRANCHISES.

  All indeterminate permits, franchises, ordinances, licenses, and other
authorizations by or from any state, county, municipality, or other
governmental authority, acquired by the Company after May 1, 1940, the
date of the Original Mortgage, including particularly, but not limited to,
any indeterminate permits under the Public Service Commission Act of the
State of Indiana, and all Acts amendatory thereof and supplemental thereto,
and all right, title and interest therein now owned by the Company, and all
renewals, extensions and modifications of said indeterminate permits,
franchises, ordinances, licenses, and other authorizations, and of the
indeterminate permits, franchises, ordinances, licenses, and other
authorizations referred to in Part VII of the Granting Clauses of the
Original Mortgage.

                            PART IV.

                        OTHER PROPERTY.

  All other property, whether real, personal or mixed (except any in the
Mortgage expressly excepted), now owned by the Company and wheresoever
situated, including (without in anywise limiting or impairing by the
enumeration of the same the scope and intent of the foregoing or of any
general description contained in the Mortgages) all lands, flowage rights,
water rights, flumes, raceways, dams, rights-of-way and roads; all plants
for the generation of electricity by water, steam and/or other power, power
houses, telephone systems, water systems, steam heat and power plants, hot
water plants, sub-stations, transmission lines, distribution systems,
bridges, culverts and tracks; all offices, buildings and structures and the
equipment thereof; all machinery, engines, boilers, dynamos, machines,
regulators, meters, transformers, generators and motors; all appliances
whether electrical, gas or mechanical, conduits, cables and lines; all pipes
whether for water, steam heat and power, or other purposes; all mains and
pipes, service pipes, fittings, valves and connections, poles, wires, tools,
implements, apparatus, furniture and chattels; all municipal franchises,
indeterminate permits, and other permits; all lines for the transportation,
transmission and/or distribution of electric current, steam heat and power
or water for any purpose, including towers, poles, wires, cables, pipes,
conduits and all apparatus for use in connection therewith; all real estate,
lands, leases, leaseholds; all contracts, whether heat, light, power, water
or street lighting contracts; all easements, servitudes, licenses, permits,
rights, powers, franchises, privileges, rights-of-way and other rights in or
relating to real estate or the occupancy of the same and (except as
hereinafter or in the Mortgage expressly excepted) all the right, title and
interest of the Company in and to all other property of any kind or nature
appertaining to and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore described or referred to;

  Together with all and singular the tenements, hereditaments and appurte-
nances belonging or in anywise appertaining to the aforesaid property or any
part thereof, with the reversion and reversions, remainder and remainders and
(subject to the provisions of Section 64 of the Original Mortgage), the
tools, rent, revenues, issues, earnings, income, product and profits thereof,
and all the estate, right, title and 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, indeterminate permits, franchises, ordinances,
licenses and other authorizations and every part and parcel thereof.

  Section 2. There shall be and is hereby established a series of bonds, lim-
ited in aggregate principal amount to Eighty Million Dollars ($80,000,000) to
be issued under and secured by the Mortgage, to be designated "6.05% Series,
due 2004", each of which shall also bear the descriptive title "First
Mortgage Bonds"; said bonds shall mature on February 1, 2004, and shall be
issued only as fully registered bonds without coupons in the denomination of
one thousand dollars and any larger denomination which is a multiple
of one thousand dollars; they shall bear interest from the beginning of the
current interest period during which each bond is dated, at the rate per
annum designated in the title thereof, payable semi-annually, on February 1
and August 1 of each year; and the principal of, premium, if any, and
interest on each said bond shall be payable in lawful money of the United
States of America at the office or agency of the Company in the City of
Chicago, Illinois. The person in whose name any such bond is registered at
the close of business on any record date (as hereinafter defined) with
respect to any interest payment date shall be entitled to receive the
interest payable on 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 on 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 with respect to payment of interest in default may be established by or
in behalf of the Company by notice mailed to the holders of the 2004 Bonds
not less than ten (10) days preceding such record date, which record date
shall not be more than thirty (30) 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 tenth day next preceding
such interest payment date, or, if such tenth day shall be a legal holiday
or a day on which banking institutions in the City of Chicago, Illinois,
are authorized by law to close, the day next succeeding such tenth day which
shall not be a legal holiday or a day on which such institutions are autho-
rized to close.

  American National Bank and Trust Company of Chicago is hereby designated
and appointed the office and agency of the Company for the payment of the
principal of, premium, if any, and interest on the 2004 Bonds and for the
registration, transfer and exchange of such bonds as hereinafter provided;
all reference herein to the office or agency of the Company for the payment
of the principal of, premium, if any, and interest on the 2004 Bonds, or the
registration, transfer or exchange thereof, being to American National Bank
and Trust Company of Chicago. In the event of the resignation or inability
to act of American National Bank and Trust Company of Chicago, then a
successor agent for all such purposes in the City of Chicago, Illinois,
shall be appointed by the Board of Directors of the Company.

  The 2004 Bonds shall be dated as of the date of authentication thereof,
except as otherwise provided in Section 10 of the Original Mortgage.

  The 2004 Bonds shall initially be issued and held in book-entry form on
the books of the central depository system, The Depository Trust Company,
its successors, or any successor central depository system appointed by the
Company from time to time (the "Clearing Agency"). The Company and the
Trustee may, in connection herewith, do or perform or cause to be done or
performed any acts or things not adverse to the rights of the holders of the
2004 Bonds, as are necessary or appropriate to accomplish or recognize such
book-entry form 2004 Bonds.

  So long as the 2004 Bonds remain and are held in book-entry form on the
books of a Clearing Agency, then (a) any such 2004 Bond may be registered
upon the books kept by the Trustee in the name of such Clearing Agency, or
any nominee thereof, including Cede & Co., as nominee of The Depository
Trust Company; (b) the Clearing Agency in whose names such 2004 Bond is so
registered shall be, and the Company and the Trustee may deem and treat
such Clearing Agency as, the absolute owner and holder of such 2004 Bond
for all purposes of the Indenture, including, without limitation, the
receiving of payment of the principal of, premium, if any, and interest on
such 2004 Bond, the receiving of notice and giving of consent; (c) neither
the Company nor the Trustee shall have any responsibility or obligation
hereunder to any direct or indirect participant, within the meaning of
Section 17A of the Securities Exchange Act of 1934, as amended, of such
Clearing Agency, or any person on behalf of which, or otherwise in respect
of which, any such participant holds any interest in any 2004 Bond,
including, without limitation, any responsibility or obligation hereunder
to maintain accurate records of any beneficial interests in any 2004 Bond
or any responsibility or obligation hereunder with respect to the receiv-
ing by such participants or the beneficial owners of payment of principal,
premium, if any, or interest on any 2004 Bonds, the receiving by such
participants or the beneficial owners of notice or the giving of consent
by such participants or the beneficial owners; and (d) the Clearing
Agency is not required to present any 2004 Bond called for partial
redemption prior to receiving payment so long as the Trustee and the
Clearing Agency have agreed to the method for noting such partial redemption.

  If (a) the Company receives notice from the Clearing Agency which is cur-
rently the registered owner of the 2004 Bonds to the effect that such
Clearing Agency is unable or unwilling to discharge its responsibility as a
Clearing Agency for the 2004 Bonds or (b) the Company elects to discontinue
its use of such Clearing Agency as a Clearing Agency for the 2004 Bonds,
then the Company and Trustee each shall do or perform or cause to be done
or performed all acts or things, not adverse to the rights of the holders of
the 2004 Bonds, as are necessary or appropriate to discontinue use of such
Clearing Agency as a Clearing Agency for the 2004 Bonds and to transfer the
ownership of each of the 2004 Bonds to such person or persons, including any
other Clearing Agency, as the holder of the 2004 Bonds may direct in
accordance with the Indenture. Any expenses of such discontinuance and
transfer, including expenses of printing new certificates to evidence the
2024 Bonds, shall be paid by the Company.

  So long as the 2004 Bonds remain and are held in book-entry form on the
books of a Clearing Agency, the Trustee shall be entitled to request and
rely upon a certificate or other written representation from the Clearing
Agency or any participant or indirect participant with respect to the
identity of any beneficial owners of the 2004 Bonds as of a record date
selected by the Trustee. For purposes of determining whether the consent,
advice, direction or demand of a Bondholder has been obtained, the Trustee
shall be entitled to treat the beneficial owners of the 2004 Bonds as the
Bondholders and any consent, request, direction, approval, objection or
other instrument of such beneficial owner may be obtained in the same
fashion described in the Indenture.

  The 2004 Bonds shall not be subject to redemption by the Company prior to
the maturity thereof except out of monies deposited with the Trustee repre-
senting the proceeds of mortgaged and pledged property taken by the exercise
of the power of eminent domain or otherwise as provided in paragraph B of
Section 69 of the Mortgage, in which event the redemption price of the 2004
Bonds so to be redeemed shall be the principal amount of such bonds plus
accrued interest thereon to the date of redemption.

  At the option of the holder, any 2004 Bond, upon surrender thereof at said
office or agency of the Company together with a written instrument of
transfer in form approved by the Company duly executed by the holder or by
his duly authorized attorney, shall be exchangeable for a like aggregate
principal amount of fully registered bonds of the same series of other
authorized denominations.

  The 2004 Bonds shall be transferable on the books of the Company at said
office or agency of the Company in the City of Chicago, Illinois, by the
registered holder thereof, in person or by his duly authorized attorney,
upon surrender thereof for cancellation.

 The Company shall not be required to make transfers or exchanges of any of
the 2004 Bonds for a period of ten (10) days next preceding any interest
payment date of said bonds.

  No charge shall be made upon any transfer or exchange of any of the 2004
Bonds other than for any tax or taxes or other governmental charge required
to be paid by the Company.

  The 2004 Bonds shall be limited to an aggregate principal amount of Eighty
Million Dollars ($80,000,000) and shall be issued under the provisions of
Article VII of the Original Mortgage.

  Section 3. The 2004 Bonds, and the Trustee's Certificate to be endorsed
thereon, shall be in the following forms, respectively:

                            [form of face of bond]

                      INDIANAPOLIS POWER & LIGHT COMPANY

                  First Mortgage Bond, 6.05% Series, Due 2004
                             Due February 1, 2004

No.......                                                $......

  Indianapolis Power & Light Company, a corporation of the State of Indiana
(hereinafter called the Company), for value received, hereby promises to pay
to           or registered assigns, on February 1, 2004, at the office or
agency of the Company in the City of Chicago, Illinois,
Dollars in lawful money of the United States of America, and to pay
to the registered owner hereof interest thereon from the first day of
February or the first day of August next preceding the date of this bond, at
the rate of 6.05 per centum per annum in like lawful money, at said office
or agency on February 1 and August 1 in each year, until the Company's
obligation with respect to the payment of such principal shall have been
discharged. The interest payable hereunder on February 1 or August 1 will,
subject to the exception provided in Section 2 of the Thirty-Ninth
Supplemental Indenture hereinafter mentioned, be paid to the person in whose
name this bond is registered at the close of business on the record date,
which shall be the tenth day next preceding such interest payment date or,
if such tenth day shall be a legal holiday or a day on which banking
institutions in the City of Chicago, Illinois, are authorized by law to
close, the day next succeeding such tenth day which shall not be a legal
holiday or a day on which such institutions are authorized to close.

  REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE
REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE
SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.

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

  In Witness Whereof, Indianapolis Power & Light Company has caused this bond
to be signed in its name by its President or one of its Vice-Presidents, by
his signature or a facsimile thereof, and a facsimile of its corporate seal
to be imprinted hereon, attested by its Secretary or one of its Assistant
Secretaries, by his signature or a facsimile thereof.

                                Indianapolis Power & Light Company

Dated                           By______________________________________
                                   President.

Attest:

  By________________________
               Secretary.

                 [form of trustee's certificate on bonds]

                        Trustee's Certificate

  This bond is one of the bonds, of the series herein designated, provided
for in the within-mentioned Mortgage and Thirty-Ninth Supplemental Indenture.

                                   American National Bank and
                                   Trust Company of Chicago,
                                                    Trustee

                                   By_____________________________________
                                        Authorized Signature

                        [form of reverse side of bond]

                      INDIANAPOLIS POWER & LIGHT COMPANY

                  First Mortgage Bond, 6.05% Series, Due 2004
                             Due February 1, 2004

  This bond is one of an issue of bonds of the Company, issuable in series,
and is one of a series known as its First Mortgage Bonds, 6.05% Series, due
2004 (herein sometimes called the "2004 Bonds") limited in aggregate
principal amount to Eighty Million Dollars ($80,000,000) and established by
a Thirty-Ninth Supplemental Indenture, dated as of February 1, 1994, all
bonds of all series issued and to be issued under and equally secured
(except insofar as any sinking or other fund, established in accordance with
the provisions of the Mortgage hereinafter mentioned, may afford additional
security for the bonds of any particular series) by a Mortgage and Deed of
Trust, dated as of May 1, 1940, executed by the Company to American National
Bank and Trust Company of Chicago, as Trustee (which Mortgage and Deed of
Trust as supplemented and modified by all supplemental indentures thereto is
hereinafter referred to as the "Mortgage"), to which Mortgage reference is
made for a description of the property mortgaged and pledged, the nature and
extent of the security, the rights of the bearers or registered owners of the
bonds in respect of such security, the duties and immunities of the Trustee
and the terms and conditions upon which the bonds are secured.

  With the consent of the Company and to the extent permitted by and as pro-
vided in the Mortgage, the rights and obligations of the Company and/or of
the holders of the bonds and/or coupons and/or the terms and provisions of
the Mortgage and/or any instruments supplemental thereto may be modified or
altered by affirmative vote of the holders of at least sixty-six
and two-thirds per centum (66 2/3%) in principal amount of the bonds
affected by such modification or alteration then outstanding under the
Mortgage (excluding bonds disqualified from voting by reason of the
Company's interest therein as provided in the Mortgage); provided that no
such modification or alteration shall permit the extension of the maturity
of the principal of this bond or the reduction in the rate of interest hereon
or any other modification in the terms of payment of such principal or
interest without the consent of the holder hereof. The principal hereof may
be declared or may become due and payable prior to the stated date of
maturity hereof, on the conditions, in the manner and at the time set forth
in the Mortgage, upon the occurrence of a completed default as in the
Mortgage provided.

  The 2004 Bonds are issuable only in fully registered form without coupons
in the denomination of one thousand dollars and any larger denomination
which is a multiple of one thousand dollars. In the manner and upon
payment of the charges hereinafter mentioned, the 2004 Bonds, upon surrender
thereof at the office or agency of the Company in the City of Chicago,
Illinois, together with a written instrument of transfer in form approved by
the Company duly executed by the registered holder or by his duly authorized
attorney, are exchangeable for a like aggregate principal amount of fully
registered bonds of the same series of other authorized denominations.

  This bond 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 City of Chicago, Illinois, upon surrender and
cancellation of this bond and upon presentation of a written instrument of
transfer, duly executed and upon payment of the charges hereinafter
mentioned, and, thereupon, a new fully registered bond of the same series
for a like principal amount will be issued to the transferee in exchange
herefor as provided in the Mortgage. The Company and the Trustee may deem
and treat the person in whose name this bond is registered as the absolute
owner hereof for the purpose of receiving payment and for all other purposes.

  No charge shall be made upon any transfer or exchange of any of the 2004
Bonds other than for any tax or taxes or other governmental charge required
to be paid by the Company.

  The Company shall not be required to make transfers or exchanges of any of
the 2004 Bonds for a period of ten (10) days next preceding any interest pay-
ment date of said bonds.

  The 2004 Bonds are not subject to redemption by the Company prior to the
maturity thereof except out of monies deposited with the Trustee representing
the proceeds of mortgaged and pledged property taken by the exercise of the
power of eminent domain or otherwise as provided in paragraph B of Section 69
of the Mortgage, in which event the redemption price of the 2004 Bonds so to
be redeemed shall be the principal amount of such bonds plus accrued interest
thereon to the date of redemption.

  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, as such, 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 other-
wise, all such liability of incorporators, subscribers, stockholders, officers
and directors, as such, being waived and released by the terms of the Mort-
gage.

  Section 4. Until the 2004 Bonds in definitive form are ready for delivery,
the Company may execute, and upon its request in writing the Trustee shall au-
thenticate and deliver, in lieu thereof, fully registered 2004 Bonds in tempo-
rary form, as provided in Section 15 of the Original Mortgage. Such bonds may,
in lieu of the statement of the specific redemption prices required to be set
forth in such bonds in definitive form, include a reference to this Thirty-
Ninth Supplemental Indenture for a statement of such redemption prices.

  Section 5. The covenant of the Company to make annual payments
to the Trustee for a Maintenance and Improvement Fund as contained in Section
41 of the Original Mortgage and in the first twenty-four Supplemental Inden-
tures to the Original Mortgage creating the several series of First Mortgage
Bonds presently outstanding under such Supplemental Indentures shall not
apply to, or be for the benefit of, the 2004 Bonds, and the Company reserves
the right, without any consent of, or other action by, the holders of the
2004 Bonds, to amend, modify or delete the provisions of the Mortgage
relating to such Maintenance and Improvement Fund, and by acceptance of the
2004 Bonds, the holders thereof waive any right or privilege so to consent or
take any other action with respect thereto.

  Section 6. The Company covenants that, so long as any of the 2004 Bonds
shall remain outstanding, it will comply with all of the provisions of
Section 47 of the Original Mortgage, including the provisions with respect
to limitations on dividends and distributions and the purchase and
redemption of stock.

  Section 7. The Trustee hereby accepts the trusts herein declared, provided
and created and agrees to perform the same upon the terms and conditions
herein and in the Mortgage set forth and upon the following terms and
conditions:

  The recitals contained herein and in the bonds shall be taken as the state-
ments of the Company, and the Trustee assumes no responsibility for the cor-
rectness of the same. The Trustee makes no representations as to the validity
or adequacy of the security afforded hereby, or as to the validity of this
Thirty-Ninth Supplemental Indenture or of the bonds issued hereunder.

  Section 8. Whenever in this Thirty-Ninth Supplemental Indenture either of
the parties hereto is named or referred to, this shall, subject to the
provisions of Article XVII of the Original Mortgage, be deemed to include
the successors or assigns of such party, and all the covenants and
agreements in this Thirty-Ninth Supplemental Indenture contained by or on
behalf of the Company, or by or on behalf of the Trustee, shall, subject as
aforesaid, bind and inure to the benefit of the respective successors and
assigns of such parties, whether so expressed or not.

  Section 9. Nothing in this Thirty-Ninth Supplemental Indenture, expressed
or implied, is intended or shall be construed to confer upon, or to give to,
any person, co-partnership or corporation, other than the parties hereto and
the holders of the bonds and coupons outstanding under the Mortgage, any
right, remedy, or claim under or by reason of this Thirty-Ninth Supplemental
Indenture or any covenant, condition or stipulation hereof; and all the
covenants, conditions, stipulations, promises and agreements in this
Thirty-Ninth Supplemental Indenture contained by or on behalf of the Company
shall be for the sole and exclusive benefit of the parties hereto and of the
holders of the bonds and of the coupons outstanding under the Mortgage.

  Section 10. The Company covenants that all of the terms, provisions and
conditions of the Mortgage shall be applicable to the 2004 Bonds issued
hereunder, except as herein otherwise provided and except insofar as
the same may be inconsistent with the provisions of this Thirty-Ninth
Supplemental Indenture.

  Section 11. This Thirty-Ninth Supplemental Indenture is dated as of
February 1, 1994, although executed and delivered on the date of
the acknowledgment hereof by the Trustee; and shall be simultaneously
executed and delivered in several counterparts, and all such counterparts
executed and delivered, each as an original, shall constitute but one and
the same instrument.

  In Witness Whereof, Indianapolis Power & Light Company, party of the first
part, has caused its corporate name to be hereunto affixed and this
instrument to be signed and acknowledged by its President or a Vice-
President, and its corporate seal to be hereto affixed and attested by its
Secretary or an Assistant Secretary, for and in its behalf, and American
National Bank and Trust Company of Chicago, party of the second part, as
Trustee, has caused its corporate name to be hereunto affixed and this
instrument to be signed and acknowledged by one of its Vice-Presidents, and
its corporate seal to be hereto affixed and attested by one of its Assistant
Secretaries, all as of the day, month and year first above written.

                               Indianapolis Power & Light Company

(Seal)

Attest:                        By  /s/ Marcus E. Woods
                                   Marcus E. Woods,
                                   Vice-President.

/s/ Clark L. Snyder
      Clark L. Snyder,
    Assistant Secretary.

                                American National Bank and Trust
                                          Company of Chicago,

(Seal)

Attest:                         By  /s/ Ronald B. Bremen
                                    Ronald B. Bremen,
                                    Vice-President.
/s/ Robert M. Selangowski
    Robert M. Selangowski,
    Assistant Secretary.

State of Indiana     )
                     )  ss.:
County of Marion     )

  On this 28th day of January, in the year 1994, before me, a Notary Public
in and for the County and State aforesaid, personally came Marcus E. Woods,
Vice-President, and Clark L. Snyder, Assistant Secretary, of Indianapolis
Power & Light Company, one of the corporations described in and which
executed the foregoing instrument, to me personally known and known to
me personally to be such Vice-President, and Assistant Secretary,
respectively. Said Marcus E. Woods, and Clark L. Snyder being by me severally
duly sworn did depose and say that the said Marcus E. Woods resides in
Hendricks County, Indiana and the said Clark L. Snyder resides in Marion
County, Indiana; that said Marcus E. Woods is Vice-President and said
Clark L. Snyder is Assistant Secretary of said Indianapolis Power & Light
Company; that each of them knows the corporate seal of said corporation;
that the seal affixed to said instrument and bearing the name of said
corporation is such corporate seal; that is was so affixed by order of
the Board of Directors of said corporation; and that each of them signed his
name thereto by like order; and each of them acknowledged the execution of
said instrument on behalf of said corporation to be his free and voluntary
act and deed and the free and voluntary act and deed of said corporation, for
the uses and purposes therein set forth.

  In Witness Whereof, I have hereunto set my hand and affixed my official
seal this 28th day of January, 1994.

                                        /s/ Gloria K. Bryant
                                        Gloria K. Bryant
                                        Notary Public.

My Commission Expires:
  June 11, 1995

My County of Residence is:
  Marion

(Notarial Seal)

State of Illinois    )
                     )  ss.:
County of Cook       )

  On this 27th day of January, in the year 1994, before me, a Notary Public
in and for the County and State aforesaid, personally came Ronald B. Bremen,
Vice-President, and Robert M. Selangowski, Assistant Secretary, of Ameri-
can National Bank and Trust Company of Chicago, one of the corporations de-
scribed in and which executed the foregoing instrument, to me personally
known and known to me personally to be such Vice-President and Assistant
Secretary, respectively. Said Ronald B. Bremen, and Robert M. Selangowski,
being by me severally sworn did depose and say that the said Ronald
B. Bremen, resides in Glencoe, Illinois, and that the said Robert M.
Selangowski resides in Lansing, Illinois; that said Ronald B. Bremen is
Vice-President and said Robert M. Selangowski is Assistant Secretary of said
American National Bank and Trust Company of Chicago; that each of them knows
the corporate seal of said corporation; that the seal affixed to said
instrument and bearing the name of said corporation is such corporate seal;
that is was so affixed by authority of the Board of Directors of said
corporation; that each of them signed his name thereto by like authority; and
each of them acknowledged the execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and the free and
voluntary act and deed of said corporation, for the uses and purposes
therein set forth.

  In Witness Whereof, I have hereunto set my hand and affixed my official
seal this 27th day of January, 1994.

                                /s/ Bernadette G. Janairo
                                Bernadette G. Janairo
                                Notary Public.

(Notarial Seal)

My Commission Expires: May 22, 1994

My County of Residence is:
  Cook

                        This instrument was prepared by
                                Marcus E. Woods,
                                Attorney at Law

<PAGE>

                                                                  Exhibit 4.4.10

                      INDIANAPOLIS POWER & LIGHT COMPANY

                                      TO

                       AMERICAN NATIONAL BANK AND TRUST
                              COMPANY OF CHICAGO
                                                TRUSTEE

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

                        FORTIETH SUPPLEMENTAL INDENTURE

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

                         DATED AS OF FEBRUARY 1, 1994

                      ESTABLISHING FIRST MORTGAGE BONDS,

                            7.05% SERIES, DUE 2024

                               TABLE OF CONTENTS*

                                       OF

                      FORTIETH SUPPLEMENTAL INDENTURE

                                       OF

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                PAGE
                                                                ----
Parties..................................................         1
Recitals.................................................         1
Section 1   Granting clauses.............................         3
              Part I   Electric Distributing Systems.....         3
              Part II  Steam and Hot Water Distributing
                         Systems.........................         4
              Part III Indeterminate Permits and
                         Franchises......................         4
              Part IV  Other Property....................         5
              General and after-acquired title...........         6
Section 2   Designation of thirty-eighth series of bonds
              and kind and denominations thereof.........         6
            Record date for payment of interest..........         7
            Designation of American National Bank and
              Trust Company of Chicago as paying
              agent......................................         7
            Bonds issued in book-entry form..............         7
            Exchange of bonds............................        10
            Transfer of bonds............................        10
            Series limited to $100,000,000...............        10
Section 3   Form of fully registered bond................        10
            Form of Trustee's certificate on bonds.......        12
Section 4   Temporary bonds..............................        15
Section 5   Annual Payments for Maintenance and
              Improvement Fund...........................        16
Section 6   Compliance with Section 47 of Original
              Mortgage with respect to dividend
              restrictions...............................        16
Section 7   Acceptance of trusts by Trustee and
              conditions of acceptance...................        16
Section 8   Successors and assigns.......................        16
Section 9   Limitation of rights hereunder...............        17

______________________________
  *Table of Contents is not part of the Fortieth Supplemental
Indenture and should not be considered such. It is included
herein only for purposes of convenient reference.

                                                                PAGE
                                                                ----
Section 10  Compliance with terms, provisions and
              conditions of Mortgage.....................        17
Section 11  Execution in counterparts....................        17
Testimonium..............................................        18
Signatures and Seals.....................................        18
Acknowledgements.........................................        19

                                       ii

  THIS FORTIETH SUPPLEMENTAL INDENTURE, dated as of February 1, 1994,
between Indianapolis Power & Light Company, a corporation of the
State of Indiana, hereinafter sometimes called the "Company," party of the
first part, and American National Bank and Trust Company of Chicago, a
national banking association, as Trustee, hereinafter sometimes called the
"Trustee," party of the second part;

  Whereas, the Company by a Mortgage and Deed of Trust (hereinafter
sometimes called the "Original Mortgage" when referred to as existing
prior to any supplement thereto or modification thereof, and the
"Mortgage" when referred to as now or heretofore supplemented and modified)
dated as of May 1, 1940, made to said American National Bank and Trust
Company of Chicago, as Trustee, to secure the payment of the bonds issued
from time to time under the Mortgage for the purposes of and subject to the
limitations specified in the Mortgage, and to secure the performance of the
covenants therein contained, conveyed to the Trustee thereunder upon certain
trusts, terms and conditions, and with and subject to certain provisos and
covenants therein contained, all and singular the property, rights and
franchises which the Company then owned or should thereafter acquire,
excepting the property expressly excepted by the terms of the Original
Mortgage or any indenture supplemental thereto, to which Mortgage reference
is hereby made for greater certainty; and

  Whereas, the Original Mortgage has been supplemented and modified by
supplemental indentures dated as of May 1, 1942, as of February 1, 1948, as
of April 1, 1949, two as of October 1, 1949, as of February 1, 1951, as of
March 1, 1953, as of June 1, 1956, as of March 1, 1958, as of October 1,
1960, as of August 1, 1964, as of April 1, 1966, as of May 1, 1967, as of
May 1, 1968, as of October 1, 1970, as of March 1, 1972, as of March 15,
1973, as of February 15, 1974, as of August 15, 1974, as of September 15,
1975, as of June 1, 1976, as of July 1, 1976, as of August 1, 1977, as of
September 1, 1978, two as of August 1, 1981, as of November 1, 1983, as of
November 1, 1984, as of December 1, 1984, as of September 1, 1985, as of
October 1, 1986, as of June 1, 1989, as of August 1, 1989, as of October 15,
1991, as of August 1, 1992, as of April 1, 1993, two as of October 1, 1993
and as of February 1, 1994.

  Whereas, Section 8 of the Original Mortgage provides, among other things,
that the form of each series of bonds (other than the initial issue of bonds)
issued thereunder shall be established by an
indenture supplemental thereto authorized by resolution of the Board of
Directors of the Company, and that the form of each series, as established
by the Board of Directors, shall specify the descriptive title of the bonds
and various other terms thereof, and may also contain other provisions as
the Board of Directors may, in its discretion, cause to be inserted therein
expressing or referring to the terms and conditions upon which such bonds
are to be issued and secured under the Original Mortgage or any indenture
supplemental thereto or in modification thereof; and

  Whereas, the Company now desires to provide for the establishment, execu-
tion, authentication and delivery under the Mortgage of bonds of a series to
be known as its "First Mortgage Bonds, 7.05% Series, due 2024" (the bonds of
said series being hereinafter sometimes referred to as the "2024 Bonds"), lim-
ited to the aggregate principal amount of One Hundred Million Dollars
($100,000,000); and

  Whereas, all things necessary to make the 2024 Bonds hereinafter described,
when duly executed by the Company and authenticated and delivered by the
Trustee, valid, binding and legal obligations of the Company, and to make this
Fortieth Supplemental Indenture a valid and binding agreement supplemental to
the Original Mortgage, have been done and performed; and

  Whereas, the execution and delivery by the Company of this Fortieth Supple-
mental Indenture, and the terms of the 2024 Bonds, have been duly authorized
by the Board of Directors of the Company by appropriate resolutions of said
Board; and

  Whereas, it is provided in and by the Original Mortgage that the Company
will execute and deliver such further instruments and do such further acts as
may be necessary or proper to carry out more effectually the purposes of the
Mortgage, and to make subject to the lien thereof any property thereafter ac-
quired and intended to be subject to the lien thereof; and

  Whereas, the Company has, since the date of execution and delivery of the
Original Mortgage, purchased and acquired property and desires by this Forti-
eth Supplemental Indenture specifically to convey to the Trustee such
property for the better protection and security of the bonds issued and to
be issued under the Original Mortgage, or any indenture supplemental thereto;

  Now, Therefore, This Indenture Witnesseth that, in consideration of the
premises and of the acceptance or purchase of the 2024 Bonds by the
registered owners thereof, and of the sum of one dollar, lawful money
of the United States of America, to the Company duly paid by the Trustee at
or before the execution and delivery of this Fortieth Supplemental Indenture,
the receipt whereof is hereby acknowledged, the Company and the Trustee,
respectively, have entered into, executed and delivered this Fortieth
Supplemental Indenture, for the uses and purposes hereinafter expressed,
that is to say:

  Section 1. The Company has granted, bargained, sold, released, conveyed, as-
signed, transferred, mortgaged, pledged, set over and confirmed, and by these
presents does grant, bargain, sell, release, convey, assign, transfer, mort-
gage, pledge, set over and confirm (subject, however, to permitted
encumbrances as defined in the Original Mortgage), unto said American
National Bank and Trust Company of Chicago, as Trustee, as herein provided,
and its successors in the trusts declared in the Original Mortgage and
herein, all of the property, real, personal and mixed, tangible and
intangible, of every kind, character and description which the Company has
acquired since the execution and delivery of the Original Mortgage and now
owns (except property, rights and assets of a character similar to that
excluded from the lien and operation of the Mortgage by the Granting Clauses
of the Original Mortgage, which property, rights and assets are excluded from
the lien and operation of the Mortgage only to the extent provided therein),
including, but without otherwise limiting the generality of the foregoing,
the following described property situated within the state of Indiana:

                                    PART I.

                         ELECTRIC DISTRIBUTING SYSTEMS.

  All electric distributing systems of the Company acquired by it after May 1,
1940, the date of the Original Mortgage, and located in the Counties of Bar-
tholomew, Boone, Daviess, Greene, Hamilton, Hancock, Hendricks, John-
son, Knox, Madison, Marion, Monroe, Morgan, Owen, Pike, Putnam, Shelby and
Sullivan, State of Indiana; and any additions to or extensions of any such
systems, together with the buildings, erections, structures, transmission
lines, power stations, sub-stations, engines, boilers, condensers, pumps,
turbines, machinery, tools, conduits, manholes, insulators, dynamos, motors,
lamps, cables, wires, poles, towers, cross-arms, piers, abutments,
switchboard equipment, meters, appliances, instruments, apparatus,
appurtenances, maps, records, ledgers, contracts, facilities and other
property or equipment used or provided for use in connection with the
construction, maintenance, repair and operation thereof; together also with
all of the rights, privileges, rights-of-way, franchises, licenses, grants,
liberties, immunities, ordinances, permits and easements of the Company in
respect of the construction, maintenance, repair and operation of said
systems.

                                    PART II.

                   STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

  All the steam and hot water distributing systems acquired by the Company af-
ter May 1, 1940, the date of the Original Mortgage, and located in the City
of Indianapolis, Marion County, Indiana, and any additions to or extensions of
any such systems; together with the buildings, erections, structures, boilers,
heaters, engines, tanks, pipe lines, mains, connections, service pipes,
meters, tools, instruments, appliances, apparatus, facilities, machinery and
other property and equipment used or provided for use in the construction,
maintenance, repair and operation thereof; and together also with all of the
rights, privileges, rights-of-way, franchises, licenses, grants, liberties,
immunities, ordinances, permits and easements of the Company in respect of
the construction, maintenance, repair and operation of said systems.

                                   PART III.

                     INDETERMINATE PERMITS AND FRANCHISES.

  All indeterminate permits, franchises, ordinances, licenses, and other
authorizations by or from any state, county, municipality, or other
governmental authority, acquired by the Company after May 1, 1940, the
date of the Original Mortgage, including particularly, but not limited to,
any indeterminate permits under the Public Service Commission Act of the
State of Indiana, and all Acts amendatory thereof and supplemental thereto,
and all right, title and interest therein now owned by the Company, and all
renewals, extensions and modifications of said indeterminate permits,
franchises, ordinances, licenses, and other authorizations, and of the
indeterminate permits, franchises, ordinances, licenses, and other
authorizations referred to in Part VII of the Granting Clauses of the
Original Mortgage.

                                    PART IV.

                                OTHER PROPERTY.

  All other property, whether real, personal or mixed (except any in the Mort-
gage expressly excepted), now owned by the Company and wheresoever situated,
including (without in anywise limiting or impairing by the enumeration of the
same the scope and intent of the foregoing or of any general description con-
tained in the Mortgages) all lands, flowage rights, water rights, flumes,
raceways, dams, rights-of-way and roads; all plants for the generation of
electricity by water, steam and/or other power, power houses, telephone
systems, water systems, steam heat and power plants, hot water plants,
sub-stations, transmission lines, distribution systems, bridges, culverts and
tracks; all offices, buildings and structures and the equipment thereof; all
machinery, engines, boilers, dynamos, machines, regulators, meters,
transformers, generators and motors; all appliances whether electrical, gas
or mechanical, conduits, cables and lines; all pipes whether for water, steam
heat and power, or other purposes; all mains and pipes, service pipes,
fittings, valves and connections, poles, wires, tools, implements, apparatus,
furniture and chattels; all municipal franchises, indeterminate permits, and
other permits; all lines for the transportation, transmission and/or
distribution of electric current, steam heat and power or water for any
purpose, including towers, poles, wires, cables, pipes, conduits and all
apparatus for use in connection therewith; all real estate, lands, leases,
leaseholds; all contracts, whether heat, light, power, water or street
lighting contracts; all easements, servitudes, licenses, permits, rights,
powers, franchises, privileges, rights-of-way and other rights in or
relating to real estate or the occupancy of the same and (except as here-
inafter or in the Mortgage expressly excepted) all the right, title and
interest of the Company in and to all other property of any kind or nature
appertaining to and/or used and/or occupied and/or enjoyed in connection
with any property hereinbefore described or referred to;

  Together with all and singular the tenements, hereditaments and appurte-
nances belonging or in anywise appertaining to the aforesaid property or any
part thereof, with the reversion and reversions, remainder and remainders and
(subject to the provisions of Section 64 of the Original Mortgage), the
tools, rent, revenues, issues, earnings, income, product and profits thereof,
and all the estate, right, title and 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, indeterminate permits, franchises, ordinances,
licenses and other authorizations and every part and parcel thereof.

  Section 2. There shall be and is hereby established a series of bonds, lim-
ited in aggregate principal amount to One Hundred Million Dollars
($100,000,000) to be issued under and secured by the Mortgage, to be desig-
nated "7.05% Series, due 2024", each of which shall also bear the descriptive
title "First Mortgage Bonds"; said bonds shall mature on February 1, 2024,
and shall be issued only as fully registered bonds without coupons in the
denomination of one thousand dollars and any larger denomination which is a
multiple of one thousand dollars; they shall bear interest from the
beginning of the current interest period during which each bond is dated,
at the rate per annum designated in the title thereof, payable semi-annually,
on February 1 and August 1 of each year; and the principal of, premium, if
any, and interest on each said bond shall be payable in lawful money of the
United States of America at the office or agency of the Company in the City
of Chicago, Illinois. The person in whose name any such bond is registered at
the close of business on any record date (as hereinafter defined) with
respect to any interest payment date shall be entitled to receive the
interest payable on 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 on 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 with respect to payment of interest in default may be established by or
in behalf of the Company by notice mailed to the holders of the 2024 Bonds
not less than ten (10) days preceding such record date, which record date
shall not be more than thirty (30) 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 tenth day next preceding
such interest payment date, or, if such tenth day shall be a legal holiday
or a day on which banking institutions in the City of Chicago, Illinois, are
authorized by law to close, the day next succeeding such tenth day which
shall not be a legal holiday or a day on which such institutions are
authorized to close.

  American National Bank and Trust Company of Chicago is hereby designated
and appointed the office and agency of the Company for the payment of the
principal of, premium, if any, and interest on the 2024 Bonds and
for the registration, transfer and exchange of such bonds as hereinafter
provided; all reference herein to the office or agency of the Company for
the payment of the principal of, premium, if any, and interest on the 2024
Bonds, or the registration, transfer or exchange thereof, being to American
National Bank and Trust Company of Chicago. In the event of the resignation
or inability to act of American National Bank and Trust Company of Chicago,
then a successor agent for all such purposes in the City of Chicago,
Illinois, shall be appointed by the Board of Directors of the Company.

  The 2024 Bonds shall be dated as of the date of authentication thereof, ex-
cept as otherwise provided in Section 10 of the Original Mortgage.

  The 2024 Bonds shall initially be issued and held in book-entry form on the
books of the central depository system, The Depository Trust Company, its suc-
cessors, or any successor central depository system appointed by the Company
from time to time (the "Clearing Agency"). The Company and the Trustee may,
in connection herewith, do or perform or cause to be done or performed any
acts or things not adverse to the rights of the holders of the 2024 Bonds,
as are necessary or appropriate to accomplish or recognize such
book-entry form 2024 Bonds.

  So long as the 2024 Bonds remain and are held in book-entry form on the
books of a Clearing Agency, then (a) any such 2024 Bond may be registered
upon the books kept by the Trustee in the name of such Clearing Agency, or
any nominee thereof, including Cede & Co., as nominee of The Depository
Trust Company; (b) the Clearing Agency in whose names such 2024 Bond is so
registered shall be, and the Company and the Trustee may deem and treat such
Clearing Agency as, the absolute owner and holder of such 2024 Bond for all
purposes of the Indenture, including, without limitation, the receiving of
payment of the principal of, premium, if any, and interest on such 2024
Bond, the receiving of notice and giving of consent; (c) neither the Company
nor the Trustee shall have any responsibility or obligation hereunder to any
direct or indirect participant, within the meaning of Section 17A of the
Securities Exchange Act of 1934, as amended, of such Clearing Agency, or any
person on behalf of which, or otherwise in respect of which, any such
participant holds any interest in any 2024 Bond, including, without
limitation, any responsibility or obligation hereunder to maintain accurate
records of any beneficial interests in any 2024 Bond or any responsibility
or obligation hereunder with respect to the receiving by such participants
or the beneficial owners of payment of principal, premium, if any, or
interest on any 2024 Bonds, the receiving by such participants or the
beneficial owners of notice or the giving of consent by such participants or
the beneficial owners; and (d) the Clearing Agency is not required to present
any 2024 Bond called for partial redemption prior to receiving payment so
long as the Trustee and the Clearing Agency have agreed to the method for
noting such partial redemption.

  If (a) the Company receives notice from the Clearing Agency which is cur-
rently the registered owner of the 2024 Bonds to the effect that such
Clearing Agency is unable or unwilling to discharge its responsibility as a
Clearing Agency for the 2024 Bonds or (b) the Company elects to discontinue
its use of such Clearing Agency as a Clearing Agency for the 2024 Bonds, then
the Company and Trustee each shall do or perform or cause to be done or
performed all acts or things, not adverse to the rights of the holders of
the 2024 Bonds, as are necessary or appropriate to discontinue use of such
Clearing Agency as a Clearing Agency for the 2024 Bonds and to transfer the
ownership of each of the 2024 Bonds to such person or persons, including any
other Clearing Agency, as the holder of the 2024 Bonds may direct in
accordance with the Indenture. Any expenses of such discontinuance and
transfer, including expenses of printing new certificates to evidence the
2024 Bonds, shall be paid by the Company.

  So long as the 2024 Bonds remain and are held in book-entry form on the
books of a Clearing Agency, the Trustee shall be entitled to request and rely
upon a certificate or other written representation from the Clearing Agency
or any participant or indirect participant with respect to the identity of
any beneficial owners of the 2024 Bonds as of a record date selected by the
Trustee. For purposes of determining whether the consent, advice, direction
or demand of a Bondholder has been obtained, the Trustee shall be entitled to
treat the beneficial owners of the 2024 Bonds as the Bondholders and any
consent, request, direction, approval, objection or other instrument of such
beneficial owner may be obtained in the same fashion described in the
Indenture.

  Upon the notice and in the manner and with the effect provided in the Mort-
gage and in this Section 2, the 2024 Bonds shall be redeemable prior to the
maturity thereof, as a whole at any time or in part from time to time, at the
option of the Company, at the principal amount thereof and accrued interest to
the date of redemption, and at the redemption prices set forth under the head-
ing "Redemption Price" in the form of 2024 Bonds hereinafter recited, if re-
deemed otherwise than in the manner provided in the next paragraph, provided,
however, that none of the 2024 Bonds may be redeemed prior to February 1,
2004.

  Upon the notice and in the manner and with the effect provided in the Mort-
gage and in this Section 2, the 2024 Bonds shall be redeemable by the Company
prior to the maturity thereof out of monies deposited with the Trustee repre-
senting the proceeds of mortgaged and pledged property taken by the exercise
of the power of eminent domain or otherwise as provided in paragraph B of Sec-
tion 69 of the Mortgage, at the principal amount of the 2024 Bonds as to be
redeemed and accrued interest to the date of redemption.

  The notice required for the redemption of the 2024 Bonds shall be as pro-
vided in Section 59 of the Mortgage.

  At the option of the holder, any 2024 Bond, upon surrender thereof at said
office or agency of the Company together with a written instrument of
transfer in form approved by the Company duly executed by the holder or by
his duly authorized attorney, shall be exchangeable for a like aggregate
principal amount of fully registered bonds of the same series of other
authorized denominations.

  The 2024 Bonds shall be transferable on the books of the Company at said of-
fice or agency of the Company in the City of Chicago, Illinois, by the regis-
tered holder thereof, in person or by his duly authorized attorney, upon sur-
render thereof for cancellation.

  The Company shall not be required to make transfers or exchanges of any of
the 2024 Bonds for a period of ten (10) days next preceding any interest
payment date of said bonds.

  No charge shall be made upon any transfer or exchange of any of the 2024
Bonds other than for any tax or taxes or other governmental charge required
to be paid by the Company.

  The 2024 Bonds shall be limited to an aggregate principal amount of One Hun-
dred Million Dollars ($100,000,000) and shall be issued under the provisions
of Article VI of the Original Mortgage.

  Section 3. The 2024 Bonds, and the Trustee's Certificate to be endorsed
thereon, shall be in the following forms, respectively:

                            [form of face of bond]

                      INDIANAPOLIS POWER & LIGHT COMPANY

                  First Mortgage Bond, 7.05% Series, Due 2024
                             Due February 1, 2024
No.......                                                $......

  Indianapolis Power & Light Company, a corporation of the State of Indiana
(hereinafter called the Company), for value received, hereby promises to pay
to           or registered assigns, on February 1, 2024, at the office or
agency of the Company in the City of Chicago, Illinois, Dollars in
lawful money of the United States of America, and to pay to the registered
owner hereof interest thereon from the first day of February or the first day
of August next preceding the date of this bond, at the rate of 7.05 per
centum per annum in like lawful money, at said office or agency on February
1 and August 1 in each year, until the Company's obligation with respect to
the payment of such principal shall have been discharged. The interest
payable hereunder on February 1 or August 1 will, subject to the exception
provided in Section 2 of the Fortieth Supplemental Indenture hereinafter
mentioned, be paid to the person in whose name this bond is registered
at the close of business on the record date, which shall be the tenth day
next preceding such interest payment date or, if such tenth day shall be a
legal holiday or a day on which banking institutions in the City of Chicago,
Illinois, are authorized by law to close, the day next succeeding such tenth
day which shall not be a legal holiday or a day on which such institutions
are authorized to close.

  REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE
REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE
SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.

  This bond shall not become obligatory until American National Bank and Trust
Company of Chicago, the Trustee under the Mortgage, or its successor thereun-
der, shall have signed the form of certificate endorsed hereon.

  In Witness Whereof, Indianapolis Power & Light Company has caused this bond
to be signed in its name by its President or one of its Vice-Presidents, by
his signature or a facsimile thereof, and a facsimile of its corporate seal
to be imprinted hereon, attested by its Secretary or one of its Assistant
Secretaries, by his signature or a facsimile thereof.

                             Indianapolis Power & Light Company

Dated.....................   By......................................
                                          President.

Attest:

By......................................
Secretary.

                    [form of trustee's certificate on bonds]

                             Trustee's Certificate

  This bond is one of the bonds, of the series herein designated, provided for
in the within-mentioned Mortgage and Fortieth Supplemental Indenture.

                                American National Bank and Trust
                                  Company of Chicago, Trustee

                                By......................................
                                          Authorized Signature

                        [form of reverse side of bond]

                      INDIANAPOLIS POWER & LIGHT COMPANY

                  First Mortgage Bond, 7.05% Series, Due 2024
                             Due February 1, 2024

  This bond is one of an issue of bonds of the Company, issuable in series,
and is one of a series known as its First Mortgage Bonds, 7.05% Series, due
2024 (herein sometimes called the "2024 Bonds") limited in aggregate principal
amount to One Hundred Million Dollars ($100,000,000) and established by a For-
tieth Supplemental Indenture, dated as of February 1, 1994, all bonds of all
series issued and to be issued under and equally secured (except insofar as
any sinking or other fund, established in accordance with the provisions of
the Mortgage hereinafter mentioned, may afford additional security for the
bonds of any particular series) by a Mortgage and Deed of Trust, dated as of
May 1, 1940, executed by the Company to American National Bank and Trust Com-
pany of Chicago, as Trustee (which Mortgage and Deed of Trust as supplemented
and modified by all supplemental indentures thereto is hereinafter referred to
as the "Mortgage"), to which Mortgage reference is made for a description of
the property mortgaged and pledged, the nature and extent of the security,
the rights of the bearers or registered owners of the bonds in respect of
such security, the duties and immunities of the Trustee and the terms and
conditions Upon which the bonds are secured.

  With the consent of the Company and to the extent permitted by and as pro-
vided in the Mortgage, the rights and obligations of the Company and/or of the
holders of the bonds and/or coupons and/or the terms and provisions of the
Mortgage and/or any instruments supplemental thereto may be modified or al-
tered by affirmative vote of the holders of at least sixty-six and two-thirds
per centum (66 2/3%) in principal amount of the bonds affected by such modifi-
cation or alteration then outstanding under the Mortgage (excluding bonds dis-
qualified from voting by reason of the Company's interest therein as provided
in the Mortgage); provided that no such modification or alteration shall per-
mit the extension of the maturity of the principal of this bond or the reduc-
tion in the rate of interest hereon or any other modification in the terms
of payment of such principal or interest without the consent of the holder
hereof. The principal hereof may be declared or may become due and payable
prior to the stated date of maturity hereof, on the conditions, in the manner
and at the time set forth in the Mortgage, upon the occurrence of a completed
default as in the Mortgage provided.

  The 2024 Bonds are issuable only in fully registered form without coupons in
the denomination of one thousand dollars and any larger denomination which is a
multiple of one thousand dollars. In the manner and upon payment of the
charges hereinafter mentioned, the 2024 Bonds, upon surrender thereof at the
office or agency of the Company in the City of Chicago, Illinois, together
with a written instrument of transfer in form approved by the Company
duly executed by the registered holder or by his duly authorized attorney,
are exchangeable for a like aggregate principal amount of fully registered
bonds of the same series of other authorized denominations.

  This bond 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 City of Chicago, Illinois, upon surrender and
cancellation of this bond and upon presentation of a written instrument of
transfer, duly executed and upon payment of the charges hereinafter
mentioned, and, thereupon, a new fully registered bond of the same series
for a like principal amount will be issued to the transferee in exchange
herefor as provided in the Mortgage. The Company and the Trustee may deem
and treat the person in whose name this bond is registered as the absolute
owner hereof for the purpose of receiving payment and for all other purposes.

  No charge shall be made upon any transfer or exchange of any of the 2024
Bonds other than for any tax or taxes or other governmental charge required to
be paid by the Company.

  The Company shall not be required to make transfers or exchanges of any of
the 2024 Bonds for a period of ten (10) days next preceding any interest pay-
ment date of said bonds.

  The 2024 Bonds are subject to redemption prior to the maturity thereof, as
a whole at any time or in part from time to time, at the option of the
Company, at the redemption prices set forth below under the heading "Redemp-
tion Price" plus accrued interest to the date of redemption if redeemed other-
wise than in the manner provided in the next paragraph, provided, however,
that none of the 2024 Bonds may be redeemed prior to February 1, 2004.

   IF REDEEMED
DURING THE TWELVE
 MONTHS' PERIOD
 ENDING WITH THE
THIRTY-FIRST DAY
OF JANUARY OF THE               REDEMPTION
   YEAR STATED                  PRICE
- -------------------             ----------
   2005.........                103.31%
   2006.........                102.98%
   2007.........                102.65%
   2008.........                102.32%
   2009.........                101.99%

   IF REDEEMED
DURING THE TWELVE
 MONTHS' PERIOD
 ENDING WITH THE
THIRTY-FIRST DAY
OF JANUARY OF THE               REDEMPTION
   YEAR STATED                  PRICE
- -------------------             ----------
   2010.........                101.66%
   2011.........                101.32%
   2012.........                100.99%
   2013.........                100.66%
   2014.........                100.33%

and 100% if redeemed after January 31, 2014.

  Upon the notice and in the manner and with the effect provided in the
Mortgage and in this Section 2, the 2024 Bonds shall be redeemable by the
Company prior to the maturity thereof out of monies deposited with the
Trustee representing the proceeds of mortgaged and pledged property taken by
the exercise of the power of eminent domain or otherwise as provided in
paragraph B of Section 69 of the Mortgage, at the principal amount of the
2024 Bonds as to be redeemed and accrued interest to the date of redemption.

  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, as such, 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 other-
wise, all such liability of incorporators, subscribers, stockholders, officers
and directors, as such, being waived and released by the terms of the Mort-
gage.

  Section 4. Until the 2024 Bonds in definitive form are ready for delivery,
the Company may execute, and upon its request in writing the Trustee shall
authenticate and deliver, in lieu thereof, fully registered 2024 Bonds in tem-
porary form, as provided in Section 15 of the Original Mortgage. Such bonds
may, in lieu of the statement of the specific redemption prices required to be
set forth in such bonds in definitive form, include a reference to this Forti-
eth Supplemental Indenture for a statement of such redemption prices.

  Section 5. The covenant of the Company to make annual payments to the
Trustee for a Maintenance and Improvement Fund as contained in Section 41 of
the Original Mortgage and in the first twenty-four Supplemental Indentures to
the Original Mortgage creating the several series of First Mortgage Bonds
presently outstanding under such Supplemental Indentures shall not apply to,
or be for the benefit of, the 2024 Bonds, and the Company reserves the
right, without any consent of, or other action by, the holders of the 2024
Bonds, to amend, modify or delete the provisions of the Mortgage relating to
such Maintenance and Improvement Fund, and by acceptance of the 2024 Bonds,
the holders thereof waive any right or privilege so to consent or take any
other action with respect thereto.

  Section 6. The Company covenants that, so long as any of the 2024 Bonds
shall remain outstanding, it will comply with all of the provisions of
Section 47 of the Original Mortgage, including the provisions with
respect to limitations on dividends and distributions and the purchase and
redemption of stock.

  Section 7. The Trustee hereby accepts the trusts herein declared, provided
and created and agrees to perform the same upon the terms and conditions herein
and in the Mortgage set forth and upon the following terms and conditions:

  The recitals contained herein and in the bonds shall be taken as the state-
ments of the Company, and the Trustee assumes no responsibility for the cor-
rectness of the same. The Trustee makes no representations as to the validity
or adequacy of the security afforded hereby, or as to the validity of this
Fortieth Supplemental Indenture or of the bonds issued hereunder.

  Section 8. Whenever in this Fortieth Supplemental Indenture either of the
parties hereto is named or referred to, this shall, subject to the provisions
of Article XVII of the Original Mortgage, be deemed to include the successors
or assigns of such party, and all the covenants and agreements in this
Fortieth Supplemental Indenture contained by or on behalf of the Company, or
by or on behalf of the Trustee, shall, subject as aforesaid, bind and inure
to the benefit of the respective successors and assigns of such parties,
whether so expressed or not.

  Section 9. Nothing in this Fortieth Supplemental Indenture, expressed or im-
plied, is intended or shall be construed to confer upon, or to give to, any
person, co-partnership or corporation, other than the parties hereto and the
holders of the bonds and coupons outstanding under the Mortgage, any right,
remedy, or claim under or by reason of this Fortieth Supplemental Indenture
or any covenant, condition or stipulation hereof; and all the covenants,
conditions, stipulations, promises and agreements in this Fortieth
Supplemental Indenture contained by or on behalf of the Company shall be
for the sole and exclusive benefit of the parties hereto and of the holders
of the bonds and of the coupons outstanding under the Mortgage.

  Section 10. The Company covenants that all of the terms, provisions and con-
ditions of the Mortgage shall be applicable to the 2024 Bonds issued hereunder,
except as herein otherwise provided and except insofar as the same may be in-
consistent with the provisions of this Fortieth Supplemental Indenture.

  Section 11. This Fortieth Supplemental Indenture is dated as of February 1,
1994, although executed and delivered on the date of the acknowledgment hereof
by the Trustee; and shall be simultaneously executed and delivered in several
counterparts, and all such counterparts executed and delivered, each as an
original, shall constitute but one and the same instrument.

  In Witness Whereof, Indianapolis Power & Light Company, party of the first
part, has caused its corporate name to be hereunto affixed and this
instrument to be signed and acknowledged by its President or a Vice-
President, and its corporate seal to be hereto affixed and attested by its
Secretary or an Assistant Secretary, for and in its behalf, and American
National Bank and Trust Company of Chicago, party of the second part, as
Trustee, has caused its corporate name to be hereunto affixed and this
instrument to be signed and acknowledged by one of its Vice-Presidents, and
its corporate seal to be hereto affixed and attested by one of its Assistant
Secretaries, all as of the day, month and year first above written.

                               Indianapolis Power & Light Company

(Seal)

Attest:                        By /s/ Marcus E. Woods
                                    Marcus E. Woods,
                                    Vice-President.
/s/ Clark L. Snyder
Clark L. Snyder,
Assistant Secretary.

                                American National Bank and Trust
                                          Company of Chicago,

(Seal)

Attest:                         By /s/ Ronald B. Bremen
                                    Ronald B. Bremen,
                                    Vice-President.
/s/ Robert M. Selangowski
Robert M. Selangowski,
Assistant Secretary.

State of Indiana     )
                     )  ss.:
County of Marion     )

  On this 28th day of January, in the year 1994, before me, a Notary Public in
and for the County and State aforesaid, personally came Marcus E. Woods, Vice-
President, and Clark L. Snyder, Assistant Secretary, of Indianapolis Power &
Light Company, one of the corporations described in and which executed the
foregoing instrument, to me personally known and known to me personally to be
such Vice-President, and Assistant Secretary, respectively. Said Marcus E.
Woods, and Clark L. Snyder being by me severally duly sworn did depose and say
that the said Marcus E. Woods resides in Hendricks County, Indiana and the
said Clark L. Snyder resides in Marion County, Indiana; that said Marcus E.
Woods is Vice-President and said Clark L. Snyder is Assistant Secretary of
said Indianapolis Power & Light Company; that each of them knows the
corporate seal of said corporation; that the seal affixed to said instrument
and bearing the name of said corporation is such corporate seal; that is was
so affixed by order of the Board of Directors of said corporation; and that
each of them signed his name thereto by like order; and each of them
acknowledged the execution of said instrument on behalf of said corporation
to be his free and voluntary act and deed and the free and voluntary act and
deed of said corporation, for the uses and purposes therein set forth.

  In Witness Whereof, I have hereunto set my hand and affixed my official
seal this 28th day of January, 1994.

                                        /s/ Gloria K. Bryant
                                            Gloria K. Bryant
                                            Notary Public.

My Commission Expires:
  June 11, 1995

My County of Residence is:
  Marion

(Notarial Seal)

State of Illinois    )
                     )  ss.:
County of Cook       )

  On this 27th day of January, in the year 1994, before me, a Notary Public in
and for the County and State aforesaid, personally came Ronald B. Bremen, Vice-
President, and Robert M. Selangowski, Assistant Secretary, of American
National Bank and Trust Company of Chicago, one of the corporations
described in and which executed the foregoing instrument, to me personally
known and known to me personally to be such Vice-President and Assistant
Secretary, respectively. Said Ronald B. Bremen, and Robert M. Selangowski,
being by me severally sworn did depose and say that the said Ronald B.
Bremen, resides in Glencoe, Illinois, and that the said Robert M. Selangowski
resides in Lansing, Illinois; that said Ronald B. Bremen is Vice-President
and said Robert M. Selangowski is Assistant Secretary of said American
National Bank and Trust Company of Chicago; that each of them knows the
corporate seal of said corporation; that the seal affixed to said instrument
and bearing the name of said corporation is such corporate seal; that is was
so affixed by authority of the Board of Directors of said corporation; that
each of them signed his name thereto by like authority; and each of them
acknowledged the execution of said instrument on behalf of said corporation
to be his free and voluntary act and deed and the free and voluntary act and
deed of said corporation, for the uses and purposes therein set forth.

  In Witness Whereof, I have hereunto set my hand and affixed my official
seal this 27th day of January, 1994.

                                        /s/ Bernadette G. Janairo
                                        Bernadette G. Janairo
                                        Notary Public.

(Notarial Seal)

My Commission Expires: May 22, 1994

My County of Residence is:
  Cook

                        This instrument was prepared by
                                Marcus E. Woods,
                                Attorney at Law

<PAGE>

                                                                  Exhibit 4.4.11

                       INDIANAPOLIS POWER & LIGHT COMPANY

                                       TO

                       AMERICAN NATIONAL BANK AND TRUST
                               COMPANY OF CHICAGO
                                                TRUSTEE

                        FORTY-FIRST SUPPLEMENTAL INDENTURE

                        Dated as of January 15, 1995

                        ESTABLISHING FIRST MORTGAGE BONDS,

                            6-5.8% Series, Due 2024

                        TABLE OF CONTENTS*

                                of

                FORTY-FIRST SUPPLEMENTAL INDENTURE

                                of

                INDIANAPOLIS POWER & LIGHT COMPANY

                                                                Page
Parties                                                          1
Recitals                                                         1
Section 1  Granting clauses                                      3

             Part I   Electric Distributing Systems              4
             Part II  Steam and Hot Water
                      Distributing Systems                       4
             Part III Indeterminate Permits and
                      Franchises                                 5
             Part IV  Other Property                             5
             General and after-acquired title                    6

Section 2  Designation of Thirty-Ninth series of
             bonds and kind and denominations thereof            6
           Designation of Company or American
           National Bank and Trust Company of
           Chicago as paying agent                               7
           Purpose of bonds                                      7
           Redemption of bonds                                   8
           Exchange of bonds                                    12
           Transfer of bonds                                    13
           Series limited to $40,000,000                        13

Section 3  Form of fully registered bond                        13
           Form of Trustee's certificate on bonds               16

Section 4  Temporary bonds                                      19

Section 5  Payment of principal and interest;
             credits                                            19

Section 6  Annual Payments for Maintenance and
             Improvement Fund                                   20

Section 7  Compliance with Section 47 of Original
             Mortgage with respect to dividend
             restrictions                                       20

Section 8  Acceptance of trusts by Trustee and
             conditions of acceptance                           20

     *Table of Contents is not part of the Forty-First
Supplemental Indenture and should not be considered such.
It is included herein only for purposes of convenient reference.

                                                               Page

Section 9   Successors and assigns                              20

Section 10  Limitation of rights hereunder                      21

Section 11  Compliance with terms, provisions and
                conditions of Mortgage                          21

Section 12  Execution in counterparts                           21

Testimonium                                                     22

Signatures and Seals                                            22

Acknowledgements                                                23

THIS FORTY-FIRST SUPPLEMENTAL INDENTURE, dated as of January 15,
1995, between Indianapolis Power & Light Company, a corporation of the
State of Indiana, hereinafter sometimes called the ''Company,'' party
of the first part, and American National Bank and Trust Company of
Chicago, a national banking association, as Trustee, hereinafter
sometimes called the ''Trustee,'' party of the second part;

     Whereas, the Company by a Mortgage and Deed of Trust (hereinafter
sometimes called the ''Original Mortgage'' when referred to as existing
prior to any supplement thereto or modification thereof, and the
''Mortgage'' when referred to as now or heretofore supplemented and
modified) dated as of May 1, 1940, made to said American National Bank
and Trust Company of Chicago, as Trustee, to secure the payment of the
bonds issued from time to time under the Mortgage for the purposes of
and subject to the limitations specified in the Mortgage, and to secure
the performance of the covenants therein contained, conveyed to the
Trustee thereunder upon certain trusts, terms and conditions, and with
and subject to certain provisos and covenants therein contained, all
and singular the property, rights and franchises which the Company then
owned or should thereafter acquire, excepting the property expressly
excepted by the terms of the Original Mortgage or any indenture
supplemental thereto, to which Mortgage reference is hereby made for
greater certainty; and

     Whereas, the Original Mortgage has been supplemented and modified by
supplemental indentures dated as of May 1, 1942, as of February 1,
1948, as of April 1, 1949, as of October 1, 1949, as of February 1,
1951, as of March 1, 1953, as of June 1, 1956, as of March 1, 1958, as
of October 1, 1960, as of August 1, 1964, as of April 1, 1966, as of
May 1, 1967, as of May 1, 1968, as of October 1, 1970, as of March 1,
1972, as of March 15, 1973, as of February 15, 1974, as of August 15,
1974, as of September 15, 1975, as of June 1, 1976, as of July 1, 1976,
as of August 1, 1977, as of September 1, 1978, as of August 1, 1981, as
of November 1, 1983, as of November 1, 1984, as of December 1, 1984, as
of September 1, 1985, as of October 1, 1986, as of June 1, 1989, as of
August 1, 1989, as of October 15, 1991, as of August 1, 1992, as of
April 1, 1993, as of October 1, 1993 and as of February 1, 1994.

     Whereas, Section 8 of the Original Mortgage provides, among other
things, that the form of each series of bonds (other than the initial
issue of bonds) issued thereunder shall be established by an indenture
supplemental thereto authorized by resolution of the Board of Directors
of the Company, and that the form of each series, as established by the
Board of Directors, shall specify the descriptive title of the bonds
and various other terms thereof, and may also contain such other
provisions as the Board of Directors may, in its discretion, cause to
be inserted therein expressing or referring to the terms and conditions
upon which such bonds are to be issued and secured under the Original
Mortgage or any indenture supplemental thereto or in modification
thereof; and

     Whereas, the Company has entered into a Loan Agreement, dated as of
January 15, 1995 (hereinafter called the Loan Agreement'') with the
City of Petersburg, Indiana (the ''City''), in order to obtain funds
for the refunding of the aggregate principal amount of Forty Million
Dollars ($40,000,000) of the City's Pollution Control Revenue Bonds,
Series 1984 (Indianapolis Power & Light Company Project) issued by the
City pursuant to related loan agreements to pay a portion of the cost
of acquisition, construction, installation and equipping by the Company
of certain pollution control facilities (the ''Facilities''), and
pursuant to the Loan Agreement the Company has agreed to issue a series
of its bonds under the Mortgage and this Forty-First Supplemental
Indenture in order to evidence and secure its indebtedness under the
Loan Agreement; and

     Whereas, the Company now desires to provide for the establishment,
execution, authentication and delivery under the Mortgage of bonds of a
series to be known as its ''First Mortgage Bonds, 6-5/8% Series, due
2024'' (the bonds of said series being hereinafter sometimes referred
to as the ''2024 PC Bond''), limited to the aggregate principal amount
of Forty Million Dollars ($40,000,000); and

     Whereas, all things necessary to make the 2024 PC Bond hereinafter
described, when duly executed by the Company and authenticated and
delivered by the Trustee, a valid, binding and legal obligation of the
Company, and to make this Forty-First Supplemental Indenture a valid
and binding agreement supplemental to the Original Mortgage, have been
done and performed; and

     Whereas, the execution and delivery by the Company of this
Forty-First Supplemental Indenture, and the terms of the 2024 PC Bond,
have been duly authorized by the Board of Directors of the Company by
appropriate resolutions of said Board; and

     Whereas, it is provided in and by the Original Mortgage that the
Company will execute and deliver such further instruments and do such
further acts as may be necessary or proper to carry out more
effectually the purposes of the Mortgage, and to make subject to the
lien thereof any property thereafter acquired and intended to be
subject to the lien thereof; and

     Whereas, the Company has, since the date of execution and delivery
of the Original Mortgage, purchased and acquired property and desires
by this Forty-First Supplemental Indenture specifically to convey to
the Trustee such property for the better protection and security of the
bonds issued and to be issued under the Original Mortgage, or any
indenture supplemental thereto;

     Now, Therefore, This Indenture Witnesseth that, in consideration of
the premises and of the acceptance or purchase of the 2024 PC Bond by
the registered owners thereof, and of the sum of one dollar, lawful
money of the United States of America, to the Company duly paid by the
Trustee at or before the execution and delivery of this Forty-First
Supplemental Indenture, the receipt whereof is hereby acknowledged, the
Company and the Trustee, respectively, have entered into, executed and
delivered this Forty-First Supplemental Indenture, for the uses and
purposes hereinafter expressed, that is to say:

     Section 1. The Company has granted, bargained, sold, released,
conveyed, assigned, transferred, mortgaged, pledged, set over and
confirmed, and by these presents does grant, bargain, sell, release,
convey, assign, transfer, mortgage, pledge, set over and confirm
(subject, however, to permitted encumbrances as defined in the Original
Mortgage), unto said American National Bank and Trust Company of
Chicago, as Trustee, as herein provided, and its successors in the
trusts declared in the Original Mortgage and herein, all of the
property, real, personal and mixed, tangible and intangible, of every
kind, character and description which the Company has acquired since
the execution and delivery of the Original Mortgage and now owns
(except property, rights and assets of a character similar to that
excluded from the lien and operation of the Mortgage by the Granting
Clauses of the Original Mortgage, which property, rights and assets are
excluded from the lien and operation of the Mortgage only to the extent
provided therein), including, but without otherwise limiting the
generality of the foregoing, the following described property situated
within the State of Indiana:

                         PART I.

             ELECTRIC DISTRIBUTING SYSTEMS.

     All electric distributing systems of the Company acquired by it
after May 1, 1940, the date of the Original Mortgage, and located in
the Counties of Bartholomew, Boone, Daviess, Greene, Hamilton, Hancock,
Hendricks, Johnson, Knox, Madison, Marion, Monroe, Morgan, Owen, Pike,
Putnam, Shelby and Sullivan, State of Indiana; and any additions to or
extensions of any such systems, together with the buildings, erections,
structures, transmission lines, power stations, sub-stations, engines,
boilers, condensers, pumps, turbines, machinery, tools, conduits,
manholes, insulators, dynamos, motors, lamps, cables, wires, poles,
towers, cross-arms, piers, abutments, switchboard equipment, meters,
appliances, instruments, apparatus, appurtenances, maps, records,
ledgers, contracts, facilities and other property or equipment used or
provided for use in connection with the construction, maintenance,
repair and operation thereof; together also with all of the rights,
privileges, rights-of-way, franchises, licenses, grants, liberties,
immunities, ordinances, permits and easements of the Company in respect
of the construction, maintenance, repair and operation of said systems.

                            PART II.

            STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

     All the steam and hot water distributing systems acquired by the
Company after May 1, 1940, the date of the Original Mortgage, and
located in the City of Indianapolis, Marion County, Indiana, and any
additions to or extensions of any such systems; together with the
buildings, erections, structures, boilers, heaters, engines, tanks,
pipe lines, mains, connections, service pipes, meters, tools,
instruments, appliances, apparatus, facilities, machinery and other
property and equipment used or provided for use in the construction,
maintenance, repair and operation thereof; and together also with all
of the rights, privileges, rights-of-way, franchises, licenses, grants,
liberties, immunities, ordinances, permits and easements of the Company
in respect of the construction, maintenance, repair and operation of
said systems.

                               PART III.

               INDETERMINATE PERMITS AND FRANCHISES.

     All indeterminate permits, franchises, ordinances, licenses, and
other authorizations by or from any state, county, municipality, or
other governmental authority, acquired by the Company after May 1,
1940, the date of the Original Mortgage, including particularly, but
not limited to, any indeterminate permits under the Public Service
Commission Act of the State of Indiana, and all Acts amendatory thereof
and supplemental thereto, and all right, title and interest therein now
owned by the Company, and all renewals, extensions and modifications of
said indeterminate permits, franchises, ordinances, licenses, and other
authorizations, and of the indeterminate permits, franchises,
ordinances, licenses, and other authorizations referred to in Part VII
of the Granting Clauses of the Original Mortgage.

                             PART IV.

                          OTHER PROPERTY.

     All other property, whether real, personal or mixed (except any in
the Mortgage expressly excepted), now owned by the Company and
wheresoever situated, including (without in anywise limiting or
impairing by the enumeration of the same the scope and intent of the
foregoing or of any general description contained in the Mortgage) all
lands, flowage rights, water rights, flumes, raceways, dams,
rights-of-way and roads; all plants for the generation of electricity
by water, steam and/or other power, power houses, telephone systems,
water systems, steam heat and power plants, hot water plants,
sub-stations, transmission lines, distribution systems, bridges,
culverts and tracts; all offices, buildings and structures and the
equipment thereof; all machinery, engines, boilers, dynamos, machines,
regulators, meters, transformers, generators and motors; all appliances
whether electrical, gas or mechanical, conduits, cables and lines; all
pipes whether for water, steam heat and power, or other purposes; all
mains and pipes, service pipes, fittings, valves and connections,
poles, wires, tools, implements, apparatus, furniture and chattels; all
municipal franchises, indeterminate permits, and other permits; all
lines for the transportation, transmission and/or distribution of
electric current, steam heat and power or water for any purpose,
including towers, poles, wires, cables, pipes, conduits and all
apparatus for use in connection therewith; all real estate, lands,
leases, leaseholds; all contracts, whether heat, light, power, water or
street lighting contracts; all easements, servitudes, licenses,
permits, rights, powers, franchises, privileges, rights-of-way and
other rights in or relating to real estate or the occupancy of the same
and (except as hereinafter or in the Mortgage expressly excepted) all
the right, title and interest of the Company in and to all other
property of any kind or nature appertaining to and/or used and/or
occupied and/or enjoyed in connection with any property hereinbefore
described or referred to;

     Together with all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid
property or any part thereof, with the reversion and reversions,
remainder and remainders and (subject to the provisions of Section 64
of the Original Mortgage), the tolls, rents, revenues, issues,
earnings, income, product and profits thereof, and all the estate,
right, title and 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, indeterminate permits, franchises, ordinances,
licenses and other authorizations and every part and parcel thereof.

     Section 2. There shall be and is hereby established a series of
bonds, limited in aggregate principal amount to Forty Million Dollars
($40,000,000) to be issued under and secured by the Mortgage, to be
designated '' 6-5/8% Series, due 2024'', each of which shall also bear
the descriptive title ''First Mortgage Bonds''; said bonds shall mature
on December 1, 2024, and shall be issued only as fully registered bonds
without coupons in the denomination of five thousand dollars and any
larger denomination which is a whole multiple of five thousand dollars;
they shall bear interest from the beginning of the current interest
period during which each bond is dated, at the rate per annum
designated in the title thereof, payable semi-annually, on June 1 and
December 1 of each year (except that the first interest payment thereon
shall be made June 1, 1995 for the period from January 15, 1995 through
May 31, 1995); and the principal of, premium, if any, and interest on
said bond shall be payable in lawful money of the United States of
America at the office of the Company in the City of Indianapolis,
Indiana, or, if no such office is maintained, at American National Bank
and Trust Company of Chicago, which is hereby designated and appointed
the office and agency of the Company in the City of Chicago, Illinois,
for the payment of the principal of, premium, if any, and interest on
the 2024 PC Bond, if necessary, and for the registration, transfer and
exchange of such bond as hereinafter provided; all reference herein to
the office or agency of the Company in the City of Chicago, Illinois,
for the payment of the principal of, premium, if any, and interest on
the 2024 PC Bond, or the registration, transfer or exchange thereof,
being to American National Bank and Trust Company of Chicago. In event
of the resignation or inability to act of American National Bank and
Trust Company of Chicago, then a successor agent for all such purposes
in the City of Chicago, Illinois, shall be appointed by the Board of
Directors of the Company.

     The 2024 PC Bond shall be dated as of the date of authentication
thereof, except as otherwise provided in Section 10 of the Original
Mortgage.

     The 2024 PC Bond will be issued to evidence and secure a loan to the
Company by the City pursuant to the Loan Agreement of certain funds to
be acquired by the City through the issuance of City of Petersburg,
Indiana, Pollution Control Refunding Revenue Bonds, Series 1995A
(Indianapolis Power & Light Company Project) (the ''Series 1995A
Bonds''), authenticated and delivered under and pursuant to an
Indenture of Trust dated as of January 15, 1995 (hereinafter called the
''City Indenture''), by and between the City and Bank One Indianapolis,
NA, as Trustee (the ''City Trustee''). Pursuant to the City's pledge
and assignment of the Loan Agreement, as set forth in the City
Indenture, the 2024 PC Bond shall be issued to the City and assigned to
the City Trustee. All of the proceeds of the Series 1995A Bonds will be
used for the refunding of the aggregate principal amount of Forty
Million Dollars ($40,000,000) of the City's Pollution Control Revenue
Bonds, Series 1984 (Indianapolis Power & Light Company Project) issued
by the City pursuant to applicable loan agreements.

     Upon the notice and in the manner and with the effect provided in
this Section 2, the 2024 PC Bond shall be redeemable prior to the
maturity thereof under any one or more of the following circumstances:

     (a) In whole, at the option of the Company, if the Facilities or
Units 3 or 4 of the Petersburg Generating Station serviced by the
Facilities shall have been damaged or destroyed (i) to such extent
that they cannot be reasonably expected, in the opinion of the
Company, to be restored within a period of six (6) months to the
condition thereof immediately preceding such damage or destruction,
or (ii) to such extent that the Company, in its reasonable opinion,
is thereby prevented from carrying on its normal operations for a
period of six (6) months or more, or (iii) to such extent that the
restoration thereof would not be, taking into consideration the net
proceeds of any insurance payable as a result of such damage or
destruction, economic in the reasonable opinion of the Company.

     (b) In whole, at the option of the Company, if title to, or the
temporary use of, all or substantially all of the Facilities or
Units 3 or 4 of the Petersburg Generating Station serviced by the
Facilities, shall have been taken, under the exercise of the power
of eminent domain, or should any governmental body or agency
exercise any right which it may have to purchase or designate a
purchaser of the same, or should such property be sold to any
governmental body or agency so that the result of such taking or
takings is that (i) the Company, in its reasonable opinion, is
thereby prevented from carrying on its normal operations of either
the Facilities or such Units 3 or 4 for a period of six (6) months
or more, (ii) the restoration required as a result of the taking
cannot be reasonably expected, in the opinion of the Company, to be
completed in a period of six (6) months, or (iii) the restoration
thereof, taking into consideration the net proceeds from such
eminent domain award, would not be economic in the reasonable
opinion of the Company.

     (c) In whole, at the option of the Company, if, as a result of
any changes in the Constitution or law of the State of Indiana or
the Constitution or law of the United States of America or of
legislative or administrative action (whether state or federal) or
by final decree, judgment or order of any court or administrative
body (whether state or federal) entered after the contest thereof by
the Company in good faith or the decision of the Company not to
contest the same, the Loan Agreement shall, in the reasonable
opinion of counsel for the Company, have become void or unenforceable or
impossible of performance in accordance with the intent and purpose of the
parties as expressed in the Loan Agreement; or unreasonable burdens or
excessive liabilities shall, in the reasonable opinion of the Company, have
been imposed upon the City or the Company, with respect to the Facilities or
operation thereof, including without limitation federal, state or other ad
valorem, property, income or other taxes not being imposed on the
date of the Loan Agreement other than ad valorem taxes presently
levied upon privately owned property used for the same general
purpose as the Facilities.

     (d) In whole, at the option of the Company, if changes in the
economic availability of raw materials, operating supplies or
facilities necessary for the operation of the Facilities or the
operation of Units 3 or 4 of the Petersburg Generating Station serviced by
the Facilities shall have occurred or technological or other changes
shall have occurred which render the Facilities or said Units 3 or 4
uneconomic for use in the reasonable opinion of the Company.

     (e) In part, at the option of the Company, to the extent of net
proceeds received from any condemnation award, taking or sale as
stated herein, if title to, or the temporary use of any portion of
the Facilities shall have been taken under the exercise of the power
of eminent domain, or should any governmental body or agency
exercise any right it may have to purchase or designate a purchaser
of the same, or should such property be sold to any governmental
body or agency; provided the Company shall furnish to the City and
the City Trustee a certificate of an Independent Engineer (as
defined in the Loan Agreement) selected by the Company stating (i)
that the property forming the part of the Facilities that was taken
by such condemnation, taking or sale is not essential to the
character or significance of the Facilities, or (ii) that the
Facilities have been restored to a condition substantially
equivalent to their condition prior to the taking by such
condemnation, taking or sale proceedings, or (iii) that improvements
have been acquired which are suitable for the operation of the Facilities.

     (f) In whole, at any time on or after December 1, 2004, or in
part on any interest payment date on or after December 1, 2004, at
the option of the Company at a price equal to the principal amount
of the 2024 PC Bond so to be redeemed and accrued interest to the
date of redemption, together with a premium equal to a  percentage of
the principal amount thereof set forth under the heading ''Redemption
Premium'' in the form of the 2024 PC Bond hereinafter recited, so long as
the Company is not in default under the Loan Agreement or the 2024 PC Bond.

     (g) In the event all or substantially all of the mortgaged and
pledged property under the Mortgage, or all or substantially all
such property used in the business of generating, manufacturing,
transporting, transmitting, distributing or supplying electricity,
should be taken by exercise of the power of eminent domain, or
should any governmental body or agency exercise any right which it
may have to purchase or designate a purchaser of the same, or should
such property be sold to any governmental body or agency, the
Company shall be obligated to redeem the 2024 PC Bond outstanding as
promptly as possible in accordance with paragraph B of Section 69 of
the Original Mortgage.

     (h) In the event that the Company is notified by the City Trustee
that (i) an event of default under the City Indenture has occurred
and is continuing, and (ii) the City Trustee has declared the
principal of all the Series 1995A Bonds then outstanding immediately
due and payable pursuant to the City Indenture, the Company shall
call for redemption, on a redemption date selected by it not later
than thirty (30) days following the date on which such notice is
mailed, the 2024 PC Bond outstanding, and shall on such redemption
date redeem the same; provided, however, that such requirement of
redemption shall be deemed waived, if prior to the date fixed for
such redemption of the 2024 PC Bond (x) such event of default is
waived or cured as set forth in the City Indenture, or (y) there
shall have occurred any completed default (as defined in the
Mortgage) which affects any bond of any series outstanding under the
Mortgage and which completed default has not been cured and made
good prior to such redemption date, it being the intent of this
proviso that, in lieu of such right to redemption, the holder of the
2024 PC Bond shall be entitled only to such rights as are available
to the holders of bonds of any other series outstanding under the
Mortgage in the event of such completed default; and in case of any
subsequent occurrence or continuance of the events described in (i)
and (ii) of this Section 2(h), the Company shall have the same
obligation (subject to the same proviso) to redeem the 2024 PC Bond.

     (i) In the event the City Trustee notifies the Company and the
City that the interest payable on the Series 1995A Bonds held by
persons other than a ''substantial user'' or a ''related person'' as
those terms are used in Section 147(a)(2) of the Internal Revenue
Code of 1986, as amended, has been determined by a court of
competent jurisdiction or a formal ruling of the Internal Revenue
Service to be subject to federal income taxation by reason of a
breach by the Company of any covenant, agreement or representation
in the Loan Agreement, the Company shall call the 2024 PC Bond then
outstanding to be redeemed on the next succeeding interest payment
date within one hundred eighty (180) days after the date of such
notice; provided, however, that such requirement of redemption,
whether in whole or in part shall be deemed waived if, prior to the
date fixed for redemption of the 2024 PC Bond pursuant to this
Section 2(i), there shall have occurred any completed default (as
defined in the Mortgage) which affects any bond of any series
outstanding under the Mortgage and which completed default has not
been cured and made good prior to such redemption date, it being the
intent of this proviso that, in lieu of such right to redemption,
the holder of the 2024 PC Bond shall be entitled only to such rights
as are available to the holders of bonds of any other series
outstanding under the Mortgage in the event of such completed
default; but when any such completed default shall have been cured
and made good, if interest on the Series 1995A Bonds shall still be
taxable as described above, the Company shall have the same
obligation (subject to the same proviso) to redeem the 2024 PC Bond
on the next succeeding interest payment date within one hundred
eighty (180) days after the curing and making good of such completed
default; provided further, that the Company may call for redemption
such portion of the 2024 PC Bond, which in the written opinion of an
attorney or firm of attorneys of nationally recognized standing on
the subject of municipal bonds, would allow the City Trustee to
redeem the Series 1995A Bonds in part, which redemption would have
the result that the interest payable on the Series 1995A Bonds
remaining outstanding after such redemption in part would not be
subject to federal income taxation in the hands of persons other
than a ''substantial user'' or a ''related person'' as those terms
are used in Section 147(a)(2) of the Internal Revenue Code of 1986,
as amended.

     In case of redemption of 2024 PC Bond in whole for the purpose of
prepayment under the Loan Agreement pursuant to subsections (a), (b),
(c), (d), (f), (g), (h) or (i) above, the amounts payable upon
redemption of 2024 PC Bond shall be a sum sufficient, together with
other funds deposited with the City Trustee and available for such
purpose, to pay the principal of (and premium, in the case of
redemption pursuant to (f) above), and interest on the 2024 PC Bond
then outstanding and to pay all reasonable and necessary fees and
expenses of the City Trustee accrued and to accrue through final
payment of the 2024 PC Bond.

     In case of redemption in part pursuant to (e), (f) or (i) above,
the amount payable by the Company under this Forty-First Supplemental
Indenture, the Loan Agreement and the 2024 PC Bond shall be a sum
sufficient, together with other funds deposited with the Trustee and
available for such purpose, to pay the principal of (and premium in the
case of prepayment pursuant to (f) above) and interest on the 2024 PC
Bond so to be redeemed, which sum together with other funds deposited
with the City Trustee and available for such purpose shall be
sufficient to pay the principal of, premium, if any, and interest on
the Series 1995A Bonds and to pay all reasonable and necessary fees and
expenses of the City Trustee accrued and to accrue through such partial
prepayment.

     The 2024 PC Bond and the Series 1995A Bonds shall be redeemable at
any time within one hundred eighty (180) days following the event or
events described as giving rise to an option of the Company to redeem
them in subsections (a), (b), (c), (d) or (e) above.

     To exercise any of the options granted to redeem the 2024 PC Bond
in whole or in part or to comply with any obligations to redeem the 2024
PC Bond in whole or in part imposed in this Section 2, the Company
shall give written notice of the date of redemption to the City
Trustee, which date shall be not less than thirty (30) days nor more
than ninety (90) days from the date the notice is mailed.  No further
notice, by publication or otherwise, shall be required for redemption
of the 2024 PC Bond, and the requirements of Section 59 of the Mortgage
for notice by newspaper publication shall not apply to the 2024 PC Bond.

     At the option of the holder, the 2024 PC Bond, upon surrender
thereof at the office or agency of the Company in Chicago, Illinois,
together with a written instrument of transfer in form approved by the
Company duly executed by the holder or by his duly authorized attorney,
shall be exchangeable for a like aggregate principal amount of fully
registered bonds of the same series of other authorized denominations.

     The 2024 PC Bond will be nontransferable except to the City Trustee
and successors thereto, if any, and to the Company. To the extent that
it is transferable, it is transferable by the registered holder
thereof, in person or by attorney duly authorized in writing, on the
books of the Company at the office or agency of the Company in the City
of Chicago, Illinois, upon surrender thereof for cancellation at said
office and upon presentation of a written instrument of transfer duly
executed. Thereupon, the Company shall issue in the name of the
transferee, and the Trustee shall authenticate and deliver, a new
registered 2024 PC Bond or Bonds, in authorized denominations, of equal
aggregate principal amount. Any such transfer shall be subject to the
terms and conditions specified in the Mortgage and in this Forty-First
Supplemental Indenture.

     The Company shall not be required to transfer or exchange the 2024
PC Bond for a period of ten (10) days next preceding any interest
payment date of said bond.

     Except as set forth herein, no charge shall be made upon any
transfer or exchange of any of the 2024 PC Bond other than for any tax
or taxes or other governmental charge required to be paid by the Company.

     The 2024 PC Bond shall be limited to an aggregate principal amount
of Forty Million Dollars ($40,000,000) and shall be issued under the
provisions of Article VII of the Original Mortgage.

     Section 3. The 2024 PC Bond, and the Trustee's Certificate to be
endorsed thereon, shall be in the following forms, respectively:

[form of face of 2024 pc bond]

     This First Mortgage Bond, 6-5/8% Series, due 2024 (hereinafter
called the ''2024 PC Bond'') is not transferable except to a successor
trustee under the Indenture of Trust dated as of January 15, 1995,
between the City of Petersburg, Indiana and Bank One Indianapolis, N.A.,
Indiana, as the Trustee, or to Indianapolis Power & Light Company.

INDIANAPOLIS POWER & LIGHT COMPANY

First Mortgage Bond, 6-5/8% Series, Due 2024
Due December 1, 2024

No. 1                                       $40,000,000

     INDIANAPOLIS POWER & LIGHT COMPANY, a corporation of the State of
Indiana (hereinafter called the ''Company''), for value received,
hereby promises to pay to BankOne Indianapolis, N.A., Indiana, as the
Trustee (hereinafter called the ''City Trustee'') under the Indenture
of Trust between the City of Petersburg, Indiana (the ''City'') and the
City Trustee, dated as of January 15, 1995 (the ''City Indenture'') or
registered assigns, on December 1, 2024, at the office of the Company,
in the City of Indianapolis, State of Indiana, or if no such office is
maintained at the time by the Company, then at the office or agency of
the Company for such purpose in the City of Chicago, State of Illinois,
Forty Million Dollars ($40,000,000) in lawful money of the United
States of America, and to pay to the registered owner hereof interest
thereon from the first day of June or the first day of December next
preceding the date of this 2024 PC Bond (except that the first interest
payment hereunder shall be made June 1, 1995 for the period from
January 15, 1995 through May 31, 1995), at the rate of six and five-eighths
percent (6-5/8%) per annum in like lawful money at said office or agency, on
June 1 and December 1 in each year, until the Company's obligation with
respect to the payment of such principal shall have been discharged.
The interest payable hereunder on June 1 or December 1 will be paid to
the registered owner of this 2024 PC Bond at or before the close of
business on such dates, or if such date shall be a Saturday, Sunday,
holiday or a day on which banking institutions in the City of
Indianapolis or the city of any paying agents are authorized by law to
close, on or before the close of business on the next succeeding
business day on which such banking institutions are open for business.

REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS 2024 PC BOND SET
FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL, FOR ALL
PURPOSES, HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.

     No recourse shall be had for the payment of the principal of or
interest on this 2024 PC 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, as such, 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, as such, being waived and released by the terms
of the Mortgage, as herein defined.

     This 2024 PC Bond shall not become obligatory until American
National Bank and Trust Company of Chicago, the Trustee under the
Mortgage, as herein defined, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.

     In Witness Whereof, Indianapolis Power & Light Company has caused
this 2024 PC Bond to be signed in its name by its President or its
Treasurer, by his signature or a facsimile thereof, and its corporate
seal to be affixed hereon, attested by its Secretary or one of its
Assistant Secretaries, by his signature or a facsimile thereof.

                                Indianapolis Power & Light Company

Dated                           By
                                        Treasurer
Attest:

By
Secretary

[form of trustee's certificate on 2024 pc bond]

                        Trustee's Certificate

     This 2024 PC Bond is one of the bonds, of the series herein
designated, provided for in the within-mentioned Mortgage and
Forty-First Supplemental Indenture thereto.

                        American National Bank and Trust Company of
                                Chicago       Trustee

                        By
                                Authorized Signature

[form of reverse side of 2024 pc bond]

                INDIANAPOLIS POWER & LIGHT COMPANY

           First Mortgage Bond, 6-5/8% Series, due 2024
                Due January 1, 2024

     This 2024 PC Bond is one of an issue of bonds of the Company,
issuable in series, and is one of a series known as its First Mortgage
Bonds, 6-5/8% Series, due 2024 (herein called the ''2024 PC Bond'')
limited in aggregate principal amount to Forty Million Dollars
($40,000,000) and established by a Forty-First Supplemental Indenture
dated as of January 15, 1995, all bonds of all series issued and to be
issued under and equally secured (except insofar as any sinking or
other fund, established in accordance with the provisions of the
Mortgage hereinafter mentioned, may afford additional security for the
bonds of any particular series) by a Mortgage and Deed of Trust, dated
as of May 1, 1940, executed by the Company to American National Bank
and Trust Company of Chicago, as the Trustee (which Mortgage and Deed
of Trust as supplemented and modified by all supplemental indentures
thereto is hereinafter referred to as the ''Mortgage''), to which
Mortgage reference is made for a description of the property mortgaged
and pledged, the nature and extent of the security, the rights of the
bearers or registered owners of the bonds in respect of such security,
the duties and immunities of the Trustee and the terms and conditions
upon which the bonds are secured.

     This 2024 PC Bond evidences and secures a loan made by the City to
the Company, pursuant to a Loan Agreement, dated as of January 15,
1995, between the City and the Company (the ''Loan Agreement''). In
order to obtain funds for such loan, the City, contemporaneously with
the issue of this 2024 PC Bond, will issue Forty Million Dollars
($40,000,000) principal amount of its Pollution Control Refunding
Revenue Bonds, Series 1995A (Indianapolis Power & Light Company
Project) (the ''City Bonds'') under and pursuant to the City Indenture.
The City Bonds are payable from payments made by the Company of
principal of, premium, if any, and interest on this 2024 PC Bond and
from moneys in the Bond Fund created under the City Indenture. The
obligation of the Company to pay the principal of, premium, if any, and
interest on this 2024 PC Bond shall be discharged to the extent that
any moneys in said Bond Fund are available for payments on the City
Bonds and are directed by the Company to be applied thereto, all as
provided in the Forty-First Supplemental Indenture.

     This 2024 PC Bond is not subject to redemption prior to December 1,
2004, except as provided in Section 2 of the Forty-First Supplemental
Indenture, to which reference is made for full description of
redemption provisions.
<PAGE>

     This 2024 PC Bond is subject to redemption in whole at any time on
or after December 1, 2004, or in part on any interest payment date on
or after December 1, 2004, at the option of the Company, upon at least
thirty (30) days prior notice, all as provided in the Forty-First
Supplemental Indenture, at a price equal to the principal amount of the
2024 PC Bond so to be redeemed and accrued interest to the date of
redemption, together with a premium equal to a percentage of the
principal amount thereof set forth below under the heading ''Redemption
Premium'':

If Redeemed During the Twelve Months
Ending With the Thirtieth Day
Redemption
of November of the Year Stated                  Premium

2005                                            2.0%
2006                                            1.0%

and without premium if redeemed after November 30, 2006.

     With the consent of the Company and to the extent permitted by and
as provided in the Mortgage, the rights and obligations of the Company
and/or of the holders of the bonds and/or coupons and/or the terms and
provisions of the Mortgage and/or any instruments supplemental thereto
may be modified or altered by affirmative vote of the holders of at
least sixty-six and two-thirds per centum (662/3%) in principal amount
of the bonds affected by such modification or alteration then
outstanding under the Mortgage (excluding bonds disqualified from
voting by reason of the Company's interest therein as provided in the
Mortgage); provided that no such modification or alteration shall
permit the extension of the maturity of the principal of this 2024 PC
Bond or the reduction in the rate of interest hereon or any other
modification in the terms of payment of such principal or interest
without the consent of the holder hereof. The principal hereof may be
declared or may become due and payable prior to the stated date of
maturity hereof, on the conditions, in the manner and at the time set
forth in the Mortgage, upon the occurrence of a completed default as in
the Mortgage provided.

     No reference herein to the Mortgage, and no provision of this 2024
PC Bond or of the Mortgage, shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay, subject to the
provisions of the Forty-First Supplemental Indenture, the principal of,
and premium, if any, and interest on this 2024 PC Bond at the place, at
the respective times and at the rate and the manner herein prescribed.

     This 2024 PC Bond is issuable only in full registered form without
coupons in denominations of Five Thousand Dollars and any larger
denomination which is a whole multiple of Five Thousand Dollars.

     This 2024 PC Bond will be nontransferable except to the City Trustee
and successors thereto, if any, and to the Company. To the extent that
it is transferable, it is transferable by the registered holder
thereof, in person or by attorney duly authorized in writing, on the
books of the Company at the office or agency of the Company in the City
of Chicago, Illinois, upon surrender thereof for cancellation at said
office and upon presentation of a written instrument of transfer duly
executed. Thereupon, the Company shall issue in the name of the
transferee, and the Trustee shall authenticate and deliver, a new
registered 2024 PC Bond or Bonds, in authorized denominations, of equal
aggregate principal amount. Any such transfer shall be subject to the
terms and conditions specified in the Mortgage and in the Forty-First
Supplemental Indenture.

[end of 2024 pc bond form]

     Section 4. Until the 2024 PC Bond in definitive form is ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver, in lieu thereof, a fully
registered 2024 PC Bond in temporary form, as provided in Section 15 of
the Original Mortgage. Such bond may, in lieu of the statement of the
specific redemption prices required to be set forth in such bond in
definitive form, include a reference to this Forty-First Supplemental
Indenture for a statement of such redemption prices.

     Section 5. The Company covenants and agrees that it will duly and
punctually pay to the holder of the 2024 PC Bond the principal thereof,
premium, if any, and interest on said bond at the dates and place and
in the manner mentioned therein; provided, however, that:

     (a) The obligation of the Company to pay the principal of, and
premium, if any, and interest on the 2024 PC Bond shall be
discharged to the extent that any moneys in the Series 1995A Bond
Account within the Bond Fund created under and pursuant to the City
Indenture are available for the payment of the principal of, or
premium, if any, or interest on the Series 1995A Bonds and are
directed by the Company to be applied to the payment thereof in the
manner provided in the City Indenture on or prior to the dates on
which the Company is required to pay the principal of, or premium,
if any, or interest on the 2024 PC Bond.

     (b) Except as otherwise provided in this Section 5, the principal
amount of any Series 1995A Bond acquired by the Company and
delivered to the City Trustee, or acquired by the City Trustee and
cancelled, shall be credited against the obligation of the Company
to pay the principal of the 2024 PC Bond.

As the principal of, premium, if any, and interest on the 2024 PC Bond
is paid or deemed paid in full, and upon its receipt by the Company,
such bond shall be delivered to the Trustee for cancellation. The
Company shall promptly inform the Trustee of all payments made and
credits availed of with respect to its obligations on the 2024 PC Bond.
The Trustee shall not be required to recognize any payment made or
credit availed of with respect to any 2024 PC Bond unless it has
received (a) the bond for cancellation by it, or (b) a certificate
signed by a duly authorized officer of the City Trustee specifying the
amount of such payment or credit and the principal amount of the 2024
PC Bond with respect to which the payment or credit was applied. In the
absence of receipt by the Trustee of any 2024 PC Bond, any such
certificate shall be controlling and conclusive.

     Section 6. The covenant of the Company to make annual payments to
the Trustee for a Maintenance and Improvement Fund as contained in
Section 41 of the Original Mortgage and in the first twenty-four
Supplemental Indentures to the Original Mortgage creating the several
series of First Mortgage Bonds presently outstanding under such
Supplemental Indentures shall not apply to nor be for the benefit of
the 2024 PC Bond, and the Company reserves the right, without any
consent of, or other action by, the holder of the 2024 PC Bond, to
amend, modify or delete the provisions of the Mortgage relating to such
Maintenance and Improvement Fund and by acceptance of the 2024 PC Bond
the holder thereof waives any right or privilege so to consent or take
any other action with respect thereto.

     Section 7. The Company covenants that, so long as the 2024 PC Bond
shall remain outstanding, it will comply with all of the provisions of
Section 47 of the Original Mortgage, including the provisions with
respect to limitations on dividends and distributions and the purchase
and redemption of stock.

     Section 8. The Trustee hereby accepts the trusts herein declared,
provided and created and agrees to perform the same upon the terms and
conditions herein and in the Mortgage set forth and upon the following
terms and conditions:

     The recitals contained herein and in the bonds shall be taken as the
statements of the Company and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to
the validity or adequacy of the security afforded hereby, or as to the
validity of this Forty-First Supplemental Indenture or of the 2024 PC
Bond issued hereunder.

     Section 9. Whenever in this Forty-First Supplemental Indenture
either of the parties hereto is named or referred to, this shall,
subject to the provisions of Article XVII of the Original Mortgage, be
deemed to include the successors or assigns of such party, and all the
covenants and agreements in this Forty-First Supplemental Indenture
contained by or on behalf of the Company, or by or on behalf of the
Trustee, shall, subject as aforesaid, bind and inure to the benefit of
the respective successors and assigns of such parties, whether so
expressed or not.

     Section 10. Nothing in this Forty-First Supplemental Indenture
expressed or implied, is intended or shall be construed to confer upon,
or to give to, any person, co-partnership or corporation, other than
the parties hereto and the holders of the bonds and coupons outstanding
under the Mortgage, any right, remedy, or claim under or by reason of
this Forty-First Supplemental Indenture or any covenant, condition or
stipulation hereof; and all the covenants, conditions, stipulations,
promises and agreements in this Forty-First Supplemental Indenture
contained by or on behalf of the Company shall be for the sole and
exclusive benefit of the parties hereto and of the holders of the bonds
and of the coupons outstanding under the Mortgage.

     Section 11. The Company covenants that all of the terms, provisions
and conditions of the Mortgage shall be applicable to the 2024 PC Bond
issued hereunder, except as herein otherwise provided and except
insofar as the same may be inconsistent with the provisions of this
Forty-First Supplemental Indenture.

     Section 12. This Forty-First Supplemental Indenture is dated as of
January 15, 1995, although executed and delivered on the date of the
acknowledgement hereof by the Trustee; and shall be simultaneously
executed and delivered 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, Indianapolis Power & Light Company, party of the
first part, has caused its corporate name to be hereunto affixed and
this instrument to be signed and acknowledged by its President or a
Vice-President, and its corporate seal to be hereto affixed and
attested by its Secretary or an Assistant Secretary, for and in its
behalf, and American National Bank And Trust Company Of Chicago, party
of the second part, as Trustee, has caused its corporate name to be
hereunto affixed and this instrument to be signed and acknowledged by
one of its Vice-Presidents, and its corporate seal to be hereto affixed
and attested by one of its Assistant Secretaries, all as of the day,
month and year first above written.

Indianapolis Power & Light Company,

By /s/ Bryan G. Tabler
Bryan G. Tabler,
Senior Vice-President

Attest:

/s/ Clark L. Snyder
Clark L. Snyder,
Assistant Secretary

American National Bank And Trust Company of
Chicago

By /s/ Ronald B. Bremen
Ronald B. Bremen,
Vice-President

Attest:
(Seal)

/s/ Robert M. Selangowski
Robert M. Selangowski,
Assistant Secretary
<PAGE>

State of Indiana
County of Marion

     On this 2nd day of February, in the year 1995, before me, a Notary
Public in and for the County and State aforesaid, personally came Bryan
G. Tabler, Senior Vice-President, and Clark L. Snyder, Assistant
Secretary, of Indianapolis Power & Light Company, one of the
corporations described in and which executed the foregoing instrument,
to me personally known and known to me personally to be such Senior
Vice-President and Assistant Secretary, respectively. Said Bryan G.
Tabler and Clark L. Snyder being by me severally duly sworn did depose
and say that the said Bryan G. Tabler resides in Marion County, Indiana
and the said Clark L. Snyder resides in Marion County, Indiana; that
said Bryan G. Tabler is Senior Vice-President and said Clark L. Snyder
is Assistant Secretary of said Indianapolis Power & Light Company; that
each of them knows the corporate seal of said corporation; that the
seal affixed to said instrument and bearing the name of said
corporation is such corporate seal; that it was so affixed by order of
the Board of Directors of said corporation; and that each of them
signed his name thereto by like order; and each of them acknowledged
the execution of said instrument on behalf of said corporation to be
his free and voluntary act and deed and the free and voluntary act and
deed of said corporation, for the uses and purposes therein set forth.

     In Witness Whereof, I have hereunto set my hand and affixed my
official seal this 2nd day of February 1995.

/s/ Gloria K. Bryant
Gloria K. Bryant,
Notary Public

My Commission Expires:
     June 11, 1995

My County of Residence is:
     Marion

(Notarial Seal)
State of Illinois
County of Cook

<PAGE>

     On this 1st day of February, in the year 1995, before me, a Notary
Public in and for the County and State aforesaid, personally came Ronald B.
Bremen, Vice-President, and Robert M. Selangowski, Assistant Secretary, of
American National Bank and Trust Company of Chicago, one of the corporations
described in and which executed the foregoing instrument, to me personally
known and known to me personally to be such Senior Vice-President and
Assistant Secretary, respectively. Said Ronald B. Bremen and Robert M.
Selangowski, being by me severally sworn did depose and say that the said
Ronald B. Bremen resides in Glencoe, Illinois, and that the said Robert M.
Selangowski resides in Lansing, Illinois; that said Ronald B. Bremen is
Vice-President and said Robert M. Selangowski is Assistant Secretary of
said American National Bank and Trust Company of Chicago; that each of them
knows the corporate seal of said corporation; that the seal affixed to said
instrument and bearing the name of said corporation is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation; that each of them signed his name thereto by like authority;
and each of them acknowledged the execution of said instrument on behalf of
said corporation to be his free and voluntary act and deed and the free and
voluntary act and deed of said corporation, for the uses and purposes
therein set forth.

     In Witness Whereof, I have hereunto set my hand and affixed my
official seal this 1st day of February, 1995.

/s/ Bernadette G. Janairo
Bernadette G. Janairo
Notary Public

My Commission Expires:
     May 22, 1998

My County of Residence is:
     Cook

(Notarial Seal)

This instrument was prepared by
Bryan G. Tabler

<PAGE>

                                                                  Exhibit 4.4.12

             INDIANAPOLIS POWER & LIGHT COMPANY

                             TO

             AMERICAN NATIONAL BANK AND TRUST

                   COMPANY OF CHICAGO

                                      Trustee

            Forty-Second Supplemental Indenture

              Dated as of October 1, 1995

            ESTABLISHING FIRST MORTGAGE BONDS,

                 5.21% Series, Due 2023

                   TABLE OF CONTENTS*

                         of

         FORTY-SECOND SUPPLEMENTAL INDENTURE

                         of

         INDIANAPOLIS POWER & LIGHT COMPANY

                                                           Page
Parties                                                      1
Recitals                                                     1
Section 1   Granting clauses                                 4
              Part I   Electric Distributing Systems         5
              Part II  Steam and Hot Water Distributing
                         Systems                             5
              Part III Indeterminate Permits and Franchises  6
              Part IV  Other Property                        6
            General and after-acquired title                 6
Section 2   Designation of Fortieth series of bonds
              and kind and denominations thereof             7
            Designation of Company or American National
              Bank and Trust Company of Chicago as
              paying agent                                   8
            Purpose of bonds                                 8
            Redemption of bonds                              8
            Exchange of bonds                                9
            Transfer of bonds                                9
            Series limited to $40,000,000                    9
Section 3   Form of fully registered bond                   10
            Form of Trustee's certificate on bonds          12
Section 4   Temporary bonds                                 14
Section 5   Payments made hereunder; discharge of
              obligation; credits                           14
Section 6   Annual Payments for Maintenance and
              Improvement Fund                              15
Section 7   Compliance with Section 47 of Original
              Mortgage with respect to dividend
              restrictions                                  15
Section 8   Acceptance of trusts by Trustee and
              conditions of acceptance                      15

*Table of Contents is not part of the Forty-Second
Supplemental Indenture and should not be considered
such. It is included herein only for purposes of
convenient reference.

                                                          Page
Section 9   Successors and assigns                         16
Section 10  Limitation of rights hereunder                 16
Section 11  Compliance with terms, provisions and
              conditions of Mortgage                       16
Section 12  Execution in counterparts                      16
Testimonium                                                17
Signatures and Seals                                       17
Acknowledgements                                           18

THIS FORTY-SECOND SUPPLEMENTAL INDENTURE, dated as of October 1,
1995, between Indianapolis Power & Light Company, a corporation of the
State of Indiana, hereinafter sometimes called the ''Company,'' party
of the first part, and American National Bank and Trust Company of
Chicago, a national banking association, as Trustee, hereinafter
sometimes called the ''Trustee,'' party of the second part;

     Whereas, the Company by a Mortgage and Deed of Trust (hereinafter
sometimes called the ''Original Mortgage'' when referred to as existing
prior to any supplement thereto or modification thereof, and the
''Mortgage'' when referred to as now or heretofore supplemented and
modified) dated as of May 1, 1940, made to said American National Bank
and Trust Company of Chicago, as Trustee, to secure the payment of the
bonds issued from time to time under the Mortgage for the purposes of
and subject to the limitations specified in the Mortgage, and to secure
the performance of the covenants therein contained, conveyed to the
Trustee thereunder upon certain trusts, terms and conditions, and with
and subject to certain provisos and covenants therein contained, all
and singular the property, rights and franchises which the Company then
owned or should thereafter acquire, excepting the property expressly
excepted by the terms of the Original Mortgage or any indenture
supplemental thereto, to which Mortgage reference is hereby made for
greater certainty; and

     Whereas, the Original Mortgage has been supplemented and modified by
supplemental indentures dated as of May 1, 1942, as of February 1,
1948, as of April 1, 1949, as of October 1, 1949, as of February 1,
1951, as of March 1, 1953, as of June 1, 1956, as of March 1, 1958, as
of October 1, 1960, as of August 1, 1964, as of April 1, 1966, as of
May 1, 1967, as of May 1, 1968, as of October 1, 1970, as of March 1,
1972, as of March 15, 1973, as of February 15, 1974, as of August 15,
1974, as of September 15, 1975, as of June 1, 1976, as of July 1, 1976,
as of August 1, 1977, as of September 1, 1978, as of August 1, 1981, as
of November 1, 1983, as of November 1, 1984, as of December 1, 1984, as
of September 1, 1985, as of October 1, 1986, as of June 1, 1989, as of
August 1, 1989, as of October 15, 1991, as of August 1, 1992, as of
April 1, 1993, as of October 1, 1993, as of February 1, 1994 and as of
January 15, 1995.

     Whereas, Section 8 of the Original Mortgage provides, among other
things, that the form of each series of bonds (other than the initial
issue of bonds) issued thereunder shall be established by an indenture
supplemental thereto authorized by resolution of the Board of Directors
of the Company, and that the form of each series, as established by the
Board of Directors, shall specify the descriptive title of the bonds
and various other terms thereof, and may also contain such other
provisions as the Board of Directors may, in its discretion, cause to
be inserted therein expressing or referring to the terms and conditions
upon which such bonds are to be issued and secured under the Original
Mortgage or any indenture supplemental thereto or in modification
thereof; and

     Whereas, the Company has entered into a Loan Agreement, dated as of
October 1, 1995 (hereinafter called the ''Loan Agreement'') with the
City of Petersburg, Indiana (the ''City''), in order to obtain funds
for the refunding of the aggregate principal amount of Forty Million
Dollars ($40,000,000) of the City's Pollution Control Refunding Revenue
Bonds, Series 1985 (Indianapolis Power & Light Company Project) issued
by the City pursuant to related loan agreements to pay a portion of the
cost of acquisition, construction, installation and equipping by the
Company of certain pollution control facilities (the ''Facilities''); and

     Whereas, the Company has secured a Municipal Bond Insurance Policy
issued by AMBAC Indemnity Corporation (''AMBAC'') to secure the timely
payment of principal and interest on the City of Petersburg Pollution
Control Refunding Revenue Bonds, Adjustable Rate Tender Securities
(ARTS)SM, Series 1995B (Indianapolis Power & Light Company Project),
due January 1, 2023 (the ''Series 1995B Bonds''); and

     Whereas, the Company will enter into an Insurance Agreement dated as
of October 18, 1995 with AMBAC (the ''Insurance Agreement'') to
evidence the reimbursement obligations of the Company to AMBAC for the
payment by AMBAC of the principal of and interest on the Series 1995B
Bonds pursuant to the Municipal Bond Insurance Policy issued by AMBAC
(the ''Bond Obligations''); and

     Whereas, the Company has entered into an Interest Rate Swap
Agreement, dated as of October 11, 1995 with AMBAC Financial Services
Limited Partnership (hereinafter ''AFSLP''), (the ''Swap Agreement'')
under which AFSLP will have an obligation to make payments to the
Company equal to the variable rate interest payments on the Series
1995B Bonds, subject to adjustment in accordance with the terms of the
Swap Agreement, and the Company will have an obligation to make
payments to AFSLP equal to the fixed rate interest payment on the
Company's 2023 PC Bond, as defined below, and such payments subject to
a netting of those obligations in accordance with the terms of the Swap
Agreement (to the extent amounts are owing by the Company after such
netting, the ''Swap Obligations''); and

     Whereas, the Company has secured a Financial Guaranty Insurance
Policy pursuant to which AMBAC insures the payment obligations of the
Company pursuant to the Swap Agreement (the ''Swap Policy''); and

     Whereas, the Insurance Agreement also evidences the reimbursement
obligations of the Company to AMBAC for any payments made pursuant to
the Swap Policy; and

     Whereas, pursuant to the terms of the Swap Agreement and the
Insurance Agreement the Company has agreed to issue a series of its
bonds under the Mortgage and this Forty-Second Supplemental Indenture
in order to evidence and secure amounts owing under the terms of the
Swap Agreement and the Insurance Agreement; and

     Whereas, the Company now desires to provide for the establishment,
execution, authentication and delivery under the Mortgage of bonds of a

series to be known as its ''First Mortgage Bonds, 5.21% Series, due
2023'' (the bonds of said series being hereinafter sometimes referred
to as the ''2023 PC Bond''), limited to the aggregate principal amount
of Forty Million Dollars ($40,000,000); and

     Whereas, all things necessary to make the 2023 PC Bond hereinafter
described, when duly executed by the Company and authenticated and
delivered by the Trustee, a valid, binding and legal obligation of the
Company, and to make this Forty-Second Supplemental Indenture a valid
and binding agreement supplemental to the Original Mortgage, have been
done and performed; and

     Whereas, the execution and delivery by the Company of this
Forty-Second Supplemental Indenture, and the terms of the 2023 PC Bond,
have been duly authorized by the Board of Directors of the Company by
appropriate resolutions of said Board; and

     Whereas, it is provided in and by the Original Mortgage that the
Company will execute and deliver such further instruments and do such
further acts as may be necessary or proper to carry out more
effectually the purposes of the Mortgage, and to make subject to the
lien thereof any property thereafter acquired and intended to be
subject to the lien thereof; and

     Whereas, the Company has, since the date of execution and delivery
of the Original Mortgage, purchased and acquired property and desires
by this Forty-Second Supplemental Indenture specifically to convey to
the Trustee such property for the better protection and security of the
bonds issued and to be issued under the Original Mortgage, or any
indenture supplemental thereto;

     Now, Therefore, This Indenture Witnesseth that, in consideration of
the premises and of the acceptance or purchase of the 2023 PC Bond by
the registered owners thereof, and of the sum of one dollar, lawful
money of the United States of America, to the Company duly paid by the
Trustee at or before the execution and delivery of this Forty-Second
Supplemental Indenture, the receipt whereof is hereby acknowledged, the
Company and the Trustee, respectively, have entered into, executed and
delivered this Forty-Second Supplemental Indenture, for the uses and
purposes hereinafter expressed, that is to say:

     Section 1. The Company has granted, bargained, sold, released,
conveyed, assigned, transferred, mortgaged, pledged, set over and
confirmed, and by these presents does grant, bargain, sell, release,
convey, assign, transfer, mortgage, pledge, set over and confirm
(subject, however, to permitted encumbrances as defined in the Original
Mortgage), unto said American National Bank and Trust Company of
Chicago, as Trustee, as herein provided, and its successors in the
trusts declared in the Original Mortgage and herein, all of the
property, real, personal and mixed, tangible and intangible, of every
kind, character and description which the Company has acquired since
the execution and delivery of the Original Mortgage and now owns
(except property, rights and assets of a character similar to that
excluded from the lien and operation of the Mortgage by the Granting
Clauses of the Original Mortgage, which property, rights and assets are
excluded from the lien and operation of the Mortgage only to the extent
provided therein), including, but without otherwise limiting the
generality of the foregoing, the following described property situated
within the State of Indiana:

                             PART I.

                 ELECTRIC DISTRIBUTING SYSTEMS.

     All electric distributing systems of the Company acquired by it
after May 1, 1940, the date of the Original Mortgage, and located in
the Counties of Bartholomew, Boone, Daviess, Gibson, Greene, Hamilton,
Hancock, Hendricks, Johnson, Knox, Madison, Marion, Monroe, Morgan,
Owen, Pike, Putnam, Shelby and Sullivan, State of Indiana; and any
additions to or extensions of any such systems, together with the
buildings, erections, structures, transmission lines, power stations,
sub-stations, engines, boilers, condensers, pumps, turbines, machinery,
tools, conduits, manholes, insulators, dynamos, motors, lamps, cables,
wires, poles, towers, cross-arms, piers, abutments, switchboard
equipment, meters, appliances, instruments, apparatus, appurtenances,
maps, records, ledgers, contracts, facilities and other property or
equipment used or provided for use in connection with the construction,
maintenance, repair and operation thereof; together also with all of
the rights, privileges, rights-of-way, franchises, licenses, grants,
liberties, immunities, ordinances, permits and easements of the Company
in respect of the construction, maintenance, repair and operation of
said systems.

                              PART II.

             STEAM AND HOT WATER DISTRIBUTING SYSTEMS.

     All the steam and hot water distributing systems acquired by the
Company after May 1, 1940, the date of the Original Mortgage, and
located in the City of Indianapolis, Marion County, Indiana, and any
additions to or extensions of any such systems; together with the
buildings, erections, structures, boilers, heaters, engines, tanks,
pipe lines, mains, connections, service pipes, meters, tools,
instruments, appliances, apparatus, facilities, machinery and other
property and equipment used or provided for use in the construction,
maintenance, repair and operation thereof; and together also with all
of the rights, privileges, rights-of-way, franchises, licenses, grants,
liberties, immunities, ordinances, permits and easements of the Company
in respect of the construction, maintenance, repair and operation of
said systems.

                              PART III.

                 INDETERMINATE PERMITS AND FRANCHISES.

     All indeterminate permits, franchises, ordinances, licenses, and
other authorizations by or from any state, county, municipality, or
other governmental authority, acquired by the Company after May 1,
1940, the date of the Original Mortgage, including particularly, but
not limited to, any indeterminate permits under the Public Service
Commission Act of the State of Indiana, and all Acts amendatory thereof
and supplemental thereto, and all right, title and interest therein now
owned by the Company, and all renewals, extensions and modifications of
said indeterminate permits, franchises, ordinances, licenses, and other
authorizations, and of the indeterminate permits, franchises,
ordinances, licenses, and other authorizations referred to in Part VII
of the Granting Clauses of the Original Mortgage.

                                 PART IV.

                               OTHER PROPERTY.

     All other property, whether real, personal or mixed (except any in
the Mortgage expressly excepted), now owned by the Company and
wheresoever situated, including (without in anywise limiting or
impairing by the enumeration of the same the scope and intent of the
foregoing or of any general description contained in the Mortgage) all
lands, flowage rights, water rights, flumes, raceways, dams,
rights-of-way and roads; all plants for the generation of electricity
by water, steam and/or other power, power houses, telephone systems,
water systems, steam heat and power plants, hot water plants,
sub-stations, transmission lines, distribution systems, bridges,
culverts and tracts; all offices, buildings and structures and the
equipment thereof; all machinery, engines, boilers, dynamos, machines,
regulators, meters, transformers, generators and motors; all appliances
whether electrical, gas or mechanical, conduits, cables and lines; all
pipes whether for water, steam heat and power, or other purposes; all
mains and pipes, service pipes, fittings, valves and connections,
poles, wires, tools, implements, apparatus, furniture and chattels; all
municipal franchises, indeterminate permits, and other permits; all
lines for the transportation, transmission and/or distribution of
electric current, steam heat and power or water for any purpose,
including towers, poles, wires, cables, pipes, conduits and all
apparatus for use in connection therewith; all real estate, lands,
leases, leaseholds; all contracts, whether heat, light, power, water or
street lighting contracts; all easements, servitudes, licenses,
permits, rights, powers, franchises, privileges, rights-of-way and
other rights in or relating to real estate or the occupancy of the same
and (except as hereinafter or in the Mortgage expressly excepted) all
the right, title and interest of the Company in and to all other
property of any kind or nature appertaining to and/or used and/or
occupied and/or enjoyed in connection with any property hereinbefore
described or referred to;

     Together with all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to the aforesaid
property or any part thereof, with the reversion and reversions,
remainder and remainders and (subject to the provisions of Section 64
of the Original Mortgage), the tolls, rents, revenues, issues,
earnings, income, product and profits thereof, and all the estate,
right, title and 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, indeterminate permits, franchises, ordinances,
licenses and other authorizations and every part and parcel thereof.

     Section 2. There shall be and is hereby established a series of
bonds, limited in aggregate principal amount to Forty Million Dollars
($40,000,000) to be issued under and secured by the Mortgage, to be
designated ''5.21% Series, due 2023'', each of which shall also bear
the descriptive title ''First Mortgage Bonds''; said bonds shall mature
on January 1, 2023, and shall be issued only as fully registered bonds
without coupons in the denomination of five thousand dollars and any
larger denomination which is a whole multiple of five thousand dollars;
they shall be payable on the dates, at the times and in the amounts
required by the Swap Agreement and the Insurance Agreement; provided,
however, that the amount payable hereunder shall not exceed the
principal amount of $40,000,000 plus interest at the per annum rate of
5.21% and shall be payable in lawful money of the United States of
America at the office of the Company in the City of Indianapolis,
Indiana, or, if no such office is maintained, at American National Bank
and Trust Company of Chicago, which is hereby designated and appointed
the office and agency of the Company in the City of Chicago, Illinois,
for the payment of amounts due hereunder, if necessary, and for the
registration, transfer and exchange of such bond as hereinafter
provided; all reference herein to the office or agency of the Company
in the City of Chicago, Illinois, being to American National Bank and
Trust Company of Chicago. In event of the resignation or inability to
act of American National Bank and Trust Company of Chicago, then a
successor agent for all such purposes in the City of Chicago, Illinois,
shall be appointed by the Board of Directors of the Company.

     The 2023 PC Bond shall be dated as of the date of authentication
thereof, except as otherwise provided in Section 10 of the Original Mortgage.

     The 2023 PC Bond will be issued to evidence and secure the
reimbursement obligations of the Company to AMBAC under the Insurance
Agreement for the payment by AMBAC of the principal of and interest on
the Series 1995B Bonds pursuant to the Municipal Bond Insurance Policy,
and to secure payments made by the Company to AFSLP under the Swap
Agreement.

     Upon the notice and in the manner and with the effect provided in
this Section 2, the 2023 PC Bond shall be redeemable prior to the
maturity thereof in whole or in part at the times, and in the amounts
that corresponding redemptions are made on the Series 1995B Bonds and
to the extent that a corresponding reduction occurs in the notional
amount under the Swap Agreement.

     The Company shall provide notice to the Trustee of a reduction, in
whole or in part, in the notional amounts owing under the Swap
Agreement and a corresponding reduction, in whole or in part, in the
outstanding principal amount of the Series 1995B Bonds, and the Trustee
shall thereafter notify the holders of such event and request the
holders to surrender their 2023 PC Bonds for cancellation; or, in the
case of a partial reduction, surrender of the bonds in connection with
the issuance of replacement bonds in denominations equal to the
remaining notional amount owing under the Swap Agreement and the
outstanding principal amount of the Series 1995B Bonds.

     At the option of the holder, the 2023 PC Bond, upon surrender
thereof at the office or agency of the Company in Chicago, Illinois,
together with a written instrument of transfer in form approved by the
Company duly executed by the holder or by his duly authorized attorney,
shall be exchangeable for a like aggregate principal amount of fully
registered bonds of the same series of other authorized denominations.

     The 2023 PC Bond will be nontransferable except with the prior
written consent of the Company and to the Company. To the extent that
it is transferable, it is transferable by the registered holder
thereof, in person or by attorney duly authorized in writing, on the
books of the Company at the office or agency of the Company in the City
of Chicago, Illinois, upon surrender thereof for cancellation at said
office and upon presentation of a written instrument of transfer duly
executed. Thereupon, the Company shall issue in the name of the
transferee, and the Trustee shall authenticate and deliver, a new
registered 2023 PC Bond or Bonds, in authorized denominations, of equal
aggregate principal amount. Any such transfer shall be subject to the
terms and conditions specified in the Mortgage and in this Forty-Second
Supplemental Indenture.

     Except as set forth herein, no charge shall be made upon any
transfer or exchange of any of the 2023 PC Bond other than for any tax
or taxes or other governmental charge required to be paid by the Company.

     The 2023 PC Bond shall be limited to an aggregate principal amount
of Forty Million Dollars ($40,000,000), together with interest at the
per annum rate of 5.21% from the date of authentication to maturity,
(such total obligation hereinafter referred to as the ''Stated
Amount'') and shall be issued under the provisions of Article VII of
the Original Mortgage.

     Section 3. The 2023 PC Bond, and the Trustee's Certificate to be
endorsed thereon, shall be in the following forms, respectively:

[form of face of 2023 pc bond]

     This First Mortgage Bond, 5.21% Series, due 2023 (hereinafter called
the ''2023 PC Bond'') is not transferable except with the prior written
consent of the Company, or to Indianapolis Power & Light Company.

INDIANAPOLIS POWER & LIGHT COMPANY

First Mortgage Bond, 5.21% Series, Due 2023
Due January 1, 2023

No. 1                                           $40,000,000

     INDIANAPOLIS POWER & LIGHT COMPANY, a corporation of the State of
Indiana (hereinafter called the ''Company''), for value received,
hereby promises to pay to AMBAC Indemnity Corporation the Bond
Obligations (as defined in the hereinafter defined Indenture) and to
AMBAC Financial Services, Limited Partnership the Swap Obligations (as
defined in the hereinafter defined Indenture) payable on the dates and
at the times required by the Insurance Agreement and the Swap Agreement
(both as defined in the hereinafter defined Indenture) in lawful money
of the United States of America; provided, however, that the amount
payable hereunder shall not exceed the principal amount of $40,000,000
plus interest at the per annum rate of 5.21%. The amounts payable
hereunder are subject to reduction in the manner described in the
Indenture in the event of reductions in the Bond Obligations and the
Swap Obligations. The amounts payable hereunder will be paid to the
registered owner of this 2023 PC Bond at or before the close of
business on such dates, or if such date shall be a Saturday, Sunday,
holiday or a day on which banking institutions in the City of
Indianapolis or the city of any paying agents are authorized by law to
close, on or before the close of business on the next succeeding
business day on which such banking institutions are open for business.

     REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS 2023 PC BOND SET
FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL, FOR ALL
PURPOSES, HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.

     No recourse shall be had for any amounts payable on this 2023 PC
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, as such, 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, as
such, being waived and released by the terms of the Mortgage, as herein
defined.

     This 2023 PC Bond shall not become obligatory until American
National Bank and Trust Company of Chicago, the Trustee under the
Mortgage, as herein defined, or its successor thereunder, shall have
signed the form of certificate endorsed hereon.

     In Witness Whereof, Indianapolis Power & Light Company has caused
this 2023 PC Bond to be signed in its name by its President or its
Treasurer, by his signature or a facsimile thereof, and its corporate
seal to be affixed hereon, attested by its Secretary or one of its
Assistant Secretaries, by his signature or a facsimile thereof.

                           Indianapolis Power & Light Company

Dated                      By
                                Treasurer
Attest:

By
Secretary

[form of trustee's certificate on 2023 pc bond]

Trustee's Certificate

     This 2023 PC Bond is one of the bonds, of the series herein
designated, provided for in the within-mentioned Mortgage and
Forty-Second Supplemental Indenture thereto.

                  American National Bank and Trust
                  Company of Chicago
                                        Trustee

                  By
                        Authorized Signature

[form of reverse side of 2023 pc bond]

INDIANAPOLIS POWER & LIGHT COMPANY

First Mortgage Bond, 5.21% Series, due 2023
Due January 1, 2023

     This 2023 PC Bond is one of an issue of bonds of the Company,
issuable in series, and is one of a series known as its First Mortgage
Bonds, 5.21% Series, due 2023 (herein called the ''2023 PC Bond'')
limited in aggregate principal amount to Forty Million Dollars
($40,000,000) and established by a Forty-Second Supplemental Indenture
dated as of October 1, 1995 (the ''Indenture''), all bonds of all
series issued and to be issued under and equally secured (except
insofar as any sinking or other fund, established in accordance with
the provisions of the Mortgage hereinafter mentioned, may afford
additional security for the bonds of any particular series) by a
Mortgage and Deed of Trust, dated as of May 1, 1940, executed by the
Company to American National Bank and Trust Company of Chicago, as the
Trustee (which Mortgage and Deed of Trust as supplemented and modified
by all supplemental indentures thereto is hereinafter referred to as
the ''Mortgage''), to which Mortgage reference is made for a
description of the property mortgaged and pledged, the nature and
extent of the security, the rights of the bearers or registered owners
of the bonds in respect of such security, the duties and immunities of
the Trustee and the terms and conditions upon which the bonds are secured.

     This 2023 PC Bond evidences and secures the reimbursement
obligations of the Company to AMBAC under the Insurance Agreement for
the payment by AMBAC of the principal of and interest on the Series
1995B Bonds pursuant to the Municipal Bond Insurance Policy, and to
secure certain payments made by the Company to AFSLP under the Swap
Agreement. Anything herein to the contrary notwithstanding, all amounts
constituting Settlement Amounts, as defined in the Swap Agreement,
shall not be payable hereunder or secured hereby.

     This 2023 PC Bond is subject to redemption in whole or in part at
the times and in the amounts that corresponding redemptions are made on
the Series 1995B Bonds and to the extent that a corresponding reduction
occurs in the notional amount under the Swap Agreement.

     With the consent of the Company and to the extent permitted by and
as provided in the Mortgage, the rights and obligations of the Company
and/or of the holders of the bonds and/or coupons and/or the terms and
provisions of the Mortgage and/or any instruments supplemental thereto
may be modified or altered by affirmative vote of the holders of at
least sixty-six and two-thirds per centum (662/3%) in principal amount
of the bonds affected by such modification or alteration then
outstanding under the Mortgage (excluding bonds disqualified from
voting by reason of the Company's interest therein as provided in the
Mortgage); provided that no such modification or alteration shall
permit the extension of the maturity of the principal of this 2023 PC
Bond or the reduction in the rate of interest hereon or any other
modification in the terms of payment of amounts owing hereunder without
the consent of the holder hereof. The principal hereof may be declared
or may become due and payable prior to the stated date of maturity
hereof, on the conditions, in the manner and at the time set forth in
the Mortgage, upon the occurrence of a completed default as in the
Mortgage provided.

     No reference herein to the Mortgage, and no provision of this 2023
PC Bond or of the Mortgage, shall alter or impair the obligation of the
Company, to pay, subject to the provisions of the Forty-Second
Supplemental Indenture, all amounts owing under the Swap Agreement and
the Insurance Agreement at the place, at the respective times and in
the manner herein prescribed.

     This 2023 PC Bond is issuable only in full registered form without
coupons in denominations of Five Thousand Dollars and any larger
denomination which is a whole multiple of Five Thousand Dollars.

     This 2023 PC Bond will be nontransferable except with the prior
written consent of the Company and to the Company. To the extent that
it is transferable, it is transferable by the registered holder
thereof, in person or by attorney duly authorized in writing, on the
books of the Company at the office or agency of the Company in the City
of Chicago, Illinois, upon surrender thereof for cancellation at said
office and upon presentation of a written instrument of transfer duly
executed. Thereupon, the Company shall issue in the name of the
transferee, and the Trustee shall authenticate and deliver, a new
registered 2023 PC Bond or Bonds, in authorized denominations, of equal
aggregate principal amount. Any such transfer shall be subject to the
terms and conditions specified in the Mortgage and in the Forty-Second
Supplemental Indenture.

[end of 2023 pc bond form]

     Section 4. Until the 2023 PC Bond in definitive form is ready for
delivery, the Company may execute, and upon its request in writing the
Trustee shall authenticate and deliver, in lieu thereof, a fully
registered 2023 PC Bond in temporary form, as provided in Section 15 of
the Original Mortgage. Such bond may, in lieu of the statement of the
specific redemption prices required to be set forth in such bond in
definitive form, include a reference to this Forty-Second Supplemental
Indenture for a statement of such redemption prices.

     Section 5. The Company covenants and agrees that it will duly and
punctually pay to the holder of the 2023 PC Bond all amounts due and
owing under the Swap Agreement or the Insurance Agreement up to the
Stated Amount, at the dates and place and in the manner mentioned
therein; provided, however, that:

     (a) the obligation of the Company hereunder to AFSLP shall be
discharged upon termination of the Swap Agreement and payment of all
amount owing thereunder; and

     (b) the obligation of the Company hereunder to AMBAC shall be
discharged upon termination of the Swap Agreement together with the
delivery to the Trustee under the Indenture of Trust dated as of
October 1, 1995 between the City and Bank One, Indianapolis, NA, as
Trustee, of a new First Mortgage Bond in the principal amount of the
Series 1995B Bonds then outstanding.

Upon payment of all amounts owing hereunder, the 2023 PC Bond is paid
or deemed paid in full, and upon its receipt by the Company, such bond
shall be delivered to the Trustee for cancellation. The Company shall
promptly inform the Trustee of all payments made and credits availed of
with respect to its obligations on the 2023 PC Bond. The Trustee shall
not be required to recognize any payment made or credit availed of with
respect to any 2023 PC Bond unless it has received (a) the bond for
cancellation by it, or (b) certificates signed by duly authorized
officers of AMBAC Indemnity or AFSLP specifying the amount of such
payment or credit. In the absence of receipt by the Trustee of any 2023
PC Bond, any such certificates shall be controlling and conclusive.

     Section 6. The covenant of the Company to make annual payments to
the Trustee for a Maintenance and Improvement Fund as contained in
Section 41 of the Original Mortgage and in the first twenty-four
Supplemental Indentures to the Original Mortgage creating the several
series of First Mortgage Bonds presently outstanding under such
Supplemental Indentures shall not apply to nor be for the benefit of
the 2023 PC Bond, and the Company reserves the right, without any
consent of, or other action by, the holder of the 2023 PC Bond, to
amend, modify or delete the provisions of the Mortgage relating to such
Maintenance and Improvement Fund and by acceptance of the 2023 PC Bond
the holder thereof waives any right or privilege so to consent or take
any other action with respect thereto.

     Section 7. The Company covenants that, so long as the 2023 PC Bond
shall remain outstanding, it will comply with all of the provisions of
Section 47 of the Original Mortgage, including the provisions with
respect to limitations on dividends and distributions and the purchase
and redemption of stock.

     Section 8. The Trustee hereby accepts the trusts herein declared,
provided and created and agrees to perform the same upon the terms and
conditions herein and in the Mortgage set forth and upon the following
terms and conditions:

     The recitals contained herein and in the bonds shall be taken as the
statements of the Company and the Trustee assumes no responsibility for
the correctness of the same. The Trustee makes no representations as to
the validity or adequacy of the security afforded hereby, or as to the
validity of this Forty-Second Supplemental Indenture or of the 2023 PC
Bond issued hereunder.

     Section 9. Whenever in this Forty-Second Supplemental Indenture
either of the parties hereto is named or referred to, this shall,
subject to the provisions of Article XVII of the Original Mortgage, be
deemed to include the successors or assigns of such party, and all the
covenants and agreements in this Forty-Second Supplemental Indenture
contained by or on behalf of the Company, or by or on behalf of the
Trustee, shall, subject as aforesaid, bind and inure to the benefit of
the respective successors and assigns of such parties, whether so
expressed or not.

     Section 10. Nothing in this Forty-Second Supplemental Indenture
expressed or implied, is intended or shall be construed to confer upon,
or to give to, any person, co-partnership or corporation, other than
the parties hereto and the holders of the bonds and coupons outstanding
under the Mortgage, any right, remedy, or claim under or by reason of
this Forty-Second Supplemental Indenture or any covenant, condition or

stipulation hereof; and all the covenants, conditions, stipulations,
promises and agreements in this Forty-Second Supplemental Indenture
contained by or on behalf of the Company shall be for the sole and
exclusive benefit of the parties hereto and of the holders of the bonds
and of the coupons outstanding under the Mortgage.

     Section 11. The Company covenants that all of the terms, provisions
and conditions of the Mortgage shall be applicable to the 2023 PC Bond
issued hereunder, except as herein otherwise provided and except
insofar as the same may be inconsistent with the provisions of this
Forty-Second Supplemental Indenture.

     Section 12. This Forty-Second Supplemental Indenture is dated as of
October 1, 1995, although executed and delivered on the date of the
acknowledgement hereof by the Trustee; and shall be simultaneously
executed and delivered in several counterparts, and all such
counterparts executed and delivered, each as an original, shall
constitute but one and the same instrument.

     In Witness Whereof, Indianapolis Power & Light Company, party of the
first part, has caused its corporate name to be hereunto affixed and
this instrument to be signed and acknowledged by its Vice-President or
Treasurer, and its corporate seal to be hereto affixed and attested by
its Secretary or an Assistant Secretary, for and in its behalf, and
American National Bank And Trust Company Of Chicago, party of the
second part, as Trustee, has caused its corporate name to be hereunto
affixed and this instrument to be signed and acknowledged by one of its
Vice-Presidents, and its corporate seal to be hereto affixed and
attested by one of its Assistant Secretaries, all as of the day, month
and year first above written.

                        Indianapolis Power & Light Company,

                        /s/   Steven L. Meyer
                        By    Steven L. Meyer,
                                Treasurer

Attest:

/s/   Wendy V. Yerkes
Wendy V. Yerkes,
Assistant Secretary

                        American National Bank And Trust Company of
                                Chicago

                        /s/   Ronald B. Bremen
                        By    Ronald B. Bremen,
                                Vice-President

Attest:
(Seal)
/s/   Robert M. Selangowski

Robert M. Selangowski,
Assistant Secretary

State of Indiana )
                 ) ss:
County of Marion )

     On this 12th day of October, in the year 1995, before me, a Notary
Public in and for the County and State aforesaid, personally came
Steven L. Meyer, Treasurer, and Wendy V. Yerkes, Assistant Secretary, of
Indianapolis Power & Light Company, one of the corporations described
in and which executed the foregoing instrument, to me personally known
and known to me personally to be such Treasurer and Assistant
Secretary, respectively. Said Steven L. Meyer and Wendy V. Yerkes being
by me severally duly sworn did depose and say that the said Steven L.
Meyer resides in Marion County, Indiana and the said Wendy V. Yerkes
resides in Marion County, Indiana; that said Steven L. Meyer is
Treasurer and said Wendy V. Yerkes is Assistant Secretary of said
Indianapolis Power & Light Company; that each of them knows the
corporate seal of said corporation; that the seal affixed to said
instrument and bearing the name of said corporation is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation; and that each of them signed his name thereto by like
order; and each of them acknowledged the execution of said instrument
on behalf of said corporation to be his free and voluntary act and deed
and the free and voluntary act and deed of said corporation, for the
uses and purposes therein set forth.

     In Witness Whereof, I have hereunto set my hand and affixed my
official seal this 12th day of October, 1995.

                        /s/   Sandra L. Stewart

                              Sandra L. Stewart
                              Notary Public

My Commission Expires:
     July 24, 1998

My County of Residence is:
     Johnson

(Notarial Seal)

State of Illinois  )
                   ) ss:
County of Cook     )

     On this 12th day of October, in the year 1995, before me, a Notary
Public in and for the County and State aforesaid, personally came Ronald B.
Bremen, Vice-President, and Robert M. Selangowski, Assistant
Secretary, of American National Bank and Trust Company of Chicago, one
of the corporations described in and which executed the foregoing
instrument, to me personally known and known to me personally to be
such Senior Vice-President and Assistant Secretary, respectively. Said
Ronald B. Bremen and Robert M. Selangowski, being by me severally sworn
did depose and say that the said Ronald B. Bremen resides in Glencoe,
Illinois, and that the said Robert M. Selangowski resides in Lansing,
Illinois; that said Ronald B. Bremen is Vice-President and said Robert M.
Selangowski is Assistant Secretary of said American National Bank and Trust
Company of Chicago; that each of them knows the corporate seal of said
corporation; that the seal affixed to said instrument and bearing the
name of said corporation is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation; that each
of them signed his name thereto by like authority; and each of them
acknowledged the execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and the free and
voluntary act and deed of said corporation, for the uses and purposes
therein set forth.

     In Witness Whereof, I have hereunto set my hand and affixed my
official seal this 12th day of October, 1995.

                                /s/   Bernadette G. Janairo
                                      Bernadette G. Janairo
                                      Notary Public

My Commission Expires:
     May 22, 1998

My County of Residence is:
     Cook

(Notarial Seal)

This instrument was prepared by
Bryan G. Tabler

<PAGE>

                                                                  Exhibit 4.4.13

                                                                [CONFORMED COPY]
================================================================================

                       INDIANAPOLIS POWER & LIGHT COMPANY
                                       TO
                        AMERICAN NATIONAL BANK AND TRUST
                               COMPANY OF CHICAGO
                                                Trustee

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

                       Forty-Third Supplemental Indenture
                                  -------------

                           Dated as of August 1, 2001

                       ESTABLISHING FIRST MORTGAGE BONDS,
                             5.75% Series, Due 2021

================================================================================

<PAGE>

                                       ii

                               TABLE OF CONTENTS*

                                       of
                       FORTY-THIRD SUPPLEMENTAL INDENTURE
                                       of
                       INDIANAPOLIS POWER & LIGHT COMPANY
                                                                            Page

PARTIES........................................................................1
RECITALS ......................................................................1
SECTION 1       Granting clauses...............................................3
                    Part I   Electric Distributing Systems.....................4
                    Part II Reserved...........................................4
                    Part III Indeterminate Permits and Franchises..............4
                    Part IV  Other Property....................................5
                    General and after-acquired title...........................6
SECTION 2       Designation of Forty-Third series of bonds and kind and
                    denominations thereof .....................................6
                Designation of Company or American National Bank and Trust
                    Company of Chicago as paying agent.........................6
                Purpose of bonds...............................................7
                Redemption of bonds............................................7
                Exchange of bonds.............................................12
                Transfer of bonds.............................................12
                Series limited to $40,000,000.................................13
SECTION 3       Form of fully registered bond.................................13
                Form of Trustee's certificate on bonds........................15
SECTION 4       Temporary bonds...............................................19
SECTION 5       Payment of principal and interest; credits....................19
SECTION 6       Annual Payments for Maintenance and Improvement Fund..........20
SECTION 7       Compliance with Section 47 of Original Mortgage with
                   respect to dividend restrictions...........................20
SECTION 8       Acceptance of trusts by Trustee and conditions of
                   Acceptance.................................................20
-------------------
*    Table of Contents is not part of the Forty-Third Supplemental Indenture and
     should not be considered  such. It is included  herein only for purposes of
     convenient reference.
<PAGE>

                                      iii

                                                                            Page

SECTION 9         Successors and assigns......................................20
SECTION 10        Limitation of rights hereunder..............................21
SECTION 11        Compliance with terms, provisions and
                        conditions of Mortgage................................21
SECTION 12        Execution in counterparts...................................21

TESTIMONIUM...................................................................22
SIGNATURES AND SEALS..........................................................22
ACKNOWLEDGEMENTS..............................................................22

<PAGE>

     THIS  FORTY-THIRD  SUPPLEMENTAL  INDENTURE,  dated as of  August  1,  2001,
between  INDIANAPOLIS  POWER & LIGHT  COMPANY,  a  corporation  of the  State of
Indiana,  hereinafter  sometimes  called the "Company," party of the first part,
and AMERICAN  NATIONAL  BANK AND TRUST  COMPANY OF CHICAGO,  a national  banking
association,  as Trustee,  hereinafter  sometimes called the "Trustee," party of
the second part;

     WHEREAS, the Company by a Mortgage and Deed of Trust (hereinafter sometimes
called  the  "Original  Mortgage"  when  referred  to as  existing  prior to any
supplement thereto or modification  thereof, and the "Mortgage" when referred to
as now or heretofore supplemented and modified) dated as of May 1, 1940, made to
said American National Bank and Trust Company of Chicago,  as Trustee, to secure
the  payment of the bonds  issued from time to time under the  Mortgage  for the
purposes of and subject to the  limitations  specified in the  Mortgage,  and to
secure the  performance  of the  covenants  therein  contained,  conveyed to the
Trustee  thereunder  upon certain  trusts,  terms and  conditions,  and with and
subject to certain provisos and covenants  therein  contained,  all and singular
the  property,  rights and  franchises  which the  Company  then owned or should
thereafter  acquire,  excepting the property  expressly excepted by the terms of
the Original Mortgage or any indenture  supplemental  thereto, to which Mortgage
reference is hereby made for greater certainty; and

     WHEREAS,  the  Original  Mortgage  has been  supplemented  and  modified by
supplemental  indentures  dated as of May 1, 1942, as of February 1, 1948, as of
April 1, 1949, as of October 1, 1949 (two),  as of February 1, 1951, as of March
1, 1953,  as of June 1, 1956,  as of March 1, 1958, as of October 1, 1960, as of
August 1, 1964, as of April 1, 1966, as of May 1, 1967, as of May 1, 1968, as of
October 1, 1970,  as of March 1, 1972,  as of March 15, 1973, as of February 15,
1974, as of August 15, 1974, as of September 15, 1975, as of June 1, 1976, as of
July 1, 1976,  as of August 1, 1977,  as of September  1, 1978,  as of August 1,
1981 (two),  as of November 1, 1983,  as of November 1, 1984,  as of December 1,
1984,  as of September 1, 1985, as of October 1, 1986, as of June 1, 1989, as of
August 1, 1989,  as of October 15,  1991,  as of August 1, 1992,  as of April 1,
1993, as of October 1, 1993 (two),  as of February 1, 1994 (two),  as of January
15, 1995, and as of October 1, 1995; and

     WHEREAS,  Section 8 of the Original Mortgage provides,  among other things,
that the form of each series of bonds  (other  than the initial  issue of bonds)
issued  thereunder  shall be  established by an indenture  supplemental  thereto
authorized by resolution of the Board of Directors of the Company,  and that the
form of each series, as established by the Board of Directors, shall specify the
descriptive  title of the bonds and various  other terms  thereof,  and may also
contain such other  provisions as the Board of Directors may, in its discretion,
cause to be inserted therein expressing or referring to the terms and conditions
upon which such bonds are to be issued and secured  under the Original  Mortgage
or any indenture supplemental thereto or in modification thereof; and

     WHEREAS, the Company entered into a Loan Agreement, dated as of May 1, 1991
(hereinafter  called the "Loan Agreement") with the City of Petersburg,  Indiana
(the  "City"),  in order to obtain  funds  for the  refunding  of the  aggregate
principal amount of Forty Million Dollars  ($40,000,000) of the City's Pollution
Control Revenue Bonds,  Series 1981 (Indianapolis Power & Light Company Project)
issued by the City  pursuant to related loan  agreements to pay a portion of the
cost of acquisition, construction,  installation and equipping by the Company of
certain pollution control facilities, sewage facilities and solid waste disposal
facilities (the "Facilities") at the Petersburg Generating Station Units 1, 2, 3
and 4 (the "Plant") and the issuance of $40,000,000  aggregate  principal amount
of  the  City's  Pollution  Control   Refunding   Revenue  Bonds,   Series  1991
(Indianapolis Power & Light Company Project) (the "Bonds"); and

     WHEREAS, the Company has elected to convert the applicable interest rate on
the Bonds to the Long Term Rate  effective as of August 1, 2001, and pursuant to
the Loan Agreement,  the Company has agreed to issue a series of its bonds under
the Mortgage and this  Forty-Third  Supplemental  Indenture in order to evidence
and secure its indebtedness under the Loan Agreement; and

     WHEREAS,  the  Company  now  desires  to  provide  for  the  establishment,
execution,  authentication  and delivery under the Mortgage of bonds of a series
to be known as its "First Mortgage Bonds,  5.75% Series, due 2021" (the bonds of
said  series  being  hereinafter  sometimes  referred to as the "2021 PC Bond"),
limited  to  the   aggregate   principal   amount  of  Forty   Million   Dollars
($40,000,000); and

     WHEREAS,  all  things  necessary  to make  the  2021  PC  Bond  hereinafter
described,  when duly executed by the Company and authenticated and delivered by
the Trustee, a valid,  binding and legal obligation of the Company,  and to make
this  Forty-Third   Supplemental   Indenture  a  valid  and  binding   agreement
supplemental to the Original Mortgage, have been done and performed; and

     WHEREAS,  the  execution  and  delivery by the Company of this  Forty-Third
Supplemental  Indenture,  and the  terms  of the 2021 PC Bond,  have  been  duly
authorized by the Board of Directors of the Company by  appropriate  resolutions
of said Board; and

     WHEREAS,  it is provided in and by the Original  Mortgage  that the Company
will execute and deliver such  further  instruments  and do such further acts as
may be  necessary  or proper to carry out more  effectively  the purposes of the
Mortgage,  and to make  subject  to the lien  thereof  any  property  thereafter
acquired and intended to be subject to the lien thereof; and

     WHEREAS,  the Company has,  since the date of execution and delivery of the
Original  Mortgage,   purchased  and  acquired  property  and  desires  by  this
Forty-Third  Supplemental  Indenture  specifically to convey to the Trustee such
property  for the better  protection  and security of the bonds issued and to be
issued under the Original Mortgage, or any indenture supplemental thereof;

     NOW,  THEREFORE,  THIS INDENTURE  WITNESSETH  that, in consideration of the
premises and of the acceptance or purchase of the 2021 PC Bond by the registered
owners thereof, and of the sum of one dollar,  lawful money of the United States
of America,  to the Company duly paid by the Trustee at or before the  execution
and delivery of this Forty-Third  Supplemental Indenture, the receipt whereof is
hereby  acknowledged,  the Company and the Trustee,  respectively,  have entered
into, executed and delivered this Forty-Third  Supplemental  Indenture,  for the
uses and purposes hereinafter expressed, that is to say:

     SECTION 1. The Company has granted,  bargained,  sold, released,  conveyed,
assigned, transferred,  mortgaged, pledged, set over and confirmed, and by these
presents does grant, bargain, sell, release, convey, assign, transfer, mortgage,
pledge,  set over and confirm (subject,  however,  to permitted  encumbrances as
defined in the Original  Mortgage),  unto said American  National Bank and Trust
Company of Chicago,  as Trustee,  as herein provided,  and its successors in the
trusts declared in the Original Mortgage and herein, all of the property,  real,
personal  and mixed,  tangible  and  intangible,  of every kind,  character  and
description  which the Company has acquired  since the execution and delivery of
the  Original  Mortgage and now owns  (except  property,  rights and assets of a
character  similar to that  excluded from the lien and operation of the Mortgage
by the Granting  Clauses of the Original  Mortgage,  which property,  rights and
assets are excluded  from the lien and  operation  of the  Mortgage  only to the
extent  provided  therein),   including,  but  without  otherwise  limiting  the
generality of the foregoing,  the following  described  property situated within
the State of Indiana:

                                     PART I.

                         ELECTRIC DISTRIBUTING SYSTEMS.

     All electric  distributing  systems of the Company acquired by it after May
1, 1940,  the date of the  Original  Mortgage,  and  located in the  Counties of
Bartholomew,  Boone, Daviess,  Gibson,  Greene,  Hamilton,  Hancock,  Hendricks,
Johnson,  Knox, Madison,  Marion,  Monroe,  Morgan, Owen, Pike, Putnam,  Shelby,
Sullivan and Switzerland,  State of Indiana;  and any additions to or extensions
of any  such  systems,  together  with  the  buildings,  erections,  structures,
transmission lines, power stations, sub-stations,  engines, boilers, condensers,
pumps, turbines,  machinery,  tools, conduits,  manholes,  insulators,  dynamos,
motors,  lamps, cables,  wires, poles,  towers,  cross-arms,  piers,  abutments,
switchboard   equipment,    meters,    appliances,    instruments,    apparatus,
appurtenances,  maps, records, ledgers, contracts, facilities and other property
or  equipment  used or provided  for use in  connection  with the  construction,
maintenance, repair and operation thereof; together also with all of the rights,
privileges, rights-of-way,  franchises, licenses, grants, liberties, immunities,
ordinances, permits and easements of the Company in respect of the construction,
maintenance, repair and operation of said systems.

                                    PART II.
                                   [Reserved ]

                                    PART III.
                      INDETERMINATE PERMITS AND FRANCHISES.

     All indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations by or from any state, county, municipality, or other governmental
authority,  acquired by the Company after May 1, 1940,  the date of the Original
Mortgage, including particularly,  but not limited to, any indeterminate permits
under the Public Service  Commission  Act of the State of Indiana,  and all Acts
amendatory thereof and supplemental  thereto,  and all right, title and interest
therein now owned by the Company, and all renewals, extensions and modifications
of said  indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations,  and  of  the  indeterminate  permits,  franchises,  ordinances,
licenses,  and  other  authorizations  referred  to in Part VII of the  Granting
Clauses of the Original Mortgage.

                                    PART IV.

                                 OTHER PROPERTY.

     All other  property,  whether  real,  personal or mixed  (except any in the
Mortgage expressly excepted), now owned by the Company and wheresoever situated,
including  (without in anywise  limiting or impairing by the  enumeration of the
same the  scope  and  intent  of the  foregoing  or of any  general  description
contained in the  Mortgage) all lands,  flowage  rights,  water rights,  flumes,
raceways,  dams,  rights-of-way  and roads;  all plants  for the  generation  of
electricity by water, steam and/or other power, power houses, telephone systems,
water systems, power plants, hot water plants, sub-stations, transmission lines,
distribution systems, bridges,  culverts and tracts; all offices,  buildings and
structures and the equipment thereof; all machinery,  engines, boilers, dynamos,
machines,   regulators,   meters,  transformers,   generators  and  motors;  all
appliances whether electrical,  gas or mechanical,  conduits,  cables and lines;
all pipes whether for water, and power, or other purposes;  all mains and pipes,
service  pipes,   fittings,   valves  and  connections,   poles,  wires,  tools,
implements,   apparatus,  furniture  and  chattels;  all  municipal  franchises,
indeterminate  permits,  and other  permits;  all lines for the  transportation,
transmission and/or distribution of electric current, and power or water for any
purpose,  including  towers,  poles,  wires,  cables,  pipes,  conduits  and all
apparatus  for use in  connection  therewith;  all real estate,  lands,  leases,
leaseholds; all contracts,  whether heat, light, power, water or street lighting
contracts;  all  easements,   servitudes,  licenses,  permits,  rights,  powers,
franchises,  privileges,  rights-of-way  and other rights in or relating to real
estate  or the  occupancy  of the  same and  (except  as  hereinafter  or in the
Mortgage expressly excepted) all the right, title and interest of the Company in
and to all other  property  of any kind or nature  appertaining  to and/or  used
and/or  occupied  and/or  enjoyed in connection  with any property  hereinbefore
described or referred to;

     TOGETHER   WITH  all  and  singular  the   tenements,   hereditaments   and
appurtenances  belonging or in anywise appertaining to the aforesaid property or
any part thereof,  with the reversion and  reversions,  remainder and remainders
and  (subject to the  provisions  of Section 64 of the Original  Mortgage),  the
tolls, rents, revenues,  issues, earnings,  income, product and profits thereof,
and all the estate,  right,  title and 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, indeterminate permits, franchises,  ordinances, licenses
and other authorizations and every part and parcel thereof.

     SECTION  2.  There  shall be and is hereby  established  a series of bonds,
limited in aggregate principal amount to Forty Million Dollars  ($40,000,000) to
be issued under and secured by the Mortgage,  to  be designated  "5.75%  Series,
due 2021", each  of which shall also bear the descriptive  title "First Mortgage
Bonds";  said  bonds shall mature on AUGUST 1, 2021, and shall be issued only as
fully  registered  bonds without  coupons in the  denomination  of five thousand
dollars and any larger  denomination  which is a whole multiple of five thousand
dollars;  they shall bear interest  from the  beginning of the current  interest
period during which each bond is dated, at the rate per annum  designated in the
title thereof,  payable  semi-annually,  on February 1 and August 1 of each year
(except that the first interest  payment  thereon shall be made February 1, 2002
for the period from August 1, 2001 through January 31, 2002);  and the principal
of, premium,  if any, and interest on said bond shall be payable in lawful money
of the United  States of  America  at the  office of the  Company in the City of
Indianapolis, Indiana, or, if no such office is maintained, at American National
Bank and Trust Company of Chicago,  which is hereby designated and appointed the
office  and  agency of the  Company in the City of  Chicago,  Illinois,  for the
payment of the principal of, premium,  if any, and interest on the 2021 PC Bond,
if necessary,  and for the  registration,  transfer and exchange of such bond as
hereinafter  provided;  all  reference  herein  to the  office  or agency of the
Company in the City of Chicago,  Illinois,  for the payment of the principal of,
premium, if any, and interest on the 2021 PC Bond, or the registration, transfer
or  exchange  thereof,  being to  American  National  Bank and Trust  Company of
Chicago.  In event of the  resignation or inability to act of American  National
Bank and Trust Company of Chicago,  then a successor agent for all such purposes
in the City of Chicago,  Illinois,  shall be appointed by the Board of Directors
of the Company.

     The 2021 PC Bond shall be dated as of the date of  authentication  thereof,
except as otherwise provided in Section 10 of the Original Mortgage.

     The  2021 PC Bond  will be  issued  to  evidence  and  secure a loan to the
Company by the City pursuant to the Loan  Agreement of certain funds  previously
acquired  by the City  through  the  issuance  of City of  Petersburg,  Indiana,
Pollution  Control Refunding Revenue Bonds,  Series 1991  (Indianapolis  Power &
Light Company  Project) (the "Series 1991 Bonds"),  authenticated  and delivered
under and pursuant to an Indenture of Trust dated as of May 1, 1991 (hereinafter
called the "City Indenture"),  by and between the City and National City Bank of
Indiana,   as  successor  to  Merchants   National   Bank  &  Trust  Company  of
Indianapolis, as Trustee (the "City Trustee"). Pursuant to the City's pledge and
assignment of the Loan Agreement,  as set forth in the City Indenture,  the 2021
PC Bond shall be issued to the City and assigned to the City Trustee. All of the
proceeds of the Series 1991 Bonds were used for the  refunding of the  aggregate
principal amount of Forty Million Dollars  ($40,000,000) of the City's Pollution
Control Revenue Bonds,  Series 1981 (Indianapolis Power & Light Company Project)
issued by the City pursuant to applicable loan agreements.

     Upon the notice and in the  manner  and with the  effect  provided  in this
Section 2, the 2021 PC Bond shall be  redeemable  prior to the maturity  thereof
under any one or more of the following circumstances:

(a)  In whole,  at the option of the  Company,  if the  Facilities  or the Plant
     shall have been  damaged or  destroyed to such extent that (i) it cannot be
     reasonably expected, in the opinion of the Company, to be restored within a
     period of six (6) months to the  condition  thereof  immediately  preceding
     such damage or destruction, or (ii) to such extent that the Company, in its
     reasonable  opinion,  is  thereby  prevented  from  carrying  on its normal
     operations  for a period of six (6) months or more, or (iii) to such extent
     that the restoration  thereof would not be, taking into  consideration  the
     net  proceeds  of any  insurance  payable  as a result  of such  damage  or
     destruction, economic in the reasonable opinion of the Company.

(b)  In whole,  at the option of the Company,  if title to, or the temporary use
     of, all or  substantially  all of the  Facilities or the Plant,  shall have
     been taken under the exercise of the power of eminent domain, or should any
     governmental  body or  agency  exercise  any  right  which  it may  have to
     purchase or designate a purchaser  for the same, or should such property be
     sold to any  governmental  body or agency so that the result of such taking
     or takings is that (i) the Company,  in its reasonable  opinion, is thereby
     prevented  from carrying on its normal  operations of either the Facilities
     or the Plant for a period of six (6) months or more,  (ii) the  restoration
     required as a result of the taking  cannot be reasonably  expected,  in the
     opinion of the Company,  to be completed in a period of six (6) months,  or
     (iii) the restoration  thereof,  taking into consideration the net proceeds
     from such eminent  domain  award,  would not be economic in the  reasonable
     opinion of the Company.

(c)  In whole,  at the option of the Company,  if, as a result of any changes in
     the  Constitution or law of the State of Indiana or the Constitution or law
     of the United States of America or of legislative or administrative  action
     (whether  state or  federal) or by final  decree,  judgment or order of any
     court or administrative  body (whether state or federal) the Loan Agreement
     or the Note shall,  in the  reasonable  opinion of counsel for the Company,
     have  become  void  or   unenforceable  or  impossible  of  performance  in
     accordance  with the intent and purpose of the parties as  expressed in the
     Loan Agreement;  or unreasonable burdens or excessive liabilities shall, in
     the reasonable  opinion of the Company,  have been imposed upon the City or
     the Company, with respect to the Facilities or operation thereof, including
     without limitation federal, state or other ad valorem,  property, income or
     other taxes not being imposed on the date of the Loan Agreement  other than
     ad valorem taxes  presently  levied upon privately  owned property used for
     the same general purpose as the Facilities.

(d)  In  whole,  at the  option  of the  Company,  if  changes  in the  economic
     availability of raw materials,  operating supplies or facilities  necessary
     for the  operation of the  Facilities  or the Plant shall have  occurred or
     technological  or other  changes  shall  have  occurred  which  render  the
     Facilities uneconomic for use in the reasonable opinion of the Company.

(e)  In part,  at the  option of the  Company,  to the  extent of net  proceeds,
     received from any condemnation  award,  taking or sale as stated herein, if
     title to, or the temporary use of any portion of the Facilities  shall have
     been taken under the exercise of the power of eminent domain, or should any
     governmental  body or  agency  exercise  any  right  which  it may  have to
     purchase or designate a purchaser of the same,  or should such  property be
     sold to any governmental body or agency; provided the Company shall furnish
     to the City and the City Trustee a certificate of an  Independent  Engineer
     (as defined in the Loan Agreement) selected by the Company stating (i) that
     the  property  forming  the part of the  Facilities  that was taken by such
     condemnation,  taking  or  sale  is  not  essential  to  the  character  or
     significance  of the  Facilities,  or (ii)  that the  Facilities  have been
     restored to a condition  substantially  equivalent to their condition prior
     to the taking by such  condemnation,  taking or sale proceedings,  or (iii)
     that  improvements  have been acquired which are suitable for the operation
     of the Facilities as a qualified exempt facility.

(f)  In whole or in part,  at the option of the  Company at any time on or after
     August 1, 2011,  at a price  equal to the  principal  amount of the 2021 PC
     Bond so to be  redeemed  and accrued  interest  to the date of  redemption,
     together  with a premium  equal to a  percentage  of the  principal  amount
     thereof set forth under the heading "Redemption Premium" in the form of the
     2021 PC Bond hereinafter  recited, so long as the Company is not in default
     under the Loan Agreement or the 2021 PC Bond.

(g)  In the event all or substantially all of the mortgaged and pledged property
     under the Mortgage,  or all or substantially  all such property used in the
     business  of   generating,   manufacturing,   transporting,   transmitting,
     distributing or supplying  electricity,  should be taken by exercise of the
     power of eminent domain, or should any governmental body or agency exercise
     any right  which it may have to purchase  or  designate a purchaser  of the
     same, or should such property be sold to any  governmental  body or agency,
     the Company  shall be obligated to redeem the 2021 PC Bond  outstanding  as
     promptly as possible in  accordance  with  paragraph B of Section 69 of the
     Original Mortgage.

(h)  In the event that the Company is notified by the City  Trustee  that (i) an
     event of default under the City  Indenture has occurred and is  continuing,
     and (ii) the City Trustee has declared the principal of all the Series 1991
     Bonds then  outstanding  immediately  due and payable  pursuant to the City
     Indenture,  the Company  shall call for  redemption,  on a redemption  date
     selected by it not later than thirty (30) days  following the date on which
     such  notice is  mailed,  the 2021 PC Bond  outstanding,  and shall on such
     redemption date redeem the same; provided,  however,  that such requirement
     of redemption  shall be deemed waived,  if prior to the date fixed for such
     redemption of the 2021 PC Bond (x) such event of default is waived or cured
     as set forth in the City  Indenture,  or (y) there shall have  occurred any
     completed  default (as defined in the  Mortgage)  which affects any bond of
     any series  outstanding  under the Mortgage and which completed default has
     not been cured and made good prior to such  redemption  date,  it being the
     intent of this  proviso  that,  in lieu of such  right to  redemption,  the
     holder of the 2021 PC Bond  shall be  entitled  only to such  rights as are
     available to the holders of bonds of any other series outstanding under the
     Mortgage  in the  event  of  such  completed  default;  and in  case of any
     subsequent  occurrence or  continuance  of the events  described in (i) and
     (ii) of this  Section  2(h),  the  Company  shall have the same  obligation
     (subject to the same proviso) to redeem the 2021 PC Bond.

(i)  In the event the City  Trustee  notifies  the Company and the City that the
     interest  payable  on the Series  1991  Bonds held by persons  other than a
     "substantial user" or a "related person" as those terms are used in Section
     147(a)(2)  of the  Internal  Revenue  Code of 1986,  as  amended,  has been
     determined by a court of competent  jurisdiction  or a formal ruling of the
     Internal Revenue Service to be subject to federal income taxation by reason
     of a breach by the Company of any covenant,  agreement or representation in
     the  Loan  Agreement,  the  Company  shall  call  the  2021  PC  Bond  then
     outstanding  to be redeemed  within ninety (90) days after the date of such
     notice; provided, however, that such requirement of redemption,  whether in
     whole or in part  shall be deemed  waived  if,  prior to the date fixed for
     redemption of the 2021 PC Bond  pursuant to this Section 2(i),  there shall
     have  occurred any  completed  default (as defined in the  Mortgage)  which
     affects any bond of any series  outstanding  under the  Mortgage  and which
     completed default has not been cured and made good prior to such redemption
     date,  it being the intent of this proviso  that,  in lieu of such right to
     redemption,  the holder of the 2021 PC Bond shall be entitled  only to such
     rights  as are  available  to the  holders  of  bonds of any  other  series
     outstanding under the Mortgage in the event of such completed default;  but
     when any such  completed  default  shall have been cured and made good,  if
     interest  on the Series  1991  Bonds  shall  still be taxable as  described
     above,  the  Company  shall have the same  obligation  (subject to the same
     proviso)  to redeem  the 2021 PC Bond  within  ninety  (90) days  after the
     curing and making good of such completed  default;  provided further,  that
     the Company may call for redemption such portion of the 2021 PC Bond, which
     in the written  opinion of an attorney or firm of attorneys  of  nationally
     recognized standing on the subject of municipal bonds, would allow the City
     Trustee to redeem the Series  1991 Bonds in part,  which  redemption  would
     have  the  result  that the  interest  payable  on the  Series  1991  Bonds
     remaining outstanding after such redemption in part would not be subject to
     federal income  taxation in the hands of persons other  than a "substantial
     user" or  a "related person" as  those  terms are used in Section 147(a)(2)
     of the Internal Revenue Code of 1986, as amended.

     In case of  redemption  of the 2021 PC Bond in  whole  for the  purpose  of
prepayment under the Loan Agreement  pursuant to subsections (a), (b), (c), (d),
(f), (g), (h) or (i) above,  the amounts  payable upon redemption of the 2021 PC
Bond shall be a sum  sufficient,  together with other funds  deposited  with the
City  Trustee and  available  for such  purpose,  to pay the  principal  of (and
premium,  in the case of redemption  pursuant to (f) above), and interest on the
2021 PC Bond then  outstanding  and to pay all reasonable and necessary fees and
expenses of the City Trustee  accrued and to accrue through final payment of the
2021 PC Bond.

     In case of redemption in part pursuant to (e), (f) or (i) above, the amount
payable by the Company under this Forty-Third  Supplemental Indenture,  the Loan
Agreement  and the 2021 PC Bond shall be a sum  sufficient,  together with other
funds  deposited  with the Trustee and available  for such  purpose,  to pay the
principal of (and premium in the case of  prepayment  pursuant to (f) above) and
interest on the 2021 PC Bond so to be redeemed,  which sum  together  with other
funds  deposited  with the City Trustee and  available for such purpose shall be
sufficient to pay the principal of, premium,  if any, and interest on the Series
1991 Bonds and to pay all reasonable and necessary fees and expenses of the City
Trustee accrued and to accrue through such partial prepayment.

     The 2021 PC Bond and the Series 1991 Bonds shall be  redeemable at any time
within one hundred eighty (180) days following the event or events  described as
giving rise to an option of the Company to redeem them in subsections  (a), (b),
(c), (d) or (e) above.

     To exercise any of the options  granted to redeem the 2021 PC Bond in whole
or in part or to comply with any obligations to redeem the 2021 PC Bond in whole
or in part imposed in this Section 2, the Company  shall give written  notice of
the date of redemption  to the City  Trustee,  which date shall be not less than
thirty  (30) days nor more  than  sixty  (60)  days from the date the  notice is
mailed.  No further notice,  by publication or otherwise,  shall be required for
redemption  of the 2021 PC  Bond,  and the  requirements  of  Section  59 of the
Mortgage  for  notice by  newspaper  publication  shall not apply to the 2021 PC
Bond.

     At the option of the holder,  the 2021 PC Bond,  upon surrender  thereof at
the  office or agency of the  Company  in  Chicago,  Illinois,  together  with a
written  instrument of transfer in form approved by the Company duly executed by
the holder or by his duly authorized attorney,  shall be exchangeable for a like
aggregate principal amount of fully registered bonds of the same series of other
authorized denominations.

     The 2021 PC Bond will be  nontransferable  except to the City  Trustee  and
successors  thereto,  if  any,  and to the  Company.  To the  extent  that it is
transferable,  it is transferable by the registered holder thereof, in person or
by  attorney  duly  authorized  in  writing,  on the books of the Company at the
office or agency of the Company in the City of Chicago, Illinois, upon surrender
thereof  for  cancellation  at said  office and upon  presentation  of a written
instrument of transfer duly executed.  Thereupon, the Company shall issue in the
name of the transferee,  and the Trustee shall  authenticate and deliver,  a new
registered  2021 PC Bond,  in an  authorized  denomination,  of equal  principal
amount. Any such transfer shall be subject to the terms and conditions specified
in the Mortgage and in this Forty-Third Supplemental Indenture.

     The Company  shall not be required to transfer or exchange the 2021 PC Bond
for a period of ten (10) days next  preceding any interest  payment date of said
bond.

     Except as set forth  herein,  no charge  shall be made upon any transfer or
exchange  of any of the  2021 PC Bond  other  than for any tax or taxes or other
governmental charge required to be paid by the Company.

     The 2021 PC Bond shall be limited to an aggregate principal amount of Forty
Million  Dollars  ($40,000,000)  and shall be issued  under  the  provisions  of
Article VII of the Original Mortgage.

     SECTION 3. The 2021 PC Bond,  and the Trustee's  Certificate to be endorsed
thereon, shall be in the following forms, respectively:

                         [FORM OF FACE OF 2021 PC BOND]

     This First Mortgage Bond, 5.75% Series,  due 2021  (hereinafter  called the
"2021 PC Bond") is  not  transferable  except to a  successor  trustee under the
Indenture  of Trust  dated as of May 1, 1991,  between  the City of  Petersburg,
Indiana and National  City Bank of Indiana,  as successor to Merchants  National
Bank & Trust Company of Indianapolis, as the Trustee, or to Indianapolis Power &
Light Company.

                       INDIANAPOLIS POWER & LIGHT COMPANY

                   FIRST MORTGAGE BOND, 5.75% Series, Due 2021
                               Due August 1, 2021

No. 1                                                                $40,000,000

     INDIANAPOLIS  POWER & LIGHT COMPANY,  a corporation of the State of Indiana
(hereinafter called the "Company"), for  value  received, hereby promises to pay
National City Bank of Indiana,  as successor to Merchants  National Bank & Trust
Company of Indianapolis,  as the Trustee (hereinafter called the "City Trustee")
under the  Indenture  of Trust  between  the City of  Petersburg,  Indiana  (the
"City") and the City Trustee,  dated as of May 1, 1991 (the "City Indenture") or
registered assigns, on August 1, 2021, at the office of the Company, in the City
of  Indianapolis,  State of Indiana,  or if no such office is  maintained at the
time by the  Company,  then at the  office  or agency  of the  Company  for such
purpose  in the  City of  Chicago,  State of  Illinois,  Forty  Million  Dollars
($40,000,000) in lawful money of the United States of America, and to pay to the
registered  owner hereof interest  thereon from the first day of February or the
first day of August next  preceding  the date of this 2021 PC Bond  (except that
the first interest  payment  hereunder shall be made on February 1, 2002 for the
period from August 1, 2001 through  January 31,  2002),  at the rate of five and
seventy-five  hundreths  percent  (5.75%) per annum in like lawful money at said
office or agency on  February 1 and August 1 in each year,  until the  Company's
obligation  with  respect  to the  payment  of such  principal  shall  have been
discharged.  The  interest  payable  hereunder on February 1 or August 1 will be
paid to the  registered  owner of this  2021 PC Bond at or  before  the close of
business on such dates, or if such date shall be a Saturday,  Sunday, holiday or
a day on which banking  institutions  in the City of Indianapolis or the city of
any paying  agents  are  authorized  by law to close,  on or before the close of
business on the next succeeding business day on which such banking  institutions
are open for business.

     REFERENCE IS MADE TO THE FURTHER  PROVISIONS OF THIS 2021 PC BOND SET FORTH
ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE
SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.

     No recourse shall be had for the payment of the principal of or interest on
this  2021 PC 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,  as such,  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,  as such,  being waived and released by the terms of the
Mortgage, as herein defined.

     This 2021 PC Bond shall not become  obligatory until American National Bank
and Trust Company of Chicago, the Trustee under the Mortgage, as herein defined,
or its successor thereunder,  shall have signed the form of certificate endorsed
hereon.

     IN WITNESS WHEREOF, INDIANAPOLIS POWER & LIGHT COMPANY has caused this 2021
PC Bond to be signed in its name by its President or one of its Vice Presidents,
by his signature or a facsimile  thereof,  and its corporate  seal to be affixed
hereon,  attested by its Secretary or one of its Assistant  Secretaries,  by his
signature or a facsimile thereof.

                                            INDIANAPOLIS POWER & LIGHT
                                                     COMPANY

Dated_______________                        By_______________________________
                                                                       President

Attest:

By_____________________________
                  Secretary

                 [FORM OF TRUSTEE'S CERTIFICATE ON 2021 PC BOND]

                              Trustee's Certificate

     This 2021 PC Bond is one of the  bonds,  of the series  herein  designated,
provided  for in the  within-mentioned  Mortgage  and  Forty-Third  Supplemental
Indenture thereto.

                                            AMERICAN NATIONAL BANK AND
                                            TRUST COMPANY OF CHICAGO
                                                        Trustee

                                            By________________________________
                                                     Authorized Signature

                     [FORM OF REVERSE SIDE OF 2021 PC BOND]
                       INDIANAPOLIS POWER & LIGHT COMPANY
                   FIRST MORTGAGE BOND, 5.75% Series, due 2021
                               Due August 1, 2021

     This 2021 PC Bond is one of an issue of bonds of the  Company,  issuable in
series,  and is one of a series known as its First Mortgage Bonds, 5.75% Series,
due 2021 (herein  called  the "2021 PC Bond")  limited  in  aggregate  principal
amount to Forty Million Dollars  ($40,000,000)  and established by a Forty-Third
Supplemental  Indenture  dated as of August  1,  2001,  all bonds of all  series
issued and to be issued under and equally secured (except insofar as any sinking
or other fund,  established  in accordance  with the  provisions of the Mortgage
hereinafter  mentioned,  may  afford  additional  security  for the bonds of any
particular  series)  by a Mortgage  and Deed of Trust,  dated as of May 1, 1940,
executed by the Company to American  National Bank and Trust Company of Chicago,
as the Trustee (which Mortgage and Deed of Trust as supplemented and modified by
all  supplemental   indentures  thereto  is  hereinafter   referred  to  as  the
"Mortgage"),  to  which  Mortgage  reference  is made for a  description  of the
property  mortgaged  and  pledged,  the nature and extent of the  security,  the
rights of the  bearers  or  registered  owners of the bonds in  respect  of such
security,  the duties and immunities of the Trustee and the terms and conditions
upon which the bonds are secured.

     This  2021 PC Bond  evidences  and  secures  a loan made by the City to the
Company, pursuant to a Loan Agreement, dated as of May 1, 1991, between the City
and the Company (the "Loan Agreement").  In order to obtain funds for such loan,
the City issued Forty  Million  Dollars  ($40,000,000)  principal  amount of its
Pollution  Control Refunding Revenue Bonds,  Series 1991  (Indianapolis  Power &
Light  Company  Project)  (the  "City  Bonds")  under and  pursuant  to the City
Indenture.  The City Bonds are  payable  from  payments  made by the  Company of
principal of, premium, if any, and interest on this 2021 PC Bond and from moneys
in the Bond Fund created under the City Indenture. The obligation of the Company
to pay the  principal  of,  premium,  if any,  and interest on this 2021 PC Bond
shall  be  discharged  to the  extent  that any  moneys  in said  Bond  Fund are
available  for  payments on the City Bonds and are directed by the Company to be
applied thereto, all as provided in the Forty-Third Supplemental Indenture.

     This 2021 PC Bond is not  subject  to  redemption  prior to August 1, 2011,
except as provided in Section 2 of the Forty-Third  Supplemental  Indenture,  to
which reference is made for full description of redemption provisions.

     This 2021 PC Bond is subject to  redemption in whole or in part at any time
on or after August 1, 2011,  at the option of the Company,  upon at least thirty
(30)  days  prior  notice,  all  as  provided  in the  Forty-Third  Supplemental
Indenture, at a price equal to the principal amount of the 2021 PC Bond so to be
redeemed and accrued interest to the date of redemption, together with a premium
equal to a percentage of the principal  amount thereof set forth below under the
heading "Redemption Premium":

         If Redeemed During the Twelve Months
         Ending With the Thirty-first Day                     Redemption
         Of July of the Year Stated                           Premium
         ---------------------------------------------------------------
         2012                                                 2.0%
         2013                                                 1.5%
         2014                                                 1.0%
         2015                                                 0.5%

and without premium if redeemed after July 31, 2015.

     With the  consent  of the  Company  and to the extent  permitted  by and as
provided in the Mortgage,  the rights and  obligations  of the Company and/or of
the holders of the bonds and/or  coupons  and/or the terms and provisions of the
Mortgage and/or any instruments  supplemental thereto may be modified or altered
by affirmative vote of the holders of at least sixty-six and two-thirds  percent
(66-2/3%)  in principal  amount of the bonds  affected by such  modification  or
alteration then outstanding  under the Mortgage  (excluding  bonds  disqualified
from  voting by reason of the  Company's  interest  therein as  provided  in the
Mortgage);  provided that no such  modification  or alteration  shall permit the
extension of the maturity of the principal of this 2021 PC Bond or the reduction
in the rate of interest hereon or any other modification in the terms of payment
of such  principal  or interest  without the consent of the holder  hereof.  The
principal  hereof may be  declared  or may become due and  payable  prior to the
stated date of maturity hereof, on the conditions, in the manner and at the time
set forth in the Mortgage,  upon the occurrence of a completed default as in the
Mortgage provided.

     No reference herein to the Mortgage,  and no provision of this 2021 PC Bond
or of the Mortgage,  shall alter or impair the obligation of the Company,  which
is  absolute  and  unconditional,  to  pay,  subject  to the  provisions  of the
Forty-Third  Supplemental Indenture,  the principal of, and premium, if any, and
interest on this 2021 PC Bond at the place,  at the respective  times and at the
rate and the manner herein prescribed.

     This 2021 PC Bond is issuable only in full  registered form without coupons
in denominations  of Five Thousand Dollars ($5,000) and any larger  denomination
which is a whole multiple of Five Thousand Dollars ($5,000).

     This 2021 PC Bond will be  nontransferable  except to the City  Trustee and
successors  thereto,  if  any,  and to the  Company.  To the  extent  that it is
transferable,  it is transferable by the registered holder thereof, in person or
by  attorney  duly  authorized  in  writing,  on the books of the Company at the
office or agency of the Company in the City of Chicago, Illinois, upon surrender
thereof  for  cancellation  at said  office and upon  presentation  of a written
instrument of transfer duly executed.  Thereupon, the Company shall issue in the
name of the transferee,  and the Trustee shall  authenticate and deliver,  a new
registered  2021 PC Bond,  in an  authorized  denomination,  of equal  principal
amount. Any such transfer shall be subject to the terms and conditions specified
in the Mortgage and in the Forty-Third Supplemental Indenture.

     Upon  redemption of this 2021 PC Bond in part and surrender  thereof at the
office or agency of the Company in Chicago,  Illinois, for exchange, the Trustee
shall  authenticate  and deliver a new registered  2021 PC Bond in an authorized
denomination and principal  amount equal to the reduced  principal amount due on
that series after such partial redemption.

                           [END OF 2021 PC BOND FORM]

     SECTION 4. Until the 2021 PC Bond in definitive form is ready for delivery,
the Company  may  execute,  and upon its  request in writing  the Trustee  shall
authenticate  and deliver,  in lieu thereof,  a fully registered 2021 PC Bond in
temporary  form, as provided in Section 15 of the Original  Mortgage.  Such bond
may, in lieu of the statement of the specific  redemption  prices required to be
set  forth  in  such  bond in  definitive  form,  include  a  reference  to this
Forty-Third Supplemental Indenture for a statement of such redemption prices.

     SECTION  5.  The  Company  covenants  and  agrees  that  it will  duly  and
punctually pay to the holder of the 2021 PC Bond the principal thereof, premium,
if any,  and  interest  on said bond at the  dates  and place and in the  manner
mentioned therein; provided, however, that:

          (a) the  obligation  of the  Company  to pay  the  principal  of,  and
     premium,  if any, and interest on the 2021 PC Bond shall be  discharged  to
     the extent that any moneys in the Bond Fund  created  under and pursuant to
     the City  Indenture  are  available for the payment of the principal of, or
     premium,  if any, or interest on the Series 1991 Bonds and are  directed by
     the Company to be applied to the payment  thereof in the manner provided in
     the City  Indenture  on or prior to the  dates  on  which  the  Company  is
     required to pay the  principal  of, or premium,  if any, or interest on the
     2021 PC Bond.

          (b) Except as  otherwise  provided  in this  Section 5, the  principal
     amount of any Series 1991 Bond acquired by the Company and delivered to the
     City  Trustee,  or acquired by the City  Trustee  and  cancelled,  shall be
     credited  against the obligation of the Company to pay the principal of the
     2021 PC Bond.

As the principal of,  premium,  if any, and interest on the 2021 PC Bond is paid
or deemed paid in full, and upon its receipt by the Company,  such bond shall be
delivered to the Trustee for cancellation. The Company shall promptly inform the
Trustee  of all  payments  made  and  credits  availed  of with  respect  to its
obligations  on the 2021 PC Bond. The Trustee shall not be required to recognize
any payment made or credit availed of with respect to any 2021 PC Bond unless it
has received (a) the bond for cancellation by it, or (b) a certificate signed by
a duly  authorized  officer of the City  Trustee  specifying  the amount of such
payment or credit and the  principal  amount of the 2021 PC Bond with respect to
which the  payment  or credit  was  applied.  In the  absence  of receipt by the
Trustee  of any 2021 PC Bond,  any such  certificate  shall be  controlling  and
conclusive.

     SECTION 6. The  covenant  of the  Company to make  annual  payments  to the
Trustee for a Maintenance and Improvement Fund as contained in Section 41 of the
Original  Mortgage and in the first twenty-four  Supplemental  Indentures to the
Original  Mortgage creating the several series of First Mortgage Bonds presently
outstanding under such Supplemental Indentures shall not apply to nor be for the
benefit of the 2021 PC Bond,  and the Company  reserves  the right,  without any
consent of, or other action by, the holder of the 2021 PC Bond, to amend, modify
or delete the  provisions  of the  Mortgage  relating  to such  Maintenance  and
Improvement Fund and by acceptance of the 2021 PC Bond the holder thereof waives
any right or  privilege  so to consent  or take any other  action  with  respect
thereto.

     SECTION 7. The Company  covenants  that,  so long as the 2021 PC Bond shall
remain  outstanding,  it will comply with all of the provisions of Section 47 of
the Original  Mortgage,  including the provisions with respect to limitations on
dividends and distributions and the purchase and redemption of stock.

     SECTION 8. The Trustee hereby accepts the trusts herein declared,  provided
and created and agrees to perform the same upon the terms and conditions  herein
and in the Mortgage set forth and upon the following terms and conditions:

     The  recitals  contained  herein  and in the  bonds  shall  be taken as the
statements  of the  Company and the Trustee  assumes no  responsibility  for the
correctness of the same. The Trustee makes no representations as to the validity
or adequacy  of the  security  afforded  hereby,  or as to the  validity of this
Forty-Third Supplemental Indenture or of the 2021 PC Bond issued hereunder.

     SECTION 9. Whenever in this  Forty-Third  Supplemental  Indenture either of
the  parties  hereto  is  named or  referred  to,  this  shall,  subject  to the
provisions  of Article XVII of the Original  Mortgage,  be deemed to include the
successors or assigns of such party,  and all the  covenants  and  agreements in
this  Forty-Third  Supplemental  Indenture  contained  by or on  behalf  of  the
Company, or by or on behalf of the Trustee,  shall,  subject as aforesaid,  bind
and inure to the  benefit  of the  respective  successors  and  assigns  of such
parties, whether so expressed or not.

     SECTION 10. Nothing in this Forty-Third Supplemental Indenture expressed or
implied,  is intended or shall be construed  to confer upon,  or to give to, any
person,  co-partnership  or  corporation,  other than the parties hereto and the
holders of the bonds and  coupons  outstanding  under the  Mortgage,  any right,
remedy, or claim under or by reason of this Forty-Third  Supplemental  Indenture
or any  covenant,  condition  or  stipulation  hereof;  and all  the  covenants,
conditions,   stipulations,   promises  and   agreements  in  this   Forty-Third
Supplemental Indenture contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto and of the holders of the bonds
and of the coupons outstanding under the Mortgage.

     SECTION 11. The Company  covenants  that all of the terms,  provisions  and
conditions  of the  Mortgage  shall be  applicable  to the  2021 PC Bond  issued
hereunder,  except as herein  otherwise  provided and except insofar as the same
may be  inconsistent  with  the  provisions  of  this  Forty-Third  Supplemental
Indenture.

     SECTION 12. This Forty-Third  Supplemental  Indenture is dated as of August
1, 2001,  although  executed and  delivered  on the date of the  acknowledgement
hereof by the Trustee;  and shall be  simultaneously  executed and  delivered in
several counterparts,  and all such counterparts executed and delivered, each as
an original, shall constitute but one and the same instrument.

     IN WITNESS WHEREOF,  INDIANAPOLIS POWER & LIGHT COMPANY, party of the first
part, has caused its corporate name to be hereunto  affixed and this  instrument
to be signed and  acknowledged  by its  President or a  Vice-President,  and its
corporate  seal  to be  hereto  affixed  and  attested  by its  Secretary  or an
Assistant Secretary, for and in its behalf, and AMERICAN NATIONAL BANK AND TRUST
COMPANY  OF  CHICAGO,  party of the  second  part,  as  Trustee,  has caused its
corporate  name to be  hereunto  affixed  and this  instrument  to be signed and
acknowledged  by one of its  Authorized  Officers,  and its corporate seal to be
hereto  affixed and attested by one of its  Authorized  Officers,  all as of the
day, month and year first above written.

                                            INDIANAPOLIS POWER & LIGHT
                                            COMPANY,

                                            By /s/WILLIAM H. HENLEY
                                              ---------------------------------
(SEAL)                                         WILLIAM H. HENLEY,
                                               President
Attest:

By: /s/WILLIAM R. DODDS
   -----------------------------
    WILLIAM R. DODDS,
    Secretary
                                            AMERICAN NATIONAL BANK AND
                                            TRUST COMPANY OF CHICAGO

                                            By /s/ROBERT M. SELANGOWSKI
                                              ---------------------------------
                                               ROBERT M. SELANGOWSKI,
                                               Authorized Officer

Attest:
                                                                        (SEAL)

By: /s/F. HENRY KLESCHEN
   -------------------------------
    F. HENRY KLESCHEN,
    Authorized Officer
<PAGE>

STATE OF INDIANA  )
                  )  SS:
COUNTY OF MARION  )

     On this 26th day of July,  in the year 2001,  before me, a Notary Public in
and for the County  and State  aforesaid,  personally  came  WILLIAM H.  HENLEY,
President  and  WILLIAM  R.  DODDS,  Secretary,  of  Indianapolis  Power & Light
Company,  one of the corporations  described in and which executed the foregoing
instrument,  to me  personally  known  and  known  to me  personally  to be such
President  and  Secretary,  respectively.  Said WILLIAM H. HENLEY and WILLIAM R.
DODDS being by me severally  duly sworn did depose and say that the said WILLIAM
H.  HENLEY  resides  in Marion  County,  Indiana  and the said  WILLIAM R. DODDS
resides in Fulton County, Illinois; that said WILLIAM H. HENLEY is President and
said WILLIAM R. DODDS is Secretary of said  Indianapolis  Power & Light Company;
that each of them knows the corporate  seal of said  corporation;  that the seal
affixed to said  instrument  and  bearing the name of said  corporation  is such
corporate  seal;  that it was so affixed by order of the Board of  Directors  of
said  corporation;  and that each of them signed his name thereto by like order;
and each of them acknowledged the execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and the free and voluntary
act and deed of said corporation, for the uses and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 26th day of July, 2001.

                                                     /s/DINAH L. KIRKHAM
                                                     ---------------------------
                                                     DINAH L. KIRKHAM,
                                                              Notary Public

My Commission Expires:
         June 23, 2008

My County of Residence is:
         Johnson
                                                              (NOTARIAL SEAL)
<PAGE>

STATE OF ILLINOIS )
                  )  SS:
COUNTY OF COOK    )

     On this 26th day of July,  in the year 2001,  before me, a Notary Public in
and for the County and State  aforesaid,  personally came ROBERT M.  SELANGOWSKI
and F. HENRY KLESCHEN,  Authorized  Officers of American National Bank and Trust
Company of Chicago, one of the corporations  described in and which executed the
foregoing  instrument,  to me personally  known and known to me personally to be
such  Authorized  Officers.  Said ROBERT M.  SELANGOWSKI  and F. HENRY KLESCHEN,
being  by me  severally  sworn  did  depose  and say that  the  said  ROBERT  M.
SELANGOWSKI  resides in Lansing,  Illinois,  and that the said F. HENRY KLESCHEN
resides in Evanston, Illinois; that said ROBERT M. SELANGOWSKI and said F. HENRY
KLESCHEN,  are  Authorized  Officers of said  American  National  Bank and Trust
Company  of  Chicago;  that  each  of  them  knows  the  corporate  seal of said
corporation;  that the seal affixed to said  instrument  and bearing the name of
said  corporation is such corporate seal; that it was so affixed by authority of
the Board of  Directors of said  corporation;  that each of them signed his name
thereto by like authority;  and each of them  acknowledged the execution of said
instrument  on behalf of said  corporation  to be his free and voluntary act and
deed and the free and voluntary act and deed of said  corporation,  for the uses
and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 26th day of July, 2001.

                                                     /s/KATHLEEN A. WHITE
                                                     -------------------------
                                                     KATHLEEN A. WHITE,
                                                      Notary Public

My Commission Expires:
         February 9, 2002
My County of Residence is:
         Cook

(NOTARIAL SEAL)

                         This instrument was prepared by
                                 BRIANE M. HOUSE

<PAGE>

                                 RECORDING DATA

          Forty-Third Supplemental Indenture Dated as of August 1, 2001

                                                     Instrument      Recording
County            Record            Page             No.               Date
--------------------------------------------------------------------------------

Bartholomew       ---               ---              200100009896      7/27/2001
Boone             ---               ---              0109135           7/27/2001
Daviess           ---               ---              01-3596           7/27/2001
Gibson            ---               ---              200100005588      7/27/2001
Greene            Inden. Bk. 27     17-43            200100004074      7/27/2001
Hamilton          ---               ---              200100046495      7/27/2001
Hancock           ---               ---              0110422           7/27/2001
Hendricks         Mtg. Rec. 261     708-734          200100021807      7/27/2001
Johnson           ---               ---              2001-022709       7/27/2001
Knox              Mtg. Rec. 554     516-542          5735              7/27/2001
Madison           ---               ---              200117484         7/27/2001
Marion            ---               ---              2001-0130008      7/27/2001
Monroe            ---               ---              2001015471        7/27/2001
Morgan            ---               ---              20111809          7/27/2001
Owen              Mtg. Rec. IC      464-522          138714            7/27/2001
Pike              Mtg. Rec. 306     242-268          01-1783           7/27/2001
Putnam            ---               ---              2001005421        7/27/2001
Shelby            ---               ---              0106330           7/27/2001
Sullivan          Mtg. Rec. 258     977              012791            7/27/2001
Switzerland       Mtg. Rec. 133     25               8806              7/27/2001

<PAGE>

                                                                  Exhibit 4.4.14

                                                                [CONFORMED COPY]
================================================================================

                          INDIANAPOLIS POWER & LIGHT COMPANY
                                          TO
                           AMERICAN NATIONAL BANK AND TRUST
                                  COMPANY OF CHICAGO
                                                   Trustee

                                      ----------

                          Forty-Fourth Supplemental Indenture

                                      ----------

                              Dated as of August 1, 2001

                          ESTABLISHING FIRST MORTGAGE BONDS,
                                5.90% Series, Due 2024

================================================================================

<PAGE>
                                       ii

                                  TABLE OF CONTENTS*

                                          of
                          FORTY-FOURTH SUPPLEMENTAL INDENTURE
                                          of
                          INDIANAPOLIS POWER & LIGHT COMPANY

                                                                            Page

PARTIES........................................................................1
RECITALS ......................................................................1
SECTION 1       Granting clauses...............................................3
                    Part I   Electric Distributing Systems.....................4
                    Part II Reserved...........................................4
                    Part III Indeterminate Permits and Franchises..............4
                    Part IV  Other Property....................................5
                    General and after-acquired title...........................6
SECTION 2       Designation of Forty-Fourth series of bonds and kind and
                    denominations thereof .....................................6
                Designation of Company or American National Bank and Trust
                    Company of Chicago as paying agent.........................6
                Purpose of bonds...............................................7
                Redemption of bonds............................................7
                Exchange of bonds.............................................12
                Transfer of bonds.............................................12
                Series limited to $20,000,000.................................13
SECTION 3       Form of fully registered bond.................................13
                Form of Trustees certificate on bonds........................15
SECTION 4       Temporary bonds...............................................19
SECTION 5       Payment of principal and interest; credits....................19
SECTION 6       Annual Payments for Maintenance and Improvement Fund..........20
SECTION 7       Compliance with Section 47 of Original Mortgage with
                   respect to dividend restrictions...........................20
SECTION 8       Acceptance of trusts by Trustee and conditions of
                   Acceptance.................................................20
-------------------
*    Table of Contents is not part of the  Forty-Fourth  Supplemental  Indenture
     and should not be considered  such. It is included herein only for purposes
     of convenient reference.

<PAGE>

                                                                            Page

SECTION 9         Successors and assigns......................................20
SECTION 10        Limitation of rights hereunder..............................21
SECTION 11        Compliance with terms, provisions and
                        conditions of Mortgage................................21
SECTION 12        Execution in counterparts...................................21

TESTIMONIUM...................................................................22
SIGNATURES AND SEALS..........................................................22
ACKNOWLEDGEMENTS..............................................................22

<PAGE>

     THIS  FORTY-FOURTH  SUPPLEMENTAL  INDENTURE,  dated as of August  1,  2001,
between  INDIANAPOLIS  POWER & LIGHT  COMPANY,  a  corporation  of the  State of
Indiana,  hereinafter  sometimes  called the "Company," party of the first part,
and AMERICAN  NATIONAL  BANK AND TRUST  COMPANY OF CHICAGO,  a national  banking
association,  as Trustee,  hereinafter  sometimes called the "Trustee," party of
the second part;

     Whereas, the Company by a Mortgage and Deed of Trust (hereinafter sometimes
called  the  "Original  Mortgage"  when  referred  to as  existing  prior to any
supplement thereto or modification  thereof, and the "Mortgage" when referred to
as now or heretofore supplemented and modified) dated as of May 1, 1940, made to
said American National Bank and Trust Company of Chicago,  as Trustee, to secure
the  payment of the bonds  issued from time to time under the  Mortgage  for the
purposes of and subject to the  limitations  specified in the  Mortgage,  and to
secure the  performance  of the  covenants  therein  contained,  conveyed to the
Trustee  thereunder  upon certain  trusts,  terms and  conditions,  and with and
subject to certain provisos and covenants  therein  contained,  all and singular
the  property,  rights and  franchises  which the  Company  then owned or should
thereafter  acquire,  excepting the property  expressly excepted by the terms of
the Original Mortgage or any indenture  supplemental  thereto, to which Mortgage
reference is hereby made for greater certainty; and

     WHEREAS,  the  Original  Mortgage  has been  supplemented  and  modified by
supplemental  indentures  dated as of May 1, 1942, as of February 1, 1948, as of
April 1, 1949, as of October 1, 1949 (two),  as of February 1, 1951, as of March
1, 1953,  as of June 1, 1956,  as of March 1, 1958, as of October 1, 1960, as of
August 1, 1964, as of April 1, 1966, as of May 1, 1967, as of May 1, 1968, as of
October 1, 1970,  as of March 1, 1972,  as of March 15, 1973, as of February 15,
1974, as of August 15, 1974, as of September 15, 1975, as of June 1, 1976, as of
July 1, 1976,  as of August 1, 1977,  as of September  1, 1978,  as of August 1,
1981 (two),  as of November 1, 1983,  as of November 1, 1984,  as of December 1,
1984,  as of September 1, 1985, as of October 1, 1986, as of June 1, 1989, as of
August 1, 1989,  as of October 15,  1991,  as of August 1, 1992,  as of April 1,
1993, as of October 1, 1993 (two),  as of February 1, 1994 (two),  as of January
15, 1995, as of October 1, 1995 and as of August 1, 2001; and

     WHEREAS,  Section 8 of the Original Mortgage provides,  among other things,
that the form of each series of bonds  (other  than the initial  issue of bonds)
issued  thereunder  shall be  established by an indenture  supplemental  thereto
authorized by resolution of the Board of Directors of the Company,  and that the
form of each series, as established by the Board of Directors, shall specify the
descriptive  title of the bonds and various  other terms  thereof,  and may also
contain such other  provisions as the Board of Directors may, in its discretion,
cause to be inserted therein expressing or referring to the terms and conditions
upon which such bonds are to be issued and secured  under the Original  Mortgage
or any indenture supplemental thereto or in modification thereof; and

     WHEREAS, the Company entered into a Loan Agreement, dated as of December 1,
1994  (hereinafter  called the "Loan  Agreement")  with the City of  Petersburg,
Indiana (the "City"),  in order to obtain funds for the financing of solid waste
disposal facilities acquired, constructed, installed and equipped by the Company
(the  "Facilities")  at the  Petersburg  Generating  Station  Units 1 and 2 (the
"Plant")  and the  issuance of  $20,000,000  aggregate  principal  amount of the
City's Solid Waste Disposal Revenue Bonds,  Series 1994A  (Indianapolis  Power &
Light Company Project) (the "Bonds"); and

     WHEREAS, the Company has elected to convert the applicable interest rate on
the Bonds to the Long Term Rate  effective as of August 1, 2001, and pursuant to
the Loan Agreement,  the Company has agreed to issue a series of its bonds under
the Mortgage and this Forty-Fourth  Supplemental  Indenture in order to evidence
and secure its indebtedness under the Loan Agreement; and

     WHEREAS,  the  Company  now  desires  to  provide  for  the  establishment,
execution,  authentication  and delivery under the Mortgage of bonds of a series
to be known as its "First Mortgage Bonds,  5.90% Series, due 2024" (the bonds of
said  series  being  hereinafter  sometimes  referred to as the "2024 PC Bond"),
limited  to  the  aggregate   principal   amount  of  Twenty   Million   Dollars
($20,000,000); and

     WHEREAS,  all  things  necessary  to make  the  2024  PC  Bond  hereinafter
described,  when duly executed by the Company and authenticated and delivered by
the Trustee, a valid,  binding and legal obligation of the Company,  and to make
this  Forty-Fourth   Supplemental   Indenture  a  valid  and  binding  agreement
supplemental to the Original Mortgage, have been done and performed; and

     WHEREAS,  the  execution  and delivery by the Company of this  Forty-Fourth
Supplemental  Indenture,  and the  terms  of the 2024 PC Bond,  have  been  duly
authorized by the Board of Directors of the Company by  appropriate  resolutions
of said Board; and

     WHEREAS,  it is provided in and by the Original  Mortgage  that the Company
will execute and deliver such  further  instruments  and do such further acts as
may be  necessary  or proper to carry out more  effectively  the purposes of the
Mortgage,  and to make  subject  to the lien  thereof  any  property  thereafter
acquired and intended to be subject to the lien thereof; and

     WHEREAS,  the Company has,  since the date of execution and delivery of the
Original  Mortgage,   purchased  and  acquired  property  and  desires  by  this
Forty-Fourth  Supplemental  Indenture specifically to convey to the Trustee such
property  for the better  protection  and security of the bonds issued and to be
issued under the Original Mortgage, or any indenture supplemental thereof;

     NOW,  THEREFORE,  THIS INDENTURE  WITNESSETH  that, in consideration of the
premises and of the acceptance or purchase of the 2024 PC Bond by the registered
owners thereof, and of the sum of one dollar,  lawful money of the United States
of America,  to the Company duly paid by the Trustee at or before the  execution
and delivery of this Forty-Fourth Supplemental Indenture, the receipt whereof is
hereby  acknowledged,  the Company and the Trustee,  respectively,  have entered
into, executed and delivered this Forty-Fourth  Supplemental Indenture,  for the
uses and purposes hereinafter expressed, that is to say:

     SECTION 1. The Company has granted,  bargained,  sold, released,  conveyed,
assigned, transferred,  mortgaged, pledged, set over and confirmed, and by these
presents does grant, bargain, sell, release, convey, assign, transfer, mortgage,
pledge,  set over and confirm (subject,  however,  to permitted  encumbrances as
defined in the Original  Mortgage),  unto said American  National Bank and Trust
Company of Chicago,  as Trustee,  as herein provided,  and its successors in the
trusts declared in the Original Mortgage and herein, all of the property,  real,
personal  and mixed,  tangible  and  intangible,  of every kind,  character  and
description  which the Company has acquired  since the execution and delivery of
the  Original  Mortgage and now owns  (except  property,  rights and assets of a
character  similar to that  excluded from the lien and operation of the Mortgage
by the Granting  Clauses of the Original  Mortgage,  which property,  rights and
assets are excluded  from the lien and  operation  of the  Mortgage  only to the
extent  provided  therein),   including,  but  without  otherwise  limiting  the
generality of the foregoing,  the following  described  property situated within
the State of Indiana:

                                     PART I.
                         ELECTRIC DISTRIBUTING SYSTEMS.

     All electric  distributing  systems of the Company acquired by it after May
1, 1940,  the date of the  Original  Mortgage,  and  located in the  Counties of
Bartholomew,  Boone, Daviess,  Gibson,  Greene,  Hamilton,  Hancock,  Hendricks,
Johnson,  Knox, Madison,  Marion,  Monroe,  Morgan, Owen, Pike, Putnam,  Shelby,
Sullivan and Switzerland,  State of Indiana;  and any additions to or extensions
of any  such  systems,  together  with  the  buildings,  erections,  structures,
transmission lines, power stations, sub-stations,  engines, boilers, condensers,
pumps, turbines,  machinery,  tools, conduits,  manholes,  insulators,  dynamos,
motors,  lamps, cables,  wires, poles,  towers,  cross-arms,  piers,  abutments,
switchboard   equipment,    meters,    appliances,    instruments,    apparatus,
appurtenances,  maps, records, ledgers, contracts, facilities and other property
or  equipment  used or provided  for use in  connection  with the  construction,
maintenance, repair and operation thereof; together also with all of the rights,
privileges, rights-of-way,  franchises, licenses, grants, liberties, immunities,
ordinances, permits and easements of the Company in respect of the construction,
maintenance, repair and operation of said systems.

                                    PART II.
                                   [Reserved]

                                    PART III.
                      INDETERMINATE PERMITS AND FRANCHISES.

     All indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations by or from any state, county, municipality, or other governmental
authority,  acquired by the Company after May 1, 1940,  the date of the Original
Mortgage, including particularly,  but not limited to, any indeterminate permits
under the Public Service  Commission  Act of the State of Indiana,  and all Acts
amendatory thereof and supplemental  thereto,  and all right, title and interest
therein now owned by the Company, and all renewals, extensions and modifications
of said  indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations,  and  of  the  indeterminate  permits,  franchises,  ordinances,
licenses,  and  other  authorizations  referred  to in Part VII of the  Granting
Clauses of the Original Mortgage.

<PAGE>

                                    PART IV.
                                 OTHER PROPERTY.

     All other  property,  whether  real,  personal or mixed  (except any in the
Mortgage expressly excepted), now owned by the Company and wheresoever situated,
including  (without in anywise  limiting or impairing by the  enumeration of the
same the  scope  and  intent  of the  foregoing  or of any  general  description
contained in the  Mortgage) all lands,  flowage  rights,  water rights,  flumes,
raceways,  dams,  rights-of-way  and roads;  all plants  for the  generation  of
electricity by water, steam and/or other power, power houses, telephone systems,
water systems, power plants, hot water plants, sub-stations, transmission lines,
distribution systems, bridges,  culverts and tracts; all offices,  buildings and
structures and the equipment thereof; all machinery,  engines, boilers, dynamos,
machines,   regulators,   meters,  transformers,   generators  and  motors;  all
appliances whether electrical,  gas or mechanical,  conduits,  cables and lines;
all pipes whether for water, and power, or other purposes;  all mains and pipes,
service  pipes,   fittings,   valves  and  connections,   poles,  wires,  tools,
implements,   apparatus,  furniture  and  chattels;  all  municipal  franchises,
indeterminate  permits,  and other  permits;  all lines for the  transportation,
transmission and/or distribution of electric current, and power or water for any
purpose,  including  towers,  poles,  wires,  cables,  pipes,  conduits  and all
apparatus  for use in  connection  therewith;  all real estate,  lands,  leases,
leaseholds; all contracts,  whether heat, light, power, water or street lighting
contracts;  all  easements,   servitudes,  licenses,  permits,  rights,  powers,
franchises,  privileges,  rights-of-way  and other rights in or relating to real
estate  or the  occupancy  of the  same and  (except  as  hereinafter  or in the
Mortgage expressly excepted) all the right, title and interest of the Company in
and to all other  property  of any kind or nature  appertaining  to and/or  used
and/or  occupied  and/or  enjoyed in connection  with any property  hereinbefore
described or referred to;

     TOGETHER   WITH  all  and  singular  the   tenements,   hereditaments   and
appurtenances  belonging or in anywise appertaining to the aforesaid property or
any part thereof,  with the reversion and  reversions,  remainder and remainders
and  (subject to the  provisions  of Section 64 of the Original  Mortgage),  the
tolls, rents, revenues,  issues, earnings,  income, product and profits thereof,
and all the estate,  right,  title and 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, indeterminate permits, franchises,  ordinances, licenses
and other authorizations and every part and parcel thereof.

     SECTION  2.  There  shall be and is hereby  established  a series of bonds,
limited in aggregate principal amount to Twenty Million Dollars ($20,000,000) to
be issued under and secured by the Mortgage, to be designated "5.90% Series, due
2024",  each of which  shall also bear the  descriptive  title  "First  Mortgage
Bonds"; said bonds shall mature on DECEMBER 1, 2024, and shall be issued only as
fully  registered  bonds without  coupons in the  denomination  of five thousand
dollars and any larger  denomination  which is a whole multiple of five thousand
dollars;  they shall bear interest  from the  beginning of the current  interest
period during which each bond is dated, at the rate per annum  designated in the
title  thereof,  payable  semi-annually,  on June 1 and  December 1 of each year
(except that the first interest  payment  thereon shall be made December 1, 2001
for the period from August 1, 2001 through November 30, 2001); and the principal
of, premium,  if any, and interest on said bond shall be payable in lawful money
of the United  States of  America  at the  office of the  Company in the City of
Indianapolis, Indiana, or, if no such office is maintained, at American National
Bank and Trust Company of Chicago,  which is hereby designated and appointed the
office  and  agency of the  Company in the City of  Chicago,  Illinois,  for the
payment of the principal of, premium,  if any, and interest on the 2024 PC Bond,
if necessary,  and for the  registration,  transfer and exchange of such bond as
hereinafter  provided;  all  reference  herein  to the  office  or agency of the
Company in the City of Chicago,  Illinois,  for the payment of the principal of,
premium, if any, and interest on the 2024 PC Bond, or the registration, transfer
or  exchange  thereof,  being to  American  National  Bank and Trust  Company of
Chicago.  In event of the  resignation or inability to act of American  National
Bank and Trust Company of Chicago,  then a successor agent for all such purposes
in the City of Chicago,  Illinois,  shall be appointed by the Board of Directors
of the Company.

     The 2024 PC Bond shall be dated as of the date of  authentication  thereof,
except as otherwise provided in Section 10 of the Original Mortgage.

     The  2024 PC Bond  will be  issued  to  evidence  and  secure a loan to the
Company by the City pursuant to the Loan  Agreement of certain funds  previously
acquired by the City through the issuance of City of Petersburg,  Indiana, Solid
Waste Disposal Revenue Bonds,  Series 1994A  (Indianapolis Power & Light Company
Project)  (the "Series 1994A  Bonds"),  authenticated  and  delivered  under and
pursuant to an  Indenture  of Trust  dated as of  December 1, 1994  (hereinafter
called the "City Indenture"),  by and between the City and Chase Manhattan Trust
Company,  National Association,  as successor to Society National Bank, Indiana,
as Trustee (the "City Trustee"). Pursuant to the City's pledge and assignment of
the Loan Agreement,  as set forth in the City Indenture,  the 2024 PC Bond shall
be issued to the City and assigned to the City  Trustee.  All of the proceeds of
the Series  1994A Bonds were used for the  financing  of the  Facilities  at the
Plant.

     Upon the notice and in the  manner  and with the  effect  provided  in this
Section 2, the 2024 PC Bond shall be  redeemable  prior to the maturity  thereof
under any one or more of the following circumstances:

(a)  In whole,  at the option of the  Company,  if the  Facilities  or the Plant
     shall have been  damaged or  destroyed to such extent that (i) it cannot be
     reasonably expected, in the opinion of the Company, to be restored within a
     period of six (6) months to the  condition  thereof  immediately  preceding
     such damage or destruction, or (ii) to such extent that the Company, in its
     reasonable  opinion,  is  thereby  prevented  from  carrying  on its normal
     operations  for a period of six (6) months or more, or (iii) to such extent
     that the restoration  thereof would not be, taking into  consideration  the
     net  proceeds  of any  insurance  payable  as a result  of such  damage  or
     destruction, economic in the reasonable opinion of the Company.

(b)  In whole,  at the option of the Company,  if title to, or the temporary use
     of, all or  substantially  all of the  Facilities or the Plant,  shall have
     been taken under the exercise of the power of eminent domain, or should any
     governmental  body or  agency  exercise  any  right  which  it may  have to
     purchase or designate a purchaser of the same,  or should such  property be
     sold to any  governmental  body or agency so that the result of such taking
     or takings is that (i) the Company,  in its reasonable  opinion, is thereby
     prevented  from carrying on its normal  operations of either the Facilities
     or the Plant for a period of six (6) months or more,  (ii) the  restoration
     required as a result of the taking  cannot be reasonably  expected,  in the
     opinion of the Company,  to be completed in a period of six (6) months,  or
     (iii) the restoration  thereof,  taking into consideration the net proceeds
     from such eminent  domain  award,  would not be economic in the  reasonable
     opinion of the Company.

(c)  In whole,  at the option of the Company,  if, as a result of any changes in
     the  Constitution or law of the State of Indiana or the Constitution or law
     of the United States of America or of legislative or administrative  action
     (whether  state or  federal) or by final  decree,  judgment or order of any
     court or administrative  body (whether state or federal) the Loan Agreement
     or the Note shall,  in the  reasonable  opinion of counsel for the Company,
     have  become  void  or   unenforceable  or  impossible  of  performance  in
     accordance  with the intent and purpose of the parties as  expressed in the
     Loan Agreement;  or unreasonable burdens or excessive liabilities shall, in
     the reasonable  opinion of the Company,  have been imposed upon the City or
     the Company, with respect to the Facilities or operation thereof, including
     without limitation federal, state or other ad valorem,  property, income or
     other taxes not being imposed on the date of the Loan Agreement  other than
     ad valorem taxes  presently  levied upon privately  owned property used for
     the same general purpose as the Facilities.

(d)  In  whole,  at the  option  of the  Company,  if  changes  in the  economic
     availability of raw materials,  operating supplies or facilities  necessary
     for the  operation of the  Facilities  or the Plant shall have  occurred or
     technological  or other  changes  shall  have  occurred  which  render  the
     Facilities uneconomic for use in the reasonable opinion of the Company.

(e)  In part,  at the  option of the  Company,  to the  extent of net  proceeds,
     received from any condemnation  award,  taking or sale as stated herein, if
     title to, or the temporary use of any portion of the Facilities  shall have
     been taken under the exercise of the power of eminent domain, or should any
     governmental  body or  agency  exercise  any  right  which  it may  have to
     purchase or designate a purchaser of the same,  or should such  property be
     sold to any governmental body or agency; provided the Company shall furnish
     to the City and the City Trustee a certificate of an  Independent  Engineer
     (as defined in the Loan Agreement) selected by the Company stating (i) that
     the  property  forming  the part of the  Facilities  that was taken by such
     condemnation,  taking  or  sale  is  not  essential  to  the  character  or
     significance  of the  Facilities,  or (ii)  that the  Facilities  have been
     restored to a condition  substantially  equivalent to their condition prior
     to the taking by such  condemnation,  taking or sale proceedings,  or (iii)
     that  improvements  have been acquired which are suitable for the operation
     of the Facilities as a qualified exempt facility.

(f)  In whole or in part,  at the option of the  Company at any time on or after
     August 1, 2011,  at a price  equal to the  principal  amount of the 2024 PC
     Bond so to be  redeemed  and accrued  interest  to the date of  redemption,
     together  with a premium  equal to a  percentage  of the  principal  amount
     thereof set forth under the heading "Redemption Premium" in the form of the
     2024 PC Bond hereinafter  recited, so long as the Company is not in default
     under the Loan Agreement or the 2024 PC Bond.

(g)  In the event all or substantially all of the mortgaged and pledged property
     under the Mortgage,  or all or substantially  all such property used in the
     business  of   generating,   manufacturing,   transporting,   transmitting,
     distributing or supplying  electricity,  should be taken by exercise of the
     power of eminent domain, or should any governmental body or agency exercise
     any right  which it may have to purchase  or  designate a purchaser  of the
     same, or should such property be sold to any  governmental  body or agency,
     the Company  shall be obligated to redeem the 2024 PC Bond  outstanding  as
     promptly as possible in  accordance  with  paragraph B of Section 69 of the
     Original Mortgage.

(h)  In the event that the Company is notified by the City  Trustee  that (i) an
     event of default under the City  Indenture has occurred and is  continuing,
     and (ii) the City  Trustee has  declared  the  principal  of all the Series
     1994A Bonds then  outstanding  immediately due and payable  pursuant to the
     City Indenture, the Company shall call for redemption, on a redemption date
     selected by it not later than thirty (30) days  following the date on which
     such  notice is  mailed,  the 2024 PC Bond  outstanding,  and shall on such
     redemption date redeem the same; provided,  however,  that such requirement
     of redemption  shall be deemed waived,  if prior to the date fixed for such
     redemption of the 2024 PC Bond (x) such event of default is waived or cured
     as set forth in the City  Indenture,  or (y) there shall have  occurred any
     completed  default (as defined in the  Mortgage)  which affects any bond of
     any series  outstanding  under the Mortgage and which completed default has
     not been cured and made good prior to such  redemption  date,  it being the
     intent of this  proviso  that,  in lieu of such  right to  redemption,  the
     holder of the 2024 PC Bond  shall be  entitled  only to such  rights as are
     available to the holders of bonds of any other series outstanding under the
     Mortgage  in the  event  of  such  completed  default;  and in  case of any
     subsequent  occurrence or  continuance  of the events  described in (i) and
     (ii) of this  Section  2(h),  the  Company  shall have the same  obligation
     (subject to the same proviso) to redeem the 2024 PC Bond.

(i)  In the event the City  Trustee  notifies  the Company and the City that the
     interest  payable on the Series  1994A  Bonds held by persons  other than a
     "substantial user" or a "related person" as those terms are used in Section
     147(a)(2)  of the  Internal  Revenue  Code of 1986,  as  amended,  has been
     determined by a court of competent  jurisdiction  or a formal ruling of the
     Internal Revenue Service to be subject to federal income taxation by reason
     of a breach by the Company of any covenant,  agreement or representation in
     the  Loan  Agreement,  the  Company  shall  call  the  2024  PC  Bond  then
     outstanding  to be redeemed  within one hundred eighty (180) days after the
     date  of  such  notice;   provided,   however,  that  such  requirement  of
     redemption, whether in whole or in part shall be deemed waived if, prior to
     the date fixed for  redemption of the 2024 PC Bond pursuant to this Section
     2(i),  there shall have occurred any  completed  default (as defined in the
     Mortgage)  which  affects  any bond of any  series  outstanding  under  the
     Mortgage and which completed default has not been cured and made good prior
     to such redemption  date, it being the intent of this proviso that, in lieu
     of such  right to  redemption,  the  holder  of the  2024 PC Bond  shall be
     entitled  only to such rights as are  available  to the holders of bonds of
     any  other  series  outstanding  under  the  Mortgage  in the event of such
     completed  default;  but when any such  completed  default  shall have been
     cured and made good,  if interest on the Series  1994A Bonds shall still be
     taxable as  described  above,  the Company  shall have the same  obligation
     (subject to the same proviso) to redeem the 2024 PC Bond within one hundred
     eighty  (180)  days after the  curing  and  making  good of such  completed
     default;  provided  further,  that the Company may call for redemption such
     portion of the 2024 PC Bond, which in the written opinion of an attorney or
     firm of  attorneys  of  nationally  recognized  standing  on the subject of
     municipal  bonds,  would allow the City  Trustee to redeem the Series 1994A
     Bonds in part,  which  redemption  would have the result that the  interest
     payable  on  the  Series  1994A  Bonds  remaining  outstanding  after  such
     redemption in part would not be subject to federal  income  taxation in the
     hands of persons other than a "substantial  user" or a "related  person" as
     those terms are used in Section  147(a)(2) of the Internal  Revenue Code of
     1986, as amended.

     In case of  redemption  of the 2024 PC Bond in  whole  for the  purpose  of
prepayment under the Loan Agreement  pursuant to subsections (a), (b), (c), (d),
(f), (g), (h) or (i) above,  the amounts  payable upon redemption of the 2024 PC
Bond shall be a sum  sufficient,  together with other funds  deposited  with the
City  Trustee and  available  for such  purpose,  to pay the  principal  of (and
premium,  in the case of redemption  pursuant to (f) above), and interest on the
2024 PC Bond then  outstanding  and to pay all reasonable and necessary fees and
expenses of the City Trustee  accrued and to accrue through final payment of the
2024 PC Bond.

     In case of redemption in part pursuant to (e), (f) or (i) above, the amount
payable by the Company under this Forty-Fourth  Supplemental Indenture, the Loan
Agreement  and the 2024 PC Bond shall be a sum  sufficient,  together with other
funds  deposited  with the Trustee and available  for such  purpose,  to pay the
principal of (and premium in the case of  prepayment  pursuant to (f) above) and
interest on the 2024 PC Bond so to be redeemed,  which sum  together  with other
funds  deposited  with the City Trustee and  available for such purpose shall be
sufficient to pay the principal of, premium,  if any, and interest on the Series
1994A Bonds and to pay all  reasonable  and  necessary  fees and expenses of the
City Trustee accrued and to accrue through such partial prepayment.

     The 2024 PC Bond and the Series 1994A Bonds shall be redeemable at any time
within one hundred eighty (180) days following the event or events  described as
giving rise to an option of the Company to redeem them in subsections  (a), (b),
(c), (d) or (e) above.

     To exercise any of the options  granted to redeem the 2024 PC Bond in whole
or in part or to comply with any obligations to redeem the 2024 PC Bond in whole
or in part imposed in this Section 2, the Company  shall give written  notice of
the date of redemption  to the City  Trustee,  which date shall be not less than
thirty  (30) days nor more  than  sixty  (60)  days from the date the  notice is
mailed.  No further notice,  by publication or otherwise,  shall be required for
redemption  of the 2024 PC  Bond,  and the  requirements  of  Section  59 of the
Mortgage  for  notice by  newspaper  publication  shall not apply to the 2024 PC
Bond.

     At the option of the holder,  the 2024 PC Bond,  upon surrender  thereof at
the  office or agency of the  Company  in  Chicago,  Illinois,  together  with a
written  instrument of transfer in form approved by the Company duly executed by
the holder or by his duly authorized attorney,  shall be exchangeable for a like
aggregate principal amount of fully registered bonds of the same series of other
authorized denominations.

     The 2024 PC Bond will be  nontransferable  except to the City  Trustee  and
successors  thereto,  if  any,  and to the  Company.  To the  extent  that it is
transferable,  it is transferable by the registered holder thereof, in person or
by  attorney  duly  authorized  in  writing,  on the books of the Company at the
office or agency of the Company in the City of Chicago, Illinois, upon surrender
thereof  for  cancellation  at said  office and upon  presentation  of a written
instrument of transfer duly executed.  Thereupon, the Company shall issue in the
name of the transferee,  and the Trustee shall  authenticate and deliver,  a new
registered  2024 PC Bond,  in an  authorized  denomination,  of equal  principal
amount. Any such transfer shall be subject to the terms and conditions specified
in the Mortgage and in this Forty-Fourth Supplemental Indenture.

     The Company  shall not be required to transfer or exchange the 2024 PC Bond
for a period of ten (10) days next  preceding any interest  payment date of said
bond.

     Except as set forth  herein,  no charge  shall be made upon any transfer or
exchange  of any of the  2024 PC Bond  other  than for any tax or taxes or other
governmental charge required to be paid by the Company.

     The 2024 PC Bond  shall be  limited  to an  aggregate  principal  amount of
Twenty Million Dollars ($20,000,000) and shall be issued under the provisions of
Article VII of the Original Mortgage.

     SECTION 3. The 2024 PC Bond,  and the Trustee's  Certificate to be endorsed
thereon, shall be in the following forms, respectively:

                         [FORM OF FACE OF 2024 PC BOND]

     This First Mortgage Bond, 5.90% Series,  due 2024  (hereinafter  called the
"2024 PC Bond") is not  transferable  except to a  successor  trustee  under the
Indenture of Trust dated as of December 1, 1994, between the City of Petersburg,
Indiana and Chase Manhattan Trust Company, National Association, as successor to
Society National Bank, Indiana, as the Trustee, or to Indianapolis Power & Light
Company.

                       INDIANAPOLIS POWER & LIGHT COMPANY

                   FIRST MORTGAGE BOND, 5.90% Series, Due 2024
                              Due December 1, 2024

No. 1                                                                $20,000,000

     INDIANAPOLIS  POWER & LIGHT COMPANY,  a corporation of the State of Indiana
(hereinafter called the "Company"),  for value received,  hereby promises to pay
Chase Manhattan  Trust Company,  National  Association,  as successor to Society
National Bank, Indiana,  as the Trustee  (hereinafter called the "City Trustee")
under the  Indenture  of Trust  between  the City of  Petersburg,  Indiana  (the
"City")  and  the  City  Trustee,  dated  as of  December  1,  1994  (the  "City
Indenture")  or  registered  assigns,  on December 1, 2024, at the office of the
Company, in the City of Indianapolis,  State of Indiana, or if no such office is
maintained  at the time by the  Company,  then at the  office  or  agency of the
Company  for such  purpose in the City of  Chicago,  State of  Illinois,  Twenty
Million Dollars  ($20,000,000)  in lawful money of the United States of America,
and to pay to the registered owner hereof interest thereon from the first day of
June or the first day of December  next  preceding the date of this 2024 PC Bond
(except that the first interest  payment  hereunder shall be made on December 1,
2001 for the period from August 1, 2001 through  November 30, 2001), at the rate
of five and ninety  hundreths  percent (5.90%) per annum in like lawful money at
said office or agency on June 1 and December 1 in each year, until the Company's
obligation  with  respect  to the  payment  of such  principal  shall  have been
discharged.  The interest payable hereunder on June 1 or December 1 will be paid
to the registered  owner of this 2024 PC Bond at or before the close of business
on such dates, or if such date shall be a Saturday,  Sunday, holiday or a day on
which banking institutions in the City of Indianapolis or the city of any paying
agents are authorized by law to close, on or before the close of business on the
next  succeeding  business day on which such banking  institutions  are open for
business.

     REFERENCE IS MADE TO THE FURTHER  PROVISIONS OF THIS 2024 PC BOND SET FORTH
ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE
SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.

     No recourse shall be had for the payment of the principal of or interest on
this  2024 PC 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,  as such,  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,  as such,  being waived and released by the terms of the
Mortgage, as herein defined.

     This 2024 PC Bond shall not become  obligatory until American National Bank
and Trust Company of Chicago, the Trustee under the Mortgage, as herein defined,
or its successor thereunder,  shall have signed the form of certificate endorsed
hereon.

     IN WITNESS WHEREOF, INDIANAPOLIS POWER & LIGHT COMPANY has caused this 2024
PC Bond to be signed in its name by its President or one of its Vice Presidents,
by his signature or a facsimile  thereof,  and its corporate  seal to be affixed
hereon,  attested by its Secretary or one of its Assistant  Secretaries,  by his
signature or a facsimile thereof.

                                            INDIANAPOLIS POWER & LIGHT
                                                     COMPANY

Dated_______________                       By_______________________________
                                                                       President

Attest:

By_____________________________
                  Secretary

<PAGE>

                 [FORM OF TRUSTEE'S CERTIFICATE ON 2024 PC BOND]

                              Trustee's Certificate

     This 2024 PC Bond is one of the  bonds,  of the series  herein  designated,
provided  for in the  within-mentioned  Mortgage and  Forty-Fourth  Supplemental
Indenture thereto.

                                            AMERICAN NATIONAL BANK AND
                                            TRUST COMPANY OF CHICAGO
                                                                Trustee

                                            By________________________________
                                            Authorized Signature

                     [FORM OF REVERSE SIDE OF 2024 PC BOND]

                       INDIANAPOLIS POWER & LIGHT COMPANY

                   FIRST MORTGAGE BOND, 5.90% Series, due 2024
                              Due December 1, 2024

     This 2024 PC Bond is one of an issue of bonds of the  Company,  issuable in
series,  and is one of a series known as its First Mortgage Bonds, 5.90% Series,
due 2024  (herein  called  the "2024 PC Bond")  limited in  aggregate  principal
amount to Twenty Million Dollars ($20,000,000) and established by a Forty-Fourth
Supplemental  Indenture  dated as of August  1,  2001,  all bonds of all  series
issued and to be issued under and equally secured (except insofar as any sinking
or other fund,  established  in accordance  with the  provisions of the Mortgage
hereinafter  mentioned,  may  afford  additional  security  for the bonds of any
particular  series)  by a Mortgage  and Deed of Trust,  dated as of May 1, 1940,
executed by the Company to American  National Bank and Trust Company of Chicago,
as the Trustee (which Mortgage and Deed of Trust as supplemented and modified by
all  supplemental   indentures  thereto  is  hereinafter   referred  to  as  the
"Mortgage"),  to  which  Mortgage  reference  is made for a  description  of the
property  mortgaged  and  pledged,  the nature and extent of the  security,  the
rights of the  bearers  or  registered  owners of the bonds in  respect  of such
security,  the duties and immunities of the Trustee and the terms and conditions
upon which the bonds are secured.

     This  2024 PC Bond  evidences  and  secures  a loan made by the City to the
Company, pursuant to a Loan Agreement, dated as of December 1, 1994, between the
City and the Company (the "Loan  Agreement").  In order to obtain funds for such
loan, the City issued Twenty Million Dollars  ($20,000,000)  principal amount of
its Solid Waste Disposal Revenue Bonds, Series 1994A (Indianapolis Power & Light
Company  Project) (the "City  Bonds") under and pursuant to the City  Indenture.
The City Bonds are payable from  payments  made by the Company of principal  of,
premium,  if any,  and interest on this 2024 PC Bond and from moneys in the Bond
Fund created under the City Indenture.  The obligation of the Company to pay the
principal  of,  premium,  if any,  and  interest  on this 2024 PC Bond  shall be
discharged  to the extent  that any moneys in said Bond Fund are  available  for
payments  on the City  Bonds  and are  directed  by the  Company  to be  applied
thereto, all as provided in the Forty-Fourth Supplemental Indenture.

     This 2024 PC Bond is not  subject  to  redemption  prior to August 1, 2011,
except as provided in Section 2 of the Forty-Fourth  Supplemental  Indenture, to
which reference is made for full description of redemption provisions.

     This 2024 PC Bond is subject to  redemption in whole or in part at any time
on or after August 1, 2011,  at the option of the Company,  upon at least thirty
(30)  days  prior  notice,  all as  provided  in the  Forty-Fourth  Supplemental
Indenture, at a price equal to the principal amount of the 2024 PC Bond so to be
redeemed and accrued interest to the date of redemption, together with a premium
equal to a percentage of the principal  amount thereof set forth below under the
heading "Redemption Premium":

         If Redeemed During the Twelve Months
         Ending With the Thirty-first Day                     Redemption
         Of July of the Year Stated                           Premium
         ---------------------------------------------------------------
         2012                                                 2.0%
         2013                                                 1.5%
         2014                                                 1.0%
         2015                                                 0.5%

and without premium if redeemed after July 31, 2015.

     With the  consent  of the  Company  and to the extent  permitted  by and as
provided in the Mortgage,  the rights and  obligations  of the Company and/or of
the holders of the bonds and/or  coupons  and/or the terms and provisions of the
Mortgage and/or any instruments  supplemental thereto may be modified or altered
by affirmative vote of the holders of at least sixty-six and two-thirds  percent
(66-2/3%)  in principal  amount of the bonds  affected by such  modification  or
alteration then outstanding  under the Mortgage  (excluding  bonds  disqualified
from  voting by reason of the  Company's  interest  therein as  provided  in the
Mortgage);  provided that no such  modification  or alteration  shall permit the
extension of the maturity of the principal of this 2024 PC Bond or the reduction
in the rate of interest hereon or any other modification in the terms of payment
of such  principal  or interest  without the consent of the holder  hereof.  The
principal  hereof may be  declared  or may become due and  payable  prior to the
stated date of maturity hereof, on the conditions, in the manner and at the time
set forth in the Mortgage,  upon the occurrence of a completed default as in the
Mortgage provided.

     No reference herein to the Mortgage,  and no provision of this 2024 PC Bond
or of the Mortgage,  shall alter or impair the obligation of the Company,  which
is  absolute  and  unconditional,  to  pay,  subject  to the  provisions  of the
Forty-Fourth  Supplemental Indenture, the principal of, and premium, if any, and
interest on this 2024 PC Bond at the place,  at the respective  times and at the
rate and the manner herein prescribed.

     This 2024 PC Bond is issuable only in full  registered form without coupons
in denominations  of Five Thousand Dollars ($5,000) and any larger  denomination
which is a whole multiple of Five Thousand Dollars ($5,000).

     This 2024 PC Bond will be  nontransferable  except to the City  Trustee and
successors  thereto,  if  any,  and to the  Company.  To the  extent  that it is
transferable,  it is transferable by the registered holder thereof, in person or
by  attorney  duly  authorized  in  writing,  on the books of the Company at the
office or agency of the Company in the City of Chicago, Illinois, upon surrender
thereof  for  cancellation  at said  office and upon  presentation  of a written
instrument of transfer duly executed.  Thereupon, the Company shall issue in the
name of the transferee,  and the Trustee shall  authenticate and deliver,  a new
registered  2024 PC Bond,  in an  authorized  denomination,  of equal  principal
amount. Any such transfer shall be subject to the terms and conditions specified
in the Mortgage and in the Forty-Fourth Supplemental Indenture.

     Upon  redemption of this 2024 PC Bond in part and surrender  thereof at the
office or agency of the Company in Chicago,  Illinois, for exchange, the Trustee
shall  authenticate  and deliver a new registered  2024 PC Bond in an authorized
denomination and principal  amount equal to the reduced  principal amount due on
that series after such partial redemption.

                           [END OF 2024 PC BOND FORM]

     SECTION 4. Until the 2024 PC Bond in definitive form is ready for delivery,
the Company  may  execute,  and upon its  request in writing  the Trustee  shall
authenticate  and deliver,  in lieu thereof,  a fully registered 2024 PC Bond in
temporary  form, as provided in Section 15 of the Original  Mortgage.  Such bond
may, in lieu of the statement of the specific  redemption  prices required to be
set  forth  in  such  bond in  definitive  form,  include  a  reference  to this
Forty-Fourth Supplemental Indenture for a statement of such redemption prices.

     SECTION  5.  The  Company  covenants  and  agrees  that  it will  duly  and
punctually pay to the holder of the 2024 PC Bond the principal thereof, premium,
if any,  and  interest  on said bond at the  dates  and place and in the  manner
mentioned therein; provided, however, that:

     (a)  the obligation of the Company to pay the principal of, and premium, if
   any, and interest on the 2024 PC Bond shall be  discharged to the extent that
   any moneys in the Bond Fund created under and pursuant to the City  Indenture
   are available  for the payment of the  principal  of, or premium,  if any, or
   interest  on the Series  1994A  Bonds and are  directed  by the Company to be
   applied to the payment  thereof in the manner  provided in the City Indenture
   on or  prior to the  dates  on  which  the  Company  is  required  to pay the
   principal of, or premium, if any, or interest on the 2024 PC Bond.

     (b)  Except as otherwise  provided in this Section 5, the principal  amount
   of any Series  1994A Bond  acquired by the Company and  delivered to the City
   Trustee,  or acquired by the City  Trustee and  cancelled,  shall be credited
   against the  obligation  of the Company to pay the  principal  of the 2024 PC
   Bond.

As the principal of,  premium,  if any, and interest on the 2024 PC Bond is paid
or deemed paid in full, and upon its receipt by the Company,  such bond shall be
delivered to the Trustee for cancellation. The Company shall promptly inform the
Trustee  of all  payments  made  and  credits  availed  of with  respect  to its
obligations  on the 2024 PC Bond. The Trustee shall not be required to recognize
any payment made or credit availed of with respect to any 2024 PC Bond unless it
has received (a) the bond for cancellation by it, or (b) a certificate signed by
a duly  authorized  officer of the City  Trustee  specifying  the amount of such
payment or credit and the  principal  amount of the 2024 PC Bond with respect to
which the  payment  or credit  was  applied.  In the  absence  of receipt by the
Trustee  of any 2024 PC Bond,  any such  certificate  shall be  controlling  and
conclusive.

     SECTION 6. The  covenant  of the  Company to make  annual  payments  to the
Trustee for a Maintenance and Improvement Fund as contained in Section 41 of the
Original  Mortgage and in the first twenty-four  Supplemental  Indentures to the
Original  Mortgage creating the several series of First Mortgage Bonds presently
outstanding under such Supplemental Indentures shall not apply to nor be for the
benefit of the 2024 PC Bond,  and the Company  reserves  the right,  without any
consent of, or other action by, the holder of the 2024 PC Bond, to amend, modify
or delete the  provisions  of the  Mortgage  relating  to such  Maintenance  and
Improvement Fund and by acceptance of the 2024 PC Bond the holder thereof waives
any right or  privilege  so to consent  or take any other  action  with  respect
thereto.

     SECTION 7. The Company  covenants  that,  so long as the 2024 PC Bond shall
remain  outstanding,  it will comply with all of the provisions of Section 47 of
the Original  Mortgage,  including the provisions with respect to limitations on
dividends and distributions and the purchase and redemption of stock.

     SECTION 8. The Trustee hereby accepts the trusts herein declared,  provided
and created and agrees to perform the same upon the terms and conditions  herein
and in the Mortgage set forth and upon the following terms and conditions:

     The  recitals  contained  herein  and in the  bonds  shall  be taken as the
statements  of the  Company and the Trustee  assumes no  responsibility  for the
correctness of the same. The Trustee makes no representations as to the validity
or adequacy  of the  security  afforded  hereby,  or as to the  validity of this
Forty-Fourth Supplemental Indenture or of the 2024 PC Bond issued hereunder.

     SECTION 9. Whenever in this Forty-Fourth  Supplemental  Indenture either of
the  parties  hereto  is  named or  referred  to,  this  shall,  subject  to the
provisions  of Article XVII of the Original  Mortgage,  be deemed to include the
successors or assigns of such party,  and all the  covenants  and  agreements in
this  Forty-Fourth  Supplemental  Indenture  contained  by or on  behalf  of the
Company, or by or on behalf of the Trustee,  shall,  subject as aforesaid,  bind
and inure to the  benefit  of the  respective  successors  and  assigns  of such
parties, whether so expressed or not.

     SECTION 10. Nothing in this Forty-Fourth  Supplemental  Indenture expressed
or implied, is intended or shall be construed to confer upon, or to give to, any
person,  co-partnership  or  corporation,  other than the parties hereto and the
holders of the bonds and  coupons  outstanding  under the  Mortgage,  any right,
remedy, or claim under or by reason of this Forty-Fourth  Supplemental Indenture
or any  covenant,  condition  or  stipulation  hereof;  and all  the  covenants,
conditions,   stipulations,   promises  and  agreements  in  this   Forty-Fourth
Supplemental Indenture contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto and of the holders of the bonds
and of the coupons outstanding under the Mortgage.

     SECTION 11. The Company  covenants  that all of the terms,  provisions  and
conditions  of the  Mortgage  shall be  applicable  to the  2024 PC Bond  issued
hereunder,  except as herein  otherwise  provided and except insofar as the same
may be  inconsistent  with  the  provisions  of this  Forty-Fourth  Supplemental
Indenture.

     SECTION 12. This Forty-Fourth  Supplemental Indenture is dated as of August
1, 2001,  although  executed and  delivered  on the date of the  acknowledgement
hereof by the Trustee;  and shall be  simultaneously  executed and  delivered 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,  INDIANAPOLIS POWER & LIGHT COMPANY, party of the first
part, has caused its corporate name to be hereunto  affixed and this  instrument
to be signed and  acknowledged  by its  President or a  Vice-President,  and its
corporate  seal  to be  hereto  affixed  and  attested  by its  Secretary  or an
Assistant Secretary, for and in its behalf, and AMERICAN NATIONAL BANK AND TRUST
COMPANY  OF  CHICAGO,  party of the  second  part,  as  Trustee,  has caused its
corporate  name to be  hereunto  affixed  and this  instrument  to be signed and
acknowledged  by one of its  Authorized  Officers,  and its corporate seal to be
hereto  affixed and attested by one of its  Authorized  Officers,  all as of the
day, month and year first above written.

                                            INDIANAPOLIS POWER & LIGHT
                                            COMPANY,

                                            By /s/WILLIAM H. HENLEY
                                              ----------------------------------
(SEAL)                                         WILLIAM H. HENLEY,
                                               President
Attest:

By: /s/WILLIAM R. DODDS
   ------------------------------
    WILLIAM R. DODDS,
    Secretary
                                            AMERICAN NATIONAL BANK AND
                                            TRUST COMPANY OF CHICAGO

                                            By /s/ROBERT M. SELANGOWSKI
                                              ---------------------------------
                                               ROBERT M. SELANGOWSKI,
                                               Authorized Officer
Attest:
(SEAL)

By: /s/F. HENRY KLESCHEN
   ---------------------------------
    F. HENRY KLESCHEN,
    Authorized Officer
<PAGE>

STATE OF INDIANA  )
                  )  SS:
COUNTY OF MARION  )

     On this 26th day of July,  in the year 2001,  before me, a Notary Public in
and for the County  and State  aforesaid,  personally  came  WILLIAM H.  HENLEY,
President  and  WILLIAM  R.  DODDS,  Secretary,  of  Indianapolis  Power & Light
Company,  one of the corporations  described in and which executed the foregoing
instrument,  to me  personally  known  and  known  to me  personally  to be such
President  and  Secretary,  respectively.  Said WILLIAM H. HENLEY and WILLIAM R.
DODDS being by me severally  duly sworn did depose and say that the said WILLIAM
H.  HENLEY  resides  in Marion  County,  Indiana  and the said  WILLIAM R. DODDS
resides in Fulton County, Illinois; that said WILLIAM H. HENLEY is President and
said WILLIAM R. DODDS is Secretary of said  Indianapolis  Power & Light Company;
that each of them knows the corporate  seal of said  corporation;  that the seal
affixed to said  instrument  and  bearing the name of said  corporation  is such
corporate  seal;  that it was so affixed by order of the Board of  Directors  of
said  corporation;  and that each of them signed his name thereto by like order;
and each of them acknowledged the execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and the free and voluntary
act and deed of said corporation, for the uses and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 26th day of July, 2001.

                                                /s/DINAH L. KIRKHAM
                                                --------------------------------
                                                DINAH L. KIRKHAM,
                                                Notary Public

My Commission Expires:
         June 23, 2008

My County of Residence is:
         Johnson
                                                                 (NOTARIAL SEAL)
<PAGE>

STATE OF ILLINOIS )
                  )  SS:
COUNTY OF COOK    )

     On this 26th day of July,  in the year 2001,  before me, a Notary Public in
and for the County and State  aforesaid,  personally came ROBERT M.  SELANGOWSKI
and F. HENRY KLESCHEN,  Authorized  Officers of American National Bank and Trust
Company of Chicago, one of the corporations  described in and which executed the
foregoing  instrument,  to me personally  known and known to me personally to be
such  Authorized  Officers.  Said ROBERT M.  SELANGOWSKI  and F. HENRY KLESCHEN,
being  by me  severally  sworn  did  depose  and say that  the  said  ROBERT  M.
SELANGOWSKI  resides in Lansing,  Illinois,  and that the said F. HENRY KLESCHEN
resides in Evanston, Illinois; that said ROBERT M. SELANGOWSKI and said F. HENRY
KLESCHEN,  are  Authorized  Officers of said  American  National  Bank and Trust
Company  of  Chicago;  that  each  of  them  knows  the  corporate  seal of said
corporation;  that the seal affixed to said  instrument  and bearing the name of
said  corporation is such corporate seal; that it was so affixed by authority of
the Board of  Directors of said  corporation;  that each of them signed his name
thereto by like authority;  and each of them  acknowledged the execution of said
instrument  on behalf of said  corporation  to be his free and voluntary act and
deed and the free and voluntary act and deed of said  corporation,  for the uses
and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 26th day of July, 2001.

                                                /s/KATHLEEN A. WHITE
                                                --------------------------------
                                                KATHLEEN A. WHITE,
                                                      Notary Public

My Commission Expires:
         February 9, 2002
My County of Residence is:
         Cook

(NOTARIAL SEAL)

                         This instrument was prepared by
                                 BRIANE M. HOUSE
<PAGE>

                                    RECORDING DATA

            Forty-Fourth Supplemental Indenture Dated as of August 1, 2001

                                                     Instrument        Recording
County            Record            Page             No.               Date
--------------------------------------------------------------------------------

Bartholomew       ---               ---              200100009897      7/27/2001
Boone             ---               ---              0109136           7/27/2001
Daviess           ---               ---              01-3597           7/27/2001
Gibson            ---               ---              200100005589      7/27/2001
Greene            Inden. Bk. 27     44-70            200100004075      7/27/2001
Hamilton          ---               ---              200100046496      7/27/2001
Hancock           ---               ---              0110423           7/27/2001
Hendricks         Mtg. Rec. 261     789-815          200100021810      7/27/2001
Johnson           ---               ---              2001-022710       7/27/2001
Knox              Mtg. Rec. 554     543-569          5736              7/27/2001
Madison           ---               ---              200117485         7/27/2001
Marion            ---               ---              2001-0130009      7/27/2001
Monroe            ---               ---              2001015472        7/27/2001
Morgan            ---               ---              20111810          7/27/2001
Owen              Mtg. Rec. IC      523-549          138715            7/27/2001
Pike              Mtg. Rec. 306     269-295          01-1784           7/27/2001
Putnam            ---               ---              2001005422        7/27/2001
Shelby            ---               ---              0106331           7/27/2001
Sullivan          Mtg. Rec. 258     978              012792            7/27/2001
Switzerland       Mtg. Rec. 133     26               8807              7/27/2001

<PAGE>

                                                                  Exhibit 4.4.15

                                                                [CONFORMED COPY]
================================================================================

                       INDIANAPOLIS POWER & LIGHT COMPANY
                                       TO
                        AMERICAN NATIONAL BANK AND TRUST
                               COMPANY OF CHICAGO
                                                Trustee

                                   ----------

                       Forty-Fifth Supplemental Indenture

                                   ----------

                           Dated as of August 1, 2001

                       ESTABLISHING FIRST MORTGAGE BONDS,
                             5.95% Series, Due 2029

================================================================================

<PAGE>

                                       ii

                               TABLE OF CONTENTS*

                                       of
                       FORTY-FIFTH SUPPLEMENTAL INDENTURE
                                       of
                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                            Page

PARTIES........................................................................1
RECITALS ......................................................................1
SECTION 1       Granting clauses...............................................3
                    Part I   Electric Distributing Systems.....................4
                    Part II Reserved...........................................4
                    Part III Indeterminate Permits and Franchises..............4
                    Part IV  Other Property....................................5
                    General and after-acquired title...........................6
SECTION 2       Designation of Forty-Fifth series of bonds and kind and
                    denominations thereof .....................................6
                Designation of Company or American National Bank and Trust
                    Company of Chicago as paying agent.........................6
                Purpose of bonds...............................................7
                Redemption of bonds............................................7
                Exchange of bonds.............................................12
                Transfer of bonds.............................................12
                Series limited to $30,000,000.................................13
SECTION 3       Form of fully registered bond.................................13
                Form of Trustee's certificate on bonds........................15
SECTION 4       Temporary bonds...............................................19
SECTION 5       Payment of principal and interest; credits....................19
SECTION 6       Annual Payments for Maintenance and Improvement Fund..........20
SECTION 7       Compliance with Section 47 of Original Mortgage with
                   respect to dividend restrictions...........................20
SECTION 8       Acceptance of trusts by Trustee and conditions of
                   Acceptance.................................................20
-------------------
*    Table of Contents is not part of the Forty-Fifth Supplemental Indenture and
     should not be considered  such. It is included  herein only for purposes of
     convenient reference.

<PAGE>

                                                                            Page

SECTION 9         Successors and assigns......................................20
SECTION 10        Limitation of rights hereunder..............................21
SECTION 11        Compliance with terms, provisions
                        and conditions of Mortgage............................21
SECTION 12        Execution in counterparts...................................21

TESTIMONIUM...................................................................22
SIGNATURES AND SEALS..........................................................22
ACKNOWLEDGEMENTS..............................................................22

<PAGE>

     THIS  FORTY-FIFTH  SUPPLEMENTAL  INDENTURE,  dated as of  August  1,  2001,
between  INDIANAPOLIS  POWER & LIGHT  COMPANY,  a  corporation  of the  State of
Indiana,  hereinafter  sometimes  called the "Company," party of the first part,
and AMERICAN  NATIONAL  BANK AND TRUST  COMPANY OF CHICAGO,  a national  banking
association,  as Trustee,  hereinafter  sometimes called the "Trustee," party of
the second part;

     WHEREAS, the Company by a Mortgage and Deed of Trust (hereinafter sometimes
called  the  "Original  Mortgage"  when  referred  to as  existing  prior to any
supplement thereto or modification  thereof, and the "Mortgage" when referred to
as now or heretofore supplemented and modified) dated as of May 1, 1940, made to
said American National Bank and Trust Company of Chicago,  as Trustee, to secure
the  payment of the bonds  issued from time to time under the  Mortgage  for the
purposes of and subject to the  limitations  specified in the  Mortgage,  and to
secure the  performance  of the  covenants  therein  contained,  conveyed to the
Trustee  thereunder  upon certain  trusts,  terms and  conditions,  and with and
subject to certain provisos and covenants  therein  contained,  all and singular
the  property,  rights and  franchises  which the  Company  then owned or should
thereafter  acquire,  excepting the property  expressly excepted by the terms of
the Original Mortgage or any indenture  supplemental  thereto, to which Mortgage
reference is hereby made for greater certainty; and

     WHEREAS,  the  Original  Mortgage  has been  supplemented  and  modified by
supplemental  indentures  dated as of May 1, 1942, as of February 1, 1948, as of
April 1, 1949, as of October 1, 1949 (two),  as of February 1, 1951, as of March
1, 1953,  as of June 1, 1956,  as of March 1, 1958, as of October 1, 1960, as of
August 1, 1964, as of April 1, 1966, as of May 1, 1967, as of May 1, 1968, as of
October 1, 1970,  as of March 1, 1972,  as of March 15, 1973, as of February 15,
1974, as of August 15, 1974, as of September 15, 1975, as of June 1, 1976, as of
July 1, 1976,  as of August 1, 1977,  as of September  1, 1978,  as of August 1,
1981 (two),  as of November 1, 1983,  as of November 1, 1984,  as of December 1,
1984,  as of September 1, 1985, as of October 1, 1986, as of June 1, 1989, as of
August 1, 1989,  as of October 15,  1991,  as of August 1, 1992,  as of April 1,
1993, as of October 1, 1993 (two),  as of February 1, 1994 (two),  as of January
15, 1995, as of October 1, 1995 and as of August 1, 2001 (two); and

     WHEREAS,  Section 8 of the Original Mortgage provides,  among other things,
that the form of each series of bonds  (other  than the initial  issue of bonds)
issued  thereunder  shall be  established by an indenture  supplemental  thereto
authorized by resolution of the Board of Directors of the Company,  and that the
form of each series, as established by the Board of Directors, shall specify the
descriptive  title of the bonds and various  other terms  thereof,  and may also
contain such other  provisions as the Board of Directors may, in its discretion,
cause to be inserted therein expressing or referring to the terms and conditions
upon which such bonds are to be issued and secured  under the Original  Mortgage
or any indenture supplemental thereto or in modification thereof; and

     WHEREAS, the Company entered into a Loan Agreement, dated as of December 1,
1995  (hereinafter  called the "Loan  Agreement")  with the City of  Petersburg,
Indiana  (the  "City"),  in order to obtain  funds for the  financing of certain
facilities and equipment collectively comprising solid waste disposal facilities
(the  "Facilities")  located at the Petersburg  Generating Station Units 1 and 2
(the "Plant") and the issuance of $30,000,000  aggregate principal amount of the
City's Solid Waste Disposal Revenue Bonds,  Series 1995C  (Indianapolis  Power &
Light Company Project) (the "Bonds"); and

     WHEREAS, the Company has elected to convert the applicable interest rate on
the Bonds to the Long Term Rate  effective as of August 1, 2001, and pursuant to
the Loan Agreement,  the Company has agreed to issue a series of its bonds under
the Mortgage and this  Forty-Fifth  Supplemental  Indenture in order to evidence
and secure its indebtedness under the Loan Agreement; and

     WHEREAS,  the  Company  now  desires  to  provide  for  the  establishment,
execution,  authentication  and delivery under the Mortgage of bonds of a series
to be known as its "First Mortgage Bonds,  5.95% Series, due 2029" (the bonds of
said  series  being  hereinafter  sometimes  referred to as the "2029 PC Bond"),
limited  to  the  aggregate   principal   amount  of  Thirty   Million   Dollars
($30,000,000); and

     WHEREAS,  all  things  necessary  to make  the  2029  PC  Bond  hereinafter
described,  when duly executed by the Company and authenticated and delivered by
the Trustee, a valid,  binding and legal obligation of the Company,  and to make
this  Forty-Fifth   Supplemental   Indenture  a  valid  and  binding   agreement
supplemental to the Original Mortgage, have been done and performed; and

     WHEREAS,  the  execution  and  delivery by the Company of this  Forty-Fifth
Supplemental  Indenture,  and the  terms  of the 2029 PC Bond,  have  been  duly
authorized by the Board of Directors of the Company by  appropriate  resolutions
of said Board; and

     WHEREAS,  it is provided in and by the Original  Mortgage  that the Company
will execute and deliver such  further  instruments  and do such further acts as
may be  necessary  or proper to carry out more  effectively  the purposes of the
Mortgage,  and to make  subject  to the lien  thereof  any  property  thereafter
acquired and intended to be subject to the lien thereof; and

     WHEREAS,  the Company has,  since the date of execution and delivery of the
Original  Mortgage,   purchased  and  acquired  property  and  desires  by  this
Forty-Fifth  Supplemental  Indenture  specifically to convey to the Trustee such
property  for the better  protection  and security of the bonds issued and to be
issued under the Original Mortgage, or any indenture supplemental thereof;

     NOW,  THEREFORE,  THIS INDENTURE  WITNESSETH  that, in consideration of the
premises and of the acceptance or purchase of the 2029 PC Bond by the registered
owners thereof, and of the sum of one dollar,  lawful money of the United States
of America,  to the Company duly paid by the Trustee at or before the  execution
and delivery of this Forty-Fifth  Supplemental Indenture, the receipt whereof is
hereby  acknowledged,  the Company and the Trustee,  respectively,  have entered
into, executed and delivered this Forty-Fifth  Supplemental  Indenture,  for the
uses and purposes hereinafter expressed, that is to say:

     SECTION 1. The Company has granted,  bargained,  sold, released,  conveyed,
assigned, transferred,  mortgaged, pledged, set over and confirmed, and by these
presents does grant, bargain, sell, release, convey, assign, transfer, mortgage,
pledge,  set over and confirm (subject,  however,  to permitted  encumbrances as
defined in the Original  Mortgage),  unto said American  National Bank and Trust
Company of Chicago,  as Trustee,  as herein provided,  and its successors in the
trusts declared in the Original Mortgage and herein, all of the property,  real,
personal  and mixed,  tangible  and  intangible,  of every kind,  character  and
description  which the Company has acquired  since the execution and delivery of
the  Original  Mortgage and now owns  (except  property,  rights and assets of a
character  similar to that  excluded from the lien and operation of the Mortgage
by the Granting  Clauses of the Original  Mortgage,  which property,  rights and
assets are excluded  from the lien and  operation  of the  Mortgage  only to the
extent  provided  therein),   including,  but  without  otherwise  limiting  the
generality of the foregoing,  the following  described  property situated within
the State of Indiana:

                                     PART I.
                         ELECTRIC DISTRIBUTING SYSTEMS.

     All electric  distributing  systems of the Company acquired by it after May
1, 1940,  the date of the  Original  Mortgage,  and  located in the  Counties of
Bartholomew,  Boone, Daviess,  Gibson,  Greene,  Hamilton,  Hancock,  Hendricks,
Johnson,  Knox, Madison,  Marion,  Monroe,  Morgan, Owen, Pike, Putnam,  Shelby,
Sullivan and Switzerland,  State of Indiana;  and any additions to or extensions
of any  such  systems,  together  with  the  buildings,  erections,  structures,
transmission lines, power stations, sub-stations,  engines, boilers, condensers,
pumps, turbines,  machinery,  tools, conduits,  manholes,  insulators,  dynamos,
motors,  lamps, cables,  wires, poles,  towers,  cross-arms,  piers,  abutments,
switchboard   equipment,    meters,    appliances,    instruments,    apparatus,
appurtenances,  maps, records, ledgers, contracts, facilities and other property
or  equipment  used or provided  for use in  connection  with the  construction,
maintenance, repair and operation thereof; together also with all of the rights,
privileges, rights-of-way,  franchises, licenses, grants, liberties, immunities,
ordinances, permits and easements of the Company in respect of the construction,
maintenance, repair and operation of said systems.

                                    PART II.
                                   [Reserved]

                                    PART III.
                      INDETERMINATE PERMITS AND FRANCHISES.

     All indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations by or from any state, county, municipality, or other governmental
authority,  acquired by the Company after May 1, 1940,  the date of the Original
Mortgage, including particularly,  but not limited to, any indeterminate permits
under the Public Service  Commission  Act of the State of Indiana,  and all Acts
amendatory thereof and supplemental  thereto,  and all right, title and interest
therein now owned by the Company, and all renewals, extensions and modifications
of said  indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations,  and  of  the  indeterminate  permits,  franchises,  ordinances,
licenses,  and  other  authorizations  referred  to in Part VII of the  Granting
Clauses of the Original Mortgage.

                                    PART IV.
                                 OTHER PROPERTY.

     All other  property,  whether  real,  personal or mixed  (except any in the
Mortgage expressly excepted), now owned by the Company and wheresoever situated,
including  (without in anywise  limiting or impairing by the  enumeration of the
same the  scope  and  intent  of the  foregoing  or of any  general  description
contained in the  Mortgage) all lands,  flowage  rights,  water rights,  flumes,
raceways,  dams,  rights-of-way  and roads;  all plants  for the  generation  of
electricity by water, steam and/or other power, power houses, telephone systems,
water systems, power plants, hot water plants, sub-stations, transmission lines,
distribution systems, bridges,  culverts and tracts; all offices,  buildings and
structures and the equipment thereof; all machinery,  engines, boilers, dynamos,
machines,   regulators,   meters,  transformers,   generators  and  motors;  all
appliances whether electrical,  gas or mechanical,  conduits,  cables and lines;
all pipes whether for water, and power, or other purposes;  all mains and pipes,
service  pipes,   fittings,   valves  and  connections,   poles,  wires,  tools,
implements,   apparatus,  furniture  and  chattels;  all  municipal  franchises,
indeterminate  permits,  and other  permits;  all lines for the  transportation,
transmission and/or distribution of electric current, and power or water for any
purpose,  including  towers,  poles,  wires,  cables,  pipes,  conduits  and all
apparatus  for use in  connection  therewith;  all real estate,  lands,  leases,
leaseholds; all contracts,  whether heat, light, power, water or street lighting
contracts;  all  easements,   servitudes,  licenses,  permits,  rights,  powers,
franchises,  privileges,  rights-of-way  and other rights in or relating to real
estate  or the  occupancy  of the  same and  (except  as  hereinafter  or in the
Mortgage expressly excepted) all the right, title and interest of the Company in
and to all other  property  of any kind or nature  appertaining  to and/or  used
and/or  occupied  and/or  enjoyed in connection  with any property  hereinbefore
described or referred to;

     TOGETHER   WITH  all  and  singular  the   tenements,   hereditaments   and
appurtenances  belonging or in anywise appertaining to the aforesaid property or
any part thereof,  with the reversion and  reversions,  remainder and remainders
and  (subject to the  provisions  of Section 64 of the Original  Mortgage),  the
tolls, rents, revenues,  issues, earnings,  income, product and profits thereof,
and all the estate,  right,  title and 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, indeterminate permits, franchises,  ordinances, licenses
and other authorizations and every part and parcel thereof.

     SECTION  2.  There  shall be and is hereby  established  a series of bonds,
limited in aggregate principal amount to Thirty Million Dollars ($30,000,000) to
be issued under and secured by the Mortgage, to be designated "5.95% Series, due
2029",  each of which  shall also bear the  descriptive  title  "First  Mortgage
Bonds"; said bonds shall mature on DECEMBER 1, 2029, and shall be issued only as
fully  registered  bonds without  coupons in the  denomination  of five thousand
dollars and any larger  denomination  which is a whole multiple of five thousand
dollars;  they shall bear interest  from the  beginning of the current  interest
period during which each bond is dated, at the rate per annum  designated in the
title  thereof,  payable  semi-annually,  on June 1 and  December 1 of each year
(except that the first interest  payment  thereon shall be made December 1, 2001
for the period from August 1, 2001 through November 30, 2001); and the principal
of, premium,  if any, and interest on said bond shall be payable in lawful money
of the United  States of  America  at the  office of the  Company in the City of
Indianapolis, Indiana, or, if no such office is maintained, at American National
Bank and Trust Company of Chicago,  which is hereby designated and appointed the
office  and  agency of the  Company in the City of  Chicago,  Illinois,  for the
payment of the principal of, premium,  if any, and interest on the 2029 PC Bond,
if necessary,  and for the  registration,  transfer and exchange of such bond as
hereinafter  provided;  all  reference  herein  to the  office  or agency of the
Company in the City of Chicago,  Illinois,  for the payment of the principal of,
premium, if any, and interest on the 2029 PC Bond, or the registration, transfer
or  exchange  thereof,  being to  American  National  Bank and Trust  Company of
Chicago.  In event of the  resignation or inability to act of American  National
Bank and Trust Company of Chicago,  then a successor agent for all such purposes
in the City of Chicago,  Illinois,  shall be appointed by the Board of Directors
of the Company.

     The 2029 PC Bond shall be dated as of the date of  authentication  thereof,
except as otherwise provided in Section 10 of the Original Mortgage.

     The  2029 PC Bond  will be  issued  to  evidence  and  secure a loan to the
Company by the City pursuant to the Loan  Agreement of certain funds  previously
acquired by the City through the issuance of City of Petersburg,  Indiana, Solid
Waste Disposal Revenue Bonds,  Series 1995C  (Indianapolis Power & Light Company
Project)  (the "Series 1995C  Bonds"),  authenticated  and  delivered  under and
pursuant to an  Indenture  of Trust  dated as of  December 1, 1995  (hereinafter
called  the  "City  Indenture"),  by and  between  the City  and Bank One  Trust
Company, National Association,  formerly Bank One, Indianapolis,  NA, as Trustee
(the "City  Trustee").  Pursuant to the City's pledge and assignment of the Loan
Agreement, as set forth in the City Indenture,  the 2029 PC Bond shall be issued
to the City and assigned to the City Trustee.  All of the proceeds of the Series
1995C Bonds were used for the financing of the Facilities at the Plant.

     Upon the notice and in the  manner  and with the  effect  provided  in this
Section 2, the 2029 PC Bond shall be  redeemable  prior to the maturity  thereof
under any one or more of the following circumstances:

(a)  In whole,  at the option of the  Company,  if the  Facilities  or the Plant
     shall have been  damaged or  destroyed to such extent that (i) it cannot be
     reasonably expected, in the opinion of the Company, to be restored within a
     period of six (6) months to the  condition  thereof  immediately  preceding
     such damage or destruction, or (ii) to such extent that the Company, in its
     reasonable  opinion,  is  thereby  prevented  from  carrying  on its normal
     operations  for a period of six (6) months or more, or (iii) to such extent
     that the restoration  thereof would not be, taking into  consideration  the
     net  proceeds  of any  insurance  payable  as a result  of such  damage  or
     destruction, economic in the reasonable opinion of the Company.

(b)  In whole,  at the option of the Company,  if title to, or the temporary use
     of, all or  substantially  all of the  Facilities or the Plant,  shall have
     been taken under the exercise of the power of eminent domain, or should any
     governmental  body or  agency  exercise  any  right  which  it may  have to
     purchase or designate a purchaser of the same,  or should such  property be
     sold to any  governmental  body or agency so that the result of such taking
     or takings is that (i) the Company,  in its reasonable  opinion, is thereby
     prevented  from carrying on its normal  operations of either the Facilities
     or the Plant for a period of six (6) months or more,  (ii) the  restoration
     required as a result of the taking  cannot be reasonably  expected,  in the
     opinion of the Company,  to be completed in a period of six (6) months,  or
     (iii) the restoration  thereof,  taking into consideration the net proceeds
     from such eminent  domain  award,  would not be economic in the  reasonable
     opinion of the Company.

(c)  In whole,  at the option of the Company,  if, as a result of any changes in
     the  Constitution or law of the State of Indiana or the Constitution or law
     of the United States of America or of legislative or administrative  action
     (whether  state or  federal) or by final  decree,  judgment or order of any
     court or administrative body (whether state or federal) the Loan Agreement,
     the Note or the 2029 PC Bond shall,  in the  reasonable  opinion of counsel
     for the  Company,  have  become  void or  unenforceable  or  impossible  of
     performance  in  accordance  with the intent and  purpose of the parties as
     expressed  in the Loan  Agreement;  or  unreasonable  burdens or  excessive
     liabilities  shall,  in the  reasonable  opinion of the Company,  have been
     imposed upon the City or the Company,  with  respect to the  Facilities  or
     operation thereof,  including without limitation federal, state or other ad
     valorem,  property,  income or other taxes not being imposed on the date of
     the Loan  Agreement  other  than ad valorem  taxes  presently  levied  upon
     privately  owned  property  used  for  the  same  general  purpose  as  the
     Facilities.

(d)  In  whole,  at the  option  of the  Company,  if  changes  in the  economic
     availability of raw materials,  operating supplies or facilities  necessary
     for the  operation of the  Facilities  or the Plant shall have  occurred or
     technological  or other  changes  shall  have  occurred  which  render  the
     Facilities uneconomic for use in the reasonable opinion of the Company.

(e)  In part,  at the  option of the  Company,  to the  extent of net  proceeds,
     received from any condemnation  award,  taking or sale as stated herein, if
     title to, or the temporary use of any portion of the Facilities  shall have
     been taken under the exercise of the power of eminent domain, or should any
     governmental  body or  agency  exercise  any  right  which  it may  have to
     purchase or designate a purchaser of the same,  or should such  property be
     sold to any governmental body or agency; provided the Company shall furnish
     to the City and the City Trustee a certificate of an  Independent  Engineer
     (as defined in the Loan Agreement) selected by the Company stating (i) that
     the  property  forming  the part of the  Facilities  that was taken by such
     condemnation,  taking  or  sale  is  not  essential  to  the  character  or
     significance  of the  Facilities,  or (ii)  that the  Facilities  have been
     restored to a condition  substantially  equivalent to their condition prior
     to the taking by such  condemnation,  taking or sale proceedings,  or (iii)
     that  improvements  have been acquired which are suitable for the operation
     of the Facilities as a qualified exempt facility.

(f)  In whole or in part,  at the option of the  Company at any time on or after
     August 1, 2011,  at a price  equal to the  principal  amount of the 2029 PC
     Bond so to be  redeemed  and accrued  interest  to the date of  redemption,
     together  with a premium  equal to a  percentage  of the  principal  amount
     thereof set forth under the heading "Redemption Premium" in the form of the
     2029 PC Bond hereinafter  recited, so long as the Company is not in default
     under the Loan Agreement or the 2029 PC Bond.

(g)  In the event all or substantially all of the mortgaged and pledged property
     under the Mortgage,  or all or substantially  all such property used in the
     business  of   generating,   manufacturing,   transporting,   transmitting,
     distributing or supplying  electricity,  should be taken by exercise of the
     power of eminent domain, or should any governmental body or agency exercise
     any right  which it may have to purchase  or  designate a purchaser  of the
     same, or should such property be sold to any  governmental  body or agency,
     the Company  shall be obligated to redeem the 2029 PC Bond  outstanding  as
     promptly as possible in  accordance  with  paragraph B of Section 69 of the
     Original Mortgage.

(h)  In the event that the Company is notified by the City  Trustee  that (i) an
     event of default under the City  Indenture has occurred and is  continuing,
     and (ii) the City  Trustee has  declared  the  principal  of all the Series
     1995C Bonds then  outstanding  immediately due and payable  pursuant to the
     City Indenture, the Company shall call for redemption, on a redemption date
     selected by it not later than thirty (30) days  following the date on which
     such  notice is  mailed,  the 2029 PC Bond  outstanding,  and shall on such
     redemption date redeem the same; provided,  however,  that such requirement
     of redemption  shall be deemed waived,  if prior to the date fixed for such
     redemption of the 2029 PC Bond (x) such event of default is waived or cured
     as set forth in the City  Indenture,  or (y) there shall have  occurred any
     completed  default (as defined in the  Mortgage)  which affects any bond of
     any series  outstanding  under the Mortgage and which completed default has
     not been cured and made good prior to such  redemption  date,  it being the
     intent of this  proviso  that,  in lieu of such  right to  redemption,  the
     holder of the 2029 PC Bond  shall be  entitled  only to such  rights as are
     available to the holders of bonds of any other series outstanding under the
     Mortgage  in the  event  of  such  completed  default;  and in  case of any
     subsequent  occurrence or  continuance  of the events  described in (i) and
     (ii) of this  Section  2(h),  the  Company  shall have the same  obligation
     (subject to the same proviso) to redeem the 2029 PC Bond.

(i)  In the event the City  Trustee  notifies  the Company and the City that the
     interest  payable on the Series  1995C  Bonds held by persons  other than a
     "substantial user" or a "related person" as those terms are used in Section
     147(a)(2)  of the  Internal  Revenue  Code of 1986,  as  amended,  has been
     determined by a court of competent  jurisdiction  or a formal ruling of the
     Internal Revenue Service to be subject to federal income taxation by reason
     of a breach by the Company of any covenant,  agreement or representation in
     the  Loan  Agreement,  the  Company  shall  call  the  2029  PC  Bond  then
     outstanding  to be redeemed  within one hundred eighty (180) days after the
     date  of  such  notice;   provided,   however,  that  such  requirement  of
     redemption, whether in whole or in part shall be deemed waived if, prior to
     the date fixed for  redemption of the 2029 PC Bond pursuant to this Section
     2(i),  there shall have occurred any  completed  default (as defined in the
     Mortgage)  which  affects  any bond of any  series  outstanding  under  the
     Mortgage and which completed default has not been cured and made good prior
     to such redemption  date, it being the intent of this proviso that, in lieu
     of such  right to  redemption,  the  holder  of the  2029 PC Bond  shall be
     entitled  only to such rights as are  available  to the holders of bonds of
     any  other  series  outstanding  under  the  Mortgage  in the event of such
     completed  default;  but when any such  completed  default  shall have been
     cured and made good,  if interest on the Series  1995C Bonds shall still be
     taxable as  described  above,  the Company  shall have the same  obligation
     (subject to the same proviso) to redeem the 2029 PC Bond within one hundred
     eighty  (180)  days after the  curing  and  making  good of such  completed
     default;  provided  further,  that the Company may call for redemption such
     portion of the 2029 PC Bond, which in the written opinion of an attorney or
     firm of  attorneys  of  nationally  recognized  standing  on the subject of
     municipal  bonds,  would allow the City  Trustee to redeem the Series 1995C
     Bonds in part,  which  redemption  would have the result that the  interest
     payable  on  the  Series  1995C  Bonds  remaining  outstanding  after  such
     redemption in part would not be subject to federal  income  taxation in the
     hands of persons other than a "substantial  user" or a "related  person" as
     those terms are used in Section  147(a)(2) of the Internal  Revenue Code of
     1986, as amended.

     In case of  redemption  of the 2029 PC Bond in  whole  for the  purpose  of
prepayment under the Loan Agreement  pursuant to subsections (a), (b), (c), (d),
(f), (g), (h) or (i) above,  the amounts  payable upon redemption of the 2029 PC
Bond shall be a sum  sufficient,  together with other funds  deposited  with the
City  Trustee and  available  for such  purpose,  to pay the  principal  of (and
premium,  in the case of redemption  pursuant to (f) above), and interest on the
2029 PC Bond then  outstanding  and to pay all reasonable and necessary fees and
expenses of the City Trustee  accrued and to accrue through final payment of the
2029 PC Bond.

     In case of redemption in part pursuant to (e), (f) or (i) above, the amount
payable by the Company under this Forty-Fifth  Supplemental Indenture,  the Loan
Agreement  and the 2029 PC Bond shall be a sum  sufficient,  together with other
funds  deposited  with the Trustee and available  for such  purpose,  to pay the
principal of (and premium in the case of  prepayment  pursuant to (f) above) and
interest on the 2029 PC Bond so to be redeemed,  which sum  together  with other
funds  deposited  with the City Trustee and  available for such purpose shall be
sufficient to pay the principal of, premium,  if any, and interest on the Series
1995C Bonds and to pay all  reasonable  and  necessary  fees and expenses of the
City Trustee accrued and to accrue through such partial prepayment.

     The 2029 PC Bond and the Series 1995C Bonds shall be redeemable at any time
within one hundred eighty (180) days following the event or events  described as
giving rise to an option of the Company to redeem them in subsections  (a), (b),
(c), (d) or (e) above.

     To exercise any of the options  granted to redeem the 2029 PC Bond in whole
or in part or to comply with any obligations to redeem the 2029 PC Bond in whole
or in part imposed in this Section 2, the Company  shall give written  notice of
the date of redemption  to the City  Trustee,  which date shall be not less than
thirty  (30) days nor more  than  sixty  (60)  days from the date the  notice is
mailed.  No further notice,  by publication or otherwise,  shall be required for
redemption  of the 2029 PC  Bond,  and the  requirements  of  Section  59 of the
Mortgage  for  notice by  newspaper  publication  shall not apply to the 2029 PC
Bond.

     At the option of the holder,  the 2029 PC Bond,  upon surrender  thereof at
the  office or agency of the  Company  in  Chicago,  Illinois,  together  with a
written  instrument of transfer in form approved by the Company duly executed by
the holder or by his duly authorized attorney,  shall be exchangeable for a like
aggregate principal amount of fully registered bonds of the same series of other
authorized denominations.

     The 2029 PC Bond will be  nontransferable  except to the City  Trustee  and
successors  thereto,  if  any,  and to the  Company.  To the  extent  that it is
transferable,  it is transferable by the registered holder thereof, in person or
by  attorney  duly  authorized  in  writing,  on the books of the Company at the
office or agency of the Company in the City of Chicago, Illinois, upon surrender
thereof  for  cancellation  at said  office and upon  presentation  of a written
instrument of transfer duly executed.  Thereupon, the Company shall issue in the
name of the transferee,  and the Trustee shall  authenticate and deliver,  a new
registered  2029 PC Bond,  in an  authorized  denomination,  of equal  principal
amount. Any such transfer shall be subject to the terms and conditions specified
in the Mortgage and in this Forty-Fifth Supplemental Indenture.

     The Company  shall not be required to transfer or exchange the 2029 PC Bond
for a period of ten (10) days next  preceding any interest  payment date of said
bond.

     Except as set forth  herein,  no charge  shall be made upon any transfer or
exchange  of any of the  2029 PC Bond  other  than for any tax or taxes or other
governmental charge required to be paid by the Company.

     The 2029 PC Bond  shall be  limited  to an  aggregate  principal  amount of
Thirty Million Dollars ($30,000,000) and shall be issued under the provisions of
Article VII of the Original Mortgage.

     SECTION 3. The 2029 PC Bond,  and the Trustee's  Certificate to be endorsed
thereon, shall be in the following forms, respectively:

                         [FORM OF FACE OF 2029 PC BOND]

     This First Mortgage Bond, 5.95% Series,  due 2029  (hereinafter  called the
"2029 PC Bond") is not  transferable  except to a  successor  trustee  under the
Indenture of Trust dated as of December 1, 1995, between the City of Petersburg,
Indiana and Bank One Trust  Company,  National  Association,  formerly Bank One,
Indianapolis, NA, as the Trustee, or to Indianapolis Power & Light Company.

                       INDIANAPOLIS POWER & LIGHT COMPANY

                   FIRST MORTGAGE BOND, 5.95% Series, Due 2029
                              Due December 1, 2029
No. 1                                                                $30,000,000

     INDIANAPOLIS  POWER & LIGHT COMPANY,  a corporation of the State of Indiana
(hereinafter called the "Company"),  for value received,  hereby promises to pay
Bank One Trust Company,  National Association,  formerly Bank One, Indianapolis,
NA, as the Trustee  (hereinafter  called the "City Trustee") under the Indenture
of Trust  between  the City of  Petersburg,  Indiana  (the  "City") and the City
Trustee,  dated as of  December  1, 1995 (the "City  Indenture")  or  registered
assigns,  on  December  1, 2029,  at the office of the  Company,  in the City of
Indianapolis,  State of Indiana,  or if no such office is maintained at the time
by the Company,  then at the office or agency of the Company for such purpose in
the City of Chicago, State of Illinois,  Thirty Million Dollars ($30,000,000) in
lawful money of the United States of America, and to pay to the registered owner
hereof interest  thereon from the first day of June or the first day of December
next  preceding  the date of this 2029 PC Bond (except  that the first  interest
payment  hereunder  shall be made on December 1, 2001 for the period from August
1,  2001  through  November  30,  2001),  at the  rate of five  and  ninety-five
hundreths  percent  (5.95%)  per annum in like  lawful  money at said  office or
agency on June 1 and  December 1 in each year,  until the  Company's  obligation
with respect to the payment of such principal  shall have been  discharged.  The
interest  payable  hereunder  on  June 1 or  December  1  will  be  paid  to the
registered owner of this 2029 PC Bond at or before the close of business on such
dates,  or if such date shall be a Saturday,  Sunday,  holiday or a day on which
banking  institutions  in the City of  Indianapolis  or the  city of any  paying
agents are authorized by law to close, on or before the close of business on the
next  succeeding  business day on which such banking  institutions  are open for
business.

     REFERENCE IS MADE TO THE FURTHER  PROVISIONS OF THIS 2029 PC BOND SET FORTH
ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE
SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.

     No recourse shall be had for the payment of the principal of or interest on
this  2029 PC 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,  as such,  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,  as such,  being waived and released by the terms of the
Mortgage, as herein defined.

     This 2029 PC Bond shall not become  obligatory until American National Bank
and Trust Company of Chicago, the Trustee under the Mortgage, as herein defined,
or its successor thereunder,  shall have signed the form of certificate endorsed
hereon.

     IN WITNESS WHEREOF, INDIANAPOLIS POWER & LIGHT COMPANY has caused this 2029
PC Bond to be signed in its name by its President or one of its Vice Presidents,
by his signature or a facsimile  thereof,  and its corporate  seal to be affixed
hereon,  attested by its Secretary or one of its Assistant  Secretaries,  by his
signature or a facsimile thereof.

                                            INDIANAPOLIS POWER & LIGHT COMPANY

Dated_______________                        By_______________________________
                                                                       President

Attest:
By_____________________________
                  Secretary

                 [FORM OF TRUSTEE'S CERTIFICATE ON 2029 PC BOND]

                              Trustee's Certificate

     This 2029 PC Bond is one of the  bonds,  of the series  herein  designated,
provided  for in the  within-mentioned  Mortgage  and  Forty-Fifth  Supplemental
Indenture thereto.

                                            AMERICAN NATIONAL BANK AND
                                            TRUST COMPANY OF CHICAGO
                                                              Trustee

                                            By_______________________________
                                                     Authorized Signature

<PAGE>
                     [FORM OF REVERSE SIDE OF 2029 PC BOND]

                       INDIANAPOLIS POWER & LIGHT COMPANY

                   FIRST MORTGAGE BOND, 5.95% Series, due 2029
                              Due December 1, 2029

     This 2029 PC Bond is one of an issue of bonds of the  Company,  issuable in
series,  and is one of a series known as its First Mortgage Bonds, 5.95% Series,
due 2029  (herein  called  the "2029 PC Bond")  limited in  aggregate  principal
amount to Thirty Million Dollars  ($30,000,000) and established by a Forty-Fifth
Supplemental  Indenture  dated as of August  1,  2001,  all bonds of all  series
issued and to be issued under and equally secured (except insofar as any sinking
or other fund,  established  in accordance  with the  provisions of the Mortgage
hereinafter  mentioned,  may  afford  additional  security  for the bonds of any
particular  series)  by a Mortgage  and Deed of Trust,  dated as of May 1, 1940,
executed by the Company to American  National Bank and Trust Company of Chicago,
as the Trustee (which Mortgage and Deed of Trust as supplemented and modified by
all  supplemental   indentures  thereto  is  hereinafter   referred  to  as  the
"Mortgage"),  to  which  Mortgage  reference  is made for a  description  of the
property  mortgaged  and  pledged,  the nature and extent of the  security,  the
rights of the  bearers  or  registered  owners of the bonds in  respect  of such
security,  the duties and immunities of the Trustee and the terms and conditions
upon which the bonds are secured.

     This  2029 PC Bond  evidences  and  secures  a loan made by the City to the
Company, pursuant to a Loan Agreement, dated as of December 1, 1995, between the
City and the Company (the "Loan  Agreement").  In order to obtain funds for such
loan, the City issued Thirty Million Dollars  ($30,000,000)  principal amount of
its Solid Waste Disposal Revenue Bonds, Series 1995C (Indianapolis Power & Light
Company  Project) (the "City  Bonds") under and pursuant to the City  Indenture.
The City Bonds are payable from  payments  made by the Company of principal  of,
premium,  if any,  and interest on this 2029 PC Bond and from moneys in the Bond
Fund created under the City Indenture.  The obligation of the Company to pay the
principal  of,  premium,  if any,  and  interest  on this 2029 PC Bond  shall be
discharged  to the extent  that any moneys in said Bond Fund are  available  for
payments  on the City  Bonds  and are  directed  by the  Company  to be  applied
thereto, all as provided in the Forty-Fifth Supplemental Indenture.

     This 2029 PC Bond is not  subject  to  redemption  prior to August 1, 2011,
except as provided in Section 2 of the Forty-Fifth  Supplemental  Indenture,  to
which reference is made for full description of redemption provisions.

     This 2029 PC Bond is subject to  redemption in whole or in part at any time
on or after August 1, 2011,  at the option of the Company,  upon at least thirty
(30)  days  prior  notice,  all  as  provided  in the  Forty-Fifth  Supplemental
Indenture, at a price equal to the principal amount of the 2029 PC Bond so to be
redeemed and accrued interest to the date of redemption, together with a premium
equal to a percentage of the principal  amount thereof set forth below under the
heading "Redemption Premium":

         If Redeemed During the Twelve Months
         Ending With the Thirty-first Day                     Redemption
         Of July of the Year Stated                           Premium
         ----------------------------------------------------------------

         2012                                                 2.0%
         2013                                                 1.5%
         2014                                                 1.0%
         2015                                                 0.5%

and without premium if redeemed after July 31, 2015.

     With the  consent  of the  Company  and to the extent  permitted  by and as
provided in the Mortgage,  the rights and  obligations  of the Company and/or of
the holders of the bonds and/or  coupons  and/or the terms and provisions of the
Mortgage and/or any instruments  supplemental thereto may be modified or altered
by affirmative vote of the holders of at least sixty-six and two-thirds  percent
(66-2/3%)  in principal  amount of the bonds  affected by such  modification  or
alteration then outstanding  under the Mortgage  (excluding  bonds  disqualified
from  voting by reason of the  Company's  interest  therein as  provided  in the
Mortgage);  provided that no such  modification  or alteration  shall permit the
extension of the maturity of the principal of this 2029 PC Bond or the reduction
in the rate of interest hereon or any other modification in the terms of payment
of such  principal  or interest  without the consent of the holder  hereof.  The
principal  hereof may be  declared  or may become due and  payable  prior to the
stated date of maturity hereof, on the conditions, in the manner and at the time
set forth in the Mortgage,  upon the occurrence of a completed default as in the
Mortgage provided.

     No reference herein to the Mortgage,  and no provision of this 2029 PC Bond
or of the Mortgage,  shall alter or impair the obligation of the Company,  which
is  absolute  and  unconditional,  to  pay,  subject  to the  provisions  of the
Forty-Fifth  Supplemental Indenture,  the principal of, and premium, if any, and
interest on this 2029 PC Bond at the place,  at the respective  times and at the
rate and the manner herein prescribed.

     This 2029 PC Bond is issuable only in full  registered form without coupons
in denominations  of Five Thousand Dollars ($5,000) and any larger  denomination
which is a whole multiple of Five Thousand Dollars ($5,000).

     This 2029 PC Bond will be  nontransferable  except to the City  Trustee and
successors  thereto,  if  any,  and to the  Company.  To the  extent  that it is
transferable,  it is transferable by the registered holder thereof, in person or
by  attorney  duly  authorized  in  writing,  on the books of the Company at the
office or agency of the Company in the City of Chicago, Illinois, upon surrender
thereof  for  cancellation  at said  office and upon  presentation  of a written
instrument of transfer duly executed.  Thereupon, the Company shall issue in the
name of the transferee,  and the Trustee shall  authenticate and deliver,  a new
registered  2029 PC Bond,  in an  authorized  denomination,  of equal  principal
amount. Any such transfer shall be subject to the terms and conditions specified
in the Mortgage and in the Forty-Fifth Supplemental Indenture.

     Upon  redemption of this 2029 PC Bond in part and surrender  thereof at the
office or agency of the Company in Chicago,  Illinois, for exchange, the Trustee
shall  authenticate  and deliver a new registered  2029 PC Bond in an authorized
denomination and principal  amount equal to the reduced  principal amount due on
that series after such partial redemption.

                           [END OF 2029 PC BOND FORM]

     SECTION 4. Until the 2029 PC Bond in definitive form is ready for delivery,
the Company  may  execute,  and upon its  request in writing  the Trustee  shall
authenticate  and deliver,  in lieu thereof,  a fully registered 2029 PC Bond in
temporary  form, as provided in Section 15 of the Original  Mortgage.  Such bond
may, in lieu of the statement of the specific  redemption  prices required to be
set  forth  in  such  bond in  definitive  form,  include  a  reference  to this
Forty-Fifth Supplemental Indenture for a statement of such redemption prices.

     SECTION  5.  The  Company  covenants  and  agrees  that  it will  duly  and
punctually pay to the holder of the 2029 PC Bond the principal thereof, premium,
if any,  and  interest  on said bond at the  dates  and place and in the  manner
mentioned therein; provided, however, that:

     (a)  the obligation of the Company to pay the principal of, and premium, if
   any, and interest on the 2029 PC Bond shall be  discharged to the extent that
   any moneys in the Bond Fund created under and pursuant to the City  Indenture
   are available  for the payment of the  principal  of, or premium,  if any, or
   interest  on the Series  1995C  Bonds and are  directed  by the Company to be
   applied to the payment  thereof in the manner  provided in the City Indenture
   on or  prior to the  dates  on  which  the  Company  is  required  to pay the
   principal of, or premium, if any, or interest on the 2029 PC Bond.

     (b)  Except as otherwise  provided in this Section 5, the principal  amount
   of any Series  1995C Bond  acquired by the Company and  delivered to the City
   Trustee,  or acquired by the City  Trustee and  cancelled,  shall be credited
   against the  obligation  of the Company to pay the  principal  of the 2029 PC
   Bond.

As the principal of,  premium,  if any, and interest on the 2029 PC Bond is paid
or deemed paid in full, and upon its receipt by the Company,  such bond shall be
delivered to the Trustee for cancellation. The Company shall promptly inform the
Trustee  of all  payments  made  and  credits  availed  of with  respect  to its
obligations  on the 2029 PC Bond. The Trustee shall not be required to recognize
any payment made or credit availed of with respect to any 2029 PC Bond unless it
has received (a) the bond for cancellation by it, or (b) a certificate signed by
a duly  authorized  officer of the City  Trustee  specifying  the amount of such
payment or credit and the  principal  amount of the 2029 PC Bond with respect to
which the  payment  or credit  was  applied.  In the  absence  of receipt by the
Trustee  of any 2029 PC Bond,  any such  certificate  shall be  controlling  and
conclusive.

     SECTION 6. The  covenant  of the  Company to make  annual  payments  to the
Trustee for a Maintenance and Improvement Fund as contained in Section 41 of the
Original  Mortgage and in the first twenty-four  Supplemental  Indentures to the
Original  Mortgage creating the several series of First Mortgage Bonds presently
outstanding under such Supplemental Indentures shall not apply to nor be for the
benefit of the 2029 PC Bond,  and the Company  reserves  the right,  without any
consent of, or other action by, the holder of the 2029 PC Bond, to amend, modify
or delete the  provisions  of the  Mortgage  relating  to such  Maintenance  and
Improvement Fund and by acceptance of the 2029 PC Bond the holder thereof waives
any right or  privilege  so to consent  or take any other  action  with  respect
thereto.

     SECTION 7. The Company  covenants  that,  so long as the 2029 PC Bond shall
remain  outstanding,  it will comply with all of the provisions of Section 47 of
the Original  Mortgage,  including the provisions with respect to limitations on
dividends and distributions and the purchase and redemption of stock.

     SECTION 8. The Trustee hereby accepts the trusts herein declared,  provided
and created and agrees to perform the same upon the terms and conditions  herein
and in the Mortgage set forth and upon the following terms and conditions:

     The  recitals  contained  herein  and in the  bonds  shall  be taken as the
statements  of the  Company and the Trustee  assumes no  responsibility  for the
correctness of the same. The Trustee makes no representations as to the validity
or adequacy  of the  security  afforded  hereby,  or as to the  validity of this
Forty-Fifth Supplemental Indenture or of the 2029 PC Bond issued hereunder.

     SECTION 9. Whenever in this  Forty-Fifth  Supplemental  Indenture either of
the  parties  hereto  is  named or  referred  to,  this  shall,  subject  to the
provisions  of Article XVII of the Original  Mortgage,  be deemed to include the
successors or assigns of such party,  and all the  covenants  and  agreements in
this  Forty-Fifth  Supplemental  Indenture  contained  by or on  behalf  of  the
Company, or by or on behalf of the Trustee,  shall,  subject as aforesaid,  bind
and inure to the  benefit  of the  respective  successors  and  assigns  of such
parties, whether so expressed or not.

     SECTION 10. Nothing in this Forty-Fifth Supplemental Indenture expressed or
implied,  is intended or shall be construed  to confer upon,  or to give to, any
person,  co-partnership  or  corporation,  other than the parties hereto and the
holders of the bonds and  coupons  outstanding  under the  Mortgage,  any right,
remedy, or claim under or by reason of this Forty-Fifth  Supplemental  Indenture
or any  covenant,  condition  or  stipulation  hereof;  and all  the  covenants,
conditions,   stipulations,   promises  and   agreements  in  this   Forty-Fifth
Supplemental Indenture contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto and of the holders of the bonds
and of the coupons outstanding under the Mortgage.

     SECTION 11. The Company  covenants  that all of the terms,  provisions  and
conditions  of the  Mortgage  shall be  applicable  to the  2029 PC Bond  issued
hereunder,  except as herein  otherwise  provided and except insofar as the same
may be  inconsistent  with  the  provisions  of  this  Forty-Fifth  Supplemental
Indenture.

     SECTION 12. This Forty-Fifth  Supplemental  Indenture is dated as of August
1, 2001,  although  executed and  delivered  on the date of the  acknowledgement
hereof by the Trustee;  and shall be  simultaneously  executed and  delivered in
several counterparts,  and all such counterparts executed and delivered, each as
an original, shall constitute but one and the same instrument.

     IN WITNESS WHEREOF,  INDIANAPOLIS POWER & LIGHT COMPANY, party of the first
part, has caused its corporate name to be hereunto  affixed and this  instrument
to be signed and  acknowledged  by its  President or a  Vice-President,  and its
corporate  seal  to be  hereto  affixed  and  attested  by its  Secretary  or an
Assistant Secretary, for and in its behalf, and AMERICAN NATIONAL BANK AND TRUST
COMPANY  OF  CHICAGO,  party of the  second  part,  as  Trustee,  has caused its
corporate  name to be  hereunto  affixed  and this  instrument  to be signed and
acknowledged  by one of its  Authorized  Officers,  and its corporate seal to be
hereto  affixed and attested by one of its  Authorized  Officers,  all as of the
day, month and year first above written.

                                            INDIANAPOLIS POWER & LIGHT
                                            COMPANY,

                                            By /s/WILLIAM H. HENLEY
                                              ---------------------------------
(SEAL)                                         WILLIAM H. HENLEY,
                                               President
Attest:

By: /s/WILLIAM R. DODDS
   -------------------------------
    WILLIAM R. DODDS,
    Secretary
                                            AMERICAN NATIONAL BANK AND
                                            TRUST COMPANY OF CHICAGO

                                            By /s/ROBERT M. SELANGOWSKI
                                              ----------------------------------
                                               ROBERT M. SELANGOWSKI,
                                               Authorized Officer
Attest:
                                                                          (SEAL)

By: /s/F. HENRY KLESCHEN
   -------------------------------
    F. HENRY KLESCHEN,
    Authorized Officer
<PAGE>

STATE OF INDIANA  )
                  )  SS:
COUNTY OF MARION  )

     On this 26th day of July,  in the year 2001,  before me, a Notary Public in
and for the County  and State  aforesaid,  personally  came  WILLIAM H.  HENLEY,
President  and  WILLIAM  R.  DODDS,  Secretary,  of  Indianapolis  Power & Light
Company,  one of the corporations  described in and which executed the foregoing
instrument,  to me  personally  known  and  known  to me  personally  to be such
President  and  Secretary,  respectively.  Said WILLIAM H. HENLEY and WILLIAM R.
DODDS being by me severally  duly sworn did depose and say that the said WILLIAM
H.  HENLEY  resides  in Marion  County,  Indiana  and the said  WILLIAM R. DODDS
resides in Fulton County, Illinois; that said WILLIAM H. HENLEY is President and
said WILLIAM R. DODDS is Secretary of said  Indianapolis  Power & Light Company;
that each of them knows the corporate  seal of said  corporation;  that the seal
affixed to said  instrument  and  bearing the name of said  corporation  is such
corporate  seal;  that it was so affixed by order of the Board of  Directors  of
said  corporation;  and that each of them signed his name thereto by like order;
and each of them acknowledged the execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and the free and voluntary
act and deed of said corporation, for the uses and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 26th day of July, 2001.

                                                /s/DINAH L. KIRKHAM
                                                --------------------------------
                                                DINAH L. KIRKHAM,
                                                        Notary Public

My Commission Expires:
         June 23, 2008

My County of Residence is:
         Johnson
                                                                 (NOTARIAL SEAL)
<PAGE>

STATE OF ILLINOIS )
                  )  SS:
COUNTY OF COOK    )

     On this 26th day of July,  in the year 2001,  before me, a Notary Public in
and for the County and State  aforesaid,  personally came ROBERT M.  SELANGOWSKI
and F. HENRY KLESCHEN,  Authorized  Officers of American National Bank and Trust
Company of Chicago, one of the corporations  described in and which executed the
foregoing  instrument,  to me personally  known and known to me personally to be
such  Authorized  Officers.  Said ROBERT M.  SELANGOWSKI  and F. HENRY KLESCHEN,
being  by me  severally  sworn  did  depose  and say that  the  said  ROBERT  M.
SELANGOWSKI  resides in Lansing,  Illinois,  and that the said F. HENRY KLESCHEN
resides in Evanston, Illinois; that said ROBERT M. SELANGOWSKI and said F. HENRY
KLESCHEN,  are  Authorized  Officers of said  American  National  Bank and Trust
Company  of  Chicago;  that  each  of  them  knows  the  corporate  seal of said
corporation;  that the seal affixed to said  instrument  and bearing the name of
said  corporation is such corporate seal; that it was so affixed by authority of
the Board of  Directors of said  corporation;  that each of them signed his name
thereto by like authority;  and each of them  acknowledged the execution of said
instrument  on behalf of said  corporation  to be his free and voluntary act and
deed and the free and voluntary act and deed of said  corporation,  for the uses
and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 26th day of July, 2001.

                                                /s/KATHLEEN A. WHITE
                                                --------------------------------
                                                KATHLEEN A. WHITE,
                                                      Notary Public
My Commission Expires:
         February 9, 2002
My County of Residence is:
         Cook

(NOTARIAL SEAL)

                         This instrument was prepared by
                                 BRIANE M. HOUSE
<PAGE>

                                    RECORDING DATA

          Forty-Fifth Supplemental Indenture Dated as of August 1, 2001

                                                    Instrument         Recording
County            Record...         Page             No.               Date
--------------------------------------------------------------------------------

Bartholomew       ---               ---              200100009898      7/27/2001
Boone             ---               ---              0109137           7/27/2001
Daviess           ---               ---              01-3598           7/27/2001
Gibson            ---               ---              200100005590      7/27/2001
Greene            Inden. Bk. 27     71-97            200100004076      7/27/2001
Hamilton          ---               ---              200100046497      7/27/2001
Hancock           ---               ---              0110424           7/27/2001
Hendricks         Mtg. Rec. 261     762-788          200100021809      7/27/2001
Johnson           ---               ---              2001-022711       7/27/2001
Knox              Mtg. Rec. 554     570-596          5737              7/27/2001
Madison           ---               ---              200117486         7/27/2001
Marion            ---               ---              2001-0130010      7/27/2001
Monroe            ---               ---              2001015473        7/27/2001
Morgan            ---               ---              20111811          7/27/2001
Owen              Mtg. Rec. IC      550-576          138716            7/27/2001
Pike              Mtg. Rec. 306     296-322          01-1785           7/27/2001
Putnam            ---               ---              2001005423        7/27/2001
Shelby            ---               ---              0106332           7/27/2001
Sullivan          Mtg. Rec. 258     979              012793            7/27/2001
Switzerland       Mtg. Rec. 133     27               8808              7/27/2001

<PAGE>

                                                                  Exhibit 4.4.16

                                                                [CONFORMED COPY]
================================================================================

                       INDIANAPOLIS POWER & LIGHT COMPANY
                                       TO
                        AMERICAN NATIONAL BANK AND TRUST
                               COMPANY OF CHICAGO
                                                Trustee

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

                       Forty-Sixth Supplemental Indenture

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

                           Dated as of August 1, 2001

                       ESTABLISHING FIRST MORTGAGE BONDS,
                             5.95% Series, Due 2030

================================================================================
<PAGE>

                               TABLE OF CONTENTS*

                                       of
                       FORTY-SIXTH SUPPLEMENTAL INDENTURE
                                       of
                       INDIANAPOLIS POWER & LIGHT COMPANY

                                                                            Page

PARTIES........................................................................1
RECITALS ......................................................................1
SECTION 1       Granting clauses...............................................3
                    Part I   Electric Distributing Systems.....................4
                    Part II Reserved...........................................4
                    Part III Indeterminate Permits and Franchises..............4
                    Part IV  Other Property....................................5
                    General and after-acquired title...........................6
SECTION 2       Designation of Forty-Sixth series of bonds and kind and
                    denominations thereof .....................................6
                Designation of Company or American National Bank and Trust
                    Company of Chicago as paying agent.........................6
                Purpose of bonds...............................................7
                Redemption of bonds............................................7
                Exchange of bonds.............................................12
                Transfer of bonds.............................................12
                Series limited to $17,350,000.................................13
SECTION 3       Form of fully registered bond.................................13
                Form of Trustee's certificate on bonds........................15
SECTION 4       Temporary bonds...............................................19
SECTION 5       Payment of principal and interest; credits....................19
SECTION 6       Annual Payments for Maintenance and Improvement Fund..........20
SECTION 7       Compliance with Section 47 of Original Mortgage with
                   respect to dividend restrictions...........................20
SECTION 8       Acceptance of trusts by Trustee and conditions of
                   Acceptance.................................................20
-------------------
*    Table of Contents is not part of the Forty-Sixth Supplemental Indenture and
     should not be considered  such. It is included  herein only for purposes of
     convenient reference.

<PAGE>

                                                                            Page

SECTION 9         Successors and assigns......................................20
SECTION 10        Limitation of rights hereunder..............................21
SECTION 11        Compliance with terms, provisions
                        and conditions of Mortgage............................21
SECTION 12        Execution in counterparts...................................21

TESTIMONIUM...................................................................22
SIGNATURES AND SEALS..........................................................22
ACKNOWLEDGEMENTS..............................................................22

<PAGE>

     THIS  FORTY-SIXTH  SUPPLEMENTAL  INDENTURE,  dated as of  August  1,  2001,
between  INDIANAPOLIS  POWER & LIGHT  COMPANY,  a  corporation  of the  State of
Indiana,  hereinafter  sometimes  called the "Company," party of the first part,
and AMERICAN  NATIONAL  BANK AND TRUST  COMPANY OF CHICAGO,  a national  banking
association,  as Trustee,  hereinafter  sometimes called the "Trustee," party of
the second part;

     Whereas, the Company by a Mortgage and Deed of Trust (hereinafter sometimes
called  the  "Original  Mortgage"  when  referred  to as  existing  prior to any
supplement thereto or modification  thereof, and the "Mortgage" when referred to
as now or heretofore supplemented and modified) dated as of May 1, 1940, made to
said American National Bank and Trust Company of Chicago,  as Trustee, to secure
the  payment of the bonds  issued from time to time under the  Mortgage  for the
purposes of and subject to the  limitations  specified in the  Mortgage,  and to
secure the  performance  of the  covenants  therein  contained,  conveyed to the
Trustee  thereunder  upon certain  trusts,  terms and  conditions,  and with and
subject to certain provisos and covenants  therein  contained,  all and singular
the  property,  rights and  franchises  which the  Company  then owned or should
thereafter  acquire,  excepting the property  expressly excepted by the terms of
the Original Mortgage or any indenture  supplemental  thereto, to which Mortgage
reference is hereby made for greater certainty; and

     WHEREAS,  the  Original  Mortgage  has been  supplemented  and  modified by
supplemental  indentures  dated as of May 1, 1942, as of February 1, 1948, as of
April 1, 1949, as of October 1, 1949 (two),  as of February 1, 1951, as of March
1, 1953,  as of June 1, 1956,  as of March 1, 1958, as of October 1, 1960, as of
August 1, 1964, as of April 1, 1966, as of May 1, 1967, as of May 1, 1968, as of
October 1, 1970,  as of March 1, 1972,  as of March 15, 1973, as of February 15,
1974, as of August 15, 1974, as of September 15, 1975, as of June 1, 1976, as of
July 1, 1976,  as of August 1, 1977,  as of September  1, 1978,  as of August 1,
1981 (two),  as of November 1, 1983,  as of November 1, 1984,  as of December 1,
1984,  as of September 1, 1985, as of October 1, 1986, as of June 1, 1989, as of
August 1, 1989,  as of October 15,  1991,  as of August 1, 1992,  as of April 1,
1993, as of October 1, 1993 (two),  as of February 1, 1994 (two),  as of January
15, 1995, as of October 1, 1995 and as of August 1, 2001 (three); and

     WHEREAS,  Section 8 of the Original Mortgage provides,  among other things,
that the form of each series of bonds  (other  than the initial  issue of bonds)
issued  thereunder  shall be  established by an indenture  supplemental  thereto
authorized by resolution of the Board of Directors of the Company,  and that the
form of each series, as established by the Board of Directors, shall specify the
descriptive  title of the bonds and various  other terms  thereof,  and may also
contain such other  provisions as the Board of Directors may, in its discretion,
cause to be inserted therein expressing or referring to the terms and conditions
upon which such bonds are to be issued and secured  under the Original  Mortgage
or any indenture supplemental thereto or in modification thereof; and

     WHEREAS,  the Company entered into a Loan Agreement,  dated as of September
1, 1999, as amended and  supplemented  by the First  Supplement and Amendment to
Loan Agreement dated as of August 1, 2001 (together hereinafter called the "Loan
Agreement") with the Indiana Development Finance Authority (the "Authority"), in
order to obtain funds for the  refunding of the  aggregate  principal  amount of
Twenty Three  Million Five Hundred  Thousand  ($23,500,000)  Indiana  Employment
Development  Commission  (the  "Commission")  Exempt  Facilities  Revenue Bonds,
Series  1989  (Indianapolis  Power  &  Light  Company  Project)  issued  by  the
Commission  pursuant to related  loan  agreements  to finance  the  acquisition,
construction,   installation   and  equipping  of  certain   pollution   control
facilities,  sewage  facilities,  solid  waste  disposal  facilities  and  local
district  heating or cooling  facilities (the  "Project") at various  generating
stations,  a service  center  and  service  area of  Indianapolis  Power & Light
Company located  throughout the State of Indiana and the issuance of $23,500,000
(of which  $17,350,000  remain  outstanding)  aggregate  principal amount of the
Authority's Exempt Facilities Revenue Refunding Bonds, Series 1999 (Indianapolis
Power & Light Company Project) (the "Bonds"); and

     WHEREAS, the Company has elected to convert the applicable interest rate on
the Bonds to the Long Term  Interest  Rate  effective as of August 1, 2001,  and
pursuant to the Loan Agreement,  the Company has agreed to issue a series of its
bonds under the Mortgage and this Forty-Sixth Supplemental Indenture in order to
evidence and secure its indebtedness under the Loan Agreement; and

     WHEREAS,  the  Company  now  desires  to  provide  for  the  establishment,
execution,  authentication  and delivery under the Mortgage of bonds of a series
to be known as its "First Mortgage Bonds,  5.95% Series, due 2030" (the bonds of
said  series  being  hereinafter  sometimes  referred to as the "2030 PC Bond"),
limited to the  aggregate  principal  amount of Seventeen  Million Three Hundred
Fifty Thousand Dollars ($17,350,000); and

     WHEREAS,  all  things  necessary  to make  the  2030  PC  Bond  hereinafter
described,  when duly executed by the Company and authenticated and delivered by
the Trustee, a valid,  binding and legal obligation of the Company,  and to make
this  Forty-Sixth   Supplemental   Indenture  a  valid  and  binding   agreement
supplemental to the Original Mortgage, have been done and performed; and

     WHEREAS,  the  execution  and  delivery by the Company of this  Forty-Sixth
Supplemental  Indenture,  and the  terms  of the 2030 PC Bond,  have  been  duly
authorized by the Board of Directors of the Company by  appropriate  resolutions
of said Board; and

     WHEREAS,  it is provided in and by the Original  Mortgage  that the Company
will execute and deliver such  further  instruments  and do such further acts as
may be  necessary  or proper to carry out more  effectively  the purposes of the
Mortgage,  and to make  subject  to the lien  thereof  any  property  thereafter
acquired and intended to be subject to the lien thereof; and

     WHEREAS,  the Company has,  since the date of execution and delivery of the
Original  Mortgage,   purchased  and  acquired  property  and  desires  by  this
Forty-Sixth  Supplemental  Indenture  specifically to convey to the Trustee such
property  for the better  protection  and security of the bonds issued and to be
issued under the Original Mortgage, or any indenture supplemental thereof;

     NOW,  THEREFORE,  THIS INDENTURE  WITNESSETH  that, in consideration of the
premises and of the acceptance or purchase of the 2030 PC Bond by the registered
owners thereof, and of the sum of one dollar,  lawful money of the United States
of America,  to the Company duly paid by the Trustee at or before the  execution
and delivery of this Forty-Sixth  Supplemental Indenture, the receipt whereof is
hereby  acknowledged,  the Company and the Trustee,  respectively,  have entered
into, executed and delivered this Forty-Sixth  Supplemental  Indenture,  for the
uses and purposes hereinafter expressed, that is to say:

     SECTION 1. The Company has granted,  bargained,  sold, released,  conveyed,
assigned, transferred,  mortgaged, pledged, set over and confirmed, and by these
presents does grant, bargain, sell, release, convey, assign, transfer, mortgage,
pledge,  set over and confirm (subject,  however,  to permitted  encumbrances as
defined in the Original  Mortgage),  unto said American  National Bank and Trust
Company of Chicago,  as Trustee,  as herein provided,  and its successors in the
trusts declared in the Original Mortgage and herein, all of the property,  real,
personal  and mixed,  tangible  and  intangible,  of every kind,  character  and
description  which the Company has acquired  since the execution and delivery of
the  Original  Mortgage and now owns  (except  property,  rights and assets of a
character  similar to that  excluded from the lien and operation of the Mortgage
by the Granting  Clauses of the Original  Mortgage,  which property,  rights and
assets are excluded  from the lien and  operation  of the  Mortgage  only to the
extent  provided  therein),   including,  but  without  otherwise  limiting  the
generality of the foregoing,  the following  described  property situated within
the State of Indiana:

                                     PART I.
                         ELECTRIC DISTRIBUTING SYSTEMS.

     All electric  distributing  systems of the Company acquired by it after May
1, 1940,  the date of the  Original  Mortgage,  and  located in the  Counties of
Bartholomew,  Boone, Daviess,  Gibson,  Greene,  Hamilton,  Hancock,  Hendricks,
Johnson,  Knox, Madison,  Marion,  Monroe,  Morgan, Owen, Pike, Putnam,  Shelby,
Sullivan and Switzerland,  State of Indiana;  and any additions to or extensions
of any  such  systems,  together  with  the  buildings,  erections,  structures,
transmission lines, power stations, sub-stations,  engines, boilers, condensers,
pumps, turbines,  machinery,  tools, conduits,  manholes,  insulators,  dynamos,
motors,  lamps, cables,  wires, poles,  towers,  cross-arms,  piers,  abutments,
switchboard   equipment,    meters,    appliances,    instruments,    apparatus,
appurtenances,  maps, records, ledgers, contracts, facilities and other property
or  equipment  used or provided  for use in  connection  with the  construction,
maintenance, repair and operation thereof; together also with all of the rights,
privileges, rights-of-way,  franchises, licenses, grants, liberties, immunities,
ordinances, permits and easements of the Company in respect of the construction,
maintenance, repair and operation of said systems.

                                    PART II.
                                   [Reserved]

                                    PART III.
                      INDETERMINATE PERMITS AND FRANCHISES.

     All indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations by or from any state, county, municipality, or other governmental
authority,  acquired by the Company after May 1, 1940,  the date of the Original
Mortgage, including particularly,  but not limited to, any indeterminate permits
under the Public Service  Commission  Act of the State of Indiana,  and all Acts
amendatory thereof and supplemental  thereto,  and all right, title and interest
therein now owned by the Company, and all renewals, extensions and modifications
of said  indeterminate  permits,  franchises,  ordinances,  licenses,  and other
authorizations,  and  of  the  indeterminate  permits,  franchises,  ordinances,
licenses,  and  other  authorizations  referred  to in Part VII of the  Granting
Clauses of the Original Mortgage.

                                    PART IV.
                                 OTHER PROPERTY.

     All other  property,  whether  real,  personal or mixed  (except any in the
Mortgage expressly excepted), now owned by the Company and wheresoever situated,
including  (without in anywise  limiting or impairing by the  enumeration of the
same the  scope  and  intent  of the  foregoing  or of any  general  description
contained in the  Mortgage) all lands,  flowage  rights,  water rights,  flumes,
raceways,  dams,  rights-of-way  and roads;  all plants  for the  generation  of
electricity by water, steam and/or other power, power houses, telephone systems,
water systems, power plants, hot water plants, sub-stations, transmission lines,
distribution systems, bridges,  culverts and tracts; all offices,  buildings and
structures and the equipment thereof; all machinery,  engines, boilers, dynamos,
machines,   regulators,   meters,  transformers,   generators  and  motors;  all
appliances whether electrical,  gas or mechanical,  conduits,  cables and lines;
all pipes whether for water, and power, or other purposes;  all mains and pipes,
service  pipes,   fittings,   valves  and  connections,   poles,  wires,  tools,
implements,   apparatus,  furniture  and  chattels;  all  municipal  franchises,
indeterminate  permits,  and other  permits;  all lines for the  transportation,
transmission and/or distribution of electric current, and power or water for any
purpose,  including  towers,  poles,  wires,  cables,  pipes,  conduits  and all
apparatus  for use in  connection  therewith;  all real estate,  lands,  leases,
leaseholds; all contracts,  whether heat, light, power, water or street lighting
contracts;  all  easements,   servitudes,  licenses,  permits,  rights,  powers,
franchises,  privileges,  rights-of-way  and other rights in or relating to real
estate  or the  occupancy  of the  same and  (except  as  hereinafter  or in the
Mortgage expressly excepted) all the right, title and interest of the Company in
and to all other  property  of any kind or nature  appertaining  to and/or  used
and/or  occupied  and/or  enjoyed in connection  with any property  hereinbefore
described or referred to;

     Together   with  all  and  singular  the   tenements,   hereditaments   and
appurtenances  belonging or in anywise appertaining to the aforesaid property or
any part thereof,  with the reversion and  reversions,  remainder and remainders
and  (subject to the  provisions  of Section 64 of the Original  Mortgage),  the
tolls, rents, revenues,  issues, earnings,  income, product and profits thereof,
and all the estate,  right,  title and 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, indeterminate permits, franchises,  ordinances, licenses
and other authorizations and every part and parcel thereof.

     SECTION  2.  There  shall be and is hereby  established  a series of bonds,
limited in aggregate  principal amount to Seventeen  Million Three Hundred Fifty
Thousand  Dollars  ($17,350,000) to be issued under and secured by the Mortgage,
to be designated  "5.95%  Series,  due 2030",  each of which shall also bear the
descriptive  title "First Mortgage Bonds";  said bonds shall mature on AUGUST 1,
2030, and shall be issued only as fully  registered bonds without coupons in the
denomination  of five thousand  dollars and any larger  denomination  which is a
whole  multiple of five  thousand  dollars;  they shall bear  interest  from the
beginning of the current interest period during which each bond is dated, at the
rate per  annum  designated  in the title  thereof,  payable  semi-annually,  on
February 1 and August 1 of each year  (except  that the first  interest  payment
thereon  shall be made  February  1,  2002 for the  period  from  August 1, 2001
through January 31, 2002);  and the principal of, premium,  if any, and interest
on said bond shall be payable in lawful money of the United States of America at
the office of the Company in the City of Indianapolis,  Indiana,  or, if no such
office is  maintained,  at American  National Bank and Trust Company of Chicago,
which is hereby designated and appointed the office and agency of the Company in
the City of Chicago,  Illinois, for the payment of the principal of, premium, if
any, and interest on the 2030 PC Bond, if necessary,  and for the  registration,
transfer and exchange of such bond as hereinafter provided; all reference herein
to the office or agency of the Company in the City of Chicago, Illinois, for the
payment of the principal of, premium,  if any, and interest on the 2030 PC Bond,
or the registration,  transfer or exchange  thereof,  being to American National
Bank and Trust Company of Chicago.  In event of the  resignation or inability to
act of American  National  Bank and Trust  Company of Chicago,  then a successor
agent for all such purposes in the City of Chicago, Illinois, shall be appointed
by the Board of Directors of the Company.

     The 2030 PC Bond shall be dated as of the date of  authentication  thereof,
except as otherwise provided in Section 10 of the Original Mortgage.

     The  2030 PC Bond  will be  issued  to  evidence  and  secure a loan to the
Company  by the  Authority  pursuant  to the Loan  Agreement  of  certain  funds
previously acquired by the Authority through the issuance of Indiana Development
Finance  Authority  Exempt  Facilities  Revenue  Refunding  Bonds,  Series  1999
(Indianapolis  Power  &  Light  Company  Project)  (the  "Series  1999  Bonds"),
authenticated and delivered under and pursuant to an Indenture of Trust dated as
of September 1, 1999, as amended and  supplemented  by the First  Supplement and
Amendment to Indenture of Trust dated as of August 1, 2001 (together hereinafter
called the "Authority Indenture"), by and between National City Bank of Indiana,
as  Trustee  (the  "Authority  Trustee")  and  the  Authority.  Pursuant  to the
Authority's  pledge and  assignment of the Loan  Agreement,  as set forth in the
Authority  Indenture,  the 2030 PC Bond  shall be  issued to the  Authority  and
assigned to the Authority Trustee.  All of the proceeds of the Series 1999 Bonds
were used for the  refunding of the aggregate  principal  amount of Twenty Three
Million  Five  Hundred  Thousand   ($23,500,000)   of  the  Indiana   Employment
Development  Commission  (the  "Commission")  Exempt  Facilities  Revenue Bonds,
Series  1989  (Indianapolis  Power  &  Light  Company  Project)  issued  by  the
Commission pursuant to applicable loan agreements.

     Upon the notice and in the  manner  and with the  effect  provided  in this
Section 2, the 2030 PC Bond shall be  redeemable  prior to the maturity  thereof
under any one or more of the following circumstances:

(a)  In part,  at the option of the  Company,  if any Project  component  or the
     facilities  serviced  thereby  shall have been damaged or destroyed to such
     extent  that (i) it cannot be  reasonably  expected,  in the opinion of the
     Company,  to be restored within a period of six (6) months to the condition
     thereof immediately  preceding such damage or destruction,  or (ii) to such
     extent that the Company,  in its reasonable  opinion,  is thereby prevented
     from  carrying on its normal  operations  for a period of six (6) months or
     more,  or (iii) to such extent that the  restoration  thereof would not be,
     taking into  consideration  the net proceeds of any insurance  payable as a
     result of such damage or destruction, economic in the reasonable opinion of
     the Company.

(b)  In part,  at the option of the Company,  if title to, or the  temporary use
     of, all or  substantially  all of any Project  component or the  facilities
     serviced thereby,  shall have been taken under the exercise of the power of
     eminent  domain,  or should any  governmental  body or agency  exercise any
     right which it may have to purchase or  designate a purchaser  of the same,
     or should such property be sold to any governmental  body or agency so that
     the  result  of such  taking or  takings  is that (i) the  Company,  in its
     reasonable  opinion,  is  thereby  prevented  from  carrying  on its normal
     operations  for a period of six (6)  months or more,  (ii) the  restoration
     required as a result of the taking  cannot be reasonably  expected,  in the
     opinion of the Company,  to be completed in a period of six (6) months,  or
     (iii) the restoration  thereof,  taking into consideration the net proceeds
     from such eminent  domain  award,  would not be economic in the  reasonable
     opinion of the Company.

(c)  In whole,  at the option of the Company,  if, as a result of any changes in
     the  Constitution or law of the State of Indiana or the Constitution or law
     of the United States of America or of legislative or administrative  action
     (whether  state or  federal) or by final  decree,  judgment or order of any
     court or administrative body (whether state or federal) the Loan Agreement,
     the Note or the 2030 PC Bond shall,  in the  reasonable  opinion of counsel
     for the  Company,  have  become  void or  unenforceable  or  impossible  of
     performance  in  accordance  with the intent and  purpose of the parties as
     expressed  in the Loan  Agreement;  or  unreasonable  burdens or  excessive
     liabilities  shall,  in the  reasonable  opinion of the Company,  have been
     imposed upon the  Authority or the Company,  with respect to the Project or
     operation thereof,  including without limitation federal, state or other ad
     valorem,  property,  income or other taxes not being imposed on the date of
     the Loan  Agreement  other  than ad valorem  taxes  presently  levied  upon
     privately owned property used for the same general purpose as the Project.

(d)  In  part,  at the  option  of  the  Company,  if  changes  in the  economic
     availability of raw materials,  operating supplies or facilities  necessary
     for the operation of any Project  component or facilities  serviced thereby
     shall have occurred or  technological  or other changes shall have occurred
     which render the facilities uneconomic for use in the reasonable opinion of
     the Company.

(e)  In part,  at the  option of the  Company,  to the  extent of net  proceeds,
     received from any condemnation  award,  taking or sale as stated herein, if
     title to, or the  temporary  use of any portion of the  Project  shall have
     been taken under the exercise of the power of eminent domain, or should any
     governmental  body or  agency  exercise  any  right  which  it may  have to
     purchase or designate a purchaser of the same,  or should such  property be
     sold to any governmental body or agency; provided the Company shall furnish
     to the Authority and the Authority  Trustee a certificate of an Independent
     Engineer (as defined in the Loan Agreement) selected by the Company stating
     (i) that the  property  forming the part of the  Project  that was taken by
     such  condemnation,  taking or sale is not  essential  to the  character or
     significance of the Project, or (ii) that the Project have been restored to
     a condition substantially equivalent to their condition prior to the taking
     by  such   condemnation,   taking  or  sale  proceedings,   or  (iii)  that
     improvements have been acquired which are suitable for the operation of the
     Project as qualified exempt facilities.

(f)  In whole or in part,  at the option of the  Company at any time on or after
     August 1, 2011,  at a price  equal to the  principal  amount of the 2030 PC
     Bond so to be  redeemed  and accrued  interest  to the date of  redemption,
     together  with a premium  equal to a  percentage  of the  principal  amount
     thereof set forth under the heading "Redemption Premium" in the form of the
     2030 PC Bond hereinafter  recited, so long as the Company is not in default
     under the Loan Agreement or the 2030 PC Bond.

(g)  In the event all or substantially all of the mortgaged and pledged property
     under the Mortgage,  or all or substantially  all such property used in the
     business  of   generating,   manufacturing,   transporting,   transmitting,
     distributing or supplying  electricity,  should be taken by exercise of the
     power of eminent domain, or should any governmental body or agency exercise
     any right  which it may have to purchase  or  designate a purchaser  of the
     same, or should such property be sold to any  governmental  body or agency,
     the Company  shall be obligated to redeem the 2030 PC Bond  outstanding  as
     promptly as possible in  accordance  with  paragraph B of Section 69 of the
     Original  Mortgage.

(h)  In the event that the Company is notified by the Authority Trustee that (i)
     an event of default  under the  Authority  Indenture  has  occurred  and is
     continuing,  and (ii) the  Authority  Trustee has declared the principal of
     all the Series  1999 Bonds then  outstanding  immediately  due and  payable
     pursuant to the Authority Indenture, the Company shall call for redemption,
     on a  redemption  date  selected  by it not  later  than  thirty  (30) days
     following  the  date on  which  such  notice  is  mailed,  the 2030 PC Bond
     outstanding,  and shall on such redemption date redeem the same;  provided,
     however,  that such  requirement of redemption  shall be deemed waived,  if
     prior to the date  fixed for such  redemption  of the 2030 PC Bond (x) such
     event  of  default  is  waived  or  cured  as set  forth  in the  Authority
     Indenture,  or (y) there  shall have  occurred  any  completed  default (as
     defined in the Mortgage)  which affects any bond of any series  outstanding
     under the Mortgage and which completed  default has not been cured and made
     good prior to such  redemption  date,  it being the intent of this  proviso
     that, in lieu of such right to  redemption,  the holder of the 2030 PC Bond
     shall be entitled  only to such rights as are  available  to the holders of
     bonds of any other  series  outstanding  under the Mortgage in the event of
     such  completed  default;  and in  case  of any  subsequent  occurrence  or
     continuance  of the events  described in (i) and (ii) of this Section 2(h),
     the Company shall have the same obligation (subject to the same proviso) to
     redeem the 2030 PC Bond.

(i)  The  Company  shall call the 2030 PC Bond then  outstanding  to be redeemed
     within one hundred eighty (180) days after the date of the Company receives
     written notice from a bondholder,  a beneficial owner or former  bondholder
     or former  beneficial owner, the Authority Trustee or the tender agent of a
     final determination by the Internal Revenue Service or a court of competent
     jurisdiction  that,  as a result of a failure by the Company to perform any
     of  its  agreements  in  the  Agreement  or  the  inaccuracy  of any of its
     representations  in the  Agreement,  the interest paid or to be paid on any
     Series  1999 Bond  (except  to a  "substantial  user" of the  Project  or a
     "related  person" as those terms are used in Section 147(a) of the Internal
     Revenue Code of 1986, as amended, (the "Code")) is or was includable in the
     gross  income of the  Series  1999  Bond's  owner for  federal  income  tax
     purposes (a "Determination of Taxability").  No such  determination will be
     considered   final  unless  the  bondholder,   beneficial   owner,   former
     bondholder,  or former beneficial owner involved in the determination  give
     the Company,  the  Authority  Trustee and the tender  agent prompt  written
     notice  of  the   commencement   of  the   proceedings   resulting  in  the
     determination and offers the Company,  subject to the Company's agreeing to
     pay all  reasonable  expenses of the proceeding and to indemnify the holder
     against all liabilities that might result in connection with the Bonds, the
     opportunity  to control the defense of the  proceeding.  Fewer than all the
     2030 PC Bonds may be redeemed if  redemption of fewer than all would result
     in the  interest  payable on the Series  1999 Bonds  remaining  outstanding
     being not includable in the gross income for federal income tax purposes of
     any holder other than a  "substantial  user" or "related  person." If fewer
     than all Series  1999 Bonds are  redeemed,  the  Registrar  will select the
     bonds to be redeemed by lot as provided in the  Authority  Indenture  or by
     such other  method  acceptable  to the  Registrar as may be specified in an
     Opinion  of Tax  Counsel.  Provided,  however,  that  such  requirement  of
     redemption, whether in whole or in part shall be deemed waived if, prior to
     the date fixed for  redemption of the 2030 PC Bond pursuant to this Section
     2(i),  there shall have occurred any  completed  default (as defined in the
     Mortgage)  which  affects  any bond of any  series  outstanding  under  the
     Mortgage and which completed default has not been cured and made good prior
     to such redemption  date, it being the intent of this proviso that, in lieu
     of such  right to  redemption,  the  holder  of the  2030 PC Bond  shall be
     entitled  only to such rights as are  available  to the holders of bonds of
     any  other  series  outstanding  under  the  Mortgage  in the event of such
     completed  default;  but when any such  completed  default  shall have been
     cured and made good,  if  interest  on the Series 1999 Bonds shall still be
     taxable as  described  above,  the Company  shall have the same  obligation
     (subject to the same proviso) to redeem the 2030 PC Bond within one hundred
     eighty  (180)  days after the  curing  and  making  good of such  completed
     default. IF THE LIEN OF THE INDENTURE IS DISCHARGED PRIOR TO THE OCCURRENCE
     OF A FINAL  DETERMINATION  OF TAXABILITY,  THE BONDS WILL NOT BE REDEMED AS
     DESCRIBED IN THIS PARAGRAPH.

(j)  In part,  if any  governmental  body or agency  order the Company to divest
     itself or as a result of any legislative or administrative  action (whether
     state or federal) or by final decree, judgment or the order of any court or
     administrative  body  (whether  state  or  federal)  the  Company  shall be
     required  to  divest  itself  of all or  substantially  all of any  Project
     component or the facilities services thereby.

     In case of  redemption  of the 2030 PC Bond in  whole  for the  purpose  of
prepayment under the Loan Agreement  pursuant to subsections (a), (b), (c), (d),
(f), (g), (h), (i) or (j) above, the amounts payable upon redemption of the 2030
PC Bond shall be a sum sufficient,  together with other funds deposited with the
Authority  Trustee and available for such purpose,  to pay the principal of (and
premium,  in the case of redemption  pursuant to (f) above), and interest on the
2030 PC Bond then  outstanding  and to pay all reasonable and necessary fees and
expenses of the Authority Trustee accrued and to accrue through final payment of
the 2030 PC Bond.

     In case of  redemption  in part pursuant to (a), (b), (d), (e), (f), (i) or
(j) above, the amount payable by the Company under this Forty-Sixth Supplemental
Indenture,  the Loan  Agreement and the 2030 PC Bond shall be a sum  sufficient,
together  with other funds  deposited  with the Trustee and  available  for such
purpose, to pay the principal of (and premium in the case of prepayment pursuant
to (f)  above) and  interest  on the 2030 PC Bond so to be  redeemed,  which sum
together with other funds deposited with the Authority Trustee and available for
such purpose shall be sufficient to pay the principal of,  premium,  if any, and
interest on the Series 1999 Bonds and to pay all  reasonable  and necessary fees
and expenses of the Authority Trustee accrued and to accrue through such partial
prepayment.

     The principal amount of the 2030 PC Bond subject to redemption  pursuant to
(a), (b), (d) and (j) above will be an amount equal to the amount of proceeds of
the 2030 PC Bond  allocated  to the  Project  component  affected by the related
event, rounded up to the nearest $5,000 increment.

     The 2030 PC Bond and the Series 1999 Bonds shall be  redeemable at any time
within one hundred eighty (180) days following the event or events  described as
giving rise to an option of the Company to redeem them in subsections  (a), (b),
(c), (d), (e) or (f) above.

     To exercise any of the options  granted to redeem the 2030 PC Bond in whole
or in part or to comply with any obligations to redeem the 2030 PC Bond in whole
or in part imposed in this Section 2, the Company  shall give written  notice of
the date of redemption to the  Authority  Trustee,  which date shall be not less
than thirty (30) days from the date the notice is mailed.  No further notice, by
publication or otherwise,  shall be required for redemption of the 2030 PC Bond,
and the  requirements  of Section  59 of the  Mortgage  for notice by  newspaper
publication shall not apply to the 2030 PC Bond.

     At the option of the holder,  the 2030 PC Bond,  upon surrender  thereof at
the  office or agency of the  Company  in  Chicago,  Illinois,  together  with a
written  instrument of transfer in form approved by the Company duly executed by
the holder or by his duly authorized attorney,  shall be exchangeable for a like
aggregate principal amount of fully registered bonds of the same series of other
authorized denominations.

     The 2030 PC Bond will be  nontransferable  except to the Authority  Trustee
and  successors  thereto,  if any, and to the Company.  To the extent that it is
transferable,  it is transferable by the registered holder thereof, in person or
by  attorney  duly  authorized  in  writing,  on the books of the Company at the
office or agency of the Company in the City of Chicago, Illinois, upon surrender
thereof  for  cancellation  at said  office and upon  presentation  of a written
instrument of transfer duly executed.  Thereupon, the Company shall issue in the
name of the transferee,  and the Trustee shall  authenticate and deliver,  a new
registered  2030 PC Bond,  in an  authorized  denomination,  of equal  principal
amount. Any such transfer shall be subject to the terms and conditions specified
in the Mortgage and in this Forty-Sixth Supplemental Indenture.

     The Company  shall not be required to transfer or exchange the 2030 PC Bond
for a period of ten (10) days next  preceding any interest  payment date of said
bond.

     Except as set forth  herein,  no charge  shall be made upon any transfer or
exchange  of any of the  2030 PC Bond  other  than for any tax or taxes or other
governmental charge required to be paid by the Company.

     The 2030 PC Bond  shall be  limited  to an  aggregate  principal  amount of
Seventeen  Million Three Hundred Fifty Thousand Dollars  ($17,350,000) and shall
be issued under the provisions of Article VII of the Original Mortgage.

     SECTION 3. The 2030 PC Bond,  and the Trustee's  Certificate to be endorsed
thereon, shall be in the following forms, respectively:

                         [FORM OF FACE OF 2030 PC BOND]

     This First Mortgage Bond, 5.95% Series,  due 2030  (hereinafter  called the
"2030 PC Bond") is not  transferable  except to a  successor  trustee  under the
Indenture  of  Trust  dated  as  of  September  1,  1999,  between  the  Indiana
Development Finance Authority and National City Bank of Indiana, as the Trustee,
as supplemented  and amended by the First  Supplement and Amendment to Indenture
of Trust dated as of August 1, 2001, or to Indianapolis Power & Light Company.

                       INDIANAPOLIS POWER & LIGHT COMPANY

                   FIRST MORTGAGE BOND, 5.95% Series, Due 2030
                               Due August 1, 2030

No. 1                                                                $17,350,000

     INDIANAPOLIS  POWER & LIGHT COMPANY,  a corporation of the State of Indiana
(hereinafter called the "Company"),  for value received,  hereby promises to pay
National  City Bank of Indiana,  as the  Trustee  under the  Indenture  of Trust
between the Indiana  Development  Finance  Authority  and National  City Bank of
Indiana dated as of September 1, 1999, or registered assigns, on August 1, 2030,
at the office of the Company, in the City of Indianapolis,  State of Indiana, or
if no such office is maintained  at the time by the Company,  then at the office
or agency of the  Company  for such  purpose  in the City of  Chicago,  State of
Illinois,  Seventeen Million Three Hundred Fifty Thousand Dollars  ($17,350,000)
in lawful money of the United  States of America,  and to pay to the  registered
owner hereof interest thereon from the first day of February or the first day of
August  next  preceding  the date of this  2030 PC Bond  (except  that the first
interest payment hereunder shall be made on February 1, 2002 for the period from
August 1, 2001 through  January 31, 2002),  at the rate of five and  ninety-five
hundreths  percent  (5.95%)  per annum in like  lawful  money at said  office or
agency on February 1 and August 1 in each year,  until the Company's  obligation
with respect to the payment of such principal  shall have been  discharged.  The
interest  payable  hereunder  on  February  1 or  August  1 will  be paid to the
registered owner of this 2030 PC Bond at or before the close of business on such
dates,  or if such date shall be a Saturday,  Sunday,  holiday or a day on which
banking  institutions  in the City of  Indianapolis  or any  paying  agents  are
authorized  by law to close,  on or before  the  close of  business  on the next
succeeding  business  day on  which  such  banking  institutions  are  open  for
business.

     REFERENCE IS MADE TO THE FURTHER  PROVISIONS OF THIS 2030 PC BOND SET FORTH
ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE
SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS PLACE.

     No recourse shall be had for the payment of the principal of or interest on
this  2030 PC 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,  as such,  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,  as such,  being waived and released by the terms of the
Mortgage, as herein defined.

     This 2030 PC Bond shall not become  obligatory until American National Bank
and Trust Company of Chicago, the Trustee under the Mortgage, as herein defined,
or its successor thereunder,  shall have signed the form of certificate endorsed
hereon.

     IN WITNESS WHEREOF, INDIANAPOLIS POWER & LIGHT COMPANY has caused this 2030
PC Bond to be signed in its name by its President or one of its Vice Presidents,
by his signature or a facsimile  thereof,  and its corporate  seal to be affixed
hereon,  attested by its Secretary or one of its Assistant  Secretaries,  by his
signature or a facsimile thereof.

                                            INDIANAPOLIS POWER & LIGHT COMPANY

Dated_______________                        By_______________________________
                                                                   President
Attest:

By_____________________________
                  Secretary

                 [FORM OF TRUSTEE'S CERTIFICATE ON 2030 PC BOND]

                              Trustee's Certificate

     This 2030 PC Bond is one of the  bonds,  of the series  herein  designated,
provided  for in the  within-mentioned  Mortgage  and  Forty-Sixth  Supplemental
Indenture thereto.

                                            AMERICAN NATIONAL BANK AND
                                            TRUST COMPANY OF CHICAGO
                                                             Trustee

                                            By________________________________
                                                     Authorized Signature

                     [FORM OF REVERSE SIDE OF 2030 PC BOND]

                       INDIANAPOLIS POWER & LIGHT COMPANY

                   First Mortgage Bond, 5.95% Series, due 2030
                               Due August 1, 2030

     This 2030 PC Bond is one of an issue of bonds of the  Company,  issuable in
series,  and is one of a series known as its First Mortgage Bonds, 5.95% Series,
due 2030  (herein  called  the "2030 PC Bond")  limited in  aggregate  principal
amount to Seventeen  Million Three Hundred Fifty Thousand Dollars  ($17,350,000)
and  established by a Forty-Sixth  Supplemental  Indenture dated as of August 1,
2001, all bonds of all series issued and to be issued under and equally  secured
(except insofar as any sinking or other fund, established in accordance with the
provisions of the Mortgage hereinafter mentioned, may afford additional security
for the bonds of any particular  series) by a Mortgage and Deed of Trust,  dated
as of May 1, 1940,  executed by the Company to American  National Bank and Trust
Company  of  Chicago,  as the  Trustee  (which  Mortgage  and  Deed of  Trust as
supplemented and modified by all supplemental  indentures thereto is hereinafter
referred  to as the  "Mortgage"),  to  which  Mortgage  reference  is made for a
description of the property mortgaged and pledged,  the nature and extent of the
security, the rights of the bearers or registered owners of the bonds in respect
of such  security,  the duties and  immunities  of the Trustee and the terms and
conditions upon which the bonds are secured.

     This  2030  PC Bond  evidences  and  secures  a loan  made  by the  Indiana
Development Finance Authority (the "Authority"),  to the Company,  pursuant to a
Loan  Agreement,  dated as of September 1, 1999,  between the  Authority and the
Company  (the  "Loan  Agreement"),  as  supplemented  and  amended  by the First
Supplement and Amendment to Loan Agreement  dated as of August 1, 2001,  between
the  Company  and the  Authority.  In order to obtain  funds for such loan,  the
Authority  contemporaneously  with the  issue of this 2030 PC Bond,  will  issue
Seventeen Million Three Hundred Fifty Thousand Dollars  ($17,350,000)  principal
amount  of  its  Exempt  Facilities   Revenue   Refunding  Bonds,   Series  1999
(Indianapolis  Power & Light Company Project) (the "Authority  Bonds") under and
pursuant to an Indenture of Trust, dated as of September 1, 1999 (the "Authority
Indenture")  between the Authority and National City Bank of Indiana, as Trustee
(the "Authority  Trustee"),  as supplemented and amended by the First Supplement
and  Amendment  to  Indenture  of Trust dated as of August 1, 2001,  between the
Authority and the Trustee. The Authority Bonds are payable from payments made by
the Company of principal of, premium,  if any, and interest on this 2030 PC Bond
and from moneys in the Bond Fund  created  under the  Authority  Indenture.  The
obligation of the Company to pay the principal of, premium, if any, and interest
on this 2030 PC Bond shall be  discharged  to the extent that any moneys in said
Bond Fund are available for payments on the Authority  Bonds and are directed by
the  Company  to  be  applied  thereto,  all  as  provided  in  the  Forty-Sixth
Supplemental Indenture.

     This 2030 PC Bond is not  subject  to  redemption  prior to August 1, 2011,
except as provided in Section 2 of the Forty-Sixth  Supplemental  Indenture,  to
which reference is made for full description of redemption provisions.

     This 2030 PC Bond is subject to  redemption in whole or in part at any time
on or after August 1, 2011,  at the option of the Company,  upon at least thirty
(30)  days  prior  notice,  all  as  provided  in the  Forty-Sixth  Supplemental
Indenture, at a price equal to the principal amount of the 2030 PC Bond so to be
redeemed and accrued interest to the date of redemption, together with a premium
equal to a percentage of the principal  amount thereof set forth below under the
heading "Redemption Premium":

         If Redeemed During the Twelve Months
         Ending With the Thirty-first Day                     Redemption
         Of July of the Year Stated                           Premium
         ----------------------------------------------------------------

         2012                                                 1.0%
         2013                                                 0.5%

and without premium if redeemed after July 31, 2013.

     With the  consent  of the  Company  and to the extent  permitted  by and as
provided in the Mortgage,  the rights and  obligations  of the Company and/or of
the holders of the bonds and/or  coupons  and/or the terms and provisions of the
Mortgage and/or any instruments  supplemental thereto may be modified or altered
by affirmative vote of the holders of at least sixty-six and two-thirds  percent
(66-2/3%)  in principal  amount of the bonds  affected by such  modification  or
alteration then outstanding  under the Mortgage  (excluding  bonds  disqualified
from  voting by reason of the  Company's  interest  therein as  provided  in the
Mortgage);  provided that no such  modification  or alteration  shall permit the
extension of the maturity of the principal of this 2030 PC Bond or the reduction
in the rate of interest hereon or any other modification in the terms of payment
of such  principal  or interest  without the consent of the holder  hereof.  The
principal  hereof may be  declared  or may become due and  payable  prior to the
stated date of maturity hereof, on the conditions, in the manner and at the time
set forth in the Mortgage,  upon the occurrence of a completed default as in the
Mortgage provided.

     No reference herein to the Mortgage,  and no provision of this 2030 PC Bond
or of the Mortgage,  shall alter or impair the obligation of the Company,  which
is  absolute  and  unconditional,  to  pay,  subject  to the  provisions  of the
Forty-Sixth  Supplemental Indenture,  the principal of, and premium, if any, and
interest on this 2030 PC Bond at the place,  at the respective  times and at the
rate and the manner herein prescribed.

     This 2030 PC Bond is issuable only in full  registered form without coupons
in denominations  of Five Thousand Dollars ($5,000) and any larger  denomination
which is a whole multiple of Five Thousand Dollars ($5,000).

     This 2030 PC Bond will be  nontransferable  except to the Authority Trustee
and  successors  thereto,  if any, and to the Company.  To the extent that it is
transferable,  it is transferable by the registered holder thereof, in person or
by  attorney  duly  authorized  in  writing,  on the books of the Company at the
office or agency of the Company in the City of Chicago, Illinois, upon surrender
thereof  for  cancellation  at said  office and upon  presentation  of a written
instrument of transfer duly executed.  Thereupon, the Company shall issue in the
name of the transferee,  and the Trustee shall  authenticate and deliver,  a new
registered  2030 PC Bond,  in an  authorized  denomination,  of equal  principal
amount. Any such transfer shall be subject to the terms and conditions specified
in the Mortgage and in the Forty-Sixth Supplemental Indenture.

     Upon  redemption of this 2030 PC Bond in part and surrender  thereof at the
office or agency of the Company in Chicago,  Illinois, for exchange, the Trustee
shall  authenticate  and deliver a new registered  2030 PC Bond in an authorized
denomination and principal  amount equal to the reduced  principal amount due on
that series after such partial redemption.

                           [END OF 2030 PC BOND FORM]

     SECTION 4. Until the 2030 PC Bond in definitive form is ready for delivery,
the Company  may  execute,  and upon its  request in writing  the Trustee  shall
authenticate  and deliver,  in lieu thereof,  a fully registered 2030 PC Bond in
temporary  form, as provided in Section 15 of the Original  Mortgage.  Such bond
may, in lieu of the statement of the specific  redemption  prices required to be
set  forth  in  such  bond in  definitive  form,  include  a  reference  to this
Forty-Sixth Supplemental Indenture for a statement of such redemption prices.

     SECTION  5.  The  Company  covenants  and  agrees  that  it will  duly  and
punctually pay to the holder of the 2030 PC Bond the principal thereof, premium,
if any,  and  interest  on said bond at the  dates  and place and in the  manner
mentioned therein; provided, however, that:

     (a)  the obligation of the Company to pay the principal of, and premium, if
   any, and interest on the 2030 PC Bond shall be  discharged to the extent that
   any  moneys in the Bond Fund  created  under and  pursuant  to the  Authority
   Indenture are  available for the payment of the principal of, or premium,  if
   any, or interest on the Series 1999 Bonds and are  directed by the Company to
   be applied to the payment  thereof in the manner  provided  in the  Authority
   Indenture  on or prior to the dates on which the  Company is  required to pay
   the principal of, or premium, if any, or interest on the 2030 PC Bond.

     (b)  Except as otherwise  provided in this Section 5, the principal  amount
   of any  Series  1999  Bond  acquired  by the  Company  and  delivered  to the
   Authority Trustee, or acquired by the Authority Trustee and cancelled,  shall
   be credited against the obligation of the Company to pay the principal of the
   2030 PC Bond.

As the principal of,  premium,  if any, and interest on the 2030 PC Bond is paid
or deemed paid in full, and upon its receipt by the Company,  such bond shall be
delivered to the Trustee for cancellation. The Company shall promptly inform the
Trustee  of all  payments  made  and  credits  availed  of with  respect  to its
obligations  on the 2030 PC Bond. The Trustee shall not be required to recognize
any payment made or credit availed of with respect to any 2030 PC Bond unless it
has received (a) the bond for cancellation by it, or (b) a certificate signed by
a duly authorized officer of the Authority Trustee specifying the amount of such
payment or credit and the  principal  amount of the 2030 PC Bond with respect to
which the  payment  or credit  was  applied.  In the  absence  of receipt by the
Trustee  of any 2030 PC Bond,  any such  certificate  shall be  controlling  and
conclusive.

     SECTION 6. The  covenant  of the  Company to make  annual  payments  to the
Trustee for a Maintenance and Improvement Fund as contained in Section 41 of the
Original  Mortgage and in the first twenty-four  Supplemental  Indentures to the
Original  Mortgage creating the several series of First Mortgage Bonds presently
outstanding under such Supplemental Indentures shall not apply to nor be for the
benefit of the 2030 PC Bond,  and the Company  reserves  the right,  without any
consent of, or other action by, the holder of the 2030 PC Bond, to amend, modify
or delete the  provisions  of the  Mortgage  relating  to such  Maintenance  and
Improvement Fund and by acceptance of the 2030 PC Bond the holder thereof waives
any right or  privilege  so to consent  or take any other  action  with  respect
thereto.

     SECTION 7. The Company  covenants  that,  so long as the 2030 PC Bond shall
remain  outstanding,  it will comply with all of the provisions of Section 47 of
the Original  Mortgage,  including the provisions with respect to limitations on
dividends and distributions and the purchase and redemption of stock.

     SECTION 8. The Trustee hereby accepts the trusts herein declared,  provided
and created and agrees to perform the same upon the terms and conditions  herein
and in the Mortgage set forth and upon the following terms and conditions:

     The  recitals  contained  herein  and in the  bonds  shall  be taken as the
statements  of the  Company and the Trustee  assumes no  responsibility  for the
correctness of the same. The Trustee makes no representations as to the validity
or adequacy  of the  security  afforded  hereby,  or as to the  validity of this
Forty-Sixth Supplemental Indenture or of the 2030 PC Bond issued hereunder.

     SECTION 9. Whenever in this  Forty-Sixth  Supplemental  Indenture either of
the  parties  hereto  is  named or  referred  to,  this  shall,  subject  to the
provisions  of Article XVII of the Original  Mortgage,  be deemed to include the
successors or assigns of such party,  and all the  covenants  and  agreements in
this  Forty-Sixth  Supplemental  Indenture  contained  by or on  behalf  of  the
Company, or by or on behalf of the Trustee,  shall,  subject as aforesaid,  bind
and inure to the  benefit  of the  respective  successors  and  assigns  of such
parties, whether so expressed or not.

     SECTION 10. Nothing in this Forty-Sixth Supplemental Indenture expressed or
implied,  is intended or shall be construed  to confer upon,  or to give to, any
person,  co-partnership  or  corporation,  other than the parties hereto and the
holders of the bonds and  coupons  outstanding  under the  Mortgage,  any right,
remedy, or claim under or by reason of this Forty-Sixth  Supplemental  Indenture
or any  covenant,  condition  or  stipulation  hereof;  and all  the  covenants,
conditions,   stipulations,   promises  and   agreements  in  this   Forty-Sixth
Supplemental Indenture contained by or on behalf of the Company shall be for the
sole and exclusive benefit of the parties hereto and of the holders of the bonds
and of the coupons outstanding under the Mortgage.

     SECTION 11. The Company  covenants  that all of the terms,  provisions  and
conditions  of the  Mortgage  shall be  applicable  to the  2030 PC Bond  issued
hereunder,  except as herein  otherwise  provided and except insofar as the same
may be  inconsistent  with  the  provisions  of  this  Forty-Sixth  Supplemental
Indenture.

     SECTION 12. This Forty-Sixth  Supplemental  Indenture is dated as of August
1, 2001,  although  executed and  delivered  on the date of the  acknowledgement
hereof by the Trustee;  and shall be  simultaneously  executed and  delivered in
several counterparts,  and all such counterparts executed and delivered, each as
an original, shall constitute but one and the same instrument.

     IN WITNESS WHEREOF,  INDIANAPOLIS POWER & LIGHT COMPANY, party of the first
part, has caused its corporate name to be hereunto  affixed and this  instrument
to be signed and  acknowledged  by its  President or a  Vice-President,  and its
corporate  seal  to be  hereto  affixed  and  attested  by its  Secretary  or an
Assistant Secretary, for and in its behalf, and AMERICAN NATIONAL BANK AND TRUST
COMPANY  OF  CHICAGO,  party of the  second  part,  as  Trustee,  has caused its
corporate  name to be  hereunto  affixed  and this  instrument  to be signed and
acknowledged  by one of its  Authorized  Officers,  and its corporate seal to be
hereto  affixed and attested by one of its  Authorized  Officers,  all as of the
day, month and year first above written.

                                            INDIANAPOLIS POWER & LIGHT
                                            COMPANY,

                                            By: /s/ WILLIAM H. HENLEY
                                               ---------------------------------
(SEAL)                                          WILLIAM H. HENLEY,
                                                President
Attest:

By: /s/WILLIAM R. DODDS
   ----------------------------------
    WILLIAM R. DODDS,
    Secretary
                                            AMERICAN NATIONAL BANK AND
                                            TRUST COMPANY OF CHICAGO

                                            By: /s/ ROBERT M. SELANGOWSKI
                                                --------------------------------
                                                ROBERT M. SELANGOWSKI,
                                                Authorized Officer
Attest:
(SEAL)

By: /s/F. HENRY KLESCHEN
   ---------------------------------
    F. HENRY KLESCHEN,
    Authorized Officer
<PAGE>

STATE OF INDIANA  )
                  )  SS:
COUNTY OF MARION  )

     On this 26th day of July,  in the year 2001,  before me, a Notary Public in
and for the County  and State  aforesaid,  personally  came  WILLIAM H.  HENLEY,
President  and  WILLIAM  R.  DODDS,  Secretary,  of  Indianapolis  Power & Light
Company,  one of the corporations  described in and which executed the foregoing
instrument,  to me  personally  known  and  known  to me  personally  to be such
President  and  Secretary,  respectively.  Said WILLIAM H. HENLEY and WILLIAM R.
DODDS being by me severally  duly sworn did depose and say that the said WILLIAM
H.  HENLEY  resides  in Marion  County,  Indiana  and the said  WILLIAM R. DODDS
resides in Fulton County, Illinois; that said WILLIAM H. HENLEY is President and
said WILLIAM R. DODDS is Secretary of said  Indianapolis  Power & Light Company;
that each of them knows the corporate  seal of said  corporation;  that the seal
affixed to said  instrument  and  bearing the name of said  corporation  is such
corporate  seal;  that it was so affixed by order of the Board of  Directors  of
said  corporation;  and that each of them signed his name thereto by like order;
and each of them acknowledged the execution of said instrument on behalf of said
corporation to be his free and voluntary act and deed and the free and voluntary
act and deed of said corporation, for the uses and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 26th day of July, 2001.

                                                /s/DINAH L. KIRKHAM
                                                --------------------------------
                                                DINAH L. KIRKHAM,
                                                      Notary Public

My Commission Expires:
         June 23, 2008

My County of Residence is:
         Johnson
                                                                 (NOTARIAL SEAL)
<PAGE>

STATE OF ILLINOIS )
                  )  SS:
COUNTY OF COOK    )

     On this 26th day of July,  in the year 2001,  before me, a Notary Public in
and for the County and State  aforesaid,  personally came ROBERT M.  SELANGOWSKI
and F. HENRY KLESCHEN,  Authorized  Officers of American National Bank and Trust
Company of Chicago, one of the corporations  described in and which executed the
foregoing  instrument,  to me personally  known and known to me personally to be
such  Authorized  Officers.  Said ROBERT M.  SELANGOWSKI  and F. HENRY KLESCHEN,
being  by me  severally  sworn  did  depose  and say that  the  said  ROBERT  M.
SELANGOWSKI  resides in Lansing,  Illinois,  and that the said F. HENRY KLESCHEN
resides in Evanston, Illinois; that said ROBERT M. SELANGOWSKI and said F. HENRY
KLESCHEN,  are  Authorized  Officers of said  American  National  Bank and Trust
Company  of  Chicago;  that  each  of  them  knows  the  corporate  seal of said
corporation;  that the seal affixed to said  instrument  and bearing the name of
said  corporation is such corporate seal; that it was so affixed by authority of
the Board of  Directors of said  corporation;  that each of them signed his name
thereto by like authority;  and each of them  acknowledged the execution of said
instrument  on behalf of said  corporation  to be his free and voluntary act and
deed and the free and voluntary act and deed of said  corporation,  for the uses
and purposes therein set forth.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed my official
seal this 26th day of July, 2001.

                                                /s/KATHLEEN A. WHITE
                                                --------------------------------
                                                KATHLEEN A. WHITE,
                                                      Notary Public

My Commission Expires:
         February 9, 2002
My County of Residence is:
         Cook

                                                                 (NOTARIAL SEAL)

                         This instrument was prepared by
                                 BRIANE M. HOUSE
<PAGE>

                                    RECORDING DATA

             Forty-Sixth Supplemental Indenture Dated as of August 1, 2001

                                                     Instrument        Recording
County            Record            Page             No.               Date
--------------------------------------------------------------------------------

Bartholomew       ---               ---              200100009899      7/27/2001
Boone             ---               ---              0109138           7/27/2001
Daviess           ---               ---              01-3599           7/27/2001
Gibson            ---               ---              200100005591      7/27/2001
Greene            Inden. Bk. 27     98-124           200100004077      7/27/2001
Hamilton          ---               ---              200100046498      7/27/2001
Hancock           ---               ---              0110425           7/27/2001
Hendricks         Mtg. Rec. 261     735-761          200100021808      7/27/2001
Johnson           ---               ---              2001-022712       7/27/2001
Knox              Mtg. Rec. 554     597-622          5738              7/27/2001
Madison           ---               ---              200117487         7/27/2001
Marion            ---               ---              2001-0130011      7/27/2001
Monroe            ---               ---              2001015474        7/27/2001
Morgan            ---               ---              20111812          7/27/2001
Owen              Mtg. Rec. IC      577-603          138717            7/27/2001
Pike              Mtg. Rec. 307     1-27             01-1786           7/27/2001
Putnam            ---               ---              2001005424        7/27/2001
Shelby            ---               ---              0106333           7/27/2001
Sullivan          Mtg. Rec. 258     980              012794            7/27/2001
Switzerland       Mtg. Rec. 133     28               8809              7/27/2001

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